HomeMy WebLinkAboutMinutes - December 1, 2015 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, DECEMBER 1, 2015
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, December 1, 2015, commencing at 7:00 a.m.
Present: Council Member Kuehne, Council Member Nakanishi, Mayor Pro Tempore Chandler,
and Mayor Johnson
Absent: Council Member Mounce
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
NOTE: Council Member Nakanishi arrived at 7:05 a.m. and left at 8:20 a.m.
B. Topic(s)
B-1 Northern California Power Agency Presentation (EU)
Northern California Power Agency (NCPA) General Manager Randy Howard provided a
PowerPoint presentation regarding the NCPA Geysers emergency restoration. Specific topics of
discussion included the Valley Fire summary, damage to NCPA facilities, 21 kV power line
restoration, arrival of line crews, base camp, and restoration process.
Mr. Howard and NCPA Assistant General Manager Ken Speer presented Certificates of
Appreciation to the Lodi Electric Utility line crews for their assistance in the restoration efforts in
the aftermath of the Valley Fire, which caused extensive damage to the 21 kV power lines and
communication circuits at the NCPA geothermal generation facility in September. Those receiving
recognition were: CJ Berry, Elton Lamborn, Ryan Mahler, Jeff Norwood, Kyle Peterson,
Ross Phillips, Alvaro Ramirez, Rich Willett, Jason Willeford, Danny Souza, Adrian Solis,
Jason Smith, and Brent Sirkel.
In response to Council Member Nakanishi, Mr. Howard stated NCPA has insurance and
accounted for all of the cities' costs and efforts, which is being submitted to the Federal
Emergency Management Agency for reimbursement. Because of the quick response and how the
work was coordinated, the NCPA facility was out of operation for only two days.
Council expressed its appreciation to the crew members and to NCPA for taking the time to
recognize everyone who worked to get this power line back in operation so quickly.
B-2 First Quarter Fiscal Year 2015/16 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Deputy Public Works Director Charlie Swimley provided a PowerPoint presentation regarding the
quarterly update of the water and wastewater utilities. Specific topics of discussion included
wastewater fund cash flow summary, wastewater operating results, wastewater funds cash
balances, water fund cash flow summary, water operating results, water funds cash balances,
bad debt write off, and water/wastewater utility activities.
In response to Council Member Kuehne, Mr. Swimely confirmed the 162 percent cash on hand is
more than the 90 -day target, and City Manager Schwabauer added both utilities have planned
capital projects and future debt retirement and the surplus is not excessive for those reasons.
Deputy City Manager Jordan Ayers added a higher reserve is more favorable when it comes to
the rating agencies. Mr. Ayers explained each rating class has three ratings -- minus, neutral, and
plus -- and the wastewater utility is currently rated at AA, which is a positive rating
Mayor Johnson questioned if continually seeking the next highest rating percentile becomes
counterproductive at some point and asked staff to look into what savings the City would
realistically see when it comes to refinancing.
In response to Council Member Kuehne, Mr. Schwabauer stated the City has two agreements
relating to water supply: one with Woodbridge Irrigation District (WID) for the main supply; and
the other with North San Joaquin Water Conservation District (NSJWCD) for the purchase of
water in years that NSJWCD has water allocations. Mr. Schwabauer stated the City is using all of
the water that WID allocates and no water has been purchased from NSJWCD since the
agreement was made because it has not had water allocations. WID allocates 6,000 acre feet of
water, which the City continues to pay for and bank for later use, and the City can purchase
another 1,000 acre feet from NSJWCD when it is available. In response to Council Member
Kuehne, Mr. Swimley stated over 40,000 acre feet of water is banked with WID, and Mr.
Schwabauer stated the City currently uses 12,000, which leaves four to five years of banked
water for future use. The City has 10 to 20 years after the expiration of the agreement to draw
down water, after which the City can no longer purchase water. Mr. Schwabauer confirmed the
City has not lost a drop of the WID water. Lodi began purchasing water from WID in 2003, but the
City did not construct the water treatment plant until 2012, and the banked water supply built up
during the time it took for the City to decide how to apply the water.
In response to Council Member Nakanishi, Mr. Schwabauer stated prior to the WID water, the
City was using well water and drawing down the water table each year; therefore, Council made
the decision to ensure a sustainable water supply, which took Council a significant amount of time
to finalize.
In response to Council Member Kuehne, Mr. Schwabauer stated he believed the price of $200
per acre foot from WID is a good deal. The reasons for the lower price of $100 per acre foot from
NSJWCD are that the water is not from a reliable supply; NSJWCD has been unable to utilize its
water for most of its existence and cannot draw down its 20,000 acre feet; and the Board was
threatening to take away its water rights. The City took advantage of the situation and negotiated
a favorable purchase price in this agreement.
In response to Council Member Nakanishi, Mr. Schwabauer stated the City did not need the
water for supply purposes, but it was necessary to ensure the water supply was sustainable. The
$100 per acre foot is what it would cost the City to pump water from the ground, and this
agreement provides money to NSJWCD while placing no burden on Lodi's rate payers.
In response to Council Member Kuehne, Mr. Swimley stated the bad debt write off of 0.3 percent
of sales is a respectable number, adding it was previously higher. In response to Council Member
Kuehne, Mr. Ayers stated he would provide Council with comparison figures against other
communities on bad debt write off.
Electric Utility Director Elizabeth Kirkley provided a PowerPoint presentation regarding the
quarterly update of the Electric Utility Department (EUD). Specific topics of discussion included
electric utility fund cash flow summary, electric utility reserve policy, electric utility funds cash
balances, power sales, energy cost adjustment revenue, electric utility fund operating results,
power supply costs, bad debt write off, load coverage, and electric utility activities.
In response to Council Member Kuehne, Mr. Ayers stated the rating for the electric utility fund is
A-, which is better than the rating from a decade ago when it was BBB. Mr. Ayers stated Council
has not weighed in on a desired range for this fund, but as a member of Northern California
Power Agency (NCPA), Lodi's rating has an impact on NCPA financing and is considered in any
project. Improvement in a rating can be shown through consistency -- increases in revenues,
reserves, and cash balances -- and what Council does with the rates.
In response to Council Member Nakanishi, Ms. Kirkley stated she was unsure of PG&E's
structure and how it handles reserves. Mr. Schwabauer stated PG&E is regulated by the Public
2
Utilities Commission and is likely required to have a reserve in place
In response to Mayor Johnson, Ms. Kirkley stated following the bid process for the new substation
transformer, staff will have a better feel for whether or not the $1 million contingency reserve is
adequate or not.
In response to Mayor Johnson, Mr. Ayers stated NCPA financing experts have indicated they
would like to see Lodi's rating raised to a higher level.
In response to Council Member Kuehne, Ms. Kirkley stated the solar surcharge fund is revenue
collected from customers to fund solar rebates, it is a separate line item on the bill, and it is based
on Council direction in response to the solar mandate. Throughout the calendar year, the fund is
depleted in rebate form to customers with approved solar interconnection agreements.
In response to Council Member Kuehne, Ms. Kirkley stated there are 48 budgeted personnel in
EUD.
In response to Council Member Nakanishi, Ms. Kirkley stated the ten-year forecast from NCPA
includes Lodi's share in generation projects, as well as future power contracts and projections
based on load forecast.
Council Member Kuehne stated salaries appear to be significant in the EUD, to which Ms. Kirkley
stated much of the salary costs are in benefits and overtime. Mr. Schwabauer added lineworkers
make roughly $100,000 a year in salary and is typically a high -paid group of employees, mostly
because this class is driven by overtime. In comparison, Roseville and SMUD lineworkers make
$300,000 to $350,000, which is much higher than Lodi.
In response to Council Member Kuehne, Mr. Ayers stated NCPA collects comparison data on bad
debt write off and Lodi is in the middle range.
Engineering & Operations Manager Jay Marchesseault reported in August Council approved
retrofitting the Cobra street lights throughout the City, the audit is complete, and the project will
commence in the southeast corner of town, working north and west. The map is posted on the
City's website, and rate payers were notified of the project in the latest bill insert. He estimated
the project will take two months to complete and will upgrade 5,465 street lights. Ms. Kirkley
added the next project will be the retrofit of the decorative street lights.
In response to Council Member Kuehne, Mr. Swimley stated the downtown uplights should
commence around December 4.
Business Manager Adam Brucker reported the residential energy audit program has provided
assistance to 35 homes, installed hundreds of electric and water savings measures, and has
received positive feedback. He stated customers are excited about the direct install measures,
and he expects to see another 35 to 40 customers in December. The approved budget for the
solar program in the upcoming year is $550,000. Mr. Brucker reported the application period will
begin in January and there is typically more interest than there are funds, in which case the funds
are distributed via lottery drawing. Funding is capped at a maximum of $7,000 for residential solar
and $40,000 for commercial. Last year, there were four commercial rebate applications, with only
three ultimately installing a system. He anticipates five applications in the coming year; therefore,
$200,000 of the funding has been set aside for commercial rebates with the remainder available
to residential customers. Mr. Brucker stated there is flexibility in the funding if there is not enough
interest in the commercial rebate.
In response to Council Member Nakanishi, Mr. Brucker stated interested parties first submit an
application along with information on the proposed system for installation. Once the rebate is
approved, the applicant can move forward with the permitting process and installation, followed
by the rebate request. He stated some ultimately choose not to move forward with the solar
project.
In response to Mayor Pro Tempore Chandler, Rates & Resources Manager Melissa Price stated
a majority of the applicants were funded and estimated roughly 20 people were unable to
participate in the program.
Council Member Kuehne stated the maximum of $7,000 per applicant seems high, adding Lodi's
cap is $2,000 to $3,000 more than surrounding communities. He suggested reducing the cap to
$5,000 in order to greater disburse the funding. Mr. Brucker agreed the cap is a more generous
rebate than others and pointed out not every customer receives the full rebate amount because it
ultimately depends on the output and size of the system. In further response, Mr. Brucker stated
solar customers are also eligible for a Federal tax credit, but the City does not provide advice to
customers on that program.
In response to Council Member Kuehne, Mr. Schwabauer stated solar systems can operate
under a net- or co -metering system. Net -metering, which is required on homes, is when kilowatt
production is netted against kilowatt usage; however, this method does not allow EUD to recover
its full cost of infrastructure and maintenance. There are ways to address the issue, such as how
much the City will pay for excess power, which is decided by Council. Co -metering is possible for
commercial customers and solar customers over 10 kilowatts. Ms. Kirkley added the
specifications were amended to require all installations beginning October 1 to "grid tie" using two
meters: one to register load and one to register solar generation. She stated she hopes future
legislation will allow solar generation to meet renewable portfolio standards requirements. Mr.
Schwabauer stated Lodi is ahead of the curve and, as more solar customers come online, there
will be a strong impetus to end the subsidization of solar and allow for co -metering.
Council Member Kuehne questioned what the process is to reduce the maximum rebate amount
from $7,000 to $5,000, to which Mr. Schwabauer replied staff will analyze the issue and research
what other communities are doing. Council Member Kuehne stated he would like to see this
amendment in place before the program kicks off for the next fiscal year. Mr. Brucker stated in
order to do so, an item would need to come before Council prior to the January application
period.
In response to Mayor Pro Tempore Chandler, Mr. Schwabauer stated the City offered a light
emitting diode Christmas light replacement program five years ago, and Mr. Brucker added the
program can be considered again.
Mr. Brucker further reported staff is researching the use of social media to connect better with
customers. Some communities utilize FaceBook and Twitter to enhance service, which requires
significant staff time. Staff realizes the value in disseminating information quickly to customers
and at this time is moving forward with an Electric Utility FaceBook page.
Mayor Johnson requested staff explore the possibility of hiring a permanent or contract employee
to work with all City departments on social media, stating it would likely save money in the long
run. Council Member Kuehne agreed with the suggestion.
C. Comments by Public on Non-Aaenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:23 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
0
AGENDA ITEM
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Northern California Power Agency Presentation
MEETING DATE: December 1, 2015
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: The Northern California Power Agency will present Certificates of
Appreciation to the Lodi Electric Utility line crews.
BACKGROUND INFORMATION: The Valley Fire caused extensive damage to the 21 kV power lines
and communication circuits at the Northern California Power
Agency's (NCPA) geothermal generation facility in September.
Lodi Electric Utility crews, along with other NCPA members, assisted with the restoration efforts. NCPA
General Manager Randy Howard and Assistant General Manager Ken Speer will be in attendance to
make the presentations.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
Elizabeth A. Kirkley
Electric Utility Director
APPROVED: ',.
Sch er, City Manager
GEYSERS EMERGENCY
RESTORATION
Emergency Reconstruction of Effluent 21 kV Power Line
Valley Fire Summary
• Started September 12, 2015
• Cause Under Investigation
• 76,067 acres burned
• A total of 1,958 structures destroyed
• 1,280 homes
• 27 multi -family units
• 66 Commercial properties
• 585 other minor homes
• Roughly 17,000 people evacuated
• 20 NCPA employees evacuated (--50% of N
staff)
CPA Geyser's
• Four NCPA employees lost their homes, 1 had a partial
loss.
Damage to NCPA Facilities
• 21 kV system powering effluent pipeline destroyed.
• Lake County depends on pipeline to dispose of treated effluent
from all Lake County Sewer Plants.
• Roughly 14 days of storage available, requiring a quick
restoration of pumping.
• Roughly 50 poles jointly owned by NCPA/Calpine burned.
• Fiber-optic cable providing communication and control to
pump stations.
• Minor Insulation Damage to Steam Field Piping.
• Power conduit and cable to one of the well pads.
• Lost all AT&T telecommunications circuits out of Geysers.
CPA NORTHERN CALIFORNIA POWER AGENCY
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21 kV Power Line Restoration
• Monday (9/14) - NCPA contacted Calpine offering to take lead
on 21 kv restoration.
• Wednesday (9/16) - Plumas Sierra installed Satellite
Communications restoring communications with CAISO.
• Wednesday (9/16) —Todd Woolman on site accessing damage,
developing material list, and repair plan.
• Thursday (9/17) - Calpine concurred to let NCPA take lead on
21 kv restoration.
• Friday (9/18) — NCPA Commission held special meeting
declaring emergency.
• Friday -Monday (9/18-21) - Healdsburg brinks Davey Tree
onsite clearing trees an preparing for repairs.
• Wednesday -Monday (9/23-28) —10 Line Crews on site
performing repairs.
• Wednesday (9/30) -Cellular Communications between pump
houses installed and pipeline back in service.
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the restoration;
members included
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Roseville, and Redding.
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lodging and meals.
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AGENDA ITEM do
&JL% CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: First Quarter Fiscal Year 2015/16 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: December 1, 2015
PREPARED BY: Deputy City Manager
2
RECOMMENDED ACTION: Receive utility financial reports for the first quarter of Fiscal Year
2015/16.
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 1, 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.
FUNDING AVAILABLE: Not applicable.
Jordan Ayers
Deputy City Manager
W—AL -.W. jSt..�.
Public Works Department
Water/Wastewater
IFY 16 Quarterly Update
(Ending September 30, 2015)
City Council Shirtsleeve Session
December 1, 2015
Wastewater Fund
Cash Flow Summary
(Ending September 30, 2015)
Sales
Budget
14,977,300
Actuals
3,641,649
% of Budget
24%
Development Impact Mitigation Fees (wastewater & storm)
297,050
89,463
30%
Other (interest, septic, misc.)
209,990
64,837
31%
Total Revenues
M
Operating
15,484,340
7,041,550
3,795,949
1,202,110
25%
I
17%
Capital
6,201,410
418,282
7%
Debt Service
3,679,130
2,563,375
70%
Cost of Services Payment To General Fund
1,068,000
267,000
25%
Total Expenses
17,990,090
4,450,767
25%
Beginning Cash (Operations Only)
5,574,685
Ending Cash (Operations Only)
6,534,641
Days Cash (Excluding Capital)
146
% of Target
162%
Wastewater
Operating Results
(Ending September 30, 2015)
Personnel
$
3,498,010
$
672,756
19%
Supplies, Materials, Services
$
2,062,550
$
225,891
11%
Equipment, Land, Structures
$
447,500
$
1,826
0%
Other Payments
$
302,110
$
146,624
49%
Utilities
$
723,880
$
155,013
21%
Work for Others
$
7,500
$
-
0%
Total Operating Expenses
$
7,041,550
$
1,202,110
17%
3
Wastewater Funds
Cash Balances
(Ending September 30, 2015)
E
Operating (530)
I
6,534,641
Utility Capital / Infrastructure Replacement (531)
6,039,558
Capital Reserve (532)
(Fund used to pay White Slough COP Debt Service)
(1,485,838)
Wastewater IMF (533)
24,209
Rate Stabilization Reserve (534)
500,000
Storm Drain IMF (535)
792,608
Total
12,405,178
M
Water Fund
Cash Flow Summary
(Ending September 30, 2015)
Sales
Budget
13,362,400
Actuals
3,533,925
% of Budget
26%
Development Impact Mitigation Fees
202,630
70,568
35%
Other (interest, tap fees, water meters, misc.)
992,100
389,441
42%
Total Revenues
im 0
Operating
14,557,130
6,408,790
3,993,934
1,331,796
27%
1
21%
Capital
4,637,914
972,370
21%
Debt Service
2,968,610
0
0%
Cost of Services Payment To General Fund
780,000
195,000
25%
Total Expenses
14,795,314
2,499,166
17%
Beginning Cash (Operations Only)
5,972,949
Ending Cash (Operations Only)
7,850,321
Days Cash (Excluding Capital)
463
% of Target
514%
5
Water
Operating Results
(Ending September 30, 2015)
Personnel
$
2,470,280
$
581,705
24%
Supplies, Materials, Services
$
1,521,450
$
243,935
16%
Equipment, Land, Structures
$
122,000
$
10,334
8%
Other Payments
$
1,479,560
$
341,762
23%
Utilities
$
706,650
$
154,060
22%
Work for Others
$
108,850
$
-
0%
Total Operating Expenses
$
6,408,790
1 $
1,331,796
1 21
0
Water Funds
Cash Balances
(Ending September 30, 2015)
7
Bad Debt Write Off
(Through September 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 September 30, 2015)
City Council Shirtsleeve Session
December 1, 2015
Electric Utility Fund
Cash Flow Summary
(Ending September 30, 2015)
Net Increase (Decrease)
Budget
Actuals
% of Budget
Sales Revenues
68,406,500
21,680,062
32%
Development Impact Fees
126,620
33,230
26%
Other Revenues (interest, misc)
7,653,660
5,128,190
67%
Total Revenues
76,186,780
26,841,482
35%
Purchase Power
40,511,240
10,494,882
26%
Non Power
16,502,730
5,432,969
33%
Capital Projects
4,535,470
171,581
4%
Debt Service
8,158,280
6,818,217
84%
Cost of Service/transfer to GF Capital
2,104,000
526,000
25%
In -lieu Transfer to General Fund
7,082,070
1,770,518
25%
Total Expenses
78,893,790
25,214,167
32%
Net Chg in Bal Sheet Accts
1 (1,904,814)
Net Increase (Decrease)
(2,707,010)
(277,499)
Beginning Local Cash Balance
13,065,403
13,065,403
Ending Local Cash Balance
10,358,393
12,787,904
GOR Balance
10,274,953
Total Reserve Balance
23,062,857
Reserve Policy Target
23,155,000
of Target
99.6%
2
Electric Utility Reserve Policy
(Ending September 30, 2015)
Operating Reserve
90 Days Cash
$ 17,776,000
$ 12,787,904
Capital Reserve
Largest Distribution System Contingency
$ 1,000,000
NCPA General Operating Reserve
NCPA Identified Items
$ 4,379,000
$ 7,032,576
NCPA MPP/GPP Balance
MPP/GPP Security Commitments
$ 3,242,377
Total Target
$ 23,155,000
$ 23,062,857
3
Electric Utility Funds
Cash Balances
(Ending September 30, 2015)
Operating (500)
$
914449900
Utility Outlay Reserve Fund (501)
$
(3,9061365)
Electric Rate Stability Reserve (502)
$
0
Public Benefits Fund (504)
$
110009263
IMF EU Substation and Transmission (505)
$
910,192
Solar Surcharge Fund (506)
$
227,755
Environmental Compliance (508)
$
5,111,158
NCPA — General Operating Reserve (GOR)
$
1052745953
Total
$
231062,857
El
Power Sales
(Ending September 30, 2015)
Residential
156,193,116
50,351,981
Small Commercial
158,882,854
47,101,304
Large Commercial/Small Industrial
43,630,792
12,922,928
Industrial
84,113,304
25,534,393
TOTAL
442,820,066
135,910,606
Residential
$ 28,115,151
$
8,976,126
M$O.1783
Small Commercial
$ 26,507,615
$
7,999,013
$ 0.1698
Large Commercial/Small Industrial
$ 5,996,382
$
1,946,644
$ 0.1506
Industrial
$ 7,787,352
$
2,758,279
$ 0.1080
TOTAL
$ 68,406,500
$ 21,680,062
$ 0.1595
5
ECA Revenue
(Ending September 30, 2015)
Residential
$
(204,936)
$
(204,936)
Small Commercial
$
(211,688)
$
(211,688)
Large Commercial/Small Industrial
$
(55,724)
$
(55,724)
Industrial
$
(58,184)
$
(58,184)
Total ECA Revenue
$
(530,532)
$
(530,532)
0
Electric Utility Fund
Operating Results
(Ending September 30, 2015)
Personnel
$
7,683,990
$
1,367,576
18%
Supplies, Materials, Services
$
3,694,420
$
341,638
9%
Equipment, Land, Structures
$
221,000
$
28,745
13%
Other Payments
$
4,856,310
$
3,685,424
76%
Utilities
$
47,010
$
9,586
20%
Total Operating Expenses
$
16,502,730
$
5,432,969
33%
7
Power Supply Costs
(Ending September 30, 2015)
Generation
$
301606,344
$
79258,074
24%
Transmission
$
8,576,540
$
2,898,645
34%
Management Services
$
1,328,356
$
338,163
25%
Total Power Supply Costs
$
401511,240
$
10,494,882
1 26%
Bad Debt Write Off
(Ending September 30, 2015)
9
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Q1-2016 Q2-2016 Q3-2016 Q4-2016
=Coverage
=Target
Load
Load coverage meets/exceeds Risk Policy targets in all quarters. 10
Electric Utility Activities
• Staffing
• LED Street Light Project
• LEU Organizational Checkup / Strategic Planning
• Customer Programs
— Residential Energy Audit/ Direct -install Program
— 2016 Solar Program
— Social Media
11