HomeMy WebLinkAboutMinutes - November 11, 2008 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, NOVEMBER 11, 2008
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, November 11, 2008, commencing at 7:01 a.m.
Present: Mayor Pro Tempore Hansen, Council Member Hitchcock, Council Member Johnson,
Council Member Katzakian, and Mayor Mounce
Absent: None
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Johl
ANNEW-1=01
B-1 Infrastructure Replacement Proaram Update (PW
City Manager King briefly introduced the subject matter of the wastewater infrastructure
replacement program.
Public Works Director Wally Sandelin provided a PowerPoint presentation regarding the
infrastructure replacement program. Specific topics of discussion included utility capital, annual
revenues, wastewater project areas, White Slough sewer trunk lining, wastewater debt service
correction, cash balances and debt correction, wastewater funds overview, impact mitigation fee
fund balance, operating expenses, contributing factors, cash flow summary, funds overview,
wastewater alternatives, and recommendations.
In response to Mayor Mounce, Mr. Sandelin stated previously there was not enough bidder
interest because of the size of the smaller projects. He stated that, if the projects were combined
to create a larger scale project, there may be additional interest from the bidders.
In response to Council Member Johnson, Mr. Sandelin confirmed that it may be a good time to
move forward on the projects in light of the soft economy; although, there is a cash flow concern.
In response to Council Member Hitchcock, Mr. Sandelin stated the 2009, 2011, 2013, and 2015
projects are each $2 million projects for a total of $8 million. Mr. Sandelin stated there are other
areas not listed, which will take an additional five- to ten-year period to complete.
In response to Mayor Mounce, Mr. Sandelin stated staff will be looking for direction from the City
Council regarding cash flow to finish the current project because the funds are not there right now
to cover the listed projects.
In response to Council Member Hitchcock, Mr. Sandelin stated the correction refers to the
$3.95 million amount listed, which is debt service that was paid for the 1991 Certificates of
Participation (COPs). He stated the COPs were never offset by a matching revenue stream
and believes there was no rate structure change to match the deficit from the COPs.
In response to Mayor Pro Tempore Hansen, Mr. King discussed the general process for COPs as
it relates to performa and coverage factors for obtaining debt service. Mr. King stated his guess is
that the performa involved a showing of new development, or an impact fee or rate increase
was contemplated but not implemented.
Continued November 11, 2008
In response to Council Member Hitchcock, Mr. Sandelin stated COPS existed for 1991, 2003,
2004, and 2007.
In response to Council Member Katzakian, Mr. Sandelin stated the existing COPs are 2003,
2004, and 2007, the term is generally 30 years, and the structure may vary.
In response to Council Member Hitchcock, Mr. Sandelin stated the one-time event for a
connection fee for users may have been in 2004 or 2005 and he believed the rate reference
referred to the current discussion and time period.
In response to Mayor Pro Tempore Hansen, Mr. Sandelin stated the other designated options
may be infrastructure replacement funds or rates.
Discussion ensued between Mayor Pro Tempore Hansen, Council Member Katzakian, and
Mr. King regarding unfunded mandates set forth by the State, the permitting process, and
requirements of the State to meet the standards at high costs.
In response to Mayor Pro Tempore Hansen, Mr. Sandelin stated the structure refers to
how personnel costs are allocated and accounted for.
In response to Council Member Hitchcock, Mr. Sandelin stated salary increases would be more
comparable to the Consumer Price Index, and the structure referred to is time and costs for
services by personnel and whether they are allocated to the water or wastewater funds.
In response to Mayor Mounce, Mr. King confirmed that the principle is consistent with each
department being charged for their fully loaded cost and a cost allocation study indicating the
same was also previously completed.
In response to Council Member Hitchcock, Mr. Sandelin stated that, while he does not have the
exact numbers or percentages, he is estimating that the cost of services is about $500,000, debt
service increase is about $500,000, and staff costs to monitor and report for current permit is
about $300,000 to $700,000. Mr. Sandelin stated additional staff may be required for the
additional White Slough monitoring and reporting requirements.
Discussion ensued between Council Member Johnson and Mr. King regarding some costs which
should have moved through wastewater to water and did not, the process for making
adjustments, the effect of any adjustments, and the overall principle of capturing the full cost of a
program including people, equipment, facilities, etc.
In response to Council Member Johnson, Mr. Sandelin stated the matter is scheduled to come
before Council for decision on January 7th.
In response to Mayor Mounce, Mr. Sandelin confirmed that operating and debt service was being
covered by infrastructure funds.
In response to Council Member Hitchcock, Mr. Sandelin stated that, while preserving 2007
COP debt service is listed as an option, it is generally not recommended.
General discussion ensued between the City Council and City Manager King regarding how the
City got to its current position, cash flow concerns, possible solutions including rate increases,
public outreach to citizens, stability of funds, and how the water meter installation or other
projects will affect the situation. Mr. King stated his understanding to summarize the discussion
was staff will look at a full rate model while keeping infrastructure separate. He stated
considerations will also include staffing, which is only allocated for the current and next year for
2
Continued November 11, 2008
approximately $4 million of projects, and how the water meter installation and other projects
including the water treatment plant will play a part.
In response to Council Member Hitchcock, City Attorney Schwabauer stated that, while he
understands there has been an overcharge of the groundwater for some time, it is important to
note that it is being overcharged.
In response to Mayor Mounce, Mr. Sandelin stated the proposed bottom tier for water meters may
address concerns regarding non -occupied properties.
Eileen St. Yves spoke in support of the City Council reviewing the infrastructure replacement
program all together to get a bigger picture and provide a better understanding to the public. She
also spoke of her concerns regarding charges for services on vacant properties.
Myrna Wetzel spoke in favor of the City Council reviewing the infrastructure replacement program
all together to ensure that all the facts are taken into consideration.
C. Comments by Public on Non-Aaenda Item
None.
Q
No action was taken by the City Council. The meeting was adjourned at 8:02 a.m.
ATTEST:
Randi Johl
City Clerk
AGENDA ITEM .,
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Infrastructure Replacement Program Update
MEETING DATE: November 11, 2008 (Shirtsleeve Session)
PREPARED BY: Public Works Director
RECOMMENDED ACTION
BACKGROUND INFORMATION
FISCAL IMPACT:
FUNDING AVAILABLE:
Information only.
Public Works staff will present an update and answer questions
regarding the Infrastructure Replacement Program.
Not applicable.
Not applicable.
J -/V. L , - -
F. Wally Sai0elin
Public Works Director
FW S/pmf
APPROVED:
Blair Kin ty Manager
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