HomeMy WebLinkAboutMinutes - December 7, 2010 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, DECEMBER 7, 2010
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, December 7, 2010, commencing at 7:00 a.m.
Present: Council Member Hansen, Council Member Katzakian, Council Member Nakanishi,
Mayor Pro Tempore Mounce, and Mayor Johnson
Absent: None
Also Present: City Manager Bartlam, City Attorney Schwabauer, and City Clerk Johl
B. Topic(s)
B-1 First Quarter Fiscal Year 2010/11 Water, Wastewater and Electric Utility Department
Financial Reports (CM)
City Manager Bartlam provided a brief introduction to the subject matter of the utility financial
reports.
Deputy Public Works Director Charlie Swimley provided a PowerPoint presentation regarding the
water and wastewater first quarter utility update. Specific topics of discussion included water and
wastewater cash flow summary for operations, operating results, cash balances, and
accomplishments.
In response to Mayor Johnson, Mr. Bartlam stated the energy costs are not the only costs in the
communication and transportation line item budget wide and there could be some consideration
to separate that out.
In response to Council Member Hansen, Mr. Bartlam stated the proposed wind turbine could
have an impact on energy costs although he is not sure about the time frame for the project.
In response to Council Member Hansen, Mr. Swimley stated staff will ask the Council to award
the dewatering contract on December 15, which will encumber $5 million.
In response to Council Member Hansen, Mr. Swimley stated the life expectancy for pipes at
White Slough is approximately 20 years.
In response to Council Member Nakanishi, Deputy City Manager Jordan Ayers stated the debt
service amount for the utility is approximately $4 million.
In response to Council Member Nakanishi, Mr. Swimley stated the 7% decrease in wastewater is
likely the result of the economy.
In response to Council Member Hansen, Mr. Swimley stated that, with respect to the status of the
permit, it is an ongoing process for the five-year permit with some permit cycles being more
aggressive than others. Mr. Swimley stated staff is winding down on the reports for the old permit
and getting ready for the new permit reporting, which is due in late 2011.
In response to Myrna Wetzel, Mr. Swimley stated the service water rules require certain levels of
chlorine in the system on an ongoing basis and some residents may smell or taste the chlorine
Continued December 7, 2010
based on their sensitivity but it is very rare.
Electric Utility Director Liz Kirkley provided a PowerPoint presentation regarding the first quarter
electric utility update. Specific topics of discussion included an overview, financial results,
operating expenditures, power supply, power sales, billing statistics, Energy Cost Adjustment
revenue, Northern California Power Agency (NCPA) general operating reserve (GOR), open
position, local resource adequacy capacity, and conclusion.
In response to Mayor Johnson, Ms. Kirkley stated the biggest employee vacancy concern has
been taken care of with the filling of the principal resource manager position. Ms. Kirkley stated
there is still some difficulty in filling the electric technician position because the demand is higher
than the supply of qualified candidates.
In response to Mayor Johnson, Ms. Kirkley stated the loads are down generally throughout the
various utilities and not just Lodi.
Council Member Nakanishi requested range numbers for loads and demands for the past five
years as well as the rate comparisons with other utilities.
In response to Council Member Nakanishi, Ms. Kirkley stated the NCPA GOR number reflects
only Lodi and not the entire NCPA pool.
In response to Mayor Johnson and Mayor Pro Tempore Mounce, Ms. Kirkley stated the utility
always looks at the best possible prices for purchases from other utilities and Lodi itself does not
sell because it does not have an extra supply. She stated she was not sure of who the utility
purchased from last year.
In response to Council Member Nakanishi, City Attorney Schwabauer stated Electric Utility has
always purchased natural gas through NCPA; although, previous Electric Utility Director Alan
Vallow did want to procure it directly, which the Council declined. Ms. Kirkley stated there may be
some changes with the new Lodi Energy Center coming on line with procurement as well.
B-2 Revised Electric Reserve Fund Policv (EUD
Electric Utility Director Liz Kirkley provided a PowerPoint presentation regarding the electric
reserve fund. Specific topics of discussion included background, initial target adopted by Council,
reserve policy, reserve status, updating initial target, Northern California Power Agency (NCPA)
member survey, and the new reserve recommendation.
In response to Mayor Pro Tempore Mounce, Deputy City Manager Jordan Ayers stated the
matter was brought before the Budget and Finance Committee, there was no quorum, and some
comments were received through a workshop format.
In response to Mayor Johnson, Mr. Ayers stated the current ratings are a B+++ from Fitch, an A
from Moody's, and an A- from Standard and Poors.
In response to Council Member Nakanishi, Mr. Ayers and City Manager Bartlam explained that
the exact effect of the ratings is unknown until the next borrowing with respect to interest rates
and overall benefit.
In response to Mayor Pro Tempore Mounce, Mr. Ayers stated the next borrowing will likely not
occur for another few years.
In response to Mayor Pro Tempore Mounce, Mr. Bartlam stated rating agencies take into account
N
Continued December 7, 2010
not only the reserve amount for the utility but also the NCPA general operating reserve (GOR).
Mr. Schwabauer stated the ratings are also relevant when purchasing gas and power, which is
done three to four years out.
Mayor Pro Tempore Mounce requested the ratings for NCPA member survey agencies, including
Roseville.
In response to Mayor Johnson, Ms. Kirkley stated the master chart provided in the staff report
packet reflects GOR recommendations from NCPA. Mr. Ayers stated the current policy is 45 days
and the recommendation is 60 days.
In response to Council Member Katzakian, Ms. Kirkley stated at mid -year review staff will be
bringing forward for Council consideration options associated with increasing the cash days on
hand. Mr. Bartlam stated there may be ways to increase the amount by approximately $5 million
through savings, without rate increases, although there are no further reimbursements due on the
Lodi Energy Center.
A brief discussion ensued amongst the City Council, Mr. Bartlam, and Ms. Kirkley regarding
reserve amount versus cash days on hand, infrastructure replacement and maintenance, and
deferral of needed repairs.
C. Comments by Public on Non-Aaenda 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 % A
CITY OF LODI
%W COUNCIL COMMUNICATION
Im
AGENDA TITLE: First Quarter Fiscal Year 2010/11 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: December 7,2010
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive utility financial reports for the first quarter of Fiscal Year
2010/11 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 7, 2010.
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 cf the major municipal utilities.
FUNDING AVAILABLE: Not applicable.
APPROVED:
Jordan Ayers
Deputy City Manager
dt Bartlam, City Manager