HomeMy WebLinkAbout2018-05-16 Finance Committee Summary MinutesFINANCE COMMITTEE
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Special Meeting
May 16, 2018
Chairperson Scharff called the meeting to order at 9:10 A.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Filseth, Kou, Scharff (Chair); Tanaka left at 1:42 P.M. and
returned at 2:18 P.M.; Kniss arrived at 1:42 P.M. and left the meeting at
2:18 P.M.
Absent:
Oral Communications
None.
Agenda Items
1. May 15th Budget Hearing Continuation.
Lalo Perez, Chief Financial Officer/Administrative Service Director voiced that
is the case in that if there is carry over from the prior meeting then there is
a time slot allocated for it.
NO ACTION TAKEN
2. Fiscal Year 2019 Proposed Municipal Fee Schedule.
Chris Yi, Senior Management Analyst, Office of Management and Budget
announced he would provide an overview of the fiscal year (FY) 2019
Municipal Code Fee Schedule. For background, the Municipal Code Fee
Schedule contains roughly 8,000 fees for various programs, services, and
classes to residents and non-residents. City Council (Council) adopted the
User Fee Cost Recovery Level Policy in May of 2015 and it provides policy
considerations for each level to help departments to determine the
appropriate cost recovery level for an existing fee or when establishing a
new fee. Staff also looks at the average City-wide increase and salary and
benefits. The rate for FY 2019 for salary and benefits is 2.6 percent. Staff is
recommending that 10 new fees are added, 31 existing fees be deleted, and
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162 fees to be changed either by more than 2.6 percent or decreased. Staff
is proposing a Tobacco Retail Permit Fee which is not a Palo Alto City (City)
fee but a Santa Clara County fee. Another new fee is the Southgate
Residential Parking Permit fee and this fee is identical to other parking
district fees that were implemented in FY 2018. Another unique new fee is a
one-day liquor permit which is required for corporations that are hosting a
one-day special event and would like to serve liquor. Any fees that are
proposed to be deleted are fees that have very little to no demand for
service. Changed fees were grouped into three categories; fees adjusted to
align with market value; technical adjustments; fees adjusted to reach
desired cost recovery. One fee that was omitted from the FY 2019 budget is
the Comprehensive Plan Update fee and more information about that fee will
be part of the budget wrap up meeting.
Council Member Kou asked if this was cost recovery fees only or is it
revenue generating.
Lalo Perez, Chief Financial Officer/Administrative Service Director answered
that some fees are at full cost recovery level and others are not.
Ed Shikada, Assistant City Manager asked Council Member Kou if she wanted
to know if there are fees that are full revenue generating or have the
potential to be 100 percent revenue generating.
Council Member Kou restated that she is interested in knowing if any fees
can be increased beyond cost recovery in order to gain a small revenue.
Mr. Perez stated that if there is an opportunity to do that then Staff reviews
it and then take that into consideration.
Vice Mayor Filseth asked if Staff has looked at equalizing the parking district
parking permit fees and downtown parking permit fees.
Mr. Perez answered yes.
Mr. Keene commented that the answer to that is part of a large r discussion.
Also, it is part of the implementation of the new parking permit system and
the idea of standardizing and equalizing across all of the different districts.
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Vice Mayor Filseth wanted to know when that discussion is going to take
place.
Mr. Shikada announced that the implementation of the new parking permit
system needs to take place first before Staff can gather information and
present it to the Council.
Mr. Keene stated that it would be appropriate for the Finance Committee
(Committee) to say that an equalization of fee s is what would help guild
Staff’s thinking.
Vice Mayor Filseth asked what the yield would be if some of the parking
districts where equalized with downtowns parking permit fees.
Kiely Nose, Office of Management and Budget Director explained that Staff
can bring the answer to the Committee later on in the meeting when the
parking fund budget is presented. Southgate is under the pilot program and
once the pilot program ends it will increase to the same fee as Evergreen.
Ms. Nose articulated it will go from $149 to $375 per year.
Chair Scharff voiced that he does not agree to raise the Southgate permit
fees to equal downtown because it is small service businesses in that area.
Chair Scharff declared to delete the bingo fees, the billiard fees, the bowling
alley fee, the hot tub fee, taxi cab vehicle inspection fee, taxi cab master
license fee and taxi driver fee. Chair Scharff directed the City Manager to
speak to the Police Department on the massage fees and if they are
necessary. Chair Scharff suggested having the building location change fee
be zero and then have a separate clean up discussion of the Municipal Code
fees. Chair Scharff wanted to know why each specific fee is going up.
Ms. Nose explained that there is language in the budget next to each fee
that speaks to why the fee is being increased more or less than the
suggested 2.6 percent.
Council Member Tanaka wanted to know what the total revenue is after all
the fee increases are implemented.
Ms. Nose declared that Staff would have to bring that information back to
the Committee at a later date.
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Council Member Filseth asked if fees go to the General Fund (GF).
Ms. Nose stated that not all of them do.
Council Member Filseth reiterated that the ones that do go to the GF go to
permit and licenses.
Ms. Nose concurred that is correct or they go to charge for services. Fees do
not make up all the funds in the charge for services fund. The main
component of the charge for service fund is the Stanford University Fire
Contract.
Michelle Flaherty, Deputy City Manager noted that the fees are trying to
align causes and effect with the City’s funding stream.
Chair Scharff voiced that he agrees with Ms. Flaherty but Chair Scharff noted
that police should not be wasting their time on unnecessary things like bingo
fees.
Vice Mayor Filseth stated that this topic of cleaning up the Municipal Code
fees is a topic for the Finance Committee to agendize for a later meeting.
Mr. Keene voiced agreement that a cleanup of Fee Schedule is a discussion
that needs to happen at the Committee and Council level.
Council Member Kou added that she would like to also hear from the
departments and the department's explanations why there is a fee.
Council Member Tanaka reported that he has heard from residents that
there are surrounding Cities charge a higher fee for wireless than Palo Alto.
Council Member Tanaka asked Staff if that was true.
Sherry Nikzat, Senior Management Analyst commented that that information
can be retained and brought back to the Committee at a later date. Ms.
Nikzat also announced that to date the department has been fully cost
recovering every expense that goes towards wireless.
Council Member Tanaka emphasized that for these fees the City could
greatly benefit from seeing a comparison of surrounding Cities versus Palo
Alto fees.
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Ms. Nikzat added that the wireless Tier One, Tier Two, and Tier Three was
set by the Municipal Code fee study that was done a couple years ago.
Council Member Filseth asked if the fees were coved by Proposition 6.
Ms. Nose commented that certain fees are by law only able to stay at cost
recovery levels.
Mr. Keene announced that if the Committee looked at other Cities in
California and Palo Alto was much lower than the City could adjust but since
some of the fees are regulated for just the state of California then it would
not be prudent to compare to other Cities around the country.
Ms. Nose reiterated that the fees are reflective of the City’s costs and that is
as much as the City legally can charge individuals.
Mr. Keene articulated that to compare what an individual pay with the
Municipal Code Fee Schedule does not tell the whole story on some of the
services.
Council Member Tanaka wanted to know why special event fees were
proposed to increase.
Mr. Keene voiced that Staff can look into why the special event fees are
increasing significantly but Mr. Keene also voiced that the fee total does not
come close to what the City pays to support special events.
Ms. Nose interjected that the Committee is really talking about a policy
discussion that needs to take place on what Tier these fees need to fall into.
Ms. Nose reiterated that all the fees are being increased so that the fee can
reach Tier One which is 70 to 100 percent cost recovery at this time.
Rob de Geus, Deputy City Manager explained to Chair Scharff that a
gathering means 25 people and it has to be advertised. To Council Member
Tanaka Mr. de Geus voiced that the City has a co-sponsorship policy which is
very generous and that policy allows the City to reduce or waive the fees.
Chair Scharff claimed that when the City Council campaign kickoffs
happened there was no purchase of a permit and Chair Scharff wanted to
know if he was in violation of the law.
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Mr. Keene announced that if it is at your home then you do not need a
permit but if it happens at city park or other venues then a gathering permit
needs to be purchased.
Chair Scharff voiced agreement that this topic needs to come back to the
Finance Committee for a more in-depth discussion about fees and the
associated definition.
Council Member Kou voiced that a special event permit is for more than 200
people.
Council Member Tanaka articulated that maybe non-residents need to pay a
fee but local residents do not have too.
Mr. de Geus reported that a gathering permit might not have a fee or a very
minimal fee associated with getting a permit. It is really about letting the
City know what is happening in the parks so that there are no conflicts
between events.
Council Member Tanaka emphasized that the significant fee increases on
minor events like kid’s events are not promoting community building.
Mr. de Geus commented that there is a Know Your Neighbors Grant that is
now at $50,000 that community member can apply for to help support
community events.
Council Member Kou asked that Staff bring the Know Your Neighbor Grant
topic to the Finance Committee for a policy discussion. Council Member Kou
asked if the special event hours are corresponding with private security
guards and cost recovering for those security guards.
Ms. Nose explained that the costs reflected in the budget include all the
costs for things like a security guard.
MOTION: Chair Scharff moved, seconded by Council Member Kou to
recommend to the City Council to tentatively approve amendments to the
Municipal Fee Schedule for Fiscal Year 2019 and direct Staff to return to
Finance with a discussion of the Fees discussed during this Agenda Item.
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Council Member Tanaka asked if the Motion included all the fees except for
the fees that the Committee just talked about.
Mr. Keene stated that would take Staff time in having to single all those fees
out and it could be very expensive.
Chair Scharff stated that a better approach would be to have the fees
approved, then have a detailed discussion at the Finance Committee level
and then have the fees reduced after that discussion.
Council Member Tanaka articulated another option is of keeping the fees that
were discussed where they are and all the other fees would increase by
Staff’s proposed amount.
Mr. Keene reiterated that is going to cost Staff’s time and money. Also, the
Council has stated that $5 million needs to be cut from the budget but now
the Committee is trying to cut more than $5 million by reducing fees which
impacts revenue.
MOTION PASSED: 3-1 Tanaka no
3. Fire Department, Operating Budget.
Jessie Deschamps, Senior Management Analyst, Office of Management and
Budget announced that there is a recommendation of a net zero budget
realignment by division. These realignment shifts support function such as
communications, administrations, facility maintenance, out of records
information, and training and personal division into the administration and
environmental and safety division. The budget assumes $6.5 million in
revenue for fire services provided to Stanford University. There is a
proposed annualized deployment change which will net a savings of $1.7
million and eliminated 11.0 full-time equivalent (FTE). Two operating
requests for FY 2019 is to establish an annual promotional exam alternating
between Captain and Apparatus Operator. The second is a proposal for a
cost to hire 5 new firefighters which includes a one-time funding allocation of
$46,000. Capital projects will be discussed later but the Fire Department is
undertaking two new projects in FY 2019. One project is to build a trench
and confined training facility. The second project is a pilot program for traffic
signal presumption that will allow the Fire Departments to adjust lights while
en route to a call.
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Eric Nickel, Fire Chief reported that the Fire Department has taken the bulk
of the cuts City-wide. Mr. Nickel stated that one of the key components of
the redeployment change was to put a fourth ambulance into the system
and there has been a positive outcome related to that addition. County
ambulance response into the community has been cut down by 70 percent
because of the additional fourth ambulance. The Fire Department is
anticipating bringing in $100,000 or more in revenue annually because the
department is getting more ambulance transfer calls with the addition of the
fourth ambulance. In summary, the department is responding to 17 percent
more calls for service in a 5-year period with 17 percent less personal.
Chair Scharff voiced to Mr. Nickel and his team that they do a great job
managing and leading the department.
Council Member Kou concurred with Chair Scharff’s proclamation. Council
Member Kou asked how surrounding Cities their fire services and their
budgets compared to Palo Alto.
Mr. Nickel stated Las Altos used Santa Clara County Fire District and it is a
contractual relationship. As part of the contract, Las Altos pays a fee for the
pension and unfunded pension for the Santa Clara County Fire District.
Menlo Park is a special fire district meaning that Menlo Parks’ funding comes
from property taxes. Menlo Park runs fewer calls versus Palo Alto Fire, they
cover a smaller square mile area, and Palo Alto runs two services, fire, and
ambulance, at half the cost of what Menlo Park Fire District does.
Vice Mayor Filseth stated that the budget reflects the changes that were
made last summer.
Mr. Nickel voiced that there is an increase in turn out times because crews
are swapping gear between different apparatus. Also, travel times are
increasing due to increase traffic and so a traffic preemption system could
help decrease travel time.
Chair Scharff asked what the department is doing since the Records
Management position has been eliminated.
Amber Cameron, Senior Management Analyst, Fire Department explained
that the Fire Department cleaned up its accounts in preparation for moving
to the new Enterprise Resource Planning (ERP) system. In the records and
information management category included all the partial FTEs from the
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communications department in police and those have been moved to the
emergency response category.
Chair Scharff confirmed that is why the emergency response category
increase by $230,000.
Ms. Cameron concurred but added another reason is that there were several
positions that were miscategorized and those were cleaned up as well.
Chair Scharff asked how much of the $250,000 cost cut is savings and how
much is recategorization.
Ms. Cameron declared that it was primarily recategorization and any
decrease is a category is mainly due to recategorization.
Chair Scharff articulated that the only real increase is the Administrative
Associate II by .2 percent. The decreases are 7 firefighters were cut and 4
fire apparatus operators were cut equaling the 11 positions that Staff had
mentioned previously.
Ms. Cameron noted that the 20 percent FTE is an employee that shared with
Development Services and that person does all the intake for all the
mainline calls.
Chair Scharff asked what makes up the other agencies under revenue.
Ms. Nose announced that is Government Emergency Medical Transport
(GEMT) reimbursements.
Mr. Nickel clarified that GEMT is a fee that is applied if the department
transports someone to the hospital who is uninsured, underinsured or has
Medicaid. If that is the issue then the department is able to bill the federal
government to collect some of that revenue.
Ms. Cameron stated that the total revenues are changing by .8 percent . The
Intergovernmental Transfer (IGT) fund and the GEMT fund where
categorized together but that proved to be difficult to track when the
department was audited so those funds were moved to different separate
categories.
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Chair Scharff asked if charges for other funds means charges that are
charged to the City.
Ms. Cameron announced that was correct and that there is only one principle
charge which is 50 percent of the training captain which is funded by
utilities.
Chair Scharff asked for more clarification on why the training captain is
funded by utilities.
Mr. Nickel explained that training Staff takes care of the mandated federal
and state Occupational Safety and Health Administration (OSHA)
requirements for safety training. First aid and CPR training are among
several pieces of training the department provide to utility personnel.
Vice Mayor Filseth voiced that FY 2019 budget looks good but is concerned
about FY 2020 because 11 FTEs were cut.
Ms. Cameron articulated that there was a plan to make these positions
reductions in FY 2018. The is an anticipation that costs will increas e in the
next fiscal year in alignment with what labor contracts are agreed to and
general benefit increases.
Council Member Tanaka declared that he would like to see the data that Mr.
Nickel talked about where Palo Alto is compared to other surrounding Cities.
Council Member Tanaka asked if the 6.5 percent from Stanford University
was concrete or a projection of what the City might get.
Ms. Nose articulated that there is continued ongoing negotiations with
Stanford University. What is assumed in the FY 2019 budget is both what is
estimated for the long-term contract and what the tentative agreements are.
Council Member Tanaka stated that there is a risk to the Stanford revenue.
James Keene, City Manager announced that there is uncertainty.
Council Member Tanaka wanted to know if most of the calls the Fire
Department receives are medically based instead of an actual fire.
Mr. Nickel confirmed that is correct.
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Council Member Tanaka asked if the Fire Department structure is shifting to
a more medical side than actually fighting fires.
Mr. Nickel explained that there is a shift happening but fire trucks and the
personnel they carry still need to be in the fleet. The trucks can handle
different types of emergencies such as an oil spill, medical emergency or car
accident.
Council Member Tanaka encouraged the Fire Chief and his team to look at
the possibility of having smaller vehicles that can respond to minor
emergency calls instead of sending a fire truck.
Mr. Keene noted that the Fire Chief has been moving the department in that
direction and there has been a discussion about how that can be
implemented in Palo Alto. Also, the department is part taking in a rigorous
accredited program and will be 1 of 9 municipal departments in California
that are accredited once it is completed.
Mr. Nickel explained that the Fire Department is built and staffed for night
time Palo Alto when there is less population in the City. That being said the
number one challenge for the Fire Department is during peak call times
because Palo Alto has so limited fire stations. The next step the department
is looking into is how to have more resources to serve the community during
the peak call times.
Council Member Tanaka wanted to know how much per hour the City is
paying for overtime. Council Member Tanaka suggested to move $1.9 million
from overtime to salary and that might help with overtime costs.
Ms. Cameron responded that the overtime costs cover the cost of a 12-hour
ambulance unit that is staffed primarily on overtime. The department saves
money by doing it that way.
Mr. Keene pointed out that there were a lot of positions vacant as
negotiations were proceeding with Stanford. Pension benefits are excluded
when a position is in overtime.
Council Member Kou asked what happen to the explorer program.
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Kevin McNally, Deputy City Chief stated that the cadet program is still
operational and is run by on-duty Staff. The people participating in the
program work as a fourth person on an apparatus and they receive college
credit through the College of San Mateo instead of pay. Generally, there are
3 or 4 people in the program and there is usually one per shift.
Mr. Nickel corrected that the cadet program does work with the college and
the explorer program is working with high school students. The explorer
program has been set aside because the Fire Department has not yet filled
the position that normally operates that program.
Council Member Kou wanted to know what the cost is for the explorer
program.
Mr. Nickel stated that it is nominal.
Council Member Kou voiced that because it does affect the youth, Council
Member Kou suggested that the explorer program have a higher priority to
start up again.
MOTION: Chair Scharff moved, seconded by Council Member Kou to
recommend to the City Council tentatively approve the Fire Operation
Budget.
MOTION PASSED: 4-0
4. Police Department, Operating Budget.
Jessie Deschamps, Senior Management Analyst, Office of Management and
Budget announced that she would be presenting an overview of the Police
Department budget. One significant increase is to salary and benefits with
an increase of $841,000 or 2.4 percent. There is also a transition from
TrackWatch monitoring services to Caltrain cameras and a reallocation of the
ongoing operating and maintenance cost of the camera to the Office of
Emergency Services.
Robert Jonsen, Police Chief reiterated that there are nominal changes to the
FY 2019 from FY 2017 and FY 2018 budgets. Besides having nominal
changes the Police Department is in labor negotiations at present time and
there is an annual increase ranging from 8 to 9 percent that will be factored
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in later. Mr. Jonsen stated that roughly $5 million of the budget contains
non-cores services. As of present time, there are 13 vacancies in the
department and there are no offices in the academy. The workload has not
changed even with fewer officers. Traffic accidents have increased and the
department is working to bring back the traffic unit to help address that
increase. Key projects that the department is working on prioritizing the
hiring program and increase the Police Department’s exposure to youth
throughout the community. The department at the end of the year will start
a youth academy to help facilitate any youth who have an interest in
becoming a police officer.
Council Member Tanaka announced that the proposed salary increase is 2.1
percent but he wanted to know what would happen to the budget if that
were increased because of labor negotiations.
Mr. Jonsen explained that there are options like the position vacancies to
offset a possible significant increase.
Council Member Tanaka asked if it does come down to significant labor
increase can the Police Department drop off the non-core functions that they
are currently performing.
Mr. Jonsen reported that the Council would have to make that decision. In
terms of permits, there is a non-sworn in a position that does all the permit
type work. The Police Department is looking at ways to be more efficient and
cost-effective at the same time.
James Keene, City Manager disclosed that there is a baseline level of service
that the Police Department has provided for a long time on regular parking
enforcement. Contract firms have been brought in to do all the parking
enforcement work. In terms of the pay for police officers being the highest,
Mr. Keene voiced that the Council’s fundamental policy is to place the Police
Department at the median of the regional market.
Vice Mayor Filseth confirmed that the community would be happy if a traffic
unit were implemented. Vice Mayor Filseth wanted to know if technology
could be used instead of people to deal with traffic incidents.
Mr. Jonsen stated that it is an option to use technology but that is a broader
question that needs to be asked to the community and to Council.
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Council Member Kou interjected that cameras are an added tool and not a
replacement for an actual officer.
Mr. Keene added that Palo Alto has been notoriously slow about exploring
and deploying new technologies.
Chair Scharff asked in terms of the Staffing chart what positions are vacant.
Patty Lum, Assistant Police Chief explained that the positions are spread out
by what they position does each day and so it is not reflected in any one
area. There are 13 officer vacancies and 3 dispatch vacancies.
Chair Scharff wanted to know what the difference between Part 1 crimes and
Part 2 crimes.
Mr. Jonsen explained that Part 1 crimes include homicide, robbery, rape,
aggravated assault, burglary, larceny, and auto theft. Part 2 is all other
crimes. There is a decrease in homicides, rapes, and aggravated assaults.
Burglaries and larceny are increasing over the past years in all regions.
Chair Scharff wanted to know if there is a proactive approach to combating
burglaries and larceny rises in Palo Alto.
Mr. Jonsen advised that high visibility and proactive policing is a great way
to offset the increase.
Chair Scharff asked if there is a plan to fill all 13 vacancies in the
department.
Mr. Jonsen confirmed that is correct. Another way to increase visibility is to
use community service officers.
MOTION: Council Member Kou moved, seconded by Vice Mayor Filseth to
tentatively approve the Police Operation Budget.
MOTION PASSED: 3-0 Tanaka absent
5. Office of Emergency Services, Operating Budget.
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Jessie Deschamps, Senior Management Analyst, Office of Management and
Budget announced that she would be giving the Committee a brief overview
of the Office of Emergency Services Department (OES) budget. Staff
recommendations is a reclassification from Program Assistant to Program
Assistant II. Also included is the reallocation of Caltrain video monitoring
expenses from the police department (PD) to OES.
James Keene, City Manager added that OES was not implemented until
2011.
Vice Mayor Filseth wanted to know why there was a significant increase in
contract service and wanted some clarification on why that is.
Kenneth Dueker, Office of Emergency Services Director explained that there
is a transition for a physical presence at the railroad tracks to electronic
monitors called Intrusion Detection Systems. The increase in the budget is
because there will be a vendor that is hired to monitor the new cameras.
Mr. Keene added that $400,000 is the component of that contract out of the
increase.
Vice Mayor Filseth asked if it was an ongoing expense.
Mr. Dueker declared it is a 5-year contract.
Chair Scharff asked why OES is being added additional allocated charges.
Ms. Deschamps explained that there were some charges that were being
charged to the Fire Department’s budget when they should be in OES’s
budget.
Ms. Nose added that OES and Fire were looked at as a parent/child
relationship from an accounting perspective a few years ago and has now
been adjusted to reflect current structure.
Council Member Tanaka wanted to know if the cameras being added to the
tracks used to be in the Police Department’s budget.
Mr. Dueker stated yes.
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Ms. Nose added that a physical presence of a person was roughly $1.7
million a year and the cameras are roughly $400,000 per year as an ongoing
cost.
MOTION: Council Member Kou moved, seconded by Vice Mayor Filseth to
tentatively approve the Office of Emergency Services Operation Budget.
MOTION PASSED: 4-0
6. Planning and Community Environment, Operating Budget.
Kiely Nose, Office of Management and Budget Director announced that the
Committee will first look at the Planning and Community Environmental GF
and then the Committee will look at special revenue funds which include
parking activities.
Jessie Deschamps, Senior Management Analyst, Office of Management and
Budget announced she would give an overview of the Planning and
Community Environment (PCE) Department budget. Budget highlights in the
addition of an Associate Planner and the removal of a Program Assistant II.
Another budget highlight is a realignment of Staff to align with workloa ds in
FY 2019 and this alignment would be a net zero impact City-wide but will
impact specific funds. Those funds include the GF with an elimination of .07
FTE, Capital Improvement Fund eliminating 1.15 FTE and increase Special
Revenue Funds by 1.22 FTE. This is a shift in Staff resources of
implementation of parking-related capital projects into the operational
management of the programs. Operating recommendations for FY 2019
include an increase to allocated charges for technology support and that is
for the City-wide permitting system Accela. To offset the purchase fees are
proposed to be increased by 3 percent. The second recommendation is a
reduction in non-salary expenses for the normal business. In terms of capital
projects, there is a total of $23.8 million being transferred for transportation
projects in FY 2019.
Jonathan Lait, Interim Director, Planning and Community Environment
announced that the department has been working with the City Manager’s
Office and Human Resources to make some refinements on the planning side
of the operation so that the department can create a better opportunity to
recruit for a long-standing position that has been vacant. Also, to create
opportunities for Staff to have succession through the department.
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Neilson Buchanan articulated that the list of projects and the funding levels
for Staff that is being proposed are pretty compatible as a way to go
forward. In terms of parking, his concern is that valet parking is being cut
significantly and he suggested that valet parking should be accelerated in
three garages. Also, that there is unused capacity in the garages and if valet
parking was used in three garages there still would be ample space to
accommodate valet and non-valet parking. A hot topic among residents is to
raise the permit fee for non-residential people. Mr. Buchanan believes that
the garage downtown does not need $27 million allocated to it and that
there are other funding sources that could be used. In addition, there are
proposed projects that put pressure on the permit parking program. There is
no confidence in the permit parking program in Evergreen Park and
downtown.
Vice Mayor Filseth asked why salaries are up 8 percent when headcount is
slightly declining and why the budget over the past couple years jumps
around.
Ms. Nose explained that PCE has had a significant turnover and that is why
the budget jumps around. By budgeting who is actually in the department,
the City budgets for filled positions and also uses a vacancy standard to
budget for vacant positions.
James Keene, City Manager added that the City tracks what positions are
filled, what positions are not filled and then that the City thinks the potential
costs will be in a year. Sometimes if the department has a lot of turn over
then the City will not allocate as many funds for full positions.
Chair Scharff asked how many vacancies there are in PCE.
Mr. Lait stated that in 2-weeks the department will be down 21 percent.
Mr. Keene inquired how many were in transportation.
Mr. Lait announced there are 2 or 3 vacant positions in transportation.
Chair Scharff asked what some of the reasons are for the turnover being so
consistent.
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Mr. Lait predicted that the turn over in transportation is mainly because it is
a very stressful place to work but voiced that is not the only reason why
people leave.
Chair Scharff asked Mr. Mello if he has ideas on ways to help the Crescent
Park traffic situation and if there are things that the City could provide to
help facilitate some of those ideas.
Josh Mello, Chief Transportation Official explained that Staff has started to
plan ahead to allocate resources to special neighborhood projects. Mr. Mello
explained that Staff relies on the neighborhood itself to provide ideas to
address traffic issues. Mr. Mello added that where the City could help is have
additional resources for community engagement outreach.
Chair Scharff declared that because traffic is becoming a much bigger topic
than in previous years then the transportation component of PCE should be
separated out and made into its own separate department. Chair Scharff
wanted more clarification on shuttle boarding’s and why it has decreased.
Mr. Mello voiced that the reduction is because people are using the
SamTrans transportation instead of using the shuttle buses. The main
reason for transit ridership decreasing overall is because people are using
Uber, Lyft or taxis to get where they want to go. The shuttle service
outperforms Santa Clara County Valley Transportation Authority (VTA) bus
service on a revenue per mile but transportation Staff is looking to do more
advertising to get ridership numbers back up.
Mr. Keene voiced that Staff is starting to have the discussions on what is the
most effective organization and what is the need for resources. In terms of
transportation, Mr. Keene announced that Staff will come to the Finance
Committee and Council for a request for more resources in the future.
Ed Shikada, Assistant City Manager reiterated that there is a request to cut
$5 million from the FY 2019 budget and that the re is not a revenue source
that would help fill the gap that may be needed.
Chair Scharff suggested that in the long term maybe possibility looking at a
transportation tax to help fund traffic projects.
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Mr. Keene added that there are some long-term projects that could make a
difference in the traffic issues.
Vice Mayor Filseth declared that the North Middlefield project was well
executed.
Council Member Kou asked Mr. Mello how the City can promote City shuttle
services when Uber and Lyft are not being regulated.
Mr. Mello voiced that transportation Staff did bring a Palo Alto Transit Vision
Plan to Council last year. There were some additional costs to adding
additional routes to the shuttle system and doing the rebranding. There is no
revenue source identified for those improvements.
Council Member Kou declared that the shuttle services are free.
Mr. Mello confirmed that it is free.
Council Member Kou affirmed that it is a City-wide issue with traffic and
congestion, not just Crescent Park and other well-known neighbors that
experience strong traffic congestion. Council Member Kou voiced agreement
with Chair Scharff’s idea of separating planning and transportation. Council
Member Kou asked if there is a position in transportation that works with
just community engagement.
Mr. Mello announced that currently the project managers who are engineers
and planners to do all the community engagement. There is support from
the City Manager’s Office, the Chief Communication Officer , and some
administration Staff. Mr. Mello voiced that it would be helpful to have
someone who specializes in community engagement.
Council Member Tanaka articulated that one concern he has is that there is a
gap between the amount of work and the amount the budget is increasing
relative to other departments. Another concern is that the budget is
increasing when there are not many major projects going on.
Ms. Nose explained that the increase year over year in the department is
higher because it is a priority that the Council has articulated. Also, when
other departments are reducing their Staff that is going to decrease salary
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and benefits. There is no recommended reduction in PCE and thus the salary
and benefit amounts will be higher.
Council Member Tanaka reiterated that the headcount remains flat but
salaries go up.
Ms. Nose stated it is due to the environmental impact such as the cost of
living, current Staffing salaries, and that the vacancy factor has been
changed for this department because they were fully staffed when the
budget was put together.
Mr. Shikada disclosed that it would be a huge mistake to correlate the
development activity with the level of activity and expectations in the
department.
Council Member Tanaka reiterated that PCE has the highest salary and
benefits rate but the community would come out and say that they are not
happy with the way planning and transportation are handling problems in
the community.
Mr. Lait voiced that is has been very difficult for the department to bring
over mid-manager career professionals into the department. The increase
could also be because the department is implementing a strategy to create a
succession plan for the existing employees.
Chair Scharff reiterated Mr. Lait’s explanation that junior people are hired,
as those junior people get better they are promoted, and that is why there is
a higher increase because people are getting raises. Chair Scharff stated he
believes that is the right way to run an organization and that the Committee
cannot be focused on the optics of the budget.
Vice Mayor Filseth articulated that he agreed with Council Member Tanaka
on being concerned about the increase in salary with no increase in
employment status. Vice Mayor Filseth asked Staff if the additional $74,000
for the parking permit system is for the upgrade of the Residential
Preferential Parking (RPP) online system.
Ms. Nose clarified that it is for the planning system and not the parking
permit system.
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Chair Scharff suggested it might be a good idea to hire someone who just
focuses on grant opportunities and would more money be made.
Council Member Kou announced that she agreed with that suggestion but
there are also a lot of constraints that come along with grants . Council
Member Kou asked where the third Code Enforcement Officer went.
Mr. Lait articulated that there are two Code Enforcement Officers and a lead.
Council Member Kou asked for more clarification on the Code Enforcement
Officers and their workload.
Mr. Lait voiced that the department is looking forward to the audit that the
City Auditor is currently working on and when that is accommodated the
department will have a better sense of how that division is working.
Council Member Kou inquired about how many departments do the Code
Enforcement Officers answer too.
Mr. Lait answered that they Code Enforcement Officers answer to all the
departments located within PCE. They also answer to the Building
Department.
Mr. Mello added that the interaction between transportation and Code
Enforcement is limited.
MOTION: Council Member Tanaka moved, seconded by Council Member XX
to tentatively approve the Planning and Community Environment Operation
Budget, increasing Full Time Equivalent (FTE) count by three to engage in
grant writing and community engagement.
Michelle Flaherty, Deputy City Manager asked Council Member Tanaka if he
was asking to add positions without funding them.
Council Member Tanaka confirmed that is correct.
Chair Scharff stated that he did not agree with the motion because there
was a significant amount of vacancies in the department already.
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Council Member Tanaka declared that the issues are that the City is paying
more for existing personal but not getting new personal at the same time.
Mr. Keene explained that the people who are staying have more
acknowledge about the department than new junior employees.
Ms. Flaherty explained that measuring the City’s success by customer
satisfaction and community satisfaction is not always an accurate metric in
all aspects of the work.
MOTION RESTATED: Council Member Tanaka moved, seconded by Council
Member XX to tentatively approve the Planning and Community Environment
Operation Budget, increasing the budget by 4.6 percent to engage in grant
writing and community engagement.
SUBSTITUTE MOTION: Chair Scharff moved, seconded by Vice Mayor
Filseth to tentatively approve the Planning and Community Environment
Operation Budget.
Vice Mayor Filseth articulated that the average salary increases over the last
3-years are 3.6 percent and so as long as it is not 8 percent every year then
Vice Mayor Filseth is satisfied.
Lalo Perez, Chief Financial Officer/Administrative Services Director
interjected that vacancy calculation plays a big part of this discussion and
that Staff in the future will provide more data to that point for the
Committee.
Mr. Keene added that if a vacancy is budgeted one year and then not the
next year there is an automatic increase but it is not going to anybody.
Council Member Kou commented that having a department of only junior
people is not helpful either and that there need to be more senior people in
the department as well.
Mr. Keene disclosed that it would be premature to define exactly what form
and shape that headcount increase would be without having a discussion.
SUBSTITUTE MOTION PASSED: 3-1 Tanaka no
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7. Special Revenue Funds, Operating Budget.
a. Parking District, Operating Budget.
b. Stanford Development Agreement Fund, Operating Budget.
c. Other Special Revenue Funds, Operating Budget.
Jessie Deschamps, Senior Management Analyst, Office of Management and
Budget announced that she would give a brief overview of community
development funds. The community development funds contain development
impact fees and in FY 2019 there is a proposed transfer of $3.9 million to
capital projects. Street improvement funds contain state gas tax revenues
and receipts from the recently approved SB 1 transportation bill. For FY
2019 there is an assumption that SB 1 will bring in $1.2 million in revenues.
The FY 2019 allocation of those funds will be used to partially fund the
Charleston/Arastradero infrastructure project and Council approved these
uses of these funds in April of 2018. An additional $1.4 million is allocated to
other capital projects. Federal and state revenue funds which include the
Community Development Block Grant (CDBG) is proposed to be $670,000
for FY 2019. Traffic mitigation and parking in-lieu funds which contains
transportation impact and parking in-lieu fees. For FY 2019 there is a
proposed transfer of $6.9 million is recommended for capital improvement
projects (CIP). Special district funds which contain parking permit revenues,
the University Avenue, California Avenue and residential parking permit
funds. Staff recommendation for FY 2019 includes a reallocation of 0.95 FTE,
a part-time Administrative Specialist II to provide customer support during
the transition to the new parking management and permitting system, and
$300,000 for contract parking administration Staff. Another recommendation
is continued support to Transportation Management Authority (TMA) for
$480,000 and transfers to CIPs of $2.7 million. In terms of the Stanford
University Medical Center Fund (SUMC), a total of $10.3 million programs to
be transferred to capital projects.
Chop Keenan voiced agreement with Mr. Buchanan’s earlier comments that
valet services are being cut from garages and he did not agree with that
reduction. Also, though he voiced that he thought it was a good idea to
move those valets to the construction site along University Avenue and that
cost should be located in the utility budget. Mr. Keena announced that there
has been on community engagement with Staff on the proposed FY 2019
budget. Mr. Keenan voiced that it would be a good idea to scale current
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programs to manageable levels with more Staff. Also, the budget is replete
with a lot of new Staff and that he would like clarification on why the
Committee is requesting that. Mr. Keenan stated that the City should keep
paying for the TMA instead of the downtown district paying for it. The
bathrooms in the parking garages are being used as housing for the
homeless and the request for an increase in the budget for the bathrooms is
not a good use of money. The request for more parking data is unnecessary
and that the downtown district would not like parking gates on parking
structures. Also, the downtown district is the only district that pays for police
patrol and that was supposed to be a onetime thing but it has become a
yearly thing.
Neilson Buchanan clarified that data collection on parking needs to take
place for the neighborhoods because parking patterns change every 6-
months. Also, the paid parking study is important but it also adds a lot of
stress on the overworked City Staff. There has been a disagreement against
Regional Measure 3 and that the City needs to be careful on how the general
public is going to pay for projects.
The Committee took a break from 12:27 P.M. to 12:49 P.M.
Vice Mayor Filseth stated that the language in the budget is suggesting that
the City is taking $9 million from the affordable housing fund but that is not
correct.
Mr. Keene confirmed that is right.
Chair Scharff asked in terms of the California parking fund what the transfer
to the GF PARS Trust mean.
Ms. Nose explained that since there are Staff members associated with this
fund, that transfer is for the 115-pension trust fund.
Chair Scharff asked what the Staff members do that is associated with the
California parking fund.
Ms. Nose exclaimed that Staff works on issuing the parking permits and they
work on maintaining the garages.
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Chair Scharff asked if a valet service is being implemented in the California
parking garage.
Josh Mello, Chief Transportation Official articulated that Staff is looking at
different options for valet services during the Public Safety Building and
garage construction. Also, Staff is looking into a valet service for the Ted
Thompson garage.
Chair Scharff asked Staff why the valet is being eliminated in the downtown
garage.
Mr. Mello stated that the valet contract is expiring in December of 2018 and
Staff recommends to not continue that contract. The City is not recovering
the revenue on the valet service in the downtown parking garage.
Chair Scharff asked where the cars will park if the valet is eliminated from
the downtown garage.
Mr. Mello voiced that removing the valet will reduce the numbe r of permits
sold by 135 and people will have to find other places to park or use other
methods of transportation.
Ed Shikada, Assistant City Manager articulated that the Committee is moving
into details that do not pertain to the budget.
Chair Scharff corrected that transportation is recommending removing the
money for the valet service from the budget. Chair Scharff stated that is
different than leaving it in in the budget and deciding not to spend it later.
Ms. Nose clarified that the contract is more of a calendar year time frame as
opposed to a fiscal year time frame. Right now, there is money to fund the
valet service until December but if the Committee wanted those service to
continue past December then money would need to be reinstated.
Vice Mayor Filseth articulated that revenue is $100,000 and expenditures are
$300,000 and that is why Staff is proposing to cut the service.
Mr. Mello confirmed that is correct and also there are Staff resources that
are used to manage the program.
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Chair Scharff voiced concern that Staff cannot cut a program without having
a plan for the cars that will no longer receive permits.
Mr. Mello interjected that there will be an impact but also that the City does
continually adjust the number of permits that are issued on an on-going
basis.
Mr. Shikada asked if the parking fund can sustain the valet service in the
downtown area through the end of the year and then it can be revisited at
that time.
Ms. Nose confirmed yes but she asked the Committee if they wanted the
funding to go beyond the downtown garage construction lose.
Chair Scharff suggested taking the money that the downtown district pays
for policing and use it to pay for valet services in the downtown garages.
Ms. Nose answered Mr. Shikada’s question that there is sufficient funding in
the FY 2019 budget is the Committee would like to have the valet program
continued.
Chair Scharff declared that the valet service should be reinstated for 1-year.
Mr. Shikada added that there is a 3-year plan that PCE is working on to
improve the parking in downtown but that effort has been postponed due to
Staffing in PCE.
Mr. Perez voiced agreement that there is no policing charge in other areas of
the City.
Chair Scharff suggested to keep it in the FY 2019 budget but think about it
again in FY 2020. A suggestion that Chair Scharff made was to add cameras
in the garages as well.
Council Member Kou disclosed that she liked the idea of cameras being
installed in the garages and opposed having the City pay for more police in
the area. She asked Staff to define parking district and what it entails.
Mr. Perez explained that the assessment district was created to build
garages and there is an assessment of the property tax within a set
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boundary to collect money that pays for the bonds that buil d the garages.
The University parking permit fund is not part of the assessment. The fund
receives revenue from parking permit fees.
Council Member Kou asked where the money from the University Parking
permit fund goes.
Mr. Perez explained that the money goes to Staff to administer the program
to maintain the lots and garages, maintenance of the elevators, steam
cleaning, twinkle lights and police patrol.
Mr. Keene added that is why they are called a Special Revenue Fund
otherwise they would get mixed into the GF.
Ms. Nose added that there is a district fund which is isolated and then there
is parking permit fund which is also isolated.
Mr. Perez explained that a consultant came through and assessed each
building within the assessment boundary on how many parking spaces they
needed to park that facility. Those parking spaces were never physical
parking spaces. The consultant did it that way to help compute how much
that facility would pay for construction of a multi-car garage.
Council Member Kou asked for more clarification on how the process works.
Mr. Keene announced that Staff can write up a document that fully explains
how it works for the Committee and for the general public.
Vice Mayor Filseth stated that if the Committee wants to keep the valet
service running then it has to be funded somehow. An option is to raise the
price of permits or another fund has to pay for it but it should not go back to
the GF.
Chair Scharff clarified that the valet service is going to be funded by the
parking fund.
Council Member Kou asked Staff if the businesses are subsidizing in order to
have a TMA or is that for the City employees. Also, she wanted to know how
many years the TMA is going to be subsidized.
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Mr. Mello clarified that the entirety of the money is from parking permits
that are purchased by employees downtown.
Michelle Flaherty, Deputy City Manager added that one role the City plays is
getting City employee to use other means of transit and also the City
manages employee parking for all of the employers in the City.
Council Member Kou stated that she agrees with Ms. Flaherty but at some
point, there has to be some kind of contribution from the revenue makers in
Palo Alto as well. In terms of community development funds Council Member
Kou wanted to know if it was used mainly for building buildings or its is used
for roads as well.
Chair Scharff answered that is mainly is for bike and pedestrians.
Ms. Nose announced that the community development funds were impact
fee generating funds.
Mr. Keene explained that the City gets federal funding through Community
Development Block Grants and that is used for particular projects. Impact
fees are also called community development block grant but it is a
completely separate thing.
Mr. Mello added that there is a special transportation impact fee and that
was collected just for the Charleston/Arastradero corridor project. There are
very little funds left because there was a transfer of funds to pay for the final
design.
Council Member Kou articulated that state gas tax comes out of SB 1 and
Council Member Kou asked does the money have restrictions on what it can
be used for.
Mr. Shikada answered that it is for any street purpose.
Mr. Perez added the City uses if for resurfacing or any kind of maintenance
to roads.
Council Member Tanaka asked Staff if there are any restrictions on
transferring funds between different funds.
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Ms. Nose confirmed that there are restrictions and it depends on what fund
to fund transfer it is to know what the restrictions are.
Mr. Perez added that on the California Avenue and University Avenue funds
there are no restrictions because those are fee-based but federal funds
cannot be transferred to other funds.
Council Member Tanaka commented that the capital project fund went up to
$26 million versus the $9.8 million in FY 2018.
Ms. Nose explained it went up because that fund is funding capital
improvement projects that are currently being planned and constructed.
Mr. Keene interjected the Council’s Infrastructure Plan plans to spend
roughly $200 million on infrastructure projects alone over the next 3 or 4 -
years.
Ms. Flaherty commented that laying out where all the funds come from and
how they are incorporated together is a way for the City to be transparent
but it can be very hard to follow.
Council Member Tanaka asked the Committee if they supported all the funds
that were being combined together to make $26 million for infrastructure
projects.
Chair Scharff declared that he did support them all and that Council
ultimately makes the decision on how they are spent. Also, City Council
plans to put some tax initiatives on the ballot for voters to vote on if those
tax initiatives pass then all the projects will get fully funded. If the tax
initiatives do not pass then Council has to decide which projects get done
and which do not.
Council Member Kou inquired where rail separation project falls into the mix.
Chair Scharff explained that the rail separation project will be coming in the
next cycle and is not included in the project list.
Vice Mayor Filseth suggested that for FY 2020 to label all the funds so that
the Committee can see what funds are coming from what category. For
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example, which funds are enterprise funds and which are special revenue
funds.
Mr. Perez explained that at the present time the Committee is approving $26
million to be transferred into capital funds. If the Committee deems that a
project using the special revenues is not worth moving forward at this time
staff will remove that project and that revenue from the special revenue
amount of $26 million.
Council Member Tanaka asked Staff if the budget reflects an increase in the
impact fees.
Mr. Keene answered no.
Council Member Tanaka noted that it has been voiced that there has been no
community engagement with the assessment district property owners and
asked for some clarification from Staff on that.
Mr. Perez explained that there were some scheduling issues and that the
City has not been able to reach out to that district. Staff continues to
schedule a meeting with the assessment district before the City Council
adopts the budget.
Council Member Tanaka inquired if the raise on parking permits for
downtown is used for adding Staffing or it was used on capital projects.
Ms. Nose clarified that it was used to pay for the increase in the TMA
funding.
Mr. Keene added that there is Staff in the TMA so part of it was used to fund
some Staff positions.
Council Member Tanaka wanted to know if the University Avenue parking
fund is used to pay for the TMA or does the TMA get funded through the GF.
Chair Scharff announced that it comes from the parking fund.
Council Member Tanaka asked if the businesses that pay into the TMA have
insight on how the TMA is spent.
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Ms. Flaherty announced that the TMA reports to the City on its progress.
Mr. Keene clarified that the TMA Board has a membership and the Board
includes employers and private sector employers in the downtown area.
Ms. Flaherty added that the TMA Board presented to the City Council on its
progress throughout the year.
Council Member Tanaka asked what kind of community outreach is
happening with the City to the downtown district on how parking fee funds
are used.
Mr. Mello explained that some of the projects are necessity projects for
maintenance on the parking garages. Mr. Mello attends the business district
meetings to discuss and receive input on capital projects that are proposed
for the downtown area.
MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to
recommend to the City Council to tentatively approve the Special Revenue
Fund, Operating Budget and to reinstitute Valet Parking and direct Staff to
find funds for cameras in the parking garages, taken from the Parking Fund.
Mr. Shikada stated that with cameras there are some operational issues that
need to be resolved. Mr. Shikada announced that there does not need to be
money put towards cameras at this time and Staff can come back with a
plan on how to implement a camera system.
MOTION RESTATED: Chair Scharff moved, seconded by Vice Mayor Filseth
to recommend to the City Council to tentatively approve the Special Revenue
Funds, to recommend to the City Council to restore Valet Parking and direct
Staff to bring back information regarding installing cameras in parking
garages.
Ms. Nose announced that prioritization of capital investment projects will
need to happen in future years.
Mr. Mello asked for clarification in that the motion intends for the valet
service to be operational until the new garage is open.
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Chair Scharff intended to keep the valet program open until the next fiscal
year.
Mr. Shikada added that there is a parking management strategy that Staff is
working on and plan to bring that to City Council after the summer break.
MOTION PASSED: 3-0 Tanaka absent
8. Library Department.
Alex Harris, Management Analyst announced that she would be giving a brief
overview of the library department’s budget. From FY 2018 to FY 2019
expenses have increased in the department’s budget by 2.9 percent. Staff
recommendation for the FY 2019 budget includes eliminating a vacant
Library Specialist position. There is a recommended one-time funding of
$15,000 for the international collection and that will be funded through the
library impact fund.
Gayathri Kanth, Assistant Director of Library Services stated that the library
was able to improve the user online and mobile experience with a newly
implemented program. There has been a collaboration with the Palo Alto
Unified School District to implement a student access card to the library,
there has been collaborative work with the Women’s Club of Palo Alto to
upload new historical information online, and there have been some
innovative technology projects that have been incorporated into the library.
Materials for the international collections have been expanded and there has
been a collaboration with other City departments on City programs.
Mayor Kniss arrived at 1:42 P.M.
Council Member Tanaka left the meeting at 1:42 P.M.
Council Member Kou asked if all the libraries operate at the same time.
Ms. Kanth explained that every library has separate operating hours.
Chair Scharff asked if there is demand for longer operating hours.
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Ms. Kanth confirmed that there is a large demand for longer operating
hours. Ms. Kanth stated that Staff can return with a layout on how much it
would cost to have the libraries open for long hours.
Council Member Kou questioned if there is a way to use volunteer librarians
for extended hours.
Ms. Kanth stated that Staff can come back with different scenarios on how
that suggestion might work.
Council Member Kou wanted to know what country’s materials are now
carried in the international collection.
Ms. Kanth voiced that there is an increase in the Chinese collection of
materials, Russian, and Indian languages.
Mayor Kniss asked how long the average person stays when they come to
the library and which library is the busiest.
Ms. Kanth announced that some people are in and out and some stay and
mingle for a while. Mitchell Park is the busiest library and the kid's section is
very well used at Mitchell Park.
Vice Mayor Filseth asked if virtual library counts include whenever the library
website is visited.
Ms. Kanth confirmed that someone has to download something in order for
that visit to be counted as a virtual visit. The reason behind the numbers
fluctuating so much year to year is that the California Library Association
changed how virtual visits are counted.
Vice Mayor Filseth wanted to clarification on what the difference is between
technical, collection and public services.
Ms. Kanth explained that collections analysis the demand for materials and
orders them when the library sees a high demand. Technical service that
receives the order of new materials. Public services are the Staff members
that work directly with the public in the libraries.
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Chair Scharff voiced that he wanted to know how much is spent on e-books
and how much is spent on physical books.
Steve Guagliardo, Principal Management Analyst stated that at this time
Staff does not have those number but they can be supplied to the
Committee at a later date. The library does annually go through e-books and
physical books to see where the demand is.
Chair Scharff asked if physical books are more expensive because they wear
out over time or are e-books more expensive because they could have a
certain number of downloads before it goes back to the vendor.
Ms. Kanth stated that Staff will bring that answer to the Committee at a later
time.
Vice Mayor Filseth asked if e-books are cheaper to check out than a physical
book and if it is complicated how does the City know if the library is being
cost-effective in that area.
Ms. Kanth announced that she will get more data for the Committee and
then present that answer to them at a later time.
Council Member Kou asked if the libraries apply for grants that help fund
educational programs.
Ms. Kanth confirmed that the libraries do apply for grants.
Mr. Guagliardo added that when the budget adjustments are brought
forward to the Council around mid-year that is when the grants are present
for review.
Council Member Kou asked for more information on the 3-D printers.
Ms. Kanth voiced that the 3-D printers are the result of grant money and
those printers are located in the Rinconada and Downtown Library. To use
the printers, you have to make an appointment and all those appointments
are full. There are three, 3-D printers but there is no intent to purchase
more because the Staffing is not available at this time to manage another
printer.
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Rob de Geus, Deputy City Manager added that there is a maker space
program and because it was so popular that there is dedicated space at the
Cubberley Community Center for that program to function out of. For that
program that is run by teens, they also have two, 3-D printers.
Chair Scharff wanted longer library hours, from 9-10, wanted staff to come
back but wanted to know what the rest of the Committee thought.
Vice Mayor Filseth suggested putting the library budget in the parking lot
and asked that Staff bring back more information.
Ms. Nose stated that Staff can come back for the budget wrap up and then
the Committee can get answers to their questions and then approve or not
approve the library budget.
MOTION: Vice Mayor Filseth moved, seconded by Chair Scharff to
recommend to the City Council to put the Library Budget in the Parking Lot,
re-visiting the Library Budget in Budget Wrap-up and direct Staff to answer
the Library Budget questions.
Council Member Kou asked for clarification on extending hours at Mitchell
Park and if extending the hours are for Friday, Saturday, and Sunday or all
days.
Chair Scharff announced he was looking to extend to 10 PM to the library
hours.
Council Member Tanaka returned to the meeting at 2:18 P.M.
Mayor Kniss left the meeting at 2:18 P.M.
MOTION PASSED: 4-0
9. General Fund Capital.
a. Buildings and Facilities, Capital Budget
b. Parks and Open Space, Capital Budget.
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c. Streets and Sidewalks, Capital Budget.
d. Traffic and Transportation, Capital Budget.
e. Cubberley Infrastructure, Capital Budget.
Paul Harper, Principal Management Analyst announced that he would be
giving a brief overview of the Capital Improvement Fund Section of the
Capital Budget. The fund includes the GF capital improvement fund and the
Cubberley infrastructure fund. For FY 2019 the expenditures for CIPs is
roughly $125 million and there are 65 projects in FY 2019 that are
recommended for funding. The largest category those projects fall under is
building and facilities at 67 percent. The Public Safety Building is located in
the building and facilities category. Focuses for this budget include
maintaining the Infrastructure Blue Ribbon Committee’s (IBRC) catch-up and
keep up projects. The projects labeled as catch up projects have a backlog
of funding at roughly $42 million. From FY 2019 to FY 2023 there is a
proposed amount of $24 million to be funded over those years for that
catch-up backlog. There will be a remainder of $17 million in the backlog
after that full $24 million is funded in FY 2023. One of the major
assumptions for the 5-year plan is the additional Marriott hotels that are
anticipated to open in 2020. The hotels will generate roughly $3.6 million
annually in Transient Occupancy Tax (TOT) funds. On top of the TOT
revenues, there could be Certificates of Participation (COP) leveraged as well
for infrastructure projects. The five new projects in the 5-year plan include
facility upgrades to the animal shelter, City Hall space planning, and then
the water, gas, wastewater office remodel. The office remodel is reimbursed
by the utility enterprise funds. The other two new projects are the
Emergency vehicle Traffic Signal Preemption System Pilot which will cover
25 intersections throughout the City and the fire and utilities trench training
facility which is partially reimbursed by the utility fund. The Council
approved 2014 Infrastructure Plan will cost roughly $248.8 million and that
amount includes full salaries and benefits. There are four community asset
projects which are not funded in the current 5 -year plan. Those projects are
the animal shelter reconstruction, Junior Museum and Zoo (JMZ) Phase II,
Parks Master Plan and the Roth building. In terms of the Cubberley property
infrastructure fund, there are two changes from for FY 2019-2023. One
project is a new project to upgrade the building’s management systems . The
other project is the Cubberley amenities improvement project but this
project is being closed and all funds will be returned to the fund balance to
fund other projects at the facility.
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Penny Ellson voiced encouragement to the Committee to fund the complete
set of bike and pedestrian transportation projects.
Bret Andersen voiced that he is a member of the Carbon Free Palo Alto. He
also supports the full funding of the bike and pedestrian transportation
projects. Mr. Andersen asked that the public, Committee, Staff and the
Council should look for better alternatives for the California Avenue parking
garage so that an alternative can be chosen to better suit the area’s needs.
Mr. Andersen would like the TMA program that is used in the University
Avenue district implemented in the California Avenue district to help deter
people from driving and use other modes of transit. Another option is to
subsidize ride-hailing to avoid the building of a parking garage.
Council Member Kou asked Staff for more clarification on the Cubberley
management system upgrades.
Brad Eggleston, Assistant Director of Public Works explained that the
building management systems are systems that are used to run the
mechanical systems for the buildings. The money that is being returned to
the reserve fund is only one CIP project out of seven CIP projects for
Cubberley.
Vice Mayor Filseth asked for clarification on the Byxbee parking station.
Mr. Eggleston announced that it is one of the nine Council approved
infrastructure projects.
James Keene, City Manager explained that the money for the Byxbee
parking station had been uncertain but the City found other funds and fixed
it up anyways.
Mr. Eggleston added that the other piece of that project is that there is a
Baylands Comprehensive Conservation Plan project that plans to and makes
additional recommendations for the Byxbee Park.
Chair Scharff asked Staff what the $650,000 for FY 2019 is for then if
Byxbee has already been renovated.
Mr. Eggleston stated that the $650,000 is going to be used for the design on
whatever is done for the bigger projects and some of it is a re-appropriation
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of funding from FY 2018 to start to make improvements at the ITT building
site. There is an idea to link the ITT building site with Byxbee Park. Mr.
Eggleston recommended proceeding with the proposed budget amount with
the understanding that this fund is comprised of park development impact
fees so the fees cannot be transferred to other areas.
Vice Mayor Filseth disclosed that $12 million has already been spent on the
Charleston/Arastradero corridor improvements and there were additional
funds proposed to be added to that fund over FY 2019.
Mr. Eggleston confirmed that is correct but Staff has already bid on two of
the three phases of construction. Council has this item on their agenda for
the next meeting and the budget will be better represented in that Staff
report.
Chair Scharff voiced that the City is going to spend $41,000 on the Roth
Building to make sure there is no more water intrusion.
Mr. Eggleston clarified that the funds are being held for when issues ar ise
and not so much for preventive maintenance.
Chair Scharff suggested doing preventive maintenance on the Roth building.
He wanted to know the status of the Baylands boardwalk.
Mr. Eggleston exclaimed that the Baylands Boardwalk will be completed at
the end of 2019 or early 2020.
Council Member Tanaka asked for clarification on the assumed TOT tax.
Mr. Harper reiterated that the budget assumes an increase in the TOT tax
from the new Marriot hotels that will be coming online in FY 2020. The
recent discussion about increasing the TOT is not included in the FY 2019
proposed budget.
Council Member Tanaka asked Staff what finances the COP funds in terms of
the California Avenue garage.
Mr. Harper stated that the COPs are the revenue from the 2014 TOT
increase at 2 percent.
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Council Member Tanaka declared that he thought COPs were taking a
reoccurring revenue stream and it is converted to upfront money.
Lalo Perez, Chief Financial Officer and Director of Administrative Services
explained that the combination of the Public Safety expense and the
California Avenue expense into one. The COPs would then be issued using
the dedicated stream of revenue from the new Marriot Hotels coming online
in 2020.
Kiely Nose, Office of Budget and Management Director added that the
revenue is still coming into the fund but since there is leverage debt against
the revenue source there will be an expense.
Council Member Tanaka questioned if the tax increases for real estate or the
hotels are not assumed in the FY 2019 budget.
Ms. Nose confirmed that was correct.
Mr. Eggleston added that the Council approved Infrastructure Plan is spread
out over several years.
Council Member Tanaka wanted to know if there is any way to prioritize the
infrastructure projects.
Chair Scharff commented that all the dates are laid out in the Capital Budget
book and those dates correspond with prioritization of that project. Council
does have the capacity to change those completion dates.
Vice Mayor Filseth stated that the downtown management and system
implementation is roughly $1.25 million. The question he wanted an answer
to is if the downtown management and system implementation amount
include the upgrade to the ITT to sell and administer RPP permits.
Joshuah Mello, Chief Transportation Official noted that in FY 2019 the project
will deliver a parking permit and citation system that will include all of the
existing parking programs under one roof. It will take about a year before
that system is up and running.
Vice Mayor Filseth asked Staff if this system will renew already existing
parking permits.
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Mr. Mello voiced that existing permit users will have priority on renewing
their parking permit.
Vice Mayor Filseth reiterated that there is a balance between trying to figure
out who gets permits and who does not because the demand is high but
there is not enough capacity. He wanted to know if the balancing act is
covered in the scope of the new system.
Mr. Mello clarified that the business registry modifications that need to be
done are not part of the project. The new system will have a better link to
the business registry. If Council decides to pick and choose who gets permits
then the new system will help notify if permit holders if their business gets a
permit or not.
Vice Mayor Filseth stated that it was Council’s Motion in the California
Avenue district to go down the path of picking and choos ing which
businesses get permits and which do not. Vice Mayor Filseth recommended
Staff look into that issue further.
Mr. Mello announced that two things needed to happen if Staff and Council
decided who gets a permit and who does not. One is to implement the
system and the other is the business registry needs to be cleaned up.
Michelle Flaherty, Deputy City Manager added that there is a new contract in
place to manage the business registry.
Vice Mayor Filseth asked when an update on the contract will be.
Ms. Flaherty stated that Staff will have to come back to the Committee on
that topic.
Ed Shikada, Assistant City Manager added that there are specs on the
procurement and what can actually be delivered by the product.
Council Member Kou voiced to also add in the scope that the contractor is to
use for the Business Registry.
Ms. Flaherty articulated that the Business Registry is voluntary and the hope
with a contractor is to get more data that was not otherwise being obtained
with the existing structure.
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Chair Scharff stated that the Business Registry is not the right vehicle to get
the best data. It might be an option to get rid of the Business Registry
altogether and come up with a better plan to get quality data.
Council Member Kou agreed with Chair Scharff’s comment that there needs
to be a process that is not voluntary and provides quality data.
Chair Scharff asked for more information about the replacement for the
Newall Street Bridge.
Mr. Eggleston confirmed that the replacement is going to take place in FY
2019 but not be completed in FY 2019. There is a plan to publish a draft
Environmental Impact Report (EIR) on the project very soon.
MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to
tentatively approve the General Fund, Capital Budget, Buildings and
Facilities Capital Budget, Parks and Open Space, Capital Budget, Streets and
Sidewalks Capital Budget and Cubberley Infrastructure Capital Budget.
MOTION PASSED: 3-0 Tanaka abstain
The Committee took a break from 3:07 P.M. to 3:10 P.M.
10. Public Works Department.
a. General Fund, Operating Budget.
Alex Harris, Management Analyst announced that she would give a brief
overview of the Public Works department. Staff’s recommendation for the GF
is a custodial service delivery change from a vacant building service person
to the City’s custodial service contract. Next is to reduce the streets and
sidewalks operations which uses both in-house and contractual personnel.
With that proposed change there are will be no impact on streets and
sidewalk maintenance. Next recommendation is eliminating a vacant part-
time water truck Staffing position and realign tree division staffing which
would result in a net-zero FTE change. Another proposal is for a one-time
funding for a private development workgroup pilot to review key areas
identified in the Development Workgroup. Public Works department has an
increase of 9.2 percent increase in expenses and that was because of the
recently approved janitorial service and the tree trimming contract.
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Catherine Martineau announced that she is the Executive Director of Canopy.
Canopy has concerns about the FY 2019 budget not providing any funding
for the Urban Forest Master Plan and that is consistent with FY 2018. The
Urban Forest Master Plan was implemented in 2015, it was funded in 2016
and 2017 but it is a 10-year plan. The one momentum piece that the City
was able to scrape together was the part-time watering position and that
was proposed to be eliminated. Canopy has decided to invest some of its
own funds to work on those various projects because the City has not
proposed to allocate any money to the Urban Forestry Master Plan. Ms.
Martineau voiced that the Urban Forest Master Plan needs approximately
$150,000 in FY 2019 to be able to restart the work that was started in 2017.
Chair Scharff asked Staff if the City moved from a 7-year tree trimming
cycle to a 10-year tree trimming cycle how much money would the City
save.
Ms. Nose stated roughly $330,000 a year.
Chair Scharff voiced if half that money saved could be used to fund the
Urban Forestry Master Plan.
Ms. Nose confirmed that is an option.
Mike Sartor, Director of Public Works added that reducing the tree trimming
cycle could add stress to the existing trees.
Walter Passmore, Manager of Urban Forestry stated that the proposal for the
Master Plan was $150,000. The money would help upgrade existing
technology and the rest would go to the South Palo Alto planting initiative.
Also changing the tree trimming cycle could fund current projects but it
would hurt the existing trees that had been planted as part of a completed
project that took place in the beginning when the Master Plan was
implemented.
James Keene, City Manager reiterated that the Finance Committee voiced
that there needs to be a $5 million cut from the budget and that needs to be
kept at the forefront of everyone’s minds.
Council Member Kou noted that urban forest is now included in an
Infrastructure Plan and trees are part of the Sustainability Implantation Plan
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(SIP) too. Council Member Kou voiced frustration that the Urban Forest
Master Plan was not funded last year and is being proposed to not be funded
for FY 2019 as well.
Chair Scharff suggested cutting $150,000 out of the vehicle replacement
fund.
Mr. Sartor cautioned that fund is funded from allocated charges to
departments and it is not funded by the GF fund.
Ms. Nose clarified that 50 percent of the vehicle fund is from the GF fund
and the Committee could reorganize the GF activities to accommodate that
amount.
Mr. Sartor announced that Staff has looked into electric vehicles but right
now they are only making passenger type vehicles and not work vehicles.
Chair Scharff asked Public Works to come back with an answer on which
fund can take a cut to then fund the Urban Forestry Master Plan and present
that at the budget wrap up a meeting.
Council Member Tanaka announced that he does not agree to extend the
tree trimming cycle to 10-years. Asked if any contracts are coming up that
could increase the GF more.
Mr. Sartor articulated that in 2020 the tree trimming contract will be
expiring.
MOTION: Vice Mayor Filseth moved, seconded by Chair Scharff to
recommend to the City Council to put the Public Works Department General
Fund in the Parking Lot and request funding off-sets if the Urban Forest
Master Plan were to be funded at $150,000 annually.
Mr. Sartor articulated that the tree trimming cycle will stay at trimming the
trees every 7 years.
MOTION PASSED: 4-0
b. Refuse Fund.
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i. Operating Budget.
ii. Capital Budget.
c. Storm Drain Fund.
i. Operating Budget.
ii. Capital Budget.
d. Wastewater Treatment Fund.
i. Operating Budget.
ii. Capital Budget.
e. Airport Fund.
i. Operating Budget.
ii. Capital Budget.
f. Vehicle Replacement and Maintenance Fund.
i. Operating Budget.
ii. Capital Budget.
Ms. Harris announced that the refuse fund contains a status quo budget and
Staff recommended an increase to reflect increasing economic activity in
construction. The refuse fund contains no active CIP projects in the 5-year
CIP Plan. Major changes in the storm drain fund include d a recommended
increase in the stormwater management fee by 2.9 percent CIP. On the
capital improvement side there were 13 projects identified in the 2017 ballot
measure for the storm drain fund. The 5-year CIP for the storm drain fund
contains 4 of those 13 projects with 3 recommended to be funded in FY
2019. In terms of the wastewater treatment, fund changes were driven by a
major investment of $121 million for plant overhaul and upgrades in the 5-
year CIP Plan. There was a service delivery change resulting from the
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replacement of two incinerators with a dewatering facility. For capital
improvement project for the wastewater treatment fund there are the
advanced water purification facility, secondary treatment upgrades project,
and then the consolidation of plant repair, retrofit, and the equipment
replacement projects. Proposed changes to the airport fund included the
airport Business Plan and facility assessment to develop business goals and
assess the airport business strategy. For the CIP Plan for the airport, fund
included the airport apron reconstruction project which increased in the 5 -
year plan by $21 million. In the vehicle replacement and maintenance fund a
recommendation of eliminating a vacant stock clerk position. In the 5-year
CIP Plan, there is a schedule to replace 30 to 40 City vehicles.
Vice Mayor Filseth asked when the incinerators will be turned off.
Mr. Sartor answered that will happen at the end of FY 2019.
Phil Bobel, Assistant Director of Public Works corrected halfway through the
calendar year 2019 the incinerators will be turned off.
Council Member Kou asked Staff if the airport Business Plan was intended to
be cost recovery or self-sufficient.
Mr. Sartor articulated that the goal is to have the Airport Enterprise Fund be
self-sufficient. One thing that is stopping that from happening is the
outstanding GF loan that is roughly $3.2 million. Another obstacle is the
Federal Aviation Administration (FAA) requires matching funds from the City
for a grant that is used to repave the runways. That is a continuous payment
of $1 million for the next 3-years. Staff is looking into a State loan that could
pay off the GF loan and pay the matching amount for the FAA grant.
Mr. Keene reiterated that there is a plan in place to recapture the capital
expenses and get any obligations paid off.
Council Member Tanaka asked Staff if the fees that are charged at the
airport are regulated or can the City change those.
Mr. Sartor stated that the airport does charge market rates for the rents that
are charged to the tenants.
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Council Member Tanaka stated that most of the people who use the Palo Alto
airport are not residents.
Andrew Swanson, Airport Manager announced that there is a large amount
of Palo Alto residents and then neighboring residents. Mr. Swanson did not
know the exact number but voiced he could bring it back to the Committee.
Council Member Tanaka suggested raising the rate on non-residential
patrons using the airport.
Mr. Sartor cautioned that any money that is raised by the airport enterprise
fund cannot be transferred to other funds.
Council Member Tanaka clarified that the funds could be used to pay down
the FAA loan. Council Member Tanaka asked a question of when the rates
will be reviewed again for the airport.
Mr. Sartor noted that rates were renegotiated last year.
Mr. Swanson confirmed that was correct. Rates and fee study were done and
updated all of the leases. The department will be bringing that study to the
Council to review and start working on the Business Plan for the airport.
Council Member Tanaka asked why in terms of wastewater on the collection
side there is a big increase but on the processing side, there is a decrease in
expenses. He wanted more clarification on why that is.
Mr. Bobel explained that from FY 2018 to FY 2019 the collection system is
increasing the capital portion of the budget substantially and also rebuilding
the reserves. The collection system costs are the bulk of the expenditures,
not the treatment plant.
Council Member Tanaka declared that the vehicle operation and maintenance
went up about $1 million which is the biggest increase compared to previous
years.
Ms. Nose answered that this is normal annual operations but the bigger
changes included allocated charges like City-wide overhead costs, general
liability costs, etc. Another big change was the operating transfers out which
is the contribution to the IRS Section 115 Trust Fund.
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Brad Eggleston, Assistant Director of Public Works clarified that the increase
is actually due to the vehicle replacement’s share of projects to replace roofs
for Municipal Services Center (MSC).
Chair Scharff asked Staff what happened to the idea that if hangars were
added at the airport it could bring in revenue for the City.
Mr. Sartor interjected that the construction to replace the aprons, which is
where the aircrafts park, has built in areas for future solar panels. Mr. Sartor
voiced that Chair Scharff might be referring to the idea that there could be
shade from solar panels with a tie down for an airplane underneath and that
could possibly bring in revenue and electricity for the City.
Lalo Perez, Chief Financial Officer and Director of Administrative Services
added that the suggestion of the solar panels is something that could be
examined while making the Business Plan for the airport.
Mr. Sartor added that as part of the Business Plan there is going to be a
building assessment and possibly having another CIP to do maintenance
work on all the buildings located at the airport.
Chair Scharff inquired that compared to surrounding Cities what does Palo
Alto do that other City airport’s do.
Mr. Swanson reported that Staff is following where the electric aircraft
project is and hopes to be one of the lead airports to have training for that
when it comes out. Also, the introduction of the solar panels.
Vice Mayor Filseth asked how many landings a day are there a day at the
airport.
Mr. Swanson answered on a busy day about 500.
Vice Mayor Filseth suggested having a path from the airport terminal to the
golf course.
Chair Scharff articulated that he was concerned about approving vehicles
and suggested looking into purchasing more electric vehicles.
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Raul Juarez, Fleet Manager explained that the proposed budget for FY 2019
is $3.5 million for vehicle replacement. In FY 2019 the schedule is to replace
a Honda Civic with Ford Fusion Hybrids. Electric vehicles have a range of 60-
miles, they also require maintenance, and they are more expensive.
Vice Mayor Filseth wanted to know if the electric passenger vehicles have
different maintenance schedules than a working truck.
Mr. Juarez declared that it varies.
Chair Scharff wanted to know why it was costing more to keep electric
vehicles running.
Mr. Juarez explained that electric car parts are more expensive, certain
vehicles require certain computers or hardware for their type and other
various things.
Mr. Sartor suggested to come back to the Committee with more information
and breakdowns between gas and electric vehicles at the wrap-up meeting.
Chair Scharff suggested to think about leasing vehicles instead of buying and
that would help cut down maintenance costs.
Council Member Tanaka suggested to calculate mileage when using a sedan
and then reimburse the employee. That may be cheaper than actually
driving a vehicle around town.
Council Member Kou asked if towing something would drain the electricity
faster in an electric vehicle.
Mr. Juarez announced that there are no heavy-duty trucks yet that are
electric. Most of Palo Alto’s vehicle fleet at heavy-duty trucks and vans.
Specialty equipment such as backhoes, air compressors, tractors and more
make up the biggest percentage of the fleet at 22 percent.
Council Member Kou wanted to see the list of vehicles.
MOTION: Vice Mayor Filseth moved, seconded by Chair Scharff to place the
Vehicle Replacement and Maintenance Fund, Operating and Capital Budgets
in the Parking Lot and recommend to the City Council to tentatively approve
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the Refuse Fund, Storm Drain Fund, Wastewater Treatment Fund, and
Airport Fund for Operating and Capital Budgets.
Council Member Tanaka declared that costs are going down by 12 percent
overall but revenue is going down by almost 18 percent. He wanted to know
what the main drivers are from other agencies and he asked for more
explanation.
Ms. Nose noted that for wastewater there was a state loan and significant
capital improvement for FY 2018. That was taken out of FY 2019 and that
explains the drop.
MOTION PASSED: 4-0
Ms. Nose reiterated that the Library Department is the first item to be
discussed at the wrap-up meeting. Then the Urban Forest Master Plan and
then the Vehicle Fund responding specifically to the number of vehicles the
City has, the types of vehicles, and cost-benefit analysis of electric vehicles.
Chair Scharff added what vehicles are being replaced and what is the long-
term plan. Also, information about leasing a vehicle instead of buying.
Chair Scharff stated that the Committee does not need to make this decision
but do not buy any vehicles until it has been reviewed by the Committee.
Council Member Tanaka wanted more information on the passenger vehicles
and to track the mileage.
Ms. Nose noted that leasing a vehicle and a change in how services are done
may take a little longer to produces data for the Committee.
Mr. Sartor stated that in terms of using an Uber instead of driving a City car ,
the Human Resources Department would have to weigh in on that because
there may be some Union risk management issues.
Ms. Nose reiterated that Staff can bring back a list of vehicles that are going
to be replaced next year but items more complicated like a lease model is
going to take more time.
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Vice Mayor Filseth announced that he liked the two 8-hour meetings instead
of a bunch of mini-meetings spread out over the month.
ADJOURNMENT: Meeting adjourned at 4:20 P.M.