HomeMy WebLinkAboutMinutes - February 3, 2009 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, FEBRUARY 3, 2009
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, February 3, 2009, commencing at 7:02 a.m.
Present: Council Member Hitchcock, Council Member Johnson, Mayor Pro Tempore Katzakian,
Council Member Mounce, and Mayor Hansen
Absent: None
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Johl
.. 01
B-1 First Quarter Fiscal Year 2008-09 Water. Wastewater. and Electric Utility De an rtmen
Financial Reports (CM)
City Manager King provided a brief introduction to the subject matter of the water/wastewater and
electric utility quarterly updates.
Water Services Manager Charlie Swimley provided a PowerPoint presentation specifically
discussing the wastewater operating results, wastewater fund cash flow summary operations,
wastewater funds cash balances, water operating results, water fund cash flow summary
operations, water fund cash balances, and water/wastewater utility accomplishments.
In response to Council Member Hitchcock, Mr. Swimley stated the difference between the
presentation provided in the agenda packet and the revised presentation handed out this morning
is that the $1.6 million figure represents current activity sales while the original higher number
reflected total sales.
In response to Mayor Hansen, Mr. Swimley stated the project was originally slated to be
completed in March 2009, but will now be complete by April 2009 due to a 30 -day extension for
some additional work.
In response to Mayor Hansen, Mr. Swimley stated the City was issued the permit in September
2007, there was a challenge after the permit was adopted, challenged right after adoption of
permit, and now the State Board has decided not to consider the matter any further after
receiving comments on the draft order. Mr. Swimley stated the City is continuing to operate under
the original permit issued.
In response to Council Member Hitchcock, Mr. Swimley stated the permit was originally issued
free and clear without any additional conditions. City Attorney Schwabauer provided an overview
of the administrative process and any procedure involved with the permit being issued by the
Regional Board, an appeal to the State Board, the State Board issuing a draft order modifying the
permit, the draft order not containing conditions that were necessarily more onerous, and the City
being more concerned with the conclusions in the draft order regarding groundwater.
In response to Council Member Hitchcock, Mr. Swimley stated the State decided last week that it
will not consider the order and that is good for now as the City's primary concern was with the
conclusion that the City was degrading the groundwater through its land application process with
salts and nitrogen. He stated the order was contested because the City felt there was no problem.
Continued February 3, 2009
In response to Council Member Hitchcock, Mr. King provided an overview of the broader context
of the process. Mr. King specifically discussed the political make-up of the Regional and State
Boards, the issues under the Clean Water Act considered by the Boards, the five-year cycle of
discharge permits whereby requirements and focus changes, and the fairly academic nature of
the studies involved.
In response to Council Member Hitchcock, Mr. Swimley stated staff continues to work on
studies and data collection on an ongoing basis to characterize the background conditions before
any conclusions can be drawn.
In response to Council Member Hitchcock, Mr. Swimley stated if it was needed Plan B would be
to start negotiating with the Regional Board to have the order remanded to them to allow the City
to work directly with them on any conditions of the draft order. Mr. Swimley stated the City has
been very proactive in dealing with discharge and has been working with the canneries as well
resulting in improvements over the past few years.
In response to Council Member Hitchcock, Mr. Schwabauer stated the State Board also attacked
other agency permits in the State, and not just the City of Lodi. Mr. Schwabauer stated he will
provide the documentation pertaining to the draft order to the City Council for reading if they
would like to do so.
In response to Council Member Johnson, Mr. Swimley stated the City can count on jumping
through some hoops every five years in light of new issues that arise with the Board and next in
line is probably mercury.
In response to Council Member Johnson, Mr. Swimley stated the background reports should be
complete in August 2010 and that will provide some specific information as to what is new and
old on the land.
City Attorney Schwabauer reviewed the process for what the City has already done and is
currently doing to assist with any nitrogen concerns in the area. Mr. King stated indexed costs in
the area are based on the cost of regulations and permits, in addition to other factors.
In response to Council Member Mounce, Mr. Schwabauer stated to date he has probably spent
approximately ten days off and on reviewing the permit related documentation. Mr. Schwabauer
stated at the current time he anticipates being able to handle any litigation that may arise in
house because there will be some other matters that will be resolved off the City Attorney's plate.
In response to Council Member Hitchcock, Public Works Director Wally Sandelin stated staff is in
the process of putting together a water model that will look at patterns and comparables.
Mr. Sandelin stated to date the water meter patterns look consistent with those of other
communities as the average customer is going to see the average bill, some will see reductions if
they live in smaller homes on smaller lots, and some may not based on larger homes on larger
lots with more landscaping.
In response to Mayor Hansen, Mr. Swimley stated there was some difficulty in reading meters at
first due to a reader issue but that seems to be resolved and the goal is to be able to read electric
and water meters at the same time.
In response to Council Member Hitchcock, Deputy City Manager Jordan Ayers stated they will
strive to bring the data after it is compiled to Council as quickly as possible.
2
Continued February 3, 2009
In response to Myrna Wetzel, Mr. Swimley stated drought will not affect supply to residents;
although, conservation is encouraged because there is a greater reliance on groundwater. He
stated there may be some affect on pumping levels but no significant impacts. Mr. Swimley stated
the canneries are also continuing to work on efforts to improve the liquid discharging on an
ongoing basis.
Electric Utility Director George Morrow provided a PowerPoint presentation regarding the Fiscal
Year 2009 quarterly update for the electric utility. Mr. Morrow specifically discussed an overview,
2009 budget versus first quarter actuals, Lodi Energy Center, electric expenses by series, first
quarter power supply, first quarter sales, first quarter billing statistics, Energy Cost Adjustment,
Northern California Power Agency (NCPA) General Operating Reserve (GOR), fiscal year 2009
open position, and summary.
In response to Council Member Hitchcock, Mr. Morrow stated the debt service is not a variable as
it is fixed. Mr. Morrow stated the net revenue available for transfer to the General Fund this
quarter reflects the $8.5 million figure before debt service. Further, Mr. Morrow stated the net
revenue number is up because the general revenue is up and generally speaking the first quarter
numbers will run higher than later quarters.
In response to Mayor Hansen, Mr. Morrow stated the drought will not affect the City's portfolio too
greatly as hydro is a small portion of the City's entire portfolio; although, the relevant costs for
hydro will likely go up.
In response to Council Member Hitchcock, Mr. Morrow stated the fact that Roseville chose to
break away from NCPA does not affect it too much with respect to hydro as it is based on how
much hydro is in the portfolio.
In response to Council Member Mounce, Mr. Morrow stated other agencies' GOR is generally
going down as well as most participants are reducing the GOR. Mr. Morrow stated other agencies
are vested in GOR with solar projects and the Lodi Energy Center based on their respective
vesting percentages and there is no specific amount requirements for a GOR.
In response to Council Member Johnson, Mr. Morrow stated that, with a total cash amount of
approximately $16 million now, the utility is in good shape.
In response to Mayor Hansen, Mr. Morrow stated that, while they do not anticipate any large
purchases, the Risk Oversight Committee is looking at options including those related to the 20%
open position for next year.
In response to Council Member Mounce, Mr. Morrow stated staff will be coming back to Council
within the next few weeks with revised and more up to date information.
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D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:17 a.m.
ATTEST:
Randi Johl
City Clerk
3A
Ah CITY OF LODI
COUNCIL COMMUNICATION
M
AGENDA TITLE: First Quarter Fiscal Year 08/09 VYater, VYastewater and Electric Utility
Department Financial Reports
MEETING DATE: February3,2009
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive utility financial reports for the first quarter of
fiscal year 2008/09.
BACKGROUND INFORMATION: In accordance with the Lodi Municipal Code, quarterly
financial reports are to be prepared for the Water,
Wastewater, and Electric Utilities. Highlights of the operations and financial performance of
each utility will be presented at the meeting of February 3, 2009.
Attached are the graphics and illustrations that will be presented and discussed.
FISCAL IMPACT: None directly related to the preparation of the report. However, the
presentation is intended to keep the Council apprised of the financial
conditions of the major municipal utilities.
Jordan Ayers
Deputy City Manager
APPROVED: "`-)
BIa1FCIt City Manager
Public Works Department
Water/Wastewater
Quarterly Update
FY 08/09 1ST Quarter
Shirtsleeve
Wastewater
Operating Results
(Ending September 30, 2008)
Personnel
2,951,436
701,399
24%
Supplies, Materials, Services
1,643,264
180,039
11%
Equipment, Land, Structures
114,100
4,676
4%
Other Payments
179,212
114,056
64%
Communication & Transportation
819,210
178,505
22%
Work for Others
43,960
0
0%
Total Operating Expenses
5,751,182
1,178,675
20%
Wastewater Fund
Cash Flow Summary
Operations
(Ending September 30, 2008)
M
Sales
I
1,601,102
Other (interest, rent, septic, misc.)
428,267
l Revenues
i
Operating
2,029,369
1,178,675
Debt Service
(28,870)
Cost of Services Payment To General Fund
362,870
Total Expenses
1,512,675
Net Increase in Undesignated Reserves
516,694
Wastewater Funds
Cash Balances
(Ending September 30, 2008)
Operating (170)
(7,703,535)
Utility Capital / Infrastructure Replacement (171)
15,062,476
Capital Reserve (172)
(9,053,836)
(Fund used to pay White Slough COP Debt Service)
Capital Reserve Restricted Assets (172)
97077,693
(White Slough COP Remaining Proceeds)
IMF (173)
9,193,944
Total
16, 576, 742
Water
Operating Results
(Ending September 30, 2008)
M
Personnel
11259,632
325,823
0
26016
Supplies, Materials, Services
638,190
173,846
27%
Equipment, Land, Structures
3,500
0
0%
Other Payments
11267,750
600,000
47%
Communication & Transportation
882,340
213,980
24%
Work for Others
360,000
0
0%
Total Operating Expenses
4,411,412
1,313,649
30%
Water Fund
Cash Flow Summary
Operations
(Ending September 30, 2008)
Sales
1,777,057
Other (interest, rent, misc.)
31,021
inTotal Revenues
Operating
1,808,078
1,313,649
Debt Service
14,957
Cost of Services Payment To General Fund
265,031
Total Expenses
1,593,637
Net Increase in Undesignated Reserves
2141441
Water Funds
Cash Balances
(Ending September 30, 2008)
M
Operating (180)
I
(7,376,656)
Utility Capital / Infrastructure Replacement (181)
10,600,434
IMF (182)
(31,825)
PCE/TCE Settlements
17,0107474
PCE/TCE Rates (185)
577787777
Total
25, 981, 204
Water / Wastewater Utility
Accomplishments
• WSWPCF Phase 3 Upgrades
• Waste Discharge Requirements (WDR's)
• Water Valve Turning Program
• Water Meter Retrofit Program
• Industrial Waste Pipeline Video Assessment
• DBCP Treatment System Carbon Change -out
and Vessel Repairs
Questions???
Electric Utility Department
FY09 Quarterly Update
(Through September 30, 2008)
City Council Shirtsleeve Session
February 3, 2009
n �QOverview
• Non -Power Costs down $200K
• Power Costs up ~$2.2M
• Revenues up about $300K
• NCPA "GOR" down $698K
• Overall increase in cash is about $4.5M
,Q09 Budget vs. Q1 Actual
Cash Flow
Sales Revenues
73,2525805
2359105937
32.6%
Other Revenues
955,000
2789234
29.1%
Total Revenues
Purchase Power
7492079805
4696979976
2491899171
1391359873
32.6%
28.1%
Non Power
1294229535
29522,317
20.3%
Total Expenses
59,120,511
151658,190
26.5%
Net Revenue for Debt Service
15,087,294
8,530,981
56.5%
Debt Service
693399831
15584,958
25.0%
Net Revenue
817471463
6,946,024
79.4%
In -lieu Transfer to General Fund
61879,414
1,719,854
25.0%
Net Increase (Decrease) in Working Capital
1,868,049
5,226,170
279.8%
Changes in GOR
Ending Cash Balance
1392079673
(6979985)
151,8679809
Lodi Energy Center
Electric
Expenses by Series
Personnel
6,317,083
1 302 919
21%
Supplies, Materials, Services
1,690,402
298,001
18%
Equipment, Land Structures
899,100
110,350
12%
Other Payments
431,597
70,569
16%
Communication & Transportation
69,891
14,663
21%
Total Operating Expenses
9,4089073
1,796,503
19.1%
Note: Includes Capital Expenditures
in Other Payments
F <0
00
0
Q1 Power Supply
Generation
$
9,557,126
$
12,798,592
$
3,241,466
33.9Hl-
Transmission
$
1,846,776
$
1,781,146
$
65,630
-3.6
Management Services
$
552,159
$
562,368
$
10,209
1.8%
Third Party Revenue
$
1,063,399
$
2,006,233
$
942,834
88.7%
IF TOTAL
$
10,892,662
$
13,135,873
$
21243,211
20.6%
Sales
Q1 Billing Statistics
Residential
50,412,063
$
9,670,617
$
0.1918
Small Commercial
51,365,778
$
9,251,451
$
0.1801
Large Commercial/Small Industrial
10,367,710
$
1,684,134
$
0.1624
Industrial
26,932,890
$
3,051,605
$
0.1133
TOTAL
1393078,441
$
23,6571807
$
0.1701
Residential
50,127,906
$
9,774,089
$
0.1950
Small Commercial
51,076,245
$
9,350,438
$
0.1831
Large Commercial/Small Industrial
10,309,271
$
1,702,154
$
0.1651
Industrial
26,781,078
$
3,084,256
$
0.1152
TOTAL
1383294,500
$
23,9101937
$
0.1729
ECA
im
Residential
832,498
Small Commercial
8339776
Large Commercial/Small Industrial
1769414
Industrial
4499032
Total ECA Revenue
21291,7211
99
n �QNCPA GOR
• General Operating Reserve
• Provides funding for contingencies
• GOR levels
➢$6,959,239 (June 30, 2008)
➢$6,261,254 (September 30, 2008)
• Geothermal Solar Project ($477K)
• Lodi Energy Center ($265K)
$697,985 Decrease
QFY09 "Open Position"
q<�FOR�
-
50,349
0.0%
-
32,631
0.0%
-
17,718
0.0%
-
50,833
0.0%
-
32,735
0.0%
-
18,099
0.0%
-
42,198
0.0%
-
27,096
0.0%
-
15,102
0.0%
2,183
38,554
5.7%
1,433
25,226
5.7%
749
13,328
5.6%
781
35,835
2.2%
547
21,857
2.5%1
234
13,979
1.7%
1,671
38,210
4.4%
685
24,311
2.8%
985
13,899
7.1%
1,266
38,403
3.3%
509
24,311
2.1%
757
14,092
5.4%
2,052
33,447
6.1%
2,157
21,612
10.0%
104
11,835
-0.9%
11,680
36,080
32.4%
10,815
22,918
47.2%
864
13,163
6.6%
5,337
36,489
14.6%
5,266
23,778
22.1%1
71
12,711
0.6%
4,354
39,431
11.0%
3,900
24,509
15.9%
454
14,922
3.0%
2,499
43,776
5.706
2,497
29,430
8.5%
2
14,346
0.0%
FY Total 1 31,823
483,606
6.6%
27,810
310,412
9.00/.
4,013
173,194
2.3%
Bal Yr Total r 31,823r
340,226
9.4% r
27,810r
217,951
12.8%
4,013
122,276
3.3%
n �Q
'9<�FSummary
0 "
• Non -Power Costs down $200K
• Power Costs up ~$2.2M
• Revenues up about $300K
• NCPA "GOR" down $698K
• Overall increase in cash is about $4.5M