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HomeMy WebLinkAboutMinutes - October 20, 2015 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, OCTOBER 20, 2015 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, October 20, 2015, commencing at 7:00 a.m. Present: Council Member Kuehne, Council Member Mounce, Council Member Nakanishi, and Mayor Johnson Absent: Mayor Pro Tempore Chandler Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo NOTE: Council Member Kuehne arrived at 7:02 a.m. NOTE: Council Member Nakanishi left at 8:10 a.m. B. Topic(s) B-1 Fourth 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 fiscal year 2014/15 fourth quarter electric utility update. Specific topics of discussion included electric utility fund 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. Mayor Johnson questioned if the $13 million in the operating reserve was closing in on the target of $17 million, to which Ms. Kirkley responded that, if the Utility maintains its current plan and based on the financial forecast, it will reach the target over time. In response to Council Member Mounce, Ms. Kirkley confirmed that the Northern California Power Agency (NCPA) operating reserve is $1.3 million over the target amount; however, she stated some of the funding is targeted for other purposes. Council Member Mounce stated that the overage amount should go into the City's operating reserve and that she is uncomfortable with NCPA holding more of Lodi's money than it should. Ms. Kirkley pointed out that the City receives interest on those funds, and Deputy City Manager Jordan Ayers likened it to an investment account because NCPA generates greater interest than the City would receive at a banking institution. In response to Mayor Johnson, Ms. Kirkley confirmed that $3.5 million was transferred in the current budget from the public benefit fund into the operating account, which will be included in the next quarterly update, leaving $1 million in the public benefit fund. In response to Council Member Mounce, Mr. Ayers confirmed that $1.2 million was collected in penalty revenue associated with late utility bills. He pointed out that those charges apply to the total bill and are not given to a specific utility. In response to Council Member Mounce, Ms. Kirkley confirmed that the energy audit program is available to all utility customers, regardless if they are renters or homeowners. In response to Mayor Johnson, City Manager Schwabauer stated that costs associated with emergency assistance provided by the City to NCPA is reimbursed to the City, similar to the Fire Department's mutual aid agreement. In response to Council Member Mounce, Ms. Kirkley stated that the collected meter data is used in engineering studies to review feeders and transformers on the system to determine if they are overloaded, underloaded, or need replacement. In response to Mayor Johnson, Ms. Kirkley stated that staff is not experiencing any recruitment difficulties for the current openings, adding that many of the applicants are internal. Public Works Director Wally Sandelin provided a PowerPoint presentation regarding the fiscal year 2014/15 fourth quarter water and wastewater utility update. Specific topics of discussion included cash flow summary, operating results, cash balances, and cash flow summary for wastewater; operating results and cash balances for water; bad debt write off; and water/wastewater utility activities. In response to Mayor Johnson, Mr. Schwabauer stated that a majority of the Central Valley cities received letters from the State stating they did not meet the water conservation targets, and he believed that, as long as the State meets its overall goal, it is likely there will be no consequences imposed. Mayor Johnson questioned how Lodi can put a positive spin on conservation when the local press is reporting that cities like Lodi and Ripon are not meeting the goals. Mr. Sandelin responded that staff has increased its enforcement efforts and issuance of fines and published a press release on the matter. Staff will also bring an item to Council next month to restructure the fee schedule for water waste offenders. Mr. Sandelin stated that Council can also consider moving to a higher water emergency stage by decreasing watering days from two times to one time per week; however, he recommended maintaining the current level and continuing to assess the results. In response to Council Member Mounce, Mr. Sandelin explained that the category of "other" includes costs associated with Public Works assisting other departments with projects or private citizens with repairs, which is charged back to the Department. Council Member Kuehne questioned the increase in the Public Works budget from fiscal year 2012/13 to 2015/16, and staff replied that it would look into the matter and report back to Council. Council Member Mounce pointed out that the bad debt write off for the three utilities appears to total $240,000, yet the City collected $1.2 million in finance and late charges. She believed the City should not make money from the penalties and suggested they should be softened. Mr. Ayers stated that the total bad debt for fiscal year 2014/15 was $321,000, which also includes bad debt associated with other services including refuse, and that the $1.2 million in late fees is for late payments and has no correlation to bad debt write off. The revenue stream for late fees was not intended to cover bad debt. Council Member Mounce expressed her opposition to putting the revenue from late fees into the general fund, rather than back into the utility, and reiterated that the penalties should be reduced and the billing cycle timeline be revisited. Mr. Ayers stated that the concept of current late charges and billing timeline will come before Council at a Shirtsleeve Session in the next few weeks. In response to Council Member Nakanishi, Mr. Ayers stated he would provide Council with information on how many businesses are assessed late penalties. Council Member Kuehne requested that, when Council -approved projects are completed, a photograph of the final product be provided to Council. Mr. Schwabauer replied in the affirmative, stating that completed construction projects routinely go before Council for acceptance and he will ensure a photograph is attached to the staff report. B-2 Receive Follow Up Information on the Sustainable Groundwater Management Act (PW) Deputy Public Works Director Charlie Swimley provided a PowerPoint presentation regarding Sustainable Groundwater Management Act (SGMA). Specific topics of discussion included SGMA follow up from previous meeting, basin identification and boundaries, SGMA timeline, Groundwater Sustainability Agency (GSA) formation, options for GSA formations, GSA formation 2 process, GSA estimated cost, general Groundwater Sustainability Plan (GSP) scope, and GSP estimated cost. Mr. Swimley informed Council that Woodbridge Irrigation District (WID) Board is holding a meeting at 10 a.m. today with its members and farmers in the district to discuss the matter and which direction the District should move. Mayor Johnson expressed concern that those behind this effort seem unsure of the end result and suggested the City wait until the ultimate foundation is settled, particularly if the final target continues to evolve and change. Council Member Kuehne stated he believed the preferable option is to form a joint powers agreement with the entire area, over an independent GSA, because there is strength in numbers and it would cover the entire San Joaquin basin. Mr. Swimley responded that Lodi has put forth a tremendous effort to achieve sustainability in its jurisdiction by investing $15 million and the City should do all it can to protect that investment. An independent GSA would provide Lodi with autonomy; however, he stated it is unclear if Lodi can ultimately form its own agency because of overlapping districts. Mr. Schwabauer added that Lodi has 5,000 to 6,000 acre feet of surplus water that is sustainable and if Lodi were to join an agency with 10 to 15 other entities that are not sustainable, they could out vote Lodi and take the water to make others sustainable. Lodi forming its own GSA would force other agencies to be sustainable on their own without taking Lodi's water from the basin. Council Member Mounce stated she believed Lodi must fiercely protect its water because other agencies may not work in partnership once water become a precious commodity. She stated that she does not want a group with no accountability to this community to make decisions for Lodi, particularly since GSAs have a significant amount of power, including assessment of fees and the ability to acquire property. Mr. Schwabauer added that GSAs can also force cities to shut down their pumps, which is a tremendous power to give to another agency. In response to Mayor Johnson, Mr. Swimley stated that North San Joaquin Water Conservation District (NSJWCD) has taken a position to wait and see what happens with other entities, especially since Stockton East formed a GSA which will force overlapping agencies to make a move. He stated he believed WID would be a positive partner for Lodi, but it is unclear at the moment what the WID membership will do. Mr. Schwabauer stated that he believed NSJWCD will likely not oppose Lodi forming an independent GSA, but WID may be a tougher player, although the overlapping land is minimal. Council Member Nakanishi stated he believed the cost to form an independent GSA will be significantly higher than staffs estimate and that, although he initially believed participation in a Centralized GSA would be more beneficial, an independent GSA would give Lodi the power to operate under its own terms. Council Member Nakanishi reported that a working group is being formalized to explore the possibility of a Centralized GSA and he asked for Council consensus to add Lodi to the list of participants, adding that WID and Stockton already joined. He stated this would not constitute a formal statement, but it would provide valuable information and allow discussion toward a decision on whether to join a larger group or be independent. Mr. Schwabauer reminded Council that it cannot provide such direction at a Shirtsleeve Session. Council Member Nakanishi stated he believed this State law forces cities to spend a significant amount of money without receiving any additional needed water and that doing this alone is more costly than having a Centralized GSA. Council Member Mounce stated the sole accomplishment of this law is the power to control water by imposing taxes, regulating water, and allowing for eminent domain and she does not want Lodi to give up that authority. In response to Mayor Johnson, Council Member Nakanishi stated he would consent to the course that Lodi form an independent GSA, which seems to be the recommendation of staff and Council Member Mounce, but asked that he be permitted to join the County's study group to explore the possibility of a Centralized GSA. Council Member Mounce stated she was not opposed to joining the study group so long as it does not commit Lodi to anything other than a discussion on the matter. Council Member Kuehne stated he would prefer that Lodi partner with as many worthy partners as it can, such as WID. Council Member Mounce stated that Lodi may ultimately be forced to bring on additional partners, but throughout the process, Lodi must ensure it has the majority vote among the entities in the group. Mayor Johnson stated his preference is to form an independent GSA and that, if the City is forced to increase the size of the GSA, it be limited to the immediate neighbors only, i.e. WID and NSJWCD. Myrna Wetzel stated that she attended a meeting with Assemblymember Cooper regarding the twin tunnels project and he reported that Northern California is against the tunnels, while Southern California is in favor of the project and they have the greater number of votes. C. Comments by Public on Non-Aaenda Items Council Member Mounce referenced an e-mail that Council received regarding the City's tree policy and the number of trees being cut down on Church Street. She requested staff research the policy and provide the information to Council and the citizen who questioned the matter. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 8:12 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 0 AGENDAITEM 13,01 AM CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Fourth Quarter Fiscal Year 2014/15 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: October 20, 2015 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive utility financial reports for the fourth quarter of Fiscal Year 2014/15. 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 October 20, 2015. Note that the data contained in these reports is prior to our annual audit and is subject to change. 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. FUNDING AVAILABLE: Not applicable. • Mail MzAW4°� Public Works Department Water/Wastewater IFY 15 Quarterly Update (Ending June 30, 2015) City Council Shirtsleeve Session October 20, 2015 Wastewater Fund Cash Flow Summary (Ending June 30, 2015) Sales Budget 14,513,620 Actuals 14,714,404 % of Budget 101% Development Impact Mitigation Fees (wastewater & storm) 128,860 183,994 143% Other (interest, septic, misc.) 236,500 932,412 394% Total Revenues M Operating 14,878,980 6,381,720 15,830,810 6,449,159 106% I 105% Capital 13,004,823 4,941,069 38% Debt Service 3,671,530 3,618,800 99% Cost of Services Payment To General Fund 1,068,000 1,068,000 100% Total Expenses 24,126,073 16,077,028 67% Beginning Cash (Operations Only) 5,806,584 Ending Cash (Operations Only) 5,651,080 Days Cash (Excluding Capital) 185 % of Target 206% Wastewater Operating Results (Ending June 30, 2015) Personnel $ 3,115,650 $ 3,273,693 105% Supplies, Materials, Services $ 2,230,950 $ 2,223,256 100% Equipment, Land, Structures $ 72,500 $ 36,963 51% Other Payments $ 260,780 $ 291,182 112% Utilities $ 696,840 $ 593,065 85% Work for Others $ 5,000 $ 31,000 620% Total Operating Expenses $ 6,381,720 $ 6,449,159 101 3 Wastewater Funds Cash Balances (Ending June 30, 2015) E Operating (530) I 5,651,080 Utility Capital / Infrastructure Replacement (531) 6,930,895 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) 49,163 Wastewater IMF (533) 81872 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 790,252 Total 13,930,262 M Water Fund Cash Flow Summary (Ending June 30, 2015) Sales Budget 13,070,870 Actuals 12,723,156 % of Budget 97% Development Impact Mitigation Fees 130,250 20,299 16% Other (interest, tap fees, water meters, misc.) 968,330 1,266,316 131% Total Revenues Operating 14,169,450 5,834,152 14,009,771 5,424,183 99% 93% Capital 11,203,159 5,703,184 51% Debt Service 2,969,860 2,971,395 100% Cost of Services Payment To General Fund 780,000 780,000 100% Total Expenses 20,787,171 14,878,762 72% Beginning Cash (Operations Only) 9,338,320 Ending Cash (Operations Only) 5,973,562 Days Cash (Excluding Capital) 238 % of Target 264% 5 Water Operating Results (Ending June 30, 2015) Personnel $ 2,315,512 $ 2,309,986 100% Supplies, Materials, Services $ 1,283,580 $ 1,029,088 80% Equipment, Land, Structures $ 73,000 $ 30,566 42% Other Payments $ 1,402,660 $ 1,417,490 101% Utilities $ 664,400 $ 542,054 82% Work for Others $ 95,000 $ 95,000 100% Total Operating Expenses $ 5,834,152 1 $ 5,424,183 1 93% 0 Water Funds Cash Balances (Ending June 30, 2015) 7 Bad Debt Write Off (Through June 30, 2015) 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 June 30, 2015) City Council Shirtsleeve Session October 20, 2015 Electric Utility Fund Cash Flow Summary (Ending June 30, 2015) Net Increase (Decrease) Budget Actuals % of Budget Sales Revenues 65,348,200 65,235,939 100% Development Impact Fees 100,000 163,985 164% Other Revenues (interest, misc) 2,902,080 3,873,520 133% Total Revenues 68,350,280 69,273,445 101% Purchase Power 39,810,110 39,381,796 99% Non Power 12,206,230 11,298,133 93% Capital Projects 3,788,858 2,766,533 73% Debt Service 8,190,550 8,190,550 100% Cost of Service/transfer to GF Capital 2,354,000 2,354,000 100% In -lieu Transfer to General Fund 7,033,360 7,033,360 100% Total Expenses 73,383,108 71,024,372 97% Net Chg in Bal Sheet Accts 1 2,183,827 Net Increase (Decrease) (5,032,828) 432,900 Beginning Local Cash Balance 12,632,503 12,632,503 Ending Local Cash Balance 7,599,675 13,065,403 GOR Balance 10,199,174 Total Reserve Balance 23,264,577 Reserve Policy Target 23,680,000 % of Target 98% 2 Electric Utility Reserve Policy (Ending June 30, 2015) Operating Reserve 90 Days Cash $ 17,080,000 $ 13,065,403 Capital Reserve Largest Distribution System Contingency $ 1,000,000 NCPA General Operating Reserve NCPA Identified Items $ 5,600,000 $ 6,956,797 NCPA MPP/GPP Balance MPP/GPP Security Commitments $ 3,242,377 Total Target $ 23,680,000 $ 23,264,577 3 Electric Utility Funds Cash Balances (Ending June 30, 2015) m Operating 500 $ I 962,303 Utility Outlay Reserve Fund 501 $ 0 Electric Rate Stability Reserve 502 $ 23179,794 Public Benefits Fund 504 $ 43137,786 IMF EU Substation and Transmission 505 $ 906,568 Solar Surcharge Fund 506 $ 225,680 Environmental Compliance 508 $ 43653,272 NCPA — General Operating Reserve GOR $ 10,199,174 Total $ 233264,577 El Power Sales (Ending June 30, 2015) Residential 149,631,130 148,950,428 Small Commercial 158,637,238 161,015,810 Large Commercial/Small Industrial 46,038,101 44,658,572 Industrial 85,854,348 84,1565101 TOTAL 440,160,816 438,780,911 Residential $ 25,917,611 $ 25,165,194 $0.1690 Small Commercial $ 25,233,378 $ 25,651,824 $0.1593 Large Commercial/Small Industrial $ 5,994,669 $ 6,076,114 $0.1361 Industrial $ 8,202,542 $ 8,342,807 $0.0991 TOTAL $ 65,348,200 $ 65,235,939 $0.1487 5 ECA Revenue (Ending June 30, 2015) Residential $ 274,436 $ 200,057 $ 527,001 $ 52,547 $ 505,169 Small Commercial $ 234,844 $ 242,966 $ 571,871 $ 100,334 $ 680,328 Large Commercial/Small Industrial $ 65,304 $ 75,774 $ 159,882 $ 32,302 $ 202,654 Industrial $ (186),$ 151,167 $ 253,721 $ 73,990 $ 478,692 Total ECA Revenue $ 574,769 $ 669,964 $ 1,512,475 $ 259,173 $ 1,866,843 0 Electric Utility Fund Operating Results (Ending June 30, 2015) Personnel $ 5,531,190 $ 6,398,576 116% Supplies, Materials, Services $ 3,419,780 $ 2,329,901 68% Equipment, Land, Structures $ 815,930 $ 284,368 35% Other Payments $ 2,372,630 $ 2,231,307 94% Utilities $ 66,700 $ 53,981 81% Total Operating Expenses 1 $ 12,206,230 1 $ 11,298,133 1 93% 7 Power Supply Costs (Ending June 30, 2015) Generation $ 309618,660 $ 289965,686 95% Transmission $ 7,752,480 $ 8,401,525 108% Management Services $ 11438,970 $ 21014,585 140% Total Power Supply Costs $ 39,810,110 $ 39,3819796 99% Bad Debt Write Off (Ending June 30, 2015) 9 140,000 120,000 100,000 80,000 60,000 40,000 20,000 Q4-2015 Q1-2016 Q2-2016 Q3-2016 =Coverage =Target Load Load coverage meets/exceeds Risk Policy targets in all quarters. 10 Electric Utility Activities • Staffing • Rate Restructure • Residential Energy Audit/ Direct Install Program • NCPA Emergency Assistance • Residential / Commercial Developments • Capital Improvements / Maintenance • Meter Data Management • New RPS Resources • Joint Services Agreement with SCPPA 11 AGENDA ITEM Be, CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Receive Follow Up Information on the Sustainable Groundwater Management Act MEETING DATE: October 20, 2015 (Shirtsleeve) PREPARED BY: Public Works Director RECOMMENDED ACTION: Receive follow up information on the Sustainable Groundwater Management Act. BACKGROUND INFORMATION: During the September 22, 2015 presentation on the Sustainable Groundwater Management Act, the Council requested follow up information regarding the formation process and approximate costs of Groundwater Sustainability Agencies (GSA's). In addition, Council requested additional information regarding the scope and approximate costs of preparing a Groundwater Sustainability Plan. This presentation will provide the Council with the follow up information requested and offer the recommendation to proceed with forming a GSA with Woodbridge Irrigation District. FISCAL IMPACT: Not applicable. FUNDING AVAILABLE: Not applicable. F. Wally Sande in Public Works Director Prepared by Charlie Swimley, City Engineer / Deputy Public Works Director FWS/CS/tb K:\WP\PROJECTS\WATER\SGMA\CC SGMA GSA Shirtsleeve 10-20-15.doc 10/13/2015 The City of Lodi Public Works Sustainable Groundwater Management Act (SGMA) — Follow Up Shirtsleeve Meeting October 20, 2015 SGMA Follow Up Groundwater Sustainability Agencies (GSA's) More detail regarding formation Governance Alternatives Approximate Costs Groundwater Sustainability Plans (GSP's) General Scope of a GSP Approximate Costs Provide Staff with "Nod" to begin planning the framework for forming a GSA 0 16 v COSUMNIFS SUB-BASIN Q CALAVERAS COUNTY EASTERN SAN JOAQUIN SUB -BASIN TRACY OONTRA SUB -BASIN COSTA COUNTY MODESTO SUB -BASIN ALAMEDA COUNTY STANISLAUS COUNTY 10 0 10 Miles Em Source_ Cal ifomia Spatial Information Library at hhp lAm qis ca govl SGMA Timeline Sept. 16 2014: Groundwater management legislation becomes law Jan. 1, 2015: Legislation goes into effect Jan. 31, 2015: Department of Water Resources (DWR) established initial groundwater basin priority June 30, 2017: Deadline to form a Groundwater Sustainability A enc Jan. 31, 2020: Groundwater Sustainability Plan required for all critically overdrafted basins Jan. 31, 2040-2042: Basins must achieve sustainability GSA Formation Any local agency, or combination of local agencies, overlying a high- or medium -priority groundwater basin may from a GSA. 1) Regulate extractions 2) Authorized groundwater transfers 3) Impose fees and fines 4) Acquire property 5) Manage compliance Options for GSA Formations Centralized GSA ➢ Covers entire basin ➢ Assumes all authorities and responsibilities ➢ New or existing agency Distributed GSA ➢ Each GSA assumes all responsibilities for their service area ➢ Requires Memorandum of Agreement (MOA) or Joint Powers Agreement (JPA) Combination of centralized and distributed ➢ Centralized GSA: assumes some shared responsibilities ➢ Multiple GSAs: assume remaining responsibilities ➢ Multiple agreements L\ Format-ion Proce Meetings / Discussion File Notice of Intent w/ DWR Council Direction Public Hearing Adopt Resolutions GSA Takes Effect 90 Days Later Estimated Cost (GSA) Task 1: ➢ Establishing the boundary map of the GSA ➢ Legal Counsel advisement on procedural matters ➢ Estimated Cost: Less than $5,000 (Staff time) Task 2: Drafting the Agreement ➢ Legal : ➢ Engineering $20,000 (Staff time) $ 5,000 (Staff time) $25,000 TOTAL ESTIMATED COST: $30,000 General GSP Scope Draft Topics Include: ➢ Pre-SGMA Conditions and Undesirable Results ➢ Measurable Objectives and Interim Milestones ➢ Land Use and County Involvement ➢Alternative GSP Submittals ➢ Boundaries — Overlapping and Unmonitored Areas ➢ Intra Basin Coordination Agreements ➢ Water Budgets and Coordination ➢State Agency Coordination ➢ Data Collection, Management and Reporting ➢ Adaptive Management and Focus Areas Similar to Urban Water Management Plans Estimated Cost (GSP) ➢ Legal Counsel : $ 25,000 ➢Engineering Consultants: 75,000 $100,000 ➢ Very rough estimate ➢ Does not include in-house annual operating/administration costs Questions?