HomeMy WebLinkAbout2023-02-13 City Council Agenda Packet
CITY COUNCIL
Special Meeting
Monday, February 13, 2023
Council Chamber & Hybrid
3:30 PM
Amended Agenda
Amended Agenda items appear below in RED
Pursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference or in person. To maximize public safety
while still maintaining transparency and public access, members of the public can choose to
participate from home or attend in person. Information on how the public may observe and
participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if
attending in person. The meeting will be broadcast on Cable TV Channel 26, live on
YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to MidpenMedia Center
https://midpenmedia.org.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238)
Meeting ID: 362 027 238 Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an
amount of time determined by the Chair. All requests to speak will be taken until 5 minutes
after the staff’s presentation. Written public comments can be submitted in advance to
city.council@CityofPaloAlto.org and will be provided to the Council and available for inspection
on the City’s website. Please clearly indicate which agenda item you are referencing in your
subject line. PowerPoints, videos, or other media to be presented during public comment are
accepted only by email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting.
Once received, the Clerk will have them shared at public comment for the specified item. To
uphold strong cybersecurity management practices, USB’s or other physical electronic storage
devices are not accepted.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Council reserves the right to use more or less time on any item, to
change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER
AGENDA CHANGES, ADDITIONS AND DELETIONS
2 Special Meeting February 13, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for
public inspection at www.CityofPaloAlto.org.
SPECIAL ORDERS OF THE DAY (3:30 -3:35 PM)
1. Recognition of the Palo Alto Library as a Five Star Library
CONSENT CALENDAR (3:35-3:40 PM)
4. Approval of Minutes from the January 28, 2023 and January 30, 2023 City
Council Meeting
5. Adoption of a Resolution Adopting Updated Guidelines for the Submission
and Tabulation of Protests in Connection with Rate Hearings Conducted
Pursuant to Article XIIID, Section 6 of the California Constitution and
Repealing and Replacing Resolution 8815; CEQA status—not a project.
6. Approval of a 6-year Contract with Manesco Corporation in an Amount
Not-to-Exceed $697,326 to Conduct Annual Walking and Mobile Gas Leak
Surveys and Annual Resurveys of Existing Gas Leaks to Begin March 2023
($633,932) and Authorization of Contract Contingency ($63,393); CEQA
status—exempt under CEQA Guidelines sections 15301(c) and 15308.
7. Approval of a Purchase Order with Interstate Truck Center in an Amount
Not to Exceed $297,244 for the Purchase of Two 2023 International CV
Chipper Body Trucks, Utilizing a Cooperative Purchase Agreement, Funded
by Capital Improvement Program Project VR-23000
CONTINUED ACTION ITEM FROM FEBRUARY 6, 2023 (3:40 - 5:10 PM)
AA1. Approval of the 2023 City Council Priority Focus Areas, and Objectives
Areas, Objectives, and Respective Major Projects for Calendar Year 2023
STUDY SESSION
Study Sessions will start at the times certain listed below. If the previous items are longer
than anticipated, they will be continued to the end of the meeting.
2. Comprehensive Economic Development Strategy Update and
Study Session Supplemental Report (5:10 - 6:40 PM)
3. Buena Vista Mobile Home Park Update from the Santa Clara County
Housing Authority (6:40 -8:10 PM)
PUBLIC COMMENT (8:10 - 8:35 PM)
CITY MANAGER COMMENTS (8:35 - 8:50 PM)
3 Special Meeting February 13, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for
public inspection at www.CityofPaloAlto.org.
ACTION ITEMS
AA2. Review and Accept the FY 2023 - FY 2032 Long Range Financial Forecast
(LRFF) and FY 2023 Budget Development Guidelines (Item continued from
February 6, 2023 Meeting) (8:50 - 9:50 PM)
8. Discuss the FY 2023 Mid-Year Budget Review and Approve 1) FY 2023
Budget Amendments in Various Funds, and 2) Amendments to the FY
2023 Table of Organization to add 5.25 full-time and 2.43 part-time Full
Time Equivalent (FTE) Positions Supplemental Report (9:50 - 10:50 PM)
9. Discussion and Possible Revision to 2023 Standing Committee
Topics Removed From Consideration
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
ADJOURNMENT
INFORMATION REPORTS
10. Investment Activity Report for the Second Quarter, Fiscal Year 2023
11. ADU Quarterly Report for Q1 & Q2 of 2022
AMENDED AGENDA ITEMS
AA1. Approval of the 2023 City Council Priority Focus Areas, and Objectives Areas,
Objectives, and Respective Major Projects for Calendar Year 2023 (Item
continued from February 6, 2023 Meeting)
2. Comprehensive Economic Development Strategy Update and Study
Session Supplemental Report
8. Discuss the FY 2023 Mid-Year Budget Review and Approve 1) FY 2023 Budget
Amendments in Various Funds, and 2) Amendments to the FY 2023 Table of
Organization to add 5.25 full-time and 2.43 part-time Full Time Equivalent (FTE)
Positions Supplemental Report
AA2. Review and Accept the FY 2023 - FY 2032 Long Range Financial Forecast
(LRFF) and FY 2023 Budget Development Guidelines (Item continued from
February 6, 2023 Meeting)
4 Special Meeting February 13, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for
public inspection at www.CityofPaloAlto.org.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to hybrid meetings via email, in person,
teleconference, or by phone.
1. Written public comments may be submitted by email to
city.council@cityofpaloalto.org.
2. In person public comments please complete a speaker request card located on the
table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to
discussion of the item.
3. Spoken public comments using a computer or smart phone will be accepted through
the teleconference meeting. To address the Council, click on the link below to access a
Zoom-based meeting. Please read the following instructions carefully.
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you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
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remarks to the agenda item and time limit allotted.
5.
Click to Join Zoom Meeting ID: 362‐027‐238 Phone: 1(669)900‐6833
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 48 hours or more in
advance.
Item No. 2. Page 1 of 6
CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Study Session
Lead Department: City Manager
Meeting Date: February 13, 2023
TITLE
Comprehensive Economic Development Strategy Update and Study Session
RECOMMENDATION
Staff recommends that the Council receive this report and provide feedback on critical focus
areas for inclusion in the drafting of a Comprehensive Economic Development Strategy.
EXECUTIVE SUMMARY
This report and accompanying study session represent the next step in the City’s creation of a
Comprehensive Economic Development Strategy. The City’s consultant, Streetsense,
‘diagnostic’ is attached to this report and will be the focus of the study session. The purpose of
the study session is Council discussion and feedback on the diagnostic findings and draft
Guiding Principles. Both of these and the general consensus of the City Council through its
discussion will be used to inform the next and final step of drafting the comprehensive
economic development strategy.
Streetsense is working to “develop a market-informed economic development strategy that will
ensure Palo Alto's post-COVID competitiveness by identifying impactful public sector
interventions, policies and investments for which there is both need and consensus for action.”
Streetsense was selected as the consultant to create the Comprehensive Economic
Development Strategy and presented their first impressions to Council on November 7, 2022.
The first phase of their work was focused on learning and gathering data and speaking with
stakeholders. This second phase of their work, the diagnostic, is focused on analyzing and
synthesizing the information they gathered to accurately assess and discuss the issues we are
facing as a City.
BACKGROUND
This study session is the second of three planned discussions between Streetsense and the City
Council regarding the creation of a comprehensive economic development strategy. On
November 7, 2022, Streetsense presented their in-progress work to City Council. At that
meeting, they discussed the purpose and goals of the comprehensive economic development
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strategy, the phases and timeline of their project, and preliminary considerations and findings
from their work to date.
The report for the November 7, 2022 study session is available online1, as is the presentation2,
and the video of City Council’s discussion3, and the summary minutes from the meeting4.
Following their discussion with the City Council in November, Streetsense continued their
information collection and research phase. Streetsense has since completed the diagnostic, the
second phase of the project, which is the focus of this report and accompanying study session.
The third and final phase will be the creation of a comprehensive economic development
strategy with recommendations. This third phase will also be brought to the City Council for
consideration and adoption.
ANALYSIS
Before reaching the third and final phase of Streetsense’s work, it is important that
stakeholders – including the City Council – share a collective understanding of the challenges at
hand within the city limits of Palo Alto. The attached diagnostic is important to establish
consensus on the areas that Streetsense will target in its a comprehensive economic
development strategy. Recommendations in this strategy will be guided by this diagnostic and
the stakeholder feedback surrounding it, ultimately leading to support through City
investments, interventions, policies, and programs.
Streetsense’s work focuses on six study areas that have been classified into three categories.
•‘Regional/super-regional centers’:
1. Downtown/University Avenue
2. Stanford Shopping Center,
•‘Community-serving centers’:
3. California Avenue
4. Town & Country Village, and
•‘Neighborhood-serving’ areas:
5. Midtown
6. Charleston shopping Center.
This ‘Diagnostic,’ phase two of the contracted project, comprehensively analyzes the City’s
current condition through four areas. The full diagnostic is included as Attachment A to this
report and will be discussed in greater detail by Streetsense on February 13, 2023. A summary
1 City Council Staff Report November 2, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2022/20221107/20221107pccsm-amended-linked-q.a-
2.pdf#page=8
2 Presentation From November 2, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/item-presentations/2022/20221107/20221107pptccsm-item-2.pdf
3Video From November 2, 2022 https://www.youtube.com/live/VdBcadUd_Fc?feature=share&t=945
4 Summary minutes From November 2, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2022/20221114/20221114smccsm.pdf
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of highlights is below; the full Diagnostic concludes with findings and guiding principles on slide
62.
1. Market Assessment (begins on Streetsense slide 13)
a. Competition Assessment
b. Retail Demand Assessment
2. Business Environment (begins on Streetsense slide 26)
a. Sales Tax Analysis
b. Hospitality/Tourism Assessment
3. Administrative Assessment (begins on Streetsense slide 37)
a. Regulatory Framework
b. Organizational Capacity and Stewardship
4. Physical Assessment (begins on Streetsense slide 48)
a. City-Wide Connectivity and Accessibility
b. District SWOT Analysis
1. Market Assessment
Market Assessment reviews retail uses and groups them into Neighborhood Goods and Services
(includes grocery stores, neighborhood markets, dry cleaners, barber shops, and others), Food
and Beverage (includes restaurants, bars, cafes, and others), and General merchandise, apparel,
furniture and other (includes apparel stores, clothing stores, hardware stores, sports stores,
and others). Non-retail uses, such as financial, educational, religious, or governmental
institutions are not factored into the retail demand model.
Competition Assessment: Streetsense has measured retail competition for Palo Alto on two
levels; Convenience, access, visibility, tenant quality, and a variety of offerings are all factors
that inform the assessment of market influence by each retail competitor.
•Locally-Serving neighborhood centers for convenience-based trips: Palo Alto faces strong
competition for groceries and has a number of big-box retailers clustered along the
periphery of City limits in neighboring jurisdictions.
•Regionally-serving destination hubs for experience-based trips: the City faces
competitive downtown environments in nearby cities as well as traditional malls.
Additionally, there is competition even within Palo Alto with University Avenue,
Stanford Shopping Center, and, to some extent, California Ave. all operating as regional
hubs.
Annual retail rents and vacancies in Palo Alto based on Streetsense’s analysis:
•Retail rents are high, with rental rates 80% higher than the national average of $27.55
per Square Foot. Stanford Shopping Center is the most expensive ($77.48/sf), followed
closely by University Ave ($76.68/sf) and Town and Country ($72.00/sf).
•Overall retail vacancy rate in Palo Alto was about 8% at the end of 2022; University
Avenue is estimated to be running a 10% vacancy rate in retail space and California Ave.
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was higher at 15% vacancy. The National Average is 6.5% retail vacancy for the same
period.
Retail Demand Assessment: Streetsense’s market assessment looked at the demand for retail in
Palo Alto. As the City continues to navigate the transition from COVID-19 pandemic, the level of
retail demand is an important factor in developing a comprehensive economic development
strategy. Through Streetsense’s analysis, they concluded that:
•Hybrid work has reduced the demand for retail in Palo Alto by more than 100,000
square feet (roughly equivalent to the amount of combined retail space at Midtown and
Charleston Shopping Centers).
•Retail demand will steadily increase, especially as new developments continue in the
region, but according to their calculations the demand will not catch up to the existing
retail supply for more than 10 years.
2. Business Environment
As a subcontractor to Streetsense, HdL conducted a sales tax analysis as part of examining the
local business environment. Streetsense also examined the current state of the City’s hotels
and visitors through its Hospitality/Tourism Assessment.
Sales Tax Analysis: HdL found that small and locally owned business were the hardest hit
during COVID-19, with restaurants, retailers, and personal service providers being particularly
impacted. Highlights of HdL findings include:
•Local businesses are still not back to pre-pandemic cash flow nor revenue margins,
however sales tax has increased from pandemic lows. This suggests that inflation, labor
shortages, and other disruptions continue to adversely impact these vulnerable
businesses.
•Declines in sales tax revenues were occurring before the pandemic, which may be an
indicator of broader trends that were at work and then worsened by the COVID-19
pandemic.
•Palo Alto’s downtown areas of University and California Avenue have had the slowest
sales tax recoveries from the COVID-19 pandemic, while Stanford Shopping Center and
Town and Country Village have better recovered.
•Neighborhood Goods and Services were the least affected by the pandemic from a sales
tax perspective. This category makes up only 4% of total sales tax for the six focus
districts of the study (2% of Citywide Sales Tax), and therefore its resilience was not
impactful to overall revenues. Additionally, Palo Alto has the lowest sales dollar per
capita for Neighborhood Goods and Services businesses compared to neighboring
cities.
Hospitality/Tourism Assessment: found that Palo Alto’s lodging sector was recovering
consistent with the national pace. However, since the largest contributors to occupancy are
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medical, education, and business travelers, this sector remains vulnerable in the face of
recession concerns.
•Weekday occupancy of hotels is showing signs of improvement.
•Even prior to the COVID-19 pandemic, hotels in Palo Alto historically had higher vacancy
rates over the weekends. This suggests that growing weekend occupancy rates with
non-business travelers may be an area for further work.
3. Administrative Assessment
Streetsense also looked at various elements of the City to inform the Administrative
Assessment including a review of the regulatory environment and understanding the ecosystem
of partner organizations to inform organizational capacity and stewardship.
Regulatory Assessment: Recent trends in retail and changing work patterns may warrant
revisiting certain sections of Palo Alto’s zoning code; Streetsense noted in particular the highly
regulated environments of Downtown and California Avenue. In contrast, Stanford Shopping
Center and Town & Country Village provide centralized ownership resulting in more flexibility
and clarity around what is allowed and what is not allowed to aid tenants.
Organizational Capacity and Stewardship: When Streetsense examined the ecosystem of
partner organizations, they found that the City has different arts, culture, and entertainment
organizations that provide options at both a City level and at a district level. However, there is a
lack of partner organizations to help serve as stewards and partners in economic development
for California Ave and University Avenue.
4. Physical Assessment
Streetsense included some of their preliminary thoughts on the Physical Assessment of Palo
Alto when they discussed the project with City Council on November 7, 2022. This work was
expanded as the fourth component of the diagnostic.
Accessibility and Connectivity: Streetsense explored the accessibility and connectivity of the
City’s roadway and transit networks. Some important gaps identified by Streetsense are already
in the process of being addressed, notably the areas of grade separation and on-demand
shuttle service to help improve transit access.
Focus Area SWOT Analysis: Streetsense performed a Strengths, Weaknesses, Opportunities, and
Threats (SWOT) analysis of the physical infrastructure for Downtown, California Avenue,
Stanford Shopping Center, Town and Country, Midtown, and Charleston Shopping Center. This
analysis looked at access/connectivity, parking, wayfinding/signage, sidewalks and street
furniture, gathering spaces and building. This analysis is presented in Attachment A; positive
attributes in each area are highlighted in green and areas for improvement are highlighted in
red.
Guiding Principles for Drafting of Comprehensive Economic Development Strategy
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Through the Diagnostic, Streetsense has developed their ‘guiding principles’ that will be used to
help address the third and final phase of the project, which is the creation of a comprehensive
Economic Development Strategy through recommendations.
The guiding principles developed by Streetsense are:
•Reinforce hierarchy of place
•Improve accessibility
•Adopt policies that reflect changing market conditions
Discussion of the guiding principles and the City Council feedback and consensus of priority
principles will be an important part of the study session on February 13, 2023. This discussion
will directly impact the third and final stage of this project, the drafting of a comprehensive
Economic Development Strategy with recommendations for future actions.
FISCAL/RESOURCE IMPACT
The discussion on February 13 is not expected to affect immediate resource needs, the
resources allocated to Economic Development are an important consideration for ongoing
work. The City has ongoing funding for the Economic Development coordinator role and some
ongoing funding for limited consultant support (less than $25,000 annually).
As the City refines the scope of its economic development function through Streetsense’s work,
scaling resources to align with that scope will require further resources and budgetary actions.
Staff will work with Streetsense to develop proposals that appropriately scale the City’s
economic development function to align with Council’s feedback throughout the process and
will return with proposals for consideration through the development of the FY 2024 budget.
STAKEHOLDER ENGAGEMENT
Community stakeholders, including residents and representatives from various business
sectors, including restaurants, retailers, hoteliers, property owners, and others, have been
engaged consistently through the City’s recent work on economic development. As the City
transitions out of the pandemic, staff will continue to engage residents and businesses in
meaningful dialogue to help inform and maintain the City’s economic vibrancy.
ENVIRONMENTAL REVIEW
Holding a study session on economic development will not directly or indirectly cause physical
changes to the environment and therefore this study session is not a project under the
California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Streetsense Diagnostic
APPROVED BY:
Ed Shikada, City Manager
Report #: 2302-0915
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DRAFT FOR INTERNAL REVIEW ONLY
PALO ALTO
ECONOMIC DEVELOPMENT
STRATEGY
DIAGNOSTIC
PHASE 2 DELIVERABLE
PREPARED FOR PALO ALTO, CA
FEBRUARY 13,2023
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Attachment A - Streetsense
Diagnostic
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TABLE OF CONTENTS
01 PROJECT OVERVIEW
02 STUDY AREAS
03 MARKET ASSESSMENT
04 BUSINESS ENVIRONMENT
05 ADMINISTRATIVE ASSESSMENT
06 PHYSICAL ASSESSMENT
07 GUIDING PRINCIPLES
08 APPENDIX
CONTACT
Larisa Ortiz
Managing Director
Streetsense
lortiz@streetsense.com
641 S ST NW
WASHINGTON,DC 20001
STREETSENSE.COM
@REALSTREETSENSE
1/27/2023 DRAFTItem 2
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Diagnostic
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01
PROJECT
OVERVIEW
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Diagnostic
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PROJECT TIMELINE
We are here
IMMERSION &DISCOVERY
•Kick off session
•Field work
•Stakeholder engagement
•Focus groups and interviews with business
owners, hotel operators, residents, City Staff
•Council presentation
DIAGNOSTIC
•Retail market analysis
•Administrative capacity assessment
•Business environment assessment
•Physical assessment
•Coordination with California Ave/Ramona St
Consultant
•Council presentation
ECONOMIC DEVELOPMENT
STRATEGY
•Draft work plan development
•Final work plan development
Before advancing to a discussion of strategic interventions, the Diagnostic phase of this exercise
ensures that we share a collective understanding of the challenges at hand. This milestone is important
to establish consensus for action and precedes a discussion of recommendations that will be led or
supported by public sector investments, policies and programs.
1/27/2023 DRAFTItem 2
Attachment A - Streetsense
Diagnostic
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PHYSICAL ENVIRONMENT
→City-Wide Connectivity & Accessibility
→District SWOT Analysis
Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
TODAY’S PURPOSE
•Present and Discuss Diagnostic Findings
•Confirm alignment on key take aways and
guiding principles before advancing to
recommendations
BUSINESS ENVIRONMENT
→Sales Tax Analysis
→Hospitality/ Tourism Assessment
ADMINISTRATIVE CAPACITY
→Regulatory Framework
→Organizational Capacity & Stewardship
MARKET ASSESSMENT
→Competition Assessment
→Retail Demand Assessment
1/27/2023 DRAFTItem 2
Attachment A - Streetsense
Diagnostic
Item 2: Staff Report Pg. 11 Packet Pg. 15 of 269
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
A FRAMEWORK FOR SUCCESSFUL RETAIL PLACES
MANAGED
…with leadership
and capacity to
engage merchants
and property
owners and
implement
improvements
SAFE
…but more
importantly
perceived as safe
ACCESSIBLE
…to a customer base
…with little friction
for arrival/departure
regardless of mode
VISIBLE
…by potential
customers either
as they drive,
bike or walk by
CHAMPIONED
…with demonstrated
signs of maintenance
and investment
ANCHORED
…by retail
destination driver(s)
… by culture,
institutional or
entertainment uses
PEDESTRIAN
FRIENDLY
…co-located
businesses that
encourage cross
shopping
…walkable and
with few
disruptions in
continuity
BRAND
RESONANCE
…with clear
branding strategy
and identity
Beloved, "best-in-class" streets share characteristics that correlate to successful economic
development outcomes, including but not limited to community satisfaction, business
profitability, and contribution to the municipal tax base. Based on the over three decades of
research, these characteristics include:
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
THE RETAIL ECOSYSTEM
•Perspectives range among key stakeholders
•Priorities unique from one another
•Highly symbiotic relationship structure
Retail viability deteriorates when a given stakeholder's
priorities and needs are not being met.
TENANT
Confidence in Sales
Rent Commensurate with
Sales
Co-tenancy
Brand Alignment
LANDLORD/
MANAGEMENT
Return on Investment
Tenant Stability
Risk Mitigation
CONSUMER
Sense of Place
Tenants
Events | Community
Safety | Cleanliness
Accessibility | Convenience
Value (Money & Time)
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
THE RETAIL ECOSYSTEM
Where does the public sector play a role in influencing
or directing the actions of key stakeholders?
PUBLIC SECTOR TOOLS
•Regulatory framework influences co-tenancy
•Financial incentives can help mitigate risk
•Funding and coordination of events to build community
•Investments in enhanced safety/cleanliness
•Improvements to access/convenience
•District marketing & branding campaigns
•Investments in public realm to improve sense of place
TENANT
Confidence in Sales
Rent Commensurate with
Sales
Co-tenancy
Brand Alignment
LANDLORD/
MANAGEMENT
Return on Investment
Tenant Stability
Risk Mitigation
CONSUMER
Sense of Place
Tenants
Events | Community
Safety | Cleanliness
Accessibility | Convenience
Value (Money & Time)
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SMALL STORE FOOTPRINTS BUY ONLINE, PICK-UP IN STORE (BOPIS)
GUIDESHOP MODEL MICRO-FULFILLMENT COMPONENTS
•Changing retail footprints
•Changing spending patterns
•Tenants are in the driver's seat
•Implications of hybrid work
GLOBAL AND NATIONAL
TRENDS
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02
STUDY AREAS
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MAP
All 6 districts
The diagnostic focuses on areas within Palo Alto where
this is an existing concentration of retail activity.
STUDY
AREAS
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Using shopping center industry classifications, Palo Alto has
three (3) categories of shopping districts as follows:
REGIONAL/SUPER-REGIONAL CENTERS
•most significant tax base contributors
•face the greatest competition for visitors within the region
•must maintain "best-in-class" status to remain competitive
COMMUNITY-SERVING CENTERS
•moderate tax base impacts
•local promotion and marketing strategies, if any
•tend to benefit from activations that meet
community interests and needs
NEIGHBORHOOD-SERVING
•minimal tax base impacts
•least affected by COVID, typically the most stable
asset class
•local customer base with little need for promotion
DEFINING PALO ALTO'S
"SHOPPING DISTRICTS"
DISTRICT
DESTINATION
DRIVERS
ICSC
CATEGORIZATION RETAIL SF
NO.SALES
TAX
PRODUCING
BUSINESSES
TRADE
AREA
Downtown/
University
Ave
F&B,
Entertainment,
Fashion &
Apparel
Regional
(400k –800k)916,400 432
Primary,
Secondary
Tertiary
Stanford
Shopping
Center
Department
Stores, Fashion &
Apparel
Super Regional Mall
(800+ sf)1,348,000 151
Primary,
Secondary
Tertiary
California
Ave
Specialty Grocer,
F&B, Farmer's
Market, Fitness
Community/
Neighborhood
Center
(125k –400k sf)
202,500 99 Primary,
Secondary
Town &
Country
Village
Grocery,
Pharmacy, F&B
Community Center
(125k –400k sf)171,000 59 Primary,
Secondary
Midtown
Grocery,
Pharmacy, Quick
Service F&B
Neighborhood
Center
(30k –125k sf)
52,000 42 Primary
Charleston
Shopping
Center
Specialty Grocer
Neighborhood
Center
(30k –125k sf)
46,000 10 Primary
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→METHODOLOGY &APPROACH
→COMPETITION ASSESSMENT
→RETAIL DEMAND ASSESSMENT
03
RETAIL MARKET
ASSESSMENT
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Retail market assessment:
INDUSTRY TERMINOLOGY
Given their extraordinary nuance,
ancillary tenants (e.g. financial,
educational, religious, governmental
institutions, etc.) and entertainment
establishments (e.g. arcades, movie
theaters, bowling alleys, escape
rooms, etc.) are considered to be
non-retail uses and are not factored
into the retail demand model or
included in retail demand
calculations.
Neighborhood
goods &
services
(NG&S)
Food &beverage
(F&B)
General
merchandise,
apparel, furniture,
and other
(GAFO)
•Grocery store
•Neighborhood market
•Pharmacy/drug store
•Dry cleaner/laundromat
•Tailor/seamstress
•Nail/hair salon
•Barber shop
•Spa
•Fitness
•Gyms
•Sit-down restaurant
•Full-service restaurant
•Fast-casual restaurant
•Fast food restaurant
•Carry-out restaurant
•Ice cream shop
•Coffee shop
•Café
•Apparel store
•Clothing store
•Electronics store
•Furniture store
•Pet store
•Sports store
•Book store
•Music store
Non Retail Uses
Retail Uses
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COMPETITION
ASSESSMENT
Given the urban-suburban typology of the Palo Alto market,retail competition for the site is measured on two levels –
locally-serving neighborhood centers for convenience-based trips and regionally-serving destination hubs for experience-
based trips.Retail customer behaviors are rooted in convenience,access,and visibility as well as tenant quality
and variety of offerings.These factors are considered when assessing the market influence of each retail competitor.
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Retail market assessment:
REGIONAL RETAIL COMPETITION
TAKEAWAYS
•Downtown retail environments are
highly competitive.
•Two competing downtown
environments within Palo Alto,
University Ave and California Ave,
spreading retail thin.
•Traditional malls are less prevalent
to the west.There are five regional
malls of varying quality closer to San
Jose.Hillsdale Shopping Center is the
only traditional mall to the west.The
top performing mall in the region is
Stanford Shopping Center.
Regionally-serving, experience-based retail
centers are characterized by a dominant mix
of good-based retail, including malls, power
centers, and walkable downtowns and
lifestyle centers. These retail centers attract
customers from a larger regional trade area
and feature a cluster of full-service
restaurants and entertainment.
Source: Streetsense analysis Q4 2022.
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Retail market assessment:
LOCALLY-SERVING RETAIL
COMPETITION
TAKEAWAYS
•Grocery competition is strong throughout the
region.
•Big box retailers are not allowed in Palo Alto
by regulation. However, they are
concentrated along the periphery of Palo
Alto, cannibalizing the retail offering
within the city.
•Target and Costco are particularly prevalent
in the region, with nine and seven stores,
respectively within the examined area.
Neighborhood serving retail centers are character
ized by a dominant mix of Neighborhood Goods
& Services tenants, often grocery-anchored.
These retail centers primarily meet the need for
convenience-based shopping trips, competing on
a geographically smaller scale.
Source: Streetsense analysis Q4 2022.
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Retail market assessment:
PALO ALTO RETAIL DISTRICT STACKUP –ASKING RENTS
Retail rents in the region are high. The average asking rent in Palo Alto is
$63.52 per SF –80% higher than the national average of $27.55 per SF.*
Stanford Shopping Center has the highest average asking rents in Palo Alto.
However, average asking rents within Town and Country Village and
University Ave are comparable, with rents along University Ave reaching up
to $99.00 per SF.
Disparity between average asking rents of the two downtown environments in
Palo Alto, is a reflection of the higher quality environment and regional pull of
University Ave.
Source –REIS, Loopnet, Michael Baker, CoStar 2022
* National average asking rent for malls and other retail environments, not
including strip centers, neighborhood serving centers, and power centers as of
Q4 2022.
TAKEAWAYS
•According to local brokers, there is a perception that asking rents along
University Ave are highly elevated and do not reflect the state of the
retail market, which greatly favors tenants over landlords
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Retail market assessment:
RETAIL VACANCY
Vacancy among the six retail districts totals 243,000 SF, or about 8%
vacancy rate as of year-end 2022.
•Majority of vacant space is concentrated along University Avenue,
accounting for about 88,000 SF.
•California Avenue has the highest vacancy rate among all districts at
15%, accounting for 31,000 SF.
•There is about 57,000 SF currently vacant within Stanford Shopping
Center, which equates to a very low vacancy of 4%, due to the mall's
large size. This vacancy is caused by smaller tenants inside the mall
rather than by the loss of any major anchors.
Source: Loopnet, REIS, Michael Baker
*Q4 2022 Moody's Analytics
TAKEAWAYS
•Retail is being spread thin by a finite consumer base within Palo Alto
•Stanford Shopping Center cannibalizes retail in other districts within Palo Alto,
offering attractive co-tenancy opportunities and retail-appropriate spaces.
Vacancies are exacerbated by University Avenue’s high rents and less desirable
retail spaces, often in need of tenant improvement investments.
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RETAIL DEMAND
ASSESSMENT
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Retail market assessment:
TRADE AREAS
Based on the competitive landscape, natural and
psychological boundaries, travel patterns, and
population trends, Streetsense defined the
following trade areas:
PRIMARY TRADE AREA
Users:Palo Alto residents, employees, students,
overnight guests, and daytime visitors
Frequency:High -at least once or twice per
week
Purpose:Convenience-based shopping and
dining
SECONDARY TRADE AREAS
Users:Nearby residents (Mountain View, Los
Altos, Melo Park, Redwood City)
Frequency:Modest -once or twice every two
weeks
Purpose:Change up from options closer to
home, work, or school
TERTIARY TRADE AREAS
Users:Regional residents (San Mateo, San
Bruno, Burlingame, Sunnyvale, Santa
Clara/Western San Jose, Fremont, Newark)
Frequency: Low -once or twice every month
Purpose:Experience-based shopping and dining
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Retail market assessment:
SHIFTS IN DEMAND POST-COVID
114,826
Total employees working within Palo Alto
69,889
Non-office-based employees working within Palo Alto
44,937
Office-based employees working within Palo Alto
37% of office-based employees are going into an office (San Jose metro area)
In Palo Alto, hybrid work has reduced the demand for retail by over 100,000
SF, roughly equivalent to the amount of retail space at Midtown Shopping
Center and Charleston Shopping Center combined.
Resident -generated
demand
697,275 SF
Resident-generated
demand
697,275 SF
Visitor-generated
demand
147,605 SF
Visitor-generated
demand
147,605 SF
Employee-generated
demand
452,085 SF Employee-generated
demand
340,620 SF
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
PTA Demand - No Remote Work PTA Demand - Adjusted for Work from Home
PTA Retail Demand Hybrid Work Scenario -2022
-111,465
SF of lost
retail
demand
TAKEAWAYS
•Palo Alto's daytime population can no longer support the same level of retail it did
pre-covid,with fewer on shoppers coming from Stanford Research Park and other
office-centric areas to generate foot traffic during the work week
•Shifts in daytime population and the balance between residents and employees
require a right-sizing of retail
Source: Sitewise, 2022; Bureau of Labor Statistics 2022; Kastle Systems 2022.
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Retail market assessment:
DEVELOPMENT PIPELINE
Significant development pipeline in the
surrounding markets.
At full build out, these projects will add
17,700 residential units
15.8 million SF of office/life science space
2,300+ hotel keys
* Map shows multi-family residential developments over 50
units and office/life sciences developments over 25,000 SF
TAKEAWAYS
•Menlo Park, Redwood City, and Mountain
View have robust office/life science pipelines,
growing density and building future daytime
populations.
•Fueling the retail ecosystem -density and
daytime populations drive retail spending,
thereby growing retail demand.
•Retail in districts like California Ave would
benefit from increased density and daytime
populations
Source: Moody's Analytics, 2022.
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Retail market assessment:
RETAIL DEMAND PROJECTIONS
Based on resident, employee, overnight guest, and daytime visitor
spending, local and regional competition, and projected population
growth, the site can support the following:
2,571,970 SF
Total retail demand in 2022
2,627,980 SF
Total retail demand in 2027
2,687,030 SF
Total retail demand in 2032
3,032,900 SF
2,571,970 SF 2,627,980 SF 2,687,030 SF
Supply 2022 Demand 2027 Demand 2032 Demand
Retail Supply and Demand Projections
460,930 SF
oversupply
TAKEAWAYS
•Retail needs to be right-sized --Retail demand will steadily increase
however, without intervention, demand will not reach parity with the existing
retail supply over the next 10 years
•Oversupply > vacancy, indicating that vacancy will continue to rise among
lower quality or poorly positioned space
•Potential interventions to the retail ecosystem –
•Broadening the mix of uses to increase daytime customer base
with office and residential uses
•Supplementing with non-traditional retail uses like entertainment,
civic, and cultural uses to activate the ground plane
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Retail market assessment:
DEMAND BREAKDOWN
By 2032, total retail demand can be broken out into the
three major retail categories :
•Neighborhood goods & services (NG&S) –15% of
total retail demand
•Food & Beverage (F&B) –22%of total retail
demand
•General merchandise, apparel, furniture, and other
(GAFO) –63%of total retail demand
TAKEAWAYS
•General merchandise uses makes-up more than half of
demand, driven by Stanford Shopping Center, which
consumes 80% of that demand, with a remaining 321,730 SF
of general merchandise demand to be distributed among the
other districts
•Neighborhood-serving retail demand is constrained by the
presence of big box retailers, considered ”category killers” in
the region. However, given the population density and high
spending levels, the market may be able to support additional
neighborhood-serving retail on a small scale.
•Healthy demand for food & beverage, both fast casual serving
student and employee populations, as well as full-service
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04
BUSINESS
ENVIRONMENT
→SALES TAX ANALYSIS
→HOSPITALITY/ TOURISM ASSESSMENT
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SALES TAX
ANALYSIS
→NATIONAL AND LOCAL SALES TAX REVENUE TRENDS
→FOCUS AREA SALES TAX REVENUES
→COMPETING CITIES
→KEY TAKEWAYS
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Business environment:
NATIONAL & LOCAL SALES TAX REVENUE TRENDS
The graphic above is representative of sales tax revenues by Fiscal Year for all sales tax producing
businesses in Palo Alto
NATIONAL SALES TAX TRENDS
Small, locally owned businesses were the hardest hit during the COVID-19 Pandemic, particularly
restaurants,retailers and personal service providers.Sales Tax revenues are mostly back to pre-pandemic
(FY 2018-19) numbers by the end of FY 2021-22, but many small,locally owned businesses are not back
to pre-pandemic cash flow and required revenue margins.
Common economic influences / macro conditions forcing increased cost of doing business across tax
generating groups include:
•Inflation and increasing costs of doing business, such as high labor and raw material costs (by
December 2022, the Consumer Price Index for All Urban Customers (CPI-U) in the U.S.
increased by 6.5% for the prior 12 months)
•Supply chain and manufacturing disruptions
•Employment/ labor shortages
•Shift to online shopping
•COVID-19 safety protocols and compliance
•Interest rates rising
PALO ALTO SALES TAX
Total sales tax revenues are bouncing back from the Pandemic. Palo Alto’s total FY 2021-22 sales tax
revenues increased by 20% from the FY 2020-21. However, FY 2021-22 revenues were still 6% below
pre-pandemic sales tax in FY 2018-19.CPI-U for the San Francisco Area increased by 4.9% from the 12
months prior to December 2022. Food prices alone advanced 10.2% for the two months ending December
2022.
Note: The dollar amount listed for sales tax revenue here forward represent the 1% sales tax revenue issued to the City of Palo Alto
Sources: HdL Companies; bls.gov
Even though sales tax appears to be increasing from the Pandemic,
local businesses aren’t back to pre-Pandemic cash flow and revenue margins.
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Business environment:
FOCUS AREA SALES TAX REVENUES BY FISCAL YEAR
Sales tax revenues in the neighborhood centric areas, Charleston and
Midtown, were the least impacted during the Pandemic. Neighborhood focused
areas produce a low amount of sales tax relative to the other shopping areas and
there is a higher volume of essential stores like grocery stores, markets,
pharmacies, etc.Combined, Charleston and Midtown Shopping Centers made up
about 1% of the City's total sales tax revenue in FY 2021-22.
University Ave, which makes up 12% of total sales tax revenue in the City, has
experienced decreasing sales since before the Pandemic.University Ave has been
the slowest to recover from the Pandemic & sales are still not above pre-
Pandemic levels. University Avenue FY 2021-22 sales tax revenues are 25%
below pre-Pandemic FY 2016-17 sales.
California Avenue makes up 2.2% of total sales tax in the City. Sales tax on
California Avenue is 12.8% below pre-Pandemic sales in FY 2018-19, and still 9%
below FY 2016-17.
Town and Country Village experienced a 21% decrease in sales tax in FY 2019-20,
though the shopping area is recovering from the Pandemic. Town and Country
Village sales tax makes up 3% of the total sales tax revenue in Palo Alto for FY
2021-22.
Stanford Shopping Center is the largest and most resilient sales tax producer
of the six focus areas.While Stanford Shopping Center sales decreased during the
Pandemic, FY 2021-22 sales were 25% above pre-Pandemic FY 2016-17 sales tax
revenues. Stanford Shopping Center makes up 25% of total sales tax revenue,
mainly from retail sales.
Source: HdL Companies
$0.00
$1.00
$2.00
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FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
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Sales Tax Revenues for Fiscal Years 2016-17 to 2021-22
Charleston Shopping Center Midtown Shopping Center California Ave
Town and Country Village Downtown Palo Alto Stanford Shopping Center
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Business environment:
NG&S –Neighborhood Goods & Services
NG&S makes up 4% of total sales tax revenue for the six focus districts (2% of total
sales tax for the City of Palo Alto).Most NG&S businesses are not big sales tax
producers (I.e., personal services, grocery stores, gyms). For example, Grocery Store
taxable sales are roughly 25-30% of their total sales.Charleston and Midtown
Shopping Centers show the highest percentage of NG&S relative to the total sales tax
revenue in those shopping districts (40% and 54%, respectively).
F&B –Food & Beverage
F&B makes up 27% of total sales tax revenue for the six focus districts (11.4% of total
sales tax for the City).University Ave produces the highest value of F&B sales tax
revenue, likely due to the higher concentration of restaurants compared to the other
focus areas.
GAFO –General Merchandise, Apparel, Furniture, Other
GAFO makes up 58% of the total sales tax revenue for the six focus districts (24% of
total sales tax for the City).Retail sales produce the largest amount of sales tax
revenue.Stanford Shopping Center and University Avenue combined make up 95% up
GAFO sales tax for the six focus areas ($5.1M and $1.1M, respectively).
NON-RETAIL
Non-retail sales tax revenue in the six focus areas include automotive sales, automotive
rentals and repairs, business services, medical/biotech businesses, and textile and
furnishings.Non-retail makes up 11.4% of total sales tax revenue for the six focus
districts (4.8% of total sales tax for the City).
FOCUS AREA SALES TAX REVENUES BY RETAIL CATEGORY FISCAL YEAR 2021-22
District Number of
Businesses*NG&SF&BGAFONon RetailTotals
Charleston
Shopping Center10$36,161$23,525$30,590-$90,276
Midtown 42$109,320$74,929$6,305$11,397 $201,951
California Ave99$56,322$437,306$38,449$58,149 $590,226
Town and Country
Village59$87,101$328,968$274,874$3,237 $694,180
University Avenue432$147,868$1,640,977$1,118,451$291,371 $3,198,667
Stanford Shopping
Center151$5,980$574,954$5,063,008$934,975 $6,578,917
Totals793$442,752$3,092,536$6,531,677$1,299,129 $11,354,217
*Number of businesses is only representative of those that are sales tax producing. Non sales tax producing
businesses that are not accounted for in this table may include offices, medical centers, certain business and personal
services, and certain fitness centers or gyms.
Ranked in order of lowest to highest sales tax revenue producing for FY 2021-22
Source:HdL Companies
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Business environment:
KEY TAKEAWAYS
Palo Alto is the largest sales tax producer
compared to the competing cities identified here,
largely due to GAFO and Non-Retail sales tax
revenues.
GAFO is dominated by Stanford Shopping
Center's sales tax revenue, which makes up 90%
of total GAFO sales at $6.6 million for FY 2021-
22. Non-retail-sales mostly come from auto and
transportation related businesses (12 of which are
in the top 100 sales tax producing businesses in
the City).
Palo Alto is lacking in NG&S businesses in
comparison to Redwood City,Mountain View and
Menlo Park.
Palo Alto's F&B sales tax revenue is second
behind the City of Mountain View.
COMPETING CITIES: TOTAL SALES TAX REVENUE FISCAL YEAR 2021-22
$27,060,912
$19,778,575
$18,795,098
$11,780,240
$5,390,935
$2,458,455
Source: HdL Companies
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Business environment:
NG&S –Neighborhood Goods & Services
Palo Alto residents are likely shopping for neighborhood goods and services in
competing areas.Palo Alto has the lowest NG&S SDPC, even lower than
Burlingame and Los Altos who bring in less NG&S sales tax revenue compared
to Palo Alto.Menlo Park has the highest SDPC in the NG&S category even
though Redwood City and Mountain View receive a significantly higher amount
of NG&S sales tax revenue.
F&B –Food & Beverage
Palo Alto is doing better than most competing cities in bringing people to the
City for F&B, including Menlo Park, Redwood City, and Los Altos. Burlingame
and Mountain View have slightly higher SDPC for F&B.
GAFO 0 General Merchandise, Apparel, Furniture, Other
Palo Alto has the highest SDPC in the GAFO category, largely due to the
Stanford Shopping Center.
NON-RETAIL
Palo Alto is likely bringing consumers from outside the area to shop for non-
retail sales tax producing goods and services, like auto and transportation
businesses, as well as from the Stanford Research Park.Burlingame has the
highest SDPC in non-retail sales, which likely comes from the auto and
transportation industry (new and used car sales, rentals, repairs, etc.).
COMPETING CITIES: RETAIL SALES DOLLAR PER CAPITA (SDPC) FISCAL YEAR 2021-22
SDPC is a macro approach to identify possible trends within a city or region regarding to spending habits.Average SDPC is derived by multiplying out the 1% total point of sales tax dollars and then dividing
them by the population size of their community.
•Below Average: Suggests resident do some shopping outside of the area; lack of local supply by preferred retailer and restaurant concepts
•Above Average: Suggest consumers from outside the area are attracted to the local retail market; have preferred retailer and restaurant concepts.
Source: HdL Companies
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Business environment:
KEY TAKEAWAYS
Palo Alto’s University and California Avenues are not
recovered and back to pre-Pandemic FY 2016-17 sales tax
revenues.
Most competing downtowns, excluding Mountain View’s
Castro Street, have exceeded their FY 2016-17 sales tax.
Despite the slow recovery, University Ave produces the most
sales tax revenue compared to the competing downtowns
identified here.
California Ave sales tax revenue is more comparable to Los
Altos Downtown in terms of sales tax revenue (Note: While
sales tax may be comparable, there is a clear difference in
terms of ownership and management when comparing
California Avenue to Downtown Los Altos).
COMPETING DOWNTOWNS: SALES TAX REVENUES FISCAL YEAR 2021-22
Source: HdL Companies
California Ave Los Altos
Downtown
Menlo Park
Downtown
Mountain View
Downtown
Redwood City
Downtown
Burlingame
Downtown University Ave
FY 2016-17 $649,364 $646,304 $1,264,170 $1,550,566 $1,948,910 $2,211,606 $4,245,314
FY 2021-22 $590,226 $801,157 $1,378,004 $1,422,879 $2,315,975 $2,724,840 $3,198,667
$0.65 $0.65
$1.26
$1.55
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$4.25
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$1.38 $1.42
$2.32
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Fiscal Year 2016-17 compared to 2021-22
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Business environment:
Total sales tax revenues are bouncing back from the Pandemic, but recovery from the COVID-19 Pandemic is uneven across key tax
generating districts and the local economy is not fully recovered.
•Fiscal year 2021-22 sales tax revenues Midtown and Charleston Shopping Centers, California Avenue, and University Avenue are below FY 2016-17 sales.
•Palo Alto's downtown areas (University Ave and California Ave) have had the slowest recovery following the COVID-19 Pandemic.
•University Ave has been in a decline since pre-Pandemic, for at least the last five years.
•Stanford Shopping Center &Town and Country Village have been able to better maintain sales tax revenue compared to other areas of the city. Both shopping
centers have a central management team, which may contribute to the success of their businesses.
•Shopping Center is a regional attraction that brings consumers in from all throughout the Peninsula;it's the largest sales tax producer in Palo Alto and when
compared to GAFO sales tax in competing cities.
•Palo Alto has the highest sales tax revenue compared to competing cities, largely as a result of GAFO sales (Stanford Shopping Center)and non-retail sales (from
auto & transportation related businesses).
•Neighborhood goods and service (NG&S) businesses appeared to be the least impacted by the Pandemic in terms of sales tax revenue, however NG&S business
types produce the least amount of sales tax revenues.
•The comparative analysis showed that Palo Alto has the lowest sales dollar per capita for NG&S businesses and compared to competing cities.
While sales tax recovery is important, it's not a true reflection of recovery and profitability of small businesses that are still struggling with
cash flow and margins from the Pandemic.
KEY TAKEAWAYS
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HOSPITALITY/
TOURISM
ASSESSMENT
→LODGING
→VISITORS
→OPPORTUNITIES
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Business environment:
HOSPITALITY/TOURISM: LODGING
BARRING RECESSION, FULL RECOVERY BY 2023*
Palo Alto’s lodging industry is recovering at the national pace and is
currently approaching 2019 levels. Palo Alto’s Occupancy Rate is
highest mid-week, slightly lower than either U.S. or California Average.
STABLE BUSINESS TRAVELER BASE
Palo Alto’s largest contributors to occupancy are medical, education and
business travelers who fill approximately 2,200 hotel rooms, including
about 300 via the two new Marriott properties.
RECESSION CONCERNS
Oxford Economics expects the US to enter a recession in the first half of
2023. This is an ominous prospect as travel spending falls by roughly
twice the rate of the economy in a typical recession.
Source: STR
Source: Tourism Economics
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Business environment:
HOSPITALITY/TOURISM: VISITORS
INTERNATIONAL
Lag in recovery from international
travelers will continue to impact Palo
Alto more than most cities.
Of particular note, Chinese visitors had
been the largest source of international
visitors to Palo Alto, and that nation’s
slow recovery lags all other major
inbound traveler sources to California.
BUSINESS
Less business travel as virtual meetings
grow.The transition to virtual meetings, caused
by the pandemic, generally worked well and
contributes to California's (and the U.S.') slower
business travel recovery. Cost savings
to businesses was meaningful, and lower
company carbon footprints was and remains
important to many.
Business travel and the related impact on Palo
Alto’s economy will eventually recover to pre
pandemic levels, but it will likely be different
than in the past, and in ways yet to be confirmed.
DOMESTIC LEISURE
Palo Alto is not a typical, overnight
tourist destination as it lacks
major destination attractions. However, there are
unique local destinations to be celebrate.
Palo Alto’s largest audience sector for
hospitality spending (restaurants, attractions,
shopping) and tax revenues is a combination of
residents and workforce.Its next largest
includes residents and workforces from neighboring
Bay Area communities,such as Mountain View,
Menlo Park, Sunnyvale, Redwood
City,Burlingame and Los Altos.
OPPORTUNITIES
•Incentivize longer business travel or
“Bleisure” travel
•Grow weekend occupancy rates with non-
business travel
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05
ADMINISTRATIVE
ASSESSMENT
→REGULATORY ASSESSMENT
→ORGANIZATIONAL CAPACITY & STEWARDSHIP
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REGULATORY
ASSESSMENT
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Administrative Capacity:
TAKING OUR CUE FROM THE COMPREHENSIVE PLAN
The existing 2030 Comprehensive Plan is the primary tool for
guiding preservation and development of Palo Alto.
There are three sections in the plan which provide economic
development directives...
•Business & Economics –"business friendly and thriving"
•Land Use –Updates to the municipal code that support a
"diversification of land uses", including "retail that caters
to daily needs of residents"; "stimulates housing near
retail"; and allows for the "conversion of non-retail
commercial FAR to residential FAR, where appropriate"
•Transportation –Improve Walkability & Bikability by
"improving connectivity between businesses, parking and
transit stops", including "public art in alleyways" to
encourage walking
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Administrative Capacity:
Municipal codes are often an accumulation of general
controls that were used to solve specific problems in
specific places including:
•Concerns over rising retail rents from use groups (i.e.
office, chain stores, storage facilities, etc.)perceived as
contributing to rent inflation for "more desirable" uses
•Conflicts between residents and industrial or
entertainment uses
•Rules that restrict uses with a low-income or
transient customer base, like laundromats
•Concerns over “bad actors”, like bars and dance clubs
ZONING CODE BASICS
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Administrative Capacity:
ZONING CODE BASICS
GROWTH IN ON-LINE
SHOPPING
Retailers are using stores for local distribution, which
may be restricted as “warehousing & distribution”
TECHNOLOGICAL
ADVANCES
Breweries,specialty food manufacturing and maker
spaces are restricted as “Manufacturing & Processing”
DEMOGRAPHICS AND
LIFESTYLE
Wellness and medical services are restricted as
“Medical Office”
Recent trends in retail and changing work patterns can render some sections of the Zoning
Code outdates, E.G.
Customer Pick-Up/Returns within Store
Urgent Care, Adams Morgan, Washington, DC
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Administrative Capacity:
OVERVIEW OF APPLICABLE ZONING CONTROLS GOVERNING USES
Each overlay delineates separate permitting and use requirements and can make it difficult for
an applicant to determine what rules apply.
DISTRICT BASE DISTRICT OVERLAY 1 OVERLAY 2 OVERLAY 3 OVERLAY 4 OVERLAY 5
CALIFORNIA
AVE
CC –Community
Commercial
Retail
Preservation
R –Retail
Shopping
P –Pedestrian
Shopping
PTOD –Cal Ave
Pedestrian and
Transit Oriented
Cal Ave Parking
Assessment
District
MIDTOWN &
CHARLESTON
SHOPPING
CENTER
CN –Neighborhood
Commercial
Retail
Preservation
GF –Ground
Floor
P –Pedestrian
Shopping
Special Regulations
governing proximity
to Residential
DOWNTOWN
(University Ave)
CD –Downtown
Commercial
Retail
Preservation
GF –Ground
Floor
P –Pedestrian
Shopping
DOWNTOWN
(Lytton)
CD –Downtown
Commercial
Retail
Preservation
P –Pedestrian
Shopping
TOWN &
COUNTRY
VILLAGE
CC –Community
Commercial
Retail
Preservation
STANFORD
SHOPPING
CENTER
CC –Community
Commercial
Retail
Preservation
H
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Administrative Capacity:
ZONING OVERVIEW: CALIFORNIA AVENUE
CrossFit –Restricted due to size. Typical SF 2k
–2,500k sf
Pottery Making –Restricted under Learning
Centers and/or Industrial
Drybar –Restricted under both Salon and Formula Ordinance
Pediatrician –Restricted under Medical Office
C C ( 2 )( R )( P )
Along California Avenue, many Retail and “Retail-Like” uses
face regulatory barriers to entry, including businesses with 10 or
more locations nationwide
CONDITIONAL USE PERMITS REQUIRED FOR:
•Beauty Salons exceeding 1,800 SF
•Nail Salons exceeding 1,800 SF
•Barber Shops exceeding 1,800 SF
•Fitness or Exercise exceeding 1,800 sf
•Learning Centers for Individual or Small Group Settings
•Laundry & Dry Cleaning
•Financial Services (Except Drive-In) on ground floor
•Medical Offices up to 5k only when fronting Cal Ave.
•Commercial Recreation Uses up to 5k only when fronting Cal Ave
•Formula retail (with more than 10 stores nationally)
UNMENTIONED AND THEREFOR NOT ALLOWED
•Light Industrial as accessory uses (i.e., maker spaces)
RESTRICTED GROUND FLOOR USE
•Residential
Fitness –Restricted by Square Footage
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Administrative Capacity:
OPPORTUNITY
Right-size the Retail Preservation Ordinance to focus on
targeted areas of concentrated retail activity
CITY-WIDE RETAIL PRESERVATION ORDINANCE
Source: Kastle Systems Back to Work Barometer
In 2015, zoning protections were passed to restrict ground floor
retail conversions to non-retail uses in the face of significant
competition for space from higher paying office tenants.
2015 MARKET CONDITIONS
•At the time, Palo Alto was experiencing “record high
commercial rental rates” (average $61.44 psf) and “low office
vacancy rates” (2.83%)
2021-2022 MARKET CONDITIONS
•2022 Q3 Silicon Valley Office Vacancy: 17.7% (Source:JLL);
2021 Palo Alto Office vacancy rates 13.64%
(Source:CommercialCafe,2021)
•2021 office average asking rents: $93.75 (Class A
Space);$37.04 (Class B Space)
•Office occupancy rates for San Jose metro are between 27.3% -
41.7%,the lowest of the top ten metro area measured by
Kastle Systems nationwide.
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Administrative Capacity:
ADDITIONAL REGULATIONS AND POLICIES
FORMULA ORDINANCE
Formula Retail Businesses have 10 or more business
locations in the United States that maintain uniformity
across merchandise, décor, scheme, trademark, etc.
OPPORTUNITY
Consider a cap (i.e. Arcata, CA), a focus on restaurants
(i.e. Carmel-by-the-Sea) a restriction by size (i.e.
Coronado)
SANDWICH & A-FRAME SIGNS
The Palo Alto Municipal Code defines dictates that these
signs must be located on private property. This effectively
renders nearly all signs along University Avenue and
California Avenue non-compliant.
OPPORTUNITY
Allow as-of-right merchandising, benches, and signage
within 2' of storefront (i.e. NYC)
ARB ARCHITECTURAL REVIEW
ARB provides aesthetic controls and design approval,
required for the issuance of building permits, to address the
visual impact of projects on adjacent properties and public
streets.
OPPORTUNITY
Clarify role of ARB and provide illustrative or plain
language design guidelines to offer businesses
predictability in the approval process
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ORGANIZATIONAL
CAPACITY &
STEWARDSHIP
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Administrative Capacity:
Arts, Culture &Entertainment
Palo Alto is well served by Arts, Culture &
Entertainment at both the City and District
Level.
Palo Alto's Economic Development service
delivery mechanisms are limited to the City
and the Palo Alto Chamber, which is a city-
wide membership organization.
At this time neither University
Ave/Downtown nor California Avenue have
active stewards to lead marketing, promotion,
event coordination,enhanced sanitation and
security (above and beyond what a city
provides).
ORGANIZATIONAL LANDSCAPE
Palo Alto
Chamber of
Commerce
D
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C
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y
Economic Development
City of
Palo Alto
Palo Alto Art
Center/
Foundation
Palo Alto
Junior
Museum
and Zoo
Lucie Stern
Community
Center/ Palo
Alto's
Children'
Theatre
Albert &
Janet
Schultz
Cultural Arts
Hall
Elizabeth F.
Gamble
Gardens
Downtown
Library
Pacific Art
League of
Palo Alto
Cal Avenue
Merchants
Association
(Defunct)
The
Museum of
American
Heritage
Downtown
Palo Alto
BID
(Suspended)
University Ave
Parking
Committee
(overseen by
Chamber)
(Defunct)
Destination
Palo Alto
(Terminated)
OPPORTUNITY
Reactivate and support improvements to
stewardship along University and Cal Ave
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→PUBLIC AND PRIVATE REALM ELEMENTS
→ACCESSIBILITY & CONNECTIVITY
→FOCUS AREA SWOT ANALYSIS
06
PHYSICAL
ASSESSMENT
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Physical environment:
SIDEWALKSTRANSPORTATION
NETWORKS
WAYFINDING/
SIGNAGE
ALLEYS
GATHERING
SPACES BUILDINGS
PARKING
ELEMENTS INFORMING CHARACTERISTICS OF
BEST-IN-CLASS RETAIL PLACES
MANAGED
…with leadership
and capacity to
engage merchants
and property
owners and
implement
improvements
SAFE
…but more
importantly
perceived as safe
ACCESSIBLE
…to a customer base
…with little friction
for arrival/departure
regardless of mode
VISIBLE
…by potential
customers either
as they drive,
bike or walk by
CHAMPIONED
…with demonstrated
signs of maintenance
and investment
PEDESTRIAN
FRIENDLY
…co-located
businesses that
encourage cross
shopping
…walkable and
with few
disruptions in
continuity
BRAND
RESONANCE
…with clear
branding strategy
and identity
ANCHORED
…by retail
destination driver(s)
… by culture,
institutional or
entertainment uses
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CITY-WIDE
ELEMENTS
→ACCESSIBILITY & CONNECTVITY
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Physical environment:
CITY-WIDE ACCESSIBILITY &CONNECTIVITY: CONCEPTS
Regional and local transportation systems
will be relied upon by consumers within the
trade areas, near and far.
01
Regional Systems should be accompanied by
last-mile options (i.e.shuttles, bicycle,
scooters, delineated infrastructure)
02
Last-mile options are often first (and only)
options for local residents, workers, and
students.
03
Are there any physical barriers to overcome?
Are there accessibility gaps?
Is navigation made easy?
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Physical environment:
CITY-WIDE ACCESSIBILITY &CONNECTIVITY:
ROADWAY & TRANSIT NETWORKS
KEY TAKEAWAYS
•Road Network:
•Robust road network, which provides good regional
and local connectivity -Around 90% of households
own at least one vehicle.
•Network hindered by lack of grade separated
railway crossings, but there are Comprehensive
Plan policies to implement more in the future.
•Transit Network:
•Low to moderate (30 to 57) transit scores for all
districts.
•Line redundancy (mostly regionally serving) for
regional and community centers while neighborhood
centers have no service redundancy.
•Most of Palo Alto, from a geographic standpoint,
does not have access to transit within a ¼ mile
walk, including areas with lower median income
and higher existing and planned density.
•Future shuttles will provide last mile options in
places with limited transit access.
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Physical environment:
CITY-WIDE ACCESSIBILITY & CONNECTIVITY:
PEDESTRIAN &CYCLING NETWORKS
AREAS LACKING
SIGNAGE/ MARKINGS*
* Focuses on key locations
relevant to focus areas
KEY TAKEAWAYS
•Pedestrian Network:
•While overall robust with walk scores from 77 to
97, some areas lack sidewalks of proportionate
scale to adjacent roadway, adequate pedestrian
crossings and median refuges, or (well-maintained)
planted buffer areas.
•Bicycle Network:
•Cycling infrastructure is robust with more planned
connectivity (bike score of 97 to 100) but
navigating by signage/markings is difficult as it is
lacking in key locations.
•Currently no micromobility programs in place.
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FOCUS AREA
SWOT ANALYSIS
→STRENGTHS: characteristics that give an advantage over others
→WEAKNESSES: characteristics that create a disadvantage relative to others
→OPPORTUNITIES: elements that could be exploited to its advantage
→THREATS: elements that could cause trouble if unaddressed
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Physical environment:
DOWNTOWN: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access and
redundancy
Generally good pedestrian
connectivity throughout
Unsupported pedestrian access/desire
lines from Caltrain Station
Biking navigation hindered by lack of
signage/markings
Parking Large amount and underutilized Complicated for all and cost
prohibitive for certain populations
Wayfinding/
Signage Ample signage throughout No cohesive branding or gateway
features
Sidewalks &
Street
Furniture
Adjacent parklets increase
sidewalk space for more use
Poorly maintained and/or mismatch
furniture and bike racks
Gathering
Spaces
Good amount of public and private
gathering spaces with private
spaces being well designed
Expansive public gathering spaces with
little programming or defining
features
Alleys
Mostly around 20 ft wide with
exposure to main streets
Several blank walls
Mostly utilitarian for trash pick-up
with inconsistent lighting sources
Buildings
Good mix of eclectic architecture
Room for more bulk and density
Several existing narrow buildings with
100 ft + depth
Inconsistent treatments of storefront
vacancies
Narrow on side with angled parking
Good mix of eclectic architecture
Opportunities
Threats
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Physical environment:
CALIFORNIA AVE: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access & redundancy
Planned BRT with improvements
Good bicycle connectivity
Multi-jurisdictional coordination
required for BRT/stop improvements
Parking
Large amount and underutilized
Digital wayfinding in new garage
Surface parking and structures take up
large portions of developable blocks
Wayfinding/
Signage
Public art consistently provided
along the street
No cohesive branding or memorable
gateway features
Sidewalks &
Street
Furniture
Wide sidewalks along California
Avenue with well-maintained
landscaping and street furniture
Sidewalks along El Camino Real out of
proportion with street
Gathering
Spaces
Nicely designed/ maintained
station plaza
Closed street and bulb outs provide
additional public gathering space
Closed street looks and feels
temporary
Alleys
Mostly around 20 ft wide with
access to/from main streets
Heavily used rear access
Mostly utilitarian for trash pick-up
with inconsistent lighting sources
Buildings
Building facades consistently align
California Avenue with most
providing uncovered/ transparent
windows
Unremarkable architecture –some
with limited permeability
Large gap of engaging building facades
from station plaza
120 ft ROW
Opportunities
Threats
El Camino Real hostile biking/pedestrian
experience -no median refuge for crossing
20 ft ROW
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Physical environment:
STANFORD SHOPPING CENTER: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access and redundancy
Good pedestrian and bicycle access
to/from the district Limited bicycle connectivity once
inside the district
Parking
Large amount, well maintained with
mature landscaping and high visibility
"Park once and walk" environment
Expansive parking lots and
structures located on the periphery
creating an island effect
Wayfinding/
Signage
Ample amount of
Diverse, yet cohesive, types (including
digital)
N/A
Sidewalks &
Street
Furniture
Wide, well-maintained with generous
landscaping within district
Adequately sized along exterior roads
with planted buffers
Exterior sidewalks between
roadway and parking areas –
passthrough environment
Limited bus shelters/ seating
Gathering
Spaces
Variety of nicely designed and
maintained spaces with plush
landscaping, shade, seating, and
lighting
No gathering spaces along the
periphery
Buildings
High-quality, engaging storefronts
throughout the district, some with
spill-over
Storefronts mostly insular -
Outwardly facing storefronts are
100 -450 feet from street
Opportunities
Threats
Most direct pedestrian Caltrain
connection could use maintenance
Wide, well-maintained with generous
landscaping within district
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Physical environment:
TOWN & COUNTRY VILLAGE: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Robust vehicular access & adequate transit
access
Well-connected,reasonably sized
sidewalks, including delineated crossings,
and bike parking within district
Two separated north/south ped/bike paths
El Camino Real hostile
biking/pedestrian experience -
no median refuge for crossing
No east/west bicycle
connection
Parking
Ample, highly visible parking with
generous, well-maintained landscaping/
shade
"Park once and walk" environment
Expansive parking along
exterior roads detracts from
visibility of the buildings
Wayfinding/
Signage
Ample signage/wayfinding with consistent
branding
Charming signage under arcades
Not every store provides
signage on exterior of building,
limiting awareness
Sidewalks &
Street
Furniture
Comfortable sidewalk dimensions within
the district
Tree-lined sidewalks along exterior roads
Limited bus shelters/ seating
Gathering
Spaces
Utilitarian/passthrough spaces thoughtfully
design to be used as publicly accessible
gathering spaces
Lacks central gathering space
Buildings
Regionally responsive architectural style –
large arcade
Curated vacant storefronts
Subtle scale
Opportunities
Threats
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Physical environment:
MIDTOWN: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good access for all modes
Comfortable sidewalks for
walking/waiting with bus seating
Good surrounding bicycle
connectivity
Lacks transit redundancy and bus
shelters
Several curb cuts along Middlefield
disrupting pedestrian connectivity
Inconsistently placed bicycle parking
Parking
Adequate parking provided with
connected parking across
independent parcels
Good visibility
Weak "Park once and walk"
environment
Minimal parking lot
landscaping/shade
Wayfinding/
Signage Eclectic mix of business signage No gateway signage/ features
Sidewalks &
Street
Furniture
Adequately sized and maintained
sidewalks along Middlefield Road
with space for landscape buffers
Planted areas along Middlefield could
be improved
Buildings set back from the road lack
delineated pedestrian paths through
parking lots
Gathering
Spaces
A few privately owned gathering
spaces seamlessly connect to public
sidewalk
Lacks a central gathering space
No publicly owned/maintained
gathering spaces
Buildings
Eclectic mix of buildings styles,
materials, and colors –authenticity
Most storefronts permeable along
Middlefield Rd.
Unremarkable and
outdated/tired architecture
Inconsistent building wall along
Middlefield Rd.
Opportunities
Threats
Planted areas along Middlefield need
improvement
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Physical environment:
CHARLESTON SHOPPING CENTER: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good vehicular access
Some transit access
Colorado Rd has good bicycle and
pedestrian infrastructure
Limited bus access –no redundancy
Lacks adequate bicycle and pedestrian
infrastructure along Middlefield Rd
Parking
Ample, underutilized parking with
high visibility
"Park once and walk" environment
Majority of lot used for parking/
maneuvering
Lightly landscaped with little shade
Wayfinding/
Signage
Consistent, well-maintained
signage Outdated shopping center signage
Sidewalks &
Street
Furniture
Adequately sized and maintained
sidewalks along Charleston Rd.
Sidewalks along Middlefield out of
scale with size of street with no
vegetated buffer
Narrow pedestrian space along
storefronts in some areas
Gathering
Spaces
Underutilized space repurposed to
gathering space
Arcade along building provides
intimate seating option
Few gathering spaces, overall -Limited
space around coffee shop
Repurposed space feels exposed/ lacks
shade -Places where shade exists not
suited for gathering
Buildings Buildings well maintained with
consistent treatments
Insignificant, outdated architecture
Suburban form/scale not conducive to
longer durations of stay
Opportunities
Threats
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07
GUIDING
PRINCIPLES
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Administrative Capacity:
REINFORCE HIERARCHY OF PLACE
•Stabilize and reinforce Downtown as a destination through improvements and
stewardship
•Embrace California Avenue as a community and neighborhood serving place by
increasing opportunities for new businesses and support for existing businesses
IMPROVE ACCESSIBILITY
•Embrace walking and biking solutions by fixing broken links and reinforcing
walkability to/from all of the City's commercial districts
•Address parking policies and systems that add complexity and cost burden on
low-wage, part-time workers
ADOPT POLICIES THAT REFLECT CHANGING MARKING CONDITIONS
•Ease the regulatory burden for businesses and revise outdated restrictions that
create hurdles to tenancy
•Focus retail and retail-like uses in places where they are market-supported
GUIDING PRINCIPLES
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THANK YOU
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Item No. 3. Page 1 of 3
CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Study Session
Lead Department: City Manager
Meeting Date: February 13, 2023
TITLE
Buena Vista Mobile Home Park Update from the Santa Clara County Housing Authority
RECOMMENDATION
Staff recommends that the Council receive this report and discuss the update by the Santa Clara
County Housing Authority (Housing Authority) regarding the Buena Vista Mobile Home Park
(Park).
EXECUTIVE SUMMARY
The Santa Clara County Housing Authority (Housing Authority) will present on (1) its efforts to
date (including Park upgrades and improvements, ongoing compliance and property
management) and (2) its plan for redeveloping the Park.
The Housing Authority is moving forward with a major redevelopment of the Park. As a first step,
the Housing Authority is soliciting feedback on initial site concepts. Park residents were invited
to attend a meeting in late January to learn about the site concepts and provide feedback on
proposed design, amenities, security, and living spaces. The Housing Authority is presenting the
site concepts to the Palo Alto City Council and the Santa Clara County Board of Supervisors as an
additional way to receive resident feedback in addition to hearing from elected representatives.
The Housing Authority has provided some contextual documents included as attachments to this
report.
BACKGROUND
The Park, located at 3980 El Camino Real, is related to a tri-party agreement between the City of
Palo Alto, Santa Clara County and the Santa Clara County Housing Authority. These three parties
came to a multiyear three-party agreement1 focused on maintaining affordable housing,
enhancing the habitability of the property, avoiding resident displacement, and investing in
1 City of Palo Alto, City Council Staff Report, ID#7125, June 27, 2016, BV MOU SIGNATURE FINAL (HACSC June 14
2016) (cityofpaloalto.org)
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Item No. 3. Page 2 of 3
rehabilitation and improvements. The tri-party agreement includes an improvements timeline
and some expected outcomes. Due to a variety of reasons, further explained in Attachment A,
the improvements and outcomes are behind schedule. The City, as a party to that agreement,
committed to providing $14.5 million from its affordable housing fund to aid in acquisition and
preservation of the site for affordable housing. Since the onset of the agreement, the Housing
Authority has:
•Relocated Park residents as needed (e.g., to new mobile homes),
•Removed trash and abandoned cars,
•Conducted necessary home repairs,
•Installed new utilities,
•Replaced aged sewer and water lines,
•Replaced paving,
•Demolished abandoned coaches (i.e., mobile homes),
•Capped unused utilities for safety,
•Provided spaces for services and an afterschool program, and
•Worked to bring the Park into compliance with various laws.
FISCAL/RESOURCE IMPACT
Funding for site acquisition and Park improvements was approved in June 2016. No additional
funding is requested at this time.
STAKEHOLDER ENGAGEMENT
The Housing Authority held a general information community meeting with Park residents in
November 2022 attended by approximately 50 residents. This was followed by another meeting
in January 2023, attended by approximately 45 residents, to share redevelopment plans and site
concepts and receive resident feedback. Additionally, the Housing Authority has indicated its
intention to meet individually with residents to discuss specific situations and concerns. In terms
of broader outreach, the Housing Authority is sharing plans and site concepts with the City
Council to receive public feedback.
ENVIRONMENTAL REVIEW
The City Council discussion of the Park’s site concepts will not cause physical changes to the
environment and does not constitute a “project” under the California Environmental Quality Act
(CEQA).
ATTACHMENTS
Attachment A: Buena Vista Mobile Home Park Project Summary
Item 3
Item 3 Staff Report
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Item No. 3. Page 3 of 3
Attachment B: Site Concept
Attachment C: Sample GIN
Attachment D: January 2023 Resident Meeting Handout
APPROVED BY:
Ed Shikada, City Manager
Report #: 2212-0560
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Page 1 of 2
Santa Clara County Housing Authority
505 West Julian Street
San José, CA 95110
408.275.8770
scchousingauthority.org
Study Session on the Buena Vista Mobile Home Park
Background Information
Buena Vista Mobile Home Park (Park) is located at 3980 El Camino Real, on 4.5 acres in Palo
Alto, CA. In 2017, the Santa Clara County Housing Authority (Housing Authority), the County of
Santa Clara (County), and the City of Palo Alto (City) came together as partners to purchase the
Buena Vista Mobile Home Park (Park) in order to preserve affordable housing in one of the
most cost-prohibitive and highly-resourced cities in the Bay Area. The Park’s acquisition by the
Housing Authority and its partners secured existing affordable housing stock and prevented the
potential displacement of residents by the previous owner. The property was purchased for
$40,375,000, with $14,500,000 contributed by the City, $14,500,000 from the County and
$12,075,000 from the Housing Authority. The Housing Authority also committed an additional
$19,925,000 towards the renovation and improvement of the Park. After the Park was
acquired, all three parties entered into a joint Regulatory Agreement, which requires that the
Park be improved, and the rents are affordable for each family based on their income. At
present, the Park consists of 77 occupied homes, with variety of income levels, housing types,
family sizes, as well as homeowners and renters. In total, the Park provides housing for
approximately 270 Palo Alto residents.
It is important to note that when the Housing Authority took ownership of the Park in late
2017, the intention was to lease it to an operator/developer who would quickly stabilize the
Park and commence with renovations. Unfortunately, this plan was impacted greatly by the
difficult realities of the Park’s condition, including the state of the infrastructure systems, the
physical condition and age of the units, a significant relocation project within the Park, and the
varying degree of barriers facing each household. While not insurmountable, these difficult
realities have slowed down our efforts significantly while the Housing Authority carefully and
methodically move forward with Park relocations, renovations and site upgrades, while
balancing the needs and desires of residents with financial and legal considerations, code
requirements, and physical constraints. The Housing Authority’s goal continues to be the
preservation and improvement of the Park, and the stability and success of its residents.
Below, please find the investments the Housing Authority has made in time and resources over
the past five years into the Park. The work, efforts, and partnership with the City, County, and
Housing Authority has allow us to get to this point to move forward redevelopment.
Park Upgrades & Improvements
Since 2017, the Housing Authority has been making substantial investments to improve the
infrastructure and quality of life for residents of Buena Vista. Early on, the Housing Authority
undertook a major relocation project, moving several families from a d ilapidated motel on the
property and relocating mobile homes from a portion of land that was retained by the original
owner of the Park. In 2020 and 2021, 18 new RVs and Manufactured Homes were brought into
Item 3
Attachment A - Buena
Vista Mobile Home Park
Project Summary
Item 3: Staff Report Pg. 4 Packet Pg. 78 of 269
Page 2 of 2
Santa Clara County Housing Authority
505 West Julian Street
San José, CA 95110
408.275.8770
scchousingauthority.org
the Park as part of a Replacement Housing Pilot Program, creating better quality housing for 61
Park residents. Other substantial investments include the clearing of trash and abandoned cars,
repairing homes, installing new electrical and gas utilities, replacing aged sewer and water lines,
replacing paving, demolishing abandoned coaches, capping unused utilities for safety, and
providing space for onsite services and the afterschool program.
On-Going Compliance & Property Management
At the same time, the Housing Authority was tasked with bringing the Park and its residents
into compliance with the new regulatory agreement and rental housing laws. The Housing
Authority and its partners, including The John Stewart Company, worked toward s completing
Housing Quality inspections on the units, ensuring the units were up to code and Health &
Safety standards, issuing compliant leases, and certifying household income levels. This work
continues today as residents adjust to the new management and policies of the Park.
Redevelopment Plan
In late 2019, the Housing Authority assumed the role of Developer and owns the Park through
its affiliated non-profit, Poco Way HDC, Inc. In its capacity as Developer, the Housing Authority
is working towards creating a feasible plan to redevelop the Park into quality, affordable
housing. The major goals of this redevelopment plan are to:
1) Ensure there is quality housing for all current Buena Vista residents at the Park
2) Provide new, comparable housing units for all current residents
3) Ensure all current owners retain their homeownership rights
4) Ensure rents at Buena Vista Park are affordable for the current and future residents
based on income levels
5) Increase community and amenity space
6) Remove the gas lines and upgrade all utilities and coaches to electric
Currently, the plan includes maintaining a portion of the Park as a mobile home park and
carving out a portion that will become a rental apartment building, thus serving existing coach
owners, as well as current and future renters. The Housing Authority is in the process of
completing a construction phasing plan which will determine if and how long any temporary
relocation may be necessary. As required under the Uniform Relocation Act, a General
Information Notice (GIN) will be issued to residents in order to inform them of their rights in
relation to any potential relocation that may happen as part of the redevelopment. A draft GIN
is included as an attachment to this report.
Future Engagement Opportunities
Starting in January 2023, the Housing Authority anticipates sharing plans and feasible design
concepts with residents, City and County partners, and local elected officials. Our goal is to
solicit feedback from residents through June 2023 to help determine the future amenities,
design, security and living spaces. The Housing Authority anticipates submitting design plans
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Attachment A - Buena
Vista Mobile Home Park
Project Summary
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Page 3 of 2
Santa Clara County Housing Authority
505 West Julian Street
San José, CA 95110
408.275.8770
scchousingauthority.org
for entitlements with the City of Palo Alto and California Department of Housing and
Community Development in Summer 2023, with construction commencing on the future
mobile home park in late 2023 or early 2024.
More information on the history of the Park and the redevelopment plan will be presented at
the Study Session.
Item 3
Attachment A - Buena
Vista Mobile Home Park
Project Summary
Item 3: Staff Report Pg. 6 Packet Pg. 80 of 269
03 / Site
Concept
Item 3
Attachment B - Site Concept
Item 3: Staff Report Pg. 7 Packet Pg. 81 of 269
When the Housing Authority purchased the Park in 2017, we entered
into a Regulatory Agreement with the City of Palo Alto and the County
of Santa Clara.
The Regulatory Agreement requires that we:
1.Improve the Park,and
2. Apply affordable rents as defined in the Regulatory Agreement
As we start with the redevelopment of the Park, our goal remains
the same:
Provide new housing for all current Park residents
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Attachment B - Site Concept
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Redevelopment Goals
Improve
amenities
and utilities
Preserve
ownership
Housing
remains
affordable
Housing for
all current
residents/
families
#1
#2
#3 #4
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Attachment B - Site Concept
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Site Constraints
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Attachment B - Site Concept
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Site Constraints / Restricciones del Sitio
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Attachment B - Site Concept
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Proposed Layout- Basis
Existing
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Attachment B - Site Concept
Item 3: Staff Report Pg. 12 Packet Pg. 86 of 269
Proposed Layout- Basis
Proposed Apartment building + Upgraded Mobile Home Park
MHP with new unitsNew Apt Bldg
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Attachment B - Site Concept
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Proposed Layout- Basis
Mobile Home Park to be replaced
Potential for
creating
green spaces
Maintains
existing
circulation MHP
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Attachment B - Site Concept
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Proposed Layout- Basis
Proposed location for Apartment building site + Mobile Home Park to be replaced
MHPApt Bldg Site
Neighboring site
has similar
building scale
Motel being demolished
means the least number of
residents impacted
The least disruption to
the park by
underground utilities
construction
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Attachment B - Site Concept
Item 3: Staff Report Pg. 15 Packet Pg. 89 of 269
Redevelopment Timeline
Submit to City and State
for ApprovalMotel Deconstruction
and New Space
Resident Options, Site Tours
and More Design
Engagement
Final Design and
ConstructionToday’s Resident Meeting -
Reconnecting
Summer 2023March 2023February 2023 2023-2024January 2023
Redevelopment Timeline
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Attachment B - Site Concept
Item 3: Staff Report Pg. 16 Packet Pg. 90 of 269
To: ________
From: Santa Clara County Housing Authority and Poco Way HDC
Date: 1/23/2023
Re: General Information Notice
The Santa Clara County Housing Authority (Housing Authority) and its partners, the City of Palo Alto and
the County of Santa Clara, are working to preserve affordable housing at Buena Vista Mobile Home Park
(Park). The Housing Authority, through one of its affiliated non-profits, Poco Way HDC, Inc. (Poco),
purchased the Park in 2017. The Park’s purchase and future development is funded with a combination
of Federal, State and Local sources, which may trigger certain requirements including the Uniform
Relocation Act.
The Housing Authority and Poco are working diligently to maintain long-term, safe, high quality
affordable housing for the residents of Buena Vista. The purpose of this notice is to provide open
communication about what is happening at the park, about your rights as current residents, and about
the process of developing a plan for your household. This is not a notice to vacate the premises and this
is not a notice of relocation eligibility.
What is happening at the Park? The Housing Authority and its partners are focused on implementing a
long-term stabilization plan that will include replacing all mobile homes with new units, constructing
new apartments to replace units that were previously onsite, and replacing and upgrading all Park
infrastructure. There will be significant onsite activity as a result.
What are your rights as Park occupants? Please see the attached information sheet about your rights as
Park occupants as the Park is redeveloped. In addition, we will meet individually with all households to
review your rights in detail as they relate to your personal housing circumstances.
What is the current plan for each household? Each family residing in the Park faces a set of
circumstances that are unique to the particular household depending upon their household
characteristics. We will schedule in person or virtual meetings between your household and your BV
Advisor to discuss and help create an Individual Housing Plan for your household.
If you have any questions at any time, please contact your BV Advisor, Ms. Lorena Serrano. Ms. Serrano
can assist you in English or Spanish, and will be available to meet you by phone, virtual meeting, or in-
person. You can reach her by calling 925-691-2806 or by email at BVAdvisor@arws.com.
Thank you for working with us as we plan to redevelop the Park and improve the quality of life at Buena
Vista.
This General Information Notice was sent via USPS First Class Certified Mail (Return Receipt Requested)
and email to ______________ on ______________.
Signature: ____________________________
Item 3
Attachment C - Sample
GIN
Item 3: Staff Report Pg. 17 Packet Pg. 91 of 269
Page 2 of 3
General Information Notice
Persons who are required to move personal property or who are required to move from a residence
may be eligible to receive relocation advisory services and payments in accordance with federal and
state relocation laws and applicable local ordinances 1. Poco has retained Associated Right of Way
Services, Inc. (AR/WS) to provide you with relocation advisory assistance. We invite you to meet with
your BV Advisor, Ms. Lorena Serrano of AR/WS, who can provide additional information concerning the
project and your rights to receive relocation assistance.
This notice does not require you to move at this time. This is not a notice to vacate. Please contact your
BV Advisor before you make any moving plans. Failure to do so could jeopardize the relocation
assistance that may be available to you.
Please also be advised that you should continue to pay your rent and meet all other obligations as
specified in your lease agreement. If you are required to move temporarily because of Poco’s
redevelopment work, Poco will pay your temporary housing costs, but you will need to continue to pay
your current rent to Poco both prior to any temporary move and during the time that you are in
temporary housing. Failure to continue paying your current rent may be cause for eviction. If you choose
to move or if you are evicted prior to receiving a formal notice of relocation eligibility you will not be
eligible to receive relocation assistance.
Poco’s Housing Assistance Program has been developed in accordance with federal and state laws and
applicable local ordinances. The Housing Assistance Program is briefly described below.
Advisory Assistance . A BV Advisor is available to help Park residents as the Park is being
redeveloped. Your BV Advisor will provide you with information concerning your eligibility for
housing assistance, moving payments, available housing options, the project scheduling, and
how to file a claim for payment.
Moving Expenses . If Poco asks your household to move because of Poco’s redevelopment
work, you will receive assistance with moving and storage costs.
Temporary Housing Costs . If Poco asks you to move temporarily because of Poco’s
redevelopment work, Poco will cover the reasonable cost of your temporary housing. You will
need to continue to pay your rent to Poco while you are living in temporary housing.
Replacement Housing Costs . Poco does not intend to permanently displace any
households. However, if the phasing of onsite replacement housing requires an off-site move for
more than 12 months, then Poco will cover your replacement housing costs for 42 months, and
your BV advisor will help create an Individual Housing Plan for your household to move you into
comparable replacement housing that is within your financial means.
Timing of Payments . Fully documented and reasonable relocation claims will be processed
within 30 days of submission. Poco will pay approved claims, and will advise claimants if any
portion of a claim is not approved.
1The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 USC §4601 et
seq.) (Federal law), California Relocation Assistance Law, (Gov Code §7260 et seq.) (State Law), and local ordinances.
Item 3
Attachment C - Sample
GIN
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Page 3 of 3
Your Right to Appeal . You may appeal if you believe Poco has failed to properly determine
eligibility, or the amount of payments authorized by applicable law. You have the right to be
represented by legal counsel, but legal representation is not required. You may seek judicial
review if you are not satisfied with the final determination.
Poco will administer all services and benefits without regard to race, color, or national origin, in
compliance with Title VI of the 1964 Civil Rights Act. Federal law requires persons seeking federally
funded relocation assistance to certify that they are a United States citizen or national, or an alien
lawfully present in the United States. Alternative assistance may be available for eligible persons who
are not able to document residency status. BV Advisors will work closely with each household to
establish eligibility under federal, state, and applicable local assistance programs.
Again, if you have any questions about this notice or the proposed project, please contact: Lorena
Serrano, BV Advisor with ARWS. You can reach her by calling 925-691-2806 or by email at
BVAdvisor@arws.com. Ms. Serrano can assist you in English or Spanish, and will be available to meet
you by phone, virtual meeting, or in-person.
Item 3
Attachment C - Sample
GIN
Item 3: Staff Report Pg. 19 Packet Pg. 93 of 269
Buena Vista
Design Town Hall 3
Jan. 26, 2023
When the Housing Authority purchased the Park in 2017, we entered into a Regulatory Agreement with
the City of Palo Alto and the County of Santa Clara. The Regulatory Agreement requires that we:
1.Improve the Park, and
2.Adjust to rents as defined in the Regulatory Agreement
As we start with the redevelopment of the Park, our goal remains the same:
Provide new housing for all current Park residents
Improve
amenities
and utilities
Preserve
ownership
Housing
remains
affordable
Housing for
all current
residents/
families
#1
#2 #3 #4
01 Stay at Buena Vista
and purchase a new
coach
02 Stay at Buena Vista, sell
your home, and become
an apartment renter
03 Move from Buena
Vista and request a
voluntary relocation
assistance
$
Information we will provide to help make your decision:
1.Estimated space rent amount, estimated mortgage amount (if any), utility information, estimated
taxes/registration/insurance, unit size and bedroom configuration
2.Estimated apartment rent, utility information, unit size and bedroom configuration
3.Voluntary relocation assistance amount
Options for current Owners
Redevelopment Goals for Buena Vista
Item 3
Attachment D - January
2023 Resident Meeting
Handout
Item 3: Staff Report Pg. 20 Packet Pg. 94 of 269
You have a home at Buena Vista
Project Timeline
Stay Connected
1.Feel free to email us at bvadvisor@arws.com
2.Keep an eye out for emails and for the invitation to our next community meeting
01 Stay at Buena Vista, sell
your home, and become
an apartment renter
02 Move from Buena
Vista and request a
voluntary relocation
assistance
$
Information we will provide to
help make your decision:
1.Estimated apartment rent,
utility information, unit
size and bedroom
configuration
2.Voluntary relocation
assistance amount
Since we are using public funds on the redevelopment of the Park, we must comply with the Uniform
Relocation Assistance and Real Properties Acquisition Policies Act (URA). The URA requires us to
notice you of your relocation rights. What are the noticing requirements under the URA?
●General Information Notice (GIN) Informs you of the project and that you may be displaced by
the project. GINs will be provided tonight and posted for all residents tomorrow.
●Notice of Relocation Eligibility If you are being relocated, this notice informs you of your
eligibility for relocation assistance and payments. To be determined
●90-Day Notice If you are being relocated, this notice informs you of the earliest date by which
you will be required to move. This notice may not be issued unless a comparable replacement
dwelling is available and you are informed of its location. To be determined
Resident Rights
Options for current Renters
Item 3
Attachment D - January
2023 Resident Meeting
Handout
Item 3: Staff Report Pg. 21 Packet Pg. 95 of 269
Buena Vista
3ra Junta de diseño del
Ayuntamiento
26 de enero, 2023
Cuando la Autoridad de Vivienda compró el Parque en 2017, entramos en un Acuerdo Regulatorio con la
Ciudad de Palo Alto y el Condado de Santa Clara. El Acuerdo Regulatorio requiere que:
1.Hagamos mejoras al Parque, y que
2.Nos ajustemos a los alquileres según se definen en el Acuerdo Regulatorio
Al comenzar con la remodelación del Parque, nuestro objetivo sigue siendo el mismo:
Proporcionar nuevas viviendas para todos los residentes actuales del Parque
Mejorar las
instalaciones
y los
servicios
públicos
Preservar la
propiedad
Las viviendas
siguen
siendo
asequibles
Vivienda
para todos
los
residentes
/familias
actuales
#1
#2 #3
#4
01 Quédese en Buena
Vista y compre una
nueva casa
prefabricada
02 Quédese en Buena Vista,
venda su casa, y conviértase
en un inquilino de los
apartamentos
03 Múdese de Buena Vista
y solicite asistencia de
reubicación
voluntaria
$
Información que le proporcionaremos para ayudarle a tomar su decisión:
1.Monto estimado del alquiler del espacio, monto estimado de la hipoteca (si corresponde),
información de servicios públicos, impuestos estimados / registro / seguro, tamaño de la unidad y
configuración de habitaciones
2.Alquiler estimado del apartamento, información de servicios públicos, tamaño de la unidad y
configuración de habitaciones
3.Monto de la ayuda para la reubicación voluntaria
Opciones para propietarios actuales
Objetivos de reurbanización para Buena Vista
Item 3
Attachment D - January
2023 Resident Meeting
Handout
Item 3: Staff Report Pg. 22 Packet Pg. 96 of 269
Usted tiene un hogar en Buena Vista
Cronograma del proyecto
Manténgase conectado
1.No dude en enviarnos un correo electrónico a bvadvisor@arws.com
2.Esté atento a los correos electrónicos y a la invitación a nuestra próxima reunión de la comunidad
01 Quédese en Buena Vista,
venda su casa, y conviértase
en un inquilino de los
apartamentos
02
$
Información que le
proporcionaremos para ayudarle a
tomar su decisión:
1.Alquiler estimado del
apartamento, información de
servicios públicos, tamaño de
la unidad y configuración de
habitaciones
2.Monto de la ayuda para la
reubicación voluntaria
Dado que estamos utilizando fondos públicos en la reurbanización del Parque, debemos cumplir con la
Ley Uniforme de Asistencia de Reubicación y Políticas de Adquisición de Bienes Inmuebles (URA
por sus siglas en inglés). La URA requiere que le notifiquemos sus derechos de reubicación. ¿Cuáles son
los requisitos de notificación bajo la URA?
●Nota de información general (GIN por sus siglas en inglés) Le informa del proyecto y que
puede ser desplazado por el proyecto. Los GIN se proporcionarán esta noche y se publicarán para
todos los residentes mañana.
●Aviso de Elegibilidad Para la Reubicación Si está siendo reubicado, este aviso le informa de su
elegibilidad para asistencia y pagos de reubicación. Por determinarse
●Aviso de 90 días Si está siendo reubicado, este aviso le informa de la fecha más temprana en la
que se le pedirá que se mude. Este aviso no puede emitirse a menos que haya una vivienda de
reemplazo comparable disponible y se le informe de su ubicación. Por determinarse
Derechos de los residentes
Opciones para inquilinos actuales
Múdese de Buena Vista y
solicite asistencia de
reubicación voluntaria
Item 3
Attachment D - January
2023 Resident Meeting
Handout
Item 3: Staff Report Pg. 23 Packet Pg. 97 of 269
1
5
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 13, 2023
TITLE
Approval of Minutes from the January 28, 2023 and January 30, 2023 City Council Meeting
RECOMMENDATION
It is recommended that the minutes be reviewed and approved.
ATTACHMENTS
Attachment A: Draft Minutes January 28, 2023
Attachment B: Draft Minutes January 30, 2023
APPROVED BY:
Lesley Milton
Report #: 2301-0833
Item 4
Item 4 Staff Report
Item 4: Staff Report Pg. 1 Packet Pg. 98 of 269
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 2
Special Meeting
January 28, 2023
The City Council of the City of Palo Alto met on this date at 9:09 AM at Mitchell
Park Community Center and by virtual teleconference.
Present in Person: Burt, Kou Lauing, Lythcott-Hames, Stone, Tanaka Veenker
Participating Remotely: None
Absent: None
2023 Annual Council Retreat Program
1. Welcome from Mayor Kou
2. City Council 2023 Retreat: Discussion and Selection of the 2023 City
Council Priorities
2A. Overview of the 2022 City Council Priorities
PUBLIC COMMENTS
BREAK LUNCH
2B. Selection of the 2023 City Council Priorities
MOTION: Motion by Council Member Lauing, seconded by Council
Member Burt to approve the four approved strategic priorities and have
staff return on February 6th with suggested objectives derived from
Council Comments at the Annual Retreat to achieve the below strategic
priorities:
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Attachment A - Draft
Minutes January 28, 2023
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DRAFT SUMMARY MINUTES
Page 2 of 2
Sp. City Council Meeting
Draft Action Minutes: 01/28/2023
• Economic Recovery and Transition
• Climate Change and the Natural Environment: Protection
and Adaptation
• Housing for Social/ Economic Balance
• Community Health and Safety
MOTION PASSED: 7-0
2C. Discussion and Possible Revision to 2023 Standing committee Topics
MOTION: Motion by Council Member Burt and Seconded by Vice Mayor
Stone to agendize a discussion of prospective referrals to the Policy and
Services, Finance Committee and Boards and Commissions.
MOTION PASSED: 7-0
2D. Retreat Debrief, Take away and Next Steps
Adjournment: The meeting was adjourned at 2:58 PM
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal
Code (PAMC) 2.04.160(a) and (b). Summary minutes (sense) are prepared in
accordance with PAMC Section 2.04.160(c). Beginning in January 2018, in
accordance with Ordinance No. 5423, the City Council found action minutes
and the video/audio recordings of Council proceedings to be the official records
of both Council and committee proceedings. These recordings are available on
the City’s website.
Item 4
Attachment A - Draft
Minutes January 28, 2023
Item 4: Staff Report Pg. 3 Packet Pg. 100 of 269
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 7
Special Meeting
January 30, 2022
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual
teleconference at 5:00 P.M.
Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker
Present Remotely: None
Absent: None
Agenda Changes, Additions and Deletions
Public Comment
Consent Calendar
Council Member Tanaka registered a no vote on Agenda Item Number 2.
Council Members Lythcott-Haims, Tanaka registered a no vote on Agenda Item Number 3.
MOTION: Vice Mayor Stone moved, seconded by Council Member Kou to approve Consent
Agenda Item Numbers 1-3.
1. Approval of Minutes from December 12, 2022, December 19, 2022 and
January 9, 2023
2. Approval of Amendment Number One (1) with Insight Public Sector, C20177991
Extending the Term by Three Years and Compensation by $1,686,615 Utilizing a
Riverside County Agreement for Citywide Microsoft Licensing and Approve a
Contingency in the Amount of $100,000 Annually, for a new Total Not-to-Exceed
Contract Amount to $3,628,317; CEQA Status—not a project
3. SECOND READING: Adoption of Amendments to Palo Alto Municipal Code Chapter
18.09, Accessory and Junior Accessory Dwelling Units due to State Law Changes and
Item 4
Attachment B - Draft
Minutes January 30, 2023
Item 4: Staff Report Pg. 4 Packet Pg. 101 of 269
DRAFT ACTION MINUTES
Page 2 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
Direction from the California Department of Housing and Community Development.
Environmental Assessment: Exempt from the provisions of the California
Environmental Quality Act (CEQA) pursuant to Public Resources Code Section
21080.17 and CEQA Guidelines sections 15061(b)(3), 15301, 15302 and 15305.
Planning and Transportation Commission Recommended Approval of the Ordinance.
MOTION PASSED FOR Item 1: 7-0
MOTION PASSED FOR Item 2: 6-1 Tanaka No
MOTION PASSED FOR Item 3: 5-2 Lythcott-Haims, Tanaka No
City Manager Comments
Action Items
AA1. City Council discussion and direction regarding wage requirements for the contract for
next Janitorial services (Continued from the 1/23/23 Meeting)
A. Review and Provide Direction on Wage and Benefits Requirements for Inclusion in a New
Janitorial Services Request for Proposal (RFP)
B. Responsible Contracting Standards Colleague's Memo (Stone & Burt)
MOTION: Council Member Tanaka moved, to look at this proposal and all contracts for services
during the budget review cycle.
Motion died for lack of a second.
MOTION: Council Member Burt moved, seconded by Vice Mayor Stone adopt Option 3 as stated
in the staff report and to scale the new wage set in proportion to classifications included in Option
1 using the PUC base custodian prevailing wage as a baseline.
MOTION PASSED: 6-1, Tanaka no
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Attachment B - Draft
Minutes January 30, 2023
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DRAFT ACTION MINUTES
Page 3 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
4. Review and Adoption of the Policy and Services Committee Recommendations on the
Revised Council Procedures and Protocols Handbook (previously discussed on
December 19, 2022)
MOTION: Moved by Council Member Tanaka, seconded by Council member Lythcott-Haims to
approve Section 1 with the following amendments:
A. Keep the existing language in 1.1 Organization of City Council & schedule an action item
discussion later this year
B. Revise the redline in 1.2.1 Function of Committees to read: Actions of the committee
shall be advisory recommendations only to the full Council, except as to matters expressly
delegated to the committee by Council.
C. Add this language to Section 1.2 B: Policy and Services Committee: “Other standing
committees may be adopted by the Council.”
D. The Chair may set public speaking time to 3 minutes
E. Proposing to amend to read “ Council members who are not on a committee may
attend the committee meeting but only as an observer; they may not speak or
otherwise participate in the committee meeting”
MOTION FAILED: 4-3, Lauing, Stone, Kou, Burt no
MOTION: Vice Mayor Stone moved, seconded by Council Member Burt to approve Section 1
with the following amendments:
A. Keep the existing language in 1.1 Organization of City Council
B. Revise the redline in 1.2.1 Function of Committees to read: Actions of the committee
shall be advisory recommendations only to the full Council, except as to matters expressly
delegated to the committee by Council.
C. Add this language to Section 1.2 B: Policy and Services Committee: “Other standing
committees may be adopted by the Council.”
D. The Chair may set public speaking time to 3 minutes
E. Proposing to amend to read “ Council members who are not on a committee may
attend the committee meeting but only as an observer; they may not speak or
otherwise participate in the committee meeting”
MOTION PASSED:7-0
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Minutes January 30, 2023
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DRAFT ACTION MINUTES
Page 4 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
MOTION Moved by Mayor Kou , seconded by Council Member Burt to approve Section 2 with
the following amendments:
A. Number of remote appearances to me no more than 3 times per year
B. Modify General Procedures for Appearing Remotely iii “after five tries to reconnect that
the Council Member is considered absent”
C. Council Members nearing the end of their term desiring to submit a Colleagues’ memo
should consider submittal timing and steps needed in order to ensure Council discussion
prior to the end of their term
MOTION: Moved by Council member Lythcott-Haims and seconded by Council member Veenker
to remove Item A: Number of remote appearances to me no more than 3 times per year
MOTION PASSED/FAILED: 6-1, Kou No
MOTION: Moved by Council Member Tanaka, seconded by Council Member Lythcott-Haims to
add to Section 5 to explore the ability to enable video for members of the public.
MOTION PASSED: 4-3, Kou, Lauing, Stone no
FINAL MOTION Moved by Mayor Kou , seconded by Council Member Burt to approve section 2
with the following amendments:
A. Number of remote appearances to me no more than 3 times per year
B. Refer to Policy and Services Committee to explore modifications to General Procedures
for Appearing Remotely iii “after fifteen minutes attempting to reconnect that the Council
Member attending remotely is encouraged to declare him/herself absent for the
remainder of the meeting”.
C. Council Members nearing the end of their term desiring to submit a Colleagues’ memo
should consider submittal timing and steps needed in order to ensure Council discussion
prior to the end of their term. Staff will make best efforts to agendize such memos prior
to the end of the Council term.
D. Add to Section 5 to explore the ability to enable video for members of the public.
MOTION PASSED: 7-0
Item 4
Attachment B - Draft
Minutes January 30, 2023
Item 4: Staff Report Pg. 7 Packet Pg. 104 of 269
DRAFT ACTION MINUTES
Page 5 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
MOTION Moved by Council Member Burt, seconded by Council Member Lythcott-Haims to
approve section 3 with the following amendments:
A. Section 3.4: Council members who intend to request to remove an item, add “strive to”
inform the City Manager’s Office
B. Move the section Council Comments to occur after City Manager Comments
C. Move the section City Manager Comments to occur before the Consent Agenda
MOTION PASSED: 7-0
MOTION Moved by Council Member Burt, seconded by Vice Mayor Stone to approve section 4
with the following amendments:
A. Modify A1: Should Seek permission of the Mayor before making a motion
B. Modify 4.3.15: The Council shall be guided by the speaking times set by the presiding
officer and shall conclude comments at the direction of the Presiding Officer. The
presiding officer shall endeavor to treat all members equitably
MOTION PASSED: 7-0
MOTION Moved by Council Member Burt, seconded by Council Member Veenker to approve
section 5 with the following amendments:
A. Under 5.1C Time Limits: Replace “…are many speakers or items on the agenda” with “…are
many speakers, number of items on the agenda, or items anticipated to be lengthy”
B. Modify 5.1D to Add: “Approximately 5 minutes before cutting off submission for the public
to request to speak on an item, the Mayor will endeavor to announce the pending cut off
time.”
MOTION PASSED: 7-0
Item 4
Attachment B - Draft
Minutes January 30, 2023
Item 4: Staff Report Pg. 8 Packet Pg. 105 of 269
DRAFT ACTION MINUTES
Page 6 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
MOTION Moved by Council Member Burt, seconded by Council Member Lauing to approve
section 6 with the following amendments:
A. Add language to Section 6.1: Council Members are strongly discouraged from asking
questions already addressed in the staff report.
B. Add language at the end of Section 6.1: “If the staff report is incomplete by 5:00 PM
Thursday, that there is an extension to submit Council Questions until 5:00 PM on Friday”.
MOTION PASSED: 7-0
ORIGINAL MOTION Moved by Council Member Veenker seconded by Council Member Lythcott-
Haims to approve Section 7 with the following amendments:
A. Revise Item 7.1 to say “Guideline of 3 or 4 priorities per year”
B. Add Item 7.3 in the Guidelines for Selection of Priorities Section to read: “2-3 specific
objectives within a priority may be selected and generally have a 2-year time limit”
SPLIT MOTION Moved by Council Member Burt seconded by Mayor Kou to incorporate the
following in the motion:
B. Revise Item 2 to say “Priorities should be targeted for up to a 3-year timeframe”
MOTION FAILED: 4-3 Burt, Stone Kou no
FINAL MOTION Moved by Council Member Veenker seconded by Council Member Lythcott-
Haims to approve Section 7 with the following amendments:
A. Revise item 1 to say “Guideline of 3 or 4 priorities per year”
B. Revise item 2 to say “Priorities should be targeted for up to a 3-year timeframe”
C. Add Item 3 in the Guidelines for Selection of Priorities Section to read: “2-3 specific
objectives within a priority may be selected and generally have a 2-year time limit”
D. Revise the statement of shared values and move it to the Introduction Section
a. Update the prologue statement “The Palo Alto City Council universally holds these
values to help guide our decisions and the work we do. These values include that:
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Minutes January 30, 2023
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DRAFT ACTION MINUTES
Page 7 of 7
(Sp.) City Council Meeting
Draft Action Minutes: 01/30/2023
1. We will make decisions that balance revenues and expenses, now and in the
future.
2. We will make decisions that are environmentally sustainable now and in the
future.
3. We will integrate equity into our decisions, considering how decisions affect
people differently based on their identity or circumstances.
4. We will make decisions that create a healthy, safe and welcoming community
for all.
6. We will safeguard public trust through transparent practices and open
communication.
7. We embrace innovation.
MOTION PASSED: 7-0
MOTION Moved by Vice Mayor Stone, seconded by Mayor Kou to approve Section 8 with the
following amendments:
A. Exclude the censure language and refer to Policy & Services Committee for language
modifications
MOTION PASSED: 7-0
Council Member Questions, Comments and Announcements
Adjournment: The meeting was adjourned at 11:36 P.M. in memory of Tom Jordan.
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the City’s
website.
Item 4
Attachment B - Draft
Minutes January 30, 2023
Item 4: Staff Report Pg. 10 Packet Pg. 107 of 269
Item No. 5. Page 1 of 2
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Consent
Lead Department: City Attorney’s Office
Meeting Date: February 13, 2023
TITLE
Adoption of a Resolution Adopting Updated Guidelines for the Submission and Tabulation of
Protests in Connection with Rate Hearings Conducted Pursuant to Article XIIID, Section 6 of the
California Constitution and Repealing and Replacing Resolution 8815; CEQA status—not a
project.
RECOMMENDATION
Staff recommends that Council adopt a resolution adopting updated guidelines for accepting
signed, written protests via email in connection with Utility rate hearings conducted pursuant
to Article XIIID, Section 6 of the California Constitution, repealing and replacing Resolution
8815.
EXECUTIVE SUMMARY
The California Constitution requires local governments to provide notice and a hearing before
increasing or imposing certain types of utility rates, and ratepayers may protest the proposed
rates until the close of the hearing. The relevant constitutional provisions also require protests
to be signed. In 2008 the City Council adopted guidelines for the submission and tabulation of
these protests, which did not permit protests to be emailed. The City Attorney’s office
recommends that Council adopt updated guidelines to permit ratepayers to submit signed
protests via email, as well as by mail and in person.
ANALYSIS
The California Constitution requires local governments to provide a special form of mailed
notice and hold a public hearing before imposing or increasing property related fees, including
many types of utility rates. This constitutional provision, adopted by voters in 1996 as
Proposition 218, also permits ratepayers to submit signed protests with respect to proposed
fee increases. If a majority of ratepayers protest the proposed fee, it may not be adopted.
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California courts have interpreted the term “property related fee” to include fees that have a
direct relationship to property ownership, such as water, wastewater and refuse rates. The
constitutional provisions covering the applicable notice and protest process for these fees are
relatively brief, and do not make it absolutely clear how local agencies should conduct the
hearings and tabulate the signed protests they receive. Consequently, in 2008, the City Council
adopted guidelines (CMR 232:081) governing how the City provides notice and conducts protest
proceedings for property-related rate changes.
The original guidelines required signed protests to be submitted by mail or in person. Section 3
and 4 of the attached revised guidelines permit signed protests to be emailed as well, either on
a document that has been signed and scanned as a PDF file, or via an electronically signed
document. Both options are constitutionally compliant.
The revised guidelines are found in Exhibit A to this report’s Attachment A.
FISCAL/RESOURCE IMPACT
No additional staff resources are required to accept emailed protests, conduct hearings and
tabulate results as required by Article XIIID, Section 6 of the California Constitution.
STAKEHOLDER ENGAGEMENT
While no direct stakeholder engagement was conducted prior to this guideline revision process,
updating the City’s procedures to permit the acceptance of signed protests submitted via email
is likely to facilitate greater public participation in future rate hearings.
ENVIRONMENTAL REVIEW
Adoption of this resolution is not a project under California Environmental Quality Act (CEQA)
as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either
a direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS
Attachment A:Resolution Adopting Updated Guidelines for the Submission and Tabulation of
Protests in Connection With Rate Hearings Conducted Pursuant to Article XIIID,
Section 6 of the California Constitution; Repealing and Replacing Resolution 8815
APPROVED BY:
Molly Stump, City Attorney
Report #: 2211-0377
1 City Council, May 12, 2008 Item #6:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2008/cmr-232-08.pdf
Item 5
Item 5 Staff Report
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*Not Yet Approved*
6056674
RESOLUTION NO. _____
Resolution of The City Council of The City of Palo Alto Adopting
Guidelines For The Submission And Tabulation of Protests In
Connection with Rate Hearings Conducted Pursuant To Article XIIID,
Section 6 of The California Constitution; Repealing And Replacing Resolution 8815
WHEREAS, Article XIII D, Section 6 of the California Constitution requires the City to
consider written protests to proposed increases to certain utility rates; and
WHEREAS, this constitutional provision does not offer specific guidance as to who is
allowed to submit protests, how written protests are to be submitted, or how the City is to tabulate the
protests; and
WHEREAS, in 2008 by its Resolution No. 8815, this Council adopted guidelines to govern
these matters; and
WHEREAS, the City Council desires to update those guidelines to permit protests to be
submitted by email, and to repeal and replace Resolution No. 8815.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The City Council adopts the guidelines for the submission and tabulation of
protests attached as Exhibit “A” and incorporated by reference.
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Attachment A -
Resolution Updated Prop
218 Protest Guidelines
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*Not Yet Approved*
6056674
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SECTION 2. The City Council repeals Resolution No. 8815 and directs that it be replaced by
the Resolution adopted today.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
________________________________ ________________________________
City Clerk Mayor
________________________________ ________________________________
Assistant City Attorney City Manager
________________________________
Director of Utilities
Item 5
Attachment A -
Resolution Updated Prop
218 Protest Guidelines
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*Not Yet Approved*
6056674 1
EXHIBIT A
City of Palo Alto, California
GUIDELINES FOR THE SUBMISSION AND TABULATION OF PROTESTS
Where notice of a public hearing with respect to a utility rate increase has been given by the City
pursuant to Article XIII D, Section 6 of the California Constitution, the following shall apply:
Submission of Protests
1. Any property owner or utility customer may submit a written protest to the City Clerk, either by
delivery to the Office of the City Clerk during its business hours or by submitting the protest to the
City Clerk (or his or her designee) at the public hearing. Protests must be received no later than
the end of the public testimony portion of the public hearing. Protests received after that
deadline, even if postmarked or emailed prior to the deadline, cannot be accepted.
2. Each protest must (i) state that it is a protest against the utility rate increase, (ii) identify the
property owner or utility customer making the protest, (iii) identify the affected property or
service location (by assessor’s parcel number, street address, or utility account number) and (iv)
include the signature of the person making the protest.
3. The notice of the public hearing may designate an email address at which written protests will be
accepted. If an email address is so designated, the City will treat PDF files sent to the email
address as written protests so long as (i) the PDF file contains all information (including a
signature) required by these guidelines to be included in a written protest, and (ii) the PDF file is
received at the email address no later than the date and time indicated on the notice as the
deadline for email submissions.
4. To be valid, signatures on protests sent via email must be provided via either (i) a document that
has been signed and scanned, or (ii) an electronically signed document. Emails that do not
contain a valid signature, for example emails that close with a typed name, will not be accepted.
5. Although oral comments at the public hearing will not qualify as a formal protest unless
accompanied by a written protest, the City Council welcomes input from the community during
the public hearing on the proposed fees.
6. If a parcel of property served by the City has multiple property owners or customers, a maximum
of one written protest will be counted for the parcel and any one written protest submitted in
accordance with these rules will be sufficient to count as a protest for that property.
7. If more than one type of fee (i.e., water, refuse) is proposed for increase on the notice of public
hearing, then a person submitting a protest may indicate whether the protest is submitted with
respect to all fees proposed for increase or only some of the fees proposed for increase.
8. Any person who submits a protest may withdraw it by submitting to the City Clerk a written
request that the protest be withdrawn. The withdrawal of a protest shall contain sufficient
information to identify the affected parcel and the name of record owner or customer who
submitted both the protest and the request that it be withdrawn.
9. A fee protest proceeding is not an election.
Item 5
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Resolution Updated Prop
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*Not Yet Approved*
6056674 2
10. To ensure transparency and accountability in the fee protest tabulation, protests are disclosable
public records once they are received by the City.
11. For purposes of these guidelines, property ownership includes tenancies of real property as is set
forth in Article XIII D, Section 2(g) of the California Constitution.
12. If the person submitting the protest was not the addressee of a mailed notice of public hearing, he
or she should include with the protest an explanation (and written proof if available) of how he or
she is an owner or customer of the parcel of real property for which the protest was submitted.
Tabulation of Protests
1. The City Clerk shall determine the validity of all protests. The City Clerk shall not accept as valid
any protest if the City Clerk determines that any of the following conditions exist:
a. The protest does not identify a property receiving the utility service that is the subject of
the hearing.
b. The protest does not bear the signature of an owner of the parcel identified on the
protest or a customer with respect to the parcel identified on the protest.
c. The protest does not state its opposition to the proposed fees.
d. The protest was not timely received by the City Clerk.
e. A request to withdraw the protest is received prior to the close of the public input
portion of the hearing on the proposed fees.
2. If a protest does not state that it is limited to a specific utility service (i.e. water, sewer), then the
City Clerk shall consider it to be a protest with respect to all services set forth on the notice of
public hearing that are provided to the property.
3. The City Clerk’s decision that a protest is not valid or does not apply to a specific fee shall
constitute a final action of the City and shall not be subject to any internal appeal.
4. A majority protest exists if written protests are timely submitted and not withdrawn by the record
owners of, or customers with respect to, a majority (50% plus one) of the parcels of real property
subject to the proposed fee.
5. At the conclusion of the public hearing, the City Clerk shall complete the tabulation of all protests
timely received and shall report the results of the tabulation to the City Council upon completion.
If review of the protests timely received demonstrates that the number received is manifestly less
than one-half of the parcels served by the City with respect to the fee which is the subject of the
protest, then the Clerk may advise the City Council of the absence of a majority protest without
determining the validity of all protests. If, owing to the number of protests received, the City Clerk
determines that he or she will not be able to complete the tabulation at the Council meeting at
which the hearing was conducted, the City Clerk may announce a time and place at which he or
she will tabulate the protests and may delay his or her announcements of the results to a
subsequent meeting of the City Council. Any tabulation must be done in a location where it can
be observed by the public.
Item 5
Attachment A -
Resolution Updated Prop
218 Protest Guidelines
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Item No. 6. Page 1 of 4
CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Action
Lead Department: Utilities
Meeting Date: February 13, 2023
TITLE
Approval of a 6-year Contract with Manesco Corporation in an Amount Not-to-Exceed $697,326
to Conduct Annual Walking and Mobile Gas Leak Surveys and Annual Resurveys of Existing Gas
Leaks to Begin March 2023 ($633,932) and Authorization of Contract Contingency ($63,393);
CEQA status—exempt under CEQA Guidelines sections 15301(c) and 15308.
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or designee to execute Contract No. C23185369
with Manesco Corporation in the amount of $633,933 to conduct annual walking and
mobile gas leak surveys and annual resurveys of existing gas leaks for a six-year term to
begin March 2023 through February 2028; and
2. Approve a 10% contingency of $63,393 in addition to the contract amount.
BACKGROUND
The City of Palo Alto owns and operates five utilities (water, gas, wastewater collection, electric,
and fiber optic) and delivers gas to over 24,000 residential and commercial meters. The Utilities
Department maintains and operates over 210 miles of distribution main and approximately
17,395 individual gas service pipelines. The distribution main pipeline material is comprised of
polyethylene (PE) pipe, coated steel, polyvinyl chloride (PVC), and acrylonitrile butadiene styrene
(ABS).
Maintenance of the gas distribution system includes the annual walking and mobile gas leak
surveys in accordance with federal regulations established by the United States Department of
Transportation (DOT) in Title 49 of the Code of Federal Regulations (CFR) Part 192.723. Federal
regulations require leaks surveys be performed (1) in business districts at intervals not exceeding
15 months, but at least once each calendar year and (2) outside business districts as frequently
as necessary, but at least once every five calendar years at intervals not exceeding 63 months.
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Palo Alto Utilities completes leak surveys in the City’s business districts annually but takes a more
proactive approach to leak identification outside of business districts by surveying the entire
system every two years instead of the DOT-mandated minimum of every five years. The leak
survey enables the City to improve its infrastructure, increase safety, and reduce the inadvertent
discharge of greenhouse gasses. Gas surveying has been contracted out by the Utilities
Department for over the past 20 years due to internal resource constraints and lack of specialized
leak detection equipment for mobile surveys.
DISCUSSION
The gas distribution system is split into a grid system by northern and southern sections. Each
year the annual gas leak survey is performed using four methods: (1) a mobile survey of all gas
mains, northern and southern sections of the distribution system; (2) a walking survey of each
gas service in either the northern or southern section of the City; (3) a walking survey of each of
the City’s business districts; and (4) a re-check of all grade 3 (or non-hazardous leaks) gas leaks
carried over from the previous year.
Each section is leak surveyed annually, for one complete survey of the City every two years. The
fourteen principal business districts throughout the City (consisting of over 1,870 gas services)
are surveyed annually. Lastly, all non-hazardous leaks that were not repaired the previous year
are carried over to the next year for leak surveying. These carry over leaks consist of
approximately 120 annually. Grade 3 leaks are considered as non-hazardous at the time of
detection and can be reasonably expected to remain non-hazardous.
The City’s gas operations division within the Utilities Department conducts an annual mobile
survey that checks every gas main in the City and walks every service line in each of the fourteen
identified business districts. The mobile survey includes tests of the atmosphere near gas mains;
in gas, electric, telephone, sewer, and water system manholes; at cracks in the pavement and
sidewalks; and at other locations offering an opportunity to find gas leaks.
Natural movement in the ground as well as human impacts can cause small leaks in the system
that would not necessarily be identified until they became larger and more hazardous. The
walking leak survey involves a qualified technician carrying gas detection equipment and walking
every gas service line and evaluating every gas meter in the portion of the City being surveyed.
BID PROCESS DISCUSSION
On July 12, 2022 the City posted a notice inviting formal bids (IFB) for the Gas Leak Survey on the
City’s electronic procurement system, PlanetBids. The bidding period was 15 calendar days. The
City received three bids from qualified contractors on July 27, 2022 as listed in Attachment B,
bid summary.
Summary of Solicitation Process
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Proposal Description/Number RFQ #185369
Proposed Length of Project 6 Years
Number of Bid Packages Downloaded by proposers 17
Number of Websites 1 (PlanetBids)
Total Days to Respond to Proposal 15
Number of Proposals Received 3
Base Bid Price Range $ 487,104 to $3,405,342
Public Link to Solicitation PlanetBids Link
Bids
Company Name Address
Heath Consultants Inc 9030 Monroe Rd, Houston, TX 77061
Manesco Corporation 28301 Industrial Blvd. # Q, Hayward, CA 94545
Southern Cross 192 Technology Parkway Suite 500, Peachtree Corners, GA 30071
Staff reviewed the three bids and deemed one of the bids as nonresponsive, due to the
contractors’ errors in the calculations of all the bid in accordance with the requirements of the
invitation for bids. Those contractors were notified that their bids were nonresponsive, and no
bid protests were received. Manesco Corporation was determined to be the lowest responsible
bidder.
TIMELINE, RESOURCE IMPACT, POLICY IMPLICATIONS
Funding for the 2023 gas leak rechecks survey, which is scheduled to begin in March 2023, as well
as the walking and mobile surveys in 2023, is available in the FY 2023 Gas Operating budget.
Funding for contract years two through six are contingent upon Council appropriation and
approval of funds through the annual budget process.
Authorization of this contract does not represent any change to existing policy.
STAKEHOLDER ENGAGEMENT
The City will provide notification of the Gas Leak Survey via the City website and social media
platforms.
ENVIRONMENTAL REVIEW
Council’s approval of this term agreement for gas leak surveys and gas leak rechecks is
categorically exempt from the California Environmental Quality Act (CEQA) under CEQA
Guidelines 15301(c) (operation, repair, maintenance of existing facilities), and 15308 (actions by
regulatory agencies for protection of the environment), thus no environmental review is
required.
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ATTACHMENTS
Attachment A: Manesco Corporation; Contract #C23185369
Attachment B: Gas Leak Survey Summary Bid Table
APPROVED BY:
Dean Batchelor, Director Utilities
Report #: 2212-0473
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City of Palo Alto General Services Agreement 1 Rev. March 29, 2018
CITY OF PALO ALTO CONTRACT NO. C23185369
GENERAL SERVICES AGREEMENT
THIS AGREEMENT made and entered into on the 23rd day of January, 2023 by and
between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”),
and MANESCO CORPORATION, a California corporation, located at 28301 Industrial
Blvd., #Q, Hayward, CA 94545, Telephone Number: (510)293-8700 (“CONTRACTOR”). In
consideration of their mutual covenants, the parties hereto agree as follows:
1. SERVICES. CONTRACTOR shall provide or furnish the services (the “Services”)
described in the Scope of Services, attached at Exhibit A.
2. EXHIBITS. The following exhibits are attached to and made a part of this
Agreement:
“A” - Scope of Services
“B” - Schedule of Performance
“C” - Schedule of Fees
“D” - Insurance Requirements
“E” - Gas Meter Leak/AOC Survey Tag
“F” - Gas Leak Survey Ground Leak Report
“G” - Gas Leak Survey Notice of Need for Access
“H” - City of Palo Alto E-Grid Map
CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED.
3. TERM.
The term of this Agreement is from March 1, 2023 to February 29, 2028 inclusive,
subject to the provisions of Sections R and W of the General Terms and Conditions.
4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within
the term of this Agreement in a reasonably prompt and timely manner based upon
the circumstances and direction communicated to CONTRACTOR, and if
applicable, in accordance with the schedule set forth in the Schedule of
Performance, attached at Exhibit B. Time is of the essence in this Agreement.
5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees
to accept as not-to-exceed compensation for the full performance of the Services
and reimbursable expenses, if any:
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The total maximum lump sum compensation of dollars ($ );
OR
The sum of dollars ($ ) per hour, not to exceed a total
maximum compensation amount of dollars ($ ); OR
A sum calculated in accordance with the fee schedule set forth at Exhibit
C, not to exceed a total maximum compensation amount of Six Hundred
Thirty-Three Thousand Nine Hundred Thirty-Two dollars and Twenty-Four
cents ($633,932.24).
CONTRACTOR agrees that it can perform the Services for an amount not to exceed
the total maximum compensation set forth above. Any hours worked or services
performed by CONTRACTOR for which payment would result in a total exceeding
the maximum amount of compensation set forth above for performance of the
Services shall be at no cost to CITY.
CITY has set aside the sum of dollars ($ ) for Additional
Services. CONTRACTOR shall provide Additional Services only by
advanced, written authorization from the City Manager or designee.
CONTRACTOR, at the CITY’s request, shall submit a detailed written
proposal including a description of the scope of services, schedule, level of
effort, and CONTRACTOR’s proposed maximum compensation, including
reimbursable expense, for such services. Compensation shall be based on
the hourly rates set forth above or in Exhibit C (whichever is applicable), or
if such rates are not applicable, a negotiated lump sum. CITY shall not
authorize and CONTRACTOR shall not perform any Additional Services for
which payment would exceed the amount set forth above for Additional
Services. Payment for Additional Services is subject to all requirements and
restrictions in this Agreement.
6. COMPENSATION DURING ADDITIONAL TERMS.
CONTRACTOR’S compensation rates for each additional term shall be the
same as the original term; OR
CONTRACTOR’s compensation rates shall be adjusted effective on the
commencement of each Additional Term. The lump sum compensation
amount, hourly rates, or fees, whichever is applicable as set forth in section
5 above, shall be adjusted by a percentage equal to the change in the
Consumer Price Index for Urban Wage Earners and Clerical Workers for the
San Francisco-Oakland- San Jose area, published by the United States
Department of Labor Statistics (CPI) which is published most immediately
preceding the commencement of the applicable Additional Term, which
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shall be compared with the CPI published most immediately preceding the
commencement date of the then expiring term. Notwithstanding the
foregoing, in no event shall CONTRACTOR’s compensation rates be
increased by an amount exceeding five percent of the rates effective
during the immediately preceding term. Any adjustment to
CONTRACTOR’s compensation rates shall be reflected in a written
amendment to this Agreement.
7. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of
this Section 7, a “9204 Public Works Project” means the erection, construction,
alteration, repair, or improvement of any public structure, building, road, or
other public improvement of any kind. Public Contract Code Section 9204
mandates certain claims procedures for Public Works Projects, which are set
forth in “Appendix __ Claims for Public Contract Code Section 9204 Public Works
Projects”.
This project is a 9204 Public Works Project and is required to comply with
the claims procedures set forth in Appendix __, attached hereto and
incorporated herein.
OR
This project is not a 9204 Public Works Project.
8. INVOICING. Send all invoices to CITY, Attention: Project Manager. The Project
Manager is: Diamond Perkins, Dept.: Utilities, Telephone: (650)838-2838. Invoices
shall be submitted in arrears for Services performed. Invoices shall not be
submitted more frequently than monthly. Invoices shall provide a detailed
statement of Services performed during the invoice period and are subject to
verification by CITY. CITY shall pay the undisputed amount of invoices within 30
days of receipt.
GENERAL TERMS AND CONDITIONS
A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of
this Agreement. This Agreement includes and is limited to the terms and
conditions set forth in sections 1 through 8 above, these general terms and
conditions and the attached exhibits.
B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise
and qualifications to complete the services described in Section 1 of this
Agreement, entitled “SERVICES,” and that every individual charged with the
performance of the services under this Agreement has sufficient skill and
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experience and is duly licensed or certified, to the extent such licensing or
certification is required by law, to perform the Services. CITY expressly relies on
CONTRACTOR’s representations regarding its skills, knowledge, and certifications.
CONTRACTOR shall perform all work in accordance with generally accepted
business practices and performance standards of the industry, including all
federal, state, and local operation and safety regulations.
C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the
performance of this Agreement, CONTRACTOR and any person employed by
CONTRACTOR shall at all times be considered an independent CONTRACTOR and
not an agent or employee of CITY. CONTRACTOR shall be responsible for
employing or engaging all persons necessary to complete the work required under
this Agreement.
D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any
Services under this Agreement unless CONTRACTOR obtains prior written consent
of CITY. CONTRACTOR shall be solely responsible for directing the work of
approved subcontractors and for any compensation due to subcontractors.
E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes,
fees, contributions or charges applicable to the conduct of CONTRACTOR’s
business.
F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services
comply with all applicable federal, state and local laws, ordinances, regulations,
and orders.
G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all
requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum
Wage), as it may be amended from time to time. In particular, for any employee
otherwise entitled to the State minimum wage, who performs at least two (2)
hours of work in a calendar week within the geographic boundaries of the City,
CONTRACTOR shall pay such employees no less than the minimum wage set
forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within
the geographic boundaries of the City of Palo Alto. In addition, CONTRACTOR
shall post notices regarding the Palo Alto Minimum Wage Ordinance in
accordance with Palo Alto Municipal Code section 4.62.060.
H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole
expense, repair in kind, or as the City Manager or designee shall direct, any
damage to public or private property that occurs in connection with
CONTRACTOR’s performance of the Services. CITY may decline to approve and
may withhold payment in whole or in part to such extent as may be necessary to
protect CITY from loss because of defective work not remedied or other damage
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to the CITY occurring in connection with CONTRACTOR’s performance of the
Services. CITY shall submit written documentation in support of such withholding
upon CONTRACTOR’s request. When the grounds described above are removed,
payment shall be made for amounts withheld because of them.
I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under
this Agreement shall be performed in a professional and workmanlike manner in
accordance with generally accepted business practices and performance
standards of the industry and the requirements of this Agreement. CONTRACTOR
expressly warrants that all materials, goods and equipment provided by
CONTRACTOR under this Agreement shall be fit for the particular purpose
intended, shall be free from defects, and shall conform to the requirements of this
Agreement. CONTRACTOR agrees to promptly replace or correct any material or
service not in compliance with these warranties, including incomplete, inaccurate,
or defective material or service, at no further cost to CITY. The warranties set
forth in this section shall be in effect for a period of one year from completion of
the Services and shall survive the completion of the Services or termination of this
Agreement.
J. MONITORING OF SERVICES. CITY may monitor the Services performed under this
Agreement to determine whether CONTRACTOR’s work is completed in a
satisfactory manner and complies with the provisions of this Agreement.
K. CITY’S PROPERTY. Any reports, information, data or other material (including
copyright interests) developed, collected, assembled, prepared, or caused to be
prepared under this Agreement will become the property of CITY without
restriction or limitation upon their use and will not be made available to any
individual or organization by CONTRACTOR or its subcontractors, if any, without
the prior written approval of the City Manager.
L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives
to audit, at any reasonable time during the term of this Agreement and for three
(3) years from the date of final payment, CONTRACTOR’s records pertaining to
matters covered by this Agreement. CONTRACTOR agrees to maintain accurate
books and records in accordance with generally accepted accounting principles for
at least three (3) following the terms of this Agreement.
M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial
acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights
under this Agreement.
N. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full
force during the term of this Agreement, the insurance coverage described at
Exhibit D. Insurance must be provided by companies with a Best’s Key Rating of A-
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:VII or higher and which are otherwise acceptable to CITY’s Risk Manager. The Risk
Manager must approve deductibles and self-insured retentions. In addition, all
policies, endorsements, certificates and/or binders are subject to approval by the
Risk Manager as to form and content. CONTRACTOR shall obtain a policy
endorsement naming the City of Palo Alto as an additional insured under any
general liability or automobile policy. CONTRACTOR shall obtain an endorsement
stating that the insurance is primary coverage and will not be canceled or
materially reduced in coverage or limits until after providing 30 days prior written
notice of the cancellation or modification to the Risk Manager. CONTRACTOR shall
provide certificates of such policies or other evidence of coverage satisfactory to
the Risk Manager, together with the required endorsements and evidence of
payment of premiums, to CITY concurrently with the execution of this Agreement
and shall throughout the term of this Agreement provide current certificates
evidencing the required insurance coverages and endorsements to the Risk
Manager. CONTRACTOR shall include all subcontractors as insured under its
policies or shall obtain and provide to CITY separate certificates and endorsements
for each subcontractor that meet all the requirements of this section. The
procuring of such required policies of insurance shall not operate to limit
CONTRACTOR’s liability or obligation to indemnify CITY under this Agreement.
O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation
by the provisions of section N relating to insurance, CONTRACTOR shall indemnify,
defend and hold harmless CITY, its Council members, officers, employees and
agents from and against any and all demands, claims, injuries, losses, or liabilities
of any nature, including death or injury to any person, property damage or any
other loss and including without limitation all damages, penalties, fines and
judgments, associated investigation and administrative expenses and defense
costs, including, but not limited to reasonable attorney’s fees, courts costs and
costs of alternative dispute resolution), arising out of, or resulting in any way from
or in connection with the performance of this Agreement. CONTRACTOR’s
obligations under this Section apply regardless of whether or not a liability is
caused or contributed to by any negligent (passive or active) act or omission of
CITY, except that CONTRACTOR shall not be obligated to indemnify for liability
arising from the sole negligence or willful misconduct of CITY. The acceptance of
the Services by CITY shall not operate as a waiver of the right of indemnification.
The provisions of this Section survive the completion of the Services or
termination of this Agreement.
P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510,
CONTRACTOR certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation,
housing status, marital status, familial status, weight or height of such person.
CONTRACTOR acknowledges that it has read and understands the provisions of
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Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination
Requirements and the penalties for violation thereof, and agrees to meet all
requirements of Section 2.30.510 pertaining to nondiscrimination in employment.
Q. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement,
certifies that it is aware of the provisions of the Labor Code of the State of Califor-
nia which require every employer to be insured against liability for workers'
compensation or to undertake self-insurance in accordance with the provisions of
that Code, and certifies that it will comply with such provisions, as applicable,
before commencing and during the performance of the Services.
R. TERMINATION. The City Manager may terminate this Agreement without cause
by giving ten (10) days’ prior written notice thereof to CONTRACTOR. If
CONTRACTOR fails to perform any of its material obligations under this
Agreement, in addition to all other remedies provided by law, the City Manager
may terminate this Agreement immediately upon written notice of termination.
Upon receipt of such notice of termination, CONTRACTOR shall immediately
discontinue performance. CITY shall pay CONTRACTOR for services satisfactorily
performed up to the effective date of termination. If the termination is for cause,
CITY may deduct from such payment the amount of actual damage, if any,
sustained by CITY due to CONTRACTOR’s failure to perform its material obligations
under this Agreement. Upon termination, CONTRACTOR shall immediately deliver
to the City Manager any and all copies of studies, sketches, drawings,
computations, and other material or products, whether or not completed,
prepared by CONTRACTOR or given to CONTRACTOR, in connection with this
Agreement. Such materials shall become the property of CITY.
S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors
and assigns to all covenants of this Agreement. This Agreement shall not be
assigned or transferred without the prior written consent of CITY. No
amendments, changes or variations of any kind are authorized without the written
consent of CITY.
T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants
that it presently has no interest, and will not acquire any interest, direct or
indirect, financial or otherwise, which would conflict in any manner or degree with
the performance of this Agreement. CONTRACTOR further covenants that, in the
performance of this Agreement, it will not employ any person having such an
interest. CONTRACTOR certifies that no CITY officer, employee, or authorized
representative has any financial interest in the business of CONTRACTOR and that
no person associated with CONTRACTOR has any interest, direct or indirect, which
could conflict with the faithful performance of this Agreement. CONTRACTOR
agrees to advise CITY if any conflict arises.
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U. GOVERNING LAW. This Agreement shall be governed and interpreted by the laws
of the State of California.
V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire
agreement between the parties with respect to the services that may be the
subject of this Agreement. Any variance in the exhibits does not affect the validity
of the Agreement and the Agreement itself controls over any conflicting provisions
in the exhibits. This Agreement supersedes all prior agreements, representations,
statements, negotiations and undertakings whether oral or written.
W. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the
Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement
will terminate without any penalty (a) at the end of any fiscal year in the event
that funds are not appropriated for the following fiscal year, or (b) at any time
within a fiscal year in the event that funds are only appropriated for a portion of
the fiscal year and funds for this Agreement are no longer available. This Section
shall take precedence in the event of a conflict with any other covenant, term,
condition, or provision of this Agreement.
X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE
REQUIREMENTS. CONTRACTOR shall comply with CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Division,
which are incorporated by reference and may be amended from time to time.
CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal
requirements of CITY’s Zero Waste Program. Zero Waste best practices include
first minimizing and reducing waste; second, reusing waste and third, recycling or
composting waste. In particular, CONTRACTOR shall comply with the following
zero waste requirements:
x All printed materials provided by CONTRACTOR to CITY generated from a
personal computer and printer including but not limited to, proposals,
quotes, invoices, reports, and public education materials, shall be double-
sided and printed on a minimum of 30% or greater post-consumer content
paper, unless otherwise approved by CITY’s Project Manager. Any
submitted materials printed by a professional printing company shall be a
minimum of 30% or greater post-consumer material and printed with
vegetable based inks.
x Goods purchased by Contractor on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including, but not
limited to, Extended Producer Responsibility requirements for products
and packaging. A copy of this policy is on file at the Purchasing Division’s
office.
x Reusable/returnable pallets shall be taken back by CONTRACTOR, at no
additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide
documentation from the facility accepting the pallets to verify that pallets
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are not being disposed.
Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties
represent and warrant that they have the legal capacity and authority to do so on
behalf of their respective legal entities.
Z. PREVAILING WAGES
This Project is not subject to prevailing wages. CONTRACTOR is not required to
pay prevailing wages in the performance and implementation of the Project in
accordance with SB 7, if the Agreement is not a public works contract, if
Agreement does not include a public works construction project of more than
$25,000, or the Agreement does not include a public works alteration, demolition,
repair, or maintenance (collectively, ‘improvement’) project of more than
$15,000.
OR
Contractor is required to pay general prevailing wages as defined in Subchapter
3, Title 8 of the California Code of Regulations and Section 16000 et seq. and
Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section
1773 of the Labor Code of the State of California, the City Council has obtained
the general prevailing rate of per diem wages and the general rate for holiday and
overtime work in this locality for each craft, classification, or type of worker
needed to execute the Agreement for this Project from the Director of the
Department of Industrial Relations (“DIR”). Copies of these rates may be obtained
at the Purchasing Division’s office of the City of Palo Alto. Contractor shall provide
a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay
the adopted prevailing wage rates as a minimum. Contractor shall comply with
the provisions of all sections, including, but not limited to, Sections 1775, 1776,
1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages.
AA. DIR REGISTRATION. In regard to any public work construction, alteration,
demolition, repair or maintenance work, CITY will not accept a bid proposal from
or enter into this Agreement with CONTRACTOR without proof that
CONTRACTOR and its listed subcontractors are registered with the California
Department of Industrial Relations (“DIR”) to perform public work, subject to
limited exceptions. City requires CONTRACTOR and its listed subcontractors to
comply with the requirements of SB 854.
CITY provides notice to CONTRACTOR of the requirements of California Labor
Code section 1771.1(a), which reads:
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“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid
proposal, subject to the requirements of Section 4104 of the Public Contract
Code, or engage in the performance of any contract for public work, as defined
in this chapter, unless currently registered and qualified to perform public work
pursuant to Section 1725.5. It is not a violation of this section for an
unregistered contractor to submit a bid that is authorized by Section 7029.1 of
the Business and Professions Code or Section 10164 or 20103.5 of the Public
Contract Code, provided the contractor is registered to perform public work
pursuant to Section 1725.5 at the time the Agreement is awarded.”
CITY gives notice to CONTRACTOR and its listed subcontractors that
CONTRACTOR is required to post all job site notices prescribed by law or
regulation and CONTRACTOR is subject to SB 854-compliance monitoring and
enforcement by DIR.
CITY requires CONTRACTOR and its listed subcontractors to comply with the
requirements of Labor Code section 1776, including:
Keep accurate payroll records, showing the name, address, social security
number, work classification, straight time and overtime hours worked each day
and week, and the actual per diem wages paid to each journeyman, apprentice,
worker, or other employee employed by, respectively, CONTRACTOR and its
listed subcontractors, in connection with the Project.
The payroll records shall be verified as true and correct and shall be certified and
made available for inspection at all reasonable hours at the principal office of
CONTRACTOR and its listed subcontractors, respectively.
At the request of CITY, acting by its project manager, CONTRACTOR and its listed
subcontractors shall make the certified payroll records available for inspection or
furnished upon request to the project manager within ten (10) days of receipt of
CITY’s request.
[For state- and federally-funded projects] CITY requests CONTRACTOR
and its listed subcontractors to submit the certified payroll records to the
project manager at the end of each week during the Project.
If the certified payroll records are not produced to the project manager within
the 10-day period, then CONTRACTOR and its listed subcontractors shall be
subject to a penalty of one hundred dollars ($100.00) per calendar day, or
portion thereof, for each worker, and CITY shall withhold the sum total of
penalties from the progress payment(s) then due and payable to CONTRACTOR.
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Inform the project manager of the location of CONTRACTOR’s and its listed
subcontractors’ payroll records (street address, city and county) at the
commencement of the Project, and also provide notice to the project manager
within five (5) business days of any change of location of those payroll records.
BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the
case of any conflict between the terms of this Agreement and the exhibits hereto
or CONTRACTOR’s proposal (if any), the Agreement shall control. In the case of
any conflict between the exhibits hereto and CONTRACTOR’s proposal, the
exhibits shall control.
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City of Palo Alto General Services Agreement 1 Rev. March 29, 2018
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement on the date first above written.
CITY OF PALO ALTO
____________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
MANESCO CORPORATION
By:__________________________________
Name:_______________________________
Title:________________________________
By:__________________________________
Name:_______________________________
Title:________________________________
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EXHIBIT A
SCOPE OF SERVICES
The CONTRACTOR will furnish all professional services necessary to perform as follows:
Qualifications
1. CONTRACTOR will provide a minimum of two Gas Leak Surveyors (GLSs) to
perform leak surveys. At least one GLS will have a minimum of 5-years’
experience and a second GLS will have a minimum of 2-years’ experience
performing natural gas leak surveys and leak grading on gas distribution or
transmission pipelines using flame ionization (FI) and remote methane leak
detector (RMLD) units. GLSs will be experienced and qualified in use of the
approved leak survey equipment.
2. CONTRACTOR will be required to test and will qualify for the following Industrial
Training Services (ITS) Operator Qualification task list:
ITS
Task # Task Name
Re-Qual.
Frequency
Qual.
Method
Span
of
Control
141 Visual Inspection for Atmospheric
Corrosion 3 Years~ K&S 1:0*
191 Measure Atmospheric Corrosion 3 Years~ K&S 1:0*
1241 Outside Gas Leak Investigation 3 Years~ K&S 1:0*
1261 Walking Gas Leak Survey 3 Years~ K&S 1:0*
1271 Mobile Gas Leak Survey: Flame Ionization 3 Years~ K&S 1:0*
1311 Inspect Pipeline Surface Conditions:
Patrol Right of Way or Easement 3 Years~ K&S 1:0*
~ Re-qualification frequency is once every three years, not to exceed 39 months. City reserves the right to reduce
qualification frequency and require CONTRACTOR to qualify on one or more tasks more frequently.
* City will not approve span of control for CONTRACTOR personnel. Each GLS will be required to test and obtain
qualification prior to performing any task listed above.
3. CONTRACTOR’s personnel will be entered and stored into ITS database. City will
upload a maximum of two technicians in City’s ITS database; any additional
technicians will be uploaded into CONTRACTOR’s ITS database. City will be
granted rights to access CONTRACTOR’s ITS database to review and download
qualifications of CONTRACTOR’s personnel performing task for City for duration
of the agreement.
4. CONTRACTOR will maintain qualification records for personnel who perform
covered tasks for a minimum period of 5 years after the individual is no longer
performing them. The City has the right to review and receive such records upon
request, for up to 5 years after the completion of the agreement.
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Equipment
1. Prior to beginning the leak survey each year, which is typically done in
March/April, CONTRACTOR will submit an annual inventory list of each FI or
RMLD unit that may be used. The list will identify survey usage (mobile or
walking), model and serial number, CONTRACTOR’s identification number, age of
unit, last calibration date, and next calibration due date.
2. CONTRACTOR will supply industry standard equipment for the duration of the
contract. City reserves the right to accept or reject the equipment. Only units
listed on the annual inventory list will be reviewed for approval by the City for
use on this project.
3. CONTRACTOR will immediately remove from service any unit not calibrated in
the appropriate intervals or not approved by City and replace such units with
approved calibrated units.
4. While performing walking surveys, CONTRACTOR will provide each GLS with a
handheld flame ionization unit or RMLD unit.
5. CONTRACTOR will supply gas canisters for FI units and ensure RMLD units are
operational and fully charged.
6. While performing mobile surveys, CONTRACTOR will provide a vehicle, computer
and approved mobile methane leak detector. The vehicle will be equipped with a
multiple intake system of adequate length to obtain samples of air from an area
at least eight (8) feet wide along the path of the survey.
Mobile Survey
1. CONTRACTOR will furnish all labor and equipment necessary to conduct a mobile
gas leak survey of approximately but not limited to Two Hundred Ten (210) miles
of distribution mains, annually, through the City.
2. CONTRACTOR will operate the approved motor vehicle for use in conducting the
survey.
3. CONTRACTOR will conduct the survey at speeds that allow an adequate sample
to be continuously obtained by intakes as the vehicle passes over venting
locations, considering the location of the gas main and any adverse conditions
which may exist. Adverse conditions may include heavy traffic, parked vehicles,
road closures, or other obstacles that may arise on public streets. The GLS will be
accommodate such adverse conditions as the GLS conducts the survey or inform
the Project Manager if additional aid is required.
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4.CONTRACTOR will verify all detected all leak indications by a walking survey and
will classify the leak indications in accordance with Table 1 at the end of this
document.
5.CONTRACTOR will establish the spread and concentration of each leak indication,
and enter the ground leak detection details on a ground leak survey report form
(see Exhibit F).
6.CONTRACTOR will enter information on the report that documents:
a.The date and by whom the survey was conducted
b.Each leak will be identified by:
i.Numerical sequence
ii.Address, grade
iii.Percentage (%) or part per million (PPM) gas reading
c.The location of the leak with diagram of property addresses, street
intersections, valve locations, etc....
7.CONTRACTOR will mark all leaks in yellow paint upon verification.
8.CONTRACTOR will take care to prevent overspray or damage to customer
property.
Walking Survey
1.CONTRACTOR will survey the entire gas distribution system in a two (2) year
cycle. In even numbered years CONTRACTOR will conduct the walking survey on
the north side of the City and in odd numbered years CONTRACTOR will conduct
the walking survey on the south side of the City. Contractor’s 2023 walking gas
leak survey (the first year of this contract) will cover the south side of the City
and will include approximately 9,000 commercial and residential gas services.
Maps of both the north and south sides of the City are included in (see Exhibit
H).
2.In addition to either the north or south side of the City, CONTRACTOR will also
include the following fourteen principal business districts in the annual walking
survey:
Business Districts:
1.East Meadow Circle
2.Golf Course
3.St. Francis
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4.San Antonio / Fabian
5.Charleston Center
6.Midtown
7.Downtown / Town & Country
8.Alma Center
9.El Camino Real
10.Stanford Shopping Center
11.VA Hospital
12.Bayshore
13.Stanford Industrial Park
14.Palo Alto Country Club
3.CONTRACTOR will be able to recognize and react appropriately according to their
Contractor Operator Qualification certification to Abnormal Operating
Conditions (AOCs) that may indicate a dangerous situation or a condition
exceeding design limit.
4.CONTRACTOR will mark all leaks in yellow paint upon verification.
5.CONTRACTOR will take care to prevent overspray or damage to customer
property.
6.The CONTRACTOR will furnish all professional services necessary to perform the
tasks.
7.Provide a minimum of two technicians to be tested and qualified for performing
leak surveys and completing visual inspections to identify abnormal operating
conditions and atmospheric corrosion per the City’s Operator Qualification Plan.
8.Furnish all labor, equipment, material, travel and all necessary incidentals to
conduct a mobile gas leak survey of all distribution mains.
9.Conduct a mobile survey of all gas distribution mains.
10.Check detection instruments for proper operation and calibrate each instrument
with a known gas sample per the manufacturer’s specifications, before using the
instruments to conduct the surveys. Submit proof of calibration each year to the
Utilities Project before beginning the survey and as requested during the
duration of the survey.
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11.Furnish all labor, equipment, material, travel and all necessary incidentals to
conduct a walking gas leak survey of all commercial and residential gas services,
up to and including the meter sets in the fourteen principal business districts and
either the North or South side of the City (in alternating years).
12.Survey each service line from the back of the curb up to and including the meter
set.
13.Use gas detection equipment capable of detecting the concentration of at least
50 PPM of gas in the air at any sampling point. Equipment will analyze for
methane content by using a flame ionization detector. The instrument will be
equipped with a visual display of concentration levels and an audible detection
alarm.
14.Document any Abnormal Operating Conditions (AOCs) found during the survey
on a City-provided form (see Exhibit E), including photographs.
15.Revisit sites as described below on any initially inaccessible service lines and
meter sets.
16.Conduct a recheck of all existing gas leaks identified on the survey maps each
year.
17.Submit all completed forms to the Project Manager no later than 7:30 A.M. on
the next regular business day following the day of the survey.
18.City will provide no carbon required (NCR) forms for all leak documentation (see
Exhibits E & F) and locked gate doorhangers (see Exhibit G).
1.CONTRACTOR will conduct the walking survey every year on alternating sides
(north and south) of the City. Maps of both the north and south sides of the City
are included in (see Exhibit H).
2.CONTRACTOR will survey the entire gas distribution system in a two (2) year
cycle. In even numbered calendar years, CONTRACTOR will conduct the walking
survey on the north side of the City and in odd numbered years, CONTRACTOR
will conduct the walking survey on the south side of the City. The 2023 walking
Walking Survey Details
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gas leak survey (the first year of this contract) will cover the south side of the
City and will include approximately 9,000 commercial and residential gas
services.
3.In addition to either the north or south side of the City, the annual walking
survey also includes the following fourteen principal business districts:
Business Districts:
1.East Meadow Circle
2.Golf Course
3.St. Francis
4.San Antonio / Fabian
5.Charleston Center
6.Midtown
7.Downtown / Town & Country
8.Alma Center
9.El Camino Real
10.Stanford Shopping Center
11.VA Hospital
12.Bayshore
13.Stanford Industrial Park
14.Palo Alto Country Club
4.CONTRACTOR will survey each gas service, up to and including the meter set.
5.CONTRACTOR will conduct the survey at walking speeds sufficiently slow to allow
an adequate sample to be continuously obtained by the instrument intake as it
passes over venting locations. In performing the leak survey of gas services,
CONTRACTOR will survey the area to be covered along the route of the service
line from the back of the curb, up to and including the meter set.
6.CONTRACTOR will address any leaks found during the walking survey as
described below:
a.Upon detection, CONTRACTOR will verify all leak indications and classify
them in accordance with Table 1 at the end of this Exhibit. CONTRACTOR will
establish the spread and concentration of each leak indication and enter the
ground leak detection details on a ground leak survey report form (see
Exhibit F). CONTRACTOR will enter information on the report form to
document:
i.When and by whom the survey was conducted
ii.Each leak will be identified by:
i.Numerical sequence
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ii.Address
iii.Grade
iv.Percentage (%) or part per million (PPM) gas reading
v.Leak location, including a hand drawn map
b.CONTRACTOR will complete meter leak/AOC forms supplied by the City, or a
City approved equivalent (see Exhibit E), to assess compliance with City’s
utility standards. CONTRACTOR may take the sample through the reading lid
and is not required to remove the lids of curb meter boxes.
i.CONTRACTOR will number the meter leak forms consecutively and
separately from the ground leaks. CONTRACTOR will also conduct a
visual inspection of the gas riser, gas meter and the regulator for
defects, corrosion and illegal grounding by other utilities (including,
but not limited to, telephone and cable companies). CONTRACTOR
will complete a City-provided Abnormal Operating Condition (AOC)
Survey form (see Exhibit E) for each location identified as an AOC.
CONTRACTOR will provide a photograph of all reported AOCs.
CONTRACTOR will ensure the address of the location will be visible in
the photograph.
c.CONTRACTOR will describe all ground leaks and meter leaks and note them
on the City-provided Map at the appropriate address. CONTRACTOR’s notes
will include leak number, leak concentration, leak location and Palo Alto
Meter # from the meter, if applicable. CONTRACTOR will verify all addresses
where leaks are found by checking the physical address on the building.
i.In cases where there are inconsistencies between the physical
addresses and the address in the Map, CONTRACTOR will consider the
address on the building correct and note that on the Map and on the
Survey Report Form.
d.CONTRACTOR will mark each service with a red check ( ) on the Map and
enter each service on the City-provided reporting format (spreadsheet or
database) to report the data electronically.
e.Any service not checked will be considered not surveyed and CONTRACTOR
must be re-survey in order to adequately perform the tasks required in this
Agreement (see subsection “f” immediately below for additional information
on completing surveys).
f.A location is considered completed/surveyed by CONTRACTOR only when
CONTRACTOR’s GLS has leak tested the service line and meter set for gas
leaks, and verified, classified and documented the findings.
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g.CONTRACTOR will make every reasonable effort to complete the survey upon
the initial site visit. If the GLS is unable to conduct or complete the survey at
any location because of an inability to access the premise, CONTRACTOR will
take the following actions:
i.Complete the “Special Instructions” section of the Gas Meter
Leak/AOC Survey Tag (see Exhibit E). CONTRACTOR’s GLS will indicate
on the form the reason the survey was not completed at the location
(locked gate, dog, etc.).
ii.A City-provided door hanger (see Exhibit G) will be attached to the
door. The door hanger will advise the resident to contact the City to
schedule a date/time for the survey to be conducted on the
service/meter.
iii.If CONTRACTOR’s GLS is unable to access a location to conduct a
complete survey, CONTRACTOR will make up to two additional
attempts. The Project Manager may assist in setting up appointments
with residents for the two additional attempts. CONTRACTOR’s GLS
will be courteous and on time for appointments.
iv.CONTRACTOR’s GLS will be available at the conclusion of each survey
to work with the City’s meter reading group to access any locations
where the GLS was unable to complete the survey due to
inaccessibility or any other reason.
v.If, after an initial visit and two additional visits as arranged by the
Project Manager the site is still inaccessible, the City will consider the
contractor’s obligation fulfilled and eligible for payment.
Re-survey of Existing 3 Gas Leaks
A list of existing Grade 3 Gas Leaks will be provided to the CONTRACTOR’s GLS each
year.
CONTRACTOR will re-survey leaks and reassess them annually and provide a revised
Leak Survey form (see Exhibit F) to the Project Manager. Leak resurveying is a time
sensitive task and CONTRACTOR will observe department implemented timelines.
As of December 2021 there were 115 existing gas leaks (Grade 3) identified in the gas
distribution system. Known leaks are located throughout the City and are identified on
the Maps with a red colored asterisk (*). The specific locations of existing leaks will be
provided upon award of the contract.
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Work Hours
CONTRACTOR will not conduct overtime, weekend or holiday work, unless receiving
prior approval by City. The workday is M-TH 7:30 AM and 4:00 PM.
1.CONTRACTOR’s GLS will immediately report all leaks of a hazardous nature
(Grade 1) to Utility Dispatch at (650) 329-2579, to have the leak recorded in the
dispatch log and to dispatch a Utility Field Services Representative to the
location. The GLS will remain on site until Utility staff arrives. All houseline leaks
discovered are considered grade 1 and CONTRACTOR will call them into
dispatch. The GLS will wait on scene until a Field Service Representative or
other City representative arrives and will communicate findings.
2.CONTRACTOR will deliver completed Survey Report forms, Gas Meter Leak / AOC
Survey forms, and Maps to the City no later than 7:30 A.M. on the next regular
workday following the survey, unless other arrangements are specifically
identified by the City.
CONTRACTOR’s employees who perform operating, maintenance, or emergency
response functions on natural gas pipelines are subject to the provisions of Title 49 CFR
Part 199, “Drug and Alcohol Testing”, including the requirements for drug testing,
record keeping, education, and training. CONTRACTOR will ensure that its affected
employees are given drug testing in accordance with the regulations.
CONTRACTOR will submit a copy of its “Drug and Alcohol Testing Policy” before
performing any work under this Agreement.
Final Report
CONTRACTOR will prepare a final report, which provides documentation of the entire
survey and the results of such survey. One (1) hard copy of the report submitted to the
City within thirty (30) days of the survey completion date. CONTRACTOR will provide an
electronic copy of the report if available.
See next page for Table 1 – Identification of Leak Grades
General Reporting Requirements
Drug Testing Requirements
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Table 1
Grading and Identification of Gas Leaks
Grade Definition Priority of Leak Repair Examples
3 Non-Hazardous –
Leaks that are non-
hazardous at the
time of detection
and can
reasonably be
expected to
remain non-
hazardous.
Leaks will be scheduled for re-
evaluation during the next scheduled
leakage survey or within 15 calendar
months of detection, whichever
occurs first, until the leak is re-graded
or no longer results in a reading.
Grade 3 leaks may include, but are not limited to:
1. A leak that naturally vents to the atmosphere.
2. Any indication of gas < 4% gas-in-air (80% Low
Explosive Level LEL) in small gas associated
substructures such as valve boxes.
3.A leak with minimal migration.
4.Any indication of gas <1% gas-in-air (20% LEL) in a
confined space.
2 Intermediate -
Leaks that are not
hazardous at the
time of detection,
justify scheduled
repair based on
probable future
hazard.
Leaks should be repaired within one
year but no later than 15 months from
the date reported. In determining the
repair priority, criteria such as the
following should be considered:
1.Amount of and migration of gas.
2.Proximity of gas to buildings and
subsurface structures.
3. Extent of pavement.
4. Any leak, which in the judgment of
company personnel at the scene, is of
sufficient magnitude to justify
schedule repair
Grade 2 leaks may include, but are not limited to:
1.Any leak requiring action prior to any adverse
changes in venting conditions.
2.Any leak that would likely migrate into or under
buildings.
3.Any indication of gas > 2% gas-in-air (40% LEL)
under a sidewalk in a wall-to-wall paved area that is
not a Grade 1 leak.
4.Any indication of gas > 5% gas-in-air (100% LEL)
under a street in a wall-to-wall paved area.
5.Any indication of gas < 4% gas-in-air (80% LEL) in
small substructures associated with gas facilities that
would likely migrate creating a probable future
hazard.
6.Any indication of gas between 1% and 4% gas-in-
air (20% - 80% LEL) in a confined space.
1 Hazardous - Leaks
that pose an
immediate hazard
to persons or
property and
requires
continuous action
until conditions
are no longer
hazardous.
Prompt remedial action must be
undertaken for leaks classified as
hazardous. Prompt remedial action
may include, but not be limited to the
following:
1. Implementation of the CPAU
Emergency Operating Plan.
2.Evacuation of buildings.
3.Blocking off/barricading an area.
4.Rerouting traffic.
5.Eliminating ignition sources.
6.Venting the area and/or buildings.
7.Stopping the flow of gas by closing
valves or other means.
8.Notifying Fire, Police and/or other
emergency responders.
Grade 1 leaks may include, but are not limited to:
1.Any gas leak that can be seen, heard, or felt.
2.Any leak which, in the judgment of company
personnel at the scene, is considered as an immediate
hazard.
3.Escaping gas that has ignited.
4.Any indication of gas that has migrated into or
under a building.
5.Any indication of gas at the outside wall or where
gas would likely migrate to an outside wall due to
surface conditions or cover and/or subsurface
structures or a building.
6.Any indication of gas > 4% gas-in-air (80% LEL) in a
confined space.
7.Any indication of gas > 4% gas-in-air (80% LEL) in
small substructures not associated with gas facilities
where gas would likely migrate to the outside wall of
a building.
8.All leaks inside a building(s)
9. All leaks inside enclosures containing electrical
equipment.
10. All houseline leaks
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONTRACTOR shall perform the Services according to the following schedule, with
clarifications by the Project Manager where needed:
1. Re-survey of all existing grade 3 leaks to be completed before their annual review
date (between April 6th and May 15th of each year).
2. Walking Survey to be completed by December of each year, start date to be
determined each year usually around June, dependent on the completion of the
resurveying leak survey.
3. Mobile Survey to be performed during October/November each year.
4. The complete gas survey to be completed by December 31 of each year.
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EXHIBIT C
SCHEDULE OF FEES
CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of
compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses,
shall not exceed the amounts set forth in Sections 5 and 6 of the Agreement. Any services provided or
hours worked for which payment would result in a total exceeding the maximum amount of compensation
set forth herein shall be at no cost to CITY.
DETAILED RATE SCHEDULE
Year 1 (2023)
Description Cost Qty. Total
Walking Gas Survey $ 6.15
9,000 $ 55,350.00
Mobile Gas Survey $ 34,944.00 1 $ 34,944.00
Gas Resurvey $ 26.00 120 $ 3,120.00
Grand Total $ 93,414.00
Year 2 (2024)
Description Cost Qty. Total
Walking Gas Survey $ 6.39
9,000 $ 57,510.00
Mobile Gas Survey $ 36,341.75 1 $ 36,341.75
Gas Resurvey $ 27.04 120 $ 3,244.80
Grand Total $ 97,096.55
Year 3 (2025)
Description Cost Qty. Total
Walking Gas Survey $ 6.70
9,000 $ 60,300.00
Mobile Gas Survey $ 38,158.83 1 $ 38,158.83
Gas Resurvey $ 28.49 120 $ 3,418.80
Grand Total $ 101,877.63
Year 4 (2026)
Description Cost Qty. Total
Walking Gas Survey $ 7.03
9,000 $ 63,270.00
Mobile Gas Survey $ 40,066.77 1 $ 40,066.77
Gas Resurvey $ 29.91 120 $ 3,589.20
Grand Total $ 106,925.97
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Year 5 (2027)
Description Cost Qty. Total
Walking Gas Survey $ 7.45
9,000 $ 67,050.00
Mobile Gas Survey $ 42,470.77 1 $ 42,470.77
Gas Resurvey $ 31.70 120 $ 3,804.00
Grand Total $ 113,324.77
Year 6 (2028)
Description Cost Qty. Total
Walking Gas Survey $ 7.97
9,000 $ 71,730.00
Mobile Gas Survey $ 45,443.72 1 $ 45,443.72
Gas Resurvey $ 34.33 120 $ 4,119.60
Grand Total $ 121,293.32
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EXHIBIT D
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM
OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE
SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR
HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF
CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED,
BELOW:
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
NO
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT
ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND
EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE
INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND
ITS SUBCONTRACTORS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS
ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE
IN COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE
FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED
COVERAGE.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO
“ADDITIONAL INSUREDS”
Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 30 Packet Pg. 143 of 269
City of Palo Alto General Services Agreement 15 Rev. March 29, 2018
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE
POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED
AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS,
SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY
REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING
COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN
NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-
PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT
LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CANCELLATION.
NOTICES SHALL BE MAILED TO:
PURCHASING AND
CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303
Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 31 Packet Pg. 144 of 269
*$60(7(5/($.$2&6859(<7$*
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Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 32 Packet Pg. 145 of 269
2017
Map
2022 Date/Time
Weather:
Test
Equipment:FI CG Soap Other
Walking Mobile
Performed by:
Leak #Grade Reading Location
Recheck Log
Date Grade Reading Technician Initials
Technician Signature:
City of Palo Alto Gas Leak Survey
Ground Leak Report
Emergency Dispatch: 650-329-2579
Work Order #
(;+,%,7)
Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 33 Packet Pg. 146 of 269
Gas Leak Survey
Notice of Need for Access
Gas Leak Survey
Notice of Need for Access
Gas Leak Survey
Notice of Need for Access
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IMPORTANT NOTICE IMPORTANT NOTICE
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(XXX) XXX-XXXX
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Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 34 Packet Pg. 147 of 269
SealePark
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Item 6
Attachment A - Manesco
Corporation, Contract
#C23185369
Item 6: Staff Report Pg. 35 Packet Pg. 148 of 269
CPAU GAS LEAK SURVEY BID TABLE
3%3.75%3.75%3.75%3.75%3.75%
Bid Schedule A: Walking Gas (Methane) Leak Survey
Cost Per
Service
Surveyed Year
1
Cost Per
Service
Surveyed
Year 2
Cost Per Service
Surveyed Year
3
Cost Per Service
Surveyed Year
4
Cost Per
Service
Surveyed
Year 5
Cost Per
Service
Surveyed
Year 6
Bid Schedule A
Total - Years 1
through 6
Cost Per Service
Surveyed Year 1
Cost Per Service
Surveyed Year
2
Cost Per
Service
Surveyed
Year 3
Cost Per Service
Surveyed Year
4
Cost Per Service
Surveyed Year
5
Cost Per
Service
Surveyed
Year 6
Bid Schedule A
Total - Years 1
through 6
Cost Per Service
Surveyed Year 1
Cost Per
Service
Surveyed
Year 2
Cost Per
Service
Surveyed
Year 3
Cost Per
Service
Surveyed
Year 4
Cost Per
Service
Surveyed
Year 5
Cost Per
Service
Surveyed
Year 6
Bid Schedule A
Total - Years 1
through 6
Walking Gas Leak Survey. All labor, equipment,
material, travel and all necessary incidentals to
conduct an annual walking gas leak survey of
approximately 9,000 residential & commercial gas
services, up to and including the meter set including
appropriate documentation and repeat visits when
neccesary. The walking gas leak survey also consists of
other gas distribution system facilities that may not be
surveyed via mobile and the survey of 14 business
districts including appropriate documentation.
55,350.00$ 57,510.00$ 60,300.00$ 63,270.00$ 67,050.00$ 71,730.00$ $ 375,210.00 362,970.00$ 396,090.00$ 432,720.00$ 468,540.00$ 518,580.00$ 568,710.00$ $ 2,747,610.00 123.17$ 127.79$ 132.58$ 137.55$ 142.70$ 148.05$ $ 349,091.20
Bid Schedule B: Mobile Gas (Methane) Leak Survey
Mobile Survey
W/ Business
Districts
Year 1
Mobile Survey
W/ Business
Districts
Year 2
Mobile Survey
W/ Business
Districts
Year 3
Mobile Survey
W/ Business
Districts
Year 4
Mobile Survey
W/ Business
Districts
Year 5
Mobile Survey
W/ Business
Districts
Year 6
Bid Schedule B
Total- Years 1
through 6
Mobile Survey
W/ Business
Districts
Year 1
Mobile Survey
W/ Business
Districts
Year 2
Mobile Survey
W/ Business
Districts
Year 3
Mobile Survey
W/ Business
Districts
Year 4
Mobile Survey
W/ Business
Districts
Year 5
Mobile Survey
W/ Business
Districts
Year 6
Bid Schedule B
Total- Years 1
through 6
Mobile Survey
W/ Business
Districts
Year 1
Mobile Survey
W/ Business
Districts
Year 2
Mobile Survey
W/ Business
Districts
Year 3
Mobile Survey
W/ Business
Districts
Year 4
Mobile
Survey W/
Business
Districts
Year 5
Mobile
Survey W/
Business
Districts
Year 6
Bid Schedule B
Total- Years 1
through 6
Mobile Gas Leak Survey. All labor, equipment,
material, travel and all necessary incidentals to
conduct a mobile gas leak survey of the City's gas
distribution system mains including appropriate
documentation.
34,944.00$ 36,341.75$ 38,158.83$ 40,066.77$ 42,470.77$ 45,443.72$ $ 237,425.84 31,460.10$ 34,326.60$ 37,501.80$ 41,027.70$ 44,940.00$ 49,291.20$ $ 238,547.40 123.17$ 127.79$ 132.58$ 137.55$ 142.70$ 148.05$ $ 97,420.80
Bid Schedule C: Gas Leak Resurvey - Citywide.
Cost Per
Service
Resurveyed
Year 1
Cost Per
Service
Resurveyed
Year 2
Cost Per Service
Resurveyed
Year 3
Cost Per Service
Resurveyed
Year 4
Cost Per
Service
Resurveyed
Year 5
Cost Per
Service
Resurveyed
Year 6
Bid Schedule C
Total - Years 1
through 6
Cost Per Service
Resurveyed Year
1
Cost Per Service
Resurveyed
Year 2
Cost Per
Service
Resurveyed
Year 3
Cost Per Service
Resurveyed
Year 4
Cost Per Service
Resurveyed
Year 5
Cost Per
Service
Resurveyed
Year 6
Bid Schedule C
Total - Years 1
through 6
Cost Per Service
Resurveyed Year
1
Cost Per
Service
Resurveyed
Year 2
Cost Per
Service
Resurveyed
Year 3
Cost Per
Service
Resurveyed
Year 4
Cost Per
Service
Resurveyed
Year 5
Cost Per
Service
Resurveyed
Year 6
Bid Schedule C
Total - Years 1
through 6
All labor, equipment, material, travel and all necessary
incidentals to resurvey approximately 120 existing gas
leaks, up to and including the meter set including
appropriate documentation.
3,120.00$ 3,244.80$ 3,418.80$ 3,589.20$ 3,804.00$ 4,119.60$ $ 21,296.40 15,729.60$ 17,163.60$ 18,752.40$ 20,514.00$ 22,470.00$ 24,645.60$ $ 119,275.20 123.17$ 127.79$ 132.58$ 137.55$ 142.70$ 148.05$ $40,592.00
Total 93,414.00$ 97,096.55$ 101,877.63$ 106,925.97$ 113,324.77$ 121,293.32$ $ 633,932.24 409,538.36$ 446,861.95$ 488,210.14$ 534,074.33$ 585,010.38$ 641,647.42$ $ 3,405,342.58 73,902.00$ 76,674.00$ 79,548.00$ 82,530.00$ 85,620.00$ 88,830.00$ $ 487,104.00
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total 6 Years Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total 6 Years Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total 6 Years
HEATH CONSULTANTS INC.MANESCO CORPORATION SOUTHERN CROSS
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Attachment B - Gas Leak Survey Bid Summary
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: February 13, 2023
TITLE
Approval of a Purchase Order with Interstate Truck Center in an Amount Not to Exceed
$297,244 for the Purchase of Two 2023 International CV Chipper Body Trucks, Utilizing a
Cooperative Purchase Agreement, Funded by Capital Improvement Program Project VR-23000
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to
execute a purchase order with Interstate Truck Center LLC dba Valley Peterbilt in the amount of
$270,244 and an approximate 10% contingency in the amount of $27,000 for potential price
increases, for a total not to exceed amount of $297,244 for the purchase of two (2) 2023
International CV515 trucks with chipper bodies, utilizing a cooperative purchase agreement via
Sourcewell, a cooperative purchasing agency serving government and not-for-profit
organizations.
BACKGROUND
The Vehicle and Equipment Use, Maintenance, and Replacement Policy section 4-1 provides for
the on-going replacement of City fleet vehicles and equipment. Replacements are scheduled
using guidelines based on age, mileage accumulation, and obsolescence. Policy 4-1 prescribes a
replacement interval for trucks with service bodies of ten years or 100,000 miles. The
replacement of the two (2) chipper body trucks recommended in this report was programmed
in the FY 2023 Scheduled Vehicle and Equipment Replacement Capital Improvement Program
project (VR-23000).
ANALYSIS
Urban Forestry operates a total of four Ford F-550 trucks with chipper bodies. Two of these
trucks, both 2001 Ford F-550s, are now scheduled for replacement. Vehicle 3520 has 71,218
miles, with lifetime maintenance and operation costs exceeding $146,000, of which $60,189 (41
percent) has been incurred in the last 5 years. Approximately 60 percent of the total downtime
for this vehicle has occurred in the last 5 years. Vehicle 3521 had similar mileage and
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maintenance and operation costs but was totaled in an accident in March 2022. These trucks do
not have hour meters that would indicate additional engine wear while they are in use but not
traveling. These are specialty vehicles used by the department primarily for towing brush
chippers and transporting wood chips and large pieces of wood. Other daily functions include
towing a tree planting trailer, towing a spray rig, and towing arrow boards for traffic control
purposes. The chipper trucks are also relied upon frequently to respond to emergency calls
after hours, weekends, and on holidays in response to downed trees or limbs on the public
right-of-way, structures, and electrical power lines.
Procurement Process
Palo Alto Municipal Code section 2.30.360 (j) allows the use of cooperative purchasing
agreements in lieu of conducting a competitive solicitation. Navistar, Inc. dba International
Truck was awarded a contract by Sourcewell, a cooperative purchasing agency serving
governmental, higher education, K-12 education, not-for-profit, tribal government, and other
public agencies. Sourcewell conducted a Request for Proposals under which Navistar, Inc. dba
International Truck was an awarded vendor (Sourcewell Contract) through which Interstate
Truck Center LLC dba Valley Peterbilt is an authorized dealer.
To participate under the cooperative agreement, a Request for Quotation was sent to
Sourcewell, and staff received a quote from Interstate Truck Center LLC dba Valley Peterbilt on
January 17, 2023 (Attachment A).
If this request is not approved, these replacements would have to be worked into a future
year’s replacement schedule, and staff would have to request a new specification and quote for
a later model chassis and return to Council for approval. Delaying the replacement of these
vehicles would lead to increased maintenance costs and downtime, and result in a higher
replacement cost.
The purchase order version provided in Attachment B (Purchase Order 45230001561) has been
reduced for printing purposes and does not include all exhibits. The full contract with all
exhibits can be found here.
1 https://www.cityofpaloalto.org/files/assets/public/public-works/fleet/contractpo/po-4523000156-final-po-
packet.pdf
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FISCAL/RESOURCE IMPACT
As approved in the FY 2023 Adopted Capital Budget, funding is available in the FY 2023
Scheduled Vehicle and Equipment Replacement capital project (VR-23000) for the purchase of
two 2022 International CV515 trucks with chipper bodies recommended in this report.
STAKEHOLDER ENGAGEMENT
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for
approval. FRC approved the replacement of these two vehicles through the FY 2023 Adopted
Capital Budget and review of the scheduled five-year vehicle replacement plan.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the purchase of fleet
vehicles is a continuing administrative or maintenance activity. CEQA Guidelines section
15378(b)(2).
ATTACHMENTS
Attachment A: Quote from Interstate Truck Center LLC dba Valley Peterbilt
Attachment B: Excerpt from Purchase Order #4523000156
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
Report #: 2301-0806
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Item 7
Attachment A - Quote
from Interstate Truck
Center LLC dba Valley
Peterbilt
Item 7: Staff Report Pg. 4 Packet Pg. 153 of 269
This City of Palo Alto (City) Purchase Order agreement (PO) with Valley
Peterbilt dba Interstate Truck Center LLC is made pursuant and subject
to Sourcewell Contract #060920-NVS for the procurement of the
equipment detailed in this PO.
This PO is governed by California law without regard to conflict of law
principles. The venue for any dispute under this PO is Santa Clara
County, California.
This PO hereby attaches and incorporates the following contract
documents into this PO by reference as though fully set forth herein:
1.Sourcewell Contract No. 060920-NVS
2.Interstate Truck LLC Pricing Sheet for Sourcewell Contract No.
060920-NVS
3.Interstate Truck Center LLC Quote (including pricing and
specifications)
4.City of Palo Alto Purchase Order Terms and Conditions for
Goods
0010 Chipper Truck w Intl chassis 114,260 USD 1.00 114,260.00
Purchase two (2) new 2023 Chipper Trucks with International Chassis
and associated fees. First truck with fees is on line items 10, 20, and
30. Second truck with fees is on line items 40, 50, and 60.
Delivery: 12 months upon receipt of PO
Vendor Address
INTERSTATE TRUCK CENTER LLC
VALLEY PETERBILT
2110 S SINCLAIR AVE
STOCKTON CA 95215
Tel: 209-656-7584
Bill To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Ship To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Item Material/Description Quantity UM Net Price Net Amount
______________________________________
Interim Chief Procurement Officer
THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE
SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.
DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on
all documents. Complete packing lists must accompany each shipment.
INVOICE - A separate invoice is required for each order. Send to address indicated above.
City of Palo Alto
Purchasing and Contract Administration
P.O.Box 10250
Palo Alto CA 94303
Tel:(650)329-2271 Fax:(650)329-2468
Purchase Order
P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING
PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER
PO Number 4523000156
Date 10/31/2022
Vendor No.107843
Payment Terms Payment Due 30 days
FOB Point F.O.B Destination
Ship via Vendor to ship best method
Required Date 11/01/2023
Buyer/Phone Sergio Vazquez / 650-329-2485
Email Sergio.Vazquez@cityofpaloalto.org
DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER
ARRANGEMENTS ARE INDICATED HEREIN
Page 1 of 3
Item 7
Attachment B - Excerpt
from Purchase Order
#4523000156
Item 7: Staff Report Pg. 5 Packet Pg. 154 of 269
TOTAL: $270,243.45 = (114,260 chassis+body + 10,300
surchg+transp +freight+flooring + 125 DMV + 10.50 tire fee +
10,426.23 sales tax (9.125%)) x 2
new unit 3528 (replaces 3520) PWO-Trees
new unit 3527 (replaces 3521) PWO-Trees
contact person: Danitra Bahlman 650-496-5920
0020 Tire Fee 11 USD 1.00 10.50
**Vendor to handle the DMV registration
FLEET MANAGER: Danitra Bahlman 650-496-5920
Danitra.Bahlman@cityofpaloalto.org
SEND INVOICE TO: EQUIPMENT MANAGEMENT
0030 DMV fees 125 USD 1.00 125.00
0040 sup surchg, transp, freight 10,300 USD 1.00 10,300.00
0050 Chipper Truck w Intl chassis 114,260 USD 1.00 114,260.00
Vendor Address
INTERSTATE TRUCK CENTER LLC
VALLEY PETERBILT
2110 S SINCLAIR AVE
STOCKTON CA 95215
Tel: 209-656-7584
Bill To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Ship To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Item Material/Description Quantity UM Net Price Net Amount
______________________________________
Interim Chief Procurement Officer
THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE
SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.
DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on
all documents. Complete packing lists must accompany each shipment.
INVOICE - A separate invoice is required for each order. Send to address indicated above.
City of Palo Alto
Purchasing and Contract Administration
P.O.Box 10250
Palo Alto CA 94303
Tel:(650)329-2271 Fax:(650)329-2468
Purchase Order
P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING
PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER
PO Number 4523000156
Date 10/31/2022
Vendor No.107843
Payment Terms Payment Due 30 days
FOB Point F.O.B Destination
Ship via Vendor to ship best method
Required Date 11/01/2023
Buyer/Phone Sergio Vazquez / 650-329-2485
Email Sergio.Vazquez@cityofpaloalto.org
DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER
ARRANGEMENTS ARE INDICATED HEREIN
Page 2 of 3
Item 7
Attachment B - Excerpt
from Purchase Order
#4523000156
Item 7: Staff Report Pg. 6 Packet Pg. 155 of 269
0060 Tire Fee 11 USD 1.00 10.50
0070 DMV fees 125 USD 1.00 125.00
0080 sup surchg, transp, freight 10,300 USD 1.00 10,300.00
-------------------------
Sub-Total 249,391.00
Sales Tax 20,852.46
*** ORDERING VIA EMAIL ***
**** PRICE HAS BEEN QUOTED ****
Vendor Address
INTERSTATE TRUCK CENTER LLC
VALLEY PETERBILT
2110 S SINCLAIR AVE
STOCKTON CA 95215
Tel: 209-656-7584
Bill To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Ship To:
Equipment Management Division
City of Palo Alto
3201 East Bayshore Road
Palo Alto CA 94303
Item Material/Description Quantity UM Net Price Net Amount
______________________________________
Interim Chief Procurement Officer
Total 270,243.46
THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE
SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order.
DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on
all documents. Complete packing lists must accompany each shipment.
INVOICE - A separate invoice is required for each order. Send to address indicated above.
City of Palo Alto
Purchasing and Contract Administration
P.O.Box 10250
Palo Alto CA 94303
Tel:(650)329-2271 Fax:(650)329-2468
Purchase Order
P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING
PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER
PO Number 4523000156
Date 10/31/2022
Vendor No.107843
Payment Terms Payment Due 30 days
FOB Point F.O.B Destination
Ship via Vendor to ship best method
Required Date 11/01/2023
Buyer/Phone Sergio Vazquez / 650-329-2485
Email Sergio.Vazquez@cityofpaloalto.org
DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER
ARRANGEMENTS ARE INDICATED HEREIN
Page 3 of 3
Item 7
Attachment B - Excerpt
from Purchase Order
#4523000156
Item 7: Staff Report Pg. 7 Packet Pg. 156 of 269
CITY OF PALO ALTO
GDS Rev. 06/22/2016
TERMS AND CONDITIONS OF PURCHASE
PAGE 1 OF 3
ACCEPTANCE/AGREEMENT: City of Palo Alto (City) reserves the right to reject any and all
quotations, to waive any informalities, and, unless otherwise specified by Seller, to accept
any item in a quotation. By accepting or filing this Purchase Order (P.O.), Seller agrees to the
terms and conditions herein which shall prevail over any inconsistent provision in any form or
other paper submitted by Seller. All shipments or services performed shall be deemed to have
been made pursuant hereto. No other terms are acceptable. This P.O., including all
specifications and drawings, shall constitute the entire agreement between the parties unless
modified in writing by City.
CITY'S PROPERTY: Seller agrees that the information, tools, jigs, dies, or materials, and
drawings, patterns, and specification supplied or paid for by City shall be and remain City
property and shall be held by Seller for City unless directed otherwise. Seller shall account for
such items and keep them protected, insured, and in good working conditions without
expense to City.
DELIVERY: The terms of delivery are as stated on the reverse side hereof. The obligation of
Seller to meet the delivery dates, specifications, and quantities set forth herein is of the
essence of this P.O. No boxing, packing, or cartage charge will be allowed unless authorized
by this P.O. Deliveries are to be made both in quantities and at times specified herein or, if
not, such quantities and times are specified pursuant to City's written instruction. Items not
delivered may be canceled without penalty to City. Shipments in greater or lesser quantity
that ordered may be returned at Seller's expense unless written authorization is issued by
City.
PRICES: The price which Seller charges in filling this P.O. shall not be higher than Seller's
most recent quote or charge to City for such materials, supplies, services and/or installations
unless City expressly agrees otherwise in writing. Notwithstanding the prices set forth the
P.O. City shall receive the benefit of any general reduction in the price of any item(s) listed
herein which may be made by Seller at any time prior to the last delivery of goods or services
covered by this P.O.
TERMINATION: City shall have the right to terminate this P.O. or any part thereof upon ten
(10) days notice in writing to Seller.
(1) Without Cause. City may terminate all or any part of this P.O. without cause. Any
claim by Seller for damages due to termination without cause must be submitted to City
within thirty (30) days after effective date of termination.
(2) For Cause. If Seller fails to make any delivery in accordance with the agreed delivery
date, delivery schedule, or otherwise fails to observe or comply with any of the other
instructions, terms, conditions or warranties applicable to this P.O., City may, in addition to
any other right or remedy provided by this P.O. or by law, terminate all or any part of this P.O.
in writing without any liability of City with respect to Seller at any time during the term of this
P.O. In the event of termination for cause, City may purchase supplies or services elsewhere
on such terms or in such manner as City may deem appropriate and Seller shall be liable to
City for any cost and other expenses incurred by City, which is charged to City.
CHANGES: City shall have the right at any time by written notice via P.O. Change Order to
Seller to make changes in the specifications, the quantity of items called for, delivery
schedules, and requirements covering testing, packaging, or destination. Any claim by Seller
for adjustment under this clause shall be deemed waived unless made in writing with then
(10) days after receipt by Seller of notice of such change. Price increases or extensions of
time for delivery shall not be binding on City unless evidenced by a P.O. Change Order issued
by City's Purchasing Manager.
INSPECTION: City shall have the right to inspect and approve or reject any materials,
supplies, services and/or installations upon arrival of notice of completion prior to payment
without regard to the manner of shipment, completion, or any shipping or price terms
contained in this P.O. All materials, supplies, services and/or installations must be furnished
as specified.
(1) Defective, damaged, and nonconforming materials and/or supplies may be returned
for credit or refund, at Seller's expense. City may charge Seller for all expenses of unpacking,
examining, repacking and reshipping of such materials and/or supplies.
(2) Defective, incorrect and nonconforming services and/or installations may be returned
for credit or refund, at Seller's expense. All of the above notwithstanding prior payment by
City.
WARRANTY: Seller expressly warrants that all materials, supplies, services and/or
installations covered by this P.O. shall:
(1) conform to the specifications, drawings, samples, or other descriptions specified by
City or if none are so specified, to Seller's standard specification or the standards of the
ASTM or ANSI or other national standard organizations;
(2) be new and unless specified to the contrary on the face hereof, will be free from
defects in material and workmanship and will be free of all liens and encumbrances and will
conform to any affirmation of facts made on the container or label;
(3) be adequately contained, packaged, marked, labeled and/or provided in compliance
with all applicable federal and state laws and regulations (including materials deemed
hazardous);
(4) be performed within the rules and regulations of the Occupational Safety and Health
Act of 1970 (as amended);
(5) be produced or transferred or disposed of as required by federal and state laws and
regulation under the conditions of the Toxic Substances Control Act; the Hazardous Materials
Control and Hazardous Waste Regulations; and other toxic laws and programs.
Seller further expressly agrees to protect, indemnify, and hold harmless City, its employees
and agents for any loss, damage, fine, liability, fee (including reasonable charges and fees) or
expense arising in connection with or resulting from Seller's failure to furnish materials or
supplies or perform services that conform with any warranty contained herein.
(6) have good marketable title.
GOVERNING LAW: This P.O. shall be governed by the laws of the State of California.
INDEPENDENT CONTRACTOR, INSURANCE: Seller certifies, by acceptance, that he/she is an
independent contractor. Seller shall protect, defend, and indemnify and hold City harmless
against all damages, liability, claims, losses and expenses (including attorney's fees) arising
out of , or resulting in any way from Seller's negligence in providing the goods or services
purchased hereunder or from any act or omission of Seller, its agents, employees, or
subcontractors, Seller shall maintain such public liability insurance, including contractual
liability, automobile and general public liability, (including non-owned automobile liability)
Worker's Compensation, and employer's liability insurance as well adequately protect City
against such damage, liabilities, claims, losses, and expenses (including attorney's fees).
Seller agrees to submit certificates of insurance, evidencing its insurance coverage when
requested by City.
EQUAL OPPORTUNITY CLAUSE: By acceptance of this P.O., Seller certifies it is in
compliance with the Equal Opportunity Clause required by Executive Order 11246, as
amended, and the Palo Alto Municipal Code, as amended, including Affirmative Action
Compliance Programs for Veterans; Handicapped; and Minority Business, and other equal
opportunity programs.
FORCE MAJEURE: City may delay delivery or acceptance occasioned by causes beyond its
control. Seller shall hold such materials, supplies, services and or installations at the direction
of City and shall deliver them when the cause affecting the delay has been removed. City
shall be responsible only for Seller's direct additional costs in holding the goods or delaying
performance of this P.O. and City's request. Seller shall also be excused if delivery is delayed
by unforeseen events beyond its reasonable control, provided Seller notifies City as soon as
they occur. City may cancel this P.O. if such delay exceeds thirty (30) days from the original
delivery date. Seller shall use its best efforts to grant preference to this P.O. over those of
other customers, which were placed after this P.O.
AUTHORITY OF AGENT OR FACTOR: Seller represents that, whenever it executes this P.O.
on behalf of a third party as an agent or factor, it shall disclose the existence of the agency or
factor relationship to City. Seller shall be deemed to have the legal authority to enter into this
P.O. with City on behalf of the third party.
INTERPRETATION OF CONTRACT DOCUMENTS: In the event of a conflict between the
terms of this P.O. and the attached specification with respect to any obligation of Seller, the
provision which impose the greater obligations upon Seller shall prevail.
Item 7
Attachment B - Excerpt
from Purchase Order
#4523000156
Item 7: Staff Report Pg. 8 Packet Pg. 157 of 269
CITY OF PALO ALTO
GDS Rev. 06/22/2016
TERMS AND CONDITIONS OF PURCHASE
PAGE 2 OF 3
ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS: Seller agrees to comply
with the City's Environmentally Preferred Purchasing Requirements.
(1) Hazardous Waste:
Seller shall take-back all spent or otherwise discarded hazardous products sold to the City by
the Seller if the spent or discarded products are classified as hazardous or universal wastes by
State or Federal regulations. Seller shall provide convenient collection and recycling services
(or disposal services if recycling technology is unavailable) for all universal wastes, which
originate from the Vendor. Hazardous waste manifests or bills of lading must be provided to
City staff upon request. Recycling and reuse of hazardous wastes must occur within the
United States. Universal waste lists and information are available
www.dtsc.ca.gov/HazardousWaste/UniversalWaste/. A hazardous waste list is available at
http://www.calrecycle.ca.gov/LEA/Training/wasteclass/yep.htm. Additional information can
be obtained by contacting the City of Palo Alto Hazardous Waste Department at (650)
496-6980.
(2) Zero Waste and Pollution Prevention:
Per Palo Alto City Council policy, the City is targeting to achieve Zero Waste by 2021. The
City must also meet Municipal Regional Stormwater Permit requirements requiring no visible
impact from litter via stormdrains by 2022. To that end the vendor, manufacturer and or
contractor must individually or collaboratively comply with the waste reduction, reuse and
recycling requirements of the City's Zero Waste and Pollution Prevention Programs. Seller
acknowledges and agrees that if Seller fails to fully and satisfactorily comply with these
requirements, the City will suffer, as a result of Seller's failure, substantial damages which
are both extremely difficult and impracticable to ascertain. Therefore, the Seller agrees that in
addition to all other damages to which the City may be entitled, in the event Seller fails to
comply with the below requirements Seller shall pay City as liquidated damages the amounts
specified below. The liquidated damage amount is not a penalty but considered to be a
reasonable estimate of the amount of damages City will suffer as a result of such
non-compliance.
Sellers shall adhere to the standard that all printed materials provided to the City that are
generated from a personal computer and printer including, proposals, quotes, invoices,
reports, and public education materials shall be double-sided, printed on a minimum of 30%
post-consumer content paper or greater unless otherwise approved by the City's
Environmental Services Division (650) 329-2117. Materials printed by a professional printing
company shall be a minimum of 30% post-consumer material or greater and printed with
vegetable based inks. Liquidated damages of $30 per document will be assessed by City for
failure to adhere to this requirement.
All paper packaging must be Forest Stewardship Council (FSC) Certified.
All primary, secondary and shipping (tertiary) packaging be minimized to the maximum
extent feasible while protecting the product being shipped.
All primary, secondary and shipping packaging shall be recyclable in the City's recycling
program. A complete list of items accepted for recycling are found at
www.zerowastepaloalto.org or by calling (650) 496-5910. If any portion is received that
does not meet this requirement, liquidated damages of $235 or a minimum of $50 if the
combined product and shipping cost is $235 or less will be assessed by City for failure to
adhere to this requirement.
Expanded foam plastics (e.g., foam or cushion blocks, trays, packing 'peanuts'), such as
but not limited to polystyrene (aka Styrofoam[tm]), polypropylene, or polyurethane shall not
be used as primary, secondary or tertiary/shipping packaging with the following exceptions:
o Primary packaging made from these materials may be used if the vendor,
manufacturer, contractor individually or collaboratively does one of the following:
(a) takes the material back at the City's convenience and at no cost to the City, or
(b) pays the City of Palo Alto's disposal costs via payment of liquidated damages of
$235, or a minimum of $50 if the combined product and shipping cost is $235 or less.
o Bioplastics that meet ASTM D6400 standards for compostability may be accepted
with approval from the City's Environmental Services Division subject to local municipal
compost facility requirements.
o If approved by the City's Environmental Services Division, a packaging requirement
may be waived if no other viable packaging alternative exists.
Reusable/returnable pallets shall be used and taken back by the Seller, at no additional
cost to the City. Seller shall provide documentation upon request ensuring reuse of pallets
and/or recycling of broken pallets. Liquidated damages of $262 or a minimum of $50 if the
combined product and shipping cost is $262 or less will be assessed by City for failure to
adhere to this requirement.
(3) Energy and Water Efficiency:
Seller shall provide products with an ENERGY STAR, Water Sense or State of California
standard rating, whichever is more efficient, when ratings exist for those products. A life
cycle cost analysis shall be provided to the City upon request and shall at minimum include:
first cost, operating costs, maintenance costs, and disposal costs.
Contacts for additional information about City of Palo Alto Hazardous Waste, Zero Waste and
Utilities programs:
Hazardous Waste Program (Public Works)
(650) 496-6980
Zero Waste Program (Public Works)
(650) 496-5910
Watershed Protection
(650) 329-2117
Energy Efficiency
(650) 496-2244
(4) Liquidated Damages:
Seller agrees that failure to comply with the City's Environmentally Preferred Purchasing
Requirements will result in Liquidated Damages, according to the table marked Liquidated
Damages on page 3 of this P.O.
Item 7
Attachment B - Excerpt
from Purchase Order
#4523000156
Item 7: Staff Report Pg. 9 Packet Pg. 158 of 269
Event of Non-Performance
Recycled Paper Use
Failure to use 30% recycled content paper
Recyclable Packaging Materials
Failure of Seller to use secondary and shipping packaging that is recyclable in
the City's recycling program.
Expanded Foam Plastics
Unapproved use of expanded foam plastics for secondary or shipping
packaging
Pallet Use
Failure of Seller to take-back and reuse pallets, recycling only broken pallets,
at no additional cost to the City.
Acceptable Performance Level
(Allowed events per Fiscal Year)
1
1
0
1
Liquidated Damage Amount
$30 per each document
$235 or a minimum of $50 if the combined product
and shipping cost is $250 or less will be incurred if
this is not adhered to.
$235 or a minimum of $50 if the combined product
and shipping cost is $235 or less
$262 or a minimum of $50 if the combined product
and shipping cost is $2 or less
CITY OF PALO ALTO
GDS Rev. 06/22/2016
TERMS AND CONDITIONS OF PURCHASE
NONCOMPLIANCE WITH ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS, LIQUIDATED DAMAGES:
The following table lists the events that constitute breaches of the Agreement's standard of performance warranting the imposition of liquidated damages; the acceptable performance level, and
the amount of liquidated damages for failure to meet the contractually required standards of performance.
PAGE 3 OF 3
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Action
Lead Department: Administrative Services
Meeting Date: February 13, 2023
TITLE
Discuss the FY 2023 Mid-Year Budget Review and Approve 1) FY 2023 Budget Amendments in
Various Funds, and 2) Amendments to the FY 2023 Table of Organization to add 5.25 full-time
and 2.43 part-time Full Time Equivalent (FTE) Positions
RECOMMENDATION
Staff recommends that the City Council review, discuss, and approve:
1) Amendments to the Fiscal Year 2023 Budget Appropriation for various funds and various
capital projects, as identified in Attachment A and Attachment A, Exhibit 1 and 2
(requires a supermajority, 2/3 approval); and
2) Amend the FY 2023 Table of Organization in Attachment B consistent with the budget
amendments in Attachment A, adding 5.25 full time and 2.43 part time FTE positions.
EXECUTIVE SUMMARY
This report provides and extensive update on the City’s financial status as of December 31, 2022,
halfway (6 months) through the current fiscal year. Included in this report are (1) recommended
budget adjustments to FY 2023 that reflect urgent / high priority fiscal needs or technical
adjustments, (2) recommended changes in staffing levels in FY 2023 adding 5.25 positions and
2.43 part-time FTE, (3) updated information on the City’s financial position in and outlook in FY
2023 including positioning for the upcoming FY 2024 budget process, and (4) FY 2023 2nd quarter
financial status updates (Attachment C). The next significant financial planning and budget
discussions will be the review of the FY 2024 proposed operating and capital budgets and
municipal fee schedule (May 2023 – June 2023) and recommended utility rates (March 2023 –
June 2023).
Each year staff bring forward recommendations to adjust the budget as part of the Mid-Year
Budget review. The City continues to reinvest in the most immediate needs of the City in order
to maintain high quality services for residents and position the City to proactively position itself
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financially in alignment with the 2024-2033 Long Range Financial Forecast1. Recommended
adjustments address measured investments for immediate needs to be addressed in FY 2023,
rather than waiting for the FY 2024 budget process. Revenue adjustments align the FY 2023
budget for major tax revenue sources with current projections and proactively fund reserves to
sustain the City through the next forecasted 2 years of projected deficits.
The City Council may amend the annual budget through appropriate motion; Attachment A and
B, if approved as recommended, provide the necessary transactional information for official
amendment of the annual budget. The budget appropriation actions require a supermajority
approval by the City Council (PAMC 2.28.080(c)(1)), or five (5) votes. The staff report provides
discussion of the balancing strategy as well as key highlights from the detailed adjustments. This
report is organized as follows:
1) FY 2023 Mid-Year Budget Adjustments
a) General Fund
i) Mid-Year Budget Review Balancing Strategy Summary
ii) Reinvestment Actions, Recommended Adjustments to the Budget
iii) Position/Table of Organization Changes Summary
iv) Technical Adjustments and Previous Council Direction
v) Budget Balancing Actions and City’s Financial Position in FY 2023 and FY 2024
b) Other Funds
c) Enterprise Funds
d) Capital Funds
2) Preliminary Q2 Financial Status & public safety overtime (Attachment C & D)
3) Timeline and Next Steps
Staff continues to manage resource availability and demands for extreme flexibility and
nimbleness in an environment that requires increased resources to deliver the same quality of
service. Passage of Measure L (Utility Transfer) and Measure K (Business Tax) by voters on the
November ballot will help to bolster revenues to pay for the increased cost of the services but
are not enough to cover the projected gap between revenues and expenses for the next several
years.
The balancing strategy works to continue the practice of funding ongoing activities with ongoing
revenue sources to proactively establish an uncertainty reserve at a level to offset projected
deficits for the next several years. Staff will continue to monitor these estimates and may bring
forward a year-end budget adjustment report in June with any additional refinements to
budgeted levels based on the most current information available.
12024-2033 Long Range Financial Forecast
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The economic outlook remains uncertain with national, state, regional, and local economic
indicators in transition. The economy exited 2021 in overdrive, but that growth combined with
global supply chain constraints pushed inflation higher than expected. The federal reserve began
raising the fed funds interest rate in March 2022 and is expected to continue in 2023, though at
a slower pace, which is intended to tame inflation. It remains unknown if the federal reserve will
achieve a “soft landing” where a slowdown in economic growth stems the rate of high inflation
but avoids a recession. The UCLA Anderson Forecast for California paints a generally positive
picture for the state as compared to national economic concerns. The local economy continued
to show strong performance in the latter half of the calendar year 2022, but “headwinds” will
likely slow the pace of economic growth. Finally, there are several issues across the City
continuing to impact the ability to transition beyond impacts of the pandemic including staff
turnover, recruitment and retention, and supply chain issues and inflation that continue to
increase costs across all aspects of the City.
BACKGROUND
Annually, staff brings forward the Mid-Year Budget Review to report the financial status of major
funds and the Capital Improvement Program as of the second quarter (Q2) of the current fiscal
year and recommends adjustments to the Adopted Budget. Adjustments to the City’s budget may
become necessary as revenues and expenditures vary from the original budget plan and are
typically ministerial. Staff has modified this Mid-year Budget Review to be more robust and
include adjustments that proactively reinvest in City services and priority initiatives in advance of
the FY 2024 budget process in alignment with expressed priorities by the City Council.
Additionally, this report aligns estimates for significant changes that have occurred in FY 2023,
including projections for major tax revenues and the status of new labor agreements.
Where possible, budget change recommendations are brought forward for City Council
consideration as part of the approval of the Mid-Year Budget Report to consolidate requests and
streamline changes to budget appropriations. These adjustments are necessary as revenues and
expenditures vary from the original budget plan for many reasons, including, but not limited to,
changes in economic factors, project estimates and scope, and City Council policy and direction.
The Mid-Year Budget Report reflects adjustments to align with prior City Council approved
direction, clean-up actions based on FY 2022 actual experience or current FY 2023 actual
activities.
As discussed in the FY 2024-2033 Long Range Financial Forecast (LRFF)2, the City made significant
service reductions in FY 2021 and FY 2022 Adopted Budgets to align expenses with losses of
nearly $40 million in General Fund tax revenues due to economic impacts resulting from the
COVID-19 pandemic. During this time, many services were reduced or eliminated across the
2 2024-2033 Long Range Financial Forecast
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organization and essential services were prioritized. In FY 2022, the City began to see gradual
signs of improvement and a positive economic outlook that supported initial reinvestments.
Further reinvestments were made in the FY 2023 Adopted Budget to restore services that were
previously reduced and provide resources to support priority initiatives. Additionally, the budget
continued proactive funding of long-term retiree benefits and initiated a three-year plan to
recover capital infrastructure investments to pre-pandemic levels.
In the first half of FY 2023, staff brought forward the FY 2022 Annual Comprehensive Financial
Report (ACFR) (Staff Report 2301-0715)3 for Council approval and the First Quarter (Q1) FY 2023
Financial Report (Staff Report 14630)4 for Finance Committee review. Staff reported higher
annual earnings for general fund revenues in FY 2022 as compared to the budget primarily due
to a faster recovery of major tax revenues in the last two quarters of the fiscal year. This recovery
trend continued in the first and second quarter of FY 2023, with several major tax revenue
categories tracking to exceed budgeted levels; actual year end results may vary due to continued
economic uncertainty. Staff anticipates using this additional one-time funding and reserves to
support near-term reinvestments and bridge projected shortfalls in the LRFF. Ongoing, staff
expects that continued economic recovery and a more diverse revenue base will help to stabilize
the fiscal outlook.
A list of prior staff reports providing various fiscal updates for Council deliberations can be found
in Attachment E for ease of reference.
ANALYSIS
This item serves as a continuation of the many touch points as the City balances responding to
emergent priorities with following through on established commitments. This report highlights
several areas of staff work ahead and outlines next steps and timing for a series of City Council
conversations planned to focus on fiscal monitoring, community and economic recovery, and
more. Further strategic work continues aside from the financial reporting discussed above,
focused on a Community and Economic Recovery Strategy. Findings and recommended
adjustments in this report are based on the data available at the time of reporting and reflect
preliminary 2nd Quarter financial activity in FY 2023 (Attachment C). Final Q2 data is typically
available at the end of March 2023, though material differences are not expected.
The following is an overview of the status for the General Fund, Enterprise Funds, and other funds
including recommended budget adjustments as they pertain to the City’s FY 2023 Operating and
Capital Budgets.
3 City Council Staff Report 2301-0715 January 23, 2022
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1061
4City Council Staff Report 14630 December 6, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/finance-committee/2022/20221206/20221206pfcsm-late-packet.pdf
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General Fund
Mid-Year Budget Review Balancing Strategy Summary
The General Fund ended FY 2022 with funding more than the 18.5% target level for the Budget
Stabilization Reserve (BSR) in FY 2023. The BSR is currently at $59.8 million or $14.2 million above
the 18.5% Council target level. Use of this excess BSR funding is recommended to fund actions in
this memorandum as discussed in the 2024-2033 LRFF report5. Use of several other reserves is
also recommended to fund actions in this report and consolidate reserve funding into one Budget
Uncertainty Reserve to proactively address the estimated deficits over the next several years. In
addition to this funding, a few of the major tax revenue categories are tracking at or above the
FY 2023 budget, most significantly Property Tax, Sales Tax, and Transient Occupancy Tax.
Adjustments to these Major Tax revenues are recommended to align the budget with current
projections for these categories, and staff will continue to monitor other more volatile revenue
sources. Finally, there are also potential risks and benefits associated with this balancing strategy
that should be considered when looking beyond FY 2023. The risks would further reduce the
City’s ability to fund the current level of services over the next several years, while the benefits
could offset costs for a longer period or even increase available funding sources. These are
discussed further in the Proposed Balancing Solutions section of this report.
The following table outlines the major drivers of the General Fund mid-year recommended
balancing strategy to offset the collective impact of these activities:
Table 1: General Fund Mid-Year Adjustments and Balancing Solutions
Summary of General Fund Adjustments
Net $ Impact
(Cost)/Benefit
Reinvestment Actions:
Neighborhood, Community and Library Services $(0.4) M
Public Safety $(0.4) M
Planning and Transportation Services $(0.2) M
Internal Services/Strategic Support $(0.1) M
Subtotal Reinvestment Actions:$(1.1) M
Technical Adjustments:
Major Tax Revenues
(Property Tax, Sales Tax, Transient Occupancy Tax)
$6.0 M
General Fund Reserves
(2023 Service Reinvestments, Utility Transfer Litigation, Transition Costs, Administrative
Support, COVID-19)
$7.8 M
52024-2033 LRFF report
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Program Funding
(Race and Equity, Rent Forgiveness)
$0.8 M
Labor Negotiation Alignment (Net-Neutral Action)
($2.6M for new labor agreements, offset by $0.9M Labor and Inflation Reserve and
$1.7M Vacancy Savings)
$0.0 M
Establish a Budget Uncertainty Reserve
($5.0M of the excess FY22 Budget Stabilization Reserve)
$(14.0) M
Supplemental Pension 115 Trust Contribution
($5.0M of the excess FY22 Budget Stabilization Reserve)
$(5.0) M
Capital Improvement Funding
($4.0M of the excess FY22 Budget Stabilization Reserve)
$(4.0) M
Electricity and Gas Commodity Purchases/Utility Allocated Charges $(0.6) M
Utility Equity Transfer $(0.6) M
Legal Services
(Utility Equity Transfer Case, Personnel Investigations, Wireless Ordinance Update)
$(0.4) M
Public Safety Revenue
(FireMed Program, First Responder Fee, Stanford Fire Services)
$(0.3) M
Golf Course Revenue Alignment $(0.2) M
Flood Response $(0.1) M
Subtotal Technical Adjustments $(10.6) M
Use of Budget Stabilization Reserve (BSR)
(BSR remains at 19.4% and $2.5 M above the 18.5% target level)
$11.7 M
Total Net Impact General Fund Mid-Year Adjustments $0.0 M
Reinvestment Actions
This report includes budget adjustments, grouped by service area, to continue to realign
resources with the priorities identified by the City Council. Major changes are recommended as
directed by the City Council and/or recommended by staff are below, and all transactions can be
found in greater detail in Attachment A. It should be noted that recommended budget
adjustments have been prorated for the remainder of the fiscal year, or approximately five (5)
months.
Neighborhood, Community and Library Services:
$17,000 revenue, $388,000 expense; 1.25 full-time, 2.43 part-time staffing
The Community Services Department’s recommendations reflect strategic investments in its
operations and represent current community needs. The restoration of 1.00 FTE Division
Manager of Park Open Space & Golf is due to the need for additional administrative support for
the department from the growing list of capital projects where extensive project monitoring and
specialized expertise are required. Additional trash pickup at parks is reflective of community
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feedback for increased service levels and the current popularity of the City’s open spaces. The
reopening Junior Museum & Zoo (JMZ) has been successful; however, challenges exist regarding
a myriad of issues including staffing, ticket and membership pricing, and utilization of technology
to improve operations. The organization study requested by the department represents the City’s
commitment to operating efficient high-quality youth facilities and services for the community.
Other recommendations include providing financial aid to Team Sheeper (the City’s contractors
providing community swim classes) while the Rinconada Pool resurfacing project (Building
System Improvements PF-01003) is being completed, funding for an overnight warming shelter,
and small community grants to teachers.
The Library Department has completed its organizational assessment and staffing analysis
approved in the FY 2023 Adopted Budget and actions to restructure operations in two divisions:
Community Engagement & Support Services and Branch Management & Operations are
recommended in this report. The reorganization will allow the department to provide more
administrative support and leadership for staff. The new service model also prioritizes efficiency
by hiring/reclassifying staff that enables the library to cross-train and lead initiatives that improve
community wellbeing. The new model also will strengthen and broaden community partnerships.
Larger and more strategic programming initiatives aligned with City and community priorities and
needs like sustainability, climate action, DEI (Diversity, Equity and Inclusion) and technology will
be supported. In addition, the library will also have resources to support services to underserved
communities. In addition, the department is recommending increasing expenditures by $30,000
to increase its current collection of materials related to DEI, along with materials in foreign
languages common in the community and expand its web-based collections.
Public Safety Services:
$0 revenue, $374,000 expense; 1.00 full-time, 0.00 part-time staffing
The Police Department recommendation includes the addition of 1.00 FTE Court Liaison Officer
to support criminal justice reforms, changes in reporting standards, and staff attrition causing
significantly higher staff time needed to process arrests and pursue successful prosecutions in
coordination the District Attorney’s Office.
Additionally, this report includes recommendations funding in the Fire Department for new fire
fighter hiring costs such as uniforms, personal protective equipment (PPE), academy fees, and
background checks as 16 entry-level fire fighters have been hired in FY 2023. The Department is
also shifting $1.5M in salary and benefits savings to offset overtime costs associated with the
academy. For more information, see the technical adjustments section below. Recruitment and
retention remain the top priorities in the immediate term for the Fire Department. These
investments are focused on ensuring the Department can continue to provide suppression and
rescue services for the City while meeting necessary staffing levels and training requirements.
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Planning and Transportation Services:
$34,000 revenue, $173,000 expense; 2.00 full-time, 0.00 part-time staffing
This report includes recommendations to recognize the impacts of expanding the Building
Inspection and Plan Review staffing classifications to include a senior level. These new
classifications will be brought forward to be legitimized in the FY 2024 budget cycle. It also
includes recommendations to reclassify administrative staff in accordance with a recent
classification study and recommendations to increase Long Range Planning capacity to continue
to support work on Council priorities including housing and coordinated area plans.
For the Office of Transportation, this report recommends the reclassification of a 1.00 FTE
Management Analyst to a Senior Management Analyst, consistent with the classification study’s
finding that the duties of the position are better aligned with the senior-level position. The Senior
Management Analyst will be responsible for higher level oversight of the department budget and
contracts for projects and programs including Rail Grade Separation, Safe Routes to School,
Parking, Traffic Operations and Safety, and the Bike and Pedestrian Plan. This position will also
provide administrative support for staffing needs, prepare staff reports, and act as a liaison for
cross-departmental assignments. The cost of the reclassification will be absorbed by vacancy
savings from the current budget and will therefore have no budgetary impact in FY 2023.
Internal Services/Strategic Support:
$0 revenue, $125,000 expense; 0.00 full-time, 0.00 part-time staffing
Included in this report are recommendations to add one-time funding for two outside counsel
agreements in the amount of $125,000 for legal work associated with the Roth Building
Rehabilitation.
Position/Table of Organization Changes Summary
Critical staffing challenges remain citywide. This report includes recommendations to add 5.25
full-time and 2.43 part-time positions. The recommendations in this report increase full-time
staffing levels in the General Fund Table of Organization from the FY 2023 adopted level of 552.81
FTE to 557.06 FTE (1,017.85 FTE to 1,023.10 FTE Citywide). See Attachment B, an amended Table
of Organization, for additional detail regarding the full-time position changes.
Technical Adjustments and Previous Council Direction
This report includes actions that are technical in nature and are needed to align budget with
current trends, and previous direction approved by the Council. Major changes are
recommended as directed by the City Council and/or recommended by staff are below, and all
transactions can be found in greater detail in Attachment A.
Major Tax Revenue: $6,000,000 additional revenue
Staff evaluated departmental and major tax revenue through Q2 and recommends actions that
result in a net $6.0 million increase. As noted in the Q1 Financial Report, major tax revenue
categories are trending higher than budgeted in FY 2023, and a $6.0 million increase is
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recommended to increase Transient Occupancy Tax ($4.0 million), Sales Tax ($1.5 million), and
Property Tax ($0.5 million).
General Fund Reserves: $8,700,000 expense savings
A number of reserves in the General Fund are being reduced in order to fund actions
recommended in this report and consolidate reserve funding to ease administration and clarity.
•The 2023 Service Reinvestments Reserve ($3.8 million) is being eliminated in order to
consolidate the funding into the Budget Uncertainty Reserve as discussed below.
•The Utility Transfer Litigation (Equity Transfer) Reserve is being reduced by $3.5 million
due to the passage of Measure L on the November 2022 ballot. This funding was set
aside for potential future costs related to the Green v. City of Palo Alto (Santa Clara
Superior Court, Case No. 1-16-CV-300760) if Measure L did not pass. The reserve will
still have $17.5 million to fund the estimated settlement of the case.
•The Transition Costs ($0.2 million) and Administrative Support ($0.2 million) Reserves
are being eliminated in order to fund various actions in this report as well as consolidate
reserve funding within the General Fund.
•The COVID-19 Reserve is being reduced by $0.1 million to fund flood response needs
around the City. This reserve will still have approximately $0.4 million to fund any
remaining COVID-19 related costs such as technology equipment for hybrid operations.
Any remaining funding in this reserve is anticipated to be liquidated at the end of FY
2023.
Program Funding (reconciliation): $800,000 expense savings
These technical corrections reduce funding for programs that have already spent funding or have
been completed and the funding is no longer needed. As part of the FY 2022 Reappropriations to
FY 2023 (Staff Report 14728)6, unspent funding was moved from FY 2022 to FY 2023 for the
Advancing Racial Equity program ($0.5 million) and the Rent Forgiveness program ($0.7 million).
After further analysis, it was determined that $0.1 million had been spent on contracts related
to Advancing Racial Equity work, and the Rent Forgiveness program had been completed in FY
2022. As a result, technical corrections are needed in this report to reduce the funding for
Advancing Racial Equity work to $0.4 million and eliminating the $0.7 million funding for Rent
Forgiveness to reconcile budget estimates with program activities.
Labor Negotiation Alignment: $2,600,000 expense; $2,600,000 expense savings
(Net-Neutral Action)
All labor agreements were scheduled to expire on December 31, 2022, except for the Service
Employees International Union Hourly Unit (SEIU-H) agreement, which is extended through
June 30, 2023. This net-neutral adjustment increases departmental salary and benefit
6City Council Staff Report 14728 October 24, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/city-council-agendas-minutes/2022/20221024/20221024pccsm-amended.pdf
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expenditures to align with the status of City and labor group economic proposals for all
contracts, including compensation adjustments and other terms of employment. An additional
$2.6 million in estimated expense increases is expected for new labor terms and is fully offset
by the elimination of the Labor and Inflation Reserve ($900,000) and projected departmental
vacancy savings ($1.7 million) based on current expense tracking.
Budget Uncertainty Reserve (establish): $14,000,000 expense
This adjustment establishes a $14.0 million Budget Uncertainty Reserve to proactively set aside
funding to address estimated deficits over the next two years. This action consolidates the City
Council prior actions for a two-year budget strategy adopted in FY 2023 and additional funds
approved by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR).
Excess BSR of $5.0 million was directed to establish an Economic Uncertainty Reserve. The
remaining funding is coming from the liquidation of the 2023 Service Reinvestments Reserve
($3.8 million) and appropriating a portion of the excess FY 2023 major tax revenue ($5.2 million)
both discussed as part of the City’s FY 2024-2033 LRFF.
Supplemental Pension Trust Contribution: $5,000,000 expense
This adjustment adds a $5.0 million transfer to the General Benefits Fund for an additional
contribution to the City’s Section 115 Pension Trust, bringing total principal contributions to
$55.0 million ($36.8 million from the General Fund) since inception in 2017. This action was
approved by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR) for
BSR exceeding target levels of 18.5% and reflects General Fund contributions only and is
consistent with the City’s Retiree Benefits Funding Policy. Staff will include adjustments for
proportional contributions from other (non-General Fund) funds as part of the FY 2023 year-end
or FY 2024 proposed process consistent with past practice and policy guidelines.
Capital Improvement Funding: $4,000,000 expense
This adjustment formalizes City Council actions to allocate $4.0 million resulting from FY 2022
year-end excess BSR, bringing the total base General Fund transfer to the Capital Improvement
Fund to $12.8 million in FY 2023 and is consistent with the Council policy guiding use of surplus
funds. This funding will be used to fund projects that are anticipated to exceed their current
budget such as the Downtown Automated Parking Guidance Systems project (PL-15002) as well
as increasing the fund balance in the Capital Improvement Fund for use in the development of
the upcoming 2024-2028 five-year Capital Improvement Plan.
Utility Equity Transfer: $583,000 expense
This action reduces the equity transfer to the General Fund from the Electric ($101,000) and Gas
($482,000) Funds in FY 2023 as a result of lower than anticipated fixed assets (depreciation) in FY
2022, and increased commodity and operation and maintenance costs, as well as the passage of
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Measure L in November 2022. This action is in alignment with the FY 2022 Annual Comprehensive
Financial Report (ACFR) as of June 30, 2022 (CMR 2301-0715)7.
Gas Commodity Purchases/Utility Allocated Charges: $228,000 expense
Gas commodity purchases increased in the Gas Fund consistent with the preliminary gas supply
forecast, which reflects fluctuating market prices and anticipated demand. This action aligns
revenue in the Gas Fund and City gas expenses accordingly.
Electric Commodity Purchases/Utility Allocated Charges: $427,000 expense
Electric commodity purchases increased in the Electric Fund consistent with the preliminary
electric supply forecast, which reflects fluctuating market prices and anticipated demand. This
action aligns revenue in the Electric Fund and City electric expenses accordingly.
Legal Services Contractual Support: $395,000 expense
Recommendations are included to add ongoing funding of $250,000 for employee-specific
personnel investigations and one-time funding for outside counsel agreements in the amounts
of $120,000 for the Utility Transfer Litigation (Equity Transfer) and $25,000 for a wireless
ordinance update.
Public Safety Revenue: Stanford Fire Service Agreement and FireMed/First Responder Programs
$140,000 revenue, $461,000 expense
This report includes technical actions to realize FY 2022 and FY 2023 Stanford fire and
communications services revenue, Fire Station 8 overtime reimbursements from the County, and
a realignment of revenue estimates for Fire Department programs.
Per the agreement with Stanford, at the second quarter of each year actual expenditures are
calculated and reconciled against budgeted levels for the prior fiscal year, resulting in either an
additional payment or a reimbursement. For FY 2022 actuals, an additional payment of $495,000
has been made by Stanford based on this reconciliation. An adjustment of $539,000 for FY 2023
Stanford revenue is also included to align the forecasted budget for fire prevention services with
the actual amounts being invoiced. Additionally, the City has an agreement in place with Santa
Clara County to staff Fire Station 8 on alternate months during high fire season months. As a
result, the County has provided a reimbursement of $177,000 for overtime from staffing the
station on behalf of the City of Los Altos Hills. Also included in this report is a reduction of $1.4
million to Fire Department revenue estimates for the FireMed Program and discontinuation of
the First Responder Fee Program. Lastly and net neutral adjustment of revenue and matching
expenses is recommended to recognize reimbursement from the State for medical
transportation costs through the Ground Emergency Medical Transportation (GEMT) program.
7 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1061
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Golf Course Services: $255,000 expense
This adjustment increases contract expenditure by $255,000 for City Golf Course operations
owed to the management company, OB Sports. The terms of agreement include a revenue share
equivalent to 20% of the calculated FY 2022 difference between Gross Revenue and Target
Revenue for that fiscal year.
Flood Response: $100,000 expense
Floods caused by multiple atmospheric rives in California beginning on December 31, 2022
caused periods of heavy rainfall that resulted in flooding, property damage, loss of power, and
evacuations across the state. The City provided regular updates and communication to residents
during this time, including opening a Community Resource Center at Rinconada Library to provide
a warm and dry location to relocate and gather. This action increases associated expenses for
materials and equipment rentals, lodging for displaced residents, and additional staffing to
provide consistent coverage.
Budget Balancing Actions and City’s Financial Position in FY 2023 and FY 2024
With the approval of these amendments the BSR would be reduced by $11.7 million. The
projected ending balance of the General Fund Budget Stabilization Reserve is anticipated to be
$48.1 million, which is above the City Council recommended 18.5 percent level of $45.6 million
by $2.5 million.
This balancing solution follows the City Council approved budget guiding principles as presented
annually with the approval of the City’s LRFF and seeks to:
1) Develop a structurally balanced budget that brings ongoing revenues and expenses into
alignment. Develop a plan for any structural imbalance to ensure that the City maintains
fiscal sustainability over the short, medium, and long-term.
2) Allocate one-time resources for one-time needs rather than committing one-time
resources to ongoing services. Examine appropriate uses of revenue surpluses that exceed
forecasted levels such as planning for recession needs, restoration needs, and strategic
investments.
3) Ensure appropriate resource allocation for City Council’s existing priorities.
6) Continue to thoroughly analyze non-personnel/equipment/other costs, such as contract
services, for cost savings opportunities or realignment with current needs.
9) Continue to prioritize proactively funding long term liabilities including but not limited to
debt obligations, pension obligations, and capital infrastructure in accordance with City
policies as approved by Council.
When bringing forward budget actions, staff works to align recommendations with the guiding
principles for budget balancing as approved by the Council The above principles most closely
align with this FY 2023 Mid-Year Budget Review. Establishing a $14 million Budget Uncertainty
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Reserve ensures that in the short and medium term, the City has a stable financial plan to address
current service levels while investing in core priority service areas. Although it does not fully fund
all identified priority projects, it does continue to focus reinvestment in areas that support the
Council’s priorities. A number of adjustments continue to align revenues and expenses with
current tracking including use of vacancy savings for increase labor contract costs and excess
revenues for proactive planning for the future. Lastly, the City continues to maintain its policies
for use of excess BSR through continued proactive funding of pension liabilities and a transfer to
support capital investment. Lastly, the BSR remains above target levels by $2.5 million allowing
for further investment in priority areas as part of the FY 2024 annual budget process or may be
used to assist should economic challenges become more apparent due to recessionary trends.
With any forecast and adjustments based on projections, there are inherent risks and benefits.
Staff seeks to conservatively position the City in order to provide organizational stability, while
acknowledging the service and resource needs, capacity to implement, and project pipeline to
continue to reinvest at a pace the organization can support. Potential risks and benefits
associated with this balancing solution that should be considered when looking beyond FY 2023.
The risks would further reduce the City’s ability to fund the current level of services over the next
several years, while the benefits could offset costs for a longer period of time or even increase
available funding sources.
Risks
•Unresolved Gap beyond FY 2025 – The Uncertainty Reserve recommended in this report
will cover estimated deficits in the first two years of the forecast (FY 2024 and FY 2025);
however, at this time the estimated deficits in FY 2026 and FY 2027 (approximately $7
million in total) would still need to be resolved.
•Labor Out of Contract – The current labor contracts would also be up for renegotiation
around the time of developing the FY 2026 budget, which may further increase the
current costs estimated for that year and years beyond.
•A more severe economic recession would cause increased deficits over the next several
years and likely shorten the period of time the Uncertainty Reserve could be used to
maintain services requiring reductions in costs, new revenues, and/or use of additional
reserves such as the BSR. The LRFF is currently modeled with limited underlying
economic growth but growth as a result of inflation in the near term (based on the most
recent economic forecasts for California).
Benefits
•Establishing a Budget Uncertainty Level at $14 million reserves enough funding to cover
the estimated deficits and maintain services for at least the next two fiscal years. This
stability is provided both to the community and the workforce supporting the goal to
attract and retain employees who deliver the services.
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•Major Tax revenue estimates are measured, depending on economic variables,
additional revenue above these modified budgeted levels may materialize.
•Reserve accounts health - The City’s Pension 115 Trust and California Employers’ Retiree
Benefit Trust (CERBT) accounts have the potential to fund annual pension and retiree
healthcare costs to provide short-term relief to City funds in order to maintain funding
to pay for services.
•A more robust economic recovery and the influx of Measure K (Business Tax) funding
would provide additional sources of funding to reduce the current forecasted deficits.
General Fund: Budget Stabilization Reserve
The General Fund Budget Stabilization Reserve is anticipated to be $48.1 million, which is above
the City Council recommended 18.5% level of $45.6 million by $2.5 million.
Should the Council approve the actions recommended in this report, there will be three (3)
reserves that remain in the General Fund; this is a consolidation from the current seven (7):
1. Reserve: Utility Transfer Litigation (Equity Transfer) $17.5 million, from $21.0 million
2. Budget Uncertainty Reserve $14.0 million, from $0
3. Reserve: COVID-19 $400,000, from $500,000
4. Reserve: 2023 Service Reinvestments $0, from $3.8 million
5. Reserve: Labor and Inflation $0, from $900,000
6. Reserve: Transition Costs $0, from $210,000
7. Reserve: Administrative Support $0, from $175,000
Other Funds – Mid-Year Budget Adjustments
Information Technology Fund
The Technology Fund will add 1.00 FTE Senior Technologist to serve as an additional project
manager. The City has 34 technology projects in process with 23 future projects in the pipeline.
The additional staffing will allow the City to keep up with its increasingly complex and demanding
technology initiatives. In addition, adjustments for contracts that were implemented, amended,
or omitted during the current fiscal year have also been included as technical adjustments. These
costs will be allocated across the City’s departments and funds in alignment with the allocation
methodology used as part of the FY 2023 Adopted Budget; however, for General Fund related
charges, those costs will be absorbed the Technology Reserve in FY 2023.
Investments in cybersecurity initiatives have also been recommended. As security incidents such
as phishing, data breaches, and viruses become more prevalent online, the need to further
insulate the City from cyber threats is needed and been advised by the Baker Tilly audit
assessments. These costs will be absorbed by Technology Fund in FY 2023.
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Public Art Fund – Code Art
The Public Art Fund to increase expenditures for continued support for Code:ART, a three-
evening interactive media art festival produced by the City of Palo Alto Public Art Program, which
re-imagines Palo Alto’s underutilized plazas, alleys, and public spaces through interactive light,
sound, and motion. The festival features a major interactive media artwork anchoring the festival
and six Urban Interventions activating downtown storefronts, alleys, parking lots or blank walls
in new and inventive ways. The artworks will invite play and participation, engaging area locals
in an event that outwardly reflects the creative community and culture that thrives here. The
Public Art Commission approved the use of $60,000 from the Public Art Fund to support
Code:ART at the September 15, 2022 meeting.
Supplemental Law Enforcement Services Fund – Opioid Grant
The City has received grant funding tied to Opioid Settlements. The Police Department will
spearhead new community initiatives for substance abuse treatment. The Department will
provide additional details regarding future programming as federal and state regulators provide
guidance on restrictive uses of the funding. This report includes a net-neutral adjustment in the
Supplemental Law Enforcement Service Fund to recognize the annual funding of $44,291 and
appropriate the corresponding expense.
Gas Tax Fund
The City receives revenues from California’s Highway Users Tax Account (HUTA) and the Road
Maintenance and Rehabilitation Account (RMRA SB1). In January, the Department of Finance’s
updates for estimated revenues from these accounts indicated that receipts would be lower than
what is currently in the City’s budget. To align with the new estimates, gas tax revenues will be
reduced by $271,000, and transfers to the Capital Improvement Fund for the Street Maintenance
project (PE-86070) will be reduced by $136,600 with the remaining gap to be funded by the
Infrastructure Reserve.
Enterprise Funds – Mid-Year Budget Adjustments
Mid-year actions being recommended in these funds are primarily related to the alignment of
the Utilities Department budgets with current market conditions for revenues and expenses
related to the purchase of commodities and the operation of utilities. The actions recommended
for FY 2023 mid-year will align revenues and expenses for the contract for tree and vegetation
clearing from the overhead electric distribution system; Electric and Gas Fund revenue
projections and commodity costs; interfund transfers for the Gas and Electric Fund Utilities Equity
Transfers; a Fiber Fund transfer to the Electric Fund; legal support contract services; and
increased membership fees for the Bay Area Water Supply and Conservation Agency (BAWSCA).
See Attachment A, Exhibit 1 for further information regarding the recommended changes in the
Enterprise Funds.
Capital Budget – Mid-Year Budget Adjustments
Several Capital Improvement Program projects require adjustments in FY 2023. For a detailed
view of all project adjustments by Fund, see Attachment A, Exhibit 2.
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- Funding of $100,000 will be appropriated in both the Capital Improvement Fund
Administration project (AS-10000) and the Plant Repair, Retrofit, and Equipment
Replacement project (WQ-19002) in the Wastewater Treatment Fund. This action will
fund legal costs associated with capital projects in these funds instead of funding the costs
in the Attorney’s Office General Fund budget.
- The Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities project (PG-
06003) requests $35,000 to replace the aging slide and pool covers at the Rinconada Kids
Pool. Approving this action at midyear will allow the slide to be replaced before summer.
- The Charleston/Arastradero Corridor project (PE-13011) will appropriate revenues,
including $37,200 of grant funding from the State for rubberized asphalt and $35,000 of
Charleston/Arastradero Development Impact Fees to offset costs for this project.
- The Roth Building Rehabilitation project (PF-23001) also has new revenue: $353,000 from
Santa Clara County, $50,000 from the Palo Alto Museum, and $978,825 from a Housing
and Urban Development (HUD) grant. The combined $1,381,825 of additional funds will
allow the project to increase appropriation for construction costs by $848,825 and free
up $533,000 in the Capital Improvement Fund to be used for other capital project needs.
- The Street Maintenance project (PE-86070), on the other hand, will need to decrease
revenue and appropriation by $136,600 due to the reduced gas tax revenue estimates
discussed in the Gas Tax Fund section above.
- Two projects require technical adjustments: the Byxbee Park Completion project (PE-
18006) needs to correct a -$1,300,000 revenue reappropriation from FY 2022 to FY 2023
that was entered in error as part of the Reappropriation actions. The Civic Center Fire Life
Safety Project (PE-18016) needs a correction to address a $142,000 year-end
encumbrance error that occurred while moving from FY 2022 to FY 2023 in order to
appropriately fund the project for the scope of work.
- The budget for the Wastewater Collection System Rehabilitation/Augmentation Project
31 (WC-19001) will be increased in FY 2023 by $5.7 million in order to expedite the
timeline for completion of the project. The overall project will only increase by $2.1
million, with the other funding coming from savings ($825,000) in the
Sewer/Lateral/Manhole Rehabilitation and Replacement project (WC-99013) and funding
programmed for WC-19001 in FY 2024 being moved to FY2023. This will allow the project
to be competed earlier and avoid higher costs related to night construction.
TIMELINE AND NEXT STEPS
Staff is actively working on the FY 2024 budget and regular reporting activities over the coming
months. Below is a list of expected reports and Council updates planned for the remainder of FY
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2023. The Council and Finance Committee will continue to be updated through these planned
discussions with adjustments brought forward as necessary. Expected upcoming financial status
and budget reporting include:
March/April 2023:
•Utility Advisory Commission (UAC) and Finance Committee Meetings – Five Year Utility
Financial Plans and FY 2024 Rate Recommendations
May 2023:
•Release of the FY 2024 Proposed Operating and Capital Budgets & Municipal Fee Changes
•Public Budget Hearings on the Proposed Budgets with Finance Committee, including
Utility Rates, Municipal Fees, and the 5-Year Capital Improvement Plan
June 2022:
•FY 2023 Third Quarter (Q3) Fiscal Analysis Report (information)
•FY 2024 Operating and Capital Budget Adoption
•FY 2024 Municipal Fee Adoption
•FY 2024 Utility Rates adoption
In addition, routine information reports including but not limited to utilities risk management,
investment reports, contracts and lease reporting will continue.
FISCAL/RESOURCE IMPACT
Approval of the attached transactions is required to amend the FY 2023 budget appropriation.
With the approval of these amendments, the Budget Stabilization Reserve (BSR) would be
reduced by $11.7 million and the projected ending balance of the General Fund BSR is anticipated
to be $48.1 million, which is within the target range of 15% to 20% of the General Fund Budget
expenses and is above the City Council target level of 18.5%, or $45.6 million, by $2.5 million. The
projected changes to the fund balance for all other funds including Enterprise Funds, Internal
Services Funds, Special Revenue Funds, and Capital Funds are outlined in Attachment A and
accompanying exhibits and impacts to fund balance summarized as follows:
Table 6: Resource Impact (Non-General Fund)
Fund Type Fund Amount
Capital Capital Improvement Fund $5.6 M
Enterprise Airport Fund $(23,000)
Electric Fund $8.9 M
Fiber Optics Fund $(0.2 M)
Gas Fund $6.2 M
Refuse Fund $(11,000)
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Fund Type Fund Amount
Stormwater Management Fund $(17,000)
Utility Administration Fund $(0.1 M)
Wastewater Collection Fund $(4.7 M)
Wastewater Treatment Fund $(0.4 M)
Water Fund $(0.5 M)
Internal Service Information Technology Fund $(0.4 M)
Print and Mail Services Fund $(1,000)
Vehicle Replacement Fund $(0.1 M)
Special Revenue California Avenue Parking Fund $(4,000)
Charleston/Arastradero Development Impact
Fee Fund
$(35,000)
Gas Tax Fund $(0.1 M)
Parkland Dedication Fee Fund $1.1 M
Public Art Fund $(60,000)
University Avenue Parking Fund ($25,000)
STAKEHOLDER ENGAGEMENT
The Office of Management and Budget has coordinated with all departments city-wide and the
City Manager’s Office, as appropriate, to bring forward the changes discussed and recommended
in this report.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the amendments to the
FY 2023 Budget Appropriation and FY 2023 Table of Organization are fiscal activities which do
not involve any commitment to any specific project which may result in a potentially significant
physical impact on the environment. CEQA Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A, Exhibit 1: FY 2023 Recommended Operating Budget Adjustments
Attachment A, Exhibit 2: FY 2023 Recommended Capital Budget Adjustments
Attachment B: Amended FY 2023 Table of Organization
Attachment C: Preliminary FY 2023 2nd Quarter Financial Status
Attachment D: Public Safety Overtime Analysis
Attachment E: Summary of Financial Status Reports in FY 2023 [for reference only]
APPROVED BY:
Kiely Nose, Administrative Services Director
Report #: 2212-0515
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GENERAL FUND (102)
City Attorney Legal Support
This action adds ongoing funding of $250,000 for employee-specific personnel investigations and one-time
funding for outside counsel agreements in the amounts of $125,000 for the Roth Building Rehabilitation,
$120,000 for Green case litigation, and $25,000 for a wireless ordinance update. (Ongoing Cost: $250,000)
- -$ 520,000$
City Clerk City Clerk Staff Training
This action provides one-time funding of $6,000 to the staff training budget for technical and leadership and
succession planning skills development. Funding is being shifted from Management Development Training
Funds in Non-Deparmental to cover the traiing needs. (Ongoing costs: $0)
- -$ 6,000$
Community
Services
Art & Sciences Division: Public Art Studio Staffing Reorganization
This action increases Art Center capacity to meet community demand for adult ceramic classes that are held at
the Art Center. This proposal adds one Junior Museum & Zoo Educator position (0.75 FTE) and eliminates two
hourly Instructor positions (0.40 FTE), for a net decrease of 0.05 FTE. Additionally, this action increases
revenues by $8,000 for fees generated by new Ceramics classes, which will become available if this action is
approved. This proposal creates greater staffing sustainability for this revenue-generating program, helping to
meet the increased community demand (Ongoing net costs: $0)
(0.05)8,000$ (7,200)$
Community
Services
Transfer from the Child Care Fund/Human Services Division: Early Education Professional Development
This action would transfer funds from the Child Care Trust Fund to the General Fund and appropriate funding
for professional development for early education providers via a mini-grant program. This aligns with the
previous Council Action (CMR 13553) on October 4, 2021 for the same purpose (Ongoing net costs: $0)
- 5,000$ 5,000$
Community
Services
Human Services Division : Overnight Warming Location (OWL) Funding
This action increases funding to provide shelter beds for Palo Alto unhoused at an Overnight Warming Location
(OWL) operated by a community partner. Costs will include shelter space (bed and food costs), outreach and
referral services to unhoused individuals, and transportation. (Ongoing costs: $15,000)
- -$ 15,000$
Community
Services
Art & Sciences Division: Junior Museum & Zoo (JMZ) Business and Operating Plan
This action will provide funding for a consultant to 1) perform an operational analysis of the JMZ and to 2)
prepare a business plan to inform ongoing operational and budgetary decisions. This will include an analysis of
the JMZ’s financial, operational, organizational, and programmatic performance for the first year of operations,
and recommendations for ongoing/future operations based on attendance and revenue projections. (Ongoing
costs: $0)
- -$ 50,000$
Community
Services
Open Space, Parks, & Golf Division: Management Staffing
This action adds 1.00 FTE Division Manager of Parks, Open Space, and Golf Position to manage large projects
such as the family wellness center, skatepark, 10.5 acres at the Baylands, and urgent and unplanned projects
like the Mayfield soccer complex infill replacement and Lytton Plaza fountain repair. This would allow the
Assistant Director to focus on complex policy issues, division leadership, and environmental regulatory
obligations. (Ongoing costs: $220,000)
1.00 -$ 71,000$
Community
Services
Recreation Division: Team Sheeper Operations Assistance – Rinconada Lap Pool
This action will provide funding for Team Sheeper (Palo Alto Swim & Sport) to continue to pay employees for 45
days while the City re-plasters the Rinconada Lap Pool and Kiddie Pool, which is anticipated to begin in early
March 2023. During this Capital Improvement Project, Team Sheeper will be unable to offer programming.
(Ongoing costs: $0).
- -$ 85,000$
Community
Services
Open Space, Parks, & Golf Division: Weekend Trash Pickup
This action increases the park maintenance contract service levels by adding weekend trash removal service at
ten of the most impacted parks. The amount requested for approval is prorated for the current Fiscal Year.
Current services under this contract include landscape maintenance of parks, athletic fields, courts, roadsides,
medians, City buildings, community centers, and other facilities throughout Palo Alto. (Ongoing costs:
$125,000)
- -$ 125,000$
Community
Services
Open Space, Parks, & Golf Division: Golf Course Green Fee Contract Services Alignment
This action increases expenditures related to City Golf Course operations. Contract expenditures are increased
by $255,000 to reflect amounts owed to OB Sports per the terms of the agreement with the City for the
calculated FY 2022 revenue share, or 20% of the difference between Gross Revenue and Target Revenue for
that fiscal year. (Ongoing costs: $0)
- -$ 255,000$
Fire First Responder Fee and FireMed Program Revenue
This action discontinues the First Responder Fee Program, eliminating $1.0 million in projected revenue,
following an external consultant's review and also reduces FireMed Program revenue by $375,000 due to
delayed advertising and reduced public interest. (Ongoing costs: $1,075,000).
- (1,380,000)$ -$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1 Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
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GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Fire Overtime: Fire Station 8 Reimbursement
This net-neutral action recognizes reimbursment revenue from the County for staffing Fire Station 8 on
alternate months during high fire season months on behalf of the City of Los Altos Hills. This revenue is used to
offset incurred Fire Department overtime costs. (Ongoing net costs: $0)
- 177,000$ 177,000$
Fire Fire Fighter New Hire Costs
This action adds one-time funding of $330,000 for new hire uniforms, personal protective equipment (PPE),
academy fees, and background checks as the Department has hired 16 entry-level fire fighters in FY 2023. These
costs are not budgeted as part of the adopted budget and typically funded as part of Mid-Year, because the
number of new hires can vary from year to year. Additionally, this action shifts $1.5 million from salaries to
overtime to realign budget estimates for vacant positions that are backfilled on overtime. (Ongoing costs: $0)
- -$ 330,000$
Fire Stanford Fire Service Agreement: Revenue True-Up
This action recognizes $1,033,000 in revenue from the Stanford University for the fire and communication
services agreement. At the second quarter of each year actual expenditures are calculated and are reconciled
against budgeted levels for teh prior year, resulting in either an additional payment or a reimbursement. For FY
2022 actuals, an additional payment of $495,000 has been made by Stanford. An adjustment of $539,000 for FY
2023 Stanford revenue is also included to align the forecasted budget for fire prevention services with the
actual amounts being invoiced. (Ongoing savings: $0)
- 1,033,000$ -$
Fire State Paramedic Rembursement Program
This action is a net neutral adjustment of revenue and matching expenses to recognize reimbursement from
the State for medical transportation costs through the Ground Emergency Medical Transportation (GEMT)
program. After contributing matching funds, this program reimburses the City for costs associated with
transporting patients in an abulance. (Ongoing savings: $0).
- 310,000$ 284,000$
Library Pacific Library Partnership Innovation and Technology Grant
This action recognizes $4,300 in revenue and expenditures related to the receipt of the Pacific Library
Partnership Innovation and Technology Opportunity Grant to support the purchase of ten drones for the
Mitchell Park Library program, Light Up the Library with Drones. (Ongoing costs: $0)
- 4,300$ 4,300$
Library Library Staffing Reorganization
This action reorganizes the Library Department organizational structure to reflect recommendations in the
completed staffing analysis and organizational assessment. This involves the reclassification of several full-time
and part-time positions, including a net addition of 2.73 FTE positions, to allow for a new service model that
meets community needs by providing additional programming and services while maintaining current
operating hours. (Ongoing costs: $165,000)
2.73 -$ 4,600$
Library Library Collections
This action adds $30,000 in ongoing funding for Library collections development. The Library strives to continue
to maintain a viable, well-rounded library collection to meet customers’ perennial needs, as identified in the
Library’s Collection Development Plan. (Ongoing costs: $75,000)
- -$ 30,000$
Office of
Transportation
Management Staffing Adjustment
This action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the General
Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of a classification
analysis which found that the duties of the position are better aligned with a Senior Management Analyst. The
work performed is critical to the department and cannot be distributed to another position. The cost of the
reclassification will be absorbed by vacancy savings from the current budget and will therefore have no
budgetary impact in FY 2023. (Ongoing costs: $13,000)
- -$ -$
Planning and
Development
Building Inspection and Plan Review Staffing Support
This action increases salary and benefits expenses and offsetting revenue to the Planning and Development
Services Department to recognize proposed reclassification of 3.00 FTE Building Inspector Specialist positions
and 1.00 FTE Plans Check Engineer position to new classifications of Senior Building Inspector and Senior Plans
Check Engineer, respectively. These Senior level classifications are being dicussed with labor and if approved,
will be legitimized in the FY 2024 budget process. The Senior Building Inspector classification is recommended
to attract more qualified and experienced candidates in an effort to meet high levels of inspection service
demand. Palo Alto's code is complex and often inspections require a higher level of inspection services that is
better reflected by a Senior level classification. The Senior Plans Check Engineer classification is recommended
to allow capacity for quality control of plan reviews and will be assigned the most complex permitting projects.
Establishing these new Senior level classifications is anticipated to increase the level of support in Building
Inspection and Plan Review services and improve recruitment and retention efforts by establishing a path for
advancement. This action is anticipated to be fully offset by revenue. (Ongoing net costs: $0)
- 21,000$ 21,000$
Planning and
Development
Administrative Staffing Adjustment
This action reclassifies 1.00 FTE Adminstrative Associate II to an Administrative Associate III. This action is the
result of a classification study which found that the duties of the position are better aligned with an
Administrative Associate III. The work accomplished by this position is critical to customer service functions in
the Development Center and cannot be reallocated to other staff. (Ongoing net costs: $0)
- 13,000$ 13,000$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
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GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Planning and
Development
Planning Long Range Staffing
This action adds 2.00 FTE Senior Planner positions to the Long Range Planning Team to support a variety of
Council-directed policies and projects. Long Range Planning is currently working on a wide breadth of initiatives
that require additional support and resources and over the past few years, the work plan for this team has
grown significantly with major projects. Some of these initiatives include: Rental Protection, Coordinated Area
Plans, Housing Element Implementation, State Law Updates and Implementation, and other Council-directed
policy. These positions will lead and manage progress on these complex and significant initiatives. (Ongoing
costs: $342,000)
2.00 -$ 139,000$
Police Public Safety Information Management Staffing Augmentation
This action adds 1.00 FTE Court Liason Officer position. The position will supplement the City's current court
liaison officer and provides the following essential services: 1 ) Being the primary coordinator of court cases for
criminal, traffic, and administrative matters. This includes pre-trial and mid-trial coordinating with city attorney,
defense attorney, District Attorney's Office (DAO), and police officers. 2) Quality control for police reports
issued by this department in adherence to standards. 3) Informing staff of policy and protocol changes from the
State or County including DAO, Department of Motor Vehicles, Courts, Probation, and jails or detention
facilities. In addition, the position can assist the Police Record's Division which has seen significant turnover
(Ongoing costs: 134,000)
1.00 -$ 44,000$
Non-
Departmental
General Fund Reserves
This action consolidates various reserves in the General Fund, including the FY 2023 Service Reinvestment
Reserve - Year 2 ($3.8 million), FY 2023 Utility Transfer Litigation or Equity Transfer Reserve ($3.5 million),
Transition Costs Reserve ($0.2 million), Administrative Support Reserve ($0.2 million), and COVID-19 Reserve
($0.1 million). (Ongoing costs: $0)
- -$ (7,785,000)$
Non-
Departmental
Major Tax Revenue Alignment
This action recognizes adjustments to estimates for Property Tax ($0.5 million), Sales Tax ($1.5 million), and
Transient Occupancy Tax (TOT) ($4.0 million), based on trends experienced through the first half of FY 2023.
This would bring the total estimate for Property Tax revenue to $61.3 million, Sales Tax revenue to $34.1
million, and TOT revenue to $23.2 million. (Ongoing savings: $0)
- 6,000,000$ -$
Non-
Departmental
Rent Forgiveness and Race & Equity Program Funding
This action reduces funding for programs that have already spent funding or have been completed and the
funding is no longer needed. As part of the FY 2022 Reappropriations to FY 2023 (CMR 14728), unspent funding
was moved from FY 2022 to FY 2023 for the Advancing Racial Equity program ($0.5 million) and the Rent
Forgiveness program ($0.7 million). After further analysis, it was determined that $0.1 million had been spent
on contracts related to Advancing Racial Equity work, and the Rent Forgiveness program had been completed in
FY 2022. As a result, technical corrections are needed in this report to reduce the funding for Advancing Racial
Equity work to $0.4 million and eliminating the $0.7 million funding for Rent Forgiveness. (Ongoing savings: $0)
(841,000)$
Non-
Departmental
Management Development Funds
This action uses Management Development Training Funds to offset recommendations to increase the City
Clerk staff training budget for technical and leadership and succession planning skills development. With this
adjustment, a total of $281,000 remains unspent in Management Development Funds (Ongoing savings: $0)
- -$ (6,000)$
Non-
Departmental
Storm and Flood Response
This action allocates funding for community assistance during the significant storm sytems beginning December
31, 2022, including materials an equipment rentals, lodging for displaced residents, and additional staffing to
provide consistent coverage. (Ongoing costs: $0)
100,000$
Non-
Departmental
Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Electric ($101,000) and Gas ($482,000)
Funds in FY 2023 as a result of lower than anticipated fixed assets (depreciation) in FY 2022, and increased
commodity and operation and maintenance costs, as well as the passage of Measure L in November 2022.
(Ongoing costs: $0)
- (583,000)$ -$
Non-
Departmental
Transfer to the Capital Improvement Fund
This action transfers $4.0 million to the Infrastructure Reserve in the Capital Improvement Fund, as approved
by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR) for BSR exceeding target
levels of 18.5%. (Ongoing costs: $0)
4,000,000$
Non-
Departmental
Transfer to the General Benefits Fund for Supplemental Pension Contributions
This action transfers $5.0 million to the General Benefits Fund to increase the contribution to the City's Section
115 Pension Trust Fund, as approved by the City Council in the FY 2022 Annual Comprehensive Financial Report
(ACFR) for BSR exceeeding target levels of 18.5%. (Ongoing costs: $0)
- -$ 5,000,000$
Non-
Departmental
Budget Uncertainty Reserve
This action allocates $14.0 million for a Budget Uncertainty Reserve to proactively set aside funding to address
estimated deficits over the next several years, including the Uncertainty Reserve approved in the FY 2022
Annual Comprehensive Financial Report (ACFR) ($5.0 million), liquidation of the FY 2023 Service Reinvestments
Reserve ($3.8 million), and appropriation of a portion of the excess FY 2023 major tax revenue adjustment ($5.2
million). (Ongoing costs: $0)
14,000,000$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 21 Packet Pg. 180 of 269
Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Various Labor Negotiation Adjustments
This net-neutral action recognizes increased expenses in departmental salary and benefits ($2.6 million), which
are offset by the use of the Labor and Inflation Reserve ($900,000) and projected year-end vacancy savings
($1.7 million). This year the City is engaging in labor negotiations with various groups. This report recognizes
$2.6 million in estimated expense increases commensurate with the status of economic proposals for all
groups, including compensation adjustments and other terms of employment. This expense increase is fully
offset by the elimination of the Inflation and Salary Reserve ($900,000) and projected departmental vacancy
savings ($1.7 million). (Ongoing costs: $12.5 million)
- -$ -$
Various Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate adjuster (E-
HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and results in revenue
impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the General Fund in FY 2023
is approximately $228,000; other funds $437,000. (Ongoing costs: $0)
- -$ 228,000$
Various Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and anticipated
demand. The City's cost of gas is budgeted as allocated charges in citywide departments and funds; therefore,
corresponding increases in various departments' allocated charges are recommended. The impact to the
General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing costs: $0)
- -$ 427,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (11,686,400)$
GENERAL FUND (102) SUBTOTAL 6.68 5,608,300$ 5,608,300$
CHILD CARE FUND (193)
Community
Services
Transfer to the General Fund for Human Services Division: Early Education Professional Development
This action would transfer funds from the Child Care Trust Fund to the General Fund and appropriate funding
for professional development for early education providers via a mini-grant program. This aligns with the
previous Council Action (CMR 13553) on October 4, 2021 for the same purpose (Ongoing costs: $5,000)
- -$ 5,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (5,000)$
CHILD CARE FUND (193) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 22 Packet Pg. 181 of 269
Revenues
Department FTE Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
GENERAL FUND CAPITAL IMPROVEMENT FUND (471)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in
Attachment A, Exhibit 2.2,617,425$ 989,225$
Office of
Transportation
Management Staffing Adjustment
This action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50
FTE in the General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This
action is the result of a classification analysis which found that the duties of the position are
better aligned with a Senior Management Analyst. The work performed is critical to the
department and cannot be distributed to another position. The cost of the reclassification will
be absorbed by vacancy savings from the current budget and will therefore have no budgetary
impact. (Ongoing costs: $4,000)
- -$ -$
Transfer to the Capital Improvement Fund
This action recognizes a transfer of $4.0 million from the General Fund to increase the
contribution to the Capital Improvement Fund, as approved by the City Council in the FY 2022
Annual Comprehensive Financial Report (ACFR). This brings the total base General Fund
transfer to $12.8 million in FY 2023. This funding will be used to fund projects that are
anticipated to exceed their current budget such as the Downtown Automated Parking
Guidance Systems project (PL-15002) as well as increasing the fund balance in the Capital
Improvement Fund for use in the development of the upcoming 2024-2028 five-year Capital
Improvement Plan. (Ongoing costs: $0)
- 4,000,000$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 5,628,200$
GENERAL FUND CAPITAL IMPROVEMENT FUND (471) SUBTOTAL - 6,617,425$ 6,617,425$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1 Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 23 Packet Pg. 182 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
AIRPORT ENTERPRISE FUND (530)
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 7,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing costs: $0).
- -$ 14,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $2,000)
- -$ 1,523$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (22,523)$
AIRPORT ENTERPRISE FUND (530) SUBTOTAL - -$ -$
ELECTRIC FUND (513 & 523)
Utilities Electric Line Clearing Services
This one-time action increases Contract Services from $2.9 million to $4.5 million to align the FY 2023
Electric Line Clearing budget with anticipated overhead line tree clearing work from the City's contractor,
Davey Tree. This increase meets the cumulative authorized spending approved by Council for the
overhead line tree clearing contract and allows an increase from four 2-person crews to six 2-person
crews. The City has experienced an increased number of outages in the past year caused by tree limbs
falling on overhead power lines, and this will address a backlog of routine work and respond to urgent
issues in a timely manner (Ongoing costs: $0)
- -$ 1,566,000$
Utilities Electric Hydro Rate Revenue/Electric Commodity Adjustments
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- 20,564,000$ 10,359,000$
Utilities Transfer to the Electric Fund for Foothills Work
This one-time action will transfer funds from the Fiber Fund to the Electric Fund, to purchase 25% or 12
strands of fiber installed by the Electric Utility at the Foothills, for the Adobe Creek connection to enable
SCADA services to monitor the Foothills reservoirs. The Fiber Utility plans to offer its Commercial Dark
Fiber service to Fiber service provider(s) in the Foothills area and use service providers to add internet
services to “light” the fiber for the residents. The Electric Utility does not foresee a use for the 12 fibers
and this is a much more cost effective solution to installing additional fiber in the area. (Ongoing costs: $0)
- 163,000$ -$
Utilities Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Electric Fund as a result of lower than
anticipated fixed assets (depreciation) in FY 2022, and increased commodity and operation and
maintenance costs. (Ongoing savings: $0)
- -$ (101,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1 Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 24 Packet Pg. 183 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $32,000)
- -$ 32,000$
Utilities Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 18,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 8,853,000$
ELECTRIC FUND (513 & 523) SUBTOTAL - 20,727,000$ 20,727,000$
FIBER OPTICS FUND (533)
Utilities Transfer to the Electric Fund for Foothills Work
This one-time action will transfer funds from the Fiber Fund to the Electric Fund, to purchase 25% or 12
strands of fiber installed by the Electric Utility at the Foothills, for the Adobe Creek connection to enable
SCADA services to monitor the Foothills reservoirs. The Fiber Utility plans to offer its Commercial Dark
Fiber service to Fiber service provider(s) in the Foothills area and use service providers to add internet
services to “light” the fiber for the residents. The Electric Utility does not foresee a use for the 12 fibers
and this is a much more cost effective solution to installing additional fiber in the area. (Ongoing costs: $0)
- -$ 163,000$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $2,000)
- -$ 2,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (165,000)$
FIBER OPTICS FUND (533) SUBTOTAL - -$ -$
GAS FUND (514 & 524)
Utilities Net Sales Revenue/Gas Commodity Purchase
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- 25,400,000$ 19,822,000$
Utilities Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Gas Fund as a result of lower than
anticipated fixed assets (depreciation) in FY 2022, and increased commodity and operation and
maintenance costs, as well as the passage of Measure L in November 2022. (Ongoing costs: $0)
- -$ (482,000)$
Utilities Transfer to the Water Fund for Water, Gas, Wastewater Utility GIS Data Capital Project (WS-02014)
The Gas and Wastewater Collection Funds pay a portion of the WS-01014 capital project costs through
transfers to the Water Fund. This funding cover ongoing conversion activity to bring maps into the new
GIS platform. Transfers were completed in prior years; however, GIS conversion work was not completed
in the prior years. Since this is an ongoing project, the FY23 transfers are being reduced to align total
cumulative transfers more closely based on work performed to date. (Ongoing savings: $0)
- -$ (166,000)$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 25 Packet Pg. 184 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $15,000)
- -$ 15,000$
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0).
- -$ 50$
Fund Balance Adjustment to Fund Balance
- -$ 6,210,950$
GAS FUND (514 & 524) SUBTOTAL - 25,400,000$ 25,400,000$
REFUSE FUND (525)
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 3,300$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $8,000)
- -$ 8,036$
Fund Balance Adjustment to Fund Balance
- -$ (11,336)$
REFUSE FUND (525) SUBTOTAL - -$ -$
STORMWATER MANGEMENT FUND (528)
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 9,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $8,000)
- -$ 7,598$
Fund Balance Adjustment to Fund Balance
- -$ (16,598)$
STORMWATER MANGEMENT FUND (528) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 26 Packet Pg. 185 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
UTILITIES ADMINISTRATION FUND (521)
Utilities Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $98,000)
- -$ 98,180$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing net costs: $0)
- 70,000$ 70,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (98,180)$
UTILITIES ADMINISTRATION FUND (521) SUBTOTAL - 70,000$ 70,000$
WASTEWATER COLLECTION FUND (527)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- -$ 4,825,000$
Utilities Transfer to the Water Fund for Water, Gas, Wastewater Utility GIS Data Capital Project (WS-02014)
The Gas and Wastewater Collection Funds pay a portion of the WS-01014 capital project costs through
transfers to the Water Fund. This funding cover ongoing conversion activity to bring maps into the new
GIS platform. Transfers were completed in prior years; however, GIS conversion work was not completed
in the prior years. Since this is an ongoing project, the FY23 transfers are being reduced to align total
cumulative transfers more closely based on work performed to date. (Ongoing savings: $0)
- -$ (166,000)$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $8,000)
- -$ 8,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 140$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (4,667,140)$
WASTEWATER COLLECTION FUND (527) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 27 Packet Pg. 186 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
WASTEWATER TREATMENT FUND (526)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- -$ 100,000$
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 25,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 282,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $38,000)
- -$ 38,332$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (445,332)$
WASTEWATER TREATMENT FUND (526) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 28 Packet Pg. 187 of 269
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
WATER FUND (522)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- (332,400)$ -$
Utilities Bay Area Water Supply and Conservation Agency (BAWSCA) Membership
This action increases membership fees for BAWSCA from $321,000 to $416,000. BAWSCA is a government
agency that was created by special legislative action to represent the water supply and conservation
interests of Palo Alto and other Wholesale Customers of the San Francisco Public Utilities Commission
(SFPUC). An assessment increase of 25% for membership fees is needed for a catch up because BAWSCA
relied on the use of the General Reserve and Balancing Account to fund its operating budget. (Ongoing
costs: $95,000)
- -$ 95,000$
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing costs: $0)
- -$ 85,000$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $13,000)
- -$ 13,000$
Fund Balance Adjustment to Fund Balance
This action increases/decreases the fund balance to offset adjustments recommended in this report.
-$ (525,400)$
WATER FUND (522) SUBTOTAL (332,400)$ (332,400)$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 29 Packet Pg. 188 of 269
Department FTE Adjustment Adjustment
INTERNAL SERVICE FUNDS
GENERAL BENEFITS FUND (687)
Non-
Departmental
Transfer from the General Fund for Supplemental Pension Contributions
This net-neutral action recognizes a transfer of $5.0 million from the General Fund to increase
the contribution to the City's Section 115 Pension Trust Fund, as approved by the City Council in
the FY 2022 Annual Comprehensive Financial Report (ACFR). A corresponding adjustment is
made to recognize pension expense. This brings total contributions to $55.0 million through FY
2023 ($36.8 million from the General Fund). Staff will include proportional contributions from
other funds as part of the FY 2023 year-end or FY 2024 Proposed Budget process. (Ongoing
costs: $0)
- 5,000,000$ 5,000,000$
GENERAL BENEFITS FUND (687) SUBTOTAL - 5,000,000$ 5,000,000$
INFORMATION TECHNOLOGY FUND (682)
Information
Technology
IT Project Services Administration Staffing
This action adds 1.00 FTE Senior Technologist to serve as a project manager and appropriates
an additional $67,838 in funding. Currently, the ITD has 34 projects with 23 additional projects
in the pipeline. The additional staffing will allow the City to keep up with the increasingly
complex technology demands of the City. (Ongoing costs: $209,000)
1.00 -$ 67,838$
Information
Technology
Cybersecurity Initiatives
This action adds $250,000 towards Citywide cybersecurity initiatives which include but are not
limited to disaster recovery, management framework, and endpoint controls. This funding will
allow for investments in solutions to protect the City against cyber threats and to address
recommendations from the Baker Tilly audit assessments. (Ongoing costs: $500,000)
- -$ 250,000$
Information
Technology
Charges to Other Departments/Information Technology Contract Services
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $279,000)
- 162,013$ 279,285$
Information
Technology
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro
rate adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to
$0.048/kWh and results in revenue impacts are anticipated to increase from $4,050,000 to
$23,980,000. The impact to the General Fund in FY 2023 is approximately $228,000; other
funds $437,000. (Ongoing costs: $0)
- -$ 1,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (436,110)$
INFORMATION TECHNOLOGY FUND (682) SUBTOTAL 1.00 162,013$ 162,013$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
p
ATTACHMENT A, EXHIBIT 1 Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 30 Packet Pg. 189 of 269
Department FTE Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
p
ATTACHMENT A, EXHIBIT 1
PRINT AND MAIL SERVICES FUND (683)
Administrative
Services
Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $1,000)
- -$ 956$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (956)$
PRINT AND MAIL SERVICES FUND (683) SUBTOTAL - -$ -$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This
adjustment is consistent with the preliminary gas supply forecast, which reflects fluctuating
market prices and anticipated demand. The City's cost of gas is budgeted as allocated charges in
citywide departments and funds; therefore, corresponding increases in various departments'
allocated charges are recommended. The impact to the General Fund in FY 2023 is
approximately $427,000; other funds $186,000. (Ongoing costs: $0)
- -$ 136,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro
rate adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to
$0.048/kWh and results in revenue impacts are anticipated to increase from $4,050,000 to
$23,980,000. The impact to the General Fund in FY 2023 is approximately $228,000; other
funds $437,000. (Ongoing Cost: $0)
- -$ 30$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $7,000)
- -$ 7,388$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (143,418)$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 31 Packet Pg. 190 of 269
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
BELOW MARKET RATE FUND (230)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 60$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (60)$
BELOW MARKET RATE FUND (230) SUBTOTAL - -$ -$
CALIFORNIA AVENUE FUND (237)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 3,800$
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact in FY 2023. (Ongoing Costs: $1,000)
- -$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (3,800)$
CALIFORNIA AVENUE FUND (237) SUBTOTAL - -$ -$
CHARLESTON/ARASTRADERO DEVELOPMENT IMPACT FEE FUND (213)
Public Works Transfer to the Capital Improvement Fund for the Charleston/Arastradero Corridor Project (PE-
13011)
This action transfers Charleston/Arastradero Impact Fee funds to the Capital Improvement Fund for
use by the Charleston/Arastradero Corrideor Project (PE-13011). This action should transfer the
remaining fee funds in order to close out this Fund. (Ongoing costs: $0)
- 35,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (35,000)$
CHARLESTON/ARASTRADERO DEVELOPMENT IMPACT FEE FUND (213) SUBTOTAL - -$ -$
GAS TAX FUND (231)
Public Works Gas Tax Revenues/Transfers to the Capital Improvement Fund for Streets Improvement Project (PE-
86070)
This action reduces Fund 231 Gas Tax revenue by $270,900, and reduces the transfer to the Capital
Improvement Fund by $136,600 for teh Streets Improvement project (PE-86070). This is based on the
State's updated January HUTA and SB1 gas tax revenue estimates. (Ongoing costs: $0)
- (271,000)$ (136,600)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (134,400)$
GAS TAX FUND (231) SUBTOTAL - (271,000)$ (271,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1 Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 32 Packet Pg. 191 of 269
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
PARKLAND DEDICATION FUND (209)
Public Works Transfer to the Capital Improvement Fund for the Boulware Park Project (PE-17005)
This technical correction aligns the transfer for a reappropriation of funds from FY 2022 to FY 2023
involving a transfer from the Parkland Dedication Fund to the Capital Improvement Fund for the
Boulware Park Project (PE-17005). The transfer into the Capital Improvement Fund was recorded, but
tthe transfer from the Parkland Dedication Fund was not, so this adds the missing portion of the
transfer to align both sides. (Ongoing costs: $0)
- -$ (1,100,000)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 1,100,000$
PARKLAND DEDICATION FUND (209) SUBTOTAL - -$ -$
PUBLIC ART FUND (207)
Community
Services
Art & Sciences Division: Annual Funding for Code Art
This action adds funding to continue support for Code:ART, a three-evening interactive media art
festival produced by the City of Palo Alto Public Art Program, which re-imagines Palo Alto’s
underutilized plazas, alleys, and public spaces through interactive light, sound, and motion. The
festival features a major interactive media artwork anchoring the festival and six Urban Interventions
activating downtown storefronts, alleys, parking lots or blank walls in new and inventive ways. The
artworks will invite play and participation, engaging area locals in an event that outwardly reflects the
creative community and culture that thrives here. The Public Art Commission approved the use of
$60,000 from the Public Art Fund to support Code:ART at the September 15, 2022 meeting (Ongoing
costs: $60,000)
- -$ 60,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (60,000)$
PUBLIC ART FUND (207) SUBTOTAL - -$ -$
RESIDENTIAL PARKING PERMIT FUND (239)
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact. (Ongoing Costs: $6,500)
- -$ -$
RESIDENTIAL PARKING PERMIT FUND (239) SUBTOTAL - -$ -$
SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (248)
Police Annual Opioid Settlement Funding
This net-neutral action appropriates $44,291 in revenues and expenditures in the Supplemental Law
Services Fund. The City has applied for and received grant funding from National Opioid Settlement
which will be administered by the Police Department. Many program terms and conditions are in
discovery as this is the first year offered, but outreach and intervention are expected uses of the
funding. Funding of the program is expected to last for the next 18 years and will be cost netural
(Ongoing net costs: $0)
- 44,291$ 44,291$
SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (248) SUBTOTAL - 44,291$ 44,291$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 33 Packet Pg. 192 of 269
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
UNIVERSITY AVENUE FUND (236)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing costs: $0)
- -$ 25,000$
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact in FY 2023. (Ongoing costs: $1,300)
- -$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (25,000)$
UNIVERSITY AVENUE FUND (236) SUBTOTAL - -$ -$
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 34 Packet Pg. 193 of 269
Project
Number Title Revenue Expense Comments
AS-10000 Capital Improvement Fund Administration
$ - $ 100,000 This action will fund legal costs associated with
capital projects in the Capital Improvement Fund
instead of the City Attorney's Office General
Fund budget.
PG-06003 Benches, Signage, Walkways, Perimeter
Landscaping, and Site Amenities
$ - $ 35,000 This action adds funding to replace the aging
slide and pool covers at the Rinconada Kids Pool.
Approving this action at midyear allows for the
slide to be replaced before summer.
PE-18006 Byxbee Park Completion $ 1,300,000 $ - This action corrects a reappropriation from FY
2022 to FY 2023 in this capital project. The
operating budget was not impacted so no
correction is needed.
PE-13011 Charleston/Arastradero Corridor Project $ 37,200 $ - This action appropriates rubberized asphalt
grant revenue from the State to offset costs for
this project.
PE-13011 Charleston/Arastradero Corridor Project $ 35,000 $ - This action appropriates funding from the
Charleston/Arastradero Development Impact
Fee Fund to offset costs in this project.
PE-18016 Civic Center Fire Life Safety Project $ - $ 142,000 This action is a technical correction to fully fund
this project in FY 2023 as there was an issue
moving an encumbrance FY 2022 to FY 2023.
PF-23001 Roth Building Rehabilitation $ 1,381,825 $ 848,825 This action aligns the FY 2023 budget with
updated cost and revenue amounts in the Roth
Building Tenant Work Letter.
PE-86070 Street Maintenance $ (136,600) $ (136,600) This action aligns the FY 2023 budget with the
State's updated January HUTA & SB1 Gas Tax
revenue estimates.
Total $ 2,617,425 $ 989,225
WC-19001 Wastewater Collection System
Rehabilitation/Augmentation Project 31
$ - $ 5,650,000 This action increases WC-19001 with savings
from WC-99013 ($825k), moves funding in WC-
19001 programmed in FY24 to FY23 ($3.3M),
and increases the overall project budget by
$2.1M. The project can be expedited to save
costs related to night constuction.
WC-99013 Sewer Lateral/Manhole Rehabilitation and
Replacement
$ - $ (825,000) This action shifts savings from this project to WC-
19001 in order to complete work in that project
in FY 2023. Total $ - $ 4,825,000
WQ-19002 Plant Repair, Retrofit, and Equipment
Replacement
$ - $ 100,000 This action will fund legal costs associated with
capital projects at the Regional Water Quality
Control Plant instead of the City Attorney's Office
General Fund budget.
Total $ - $ 100,000
WS-02014 Water, Gas, Wastewater Utility GIS Data $ (332,400) $ - This action reduces the transfers from the Gas
and Wastewater Collection Fund and allocated
funding for this project to align the funding with
work completed in previous fiscal years.
Total $ (332,400) $ -
TOTAL CIP ADJUSTMENTS $ 2,285,025 $ 5,914,225
WATER FUND
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 CAPITAL IMPROVEMENT PROGRAM
WASTEWATER COLLECTION FUND
WASTEWATER TREATMENT FUND
ATTACHMENT A, EXHIBIT 2
CAPITAL IMPROVEMENT FUND
Item 8
Attachment A - Exhibits 1
and 2 Recommended
Budget Adjustments
Item 8: Staff Report Pg. 35 Packet Pg. 194 of 269
TABLE OF
ORGANIZATION
1
Table of Organization
Attachment B is the Table of Organization, as amended by the recommended
actions impacting full-time staffing in the FY 2023 Mid-Year Budget Review. In
this report, net 5.25 FTE full-time and 2.43 FTE part-time positions are
recommended to be added. Position additions, reclassifications, and realignments
include:
1.Add 1.00 Division Manager Open Space, Parks, and Golf
2.Add 0.75 FTE Junior Museum and Zoo Educator, offset by the elimination of
0.40 FTE Arts & Science Professional I - H and 0.40 FTE Arts & Science
Professional II - H
3.Add 1.00 Senior Technologist
4.Reclassify 1.00 Management Analyst to 1.00 Senior Management Analyst
5.Reclassify 1.00 Administrative Associate II to 1.00 Administrative Associate III
6.Add 2.00 Senior Planner
7.Add 1.00 Court Liaison Officer
8.Reclassify 1.00 Administrative Associate III to 1.00 Administrative Assistant
9.Add 3.23 part-time positions (0.15 FTE Librarian – H, 2.99 FTE Library Clerk –
H, 0.09 FTE Library Page – H), partially offset by the elimination of 1.00
Librarian and 0.50 FTE Library Specialist
10.Reclassify 1.00 Business Analyst to 1.00 Senior Business Analyst
11.Reclassify 1.00 Assistant Director to 1.00 Division Head Library Services
12.Add 3.00 Coordinator Library Programs, offset by the elimination of 2.00
Senior Librarian
13.Reclassify 1.00 Librarian to Senior Librarian
14.Reclassify 3.00 Library Specialist to 3.00 Library Associate
t
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 36 Packet Pg. 195 of 269
TABLE OF ORGANIZATION
2
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
General Fund
Administrative Services
Account Specialist 4.63 4.63 4.13 4.13 ——%
Account Specialist-Lead 3.45 3.45 3.45 3.45 ——%
Accountant 3.00 3.00 2.00 2.00 ——%
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate II 1.00 1.00 0.50 0.50 ——%
Administrative Associate III 1.00 1.00 1.00 1.00 ——%
Assistant Director Administrative Services 1.65 1.65 1.65 1.65 ——%
Buyer 1.00 1.00 2.00 2.00 ——%
Chief Procurement Officer 1.00 1.00 1.00 1.00 ——%
Contracts Administrator 2.70 2.70 1.70 2.70 1.00 58.8%
Director Administrative Services/CFO 0.80 0.80 0.80 0.80 ——%
Director Office of Management and Budget 1.00 1.00 1.00 1.00 ——%
Management Analyst 2.00 2.00 2.00 2.00 ——%
Manager Budget 2.00 2.00 2.00 2.00 ——%
Manager Real Property 1.00 1.00 1.00 1.00 ——%
Manager Revenue Collections 0.62 0.62 0.62 0.62 ——%
Manager Treasury, Debt & Investments 0.60 0.60 0.60 0.60 ——%
Manager, Finance 1.00 1.00 1.00 1.00 ——%
Payroll Analyst 2.00 2.00 2.00 2.00 ——%
Performance Auditor II —1.00 ————%
Senior Accountant 3.00 3.00 3.00 3.00 ——%
Senior Buyer 1.00 1.00 1.00 1.00 ——%
Senior Management Analyst 2.30 2.30 2.30 2.30 ——%
Storekeeper 1.00 1.00 1.00 2.00 1.00 100.0%
Storekeeper-Lead 0.20 0.20 0.20 0.20 ——%
Warehouse Supervisor 0.20 0.20 0.20 0.20 ——%
Total Administrative Services 39.15 40.15 37.15 39.15 2.00 5.4%
City Attorney
Assistant City Attorney*3.00 3.00 3.00 4.00 1.00 0.33%
Chief Assistant City Attorney 1.00 1.00 1.00 1.00 ——%
City Attorney 1.00 1.00 1.00 1.00 ——%
Claims Investigator 1.00 1.00 1.00 1.00 ——%
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 37 Packet Pg. 196 of 269
TABLE OF ORGANIZATION
3
Deputy City Attorney*1.00 1.00 1.00 —(1.00)(100.0)%
Legal Fellow 1.00 1.00 1.00 1.00 ——%
Secretary to City Attorney 1.00 1.00 1.00 1.00 ——%
Senior Management Analyst 1.00 1.00 1.00 1.00 ——%
Total City Attorney 10.00 10.00 10.00 10.00 ——%
City Auditor
City Auditor 1.00 1.00 ————%
Performance Auditor II 2.00 —————%
Senior Performance Auditor 1.00 2.00 ————%
Total City Auditor 4.00 3.00 ————%
City Clerk
Administrative Associate III 2.00 2.00 2.00 2.00 ——%
Assistant City Clerk 1.00 1.00 1.00 1.00 ——%
City Clerk 1.00 1.00 1.00 1.00 ——%
Deputy City Clerk 1.00 1.00 1.00 1.00 ——%
Total City Clerk 5.00 5.00 5.00 5.00 ——%
City Manager
Administrative Assistant 2.00 2.00 2.00 2.00 ——%
Assistant City Manager 1.00 1.00 1.00 1.00 ——%
Assistant to the City Manager*2.00 2.00 1.00 3.00 2.00 200.0%
Chief Communications Officer 1.00 1.00 1.00 1.00 ——%
City Manager 1.00 1.00 1.00 1.00 ——%
Deputy City Manager 1.00 1.00 1.00 1.00 ——%
Executive Assistant to the City Manager 1.00 1.00 1.00 1.00 ——%
Management Analyst 0.75 —————%
Manager Communications 1.00 1.00 1.00 1.00 ——%
Senior Management Analyst ———1.00 1.00 —%
Total City Manager 10.75 10.00 9.00 12.00 3.00 33.3%
Community Services
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate III 1.00 1.00 ————%
Assistant Director Community Services 2.00 2.00 1.00 1.00 ——%
Building Serviceperson 1.25 1.00 1.00 1.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 38 Packet Pg. 197 of 269
TABLE OF ORGANIZATION
4
Building Serviceperson-Lead 0.60 0.60 0.60 0.60 ——%
Coordinator Recreation Programs 4.00 4.00 4.00 4.00 ——%
Director Community Services 1.00 1.00 1.00 1.00 ——%
Division Manager Open Space, Parks and
Golf***
1.00 ——1.00 1.00 —%
Heavy Equipment Operator 0.07 0.07 ————%
Inspector, Field Services 2.00 2.00 2.00 2.00 ——%
Junior Museum & Zoo Educator*,***3.60 3.60 3.25 4.85 1.60 49.2%
Management Analyst 1.00 1.00 1.00 1.00 ——%
Management Assistant 1.00 1.00 1.00 1.00 ——%
Manager Community Services 5.00 5.00 5.00 5.00 ——%
Manager Community Services Senior Program 4.00 4.00 4.00 4.00 ——%
Manager Human Services 1.00 1.00 1.00 1.00 ——%
Park Maintenance Person 6.00 6.00 6.00 6.00 ——%
Park Maintenance-Lead 1.00 1.00 1.00 1.00 ——%
Park Ranger 5.00 5.00 5.00 6.00 1.00 20.0%
Parks/Golf Crew-Lead 2.00 2.00 2.00 2.00 ——%
Producer Arts/Science Program 11.00 12.00 11.00 12.25 1.25 11.4%
Program Assistant I 8.00 7.00 3.00 3.00 ——%
Program Assistant II 3.00 4.00 4.00 4.00 ——%
Project Manager 0.10 0.10 0.10 0.10 ——%
Senior Management Analyst 1.00 1.00 1.00 1.00 ——%
Sprinkler System Representative 4.00 4.00 4.00 4.00 ——%
Superintendent Community Services 2.00 2.00 2.00 2.00 ——%
Superintendent Recreation 1.00 1.00 ————%
Theater Specialist 2.00 2.00 2.00 2.00 ——%
WGW Heavy Equipment Operator ——0.07 0.07 ——%
Total Community Services 75.62 75.37 67.02 71.87 4.85 7.2%
Fire
40-Hour Captain**———0.20 0.20 —%
40-Hour Training Battalion Chief 1.00 1.00 1.00 1.00 ——%
40-Hour Training Captain 1.00 1.00 1.00 1.00 ——%
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate II 2.20 2.20 2.20 2.20 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 39 Packet Pg. 198 of 269
TABLE OF ORGANIZATION
5
Administrative Associate III ———0.20 0.20 —%
Battalion Chief 3.00 3.00 3.00 3.00 ——%
Business Analyst 0.80 0.80 0.80 0.80 ——%
Deputy Chief/Fire Marshal 0.05 0.05 0.05 —(0.05)(100.0)%
Deputy Director Technical Services Division*0.20 0.20 —0.20 0.20 —%
Deputy Fire Chief 2.00 2.00 1.00 2.00 1.00 100.0%
Emergency Medical Service Director 1.00 1.00 1.00 1.00 ——%
Emergency Medical Services Data Specialist 1.00 1.00 1.00 1.00 ——%
Fire Apparatus Operator 26.00 26.00 26.00 26.00 ——%
Fire Captain 21.00 21.00 20.00 20.00 ——%
Fire Chief 1.00 1.00 1.00 1.00 ——%
Fire Fighter*34.00 34.00 29.00 34.00 5.00 17.2%
Fire Fighter Trainee**———3.00 3.00 —%
Fire Inspector 0.80 0.80 0.40 0.40 ——%
Fire Marshal**———0.05 0.05 —%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 ——%
Hazardous Materials Inspector 0.30 0.30 0.30 0.70 0.40 133.3%
Senior Management Analyst 1.00 1.00 1.00 1.00 ——%
Total Fire 97.85 97.85 90.25 100.25 10.00 11.1%
Human Resources
Assistant Director Human Resources 1.00 1.00 1.00 1.00 ——%
Director Human Resources/CPO 1.00 1.00 1.00 1.00 ——%
Human Resources Representative 3.00 3.00 2.00 2.00 ——%
Human Resources Technician*4.00 4.00 3.00 4.00 1.00 33.3%
Manager Employee Benefits 1.00 1.00 1.00 1.00 ——%
Manager Employee Relations 1.00 1.00 1.00 1.00 ——%
Senior Human Resources Administrator 3.00 3.00 3.00 3.00 ——%
Senior Management Analyst 2.00 2.00 2.00 2.00 ——%
Total Human Resources 16.00 16.00 14.00 15.00 1.00 7.1%
Library
Administrative Assistant***———1.00 1.00 —%
Administrative Associate III***1.00 1.00 ——(1.00)(100.0)%
Assistant Director Library Services***1.00 1.00 ————%
Business Analyst***1.00 1.00 1.00 —(1.00)(100.0)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 40 Packet Pg. 199 of 269
TABLE OF ORGANIZATION
6
Coordinator Library Programs***1.00 1.00 1.00 5.00 4.00 400.0%
Director Libraries 1.00 1.00 1.00 1.00 ——%
Division Head Library Services***1.00 1.00 1.00 2.00 1.00 100.0%
Librarian***6.00 6.00 6.00 5.00 (1.00)(16.7)%
Library Associate***7.00 7.00 6.00 9.00 3.00 50.0%
Library Specialist***11.50 11.50 10.50 9.00 (1.50)(14.3)%
Management Analyst 1.00 1.00 1.00 1.00 ——%
Manager Library Services 3.00 3.00 3.00 3.00 ——%
Senior Business Analyst***———1.00 1.00 —%
Senior Librarian***8.00 8.00 6.00 5.00 (1.00)(16.7)%
Supervising Librarian 4.00 4.00 4.00 4.00 ——%
Total Library 46.50 46.50 40.50 46.00 5.50 13.6%
Office of Emergency Services
Director Office of Emergency Services 1.00 1.00 1.00 1.00 ——%
Office of Emergency Services Coordinator 1.00 1.00 1.00 1.00 ——%
Program Assistant II 1.00 1.00 ————%
Total Office of Emergency Services 3.00 3.00 2.00 2.00 ——%
Office of Transportation
Administrative Assistant 0.50 0.50 0.60 0.60 ——%
Associate Engineer 0.30 0.30 0.35 0.35 ——%
Associate Planner 0.30 0.45 0.40 0.40 ——%
Chief Transportation Official 0.70 0.70 0.70 0.70 ——%
Coordinator Transportation Systems
Management
1.25 1.25 0.65 0.65 ——%
Management Analyst***0.50 0.50 0.50 —(0.50)(100.0)%
Parking Operations-Lead ——0.05 0.05 ——%
Project Engineer 0.45 0.45 0.25 0.25 ——%
Senior Engineer*0.20 0.20 0.20 0.55 0.35 175.0%
Senior Management Analyst***———0.50 0.50 —%
Senior Planner 0.50 0.50 0.15 0.15 ——%
Traffic Engineering-Lead*0.35 0.35 0.35 —(0.35)(100.0)%
Transportation Planning Manager 1.15 1.15 1.00 1.00 ——%
Total Office of Transportation 6.20 6.35 5.20 5.20 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 41 Packet Pg. 200 of 269
TABLE OF ORGANIZATION
7
Planning and Development Services
40-Hour Captain**———0.80 0.80 —%
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate I 1.00 1.00 1.00 1.00 ——%
Administrative Associate II***2.80 2.80 2.80 1.80 (1.00)(35.7)%
Administrative Associate III*,***4.00 4.00 3.00 5.80 2.80 93.3%
Assistant Chief Building Official 1.00 1.00 1.00 2.00 1.00 100.0%
Assistant Director PCE 1.00 1.00 1.00 1.00 ——%
Associate Engineer 0.22 0.20 ————%
Associate Planner 3.15 3.00 3.25 1.25 (2.00)(61.5)%
Building Inspector Specialist 4.00 6.00 6.00 8.00 2.00 33.3%
Building/Planning Technician 3.00 3.00 2.00 2.50 0.50 25.0%
Chief Building Official 1.00 1.00 1.00 1.00 ——%
Chief Planning Official 1.00 1.00 1.00 1.00 ——%
Code Enforcement Officer*2.00 2.00 —1.00 1.00 —%
Code Enforcement-Lead 1.00 1.00 1.00 1.00 ——%
Deputy Chief/Fire Marshal 0.80 0.80 0.80 —(0.80)(100.0)%
Development Project Coordinator II 2.00 2.00 2.00 2.00 ——%
Development Project Coordinator III 3.00 3.00 3.00 3.00 ——%
Director Planning/Community Environment 1.00 1.00 1.00 1.00 ——%
Engineer 0.64 0.52 0.52 0.52 ——%
Engineering Technician III 1.78 1.50 1.50 1.50 ——%
Fire Inspector 3.20 3.20 1.60 1.60 ——%
Fire Marshal**———0.80 0.80 —%
Hazardous Materials Inspector 1.60 1.60 1.60 3.20 1.60 100.0%
Industrial Waste Inspector 0.01 —————%
Industrial Waste Investigator 0.35 0.35 0.35 0.35 ——%
Inspector, Field Services 0.68 0.68 0.68 0.68 ——%
Landscape Architect Park Planner 0.50 0.50 0.50 0.50 ——%
Management Analyst 0.01 —————%
Manager Environmental Control Program*0.10 —————%
Manager Planning 5.00 4.00 4.00 4.00 ——%
Manager Urban Forestry 0.04 —————%
Planner 4.00 4.00 4.00 5.00 1.00 25.0%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 42 Packet Pg. 201 of 269
TABLE OF ORGANIZATION
8
Plans Check Engineer ———1.00 1.00 —%
Principal Management Analyst 1.00 —————%
Principal Planner 2.00 2.00 1.00 2.00 1.00 100.0%
Program Assistant 1.00 1.00 ————%
Project Engineer 0.13 0.10 ————%
Project Manager ———0.50 0.50 —%
Senior Business Analyst 1.00 1.00 1.00 1.00 ——%
Senior Engineer*0.46 0.40 0.40 0.45 0.05 12.5%
Senior Industrial Waste Investigator 0.01 —————%
Senior Management Analyst 2.00 2.00 2.00 2.00 ——%
Senior Planner***3.60 3.60 3.65 6.65 3.00 82.2%
Supervisor Inspection and Surveying 0.27 0.25 0.25 0.25 ——%
Traffic Engineering-Lead*0.10 0.10 0.05 —(0.05)(100.0)%
Transportation Planning Manager ——0.05 0.05 ——%
Total Planning and Development Services 62.45 61.60 54.00 67.20 13.20 24.4%
Police
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate II 3.00 3.00 2.00 2.00 ——%
Animal Control Officer 3.00 3.00 2.00 2.00 ——%
Animal Control Officer-Lead 1.00 1.00 1.00 1.00 ——%
Assistant Police Chief 1.00 1.00 1.00 1.00 ——%
Business Analyst 1.20 1.20 1.20 2.20 1.00 83.3%
Code Enforcement Officer 1.00 1.00 1.00 1.00 ——%
Communications Manager 1.00 1.00 ————%
Communications Technician 1.00 1.00 ————%
Community Service Officer 7.50 7.50 5.63 5.63 ——%
Court Liaison Officer***1.00 1.00 1.00 2.00 1.00 100.0%
Crime Analyst 1.00 1.00 1.00 1.00 ——%
Deputy Director Technical Services Division*0.80 0.80 —0.80 0.80 —%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 ——%
Police Agent 19.00 19.00 19.00 19.00 ——%
Police Captain 2.00 2.00 2.00 2.00 ——%
Police Chief 1.00 1.00 1.00 1.00 ——%
Police Lieutenant 5.00 5.00 4.00 4.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 43 Packet Pg. 202 of 269
TABLE OF ORGANIZATION
9
Police Officer 50.00 50.00 39.00 43.00 4.00 10.3%
Police Records Specialist II 6.00 6.00 6.00 6.00 ——%
Police Records Specialist-Lead 1.00 1.00 1.00 1.00 ——%
Police Sergeant 14.00 14.00 14.00 14.00 ——%
Program Assistant II 1.00 1.00 1.00 1.00 ——%
Property Evidence Technician 2.00 2.00 2.00 2.00 ——%
Public Safety Communications Manager*1.00 1.00 —1.00 1.00 —%
Public Safety Dispatcher 16.00 16.00 12.00 14.00 2.00 16.7%
Public Safety Dispatcher-Lead 4.00 4.00 4.00 4.00 ——%
Public Safety Program Manager 2.00 2.00 1.00 1.00 ——%
Senior Management Analyst 1.00 1.00 1.00 1.00 ——%
Total Police 149.00 149.00 124.33 134.13 9.80 7.9%
Public Works
Administrative Assistant 1.00 1.00 0.50 0.50 ——%
Administrative Associate I 0.10 0.10 ————%
Administrative Associate II 2.65 2.65 2.65 2.65 ——%
Administrative Associate III 0.01 0.01 ————%
Assistant Director Public Works 0.73 0.73 0.73 0.73 ——%
Building/Planning Technician ———0.50 0.50 —%
Building Serviceperson-Lead 1.00 1.00 1.00 1.00 ——%
Cement Finisher 2.00 2.00 2.00 2.00 ——%
Cement Finisher-Lead 0.26 0.26 0.26 0.26 ——%
Coordinator Public Works Projects 1.50 1.50 1.50 1.50 ——%
Director Public Works/City Engineer 1.00 1.00 1.00 1.00 ——%
Electrician 0.80 0.80 0.80 0.80 ——%
Engineer 0.36 0.48 0.48 0.48 ——%
Engineering Technician III 1.47 1.75 1.75 1.75 ——%
Environmental Specialist*———0.33 0.33 —%
Equipment Operator 2.46 2.46 2.46 2.46 ——%
Facilities Carpenter 1.00 1.00 1.00 1.00 ——%
Facilities Maintenance-Lead 1.85 1.85 1.85 1.85 ——%
Facilities Painter 1.75 1.75 1.75 1.75 ——%
Facilities Technician 4.05 4.05 4.05 4.05 ——%
Heavy Equipment Operator 2.33 2.33 2.10 2.10 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 44 Packet Pg. 203 of 269
TABLE OF ORGANIZATION
10
Heavy Equipment Operator-Lead 0.85 0.85 0.85 0.85 ——%
Inspector, Field Services 0.11 0.11 0.11 0.11 ——%
Landscape Architect Park Planner 0.60 0.60 0.60 0.60 ——%
Management Analyst*0.70 1.45 1.45 0.70 (0.75)(51.7)%
Manager Environmental Control Program*———0.33 0.33 —%
Manager Facilities 0.90 0.90 0.90 0.90 ——%
Manager Maintenance Operations 1.20 1.20 1.20 1.20 ——%
Manager Urban Forestry 0.96 1.00 1.00 1.00 ——%
Manager Watershed Protection 0.05 0.05 0.05 0.05 ——%
Project Manager 2.65 2.65 2.00 2.50 0.50 25.0%
Senior Engineer 0.59 0.60 0.60 0.60 ——%
Senior Management Analyst 1.11 1.11 1.11 1.11 ——%
Supervisor Inspection and Surveying 0.10 0.10 0.10 0.10 ——%
Surveyor, Public Works 0.33 0.33 0.33 0.33 ——%
Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 ——%
Traffic Controller Maintainer II 2.00 2.00 1.00 1.00 ——%
Tree Maintenance Person 1.00 1.00 1.00 1.00 ——%
Tree Trim/Line Clear 7.00 7.00 7.00 7.00 ——%
Tree Trim/Line Clear-Lead 1.00 1.00 1.00 1.00 ——%
WGW Heavy Equipment Operator ——0.23 0.23 ——%
Total Public Works 49.41 50.61 48.35 49.26 0.91 1.9%
Total General Fund 574.93 574.43 506.80 557.06 50.26 9.9%
Enterprise Fund
Public Works
Account Specialist 0.30 0.30 ————%
Accountant 0.40 0.40 0.70 0.70 ——%
Administrative Associate I 0.10 0.10 —1.00 1.00 —%
Administrative Associate II 2.15 2.15 2.15 2.15 ——%
Administrative Associate III 0.10 0.10 0.20 0.20 ——%
Assistant Director Public Works 1.30 1.30 1.30 1.30 ——%
Assistant Manager WQCP 2.00 2.00 2.00 2.00 ——%
Associate Engineer 2.99 3.00 3.00 3.00 ——%
Chemist 3.00 3.00 2.00 2.00 ——%
Deputy Chief/Fire Marshal 0.07 0.07 0.07 —(0.07)(100.0)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 45 Packet Pg. 204 of 269
TABLE OF ORGANIZATION
11
Electrician 3.00 3.00 3.00 3.00 ——%
Electrician-Lead 2.00 2.00 2.00 2.00 ——%
Engineer 0.90 0.90 0.90 0.90 ——%
Engineering Technician III 0.25 0.25 0.25 0.25 ——%
Environmental Specialist*2.00 2.00 2.00 2.33 0.33 16.5%
Equipment Operator 0.54 0.54 0.54 0.54 ——%
Facilities Maintenance Lead 1.00 1.00 1.00 1.00 ——%
Facilities Technician 1.50 1.50 1.50 2.50 1.00 66.7%
Fire Marshal**———0.07 0.07 —%
Hazardous Materials Inspector 0.04 0.04 0.04 0.04 ——%
Heavy Equipment Operator 0.90 0.90 0.90 0.90 ——%
Heavy Equipment Operator-Lead 1.15 1.15 1.15 1.15 ——%
Industrial Waste Inspector 2.99 3.00 3.00 3.00 ——%
Industrial Waste Investigator 1.15 1.15 1.15 1.15 ——%
Laboratory Technician WQC 3.00 3.00 3.00 3.00 ——%
Landfill Technician 1.00 1.00 1.00 1.00 ——%
Management Analyst 2.30 2.30 2.30 2.30 ——%
Manager Airport 1.00 1.00 1.00 1.00 ——%
Manager Environmental Control Program*4.90 5.00 5.00 5.33 0.33 6.6%
Manager Laboratory Services 1.00 1.00 1.00 1.00 ——%
Manager Maintenance Operations 1.96 1.96 1.96 1.96 ——%
Manager Solid Waste 1.00 1.00 1.00 1.00 ——%
Manager Water Quality Control Plant 1.00 1.00 1.00 1.00 ——%
Manager Watershed Protection 0.95 0.95 0.95 0.95 ——%
Plant Mechanic 7.00 7.00 7.00 7.00 ——%
Program Assistant I 1.00 1.00 1.00 1.00 ——%
Program Assistant II 2.00 2.00 2.00 2.00 ——%
Project Engineer 1.83 1.83 1.83 1.83 ——%
Project Manager 1.35 1.35 1.35 1.35 ——%
Senior Accountant 0.30 0.30 0.30 0.30 ——%
Senior Buyer 1.00 1.00 1.00 1.00 ——%
Senior Chemist 1.00 1.00 2.00 2.00 ——%
Senior Engineer 3.76 3.76 3.76 3.76 ——%
Senior Industrial Waste Investigator 0.99 1.00 1.00 1.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 46 Packet Pg. 205 of 269
TABLE OF ORGANIZATION
12
Senior Management Analyst 0.21 0.21 0.21 0.21 ——%
Senior Mechanic 1.00 1.00 1.00 1.00 ——%
Senior Operator WQC 6.00 6.00 6.00 6.00 ——%
Senior Technologist 1.00 1.00 1.00 1.00 ——%
Storekeeper 1.00 1.00 1.00 1.00 ——%
Street Maintenance Assistant 1.00 1.00 1.00 1.00 ——%
Street Sweeper Operator 1.63 1.63 1.63 1.63 ——%
Supervisor WQCP Operations 3.00 3.00 3.00 3.00 ——%
Surveyor, Public Works 0.12 0.12 0.12 0.12 ——%
Technologist 1.00 1.00 1.00 1.00 ——%
Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 ——%
WQC Plant Operator II 16.00 16.00 16.00 16.00 ——%
Zero Waste Coordinator 1.00 1.00 1.00 1.00 ——%
Total Public Works 101.19 101.32 101.32 103.98 2.66 2.6%
Utilities
Account Specialist 1.70 1.70 1.00 1.00 ——%
Accountant 0.60 0.60 1.30 1.30 ——%
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Administrative Associate II 6.00 6.00 6.00 6.00 ——%
Assistant City Attorney*———1.00 1.00 —%
Assistant Director Administrative Services 0.25 0.25 0.25 0.25 ——%
Assistant Director Utilities Customer Support
Services
1.00 1.00 1.00 1.00 ——%
Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 ——%
Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 ——%
Assistant Director Utilities/Resource
Management
1.00 1.00 1.00 1.00 ——%
Associate Sustainability Program
Administrator**
———1.00 1.00 —%
Business Analyst 6.00 6.00 6.00 6.00 ——%
Cathodic Protection Technician Assistant 1.00 1.00 1.00 1.00 ——%
Cathodic Technician 1.00 1.00 1.00 1.00 ——%
Cement Finisher 2.00 2.00 2.00 2.00 ——%
Contracts Administrator 0.70 0.70 0.70 0.70 ——%
Coordinator Utilities Projects*6.00 6.00 6.00 8.00 2.00 33.3%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 47 Packet Pg. 206 of 269
TABLE OF ORGANIZATION
13
Customer Service Representative 7.00 7.00 7.00 7.00 ——%
Customer Service Specialist 2.00 2.00 2.00 2.00 ——%
Customer Service Specialist-Lead 2.00 2.00 2.00 2.00 ——%
Deputy Chief/Fire Marshal 0.08 0.08 0.08 —(0.08)(100.0)%
Deputy City Attorney*1.00 1.00 1.00 —(1.00)(100.0)%
Director Administrative Services/CFO 0.20 0.20 0.20 0.20 ——%
Electric Heavy Equipment Operator —2.00 2.00 1.00 (1.00)(50.0)%
Electric Project Engineer*4.00 4.00 4.00 8.00 4.00 100.0%
Electric Underground Inspector 2.00 2.00 2.00 2.00 ——%
Electric Underground Inspector-Lead 1.00 1.00 1.00 1.00 ——%
Electrical Equipment Technician 1.00 1.00 1.00 1.00 ——%
Electrician Assistant I 3.00 3.00 3.00 3.00 ——%
Engineer 4.00 4.00 4.00 4.00 ——%
Engineering Manager - Electric 1.00 1.00 1.00 1.00 ——%
Engineering Manager - WGW 1.00 1.00 1.00 1.00 ——%
Engineering Technician III 3.00 3.00 3.00 3.00 ——%
Environmental Specialist*———0.34 0.34 —%
Equipment Operator ———1.00 1.00 —%
Fire Marshal**———0.08 0.08 —%
Gas and Water Meter Measurement and
Control Technician
4.00 4.00 4.00 4.00 ——%
Gas and Water Meter Measurement and
Control Technician - Lead
1.00 1.00 1.00 1.00 ——%
Hazardous Materials Inspector 0.06 0.06 0.06 0.06 ——%
Heavy Equipment Operator 6.70 —————%
Heavy Equipment Operator - Install/Repair 4.00 4.00 4.00 4.00 ——%
Human Resources Representative ——1.00 1.00 ——%
Industrial Waste Investigator 0.50 0.50 0.50 0.50 ——%
Inspector, Field Services 5.00 5.00 ————%
Inspector, WGW Utilities Field Svc ——5.00 5.00 ——%
Lineperson/Cable Specialist 11.00 10.00 10.00 10.00 ——%
Lineperson/Cable Specialist-Lead 4.00 4.00 4.00 4.00 ——%
Maintenance Mechanic-Welding 2.00 2.00 2.00 2.00 ——%
Management Analyst**———1.00 1.00 —%
Manager Communications 1.00 1.00 1.00 1.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 48 Packet Pg. 207 of 269
TABLE OF ORGANIZATION
14
Manager Customer Service 1.00 1.00 1.00 1.00 ——%
Manager Electric Operations 1.00 1.00 1.00 1.00 ——%
Manager Environmental Control Program*———0.34 0.34 —%
Manager Treasury, Debt & Investments 0.40 0.40 0.40 0.40 ——%
Manager Utilities Compliance 1.00 1.00 1.00 1.00 ——%
Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 ——%
Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 ——%
Manager Utilities Program Services*1.00 1.00 1.00 2.00 1.00 100.0%
Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 ——%
Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 ——%
Meter Reader 6.00 6.00 6.00 6.00 ——%
Meter Reader-Lead 1.00 1.00 1.00 1.00 ——%
Metering Technician*3.00 3.00 3.00 2.00 (1.00)(33.3)%
Metering Technician-Lead 1.00 1.00 1.00 1.00 ——%
Offset Equipment Operator 0.48 0.48 0.48 0.48 ——%
Overhead Underground Troubleman 2.00 2.00 2.00 2.00 ——%
Power Engineer*1.00 1.00 1.00 —(1.00)(100.0)%
Principal Business Analyst 1.00 1.00 1.00 1.00 ——%
Principal Utilities Program Manager**———1.00 1.00 —%
Program Assistant I 1.50 1.50 1.50 1.50 ——%
Program Assistant II 1.00 1.00 1.00 —(1.00)(100.0)%
Project Engineer 5.00 5.00 5.00 5.00 ——%
Project Manager 0.75 0.75 0.75 0.75 ——%
Resource Planner 5.00 5.00 5.00 5.00 ——%
Restoration Lead 1.00 1.00 1.00 1.00 ——%
SCADA Technologist 2.00 2.00 2.00 —(2.00)(100.0)%
Senior Accountant 0.70 0.70 0.70 0.70 ——%
Senior Business Analyst 3.00 3.00 3.00 3.00 ——%
Senior Electrical Engineer 4.00 4.00 5.00 5.00 ——%
Senior Engineer*5.00 5.00 5.00 6.00 1.00 20.0%
Senior Management Analyst 0.70 0.70 0.70 0.70 ——%
Senior Mechanic 1.00 1.00 1.00 1.00 ——%
Senior Performance Auditor 1.00 1.00 ————%
Senior Resource Planner 6.50 6.50 6.50 7.00 0.50 7.7%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 49 Packet Pg. 208 of 269
TABLE OF ORGANIZATION
15
Senior Utilities Field Service Representative 1.00 1.00 1.00 1.00 ——%
Senior Water Systems Operator 2.00 2.00 2.00 2.00 ——%
Storekeeper 1.00 1.00 1.00 1.00 ——%
Storekeeper-Lead 0.80 0.80 0.80 0.80 ——%
Street Light, Traffic Signal & Fiber Technician 5.00 5.00 5.00 4.00 (1.00)(20.0)%
Street Light, Traffic Signal & Fiber-Lead 2.00 2.00 2.00 2.00 ——%
Substation Electrician 6.00 6.00 6.00 6.00 ——%
Substation Electrician-Lead 2.00 2.00 2.00 2.00 ——%
Supervising Electric Project Engineer 1.00 1.00 ————%
Sustainability Programs Administrator ——4.00 5.00 1.00 25.0%
Tree Maintenance Person 1.00 1.00 1.00 1.00 ——%
Utilities Chief Operating Officer 1.00 1.00 1.00 1.00 ——%
Utilities Compliance Technician 2.00 3.00 3.00 3.00 ——%
Utilities Compliance Technician-Lead 1.00 1.00 1.00 1.00 ——%
Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 ——%
Utilities Director 1.00 1.00 1.00 1.00 ——%
Utilities Engineer Estimator 5.00 5.00 5.00 5.00 ——%
Utilities Field Services Representative 5.00 5.00 5.00 5.00 ——%
Utilities Install Repair-Lead-Welding Certified 2.00 2.00 2.00 3.00 1.00 50.0%
Utilities Install Repair-Welding Certified 3.00 3.00 3.00 3.00 ——%
Utilities Install/Repair 10.00 10.00 10.00 10.00 ——%
Utilities Install/Repair Assistant 1.00 1.00 1.00 1.00 ——%
Utilities Install/Repair-Lead 5.00 5.00 5.00 4.00 (1.00)(20.0)%
Utilities Key Account Representative 3.00 3.00 3.00 3.00 ——%
Utilities Locator 3.00 3.00 3.00 3.00 ——%
Utilities Marketing Program Administrator 4.00 4.00 ————%
Utilities Safety Officer 1.00 1.00 1.00 1.00 ——%
Utilities Supervisor 12.00 12.00 12.00 12.00 ——%
Utilities System Analyst**———2.00 2.00 —%
Utilities System Operator 5.00 5.00 5.00 6.00 1.00 20.0%
Utility Engineering Estimator - Lead 1.00 1.00 1.00 1.00 ——%
Warehouse Supervisor 0.80 0.80 0.80 0.80 ——%
Water System Operator II 4.00 4.00 4.00 4.00 ——%
WGW Heavy Equipment Operator —4.70 4.70 4.70 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 50 Packet Pg. 209 of 269
TABLE OF ORGANIZATION
16
Total Utilities 257.42 257.42 257.42 267.60 10.18 4.0%
Total Enterprise Fund 358.61 358.74 358.74 371.58 12.84 3.6%
Other Funds
Capital Project Fund
Administrative Assistant 0.15 0.15 0.65 0.65 ——%
Administrative Associate I 0.80 0.80 ————%
Administrative Associate III 0.89 0.89 0.80 0.80 ——%
Assistant Director Public Works 0.72 0.72 0.72 0.72 ——%
Associate Engineer 2.49 2.50 1.65 1.65 ——%
Associate Planner 0.30 0.30 0.35 0.35 ——%
Building Serviceperson 0.75 1.00 1.00 1.00 ——%
Building Serviceperson-Lead 1.40 1.40 1.40 1.40 ——%
Cement Finisher-Lead 0.74 0.74 0.74 0.74 ——%
Chief Transportation Official 0.30 0.30 0.30 0.30 ——%
Contracts Administrator 0.60 0.60 0.60 0.60 ——%
Coordinator Public Works Projects 1.30 1.30 1.30 1.30 ——%
Coordinator Transportation Systems
Management
0.75 0.75 1.35 1.35 ——%
Engineer 3.10 3.10 2.10 3.10 1.00 47.6%
Engineering Technician III 0.50 0.50 0.50 0.50 ——%
Facilities Technician 1.50 1.50 1.50 1.50 ——%
Inspector, Field Services 1.21 1.21 1.21 1.21 ——%
Landscape Architect Park Planner 0.90 0.90 0.90 0.90 ——%
Management Analyst***0.94 0.95 0.95 0.80 (0.15)(15.8)%
Manager Facilities 0.10 0.10 0.10 0.10 ——%
Manager Maintenance Operations 0.65 0.65 0.65 0.65 ——%
Parking Operations-Lead 0.40 0.40 0.30 0.30 ——%
Project Engineer 7.59 7.62 7.92 7.92 ——%
Project Manager 1.15 1.15 0.80 0.80 ——%
Senior Engineer*2.99 4.04 4.04 4.64 0.60 14.9%
Senior Management Analyst***0.60 0.60 0.60 0.75 0.15 25.0%
Senior Planner 0.50 0.50 0.80 0.80 ——%
Senior Project Manager 1.00 —————%
Supervisor Inspection and Surveying 0.63 0.65 0.65 0.65 ——%
Surveyor, Public Works 0.55 0.55 0.55 0.55 ——%
Traffic Engineering-Lead*0.55 0.55 0.60 —(0.60)(100.0)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 51 Packet Pg. 210 of 269
TABLE OF ORGANIZATION
17
Transportation Planning Manager 0.35 0.35 0.45 0.45 ——%
Total Capital Project Fund 36.40 36.77 35.48 36.48 1.00 2.8%
Printing and Mailing Services
Manager Revenue Collections 0.10 0.10 0.10 0.10 ——%
Offset Equipment Operator 1.52 1.52 1.52 1.52 ——%
Total Printing and Mailing Services 1.62 1.62 1.62 1.62 ——%
Special Revenue Funds
Account Specialist 1.87 1.87 1.37 1.37 ——%
Account Specialist-Lead 0.55 0.55 0.55 0.55 ——%
Administrative Assistant 0.35 0.35 0.25 0.25 ——%
Administrative Associate II 0.20 0.20 0.20 0.20 ——%
Associate Planner 0.25 0.25 ————%
Community Service Officer 0.50 0.50 0.37 0.37 ——%
Coordinator Public Works Projects 0.20 0.20 0.20 0.20 ——%
Electrician 0.20 0.20 0.20 0.20 ——%
Facilities Maintenance-Lead 0.15 0.15 0.15 0.15 ——%
Facilities Painter 0.25 0.25 0.25 0.25 ——%
Facilities Technician 0.45 0.45 0.45 0.45 ——%
Management Analyst***0.35 0.35 0.35 —(0.35)(100.0)%
Manager Community Services Senior Program 1.00 1.00 1.00 1.00 ——%
Manager Maintenance Operations 0.19 0.19 0.19 0.19 ——%
Manager Revenue Collections 0.28 0.28 0.28 0.28 ——%
Parking Operations-Lead 0.60 0.60 0.65 0.65 ——%
Senior Management Analyst***———0.35 0.35 —%
Senior Planner 0.40 0.40 0.40 0.40 ——%
Street Maintenance Assistant 2.00 2.00 2.00 2.00 ——%
Street Sweeper Operator 0.37 0.37 0.37 0.37 ——%
Transportation Planning Manager 0.50 0.50 0.50 0.50 ——%
Total Special Revenue Funds 10.66 10.66 9.73 9.73 ——%
Technology Fund
Administrative Assistant 1.00 1.00 1.00 1.00 ——%
Assistant Director Administrative Services 0.10 0.10 0.10 0.10 ——%
Business Analyst 1.00 1.00 1.00 1.00 ——%
Desktop Technician 6.00 6.00 6.00 6.00 ——%
Director Information Technology/CIO 1.00 1.00 1.00 1.00 ——%
Manager Information Technology 3.00 3.00 3.00 3.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 52 Packet Pg. 211 of 269
Manager Information Technology Security 1.00 1.00 ————%
Principal Business Analyst 1.00 1.00 ————%
Senior Business Analyst 2.00 2.00 2.00 2.00 ——%
Senior Management Analyst 1.00 1.00 1.00 1.00 ——%
Senior Technologist*,***18.00 18.00 14.00 17.00 3.00 21.4%
Technologist 1.00 1.00 ————%
Total Technology Fund 36.10 36.10 29.10 32.10 3.00 10.3%
Vehicle Replacement and Maintenance Fund
Assistant Director Public Works 0.25 0.25 0.25 0.25 ——%
Assistant Fleet Manager 1.00 1.00 1.00 1.00 ——%
Equipment Maintenance Service Person 2.00 2.00 1.00 1.00 ——%
Fleet Services Coordinator 1.00 1.00 1.00 1.00 ——%
Management Analyst 0.20 0.20 0.20 0.20 ——%
Management Assistant 1.00 1.00 1.00 1.00 ——%
Manager Fleet 1.00 1.00 1.00 1.00 ——%
Motor Equipment Mechanic II 6.00 6.00 5.00 5.00 ——%
Motor Equipment Mechanic-Lead 2.00 2.00 2.00 2.00 ——%
Project Manager 1.00 1.00 1.00 1.00 ——%
Senior Management Analyst 0.08 0.08 0.08 0.08 ——%
Total Vehicle Replacement and
Maintenance Fund
15.53 15.53 13.53 13.53 ——%
Workers' Compensation Program Fund
Senior Human Resources Administrator 1.00 1.00 1.00 1.00 ——%
Total Workers’ Compensation Program
Fund
1.00 1.00 1.00 1.00 ——%
Total Other Funds 101.31 101.68 90.46 94.46 4.00 4.4%
Total Citywide Positions 1,034.85 1,034.85 956.00 1,023.10 67.10 7.0%
*The FY 2022 Adopted Budget does not include City Council actions to amend staffing levels approved in the Preliminary Q1 FY 2022
Financial Status Update (CMR 13439), Staffing for Adequate Fire and Emergency Response (SAFER) Grant Acceptance (CMR 13643),
and FY 2022 Mid-Year Budget Review (CMR 13801). These positions appear as a base adjustment in the FY 2023 Amended Budget.
**The FY 2023 Amended Budget includes new job classifications that require completion of appropriate review and potential discussions
with bargaining groups. Proposals in this budget include estimated funding levels for financial planning purposes only and do not reflect
the final terms of the proposed classifications.
***Indicates position adjustments subsequent to the adoption of the FY 2023 budget.
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Item 8
Attachment B - Amended
FY 2023 Table of
Organization
Item 8: Staff Report Pg. 53 Packet Pg. 212 of 269
Attachment C
Attachment C – Page 1 of 7
Preliminary FY 2023 2nd Quarter Financial Status
General Fund
Overall, the General Fund is tracking closely to adopted estimated revenues and at or below
adopted expenses. Positive revenue trends continue to persist in the second quarter, with overall
revenues exceeding the same period in the prior year. Although the City has experienced positive
economic trends in recent periods, staff remains cautious to mixed economic indicators of
potential recession. Though data continues to be uncertain, staff believe that these
recommended adjustments are measured and align more closely with the current financial
outlook.
General Fund: Revenues:
The FY 2023 Adopted Operating Budget approved a $215.2 million estimate for revenue sources
(excluding Operating Transfers-in), of which $90.9 million has been collected to date, or 42% of
the budgeted estimate. The overall tax revenue estimates in the FY 2023 Adopted Budget are
higher than FY 2022 Adopted Budget levels by $23 million, from approximately $110 million to
$133 million. Adjustments to realign revenue estimates such as increasing estimates for Property
Tax, Sales Tax receipts, and Transient Occupancy Tax receipts were adopted in FY 2023 to align
with a recovering economy. Highlights of current data on major revenue sources are included
below. Overall, staff is optimistic that revenues will exceed FY 2023 Adopted Budget levels and
adjustments are included in this report to align with the higher estimates.
Table 2
Property Tax
The FY 2023 Adopted Budget is $59.8 million, a $6.5 million or 16.7% increase from the FY 2022
adjusted budgeted level of $53.2 million. Property Tax receipts of $59.4 million were received in
% change FY 2023 %FY 2022 %
Property Tax 7.8%$59,770 32.6%$51,228 35.3%
Sales Tax 23.1%32,580 35.8%28,184 33.7%
Charges for Services 27.1%30,786 49.1%24,515 48.5%
Transient Occupancy Tax 95.9%18,199 53.9%8,428 59.4%
Utility User Tax 10.3%15,579 51.4%14,370 50.5%
Permits and Licenses 3.4%9,794 31.9%8,273 36.5%
Documentary Transfer Tax -46.5%7,217 34.1%7,137 64.6%
All Other Revenue Sources -4.1%41,851 50.7%42,434 52.1%
Total Revenue 11.6%$215,776 42.1%$184,569 44.1%$90,887 $81,454
3,121 3,019
2,464 4,608
21,204 22,103
15,105 11,885
9,809 5,008
8,011 7,261
$19,499 $18,085
11,674 9,485
2nd Quarter Actuals Adjusted Budget
FY 2023 FY 2022
General Fund Revenue
FY 2023 2nd Quarter
(000's)
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Attachment C
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FY 2022 due to higher than anticipated assessed value growth and payment of disputed excess
Educational Revenue Augmentation Fund (ERAF) distributions ($1.7 million) contributed to these
increased receipts. Consistent with the County of Santa Clara Assessor’s Office, revenues are
expected to meet or exceed FY 2023 budget levels due to higher than conservatively budgeted
revenues. In November 2021, the County of Santa Clara notified the cities that the California
School Boards Association and its Education Legal Alliance filed a lawsuit against the Controller
of the State of California arguing that the settlement reached with the counties in the excess
ERAF calculation methodology is unlawful. The County estimates that 20% to 25% of excess ERAF
in FY 2022, FY 2023, and beyond are at risk due to this litigation. The FY 2022 disputed amount
that has been received has been reserved and the FY 2023 adopted budget excludes this amount
($1.5 million). The FY 2023 adopted budget is anticipated to be higher, therefore staff is
recommending increasing this budget by $0.5 million in this report.
Sales Tax
The FY 2023 Adopted Budget is $32.6 million, an assumed growth of 15.6% from the FY 2022
adjusted budgeted of $28.2 million. Actual Sales Tax receipts of $32.7 million in FY 2022 were
above year end estimated levels; however, overall receipts remained 10.4% below pre-
pandemic actuals of $36.5 million in FY 2019.
Sale Tax for the first six months of FY 2023 is 23.1% higher than the same period of the prior year.
During this period, business sectors with strong growth where apparel, department, and
furniture/appliance stores, restaurants, food markets, auto parts/repair, service stations, health,
and auto leasing. Higher prices due to the elevated inflation contributed to their sales tax
performance. Sectors that didn’t do as well include auto sales, office and electronic equipment,
drug stores, recreation products, and business services. Should the federal reserve achieve its
goal of further taming inflation, sales tax receipts are anticipated to be negatively impacted. As
a result, staff is forecasting a little over 10% decrease for the remainder of FY 2023 due to the
expected slowdown in the economic growth in the latter half of FY 2023. Even with the
anticipated economic slowdown, Sales Tax is anticipated to generate more than the
conservatively budgeted amount in FY 2023, therefore staff recommends increasing the budget
by $1.5 million in this report.
Transient Occupancy Tax (TOT)
The FY 2023 Adopted Budget assumed an estimate of $18.2 million, a 6.9% increase from FY 2022
actual receipts of $16.9 million or $ 1.3 million above. FY 2022 actual receipts were higher than
adopted budget levels of $8.4 million by $8.5 million but remained significantly lower than pre-
pandemic actuals of $25.7 million in FY 2019. Current receipts indicate that this revenue category
continues to have significant growth from the unprecedented lows seen during the pandemic.
TOT is anticipated to generate more than the budgeted 18.2 million in FY 2023 and staff
recommends increasing the budget by $4.0 million in this report.
Transient Occupancy Tax for the first six months of FY 2023 is 95.9% higher than the same period
of the prior year. For this period, the average occupancy rate is 73.2% (prior year it was 59.7%)
Item 8
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Quarter Financial Status
Item 8: Staff Report Pg. 55 Packet Pg. 214 of 269
Attachment C
Attachment C – Page 3 of 7
and the average room rate is $270 (prior year it was $180). Staff is conservatively forecasting a
10% increase over the prior year for the remainder of FY 2023.
Charges for Services & Permits and Licenses
The FY 2023 Adopted Budget assumed an estimate of $30.8 million in Charges for Services, a
$6.3 million or 25.6% increase from FY 2022 adjusted levels. The FY 2023 Adopted Budget
assumed an estimate of $9.8 million in permit and license revenue, a $1.5 million or 18.4%
increase from the FY 2022 adjusted level. Together, these revenue categories make up nearly
half of all non-tax revenues. In total, $37.7 million was received during FY 2022, above the
revised budget estimates by $4.5 million. These revenue categories consist of charges to
Stanford for fire services and paramedic services, fees related to the City’s golf course, arts and
science classes, plan check fees, and payments to the City for issuance of Building Permits, Fire
Permits, and miscellaneous health and safety-related licenses. Several adjustments to revenue
in Charges for Service are recommended in this report; however, overall revenues in these
categories are in line with activity levels anticipated thus far.
•Community Services (CSD): The demand for CSD programming remains at elevated levels.
Total departmental revenue through the end of the second quarter is approximately $5.8
million or 46% of the FY 2023 total budgeted revenue. At this same time last year, CSD’s
total revenue was tracking at 41% of FY 2022 budgeted revenue levels through the second
quarter. CSD is recommending adjustments to several programs with high demand. Due
to the popularity of ceramics classes, the Public Art Studio has requested a strategic
reorganization that is anticipated to increase the number of classes while being cost-
neutral. As tennis programs have increased in popularity, the department has amended
the contract in FY 2023 to accommodate additional classes. As part of the FY 2024 budget,
the department is also exploring increasing subsidies for low-income youth (17 & under),
seniors (60+), and/or disabled adult residents. The current policy allows a 25 percent or
50 percent fee discount through the Fee Reduction Program up to $300 annually. Income
eligibility is determined using the Community Development Block Grant (CDBG) Low-
Income Guidelines.
•Golf Course: Golf revenue continues to perform well in the first and second quarters of
FY 2023 but is down roughly 5% from this time last year. This could be attributed to
several weeks of heavy rains which would deter play both at the course and the driving
range. Revenue guidance is recommended to remain at its current budgeted level due to
the unpredictability of winter storms in the coming months. The proposed FY 2024 budget
will reassess golf revenue and expenditures based on additional information from third-
quarter results. In addition, the division is working with purchasing to draft a contract to
study the feasibility of adding a second story to the driving range with the additional
potential revenue as an element of the study. Once completed, those projections will be
included as a part of future revenue estimates if that potential project moves forward.
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Attachment C
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•Junior Museum & Zoo (JMZ): Through the first two quarters of FY 2023, revenue is roughly
at 35% of budgeted levels (approximately $0.9 million in actual revenue vs. $2.5 million
in budgeted revenue). FY 2023 revenues should easily exceed the FY 2022 total of $1.48
million, however, FY 2023 represents the first full year of operations, as the JMZ opened
its doors in October 2021. Memberships remain the best-performing revenue category
(60% of FY 23 target), while facilities rentals are the lowest performing (19% of FY 23
target), reflecting similar trends as the prior year.
Staff has requested funding for a comprehensive operational analysis of the newly
opened Palo Alto Junior Museum and Zoo and to prepare a business plan to inform
ongoing operational and budgetary decisions as a part of Mid-Year recommendations
($50,000). The study will examine financial, operational, and programmatic status and
make recommendations for future operations to include ticket and membership prices,
and how pricing will impact consumer demand. Once the study is completed, staff will
review the results and present recommendations for financial and operational efficiencies
to Council. In addition, Staff is currently working with purchasing for a new reservation
and ticketing platform for the JMZ. Funding this technology initiative was a part of the
Community Services Department FY 2023 Adopted Operating Budget ($50,000).
•Development Services: Preliminary FY 2023 Development Services revenue is up 42.0%
compared to last year and is currently at 54.7% of the FY 2023 revenue target. This is
mainly driven by increased permit activity in the last quarter of 2022 due to a code change
year. Department-managed expenses are currently under or on pace to meet the budget.
The table below articulates Development Services revenues from January through
December from 2020 to 2022.
Table 3: Development Services Revenue – 2021 vs 2022
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Attachment C
Attachment C – Page 5 of 7
General Fund: Expenses
Overall General Fund expenses are currently expected to remain within the FY 2022 Adjusted
budget levels of $248.4 million. General Fund expenses (excluding operating transfers) for second
quarter are 11.2% higher than the prior year and are tracking at 38.0% of the Adjusted Budget
(excluding encumbrances). This is slightly lower than the percent expended through the second
quarter in FY 2022 and can be attributed to the continued vacancies across the City in particular
in the Community Services, Planning and Development Services, and Library Departments.
Table 4
Salaries and Benefits
As a service driven organization, the largest expenses are salaries and benefits. Preliminary salary
and benefits expenditures through December 2022 are approximately $71.3 million, or 48.1% of
the $148.4 million FY 2023 Adopted Budget, compared to $64.3 million in the same period in the
prior year. The City continues to maintain vacancies of approximately 154 positions, though this
changes frequently, which reflects approximately a 15.1% vacancy rate. When comparing staff
capacity to deliver services to the community beyond the authorized staffing levels, looking at
December 2021 to December 2022, the City has 30 more full-time employees, however staffing
is still approximately 8% below pre-pandemic benefitted employee (typically full-time) counts. If
looking at all employees, including part-time staffing from March 2020 (pre-pandemic) to
December 2022, the total number of City employees is down over 10%. Use of leaves2 also
impacts service capacity. Looking at the six-month period ending December 2022 versus that
same period in December 2021, use of leave is nearly identical year over year but represents a
23% increase as compared to December 2020.
This year the City is engaging in labor negotiations with various bargaining groups and
unrepresented management professionals to negotiate new agreements. Tentative agreements
Expenditures FY 2023 FY 2022 % change FY 2023 %FY 2022 %
Police 23,934$ 21,025$ 13.8%47,723$ 50.2%43,739$ 48.1%
Fire 20,420 18,289 11.7%41,479 49.2%36,446 50.2%
Community Services 13,379 13,262 0.9%34,690 38.6%32,508 40.8%
Public Works 9,264 7,844 18.1%22,764 40.7%20,124 39.0%
Planning and Development Services 8,916 7,691 15.9%26,426 33.7%20,447 37.6%
Library 4,272 4,073 4.9%10,524 40.6%9,011 45.2%
Administrative Services 4,705 4,263 10.4%10,107 46.6%9,401 45.3%
All Other Departments 9,609 8,522 12.8%54,672 17.6%38,926 21.9%
Total Expenses 94,499$ 84,969$ 11.22%248,385$ 38.0%210,602$40.3%
General Fund Expenses
FY 2023 2nd Quarter
(000's)
2nd Quarter Actuals Adjusted Budget
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Attachment C
Attachment C – Page 6 of 7
have been reached with MGMT, IAFF, and SEIU, and the remaining four labor groups (PAPOA,
PMA, FCA, UMPAPA) are pending. This report recognizes $2.6 million in estimated expense
increases commensurate with the status of economic proposals for all groups, including
compensation adjustments and other terms of employment. This expense increase is fully offset
in FY 2023 by the elimination of the Inflation and Salary Reserve ($900,000) set aside by the City
Council during the FY 2023 budget process in anticipation of these agreements, and department
vacancy savings ($1.7 million). Final agreements with the City’s remaining labor groups are
pending.
Public Safety Overtime
Table 5
As shown in Table 4 above, Police Department overtime is trending higher compared to FY 2022
due to a number of factors, including backfilling shifts due to vacancies, benefited leave or
industrial injuries and training a higher than usual volume of new hires. As of this writing, 7% of
positions are vacant, another 10% of staff are unavailable to work due to benefited leave or
industrial injury, and 13% of filled positions have new staff in training (in-house or at the police
academy). The Department is anticipating overtime to continue trending over FY 2022 with a
leveling off if the active hiring cycle continues to stay ahead of departures. For more information
on vacancy and overtime staffing, see Attachment D.
Fire Department overtime expenses are tracking lower compared to FY 2022. The Department
hired nine entry level fire fighters in February 2022 but continues to experience increased
turnover and employee injuries which create vacancies requiring backfill overtime. Seven sworn
Police and Fire
Salaries and Overtime Expense
FY 2023 2nd Quarter YTD
(000's)
FY 2023 FY 2022 % change FY 2023 %FY 2022 %
Inc (Dec)
Police - Salaries 9,148$ 8,192$ 12%20,026$ 46%17,586$ 47%
Police - Overtime 1,509 1,011 49%973 155%944 107%
Total Police 10,657 9,203 16%20,999 51%18,530 50%
Fire - Salaries 7,450 6,451 15%15,997 47%13,936 46%
Fire - Overtime 1,816 2,374 -24%2,124 85%1,931 123%
Total Fire 9,266 8,825 5%18,121 51%15,867 56%
Total Public Safety
Salaries & Overtime 19,923$ 18,028$ 11%39,120$ 51%34,397$ 52%
2nd Quarter YTD Actuals Adjusted Budget
Item 8
Attachment C -
Preliminary FY 2023 2nd
Quarter Financial Status
Item 8: Staff Report Pg. 59 Packet Pg. 218 of 269
Attachment C
Attachment C – Page 7 of 7
employees have voluntarily left the Department during FY 2023. A current job posting accepting
entry level firefighters is active, and those new recruits will begin an academy in April 2023. The
report includes an adjustment moving $1.5 million from salaries to overtime to help mitigate
impacts, as well as recognizing income and expense offsets for the shared staffing of Fire Station
8 with the Santa Clara County during the high fire risk season. Table 4 above does not show these
recommended adjustments; however, please see Attachment D for Fire Department overtime
information with these recommendations included.
Item 8
Attachment C -
Preliminary FY 2023 2nd
Quarter Financial Status
Item 8: Staff Report Pg. 60 Packet Pg. 219 of 269
Q2
2021 2022 2023
POLICE DEPARTMENT
Overtime Expense
Adopted Budget (A)$944,186 $944,186 $972,512
Modified Budget (B)944,186 1,244,186 972,512
Net Overtime Cost - see below 366,045 781,344 683,911
Variance to Budget 578,141 462,842 288,601
Overtime Net Cost
Actual Expense $1,431,959 $2,319,043 $1,508,997
Less Reimbursements
California OES/FEMA (Strike Teams)- - -
Stanford Communications 64,906 107,684 67,524
Utilities Communications Reimbursement 33,191 56,004 34,162
Local Agencies (C) 2,412 5,456 2,659
Police Service Fees 467,167 120,411 86,169
Total Reimbursements 567,676 289,556 190,514
Less Department Vacancies (A)498,238 1,248,143 634,572
Net Overtime Cost $366,045 $781,344 $683,911
Department Vacancies (number of days)1,494 3,903 2,322
Workers' Compensation Cases 14 11 8
Department Disabilities (number of days) 1,007 1,221 495
FIRE DEPARTMENT
Overtime Expense
Adopted Budget (D)$1,931,121 $1,931,121 $2,124,054
Modified Budget (E)2,971,460 2,703,621 3,800,642
Net Overtime Cost - see below 1,792,228 4,073,011 1,277,561
Variance to Budget 1,026,424 (1,369,390) 2,523,081
Overtime Net Cost
Actual Expense $2,840,968 $4,684,796 $1,907,675
Less Reimbursements
California OES/FEMA (Strike Teams) 887,531 - -
Total Reimbursements 887,531 - -
Less Department Vacancies (D)161,208 611,784 630,114
Net Overtime Cost $1,792,228 $4,073,011 $1,277,561
Department Vacancies (number of days)1,942 1,717 2,017
Workers' Compensation Cases 14 35 14
Department Disabilities (number of days) 387 947 367
NOTES:
(A)The FY 2023 Police Department budget was increased by 4.0 Police Officers, 1.0 Business Analyst, and 2.0 Public Safety Dispatcher.
(B)Police Department adopted budget has not been adjusted in FY 2023.
(C)Includes Animal Control Services contract with Los Altos and Los Altos Hills.
(D)The FY 2023 Fire Department budget was increased by 1.0 Deputy Chief, 0.20 40-Hour Captain, 3.0 Fire Fighter Trainee,
and 0.05 Fire Marshal
(E)Fire Department adopted budget actions at mid-year: $177,000 County Fire Station 8 overtime reimbursement
and $1.5M salary savings transfer to overtime salaries.
Attachment D
Public Safety Departments
Overtime Analysis for Fiscal Years 2021 through 2023
Attachment D - 1
Item 8
Attachment D - Public
Safety Overtime Analysis
Item 8: Staff Report Pg. 61 Packet Pg. 220 of 269
Attachment E
Attachment E - 1
Summary of Financial Status Reports in FY 2023
A list of prior staff reports providing various fiscal updates for Council deliberations are below.
However, this does not include informational items that have been distributed for quarterly
reporting, such as the Investment Activity Reports.
September 20, 2022, Finance Committee (CMR 14628):
Accept CalPERS Pension Annual Valuation as of June 30, 2021
October 18, 2022, Finance Committee (CMR 14829):
Review Pension and Other Post-Employment (OPEB) (Retiree Healthcare) Trust Funds with
Plan Providers
November 29, 2022, Finance Committee (CMR 14632):
Recommendation to the City Council to Approve the Fiscal Year (FY) 2022 Annual
Comprehensive Financial Report (ACFR) and FY 2022 Budget Amendments in Various Funds
December 6, 2022, Finance Committee (CMR 14748):
Review Revised Actuary Pension Analysis using Alternative Assumptions to CalPERS and
Review Potential Modifications to the Pension Funding Policy
December 6, 2022, Finance Committee (CMR 14630):
Review Q1 Fiscal Year (FY) 2023 Financial Status Report
December 6, 2022, Finance Committee (CMR 14629):
Review and Forward to the City Council the FY 2024 – FY 2033 Long Range Financial Forecast
(LRFF) and FY 2024 Budget Development Guidelines
January 23, 2022, City Council (CMR 2301-0715):
Approval of the FY 2022 Annual Comprehensive Financial Report (ACFR)
February 6, 2022, City Council (CMR 2212-0513):
Adopt Revised Retiree Benefit Funding Policy (Formerly “Pension Policy”) for the Financial
Planning of Employee Pension and Other Post-Employment (OPEB) (Retiree Healthcare)
Plans
February 6, 2022, City Council (CMR 2301-0753):
Accept the FY 2024 – FY 2033 Long Range Financial Forecast (LRFF) and FY 2024 Budget
Development Guidelines
Item 8
Attachment E - Summary
of Financial Status
Reports in FY 2023 [for
reference only]
Item 8: Staff Report Pg. 62 Packet Pg. 221 of 269
Item No. 9. Staff Report Page 1 of 2
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: ACTION ITEM
Lead Department: City Manager
Meeting Date: February 13, 2023
TITLE
Discussion and Possible Direction on 2023 Standing Committee Topics and Prospective Referrals
(Continued item 2C Discussion and Possible Revision to 2023 Standing Committee Topics on
January 28, 2023)
RECOMMENDATION
Staff recommends that the City Council discuss and receive the 2023 Standing Committee
Topics.
BACKGROUND/ANALYSIS
At the January 23, 2023 City Council Retreat, the Council unanimously made the following
motion:
MOTION: Motion by Council Member Burt and Seconded by Vice Mayor Stone to
agendize a discussion of prospective referrals to the Policy and Services, Finance
Committee and Boards and Commissions.
Note: Staff updated the Policy and Services Tentative Topics to correct an inadvertent omission
identified at the retreat.
This item is a continuation of item 2C. Discussion and Possible Revision to 2023 Standing
Committee Topics considered at the January 28, 2023 retreat. A separate item may be brought
forward for prospective referrals to Boards and Commissions or addressed through the annual
review of Boards and Commission workplans by the City Council.
The tentative topics and regularly scheduled work that the City Council Standing Committees of
Policy and Services and Finance expect for 2023 are included in attachments A and B. The
tentative workplans or calendars were created knowing that there will be referrals and other
topics that arise.
Work Plan Calendars for Finance Committee and Policy and Services Committee Standing
Committees Per the CPP, Section 2 – Council Meeting & Agenda Guidelines, Subsection 2.4,
Letter Y (of the existing CPP Handbook, not the proposed revised Handbook):
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The purpose and intent of committee meetings is to provide for more thorough and
detailed discussion and study of prospective or current Council agenda items with a full
and complete airing of all sentiments and expressions of opinion on city problems by
both the Council and the public, to the end that Council action will be expedited. Actions
of the committee shall be advisory recommendations only.
Referrals for discussion and action at the committee level are referred to Standing Committees
by Council action or City Manager (staff) and are made to only one committee (CPP, page 24).
The tentative schedules include regularly scheduled work, such as audit updates and budget
related reports, as well as any items that have been previously referred, with the date of the
referral.
These schedules were shared with the new Chairs, as appointed by the Mayor for 2023 for
information purposes given the timing of publishing.
FISCAL/RESOURCE IMPACT
Depending on the nature and extent of revisions sought, direction to revise standing committee
topics could involve substantial staff resources.
STAKEHOLDER ENGAGEMENT
These workplans may be amended as schedules adjust and or new issues arise. The newly
appointed Committee Chair’s Chair Burt (Finance Committee) and Chair Tanaka (Policy and
Services Committee) will be coordinated with on committee agenda planning moving forward.
ENVIRONMENTAL REVIEW
This is not considered a project and no environmental review is required.
ATTACHMENTS
Attachment A: Policy and Services Tentative Topics Calendar 2023 [revised 2.2.23]
Attachment B: Finance Committee Tentative Calendar Topics 2023
APPROVED BY:
Ed Shikada, City Manager
Report #: 2301-0804
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Item 9 Staff Report
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City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA. I www.cityofpaloalto.org – February 2023
POLICY & SERVICES TENTATIVE TOPICS
CALENDAR 2023
As of February 1, 2023
January
• Mayor appoints Committee and designates Chair; no Policy & Services Committee meeting
February
• Auditor Report [tentative]
March
• Update: Summary of Recent Race and Equity Work since late 2022
• Rental Registry Update (linked to Council Referral from Nov. 29, 2021: Renter Protections: Staff to
go to P&S with updated language in ordinance for a renter survey and estimates on effort to
enforce it for P&S discussion) [tentative]
April
• Auditor Report [tentative]
• Brief Update on the National Community Survey Plans
May
• Auditor Report [tentative]
• Report: Legislative Update
June
• Quarterly Audit Status Report
• Audit Report [tentative]
• Update: Summary of Recent Race and Equity Work since March
July
No meeting; Council break
August
• Quarterly Audit Status Report (April-June) [tentative]
• Procedures & Protocols Handbook Discussion (Annual Discussion)
• Council Referral from Nov. 29, 2021: Renter Protections: Fair chance ordinance to be reviewed by
P&S for analysis on consequences/unintended consequences
Item 9
Attachment A- Policy and
Services Tentative 2023
Work Plan
Item 9: Staff Report Pg. 3 Packet Pg. 224 of 269
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA. I www.cityofpaloalto.org – February 2023
September
• Legislative Recap (what passed/didn’t pass)
• Referral from 2021: Council Referral – Affordable Housing Funding (from August 16, 2021 Council
Meeting)
October
• Quarterly Audit Status Report (July-Sept) [tentative]
• Audit Report [tentative]
• Quarterly Race and Equity Update: Summary of Recent Race and Equity Work
November
• Legislative Agenda and Guidelines (can also go in December)
• 2024 City Council Priorities Discussion (includes discussion on process)
December
• Informational: Report out on Status of Committee Referrals
Completed or Pending Referrals (status and date of referral):
1. Will follow Housing Element timing: Council Referral from Nov. 29, 2021: Renter Protections:
Bring back to P&S [a] proposal and discussion on expanding anti-gouging measure to address
loopholes
2. Review City Council Colleagues’ Memo Referring Policy Changes on Short Term Rentals (referral
from 2022)
3. COMPLETED: Council Referral from Feb. 5, 2022: Discussion of Council Values, Strategic
Priorities, etc.
4. COMPLETED (Committee work; now at City Council): Revise to the City Council Procedures and
Protocols Handbook
5. COMPLETED: Review of National Community Survey Questions with Policy and Services Chair
Item Pending Further City Council Direction:
• Continued Item from November 2021: City Council Referral: Policy and Services Committee to
Recommend Strategies to Support and Strengthen Neighborhood Programs, Identify Gaps in
Existing Neighborhood-based Services, and Evaluate new Strategies as Proposed in the Colleagues'
Memo Regarding a Proposed Program for Neighbor Connection
Item 9
Attachment A- Policy and
Services Tentative 2023
Work Plan
Item 9: Staff Report Pg. 4 Packet Pg. 225 of 269
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA. I www.cityofpaloalto.org
ATTACHMENT B
FINANCE COMMITTEE TENTATIVE TOPICS
CALENDAR 2023
Updated on January 13, 2023
January
•Mayor appoints Committee and designates Chair; usually no FC meeting
February
March
•Utilities Advisory Commission Rate Forecasts and Financial Plans: Gas, Electric, Water,
Wastewater
April
•Utilities Advisory Commission Rate Forecasts and Financial Plans: Gas, Electric, Water,
Wastewater
•Rate Schedule Storm Water Management Fee
•Rate Schedule Refuse Fees
May
•Annual Budget Review: Operating + Capital Five Year Plan
•daytime meetings, typically 5/9, 5/10, 5/15, 5/23
•Fiscal Year 2023 Municipal Fee Schedule
•Retiree Healthcare Plan and Annual Actuarially Determined Contributions (ADC)- Biannual
report, last done May 2022 (FY2022 and 2023 contributions), next scheduled May 2024
•Utilities Advisory Commission Rate Forecasts and Financial Plans: Gas, Electric, Water,
Wastewater
June
•Third Quarter Fiscal Year 2023 Financial Report
•Adoption of Fiscal Year 2023 Investment Policy (to be done by June 30 per code)
July
No meeting; Council Break
August
Item 9
Attachment B- Finance
Committee Tentative
Calendar Topics 2023
Item 9: Staff Report Pg. 5 Packet Pg. 226 of 269
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA. I www.cityofpaloalto.org
ATTACHMENT B
•Evaluation of Printing & Mailing Services levels and service delivery. Referred May 2019.
[tentative]
September/October
•Accept California Public Employees’ Retirement System (CalPERS) Pension Annual Valuation
Reports as of June 30, 2022
•Every 3-4-year review/decision on pension funding policy assumptions next review
scheduled for FY 2026.
•JMZ ticket pricing analysis to understand interactions between changes to $18 ticket,
attendance, and cost recovery. Referred September 2022; procurement process underway for
consultant, review expected calendar year 2023. [tentative]
November
•Discussion and Recommendation to the City Council to Accept the Macias Gini & O'Connell's
Audit of the City of Palo Alto's Financial Statements as of June 30, 2023 and Management
Letter
•Discussion and Recommendation to Approve the Fiscal Year (FY) 2023 Comprehensive
Annual Comprehensive Financial Report (ACFR) and Approve Budget Amendments in
Various Funds
December
•Review and Forward the FY 2024 - FY 2032 Long Range Financial Forecast
•First Quarter Fiscal Year 2024 Financial Report
•Informational: Report out on Status of Committee Referrals
Completed Referred Topics:
A full report on the status of Finance Committee referrals and the status can be found here1,
Item 1 on the December 5, 2022 agenda.
1)COMPLETED: FY 2021 Budget: A report or item on the Junior Museum and Zoo six months
after it opens and what it would look like to eliminate the General Fund Subsidy through a
fully cost recoverable program. Referred in June 2021, Reviewed September 2022.
2)PENDING: Planning and Development Services Fee Study. Staff initiated, study is on hold while
the Fire Prevention Program organizational study is completed.
3) PENDING: Parking Permits Pricing and Parking Permit Funds Financial Status. Staff initiated,
review is on hold while post pandemic trends are collected.
1 Finance Committee, December 6, 2022, Item #1, CMR #14906:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20221206/20221206pfcsm-late-packet.pdf
Item 9
Attachment B- Finance
Committee Tentative
Calendar Topics 2023
Item 9: Staff Report Pg. 6 Packet Pg. 227 of 269
Item No. 10. Page 1 of 9
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: February 13, 2023
TITLE
Investment Activity Report for the Second Quarter, Fiscal Year 2023
RECOMMENDATION
This is an informational report and no City Council action is required.
EXECUTIVE SUMMARY
The City’s Investment Policy1 (Policy) requires that staff report to Council quarterly on the City’s
portfolio composition and performance compared to the Council-adopted Policy; discuss overall
compliance with the City’s Investment Policy; and provide recommendations, if any, for Policy
changes. In addition, staff provides a detailed list of all securities and reports on the City’s ability
to meet expenditure requirements over the next six months. This report is to inform Council of
the City’s investment portfolio performance as of the second quarter ending December 31, 2022
and to disclose staff’s cash flow projections for the next six months. The portfolio details,
activities, and performance are discussed below, and additional information is provided in the
attachments.
During the second quarter staff complied with all aspects of the Investment Policy. Staff expect
that the City will have sufficient funds or liquidity to meet expenditure requirements for the next
six months.
ANALYSIS
The City’s investment portfolio is summarized in Graph 1 and detailed in the Investments by Fund
Report (Attachment B). The Investments by Fund Report groups the portfolio’s securities by
investment type and includes details of the investment issuer, date of maturity, current market
value, the book and face (par) value, and the weighted average maturity of each type of
investment and of the entire portfolio.
1 City of Palo Alto website, Administrative Services Department, Money Management & Treasury:
https://www.cityofpaloalto.org/files/assets/public/administrative-services/investment-policies/adopted-
investment-policy-2022-23.pdf
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The par value of the City’s portfolio is $579.3 million; in comparison, last quarter it was $536.3
million. The $43.0 million portfolio growth since the last quarter results from timing of cash flows
from the prepayment of the City’s Fiscal Year 2023 Unfunded Accrued Liability (UAL) pension cost
for active employees to the Public Employers’ Retirement System (PERS) totaling $43.1 million,
additional major revenue receipt due to seasonality timing, and one less pay period costs in the
second quarter comparted to the first quarter. By prepaying PERS instead of making payments
with each payroll period, the City expects savings of $1.5 million in PERS payments; however, this
savings will be partially offset by the loss of approximately $333 thousand in interest income in
the City’s portfolio. The net citywide savings of prepaying the UAL cost is $1.2 million. The saving
is a consequence of PERS’ ability to earn interest earlier and at a higher rate than the City’s
portfolio could realize. Without this prepayment, an additional $10.3 million in UAL payment
would have been made in the second quarter; this payment was made in first quarter’s
prepayment. As far as additional major revenue receipt due to seasonality timing, property taxes
and related receipts don’t begin until the second quarter and major revenues such as sales,
transient occupancy and utility user’s taxes are historically lower in the first quarter. For example,
second quarter property related (taxes and assessments) receipts was $19.7 million.
The portfolio consists of $30.7 million in liquid accounts and $548.6 million in various investment
types as detailed in the following Table 1. The Investment Policy requires that at least $50 million
be maintained in securities maturing in less than two years. The portfolio includes $102.6 million
in investments maturing in less than two years, comprising 17.7% of the City’s investment
portfolio. In addition, the Investment Policy allows up to 30% of the portfolio to be invested in
Item 10
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securities with maturities beyond five years; actual at the end of the second quarter is 29.3% of
the portfolio.
The current market value of the portfolio is 90.7% of the book value. The market value of
securities fluctuates, depending on how interest rates perform. When interest rates decrease,
the market value of the securities in the City’s portfolio will likely increase; likewise, when interest
rates increase, the market value of the securities will likely decrease. Understanding and showing
market values is not only a reporting requirement, but essential to knowing the principal risks in
actively buying and selling securities. It is important to note, however, that the City’s practice is
to buy and hold investments until they mature so changes in market price do not affect the City’s
investment principal. As a result, there is no risk of principal loss due to the declining market
value. The market valuation is provided by U.S. Bank, which is the City’s safekeeping agent. The
average life to maturity of the investment portfolio is 3.87 years compared to 4.02 years last
quarter.
The Investment Policy states “Should the ratio of the market value of the portfolio to the book
value of the portfolio fall below 95%, the Administrative Services Department will report this
fact to the City Council within a reasonable time frame and evaluate whether there is any risk of
holding any of the securities to maturity.” In the prior two quarters the market value fell below
95% to 93.5% in the fourth quarter of fiscal year 2022 (Staff Report 139982) and 89.7% in the
first quarter of fiscal year 2023 (Staff Report 140013). The market rate increased one
2 City Council, August 8, 2022 Item #9, CMR 13998: https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/city-council-agendas-minutes/2022/20220808/20220808pccsm-amended-rev-
final1.pdf#page=134
3 City Council, November 7, 2022 Item #13, CMR 14001:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20221107/20221107pccsm-amended-linked-q.a-2.pdf#page=188
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percentage point this quarter to 90.7% of book value. Interest rates on new investments have
begun to decrease so the market value of the portfolio is expected increase in the coming
quarters. To minimize risk of loss for investment principal due to lower market values, the
City’s investment practice is to buy and hold investments to maturity.
Investments Made During the Second Quarter
During the second quarter, $17.6 million of securities with an average yield of 2.3% matured.
During the same period, per the following Table 2, securities totaling $48.6 million with an
average yield of 4.8% were purchased. As expected, as interest rates rose on new investments,
the City’s portfolio’s average yield has begun to gradually rise. In the prior two fiscal years or
during the height of the COVID-19 economic closures, the portfolio’s interest rate had steadily
declined. The City’s short-term money market and pool account increased by $11.9 million
compared to the first quarter of Fiscal Year 2022. Staff continually monitors the City’s short-term
cash flow needs and adjusts liquid funds to meet them.
Availability of Funds for the Next Six Months
Normally, the flow of revenues from the City’s utility billings and General Fund sources is enough
to provide funds for ongoing expenditures in those respective funds. Projections indicate that
for the City’s cashflow, an overall growth in the portfolio of $23.0 million is expected over the
coming six months due to routine business activities. This reflects expected receipts of $353.4
million and expenditures of $330.4 million over the next six months.
As of December 31, 2022, the City had $30.7 million deposited in the Local Agency Investment
Fund (LAIF) and a money market account that could be withdrawn on a daily basis. In addition,
investments totaling $36.3 million will mature between January 1, 2023 and June 30, 2023. Based
on the above, staff expect that the City will have sufficient funds or liquidity to meet expenditure
requirements for the next six months.
Table 2:
Up to 1
Ye ar
1 to 2
Ye ars
2 to 3
Years
3 to 5
Years
Over
5 Ye ars
Portfolio
Total *
% of
Purchase
U.S. Treasury -$ 2.50$ -$ -$ -$ 2.50$ 5.1%
U.S. Agency Bonds 3.0 1.5 --1.5 6.0 12.3%
U.S. Municipal/ State Bonds -1.2 0.3 6.1 15.1 22.7 46.7%
Ne goti abl e Ce rtificate s of Deposits (NCD)2.3 3.0 1.2 1.7 0.2 8.4 17.3%
U.S. Corporate Bonds ---2.0 -2.0 4.1%
Supranational Organi zati ons Bonds ---7.0 -7.0 14.4%
Grand Total 5.3$ 8.2$ 1.5$ 16.8$ 16.8$ 48.6$ 100%
% of Purchase 10.9%16.9%3.1%34.5%34.6%100.0%
* $14.3 million or 29.4% are in investments that support Environmental, Social, and Governace (ESG) Activities
(a ka "Gr een", l oc a l ba nks , a nd Supra na ti ona l Bonds )
Investment Type
FY 2022 Q4 Securit y P urch ases - P ar Valu e (millions)
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Compliance with City Investment Policy
During the second quarter, staff complied with all aspects of the Investment Policy. Attachment
C lists the major restrictions in the City’s Investment Policy compared with the portfolio’s actual
performance.
Investment Yields
Interest income on an accrual basis for the second quarter was $2.6 million; $0.4 million higher
than the prior quarter due to new higher yielding investments in the portfolio. As of December
31, 2022, the yield to maturity of the City’s portfolio was 1.97%; in the prior quarter it was 1.66%.
In the second quarter, LAIF’s average yield was 1.98% while the average yield on the two-year
and five-year Treasury bonds was approximately 4.39% and 4.00%, respectively. In comparison,
in the prior quarter LAIF had 1.29% yield and the two-year and five-year Treasury bonds yields
were significantly lower at 3.38% and 3.23%.
Historically, the City’s portfolio yield has outperformed the two-year and five-year Treasury bond
rates and did so again several years ago; this is an expected occurrence during economic
downturns. However, during economic recovery periods, interest rates rise, and the City’s
portfolio yield is expected to be lower, which is the current financial environment. As the City’s
laddered portfolio investments mature in the next year or two, funds will continue to be
reinvested and trends will follow the economic patterns. Graph 2 shows the City’s yields and
interest earnings for the past 21 years.
City’s portfolio duration is 3.87 years.
5.88%
5.00%
4.17%
4.54%
City of Palo Alto
2.71%
1.80%1.93%1.66%
1.97%
1.41%
0.81%0.25%
2 Yr. Treasury
3.38%
4.39%4.43%4.39%
4.98%
1.10%
5-Yr. Treasury
2.88%
2.47%
0.27%
3.23%
4.00%
1.44%
5.25%
0.23%
L AIF
1.29%
1.98%
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
Int. Earnings (Millions)Yields
Fiscal Year Quarters
Graph 2: Yields and Interest Earnings
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Yield Trends
The Federal Open Market Committee (FOMC), since March 2020, has raised the federal funds
rate seven times totaling 4.25% with the first occurring on March 16, 2022. Prior to this the
rate was near zero. To mitigate the persistent elevated inflation rate from the peak of 9.1% in
June to a low 6.5% in December 2022 with a 2% target. The primary cause to declining inflation
rate is declining demand for goods, falling energy and transportation prices, and rapidly
improving global supply chains. However, inflation remains elevated for housing, services,
apparel, and food and beverages.
The expectation is FOMC will continue to do additional federal funds rate interest rate
increases in 2023 with the outlook the FOMC rate could reach low 5%. This is due to the
inflation rate failing to come down as quickly as the FOMC had hoped in the past few quarters.
Consistent with the prior three quarters, job growth remains “robust” and unemployment rate
remains low, however, FOMC’s high inflation rate concern also continues. In addition, FOMC
continue to state “Russia's war against Ukraine is causing tremendous human and economic
hardship. The war and related events are contributing to creating additional upward pressure
on inflation and are weighing on global economic activity.”
The following tables show the U.S. inflation and unemployment rates and the U.S. Gross
Domestic Product (GDP) past and recent trends.
Graph 3: U.S. Inflation Rate
The annual inflation rate in the US slowed for a sixth straight month to 6.5% in December of
2022, the lowest since October of 2021, in line with market forecasts but not in line with
FOMC’s goal.
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Graph 4: U.S. Unemployment Rate
The unemployment rate in the US dropped to 3.5% in December 2022, falling below market
expectations of 3.7% and matching the rates seen in September and July, which were the
lowest since February 2020.
Graph 5: U.S. Gross Domestic Product (GDP)
The Gross Domestic Product (GDP) in the United States expanded 1.90% in the third (calendar)
quarter of 2022 over the same quarter of the previous year.
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Funds Held by the City or Managed Under Contract
Attachment A is a consolidated report of all City investment funds, including those not held
directly in the investment portfolio. These include cash in the City’s regular bank account with
US Bank and Wells Fargo. A description of the City’s banking relationships can be found in Staff
Report 78584 and Staff Report 114025. The bond proceeds, reserves, and debt service payments
being held by the City’s fiscal agents are subject to the requirements of the underlying debt
indenture. The trustees for the bond funds are U.S. Bank and California Asset Management
Program (CAMP). Bond funds with U.S. Bank are invested in federal agency and money market
mutual funds that consist exclusively of U.S. Treasury securities. Bond funds in CAMP are invested
in banker’s acceptance notes, certificates of deposit, commercial paper, federal agency
securities, and repurchase agreements. The most recent data on funds held by the fiscal agent is
as of December 31, 2022.
In January 2017, the City established a Section 115 Irrevocable Trust (Public Agencies Post-
Employment Benefits Trust) administered by Public Agency Retirement Services (PARS). This
fund is not governed by the City’s Investment Policy; however, it is discussed in this report to
present the full picture of the City’s investments. It is the City’s intent to prefund pension costs
and began to address the Net Pension Liabilities (NPL) as calculated by Governmental Accounting
Standards Board Pronouncement No. 68 (GASB 68). The Section 115 Trust offered by PARS has
five portfolios from which to choose in making investments of City funds. The City has selected
the “Moderately Conservative” portfolio which is the second most conservative. Additional
information on this trust can be found in City Council Staff Report 75536. Through December 31,
2022, principal investment contributions of $43.3 million made over time since May 2017, has
slightly increased to $43.9 million or by $0.6 million and the net return for one and five years has
been -12.2% and 2.2% respectively. Calendar year 2022 has realized net earnings loss of $4.8
million which significantly offset the prior calendar years’ earning of $5.8 million for a net gain of
$1 million with the portfolio difference increase ($0.4 million) being the total administrative
expenses.
FISCAL/RESOURCE IMPACT
This is an information report.
4 City Council, April 11, 2017 Item under “Additional Information”:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2017/7858.pdf
5 City Council, September 21, 2020 Item #2: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/year-archive/2020-2/id-11402.pdf
6 City Council, January 23, 2017 Item #5: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-
reports/reports/city-manager-reports-cmrs/year-archive/2017/7553.pdf
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STAKEHOLDER ENGAGEMENT
Staff works internally and with external parties (e.g. U.S. Bank’s custodial, U.S. Bank’s bonds,
Wells Fargo and U.S. Bank’s banking, California Asset Management Program (CAMP), and Public
Agency Retirement Services (PARS)) statements to prepare this report.
ENVIRONMENTAL REVIEW
This Council informational report is not a project under California Environmental Quality Act
(CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in
either a direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS
Attachment A Consolidated Report of Cash Management
Attachment B Investment Portfolio
Attachment C Investment Policy Compliance
APPROVED BY:
Kiely Nose, Assistant City Manager
Report #: 2301-0865
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Book Value Market Value
City Investment Portfolio (see Attachment B)579,025,051$ 485,206,551$
Other Funds Held by the City
Cash with Wells Fargo Bank 1,412,380 1,412,380
(includes general and imprest accounts)
Cash with US Bank 3,896,619 3,896,619 ( g p )
Total - Other Funds Held By City 5,308,999 5,308,999
Funds Under Management of Third Party Trustees *
Debt Service Proceeds
US Bank Trust Services **
1999 Utility Revenue Bonds
Debt Service Fund 50 50
2009 Water Revenue Bonds (Build America Bonds)
Debt Service and Reserve Funds 2,454,794 2,454,794
2010 & 2013 General Obligation (Library) Bond
Debt Service and Escrow Funds 5,354,216 5,354,216
2011 Utility Revenue Refunding Bonds
Debt Service and Reserve Funds 714,698 714,698
2018 Capital Improvement (Golf Course & 2002B COP Refinance)
(Taxable- Green Bond) Certificates of Participation
Debt Service and Cost of Issuance Funds 319 319
2019 California Avenue Parking Garage Certificates of Participation
(Tax-Exempt and Taxable Bonds)
Construction and Cost of Issuance Funds 1,338 1,338
2021 Public Safety Building Certificates of Participation
Construction Debt Svc, Capitalized Interest, and Cost of Issuan 27,762,038 27,762,038
2022A & B General Obligation (Library) Bond
Cost of Issuance Funds 4,344 4,344
California Asset Management Program (CAMP) ***
2012 University Ave. Parking Refunding Bonds
Reserve Fund 2,753,378 2,753,378
2013 General Obligation (Library) Bond
Reserve Fund 254,866 254,866
Public Agencies Post-Employment Benefits Trust ****
Public Agency Retirement Services (PARS) 43,848,056 43,848,056
Total Under Trustee Management 83,148,097 83,148,097
GRAND TOTAL 667,482,147$ 573,663,647$
* These funds are subject to the requirements of the underlying debt indenture.
** U.S. Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities.
*** CAMP investments are in money market mutual fund which invest in bankers acceptance, certificate of deposit,
commercial paper, federal agency securities, and repurchase agreements.
**** PARS investments are in moderately conservative index plus funds
Attachment A
Second Quarter, Fiscal Year 2022-23
(Unaudited)
Consolidated Report of Cash Management
City of Palo Alto Cash and Investments
Item 10
Attachment A -
Consolidated Report of
Cash Management
Item 10: Staff Report Pg. 10 Packet Pg. 237 of 269
City of Palo Alto City of Palo Alto
Administration Svcs. Dept.
250 Hamilton Ave., 4th Floor
Palo Alto, CA 94301
(650)329-2362
December 31, 2022
Fund ALL - Portfolio Listings
Investments by Fund
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket ValueCUSIPInvestment # Issuer
Purchase
Date Book Value
YTM
360
YTM
365
LAIF & Fidelity Cash Accounts
Fidelity Investments158 17,963,406.15SYS158 14.14007/01/2020 17,963,406.15 4.083 4.14017,963,406.15
Local Agency Investment Fund159 12,783,258.42SYS159 12.29007/01/2020 12,537,320.83 2.258 2.29012,783,258.42
Subtotal and Average 30,746,664.57 30,746,664.57 30,500,726.98 3.325 3.371 1
Negotiable Certificates of Deposits
Affinity Plus Fed Credit Union2773 NCD 249,000.0000833AAB6 12/27/2023 3605.10012/27/2022 250,127.97 5.029 5.099249,000.00
Alliant Credit Union2781 NCD 249,000.0001882MAB8 12/30/2027 1,8244.95012/30/2022 252,886.89 4.884 4.952249,000.00
Alpine Bank1525 NCD 245,000.0002082CBG4 08/16/2023 2272.40002/16/2016 241,925.25 2.367 2.400245,000.00
Aneca Federal Credit Union2298 NCD 249,000.00034577AN6 03/20/2025 8091.10003/20/2020 230,628.78 1.085 1.100249,000.00
American State Bank OSCE1805 NCD 245,000.00029733BX9 05/30/2024 5152.30005/30/2017 237,201.65 2.270 2.301245,000.00
Austin Telco Fed. Credit Union2732 NCD 249,000.00052392CC9 11/27/2026 1,4265.05011/28/2022 253,130.91 4.984 5.053249,000.00
American Express Centurion Bk2729 NCD 249,000.0002589AEG3 11/16/2027 1,7805.00011/16/2022 253,312.68 4.931 5.000249,000.00
Banner Capital Bank2453 NCD 249,000.0006654HAA6 11/28/2025 1,0620.45011/27/2020 221,012.40 0.493 0.500248,638.15
Bank of Wisconsin Dells2455 NCD 249,000.00065847EH4 07/28/2025 9391.05011/23/2020 227,613.39 0.542 0.549252,161.31
Baxter Credit Union2730 NCD 249,000.0007181JAU8 11/23/2026 1,4225.00011/22/2022 252,677.73 4.940 5.009249,000.00
Beal Bank - Plano, TX2668 NCD 249,000.0007371AYT4 02/24/2027 1,5152.05003/02/2022 225,307.65 2.053 2.081248,689.09
Texas Exchange Bank2346 NCD 249,000.0088241THJ2 06/13/2025 8941.00006/02/2020 228,290.67 0.986 1.000249,000.00
Century Next Bank2074 NCD 245,000.00156634AY3 08/30/2024 6071.70008/30/2019 233,558.50 1.678 1.701245,000.00
BankUnited NA2474 NCD 249,000.00066519QC6 01/22/2026 1,1170.55001/22/2021 220,496.97 0.592 0.600248,619.20
Blue Foundry Bank2755 NCD 249,000.0009549TAB1 03/19/2024 4434.70012/19/2022 249,211.65 4.633 4.697249,000.00
BMO Harris Bank2480 NCD 249,000.0005600XBX7 10/27/2028 2,1261.00001/27/2021 203,425.53 1.019 1.034248,532.36
BMW Bank of North America2448 NCD 249,000.0005580AXU3 11/20/2025 1,0540.50011/20/2020 221,789.28 0.493 0.500249,000.00
Beal Bank USA - Las Vegas, NV2669 NCD 249,000.0007371CH69 02/24/2027 1,5152.05003/02/2022 225,307.65 2.053 2.081248,689.09
Citigroup1950 NCD 245,000.0017312QJ67 04/22/2023 1113.00004/24/2018 244,095.95245,000.00
California Credit Union2772 NCD 249,000.00130162AN0 12/27/2023 3605.00012/27/2022 249,873.99 4.931 5.000249,000.00
Encore Bank2343 NCD 249,000.0029260MBH7 05/21/2027 1,6011.15005/21/2020 214,951.74 1.134 1.150249,000.00
First Carolina Bank2389 NCD 248,000.0031944MBB0 08/20/2025 9620.45008/20/2020 222,537.84 0.444 0.450248,000.00
Celtic Bank2063 NCD 245,000.0015118RRH2 08/30/2024 6071.85008/30/2019 234,146.50 1.826 1.852245,000.00
Central State Bank IOWA2324 NCD 249,000.0015523RCP9 03/27/2025 8161.00003/27/2020 229,949.01 1.189 1.206247,887.27
Cinfed Fed Credtit Union Bank2504 NCD 249,000.0017248MAC1 03/04/2027 1,5230.65003/04/2021 211,752.09 0.691 0.701248,480.75
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Attachment BItem 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 11 Packet Pg. 238 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 2
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Negotiable Certificates of Deposits
Citadel Federal Credit Union2267 NCD 245,000.0017286TAG0 02/27/2025 7881.65002/27/2020 230,177.50 1.668 1.691244,788.66
Citizens State Bank1541 NCD 250,000.0017670BAQ1 02/17/2023 471.75002/19/2016 249,225.00 1.727 1.751250,000.00
Enerbank USA2215 NCD 245,000.0029278TMR8 01/29/2025 7591.80001/29/2020 231,407.40 1.779 1.803245,000.00
Connexus Credit Union2643 NCD 249,000.0020825WAR1 12/23/2026 1,4521.25012/23/2021 218,803.77 1.273 1.291248,604.00
Capital One Bank USA NA2089 NCD 245,000.0014042TCP0 09/05/2024 6131.90009/05/2019 234,369.45 1.873 1.900245,000.00
Capital One Bank USA NA2609 NCD 249,000.0014042RQB0 11/17/2026 1,4161.10011/17/2021 218,442.72 1.084 1.100249,000.00
Communitywide Fed. Cr. Union2756 NCD 249,000.0020416TAW2 06/21/2024 5375.00012/21/2022 250,352.07 4.935 5.004249,000.00
County Schools FCU2695 NCD 249,000.0022258JAB7 09/27/2027 1,7304.40009/30/2022 246,910.89 4.341 4.402249,000.00
Crescent Bank & Trust2296 NCD 248,000.00225645DN7 03/20/2025 8091.10003/20/2020 229,702.56 1.085 1.100248,000.00
Country Club Bank2477 NCD 249,000.00222327AD0 01/29/2030 2,5851.10001/29/2021 196,403.73 1.154 1.170247,825.07
Decorah Bank Trust Company2690 NCD 249,000.00243594AR9 09/23/2027 1,7263.70009/23/2022 239,769.57 3.651 3.701249,000.00
Delta Natl Bank & TR2670 NCD 249,000.0024773RCR4 02/25/2027 1,5162.00003/09/2022 224,824.59 1.975 2.003249,000.00
Discover Bank / Delaware1956 NCD 245,000.00254673VJ2 10/24/2023 2963.35010/24/2018 242,601.45 3.304 3.350245,000.00
The District Fed Cr Union2778 NCD 249,000.0088340AAA9 12/23/2024 7225.15012/22/2022 250,053.27 5.079 5.150249,000.00
Eagle Cmty Credit Union2770 NCD 249,000.0026948GAF1 12/26/2023 3595.00012/23/2022 249,886.44 4.932 5.000249,000.00
Eaglemark Savings Bank2545 NCD 249,000.0027004PBV4 07/07/2026 1,2830.85007/07/2021 219,092.61 0.919 0.932248,300.18
Eagle Bank2040 NCD 245,000.0027002YEL6 04/28/2023 1172.65004/30/2019 243,782.35 2.615 2.651245,000.00
Farmers & Merchant State Bank2486 NCD 249,000.00308682BM4 02/12/2029 2,2341.00002/12/2021 201,294.09 1.037 1.052248,238.51
Flagstar Bank FSB2414 NCD 249,000.0033847E4E4 09/30/2024 6380.40009/30/2020 231,570.00 0.394 0.400249,000.00
Poppy Bank2285 NCD 249,000.0073319FAF6 03/18/2025 8071.10003/18/2020 230,673.60 1.085 1.100249,000.00
First Federal S&L Bank1626 NCD 245,000.0032018YAW8 06/22/2023 1721.80006/22/2016 242,256.00 1.776 1.800245,000.00
1st Financial Bank2390 NCD 248,000.0032022RNT0 08/19/2025 9610.45008/19/2020 222,562.64 0.444 0.450248,000.00
First Farmers Bank & Trust2076 NCD 245,000.00320165JK0 09/04/2024 6121.75009/04/2019 233,683.45 1.727 1.751245,000.00
Farmers Insurance Group CU2479 NCD 249,000.0030960QAK3 01/27/2026 1,1220.50001/27/2021 219,914.31 0.543 0.550248,617.50
First Class Community CU2759 NCD 249,000.0031976UAA6 12/16/2024 7155.05012/16/2022 249,878.97 4.985 5.054249,000.00
First Oklahoma Bank2451 NCD 249,000.00335857CK2 11/30/2026 1,4290.65011/30/2020 213,900.96 0.691 0.701248,512.80
Farmers &Merchants Bank2644 NCD 249,000.00307811DM8 01/22/2030 2,5781.60001/14/2022 204,075.42 1.630 1.653248,123.66
First National Bank of America2465 NCD 249,000.0032110YRQ0 12/31/2026 1,4600.60012/31/2020 212,755.56 0.625 0.633248,668.15
FNB Bank Inc.1863 NCD 245,000.00330459CB2 10/13/2023 2852.25010/13/2017 240,612.05 2.220 2.251245,000.00
First Community Credit Union2554 NCD 249,000.0031986JAD3 02/26/2027 1,5170.85007/28/2021 213,793.89 0.892 0.905248,444.24
Firstier Bank2061 NCD 245,000.0033766LAJ7 08/23/2024 6001.95008/23/2019 234,653.65 1.925 1.952245,000.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 12 Packet Pg. 239 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 3
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Negotiable Certificates of Deposits
Gesa Credit Union2456 NCD 249,000.0037424PAC8 11/30/2027 1,7940.80011/30/2020 207,424.47 0.825 0.836248,563.08
Grant County Bank West V.2042 NCD 245,000.00387625AA4 05/08/2024 4932.55005/08/2019 238,326.20 2.513 2.548245,000.00
Greenwood Credit Union2725 NCD 249,000.00397129AJ6 05/28/2024 5134.95011/28/2022 250,118.01 4.877 4.945249,000.00
Goldman Sachs Bank USA / NY1951 NCD 245,000.0038148PJ81 05/09/2023 1283.15005/09/2018 244,091.05 3.106 3.150245,000.00
Haddon Savings Bank2447 NCD 207,000.00404730DA8 10/20/2025 1,0230.35011/16/2020 184,169.97 0.491 0.498205,940.61
Bank Hapoalim BM2457 NCD 249,000.0006251A2Q2 12/15/2025 1,0790.50012/14/2020 221,164.29 0.543 0.550248,632.36
Harborstone Credit Union2776 NCD 249,000.0041166MAF2 03/27/2024 4515.10012/27/2022 250,419.30 5.027 5.097249,000.00
IC Federal Credit Union2743 NCD 249,000.0044931EAD3 06/10/2024 5265.00012/09/2022 250,322.19 4.931 5.000249,000.00
INS Bank2757 NCD 249,000.0045776NFE1 12/14/2027 1,8084.90012/14/2022 249,744.51 4.835 4.902249,000.00
Interstate Credit Union2771 NCD 249,000.00460807AB6 12/26/2023 3595.00012/23/2022 249,886.44 4.932 5.000249,000.00
Inst. for Sav in Newburyport2556 NCD 249,000.0045780PAQ8 07/29/2026 1,3050.90007/29/2021 218,756.46 0.888 0.900249,000.00
Jonesboro State Bank2452 NCD 249,000.0048040PJL0 11/26/2027 1,7900.75011/27/2020 206,956.35 0.790 0.801248,389.44
Kansas State Bank Manhattan1798 NCD 245,000.0050116CAX7 05/31/2024 5162.50005/31/2017 237,860.70 2.465 2.500245,000.00
Kembra Financial Credit Union2731 NCD 249,000.0048836LAV4 11/25/2024 6945.15011/23/2022 249,931.26 5.083 5.154249,000.00
Knox TVA Empl Credit Union2140 NCD 248,000.00499724AF9 10/31/2023 3033.35010/24/2019 245,490.24 2.210 2.241250,180.61
Kern Schools Fed. Credit Unio2748 NCD 249,000.00920133AJ4 12/13/2024 7125.10012/14/2022 249,998.49 5.038 5.108249,000.00
Lakeside Bank1686 NCD 245,000.0051210SLR6 09/18/2023 2601.80009/16/2016 240,300.90 1.775 1.800245,000.00
Legacy Bank & Trust Company2469 NCD 249,000.0052470QAN4 12/21/2028 2,1810.85012/30/2020 200,300.58 0.889 0.901248,254.28
Liberty Federal Credit Union2741 NCD 249,000.0053052LAD1 12/05/2023 3385.00012/05/2022 249,878.97 4.931 5.000249,000.00
Live Oak Banking Company2599 NCD 249,000.00538036SS4 10/18/2027 1,7511.10010/18/2021 211,535.46 1.135 1.151248,403.01
Loyola Univ Demployee FCU2777 NCD 249,000.0054912KAD1 06/23/2023 1735.00012/23/2022 249,878.97 4.931 5.000249,000.00
Bank Leumi USA NY2335 NCD 249,000.00063248KR8 03/31/2023 891.45003/31/2020 247,339.17249,000.00
Malaga Bank FSB2402 NCD 249,000.0056102AAQ9 06/30/2025 9110.40008/31/2020 224,391.33 0.394 0.400249,000.00
Meritrust Federal Credit Union2672 NCD 249,000.0059001PAP4 03/10/2026 1,1640.55003/07/2022 221,746.95 1.904 1.930238,457.81
Medallion Bank - Salt Lake2010 NCD 245,000.0058404DDB4 01/03/2024 3673.30001/10/2019 241,773.35 3.254 3.299245,000.00
Merchants State Bank2059 NCD 245,000.00589227AG2 08/30/2024 6071.80008/30/2019 234,050.95 1.775 1.800245,000.00
Merrick Bank2610 NCD 249,000.0059013KPS9 05/19/2026 1,2341.10011/19/2021 221,851.53 1.152 1.168248,438.61
Minwest Bank MV2478 NCD 249,000.0060425SJQ3 01/29/2029 2,2201.00001/28/2021 201,513.21 1.024 1.039248,432.66
Maine Savings Credit Union2144 NCD 245,000.00560507AN5 11/08/2024 6771.90011/08/2019 233,217.95 1.875 1.902245,000.00
Mainstreet Bank2038 NCD 245,000.0056065GAG3 04/26/2024 4812.60004/26/2019 238,637.35 2.567 2.602245,000.00
Mountain America FD Credit Uni2719 NCD 249,000.0062384RAR7 05/09/2025 8594.85011/09/2022 250,439.22 4.825 4.892248,765.47
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 13 Packet Pg. 240 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 4
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Negotiable Certificates of Deposits
Morgan Stanley Bank NA1890 NCD 245,000.0061747MF63 01/11/2023 102.65001/11/2018 244,884.85 2.613 2.650245,000.00
Municipal Trust and Savings1800 NCD 245,000.00625925AP7 05/02/2024 4872.35005/22/2017 237,767.60 2.317 2.349245,000.00
New Brunswick Postal FCU2760 NCD 249,000.00642858AA2 12/15/2025 1,0795.00012/14/2022 250,177.77 4.931 5.000249,000.00
Numerica Credit Union1991 NCD 245,000.0067054NAN3 11/28/2023 3313.55011/28/2018 242,687.20 3.503 3.551245,000.00
Oklahomas Credit Union2751 NCD 249,000.0067886WAD9 12/16/2024 7155.00012/14/2022 249,893.91 4.938 5.006249,000.00
Oregon State Credit Union2765 NCD 249,000.0068609EAC5 03/21/2024 4455.05012/21/2022 250,252.47 4.978 5.047249,000.00
Ottawa Savings Bank1892 NCD 245,000.0068956HAC7 01/19/2023 182.40001/19/2018 244,781.95 2.368 2.401245,000.00
Pacific Western Bank2420 NCD 249,000.0069506YSA8 09/30/2025 1,0030.45009/30/2020 222,700.62 0.443 0.450249,000.00
Pathfinder Bank2429 NCD 249,000.0070320KAR2 10/14/2025 1,0170.50010/13/2020 222,426.72 0.533 0.540248,722.79
People's Bank2468 NCD 249,000.00710665GD6 12/31/2029 2,5560.90012/30/2020 193,923.69 0.967 0.981247,645.04
Ponce De Leon Federal Bank2686 NCD 249,000.00732329BD8 09/15/2027 1,7183.50009/15/2022 237,456.36 3.453 3.501249,000.00
Pentagon Fed Cred Union2565 NCD 249,000.0070962LAE2 09/01/2026 1,3390.85009/01/2021 217,638.45 0.889 0.901248,543.52
Preferred Bank LA California2047 NCD 245,000.00740367HP5 08/16/2024 5932.00008/16/2019 234,962.35 1.972 2.000245,000.00
Parkside Financial Bank1833 NCD 245,000.0070147ACE2 03/15/2023 732.10007/19/2017 244,010.20 2.072 2.101245,000.00
Pony Express Bank2488 NCD 249,000.00732770BJ0 02/25/2030 2,6121.00002/24/2021 194,847.48 1.055 1.070247,813.16
Rayond James Bank NA2188 NCD 245,000.0075472RAU5 12/30/2024 7291.85012/30/2019 232,198.75 1.824 1.850245,000.00
Rogue Credit Union2717 NCD 249,000.0077535MAC7 11/10/2025 1,0444.90011/09/2022 249,276.39 4.868 4.935248,763.03
Sallie Mae Bank2102 NCD 245,000.007954504D4 09/18/2024 6261.90009/18/2019 234,153.85 1.873 1.900245,000.00
Sawyer Savings Bank2710 NCD 249,000.00805508BT4 10/28/2027 1,7614.90010/28/2022 249,612.54 4.877 4.945248,519.73
State Bank of India2403 NCD 249,000.00856285UJ8 09/04/2025 9770.50009/04/2020 223,649.31 0.493 0.500249,000.00
Stifel Bank & Trust1953 NCD 245,000.0086063QAK1 05/15/2023 1342.95005/15/2018 243,865.65 2.911 2.951245,000.00
San Francisco Credit Union2297 NCD 249,000.0079772FAF3 03/27/2025 8161.10003/27/2020 230,479.38 1.085 1.100249,000.00
Sharonview Fed Credit Union2718 NCD 249,000.00819866BR4 10/31/2025 1,0345.00010/31/2022 250,150.38 4.966 5.035248,765.09
Sunwest Bank2491 NCD 249,000.0086804DCQ9 02/17/2028 1,8730.80002/17/2021 205,825.89 0.861 0.873248,087.68
Somerset Trust Company Bank1616 NCD 245,000.00835104BL3 06/12/2023 1621.80006/10/2016 242,432.40 1.776 1.800245,000.00
First Source Bank2754 NCD 249,000.0033646CNJ9 06/16/2028 1,9935.05012/16/2022 249,883.95 4.980 5.050249,000.00
ST Lawrence Federal CU2728 NCD 249,000.00791125AB3 11/22/2023 3254.95011/22/2022 249,761.94 4.881 4.949249,000.00
Southwest Financial Fed. Credi2333 NCD 249,000.0084485EAG2 03/28/2024 4521.15003/31/2020 238,527.06 1.134 1.150249,000.00
Synchrony Bank2563 NCD 249,000.0087165FZN7 08/20/2026 1,3270.90008/20/2021 218,539.83 0.887 0.900249,000.00
Texas Bank Henderson2464 NCD 249,000.00882214AA7 12/23/2025 1,0870.45012/23/2020 220,228.05 0.483 0.490248,703.55
Third Federal Savings and Loan2157 NCD 245,000.0088413QCK2 11/25/2024 6941.95011/25/2019 233,264.50 1.923 1.950245,000.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 14 Packet Pg. 241 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 5
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Negotiable Certificates of Deposits
Crossfirst Bank of Leawood1804 NCD 245,000.0022766ABF1 06/09/2023 1592.15006/09/2017 242,755.80 2.121 2.151245,000.00
Toyota Financial Savings Bank2551 NCD 249,000.0089235MLC3 07/15/2026 1,2910.95007/15/2021 219,722.58 0.936 0.950249,000.00
Trustone Fin. Credit Union2745 NCD 249,000.0089841MAM9 12/14/2023 3475.00012/14/2022 249,881.46 4.931 5.000249,000.00
Uinta Bank1639 NCD 245,000.00903572BC8 12/26/2023 3591.70006/24/2016 238,671.65 1.676 1.700245,000.00
Umassfive College Fed Cr Union2742 NCD 249,000.0090407LAD5 03/08/2024 4324.95012/09/2022 249,306.27 4.879 4.947249,000.00
United Heritage Credit Union2711 NCD 249,000.0091334AAC7 04/28/2025 8484.60010/28/2022 249,044.82 4.539 4.602249,000.00
Greenstate Credit Union2552 NCD 249,000.0039573LBM9 07/21/2026 1,2970.95007/21/2021 219,339.12 0.937 0.950249,000.00
USAlliance Federal Credit Unio2325 NCD 249,000.0090352RAU9 03/31/2025 8201.15003/31/2020 230,925.09 1.155 1.171248,888.18
USF Federal Credit Union2546 NCD 249,000.0090353EAR4 07/15/2031 3,1171.75007/15/2021 197,875.32 1.801 1.826247,512.34
Vystar Credit Union2136 NCD 245,000.0092891CCE0 12/11/2023 3443.65010/18/2019 242,797.45 2.170 2.200248,198.75
Washington Federal2049 NCD 245,000.00938828BJ8 08/23/2024 6002.05008/23/2019 235,043.20 2.024 2.052245,000.00
Washington State Emp CU2780 NCD 249,000.00939769AC9 12/29/2023 3625.00012/29/2022 249,886.44 4.931 4.999249,000.00
Western State Bank2342 NCD 248,000.0095960NKE6 11/13/2025 1,0471.05005/13/2020 224,695.44 1.035 1.050248,000.00
Wyoming Bank & Trust2446 NCD 249,000.0098321PAJ9 11/28/2025 1,0620.50011/27/2020 221,358.51 0.515 0.522248,782.89
Workers Fed Credit Union2749 NCD 249,000.0098138MAX8 12/14/2027 1,8085.10012/14/2022 249,966.12 5.032 5.102249,000.00
Subtotal and Average 32,899,223.68 32,923,000.00 30,965,689.21 2.374 2.407 958
Corporate Medium Term Bonds
Apple, Inc.2053 MTN 1,500,000.00037833CU2 05/11/2024 4962.85008/06/2019 1,460,370.00 1.998 2.0251,515,428.57
Apple, Inc.2082 MTN 550,000.00037833AK6 05/03/2023 1222.40008/29/2019 545,600.00 1.726 1.750551,167.66
Apple, Inc.2401 MTN 1,500,000.00037833DF4 01/13/2025 7432.75008/28/2020 1,444,350.00 0.620 0.6281,563,716.07
Apple, Inc.2489 MTN 700,000.00037833EB2 02/08/2026 1,1340.70002/08/2021 621,306.00 0.684 0.694700,124.92
Apple, Inc.2667 MTN 750,000.00037833CJ7 02/09/2027 1,5003.35002/23/2022 717,090.00 2.115 2.145783,351.38
Alphabet (Google) Inc.2507 MTN 200,000.0002079KAH0 08/15/2025 9570.45003/01/2021 180,546.00 0.668 0.678198,824.07
Alphabet (Google) Inc.2675 MTN 1,000,000.0002079KAC1 08/15/2026 1,3221.99803/14/2022 919,380.00 2.197 2.228992,098.96
Alphabet (Google) Inc.2689 MTN 1,000,000.0002079KAJ6 08/15/2027 1,6870.80009/14/2022 856,480.00 3.442 3.489886,650.31
Johnson & Johnson2466 MTN 2,000,000.00478160CN2 09/01/2025 9740.55012/23/2020 1,806,180.00 0.479 0.4862,003,363.01
Johnson & Johnson2508 MTN 2,000,000.00478160BY9 03/01/2026 1,1552.45003/01/2021 1,879,500.00 0.812 0.8232,095,780.14
Johnson & Johnson2509 MTN 1,000,000.00478160BY9 03/01/2026 1,1552.45003/01/2021 939,750.00 0.812 0.8241,047,877.79
Microsoft Corporation2212 MTN 1,800,000.00594918BX1 02/06/2024 4012.87501/22/2020 1,768,086.00 1.727 1.7511,820,488.93
Microsoft Corporation2450 MTN 2,920,000.00594918BJ2 11/03/2025 1,0373.12511/18/2020 2,820,778.40 0.572 0.5803,117,344.36
Microsoft Corporation2506 MTN 180,000.00594918BJ2 11/03/2025 1,0373.12503/01/2021 173,883.60 0.753 0.763191,209.03
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 15 Packet Pg. 242 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 6
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Corporate Medium Term Bonds
Stanford University2182 MTN 1,000,000.00525555AB4 02/01/2024 3966.87512/12/2019 1,019,290.00 1.934 1.9601,050,885.96
Stanford University2648 MTN 1,500,000.0085440KAC8 06/01/2027 1,6121.28901/07/2022 1,302,195.00 1.479 1.5001,486,615.80
Stanford University2658 MTN 500,000.0085440KAC8 06/01/2027 1,6121.28902/01/2022 434,065.00 1.849 1.875487,736.97
Stanford University2709 MTN 1,530,000.0085440KAC8 06/01/2027 1,6121.28910/19/2022 1,328,238.90 4.487 4.5501,333,227.53
Stanford University2761 MTN 450,000.0085440KAC8 06/01/2027 1,6121.28912/12/2022 390,658.50 4.142 4.200397,745.09
Yale University2376 MTN 2,000,000.0098459LAA1 04/15/2025 8350.87307/01/2020 1,839,420.00 0.616 0.6252,010,954.80
Yale University2511 MTN 3,000,000.0098459LAA1 04/15/2025 8350.87303/01/2021 2,759,130.00 0.638 0.6463,014,991.91
Subtotal and Average 27,249,583.26 27,080,000.00 25,206,297.40 1.357 1.375 1,000
Federal Agency Bonds
Federal Agricultural Mortgage1428 404,000.0031315PL23 03/27/2024 4513.33001/09/2015 396,780.52 2.540 2.575407,339.76
Federal Agricultural Mortgage1433 1,604,000.0031315PD89 06/12/2023 1622.61001/22/2015 1,590,863.24 2.269 2.3011,606,004.21
Federal Agricultural Mortgage1447 1,450,000.0031315PD89 06/12/2023 1622.61002/09/2015 1,438,124.50 2.377 2.4101,451,166.86
Federal Agricultural Mortgage1576 1,000,000.0031315PZS1 01/24/2023 232.13004/06/2016 998,810.00 1.839 1.8641,000,158.21
Federal Agricultural Mortgage1580 474,000.0031315PEM7 08/04/2025 9464.35004/08/2016 474,388.68 2.296 2.328496,208.30
Federal Agricultural Mortgage1595 1,500,000.0031315P2J7 05/01/2024 4863.30004/21/2016 1,471,245.00 2.084 2.1121,521,729.55
Federal Agricultural Mortgage1604 1,500,000.0031315P2J7 05/01/2024 4863.30004/26/2016 1,471,245.00 2.159 2.1891,520,259.83
Federal Agricultural Mortgage1710 1,500,000.0031315PRA9 02/03/2026 1,1294.81010/18/2016 1,526,880.00 2.131 2.1601,610,651.48
Federal Agricultural Mortgage1867 1,000,000.003132X0WL1 08/23/2024 6002.25010/06/2017 961,780.00 2.332 2.365998,260.09
Federal Agricultural Mortgage1893 1,000,000.003130H0AU7 08/01/2024 5782.62501/09/2018 968,490.00 2.546 2.5811,000,625.02
Federal Agricultural Mortgage1901 1,500,000.003130H0AU7 08/01/2024 5782.62501/11/2018 1,452,735.00 2.623 2.6601,499,238.69
Federal Agricultural Mortgage1912 2,000,000.003132X0G39 01/30/2023 292.50001/30/2018 1,997,260.00 2.472 2.5071,999,989.04
Federal Agricultural Mortgage1915 1,500,000.003132X0G39 01/30/2023 292.50001/30/2018 1,497,945.00 2.481 2.5151,499,982.07
Federal Agricultural Mortgage1921 2,000,000.003132X0G39 01/30/2023 292.50001/31/2018 1,997,260.00 2.556 2.5921,999,861.64
Federal Agricultural Mortgage1924 1,100,000.0031315PZS1 01/24/2023 232.13002/08/2018 1,098,691.00 2.578 2.6141,099,682.69
Federal Agricultural Mortgage1928 1,500,000.003132X0H87 02/22/2023 522.60002/22/2018 1,496,550.00 2.564 2.6001,500,000.00
Federal Agricultural Mortgage1936 1,500,000.003132X0L33 02/21/2023 512.77002/23/2018 1,496,955.00 2.732 2.7701,500,000.00
Federal Agricultural Mortgage1999 549,000.0031315P4B2 01/30/2024 3943.46012/14/2018 540,852.84 3.018 3.060551,177.84
Federal Agricultural Mortgage2034 1,000,000.0031422BEJ5 04/09/2024 4642.35004/09/2019 969,910.00 2.365 2.398999,422.41
Federal Agricultural Mortgage2035 678,000.0031315PCY3 11/20/2024 6895.25004/08/2019 686,258.04 2.420 2.454711,202.07
Federal Agricultural Mortgage2098 550,000.0031315PEM7 08/04/2025 9464.35009/09/2019 550,451.00 1.659 1.683586,041.00
Federal Agricultural Mortgage2301 1,569,000.0031315PB99 11/19/2027 1,7832.85003/11/2020 1,475,518.98 1.050 1.0641,699,986.46
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 16 Packet Pg. 243 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 7
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Federal Agency Bonds
Federal Agricultural Mortgage2340 Call 2,000,000.0031422BZS2 05/13/2030 2,6891.50005/13/2020 1,642,200.00 1.479 1.5002,000,000.00
Federal Agricultural Mortgage2366 Call 1,750,000.0031422BF54 06/24/2030 2,7311.40006/24/2020 1,422,260.00 1.380 1.4001,750,000.00
Federal Agricultural Mortgage2367 Call 2,000,000.0031422BF54 06/24/2030 2,7311.40006/24/2020 1,625,440.00 1.380 1.4002,000,000.00
Federal Agricultural Mortgage2381 Call 1,500,000.0031422BH78 07/08/2030 2,7451.40007/08/2020 1,217,805.00 1.380 1.4001,500,000.00
Federal Agricultural Mortgage2425 Call 2,000,000.0031422BX54 09/27/2030 2,8261.30010/08/2020 1,601,500.00 1.286 1.3042,000,000.00
Federal Agricultural Mortgage2435 Call 2,000,000.0031422BZ45 10/21/2030 2,8501.28010/21/2020 1,596,200.00 1.262 1.2802,000,000.00
Federal Agricultural Mortgage2439 Call 2,000,000.0031422B2E9 10/29/2030 2,8581.34010/29/2020 1,602,680.00 1.321 1.3402,000,000.00
Federal Agricultural Mortgage2449 1,500,000.0031422B3D0 11/20/2030 2,8801.15011/20/2020 1,193,220.00 1.134 1.1501,500,000.00
Federal Agricultural Mortgage2458 Call 1,500,000.0031422B4A5 12/11/2030 2,9011.30012/11/2020 1,194,330.00 1.282 1.3001,500,000.00
Federal Agricultural Mortgage2459 Call 2,000,000.0031422B3W8 12/16/2030 2,9061.45012/16/2020 1,610,560.00 1.430 1.4502,000,000.00
Federal Agricultural Mortgage2461 1,000,000.0031422B3D0 11/20/2030 2,8801.15012/09/2020 795,480.00 1.144 1.160999,207.20
Federal Agricultural Mortgage2471 1,500,000.0031422B6K1 01/15/2026 1,1100.48001/15/2021 1,343,490.00 0.493 0.5001,499,088.33
Federal Agricultural Mortgage2473 Call 1,500,000.0031422B6A3 01/15/2031 2,9361.29001/15/2021 1,171,395.00 1.319 1.3381,494,573.75
Federal Agricultural Mortgage2484 Call 1,000,000.0031422B7E4 01/28/2031 2,9491.32001/28/2021 782,140.00 1.301 1.3201,000,000.00
Federal Agricultural Mortgage2496 Call 1,500,000.0031422XAW2 02/25/2031 2,9771.53002/25/2021 1,192,365.00 1.509 1.5301,500,000.00
Federal Agricultural Mortgage2513 1,000,000.0031422XCB6 03/04/2031 2,9841.47003/04/2021 810,670.00 1.581 1.602989,993.80
Federal Agricultural Mortgage2519 1,500,000.0031422XDX7 03/27/2026 1,1810.83003/29/2021 1,350,210.00 0.828 0.8401,499,513.63
Federal Agricultural Mortgage2524 1,500,000.0031422XDX7 03/27/2026 1,1810.83003/31/2021 1,350,210.00 0.913 0.9261,495,423.00
Federal Agricultural Mortgage2527 Call 1,500,000.0031422XEE8 04/07/2031 3,0182.07004/07/2021 1,244,940.00 2.074 2.1031,496,505.00
Federal Agricultural Mortgage2529 2,000,000.0031422XEL2 04/13/2028 1,9291.37504/15/2021 1,733,780.00 1.311 1.3302,004,517.06
Federal Agricultural Mortgage2530 1,500,000.0031422XFJ6 04/29/2031 3,0401.66004/29/2021 1,199,355.00 1.627 1.6501,501,124.25
Federal Agricultural Mortgage2533 1,500,000.0031422XDX7 03/27/2026 1,1810.83005/20/2021 1,350,210.00 0.864 0.8761,497,814.50
Federal Agricultural Mortgage2540 255,000.0031422XDX7 03/27/2026 1,1810.83006/08/2021 229,535.70 0.820 0.831254,985.90
Federal Agricultural Mortgage2593 1,000,000.0031422XNM0 10/05/2026 1,3731.05010/05/2021 894,210.00 1.035 1.0501,000,000.00
Federal Agricultural Mortgage2621 1,000,000.0031422XPS5 11/17/2026 1,4161.15011/17/2021 895,130.00 1.272 1.290994,741.73
Federal Agricultural Mortgage2625 1,000,000.0031422XQM7 12/01/2026 1,4301.32012/01/2021 900,410.00 1.301 1.3201,000,000.00
Federal Agricultural Mortgage2634 1,500,000.0031422XRK0 01/04/2027 1,4641.32001/04/2022 1,348,005.00 1.301 1.3201,500,000.00
Federal Agricultural Mortgage2640 Call 1,500,000.0031422XRY0 12/29/2031 3,2842.15012/29/2021 1,232,760.00 2.120 2.1501,500,000.00
Federal Agricultural Mortgage2714 1,500,000.0031422XN32 10/24/2023 2964.72010/24/2022 1,499,400.00 4.655 4.7201,500,000.00
Federal Farm Credit Bank .1526 625,000.003133EAA65 07/26/2023 2062.12501/27/2016 616,156.25 2.024 2.052625,239.26
Federal Farm Credit Bank .1615 1,000,000.003133EC7D0 12/13/2024 7122.12505/13/2016 956,540.00 1.930 1.9561,003,003.38
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 17 Packet Pg. 244 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 8
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Federal Agency Bonds
Federal Farm Credit Bank .1787 900,000.003133EEVD9 03/25/2024 4492.30005/04/2017 875,511.00 2.274 2.306899,933.96
Federal Farm Credit Bank .1822 500,000.003133EDWX6 10/07/2024 6452.91006/21/2017 486,525.00 2.143 2.172505,988.23
Federal Farm Credit Bank .1932 1,500,000.003133EJDE6 02/16/2023 462.57002/16/2018 1,496,535.00 2.605 2.6421,499,874.31
Federal Farm Credit Bank .2016 500,000.003133EEG79 09/07/2023 2492.15001/15/2019 491,385.00 2.656 2.693498,263.65
Federal Farm Credit Bank .2017 650,000.003133EC2C7 11/09/2023 3122.13001/15/2019 635,492.00 2.662 2.699647,046.76
Federal Farm Credit Bank .2314 1,000,000.003133EAG44 08/03/2026 1,3102.63003/13/2020 961,430.00 1.089 1.1041,052,713.60
Federal Farm Credit Bank .2371 Call 1,500,000.003133ELQ31 07/01/2030 2,7381.33007/01/2020 1,189,170.00 1.311 1.3301,500,000.00
Federal Farm Credit Bank .2372 Call 1,500,000.003133ELQ31 07/01/2030 2,7381.33007/01/2020 1,189,170.00 1.311 1.3301,500,000.00
Federal Farm Credit Bank .2391 Call 1,500,000.003133EL3H5 08/12/2025 9540.57008/12/2020 1,356,300.00 0.587 0.5951,499,019.79
Federal Farm Credit Bank .2406 Call 1,500,000.003133EL4W1 08/25/2025 9670.61009/03/2020 1,351,545.00 0.611 0.6201,499,600.73
Federal Farm Credit Bank .2408 Call 1,500,000.003133EL4W1 08/25/2025 9670.61009/10/2020 1,351,545.00 0.611 0.6201,499,599.16
Federal Farm Credit Bank .2416 Call 1,500,000.003133EL7K4 09/16/2025 9890.55009/22/2020 1,351,740.00 0.542 0.5491,500,000.00
Federal Farm Credit Bank .2417 Call 1,500,000.003133EMBH4 09/29/2025 1,0020.53009/29/2020 1,339,410.00 0.522 0.5301,500,000.00
Federal Farm Credit Bank .2423 Call 1,500,000.003133EMBJ0 09/29/2025 1,0020.53009/29/2020 1,338,255.00 0.537 0.5451,499,382.50
Federal Farm Credit Bank .2427 Call 2,000,000.003133EMAZ5 06/24/2030 2,7311.25010/01/2020 1,548,880.00 1.246 1.2631,998,078.08
Federal Farm Credit Bank .2442 Call 1,500,000.003133EMFG2 11/04/2030 2,8641.37011/04/2020 1,186,845.00 1.351 1.3701,500,000.00
Federal Farm Credit Bank .2443 Call 1,500,000.003133EMFG2 11/04/2030 2,8641.37011/04/2020 1,186,845.00 1.351 1.3701,500,000.00
Federal Farm Credit Bank .2472 Call 1,500,000.003133EMNB4 01/14/2031 2,9351.38001/14/2021 1,164,120.00 1.361 1.3801,500,000.00
Federal Farm Credit Bank .2525 Call 1,500,000.003133EMRE4 02/18/2031 2,9701.42004/01/2021 1,173,705.00 1.834 1.8591,451,182.38
Federal Farm Credit Bank .2538 Call 1,000,000.003133EMUG5 03/24/2031 3,0041.98005/27/2021 819,010.00 1.887 1.9131,004,934.14
Federal Farm Credit Bank .2769 Call 1,500,000.003133EN4R8 12/21/2032 3,6426.08012/21/2022 1,492,080.00 5.996 6.0801,500,000.00
Federal Home Loan Bank1699 500,000.003133827E7 02/06/2023 362.13010/05/2016 498,990.00 1.578 1.600500,243.97
Federal Home Loan Bank1886 1,000,000.003130A3VC5 12/08/2023 3412.25001/03/2018 976,670.00 2.359 2.392998,762.49
Federal Home Loan Bank1896 1,000,000.003130A3DL5 09/08/2023 2502.37501/09/2018 983,420.00 2.376 2.409999,781.04
Federal Home Loan Bank1903 500,000.003130ADEV0 01/17/2023 162.38001/18/2018 499,635.00 2.385 2.418499,992.00
Federal Home Loan Bank2347 Call 1,500,000.003130AJMF3 11/28/2028 2,1581.32005/28/2020 1,249,740.00 1.301 1.3201,500,000.00
Federal Home Loan Bank2358 Call 1,000,000.003130AJP78 06/11/2029 2,3531.40006/11/2020 826,380.00 1.380 1.4001,000,000.00
Federal Home Loan Bank2361 Call 1,000,000.003130AJP78 06/11/2029 2,3531.40006/11/2020 826,380.00 1.427 1.447997,135.80
Federal Home Loan Bank2368 Call 900,000.003130AJR76 06/29/2029 2,3711.25006/29/2020 736,011.00 1.232 1.250900,000.00
Federal Home Loan Bank2369 Call 1,500,000.003130AJRG6 06/24/2030 2,7311.36006/24/2020 1,201,845.00 1.341 1.3601,500,000.00
Federal Home Loan Bank2375 Call 1,500,000.003130AJSR1 07/09/2030 2,7461.39007/09/2020 1,202,685.00 1.370 1.3901,500,000.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 18 Packet Pg. 245 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 9
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Federal Agency Bonds
Federal Home Loan Bank2377 Call 1,500,000.003130AJSR1 07/09/2030 2,7461.39007/09/2020 1,202,685.00 1.370 1.3901,500,000.00
Federal Home Loan Bank2384 Call 1,500,000.003130AJSR1 07/09/2030 2,7461.39007/09/2020 1,202,685.00 1.382 1.4011,498,758.83
Federal Home Loan Bank2395 Call 1,500,000.003130AJZ36 08/27/2025 9690.60008/27/2020 1,352,145.00 0.611 0.6201,499,203.33
Federal Home Loan Bank2399 Call 1,500,000.003130AJZ36 08/27/2025 9690.60008/27/2020 1,352,145.00 0.611 0.6201,499,203.33
Federal Home Loan Bank2405 Call 1,500,000.003130AK3Z7 09/29/2025 1,0020.57009/29/2020 1,345,830.00 0.582 0.5901,499,176.67
Federal Home Loan Bank2411 Call 1,180,000.003130AJZ36 08/27/2025 9690.60009/16/2020 1,063,687.40 0.591 0.5991,180,000.00
Federal Home Loan Bank2419 Call 1,500,000.003130AKAZ91 09/29/2025 1,0020.52009/29/2020 1,344,435.00 0.512 0.5201,500,000.00
Federal Home Loan Bank2445 Call 1,200,000.003130AJQS1 06/25/2030 2,7321.35011/04/2020 960,804.00 1.334 1.3531,199,701.96
Federal Home Loan Bank2475 Call 1,500,000.003130AKQN9 01/09/2031 2,9301.40001/28/2021 1,169,010.00 1.380 1.4001,500,000.00
Federal Home Loan Bank2476 Call 1,500,000.003130AKQV1 01/28/2031 2,9491.40001/28/2021 1,194,960.00 1.380 1.4001,500,000.00
Federal Home Loan Bank2485 Call 1,500,000.003130AKVH6 02/10/2031 2,9621.35002/10/2021 1,166,355.00 1.331 1.3501,500,000.00
Federal Home Loan Bank2490 Call 2,000,000.003130AKYB6 02/18/2031 2,9701.40002/18/2021 1,590,600.00 1.380 1.4002,000,000.00
Federal Home Loan Bank2494 Call 1,500,000.003130AL2J2 02/26/2031 2,9781.50002/26/2021 1,201,800.00 1.479 1.5001,500,000.00
Federal Home Loan Bank2500 Call 1,500,000.003130ALF66 02/25/2031 2,9771.62502/25/2021 1,213,725.00 1.602 1.6251,500,000.00
Federal Home Loan Bank2520 Call 1,925,000.003130ALF33 03/16/2026 1,1700.75003/25/2021 1,711,171.00 0.853 0.8651,918,048.07
Federal Home Loan Bank2607 Call 1,000,000.003130APPJ8 11/04/2031 3,2292.00011/04/2021 819,580.00 1.972 2.0001,000,000.00
Federal Home Loan Bank2613 Call 1,000,000.003130APV77 12/10/2026 1,4391.50012/10/2021 894,470.00 1.479 1.5001,000,000.00
Federal Home Loan Bank2616 Call 1,000,000.003130APW84 12/03/2026 1,4321.50012/03/2021 894,400.00 1.479 1.5001,000,000.00
Federal Home Loan Bank2618 Call 1,000,000.003130APXD2 12/17/2026 1,4461.55012/17/2021 895,250.00 1.528 1.5501,000,000.00
Federal Home Loan Bank2619 Call 1,000,000.003130APWY7 12/07/2026 1,4361.35012/07/2021 889,240.00 1.331 1.3501,000,000.00
Federal Home Loan Bank2620 Call 1,000,000.003130APXT7 12/17/2026 1,4461.60012/17/2021 901,320.00 1.578 1.6001,000,000.00
Federal Home Loan Bank2659 Call 1,000,000.003130AQSM6 02/25/2027 1,5162.05002/25/2022 908,110.00 2.021 2.0501,000,000.00
Federal Home Loan Bank2662 Call 1,000,000.003130AQX65 03/04/2027 1,5232.25003/04/2022 919,360.00 2.219 2.2501,000,000.00
Federal Home Loan Bank2663 Call 1,000,000.003130AQYA5 02/24/2027 1,5152.25002/28/2022 919,720.00 2.219 2.2501,000,000.00
Federal Home Loan Bank2664 Call 1,500,000.003130AQYG2 02/25/2027 1,5162.50002/28/2022 1,395,825.00 2.470 2.5041,500,000.00
Federal Home Loan Bank2665 Call 1,000,000.003130AQZD8 02/25/2027 1,5162.62502/25/2022 926,790.00 2.589 2.6251,000,000.00
Federal Home Loan Bank2703 1,500,000.003130ATKJ5 03/08/2024 4324.37510/14/2022 1,491,480.00 4.400 4.4611,498,547.44
Federal Home Loan Bank2737 1,500,000.003130ATYM3 11/22/2023 3254.87511/22/2022 1,500,450.00 4.838 4.9061,499,598.75
Fed. Home Loan Mortgage Corp.2345 Call 455,000.003134GVUA4 05/18/2028 1,9641.20005/18/2020 383,997.25 1.183 1.200455,000.00
Fed. Home Loan Mortgage Corp.2370 Call 1,500,000.003134GV3B2 06/28/2030 2,7351.40006/30/2020 1,204,560.00 1.380 1.4001,500,000.00
Fed. Home Loan Mortgage Corp.2373 Call 1,500,000.003134GV3U0 06/29/2029 2,3711.25006/29/2020 1,226,730.00 1.232 1.2501,500,000.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 19 Packet Pg. 246 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 10
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Federal Agency Bonds
Fed. Home Loan Mortgage Corp.2379 Call 1,500,000.003134GV4E5 12/29/2028 2,1891.20007/01/2020 1,238,055.00 1.183 1.1991,500,000.00
Fed. Home Loan Mortgage Corp.2380 Call 1,500,000.003134GV5D6 01/08/2029 2,1991.20007/08/2020 1,221,600.00 1.183 1.2001,500,000.00
Fed. Home Loan Mortgage Corp.2382 Call 1,500,000.003134GV5A2 07/15/2030 2,7521.37507/15/2020 1,201,710.00 1.356 1.3751,500,000.00
Fed. Home Loan Mortgage Corp.2386 Call 1,500,000.003134GV7L6 07/29/2030 2,7661.35007/29/2020 1,198,590.00 1.331 1.3501,500,000.00
Fed. Home Loan Mortgage Corp.2387 Call 1,500,000.003134GV7L6 07/29/2030 2,7661.35007/29/2020 1,198,590.00 1.331 1.3501,500,000.00
Fed. Home Loan Mortgage Corp.2396 Call 1,000,000.003134GWNC6 08/19/2025 9610.62508/20/2020 904,060.00 0.616 0.6251,000,000.00
Fed. Home Loan Mortgage Corp.2400 Call 1,500,000.003134GWC53 09/15/2025 9880.65009/15/2020 1,354,035.00 0.641 0.6501,500,000.00
Fed. Home Loan Mortgage Corp.2404 Call 1,447,000.003134GWA55 09/09/2025 9820.65009/09/2020 1,297,365.73 0.641 0.6501,447,000.00
Fed. Home Loan Mortgage Corp.2407 Call 1,500,000.003134GWD52 09/02/2025 9750.68009/04/2020 1,354,515.00 0.670 0.6791,500,000.00
Fed. Home Loan Mortgage Corp.2409 Call 1,500,000.003134GWP75 09/23/2025 9960.62509/23/2020 1,352,100.00 0.616 0.6251,500,000.00
Fed. Home Loan Mortgage Corp.2410 Call 1,000,000.003134GWP75 09/23/2025 9960.62509/23/2020 901,400.00 0.616 0.6251,000,000.00
Fed. Home Loan Mortgage Corp.2418 Call 1,500,000.003134GWVV5 10/15/2025 1,0180.50010/15/2020 1,351,650.00 0.493 0.5001,500,000.00
Fed. Home Loan Mortgage Corp.2421 Call 2,000,000.003134GWW93 09/30/2025 1,0030.55009/30/2020 1,797,360.00 0.542 0.5502,000,000.00
Fed. Home Loan Mortgage Corp.2422 Call 1,500,000.003134GWW93 09/30/2025 1,0030.55009/30/2020 1,348,020.00 0.542 0.5501,500,000.00
Fed. Home Loan Mortgage Corp.2424 Call 1,500,000.003134GWXK7 09/30/2025 1,0030.55009/30/2020 1,348,020.00 0.542 0.5501,500,000.00
Fed. Home Loan Mortgage Corp.2426 Call 1,500,000.003134GWXX9 10/15/2025 1,0180.55010/15/2020 1,346,115.00 0.542 0.5501,500,000.00
Fed. Home Loan Mortgage Corp.2428 Call 1,500,000.003134GWY26 10/08/2025 1,0110.57010/08/2020 1,347,780.00 0.562 0.5701,500,000.00
Fed. Home Loan Mortgage Corp.2430 Call 1,500,000.003134GWYZ3 10/28/2025 1,0310.53010/28/2020 1,343,700.00 0.522 0.5301,500,000.00
Fed. Home Loan Mortgage Corp.2431 Call 1,500,000.003134GWZ33 10/22/2030 2,8511.25010/22/2020 1,183,800.00 1.232 1.2501,500,000.00
Fed. Home Loan Mortgage Corp.2432 Call 1,500,000.003134GWZL3 10/29/2025 1,0320.57010/29/2020 1,345,230.00 0.562 0.5701,500,000.00
Fed. Home Loan Mortgage Corp.2433 Call 2,000,000.003134GW3T1 10/28/2030 2,8571.40010/28/2020 1,594,520.00 1.380 1.4002,000,000.00
Fed. Home Loan Mortgage Corp.2434 Call 1,500,000.003134GW3H7 10/29/2025 1,0320.61010/29/2020 1,346,955.00 0.601 0.6101,500,000.00
Fed. Home Loan Mortgage Corp.2436 Call 2,000,000.003134GWZZ2 10/28/2030 2,8571.30010/28/2020 1,583,020.00 1.282 1.3002,000,000.00
Fed. Home Loan Mortgage Corp.2437 Call 750,000.003134GW3Z7 10/28/2025 1,0310.60010/28/2020 673,222.50 0.591 0.600750,000.00
Fed. Home Loan Mortgage Corp.2438 Call 1,500,000.003134GW3X2 10/27/2025 1,0300.62510/27/2020 1,342,635.00 0.616 0.6251,500,000.00
Fed. Home Loan Mortgage Corp.2440 Call 1,500,000.003134GW6N1 11/05/2030 2,8651.40011/05/2020 1,195,275.00 1.380 1.4001,500,000.00
Fed. Home Loan Mortgage Corp.2444 Call 1,500,000.003134GW6N1 11/05/2030 2,8651.40011/05/2020 1,195,275.00 1.380 1.4001,500,000.00
Federal National Mortgage Asso1715 500,000.0031364CCC0 04/30/2026 1,2157.12511/10/2016 544,495.00 2.367 2.400570,006.16
Federal National Mortgage Asso1926 1,500,000.003135G0T94 01/19/2023 182.37502/08/2018 1,498,725.00 2.574 2.6101,499,835.59
Federal National Mortgage Asso2392 Call 1,000,000.003136G4R62 08/28/2025 9700.62508/28/2020 902,290.00 0.616 0.6251,000,000.00
Federal National Mortgage Asso2393 Call 1,000,000.003136G4S87 08/27/2025 9690.65008/27/2020 902,980.00 0.641 0.6501,000,000.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 20 Packet Pg. 247 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 11
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Federal Agency Bonds
Federal National Mortgage Asso2394 Call 1,500,000.003136G4Q97 08/27/2025 9690.65008/27/2020 1,357,965.00 0.641 0.6501,500,000.00
Federal National Mortgage Asso2397 Call 1,500,000.003136G4V59 08/27/2025 9690.62508/27/2020 1,353,555.00 0.616 0.6251,500,000.00
Federal National Mortgage Asso2412 Call 1,500,000.003136G44G5 09/22/2025 9950.51509/22/2020 1,346,370.00 0.507 0.5151,500,000.00
Federal National Mortgage Asso2413 Call 1,500,000.003136G43L5 09/30/2025 1,0030.55009/30/2020 1,346,805.00 0.542 0.5501,500,000.00
Federal National Mortgage Asso2415 Call 1,500,000.003136G44L4 09/25/2025 9980.60009/25/2020 1,349,235.00 0.591 0.6001,500,000.00
Federal National Mortgage Asso2460 2,000,000.003135G05Q2 08/05/2030 2,7730.87512/07/2020 1,587,580.00 1.139 1.1551,959,862.55
Federal National Mortgage Asso2463 Call 1,500,000.003135GAAS0 12/23/2030 2,9131.40012/23/2020 1,190,490.00 1.380 1.4001,500,000.00
Federal National Mortgage Asso2467 Call 1,000,000.003135G06Q1 12/30/2025 1,0940.64012/30/2020 888,890.00 0.597 0.6051,001,013.06
Tennessee Valley Authority1508 1,000,000.00880591CJ9 11/01/2025 1,0356.75011/20/2015 1,061,510.00 2.807 2.8461,095,725.05
Tennessee Valley Authority1519 750,000.00880591ER9 09/15/2024 6232.87501/15/2016 726,900.00 2.564 2.600753,127.56
Tennessee Valley Authority1589 775,000.00880591CJ9 11/01/2025 1,0356.75004/18/2016 822,670.25 2.337 2.370860,628.67
Tennessee Valley Authority1714 1,250,000.00880591CJ9 11/01/2025 1,0356.75011/10/2016 1,326,887.50 2.317 2.3501,389,756.73
Subtotal and Average 210,890,444.35 210,190,000.00 185,164,100.38 1.484 1.505 1,673
Treasury Securities (Notes)
U.S. Treasury1898 TB 1,500,000.00912828P38 01/31/2023 301.75001/11/2018 1,497,300.00 2.308 2.3401,499,317.93
U.S. Treasury1923 TB 1,500,000.00912828P38 01/31/2023 301.75002/05/2018 1,497,300.00 2.560 2.5961,499,028.06
U.S. Treasury1925 TB 1,000,000.00912828P38 01/31/2023 301.75002/08/2018 998,200.00 2.487 2.521999,407.62
U.S. Treasury1929 TB 1,000,000.00912828P79 02/28/2023 581.50002/09/2018 995,410.00 2.534 2.570998,415.58
U.S. Treasury1934 TB 1,000,000.00912828P79 02/28/2023 581.50002/15/2018 995,410.00 2.601 2.638998,317.68
U.S. Treasury2505 TB 1,500,000.0091282CBC4 12/31/2025 1,0950.37502/26/2021 1,340,565.00 0.731 0.7421,483,820.12
U.S. Treasury2516 TB 1,500,000.0091282CBQ3 02/28/2026 1,1540.50003/09/2021 1,336,590.00 0.819 0.8311,484,652.50
U.S. Treasury2587 TB 1,500,000.0091282CCP4 07/31/2026 1,3070.62509/24/2021 1,325,445.00 0.888 0.9011,485,529.27
U.S. Treasury2701 TB 1,000,000.0091282CFN6 09/30/2024 6384.25010/07/2022 989,030.00 4.142 4.1991,000,826.14
U.S. Treasury2740 TB 1,500,000.0091282CER8 05/31/2024 5162.50011/23/2022 1,455,300.00 4.636 4.7001,455,492.82
Subtotal and Average 12,904,807.72 13,000,000.00 12,430,550.00 2.281 2.312 535
Municipal Bonds
County of Alameda2173 MUN 290,000.00010878AS5 08/01/2026 1,3084.00012/05/2019 283,950.60 2.139 2.168307,627.67
County of Alameda2691 MUN 1,500,000.00010878BK1 08/01/2031 3,1343.69909/21/2022 1,383,570.00 4.281 4.3401,432,029.69
Alameda County Joint Pws Auth.2005 MUN 505,000.00010831DS1 06/01/2025 8823.36512/24/2018 486,325.10 3.175 3.220506,583.33
Alameda County Joint Pws Auth.2566 MUN 110,000.00010831DT9 06/01/2026 1,2473.39508/13/2021 104,409.80 0.925 0.938118,993.91
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 21 Packet Pg. 248 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 12
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Antelope Valley Community Coll2069 MUN 500,000.0003667PFN7 08/01/2024 5783.02608/16/2019 486,925.00 1.876 1.902508,449.41
Antelope Valley Community Coll2694 MUN 1,080,000.0003667PHJ4 08/01/2029 2,4041.66109/23/2022 873,709.20 4.389 4.450910,670.22
Antelope Valley Community Coll2705 MUN 300,000.0003667PGA4 08/01/2031 3,1342.33810/17/2022 241,440.00 5.128 5.200241,432.59
Antelope Valley Community Coll2727 MUN 335,000.0003667PFZ0 08/01/2030 2,7692.21811/10/2022 273,829.00 5.495 5.571274,113.04
Bay Area Toll Authority2558 MUN 1,750,000.00072024XC1 04/01/2026 1,1861.07907/26/2021 1,567,125.00 0.739 0.7501,768,348.52
Beverly Hills Public Fing Auth2612 MUN 350,000.00088006KA8 06/01/2026 1,2471.14711/15/2021 309,589.00 1.183 1.200349,384.25
Beverly Hills Public Fing Auth2680 MUN 490,000.00088006KB6 06/01/2027 1,6121.32704/01/2022 421,066.80 2.810 2.850459,548.08
Beverly Hills Unified Sch Dist2682 MUN 920,000.00088023PL4 08/01/2026 1,3082.70004/13/2022 857,982.80 2.644 2.681920,598.00
Burlingame School District1548 MUN 355,000.00121457EQ4 08/01/2025 9436.23802/24/2016 363,264.40 3.557 3.606375,287.96
City of Buena Park2734 MUN 685,000.00119174AJ9 07/01/2030 2,7381.88211/18/2022 544,054.40 5.076 5.147547,652.88
Burbank Unified School Distri.2570 MUN 1,000,000.0012082SDN1 08/01/2026 1,3081.36708/30/2021 886,340.00 0.947 0.9601,014,203.84
Cabrillo Community College Dis2119 MUN 2,000,000.00127109QD1 08/01/2027 1,6732.38510/08/2019 1,792,040.00 2.342 2.3752,000,000.00
Carlsbad Unified School Dist .1857 MUN 305,000.00142665DJ4 08/01/2026 1,3085.23409/27/2017 309,559.75 2.850 2.890327,457.79
CA Infrastructure -Econ Dev Bk2666 MUN 210,000.0013034AL73 10/01/2026 1,3691.03502/16/2022 183,764.70 2.224 2.254200,924.59
CA ST Dept of WTR Resources2633 MUN 180,000.0013067WRC8 12/01/2025 1,0650.79012/13/2021 160,977.60 1.301 1.320177,297.35
CA ST Dept of WTR Resources2645 MUN 300,000.0013067WRD6 12/01/2026 1,4300.92012/23/2021 259,305.00 1.430 1.450294,009.48
Chabot-Las Positas CCD2564 MUN 285,000.0015722TJR3 08/01/2026 1,3081.08008/16/2021 249,868.05 0.897 0.910286,693.04
Chabot-Las Positas CCD2589 MUN 125,000.0015722TJQ5 08/01/2025 9430.88009/29/2021 113,065.00 0.897 0.910124,904.11
Chabot-Las Positas CCD2764 MUN 770,000.0015722TJV4 08/01/2030 2,7691.79012/14/2022 611,888.20 5.069 5.140609,844.01
Chaffey Community Clg District2698 MUN 300,000.00157432KL8 06/01/2030 2,7082.32910/06/2022 250,788.00 4.931 5.000251,108.47
Chaffey Community Clg District2712 MUN 500,000.00157432KK0 06/01/2029 2,3432.22910/21/2022 425,590.00 5.216 5.289418,038.68
City of Chula Vista2653 MUN 1,000,000.0017131RAU0 06/01/2026 1,2470.84001/10/2022 867,860.00 1.676 1.700971,797.91
Calleguas Municipal Water Dist2544 MUN 550,000.0013124MCE3 07/01/2029 2,3731.86507/01/2021 456,687.00 1.425 1.445564,130.19
Calleguas Municipal Water Dist2646 MUN 600,000.0013124MCB9 07/01/2026 1,2771.09712/27/2021 529,026.00 1.233 1.250596,881.03
Campbell Union High Sch Dist2753 MUN 500,000.00134159A77 08/01/2029 2,4041.47212/07/2022 405,410.00 4.714 4.780407,645.24
Corona-Norco Unified School Di2704 MUN 700,000.00219766QU9 09/01/2030 2,8002.11410/14/2022 563,486.00 5.178 5.250563,595.49
City of Corona2601 MUN 500,000.0021969AAJ1 05/01/2030 2,6772.24210/14/2021 409,970.00 2.052 2.081505,379.53
Contra Costa Community College2103 MUN 400,000.00212204JJ1 08/01/2028 2,0392.21309/12/2019 347,460.00 2.071 2.100402,287.09
Contra Costa Community College2120 MUN 990,000.00212204JK8 08/01/2029 2,4042.26309/20/2019 840,925.80 2.505 2.539974,128.94
Contra Costa Community College2244 MUN 1,500,000.00212204JK8 08/01/2029 2,4042.26302/07/2020 1,274,130.00 2.100 2.1301,511,829.17
Contra Costa Community College2291 MUN 320,000.00212204JF9 08/01/2025 9431.91803/09/2020 298,150.40 1.128 1.143326,189.53
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 22 Packet Pg. 249 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 13
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Contra Costa Community College2555 MUN 1,000,000.00212204LM1 08/01/2026 1,3081.30008/02/2021 884,960.00 0.764 0.7751,018,414.23
Desert Community Clg Dist2611 MUN 200,000.00250375JX1 08/01/2027 1,6731.16911/12/2021 169,210.00 1.479 1.500197,100.68
Desert Community Clg Dist2738 MUN 200,000.00250375LA8 08/01/2027 1,6733.00011/23/2022 186,408.00 4.965 5.034183,564.51
Desert Sands Unif Sch District2635 MUN 880,000.00250433UA5 08/01/2026 1,3081.98212/16/2021 795,388.00 1.390 1.410897,392.76
City of El Segundo2696 MUN 935,000.00284035AK8 07/01/2031 3,1032.26709/29/2022 744,764.90 5.118 5.190750,163.14
Fremon Union High School Distr1646 MUN 510,000.00357172VA0 02/01/2026 1,1276.08006/28/2016 524,626.80 2.994 3.035551,805.82
Fremon Union High School Distr2595 MUN 235,000.00357172C52 08/01/2031 3,1342.02010/01/2021 185,697.00 1.825 1.851238,095.37
Foothill-De Anza Comm Clg Dist2699 MUN 1,230,000.00345102PF8 08/01/2024 5780.57510/06/2022 1,156,704.30 4.241 4.3001,160,917.57
Fullerton School District1916 MUN 995,000.00359819DN6 08/01/2026 1,3083.16002/14/2018 941,240.15 3.028 3.070997,801.32
Fullerton School District1917 MUN 750,000.00359819DM8 08/01/2025 9433.04002/14/2018 719,302.50 2.959 3.000750,685.30
Fullerton School District2085 MUN 365,000.00359819DN6 08/01/2026 1,3083.16008/29/2019 345,279.05 1.913 1.940379,862.38
State of Georgia1645 MUN 365,000.00373384W69 02/01/2023 313.25006/27/2016 364,667.85 1.898 1.925365,376.70
State of Georgia1666 MUN 1,825,000.003733844V5 02/01/2025 7622.37507/29/2016 1,743,367.75 1.972 1.9991,838,048.27
State of Georgia1775 MUN 250,000.00373384RX6 10/01/2025 1,0044.00004/10/2017 245,852.50 2.739 2.777257,445.28
State of Georgia1919 MUN 1,095,000.00373384RY4 10/01/2026 1,3694.31001/26/2018 1,081,334.40 2.979 3.0201,141,257.91
State of Georgia1945 MUN 200,000.00373384RY4 10/01/2026 1,3694.31003/19/2018 197,504.00 3.204 3.248206,887.15
State of Georgia1962 MUN 390,000.00373384SP2 10/01/2023 2733.74010/25/2018 388,139.70 3.093 3.136391,623.97
State of Georgia1967 MUN 350,000.00373385BU6 02/01/2027 1,4922.72010/31/2018 324,852.50 3.412 3.460340,861.99
State of Georgia2086 MUN 1,500,000.00373384RV0 10/01/2023 2733.72008/29/2019 1,492,635.00 1.749 1.7741,521,023.13
State of Georgia2229 MUN 425,000.00373384RY4 10/01/2026 1,3694.31001/31/2020 419,696.00 1.837 1.863461,486.52
State of Georgia2332 MUN 1,000,000.00373384RW8 10/01/2024 6393.82003/23/2020 986,490.00 1.889 1.9151,031,741.25
City of Glendora2109 MUN 1,345,000.00378612AL9 06/01/2028 1,9782.26509/16/2019 1,166,168.80 2.318 2.3501,339,411.49
City of Glendora2137 MUN 400,000.00378612AL9 06/01/2028 1,9782.26510/02/2019 346,816.00 2.194 2.225400,780.25
City of Glendora2590 MUN 1,365,000.00378612AJ4 06/01/2026 1,2472.10809/29/2021 1,242,122.70 1.075 1.0901,411,156.15
Glendale Unified School Dist.2697 MUN 400,000.00378460ZC6 09/01/2031 3,1651.84209/30/2022 313,244.00 4.941 5.010312,294.09
Glendale Unified School Dist.2739 MUN 535,000.00378460A74 09/01/2027 1,7041.11311/25/2022 454,300.60 4.686 4.751454,601.83
Grossmont-Cuyamaca Cmnty Clg D2721 MUN 450,000.00399267HH9 08/01/2027 1,6731.48211/02/2022 390,388.50 5.227 5.300381,163.43
State of Hawaii1685 MUN 1,045,000.00419792DA1 10/01/2026 1,3693.15010/19/2016 992,175.25 2.431 2.4651,068,658.22
State of Hawaii1961 MUN 250,000.00419791YS1 02/01/2025 7625.23010/25/2018 253,170.00 3.363 3.410258,464.93
State of Hawaii1995 MUN 800,000.00419791YT9 02/01/2026 1,1275.33012/06/2018 816,872.00 3.304 3.350843,093.00
City of Huntington Beach2560 MUN 1,000,000.00446201AE5 06/15/2026 1,2611.34408/12/2021 883,610.00 0.909 0.9211,014,224.28
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 23 Packet Pg. 250 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 14
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
City of Huntington Beach2562 MUN 1,000,000.00446201AE5 06/15/2026 1,2611.34408/13/2021 883,610.00 0.927 0.9391,013,611.16
Liberty Union High Sch Distr2768 MUN 530,000.00530319SP8 08/01/2028 2,0391.48412/15/2022 442,216.10 4.614 4.678447,710.04
City of La Habra2660 MUN 500,000.00503433AK0 08/01/2031 3,1342.67302/07/2022 409,730.00 2.638 2.675499,909.49
Los Altos Elementary Sch Distr2681 MUN 500,000.00544290JH3 10/01/2024 6391.00003/24/2022 467,400.00 2.522 2.557486,861.69
City of Los Angeles1748 MUN 1,000,000.00544351KS7 09/01/2023 2432.64002/14/2017 988,910.00 2.784 2.8231,000,181.25
City of Los Angeles1969 MUN 295,000.00544351NP0 09/01/2026 1,3393.30011/02/2018 281,188.10 3.530 3.579292,374.07
City of Los Angeles2008 MUN 1,000,000.00544351MS5 09/01/2026 1,3393.50001/07/2019 959,830.00 3.077 3.1191,012,294.12
City of Los Angeles2200 MUN 840,000.00544351NQ8 09/01/2027 1,7043.40001/06/2020 792,019.20 2.360 2.393875,856.26
City of Los Angeles2213 MUN 985,000.00544351LQ0 09/01/2029 2,4353.05001/22/2020 874,295.85 2.413 2.4461,020,108.03
City of Los Angeles2283 MUN 1,000,000.00544351KV0 09/01/2026 1,3393.15003/05/2020 948,190.00 1.519 1.5411,055,936.13
City of Los Angeles2692 MUN 1,000,000.00544351QX0 09/01/2032 3,5314.40009/28/2022 951,100.00 4.346 4.406999,513.01
City of Los Angeles2783 MUN 300,000.00544351MR7 09/01/2025 9743.45012/23/2022 290,943.00 4.724 4.790290,036.03
Los Angeles Community College2487 MUN 1,000,000.0054438CYN6 08/01/2030 2,7691.80601/28/2021 819,110.00 1.432 1.4521,024,986.40
Los Angeles Community College2592 MUN 250,000.0054438CYL0 08/01/2026 1,3081.17409/30/2021 220,095.00 1.064 1.078250,828.02
Los Angeles Community College2614 MUN 1,500,000.0054438CYL0 08/01/2026 1,3081.17411/15/2021 1,320,570.00 1.233 1.2501,496,029.60
Los Angeles Community College2642 MUN 275,000.0054438CYL0 08/01/2026 1,3081.17412/21/2021 242,104.50 1.282 1.300273,796.84
Los Angeles Cnty Met Tran Auth2641 MUN 1,000,000.005447122K7 06/01/2025 8825.13012/21/2021 1,003,710.00 1.085 1.1001,095,239.17
Los Angeles Dept. of WTR & PWR1949 MUN 1,500,000.00544495VX9 07/01/2027 1,6425.51603/29/2018 1,534,305.00 3.254 3.3001,627,946.94
Los Angeles Dept. of WTR & PWR1965 MUN 425,000.00544495VX9 07/01/2027 1,6425.51610/29/2018 434,719.75 3.600 3.650455,342.96
State of Massachusetts2227 MUN 250,000.0057582PUT5 05/01/2029 2,3124.91001/30/2020 249,502.50 2.331 2.363286,025.85
State of Massachusetts2543 MUN 1,000,000.0057582PUT5 05/01/2029 2,3124.91007/01/2021 998,010.00 1.484 1.5051,203,025.11
State of Massachusetts2684 MUN 1,000,000.0057582PUS7 05/01/2027 1,5814.76004/05/2022 999,390.00 2.968 3.0101,069,815.55
State of Maryland1943 MUN 1,280,000.005741925D8 03/01/2023 594.40003/20/2018 1,280,051.20 2.633 2.6701,283,435.09
State of Maryland2184 MUN 500,000.005741926N5 08/01/2025 9434.35012/16/2019 496,265.00 2.089 2.118527,027.41
State of Maryland2581 MUN 245,000.005741926N5 08/01/2025 9434.35009/23/2021 243,169.85 0.690 0.700267,750.53
State of Maryland - Dept/Trans2134 MUN 1,000,000.00574204WH2 06/15/2023 1654.45010/15/2019 999,840.00 1.893 1.9201,011,074.97
State of Michigan2002 MUN 825,000.005946108C4 05/15/2026 1,2303.85012/21/2018 805,810.50 3.452 3.500833,500.39
Milpitas Unified School Distr2746 MUN 630,000.00601670ML3 08/01/2028 2,0391.45112/02/2022 526,024.80 4.802 4.869526,005.09
City of Manhattan Beach2647 MUN 650,000.00562784AM0 01/01/2032 3,2872.34101/05/2022 516,444.50 2.129 2.159658,609.07
Menlo Park City School Dist.2104 MUN 1,000,000.00586840ND8 07/01/2027 1,6422.21410/08/2019 897,800.00 2.183 2.2141,000,000.00
Mtn. View-Whisman School Dist.2708 MUN 1,135,000.0062451FJE1 09/01/2026 1,3391.89310/19/2022 1,037,015.45 4.487 4.5501,034,614.14
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 24 Packet Pg. 251 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 15
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Marin Community College Dist.1858 MUN 500,000.0056781RGU5 08/01/2027 1,6733.27209/28/2017 469,010.00 2.791 2.830508,780.91
Marin Community College Dist.1973 MUN 120,000.0056781RGT8 08/01/2026 1,3083.17211/05/2018 113,878.80 3.452 3.500118,771.49
Marin Community College Dist.2084 MUN 250,000.0056781RJL2 08/01/2027 1,6733.33008/29/2019 235,095.00 1.874 1.900265,143.32
Marin Community College Dist.2287 MUN 310,000.0056781RJJ7 08/01/2025 9435.00003/06/2020 312,145.20 1.193 1.210339,292.47
Marin Community College Dist.2495 MUN 1,000,000.0056781RKH9 08/01/2030 2,7691.45102/25/2021 781,690.00 1.431 1.4511,000,000.00
Marin Community College Dist.2499 MUN 710,000.0056781RKH9 08/01/2030 2,7691.45102/25/2021 554,999.90 1.470 1.490708,002.34
Marin Community College Dist.2568 MUN 1,000,000.0056781RKU0 08/01/2026 1,3080.89309/14/2021 874,870.00 0.880 0.8931,000,000.00
Marin Community College Dist.2588 MUN 285,000.0056781RKD8 08/01/2026 1,3080.67909/29/2021 247,354.35 1.025 1.040281,412.14
Mt. San Antonio Community Coll1489 MUN 1,335,000.00623040GX4 08/01/2023 2124.10310/26/2015 1,333,825.20 2.490 2.5251,346,092.63
Mt. San Antonio Community Coll2208 MUN 230,000.00623040KQ4 08/01/2029 2,4042.56902/04/2020 202,084.90 2.533 2.569230,000.00
Mt. San Antonio Community Coll2661 MUN 785,000.00623040KX9 08/01/2030 2,7692.64902/07/2022 677,415.75 2.173 2.203809,083.00
State of Mississippi1968 MUN 1,500,000.00605581LM7 11/01/2026 1,4003.75111/07/2018 1,452,405.00 3.377 3.4241,516,270.46
State of Mississippi1972 MUN 500,000.00605581LM7 11/01/2026 1,4003.75111/07/2018 484,135.00 3.401 3.449505,003.34
State of Mississippi2087 MUN 750,000.00605581HL4 12/01/2024 7002.98708/30/2019 727,627.50 1.745 1.770766,630.61
State of Mississippi2090 MUN 500,000.00605581HL4 12/01/2024 7002.98709/04/2019 485,085.00 1.783 1.807510,732.11
State of Mississippi2096 MUN 150,000.006055805W5 11/01/2025 1,0354.68109/09/2019 150,075.00 1.888 1.914161,071.75
State of Mississippi2189 MUN 250,000.006055805V7 11/01/2024 6704.51112/19/2019 249,515.00 2.079 2.108260,413.27
State of Mississippi2329 MUN 1,000,000.00605581LJ4 11/01/2023 3043.40803/20/2020 989,220.00 1.626 1.6491,014,132.20
State of Mississippi2626 MUN 1,000,000.00605581QR1 10/01/2031 3,1952.11712/09/2021 811,610.00 1.992 2.0201,007,652.04
State of Mississippi2629 MUN 250,000.00605581LL9 11/01/2025 1,0353.64612/06/2021 243,352.50 1.080 1.095267,639.47
State of Mississippi2713 MUN 1,000,000.00605581FF9 10/01/2032 3,5613.72910/21/2022 921,620.00 4.961 5.030906,151.62
City of Napa Solid Waste2055 MUN 595,000.00630337AL7 08/01/2024 5782.20008/08/2019 570,248.00 1.968 1.996596,819.64
New York St Envrnmntl Facs2007 MUN 450,000.0064985HWS2 07/15/2024 5612.12001/04/2019 432,918.00 2.860 2.900445,041.55
New York State Urban Dev Corp.2097 MUN 700,000.006500357D4 03/15/2026 1,1693.07009/09/2019 668,206.00 2.071 2.100720,239.76
New York State Urban Dev Corp.2683 MUN 1,000,000.00650036AV8 03/15/2027 1,5341.49603/28/2022 871,030.00 2.777 2.816948,513.83
New York State Envrnmntl Corp2022 MUN 1,000,000.00649791CN8 03/01/2023 594.69001/22/2019 1,000,200.00 2.752 2.7911,002,969.57
New York State Envrnmntl Corp2024 MUN 1,000,000.00649791CN8 03/01/2023 594.69002/08/2019 1,000,200.00 2.751 2.7901,002,973.34
New York State Envrnmntl Corp2146 MUN 1,500,000.00649791PQ7 02/15/2025 7762.12010/31/2019 1,424,985.00 2.063 2.0911,500,884.31
New York State Envrnmntl Corp2224 MUN 580,000.00649791PS3 02/15/2027 1,5062.36001/30/2020 529,905.40 1.933 1.960588,889.01
New York State Envrnmntl Corp2575 MUN 1,500,000.00649791PR5 02/15/2026 1,1412.26009/13/2021 1,396,845.00 0.794 0.8051,566,804.57
New York State Envrnmntl Corp2677 MUN 1,000,000.00649791PS3 02/15/2027 1,5062.36003/16/2022 913,630.00 2.325 2.3581,000,067.11
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 25 Packet Pg. 252 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 16
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
New York State Envrnmntl Corp2678 MUN 1,000,000.00649791PS3 02/15/2027 1,5062.36003/21/2022 913,630.00 2.367 2.400998,435.24
City of Oakland2293 MUN 1,500,000.00672240WY0 01/15/2030 2,5712.11003/09/2020 1,250,040.00 1.436 1.4561,564,014.59
City of Oakland2307 MUN 1,500,000.00672240WY0 01/15/2030 2,5712.11003/13/2020 1,250,040.00 1.638 1.6611,543,558.04
City of Oakland2313 MUN 1,080,000.00672240WY0 01/15/2030 2,5712.11003/16/2020 900,028.80 2.247 2.2791,068,470.05
City of Oakland2316 MUN 1,500,000.00672240WX2 01/15/2029 2,2062.07003/16/2020 1,280,835.00 2.151 2.1811,490,767.85
City of Oakland Pension2630 MUN 450,000.00672319CF5 12/15/2025 1,0794.67612/06/2021 445,878.00 1.562 1.584489,679.27
Ohlone Community College Distr2165 MUN 600,000.00677765GY9 08/01/2027 1,6732.23711/22/2019 542,178.00 2.271 2.303598,333.91
Ohlone Community College Distr2175 MUN 280,000.00677765GY9 08/01/2027 1,6732.23712/06/2019 253,016.40 2.327 2.360278,561.18
Ohlone Community College Distr2179 MUN 970,000.00677765HA0 08/01/2029 2,4042.33712/11/2019 838,681.40 2.382 2.415965,561.20
Ohlone Community College Distr2341 MUN 1,185,000.00677765GZ6 08/01/2028 2,0392.28705/08/2020 1,047,931.05 1.849 1.8751,210,120.76
State of Ohio1688 MUN 800,000.00677522JB1 05/01/2023 1202.11009/13/2016 794,568.00 1.764 1.788800,804.02
State of Ohio1742 MUN 2,000,000.00677522JB1 05/01/2023 1202.11001/31/2017 1,986,420.00 2.485 2.5201,997,483.73
State of Ohio1832 MUN 900,000.006775207G7 04/01/2024 4564.97106/30/2017 904,860.00 2.416 2.450925,985.97
State of Ohio2308 MUN 500,000.00677521CT1 09/01/2026 1,3395.26203/13/2020 510,205.00 1.710 1.734560,919.59
Orange Cnty Water District2578 MUN 315,000.0068442CCY0 08/15/2025 9572.09509/16/2021 294,147.00 0.690 0.700326,345.69
Orchard School District1910 MUN 200,000.00685585FD8 08/01/2027 1,6733.12501/25/2018 191,436.00 3.208 3.253199,020.75
State of Oregon1974 MUN 500,000.0068607LXQ5 06/01/2027 1,6125.89211/06/2018 515,575.00 3.516 3.565537,584.76
State of Oregon2015 MUN 445,000.0068607LXQ5 06/01/2027 1,6125.89201/16/2019 458,861.75 3.537 3.587483,820.21
State of Oregon2223 MUN 570,000.0068609TDT2 05/01/2024 4863.22701/30/2020 561,079.50 1.641 1.664581,415.79
State of Oregon2230 MUN 495,000.0068607LXQ5 06/01/2027 1,6125.89201/31/2020 510,419.25 2.583 2.619559,693.12
State of Oregon2266 MUN 1,000,000.0068607LXQ5 06/01/2027 1,6125.89202/24/2020 1,031,150.00 2.482 2.5171,135,408.22
State of Oregon2310 MUN 350,000.0068609BXT9 05/01/2027 1,5813.08003/13/2020 329,413.00 1.302 1.320375,354.26
State of Oregon2378 MUN 355,000.0068609TVS4 06/01/2030 2,7081.67207/02/2020 285,750.15 1.433 1.452360,354.06
State of Oregon2542 MUN 870,000.0068608KA24 08/01/2030 2,7695.33207/01/2021 898,866.60 1.943 1.9701,072,110.84
State of Oregon2549 MUN 1,225,000.0068609TU30 08/01/2028 2,0391.48407/08/2021 1,037,134.00 1.134 1.1501,246,872.68
State of Oregon2584 MUN 265,000.0068609TT81 08/01/2025 9430.80309/24/2021 241,306.35 0.690 0.700265,692.97
State of Oregon2624 MUN 250,000.0068609TZT8 08/01/2026 1,3080.98411/19/2021 220,970.00 1.292 1.310247,175.27
State of Oregon2627 MUN 900,000.0068609T3M8 11/01/2031 3,2262.03711/26/2021 718,605.00 2.020 2.048899,135.40
State of Oregon2679 MUN 1,000,000.0068607LXQ5 06/01/2027 1,6125.89204/01/2022 1,031,150.00 3.259 3.3041,104,230.48
City of Pacifica2138 MUN 1,015,000.0069511AAS3 06/01/2025 8822.56310/23/2019 959,966.70 2.469 2.5031,016,334.64
City of Pacifica2139 MUN 580,000.0069511AAT1 06/01/2026 1,2472.66310/23/2019 536,900.20 2.611 2.647580,270.00
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 26 Packet Pg. 253 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 17
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Pasadena CA Public Finance Aut1985 MUN 665,000.00702274CP4 12/01/2023 3343.43812/06/2018 654,898.65 3.205 3.250666,048.96
Pasadena CA Public Finance Aut2573 MUN 120,000.0070227RBM1 05/01/2026 1,2161.98409/09/2021 109,004.40 0.903 0.915124,176.17
Pasadena CA Public Finance Aut2615 MUN 550,000.00702274CS8 12/01/2026 1,4303.50012/01/2021 525,816.50 1.380 1.400593,540.02
Polomar Community Clge Distri2582 MUN 1,000,000.00697511FU2 08/01/2026 1,3081.03110/13/2021 876,340.00 1.016 1.0311,000,000.00
Polomar Community Clge Distri2676 MUN 335,000.00697511FD0 08/01/2026 1,3081.19903/15/2022 295,403.00 2.288 2.320322,271.32
Redondo Beach Unified School D2388 MUN 750,000.00757710UE6 08/01/2030 2,7691.66008/06/2020 590,745.00 1.439 1.459760,616.24
Redondo Beach Unified School D2763 MUN 715,000.00757710UE6 08/01/2030 2,7691.66012/14/2022 563,176.90 4.783 4.850571,847.53
City of Redondo Beach2724 MUN 725,000.00757696AX7 05/01/2031 3,0422.19111/07/2022 574,635.00 5.917 6.000546,684.18
State of Rhode Island2192 MUN 260,000.0076222RYN6 01/15/2025 7452.00012/20/2019 246,974.00 2.231 2.262259,773.08
State of Rhode Island2219 MUN 1,500,000.0076222RXB3 04/01/2028 1,9173.25001/27/2020 1,397,220.00 2.077 2.1061,582,295.89
State of Rhode Island2239 MUN 550,000.0076222RXB3 04/01/2028 1,9173.25002/06/2020 512,314.00 1.990 2.018582,630.03
Riverside Cmnty College Distt.2596 MUN 1,365,000.0076886PJP9 08/01/2026 1,3081.12410/04/2021 1,208,994.15 1.006 1.0201,369,947.01
Riverside Cmnty College Distt.2733 MUN 560,000.0076886PJS3 08/01/2029 2,4041.78511/17/2022 462,420.00 5.022 5.092457,788.01
Rancho Santiago Comm College D2522 MUN 450,000.00752147HH4 09/01/2024 6090.63403/29/2021 421,096.50 0.625 0.633450,000.00
Redwood City School District2130 MUN 1,000,000.00757889EH9 08/01/2027 1,6732.28410/16/2019 894,970.00 2.252 2.2841,000,000.00
Redwood City School District2253 MUN 1,095,000.00757889EG1 08/01/2026 1,3082.15902/13/2020 1,000,238.70 1.727 1.7511,110,065.99
City of Santa Ana2603 MUN 175,000.00801139AE6 08/01/2026 1,3081.17610/18/2021 152,694.50 1.223 1.240174,610.87
City of Santa Ana2747 MUN 1,250,000.00801139AF3 08/01/2027 1,6731.46512/02/2022 1,063,312.50 5.178 5.2501,059,793.03
Santa Barbara Unified School D2385 MUN 490,000.00801315KU5 08/01/2029 2,4041.65307/21/2020 401,329.60 1.483 1.504494,462.97
San Bernardino Cmty College Di2166 MUN 1,500,000.00796720NC0 08/01/2028 2,0392.59012/12/2019 1,331,550.00 2.554 2.5901,500,000.00
San Bernardino Cmty College Di2365 MUN 2,000,000.00796720NV8 08/01/2029 2,4041.84807/07/2020 1,654,500.00 1.822 1.8482,000,000.00
San Bernardino Cmty College Di2723 MUN 500,000.00796720NF3 08/01/2031 3,1342.84011/04/2022 424,270.00 5.482 5.558408,561.73
County of Santa Clara1897 MUN 1,340,000.00801546PH9 08/01/2023 2122.50001/11/2018 1,326,466.00 2.436 2.4701,340,216.68
County of Santa Clara1899 MUN 1,460,000.00801546PJ5 08/01/2024 5782.68001/12/2018 1,418,536.00 2.643 2.6801,460,000.00
Santa Clarita Community Colleg2557 MUN 1,250,000.00801686TF3 08/01/2026 1,3081.14608/02/2021 1,102,737.50 0.742 0.7521,267,370.90
Santa Clara Vly Transportation2750 MUN 455,000.0080168NHY8 04/01/2030 2,6471.62212/05/2022 359,436.35 5.030 5.100360,234.77
Santa Clara Valley Water Dist.2181 MUN 1,555,000.0080168ACV7 06/01/2028 1,9782.43412/12/2019 1,380,964.40 2.416 2.4501,553,776.76
Santa Cruz County Capital Fin.1906 MUN 465,000.0080181PCT2 06/01/2024 5172.50001/25/2018 450,120.00 2.968 3.010461,960.41
Santa Cruz County Capital Fin.1907 MUN 465,000.0080181PCU9 06/01/2025 8822.75001/25/2018 441,736.05 3.008 3.050461,995.69
Santa Cruz County Capital Fin.1908 MUN 470,000.0080181PCV7 06/01/2026 1,2473.00001/25/2018 439,971.70 3.107 3.150468,199.04
Santa Cruz County Capital Fin.1909 MUN 280,000.0080181PCW5 06/01/2027 1,6123.00001/25/2018 256,883.20 3.205 3.250277,586.61
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 27 Packet Pg. 254 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 18
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Santa Cruz MET Transit Dist.2671 MUN 1,000,000.00801747AF3 08/01/2027 1,6732.47003/03/2022 902,510.00 2.030 2.0581,017,753.59
San Diego Unified Sch District2602 MUN 1,000,000.00797356DL3 07/01/2031 3,1031.98410/21/2021 799,360.00 1.824 1.8501,010,372.44
San Diego Unified Sch District2606 MUN 900,000.00797356DL3 07/01/2031 3,1031.98410/23/2021 719,424.00 2.024 2.053895,262.61
San Diego Unified Sch District2617 MUN 270,000.00797356DH2 07/01/2028 2,0081.59911/17/2021 229,440.60 1.712 1.736268,082.71
San Diego Unified Sch District2693 MUN 260,000.00797356DF6 07/01/2026 1,2771.20109/23/2022 232,317.80 4.053 4.110235,702.60
San Diego Unified Sch District2767 MUN 1,000,000.00797356DH2 07/01/2028 2,0081.59912/16/2022 849,780.00 4.241 4.300869,052.03
San Diego Community College Di2550 MUN 255,000.00797272QS3 08/01/2027 1,6732.40707/09/2021 230,231.85 1.007 1.021270,667.25
San Diego Community College Di2639 MUN 1,980,000.00797272RN3 08/01/2026 1,3081.44512/28/2021 1,767,783.60 1.193 1.2101,996,162.69
San Diego Community College Di2651 MUN 500,000.00797272RT0 08/01/2031 3,1342.11301/10/2022 401,035.00 2.120 2.150498,567.70
San Diego Regl Trans Commissio2632 MUN 200,000.00797400MR6 04/01/2026 1,1861.03612/08/2021 178,788.00 1.292 1.310198,274.09
San Diego Cnty Wtr Authority2580 MUN 875,000.00797412DN0 05/01/2026 1,2160.97109/17/2021 773,150.00 0.887 0.900877,019.23
San Diego Cnty Wtr Authority2600 MUN 210,000.00797412DM2 05/01/2025 8510.74310/08/2021 191,572.50 0.838 0.850209,484.41
San Diego Cnty Wtr Authority2604 MUN 250,000.00797412DN0 05/01/2026 1,2160.97110/20/2021 220,900.00 1.134 1.150248,548.74
San Diego Cnty Wtr Authority2623 MUN 750,000.00797412DN0 05/01/2026 1,2160.97111/19/2021 662,700.00 1.282 1.300742,028.09
San Diego Cnty Wtr Authority2688 MUN 1,275,000.00797412DQ3 05/01/2028 1,9471.33109/12/2022 1,063,452.00 3.945 4.0001,113,919.43
San Diego Cnty Wtr Authority2716 MUN 225,000.00797412DR1 05/01/2029 2,3121.43110/24/2022 182,353.50 5.079 5.150180,462.77
San Diego Cnty Wtr Authority2722 MUN 320,000.00797412DS9 05/01/2030 2,6771.53111/03/2022 252,627.20 5.207 5.280248,113.72
San Dieguito Union High Sch Di2536 MUN 430,000.00797508JW9 08/01/2026 1,3081.07406/09/2021 378,984.80 1.059 1.074430,000.00
San Dieguito Union High Sch Di2537 MUN 435,000.00797508JX7 08/01/2027 1,6731.37206/09/2021 374,939.55 1.353 1.372435,000.00
San Dieguito Union High Sch Di2674 MUN 435,000.00797508HF8 08/01/2026 1,3081.86003/11/2022 394,514.55 2.070 2.099431,455.52
Sequoia Union High School Dist2320 MUN 400,000.00817409N35 07/01/2025 9121.73503/18/2020 373,476.00 1.381 1.400403,215.97
Sequoia Union High School Dist2531 MUN 250,000.00817409N76 07/01/2029 2,3732.10304/30/2021 212,410.00 1.658 1.681256,365.18
City & County of San Francisco1509 MUN 1,000,000.00797646NC6 06/15/2025 8965.45011/27/2015 1,018,460.00 3.067 3.1101,049,378.52
City & County of San Francisco1711 MUN 2,105,000.00797646T48 06/15/2025 8962.29011/01/2016 1,982,846.85 2.219 2.2492,106,858.42
City & County of San Francisco1712 MUN 245,000.00797646T55 06/15/2026 1,2612.39011/01/2016 227,335.50 2.376 2.410244,847.79
City & County of San Francisco1839 MUN 230,000.00797646T48 06/15/2025 8962.29007/14/2017 216,653.10 2.682 2.720227,827.02
City & County of San Francisco2014 MUN 1,420,000.00797646ND4 06/15/2026 1,2615.60001/16/2019 1,459,802.60 3.304 3.3501,517,020.72
City & County of San Francisco2148 MUN 1,120,000.007976466C5 06/15/2029 2,3572.10010/31/2019 963,099.20 2.337 2.3691,102,619.92
City & County of San Francisco2762 MUN 575,000.007976466F8 06/15/2032 3,4532.35012/14/2022 471,925.50 4.744 4.810468,650.12
San Francisco Cmnty Facs Dist1937 MUN 680,000.0079772EBC2 09/01/2027 1,7043.25003/02/2018 631,556.80 3.451 3.499673,321.50
San Francisco Cmnty Facs Dist2132 MUN 350,000.0079772ECL1 09/01/2029 2,4353.64810/11/2019 320,505.50 2.398 2.431375,072.14
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 28 Packet Pg. 255 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 19
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
San Francisco Cmnty Facs Dist2309 MUN 130,000.0079772ECJ6 09/01/2027 1,7043.46803/13/2020 121,903.60 1.577 1.599140,635.07
San Francisco Cmnty Facs Dist2571 MUN 300,000.0079772ECF4 09/01/2024 6093.10808/30/2021 292,059.00 0.741 0.752311,627.57
San Francisco Cmnty Facs Dist2608 MUN 575,000.0079772EDY2 09/01/2031 3,1652.59111/03/2021 468,901.00 2.305 2.337586,241.75
San Francisco Cmnty Facs Dist2628 MUN 1,295,000.0079772EDA4 09/01/2026 1,3392.23611/29/2021 1,181,221.30 1.425 1.4451,331,107.63
SF Bay Area Rapid Transit Dist2029 MUN 200,000.00797669XW3 07/01/2023 1812.62102/25/2019 198,266.00 2.672 2.710199,916.09
SF Bay Area Rapid Transit Dist2572 MUN 500,000.00797669ZJ0 07/01/2024 5471.97109/08/2021 480,420.00 0.419 0.425511,496.59
SF Bay Area Rapid Transit Dist2636 MUN 480,000.00797669ZR2 07/01/2031 3,1032.76812/16/2021 403,603.20 1.846 1.872513,315.75
SF Bay Area Rapid Transit Dist2638 MUN 600,000.00797669XW3 07/01/2023 1812.62112/20/2021 594,798.00 0.572 0.580606,086.03
SF Bay Area Rapid Transit Dist2766 MUN 405,000.00797669ZR2 07/01/2031 3,1032.76812/15/2022 340,540.20 4.832 4.899345,624.24
Sierra Joint Com. College Dist2501 MUN 585,000.00826239GD1 08/01/2029 2,4041.44503/09/2021 469,210.95 1.425 1.445585,000.00
Sierra Joint Com. College Dist2535 MUN 500,000.00826239GD1 08/01/2029 2,4041.44505/27/2021 401,035.00 1.461 1.481498,872.96
San Juan Unified School Dist2707 MUN 545,000.00798306WQ5 08/01/2026 1,3081.20110/17/2022 478,809.75 4.586 4.650483,880.01
City of San Jose2656 MUN 350,000.00798135E96 09/01/2026 1,3392.50001/28/2022 319,235.00 1.686 1.710359,706.75
San Jose Financing Authority2622 MUN 345,000.00798153NF5 06/01/2026 1,2471.31111/18/2021 304,434.90 1.459 1.480343,079.64
San Jose Evergreen Cmnty Colll1966 MUN 315,000.00798189PK6 09/01/2027 1,7043.72810/29/2018 300,075.30 3.676 3.727315,000.00
San Jose Evergreen Cmnty Colll2105 MUN 500,000.00798189QA7 08/01/2028 2,0392.35010/01/2019 438,075.00 2.317 2.350500,000.00
San Jose Unified School Dist.1435 MUN 580,000.00798186C83 08/01/2023 2122.50001/29/2015 574,107.20 2.663 2.700579,398.96
San Jose Unified School Dist.2518 MUN 1,000,000.00798186N81 08/01/2025 9430.55803/15/2021 902,890.00 0.739 0.750995,125.76
San Jose Unified School Dist.2700 MUN 990,000.00798186P30 08/01/2028 2,0391.22410/07/2022 820,888.20 4.487 4.550830,038.27
San Jose Unified School Dist.2774 MUN 850,000.00798186P22 08/01/2027 1,6731.01412/21/2022 721,208.00 4.341 4.401731,716.87
Santa Maria JT Union High Sch2706 MUN 455,000.00802309NY6 08/01/2026 1,3081.50810/17/2022 406,005.60 4.586 4.650408,513.04
Santa Monica Cmnty College Dis2091 MUN 315,000.00802385RC0 08/01/2028 2,0393.47209/05/2019 293,173.65 1.972 2.000338,603.90
Santa Monica Cmnty College Dis2481 MUN 570,000.00802385RV8 08/01/2030 2,7691.69601/22/2021 452,733.90 1.499 1.520577,056.65
Santa Monica Cmnty College Dis2482 MUN 600,000.00802385RT3 08/01/2028 2,0391.49601/22/2021 501,216.00 1.085 1.100612,697.00
Santa Monica-Malibu USD2561 MUN 650,000.00802498VW2 07/01/2026 1,2770.98908/12/2021 574,457.00 0.877 0.890652,197.66
Santa Monica-Malibu USD2637 MUN 215,000.00802498ZA6 08/01/2026 1,3080.84912/20/2021 187,400.45 1.193 1.210212,301.64
Santa Monica-Malibu USD2752 MUN 865,000.00802498WA9 07/01/2030 2,7381.51012/07/2022 674,397.25 4.862 4.930681,658.11
San Mateo Cnty Comm. College D2521 MUN 2,000,000.00799038NP5 09/01/2024 6090.50004/14/2021 1,867,020.00 0.444 0.4502,001,646.67
San Mateo Cnty Comm. College D2523 MUN 1,500,000.00799038NP5 09/01/2024 6090.50004/14/2021 1,400,265.00 0.444 0.4501,501,235.00
San Mateo Foster City SCH Dist1902 MUN 1,000,000.00799017UW6 09/01/2025 9742.69901/16/2018 952,930.00 2.786 2.825996,988.85
San Mateo Foster City SCH Dist1940 MUN 1,000,000.00799017UW6 09/01/2025 9742.69903/09/2018 952,930.00 2.959 3.000992,853.49
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 29 Packet Pg. 256 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 20
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
San Mateo Foster City SCH Dist2153 MUN 1,360,000.00799017WD6 09/01/2028 2,0702.23711/07/2019 1,184,288.00 2.447 2.4801,343,218.93
San Mateo Foster City SCH Dist2178 MUN 1,565,000.00799017VM7 09/01/2028 2,0702.54212/11/2019 1,386,151.80 2.311 2.3431,580,790.15
San Mateo Foster City SCH Dist2567 MUN 500,000.00799017XW3 09/01/2026 1,3390.92509/21/2021 437,585.00 0.912 0.925500,000.00
San Mateo Foster City SCH Dist2585 MUN 175,000.00799055QV3 08/01/2026 1,3081.79909/27/2021 158,473.00 0.897 0.910180,440.52
San Mateo Foster City SCH Dist2591 MUN 1,260,000.00799055ME5 08/01/2026 1,3086.00009/29/2021 1,298,026.80 2.297 2.3291,415,821.93
San Mateo Foster City SCH Dist2782 MUN 425,000.00799017WE4 09/01/2029 2,4352.33712/22/2022 362,457.00 4.685 4.750366,996.76
Solano Cnty Community Clg Dist2176 MUN 1,150,000.0083412PFQ0 08/01/2028 2,0392.71712/09/2019 1,033,114.00 2.462 2.4961,162,649.37
Solano Cnty Community Clg Dist2579 MUN 750,000.0083412PHQ8 08/01/2026 1,3081.02510/06/2021 660,727.50 1.011 1.025750,000.00
Solano Cnty Community Clg Dist2583 MUN 200,000.0083412PGZ9 08/01/2026 1,3081.02510/06/2021 176,194.00 0.887 0.900200,872.89
Solano Cnty Community Clg Dist2594 MUN 390,000.0083412PHE5 08/01/2031 3,1341.86110/06/2021 305,077.50 1.948 1.975386,522.77
Solano Cnty Community Clg Dist2597 MUN 750,000.0083412PHU9 08/01/2030 2,7691.76110/06/2021 600,397.50 1.834 1.860744,821.60
Solano Cnty Community Clg Dist2598 MUN 825,000.0083412PHW5 08/01/2031 3,1341.86110/06/2021 645,356.25 1.879 1.905822,150.03
Solano Cnty Community Clg Dist2649 MUN 350,000.0083412PHB1 08/01/2028 2,0391.47901/07/2022 293,464.50 1.775 1.800344,104.77
Solano Cnty Community Clg Dist2702 MUN 315,000.0083412PFT4 08/01/2031 3,1342.86710/11/2022 268,272.90 5.079 5.150265,856.57
Sonoma Cnty Jr. College Distr.2577 MUN 155,000.00835569GT5 08/01/2026 1,3082.44709/15/2021 143,486.60 0.843 0.855163,641.35
South Pasadena Unified School1914 MUN 180,000.00839278JM1 08/01/2027 1,6733.00002/15/2018 167,724.00 3.057 3.100179,288.56
South Pasadena Unified School2161 MUN 370,000.00839278KC1 08/01/2029 2,4045.00012/12/2019 375,032.00 2.598 2.634420,596.80
South Pasadena Unified School2162 MUN 250,000.00839278KB3 08/01/2028 2,0395.00012/12/2019 253,430.00 2.549 2.584280,046.56
South Pasadena Unified School2163 MUN 145,000.00839278KA5 08/01/2027 1,6735.00012/12/2019 146,931.40 2.500 2.534159,812.79
South Pasadena Unified School2164 MUN 390,000.00839278JZ2 08/01/2026 1,3085.00012/12/2019 394,781.40 2.378 2.411423,243.77
San Rafael City High Sch Distr2150 MUN 1,755,000.00799289MR1 08/01/2024 5781.96511/13/2019 1,684,361.25 1.938 1.9651,755,000.00
San Ramon Vly Unif Sch Dist.2605 MUN 1,500,000.007994082K4 08/01/2030 2,7691.91411/03/2021 1,215,975.00 1.805 1.8301,508,767.57
Sunnyvale Elementary Sch Distr2100 MUN 135,000.00867578UT1 09/01/2028 2,0702.19009/19/2019 117,288.00 2.157 2.187135,000.00
Sunnyvale Elementary Sch Distr2101 MUN 135,000.00867578US3 09/01/2027 1,7042.09009/19/2019 119,749.05 2.061 2.090135,000.00
Tracy Unified School District2493 MUN 500,000.00892404CN2 08/01/2029 2,4041.64402/08/2021 411,620.00 1.437 1.457505,760.04
Temecula Valley Unified School2539 MUN 250,000.0087970GPS0 08/01/2028 2,0391.50306/16/2021 206,657.50 1.482 1.503250,000.00
Temecula Valley Unified School2569 MUN 355,000.0087970GPQ4 08/01/2026 1,3081.05108/27/2021 309,375.40 0.887 0.900356,874.14
State of Tennessee1673 MUN 1,000,000.00880541XY8 08/01/2026 1,3082.11608/25/2016 924,590.00 1.923 1.9501,005,378.61
State of Tennessee1674 MUN 1,650,000.00880541XX0 08/01/2025 9432.06608/25/2016 1,557,567.00 1.893 1.9201,655,684.01
State of Tennessee1676 MUN 700,000.00880541XX0 08/01/2025 9432.06608/25/2016 660,786.00 1.893 1.920702,411.40
State of Tennessee2001 MUN 205,000.00880541QU4 08/01/2024 5783.72812/20/2018 203,019.70 2.860 2.900207,461.89
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 30 Packet Pg. 257 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 21
CUSIP Investment #Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Municipal Bonds
Tustin Unif Sch Dist Facs Impt2715 MUN 650,000.00901072LD8 08/01/2027 1,6731.14510/24/2022 551,609.50 4.783 4.850552,488.08
Tustin Unif Sch Dist Facs Impt2720 MUN 295,000.00901072MB1 08/01/2031 3,1341.75410/31/2022 224,229.50 5.543 5.620218,493.46
Tustin Unif Sch Dist Facs Impt2758 MUN 205,000.00901072MB1 08/01/2031 3,1341.75412/09/2022 155,820.50 4.843 4.910160,176.08
State of Texas2195 MUN 1,500,000.008827237P8 10/01/2025 1,0043.05112/23/2019 1,447,860.00 1.975 2.0031,540,605.25
State of Texas2225 MUN 940,000.008827237T0 10/01/2029 2,4653.52101/30/2020 878,712.00 2.191 2.2211,013,821.46
State of Texas2255 MUN 1,265,000.008827237T0 10/01/2029 2,4653.52102/14/2020 1,182,522.00 2.192 2.2221,364,302.68
State of Texas2311 MUN 250,000.008827237N3 10/01/2024 6392.89903/16/2020 243,670.00 1.231 1.248256,999.36
State of Texas2541 MUN 245,000.008827235K1 10/01/2025 1,0042.92206/30/2021 235,677.75 0.641 0.650260,072.64
State of Texas2548 MUN 1,000,000.00882724RF6 10/01/2030 2,8302.42607/02/2021 851,200.00 1.480 1.5011,066,686.78
State of Texas2631 MUN 500,000.00882723A90 10/01/2025 1,0042.83112/07/2021 479,810.00 1.030 1.045524,007.86
University of California2077 MUN 1,500,000.0091412GQG3 05/15/2025 8653.05008/26/2019 1,446,015.00 1.930 1.9571,536,588.45
University of California2095 MUN 1,000,000.0091412GQG3 05/15/2025 8653.05009/09/2019 964,010.00 1.797 1.8211,027,548.39
University of California2685 MUN 440,000.0091412HGF4 05/15/2027 1,5951.31604/05/2022 379,478.00 3.028 3.070408,985.36
State of Utah1731 MUN 285,000.00917542QR6 07/01/2024 5474.55401/04/2017 283,857.15 2.904 2.944291,132.60
State of Utah2306 MUN 1,101,100.00917542QV7 07/01/2025 9123.53903/13/2020 1,080,057.98 1.948 1.9751,141,762.79
Vacaville Unified School Distr2726 MUN 250,000.00918608UR9 08/01/2030 2,7691.73911/10/2022 198,555.00 5.513 5.590191,355.56
State of Washington1802 MUN 485,000.0093974CRC6 08/01/2024 5784.66905/23/2017 487,037.00 2.416 2.450500,532.69
State of Washington2196 MUN 500,000.0093974CRC6 08/01/2024 5784.66912/24/2019 502,100.00 1.978 2.005520,042.88
State of Wisconsin2547 MUN 2,000,000.0097705MNU5 05/01/2031 3,0422.45107/02/2021 1,664,840.00 1.553 1.5752,134,749.93
State of Wisconsin2574 MUN 1,500,000.0097705MNP6 05/01/2026 1,2162.08909/09/2021 1,380,705.00 0.739 0.7501,565,669.86
State of Wisconsin2576 MUN 1,000,000.0097705MNP6 05/01/2026 1,2162.08909/13/2021 920,470.00 0.769 0.7801,042,762.59
Yosemite Community College Dis2657 MUN 1,000,000.00987388GX7 08/01/2027 1,6732.08202/17/2022 890,040.00 2.053 2.0821,000,000.00
Yosemite Community College Dis2687 MUN 500,000.00987388GX7 08/01/2027 1,6732.08209/02/2022 445,020.00 3.846 3.900462,410.97
Subtotal and Average 220,433,497.02 220,816,100.00 200,862,272.28 2.285 2.317 1,580
Supranationals (World Bank) Bonds
Inter-American Dev. Bank2528 IADB 2,000,000.004581X0DV7 04/20/2026 1,2050.87504/20/2021 1,789,400.00 0.910 0.9231,996,895.39
Inter-American Dev. Bank2586 IADB 2,000,000.0045818WDH6 06/17/2026 1,2630.80009/27/2021 1,777,360.00 0.914 0.9271,991,403.00
Inter-American Dev. Bank2652 IADB 1,000,000.004581X0EB0 01/13/2027 1,4731.50001/13/2022 899,910.00 1.504 1.525999,015.87
Inter-American Dev. Bank2655 IADB 1,000,000.004581X0EB0 01/13/2027 1,4731.50001/14/2022 899,910.00 1.518 1.540998,450.34
Intl Bk Recon & Development1976 IBRD 1,500,000.00459056LD7 01/19/2023 187.62511/08/2018 1,501,875.00 3.111 3.1551,503,115.80
Intl Bk Recon & Development1982 IBRD 1,000,000.00459058GL1 09/27/2023 2693.00011/27/2018 985,970.00 3.018 3.060999,586.92
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 31 Packet Pg. 258 of 269
December 31, 2022
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 22
CUSIP Investment # Issuer
Purchase
Date Book Value
YTM
360
YTM
365
Supranationals (World Bank) Bonds
Intl Bk Recon & Development2470 IBRD 1,500,000.00459058JL8 10/28/2025 1,0310.50001/08/2021 1,347,570.00 0.480 0.4871,500,527.31
Intl Bk Recon & Development2492 IBRD 1,500,000.00459058JS3 02/10/2026 1,1360.65002/10/2021 1,301,895.00 0.641 0.6501,500,000.00
Intl Bk Recon & Development2497 IBRD 1,500,000.0045905U5Y6 02/18/2026 1,1440.60002/18/2021 1,332,360.00 0.591 0.6001,500,000.00
Intl Bk Recon & Development2498 IBRD 1,500,000.00459058JL8 10/28/2025 1,0310.50002/18/2021 1,347,570.00 0.591 0.6001,495,826.99
Intl Bk Recon & Development2510 IBRD 1,500,000.00459058JL8 10/28/2025 1,0310.50003/01/2021 1,347,570.00 0.787 0.7981,487,619.53
Intl Bk Recon & Development2534 IBRD 1,500,000.00459058JS3 02/10/2026 1,1360.65005/26/2021 1,301,895.00 0.833 0.8451,491,103.16
Intl Bk Recon & Development2553 IBRD 1,500,000.00459058JS3 02/10/2026 1,1360.65007/15/2021 1,301,895.00 0.839 0.8511,490,816.72
Intl Bk Recon & Development2559 IBRD 1,500,000.00459058JS3 02/10/2026 1,1360.65008/12/2021 1,301,895.00 0.871 0.8831,489,363.62
Intl Bk Recon & Development2650 IBRD 1,000,000.0045906M2L4 02/24/2026 1,1500.65001/07/2022 889,230.00 1.368 1.387977,522.86
Intl Bk Recon & Development2673 IBRD 1,000,000.0045906M2Z3 03/17/2025 8062.05003/17/2022 947,230.00 2.107 2.136998,157.41
Intl Bk Recon & Development2735 IBRD 2,000,000.0045906M3K5 09/30/2027 1,7334.50011/22/2022 1,979,720.00 4.684 4.7491,978,979.69
Intl Bk Recon & Development2736 IBRD 1,000,000.0045906M2L4 02/24/2026 1,1500.65011/23/2022 889,230.00 4.480 4.542887,280.53
Intl Bk Recon & Development2744 IBRD 1,500,000.0045906M3K5 09/30/2027 1,7334.50012/01/2022 1,484,790.00 4.681 4.7461,484,374.30
Intl Bk Recon & Development2775 IBRD 1,000,000.00459058JN4 11/24/2027 1,7880.75012/21/2022 849,690.00 3.807 3.860862,493.95
Intl Bk Recon & Development2779 IBRD 1,500,000.00459058JT1 02/10/2027 1,5010.85012/22/2022 1,302,615.00 4.241 4.3001,307,090.39
International Finance Corp.2441 IFC 1,000,000.0045950VPE0 10/15/2025 1,0180.35010/30/2020 897,830.00 0.306 0.3101,000,000.00
International Finance Corp.2454 IFC 1,500,000.0045950VPH3 11/15/2025 1,0490.25011/30/2020 1,356,285.00 0.683 0.6921,500,000.00
International Finance Corp.2483 IFC 1,500,000.0045950VPJ9 01/15/2026 1,1100.58001/25/2021 1,336,830.00 0.501 0.5081,503,208.66
International Finance Corp.2502 IFC 1,500,000.0045950VPJ9 01/15/2026 1,1100.58002/11/2021 1,336,830.00 0.522 0.5301,502,238.57
International Finance Corp.2503 IFC 1,500,000.0045950VPS9 02/26/2026 1,1520.50002/26/2021 1,327,035.00 0.616 0.6251,494,188.89
International Finance Corp.2514 IFC 2,000,000.0045950VPT7 03/15/2026 1,1690.50003/15/2021 1,798,400.00 0.808 0.8192,000,000.00
International Finance Corp.2515 IFC 1,500,000.0045950VPU4 03/23/2026 1,1770.75003/23/2021 1,334,820.00 0.746 0.7571,499,651.40
International Finance Corp.2517 IFC 2,000,000.0045950VPU4 03/23/2026 1,1770.75003/23/2021 1,779,760.00 0.887 0.9001,990,536.16
International Finance Corp.2532 IFC 1,500,000.0045950VPY6 05/15/2026 1,2300.50005/28/2021 1,350,360.00 1.006 1.0201,500,000.00
International Finance Corp.2654 IFC 1,000,000.0045950KCX6 10/08/2026 1,3760.75001/12/2022 876,460.00 1.518 1.540971,383.42
Subtotal and Average 43,900,830.88 44,500,000.00 40,174,190.00 1.515 1.536 1,162
Total Investments and Average 579,025,051.48 579,255,764.57 525,303,826.25 1.951 1.979 1,413
Portfolio CPA
AP
Run Date: 01/23/2023 - 03:12 FI (PRF_FI) 7.3.11
Report Ver. 7.3.11
Item 10
Attachment B - Investment Portfolio
Item 10: Staff Report Pg. 32 Packet Pg. 259 of 269
1 General Investment Guidelines:Full Compliance
a) The max. stated final maturity of individual securities in the portfolio should be 10 years.
b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities 29.33%
beyond 5 years.
c) The City shall maintain a minimum of one month's cash needs in short term investments.
d) At least $50 million shall be maintained in securities maturing in less than 2 years.
Plus two managed pool accounts which provide instant liquidity:
- Local Agency Investment Fund (LAIF) - maximum investment limit is $75 million $18 million
- Fidelity Investments $12.8 million
e) Should market value of the portfolio fall below 95 percent of the book value, report this fact within a 83.80%
reasonable time to the City Council and evaluate if there are risk of holding securities to maturity.
d) Commitments to purchase securities newly introduced on the market shall be made no more than
three (3) working days before pricing.
f) Whenever possible, the City will obtain three or more quotations on the purchase or sale of
comparable securities (excludes new issues, LAIF, City of Palo Alto bonds, money market
accounts, and mutual funds).
2 U.S. Government Securities:Full Compliance
a) There is no limit on purchase of these securities.
b) Securities will not exceed 10 years maturity.
3 U.S. Government Agency Securities:Full Compliance
a) There is no limit on purchase of these securities except for:
Callable and Multi-step-up securities provided that:
- The potential call dates are known at the time of purchase;
- the interest rates at which they "step-up" are known at the time of purchase; and
- the entire face value of the security is redeemed at the call date.
- No more than 25 percent of the par value of portfolio.24.79%
b) Securities will not exceed 10 years maturity.
4 California State, California Local Government Agencies, and other United States State Bonds:Full Compliance
a)Having at time of investment a minimum Double A (AA/Aa2) rating as provided by a nationally
recognized rating service (e.g., Moody’s, Fitch, and/or Standard and Poor’s).
b)May not exceed 40 percent of the par value of the portfolio.38.11%
5 Certificates of Deposit (CD):Full Compliance
a) May not exceed 20 percent of the par value of the portfolio;None Held
b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution.
c) Purchase collateralized deposits only from federally insured large banks that are rated by
a nationally recognized rating agency (e.g. Moody's, Fitch, and/or Standard & Poor's).
d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC)
e) Rollovers are not permitted without specific instruction from authorized City staff.
6 Banker's Acceptance Notes (BA):Full Compliance
a) No more than 30 percent of the par value of the portfolio.None Held
b) Not to exceed 180 days maturity.
c) No more than $5 million with any one institution.
Attachment C
Investment Policy Compliance
As of December 31, 2022
Investment Policy Requirements
Compliance
Check / Actual
$102.6 million
2.24%
Item 10
Attachment C -
Investment Policy
Compliance
Item 10: Staff Report Pg. 33 Packet Pg. 260 of 269
Attachment C
Investment Policy Compliance
As of December 31, 2022
Investment Policy Requirements
Compliance
Check / Actual
7 Commercial Paper:Full Compliance
a) No more than 15 percent of the par value of the portfolio.None Held
b) Having highest letter or numerical rating from a nationally recognized rating service.
c) Not to exceed 270 days maturity.
d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution,
whichever is lesser.
8 Short-Term Repurchase Agreement (REPO):Full Compliance
a) Not to exceed 1 year.None Held
b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or
greater of the funds borrowed against those securities.
9 Money Market Deposit Accounts Full Compliance
a) Liquid bank accounts which seek to maintain a net asset value of $1.00.
10 Mutual Funds:Full Compliance
a) No more than 20 percent of the par value of the portfolio.None Held
b) No more than 10 percent of the par value with any one institution.
11 Negotiable Certificates of Deposit (NCD):Full Compliance
a) No more than 20 percent of the par value of the portfolio.5.68%
b) No more than $5 million in any one institution.Federally Insured
12 Medium-Term Corporate Notes:Full Compliance
a) No more than 10 percent of the par value of the portfolio.4.68%
b) Not to exceed 5 years maturity.
c) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally
recognized rating service.
d) No more than $5 million of the par value may be invested in securities of any single issuer, other
than the U.S. Government, its agencies and instrumentality.
e) If securities owned by the City are downgraded by either rating agencies to a level below AA it
shall be the City's policy to review the credit situation and make a determination as to whether
to sell or retain such securities.
13 Supranational Organizations Securities:Full Compliance
a) Securities will not exceed 5 years maturity
b) No more than 20 percent of the par value of the portfolio.7.68%
c) No more than 10 percent in any one institution.
d) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally
recognized rating service.
14 Prohibited Investments:
a) Reverse Repurchase Agreements
b) Derivatives as defined in Appendix B of the Investment Policy
15 All securities shall be delivered to the City's safekeeping custodian, and held in the name of the
City, with the exception of :
- Certificates of Deposit, Mutual Funds, and Local Agency Investment Fund (LAIF)
Full Compliance
None Held
Full Compliance
Item 10
Attachment C -
Investment Policy
Compliance
Item 10: Staff Report Pg. 34 Packet Pg. 261 of 269
1https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-agendas-
minutes/2022/20220620/20220620pccsm-amended-final-final.pdf#page=820&zoom=100,0,0
CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Information
Lead Department: Planning and Development Services
Meeting Date: February 13, 2023
TITLE
Accessory Dwelling Unit (ADU) Annual Report 2022 Year End Summary
RECOMMENDATION
This is an informational report and no action is required.
BACKGROUND
The Accessory Dwelling Unit (ADU) Annual Report provides information related to ADU permit
applications processed and approved each year by the City of Palo Alto. In June 2017, the City
amended Zoning Code (Title 18) to comply with updated State ADU requirements. Subsequently,
the State adopted additional ADU legislation in late 2019, effective January 1, 2020. In response,
City Council adopted an Interim Urgency Ordinance (Ordinance 5489) for temporary
conformance. In November 2020, Council replaced the interim ordinance and adopted the City’s
current ADU Ordinance (Ordinance 5507) and directed staff to regularly report on the number of
ADU permit applications. The last annual report for calendar year 2021 was published on June
20, 2022 (Report ID # 139641).
DISCUSSION
Since 2015, Planning and Development Services (PDS) has received 542 ADU/JADU building
permit applications and issued 411 permits. In 2022, PDS received the highest volume of ADU
applications in a one-year period. These units ranged from 192 to 2,217 square feet, with an
average size of 589 square feet; approximately 52% and 48% of the applications were located
north and south, respectively, of Oregon Expressway. Further details can be found in Table 1 of
Attachment A.
Planning and Development Services publishes the Accessory Dwelling Units Report annually. The
next report is expected to be available in Q1 2024. Additionally, PDS will resume providing
quarterly reports throughout 2023.
STAKEHOLDER ENGAGEMENT
This is an informational report for the City Council and does not require any stakeholder
engagement.
Item 11
Item 11 Staff Report
Item 11: Staff Report Pg. 1 Packet Pg. 262 of 269
ENVIRONMENTAL REVIEW
This project is exempt from environment review under Section 15061 of the California
Environmental Quality Act Guidelines.
ATTACHMENTS
Attachment A: ADU Annual Report Data for 2022
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
Report #: 2212-0431
Item 11
Item 11 Staff Report
Item 11: Staff Report Pg. 2 Packet Pg. 263 of 269
Table 1: Summary of ADU Permits from 2015-2022
Category 2015 2016 2017 2018 2019 2020 2021 2022
New ADU Applications
Filed1 10 9 28 55 75 78 136 152
Permits: Ready to Issue
(City Approved)2 8 5 12 39 62 46 112 127
Permits: Issued (Permit
Obtained)3 8 5 12 36 62 43 89 120
Permits: Final
Inspection Approved4 3 4 9 12 33 46 37 62
Permits Expired 1 1
Detached ADUs
(Submitted)5 20 35 52 52 80 81
Detached ADUs
(Issued)5 8 24 41 33 55 64
Attached ADUs
(Submitted)6 8 20 23 20 56 44
Attached ADUs
(Issued)6 4 11 21 9 34 32
Junior ADUs
(Submitted)7 1 1 1 25 27
Junior ADUs (Issued)7 1 1 1 9 24
Average Application
Processing Time (Days
Including Weekends)8
127 214 118 183 135 197 162 193
Average Construction
Time (Days Including
Weekends)9
578 751 330 287 173 262 455 431
Item 11
Attachment A - 2022 ADU
Report Data
Item 11: Staff Report Pg. 3 Packet Pg. 264 of 269
City Impact Fees
Collected for New
ADUs10
$451,514 $402,012 $198,962 $44,057 $139,592 $540,453
ADU Size Smallest 150 SF 159 SF 220 SF 208 SF 178 SF 192 SF
ADU Size Largest 900 SF 900 SF 1,031 SF 1,000 SF 1,218 SF 2,217 SF
Average ADU Size 470 SF 469 SF 383 SF 518 SF 550 SF 589 SF
ADU
Location
relative to
Oregon
Expressway
North 46% 49% 52% 55% 49% 52%
South 54% 51% 48% 45% 51% 48%
Source: City of Palo Alto Accela Data January 2015 through December 2022
Notes:
1. Any ADU/JADU Application SUBMITTED for the year
2. Any ADU/JADU application Permit 'READY TO Issue' for the year (regardless of when it was submitted)
3. Any ADU/JADU Permit ISSUED for the year (regardless of when it was submitted)
4. Any ADU/JADU Permit receiving a Final Inspection (Ready to Occupy) for the year, regardless of when the
application wassubmitted. Years 2015-2017 data point not available.
5. Any Detached ADU Permit Application submitted for the year/Any Detached ADU Permit Issued for the year,
regardless of when the application was submitted. Years 2015-2016 data point not available.
6. Any Attached ADU Permit Application submitted for the year/Any Attached ADU Permit Issued for the year,
regardless of when the application was submitted. Years 2015-2016 data point not available.
7. Any JADU Permit Application submitted for the year/Any JADU Permit Issued for the year, regardless of when
the application was submitted. Years 2015-2016 data point not available.
Item 11
Attachment A - 2022 ADU
Report Data
Item 11: Staff Report Pg. 4 Packet Pg. 265 of 269
8. Average number of days from permit application submittal to when permit is approved and ready to issue. This
average includes weekends and days application is pending due to applicant preparation of resubmittal or
additional information from applicant.
9. Average number of days from permit issued to final inspection completed. This average includes weekends and
days staff is waiting for applicant to schedule the next required inspection; it also includes time related to the
construction of a primary residence when the J/ADU is built at the same time.
10. Impact Fees collected for ADU’s permitted for the year. Years 2015-2016 data point not available.
Item 11
Attachment A - 2022 ADU
Report Data
Item 11: Staff Report Pg. 5 Packet Pg. 266 of 269
# of
Apps Dwelling Type Project Location Zoning Date Filed Application Status Building Permit Issued?Attached Detached Attached2 Detached2 Garage Other Accessory
Structure/Space
# of
Bedrooms ADU Size
1 ADU SOUTH R-1 (7000)(S) 01/03/2022 Pending Resubmittal N x 1 436
2 JADU SOUTH R-1 01/10/2022 Permit Issued Y x 1 386
3 ADU SOUTH R-1 01/12/2022 Finaled Y x x 1 736
4 ADU NORTH R-1 01/18/2022 Permit Issued Y x x 0 457
5 JADU NORTH R-1 01/19/2022 Permit Issued Y x 1 497
6 ADU NORTH RM-30 01/22/2022 Pending Resubmittal N x 1 643
7 ADU SOUTH R-1 (8000) 01/24/2022 Permit Issued Y x 2 370
8 ADU NORTH R-1 (10000) 01/25/2022 Permit Issued Y x 1 608
9 ADU NORTH R-2 01/25/2022 Permit Issued Y x x 1 436
10 ADU NORTH R-1 01/26/2022 Permit Issued Y x 1 700
11 ADU SOUTH R-1 01/27/2022 Pending Resubmittal N x 2 749
12 JADU SOUTH R-1 01/31/2022 Incomplete N x x 3 734
13 ADU SOUTH R-1 01/31/2022 Permit Issued Y x 2 900
14 ADU NORTH R-1 02/02/2022 Finaled Y x x 1 379
15 ADU NORTH R-1 02/02/2022 Pending Resubmittal N x 0 288
16 ADU SOUTH R-1 02/09/2022 Finaled Y x 1 405
17 ADU NORTH R-1 02/09/2022 Pending Resubmittal N x 1 590
18 ADU NORTH R-1 02/11/2022 Permit Issued Y x x 1 630
19 ADU SOUTH R-1 (8000) 02/14/2022 Permit Issued Y x 1 790
20 JADU SOUTH R-1 02/15/2022 Permit Issued Y x x 1 229
21 ADU NORTH R-1 02/16/2022 Permit Issued Y x 1 790
22 ADU NORTH R-1 02/17/2022 Pending Resubmittal N x 1 800
23 ADU SOUTH R-1 02/18/2022 Permit Issued Y x 2 1,000
24 ADU NORTH R-1 02/23/2022 Pending Resubmittal N x 2 750
25 ADU SOUTH RE 02/24/2022 Pending Resubmittal N x 2 872
26 ADU NORTH RE 02/24/2022 Incomplete N x 1 995
27 ADU SOUTH R-1 02/25/2022 Permit Issued Y x 1 364
28 ADU SOUTH R-1 03/01/2022 Finaled Y x x 1 519
29 ADU NORTH R-1 03/01/2022 Permit Issued Y x 0 424
30 ADU NORTH R-1 03/03/2022 Pending Resubmittal N x 1 697
31 ADU SOUTH R-1 03/07/2022 Permit Issued Y x 1 576
32 ADU NORTH R-1 03/10/2022 Permit Issued Y x 1 529
33 ADU NORTH R-1 03/10/2022 Permit Issued Y x 1 726
34 ADU SOUTH R-1 03/11/2022 Pending Resubmittal N x 1 364
35 ADU SOUTH R-1 03/14/2022 Permit Issued Y x x 1 375
36 ADU NORTH R-1 03/15/2022 Permit Issued Y x 2 807
37 ADU NORTH R-1 03/21/2022 Permit Issued Y x 1 510
38 ADU NORTH R-1 03/21/2022 Permit Issued Y x 1 240
39 JADU NORTH RM-30 03/22/2022 Permit Issued Y x x 1 298
40 JADU SOUTH R-1 (8000) 03/22/2022 Permit Issued Y x x 0 445
41 ADU SOUTH R-1 03/23/2022 Permit Issued Y x 1 528
42 ADU SOUTH R-1 04/01/2022 Permit Issued Y x 2 862
43 ADU SOUTH R-1 04/12/2022 Permit Issued Y x 2 749
44 ADU NORTH R-1 04/13/2022 Permit Issued Y x 2 750
45 ADU NORTH R-1 04/14/2022 Permit Issued Y x x 1 2,217
46 JADU SOUTH R-1 04/19/2022 In Plan Check N x 1 332
47 ADU SOUTH R-1 (10000) 04/19/2022 Permit Issued Y x 1 192
48 ADU SOUTH R-1 04/19/2022 Permit Issued Y x 1 486
49 ADU SOUTH R-1 04/20/2022 Permit Issued Y x x 1 555
50 ADU NORTH R-1 04/26/2022 Permit Issued Y x x 1 660
51 ADU SOUTH R-1 04/27/2022 Pending Resubmittal N x 2 749
52 ADU SOUTH R-1 (8000) 04/29/2022 Permit Issued Y x 1 476
53 ADU NORTH R-1 05/03/2022 Permit Issued Y x 1 796
54 ADU SOUTH R-1 05/05/2022 Pending Resubmittal N x x 1 425
55 ADU SOUTH R-1 05/06/2022 Pending Resubmittal N x x 2 875
56 ADU SOUTH R-1 (8000) 05/09/2022 Permit Issued Y x 1 215
57 ADU NORTH R-2 05/10/2022 Permit Issued Y x 1 755
58 ADU NORTH R-1 05/12/2022 Pending Resubmittal N x 1 428
59 JADU SOUTH R-1 05/18/2022 In Plan Check N x 1 499
60 ADU NORTH R-1 05/27/2022 Permit Issued Y x 1 633
Building Permits Submitted in 2022
Type of ConversionConversionNew Construction
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Data
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61 ADU SOUTH R-1 (20000) 05/31/2022 Pending Resubmittal N x x 1 544
62 ADU NORTH R-1 05/31/2022 Permit Issued Y x 2 799
63 ADU SOUTH R-1 (7000) 06/01/2022 Pending Resubmittal N x 1 450
64 ADU NORTH R-1 06/01/2022 Permit Issued Y x 1 683
65 JADU SOUTH R-1 06/07/2022 Permit Issued Y x 1 496
66 ADU NORTH R-1 06/09/2022 Permit Issued Y x x 1 800
67 ADU SOUTH R-1 06/14/2022 Permit Issued Y x x 1 363
68 JADU SOUTH R-1 06/16/2022 Permit Issued Y x 1 452
69 ADU NORTH R-1 06/17/2022 Permit Issued Y x 1 512
70 ADU NORTH R-1 06/22/2022 Pending Resubmittal N x 1 350
71 ADU NORTH R-1 06/23/2022 Permit Issued Y x 1 747
72 ADU NORTH RMD (NP) 06/28/2022 Pending Resubmittal N x x 1 226
73 JADU SOUTH R-1 06/29/2022 Permit Issued Y x x 1 253
74 ADU NORTH R-1 06/29/2022 Permit Issued Y x 0 208
75 ADU SOUTH R-1 (10000) 06/29/2022 Permit Issued Y x 1 470
76 ADU SOUTH R-1 06/30/2022 Pending Resubmittal N x 1 466
77 ADU NORTH R-2 06/30/2022 Pending Resubmittal N x 1 730
78 ADU NORTH R-1 07/05/2022 Permit Issued Y x 2 981
79 ADU SOUTH R-1 07/07/2022 Pending Resubmittal N x x 1 659
80 ADU SOUTH R-1 07/08/2022 In Plan Check N x 1 407
81 ADU NORTH R-1 07/14/2022 Permit Issued Y x x 2 390
82 ADU NORTH RM-15 07/20/2022 Permit Issued Y x 1 617
83 ADU SOUTH R-1 07/27/2022 Permit Issued Y x 2 679
84 ADU SOUTH R-1 07/27/2022 Permit Issued Y x 1 749
85 ADU SOUTH R-1 07/28/2022 Permit Issued Y x 2 834
86 JADU NORTH R-1 08/01/2022 Permit Issued Y x 1 221
87 ADU SOUTH R-1 08/02/2022 Permit Issued Y x 1 520
88 ADU NORTH R-1 (10000) 08/02/2022 Pending Resubmittal N x 1 371
89 ADU NORTH R-1 08/02/2022 Permit Issued Y x x 1 404
90 ADU NORTH R-1 08/04/2022 Pending Resubmittal N x x 1 400
91 JADU NORTH R-1 08/17/2022 Pending Resubmittal N x 1 246
92 ADU NORTH R-1 08/17/2022 Pending Resubmittal N x x 1 542
93 ADU NORTH R-1 08/17/2022 Pending Resubmittal N x 1 798
94 ADU NORTH R-1 08/18/2022 In Plan Check N x 1 750
95 JADU SOUTH R-1 (S) 08/22/2022 Permit Issued Y x 1 446
96 ADU NORTH RM-30 08/23/2022 Pending Resubmittal N x x 2 1,388
97 ADU SOUTH R-1 (8000) 08/24/2022 Permit Issued Y x 1 800
98 ADU NORTH R-1 08/24/2022 Pending Resubmittal N x 2 710
99 JADU SOUTH R-1 08/26/2022 Pending Resubmittal N x x 1 273
100 ADU NORTH R-1 08/29/2022 Pending Resubmittal N x 1 463
101 ADU NORTH R-1 (10000) 08/31/2022 Pending Resubmittal N x 2 799
102 ADU SOUTH R-1 09/08/2022 Pending Resubmittal N x 1 771
103 JADU SOUTH R-1 09/13/2022 In Plan Check N x 1 354
104 ADU SOUTH R-1 09/14/2022 In Plan Check N x 1 750
105 ADU SOUTH R-1 09/16/2022 Pending Resubmittal N x 1 563
106 ADU SOUTH R-1 09/19/2022 Pending Resubmittal N x 1 526
107 ADU NORTH R-1 09/21/2022 Pending Resubmittal N x 1 360
108 ADU SOUTH R-1 09/27/2022 Pending Resubmittal N x 1 579
109 ADU NORTH R-1 09/28/2022 Pending Resubmittal N x x 1 575
110 ADU SOUTH R-1 (7000)(S) 10/03/2022 Pending Resubmittal N x x 1 327
111 JADU SOUTH RE 10/05/2022 Pending Resubmittal N x 1 495
112 ADU NORTH R-1 (S) 10/07/2022 Pending Resubmittal N x x 1 436
113 JADU NORTH R-1 10/14/2022 In Plan Check N x 1 498
114 JADU NORTH R-1 10/18/2022 In Plan Check N x 1 499
115 ADU SOUTH R-1 10/20/2022 In Plan Check N x 1 587
116 JADU NORTH R-1 10/21/2022 Pending Resubmittal N x x 1 360
117 JADU SOUTH R-1 (8000) 10/24/2022 Pending Resubmittal N x x 1 479
118 JADU SOUTH R-1 10/27/2022 Pending Resubmittal N x 1 500
119 ADU SOUTH R-1 10/27/2022 Pending Resubmittal N x 1 540
120 ADU SOUTH R-1 11/02/2022 Pending Resubmittal N x 1 871
121 ADU NORTH R-1 11/02/2022 In Plan Check N x x 1 406
122 ADU NORTH R-1 11/03/2022 Pending Resubmittal N x x 1 401
123 ADU SOUTH R-1 (S) 11/03/2022 Pending Resubmittal N x 1 215
124 ADU SOUTH R-1 11/04/2022 Pending Resubmittal N x x x 1 515
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Data
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125 ADU NORTH R-1 (10000) 11/08/2022 Pending Resubmittal N 0 1,506
126 JADU SOUTH R-1 11/09/2022 Pending Resubmittal N x 1 500
127 ADU SOUTH R-1 11/14/2022 In Plan Check N x 0 592
128 ADU NORTH R-2 11/16/2022 Pending Resubmittal N x 1 345
129 ADU SOUTH R-1 11/16/2022 In Plan Check N x 0 750
130 ADU NORTH R-1 11/18/2022 Pending Resubmittal N x 2 865
131 JADU NORTH R-1 11/18/2022 In Plan Check N x x 0 332
132 ADU SOUTH R-1 (20000) 11/21/2022 Pending Resubmittal N x 2 750
133 ADU SOUTH R-1 12/02/2022 Pending Resubmittal N x 1 797
134 ADU NORTH R-1 12/02/2022 Pending Resubmittal N x x 3 996
135 ADU SOUTH R-1 12/06/2022 In Plan Check N x 0 499
136 ADU SOUTH R-1 12/06/2022 In Plan Check N x 0 800
137 JADU NORTH R-1 (10000) 12/08/2022 In Plan Check N x 0 744
138 ADU SOUTH R-1 (8000) 12/09/2022 In Plan Check N x 2 750
139 JADU NORTH R-1 12/09/2022 Submitted N x x 0 497
140 ADU NORTH RM-20 12/12/2022 In Plan Check N x 0 748
141 ADU NORTH R-1 12/13/2022 In Plan Check N x x 0 323
142 ADU NORTH R-1 12/13/2022 In Plan Check N x 0 410
143 ADU NORTH R-1 12/16/2022 In Plan Check N x 0 891
144 ADU NORTH R-1 12/19/2022 In Plan Check N x x 0 485
145 ADU NORTH OS 12/19/2022 In Plan Check N x 0 895
146 ADU SOUTH R-1 (10000) 12/20/2022 In Plan Check N x 0 999
147 ADU NORTH RM-15 12/20/2022 In Plan Check N x 0 649
148 ADU NORTH R-1 12/20/2022 In Plan Check N x 0 750
149 ADU SOUTH R-1 12/21/2022 In Plan Check N x x 0 373
150 ADU NORTH R-1 12/22/2022 In Plan Check N x x 1 360
151 ADU NORTH R-1 (10000) 12/23/2022 In Plan Check N x 0 566
152 JADU NORTH R-1 12/23/2022 In Plan Check N x 0 500
Item 11
Attachment A - 2022 ADU Report
Data
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: February 6, 2023
TITLE
Objectives to advance the 2023 City Council Priorities
RECOMMENDATION
Council approval of objectives to advance the 2023 Council Priorities.
BACKGROUND
On January 28, 2022, the Council held its annual retreat to approve the 2023 Council Priorities 1.
The Priority Setting Guidelines define a priority as a topic that will receive unusual and
significant attention during the year. At the conclusion of the retreat, the City Council approved
the following priorities:
•Economic Recovery and Transition
•Climate Change and the Natural Environment: Protection and Adaptation
•Housing for Social and Economic Balance
•Community Health and Safety
The City Council then directed that staff return on February 6th with suggested objectives
derived from Council comments at the annual retreat to achieve the strategic priorities.
ANALYSIS
Council Priorities guide resource allocation and staff workplans for the coming year. In recent
years, staff has then identified major projects associated with each priority to be tracked and
reported on. Successful completion of projects, programs and services is dependent on the
work that follows, balancing among these and other priorities, needs and resource capacity.
1 City Council Retreat 1/28/23 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1492
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Following the City Council’s work on January 28, staff compiled a summary of topics suggested
by Councilmembers for discussion on February 6. In addition, staff quickly developed a listing
of objectives that reflect actions that will be needed by Council in order to advance the
priorities identified for 2023.
For each Council priority, staff tried to develop objectives that align with a Priority purpose,
time-bound and measurable. Staff referred to SMARTIE principles: Specific, Measurable,
Achievable, Relevant, Timely, Inclusive, and Equitable to outline the list of objectives for the
coming 12 months.
For each Council Priority, staff has provided the following: (1) Councilmember feedback from
Saturday January 28, 2023 Retreat, (2) Potential focus areas, and (3) “Objectives” largely
defined as Council actions and engagement needed during calendar year 2023 advance the
stated priorities. Council engagement may include a variety of forms, such as Council approval,
committee/council ad hoc review and recommendations, legislative advocacy, regional
board/committee representation, and budgetary actions. Should Council approve the
objectives that follow, staff will use this list for tracking and reporting through 2023.
This is a very ambitious workplan. Staff have estimated that several objectives will require
additional resource allocation in order to complete it in full as outlined. As noted in other
financial reports, allocation of additional funding (contract or staffing) is not always a complete
solution to overcome obstacles for completion. Timelines to procure consultant support, or the
process to recruit, onboard, and train new staff delay the City’s ability to begin or maintain the
pace of work on these projects, especially within the 12-month timeframe outlined.
Each objective has a few identifying characteristics, below is a guide to help understand the
lists:
•“New:” reflects an action or project that is new to 2023 and was not on the 2022
workplan
•“(ERT#), (CHS#), (CCPA#), or (HSEB#)” reflects a reference to the project priority and
project number as identified on the Council approved 2022 workplan. Not all numbers
will be present as some projects were complete, or consolidated, or dropped
•“$” reflects a project that requires additional resources to achieve and complete
•“Q#” reflects the 2023 calendar year quarter estimated completion and/or to be
completed by timeframe. Q1 is January-March, Q2 is April-June, Q3 is July-September,
and Q4 is October-December.
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ECONOMIC RECOVERY AND TRANSITION
City Council retreat discussion: Areas of focus and priority discussed by Councilmembers
included:
•Parklets
•Permitting
•A focus on retail and small business recovery locally
•Treatment of vacant property (reference to Oakland and San Francisco)
Council actions/approvals anticipated in 2023:
Support economic recovery and business transition
CY
a) Adopt a Comprehensive Economic Development Strategy (ERT 2)$Q2
b) Implement or upgrade electronic plan review software without interruption to
the permitting process (ERT 9)
-Q3
c)New: Implement recommendations in Building and Permit Review Report
conducted by the City Auditor
-Q3
d)New: Begin stakeholder engagement and implementation of new business tax
(Measure K)
$Q4
Focus on commercial corridors, Downtown and California Ave
e)New: Begin implementation of next phase of parklet regulations to the
community
$Q1
f) Evaluate opportunities for New Parking Facilities in the University Ave
Downtown and direct next steps (ERT 10)
-Q2
g) Align Business Improvement District (BID) priorities and investments to the
Comprehensive Economic Development Strategy (ERT 1)
Q3/4
h) Advance development of a permanent car-free streets ordinance (selection of
consultant support) (ERT 6 & 7)
$Q3
i) Approve concept plan for University Ave streetscape and provide direction on
capital project funding (ERT 5)
-Q4
j) Extend temporary closure for car free streets (ERT 6 & 7)-Q4
k) Provide direction on citywide retail zoning code changes (specifically retail
preservation and neighborhood commercial district specific regulations and
CUP thresholds) (ERT 4, 12, 13; expected 2024 Q2)
$2024
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CLIMATE CHANGE & THE NATURAL ENVIRONMENT
City Council retreat discussion:
Areas of focus and priority discussed by Councilmembers included:
•Flood protection
•Natural environment and biodiversity; adapt natural ways of protecting natural habitats
(examples: bird safe glass, light pollution protection of critters and wildlife)
•Naturalize Matadero Creek, protection and setbacks
•Youth engagement in initiatives, objectives, and goals
Council actions/approvals anticipated in 2023:
Climate Change Protection
l) Implement Advanced Metering Infrastructure (AMI) through purchase of
meters/equipment in February 2023 for installation(CCPA7)
-Q1
m)New: Approve consultant to update Bike and Pedestrian Transportation Plan
(Additional Bike/Ped Grade Crossings will be included in network discussions,
schedule pending consultant selection)
-Q2
n) Approve municipal code amendments for advancing S/Cap goals (specifically
facilitate photovoltaic, energy storage system, electric vehicle charging station,
and heat pump (water/furnace) installations) (CCPA1)
-Q2
o) Approve S/CAP Update and 3-year workplan (CCPA4)-Q2
p)New: Begin first phase construction for grid modernization in summer 2023 (if
needed) and consultant resources to plan for gas transition
-Q4
q)New: Install first 1,000 heat pump water heaters through the advanced pilot
program and approve expanded full-scale program
-Q4
r)New: Approve advanced pilot program for whole residential home
electrification by the end of 2023 (targeted areas)
-Q4
s)New: Approve commercial rooftop HVAC electrification advanced pilot
program
-Q4
t)New: Accept Electric Vehicle Strategic Plan $Q4
u)New: Accept Reliability and Resiliency Strategic Plan $Q4
v)New: Review preliminary draft S/CAP study discussing workplan resource
needs and project funding opportunities
$Q4
Climate Change Adaptation: flood protection
w)New: Advance the San Francisquito Creek Flood Protection capital project
(Reach 2) as close to approval as possible by the end of 2023, through
Council’s JPA representation and any Council approvals involved. (focus on
securing funding, finalizing CEQA review, approval of project entitlements, and
obtaining required construction easements)
-Q1
Q4
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x) Secure funding and approve construction for the Newell Bridge replacement
project; advocacy with State legislators educating on project funding needs
(previously CHS10)
$Q4
Note: Wildfire safety and protection are referenced under the Community Health and Safety
priority.
Natural Environment
y) Approve agreements with Valley Water purified water facility at LATP Area B
(operations and maintenance) (CCPA3)
-Q3
z)New: Adopt appropriate changes to the revised Tree Protection Ordinance (to
follow a review of impacts of the revised ordinance by PTC and PRC)
-Q4
HOUSING FOR SOCIAL AND ECONOMIC BALANCE
City Council retreat discussion:
Areas of focus and priority discussed by Councilmembers included:
•Support housing needs as identified by the community (as opposed to following RHNA)
•Focus on lower income housing units
•Intentional on where new housing units are developed
•Establish a housing committee
Council actions/approvals anticipated in 2023:
Advance Renter Protection Policies
aa)New: Approve access to rental units by establishing security deposit limits -Q2
bb) Provide protections to renters by considering expansion of the just cause
eviction ordinance (HSEB16)
-Q3
cc) Implement a rental registry to inform future renter protection policies
(timeline estimate, calendar year 2024 Q1) (HSEB15)
$2024
Advance Housing Plans
dd) Expand housing opportunities through the initiation of a Downtown Housing
Plan: includes approval of project funding and a consultant contract
(HSEB10)
$Q2
ee) Advance local and state housing interests through a HCD-compliant Housing
Element (iterative work process to start Q2) (HSEB5)
-Q4
ff) Advance vision for North Ventura Coordinated Area by adopting a
coordinated area plan (financial impacts if not approved, $800,000 impact)
(HSEB4)
-Q4
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gg) Create new affordable housing opportunities through funding such as a
housing land trust, in particular, CalCHA (City Council referral)
$TBD
hh) Explore opportunities to regulate short term-rentals with Council committee
(Council colleague’s memo)
$TBD
Implement Housing Production Policies
ii) Codify permanent standards related to the City local SB9 implementation
ordinance (HSEB 14)
-Q1
jj) Approve adjusted Accessory Dwelling Unit (ADU) regulations to facilitate
production and meet HCD requirements (HSEB9)
-Q2
kk) Respond to various Grand Jury recommendations related to Housing2 (HSEB
6, 17, 24)
-Q3
ll) Refine implementation of City’s SB9 objective development and urban lot
split standards (HSEB 14)
-Q4
mm)New: Adopt an ordinance amending the development standards for
Stanford-owned housing opportunity sites
-Q4
nn)New: Rezone carryover housing opportunity sites for by-right development
when developed with 20% lower income affordable housing units
-Q4
oo)New: Adopt an ordinance to implement revised development standards for
certain properties located in the GM/ROLM to allow for densities up to 90
units/acre
-Q4
Support Unhoused Service Initiatives
pp) Begin construction in partnership with LifeMoves for Palo Alto Homekey
project to provide transitional housing and services for unhoused residents
(HSEB13)
-Q2
qq)New: Develop a citywide strategy to connect unhoused residents to housing
and services
$Q3
2 Grand Jury recommendations include:
Recommendation 12b: Santa Clara County MOU on Measure A monies for affordable housing.
Recommendation 4: NVCAP lessons learned process.
Recommendation 8: Improve readability and format of Housing Element Annual update and cover memos.
Recommendation 3: Research other cities affordable housing communication strategies, provide recommended
strategy for Palo Alto, and update affordable housing info on City website
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COMMUNITY HEALTH AND SAFETY
City Council retreat discussion:
Areas of focus and priority discussed by Councilmembers included:
•Flood protection
•HSRAP funding increase
•Maintain a diverse definition of ‘health” (included but not limited to physical and
mental)
•Airplane noise (establish airplane noise committee)
•Police presence in downtown cores (specifically on foot or bike presence)
Council actions/approvals anticipated in 2023:
Mental & physical health and belonging
rr) Complete reopening libraries to budgeted level (remains below pre-pandemic
levels) (CHS5)
-Q2
ss) Approval of multi-year agreement for provisions of animal shelter services
(CHS1)
$Q3
tt)New: Expand and enhance community special events with focus on inclusion
(linked to activities in ERT)
$Q3
uu)Approve agreement with PAUSD on long term use of the Cubberley property
(CHS2)
-Q4
vv) Recreation Wellness Center Feasibility: Agreement on location, general design
and features of a recreation wellness center and finalize an agreement with a
new nonprofit responsible for raising funds for design and construction.
(CHS14)
$Q4
Invest in reliable safety infrastructure and systems
ww) Support visible police presence by ensuring stable staffing (recruiting and
retention) through hiring ahead program (CHS6)
$Q1 -
Q4
xx)New: Support a diverse community through extension of the Psychiatric
Emergency Response Team (PERT) program services to the community
through affirmation of continued City financial support
$Q2
yy) Update without interruption 911 dispatch system (CAD provider) once
selected through procurement process (CHS4)
-Q3
zz)New: Begin construction of the Gas Main Replacement Project 24B -Q3/4
aaa) Approve updated Local Hazard Mitigation Plan and Community Wildfire
Protection Plan to ensure safety of the community (CHS15)
-Q4
bbb) Implement Foothills Fire Management Plan (includes fuel reduction, early
detection system, community awareness application rollout) (CHS3)
-Q4
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ccc) Approve actions needed to advance final construction phase of Public Safety
Building and begin preparations for move-in (estimated move Q4 2023)
(CHS9)
-Q4
ddd) Approve next steps for the rebuild of Fire Station No. 4 project (specifically
design and entitlements) (CHS17)
-Q4
eee) Approve resources and consultant to study and develop seismic and
resiliency ordinance (CHS20)
$TBD
Reduction of noise and air quality pollution
fff) Update gas-powered leaf blower ordinance and enforcement plan (CHS16)-Q1
ggg) Implement a strategy for the provision and promotion of unleaded fuel at
Palo Alto Airport (CHS12)
-Q4
hhh)New: Approval of quiet zone implementation (rail/train crossings)-Q4
iii)New: Engage with the SFO Roundtable on SFO's Ground Based
Augmentation System (GBAS) project and other potential opportunities to
decrease SFO noise impacts on Palo Alto (previous project was CHS11)
$TBD
Note: Flood protection activities including Newell Road bridge improvements are referenced under
the Climate Change & Natural Environment - Protection & Adaptation priority
FISCAL/RESOURCE IMPACT
Council approval of Priority areas does not have an immediate fiscal impact. Resources will
need to be allocated to non-resourced projects to implement Council Priorities. Opportunities
to resource projects include Long Range Financial Forecast on February 6, 2023, Mid-Year
Budget Review on February 13, 2023, and FY 2024 Budget Adoption in June 2023.
STAKEHOLDER ENGAGEMENT
Staff anticipates returning to the City Council in March 2023 with community engagement plans
based on the selected 2023 Council priorities, adopted objectives to achieve these priorities
and projects identified within each area. There are various levels of community engagement
and communications to support each project.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the Council discussion
on 2023 Priority Objectives is a continuing administrative or maintenance activity. CEQA
Guidelines section 15378 (b)(2).
APPROVED BY:
Ed Shikada, City Manager
Report #:
2302-0910
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City Council
Supplemental Report
From: Ed Shikada, City Manager
Meeting Date: February 13, 2023
Item Number: 2
TITLE
Comprehensive Economic Development Strategy Update and Study Session - Supplement
RECOMMENDATION
Comprehensive Economic Development Strategy Update and Study Session - Supplement
BACKGROUND
Staff inadvertently transmitted a draft version of the Streetsense diagnostic that was intended
for internal review only as part of the City Council packet last week.
The correct version of the diagnostic prepared by Streetsense is attached here for the Monday,
February 13 City Council Study Session.
ATTACHMENTS
Attachment A: Streetsense Diagnostic - Final
APPROVED BY:
Ed Shikada, City Manager
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PALO ALTO
ECONOMIC DEVELOPMENT
STRATEGY
DIAGNOSTIC
PHASE 2 DELIVERABLE
PREPARED FOR PALO ALTO, CA
FEBRUARY 13,2023
Item 2.
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Diagnostic - Final
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TABLE OF CONTENTS
01 PROJECT OVERVIEW
02 STUDY AREAS
03 MARKET ASSESSMENT
04 BUSINESS ENVIRONMENT
05 ADMINISTRATIVE ASSESSMENT
06 PHYSICAL ASSESSMENT
07 GUIDING PRINCIPLES
CONTACT
Larisa Ortiz
Managing Director
Streetsense
lortiz@streetsense.com
641 S ST NW
WASHINGTON,DC 20001
STREETSENSE.COM
@REALSTREETSENSE
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Diagnostic - Final
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01
PROJECT
OVERVIEW
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PROJECT TIMELINE
We are here
IMMERSION &DISCOVERY
•Kick off session
•Field work
•Stakeholder engagement
•Focus groups and interviews with business
owners, hotel operators, residents, City Staff
•Council presentation
DIAGNOSTIC
•Retail market analysis
•Administrative capacity assessment
•Business environment assessment
•Physical assessment
•Coordination with California Ave/Ramona St
Consultant
•Council presentation
ECONOMIC DEVELOPMENT
STRATEGY
•Draft work plan development
•Final work plan development
Before advancing to a discussion of strategic interventions, the Diagnostic phase of this exercise
ensures that we share a collective understanding of the challenges at hand. This milestone is important
to establish consensus for action and precedes a discussion of recommendations that will be led or
supported by public sector investments, policies and programs.
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PHYSICAL ENVIRONMENT
→City-Wide Connectivity & Accessibility
→District SWOT Analysis
Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
STUDY PURPOSE
•To develop a market-informed economic
development strategy that will ensure
Palo Alto's post-COVID competitiveness
by identifying impactful public sector
interventions, policies and investments
for which there is both need and
consensus for action.
TODAY’S PURPOSE
•Present and Discuss Diagnostic Findings
•Confirm alignment on key take aways and
guiding principles before advancing to
recommendations
BUSINESS ENVIRONMENT
→Sales Tax Analysis
→Hospitality/ Tourism Assessment
ADMINISTRATIVE CAPACITY
→Regulatory Framework
→Organizational Capacity & Stewardship
MARKET ASSESSMENT
→Competition Assessment
→Retail Demand Assessment
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
A FRAMEWORK FOR SUCCESSFUL RETAIL PLACES
MANAGED
…with leadership
and capacity to
engage merchants
and property
owners and
implement
improvements
SAFE
…but more
importantly
perceived as safe
ACCESSIBLE
…to a customer base
…with little friction
for arrival/departure
regardless of mode
VISIBLE
…by potential
customers either
as they drive,
bike or walk by
CHAMPIONED
…with demonstrated
signs of maintenance
and investment
ANCHORED
…by retail
destination driver(s)
… by culture,
institutional or
entertainment uses
PEDESTRIAN
FRIENDLY
…co-located
businesses that
encourage cross
shopping
…walkable and
with few
disruptions in
continuity
BRAND
RESONANCE
…with clear
branding strategy
and identity
Beloved, "best-in-class" streets share characteristics that correlate to successful economic
development outcomes, including but not limited to community satisfaction, business
profitability, and contribution to the municipal tax base. Based on the over three decades of
research, these characteristics include:
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
THE RETAIL ECOSYSTEM
•Perspectives range among key stakeholders
•Priorities unique from one another
•Highly symbiotic relationship structure
Retail viability deteriorates when a given stakeholder's
priorities and needs are not being met.
TENANT
Confidence in Sales
Rent Commensurate with
Sales
Co-tenancy
Brand Alignment
LANDLORD/
MANAGEMENT
Return on Investment
Tenant Stability
Risk Mitigation
CONSUMER
Sense of Place
Tenants
Events | Community
Safety | Cleanliness
Accessibility | Convenience
Value (Money & Time)
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Phase 1–2:
IMMERSION &DISCOVERY/DIAGNOSTIC
THE RETAIL ECOSYSTEM
Where does the public sector play a role in influencing
or directing the actions of key stakeholders?
PUBLIC SECTOR TOOLS
•Regulatory framework influences co-tenancy
•Financial incentives can help mitigate risk
•Funding and coordination of events to build community
•Investments in enhanced safety/cleanliness
•Improvements to access/convenience
•District marketing & branding campaigns
•Investments in public realm to improve sense of place
TENANT
Confidence in Sales
Rent Commensurate with
Sales
Co-tenancy
Brand Alignment
LANDLORD/
MANAGEMENT
Return on Investment
Tenant Stability
Risk Mitigation
CONSUMER
Sense of Place
Tenants
Events | Community
Safety | Cleanliness
Accessibility | Convenience
Value (Money & Time)
Item 2.
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SMALL STORE FOOTPRINTS BUY ONLINE, PICK-UP IN STORE (BOPIS)
GUIDESHOP MODEL MICRO-FULFILLMENT COMPONENTS
•Changing retail footprints
•Changing spending patterns
•Tenants are in the driver's seat
•Implications of hybrid work
GLOBAL AND NATIONAL
TRENDS
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02
STUDY AREAS
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MAP
All 6 districts
The diagnostic focuses on areas within Palo Alto where
this is an existing concentration of retail activity.
STUDY
AREAS
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Using shopping center industry classifications, Palo Alto has
three (3) categories of shopping districts as follows:
REGIONAL/SUPER-REGIONAL CENTERS
•most significant tax base contributors
•face the greatest competition for visitors within the region
•must maintain "best-in-class" status to remain competitive
COMMUNITY-SERVING CENTERS
•moderate tax base impacts
•local promotion and marketing strategies, if any
•tend to benefit from activations that meet community
interests and needs
NEIGHBORHOOD-SERVING
•minimal tax base impacts
•least affected by COVID pandemic, typically the most
stable asset class
•local customer base with little need for promotion
DEFINING PALO ALTO'S
"SHOPPING DISTRICTS"
DISTRICT
DESTINATION
DRIVERS
ICSC
CATEGORIZATION RETAIL SF
NO.SALES
TAX
PRODUCING
BUSINESSES
TRADE
AREA
Downtown/
University
Ave
F&B,
Entertainment,
Fashion &
Apparel
Regional
(400k –800k)916,400 432
Primary,
Secondary
Tertiary
Stanford
Shopping
Center
Department
Stores, Fashion &
Apparel
Super Regional Mall
(800+ sf)1,348,000 151
Primary,
Secondary
Tertiary
California
Ave
Specialty Grocer,
F&B, Farmer's
Market, Fitness
Community/
Neighborhood
Center
(125k –400k sf)
202,500 99 Primary,
Secondary
Town &
Country
Village
Grocery,
Pharmacy, F&B
Community Center
(125k –400k sf)171,000 59 Primary,
Secondary
Midtown
Grocery,
Pharmacy, Quick
Service F&B
Neighborhood
Center
(30k –125k sf)
52,000 42 Primary
Charleston
Shopping
Center
Specialty Grocer
Neighborhood
Center
(30k –125k sf)
46,000 10 Primary
Item 2.
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→METHODOLOGY &APPROACH
→COMPETITION ASSESSMENT
→RETAIL DEMAND ASSESSMENT
03
RETAIL MARKET
ASSESSMENT
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Retail market assessment:
INDUSTRY TERMINOLOGY
Given their extraordinary nuance,
ancillary tenants (e.g.financial,
educational, religious, governmental
institutions, etc.) and entertainment
establishments (e.g.arcades, movie
theaters, bowling alleys, escape
rooms, etc.) are considered to be
non-retail uses and are not factored
into the retail demand model or
included in retail demand
calculations.
Neighborhood
goods &
services
(NG&S)
Food &beverage
(F&B)
General
merchandise,
apparel, furniture,
and other
(GAFO)
•Grocery store
•Neighborhood market
•Pharmacy/drug store
•Dry cleaner/laundromat
•Tailor/seamstress
•Nail/hair salon
•Barber shop
•Spa
•Fitness
•Gyms
•Sit-down restaurant
•Full-service restaurant
•Fast-casual restaurant
•Fast food restaurant
•Carry-out restaurant
•Ice cream shop
•Coffee shop
•Café
•Apparel store
•Clothing store
•Electronics store
•Furniture store
•Pet store
•Sports store
•Book store
•Music store
Non Retail Uses
Retail Uses
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COMPETITION
ASSESSMENT
Given the urban-suburban typology of the Palo Alto market,retail competition for the site is measured on two
levels –locally-serving neighborhood centers for convenience-based trips and regionally-serving destination
hubs for experience-based trips.Retail customer behaviors are rooted in convenience,access,and visibility
as well as tenant quality and variety of offerings.These factors are considered when assessing the
market influence of each retail competitor.
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Retail market assessment:
REGIONAL RETAIL COMPETITION
TAKEAWAYS
•Downtown retail environments are highly
competitive.
•Two competing downtown environments
within Palo Alto, Downtown/University Ave
and California Ave, spreading retail thin.
•Traditional malls are less prevalent to the
west.There are five regional malls of varying
quality closer to San Jose.Hillsdale Shopping
Center is the only traditional mall to the
west.The top performing mall in the
region is Stanford Shopping Center.
Source: Streetsense analysis Q4 2022.
Regionally-serving, experience-based retail
centers are characterized by a dominant mix of
good-based retail, including malls, power centers,
and walkable downtowns and lifestyle centers.
These retail centers attract customers from a larger
regional trade area and feature a cluster of full-
service restaurants and entertainment.
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Retail market assessment:
LOCALLY-SERVING RETAIL
COMPETITION
TAKEAWAYS
•Grocery competition is strong throughout the
region.
•Big box retailers are not allowed in Palo Alto
by regulation. However, they are concentrated
along the periphery of Palo Alto,
cannibalizing the retail offering within the
city.
•Target and Costco are particularly prevalent in
the region, with nine and seven stores,
respectively within the examined area.
Neighborhood serving retail centers are characteriz
ed by a dominant mix of Neighborhood Goods &
Services tenants, often grocery-anchored. These
retail centers primarily meet the need for
convenience-based shopping trips, competing on a
geographically smaller scale.
Source: Streetsense analysis Q4 2022.
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Retail market assessment:
PALO ALTO RETAIL DISTRICT STACKUP –ASKING RENTS
Retail rents in the region are high. The average asking rent in Palo
Alto is $63.52 per SF –80% higher than the national average of
$27.55 per SF.*
Stanford Shopping Center has the highest average asking rents in
Palo Alto. However, average asking rents within Town & Country
Village and Downtown/University Ave are comparable, with rents in
Downtown reaching up to $99.00 per SF.
Disparity between average asking rents of the two downtown
environments in Palo Alto, is a reflection of the higher quality
environment and regional pull of Downtown/University Ave.
Source –REIS, Loopnet, Michael Baker, CoStar 2022
* National average asking rent for malls and other retail environments, not
including strip centers, neighborhood serving centers, and power centers as of
Q4 2022.
TAKEAWAYS
•According to local brokers, there is a perception that asking rents in
Downtown/University Ave are highly elevated and do not reflect the
state of the retail market, which greatly favors tenants over landlords
Item 2.
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Retail market assessment:
RETAIL VACANCY
Source: Loopnet, REIS, Michael Baker
*Q4 2022 Moody's Analytics
TAKEAWAYS
•Retail is being spread thin by a finite consumer base within Palo Alto
•Stanford Shopping Center cannibalizes retail in other districts within Palo
Alto, offering attractive co-tenancy opportunities and retail-appropriate
spaces. Vacancies are exacerbated by Downtown/University Avenue’s high
rents and less desirable retail spaces, often in need of tenant improvement
investments.
Vacancy among the six retail districts totals 243,000 SF, or about 8%
vacancy rate as of year-end 2022.
•Majority of vacant space is concentrated in Downtown/University Avenue,
accounting for about 88,000 SF.
•California Avenue has the highest vacancy rate among all districts at 15%,
accounting for 31,000 SF.
•There is about 57,000 SF currently vacant within Stanford Shopping
Center, which equates to a very low vacancy of 4%, due to the mall's large
size. This vacancy is caused by smaller tenants inside the mall rather than
by the loss of any major anchors.
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RETAIL DEMAND
ASSESSMENT
Item 2.
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Retail market assessment:
TRADE AREAS
Based on the competitive landscape, natural and
psychological boundaries, travel patterns, and
population trends, Streetsense defined the following
trade areas:
PRIMARY TRADE AREA
Users:Palo Alto residents, employees, students,
overnight guests, and daytime visitors
Frequency:High -at least once or twice per week
Purpose:Convenience-based shopping and dining
SECONDARY TRADE AREAS
Users:Nearby residents (Mountain View, Los Altos,
Melo Park, Redwood City)
Frequency:Modest -once or twice every two
weeks
Purpose:Change up from options closer to home,
work, or school
TERTIARY TRADE AREAS
Users:Regional residents (San Mateo, San Bruno,
Burlingame, Sunnyvale, Santa Clara/Western San
Jose, Fremont, Newark)
Frequency: Low -once or twice every month
Purpose:Experience-based shopping and dining
Item 2.
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Item 2.: Staff Report Pg. 22 Packet Pg. 299 of 393
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Retail market assessment:
SHIFTS IN DEMAND POST-COVID
114,826
Total employees working within Palo Alto
69,889
Non-office-based employees working within Palo Alto
44,937
Office-based employees working within Palo Alto
37% of office-based employees are going into an office (San Jose metro area)
In Palo Alto, hybrid work has reduced the demand for retail by over
100,000 SF, roughly equivalent to the amount of retail space at Midtown
Shopping Center and Charleston Shopping Center combined.
Resident -generated
demand
697,275 SF
Resident-generated
demand
697,275 SF
Visitor-generated
demand
147,605 SF
Visitor-generated
demand
147,605 SF
Employee-generated
demand
452,085 SF Employee-generated
demand
340,620 SF
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
PTA Demand - No Remote Work PTA Demand - Adjusted for Work from Home
PTA Retail Demand Hybrid Work Scenario -2022
-111,465
SF of lost
retail
demand
TAKEAWAYS
•Palo Alto's daytime population can no longer support the same level of
retail it did pre-covid,with fewer on shoppers coming from Stanford
Research Park and other office-centric areas to generate foot traffic during
the work week
•Shifts in daytime population and the balance between residents and
employees require a right-sizing of retail
Source: Sitewise, 2022; Bureau of Labor Statistics 2022; Kastle Systems 2022.
Item 2.
Attachment A - Streetsense
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Item 2.: Staff Report Pg. 23 Packet Pg. 300 of 393
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Retail market assessment:
DEVELOPMENT PIPELINE
Significant development pipeline in the
surrounding markets.
At full build out, these projects will add:
17,700 residential units
15.8 million SF of office/life science space
2,300+ hotel keys
* Map shows multi-family residential developments over 50
units and office/life sciences developments over 25,000 SF
TAKEAWAYS
•Menlo Park, Redwood City, and Mountain
View have robust office/life science pipelines,
growing density and building future daytime
populations.
•Fueling the retail ecosystem -density and
daytime populations drive retail spending,
thereby growing retail demand.
•Retail in districts like California Ave would
benefit from increased density and daytime
populations
Source: Moody's Analytics, 2022.
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 24 Packet Pg. 301 of 393
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Retail market assessment:
RETAIL DEMAND PROJECTIONS
Based on resident, employee, overnight guest, and daytime visitor spending,
local and regional competition, and projected population growth, the site can
support the following:
2,571,970 SF
Total retail demand in 2022
2,627,980 SF
Total retail demand in 2027
2,687,030 SF
Total retail demand in 2032
3,032,900 SF
2,571,970 SF 2,627,980 SF 2,687,030 SF
Supply 2022 Demand 2027 Demand 2032 Demand
Retail Supply and Demand Projections
460,930 SF
oversupply
TAKEAWAYS
•Retail needs to be right-sized --Retail demand will steadily increase
however, without intervention, demand will not reach parity with the
existing retail supply over the next 10 years
•Oversupply > vacancy, indicating that vacancy will continue to rise
among lower quality or poorly positioned space
•Potential interventions to the retail ecosystem –
•Broadening the mix of uses to increase daytime customer base
with office and residential uses
•Supplementing with non-traditional retail uses like
entertainment, civic, and cultural uses to activate the ground plane
Source: Michael Baker; Streetsense analysis 2022.
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 25 Packet Pg. 302 of 393
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Retail market assessment:
DEMAND BREAKDOWN
By 2032, total retail demand can be broken out into the three major
retail categories :
•Neighborhood goods & services (NG&S) –15% of total
retail demand
•Food & Beverage (F&B) –22%of total retail demand
•General merchandise, apparel, furniture, and other (GAFO)
–63%of total retail demand
TAKEAWAYS
•General merchandise uses makes-up more than half of demand,
driven by Stanford Shopping Center, which consumes 80%
of that demand, with a remaining 321,730 SF of general
merchandise demand to be distributed among the other districts
•Neighborhood-serving retail demand is constrained by the
presence of big box retailers, considered ”category killers” in
the region. However, given the population density and high
spending levels, the market may be able to support additional
neighborhood-serving retail on a small scale.
•Healthy demand for food & beverage, both fast casual serving
student and employee populations, as well as full-service Source: Streetsense
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 26 Packet Pg. 303 of 393
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04
BUSINESS
ENVIRONMENT
→SALES TAX ANALYSIS
→HOSPITALITY/ TOURISM ASSESSMENT
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 27 Packet Pg. 304 of 393
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SALES TAX
ANALYSIS
→NATIONAL AND LOCAL SALES TAX REVENUE TRENDS
→FOCUS AREA SALES TAX REVENUES
→COMPETING CITIES
→KEY TAKEWAYS
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 28 Packet Pg. 305 of 393
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Business environment:
LOCAL SALES TAX REVENUE TRENDS
*The graphic above is representative of sales tax revenues by Fiscal Year for all sales tax producing
businesses in Palo Alto. Sources: HdL Companies; bls.gov
Small, locally owned businesses were the hardest hit during the COVID-19
Pandemic, particularly restaurants,retailers and personal service providers.
Common economic influences/conditions include:
•Inflation and increasing costs of doing business
•Supply chain and manufacturing disruptions
•Employment/ labor shortages
•Shift to online shopping
•COVID-19 safety protocols and compliance
•Interest rates rising
Palo Alto’s total FY 2021-22 sales tax revenues increased by 20% from FY
2020-21. FY 2021-22 revenues were still 6% below pre-pandemic sales tax
in FY 2018-19.CPI-U for the San Francisco Area increased by 4.9% from
the 12 months prior to December 2022.
Note: The dollar amount listed for sales tax revenue here forward represent the 1% sales tax revenue issued to the City of Palo Alto
TAKEAWAYS
While sales tax recovery is important, it's not a true reflection of recovery
and profitability of small businesses. Sales Tax revenues are mostly back
to pre-pandemic (FY 2018-19) numbers by the end of FY 2021-22, but
many small,locally owned businesses are not back to pre-pandemic cash
flow and required revenue margins.
$24.52
$25.59
$28.83
$24.17
$22.50
$27.06
$0
$5
$10
$15
$20
$25
$30
$35
FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22
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4.4%
12.6%
-16.2%
-6.9%
20.3%
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 29 Packet Pg. 306 of 393
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Business environment:
FOCUS AREA SALES TAX REVENUES BY FISCAL YEAR
Neighborhood focused areas produce a low amount of sales tax relative to the other
shopping areas and there is a higher volume of essential stores like grocery stores,
markets, pharmacies, etc.Combined, Charleston and Midtowns made up about 1% of the
City's total sales tax revenue in FY 2021-22.
Downtown Palo Alto, which makes up 12% of total sales tax revenue in the City, has been
the slowest to recover from the Pandemic. Downtown FY 2021-22 sales tax revenues are
25% below pre-Pandemic FY 2016-17 sales.
California Avenue makes up 2.2% of total sales tax in the City. Sales tax on California
Avenue is 12.8% below pre-Pandemic sales in FY 2018-19, and 9% below FY 2016-17.
Town & Country Village experienced a 21% decrease in sales tax in FY 2019-20, though
the shopping area is recovering from the Pandemic. Town & Country Village sales tax
make up 3% of the total sales tax revenue in Palo Alto for FY 2021-22.
Stanford Shopping Center FY 2021-22 sales were 25% above pre-Pandemic FY 2016-17
sales tax revenues. Stanford Shopping Center makes up 25% of total sales tax revenue,
mainly from retail sales.
Source: HdL Companies
TAKEAWAYS
•Total sales tax revenues are bouncing back from the Pandemic, but recovery from the
COVID-19 Pandemic is uneven across key tax generating districts and the local
economy is not fully recovered.
•Sales tax revenues in the neighborhood shopping areas, Charleston Shopping Center
and Midtown, were the least impacted during the Pandemic.
•Downtown sales tax has been in a decline since before the Pandemic, but the
Pandemic exacerbated the situation.
$0
$1
$2
$3
$4
$5
$6
$7
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
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Sales Tax Revenues for Fiscal Years 2016-17 to 2021-22
Charleston Shopping Center Midtown California Ave
Town & Country Village Downtown Palo Alto Stanford Shopping Center
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 30 Packet Pg. 307 of 393
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Business environment:
Neighborhood Goods & Services (NG&S)
NG&S makes up 4% of total sales tax revenue for the six focus districts (2% of
total sales tax for the City of Palo Alto).Most NG&S businesses are not big sales
tax producers (I.e., personal services, grocery stores, gyms). For example,
Grocery Store taxable sales are roughly 25-30% of their total sales.
Food & Beverage (F&B)
F&B makes up 27% of total sales tax revenue for the six focus districts (11.4% of
total sales tax for the City).
General Merchandise, Apparel, Furniture & Other (GAFO)
GAFO makes up 58% of the total sales tax revenue for the six focus
districts (24% of total sales tax for the City).
Non-Retail
Non-retail sales tax revenue in the six focus areas include automotive sales,
automotive rentals and repairs, business services, medical/biotech, and textile /
furnishings.Non-retail makes up 11.4% of total sales tax revenue for the six
focus districts (4.8% of total sales tax for the City).
FOCUS AREA SALES TAX REVENUES BY RETAIL CATEGORY FISCAL YEAR 2021-22
District Number of
Businesses*NG&SF&BGAFONon RetailTotals
Charleston
Shopping Center10$36,161$23,525$30,590-$90,276
Midtown 42$109,320$74,929$6,305$11,397 $201,951
California Ave99$56,322$437,306$38,449$58,149 $590,226
Town & Country
Village59$87,101$328,968$274,874$3,237 $694,180
Downtown Palo
Alto 432$147,868$1,640,977$1,118,451$291,371 $3,198,667
Stanford Shopping
Center151$5,980$574,954$5,063,008$934,975 $6,578,917
District Total Sales by Category $442,752$3,092,536$6,531,677$1,299,129 $11,354,217
Palo Alto Total Sales by Category $579,284 $4,036,817 $7,254,645 $15,190,166 $27,060,912
*Number of businesses is only representative of those that are sales tax producing. Non sales tax producing businesses not
accounted for in this table may include offices, medical centers, certain business and personal services, and certain fitness
centers or gyms.
Source:HdL Companies
TAKEAWAYS
•Charleston Shopping Center and Midtown show the highest percentage of
NG&S relative to the total sales tax revenue in those shopping districts
(40% and 54%, respectively).
•Downtown Palo Alto produces the highest value of F&B sales tax revenue
•Stanford Shopping Center and Downtown combined make up 95% up
GAFO sales tax for the six focus areas ($5.1M and $1.1M, respectively).
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 31 Packet Pg. 308 of 393
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Business environment:
Palo Alto’s GAFO and non-retail sales are
significantly higher than competing cities.
•GAFO dominated by Stanford Shopping
Center's sales tax revenue, which makes up
90% of total GAFO sales at $6.6 million for
FY 2021-22.
•Non-retail-sales mostly come from auto and
transportation related businesses (12 of which
are in the top 100 sales tax producing
businesses in the City).
COMPETING CITIES: TOTAL SALES TAX REVENUE FISCAL YEAR 2021-22
$27,060,912
$19,778,575
$18,795,098
$11,780,240
$5,390,935
$2,458,455
Source: HdL Companies
TAKEAWAYS
•Palo Alto is the largest sales tax producer
compared to the competing cities identified
here, largely due to GAFO and Non-Retail
sales tax revenues.
•Despite being the largest sales tax producer,
the city is lacking in neighborhood goods
and service businesses
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 32 Packet Pg. 309 of 393
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Business environment:
Neighborhood Goods & Services (NG&S)
Palo Alto has the lowest NG&S SDPC, even lower than Burlingame and Los Altos who
bring in less NG&S sales tax revenue compared to Palo Alto.Menlo Park has the
highest SDPC in the NG&S category even though Redwood City and Mountain View
receive a significantly higher amount of NG&S sales tax revenue.
Food & Beverage (F&B)
Palo Alto is doing better than most competing cities in bringing people to the City for
F&B.
General Merchandise, Apparel, Furniture & Other (GAFO)
Palo Alto has the highest SDPC in the GAFO category, largely due to the Stanford
Shopping Center.
Non-Retail
Burlingame has the highest SDPC in non-retail sales, which likely comes from the auto
and transportation industry (new and used car sales, rentals, repairs, etc.).
COMPETING CITIES: RETAIL SALES DOLLAR PER CAPITA (SDPC) FISCAL YEAR 2021-22
SDPC is a macro approach to identify possible trends within a city or region regarding to spending habits.Average SDPC is derived by
multiplying out the 1% total point of sales tax dollars and then dividing them by the population size of their community.
•Below Average: Suggests resident do some shopping outside of the area; lack of local supply by preferred retailer and restaurant
concepts
•Above Average: Suggest consumers from outside the area are attracted to the local retail market; have preferred retailer and
restaurant concepts.
Source: HdL Companies
TAKEAWAYS
•Palo Alto residents are likely shopping for neighborhood goods and
services in competing areas.
•Palo Alto is likely bringing consumers from outside the area to shop
for non-retail sales tax producing goods and services, like auto and
transportation, as well as from the Stanford Research Park.
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 33 Packet Pg. 310 of 393
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Business environment:
$0.65 $0.65
$1.26
$1.55
$1.95
$2.21
$4.25
$0.68 $0.72
$1.32
$1.67
$3.12
$2.49
$3.90
$0.59
$0.80
$1.38
$1.42
$2.32
$2.72
$3.20
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$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
Palo Alto
California Ave
Downtown Los
Altos
Downtown
Menlo Park
Downtown
Mountain View
(Castro Street)
Downtown
Redwood City
Downtown
Burlingame
Downtown Palo
Alto
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Fiscal Years 2016-17, 2018-19, and 2021-22
FY 2016-17 FY 2018-19 FY 2021-22
COMPETING DOWNTOWNS: SALES TAX REVENUES
Source: HdL Companies
TAKEAWAYS
•Downtown Palo Alto and California Ave are not
recovered and back to pre-Pandemic FY 2016-17
sales tax revenues.
•Despite the slow recovery, Downtown produces the
most sales tax revenue compared to competing
downtowns.
•California Ave sales tax revenue is more comparable
to Los Altos Downtown in terms of sales tax revenue
•(Note: While sales tax may be comparable, there is a clear
difference in terms of ownership and management when
comparing California Avenue to Downtown Los Altos).
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 34 Packet Pg. 311 of 393
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HOSPITALITY/
TOURISM
ASSESSMENT
→LODGING
→VISITORS
→OPPORTUNITIES
Item 2.
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Business environment:
HOSPITALITY/TOURISM: LODGING
BARRING RECESSION, FULL RECOVERY BY 2023*
Palo Alto’s lodging industry is recovering at the national pace and is
currently approaching 2019 levels. Palo Alto’s Occupancy Rate is
highest mid-week, slightly lower than either U.S. or California Average.
STABLE BUSINESS TRAVELER BASE
Palo Alto’s largest contributors to occupancy are medical, education and
business travelers who fill approximately 2,200 hotel rooms, including
about 300 via the two new Marriott properties.
RECESSION CONCERNS
Oxford Economics expects the US to enter a recession in the first half of
2023. This is an ominous prospect as travel spending falls by roughly
twice the rate of the economy in a typical recession.
Source: STR
Source: Tourism Economics
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 36 Packet Pg. 313 of 393
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Business environment:
HOSPITALITY/TOURISM: VISITORS
INTERNATIONAL
Lag in recovery from international
travelers will continue to impact Palo
Alto more than most cities.
Of particular note, Chinese visitors had
been the largest source of international
visitors to Palo Alto, and that nation’s
slow recovery lags all other major
inbound traveler sources to California.
BUSINESS
Less business travel as virtual meetings
grow.The transition to virtual meetings, caused
by the pandemic, generally worked well and
contributes to California's (and the U.S.') slower
business travel recovery. Cost savings
to businesses was meaningful, and lower
company carbon footprints was and remains
important to many.
Business travel and the related impact on Palo
Alto’s economy will eventually recover to pre
pandemic levels, but it will likely be different
than in the past, and in ways yet to be confirmed.
DOMESTIC LEISURE
Palo Alto is not a typical, overnight
tourist destination as it lacks
major destination attractions. However, there are
unique local destinations to be celebrate.
Palo Alto’s largest audience sector for
hospitality spending (restaurants, attractions,
shopping) and tax revenues is a combination of
residents and workforce.Its next largest
includes residents and workforces from neighboring
Bay Area communities,such as Mountain View,
Menlo Park, Sunnyvale, Redwood
City,Burlingame and Los Altos.
OPPORTUNITIES
•Incentivize longer business travel or “Bleisure”
travel
•Grow weekend occupancy rates with non-business
travel
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 37 Packet Pg. 314 of 393
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05
ADMINISTRATIVE
ASSESSMENT
→REGULATORY ASSESSMENT
→ORGANIZATIONAL CAPACITY & STEWARDSHIP
Item 2.
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REGULATORY
ASSESSMENT
Item 2.
Attachment A - Streetsense
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Administrative Capacity:
TAKING OUR CUE FROM THE COMPREHENSIVE PLAN
The existing 2030 Comprehensive Plan is the primary tool for
guiding preservation and development of Palo Alto.
There are three sections in the plan which provide economic
development directives...
•Business & Economics –"business friendly and thriving"
•Land Use –Updates to the municipal code that support a
"diversification of land uses", including "retail that caters
to daily needs of residents"; "stimulates housing near
retail"; and allows for the "conversion of non-retail
commercial FAR to residential FAR, where appropriate"
•Transportation –Improve Walkability & Bikability by
"improving connectivity between businesses, parking and
transit stops", including "public art in alleyways" to
encourage walking
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 40 Packet Pg. 317 of 393
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Administrative Capacity:
Municipal codes are often an accumulation of general
controls that were used to solve specific problems in
specific places including:
•Concerns over rising retail rents from use groups (i.e.
office, chain stores, storage facilities, etc.)perceived as
contributing to rent inflation for "more desirable" uses
•Conflicts between residents and industrial or
entertainment uses
•Rules that restrict uses with a low-income or
transient customer base, like laundromats
•Concerns over “bad actors”, like bars and dance clubs
ZONING CODE BASICS
Item 2.
Attachment A - Streetsense
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Administrative Capacity:
ZONING CODE BASICS
GROWTH IN ON-LINE
SHOPPING
Retailers are using stores for local distribution, which
may be restricted as “warehousing & distribution”
TECHNOLOGICAL
ADVANCES
Breweries,specialty food manufacturing and maker
spaces are restricted as “Manufacturing & Processing”
DEMOGRAPHICS AND
LIFESTYLE
Wellness and medical services are restricted as
“Medical Office”
Recent trends in retail and changing work patterns can render some sections of the Zoning
Code outdates, E.G.
Customer Pick-Up/Returns within Store
Urgent Care, Adams Morgan, Washington, DC
Item 2.
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Administrative Capacity:
OVERVIEW OF APPLICABLE ZONING CONTROLS GOVERNING USES
Each overlay delineates separate permitting and use requirements and can make it difficult for
an applicant to determine what rules apply.
DISTRICT BASE DISTRICT OVERLAY 1 OVERLAY 2 OVERLAY 3 OVERLAY 4 OVERLAY 5
CALIFORNIA
AVE
CC –Community
Commercial
Retail
Preservation
R –Retail
Shopping
P –Pedestrian
Shopping
PTOD –Cal Ave
Pedestrian and
Transit Oriented
Cal Ave Parking
Assessment
District
MIDTOWN &
CHARLESTON
SHOPPING
CENTER
CN –Neighborhood
Commercial
Retail
Preservation
GF –Ground
Floor
P –Pedestrian
Shopping
Special Regulations
governing proximity
to Residential
DOWNTOWN
(University Ave)
CD –Downtown
Commercial
Retail
Preservation
GF –Ground
Floor
P –Pedestrian
Shopping
DOWNTOWN
(Lytton)
CD –Downtown
Commercial
Retail
Preservation
P –Pedestrian
Shopping
TOWN &
COUNTRY
VILLAGE
CC –Community
Commercial
Retail
Preservation
STANFORD
SHOPPING
CENTER
CC –Community
Commercial
Retail
Preservation
H
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Attachment A - Streetsense
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Item 2.: Staff Report Pg. 43 Packet Pg. 320 of 393
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Administrative Capacity:
ZONING OVERVIEW: CALIFORNIA AVENUE
CrossFit –Restricted due to size. Typical SF 2k
–2,500k sf
Pottery Making –Restricted under Learning
Centers and/or Industrial
Drybar –Restricted under both Salon and Formula Ordinance
Pediatrician –Restricted under Medical Office
C C ( 2 )( R )( P )
Along California Avenue, many Retail and “Retail-Like” uses
face regulatory barriers to entry, including businesses with 10 or
more locations nationwide
CONDITIONAL USE PERMITS REQUIRED FOR:
•Beauty Salons exceeding 1,800 SF
•Nail Salons exceeding 1,800 SF
•Barber Shops exceeding 1,800 SF
•Fitness or Exercise exceeding 1,800 sf
•Learning Centers for Individual or Small Group Settings
•Laundry & Dry Cleaning
•Financial Services (Except Drive-In) on ground floor
•Medical Offices up to 5k only when fronting Cal Ave.
•Commercial Recreation Uses up to 5k only when fronting Cal Ave
•Formula retail (with more than 10 stores nationally)
UNMENTIONED AND THEREFOR NOT ALLOWED
•Light Industrial as accessory uses (i.e., maker spaces)
RESTRICTED GROUND FLOOR USE
•Residential
Fitness –Restricted by Square Footage
Item 2.
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Administrative Capacity:
OPPORTUNITY
Right-size the Retail Preservation Ordinance to focus on targeted
areas of concentrated retail activity
CITY-WIDE RETAIL PRESERVATION ORDINANCE
Source: Kastle Systems Back to Work Barometer
In 2015, zoning protections were passed to restrict ground floor
retail conversions to non-retail uses in the face of significant
competition for space from higher paying office tenants.
2015 MARKET CONDITIONS
•At the time, Palo Alto was experiencing “record high
commercial rental rates” (average $61.44 psf) and “low office
vacancy rates” (2.83%)
2021-2022 MARKET CONDITIONS
•2022 Q3 Silicon Valley Office Vacancy: 17.7% (Source:JLL);
2021 Palo Alto Office vacancy rates 13.64%
(Source:CommercialCafe,2021)
•2021 office average asking rents: $93.75 (Class A
Space);$37.04 (Class B Space)
•Office occupancy rates for San Jose metro are between 27.3% -
41.7%,the lowest of the top ten metro area measured by
Kastle Systems nationwide.
Item 2.
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Item 2.: Staff Report Pg. 45 Packet Pg. 322 of 393
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Administrative Capacity:
ADDITIONAL REGULATIONS AND POLICIES
FORMULA ORDINANCE
Formula Retail Businesses have 10 or more business
locations in the United States that maintain uniformity
across merchandise, décor, scheme, trademark, etc.
OPPORTUNITY
Consider a cap (i.e.Arcata, CA), a focus on restaurants
(i.e.Carmel-by-the-Sea) a restriction by size (i.e.
Coronado)
SANDWICH & A-FRAME SIGNS
The Palo Alto Municipal Code defines dictates that these
signs must be located on private property. This effectively
renders nearly all signs along University Avenue and
California Avenue non-compliant.
OPPORTUNITY
Allow as-of-right merchandising, benches, and signage
within 2' of storefront (i.e.NYC)
ARB ARCHITECTURAL REVIEW
ARB provides aesthetic controls and design approval,
required for the issuance of building permits, to address the
visual impact of projects on adjacent properties and public
streets.
OPPORTUNITY
Clarify role of ARB and provide illustrative or plain
language design guidelines to offer businesses
predictability in the approval process
Item 2.
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ORGANIZATIONAL
CAPACITY &
STEWARDSHIP
Item 2.
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Administrative Capacity:
Arts, Culture &Entertainment
Palo Alto is well served by Arts, Culture &
Entertainment at both the City and District
Level.
Palo Alto's Economic Development service
delivery mechanisms are limited to the City
and the Palo Alto Chamber, which is a city-
wide membership organization.
At this time neither University
Ave/Downtown nor California Avenue have
active stewards to lead marketing, promotion,
event coordination,enhanced sanitation and
security (above and beyond what a city
provides).
ORGANIZATIONAL LANDSCAPE
Palo Alto
Chamber of
Commerce
D
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Economic Development
City of
Palo Alto
Palo Alto Art
Center/
Foundation
Palo Alto
Junior
Museum
and Zoo
Lucie Stern
Community
Center/ Palo
Alto's
Children'
Theatre
Albert &
Janet
Schultz
Cultural Arts
Hall
Elizabeth F.
Gamble
Gardens
Downtown
Library
Pacific Art
League of
Palo Alto
Cal Avenue
Merchants
Association
(Defunct)
The
Museum of
American
Heritage
Downtown
Palo Alto
BID
(Suspended)
University Ave
Parking
Committee
(overseen by
Chamber)
(Defunct)
Destination
Palo Alto
(Terminated)
OPPORTUNITY
Reactivate and support improvements to
stewardship along University and Cal Ave
Item 2.
Attachment A - Streetsense
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→PUBLIC AND PRIVATE REALM ELEMENTS
→ACCESSIBILITY & CONNECTIVITY
→FOCUS AREA SWOT ANALYSIS
06
PHYSICAL
ASSESSMENT
Item 2.
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Physical environment:
SIDEWALKSTRANSPORTATION
NETWORKS
WAYFINDING/
SIGNAGE
ALLEYS
GATHERING
SPACES BUILDINGS
PARKING
ELEMENTS INFORMING CHARACTERISTICS OF
BEST-IN-CLASS RETAIL PLACES
MANAGED
…with leadership
and capacity to
engage merchants
and property
owners and
implement
improvements
SAFE
…but more
importantly
perceived as safe
ACCESSIBLE
…to a customer base
…with little friction
for arrival/departure
regardless of mode
VISIBLE
…by potential
customers either
as they drive,
bike or walk by
CHAMPIONED
…with demonstrated
signs of maintenance
and investment
PEDESTRIAN
FRIENDLY
…co-located
businesses that
encourage cross
shopping
…walkable and
with few
disruptions in
continuity
BRAND
RESONANCE
…with clear
branding strategy
and identity
ANCHORED
…by retail
destination driver(s)
… by culture,
institutional or
entertainment uses
Item 2.
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CITY-WIDE
ELEMENTS
→ACCESSIBILITY & CONNECTVITY
Item 2.
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Physical environment:
CITY-WIDE ACCESSIBILITY &CONNECTIVITY: CONCEPTS
Regional and local transportation systems
will be relied upon by consumers within the
trade areas, near and far.
01
Regional Systems should be accompanied by
last-mile options (i.e.shuttles, bicycle,
scooters, delineated infrastructure)
02
Last-mile options are often first (and only)
options for local residents, workers, and
students.
03
Are there any physical barriers to overcome?
Are there accessibility gaps?
Is navigation made easy?
Item 2.
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Physical environment:
CITY-WIDE ACCESSIBILITY &CONNECTIVITY:
ROADWAY & TRANSIT NETWORKS
KEY TAKEAWAYS
•Road Network:
•Robust road network, which provides good regional
and local connectivity -Around 90% of households
own at least one vehicle.
•Network hindered by lack of grade separated
railway crossings, but there are Comprehensive
Plan policies to implement more in the future.
•Transit Network:
•Low to moderate (30 to 57) transit scores for all
districts.
•Line redundancy (mostly regionally serving) for
regional and community centers while neighborhood
centers have no service redundancy.
•Most of Palo Alto, from a geographic standpoint,
does not have access to transit within a ¼ mile
walk, including areas with lower median income
and higher existing and planned density.
•Future shuttles will provide last mile options in
places with limited transit access.
Item 2.
Attachment A - Streetsense
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Physical environment:
CITY-WIDE ACCESSIBILITY & CONNECTIVITY:
PEDESTRIAN &CYCLING NETWORKS
AREAS LACKING
SIGNAGE/ MARKINGS*
* Focuses on key locations
relevant to focus areas
KEY TAKEAWAYS
•Pedestrian Network:
•While overall robust with walk scores from 77 to
97, some areas lack sidewalks of proportionate
scale to adjacent roadway, adequate pedestrian
crossings and median refuges, or (well-maintained)
planted buffer areas.
•Bicycle Network:
•Cycling infrastructure is robust with more planned
connectivity (bike score of 97 to 100) but
navigating by signage/markings is difficult as it is
lacking in key locations.
•Currently no micromobility programs in place.
Item 2.
Attachment A - Streetsense
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Item 2.: Staff Report Pg. 54 Packet Pg. 331 of 393
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FOCUS AREA
SWOT ANALYSIS
→STRENGTHS: characteristics that give an advantage over others
→WEAKNESSES: characteristics that create a disadvantage relative to others
→OPPORTUNITIES: elements that could be exploited to its advantage
→THREATS: elements that could cause trouble if unaddressed
Item 2.
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Physical environment:
DOWNTOWN: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access and
redundancy
Generally good pedestrian
connectivity throughout
Unsupported pedestrian access/desire
lines from Caltrain Station
Biking navigation hindered by lack of
signage/markings
Parking Large amount and underutilized Complicated for all and cost
prohibitive for certain populations
Wayfinding/
Signage Ample signage throughout No cohesive branding or gateway
features
Sidewalks &
Street
Furniture
Adjacent parklets increase
sidewalk space for more use
Poorly maintained and/or mismatch
furniture and bike racks
Gathering
Spaces
Good amount of public and private
gathering spaces with private
spaces being well designed
Expansive public gathering spaces with
little programming or defining
features
Alleys
Mostly around 20 ft wide with
exposure to main streets
Several blank walls
Mostly utilitarian for trash pick-up
with inconsistent lighting sources
Buildings
Good mix of eclectic architecture
Room for more bulk and density
Several existing narrow buildings with
100 ft + depth
Inconsistent treatments of storefront
vacancies
Narrow on side with angled parking
Good mix of eclectic architecture
Opportunities
Threats
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 56 Packet Pg. 333 of 393
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Physical environment:
CALIFORNIA AVE: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access & redundancy
Planned BRT with improvements
Good bicycle connectivity
Multi-jurisdictional coordination
required for BRT/stop improvements
Parking
Large amount and underutilized
Digital wayfinding in new garage
Surface parking and structures take up
large portions of developable blocks
Wayfinding/
Signage
Public art consistently provided
along the street
No cohesive branding or memorable
gateway features
Sidewalks &
Street
Furniture
Wide sidewalks along California
Avenue with well-maintained
landscaping and street furniture
Sidewalks along El Camino Real out of
proportion with street
Gathering
Spaces
Nicely designed/ maintained
station plaza
Closed street and bulb outs provide
additional public gathering space
Closed street looks and feels
temporary
Alleys
Mostly around 20 ft wide with
access to/from main streets
Heavily used rear access
Mostly utilitarian for trash pick-up
with inconsistent lighting sources
Buildings
Building facades consistently align
California Avenue with most
providing uncovered/ transparent
windows
Unremarkable architecture –some
with limited permeability
Large gap of engaging building facades
from station plaza
120 ft ROW
Opportunities
Threats
El Camino Real hostile biking/pedestrian
experience -no median refuge for crossing
20 ft ROW
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 57 Packet Pg. 334 of 393
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Physical environment:
STANFORD SHOPPING CENTER: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good transit access and redundancy
Good pedestrian and bicycle access
to/from the district Limited bicycle connectivity once
inside the district
Parking
Large amount, well maintained with
mature landscaping and high visibility
"Park once and walk" environment
Expansive parking lots and
structures located on the periphery
creating an island effect
Wayfinding/
Signage
Ample amount of
Diverse, yet cohesive, types (including
digital)
N/A
Sidewalks &
Street
Furniture
Wide, well-maintained with generous
landscaping within district
Adequately sized along exterior roads
with planted buffers
Exterior sidewalks between
roadway and parking areas –
passthrough environment
Limited bus shelters/ seating
Gathering
Spaces
Variety of nicely designed and
maintained spaces with plush
landscaping, shade, seating, and
lighting
No gathering spaces along the
periphery
Buildings
High-quality, engaging storefronts
throughout the district, some with
spill-over
Storefronts mostly insular -
Outwardly facing storefronts are
100 -450 feet from street
Opportunities
Threats
Most direct pedestrian Caltrain
connection could use maintenance
Wide, well-maintained with generous
landscaping within district
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 58 Packet Pg. 335 of 393
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Physical environment:
TOWN & COUNTRY VILLAGE: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Robust vehicular access & adequate transit
access
Well-connected,reasonably sized
sidewalks, including delineated crossings,
and bike parking within district
Two separated north/south ped/bike paths
El Camino Real hostile
biking/pedestrian experience -
no median refuge for crossing
No east/west bicycle
connection
Parking
Ample, highly visible parking with
generous, well-maintained landscaping/
shade
"Park once and walk" environment
Expansive parking along
exterior roads detracts from
visibility of the buildings
Wayfinding/
Signage
Ample signage/wayfinding with consistent
branding
Charming signage under arcades
Not every store provides
signage on exterior of building,
limiting awareness
Sidewalks &
Street
Furniture
Comfortable sidewalk dimensions within
the district
Tree-lined sidewalks along exterior roads
Limited bus shelters/ seating
Gathering
Spaces
Utilitarian/passthrough spaces thoughtfully
design to be used as publicly accessible
gathering spaces
Lacks central gathering space
Buildings
Regionally responsive architectural style –
large arcade
Curated vacant storefronts
Subtle scale
Opportunities
Threats
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 59 Packet Pg. 336 of 393
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Physical environment:
MIDTOWN: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good access for all modes
Comfortable sidewalks for
walking/waiting with bus seating
Good surrounding bicycle
connectivity
Lacks transit redundancy and bus
shelters
Several curb cuts along Middlefield
disrupting pedestrian connectivity
Inconsistently placed bicycle parking
Parking
Adequate parking provided with
connected parking across
independent parcels
Good visibility
Weak "Park once and walk"
environment
Minimal parking lot
landscaping/shade
Wayfinding/
Signage Eclectic mix of business signage No gateway signage/ features
Sidewalks &
Street
Furniture
Adequately sized and maintained
sidewalks along Middlefield Road
with space for landscape buffers
Planted areas along Middlefield could
be improved
Buildings set back from the road lack
delineated pedestrian paths through
parking lots
Gathering
Spaces
A few privately owned gathering
spaces seamlessly connect to public
sidewalk
Lacks a central gathering space
No publicly owned/maintained
gathering spaces
Buildings
Eclectic mix of buildings styles,
materials, and colors –authenticity
Most storefronts permeable along
Middlefield Rd.
Unremarkable and
outdated/tired architecture
Inconsistent building wall along
Middlefield Rd.
Opportunities
Threats
Planted areas along Middlefield need
improvement
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 60 Packet Pg. 337 of 393
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Physical environment:
CHARLESTON SHOPPING CENTER: KEY FINDINGS
ELEMENTS STRENGTHS WEAKNESSES
Access/
Connectivity
Good vehicular access
Some transit access
Colorado Rd has good bicycle and
pedestrian infrastructure
Limited bus access –no redundancy
Lacks adequate bicycle and pedestrian
infrastructure along Middlefield Rd
Parking
Ample, underutilized parking with
high visibility
"Park once and walk" environment
Majority of lot used for parking/
maneuvering
Lightly landscaped with little shade
Wayfinding/
Signage
Consistent, well-maintained
signage Outdated shopping center signage
Sidewalks &
Street
Furniture
Adequately sized and maintained
sidewalks along Charleston Rd.
Sidewalks along Middlefield out of
scale with size of street with no
vegetated buffer
Narrow pedestrian space along
storefronts in some areas
Gathering
Spaces
Underutilized space repurposed to
gathering space
Arcade along building provides
intimate seating option
Few gathering spaces, overall -Limited
space around coffee shop
Repurposed space feels exposed/ lacks
shade -Places where shade exists not
suited for gathering
Buildings Buildings well maintained with
consistent treatments
Insignificant, outdated architecture
Suburban form/scale not conducive to
longer durations of stay
Opportunities
Threats
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 61 Packet Pg. 338 of 393
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07
GUIDING
PRINCIPLES
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 62 Packet Pg. 339 of 393
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Administrative Capacity:
REINFORCE HIERARCHY OF PLACE
•Stabilize and reinforce Downtown as a destination through improvements and
stewardship
•Embrace California Avenue as a community and neighborhood serving place by
increasing opportunities for new businesses and support for existing businesses
IMPROVE ACCESSIBILITY
•Embrace walking and biking solutions by fixing broken links and reinforcing
walkability to/from all of the City's commercial districts
•Address parking policies and systems that add complexity and cost burden on
low-wage, part-time workers
ADOPT POLICIES THAT REFLECT CHANGING MARKET CONDITIONS
•Ease the regulatory burden for businesses and revise outdated restrictions that
create hurdles to tenancy
•Focus retail and retail-like uses in places where they are market-supported
GUIDING PRINCIPLES
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 63 Packet Pg. 340 of 393
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THANK YOU
Item 2.
Attachment A - Streetsense
Diagnostic - Final
Item 2.: Staff Report Pg. 64 Packet Pg. 341 of 393
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City Council
Supplemental Report
From: Kiely Nose, Assistant City Manager
Meeting Date: February 13, 2023
Item Number: 8
Report #:2302-0962
TITLE Supplemental Report to Action Item #8, FY 2023 Mid-Year Budget Review: Revised Budget
Stabilization Reserve (BSR) Calculation
This supplemental report addresses a correction necessary to the Budget Stabilization Reserve in
the FY 2023 Mid-Year Report.
Revised General Fund Budget Stabilization Reserve (BSR) Calculation
In final preparation for City Council discussion of the FY 2023 Midyear Budget Review (staff report
#2212-0515), staff identified an error and understatement of the General Fund Budget
Stabilization Reserve (BSR) balance by $3.7 million. After accounting for use of the BSR to balance
the FY 2023 Adopted Budget, the reserve established in the FY 2023 Adopted Budget for FY 2023
Service Reinvestments (2-year limited term) was miscalculated when reconciling and accounting
for three fiscal years (FY 2022, FY 2023, and FY 2024) with the audited June 30, 2022 BSR balance
of $72.8 million.
This correction does not impact recommended budget adjustments included in the FY 2023 Mid-
Year report; these adjustments and the attachments of the staff report remain complete and
accurate. However, this does impact the projected ending fund balance as of June 30, 2023. As a
result, approval of the amendments outlined in the FY 2023 Mid-Year report will result in a
projected BSR balance of $51.8 million as of the end of FY 2023. This is within the target range of
15% to 20% of the General Fund Budget expense and is above the City Council target level of
18.5%, or $45.6 million, by $6.2 million.
Table 1 provides a red-lined correction outlining the status of the Budget Stabilization Reserve
based on the adjustments described above.
Table 1: REVISED Budget Stabilization Reserve Funding Status
Mid-Year
Staff Report
Revised as
of 2/9/2023
General Fund BSR Balance, June 30, 2022 (includes FY22 surplus) $72,835 $72,835
FY 2023 Approved Adjustments
FY 2023 Adopted Budget & FY 2023 Service Reinvestments (yr
2)
($12,772) ($9,072)
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Council Approved Items (Downtown Streets Team,
Reappropriations)
($267) ($267)
Subtotal: BSR Balance, After Approved Adjustments $59,796 $63,496
FY 2023 Mid-year Adjustments ($11,686) ($11,686)
Projected FY 2023 BSR Balance, June 30, 2023 $48,110 $51,810
BSR (%) 19.4% 20.9%
BSR ($) above/(below target) $2,509 $6,209
Based on Council adopted policy to allocate BSR funds in excess of the 18.5% level at the end of
a fiscal year, surpluses are typically split between the Capital Improvement Fund Infrastructure
Reserve (IR) and the City’s Pension 115 Trust Fund at the direction of the City Manager. The
remaining funds above the BSR target of 18.5%, including the $3.7 million may remain in the BSR,
or may be allocated. As uncommitted funds, the Council may provide direction on the use of
them.
CONCLUSION
The information in this report does not change the recommendations being made in the FY 2023
Mid-Year Report. This report clarifies the estimated General Fund BSR balance based on a
correction in accounting for a reserve to fund ongoing services in FY 2024. This clarification
ensures the Council has the most up to date information when considering the ability to fund
actions in FY 2023 as well as planning for the FY 2024 Budget and beyond.
APPROVED BY:
Kiely Nose, Assistant City Manager
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Action
Lead Department: Administrative Services
Meeting Date: January 23, 2023
TITLE
Review and Accept the FY 2024 - FY 2033 Long Range Financial Forecast (LRFF) and FY 2023
Budget Development Guidelines
RECOMMENDATION
The Finance Committee and staff recommend that the City Council accept the Fiscal Year (FY)
2024 to 2033 General Fund Long Range Financial Forecast (Attachment A) and annual Budget
Development Guidelines (Attachment B) and direct staff to use this forecast as the starting
point for the initiation of the FY 2024 budget process.
EXECUTIVE SUMMARY
The FY 2024 - 2033 Long Range Financial Forecast (LRFF) was reviewed with the Finance
Committee on December 6, 2022 (Attachment A) along with the annual Budget Development
Guidelines (Attachment B). This report summarizes the key discussion points with the Finance
Committee and includes additional information regarding Utility rates that was not available at
the time the LRFF was presented to the Finance Committee and may impact development of
the FY 2024 Budget. Per City Council policy, items that are unanimously approved by the
Finance Committee are placed as a consent agenda item for the City Council. However, staff
and the Committee have placed this item on the City Council’s action agenda for deliberation of
the full Council in acknowledgement of the importance for financial planning in the continued
varied economic conditions.
BACKGROUND
The LRFF is a preliminary ten-year forecast based on the most current information available,
actual revenues for FY 2022, and projected results through FY 2023 at the point in time of release.
General Fund expenditures are based on current City Council approved service levels (Base Case)
compared to projected revenues over the next ten years. This Forecast allows staff and City
Council to look at both the short-term and long-term financial status of current service levels in
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the General Fund to inform daily policy decisions and evaluate long-term goals and ongoing
challenges.
The Base Case Long Range General Fund forecast projects a surplus of $0.4 million in FY 2024,
followed by a $3.4 million gap in FY 2025 and a $2.6 million gap in FY 2026, with small but
increasing surpluses in FY 2027 through FY 2033. This forecast maintains current service levels
approved in FY 2023 and should be used for planning purposes to assist in gauging effects of
major policy interventions against a likely “status quo” version of the future.
Staff modeled an alternate forecast scenario that reflects a more severe recession. Compared
to the Base Case, this scenario increases the General Fund gap over the next ten years. FY 2024
changes from a surplus to a gap of $3.5 million, and revenues are not anticipated to be able to
fund the annual expenditures until FY 2029.
Staff modeled an alternate forecast that reflects estimated funding from Measure K (new
business tax) and the impacts on the General Fund over the next ten years reflects a surplus in
FY 2024 of $1.1 million, a gap in FY 2025 of $1.9 million, and surpluses in FY 2026 through FY
2033. These alternate forecasts were done separately to show the impacts of each scenario in
isolation; however, aspects of both alternate forecasts may occur in conjunction in the future.
As the COVID-19 pandemic is waning, economic uncertainty has heightened the intensity of
financial forecasting and the budget development process including the need for complex
problem-solving within an engaged public process across a wide range of issues. There are also
several issues across the City continuing to impact the ability to transition beyond impacts of
the pandemic including staff turnover, recruitment and retention, and supply chain issues and
inflation that continue to increase costs across all aspects of the City. Development of the FY
2024 budget and planning for the subsequent years outlined in the forecast will need to be
done strategically over the next several months in order to balance the increased service level
needs of the community with the financial resources currently projected. With these variables,
ongoing revenues are unable to keep pace with expenses in the short term.
City staff will continue to review and refine these projections to establish the FY 2024 budget
and use this forecast to begin internal planning for budget balancing solutions. Based on this
forecast, it is anticipated that the prioritization of spending and the use of one-time surplus
funding from FY 2022 to cover short-term gaps over the next several years will be necessary to
ensure continued financial stability. More detailed guidelines or Budget Policies to inform the
development of the FY 2024 budget are discussed in Attachment B.
ANALYSIS
Finance Committee Review and Discussion
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As part of the Finance Committee’s review of the LRFF, there were no requests for additional
information or changes to the report for the Council’s review; however, a few topics were
highlighted as part of the discussion. Staff has compiled these items below.
Economic Development:
-Potential for ongoing remote work and reduced office occupancy to impact major tax
revenues, and lead to an extended local recession rather than a short term “blip”.
-Permanent parklet program should be evaluated as a revenue source, or at minimum,
cost neutral.
-Evaluate the potential for revenue from a new Fiber Utility.
Major Projects/Council Priorities:
-Repair of the Cubberley Gym should be prioritized as it impacts a lot of children citywide.
-A majority of work related to the Sustainability and Climate Action Plan (S/CAP) is
currently funded in the Utility Funds; however, as work continues to expand, this will
become a shared responsibility across other funds.
Labor Costs and Staffing Analysis:
-As the biggest source of costs to the City, ensure that salaries and benefits such as
pensions and medical plans are managed carefully, as outlined in the pension and retiree
medical policies recently reviewed and updated by the Finance Committee.
-Quantifying service reinvestments should be evaluated in a manner other than just
comparing headcount pre and post pandemic.
Additional Information for Council Review
Utility Rates: Current economic uncertainty is causing the potential for increases to the utility
rates. New information that was not available when the LRFF was published in late November is
being presented to Council in this report for review and incorporation into the development of
the FY 2024 budget. This information can be seen in Attachment C.
FISCAL/RESOURCE IMPACT
Financial implications from this report and input from the City Council will be considered in the
City Manager’s development of the Fiscal Year 2024 budget.
STAKEHOLDER ENGAGEMENT
The preliminary forecast for FY 2024 represents the beginning of the fiscal year 2024 budget
development process. As in previous years, the City Council discussion of LRFF will provide
guidance to staff in the budget development process. It is anticipated that conversations with
City Council and the community will occur through public budget hearings in Spring 2023,
according to the standard budget adoption process.
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: February 6, 2023
TITLE
Review and Accept the FY 2024 - FY 2033 Long Range Financial Forecast (LRFF) and FY 2024
Budget Development Guidelines
RECOMMENDATION
The Finance Committee and staff recommend that the City Council accept the Fiscal Year (FY)
2024 to 2033 General Fund Long Range Financial Forecast Revised Base Case and annual Budget
Development Guidelines (Attachment B) and direct staff to use this forecast as the starting point
for the initiation of the FY 2024 budget process.
EXECUTIVE SUMMARY
The FY 2024 - 2033 Long Range Financial Forecast (LRFF) was reviewed with the Finance
Committee on December 6, 2022 (Attachment A) along with the annual Budget Development
Guidelines (Attachment B) and were unanimously approved by the Committee. This report 1)
summarizes the key discussion points with the Finance Committee, 2) provides a revised Base
Case Forecast in alignment with cost estimates of City and labor group positions on economic
proposals1, and 3) provides preliminary information regarding Utility rates which may impact
development of the FY 2024 Budget.
The Revised Base Case General Fund forecast reflects projected gaps in the first four years (FY
2024-FY 2027) with expenses out pacing revenues resulting in deficits ranging between $500,000
to $5.8 million annually. Staff expect that a combination of one-time funds and the eventual
collection of new Business tax revenues from the passage of Measure K will assist in resolving
these deficits.
Per City Council policy, items that are unanimously approved by the Finance Committee are
placed as a consent agenda item for the City Council. However, staff and the Committee have
placed this item on the City Council’s action agenda for deliberation of the full Council in
1 Subsequent to the Finance Committee review in December 2022, the City has reached tentative agreement with
two labor groups, on this same February 6, 2023 agenda for approval, and adopted a new management and
professional compensation plan.
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acknowledgement of the importance for financial planning in the continued varied economic
conditions.
BACKGROUND
The LRFF is a preliminary ten-year forecast based on the most current information available,
actual revenues for FY 2022, and projected results through FY 2023 at the point in time of release.
General Fund expenditures are based on current City Council approved service levels (Base Case)
compared to projected revenues over the next ten years. This Forecast allows staff and City
Council to look at both the short-term and long-term financial status of current service levels in
the General Fund to inform daily policy decisions and evaluate long-term goals and ongoing
challenges.
•Base Case Long Range General Fund forecast (as of December 2022) projects a surplus of
$0.4 million in FY 2024, followed by a $3.4 million gap in FY 2025 and a $2.6 million gap
in FY 2026, with small but increasing surpluses in FY 2027 through FY 2033. This forecast
maintains current service levels approved in FY 2023 and should be used for planning
purposes to assist in gauging effects of major policy interventions against a likely “status
quo” version of the future.
•Alternate forecast scenario that reflects a more severe recession. Compared to the Base
Case, this scenario increases the General Fund gap over the next ten years. FY 2024
changes from a surplus to a gap of $3.5 million, and revenues are not anticipated to be
able to fund the annual expenditures until FY 2029.
•Alternate forecast that reflects estimated funding from Measure K (new business tax) and
the impacts on the General Fund over the next ten years reflects a surplus in FY 2024 of
$1.1 million, a gap in FY 2025 of $1.9 million, and surpluses in FY 2026 through FY 2033.
These alternate forecasts were done separately to show the impacts of each scenario in
isolation; however, aspects of both alternate forecasts may occur in conjunction in the
future.
As the COVID-19 pandemic is waning, economic uncertainty has heightened the intensity of
financial forecasting and the budget development process including the need for complex
problem-solving within an engaged public process across a wide range of issues. There are also
several issues across the City continuing to impact the ability to transition beyond impacts of the
pandemic including staff turnover, recruitment and retention, supply chain issues, and inflation
that continue to increase costs across all aspects of the City. Development of the FY 2024 budget
and planning for the subsequent years will balance the increased service level needs of the
community with the financial resources projected. Ongoing revenues are unable to keep pace
with expenses in the short term.
Based on this forecast, it is anticipated that the prioritization of spending and the use of one-time
surplus funding from FY 2022 to cover short-term gaps over the next several years will be
necessary to ensure continued financial stability. More detailed guidelines or Budget Policies to
inform the development of the FY 2024 budget are discussed in Attachment B.
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ANALYSIS
This report
1) Summarizes the key discussion points with the Finance Committee,
2) Provides a revised Base Case Forecast in alignment with cost estimates of City and labor
group positions on economic proposals, and
3) Provides preliminary information regarding Utility rates which may impact development
of the FY 2024 Budget.
Finance Committee December 2022 Review and Discussion
As part of the Finance Committee’s review of the LRFF, there were no requests for additional
information or changes to the report for the Council’s review; however, a few topics were
highlighted as part of the discussion. Staff has compiled these items below.
Economic Development:
Potential for ongoing remote work and reduced office occupancy to impact major tax
revenues, and lead to an extended local economic shift rather than a short term “blip”.
Permanent parklet program should be evaluated as a revenue source, or at minimum,
cost neutral.
Evaluate the potential for revenue from a new Fiber Utility.
Major Projects/Council Priorities:
Repair of the Cubberley Gym should be prioritized as it impacts many children citywide.
A majority of work related to the Sustainability and Climate Action Plan (S/CAP) is
currently funded in the Utility Funds; however, as work continues to expand, this will
become a shared responsibility across other funds.
Labor Costs and Staffing Analysis:
As the biggest source of costs to the City, ensure that salaries and benefits such as
pensions and medical plans are managed carefully, as outlined in the pension and retiree
medical policies recently reviewed and updated by the Finance Committee.
Quantifying service reinvestments should be evaluated in a manner other than just
comparing headcount pre and post pandemic.
Revised Base Case Fiscal Year (FY) 2024 to 2033 General Fund Long Range Financial Forecast
Subsequent to the Finance Committees review of the LRFF, a new agreement with Management
Employees has been approved by the City Council at the December 19, 2022 meeting, and
agreements with the International Association of Fire Fighters (IAFF) and Service Employees
International Union (SEIU) are scheduled for City Council approval on February 6, 2023. This
report includes a revised LRFF forecast that aligns cost estimates with this updated status of City
and labor group positions on economic proposals.
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Consistent with prior Council direction in previous long range financial forecasts, a general wage
adjustment of 2.0% was included for all years of the forecast along with a level of reserve to reach
a target market placement for employee compensation in new labor agreements as a forecasting
assumption, not as a commitment to future negotiations.
Staff will continue to refine these estimates during the FY 2024 annual budget process as labor
agreements are finalized and more information is gathered on revenue trends. This revised Base
Case, revises the LRFF reflecting gaps in the first four years, FY 2024 through FY 2027.
Table 1: Summary of Net One-Time Surplus/(Gap) – Base Case vs. Revised
Net Surplus/(Gap)FY23 (Est.)FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Base Case $0-6.0M $0.4M ($3.4M)($2.6M)$1.5M $2.9M
REVISED Base Case $0-4.7M ($0.5M)($5.8M)($5.1M)($1.0M)$0.3M
Table 2: REVISED Base Case, FY 2024 -2033 Long Range Financial Forecast
Preliminary Utility Rate Forecasts
Current economic uncertainty and commodity prices are expected to result in recommended
increases to the utility rates for FY 2024. New information, not available when the LRFF was
published in late November, is being provided for review and a preliminary preview of rates
expected to be discussed as part of the FY 2024 budget process. These rates will impact
customers residential and commercial, including the City itself as a consumer of these
commodities. This information can be seen in Attachment C. At the time of this preliminary
review of estimated rate forecasts, the state of California has seen unprecedented rainfall and
flooding. Staff are reviewing the impacts of this storm on rate forecasts and will ensure this is
factored into the recommended rate changes for FY 2024. These recommendations are
scheduled to be reviewed in March – May 2023 by the Finance Committee and adopted the City
Council in June 2023.
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FISCAL/RESOURCE IMPACT
Financial implications from this report and input from the City Council will be considered in the
City Manager’s development of the Fiscal Year 2024 budget.
Upcoming milestones related to the City’s fiscal standing and the FY 2024 Budget Process include:
February 13 Council Meeting – FY 2023 Mid-Year Budget Review and Second Quarter
Fiscal Analysis Report
March/April Utilities Advisory Commission (UAC) and Finance Committee Meetings – Five
Year Utility Financial Plans and FY 2024 Rate Recommendations
May 1 Council Meeting – FY 2024 Proposed Operating and Capital Budgets Published
May Finance Committee Hearings – FY 2024 Proposed Budget Review, including Utility
Rates, Municipal Fees, and Five-Year Capital Improvement Plan
June Finance Committee Meeting – FY 2023 Third Quarter Fiscal Analysis Report
June 19 Council Meeting – Adoption of the FY 2024 Operating and Capital Budgets, the
Utility Rates, and Municipal Fees
STAKEHOLDER ENGAGEMENT
The preliminary forecast for FY 2024 represents the beginning of the fiscal year 2024 budget
development process. As in previous years, the City Council discussion of LRFF will provide
guidance to staff in the budget development process. It is anticipated that conversations with
City Council and the community will occur through public budget hearings in Spring 2023,
according to the standard budget adoption process.
ENVIRONMENTAL REVIEW
This report is not a project for the purposes of the California Environmental Quality Act.
Environmental review is not required.
ATTACHMENTS
Attachment A: FY 2024-2033 Long Range Financial Report (LRFF), CMR 14629
Attachment B: FY 2024 Budget Development Guidelines
Attachment C: Preliminary Utility Rates Forecast
APPROVED BY:
Kiely Nose, Assistant City Manager
Report #: 2301-0753
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City of Palo Alto (ID # 14629)
Finance Committee Staff Report
Meeting Date: 12/6/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Review and Forward the FY 2024 - 2033 Long Range Financial Forecast
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee review and recommend that the City Council
accept the General Fund Long Range Financial Forecast (LRFF) for Fiscal Year 2024-2033 and the
FY 2024 annual Budget Development Guiding Principles (Attachment A) and direct staff to use
this forecast as the starting point for the initiation of the FY 2024 budget process.
Executive Summary
Annually, the City presents a ten-year General Fund Long Range Financial Forecast (LRFF) in
December that marks the beginning of the annual budget process. This preliminary forecast is
based on the most current information available, actual revenues for FY 2022, and projected
results through FY 2023 at the point in time of release. General Fund expenditures are based on
current City Council approved service levels compared to projected revenues over the next
year.
The Base Case Long Range General Fund forecast projects a surplus of $0.4 million in FY
2024, followed by a $3.4 million gap in FY 2025 and a $2.6 million gap in FY 2026, with
small but increasing surpluses in FY 2027 through FY 2033. This forecast maintains
current service levels approved in FY 2023 and should be used for planning purposes to
assist in gauging effects of major policy interventions against a likely “status quo”
version of the future.
Staff modeled an alternate forecast scenario that reflects a more severe recession.
Compared to the Base Case, this scenario increases the General Fund gap over the next
ten years. FY 2024 changes from a surplus to a gap of $3.5 million, and revenues are not
anticipated to be able to fund the annual expenditures until FY 2029.
Staff modeled an alternate forecast that reflects estimated funding from Measure K
and the impacts on the General Fund over the next ten years reflects a surplus in FY
2024 of $1.1 million, a gap in FY 2025 of $1.9 million, and surpluses in FY 2026 through
FY 2033. These alternate forecasts were done separately to show the impacts of each
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scenario in isolation; however, aspects of both alternate forecasts may occur in
conjunction in the future.
As the COVID-19 pandemic is waning, new economic challenges are emerging such as monetary
policy tightening actions by the US Federal Reserve to tame persistently high inflation and
increasing geopolitical risks which may lead the United States into a recessionary period. This
economic uncertainty has heightened the int ensity of financial forecasting and budget
development process. New analyses and data generation demands require deep dives into
complex problem-solving within an engaged public process across a wide range of issues. These
forecast figures present staff with the challenge of prioritizing the growing needs of the City
with the fiscal sustainability of these needs.
Locally, based on current election data, staff anticipate that both Measure L and K will be
successful in gaining voter approval. Measure L, affirming the ongoing Equity Transfer from the
Gas Utility Fund is included in the Base Case scenario. Measure K, approval of a new Business
Tax, is not assumed in this LRFF as part of the Base Case scenario; a resolution for intended use
of funding has been earmarked for investments in public safety, transportation and train
crossing safety, and affordable housing and unhoused support.
There are several issues across the City continuing to impact the ability to transition beyond
impacts of the pandemic including staff turnover, recruitment and retention, and supply chain
issues and inflation that continue to increase costs across all aspects of the City. Development
of the FY 2024 budget and planning for the subsequent years outlined in the forecast will need
to be done strategically over the next several months in order to balance the increased service
level needs of the community with the financial resources currently projected. With these
variables, ongoing revenues are unable to keep pace with expenses in the short term.
City staff will continue to review and refine these projections to establish the FY 2024 budget
and use this forecast to begin internal planning for budget balancing solutions. Based on this
forecast, it is anticipated that the prioritization of spending and the use of one-time surplus
funding from FY 2022 to cover short-term gaps over the next several years will be necessary to
ensure continued financial stability. More detailed guidelines or Budget Policies to inform the
development of the FY 2024 budget are discussed at the end of this document (Attachment A).
Included in this report and subsequent documents are the following:
- The Economy: discussion of the current financial climate of the United States to the
local economy of the City of Palo Alto (details can be found in Attachment B)
- Summary Long Range Financial Forecast including Revenue and Expense assumptions in
FY 2024-2033 (details can be found in attachment C and D)
o Financial status of the General Fund as of the FY 2023 Adopted B udget
o Brief discussion of FY 2022 surplus funding
o Updated FY 2023 revenue assumptions based on current projections
- FY 2024 Budget Development Policies to inform the Budget process (Attachment A)
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- Alternate scenarios to the base case forecast to demonstrate financial impacts to the
City from:
o Impacts from a moderate recession
o Impacts from the passage of Measure K
Background
Annually the Office of Management and Budget produces a ten-year General Fund Long Range
Financial Forecast (LRFF). The LRFF reflects staff’s best estimates on the projected revenues and
expenditures over the next ten years based on the information that is currently available. It is
important to note that the LRFF is a planning document and is separate and distinct from the
development of the City’s annual Operating and Capital Budgets. There are assumptions and
parameters modeled in the LRFF, but these assumptions are revised and refined as more
information becomes available through the budget development process.
The LRFF contains a comprehensive review of the costs to provide current City Council
approved service levels, including current contracts, updates to salaries and benefits based on
the current population of employees, and the current labor contracts in effect. The LRFF also
reviews the status of the current economy and various economically sensitive revenues such as
Sales Tax, Documentary Transfer Tax, Property Tax, and Transient Occupancy Tax to explain key
trends in those areas. This Forecast allows staff and City Council to look at both the short-term
and long-term financial status of current service levels in the General Fund to inform daily
policy decisions and evaluate long-term goals and ongoing challenges.
The Economy
U.S. workers and consumers have shown great resiliency throughout the pandemic, energy cost
spikes, geopolitical uncertainty, and high inflation. National, state, regional, and local economic
indicators are in transition; the economy exited 2021 in overdrive, but that growth combined
with global supply chain constraints has pushed inflation higher than expected. The federal
reserve began raising the fed funds interest rate in March 2022 and is expected to continue in
2023 which is intended to tame inflation, but as of the writing of this report, progress is slower
than desired. This has begun to and is predicted to cool the economy and result in a rise in
unemployment. The federal reserve’s ability to balance the objectives of fighting inflation while
maintaining employment and GDP growth will be challenging.
The local economy continues to show strong performance in the latter half of the calendar year
2022 though signs of “headwinds” are growing that are likely to stem economic growth.
Additional details on economic statistics such as Gross Domestic Product (GDP) and Consumer
Price Index (CPI) can be found in Attachment B in greater length.
Discussion
Palo Alto serves a diverse community with a broad range of unique services that adds to the
complexity of managing a balanced budget and healthy fiscal outlook. This annual General
Fund Long Range Financial Forecast is coupled with annual rate forecasts for the City’s various
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enterprise activities such as electric, gas, and water utility services provided to the community.
As the COVID-19 pandemic is waning, new economic challenges are emerging which may lead
the United States into a recessionary period. This economic uncertainty has heightened the
intensity of financial forecasting and budget development process and continues the rigger
previously demonstrated by the Council and staff through the challenges of the pandemic.
These forecast figures present staff with the challenge of prioritizing the growing needs of the
City with the fiscal sustainability of these needs.
The FY 2024-2033 ‘Base Case’ revenue and expense assumptions include updates on the status
of the general fund as of the FY 2023 Adopted Budget, the FY 2022 fiscal year end, and current
FY 2023 projected assumptions. As with all forecasts, there is uncertainty regarding the revenue
and expenditure estimates contained in this document. This forecast assumes a mild 18-month
recession at the beginning of the ten-year period. Major tax revenues continue to rebound
from prior year levels, reserves for economically sensitive revenues have been elim inated as
programs modified or canceled during the pandemic have returned, and investments in Capital
projects are restored to pre-pandemic levels. One-time resources that have boosted the City’s
financial outlook in prior years: Coronavirus Aid, Relief, and Economic Securities Act (CARES Act)
and American Rescue Plan Act (ARPA) have been allocated in full with no funds included in FY
2024.
Base Case
Table 1 displays the projected General Fund revenues and expenditures over ten years and the
cumulative net operating margin.
- The operating margin reflects the variance between the projected General Fund
revenues and expenditures for each year of the forecast or the annual surplus or
shortfall.
- The net operating margin is presented on a one-time basis, as the annual surplus or
shortfall for a given year, and on an incremental basis.
The incremental forecast assumes that each shortfall is addressed completely with ongoing
solutions in the year it appears and that each surplus is completely expended with ongoin g
expenditures. It is the City’s goal to remain in balance on an ongoing basis, so the incremental
figure is useful to illustrate the additional surplus and/or shortfall attributed to a particular
fiscal year. To the extent a shortfall is not resolved, or a surplus is not expended on an ongoing
basis, it is important to understand that the remaining budget gap or surplus will remain and be
pushed to the following year.
The Base Case financial forecast projects a surplus of $0.4 million in FY 2024, followed by a $3.4
million shortfall in FY 2025, a $2.6 million shortfall in FY 2026, and increasing surpluses
thereafter. Based on these assumptions, the cumulative net operating margin, or ongoing
surplus, during the forecast period is a surplus of $33.9 million .
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TABLE 1: FY 2024 – 2033 Long Range Financial Forecast (Base Case)
TABLE 2: FY 2024 – 2033 Long Range Financial Forecast Net Operating Margin (Base Case)
Revenue Assumptions
The FY 2022 Annual Comprehensive Financial Report (ACFR), scheduled for review by the
Finance Committee on November 29, 2022, reported higher annual earnings for general fund
revenues as compared to the prior year; major tax revenues experienced faster recovery paces
in the last two quarters of the fiscal year (CMR 146321). Major tax revenues generated $137.5
million in FY 2022, an increase of $20.7 million or 17.7% over the FY 2021 levels of $116.8
million. Staff and the Council anticipated a portion of this increase in revenues and discussed
$14 million during the May 2022 budget discussions for allocation in FY 2023. This recovery
trend may continue as discussed in the First Quarter (Q1) FY 2023 Financial Report, scheduled
for review by the Finance Committee on December 6, 2022; several categories appear to be
tracking similarly in FY 2023 to FY 2022 (CMR 14630). The current timing and potential for
recession makes it difficult to determine if these trends will continue in the near term. In FY
2023, Staff estimates a range of $238 to $244 million in total revenues, reflecting up to $6
1 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/finance-
committee/2022/20221129/20221129pfcsm-linked.pdf
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million or 2.5% above adopted budget levels. The higher end of this projection assumes that
revenues will continue a similar positive trend as recent quarters. However, actual results will
vary depending on the timing and magnitude of recessionary impacts in the near term.
A summary of revenue assumptions are discussed here, extensive information regarding each
revenue category can be found in Attachment C.
- Tax revenues constitute nearly 60% of General Fund resources. In FY 2024, the forecast
projects an $11.4 million or 8.4% increase from FY 2023 adopted levels ($135.1 million
to $146.5 million). This increase is primarily attributed to higher anticipated receipts for
Sales Tax, Property Tax, and Transient Occupancy Tax (TOT) categories.
o Sales Taxes is anticipated to increase $0.7 million or 2.2% from FY 2023 ($32.6
million to $33.3 million). Revenue in this category is experiencing growth;
however, is not anticipated to reach pre-pandemic levels until FY 2026.
o Property Taxes make up the largest source of the General Fund’s revenue,
approximately 25%. In FY 2024, this revenue is anticipated to increase $3.9
million or 6.5% from FY 2023 ($58.9 million to $63.7 million). During economic
downturns, impacts to property tax occur a year later, however, due to robust
residential and commercial property sales this source has continued to grow
annually.
o Transient Occupancy Taxes are impacted by business and other leisure/non-
leisure travel and experienced significant reductions in the past few years due t o
a number of factors resulting from the pandemic. Though this revenue remains
below pre-pandemic actuals, the opening of the two Marriott hotels in FY 2021
and the re-opening of multiple hotels in FY 2021 and FY 2022 were positive
developments for this tax revenue. In FY 2024, this revenue is anticipated to
increase $6.8 million or 37.3% from FY 2023 ($18.2 million to $25.0 million);
however, this category is not anticipated to reach pre-pandemic levels until FY
2026.
- The forecast for non-tax revenues projects a $1.0 million or 1.2% increase in FY 2024
from FY 2023 adopted levels. This increase is primarily attributable to the alignment of
revenue estimates for the Stanford agreement to provide Fire and Dispatch services,
and the restoration of several programs and services that were modified due to public
health orders, mainly in public safety and community services.
- One-time resources that have boosted the City’s financial outlook in prior years have
been eliminated:
o The City received $13.7 million in American Rescue Plan Act (ARPA) funding that
the Council, per the legislation, designated to address the significant revenue
loss resulting from the pandemic;
o $294,000 in Coronavirus Aid, Relief, and Economic Securities Act (CARES Act)
funding to provide rental assistance and support safe parking and COVID-19
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testing programs; and
o $3.5 million in federal funds in FY 2022 through the Staffing For Adequate Fire
and Emergency Response (SAFER) Grant Program. This funding offset the hiring
costs of 5.0 firefighters for a three-year period and is fully expended in FY 2025.
The changes by revenue category, including dates in which revenues are anticipated to reach
pre-pandemic levels, are discussed in greater detail below.
TABLE 3: General Fund Revenue Forecast
Revenue & Other Sources
Actual
2022
Adopted
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CAGR 10
Years
CAGR 5
Years
Sales Taxes 32,705 32,580 33,288 34,953 37,085 39,570 41,292 43,080 45,096 47,301 49,628 52,085 4.6%2.2%
Property Taxes 59,353 59,770 63,669 67,305 71,224 75,448 79,950 84,570 89,238 94,334 99,937 106,164 5.2%2.3%
Transient Occupancy Tax
General Purpose 8,828 8,472 14,429 15,255 16,059 16,549 17,181 17,894 18,766 19,710 20,740 21,829 4.2%1.8%
Infrastructure 8,118 9,727 10,567 11,173 11,762 12,121 12,583 13,106 13,744 14,435 15,190 15,987 4.2%1.8%
Documentary Transfer Tax 11,990 7,217 6,867 7,029 7,200 7,381 7,574 7,849 8,152 8,452 8,755 9,066 2.8%1.0%
Utility Users Tax 15,599 15,579 15,878 16,967 18,359 19,133 18,460 20,488 21,215 21,943 22,706 23,498 4.0%1.5%
Other Taxes and Fines 893 1,784 1,784 1,784 1,784 1,784 1,784 1,784 1,784 1,784 1,784 1,784 0.0%0.0%
Subtotal: Taxes 137,486 135,129 146,483 154,467 163,473 171,986 178,824 188,771 197,995 207,959 218,740 230,413 4.6%2.0%
Charges for Services 28,671 30,271 33,355 33,648 33,847 33,952 34,040 34,225 34,379 34,563 34,622 34,744 0.4%0.2%
Permits and Licenses 9,111 9,764 11,454 11,928 12,154 12,266 12,456 12,743 13,020 13,316 13,161 13,274 1.5%0.8%
Return on Investments 1,325 1,066 1,492 1,528 1,574 1,622 1,671 1,734 1,805 1,881 1,960 2,043 3.2%1.1%
Rental Income 13,681 15,572 16,447 17,303 18,034 18,635 19,151 19,682 20,228 20,792 21,372 21,968 2.9%1.5%
From Other Agencies 9,232 7,526 1,281 998 266 266 266 266 266 266 266 266 -14.5%-14.5%
Charges to Other Funds 13,980 13,690 14,460 14,810 14,989 15,091 15,398 15,668 15,963 16,261 16,330 16,411 1.3%0.6%
Other Revenue 2,447 2,201 2,592 2,615 2,630 2,646 2,662 2,679 2,696 2,712 2,730 2,748 0.6%0.3%
Total Non-Tax Revenue 78,447 80,090 81,080 82,830 83,495 84,477 85,643 86,996 88,357 89,791 90,441 91,454 1.2%0.5%
Operating Transfers-In 22,802 22,532 23,614 24,374 25,097 25,740 26,204 26,709 27,143 27,802 28,508 29,233 2.2%1.0%
BSR Contribution (One-Time)9,670
Total Source of Funds $238,735 $247,421 $251,177 $261,671 $272,065 $282,203 $290,671 $302,477 $313,495 $325,552 $337,689 $351,101
TABLE 4: General Fund Revenue Forecast Year to Year Percentage Change
Revenue & Other Sources
Actual
2022
Adopted
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Sales Taxes -0.4%2.2%5.0%6.1%6.7%4.4%4.3%4.7%4.9%4.9%5.0%
Property Taxes 0.7%6.5%5.7%5.8%5.9%6.0%5.8%5.5%5.7%5.9%6.2%
Transient Occupancy Tax
General Purpose -4.0%70.3%5.7%5.3%3.1%3.8%4.1%4.9%5.0%5.2%5.3%
Infrastructure 19.8%8.6%5.7%5.3%3.1%3.8%4.2%4.9%5.0%5.2%5.2%
Documentary Transfer Tax -39.8%-4.8%2.4%2.4%2.5%2.6%3.6%3.9%3.7%3.6%3.6%
Utility Users Tax -0.1%1.9%6.9%8.2%4.2%-3.5%11.0%3.5%3.4%3.5%3.5%
Other Taxes and Fines 99.7%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%
Subtotal: Taxes -1.7%8.4%5.5%5.8%5.2%4.0%5.6%4.9%5.0%5.2%5.3%
Charges for Services 5.6%10.2%0.9%0.6%0.3%0.3%0.5%0.4%0.5%0.2%0.4%
Permits and Licenses 7.2%17.3%4.1%1.9%0.9%1.6%2.3%2.2%2.3%-1.2%0.9%
Return on Investments -19.6%39.9%2.4%3.0%3.0%3.0%3.8%4.1%4.2%4.2%4.2%
Rental Income 13.8%5.6%5.2%4.2%3.3%2.8%2.8%2.8%2.8%2.8%2.8%
From Other Agencies -18.5%-83.0%-22.1%-73.4%0.0%0.0%0.0%0.0%0.0%0.0%0.0%
Charges to Other Funds -2.1%5.6%2.4%1.2%0.7%2.0%1.8%1.9%1.9%0.4%0.5%
Other Revenue -10.1%17.8%0.9%0.6%0.6%0.6%0.6%0.6%0.6%0.7%0.7%
Total Non-Tax Revenue 2.1%1.2%2.2%0.8%1.2%1.4%1.6%1.6%1.6%0.7%1.1%
Operating Transfers-In -1.2%4.8%3.2%3.0%2.6%1.8%1.9%1.6%2.4%2.5%2.5%
BSR Contribution (One-Time)-100.0%
Total Source of Funds 3.6%1.5%4.2%4.0%3.7%3.0%4.1%3.6%3.8%3.7%4.0%
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TABLE 5: City of Palo Alto Major General Fund Revenues
Expense Assumptions
As part of developing the FY 2024-2033 Forecast expenditure budget, the General Fund
expense categories have been adjusted by removing FY 2023 Adopted Budget one -time
expenses and updating major cost elements such as salary and benefits costs. The table below
displays the expense forecast and when compared to the FY 2023 Adopted Budget, growth of
1.4% is expected in FY 2024. The small overall annual growth is due to the elimination of large
one-time reserves in FY 2023 that offset the increase in expenses in other categories such as
Salary and Benefits and Transfers to Infrastructure.
A summary of expense assumptions are discussed here, extensive information regarding each
expense category can be found in Attachment D.
- Salary and Benefits are projected to increase $11.3 million or 7.6% from the FY 2023
($148.4 million to $159.7 million). This is primarily attributable to increases in salaries
($6.1 million or 7.7%) and pension costs ($4.1 million or 10.5%). A general wage
adjustment of 2.0% is included for all employees starting in either January 2023 or July
2023 for all years of the forecast since no MOA’s would be in effect at that time. A level
of reserve to reach a target market placement for employee compensation in new labor
agreements, as directed by the City Council is also assumed beginning in FY 2023.
- Long Term contributions to pension and other post-employment benefits and capital
investments are being phased through the first three to five years of the forecast:
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o Pension 115 Trust contributions reflect City Council approved discount rate from
6.2% to 5.3% over two years; FY 2023 is a transitio nal year in which six months or
the equivalent of approximately 5.8% is budgeted and the full transition in FY
2024 ($12.2 million ($7.2 million in the General Fund) in supplemental
contributions is assumed in FY 2024).
o California Employers’ Retiree Benefit Trust (CERBT) Fund for Retiree medical
liabilities contributions reflect a 5.75% discount rate (6.25% assumption), and
shortened amortization (from 22 to 15 years). Through FY 2023, it is expected
that $8.0 million in supplemental principal contributions will be made to the
CERBT Trust. The FY 2024 Budget estimates $16.4 million ($10.5 million in the
General Fund) for ADC, an approximate $0.5 million or 2.9% increase from FY
2023 levels of $15.9 million ($9.9 million in the General Fund).
o Capital Infrastructure transfers reflect the goal established as part of the 2022-
2026 Capital Improvement Plan (CIP) to restore the base portion of this transfer
to pre-pandemic levels by FY 2026. As the local economy continues to recover
from the COVID-19 pandemic, estimated transfers from TOT revenues in FY 2024
are currently projected to increase to $10.5 million and the base transfer to
increase to $10.8 million for a total $21.3 million transfer to the Capital
Improvement Fund.
- Inflationary assumptions in this long range reflect the record inflation being seen at
present, in FY 2024 and FY 2025, a 5% annual inflation is assumed, while in the outer
years FY 2026 ongoing it is brought to the historical average of 3%.
- Previously committed investments are included in this forecast including but not limited
to the continuation of the two year restoration of key services as adopted in the FY 2023
Budget. These services are assumed to be ongoing in this forecast in alignment with the
expected voter approval of measure L and affirmation of current revenues to the
General Fund. This LRFF includes the City’s committed investment of $7.0 million in
operating expenses for the partnership with LifeMoves and Project Homekey site
services ($1.0 million annually which started in FY 2023 and is programmed through FY
2029).
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TABLE 6: General Fund Expense Forecast and Year to Year Percentage Change
Expenditures & Other Uses
Actual
2022
Adopted
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CAGR
10 Years
CAGR 5
Years
Salary 71,145 79,732 85,869 90,166 92,806 95,320 97,394 99,341 101,269 103,198 105,127 107,056 3.0%1.3%
Benefits 61,531 68,636 73,780 77,229 79,099 80,111 82,477 86,269 87,134 88,371 87,251 87,425 2.4%1.1%
Subtotal: Salary & Benefits 132,676 148,368 159,649 167,395 171,905 175,431 179,871 185,610 188,403 191,569 192,378 194,481 2.7%1.2%
Contract Services 20,844 24,194 23,921 25,375 25,863 26,555 27,106 27,931 28,461 29,330 29,834 30,688 2.4%1.3%
Supplies & Material 2,508 3,205 3,270 3,426 3,519 3,612 3,705 3,798 3,891 3,984 4,077 4,170 2.7%1.3%
General Expense 3,174 21,765 8,561 8,745 8,835 8,938 9,042 9,161 8,252 8,357 8,463 8,576 -8.9%0.5%
Rents & Leases 453 1,333 1,368 1,405 1,443 1,482 1,522 1,564 1,606 1,649 1,694 1,741 2.7%1.1%
Facilities & Equipment 538 480 450 471 484 497 510 523 536 549 562 575 1.8%1.3%
Allocated Charges 19,647 22,714 24,744 25,741 26,454 27,121 27,860 28,623 29,403 30,227 31,072 31,939 3.5%1.2%
Total Non Sal/Ben Before Transfers 47,164 73,691 62,314 65,163 66,598 68,205 69,746 71,600 72,149 74,097 75,701 77,689 0.5%1.1%
Operating Transfers-Out 5,498 4,962 4,643 4,745 4,854 4,959 5,072 5,188 5,302 5,423 5,547 5,699 1.4%0.9%
Transfer to Infrastructure - Base 4,506 10,673 13,640 16,607 19,575 20,009 20,523 21,053 21,599 22,161 22,740 23,336 8.1%4.2%
Transfer to Infrastructure - TOT 8,118 9,727 10,567 11,173 11,762 12,121 12,583 13,106 13,744 14,435 15,190 15,987 5.1%1.8%
Total Use of Funds 197,963 247,421 250,814 265,083 274,694 280,726 287,794 296,558 301,197 307,685 311,557 317,193 2.5%1.4%
Expenditures & Other Uses
Actual
2022
Adopted
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Salary 12.1%7.7%5.0%2.9%2.7%2.2%2.0%1.9%1.9%1.9%1.8%
Benefits 11.5%7.5%4.7%2.4%1.3%3.0%4.6%1.0%1.4%-1.3%0.2%
Subtotal: Salary & Benefits 11.8%7.6%4.9%2.7%2.1%2.5%3.2%1.5%1.7%0.4%1.1%
Contract Services 16.1%-1.1%6.1%1.9%2.7%2.1%3.0%1.9%3.1%1.7%2.9%
Supplies & Material 27.8%2.0%4.8%2.7%2.6%2.6%2.5%2.4%2.4%2.3%2.3%
General Expense 585.8%-60.7%2.2%1.0%1.2%1.2%1.3%-9.9%1.3%1.3%1.3%
Rents & Leases 194.1%2.7%2.7%2.7%2.7%2.7%2.7%2.7%2.7%2.7%2.8%
Facilities & Equipment -10.7%-6.2%4.7%2.8%2.7%2.6%2.5%2.5%2.4%2.4%2.3%
Allocated Charges 15.6%8.9%4.0%2.8%2.5%2.7%2.7%2.7%2.8%2.8%2.8%
Total Non Sal/Ben Before Transfers 56.2%-15.4%4.6%2.2%2.4%2.3%2.7%0.8%2.7%2.2%2.6%
Operating Transfers-Out -9.7%-6.4%2.2%2.3%2.2%2.3%2.3%2.2%2.3%2.3%2.7%
Transfer to Infrastructure - Base 136.8%27.8%21.8%17.9%2.2%2.6%2.6%2.6%2.6%2.6%2.6%
Transfer to Infrastructure - TOT 19.8%8.6%5.7%5.3%3.1%3.8%4.2%4.9%5.0%5.2%5.2%
Total Use of Funds 25.0%1.4%5.7%3.6%2.2%2.5%3.0%1.6%2.2%1.3%1.8%
Budget Stabilization Reserve
The City's Budget Stabilization Reserve (BSR) serves as the primary General Fund reserve. By
policy, the BSR is maintained in the range of 15 to 20% of General Fund operating expenditures,
with a target of 18.5%. Any reduction to the reserve below 15% requires City Council approval.
At the discretion of the City Manager, any BSR balance above 18.5% may be tran sferred to the
Infrastructure Reserve (IR) in the Capital Improvement Fund, and/or the City's Section 115
Pension Trust Fund, as outlined in the Pension Funding Policy. The BSR is used to fund
unanticipated one-time costs as opposed to ongoing or recurring operating expenditures;
ongoing revenue or expense trends are updated as part of the annual budget process to adjust
ongoing needs. The City's intent is to fund ongoing programs and services with ongoing dollars.
Maintaining the BSR at 18.5% also provides flexibility for the City to deal with unforeseen issues
that may arise. Furthermore, establishing, and following, sound fiscal reserve policies has been
a strong factor in the City being rated AAA by rating agencies.
Based on information reported in the FY 2022 Annual Comprehensive Financial Report (ACFR)
CMR 146322, the City’s current BSR balance is $59.8 million, approximately $14.2 million above
the 18.5% target of $45.6 million for FY 2023. Micro and macro-economic conditions are
adjusting daily, with rising inflation, changes in jobs, and recessionary trends creating significant
uncertainty. As the State of California Legislative Analyst Office (LAO) wrote in their annual
Fiscal Outlooks for California “Economic Conditions Weigh on Revenues, [the] bo oming
2 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/finance-
committee/2022/20221129/20221129pfcsm-linked.pdf
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economy has led to high inflation…efforts to tame inflation are slowing the economy…inflation
pressures remain, raising risk of recession…fiscal outlooks revenues balance competing risks.3”
As shown in the table below, there are recommended adjustmen ts in line with the City
Manager’s authority for transfer of excess BSR, adjusted for a recommendation to reserve
funds to safeguard the stability the City has strived to achieve in the recent year by re -
establishing an economic uncertainty reserve. Staff anticipates returning to Council in February
2023 with the FY 2023 Mid-Year Review and recommendations in alignment with the allocation
below for the appropriation of BSR funds above the 18.5% level. Staff do recommend a transfer
to the Infrastructure Reserve as inflationary costs are impacting capital project needs including
anticipated significant price increases in the Automated Parking Guidance Project, as well as a
need to provide safety improvements to critical assets such as the artificial turf playi ng fields.
These actions will leave the BSR at $45.8 million or $0.2 million above the 18.5% Council
recommended level.
TABLE 7: Budget Stabilization Reserve (BSR) Summary (in millions)
General Fund BSR Balance, June 30, 2022 $72,835
FY 2023 Approved Adjustments to the BSR Balance
FY 2023 Adopted Budget ($9,072)
FY 2023 Services Reinvestment ($3,700)
Downtown Streets Team (CMR 14526) ($167)
Reappropriations (CMR 14728) ($100)
Subtotal: Approved Adjustments to the BSR Balance ($13,039)
Subtotal: BSR Balance, After Approved Adjustments $59,796
Uses of the FY 2022 Surplus
FY 2023 RECOMMENDED Adjustments to the BSR Balance
(to be considered in FY 2023 Mid-Year Budget Review)
Reserve for Economic Uncertainty ($5,000)
Transfer to Section 115 Pension Trust Fund ($5,000)
Transfer to Infrastructure Reserve (IR) in the Capital Improvement
Fund
($4,000)
Subtotal: RECOMMENDED Adjustments to the BSR Balance ($14,000)
Current Projected FY 2022 BSR Level, (June 30, 2023) $45,796
This trend may continue as discussed in the First Quarter (Q1) FY 2023 Financial Report,
scheduled for review by the Finance Committee on December 6, 2022, in which several
categories appear to be exceeding budgeted levels in FY 2023 similar to FY 2022 (CMR 14630).
3 The 2023-24 Budget California’s Fiscal Outlook, California Legislative Analyst’s Office (LAO), November 16, 2022,
https://lao.ca.gov/Publications/Report/4646
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Although revenues have experienced growth in recent periods, the potential for recession
makes it difficult to determine if these trends will continue in the near term. This LRFF assumes
a mild 18-month recession at the beginning of the ten-year period and projects a range of $238
to $244 million in total revenues in FY 2023, reflecting up to $6 million or 2.5% above adopted
budget levels. The higher end of this projection assumes that revenues will continue a similar
positive trend as the summer period. Although staff may complete the 115 Pension Trust Fund
and Infrastructure Reserve transfer, staff recommend waiting until more data is available on
current trends to ensure staff and the Council are making an informed decision on how best to
position the city to ensure stability during these uncertain times. Staff expect that one-time
funding such as these will be critical to continue to mitigate impacts from a recession and
bridge the near term gaps seen in the first few years of this LRFF.
Assumptions NOT Included in Forecast
It should be noted that this forecast does not include several potential impacts to the FY 2024 -
2033 LRFF that are outlined below. These items are known projects or areas of investment that
are a priorities, but have not been fully developed in terms of costs and timelines. This is not
intended to be a comprehensive list nor in any priority order.
Project Homekey: On September 27, 2021 the City Council directed staff to apply for Project
Homekey funding in conjunction with LifeMoves to build an emergency shelter at the former
Los Altos Treatment Plant (LATP) site (CMR 135954). This project will rapidly deploy modular
housing to provide interim housing opportunities for homeless individuals and families in the
City of Palo Alto. The grant was awarded in Summer 2022 and the City is currently in
negotiations with local partners on operational roles to leverage local expertise and ensure high
quality services. This LRFF includes the City’s committed investment of $7.0 million in operating
expenses ($1.0 million annually which started in FY 2023 and is programmed through FY 2029);
however, with the actual timing of the funding still to be determined, and commitments from
other local partners negotiated, City costs for this project could fluctuate throughout the ten
year period.
Sustainability and Climate Action Plan (S/CAP): In early 2020, the City launched an update of the
Sustainability and Climate Action Plan (S/CAP) Framework to determine the goals and key
actions needed to meet its sustainability goals, including the goal of reducing greenhouse gas
(GHG) emissions to 80 percent below 1990 levels by 2030 (the “80x30” goal). As part of the FY
2022 Mid-Year Review (CMR 138015) and the 2023 Adopted Operating Budget6, Council
approved several actions to increase resources to support S/CAP needs. In October 2022 (CMR
4 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council-
agendas-minutes/2021/09-september/20210927/210927accsm-amended-final.pdf
5 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220207/20220207pccsm-revised-final.pdf
6 https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy2023-city-
budget/adopted-fy23/operating-budget_final-4.pdf
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147207), City Council accepted the updated S/CAP Goals and Key Actions and adopted a goal to
make the City carbon neutral by 2030. Staff commenced California Environmental Quality Act
(CEQA) evaluation of the S/CAP upon Council’s acceptance of the proposed S/CAP Goals and
Key Actions. The City is currently in the process of finalizing the Three-Year Work Plan, which
will be brought to Council for review and discussion in December 2022. The final S/CAP Report
will be brought to Council for acceptance in Spring 2023. As the S/CAP Work Plan and final
report are still in development, cost projections are not yet contemplated in the forecast.
Implementation is anticipated to require significant resources, including internal staffing and
consultant expertise.
Service reductions not restored to pre-pandemic levels:
The City made significant service reductions in FY 2021 and FY 2022 Adopted Budgets to align
expenses with losses of nearly $40 million in General Fund tax revenues due to economic
impacts resulting from the COVID-19 pandemic. During this time, many services were reduced
or eliminated across the organization and essential services were prioritized. Ultimately, th e
City’s General Fund workforce was reduced by 83 full-time staffing positions (76.50 FTE) and
107 part-time positions (26.18 FTE). In FY 2022, the City began to see gradual signs of
improvement and a positive economic outlook that supported initial reinve stments in the first
quarter (Q1) FY 2022 financial report (CMR 134398), FY 2022 Mid-Year Budget Review (CMR
138019), and the Staffing for Adequate Fire and Emergency Response (SAFER) grant (CMR
1364310). Further reinvestments were made in the FY 2023 Adopted Budget11 to restore
services that were previously reduced and provide resources to support priority initiatives. In
total, full-time staffing levels have increased by 61.85 FTE, from the pandemic low of 956.00
FTE to 1,017.85 FTE. This level of staffing remains below pre-pandemic levels of 1,034.85 FTE.
As of this LRFF, some services remain below pre-pandemic levels or have new and evolving
changes to meet community needs. These services will continue to be evaluated and proposals
brought forward in future budget processes for City Council consideration.
Significant code and ordinance updates: Updates to several significant programs, codes and
ordinances are expected to be necessary in the near future; some of these updates include:
Seismic Inventory Ordinance and Program Development, Historic Building Survey and
Ordinance Development, and Zoning Code Updates. Depending on future Council direction,
program implementation is anticipated to require significant resources, including internal staff
and outside consultant expertise.
7 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20221003/20221003accsm-amended-presentations.pdf
8 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council-
agendas-minutes/2021/10-october/20211025/20211025pccsm-linked-w-times.pdf
9 https://www.cityofpaloalto.org/files/assets/public/agendas -minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220207/20220207pccsm-revised-final.pdf
10 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2021/11-november/20211101pccs-amended.pdf
11 https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy2023-city-
budget/adopted-fy23/operating-budget_final-4.pdf
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Fee and Organizational Studies: The Planning and Development Services (PDS) Department is in
the process of completing two studies, a fee study and an organizational study on the Fire
Prevention group. The purpose of the fee study is to align fees and revenues based on the
updated department structure to continue to meet Council approved cost recovery levels.
Ahead of the completion of the Department-wide study, an organizational study of the Fire
Prevention program will be completed to inform the fee study. Because the Fire Prevention
Program is currently housed in both the Fire and Planning and Development Services
departments, recommendations may be made to realign the program and resources. The
Library Department is also in the process of completing an organization study to assess staffing,
resource, and service levels with the goal of increasing open hours and providing additional
services to the community. Lastly, a citywide fee study needs to be completed periodically by
an outside consultant to ensure the City’s fees are in line with its cost recovery policies. This
study will be scheduled to be completed by FY 2024 and could update fees and associated
revenue assumptions in future year LRFF reports.
Labor negotiations: As of the timing of this report, all labor agreements are scheduled to expire
on December 31, 2022, with the exception of the Service Employees International Union Hourly
Unit (SEIU-H) agreement, which is extended through June 30, 2023. A general wage adjustment
of 2.0% is included for all years of the forecast since no agreements would be in effect at that
time. This is consistent with prior Council direction in previous long range financial forecasts to
use the 2.0% increase as a forecasting assumption, not as a commitment to future negotiations.
Additionally, this forecast includes a level of reserve to reach a target market placement for
employee compensation in new labor agreements, as directed by the City Council. Staff expects
to adjust these costs throughout the budget development process in accordance with market
studies and final contract terms.
Capital Infrastructure Plan: As referenced earlier, the June 2014 Council approved
Infrastructure Plan of $125.8 million in projects was based on construction and design costs
with data from 2012. As construction costs have increased and the City is required to pay
prevailing wages, the Infrastructure Plan’s funding status has shifted. The FY 2023 Adopted
Capital Budget anticipated that these projects would cost $261.8 million. Staff is working to
maintain these projects within the current budget; however, project costs can fluctuate based
on market conditions at the time of construction award.
Grade Separation: The grade separation project consists of the four at-grade crossings along the
Caltrain corridor in the City of Palo Alto located at Palo Alto Avenue, Churchill Drive, Meadow
Avenue, and Charleston Road. The City is working on conceptual alternative plans for the
selection of the preferred alternative at Churchill Avenue, Meadow Drive, and Charleston
Avenue crossings. In November of 2021, after performing a detailed review of the alternative
plans under consideration, Council selected the Partial Underpass Alternative as the preferred
alternative and designated Closure with Mitigation as a backup alternative for the Churchill
Avenue crossing. Council also directed staff to conduct additional studies and to refine
underpass alternatives by seeking input from stakeholders (Pedestrian and Bicycle Advisory
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Committee, Palo Alto Unified School District, and Stanford University). Such input could further
assist in narrowing down grade separation alternatives. On May 23, 2022 (CMR 1434112), the
City Council authorized an amendment to the consultant contract for performing these
additional tasks
Once preferred alternatives are selected, the next phase will include preparing preliminary
engineering and environmental documents for the three crossings. The Valley Transportation
Authority (VTA) 2016 Measure B Caltrain Grade Separation funding is available to the City for
additional studies and the next phases of the project which include preliminary engineering and
environmental review, right-of-way, design, and construction. In addition to this, on August 10,
2022 (Supplemental Memorandum AA113) the City Council adopted advisory spending
guidelines stating its intention to expend a portion of the revenues from Measure K on the rail
grade separation project.
The 2016 Measure B program tax revenue amounts to a total of $700 million in 2017 dollars for
all at-grade crossings in Santa Clara County, and the City anticipates allocation of 50% of said
funding. The VTA is currently programming these funds in two-year increments. Grade
Separation 2016 Measure B funding requires matching local funds as a result, additional
funding sources will need to be identified to perform this work in upcoming years (FY 2024 – FY
2033). The full funding needed to complete the grade crossings project is unknown at this time;
however, it is expected, that funding necessary to complete this work will exceed funding
currently identified for this project. Therefore, additional resources will need to be explored to
plan and fund these grade separations, including City staff pursuing additional funding throu gh
grant opportunities as they become available.
Parks Master Plan: The Parks Master Plan14 was finalized in 2017; however, when approved it
identified a need to develop a funding strategy and this is still in process. As such, this forecast
does not yet contemplate the necessary investments to fully execute this plan.
Racial Equity Work: The Race & Equity Framework and action plan was approved in June 2020
(CMR 1144115) and remaining funding of $0.5 million has been reappropriated to be available in
FY 2023. Staff is in the process of procuring consultants to assist with the City’s diversity, equity,
and inclusion efforts in engaging staff, the City Council, and Boards/Commissions. After this
initial work, further recommendations are anticipated to be for thcoming and will likely require
additional resources either for more consultant assistance and/or an ongoing in -house Equity
Officer position (discussed during the 2020 Ad Hoc Committee meetings). These
12 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220523/20220523pccsm-revised.pdf
13 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/at-places-
memo/20220810apmccsm.pdf
14 https://www.cityofpaloalto.org/files/assets/public/public-works/palo-alto-parks-master-plan.pdf
15 http://cityofpaloalto.org/civicax/filebank/documents/77273
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recommendations are anticipated to be brought forwar d in FY 2023 or as part of the FY 2024
budget process.
Palo Alto Animal Shelter operations and rebuild
In early 2019, the City entered into a public private partnership with Pets In Need (PIN) to
support the operation of the City’s animal shelter. Part of PIN’s operating proposal included
robust fundraising to rebuild the current shelter into a state-of-the-art animal shelter for the
City, with costs shared between the City and PIN. Since the initial agreement, PIN has indicated
that additional construction projects are required, which will increase capital project costs
significantly. Preliminary estimates are $3.0 to $4.0 million over existing commitments, and no
funding is identified for these costs. The City and PIN both have an interest in continuing t he
partnership and on February 14, 2022 City Council directed staff to proceed with negotiations
to update the service agreement (CMR 1395216).
City owned assets operated by non-profit organizations: This Forecast does not include any
additional capital or operating investments for the Avenidas Senior Center, the Ventura Child
Care Center, nor the Sea Scout Building. As costs around potential capital or operating
investments for these assets solidify, staff will return to City Council to address them as
appropriate. As part of the FY 2023 Adopted Capital Budget17 the City Council established the
Roth Building Rehabilitation Phase 1 capital project (PF -23001) directed a funding strategy for
the Roth Building Rehabilitation Project, which consists of utilizing $5.4 million from a variety of
funding sources including the Stanford University Medical Center (SUMC) Fund; library, parks,
and community center impact fees; grants from Santa Clara County; and donations from the
Palo Alto Museum. This funding strategy is included in the LRFF; however, if costs for
rehabilitating the Roth building increase, additional sources of funding would need to be
identified.
Cubberley Community Center Concept Plan: The City and PAUSD completed a co-design process
for a Cubberley Community Center Concept Plan in 2019; however, costs to implement the
concept plan are not assumed in this LRFF in excess of the dedicated Cubberley infrastructure
funding included in the existing agreement between the PAUSD and the City (discussed in the
Transfer to Infrastructure section of this report). The Concept Plan may require revision before
implementation as operational changes have occurred since its completion including execution
of a new lease between the City and PAUSD for the school district owned portion of Cubberley,
which commenced on July 1, 2020, and reduced the amount of building space leased to the City
(discussed in the General Expense - Cubberley Lease section of this report). On February 14,
2022 the Council directed Staff to pause p reparation of the Cubberley Concept Plan CEQA and
return with a work plan to include: i. exploring a land swap at Fletcher or financial framework
for acquiring available land; and ii. scoping the design process for Cubberley Community Center
16 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220214/20220214pccsm-amended-linked-final.pdf
17 https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy2023-city-
budget/adopted-fy23/capital-budget_final-4-online-version.pdf
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that is City owned once the acreage is determined. Staff is communicating with PAUSD on the
potential to acquire additional land at Cubberley, including acreage amount. This could be
through a land swap, acquisition, or ground lease. Staff is also determining next steps for repair
of Cubberley Gyms A and B, which have been closed since February 2022 due to damage
caused by water line breaks.
Loans for special projects: From time to time the City’s General Fund will assist other City
operations with modest cash flow loan s to bridge fiscal years. For example, the City provided
over $3 million in loans to the Airport Fund as it worked to secure significant grant funding from
the Federal Aviation Administration (FAA) for capital improvement costs. As of FY 2020, the
Airport Fund began paying back the loan to the General Fund. Additions and other initiatives
funded in other funds may need financial support from the General Fund to ensure they are
fully implemented. In FY 2023 the Residential Preferential Parking (RPP) Fund rec eived a one-
time $0.4 million General Fund loan to remain solvent while continuing operations given the
sustained drop in parking demand during the pandemic. Additional loans from the General
Fund are not assumed in this forecast.
Legislative Updates: Various actions at the state and federal level that could impact the City of
Palo Alto have not been incorporated into this forecast due to the changing context and
uncertainty of the quantitative impacts of potential legislative changes. As the potential
impacts of various legislative initiatives are clarified, appropriate adjustments will be identified
and brought forward as part of future budget development cycles.
Tax revenue alignment with updated Comprehensive Plan: The 2030 Comprehensive Plan was
adopted in FY 2018, including the potential fiscal impact of various land use scenarios. The fiscal
impact of this plan and various land use scenarios are not factored into this forecast.
Aging or Noncompliant Infrastructure: The City maintains indoor and outdoor facilities, many of
which have been identified in the City’s ADA transition plan and by the Infrastructure Blue
Ribbon Commission as requiring capital project work to bring them up to full ADA compliance
and/or sufficient conditions. Facilities of concern include Cubberley Community Center,
Foothills Park Restrooms, Lucie Stern Community Theatre restrooms, and Rinconada Pool locker
rooms. Staff continues to program work needed in this area as part of the Americans with
Disabilities Act Compliance capital project (PF-93009); however, the entire scope of work
needed in this area exceeds current resources.
Parks Trash Removal: The City currently does not have weekend trash removal services at most
urban parks. Prior to the COVID-19 pandemic, Rinconada and Mitchell Parks had weekend trash
removal, because those parks had picnic tables that could be reserved by residents. Staff have
noted that garbage cans can become overfilled on the weekends and are looking into how to
fund and operationalize adjustments to mitigate this issue. Possible solutions under
consideration include an increase in collection frequency, enhanced signage, and educational
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materials on waste reduction options such as reusable picnicware. Staff will bring forward
needs for reinvestment in this area in FY 2023 or as part of the FY 2024 budget process.
Permanent Parklet Program: On June 23, 2020 the City Council adopted an emergency
ordinance to temporarily permit businesses to operate outdoors on both public and private
property, referred to as the pilot parklet program (CMR 1143918). On April 19, 2021 the Council
directed staff to develop a permanent parklet program (CMR 1204119). The current pilot
program was extended most recently on October 24, 2022 (CMR 1469220) to extend the
temporary parklet program to June 30, 2023 and allow the other on-street and parking lot
dining and retail programs through December 31, 2023. Staff are developing a permanent
program which will include staffing and maintenance resources funded by new municipal fees
and associated revenues. This program is anticipated to be brought forward for Council
consideration in December 2022 and resources adjusted in FY 2023 or as part of the FY 2024
budget process.
General Liability Umbrella Excess Premiums: The City’s General Liability Program provides
funding to cover various insurance policies for City-owned equipment and machinery. The City
is self-insured for the first $1.0 million in losses per occurrence and participates in a Joint
Powers Authority for coverage up to $55 million per occurrence. These expenses are allocated
to citywide departments. General Liability Umbrella Excess Premiums are anticipated to
increase in future years due to significant national events and natural disasters such as claim
costs for Hurricane Ian. Staff will bring forward adjustments for these costs as part of future
budget cycles as they become available.
Fire Training Center: As part of the FY 2023 Adopted Capital Budget21 the City Council approved
the Fire Training Facility Replacement capital project (FD-24000) to identify an appropriate site
and construct a new fire training facility in Palo Alto. Funding was only appropriated for the
feasibility study portion of the project, and additional resources will need to be appropriated in
future budget cycles based on the results of the study. In addition, the Fire Department is also
evaluating opportunities to partner with other local jurisdictions for training needs, instead of
building a permanent facility in Palo Alto.
FY 2023 Budget Development Guidelines
When the Fiscal Sustainability Workplan (CMR 1026722) was approved by the City Council on
April 22, 2019 drafting a budget development policy was listed as part of the “Newly proposed
18 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2020/id-11439.pdf
19 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2021/id-12041.pdf
20 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20221024/20221024pccsm-amended.pdf
21 https://www.cityofpaloalto.org/files/assets/public/administrative-services/city-budgets/fy2023-city-
budget/adopted-fy23/capital-budget_final-4-online-version.pdf
22 https://www.cityofpaloalto.org/civicax/filebank/documents/70506
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or potential activities proposed to be completed”. The i nclusion of Budget Development
Guidelines in with this forecast represents staff’s recommended method of addressing this
referral. Pairing Budget Development Guidelines with the forecast at the beginning of the
budget process links the anticipated fiscal condition of the organization with the necessary
context regarding service delivery prioritization and resource allocation that will be further
explored through the process. This also ensures that the City is able to proactively address
anticipated changes in its fiscal condition through the budget process.
As discussed earlier in this document, this preliminary forecast represents the initial steps of
the FY 2024 budget development process. Due to the clear overlap of projecting the City’s fiscal
condition and the need to shape service level expectations, staff recommends that the inclusion
of Budget Development Guidelines be incorporated into the discussions at the beginning of an
annual budget process. The FY 2024 Budget Development Guidelines, which are detailed in
Attachment A, are meant to reflect the anticipated fiscal condition of the City and to provide
high-level budgetary direction to the organization. These guidelines will shape and inform the
annual financial planning and the allocation of resour ces across the organization, especially in
the General Fund.
Conclusion
This forecast maintains current service levels approved in FY 2023 and should be used for
planning purposes to assist in gauging effects of major policy interventions against a likely
“status quo” version of the future. The level of uncertainty in this forecast is reduced from
where it was a year ago in terms of impacts from the COVID-19 Pandemic; however, the City is
continuing to manage through current economic uncertainty and evaluating potential impacts
on the local economy. Positive trends in major tax revenue categories that occurred in FY 2022
caused a one-time surplus of $14.2 million that Staff anticipates returning to Council in
February 2023 with the FY 2023 Mid-Year Review and recommendations in alignment with the
allocation for the appropriation of BSR funds above the 18.5% level. This includes transfers to
the Infrastructure Reserve (IR) in the Capital Improvement Fund ($4.0 million) and the City's
Section 115 Pension Trust Fund ($5.0 million), as outlined in the Pension Funding Policy, and a
recommendation to reserve funds to safeguard the stability the City has strived to achieve in
the recent year by re-establishing an economic uncertainty reserve ($5.0 million). Although
revenues have experienced growth in recent periods, the potential for recession makes it
difficult to determine if these trends will continue in the near term.
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The LRFF Base Case assumes a mild 18-month recession at the beginning of the ten-year period
in which revenue growth is anticipated to slow through the end of FY 2024. As a result, the LRFF
projects a surplus of $0.4 million in FY 2024, followed by a $3.4 million gap in FY 2025, and a
$2.6 million gap in FY 2026, with small but increasing surpluses in FY 2027 through FY 2033.
Additionally, this LRFF projects a range of $238 to $244 million in total revenues in FY 2023,
reflecting up to $6 million or 2.5% above adopted budget levels. The higher end of this
projection assumes that revenues will continue a similar positive trend as recent quarters.
However, actual results will vary depending on the timing and magnitude of recessionary
impacts in the near term. If these additional revenues continue to materialize in FY 2023, Staff
anticipates returning to Council as part of the FY 2023 Mid-Year Budget Review to recommend
using this funding to increase the economic uncertainty reserve to help mitigate impacts from a
recession as well as smooth the near-term gaps seen in the first few years of this LRFF.
In addition to the Base Case Forecast, staff modeled an alternate forecast scenarios that are
discussed below. The first alternative reflects a more severe recession compared to the Base
Case and increases the General Fund gap over the next ten years. FY 2024 changes from a
surplus to a gap of $3.5 million, and revenues are not anticipated to be able to fund the annual
expenditures until FY 2029. Staff also modeled an alternate forecast that reflects estimated
funding from Measure K and the impacts on the General Fund over the next ten years. The
surplus in FY 2024 increases to $1.1 million, the gap in FY 2025 reduces to $1.9 million, and FY
2026 changes from a gap to a small surplus. These alternate forecasts were done separately to
show the impacts of each scenario in isolation; however, aspects of both alternate forecasts
may occur in conjunction in the future.
Alternative Scenarios for Consideration
Alternative Forecast Scenario A: Moderate Recession
This alternative forecast models the impact of a moderat e recession that assumes slower
growth of major tax revenues as compared to the base case. In this alternative, the range for
excess revenues in FY 2023 is reduced from an upper estimate of $6 million to $3 million.
Additionally, growth rates in FY 2024 and beyond are slowed, reducing net earnings by
approximately $4 to $6 million in the forecast and extending the timeframe to recover to pre -
pandemic levels by one to three years. The summary table for this alternative forecast and the
Net Operating Margin graph for this alternative forecast are below. Additional discussion for
this alternative follows these figures.
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TABLE 8: FY 2024 – FY 2033 Long Range Financial Forecast
Alternative Forecast A
TABLE 9: FY 2024 –2033 Long Range Financial Forecast Net Operating Margin
Alternative Forecast A
The Base Case projected that by FY 2027, the City would begin to have a positive surplus; this
alternative forecast extends the operating gap to FY 2029. In this alternative, the General Fund
would have a gap of approximately $3.5 million in the first year of the forecast. This gap
increases to a peak of $7.2 million in FY 2025 and begins to taper in the two years following. FY
2029 is the first-year revenues would reach levels sufficient to support expenses.
Alternative Forecast B: Measure K Funding
This alternative forecast assumes the use of approximately 30 percent of revenues generated
from Measure K to offset known eligible expenses that contribute to funding gaps in the base
case. Measure K was presented on the November 8, 2022 ballot to establish a tax on businesses
operating in Palo Alto. This measure levies a tax on businesses based on a monthly rate of 7.5
cents per square foot of occupancy, subject to exclusions, with initial payments due January
2024. For the first two years, the tax would be imposed at half the rate. The tax rate and cap
would be increased by 2.5% annually to account for general inflation, beginning July 2026. The
tax would terminate January 1, 2058, unless extended by voters. The propose d tax is estimated
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to raise approximately $9.6 million each year for 35 years. The City Council has adopted
advisory spending guidelines stating its intention to expend revenues on long-term stable
funding for public safety, affordable housing and homeless services, and grade separated train
crossings that maintain safety and mobility for vehicles, bicyclists, and pedestrians, and to
annually report on tax revenues and expenditures. The summary table for this alternative
forecast and the Net Operating Margin graph for this alternative forecast are below. Additional
discussion for this alternative follows these figures.
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TABLE 10: FY 2024 – FY 2033 Long Range Financial Forecast
Alternative Forecast B
TABLE 11: FY 2024 – 2033 Long Range Financial Forecast Net Operating Margin
Alternative Forecast B
In this alternative, the eligible funds for Measure K are phased-in over three years, in alignment
with the anticipated implementation of the tax. As mentioned above, approximately 30 percent
of the total anticipated receipts are used to offset eligible costs. These additional resources
result in a higher surplus of $1.1 million in FY 2024 as compared to the base case. Additionally,
the gaps in forecast years are significantly reduced or eliminated. In this scenario, the City has a
one-time gap of $1.9 million in FY 2025 followed by continued surplus throughout the forecast.
STAKEHOLDER ENGAGEMENT
The preliminary forecast for FY 2024 represents the beginning of the fiscal year 2024 budget
development process. Information provided in this report will be discussed with the City
Council after Finance Committee and those conversations will provide direction to staff in the
budget development process. It is anticipated that conversations with City Council and the
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community will occur through public budget hearings in Spring 2023, according to the standard
budget adoption process.
RESOURCE IMPACT
Financial implications from this report and input from the Finance Committee will be
considered in the City Manager’s development of the Fiscal Year 2024 budget.
ENVIRONMENTAL IMPACT
This report is not a project for the purposes of the California Environmental Quality Act.
Environmental review is not required.
Attachments:
• Attachment A - FY 2024 Budget Policy Guidelines
• Attachment B - The Economy
• Attachment C - General Fund Base Case Revenue Assumptions
• Attachment D - General Fund Base Case Expense Assumptions
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Attachment A – FY 2024 Budget Development Guidelines
1) Develop a structurally balanced budget that brings ongoing revenues and expenses into
alignment. Develop a plan for any structural imbalance to ensure that the City maintains
fiscal sustainability over the short, medium, and long-term.
2) Allocate one-time resources for one-time needs rather than committing one-time
resources to ongoing services. Examine appropriate uses of revenue surpluses that
exceed forecasted levels such as planning for recession needs, restoration needs, and
strategic investments.
3) Ensure appropriate resource allocation for City Council’s existing priorities.
4) Focus on business process redesign to enhance quality, flexibility, and cost-effectiveness
of service delivery (include examining opportunities to streamline, simplify, reorganize,
and reallocate resources to avoid duplication of effort).
5) Explore alternative service delivery models (such as partnerships with non-profits or
other public/private sector groups) to minimize overlap, maximize cost share, and
effectively use resources.
6) Continue to thoroughly analyze non-personnel/equipment/other costs, such as contract
services, for cost savings opportunities or realignment with current needs.
7) Explore the expansion of existing revenue sources or the addition of new revenue
sources, including the alignment of existing charges for services and the opportunity to
establish new fees, when appropriate.
8) Continue to analyze and prioritize resource augmentations, seeking to offset
augmentations with reductions elsewhere for net-zero impacts to the budget whenever
possible; however, ensuring when resource augmentations are added, it is in alignment
with one-time and ongoing forecasted sources.
9) Continue to prioritize proactively funding long term liabilities including but not limited
to debt obligations, pension obligations, and capital infrastructure in accordance with
City policies as approved by Council.
FY 2024 Budget Development Guidelines
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ATTACHMENT B
The Economy
The economy closed 2021 with GDP growing 6.9% by the end of this calendar year with inflation
increasing, year-over-year by 7%, a level not seen since the early 1980s. As of October 2022, the
consumer price index (CPI) was below 8%. The unemployment rate at the end of 2021 was 3.9%
which was down from 6.4% at the beginning of this year. At the pandemic peak, unemployment
rate was at 14.7% when significant portions of the economy were shut down. The GDP growth in
2022 is expected to be below 3% then drop to low 2% in 2023. The unemployment rate hovers
around the mid 3% but is likely to go up as the economy cools down. The above outlook is
predicated on the federal reserve achieving a “soft landing” whereby there’s a slowdown in
economic growth that avoids recession for the purpose of stopping the economy from
overheating and continue to experience high inflation.
The local economy continues to show strong performance in the latter half of the calendar year
2022 though signs of “headwinds” are growing that are likely to stem economic growth. The UCLA
Anderson Forecast for California paints a generally positive picture for the state as compared to
national economic concerns, citing continued gains in gross domestic product. The outlook
reports that increases in defense spending and the continued demand for tech will likely keep
the economy growing, albeit at a slower pace. The outlook is that the world has become more
unstable so the expectation is that federal defense spending over the next few years will increase.
There have been broad-based hiring with leisure and hospitality, health care and social services,
and technology. However, the “mixed-signals” in economic data and headline news such as
technology sector layoffs are a concerning trend and a potential early indicator of an economic
slowdown. Another concerning trend, which California and the local economy are sensitive to, is
that the world economy seems to be worse than the U.S. With U.S. rising interest rates and global
instability, investors have been putting their money in the U.S. causing the dollar to rise against
other currencies. This causes U.S. exports to be more expensive around the world. The growing
home inventory, higher mortgage rates, and low and diminishing affordability are expected to
negatively impact the national and local housing market though demand for Palo Alto housing
has always been and is expected to remain strong.
According to the US Bureau of Economic Analysis (BEA), the “advance” estimate of the U.S.
economy’s real gross domestic product (GDP) percentage change, from the preceding quarter,
changed in the second and third (calendar) quarters of 2022 by a decline of .06% and an increase
of 2.6%, respectively. Real GDP is an inflation-adjusted measure that reflects the value of all
goods and services produced by an economy in a given year. According to the BEA, in the third
quarter the increase in real GDP reflected increases in exports, consumer spending,
nonresidential fixed investment, federal government spending, and state and local government
spending, that were partly offset by decreases in residential fixed investment and private
inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
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Table 1: National Gross Domestic Product (GDP)
The national Consumer Price Index (CPI), as of the second calendar quarter peaked at 8.6% and is
expected to steadily decline in the coming quarters. In the third quarter, actuals in July, September and
October 2022 were 8.2%, 8.2% and 7.7%. This is slightly better than shown in the Table 2 third quarter
forecast of 8.3% which bodes well for the forecasted declining trend.
Table 2: National Consumer Price Index
The nation’s unemployment rate is 3.7% as of October 2022, compared to a record high of 14.7%
at the height of the pandemic in April 2020. It is expected, by the U.S. Bureau of Labor Statistics,
that the unemployment rate will rise due to the Federal Open Market Committee (FOMC or aka
federal reserve) raising the federal funds (interest) rate in order to bring down the elevated
inflation rate. Per the State of California's Employment Development Department, the state’s
unemployment rate as of September 2022 is 4.1% with the prior year being 7% and the County
of Santa Clara is 2.3%. Nationally, the improved unemployment rates are driven by job gains in
the leisure and hospitality; trade, transportation and utilities; professional and business services;
education and health services; manufacturing, and construction. Hi storically, the Bay Area job
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growth has been led by the Peninsula for the past several years. The unemployment rate for the
San Francisco Peninsula was also in the low 2%.
Table 3: U.S. Unemployment Rate
The high inflation rate has resulted in the continued erosion of purchasing power, however, this has not
substantially deterred the U.S. consumer from spending. Real personal spending climbed 0.3% in
September. This was driven by a 0.6% increase in services spending with goods spending declining by 0.1%,
a tread reflected in the prior few months. As the pandemic restrictions have been removed, the trend
reflects consumers are shifting their activity to services and away from goods. Though there’s net monthly
solid growth, as reflected in the below graph, the year over year shows a slight decline
Table 4: Real Personal Spending Growth
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ATTACHMENT C
General Fund Base Case Revenue Assumptions
Sales Tax
Compared to FY 2019 pre-pandemic actuals of $36.5 million, sales tax revenue declined by $7.4
million, or 20.2%, during the pandemic in FY 2021. The recovery, which began in the last quarter
of FY 2021, resulted in the FY 2022 receipts increasing by $3.6 million or 12.3%. Though this trend
has continued in the first quarter of FY 2023, the rate of recovery is expected to decline. The
general retail, food products (includes restaurants), business to business (includes car leasing),
and transportation (includes auto sales) categories experienced significant increases. This
economic trend also occurred in municipalities in the San Francisco Bay Area and in California.
These significant upward trends were partially offset by construction activity, which has been
declining.
The FY 2023 Adopted Budget for Sales Tax is $32.6 million, a $0.1 million or 0.4% decline over FY
2022 actuals of $32.7 million. In FY 2024, this revenue is anticipated to increase to $33.3 million,
a $0.7 million or 2.2% increase over the FY 2023 Adopted Budget. Revenue in this category is
experiencing growth; however, is not anticipated to reach pre-pandemic levels until FY 2026. The
Base Case assumes 4.3 to 6.7% growth over the length of the forecast.
TABLE 1: City of Palo Alto Sales Tax Revenues through FY 2033
Property Tax
Property tax revenue is the General Fund’s largest revenue source and represents approximately
25% of the total revenues. Historically, the 10-year compound annual growth rate (CAGR) was
8.4% with a low of 3.1% in FY 2012 and a high of 11.5% in FY 2015. During economic downturns,
impacts to property tax occur a year later, however, due to robust residential and commercial
property sales and significant Educational Revenue Augmentation Fund (ERAF) growth, the FY
2022 actual growth was 4.9%. In addition, fiscal years 2019, 2020, 2021, and 2022 included
receipts of $2.7 million, $3.9 million, $5.5 million, and $6.6 million, respectively, for excess ERAF
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distributions from the County of Santa Clara. The FY 2022 budget included $4.9 million for excess
ERAF, however, actual receipts were $6.6 million, or $1.7 million higher which is explained further
below. ERAF is the fund used to collect and disburse property taxes that are shifted to/from cities,
the County, and special districts prior to their reallocation to K-14 school agencies. When the
state shifts more local property tax than required to support schools, these funds are returned
and known as excess ERAF. As a result of the volatility of ERAF, it is not considered a permanent
local revenue source.
In FY 2021, five counties including Santa Clara County, and the State were in a dispute over the
calculation and disbursement of excess ERAF funds. In a claim by the State, calculations for excess
ERAF incorrectly shifted too much property tax from schools to local agencies. The City set
established a reserve for the potential litigation amounts that was later released to the Budget
Stabilization Reserve (BSR) upon reaching a favorable resolution. In November 2021, the County
of Santa Clara notified the cities that the California School Boards Association and its Education
Legal Alliance filed a lawsuit against the Controller of the State of California arguing that the
settlement reached with the counties is unlawful. The County estimates a range between 20 to
30% of Excess ERAF is at-risk. The FY 2023 Budget assumes 25% or $1.5 million for a potential
loss starting in the current year and extending into forecast years. The FY 2022 amount at risk,
$1.7 million, was sent to the City since the lawsuit wasn’t settled in FY 2022; these funds were
recognized as property tax receipts in FY 2022 and are reserved, pending the settlement of the
lawsuit. Staff will continue to monitor the status of this dispute and report on any significant
developments.
Transfer of ownership has been a significant driver of past growth; however, that growth is
expected to moderate in FY 2023 due to the expected economic slowdown and the higher
mortgage rate. For example, the median sales price of single family residential in the fourth (fiscal
year) quarter of FY 2022 declined by 5.3% over the prior quarter.
TABLE 2: City of Palo Alto Property Tax Actuals and Forecast through FY 2033
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The FY 2023 Adopted Budget for Property Tax is $59.8 million, a $0.4 million or 0.7% increase over
the FY 2022 actuals of $59.4 million. In FY 2024, this revenue is anticipated to increase to $63.7
million, a $3.9 million or 6.5% increase over FY 2023 Adopted Budget level.
Transient Occupancy Tax (TOT)
Revenue in this category is impacted by business and other leisure/non-leisure travel and has
experienced significant reductions in FY 2020 and FY 2021 due to public health orders, travel
restrictions, and diminishing business and personal travel plans resulting from the pandemic. TOT
revenue declined by $20.5 million or 79.8%, when comparing the FY 2019 pre-pandemic actuals
of $25.6 million to the pandemic FY 2021. As public health conditions improved and travel
resumed, this revenue began to recover and significantly grew in FY 2022. Though this revenue
remains below pre-pandemic actuals, strong growth was realized in the FY 2021 fourth quarter
and in FY 2022. In FY 2022, actual receipts were $16.9 million, an increase of $11.8 million, or
227.2% higher. The opening of the two Marriott hotels in mid and late FY 2021 and the re-opening
of multiple hotels in FY 2021 and FY 2022 were positive developments that help drive recovery
for this tax revenue.
The FY 2023 Adopted Budget for TOT adopted is $18.2 million, a $1.3 million or 7.4% increase
over FY 2022 actuals of $16.9 million. In FY 2024, this revenue is anticipated to increase to $25.0
million, a $6.8 million or 37.3% increase over the FY 2023 Adopted Budget. Year-to-date (as of
August 2022), daily average room rates increased by 61.2% from $155.73 per day to $251.04 per
day while occupancy rate increased by 24.4% from 60.2% to 75%. Revenue in this category is
experiencing growth; however, is not anticipated to reach pre-pandemic levels until FY 2026.
TABLE 3: City of Palo Alto Transient Occupancy Tax Actuals and Forecast through FY 2033
Note: January 2015, TOT Rate went from 12% to 14%
April 2019, TOT Rate went from 14% to 15.5%
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Utility User’s Tax (UUT)
The UUT is levied on electric, gas, and water consumption, as well as on telephone usage.
Revenue in this category is impacted by consumption levels and has experienced reductions in
prior periods due to water conservation programs and reduced workforces and business closures
due to the pandemic. This revenue is expected to recover as the local economy recovers and
workers partially return to the office. The FY 2023 Adopted Budget for UUT is $15.6 million,
consistent with FY 2022 actuals. In FY 2024, this revenue is anticipated to increase to $15.9
million, a $0.3 million or 1.9% increase over the FY 2023 Adopted Budget. Revenue in this
category is experiencing growth; however, is not anticipated to reach pre-pandemic levels until
FY 2025.
TABLE 4: City of Palo Alto Utility Users Tax Actuals and Forecast through FY 2033
Documentary Transfer Tax (DTT)
Revenue in this category is highly volatile and dependent on sales volume and the mix of
commercial and residential sales. DTT experienced record receipts in FY 2021 and FY 2022 at
$10.6 million and $12 million, respectively. In both years, these milestones were a result of large
commercial transactions, six in FY 2021 and nine in FY 2022, and robust residential sales. Revenue
from July through October in FY 2022 is running 37.9% below the same period in FY 2021 which
is expected, however, this is around 25% below the average normal year’s receipt. The FY 2023
Adopted Budget for DTT is $7.2 million, $4.8 million or 39.8% lower than FY 2022 actuals of $12
million. In FY 2024, this revenue is anticipated to decrease to $6.9 million, a $0.3 million or 4.8%
decrease from FY 2023 levels.
As in past years, this revenue source is challenging to forecast and can fluctuate month to month
depending on real estate transactions. The number of transactions through September 2022
(136) are running lower than those through September 2021 (215) with the total value of these
transactions decreasing by 37%. Though the Palo Alto housing market remains strong, as
discussed in the Property Taxes section, single family residential median sales price in Palo Alto
has slightly declined, which is an expected occurrence as the predicated economic downturn and
higher mortgage rate will impact property sales activity in FY 2023.
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TABLE 5: City of Palo Alto Documentary Transfer Tax Actuals and Forecast through FY 2033
Rental Income
Rental Income of $16.4 million in FY 2024 primarily reflects rent paid to the General Fund from
the City’s Enterprise Funds and the Cubberley Community Center. There is a slight increase in
rental income of $0.8 million compared to the FY 2023 Adopted Budget. The increase can be
attributed to a review of the changes in the California Consumer Price Index (CCPI) in the San
Francisco Bay Area from the August-to-August period, and it is expected that revenues will be
reviewed and revised subsequent to this forecast based on updated information, typically the
December-to-December change in the CCPI.
The City is no longer receiving rental income from the former Los Altos Treatment Plant (LATP)
site. The site is no longer available for traditional rental as a laydown yard, although the
contractors of the planned projects may need to use portions of the site for this use. The site is
planned for two uses: 1) an interim housing project with Project Homekey to provide
opportunities for homeless individuals and families, and 2) a joint water purification project with
the Santa Clara Valley Water District. Please see the Expense Assumptions General Expenses
section of this report for additional information regarding Project Homekey developments at the
former LATP site. The water purification project is being funded in the Wastewater Treatment
Fund, so it is not part of the General Fund LRFF; however, funding needs for the project will be
discussed in the development of the FY 2024 budget for the Wastewater Treatment Fund.
Charges for Services and Permits and Licenses
Revenues in the ‘Charges for Services’ and the ‘Permits and Licenses’ categories are anticipated
to be $33.4 million and $11.5 million, respectively, in FY 2024. Together, these amounts total
$44.8 million and are approximately $4.8 million higher than the FY 2023 Adopted Budget of
$40.0 million. Increases in this category are primarily due to revenue adjustments for the
agreement with Stanford to provide Fire and Dispatch services, the elimination of the
Economically Sensitive Department Revenue Reserve, and adjustments to development center
revenues.
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Revenues in these categories were impacted by changes in FY 2024, such as increasing golf
revenue estimates in alignment with the last two fiscal years of operation. These budget
categories also include revenues associated with two fee-based programs in the Fire Department:
a first responder fee (assessed on commercial insurance companies), to cover the cost for initial
response for first due engine; and an ambulance subscription fee (FireMed program), to secure
co-pay free ambulance transport. These fees were implemented in 2022 with revenue expected
to continue growing as advertising campaigns develop.
Additionally, revenues in these categories were impacted by a phase-out of the Economically
Sensitive Department Revenue Reserve. This reserve was established to mitigate unexpected
losses from services impacted by the COVID-19 pandemic, such as the suspension of parking
enforcement, delays in opening the Junior Museum and Zoo, and limited operations at
community centers, recreational facilities, and the Children's Theatre. In total, $2.5 million was
set aside for this purpose in the prior year. This forecast assumes gradual overall improvements
in the return of canceled or modified services by phasing out this reserve in its entirety in FY
2024.
The revenue estimates in these categories are based on current activity levels. These revenue
sources are primarily driven by the cost of staff to provide services to the community. Therefore,
as part of the FY 2024 Municipal Fee process, staff will evaluate and bring forward
recommendations to align fees with target cost recovery levels, and general salary and benefits
and CPI trends. One exception to this is for Development Services activities and related revenue.
Development Services fees are fully cost-recoverable, and the department has been modeled as
cost-neutral in this forecast. staff will analyze municipal fee revenue activity as part of the FY
2024 Budget development process and bring forward adjustments as appropriate.
Charges for Service - Stanford Fire and Dispatch Services: The City and Stanford have two separate
agreements for the provision of fire response and emergency dispatch services. The fire response
services agreement became effective in July 2018 and outlines service level terms and a new cost
allocation methodology as the baseline for agreement costs. The term extends through June
2023, with renewals through 2028 unless otherwise terminated. The agreement included a new
staffing deployment model for suppression and medical services, which was approved by the City
Council in October 2017 and deployed in January 2018. This forecast aligns with the new staffing
model and, in accordance with the agreement, adjustments to revenue from Stanford have been
aligned with the year-over-year changes to the operating expenses in the Fire Department for FY
2023. Similarly, changes to the revenue received for dispatching services have been aligned with
the FY 2023 adjustments to the operating expenses in the Technical Services Division of the Police
Department where the costs to provide these services are budgeted. For fire and police revenue,
additional adjustments may be applicable if new labor agreements are negotiated. Revenues for
these services are based on anticipated changes in salary and benefits costs within the Fire
Department and Police Department Dispatch Unit.
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Charges to Other Funds
The main source of revenues in this category is General Fund administrative cost allocation plan
charges to the Enterprise and Internal Service Funds. Internal support departments such as
Administrative Services, Human Resources, and Council Appointed Offices provide services to
Enterprise and Internal Service Funds. The costs for these services are recovered through the
administrative cost allocation plan charges. The FY 2024 estimate for Charges to Other Funds of
$14.5 million reflects a slight increase of 5.6% from the FY 2023 Adopted amount of $13.7 million;
this is primarily attributed to fully adjusting the costs associated with the allocated charges in the
Internal Support Departments to the adjustments made as part of the FY 2023 Budget as well as
a technical adjustment to better align the cost plan methodology with the system calculations.
Return on Investment
The return-on-investment category reflects the interest earnings on the City’s investment
portfolio. This category is a combination of past investments, new investments at current market
rates, and available investable cash which fluctuates seasonally and annually. As of the timing of
this LRFF, the Federal Open Market Committee (FOMC) has raised the federal funds rate six times
totaling 3.75% and may increase this rate further to bring down the inflation rate between 2 to
3%. As a result, an increase in interest earnings is forecasted; earnings on new portfolio
investments have increased from 0.5 to 2% to 4.5 to 6%.
The average portfolio rate of return for the first quarter of FY 2023 was 1.66%, and a 1.62%
average yield as of the fourth quarter of FY 2022. The adopted budget General Fund FY 2023
interest earning is $1.1 million. Though this is below the FY 2022 actual of $1.3 million, the
expectation is the actuals in FY 2023 will be higher. In FY 2024, the forecast reflects a relatively
high interest rate environment with increased interest earnings through the ten-year period.
TABLE 6: Palo Alto Historical Investment Portfolio Yields and Citywide Interest Earnings
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Operating Transfers-in
Operating Transfers-in materialize as expenses in other funds throughout the City and as a
revenue in the General Fund. This budget category includes repayment of a previous loan from
the General Fund to the Airport Fund, funding for police patrol in the downtown area, and the
equity transfer from the Electric and Gas funds. Overall, the Operating Transfers-in are estimated
to be $23.6 million, a $1.1 million increase from the FY 2023 level of $22.5 million due to a $0.5
million increase from the Electric Fund and a $0.6 million increase from the Gas Fund.
In accordance with the methodology approved by the City Council in June 2009, the electric to
general fund equity transfer has been calculated by applying a rate of return on the capital asset
base of the Electric Fund. This rate of return is based on PG&E's rate of return on equity as
approved by the California Public Utilities Commission (CPUC). This LRFF also assumed the
passage of Measure L on the November 2022 ballot to seek voter approval of the City’s gas to
general fund equity transfer going forward. As outlined in the ballot measure language, Staff
calculated the gas to general fund equity transfer as 18% of annual gross gas retail revenue.
This LRFF also considers the trial court’s decision in Green v. City of Palo Alto (Santa Clara Superior
Court Case No. 16CV300760), a class action lawsuit which challenged the City’s gas and electric
rates under Proposition 26, one of many such cases following a 2015 decision involving the City
of Redding. In Green, the trial court judge found the City’s electric rates valid, but held that the
City’s gas rates were taxes requiring voter approval under California’s Proposition 26, because
they were set at a level sufficient to fund an annual transfer to the City’s general fund. On June
24, 2021, the trial court entered judgment partially against the City and ordered the City to pay
$12.6 million to a common fund to refund gas ratepayers and for payment of incurred litigation
costs.
The City and the plaintiffs appealed the trial court’s judgment. Payment of refunds due to gas
ratepayers under the trial court judgment are stayed pending a decision by the Court of Appeal
(expected in 2023) on the parties’ respective appeals. While the ultimate outcome of the claim
is uncertain, the City set aside funding in the General Fund for the potential financial impacts.
Specifically, the City recorded a claim payable of $17.5 million, which includes the trial court
judgment covering claims for 2015-2019, plus an amount covering refunds for 3 additional years
of plaintiff’s claims that were tolled (paused) during active litigation. While the process for
calculating the equity transfer from the Electric and Gas Funds has not changed, the City has
placed the funds in a Litigation Reserve. This action continues the City’s proactive actions to
address known liabilities with the best information available at the time and sets these funds
aside pending final resolution of this dispute.
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ATTACHMENT D
General Fund Base Case Expense Assumptions
Salary and Benefits
The table above depicts the estimated General Fund salaries and benefits costs. Consistent with
prior years, the FY 2024 salaries and benefits costs represent approximately 60% of the General
Fund budget expenditures.
Salary and Benefits are projected to increase $11.3 million or 7.6% from the prior year, from
$148.4 million to $159.7 million. Discussed in the following sections, this is primarily attributable
to increases in salaries ($6.1 million or 7.7%) and pension costs ($4.1 million or 10.5%).
Salary
Consistent with the City’s salary budget methodology for recent budgets, positions are budgeted
at the actual rate of pay of employees including benefit selections as of Fall 2022. Then, by
position, salary costs are updated in accordance with applicable Memorandum of Agreements
(MOA’s) between the City and its labor groups and the Management and Professional Personnel
and Council Appointees Compensation Plan(s). It is important to note that as of this forecast, all
bargaining groups are near the end of their agreement terms and the City is actively engaged in
negotiations with the various labor groups. The forecast assumes step increases for employees
in applicable positions, including SEIU, IAFF, and PAPOA, and merit increases for Management
and Professional employees including UMPAPA. A general wage adjustment of 2.0% is included
for all employees starting in either January 2023 or July 2023 for all years of the forecast since no
MOA’s would be in effect at that time. This is consistent with prior Council direction in previous
long range financial forecasts to use the 2.0% increase as a forecasting assumption, not as a
commitment to future negotiations. Additionally, this forecast includes a level of reserve to reach
a target market placement for employee compensation in new labor agreements, as directed by
the City Council. Staff expects to adjust these costs throughout the budget development process
in accordance with final contract terms.
Benefits
Pension: Pensions are budgeted based on CalPERS determined rates as of the June 30, 2021
valuation (CMR 146281) for the City’s Miscellaneous and Safety plans. CalPERS determines the
City’s total contributions for a given Fiscal Year as the sum of two factors: Normal Cost (NC) and
Unfunded Accrued Liability (UAL). Together the NC and the UAL expressed as a percentage of
payroll is the ‘blended rate’ and is used to represent total costs in the discussion below.
The Normal Cost (NC) is expressed as a percentage of payroll and is paid as part of the payroll
reporting process of active employees. Commonly referred to as the ‘pay-go’ cost, the NC is
variable and increases or decreases directly with the salary levels of the City. It represents the
1 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20220920/20220920pfcs.pdf
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necessary funding for the City to pay for employees presuming that CalPERS meets the current
set of assumptions.
In a year that CalPERS does not meet assumptions, due to plan changes, assumption changes,
method changes, or plan experience (including investment gains/losses), there is an increase or
decrease to the Unfunded Accrued Liability (UAL). Commonly referred to as the ‘catch-up’ cost,
the UAL is expressed as a dollar amount and is calculated over an amortized period with defined
annual payments, similar to a mortgage. The contributions for UAL are billed as a flat dollar
amount as opposed to a percentage of payroll due to potential funding issues that could arise
from a declining payroll or number of active members in the plan. However, CalPERS provides an
estimated percentage of payroll for UAL to allow a consistent comparison of total costs.
In the miscellaneous plan, total costs are projected to increase from the current 42.9 percent in
FY 2023 to the 44.8% in FY 2024. In the safety plan, total costs are projected to increase from the
current 71.1% in FY 2023 to 74.0% in FY 2024. These rates do not consider the employee pick-up
of the employer share; that pick-up materializes as savings in the City’s pension costs. Consistent
with applicable MOAs, the FY 2023 forecast presumes that the miscellaneous plan will pick up 1
to 2% of the employer pension cost and that safety plan members will pick up 3 to 4%.
The FY 2024 budget was impacted by significant favorable investment returns of 21.3% (6.8%
assumption) earned in the most recent June 30, 2021 valuation and changes to economic and
demographic assumptions resulting from the CalPERS Asset Liability Management (ALM) process
and Experience Study completed in November 2021. As part of the ALM, the CalPERS board
approved a reduction to the discount rate (from 7.0 to 6.8%), revised actuarial assumptions (price
inflation from 2.5 to 2.3%), and a new asset allocation targeting 1/3 investment in private assets,
5% leverage, and reduced public equity exposure.
Since the issuance of the current valuation, CalPERS announced a preliminary investment loss of
6.1% for the period ending June 30, 2022. These results will be included in the CalPERS valuation
report issued in Fall 2023 to inform the development of the FY 2025 budget. The resulting liability
of the investment loss will be amortized over 20 years with a 5-year ramp-up period. To inform
this LRFF, staff used the CalPERS Pension Outlook Tool to calculate the estimated impacts,
resulting in additional costs of $3.4 million ($2.6 million in the General Fund) in FY 2025, and
increasing to $16.8 million ($12.9 million in the General Fund) at the peak of the 5-year ramp in
FY 2029.
TABLE 1: CalPERS’ Projected FY 2023-2033 Blended Retirement Rates
(percentage of payroll)
FY
2023
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
Miscellaneous 42.9 44.8 43.6 38.9 32.9 30.9 30.7 30.3 30.1 26.7 25.4
Safety 71.1 74.0 72.3 69.5 66.8 63.6 63.2 61.9 61.4 57.9 55.8
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The City has taken several proactive steps to address rising pension costs and long-term liabilities,
including cost-sharing in labor agreements, establishing an irrevocable Section 115 Pension Trust
(“Pension Trust”) (CMR 7553 2), and adopting a Pension Funding Policy (CMR 11722 3). As part of
policy goals, the City seeks to reach a 90% funded status by FY 2036. This policy is subject to
modification at City Council discretion and requires that staff report the status of the funding
goal every three years. Consistent with the Pension Policy, staff continues to include the NC of
pension at a more conservative discount rate than CalPERS in budget assumptions and transmits
amounts above required payments (“supplemental contributions”) to the Pension Trust.
Beginning in FY 2023, the City Council approved to reduce the discount rate for supplemental
contributions from the previously approved rate of 6.2% to 5.3% over two years; FY 2023 is a
transitional year in which six months or the equivalent of approximately 5.8% is budgeted.
Additional one-time contributions continue to be made each year if excess revenues or unspent
savings are available, subject to City Council approval.
In accordance with Pension Policy reporting requirements, staff is engaged in a series of meetings
with the Finance Committee in Fall 2022 to review the status of the City’s pension and retiree
healthcare plans, and Pension Policy. Staff expects as part of this review to memorialize any
practices adjusted since the adoption of this policy, review progress towards policy goals, and
recommend potential modifications to the Pension Policy or budgetary practices used to inform
the financial planning of these benefits. This series of reports includes: 1) Review of the most
current actuarial analysis as distributed by CalPERS (CMR 14628 4), 2) Review of the current status
of both the Pension and Other Post-Employment Benefits (OPEB)/retiree healthcare liabilities
including the proactive contributions and discussion with plan providers (CMR 14829 5), and 3)
Review of actuarial analysis based on alternative assumptions as defined in the Pension Funding
Policy and recommended revisions to the Pension Funding Policy for City Council consideration
and adoption (tentatively scheduled December 6, 2022).
In this forecast, approximately $12.2 million ($7.2 million in the General Fund) in supplemental
contributions is assumed in FY 2024. This reflects a $4.0 million ($2.7 million in the General Fund)
increase over the prior year, primarily due to the transition to a lower discount rate. Through FY
2023, a total of $49.4 million (31.8 million in the General Fund) in principal contributions are
expected to be made to the Pension Trust.
In the General Fund, it is anticipated the City will spend a total of $43.1 million on total pension
costs in FY 2024, including both CalPERS contributions and supplemental Pension Trust Fund
contributions. This is approximately $4.1 million higher than the prior year costs of $39.0 million,
or a 10.5% increase. These expenses represent approximately 17% of the General Fund’s total
expenses.
2 http://cityofpaloalto.org/civicax/filebank/documents/55487
3 http://cityofpaloalto.org/civicax/filebank/documents/79256
4 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20220920/20220920pfcs.pdf
5 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20221018/20221018pfcs.pdf
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Healthcare: Consistent with the most recent labor agreements between the City and its
bargaining units in the General Fund, the City’s contribution amounts towards medical costs for
employees are based on a flat rate contribution from the City, with the employee contributing
towards the remaining medical plan premium. Like salaries, healthcare costs are updated in
accordance with applicable Memorandum of Agreements (MOA) between the City and its labor
groups and the Management and Professional Personnel and Council Appointees Compensation
Plan(s).
Retiree Healthcare/Other Post-Employment Benefits (OPEB): Retiree Medical is based on the June
30, 2021 actuarial study prepared by Bartel Associates, which is completed every two years. The
most recent study was completed in June 2022 to inform the development of the FY 2023 and FY
2024 operating budgets (CMR 14112 as amended by CMR 145026). Consistent with City Council
direction, this forecast continues the practice to budget for the full payment of the Actuarial
Determined Contribution (ADC) for retiree healthcare, using a more conservative discount rate
to transmit amounts above the recommended payment as an additional discretionary payment
(“prefunding”) to the California Employers’ Retiree Benefit Trust (CERBT) Fund.
The results of the recent valuation benefited from significant favorable investment returns of
27.5% (6.25% assumption) and lower than anticipated healthcare premiums. The City Council
further adjusted funding to continue alignment with the proactive pension funding assumptions
as well as known variable such as June 30, 2022 market returns. Budgetary assumptions in LRFF
include a zero percent return in 2021-22 (one-time), a 5.75% discount rate (6.25% assumption),
and shortened amortization (from 22 to 15 years). Through FY 2023, it is expected that $8.0
million in supplemental principal contributions will be made to the CERBT Trust.
CalPERS blends active employees with pre-Medicare retirees and charges the same medical
premium, even though younger employees on average consume less healthcare. The higher
premium to younger employees thereby subsidizes older employees and retirees who, on
average, have higher claims and premiums. The FY 2024 Budget estimates $16.4 million ($10.5
million in the General Fund) for ADC, an approximate $0.5 million or 2.9% increase from FY 2023
levels of $15.9 million ($9.9 million in the General Fund). The implied subsidy is $3.1 million in FY
2024 and effectively lowers the funding necessary to meet the ADC.
TABLE 2: Retiree Medical General Fund Contributions
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033
$10.2 $10.5 $10.9 $11.2 $11.5 $11.9 $12.3 $12.7 $13.1 $13.5
Workers’ Compensation: The budget appropriation for workers' compensation includes an
estimate for claims incurred and reserves for current filings at an 85% confidence level, based on
actuarial studies completed by Bickmore. In FY 2022, claims expenditures decreased slightly by
$39,000 or 0.6% from $6.07 million to $6.04 million from the prior year. Actuarial estimates
6 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20220607/20220607pfcsm-final.pdf
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completed in August 2021 informed FY 2023 budget levels of $6.5 million (approximately 65% in
the General Fund). More recent actuary estimates completed in August 2022 project higher than
expected levels for FY 2023 at $6.9 million. Staff will continue to monitor expenditures in the
fund and bring forward adjustments as necessary. Estimates for FY 2024 are $7.3 million,
representing a $0.8 million or 12.9% increase over the Adopted FY 2023 Budget. Estimates for
workers' compensation increase in the forecast at rates consistent with general CPI increases.
Contract Services
This forecast assumes contract services of $23.9 million in FY 2024, a 1.1% decrease from the FY
2023 Adopted budget of $24.2 million. This decrease is driven primarily by the removal of one-
time costs adopted in FY 2023 including funding to address continued COVID-19 recovery efforts
across the City. These decreases are partially offset by service contract increases as well as a 5.0%
CPI cost increase in FY 2024 based on a review of the changes in the California Consumer Price
Index (CCPI) in the San Francisco Bay Area from the August-to-August period. It is expected that
the estimated CPI increases will be substituted with department base budget requests to adjust
contract funding needs as part of the FY 2024 budget process.
Contract Services - Committed Additions
The Committed Additions included in this forecast account for anticipated operating and
maintenance (O&M) costs in the General Fund for capital projects anticipated to come online
within the ten-year forecast period. A preliminary total estimate of $0.3 million for costs
associated with the following projects anticipated to come online in FY 2024: Boulware Park
Improvements (PE-17500), Dog Park Installation (PG-18001), Library Automated Materials
Handling (LB-21000), Park Restroom Installation (PG-19000), Public Safety Building (PE-15001),
and Rinconada Park Improvements (PE-08001). The Public Safety Building is anticipated to be
complete in Fall 2023, so the full O&M cost for the facility is anticipated to be realized in FY 2025.
Additional cost increases are included throughout the ten-year forecast based on a review of the
changes in the California Consumer Price Index (CCPI) in the San Francisco Bay Area from the
August-to-August period. Timing and analysis of the funding needs for these projects will be
evaluated as part of the FY 2024 Budget process. Also, estimated operating impacts from the Fire
Station 4 (PE-18004) project are included starting in FY 2026.
TABLE 3: FY 2024 – FY 2033 Committed Additions (Millions)
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033
$0.3 $0.6 $0.6 $0.6 $0.7 $0.7 $0.7 $0.7 $0.8 $0.8
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Supplies and Materials
The FY 2023 Adopted Budget for the General Fund included $3.2 million for Supplies and
Materials, which is anticipated to increase by a 5.0% CPI cost increase in FY 2024 to $3.3 million
based on a review of the changes in the California Consumer Price Index (CCPI) in the San
Francisco Bay Area from the August-to-August period. It is expected that the estimated CPI
increases will be substituted with department base budget requests to adjust funding for supplies
and materials as part of the FY 2024 budget process.
General Expense
This category includes costs for travel and meetings, telephone and non-city utilities, contingency
accounts and reserves, bank card service charges, and subsidies and grants provided through the
Human Services Resource Allocation Program (HSRAP). The FY 2023 Adopted Budget of $21.8
million is expected to decrease to $8.6 million in FY 2024, primarily due to phasing out the Utility
Ligation reserve and elimination of the one-time Budget Uncertainty Reserve. Please see the
Revenue Assumptions Operating Transfers-In section of this report for further information about
the Utility Transfer Litigation reserve. The reduction is partially offset by a CPI cost increase based
on a review of the changes in the California Consumer Price Index (CCPI) in the San Francisco Bay
Area from the August-to-August period. It is expected that the estimated CPI increases will be
substituted with department base budget requests to adjust funding for general expense items
as part of the FY 2024 budget process.
General Expense – Project Homekey: On September 27, 2021 the City Council directed staff to
apply for Project Homekey funding in conjunction with LifeMoves to build an emergency shelter
at the former Los Altos Treatment Plant (LATP) site (CMR 13595 7). This project will rapidly deploy
modular housing to provide interim housing opportunities for homeless individuals and families
in the City of Palo Alto. Project Homekey is a program, funded by the State of California
Department of Housing and Community Development, intended to provide grant funding and
facilitate a partnership with the State to quickly acquire, rehabilitate, or master lease a variety of
housing types. Once developed, these projects provide interim or permanent housing options for
persons experiencing homelessness and who are also at risk of health concerns. The site would
be operated for at least fifteen years as interim housing per the program’s durational
requirement. This project would utilize a combination of funding sources including the Project
Homekey Program for capital expenses and donations, grant funds, and City support for ongoing
operations expenses. This LRFF includes the City’s committed investment of $7.0 million in
operating expenses ($1.0 million annually FY 2023 through FY 2029), with actual timing of the
funding still to be determined. Some operating funding support is expected from Project
Homekey as well as the County of Santa Clara. Any remaining gaps in funding will need to be
closed by fundraising, operating cost containment strategies, and/or grant funds.
General Expense - Cubberley Lease: In FY 2015, the City and Palo Alto Unified School District
(PAUSD) agreed to a five–year extension of the Cubberley lease from January 2015 to December
7 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2021/09-september/20210927/210927accsm-amended-final.pdf
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2019. In October 2019, the City Council directed staff to negotiate with PAUSD to extend the
lease agreement an additional five years, through December 2024 (CMR 107308). A new
Cubberley lease was approved by the City Council in June 2020 (CMR 11460 9) for a smaller
portion of the Cubberley site with a correspondingly lower base rent payment (CMR 11386 10). As
part of the original lease agreement, the City Council approved creation of the Cubberley
Infrastructure Improvements Fund. The new lease continues the $1.9 million transfer to the
Cubberley Property Infrastructure Fund, which is classified as an Operating Transfer-Out and
discussed in further detail in that section of this report below. With the Cubberley Infrastructure
funds set aside, the annual base rent for the Cubberley premises is $2.7 million. Other pending
factors at the Cubberley site that are part of ongoing discussions, but not included in the LRFF
estimates are returning the S Building to PAUSD and the Community Services Department is still
interested in negotiating with PAUSD to expand the Cubberley premises by renting additional
space from the M Building. Separately, the City leases extended child daycare sites from PAUSD
on a one-year lease from July 2022 to June 2023. The combined annual rent for the child daycare
sites plus utilities amounts to $0.8 million.
Rents and Leases
The Rents and Leases expense category for FY 2024 is estimated to increase from the FY 2023
Adopted Budget level by approximately 2.7% to $1.4 million, This is based on current lease terms
that include previously negotiated lease increases or CPI cost increases based on a review of the
changes in the California Consumer Price Index (CCPI) in the San Francisco Bay Area from the
August-to-August period. This current estimate will be updated when the December-to-
December CPI information is available. This category includes the lease agreement for
Development Services staff at locations outside City Hall (285 Hamilton and 526 Bryant) as well
as lease with Stanford for El Camino Park. A new lease agreement was executed in December
2020 for the Development Services office location at 526 Bryant Street, limiting the space to the
basement level (CMR 11426 11). The lease was amended in September 2022 to extend the term
initially for 12 months with the right to automatically extend for four successive 12-month
periods, potentially through January 31, 2028 (CMR 14713). In June 2021, the City entered into a
seventh amendment for the Development Services office lease at 285 Hamilton Avenue to extend
the term from February 2022 to January 2025 (CMR 1233412). As expenses for rent for
Development Services are adjusted, a corresponding revenue adjustment will be made to ensure
Development Services maintains cost recovery levels.
Facilities and Equipment
The Facilities and Equipment expense category is expected to decrease from the FY 2023 Adopted
level of $480,000 to $450,000 due to the elimination of funding for one-time equipment
8 https://www.cityofpaloalto.org/civicax/filebank/documents/73558
9 http://cityofpaloalto.org/civicax/filebank/documents/77365
10 http://cityofpaloalto.org/civicax/filebank/documents/77073
11 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2020-2/id-11426.pdf?t=59979.32
12 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/2021/id-12334.pdf
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purchases in FY 2023 such as electric leaf blowers and medical gurneys. Along with funding for
various equipment across departments, this budget category includes subscription payments for
equipment like public safety radios. The reduction is partially offset by a CPI cost increase based
on a review of the changes in the California Consumer Price Index (CCPI) in the San Francisco Bay
Area from the August-to-August period. It is expected that the estimated CPI increases will be
substituted with department base budget requests to adjust funding for equipment needs as part
of the FY 2024 budget process.
Allocated Charges
Allocated Charges represent expense allocations by the City’s Enterprise and Internal Service
Funds for services and products they provide to General Fund departments. The FY 2023 Adopted
Budget for the General Fund included $22.7 million for these expenses, including utilities usage,
general liability insurance, technology costs, vehicle equipment maintenance and replacement
costs, and other charges for services provided by other City departments and funds. The FY 2024
allocated charges in the Forecast update the revenues and expenses for these various allocations
based on the information available at the time of the Forecast development. FY 2024 is
anticipated to experience an increase of 8.9% to a total of $24.7 million. This increase is primarily
due to anticipated higher costs associated with technology services and utilities for City facilities
such as water, electricity, and gas.
Operating Transfers Out
Operating Transfers Out include transfers from the General Fund to Debt Service Funds, the
Technology Fund, and various other funds but excludes transfers to the Capital Improvement
Fund, which are detailed in the following Transfer to Infrastructure section. The FY 2023 Adopted
Budget included Operating Transfers Out of $5.0 million. In FY 2024, Operating Transfers Out are
anticipated to decrease to $4.6 million due to the elimination of funding for a one-time loan of
$0.4 million to the residential parking permit fund in FY 2023. At this time no loans to the parking
permit funds are anticipated as part of the LRFF; however, staff will be evaluating these funds as
part of the FY 2024 budget development and will bring forward recommendations for additional
loans if needed to keep the parking permit funds solvent.
Transfer to Infrastructure
Recovery from the COVID-19 pandemic were reflected in improved revenue levels in the FY 2023
budget compared to the FY 2022 budget. The total General Fund transfer to the Capital
Improvement Fund budgeted in FY 2023 is $17.5 million compared to the $11.9 million
transferred in FY 2022. This is comprised of a $7.8 million base transfer including interest
earnings, and $9.7 million from TOT revenue generated through voter-approved rate increases
and new hotels that is dedicated to the Capital Improvement Fund to support the 2014 Council
Infrastructure Plan, consistent with City Council direction. As the local economy continues to
recover from the COVID-19 pandemic, estimated transfers from TOT revenues in FY 2024 are
currently projected to increase to $10.5 million and the base transfer to increase to $10.8 million
for a total $21.3 million transfer to the Capital Improvement Fund. This forecast continues the
goal established as part of the 2022-2026 Capital Improvement Plan (CIP) to restore the base
portion of this transfer to pre-pandemic levels by FY 2026. This budget category also includes the
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separate $1.9 million transfer to the Cubberley Property Infrastructure Fund. This transfer to the
Cubberley Property Infrastructure Fund supports general operating and maintenance needs a the
Cubberley Community Center facility as well as capital improvement projects to maintain and
upkeep the facility.
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Attachment B – FY 2024 Budget Development Guidelines
2
7
2
1)Develop a structurally balanced budget that brings ongoing revenues and expenses into
alignment. Develop a plan for any structural imbalance to ensure that the City maintains
fiscal sustainability over the short, medium, and long-term.
2)Allocate one-time resources for one-time needs rather than committing one-time
resources to ongoing services. Examine appropriate uses of revenue surpluses that
exceed forecasted levels such as planning for recession needs, restoration needs, and
strategic investments.
3)Ensure appropriate resource allocation for City Council’s existing priorities.
4)Focus on business process redesign to enhance quality, flexibility, and cost-effectiveness
of service delivery (include examining opportunities to streamline, simplify, reorganize,
and reallocate resources to avoid duplication of effort).
5)Explore alternative service delivery models (such as partnerships with non-profits or other
public/private sector groups) to minimize overlap, maximize cost share, and effectively
use resources.
6)Continue to thoroughly analyze non-personnel/equipment/other costs, such as contract
services, for cost savings opportunities or realignment with current needs.
7)Explore the expansion of existing revenue sources or the addition of new revenue
sources, including the alignment of existing charges for services and the opportunity to
establish new fees, when appropriate.
8)Continue to analyze and prioritize resource augmentations, seeking to offset
augmentations with reductions elsewhere for net-zero impacts to the budget whenever
possible; however, ensuring when resource augmentations are added, it is in alignment
with one-time and ongoing forecasted sources.
9)Continue to prioritize proactively funding long term liabilities including but not limited to
debt obligations, pension obligations, and capital infrastructure in accordance with City
policies as approved by Council.
FY 2024 Budget Development Guidelines
Item AA2
Attachment B_FY 2024
Budget Policy Guidelines
Item AA2: Staff Report Pg. 51 Packet Pg. 484 of 501
Attachment C
Preliminary FY 2024 Utility Rate Forecast
UTILITIES DEPARTMENT
Each year the Utilities Department develops a Financial Plan for the electric, gas, water, and wastewater
utilities. Analogous to the Long-Range Financial Plan for the General Fund, these plans guide utility
budget development and rate setting. Normally preliminary rate projections are discussed by the
Utilities Advisory Commission (UAC) and Finance Committee, followed by formal Financial Plan
recommendations from staff prior to the budget process. This year no preliminary projections were
made due to the sudden retirement of a key staff member. Formal Financial Plan recommendations will
be made in March and April.
Preliminary ranges for July 1, 2023 rate changes are shown below. Costs in all utilities have been
increasing, primarily due to the replacement of aging infrastructure and rapid construction cost
inflation, which are challenges utilities and public agencies across the country are confronting. At the
time of this preliminary development, the state of California has seen unprecedented rainfall and
flooding. Staff are reviewing the impacts of this storm on rate forecasts and will ensure this is factored
into the recommended rate changes for FY 2024. These recommendations are scheduled to be
reviewed in April 2023 by the Finance Committee.
Electric Utility
Tentative July 1, 2023 Rate Change:
•Change from current total FY 2023 rates (incld. hydro rate adjuster): -1% to +1% increase
•Base rate: 12% to 14% increase
At present, staff anticipates little or no change in total Electric rates in FY 2024; this is due to the
decrease/elimination of in the hydroelectric rate adjuster, offset by a 12% to 14% increase in the base
electric rate.
Electric supply purchase costs have risen substantially over the past three years from a combination of
higher market energy prices, greater transmission costs, and lower energy generation from the electric
utility’s hydro resources. Revenues have also declined from lower loads during the COVID-19 pandemic.
By the end of FY 2022 these factors had reduced operating reserve balances below minimum. A
hydroelectric rate adjuster was activated in April 2022 due to decreased hydroelectric output and
increased in December 2022 due to high electric market prices. This adjuster is expected to decrease in
July 2023, but base rates are expected to increase due to long-term increases in electric supply costs and
capital investment related to aging infrastructure and grid modernization. The net effect would be little
or no change in customer bills in FY 2024.
Staff is incorporating a lower long-term forecast for hydroelectric output to stabilize rates during future
droughts, minimizing the types of increases seen in 2022. Staff expects 3% to 8% base rate increases for
FY 2025 to FY 2028, offset by continuing decreases in the hydroelectric rate adjuster, meaning little or
no change to customer bills over the forecast period. In the longer term, load increases are expected to
roughly balance increases in utility costs associated with electrification, leading to only modest increases
in rates.
Gas Utility
Tentative July 1, 2023 Rate Change:
•Change from current total FY 2023 rates (incld. current commodity prices): -14% to 12%
Item AA2
Attachment
C_Preliminary Utility Rate
Forecast FY 2024
Item AA2: Staff Report Pg. 52 Packet Pg. 485 of 501
Attachment C
Preliminary FY 2024 Utility Rate Forecast
decrease
•Distribution Rate: 7% to 9% increase
Currently, Gas rates are expected to decrease for the average customer in FY 2024. Natural gas prices
are at unprecedented levels in California and other Western states; the gas utility reserves were
severely depleted by an extreme spike in natural gas market prices in FY 2023, which exceeded what
could be passed through to customers. Gas market prices are expected to remain elevated through the
forecast period, though below FY 2023 levels. The decrease in gas commodity costs from FY 2023 to
projected FY 2024 is expected to produce a net decrease in customer bills next year. The decrease in
commodity costs will be partially offset by an estimated 7% to 9% increase related to rising gas utility
operational and capital costs, and the need to begin to replenish reserves. Capital investment rates and
how quickly to refill reserves are major variables being reviewed to finalize rate plans.
Rate increases in the 5% to 9% range are expected over the next three years, while in the longer term
increases of no less than 5% are expected as the City electrifies. The City is considering strategies to
protect those who are unable to take advantage of electrification from excessive gas bills as the
transition proceeds.
Water Utility
Tentative July 1, 2023 Rate Change:
•7% - 14% increase
At this time, Water rates are anticipated to increase 7-14% in FY 2024 as water supply costs remain the
greatest source of uncertainty, and staff will adjust the City’s water supply pass- through rate adjuster in
July 2023 based on the final water supply rate from the City’s water supplier. Palo Alto residents and
businesses have responded to calls for water conservation during the ongoing drought. Recovery is
projected to be slow and as in prior droughts, some conservation is projected to be permanent. Water
supply costs continue to increase due to continuing investment in rehabilitating and seismically
strengthening the Hetch Hetchy system. These factors are leading to the need for rate increases over
the next several years. Staff will use the water utility’s healthy reserve levels to spread increases over
multiple years. Rate increases are expected to be around 3-4% annually long-term after FY 2024.
Wastewater Utility
Tentative July 1, 2023 Rate Change:
•5% - 9% increase
Based on current information, Wastewater rates are anticipated to increase 5-9% in FY 2024 to pay for
infrastructure replacement, including replacing and maintaining sewer lines, and replacing aging
equipment at the City’s Regional Water Quality Control Plant. Staff is evaluating a few rate projection
scenarios, including accelerating the sewer mains replacement rate from 1 mile per year to 2.5 miles per
year beginning in FY 2026 to allow the wastewater utility to replace aging mains before the end of their
life expectancy. This scenario expects 8-9% rate increases over the next four years, and 3-5% in the
outer years. The other scenario delays the accelerated sewer main replacement plan to begin in FY 2028
or later to mitigate the impact of rate increases on customers.
Item AA2
Attachment
C_Preliminary Utility Rate
Forecast FY 2024
Item AA2: Staff Report Pg. 53 Packet Pg. 486 of 501
Attachment C
Preliminary FY 2024 Utility Rate Forecast
PUBLIC WORKS DEPARTMENT
Each year the Public Works Department evaluates and analyzes the enterprise funds that provide utility
services as part of the budget development and rate setting process. Applicable projections and formal
recommendations are presented to UAC and Finance Committee in alignment with the process the
Utilities Department follows. Preliminary rate changes for July 1, 2023 are shown below.
Stormwater Management Fee
Tentative July 1, 2023 Rate Change:
•4.9% increase
At this time, the Storm Water Management Fee is expected to increase 4.9% in FY 2024 to keep fund
revenues consistent with general cost increases and to provide sufficient funds for planned storm water
management capital and operating expenditures. Implementing a 4.9% increase based on the applicable
Consumer Price Index is lower than the 6% maximum adjustment specified in the voter approved ballot
measure.
Refuse Services
Tentative July 1, 2023 Rate Change:
•3% increase
Refuse rates are anticipated to increase 3% in FY 2024 to provide sufficient funds for increasing
operating expenses and to maintain the long-term health of our Rate Stabilization Reserve. The Refuse
Fund has not adjusted commercial rates since FY 2017 and residential rates since FY 2018. The
anticipated 3% increase across all sectors in FY 2024 will help to mitigate future potential rate
adjustment spikes when the municipal solid waste collection and processing service agreements term
out in FY 2026. Staff anticipates higher operating costs when a new agreement is to be implemented in
FY 2027.
Item AA2
Attachment
C_Preliminary Utility Rate
Forecast FY 2024
Item AA2: Staff Report Pg. 54 Packet Pg. 487 of 501
From:slevy@ccsce.com
To:Council, City
Cc:Nose, Kiely; Guagliardo, Steven
Subject:LRFF item before council
Date:Tuesday, January 31, 2023 4:35:35 PM
Attachments:AnnualReport2022-2023.pdf
CAUTION: This email originated from outside of the organization. Be cautiousof opening attachments and clicking on links.
Dear Mayor Kou and council members,
I discuss 3 topics:
1) The connection between the City's Economic Development Strategy and the budget,
particularly long-term revenue trends.This is my focus in this email.
2) The short and long-term economic outlook and
3) The LRFF
and I include the latest Assessor report on assessed value increases. I call your attention to
pages 9,11,13,18,20 and 40.
Short and Long Term Economic Outlook
I will write a follow up email later this week after seeing what the Fed does on Wednesday
and the U.S. jobs report on Friday.
The short-term outlook should be clearer by May but probably not before then. The impact
of recent layoffs on job totals will show up in
February, March. April and May EDD reports. Year over year inflation trends will decline as
the 2022 comparable months were very high BUT the
real focus should be on the near term monthly gains--will they remain low as in the past 6
months.
We will have a new UCLA forecast in March.
The LRFF
As usual the staff did a comprehensive and transparent job with the forecast illustrating the
assumptions but also the long list
of what is not included.
I think we will know more about both short and long term trends in May and there is no
need to guess about these trends now.
The Connection Between the Economic Development Strategy and Our Budget,
particularly Revenue Trends
I have met with and emailed with staff and our Streetscene consultant.
Here are some of the points I raised.
1) Both for the ED strategy and for revenue forecasts, it is important to understand the
drivers of key revenues including sales tax, TOT and property tax.
Staff reports clearly show the trends and top line numbers illustrating their importance to
Item AA2
Public Comment
Item AA2: Staff Report Pg. 55 Packet Pg. 488 of 501
overall revenues.
But that is different from understanding the principal drivers of these revenues and how
they can impact ED strategy choices.
My memory is that during the last Comp Plan, Hillary had a fiscal consultant report showing
the main drivers (businesses, residents, Stanford and related visitors) of sales and TOT.
2) We have a lot of (at least DTN where I live, work and walk every day) vacant spaces
mostly retail and office.
I believe that the choices made regarding these spaces will have long-term impacts on the
budget so they are connected.
I hope council with advice from staff and the consultant and in collaboration with property
owners can develop policies that will fill these spaces, particularly those that have been
vacant a long time.
Even if the spaces are not filled with sales tax producers, they will be filled with potential
customers for existing businesses.
I think there will be continuing no longer needed office space with WFH even if the economy
continues to grow. What are the feasible repurposing strategies for these spaces.
The stated goal of the ED effort in the Nov council presentation is
"Develop a market-informed economic development strategy that will ensure Palo
Alto's post-COVID competitiveness by identifying impactful public sector
interventions, policies and investments for which there is both need and
consensus for action."
As an economist I focus on the phrases "market-informed", "competitiveness" and "need".
While council can provide incentives and disincentives, ultimately property owners and
businesses will decide what are their feasible and best options.
3) The ED strategy diagnostic and policy recommendation work will inform council and
residents on ED choices that will impact revenue growth.
Some of these are
a) what are feasible options for increasing the customers bases and attractiveness (related
issues) for DTN and Cal Ave?
b) How does open/closed for these streets impact question a?
c) How does parking availability and how close influence these choices?
I asked the staff and consultants when they thought the perspectives of
restaurants/cafes/bar businesses were aligned with or differ with those of retail, service
businesses and property owners on these questions.
I look forward to the next set of information provided by staff and Streetscene on ED issues
and to future council and, hopefully, Finance Committee integration of our ED strategy
choices into long-term revenue forecasts and related city options.
I have lived and worked in Palo Alto for 50+ years.
Stephen Levy
Item AA2
Public Comment
Item AA2: Staff Report Pg. 56 Packet Pg. 489 of 501
Center for Continuing Study of the California Economy
Item AA2
Public Comment
Item AA2: Staff Report Pg. 57 Packet Pg. 490 of 501
February 6, 2023 www.cityofpaloalto.org
FY 2024 –FY 2033LONG RANGE FINANCIAL FORECAST
City Council Item #8
Item AA2
Item 8 Presentation
Item AA2: Staff Report Pg. 58 Packet Pg. 491 of 501
2
OVERVIEW
•Stagnant economic growth assumed for major tax revenues
•2022 voter approved measures K & L (new business tax and natural gas
transfer respectively
•Measure L: IS assumed in the Base Case
•Measure K: IS NOT assumed in Base Case, alt scenario provided
•Expense projections based on current approved service levels
•FY 2023 Adopted 2-year service reinvestment funded ongoing
•Costs for recent labor contracts included in revised forecast
•December 6th Finance Committee Highlights
•Economic Development
•Major Projects/Council Priorities
•Labor Costing and Staffing Analysis
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Actual
2022
Adopted
2023 Projected 2023 2024 2025 2026 2027 2028
Total Revenue $238,735 $237,751 $238 - 244M $251,177 $261,671 $272,065 $282,203 $290,671
BSR Contribution (One-Time)- $9,670 $9,670 - - - - -
Total Source of Funds $238,735 $247,421 $247 - 253M $251,177 $261,671 $272,065 $282,203 $290,671
Year over Year increase (revenue only)5.6%4.2%4.0%3.7%3.0%
Total Expenditures $197,963 $247,421 $248,721 $251,715 $267,500 $277,159 $283,240 $290,359
Total Use of Funds $197,963 $247,421 $248,721 $251,715 $267,500 $277,159 $283,240 $290,359
Year over Year increase 1.7%6.3%3.6%2.2%2.5%
Net One-Time Surplus/(Gap)$40,772 ($0)$0 - 4.7M ($537)($5,829)($5,094)($1,037)$312
Cumulative Net Operating Margin (One-Time)$0 $0 $0 $625
Net Operating Margin ($537)($5,292)$736 $4,057 $1,349
3
FISCAL YEAR 2024 -2028 REVISED FORECAST
•Mild 18-month stagnant growth beginning in FY 2023
•Voter Approval of Measure L (natural gas transfer)
•Includes revenue and continuation of 2-year service restorations in FY 2023 Adopted
•Revised forecast reflects current estimates including recent labor contracts
Item AA2
Item 8 Presentation
Item AA2: Staff Report Pg. 60 Packet Pg. 493 of 501
4
FISCAL YEAR 2023 BUDGET STABILIZATION RESERVE STATUS
Year-End BSR Summary (in millions)
General Fund BSR Balance,June 30,2022 $72,835
FY 2023 Approved Adjustments
FY 2023 Adopted Budget & FY 2023 Service Reinvestments (yr2)($12,872)
Council Approved Items (Downtown Streets Team,
Reappropriations)
($267)
Subtotal: BSR Balance, After Approved Adjustments $59,696
FY 2023 Additional Adjustments (FY 2023 Mid-Year)($14,000)
$5M to Economic Uncertainty Reserve (plan for forecasted deficits)
$5M to Pension Trust Fund (per Council Policy)
$4M to Infrastructure Reserve (IR) (per Council Policy)
Projected FY 2022 BSR Level, (June 30, 2023)$45,796
FY 2022 General Fund ended with a surplus, as expected in FY 2023 Adopted Budget
•$59.8 M, a surplus of $14.2M compared to the Council 18.5 percent target ($45.6M)
Item AA2
Item 8 Presentation
Item AA2: Staff Report Pg. 61 Packet Pg. 494 of 501
5
ASSUMPTIONS NOT INCLUDED IN FORECAST
•Service reinvestment to pre-pandemic levels
•Capital Infrastructure: Parks Master Plan, Animal Shelter Rebuild,
Railroad Grade Separation, Fire Training Center
•Voter approved Measure K (new business tax) revenue or
investments in three priority areas
•Labor contract terms beginning in FY 2026
•Cubberley Community Center Concept Plan and Gym Repair
•Operating changes: non-profit agreements, fee studies,
code/ordinance changes, legislative updates, ADA compliance
•Resources for Council Priority Items: Sustainability and Climate
Action Plan (S/CAP), Project Homekey, Advancing Racial Equity,
Permanent Parklet Program
Item AA2
Item 8 Presentation
Item AA2: Staff Report Pg. 62 Packet Pg. 495 of 501
7
PRELIMINARY FY 2024 UTILITY RATE FORECAST
6
UTILITY FY 2024 FY 2025-FY 2028
Electric -1% to 1%3% to 8% annually
Gas -14% to 12%5% to 9% annually
Refuse 3%0% to 3%
Stormwater 4.9%Based on annual CPI
Water 7% to 14%3% to 4% annually
Wastewater 5% to 9%8% to 9% annually
•Utilities Advisory
Commission (UAC) to review
rates, followed by Finance
Committee (March –May),
and City Council (June)
•FY 2024 rates will be
effective July 1, 2023
•Staff actively evaluating
recent storm impacts on
rate projections (incld.
Hydro Rate Adjuster)
Item AA2
Item 8 Presentation
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7
7
BUDGET DEVELOPMENT GUIDELINES
•Guide development and
recommended adjustments for
annual budget processes
•Provide flexibility to address changing
economic situations
•Ensure consistent methodologies to
maintain balanced fiscal strategies
year over year
•Align with Council Values as
recommended by Policy & Services
Committee
Item AA2
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7
CONCLUSION
•Revenue trends indicate continued recovery from the pandemic
•Signs of headwinds present opportunity for a recession
•Strong financial discipline aids in managing the uncertain outlook
•Alternative scenarios help plan for variability in assumptions
•Measure L enables continued services from FY 2023
•To manage the near-and long-term fiscal sustainability and new investments
Measure K and one-time surpluses are needed
•FY 2023 Mid-Year Budget:
•Focus on balancing the economic risks with service needs; maintain stability in
services over the next few years
•Invest in priority areas as identified by Council and/or meet service needs
8
Item AA2
Item 8 Presentation
Item AA2: Staff Report Pg. 65 Packet Pg. 498 of 501
7
NEXT STEPS
9
February City Council
•FY 2023 Mid-Year Budget
Review and 2nd Quarter
Fiscal Analysis Report
May
•FY 2024 Proposed Operating and
Capital Budgets Published
•FY 2024 Proposed Budget Review,
including Utility Rates, Municipal
Fees, and Five-Year Capital
Improvement Plan
June
•FY 2023 3rd Quarter
Fiscal Analysis Report
•Adopt FY 2024
Operating & Capital
Budgets, utility rates,
and municipal fees
January City Council
•FY 2024-33 Long Range
Financial Forecast
(LRFF)
•FY 2022 Annual
Comprehensive
Financial Report (ACFR)
March -April
UAC & Finance Committee
•Utility Financial Plans and FY
2024 Rate Recommendation
(Gas, Electric, Water,
Wastewater, Refuse, Storm
Drain, Fiber)
January February March April May June
Staff Work: Development and production of FY 2024
Proposed Budgets
Item AA2
Item 8 Presentation
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10
RECOMMENDED ACTION
Staff recommends that the City Council:
1.Direct staff to use this revised Base Case forecast as the
starting point for the FY 2024 budget process.
2.Approve the Revised Fiscal Year 2024 –2033 Long
Range Financial Forecast and the FY 2024 Budget
Development Guidelines (Attachment B).
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Item AA2
Item 8 Presentation
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