HomeMy WebLinkAboutMinutes - April 21, 2015 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, APRIL 21, 2015
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, April 21, 2015, commencing at 7:01 a.m.
Present: Council Member Nakanishi, Mayor Pro Tempore Chandler, and Mayor Johnson
Absent: Council Member Kuehne, and Council Member Mounce
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
B. Topic(s)
B-1 Second Quarter Fiscal Year 2014/15 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Electric Utility Director Elizabeth Kirkley provided a PowerPoint presentation regarding the
second quarter Fiscal Year 2014/15 electric utility financial reports. Specific topics of discussion
included cash flow summary, reserve policy, cash balances, power sales, energy cost adjustment
(ECA) revenue, operating results, power supply costs, bad debt write off, load coverage, and
activities.
In response to Mayor Pro Tempore Chandler, Ms. Kirkley stated that a number of expenses that
were eligible for public benefits were not charged to the Public Benefits Fund account and staff
will transfer the funds accordingly.
In response to Council Member Nakanishi, Ms. Kirkley stated that not all utilities have an ECA
and she was uncertain whether private utilities, such as PG&E, have an ECA. City Manager
Schwabauer stated that PG&E charges a higher utility rate in order to build its reserve and to
cover fluctuations in energy costs. In further response, Ms. Kirkley stated that staff responds to all
of John Johnson's questions regarding the ECA each time a request is received.
In response to Mayor Johnson, Ms. Kirkley stated that decorative lights can be found in the
downtown area and older subdivisions that do not have the Cobra -head style lighting. She stated
the decorative lights will be replaced with light emitting diode lights with in-house labor because it
is more cost effective to handle with staff. Mr. Schwabauer further responded that a majority of
the east side has decorative lights on concrete posts, as well as the downtown and City Hall
neighborhoods and through to Ham Lane.
Public Works Director Wally Sandelin provided a PowerPoint presentation regarding the second
quarter Fiscal Year 2014/15 water and wastewater financial reports. Specific topics of discussion
included cash flow summary, operating results, cash balances for the wastewater and water
funds, bad debt write off, and activities.
In response to Mayor Johnson, Mr. Sandelin reported on the current status of the water meter
project, stating that it is currently at 75 percent completion and, out of 16,000 residential
customers, only 4,000 remain.
In response to Mayor Johnson, Mr. Schwabauer stated that approximately $500,000 in PCE/TCE
settlement funding is outstanding from Albertsons/S-Mart, primarily due to unresolved court
issues, but lately there has been a lack of cooperation, which the City could force by filing a
motion to enforce the settlement.
Mr. Sandelin announced that staff will report to Council at its meeting of May 20 on the new water
conservation regulations and the discrepancies between the City's data and the State's, along
with an explanation for the difference including the City not being fully metered which resulted in
higher assumptions. Current data of metered customers over a six-month span has provided
more accurate results, and the month of March showed usage at 83 gallons of water per capita
per day.
Mayor Johnson suggested it would be more productive at this meeting to demonstrate the desired
target the City needs to get to in order to achieve adequate conservation. Mr. Sandelin agreed,
stating that staff will recommend options for Stage 3 water conservation, which could include
reducing watering days or hours, as well as data to better understand how the numbers are
calculated and what the City can do to improve those.
Mayor Johnson stated that the message needs to be made clear to the public that there could be
significant penalties for lack of water conservation. Mr. Schwabauer stated that currently water
conservation officers can cite people who water on non -watering days or otherwise violate the
regulations. Mayor Johnson stated that citing people for running sprinklers on non -watering days
may not be sufficient, adding that he recalled in the mid-1970s that people who used too much
water were penalized on their utility bill. Mr. Sandelin stated that the Governor is leaning in that
direction, to financially punish people who do not conserve water. Mr. Sandelin provided the
following statistics from the last quarter: 1) water conservation officers responded to 413 calls and
violations, a majority of which were for flooding, water running into the gutter, and watering on the
wrong day; 2) 50 citizens called with complaints; 3) staff responded to 309 customers; and 4) only
one citation for $35 was issued.
In response to Council Member Nakanishi, Mr. Sandelin confirmed that new residential units in
Lodi pay for operating and capital expenses, as well as debt service, but revenue from water and
wastewater will increase by only 1 percent, or roughly $2,000, because it is anticipated that only
30 to 40 new homes will be occupied in the next fiscal year.
In response to Mayor Pro Tempore Chandler, Mr. Sandelin stated that complaints regarding the
taste of the water may be due to those individuals' sensitivity to chlorine. Mr. Sandelin stated
that reports can be made by location, in which case staff could flush the system; however, with
the current water situation, that may be problematic to do at this time because the process
causes water to flood the street.
In response to Myrna Wetzel, Mr. Sandelin confirmed that the City of Lodi has a tiered structure
for water billing. Ms. Wetzel pointed out that there was a judgment recently that determined this
tiered type structure was illegal and questioned what that would mean for Lodi. City Attorney
Magdich stated that the judgment in San Juan Capistrano was issued only yesterday, the
attorneys are still reviewing the case, and it is likely an appeal will be filed. Mr. Schwabauer
added that it is not binding on Northern California; the third district court of appeals has no
standing on rates in Lodi; it is a jurisdictional issue; and staff will be discussing the matter with
Council. In further response, Mr. Sandelin stated that the 36 percent reduction in water use would
be calculated across the city, not on an individual basis.
C. Comments by Public on Non-Aaenda Items - None
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 7:30 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
2
AGENDA ITEM
8-d
A a
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Second Quarter Fiscal Year 2014/15 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: April 21, 2015
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive second quarter Fiscal Year 2014/15 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 April 21, 2015.
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.
C=4e
Jordan Ayers
Deputy City Manager
Public Works Department
Water/Wastewater
IFY 15 Quarterly Update
(Ending December 31, 2014)
City Council Shirtsleeve Session
April 21, 2015
Wastewater Fund
Cash Flow Summary
(Ending December 31, 2014)
Sales
Budget
14,513,620
Actuals
7,269,213
% of Budget
50%
Development Impact Mitigation Fees (wastewater & storm)
128,860
43,222
34%
Other (interest, septic, misc.)
236,500
218,185
92%
Total Revenues
M
Operating
14,878,980
6,144,090
7,530,620
2,759,287
51%
I
45%
Capital
12,836,823
1,641,706
13%
Debt Service
3,684,380
1,957,892
53%
Cost of Services Payment To General Fund
1,068,000
534,000
50%
Total Expenses
23,983,293
6,892,885
29%
Beginning Cash (Operations Only)
2,272,441
Ending Cash (Operations Only)
4,200,633
Days Cash (Excluding Capital)
147
% of Target
163%
Wastewater
Operating Results
(Ending December 31, 2014)
Personnel
$
3,115,650
$
1,516,446
49%
Supplies, Materials, Services
$
2,030,950
$
761,843
38%
Equipment, Land, Structures
$
72,500
$
11,782
16%
Other Payments
$
223,150
$
197,890
89%
Utilities
$
696,840
$
271,326
39%
Work for Others
$
5,000
$
-
0%
Total Operating Expenses
$
6,144,090
$
2,759,287
45%
3
Wastewater Funds
Cash Balances
(Ending December 31, 2014)
E
Operating (530)
I
4,200,633
Utility Capital / Infrastructure Replacement (531)
10,175,698
Capital Reserve (532)
(Fund used to pay White Slough COP Debt Service)
(1,450)837)
Wastewater IMF (533)
71,542
Rate Stabilization Reserve (534)
5007000
Storm Drain IMF (535)
6867431
Total
14,183,467
M
Water Fund
Cash Flow Summary
(Ending December 31, 2014)
Sales
Budget
13,070,870
Actuals
6,802,794
% of Budget
52%
Development Impact Mitigation Fees
130,250
535
0.4%
Other (interest, tap fees, water meters, misc.)
968,330
310,136
32%
Total Revenues
im 0
Operating
14,169,450
5,601,270
7,113,465
2,559,571
50%
1
46%
Capital
6,937,903
1,783,385
26%
Debt Service
2,969,860
886,583
30%
Cost of Services Payment To General Fund
780,000
390,000
50%
Total Expenses
17,329,465
5,619,539
32%
Beginning Cash (Operations Only)
6,891,023
Ending Cash (Operations Only)
8,266,078
Days Cash (Excluding Capital)
396
% of Target
440%
5
Water
Operating Results
(Ending December 31, 2014)
Personnel
$
2,082,630
$
1,087,488
52%
Su lies, Materials, Services
$
1,283,580
$
407,623
32%
E ui ment, Land, Structures
$
73,000
$
19,188
26%
Other Payments
$
1,402,660
$
742,044
53%
Utilities
$
664,400
$
303,228
46%
Work for Others
$
95,000
$
-
0%
Total Operating Expenses
$
5,601,270
$
2,559,571
46%
0
Water Funds
Cash Balances
(Ending December 31, 2014)
7
Bad Debt Write Off
(Through December 31, 2014)
Water / Wastewater Utility
Activities
Operational
■ Water Distribution
■ Water Production
■ Collection System
■ Wastewater Treatment
Regulatory
• SSo's
■ Discharge Violations
■ Monitoring and Reporting
9
Electric Utility Department
IFY 15 Quarterly Update
(Ending December 31, 2014)
City Council Shirtsleeve Session
April 21, 2015
Electric Fund
Cash Flow Summary
(Ending December 31, 2014)
"M
Budget
Actuals
% of Budget
Sales Revenues
65,214,970
36,108,584
55%
Development Impact Fees
100,000
151,868
152%
Other Revenues interest, misc
2,902,080
2,002,626
69%
Total Revenues
68,217,050
38,263,078
56%
Purchase Power
39,552,170
21,263,634
54%
Non Power
11,020,060
4,653,888
42%
Capital Projects
2,607,160
537,594
21%
Debt Service
8,196,050
6,702,976
82%
Cost of Service/transfer to GF Capital
2,354,000
1,093,667
46%
In -lieu Transfer to General Fund
7,033,360
3,516,678
50%
Total Expenses
70,762,800
37,768,437
53%
Net Chg in Bal Sheet Accts
643,216
Net Increase (Decrease)
(2,545,750)
(148,575)
Beginning Local Cash Balance
12,632,503
12 632 503
Ending Local Cash Balance
10,086,753
12,483,928
GOR Balance
9,037,106
Total Reserve Balance
21,521,034
Reserve Policy Target
23,680,000
of Target
91
2
Electric Utility Reserve Policy
(Ending December 31, 2014)
M
Operating Reserve
90 Days Cash
$
17,080,000
$
I
12,483,928
Capital Reserve
Largest Distribution System Contingency
$
1,000,000
NCPA General Operating Reserve
NCPA Identified Items
$
5,600,000
$
5,794,729
NCPA MPP/GPP Balance
MPP/GPP Security Commitments
$
3,242,377
Total Target
$
23,680,000
$
21,521,034
3
Electric Funds
Cash Balances
(Ending December 31, 2014)
M
Operating (500)
$
I
4,4483914
Utility Outlay Reserve Fund (501)
$
(33722,902)
Electric Rate Stability Reserve (502)
$
23171,622
Public Benefits Fund (504)
$
439793499
IMF EU Substation and Transmission (505)
$
7503066
Solar Surcharge Fund (506)
$
1219125
Environmental Compliance (508)
$
3,7359603
NCPA — General Operating Reserve (GOR)
$
91037,106
Total
$
2195213034
2
Power Sales
(Ending December 31, 2014)
Residential
149,631,130
84,836,702
Small Commercial
158,637,238
86,954,650
Large Commercial/Small Industrial
46,038,101
23,895,485
Industrial
85,854,348,
46,260,402
TOTAL
440,160,8161
241,947,239
Residential
$25,778,344
$14,137,214
$0.1666
Small Commercial
$25,213,790
$13,834,080
$0.1591
Lar a Commercial/Small Industrial
$6,005,969
$3,356,501
$0.1405
Industrial
$8,216,867
$4780,788
$0.1033
TOTAL
$65,214,970
$36,108,584
$0.1492
5
ECA Revenue
(Ending December 31, 2014)
Residential
$
274,436
$
200,057
$
74,379
Small Commercial
$
234,844
$
242,966
$
8,122
Large Commercial/Small Industrial
$
65,304
$
75,774
$
10,470
Industrial
$
186
$
151,167
$
150,981
Total ECA Revenue
$
574,769
$
669,964
$
95,195
0
Electric Fund
Operating Results
(Ending December 31, 2014)
Personnel
$
5,531,190
$
3,013,350
54%
Supplies, Materials, Services
$
3,297,530
$
912,025
28%
Equipment, Land, Structures
$
644,930
$
544,906
84%
Other Payments
$
1,478,210
$
161,915
11%
Utilities
$
68,200
$
21,692
32%
Total Operating Expenses
$
11,020,060
$
4,653,888
42%
7
Power Supply Costs
(Ending December 31, 2014)
M
Generation
$
30,360,720
$
16,147,907
I
53%
Transmission
$
7,752,480
$
4,257,898
55%
Management Services
$
1,438,970
$
857,8291
60%
Total Power Supply Costs
$
39,552,170
$
211263,634
54%
Bad Debt Write Off
(Ending December 31, 2014)
9
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Q2-2015 Q3-2015 Q4-2015 Q1-2016
=Coverage
=Target
Load
Load coverage exceeds Risk Policy targets in all quarters. 10
(!i
Electric Utility Activities
Op
• Staffing
• Rate Increase Implementation
• LED Streetlight Project
• 230 kV Interconnection Project
• New Residential /Commercial Developments
• Capital Improvement /Maintenance
• APPA Utility Check Up
• Renewable Portfolio Standards (RPS) Planning
11