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HomeMy WebLinkAbout2011-02-07 Ordinance 5114ORDINANCE NO. 5114 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AUTHORIZING CLOSING OF THE BUDGET FOR THE FISCAL YEAR ENDING JUNE 30, 2010 The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto and as set forth in Section 2.28.070 of the Palo Al to Municipal Code, the Council on June 15, 2009 did adopt a budget for fiscal year 2010; and B. Fiscal year 2010 has ended and the financial results, although subject to post-audit adjustment, are now available and are herewith reported in summarized financial Exhibi ts "A", "B", "C", "D", the Director , Administrative hereto, and by reference made \ "E", "F", and "G" prepared by Services, which are attached a part hereof. SECTION 2. Pursuant to Section 2.28.080 of the Palo Alto Municipal Code, the City Manager during fiscal year 2010 did amend the budgetary accounts of the City of Palo Alto to reflect: A. Additional appropriations authorized by ordinance of the City Council. B. Amendments to employee compensation plans adopted by the City Council. C. Transfers of appropriations from the contingent account as authorized by the City Manager. D. Redistribution of appropriations between divisions, cost centers, and objects within various departments as authorized by the City Manager. E. Fiscal Year 2010 appropriations which on July 1, 2009 were encumbered by properly executed, but uncompleted, Page 1 of 5 purchase orders or contracts. SECTION 3. The Council hereby approves adjustments to the fiscal year 2010 budget for Fund Balancing Entries as shown on attached Exhibit "A". SECTION 4. The Council hereby re-appropriates fiscal year 2010 appropriations in certain departments and categories, as shown on the attached Exhibit "B", which were not encumbered by purchase order or contract, at year end into the fiscal year 2011 budget. SECTION 5. The fiscal year 2010 encumbered balances for the departments and categories shown on Exhibit "D" shall be carried forward and re-appropriated to those same departments and categories in the fiscal year 2011 budget. SECTION 6. directed: The City Manager is authorized and A. To close the fiscal year 2010 budget accounts in all funds and departments and, of. the City of Palo Alto, to transfers in the 2010 budget ordinance of the Council; and as required by the Charter make such interdepartmental as adopted or amended by B. To close various completed Capital Improvement Projects (CIP) as shown in Exhibit "C" and move all completed CIP to their respective reserve funds indicated in Exhibit "Gil; and C. To establish reserves as shown in Exhibi ts "E", "F" and "Gil for all Funds as necessary to provide for: (1) A reserve for encumbrances and re- appropriations in the various funds, the purpose of which is to carry forward into the fiscal year 2011 budget and continue, in effect, the unexpended balance of appropriations for fiscal year 2010 departmental expenditures as shown in Exhibits "E" and "F"; and (2 ) Reserves for Advances to Stores Inventory, and other accordance with ordinance Page 2 of 5 Other Funds, reserves in and policy transaction will change the College Terrace Parking Permit Fund to $51,694. SECTION 13. The Local Law Enforcement Block Grant Fund is hereby decreased by Fifty Two Thousand Seven Hundred TWenty Eight Dollars ($52,728) as described in Exhibit "A". This transaction will change the Local Law Enforcement Block Grant Fund Balance to $180,213. SECTION 14. The Recovery Act JAG Fund is hereby decreased by Eight Thousand Eight Hundred Twenty Dollars ($8,820) as described in Exhibit "A". This transaction will change the Recovery Act JAG Fund Balance to $15,650. SECTION 15. The Capital Project Fund is hereby increased by the sum of Nine Hundred Ninety Two Thousand Five Hundred Forty Two Dollars ($992,542) as described in Exhibit "A". This transaction will increase the Infrastructure Reserve Balance to $8,648,354. SECTION 16. The Electric Distribution Rate Stabilization Reserve is hereby increased by the sum of One Million Four Hundred Seventy Eight Thousand Eleven Dollars ($1,478,011) as described in Exhibit "A". This transaction will change the Electric Distribution Rate Stabilization Reserve to $9,484,000. SECTION 17. The Gas Distribution Rate Stabilization Reserve is hereby increased by the sum of Forty Four Thousand Six Hundred Twenty Dollars ($44,620) as described in Exhibit "A". This transaction will change the Gas Distribution Rate Stabilization Reserve to $6,209,000. SECTION 18. The Water Rate Stabilization Reserve is hereby increased by the sum of Twenty Four Thousand Seven Hundred Six Dollars ($24,706) as described in Exhibit "A". This transaction will change the Water Rate Stabilization Reserve to $17,036,000. SECTION 19. The Refuse Rate Stabilization Reserve is hereby increased by the sum of One Hundred Seventy Eight Thousand Seven Hundred Seventy Dollars ($178,770) as described in Exhibit "A". This transaction will change the Refuse Rate Stabilization Reserve to negative $4,935,000. SECTION 20. Upon completion of the independent audit, detailed financial statements reflecting the changes made Page 4 of 5 $ COMMENTSIREASONS AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS Admlnistratll'e Serf'ices $50,000 Special Studies This reapproprladon is being requested for the Reeoollnended $50,000. There is tundinS of specht' studies that arise related to sufficient bitlance In the Fiscal,vear the. Slanford Bxpansion, Palo Alto Airport, 2010 budgephat can be Cable. Franchising, or other projects as reappropriated. necessary. The. budget for contract services in PV2011 is entirely comprised of funding for lipeeifte identified Contracts, le.aving no room for unanticipated contracts. This reappropriation allows for funding for . assistanee on spechd projects related to the City's finances. Utilities Dep.rtment-Electric Fund 52,000,000 Electric Efficiency This reappropriation is being requested to fund Reeommended $Z,ooo,ooo. There is Financing Program an electric: efficiency financing program for sufficient balance in Ihe Piscal Yoar nonresidential customers through a third plU't)' 2010 budgett"at can be contractor. On December 7, 2009, Council reappropriated. approved using up to $2,000,000 from the Calaveras Reserve to develop thiS four-yoar pilot program (CMR 430:09). It was Council's intent lIntl; these funds be used for II four-year program and rolled over throughout tile length of tile progrmn. The contracL is expected to be signed by June 30, 2010. The program will begin in Fall 2010. 5459,700 Customer rebates for This reappropriation is being nsql.losted to fund Recommended $459,700. There is energy efficiency ~ustomer rebates for comp lotion of energy sufficient balance in the Fiscal YB8r projects efficiency projects. A very large number of 20 10 budget that can be energy efficiency projects are either committed reappropriated. or projected to be completed. whO" only it small pen:entage of projects have been completed 10 date. Actual pfl)'lDent ofrebates will occur as the projects Bre completed in PV lOT l. 1'1.e energy effic.iency projecls support Council" environmental suslainability objectives. Page 2 of4 12/14fl010 $ CO,.EN11IREASONS AMOUNT INTENDED USE FOR NOT COMPLETING IN FY2010 STATUS $300,000 Catomer rebates Cor 'fhts reappropriBdoh I:; being ~ to fund ReeG ..... ded $3OO,GOO. TIleR is sol ... e1ectrie C\lstomer r.te. for tile installation of lufficient "(anec in tho Fiscal Year (photovOlqjc) systems phoklvoltale systems. SB I requires California 2010 budgc.lt that C*1 b. eleetri~ "Utilities to of'for inc.ntives for solar reqpproprialld. . eledri~ 9)'8teml installed on customer ftwilitjes after lanuary I, 2007. DeeMso there is uncertainty In knowing when a customer will complete the solar installation. it is diffieult to match the rebate payments to each year', , program budget. Tho ruason Cor this , , , reappropriation request is to oarry forward , , > , , t\mds from FY 2010 to Py 201 J to help cover , , , , ahe large amount ofpendin,g rebates. Baoh)'tar ! SI,300,OOO is budseted for this pro,giam .. Between JanUDry 1.2007 andMa)' 19.2010. over $3.600.000 in rebo .... been paid. The- program bu reserved an additional $2,700,000 for p\;ading appHeotions. VI/Ulles Departmellt-WlItBr funil $541000 Customer robate Thil reappropriation is beln, requested for tbe aecommended $54.000. Thero is program for customer rebate procram for water/energy sufficient balanco in the Ftscal Year water/energy reduction reduction projects. The Santa Clara Valley 2010 budget that caD be projects Water DiBtrlct (SCVWO) cumnU)' otTers reappropriated. rebates for innovative water/energy reduction projects through the ."isUng Water Efficiency Technology proaram, The goal of the progrwn is to encourage individuals to implement innovative projects that will result in cost.- ef&ctlve waterlOllergy savinp. This reapprorpJ'iation is being requeated (.0 "'paRd the program In Palo Alto in coordination with SCVWD. Public Works Department--Storm Dl'tlintlg« FIuItl 1629,711 Storm Dr8in lnnovllive Tid. reappropriatlon is bcSng requested tor 'Reeoallleaded $6l9,1t8. There is Improvement& Innovatlve aIono drain Improvements. These sufficient b6fance in lhe Fiscal Yell' l11nds must be reappropriated beeauso they 20] 0 budset that am be have been specifICally eannorbd for reappropriated. innovative storm drain Improvements per the 200S Storm Drainage ballot measure approved by the Palo A Ito property owners. The" ftmds have been budgeted for a stormwater rebate .program lhatoffm incentives to residents and bosinosses to reduce stotrnwater runolf. However,1he rebate program bas not aenented sufficient demand to spend the {bnds. Staff plas to utilizethu unused funds hi FV 2011 for an innovative IIOnn drain Improvemont project bl the Southpte nelpborhood. Page 3 of4 12114/20]0 Slegs"l Fund FD-09001 PD·03003 PD-04010 PD-04011 Po.o5010 PD-93012 PE-05002 PE-8S030 PL-0200S PL-07000 PL-07003 Iili!dllcFUnd EL-05001 EL.()3001* e~·0300S- EL.Q3013* EL-05003* Ga. Fund GS·07000· Water Fund WS-01010· WS.(J10141t Ref"" Fund . RF-oBOO2* ExnmITC City 0/ Palo Alto CAPITAL IMPROVEMENT PROGRAM PROJECTS Compllltfld tIIId aosed ,,, Ff 1fJlfJ FiAt Apparatua Equipment Replacement Additional Fire Frequency Fire POItable Radio Replacement Civic Center Parking Securily Upgrade Police Vehh;le Mounted Video Recording Are CommunicatIons Computer System Main LIbrary Reconfiguraiion Downtown Garage Parking Structure EI Camino I Venlura Traffle Signal Downtown NorCh Tramc Circle HardBcspe Cal T18ln Slatlon Connectivity Improvements Colorado Sw Station 116Kv Underground District 39 Underground District 41 UtilJU81 Eatimatlng Syetem Relocation· Alma Substation Elwell Court Tenant Improvement. Rnervoir Booster Station Reservoir Pump Slatton Byxbae Park Gas System Upgrade • Projects are c10Ied. No expenditural were incurred In Ihe currenl1i8ca1 year. Page 1 of1 724 418 3,931 1,644 11,001 60,000 30,000 Total 107,711 1,143,983 54,987 261,880 1&,Q9.iI 2,061 Total $1,478.011 44.620 Total $44,821 24.644 62 Tatal $24,708 61,749 Total $11.748 12/1412010 Mr. Perez clarified that if there was a negative impact they would have to draw money from the other funds and fix the gap. Ms. Eikenberry discussed the General Fund. She stated the balance for the General Fund ended at a net loss of $1.8 million ending with a fund balance of $41.4 million. The Budget Stabilization reserve was impacted by the loss but it still increased $2.6 million because the other reserves did not require as much funding. The percentage for the Budge Stabilization Reserve was 19.7 % of Fiscal Year 2011 (FY11) expenditures and operating transfers and was within the Council guidelines. Mr. Ramberg said the encumbrance amount was carried forward to satisfy commitments in 2011. Ms. Eikenberry said the CIP Fund ended the year with $25.9 million in expenditures including operating transfers out of 3.9 million. The fund balance ended the year at $83.8 million an increase of $47 million over the previous year because of Library Bonds. The CIP Fund commitments were $21.1 million. She spoke about five years of expenditures in all major categories for CIP projects. The Enterprise Funds ended on a positive note with a gain as well as a positive RSR. She said the Wastewater Treatment Fund had a negative RSR of $12.4 million. She said the Refuse Fund ended the year with a negative $4.9 million in RSR. It had a cash balance of $8 million which was sufficient to fund the state mandated funding for the closure. She said that a post closure liability of $5.1 million was from future revenues and did not have to be in the fund at this time. It did have to be budgeted for going forward. The BSR should be structured so that revenues exceed expenditures, which had not happened in recent years. The RSR was a combination of gains and losses along with other commitments. She discussed a graph of the major enterprise funds and all were within the minimum and maximum amounts except the wastewater treatment and refuse funds. Council Member Klein said that he did not see the sales tax revenue comment supported by the chart on page five of the Staff Report. Mr. Perez said it would be in the fees and permits information. Council Member Klein said the community should understand where the reductions were and the report should be made clearer. FILENAME 2 Mr. Perez said they may provide a table that shows that information on the next report. Council member Klein said regarding the Retiree Medical Trust Fund he didn't understand the liability per January with direct contributions to Cal Pers. Ms. Eikenberry said there were two ways to pay one was direct and one goes into the trust fund both reduce the liability .. Council Member Klein said he was concerned they were double counting. It seemed the contributions made in August 2010 would have included the 5.5 million in contributions. Ms. Eikenberry said that even though the trust was at CalPers it was separate from making payments directly to Cal Pers. The trust was just for current employees not for current retirees. Mr. Perez said that was what the $5.5 million was only for current retirees. Ms. Eikenberry said the next valuation would use a January 1st date and would be brought forward in April and the liability would be high again. Mr. Perez said they had to be concerned about this number. The cost factors for the increases of the health care were different. The trust fund and assets were different from the pension fund. Vice Mayor Espinosa asked about future updates. Mr. Perez said they currently bring the updates to the Finance Committee quarterly by policy. The mid year report would be in March. Adjustments were usually made to revenues at that pOint versus on the first quarter report. They would also request any increases in the budget expenditures. ' Vice Mayor Espinosa said he wanted to know what would be coming in the first half of the year that might be adjustment surprises. Mr. Perez said Staff recommended budgets for Staff overtime to be kept at the same levels, and that could be an issue. If they felt it was trending differently than budget they would report it; He talked about various revenues including positive trends in sales tax. There were some commercial property tax concerns as well as a potential issue with the Utility Users Tax that Staff needed to analyze prior to reporting. FILENAME 3 Chair Schmid asked about the adopted and adjusted budget which indicated that the balance was achieved by a remarkable increase in revenues. The increase in revenues was particularly due to return on investment. Ms. Eikenberry said an unrealized gain they also book a reserve so that it would not add to the BSR. Chair Schmid asked if the 800 charge for services were fees that were imposed O\~er the last year. Mr. Perez said this could include the Stanford reimbursement changes. It would include paramedic fees, class programs, checking fees, and golf related fees. He said this was changed due to IT and the Fire Departments share. Chair Schmid asked about reserve balances and about some investments that were allotted for. Council member Klein said he thought they zeroed out the reserve. Ms. Eikenberry said the equity transfer stabilization was zeroed out. Council Member Klein said that unrealized gain could not increase as a result of the equity stability being zeroed out. Ms. Eikenberry said that any change would impact the BSR the there was only a set fund balance. Council Member Klein so it did increase it. Ms. Eikenberry said it decreased due to the unrealized gain that went up. Reappropriations dropped by almost $2 million. Council member Klein asked for clarification. Ms. Eikenberry pOinted to the chart on page four of the slides. She said that the reserves except Budget Stabilization were a specific number and were funded first. Any difference goes into the Budget Stabilization. Council Member Klein asked about the automatic procedure if it grew over 20%. FILENAME 4 Mr. Perez said the excess goes to the Infrastructure Reserve Fund. If it happened it would happen at the end of the fiscal year. Chair Schmid commented on the Library Bond proceeds reporting. Mr. Perez said Staff was following the Motion made by the Finance Committee. Chair Schmid said the Utility Fund seemed to be very successful at generating substantial profits. He suggested reserves should not be built when the rates were 300/0 higher than other companies. Mr. Perez suggested Staff should bring the audited information that demonstrates the reserves that were needed. They did need to be reviewed with the Committee to determine if the minimum and maximums were still what was needed. Chair Schmid asked where the total reserves were. Mr. Ramberg said they were listed on a different part of the CAFR. Ms. Eikenberry clarified they were unrestricted reserves. MOTION: Council Member Espinosa moved, seconded by Council Member Scharff that the Finance Committee recommends to the City Council approval of the CAFR as stated in the staff report. MOTION PASSED 4-0. FILENAME 5