HomeMy WebLinkAbout2020-11-09 City Council Agendas (7)
City of Palo Alto (ID # 11662)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/9/2020
City of Palo Alto Page 1
Summary Title: Budget Amendment Ordinance for Planning & Development
Title: Approval of a $500,000 Net Zero Budget Amendment in the General
Fund for the Planning & Development Services Department’s Cost Recovery
Program for Private Development Studies
From: City Manager
Lead Department: Planning and Development Services
Recommendation
Staff recommends that the City Council approve a net zero amendment to the Fiscal Year 2021 Budget
Appropriation Ordinance for the General Fund in the Planning and Development Services Department
by:
a. Increasing the revenue estimate for Current Planning operations by $500,000; and,
b. Increasing the expenditure appropriation for Current Planning contracts by $500,000.
Note: This action requires 2/3 of the Council to approve the amendment.
Background
The Planning and Development Services Department provides a service for private development
projects using full cost recovery deposit-based contracts. The department utilizes the expertise of
outside consultants to augment and expedite entitlement studies such as historic, environmental, and
zoning compliance. The applicant pays upfront for contract services related to their project and funding
is held in a deposit account until services are performed. The number of projects that use this program
fluctuates from year to year and the associated revenue and expense are realized in the Planning and
Development Services operating budget when incurred.
Due to the COVID-19 pandemic, during the Fiscal Year 2021 budget authorization, the department
reduced contact funding and began redirecting a significant portion of contractor-led entitlement work
to city employees. However, as the department moves into Q2’21, the need and use of full cost recovery
deposit-based contracts continues. City employees do not have the in-house expertise to conduct these
highly specialized studies; therefore, a net zero budget action is required to ensure continuity of service.
No general fund monies are used for this program and all expenditures are supported by offsetting
revenues.
Discussion
City of Palo Alto Page 2
Upon submitting a project to the City, an applicant completes the department’s Planning Review
Application (https://www.cityofpaloalto.org/civicax/filebank/documents/77781). The application lists
the City’s cost recovery policies and procedures. The program provides the City with additional
resources to meet the development needs of the community by offering the applicant the opportunity
to use outside consultant services related to historic, environmental, and compliance review studies for
private development projects. If the applicant chooses to utilize the program, the applicant submits
funds to cover the anticipated program costs which includes a twenty-five-percentage charge for the
City’s administration of the program. Private development services related contracts are exemption
from competitive solicitation per Municipal Code Section 2.30.360 as the services are funded wholly by
private developers. Therefore, contracts do not come before the City Council. The firms conducting
these studies are selected for their experience and expertise. Annually, the City receives about fifty
direct cost recovery projects per year. These projects vary from single family dwellings, to mixed-used
projects, to new hotels being developed in Palo Alto.
Resource Impact
Staff is requesting City Council approval of a net zero budget amendment in the General Fund to
increase both revenues and expenses by $500,000. Funds to cover all costs are received by applicants
utilizing the program. All expenses are revenue supported, resulting in no impact to the General Fund.
Based on Muni Code regulations, this amendment requires 2/3 approval by the City Council.
Policy Implications
Authorization of this budget amendment does not represent a change to any existing policy.
Stakeholder Engagement
Since this is an internal budgeting action only, stakeholder involvement has been limited to the Planning
and Development Services and Administrative Services departments.
Environmental Review
Action on this item does not constitute a project.