HomeMy WebLinkAboutMinutes - March 7, 2017 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MARCH 7, 2017
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, March 7, 2017, commencing at 7:01 a.m.
Present: Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne
Absent: Council Member Chandler, and Council Member Mounce
Also Present: City Manager Schwabauer, Deputy City Attorney Fukasawa, and City Clerk
Ferraiolo
B. Topic(s)
B-1 Second Quarter Fiscal Year 2016/17 Water, Wastewater, and Electric Utility Department
Financial Reports (CM)
Public Works Utilities Manager Lance Roberts provided a PowerPoint presentation regarding the
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, and Water/Wastewater
Utility activities.
In response to Council Member Johnson, Mr. Roberts stated that the State is attempting to free
up money to repair the damaged levee near the White Slough Water Pollution Control Facility.
The City could do the repairs, but staff needs further information before moving forward because
there is no guarantee the City would be reimbursed by the State.
In response to Mayor Pro Tempore Nakanishi, City Manager Schwabauer reminded Council that
it created a California Public Employees Retirement System stabilization fund. At the upcoming
mid -year budget review, staff will make a recommendation to allocate money from each of the
enterprise funds into the stabilization fund so that every City fund is contributing to the problem.
He stated that, instead of $2.8 million going into the fund, it will be $3.8 million across all funds.
Electric Utility Rates & Resources Manager Melissa Price provided a PowerPoint presentation
regarding the Electric Utility (EU) quarterly update. Specific topics of discussion included EU
Fund cash flow summary, EU Reserve Policy, EU funds cash balances, power sales, Electric
Commodity Adjustment (ECA) revenue, EU Fund operating results, power supply costs, and load
coverage.
In response to Mayor Pro Tempore Nakanishi, Ms. Price stated she would look into whether
Southern California utilities are changing their rate tiers. Mr. Schwabauer added that PG&E's
rates are driven by the Public Utilities Commission and the restructuring was driven by the State.
Ms. Price stated that, during the energy crisis, the energy tiers were locked in, but now rates are
increasing in order to correct the imbalance.
Council Member Johnson stated that all too often citizens compare Lodi's rates with PG&E's and
suggested that, prior to the upcoming public hearing, staff educate the public on why PG&E's
rates are higher than Lodi's.
In response to Mayor Pro Tempore Nakanishi, Ms. Price stated she will look into what percentage
transmission cost is on utility bills, but she estimated it is likely one-third. Lodi does not unbundle
its rate, but on PG&E's bill it is broken down. Mayor Pro Tempore Nakanishi summarized that
1
electricity is costly because of transmission costs.
Electric Utility Director Elizabeth Kirkley provided a PowerPoint presentation regarding
EU's activities.
Mayor Kuehne questioned whether Ms. Kirkley believed Senator De Leon will have success with
his new legislation that would increase renewable energy resources to 100 percent instead of
50 percent. Ms. Kirkley stated she believes it will need to be rewritten to allow more hydro power
and not lay off existing generation.
In response to Mayor Pro Tempore Nakanishi, Ms. Kirkley confirmed that staff will look into how
transmission costs are charged by PG&E for solar customers. Mayor Pro Tempore Nakanishi
stated that, if transmission is one-third of energy costs, then solar energy is being subsidized.
Ms. Kirkley explained that the energy generated by a customer offsets what EU needs.
Mr. Schwabauer further stated the City takes that out in the solar rate and only assigns the
operating and maintenance costs to the system. Ms. Price stated that customers pay based on
their usage and, if they reduce their load, they pay less in transmission costs.
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 7:33 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
2
TM
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA ITEM
AGENDA TITLE: Second Quarter Fiscal Year 2016/17 Water, Wastewater and Electric Utility
Department Financial Reports
MEETING DATE: March 7, 2017
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION. Receive utility financial reports for the second quarter of Fiscal Year
2016/17.
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 March 7, 2017.
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:
phe Sc wabauer
City Manager
e• en chwa+auer, City Manager
Electric Utility Department
FY 17 Quarterly Update
(Ending December 31, 2016)
City Council Shirtsleeve Session
March 7, 2017
1
Electric Utility Fund
Cash Flow Summary
(Ending December 31, 2016)
Net Increase (Decrease)
Beginning Local Cash Balance
Budget
Actuals
% of Budget
Revenue
17,168,485
GOR Balance
Sales Revenues
68,526,450
37,267,885
54%
Development Impact Fees
111,980
36,582
33%
Other Revenues (interest, misc)
3,642,810
2,069,841
57%
Total Revenues
72,281,240
39,374,308
54%
Expenses
Purchase Power
40,434,980
20,031,634
50%
Non Power
13,919,070
5,341,467
38%
Capital Projects
5,411,663
1,162,950
21%
Debt Service
5,528,520
5,526,785
100%
Cost of Service/Capital Xfer
2,354,000
1,177,000
50%
In -lieu Transfer to General Fund
7,131,330
3,565,665
50%
Total Expenses
74,779,563
36,805,501
49%
Net Chg in Bal Sheet Accts
958,606
Net Increase (Decrease)
Beginning Local Cash Balance
(2,498,323)
16,139,395
2,568,807
16,139,395
Ending Local Cash Balance
13,641,072
17,168,485
GOR Balance
11,665,128
Total Reserve Balance
28,833,613
Reserve Policy Target
22,776,000
% of Target
127%
2
Electric Utility Reserve Policy
(Ending December 31, 2016)
Purpose
Basis
Target
Actual
Operating Reserve
90 Days Cash
$ 17,350,000
$ 16,793,485
Capital Reserve
Largest Distribution System Contingency
$ 1,000,000
$ 375,000
NCPA General Operating Reserve
NCPA Identified Items
$ 4,426,000
$ 8,697,792
NCPA MPP/GPP Balance
MPP/GPP Security Commitments
$ 2,967,336
Total Target
$ 22,776,000
$ 28,833,613
$35,000
$30,000
$25,000
c $20,000
0
e $15,000
$10,000
$5,000
$-
Actual Reserves vs. Target
95%
1
1
FY 12/13 FY 13/14 FY 14/15
FY 15/16 FY 16/17
❑ Actu a l
❑Target
Cash balances
support Council
approved reserve
requirements and
provide funds for pay
as you go capital
improvement
projects
3
Electric Utility Funds
Cash Balances
(Ending December 31, 2016)
4
Operating (500)
$ 6,203,160
Utility Outlay Reserve Fund (501)
$ 375,000
Public Benefits Fund (504)
$ 2,155,169
IMF EU Substation and Transmission (505)
$ 945,106
Solar Surcharge Fund (506)
$ 256,023
Environmental Compliance (508)
$ 7,234,027
NCPA— General Operating Reserve (GOR)
$ 11,665,128
Total
$ 28,833,613
4
Power Sales
(Ending December 31, 2016)
Power Sales (kWh)
Customer Class
Budget
Actual
Residential
151,108,765
82,760,819
Small Commercial
165,114,668
86,187,235
Large Commercial/Small Industrial
48,152,911
23,988,412
Industrial
64,722,006
39,799,909
TOTAL
429,098,350
232,736,375
Revenue ($)
Customer Class
Budget
Actual
Average Rate
Residential
$ 27,621,347
$ 14,565,575
$ 0.1760
Small Commercial
$ 27,986,175
$ 14,569,570
$ 0.1690
Large Commercial/Small Industrial
$ 6,674,998
$ 3,764,802
$ 0.1569
Industrial
$ 6,243,930
$ 4,367,938
$ 0.1097
TOTAL
$ 68,526,450
$ 37,267,885
$0.1601
5
ECA Revenue
(Ending December 31, 2016)
Customer Class
Q1
Q2
Total
Residential
$ (402,398)
$ 667,741
$ 265,343
Small Commercial
$ (390,564)
$ 726,745
$ 336,181
Large Commercial /
Small Industrial
$ (115,376)
$ 243,816
$ 128,440
Industrial
$ ( 68,739)
$ 267,865
$ 199,126
Total ECA Revenue
$ (977,077)
$1,906,167
$ 929,090
6
Electric Utility Fund
Operating Results
(Ending December 31, 2016)
7
FY17 Budget
FY17 Actual
% of Budget
Personnel
$ 8,576,220
$ 3,450,355
40%
Supplies, Materials, Services
$ 3,423,710
$ 955,222
28%
Equipment, Land, Structures
$ 5,000
$ 837
17%
Other Payments
$ 1,837,840
$ 907,860
49%
Utilities
$ 76,300
$ 27,193
36%
Total Operating Expenses
$ 13,919,070
$ 5,341,467
38%
7
Power Supply Costs
(Ending December 31, 2016)
8
Budgeted
Year to Date
% of Budget
Generation
$ 29,873,610
$ 15,225,212
51%
Transmission
$ 9,125,930
$ 4,074,876
45%
Management Services
$ 1,435,440
$ 731,546
51
Total Power Supply Costs
$ 40,434,980
$ 20,031,634
50%
8
4
Load Coverage
140,000
120,000
100,000
80,000
2 60,000
40,000
20,000
.00
r
Q2-2017 Q3-2017 Q4-2017 Q1-2018
Coverage
Target
Load
9
MWh Load
ROC Matrix
Target
Load Coverage
(Including Purchases)
Q2 — 2017
109,031
80%
82%
Q3 — 2017
132,804
77%
77%
Q4 — 2017
103,739
67%
67%
Q1 — 2018
100,235
60%
60%
140,000
120,000
100,000
80,000
2 60,000
40,000
20,000
.00
r
Q2-2017 Q3-2017 Q4-2017 Q1-2018
Coverage
Target
Load
9
Electric Utility Activities
• Safety
• Staffing
• Reliability
• Capital Improvement Program
• New Development
• Legislative & Regulatory
• Fiscal Health
• Customer Programs