HomeMy WebLinkAboutMinutes - March 22, 2011 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MARCH 22, 2011
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, March 22, 2011, commencing at 7:00 a.m.
Present: Council Member Hansen, Council Member Katzakian, and Mayor Johnson
Absent: Council Member Nakanishi, and Mayor Pro Tempore Mounce
Also Present: City Manager Bartlam, City Attorney Schwabauer, and Assistant City Clerk
Robison
B. Topic(s)
B-1 Second 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.
Electric Utility Director Liz Kirkley provided a PowerPoint presentation regarding the second
quarter electric utility update. Specific topics of discussion included an overview, financial results,
non -power operating expenditures, power supply, power sales, billing statistics, bad debt, Energy
Cost Adjustment (ECA) revenue, Northern California Power Agency (NCPA) general operating
reserve, open position, and conclusion.
In response to Mayor Johnson, Council Member Hansen stated that the initial projections from
the California Independent System Operator did not turn out to be as ominous as expected;
however, there is always the concern that something could negatively affect costs. City Manager
Bartlam pointed out that the City was able to purchase power at a lower cost than expected.
In response to Mayor Johnson, Mr. Ayers stated that the bad debts are primarily from residential
and commercial customers, as well as bankruptcies. In 2007, Council made a decision to cease
referring accounts to the credit bureau; however, that practice was resumed with accounts
typically being addressed on a quarterly basis, and in 2009, staff further tightened the collection
cycle, which has resulted in a reduction in the volume of accounts sent to collection.
In response to Myrna Wetzel, Mr. Ayers stated that the City offers low-income programs and staff
routinely refers customers to the Salvation Army for additional assistance in paying their utility bill.
The dollar figure for bad debt, however, represents closed accounts with a remaining balance
that staff has unsuccessfully been able to collect.
In response to Mayor Johnson regarding the City's open position, Ms. Kirkley stated that on a
daily basis NCPA is buying and selling power for the pool, it is prudent to have a diversified
portfolio and not have excess on hand, and the rule of thumb is a 10% closure for the upcoming
year.
Council Member Hansen added that once the new energy center is on line the City will be even
less vulnerable in the market and will have greater control.
In response to Myrna Wetzel, Mr. Ayers stated that the current ratings from the agencies are AA-
Continued March 22, 2011
from Standard and Poors and Fitch and AA from Moody's, which are up from BBB+ from two to
three years ago.
Mr. Bartlam stated that the April 5 budget workshop will further discuss the credit ratings and
various reserve policies.
Deputy Public Works Director Charlie Swimley provided a PowerPoint presentation regarding the
water and wastewater second quarter utility update. Specific topics of discussion included water
and wastewater cash flow summary for operations, operating results, cash balances, bad debt
write off, and accomplishments.
In response to Mayor Johnson, Mr. Swimley stated that the City is charging a premium to the
various wineries for wastewater capacity. Further, Mr. Swimley responded that the cost for
supplies is low this quarter due to the fact that the money has not yet been spent and some
consultant services will carry into the next fiscal year. The amount spent is consistent with the
same quarter from last year.
In response to Council Member Hansen, Mr. Swimley confirmed that the City currently pumps
water into the Woodbridge Irrigation District (WID) canal during storms and that it charges the
City a set rate one time a year. Parks near canals are available to provide storage during wet
water events, and the City does not have the capacity to pump water into the river, which would
also be quite costly. Mr. Swimley further responded that there is no current plan for stormwater
discharge; although, staff is looking at utilizing the WID water purchase to irrigate parks.
Mr. Bartlam stated that the City has begun to move from the combination park/basin to full-scale
retention basins that would hold water for longer periods and have some recharge capability.
In response to Council Member Katzakian, Mr. Swimley stated there may be an opportunity in the
future to use water at White Slough to pump back into town. Mr. Bartlam added that the two
power plants near White Slough are using treated water in an efficient way and there could be
further opportunities to use the water in that area.
In response to Myrna Wetzel, Mr. Swimley confirmed that the City is paying WID for the raw water
supply.
In response to Council Member Hansen, Mr. Bartlam stated there is no Council approved reserve
policy for wastewater, but the rule is 25%.
Mayor Johnson suggested that a formal policy be adopted, to which Mr. Bartlam replied that staff
is heading in that direction.
In response to Council Member Hansen, City Attorney Schwabauer stated that only the Central
Plume has been completed and there is still further work needed on the Northern, Southern, and
Central -Western Plumes, but he was hopeful the costs would not be dollar intensive. In regard to
Busy Bee, 85% to 90% of the work has been completed to satisfaction of the State Board.
In response to Mayor Johnson, Mr. Ayers stated that the PCE/TCE monies are set aside in stand-
alone accounts and are earning 55 basis points, the bulk of the accounts are held with the Local
Agency Investment Fund (LAIF) and earning 44 basis points, and the monies are safe and
secure. Staff has not looked at outside investments other than LAI F. Mayor Johnson suggested
that staff look into ways to be more aggressive while the cash is sitting in these accounts.
Mr. Ayers replied that staff could look into carving out a portion of the money and investing it with
an outside investor, and Mr. Bartlam added that staff has been discussing this possibility and he
would bring the matter back at a Shirtsleeve Session in May in conjunction with budget
N
Continued March 22, 2011
discussions.
In response to Myrna Wetzel, Mr. Schwabauer stated that profits on investments would stay
within the same fund from which the money came.
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:
Jennifer M. Robison
Assistant City Clerk
AGENDA ITEM 49 0*1
CITY OF LODI
COUNCIL COMMUNICATION
• TM
AGENDA TITLE: Second Quarter Fiscal Year 2010/11 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: March 22, 2011
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive utility financial reports for the second quarter of
fiscal year 2010/11 ending December 31, 2010.
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 March 22, 2011.
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.
APPROVED:
Jord n Ayers
Deputy City Manager
Konradt Bartlam, City Manager
Electric Utility Department
FY1 1 Quarterly Update
(Through December 30, 2010)
City Council Shirtsleeve Session
March 22, 2011
1
Overview
Through December 31, 2010
• Net power costs are 45.3% of budget
• Non -power costs are 41.5% of budget
• Debt Service costs are 50.0% of budget
• Revenues are 48.1 % of budget
• One time revenue from sale of CT1 (Roseville)
FY1 1 Financial Results
Through December 31, 2010
Sales Revenues
72,019,230
33,884,583
47.0%
Other Revenues
503,880
995,395
197.5%
Total Revenues
Purchased Power
72,523,110
43,205,800
34,879,978
19,570,949
48.1%
45.3%
Non Power
14,650,840
6,086,128
41.5%
Total Expenses
57,856,640
25,657,077
44.3%
Net Revenue for Debt Service
14,666,470
9,222,901
62.9%
Debt Service
7,364,772
3,682,386
50.0%
Capital Expenditures
3,771,680
852,635
22.6%
Net Revenue
3,530,018
4,687,880
132.8%
In -lieu Transfer to General Fund
6,976,670
3,488,336
50.0%
Net Increase (Decrease)
(3,446,652)
1,199,544
Jun 30, 2010
Dec 31, 2010
GOR 1 119011,668 1 10,8319971
Total Available Cash 1 $ 23,137,504 1 $ 21,832,567
3
Non -Power Operating
Expenditures
Through December 31, 2010
M
Personnel
6,683,070
2,896,259
I
43.3%
Supplies, Materials, Services
272417730
696,470
31.1%
Equipment, Land, Structures
1,5977600
235,188
14.7%
Other Payments
172017110
795,684
66.2%
Communication & Transportation
70,940
34,332
48.4%
Cost of Service Transfer
2,856,390
1,428,195
50.0%
Total Operating Expenses
$ 14,650,840
1 $ 6,0861128
1 41.5%
Cl
Power Supply
Through December 31, 2010
Generation
$
35,7277071
$
16,809,273
47.0%
Transmission
$
7789578
$
31007,804
38.6%
Management Services
$
114017170
$
696,862
49.7%
Third Party Revenue
$
2,708,341
$
2,082,976
76.9%
Adjustments
$
111397986
TOTAL
$
42,209,478
$
19,5709949
46.4%
5
Power Sales
Through December 31, 2010
July
2010
0
0
313
390
August
2010
0
0
245
363
September
2010
0
5
216
247
October
2010
94
76
1
0
November
2010
392
348
0
0
December
2010
457
609
0
0
FY11 Total
943
1038
775
1000
0
Billing Statistics
Through December 31, 2010
Residential
151,352,637
$
2890103849
$
0.1851
Small Commercial
165,198,278
$
28,1881450
$
0.1706
Large Commercial/Small Industrial
3532903459
$
532443767
$
0.1486
Industrial
9338983999
$
1035753165
$
0.1126
TOTAL 1
445,740,3731
$
723019,230
1 $
0.1616
Residential
7894019899
$
1391079191
$
0.1672
Small Commercial
8098049858
$
13,152,428
$
0.1628
Large Commercial/Small Industrial
19,983,388
$
298809014
$
0.1441
Industrial
479541,887
$
49744,949
$
0.0998
TOTAL
226, 732, 032
$
33, 884, 583
1 $
0.1494
7
Bad Debt
Through December 31, 2010
0
ECA Revenue
Residential
(172,664)
319,326
146,662
Small Commercial
(158,469)
294,776
136,307
Large Commercial/Small Industrial
(46,377)
72,968
26,591
Industrial
(116,875)
187,946
71,071
Total ECA Revenue
(494,385)
875,016
380,631
9
NCPA "GOR"
GOR levels
➢$11,011,688 (June 30, 2010)
➢$10,831,971 (December 31, 2010)
Scheduling Coordination Balancing Acct $(202,453)
Interest Income $22,756
$179,717 Decrease
10
FY1 1 "Open Position"
11
44,273
0.00%
29,082
0.00%
15,727
0.00%
43,634
0.00%
28,638
0.00%
15,754
0.00%
40,620
0.00%
26,044
0.00%
15,358
0.00%
36,811
0.00%
23,334
0.00%
12,431
0.00%
28,838
0.00%
18,312
0.00%10,526
0.00%
36,135
0.00%
22,929
0.00%
13,206
0.00%
35,983
0.00%
22,041
0.00%
13,942
0.00%
32,171
0.00%
20,801
0.00%
11,370
0.00%
(2,443)
34,814
-7.02%
(1,418)
22,949
-6.18%
(1,024)
11,865
-8.63%
(4,145)
35,625
-11.64%
(4,315)
23,098
-18.68%
169
12,527
1.35%
(2,808)
40,089
-7.01%
(2,833)
25,043
-11.31%
25
15,045
0.16%
1,333
41,000
0/10
359
27,4041
1.31%
974
13,596
7.16%
FY Total (8,063)1
449,992
-1.8°°
(8,207)
289,675
-2.8%
143
161,349
0.1%
Bal Yr Total (8,063)
151,528
-5.3%
(8,207)
98,494
-8.3%
143
1 53,033
0.3%
11
Conclusiori
Through December 31, 2010
• Net power costs are 45.3% of budget
• Non -power costs are 41.5% of budget
• Debt Service costs are 50.0% of budget
• Revenues are 48.1 % of budget
• One time revenue from sale of CT1 (Roseville)
12
op Public Works Department
Water/Wastewater
IFY 11 Quarterly Update
(Through December 31, 2010)
City Council Shirtsleeve Session
March 22, 2011
Wastewater Fund
Cash Flow Summary
Operations
(Ending December 31, 2010)
M
Sales
Budget
M
13,527,180
Actuals
6,132,684
% of Budget
I
45%
Other (interest, septic, misc.)
155,500
(90,135)
(58)%
Total Revenues
Operating
13,682,680
7,5277960
6,042,549
2,521,498
44%
1i
33%
Debt Service
2,570,512
695,893
27%
Cost of Services Payment To
General Fund
114511480
7257740
50%
Total Expenses
11,549,952
3,943,131
34%
Net Increase in Undesignated
Reserves — Year To Date
2,099,418
Wastewater
Operating Results
(Ending December 31, 2010)
Personnel
$
312829310
$
11479,895
45%
Supplies, Materials, Services
$
31138,144
$
624,455
20%
Equipment, Land, Structures
$
659206
$
-
0%
Other Payments
$
1879100
$
54,018
29%
Communication & Transportation
$
818,500
$
3639130
44%
Work for Others
$
369700
$
-
0%
Total Operating Expenses
is
71527,960
is
2,521,498
1 33%
Wastewater Funds
Cash Balances
(Ending December 31, 2010)
M
Operating (170)
I
31864,562
Utility Capital / Infrastructure Replacement (171)
47616,995
Capital Reserve (172)
(Fund used to pay White Slough COP Debt Service)
(3,006,257)
Capital Reserve Restricted Assets (172)
(White Slough COP Remaining Proceeds)
51296,834
IMF (173)
848,075
Total
11,620,209
M
Water Fund
Cash Flow Summary
Operations
(Ending December 31, 2010)
M
Sales
Budget
M
6,658,590
Actuals
M
3,356,525
% of Budget
0
51%
Other (interest, septic, misc.)
89,540
78,591
88%
Total Revenues
io
Operating
6,748,130
0
47776,965
31435,116
2,205,529
51%
1
46%
Debt Service
228,030
12,047
5.3%
Cost of Services Payment To General Fund
1,060,120
530,060
50%
Total Expenses
6,065,115
2747,636
45%
Net Increase in Undesignated Reserves —
Year To Date
6871480
Water
Operating Results
(Ending December 31, 2010)
Personnel
$
1,403,580
$
605,778
43%
Supplies, Materials, Services
$
737,495
$
192,318
26%
Equipment, Land, Structures
$
81,640
$
40,846
50%
Other Payments
$
1,488,100
$
966,694
65%
Communication & Transportation
$
721,150
$
399,893
55%
Work for Others
$
345,000
$
-
0%
Total Operating Expenses
$
4,776,965
$
2,205,529
46%
Water Funds
Cash Balances
(Ending December 31, 2010)
M
Operating (180)
I
471387102
Utility Capital / Infrastructure Replacement (181)
775847066
IMF (182)
(189,587)
PCE/TCE Settlements
1376417654
PCE/TCE Rates (185)
571603553
Total
30, 334, 788
Bad Debt Write Off
(Through December 31, 2010)
Water / Wastewater Utility
Accomplishments
op ).
Operational
■ Water Distribution
■ Water Production
■ Collection System
■ Wastewater Treatment
• Regulatory
• SSo's
■ Discharge Violations
■ Monitoring and Reporting
01