City Council

LODI CITY COUNCIL AGENDA – Shirtsleeve Session Date: May 10, 2022 Carnegie Forum Time: 7:00 a.m. 305 West Pine Street, Lodi For information regarding this Agenda please contact: Olivia Nashed City Clerk Telephone: (209) 333-6702 Notice Regarding Public Comments Public Comment may be submitted in the following ways: • In-person – The Carnegie Forum is open to the public in accordance with CDPH and CalOSHA guidelines. • Zoom Webinar  Meeting ID: 872 2014 2274  Passcode: 401448  Phone number: +1 720 07 2699 or +1 253 215 8782  Link: https://us06web.zoom.us/j/87220142274?pwd=dzYySXc2bTkvZ0ZFdlpMTkRZdW9XZz09 • Email – councilcomments@lodi.gov  Received no later than 4:30 p.m. on the business day prior to the meeting. • Mail – City Clerk’s Office, P.O. Box 3006, Lodi, CA 95241 • Hand delivered to: City Clerk’s Office, 221 W. Pine Street, Lodi, CA 95240 A. Call to Order / Roll Call B. Topics B-1 Receive Presentation Regarding Fiscal Year 2022/23 Enterprise Funds (ISD) C. Comments by Public on Non-Agenda Items THE TIME ALLOWED PER NON-AGENDA ITEM FOR COMMENTS MADE BY THE PUBLIC IS LIMITED TO FIVE MINUTES. Public comment may only be made on matters within the Lodi City Council's jurisdiction (Government Code Section 54954.3, Lodi City Council Protocol Manual Section 6.3l). The Council cannot take action or deliberate on items that are not on this agenda unless there is an emergency and the need to take action on that emergency arose after this agenda was posted (Government Code Section 54954.2(b)(2)). All other items may only be referred for review to staff or placement on a future Council agenda. If you wish to address the Council, please refer to the Notice at the beginning of this agenda. Individuals are limited to one appearance during this section of the Agenda. 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. ______________________________ Olivia Nashed City Clerk Revised 10/2021 5/5/2022 8:29 AM 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. Agendas and staff reports are also posted on the City’s website at www.lodi.gov. 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 Olivia Nashed at (209) 333-6702. Solicitudes de interpretación de idiomas deben ser recibidas por lo menos con 72 horas de anticipación a la reunión para ayudar a asegurar la disponibilidad. Llame a Olivia Nashed (209) 333-6702. Meetings of the Lodi City Council are telecast on SJTV, Channel 26. The City of Lodi provides live and archived webcasts of regular City Council meetings. The webcasts can be found on the City's website at www.lodi.gov by clicking the meeting webcasts link. Members of the public may view and listen to the open session of this teleconference meeting at www.facebook.com/CityofLodi/ or https://us06web.zoom.us/j/87220142274?pwd=dzYySXc2bTkvZ0ZFdlpMTkRZdW9XZz09.  AGENDA ITEM B-01 COUNCIL COMMUNICATION AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2022/23 Enterprise Funds MEETING DATE: May 10, 2022 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive presentation regarding Fiscal Year 2022/23 Enterprise Funds. BACKGROUND INFORMATION: Staff has planned a series of presentations to provide the City Council and public an opportunity to review and comment on basic assumptions within the FY 2022/23 budget to be proposed to Council later this month. The draft budget will be released and made available for public review online once the draft is finalized. This session is designed to provide information on the enterprise funds consisting of Electric Utility, Water Utility, Wastewater Utility and Transit Funds. The first opportunity for the City Council to adopt the Fiscal Year 2022/23 budget will be at its regular meeting on June 1, 2022. FISCAL IMPACT: There is no impact from this informational presentation. FUNDING AVAILABLE: The draft budgets for the enterprise funds for Fiscal Year 2022/23 are as follows: Fund Revenues Expenditures Electric Utility 92,284,650 Water Utility 13,394,190 Wastewater Utility 21,953,670 Transit 12,169,430 _______________________________________ Andrew Keys Deputy City Manager/Internal Services Director APPROVED: ________________________________ Stephen Schwabauer, City Manager 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 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 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% 3  Electric Utility Revenue Highlights • 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 4  Electric Utility Expenditure Highlights • 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: Job Title Department +/- Administrative Clerk Electric Utility +1 Electric Foreman Electric Utility +1 Net Increase +2 5  Electric Utility Expenditure Highlights (cont’d) • 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 6  Electric Utility Forecasted Rate Actions • 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 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Budget Forecast Forecast Forecast 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 7  Electric Utility Capital Projects Additions to the CIP Program for FY 23 $2,342,000 • 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 8  Electric Utility Equipment and Vehicle Requests $897,000 • 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 9  Electric Utility 5-Year Capital Forecast FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Project Budget* Forecast Forecast Forecast 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 10  Electric Utility Reserves Purpose Basis 2022/23 Operating Reserves 90 days cash 22,261,410 Largest distribtuion systm Capital Reserve 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 11  Water Utility Overview 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 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% 12  Water Utility Revenue Highlights • 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.) 13  Water Utility Expenditure Highlights • 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: 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 14  Water Utility Capital Projects Additions to the CIP Program for FY 23 $1,500,000 • 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 15  Water Utility Equipment and Vehicle Requests $250,000 • Truck for new Electrician - $90,000 • Compact SUV for Municipal Utilities Administration (pool car) - $40,000 • Replace trailer vacuum excavator - $120,000 16  Water 5-Year Financial Forecast FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Budget Forecast Forecast Forecast Forecast Forecast Available Cash $9,655,222 $8,014,050 $7,911,050 $5,649,450 $4,953,750 $5,648,950 Days Cash 312 264 254 177 152 168 (180 day target) Minimum Reserve $2,701,500 $2,769,500 $2,838,000 $2,910,000 $2,983,500 $3,059,500 Target (25%) 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% 17  Wastewater Utility Overview 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 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% 18  Wastewater Utility Revenue Highlights • Revenues are $421,860 higher than FY 2021/22 estimated actuals • Development Impact fees - $433,880 higher • Remaining revenues are flat 19  Wastewater Utility Expenditure Highlights • 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: 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 20 Water/Wastewater Maintenance Worker will be shared with Water  Wastewater Utility Capital Projects Additions to the CIP Program for FY 23 $7,200,000 • 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 21  Wastewater Utility Equipment and Vehicle Requests $710,000 • New combination jet/vacuum cleaner truck - $650,000 • Replace truck for White Slough staff - $60,000 22  Wastewater 5-Year Financial Forecast FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Budget Forecast Forecast Forecast Forecast Forecast Available Cash $15,185,508 $10,902,900 $7,891,200 $11,268,400 $12,120,700 $5,747,400 Days Cash 414 291 206 323 292 135 (180 day target) Minimum Reserve $3,345,500 $3,420,500 $3,497,500 $3,176,500 $3,786,500 $3,872,000 Target (25%) 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% 23  Water/Wastewater Additional Information • 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  Transit Overview 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 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% 26  Transit Revenue Highlights • Revenues are $2,188,719 lower than FY 2021/22 estimated actuals  Measure K (capital) - $1,400,000 lower  CMAQ (capital) - $750,000 lower 27  Transit Expenditure Highlights • 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 28  Transit Capital Additions to the CIP Program for FY 23 $350,000 • Transit Facility Repairs/Upgrades - $200,000 • Park Structure Roll-up Doors Install - $150,000 29  Transit Capital Equipment and Vehicle Requests $6,950,000 • Replace (12) 27’ and (6) 32’ busses - $6,900,000 (this is being reprogrammed from FY 22) • Equipment for Transit Fleet Maintenance - $50,000 30  Questions? 31