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Home My WebLink AboutMinutes - October 9, 2018 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, OCTOBER 9, 2018 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, October 9, 2018, commencing at 7:03 a.m. Present: Council Member Chandler, Council Member Kuehne, and Mayor Nakanishi Absent: Council Member Johnson, and Mayor Pro Tempore Mounce Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo B. Topic(s) B-1 Fourth Quarter Fiscal Year 2017/18 Water, Wastewater, and Electric Utility Department Financial Reports (CM) Rates & Resources Manager Melissa Price provided a PowerPoint presentation regarding the Electric Utility quarterly update for the period ending June 30, 2018. Specific topics of discussion included cash flow summary, cash balances, reserve policy, Capital Improvement projects five- year spending plan, power sales, Energy Cost Adjustment revenue, operating results, power supply costs, load coverage, and Risk Oversight Committee report. Electric Utility Director Elizabeth Kirkley provided a PowerPoint presentation regarding the City Council strategic areas of focus. Council Member Kuehne reported that he and Council Member Chandler met with Senator Galgiani and an Assemblymember from Lockeford who both expressed an interest in writing a letter regarding the 230 kV project when the timing is right to help move the project along. Mike Lusk posed questions regarding the westward connection on Eight Mile Road for the 230 kV project, stating he thought that route had been abandoned. Ms. Kirkley confirmed that the westward connection was no longer a part of the scope of the project, but there is a new section that will loop to the 230 kV station east of Lockeford. Mr. Lusk further questioned whether the City tracks time -of -day usage and if rate payers will be effected by that in the energy cost adjustment. City Manager Schwabauer explained that Lodi does not have time of usage charges that are passed onto rate payers on an hourly basis; instead, the City purchases high -load and low -load power at different rates in the power market to meet appropriate demands during low -usage times in the morning/late evening and high -usage times during prime time hours. Further, Mr. Lusk pointed out that wait times at the Finance Department continue to be lengthy, he sees very few people utilizing the payment kiosks, and customer service representatives at the payment windows are often pulled away to handle customers with more specialized needs, leaving only one teller to handle the demand. He suggested alternate staff be trained to handle the window during those times. Deputy City Manager Keys reported that the City is looking into a queue management system that may help in this regard. Finally, Mr. Lusk suggested the Lodi Electric Utility Department do a better public relations job in advertising the rate structures and communicating to the public that Lodi's rates are lower than PG&E's. Myrna Wetzel also complained about the lengthy wait times in the Finance Department lines and shared her observations from talking to customers in line who have shared their experiences, complaints, and comments, stating she believes a majority of people do not utilize the payment kiosks because it does not give change for a payment. Any overage is applied as a credit to their next month's bill; however, many people cannot afford to pay more than their balance because 1 they are on a fixed income or do not have a high -paying job. Customers also choose not to call the Finance Department because the lines go unanswered. She further complained that too many Shirtsleeve Sessions have been cancelled this year. Public Works Utilities Manager Lance Roberts provided a PowerPoint presentation regarding the Water/Wastewater quarterly update for the period ending June 30, 2018. 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 operational and regulatory activities. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 8:09 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 2 TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Fourth Quarter Fiscal Year 2017/18 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: October 9, 2018 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive utility financial reports for the fourth quarter of Fiscal Year 2017/18. 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 October 9, 2018. 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. AK: LT Andrew Keys Deputy City Manager/Internal Services Director APPROVED: tephen wabauer, City Manager Public Works Department Water/Wastewater FY 18 Quarterly Update (Ending June 30, 2018) City Council Shirtsleeve Session October 9, 2018 1 Wastewater Fund Cash Flow Summary (Ending June 30, 2018) *Of the remaining capital budget, $7.2M or 76% of the total budget was rolled to the next FY in encumbered contracts 2 Budget Actuals % of Budget Revenue Sales 15,108,850 14,863,543 98% Development Impact Mitigation Fees 1,266,190 559,132 44% Other (interest, septic, misc.) 2,575,140 1,003,463 39% Total Revenues 18,950,180 16,426,138 87% Expenses Operating 8,023,158 7,450,179 93% Capital 9,441,226 2,063,603* 22% Debt Service 3,465,000 3,121,413 90% Cost of Services Payment To General Fund 1,108,270 1,108,270 100% Total Expenses 22,037,654 13,743,465 62% Beginning Cash (Operations Only) 16,415,483 Ending Cash (Operations Only) 15,478,578 Days Cash (Excluding Capital) 484 of Target — 90 Days Cash on Hand 537% *Of the remaining capital budget, $7.2M or 76% of the total budget was rolled to the next FY in encumbered contracts 2 Wastewater Operating Results (Ending June 30, 2018) 3 Budget Actuals % of Budget Personnel $ 3,727,545 $ 3,856,918 103% Supplies, Materials, Services $ 2,725,718 $ 2,384,205 87% Equipment, Land, Structures $ 449,335 $ 163,928 36% Other Payments $ 406,160 $ 298,540 74% Utilities $ 686,090 $ 726,588 106% Work for Others $ 28,310 $ 20,000 71% Total Operating Expenses $ 8,023,158 $ 7,450,179 93% 3 Wastewater Funds Cash Balances (Ending June 30, 2018) 18,000,000 16,000,000 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 326% 206% 537% 429% 14/15 15/16 16/17 17/18 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 4 Operating (530) 15,478,578 Utility Capital / Infrastructure Replacement (531) 246,851 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) 120,231 Wastewater IMF (533) 809,400 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 930,384 Total 18,085,444 18,000,000 16,000,000 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 326% 206% 537% 429% 14/15 15/16 16/17 17/18 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 4 Wastewater Planned Capital Projects Villa Fiore Reimbursement Lockeford Street Improvements Storm Drain Trash Handling Water Meter Program Phase 7 MSC Security Improvements Misc. System Relocations Misc. Wastewater Taps Collection System Capacity Enhancement Projects Pipeline Condition Assessment Main Replacement Project #7 Northeast Sewer Lift Pipe Repl. Vinewood Storm Water Pump Rehab Lincoln Storm Pump Rehab Vehicles/Equipment Upgrade Blowers Irrigation Improvements Plant Maintenance Improvements Digester #4 Cleaning Lagoon Cleaning Pump & Equipment Upgrades Corrosion Repairs Electrical/Screen/SCADA Design Electrical Upgrades/SCADA Construction White Slough Recycled Water Storage Field #5 Road Repair Miscellaneous Future Projects Totals FY 17-18 FY 18-19 FY 19-20 FY 20-21 9,974 930,000 100,000 750,000 750,000 750,000 90,857 35,000 35,000 35,000 35,000 2,906 40,000 40,000 40,000 20,000 200,000 191,397 500,000 35,185 2,000,000 2,600,000 2,000,000 523 60,000 6,290 100,000 75,000 439,384 135,000 150,000 150,000 750,000 69,069 1,650,000 53,823 55,000 85,000 140,000 220,000 300,000 345,000 250,866 308,432 800,000 900,000 7,000,000 604,545 4,000,000 352 150,000 100,000 100,000 100,000 $2,063,603 $13,075,000 $4,935,000 $10,215,000 5 Water Fund Cash Flow Summary (Ending June 30, 2018) *Included in the budget was $5.2M for the Water Meter Project Phase 8 which was delayed **Of the remaining capital budget, $1.1M or 1% of the total budget was rolled to the next FY in encumbered contracts 6 Budget Actuals % of Budget Revenue Sales 13,136,300 13,005,023 99% Development Impact Mitigation Fees 520,690 337,657 65% Other (interest, tap fees, water meters, misc.) 1,065,530 1,093,030 103% Total Revenues 14,722,520 14,435,710 98% Expenses Operating 6,966,090 6,195,601 89% Capital 11,045,415* 4,371,021** 40% Debt Service 2,967,660 2,807,328 95% Cost of Services Payment To General Fund 820,560 820,560 100% Total Expenses 21,799,726 14,194,510 65% Beginning Cash (Operations Only) 3,713,488 Ending Cash (Operations Only) 3,226,517 Days Cash (Excluding Capital) 120 % of Target — 90 Days Cash on Hand 133% *Included in the budget was $5.2M for the Water Meter Project Phase 8 which was delayed **Of the remaining capital budget, $1.1M or 1% of the total budget was rolled to the next FY in encumbered contracts 6 Water Operating Results (Ending June 30, 2018) 7 Budget Actuals % of Budget Personnel $ 3,005,815 $ 2,858,502 95% Supplies, Materials, Services $ 1,643,425 $ 1,164,740 71% Equipment, Land, Structures $ 110,000 $ 7,942 7% Other Payments $ 1,543,100 $ 1,537,296 100% Utilities $ 563,750 $ 518,271 92% Work for Others $ 100,000 $ 108,850 109% Total Operating Expenses $ 6,966,090 $ 6,195,601 89% 7 Water Funds Cash Balances (Ending June 30, 2018) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, 000 Actual Reserves vs. Target 264% 238% 145% 133% AAA 14/15 15/16 16/17 17/18 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 8 Operating (560) 3,226,517 Utility Capital / Infrastructure Replacement (561) 144,411 IMF (562) 1,079,382 PCE/TCE Settlements 9,482,820 PCE/TCE Rates (565) 4,040,262 Total 17, 973, 392 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, 000 Actual Reserves vs. Target 264% 238% 145% 133% AAA 14/15 15/16 16/17 17/18 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 8 Water Planned Capital Projects Water Meter Program Lockeford Street Imprv. Water Taps Misc. Water Mains GAC Replacement Meter Shop Design/Construction Water Plant Generator MSC Security Improvements Well 7 Pump Rehab Well 14 Pump Rehab Well 16 Pump Rehab Well 21 Pump Rehab Well 23 Pump Rehab Well 24 Rehab Well 27 GAC Treatment & Standby Generator Well 28 GAC Treatment Vehicles/Equipment FY 17-18 FY 18-19 FY 19-20 FY 20-21 3,759,502 3,630,000 2,350,000 1,000,000 400,000 16,728 75,000 75,000 75,000 50,000 50,000 50,000 300,000 300,000 15,800 200,000 300,000 35,000 175,000 166,000 166,000 200,000 80,000 6,339 165,000 70,000 750,000 70,000 950,000 20,354 120,000 80,000 40,000 Totals 3,818,723 5,000,000 3,841,000 3,081,000 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 18 Quarterly Update (Ending June 30, 2018) City Council Shirtsleeve Session October 9, 2018 Electric Utility Fund Cash Flow Summary (June 30, 2018) Beginning Cash Balance (6/30/17) Budget Actuals % of Budget Revenue 26,573,007 Reserve Policy Target % of Target Sales Revenues 69,828,170 69,246,709 99% Development Impact Fees 143,470 137,611 96% Other Revenues (interest, misc) 4,024,990 4,180,967 104% Total Revenues 73,996,630 73,565,287 99% Expenses Purchase Power* 41,822,160 39,893,145 95% Non Power 14,557,637 11,762,566 81% Capital Projects 3,923,135 2,718,234 69% Debt Service 5,538,340 5,583,667 101% Cost of Service/Capital Xfer 2,393,690 2,393,690 100% In -lieu Transfer to General Fund 7,158,850 7,158,850 100% Total Expenses 75,393,812 69,510,152 92% Beginning Cash Balance (6/30/17) 22,713,089 Ending Cash Balance (6/30/18) 26,573,007 Reserve Policy Target % of Target 23,301,000 114% 2 Electric Utility Funds Cash Balances (Ending June 30, 2018) 3 Operating Funds $ 14,922,758 Utility Outlay Reserve Fund $ 750,000 Public Benefits Fund $ 2,450,462 Impact Fee Fund $ 635,018 Solar Surcharge Fund $ 316,235 Greenhouse Gas Fund $ 7,498,534 Total $ 26,573,007 3 Electric Utility Reserve Policy (June 30, 2018) Purpose Target Actual* Operating Reserves $ 22, 301, 000 $ 25,823,007 Capital Reserve $ 1,000,000 $ 750,000 Total Target $ 23,301,000 $ 26,573,007 *Includes cash held locally and at NCPA $30,000 $25,000 $20,000 in c $15,000 $10,000 $5,000 $- Actual Reserves vs. Target 116% 95% 1 1 1 100% FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 • Actual ❑ Target 1 Cash balances support City Council approved reserve requirements and provide funds for pay as you go Capital Improvement Projects. 4 Capital Improvement Project 5 -Year Spending Plan Project FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 Distribution Capacity Program $68,575 $960,000 $250,000 $250,000 $250,000 Underground / Overhead Maint* $2,129,108 $1,300,000 $1,400,000 $1,400,000 $1,400,000 Streetlight Maintenance / Repair $57,614 $90,000 $50,000 $50,000 $50,000 LED Streetlight Improvements $166,428 $90,000 $200,000 $200,000 $200,000 230 kV Interconnection Project $22,747 $60,000 $60,000 $60,000 $0 Substation Maint / Improvements $7,600 $525,000 $350,000 $650,000 $1,500,000 Building & Security Improvements $198,316 $1,035,000 $50,000 $50,000 $50,000 Vehicles & Equipment $67,846 $264,000 $350,000 $250,000 $370,000 Total Projects $2,718,234 $4,324,000 $2,710,000 $2,910,000 $3,820,000 *Includes work for others. 5 Power Sales (Ending June 30, 2018) Power Sales Customer Class (kWh) Budget Actual Residential 151,255,540 155,539,509 Small Commercial 160,043,844 154,551,448 Large Commercial/Small Industrial 49,188,321 45,644,331 Industrial 71,906,433 69,422,586 Total 432,394,138 425,157,874 Revenue ($) Customer Class Budget Actual Average Ran Residential $ 27,937,783 $ 27,967,918 $ 0.1798 Small Commercial $ 27,302,858 $ 26,401,194 $ 0.1708 Large Commercial/Small Industrial $ 6,939,313 $ 6,873,986 $ 0.1506 Industrial $ 7,648,216 $ 8,003,611 $ 0.1153 Total $ 69,828,170 $ 69,246,709 $ 0.1629 6 ECA Revenue (Ending June 30, 2018) Customer Class Total ($) Residential $ 1,353,012 Small Commercial $ 1,645,947 Large Commercial / Small Industrial $ 505,518 Industrial $ 687,839 Total Revenue $ 4,192,316 7 Electric Utility Fund Operating Results (Ending June 30, 2018) 8 FY18 Budget FY18 Actual % of Budget Personnel $ 8,906,935 $ 8,268,021 93% Supplies, Materials, Services $ 3,836,042 $ 2,119,660 55% Other Payments $ 1,730,760 $ 1,309,818 76% Utilities $ 83,900 $ 65,067 78% Total Operating Expenses $ 14,557,637 $ 11,762,566 81% 8 Power Supply Costs (Ending June 30, 2018) 9 Budgeted Year to Date % of Budget Generation $ 29,919,900 $ 28,816,249 96% Transmission $ 10,503,530 $ 9,611,374 92% Management Services $ 1,398,730 $ 1,465,522 105% Total Power Supply Costs $ 41,822,160 $ 39,893,145 95% 9 Load Coverage PF MWh Load ROC Matrix Target Load Coverage (Including Purchases) Q4 — 2018 104,752 80.0% 82.7% Q1 — 2019 99,306 80.0% 80.1% Q2 — 2019 111,308 70.0% 71.9% Q3 — 2019 137,322 60.0% 67.0% t g 2 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 • Q4-2018 Q1-2019 Q2-2019 Q3-2019 M Cove rage Target —s—Load Includes energy purchases through July 2018 as approved by the Risk Oversight Committee (ROC) 10 Risk Oversight Committee Report • Forward Energy Purchases Completed • Cap and Trade Activities • Hydrology Conditions Update • 2017 RPS and GHG Reports • Low Carbon Fuel Standard Program Registration • 230 kV Project Update City Council Strategic Areas of Focus • Customer • Technology • Financial • Reliability • Workforce DECLARATION OF POSTING On Thursday, October 4, 2018, in the City of Lodi, San Joaquin County, California, a copy of the October 9, 2018 Shirtsleeve Session agenda (attached and marked as Exhibit A) was posted on the door of Room No, =i l of Fairmont Rehabilitation Hospital, 960 South Fairmont Avenue, Lodi, California. I declare under penalty of perjury that the foregoing is true and correct. Executed on October 4, 2018, at Lodi, California. ORDERED BY: Posted by: r` JENNIFER M. FERRAIOLO CITY CLERK 10/14 ? ( (�9 �ture) (Date) Jenn(4, \lp c(Print nam ere) Fairmont Rehabilitation Hospital (Person who posted the agenda) DECLARATION OF POSTING On Thursday, October 4 2018, in the City of Lodi, San Joaquin County, California, a copy of the October 9, 2018, Shirtsleeve Session City Council agenda (attached and marked as Exhibit A) was posted at 1311 Midvale Road, Lodi, California. declare under penalty of perjury that the foregoing is true and correct. Executed on October 4, 2018, at Lodi, California. ORDERED BY: Posted by: JENNIFER M. FERRAIOLO CITY CLERK 104- l k Je er M. Ferraiolo (Date) Cit Jerk LODI CITY COUNCIL Carnegie Forum 305 West Pine Street, Lodi *and via conference call: 1311 Midvale Road Lodi, CA 95240 Fairmont Rehab Hospital 960 S. Fairmont Avenue Lodi, CA 95240 "SHIRTSLEEVE" SESSION Date: October 9, 2018 Time: 7:00 a.m. St. For information regarding this Agenda please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 EXHBIT Al Informal Informational Meeting A. Roll Call by City Clerk B. Topic(s) B-1 Fourth Quarter Fiscal Year 2017/18 Water, Wastewater, and Electric Utility Department Financial Reports (CM) C. Comments by Public on Non -Agenda Items D. Adjournment Pursuant to Section 54954.2(a) of the Government Code of the State of California, this agenda was posted at least 72 hours in advance of the scheduled meeting at a public place freely accessible to the public 24 hours a day. k. nifer M. rraiolo ity Clerk All staff reports or other written documentation relating to each item of business referred to on the agenda are on file in the Office of the City Clerk, located at 221 W Pine Street, Lodi, and are available for public inspection. If requested, the agenda shall be made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. To make a request for disability -related modification or accommodation contact the City Clerk's Office as soon as possible and at least 72 hours prior to the meeting date. Language interpreter requests must be received at least 72 hours in advance of the meeting to help ensure availability, Contact Jennifer M. Ferraiolo at (209) 333-6702. Solicitudes de interpretacibn de idiomas deben ser recibidas por to menos con 72 horas de anticipacidn a la reunion para ayudar a asegurar la disponibilidad. Llame a Jennifer M. Ferraiolo (209) 333-6702. J:\CITYCLRK\AGENDA\SHIRTSLVISHRTSLV. DOC