EPCOR provided Commissioners with an update Tuesday on its interim manager activities over the last month for Johnson Utilities, LLC. EPCOR representative Jason Gellman pointed Commissioners to the interim manager report filed in the docket calling it “complete and comprehensive on where we are.” The report details the status of financial payments, payroll updates, and water and wastewater operations. The monthly update also includes a draft capital plan that calls for $101.9 million in water and wastewater infrastructure improvements. EPCOR took over interim manager responsibilities for Johnson Utilities in August 2018 and has been working to improve the San Tan Valley utility company’s water safety and quality, customer service, and billing practices. 

ADMINISTRATION 

Ultra Agreement 

  • EPCOR pays only justifiable utility expenses and has not paid the Ultra invoices. 
  • EPCOR and the Johnson Utilities, LLC (JU) owner have had discussions regarding termination of the Ultra agreement. 
  • At this time the Ultra agreement is a non- issue for EPCOR as the interim Manager. 

Hunt Agreement 

  • All utility personnel working at JU are still employed by Hunt Management. 
  • EPCOR and JU owner are working together provide for raises to all utility staff, and Hunt has agreed to pay vacation bonus to staff in line with industry standards. 
  • EPCOR has not paid the Hunt Management margin fee. 
  • EPCOR looks forward to working with JU owner for further staff improvements. 

Human Resources 

  • Two of the five supervisory “Foreman “positions have been filled for wastewater collections and wastewater treatment plants. Active recruitment is ongoing for the remaining three Foreman positions. 
  • An oncall program has been implemented to ensure proper and adequate after hours service order and emergency response is managed properly. 
  • EPCOR worked with the JU owner and Hunt Management to pay vacation bonuses for time that was taken away previously. 
  • EPCOR is also working on implementing an after-hours live phone monitoring system, to ensure that customer calls outside of regular business hours are answered by a live person. 

Finance 

  • Hired a third party accounting firm (CBIZ Mayer Hoffman) to perform independent audit on agreed upon procedures to confirm and validate financial processes and controls. Fieldwork has been completed and the report is being drafted. 
  • Met with Republic Bank of AZ to more efficiently move funds and earn on JU cash balances. Republic Bank of AZ has updated our transfer and ACH capabilities to make it easier for cash management and it is working on a proposal for earnings on our cash balances.

OPERATIONS

Water

  • Progress is being made in stabilizing water pressure in various portions of the JU service territory. These improvements are being accomplished through installation of Variable Frequency Drive (VFD) motor controllers, installation of air relief valves, and valve sweeps to verify proper valve positioning. Pressure loggers are continually deployed to gather real-time data to allow further adjustments to system operations.
  • Quotes are in for the installation of a pressure reducing valve (PRV) from the Magma and Ricky well sites to the Oasis portion of the system. This will address water pressure and quality issues in Oasis.
  • Work has begun on repairing the chlorine sheds that had significant operational and safety issues.
  • An analysis of all electrical panels has been completed by a contractor and is now being used to solicit bids for a repair program. Temporary electrical panels are being constructed to allow for repair and/or replacement of the permanent electrical panels systematically without any service interruption.
  • Updated blending plans to address water quality concerns have been submitted to ADEQ for review and approval.
  • The temporary Reverse Osmosis (R.O.) treatment unit remains in operation at the Johnson Ranch 4 well. The second R.O. treatment unit has been staged at the Morning Sun Farms plant to provide a treatment option for those sources should water demands create the need. An easement will be required for this R.O. system and discussions are ongoing with Beazer Homes and the Morning Sun Farms HOA.
  • Work has begun on installation of the Ion Exchange treatment system at the Main Yard water plant to treat Johnson Ranch Wells 3, 4&5 as well as Morning Sun Farms water treatment plant.
  • EPCOR is working on an access agreement with the San Tan Heights HOA to equip and reintroduce the San Tan 1 well into the system. This has the potential to bring up to an additional 800 gpm of good quality water to the system.
  • We have implemented use of door hangers to improve customer service.

Wastewater

  • The ongoing threat of SSO at the main yard lift station remains. This station is being hydraulically overloaded with flow from the R.O. treatment system. Additionally, this station has historically been hydraulically overloaded during high flow periods of the year. 
  • A temporary bypass was installed between the Copper Basin 2 and Copper Basin 1 lift station which has removed flow from the main yard lift station permanently. If this bypass works we will install a permanent connection between CB2 and CB1 to make this flow diversion permanent. 
  • • The temporary bypass for the force main from the main yard lift station to the Section 11 plant has been operational for a month and construction of the permanent force main relocation is underway. 
  • • Sludge continues to be removed from the Section 11 WWTP aeration basin 2 to allow for installation of the replacement liner that ADEQ is requiring. Sludge removal is scheduled to be completed in early December. 
  • • Pump curves for all the lift stations are being evaluated to determine if the proper pumps are installed and identify any necessary replacements as well as properly sizing the missing pumps out of these stations. 
  • • Capital plans are being devised for improvements to the four wastewater treatment plants based on the Engineering study completed by Waterworks Engineering. 
  • • Efforts are underway to divert flow away from Section 11 WRF to reduce the load on that plant. In addition, optimization of the treatment process is being explored for the short term, while the longterm plan is to build a new mechanical treatment facility and decommission the existing Section 11 plant. 

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