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HomeMy WebLinkAboutMinutes - September 12, 2017 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, SEPTEMBER 12, 2017 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, September 12, 2017, commencing at 7:01 a.m. Present: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Absent: Council Member Mounce Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo NOTE: Council Member Chandler arrived at 7:02 a.m., and Mayor Pro Tempore Nakanishi left at 8:00 a.m. B. Topic(s) B-1 Fourth Quarter Fiscal Year 2016/17 Water, Wastewater, and Electric Utility Department Financial Reports (CM) Rates & Resources Manager Melissa Price provided a PowerPoint presentation regarding Electric Utility Department quarterly update. Specific topics of discussion included Electric Utility fund cash flow summary, cash balances, reserve policy, capital improvement project spending plan, power sales, Energy Cost Adjustment (ECA) revenue, operating results, power supply costs, and load coverage. Council Member Johnson questioned how the City is planning to keep up with the ever- changing clean energy bills working their way through legislation, to which Electric Utility Director Elizabeth Kirkley stated City staff is working very closely with Northern California Power Agency (NCPA) to ensure more palatable language is included in the bills. In addition, NPCA is helping Lodi and all of its members increase their portfolios with regard to future renewals. Ms. Kirkley provided a PowerPoint presentation regarding City Council strategic areas of focus and requested Council feedback on whether or not it wishes to continue the solar tariff, which is set to sunset on December 31, 2017. City Manager Schwabauer cautioned that Council cannot vote on the matter at this meeting; it can only provide direction on whether or not to bring the issue back for discussion and action. Council Member Chandler stated he believes it is too soon to make a decision on the matter, particularly with various legislative actions on the horizon relating to 100 percent renewable energy, as well as potential bills relating to integration, which may result in California losing authority in its own district. Mayor Pro Tempore Nakanishi stated he is not in favor of the surcharge and would prefer to wait and see what happens in the future. Council Member Johnson stated he does not disagree with Council Member Chandler; however, he was concerned with timing since the tariff sunsets at the end of the year and it would create greater confusion if it ended and was brought back later. He suggested Council have a discussion on the matter before the surcharge sunsets on whether or not to continue with it. Mayor Kuehne agreed, adding he would like to know how much money is collected annually, to which Ms. Kirkley replied $600,000. 1 Council Member Chandler clarified that he is not opposed to discussing the matter, but in his opinion he believes it is too early to make a decision. Ms. Kirkley explained she brought the matter up because the issue will involve setting a public hearing and she wanted to ensure there was ample time prior to the sunset date should Council be interested in extending the tariff. Mayor Kuehne commented on the recent power outage in the area of Ham Lane that effected a large number of residents, as well as medical facilities. Many people were greeted with a busy signal when they called to report the outage or ask for an update and he suggested there be a public service announcement on the City's radio station or an outgoing voice mail message on the City's phone system instead of a busy signal. Ms. Kirkley stated there are long-term plans to improve the system and she will look into possibilities of correcting it in the interim. Deputy City Manager Keys added there is a definite need for investment in the infrastructure of the overall phone system Citywide and staff is working to plan and budget for the update. As it currently stands, the system cannot handle a high call volume, which results in the 41st caller receiving a busy signal; there is no queue. He estimated the item will come to Council late this year or early next year. In response to Mayor Pro Tempore Nakanishi, Ms. Kirkley stated staff is working on an outage management system, and Mr. Schwabauer stated that PG&E has such a system that notifies people via e-mail when power is out and how long the outage is anticipated; however, its system only works effectively 25 percent of the time. Ms. Kirkley added that, in addition to calling the Utility Department for information on an outage, residents can receive updates on Facebook. Council Member Johnson pointed out that very few people are aware of the City's radio station and stated he believes it is an inadequate device for emergencies. He stated many communities have an alert system for emergency situations to notify residents and questioned if there is a system the City could tie into, such as the School Districts. Mr. Keys stated there is an ability to push out messages, similar to the text alerts regarding power outages, but it would need to be an "opt -in" type of service, which would require people to provide their contact information. He stated staff will look into it further. With regard to the School District, parents fill out emergency cards, and their private information is used for limited purposes. He did not think the City could utilize that information. Mr. Schwabauer stated the Fire Department is working on its capital budget to put together an option similar to a Reverse 911 system. In response to Mayor Pro Tempore Nakanishi, Ms. Kirkley stated Electric Utility learns about power outages from customer calls, as well as from the operations center that shows abnormalities in the system. As soon as an outage is reported, a troubleshooter is dispatched to assess and correct the problem or a crew will be sent if the problem is larger or more complex. She confirmed the City has three crews. In response to Mayor Kuehne, Ms. Kirkley stated Lodi is currently working with NCPA, through its Smart Grid Committee, on smart grid technology and ways to improve technology on the system. Mayor Pro Tempore Nakanishi referenced the Ham Lane power outage, stating he sent staff and patients home that day due to lack of power, but if he had known how long the power would be out, he would have had patients wait. Ms. Kirkley stated Utility staff does not always know exactly how long a power outage will last, but it is proficient at estimating a timeframe. Mayor Kuehne stated it is important for the medical community to have access to outage information due to the nature of its work and asked if this group could be prioritized. Utilities Manager Lance Roberts provided a PowerPoint presentation regarding Water/Wastewater quarterly update. Specific topics of discussion included Wastewater fund cash flow summary, operating results, cash balances, and planned capital projects; Water fund cash flow summary, operating results, cash balances, and planned capital projects; and Water/Wastewater Utility activities. 2 In response to Council Member Chandler, Mr. Roberts stated the $2.2. million Ham Lane and Century Boulevard project will kick off this year to replace the large trunk lines that are roughly 60 years old, as will the Irrigation Improvements project. In response to Mayor Kuehne, Mr. Roberts stated the projects were broken up over five years and are projected out in installments. With regard to the Irrigation Improvement project, ditches were failing and the State directed they be improved. The City has a five-year plan to get it completed with installation of new pipe. He further responded that the Electrical Upgrade and Supervisory Control and Data Acquisition Improvement project includes improvements to the operations room and electrical building and electrical upgrades to the pumps. Public Works Director Charlie Swimley added the project includes the coarse screen project, electrical upgrades, and improvements to the receiving facility. The project has been planned for quite some time and is currently in the design phase. He added the project was planned in a methodical way in order to sequence the work over the next three years. Another major expenditure this year will be the Recycled Water Storage project, which is anticipated at $1.6 million this year and another $3.7 million the following year. It was projected earlier; however, the unexpected flooding at the White Slough Water Pollution Control Facility delayed the project. Council Member Johnson recalled that pipe was placed along Thornton Road due to overflows and he stated then that the overflows were either operator error in pushing too much water through or staff missing weak spots in the pipes. He felt then that the pipes should have been reinforced instead of replaced. He was not supportive of the pipe project years ago and he is still displeased with spending money on replacing pipes in ditches when the money could be put to better use elsewhere. Mr. Roberts stated staff prioritized each phase and identified the most critical locations with overflows. Council Member Johnson pointed out that street crews routinely patch streets throughout the year instead of completely repaving and stated the ditch and/or pipe can be repaired instead of replaced. Mr. Roberts clarified that staff is not replacing the entire system; only the weakest locations. In response to Mayor Kuehne, Mr. Swimley stated Phase 7 of the Water Meter Program will be completed this year; Phase 8 and some multi -family meters will be completed in 2018/19. He reminded Council that it acted to sunset the water rates on January 1, 2021. Mr. Roberts confirmed that the City will be ahead of schedule of the State mandate, which regulated meters be in place by the year 2025. In response to Mayor Pro Tempore Nakanishi, Mr. Swimley stated that staff anticipated a decline in the water fund balance and was open with respect to following through with planned rate increases in order to finish the Water Meter Program. At the moment, the City is taking in less money than it is spending; however, after the completion of the meter program, the fund balance will recover at a rapid rate. Going forward from that point, Council will need to decide what to do with rates, i.e. use the revenue to pay off the bond or reduce rates. Further, Mr. Swimley responded that staff has adjusted revenue projections to anticipate continued water conservation. He stated customers were slow in changing their behavior, but conservation has remained steady at 25 percent. He anticipates the number will adjust in the opposite direction but at a slow rate. In response to Mike Lusk, Ms. Kirkley stated the outage in the Ham Lane area was the result of a crow that landed on a breaker and took out a circuit. With regard to the water report, Mr. Lusk stated he recalled that the $2 million for the southwest tank was in this year's budget and was used as a reason for the water rate increase, to which Mr. Schwabauer replied that was an incorrect recollection. Mr. Lusk also stated he recalled that the recycled water storage tank at White Slough was estimated at $3 million, with a three-quarter subsidy from the State; however, this report shows a two-year combined figure of $4.5 million, and he questioned the discrepancy. Mr. Swimley responded that the total project cost is estimated at $6 million and the City will receive 75 percent repayment from the State in the form of a grant. The City made some expenditures on this project to date for environmental work and design. Mr. Swimley further clarified that the $3 million figure quoted by Mr. Lusk was the total for the last budget year, but the project was delayed by weather and the levee breach at the project site. He added there may be 3 further delays this year as well. Mr. Schwabauer added that the project estimate has always been $6 million and the refund from the state was always estimated at three-quarters of the total amount. He surmised that Mr. Lusk's confusion was likely because the discussion in question was about one year of a multi-year project. Mr. Lusk questioned how the Sustainable Groundwater Management Act (SGMA) will effect the water rate structure. Mr. Schwabauer stated it will likely have a negative effect, but the full effect is unknown at this time. In the short term, he sees a downward pressure on rates due to steps Lodi is taking to plan for the future, but SGMA will unfortunately have an upward pressure on rates. Lodi is the only sustainable system in the County and is steadily replacing water in the ground and, because of that, it should have the least impact from SGMA; however, Lodi is one of 24 agencies, and they will look to Lodi for help in this effort. He stated Lodi will have to continue to be vigilant about its sustainability throughout the process. Mr. Schwabauer reiterated that it is simply too difficult to quantify the effect SGMA will have on rates. Mr. Swimley added the City did not increase wastewater rates this year, which was anticipated in the schedule. Mayor Pro Tempore Nakanishi stated he sits on the SGMA committee and reported the group is still in the process of devising a plan. Council Member Johnson questioned why so many employees were retiring in November, to which Mr. Schwabauer responded there is no magic to the date. Most people tend to retire at the end of the year, which relates to cost of living adjustments in the California Public Employees Retirement System, while for some it may be related to the age of their child if they are in the City's sick leave conversion program, which was the driving factor behind three recent retirements. He added it is not uncommon for retirements to pile up at one time. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 8:02 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 4 TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Fourth Quarter Fiscal Year 2016/17 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: September 12, 2017 PREPARED BY: Deputy City Manager RECOMMENDED ACTION Receive utility financial reports for the third 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 September 12, 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. 01 -GA -r- Andrew Keys Deputy City Manager APPROVED: )(L S r Stephen Schwabau'rManager TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM 8-1 AGENDA TITLE: Fourth Quarter Fiscal Year 2016/17 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: September 12, 2017 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive utility financial reports for the_ thirdfourth 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 September 12, 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. Andrew Keys Deputy City Manager APPROVED: 'V1 1 .)6. Stephen Schwabauer, City Manager Public Works Department Water/Wastewater FY 17 Quarterly Update (Ending June 30, 2017) City Council Shirtsleeve Session September 12, 2017 1 Wastewater Fund Cash Flow Summary (Ending June 30, 2017) *Of the remaining capital budget, $1.2M or 12% of the total budget was rolled to the next FY in encumbered contracts 2 Budget Actuals % of Budget Revenue Sales 15,428,650 15,053,759 98% Development Impact Mitigation Fees (wastewater & storm) 827,570 598,552 72% Other (interest, septic, misc.) 2,760,735 1,316,435 47% Total Revenues 19,016,955 16,968,746 89% Expenses Operating 8,104,881 7,512,714 93% Capital *9,946,364 4,060,048 41% Debt Service 3,122,930 3,499,118 112% Cost of Services Payment To General Fund 1,068,000 1,068,000 100% Total Expenses 22,242,175 16,379,938 74% Beginning Cash (Operations Only) 12,598,683 Ending Cash (Operations Only) 13,034,422 Days Cash (Excluding Capital) 386 of Target — 90 Days Cash on Hand 429% *Of the remaining capital budget, $1.2M or 12% of the total budget was rolled to the next FY in encumbered contracts 2 Wastewater Operating Results (Ending June 30, 2017) 3 Budget Actuals % of Budget Personnel $ 3,704,165 $ 3,916,949 106% Supplies, Materials, Services $ 2,634,150 $ 2,153,973 82% Equipment, Land, Structures $ 525,000 $ 193,817 37% Other Payments $ 512,856 $ 434,356 85% Utilities $ 700,400 $ 793,618 113% Work for Others $ 28,310 $ 20,000 71% Total Operating Expenses $ 8,104,881 $ 7,512,714 93% 3 Wastewater Funds Cash Balances (Ending June 30, 2017) 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Actual Reserves vs. Target 429% 326% 206% 122% 13/14 14/15 15/16 16/17 Amounts above reserve target are Target held for scheduled Actual capital maintenance 4 Operating (530) 13,034,422 Utility Capital / Infrastructure Replacement (531) 1,067,097 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) 0 Wastewater IMF (533) 759,954 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 923,558 Total 16,285,031 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Actual Reserves vs. Target 429% 326% 206% 122% 13/14 14/15 15/16 16/17 Amounts above reserve target are Target held for scheduled Actual capital maintenance 4 Wastewater Planned Capital Projects Villa Fiore Reimbursement * MSC Security Improvements Misc. System Relocations Misc. Wastewater Taps Collection System Capacity Enhancement Projects Ham & Century Rehabilitation ** Vinewood Storm Water Pump Rehab Vehicles /Equipment Upgrade Blowers Irrigation Improvements Digester #4 Cleaning Field #5 Catwalk Repair Lagoon Cleaning Pump & Equipment Upgrades Corrosion Repairs** Electrical/Screen/SCADA Design ** Electrical Upgrades/SCADA Construction White Slough Recycled Water Storage** Fence Repairs/Upgrades Miscellaneous Future Projects *Not included in the FY 17-18 adopted budget **Includes budget rollover from previous FY FY 17-18 FY 18-19 FY 19-20 FY 20-21 930,000 25,000 35,000 35,000 35,000 35,000 40,000 40,000 40,000 40,000 21,000 216,000 2,220,000 200,000 450,000 156,000 162,000 169,000 750,000 600,000 600,000 700,000 220,000 120,000 150,000 355,000 136,000 660,000 3,224,000 8,653,000 1,620,000 3,701,892 26,000 104,000 108,000 112,000 Totals $7,541,000 $8,877,892 $9,914,000 $356,000 5 Water Fund Cash Flow Summary (Ending June 30, 2017) *Of the remaining capital budget, $4.3M or 38% of the total budget was rolled to the next FY in encumbered contracts 6 Budget Actuals % of Budget Revenue Sales 13,236,620 12,473,679 94% Development Impact Mitigation Fees 303,940 206,847 68% Other (interest, tap fees, water meters, misc.) 963,550 1,139,177 118% Total Revenues 14,504,110 13,819,703 95% Expenses Operating 6,985,863 6,311,628 90% Capital *11,455,023 5,126,884 45% Debt Service 2,970,100 2,975,609 100% Cost of Services Payment To General Fund 780,000 780,000 100% Total Expenses 22,190,986 15,194,121 68% Beginning Cash (Operations Only) 3,864,861 Ending Cash (Operations Only) 3,603,782 Days Cash (Excluding Capital) 131 % of Target — 90 Days Cash on Hand 145% *Of the remaining capital budget, $4.3M or 38% of the total budget was rolled to the next FY in encumbered contracts 6 Water Operating Results (Ending June 30, 2017) 7 Budget Actuals % of Budget Personnel $ 2,952,517 $ 2,762,656 94% Supplies, Materials, Services $ 1,557,480 $ 1,278,533 82% Equipment, Land, Structures $ 110,000 $ 72,149 66% Other Payments $ 1,676,916 $ 1,635,952 98% Utilities $ 588,950 $ 453,488 77% Work for Others $ 100,000 $ 108,850 109% Total Operating Expenses $ 6,985,863 $ 6,311,628 90% 7 Water Funds Cash Balances (Ending June 30, 2017) 8,000,000 E 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 277% Actual Reserves vs. Target 264% 238% 145% 13/14 14/15 15/16 16/17 Ta rget Actual Amounts above reserve target are held for scheduled capital maintenance 8 Operating (560) 3,603,782 Utility Capital / Infrastructure Replacement (561) 95,077 IMF (562) 702,804 PCE/TCE Settlements 9,754,381 PCE/TCE Rates (565) 4,090,262 Total 18, 246, 306 8,000,000 E 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 277% Actual Reserves vs. Target 264% 238% 145% 13/14 14/15 15/16 16/17 Ta rget Actual Amounts above reserve target are held for scheduled capital maintenance 8 Water Meter Program* Water Taps Misc. Water Mains GAC Replacement Meter Shop Design Southwest Gateway Water Tank Water Plant Generator MSC Security Improvements Well 14 Pump Rehab** Well 15 Pump Rehab** Well 16 Pump Rehab Well 17 Pump Rehab Well 21 Rehab Well 23 Rehab Well 25 Rehab Vehicles/Equipment Water Planned Capital Projects FY 17-18 FY 18-19 FY 19-20 FY 20-21 5,311,000 3,739,000 75,000 75,000 75,000 75,000 50,000 50,000 50,000 50,000 300,000 300,000 300,000 250,000 2,000,000 300,000 25,000 166,000 175,000 206,000 191,000 212,000 202,000 219,000 41,000 42,000 44,000 Totals $6,352,000 $4,902,000 $2,679,000 $590,000 *Only $200K included in FY 17/18 adopted budget for staff time, change orders, misc. costs. Phase 7 was awarded in FY 16/17. **Not included in FY 17/18 adopted budget. 9 Water / Wastewater Utility Activities Operational • Water Distribution • Water Production • Collection System • Wastewater Treatment Regulatory • SSO's • Discharge Violations • Monitoring and Reporting 10 Electric Utility Department FY 17 Quarterly Update (Ending June 30, 2017) City Council Shirtsleeve Session September 12, 2017 1 Electric Utility Fund Cash Flow Summary (Ending June 30, 2017) Net Increase (Decrease) Beginning Local Cash Balance Budget Actuals % of Budget Revenue 13,766,039 GOR Balance Sales Revenues 68,526,450 66,936,389 97% Development Impact Fees 111,980 83,914 75% Other Revenues (interest, misc) 3,642,810 4,513,549 124% Total Revenues 72,281,240 71,533,852 99% Expenses Purchase Power 40,434,980 36,695,433 91% Non Power 14,317,831 12,015,483 84% Capital Projects 6,116,763 4,341,356 71% Debt Service 5,528,520 5,526,791 100% Cost of Service/Capital Xfer 2,354,000 2,354,000 100% In -lieu Transfer to General Fund 7,131,330 7,131,330 100% Total Expenses 75,883,424 68,064,393 90% Net Chg in Bal Sheet Accts (2,240,631) Net Increase (Decrease) Beginning Local Cash Balance (3,602,184) 16,139,395 3,469,459 16,139,395 Ending Local Cash Balance 12,537,211 13,766,039 GOR Balance 9,082,666 Total Reserve Balance 22,848,705 Reserve Policy Target 22,776,000 % of Target 100% 2 Electric Utility Funds Cash Balances (Ending June 30, 2017) *Includes funds held locally and at NCPA 3 Operating Funds* $ 12,024,870 Utility Outlay Reserve Fund $ 500,000 Public Benefits Fund $ 1,777,761 Impact Fee Fund $ 998,753 Solar Surcharge Fund $ 372,669 Greenhouse Gas Fund $ 7,174,652 Total $ 22,848,705 *Includes funds held locally and at NCPA 3 Electric Utility Reserve Policy (Ending June 30, 2017) Purpose Target Actual* Operating Reserves $ 21,776,000 $ 22,348,705 Capital Reserve $ 1,000,000 $ 500,000 Total Target $ 22,776,000 $ 22,848,705 *Includes cash held locally and at NCPA $30,000 $25,000 $20,000 c $15,000 "I $10,000 $5,000 $- Actual Reserves vs. Target 0 0 rni 98% 100% FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 ❑Actual ❑ Target Cash balances support City Council approved reserve requirements and provide funds for pay as you go Capital Improvement Projects. 4 Capital Improvement Project Spending Plan Project* 5 -Year Distribution Capacity Program $ 1,956,000 Underground Maintenance $ 4,050,000 Streetlight Maintenance / Repair $ 550,000 LED Streetlight Improvements $ 463,000 230 kV Interconnection Project $ 110,000 Overhead Maintenance $ 1,500,000 Substation Maintenance / Improvements $ 1,696,450 Building & Security Improvements $ 1,937,711 Meter Data Management System $ 2,250,000 Vehicles & Equipment $ 1,988,440 Total Projects $ 16,501,601 *Does not include new development or work paid by others 5 Power Sales (Ending June 30, 2017) Power Sales (kWh) Customer Class Budget Actual Residential 151,108,765 149,142,904 Small Commercial 165,114,668 157,367,630 Large Commercial/Small Industrial 48,152,911 43,809,201 Industrial 64,722,006 75,090,839 TOTAL 429,098,350 425,410,574 Revenue ($) Customer Class Budget Actual Average Rate Residential $ 27,621,347 $ 27,133,951 $ 0.1819 Small Commercial $ 27,986,175 $ 25,956,334 $ 0.1649 Large Commercial/Small Industrial $ 6,674,998 $ 6,303,488 $ 0.1439 Industrial $ 6,243,930 $ 7,542,616 $ 0.1004 TOTAL $ 68,526,450 $ 66,936,389 $ 0.1573 6 ECA Revenue (Ending June 30, 2017) Customer Class Total Residential $ 582,357 Small Commercial $ 699,065 Large Commercial / Small Industrial $ 194,833 Industrial $ 257,573 Total Revenue $ 1,733,828 7 Electric Utility Fund Operating Results (Ending June 30, 2017) *Includes LEU contribution to PERS Stabilization Fund 8 FY17 Budget FY17 Actual % of Budget Personnel $ 8,576,220 $ 7,758,042 90% Supplies, Materials, Services $ 3,425,497 $ 2,258,401 66% Equipment, Land, Structures $ 5,000 $ 837 17% Other Payments* $ 2,234,814 $ 1,941,446 87% Utilities $ 76,300 $ 56,757 74% Total Operating Expenses $ 14,317,831 $ 12,015,483 84% *Includes LEU contribution to PERS Stabilization Fund 8 Power Supply Costs (Ending June 30, 2017) 9 Budgeted Year to Date % of Budget Generation $ 29,873,610 $ 27,525,404 92% Transmission $ 9,125,930 $ 7,696,161 84% Management Services $ 1,435,440 $ 1,473,868 103% Total Power Supply Costs $ 40,434,980 $ 36,695,433 91% 9 Load Coverage 140,000 120,000 100,000 -c 80,000 2 60,000 40,000 20,000 a P Q4-2017 Q1-2018 Q2-2018 Q3-2018 Coverage Target Load 10 MWh Load ROC Matrix Target Load Coverage (Including Purchases) Q4 — 2017 103,739 80% 81% Q1 — 2018 100,235 77% 81% Q2 — 2018 109,621 67% 81% Q3 — 2018 133,331 60% 60% 140,000 120,000 100,000 -c 80,000 2 60,000 40,000 20,000 a P Q4-2017 Q1-2018 Q2-2018 Q3-2018 Coverage Target Load 10 City Council Strategic Areas of Focus • Customer • Technology • Financial • Reliability • Workforce