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Home My WebLink AboutMinutes - January 23, 2018 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, JANUARY 23, 2018 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, January 23, 2018, commencing at 7:02 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 First Quarter Fiscal Year 2017/18 Water, Wastewater, and Electric Utility Department Financial Reports (CM) The following staff members provided PowerPoint presentations in relation to the first quarter Fiscal Year 2017/18 Water, Wastewater, and Electric Utility Department financial reports: 1. Public Works Utilities Manager Lance Roberts - 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. Electric Utility Rates & Resources Manager Melissa Price - specific topics of discussion included Electric Utility fund cash flow summary, cash balances, Reserve Policy, five-year spending plan, power sales, energy cost adjustment revenue, operating results, power supply costs, and load coverage; and 3. Electric Utility Director Elizabeth Kirkley - specific topic of discussion included City Council strategic areas of focus, covering the categories of customer, technology, financial, reliability, and workforce. Mike Lusk questioned whether PG&E's new peak hour surcharge will create an uptick in Lodi's utility rates, specifically in relation to transmission charges and cost of purchase from the California Independent System Operator, to which City Manager Schwabauer responded in the negative. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 7:35 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 1 TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: First Quarter Fiscal Year 2017/18 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: January 23, 2018 PREPARED BY: Deputy City Manager RECOMMENDED ACTION Receive utility financial reports for the first 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 January 23, 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/Ist APPROVED: Andrew Keys Deputy City Manager n c uer, City Manager Public Works Department Water/Wastewater FY 18 Quarterly Update (Ending September 30, 2017) City Council Shirtsleeve Session January 23, 2018 1 Wastewater Fund Cash Flow Summary (Ending September 30, 2017) 2 Budget Actuals % of Budget Revenue Sales 15,108,850 3,551,522 24% Development Impact Mitigation Fees (wastewater & storm) 1,266,190 83,353 7% Other (interest, septic, misc.) 2,575,140 56,125 2% Total Revenues 18,950,180 3,691,000 19% Expenses Operating 7,279,270 1,812,233 25% Capital 6,346,226 64,682 1% Debt Service 3,465,000 2,108,122 61 Cost of Services Payment To General Fund 1,102,490 275,623 25% Total Expenses 18,192,986 4,260,660 23% Beginning Cash (Operations Only) 12,967,860 Ending Cash (Operations Only) 13,445,628 Days Cash (Excluding Capital) 288 of Target — 90 Days Cash on Hand 320% 2 Wastewater Operating Results (Ending September 30, 2017) 3 Budget Actuals % of Budget Personnel $ 3,577,482 $ 997,332 28% Supplies, Materials, Services $ 2,524,538 $ 390,766 15% Equipment, Land, Structures $ 255,000 $ 55,107 22% Other Payments $ 233,660 $ 192,655 82% Utilities $ 686,090 $ 176,373 26% Work for Others $ 2,500 $ - 0% Total Operating Expenses $ 7,279,270 $ 1,812,233 25% 3 Wastewater Funds Cash Balances (Ending September 30, 2017) 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 320% 429% 326% 206% 14/15 15/16 16/17 17/18 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 4 Operating (530) 13,445,628 Utility Capital / Infrastructure Replacement (531) 467,499 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) (1,650,000) Wastewater IMF (533) 857,816 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 925,860 Total 14,546,803 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 320% 429% 326% 206% 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 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 FY 17-18 FY 18-19 FY 19-20 FY 20-21 930,000 25,000 35,000 35,000 35,000 40,000 40,000 40,000 20,000 208,000 250,000 2,750,000 200,000 450,000 150,000 156,000 162,000 750,000 1,200,000 700,000 220,000 40,000 80,000 300,000 175,000 175,000 136,000 660,000 1,200,000 7,305,000 3,951,000 300,000 5,001,890 25,000 100,000 104,000 108,000 Totals $3,211,000 $12,001,890 $8,548,000 $4,296,000 5 Water Fund Cash Flow Summary (Ending September 30, 2017) 6 Budget Actuals % of Budget Revenue Sales 13,136,300 3,942,287 30% Development Impact Mitigation Fees 520,690 53,325 10% Other (interest, tap fees, water meters, misc.) 1,065,530 (58,263) (5)% Total Revenues 14,722,520 3,937,349 27% Expenses Operating 6,826,960 1,973,769 29% Capital 11,185,415 287,849 3% Debt Service 2,967,660 (168,138) (6)% Cost of Services Payment To General Fund 814,490 203,623 25% Total Expenses 21,794,525 2,297,103 11% Beginning Cash (Operations Only) 3,597,764 Ending Cash (Operations Only) 4,098,444 Days Cash (Excluding Capital) 169 of Target — 90 Days Cash on Hand 188% 6 Water Operating Results (Ending September 30, 2017) 7 Budget Actuals % of Budget Personnel $ 2,865,815 $ 926,939 32% Supplies, Materials, Services $ 1,644,295 $ 163,682 10% Equipment, Land, Structures $ 110,000 $ - 0% Other Payments $ 1,543,100 $ 709,503 46% Utilities $ 563,750 $ 173,645 31% Work for Others $ 100,000 $ - 0% Total Operating Expenses $ 6,826,960 $ 1,973,769 29% 7 Water Funds Cash Balances (Ending September 30, 2017) 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% 188% AAA 14/15 15/16 16/17 17/18 Target Actual Amounts above reserve target are held for scheduled capital maintenance 8 Operating (560) 4,098,444 Utility Capital / Infrastructure Replacement (561) 0 IMF (562) 758,688 PCE/TCE Settlements 9,682,492 PCE/TCE Rates (565) 4,070,297 Total 18, 609, 921 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% 188% AAA 14/15 15/16 16/17 17/18 Target 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 Totals FY 17-18 FY 18-19 FY 19-20 FY 20-21 3,215,000 3,630,000 2,421,000 75,000 75,000 75,000 50,000 50,000 50,000 300,000 300,000 25,000 200,000 2,000,000 300,000 25,000 166,000 175,000 206,000 191,000 212,000 196,000 212,000 40,000 42,000 42,000 $3,405,000 $4,961,000 $5,284,000 $787,000 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 September 30, 2017) City Council Shirtsleeve Session January 23, 2018 1 Electric Utility Fund Cash Flow Summary (Ending September 30, 2017) Beginning Cash Balance (6/30/17) Budget Actuals % of Budget Revenue 26,658,374 Reserve Policy Target % of Target Sales Revenues 69,828,170 22,414,789 32% Development Impact Fees 143,470 28,665 20% Other Revenues (interest, misc) 4,024,990 1,141,547 28% Total Revenues 73,996,630 23,585,001 32% Expenses Purchase Power 41,822,160 10,210,642 24% Non Power 14,557,637 3,059,862 21% Capital Projects 3,923,135 257,789 7% Debt Service 5,538,340 4,110 0% Cost of Service/Capital Xfer 2,388,490 597,122 25% In -lieu Transfer to General Fund 7,158,850 1,789,712 25% Total Expenses 75,388,612 15,919,237 21% Beginning Cash Balance (6/30/17) 22,713,089 Ending Cash Balance (9/30/17) 26,658,374 Reserve Policy Target % of Target 23,301,000 114% 2 Electric Utility Funds Cash Balances (Ending September 30, 2017) *Includes funds held locally and at NCPA 3 Operating Funds* $ 15,845,195 Utility Outlay Reserve Fund $ 562,500 Public Benefits Fund $ 1,639,564 Impact Fee Fund $ 1,028,090 Solar Surcharge Fund $ 374,706 Greenhouse Gas Fund $ 7,208,319 Total $ 26,658,374 *Includes funds held locally and at NCPA 3 Electric Utility Reserve Policy (Ending September 30, 2017) Purpose Target Actual* Operating Reserves $ 22,301,000 $ 26,095,874 Capital Reserve $ 1,000,000 $ 562,500 Total Target $ 23,301,000 $ 26,658,374 *Includes cash held locally and at NCPA $30,000 $25,000 $20,000 c $15,000 ▪ $10,000 $5,000 s - Actual Reserves vs. Target —95% 98% 00% FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 ▪ Act ual ❑ Ta rget 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 $700,000 $250,000 $250,000 $250,000 $250,000 Underground Maintenance $1,100,000 $550,000 $700,000 $700,000 $700,000 Streetlight Maintenance / Repair $180,000 $90,000 $90,000 $90,000 $90,000 LED Streetlight Improvements $90,000 $91,000 $91,000 $91,000 $91,000 230 kV Interconnection Project $60,000 $0 $0 $0 $0 Overhead Maintenance* $542,623 $350,000 $275,000 $275,000 $275,000 Substation Maint / Improvements $200,000 $65,000 $200,000 $500,000 $1,350,000 Building & Security Improvements* $497,492 $100,000 $250,000 $250,000 $0 Meter Data Management System $300,000 $0 $850,000 $850,000 $0 Vehicles & Equipment* $253,020 $35,000 $350,000 $250,000 $315,000 Total Projects $3,923,135 $1,531,000 $3,056,000 $3,256,000 $3,071,000 *Includes previous year rollover. 5 Power Sales (Ending September 30, 2017) Power Sales (kWh) Customer Class Budget Actual Residential 151,255,540 59,236,397 Small Commercial 160,043,844 47,502,675 Large Commercial/Small Industrial 49,188,321 12,709,920 Industrial 71,906,433 20,794,925 Total 432,394,138 140,243,917 Revenue ($) Customer Class Budget Actual Average Rate Residential $ 27,937,783 $ 10,067,399 $ 0.1700 Small Commercial $ 27,302,858 $ 7,997,704 $ 0.1684 Large Commercial/Small Industrial $ 6,939,313 $ 1,929,197 $ 0.1518 Industrial $ 7,648,216 $ 2,420,489 $ 0.1164 Total $ 69,828,170 $ 22,414,789 $ 0.1598 6 ECA Revenue (Ending September 30, 2017) Customer Class Total ($) Residential ($413,656) Small Commercial ($334,532) Large Commercial / Small Industrial ($89,537) Industrial ($18,931) Total Revenue ($856,656) 7 Electric Utility Fund Operating Results (Ending September 30, 2017) 8 FY18 Budget FY18 Actual % of Budget Personnel $ 8,906,935 $ 2,471,286 28% Supplies, Materials, Services $ 3,836,042 $ 347,880 9% Other Payments $ 1,730,760 $ 230,665 13% Utilities $ 83,900 $ 10,031 12% Total Operating Expenses $ 14,557,637 $ 3,059,862 21% 8 Power Supply Costs (Ending September 30, 2017) 9 Budgeted Year to Date % of Budget Generation $ 29,919,900 $ 6,963,981 23% Transmission $ 10,503,530 $ 2,882,446 27% Management Services $ 1,398,730 $ 364,215 26% Total Power Supply Costs $ 41,822,160 $ 10,210,642 24% 9 Load Coverage 140,000 120,000 100,000 80,000 2 60,000 40,000 20,000 Q1-2018 Q2-2018 Q3-2018 Q4-2018 M Cove rage Target —s—Load 10 MWh Load ROC Matrix Target Load Coverage (Including Purchases) Q1 - 2018 100,235 80% 81% Q2 - 2018 109,621 80% 80% Q3 - 2018 133,331 70% 70% Q4 - 2018 104,073 60% 62% 140,000 120,000 100,000 80,000 2 60,000 40,000 20,000 Q1-2018 Q2-2018 Q3-2018 Q4-2018 M Cove rage Target —s—Load 10 City Council Strategic Areas of Focus • Customer • Technology • Financial • Reliability • Workforce