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HomeMy WebLinkAboutMinutes - June 9, 2009 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, JUNE 9, 2009 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, June 9, 2009, commencing at 7:02 a.m. Present: Council Member Johnson, Council Member Mounce, and Mayor Hansen Absent: Council Member Hitchcock, and Mayor Pro Tempore Katzakian Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Johl B. Topic(s) B-1 Third Quarterly Fiscal Year 2008-09 Water. Wastewater. and Electric Utility Department Financial Reports (CM) City Manager King briefly introduced the subject matter of the third quarter fiscal year 2008-09 Water, Wastewater, and Electric Utility Department financial reports. Electric Utility Director George Morrow provided a PowerPoint presentation regarding the third quarter Electric Utility quarterly update. Specific topics of discussion included an overview, 2009 budget versus third quarter actuals, third quarter financial results, Electric expenses by series, third quarter power supply, third quarter sales, billing statistics, Energy Cost Adjustment (ECA) by customer class, Northern California Power Agency general operating reserve, open position, and quarter summary. In response to Council Member Johnson, Mr. Morrow stated the increase in debt service is due to the refinancing. In response to Mayor Hansen, Mr. Morrow stated the Utility may purchase some electricity over the next year but it will be a small amount. He stated the budgeted and actual numbers for purchases is different due to recent purchases and the corresponding price. In response to Council Member Mounce, Mr. Morrow stated for the slide on projected and actuals the 352 number should be positive and not negative. In response to Mayor Hansen, Mr. Morrow stated the department has tightened up on delinquencies through the collection and deposit policies and programs. Further, Mr. Morrow stated there has been an increase in the CARE and Public Benefits programs and there is a tendency for the money to be used up by the end of the year. In response to Council Member Johnson, Mr. King confirmed that the Pay Point subject matter will be brought to Council for consideration in the near future. Deputy City Manager Ayers stated there is a fairly large infrastructure behind the pay points, there is a 6 to 8 week development cycle once a contract is approved, and staff is in contact with the company working out details. In response to Myrna Wetzel, Mr. Ayers stated there is a surcharge through the processing company of approximately one dollar. Mr. King stated the pay points will offer one more choice for consumers. In response to Mayor Hansen, Mr. Morrow stated it may be time to reevaluate the Electric Utility reserve number by doing some analysis to determine the next level plateau needed to bring the Continued June 9, 2009 utility up to an A rating. Further, Mr. Morrow confirmed that the Utility will have an opportunity to get some reimbursement for the new Lodi Energy Center project. In response to Council Member Johnson, Mr. Morrow stated the Utility is currently at approximately 50 days cash on hand and the average is roughly 100 days; therefore, a $20 million reserve appears to be reasonable. In response to Mayor Hansen, Mr. Morrow stated the hope is that the Utility will be more competitive when the new Lodi Energy Center comes on-line for customers. He stated the reason that PG&E is lower in some tiers is because of the State's deregulation and related legislation. In response to Council Member Mounce, Mr. Morrow stated PG&E does not have an ECA but addresses the same matter through annual or semi-annual reviews of its total cost bundle. He stated in a 22 -month period, the ECA has given back twice. Water Services Manager Charlie Swimley provided a PowerPoint presentation regarding the water/waster quarterly update. Specific topics of discussion included wastewater operating results, cash flow summary for operations, wastewater fund cash balances, water operating results, water cash flow summary for operations, water fund cash balances, and water/wastewater accomplishments. In response to Mayor Hansen, Mr. King stated IMF stands for Impact Mitigation Fund. He further responded that he is not sure when the improvements for Fire Station 4 will be paid off because the cost recovery was related to development and indexing. In response to Council Member Mounce, Mr. Swimley stated there is significant costs related to the treatment plant upgrades, retaining water quality, and cleaning efforts. Mr. Swimley stated on average the filter class have a lifespan of five years and must be cleaned regularly through a highly labor-intensive process. In response to Mayor Hansen, Mr. Swimley stated Replacement Project No. 4 should be completed in approximately two months. In response to Mayor Hansen, Mr. Swimley confirmed that the State went back to 2001 again to enforce minimum mandatory penalty standards because there may have been some oversight previously. Mr. King stated there are some efforts being made at the State level to address this issue through legislation. Council Members Johnson and Mounce briefly provided general comments regarding the statute of limitations for the State to come back and financially address violations as even the Internal Revenue Service is limited to three years for tax audits. C. Comments by Public on Non -Agenda Items - None D. Adjournment No action was taken by the City Council. The meeting was adjourned at 7:53 a.m. ATTEST: Randi Johl City Clerk N AGENDA ITEM B-01 On% CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Third Quarter Fiscal Year 08/09 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: June 9,2009 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive utility financial reports for the third 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 June 9,2009. 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: '`1 Blair King,fy Manager Electric Utility Department FY09 Quarterly Update (Through March 31, 2009) City Council Shirtsleeve June 9, 2009 '9�►Overv'iew Fo�� • Power Costs in line with projections • Non -Power Costs down ~$800K • Revenues up about $2.5M • NCPA "GOR" down —$800K • Overall increase in cash is about $2.6M 2 C, �P q�09 Budget vs. Q3 Actua. rFo�� Cash Flow Revenue Budget Actuals % of Budget Sales Revenues 7352521805 1 58,9885399 1 80.5% Other Revenues 955,000 689,218 72.2% Total Revenues 742071805 59,6775617 80.4% Expenses Purchase Power 4656975976 37095724 79.4% Non Power 1254221535 857225369 70.2% Total Expenses 5991205511 45,8129093 77.5% Net Revenue for Debt Service 1510871294 1358655524 91.9% Debt Service 653395831 5,2985230 83.6% Net Revenue 817471463 855675294 97.9% In -lieu Transfer to General Fund 6,8795414 5,206,470 75.7% Net Increase (Decrease) in Working Capital 198689049 393609824 179.9% Beginning Cash Balance 1193399624 1193399624 Changes in GOR (LEC PMT) - (7969172) ,Ending Cash Balance 1392079673 1399049276 3 Q3 Financial Results Projected vs. Actual C ash Flow Revenue Pro je cte d Actuals Difference Sales Revenues 561337,439 58,9889399 4.7% Other Revenues 7161250 689218 -3.8% Total Revenues 57,0531689 59,677,617 4.6% Expenses Purchase Power 36,7991051 3709,724 0.8% Non Power 9,549,724 8,722,369 -8.7% Total Expenses 46,348,775 45,812,093 -1.2% Net Revenue for Debt Service 10,704,914 13059524 29.5% Debt Service 4,754,873 5,298,230 11.4% Net Revenue 5,9505041 81567294 44.0% In -lieu Transfer to General Fund 51206470 51206470 0.0% Net Increase (Decrease) in Working Capital 743,571 3,360,824 -352.0% Beginning Cash Balance 1193399624 1193399624 Changes in GOR - (796,172) ,Ending Cash Balance 1290839195 1399049276 4 Electric Expenses by Series Personnel 6,317,083 4,340,322 69% Su lies, Materials, Services 1,729,829 1,016,808 59% Equipment, Land, Structures 909,151 538,477 59% Other Pa Payments 440,196 293,650 67% Communication &Transportation 69,891 56,382 81 Total Operating Expenses 9,466,150 6,245,639 66.0% Note: Includes Capital Expenditures in Other Payments 5 Q3 Power Supply Generation $ 31,721,864 $ 35,320,798 $ 3,598,934 10.2% Transmission $ 5,447,131 $ 4,891,537 $ 555,594 -11.4% Management Services $ 1,656,477 $ 1,687,104 $ 30,627 1.8% Third Part Revenue $ 2,026,421 $ 4,809,715 $ 2,783,294 57.9% TOTAL $ 36,799,051 $ 37,089,724 $ 290,673 0.8% 0 Q3 Sales July 2008 0 0 380 390 August 2008 0 0 415 363 September 2008 0 5 266 247 October 2008 36 76 53 73 November 2008 276 348 0 0 December 2008 645 609 0 0 January 2009 563 592 0 0 February 2009 387 391 0 0 March 2009 333 313 0 0 Q3 Total 2240 1 2334 1 1114 1 1073 7 Q3 Billing Statistics Residential 122,117,192 $ 22,484,337 $ 0.1841 Small Commercial 129,855,708 $ 21,778,845 $ 0.1677 Large Commercial/Small Industrial 27,227,947 $ 4,053,844 $ 0.1489 Industrial 73,791,553 $ 8,020,413 $ 0.1087 TOTAL 35239923400 $ 5633373439 $ 0.1596 Residential 119,938,938 $ 23,542,443 $ 0.1963 Small Commercial 127,539,419 $ 22,803,752 $ 0.1788 Large Commercial/Small Industrial 26,742,271 $ 4,244,617 $ 0.1587 Industrial 72,475,303 $ 8,397,851 $ 0.1159 TOTAL 346,695,931 $ 58,988,663 $ 0.1701 0 q�rFv��ECA b Customer Clas Residential 832,498 725,150 11437,573 2,995,221 Small Commercial 833,776 746,906 11414,592 2,995,275 Large Commercial/Small Industrial 176,414 158,323 310,165 644,902 Industrial 449,032 438,014 874,562 1,761,608 Total ECA Revenue T 2,291,721 2,068,393 4,036,893 89397,006 0 C, qF1,P R)NCP G •'1►O • General Operating Reserve • Provides funding for contingencies • GOR levels )46,959,239 (June 30, 2008) ➢$6,163,067 (March 31, 2009) • Lodi Energy Center ($2.5M) $796,172 Decrease 10 "Open Position" FY09 C, �r froR� 11 - 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% - 38,554 0.0% - 25,226 0.0% - 13,328 0.0% - 35,835 0.0% - 21,857 0.0% - 13,979 0.0% - 38,210 0.0% - 24,311 0.0% - 13,899 0.0% 38,403 0.0% 24,311 0.0% 14,092 0.0% 33,447 0.0% 21,612 0.0% 11,835 0.0% 36,080 0.0% 22,918 0.0% 13,163 0.0% 3,416 36,489 9.4% 3,370 23,778 14.2% 45 12,711 0.4% 2,726 39,431 6.9% 2,474 24,509 10.1% 263 14,922 1.89%. 982 43,776 2.2% 897 29,430 3.0% 85 14,346 0.6% FY Total 7,124 483,606 1.5% 6,741 310,412 2.2% 393 173,194 0.2% Bal Yr Total 7,124 119,696 6.0% 6,741 77,717 8.7% 393 41,979 0.9% 11 • 3uQi rteSummary '9�►Fo�� • Power Costs in line with projections • Non -Power Costs down ~$800K • Revenues up about $2.5M • NCPA "GOR" down —$800K • Overall increase in cash is about $2.6M 12 � t 4 Public WorksDepartment Water/Wastewater IFY 09 Quarterly Update (Through March 31, 2009) City Council Shirtsleeve Session June 9, 2009 Wastewater Operating Results (Ending March 31, 2009) Personnel 3,068,836 21235,333 73% Supplies, Materials, Services 2,351,142 1,178,518 50% Equipment, Land, Structures 115,270 35,219 31% Other Payments 200,212 154,402 77% Communication & Transportation 819,210 629,845 77% Work for Others 43,960 0 0% Total Operating Expenses 6,598,630 41233,317 64% Wastewater Fund Cash Flow Summary Operations (Ending March 31, 2009) Sales 5,039,044 Other (interest, rent, septic, misc.) 807,994 Total Revenues Operating 5,847,038 4,233,317 Debt Service 1,932,841 Cost of Services Payment To General Fund 1,088,609 Total Expenses 7,2541767 Net Increase in Undesignated Reserves (1,407,729) Wastewater Funds Cash Balances (Ending March 31, 2009) Operating (170) (7,773,820) Utility Capital / Infrastructure Replacement (171) 16,059,235 Capital Reserve (172) (31038,878) (Fund used to pay White Slough COP Debt Service) Capital Reserve Restricted Assets (172) 67891,852 (White Slough COP Remaining Proceeds) IMF (173) 2,132, 566 Total 14,270,955 Water Operating Results (Ending March 31, 2009) Personnel 1,377,032 977,772 71016 Supplies, Materials, Services 933,512 388,051 42% Equipment, Land, Structures 3,500 4,431 127% Other Payments 1,267,750 947,939 75% Communication & Transportation 882,340 587,203 67% Work for Others 360,000 0 0% Total Operating Expenses 4,824,134 2,905,396 60% Water Fund Cash Flow Summary Operations (Ending March 31, 2009) Sales 4,824,238 Other (interest, rent, misc.) 127,647 inTotal Revenues Operating 4,951,885 2,905,396 Debt Service 43,320 Cost of Services Payment To General Fund 795,092 Total Expenses 3,743,808 Net Increase in Undesignated Reserves 17208,077 Water Funds Cash Balances (Ending March 31, 2009) M Operating (180) I 507,522 Utility Capital / Infrastructure Replacement (181) 11,185,288 IMF (182) (3587963) PCE/TCE Settlements 14,661,592 PCE/TCE Rates (185) 27255,511 Total 28,2507950 Water / Wastewater Utility Accomplishments • WW Treatment Plant Upgrade • Rate Study • Main Replacement Project No. 4 • Revised Draft State Board Order • WDR's — Capacity Assurance Plan — Draft FOG Ordinance — SSO Tracking — CMMS Implementation Questions???