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Home My WebLink AboutMinutes - May 21, 2019 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, MAY 21, 2019 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, May 21, 2019, commencing at 7:00 a.m. Present: Council Member Johnson, Council Member Nakanishi, Mayor Pro Tempore Kuehne, and Mayor Chandler Absent: Council Member Mounce 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 7:02 a.m. B. Topic(s) B-1 Receive Presentation Regarding Fiscal Year 2019/20 Enterprise and Special Revenue Fund (CM) Deputy City Manager Andrew Keys provided a PowerPoint presentation regarding Fiscal Year 2019/20 budget - Utility Fund and Special Revenue. Specific topics of discussion included an overview of Enterprise funds and Special Revenue funds; Electric Utility overview, revenues, expenses, capital projects, and reserves; Water Utility overview, revenues, expenses, capital projects, and reserves; Wastewater Utility overview, revenues, expenses, capital projects, and reserves; Transit overview, revenues, expenditures, and capital expenditures; Streets overview, revenues, expenditures, and capital projects; Community Development overview, revenues, and expenditures; Parks, Recreation and Cultural Services overview, revenues, and expenditures; and Library overview, revenues, and expenditures. Mayor Pro Tempore Kuehne questioned if the collection system enhancements will include the catch basins the City plans to install, to which City Manager Schwabauer responded that it will, but not all of them. In further response, Public Works Director Charlie Swimley stated he will get back to Council with how many catch basins will be installed. With regard to the reserve balances in all of the utilities, Mayor Chandler suggested staff better explain why the amounts are so massive because at a glance the public will not understand that the money is being collected to pay for capital projects; they will only see a reserve balance that is significantly higher than necessary. Mr. Keys stated that it will be thoroughly explained during the budget presentation. Mr. Keys concluded that staff anticipates providing Council with draft budget documents later in the day for review prior to budget approval on June 5, 2019, during which staff will include greater detail on capital projects and fund balances. Mike Lusk, member of the public, posed questions relating to PG&E's threats to shut down major power lines due to the Camp Fire and how the City plans to address that; the repayment of the water impact mitigation fees (IMF), stating he does not see the money being paid back in the utilities; the State grant money that would off -set the City's cost of the new wastewater holding pond, stating he does not see that in the presentation; and the elevator repair costs and whether the individual who damaged the elevator would be made to pay for the repairs. 1 In response to Mr. Lusk, City Attorney Magdich stated the City will be looking for subrogation for the person who damaged the elevator. Mr. Schwabauer responded that the City will not have an option this time to opt out of PG&E's brown outs and the City is working with PG&E and exploring all possibilities to determine how to address the situation. The City could expand and get power from the Lodi Energy Center, but that would be a $25 to $35 million project and comes with a lot of political opposition from the neighbors along the route. Before spending millions of dollars on an expansion project, staff wants to research the matter fully, understand what PG&E intends to do, and explore all options. With regard to the IMF, Mr. Schwabauer stated the fees are being used to pay for the water plant, but they are not paying what they would have if the IMF had not been discounted. Mr. Swimley stated the City has not collected IMF for many years, but is accounting for what is owed on the debt service for the water plant. The IMF can be spent on future projects, and it is planned that $2.7 million will be expended around 2022 to construct a new water tank. He added that the water and wastewater utilities have a back-up power supply in place should PG&E's brown outs go into effect. With regard to the State grant, the City will be reimbursed roughly $4 million by the State, which will come to the City over time. Mr. Schwabauer further explained that grants and reimbursements usually come to the City in arrears of a project. Further, the budget may show significant swings in revenue due to grant -funded projects, because in one year the City may have an extremely large grant project but not in the next year, which shows as a reduction in revenue. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 7:04 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 2 'M CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2019/20 Enterprise and Special Revenue Funds MEETING DATE: May 21, 2019 PREPARED BY: Andrew Keys, Deputy City Manager RECOMMENDED ACTION Receive Presentation Regarding Fiscal Year 2019/20 Enterprise and Special Revenue Funds. BACKGROUND INFORMATION: Staff has planned a series of presentations to provide the Council and public an opportunity to review and comment on basic assumptions within the FY 2019/20 budget to be proposed to Council later this month. The budget will be released and made available for public review at City Hall, the Library and online once the draft is finalized. This session is designed to provide information on the Enterprise and Special Revenue funds. The first opportunity for the City Council to adopt the Fiscal Year 2019/20 budget will be at its regular meeting on June 5, 2019. FISCAL IMPACT: There is no impact from this informational presentation. FUNDING AVAILABLE: The draft budgets for Enterprise and Special Revenue funds for Fiscal Year 2019/20 is projected as follows: Fund Revenues Expenditures Electric Utility 72,440,580 74,441,290 Water Utility 15,194,660 19,327,810 Wastewater Utility 17,359,130 16,968,080 Transit 4,952,760 4,557,830 Streets 9,951,200 7,661,190 Community Development 2,587,800 2,558,000 Parks, Recreation & Culture Srvs 7,672,990 7,663,660 Library 1,547,750 1,535,480 Andrew Keys, eputy City Manager APPROVED: chwabau it anager Fiscal Year 2019/20 Budget Utility Fund and Special Revenue Presentation Presented by: Andrew Keys, Deputy City Manager Overview • Enterprise Funds ■ Electric ■ Water ■ Wastewater • Special Revenue Funds ■ Transit ■ Streets ■ Community Development ■ Parks, Recreation and Cultural Services ■ Library Electric Utility Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Electric Utility Enterprise Fund Cash Balance Beginning Cash Balance 21,911,186 28,133,768 29,951,255 36,848,018 40,853,108 Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget Revenues * 70,840,461 74,937,150 73,615,090 73,262,910 72,440,580 Expenditures 64,617,879 66,222,900 75,301,153 69,257,820 74,441,290 Net Difference (Revenues Less Expenditures) 6,222,582 8,714,250 (1,686,063) 4,005,090 (2,000,710) Cash Balance Ending Cash Balance 28,133,768 36,848,018 28,265,192 40,853,108 38,852,398 Fund Balance as a percentage of expenses: 44% 56% 38% 59% 52% *Includes changes in GOR Electric Utility • Revenues are $1,174,510 lower than FY 2018/19 budget ■ Customer charges - $1,587,010 lower ■ Operating Transfer In - $250,000 lower ■ Environmental compliance - $160,180 higher ■ Work for others - $384,500 higher ■ Development impact fees - $155,050 higher Electric Utility • Expenses are $859,860 lower than FY 2018/19 budget ■ Salary & benefits - $312,560 lower ■ Supplies, materials & services - $937,120 lower ■ Debt service - $1,534,880 lower ■ Capital projects & equipment - $2,054,340 higher Electric Utility Capital Projects • Electrical Utility Facility Renovation - $2,000,000 • 12kV Overhead - $300,000 • 12kV Underground - $1,100,000 • 230kV Interconnection - $500,000 • Streetlight Maintenance - $50,000 • Work for Others - $350,000 • 1267 Feeder Extension - $600,000 • McLane Substation Renovation - $1,400,000 • LED Streetlight Improvements - $250,000 Electric Utility Reserves Purpose Basis 2019/20 Target Operating Reserve 90 days cash 16,973,000 Capital Reserve Largest distribution system contingency 1,000,000 NCPA General Operating Reserve NCPA identified items 4,538,881 Total Target 22,511,881 Estimated FY 2019/20 Reserve 38,852,398 Water Utility Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Water Utility Enterprise Fund Cash Balance Beginning Cash Balance Revenues Expenditures Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget 5,567,984 4,743,509 4,611,635 5,154,246 8,346,876 13,818,330 14,461,227 14,448,540 14,660,850 15,194,660 14, 642,805 14,050,490 15, 346,327 11,468, 220 19, 327,810 Net Difference (Revenues Less Expenditures) (824,475) 410,737 (897,787) 3,192,630 (4,133,150) Cash Balance Ending Cash Balance 4,743,509 5,154,246 3,713,848 8,346,876 4,213,726 Fund Balance as a percentage of expenses: 32% 37% 24% 73% 22% Water Utility • Revenues are $746,120 higher than FY 2018/19 ■ Charges for services - $522,980 higher ■ Development impact fees - $300,000 higher Water Utility • Expenses are $3,981,480 higher than FY 18/19 budget ■ Salary & benefits - $58,640 lower ■ Supplies, materials & services - $82,280 higher ■ Capital projects & equipment - $3,923,130 higher Water Utility Capital Projects • Water Meter Phase 8 - $5,980,000 • Granular Activated Carbon (GAC) at 2 sites - $300,000 • Wells #'s 7, 22, 27, 28 rahab/GAC systems - $1,241,000 • Water meter shop construction - $200,000 • Water taps/main replacements - $125,000 • Lockeford Street reconstruction - $48,250 • PCE/TCE programs - $420,000 Water Utility Reserves • Target is 25% of operating expenses • Target for FY 2019/20 equals $2,747,140 • FY 2019/20 estimated reserve is $4,213,726 Wastewater Utility Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Wastewater Utility Enterprise Fund Cash Balance Beginning Cash Balance Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget 17,462,307 19,473,784 20,601,484 22,795,135 22,803,825 Revenues 16,940,258 16,479,477 19,820,600 20,122,940 17,359,130 Expenditures 14,928,781 13,158,126 27,498,730 20,114,250 16,968,080 Net Difference (Revenues Less Expenditures) 2,011,477 3,321,351 (7,678,130) 8,690 391,050 Cash Balance Ending Cash Balance 19,473,784 22,795,135 12,923,354 22,803,825 23,194,875 Fund Balance as a percentage of expenses: 130% 173% 47% 113% 137% 13 Wastewater Utility • Revenues are $2,461,470 lower than FY 2018/19 budget ■ Customer accounts - $104,360 higher ■ Development impact fees - $747,210 higher ■ State grant - $3,130,000 lower Wastewater Utility • Expenses are $10,530,650 lower than FY 2018/19 budget ■ Salary & benefits - $343,000 higher ■ Supplies, materials & services - $71,100 higher ■ Capital projects & equipment - $10,828,120 lower 15 Wastewater Utility Capital Projects • Replace one truck - $40,000 • Main replacement #8 — $2,600,000 • Upgrade blowers - $750,000 • Collection system enhancements - $200,000 • Lincoln storm pump rehab - $75,000 • White Slough facility repairs - $68,000 • Taps/relocations - $75,000 • Lockeford Street reconstruction - $20,680 Wastewater Utility Reserves • Target is 25% of operating expenses • Target for FY 2019/20 equals $3,193,600 • FY 2019/20 estimated reserve is $23,194,875 Transit Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Transit Fund Fund Balance (Net Assets) Beginning Fund Balance (Net Assets) Unreserved 4,844,101 3,792,695 5,486,449 4,326,294 3,533,034 Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget Revenues 3,879,088 5,353,595 5,292,480 5,663,530 4,952,760 Expenditures 4,930,494 4,819,996 6,876,154 6,456,790 4,557,830 Net Difference (Revenues Less Expenditures) (1,051,406) 533,599 (1,583,674) (793,260) 394,930 Fund Balance (Net Assets) Ending Fund Balance (Net Assets) Unreserved 3,792,695 4,326,294 3,902,775 3,533,034 3,927,964 Fund Balance as a percentage of revenue: 98% 81% 74% 62% 79% Transit Revenue • Revenues are $399,720 lower than FY 2018/19 budget ■ Transportation Dev Act - $182,230 higher ■ State grants - $84,800 higher ■ Federal grants - $93,830 lower ■ Prop 1B - $429,190 lower ■ Miscellaneous revenues - $83,730 lower Transit Expenditures • Expenses are $2,318,325 lower than FY 2018/19 budget ■ Supplies, materials & services - $79,970 lower ■ Capital projects & equipment - $2,430,640 lower Transit Capital Expenditures • Blower assembly for bus wash - $120,000 • Transit station repairs - $160,000 • Transit facility upgrades — $300,000 • Farebox equipment — $109,810 • Fleet equipment - $50,000 • Parking garage elevator repair - $20,000 Streets Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Street Fund Fund Balance Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget Beginning Fund Balance 3,789,808 5,375,119 6,522,099 6,461,848 8,802,878 Revenues Expenditures 11,778,164 9,366,209 7,770,130 7,944,900 9,951,200 10,192,853 8,279,480 9,701,351 5,603,870 7,661,190 Net Difference (Revenues Less Expenditures) 1,585,311 1,086,729 (1,931,221) 2,341,030 2,290,010 Fund Balance Ending Fund Balance 5,375,119 6,461,848 4,590,878 8,802,878 11,092,888 Fund Balance as a percentage of revenue: 46% 69% 59% 111% 111% Streets Revenue • Revenues are $2,181,070 higher than FY 2018/19 budget ■ Gas taxes - $108,530 higher ■ State grants - $447,000 higher ■ Federal Grants - $1,182,280 higher ■ Development impact fees - $288,300 higher Streets Expenditures • Expenses are $2,040,160 lower than FY 2018/19 budget ■ Salaries/benefits - $99,760 higher ■ Supplies, materials & services - $51,860 higher ■ Capital projects & equipment - $2.1m lower Streets Capital Projects • Church Street Reconfiguration - $1,622,150 • Guild/Victor traffic signal - $764,000 • Lockeford Street reconstruction - $507,400 • Bike detection improvements - $565,000 • Pavement projects - $370,000 • Sidewalk projects - $170,000 • Lwr Sacramento Road median repair - $100,000 • Signal maintenance - $90,000 • Street striping - $80,000 • Miscellaneous maintenance projects - $196,000 Community Development Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Community Development Fund Fund Balance Beginning Fund Balance Unreserved Estimated 2016-17 2017-18 2018-19 2018-19 2019-20 Actuals Actuals Budget Actuals Budget 2,423,363 3,824,752 2,240,502 2,975,494 3,048,384 Revenues 3,140,917 2,886,196 2,586,100 2,586,100 2,587,800 Expenditures 1,739,528 3,735,454 2,515,790 2,513,210 2,558,000 Net Difference (Revenues Less Expenditures) 1,401,389 (849,258) 70,310 72,890 29,800 Fund Balance Ending Fund Balance Unreserved 3,824,752 2,975,494 2,310,812 3,048,384 3,078,184 Fund Balance as a percentage of expense 220% 80% 92% 121% 120% Community Development Revenue • Revenues are $1,700 higher than FY 2018/19 budget ■ Permits - $6,300 lower ■ Planning fees - $160,000 higher ■ Federal grants- $164,000 lower Community Development Expenditures • Expenses are $42,210 higher than FY 2018/19 budget ■ Salary & benefits - $191,320 higher ■ Adding Neighborhood Services Manager position ■ Supplies, materials & services - $180,140 lower ■ Operating transfers - $28,7000 higher Parks, Recreation and Cultural Services Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Parks, Recreation & Cultural Svcs Fund Fund Balance Beginning Fund Balance Unreserved Revenues Expenditures Estimated 2016-17 2017-18 2018-19 2018-19 Actuals Actuals Budget Actuals 2019-20 Budget 387,390 6,249,422 5,942,140 694,672 217,754 6,364,934 6,285,303 6,153,300 6,349,990 774,303 669,153 6,308,400 6,413,550 7,672,990 7,663,660 Net Difference (Revenues Less Expenditures) 307,282 79,631 (196,690) (105,150) 9,330 Fund Balance Ending Fund Balance Unreserved 694,672 774,303 21,064 669,153 678,483 Fund Balance as a percentage of revenue 11% 12% 0% 11% 9% Parks, Recreation and Cultural Services Revenue • Revenues are $1,519,690 higher than FY 2018/19 budget • Operating transfer in - $1,039,590 higher • Rents - $36,510 higher • LUSD after school services - $40,030 higher • City after school programs - $160,000 higher • Programs - $187,950 higher • Box office - $55,000 higher Parks, Recreation and Cultural Services Expenditures • Expenses are $1,313,670 higher than FY 2018/19 budget • Operating transfers — $1,010,190 higher • Salaries & benefits - $314,180 higher Library Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 With Actuals for FY 2016-17 and FY 2017-18 and Comparative Budget FY 2018-19 Library Fund Fund Balance Beginning Fund Balance Unreserved 670,790 457,902 6,049 23,161 148,431 Estimated 2016-17 2017-18 2018-19 2018-19 Actuals Actuals Budget Actuals 2019-20 Budget Revenues Expenditures Net Difference (Revenues Less Expenditures) Fund Balance Ending Fund Balance Unreserved Fund Balance as a percentage of revenue 1,457,057 1,552,578 2,411,977 2,846,718 1,494,934 1,536,418 1,497,930 1,372,660 1,547,750 1,535,480 (95,521) (434,741) (41,484) 125,270 12,270 575,269 23,161 (35,435) 148,431 160,701 39% 1% -2% 10% 10% Library Revenue • Revenues are $15,670 higher than FY 2018/19 budget • Operating Transfer In - $11,050 higher • Grants - $34,890 lower Library Expenditures • Expenses are $940 lower than FY 2018/19 budget • Operating transfers - $11,050 higher • Salaries & benefits - $72,120 higher* • Capital projects - $90,230 lower *New Librarian position funded in General Fund and not reflected in above figures. Questions? DECLARATION OF POSTING On Thursday, May 16, 2019, in the City of Lodi, San Joaquin County, California, a copy of the May 21, 2019, Shirtsleeve Session (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 May 16, 2019, at Lodi, California. Posted by: Jennif Ferraiolo ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK 6'160 DECLARATION'_OF POSTING On Thursday, May 16, 2019, in the City of Lodi, San Joaquin County, California, a copy of the May 21, 2019 Shirtsleeve Session agenda (attached and marked as Exhibit A) was posted on the door of Room No. 22 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 May 16, 2019, at Lodi, California. Posted by: ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK Jenn/ \)04noth-c.y- (Print nanaa here) Fairmont Rehabilitation Hospital (Person who posted the agenda) (Date) 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: May 21, 2019 Time: 7:00 a.m. 1 For information regarding this Agenda please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 1 Informal Informational Meeting A. Roll CaII by City Clerk B. Topic(s) B-1 Receive Presentation Regarding Fiscal Year 2019/20 Enterprise and Special Revenue Fund (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. n ifer M. F Clerk iolo V 0 • 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 anticipacion a la reunion para ayudar a asegurar la disponibilidad. Llame a Jennifer M. Ferraiolo (209) 333-6702, l J:\CITYCLRK AGENDA\SHIRTSLV\SHRTSLV.DOC