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Home My WebLink AboutMinutes - June 26, 2007 SSCITY OF LODI INFORMAL INFORMATIONAL MEETING "SHIRTSLEEVE" SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, JUNE 26, 2007 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, June 26, 2007, commencing at 7:27 a.m. A. ROLL CALL Present: Council Members — Hansen, Mounce, and Mayor Johnson Absent: Council Members — Hitchcock and Katzakian Also Present: City Manager King, Deputy City Attorney Magdich, and City Clerk Johl B. TOPIC(S) B-1 "Utilities Quarterly Update" Electric Utilities Manager Ken Wisel provided a PowerPoint presentation regarding the quarterly update. Specific topics of discussion included a summary, financial results, electric expenses by series, sales, billing statistics, Northern California Power Agency general operating reserve, power supply, power supply contributing factors, open position, electric prices, and natural gas forward price curves. In response to Council Member Hansen, Mr. Wisel indicated one reason the numbers are well under budget is unfilled positions. In response to Mayor Johnson, Mr. Wisel stated staff will provide Council with information regarding the differences in the numbers, including the equipment line item. In response to Mayor Johnson, Mr. Wisel stated third -party revenues could include surplus sales of property and equipment. In response to Council Member Hansen, Mr. Wisel stated there is a sense that prices are dropping now, but during really hot periods they may rise again. He stated September may be a bit lower and may be the time to purchase. Discussion ensued between Mayor Johnson, Council Member Hansen, Mr. Wisel, and City Manager King regarding the open position, the numbers to be averaged for the open position, previously large open position and efforts to prevent the same in the future, timing associated with closing positions, authorization to close positions for specific months, and a policy associated with closing open positions. Public Works Director Prima provided a PowerPoint presentation regarding wastewater financials, operating expenses by series, water financials, water expenses by series, water and wastewater summary, White Slough contract for pipeline repairs, permit status, drinking water studies, water supply, interim permit for North San Joaquin County Conservation District and meeting, Groundwater Banking Authority efforts, and East Bay Municipal Utility District water protest and meetings. In response to Mayor Pro Tempore Mounce, Mr. Prima stated Project No. 3 on the water replacement program is wrapped up with some concentration in the downtown area and Project No. 4 is in design and will be brought back to Council shortly. In response to Council Member Hansen, Mr. Prima stated construction on the water treatment plant will likely begin by 2010 and the process will entail an Environmental Impact Report and State permits. Mr. Prima also stated that the Woodbridge Irrigation District is willing to give an extension on the current agreement, which will be coming back sometime during the summer. Continued June 26, 2007 In response to Mayor Johnson, City Manager King stated the scope of the project will determine what level of environmental certification will be required. Mr. King stated additional information regarding the assessment process and related information will also be needed. In response to Mayor Johnson, Mr. Prima stated the $200,000 from North San Joaquin has not been paid yet because it has not been assessed, it will be implemented in the coming fiscal year, it may not go away if the application with the Water Board is denied because it is not directly related, and they are not losing all their water because they may also have replacement water. In response to Mayor Johnson, Mr. Prima stated the Flag City money has not yet arrived and they are still working on the design standards. Mr. King stated a Council action remains for the modification of the ordinance, which will not be brought forth until the design standards are provided. In response to Mayor Johnson, Mr. King stated that as to the winery hook-ups, Van Ruitten is physically connected and the two others received preferential rates. Mr. King also provided an overview of the downtown Tasting Room timeline and status. City Manager King stated they did not receive any proposals for the Electric Utility Guild Avenue property and staff will reassess the options. City Manager King provided an overview of the Leadership in Energy and Environmental Design (LEED) program, which promotes green practices and sustainability of new development. Mr. King stated Lodi is 1 of 61 cities invited to participate in the neighborhood development program and they are working with Reynolds Ranch and Wildan. He stated they will need to develop guidelines for certification and discussed some factors regarding the same. In response to Mayor Johnson, Mr. King stated the program is primarily applicable to commercial, with some residential application. 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 8:11 a.m. ATTEST: Randi Johl City Clerk 2 AGENDA ITEM 8"'1 CITY OF LODI COUNCIL COMMUNICATION • TM AGENDA TITLE: Receive Quarterly Utility reports from Electric, Water and Wastewater Utility Departments for 3`d Quarter Fiscal Year 2007-2008 MEETING DATE: June 26, 2007 PREPARED BY: Electric Utility, Water Utility and Wastewater Utility Departments RECOMMENDED ACTION: Receive Quarterly Utility reports for Electric, Water and Wastewater Utility Departments for 3`d Quarter Fiscal Year 2007-2008. BACKGROUND INFORMATION: The attached Electric, Water and Wastewater Utility Department financial reports for the 3`d Quarter Fiscal Year 2007-2008 are presented in accordance with established reporting requirements. In summary the operations for the 3`4 quarter of fiscal year 2007-08 show the following financial results: Electric Utility • 3rd Quarter Financial Results ahead of projections (+$650,000) • General Operating expenses well under budget (-$1.6 Million or 25%) • Power Supply costs up $2.3 million (+7%) • Sales down 3.5% but revenues up 2.6% Wastewater: • Cash balance is $4.3 million • Revenues on target at 80% of estimated • Operating expenses under target at 62% of budget Water: Cash balance is $856 thousand Revenues are on target at 79 % of estimated Fund Operating expenses under target at 63 % of budget Staff from the Electric, Wastewater and Water departments will highlight areas of interest and the financial results during the power point presentation at the shirtsleeve meeting on June 26, 2007. m Krueger eputy City Manager APPROVED: _ / :�� Blair khd, City Manager Electric Utility Department FY07 Quarterly Update (Through March 31, 2007) Shirtsleeve Meeting June 26, 2007 Summary • 3,dQuarter Financial Results ahead of projections (+$650K) • General Operating expenses well under budget (-$1.6M or 25°/a) 9 Power Supply costs up $2.3 million (+7%) • Sales down 3.5% but revenues up 2.6% 2 Q3 Financial Results Cash Flow Ending March 31, 2007 Revenue Projections Actuals Difference Total Revenues 50,095,225 51,705,638 1,610,413 Expenses Purchase Power Non Power 33,282,396 8,907,211 35,651,283 7,229,321 2,368,887 (1,677,890) Total Expenses 42,189,607 42,880,604 690,997 Net Revenue for Debt Service 7,905,618 8,825,034 919,416 Debt Service 1,980,389 2,246,003 265,614 Net Revenue 5,925,229 6,579,031 653,802 In -lieu Transfer to General Fund 5,084,250 5,084,251 - Net Increase (Decrease) in Working Capital 840,979 1,494,780 653,802 Beginning Cash Balance 396319402 396319402 =653,801 Changes in GOR 1,503,615 1,503,615 Ending Cash Balance 5,975,996 6,629,798 3 or Electric Expenses by Series Personnel $ 6,162,788 $ 4,622,091 $ 3,745,905 60.8% Supplies, Materials, Services $ 1,347,619 $ 1,010,714 $ 781,632 58.0% Equipment, Land, Structures $ 905,041 $ 678,781 $ 266,369 29.4% Other Payments $ 479,100 $ 359,325 $ 186,249 38.9% Communication & Transportation $ 81,683 $ 61,262 $ 63,328 77.5% Total Operating Expenses $ 8,976,231 $ 6,732,173 $ 5,043,482 56.19% Note: Includes Capital Expenditures 4 Q3 Sales July 2006 0 0 650 504 August 2006 0 0 449 430 September 2006 3 13 288 263 October 2006 96 76 9 73 November 2006 316 348 2 0 December 2006 530 609 0 0 January 2007 617 592 0 0 February 2007 348 391 0 0 March 2007 157 313 9 0 Q3 Total 21067 21342 15407 11270 5 Q3 Billing Statistics Residential 124,923,045 21,485,977 $ 0.1720 Small Commercial 124,083,963 18,465,289 $ 0.1488 Large Commercial/Small Industrial 29,029,760 3,783,349 $ 0.1303 Industrial 70,398,585 6,885,381 $ 0.0978 TOTAL 3487435,353 50,619,996 $ 0.1453 0 q�►For NCPA "GOR" • General Operating Reserve • Provides funding for contingencies • GOR levels ➢$3,113,432(June 30, 2006) ➢$4,617,047 (March 31, 2007) $1,503,615 Increase 7 Power Supply 0 Q3 Power Supply Generation $2952975452 $3457475389 $ 554495937 18.6% Transmission $ 454505574 $ 357147428 $ 736,146 -16.5% Management Services $ 1,682,768 $ 1,638,459 $ 44,309 -2.6% Third Party Revenue $ 27148,398 $ 4,4487993 $ 2,300,595 107.1% TOTAL $ 33,282,396 $ 35,651,283 $ 293689887 7.1 0 Q3 Power Supply Contributing Factors Increase — Contracts & Market Purchases - replacement power budget $67 vs. actual $89 MWh. $4,269,447 — Gas Plants -increase in fuel/maintenance costs. $131363613 — Hydroelectric Projects $48,061 TOTAL $5,454,121 Offsets — Third Party Revenue. ($2,300,595) — Transmission. ($736,146) — Member Services. ($44,309) — Geo Plants. ($4,184) TOTAL ($3,085,234) NET INCREASE $2,368,887 10 L�FVR�08 Ope PositionFY 11 July 2007 (3,699) 53,597 -6.9% (763) -2.2% (2,936) -14.9% (3,767) 49,592 -7.6% (2,015) -6.1% (1,752) -10.5% 320 42,940 0.7% 537 2.0% (218) -1.3% (1,210) 38,430 -3.1% (1,194) -4.7% (16) -0.1% (5,400) 35,719 -15.1% (4,616) -19.9% (784) -6.2% (8,048) 37,802 -21.3% (6,324) -27.1% (1,724) -12.0% (16,249) 36,994 -43.9% (14,091) -60.2% (2,157) -15.9% (15,428)35,512 -43.4% (13,224) -57.5% (2,204) -17.6% (13,964) 36,674 -38.1% (12,182) -52.8% (1,782) -13.1% (4,383) 36,293 -12.1% (4,736) -19.9% 353 2.8% (970) 39,059 -2.5% (1,936) -7.7% 966 6.9% (3,109) 43,062 -7.2% (1,994)1 -7.3% (1,114) -7.1% Net Total (75,906) 485,674 -15.6% -62,538 r -20.1% -13,368 -7.7°/ 11 $90 $85 $80 $75 2008 Electric Prices Fwd Impl Heat Rate Fwd Elec Price 12,500 12,000 11,500 11,000 $70 10,500 $65 10,000 $60 9,500 $55 9,000 $50 8,500 I 0 0 IT 0 14 Lo 0 0 Lo 0 w 0 Lo 0 w 0 to 0 Co 0 Co 0 co 0 r%- 0 ti 0 0 N 0 N 0 N 0 0 N N 0 N 0 N 0 N 0 N 0 N 0 N 0 N 0 N 0 N 0 N Ln r G> N N N co M r m N r NN M Co r- M r cc N Co Ln O M Co O> M Co M � CO r r N U10 12 9�►F0F�� $10.5( $10.0( $9.5( $9.0( $8.5( $8.0( $7.5( Natural Gas Forward Price Curves Mav 29 Mav 30 Mav 31 Jun 01 Jun 04 1- W OOC7 w O O N %114N O O O G O r r � V: r r `! d m JV H d' �±' Z Z > O a W W W Q V Q Q O z Q v) W p O Q ' z 13 Summary • 3,dQuarter Financial Results ahead of projections (+$650K) • General Operating expenses well under budget (-$1.6M or 25°/a) 9 Power Supply costs up $2.3 million (+7%) • Sales down 3.5% but revenues up 2.6% 14 q�►Fo�� Water and Wastewater FY07 Quarterly Update (Through March 31, 2007) City Council Meeting June 25, 2007 15 000 • WATER: • Wastewater and Water had a good 3rd Quarter of FY07 • Wastewater cash balance is $4.3 million • Wastewater Fund Revenues on target at 80% of estimated • Wastewater Fund Operating expenses are 62% of budget • WATE R: • Water Fund Cash balance is $856,000 • Water Fund Revenues are on target at 79 % of estimated • Water Fund Operating expenses are 63 % of budget 16 Wastewater Financials Ending 3/31/07 Sales Revenues $8,016,500 $6,351,217 79.2% Other Revenues 484,400 999,617 206.4% Impact Mitigation Fees 10700 809,829 50.4% Revenues a Operating $10,107,900 $5,063,121 1 $8,160,663 3,154,719 1 80.7% 62.3% Non -Operating 908,793 796,900 87.7% Capital Outlay (See note below) 298,500 378,119 126.7% Total Expenses $6,270,414 $4,329,738 69.1% Net Revenue for Debt Service $3,837,486 $3,830,925 99.8% Debt Service 3,339,110 2,736,022 81.9% Net Revenue $498,376 $1,094,903 219.7% Less In -lieu Transfer to General Fund 892,500 669,375 75.0% t Increase (Decrease) in Cash i Other Changes in Cash 1 ($394,124)1 (1,010,000) $425,528 (342,172) 1 -108.0% Ending Cash Balance $195529830 $493359056 279.2% Debt Proceeds Reserve $13,029,023 Note: Capital project expenditures of $30,543,500 (included in budget document) are not included in this analysis. 17 Wastewater Operating Expenses by Series l $ 2,468,321 $ 1,622,761 65.7% Materials, Services 877,254 624,770 71.2% nt, Land, Structures F 102,675 71,043 69.2% ments 795,313 326,155 41.0% ication & Transportation 819,558 509,990 62.2% Total Operating Expenses $ 5,063,121 $ 3,154,719 62.3% 18 Water Financials Ending 3/31/07 19 Sales Revenues $9,707,100 $794739266 77.0% Other Revenues 399,900 6039127 150.8% Impact Mitigation Fees 234,000 551391 23.7% Total Revenues Operating $10,341,000 4,468,583 $8,131,784 2,811,946 78.6% 62.9% Non -Operating 909,259 7219541 79.4% Capital Outlay 6,926,748 25413,621 34.8% Total Expenses $12,304,590 $5,947,108 48.3% Net Revenue for Debt Service ($1,963,590) $2,184,676 -111.3% Debt Service 227,976 17,754 7.8% Net Revenue ($2,191,566) $2,166,922 In -lieu Transfer to General Fund 7679040 5759280 75.0% Net Increase (Decrease) in Cash Other Changes in Cash ($2,958,606) I 2,908,617 $1,591,642 m (822,753) -53.8% Ending Cash Balance $7799001 $61,0561,155 $8569025 $8,6875603 19 0 Water [a �PExpenses by Series Personnel $ 1,211,337 $ 761,370 62.9% Supplies, Materials, Services 621,811 217,955 35.1% Equipment, Land, Structures 3,851 1,812 47.1 Other Payments 1,751,844 1,313,035 75.0% Communication & Transportation 879,740 517,774 58.9% Total Operating Expenses j $ 4,468,583 $ 2,811,946 1 62.9% 20