HomeMy WebLinkAboutMinutes - May 14, 2013 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MAY 14,2013
A. Roll Call bv Citv Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, May 14, 2013, commencing at 7:00 a.m.
Present: Council Member Hansen, Council Member Mounce, Mayor Pro Tempore Katzakian,
and Mayor Nakanishi
Absent: Council Member Johnson
Also Present: City Manager Bartlam, City Attorney Schwabauer, and City Clerk Johl
B. Topic(s)
B-1 Receive Presentation Regarding Fiscal Year 2013/14 Budget (CM)
Deputy City Manager Jordan Ayers provided a PowerPoint presentation regarding the Fiscal Year
2013/14 Budget. Specific topics of discussion included the utility fund overview with revenues,
expenses, capital projects, and fund balances and reserves for the electric utility, water utility and
wastewater utility.
In response to Council Member Hansen, Electric Utility Director Elizabeth Kirkley stated the
power supply costs have increased due to CallSO and the increase is projected for the entire
year.
In response to Mayor Pro Tempore Katzakian, City Manager Bartlam stated CalPERS costs,
including smoothing, are allocated to the individual departments based upon the employee.
In response to Mayor Nakanishi, Mr. Bartlam stated the cost of service citywide has decreased
approximately $1.4 million primarily due to the decrease in the number of employees over the last
few years.
In response to Council Member Hansen, Ms. Kirkley stated there is a need to maintain a 90 -day
cash flow balance in the Public Benefit Fund and funding is still being put together for the
$2 million citywide lighting energy efficiency project.
In response to Council Member Hansen, Mr. Ayers stated he is also frustrated with the decrease
in interest the City will receive from the federal government for the Build America Bonds despite a
fixed rate.
In response to Mayor Nakanishi, Mr. Bartlarn and Mr. Ayers confirmed that 25% is the water
reserve amount based on City policy and cities vary greatly with respect to their specific reserve
amounts.
In response to Council Member Mounce, Mr. Ayers stated 2017 is the first call opportunity for
debt service bonds for the wastewater utility. Mr. Ayers stated he will provide the account code for
tracking the Parks and Recreation loan to Council Member Mounce.
In response to Council Member Hansen, Mr. Ayers and Mr. Bartlam reviewed the debt service
investment and payment procedure. Deputy Public Works Director Larry Parlin stated the five-
year permit is expected to be adopted by the regional board at its September meeting.
Continued May 14, 2013
A brief discussion ensued between Council Member Mounce, Council Member Hansen, and
Mr. Ayers regarding the reserve amounts in the utilities being drawn down based on future
infrastructure needs and project completion.
B-2 Third Quarter Fiscal Year 2012/13 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Deputy Public Works Director Larry Parlin and Electric Utility Director Elizabeth Kirkley provided a
PowerPoint presentation regarding the third quarterly utility update. Specific topics of discussion
for electric utility included cash flow summary, operating results, cash balances, power supply
costs, power sales, Energy Cost Adjustment (ECA) revenue, billing statistics, bad debt write off,
Northern California Power Agency reserve, open position, and departmental activities. Specific
topics of discussion for water/wastewater utility included cash flow summary, operating results,
cash balances, bad debt write-off, and departmental activities.
In response to Mayor Nakanishi, Mr. Parlin stated the bad debt write off has decreased due to the
shortened time period for billing and payment for service.
In response to Council Member Mounce, Mr. Parlin stated some complaints were received
regarding the taste of water from the plant and the primary reasoning is that, while the actual
water from the plant tastes good, the distribution system in the City in some of the older homes
that are 40 years or older still have galvanized piping that has never been flushed, which helps
tremendously.
In response to Mayor Pro Tempore Katzakian, Mr. Parlin stated there is a savings in power from
not running the wells although the same amount of water is being pumped through the plant.
In response to Council Member Mounce, Mr. Bartlam stated the ECA will not start to go down
because the 90 -days cash on hand is a minimum target, the City currently has 108 days which is
well below the overall reserve policy, the ECA is tied directly to power costs and not the reserve,
and PG&E is being mandated by CallSO to do a project on the east side for which the City will
have to complete a system upgrade for approximately $30 million.
In response to Mayor Pro Tempore Katzakian, City Attorney Schwabauer stated having a reserve
is considered the cost of doing business and is included in Proposition 218 considerations as the
assessed costs must be directly related to cost of providing the service.
In response to Mayor Nakanishi, Mr. Schwabauer stated there is no set number for reserve
amount although it must be reasonable based on pending projects and other related factors.
Mr. Bartlam stated that, if the City did not have an ECA, rate increases would need to be
considered several times a year based on cash flow.
In response to Council Member Hansen, Ms. Kirkley stated the line to the west will increase
capacity, voltage, and reliability for the City and result in a $2.5 million savings annually, which
will also help offset the debt service for the City's portion of the system upgrade. Ms. Kirkley also
briefly explained the history of the project to date.
In response to Council Member Mounce, Ms. Kirkley stated that the City is obligated to undergo
the California Public Utility Commission audit, but it is not required to comply with the results of
the audit.
In response to Mayor Pro Tempore Katzakian, Mr. Bartlam stated the City does not directly pay
for the audit.
N
Continued May 14, 2013
In response to Mayor Nakanishi, Ms. Kirkley stated developer impact fees for the utility are based
on new business activities anticipated to take place in the budget year. Mr. Bartlam stated from a
physical development perspective there is more construction and generally the City is doing
better than it was during the current time last year.
C. Comments by Public on Non -Agenda Items
None.
D. Admournmen
No action was taken by the City Council. The meeting was adjourned at 8:15 a.m.
ATTEST:
RandiJohl
City Clerk
AGENDAITEM 13'00k
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2013/14 Budget
MEETING DATE: May 14, 2013
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive presentation regarding Fiscal Year 2013/14 budget.
BACKGROUND INFORMATION: The Fiscal Year (FY) 2013/14 budget is built on a number of basic
economic assumptions.
The budget is on schedule to be released for public review this week, with adoption of the document
scheduled for early June.
In advance of publication of the document, staff has held a series of presentations that provided Council
and the public with the basic parameters that form the foundation of the budget. The Shirtsleeve Session
on April 30, 2013 focused on general economic issues that the City is addressing in the budget process
along with general fund revenue projections. The May 7, 2013 Shirtsleeve Session focused on the City's
Special Revenue Funds,
Today's discussion will focus on the three utility funds of the City; the Electric Utility Fund, the Water
Utility Fund and the Wastewater Utility Fund.
FISCAL IMPACT: Revenues, expenses and increases/decreases to reserves are as noted below:
Fund Revenues
Expenses
Increasel(Decrease) to Reserves
Electric $71,127,990
$70,941,010
$186,980
Water $14,484,970
$11,051,080
$3,433,890
Wastewater $15,035,170
$15,525,370
($490,200)
JA/j*a
Jordan Ayers
Deputy City Manager
APPROVED:
"� Konradt Bartlam, City Manager
udget
City Council Shirtsleeve
Session
May 14, 2013
Overview
Utility Funds
o Electric
• Water
• Wastewater
Electric Utility Overview I
Ending Cash Balance * 5,032,177 2,143,190 3,876,863 7,166,405 7,353,385
* Local cash, excluding NCPA General Operating Reserve (GOR)
Cl
Audited
Audited
Estimated
2010-11
2011-12
2012-13
2012-13
2013-14
Actuals
Actuals
Budget
Actuals
Budget
lElectric Utility Enterprise Fund
Cash Balance
Beginning Cash Balance
12,125,835
5,032,177
2,627,569
2,143,190
7,166,405
Revenues
62,984,863
65,646,115
70,453,990
72,848,005
71,127,990
Expenditures
70,078,521
68,535,102
69,204,696
67,824,790
70,941,010
Net Difference (Revenues Less Expenditures)
(7,093,658)
(2,888,987)
1,249,294
5,023,215
186,980
Ending Cash Balance * 5,032,177 2,143,190 3,876,863 7,166,405 7,353,385
* Local cash, excluding NCPA General Operating Reserve (GOR)
Cl
Electric Utilit
Revenues $674,000 higher than FY
2012/13 budget
• Customer charges 0.59% higher than
prior year budget - $377,000
• Work for Others - $874,000 higher
• GHG/REC sales - $1.1 M lower
Electric Utility I
Expenses $1-7M higher than FY 2012/13
budget
Position Changes
• Deleted Manager, Customer Svcs & Programs
• Distribution Planner unfunded
• Salary & benefits - $400,000 higher
• Services & supplies - $876,000 higher
• Power costs - $784,000 higher
• Capital projects & equipment - $6467000
higher
o Transfers & special payments - $959,000
lower
Electric Utility Capital Projects I
Vehicles $475,000
12kV maintenance $866)000
230kV interconnection $250,000
Streetlight grounding & fusing $411,100
Distribution capacity program $275,000
ERP/CIS replacement $250)000
Facility upgrades $157)000
Pole inspection/testing $53,600
R
Electric Utility Reserves
Purpose
Basis
2013114
Target
Operating Reserve
90 days cash
$17)232)000
Capital Reserve
Largest distribution system
contingency
$1,0007000
NCPA General Operating
Reserve
NCPA identified Items
$6,2007000
Total Target
$24)4327000
Estimated FY 2013/14
Reserve
$15,99270001
Water Utility
lWater Utility Enterprise Fund
Cash Balance
Beginning Cash Balance
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Cash Balance
Ending Cash Balance
Audited Audited Estimated
2010-11 2011-12 2012-13 2012-13 2013-14
Actuals Actuals Budget Actuals Budget
14,120,605 12,807,412 14,656,699 12,465,350 10,376,435
14,554,388
13,678,648
20,822,160
19,165,055
14,484,970
15,867,581
14,020,710
28,201,081
21,253,970
11,051,080
(1,313,193)
(342,062)
(7,378,921)
(2,088,915)
3,433,890
12,807,412 12,465,350 7,277,778 10,376,435 13,810,325
8
Water Utilit
m Total revenue reduction - $6.3M
• Revenue reduction associated with
Treatment Plant construction (bond
funded)- $6.OM
• Service Charge revenue up 2.5% over
2012/13 estimated receipts
o Includes $613,720 interest subsidy on the
Build America Bonds (7.9% reduction)
Water Utilit
Total expense reduction - $17.1 M
o Mostly related to completion of the
Surface Water Treatment Plant
o Operating Transfers
m Cost of service - $280,000 reduction
m ERP/CIS replacement - $250,000
10
Water Utility I
m Capital Projects
• Water Meter Program ($700,000)
• Well Rehab/Replacements/Improvements
($305,000)
• ERP/CIS system replacement ($250,000)
o Various taps, mains and other projects
($2007000)
11
Water Utility Reserves I
• Target is 25% of operating expenses
• Target for FY 2013/14 equals
$274627000
• FY 2013/14 Estimated Reserve is
$13,810,000
12
Wastewater Utility I
lWastewater Utility Enterprise Fun
Cash Balance
Beginning Cash Balance
Revenues
Expenditures
Net Difference (Revenues Less Expenditures)
Cash Balance
Ending Cash Balance
Audited Audited Estimated
2010-11 2011-12 2012-13 2012-13 2013-14
Actuals Actuals Budget Actuals Budget
6,831,614 10,606,065 8,380,707 12,513,936 12,078,736
17,159,228
15,947,883
14,235,330
14,122,000
15,035,170
13,384,777
14,040,012
15,414,026
14,557,200
15,525,370
3,774,451
1,907,871
(1,178,696)
(435,200)
(490,200)
10,606,065 12,513,936 7,202,011 12,078,736 11,588,536
13
Wastewater Utility
m Total revenue increase - $800)000
• Balance
of bond
proceeds -
$678,000
• Service
Charge
revenue up
$149,000
m 2.5% over 2012/13 estimated receipts
14
Wastewater Utility I
m Total expense increase - $111,000
o Debt Service increase - $2.8M
m Early pay off of 2003 COPS
o Operating transfers decrease - $808,000
• Cost of service - $380,000 decrease
• Loan to PRCS (one-time item) - $675,000
m ERP/CIS replacement - $250,000
o Capital projects and vehicles decrease —
$1.7M
15
Wastewater Capital Projects I
• Storm Drain Trash Handling System
($400,000)
• Various Plant Maintenance Projects
($364,000)
• Main Replacement ($100,000)
• ERP/CIS Replacement ($250,000)
• Collection System Maintenance Projects
($108,000)
16
Wastewater Utility Reserves I
• Target is 25% of operating expenses
• Target for FY 2013/14 equals
$376347000
• FY 2013/14 Estimated Reserve is
$11,588,500
17
1
AGENDAITEIVII&L
A% CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Third Quarter Fiscal Year 2012/13 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: May 14, 2013
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive third quarter Fiscal Year 2012/13 Water, Wastewater and
Electric Utility Department financial reports.
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 May 14, 2013.
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.
Jor n Ayers
Deputy City Manager
APPROVED:- (-
J�oVabt Bartlam, City Manager
Electric Utility Department
IFY 13 Quarterly Update
(Ending March 31, 2013)
City Council Shirtsleeve Session
May 14,2013
Electric Fund
Cash Flow Summary
(Ending March 31, 2013)
Net Increase (Decrease)
Budaet
Actuals
% of Budget
Sales Revenues
66,424,170
48,488,632
73%
Development Impact Fees
200,000
6,226
3%
Other Revenues (interest, misc)
3,829,820
924,086
24%
Total Revenues
70,453,990
49,418,944
70%
Purchase Power
39,066,260
28,803,693
74%
Non Power
10,204,530
6,827,644
67%
Capital Projects
1,417,000
679,676
48%
Debt Service
8,306,330
6,441,422
78%
Cost of Service
2,856,390
2,142,293
75%
In -lieu Transfer to General Fund
6,976,670
5,232,503
75%
Total Expenses
68,827,180
50,127,231
73%
,Net Chg in Bal Sheet Accts
3,539,925
Net Increase (Decrease)
1,626,810
2,831,638
Beginning Local Cash Balance
8,694,211
8,694,211
Ending Local Cash Balance
10,321,021
11,525,849
Beginning GOR
11,576,432
13,655,332
Net Increase (Decrease) in GOR
(8,183,568)
Ending GOR
6,432
5471764
Total Local Cash Balance and GOR
21,897,453
16,997,613
Days of Cash on Hand
135
108
Days of Cash Target
90
1% of Target
120%1
Electric Fund
Operating Results
(Ending March 31, 2013)
Personnel
$
5,468,750
$
3,895,904
71%
Supplies, Materials, Services
$
2,210,720
$
1,087,379
49%
Equipment, Land, Structures
$
911,800
$
272,120
30%
Other Payments
$
1,554,480
$
1,539,009
99%
Utilities
$
58,780
$
33,231
57 o
Total Operating Expenses
$
10,204,530
$
6,827,644
67%
Electric Funds
Cash Balances
(Ending March 31, 2013)
M
Operating (160)
$
N
31639,425
Utility Outlay Reserve Fund (161)
$
555,868
Electric Rate Stability Reserve (162)
$
2)158,648
Public Benefits Fund (164)
$
41082,647
IMF EU Substation and Transmission (165)
$
659,812
Solar Surcharge Fund (166)
$
(115,411)
Environmental Compliance (168)
$
544,860
NCPA — General Operating Reserve (GOR)
$
594719764
Total
$
16,997,613
M
Power Supply Costs
(Through March 31, 2013)
Generation
$
3175177160
$
2672817917
83%
Transmission
$
879497490
$
571297759
57%
Management Services
$
172907670
$
170797366
84%
Third Party Revenue
$
(276917060)_
$
(376877349)_
137%
Adjustments
TOTAL
$
391066�260
$
281803�693
74
Power Sales
(Through March 31, 2013)
July
2012
0
0
321
363
August
2012
0
0
378
332
September
2012
0
6
247
222
October
2012
66
91
76
54
2012
289
360
0
0
-November
December
2012
549
603
0
0
January
2013
649
595
0
0
February
2013
455
407
0
0
March
2013
, 221
324
0
0
FY13 Total
1 2229
2386
1022
1 971
ECA Revenue
(Through March 31, 2013)
Residential
$
(976,819)
$
413,363
$
762,558
$
199,101
Small Commercial
$
(850,736)
$
390,157
$
743,678
$
283,099
Large Commercial/Small Industrial
$
(254,377)
$
131,982
$
232,403
$
110,008
Industrial
$
(436,044)
$
72,335
$
198,017
$
(165,692
Total ECA Revenue
$
(2,517,976)
$
1,007,836
$
1,936,656
$
426,51 15
Billing Statistics
(Through March 31, 2013)
Residential
149,173,856 $
25,047,697
$
0.1679
Small Commercial
152,873,821 $
24,310,122
$
0.1590
Large Commercial/Small Industrial
40,144,007 $
6,309,109
$
0.1572
Industrial
92,239,869, $
10,757,242,
$
0.1166
TOTAL
434,431,5531 $
66,424,1701
$
0.14641
Residential
118,402,060 $
19,965,896
$
0.1686
Small Commercial
114,410,553 $
17,742,151
$
0.1551
Large Commercial/Small Industrial
34,590,178 $
4,752,436
$
0.1374
Industrial
63,8861,162 $
6,028,149�
0.0944
TOTAL
331,288,953 $
48,488,632
$
0.14641
Bad Debt Write Off
(Through March 31, 2013)
NCPA General Operating Reserve (GOR)
(Through March 31, 2013)
GOR Balance
)413,655,332
(Jun 30,
2012)
)4
5,471,764
(Mar 31,
2013)
Interest Income $ 24,334
Budget Settlement $ 842,509
Participant Deposits $ 343,800
Participant Withdrawals ($ 51967,604)
Sched. Coord. Balancing Acct ($ 260,249)
IVIPP Security Account ($ 391669358)
• MPP Security Account Balance - $2,617,348
• GPP Security Account Balance - $ 549,010
Total Sec Acct Balance $3,166,358
$8,183,568 Decrease
re,
FY1 3
FY13 Open Position
11
46,322
0.0%
28,725
0.0%
17,597
0.0%
46,645
0.0%
31,285
0.0%
15,360
0.0%
40,959
0.0%
25,245
0.0%
15,714
0.0%
35,717
0.0%
23,498
0.0%
12,219
0.0%
33,735�
0.0%
21,808
0.0%
11,927
0.0%
35,866
0.0%
21,676
0.0%
14,191
0.0%
36 ' 392
0.0%
23,235
0.0%
13,157
0.0%
32,462
0.0%
20,946
0.0%
11,515
0.0%
34,947
0.0%�
21,929
0.0%�
13,0181
0.0%
(2,749)
34,068
(8.1%)
(1,904)
22,136
(8.6%)
(846)
11,932
(7.1%)
(3,475)
37,781
(9.2%)
(2,300)
24,619
(9.3%)
(1,175)
13,162
(8.9%)
(1,563)
41,6301
(3.8%)
5,771
26,5051
21.8%
(7,3341
15,124
(48.5%)
FY Total (7,787)
456,525
(1.7%)l
1,567
291,608
0.5%1
(9,355)1
164,9161
(5.7 0
Bal Yr Total (7,787)
113,479
1,5671
73,261
2.1 %�
(9,3 5)�
40,218�
(23.3%)
11
Electric Utility Activities
Op
• WECC Audit of NERC Reliability Standards
• Cap & Trade/Green House Gas (GHG)
• Renewable Portfolio Standard (RPS)
• CPUC Audit of Distribution System
• UG Maintenance Program
Energy Theft Diversion Program
Staffing
12
op Public Works Department
Water/Wastewater
IFY 13 Quarterly Update
(Ending March 31, 2013)
City Council Shirtsleeve Session
May 14,2013
Wastewater Fund
Cash Flow Summary
(Ending March 31, 2013)
Sales
Budget
13,873,500
Actuals
9,926,205
% of Budget
72%
Development Impact Mitigation Fees (wastewater & storm)
82,740
21,530
26%
Other (interest, septic, misc.)
279,040
265,214
95%
Total Revenues
Operating
14,235,280
6,395,240
10,212,949
3,891,986
72%
61%
Capital
2,763,657
972,833
35%
Debt Service
4,128,650
1,856,930
45%
Cost of Services Payment To General Fund
1,451,480
1,088,610
75%
Total Expenses
14,739,027
7,810,359
53%
Beginning Cash (Operations Only)
4,444,825
Ending Cash (Operations Only)
4,733,864
Days Cash (For Operations)
260
Days Cash Target
90
% of Target
289%
2
Wastewater
Operating Results
(Ending March 31, 2013)
Personnel
$
3,239,330
$
2,226,672
69%
Supplies, Materials, Services
$
2,049,890
$
914,503
45%
Equipment, Land, Structures
$
101,000
$
22,531
22%1
Other Payments
$
205,120
$
203,939
99%
Utilities
$
707,400
$
524,341
74%
Work for Others
$
92,500
$
0%
Total Operating Expenses
$
6,395,240
$
3,891,986
61%1
Wastewater Funds
Cash Balances
(Ending March 31, 2013)
M
Operating (170)
I
41733)864
Utility Capital / Infrastructure Replacement (171)
61037,415
Capital Reserve (172)
(Fund used to pay White Slough COP Debt Service)
Wastewater IMF (173)
(1,409,331)
703,052
Rate Stabilization Reserve (174)
500,000
Storm Drain IMF (175)
6817432
Total
11,924,201
Water Fund
Cash Flow Summary
(Ending March 31, 2013)
Sales
Budget
12,419,950
Actuals
9,178,593
% of Budget
74%
Development Impact Mitigation Fees
19,670
2,529
13%
Other (interest, tap fees, water meters, misc.)
2,376,940
1,733,343
73%
Total Revenues
im
Operating
14,816,560
6,091,510
10,914,465
3,864,526
74%
i
63%
Capital
18,080,841
10,006,378
55%
Debt Service
2,968,610
909,037
31%
Cost of Services Payment To General Fund
1,060,120
795,090
75%
Total Expenses
28,201,081
15,575,031
55%
Beginning Cash (Operations Only)
13,508,283
Ending Cash (Operations Only)
15,064,674
Days Cash (For Operations)
886
Days Cash Target
90
% of Target
984%
Water
Operating Results
(Ending March 31, 2013)
Personnel
$
2,236,450
$
1,615,316
72%
0
Supplies, Materials, Services
$
1,418,500
$
700,757
D
49%
0
Equipment, Land, Structures
$
48,000
$
35,742
D
74%
0
Other Payments
$
1,351,280
$
1,010,652
75%DI/6
Utilities
$
731,280
$
502,059
69%
Work for Others
$
306,000
$
0%
Total Operating Expenses
1 $
6,091,510
1 $
3,864,526
1 63%1
Water Funds
Cash Balances
(Ending March 31, 2013)
Bad Debt Write Off
(Through March 31, 2013)
Water / Wastewater Utility
Activities
Operational
m Water Distribution
• Water Production
• Collection System
• Wastewater Treatment
Regulatory
ESSO's
• Discharge Violations
• Monitoring and Reporting
01