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Home My WebLink AboutMinutes - February 26, 2019 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, FEBRUARY 26, 2019 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, February 26, 2019, commencing at 7:01 a.m. Present: Council Member Johnson, Council Member Mounce, Council Member Nakanishi, Mayor Pro Tempore Kuehne, and Mayor Chandler Absent: None Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo NOTE: Council Member Johnson participated in the meeting via teleconference. NOTE: Council Member Nakanishi arrived at 7:03 a.m. NOTE: Council Member Mounce left at 7:42 a.m. B. Topic(s) B-1 First and Second Quarters Fiscal Year 2018/29 Water, Wastewater, and Electric Utility Department Financial Reports (CM) Electric Utility Interim Director Melissa Price provided a PowerPoint presentation regarding the Electric Utility Department quarterly update for the period ending December 31, 2018. Specific topics of discussion included Electric Utility cash flow summary, cash balances, reserve policy, five-year spending plan, power sales, ECA revenue, operating results, power supply costs, load coverage, Risk Oversight Committee report highlights, and City Council strategic areas of focus. Public Works Utilities Manager Lance Roberts provided a PowerPoint presentation regarding the Water/Wastewater quarterly update for the period ending December 31, 2018. Specific topics of discussion included Wastewater cash flow summary, operating results, cash balances, and planned Capital projects; Water cash flow summary, operating results, cash balances, and planned Capital projects; and Water/Wastewater Utility activities. B-2 Receive Update on City of Lodi Customer Service Division (CM) Revenue Manager Tarra Sumner provided a PowerPoint presentation regarding the Customer Service Division update. Specific topics of discussion included current status, teamwork, processes, process documentation, technology, process improvement plan, and technology improvement plan. In response to Council Member Nakanishi, Electric Utility Interim Director Melissa Price stated staff will provide Council with information relating to the percentage of total revenue from solar because it falls across different rate classes. In response to Mayor Chandler, Ms. Price stated there are roughly 750 to 800 solar customers in the City and the State dictates how solar customers are to be billed under net metering. Solar customers receive a bill every month, which shows a charge or credit that rolls over month to month, and at the end of 12 months the customer either receives a credit or a bill. The City's new system does not have the ability to track late charges for solar customers because of the year- long billing system. Deputy City Manager Andrew Keys assured Council that the solar true -up is not a shock to solar customers because that is the agreement they entered into when they 1 installed their solar system. The $47,000 in bad debt for solar customers is a large number because it covers a number of years. These customers will have more gracious terms in order to get caught up before shutting off power. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 8:12 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 2 TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM Bwi1 AGENDA TITLE: First and Second Quarters Fiscal Year 2018/19 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: February 26, 2019 PREPARED BY: Deputy City Manager RECOMMENDED ACTION Receive utility financial reports for the first and second quarters of Fiscal Year 2018/19. 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 February 26, 2019. FISCAL IMPACT: There is no fiscal impact from the preparation of this report. FUNDING AVAILABLE: Adequate funding is available in the Fiscal Year 2018-19 budget for the items on this report. Andrew Keys Deputy City Manager/Internal Services Director APPROVED: City Manager Public Works Department Water/Wastewater FY 19 Quarterly Update (Ending December 31, 2018) City Council Shirtsleeve Session February 26, 2019 1 Wastewater Fund Cash Flow Summary (Ending December 31, 2018) 2 Budget Actuals % of Budget Revenue Sales 15,208,130 7,638,337 50% Development Impact Mitigation Fees 1,062,470 884,954 83% Other (interest, septic, misc.) 3,550,000 149,611 4% Total Revenues 19,820,600 8,672,902 44% Expenses Operating 8,064,710 3,794,982 47% Capital 14,856,800 5,065,373 34% Debt Service 3,343,510 2,345,083 70% Cost of Services Payment To General Fund 1,083,710 541,855 50% Total Expenses 27,348,730 11,747,293 43% Beginning Cash (Operations Only) 15,365,403 Ending Cash (Operations Only) 13,972,708 Days Cash (Excluding Capital) 376 of Target — 90 Days Cash on Hand 418% 2 Wastewater Operating Results (Ending December 31, 2018) 3 Budget Actuals % of Budget Personnel $ 3,920,820 $ 2,231,916 57% Supplies, Materials, Services $ 2,670,360 $ 814,637 31% Equipment, Land, Structures $ 300,000 $ 57,541 19% Other Payments $ 406,160 $ 281,576 69% Utilities $ 739,060 $ 409,312 55% Work for Others $ 28,310 $ - 0% Total Operating Expenses $ 8,064,710 $ 3,794,982 47% 3 Wastewater Funds Cash Balances (Ending December 31, 2018) 18,000,000 16,000,000 14,000,000 12,000,000 10,000..000 Actual Reserves vs. Target 534% 429% 326% 8,000,000 206% 6,000,000 4,000,000 2,000,000 0 418% 111 14/15 15/16 16/17 17/18 18/19 rae- Amounts above reserve target are held for scheduled capital maintenance 4 Operating (530) 13,972,708 Utility Capital / Infrastructure Replacement (531) 34,573 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) 18,579 Wastewater IMF (533) 1,423,071 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 1,199,583 Total 17,148,514 18,000,000 16,000,000 14,000,000 12,000,000 10,000..000 Actual Reserves vs. Target 534% 429% 326% 8,000,000 206% 6,000,000 4,000,000 2,000,000 0 418% 111 14/15 15/16 16/17 17/18 18/19 rae- 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 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. Sewer Lift Station Wet Well Rehab Kofu Storm Water Pump Rehab Salas Storm Water Pump Rehab Vinewood Storm Water Pump Rehab Lincoln Storm Pump Rehab Vehicles/Equipment Upgrade Blowers Irrigation Improvements Plant Maintenance Improvements Compliance Studies and Reports Aeration Difuser Replacement Digester #4 Cleaning Pump & Equipment Upgrades Electrical/Screen/SCADA Design Electrical Upgrades/SCADA Construction White Slough Recycled Water Storage Field #5 Road Repair Miscellaneous Future Projects Totals FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 930,000 100,000 750,000 750,000 35000 35,000 35,000 35,000 35,000 35,000 40,000 40,000 40,000 40,000 40,000 20,000 200,000 500,000 2,000,000 2,600,000 2,000,000 60,000 250,000 200,000 200,000 100,000 75,000 135,000 150,000 150,000 75,000 75,000 750,000 1,300,000 750,000 235,000 265,000 320,000 250,000 260,000 200,000 200,000 200,000 200,000 200,000 500,000 220,000 345,000 200,000 900,000 600,000 1,000,000 7,000,000 4,000,000 150,000 100,000 100,000 $11,455,000 $4,565,000 $2,095,000 $5,550,000 $8,310,000 5 Water Fund Cash Flow Summary (Ending December 31, 2018) 6 Budget Actuals % of Budget Revenue Sales 12,872,190 7,412,881 58% Development Impact Mitigation Fees 476,310 444,319 93% Other (interest, tap fees, water meters, misc.) 1,100,040 54,844 5% Total Revenues 14,448,540 7,912,044 55% Expenses Operating 7,139,150 3,218,906 45% Capital 3,840,895 352,832 9% Debt Service 2,969,160 951,138 32% Cost of Services Payment To General Fund 821,900 410,950 50% Total Expenses 14,771,105 4,933,826 33% Beginning Cash (Operations Only) 3,226,256 Ending Cash (Operations Only) 6,549,796 Days Cash (Excluding Capital) 257 % of Target — 90 Days Cash on Hand 286% 6 Water Operating Results (Ending December 31, 2018) 7 Budget Actuals % of Budget Personnel $ 3,239,320 $ 1,331,438 41% Supplies, Materials, Services $ 1,563,660 $ 452,686 29% Equipment, Land, Structures $ 105,000 $ 2,585 2% Other Payments $ 1,647,500 $ 1,106,626 67% Utilities $ 483,670 $ 325,571 67% Work for Others $ 100,000 $ - 0% Total Operating Expenses $ 7,139,150 $ 3,218,906 45% 7 Water Funds Cash Balances (Ending December 31, 2018) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, 000 0 Actual Reserves vs. Target 264% 238% 286% 1 145% 209% 111 14/15 15/16 16/17 17/18 18/19 ■ Target Actual Amounts above reserve target are held for scheduled capital maintenance 8 Operating (560) 6,549,796 Utility Capital / Infrastructure Replacement (561) 68,850 IMF (562) 1,521,952 PCE/TCE Settlements 9,155,068 PCE/TCE Rates (565) 4,024,722 Total 21, 320, 388 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, 000 0 Actual Reserves vs. Target 264% 238% 286% 1 145% 209% 111 14/15 15/16 16/17 17/18 18/19 ■ 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 Water Meter Replacement Program 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 17 Pump Rehab Well 21 Pump Rehab Well 22 Pump Rehab Well 23 Pump Rehab Well 24 Rehab Rehab Well 25 Pump Rehab Well 27 GAC Treatment & Standby Generator Well 28 GAC Treatment Vehicles/Equipment FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 5,980,000 1,000,000 1,000,000 400,000 75,000 75,000 75,000 75,000 75,000 50,000 50,000 50,000 50,000 50,000 75,000 75,000 300,000 300,000 300,000 300,000 200,000 300,000 35,000 175,000 170,000 166,000 185,000 200,000 166,000 80,000 165,000 200,000 70000 750,000 70,000 950,000 120,000 80,000 40,000 50,000 50,000 Totals 1,370,000 7,471,000 2,081,000 1,905,000 1,750,000 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 19 Quarterly Update (Ending December 31, 2018) City Council Shirtsleeve Session February 26, 2019 Electric Utility Fund Cash Flow Summary (December 31, 2018) Beginning Cash Balance (6/30/18) Budget Actual % of Budget Revenue 40,422,848 Reserve Policy Target % of Target Sales Revenues 69,708,150 39,061,245 56% Development Impact Fees 178,820 199,430 112% Other Revenues (interest, misc) 3,728,120 1,666,669 45% Total Revenues 73,615,090 40,927,344 56% Expenses Purchase Power 40,699,940 21,179,405 52% Non Power 14,986,240 5,484,956 37% Capital Projects 4,324,000 783,234 18% Debt Service 5,522,890 237,105 4% Cost of Service/Capital Xfer 2,399,040 1,199,520 50% In -lieu Transfer to General Fund* 7,197,380 0 0% Total Expenses 75,129,490 28,884,220 38% Beginning Cash Balance (6/30/18) 26,573,007 Ending Cash Balance (12/31/18) 40,422,848 Reserve Policy Target % of Target 23,714,000 170% *Reflects delayed journal entry. Will be updated for next report. 2 Electric Utility Funds Cash Balances (Ending December 31, 2018) 3 Operating Funds $ 27,514,218 Utility Outlay Reserve Fund $ 875,000 Public Benefits Fund $ 3,346,229 Impact Fee Fund $ 834,069 Solar Surcharge Fund $ 316,539 Greenhouse Gas Fund $ 7,536,793 Total $ 40, 422, 848 3 Electric Utility Reserve Policy (December 31, 2018) Purpose Target Actual* Operating Reserves $ 22,714,000 $ 39,547,848 Capital Reserve $ 1,000,000 $ 875,000 Total Target $ 23,714,000 $ 40,422,848 *Includes cash held locally and at NCPA Actual Reserves vs. Target $45,000 $40,000 $35,000 $30,000 c $25,000 98`46 0 $20,000 in $15,000 $10,000 $5,000 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 1S/19 ■ 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 5 -Year Spending Plan Project FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Distribution Capacity Program $960,000 $250,000 $250,000 $250,000 $250,000 Underground / Overhead Maint* $1,300,000 $1,400,000 $1,400,000 $1,400,000 $1,400,000 Streetlight Maintenance / Repair $90,000 $50,000 $50,000 $50,000 $50,000 LED Streetlight Improvements $90,000 $200,000 $200,000 $200,000 $200,000 230 kV Interconnection Project $60,000 $60,000 $60,000 $0 $0 Substation Maint / Improvements $525,000 $350,000 $650,000 $1,500,000 $150,000 Building & Security Improvements $1,035,000 $50,000 $50,000 $50,000 $50,000 Vehicles & Equipment $264,000 $350,000 $250,000 $370,000 $403,000 Total Projects $4,324,000 $2,710,000 $2,910,000 $3,820,000 $2,503,000 *Includes work for others. 5 Power Sales (Ending December 31, 2018) Power Sales Customer Class (kWh) Budget Actual Residential 157,969,253 83,966,417 Small Commercial 158,823,735 84,609,786 Large Commercial/Small Industrial 49,847,066 25,500,323 Industrial 68,408,946 30,519,065 Total 435,049,000 224,595,591 Revenue ($) Customer Class Budget Actual Average Ran Residential $ 27,288,494 $ 15,768,225 $ 0.1878 Small Commercial $ 26,883,003 $ 15,195,157 $ 0.1796 Large Commercial/Small Industrial $ 7,717,784 $ 4,269,279 $ 0.1674 Industrial $ 7,818,869 $ 3,828,584 $ 0.1254 Total $ 69,708,150 $39,061,245 $ 0.1739 6 ECA Revenue (Ending December 31, 2018) Customer Class Total ($) Residential $ 1,060,465 Small Commercial $ 1,085,939 Large Commercial / Small Industrial $ 335,636 Industrial $ 365,515 Total Revenue $ 2,847,555 7 Electric Utility Fund Operating Results (Ending December 31, 2018) 8 Budget Actual % of Budget Personnel $ 9,457,360 $ 4,448,683 47% Supplies, Materials, Services $ 3,874,880 $ 857,370 22% Other Payments $ 1,575,100 $ 148,703 9% Utilities $ 78,900 $ 30,200 38% Total Operating Expenses $ 14,986,240 $ 5,484,956 37% 8 Power Supply Costs (Ending December 31, 2018) 9 Budget Actual % of Budget Generation $ 28,723,770 $ 15,111,812 53% Transmission $ 10,591,000 $ 5,236,445 49% Management Services $ 1,385,170 $ 831,148 60% Total Power Supply Costs $ 40,699,940 $ 21,179,405 52% 9 Load Coverage Pr MWh Load ROC Matrix Target Load Coverage (Including Purchases) Q2 — 2019 111,084 80.0% 81.2% Q3 — 2019 134,843 76.7% 76.9% Q4 — 2019 99,605 66.7% 66.8% Q1 — 2020 93,740 60.0% 64.2% 160,000 140,000 120,000 100,000 t g80,000 60,000 40,000 20,000 1 1 Q2-2019 Q3-2019 Q4-2019 Q1-2020 M Cove rage Target —•—Load Includes energy purchases through January 2019 as approved by the Risk Oversight Committee (ROC) 10 Risk Oversight Committee Report Highlights • Forward Energy Purchases • Cap and Trade Activities • NCPA Solar Project • 2017 Power Content Label • ECA Update/Review • SB 100 Impact(s) City Council Strategic Areas of Focus • Customer • Technology • Financial • Reliability • Workforce CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Receive Update on the City of Lodi Customer Service Division MEETING DATE: February 26, 2019 PREPARED BY: Revenue Manager 6-2 RECOMMENDED ACTION: Receive an update on the City of Lodi Customer Service Division. BACKGROUND INFORMATION The City's Customer Service (CS) Division strives to provide top of the line service. As such, the department seeks continuous improvement. This discussion continues an ongoing dialogue with the City Council on the challenges the customer service division faces that began in May of 2017. Today's presentation discusses the recent setbacks the department has faced and continues to update on progress to ensure continuous improvement in line with the People, Process, Technology framework introduced at the May 2017 Shirtsleeve. That framework is summarized here and will be used to guide the presentation. People: It is essential to have the right people, with the right training and the right mentality to succeed in all business endeavors, including the CS division. Employees must buy into the philosophy of the division and any proposed changes. Process: The appropriate business rules (policy and procedures) must be in place in order to successfully administer existing programs, provide services and implement new programs. Business rules also establish the parameters of each position's duties, responsibilities, authority level and set clear performance expectations. Technology: Technology is an essential asset to modern organizations. However, technology will never overcome people and processes. Successful technology implementations are contingent on the existence of best practices that pre -date the technology and are widely known (through thorough and consistent training) by high quality employees moving in the same direction at all staff levels. FISCAL IMPACT: There is no impact from this informational presentation. FUNDING AVAILABLE: Not applicable. Andrew Keys, Dep,(ty City Manager APPROVED: elf g" =.°5 --Tal I_ I MI - + en Schwan --r Cit Manager Y g Customer Service Division Update Presented By: Tarra Sumner, Revenue Manager City Council Shirtsleeve Session February 26, 2019 Agenda • Current status — Process — Process Documentation — Technology • Improvement Plan Teamwork "The strength of the team is each individual member. The strength of each member is the team." --Phil Jackson PROCESS Processes • Continued evaluation of route consolidation — Lack of staffing resources has delayed this project • Lock Box Services RFP — Meet and confer with Bargaining Unit scheduled for February 22, 2019 • Citywide Cash Handling Policy — Change the process of City Departments day to day processes of money handling and delivering deposits to Revenue. Processes • Change in Cash Handling Practices — Decreased overtime — Increased customer service efficiency — Decreased wait times at front counter • Considering leveraging of HDL Professional Services for customer improvement — Ability to pay business licenses online — Audit TOT and business licenses — Business License tax revenue discovery Processes • Solar bad debt — Sent out 18 ten day notices equivalent to approximately $47,000 in bad debt • Bad Debt to CB Merchants — Approximately $700,000 — $7,101 paid in the month of February — Working with Fire for their bad debt Process Documentation • Business processes and workflows are not always clearly documented or understood — Standard Operating Procedures (SOPS) underway • Payment Agreement • Bankruptcy • Best practices hampered by technology limitations — Two staff heading to Tyler conference in April for intensive training on ERP and best practices — Considering further leveraging of outside technology resources to improve service TECHNOLOGY Technology • Phone system upgrades — Contract approved 11-7-18 for RFP management — Will provide management data to monitor customer needs and help set customer expectations • Review underway to move parking permits online • Queuing system RFP has been drafted • Check scanner/printer — Give the ability for cashiers to run checks at front counter • Kiosk — $3.1 million revenue collected — 14.9 thousand user transactions IMPROVEMENT PLAN Improvement Plan PEOPLE • Secure additional training on ERP system — Sending Utility Billing Agent to Tyler Conference • Train in advance of all technology rollouts • Offer and encourage training — Purchased on demand customer service training • Each employee assigned weekly assignments • 150 courses including — Improve Customer Satisfaction — Reduce Conflict Between Coworkers — Defuse & Retain Irate Customers — Build Awareness Around Diversity, Inclusion, and Bullying • Improve and maintain positive work culture Process Improvement Plan Winter 2 Spring 201 Summer 2019 Fall 2019/ Winter 2020 • Queuing RFP • Lockbox RFP • Standard Operating Procedures (SOP's) • HDL Contracting of Business License and TOT administration • Bill route consolidation • Bad debt being sent to collections from all departments Process Improvement Plan IMPLEMENTED/ MONITORING 4 ONGOING • Rotating task list • Bad debt collections • CSR schedule change • Develop clearly defined processing/understanding expectations for all types of services provided • Significant testing of software/hardware rollouts Technology Improvement Plan WI TER 2019 • Checking Scanners at front counter SPRING 2019 • Queuing System • Increase employee efficiency/customer satisfaction • Advertising: important news/announcements • Reporting: number of customers/CSR's total number of customers served Technology Improvement Plan SPRING/ SUMMER 2019 ONGOING • Interactive Voice Response (IVR) phone system • Set customer expectations • Provide management tools to review/manage workload in real time • Continued dispersion of internal knowledge • Creation of SOPs QUESTIONS? DECLARATION OF POSTING On Friday, February 22, 2019 in the City of Lodi, San Joaquin County, California, a copy of the February 26, 2019 Shirtsleeve Meeting Agenda (attached and marked as Exhibit A) was posted on the door 1311 Midvale Road, Lodi, California. I declare under penalty of perjury that the foregoing is true and correct. Executed on February 22, 2019 at Lodi, California. ORDERED BY: Posted by: JENNIFER M. FERRAIOLO CITY CLERK 2/22/19 (Date) LODI CITY COUNCIL Rick Cromwell Community Room 215 West Elm Street, Lodi *and via conference call: 1311 Midvale Road Lodi, CA 95240 "SHIRTSLEEVE" SESSION Date: February 26, 2019 Time: 7:00 a.m. eFor information regarding this Agenda please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 EXHIBIT it Informal Informational Meeting A. Roll CaII by City Clerk B. Topic(s) B-1 First and Second Quarters Fiscal Year 2018/29 Water, Wastewater, and Electric Utility Department Financial Reports (CM) B-2 Receive Update on City of Lodi Customer Service Division (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. nnifer M. City Clerk 100 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 interpretacion de idiomas deben ser recibidas por lo menos con 72 horas de anticipacion a la reunion para ayudar a asegurar la disponibilidad. Llame a Jennifer M. Ferraiolo (209) 333-6702. J:\CITYCLRK\AGENDA\SHIRTSLV\SHRTSLV2 doc