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HomeMy WebLinkAboutMinutes - July 31, 2001 SSCITY OF LODI INFORMAL INFORMATIONAL MEETING "SHIRTSLEEVE" SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, JULY 31, 2001 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, July 31, 2001 commencing at 7:05 a.m. A. ROLL CALL Present: Council Members — Howard, Land, Pennino and Mayor Nakanishi Absent: Council Members — Hitchcock Also Present: City Manager Flynn, City Attorney Hays, and Deputy City Clerk Taylor B. CITY COUNCIL CALENDAR UPDATE Deputy City Clerk Taylor reviewed the weekly calendar (filed). City Manager Flynn announced that a few Council Members plan to visit Japan in the near future and asked that they clarify their intent in traveling as individuals or City representatives. Council Member Land stated he would travel as a representative of the Lodi Sister City Committee. Council Member Pennino stated he intends to travel as an official representative of the City of Lodi. Mayor Nakanishi concurred they would travel as City representatives, with Worker's Compensation to be a consideration. Mr. Flynn suggested that, although private funds or sponsorship will defer travel costs, this item should formally appear before the City Council for discussion. C. TOPIC(S) C-1 "Water/Wastewater Rates" Public Works Director Prima provided financial background materials related to the Water/Wastewater funds (filed), documenting a steady decline in fund balances of 6% for water and 12% for wastewater. He reported that service fees were last increased for water in 1995 and for wastewater in 1991. A review of like agencies recommends that 10-25% of the operating budget be held in reserve, and City staff recommends an established Capital reserve for emergency situations of $300,000 for water (cost of replacing a well) and $600,000 for wastewater (unforeseen study results and legislative requirements). In response to Mayor Nakanishi, Mr. Prima stated the City has drawn from the fund balance in the past and that, with the resolution of the PCE/TCE issue in our favor, these funds borrowed internally would be replaced. In reply to Mayor Pro Tempore Pennino, City Attorney Hays explained that while the City's lender, Lehman Brothers, provides replacement funds for the attorneys, the City was not successful in negotiating a like reimbursement. The existence of the pending $3 million in City funds, following the outcome of the case, would have little effect on the needs of the water/wastewater fund. Mr. Prima stated that the City currently spends more than its revenue in maintenance only, with no prudent stance taken to replace older materials. Three main components effecting rates would be the dollar amount of account reserves, an infrastructure replacement program, and regulatory requirements. He stated Continued July 31, 2001 that the work to be done is considerable, and while rates could increase significantly, at present, the service fee for water is $10 per month for a 3 - bedroom home. Mr. Prima reported that a program has been created and additional staff hired to work toward replacing an estimated 2 million feet of pipe. The program addresses critical components such as broken pumps or water mains, proactive pump and water main services, and the lagging condition of wastewater collection. He explained that unlike wastewater expenditures, water expenditures are more easily maintained with the securing of funds to address DBCP issues and a possible resolution to the PCE/TCE situation. He then added that while Raydon content, chlorination rulings, and possible fluoridation may be future issues that effect the fund balance — they are not items of concern at this time. In response to Mayor Pro Tempore Pennino, Mr. Prima agreed that a comparison of cities would be beneficial, but suggested the study include same -age or older cities with similar infrastructure and maintenance issues. Mr. Prima noted it would further serve the City's needs to include a comparison of fee increase and alternative funding resources. Mr. Prima reported that staff has estimated it would cost in excess of $34 million to meet current regulatory requirements and to upgrade its wastewater plant to meet discharge requirements. Costs may be deferred through redevelopment, grant funds, project partners, a possible power plant, and increased water/wastewater rates. Mayor Nakanishi shared that as Lodi's representative to the County's Water Advisory Commission, he is familiar with the proposed surface water supply project. He stated that since Lodi has well water, it would not need to take advantage of the opportunity to access the Middle Bar project, but expressed concern that a vote to raise water fees might influence the county's application with the state for the project. Mr. Prima stated that since 1991, San Joaquin County has been involved in the state's application process to pursue a surface water supply project on the Mokelumne River at Middle Bar. Should the water supply become available to the City of Lodi, it is estimated to cost $35 million to prepare our system to accept a connection to that supply. Mr. Prima reported that the County is now considering whether to complete the filing process, at an additional cost of $2 — $4 million, with no guarantee of approval. Council Member Howard recalled that Council recently opposed staffs recommendation for water meter installations and asked Mr. Prima to give a short history on the topic. Mr. Prima explained that staff proposed installing water meters incrementally throughout the City, with system costs possibly being offset by grants, project partners, or loans, but no further exploration was done due to Council's decision. He further shared that the cost to install a meter is approximately $1,000 per residence. City Manager Flynn stated that while water meters will not conserve usage, they can be a tool for promoting conservation through offering rebate programs for low -flow toilets, showerheads, and drip -irrigation systems. He reported that the City provides untreated water to farmers, which reduces their well pump usage and reserves the water table. Inevitably, Lodi will need to acquire additional water in the future; this would likely be surface water and it is anticipated to be very costly. San Joaquin County lists Lodi as having the highest consumption rate in the county, which indicates that something must be done to promote conservation and extend our current resources. 2 Continued July 31, 2001 At the request of Mayor Pro Tempore Pennino, Mr. Prima explained that the City's infrastructure replacement would require $2.2 million for water and $1.8 million for sewer, at an average cost of $200 per foot of pipe. The work would be contracted to include pipes, valves, tie-ins, trenching, manhole repairs, fire hydrants, street repairs, and metering new service for residential. He noted that costs decrease when work can be done in conjunction with construction or improvement projects. Approximately 40% of all water/wastewater lines are located in back yards, which complicates replacement. It could take up to 15 years to replace all the 2" water pipes. Council Member Land stated that the City of Lodi cannot afford to have its enterprise funds depleted or continue to neglect the aging infrastructure. Mr. Land recommended that staff review rates annually and encouraged Council to fast-track a replacement program before the system fails and pipes collapse. Mayor Pro Tempore Pennino concurred with Mr. Land's direction that staff proceed expediently in providing a program of action. Mr. Prima stated that staff would respond to Council's inquiries and requests for information as soon as possible and is scheduled to return to Council at a future meeting to provide options and a recommendation for an infrastructure replacement program. PUBLIC COMMENTS: Eunice Friederich expressed concern that residential water rates are based on the number of bedrooms, noting that while some small homes have four or five families living in them, many widowed residents live alone in 3 - bedroom homes, creating an unfair charging system. She stated that while meters would provide more accurate usage information, they are very expensive. Ms. Friederich asked that Council and staff find a more equitable system for billing, suggesting that perhaps a rate based on the number of people living in a residence would be a more accurate measure of water use than the number of rooms in a home. Mike Holly, representing a group with investments in Lodi, stated he knew of a benchmark program developed in Savannah, Georgia, in which underdeveloped areas received funds allocated toward development and infrastructure repairs, with a panel of individuals charged with reviewing and monitoring point of occupancy. Mr. Holly stated he has already contacted City staff and will provide them with a copy of this program for review. D. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS None. E. ADJOURNMENT No action was taken by the City Council. The meeting was adjourned at 8:20 a.m. ATTEST: Jacqueline L. Taylor Deputy City Clerk 3 Mayor's & Council Member's Weekly Calendar WEEK OF JULY 31, 2001 Tuesday, July 31, 2001 V Reminder 1' Semi -Annual Campaign Statements due to the City Clerk's office by - 5:00 p.m. 7:00 a.m. Shirtsleeve Session 1. Water/Wastewater Rctes Noon Retirement luncheon for Management Analyst, Sharon Blaufus; Hutchins Street Square - Kirst Hall. r-lAlvo 4:00 p.m. ',-° t Howard. Ground Breaking Ceremony for Mary Graham Children's Shelter, French Camp. Wednesday, August 1, 20011. 9:00 - 11:00 a.m. Howard. in Leaders Meeting with Assemblyman Anthony Pescetti, State Capitol. 7:00 p.m. City Council meeting _ 2 Closed Session items (NOTE: 6:00 n.m ) 6 Presentations 16 Consent Calendar items One Public Hearing 3 Regular Calendar items , August 2, 2001 '17 Chamber of Commerce Governmental Relations Committee meeting, Chamber office. 5:00 P.M. Land and Pennino. Lodi City Council and LUSD 2x2 meeting; Carnegie Forum - Large Conference Room. 3, 2001 !Saturday. August 4, 2001 4 4:00 - 10:00 p.m. Greater Lodi Area Youth Commissions Wet -n -Wild, Lodi Lake Beach. 'Sunday, August 5, 2001 1:00 - 4:00 p:m. Reception at the Lodi Art Gallery in the Lakewood Mail featuring local artists. Monday, August 6, 2001 Disclaimer: This calendar contains only information that was provided to the City Clerk's office counci I',misc'rr:calndr.doc J Water/Wastewater Utility Issues (In Two Parts) Part 1 — July 31, 2001 Shirtsleeve ■ Declining Fund Balance ■ Budget Objective #7 -To Provide Resources to Maintain City's Infrastructure ■ Regulatory & Other Requirements ■ Direction/Next Steps Part 2 — Upcoming Shirtsleeve ■ Rates > History > Other Agencies > Rate Options for Lodi 2001-03 FINANCIAL PLAN AND SUNG ARY CHA:AGES IN FUND BALANCE - WATER FUND 1999-2000 2000-01 2001-02 2002-03 Revised Recommended Proposed Actual E I Budcet Budget Revenues Tax Revenues Licenses and Permits Finds and Forfeitures Investment/Property Revenues Revenue from Others Sen ice Charges Other Revenue Total Revenue Expenditures Operating Programs Public Safety Public Utilities Transportation Leisure, Cultural find Social Services Community and Economic Development General Government Total Operating Prograuts Bulk Power Purchase Other Purchases Capital Projects Debt Service Total Expenditures Revenues/Expenditures (Over/Under) Other Sources (Uses) Operating Transfers Ln Operating Transfers Out Other Sources (Uses) Cost ol*Medical careldental, vision Total Other Sources (Uses) Fund ❑alauce Beginning ortlre Yenr Fund Balance End or the Year Rescuved for Debt Service Designated Reserve Unresctved Total Fund Balance 93,540 68,000 3,966,830 3,843,000 776,290 172,000 4,836,660 4,08J,000 4,013,394 3,433,102 4,013,394 3,433,102 1,649,809 1,603,471 226,946 228,013 5,890,119 5,264,586 (1,057,439) (1,181,586) 16,975 (655,739) (655,545) 2,383,534 832,000 (65,690) (25,295) 1,684,080 151,160 1,613,075 2,243,666 2,213,666 1,213,240 ---"i.243,666 1,218,240 G-18 69,701 3,830,605 240,000 4,140,306 2,741,425 2,741,425 545,000 227,975 3,511,400 625,906 (770,249) 25,000 (745,249) 630,437 511,144 511, 144 2001.03 FINANCIALPLANAND SUNVvLARY CHANGES IN FUND BALANCE - WASTEWATER FUND 1999-2000 2000-01 2001-02 2002-03 Revised Recommended Proposed Actual Bud tt Budeet Budget Revenues Tax Revenues Licenses and Permits Fincs and Forfeitures Investment,'Property Revenues Revenue from Others Sctvicc Charges Other Revenue Total Revenue Dspcnditures Operating Programs Public Safety Public Utilities Transportation Leisure, Cultural and Social Services Community and Economic Development General Government Total Operating Programs Bulk Power Purchase Other Purchases Capital Projects Debt Scrvice Total Expenditures RevenueslL• spenditures (Over/Under) Other Sources (Uses) OperatingTransfers In Operating Transfers Out Other .Sources (Uses) Cost nr\Icdical carcfdental, vision Total Other Sources (Uses) Fund linl:mce Bcoghwhig of the Year Fund Balance End orthe Year Rescr%-ad for Debt Service De3i,.!ni,ed Reserve Unreserved Total Fund Balance 231,356 305,000 263,983 263,933 4,053,245 4,447,000 4,515,305 4,229,925 114,857 92,000 116,000 116,000 4,454,457 4,844,000 4,900,788 4,614,903 3,009,068 3,272,570 3,427,190 3,401,135 3,009,063 3,427,190 3,401,135 3,272,570 46,000 71,000 635,736 944,000 853,025 476,000 806,770 $03,070 812,335 8t7,465 4,451,574 5,019,640 5,135,600 4,765,600 2,883 (175,640) (237,812) (150,692) 161,779 (726,749) (580,301) (751,855) (739,345) 173,591 (125,809) (53,100) (113,300) (113,300) (517,183) (663,401) (570,145) (857,645) 3,832,966 3,318,661 2,479,620 1,371,664 3,318,661 2,479,620 1,371,664 363,327 3,318,661 2,479,620 1,371.664 363,327 G•19 Water/Wastewater Reserves ■ Present City Policy — Minimum of 15% of annual operating expenses. ■ AWWA — 5% annual surplus revenue over total expenses; six to twelve months of O&M expenses, plus one year's debt service. • City of Tracy — 25% of annual operating plus one year's debt service. ■ City of Stockton — 25% of annual operating plus capital reserve (unspecified amount) ■ State Of California (Loan Fund Revenue Guidelines— 10% to 50% of annual operating plus capital reserve ■ Consultant (Washington State) — 10% of operating, plus $250,000 contingency reserve (emergency repairs), plus one year's capital costs. ■ Recommended Reserve for Lodi Water/Wastewater Utilities: > 15% of annual operating expenses, plus > $300,000 capital reserve in Water > $600,000 capital reserve in Wastewater Infrastructure Replacement • Major City Objective: Provide Resources to Maintain City `s Infrastructure. Critical Components of Water/Wastewater System Being Maintained ■ Replacement of Underground Facilities — Water Distribution Mains & Services and Wastewater Collection Pipes Is Lagging �> Replacements Being Done In Conjunction With Other Projects ➢ Need to Move Into a Pro -Active Replacement Program Has Been Recognized ➢ Staffing Now In Place to Begin Program ➢ New Budget (2 — Year) Includes $300,000 (W) & $200,000 (WW) per year ✓ Will replace about 2,400 Ft. of pipe ✓ WIWW systems have about 2 Million feet of pipe ✓ 2,400 Ft. represents 0.12% of the system's total footage ✓ At that rate of replacement, a pipe installed today would have to last 824 years before it gets replaced ➢ Replacement on a 100 -year cycle would require funding of $2.2 Million per year for water & $1.8 Million for sewer ➢ Replacement on a 75 -year cycle would require funding of $3.0 Million for water and $2.4 Million for sewer Regulatory and Other Requirements ■ Wastewater > Meet New Discharge Permit Requirements ✓ Estimates in $34 Million Range ✓ Other Agencies Seeing Additional Requirements & Cost ✓ Some Portion of Cost Will Be Allocated To New Development ✓ Possible Offsets — Grants & Project Partners > Energy Cost? ? ? > General Cost of Living/Operations • Water > Regulatory Requirements ✓ Contaminants — DBCP, PCE/TCE, others ✓ Naturally Occurring Elements — Radon, Arsenic ✓ Fluoridation & Chlorination ✓ Cost Impact Will Depend on Levels Established & Grant Funding > Provide Additional Supply ✓ Wide Range of Potential Costs - - $35+ M. for Surface Water Transport & Treatment (If Available) - $2 to $4 M. for Prelim. Engineering & Permits for County Project ✓ Conservation ✓ Possible Offsets — Grants & Project Partners > Energy Cost? ? ? > General Cost of Living/Operations --� - rl�,) ( � d I Rate Comparisons State of California - FY 99/00 Survey Report - $19.70 Wastewater Rates: $10.12 Stockton 651 agencies reporting Manteca $9.22 Monthly Rates - All Adv. Secondary Tertiary Low $4.25 $7.12 $5.90 Median $16.67 $19.00 $19.80 Average $19.71 $21.17 $22.55 High $91.38 $52.25 $76.17 Lodi $7.12 Other San Joaauin County Wastewater Aaencies: Linden CWD $19.70 Escalon $10.12 Stockton $18.33 Manteca $9.22 Country Club SD $17.32 Lockeford CSD $8.50 Lathrop $14.74 Ripon $8.20 Tracy $17.50 Woodbridge SD $7.83 Black & Veatch - Statewide surveys Lodi $12.45 2000 Wastewater 420 agencies $5.50 $15.79 $18.29 $88.75 $7.12 RATECOMP-7-01.xlsComparisons 2001 Water 460 agencies Monthly Rates: Low $6.30 Median $28.03 Average $28.67 High $91.24 Lodi $12.45 2000 Wastewater 420 agencies $5.50 $15.79 $18.29 $88.75 $7.12 RATECOMP-7-01.xlsComparisons City of Lodi Water Rate Survey July 2001 Survey Cities - 2000 System Demographics Davis Escalon Lathrop Madera Manteca Merced Ripon Roseville Stockton Tracy Turlock Vacaville Woodland Yuba City Average Lodi Population Served 61,500 6,000 11,000 43,207 51,000 10,100 86,000 •: •11 96,840 50,300 47,485 57,935 # of customers: at Rat % Metered % - 0% 15,300 100% - 0% 1,940 100% - 0% 2,894 100% 9,404 97% 303 3% 0% 13,001 100% 2,897 91% 276 9% 27,000 66% 14,000` 34% - 0% 100% - 0% 17,184 100% - 0% 24,448 100% 11,000 87% 1,700 13% 15,980 1,051 Residential meters are installed but are not being read Production) Gallons/ Million Gals. Source I capita/da! 4,500 Wells 200 448 Wells 205 820 Wells 204 3,856 Wells 245 4,108 Wells 221 Wells 1,260 Wells 342 8,356 Surface 266 Wells(56%) Surface(44%) 4,680 Wells(45%) Sur`ace(55%) 218 7,148 Wells 6,500 Wells(37%) surface(63%) 184 5,600 Wells 305 Wells(2 % ) 4,298239 5,449 Wells 258 Avg. GPCD (metered): 205 Avg. GPCD (Flat): 283 RATECOMP-7-01.xlsOemographics City of Lodi Water Rate Survey July 2003 Turlock Flat Rate 513.45 /mo. n/a Metered Vacaville Metered Woodland Flat Rate Metered Yuba City Flat Rate Metered S9.45 Imo. $0.47 /1000 gal S16.4 9 /mo. 50.69 /100 cu. ft. 57.45 fmo. n/a $3.90 fmo. $0.30 /100 cu. ft. 513.45 /mo. $7.05 for 0 to 5 rooms. S7.90 for 6-8, S8.70 over 8 plus charge based on parcel area (55.55 up to 5,500 SF, 50.85 for each add'I 2000 SF) $16.50 Imo. Water charge decreases to S0.40 over 50,000 gallons, 50.17 over 150,000 gallons $32.66 Imo. Water charge increases to 50.98 over 1,200 cu. ft. 15% discount for senior citizens on base and consumption charge. $8.79' Imo. For single family lot 5.000 to 10,000 SF; 56.10 under 5,000 SF, 59.10 over 10.000 SF (18% user tax reviewed every other year.) 511.70' Imo. S22.45 /mo. n/a $22.45/mo. 512.35 Imo. 50.775 /100 cu. ft. $15.49 /mo. Includes 1,600 cu. ft. minimum quantity Average Total for City Base Charge Water Charge typical Comments Metered S 11.071mo. $0.553 /100 cu. ft. residence rates per 1000 gal. adjusted to 100 cu. ft. Davis Metered $8.71 /mo. 50.49 1100 cu. ft. 578.54 Imo. Water charge increases to $0.581100 cu. ft. for amount over winter use Metered S11.43 /mo. $0.296 /100 cu. ft. 517.37 /mo. "base line". Escalon Metered $11.29 Into. $0.8185 /1000 gal. $23.52 Imo. $0.9004/11,000 gals. for 50,000-80,000 gal., greater than 80,000 gal. $0.6122 1100 cu. ft. $0.990-11000 gal. Lathrop Metered S10.24/mo. $1.1300 /1000 gal. S27.19 Imo. Madera ISO.8452 /100 cu. ft. Flat Rate $9.72 /mo. n/a $9.72 Imo. For 1st 5,000 sq. ft. lot. Increases 50.13 per additional 100 sq. ft. Metered S0.37 /1000 gal. S5.55 Imo. No base charge. Manteca Metered $9.20 /mo. $0.43 1100 cu. ft. $20.17" /mo. Water charge is $0.57/100 cu. ft. for amount over 2,000 cu. ft. User tax of $2.35 added to all accounts. Merced Flat Rate $7.17 Imo. n/a 57.17 /mo. $7.17 for first 10,000 SF, per table up to S39.90 for 46,000 SF Metered S 17.78 /mo. $0.5041100 cu. ft. S17.78 Imo. Base charge includes water allowance up to amount under quantity rate (3,500 cu. Ft. for'/."). Ripon Flat Rate 517.86 /mo. n/a S17.86 Imo. Lot size up to 10.000 SF. Metered S12.98 Imo. $0.900 /100 cu. ft. $18.43 Imo. Base charge includes first 1400 cu. Ft. Roseville Flat Rate S12.80 /mo. n/a S13.44' /mo. For single family lot between 4,901 and 8.900 SF; per table for other sizes Metered $9.80 /mo. $0.40 /100 cu. ft. 514.51' /mo. Firs', 1,000 cu. ft. in base charge; water charge increases to $0.43/100 cu. ft. for 5.000-15.000; S0.46/100 cu. ft. for 15.000-25.000; 50.49/100 cu. ft. for .25,000 cu. ft. plus 5°I user tax. Stockton (City) Metered $13.79 /mo. 50.6651100 cu. ft. 529.30' Imo. $0.566/100 cu. ft. for amount over 30,000 cu, ft. plus 8% user tax. Tracy Metered 59.85 Imo. $0.85 /100 cu. ft. 527.61 Imo. Water charge increases to S1.20 over 1,200 winter/1.800 summer cu. ft.. $1.40 over 1,900w/2,900s cu. ft., $1.50 over 19,000w/28,700s cu. ft. Turlock Flat Rate 513.45 /mo. n/a Metered Vacaville Metered Woodland Flat Rate Metered Yuba City Flat Rate Metered S9.45 Imo. $0.47 /1000 gal S16.4 9 /mo. 50.69 /100 cu. ft. 57.45 fmo. n/a $3.90 fmo. $0.30 /100 cu. ft. 513.45 /mo. $7.05 for 0 to 5 rooms. S7.90 for 6-8, S8.70 over 8 plus charge based on parcel area (55.55 up to 5,500 SF, 50.85 for each add'I 2000 SF) $16.50 Imo. Water charge decreases to S0.40 over 50,000 gallons, 50.17 over 150,000 gallons $32.66 Imo. Water charge increases to 50.98 over 1,200 cu. ft. 15% discount for senior citizens on base and consumption charge. $8.79' Imo. For single family lot 5.000 to 10,000 SF; 56.10 under 5,000 SF, 59.10 over 10.000 SF (18% user tax reviewed every other year.) 511.70' Imo. S22.45 /mo. n/a $22.45/mo. 512.35 Imo. 50.775 /100 cu. ft. $15.49 /mo. Includes 1,600 cu. ft. minimum quantity Average Flat Rate 511.36 Imo. n/a S11.61 /mo. Metered S 11.071mo. $0.553 /100 cu. ft. $20.05 /mo. rates per 1000 gal. adjusted to 100 cu. ft. Lodi Flat Rafe 512.45 /mo. n/a S12.45 /mo. ranges from 53.65 for 1 bedroom to 525.84 for 7 br's. Metered S11.43 /mo. $0.296 /100 cu. ft. 517.37 /mo. Base charge does not include any water allowance. Typical Residence Criteria: Units (agency affected) Water Use: 15,000 galtonsfmonth ( 2.005 cu. ft.) Parcel Area: 5,000 square feet (Madera, Merced, Ripon, Rosevil!e, Woodland) Meter Size: ''/T size of service pipe is typically 1' minimum, meter is usually smaller Rooms: 6 number (Turlock) Bedrooms: 3 number (Lodi) user tax added RATECOKIP•7.0 t .xlsRales