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State of the City Mayor Bob Johnson focuses on new business, rising employee costs

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Posted: Friday, November 11, 2011 12:00 am

Mayor Bob Johnson focused his State of the City speech Thursday on several new companies that are coming to Lodi and current businesses that are expanding.

One large indication that the tourist industry is growing is that tax revenue on hotel rooms increased 16 percent over the last year, Johnson said.

The unemployment rate is also the lowest it has been in the last two years, at 11.7 percent, Johnson said.

City leaders are excited about recent interest from an East Coast-based pharmaceutical company that wants to open its western headquarters in Lodi, Johnson said.

At this point, that is the only information the city has, Johnson said.

“It’s a new business coming in and will be an attractive addition to our community,” Johnson said.

He also announced that Home Depot began construction in October at Reynolds Ranch at Highway 99 and Harney Lane and will open sometime in early spring.

Meanwhile, Costco has been generating sales tax revenue for the city since it opened in June.

“By all reports, Costco is ‘extremely pleased’ in their results to date,” Johnson said.

Citizens have said that they love having the store in town, Johnson said, and it is generating traffic from places like Stockton, Galt and Rio Vista.

During the initial projections, Costco and Home Depot were initially expected to generate $325 million combined in revenue each year and provide 350 additional jobs.

But with Costco’s success so far, that number will likely increase, Johnson said.

Businesses that are already in Lodi are also expanding, he said. Quashnick Tool Company recently purchased $800,000 in new machinery. Scientific Specialties Services spent $9 million to expand 70,000 square-feet, creating 30 new jobs.

“I know for a fact that many other companies in the community are making commitments and investing money into their future,” he said.

Downtown is also gaining some new businesses. Alebrijes, a Mexican restaurant on Ham Lane, is planning to move to Downtown, and Toasted Toad, a winery from Livermore, and another winery from Victor are planning to open tasting rooms, bringing the number of tasting rooms to nine in the Downtown area, he said.

But it’s not all good news.

Unfunded state mandates are causing the city millions of dollars every year, Johnson said.

“We are getting killed, as a city and as a business entity, by some burdensome regulations out of Sacramento. Nobody wants dirty water, nobody wants dirty air, but at what cost do we have to make these things clean?” he said.

For example, he said the city is facing a new regulation for storm water that will mean the city will have to spend $1 to $2 million a year to meet the new standards.

The city also spends 57 percent of its wastewater budget to satisfy state requirements before the water is discharged into the Delta, he said.

“We expect that those costs will continue to go up,” Johnson said.

During the last three years, the city of Lodi has seen a significant reduction in the workforce, going from 480 to 384 total employees.

“When you start making dramatic cuts in your personnel force, you are going to wind up having impacts on services,” Johnson said.

The city is in negotiations with employees to deal with rising personnel costs, he said.

“Most knowledgeable people recognize that the benefit programs we are currently enjoying are unsustainable,” he said.

Pensions are estimated to cost an additional $2 million over the next three years. During the last eight years, health care costs grew 153 percent and will likely continue to rise.

He said the employees have given up benefits and salary during the past couple of years to help balance the budget, but there will need to be more cuts.

“In my opinion, there need to be even more changes. We can’t continue kicking the can down the road. We’ve run out of road,” he said.

He encouraged Lodi residents to call City Council members and give their opinion on personnel and city budget cuts.

He also touched on several other topics:

On a new medical facility: Next year, construction will also begin on a Sutter Gould medical office at the corner of Harney Lane and West Lane.

“This will be staffed by professionals, people who make better-than-average wage,” Johnson said.

On a Walmart Supercenter coming to town: A Walmart Supercenter in Lodi is still delayed because of a lawsuit in the 3rd District Court of Appeals. City Attorney Steve Schwabauer expects a decision from the court in December or January, Johnson said.

“If there is a positive decision and Walmart gets the green light to go ahead, you would certainly expect that that would begin to create interest for additional development in the 40 acres of the southwest corner of Lower Sacramento Road and Kettleman Lane,” Johnson said.

On the Lodi Energy Center: The new natural gas power plant at White Slough wastewater treatment plant will come online in 2012. The city paid $36 million to join with other agencies in the Northern California Power Agency to build the plant.

It currently is providing 230 well-paying jobs to construction workers, many of whom live within a 50-mile radius of Lodi, Johnson said.

NCPA is also paying the city $40,000 a year to lease land for the plant, and another $1 million a year to use the city’s wastewater to cool the plant. There will be 14 full-time employees when it goes online.

On the surface water treatment plant: With the $36 million project, Johnson focused on the possibility for the city to contract with a private company to run the plant. The council is in the middle of deciding whether to hand over the operations to one of two companies. ‘That doesn’t happen very often, certainly not in Lodi. There’s an opportunity at least on paper that there could be a significant savings on salary and benefits by having people other than city employees operate this facility.

He said the plant will be online in 2012, and will allow the city to preserve its groundwater supply.

On senior housing: Eden Housing, a nonprofit, is still securing financing to build an affordable senior housing development on Tienda Road. The project also will result in the development of Roget Park.

“When this project gets completed, probably in 2014, it will provide 80 new units of much-needed senior housing in our community,” he said.

On eventually coming out of the recession: At the end of his presentation, Johnson showed a kitten clinging to a tree limb.

“We have had 34 recessions and every one has come to an end. What we have to do is hang in there,” he said.

On his time as mayor: Johnson said that compared to his last term as mayor in 2007, this year has been more chaotic.

“In another two weeks, someone else will be mayor, and I can sit back and have a glass of scotch,” Johnson said.

Contact reporter Maggie Creamer at maggiec@lodinews.com or read her blog at www.lodinews.com/blogs/city_buzz.

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  • roy bitz posted at 7:47 pm on Tue, Nov 15, 2011.

    roy bitz Posts: 489

    Be glad the city is unable to bll for the air we breath----yet.
    You make a good point regarding waste water vs treat and drink water billing. I hate to think that one day a waste water meter would be mandated.
    Good news though:
    Mayor Johnson says NCPA will be buying at least some of Lodi's waste water for a cool million dollars a year.
    This million dollars may be rebated to rate payers----or maybe it will be diverted to pet projects such as the grape bowl. The council recently announced a plan to transfer ( TAKE ) $200,000 from electric utility to pay for things at the grape bowl.

  • Joanne Bobin posted at 12:50 pm on Tue, Nov 15, 2011.

    Joanne Bobin Posts: 4306

    Mr. Bitz: Also, regarding meters, I read a teeny, tiny paragraph at the very end of the COL utility newsletter this past summer that the COL is hoping to cash in by increasing waste water charges to home owners - they will tie the meter usage to waste water so the more water one uses, the higher the waste water charge, whether or not the water runs into the sewer system or not. I am assuming that high usage for garden/landscape purposes that does not necessarily end up in the COL drainage systems will count toward higher rates.

  • roy bitz posted at 7:59 pm on Sun, Nov 13, 2011.

    roy bitz Posts: 489


    Thanks for commenting on my comments.
    Ron--I believe some growers are concerned about salt water creeping into our ground water especially those nearer the Delta. If this was a "real" concern I think the council gentlemen would have shouted it out loud and clear-- they did not.
    Joanne--I hope you are right--that the State will provice some funding for the surface water treatment plant. However, since the council gentlemen have never mentioned this possibility, I doubt this will happen.
    I think our council gentlemen have misrepresented the need for this project. They have used and continued to use fear tactics to push this boondoggle.
    The points I wish to make :
    *Ground water overdraft is a rural problem---not a city problem.
    *This massive will save only about 3% of the ground water overdraft problem.
    *Those outside the city limits can pump unlimited/unrestricted amounts of ground water while city water customers are forced to purchase water meters and pay for every gallon we use.
    *I believe our then three council gentlemen misrepresented the cost/benefit of this project.

  • Joanne Bobin posted at 4:05 pm on Sun, Nov 13, 2011.

    Joanne Bobin Posts: 4306

    Mr. Bitz - A while back I was checking out AB 2572, the water meter bill, and part of that legislation mandated that cities would have to comply with the bill in order to apply and/or qualify for state funds for water treatment facilities.

    I believe that this funding was an impetus for the COL to pursue the "treat and drink" facility near Lodi Lake which, like you, I believe to be a huge waste of taxpayer money.

    I do rely on your comments on this project since you seem to keep very up-to-date on the water situation in Lodi. Thank you for that.

  • Ron Werner posted at 10:31 am on Sun, Nov 13, 2011.

    Ron Werner Posts: 73

    Roy - the construction of the treatment plant is not only about ground water draft. Some think that once the peripheral canal is built salt water intrusion from the delta will occur in ground water as the fresh water is diverted south. Since nobody knows if brackish intrusion will occur or when, we cannot wait until it happens to start to solve the problem. The peripheral canal will change water usage in our area and not for the better.

  • roy bitz posted at 3:54 pm on Sat, Nov 12, 2011.

    roy bitz Posts: 489

    Sorry all--my laptop has a hair trigger

  • roy bitz posted at 3:51 pm on Sat, Nov 12, 2011.

    roy bitz Posts: 489

    8% of the two hundred thousand acre feet over draft problem---those living outside the city account for 92% of the problem.
    The city says the plant will cost some 36 million dollars. This may be true but the TOTAL cost of this massive project is closer to two hundred million dollar

  • roy bitz posted at 3:37 pm on Sat, Nov 12, 2011.

    roy bitz Posts: 489

    Are you referring to the waste water treatment plant at White Slough or the new "treat and drink" water treatment plant at Lodi Lake?
    My comments refer only to the "treat and drink" plant at Lodi Lake.
    I do not believe this plant will make a dent in the ground water over draft is a rural problem---the entire city of lodi uses only about over draft

  • Joanne Bobin posted at 12:41 pm on Sat, Nov 12, 2011.

    Joanne Bobin Posts: 4306

    Water meters = eligibility for state funds for water treatment plant = license to spend taxpayer money whether we need it, whether it works or whatever. As long as we (COL) don't miss out on "free" money.

  • roy bitz posted at 11:56 am on Sat, Nov 12, 2011.

    roy bitz Posts: 489


    The ground water over draft is some 200,000 acre feet annually.
    The city of Lodi uses some 16,000 acre feet of water annually.
    This project will save just 6,000 acre feet of ground water annually, 3% of the over draft.
    The over draft is a rural problem---not a city problem. This project is a boondoggle in my view.
    I hope Mr. Johnson or Mr. Hansen will tell me my data is wrong and prove once and for all that this is a "good use of rate payer money.

  • roy bitz posted at 11:49 am on Sat, Nov 12, 2011.

    roy bitz Posts: 489

    Two questions:
    1. Clean water---at what cost?
    2. WIll the surface water treatment plant really preserve the city's ground water?

    The total cost of the surface water treatment will project will be some two hundred million dollars. The 36 million dollar figure does not include the millions spent on infrastructure so far, the cost of the bond, operation of the plant or the cost of the water.

  • Joanne Bobin posted at 12:37 pm on Fri, Nov 11, 2011.

    Joanne Bobin Posts: 4306

    Mr. Johnson must be kidding:

    "Nobody wants dirty water, nobody wants dirty air, but at what cost do we have to make these things clean?” he said."

    Apparently, the City of Lodi just passes the cost of this mess on to the taxpayer. The big PCE/TCE fiasco caused by several local businesses and the ensuing legal battle was passed on to COL utility customers in the form of an extra charge on our water bills.

    Funny that the City got smart back in March and, instead of listing the charge as a line item on the bill, they just incorporated it into the basic charge for water.

    If government regulations had been stiffling when these businesses decided to pollute our water by dumping chemicals, I wouldn't be out $110 every year to pay for it.

  • Darrell Baumbach posted at 9:18 am on Fri, Nov 11, 2011.

    Darrell Baumbach Posts: 9403

    But it’s not all good news.
    Unfunded state mandates are causing the city millions of dollars every year, Johnson said.
    “We are getting killed, as a city and as a business entity, by some burdensome regulations out of Sacramento. Nobody wants dirty water, nobody wants dirty air, but at what cost do we have to make these things clean?” he said.

    I think Mr Trovinger must be shocked and surprised that some perceive government regulations stifling , expensive and a reason to move jobs to a more business friendly environment...



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