HomeMy WebLinkAboutMinutes - May 13, 2014 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MAY 13, 2014
A Special Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was
held at the Lodi Public Library, 201 West Locust Street, Lodi, on Tuesday, May 13, 2014,
commencing at 7:00 a.m.
Present: Council Member Johnson, Council Member Nakanishi, Mayor Pro Tempore Hansen,
and Mayor Katzakian
Absent: Council Member Mounce
Also Present: Interim City Manager Schwabauer, Interim City Attorney Magdich, and City Clerk
Johl-Olson
Deputy City Manager Jordan Ayers provided a PowerPoint presentation regarding the Fiscal Year
2014/15 budget. Specific topics of discussion included an overview of the electric, water, and
wastewater utility funds, revenue, expenditures, capital projects, and reserves.
In response to Council Member Nakanishi, Mr. Ayers confirmed that the customer charges figure
has declined due to conservation.
In response to Council Member Johnson, Interim City Manager Schwabauer stated that the
proposed electrical engineer position is needed for the approximately five subdivisions that are
expected to build within the next few years and to handle the current technical workload of the
department.
In response to Mayor Pro Tempore Hansen, Electric Utility Rate and Resources Manager Melissa
Price stated there are currently two active recruitments for the line worker positions, the positions
are difficult to recruit for because the City has to compete with SMUD and other agencies, the
labor hall is available to pull from although the quality may not be what the City is specifically
looking for, and currently while overtime has not been utilized, capital projects and maintenance
has been reprioritized.
In response to Council Member Johnson, Mr. Schwabauer stated the current direct buried cable
in some of the subdivisions will be replaced with conduit, which has a longer life.
In response to Council Member Nakanishi, Ms. Price stated the power costs are higher due to the
transmission upgrade for increased capacity.
A brief discussion ensued between Council Member Nakanishi, Mayor Pro Tempore Hansen, and
Mr. Schwabauer regarding the revenue decreases expected in future years, the impact of new
development on power costs, and how other agencies are continuing to deal with enhanced
regulations and growing energy costs.
In response to Mayor Pro Tempore Hansen, Ms. Price confirmed that the street light retrofit
project will be discussed at a future meeting as part of the public benefits program discussion and
the bids for the project are due on June 5, 2014.
A. Roll call by City Clerk
B. Topic(s)
B-1 Receive Presentation Regarding Fiscal Year 2014/15 Budget (CM)
In response to Council Member Johnson, Ms. Price stated the Northern California Power Agency
(NCPA) identifies items for reserves for the City as a part its annual budget process.
In response to Mayor Pro Tempore Hansen, Mr. Ayers stated the NCPA general operating
reserve is similar to where it was at this time last year without any major variances.
In response to Council Member Johnson, Mr. Ayers stated the reserve amount for the utility ebbs
and flows not based upon what the actual debt service is but rather when that debt service is paid
from reserves and when the reserve builds itself back up. A brief discussion ensued amongst
Council Member Nakanishi and Mr. Schwabauer regarding how the reserve amount is affected by
debt payment and net revenue.
Electric Utility Rate and Resources Manager Melissa Price provided a PowerPoint presentation
regarding the electric utility quarterly update. Specific topics of discussion included cash flow
summary, reserve policy, cash balances, power sales, Energy Cost Adjustment (ECA) revenue,
operating results, power supply costs, billing statistics, bad debt write off, rolling load coverage,
and utility activities.
Public Works Director Wally Sandelin provided a PowerPoint presentation regarding the water
and wastewater utility quarterly update. Specific topics of discussion included cash flow summary,
operating results, cash balances, bad debt write off, and utility activities.
In response to Mayor Pro Tempore Hansen, Mr. Sandelin provided an overview of the duties and
responsibilities that will be assigned to the proposed watershed program coordinator position,
including coordinating water related discussions and activities with outside agencies and
conducting public outreach activities. Mr. Sandelin stated a specific skill set will be required for
the position.
In response to Council Member Johnson, Mr. Ayers stated the financial system upgrade will be
complete by August 1, 2016.
In response to Mayor Katzakian, Ms. Price confirmed that the open position is a reflection of the
load and there will not be a need to sell excess load.
In response to Mayor Pro Tempore Hansen, Ms. Price and Mr. Schwabauer stated that some
power costs will go up as a result of the decline in hydro availability, gas purchases are the
primary replacement for hydro purchases, the City's hydro portfolio is approximately 5% to 8%
and will therefore not be significantly impacted, and the ECA will capture power cost fluctuation
but not capital costs.
In response to Council Member Nakanishi, Mr. Schwabauer confirmed that the purchases are
made up to three years in advance consistent with the City's policy and NCPA's policy.
In response to Mayor Pro Tempore Hansen, Ms. Price stated the state mandated reports are
primarily handled by in-house staff although a consultant assists with greenhouse gas emission
compliance.
In response to Council Member Johnson, Mr. Sandelin stated the department will be proposing a
new position of Utilities Manager to replace the position previously held by Larry Parlin.
B-2 Third Quarter Fiscal Year 2013/14 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Ed Miller spoke in regard to his concerns about the staff report information being presented in a
manner that is not understandable by the public and the lack of data presented to support fee and
cost assertions.
John Slaughterback spoke in regard to his concerns about the reduction of developer impact
fees, adding to the number of City employees versus contracting services, and the lack of
information presented to the City Council and the public when decisions are made.
None.
No action was taken by the City Council. The meeting was adjourned at 8:30 a.m.
C. Comments by public on non-agenda items
D.Adjournment
ATTEST:
Randi Johl-Olson
City Clerk
Fiscal Year2014/15BudgetFiscal Year2014/15BudgetPresentationCity Council ShirtsleeveCity Council ShirtsleeveSessionMay13 2014May13,2014
OOverviewUtility Funds{Electric{Electric{Water{Wastewater{Wastewater2
OElectric Utility OverviewAudited Audited Estimated2011Ͳ12 2012Ͳ13 2013Ͳ14 2013Ͳ14 2014Ͳ15ElectricUtilityEnterpriseFundActuals Actuals Budget Actuals BudgetypggCashBalanceBeginningCashBalance* 5,032,1772,143,1907,166,4056,636,2006,351,191Revenues 65,646,11571,679,62271,127,99069,345,51068,217,050Expenditures 68,535,10267,186,61271,317,38169,630,51970,762,800NetDifference(RevenuesLessExpenditures) (2,888,987)4,493,010(189,391)(285,009)(2,545,750)CashBalanceEndingCashBalance* 2,143,1906,636,2006,977,0146,351,1913,805,4413*Localcash,excludingNCPAGeneralOperatingReserve(GOR)
Electric UtilityRevenues $2,910,940 lower than FY 2013/14 budgetg{Customer charges 2.5% lower than prior year budget - $1.6M loweryg{Work for Others - $1.3M lower4
Electric UtilityExpenses$234 900 lowerthan FYExpenses$234,900 lowerthan FY2013/14 budget{Position Changes{Position ChangesAdd Electrical Engineer ($171,123){Salary & benefits - $331,000 lower{Service/Materials/Supplies - $153,000 higher{Power costs - $359,000 higherCitl jt& i t$28 000{Capital projects& equipment -$28,000lower{Transfers & special payments-$331,0005{Transfers & special payments$331,000lower
CElectric Utility Capital ProjectsVehicles $165,000Overhead capital maintenance$750,000Overhead capital maintenance$750,000Underground capital maintenance $500,000Streetlight grounding & fusing$507,000gg g g$,Distribution capacity program $400,000ERP/CIS replacement $250,000p,250 kV Interconnection $250,000Substation capital maintenance $35,0006
Electric Utility ReservesPurpose Basis2014/15 TargetOtiR90 d h$17 080 000OperatingReserve90 days cash$17,080,000Capital ReserveLargest distribution system contingency $1,000,000NCPA General Operating Reserve NCPA identified Items $5,600,000Total Target $23,680,000Estimated FY 2014/15 Reserve$13,289,0007
Water UtilityAudited Audited Estimated2011Ͳ12 2012Ͳ13 2013Ͳ14 2013Ͳ14 2014Ͳ15ili i dWaterUtilityEnterpriseFundActuals Actuals Budget Actuals BudgetCashBalanceBeginningCashBalance 12,807,41212,465,35010,376,4359,044,6597,464,847Revenues 13,678,64814,894,80914,484,97015,040,23014,169,450Expenditures 14,020,71018,315,50023,040,78316,620,04212,185,130Net Difference (Revenues Less Expenditures)(342 062)(3 420 691)(8 555 813)(1 579 812)1984320NetDifference(RevenuesLessExpenditures)(342,062)(3,420,691)(8,555,813)(1,579,812)1,984,320CashBalanceEndingCashBalance 12,465,3509,044,6591,820,6227,464,8479,449,1678
Water UtilityTotal revenue reduction - $315,520{Revenue reduction associated with Water Meter Installation - $650,000{Service Charge revenue up 3.0% over 2013/14 budgeted revenue$376 0002013/14 budgeted revenue -$376,000{Includes $614,380 interest subsidy on the Build AmericaBondsBuild AmericaBonds9
Water UtilityTotal expense increase - $1.1MAddition of Watershed Program C di t iti ($53 900)Coordinator position($53,900){Cost shared with WastewaterService & supplies$355 000Service & supplies -$355,000Special payments - $194,000Capital projects$609 000Capital projects -$609,00010
Water UtilityCapital Projects{Water Meter Program ($325,000){Well Rehab/Replacements/Improvements ($1.4M)${ERP/CIS system replacement ($250,000){Various taps, mains and other projects ($100 000)($100,000){PCE/TCE projects ($660,000)11
Water Utility ReservesTarget is 25% of operating expensesTarget for FY2014/15equalsTarget for FY2014/15equals$2,593,000FY2014/15Estimated ReserveisFY2014/15Estimated Reserveis$9,449,00012
Wastewater Utility2011Ͳ12 2012Ͳ13 2013Ͳ14 2013Ͳ14 2014Ͳ15WastewaterUtilityEnterpriseFundActuals Actuals Budget Actuals BudgetypggCashBalanceBeginningCashBalance 10,606,06512,513,93612,078,73613,695,51312,226,580Revenues 15,947,88314,346,21615,035,17014,634,84014,878,980Expenditures 14,040,01213,164,63918,102,91816,103,77319,723,250NetDifference(RevenuesLessExpenditures) 1,907,8711,181,577(3,067,748)(1,468,933)(4,844,270)CashBalanceEndingCashBalance 12,513,93613,695,5139,010,98812,226,5807,382,31013
Wastewater UtilityTotal revenue decrease - $156,000{ServiceCharge revenue up$493,000{ServiceCharge revenue up$493,0003.0% over 2013/14 estimated receipts{Prioryear budget included bond funds ygrelated to capital projects ($677,000)14
Wastewater UtilityTotal expense increase - $4.2M{Addition of Watershed Program $Coordinator position ($53,900)Cost shared with Water{Debt Service decrease$3 2M{Debt Service decrease -$3.2MEarly pay off of 2003 COPS{Capital projects and vehicles increase{Capital projects and vehicles increase–$7.4M15
CWastewaterCapital ProjectsInfluent Screening/UV upgrade ($2.3M)Microturbines ($1.2M)Roadway and Building upgrades ($1.75M)Irrigation Improvements ($750,000)Pi R li t ($650 000)PipeRealignment ($650,000)Electrical Improvements ($600,000)ERP/CIS replacement ($250 000)ERP/CIS replacement ($250,000)Various other projects ($427,000)Equipment/vehiclereplacement ($910,000)16Equipment/vehiclereplacement ($910,000)
Wastewater Utility ReservesTarget is 25% of operating expensesTarget for FY2014/15equalsTarget for FY2014/15equals$3,012,000FY2014/15Estimated Reserve isFY2014/15Estimated Reserve is$7,382,30017
Questions?
Public Works DepartmentWater/WastewaterWater/WastewaterFY 14 Quarterly Update(Ending March 31, 2014)City Council Shirtsleeve SessionM 13 2014May13,20141
Wastewater FundCash Flow Summary(Ending March 31, 2014)Budget Actuals % of BudgetRevenueSales14 020 58010 680 75276%Sales14,020,58010,680,75276%Development Impact Mitigation Fees (wastewater & storm) 161,870 159,182 98%Other (interest, septic, misc.) 174,950 239,218 137%Total Revenues14,357,400 11,079,152 77%,,,,ExpensesOperating 6,455,914 4,646,081 72%Capital 1,589,514 361,735 23%pDebt Service 6,904,490 6,217,403 90%Cost of Services Payment To General Fund 1,068,000 801,000 75%Total Expenses15,635,580 12,025,859 77%Beginning Cash (Operations Only) 5,055,217Ending Cash (Operations Only) 6,357,159Days Cash (Excluding Capital)1492y( gp)% of Target 166%
WastewaterOperating Results(Ending March 31, 2014)Budget Actuals % of BudgetPersonnel $ 3,360,494 2,481,063$ 74%Supplies, Materials, Services $ 2,111,530 1,417,755$ 67%Equipment, Land, Structures $ 79,000 65,075$ 82%Other Payments $ 202,630 185,738$ 92%Utilities $ 692,260 496,450$ 72%Work for Others $ 10,000 -$ 0%Total Operating Expenses $ 6,455,914 $ 4,646,081 72%3
Wastewater FundsCash Balances(Ending March 31, 2014)(g ,)Operating (170)6,357,159Utilit C it l / I f t t R l t (171)8 984 050UtilityCapital/InfrastructureReplacement (171)8,984,050Capital Reserve (172) (Fund used to pay White Slough COP Debt Service)(3,931,791)Wastewater IMF (173)47,453Rate Stabilization Reserve (174)500,000Storm Drain IMF (175)682,440Total12,639,3114
Water FundCash Flow Summary(Ending March 31, 2014)Budget Actuals % of BudgetRevenueSl12 694 9309 513 18075%Sales12,694,9309,513,18075%Development Impact Mitigation Fees 149,860 60,001 40%Other (interest, tap fees, water meters, misc.) 1,640,180 1,422,238 87%Total Revenues14 484 97010 995 41976%Total Revenues14,484,97010,995,41976%ExpensesOperating 5,824,036 4,479,820 77%Capital 7,472,494 4,285,875 57%p,,,,Debt Service 2,969,610 896,476 30%Cost of Services Payment To General Fund 780,000 585,000 75%Total Expenses 17,046,140 10,247,171 60%Beginning Cash (Operations Only) 10,805,906Ending Cash (Operations Only) 10,971,575Days Cash (Excluding Capital) 504 5% of Target 560%
WaterOperating Results(Ending March 31, 2014)Budget Actuals % of BudgetPersonnel $ 2,106,056 1,764,622$ 84%Supplies, Materials, Services $ 1,388,810 884,196$ 64%Equipment, Land, Structures $ 82,000 11,811$ 14%Other Payments $ 1,382,420 1,328,735$ 96%Uilii$40490 4 6$6%Utilities$ 754,750490,456$65%Work for Others $ 110,000 -$ 0%Total Operating Expenses $ 5,824,036 $ 4,479,820 77%6
Water FundsCash BalancesCash Balances(Ending March 31, 2014)Operating (180)10,971,575Utility Capital / Infrastructure Replacement (181)(1,940,461)Capital Reserve Restricted Assets (181) (Water Plant Bond Remaining Proceeds)2,349,388IMF (182)60,392PCE/TCE Settlements11,225,160PCE/TCE Rates (185)4,396,541Total27,062,5957
Bad Debt Write Off(Through March 31 2014)(Through March 31,2014)# Of AccountsAmount%ofSales# Of AccountsAmount% of SalesWastewater 645 $52,152 0.5%Water645$56 81506%Water645$56,8150.6%8
Water / Wastewater Utility ActivitiesOtilOperationalWater DistributionWt P d tiWaterProductionCollection SystemWt tT t tWastewaterTreatmentRegulatorySSO’SSO’sDischarge ViolationsMonitoring and Reporting9Monitoring and Reporting
Electric Utility DepartmentFY 14 Quarterly Update(Ending March 31, 2014)City Council Shirtsleeve SessionM 13 2014May13,20141
Electric FundCash Flow Summary(Ending March 31 2014)(Ending March 31,2014)Budget Actuals % of BudgetRevenueSales Revenues 66,894,140 49,936,566 75%Development Impact Fees 200,000 78,461 39%Other Revenues (interest, misc) 4,033,850 1,117,001 28%Total Revenues 71,127,990 51,132,027 72%ExpensesPurchase Power 39,408,270 30,350,998 77%Non Power 11,947,910 7,021,352 59%Capital Projects 2,012,700 482,988 24%Debt Service 8,241,460 6,496,483 79%Cost of Service 2,354,000 1,765,500 75%In-lieu Transfer to General Fund 6,976,670 5,232,503 75%Total Expenses70 941 01051 349 82472%Total Expenses70,941,01051,349,82472%Net Chg in Bal Sheet Accts (1,065,242)Net Increase (Decrease) 186,980 (1,283,038)Beginning Local Cash Balance 13,235,812 13,235,812 Ending Local Cash Balance13,422,79211,952,774Ending Local Cash Balance13,422,79211,952,774GOR Balance 9,483,172 Total Reserve Balance 21,435,946 Reserve Policy Target 23,232,000 % of Target 92%2
Electric Utility Reserve Policy(Ending March 31 2014)(Ending March 31,2014)Purpose Basis Target ActualpgOperating Reserve 90 Days Cash $ 17,232,000 $ 11,952,774Capital Reserve Largest Distribution System Contingency $ 1,000,000NCPA General Operating Reserve NCPA Identified Items $ 5,000,000 $ 6,411,789NCPA MPP/GPP Balance MPP/GPP Security Commitments $ 3,071,383TotalTarget$23,232,000$21,435,946TotalTarget$23,232,000$21,435,9463
Electric FundsCash Balances(Ending March 31, 2014)(g ,)Operating (160)$ 2,091,953Utility Outlay Reserve Fund (161)$0Electric Rate Stability Reserve (162) $ 2,162,369Public Benefits Fund (164)$ 4,513,278IMF EU Substation and Transmission (165)$738,273(),Solar Surcharge Fund (166)$729Environmental Compliance (168)$ 2,446,172NCPAGeneral Operating Reserve (GOR)$9483172NCPA–General Operating Reserve (GOR)$9,483,172Total$ 21,435,9464
Power Sales(Ending March 31 2014)(Ending March 31,2014)Budgeted Sales Year to Date Sales % BudgetkWh442 186 628330 958 68775%kWh442,186,628330,958,68775%Revenue $ 66,894,140 $ 49,936,566 75%Year HDD Normal CDD NormalJuly 2013 0 0 388 363August 2013 0 0 319 332September 2013 6 0 204 222pOctober 2013 83 91 2 54November 2013 310 360 0 0December 2013 637 603 0 0January2014 464 595 0 0yFebruary 2014 333 407 0 0March 2014 199 324 0 0FY14 Total2032 2380 913 9715
ECA Revenue(Ending March 31 2014)(Ending March 31,2014)Customer Class Q1 Q2 Q3 TotalResidential $ (157,405) $ 302,855 $ 776,041 $ 921,491 Small Commercial $ (154,690) $ 308,120 $ 829,634 $ 983,065 Large Commercial/Small Industrial $ (45,706) $ 94,584 $ 243,400 $ 292,279 Industrial $ (169,465) $ 151,243 $ 420,741 $ 402,519 Total ECA Revenue $ (527,265) $ 856,803 $ 2,269,816 $ 2,599,353 6
Electric FundOperating Results(Ending March 31 2014)(Ending March 31,2014)FY14 BudgetFY14 Actual% of BudgetFY14 BudgetFY14 Actual% of BudgetPersonnel $ 5,862,530 $ 4,382,229 75%Supplies, Materials, Services $ 3,158,730 $ 1,244,499 39%Equipment, Land, Structures $ 1,267,800 $ 541,563 43%Oth P t$ 1 605 000$ 816 45051%OtherPayments$1,605,000$ 816,45051%Utilities $ 53,850 $ 36,611 68%Total Operating Expenses $ 11,947,910 $ 7,021,352 59%7
Power Supply Costs(Ending March 31 2014)(Ending March 31,2014)BudgetedYear to Date% of BudgetBudgetedYear to Date% of BudgetGeneration $ 32,670,010 $ 29,097,509 89%Transmission $ 9,544,450 $ 5,683,071 60%Management Services $ 1,333,500 $ 1,074,898 81%Third Party Revenue $ (4,139,690) $ (5,504,480) 133%AdjustmentsTOTAL $ 39,408,270 $ 30,350,998 77%8
Billing Statistics(Ending March 31 2014)(Ending March 31,2014)Budgeted Sales FY14Customer Class kWh Sales Revenue Average RateResidential 151,836,774 $ 25,388,105 $ 0.1672 Small Commercial 155,602,780 $ 24,553,085 $ 0.1578 Large Commercial/Small Industrial 40,860,621 $ 6,375,542 $ 0.1560 Industrial 93,886,453 $ 10,577,408 $ 0.1127 TOTAL442,186,628$66,894,140$ 0.1513TOTAL442,186,628$ 66,894,140$ 0.1513Actual Sales FY14Customer Class kWh Sales Revenue Average RateResidential114 631 262$ 19 807 028$ 0 1728Residential114,631,262$19,807,028$0.1728Small Commercial 118,830,981 $ 19,065,795 $ 0.1604 Large Commercial/Small Industrial 33,760,006 $ 4,735,364 $ 0.1403 Industrial 63,736,438 $ 6,328,379 $ 0.0993 TOTAL 330,958,687 $ 49,936,566 $ 0.1509 9
Bad Debt Write Off(Ending March 31 2014)(Ending March 31,2014)# Of Accounts Amount % of SalesElectric 645 $106,653 0.21%10
12 Month Rolling Load CoverageMWh LoadLoad Coverage BeforePurchasesROC Matrix TargetLoad Coverage AfterPurchasesQ2–2014111 66065 5%85 0%85 2%Q22014111,66065.5%85.0%85.2%Q3 – 2014 136,228 63.2% 85.0% 84.1%Q4 – 2014 106,025 58.6% 75.0% 76.8%Q1 – 2015 *36,174 59.1% 60.0% 62.6%11*Includes January 2015 Only
Electric Utility ActivitiesElectricUtilityActivities•StreetLights•SafetyProgramyg•Staffing•Distribution System Capacity / MaintenanceDistributionSystemCapacity/Maintenance•FinancialModel/CostofService•Statemandated Reports•StateͲmandatedReports12