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HomeMy WebLinkAbout2017-05-09 Finance Committee Summary Minutes Special Meeting Tuesday, May 9, 2017 Chairperson Filseth called the meeting to order at 6:06 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth (Chair), Fine, Holman, Tanaka Absent: Oral Communications Chair Filseth: First Item is Oral Communications. If there are any members of the public who would like to speak, if they could turn in a cord. And we have one, which is Neilson Buchanan. Welcome. You have three minutes. Neilson Buchanan: (Inaudible, no mic) so if I’m off base, then let me know. I just want to make three short remarks. I listened to the City Council meeting last night, and listening intently to the comments made by the Chamber of Commerce representative, Judy Kleinberg. I couldn’t quite follow all of her logic, but I think that your parking lot concept deserves to have some things put on it that she suggested. One is a long-term prospect of special taxes that would take a long-term prospect of special taxes that would take a long time to get on the docket and to the voters and the other ones that the Chamber of Commerce had already begun to do special things on behalf of Downtown, and particularly single occupancy vehicles. I’d like to know where that good intent and cash might be, if any. But she did allude to active projects that the business community was supporting now. I also think that the attention that the Council gave in general to not letting the SOV objective slip away is really important. Those are long-term curves to get up in place in a small business district like University Avenue and California Avenue, and if we muddle along at $100 to $135,000 a year, we’re just never going to get to the promised land in the two to three-year interval. Finally, I would love to put one of the parking garages into your parking lot. I’m trying to stop and take a look at the real big ticket items, and the hurdles that you all have already begun to achieve. This is going to come funny from me, but I’m not convinced that the urgency for the Hamilton Street garage still exists. I don’t have all the facts pulled together, probably never will have them all, but my intuition tells me we ought to be rethinking that huge capital expenditure. It seems like it’s naturally getting deferred till Fiscal Year ’19 or something like that, so it’s not really urgent, but I’d like to think that the Council and the community will think twice that we’re going to build one just because we made a decision years ago that Downtown University Avenue needed a parking garage. I just have to come back to that some other time, but when I look at the hold installed on the millions and millions of dollars, there may be another way to skin the cat than building a garage. So, I want to be on record, of all things, that it might be wise to kick the can on the parking lot. Thank you. Chair Filseth: Thank you. Adina Levin: I’m trying to understand the Agenda. I’ve got some comments, particularly relating to parking and Transportation Demand Management (TDM), so would that pertain to seven, and was there a note that seven will be moved up or is it time to make that comment now? Chair Filseth: Hang on Adina. Have you got the card? Ms. Levin: Yes, but I didn’t know which Agenda item to put on it to talk now or later. Chair Filseth: We’re going to talk about Item 7 first, right? Mr. Perez: Thank you Chair Filseth. We’re requesting that that item be moved up to first. Chair Filseth: So, why don’t you go ahead, because we’re going to do that first. Ms. Levin: Okay. So, then the comment is building on what Mr. Buchanan just said regarding parking and transportation demand management and really many thanks to the Council last night for pushing forward and having not be continued to be uncertain, but to have a much more tactical plan to seek to move that forward. As you have, I believe, as a note from the TMA that with its current limited budget, the Transportation Management Association (TMA) is running successful pilot programs that shows that it is able to get cars off the road, and in particular, cars from some diverse segments that people were concerned, well, are they really going to us them? Yes, they are using them, and so now there’s a real opportunity to scale it, and a need to keep that moving forward, so I did send a note to Staff and to the Committee Members about one idea that maybe a shorter-term opportunity to be able to keep that moving, and that is to look at the price of full-price worker permits. Not the low-income permits, but the full-price permits that are currently underpriced compared to neighboring major employment center cities, such as Redwood City and San Mateo, which have their prices, their top prices are $80 to $100 and Stanford’s price is $86. So, if Palo Alto adjusted the price of the full-price worker permit even if a couple of increments, that would be able to generate enough money with, I believe, 2500 full-price worker permits to go a very long way towards being able to expand upon the pilots and get successful results from the TMA from this next increment of potential funding. Another item to consider, that’s the Downtown pricing. The California Avenue (Cal Ave) pricing is $12 a month, which is kind of shocking as a monthly parking permit price, and, however, the TMA is not yet serving it, so the question is, what the right timing is to adjust that pricing to be more comparable and does it make sense to wait until that is served by a TMA expansion, or is it so cheap that it makes sense to increase that and help fund the TMA expansion. So, those are the comments building on the Council’s goals to keep working on reducing single-occupant trips, relieving parking, you know, relieving traffic and parking demand. Thank you. Action Items 1. May 4th Budget Hearing Continuation. Chair Filseth: With no further speakers, we will proceed to Action Item 1, which is continuation of May 4th Agenda. James Keene, City Manager: Do you want me to speak now or later? I’ll follow your lead. Kiely Nose, Budget Manager: Just to really quickly recap and then we’ll turn it over to City Manager Keene. To let you guys know where we left off last week, you can see that we’ve spent approximately tentatively an additional $20,000 for code enforcement survey in the Auditor’s Office, and there have four items that have been formally placed in the parking lot. So, that’s in CMO, the non-departmental, tree trimming and Urban Forest Masterplan and vehicle maintenance and replacement requests for additional information. At your-places tonight – of course. Council Member Holman: Unless the non-departmental and whole covers this, and I don’t think it does, oh, there it is down there, the contingencies. Yes, that’s what I was looking for, contingencies in parking lot. Ms. Nose: The City Council contingency? Council Member Holman: No, the, oh, that’s Council contingency. I thought we put all of the contingencies in parking lot. Lalo Perez, Chief Financial Officer: So, the non-departmental includes the contingencies. So, it’s there. I didn’t know… Mr. Keene: (Crosstalk) you put the City Council, I don’t know if that’s in the parking lot versus are you just identifying what the Council contingency is? Ms. Nose: So, on this slide we are just identifying what the City Council contingency is; however, to Council Member Holman’s question of, are the contingencies within the City, the contingent accounts in the parking lot, and the answer is yes, because it’s within the non-departmental section. So, we put the entire section in, that includes everything from reserves to all the contingent accounts City wide. Mr. Keene: This is partly up there, is that for you to be aware. I mean, not saying that you wouldn’t automatically do this, but would the Council want to allocate any of the budgeting contingency in the Council thing, and any recommendation that you have for any add backs. That’s one of the reasons that the Staff just put it up there. Council Member Holman: Thank you for clarification. Ms. Nose: Yup. And then in addition, at your-places tonight, you guys have a very short memo that gives you an overview of General Fund overtime. That’s Attachment A, and salary comparison in the General Fund as well. That’s Attachment B. And so, these are both just the amalgamation or aggregation of all of the individual line items that you guys see when we’re reviewing each individual department. Also, it follows up on a question from Thursday night about airport tie-down rates, and provides the San Carlos rate of $137 per month compared to Palo Alto’s of $159. Additional information that you guys have requested on Thursday we will bring forward as part of the Budget wrap up. Chair Filseth: Okay, thank you. Ms. Nose: And with that, we’ll ask City Manager Keene to step in and help us out. Mr. Keene: So, Mr. Chairman, we didn’t have a chance to talk about this, but we were wondering, this may be useful to both your focus on the Budget and then issues that could come up in the Committee that really extend beyond the Budget itself and into sort of a larger area. Subjects worthy of potential follow up in the future and that sort of thing. There may be questions, for example, that ultimately get to something that is longer term or bigger, larger than this Budget decision. Why do we do something this way, or do we want to look at restructuring how we provide a service in the future? I mean, to be honest with you, for the most part you’re not going to be able to do that during the Budget, but you’re going to be able to make Amendments to the Budget by either deducts or adds. So, we thought we might also suggest the concept of a different parking lot that’s almost for, you know, big questions or issues, and when we were talking this over at Executive Leadership Team (ELT) this morning, one of our members said, “Why don’t we just call that long-term parking.” I thought that was actually pretty funny. It’s beyond the scope of this, but if there’s a desire at all not to lose sight of some of those ideas or things that later on could potentially come back and be considered by Finance or we need to take to the Council, just did want to make that as a suggested offering, and Staff is going to try to keep track of things that you say, and if there is a real question or something, you can say, “Let’s not lose that.” It might be best to put it up there. We may not have to try to dive deep in it here and be fumbling around tonight. So, thanks. So that’s a parking lot and then long-term parking. Chair Filseth: Long-term parking. Mr. Keene: That’s beyond the Budget. Chair Filseth: That sounds like something worth trying. Comments? Yeah, can we charge for it? Yeah, a lot actually. Council Member Holman: (Inaudible, no mic) my apologies for being late. I was in another engagement that ran late, so my apologies for being late. Chair Filseth: By the way, since we’re talking about timing here, we’re going to lose Council Member Tanaka somewhere shortly before 9:00 this evening, so I’d like to get through as much as we can by then. Mr. Perez: Thank you for that. Speaking of Council Member Tanaka, he had asked Staff to distribute to the Committee a comparative analysis that he had completed comparing Palo Alto and surrounding communities, so I forwarded that to you via email late this afternoon, but I also brought you copies, so the comparative analysis, so you’ll have it for your files. Thank you, Jessica. You know, I’ll defer to Council Member Tanaka to explain the document itself, but if you follow the proper protocol to have Staff send it out, so we stay within the – exactly. We just need to get ourselves organized so we can start the presentation on the special revenue, if that’s okay. Moving to that. NO ACTION TAKEN At this time the Finance Committee heard Agenda Item Number 7. 7. Special Revenue Funds, Operating Budget. Parking District, Operating Budget Stanford Development Agreement Fund, Operating Budget Other Special Revenue Funds, Operating Budget Chair Filseth: If we’re done with Item 1, let’s proceed to Item 7. Jessie Deschamps, Senior Management Analyst: Good evening Council Members. I’m Jessie Deschamps with the Office of Management and Budget, and I will be presenting the Special Revenue Funds Budget. A summary for these funds begins on Page 97, where Tables for the respective funds can be found beginning on Page 105. So, first are the Community Development Funds, which is a transfer to capital projects totaling $1.6 million. This includes four projects in Fiscal Year (FY)‘18 related to parking improvements, enhanced bikeways and upgraded traffic signals. Details for these individual projects can be found in the Capital Budget book, but are briefly summarized in the front of this section. We will also be speaking about capital projects as part of the May 18th Finance Committee meeting for General Fund Capital Review. Next is the Federal, State Revenue Funds, which consists of the Community Development block grant. A total of $818,000 is anticipated to be distributed in Fiscal Year 2018. This includes addition of part-time hourly Staff, which is partially offset by 0.26 of a Senior Planner position. This is intended to shift administrative and planning functions from the Senior Planner to this new position, allowing the Senior Planner to focus on housing projects in the next Fiscal Year. Next are Special District Funds, which include University Avenue, California Avenue and the RPP District Funds. This resulted in a net staffing reduction of 0.60 Full Time Equivalent (FTE). Please note that on Page 101, this states that the reduction is 0.22. This will be corrected as part of the Adopted Budget. Also included is the 25 to 75 percent increase to revenues which corresponds to recommended increases in permit fees. A more detailed discussion of the fee adjustments will be included as part of the municipal fee schedule review scheduled for the Finance Committee on May 18th. On the expense side, you’ll see a reallocation of the tree lights and Downtown streets team costs, which are proposed to move from the Public Works Department to the University Avenue Fund. In addition to the University Avenue Fund is TMA funding of $135,000 and a reduction of valet services of $175,000. Lastly, capital projects in the Special District Funds totals $1.3 million, and pertain primarily to parking improvements and initiatives. These are listed on Page 101, where again, detailed information can be found in the Capital Budget book. Revenues in the In-Lieu Funds have been realigned in Fiscal Year ’18 based on tracking by the Planning and Community Environment Staff. Specifically, housing in-lieu revenues are anticipated to decrease by $1 million and traffic mitigation and Parking In-lieu Fund by $1.3 million. Lastly, in the Stanford Medical Center Fund, capital projects of $5.8 million are programmed to Quarry Road, bicycle and pedestrian improvements. There are no significant changes to the public Downtown Business Improvement District street improvement or public benefit funds. So, with that, I conclude this presentation and we are here for questions. Chair Filseth: Council Member Holman. Council Member Holman: Sure, so it’s a little harder to follow with it being, it’s presented in two different ways in the text format, the pros format is a little harder to track than the tabular format, but I have a couple of questions, which are; in your presentation on Slide 5, revenue alignments to housing in-lieu is down a million, and traffic mitigation and parking in-lieu is down $1.3 million. Can that be explained? May that’s a question for Hillary? Sherry Nikzat, Senior Management Analyst: Hi. Sherry Nikzat, Planning and Community Environment Department. Every year we try to do a projection on the housing in-lieu fees, depending on what’s coming in the pipeline. So, last Fiscal Year we tried to do that and we were off a little, so this is really more of a correction of what we see coming and taking a look at past history. Council Member Holman: And parking in-lieu as well? Ms. Nikzat: The parking in-lieu as well, yes. James Keene, City Manager: Could I just sort of explain this the way I hear it. So, it’s a little bit different than sort of an actual Budget amount, right. It’s a reduction. I’m guessing that what we’re doing is just doing a year-over-year comparison for the most part, so it really says, last year we were thinking this was going to be our experience in each of these areas, and this year we’re adjusting our projections down. So, it’s a little more like estimating a revenue, really, than how much we’re going to spend. Ms. Nikzat: Right, it’s not an expenditure. Council Member Holman: And are the, remind me, are the impact fees also considered a Special Fund? The impact fees for parks or housing or whatever? Lalo Perez, Chief Financial Officer: Yes, and we segregate them by each of the categories and track them and report to you in December and January. It’s a two-step reporting process that we must follow. Council Member Holman: But they’re not part of the Budget? Mr. Perez: They are part of the Budget under special revenues. Council Member Holman: Where on special revenues, and I didn’t hear. So, a couple of things… Mr. Perez: So, if you look at Page 106 and you look at the revenue section at the top, you’ll see traffic mitigation fees, development impact fees, in that section. Council Member Holman: But, it just says developer impact, it isn’t broken out by… Mr. Keene: Not in this Budget. Ms. Nose: So, in the display in this Budget, we do aggregate the funds from a simplicity standpoint. Just giving the magnitude. You can see by kind of operational grouping on Page 105, you can see the Traffic Mitigation and Parking In-Lieu Funds. You can see Stanford. You know, public art has some. You have the Housing In-Lieu Funds. So that also tries to split it out, but there’s, gosh. Council Member Holman: I know, there’s several different. Ms. Nose: I’m trying to think of how many we have. Given the volume, we aggregate them in that way. In this way. Mr. Perez: I would say, what we could do is provide you the, you know, we could look at how we reflected in here similar to the way we reflected in December and January reports. In there we show you the specific impact fee. There’s, off the top of my head, maybe twelve, and what we show you there is the beginning balance and the ending balance, and we do it after the financials have been audited, and we show you the transfers and where the transfers went to. You know, if they went to a capital or an operating expense, and show you what’s the balance. So, we can look at how we report it in the document and see if there’s a way to incorporate some level of additional detail. Council Member Holman: That would be really helpful, I think. And then another question I have is, on 107, use of funds, Public Service and we’ve got the HSRAP Funds kind of identified here. Oh, these are Community Development block grant, I’m sorry. The HSRAP Funds are… Mr. Perez: That would be reflected in the Community Services Budget. We give you a summary there for HSRAP. Council Member Holman: But this is CDBG. Mr. Perez: Right. So, some of the CDBG awards go to agencies that may also receive HSRAP Funds. I think it’s probably what you’re recalling. So, you may see them in two places. Council Member Holman: Okay, but I’m looking for the ones that go specifically to HSRAP funding. Mr. Perez: Yes. So, you’ll get that tonight under the Community Services Budget, we’ll have that. Council Member Holman: Okay, because when I want through it in here, I did not find it. When I went through, not here. When I went through the Community Services I didn’t find it as a breakout. Ms. Nose: I think what you’re looking for is on Page 212, that we’ll get to later on this evening. Council Member Holman: Yeah, I was trying to identify that. So, when we get there, well, if we’re going to get to it later, then I won’t take up time here. But I was trying to identify that back there when I was making notes and looking through this, and I, it wasn’t really particularly clear to me. So, okay. For the moment, I think that’s all for me for this section. Thank you. Chair Filseth: Council Member Fine. Council Member Fine: Thank you. I have a few questions and some comments and I’ll probably need another round, if the Chair permits. So, I’m just looking over these Special Revenue Funds. There’s a lot of volatility in these numbers across the different categories year-to-year. Is that normal for these funds? And, if so, are we okay with that or are there ways we like to smooth it out? Just wondering. Ms. Nose: Sure. Just as a little bit of background, Special Revenue Funds can vary significantly from fund to fund. Some are based on development activity; some are based on daily activity, like parking. So, you’re right to see those big swings because they run the gamut in the operations that they’re tracking. So, it’s not terribly concerning that you do see that volatility, just given the breadth of work that these funds cover. We do track them. We do look at them and analyze them, like Lalo said, and for things like the impact fees, have that annual report. So, what we do try to do, from a budgetary side of things is make sure funds are healthy, make sure they’re financially stable, and if there is any issue, that we address it proactively, and then also bring that to your attention. Mr. Perez: And then, I was just going to say, one area of concern, and you’ll hear more about that on June 6th and Staff will give you an update, is the CDBG funding, because of the Federal funding concerns. Council Member Fine: So, is the 2018 proposed of $379, is that just some discount rate we’re putting on there, or is that an informed number? Mr. Perez: I believe it’s an informed number, and we have a deadline that was extended till August. Typically, the deadline is like early June, if I remember, off the top of my head. And I think that was done on purpose by the Federal Government, because they’re going through internal discussion, so we’ll have a better update than what I’m giving you, later on in June. Council Member Fine: Okay. So, just two comments to my Colleagues and I need to look at this a bit more and get some more questions. Two things that stand out to me are kind of the drop in CDBG Funds and where we’re pushing the pain into the different organizations and agencies there, and the second point, as some of the public speakers mentioned, we’re severely underpricing parking on Cal Ave and I would be in support of looking at that again, figuring out what are the, kind of what’s the sensitivity curve there in terms of increasing parking prices on Cal Ave, the garage district, along with University as well, but Cal Ave seems particularly underpriced. Mr. Keene: Will we be getting to that later? Ms. Nose: We will, as part of the municipal fee schedule on the 18th, you’ll see the California Avenue (Cal Ave) prices are recommended to be significantly increased, with a more modest increase on the University Ave site. Chair Filseth: Is Staff actually going to come back with a suggestion on that, on the 18th? Mr. Keene: We have suggestions. Mr. Perez: What you see in here is an aggregate revenue, so it’s a little bit disconnected, if you will. But I think it’s probably okay that it is, because we’ll give you specifics on the 18th on the muni fee schedule, exactly what the rates will be going up. Chair Filseth: So, the Budget numbers here, do they assume status quo? Mr. Perez: No, they’re assuming increases, but I think what we want to do, instead of going through the fees on a department-by-department, we would rather aggregate them and discuss them all at once with you. Council Member Fine: Just a comment there, looking at some of these tables, it would be helpful to have the percentage increase columns year-over-year, they’ve missed the printer, something like that. Mr. Keene: Can I just speak to – I don’t see any reason why not to share just the percentage that we have. I mean, so, then, it might be for, make for a hardy discussion by the Council, both on our rationale and are those the right percentages. So, as I recall, the Downtown Parking Improvement District increase is 25 percent and in Cal Avenue it is 75 percent. Now the differential, the base price is significantly different between the two entities, so I think we go from whatever it is in the Downtown, up to 5, 75 or whatever, (inaudible) $560, and then in Cal Avenue we go from about ballpark, $150ish or something to $250ish or in that range. Not exactly the number, but. Council Member Fine: Those are my questions for the moment, but I’ll get some more. Chair Filseth: If you want another round, we can do that. Council Member Tanaka. (Inaudible) I had a couple. So, this is probably a good segue, so back on Page 106, there’s a line parking mitigation fees. What is that? Is that permits? Because there’s permits on the next Page. Ms. Nikzat: It’s not, there’s a separate one called parking in-lieu, which is the one I think Council Member Holman was asking about. And then we have the Parking Permit Fund and we have transportation impact fees. This traffic mitigation fee is not something that currently, it seems like it’s an older fee, and it’s just changing because of the investments that are involved with it. We have a (crosstalk) yeah, the traffic mitigation fee? Chair Filseth: Parking mitigation fees. It looks like it’s $3.8 million. So, what is that? Mr. Keene: Is that about what our parking (crosstalk). Ms. Nikzat: That would be parking in-lieu fee, I would think. Mr. Perez: The fund is a little bit higher, but let us take a look. We’re going to look at the details. Ms. Nikzat: I’m sorry, I thought you said traffic mitigation fee, not parking. I think it’s a parking in-lieu fee, but I’ll double check it. (Inaudible). Chair Filseth: Okay, then on the next Page there’s a line for permit sales and it goes up materially from 2017 to 2018. And, is that permit sales for the garages, or does that include Residential Parking Permits (RPP’s)? Mr. Perez: So, this is only for the lots and garages in the parking district, and this is the percentage that Jim was talking about, City Manager Keene, we raised the fee about 75 percent, so this is the aggregate of those increases. Chair Filseth: Got it. So, where does, do fees from the RPP’s show up? Mr. Keene: You can find that, and as Hillary leaned over here to me, that there is a commensurate increase in the RPP fees, you know, and if you recall the Parking Management Study that Dixon did, is we want to keep the right balance between RPP and parking, in particular, to be sure we’re driving as many folks into the parking lots as possible. Chair Filseth: I understand, but, I mean, we sold 1300 parking permits or something last year, and the majority of them were full fares, so half a million dollars or something like that? Where does that show up in here? Ms. Nose: That actually gets back to the aggregation. If you look on Page 105, under Special District Funds, it’s the fourth from the right column. So, what that is, is that’s all three Parking Funds, so it’s RPP, University Ave and Cal Ave. So, from a budgetary display, we aggregate all of them, but we do have separate individual funds. Mr. Keene: Can you guys look that up here; can you do that? Ms. Nose: Yeah. Chair Filseth: So, I see net sales, most of it is net sales, which is $1.6 and permits and licenses, which is $2. So, then the total is $4 million or something. So, does that mean we sold $4 million worth of parking permits last year? Ms. Nose: Correct. Chair Filseth: It’s not as simple as RPP’s went into net sales and the other one went into, well, the other numbers aren’t right. Hillary Gitelman, Director of Planning and Community Development: Kiely, Sherry did a quick summary of the Budget Proposal for the four RPP districts, if you want me to chime in? Hillary Gitelman, the Planning Director. So, we have four districts, Downtown College Terrace, Crescent Park and Evergreen and Southgate, I’m sorry and we don’t yet have Southgate. Downtown, we’re projecting revenues of $820,000 and total expenses slightly less than that. In College Terrace, it’s totally the other way around, with $86,000 in revenues and $291,000 in expenses. Mr. Keene: That’s one of the reasons we weren’t eager to repeat that model. Ms. Gitelman: That’s right. Crescent Park, and it’s not really an RPP, it’s a no-overnight parking, we have about, we’re about equivalent, $20,000 in revenues and $19,000 and change in expenses. The Evergreen, it’s not fully budgeted, because we haven’t allocated Staff to this, but our projection for the year is $150,000 in revenue and $172,000 in expenses, without the staffing, and again, that district really isn’t mature. It’s really an estimate. And we have the Southgate proposal coming to Council in June, so there will be a fifth district to keep track of next year. Chair Filseth: Thank you very much, and Evergreen Park includes Mayfield? Ms. Gitelman: Mayfield, yeah. Chair Filseth: Where in here does Serco show up? Is that under expenses, contract services? Ms. Gitelman: Yeah, under each of these RPP districts, we track Serco expense for enforcement. So, we can breakout the expenses more fully, but in each case there’s a line item for enforcement. Ms. Nose: You’ll see that in contract services, that $1.9 million figure. Now that’s not all Serco, but it is a portion. And just a follow up on your other question about what’s in traffic mitigation fees. Chair Filseth: Parking mitigation. Ms. Nose: Got it. Thank you for that clarification. Parking mitigation fees are RPP permits. They are your other permits at University Ave, so everything from your one day to your annual and also your Cal Ave as well. It’s just our fancy term. Chair Filseth: Parking mitigation fees include all the numbers (inaudible, no mic). Ms. Nose: Correct. We can change that title to parking permit fees, which seems a lot more clear from a public standpoint. So, I head you. We will make that change. Chair Filseth: On Page 108 we have, at the very bottom, we have $465, $572 budgeted for valet programs. How many parking spaces does that free up? That’s the valets in the – how many parking spaces do we get for that, do you know? Ms. Gitelman: I’ll have to get back to you with the specifics. I know the program is heavily used in one of the garages and not so heavily used in the others. Chair Filseth: Ballpark would be okay. I mean, is it 10 or 100 or 1,000? Ms. Gitelman: I’m not going to hazard a guess. Chair Filseth: Okay. And then, finally, my last one, which is Page 109 from the University Avenue Parking Permit Fund, there’s a transfer to the Capital Improvement Fund of $953,000. What determines the size of the transfer to the Capital Improvement Fund? Ms. Nose: The Capital Improvement projects that are programmed in the Capital Improvement Fund simply for FY ‘18 determines that figure. So, for example, the bulk of that number is actually $700,000 for the replacement, well, not replacement, the upgrade of an elevator to ensure Americans With Disabilities Act (ADA) compliance. So, we only transfer on an annual basis what’s necessary, and available, true. Chair Filseth: So, including the elevator and a couple of other things, the income from operations was a loss of $300,000 or something like that. Where does the difference come from? Ms. Nose: Fund balance in this instance. This fund does have amounts from prior years where revenues outpaced expenses, and so it’s a reserve that we use gingerly, knowing all of the investments that are upcoming. So, we will be tapping on that very soon. Chair Filseth: Okay, I hear you. Oh, I did have one more, actually. I was going to ask something about the Stanford Fund, are we going to, is there going to be more on that or should I wait? Ms. Nose: Now would be appropriate. Chair Filseth: So, it looks like at the beginning there we had $27 million and we spent a bunch and now we’ve got $14 million. Is that going to be all gone in like a year? Mr. Keene: First of all, I think we need to connect Stanford Funds with the CIP itself in the Infrastructure Management Plan. Mr. Perez: Yeah, and then we’re getting a second face, I’ll call it, if that face numbering is correct, this fall. There were some dollars that were programmed to come in later as a result of the staging of the project and where it was in terms of construction. So, what we’re doing is, we’re using those funds to fund basically, they’re all mostly going to go to the Infrastructure Plan with the exception of some youth funds at our program, and maybe I’m, I may be missing a couple others, but the vast majority is going into the infrastructure. So, as we move into our infrastructure expenditures, then we pull those funds. So, some of the funds have been programmed in a Council-approved layout that we did a couple of years ago. Obviously, those funds are growing, but the expenditures are also growing. So, we may not have enough is the point I’m trying to make for our infrastructure as we’ve been telling you. But the direction from prior Councils has been to primarily focus on infrastructure expenditures. Mr. Keene: So, when we negotiated the Stanford agreement, there were buckets of funds for different purposes, so we had like $4 million in a health and Safety Fund. The largest group was this, or groups were something for infrastructure and I can’t even remember, sustainability or whatever, and that was in the low $20 millions of dollars, and as Lalo said, we hit some trigger points in 2017 where some new funds started to come in. It’s still by comparison of the others. I can’t remember if it’s $4 or $5 million or something in that range, but we really took all that money, that Infrastructure and Sustainability Fund and that is one of the key funding streams for the Infrastructure Management Plan. So, what is happening now is as we have in the CIP in a given year, or prior years, projects that are going to draw, that are in the Infrastructure Plan, so for example this year, even in this next week or two, we’re going to come back with the Bike and Pedestrian Plan on a bunch of stuff. Well, that might be ultimately funded by some of this infrastructure money and we’re drawing that money down. So, actually, we want to spend this money as fast as possible, because on the expense side when we talk to you about the Infrastructure Plan, the sooner we get these projects built, the lower the cost will be. Mr. Perez: That’s right. Chair Filseth: So, if I understand what you just said, it’s that obviously we all know there’s been this gap growing between what we budgeted for the Infrastructure Plan and the Public Safety Building and so forth and what it’s actually going to cost, because just increase in construction expenditures, and so you’re looking at, as we figure out sort of how we’re going to close that gap, your anticipation is that the Stanford Fund is going to be one of the main sources for that, is that, did I just understand that right? Mr. Perez: That’s correct. And there was an interest by the Council at the time to make that the legacy of the expenditure, that we invested in our infrastructure and there is something to be said about what came about. Mr. Keene: Can I just sort of modify what Lalo said, a little bit. Let’s just say that Infrastructure Plan as we envisioned it at $170 million, we had basically programmed all the Stanford Funds into that $170 million. So, we now have a gap in the planning at least, we’re up to $196 million, so we have a gap that we need to fund. Now, that being said, on the 2017, post 2017 funds that start to come in from Stanford, help me out, I’m hoping that it’s this way, my recollection is we did not preprogram how we were going to spend those funds in the Infrastructure Plan. Maybe I’m mistaken, but… Mr. Perez: Right, I’ll have to double check, but maybe by the next meeting, but I believe they’re most development impact fees, but I’ll have to double check. Mr. Keene: So, I’m just saying some of those funds may be more fungible or discretionary and uncommitted. Ms. Nose: So, just a little bit of clarity. One of the real useful areas, I think, for you guys to look at, when we get there on the 18th is going to be the source and use for the general Capital Improvement Fund, which shows you all of these transfers in. So, they’re expenses, obviously, in the Parking Fund, in the Stanford University Medical Clinic (SUMC) Fund, but there are revenue sources to that general CIP Fund. So, if you look at it, there’s over $18 million worth of revenues that are anticipated to be transferred over quite a few years, let’s put it that way, that have already been factored into that five-year plan. To both Lalo and Jim’s point, we do have additional funding coming in per the agreement over the course of the next calendar year in theory, assuming all goes as planned, of which some is programmed, but not all. So, whether or not it can be used to fund that gap will become a question as to how much comes in, when does it come in, and what are the buckets that it goes into per the development agreement. So, all of that will be, as we know more we will, of course, keep you updated and I will absolutely go there, if there is excess funding to close that gap. Chair Filseth: Alright, thank you very much. Another round. Council Member Fine, do you have any more? Council Member Fine: So, turning to Page 109, I think the Chair had a good question and it led to a good discussion about the changes in CIP funding. I’m looking to Staff here a little bit. I’m not too happy with the TMA number. I think, particularly given that we do have control over the permit sales and that currently we’re getting $1.4 million is sales, we’re spending you know, half a million on valet parking and only $135 on the Transportation Management Association (TMA). I think we have some ability to shift those pots of money around towards the TMA as kind of the alternative. So, that’s something else I question. Chair Filseth: City Manager, do you want to comment on that? I thought there was discussion of loans and other kinds of sort of mechanisms? Mr. Keene: I think there’s two pieces of it. When and how do you, this is going to sound like I’m being abstract about it. I mean, when and how do we want to make that decision about what to do with the TMA Funds, and what will we use it for. I mean, particularly if we’re going to be loaning money, we want to have a clear sense about what we think that plan is for the year, as opposed to just pulling it out. Hillary, I don’t know if you guys are in a better position to sort of scope out the scale of what we would think this coming year. Ms. Gitelman: Yeah, I’d be happy to do that, and in fact, I was going to get to this when we get to our department Budget. It doesn’t really neatly fit in either one of these places. But, we’ve got a couple of things that aren’t included in this Budget document. One is additional revenues from paid parking as we’d brought to the Council the paid on-street parking was an idea that was advanced and referred to Finance and to the Planning and Transportation Commission (PTC) for some further work. Obviously, that’s a potential revenue source that ultimately could be targeted to trip reduction and congestion relief. We also haven’t included any of the Measure B Funds in here that is likely to come to the City. We expect to start getting some local streets and roads money that can be used for congestion relief in the third quarter of this calendar year. So, just conceptually, we’ve been talking about using the Measure B Funds to provide some additional support to the TMA for at least a couple of years, until potentially additional parking revenues are available for that purpose. Obviously, this is very theoretical. It will require a lot more conversation, but it’s something we hope to bring back to the Finance Committee after the Budget season. Council Member Fine: I think some of those are assumptions, but even after our discussion last night, I think there is support on the Council and within the City, the community, to push on the TMA, especially in its kick starter years, right? If we are implementing paid parking, if we are implementing a transportation tax in a couple of years. Those are sources that are ideated in part for the TMA. Right now, they are short on funding. We did get a letter from their board, from Rob George I think, with Phil’s, asking roughly for $480,000. So, there seems to be quite a gap here, just in terms of the revenue sources we may have. What Council is willing to look at and where some of the priorities are. I think the TMA is a large one. Ms. Gitelman: I totally hear you and I think the number that Rob is citing is consistent with at least the conceptual thoughts we’ve had about Measure B Funds. The TMA uses the calendar year budget, we use the Fiscal Year, so it’s possible that by the third quarter of this year, we could have that amount of Measure B funding to direct to the TMA, and then potentially double that next year. So, again, it’s not in this Budget document, and I hear you that that might be something to get more specific about. Council Member Fine: So, I guess then maybe I’ll ask my Colleagues what, how you all feel about this. Are we okay letting the TMA go on $135 for this Fiscal Year, based on waiting for Measure B, and potentially parking revenue, or do we want to put some money there first. Chair Filseth: For me, the scenario I want to avoid is that it comes from a fund that comes from residents, right. A majority of what TMA is going to do, realistically for the next year is you’re going to invest in transit passes and things like that. I don’t think that ought to be funded by taxpayers, resident taxpayers of Palo Alto, so I’d like to see that come from some kind of fund where it’s coming from businesses, because that the way it should. I mean, it’s a business expense. That’s the way it should allocate. So, I guess I would be loath to just say, “Let’s spend some money on it from the General Fund.” I’d like to see the source of where it’s going to come from. That’s my initial thought. Mr. Keene: So, if I might add, I think, I mean, this is kind of a convergence of factors here. I think there’s no doubt that the TMA is a priority. There is no doubt, I mean, there is no question, I think, that it’s not going to be effective being funded at the level that it’s being funded right now. I actually think that the direction that the Council gave us last night was precisely in line with this line of questioning, which is, what are the transportation needs that we have as it relates to our goals, what is the funding, what is the gap. What Hillary’s partly saying is, we should have a better, and we’re talking about coming back in late September or October, there’s a good chance we would have more specificity about what the number could be out of Measure B Funds or whatever. And the idea of parking fees are a little bit more out there down the road. That would be more dependent upon a loan with some idea of repayment. So, you really have two options, I think, as a Committee and then ultimately the Council. You could jump out a little bit and say, “Well, I’d like to put it in the Budget right now.” So, that would be an expenditure, and enhanced expenditure. And then your question, Chair, about, “Well, where’s the funding come from?” Has two pieces; one, where does it actually come from just to make the math work, and then two, what is the source as it relates to your concern about who pays. So, I think, for the most part, we would have to put a plug, estimated number in here, and we’d have to say to you probably publicly, that’s not a guaranteed number yet, as far as us being able to go out and spend it. We’re going to still have to wait, say if we’re counting on it being Measure B, till the third quarter or whatever, to be able to corroborate it. Or secondly, you could say, “Well, we clearly want this. We anticipate this coming back to the Council. When we get this revenue, with all apologies to Council Member Holman, we would bring a Budget Amendment to the Budget that would actually allow us to spend that money. The last thing I just would say is this thought, and Hillary, separate from the mechanics of the Budget piece, one of the key things is to really nail down with specificity, how we would spend $480,000 and that needs to go beyond what the TMA just thinks, but what the Council thinks that that is the right spending for the year. And I do think we would have to do some work and then be prepared to come to the Council on that. Council Member Fine: So, I completely agree with that. I think those kinds of comps are important, particularly when we’re spending you know, $465,000 on valet. I think the Chair comment, question earlier, how many spots we’re actually moving there, is that really important. Chair Filseth, there’s just two things. I agree with you; the TMA should be funded from businesses. Residents are currently paying couple tens of millions for garages which we’re banking, employee permits which we’re selling. I think that’s kind of the nexus where we should begin funding the TMA, but I would like to see some comps in terms of the sources and uses of how we might fund the TMA, how we might fund valet and how we’re spending them on the parking spots. Ms. Gitelman: Just one quick correction. The amount budgeted for the valet is $289 found on Page 108. So, it’s going down. That’s a valid question, whether that is a priority that we should maintain. Mr. Keene: Lalo leaned over to me saying too, going back to your question about the parking permit fees, the Council has the discretion to set the fees at a different level than the Staff’s recommendation even. So, that could be a funding source that you would identify as part of this Budget, and you could say that you want that dedicated to the TMA. Chair Filseth: So, I’m going to guess that when Staff prepared this Budget, and you know, the Budget is the Budget until there’s a new Budget, right. That sort of the feeling was, all this stuff, there was enough uncertainty and nebulism in this stuff that you sort of felt it would be better to proceed with sort of what was known now, and append it later as we got to that. What’s as of now and last night, what’s Staff preference on how you’d like us to proceed? Mr. Keene: So, my own recommendation would be this. First of all, I appreciate the thing, the phrase you started off, your comments with, it would be really bad practice for us as a Staff to start populating our Budget recommendation with lots of possibility based recommendations. It would drive you crazy, and then we’d actually have a, we’d get a bad, rightfully, a bad rap. I do think that at a minimum, the Committee should recommend to the Council that enhanced funding for the TMA is a priority for this Fiscal Year, and that you, my recommendation would be to not, unless you specifically identify a revenue that we could have in hand now that could be approved by the Council, which is an increase in permit fees would be something that’s in your authority, and then allocate that additional money to the TMA. I think you’re better served by saying, “We’d really like to see, when we come back for this session on the transportation needs, plans, gap, real attention to how we would enhance the funding that we have in the FY18 Budget,” and do it then. I think that’s the best practice, but I clearly don’t want you to lose the fact that the Committee here seems like enhancing the TMA funding is a priority recommendation from the Committee. Chair Filseth: Are you okay with that, Council Member Fine? Council Member Fine: Are you just asking us to ask Staff to increase revenues and not increase costs? Is that the message I’m getting? Mr. Keene: What I was saying is, if your, I mean clearly, I agree with your point. I mean, $135,000 is not enough money to really start to ratchet this up to see what can really work. And then on the other hand we have a recommendation from the TMA board, a small board of folks, about what that number could be. And we have a gap as to how to fund that. So, my thought is, if you can identify a specific revenue source, you could go ahead and tell us, “Yes, we have more money. We’d like to see a recommendation as to how we would spend $270,000 rather than $135,” or whatever the number is. I’m just saying I think you’re going to still come back later in the year anyway and want to ratchet that up with either more revenue, if we have the estimate. That’s why I was trying to say, concurrent with that you could direct us right now, we could bring something back to Council with this that says, “We’d like over the summer that Staff start refining the recommendations on how much we should spend in Fiscal Year ’18 for the TMA.” So, you match up this revenue thing, so it’s not just, “Oh gosh, we have a million dollars. Let’s just put that much in.” Chair Filseth: I shudder to suggest it, but is this an issue for the long-term parking lot? I mean, it’s not long-term, right, but… Mr. Keene: I think it’s more known that what we thought was in the long-term parking, don’t you? I think it’s really pretty clear. Ms. Nose: Yeah, I was going to say, I think from a, what is the ongoing, what’s the longer term strategy for parking, we all know that we’re coming back with that. We’ve done some very preliminary five-year forecasts. So, what does it take, because we’re talking about well over $5 million worth of investments, right? You’ve got a parking permit system that’s going to come on board. We have red-light/green-light. We’ve got paid parking, we’ve got lighting to make the parking structures more safe as we bring more on board. So, when you build all this out, you’ve got a serious ramp up that needs to happen. So, we really took, to Jim’s point, incremental steps in this Budget. Just to give you guys some color, if you wanted to take the fee to say a 30 percent increase, which is, I think, appropriate for this short-term time frame, it’s about $70,000 more in revenue, assuming activity levels stay the same, from the 25, yeah. Chair Filseth: (Crosstalk) I think we’re going to have that discussion on the 18th. Mr. Keene: But I want you to think about what your recommendation, those of you who have been through this before know, but what your recommendation will be to the Council when we complete the wrap up and we go to the Council for the final. There’s nothing, this would be perfectly appropriate and understandable for your recommendation to include to say, “Well, propose an increase in, let’s just say, the parking permit fees of X amount that adds another $100,000 for the TMA this year, and that’s something we’re recommending adoption. But we want the Council to acknowledge that that’s insufficient and that we would expect that in the course of this Fiscal Year we would have the discussion that could both identify the revenues and the appropriate spending level. We would expect that to be some sort of a priority.” And you could certainly do that as a Committee. Chair Filseth: Council Member Holman. Council Member Holman: So, a few things. I think for us and for the Council that’s not on the Committee to have a clear picture of what we’re doing, where we’re headed, and how we’re making our decisions, I think we need some information that we don’t have. Some breakout of the things that we’ve talked about, like where’s the potential funding coming from, what do some of these funds include and not include. I don’t think I need to repeat those, but if you need more clarity. Also, the, I think Jim, you were right with funding the TMA which I’m certainly not opposed to, but we want to know what the money is going to be spent for. And the other thing is, right now the TMA is only Downtown, but if we’re talking about expanding the TMA expenditures through permit fees, and we’ve got significant California Avenue permit fee increases, but we don’t have a California Avenue TMA, that’s not right. So, if we had a California Avenue and a Downtown TMA, what are the implications of that in terms of staffing? It’s not, you know, everything isn’t lining up exactly as nicely and tidy as we would like to think. So, I think those are questions and concerns. And so, we don’t have information that Council member may as too, like, well, what’ included in the increases. And you told us verbally that at the 25 and 75 percent permit increases, for instance. So, some of that needs to be made known. Jim, you’re right about, I don’t like Budget Amendment Ordinance (BAO’s). I was really gland the other night that Kiely doesn’t either. But we talk about the potential revenues from paid parking, but I also heard in that presentation that we’re going to have expenses related to that and there’s a delay, or a time lag before we see revenues, at least potentially. And then there was like, there was some lack of clarity in the presentation that was given to us from the consultant also about, like, what the maintenance costs were and that sort of stuff. So, if we’re going to come back to the Council in August to fund the paid parking program, I want to know about it now, because even if it’s a loan that’s going to be paid back, it’s still going to come out of this year’s Budget, so I want to know about that. And maybe it’s something that’s just like a backdrop and we say, “Okay, here’s the potential for this, know this when we’re looking at what the final adopted budget is.” So, those kinds of things. We can’t I mean, your point that you made earlier is like, we can’t way like what if this, what if that, but I think if we’re informed, if we’re just informed to know, here’s what the potentialities are, then we know what we’re basing an Adopted Budget on, and where the guesswork is. Right now, there’s too much stuff here that’s, we don’t even know where we’re guessing as a Council. And another thing I would put up here is two other things. One is if there’s a Budget in this fund, it would be nice to know what that, I mean if there’s a balance in this fund, it would be nice to know what that balance is and what we’re drawing from. And the other thing is, it might be, if other Council Members are interested in this, the Stanford Medical Center Fund, if there’s a, just a brief rundown that you might have that you could provide to us. Obviously, not tonight. And then one more thing after this, about where the funds started, what the total is going to be and maybe where that’s spent, because I think over time, especially with new Council Members, we have three new Council Members, where that’s been spent. Some of it we talked about transferring back, because we’ve spent it on things that weren’t necessarily, should have come out of that fund. So, if you have a tally of that that you might provide to us at a future meeting. And then, the last thing is, have to do also with BAO’s, is the various RPP’s, what the revenues and costs are, and again, the Southgate is coming in June, so if it’s coming then we probably have some idea of what the costs and revenues are from that. So, it seems like we ought to include that in here, and I don’t know that it is. Mr. Keene: Let me reduce your anxiety some. Somebody has done this for like, I had Kiely’s job two lifetimes ago. We do have a perfectionist streak in our community, but the Budget is just a snapshot in time at the start of a year, and it’s sort of our best estimates of what we have to spend and what we want to spend it on. We always do know that there will be things that we’re not quite ready to do, and we don’t want to wait all the way till the next Budget year. So, there will be off Budget things, and there will be surprise things that just, we have to deal with. So, I think we should try to get it as right as much as possible, but there may be times you clearly say, “We still don’t have enough information right now, or we don’t have enough clarity to really make the call. We’d be better served to wait till the first quarter,” or whenever it is. So, that’s really why either a BAO or something, those things are appropriate. She hates them because it’s an incredible amount of work for the Staff to have to do and get distracted. Council Member Holman: I hate them because it looks like. Mr. Keene: You hate them for a different reason. Council Member Holman: A different reason, but, and I’m not asking for perfection here, although it may sound like that, but I think if there’s information that, you know, it’s not that hard I wouldn’t think at this point in time, to anticipate what the cost are going to be associated with the Southgate RPP so I don’t know why we wouldn’t… Ms. Nose: So, just a clarification, the costs associated with Southgate, I believe, are included, at least the start-up costs in this Budget. There are some real fine-line base estimates in there. So, nothing like a full-scale program, obviously, since it won’t start until later on. But there are some incremental in there. Chair Filseth: Let me try a shot here. I think that, you know, if you look at something like the Southgate RPPP, I mean, as Director Gitelman ran through the revenues and expense of the existing programs, I mean, they’re all, the sum total of the whole thing is several hundred thousand dollars, and the expenses are slightly more or slightly less than that. It’s, those kinds of numbers are within our ability to manage. You know, sort of asynchronously from the main Budget process. If, instead of a few hundred thousand dollars it was $20 million, I think we’d be looking at it quite a bit different. But, I think, given the magnitude of these things, my guess is that we can probably manage it asynchronously. Council Member Holman: I was just looking at College Terrace, it said $200,000 debit. Ms. Gitelman: Yeah, and the sum total is about $1 million dollars, revenues and expenses. So, it’s not negligible, and also the numbers assume that we’re increasing the employee permit fees commensurate with the garage permit increases, so, because we’re talking about such small numbers. Chair Filseth: Southgate isn’t going to be $1 million dollars. I mean, it’s going to be $75,000. Ms. Gitelman: That’s right. Ms. Nose: And then, one other thing, just offhand, you asked what the fund balance was in the University Ave Parking Fund. If everything was approved for FY ‘18, there’s about $1.2 in unrestricted funding. Now, that’s high compared to the other ones. Cal Ave basically is zero. There’s a loan going to Cal Ave this year of $75,000 from the General Fund just to make sure that fund stays solvent, which is another reason why we’re doing such a significant increase in the Cal Avenue rates, and I will say part of that cost is attributed to, we talked about when we connect all the dots, some pavement, the resurfacing of some of the lots that we’re doing. That’s why Cal Ave’s costs are a little bit higher right now, because we are doing that, I think, $200,000 Capital Improvement. So, for a very small operation, that’s a pretty large draw. Chair Filseth: So, last night the Council directed Staff to come back in the fall, you know, essentially with, I think we phrased it as a series of options and scenarios, or something like that. It was basically a plan for how we’re going to fund a number of transportation initiatives with TMA being a significant one, right. So, I think that’s what Council directed, I think that’s the direction that Council directed last night, right? So, as I think about it, I mean, if we put a half million dollars or a million dollars into this Budget for TMA, and Staff comes back in the fall and says, “We have no way to raise the money.” Then we have no way to do this, right, unless we cut tree trimming or something like that, right. So, we’ll fire up the presses, okay, but we don’t get to do that. We have to ask, angle a miracle. So, I think that’s kind of the way we ought to look at it. Mr. Perez: And that’s an excellent point, because we have a multitude of challenges that we need to address, so I think that’s why it’s good that we’re going through this process, identifying where our challenges are and figure out from there what your options are and how you prioritize these needs that we have. Chair Filseth: Anything else? Do you want to make a Motion? Council Member Fine: I’ll try something. This might not get support. I move that we tentatively approve the Special Revenue Funds, but that we parking lot the University Ave Parking Fund pending just some ideas from Staff about where that TMA funding may come from. And just to put it in context, the figure of 5 percent increase in permit fees is $70,000. That’s helpful. I think that’s the kind of stuff that will help inform the Council about where we want to pull the levers, particularly on the business to actually fund that. Mr. Perez: May I just add, so when you’re making your decision, if you speak in orders of magnitude, I think we can do that within this Budget. If we’re speaking of anything larger than that, it probably would require a lot more work. Council Member Fine: I think it is orders of magnitude. And I don’t mean to parking lot this fund, but this one item does seem like the center component of what we were talking about last night, and I think it’s worth almost doing a mini analysis of what we asked for last night on this one. Chair Filseth: So, say again what you’re proposing. Council Member Fine: So, Special Revenue Funds is tentatively approved, parking lot the University Ave Parking Permit Fund pending some Staff analysis on the potential revenue sources in magnitude about what may fund the TMA. Chair Filseth: University Avenue Parking Permit Fund, so that’s this $2.5 million number? Council Member Fine: Yup. Ms. Gitelman: Can I just make sure I understand. I’m sorry to be thick on this, but I heard the conversation last night, and I just want to make sure that I understand. I think some of us feel very confident about Measure B. It’s just kind of a timing thing, so those revenues can’t be reflected in here. Is your interest in finding some other funding in this fund to pay, you know, a down payment towards that larger expenditure? Council Member Fine: Yes. Ms. Gitelman: Okay, so we kind of look for a down payment we might add to later in the year? Chair Filseth: Are you sure this is what you want to do? Isn’t what you really want to do is to put a negative half million dollars in the parking lot, or something like that? Council Member Fine: If you guys are going to support that, sure. The negative. (Crosstalk). Chair Filseth: I want to make sure we’re moving what you want, because it might pass. Council Member Fine: I mean, sure, I would love to increase this $135 to $480 per the TMA ask. I think the right thing for us to do is to ask for what those sources might look like. Chair Filseth: So, would you rather do that than just put the whole Parking Fund in the parking lot? Council Member Fine: So, then tentatively approve it with the TMA getting the TMA Organization’s ask of $480,000. Chair Filseth: In the parking lot? Council Member Fine: In the parking lot. Chair Filseth: Okay. Is there a second? Council Member Tanaka seconded. MOTION: Council Member Fine moved, seconded by Council Member Tanaka to tentatively approve the Special Revenue Funds Operating Budget, and to add to the parking lot for future discussion an increase in funding for the Transportation Management Association for a total amount of $480,000. Chair Filseth: Do you care to speak to your Motion? Council Member Fine: So, I just think this is one of the issues that we at Council and previous Councils have spoken about over and over and over. This is one of the kick starter years. I think there is measure B funding coming. I think we might get even parking, Downtown paid parking that will fund this, but if we do expect that organization to take off, we ought to fund it, put our money where our mouth is. This budgeting process is one way to do that. Chair Filseth: Care to speak to your second? Council Member Tanaka: Well, I think we talked about the TMA yesterday, so I won’t speak too much. I think it’s important. I think it can have a major impact on Single Occupancy Vehicles (SOV’s). I actually think that al the revenue sources have been exhausted. I talked last night about perhaps naming rights, if a company wanted to sponsor something to get branding and, you know, gets some political points toward helping to solve the problem. So, yeah, I think we should study this more. Chair Filseth: Council Member Holman. Council Member Holman: I think if we, I’m less concerned about if we get more money, we can do more things. I’m more concerned about expenditures that we aren’t anticipating or that we are anticipating but we don’t include in the Budget that require BAO’s. So, I don’t really know that the Motion is necessary. It seems like it’s more like a, a little bit more of a policy thing, you know, pending getting more revenues in. So, that’s my thinking on it. And then the other thing is, I would want with this, I’m sort of tempted to make a Substitute Motion and put the whole thing in the parking lot, because I do want to see, you know, what the anticipated costs are for paid parking and stuff, if we’re going to go that way. I’d like a bigger picture of what we’re looking at here. Council Member Fine: Just a quick comment. I think Council Member Holman’s point is, there is some interest for us to look at these Parking, Transportation Funds and uses in terms of our priorities, right. We’re hearing tonight that the permits are in another section, and that, you know, measure B is out there in a couple of months. I think it’s almost easier for us to consider in terms of that holistic idea of like a transportation section. Just a thought. Ms. Gitelman: Just, if I can add a couple of things. One, on the subject of paid parking, I mean, we did get Council direction, direction from the full Council to come to the Finance Committee for an in-depth discussion of that as a funding source, and to go to the PTC for a discussion about implementation and schedule, and so we do plan to come back to this Committee after the Budget Adoption. I don’t know that we can anticipate that now. The other thing is just to articulate again, I think what Jim was suggesting on this issue of the TMA and the fact that we don’t have the revenues yet, I think he was suggesting that the Committee could forward the Budget without that, but with a message, with a policy recommendation to the full Council, acknowledging that the Budget doesn’t include this, but it’s the number one priority and you expect it to get attention when the measure B revenues start to flow. Council Member Holman: Can I just say, about the paid parking, without picking on it, but it’s because it was a big number, so for me it’s like, I’d just like to know, I’d like there to be some way for us to convey to the Council that when we come back with like, “Hey, we have a balanced Budget or not, that hey also, if we do $2 million to fund whatever it is,’ in this case it’s paid parking because that was a number that was used, “then we’re not going to have a balanced Budget because of a BAO.” I just, those are big dollars and I don’t want us to consider this an absence of those kinds of considerations, whether they’re included in the Budget or not. I think they affect how we look at the bottom line in adopting a Budget. Ms. Nose: Just one note, if I can point you guys to Page 102. I know the text is harder to understand, but I promise some bullets. On Page 102 is a bulleted list of what’s not in this Budget, but hopefully, give you just, I’m not saying this will satisfy everything, but we’ll give you a high-level list of some of the stuff that Staff anticipates coming up over the course of the next two years. I know maybe it’s not in the easiest five-year kind of forecast format, but, hopefully, that will also help give you some of this kind of just general ideas. And know that Staff does see and plans on the horizon to come back to you guys to address all of this. You know, as we’ve all recognized, there’s a lot of moving pieces and so I will fully admit I was extraordinarily gun shy to just assume one thing or another without further direction and discussion with Finance Committee and Council, especially after that Downtown parking discussion that we had. Chair Filseth: So, I’ll just make a comment, and then I’ll call for a vote here, which is, I think we all want to fund TMA. I want to fund TMA. I mean, we’ve committee to the voters of Palo Alto that we’re going to do it, so I think we need to do it. I worry that, you know, it’s on the timeframe it’s on, right, and I worry that we’re sort of trying to second guess ourselves too many ways about stuff we just don’t know enough about yet, right, and I wonder how productive that’s going to be. So, my inclination is, from a procedural perspective, to follow the advice of the City Manager, which I think is consistent with what we decided last night. And so, I’m going to vote against this Motion, but I do want to do TMA, so I think everybody wants to do TMA, we’re just talking about sort of what the right to do it in here is. So, all in favor of the Motion? Motion fails 2-2. MOTION FAILED: 2-2 Filseth, Holman no Chair Filseth: Would you like to try a different version? Council Member Fine: So, I guess it will just be to approve this tentatively, and then per the City Manager’s advice, refer particularly the University Ave Parking Fund to Council for further discussion on the TMA. Is that roughly? Ms. Gitelman: Even in your Budget recommendation to Council, identified the TMA funding as the number one priority, as additional revenues are identified. Council Member Fine: In our Budget recommendation to identify the TMA as a top priority in this area. Chair Filseth: Second. Council Member Holman: I’ll second it if you’ll accept an Amendment which is also to highlight for the Council the list of things not included in this Budget. Council Member Fine: Sure, absolutely. Council Member Holman: Okay. Chair Filseth: Have you got that? MOTION: Council Member Fine moved, seconded by Council Member Holman to tentatively approve the Special Revenue Funds Operating Budget, with the exception of the University Avenue Parking Permit Fund, which will be placed in the parking lot, and to make a priority the identification of potential revenue sources for additional funding for the Transportation Management Association. Chair Filseth: Okay. All in favor? Motion passes 4-0. Thank you very much. MOTION PASSED: 4-0 At this time, the Finance Committee heard Agenda Item Number 2. 2. Police, Operating Budget. Lalo Perez, Chief Financial Officer: Chair Filseth, if I recall correctly in our pre-meeting quick discussion, you wanted to go back to Public Safety after? Chair Filseth: Public Safety is what’s next on the Agenda anyway, or is there something else? Let’s do Public Safety. Kiely Nose, Budget Manager: So, then I’m also wondering, PCE is so small from a General Fund standpoint. Did you guys want to knock through that really quickly, or did you guys have questions on it? I hate to derail. Chair Filseth: I understand. I think we ought to get into Public Safety. Ms. Nose: Okay, understood. Then, we’ll start with our Police Department first. And we have Chief Watson here to go through their department’s Budget. Chair Filseth: Welcome. Ron Watson, Interim Chief of Police: Thank you. Ron Watson, Interim Chief of Police. So, we will be presenting the Police Department’s Budget for FY ‘18, and some of the accomplishments that are listed in the Budget document were the reimplementation of the basic citizen’s academy where we graduated 50 citizens from an eight-week course as of February 2017. We received an 88 percent excellent or good services rating in the National Citizen’s Survey. We also completed or are completing a pilot project to test a limited number of body worn cameras in the patrol division. Some of the initiatives for the upcoming year, we’ll be replacing the 9-1-1 system with Mountain View and Los Altos. We will, hopefully, complete an executive recruitment for a new Police Chief and we will complete and implement a new records management system with our partners in Mountain View and Los Altos. Next year we will implement the body worn camera program, outfitting all of the patrol division with body worn cameras to add to our in-car camera system. Our significant Budget proposals for the upcoming year, the number one item is the addition of a public affairs manager. This position will maintain the department’s comprehensive social media presence with almost 40,000 followers on social media across six platforms, and manage all aspects of community engagement and media relations. A couple of operating requests. We have an increase in funding for the less lethal ammunition necessary to train and qualify officers for the use of a less lethal sage launchers, as part of our increased emphasis on de-escalation techniques and enabling additional alternatives to traditional firearms. We also have tactical medical increases funding to purchase tactical medical supplies necessary to comply with County protocol and effectively respond to mass casualty incidents. Chair Filseth: Let’s see, comments and questions? Council Member Holman. Council Member Holman: So, when I was going through this, I was struck by a couple of things. On Packet Page 333 it talks about the surveyed residents rating Police Department good or excellent. Traffic enforcement services is 60 percent and yet when you look at the Budget summary, I’m sorry, on Packet Page 335, Traffic Services Budget is reduced by 44.5 percent, and traffic services in the Budget summary also on Packet Page, I’m sorry, on the Budget Page 336, also talks about traffic services positions by division, traffic services reduced by 64.35 percent. And so, I’m a little befuddled by that, and yet administration, which I presume includes the communications person, does that include the communications person that you identified? Mr. Watson: It will when you approve it. Council Member Holman: I appreciate an optimistic outlook. Mr. Watson: That’s why we’re here. Council Member Holman: But, that’s an increase of 96.7 percent, again in comparison to traffic services reduced by 44.5 percent by division and by positions it’s reduced by 64.35 percent. So, that’s of serious concern to me, especially since we’re at 60 percent approval in the Citizen’s Survey. James Keene, City Manager: Just before the Acting Chief reports on this, I think it’s important to correct the fact that actually the low score for traffic enforcement services is reflected in the unpopularity of the police giving everybody tickets. I’m just kidding. Ron. Mr. Watson: A bunch of things were there, but I’ll try to answer all of them. So, let me start with the personnel. That’s probably easier. The reduction in traffic percentage in the Budget and personnel is the fact that we don’t have a traffic team currently. So, those personnel were moved out of there and I believe they were lumped into the general patrol division, which is where we carry all of our vacancies. So, the fact that we don’t have a traffic team, Budget appropriately moved them out of the traffic division. So, it’s really just accounting for the fact that we currently don’t have a staffed traffic team. So, that’s why you saw the percentage drop in positions. The increase in the admin positions is actually two things, and when you have such a small admin number, when you change it by two people, it’s a huge change. The first one is, as you indicated, if the public affairs manager position is approved, that would be lumped into the admin section, so that would be one position, changing it, I believe from three to four. The fifth position, or the second position that was put into the admin section, that person is going to be on loan to Human Resources, so for lack of a better place to put the position, it’s being put in admin, so it’s really a place holder. There won’t be any more functionality within the top admin group because of that, but it’s a placeholder position. There will be a lieutenant working in HR next year. Council Member Holman: Can you explain that? An officer working in the HR Department? Mr. Watson: It’s been a combination of work between myself, the City Manager and the Human Resources Director. Human Resources has an increased need for investigations and work around the City and it worked out as kind of a win-win to get some experience for a police manager and also get Human Resources the support work that they need that they are currently spending many more dollars on outsourcing to investigators that don’t work for the City currently. Council Member Holman: Okay, and then the traffic services, because that’s a reduction and you said that’s because they’re lumped into which? Mr. Watson: The fallback category for all position is patrol, so you’ll see the patrol number, I believe, went up fairly dramatically, and that’s because the traffic positions were moved in there, but they’re vacant. Council Member Holman: Patrol is where? Mr. Perez: Field Services. Page 336. Council Member Holman: 336, field services position by division actually goes up by only 19 percent. Mr. Watson: It’s a much larger division. Council Member Holman: Okay, that makes sense. Mr. Watson: And then your question about the survey, I can’t specifically answer what people are referencing, but I will say that there is some delay or lag time in the survey, so it could be that percentage is related to when we did have the traffic team. So, it might be in the next survey it might more impact the fact that we don’t have a traffic team now, or sometimes these surveys are just related to general folks, their traffic and travel around, you know, with traffic. Council Member Holman: So, just based on the communications that we get from the community, it’s lack of traffic enforcement. Mr. Watson: Correct. Council Member Holman: And over time there’s been conversation about, you know, does that have to be sworn officers, blah, blah. So, since we’re at the Budget discussion time here, so what’s the plan for getting more traffic enforcement to raise that number in the Citizen’s Survey, and reduce the number of emails we get as complaints? Mr. Watson: I would love to reduce the emails we get for complaints. Council Member Holman: Reduce the need for a communications person. Mr. Watson: The two aren’t linked together. But the traffic positions are really a function of us being able to hire and retain police officers. It’s not a function of the Budget or having more money or more positions. I can get into some more staffing if you ask a question related to that and expand on this, but in short, I’ll say, we basically need to hire more people and get them trained to get a traffic team. I’ve communicated to the City Manager that we are hoping with the current path for training with folks we have in the Police Academy and are going to be getting out soon, and some laterals we’re looking at hiring, that somewhere about October 1 this year I hope to put a hybrid team back together to do some of the duties of not only the traffic team, but also the Downtown team, which is currently vacant. So, this team will be more of a responsive team to whatever the needs are at the time. It could be traffic enforcement one day, another day they could be working Downtown, they could be working on issues with the unhoused community that we have here, it could be crime trends or some major investigation that detectives have. But this team, and we’re hoping to put four people on the team, will start addressing all of those things again. It has seriously handicapped us in the last year or two; basically we just have a barebones patrol division. It’s harder to react to situations. So, my hope is by October 1 we can get back to some of those things and reduce those emails for you. Council Member Holman: And so, one thing that you probably considered, but sharing traffic enforcement with other cities. We do some other shared resources. So, could we look at Menlo Park, Mountain View, whatever, sharing some police forces to get more traffic enforcement? That’s one question, and the other question is, it’s not exactly a Budget question, it’s a curiosity question because it comes up, you and I, Jim, have had this conversation about getting police officers’ feet on the street. So, I don’t know if that would be, what you would think about it, but that’s a curiosity question, not really a budget question. But, maybe it depends on who you hire and what your plan is. Mr. Watson: I think sharing services in terms of traffic is something worthy of discussion. It has some complications. Right now, we have nothing to share with them. Mr. Keene: If we can’t do what we want, it’s very hard to share. Council Member Holman: I’m saying maybe they could share with us, in exchange for something else. Mr. Watson: That’s not really sharing though, but I totally get your point. Council Member Holman: We share funds with them and they share Staff with us, that’s sharing. Mr. Watson: I think the other thing with that is, we have, when we’ve done endeavors like that in the past, there’s some reluctance on the part of the City Attorney’s Office to be doing routine work outside the City, in terms of liability. Certainly, when we respond to mutual aid requests we’re covered by our insurance and various insurance stuff, but it’s harder when it’s a routine matter. We’ve had to enter into specific agreements, like when we helped with Super Bowl, but you know, that’s a significant event. Day-to-day traffic is harder. I do know other agencies in the County do it. I saw a bunch of cops in Morgan Hill last month doing that very thing. It’s something we could explore again with the Attorney’s Office, once we have traffic folks to share. We’d love to do it. They love to do different stuff and rotating around cities, you kind of impact a city pretty heavily one day, and then you move on to another one, but there are a few issues with that. And then as for folks on foot, I certainly hope recently that you have seen that, because the City Manager has made it clear to me that he’d like to see more cops Downtown, and it’s one of the directives that I’ve given to our Patrol Captain, Andrew Bender, who is here, and that’s occurring. There are folks getting assigned Downtown every day now, and hopefully, they’re getting out of their cars and you’ll see them on foot more. And, again, October 1, when we get the team back to be responsive to different things, that group, part of their duties on a daily basis will be to be Downtown on the bikes and on foot again. Council Member Holman: Haven’t noticed it yet, but look forward to it. But, great presence at the parade is always, much appreciate that help. Mr. Watson: I will pass the word. Chair Filseth: Council Member Fine. Council Member Fine: Thank you for coming, Chief. I’ve actually seen some of the officers Downtown, and appreciate it. A few broad questions, and then getting more specifically along Council Member Holman’s points. So, how many vacancies are in the Department now, and comparatively, competitively, why are those here in Palo Alto? Just taking a brief look at Council Member Tanaka’s analysis, as you may have seen, we’re in the top tier or top third, so I’m just wondering what’s kind of driving that? Mr. Watson: In terms of staffing, so I’ll go over some general numbers and then get into the vacancies, but the Department has 155 FTE’s. Of those, 92 are sworn positions. The other 63 are non-sworn positions. Currently, we have seven vacancies, including someone who is leaving next month. We have nine people in the Police Academy. We have one person in field training and we have four people who are injured, which means we have 21 people who are not out on the street working today. Of the 92 positions, that’s 23 percent of the Police Department that is not out on the street right now. These levels have been somewhat consistent in the last few years. I’d say we’ve probably hovered around the 15 to 20 figure in terms of folks who aren’t on the street. One of the difficulties we have is, while hiring lately, because of the nine in the Academy has been good, we also have twelve people who are either eligible to retire today or in the next 15 months, and I heard today that we may have a couple folks in backgrounds at other agencies. You talked a little bit, I guess, about the difficulty with hiring or keeping people or the competitive factor. There’s a lot that goes into that. I think there’s been a sea change since 28 years ago when I started here. The days of seeing an officer work for the same agency for decades is probably behind us. After five years, sometimes they look around at other things. We’re kind of what we would say is a mid-sized agency. You know, we’re certainly bigger than places like Los Altos, and we’re certainly smaller than places like Santa Clara and San Jose. Some of the officers we’ve seen recently leave, they’ll go look at, now that San Jose has brought some of their pay stuff back, they’ll look at San Jose for other opportunities. Palo Alto doesn’t have a helicopter unit, we don’t have a mounted unit, we don’t have some of the things they have. If that’s what a young officer is looking for, they’ll often explore that there. Some people like working in a mid-sized agency like ours, some like working in a small place like Los Altos. Certainly the salary and benefit packages are part of it. I think, based on the last contract that was put through, I don’t know exactly where we are today. My sense is we’re certainly somewhere in the middle, now that some of those raises have kicked in. I think one of the difficulties with surveys is, two people can take a survey and one can put us in the bottom third and one can put us in the top third, depending on how they look at it. But I believe we’re somewhere in the middle, so I don’t think that’s a detractor at this point in terms of salary and benefits. The other thing is the desire to go into law enforcement these days is not what it used to be. With some of the incidents that have happened around the country, there’s a lot of people who just don’t want to be police officers anymore. With the robust economy right now in the private sector, it’s difficult for us to hire folks. Just as an example of the current climate, it was a couple of months ago, but there was a recruit in one of the local academies who, like halfway through, just decided one day they don’t want to be in law enforcement anymore, based on events in Ferguson and New York, they just decided it wasn’t for them. This was someone who was hired by another agency, being paid good money and good benefits, and decided halfway through, I just don’t want to do this anymore and they quit the academy. So, there’s a lot that goes into it, and I could probably talk for another hour, but we’re doing that. I do know there’s an effort right now, and we’re working with HR and the City Manager’s Office to reinstitute an incentive program for hiring and attracting new officers and getting our folks to go out and recruit folks, because our folks are our best recruiters. We did some surveys and more than half of the people who work for us knew someone who worked for the department before they got hired here. So, we want to encourage and incentivize them to go out and do it, and I hope that program is going to come on board here soon and give us some more tools to get people to come here. Because the more people that look here, the more people who will ultimately get hired here, but hiring has been a tough thing in recent years. Mr. Keene: If I just might add a more, in the overlay of the general challenge that we all have in the region, really, which is the nature of families and family income, I mean double income families, both working and kids and the challenges, the cost of housing and the length of commutes, really shrinks our ability to draw folks typically from outside the region is tough, whether it’s in police or almost anything else. And that means somebody’s got to have a convenient enough way to get to work or to be able to sort of afford to live close enough to work, so that’s another exacerbating factor. Council Member Fine: Thank you. One more question. So, some of these traffic services positions are being transferred to patrol and field or potentially moved into the hybrid unit later this year. Are those folks doing the same level of traffic enforcement as they would if they were in a traffic enforcement role fulltime? Mr. Watson: When I say, the positions are being transferred into patrol, they’re vacant. They’re just being housed in patrol budget wise. They’re just vacancies. Council Member Fine: Okay, so then just a last comment to Council Member Holman’s point, looking at some of the key performance indicators and some of the Budget requests, I don’t see much alignment there, right. I’m seeing things like percent of urgent calls, emergencies within ten minutes, emergencies within six minutes. Those are down. Those are down. That may be understandable. It may be acceptable to our City, but I don’t see a measure so much like, the community doesn’t feel like we’re doing enough in terms of communications. And so, I think there does need to be a bit of a link between those different proposals and the Key Performance Indicators (KPI’s) you guys are measuring. That would be helpful just going forward. I don’t think there’s any red flag for me on it right now, but just a comment. Chair Filseth: Council Member Tanaka. Council Member Tanaka: So, yeah, thank you for your work and your team’s work. So, on the Budget Proposal, the public affairs, I have to agree with Council Member Fine in regard to communication. I can’t see how that’s justified to have basically a marketing person marketing the police. I think if we really don’t need a community service officer, we shouldn’t have that position, and I can’t see why we would add a social medial person to the police department. To me that doesn’t help drive the KPI’s. So, I cannot support that. Mr. Watson: If I could make a small presentation on the Public Affairs Manager, I think it might be helpful, as you guys decide here. (Crosstalk). Council Member Tanaka: The second thing is, you talked about how, I guess Palo Alto is in the middle, and if you take the budget and divide it by the number of employees in the department compared to, let’s say Mountain View, Los Altos and Menlo Park, it’s the highest, so I guess maybe I’d like to understand your perspective a little bit on that. Mr. Keene: So, first of all, are you looking at the summary chart that you prepared. Council Member Tanaka: I did, yeah. It’s basically just looking at, the calculations are pretty simple. Basically, taking the total budget and dividing it by the number of employees in the department. Mr. Keene: Yeah, so is it the first chart? Council Member Tanaka: No, it’s the second chart. Mr. Keene: The police Budget per employee? Okay. Mr. Watson: I’m not sure what the Police Budget per employee references in terms to what the officers are getting paid in terms of salary and benefits. I’m not sure how that correlates. I mean, when I look at it I look at how much they actually get paid and what their benefits cost, and those things are worked out in negotiations. I’m not sure it’s a direct correlation to apply it towards the Budget. There are a lot of things in our Budget that have nothing to do with how much an officer gets paid in salary or benefits. There are services that we provide as a Police Agency that many others don’t. Council Member Tanaka: Actually, I agree with you on that, because I was looking at that too. So, the two line-items are pretty significant on the budget that contribute to the total expense. One is the overtime, another is the pensions. So, the pension is at $7.3 million, it’s going up by 13 percent, and the overtime is also going up by 13 percent. So, I agree with you, right. As the pensions get larger and larger, I think you mentioned, how many people are retiring? Mr. Watson: There’s twelve that are eligible now or in the next 18 months. Council Member Tanaka: That would mean that would be more and more pensions, right, being paid versus salary? Mr. Watson: Yeah. I mean, it’s a roving number that PERS uses. They anticipate when folks are going to retire, so hopefully, that’s built in and it’s not, those twelve aren’t going to cause an increase. Council Member Tanaka: How old do you have to be to retire now, for Police? Mr. Watson: Minimum age of 50. Council Member Tanaka: 50, okay. So, basically, how many people – what’s the demographics of the department right now in terms of people’s ages. Do we know what the median is? Mr. Watson: I don’t know what the median is right now. I’ve seen some numbers in the past where it was in the mid 30’s. We do have a lot of young folks that we’ve hired in recent years and will be hiring. A lot of times we talk about it in terms of half the department has five years or less. Council Member Tanaka: Okay, so when someone hits 50 how much of their salary do they get? Mr. Watson: It depends on how many years of service they have. It’s 3 percent per year at age 50. Mr. Perez: They’re capped out at 90 percent though. Mr. Watson: It might help if I list a couple of things that are in our budget that aren’t in most Police Departments, and it does add… Council Member Tanaka: That’s okay. I really want to focus on the pensions here. So, why do you think the pensions went up 13 percent? Ms. Nose: I think that’s probably a me question. Mr. Keene: Yeah, go ahead. Ms. Nose: I was just saying, I have a feeling that’s going to be a me question. Pension is a function of salary, so it’s a rate on salary, so as salary increases it’ll correspondingly go up. But also, the pension rate has gone up, like how PERS has given us, so keep in mind that those rates are in the front and you can look. We are under 50 percent, I want to say, for the City side, but now by much, so in FY18 the Safety pension rate is 49.7 percent. Mr. Keene: So, what we have in here is the employer’s share of the pension costs is basically 49 percent of salary. And that’s probably about a 4 percent increase from the prior year? Ms. Nose: Right, so the prior year was 45.4. Mr. Keene: So, the rate changed by 4 percent and then to the extent that you add salary increases that compounds it. Ms. Nose: Now keep in mind, just to be fully transparent, those are gross numbers. Per our recently negotiated MOU’s, by the time the contract is over for our sworn officers, which I think ends June of next year, they’ll be picking up 3 percent of that 49 percent. Council Member Tanaka: Okay, so I just looked at the pensions as a percentage of the budget. It’s about 17 percent, a little over 17 percent of the Budget and, whereas look at another random department like, say, Libraries. Libraries is at 12 percent. So, it seems like the pensions are much higher here than other departments, one random sample. And then, I guess another question for Staff is, Chair Filseth talked about, I think at the first or second meeting, about unfunded liabilities in terms of pensions and OPEB, so is that included in here at all? Ms. Nose: So, just to take a step back in our pension plan, we have two plans, Miscellaneous and Safety and the funding rates for those two are different. So, when you’re comparing say Library to the Police Department, you’re looking basically at all Safety employees versus all Miscellaneous employees, so, of course, you’ll see a pretty big change. Council Member Tanaka: Yeah, it’s 2x, a 2x difference. Ms. Nose: Right, so if you want to know what the Miscellaneous rate is, it’s 30 percent, so it’s 30.2 percent is what you’re seeing in the Library Department compared to that 49.7 percent in the Police Department. So, I would expect to see that difference. And I think your second question was about the unfunded liability, and the Safety Plan is the same as the miscellaneous plan, when we were talking about it on Monday, where we do have a contribution to the Unfunded Annual Liability (UAL) and assuming everything stayed equal and perfect and pristine and didn’t move from today’s assumptions, in X number of years you’d pay it off. However, just like Miscellaneous, Safety does also have that additional component that, should demographics change, and salaries not hit the same growth rates, yup, should the return on investments change. All of those tons of actuarial variables alter, of course, Safety will see that same shift and same change in the UAL. Chair Filseth: Can I try to answer that question too. I think the answer to your question is, the unfunded liability is that in here or not? And the answer is, part of it is and part of it is not. Okay, the part that is now, the City has two basic kinds of financial statements, like everybody else, an operating income statement and a balance sheet, which is called net positions. Part of the expense shows up in the operating statement, but part of it does not and simply gets added onto the UAL in the balance sheet, the statement of net position. Council Member Tanaka: Okay. Well, I think it would maybe, kind of in the spirit of transparency, I actually think it would be good to have the unfunded liabilities listed somewhere on the Budget, so that we can better understand what is this Department costing us? Because when I looked at the, first of all, $7.3 is a big number, this number of $7.3 million is the budget of some departments in Palo Alto, and the other thing is not only is it going up 13 percent this year, but it went from $5.5 million actuals, right, I guess to about $7.3 which is, what, a 32, 33 percent increase. So, I guess thing that concerns me and it’s a big number and it’s also going up a lot, and yet there’s also a portion that’s not even being accounted for. So, that’s what concerns me about this, and so I would, I think we should keep an eye on this. In fact, I think we should add a line item here to account for the unfunded healthcare and pension liability, so we have a better understanding about what is this Department really costing us, and it sounds like there are quite a few folks who are eligible to retire and maybe more so soon, and this is going to add to the number, so I think, I mean it’s true, not everyone is getting a lot of money because of the fact that the pensions are growing quite fast, much faster than the Budget itself. So, that’s my recommendation there, is that we first of all, don’t approve the public affairs manager and second of all, the pensions, I think we need to have that fully listed in terms of what it’s truly costing us. The third thing is, overtime, and so maybe can the Acting Chief talk about why is the overtime going up 13 percent? Mr. Watson: You’re talking about the $200,000 increase in the Budget? That’s simply a function of the salary increases that were contained in the last contract for the Police Officer Association (POA) members. You know, overtime is directly driven by salary, so if salary goes up 10 percent, overtime is going to go up 10 percent. I think the raises in the last contract were somewhere in the order of 15 or 16 percent, so that’s a direct increase to the salary. It’s not that more overtime is being used. It’s just that every hour of overtime will cost more, because every base hour costs more. Council Member Tanaka: Wait, salaries went up 13 percent? Mr. Watson: It’s like 15 or 16 over a three-year period. Mr. Keene: Right, but he’s just referring to the year-over-year percentage from ’17 to ’18, so… Mr. Watson: And that’s the $200,000, right? Mr. Keene: Yeah. Mr. Watson: That $200,000 is being put in by Budget just to account for salaries went up so the overtime is going to go up. Council Member Tanaka: Salaries went up by 6.1 percent and then overtime is going up by 13.3 percent. Mr. Keene: So, the other thing we always have to do, particularly in Public Safety, right Lalo, is that we tend to have higher vacancies like we said, so we end up having to backfill with overtime. So, we kind of need to, and I don’t know to what extent we do that during this session at all. What you almost have to do in a year-to-year comparison is actually take the total salary cost, the actual expenditures and the total overtime and add them together and compare those, because you could have a situation where you’re spending less in salary because you’ve got a lot of vacancies, but you’ve got to spend more overtime to backfill that. Now, obviously, you’re spending time and a half for what costs you otherwise, but that gives you a more accurate comparison of what is happening year-to-year. Mr. Watson: I also think that, if you’re talking about salaries are going up 6.2 in the current Budget proposal, the overtime is accounting for the fact that there was no adjustment made in the past couple of years. We’re catching up for the entire contract, not just what’s increasing this year. There was no adjustment to overtime last year for the increases last year. Council Member Tanaka: Now, isn’t overtime really trying to account for like unpredictable events or poor scheduling? Isn’t that the idea? I mean, it’s not supposed to be a bonus per se, right, it’s supposed to be something that we can’t account for so we need to have this buffer, right? Or is this being used as a bonus system? Mr. Watson: Actually, we do a really good job in the Police Department with overtime. If you look at our total Budget, 96 percent of everything we do in the Police Department is contained within the regular salary and benefits, not the overtime. Four percent of the Budget is overtime, and that’s largely for things that are beyond our control. Dozens of special events each year, including Stanford football games and other large-scale events at Stanford, major crimes such as homicides, rapes and robberies. Council Member Tanaka: Okay, I think for special events, that’s one thing and for like homicides or something serious like that, that’s another thing, but, I mean, like special events, in general we should be able to schedule, we should be able to plan for that. I think for homicides, you can’t plan for that, right. You can’t plan for a train wreck. You can’t plan for emergencies, I get that completely. But when I look at overtime per employee, it works out to be about $11,000 per employee, which strikes me as a lot. Mr. Watson: Well, again, 4 percent of our Budget is the overtime and that accounts for all the things that you can’t schedule for. You can’t plan on having twenty people work a football game within your normal schedule when you may have eight people on the street. These are folks that have to come into work on their days off. Some of those events… Council Member Tanaka: Do you get cost recovery on that? Mr. Watson: Yeah, I was just going to say, some of the special events we get full cost recovery on. Others we get 50 percent, like Stanford football games. So, within the Budget of $1.7 million, some of that is actually reimbursed. The cost is $1.7, but the true cost to the City is less than that, because of reimbursement. And the other thing is, you know, a part of this is the backfill for vacancies and especially in our dispatch center, when you’re short a dispatcher because you have a vacancy, it’s a one for one proposition. Council Member Tanaka: Do we share our dispatch with other cities? Mr. Watson: We do not. Council Member Tanaka: We do not. I think dispatching, I heard I think like Milpitas and Campbell and a few other cities got together to share dispatching. Have we looked at that before as well, just trying to save costs? Like having more centralized dispatching? Mr. Watson: I’m not aware that they are sharing dispatching, but Carlie Cullen here, who manages the Dispatch Center can certainly tell me if they are. Charles Cullen, Technical Services Director: They’re not. They are sharing technology, similar to what we’re doing with Los Altos and Mountain View. Mr. Keene: Your mic. You’re a communications guy and technology guy, use the mic. As a matter of fact, we gave you $10,000 for mics last year. Mr. Cullen: That’s right. Thank you. For those who don’t know me, I’m Charlie Cullen. I’m the Technical Services Director for the Police Department. We do share technology and I’ve tried to leverage technology costs with Mountain View and Los Altos, and at some point, hopefully, we can reduce some staffing, but we’re not there yet. We purchased a computer-aided dispatch center with the other two cities, or a computer-aided dispatch system with the other two cities. We’re about to implement a 9-1-1 system shared over network with the other two cities, and we’ll be sharing a radio system. And that may give us the opportunity to do some of the staffing, share some staffing at a future point. But right now, there are no cities in Santa Clara County that have physically consolidated a dispatch center. It’s a fairly complicated process. Council Member Tanaka: Thank you. So, anyways, my last point here is just overtime. To me, I still don’t understand why it should be more than what we do in salary, so I think we should keep it the same as salary, not have it double. Thank you. Chair Filseth: Thank you and thanks for coming Chief Watson. I thank you spending your night here with us tonight. I had a couple of questions. One is, if we’re going to do hybrid traffic and more people Downtown and stuff like that, given that headcount is flat, what are we going to do less of? Mr. Watson: When I suggested the October 1 date, that aligns with, we have five folks that are coming out of the Academy in May, so they’re going to be trained and they will add to the available staffing in the field. Chair Filseth: And that’s in your 155? Mr. Watson: Correct. You know, while we have a bunch of folks that are in the Police Academy and in training, they don’t count as essentially working folks right now, but they will by October, so that’s our hope, to get that back. And then at some point later on, when we get closer to full staffing, we’ll hopefully get back to having an actual dedicated traffic team and a dedicated downtown team. But, the first step is going to try to put one team together to do multidirectional enforcement and activities. So, we can address some of the concerns of all these different groups. Chair Filseth: Okay, so we’re not giving up anything basically. That’s always nice. Let’s see, so there’s a line in here for $1.9 million of animal services. Your favorite department I’m sure. How much of that is the animal shelter? Because some of it animal control and stuff like that too, right? Mr. Watson: I’m going to pass that to the experts in OMB. Mr. Keene: So, animal services is a good example of one of the things when we’re comparing to other Police Departments, apples-to-apples, as a matter of fact, we provide animal services for Los Altos, so we actually have their costs imbedded in ours. Chair Filseth: I understand. One of the things that’s increased quite a bit this year is contract services. It looks like it’s up almost $3 million. There must be something behind that. Mr. Watson: I believe a large part of that is Track Watch. Track Watch had never been fully budgeted in prior years, and this year it is. Chair Filseth: Of course, and I wanted to ask you folks sort of the other, I mean, sort of the whole group there is, that makes sense. Baked in here is a reduction of half a million dollars for Track Watch. Are we confident that we’re really going to be able to do that? Mr. Keene: So, you’re speaking to, I mean, in the 2018 number? Chair Filseth: It looks to me like there’s a half million dollars for, as part of the adjustments. It’s a reduction of $460,000 for Track Watch. Mr. Watson: You’re correct. The original Budget for next year was $1.7 million. The current Budget that we would like to adopt is $1.24 million. And the plan for the year is the locations and times of guard coverage will be slowly modified based on historical trends and the on-boarding of the intrusion detection system, which is the camera program. The Track Watch public, or Project Safety Net working group, which includes the City Manager, myself and multiple other departments, we meet twice a month and review all things related to the Track Watch guards, the means restriction fencing and the on-boarding of the new Intrusion Detection System (IDS). No modifications will take place to the monitors without the City Manager’s approval, but we believe, as we on board the camera systems and we look at the historical needs, that we will be able to scale those efforts back, and that’s why we proposed the roughly $500,000 reduction in that. We believe it’s attainable. Chair Filseth: I want to make sure I understand this. That makes the assumption that there are going to start being periods of time when there is not a guard at every crossing. Is that correct? Mr. Keene: Let me answer it this way. We’ve been providing some (crosstalk) complete coverage, let’s say even in the most part in areas where trains aren’t running, and we have looked at some locations that, both based on history and, I mean, we think warrant being scaled back. This isn’t like across the board where you’re doing it. It would be on a spot basis. And so, I think that’s legitimate. Beyond ’18, we do actually anticipate not having Track Watch guards, so this year is a transition year. Maybe when Rob is up here too, we’ll talk about this more, or Ken Dueker in Office of Emergency Services (OES). Our overall costs, I would remind you, are going to go up, though, because we are going to be making a Capital Investment in the camera system and we’ll have to do the remote monitoring, you know, at the Data Center of the cameras. And one of the things I do think it would be worthwhile for you guys to explain, just since we’re on this, so that we’re really clear about that difference, is what it is the guards actually do in comparison to what will happen with camera monitoring. Mr. Watson: You know, certainly there’s no fool-proof system anywhere, but the guards are very limited, especially at night. It is so dark out there that 50 or 100 feet away, they can’t see anything, whereas, with the technology there will be some advantages on greater distances, and you know, we have four miles of rail that runs through town, and even though these folks are at specific locations, some of them more riskier than others, their coverage is very limited just by the environment. Technology is going to help us in some areas, and there may be areas where it’s not as effective, and I think the reason we’re using the slow approach during this year is to really be strategic about where and when we reduce that coverage and in the most risky locations, we will still have multiple layers of coverage between cameras and monitors this year. Mr. Keene: I think one of the other things just worth stating is, it would be a misperception to think that the guards actually intercede in the right-of-way. They call our Police in the same way that someone monitoring the system would call the Police, so we see no difference there, in the response time to that, and the potential for obviously expanding coverage and greater visibility. What they do provide is, from a distance, a visible sign that there is somebody there and that’s one of the issues that we want to sort of climatize ourselves to, and that’s why the transition is planned. Chair Filseth: I want to take on the communications manager for a second here too. So, as I understand, I read the Packet. It looks like you want somebody who, among other things, they are going to do websites and posting of information and notices and stuff like that. Do we have a lot of people doing that Citywide? Is that really a fulltime job? Are there other people doing that Citywide that could share. Mr. Keene: You might notice that this really is the only position that I included in the General Fund for the budget and we had lots of other requests. We also told other people not to bring something forward and, of course, Police offered something up. I think it would be good if the Committee would at least hear their argument and their presentation. You are the surrogate for the Council on this. I listened to it. Chair Filseth: I’m sold. I’d like to look at it. Mr. Keene: Okay, thanks. Then you make your decision more fully informed. Chair Filseth: Question? Council Member Holman: As a part of the presentation that you make, I’d really like to hear, because I get Next Door notifications from the Police Department about things now, so who does that and how does the play into what your proposal is. If we could get that all at once. Mr. Watson: Over the past five years, Zach Perron has built the Police Department’s public information and social medial presence into a national model for open government, public outreach and transparency. Our Police Department is regarded as a leader in barrier law enforcement in terms of public communication and it’s a model others follow around the country. The Police Department Public Affairs Manager position has become a critical position within the Police Department and the City, not only on day-to-day routine matters, but high-profile critical incidents in the field as well as one of the lead folks in the emergency operations center any time we have a major incident or a natural disaster. The position handles day-to-day email increase from citizens, the Council and other City Staff. The position handles all press releases, press inquiries and press interviews. The position handles all law enforcement social medial communications over various platforms, including Next Door with the tens of thousands of followers that the Police Department has. The position also manages highly popular programs such as the Citizens’ Academy and other public outreach efforts. Having a professional single point of contract building relationships with the press has also allowed us to manage high liability and heavily scrutinized incidents, such as the officer-involved shooting last year, as well as the Downtown manhunt we had several months ago that involved 30 officer from six agencies with two Police K-9s, a Police helicopter and multiple news agencies in town. The Palo Alto Police Department distributes more press releases than most other agencies in the County and at a higher rate than even the highest agency in the County, being San Jose, who has more than a million residents. The Police Department generates about 60 percent of the social media and public outreach activity for the entire City of Palo Alto. We have more than 40,000 followers over an array of social media platforms. We have the ability to instantaneously reach out to about 13,000 of the 27,000 households in the City with timely information. The Police Department’s bidirectional or two-way communication over social media is a huge benefit to not only the citizens, but also the Police Department and the City. We often receive tips, inquiries and sometimes during major incidents, such as the Downtown manhunt, witness or suspect information that helps us successfully resolve these situations. In recent Budget years, we’ve tried on several occasions to take this program to the new level by hiring a permanent civilian professional. This year the promotion and eminent reassignment of Zach Perron has made this a critical request at a critical time coming before the Committee, and we hope to continue to build on the successful model that we have over the past five years. If we don’t fund the Public Affairs Manager this year, we will likely see a 75 to 85 percent reduction in press releases. Press releases would only be done for major crimes. Press releases would require a supervisor or watch commander to come in from the field that would impact staffing on the street. The quality and accuracy of press releases would suffer. Routine press inquiries would also be handled by field personnel, who would have to come in to research calls, look up reports and get back to the press. That would impact staffing on the street. We would have to all but suspend our presence on social media, including Next Door, Facebook, Twitter and Nixle and not be able to reach out to those tens of thousands of followers that we’ve developed. Our ability to disseminate timely and accurate information during major incidents or natural disasters would be severely limited. During major incidents, our dispatch center and the command post personnel would be overloaded with calls from citizens and press inquiries, interfering with the operations in the field. Our bidirectional social media communications with citizens would end. Our ability to respond to daily email increase from citizens, other Staff and Council would be delayed. Our long-standing reputation as being open, transparent and forthcoming would suffer. Our ability to comply with best practices of the President’s 21st Century Policing Initiative would be diminished. The City’s overall public outreach would drop by approximately 60 percent. We would have difficulties continuing with the Citizens’ Academy and other public outreach programs and there would also, as an alternative, if we continue to try to Staff it under its current model, there would be a significant increase in cost to the City. The Public Affairs Manager position will cost about $191,000 with salary and benefits. If we were to continue the past model and attempt to Staff this with a lieutenant and rotate through this position, the cost would be about $347,000, or about $155,000 more than just staffing it with the new civilian position. It’s a critical time. This is the first time that the City Manager and OMB have endorsed this position in current years, and I think they truly understand the need that is before us this year. And as the City Manager said, it is the only position he has allowed to go forward in the General Fund this year. It’s a critical time to take a strong look at this position. Chair Filseth: Thank you. Mr. Keene: Can I just add to that, because I think there’s some, I’ll say nuances that maybe you miss. I mean, on the one hand, probably it sounded like the end of the Western world as we know it, but when Ron was going through his list. Mr. Watson: Zach had that list, but I didn’t say it. Mr. Keene: And it’s probably not that bad. Chair Filseth: I figured he was coming to it. Mr. Keene: But, you know, and he’s right, they’ve brought this forward at least three years, and I’ve rejected it and I’ve said, “Zach is so good at this, he needs to keep doing it.” But this is part of the problem is that I think if we step back and take the big picture, if we think about Police and community relations in our society, even in a town like Palo Alto, how we engage and relate requires, I would like to say, you would want it to be an easy ubiquitous skill, but it actually requires a special skill and in the case of Zach, I mean in particular, I think he was able to develop and approach, a constancy, a voice even, that was uniform and the same, and artful. Now, the difficulty here is if this does get approved and we have to go out and hire somebody, we’ve really got to hire a damned good person to do this. This is not like just any bit of work in order to get, you don’t get all of these followers just because you have people. It’s a fact, a sense of a kind of, not only a trusted voice, an approach and familiar voice. And I don’t know to how much you’ve ever followed some of their tweets. I mean, they’re really good. Some of them are really funny when they need to be funny. One of my favorites, of course, always was one of “officer so and so is going to be doing traffic enforcement on Embarcadero at 4:00 PM, and then a tween at 5:00 PM was somebody pulled over with their car and officer so and so giving them a ticket. Obviously, they’re not following us on twitter.” I think there really is kind of great value that does fit in with the kind of high-touch work that’s in Palo Alto, and I think that it’s hard to distribute that across a whole bunch of different people. And I’m not being critical, but I would even ask back in the past at times when the Department would assign public information officer roles to different people, you will find there were some people who did that well, and you will find some other people who like botched the report, maybe sometimes in a very serious situation. So, I do think this is not just a kind of just a nice to have sort of thing, or, I’m sorry sometimes, it is easy for people, for us all to succumb to, “Oh, let’s stick to the absolute basics. This is a fluffy sort of thing.” I don’t think that’s the case. So, I do think you just need to weight that. You could make the decision however you want to make it, and the world is not going to come to an end, but again, I don’t think it’s also something that is – I think you will see a difference between what we’ve experience and what it would be without this approach. Chair Filseth: I’m keenly aware that it’s going to cost less than Zach. I guess I was more wondering, is there opportunity to leverage this person elsewhere in the City. I mean, to sort of globally optimize as opposed, because is it really a fulltime job. That’s where I was going. I assume it’s not a sworn position? Mr. Watson: No, and that’s one of the benefits and why it would save $155,000 is that person would end up in the Miscellaneous system, which makes the retirement contributions less. They would be in the new tier, because it would be a new hire. It really is a cheaper way to do it. It was a great startup way to do it, to put Zach in there, but after five years and him getting promoted, obviously, he has to move on. This is a more cost-effective way to do it. Why not get a professional who is, hopefully, be in there for a long time and do a great job, as the City Manager says? Chair Filseth: I’m going to sort of loop back a little bit to where Council Member Tanaka was, because, here’s the problem we’ve got. Police Department – so the City’s General Fund revenues grow 5 or 6 percent a year, 4, 5, 6 percent a year. This year they’re projected to grow 6 percent a year, right. Public Safety, which is nearly half the General Fund, is going to grow, you folks are going to grow expenses to 11 percent a year. Fire is coming after you, wants to grow 10 percent a year. You know, that’s half the City and if you folks are growing 10 or 11 percent a year, then the rest of the City, if the average is 8 percent a year, which is higher than our revenues are growing, which is why we’re going to have to dip into the reserves if we go that way, that means the rest of the City is growing substantially less than that. In fact, I think the Planning Department is coming in front of us. We’re going to give Hillary a gold star, because I think she’s actually shrinking 3 percent or something like that. But the problem is if City revenues are growing at 6 percent and half the expenses are growing 10 or 11 percent, it’s not going to be sustainable in the long run. And I realize that you folks actually your expenses grew a little more slowly than that in the previous couple of years, so you’re not doing 11 percent a year at this point. But to Council Member’s Tanaka’s point, if you go look at Staff expenses in town and this is especially true in Public Safety, the pension and OPEB component is actually growing substantially faster than 11 percent. I mean, it’s growing 15 percent a year or something like that, and that’s not exclusive of the fact that CalPERS doesn’t calculate the normal cost correctly. Actually, the true normal cost is quite a bit higher than CalPERS gives us, and that means the real one is much bigger. So, CalPERS is going to cut their investment returns assumptions from 7.5 to 7 percent over the next three years, right, and that’s going to produce a big bump in pension and OPEB expense across the City, but especially in Public Safety. And going to 7 percent is not enough, okay. They’re going to have to cut it again a few years down the line from 7 percent to 6.5 or maybe 6 percent. So, the numbers that Council Member Tanaka is talking about are going to be much, much larger. And the expense line for Public Safety is going to be growing not 11 percent a year, but 15 percent a year, 20 percent a year or something like that. So, we’re going to need to figure out how to rationalize that because we just don’t have the money for it. We just don’t have it coming in. Your expenses are growing. Our expenses are growing faster than our revenue, so we’ve got to figure out how to slow that down somehow, and I think that’s kind of where Council Member Tanaka was going, you know, why he is sort of trying to compare us to other cities and so forth. And you yourself said it, if you retire at the age of 51, you know, with 20 years of service and you have a $20,000 a year pension and you live to the age of 90, or your wife does, that 40 years, that’s $8 million. Now, I don’t know that individual. Everybody says that a guy and I’m sure he is, but $8 million. That’s a lot of money. So, we’ve got to figure out how to get a lot smarter about this. And I think that’s where Council Member Tanaka is going. If you folks were growing expenses 6 percent a year as opposed to 11 percent a year, then you’d be going from $38.1 million last year, not to $48.3 this year, but to $40.4 this year, which is a gap of $1.9 million. That’s if you were keeping track of City revenue growth with expense growth. So, I think this can take a lot of people putting their heads together to try to figure out how to resolve it. Let me ask a couple more questions. Mr. Watson: Can I share a couple thoughts? Chair Filseth: Yes please. Mr. Watson: I’m not going to get into the (Public Employees Retirement System) PERS numbers and all that, as much as I am a number’s guy, and Office of Management and Budget (OMB) loves having those discussions, I’ll stick to the Police Department stuff, but just to put our Department in context with others, I think it’s important to say, Palo Alto spends a lot of money on everything. Public Safety is no different. I did take a look at Council Member Tanaka’s spreadsheets a bit and I had also done some work leading up to this, to be able to put this in context. If you take a look at what’s in the Police Department Budget, I just have a couple of things I’ll mention here, that aren’t core Police Department functions in most other Police Departments; it really inflates our Budget for things you wouldn’t see in another agency. We have a robust parking division, which is $1.5 million. Chair Filseth: I was going to ask about that, but go ahead. Mr. Watson: We have an animal services division, which is $1.9 million. The Track Watch monitoring for next year is slated to be $1.24 million. The Track Watch camera surveillance next year is $300,000. We dispatch for Stanford University, which is $842,000. The Fire dispatching is $557,000. Utilities dispatching is $428,000. Animal dispatching is $214,000. Public Works dispatching is $30,000. Most of those things don’t exist in another agency, and the total is just over $7 million. If you take that $7 million off the Police Department’s Budget of $42, it would bring us down to about $35 million. If you take that $35 million in core Police services and compare it to the other agencies, as a percentage of the Budget, we’re actually a pretty good deal here in Palo Alto. We’re about 20 percent of the General Fund Budget. Mountain View is 27 percent of the General Fund. Los Altos is 30 percent of the General Fund. Menlo Park is 32.5, Sunnyvale is 34 and Milpitas is 34. We are the cheapest in the County in percentage of General Fund spending. It doesn’t mean we don’t cost a lot. It just means Palo Alto spends a lot of money on a lot of things, but as a percentage of the General Fund Budget, we look really good around the County with the percentage that we’re spending. So, no doubt we are grossly expensive, but compared to other agencies, I think the City is getting a pretty good deal for the services that they get. Chair Filseth: I understand that. Thank you for that. I appreciate it and you know, I think, I don’t mean to sort of lay this on one department or another. I think the overall question is a City question and what do we as a City want to spend money on. If we’re going to spend money on Track Watch it kind of doesn’t matter whether it’s in Community Services or Public Safety or City Council’s Slush Fund or something, I don’t know. Right, if we’re going to do it. I’m more interested in sort of the trends, right. I hope my Colleague, Council Member Tanaka was writing all this stuff down, because we’d like to understand those numbers too. Let me ask you about a couple of them. You say for Stanford dispatch we’re spending $800,000? Mr. Watson: $842 and we’re reimbursed for that, but it’s still a dollar figure that lies in the Budget. Chair Filseth: But they are not reimbursing for the UAL, right? Mr. Perez: Not the complete amount, correct. Mr. Watson: I will say you made an argument thought in there, in the expense of, you know, when you look at Public Safety retirements and PERS, I appreciate the argument as to why we should civilianize that position, because it will be cheaper. Chair Filseth: Chief, I think the whole problem is PERS. I think if the number were 7.5 percent instead of 6, which it really is, we wouldn’t have this problem. I mean, it’s unbelievably sensitive. But the problem is, it is what it is, and that number touches everything. So, let me ask you, and I appreciate that something like 60 percent or something like that, or 65 percent of your department is nonsworn, or is sworn, right, as opposed to some other departments where the percentage may be just, may be a little higher. But, let me ask for a second, what is a Community Service Officer? Mr. Watson: Here in town right now, the only Community Service Officers we have the Parking Enforcement Officers. Chair Filseth: It is parking enforcement. And there’s 7.5 of those folks. Mr. Watson: Correct. Chair Filseth: Are they sworn? Mr. Watson: They are not. They are Miscellaneous Employees. Chair Filseth: Okay. Mr. Watson: In years past we had Community Service Officers that used to go out and take cold reports and direct traffic. They were trimmed in prior budgets. Chair Filseth: Got it, thank you. What is a Police Agent? Mr. Watson: It’s generally described as a senior officer. It’s the first level of promotion. Chair Filseth: So, it’s a standard. Mr. Watson: If a sergeant calls in sick, they can supervise on a temporary basis. It’s a stepping stone. Chair Filseth: Pardon my – so, on parking services we’re spending $1.5 million a year. The Residential Parking Permits (RPPs) are doing it by external groups. Is that something that at some point or other we ought to look at as sort of more of the parking enforcement? Mr. Watson: You mean privatizing all of it? Is that what you’re saying? (Inaudible) It’s not lost on, I think a lot of us, that if the RPP is successful with outsourcing, basically is what it is, that someone may have a desire to look at that in the future. I think for right now, you probably don’t want to make a big change like that to the core parking function before that function is fully matured, but it’s certainly worthy of a discussion I would imagine. Chair Filseth: That’s sensible. Thank you. We talked about Public Safety. The animal shelter, do we know how much of it is actually the shelter versus control? Ms. Nose: Sure, we do, about $1.1 is the shelter, and do you know that also on the revenue side, the shelter, since we do partner agencies and some municipal fees and charges, it’s about $450,000, $460,000 a year. Council Member Holman: In reimbursement? Ms. Nose: In revenue. Whether it’s fees or contract agreements with neighboring agencies. Chair Filseth: Got it. Thank you. Let me ask a question, I’ve got to ask this. You folks are looking at $42 million, $42.3 next year, right. If you had to cut a million somewhere, what would we give up? Mr. Watson: You know, it’s a tough thing and I know it’s ridiculous for somebody to sit here and say, “We can’t cut anywhere.” But the reality is, we have 155 FTE’s right now, and over the decades we used to have 175. We have cut a lot in previous recessions and the dotcom bust, that’s where we cut a lot of the civilian Community Service Officers (CSO’s) that used to provide some extra service on the street. We have reduced our admin Staff down to barebones. They were casualties of previous cuts also. We’ve lost Police Officer positions in some of those cuts also. So, I mean, we’re down to core functions right now. If you asked me, as a priority as a Police Department where to cut a million dollars, it would have to be in some of the ancillary units, but those are important functions also. I mean, you’re talking about Track Watch, parking, parking is offset by parking revenues so it’s hard to cut there. School resource officers, but those are a huge thing to the community and the schools. We could trim detectives, but then we’re not going to investigate your fraud cases or your minor burglaries. So, everything comes with a choice and a cost. It’s a great exercise. I supposed we, well we kind of had it this year. It’s getting harder and harder in the Police Department to trim at this point is the bottom line. As I mentioned in the list that I gave you before, we provide a lot of services to the other City departments and the community that are well beyond just the Police function, and it works out. I mean we’re here 24 hours a day, so sometimes it’s perfect for our department to do it, but it does overinflate our budget by about $7 million. Mr. Keene: You know, all those you mentioned, I know you mentioned we dispatch for Stanford, but when we’re looking at the comparison between us and other cities, you dispatch for Utilities in Public Works here, so we have a 30 percent add-on just on the enterprise side to our organization that you do all sorts of dispatching for, so that expense shows up in the Police Budget. I would like to add that I do appreciate your focus on the pension issue and it’s really, I was going to say, it’s the elephant in the room but people always make that statement when, like, they can’t see that there’s an elephant in the room. I mean, it’s the visible elephant in the room, and we’re really at risk with it. Chair Filseth: Chief, if it wasn’t for CalPERS, and sort of the way things are, I mean, I think the City would be a lot better off paying your guys more now in salary, without sort of this huge windfall when they retire, because then they could, you would be able to track them more and they could live here while they work here, instead of taking off and going to some other state or whatever. I’m sorry. Go ahead. Mr. Keene: I was going to say, I don’t think we can disconnect though the problem of the fact that we have eight vacancies right now and how do we recruit with somehow thinking that we’re an anomaly. I do think we’re an anomaly at the level of service that we provide and how much we do spend. I do think these numbers are a nice, one way to get a quick look at things for comparisons, but they are as much of a doorway, a gateway as they are a conclusion, so let’s just look and ask some of the questions. And when you look at the cost per resident, it’s one thing. When we look at the cost per daytime person per employee, which is a more accurate measure of the volume of impact in our community, from Stanford, from businesses, from all of those sorts of things, particularly in community-serving services, we’re right there at the same level. It will be interesting to see in some situation when we do comparisons, like the Chief was saying, we’ll actually have our counterparts who are actually paying slightly more than we have. Nobody out there has a pension plan that is, doesn’t cost. I mean, they all cost. This is a Statewide problem for us, especially in Public Safety, but actually in all of local governments. So, there really isn’t a grass is greener sort of thing, as it relates to the fundamental structural challenge that we have. Mr. Watson: I’d like to just expand on the City Manager’s comments briefly. He was referring to Council Member Tanaka’s graph, what’s actually a real benefit in illustration is, if you were to take our $42 million and apply the $35 million, which is the true cost of Police services to this, we would be cheaper than all of these agencies per resident based against the daytime population. It’s that extra $7 million that makes us look really expensive that really doesn’t have anything to do with our core Police function. And we’ve talked to OMB over the years about this. It’s really disheartening to us that we look like we’re the most expensive Police Department, but it’s because of all the other services that are beyond base Police services that make us that way. Take out the $7 million and do these calculations again, and we look much better and, in fact, I think we’re cheaper than all of the ones on the graph here except for Sunnyvale, but there’s a few things that weren’t included in that Sunnyvale total, so once you did that we would be cheaper than all of them. Chair Filseth: Okay. Council Member Holman. Council Member Holman: So, I appreciate the dialog that’s been going back and forth, the conversations that have been going back and forth about this. But the topic of PERS and the cost per City for police services. I think what’s important here is to understand that with a back drop of traffic enforcement services being at 60 percent, approval with the urgent calls responded to within ten minutes, within six minutes having gone down a bit and quite a bit down from what was adopted, and then adding, taking out the Community Services Officer and adding an administrative person or something in the administrative office, that’s a communications person, there’s an optics issues that the Council has. I think and hope you can appreciate that and so, I hope you also can appreciate that we’re not here to say you’re not doing a good job, the Police Department is not doing a good job. We’re here looking at the budget, and that’s our role here. So, you don’t seem like, and I hope you don’t feel like you’re just being hammered through this, it’s just our job to look at the numbers. Some of the information you provided tonight would be great to have more public dissemination of that when we take the Budget to the Council, because I think it would help us get support, not just from the Council, but from the community in understanding what the relative costs are to other communities, or the things are that we provide that other communities don’t. The communications person is still a little bit of a hard one to explain and justify to the community. I head what you said. It’s still a little bit of a communication optics thing with the public more so than the other things that I just mentioned. And I think, also the public is aware that we do have a number of communications persons in different departments and I don’t have any data on this, but I’m not sure the public appreciates the expense related to that. We have, what, three or four communications officers in department? Mr. Watson: There’s one in Utilities and two in the City Mayor’s Office. Council Member Holman: And one in Police. Yeah, so four. It’s just kind of a hard one, and I’m not saying I don’t understand, but help us communicate. Mr. Keene: This is the point. We want more communication. We want to get more data and get the message and then we say, geez, why do we need communications people to do that. No, really, I certainly understand the optics. But we’re in an environment that wants more, and they want clarity. They don’t just want, which means conversion, it means the ability to communicate, not just to dump information and data out there. Council Member Holman: I’m not arguing with you. I’m saying that we need help in trying to disseminate the information that we’ve received tonight to the public to go forward with the Budget you’re talking about, and then all the things about PERS that Chair Filseth has very thoroughly and in an informed way brought forward too. I just think we need to also make that really clear to the public, because when we have these budgets that include, in some departments it’s like 98 percent and over 100 percent increase because of the pension and stuff. We need to have that additional message with the Budget going to the public. You know, it’s not like we don’t understand this. It’s like how to resolve it is I think Eric said, it is what it is, and dag gummite, it is what it is. So, we’re going to need your help. Mr. Watson: Well, just to answer your question about feel like I’m getting hammered here. My Colleagues may not agree with me, but I actually enjoy the opportunity to come here and communicate our story to you. So, I don’t feel like I’m getting hammered. Council Member Holman: That’s not our intention. Mr. Watson: The response times are certainly an issue. If you want some information on that, I can do it. I’ll leave that up to you. In terms of communicating, especially the need for the Public Affairs Manager, I hope that the Committee endorses it at the Council and then if you tee up that question at the Council meeting, I will go through the presentation again so all the Council can hear it and then certainly any public that’s paying attention. We will have a bigger audience. It is an important issue and not one we often talk about, especially when we’re doing it, but when we’re in threat of losing it or having to continue to do it in a far more expensive way, it is time to talk about all those things we talked about tonight. So, I appreciate the opportunity. Council Member Holman: I would like you to talk about the response times and when you come to the Council and make a presentation, I’m asking for more than just an oral presentation. I think you need to have a written communication and also that given to the new media, because sure enough, some of it will be reported incorrectly if it’s a verbal presentation. So, I think to cover the bases, that would be most helpful. Chair Filseth: So, Council Member Fine and I think we’re going to lose Council Member Tanaka in a few minutes here, so if we could get to a Motion fairly expeditiously, then Council Member Tanaka can vote on it. Council Member Fine. Council Member Fine: Sure, just telescoping out to end, so yes, I think the elephant in the room is pensions, as the Chair mentioned, we’re not going to lick that one tonight. Chair Filseth: Well, the point is that it’s going to start crowding out stuff like Communications Managers. Council Member Fine: It’s going to start crowding out the Police Department, everything. I think there is a good question about the $7 million of other services and how that might fit into other parts of the City Budget, whether it could be civilianized and whether our partner agencies that are sharing those services are paying some of the costs, whether it’s pension or otherwise. Specifically, on this Public Affairs Manager, just in my day job, these are the folks, I’ve worked with hundreds of them across the country, and it is absolutely true that Palo Alto is the cream of the crop. I think there is some actual real tangibles here though. This is not a “nice to have” anymore. It’s not just “fluffy stuff” for a few reasons. One, as the Chief mentioned, this actually is pulling people off the street. When you have a part-time Community Affairs Manager or PIO in a department, it is often pulling people off of patrol or beat patrol. Two, it is real nice to have a single point of contact. Palo Alto has been really a leader on that. It lets us set the message with the media, which in turn can limit liability going forward. As the Chief mentioned, the shooting on, I guess Christmas Eve or Christmas Day a year or two ago, I kind of expected things to be a little worse. They weren’t. I think a lot of that was due to the fact that we built up a bank of community trust, which gets to this last piece which is this bidirectional communications. Council Member Holman, you mentioned your Next Door and seeing these posts. That was Lieutenant Perron. I can just tell you for a fact, that was him having these conversations, helping residents find services, and there are real actual services for our residences. I know a number of stories where folks, through social media, would help catch a burglar or would actually find that their packages were being stolen by some prowler and the Police would work with them on social media to find those things, catch that criminal. That’s helpful to our residents. Lastly, it’s about transparency and community policing trust. You don’t need it until it’s too late, and this is kind of an up-front investment. Even in Palo Alto, where we’re a relatively safe City, we do have a lot going on. So, we are a mid-sized City. We have a daytime population that doubles and I don’t think we lose out by over communicating in this issue and centralizing it in one position. So, I really would encourage you guys to reconsider supporting this Public Affairs Manager. Mr. Watson: If I might, I would just love to tag onto your comment that I was the Captain of Detectives when the shooting happened on Christmas Day a couple of years ago, and prior to that I was a sceptic of whether we needed a fulltime Public Information Officer. That changed my mind. We came out of that, as you would say, relatively unscathed because we had built up a reputation where the media gave us a little bit of room and space and some patience to get all the video downloaded from the cars and then about 36 hours after the shooting, put out an accurate second-by-second account of what happened. That if we did not have that reputation, they would have been protesting outside the building and my skepticism prior to that shooting has completely changed and I am a complete supporter of it now, and I wasn’t before. So, I agree. Council Member Holman: Can I ask a question? Just a thumbnail, what percentage of Police Services is devoted to code enforcement? Mr. Watson: We really don’t do code enforcement per se. There’s a little bit of ancillary stuff because we have someone who does the taxicab permitting and inspections and alarm permits and stuff like that. I suppose you could kind of link that a little bit with code enforcement. But for the most part code enforcement lies in Planning. I think they have two people in the lead there. Council Member Holman: I was thinking, and maybe I’m wrong in this, I was thinking that Police Department is the department you call when you have, say for instance, a construction project and people are going down the wrong roads. They’re using private streets instead of the primary thoroughfares for transport of goods? Mr. Watson: I think, as with a lot of the departments, whether it’s Planning and Transportation or us, there’s so much crossover back and forth. That would be a traffic issue that would, obviously, be handled by the Police Department. But if somebody was violating their use permit or the traffic plan and stuff like that, it would fall back to Transportation, sure. Chair Filseth: Council Member Tanaka. Council Member Tanaka: Yes. I would like to make a Motion to tentatively approve the Budget with the following exceptions going to the parking lot, which is the overtime, which currently is at 13 percent. I was just looking at Fire’s overtime and they are actually going down by 1.2 percent even though their salaries are going up by 7 percent, so I think we need to take a closer look at overtime. On the pension issue, which is the big elephant in the room, I think we should actually have this listed with the unfunded liabilities, but that’s a parking lot issue, so put that one in there as well. And the last one is the Communications Manager. Chair Filseth: Is there a second? No second, the Motions fails. MOTION: Council Member Tanaka moved, seconded by Council Member XX to tentatively approve the Police Operating Budget and to place in the parking lot department overtime budgets, the request for the addition of a Communications Manager and discussion of listing pension with unfunded liabilities. MOTION FAILED DUE TO THE LACK OF A SECOND Chair Filseth: Council Member Fine. Council Member Fine: Can I try that we maybe long-term parking lot, the pension liability issue and the overtime by department, and then pass this one tentatively. I think, because, Council Member Tanaka, I think we’ll be asking some of these same questions, you know, why is overtime going down in Fire, actually. That’s something we would want to know as well. Council Member Holman: I’ll second. Chair Filseth: Can you restate your Motion? Council Member Holman: Sure. The Motion is that we tentatively approve the Police Department Budget, but we do parking lot long-term for all departments the overtime and pension, and those are yet to be defined by this Committee. MOTION: Council Member Fine moved, seconded by Council Member Holman to tentatively approve the Police Operating Budget and to place in the parking lot discussion of overtime by department and pension liability. Chair Filseth: Is that clear enough? Do you care to speak to your second? Council Member Holman: No. Council Member Fine: Did you want to speak to your Motion? Chair Filseth: All in favor? All opposed? Motion carries 3-1, with Council Member Tanaka opposed. MOTION PASSED: 3-1 Tanaka no Chair Filseth: Chief, thanks very much for coming in. Mr. Keene: Thank you gentleman, I guess. I know you’re all gentleman, I just wasn’t sure if there were a few ladies. 3. Office of Emergency Services, Operating Budget. Council Member Tanaka left the meeting at 8:52 P.M. James Keene, City Manager: Okay, next up. Chair Filseth: I was going back and forth on the Communications Officer a little bit and was persuaded. I do think there’s a legitimate discussion (inaudible no mic) I do think there’s a legitimate discussion to be had about can this stuff be optimized Citywide. Is it a fulltime job in all the departments to have one? I think we ought to take a look at that. Council Member Fine: We do over index in Palo Alto on the Public Safety side, just compared to what I’ve seen in other cities, but we’re also to a size that’s probably large enough to support both. Chair Filseth: It’s possible, but I think that’s a discussion that we should have. Mr. Keene: Ken will make it clear obviously. (Crosstalk) OES does use the Police Communications Officer also. But I know you were talking more widely. Chair Filseth: Why don’t we proceed? Council Member Tanaka, safe travels. Kenneth Dueker, Office of Emergency Services: Good evening Honorable Chair and remaining members of the Committee. Adieu to Council Member Tanaka. My Budget will be, as always, short and sweet, as intended. I would be happy to comment. We’re a simple operation, but I would be happy if there is any desire, to add in the, as Chief Watson alluded to, the role of the so-called Police communications position. It really is a Public Safety communications position in the event of an activation of our emergency operations center. So, I’ll side bar that for later if there’s any desire. I’ll just touch very briefly on a few things on the slide. I won’t read all the items. They’re amply described in the Budget, but we’re a busy little group. Some of the things I’m very proud of, obviously with a 3.48 FTE, if one were to look at and do some simple mathematics, with 170 trainings, exercises and presentations alone, as many of you have seen me personally at everything from the Great Race to Save Water to May Fete Parade, you know that we kind of make emergency preparedness a contact sport, as it were, and we’re always out there is the community at every opportunity, so that’s one thing. Mr. Keene: And no overtime. Mr. Dueker: No overtime. Absolutely not, thank you Mr. City Manager. So those are things that we do plan for. We have a lot of things that are in the special events category as well, be that a dignitary visit or a large-scale gathering, anything that presents high risk or complexity to the City or is anticipated to or is like to involve multiple jurisdictions. And the final thing is, unlike a number of other jurisdictions in our County and nearby, we manage to have a very successful ’16-’17 storm season. There were some, frankly, white-knuckle rides for us and our friends in Public Works and Utilities and other operating departments throughout the City, but our attitude about that is, we will stand up the EOC, at least at a monitoring level. That might be as simple as turning on a few creek level monitors and getting in touch with some of our community volunteers. It might be as complex, as it turned out to be, over the President’s Day weekend, when I was asked a few days later, after the flood in San Jose, to respond to the City of San Jose to assist them with their Emergency Operations Center. Initiatives for this coming Fiscal Year, obviously, the Public Safety Building is a very large item for us. We’re going to be building a new Emergency Operations Center. We do a lot of work with the 9-1-1 Dispatch Center and a lot of other key functions. And another multi-department project involving Utilities and the IT Department is a build-out of a Public Safety wireless network. Many of you may not know all of our Police and Fire vehicles right now utilize commercial cell phone for the data systems in their cars, in their vehicles. So, obviously, it wouldn’t take much, a cyberattack or just a large sporting event somewhere in the Bay area to knock out our phone systems and make them unreliable. My plan is really for a fully impaired scenario with the grid down for a number of days or weeks. It could be caused by an earthquake. It could be caused by something else. So, that’s a quick overview of what we’ve done and where we’re heading, and I’m happy to answer any questions. Thank you. Chair Filseth: Council Member Holman. Council Member Holman: So, if you use the communications person from the Police Department, how come it isn’t allocated, part of it isn’t allocated to your department? Mr. Dueker: It was a simplicity argument. I’ll let OMB chime in. When we originally did this, we had a similar issue with the Public Safety technologist. It’s hard to allocate a specific number of FTE hours to how we would use it, so I’ll let OMB chime in, but it was their decision, my understanding, to have it reside there, to be more clean. It would certainly be fair and equitable to say, allocate a fraction of that to us and possibly to the Fire Department or somebody else, but I’ll let Kiely chime in. Council Member Holman: But it was something like 3 percent, and I don’t know how you calculate, but it was something like, we do it all the time in the Budget, but if it was something like 3 percent, that’s not worth it, but if it’s, you know, 12 percent or something like that, it maybe is. So, and I don’t know how you do those allocations for a lot of things. Ms. Nose: Sure. That allocation or that discrepancy actually that you’re talking about, actually came up in our first meeting, when you were trying to reconcile that org chart in the beginning of departments, and you’re like, hey, that FTE bottom line doesn’t match. What’s in the section of the staffing tables? And that’s because one is based on operations and one is based on the nitty gritty where we actually charge someone. So, it’s absolutely possible for us to take a portion of this position and Budget and allocate it in OES. That’s fully within you guy’s discretion and is a feasible thing. Council Member Holman: I’m not advocating that for the moment, but just kind of asking that question. The PERS issues doesn’t go away depending on allocation. There was, I actually didn’t have very much here. I was curious though, the OES percent of office of Emergency Services resources that are available to respond to hazards it goes from 97 percent, not much of a decrease, but it is 97 percent to 95 percent, on Page 299. Why is that, since the staffing is constant? Mr. Dueker: Thank you for that question. That’s a very nuanced one. The reason is that we have more things and more complexity. So, we have adjusted that number to fit reality. When we had fewer items, it was easier to maintain something close to fully mission capable at all times. Our target has been slightly reduced just because, if any of you ever had a computer or a cell phone, imagine having hundreds of them, and the odds of them all working fully at any one time are reduced. That’s the simple answer. Council Member Holman: Okay. I have a grants question, but I don’t know when I would ask, but I’m not sure this is the time to ask it. So, since we’re running so far behind, I’ll hold on it. But it has to do with an issue. Mr. Dueker: We can follow up on that. Chair Filseth: Our group here is reduced 25 percent. It may speed things up. I don’t know. Council Member Fine. Council Member Fine: Very quickly, I mean, the budget here looks pretty clean and simple. Mr. Dueker: Thank you. Council Member Fine: Just one thing. I think, and this is more for City Manager, who is not in the room, some of the key performance measures in the Public Safety I looked over today, I just have some questions how they’re decided. Whether, you know, the number of presentations is the right metric for what we ask. I understand that’s a major part of what you do and how we prepare folks. I just have some questions on that equivalent to PD and same for Fire. So, it would be nice for the City Manager maybe to give Council at some point an overview of how these key performance measures are agreed upon. Mr. Dueker: In his absence, I’ll comment on that. So, the key performance metrics are actually very challenging, especially for the Office of Emergency Services, because so much of what we’re trying to do is deter, prevent, mitigate, and those things are very illusive to quantify or be empirical about. This last slide is actually somewhat helpful. We turn it around and we’re looking at what risks are we trying to handle. Somewhat like an insurance carrier or surety might look at the world, no that you should view our Budget as a co-pay, but in some ways, it is. In some ways, in all seriousness, the OES Budget is an investment in prevention, an investment in potential to recover from things that we don’t quite understand what could happen. A lot of our community, for example, I heard another Council Member here said that we live in a safe community, which is true, but we’re not without the possibility of bad things. We’ve had a workplace shooting in Palo Alto, but it happened before the internet, so it’s difficult for most people to search that and realize that it’s happened. We’ve had tornadoes in this area, so to paraphrase James Bond, “never say never” again. So, we could have these things happen. What we try to do is plan for things that are reasonable. The have a decent probability of occurring, correlated with what is the possible impact. So, for me, earthquakes, floods, those happen with some regularity. Technological, the accident where the airplane took off from the airport about seven years ago and hit the one and only power connection we have to the grid, right. And by the way, we could invest a half billion dollars connecting to the grid with a second line. Then we might find ourselves down a rat hole there, because the grid itself is unreliable, and maybe we should make an investment in renewables and local generation. So, more to follow, if we have time, but that’s how we look at that. So, metrics are difficult. We have to come up with a few things that can be quantified and put crisply in a report like this, but it’s a very nuanced conversation. Thank you. Council Member Holman: Actually, we don’t mind. That was kind of where I was going to go, was like the second, or the redundant transmission source or power source. And also with Congresswoman Eshoo. So, I know she’s been very supportive of your department and Palo Alto, and so is there any update on, there’s nothing budgeted for it, but and I know we’ve talked about this for year and we don’t seem to be any further that I’m aware of, other than just having conversations. So, do you have any update on that? Mr. Dueker: I do. So, just for the people who are not up on that, Congresswoman Eshoo and my team, along with a number of Public Safety chiefs from Los Altos, Palo Alto, in the area here, Mountain View as well, have had a long-standing discussion, unfortunately, it’s not much more of a discussion, to build a regional disaster resiliency center at Moffett Field. We actually are in long-term discussions with Google and their affiliate, Planetary Ventures. There are a lot of impediments, to be blunt about why there couldn’t be anything in our Budget, right. If we can’t ask for a pretty low-level civilian nonsworn employee in the Police Department, I don’t think we would have had great success in asking for more. But part of the impediment is Staff time, but I think that’s actually the minor part of it. I think the larger question is, where does regional leadership come from in a case like this. It’s a bit of a game theory issue. The Congresswoman has freely admitted, and you were at the meeting that she, from her exalted point, right, she cannot even make things happen be that financially. She could put in a good word here and there, and she’s done that, but we lack the regional, what would I call it, cohesion factor, for lack of a better term. There’s not a gelling thing that’s bringing us together yet. My fear, of course, is that will happen after we get clobbered by one of those events. But, if you have any input, I’m all ears about how to move that forward. Council Member Holman: My thought is, I thought for a long time, it ought to be prioritized. It’s still not prioritized. So, I’ll leave it at that for the moment, but it just – my worry is that what you just said, we’ll prioritize it after we have an event. And, given this day and age, the last time it was an accident, it’s a worry. I think about it pretty often. The other thing is, we have, what was it, a couple of years ago, we instituted an impact fee to support Public Safety facilities. You remember it, Kiely. Because our daytime population is much greater. Do other communities charge a staffing because the majority of our calls are during the day too? So, it’s not just the public facility, but it’s the staffing also that’s at much greater demand during the day. Does any other community? Lalo Perez, Chief Financial Officer: I attended a meeting of the Finance Directors where the City Manager of Sunnyvale made a presentation on how they do their cost recovery, if you will, on impacts from development and they rather do it on an agreement per agreement and a standard fee. I asked her the direct question, why would you not want to have a direct fee, so it would be known to the community, to developers. And she felt, her position was that she’s better off doing it project-by-project, because the impacts could vary enough that she would rather keep those options open. So, at least from one city, they do it on a development agreement basis, so they don’t have a straight impact fee. Council Member Holman: Any other examples from any other cities? Mr. Perez: No, unfortunately, she was the only one making the presentation. We were at the City of Sunnyvale, their newest facility that they recently opened near the Moffett area. So, we haven’t asked the others. Council Member Holman: Okay. Those are two things for me to put in the long-term parking lot and, hopefully, the first one’s not a really long-term parking lot. Chair Filseth: Thank you. So, I thought it was clean. I actually didn’t have anything. Thank you. Council Member Holman: I’m sorry. Did you have something? (Inaudible) So, I’ll tentatively approve, move to tentatively approve the Office of Emergency Services Budget and add to the long-term parking lot a forward action on the redundant power source and daytime population impact fee. Chair Filseth: Is there a second? I’ll second it. MOTION: Council Member Holman moved, seconded by Chair Filseth to tentatively approve the Emergency Services Operating Budget, and add to the parking lot discussion on the redundant power source as well as generalized cost recovery for daytime population increase. Chair Filseth: Explain the daytime populate impact fee? Council Member Holman: Well, I think, like you said, a couple of years ago we recognized that our services are utilized by, I’ve forgotten what it is, but something like, the demand for services is greatly accelerated during the daytime hours when our population grows. Our residential or nighttime population, the demand for services declines, and I don’t remember the numbers, but it’s quite significantly. And so, we did that for the Facilities, and it seems like we ought to look at whether there out to be a demand-for-services impact fee as well, or some kind of fee. Chair Filseth: I understand. Mr. Keene: So, I don’t want to get too off on this, I think we’re using impact fee than in a very colloquial way because… Council Member Holman: Yeah, I am. Mr. Keene: (Crosstalk) from collecting impact fees for operational and service things, so it’s more like, just so we’re clear, it would not be an impact fee. How is it that we recapture some of the costs of impacts from daytime population use, yeah. Okay. Council Member Holman: Exactly, it is a colloquial term. It isn’t obviously going to be specifically an impact fee. Chair Filseth: Then for the Motion, maybe the word should be impact recovery or something like that? Council Member Holman: Generalized cost recovery for daytime population increase? Is that way too many words? Chair Filseth: I’m okay with it. Council Member Holman: Okay. Mr. Keene: So, anyway if the Council ultimately endorses all of these things, I mean, these very well may be to take a closer look at it, right. I mean, because it goes both ways. This is an ecosystem of both impacts and production and contribution. I mean, we have daytime population that obviously helps fill up all of the restaurants. It brings in sales tax revenue and things like that. There are all sorts of benefits that the daytime population brings us, in addition to the impacts. Council Member Holman: This isn’t in denial of that, but we have a residential population, for instance, that volunteers in a variety of ways in our programming of the City too, so I’m not trying to discount the contribution. I’m trying to; we should have a discussion about what’s fair. Council Member Fine: So, when we finalize this long-term parking lot, is the whole list going to be brought to Council and Council will say, “Hey, there’s ten items in the long-term parking lot. We want Staff to go look at three of them or we want you to do what is listed in the recommendation there.” Mr. Keene: Yes, we would be taking it to the Council. That would be my understanding and I say that in this regard, right. Chair Filseth: I think, Council Member Fine, so if you look at the traditional parking lot, the conventional parking lot, the short-term parking lot. (Crosstalk) We’re going to have to park a big truck in it. Usually the Finance Committee does another pass on it themselves, and then some of it ends up in front of the Council. Mr. Keene: But you resolve those short-term parking lot much sooner. Chair Filseth: So, I think what Council Member Fine is asking is, because we haven’t decided this. Council Member Fine: Where do these go? Chair Filseth: Is, does this Committee look again at the long-term parking lot before it goes to Council? Mr. Keene: Well, no, I misunderstood then. Yes, I would suggest that you do that also, just to reconsider it. But then, again, it would go to the Council because, in particular, to do this stuff we’ll need the direction from the whole Council. Council Member Fine: Okay, then that’s good. Just another thing here. I wasn’t sure I was ready to support the new power supply thing. (Crosstalk) But knowing that we’ll have another pass at it, I’ll be happy to support the Motion as is. Chair Filseth: In that case, all in favor? Motion carries 3-0 with Council Member Tanaka absent. MOTION PASSED: 3-0 Tanaka absent Chair Filseth: Thank you very much Ken. Can I ask a question, a procedural question? For this group, there’s three of us, so for a Motion to pass, does it require all three or is two to one a pass? Jessica Brettle, Assistant City Clerk: Two to one is pass; it’s a majority of those members present. Chair Filseth: Got it. Thank you very much. Mr. Perez: And keep in mind that your protocols that you accepted at the opening of the hearings is that if two of you want to put something in the parking lot, that works too. Mr. Keene: In that case, if there were four of you, two of you could get something in the parking lot. Obviously, with three of you, two can definitely put something there. Chair Filseth: Okay. 4. Fire, Operating Budget. Chair Filseth: Welcome Chief Nickel. Eric Nickel, Fire Chief: Thank you. Council Member Holman: It was a redundant power source. We know what it is, it’s kind of shorthand for a second transmission. Ms. Nose: Right. Is the goal to find funding a source for it, is the goal to explore it further? That’s what I’m trying to, just want to make sure we capture that in the record. Council Member Holman: Well, the goal would be to have a presentation by Office of Emergency Services Director or Chief, whichever it is, about what the goal would be, what the need is, what actions have been taken, what progress has been made and identifying any, and collaborations with other cities and what any potential funding sources are that have been identified. Mr. Keene: If I can just make it Staff we’ll go beyond OES, Utilities is probably even more crucial. Council Member Holman: Yeah, Utilities as well. Ms. Nose: Thank you. Council Member Holman: And the reason I mentioned Ken is because he seems to be the one that kind of leads on that as opposed to Utilities, just from my experience. Mr. Keene: He worries about it. Council Member Holman: Me too. Mr. Nickel: Are we ready? Good evening. Eric Nickel, Fire Chief, and I’m here to quickly walk you through our three slides. I will frame my conversations this evening really within everything that we do within the Fire Department, and that is eight minutes or less 90 percent of the time. So, when we talk about key performance indicators, everything that we strive towards, build our Budget, build our Strategic Plan, is when somebody calls 9-1-1, from the moment the dispatcher picks up the phone to the moment the first Fire apparatus pulls up in front of the residence or business, is eight minutes or less 90 percent of the time. We report this out quarterly with our quarterly performance reports. You’ll see one in the next Council Packet, but our accomplishments for the year is, we did meet our performance objective for all Code 3 medical and rescue calls. We’re 1 percent below our performance objective for confirmed fire calls, and there’s a likely reason for that, and that’s because we have to dress in all our personal protective equipment which slows down our response time a little bit. We have increased our Fire inspections 43 percent from the prior year. I’m a firm believer in this concept of strategic community risk reduction. Your Fire dollars go a lot further when we’re doing preventative activities then when we are responding. EMS revenue has plateaued and right now currently totals about $3.1 million per year. Since late June of last summer, 2016, we have been in on-going meet and confirm meetings with IFF Union to maximize efficiency in emergency response performance. Our initiatives for this year is to continue to work with Stanford University to finalize the Emergence Services contract. I believe we’re getting quite close with that. A big initiative for the organization, I’ve been here 4 ½ years and this was on my to-do list, and that is completing accreditation process. So, I heard you talk earlier about key performance indicators, we are self-evaluate in the organization on 273 different performance measures, and we have to report out on what we do and how we meet that benchmark. There’s only about 250 Fire agencies within, actually globally, that are accredited. The majority of those are in North America. The only other agency within the County that is currently accredited is Santa Clara County Fire. It’s a great way to take a hard look at the organization and much like an educational institution or a hospital would be accredited, the Fire Department needs to be accredited. We’re evaluating our community and public health risks, and identifying evidence-based risk reduction programs, and this really goes back to some of the conversations that I’ve had in the past where my biggest concern as, you know, in the Emergency Medical Services side of the shop, 17 percent of Palo Altans are over the age of 65 and represent almost 50 percent of our ambulance transportations to the hospital. And there is a bubble that is aging into this high-risk group. I want to make sure that our Emergency Medical System is positioned, not just today, but five, ten years down the road. So, we’re taking a very close look at what the community health needs might be in that five to ten-year window, specifically around the aging population and the needs for EMS. And then, we’re modernizing and replacing our Fire stations and our apparatus. Our fleet, with the arrival of a brush fire engine late this year, the majority of our fleet will be less than seven years old, so that’s a real testament to the City Manager’s commitment to providing our Firefighters with the best equipment possible. And then, obviously, Council has seen Fire Station 3 and that will be demolished and rebuilt in short order. Late this year we will be demolishing that station and moving forward. Moving forward slide, so obviously, the big thing here is deployment changes, and that is a negative number, $1.3 million, and that’s directly related, as you’ve seen in the Budget, to the Stanford Fire contract, and also directly related to the push to find efficiencies within the Fire Service. We’ve done some great work here. When I first started here there were 127 FTE’s within Fire, and we’re working to find the most efficient and effective system possible that gets us eight minutes or less 90 percent of the time. We’ve obviously got to replace some our gurneys and some of our cardiac monitors need an extended warranty. Those are very expensive. Cardiac monitors are about $36,000 per, and we use them virtually every day on the EMS calls, so we want to make sure that the warranty is in place. And then, we’re making a one-time ask for our final phase of accreditation. We have to bring a team of outside assessors to come into the organization and they will be here for about a week. That money is for that and to finalize up one of our technical documents that we need. And then on the fire hydrant maintenance program, we discovered something very interesting in the last Budget year. We received our Insurance Services Office or ISO evaluation, and they come through periodically and they evaluate Fire Departments, and we are a Class 2 Fire Department, which is something to be very proud of. There’s only about 4 percent of the Fire Departments in the country that can say they are Class 2, and this is really what, primarily commercial insurance rates are based off of. Residential to a lesser extent. And we missed becoming a Class 1 Department by 5 points, and we left 7 points on the table because we did not have a credible fire hydrant maintenance and inspection program, so we’re going to throw some money at that, a little bit of money to get our hydrants back up to speed, and then we’re going to invite ISO back in for another evaluation with the goal of being rated an ISO Class 1, and the community would absolute see a lowed fire risk insurance rate, primarily with our commercial properties. The capital projects, and you’ll see this next week on the 18th with the capital items. Fire State 3 replacement, which is already in the works, one-time cost for a fire station ring down system replacement. Our goal is to be on a regional Fire and Emergency Services dispatch system, and this is the same ring down system that Mountain View uses and County Fire, which are our two agencies that we use and do automatic aid with on a regular basis. And then the last one is our self-contained breathing apparatus are at the end of their service life and need to be replaced. The bulk of the apparatus are in the 10 to 15-year range, and because of the improvements in safety and technology, and then some of the standards that are out there recommend replacement at about that 10-year window. So, those are the highlights of the Fire Department’s Budget and proposal, and I’m available for any questions. Chair Filseth: Council Member Holman. Council Member Holman: Sure. So, are you asking for Staff and CIP approval tonight? Are these the only three Capital Improvement, I haven’t gone through the Capital Improvement Budget yet. Are these the only three Capital Improvements that you have? Mr. Perez: Well, I think what we’re trying to do is give you the holistic view, but the formal approval is not until the 18th for the CIP’s so tonight we just want to focus on the operating side. But either one should not be aware that there are other capital expenditures. Council Member Holman: Okay and I appreciate that approach. I only had a couple of questions, I think. It had to do with just confirming the charge for services to Stanford, that’s on Page 236, under revenues, just confirming that that is Stanford. Mr. Nickel: Thank is correct. Council Member Holman: And then the other question I had was… Mr. Nickel: Well, and let me clarify that, that also includes our EMS transport cost recovery, so when we transport people to the hospital, that’s included in that. Council Member Holman: Okay, alright. But the reason it’s going down is because of Stanford? Mr. Nickel: That is correct. Council Member Holman: Then the question I had was, and maybe you were here for the conversation earlier. Pretty much the top of Page 236, again are dollars by division, we’ve got administration going up by a considerable amount. It’s fluctuated a fair amount actually. I’m not quite sure why the fluctuation. It’s gone from $1.9 to over $2 to just over $1 million. It’s really, $1.6. Mr. Nickel: We had some conversion. I’ll let the team from OMB answer that. Kiely Nose, Budget Manager: Thank you. So, one of the changes that you’re seeing, actually and I would say frankly the primary change that you’re seeing this year, is the budgeted vacancy factor for the Department. So, Citywide we do assume a certain level of vacancies across the organization and we adjust that on an annual basis based on experience. And so, there’s actually a significant swing in the Fire Department this year because even though they have a number of vacancies due to the backfill that’s necessary to maintain staffing levels on the various apparatuses, they need that vacancy savings so they can fund the additional overtime that happens. So, really, to be honest, it is absolutely a function of us switching and moving around those funds, based on experience. Council Member Holman: I’m a little bit confused because I’m pointing to administration. Ms. Nose: And we budgeted the vacancy factor in the administration division of all the departments. Instead of splitting it out across all the FTE’s, it gets rather complicated when we’re talking about hundreds of cost centers, we do one mass adjustment and you’re seeing that. Mr. Nickel: And just to remind the Council, the Fire Department has been running with almost double-digit vacancies for a couple of years, because we’ve been in negotiations with Stanford. It was my fear that we would either no longer be their provider or have a dramatically different contract amount that we would have to turn around and layoff Firefighters, so we’ve been running very lean and using overtime to fill those vacancies. Council Member Holman: Okay. That was really my question. Chair Filseth: Council Member Fine. Council Member Fine: Thank you. So, a few specific questions also on 236. So, facilities and equipment, increasing about 25 percent, is that the breathing apparatus and other things? Mr. Nickel: Yes. So what we have made, we have, and if you look towards the back here, we have made some nominal requests for station furniture and fixtures to improve the living conditions in some of the work places for the Fire stations. It’s also for the… Ms. Nose: Chief, I think it’s the gurneys. Mr. Nickel: Is that where the gurneys are placed? Okay. Council Member Fine: Okay. And contract services are increasing about 25 percent. Ms. Nose: They are and the primary component of that is associated with the medical transports. I think I did that, right. Mr. Nickel: Is that for the billing? Ms. Nose: No, you know what we did. It’s for the fire hydrants. So, we put in, but the reason why… Council Member Fine: We’re contracting out to get them… Ms. Nose: To get them back up to speed. So, we’re going to have someone else do the maintenance. Do a one-time sweep to get all the maintenance back up to code, and then that one-time expense will go away. Council Member Fine: So, just last thing, a few more questions. On the fire hydrant maintenance program, if there is a large insurance savings to our businesses, and the City is expending you know, $40,00, $50,000 on that program and then, you know, another $50 on an international accreditation, there some link there, and this is back to Chair Filseth’s point about business paying their way, if this is largely a benefit to our commercial businesses, that’s great, if they’re getting cheaper fire insurance, love that, but there may be some cost recovery there. Two bigger questions. One, on the international accreditation, you mentioned there’s like 200 metrics, something like that. Do any of them do what we’re doing here today? Actually, go and look at some of the financials of the Department, and figure out whether our Department is running a tight ship in that regard, in terms of administration and finance, vacancies, things like that? Mr. Nickel: Excellent question. We get, one of the sections that we do look at is administration and Budget and finance. We complete that process because of some of the things that our administrative services department has already done. Whether it’s our annual Budget process. We get lots of credit for our CAFR and the GFOA, did I do that correctly? Alright, not bad for the Fire Chief. So, that almost gets us completely done with that category, because we’ve done those things. In terms of, do we run a lean ship? That is an interesting analysis that’s done throughout Fire Departments all the time. This one takes a look at that. Essentially what it says is what the Fire Department says is credible, it’s been evaluated, and the Fire Department is on a process to find things and fix things. A continuous quality improvement circle. Council Member Fine: Okay. And just the last part is on medical calls. We’re seeing kind of a shift in terms of our population and the costs there. Just comparing us to a few other departments, we’re pretty good at cost recovery on some of those compare to other local departments. I’ve read and heard from, just looking around, that some Fire Departments are starting to move to charge for service calls for Emergency Service calls, and I’m wondering if Staff has any thoughts on that. If that is something we’ve explored in the past, could it be explored in the future. Is it something for us to put up in that long-term parking lot? Mr. Nickel: So, we brought this concept in front of Council three years ago, and the concept is ALS first responder, so because we have a paramedic on every single one of our apparatus, it is very common for agencies, and there are agencies here in the Bay area that are doing it, that will bill the insurance companies for cost recovery for that paramedic on the fire engine, and it’s typically in the $300 to $450 range, and just to give you a frame of reference, we’re billing the insurance companies for cost recovery on the ambulances for the transportation about $1,900, so those two charges would be included on one bill. Most insurance companies pay them, private insurance providers. They are legal in California. Many Fire Departments do that. Now, there’s another way to look at this ALS first responder collection or cost recovery fee. Some patients we go and see don’t need to go to the hospital, but we are mandated under our EMS rules, we can’t take them anywhere other than, we can leave them at the scene, either against medical advice, or because they just don’t want to go, or we can take them to an emergency room. I can’t that them to an urgent care clinic. I can’t take them to a practitioner. Those are my only choices; so frankly, there are some patients out here that would benefit from what we call a treat and release. Under our current cost recovery structure, the only way that we can recover costs is if we wheel them to the hospital. So, we may actually end up saving some people some money just by treating them at wherever the call is located, and bill them $300 instead of $1,900 for an ambulance ride. So, there are opportunities there and we have done the analysis. Council Member Fine: So, what’s actually blocking us from doing the treat and release? Is it policy? Mr. Nickel: When we first brought it in front of Council, it was a different Council make up and it was a different time, and I think there was some questions about, you know, would it adversely impact maybe the seniors of the community. I mean, I have a different philosophy and I think it falls within the Council’s philosophy that these individuals are getting an individual benefit of that treatment. Council wanted us to go do, you know, some more research and outreach and we just had not brought it back because there was the feeling at the time that perhaps there wasn’t an appetite, you know, for that policy decision. Council Member Fine: Right. So, for one of our more expensive departments I would just float to my Colleagues that this does seem like an area for cost recovery, if not revenue, and I think it makes sense for us to have a treat and release program for most citizens. And then, in terms of charging for the ALS, I mean I’m thinking it sounds like a no-brainer. Is there a reason it’s not? Mr. Nickel: I think again, the concern, if you look at our quarterly performance reports and if you look at the customer surveys, and while the scores are phenomenal, they do a demographic breakdown. The majority of the people that respond to this and the majority of the people that we take to the hospital are elderly, so are we maybe adversely impacting them or their insurance. Council Member Fine: Okay, so it’s impacting an elderly person’s insurance and that their insurance is paying $300 to $400 and then it affects (crosstalk). Mr. Nickel: Or the insurance might say, we’re only paying $150 and you’re responsible for the other $150, which could be a burden. So, that’s really a policy decision at that point. I can tell you how much money that I would estimate we would bring in, but ultimately there’s going to be a policy impact. Council Member Fine: How much is that, just your estimate? Mr. Nickel: I think when we looked at it a couple of years ago; I want to say $300,000 to $400,000 a year. Council Member Fine: Okay, so this area of cost recovery on some of these emergency and medical calls would be of interest to me to put in the parking lot, but I’m sure there are more questions. Long-term, sure. Council Member Holman: Could I follow up with that topic? I remember this conversation, but not terribly clearly, and I just wanted to make sure, not that we’re going to resolve it now, but I just want to put out there though, that I wanted to make sure there wasn’t any additional liability the City would be undertaking because it’s treat and release, it has an implication. It’s like, you know, “Ah, you’re okay, you’re good to go.” So, just putting it out there. Mr. Nickel: Well, we already currently do that, and it’s a great question. Our paramedics are, we have some of the best-trained paramedics in the world and the fact that our Medical Directors are all Stanford doctors, and then with the changing face of out-of-hospital care, pre-hospital care, I’m very comfortable with the things that we do and the systems that we have in place to catch those things. Like I say, we have amazing medics that do work out there, and if something is not telling them it’s right, we’re going to the hospital. The fact that we’ve got one of the best hospitals in the world right in our backyard, that makes it very easy to transport. Chair Filseth: Cool. Thanks for coming in. Hey, so I noticed the administration line jumped around a lot too, and there’s another line in here that jumps around a bunch, which is the other benefits line. Is it sort of a similar dynamic there, which is second from the top, salary and benefits? Ms. Nose: Yeah, and the $70,000, the 31 percent increase? Chair Filseth: Yeah, it goes from $300 to $200 and back up and so forth. Ms. Nose: It does. That’s actually where worker’s comp, the allocated charge for worker’s comp is budgeted, so this gets back to that one-time thing we did last year where we reduced the fund balances in those funds, because we had built up excess because we had lower worker’s comp. Chair Filseth: Because worker’s comp is its own line too. Down below, worker’s comp. Ms. Nose: Say that again? Chair Filseth: Worker’s comp has a separate line down below. Ms. Nose: Oh, I’m sorry. Then in other benefits it’s got to be general liability, maybe. Let me look. Chair Filseth: I mean, it’s $70,000. It’s not a huge amount. Ms. Nose: Here it is. Understood. Give me one second. Chair Filseth: And I wanted to ask, what’s the difference between a Fire apparatus officer versus a Firefighter? Mr. Nickel: Well, you’re going to find out here in a couple of weeks, because we just promoted six of them, and we will be sending out an invite to Council Members, so an apparatus operator is the driver of the fire engine, the ladder truck and also the pump operator, so if we have to flow water, and you’ll be amazed at the six that we promoted. Chair Filseth: Okay. So, you guys have 109 FTE’s, of which 107 are sworn. Is that right? Mr. Nickel: I think I did the calculation. 101 point, so of the 109.2 FTE’s, 101 are sworn and 8 are nonsworn. Chair Filseth: Because I was going to say, you’ve got some admin assistants and business analysis and guys that wrangle data and stuff like that. Mr. Nickel: That’s correct, and the Fire Chief here wrangles data. Chair Filseth: He’s the chief data wrangler. Mr. Nickel: That is true. Chair Filseth: Got it. In terms of, okay, so you’ve got something 99 sort of operations people, and 8 Staff or something like that? Mr. Nickel: Correct. Chair Filseth: Okay. And that’s where the sworn are. Mr. Nickel: The majority of the sworn are in Emergency Response. Chair Filseth: So, the issue is that, well first of all, so if you were here for the discussion we had with Chief Watson earlier, but much briefer than that. You would have gotten one of these things. You know, I don’t think anybody knows the numbers as well as Council Member Tanaka, who put it together, but he’s worried about sort of the cost per residents of Palo Alto Fire Services versus others. Is that one of the metrics that you guys track out of your dashboard? Mr. Nickel: Absolutely. You know, I was thrilled, frankly, when I got this from Council Member Tanaka, because I’ve been working on something very similar for about four years, since I’ve been here. I speak on this Statewide and work with other Fire Chiefs Statewide, and what we’re really trying to do is, how do you compare an apple here to Mountain View’s orange. Because we do some things different here, like we operate two businesses. We operate fire rescue and we are the City’s ambulance service. Mountain View does not have that. So, looking at Council Member Tanaka’s numbers, you know, a couple things jumped out at me that, you know, were – one that I just want to clarify because when we look at Palo Alto, his numbers do not include the Stanford numbers. Chair Filseth: Which is 20 percent or something like that. Chief Nickel: Correct. So, we do dashboard this, we do metric this. My chart is a little bit bigger but tracks many of the same things. If you’d like to see this with the City Manager’s permission, I’d be happy to walk you through this. And it’s essentially a visual description of what Interim Chief Watson walked you through verbally. Chair Filseth: I think, if… I’m not sure we’re going to spend a lot of time on this. I guess from my perspective, I’d love to have sort of a consensus vision between Council Member Tanaka and the Department and the rest of us can say, okay, that the number. Mr. Keene: Well, there would be a better conversation if he was here. I think it’s one way to look at this, and as you will find out, this is just the doorway into deeper discussions and we sort of peel things away and get to the apples-to-apples piece of it. I mean, that’s what the Staff does. Council Member Holman: Can I also add too though that, with all due respect to Council Member Tanaka, especially since he’s not here, it’s like, this was done by one person, and not vetted or checked by anybody else. So, you know. Mr. Keene: Exactly. Mr. Nickel: Yeah, that’s correct. And that was the message is that it was a work in progress, as is this. And I think one of the things that… Mr. Keene: But, I mean, you could share just, I mean your own quick comparison is, you might have different Fiscal Years in play. Mr. Nickel: Right, and Council Member Tanaka’s, you know, ours is current Fiscal Year and Mountain View and Redwood City are last Fiscal Year, so clearly there’s a difference there. You know, Stanford is not included in our numbers. And you know, to the chart that I’m passing out now, this has been vetted by Fire’s Budget analyst, but we’ve been working on this document for years. This is a work in progress. What I was thrilled about seeing Council Member Tanaka’s today is, I’ve never had the daytime versus resident population, so I quickly added a couple of columns here that took that into consideration. And as I said, if you look at how we compare to agencies nearby us, we are doing incredibly well. I get there is the pension, the long-term liabilities are huge. That’s a Statewide issue. Yeah, and you see down here a couple of the agencies at the bottom and the top, so Santa Clara County Fire, Menlo Park Fire District, those are Fire districts. It’s its own government entity. You know, we are a full-service City, but if you see here, because the City is so aggressive at collecting revenue, the Department’s net hit to the General Fund is under 10 percent for our Fire Department. You don’t see Fire Departments anywhere in the State of California that have that. So, you walk across the top here and you look at the residential population, you look at the daytime population. If you do a cost per capita versus resident and daytime, we can look at it calls and cost per call, the next cost per call when you add in the revenue that we collect, you can look at cost per FTE and net cost per FTE, and then you get to the very lost column here, we’re the only agency that operates the ambulance service, and this is the highest rated City service. It is the ambulance transportation service. And the nightmares that are going on at the County level and are going on at the State level because cities do not have local control over their ambulance service, it’s tragic and it’s terrible to hear, but there are some doozies that are out there right now, and because of my work with the Fire Chief’s Department and the League of Cities, I will be the incoming president, I am unfortunately on the frontline Statewide for a lot of these ambulance issues. I mean, the League of Cities is all about local control, and this is something we do not ever want to give up control over. Chair Filseth: Well, that’s the challenge, because I mean the issue we have in long-term and we talked about this before and it’s getting bigger is, City revenues have gone up 6 percent per year, they’re going up 4 to 6 on average, 6 percent this year for 2018. You guys are going up 10 percent, between you guys and Chief Watson over there, that’s half the City’s Budget almost, right. Overall City expenses on average are going up 8 percent. If you guys are going up 10 or 11 percent, then basically the rest of it’s going up, you know, less than that. Director Gitelman over there is actually going down a little bit this year. But, it’s not sustainable and you know, you didn’t grow 10 percent last year, but it isn’t sustainable, particularly because it doesn’t include, you know, you mentioned CalPERS which is sort of the giant elephant in the room, but CalPERS is going to reduce their ROI picture from 7.5 percent to 7, as you know, and so once that happens, you’re 10 percent a year growth is going to go up to, it’s going to go north of there quite a bit. And then CalPERS is going to have to come back and do it again, because everybody knows their real number is 6 percent, right, okay not 7. So, they’re going to have to do it again, and City services, and this is going to apply to all the City expenditures, but it’s going to be most acute in Public Safety, is going to grow and grow and grow, and it’s going to grow substantially faster than revenues. So, your point about ambulance services and the response times and so forth, I mean, at some point it’s going to get crowded out. And that’s going to be a really hard thing for this community to swallow. But, I mean, the math is what it is, and we’re going to have to find some way to stop the expenses from growing at 10, 15 percent a year, because even now the CalPERS amortization factor has grown 15 percent a year and it’s not even remotely close to true. We don’t, CalPERS tells us what the normal cost is, but it’s not even remotely close to the real normal cost. So, it’s a situation that we’re not going to be able to maintain in the long run, or even maybe the medium run. So, I think the concern here is, we’ve got 100 sworn Firefighters. Less than 10 percent of our calls have anything to do with fires. So, other cities, and we’re going to have to do this too, we’re going to have to move to some kind of system where some of our services, EMT, you know you’ve mentioned ambulance before and so forth, aren’t delivered by sworn folks. And I don’t know if that means outsourcing or not. They could still be working for the City, but we’re going to have to have some other kind of cost structure. I mean, you’ve got 99 actual Firefighters now that are sworn Firefighters. If half of them weren’t sworn, that would be a huge difference, right? Let me ask a question. I mean, that’s the long-term picture. We’re not going to change that today, but it’s going to have to go that way. So, City expenses are going to grow 6 percent, or City revenues are going to grow 6 percent this coming year. If you guys grew 6 percent instead of 10 percent, that would cost basically $1.2 million less. So, what would you do if you had a million dollars less? I’m sorry to put you on the spot here, but it’s the nature of this kind of discussion. Mr. Nickel: Well, very simply, I mean, under the current labor structure we would have to close a Fire station. We would either not, we would take an engine company out of service, may not close the station, but, you know, a station that might have a fire engine and an ambulance, the ambulance would be the only piece of equipment at that station. So, we would have, our coverage distribution would still be there, it just would be something different. Chair Filseth: So, the circumstance that would happen would be, for example, we no bid the Stanford Fire contract? Mr. Nickel: The dollar amount would be much larger than that. We would likely be looking at closing, besides the Stanford station, we would, and again, this is a Council policy decision, that dollar difference would necessitate probably closing two stations, or taking two engine companies out of service, if everything was the same. There was no additional backfill from the General Fund, there were no additional revenue opportunities. There are some long-term opportunities. I mean, if you look at some of the interesting models out there, and frankly if I was in charge of running the ambulance service in Santa Clara County, we would have a fleet of ambulances that were red and operated by Fire agencies, so we would have access to different pools of money. Chair Filseth: The problem is they can’t afford it. Mr. Nickel: But those would be staffed by civilian employees, and your surge capacity when the system gets slammed with calls, is built into what we do now with cross staffed engine companies and ambulance companies. And, you know, peak demand, you put those surge units in service, you move engines around to keep your coverage, because everything is predicated around response time performance and effective response, effective response force. So, whatever the call is, if I need to put 20 at a house fire or three at an EMS call, I can do that in 8 minutes or less 90 percent of the time anywhere in the County. Chair Filseth: And you still do that with civilian employees? Mr. Nickel: You need the cooperation of labor. Chair Filseth: Right, with the cooperation of labor. Mr. Nickel: Yes sir. Chair Filseth: Can’t that be done here, with the cooperation of labor? Mr. Nickel: We’re working very hard. In fact, we had a very productive meeting this morning, by the way, so yes, we’re working very hard and closely with our labor group. But this is, much like the pension thing, this is a national issue for the labor groups. Chair Filseth: It is, very clearly, but it’s also a local issue, right. I mean, the history is, you know the history, right. But we all negotiated our contracts, so it’s a downhome issue for everybody too. I mean, you’re a numbers guy. You know the numbers, right. Ms. Nose: I just want to quickly answer your question on the general benefits allocation, so it is an allocated charge. Not worker’s comp, not to liability, but general benefits. Mr. Keene: Will we have a discussion about civilianizing Fire inspection? Mr. Nickel: We will have some opportunities likely in this next Budget year, as sworn members retire out of the bureau, and the Development Director, Peter and I, we’ve had this conversation with our Fire Marshal. There will be some opportunities there for some of our Fire Inspection hours and personnel to be handled either by contract or by civilian personnel. Chair Filseth: Can that be done this year? Mr. Nickel: That’s what I said, in this next budget cycle, yes. We’re anticipating probably two retirements out of the bureau. Chair Filseth: Got it, which you could back fill with a civilian potentially. I mean, we’re going to have to go there, right. There is, I don’t see any other way. Okay. Mr. Perez: So, a good example from last year’s unofficial long-term parking lot. Chair Filseth: Well, I think that needs to go in the long-term, well I mean, it’s the elephant in the long-term parking lot. So, I don’t see any other choice here, unless we can figure out how to make you guys a profit center or something like that. I don’t want to charge little old ladies $300,000 for this kind of stuff on fixed incomes either, right. Chief Nickel: Well, again, back to the comparisons here. There’s nobody doing it as good as we are with our cost recovery right now and the revenue and balance that out against the General Fund. Chair Filseth: Right. We have to make sure Stanford pays the full cost, right? Chief Nickel: No disagreement here. Chair Filseth: Go ahead. Because I’m going to make an Amendment. Council Member Holman: Tentatively approve the Fire Budget with, what’s your Amendment? Chair Filseth: Well, it’s going to be an unfriendly Amendment, so I’d rather you guys did the Motion. Council Member Holman: Okay, well that’s my Motion. Council Member Fine: I’ll second that. MOTION: Council Member Holman moved, seconded by Council Member Fine to tentatively approve the Fire Operating Budget. Chair Filseth: I’d like to propose that we take $1 million out of the Budget and put it in the parking lot. Is there a second? AMENDMENT: Chair Filseth moved, seconded by XX to tentatively approve the Fire Operating Budget with the removal of $1 million from the budget to be placed in the parking lot. Council Member Holman: Without identification of like, you’re just saying like generally take $1 million out of the budget? No identification of where it’s from? Chair Filseth: Well, out of the Fire Department, management judgement on what they do with it. Mr. Nickel: Just to clear, that’s a million on top of the million three that we’re already taking out? Chair Filseth: Yes. That would be going to a 2018 Budget of $30.6 million instead of, $30.8 million instead of $31.8. Council Member Holman: So, before I do or don’t accept that, could Chief respond to that, or just comment about it? Mr. Nickel: You’re closing an engine company, so one of the neighborhoods is going to lose their fire engine. Council Member Holman: Yeah, can’t do it. Chair Filseth: Seeing no second the Amendment fails. AMENDMENT FAILED DUE TO THE LACK OF THE SECOND Mr. Keene: Were you going to add your long-term parking request? Council Member Fine: So, I’m wondering if my Colleagues think it’s helpful to long-term explore charging for ambulance service. Chair Filseth, I totally hear you on little old ladies we don’t want to charge, but just on some quick search, there are a lot of departments in the Bay area and across California that are doing this. There may be some reasonable supportable fee where we can recover even more. I think that’s a good practice going forward. Chief Nickel: Back to the senior thing, I think it’s important to remember that under Medicare and Medicaid rules, those are capped payments, and we have to accept whatever they pay and we cannot go back and balance bill them. So, if Medicare pays, let’s say it’s a $300 fee and Medicare pays $150, we can’t go back to Mrs. Smith and say you owe use $150. We have to accept whatever is paid. So, that would, hopefully, mitigate some of the concern. Chair Filseth: That actually makes me feel better, not worse. Chief Nickel: Well, that’s what I mean. We would feel better because we’re not going an we’re not putting them in collections or something like that. We have to accept what Medicare and Medicaid pays. Council Member Holman: Yeah, and we’ve had this conversation before at the retreat and other places too. It’s like, we have a lot of people here, well, we have an aging population, as a lot of places do, and a lot of people are house rich and cash poor. Chair Filseth: Then, let’s seen then, can you restate your Motion, and then we’ll vote on it. Council Member Holman: It was to tentatively approve the Fire Budget. Chair Filseth: And what was the disposition of the… Council Member Fine: I didn’t make a specific Amendment. I’m interested in if you two would be interested in putting that item in the parking lot? Chair Filseth: I would. Council Member Fine: So, would you accept an Amendment that in the long-term parking lot we do come back to Council and potentially explore ways that we might be able to increase cost recovery for medical service? Council Member Holman: Sure, I can do that. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “and place in the parking lot discussion of options to increase cost recovery for emergency medical services.” MOTION AS AMENDED RESTATED: Council Member Holman moved, seconded by Council Member Fine to tentatively approve the Fire Operating Budget, and place in the parking lot discussion of options to increase cost recovery for emergency medical services. Chair Filseth: Okay, all in favor? Opposed? MOTION AS AMENDED PASSED: 2-1 Filseth no, Tanaka absent Mr. Keene: Okay, thank you Chief. Chair and Committee, it’s 10:00 almost. You have Community Services Department and Planning. CSD first. Okay, fine. The Committee took a break from 9:56 P.M. to 10:02 P.M. At this time the Committee heard Agenda Item 6. 6. Planning and Community Environment, Operating Budget. Hillary Gitelman, Director of Planning and Community Environment: Good evening. Hillary Gitelman, the Planning Director. I’m joined by Sherry Nikzat, who I hope you know, our administrative person in the Department. A very small department, 42.5 fulltime equivalents, although some of these folks are budgeted to other departments and funds. We are bringing you a Budget this evening that includes, oh, and by the way, I’m not going to go through the slides, just real short summary, we’re bringing you a Budget that includes an incremental reduction in cost because of our shift of some staffing to CIP and other funds. Chair Filseth: PCE gets a gold star. Ms. Gitelman: A gold star!! James Keene, City Manager: Well, we’re paying for it with different money. Transparency. Ms. Gitelman: Even better than that. Council Member Holman: Of course, Eric has one way of measuring. Chair Filseth: It’s not the best way, it’s the only way. Ms. Gitelman: So, even better than the reduction in cost is increase in revenues due to the fee increases that we implemented last year. Actually, we had increases in 2016 first phase, then we did a cost of living in early 2017 and we have another phase of our Fee Study supported increases coming with this Budget cycle. So, the real story in our Budget this year is what’s not included. We’ve talked about the TMA which is now out of our Budget and in the University Ave Parking Fund. We talked about paid parking revenues, Measure B Funds, none of those revenues are reflected here. We also do not have this year, the Planning and Transportation contingency that we’ve had in past years that gave us some flexibility to be a little more responsive to new ideas that came up on the course of the year. This year we used that fund for the ICOR guidelines, for a gap in funding for the shuttle and for the Middlefield Road North improvements. So, we really got some value out of that, and that is no longer in the Budget. We also did not increase resources allocated to code enforcement. I know there’s been a lot of conversation about code enforcement and we considered adding a position to do a more kind of proactive approach, and we didn’t get that, the City Manager’s support for that. So, that’s not reflected here. That’s what we’ve got. I’d be happy to answer questions. Chair Filseth: Council Member Holman. Council Member Holman: So, some of my questions about your Budget were answered earlier when we said, “What’s that, what’s that?” Because I was wondering like where’s RPP and all that sort of stuff, so some of those questions were answered earlier. Tell me your argument for adding another code enforcement person. You said it wasn’t approved by the City Manager’s Office, but what would your argument be? Ms. Gitelman: Well, we made the pitch. Right now, we have three fulltime equivalents. One of those positions was new now last year but the year before, and I’ve always thought of code enforcement as a resource constrained function. You could do as much code enforcement as you have people to do it. And the more people you have, the more proactive you can be. We tend to run a program that’s complaint-based. We get a complaint, we investigate the complaint and we work to abate the violation. With more resources, it would be possible to be more proactive and go out looking for violations, particularly when it comes to conditions of approval and things like that. And, you know, it’s just one of those things that is always a tough decision, how much do you want to spend on that kind of function. Council Member Holman: So, it is one of the larger things that people complain about in the public. We also have, seems to be, a practice, and I’ve heard from a number of people, including Staff in the field, just kind of hear their scattered, that we don’t – and it’s always been like a curiosity to me that we, of course you always want to try to get compliance first, of course. But it seems to be a culture that we don’t charge penalties or fines, and even when there is recidivism, so I’m just kind of wondering how an additional code enforcement person might, the cost of that might be offset by fines and penalties that we might collect if we were actually enforcing with some teeth. Have you had any opportunity or time to think about that. Ms. Gitelman: Well, to be honest with you, and I’ve worked in code enforcement not just here, but in other jurisdictions. Fines are really a last resort. We’ve had some instances this year where we’ve collected a ginormous fine, but that is really unusual. Normally, you get through a year of code enforcement activities and you have to use fines very sparingly. Normally the revenues you see are because you have to, are forced to take action, like clean up a sloppy property and then you place a lien on the property to get the money funded. That’s much more common in the world of code enforcement than actually using fines and penalties as a tool. So, I think the potential to make revenue to support a position would be low unless our system, unless we changed our Ordinances and our approvals to require some kind of funding at the time of approval to monitor conditions. Council Member Holman: So, I wouldn’t expect code enforcement position to be totally sponsored by fines and penalties. That’s not, my goal isn’t to go out there and like pinch people, if you will. But we do have things that we don’t do, and I’m presuming it’s because we don’t have the Staff to do it. For instance, planned community zones are supposed to be inspected every three years, whether it’s in the specific Ordinance for the project or not, our PC Ordinance says they’re supposed to be inspected every three years. I’ve never heard of us ever doing that. Maybe once, when Curtis Williams was here, maybe once. And then we have a number of repeat violators that just, you know, without some kind of enforcement that is a penalty, they just come into compliance and then once the City leaves, they go back to being out of compliance. So, it seems there would be, I don’t know if it’s 20 percent, I have no idea what a percentage would be. Some sort of backfill for that position. The other thing is, so a question I had is, where is the money in the Budget, this is a question for Lalo, where is the money in the Budget of collected penalties this year, because it’s been pretty significant? Ms. Gitelman: It’s General Fund revenue that came to our department. Council Member Holman: Can you point to that? Ms. Gitelman: Well, this is looking forward and I don’t think we’re projecting that kind of magnitude of fines will continue in the future year. Lalo Perez, Chief Financial Officer: Right, and it would be reported in the year-end financial. Kiely Nose, Budget Manager: Council Member, if you look on Page 322, just if you look in Fiscal Year ’16 actuals, you’ll see a spike under other taxes and fines. Ms. Gitelman: Oh, there it is, some of it. Ms. Nose: And so that’s what was collected, not necessarily from one case, but in general, that is the spike and where you would see it. We don’t necessarily Budget for that, because that is atypical. Council Member Holman: No, you would not want to Budget for it, but I just wondered, you know, pops out. Ms. Gitelman: I think if you’re interested in the revenue side of code enforcement, it would make sense to do comparables to other jurisdictions like you’ve been talking about for other functions. Unless I’m really way off, I don’t think you’re going to find agencies supporting themselves with fines and penalties. Council Member Holman: And that’s not my goal. I would not expect fines and penalties to offset the cost of an additional employee. Code enforcement is, it looks like, what is that, about $100,000 a person? Do I read that right on 323? Chair Filseth: I calculated $105 to $110, plus benefits. Mr. Keene: Plus, benefits. Council Member Holman: Yeah, so I was doing it in my head, so I’m glad you did the math. Yeah, it’s something I think we ought to consider. And then the other thing, maybe it’s a parking lot issue. And then the other thing is, you don’t have a contingency that you were asking for this year. Mr. Keene: Part of the contingency was due to the fact that there were a host of emergent requests being made and they were also, I don’t want to say unfocused, but all over the map and needed to have a contingency to allow us the flexibility. I think there’s one, a little more clarity about what we’re doing, and there’s still some real uncertainty about where we, what we need to do next and where we need to go, both on the – a lot of the stuff on the parking side and those sorts of things, and I’m sorry that you don’t like BAO’s and that sort of thing, but we need to come back to you when we’ve got more specific requests, you know. Rather than just saying, putting pressure on the whole General Fund Budget and let’s just say, that’s an issue that I think we’re just in a tighter Budget situation, so we want to be careful about that. Council Member Holman: And I appreciate that and I don’t like BAO’s and we look at just last night, they had a laundry list of transportation and parking projects that are underway, so I guess my question is, are you good with supporting all of those. We’re told we don’t have Staff to undertake exploration of an employee tax, for instance. It’s like… Ms. Gitelman: Well, again, I think the Council’s direction last night was perfectly appropriate. We’re going to come back to the Council in the fall with a fuller explanation of the projects that are funded, those that are not, and by then we’ll have a better understanding of the measure B revenues and other sources of funding that could support the projects. So, I think we’re, as the City Manager said, we’re doing it a little differently this year, but we’re still going to be able to engage with the Council on these conversations about new challenges and new opportunities that come up in the course of the year. Council Member Holman: So, I’m asking less about what the funding sources are for, from BTA, for instance, from Measure B for instance. I’m asking more about the impact on Staff to employ those funds, should they come to pass. So, is that something you could anticipate, staffing need, or is that just too much of a hypothetical? Ms. Gitelman: I think we’re going to have to look at it as a piece and I appreciated the Council’s direction last night to come back in August, September with a full picture, and that will include Staff resources as well as revenues and expenses. Council Member Holman: I have this BAO, BAO, BAO flash going on. Mr. Keene: BAO is preferable to straining the General Fund Budget by putting in a contingency that we would then have to think about cutting something else right now. I think you would agree. Council Member Holman: I don’t know, there are always tradeoffs. Chair Filseth: That’s the only advantage, if the BAO is self-funding. Mr. Keene: Yeah, that’s right, but that’s, hopefully, one of the things, or that we’re really clear about, give us some time to think about how we would fund it. Council Member Holman: Well, we could think of it as self-funding, but we could also think about it as, like if we have x number of dollars in the reserves because of the Budget we passed, but then we pass a number of BAO’s, then our reserves go down. So, that’s why I don’t like BAO’s. I want to know as best as possible where we’re going to end up at the end of the year, understanding that some things are unpredictable, of course. So, I think those are my questions and comments. I hope you remember that I was the one who put the contingency in the Budget last year for your department, because I’m not trying to promote you to ask for more. I appreciate that you have some reduction here and also, know how many projects we have and I don’t want to put undue stress on your department because we do have so many things in play. Chair Filseth: We do, and we still haven’t forgiven you. Council Member Holman: And what did you say? Chair Filseth: We still haven’t forgiven you. Council Member Fine. Council Member Fine: Thank you. Thank you Director Gitelman. I share some of Council Member Holman’s concerns. If the Council saw fit to give you half a million dollars yesterday, last year in contingency, and we’re not doing it this year, there should be some rationale for that one year to another, but I think for the time being, especially after yesterday’s conversation, we’re looking to kind of prioritize Budget on both sides, some of those projects we’ve asked for. And as those get further baked along in the year, if we come back with a BAO, okay. And, guys you mentioned, Chair Filseth, whether it’s self-funded or we’re transferring out from somewhere else, that’s something we can get to at that point, once we know those priorities. Thank you for coming back with a Budget that is lower. I think we all like that. I’m just wondering, is that mostly being driven by the loss of the 1.3 FTE’s? Is that the main driving factor that allows this department to be under? Ms. Gitelman: Yeah, we’re shifting Staff to other funds and there is a small decrease in other costs, contracts. Sherry Nikzat, Management Analyst: It’s just a one time from last year. Council Member Fine: I mean, that’s great. It’s nice to see – I will say I was a little concerned looking over, again, some of the positions that were being lost to like we’re going to one-fifth of the Transportation Planning Manager, you know, zero parking operations person. You know, those seem to be the areas we’re focused on, and I wonder if those… Ms. Gitelman: It’s really because they’re being shifted into CIP projects, and it really reflects what those positions are doing right now. Council Member Fine: They’re being a little more focused on that area. Ms. Gitelman: We think it’s justified. Council Member Fine: Beyond that, I didn’t really have any questions. I think that’s it. Ms. Nose: Just one follow up. It’s not just the position shifting, it’s also the reduction in the TMA funding and shifting that out to the Parking Fund. It’s also the reduction of the, determination rather, of the East Palo Alto shuttle. So, we’ve switched that year-over-year. So, that’s a big component as well. Ms. Gitelman: That was really revenues and expenses. Ms. Nose: It was, yes. Chair Filseth: I think, that was my take on this too, that, I mean, it’s good. At some level, as the Chief would point out, it’s which bucket do you recognize it in, and if there’s stuff moving from buckets to buckets, then from year to year you get changes and so forth. Most of my questions got answered already, which had to do with, what are we giving up, right. But, let me ask a question. Everybody touch wood, the Comp Plan will be sort of done by the end of the year. Do you anticipate much band width getting freed up next year by that? Ms. Gitelman: Yes, we had a conversation this morning, in fact, about some projects that are in the queue. You know, we had the Council Members and members of the public raised the Fry’s site and that could be a multi-year planning effort. We’ve also had members of the public and Council Members talk about vacation rentals and tackling what is likely to be a long and complicated planning process around that issue. So, we will have band width to tackle those things. Chair Filseth: That’s going to be a happy day, sort of. Okay. So, it looked like sort of there was a bunch of stuff going back and forth between the CIP, and the revenue increase was primarily because of the sort of rejiggering of fees that we did? I think you said something like that. Ms. Gitelman: Yeah, we’ve had increases in fees in a couple phases, and then also we’re making a concerted effort, thanks to Sherry and her team, to increase cost recovery, for cost recovery projects, so we’re doing better billing and going back and getting money that’s owed to us. Chair Filseth: Do you think that trend is going to continue into 2019? Or do you think we’re going to basically get there. It’s a one-time level set? Ms. Gitelman: I think the cost recovery practices we’re putting in place will mean that we sort of do better and it will level out at some point. But, you know, we’ll continue to look at our fees. We have a project to look at impact, you know, our transportation impact fees later this year, so there will be other increases in revenue that would affect one of the Special Revenue Funds. Chair Filseth: Alright. Thank you very much. Council Member Fine. Council Member Fine: I’ll make a Motion that we tentatively approve the Budget for Planning and Community Environment. Chair Filseth: I’ll second. MOTION: Council Member Fine moved, seconded by Chair Filseth to tentatively approve the Planning and Community Environment Operating Budget. Chair Filseth: Any further discussion? Council Member Holman: Can I add an Amendment that we put in the parking lot the, a discussion of an additional code enforcement person, pending information from Director about any amount of cost recovery. Council Member Fine: I’m going to take that unfriendly, just since this is the one budget that we’re actually under and I don’t want to blow that up. Council Member Holman: I don’t think because it’s under budget is a reason not to – it’s like, if it’s. Chair Filseth: If you would like to bring it up during the parking lot discussion, you can do that. Council Member Holman: I will do that. AMENDMENT: Council Member Holman moved, seconded by Council Member XX to place in the parking lot an additional Code Enforcement position. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Chair Filseth: All in favor? Two in favor. All against? One opposed. Motion carries with Council Members Fine and Filseth in favor, Council Member Holman opposed. MOTION PASSED: 2-1 Holman no, Tanaka absent Council Member Holman: But can I ask the Director to provide that information when we do the parking lot discussion? Thank you. 5. Community Services. Chair Filseth: Thanks so much for staying so late. Welcome DCM de Geus. Rob de Geus, Community Services Director: Ready to jump right in? Okay. Rob de Geus, Director of Community Services here. I’m joined by Jazmin Leblanc. She’s a senior analyst in the Department. Go ahead and jump to the next slide. Just a couple of slides quickly on the accomplishments and initiatives. Last year we were able to do a lot of work on Bixby Park. It’s something that we’re all very proud of. We also completed the Public Park Master Plan and we have a draft completion of the Parks Master Plan. It will be before Council in the next couple of months. We also celebrated some anniversaries of the Children’s Theater and the Art Center. And we had some really fascinating and engaging community forms with our Human Relations Commission and Office of Human Services. As we look forward to next year, we will complete the golf course and reopen it. We will get started on the Cubberley Master Plan. We will also begin the Baylands Comprehensive Conservation Plan. Hopefully, we will begin the construction of the Junior Museum and Zoo with the Friends of the Junior Museum and Zoo reaching their $25 million target, fundraising target, in January, this past January. We will also finish the Buckeye Creek Hydrology Study at the Foothills Park that will inform what we do with the 7.7 acres that we recently included as park land up at the park. Next slide. In terms of significant Budget proposals, we do have some interesting things happening that impact the Budget, but I would say mostly it’s not, there isn’t any significant Budget impacts. We have a Budget for you that has increased revenues that essentially cover all the increased costs, increasing, I mean covering the costs of increased services that are being delivered, both recovering the costs of increased benefits that are built into the Budget. A couple of things we wanted to mention, before we get into discussions. We’re trying something new at the aquatics program, trying to partner with a private sector group to run our pool. We already have some contracts that are doing some programs. We expanded our swim lesson program already earlier this year, which is going very well, and we’re looking to have a full-service contract with a private organization. We think that will yield improved services and more access to the pool and be more financially stable over the long term and allow us to, hopefully, first freeze, and the eliminate a position within the Department. In the Budget we see a number of increased revenues offset by some increased costs for expanding programs. We looked at all of our revenue sources and streams within the Department to see where we could push revenues a little further for greater cost recovery, and so we did that and you will see a number of those in the budget. We also will, in the Budget, the biggest Budget impact you see there is the golf course reopening. The course had been closed this last year, so we have a significant increase in revenues and then offsetting increasing costs to open the golf course this November is the plan. We are on Budget and on schedule with the golf course. We’re happy to report that. The last thing is the HSRAP funding allocation. We’ve had our Human Relations Commission work diligently with Staff on proposing a set of allocations for HSRAP. A little twist at the end, where we had one group that we did allocate funding for Adolescent Counseling Services (ACS) that does on-campus counseling at the school district, then it turns out was not actually going to be able to provide those services at the school district. The school district put out an Request for Proposal (RFP) and ACS decided not to respond to that RFP. So, then they withdrew and, of course, we won’t be allocating funds to ACS for that service. Staff is recommending that that balance of funds that would have gone to Adolescent Counseling Services be put out for a second RFP. That would allow for the new service provider that’s going to provide counseling services at the school to bid, along with other agencies and existing partners to bid as well, and then the HRC could review that and bring it back to Council. And the final thing I wanted to mention was the Youth Community Services matching grant opportunity. This is something that the Council saw yesterday evening from a Colleague’s Memo. This is, and as it was referred to the Finance Committee seems appropriate to bring it up this evening. Youth Community Services is a wonderful partner of the City and Community Services to do really good work and certainly we’re very supportive of that opportunity. So, with that, I’m available to answer questions. Chair Filseth: Thank you. Council Member Holman. Council Member Holman: Sure. So, this is a question I had asked a little while back. The Council last year asked for Policy and Services to recommend back to Council about a $200,000 increase, and I just don’t remember that coming to Council with a recommendation from P&S, but I don’t see it here either. I mean, this is a basic 2.5 percent increase, so what happened to that. Mr. de Geus: My recollection, Council Member Holman, was that it did go to PNS. Council Member Holman: I know it went to P&S. Mr. de Geus: Right, and we had a lengthy discussion there, but it was not a Motion that was approved by P&S to add money to the Budget for HSRAP. In fact, I think what was suggested, there was a Motion made, but it didn’t pass, and it was that decision to add money to HSRAP should be made as part of the entire Budget process with the Finance Committee, and not outside the Budget process. Council Member Holman: But I don’t recall that recommendation ever coming to the Council and the Policy and Services Committee can’t make decisions. They have to recommend to Council. So, I don’t remember that coming to the Council. Mr. de Geus: I don’t think there was a specific recommendation to go back to the Council. There was a recommendation to add HSRAP funding in advance of the Budget season beginning to HSRAP. That Motion didn’t pass and the reason it didn’t pass was the other Committee Members felt that it should come up during the Finance Committee process, not outside of the Budget process. It wasn’t a Motion. That was the rationale for why they didn’t support that particular Motion. Council Member Holman: I understand and I heard that, but it still seems like that should have come to the Council for discussion. So, are you saying that, because it didn’t just die at Committee. Whatever happens at Committee should come back to the Council has been my experience. So, are you saying that based on that discussion at P&S, that this Committee now is supposed to look at, while it’s not built into the Budget, we should look at adding that $200,000 or some portion of that to this Budget for HSRAP? Mr. de Geus: That’s correct. I can tell you the Staff looked at it as well, because we prepared the Budget, but this was a tough Budget season and cycle, and the direction we were tasked with, really, as a City and every department was to do our very best to put forward a Budget that either saved the City money, or was a zero sort of sum Budget, so we did not elect to recommend an increase there. Council Member Holman: Well, I’m going to state that I’m really unhappy with the process this has followed and I’m not pointing, I’m looking at you, but it doesn’t mean I’m pointing to you as, just, it is what it is, but I’m not happy with the process this has followed. The HRC has already done its due diligence on making recommendations and allocations. That stands for two years, though, so it’s not like we can change it next year. You’ve heard me on this before. It’s, you know, I don’t even know if we’re back up to where we were when the downturn happened, but I know we’re, we haven’t kept up with what other expenses have been, and these are our, I’m preaching to the choir when it comes to the HRC members back there, but these are the organizations that provide critical services to our community, so what happened with the ACS funding? Has that been dealt with, Adolescent Counseling Services, has that been dealt with at the Human Relations Commission (HRC)? Mr. de Geus: No. So, it sits unallocated at this time, and it’s $111,000 that Staff is recommending that we issue a second RFP that would allow the company or firm that’s going to be providing the on-campus counseling services to be able to bid along with other interested parties. That’s the recommendation of Staff and the HRC. Council Member Holman: So, that won’t happen, obviously, during the formal Budget process. Mr. de Geus: No. Council Member Holman: Because of the timing. So, I’ll see what my other Colleagues have to say, but again, well, I don’t have to repeat myself. So, that was my question on that. Hang on a second, I do have some things highlighted here. Can you just quickly go over the, on Packet Page 206, I have a lot of these highlighted here. On Packet Page 206 under budgeted adjustments, can you go over these, if you would. Kiely Nose, Budget Manager: The one through eight? Council Member Holman: Yeah. I mean the why’s or where’s. Ms. Nose: So, Rob, it’s just all the Budget proposals from this year. James Keene, City Manager: The first two, one and two, just drop these in parentheses, these were positive. Mr. de Geus: These are the Budget adjustments on Page 206? Council Member Holman: Yes sir. Mr. de Geus: So, the narrative description of each of these eight are on the next three Pages, I believe, for each of those. But they include some increasing programs and events offset by revenues. This is at the Junior Museum and Zoo and the Art Center primarily. It includes the aquatics program where we are freezing a fulltime Reparation Coordinator position. We’ll say that there will be additional adjustments related to the aquatics program beyond just the freezing of that position. We’re still working on terms and condition with the private firm that won the bid that we went out for. The open space parks and golf maintenance relates to one-time savings for irrigation maintenance for the golf course. It’s a brand-new irrigation system. The special events funding, this is not one that we’re too thrilled about. We’re just, again, trying to keep a balanced Budget, but we felt like we could manage trimming down a little bit on that fund and the others are very minor. Council Member Holman: Yeah, you don’t need to do those. So, one of the ones I was interested in, especially in that list, is the, thank you to City Manager who corrected one and two. And then the special events staffing, that is of a concern. I mean, it’s really of a concern because we have special events and, you know, how to say this, we do a good job with them. We do a pretty good job of getting, you know we have the Stanford Credit Union, which is a regular and consistent supporter of a lot of these projects. I’m a little concerned that we don’t have enough of that Staff, and I’m a little concerned that we don’t have enough institutional memory among that Staff, because without naming incidents, I’ve seen kind of gaffs that have happened, and just kind of things that aren’t taken up because someone didn’t know to take them up. Again, it’s, institutional memory is a part of that, but I think it’s also some bandwidth. Mr. de Geus: Yeah, it’s been challenging, special events. You know, years ago, of course, we had fulltime special events Staff and I think we’re heading back in the direction. We’ve tried doing the events with a contractor. It’s great if you have a local contractor that really knows and is connected and that worked for a little while, but that ultimately wasn’t sustainable. Now we’re going back to hiring hourly Staff, temporary hourly Staff that can work up to $1,000 a year and run events that way with support from the rest of the Department that will support them in one way or another. We think that can be more effective. Yeah, events are, people want to see more of them. It’s really true and they take a lot of time and effort to manage. Council Member Holman: And there’s crossover from one event to the next too. You know, even if it’s a different kind of event, there’s still some commonalties among them in terms of processes and contacts and supporters and that sort of thing. Mr. de Geus: We have about $130,000, somewhere in that range, for special events. So, this is not a huge cut to the program, but it is an impact, certainly. Council Member Holman: It is an impact. Mr. Keene: Could I make a suggestion? I don’t want to deflect something more immediate, and we’ve had these conversations before, that in a lot of ways, special events are something that really add a lot of meaningful value to the community, and in many ways, often to community members who aren’t always typically kind of engaged with City stuff. I mean, there’s, not all that often, when I’m at the parades or these other things, that the folks who regularly come to the Council Meetings and are concerned about parking are there. So, this is a place where we do touch the community in a pretty distinctive way, and there is a big bang for the buck, usually the return on it. That being said, there is a long-term parking lot conversation that we ought to have, because we also, we don’t just do special events just out of CSD, even they’re predominant. I mean, Utilities actually puts some on the Great Race for saving water, you know, they’re involved. Libraries does different things. You know, I don’t think we’ve ever had a thorough kind of discussion about really what does the year look like, and how much of it – here’s the trouble, we do routine special events now, so they don’t even seem as special as the special one we now need to do, but we should not lose sight of all of that. And then to really be able to have a talk about, and even get some community participation a little bit, some feedback about how worthwhile it can be. I think it might be an area where we would really strategically say, we want to do more or do differently, as opposed to just an incremental shift that says, let’s get $10,000 more back in, or whatever. I just think it’s a bigger conversation. Council Member Holman: I don’t disagree with that, and at the same time, I mean, $10,000 is maybe going to make or break. I don’t know how you came up with that number, but I just want to point out that 2019 is the 125th anniversary of Palo Alto, and it’s in the spring. We’re not going to wait until 2019 to start planning for that event. The public is already talking about it. It’s like, what are we going to do. I was at an event Sunday and the public was talking about it. It’s like, what’s going to happen, you know, blah, blah, blah. So, that’s going to be a really important one. When we had the 100th anniversary it was a big flaming deal, and a lot of the public was involved in it, whether it was residents or public. Not to speak too much about this, but when we, in 2015 when we had the Meet the Street event, that was really good for not just the public, but it was really good for the business community too. We went around and gave prizes to the businesses that had been voted as like the best this or that. So, Tom Fahrenbach and I went around to - some of the prize winners were basically all of the clothiers, and every one of them, everyone said, their business had improved because of that. They had lines out the door. People knew about them that didn’t know about them before. We just can’t let that kind of stuff fade away. And you don’t (crosstalk). Chair Filseth: Well, do you want to go back and cut $1 million out of Fire, we can do that. I mean, they’re all important, Karen. I mean, this is the choices we (crosstalk). Council Member Holman: I know, I know. So, we could have, if we close a Fire station, we could have fashion shows at the Fire station. But, I just think it’s one that, you know, it’s great visibility and benefits the public and the businesses, and we’ve got the 125th anniversary coming. Mr. de Geus: I do tend to agree with the City Manager. This is probably a bigger topic. $10,000 is not going to make or break the special events. Council Member Holman: It’s not, but we can’t wait till next year’s Budget to start planning for the 125th anniversary. Mr. de Geus: Right, I agree. I will say that the Stanford Federal Credit Union has been terrific. They have given us $50,000 a year for the last three years; however, this year they dropped that down to $25,000 so that is another pinch that we are dealing with there. Now we are looking for other funders and, hopefully, we will get other people to step in. Council Member Holman: Do you know why? Mr. de Geus: They have other options and choices and as they looked at their Budget, they felt they couldn’t do the full $50,000 this year. Council Member Holman: So, I mean, yeah, we have big appetites, but I just think this one is – so, you’re Department has two of my big-ticket items, and really hot button things, HSRAP funding and special events. So, I think those were may big things. Chair Filseth: Council Member Fine. Council Member Fine: Thank you. So, thank you for this Budget. I was pleased to see a lot of cost savings across a range of different items. I think that’s helpful and that kind of gets to your question about, what are all these Budget adjustments? A few specific questions. So, one, just looking at the golf finances, it looks like the golf course will be coming more cost positive for us, we see that trend continuing going forward. Mr. Keene: Yes, it better. Mr. de Geus: Right, it better, and I hope it does. There are some, there is some risk. We’re not the only golf course on the peninsula. It’s a pretty saturated market. What we have is a really quality design and product that we’re putting out there. It’s coming together very nicely, but it’s going to depend on the public wanting to play there and come back and play there, so we have to do everything we can to have a great operator out there and a great experience out there for the golfing public. So, that’s the next step that we’re working on. But there are some unknowns and risks related to the golf course. Council Member Holman: You need to have a special event at the golf course. Mr. de Geus: We will, we’ll have a grand opening. Council Member Fine: I mean, it may be there, but I guess I would just encourage the City to look for other synergies where we could promote that as an option for golfers on the peninsula, things like that just going forward. A question on the JMZ Staff. So, we’re adding one person there. I just thought it was interesting and this is maybe nothing, but it’s interesting we’re adding Staff this year at the JMZ, when we’re just about to, not just about, but soon, going to rebuild the whole museum. So, I’m just wondering. Mr. de Geus: Yeah, that is a fair point. So, even when we rebuild the Junior Museum, all of the education programs are going to continue. We hope to be at Cubberley, in fact, in some ways they need to be even more visible so we retain people’s interest in the Junior Museum and Zoo and stay engaged. So, that’s going to continue to happen and they are, the Staff, are under resourced, as I see it and understand it from talking to the Staff. They could use the help. We’ve tried to be creative in what we’ve proposed here. It’s not a fulltime FTE increase, it’s just some minor adjustments, five part-time. Council Member Fine: So, that’s helpful. I guess it’s just interesting to me that we’re rebuilding this facility, we’re adding Staff now. That may be important to cover the interim, but are we keeping that person afterwards with the new facility? Mr. de Geus: It’s temporary stuff and it’s offset by revenue, so I wanted to point that out. But also, and Jazmin, thank you for reminding me. It also relates to the interpretive center at the Baylands, which we don’t open as much as we’d like to and the Junior Museum and Zoo actually oversees that interpretive center and they bring our classroom kids to that center, I think over 1,000 kids a year. That’s one of the program we’re expanding and need more Staff for. Council Member Fine: And just two other questions. One, on Page 202, contract services are increasing by about $1 million dollars, 27 percent? Mr. de Geus: That’s the golf course coming back on line with maintenance and a golf course professional. Council Member Fine: I don’t know if other cities do this. I guess it’s nice for me to think of contract services in terms of hard and soft ones. That seems like a hard contract cost. That may be helpful going forward. And then, just a lost thing, it’s on HSRAP. There are two that kind of stand out to me. So, one is community working group, they’re asking for $84,000 and we’re giving them nothing. Maybe they asked for too much. I’ll just float it to my Colleagues, that seems like a bit of a gap there. The other one is KARA and can somebody remind me what they do. (Inaudible). Okay. So, those are the two that kind of stand out in this list to my, on top of the YCS thing, which Karen and I were pushing last night. Why haven’t we funded the community working group? Why do we still include it in the allocation pond if they’re not asking? Or if they’re asking and we’re just not giving? Mr. de Geus: I’m going to ask our HRC, Minka if she’s still here, to help answer that question. Since she was so close to it and worked with the HRC in the deliberation. Minka Van Der Zwaag, Human Services Manager: Sure. Minka Van Der Zwaag, Human Services Manager. I oversaw the HSRAP process with the Human Relations Commission. So, community working group, this was their first time asking for HSRAP Funds. They asked, so we had two new applicants this year. One was KARA and one was community working work. So, KARA asked for $30,000. It was mostly program expenses to run programs, grief services. Community working group asked for $84,000 and it was quite a different ask for the HSRAP program. It was for operational costs. So, it was asking the City to cover janitorial costs, City Utility costs to buy back to the City, their property taxes. So, at the point of reviewing the applications, the HRC Selection Committee was looking over these applications and at that point we only had about $8,000 that was unallocated to be able to give to them, because they had a strong commitment. So, they looked at those two applications. They felt the KARA one, you could scale down a program cost from $30 to $8, but they didn’t know how to parse the other grant. Council Member Fine: So, I guess I would say one comment there, it would be helpful to provide that feedback to the community working group. Ms. Van Der Zwaag: We have done so. Council Member Fine: Okay, excellent. It is a great program here in Palo Alto and deserves, or I think it deserves some help going forward, but if their application was really just off the ranch, then let’s let them know that. I think that’s all my questions here for now. Chair Filseth: Thank you. So, a couple of mine got answered already. I wanted to ask, when do you think you’ll have more visibility onto the aquatics evolution? Mr. de Geus: So, we have a community meeting tomorrow evening, actually, with our lap swimmers and another one next week, I believe, and then with the Parks and Rec Commission on May 23rd, with a pretty good outline of the program that we want to present to Council. So, we hope to still be able to get to Council in June, before the break if we can, so the new firm could start after the summer. Chair Filseth: Do you expect to see significant differences in 2019 versus 2018? Mr. de Geus: We do. There will be a decrease in revenues because we’ve been running the program and there’s revenues, and also a significant decrease in other costs, because we’ve been hiring all the lifeguards. But the big difference will be, you’ll see the program change. The pool will be open more. There will be more activity out there and I think the community will really appreciate that. Chair Filseth: I think the potential to expand services without, sort of given all the other constraints, we don’t have too many opportunity like that, so I think that’s good. Can I ask, how many total FTE’s there are in aquatics today? Mr. de Geus: That’s a good question. We have one fulltime FTE. It’s a position called a Recreation Coordinator position. We have four of them in Community Services. When another vacated I specifically did not fill it, thinking that this may come about. So, the individual that runs our aquatics program in the Recreation Coordinator position has another place to land. So, that is one, then we have hourly Staff. We have a number of seasonal hourly Staff that are not represented, and we have a handful of hourly Staff that are represented, working with our HR folks and labor to make sure that we do what we need to there. Chair Filseth: Okay. I wanted to ask about the YCS, which we discussed yesterday. So, if I recall correctly, it was like $50,000 a year, or something like that? Mr. de Geus: $50,000 a year for three years with a matching $50,000 from Santa Clara County. Chair Filseth: Is that noise, I suppose that’s noise relative to this? So, it’s neither in here nor not in here? Mr. de Geus: That’s right. Chair Filseth: That was me. Council Member Holman. Council Member Holman: So, how many do the special events, two things. One is, and before I forget it too, we have a couple HRC members here, and I just want to thank you. You’ve done, you and your Colleagues have done a tremendous job for the last many years, and hats off to you. You’ve just done a yeoman’s, outstanding, remarkable benchmarking job. I can’t say enough. So, thank you very, very much. May Fete parade, just to use an example. So, the route was shortened this year and I’m curious as to why. It has to do with the special events thing here, so I was curious as to why the route was shortened, and also, how have the number of entrants been tracking, because it seemed kind of light this year? Mr. de Geus: Our entrants were pretty good this year. We had 63, which is typical. We’ve had higher. We’ve had as high as in the 80’s but in more recent years it’s been within the 60 to 70 range. The question about the route being shortened, we did get complaints last year that it was too long. We did have the parade, on several blocks that the parade was going but there was nobody on the sides of the street, and so that was a challenge. We certainly want to include our senior folks, so that was a tradeoff, not going up as far as that. We created a special spot, VIP and we bussed them down a few blocks so they could participate. We had 30 or so participants. We we’re still debriefing the parade because it just happened over the weekend. Mostly good feedback, positive feedback about the parade. We did get a little bit of feedback that it seemed too quick. Council Member Holman: Like last year. Mr. de Geus: So, that’s something we’ll look at again with pacing, it needs to slow down a little bit or we need to still maybe stretch the parade a little further. So, we’ll look at all of those things. Council Member Holman: So, it has to do with, it’s a little bit cause and effect, so in years past the route was even longer, (inaudible) yes, it was even longer, and it has to do with Staff associated with special events coordinator and planner, whoever that is. But, you know, changes don’t happen in one year or even two years, but it’s a long discussion. I’m sorry about this. I’ll just bring up a few things here. It’s like, you know, getting it back to be more entrants, more pets involved. It just changes the dynamic. Getting adults out of the street and on the sidelines. So, it’s a longer discussion, but it goes back to the need for the special events. Chair Filseth: This is the Finance Committee, not Policy and Services. Council Member Holman: But, it has to do with the funding for the special events person, that’s why I bring it up. So, that’s exactly why I bring it up. Chair Filseth: Council Member Fine. Council Member Fine: I’ll move we tentatively approve Community Services Budget. Chair Filseth: Second. MOTION: Council Member Fine moved, seconded by Chair Filseth to tentatively approve the Community Services Operating Budget. Council Member Holman: Amendment, oh, go ahead. Council Member Fine: No need to speak to it. I think this one is pretty good. We wish there was more money across the board, but overall I think you’ve done a good job here. Chair Filseth: Actually, I had one more question, which is, JMZ, are we contributing to the capital construction of that? Is that, I didn’t see it in the Capital Budget. Did I miss it? Mr. de Geus: So, we have not committed to contributing to the capital of the actual Junior Museum construction, but there are ancillary capital expenses that we’re going to incur, like the parking lot at the Lucy Sterns Center that is in need of replacement and we would have to do that at the same time. There are park improvements that would need to occur at the same time, including some playground movement and other things. So, there will be several million dollars at play because the Junior Museum is being rebuilt. So, in that sense we will need to spend some money there. But to your specific question, are we contributing to the building, not at this time. We haven’t committed to that. Mr. Keene: (Inaudible) Are we going to take this up on the 18th, (inaudible) and CIP near the wrap up. So, you will be able to see it, but is there funding in the Capital Budget ’18 or is it more ’19? Ms. Nose: There is no funding right now in the five-year CIP, because we were waiting to kind of figure out the timeline of the JMZ Plan with the Friends first, and get the Council agreement on that plan. I do anticipate, and Rob and I have been talking, that we will bring forward and At-Places Memo to put some marginal costs associated with just moving the animals that we think is going to happen before we are able to get to Council. Mr. Keene: Here’s what I said. This is a low-cost special event that everyone will want to watch. Council Member Holman: I said, we should have a parade, yeah. Chair Filseth: Okay, Council Member Holman, you have an Amendment to make. Council Member Holman: I do. I wanted to put the HSRAP funding and the special events staffing in the parking lot. AMENDMENT: Council Member Holman moved, seconded by Council Member XX to place in the parking lot HSRAP funding and special events staffing. Council Member Fine: I don’t think I’m going to accept that. I mean, I did want to support the YCS funding increase which will come to the whole Council as is. I think there may be something in terms of a more holistic look on special events at the whole City, but not for the Finance process. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Chair Filseth: Your Amendment is not accepted as friendly. You can propose it, if you can find a second, but. Council Member Holman: But you’re not going to so… So, I have a question. Do you have a date of when the YCS matching grant proposal is coming to Finance? Mr. de Geus: I did hear the discussion last night. I brought it up this evening because I thought for efficiency sake, if there was support for it, that the Committee could suggest support for it today, so that it could just go with the Budget, the full Budget to Council, since it’s a financial decision. But, if you’d like more information and you want to have Leif here and a little more presentation on what the program is all about and what the outcomes will be, we can arrange for another time. Chair Filseth: I think we should make a decision that it’s either in the Budget or not in the Budget. If I understand what you said. Council Member Holman: So, a quick comment here. So, the City Attorney said last night there was not enough time to agendize it for tonight because we just talked about it last night. I guess that… Mr. Perez: You could put it in the parking lot. That’s what I was going to suggest to you. Council Member Holman: The only thing is, I have a little bit of concern about putting it in the parking lot, because that’s going to be a long day and YCS supporters did want to come and speak to it to the Finance Committee. They really wanted to do that, so that’s why I was hoping to find a date when we actually could talk about it, instead of just putting it in the parking lot. Chair Filseth: You don’t want to do a BAO, do you? Council Member Holman: No, no, no. And the other thing is, we need to, you know, the County is on the same path as we are and the same timeline as we are, so it would be great if we could give them – you know, I sent them an email last night saying like it’s been unanimously supported by the Council to send to Finance. It would be great if we could give them an update too, saying the Finance Committee has recommended, blah, blah, and not wait till the end of our process, so they know how we’re tracking. Chair Filseth: What do think, Lalo. We don’t have another mechanism other than the parking lot, right? Mr. Perez: I think if you put it in the parking lot it will be fine. Let’s assume that it doesn’t make it and doesn’t carry a Motion to go forward, we still send it forward to the Council for review and at that point there could be speakers again. So, you could have speakers on Finance night, speakers on the Budget adoption night, and the whole Council could take action at that point. Chair Filseth: So, the Council could put it in the Budget after the fact. After we deliver the Budget to Council, the Council could vote to put it in. Mr. Perez: That’s correct. Council Member Holman: Again, my concern about waiting till that meeting, which is the last of our meetings, it doesn’t give the County encouragement or an update as to how it’s tracking with our Finance Committee. Council Member Fine: I think if we put it in the parking lot tonight, that is showing the County we’re tracking in some way. We did have a unanimous vote on it last night and it gives folks from YCS two more opportunities to speak on it. So, I would be happy to put it in the parking lot for now. Chair Filseth: I would accept that. I mean, we have a highly constrained problem here, Karen, so what do you want to do? Council Member Holman: I don’t know why we couldn’t take it up at one of the interim meetings between now and… Chair Filseth: There is no meeting between now and the 18th. Ms. Nose: There is no interim meeting. Mr. Perez: Your next meeting is the wrap up. Council Member Holman: I thought we had one more. Mr. Perez: That’s if we don’t complete the wrap up on the 18th, we do have a backup on the 25th for wrap up. Council Member Holman: I’m overlooking something. So, when do we do the CIP. Mr. Perez: We’re doing CIP, Utilities. Yeah, that’s why we start at 2:00. Council Member Holman: Okay, I was thinking we had one additional meeting, so, okay. Mr. Perez: It got cancelled because of Tall Tree Awards. Council Member Holman: Okay, then I’ll remove my objection then. Okay. So, you’re going to move to put it. Council Member Fine: Yeah, let’s move to put the YCS $50,000 in the parking lot. Council Member Holman: I definitely second that. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the parking lot $50,000 for YCS. MOTION AS AMENDED RESTATED: Council Member Fine moved, seconded by Chair Filseth to tentatively approve the Community Services Operating Budget (Part A) and to add to the parking lot $50,000 for YCS (Part B). Chair Filseth: If there’s no further discussion, all in favor? Council Member Holman: Wait, wait, this is only on the $50,000 into the parking lot. Council Member Fine: No, this is tentatively approving the whole. Chair Filseth: Do you want to restate the Motion? Council Member Fine: Sure. I’d like to move that we… Council Member Holman: Can we break it in half? Council Member Fine: Well, there’s two parts I’ll just make it, so that we tentatively approve the Community Services Budget for 2018, and that we put in the parking lot the $50,000 increase in funding for YCS to be matched by the County. Council Member Holman: That’s why I wanted the Motion split, because I can support, I don’t want to support the first part and I’ll support the second part. We do it all the time. MOTION SPLIT FOR PURPOSES OF VOTING. Council Member Fine: Okay, that we tentatively approve CSD? Chair Filseth: Second. All in favor? Motion carries with Fine, Filseth in favor, Holman opposed and Tanaka absent. MOTION PART A PASSED: 2-1 Holman no, Tanaka absent Council Member Fine: And then to put in the parking lot, the $50,000 per our Colleague’s Memo about increasing funding for YCS to be matched by the County. Chair Filseth: Who’s the second? Oh, yeah, I seconded it. All in favor? MOTION PART B PASSED: 3-0 Tanaka absent Council Member Fine: Thank you. Chair Filseth: Thank you guys. Thanks for staying late. Thank you HRC folks. Future Meetings and Agendas Lalo Perez, Chief Financial Officer: I do have, whenever you’re ready, the next meetings. So, we do have… Chair Filseth: Isn’t this fun. We got all this stuff we could do and we can’t. Mr. Perez: As I mentioned, our next Budget hearing is Thursday, the 18th. For that we start at 2:00. We’ll have the municipal fee schedule for you. Then we’ll get into the General Fund Capital, a very important subject. As a matter of fact, it’s going tomorrow night to PTC, if I remember correctly? Kiely Nose, Budget Manager: Yes. Mr. Perez: So, we’ll get the memo from them by the 18th and see their review. Then we get into the Utilities Budget and then, including rates, and then we start the wrap up, and if we are successful and are able to finish that night, then that concludes the Finance Committee’s review of the Budget. If not, as I mentioned, then we have as a backup, Thursday, the 25th, which would be at 6:00. There has been a discussion and I believe there is polling going around on the Budget adoption. The date has changed, as I understand, and the City Manager might be able to enlighten, because I just heard yesterday that we’re looking at Tuesday, June 27, and it would be the Budget only that evening, if I understand correctly. Mr. Perez: Yes, so the important that… James Keene, City Manager: (Inaudible, no mic) The Budget would get squeezed. Council Member Holman: What if we had questions? Ms. Nose: You’d have to call a second meeting on the, sometime between then and July 1. Mr. Keene: Well, I’m going out of town the 29th. Ms. Nose: Lovely. So, on the 28th. Mr. Perez: There’s provisions as to how we could do it, but by State law we have to have an adopted Budget by June 30th. That’s all I have. Chair Filseth: Thank you very much for staying late. With that the meeting is adjourned. Adjournment: The meeting was adjourned at 11:07 P.M. TRANSCRIPT Page 112 of 112 Finance Committee Transcript May 9, 2017 FINANCE COMMITTEE FINAL TRANSCRIPT Page 1 of 111 Finance Committee Transcript May 9, 2017