HomeMy WebLinkAboutMinutes - December 1, 2009 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, DECEMBER 1, 2009
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, December 1, 2009, commencing at 7:00 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
B. Topic(s)
B-1 First Quarter Fiscal Year 2009/10 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
City Manager King provided a brief introduction to the subject matter of the utility quarterly
reports.
Water Services Manager Charlie Swimley provided a PowerPoint presentation regarding the
Public Works Water/Wastewater Fiscal Year 2010 quarterly update. Specific topics of discussion
for water and wastewater utilities included operating results, cash flow summary, cash balances,
and utility accomplishments.
In response to Council Member Hitchcock, Mr. Swimley stated the $2 million figure that has not
been expended is related mostly to materials and some professional services.
In response to Mayor Hansen, Mr. Swimley stated he anticipates the biosolid efforts will be done
during the next cycle, Central Valley Clean Water Association (CVCWA) is challenging the State
Board decision, litigation is in its early stages, and settlement may still be possible. Mr. Swimley
stated the City is not an individual party to the lawsuit but rather a part of the CVCWA group and
will continue to operate under the existing permit in the interim.
In response to Council Member Mounce, Mr. Swimley stated the first infrastructure project will
happen next year and every other year thereafter per City Council policy. Mr. King stated
infrastructure Project No. 4 was accepted by the City Council at the last meeting.
In response to Council Member Johnson, Mr. Swimley stated there are currently six granular
activated carbon treatment systems in service and they should last four to five years.
In response to Mayor Hansen, Mr. Sandelin stated water impact mitigation funds are used
to construct oversize mains and new wells, they are collected with new homes and building
construction, and $252 was collected last year due to the industry slow down.
In response to Council Member Hitchcock, Mr. Sandelin stated the PCE/TCE operating expenses
include installing equipment and facilities. Mr. Sandelin stated the expenses are all related to
clean-up efforts.
In response to Council Member Mounce, Mr. Sandelin confirmed that the $1 million related
to wastewater treatment is being tracked through Council Communications and on the books.
Continued December 1, 2009
In response to Council Member Hitchcock, Mr. Sandelin confirmed that the property owners near
Flag City were notified that they were exceeding salinity levels and the enforcement ordinance is
being applied.
In response to Mayor Hansen, Mr. Sandelin stated nitrogen cannot exceed the 425 figure per
acre. Mr. King stated that, if the City did not have land application, there would be increased
treatment efforts, and the City currently collects 20% of the gross product as the lease amount.
Interim Electric Utility Director Ken Weisel provided a PowerPoint presentation regarding the
Electric Utility Fiscal Year 2010 quarterly update. Specific topics of discussion included an
overview, financial results, operating expenditures, power supply, power sales, billing statistics,
Energy Cost Adjustment (ECA) revenue, Northern California Power Agency (NCPA) general
operating reserve, 'open position," and reserve policy.
In response to Council Member Hitchcock, Mr. Weisel stated the $4.6 million figure represents a
little more than one quarter of the year.
In response to Council Member Mounce, Mr. Weisel stated in the low load year nothing happens
with the transmission system and when the regular load returns it places greater stress on the
transmission.
In response to Council Member Hitchcock, Mr. Weisel and Deputy City Manager Jordan Ayers
confirmed the sales projection on the billing statistics are for the quarter, and in terms of revenue,
all areas are a bit lower due to the weather, economy, and conservation.
In response to Council Member Mounce, Mr. Weisel confirmed that the ECA is lower than
projected.
In response to Council Member Hitchcock, Mr. Weisel and Mr. Ayers stated the total number of
customers remain similar and additional information could be provided broken out by customer
class and business usage.
In response to Mayor Hansen, Mr. Weisel stated he is not sure if there is an additional power
purchase needed this year because there is a small open position and there is diversity in the
portfolio.
In response to Council Member Johnson, Mr. King stated the municipal insurance bond business
is pretty much gone, there is an expectation that public agencies should have two ratings,
Standard & Poors rates the City at an A-, Fitch rates the City at a BBB+, Moodys ratings are tied
in with NCPA refinancing, and ratings are based on days cash at hand.
In response to Mayor Pro Tempore Katzakian, Mr. King stated the ratings factor in for borrowing,
power acquisition, and credit references for longer-term purchases.
In response to Mayor Pro Tempore Katzakian, Mr. Weisel confirmed that the policy for the open
position is a maximum of 10% for the current year, 25% for the next year, and 50% for the third
year.
In response to Council Member Johnson, Mr. King stated Moodys will look at the NCPA pool
aggregately and the City is a part of that pool.
In response to Council Member Hitchcock, Mr. King confirmed that the ratings agencies look at
an actively engaged City Council, the core group of qualified staff, and collective capability as a
N
Continued December 1, 2009
group when considering ratings.
In response to Mayor Hansen, Mr. King confirmed a formula was used for what the current
reserve policy should be and approximately $17 million is available in case of an emergency or
catastrophic event.
City Council briefly discussed the current reserve policy, the need to review the current policy and
make adjustments, and the possible reasons to increase or decrease the reserve amount.
In response to an inquiry from Myrna Wetzel, Mr. Sandelin stated there is no connection to the
Woodbridge Irrigation District water.
In response to an inquiry by Myrna Wetzel, Mr. King stated the terms by which Lodi Electric Utility
is referred to may vary some but they refer to the same entity.
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:06 a.m.
ATTEST:
Randi Johl
City Clerk
AGENDA ITEM %*# I
CITY OF LODI
%V COUNCIL COMMUNICATION
TM
AGENDA TITLE: First Quarter Fiscal Year 2009110 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: December 1,2009
PREPARED B Y Deputy City Manager
RECOMMENDED ACTION: Receive utility financial reports for the first quarter of
Fiscal Year 2009110 ending September 30.
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 December 1, 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.
Jord n Ayers
Deputy City Manage;
APPROVED:
BI ' in City Manager
� t 4Public Works Department
Water/Wastewater
IFY 10 Quarterly Update
(Through September 30, 2009)
City Council Shirtsleeve Session
December 1, 2009
Wastewater
Operating Results
(Ending September 30, 2009)
Personnel
2,842,298
590,047
21%
Supplies, Materials, Services
2,198,728
201,600
9%
Equipment, Land, Structures
49,082
11,009
22%
Other Payments
172,357
100,770
56%
Communication & Transportation
925,550
225,530
24%
Work for Others
43,700
0
0%
Total Operating Expenses
6,231,715
11128,956
18%
Wastewater Fund
Cash Flow Summary
Operations
(Ending September 30, 2009)
M
Sales
I
2,413,819
Other (interest, rent, septic, misc.)
102,413
Total Revenues
Operating
2,516,232
1,128,956
Debt Service
(36,438)
Cost of Services Payment To General Fund
362,870
Total Expenses
1,455,388
Net Increase in Undesignated Reserves
1,060,844
Wastewater Funds
Cash Balances
(Ending September 30, 2009)
Operating (170)
37039,215
Utility Capital / Infrastructure Replacement (171)
41140,953
Capital Reserve (172)
(Fund used to pay White Slough COP Debt Service)
(3,669,892)
Capital Reserve Restricted Assets (172)
57545,869
(White Slough COP Remaining Proceeds)
IMF (173)
2,064,838
Total
11,1201983
Water
Operating Results
(Ending September 30, 2009)
Personnel
1,307,549
287,499
22%
Supplies, Materials, Services
737,011
108,317
15%
Equipment, Land, Structures
4,000
1,583
40%
Other Payments
1,464,250
615,239
42%
Communication & Transportation
917,040
264,495
29%
Work for Others
345,000
0
0%
Total Operating Expenses
4,774,850
11277133
27%
Water Fund
Cash Flow Summary
Operations
(Ending September 30, 2009)
Sales
117917275
Other (interest, rent, misc.)
32,135
inTotal Revenues
Operating
1,823,410
112771133
Debt Service
13,547
Cost of Services Payment To General Fund
265,031
Total Expenses
1,555,711
Net Increase in Undesignated Reserves
267,699
Water Funds
Cash Balances
(Ending September 30, 2009)
M
Operating (180)
I
21359,399
Utility Capital / Infrastructure Replacement (181)
12,362,015
IMF (182)
(4645830)
PCE/TCE Settlements
145301,792
PCE/TCE Rates (185)
115197409
Total
30,077,785
Water / Wastewater Utility
Accomplishments
Operational
■ Water Distribution
■ Water Production
■ Collection System
■ Wastewater Treatment
• Regulatory
• SSo's
■ Discharge Violations
■ Monitoring and Reporting
Questions???
Electric Utility Department
FY10 Quarterly Update
(Through September 30, 2009)
City Council Shirtsleeve Session
December 1, 2009
Overview
Net Power Costs up -- $370K from budget
• Non -power Costs down ~$1.6M
• Revenues down about $2.3M
• NCPA Cash Reserve (GOR) up 1 0K
•
FY1 0 power supply is 92% hedged
2
C0
n �P
9�rFOs
FY10 Financial Results
Quarter Ending September 30, 2009
Cash Flow
Revenue
Projected
Actuals
Sales Revenues
23,393,727
21,3861510
Other Revenues
295,435
11163
Total Revenues
2356895162
21,387,673
Expenses
Purchase Power
1055455899
10,9131687
Non Power
4,61405
20931300
Total Expenses
15,160564
13006087
Net Revenue for Debt Service
8528598
7,480,686
Debt Service
1,7925316
1,7921316
Net Revenue
6,736,282
5081370
In -lieu Transfer to General Fund
1,744,168
1,744,168
Net Increase (Decrease)
499929114
399449202
Beginning Balance
1290039103
1290039103
GOR
599049783
599149946
Ending Balance
2299009000
2198629251
3
Operat'ing Expenditures
C,
L FoP
Personnel
6,214,474
1,345,807
22%
Supplies, Materials, Services
2,070,264
423,718
20%
Equipment, Land, Structures
939,029
124,247
13%
Other Payments
1,143,849
93,944
8%
Communication & Transportation
68,750
15,803
23%
Total Operating Expenses
10,436,366
1 2,003,519
19.2%
4
C0
n �P
9�rFOs
Power Supply
Generation
$
9,137,116
$
8,896,507
$
240,609
-2.7%
Transmission
$
1759,941
$
2,011,563
$
251,622
12.5%
Management Services
$
504,318
$
504,318
$
-
0.0%
Third Party Revenue
$
855,476
$
498,701
$
356,775
-71.5%
Adjustments
TOTAL
$
101545,899
$
10,913,687
$
367,788
3.40:/:6
5
C0
n �P
9�rFOs
Power Sales
0
Billing Statistics
Residential
46,419,289
$
9,746,045
$
0.2100
Small Commercial
49,360,860
$
9,030,265
$
0.1829
Large Commercial/Small Industrial
10,349,910
$
1,823,717
$
0.1762
Industrial
28,049,707
$
2,793,700
$
0.0996
TOTAL
134,1799766
$
23,393,727
$
0.1743
Residential
48,750,851
$
8,909,820
$
0.1828
Small Commercial
47,341,799
$
8,255,454
$
0.1744
Large Commercial/Small Industrial
10,716,617
$
1,667,240
$
0.1556
Industrial
24,6411603
$
2,553,996
$
0.1036
TOTAL
131,4507870
$
21,386,510 1
$
0.1627
7
ECA Revenue
Residential
$ 295,418
Small Commercial
280,296
Large Commercial/Small Industrial
64,863
Industrial
147,550
Total ECA Revenue
j $ 788,127
0
NCPA "GOR"
GOR levels
➢$5,904,783 (June 30, 2009)
➢$5,914,946 (Sept 30, 2009)
—Interest income of $10,163
$10,163 Increase
0
FY1
�,q `p 1 "Open Position"
�r froR�
10
48,176
0.00%
31586
0.00%
16590
0.00%
48,722
0.00%
31910
0.00%
16812
0.00%
43,019
0.00%
27556
0.00%
15463
0.00%
37,393
0.00%
24526
0.00%
12867
0.00%
34,170
0.00%
20,979
0.00%
13,191
0.00%
(5,862)
36,792
-15.93%
(3,362)
23,342
-14.40%
(2,499)
13,450
-18.58%
(5,245)
36,569
-14.34%
(3,028)
22,356
-13.54%
(2,217)
14,213
-15.60%
(3,092)
32,505
-9.51%
(1,952)
21,011
-9.29%
(1,140)
11,494
-9.92%
(1,495)
34,971
-4.27%
(988)
23,058
-4.28%
(507)
11,913
-4.26%
(2,283)
34,561
-6.60%
(3,307)
22,453
-14.73%
1,025
12,108
8.46%
(1,311)
37,831
-3.47%
(1,963)
23,554
-8.33%
652
14,277
4.57%
(3,011)
42,840
-7.03%
(2,780)
28,592
-9.72%
(231)
14,248
-1.62%
FY Total (22,298)
467,549
-4.8%
(17,380)
300,923
-5.8%
(4,918)
166,626
-3.0%
Bal Yr Total (22,298)l
256,069
-8.7%
(17,380)1
164,366
-10.6%
(4,918)1
91,703
10
P 1
i Reserve o icy
'9�►Fo�g
• June 30, 2009 reserve balance is $17.9 million
— Initial target was $12.9 million by FY 2010
• Initial reserve formula
— Operating reserve of 45 days of budgeted operating costs
— Capital reserve equals largest local contingency
(substation)
— Rate stabilization reserve equals 20% of projected market
power costs
• Review every three years for new targets
11