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HomeMy WebLinkAboutStaff Report 11245 City of Palo Alto (ID # 11245) Policy and Services Committee Staff Report Report Type: Action Items Meeting Date: 6/9/2020 City of Palo Alto Page 1 Summary Title: Parking Funds Audit Status Update Title: Staff Recommends the Policy and Services Committee Recommend the City Council Accept the Status Update on the Audit of Parking Funds (Continued From March 17, 2020) From: City Manager Lead Department: Planning and Development Services Recommended Motion Staff recommends that the Policy and Services Committee recommend that the City Council accept the attached Status of Audit Recommendations regarding the Audit of Parking Funds. Background In December 2015, the City Auditor’s Office issued an audit of parking funds (https://www.cityofpaloalto.org/civicax/filebank/documents/51373). The purpose of the audit was to determine if the City’s parking in‐lieu and parking permit fees are collected, accounted for, and used in accordance with applicable laws, regulations, policies, and governing documents. Staff members from Planning and Development Services, Administrative Services, Public Works, the City Attorney’s Office, Police, and Community Services have jointly worked to address the recommendations. To ensure the continuity of improvements, a workgroup was formed consisting of staff from these departments. This group meets at least quarterly to address roles and responsibilities for budgeting and parking fund management. Staff reported on audit status to the Policy and Services Committee in November 2017 and again in June 2018. In the June update report, only one item was awaiting completion. Discussion The workgroup continued to pursue the remaining recommendation (recommendation 1.5): creating a Protocol covering the necessary procedures to ensure appropriations, City of Palo Alto Page 2 funding sources, and capital expenses are accurately and completely tracked during the life of each new parking garage CIP project. More detail can be found in Attachment A. This completes staff action to address all audit recommendations, and City Council approval of this report will close out follow-up on this audit. Attachments: • Attachment A: Audit status update February 2020 table attachment • Attachment B: Parking In-Lieu Fee Reset Calculation Template • Attachment C: Parking In-Lieu Fee Process STATUS OF AUDIT RECOMMENDATIONS AUDIT OF PARKING FUNDS – ISSUED 12/15/15 PAGE 1 The City Manager has reviewed and provided the following responses to the audit recommendations in this report. The City Manager will report progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been addressed. Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date Finding 1: The City does not have policies and procedures to ensure that it accurately calculates and assesses parking in-lieu fees and tracks expenditures related to construction of public parking spaces. 1.5 After updating the Municipal Code, PCE, ASD, and Public Works work together to develop written policies and procedures to: • Clarify roles and responsibilities for applying the Municipal Code requirements and monitoring compliance. • Ensure that the parking in-lieu fee is calculated, collected, and reported accurately, consistently, and timely. • Ensure that appropriations, funding sources, actual revenues, and capital expenditures are accurately and completely tracked during the life of each CIP project. • Verify final project costs for accuracy, close out the project, and release unused project funds upon completion of the project. • Ensure that complete records related to the costs of planning and constructing a garage(s) are retained for the entire period for which they serve as the basis for calculating the parking in-lieu fee. Planning and Community Environment, Administrative Services, Public Works, City Clerk Concurrence: Partially agree Target Date: 2016 Action Plan: Staff concurs that enhanced coordination and communication should occur among PCE, PW, and ASD regarding the parking in-lieu fee. However, rather than creating detailed procedures, staff recommends prioritizing the code amendments referenced above and developing a simple, high level protocol that briefly outlines the steps and responsibilities for calculating and charging the parking in-lieu fee. • The PCE impact fee and in-lieu fee project mentioned above will ensure consistent and timely fee calculation. Accela will flag the need for fee payment before permit signoff. • Ensuring that appropriations, funding sources, actual revenues, and capital expenditures are accurately and completely tracked during the life of each CIP project is the goal of every department. • A process for verifying final project Complete February 2020 Management Update: As of the last update, staff was working on completing a protocol for collecting, documenting, and verifying final garage costs and establishing the roles and responsibilities for calculating and charging the parking-in-lieu fee. This protocol has now been completed and is attached. Additionally, staff has revised its reporting methodology for retention of development impact fees and the Parking Workgroup, consisting of Office of Transportation, PWD, ASD, CSD, and PD continues to meet. Completion Date: March, 2019 June 2018 Management Update: The remaining piece of this recommendation that was not completed as of the last update was the process for establishing the protocols for collecting, documenting, and verifying final garage costs. As an outcome of the audit, a workgroup consisting of PCE, PWD, ASD, CSD, and PD was formed and meets regularly. Led by PCE, this workgroup meets quarterly to coordinate budgeting and to discuss the status of parking funds, opportunities for streamlining, STATUS OF AUDIT RECOMMENDATIONS AUDIT OF PARKING FUNDS – ISSUED 12/15/15 PAGE 2 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date Communicate and train staff on the policies and procedures. costs and identification of the responsible department will be included in the high level protocol mentioned above. • The goal of retaining complete records related to the costs of planning and constructing garages will require a clarification in the City’s Records Retention Policy. The Policy does not clearly identify the need to retain these records in perpetuity nor does it identify the responsible department. The responsible departments will raise this issue with the City Clerk’s office. and program progress. PWD has taken the lead in ensuring that all relevant data is being collected for the Downtown Parking Garage project. The workgroup has begun crafting a simple high-level protocol for collecting, documenting, and verifying final project costs concurrent with the design, construction, and closing of the new Downtown Parking Garage CIP project, and for using the garage parking space inventory and cost information to calculate the revised parking-in-lieu fee, consistent with the Municipal Code. With the workgroup now firmly established and meeting regularly, this recommendation should soon be completed. Expected Completion Date: Fall 2018 October 2017 Management Update: • PCE’s project to program impact fees into Accela (permitting system), is now complete and operational. The steps and responsibilities for calculating and charging the parking in-lieu fee are covered in the new procedures written by staff for impact fee assessment and collection via Accela. Accela programming includes a block to the issuance of a building permit until impact fees have been paid. • The new Downtown Parking Garage design is now underway and staff is considering the necessary procedures to ensure appropriations, funding sources, and capital expenses are accurately and completely STATUS OF AUDIT RECOMMENDATIONS AUDIT OF PARKING FUNDS – ISSUED 12/15/15 PAGE 3 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date tracked during the life of each new parking garage CIP project. • A workgroup consisting of PCE, PWD, ASD, CSD, and PD has been formed and meets quarterly to discuss the parking funds and coordinate budgeting. A subgroup of appropriate departments will craft a simple high-level protocol for collecting, documenting, and verifying final project costs concurrent with the design, construction, and closing of the new Downtown Parking Garage CIP project, and for using the garage parking space inventory and cost information to calculate the revised parking-in-lieu fee, consistent with the Municipal Code. • Staff is working with the City Clerk’s office to identify and update areas of the Records Retention Schedule which require updating to ensure total costs for garage construction are retained for at least the period of time for which they serve as the basis for calculating the parking in-lieu fee. Expected Completion Date: Winter 2020 (the expected completion date of the New Downtown Parking Garage) Expense Type Expense Description Amount Notes DESIGN & SOFT COSTS Permits, Fees, Utilities Plan Check/ Permit Fees Utility Fees Relocation, connection etc should all be included. Relocation may be included in the construction  cost, do not double count. Title Reports Easement Costs To include related attorney fees. Land Acquisition Other Must specify ‐ all CIP costs should be accounted for. Architect & Engineer Architect Architect Reimbursables Architect Add Services Budget Civil Engineering Services Structural Engineering Services Mechanical/Plumbing/Electric Architect Add Services Fee Other Must specify ‐ all CIP costs should be accounted for. Other Consultants Geotechnical Engineering Geological Testing Feasibility Study Site Assessment  Survey and Parcel Map  Archeologist Traffic Consultant Project Management Preconstruction C‐3 Stormwater Management Arborist Construction Management Construction Management Add Services Photo Documentation Commissioning Agent Acoustical Study City Staff Time City of Palo Alto staff salary actuals to date recorded in the CIP plus projected costs Other Must specify ‐ all CIP costs should be accounted for. Insurance & Bonds Builders Risk and OCIP Bonds Bond Issuance/ Financing Any legal fees and outside counsel required. Other Must specify ‐ all CIP costs should be accounted for. Testing & Inspection Geotechnical Inspections Geotechnical Inspections Add Services  Special Inspections Special Inspections Add Services Waterproofing Inspections Misc. Sewer / Existing Utility Other Must specify ‐ all CIP costs should be accounted for. Expense Type Expense Description Amount Notes Subtotal ‐$            SOFT COST TOTAL ‐$            CONSTRUCTION HARD COSTS Demolition Construction Other Must specify ‐ all CIP costs should be accounted for. Subtotal ‐$            Construction/Owner Contingency ‐$            CONSTRUCTION HARD COST TOTAL ‐$            ADMINISTRATIVE COSTS & EXPENSES Marketing & Operating Advertising & Printing Community Events Reimbursables Blueprinting/FedEx/Etc. Reimbursables Travel, meeting, and any other project associated reimbursable cost. Miscellaneous Expenses Parking Mitigation & Temporary Parking  Measures Model/Trailer/Office Temporary Services Must specify ‐ all CIP costs should be accounted for. Other Must specify ‐ all CIP costs should be accounted for. EXPENSES TOTAL ‐$            PROJECT TOTAL ‐$             SPECIAL FACTORS These are factors that need to be backed out of the Project Total for various reasons. Retail Space If retail space is added to the project scope the cost associated with building that space should  NOT go into the calculation of the fee. Tenant Improvements Solar Installation Other Must specify ‐ all CIP costs should be accounted for. Consult with Attorney's Office. SPECIAL FACTORS TOTAL ‐$            NET NEW SPACES ADDED CALC Total Number of Spaces in New Garage Motorcylce spaces should be included here based on the actual number of regular spaces they  occupy (e.g. there are 10 motorcycle spaces occupying 2 full size spaces then count as 2 spaces) . New Garage Number of Retail or Other  Designated Use Spaces Original Lot/Garage Number of Spaces TOTAL NET NEW SPACES 0 NEW IN‐LIEU FEE Project Total / Total Net New Spaces Parking In-Lieu Fee Reset Process & Procedure • Upon awarding a new construction contract for a parking facility, the in-lieu parking fee will be recalculated by the department managing the construction project (the “managing department”) using the criteria in Palo Alto Municipal Code Section 16.57.030. • The managing department will take an ordinance to Council amending the Municipal Fee Schedule to amend the in-lieu parking fee. The ordinance amendment will be taken to Council at the same time as the construction contract award or as soon as possible thereafter, no later than 30 days after final execution of the construction contract. The ordinance requires two readings and becomes effective on the 31st day after final adoption (second reading). • Upon adoption of the new fee the ordinance shall be distributed to applicable Planning and Development Services (PDS) Staff to ensure the new fee is used. • The steps for calculating the fee prior to construction include analyzing the actual design costs, bond financing costs (if applicable), land acquisition costs (if applicable), administrative costs (including staff salaries and benefits), expected/projected construction costs based on the construction contract award, and total parking spaces, accounting for various project specific variances and circumstances. (See PAMC Section 16.57.030, subsection (b)(i).) • All costs associated with the new construction should be realized in the CIP project in the ERP system, as should all appropriations and funding sources. • When construction is complete and during project close out, the managing department will again recalculate the fee based on actual expenditures, costs, parking spaces, and other relevant factors. (See PAMC Section 16.57.030, subsection (b)(ii).) • The managing department will take to Council an ordinance amending the Municipal Fee Schedule to update the in-lieu parking fee. The ordinance amendment will be taken to Council as soon as practicable after the final payment is made towards the project, but no later than 60 days after final payment is issued. (Final payment may come later than construction contract closeout, as issues such as LEED certification continue beyond construction.) • The fee will be adjusted annually for inflation and collected by the Planning and Development Services Department (PDS)), who manages the fee on an ongoing basis. (See PAMC 16.34.110). • Managing department staff will communicate and train staff on this protocol to ensure implementation and ongoing compliance. • Consistent with the records retention schedule, the managing department will ensure complete records are kept pertaining to project costs for the entire period for which they serve as the basis for calculating the parking in-lieu fee. • The attached worksheet details the process for calculating the fee, both pre- construction and post-construction, based on all applicable costs and factors set forth in the Municipal Code.