HomeMy WebLinkAboutMinutes - August 23, 2016 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, AUGUST 23, 2016
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, August 23, 2016, commencing at 7:05 a.m.
Present: Council Member Johnson, Council Member Mounce, Council Member Nakanishi,
Mayor Pro Tempore Kuehne, and Mayor Chandler
Absent: None
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
B. Topic(s)
B-1 Fourth Quarter Fiscal Year 2015/16 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Utilities Superintendent Lance Roberts provided a PowerPoint presentation on Water/Wastewater
quarterly update. 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 Johnson, Mr. Roberts stated that the corrosion repair project is to
repair the concrete with a coating because it degrades over time due to the harsh environment.
In response to Mayor Pro Tempore Kuehne, Deputy City Manager Jordan Ayers stated that the
collection on bad debts is handled both internally and externally: staff handles the internal
collection process with three attempts at collection over a 90 -day period; if unsuccessful, the
account is turned over to an outside collection agency. Mr. Ayers stated the City gets 15 to
20 cents on the dollar for the collection agency, which is typical. Further, Mr. Ayers stated that
collection guidelines and state law requires that, if a customer returns for service, they are
required to pay the full past -due amount or make payment terms before starting up new service.
The collection agency charges penalties, but the City does not; it collects the principle amount
and the 30 percent collection fee to which the collection agency is entitled.
Rates & Resources Manager Melissa Price provided a PowerPoint presentation on Electric Utility
Department quarterly update. Specific topics of discussion included Electric Utility (EU) Fund
cash flow summary, EU reserve policy, EU funds cash balances, power sales, energy cost
adjustment (ECA) revenue, EU Fund operating results, power supply costs, bad debt write off,
and load coverage.
In response to Council Member Johnson, Business Development Manager Adam Brucker
responded that staff will return to Council for authority to add additional funding for the Direct
Install and Energy Audit Programs as the entire $200,000 budget has been exhausted. In
addition, a new program will be proposed, similar to a past offering, that would provide licensed
contractors to perform complete evaluations of customers' homes and recommend and
implement measures should customers be interested. The program will likely have a significant
cost, and staff is currently researching programs from other utilities. Staff will also be proposing
recommendations to reach out to more customers, especially those with older homes that need
weatherization and other upgrades to make their homes more efficient. The difficulty lies with
rental properties because the typical renter is not interested in making improvements to a
residence they do not own and there is reluctance on the part of the property owner to make the
1
investment in these properties because they do not pay the utility bill. In response to Council
Member Johnson, Mr. Brucker stated he would research the percentage of rentals that make up
the target market. Council Member Johnson questioned how the issue of rental properties and
the lack of interest on the part of the tenant and property owner to make improvements can be
addressed successfully, adding that perhaps it would be prudent to switch focus to another area.
Mr. Brucker stated that some communities have made attempts with this customer base by
completely funding improvements because rebate programs still require an investment on the
part of the tenant and/or property owner.
Council Member Mounce believed that property owners being told the value of their home will
increase and that they will receive a rebate is a selling point.
In response to Council Member Nakanishi, Mr. Brucker confirmed that the total public benefits
fund is $1.8 million, and Ms. Price stated the $600,000 shown is the cash balance. Mr. Brucker
pointed out that the solar rebate program is operated on a calendar year basis and the funds are
allocated at the beginning of the year; however, the dollars are budgeted on a fiscal year basis.
The desire is to have a significant balance to carry forward projects as they occur. Further,
Mr. Brucker stated that next year is the last year of the ten-year solar rebate program unless the
Legislature decides to continue the program. There has been little discussion in the Legislature
on the solar rebate program and greater discussion relating to net metering and 2.0 legislation.
Ms. Price stated she would not be surprised if the solar surcharge issue pops up again in the near
future. Mr. Brucker stated staff will return in October to discuss the solar rebate program, how the
waiting list worked out this year, and what position the City will be in next year with the program.
In response to Council Member Nakanishi, Ms. Price stated the amount collected from the ECA is
a rolling calculation and could never be a "zero" figure. City Manager Schwabauer further
explained that the ECA is a calculation of what staff projects power will cost over the year and
any spikes in the amount are calculated back into the rate on a monthly basis, whether it is an
increase or decrease. On average over the course of a year, the ECA is typically a plus amount
on the bill. Further, Mr. Schwabauer responded that the reserve amount was established by
Council policy, which states the City should have 90 days reserve on hand, but he stated it is
slightly higher because capital projects have been delayed due to staffing issues.
Electric Utility Director Elizabeth Kirkley provided a PowerPoint presentation on EU's activities.
In response to Council Member Johnson, Ms. Kirkley stated she will research and provide
Council with information on the status of the underground wiring project on Timberlake Circle.
In response to Mayor Pro Tempore Kuehne, Ms. Kirkley stated EU has three vacant lineworker
positions, and Mr. Ayers stated that salary and benefits for a lineworker is $160,000 to $180,000.
Ms. Kirkley stated there are also vacant positions for the senior electrical engineering technician
and apprentices, and those salary ranges, with benefits, are slightly below the lineworker
positions. Mr. Schwabauer pointed out that Slide 7 of the PowerPoint references a $600,000
savings in salaries.
In response to Council Member Nakanishi, Ms. Kirkley stated that current law requires utilities be
at a 50 percent renewable energy level by 2030 and staff is working to add additional renewables
to meet the requirement.
In response to Mayor Pro Tempore Kuehne, Ms. Kirkley stated Lodi is currently at a 21 percent
renewable energy level.
Council Member Nakanishi questioned if staff can anticipate how much electricity will cost at that
time, to which Ms. Kirkley responded that current solar prices have dipped to just under
40 megawatts an hour, however, there is no way to estimate if the cost will continue to decrease
into the future or plateau.
Myrna Wetzel expressed opposition to the Legislature continuing the solar rebate program
because it is unfair to require people who cannot afford to purchase solar systems to subsidize
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those who can.
Mike Lusk questioned if the corrosion repair was for White Slough and the tanks or if it included
the supply line from Lodi to White Slough, to which Mr. Schwabauer responded that the repairs
were to the channels that carry the primary and secondary waste at the White Slough plant. In
further response, Mr. Schwabauer stated that the City is not currently providing secondary
recycled water supply lines back to the City because it is an expensive project; however, the City
is requiring new developments to install purple pipe in its infrastructure to accommodate recycled
water in the future if the City moves in that direction. Mr. Lusk questioned if older homes are
required to bring standards up to current code levels when making energy efficiency
improvements such as replacing old wiring. Mr. Schwabauer replied in the affirmative, adding that
this is part of the problem in making older homes more energy efficient because the cost to
completely replace wiring or insulation can be too significant for some homeowners.
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 7:49 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
3
TM
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE:
MEETING DATE:
PREPARED BY:
AGENDA ITEM
Fourth Quarter Fiscal Year 2015/16 Water, Wastewater and Electric Utility
Department Financial Reports
August 23, 2016
Deputy City Manager
RECOMMENDED ACTION: Receive utility financial reports for the fourth 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 August 23, 2016. 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.
APPROVED:
Jordan Ayers
Deputy City Manager
Stephen c wa
suer, bity-Manager
Public Works Department
Water/Wastewater
FY 16 Quarterly Update
(Ending June 30, 2016)
City Council Shirtsleeve Session
August 23, 2016
1
Wastewater Fund
Cash Flow Summary
(Ending June 30, 2016)
2
Budget
Actuals
% of Budget
Revenue
Sales
14,977,300
14,909,757
100%
Development Impact Mitigation Fees (wastewater & storm)
297,050
261,247
88%
Other (interest, septic, misc.)
1,152,580
1,347,011
117%
Total Revenues
16,426,930
16,518,015
101%
Expenses
Operating
7,447,870
6,598,042
89%
Capital
7,196,515
2,877,217
40%
Debt Service
4,098,004
4,097,612
100%
Cost of Services Payment To General Fund
1,068,000
1,068,000
100%
Total Expenses
19,810,389
14,640,871
74%
Beginning Cash (Operations Only)
9,363,668
Ending Cash (Operations Only)
9,668,400
Days Cash (Excluding Capital)
293
% of Target
326%
2
Wastewater
Operating Results
(Ending June 30, 2016)
3
Budget
Actuals
% of Budget
Personnel
$ 3,804,330
$ 3,536,647
93%
Supplies, Materials, Services
$ 2,162,550
$ 1,688,012
78%
Equipment, Land, Structures
$ 447,500
$ 387,948
87%
Other Payments
$ 302,110
$ 287,251
95%
Utilities
$ 723,880
$ 690,685
95%
Work for Others
$ 7,500
$ 7,500
100%
Total Operating Expenses
$ 7,447,870
$ 6,598,042
89%
3
Wastewater Funds
Cash Balances
(Ending June 30, 2016)
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Days Cash (Operating)
237%
326%
206%
122%
12/13 13/14 14/15 15/16
Target
Actual
4
Operating (530)
9,668,400
Utility Capital / Infrastructure Replacement (531)
4,368,061
Capital Reserve (532) (Fund used to pay White Slough COP Debt Service)
(1,195)
Wastewater IMF (533)
60,498
Rate Stabilization Reserve (534)
500,000
Storm Drain IMF (535)
879,573
Total
15,421,337
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Days Cash (Operating)
237%
326%
206%
122%
12/13 13/14 14/15 15/16
Target
Actual
4
Water Fund
Cash Flow Summary
(Ending June 30, 2016)
5
Budget
Actuals
% of Budget
Revenue
Sales
13,362,400
12,161,186
91%
Development Impact Mitigation Fees
202,630
165,098
81%
Other (interest, tap fees, water meters, misc.)
992,100
1,295,724
131
Total Revenues
14,557,130
13,622,008
94%
Expenses
Operating
6,573,374
5,994,621
91%
Capital
10,250,033
4,838,214
47%
Debt Service
2,968,610
2,968,091
100%
Cost of Services Payment To General Fund
780,000
780,000
100%
Total Expenses
20,572,017
14,580,926
71%
Beginning Cash (Operations Only)
9,577,506
Ending Cash (Operations Only)
5,713,096
Days Cash (Excluding Capital)
214
% of Target
238%
5
Water
Operating Results
(Ending June 30, 2016)
6
Budget
Actuals
% of Budget
Personnel
$ 2,634,864
$ 2,659,025
101%
Supplies, Materials, Services
$ 1,521,450
$ 1,268,747
83%
Equipment, Land, Structures
$ 122,000
$ 44,651
37%
Other Payments
$ 1,479,560
$ 1,417,371
96%
Utilities
$ 706,650
$ 495,976
70%
Work for Others
$ 108,850
$ 108,850
100%
Total Operating Expenses
$ 6,573,374
$ 5,994,621
91%
6
Water Funds
Cash Balances
(Ending June 30, 2016)
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0 1
354%
Days Cash (Operating)
277%
264%
238%
AAA
12/13 13/14 14/15 15/16
Target
Actual
7
Operating (560)
5,713,096
Utility Capital / Infrastructure Replacement (561)
198,000
IMF (562)
331,135
PCE/TCE Settlements
10,110,268
PCE/TCE Rates (565)
4,161,038
Total
20,513,537
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0 1
354%
Days Cash (Operating)
277%
264%
238%
AAA
12/13 13/14 14/15 15/16
Target
Actual
7
Bad Debt Write Off
(Through June 30, 2016)
8
# Of Accounts
Amount
% of Sales
Wastewater
689
$46,664
0.3%
Water
689
$42,306
0.3%
8
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
FY 16 Quarterly Update
(Ending June 30, 2016)
City Council Shirtsleeve Session
August 23, 2016
1
Electric Utility Fund
Cash Flow Summary
(Ending June 30, 2016)
Net Increase (Decrease)
Beginning Local Cash Balance
Budget
Actuals
% of Budget
Revenue
16,139,395
GOR Balance
Sales Revenues
68,406,500
67,507,179
99%
Development Impact Fees
126,620
155,680
123%
Other Revenues (interest, misc)
4,153,660
4,607,842
111%
Total Revenues
72,686,780
72,270,701
99%
Expenses
Purchase Power
40,511,242
38,632,485
95%
Non Power
12,927,728
10,815,468
84%
Capital Projects
5,401,070
3,559,155
66%
Debt Service
8,393,280
8,168,594
97%
Cost of Service/Capital Xfer
2,354,000
2,354,000
100%
In -lieu Transfer to General Fund
7,082,070
7,082,070
100%
Total Expenses
76,669,390
70,611,772
92%
Net Chg in Bal Sheet Accts
1,415,063
Net Increase (Decrease)
Beginning Local Cash Balance
(3,982,610)
13,065,403
3,073,992
13,065,403
Ending Local Cash Balance
9,082,793
16,139,395
GOR Balance
10,797,179
Total Reserve Balance
26,936,574
Reserve Policy Target
23,155,000
% of Target
116%
2
Electric Utility Reserve Policy
(Ending June 30, 2016)
Purpose
Basis
Target
Actual
Operating Reserve
90 Days Cash
$ 17,776,000
$ 15,889,395
Capital Reserve
Largest Distribution System Contingency
$ 1,000,000
$ 250,000
NCPA General Operating Reserve
NCPA Identified Items
$ 4,379,000
$ 7,829,843
NCPA MPP/GPP Balance
MPP/GPP Security Commitments
$ 2,967,336
Total Target
$ 23,155,000
$ 26,936,574
$30,000
$25,000
$20,000
N
v
c $15,000
$10,000
$5,000
Actual Reserves vs. Target
90%
95%
9B%
116%
FY 12/13 FY 13/14 FY 14/15 FY 15/16
■ Actual
❑ Target
3
Electric Utility Funds
Cash Balances
(Ending June 30, 2016)
4
Operating (500)
$ 13,972,023
Utility Outlay Reserve Fund (501)
$ (6,523,948)
Public Benefits Fund (504)
$ 1,129,189
IMF EU Substation and Transmission (505)
$ 881,803
Solar Surcharge Fund (506)
$ 451,597
Environmental Compliance (508)
$ 6,228,731
NCPA— General Operating Reserve (GOR)
$ 10,797,179
Total
$ 26,936,574
4
Power Sales
(Ending June 30, 2016)
Power Sales (kWh)
Customer Class
Budget
Actual
Residential
156,193,116
151,137,940
Small Commercial
158,882,854
161,089,550
Large Commercial/Small Industrial
43,630,792
44,253,563
Industrial
84,113,304
80,765,282
TOTAL
442,820,066
437,246,335
Revenue ($)
Customer Class
Budget
Actual
Average Rate
Residential
$ 28,115,151
$ 26,525,558
$ 0.1755
Small Commercial
$ 26,507,615
$ 26,512,230
$ 0.1646
Large Commercial/Small Industrial
$ 5,996,382
$ 6,293,704
$ 0.1422
Industrial
$ 7,787,352
$ 8,175,687
$ 0.1012
TOTAL
$ 68,406,500
$ 67,507,179
$ 0.1544
5
ECA Revenue
(Ending June 30, 2016)
Customer Class
Q1
Q2
Q3
Q4
Total
Residential
$ (204,936)
$ 572,700
$ 333,828
$ 51,748
$ 753,340
Small Commercial
$ (211,688)
$ 628,590
$ 343,726
$ 63,953
$ 824,581
Large Commercial /
Small Industrial
$ (55,724)
$ 178,043
$ 100,397
$ 27,598
$ 250,314
Industrial
$ (58,184)
$ 298,607
$ 152,945
$ 20,527
$ 413,895
Total ECA Revenue
$ (530,532)
$ 1,677,940
$ 930,896
$ 163,826
$ 2,242,130
6
Electric Utility Fund
Operating Results
(Ending June 30, 2016)
7
FY16 Budget
FY16 Actual
% of Budget
Personnel
$ 7,683,990
$ 7,053,685
92%
Supplies, Materials, Services
$ 3,291,920
$ 2,198,036
67%
Equipment, Land, Structures
$ 146,000
$ 112,539
77%
Other Payments
$ 1,756,308
$ 1,392,205
79%
Utilities
$ 49,510
$ 59,003
119%
Total Operating Expenses
$ 12,927,728
$ 10,815,468
84%
7
Power Supply Costs
(Ending June 30, 2016)
8
Budgeted
Year to Date
% of Budget
Generation
$ 30,606,344
$ 29,333,337
96%
Transmission
$ 8,576,540
$ 7,938,468
93%
Management Services
$ 1,328,356
$ 1,360,680
102%
Total Power Supply Costs
$ 40,511,240
$ 38,632,485
95%
8
Bad Debt Write Off
(Ending June 30, 2016)
9
# of Accounts
Amount
% of Sales
Electric
689
$79,353
0.12%
9
Load Coverage
160,000
140,000
120,000
100,000
s
g 80,000
2
60,000
40,000
20,000
P -
Q4 -2016 Q1-2017 Q2-2017 Q3-2017
Coverage
Target
Load
10
MWh Load
ROC Matrix
Target
Load Coverage
(Including Purchases)
Q4 — 2016
102,173
80.0%
77.7%
Q1 — 2017
98,146
76.7%
64.7%
Q2 — 2017
111,182
66.7%
73.4%
Q3 — 2017
133,974
60.0%
65.4%
160,000
140,000
120,000
100,000
s
g 80,000
2
60,000
40,000
20,000
P -
Q4 -2016 Q1-2017 Q2-2017 Q3-2017
Coverage
Target
Load
10
Electric Utility Activities
• Safety
• Staffing
• Reliability
• Capital Improvement Program
• New Development
• Legislative & Regulatory
• Fiscal Health
• Customer Programs