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HomeMy WebLinkAbout2023-05-05 Finance Committee Summary MinutesFINANCE COMMITTEE SUMMARY MINUTES Page 1 of 19 Special Meeting May 5, 2023 The Finance Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 9:00 A.M. Present In Person: Burt, Lythcott-Haims, Stone Present Remotely: None Absent: None CALL TO ORDER Chair Burt called to order the special meeting of the Finance Committee. Roll was taken, and all members of the committee were present. PUBLIC COMMENT There were no public comments. ACTION ITEMS 1. Fiscal Year 2024 Budget Process Overview Assistant City Manager Kiely Nose gave some updates on the OpenBudget web app, At-Places Memorandum, and the Staff presentation for today. The plan for the meeting was a combined presentation under each agenda item with committee member discussion on a 5-minute timer. There would typically be tentative approval of specific topics, documented by Staff, which would help when reporting to Council at the May 22 study session. Another option was to place items in the "parking lot" to be revisited in the future. The At-Places Memo was intended to be a tool to reference during the meeting and help the dialogue. The goal was for a roughly formed recommendation for the Council to react to and then reconcile the following Tuesday. She reviewed how the parking lot category will work and gave dates to join the budget conversation. She gave an overview of the $975M budget including the $275M General Fund budget as well as the $324M Capital budget in FY 2024. The budget was based on using one- time funds to bridge the next two years, using the Uncertainty Reserve and the Budget SUMMARY MINUTES Page 2 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Stabilization Reserve, with a forecasted deficit in 2026. She presented a chart showing the historical full-time staffing from 2002 to present and a chart showing the full-time staffing and vacancies between this year and last year, with a difference of 35 full-time positions in the full budget. There was a 14% vacancy across all funds, with 143 vacant positions compared to the 1023 current authorized. Turnover has decreased. Assistant City Manager Nose discussed updates in the Retiree Benefit Funding Policy. The pension was started in 2017, funding at a 6.2 discount normal cost rate, fully implementing the 5.2 or 5.3 discount rate this year. By policy, any excess in the Budget Stabilization Reserve goes 50/50 to capital and the pension. Chair Burt explained that cuts in staffing in 2020 and looking at restoring positions for FY22 required determining how conservatively to budget. Overly conservative budgeting meant not restoring positions, but at the end of the year, because of the underestimated revenue and overestimated expenses, those funds would not then be available for restoration of services and would get split between the pension fund and the capital fund. The current formula worked well in a normal time frame and may be the right formula this year, but it created a dilemma the last couple years on how to restore services if the dollars go to other purposes. Budget Manager Paul Harper presented a slide showing the balancing strategy over the next two years and the use of the various reserves to keep the General Fund solvent through 2025. He showed the General Fund projected revenues over the past few years and the estimated revenues for 2023. There was about $9M additional revenue projected in 2023 beyond what was said in the midyear. About 75% of this revenue, about $6.5M, was put into the proposed budget document. Council Member Lythcott-Haims asked about the additional $2.5M in that $9M. Budget Manager Harper stated that was not the amount for tier two but an additional amount projected to come in. Assistant City Manager Nose added that from an expense standpoint, there was between $1M to $2M in vacancy savings. Other savings varied widely and the best guess was reaching budget levels, though it depended on contract processing. Staff was concerned that there have recently been new labor contracts implemented and the vacancy savings are being used to pay for those contracts. Budget Manager Harper described the effects of Measure K and Measure L on the budget, with about $750,000 still unbudgeted for housing and homeless services. He presented an overview of proposed investments in the budget and recommendations for the Council Priorities Reserve. Assistant City Manager Nose explained how the $2.25M for the Council Priorities Reserve was determined. Of note, all of the labor contracts end in 2025, so in 2026 there will be new SUMMARY MINUTES Page 3 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 contracts. Another unknown piece was what is happening in the markets and how that impacts pension costs. Council Member Lythcott-Haims asked why the Uncertainty Reserve was able to be used up in two years. Assistant City Manager Nose stated the Budget Stabilization Reserve was the core reserve. The Uncertainty Reserve was set aside knowing there were future deficits and surplus funds and not wanting to reduce services. It was set aside proactively with the intent to spend it quickly to cover those deficits in the near term. Chair Burt added that since that was set aside, there was now also $6.5M, perhaps $9M, in surplus for FY23 that was not part of the projection at the time the reserve was created. Assistant City Manager Nose added that it was used to manage through the recovery period without messing with the Budget Stabilization Reserve. Moving out of the pandemic, the management team was focused on stability. Vice Mayor Stone reiterated that the reason for the large surpluses last year was the extent of the uncertainties of the pandemic and a rebound that was not expected at that level. Moving forward, the estimates were much closer to the mark. He questioned if the deficits in 2026 included the expected 2% bump on salaries. Assistant City Manager Nose explained that as soon as a contract ends, it returns to the normal assumption of a flat 2% annually. At that point, the 20% BSR would hopefully drop down to 18.5% if it were past the uncertainty period and would help deal with the deficit. Chair Burt added that the reduced transfer rate for the gas transfer was looked at as essentially a one-year change from the normal rate. When looking at the $6.1M deficit in 2026, it was under the assumption that there will be no surplus in FY25 and that revenue and expenses were both budgeted conservatively. Council Member Lythcott-Haims questioned the investment of the Budget Stabilization Reserve money and the assumptions made on returns. Assistant City Manager Nose stated interest was taken into consideration. The investment portfolio of all funds across the organization was over $5M, and the earnings on those was reflected across all funds based on the cash balances. Those investment earnings were used as a revenue source each year as part of General Fund revenues. Budget Manager Harper gave an overview of the 5-year plan for the Capital Improvement Program, which was going into the billions this year for the first time. The major sources coming into the fund were the transfer from the General Fund and the fund balance/reserve. He gave more details on the General Fund transfer over time. In the departmental sections, he first discussed the nondepartmental section, which includes citywide projects or programs that do SUMMARY MINUTES Page 4 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 not fall into one specific department, including contingent accounts, Project Homekey, the Budget Uncertainty Reserve, Council Priorities Reserve, and Transfer to Infrastructure. Council Burt questioned whether the $1M for Project Homekey would be rolled over given that it would not be operational for more than a year. Budget Manager Harper stated it would probably be rolled over as part of the appropriations. It could also be used to cover some of the capital needs. Assistant City Manager Nose stated Staff was assuming that the 2023 money set aside for Homekey operations would go toward helping fund the capital gap. Budget Manager Harper stated the Uncertainty Reserve would move into 2025 to cover funds for next year. The Council Priorities Reserve was there as a placeholder. It was assumed that will be spent in 2024. Council Member Lythcott-Haims asked if the HSRAP in the contingency accounts was the same as that in tier two. Budget Manager Harper stated they were two different things. The contingency was set up every year for potential needs that come forward throughout the year. If it were used to cover the tier two item, it would not be available for additional needs through 2024. Assistant City Manager Nose added that the money in nondepartmental was set up as an annual allocation to be used for emerging or urgent needs. It was counted as part of the HSRAP funds, but HSRAP does not use it as part of the formula when they do the grant application. In addition, it was on the tier two list so that Council could augment beyond that additional $100,000 at their discretion. Budget Manager Harper reviewed the major proposed changes in the General Fund for nondepartmental: Chamber of Commerce funding to facilitate economic development, childcare pilot program to subsidize child and afterschool care for qualified City employees, and use of $3.9M from the Uncertainty Reserve for citywide reinvestments. PUBLIC COMMENT 1. Sarah Burgess, President of Neighbors Abroad, discussed the group's benefits to the City of Palo Alto, including economic development; student exchange; diversity, equity, and inclusion; and sustainability. She discussed the funding challenges of sibling city relationships and requested that a stipend of up to $20,000 per year be put into the City's budget to be allocated toward the expenses necessary to entertain sibling city delegations, to be paid on a reimbursement basis. This money would go toward meals, entertainment, local transportation, and other expenses necessary to entertain these foreign dignitaries. SUMMARY MINUTES Page 5 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 There was discussion about Staff providing a list of the requests under each priority. Chair Burt stated it would be helpful to have a realistic vacancy level averaged over the course of this year. He asked what additional dollars would be potentially available for tier two allocations from the non-Public Safety General Fund vacancy levels. Assistant City Manager Nose stated looking historically at vacancy levels in the General Fund and how departments are using those vacancy savings, it resulted in $1M to $2M. Chair Burt stated vacancies of $1M to $2M plus $2.25M for tier two is $3.25M to $4.25M as a range. Staff did not want to make assumptions that revenues above the forecast would carry through for the balance of the year, but some fraction of that could potentially be projected or assumed. Council Member Lythcott-Haims mentioned the additional $750,000 unbudgeted affordable housing that can be used for worthy items in tier two. She questioned if the $125,000 in the City Council Contingent Account was allocated every year. Budget Manager Harper stated the Contingent Account was "refilled" every year at $125,000. If it were used for tier two, it would not be there if any emergencies or other needs came up throughout the year. Chair Burt questioned if the gas transfer in the FY25 and 26 assumptions was 15.5% or the full transfer of 18.5%. Assistant City Manager Nose stated they were aligned with what the Council approved in the 5- year fiscal plans for the gas utility. It had a general CPI and maintains approximately 15.5%. If Council chose to change that, it could change the forecast for FY25 and 26. Putting on the additional vacancy savings and revenues means that Staff believes they can call the budget within 0.6% of accuracy, which was an uncomfortable level. City Manager Ed Shikada added that the tier two list has been developed across departments based upon an assumption of $2.25M actually being used and still does not fully reflect the support resources necessary. If the Council chose to allocate more than the $2.25M, it would trigger additional expenses for the support services that have not already been articulated. Vice Mayor Stone clarified that spending above $2.25M would be more expensive, not a one- to-one ratio, because of the need for additional support services. City Manager Shikada agreed and added that even the $2.25M does not adequately list out the admin support needed. Assistant City Manager Nose stated the admin support needed by proposal is very different. For example, there are very different needs between investing in all electric vehicles versus developing a brand-new short-term rental program. SUMMARY MINUTES Page 6 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Council Member Lythcott-Haims felt this was an extreme move regarding the comfort level of the Budget Stabilization Reserve and questioned that. Assistant City Manager Nose stated the BSR would not typically ever be touched outside of an unforeseen emergency. Chair Burt asked if the BSR was drawn down during the FY2021 budget that was formulated as the pandemic was hitting. Assistant City Manager Nose was unsure of the exact number but believed it dropped below 18% but not as low as 15%. Chair Burt stated that was something to be conscious about as it is now at 20% during a recovery period. Council Member Lythcott-Haims asked for details on the Childcare Pilot Program. City Manager Shikada stated that would be covered more in the HR discussion, but it was in the initial stage and had not been scoped at this point. It was used as a placeholder to identify an area of interest complementary to the PAUSD enrollment movement. He mentioned the California Business Roundtable Voter Initiative that could have a significant impact on finances should it proceed. Assistant City Manager Nose additionally explained that that was retroactive to January 2022 and both the tax and gas measures fall under that parameter. It also calls into question charges for services and impact fees. City Manager Shikada stated this will be brought to the full Council for further discussion in a couple weeks. There was discussion on potential additional funds, which would be as much as $7.5M to $8.5M on the high end. Vice Mayor Stone asked if there was a ballpark figure on additional administrative costs involved with tier two. City Manager Shikada stated that the discussion would give a better sense of those costs. MOTION: Council Member Lythcott-Haims moved, seconded by Vice Mayor Stone, to approve the tentative non-departmental items and add the following additional sources in the parking lot from tier two to include: • $1M to $2M from vacancies • $750,000 from affordable housing/homeless support SUMMARY MINUTES Page 7 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 • Potential $1M from gas transfer tax up to 18% • $2.5M in the budget surplus in excess revenues MOTION PASSES: 3-0 2. Community and Library Services a) Community Services b) Library Budget Manager Paul Harper displayed an overview of the budget for Community and Library Services with a breakdown between the two. Community Development Director Kristen O’Kane discussed the community impact of the proposals and the current budget, as a response to increased demand in the community. She listed the major proposed changes in the General Fund. The outlook is to provide classes, camps, and programs; increase leadership capacity; reinvigorate and expand community events; and continue collaborations with nonprofit partners and community-based organizations. Library Director Gayathri Kanth discussed the importance and impact of libraries for everyone in the community. She reviewed the major changes to the General Fund, including increasing library hours, replacing Chromebook laptops for the lending program, and a pilot program to expand delivery service to Saturday. PUBLIC COMMENT 1. Karen Kwan, Director of Development with Palo Alto Arts Center Foundation, was appreciative for the Council's support and continued championship of the work at the Arts Center. She stated this is the only Community Services Department facility that is regularly open to the public that provides registration and point-of-sales services that has not had a Program Assistant I position restored. She urged the Council to consider restoring this position in FY24. Chair Burt asked about space issues in addition to staffing issues at the Arts Center and whether anything was in progress to address that issue. Director O'Kane stated that most classes at the Arts Center were full with waiting lists, including camps. If there was more space, more classes could be offered. There was a plan for a fundraiser to expand the center, but there was not another stopgap measure in the meantime. SUMMARY MINUTES Page 8 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Vice Mayor Stone asked about the necessity of the Coordinator Recreation Programs position as a fulltime position. Director O'Kane stated it was a combination of expanding existing events, doing more popup events, and also having a centralized location for marketing within the department, so it was a fulltime position. Chair Burt felt that having someone focused on special events was of value and was pleased to see this additional focus on special events in the proposals as the community seems to disproportionately value special events. The events also aid in economic development. He was glad to see the children's theater was restored and discussed the impact and value of that. He also spoke about the impact of libraries and was pleased about additional hours for libraries, particularly at College Terrace, which also acts as a community center. He noted the importance of being deliberate in engagement with all of the different cultures and communities that make up the City. He asked when the Junior Museum and Zoo was coming back to the Council as it has a significant budgetary impact. He also asked about the potential of loosening the reservation requirement for that facility. He suggested a pilot of trying one day a week on a first-come-first-served basis. Director O'Kane stated Staff was in the process of getting a consultant on board to do a business plan. She anticipated presenting to Council once that was done. She stated a lot of the reservation system had to do with managing crowds during COVID and agreed that a pilot would be a great idea. There was also an RFP in place to get different ticketing software. Chair Burt questioned if there was any consideration toward maker spaces in libraries. He was disappointed in the $50,000 increase for HSRAP funding and wanted to ensure that Ada's Café was addressed with any additional HSRAP funding. Director Kanth stated the second floor of Mitchell Park has been reconfigured, and she hoped to be able to give more information on ways to reimagine that space. One example was the Teen Advisory Board's initiative to get sewing machines. Vice Mayor Stone was also disappointed in the $50,000 increase. He asked if there was anything that tied that to a percentage of the General Fund. Assistant City Manager Nose stated Staff was unable to find a policy that pegged it to a percentage of the General Fund but looked back at HSRAP funding back to 1999. The calculation was done based on those numbers and annually increasing it by CPI. Vice Mayor Stone questioned the process of the library delivery on Saturdays. He asked why the volunteer path for the Palo Alto Arts Center was considered not to be sustainable since it has been done for the past several years. SUMMARY MINUTES Page 9 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Director Kanth explained that deliveries are already done Monday through Friday but not on Saturday, the busiest day at most libraries. It was something Staff wanted to try as a faster way of delivering materials, especially with the possibility of more hours open. Director O'Kane stated volunteers were handling art that has high value and that the City ensures. The foundation was covering the costs of that but has not committed to doing so long term. If it was not funded through tier two, things would continue using existing staff where possible. Council Member Lythcott-Haims offered that the HRC had articulated a hope for three tiers of additional funding regarding HSRAP should Council be inclined and have already decided in advance what they would do with those monies. In addition to Ada's, two organizations that did not get funded were Adolescent Counseling Services and Blossom Birth Prenatal Care. She acknowledged the importance of libraries and asked about data regarding the cost of running each library and the number of people served annually at each. Director Kanth stated it was a tricky question because the formula changes regarding how many days a library is open and there are also many people working behind the scenes working for various locations. Cross-training staff to be able to fill in anywhere was in progress. On average, it was about $150,000 for a smaller library to open an additional day. Council Member Lythcott-Haims was interested in the annual operating budget and what it takes to run these libraries. She asked why the Admin position at the Arts Center did not make it into the main budget proposal. She asked about the cost of tickets for JMZ attendance and the expected annual revenue from that and was interested in the expense associated with going to a ticketed model. She asked if there was still a problem with vacancies in the teen mentor positions at the Palo Alto Youth Council's Teen Center. Director O'Kane responded that they looked at proposals for what helped generate revenue and what was a direct service. The Program Assistant is a very important position, and while there is interest in the additional hours, it would not necessary be revenue generating. The current ticket price for JMZ was $10 per person, with different membership tiers available and several ways to get discounts and free passes. Revenue so far from general admission and memberships was around $900,000. The software was budgeted at $50,000, and taking tickets does not require additional staff. The Teen Center has not been open since the summer because of an inability to get it staffed. Chair Burt wondered if adult volunteers in the community filling those positions was a possibility. There was further discussion about this. Vice Mayor Stone mentioned the $200,000 increased funding for Youth Mental Health and asked what that could do to expand the Teen Center hours. SUMMARY MINUTES Page 10 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Director O'Kane stated the issue was not the lack of budget but the inability to fill the positions. She felt those funds might go more toward programs or services rather than staff. Chair Burt added there was a stage and courtyard and wanted to think about having more youth performance opportunities there. Director O'Kane felt things like theater and sports also contributed to youth mental health. Chair Burt asked if there were any changes in staffing from the baseline of 2020 in either department. Director O'Kane stated it was almost identical to FY19. Director Kanth stated Library was still about three positions down, but the tier two proposal, if adopted, would make it up. MOTION: Vice Mayor Stone moved, seconded by Council Member Lythcott-Haims, to tentatively approve the Community and Library Services budget proposal and add to the parking lot the following: • Add additional funding of $150,000 for HSRAP and discussion on future funding of HSRAP as % of general fund or based on CPI • Tier 2 proposals to consider: o One of two positions proposed for the Art Center o The coordinator position for JMZ o Library restoration o Eucalyptus tree removal o Youth mental health o Therapeutics programming There was discussion on the wording of the motion and the items to include in the parking lot, with more discussion about several of the items. MOTION PASSED: 3-0 The committee took a break from 12:12 to 1:00 P.M. Budget Manager Paul Harper displayed the parking lot and explained the status of the budget items. SUMMARY MINUTES Page 11 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Chair Burt discussed adding funding for Neighbors Abroad to the parking lot. The Committee agreed to add to the parking lot $20,000 funding for Neighbors Abroad. 3. Planning and Transportation a) Planning and Development Services i) Community Development Block Grant (CDBG) Fund ii) Stanford University Medical Center (SUMC) Fund b) Office of Transportation i) Parking Special Revenue Funds Senior Management Analyst Kayla Shapiro reviewed the proposed budget for the Planning and Development Services and the Office of Transportation departments. Director of Planning and Development Services Jonathan Lait discussed this year's focus for the department toward the Council's priorities and community service. The major proposed changes include adding a Code Enforcement Supervisor, a Senior Planner for Historic Preservation Program, funding to begin Palo Alto Renal Registry, and funding to secure Building Plan Review consultants as well as reclassifying 8 total positions to Senior Building Inspectors. Chief Transportation Official Philip Kamhi discussed the budget summary for the Office of Transportation with a focus on developing and implementing bicycle and pedestrian plans leading to improved infrastructure. The major proposed changes include adding a Planner to manage bike and ped projects and a one-time loan of $500,00 from the General Fund in response to decreased parking demand. He detailed the three parking funds and the current permit system. The Office of Transportation initiatives included monitoring improvements of transportation and traffic systems, Palo Alto Link, car-free streets, Safe Streets for All, and parking planning and management, with key CIPs to include Churchill Avenue enhanced bikeways, Bicycle and Pedestrian Transportation Plan, grade separations and quiet zones, Safe Routes to School, and Churchill/Alma safety project. PUBLIC COMMENT 1. Justine Burt, Executive Director of Palo Alto Transportation Management Association, stated the organization provides incentives to workers downtown and on California Avenue in an effort to reduce traffic congestion and demand for parking. She described SUMMARY MINUTES Page 12 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 some of the services offered by PATMA and how they help realize the Council priorities. She appreciated the City's support of PATMA's work. 2. Nathaniel Duncan, General Manager of Patagonia Palo Alto, stated that since working with PATMA and Bike Love he has had zero turnover of employees and his business has grown despite the challenges of the pandemic. There was also a benefit to downtown in that employees were more likely to spend their money downtown, and he was appreciative of the ability to recruit and retain employees and engage with the community while working out of the pandemic. 3. Rob George, Treasurer and founding member of Palo Alto TMA, thanked the City and Council for the continued support of the Palo Alto TMA. He asked the Council to consider giving the TMA permission to use its resources to provide transit passes all the way to the borders of Palo Alto. Chair Burt spoke about the benefits of the TMA and has advocated with Caltrain and VTA to use Palo Alto's model of initiative as a package. He had not previously realized the value of that as a retention incentive on top of everything else. Council Member Lythcott-Haims inquired if there was a budget request related to TMA. Chief Transportation Official Kamhi responded that the TMA was currently proposed as $200,000 to be paid out of the parking funds. Chair Burt asked if the passes the TMA distributes are donated or purchased. Chief Transportation Official Kamhi stated the Caltrain passes are a donation. The TMA was only in downtown and California Avenue, but there are now also options like Palo Alto Link available to get someone to Caltrain. Chair Burt wanted to clarify if the limitation on the geographic area, due in part to lack of resources and high demand, has now changed, with surplus passes and additional funding not required to expand the geographic area. Justine Burt responded there were additional passes and being able to do outreach and give out those passes would support Caltrain without additional City funding. She mentioned that a local business using transit passes from PATMA means the staff do not have to drive in, leaving more parking for customers. Chair Burt added that this also addresses a social equity need as PATMA had identified in the past that lower-income workers had the greatest need. He welcomed receiving additional testimonials. SUMMARY MINUTES Page 13 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Council Member Lythcott-Haims asked how optimistic the Planning and Development Department was that there were people recruitable at the dollars available. She asked Director Lait to speak about the tier two items. Director Lait stated the issue was twofold. It was felt that upgrading the Plan Review Engineer to a Senior Plan Review Engineer will be more competitive to bring someone in. There was also a challenge relating to technology. Before the pandemic, it was a paper plans operation. The pandemic made everything electronic and separated Staff from the customers, slowing down response times, which needed to be adapted to. Another recruitment challenge was the difficulty in getting consultants in. The number one priority for the tier two items was the Plan Review Engineer position, followed by the zoning code update and bird-safe glass and wildlife protection. He had a question mark on initiation of the downtown housing plan. One of the employees in the long-range planning program was planning to leave the department. Director Lait was concerned about the current 43% vacancy and not having the capacity to take on a lot more work. Similarly, the coordinated area plans were very valuable but take a long time and require a significant investment in staff time. Council Member Lythcott-Haims asked if the alternative to a coordinated plan was an ad hoc approach, approving things on a one-off basis. Director Lait stated that yes, it would be somewhat ad hoc and that a coordinated plan would be important for the San Antonio corridor in particular. Council Member Lythcott-Haims asked about a ballpark cost for a getting the ball rolling on a coordinated area plan for just San Antonio. Director Lait estimated that using Cal Poly grad students to do a higher-level concept would cost $50,000. He stated that it would be around $2M and take 4 to 5 years to complete a coordinated area plan for San Antonio. City Manager Shikada added that it can be difficult to retain the staff for such a daunting effort like that and suggested reconsidering the CAP process. There was further discussion about this. Vice Mayor Stone commented on the common problem that even if the positions are available in the budget, they are still difficult to fill. He liked the idea of partnering with Cal Poly. He asked the number or percentage of the 2000 code enforcement complaints received that were actually resolved. Senior Business Operations Manager Sarah McRee stated there was a significant spike in leaf blower complaints and that over 80% of those complaints were generated by the same 10 community members. Of the FY23 cases, 58% remain open, likely because they are still coming in and being followed up on. SUMMARY MINUTES Page 14 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Director Lait added that that spoke to the interest in adding a supervisor in to oversee the completion rate and boost that up. Chair Burt felt there were approaches that could be adopted regarding leaf blower complaints that would be oriented more toward self enforcement, aside from just hiring more enforcers. He discussed the intersection between the Development Center and the climate initiatives, particularly electrification and offered some suggestions to integrate those efforts. He questioned if authorizing PATMA to have an expanded geographic zone should be folded in here or was outside of budgetary considerations. Chief Transportation Official Kamhi stated the PATMA annual report will be coming to Council in the next two months and the report includes testimonials. Assistant City Manager Kiely Nose stated it sounded from the public comments like they could use the donated passes to expand the geographic area. If so, then no action needs to occur. Chief Transportation Official Kamhi added that the administrative funds were used for the staffing to distribute the passes even though the passes were donated. MOTION: Council Member Lythcott-Haims moved, seconded by Council Member Burt, to tentatively approve the Planning and Transportation budget proposal and add to the parking lot the following: • Permitting and inspections • Zoning code update • Evaluation and recommend strategies to protect bird and wildlife habitats • Ball rolling on San Antonio coordinated area plans concept • Housing Ad Hoc committee • Clarification on administration of TMA passes • Seismic update • Short-term rentals There was discussion on the items to be included in the parking lot, with further explanation of several items. MOTION PASSED: 3-0 SUMMARY MINUTES Page 15 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 Assistant City Manager Nose presented the consolidated list of tier two as requested earlier, which will also be posted to the website for the public. It was the Council's 2023 priority list in full with added any of the items on tier two that are not on the list as well as all the dollars. 4. Public Safety a) Fire b) Office of Emergency Services c) Police Management Analyst Oscar Murillo presented the budget summary for the services areas of Public Safety. Fire Chief Geo Blackshire stated for the first time in four years, the vacancies in the administrative staff were full. There were also 13 new recruits in the fire academy, which will have a positive effect on the mandatory overtime issue. There was also 120% increase in 2 years in the amount of women in the Fire Department. In response to Mayor Kou's recent question on why Fire Station 4 was not staffed with a fire engine, he discussed that the current model was a result of budget cuts that impacted the department's resources over years. He explained those cuts in detail and also the restructuring in 2021 that staffed every station with personnel 24/7 and staffed three fulltime ambulances. One of the impacts of that restructuring was taking Engines 64 out of service because this was the best way to use the resources available. Fire resources needed to be used to right-size the EMS model. The current model was working, with the team able to serve the community effectively, but there was a toll on the firefighters doing more work with fewer people and fire engines. He discussed the proposed budget for the Fire Department with a focus on increasing staffing and upgrading facilities and equipment. The major proposed changes include two Fire and Life Safety Inspectors; 0.96 FTE hourly positions to support training and fire academies; water rescue, active shooter, and other equipment upgrades; and wellness toolkit. He further detailed those items. Office of Emergency Services Chief Kenneth Dueker gave an update on the OES budget with a request to add one Emergency Services Coordinator position. The role of OES was to support the City Manager and other City Staff in operating in a crisis, and adding this position would give the office more strength and sustainability. He reviewed the department outlook for 2024. Police Chief Andrew Binder reviewed the proposed budget for the Police Department, including increasing towing budget, adding two contract mental health clinicians, adding two Police Officers for Traffic Enforcement, adding one Admin Associate II for Patrol operations, and adding 0.30 FTE hourly Property Technician. There was also a tier two request to add two dispatchers in order to return to pre-COVID numbers. He reviewed the department outlook for SUMMARY MINUTES Page 16 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 2024, notably moving into the new Public Safety Building, focusing on recruiting, and continuing community engagement. There were no public comments. Vice Mayor Stone asked if Stanford cost shares the dispatchers since they share services with the dispatch center. He also asked about the offset from Stanford and Valley Water for the tier two water recycling fire equipment. Chief Binder responded that Stanford cost shares for dispatching services but was unsure of the exact percentage. Budget Manager Paul Harper stated the offset for capital equipment was usually around 16% of the total. Vice Mayor Stone asked if the Police Department had looked into a pilot program of replacement with EV vehicles. A one-car pilot would not be a huge chunk of the $800,000 for EV replacement. He asked if the two Police Officers for traffic enforcement meant hiring two new officers or a lateral transfer within the department. He asked if two was enough to restore the Traffic Enforcement team. He questioned if additional funding would effectuate the goal of adding diversity to the department. Chief Binder was open to an EV pilot if it was a feasible option. The traffic team was previously cut and needed to be built back. Officers need to be hired to support that. He felt two officers was enough to restore Traffic Enforcement. In the past, the Council has given the police department a bucket of money to supplement things, such as a bike or foot patrol on an overtime basis. He was open to those discussions. He was encouraged with the current ability to recruit diverse applicants and happy with the progress there. Management Analyst Oscar Murillo was able to confirm the revenue offset from Stanford for the two dispatchers was 16%, approximately $50,000 of the $318,000, which brings it just short of $267,000. Council Member Lythcott-Haims questioned how the Fire Department determines the owner of a building or parcel of land that has sustained a fire and how quickly after fire response are owners able to be notified. She asked about the priority of the tier two items for Fire. Chief Blackshire stated the information about ownership was usually received from the dispatchers after the fire was suppressed. He stated the highest priority of tier two was the fire utility task vehicle. The fire services dispatch software and the water recycling fire training equipment were not as high priority. Council Member Lythcott-Haims asked Chief Binder why there was such a huge jump in projected calls. She questioned how many canine units the department has and the cost SUMMARY MINUTES Page 17 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 involved. She asked about the plan to facilitate the public's understanding that the RIPA data is available and what it means. Chief Binder stated that pre pandemic, it was between 50,000 and 55,000 calls for service, which is coming up, and bringing back the traffic team will also impact the number as traffic stops are included. There was currently one canine unit, and within the budget was a line item for $15,000, which covered food, training, etc. There was a dedicated RIPA webpage, which had been mentioned in the City Manager notes and will continue to be put out on social media. The data was an aggregate without context, and they were working with data analysts to examine that data and tell the story. Council Member Lythcott-Haims asked about the priority of the tier two request for increasing public safety dispatcher staffing. Chief Dueker strongly advocated for that increase in public safety staff but deferred to Chief Blackshire for operations. Chief Blackshire supported anything to help shore up that team. He stated that job takes a lot of training, discipline, and courage. Chief Binder added that adding staff would allow mentoring, training, and improving the skill set within that department on top of everything else. Council Member Lythcott-Haims discussed opportunities for youth to experience and gain interest in these fields and wondered whether there was any interest in such a thing. Chief Blackshire described the previous Explore Program for high school students. It was recently discussed as an action item to try to bring that back and see what is a sustainable program. He talked about the benefits of the program. Chief Binder stated they had a similar program that was also cut. He was interested in that but it would take capacity and finances. Chief Dueker stated Emergency Services supported the PD program and felt it would be great to restart that effort when the budget permits. Chair Burt added that the Explore Programs were co-ed, which helps gender diversity as well. He asked if dispatch was currently fully staffed with the 18 authorized. He wanted clarification on whether additional funding for PERT was being pursued through the County. Chief Binder stated there were four vacancies and was confident about getting to fully staffed. He stated Palo Alto was fortunate enough to participate in the PERT program with the County, but the money was always due to run out in June of this year. An alternative source of funding was pursued and found through Stanford to fund those two clinicians without money coming out of the City's budget, but now it looks like the County may also fund a PERT clinician. He SUMMARY MINUTES Page 18 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 stated the PERT is the wave of the future and regardless of who is paying for it, there will be grant funding out there. Chair Burt noted the high performance of electric vehicles. He fully supported the addition of traffic enforcement. He asked if the fire training location was due to Stanford pulling out of that location or was contingency planning. Chief Blackshire stated the training location was contingency planning. There are no current plans to relocate but other departments have been moved out of that building. The training tower is also in terrible shape and not fully functional. There was discussion about the removal of eucalyptus trees and engaging in conversation with all parties involved. MOTION: Council Member Stone moved, seconded by Council Member Lythcott-Haims, to tentatively approve the Public Safety budget proposal and add to the parking lot the following: • Fire Utility Task Vehicle • Increase Public Safety dispatcher staffing MOTION PASSED: 3-0 Budget Manager Harper presented the update on the budget process and the items in the parking lot. There was further discussion about this. COUNCIL MEMBER QUESTIONS, COMMENTS AND ANNOUNCEMENTS Chair Burt clarified the date and time for the upcoming meeting, which is scheduled from 9:00 A.M. to 5:00 P.M. on June 9, 2023. ADJOURNMENT: The meeting was adjourned at 3:50 P.M. ATTEST: APPROVED: ____________________ ____________________ City Clerk Mayor SUMMARY MINUTES Page 19 of 19 (Sp.) Finance Committee Meeting Summary Minutes: 5/5/2023 NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC) 2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section 2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.