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HomeMy WebLinkAbout1994-09-26 City Council Summary Minutes Regular Meeting September 26, 1994 1. Traffic Safety Study Session .......................... 73-410 ORAL COMMUNICATIONS ........................................ 73-412 APPROVAL OF MINUTES OF AUGUST 1, 1994 ...................... 73-412 1. Agreement between the City of Palo Alto and Santa Clara County for Social Worker Services ..................... 73-412 2. Conference with Two Labor Negotiators ................. 73-412 2A. Conference with Labor Negotiator ...................... 73-413 3. Policy and Services Committee Recommendation re Approval of the City Manager and City Clerk Recommendation that a Public Information Function be Added to Each Office .................................. 73-413 4. City Manager's Response to Hughes, Heiss Organizational Review ................................................ 73-418 5. Council Comments, Questions, and Announcements ........ 73-438 ADJOURNMENT: The meeting adjourned at 11:10 p.m. to a Closed Session ............................................... 73-438 FINAL ADJOURNMENT: The meeting adjourned at 11:55 p.m. .... 73-438 09/26/94 73-409 Special Meeting September 26, 1994 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:00 p.m. PRESENT: Andersen, Fazzino, Huber, Kniss, McCown (arrived at 7:15 p.m.) Rosenbaum, Schneider, Wheeler ABSENT: Simitian SPECIAL MEETINGS 1. Traffic Safety Study Session ORAL COMMUNICATIONS Cathie Lehrberg, 1085 University Avenue, spoke regarding the traffic safety study. Barbara Bowden, 2001 Middlefield Road, spoke regarding the traffic safety study. Jan Glaze, 893 Embarcadero Road, spoke regarding the traffic safety study. Yoriko Kishimoto, 251 Embarcadero Road, spoke regarding the traffic safety study. Horace Anderson, 1087 Embarcadero Road, spoke regarding the traffic safety study. Bill Peterson, 228 Fulton Street, spoke regarding the traffic safety study. Jeff Brown, 1216 Webster Street, spoke regarding the traffic safety study. Harlan Pinto, 1845 University Avenue, spoke regarding the traffic safety study. SYNOPSIS OF TRAFFIC SAFETY STUDY SESSION City Manager June Fleming stated that staff had gathered a considerable amount of information concerning traffic safety issues from internal reports as well as from public input. The report and discussion was the first phase of a two-phase approach. The information was divided into six major topical areas: speed, traffic volume, accidents, school commute, commercial vehicles, and CalTrain grade crossings. Police Chief Chris Durkin and Assistant Police Chief Lynne Johnson began the presentation of the report and gave an overview of the complexity of the traffic safety topic. Chief Transportation Official Marvin Overway, City Traffic 09/26/94 73-410 Engineer Ashok Aggarwal, Lieutenant Jon Hernandez, and Sergeant Brad Zook presented overviews of the topical areas. Council Members had questions about the report and focused most of the discussion on speed related issues. Several Council Members noted that the number of speed related citations had decreased over the last three years, and the number of speeding vehicle complaints from citizens had increased. Council Members made comments on some of the options that related to controlling speeding such as increased use of the mobile radar trailer, photo radar, video technology, and the Neighborhood Speed Watch program. Ms. Fleming noted that the second phase report would include policy alternatives for Council's consideration. ADJOURNMENT: The meeting adjourned at 7:21 p.m. 09/26/94 73-411 The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:28 p.m. PRESENT: Andersen, Fazzino, Huber, Kniss, McCown, Rosenbaum, Schneider, Simitian, Wheeler ORAL COMMUNICATIONS Margaret Ash, 446 Forest Avenue No. 6, spoke regarding the Aggressive Panhandling Ad Hoc Task Force. Jim Dinkey, 3380 Cork Oak Way, spoke regarding the ramp metering report (letter on file in the City Clerk's Office). Mary Carey Schaefer, 742 Desoto Drive, spoke regarding loud noise from a concert at Shoreline Amphitheatre the previous evening. Herb Borock, 2731 Byron Street, spoke regarding traffic safety. APPROVAL OF MINUTES OF AUGUST 1, 1994 Mayor Kniss announced that the City Clerk removed the Minutes of August 8, 1994. MOTION: Council Member Wheeler moved, seconded by Rosenbaum, to approve the Minutes of August 1, 1994, as submitted. MOTION PASSED 7-0-2, Andersen, Simitian abstaining. CONSENT CALENDAR MOTION: Council Member Wheeler moved, seconded by Fazzino, to approve Consent Calendar Item No. 1. 1. Agreement between the City of Palo Alto and Santa Clara County for Social Worker Services MOTION PASSED 9-0. CLOSED SESSION The item may occur during the recess or after the Regular Meeting. 2. Conference with Two Labor Negotiators Pursuant to Government Code ∋54957.6 Employee Organization: Palo Alto Peace Officers Association (PAPOA) Agency Negotiator: City Manager and her designees pursuant to the Merit System Rules and Regulations (Jay Rounds, Susan Ryerson, Linda Craig, Lynne Johnson, Jon Hernandez, Tom Merson) Employee Organization: International Association of Fire-fighters (IAFF), Local 1319 09/26/94 73-412 Agency Negotiator: City Manager and her designees pursuant to the Merit System Rules and Regulations (Jay Rounds, Susan Ryerson, Lalo Perez, Jim McGee) Public Comment None. 2A. Conference with Labor Negotiator Agency Negotiator: City Council Ad Hoc Personnel Committee (Chairperson Ron Andersen, Liz Kniss, and Dick Rosenbaum) Unrepresented Employees: City Attorney Ariel Calonne, City Manager June Fleming, City Auditor Bill Vinson, and City Clerk Gloria Young Authority: Government Code ∋54957.6 Public Comment None. REPORTS OF COMMITTEES AND COMMISSIONS 3. Policy and Services Committee Recommendation re Approval of the City Manager and City Clerk Recommendation that a Public Information Function be Added to Each Office Council Member Huber said the Policy and Services (P&S) Committee had asked that the City Manager and City Clerk decide where the cable function belonged. It was a separate recommendation, and the P&S Committee had not heard that it would be transferred to the City Clerk's Office. City Manager June Fleming said the issue was part of the larger recommendation that would be addressed in Agenda Item No. 4. They had talked with various committee members after the meeting and had looked at the issue internally. It was a function that could be performed in either office. If the function were moved to the City Clerk's Office, it would provide some consistency for the Council which was not presently available, i.e., it would put all of the media that the Council used to communicate with its constituents and its public in one place. The legislative pieces of the cable function were critical, and that had been reviewed with the City Clerk. She believed the transition would work. Brad Anderson, General Manager and Chief Executive Officer, Cable Co-op, 3200 Park Boulevard, said Director of Information Resources Dianah Neff and her assistant, Marcia Guy, had proven to be knowledgeable and fair. The business was a highly technical business, and Ms. Neff had stayed current on the technology and the regulation. He was impressed that City staff had kept up with a job that was constantly changing. Staff had been willing to work with Cable Co-op on handling member complaints, and he appreciated Ms. Neff's level of participation in the Cable Co-op 09/26/94 73-413 meetings. He hoped that the quality of the relationship between the City and Cable Co-op and also the quality of expertise that was enjoyed by the staff which allowed Cable Co-op to have that good relationship would be preserved. Council Member Fazzino agreed that the relationship and the service level with Cable Co-op had improved. He recently turned on Channel 16 and observed that the audio was poor, and he asked whether the problem was Cable Co-op's or the City's responsibili-ty. Mr. Anderson said the responsibility depended on the nature of the problem. City Attorney Ariel Calonne said his office depended on the legislative analysis that the function provided. He had discussed the issue with the City Clerk, and she fully intended to continue that function. It was a large function, and it was the first line of defense in following what went on in a dynamic and political industry. Ann Niehaus, 943 Lee Drive, Menlo Park, Associate Director of Mid-Peninsula Access Corporation, was responsible for the operation of the cable booth at City Hall and had a great respect for the equipment in the room. It would not be simple to turn the operation over to someone new, and she cautioned that it was a very complex, technical operation and needed someone who could deal with that on an ongoing basis. She spoke on behalf of the Executive Director who wanted to state that Ms. Neff's expertise was clearly wider than his own on the whole range of the telecom-munications field. Ms. Neff was also an expert in the cable franchising process. There was a lot of policy-making that went on when a city developed a municipal cable channel, and Ms. Neff brought a wealth of expertise and knowledge of what was going on at other municipal channels. Mid-Peninsula Access Corporation (MPAC) was interested in producing any programming that the Council might decide to do in the future in order to better disseminate City information and further improve communications between the City government and the many constituencies it served. Bob Moss, 4010 Orme Street, Member of the Board of Directors, Cable Co-op, spoke as an individual who had known both Ms. Neff and City Clerk Gloria Young for a number of years. Both people were very capable and competent. It was a policy decision by the Council, but he did not believe moving the office and the responsibility to the City Clerk's Office would reduce the level or quality of service. He pointed out that neither Ms. Neff nor Ms. Young would be expected to repair the equipment. Council Member Rosenbaum said after reviewing the staff report (CMR:444:94) and the minutes of the P&S Committee dated August 2, 1994, he had difficulty figuring out what the City Clerk would do for the Council. He appreciated the City Manager's willingness to establish a public information activity in her office which would take care of the requirements of the all of the departments which was a useful step. It would enhance her ability to give recogni- 09/26/94 73-414 tion to employees who made significant contributions to the City and keep the public better informed. He also appreciated her willingness to reorganize her office without adding any personnel. He said the function in the City Clerk's Office would provide service to the City Council, but he did not have a clear under-standing of what that service would be. He discussed the issue with the City Clerk who said the proposal was in response to a City Council recommendation which was correct. He wanted to know what kind of service would be provided to the Council by a half-time person that the Council was not already receiving. Council Member Fazzino said the Council Members who originally developed the concept felt it was more important to have control of Channel 16 by the staff which had responsibility for public information. Ms. Neff and her staff had the expertise in the area of technology and had done a fine job, but the Council Members felt that there might be an opportunity to produce more real time information on Channel 16 if the medium were controlled by the office that was responsible for disseminating public information. It was also felt that the City Clerk reported directly to the Council; and since she had the responsibility for communicating with the public, she could be very helpful to the Council in disseminating information directly from the Mayor and the City Council. It was extremely important for the Council to have a public information activity residing in a function that had the responsibility for public information given the interest on the part of the citizens of Palo Alto to remain well informed. Since there were nine Council Members, the public information burden for the City Clerk's Office was significant. The City Clerk received a number of requests from Council Members to have information communicated to individual members of the public, and a significant number of letters were received by individual Council members from members of the public that required a reply. It was appropriate for the City Clerk to play a much more active role in assisting the Council in responding to those concerns. The mayoral position was much more demanding in the community than in many other communities because of the nature of the electorate; and the Mayor, through the State of the City Address and other initiatives, found herself/himself in the position of needing to generate a lot of information. He felt strongly that the City Clerk needed to have a well-defined role in the area of public information. Council Member Rosenbaum asked whether Council Member Fazzino believed that the City Clerk's Office should provide individual services to the Mayor and the Council but did not have enough help to do that properly. Council Member Fazzino said the City Clerk's Office did not have the resources to handle that function based on the backlog in minutes and other responsibilities of the City Clerk's Office. Council Member Rosenbaum said the City Clerk had indicated to him that the function would be initiated with a consultant in public relations. She said the job would be to communicate with the public which did not fit the suggestion that her current activi- 09/26/94 73-415 ties would be amplified in regard to serving the Council. He understood the City Clerk would hire a consultant to define what the task would be. Ms. Fleming understood that the City Clerk saw the function as a developing and evolving process. The exact future of the function was not currently defined because it involved finding and develop-ing cable opportunities to present to the public, e.g., policy decisions made by the Council and how those decisions would be carried out. Programming that was not presently being done was one aspect that would be developed. Another aspect was to explore ways in which the Council could be more communicative with the public in a nonthreatening situation, e.g., town hall meeting or City Council meeting. The City Clerk had found there were more opportunities that could be taken advantage of where the Council could have more contact or visibility with the public outside the context of the Council Chambers. The City Clerk felt a consultant would be appropriate because programming techniques and opportuni-ties needed to be explored and she could return to the Council and ask to withdraw the request if the plan did not work. The function would allow more visibility for the Council and would create new programming. Council Member McCown said the P&S Committee discussed how the function would work and how the effort to get the word out on activities would be prioritized. She recalled the City Clerk responded that the resources and priorities had to be developed. At the Committee meeting, both the City Manager and City Clerk responded that it did not matter in which department the cable function resided. The City Clerk indicated at the meeting that more time was needed to think about the pros and cons of the placement. It did not matter if the function stayed in the City Manager's Office; but the Council wanted the City Clerk to pursue new ways to communicate with the community, and she would need to focus on using the cable function. If the City Manager were promoting activities in her department, she would need to use the cable function, but someone had to have the responsibility of pushing that forward beyond the present level. The opportunities of the cable function had not been pursued extensively. The City Manager and City Clerk came back with a different selection of where the function could reside from what was discussed at the P&S Committee meeting. The answers to the questions of how it would evolve in both departments were not clear yet. Mayor Kniss said the City Clerk had looked at how other communi-ties used public communications. The consultant would enable the Council not to make a permanent commitment initially. If someone were hired on a permanent basis, it would be difficult to go in a different direction. The City Clerk was uncertain whether there was anyone in the organization who was familiar with that kind of public information interaction. Many organizations had gone to outsourcing for that function. The idea of having a public information person had been discussed for several years. The people who were currently performing that function felt it pulled from their other duties. 09/26/94 73-416 Council Member Rosenbaum asked whether the consultant contract would return to the Council for approval. He asked whether the Council was approving a 0.5 staff position in the City Clerk's Office that evening. Ms. Fleming said a consultant contract would be submitted to the Council for approval if it were over her threshold of authority of $25,000. Council Member Rosenbaum asked whether the contract would be under $25,000 and would not return to the Council. Ms. Fleming believed it would be under $25,000. Council Member Rosenbaum clarified there would be a report from the consultant, and at that point, the Council could decide whether it was a prudent way to expend the City's funds. Ms. Fleming understood that the consultant would perform the work and not prepare a report. The contract could be brought to the Council for approval if Council desired. Council Member McCown said the impression she had from the City Clerk's comments at the P&S Committee was it was a question of hiring a person inside or outside to perform the function for an initial period of time. If someone were hired from the outside, they would have the background. She understood that other than the 0.5 staff person, the City Clerk intended to use her existing budget. If the results of that assistance showed that the City Clerk's activities needed to be increased, the Council would authorize that through the budget process. For the first year, other than the 0.5 staff person, the consulting approach would be covered with the City Clerk's existing budget. Council Member Rosenbaum understood the consultant was in lieu of the 0.5 staff person. Council Member McCown recalled that it was covered within the same dollars and believed the City Clerk's plan was not to hire a 0.5 staff person as an inside employee but to use the funding for a consultant for the first year. Mayor Kniss recalled that the dollar amount was the same. Council Member Rosenbaum said the Council should look at what the City Clerk proposed and then make a decision as to whether the Council believed it was an activity that it wanted to continue for the long term. MOTION: Council Member Fazzino moved, seconded by Wheeler, to approve the City Manager and City Clerk recommendation that a public information function be added to each office. Information related to Council would be handled by the City Clerk's Office; and information related to City services, programs, etc., gener-ated from the City Manager's staff would be handled by the City Manager's Office. The staffing required to initiate the function 09/26/94 73-417 would require the addition of a 0.5 staff person in the City Clerk's Office, and the position in the City Manager's Office would be addressed as part of the City Manager's response to the Hughes, Heiss & Associates reorganization recommendations. MAKER AND SECONDER AGREED TO INCORPORATE INTO THE MOTION that the cable function would be moved to the City Clerk's Office. MOTION PASSED 9-0. REPORTS OF OFFICIALS 4. City Manager's Response to Hughes, Heiss Organizational Review City Manager June Fleming corrected page 8 of the staff report (CMR:440:94), under Community Services Department, which should include the Parks & Golf Division, and Item No. 1 should show that Hughes, Heiss & Associates (HHA) made a recommendation. On page 9, Item No. 5, the words "that leasing and" should be deleted; and the second sentence under Item No. 9 should read: "Therefore, a reduction of 4.5 positions..." On page 10, paragraph 4 should read: "However,...excluding the two business districts..." She said there was a recommendation in the Police Department regarding a dispatch position being reduced, but it was not carried through in some of the calculations. She had given considerable thought, time, and attention to her response to HHA's organizational review. Careful analysis had been done of the report. She wanted to cover several areas: 1) process, 2) the purpose of the response, 3) implementation, 4) a few points of clarification, and 5) further acknowledgments. There had been two levels of staff participation in the process. As HHA conducted its study, staff gave unselfishly of its time and skill and meticulously reviewed in writing each draft report that HHA submitted. Staff accepted a commitment to assist HHA in bringing a quality product to the Council. She was grateful and proud of the manner in which the staff had worked with the process knowing that their jobs and tasks performed would be impacted by the HHA results and the recommendations of the City Manager. After the HHA report was finalized, she worked closely and carefully with staff to bring a recommendation to the Council. All of the staff had been involved in the process, and it had been an open and participatory process. She had read every letter sent to the Council or to her office and had taken all concerns into consideration. She submitted to the Council that evening a petition from park users who were concerned about what the City would recommend to the Council and what the Council would do to preserve what many people in the community saw as jewels of the community. She had taken into consideration the discussions with staff, department heads, division heads, and community people. The Council had repeatedly over the past several months been extremely clear that it wanted complete and total information. The Council had consistently indicated to staff that it could not make good decisions if all the details were not available. She had responded to the Organizational Review based on that admonition. The information before the Council responded directly and indirectly to the 09/26/94 73-418 Organizational Review. The comprehensive response had tremendous impact on the financial information before the Council, e.g., a costly yet important related piece was the conversion of hourly employees to permanent status. If the focus of the issue were just reorganization, then the conversion issue was not related; however, in the interest of not withholding organizational pieces, she had opted to present the information to the Council rather than introduce it at budget time. The cost of the conversion was approximately $200,000, and without the conversion, the Council would have a recommendation on reorganization which would save $200,000. She could have presented a plan that did not include the need to convert some hourly positions to permanent status. The decision regarding the conversions was not part of the reorganization and would be presented to the Council at a later date, but she felt the Council needed to have the information ahead of time. She and the staff wanted to present to the Council the best quality decision about how the organization should be put together. She wanted the Council to know the most efficient, effective, and productive way to structure the organization, to provide the services to the community that was currently being provided, and how to provide those services into the future. The proposal before the Council was not the only way that the organi-zation could work. She acknowledged that there were other existing structures under which municipalities worked well. The issue was whether that would be the best for Palo Alto and whether another structure would provide the services demanded by Palo Altans. A different city with different goals, values, objectives, and needs would put together a different organizational structure. A structure had been carefully crafted that was responsive to Palo Alto. For example, there were many places in municipal government in which transportation was in a department other than the Planning Department. Staff did not believe that would work in Palo Alto. Staff had always been very careful to intertwine the relationship between general planning and general land use decisions and their relationship to trans-portation. She and staff took the assignment as a opportunity to also scrutinize everybody, to look into the future, and to put into place the pieces of the configuration that would serve the City well. She emphasized if an error were made, it was at her direction. The focus had not been to create a designated dollar savings. Council gave her no direction to reorganize the staff and save financial resources in the process. She was aware that that was always a good outcome, but it was not the primary focus of the study. The primary objective had been to recommend the best organizational structure. The Council had heard from HHA that Palo Alto was not a "fat" organization. The City had not squandered dollars on staff, and in some areas the City was under-staffed. She acknowledged the fact that the report would have been much easier for her to accept and to bring to the Council if there had been more dollars saved. She suggested the opportuni-ties could still be accomplished if it were Council's desire to have services provided in a different manner, to reduce services, or to place less emphasis in certain areas. She emphasized that the approach taken was an organizational study, not a cost-cutting study. Another controversial piece of the recommendation was the optimistic recommendation that the Council approve the report and 09/26/94 73-419 allow the staff to proceed with some inclusion in next year's budget cycle. She asked the Council to pull out any recommenda-tions that it wanted to discuss further and allow the staff to move forward with any items that could be incorporated in the 1995-96 budget. Items that required meeting and confirmation with labor unions and involved structural changes to the departments that had already established Mission Driven Budgets (MDB) would require a great deal of work. It needed to be started as soon as possible for it to be completed in time for the new MDB budget document. For the recommendations in the report that the Council wanted to discuss further, she urged the Council to have the discussions as expeditiously as possible so that decisions could be made in a time frame that would allow incorporation into the next year's budget. For recommendations involving individual positions to be added, deleted, or reclassified or converted from temporary to permanent status, there was a more liberal time frame for making those final decisions. She believed staff would be able to accommodate the Council in making final recommendations of that type as late as December 1994. However, she wanted to clarify the potential impact of delaying decisions and the structural implications for MDB beyond the end of October 1994. Constructing MDB was similar to constructing a house, and in the internal budget language, staff had programmed the new budgeting system, developed a chart of accounts, worked through MDB struc-tures with the departments, and programmed the new account structures into the accounting system. If staff were asked to make major structural changes beyond those contemplated in her report because the Council wanted to use some of the recommendations in the HHA report that she had not recommended or if the Council made new or different recommendations from those previously studied, the process would have to be started over. Some of the changes might not require drastic revisions. She would do everything possible to accommodate as many changes as possible into the 1995-96 budget. Although the budget document might not reflect the changes, staff could reassign functions from one department to another and could make other structural changes as early as Council desired while still having the next document reflect the Council's decisions. She assured the Council that she treated the assignment as an organizational review and did not understand the assignment from the Council to produce a reduction plan. She could and would do that if Council directed. She reminded the Council that there was over $1 million in General Fund reductions in the 1994-95 budget. The reductions were prioritized by the departments heads and were done to make the budget work. If the Council wanted that rather than a review of the General Fund, she would provide it to the Council. She had the list that staff worked on last year when the reductions were started so there was a beginning point, but she saw it as two different assignments. One assignment was to look at the reorganization and how it worked, and the second assignment could be to make some reductions. Some of the reductions would be painful, but it could be achieved in some cases with minor impact on services but in most cases with major impact on services. She reminded the Council that the major areas of cost savings that HHA brought to the Council fell into three areas: 1) reduction in the Fire Department rescue and truck company for a cost savings of 09/26/94 73-420 $435,000; 2) conversion of the shift schedule for staff in the Police Communications unit for a cost savings of $147,009; and 3) the elimination of the Director of Arts and Culture position. She did not recommend the savings, but it was a Council policy decision to make the reductions. She said the savings that came out of the recommendation that she presented had a total annual savings of $670,128. There were areas of additional costs which totalled $553,151. Both HHA's report and the City Manager's report had indicated areas where expenditures needed to be made. She acknowledged the people who had assisted her with finalizing the document before the Council that evening. She had reviewed every piece of the report, and it had her full endorsement. Mayor Kniss clarified if there were items the Council wished to pull out of the report, it do so that evening. The City Manager indicated that anything substantial would probably alter the budget cycle for the next year. Ms. Fleming said if the Council wanted or did not want something to happen, it needed to tell the staff if possible that evening. If the Council desired another session either with the full Council or with the standing committees, it needed to be done expeditiously so that as much as possible could be folded into the budget process. She explained staff was not trying to hold the Council's decision hostage by MDB. Finance Director Emily Harrison said the optimal time frame for having firm decisions on the structural issues would be the beginning of November 1994. The Council would then be assured that the changes would be in the budget document that the Council received in May. Simple position changes, reclassifications, additions, or deletions could be accommodated beyond that date. If major structure issues extended beyond the November 1994 time frame, there were many options available. The least attractive would be to make bottom line changes to summary financial docu-ments and not run them through the entire MDB structure which could be done. Ms. Fleming said staff did not spend time with a long implementa-tion plan because it depended on the Council's decisions. After the Council had made its decisions, staff could determine how long it would take to implement the decisions. Mayor Kniss clarified the time frame was five or six weeks unless the Council approved the entire recommendation that evening. Ms. Harrison said the MDB process had already begun, and the chart of accounts had been developed. The MDB structures had been set up with the anticipation that staff would need flexibility to make some changes, but there was a window in which to put everything together. Council Member Fazzino was troubled by the process and the suggestion that unless the Council acted that evening, the recommendations could not be incorporated into the budget. He had felt that the Council was not being given enough time to address 09/26/94 73-421 some fairly significant and profound recommendations which was far more important than a mission driven budget. The issue demanded significant study, and he was glad that the Council would have adequate time to address the issues. The budget should be a by-product of the organizational review effort, not the other way around. He was troubled by the issue of the underlying philosophy of the report and the assumption that the study should not center on the issue of cost savings. Vice Mayor Simitian and other Council Members had raised the issue of cost savings throughout the process. Ms. Fleming said that was correct. She said it had been discussed at Council meetings, and she had reviewed the minutes. There was no motion directing the City Manager to implement cost savings and reduce services; however, she tried to be aware of the fact and that was the reason she prepared the two charts that showed where strengthening was needed which would require some funding to accommodate. She knew that Vice Mayor Simitian and Council Members Fazzino and Rosenbaum had wanted a cost saving. The direction was to respond to the HHA report in terms of the organization of the staff. If the Council desired a cost saving, she would return with a cost savings plan. Council Member Fazzino recalled that Vice Mayor Simitian had a specific proposal with respect to cost savings that was rejected. He believed the philosophy of cost savings had been a paramount concern, along with the issue of efficiency. He heard some articulate statements in support of cost savings when the issue first came before the Council three years before. He was sur-prised to read on page 1 of the staff report (CMR:440:94) that cost savings was not a major emphasis of the study. Ms. Fleming acknowledged that it was not a direction from the Council and acknowledged that she heard Council Member Fazzino and other Council Members say it was a strong motivation that they wanted achieved. She also acknowledged the fact that the Council paid a consultant to tell the Council that the City was not "fat" and that there was not a lot of cost savings. She also acknowl-edged that the cost savings created by the consultant whose report she responded to were cost savings that she did not recommend. The cost savings could be done, but the City would pay a price for doing them. The Council could make a policy decision to implement the cost savings. She had grave concerns about the cost savings recommended by HHA. She did not hear a policy direction but heard the concern. Council Member Fazzino said the staff report had not shown a significant amount of justification for the proposed changes in employment status from temporary to permanent. He might agree with the City Manager's recommendation; but most organizations were moving in the other direction, and he was surprised to see that as a broad recommendation. Ms. Fleming said the Council was not being asked to act on that recommendation as part of the reorganization. It was a big dollar issue and the details and an implementation plan would be in the 09/26/94 73-422 1995-96 budget document. Council Member Fazzino asked whether the Council was being asked to support the concept that evening. Ms. Fleming could not ask the Council to support the concept without background information. Council Member Fazzino wanted to know why the Assistant City Manager would be put in charge of two disparate functions, i.e., Public Works and Community Services Departments. Ms. Fleming said there was a sound reason for every department to report to her, but she could not continue to have every department report to her and still have the time to address other issues. She said it was a personal decision based on the department's goals, objectives, and focus in the future. The matter of which department reported to her was an internal administrative decision that she could make. It did not mean that the two departments would always report to the Assistant City Manager. It appeared to her at the present time that she did not need to spend as much time on those two departments as other departments. Council Member Wheeler said the Council had had a brief time to review the staff report and had not had the opportunity to receive public and staff comment about the proposals contained in the City Manager's report. The proposals were quite different from the proposals that HHA brought to the Council. She needed some time to hear and absorb those comments before responding. She hoped her colleagues would support a slight delay before the Council made a final decision. She said numbers presented by the City Manager that evening showed a net savings but the bottom line in the report read differently. She asked for a copy of the information presented that evening. Ms. Fleming said the information presented that evening was for two different groupings of numbers. The format was different; one group of numbers was the savings that resulted, and the other was expenditures recommended. She wanted to illustrate that there was a savings but that the dollars needed to be reinvested in other places. Council Member Wheeler asked whether the numbers were different. Ms. Fleming did not believe the numbers were different, but she would check to make sure. Mayor Kniss clarified the numbers had been taken from the staff report and were replicated in a different way. Assistant City Manager Bernie Strojny said yes. The numbers were taken from the staff report and did not include the conversions which would be dealt with in the context of the next budget process. One page was an attempt to specifically segregate the savings and the other page dealt with the additional expenditures with increased service levels. 09/26/94 73-423 Mayor Kniss clarified if the Council considered the recommenda-tions in a different way, the figures presented would be the additions and subtractions that had been taken from the staff report. Mr. Strojny said that was correct. Council Member Andersen said both the City Manager's report and HHA's report indicated that there were three big ticket items where the City could save a lot of money--the Fire Department, Arts and Culture, and dispatchers. The City Manager made a strong case that it would not be good for the dispatchers, and from the point of view of the community it was not a good case for the arts and culture. There was strong support from the majority of the Council on all three of the items. He referred to the statement on page 11 of the staff report (CMR:440:94) that "those recommendations were based on assumptions which I believe would not maintain the needed safety levels for the community or staff. HHA recommended that we reduce the combined minimum daily staffing on the Rescue and Truck companies from six to four, and redeploy them as a consolidated unit." The City Manager disagreed with the recommendation as it could result in increased fire loss to the community and reduced safety for the fire fighters. He asked whether the conclusion was based on an analysis of the City's unique situation or whether it was based on a political consideration. Ms. Fleming said when she read the recommendation, she visited the fire station to look at the equipment and to understand how the City's employees would operate the equipment if the reduction had to be made. She talked to the fire fighters and the Fire Chief and was convinced that if the equipment were sent out with the staffing recommended by HHA, it would not perform the level of service or provide the safest environment for the fire fighters. Fire Chief Ruben Grijalva said the Truck and the Rescue companies performed two different functions at the scene of a structure fire. Both of the functions went on simultaneously. The Truck Company had the primary responsibility for fire fighting as well as conducting ventilation or perhaps entering the building to set up control air streams or mechanical devices for getting the smoke out of the building so fire fighters could enter the building and fight the fire. The ventilation performed by the Truck Company was an extremely important operation. It took place at the early stages of the fire. The Rescue Unit performed the rescue function as well as fire fighting. They actually physically searched the building for occupants and tried to evacuate occupants from the building in the early stages of the fire. The Fire Department had an outstanding record for keeping fire loss at a minimum in the City which was done by putting a large number of resources at the scene of the fire quickly, and the fire fighters were trained and equipped to carry out those independent functions. The truck was a large piece of equipment, and if the truck had to be put into service to effect a rescue from an upper story building or to apply a large flow of water from the basket, it required three 09/26/94 73-424 people to put the truck into service. It could not be done with two people. If the staffing were done as proposed by HHA, fire ground commanders would have to make a choice to either perform the rescue or conduct ventilation at the early stages of the fire because they would not be able to perform all the functions simultaneously. The result would be an increase in fire loss, and it would be detrimental to the safety of fire fighters. If the two units were run in tandem and were separated due to inspections or other nonemergency activities, the units would arrive at the fire scene independently of each other. At the fire scene, a decision would have to be made not to wait for additional re-sources. It would have an adverse impact on the fire fighters' safety. Council Member Rosenbaum referred to Costing of City Services on page 4 of the staff report and said the City Manager made the point that some of the savings would accrue to Stanford University and to the Utilities. He recognized that the City had a specific interest, and he wanted to know the numbers that related to the General Fund but asked whether the suggestion was that the savings were less important. Ms. Harrison said the information was provided to show the magnitude of what the actual savings would be should the HHA plan be adopted as presented. The figures were half of the amount shown in the original consultant report. Council Member Rosenbaum said HHA's savings were correct, but some of the savings would accrue to Stanford University and the Utilities. Ms. Harrison did not believe that was correct. Some of the reductions would impact the Utilities and Stanford University. The impact of some of the reductions was not necessarily the costing, but it was an attempt to show the net reduction that would be made to the General Fund if the consultant's report were implemented. Council Member Rosenbaum said the remaining money would go to Stanford University and the Utilities Department. He did not believe HHA was in error. There was no asterisk to indicate that 30 percent of the savings in the Fire Department would be savings that went to Stanford University because Stanford paid 30 percent of the fire fighting bill and in some places the Utilities Department was involved. HHA did not recognize the fact that a significant portion of the General Fund Operations was reimbursed by the City Utilities and Stanford University. The HHA was correct but not all of the savings went to the General Fund. Ms. Harrison agreed. The point in the presentation was that a dollar saved had to be $1.25 or $1.35 whenever something was reimbursed by the Utilities. There would be more severe reduc-tions if the City did not have the reimbursement sources. Council Member Rosenbaum said HHA made the recommendations with respect to the Fire Department a long time before it sent the 09/26/94 73-425 Council the final report on Phase II. He asked why the problem was not pointed out to HHA so that it could have been incorporated the General Fund numbers into the report rather than have an implication that HHA did not know what it was doing. Ms. Harrison said it was pointed out to the consultant. Council Member Rosenbaum asked whether HHA chose not to put it in the report. Ms. Harrison said in certain parts of the report, it was referred to narratively. The report mentioned that the City received revenue from Stanford University which would somewhat offset the amount of savings reported. The actual dollars were not shown. Council Member Rosenbaum believed the statement unfairly criti-cized HHA. He referred to the statement on page 5 of the staff report that "The City has a professional, dedicated staff. Recognizing that, any staffing reductions should be made through attrition rather than through layoffs." He said IBM, Digital Equipment Corporation, and Lockheed made layoffs, and he asked whether the companies were not seen as professional organiza-tions. He asked what the implication of the statement was with regard to the way a city should treat its employees. Ms. Fleming said the implication was that the City had gone through a number of budget reductions that had involved staff layoffs. Traditionally, it had been done by attrition. The City went through a process in which over 30 positions were reduced, and the massive staff reduction was accommodated through attrition or placing people in other positions elsewhere if not in the organization. She had no other company in mind. By tradition in Palo Alto, actual staff reductions in the City were dealt with by attrition. She recommended that policy be continued. Council Member Rosenbaum said it was a humanitarian way to ap-proach the problem when people with the same classification over time retired or resignations occurred. It became a more difficult policy to follow if there were only one manager. He referred to a statement under Fiscal Impact on page 14 of the staff report which implied that the staff proposal would actually save the City more money than the HHA proposal. The first paragraph mentioned that 80 percent of the HHA savings of $440,000 came from the recommen-dations with respect to the Fire Department and dispatch. The City Manager indicated disagreement with that recommendation; however, $150,000 of the savings in the City Manager's recommendation came from the same source. The City Manager proposed the reduction of three fire fighters and HHA proposed the reduction of six fire fighters. Ms. Fleming said it could be interpreted that way. Council Member Rosenbaum said the City Manager did not make a recommendation with respect to the City's trees. Ms. Fleming said there was a recommendation about trees on page 13 09/26/94 73-426 of Attachment A of the staff report. She expected the Council to deal with trees as a separate issue when it received the report from the Tree Task Force. Council Member Rosenbaum agreed, but HHA included $400,000 in additional costs to deal with the trees. HHA's net included additional expenses of $400,000 which did not appear in the City Manager's recommendation. The Council would have to deal with the trees in the future. If the Council looked at the City Manager's recommendation, it called for a net addition to spending of $200,000, which was $200,000 plus whatever the Council decided to spend on the trees in the future. Ms. Fleming said that was accurate. She felt that Council Member Rosenbaum thought the approach that was taken attacked HHA, which was not her intention. She tried to support a recommendation different from what was seen by HHA. Council Member Rosenbaum referred to Attachment A, page 7, and asked what was meant by the elimination of the Capital Improvement Project (CIP) for park tree maintenance at a savings of $85,000. Ms. Harrison said it was a one-time contractual service for tree trimming that would have moved into the Operating Budget absent the change. The increased park tree care staffing would be accommodated by the reutilization of staff. The recommendation to utilize the savings from the staff reductions in street tree trimming to increase level of park tree care took the place of the one-time funding. Council Member Rosenbaum asked whether the $85,000 was an annual savings. Ms. Harrison said it was anticipated that it would be added on a permanent basis to the Operating Budget absent the change. It was part of the $0.5 million of maintenance projects that were identified that would be moved over into the Operating Budget for the current year. RECESS: 9:20 P.M - 9:38 P.M. Sandy Strehlou, Service Employees International Union (SEIU), Local 715, 891 Marshall Street, Redwood City, said she received the City Manager's final document last week and would appreciate more time to be able to prepare the position papers on some of the recommendations. Some of the recommendations were very appropriate, but there were some areas of concern, e.g., reorga-nization and elimination of positions, that would impact service. The Council had been presented with some urgency about the response, but she requested a delay of three weeks in order to respond to the recommendations. Tony Spitaleri, President, International Association of Firefighters (IAFF), Local 1319, said the IAFF supported the City Manager's recommendation to increase the clerical staff for the Fire Chief and the support services, but it did not support it 09/26/94 73-427 based on the backs of the fire fighters. The report called for a reduction of the Rescue Unit from three to two people. It was also pointed out in the City Manager's report that she strongly disagreed with HHA's recommendation to reduce the units because the units played independent and significant roles at a fire. The IAFF could not understand why that statement was made and another statement called for a reduction for fire fighters on the units. The City had the same staffing for over 15 years in the Fire Department, but the service levels to the community had continued to grow. He pointed out that the paramedic service had improved and transportation of citizens was added. A South Bay water rescue system was instituted, and a hazardous materials system was introduced. A fire station was now maintained and kept open during the summer months which was not done previously. A reduction in the level of any unit increased injury to the fire fighters, fire loss to the community, and injuries to citizens. The Fire Department was pleased to be a service to the community but that service could only be kept up by ensuring that there was adequate staffing. Other parts of the Fire Department should not be approved on the backs of the Fire Department members and their safety. Herb Borock, 2731 Byron Street, supported the City Manager's recommendation to add an additional code enforcement officer. He said previously there were two full-time code enforcement officers at a time when there was less building activity in the City. He believed two officers were appropriate rather than 1.5 officers. The funding level shown of $64,000 was at the highest level of the pay scale. He renewed his suggestion that there should be a report back on providing cost of service in code enforcement by a fee for service. HHA never provided a recommendation on code enforcement at the Finance Committee level. He believed fee for service for code enforcement would pay for the second code enforcement officer and a portion of the existing officer. Fee for service information was easy to collect since it existed elsewhere. He urged Council to move forward with an additional code enforcement officer. Thom Newland, Palo Alto Fire Fighter, 904 South Daniel Way, San Jose, said people came to the Fire Department from other agencies because of the quality and fine reputation of the City and the Fire Department. Almost all of the fires in the City were stopped at the early stages of the fire, and the damage was often limited to one room. At a fire, the truck company went onto the roof to perform ventilation, and fire fighters went into the building to attack the fire, along with the rescue company. The rescue company's task was search and rescue. At his previous job, there was no rescue company so the fire fighters had to make a choice to either attack the fire or search for the occupants. Both jobs could not be done at the same time. He reminded the Council that Palo Alto had something very special and unusual compared to other cities. David Shum, Palo Alto Fire Fighter, 3712 Orinda Drive, San Mateo, said the agency that he worked for before staffed its fire department like the recommendation from HHA. The fire loss was 09/26/94 73-428 greater than in Palo Alto, and there were numerous fire fatalities as well. He changed fire departments because of the way the City looked after its employees, through attrition rather than layoffs, and because it was personally safer for him due to the number of people that the City put on a fire ground. Vice Mayor Simitian said the City Manager's report had two sets of issues: 1) the reorganization and 2) the budget and cost savings and increases. He personally and professionally respected the City Manager's expertise in the field and her knowledge of the organization, but he was disappointed with the staff's approach to a serious set of issues that the Council had addressed. The Council had raised some interesting issues with respect to specifics that evening, but it needed to look at the big picture. The Council, staff, Finance Committee, community, and the Blue Ribbon Task Force (BRTF) had spent three years with a consultant who was recommended by the BRTF and the Finance Committee and selected by the Council. At the end of three years, the consultant produced recommendations that said the City could conceivably save $2 million. The consultant said after the City had spent money to do some of the things that needed to be done, there would be a net savings of $800,000. In spite of the recommendation from the consultant, the City Manager's report suggested the best that could be done after three years of effort was to increase the annual expenditures by $200,000. He did not view that as an acceptable result for three years of effort. He shared the view expressed by some of his colleagues that evening that statements contained in the report about not wanting to emphasize cost savings were slightly revisionists in their perspective on Council history over the last three years. At every step of the process, he had raised the question about whether the goal of the study was to make money, to save money, or to do things more efficiently. He was reassured by Council Members, Finance Committee and staff members, and the consultant that that would be, if not the product, at least an important product of the process. He was frustrated that what he thought was a very essential element of the process had been pushed to the side. He believed the refocus should be on the issue of cost savings. Every year, the organization went through the same strenuous exercise of asking how it would all work. The answer was not complicated--either less money had to be spent or more money raised. The City had increased taxes and fees. The property transfer tax was a new tax that generated approximately $1 million to $1.5 million. Fees had been increased for virtually everything that was done in the City so the City could pay for the services it provided. Taxes and fees paid for the business the City did. He believed that 2 to 3 percent was an appropriate salary increase, but the entire burden could not be put on employees. The City had pared back the employees' health plan. The City had gone to the community and asked it to pay more; it had gone to the employees and told them they would have to take less in the way of increases. At some point, the City had to decide that, if it were not going to cut services, it had to improve its operation. There was a limit to the amount of give for people on either side of the equation. The City could not continue to ask for more money from the public and continue to ask 09/26/94 73-429 its staff to take less if it were not about the business of economizing its organization. The City had avoided real service cuts and had not put the money into infrastructure. It was that kind of political irresponsibility that had gotten the state into trouble. The City had an aging and bigger physical plant than it had five or ten years before, e.g., Cubberley Community Center. The Americans with Disabilities Act (ADA) required the City to spend more money. The City was disinvesting in its physical plant which could be done for awhile, but it was done at the expense of future generations of Palo Alto taxpayers and Councils. The City had to prove that it could make some economies in its own operation, which was a political necessity. For all of those reasons, the City had to come back to that issue and save money. He agreed with the City Manager that it was a policy issue. The City Manager had asked the Council to tell her if it wanted to save money. He did not believe it would behoove the Council to discuss the issues again. The Council needed to indicate to the City Manager that some money should be saved. The reason it should not be brought back to the Committees and the reason he was disappointed with the report was because he also agreed with the City Manager that if the Council asked her to save money, she could do it. The City Manager knew the organization, and he had every confidence that the City Manager would find a way to save money. It was an administrative, financial expertise area that the Council did not have. Before the Council had a discussion about committees or referring, it should have a discussion about whether or not money should be saved. He hoped the Council would decide it was a necessary element. It was the Council's responsi-bility to listen to the employees from the Fire Department and dispatch, but it was the responsibility of those organizations to talk with the Council about ways to achieve savings. The City would not be able to continue to ask the community to pay, ask the employees to take less, and short change long-term infrastructure. He wanted the discussion to be about whether or not the City Manager would be given the message to save some money. If the Council decided not to give that message, then the discussion on the issue should end. If the Council decided to send that message, it should ask the City Manager how she thought she could most effectively implement that kind of policy direction. He said on the issue of layoffs or attrition, the City was not in a crisis situation, and his goal was to act responsibly as a Council and a City so that the City never reached that point. He would rather address the issues in a timely and responsible way so that things could be done by attrition. Council Member Andersen appreciated Vice Mayor Simitian's intent. There was not only a desire for the City to save funds but also a desire to increase commitment to infrastructure. The Council had done more in the past 5 years in the area of infrastructure im-provements than in the previous 10 or 12 years. The Council had to be careful about giving direction from a policy perspective that did not also include the kind of service reductions that the Council was willing to accept. The Council had to be clear when it considered the HHA recommendations since he believed the majority of the Council would not support those recommendations. He was uncertain whether the cuts would create major savings. He 09/26/94 73-430 did not want to put the City Manager and staff in a position of seeking major reductions as suggested; and when the staff returned with the reductions to the Council and various interest groups questioned the quality of services being reduced, the Council then decided not to move forward with the reductions. If the Council wanted major financial savings, the Council had to know from where the savings would come. The Council had to consider three issues: 1) the savings recommended by HHA; 2) the question of whether or not the City was operating efficiently, which it was at the quality level that the community wanted; and 3) that the Council hired the City Manager because of her philosophy and that philos-ophy was reflected in her report. The Council had to be careful when it sorted out policy and administrative responsibilities. He was not enthusiastic about getting into a lot of detail about how the City Manager wanted to operate her organization which was her administrative responsibility. She made recommendations in her report that clearly enunciated administrative responsibilities. The City Manager had the benefit of using HHA to effect her philosophy. The HHA report did not come out with a lot of cost savings, which he did not believe was bad. He agreed the City had to be frugal, and he agreed with Vice Mayor Simitian's comments regarding the Council's efforts and intent; but the Council had to indicate how much latitude it was willing to give the City Manager. He would not want to make the kind of cuts necessary to get the additional reductions. He did not believe a majority vote of the Council would cut fire fighters, libraries, or dispatchers. He appreciated the recommendation in the City Manager's report to shift temporary employees to regular status. It was more costly, but it was fair. He did not believe it was appropriate to continue to exploit temporary workers who were rehired as regular employees. The decision represented not just an efficiency issue but an equity issue as well. Mayor Kniss said there was a decided move in the private industry to use people on a temporary basis. She asked whether the City was being duplicitous in its use of temporary employees and whether the employees were being moved around in order to reinforce a department when it needed it. Ms. Fleming said no. There were temporary employees who did basically the same task as regular employees year after year. She was concerned with those kinds of conversions. There was a number of other outsource-type temporary employees that the City used in the manner described by Mayor Kniss, and the City would continue to do that. Council Member Fazzino asked what responsibility a City Council and a charter city had over the issue of department heads. He asked whether the Council's responsibilities were different from the councils in a general law city. City Attorney Ariel Calonne said the Charter did not specify anything unusual for the Council. The department heads were approved by the Council. The contrasting form of government would be the city administrator form of government, in which the department head was hired by the City Council directly. The 09/26/94 73-431 City's structure was not unusual. The Council also asserted control over the organizational structure through an ordinance that would require substantial modification to match not only changes made in the Utilities over the past few years but also whatever came out of the process that evening. Council Member Fazzino said the challenge for the Council was that the City Manager had the responsibility to manage her own organization but the Council worked in concert with the City Manager through the process to put together the most effective organization to serve the citizens of the City. He asked whether under the laws of that particular form of government, the City Manager had the authority to put together her own organization. Mr. Calonne said that was correct. The issue that Council Member Fazzino was broaching tested the difference between what was legal and what was wise. Council Member Fazzino recognized that it was a collaborative process. He emphasized that he viewed cost savings as being one of a number of objectives for the effort. It would be difficult for him to implement the proposed HHA cost savings for the Fire Department, and he had been a strong advocate of additional library services. In the final analysis, he might not support any cost savings; but at the same time, he felt it was extremely important that cost savings remain a major objective of the effort. He believed there were too many middle managers in the organization, and he wanted the opportunity to address those issues. HHA agreed and disagreed with him in some respects. He did not believe the only cost savings were in very public servic-es, i.e., library and fire fighting. He believed that adminis-trators had a tendency to raise the red flag on city services such as fire, police, or libraries which had a direct impact on people, and they did not focus as much time on middle management and the functions that citizens did not come in contact with on a daily basis. Those functions were more difficult to evaluate, and he believed there were potential cost savings in those areas. He agreed that time was needed to evaluate the proposals. MOTION: Council Member Fazzino moved, seconded by Wheeler, that a subcommittee of the Council be appointed by the Mayor to work with the City Manager to invite public comment and return to the Council in six weeks for action. Council Member McCown said the principal focus of the City Manager's report was on the organizational issues. She said after reading the report, she felt that was what the Council had hired the City Manager to do. It was her responsibility. She did not feel it was her role to micromanage her judgment about what the organizational structure would look like and the changes recommended. The Council should support her judgment. The questions were appropriate and the feedback would influence her thinking. She could tell that the City Manager had responded to a lot of feedback independent of the advice from HHA. She did not believe there would be value in the Council's getting into a great deal of detail in the structural changes recommended. The second 09/26/94 73-432 piece of it was what the financial implications of the changes were and whether it ended up with net savings or not. She differed from Vice Mayor Simitian's view from the beginning, although she credited him with being absolutely consistent throughout the process. It was obvious that money could be saved, but she did not start the process with that assumption. She concurred it would be a terrific outcome if one of the financial implications was that things could be done better than it had been done and for less money. She was not shocked that that was not the outcome that the City Manager had come up with in light of all of the information she had provided. She did not believe that if the Council rejected the idea of reducing the fire fighters to save $400,000; it was obvious, therefore, that there would be another $400,000 in the budget that the Council could cut in lieu of that reduction. She struggled with how the Council would arrive at the outcome that the City Manager achieve cost savings goals in addition to the organizational changes. She would be open and interested in how the Council would come up with a broader concept to achieve a certain level of savings, but she had some reservations about whether the Council was competent to make that suggestion. Mayor Kniss said the report did not include any options if the Council did or did not make the cuts. The Council needed time to reflect on the issues. The bottom line for her was an optional package. Council Member Schneider said downsizing was the operative word that was being used extensively in industry and business. She saw the community as a business. She could not support additional expenditures when she had heard that the economic future of the City might be compromised in the near future. It was incumbent upon city government to set an example for the community. The City asked people to pay more and be comfortable receiving less. She supported the motion and was interested in seeing whether savings could be achieved as a result of the review. Council Member Rosenbaum agreed with Vice Mayor Simitian's comments. He had expressed his disappointment to the City Manag-er. It was unfortunate that the City Manager decided to add approximately $400,000 to the proposal of items that had nothing to do with the HHA report. He was optimistic that the City would achieve cost savings by using the proposals which the City Manager had made to the Council. There was a number of subjects that would require some discussion. He would not want to offer advice to the City Manager on her recommendation to cut her span of control from nine to seven departments and to merge the Informa-tion Resources Department into the Finance Department. The other items were financial, and the Council should be able to consider them through its usual procedures. SUBSTITUTE MOTION: Council Member Rosenbaum moved, seconded by Simitian, to refer to the Policy and Services Committee: 1) the organizational structure, 2) the recommendation that a new Community Services Commission be created, and 3) consideration of a comprehensive review of the Utilities Department. Further, 09/26/94 73-433 refer to the Finance Committee any staff additions, reductions, and/or transfers. Further, the recommendations from the Standing Committees would return to the Council within eight to ten weeks. Mayor Kniss agreed with Council Member Rosenbaum but the timing was a problem. Council Member Rosenbaum said it would be helpful for the staff to know about the change in the organizational structure, but a review would be appropriate. The cost savings that the City Manager had proposed were due to attrition. There were three fire fighter positions that would not be put in next year's budget because it required negotiations with the labor union which would not occur until next year. The reduction in the tree maintenance conversion to contract required that further vacancies not be filled. There was a similar consideration with regard to park maintenance. There was a proposal to combine a couple of posi-tions in the Community Services Department, i.e., the two theater director associated positions, one of which was currently vacant. The savings aspects were being implemented. It was appropriate for the Finance Committee to carefully review the new positions which could be done early. The City Manager could pursue the requests separately as part of the budget, and the Council would consider the requests in connection with all of its priorities, e.g., the City Manager could come to the Council with additional positions proposed and indicate in order to pay for the positions, the Council would have to extend the telephone tax to interstate calls. The Council would then decide whether it wanted to do that. He asked whether the proposal would interfere with the progress of the budget. Ms. Fleming said the budget could be done since the structural issues would be resolved early so the budget structure could be done; the policy pieces, such as the Community Services Commission and the Utilities, would be dealt with by the P&S Committee; and the other issues would be considered by the Finance Committee and possibly incorporated into the budget. She wanted a clear direction from the Council on cost savings so that staff could follow the steps outlined by the Council. Mayor Kniss asked whether the timing would allow the issues to return to the Council by November 1994. Ms. Harrison said if there were major organizational changes that needed to be implemented into the budget, the changes had to be finalized and returned to the Council for action by November 1994 to be incorporated into the budget document. If the final decision by the Council went beyond that time, the changes could be made for the bottom line in the 1995-96 budget, but it would not be incorporated into the MDB budget document. Vice Mayor Simitian clarified the organization issues could be implemented even if the Council took a little longer, but the physical budget document might not reflect the structural changes. Ms. Harrison explained that if the Council decided to incorporate 09/26/94 73-434 the HHA recommendation to move the Parks operation from the Community Services Department to the Public Works Department, the operation was currently incorporated into several functional areas and would have to be taken out organically from the Community Services Department and moved to the Public Works Department. The budget document could not reflect that the Parks Division was in the Public Works Department. Vice Mayor Simitian clarified that from the beginning of November 1994 to the end of June 1995, which was the period of time to complete the budget process, staff could have effectively moved both the functions and the money to the right place to start the new fiscal year. Ms. Harrison said that was correct. Vice Mayor Simitian said there had been different discussions that evening among the Council Members about different approaches to the issue of cost savings, and he asked the City Manager how she would respond to a direction about cost savings. Ms. Fleming said she would have to work with each department and look at services and staffing to come back with recommendations that could be done. It would be services. Vice Mayor Simitian asked whether it would be folded into the budget process. Ms. Fleming said yes. Vice Mayor Simitian said the Council should direct the City Manager and her staff to look for savings as it went through the budget process. He clarified the City's dispatch system was described by HHA as being more costly than other jurisdictions because of the City's system of dividing the shifts into 10-hour segments and the fact that a 24-hour day was not easily divided. Ms. Fleming said that was correct. Vice Mayor Simitian asked how many other jurisdictions had dispatch operations with 10-hour shift standards. HHA indicated it was an abnormal situation, and other jurisdictions had an 8-hour or 12-hour situation. Manager of Communications Operations John Bush said there were 12 agencies in Santa Clara County that provided a variety of dispatch services. The City of San Jose had a 10-hour plan, and the City of Mountain View was seeing the effects of the recent reduction of its plan from a 10-hour to an 8-hour plan. Vice Mayor Simitian said if public safety issues throughout the state were being addressed with an 8- or 12-hour system, then the Council should consider adjusting the abnormal Palo Alto model that cost the City an extra $150,000. Conclusive evidence had not been provided. He believed cost savings could be done by economies of operation, not real service cuts. He wanted the item 09/26/94 73-435 sent back to both standing committees. Council Member Rosenbaum had given a good division of organizational policy issues to the P&S Committee and the finance issues of the Finance Committee. The Council needed to let everyone state their case and also let the advocates for cost savings state their case. The Council then could make its decision. Council Member Huber supported the substitute motion. He did not believe there was any need to make a decision in four weeks on something that had been discussed for three years. He wanted to take a slow look at the whole process. He did not believe the City Manager should be directed to return with a particular savings. He did not believe it was critical to consider the issues in the context of the HHA study and response because it could be done in the normal budget process which was where it was more appropriate to tell the City Manager to save 5 percent. Vice Mayor Simitian suggested that the substitute motion include that the cost savings recommendations from HHA be addressed during the regular budget process. MAKER AND SECONDER AGREED TO INCORPORATE INTO THE SUBSTITUTE MOTION that the cost savings recommendations from the Hughes, Heiss & Associates report be addressed during the regular budget process before the Finance Committee. Council Member Fazzino accepted the substitute motion but did not want the tough decisions delayed until the budget process. He believed there would have been less frustration for the Council if the City Manager had made a recommendation that recognized the need for the Council to evaluate the issues carefully and deliberately before taking final action. Council Member Andersen did not believe the items being referred to the P&S Committee were critical issues, and he was uncomfortable with the issues being put through the entire budget process because it would delay the implementation of the entire plan until July 1995. He asked that the original substitute motion be reconsidered and that the issues not be put through the entire budget process. Council Member Rosenbaum believed it would be a mistake to put off the staff reductions and additions until the budget process. He wanted the Finance Committee to review the issues and make some recommendations prior to the April time period when the budget would be considered. Mayor Kniss clarified the Finance Committee would consider the issue prior to the budget process and the entire process would not have to be in place for a decision to be made. Council Member Rosenbaum said the Finance Committee would make recommendations to the Council. There probably would not be any additions or reductions to staff until July 1995. The organization was being referred to the P&S Committee, and the City Manager could give two departments to the Assistant City Manager at an earlier time if she desired. 09/26/94 73-436 Mayor Kniss asked what would happen if nothing were decided until June 1995. Ms. Fleming said there would be no budget document for the Council. Mr. Calonne said the MDB document would be missing a major portion of the budget which might lead to his recommendation to defer implementing the MDB if the Council needed to get into the organizational changes. Mayor Kniss asked whether it would make a difference if the issues came back from both committees by a time certain. Ms. Harrison said the majority of the recommendations would be in the budget document if the Council made its final decision by the end of November 1994. Vice Mayor Simitian clarified if the Finance Committee were interested in looking at some of the cost savings that were recommended by HHA but were not recommended by the City Manager, all of the issues would need to be resolved by November 1994. Ms. Harrison said no. Vice Mayor Simitian clarified Council Member Rosenbaum suggested the Finance Committee look at the City Manager's report. He wanted to make sure that as the Finance Committee processed the financial implications of the City Manager's report, it also looked at the financial implications of the savings or additions recommended by HHA. He had suggested that it could be done through the budget process, but he would be delighted if the financial issues raised in the City Manager's report could be done at the same time. He did not believe all the answers were needed by November 1994 in order to put the budget together. MAKER AND SECONDER AGREED TO INCORPORATE INTO THE SUBSTITUTE MOTION that the standing committees' recommendations would return to the Council within the 8- to 10-week period. Vice Mayor Simitian asked at what point the staff would need to address the concerns the Mayor had raised and at what point the staff would need for the committees to have processed the various HHA recommendations as well as the City Manager's recommendations. He asked whether it had to be at an earlier time or whether it could be folded into the budget process. Ms. Harrison said it was not a budget issue. The Council could make any decision it wanted whenever it wanted, and the focus should not be on MDB. The document was secondary, and it might not contain all of the Council's decisions. Council Member Wheeler said Vice Mayor Simitian had asked for additional information and analysis on one specific set of recommendations, and she recalled that during the previous year's 09/26/94 73-437 budget formulation the City Manager had made budget reduction recommendations that she had worked on with staff. She suspected that the recommendations were not repeated in the City Manager's recommendations brought to the Council that evening. She believed the Finance Committee incorporated the recommendations that did not have an impact on service levels in the last budget meeting. She asked whether there were any items that were left on that list that would be logical to fold into an examination of issues that went beyond the City Manager's report and HHA's recommendation. She asked whether the items could also be brought to the committee level. Ms. Fleming said when the list was brought to the Council, staff indicated it stopped just before it went into program reductions. The next step would reduce programs, e.g., closing swimming pools. Council Member Wheeler said if the Council considered the larger dollar savings of the HHA's recommendations, it was at the point of reducing current service levels. Ms. Fleming said the complete list could be brought to the Council. Council Member Wheeler had not heard any sentiment from anyone who had spoken that evening to the larger HHA recommendations or from the feeling she got from the Finance Committee discussions that there was any enthusiasm for adopting any of the larger recommen-dations. The only enthusiasm came from the people who had expectations of saving significant amounts of money by the study. She believed it was appropriate if the Council looked at the results of the study in a way that was directed towards saving significant amounts of money, but she also wanted the Council to look at the recommendations the City Manager and her staff came up with that addressed the same issues. The issues might have more logic and more popularity associated with them. SUBSTITUTE MOTION PASSED 9-0. COUNCIL MATTERS 5. Council Comments, Questions, and Announcements Vice Mayor Simitian invited his colleagues to attend the Santa Clara County Cities Association dinner meeting on September 29, 1994. The topic of discussion would be "Crime in Santa Clara County," and the panelists were District Attorney George Kennedy, Public Defender Stuart Rappaport, and Palo Alto Police Chief Chris Durkin. ADJOURNMENT: The meeting adjourned at 11:10 p.m. to a Closed Session. The City Council met in Closed Session to discuss matters involv-ing labor negotiations as described in Agenda Item Nos. 2 and 2A. 09/26/94 73-438 Mayor Kniss announced that no action was taken on Agenda Item Nos. 2 and 2A. FINAL ADJOURNMENT: The meeting adjourned at 11:55 p.m. ATTEST: APPROVED: City Clerk Mayor 09/26/94 73-439 NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.200 (a) and (b). The City Council and Standing Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours. 09/26/94 73-440