Utility Committee

City of Oconomowoc Utility Committee Aldermen: Rosek, Chairman / Mulder, Secy / Ellis Tuesday, June 21, 2022 - 5:45 PM City Hall - Conference Room 3 174 E. Wisconsin Ave. Oconomowoc, WI 53066 Notice: If a person with a disability requires that the meeting be accessible or that materials at the meeting be in an accessible format, call the City Clerk’s office at least 48 hours in advance to request adequate accommodations. Tel: (262) 569-2186 1. Call to Order, Roll Call and Confirmation of appropriate Meeting Notification 2. Approve Minutes a. Minutes from June 7, 2022 3. Committee Business a. Consider/recommend Resolution 22-R3042 Declaring Official Intent to Reimburse Expenditures from Proceeds of Borrowing b. Consider/recommend Resolution 22-R3041 Designating Authorized Representatives to File Applications for Financial Assistance from State of Wisconsin Environmental Improvement Fund 4. Review Committee Reports a. Utility Billing Monthly Report- June b. Electric Utility Committee Report - June 2022 c. Water Report - June 2022 d. Wastewater Report - June 2022 5. Adjourn ________________________________ Diane Coenen, City Clerk City of Oconomowoc Members of other City governmental bodies (boards, commissions, committees, council, etc.) may attend the above noticed meeting of the Utility Committee to gather information. The only action to be taken at the above noticed meeting will be action by the Utility Committee. Utility Committee members should notify the City Clerk’s Office at 569-2186 if they are unable to attend. 1  City of Oconomowoc Utility Committee Meeting Minutes June 07, 2022 - 5:45 PM Aldermen Present: Matt Rosek, Matt Mulder, Kevin Ellis Also Present: Robert Magnus, Lucas Caine, Diane Coenen, Kevin Freber, Mark Frye, Jason Gallo, Mary Moresco, James Pfister, Joe Pickart, Darrell Smith, Chris Douglas, Jennifer Aultman Kloth, Charles Schellpeper Chairman Rosek called the Utility Committee Meeting to order at 5:45 PM. Call to Order, Roll Call and Confirmation of appropriate Meeting Notification Approve Minutes a. Minutes of April 5, 2022 Motion to approve the minutes of April 5, 2022 made by Rosek and seconded by Mulder. Motion carried 3-0. Committee Business a. Consider/recommend Resolution 22-R3045 Approving Electric Budget Amendment for Outage Management Funds Motion to recommend Resolution 22-R3045 approving Electric Budget amendment for Outage Management Funds made by Mulder and seconded by Ellis. Motion carried 3-0. b. Consider/recommend Resolution 22-R3043 for the Wisconsin DNR Compliance Maintenance Annual Report (CMAR) for 2021 Wastewater Operations Motion to recommend Resolution 22-R3043 for the Wisconsin DNR Compliance Maintenance Annual Report (CMAR) for 2021 Wastewater Operations made by Ellis and seconded by Mulder. Motion carried 3-0. c. Presentation/Update of Oconomowoc Watershed Protection Program 2022 – Smith, Watershed Manager gave a PowerPoint presentation. d. Report on Fact Finding Trip to Denmark in 2022 – Freber gave a PowerPoint presentation. Adjourn Motion to adjourn made by Mulder and seconded by Rosek. Motion carried 3-0. The meeting adjourned at 6:44 PM. __________________________________ Minutes taken by Diane Coenen, City Clerk Alderman Mulder, Secretary 1 Utility Committee - June 07, 2022 2  MEMORANDUM DEPARTMENT Date: June 15, 2022 To: Mayor Magnus, City Council, and City Administrator Mark Frye From: Laurie Sullivan-Murray, Finance Director Re: Reimbursement Resolution 22-R3042 RELATES TO THE STRATEGIC PLAN Strategic Goal- E. Provide and Foster Safe and Clean Water BACKGROUND The City’s Water Utility is working on finalizing the project plans for Well #8. The financing plan is to use debt proceeds for the construction. Staff is preparing an application to the State DNR to qualify for a Safe Drinking Water Fund Loan. The Safe Drinking Water Loan Program provides reduced interest rate loans for eligible projects. ADDITIONAL ANALYSIS The reimbursement resolution is a municipal resolution required by the IRS declaring the municipality's official intent to reimburse a municipal account with proceeds from a tax-exempt bond or promissory note. This allows the City to proceed with the project ahead of the loan closing and then reimburse those funds with Tax-Exempt Loan proceeds once the financing is completed. FINANCIAL IMPACT N/A RECOMMENDATION Recommend approval of the Reimbursement Resolution to be submitted with the Safe Drinking Water Loan application. SUGGESTED MOTION Motion to approve Resolution 22-R3042 authorizing a Reimbursement Resolution for the Well #8 project. 1 3  RESOLUTION NO. 22-R3042 RESOLUTION 22-R3042 DECLARING OFFICIAL INTENT TO REIMBURSE EXPENDITURES FROM PROCEEDS OF BORROWING WHEREAS, the City of Oconomowoc, Waukesha County, Wisconsin, (the ‘Municipality’) owns Municipal Water System (the ‘System’) as a public utility; and WHEREAS, the Municipality plans to construct Well #8 and Pump House (the “Project”), and the Municipality expects to finance the Project on a long-term basis by issuing tax-exempt bonds or promissory notes (the ‘Bonds”); and WHEREAS, because proceeds from the Bond will not be available prior to commencement of design and construction on the Project, the Municipality must provide interim financing to cover costs of the Project incurred prior to closing on the Bond; and WHEREAS, it is necessary, desirable, and in the best interests of the Municipality to advance monies from its funds on hand or short-term financing on an interim basis until Loan proceeds become available. NOW THEREFORE, BE IT HEREBY RESOLVED, by the Common Council of the City of Oconomowoc, Waukesha County, Wisconsin, that; Section 1. Expenditure of Funds: The Municipality shall make expenditures as needed from its funds on hand or short-term borrowing to pay the costs of the Project until Bond proceeds become available. Section 2. Declaration of Official Intent: The Municipality hereby officially declares its intent to reimburse said expenditures with proceeds of the Bond, the principal amount of which is not expected to exceed $4,000,000. Section 3. Unavailability of Long-Term Funds: No funds for payment of the Project from sources other than the Bond are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside by the Municipality pursuant to its budget of financial policies. Section 4. Public Availability of Official Intent Resolution: This Resolution shall be made available for public inspection at the Municipal Clerk’s Office within 30 days after its approval in compliance with applicable State law governing the availability of records of official acts including subchapter II of Chapter 19, and shall remain available for public inspection until the Loan is issued. Section 5. Effective Date: This resolution shall be effective upon its adoption and approval. DATED: CITY OF OCONOMOWOC By: Robert P. Magnus, Mayor ATTEST: Diane Coenen, Clerk 4  RESOLUTION NO. 22-R3041 RESOLUTION DESIGNATING AUTHORIZED REPRESENTATIVES TO FILE APPLICATIONS FOR FINANCIAL ASSISTANCE FROM STATE OF WISCONSIN ENVIRONMENTAL IMPROVEMENT FUND WHEREAS, it is the desire of the City of Oconomowoc, Wisconsin, a municipal corporation, to file several applications for state financial assistance for its Well #8 and Pump House facilities under the Wisconsin Environmental Improvement Fund (ss. 281.58, 281.59, 281.60, and 281.61, Wis. Stats.); and WHEREAS, it is necessary to designate a representative for filing said applications. NOW THEREFORE, BE IT HEREBY RESOLVED, by the City Council of the City of Oconomowoc that the City Administrator and Finance Director are hereby appointed as the authorized representatives for the City of Oconomowoc for the purpose of filing these applications, and that the representatives are further authorized and empowered to do all things necessary in connection with said applications. DATED: CITY OF OCONOMOWOC By: _____________________________ Robert P. Magnus, Mayor ATTEST: Diane Coenen, Clerk 5  Oconomowoc Utilities: Monthly Volume & Revenue Summary Metered Volume Units Metered Revenue Dollars 25 3.0 20 2.5 2.0 Million kWh 15 Million $ Electric 1.5 10 1.0 5 0.5 0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Lg Pwr 2020 Res 2020 Com 2020 Total 2020 Lg Pwr 2020 Res 2020 Com 2021 Total 2021 Lg Pwr 2021 Res 2021 Com 2021 Total 2021 Lg Pwr 2021 Res 2021 Com 2022 Total 2022 Lg Pwr 2022 Res 2022 Com 2022 Total 2022 Lg Pwr 2022 Res 2022 Com Note: Charts exclude non-metered revenue (pole attachments, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, line-loss, etc., amounts will differ from volume purchased from WPPI. 300 70 275 250 60 225 50 200 Million Gallons Thousand $ 175 40 150 Water 30 125 100 20 75 50 10 25 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Ind 2020 Res 2020 Com 2020 Total 2020 Ind 2020 Res 2020 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2022 Total 2022 Ind 2022 Res 2022 Com 2022 Total 2022 Ind 2022 Res 2022 Com Note: Charts exclude non-metered revenue (fire protection, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, main-breaks, etc., amounts will differ from volume pumped at well sites. 45 275 40 250 225 35 200 30 Million Gallons 175 Wastewater Thousand $ 25 150 20 125 100 15 75 10 50 5 25 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Ind 2020 Res 2020 Com 2020 Total 2020 Ind 2020 Res 2020 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2022 Total 2022 Ind 2022 Res 2022 Com 2022 Total 2022 Ind 2022 Res 2022 Com Note: Charts exclude adjoining sanitary districts and non-metered revenue (septic disposal, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, external sanitary districts, rain-seepage, etc., amounts will differ from volume received at treatment facility Y:\Utility Billing\Committee\[Sales Summary Charts 2022.xlsx]Data 6  Oconomowoc Utilities: YTD Volume & Revenue Summary Metered Volume Units Metered Revenue Dollars 250 25.0 200 20.0 Million kWh 150 15.0 Million $ Electric 100 10.0 50 5.0 0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Lg Pwr 2020 Res 2020 Com 2020 Total 2020 Lg Pwr 2020 Res 2020 Com 2021 Total 2021 Lg Pwr 2021 Res 2021 Com 2021 Total 2021 Lg Pwr 2021 Res 2021 Com 2022 Total 2022 Lg Pwr 2022 Res 2022 Com 2022 Total 2022 Lg Pwr 2022 Res 2022 Com Note: Charts exclude non-metered revenue (pole attachments, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, line-loss, etc., amounts will differ from volume purchased from WPPI. 3,000 600 2,500 500 2,000 Million Gallons 400 Thousand $ 1,500 Water 300 200 1,000 100 500 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Ind 2020 Res 2020 Com 2020 Total 2020 Ind 2020 Res 2020 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2022 Total 2022 Ind 2022 Res 2022 Com 2022 Total 2022 Ind 2022 Res 2022 Com Note: Charts exclude non-metered revenue (fire protection, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, main-breaks, etc., amounts will differ from volume pumped at well sites. 500 3,000 450 400 2,500 350 Million Gallons 2,000 Wastewater Thousand $ 300 250 1,500 200 150 1,000 100 500 50 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Total 2020 Ind 2020 Res 2020 Com 2020 Total 2020 Ind 2020 Res 2020 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2021 Total 2021 Ind 2021 Res 2021 Com 2022 Total 2022 Ind 2022 Res 2022 Com 2022 Total 2022 Ind 2022 Res 2022 Com Note: Charts exclude adjoining sanitary districts and non-metered revenue (septic disposal, etc.) Note: Quantities represent amounts invoiced. Due to timing of mid-month billing cycles, external sanitary districts, rain-seepage, etc., amounts will differ from volume received at treatment facility. Y:\Utility Billing\Committee\[Sales Summary Charts 2022.xlsx]Data 7  OCONOMOWOC UTILITIES - VOLUME STATISTICS Current Month Year To Date kWh Sold kWh Sold Volume Percent kWh Sold kWh Sold Volume Percent ELECTRIC Increase Increase Increase Increase May-22 May-21 (Decrease) (Decrease) May-22 May-21 (Decrease) (Decrease) Residential 5,323,703 4,982,667 341,036 6.8% 30,364,238 29,808,760 555,478 1.9% Commercial 1,958,698 1,787,858 170,840 9.6% 10,385,028 9,547,080 837,948 8.8% Large Power 10,300,694 10,251,895 48,799 0.5% 48,421,671 49,416,694 (995,023) -2.0% Public Street/Hwy Ltg. 46,118 45,939 179 0.4% 295,959 301,727 (5,768) -1.9% Private Yard Lighting 2,068 2,040 28 1.4% 13,530 13,566 (36) -0.3% Total Electric Sales 17,631,281 17,070,399 560,882 3.3% 89,480,426 89,087,827 392,599 0.4% Gallons Sold Gallons Sold Volume Percent Gallons Sold Gallons Sold Volume Percent (Thousands) (Thousands) (Thousands) (Thousands) WATER Increase Increase Increase Increase May-22 May-21 (Decrease) (Decrease) May-22 May-21 (Decrease) (Decrease) Residential 21,980 24,200 (2,220) -9.2% 108,047 111,835 (3,788) -3.4% Multi Family 4,851 4,534 317 7.0% 22,759 21,778 981 4.5% Commercial 11,862 12,081 (219) -1.8% 51,477 52,308 (831) -1.6% Industrial 3,518 3,298 220 6.7% 15,483 14,435 1,048 7.3% Public Auth/Muni 1,110 1,138 (28) 0.0% 1,882 0 1,882 0.0% Total Water Sales 43,321 45,251 (1,930) -4.3% 199,648 200,356 (708) -0.4% Gallons Sold Gallons Sold Volume Percent Gallons Sold Gallons Sold Volume Percent (Thousands) (Thousands) (Thousands) (Thousands) WASTEWATER Increase Increase Increase Increase May-22 May-21 (Decrease) (Decrease) May-22 May-21 (Decrease) (Decrease) Residential 21,890 24,092 (2,202) -9.1% 107,740 111,486 (3,746) -3.4% Commercial A 14,184 14,076 108 0.8% 68,996 65,756 3,240 4.9% Commercial B 1,175 1,117 58 5.2% 5,100 5,402 (302) -5.6% Industrial A 2,185 2,051 134 6.5% 9,306 9,480 (174) -1.8% Industrial B 527 215 312 145.1% 2,742 1,577 1,165 73.9% Total Gallons Treated 39,961 41,551 (1,590) -3.8% 193,884 193,701 183 0.1% Note: Quantities sold are amounts invoiced during the month. Due to the timing of billing cycles, the amounts may not match consumption during the calendar month. Y:\Utility Billing\Committee\[Sales Table for Committee 2022.xlsx]CommSummary 8  COMMITTEE REPORT – June 2022 Utility Billing Inflation Impact on Electric Rates – This is an update from the December Utility Committee report on the impact of rising natural gas prices on our electric rates. Our base electric rates are set by the Public Service Commission (PSC). Due to constant market changes in the unit cost of purchased energy, we adjust rates monthly with the Power Cost Adjustment Charge (PCAC). The PCAC (red line on first chart below) may be positive or negative. Starting in 2017, WPPI changed one of the rate components of the power cost (electric demand, blue line below), to change monthly to better align with actual costs and usage. Because the base rates we charge to customers don’t change monthly, this variation is absorbed by our PCAC rate. As expected, the two typically move together in a correlated pattern. A large majority of electricity that WPPI purchases on our behalf is built into long term agreements. Over many years, much generation has been moving from coal to natural gas. The price of natural gas typically has gone down in summers, due to reduced usage for heating. Similar to gasoline, prices have been increasing since last year. The WPPI demand rate is increased June through September, with the highest rates in July & August. The May PCAC is circled on the chart below and is near our peak from last summer even though we have not yet been charged the higher summer demand rates. In May, this resulted in about a 15% increase in cost compared to last year. While well below the increases in gasoline, we are expecting further increases throughout the coming summer months. WPPI is evaluating smoothing out monthly demand rates for 2023, to help minimize the large monthly fluctuations. PSC Electric Rate Adjustment – While the timing is unfortunate, as mentioned in last month’s report, the electric utility is preparing for a base electric rate increase that would become effective in early 2023; about four years since the prior adjustment. Purchased power represents a significant majority (72%) of the electric utility’s expenses total operating expenses. The increased costs due to market prices mentioned above do not provide any additional funding for local operations. The red line on the second chart below shows that residential customers have been paying a net rate of about $0.11/kWh for the past decade. The last PSC base rate change actually had a small decrease in our residential energy rate per kWh. This was offset by a larger increase in the monthly fixed charge. In addition to increasing operating expenses, the rate adjustment is needed to fund the cost of capital projects which have expanded greatly in the past few years. The green line in the last chart shows that the residual revenue after paying for purchased power has not significantly changed in the past several years. The specific amounts and timing of the electric rate adjustment is not yet known. We are currently working on the preliminary projections and calculations. The PSC will ultimately determine the details of any new rates. Later this year after more of the preparation work is completed, we will formally request approval from the committee and city council to proceed with submitting the rate change application to the PSC. John Schuh, CPA Utility Accounting Manager 9 10  COMMITTEE REPORT – June 2022 Electric Utility Projects that have been completed by June 13, 2022  Three phase service and temporary service for Journey 21 in Pabst Farms area  Installed remaining cable and transformers at Olympia Fields Apartments  Three phase service and wire move for Starbucks in Pabst Farms Services:  New Services: 15  Customer calls: 12 service calls: 3 of these were transformer faults and 4 were underground faults  Street Light tickets: 8 Traffic Control Lights:  Nothing New Substations:  Infrared testing Training:  Apprentice School – Tim Will  MEUW Management Training - Jason Otto and Dustin Gruling  Excavation Competent Person – Full Electric and Water crews, several DPW & WW Major projects that have been started, are in works:  Cable replacement from Anderson St north to Washington St  Cable replacement Olympia Fields area  Overhead to Underground South Beach Rd  Utility pole replacements  Arrowood subdivision phase 1 install underground cable  Overhead to underground circuit 84 from Forest St to Armour Rd 11 12  Wastewater Operations Summary June 2022 Precipitation in May was 2.36” and through June 9th we had .1.02”. The influent flow for May 2022 was 2.269 MGD and through June 9th was. 2.483 MGD. Permit parameters for April are as follows: Permit % Parameter Influent Effluent Limits Reduction BOD - mg/l 227 2.5 15 99.8% TSS - mg/l 264 1.41 15 99.38% Phos. - mg/l 5.02 .56 0.60 88.6% E-coli X X 126#/100ml X Amm. N - mg/l 20.3 .21 N/A 98.5% Chlorides X 453 Variance X NE Regional Park Lift Station design is going out for bids week of June 13. Primary Digester project: the contractor is mobilizing and will start week of June 13 Primary Digester cover will be arriving the week of June 20 13