HomeMy WebLinkAboutAgenda Report - June 19, 1985 (101)ESTABLISHMENI' OF
RATE NORMALIZATION FUND
RESQUVION 140. 85-69
City Manager Peterson introduced Agenda Item K-4
requesting that Council establish a Rate
Normalization Reserve in the Electric Utility
Fund. The City Manager explained that the
purpose of this reserve is to provide funding for
the City's ultimate share of the costs of the
Calaveras County Water Project during the first
four years of its operations. The initial
contribution to this reserve as a part of the
1985-86 Operating Budget is $500,000.
The requested reserve would be isolated from
other .funds and utilized only for rate
normalization within the Electric Department.
Accrued interest would stay within this reserve.
Other monies previously received by the City to
be placed in this reserve include the recent
refund to the City of its share of the
Calaveras Project Development Fund; the NCPA
Developnent Fund repayment; and the refund from
PG&E of monies aced wholesale power purchasers
resulting from the sale of certain coal
facilities and settlement of hydro purchases.
Utility Director Henry Rice provided additional
information regarding the subject, presented
diagrams, and responded to questions as were
posed by the Council.
On motion of Council Member Snider, Reid
second, Council, adopted Resolution No. 85-69
approving an appropriation in the amount of
$1,578,083 to establish the Rate Normalization
Reserve.in the Electric Utility Fund.
The motion carried by the following vote:.
AYES: Council Members - Olson, Reid,
Snider, Hinchman (Mayor)
NOES: Council Members — Pinkerton
ABSENT: Council Members.- None
r
TO: TOM PETERSON, CITY,MANAGER
FROM: HENRY J. RICE, UTILITY DIRECTOR
DATE• MAY 1, 1985
SUBJECT: APPROPRIATION OF FUNDS FOR RATE NORMALIZATION RESERVE
Finance received a check from NCPA on April 30 in the amount of $822,179.62.
This amount represents a principle sum of $513,560.35 paid into the Calaveras
Project Development Fund over the past several years plus accrued interest
calculated over that period.
I am hereby requesting that that total amount be set ,aside in a Rate Normaliza-
tion Reserve (RNR) to help stabilize rate increases. The'RNR"should be isolated
from 'other -fund .sources 'and utilized only for rate stabilization within the
Electric Department.
A similar treatment should be made of the $466,827 (plus accrued interest)
received from the NCPA Development Fund Repayment in November, 1984. This
was an amount repaying development proceeds paid into the combustion turbine
project.
.`Additionally, on your first day in the office of City Manager, Lodi received
$289,077 in refund from P.G.&E. This amount was a Regulatory Commission ordered
refund of P,G.&E. monies to wholesale power purchasers resulting from sale of
certain coal facilities and settlement of hydro purchases. Please, consider
including amount a ell in the Rate Normalization Reserve.
To ] -:$1,578,083
-Copy to: Jerry Glenn, Assist. City Manager,
Robert Holm, Finance Director
Henry J. itice
t
RESOLUTION NO. 85-69
RESOLUTION ESTABLISHING A RATE NORMALIZATION RESERVE
IN TFL CITY OF. LORI ELECTRIC UTILITY FUND
VR]ERW, the City of Lodi in order to provide funding for the
City's ultimate share of the costs of the Calaveras County Water
Project during the first four years of its operation is desirous of
establishing a Rate Nozmalization Reserve in the City of Lodi 'Electric
Utility Fund.
WFEOEM it was Staff's reccnuendation that the initial
contribution to this reserve as part of the 1985-86 Operating Budget be
$5001000.
MEF AS, other monies previously received by the City to be placed
in this reserve include the recent refund to the City of its share of
the Calaveras Project Developrezt Fund; the NCPA Develogrent Fund
repaymwit; and the refund frau PG &E of monies awed wholesale power
purchasers resulting freers the sale of certain coal facilities -and
settlement of hydro purchases.
NOW THEREFORE BE IT RESOLVED that the City Council of the City of
Lodi does hereby appropriate the amount of $1,578,083 to establish the
Rate Normalization Reserve in the Electric Utility Fund.
Dated: June 19, 1985
I hereby; certify. that Resolution No. 85-69 was passed
and adopted by the City Council of the City of Lodi in
a Pegular Meeting held,June 19, 1985 by the following vote:
AYES: Council Members Olson, Reid, Snider,
Hirschman (Mayor)
NOES: Council Umbers - Pinkerton
ABSENT: Council Imnbers - None
ATTEST:
INALICE M RE
City Clerk