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HomeMy WebLinkAboutMinutes - May 10, 2022 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, MAY 10, 2022 The Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council of Tuesday, May 10, 2022, was cancelled due to lack of a quorum. An informal presentation was made on the topic - Fiscal Year 2022/23 Enterprise Funds - with background materials and PowerPoint presentation on file in the City Clerk's Office. ATTEST: Pamela M. Farris Assistant City Clerk 1 Fiscal Year 2022/23 Budget Enterprise Funds Presented by Andrew Keys, Deputy City Manager Overview •Enterprise Funds Electric Water Wastewater Transit 2 Electric Utility Overview 3 Estimated 2020-21 2021-22 2022-23 Electric Utility Actual Actuals Budget Cash Balance Beginning Cash Balance Unreserved 38,969,879 42,164,766 36,232,516 Revenues 80,142,797 85,022,060 93,033,760 Expenditures 76,947,910 90,954,310 92,284,650 Net Difference (Revenues Less Expenditures)3,194,887 (5,932,250) 749,110 Restricted Cash Balance - - Ending Cash Balance Unreserved 42,164,766 36,232,516 36,981,626 Cash Balance as a percentage of expenses:55%40%40% Estimate Changes in Fund Balance For the Fiscal Year Ended June 30, 2023 With Actuals for FY2020-21 and Year End Estimates for FY2021-22 •Revenues are $8,011,700 higher than FY 2021/22 estimated actuals Customer charges -$10,315,190 higher Work for others -$103,000 lower Public Benefits -$1,149,020 lower Greenhouse gas -$731,800 lower Electric Utility Revenue Highlights 4 •Expenses are $1,330,340 higher than FY 2021/22 estimated actuals Salary & benefits -$2,666,280 higher Supplies, materials & services -$6,523,330 higher $5.8m higher Generation and Transmission costs Transfer Out -$296,020 higher Capital projects & equipment -$8,179,490 lower Staffing requests: Electric Utility Expenditure Highlights 5 Job Title Department +/- Administrative Clerk Electric Utility +1 Electric Foreman Electric Utility +1 Net Increase +2 •Power Supply Costs –the “Perfect Storm” •Global Unrest •Sanctions on oil imports; constraints on natural gas supply •Higher fuel costs for generating plants –lower margins •California Drought •Drought conditions over 88% of Western US •Reduced hydroelectric generation •Increased reliance on market •Supply Chain Challenges •Solar project delays; increased reliance on market •State Climate Goals •Zero carbon goals = significant investment in transmission grid •Infrastructure to support renewable resources and electrification •Higher transmission access charges •LEU projecting 3.5 cent ECA for FY 23 •~$10/month increase to 700 kWh/month user Electric Utility Expenditure Highlights (cont’d) 6 •Forecasted CPI level base rate increase(s) starting FY 2025/26 •Assumes all positions are staffed 100% •Includes CPI level adjustments to all bargaining groups •Includes recently approved IBEW contract •ECA adjusts for changes in power supply costs •Need for base rate adjustments dependent on changes in non-power supply costs Electric Utility Forecasted Rate Actions 7 FY 22 -23 Budget FY 23-24 Forecast FY 24 -25 Forecast FY 25-26 Forecast FY 26-27 Forecast Proposed Rate Adjustments 0%0%0%2%2% Available Cash*$37.3M $35.1M $32.0M $32.0M $33.3M Reserve Target $26.8M $28.0M $28.5M $28.9M $29.3M % of Target 139%125%112%111%114% *Includes CAPP funds and estimates for PARS Stabilization Fund contributions •12kV Overhead -$777,000 •12kV Underground -$555,000 •Work for Others -$550,000 •LED Streetlight Improvements –$250,000 •Substation Relay Modernization -$120,000 •Streetlight Maintenance -$50,000 •230kV Interconnection -$20,000 •Substation Intrusive Maintenance -$20,000 Electric Utility Capital Projects Additions to the CIP Program for FY 23 $2,342,000 8 •Replace (3) bucket trucks @$225,000 each •Replace (2) trucks for metering repairs @ $50,000 each •Replace SUV for meter reading staff -$50,000 •Replace voice recorders for operations calls - $40,000 •Replace large flatbed trailer -$32,000 Electric Utility Equipment and Vehicle Requests $897,000 9 Electric Utility 5-Year Capital Forecast 10 Project FY 22 -23 Budget* FY 23 -24 Forecast FY 24-25 Forecast FY 25 -26 Forecast FY 26 -27 Forecast Distribution Capacity Program $0 $260,000 $0 $0 $0 Underground / Overhead Maintenance $1,332,000 $1,042,000 $542,000 $442,000 $442,000 Streetlight Maintenance / LED Improvements $300,000 $300,000 $300,000 $50,000 $50,000 230 kV Interconnection Project*$20,000 $20,000 $25,000 $25,000 $25,000 Substation Maintenance / Improvements $140,000 $1,727,500 $1,917,500 $1,057,500 $557,500 Work for Others $550,000 $550,000 $550,000 $550,000 $550,000 Vehicles & Equipment $897,000 $1,010,000 $1,063,000 $170,000 $480,000 Total Projects $3,239,000 $4,909,500 $4,397,500 $2,294,500 $2,104,500 *Does not include rollover or unexpended funds from FY 22 **Includes planning and design costs only –construction costs estimated at ~$30M and will be debt financed Electric Utility Reserves 11 Purpose Basis 2022/23 Operating Reserves 90 days cash 22,261,410 Capital Reserve Largest distribtuion systm contingency 1,000,000 NCPA General Operating Reserves NCPA identified items 3,588,920 Total Target 26,850,330 Estimated FY 2022/23 Reserve 36,981,626 12 Water Utility Overview Estimated 2020-21 2021-22 2022-23 Water Utility Actual Actuals Budget Cash Balance Beginning Cash Balance Unreserved 25,451,690 17,753,178 16,380,548 Revenues 16,579,385 16,070,090 15,715,900 Expenditures 24,277,897 17,442,720 13,394,190 Net Difference (Revenues Less Expenditures)(7,698,512) (1,372,630) 2,321,710 Restricted Cash Balance - - - Ending Cash Balance Unreserved 17,753,178 16,380,548 18,702,258 Cash Balance as a percentage of expenses:73%94%140% Estimate Changes in Fund Balance For the Fiscal Year Ended June 30, 2023 With Actuals for FY2020-21 and Year End Estimates for FY2021-22 •Revenues are $254,190 lower than FY 2021/22 estimated actuals Developer Impact fees -$40,000 lower Customer accounts -$70,530 higher Investment earnings -$295,600 lower (due to fluctuations in investment calculations, this item is no longer being included as a budgetary item. Actual interest earnings will be posted according to fund cash balances.) Water Utility Revenue Highlights 13 •Expenses are $4,108,530 lower than FY 2021/22 estimated actuals Salary & benefits -$153,400 higher Supplies, materials & services -$487,640,higher Transfer Out -$219,270 higher Capital projects & equipment -$4,981,140 lower Staffing requests: Water Utility Expenditure Highlights 14 Job Title Department +/- Electrician Water Services +1 Water/Wastewater Maint. Worker Water Services +1 Net Increase +2 Electrician will be shared with Wastewater and Streets Water/Wastewater Maintenance Worker will be shared with Wastewater •Water Meter Multi-Family -$1,000,000 •Well 25 Pump Rehab -$250,000 •Water Taps/Main Replacements -$125,000 •PCE/TCE Oversight -$100,000 •Water Project Planning -$25,000 Water Utility Capital Projects Additions to the CIP Program for FY 23 $1,500,000 15 •Truck for new Electrician -$90,000 •Compact SUV for Municipal Utilities Administration (pool car) -$40,000 •Replace trailer vacuum excavator -$120,000 Water Utility Equipment and Vehicle Requests $250,000 16 Water 5-Year Financial Forecast 17 FY 21-22 Budget FY 22-23 Forecast FY 23-24 Forecast FY 24-25 Forecast FY 25-26 Forecast FY 26-27 Forecast Available Cash $9,655,222 $8,014,050 $7,911,050 $5,649,450 $4,953,750 $5,648,950 Days Cash (180 day target)312 264 254 177 152 168 Minimum Reserve Target (25%)$2,701,500 $2,769,500 $2,838,000 $2,910,000 $2,983,500 $3,059,500 Reserve Target (50%)$5,403,000 $5,539,000 $5,676,000 $5,820,000 $5,967,000 $6,119,000 % of Days Cash Target 181%147%141%98%84%94% 18 Wastewater Utility Overview Estimated 2020-21 2021-22 2022-23 Wastewater Utility Actual Actuals Budget Cash Balance Beginning Cash Balance Unreserved 23,084,953 26,591,516 20,880,636 Revenues 20,681,321 18,897,390 19,319,250 Expenditures 17,174,759 24,608,270 21,953,670 Net Difference (Revenues Less Expenditures)3,506,562 (5,710,880) (2,634,420) Restricted Cash Balance - - Ending Cash Balance Unreserved 26,591,516 20,880,636 18,246,216 Cash Balance as a percentage of expenses:155%85%83% Estimate Changes in Fund Balance For the Fiscal Year Ended June 30, 2023 With Actuals for FY2020-21 and Year End Estimates for FY2021-22 •Revenues are $421,860 higher than FY 2021/22 estimated actuals •Development Impact fees -$433,880 higher •Remaining revenues are flat Wastewater Utility Revenue Highlights 19 •Expenses are $2,654,600 lower than FY 2021/22 estimated actuals •Salary & benefits -$538,460 higher (due to less staff transfers to other funds) Supplies, materials & services -$67,290 higher Transfer Out -$271,380 higher Capital projects & equipment -$3,556,710 lower Staffing requests: Wastewater Utility Expenditure Highlights 20 Job Title Department +/- Electrician Water Services +1 Water/Wastewater Maint. Worker Water Services +1 Net Increase +2 Electrician will be shared with Water and Streets Water/Wastewater Maintenance Worker will be shared with Water •White Slough South Electric Building and Improvements -$7,000,000 •Miscellaneous Projects -$100,000 •Wastewater Taps and Relocations -$75,000 •Wastewater Project Planning -$25,000 Wastewater Utility Capital Projects Additions to the CIP Program for FY 23 $7,200,000 21 •New combination jet/vacuum cleaner truck - $650,000 •Replace truck for White Slough staff -$60,000 Wastewater Utility Equipment and Vehicle Requests $710,000 22 Wastewater 5-Year Financial Forecast 23 FY 21-22 Budget FY 22-23 Forecast FY 23-24 Forecast FY 24-25 Forecast FY 25-26 Forecast FY 26-27 Forecast Available Cash $15,185,508 $10,902,900 $7,891,200 $11,268,400 $12,120,700 $5,747,400 Days Cash (180 day target) Minimum Reserve Target (25%)$3,345,500 $3,420,500 $3,497,500 $3,176,500 $3,786,500 $3,872,000 Reserve Target (50%)$6,691,000 $6,841,000 $6,995,000 $6,353,000 7,573,000 7,744,000 % of Days Cash Target 230%162%114%180%162%75% 414 291 206 323 292 135 •The City is monitoring the current drought and its impact on Lodi. •Sufficient supplies through surface and ground water are available to serve the City’s needs however depending on WID surface water allocations additional conservation measures may be necessary for the summer months. •WID allocations are anticipated to be released in the next few weeks. 24 Water/Wastewater Additional Information •Both water and wastewater financial plans forecast 3% rate increases for the next fiscal year.The current Prop 218 rate plan expires December 31, 2023. •Future rate increases will be based on a future study what will consider current inflationary and supply chain pressures along with the City’s capital and operating needs. 25 Water/Wastewater Additional Information Transit Overview 26 Estimated 2020-21 2021-22 2022-23 Transit Actual Actuals Budget Cash Balance Beginning Cash Balance Unreserved 1,428,137 2,983,653 2,491,113 Revenues 5,913,944 12,584,920 10,396,210 Expenditures 4,358,428 13,077,460 12,169,430 Net Difference (Revenues Less Expenditures)1,555,516 (492,540) (1,773,220) Restricted Cash Balance - - Ending Cash Balance Unreserved 2,983,653 2,491,113 717,893 Cash Balance as a percentage of expenses:68%19%6% Estimate Changes in Fund Balance For the Fiscal Year Ended June 30, 2023 With Actuals for FY2020-21 and Year End Estimates for FY2021-22 •Revenues are $2,188,719 lower than FY 2021/22 estimated actuals Measure K (capital) -$1,400,000 lower CMAQ (capital) -$750,000 lower Transit Revenue Highlights 27 •Expenses are $908,030 lower than FY 2021/22 estimated actuals Salary & benefits -$124,100 higher Supplies, materials & services -$278,610 higher Insurances -$52,000 higher (PL/PD costs) Transfer Out -$40,900 higher Capital projects & equipment -$1,403,640 lower Transit Expenditure Highlights 28 •Transit Facility Repairs/Upgrades -$200,000 •Park Structure Roll-up Doors Install -$150,000 Transit Capital Additions to the CIP Program for FY 23 $350,000 29 •Replace (12) 27’ and (6) 32’ busses -$6,900,000 (this is being reprogrammed from FY 22) •Equipment for Transit Fleet Maintenance -$50,000 Transit Capital Equipment and Vehicle Requests $6,950,000 30 31 Questions?