HomeMy WebLinkAboutAgenda Report - February 7, 2007 K-02Kv4k
AM CITY OF LORI
%W COUNCIL COMMUNICATION
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AGENOA TITLE: A Resolution of the Lodi City Council reducing the Electric Utility fund
Paymont In -Lieu of Taxes amount as previously established at 12%, to an
amount established by formula
MEETHOG DATE: Februitry7, 2007
PREPAIRW BY: Deputy City Manager
RECUSED ACTtON: Approve a Resolution of the Lodi City Council reducing
the Electric Utility Fund Payment In -Lieu of Taxes
amount as previously established at 12%, to an amount
established by formula.
BACKCIROUND INFORMATION: Over the course of the last three years the annual in -
lieu payment has been reduced (as a percentage of the
electric utility revenues) from 12% to the current 10.6%.
This reduction in the percentage of the In -lieu of transfer was approved by the City Council in
each of the last three budgets. This action has resulted in the reduction in the amount of the
transfer by more than $900,000. The General Fund has been able to absorb this loss in
revenues as a result of measures taken to reduce costs. In order to ensure that this reduction
becomes permanent, it is recommended that a Resolution be approved that establishes the
base amount of the transfer at $6,779,000 and allows for the base amount to be adjusted by the
annual growth in electric customers. This action to will be viewed favorably by both of the rating
agencies (Fitch and Standard and Poors).
FISCALIACT: The reduction in the transfer helps to keep electric utility rates below Pacific
Gas and Electric rates in most customer classes. The impact to the General
Fund has been absorbed by cost cutting measures. By establishing a base
amount for the transfer, the transfer amount as a percentage of revenues
will decrease and be more comparable to other jurisdictions for which the
transfer is a lower percent of revenues.
FUNDING: Not applicable
,(ap6es R. Krueger, Deputy City Manager
APPROVED:
Bla ing, City Manager
RESOLUTION NO. 2007-25
A RESOLUTION OF THE LODI CITY COUNCIL REDUCING
THE ELECTRIC UTILITY FUND PAYMENT IN -LIEU OF TAXES
AMOUNT AS PREVIOUSLY ESTABLISHED AT 12% TO AN
AMOUNT ESTABLISHED BY FORMULA
WHEREAS, over the course of the last three budget years the City Council approved
reductions in the annual in -lieu payment (a percentage of the electric utility revenues
transterred to the General Fund) from 12% to the current 10.6%, resulting in a reduction of the
transllerred amount by more than $900,000; and
WHEREAS, the General Fund has been able to absorb the loss in revenues as a result
of measures taken to reduce costs. In order to ensure that this reduction becomes permanent,
staff recommends that a base transfer amount of $6,779,000 be established and that the base
amount be adjusted by the annual growth in the number of electric customers served; and
WHEREAS, the reduction in the transfer helps to keep electric utility rates below Pacific
Gas and Electric rates in most customer classes. By establishing a base amount for the
transfer, the transfer amount as a percentage of revenues will decrease and be more
comparable to other jurisdictions, for which the transfer is a lower percent of revervues.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby reduce
the Electric Utility Fund payment in -lieu of taxes amount as previously established at 12% to an
amount established by formula.
Dated: February 7, 2007
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I hereby certify that Resolution No. 2007-25 was passed and adopted by the City
Council of the City of Lodi In a regular meeting held February 7, 2007, by the following vote:
AYES: COUNCIL MEMBERS - Hansen, Hitchcock, Katzakian, Mounce, and
Mayor Johnson
NOES: COUNCIL MEMBERS - None
ABSENT: COUNCIL MEMBERS - None
ABSTAIN: COUNCIL MEMBERS - None
RANDI JOHL
City Clerk
2007-25
12.50%
12.00%
11.50%
11.00%
10.50%
10.00%
9.50%
9.00%
PILOT History
PILOT (%)