PINEWOOD SANITARY DISTRICT

SYSTEM REPAIR AND UPGRADE STATUS

MARCH 2002

The Pinewood Sanitary District has been in existence for approximately nine years and has gone through many periods of difficulty and expense to the residents of Pinewood. The good news is the District is well on the way to being an outstanding District with complete legal operational status and the best quality of reclaimed water for reuse locally. All operating permits are now in-hand and the District will be released from the Consent Order under which it now operates and allowed to operate under the permitted status as soon as the construction of the required facilities are completed.

The following are brief descriptions of the use of the various funds for the repair the system to date.  

1.     To start the District and repair process, General Obligation Bonds were issued and sold. The proceeds were used to buy the sanitary system and start the repair to the collection system. The following are summarized costs for repair. They do not include the purchase cost of the Sanitary System, administrative, legal and finance fees associated with the issuance and sale of the bonds.

2.     The funds available from the sale of the General Obligation Bonds were depleted in early 1998. The need to continue with the repair work remained and a program of “pay-as-you-go” was initiated in July 1998. A $10 per month fee was added to the monthly billing for improved lots ($4.50 for unimproved lots) and called the Special Improvement Fund.

SIF funds were collected and used for repair and equipment leases/purchases until March 1, 2001. A total of $901,333 was collected and used during this “pay-as-you-go” program. The following is a summary of SIF funds use:

3.     During the three-year effort to secure an amendment to the Oak Creek Water Quality Plan (the 208 plan) that was required to allow the District to operate legally and to seasonally discharge into Munds Creek (Nov to April), it became apparent that the governmental organizations involved with the District’s operation were going to require District to complete all repair and improvements within a three year period. This meant that the “pay-as-you-go” SIF program would have to be replaced with an additional debt authorization to provide the funds to complete in the required time. A debt authorization “Bond” election was held in November 2000 and the voters of Pinewood authorized an increase in the indebtedness of the District amounting to $4,250,000. Fortunately for the District, and the Pinewood residents, bonds were not issued and the Water Infrastructure Finance Authority of Arizona (WIFA) is furnishing the funds required. This loan is at a considerably less interest rate than bonds would have been.

Starting in March 2001 the SIF program was terminated and replaced by a monthly collection from the Pinewood residents to pay back the WIFA loans over a twenty-year period.

The loans contemplated with WIFA are as follows:

Note: Loan 1 was secured under the balance of the previous debt authorization.

A summary of WIFA loan funds used for mainline repair, manhole rehabilitation and engineering design work for construction is as follows:

As a measure of progress, the amount of mainline repair work that has been completed can be cited. The collection system has a total of 189,305 feet of mainline (35.853 miles). Of that, 69,384 feet of mainline has been repaired (36%). On a per foot basis since the start of the SIF program to the present time, the cost is running $20.14/ft.

From the progress shown to date, the three-year period required for the repair and upgrade is achievable.

For answers to any questions, please call the PSD District Manager, Jim Wilson, at (928) 286-9166.

The Pinewood Sanitary District

Board of Directors

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