HomeMy WebLinkAboutMinutes - June 28, 2005 SSCITY OF LODI
INFORMAL INFORMATIONAL MEETING
"SHIRTSLEEVE" SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, JUNE 28, 2005
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
June 28, 2005, commencing at 7:00 a.m.
A. ROLL CALL
Present: Council Members — Hitchcock, Johnson, and Mayor Beckman
Absent: Council Members — Hansen and Mounce
Also Present: City Manager King, Deputy City Attorney Magdich, and City Clerk Blackston
B. TOPIC(S)
B-1 "Utilities Quarterly Report"
Public Works Director Prima recalled that a total of $30 million was borrowed in 2003 and
2004 to go toward the White Slough plant. Over $18 million has been spent thus far, and a
third financing is contemplated in 2006, as well as the possibility of refinancing the 1991
Certificate of Participation.
Del Kerlin, Assistant Wastewater Treatment Superintendent, reported that in 2000 the City
was issued a waste discharge permit by the State, which required a tertiary treatment
process for discharge into the Delta. The aeration system was also improved and ground
work done in preparation for future projects. A cloth media type filter and ultra violet
disinfection system was used. In early 2004, equipment was ordered and a contractor,
Western Water, was hired who installed the tertiary treatment and ultra violet disinfection
equipment, which went on-line in January 2005. Mr. Kerlin noted that organics are building
up in the number one storage pond and this will have to be addressed in the near future.
Mr. Prima added that the older part of the plant is in need of upgrading, as the design
capacity of 8.5 million gallons a day cannot be processed to the level that is needed.
Design work on upgrading the secondary plant will begin this year and is expected to be
built in 2006-07. The City's permit expired in January 2005 and a new permit was applied
for in July 2004. Staff will be evaluating methods for nitrogen removal this year.
Charlie Swimley, Senior Civil Engineer, reviewed a handout entitled "Infrastructure
Replacement Program Update" (filed). He reported that much of the City's water,
wastewater, and storm drain infrastructure is over 75 years old and many water mains were
constructed from two- and three-inch pipe, which needs to be replaced with eight -inch
diameter mains. Water and wastewater rates were increased in part to pay for
infrastructure replacement program costs. To date, eight projects have been completed at
a cost of $5.5 million. By spring 2006, 22% (77,000 feet) of the two- and three-inch water
mains will have been taken out of service. 34,200 lineal feet of wastewater main has been
rehabilitated. Mr. Swimley reviewed the following projects planned for 2005-06: 1) 10,000
feet of central plume (PCE/TCE contamination) pipes will be lined, of which the
Environmental Protection Agency will pay 55% of the project cost; 2) the Lockeford Street
water main replacement project is nearly designed and will go out to bid before the end of
2005; 3) Olive Court main replacement; and 4) storm drain improvements associated with
the Lodi Avenue overlay.
Electric Utility Director Vallow reviewed handouts (filed) and described capital projects that
were designated in the 1999 bond. The Killelea substation reconstruction is estimated at
$4.5 million. Installation of transformer #2 at the industrial substation will cost between
Continued June 28, 2005
$850,000 and $1.5 million. He stated that the cost of projects are typically 20% for
engineering and design, and 80% contracted out. The Utility's goal is to shift the cost to
35% engineering and design, and 65% contracted out. The new west side substation is in
the pre -design stage and will initially cost between $3.5 million to $4.5 million, and at build
out will cost $6.5 million. Staff anticipates breaking ground on the project in approximately
two years. It is hoped that the new Municipal Service Center building will also house the
animal shelter and a fire station. Electric Utility's portion of the cost would be
approximately $5 million. A concept design will be solicited within the next two months.
As time permits, staff is re -grounding and fusing streetlights throughout the entire City. The
first phase of fiber optic installation is 60% complete. He ecplained that the timing of
projects depends upon how much of the Utility's rates are set aside in capital reserves.
Using examples in the handout, Mr. Vallow reviewed what staff considers when deciding
when and how to buy power, who to buy it from, and over what time period. He pointed out
that with "certainty" comes a cost. Staff, with the assistance of the Northern California
Power Agency (NCPA), will be developing a future buying / market strategy. He stated
that, currently, NCPA does not buy out beyond one year forward.
In answer to questions posed by Mayor Pro Tempore Hitchcock, Mr. Vallow stated that the
decision and risk threshold for buying power is his responsibility. McDonald Partners does
modeling and market analysis and are the intermediary between Lodi and six counter
parties that power is bought from and sold to. Lodi Electric Utility is on the market for
250,000 megawatt hours a year. He calculated that a $2 swing in power price over the
course of a year would equate to $650,000.
City Manager King stated that establishment of a policy for purchasing bulk power would be
brought forward for Council consideration in the future. He commented that with a large
reserve comes the luxury of greater risk and the opposite is true with a small reserve, as is
the case now.
In reply to Council Member Johnson, Mr. Vallow explained that the Steam Injected Gas
Turbine (STIG) efficiency is 30% less than the market. The Utility purchases gas primarily
to run in the STIG plant. He stated that, if money is going to be saved this year, it would be
on the off-peak markets where half the Utility's power is purchased.
Mayor Pro Tempore Hitchcock asked that Council be provided with a historical summary of
Lodi's power purchases compared to the actual market.
C. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
None.
D. ADJOURNMENT
No action was taken by the City Council. The meeting was adjourned at 8:28 a.m.
ATTEST:
Susan J. Blackston
City Clerk
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Infrastructure Replacement Program Update
June 28, 2005
Presentation Outline:
• Program Goals
• Program History
• Project Criteria
• Program Highlights