HomeMy WebLinkAboutAgenda Report - October 1, 2008 K-05AGENDA ITEMV%4w5
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Adopt Resolution Approving Transfer of PCEITCE City Insurance Proceeds,
PCEITCE Rate, and Water Utility Fund to Fund PCEITCE Past Litigation
Expense ($13,000,000)
MEETING DATE: October 1, 2008
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Adopt a resolution approving the transfer of City's PCERCE
insurance proceeds, PCEITCE Rate and Water Utility funds to
reimburse the water fund for previous PCE/TCE litigation expenses
($13,000,000).
BACKGROUND INFORMATION: Money from the water fund was advanced to pay for the PCE/TCE
litigation and related expenses until December2004. As reflected in
minutes of previous meetings, the City Council intended for these
advances to be reimbursed.
The water fund used for PCEITCE expenses —and not operations — has a deficit balance of $14,728,464
Staff recommends transfers from three funds to reimburse the water fund for all but $1.7 million of the
deficit. The recommended transfer amounts are:
1. PCEITCE Settlement Fund (184) $1,700,.000
2. PCERCE Rate Fund (185) $5,000,000
3. Water Utility Fund (180) $6.300.000
Total $13,000,000
No funds designated for clean-up of a specific plume are included in this transfer. Additionally, the
settlement fund will continue to have non -designated funds available for future legal expenses. Settlement
funds received from potentially responsible parties, however, may only be used for clean-up.
The PCERCE Rate Fund receives approximately $2.7 million peryear. Future Rate Fund revenue may be
transferred to clear the remaining deficit in the original water fund.
FISCAL IMPACT: The transfer will reduce the fund balances in the three funds. The transfers will
not affect funding of the PCERCE clean-up program or the water utility's ability
to fund operations.
FUNDING AVAILABLE: PCEITCE Settlement Fund (184) $1,700,000
PCE/TCE ate Fund (185) $5,000,000
Water toWd (180) $6,300,000
ager
F. Wally S delin
Public Works Director
Prepared by Rebecca Areida, ManagementAnalyst
FINS/RAlbss
APPROVED:
Blairq�irfg, City Manager
K1WPIPROJECTSIWATERIPCE,TCEICPCE_TCE_Transfer daa 9/23/2008
RESOLUTION NO. 2008-200
A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING TRANSFER OF FUNDS TO FUND PCVTCE
PAST LITIGATION EXPENSE
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
approve the transfer of PCE/TCE City insurance proceeds, PCEITCE rate, and water
utilityfund as shown below to fund PCE/TCE past litigation expense:
PCVTCE Settlement Fund $1,700,000
PCVTCE Rate Fund $5,000,000
Water Utility Fund $6,300,000
BE IT FURTHER RESOLVED that the City Council does hereby approve future
transfers in the approximate amount of $1,700,000 to clear the remaining deficit from
PCVTCE past litigation expense in the water fund.
Dated: October 1,2008
hereby certify that Resolution No. 2008-200 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held October 1, 2008, by the
following vote:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, and
Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS— Mayor Mounce
ABSTAIN: COUNCIL MEMBERS — None
CaNNIFE+RRRIN
Assistant City Clerk
2008-200
Fund Transfers
Water Fund (183)
Minutes from Oct. 3, 2001
City Council Meeting
MOTION #'I 1 VOTE:
The City Council, on motion of Council Member Hitchcock, Howard second, adopted
Resolution No. 2001-231, pursuant to Section 13.08.01 D of the Lodi Municipal Code,
providing for and establishing rates to be charged for water service, and further directed
staff to:
add a line item on the utility bills identifying the water cast increase with a description
specifying its purpose for infrastructure replacement;
prepare a long-range, ten-year financial model spreadsheet identifying water, sewer,
and electric expenses, including the dollar amount for the utility user tax over this
period, and
• at the time of settlement related to the PCE/TCE issue, repay the water fund for the
previous $G million expenditure, using the balance remaining after priority takes.
The above motion carried by the following vote:
Ayes: Council Members — Hitchcock, Howard, Pennino and Mayor Nakanishi
Noes: Council Members — None
Absent: Council Members — Land
April 27, 2004
Rate Increases
o $1.2 million for WID water purchase
o $800,,000 for PCE/TCE Program
o Other (CVWS,, CPI adjustment)
Fund New Fund
Balance Transfer Balance
• Water
Operating (180) $7.3 M ($6.3 M) $1.0 M
Journal Entry
• PCE/TCE
Expenses (183) ($14.7 M) $13.0 M ($1.7 M)
• PCE/TCE
Settlements (184) $3.7 M ($1.7 M) $2.0 M
• PCE/TCE
Rates (185) $5.0 M ($5.0 M) $0
Questions