HomeMy WebLinkAboutResolutions - No. 2022-283RESOLUTION NO 2022-283
A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING REVISED LODI ELECTRIC UTILITY RESERVE POLICY
WHEREAS, the Lodi Electric Utility (LEU) Reserve Policy requires an assessment of the
targets identified with a report to the City Council every three years and the last review was
completed in March 2021; and
WHEREAS, since 2011, the formula for establishing the LEU Reserve Policy has
remained unchanged and the actual dollar amounts have been reviewed and updated each year
by the Risk Oversight Committee (ROC) in accordance with the approved annual budget; and
WHEREAS, the approved formula for those targets, as well as the specific target for Fiscal
Year 2022/23, are as follows:
Fund Designation
Basis
FY 2023
Operating Reserve
90 days cash on hand
$ 22,261,410
Capital Reserve
NCPA General Operating
Reserve
Largest distribution system
contingency
Identified by NCPA plus
allowance for unanticipated
studies
$ 1,000,000
$ 3,588,920
Total Target
$ 26,850,330
WHEREAS, while a formal review of the LEU Reserve Policy is not required until 2024,
LEU staff are recommending a revision to better align with current trends in the energy markets,
specifically as it relates to the acquisition of electrical equipment; and
WHEREAS, currently, the LEU Reserve Policy includes a Capital Reserve component
which is intended to set aside funds in the event of a catastrophic failure of a substation
transformer; and
WHEREAS, with supply chain challenges and increasing lead times to procure and
receive equipment like transformers, staff are proposing to remove the Capital Reserve
component from the LEU Reserve Policy and instead move forward to purchase a spare
transformer to ensure equipment is available and on hand should a catastrophic failure occur;
and
WHEREAS, at its October 27, 2022 meeting, the ROC recommended approval of a
revised LEU Reserve Policy as noted below and approved the Fiscal Year 2022/23 reserve target
amount of $25,850,330.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve
the revised LEU Reserve Policy formula as follows with the annual dollar targets to be updated
by the ROC each year:
Fund Designation Basis FY 2023
Operating Reserve 90 days cash on hand $ 22,261,410
NCPA General Operating Identified by NCPA plus
Reserve allowance for unanticipated $ 3,588,920
studies
Total Target $25,850,330
Dated: November 16, 2022
I hereby certify that Resolution No. 2022-283 was passed and adopted by the City Council
of the City of Lodi in a regular meeting held on November 16, 2022, by the following vote:
AYES: COUNCIL MEMBERS — Hothi, Khan, Kuehne, Nakanishi, and
Mayor Chandler
NOES- COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
OLIVIA NASHED
City Clerk
2022-283