Cave Creek Water Committee Charts Uncertain Path on Privatization, Phoenix Interconnect, and Colorado River Cuts

this call to the public. Any members of the public need to say anything or want to say anything? I I David Cops, it's a work session, I understand, but uh when we get down into the weeds of the budget and stuff, I think there's some challenges to the numbers presented and I'd just like to be able to respond at more appropriate time. Just just be clear. This is not a work session. This is a committee meeting, right? The but the way this the structure is on your Yeah.

Well, we're we're just public comment anywhere else. Yeah. No, no. Oh, I No, I understand. This is this is so No, I appreciate that. If you've got some uh the agenda item is moreformational for us. Um, super. And so that's just so could I just put up my hand if I get to the point where I think more information? Sure. If you'd like to make comments during a particular item, you're certainly welcome to do that. Appreciate it. Thank you. Okay. Any other general comments for the public?

Okay, then we'll go. No new business. And um since the items A and C Sean oh Sean's just coming in is probably has some input on. So um item C is the status of town C uh cap water supply and ongoing efforts to supplement water resources. Um I know this was an item all three of these were on the last agenda and there were some discussion on all of it.

Uh I know that uh the southern states have put forth a new proposal or an amended proposal if you will u uh trying to bridge for the next two years that that came out uh early May. U I don't know if that impacts anything the town is anticipating or expecting um at this point or it's too early to tell. Um, it's too early to tell what's going on right now. Um, yeah, we're watching everything we can.

You know, we are a small fish and big pond in relation to CFP water rights and trying to deal with issues. We are trying to look at multiple things right now. Um, including a project that Phoenix announced of trying to do some water exchanges that would create a basically a water market for anybody who has any any unused water cap that we could buy in a municipal uh capacity.

So, um, yeah, the the, um, proposals by the southern states, the lower basin states still need to go through Bureau of Reclamation. So, um, we're still waiting for the Bureau of Reclamation make their final determination of what the numbers will be next year.

So it is very frustrating right now because um everybody you know there's been some documents released including B reclamation did their environmental impact statement uh which uh in that document they basically said the lower basin states have to take it uh and take all the cuts and different versions of how bad that could be. So now the lower basin states have been arguing did not yeah follow the the um original compact on the Colorado River at all.

So, um, yeah, it's very, uh, challenging and frustrating right now because there is no certainty. We're trying to keep all of the town's options open. Uh, the two biggest ones that we're really focused on are some water exchange agreements that we have. We're hopeful that the one with the city of Puria will come forward this next month uh, to get adopted. It's going to their council actually, I think, on the 16th and we'll probably have a special session then following uh, week.

I think on the 24th is what's being discussed right now for us to um, agree to it. We want their council to to agree to it and then um approve it and then we'll counter sign it. Who's that with Sean? City of Purium. Puria. Okay. And that's to allow us to do a water exchange with Puria. We actually have water credits stored in a cap facility um that uh uh uh city of Poria has a mechanism to get out on our behalf.

So, and then we're also working on a similar agreement with a a city of a or a city of surprise. they've told us that they can't take it to their council till August. So, that's really that's not the only solution we have, but that's probably the most viable one we have in place that we get access to our long-term storage credits through the two mechanisms while we figure out um other long-term augmentations.

Some some uh shorter term augmentations have been discussed again the city of Phoenix exchange program that they discussed. Uh we'd have to join on to that and no costs have been discussed on that though. Sorry. Um, you you mentioned earlier the Phoenix was taking a look at a water market, you know, and that's something that that really appealed to me. I was going to suggest it that we talked to them about buying our our amount is just rounding, you know, to them.

But if they could supply us, you know, just a little bit excess from there, whatever the price is, um, and we have the hookup now, which should facilitate the transfer, um, you know, that might be a good in the hole for us. Yeah.

Again, Phoenix, we've had a discussion for a while with Phoenix, and they keep us in the loop that they were trying to deal with a project that would allow exchange of um uh um Colorado River uh irrigation rights, which actually in some cases are higher priority than the the Colorado River uh the cap river rights, and uh doing some water exchanges that involve the city of Tucson. So, um yeah, we're we're excited to be part of that, that they're considering that.

We have talked to him overall about wholesaling of water. They haven't wanted to go too far with that conversation at this point. Yeah. But they are keeping us in in in mind with these other solutions that they're working with. Maybe they'll take pity on a small little town to the north and and uh you know help us out. Yeah. You if you talk to them again, we are a small proportional flow to what they have.

But um in reality, if you look at all the pressures that everybody has, no one until we know what the cuts are coming, we really don't know what everybody's planning towards. There's some scary scenarios that people are trying to plan around right now, you know, like no cap water, you know, how how would you make that work? So, so it's it's frustrating not having that determination coming down from the the federal government.

Um, as far as no cap water, uh, any progress on the three wells that you've been trying to rehabilitate? Uh, some progress has been made. The, uh, the, um, the well line extension underneath the wall, uh, at the treatment plant has been done. So we actually have a valve in the line now and we've actually been mapping out and testing actually the well line through the town core. Uh in the first set of tests we actually found a or created a leak. So now we have to go back and fix that.

So staff have to go back into it. So but we do actually have a way of getting the um the water now from the right well into the well line and then also to isolate that with a valve to the south. uh we have uh Black & Beach is engaged to help us get the numbers together to understand um uh to give us the parameters of the pump and motor sizes that we need out there and then we'll start pricing that out. So we had a meeting with them last week on that.

So right now the there's no pump or motor in any of the wells that you're no looking at. No. So the one good thing is that the the the what we refer to as the right well which is on the water treatment plant site, there is already a power circuit that's set aside for it that's actually at the plant site.

So, um the other two, um the the triangle well, which actually is well placed from a standpoint of um it could be used to augment the golf course demand um because the golf course fill line runs right in front of this in front of that site as well as the uh the um uh the raw water line which then would allow that water to come back to the treatment plant. Um that one has to go all the way from the ground up.

So what we need to do and we have a scope of work with Black & Beach is to to do enough of design that allows us to get pricing and also make the submitt so we can start the process with APS to get the new power circuits for that site done. The Linda site um on Linda Drive south of K uh uh Crick Road actually has two existing meter sockets.

So we actually probably need to reach out and I can do that this week to APS to have them come out and look at them and see if either of those can be re-energized anytime soon. Um there's a transformer right adjacent to the site. Um and then you know uh I really yeah we probably just need to ask them to come out and give us a sight inspection to see if either one of those two meters can be energized.

It's a unique well the Linda uh drive well because um in the past it actually used to feed a brew pub in town and it used to send in raw um untreated um uh um groundwater and they actually ran a separate power circuit. So if you actually go out there you actually walk into it and there's electrical panels on both sides with two different meter sockets.

So, I'm hopeful that one of those could be re-energized and then that would have power to that site and we'll just have to start repaying the monthly bill on that one. So, but uh yeah, so Black & Beach is working on getting us the uh the numbers to allow us to go get the bid process going. We do have a couple of contractors that we have standing or have standing contracts, so we've talks with them until we have to give the numbers as far as the volume and the pump flows.

Um we're on hold, but Black & Beach is working on that for us. So, are the rough estimates on the cost of rehabilitating those in the budget, which is an item here also, but yeah, we've got a budget over a million dollars to to bring the three wells back online. So, yeah. Yeah, I've been a little frustrated with the testing of the well line.

Uh staff did actually find two well uh valves on the well line at the intersection of um Cir Road and Schoolhouse Road that have been buried for a number of years. Um uh but we're afraid that there's some other uh um when they're trying to refill the line, they're uh couldn't get water all the way out to the east side of the line, which is the Vermesh well. Um we're not planning to bring Vish online right now, but that's the extension. That was actually the last well functionally working.

So we're surprised that when we're trying to fill it from the plant side that we're not getting water out to the east side of the pipe. So we're we're stymied a little bit right now. We're still working on it. Anybody any other uh committee members have questions on item A? Nope. And just that um the we actually have a water forum coming up. Um so in June we're going to be having a presentation and everybody will be invited to that. It's a public information.

It's uh I'm trying to figure out the date on this right now. I had on my calendar here. Um, uh, it's, uh, June 17th at 5:00 p.m., 5 till 7:00 p.m. Uh, we were trying to get both ADWR and CAP staff involved. I think, uh, at this point, I think Bose has been trying to coordinate that and uh, I think we were told ADWR has now declined to attend. So, but we're still have someone from CAP committed. It'll be myself and then, uh, Brad Hill and Michelle Vanquin from the town side to talk.

And then uh you know we've been hearing a lot of uh concerns in the public. So we want to put everything out there that we can as far as what's going on and what we can provide knowing that we still don't know. It probably won't be till next month if not August that we'll actually get the determination from the federal government about the cuts for next year. Yeah, that sounds good. Unfortunately, I'm going to have to miss that. I'm going to be out of out of city.

So yeah, it will be um uh video. So it will be available via the YouTube site and you know to watch live andor to stream after the fact. So yeah our goal is to provide you know we've done several presentations over the years include last one that Brad Hill and myself did just at the beginning of this year. Um but this is going back to Marsh so the one we started in 2022 we did in September 2022 we did a water forum where we had ADWR CAP staff and our staff there to just discuss everything.

So we're just we're trying to follow up with it and we're hearing that there's a lot of concern in the community. So, we thought it was best to actually have a hold of the public meeting as a town staff um just to explain what's going on and all the the balls that we have in the air and again the unknowns. We have known unknowns which is we wait we're waiting for the Bureau of Reclamation to tell us what the cuts are going to be. Okay, there's no other comments from committee members.

We will move on to item B which is discussion on general rate design including base rate and usage tiers. Robert, I'll let you take the lead on that if it's your baby. Uh the right tier says this is just what has been enacted know by the council. Um, you know what we had proposed, Bill, was to expand on this, you know, the next time around, probably introducing a new plan around the fourth quarter of this year. Yeah.

And my thoughts on that are what what I think and and I haven't done a lot of research on how it fits and I know one of the questions or from the meeting that we had last month that I wasn't here. Um you you wanted some data staff to provide you some stat you know last year's data on uh rate blocks and you know usage and things like that. particularly usage, you know, number of customers by usage blocks. Um, and I haven't seen that. Yeah.

So, so we're not in a position to discuss anything really in detail. This is this is a done deal, you know. So um what what I was going to suggest or or throw out as an idea as you're thinking through this and looking at at that is, um, instead of the going from 30 to 40, um, have a have a block that, and again, I don't know what the ultimate will be, but have have one big tier at the end that's more goes from 30.

Uh, and then that stays the same until probably about and then that's when you put the penalty uh a big um thing on that. Again, no magic there. Just just think that and then in addition to that for everything over 20,000 you have a uh increasing tier that's a search charge to pay for water. It's a water replacement fee. Um that's just a flat fee per thousand gallons. Um and but it but it's tiered just uh you know so that that was essentially uh I think you might have received this.

This was maybe three meetings ago. Uh this was an Excel model that I put together and Ryan's got the model and and what this did was introduce some new tiers. We had uh uh 10 to 20, 20 to 30, 30 to 40, 40 to 50, 50 to 70, and over 70. And we had increasing cost for each one of those tiers. And the excess money that they would generate would go exactly as you're saying to fund the securing of the additional water that we need, any shortfalls. Yeah.

What what I'm suggesting is instead of having uh additional blocks, actually try to eliminate a block except have one that's at the at the very size, the larger size and that but deal with that and get your revenue uh in other words, stop it at at 30,000 as as your as your um largest block until you get to the big block. So that from 30. So you're not working through all those tears, but that's it. Looks like Nancy's got her up, too. Nancy, you on? Yeah. Yes. Hi.

Um, I like the the multiple tiers, which was similar to what we were working on last year. So, I'm voting on that side of the house. I like the fact that that that is that gives the user a reason to conserve. I and that's why I like the multiple tiered uh theory in in my book. That's what I'm going for. Bill, it was um it's my feeling that a standard amount allowable amount a reasonable amount is 10,000 gallons a month, you know, so that should be kind of the base rate.

Anything over that I think should come at an additional cost. And uh that's why I was introducing these tiers. you know, each one is a little bit more painful. And we're trying to through pricing motivate people to use less, you know, and don't want to wait until we get up to 70 and then hit them big. You know, I I'd rather do it a little bit along the way. I agree.

70 should be, you know, very painful, you know, but uh I I don't think we should wait that long before we we uh um hit a higher price. Well, I guess I'm saying that at 30 you're going to hit a pretty high price and then at 70 it's even going to be much higher. Absolutely. That's what that's what I was suggesting is absolutely that that you don't need to incrementally go from 30 to 70.

You know, at 30 the pain should be hitting and you know um you know and and that would be enough to to to deal with it. That's that's uh but obviously every I just thrown out my idea because I wasn't here last meeting and wanted to at least put it on the table like working through your imaginations and uh because that's kind of where I'm I'm leaning and and what I'll be looking at data try to get that deal with that and that's something I need to get you guys.

I mean ultimately we need to get you the the usage tier you know customer type classification because typically you know we're thinking probably a lot about residential customers too right but a converter customer primarily residential um I think business you know that's a totally different animal I think they have to almost be looked at individually you can't do it individually but you can but you definitely have to look at them and as I as was mentioned by um Sean at the last meeting certainly We want to have disincentives to to do business here uh for water just because it just because it's water consuming per se.

I mean we need to be careful not to overly penalize a business uh because it happens to bring some water consumption with them. Uh and so those tiers should be uh reflective of the value that's brought agreed by what they bring into the town as well.

There are there are various educational things though that that we can bring up you know like one of the big bugaboos and my wife for example she hates when they bring a big 16 ounce glass of water unasked you know you know you should educate our restaurants you know don't don't give it that much and and don't do it until it's asked for you know and it's just a little bit amount but you know the mentality is that you know we we don't want to waste it and they would not be doing that if we start looking at businesses and I think we need to look at business.

I've said this and I'll keep saying it until we do it. We do need to look at businesses and if we need to change the the structure and the rate structure for them to make it to their advantage to do things that you just said then that's what needs to be done because if we don't do this now and start as we all know by looking at what's happening in the west it's going to happen. I mean, it's not g when or it's not if, it's when. So, I agree with needing to really look at businesses as well.

I don't think I'm not disagreeing that it needs to be looked at. I just think you have to look at it with a little different eye than you do residential. How how that comes down is open for discussion. But, u but I I do think keeping them as a separate class and dealing with them specially is appropriate. uh and uh not trying to just have one sizefits all type of thing. Right. So I I'm not disagreeing with you, Nancy. Just a little different flavor on it.

Any other comments on this particular one that No. Uh I think we have some more work ahead of us.

uh and it would be very helpful you know just to have the demographics you know of how the usage is going today so we know how to structure this the the different tiers my apologies on that I was supposed to get that for you so I'll give I know you're working three jobs our best yeah and it does lead for the committee know you know there has been discussions that we you know while we just did the um the rate update this isn't in effect for the next two years there's already discussions that are we already falling behind we did not adopt Uh and um this last study we talked about it but we didn't get to it which was a um a new uh water resource impact fee.

Um you know you just mentioned about using the usage fee to help pay for water resources but there is has been a discussion about rating a water resource fee that we the last time we looked at the uh impact fees was actually uh back in 22 and we did a fairly substantial uh uh increase in that. Part of the problem with uh impact fees is that you have to have the projects identified and you have to have an idea of the cost and we don't have them formalized yet.

So that's what sort of the chicken and egg that we weren't able to do that with. But all good discussions and we've talked about you know do we re-engage um um um reptalist to come help us with this study because a lot of this goes into model. I don't want to replicate and or duplicate what they're doing if they can help us do this. And then also just you guys are aware that town code has it by October. I actually have to give a presentation once we find out what the cuts are for next year.

I will give a presentation to council about what our water uh resources look like next year and what stage of our drought management plan we'll be in. Um and as part of that that then triggers some other things in town code of things that we need to look at start looking at like things like search charges and stuff like that up to about 20% cuts in the cap water.

we can sort of I think weather next year without having to go beyond our current uh uh uh we're actually in drought stage drought plan stage zero because we actually have water resources to recharge this year. Next year we'll be if we can weather it with uh uh no cuts, we'd only be in drought stage one. So it doesn't trigger a lot of the things that town code allows us to.

But is it more prudent for us to be proactive than reactive and waiting for the cuts to get to the you know the 10 20% levels which is then allows us to do a lot of donian measure measures. All good conversation, but again, we're waiting for the to find out what the cuts are.

But, um, yeah, I think if we can get some numbers and you can see where we're at, we'll have to take a look at what how much latitude we have as a utility provider to provide uh different rates to different customer classes like like businesses. Again, if the town's uh general fund dollars are dedicated, we don't have property taxes, so it's sales tax dollars. And right now, those sales tax dollars are also helping supplement run the utilities. So, how's that all factored together?

And then what what restrictions do we have in place that that might be a good conversation if you want to go down that path that we could ask um Kevin at Rotellis I wonder if you can give us a summary on where we're at before we go off too far and I hate to have us go off on a tangent that we you know think it said come back later and said no you can't go down that legally and I can look back at some of the reports we did previously but I wonder if if Kevin just might be a good person to reach out to and I wonder if you can give us some summary of some some parameters or maybe I can have him come and present to us real quick on for even virtually just do something to give us an idea.

We have been talking internally about uh have re-engaging their firm to continue their work on the on the uh rate modeling uh to help pay for the uh what we believe are going to be ongoing increases in operational costs and with water resources as as come forward. So my understanding was that that re-engagement wouldn't occur until the next fiscal year which is starts July 1. Is that what you're still thinking sometime after that? Yeah, again we're we're a few short weeks away from that.

Um, when do we get him on board? I think we should pause a little bit till we know what's going on with the cap, the final cut, and help us hone in on some of these costs and then some of these other programs so we can actually get some true costs and what things are going to be. But I think having some of those discussions early. So, I'm wondering if he's able to engage with us as a committee.

So, you know, again, I know there was some frustration last uh study that you guys weren't actively involved, you know, getting getting ahead of that and actually getting you to see the front end of that process would be good. And we got really good, we're getting much much better data. You know, after last year's meter change out project, we made a lot of progress on cleaning up a lot of the Cave Creek metering.

And now with um the AMI metering that we have in place for 60% which is majority of the Cave Creek customers, I think there's only a handful, literally a handful, a couple of couple dozen at most of customers we're not getting our data from. We actually have a really good clean data set to work with and it's only getting better. Uh we're hopeful that we can get another meter collector site up here before the end of the fiscal year.

Uh um is actually in um in the Desert Hills area, but actually will help back up the Cape Creek system. Hopefully we start picking up some uh a tunch more meters out in Desert Hills very quickly once that sightes up. You mentioned an October presentation on the drought management. Would it possibly be would it be possible to uh have a discussion regarding what you're going to present at the September meeting?

uh if we had a September meeting so we kind of know and can maybe have some comments before you have made your presentation. Yeah. So what is it's it's in town code. It says by October I'm supposed to present to council the uh water projections for the following year. That's that's what I have to do. That's that's per the drought management plan the uh the code amendments that we made in 2022. Actually it's 2023 we did the code amendments.

It says so by October by October I'm supposed to do a presentation to council to tell to give them a forecast of our water projections for the following year. Okay.

So well my my question is would it be possible for us to have a preliminary discussion with you prior to that whenever you're going to do that whether it's going to be the end of September or whatever where and so you know where we can set up a so we can hear what you're going to say and if we have any thoughts and input to give you you don't have to accept it obviously but it's always easier to to have the input before and just the October date set because that's typically when our water orders are due.

So the thought timing is timing wise that that's when our cap water orders are due and then so we'll be notified again it's usually um um July if not August when we get the 24-month projection which gives us the next uh what will happen next January through December of the following year of certainty of what the cuts will be. So yeah, we'll let you know that.

Yeah, there's no problem to talk before that but yeah, I just let you know that we put that in town code as a way for us to start a discussion with town council. Um the town code does outline some suggestions on things depending on where we fall in our water priorities and if there's a shortage of what we can do, but it actually requires action by council.

So the thought was we do that October and then we start the process of enacting things like search charges and all that that we can per town code uh we have the authority to do it outside of a rate study.

All all I'm suggesting as part of scheduling and thinking of once you've decided when you're going to be able when when you think you're going to give it to staff when you want to have it prepared for council if we can the month before um you know have have a meeting with us or at least a couple weeks if you give us a little heads up we'll we'll try to set up a meeting that we can all attend and uh just have have a preliminary I realize nothing's final until it's presented.

Hey, Nancy, did your hand up again? I can't listen. Oh, there it is. Looks like maybe your hands up. No. Nancy, is your hand up? But it walked away. Yeah. No, they didn't put it down. Want to make sure. Okay. Um, anything else on rates and at this point? Okay. Okay, then we'll move on to C, which is committee discussion and staff update on the tenative fiscal year 2027 water and sewer utility budget. Um, there was extensive discussion on this last time.

I think well I don't know if that was mostly on last year where you are on this year's budget or whether it's on next year's budget. I was a little confused as to exactly what was being presented. It was really last year's and performance against it. But uh I I would suggest that you talk about your your objectives. You know, we don't really need to review the numbers like the salary and stuff. Point out some of the the big factors you're concerned about. Obviously, electricity is one of them.

Um and obviously manpower is another one. Um but the major projects you're trying to achieve during this next uh fiscal year, that that would be helpful. I would agree. That's what I think would be a good focus if you don't mind, Sean. Okay. So, um yeah, you know, we just they know and I'll just skim through uh we spent a lot of time actually putting those descriptions into the budget book.

Um but you hit on a few things because you know based on our current projections, you know, um the biggest single uh cost to the utility is is staffing. Second biggest contractual opation or contract is actually electricity. We anticipate that next year actually the cost of water may start to increase and actually equal to and potentially um I'm not sure if we'll have it next year but follow the following year probably it will actually the cost of water will actually exceed electrical cost.

Um the one thing we're we're focused on next year is we're getting very close to wrapping up the new interconnect site with the city of Phoenix. Um and then that it's scheduled to come operational probably end of June July. Um I don't have an end a firm end date uh because I'm actually waiting for the city of Phoenix to give me some information on where they are on their testing at their booster pump station.

We have been given notice by Phoenix that um they were initially waiting till they complete their water line improvement on low mountain before they allow us to get a connection and they've actually since said that yeah they'll allow us once the booster station is ready. So we that gained us potentially two months of uh of getting that right. So now we're trying to wrap up our project and get our project commissioned.

Um so uh getting all the programming in place and actually testing out the pumps and everything so we're able to accept that water from Phoenix and then run it through our system. So um they're looking at out and as we start to use the and that actually leads into things staffing resources because you know we staff our plant right now well we have it's been a few years since we've had to run the plant 247 except for an emergency.

Um when I first got here we typically would run it 24/7 in the summer just to keep up with water demands. after we lost the carefree customers, our demands dropped enough that we don't have to do that. We've got a little little bit of a gap. So, we've been I think we're running about 20 hours of production right now of the plant.

Um, but we're looking forward to how we're actually going to restaff that plant and distribute the current staff and maybe go down to a single shift of what that shift should be. So, there's a there's a lot coming with this uh change in the town system.

I'd say it's the biggest single change since 2008 after the town bought the system and we rebuilt um the water treatment plant, the Nery site, the Carol Heights and the Rockway sites that became that which is now the new backbone of the water systems. This is the next fundamental change in how we provide water to our customers. And we're very uh want to be very careful and see how we can get best utilization out of that city of Phoenix connection for the next um approximately 18 months.

So it's until December of next year. We actually have a a a pretty good rate from Phoenix. They actually um per the IG every two years they give us a a rate of what they're going to charge us to divert, treat and deliver our water to us. It's our water resources. Remind everybody we're not wholesaling water resources for Phoenix. They're only treating our water and giving and delivering to us.

Um they've told us that after next year to anticipate it'll start to go up because as they've had capital improvement costs that they've had to do to augment their system and and um doing things like even their Cave Creek water regul advance Cave Creek advanced water purification plant project they're working on that will actually be feeding into their Deer Valley facility and they're actually going to have us pay for a proportional share of the capital cost of that project.

They haven't done that yet and we expect that to happen in the next rate update too. Will the current president's relaxation of water impurities affect us at all if they remove some of the requirements that had been previously in place for filtration? I think what I've been hearing is the PAS they talk about backing down on on implementing a PAS. I'm not sure of anything else. Yeah, I know that Scottdale's wasn't renewed. They're working towards trying to get that auto reuse one renewed.

So part of it has to do with additional constituents that they need to start testing for to allow it to go into the popular drinking water system. So our as far as we know our requirements have not changed.

It's not a direct impact to us, but if we if that facility does get online, there are going to be additional requirements for them and testing requirements that we will report since we will be accepting water from So they'll have a period of going through some due diligence themselves and getting it. But as of right now, um my understanding is permitting from the state, right? It's uh just Scottdale still.

I I think that I think the question really was is are there any reductions in the requirements that have gone into effect or or actually approved that will be going into effect that reduce the costs. and um you know makes more water available such as and I don't think this is one of them but arsenic is a big issue out here.

So yeah you know anything like that that that has actually um the restrictions have gone down a little bit so that um you know some of the costs of testing restrictions have not there will be an increase in restrictions so indirect cost. Okay. Just curious. No, that's a good question. Yeah, doing that. Let me walk through some of the the highlights.

We because our budget, we talked about current year accomplishments and then we got future, but we actually have some things that we're still working on in this current year's accomplishments like the the roll out of the my 360. I can't say enough about um again trying to get the more people to access that system.

even if um we we're not able to get the hourly AMI metering that I think the my 360 still provides people with some um a lot of value because you can get at least um monthly data from us of of two to three weeks before we actually send you out a bill so you actually see the information so you can start addressing any customers can uh who currently would have an AMR meter uh would see that information before we send a bill on so I'd like to give you the highest kudos for that system and installing it and I hope everybody in this this uh room has the minds 360 and is using its functionality.

We try to promote it at our meeting. Yeah, it's a it's a huge thing I think for us and then hopefully allows people to see stuff and then uh we do see we see a lot of benefit in that. Um we've got a lot of interesting projects on the board because you know we did do a redevelopment or a new development agreement with Kava Springs. They are moving forward with that project. The new developer is looking to add the booster pump stations to allow that water to get up to the top of the the hill.

We've had a couple conversations with them. So, um, that the development agreement just got done this past fiscal year, but moving forward, it's actually going to be into the design and construction. They're they're eager to get going with that to get that, uh, site up and operational so they can send that water to the top of the hill.

Good thing is that actually also then once that line is energized, it allows the westside DWID customers, well, they have to form the DWID, but it actually would energize that line to allow them to get service off of it. So once they formed the wind, we are stillly working with Maropa County on the water treatment plant permit. Uh we started that process last year. Um they've had uh some changes in staff again at Maropa County, but we have a formal submitt into them.

So we're hopeful to get some feedback on them uh shortly. We've sort of got a deadline ourselves at the end of the year to uh uh get modifications to the plant done. That's going back to um u thinking back five years now. uh just under five years ago, we added the Paul membrane treatment units at the water treatment plant to help with water quality of the of the facility. It's helping us produce the best quality water that had before.

Um but the when it was originally permitted, the pole membrane units were considered as a pilot study and that's how they were permitted. Um in fact, we're actually operating them and we intend to operate them especially with the city of Phoenix is the primary water u supply or water uh treatment at the plant, but we actually have to get the permit modified for that. So we're hopeful. It's just it's uh there's been some changes of staff in Maropa County.

So, we're hopeful that the new staff are were uh we we thought we had it placed last year and then they changed staff and they they they threw a curveball to us. We're hopeful that we can catch that curveball and and put it on the ground and walk away from this one. Um uh yeah. Uh besides for that, you know, again, trying to keep up with our staffing right now.

I'll be honest with the the big project we um been working on is council asked us to uh follow up on the idea of um being that we uh have fairly um large capital program still to implement and in fact a lot of the capital program remind people um that we have identified in the 2024 u master plan. A lot of the projects date back to before the town even bought the water uh systems and did appraisals on the water systems and had identifications done and then the master plans that followed through.

So these a lot of these projects are over 20 years old. It's just when when can we afford to implement them? But we have we have some challenges to get built and some things to improve the system and and find new water resources. So that's asked has our council asking us to do an invitation for biders about trying to see if if there's some private water utilities that are interested in buying this system.

So, we're trying to work through that process and that has, I'll be honest with you, uh impacted uh employee morale. So, um I'm hopeful that it was finish this process up. Uh it won't be finished till the fall. So, u we hopeful that we don't get too much more people and we can keep our staff on board. We actually built up a really good staff. Now, we've been losing staff again and it's been a struggle ever since uh we lost uh Nick Larson to Carefree Water in the fall.

It's uh she been we've lost another supervisor recently. So, we lost two supervisors and yeah, so uh we're still working on just again just trying to manage the system the best we can and then with the the staffing resources that that never helps. Um since I've been here the the the I wouldn't say constant but the consistent changing of staff resources, it's always been a challenge once we get something put in place. We try to get like an SOP written up, a standard operating procedure.

When you get new people on board, there's always training involved, new ideas, and it it slows us down. But I think con we're constantly trying to make progress and we're improving the system. It's just it it can get frustrating for everybody. Desert Hills has been running a little bit better. Um Ryan brought some things to my attention. We have to dive a little bit more into it.

Uh last year we dealt with the fact that we had two of our the two of the three wells uh in Desert Hills uh go out of service and we weathered that storm and actually in total last year we were able to get more even though they were out of service for two months um in July and August um into September next year. Last year we were actually get able for total for the calendar we were able to get more water production out of our wells last year and run them more efficiently.

This year we're seeing there's a bit of a decline and I think it might be some operational parameters that we're sending them more cave creek water again. So we have to dive into that a little bit more and look into see if it's it's the well utilization has gone down.

It's a it's a challenging system to run because if uh because of the interconnect with the city or the town of Cave Creek, it it naturally will take the water from the easiest source which is that interconnects at 24th Street and Cloud Road. So we have to sort of uh and we can't really throttle it so much. So we have to try and blend that and make sure that we we um uh force the wells on or utilize the wells as much as we can. And there's some valves that we manipulate in the system.

We struggle just because of the way the Desert Hill system is set aside for those who don't know is you know it's it's geographically but the the well that we have that's in the most uh northwest corner which is our largest production well actually has has an arsenic issue. So to manage that, we actually have to blend it with cap water that comes through the 24th and cloud interconnect site. So when that well is running, there's actually hard interlock.

So we actually have to open what's called a blend line to fill it. And there's actually a couple sections of pipeline to allow us to get us the most pure C tree treated cap water up to that corner of the system. To do that, we actually have several closed valves in the distribution system. So the Desert Hill system doesn't just breathe or flow naturally. We've actually and it's been done this way for 20 years now. it actually is manipulated and that's a struggle port.

So we actually struggle getting water down along Carefree Highway just because the well production we have down there is the the least and we have to get water down to that side of the system. But if we open the valves too much, we dump too much Cape Creek water down there and then the wells never turn on. So it's a struggle and those are all manually operated valves or Yeah. Uh it's we it'd be hard to automate what's going on. Yeah. And that's that's a struggle for us.

I'd really like and we actually had it in the CIP program to do an arsic wellhead arsic mitigation so we can eliminate the um the blending program. It's just the numbers we got were $2 million. It's a large investment to do it. Um and that's a large investment we're to help you know the system for 1900 customers. It works now. It's just the efficiencies and as the the system hasn't been growing.

We have not been adding meters except for a handful since the 2021 water resource policy went to effect out there. Um, but we're starting to see the system just react a little bit differently then every year seems to be a a new situation for for staff to deal with out there.

Thinking ahead long term now to protect the Desert Hill system um you know hook up to the Toronto Phoenix Toronto um and getting a supply from the west I think would benefit everybody especially long term as they keep building up you know through this area with the semiconductor plant. And I know that's a long-term thing, Sean. I don't know if that's your your thing or if that's um the town manager.

I you know, and actually that was um thought of that was identified in the master plan as something to pursue. Um I've actually had conversations with the city of Phoenix's water service structure. Um their westside water system, which the Toronto reservoir, it's the reservoir on top of State Route 74. As you go out, it's actually a floating float storage reservoir.

um for them um they have a lot of stress on that because of TMSC and what I think the project called Halo Vista that surrounds TMSC um uh to the tune of billions of dollars worth of improvements that they have to make to their distribution system their westside distribution system. So we had that conversation you know can we attach another straw to your system and the feedback I got was not now and probably not for the next decade while they complete their improvements out there.

They currently have plans because it crossed my desk for a large uh um force maingravity sewer system um to take flows from that area um down through uh um their jurisdiction and it'll cross uh the cap or our cap canal um booster or pipeline just north of Deer Valley Road. So they're actually looking to try and get a sewer that I understand they have sewer cap issues out there. So they got water and sewer issue issues that they're dealing with out there.

So, um yeah, they're trying to get that that waste water flows from that side of their system all the way over to their Cave Creek water treatment plant which is at the the um northeast corner of Deer Valley Road and and um on Cave Creek Road. So, um yeah, so that's a project. I saw the plans because they're crossing our cap pipeline. So, I was able to see the entire project as well. They're talking massive.

So, yeah, they're they are um very stressed with everything that's happening on their west side of this. understand, you know, but they've actually talked about a second connection that we could do along Cave Creek Road, though, and that's of interest to us. Oh, really?

So, um, but we have to be cautious about it because they they have a a new site that they're looking along Cave Creek Road to do a storage reservoir that we could participate in, maybe doing a booster pump station that would have us looking at maybe converting the CAP pipeline um, south of town core um, the town into a water distribution, second water distribution connections. That would get us completely out of the water treatment business.

They have a reservoir plan in the next uh five plus years. So that's something I'd like to pursue with them. But if we pull that trigger, we either have think about bringing another parallel pipeline into the town or we're getting out of the water business. That's it's a it's a it's a yes or no. We have to figure this out and we almost need to do that with a new update to the master plan.

So we might in the next year or so um before the next update to master plan is due actually get someone engaged to help us map all that out. How would that look and how would that work? But that's another option they threw out to us.

But people know when we had the discussion several years ago with the city of Phoenix about uh uh having them help us uh divert, treat, and deliver our our cap water resources, they said, "Yes, we we have capacity to help you out, but we have constrictions on our distribution system and that we have to resolve, which is what they've spent on." They spent, I think, over $40 million on the pipeline improvements and the booster station improvement that they're doing south of the town core.

South of town, I keep saying town core. I apologize. South of Carefree Highway. That's in order for them to provide fire protection to their pressure zone 10, which is where our Walmart, our Sprouts actually is in their their service area. As part of that, in the next month or two, they'll actually convert those over and actually take over both domestic and fire service to all those areas.

Um, so they they've invested a lot of money, but their other concern was they didn't want the Cave Creek water system tied off one connection point to them. That's why again initially in the master plan we talked about you know that that reservoir having to drive by every day over on the uh the west side to the Toronto reservoir but now with all the stresses they have out there. Um you know this idea of another second connection along Cave Creek Road comes to fruition.

It's tied further into their distribution system ties back into different pressure zones that allows them to better feed us and provide a second supply. So um so it's of interest. It's something I think it's worth us pursuing, but it's going to take some a little bit of of engineering to figure out. And again, I'm I'm either we're going to run a new parallel pipeline up um up from that point.

It's around low mountain is where they're looking to put this reservoir site um and run a parallel pipeline or or convert the cap pipeline. Well, that could take a lot of the pressure, you know, off of the town. Um, because then they become obligated to supply. They become our water supplier. Um, and they have a lot more resources and a lot more intelligence, I think, than than we can bring to it just as a small I'm not talking about you.

No, I think it's worth pursuing that that conversation with them again. And it's it's it's we have a parallel conversation. The idea is would would a private utility be able to run the system and deal with the water resource challenges.

We'd still have to overcome the water resource challenge regardless because again our agreement with Phoenix is to divert, treat and deliver our water resources to us and depending on you know depending on what happens with the Colorado River supplies we still have to figure out if augmenting that in case but yeah maybe long term that's something to look towards um that you know might help us out. It's hard. It's an expensive little It's a hard little system seem challenging system to run.

You know, with our own 12 and a half mile raw water pipeline, four inline blue pump stations. We've done a lot of work over the last few years to make that system more reliable. But there are so many single points of failures uh for us and then run the treatment plant itself and we're looking at um u you know in the next decade probably having to rebuild that treatment plant.

Um, you know, the pal membranes are still functionally working, but at some point in the future, they may need, and that's what the county was actually trying to put us into a a order requiring us within the next five to seven years to actually upgrade the plant. That's what we were pushing back a little bit, saying, "Hey, why why do we need that? If I got a connection to Phoenix, I can ramp down production at the plant and just use the palm membranes and not have to upgrade that plant.

We're going to push that out. But eventually, we need to rebuild that plant. The technologies will require us to do that. Um, so yeah, we have we have to face that. So is it better to make that investment in a con second connection to Phoenix rather than rebuilding our water treatment plant? You know that all these things we have to weigh together and figure out what's the best for the town.

It's challenging for us, you know, running a utility that's a full-fledged utility because a small jurisdiction like wouldn't have a raw water cap pipeline that they're managing their own water treatment plant. They're managing the entire distribution system with multiple pressure zones and then a wastewater collection system on top of that and a wastewater plant and a reclaim system. you know, we we have everything here, right? And it's hard to manage it at the scale that we have.

So, it's a challenge. So, yeah, they talked about Yeah. Um the the challenge is water and wastewater. So, um or so desert hills and capers water and wastewater, it's really just keeping up and maintaining the systems. Um we got some projects queued up. We actually just successfully completed an upgrade and actually I looked back and some old master plans. It's been on the books for almost uh over a decade now.

just an update to our Chiparosa station which we just completed a substantial upgrade that site and get that uh behind us. We're trying to kick off this year um getting our manhole rehabilitation going and then also some pipeline repair work going and then just focusing on optimizing the plant. We actually have a a study that I was about to initiate uh with consulting firm to help us look at the water efficiency of the water wastewater treatment plant.

we consistently show up on the high water user uh list because of the wet odor scrubbers at that that treatment plant.

So um we had a scope of work to actually have a consulting firm help us look at um whether those odor scrubbers could be effectively converted to the on-site reclaimed water effluent which you know would be taken away a little bit that we we send to to ranch mñana but uh negligible I think would be the impact and then more so there's another technology we could look to change to but then what would be the capital costs and all that and how what would be the return on investment for doing that but as we look forward um to uh asking other customers to conserve I think the town needs to look in our own operations and that is the one operation as we start talking about uh rates you know uh we are directly impacted by those rates ourselves because we pay a lot of money to the water for that water plant way smarter plant so so yeah we're just looking to try to continue to optimize I think the staff have enjoyed moving into the new building down there I think that actually was a good morale booster that we got them down there in in I think it was January end of December early January we had for us software been coming cutting down there And yeah, we should probably invite uh the committee down to see see the tour of the facility.

It's actually nice and well we're utilizing it for workshops and and staff training and and just u general meetings. We have a good workshop uh good training room down there and there's nice operation center for the wastewater group and as well as our public works and our distribution group group worked out of there. I wouldn't mind seeing the sewer plant either. Yeah, it's a small little plant. Doesn't take long to actually walk it.

So yeah, and you know because of all the work that staff have been doing over the years, you know, it it it it's not odorous. I say that they actually do a good job with it. So and just today we actually had our five year every five years we actually have a a collection system audit from Arizona Department of Environmental Quality. So we just completed that audit today.

So, um I think we will have a couple of recommendations on a few housekeeping things, but I think overall they are very impressed in the fact that we listen the last time we did the audit, we actually uh had to correct a few things and we corrected them very successfully for them. So, a lot of that was just housekeeping. Yeah. Again, our biggest challenges are we'll have to monitor how costs work.

Um, I've tried to do some analysis of as we bring the C city of Phoenix water in because we have already fixed costs with the say the CAP pipeline and and just running the water treatment plant uh staffing costs, some chemical costs and some other stuff. We expect that to reduce but not to a onetoone relationship. So I am very cautious into this next budget year and we'll monitor that very closely once we start getting the water from Phoenix interconnect.

We do anticipate to actually get some operational efficiencies from the booster pump stations. Um if you look at our electrical cost of you know we're close to $700,000 a year I think in electrical cost in K Creek Water over 500,000 of that is just the cap pipeline and the water treatment plant site. So that's how much water it just costs us to lift that water 600 feet in elevation, get it to the drill plant and then run it through the near site.

Getting that water into Phoenix into uh our pressure zone one and two uh which are actually our biggest or one and four will be the booster pump stations but it'll feed one four and then through the interconnect we can feed desert hills. We're better placing it. Um so I think our overall pumping efficiency should greatly increase when that comes up operational because the near site actually um uses more energy than running the treatment plant itself.

Um the the near site was set aside as the primary supply for the town's water system because all the the treated water from the water treatment plant has to go through the near site and then it gets boosted to a higher elevation the way it was designed and then immediately most of the flow actually goes to a pressure reducing valve which burns that energy off to send it down south into our system and then it gets burnt off again through another PRV site at Creek Canyon Drive and at Cap Grove with the new booster stations at the interconnect site being placed in the pressure zones directly that should help we're not burning that head off going through those sites.

So that should actually see an efficiency is driving us to look at the the size of the booster pumps that we have at the near site. There's two empty pump cans at that site and we've got a project next year and already starting to work with Black & Beach to get the design parameters to look at getting a smaller pump. Well, we have three large 1500gallon minute pumps at that site. In fact, we replace we've repaired two of them over the last few years.

The third one needs to be repaired, but we've actually talked about for efficiencies maybe change that out to a smaller pump right off the bat. And then we still we get the other one rebuilt and used as a spare. And then that would get us one smaller pump. Then we can see how that manages and then look to get a pay for the fourth pump which would be an extra small pumps.

We have two large two small pumps at that site and allow us to run it more efficiently because I think we could utilize the existing electrical equipment. Um while the VFD drives and motors starters are all set for the larger horsepowers actually work on the smallers smaller pumps too. So that's a conversation we just had last week as we were starting to look at at starting up this facility.

something I think we can pull the trigger on a lot more quickly and getting a smaller pump and motor than have to do pump motor and drive and then tie all the instrumentation together and that helps that'll help because we're really as we walk through it and whiteboarded bringing the interconnect site on the operation of the the near site drastically going to change and then that has repercussions in our Carolites and our Rockaway sites too in the system.

So, so yeah, that's that's our next biggest challenge is is introducing this new water supply to the town. Um, where it's coming into the system is completely different than how we've been supplying it for uh for for many many years. Even when the old uh um water company ran the system, they were basically feeding the town core and then letting it flow downhill.

But again, most of our demand is in the lower section of the town, south of the town core, south of Hidden Valley along Cave Creek Road is our pressure zone four to Canyon. then it becomes fresher zone one all the way out to our Desert Hills connection at 24th Street.

So, um I think it'll and I'm going to watch that very closely to see again how we can get our our usages down and getting see if we can quickly get a a smaller pump into the nearest site to allow that to run and then we'll have to figure out some programming to make sure it runs properly. So you see that um annual water loss your targets haven't been met and and um the targets is basically repeated both in Cave Creek and Desert Hills.

Um is there any uh effort I mean what are you doing uh are there capital projects that are associated with that or is it just manning and how you're running the water? Uh part of it is actually part of our water loss is actually um uh overall just have running our own treatment plant actually is uh causing a loss in the system.

Um we gen it's we're I think the last time I looked at numbers over 9% loss of the water through the treatment plant in the treatment plant pro process that comes out of it and that's actually factored into this number too. So immediately when we go to the city of Phoenix um they will be uh per the IG uh uh charging us in fact a 5% loss that's actually built into their calculation.

So right off the bat when we're not running those Westech filters um our Paul filters if we think we run the plant just on PS we think we'll drop the we'll increase the overall efficiency of the water treatment plant because we the west are very inefficient and we've got a blended system right now. Um um so that that'll be one step down. Um we've looked at this before. Ryan, do you want to jump in as far as how the can maybe explain how the calculation's done? What's what's in that calculation?

Yeah. So, it's comparison between non-revenue water and water production. So, HWR, Arizona Department of Water Resources, was that annual water based on a calculation of billable data versus non-billable, right? So, it's a really a mass calculation based on, you know, how much water you're treating, you're delivering, and then you're selling.

And they kind of that and they say, "Well, if you produce x amount of water and you only sell x amount as revenue, that's your non-revenue water and that's your water loss." So, it's really an ADWR requirement to look at on an annual basis, your water loss. Looking at the projections just for Desert Hills here though, you know, actuals for 25 f year 6.64, our targets do go down for for fiscal year 26 goes down to 5%.

So there is some reductions there that you know based on the things Sean's talking about you know lowering the amount of you know waste I guess you'd say water backwash water things that end up going to the lakes um is going to get reduced by not running the plant as much.

Oh you again not to correct you but you had 6.64 64 went down to the estimate the target was five but the actual estimate is seven the actual is actually going up that's why that was my point target but the target is five oh yeah I know but yeah so the goal would be to reduce it and by reducing it there'll be there'll be indirect ways and then there'll be direct ways water conservation like we've touched on huge having the my 360 now on catching leaks early that all goes to non-revenue water, you know, water we're not necessarily selling customers sometimes.

Um, so catching leaks, um, conservation efforts, uh, the reduction in backwash water, and then things we've talked about is, you know, we've brought up nozzle times and some of these other methods where we do have to flush the system for water quality. So, meeting water quality um, is critical. How do we do that? And how can we start conserving some water?

Looking at a system like Nodez, which my understanding Scottsdale and some of the other municipalities have been using for the last few years. You you go to areas of the system, you you hook up between hydrants and there's a filtration system that it goes through that actually removes uh disinfectant byproduct, which is DD, one of the main reasons we actually do flushing um and and puts that water back in the system. There is some waste associated with it but very minimal.

Um typically it's a bag system but um certain municipalities have been using that to reduce their lost water and those are the kinds of things we should probably start pursuing as it gets tighter and tighter. I I realize that there's a you know issues that there's sometimes things you can do and some you can't. I saw the targets were not being met. I was just curious if there was a a focus on the targets.

Obviously, they're trying to reduce it, but it didn't look like it would be very successful at this point. Yeah. Like in Desert Hills, an example, you know, it's it's um in 22 we actually changed how they how we were calculating well from a rate study because actually we were trying to charge um um some of the production losses that Cape Creek water had had to incur by itself and then while we're distributing that water to Desert Hills, we weren't allowed to weren't taking advantage of it.

Correct me if I'm wrong. per the um the state standards. We're allowed to account for that sir. Okay. Yeah. So you're allowed to account for losses as part of the annual reporting process. So we treatment and transmission loss. It's a treatment and transmission loss of 5% that get added on to Desert Hills um as part of their loss. So we changed that in 22 as part of the rate study.

The other thing in Desert Hills that's going on as the meters age out there, we actually now start to and we actually have a capital program to to start working on replacing the meters. Um the first uh batch of the Neptune meters were starting to be installed in 2012. So they're over over 10 years old. So we are starting to see um I think a little bit of loss in accuracy of the metering out there. So it's it's in our interest to um as part of our conversion to AMI to get Desert Hills updated.

So I think that's why we're creeping up a little in Desert Hills. I think we were getting a a loss in revenue water uh uh metering um through that system. In Cave Creek water we actually did do um um the last year we did increase a little bit because I think we got into a case where we properly were billing for the the accounts in some cases.

I don't know overall if we looked at that numbers with changing of the meters that happened last year and these these number actually well we do it on a fiscal year when we report to the state it's done on a calendar year so it's a little off. So the numbers always look a little odd. We're actually trying to compare them all the time. But um yeah, we are looking at uh as Ryan indicated ways to get that down. You know, we want to it's actually a um um I don't know if it's a state mandate.

Um I think it does come from the Arizona Department of Water Resources as part of the Phoenix active management area which we belong in as part of the it started in one of the maybe in the third and we're actually down to the fifth management plan in um uh for water uh loss reductions um uh for uh which we're supposed to be under 10% in systems. That's where we're trying to get down to. So, it's something we watch closely.

As Ryan indicated, we do have some issues with just our water supplies and what we're dealing with. And, you know, this something we're we're thinking about how to reduce that. We still have challenges with just running the system and the way that it's this set up and the distribution of that system. You know, we have a large 12-in water line that runs all the way up road, crosses Fleming Springs, and then goes up spur across that in reality should be an eight or 10 inch line.

So we have a lot of volume of water just sitting there in a line that has no cons not enough consumption on it. So it's a challenge for our system and we actually have looked in the idea of trying to reduce the size of that line and it's not an easy situation because there's a lot of direct taps onto that. So how how many water customers uh do not have the Neptune meters? We are all Neptune right now.

The issue is that um the first generation of Neptune meters that were installed in Desert Hills are really not AMI compatible. um through up through 2015 was about the change I think they said. So the first generation of meters that's the the the bulk and the desert hills meters were changed out um about close to half if I remember we did the calculation are are the they're called a V3 uh version of the meters which only have a 0.1 watt radio.

Then in 2025 Neptune actually saw was happening and they changed the uh they increased the intensity of the radios to one watt um to allow for an easier conversion. Um and then we've obviously it took us till now to get the infrastructure in place and we're starting to get the the collector sites out in Desert Hills so we can start picking them up. But we're all Neptune system. Um 60% right now we're able to pick up through either through collector sites or the handful of meters.

We have about 120 um cellular enabled meters where they're sending a direct cellular signal up. Our preference is to get it to a collector site um because cellular does actually have additional costs that you have to absorb and we you know some agencies pass that to the customers. We we chose to absorb it. We're trying to limit the number of cellulars we have.

Now what we really need to do do is add a couple of collector sites in desert hills and and start changing out those pre20 meters out in the system. There's some struggles with trying to account for where they show up just based on serial numbers. It doesn't make sense in some cases. It wasn't there wasn't a a real rhyme or reason when they changed those things out. They were moving them around.

John, do you have an estimate of numbers as far as that that you're still trying to get onto the AMI system? Uh, just just a thought too to increase the water awareness in the town. Would it make sense to somehow provide the well customers with a Neptune system so that they would be better aware of what their usages are? Well, a there's a cost to the device itself. Uh the Neptune meters are I think right now 3/4 inch meters close to it's over $300 I think for a unit.

So we'd have to figure how factor in who's going to pay that cost and the piping of that. Um as far as getting it into the system and I guess offering that if if people want them people are on wellwater you know they have the luxury that right now Arizona Department of Water Resources you run exempt well.

My understanding the regulations are that well you're you're restricted on an exempt well depending on the time frame it got drilled to 35 gallons a minute I think 10 acre feet a year usage they don't require you to report on that so now we're trying to ask our customers to you know report on something that they're the state even doesn't require them to report on what's the benefit to them if if we start educating people that the normal is 10,000 gallons a day you know I think it'd be useful for them to know how they compare to You know, one thing I'd be interesting to do is look to see if we can correlate between ADWR well records to see if um um we know actually we can also do it through our backflow program is figure out and I think we have good data set who might have a well and looking to see if that's impacting their water usage from us.

We've actually had a couple of cases where the wells have gone down and we've noticed that um and and we've caught that as customers have increased their usage month to month and all sudden do a big spike. Well, their well went down and they just turned on their faucet. They they they have a number of customers that have both both water supplies. I don't know what the true number is. There's no requirement that they cap the well if they have city water. No, no, no.

We actually just require them that's a trigger for us to require a backflow device. So, there is no cross connection potential at that uh structure. So, we actually that's there's that's why a lot of our customers who have there's also other requirements if they they have other outside uses there's potential crosscontamination on sites. We actually have a list that they go through. There's like 10 or 12 criteria that we look at um to require someone has a backflow.

But having a private on-site well is one of them. I would say one in five, one in six. 200 on the back program. So may have about 100 customers that have I thought we more but maybe that interesting to do the calculation. We've got about 700 600 700 customers on BSI the backflow. Okay. the gap flows and you take the commercial customs out. I would think maybe like one in five through the well.

It might be worth us doing a little more analysis on that to to um see if we can figure out where there are. We actually do, you know, we can actually uh we have access to the ADWR well record registry. You can download that and we can correlate it back to our user base. It's just whether or not they kept their ADWR records up with the our user accounts. So, be interesting for us to try and map that out. Like if they're at a higher elevation, that can be a trigger, right?

vis if they're on the mountain side or something back into the system. I'd say that's probably another big one. Um there's other ones that are on there. You have a chemical feed system, you got solar panels without, you know, a backboard ice or something point systems. So there's certain questions, you know, you've got irrigation system getting off of our budget item. So we need to I mean it's back in. Yeah.

I'll just ask one question that came up is how many u we have about 4,500 water counts total. We have about 60% just over here over 60% are being read by the AMI systems. That leaves us 1,800 meters still to get converted to the AMI system. So just under 40%. Um so we're hopeful with the Mount Gillan site which is the one that city of Phoenix is allowing us access to. We're actually just waiting for our vendor to get all the equipment together.

um that'll start uh that that should take a big chunk out of that because that will be located and hopefully pick up even though the lower wattage meters are mostly out in desert hills. We do think that with that coverage out there that um we might be able to pick them up that or we start to have to look at augmenting them with an external antenna, but at that point the older meters might just it might be more costefficient just to go change them out into a newer meter.

So that's we're trying to balance it out. So yeah, but we have a CIP project. we carried most of the money forward to next year um to start that and we'll probably go out and like we did with the the water meter change out for Cape Creek water is actually solicit and get a consult a contractor to help us do that work to help augment it. Um, in the case of the K Freak system, we also got grant funding, which is was was good, good and bad.

Getting federal dollars can be a a pain in the rumpus to actually administer and that actually required us to do things like um wage rates and stuff like that, which actually did. In that case, we know it causes a premium probably over 20% cost to the project by doing that. But we got half the paid for sort of balance it out. bigger issue on getting the federal dollars for the meter change out is that we went through over a year-long environmental process to get clearance to start the project.

Anything else on from you Sean? Let me get to the committee member questions. No, again you guys are asking good questions and we'll keep you again we said these performance measures were things we looked at and again I recommend you look through that and we'll we'll be starting surprisingly doing starting to do updates in a few months on the for next year's budget.

But, you know, one of the main things I really want to start looking at is is closely watching the how the system performs and our cost of the system as we bring the interconnect site up online. I'm very hopeful with the the way we're going to boost it.

We're going to drastically reduce our cost of of um well, running the cap pipelines and that's but that gets offset by the the charge that we get to Phoenix, but the efficiency of the overall system because of where we're placing the booster pumps. Great. Yeah. And the committee members have no further questions. member of the public had a couple comments or question. You got it answered. Okay. Um then if there's nothing else, I will take a motion to adjurnn.

So moved only to set future meetings. Oh, that's right. That future meetings. We don't have any of those set, do we? All right. Sorry, Nancy. have to table your motion for a second. It's okay. Um, I is there a reason to have a meeting in June or July? I would say perhaps if Ryan can get the demographic information and we can kind of plug that into the model and and discuss that on a preliminary basis that uh might give us some time to noodle it a little bit before fourth quarter.

Yeah, that shouldn't be a problem. But I said that last time, so I apologize. I'll get it done. Do you want to skip June and try July or you want to Yes, I agree. I agree with that. The I think we've been doing the fourth Wednesday. Is that correct? Yeah. So, that'd be the 28th of July if I'm looking correctly. Uh I have a 29th. I'm 22nd 29th. Well, let's see. You're right. There is no Wednesday. Oh, that's right. There the July 1st is a is a Wednesday. I'm sorry. Uh, yeah. So, the 22nd or 29th.

What could What is staff's um which is better for staff? If there's one that's better for staff first, I know there's a conflict. I'll be gone on the 29th. Okay. So, does the 22nd work for Sean Sean per right now? So, okay. Nancy, does the 22nd work for you? July. Yes, works for me. Okay, we will put the 22nd of July. Let's look at August. Be the 26th of August. I'm okay with that. I don't know right now, but I'm pretty good at Zoom, so even if I'm somewhere, I could come in hopefully.

Looks good to me. August 26th. And then I'll just put September out there, too. Just one, two, three, four, be the 23rd is the fourth Wednesday of September. Would that fit into your schedule, Sean? Uh, you were going to give us some preliminary information or would it work out better if it was a little earlier? Yeah, good question. On the drought on the drought management plan. Yeah.

So, right now, again, it's just honor before October is I think as we put it in town code, give us some flexibility.

So my goal will try to sort of push that more towards out um yeah if we do like in August then it gives me um in September I'll I'll I'll know by the 22nd is really coming down to when the Bureau of Reclamation gives us the announcement and then I can do the calculation and we have a specific calculation that we do actually we're talking about tweaking it in the um way it's written in code because as we do things like this um water augmentation right now the way it's written you could interpret it that that water augmentation actually means that we don't go into the drought and it's like well no we don't want to that we're doing the we it should be long-term water resources, not not not short-term water resources that you're looking at.

Well, let's let's assume that on August 26, we're going to know what your cap allocation is. You're probably going to know what your schedule is. Hopefully have some thoughts on where you're, you know, hopefully at that meeting we can have the preliminary discussion on the drought management, have a variable um adjustment for September based on what we found out in August. Yes.

And then and then and then we can either move the 23rd meeting to on in September to a different date if necessary at that. Okay. You want to pencil in the 23rd then? Yeah. Just easier to put it on calendars now. All right. Yeah, you're right that hopefully by August 26 we've we've got the announcement for 2027. It's a simple calculation. And it's actually just, you know, it's really that'll that'll factor. We're assuming no NA water available to order.

Um how much of the cut is of the M&I water? And then based on our current usage, what's our projection for uh either growth or reductions for next year, which I'm going to assume that we'll pretty much stay flat and we'll just see where our water resources fit within then.

And then and that's the only other tweak that um we were talking about to the to the way it's written in code is to um remove any short-term augmentation from the calculation so that it's clear and I might just have to bring that up this year whether or not it requires a full code amendment is what I'm discussing with the attorneys right now. Okay. So yeah, so the 26 should at least Yeah, we should get an idea get an idea maybe completed at that point and if not maybe the 26 I mean the 23rd.

Okay, those three any agenda items for July that we other than the rate issue at this point? Not at this time. Are we going to know anything about the RFP for It didn't sound like you were going to have that invitation for bids. Um our internal goal right now is we're working for probably a release um I think they're talking about um mid June and leaving it out for uh somewhere around 60 days is the sort of the schedule uh backing into a schedule.

We're trying to get it done by the fall to give council the information. Um it's going to take some a little bit of time but we also know that the water companies need some time to to put proper bid packages together. So, so let why don't we put the invitation for bids on the July um meeting just to discuss see what the status of it is and if it's available. We might have read them. It should be released before June 22nd. So, we can let you know again how many people have picked up this far.

You can go through the package so you can see it. Um and then um because there's some interesting discussions that we're having as far as we're actually looking at all the town's IGA in place. um like our IGA with the city of Phoenix actually does allow for the transfer of the of the rights the agreement but the other party has to agree.

So, you know, so City of Phoenix has the right to say, "No, we don't want to work with a private water company." You know, which then means that the investment in an $18 million construction of an interconnect site go down. Well, we we can't tell them what their council is going to say about that amendment in the future. And then we also still have an in place to divert, treat, and deliver water for Carefree. People forget about that. They have not called us to ask for that.

Um, you know, with Nick being over there, I actually had a conversation with him about it. And yeah, there is actually an interconnect site that has not been open since uh it got rebuilt and um but they haven't ordered any water from from since 2019, but they may want to order water from this. Um but we we has to look at that and to see what's in place and we're looking at all the other contracts.

There's a lot of thought of things to think about this and it's we're having to run through it takes a lot of other a lot of time actually running through everything and getting all the information so that somebody can do a proper bid for us too. So, okay. Well, we got the next three meetings. We're going to not have anything in June. And uh now I will take a motion to adjure. So moved. Second. I'll second it. All in favor? Hi. I