HomeMy WebLinkAbout2010-09-13 City Council Agenda Packet
09/13/10
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER
DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY
CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS.
Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is available in the Council Chambers on the Friday preceding the meeting.
Special Meeting
Council Chambers
September 13, 2010
6:00 PM
ROLL CALL
SPECIAL ORDERS OF THE DAY
1. Acceptance of $275,000 Donation from Palo Alto Library Foundation
2. Appointment of Members to the Infrastructure Blue Ribbon
Commission
ATTACHMENT
3. Selection of Candidates to be Interviewed for the Public Art
Commission
ATTACHMENT
STUDY SESSION
4. Update on City and Community Emergency Preparedness Activities
ATTACHMENT PUBLIC COMMENT
CITY MANAGER COMMENTS
ORAL COMMUNICATIONS
Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the
right to limit the duration or Oral Communications period to 30 minutes.
APPROVAL OF MINUTES
July 19, 2010
July 26, 2010
August 02, 2010
August 05, 2010
2 09/13/10
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER
DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY
CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS.
CONSENT CALENDAR
Items will be voted on in one motion unless removed from the calendar by two Council Members.
5. Adoption of an Ordinance Amending the Budget for the Fiscal
Year 2011 to Provide an Additional Appropriation of $30,000 to
Capital Improvement Program (CIP) Project PD-08000, Crime
Scene Evidence Collection Vehicle
CMR 346:10 and ATTACHMENT
6. Recommendation from Finance Committee to Preliminarily Approve
Fiscal Year 2010 Reappropriation Requests to be Carried Forward into
Fiscal Year 2011
CMR 342:10 and ATTACHMENT
7. Recommendation from Finance Committee to Accept the City Auditor’s
Office Fiscal Year 2011 Work Plan
ATTACHMENT
8. Recommendation from Finance Committee to Accept the City Auditor’s
Office Quarterly Report as of June 30, 2010
ATTACHMENT
9. Adoption of a Resolution Approving an Amendment to the Northern
California Power Agency Green Power Project Third Phase Agreement
to Allocate Shares from Existing Participants to an Additional Member,
the City of Gridley
CMR 345:10 and ATTACHMENT
10. Approval of a Term Contract with Okonite Company in the Not to
Exceed Annual Amount of $1,313,356 for a Three Year Period for the
as Needed Purchase of Four Types of Medium Voltage Cable in Support
of Utility Department. Maximum Value of Contract for the Three Year
Term of the Agreement would be $3,940,068
CMR 331:10 and ATTACHMENT
3 09/13/10
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER
DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY
CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS.
11. Adoption of Budget Amendment Ordinance for Fiscal Year 2011
to Provide Additional Appropriations of $275,000 Within the
General Fund for Estimated Election Costs for Measure R
(Firefighters Charter Amendment) and Measure S (Charter
Amendment to Change Council Elections to Even-Numbered
Years)
ATTACHMENT
12. Approval of Utilities Advisory Commission Recommendation to Defer
any Action on Trading the City’s Unused Individual Water Supply
Guarantee Until at Least January 2011 and Approval of the City’s
Position that San Francisco Should Use the Individual Water Supply
Guarantee to Establish the Interim Water Supply Allocation
CMR 343:10 and ATTACHMENT
AGENDA CHANGES, ADDITIONS, AND DELETIONS
HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members
of the public have spoken.
ACTION ITEMS
Include: Public Hearings, Reports of Committees/Commissions, Ordinances and Resolutions, Reports of Officials,
Unfinished Business and Council Matters
13. High Speed Rail Presentation on Background and History by
Californians Advocating Responsible Rail Design (CARRD)
(Continued from 7/19/10)
14. High Speed Rail Update
ATTACHMENT PUBLIC COMMENT
15. Adoption of an Ordinance Amending Section 2.04.010, Relating
to Notice of Regular Meetings, and Section 2.04.070, Relating
to Notice of Agendas, of Chapter 2.04 of Title 2 of the Palo Alto
Municipal Code to Eliminate the Publishing of the Council Agendas in
the Newspaper and Updating the Language for the Council Regular
Meetings and Agenda Sections of the Municipal Code
(Continued from 7/19/10)
ATTACHMENT PUBLIC COMMENT
4 09/13/10
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER
DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY
CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS.
16. Council Direction to Voting Delegate Council Member Klein for 2010
League Conference Regarding City’s Position on Proposed Six
Resolutions
ATTACHMENT
COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS
Members of the public may not speak to the item(s).
ADJOURNMENT
Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact
650-329-2550 (Voice) 24 hours in advance.
INFRASTRUCTURE BLUE RIBBON COMMISSION
Candidate Background Information, as identified by the candidates
Infrastructure Blue Ribbon Commission to consist of 18 members:
A Boards & Commissions
2 Financial
3 Technical (engineering, design, construction)
6 At Large
3 Alternates ~
ca ca CI) 'u ,~ C) r::: ... -r::: .r::: ca -ca ..J l!! fI) r::: (.) ca CI) ~ U. ..J U. I-
Ray Bacchetti x
Marc Berman x
Ralph Britton x x
Brent Butler x x
Eric Gerritsen x x x
Wick Goodspeed x x
Mark Harris x x x
Robin Kennedy x Withdrew Application
Corey Levens x x
Leland Levy x x
Steven Levy x x x
Mark D, Michael x
Jim Olstad x x
Alex Panelli x x x
James Schmidt x
Gary Wetzel x
Boards & Commissions Nominations
David Bower Historic Resources Board
Patricia Markevitch Parks and Recreation Commission
John Melton Utilities Advisory Commission
Greg Tanaka Planning and Transportation Commission
UPDATED: 9/8/20101 :25 PM
From: Bob Wenzlau [mailto:bob@wenzlau,net]
Sent: Sunday, September 05,2010 3:26 PM
To: Council, City
Cc: Mark Harris
. Subject: Support of Mark Harris for Infrastructure Blue Ribbon Task Force
Council members,
If you have had the pleasure of interviewing Mark Harris for the Infrastructure Blue
Ribbon Task Force, I am confident you have discovered the tremendous asset he would
be to the process of addressing our infrastructure.
I have known Mark for nearly 30 years -as young member of Palo Alto city staff and
now as neighbors. It was as a staff member that I first observed Mark's public finance
skills coupled with his understanding of public works and utilities engineering. The three
critical attributes Mark would bring to this task force are:
• Public Finance Skill -His work both with City of Palo Alto and City of
Mountain View as well as with Joint Powers Authorities brings insight into public
finance questions key to our infrastructure challenge.
• Engineering Skills -Our infrastructure challenge is an engineering challenge,
and therefore he can bring properly framed engineering questions to the
discussion.
• Mediation Skills -We all know how any technical contribution is most effective
with communication and group skills -Mark has gained these in spadvs as a
teacher, mediator and through his work with KARA.
I have am confident in your decision to select Mark, and the city will enjoy the best of
Palo Alto when our brilliant citizenry serve our city.
Yours,
Bob Wenzlau
1409 Dana Avenue
Palo Alto, CA 94301
September 13, 2010 HONORABLE CITY COUNCIL City of Palo Alto SUBJECT: Selection of Candidates to be interviewed for the Public Art Commission Dear Council Members: Enclosed are seven applications submitted for two terms ending on April 30, 2011 on the Public Art Commission. At the Council Meeting on Monday, September 13, 2010 the City Council will select the candidates to be interviewed for the Public Art Commission, with the interview date to be determined. Each Council Member will receive a selection sheet to use for determining who will be chosen for an interview. The requested action is for each Council Member to fill out the selection sheet. The City Clerk will announce the results. Candidates who receive four or more votes will be scheduled for an interview. The applicants are as follows:
Name Address Phone
1. Douglass C. Brown
155 Palma Street
El Granada, CA 94018 650-712-1500
2. R. Dean Bunderson 1321 Bryant Street Palo Alto, CA 94301 650-444-7127
3. Trish Collins
1410 Parkinson Ave
Palo Alto, CA 94301 650-391-9700
4. Mickey Griffin
150 Alma Street #312
Menlo Park, CA 94025 650-561-4013
5. Jane Peterman 891 Ithaca Avenue Sunnyvale, CA 94087 408-749-0824
6. Arlene Stevens
PO Box 51310
Palo Alto, CA 94303 650-814-4146
7. Morgann Trumbull
Respectfully submitted, Ronna Jojola Gonsalves Deputy City Clerk Enclosures cc: All applicants (without enclosure) Donna Grider, City Clerk Elise DeMarzo, Staff Liaison
City of Palo Alto
Table of Contents """ --~<--~" --..... -'" -..... , ....... ---.. _, .--. __ ._ ... _-._----..... , .. -----------.. _-". --~ ... -.. -.~ ... -.-~--~----. -. -... _----_ .... _ ..... . . ...................... __ ...... ..
1. Background .................... , .................................................•.......................................................... 3
2. Palo Alto/Stanford Citizen Corps Council ............ : ...................................................................... 5
3. Neighborhood Sector ............................................ ~ ... , ............................................................... 11
4. Volunteers Sector ..................................................................................................................... 14
5. Stanford University Sector ......................................................................................................... 16
6. Business Sector ............................................................................................................. : ........... 17
7. Medical Sector .......................................................................................................................... 18
8. Stanford Industrial Park (SIP) Sector ............... , ......................................................................... 19
9. Stanford Shopping Center ......................................................................................................... 20
10. Youth and Schools Sector ......................................................................................................... 21
11. -Seniors Sector ........................................................................................................................... 22
12. City Emergency Preparedness Overview .................................................................................. 23
13. Regional Considerations ........................................................................................................... 24
14. City Projects / Strategic Work Plan ........................................................................................... 26
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
2
City of Palo Alto
groups such as the Stanford Industrial Park EH&S Forum.
• Stanford Shopping Sector: This sector includes representatives of the Stanford Shopping
Center: property management (Simon), security, and tenants.
• Medical Sector: This sector includes representatives ofthe Medical Sector. Hospitals, clinics,
and other health care providers will develop plans within their function and also, as
.:pr~ I:tiFr;)bl~", ...... Vo!prk .. .c'«i.tJ1. ·.·Q!n~I=~flJIU~~c.Y~ .. Jrt:'-cR!:9ye ...... tr.~ ... :~~~W~!J CE! ...•• 9f=J~y_ .. t~.l:iJi~~.~ ••.. an~ .... _
capabilities. This work group will also survey best practices and assist other stakeholders.
• Seniors Sector: This sector addresses the needs of seniors and the various care facilities and
other organizations in the region.
• School and Youth Sector: This sector is responsible for topics pertaining to youth and
schools, including all public and private schools (K-12, etc.). This group will coordinate with
the existing City-PAUSD Emergency Preparedness Committee.
• Volunteers Sector: This sector coordinates disaster-related volunteer programs (such as Red
Cross, CERT/PANDA, Volunteers in Police Service {VIPS}, ARES/RACES (amateurj"ham"radio),
Medical Reserve Corps, Explorer Cadet Programs) and may provide support to the City,
Stanford, businesses, and community groups. The Police Department's Special Operations
Group and the City's Special Events Team, in conjunction with the analogous Stanford
University groups, may coordinate with this work group to optimize the utilization of
volunteers during parades, sporting events, and so forth.
General Membership:
The CCC is designed to break down "silos" and encourage cross-sector, multi-discipline, inter-
jurisdictional, and regional cooperation. The general membership may include:
• First Responders -Fire, Emergency Medical Services (EMS), Police, and Hospital/EMS
• City and Stanford staff who administer or have nexus to disaster volunteer programs, public
education or other role related to the mission of the CCC
• Volunteer, Nonprofit,and Civic Organizations
• Military and other Federal Agencies: USGS, Civil Air Patrol, National Guard, and other
representatives
• Faith-Based Organizations
• Business Entities/Private Sector
• Media: KZSU and other local media outlets
• Multi-Jurisdictional Entities: Menlo Park Fire District, Woodside Fire Protection District,
Midpeninsula Open Space District, the San Francisquito Creek Joint Powers Authority, Fire
Safe councils, the Palo Alto Airport
• Adjoining and nearby municipalities and communities: Atherton, Cupertino, East Palo Alto,
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
7
City of Palo Alto
Fremont, La Honda, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Portola Valley,
Woodside, and other neighboring jurisdictions and their Citizen Corps Council(s), including
both the County of Santa Clara and the County of San Mateo
• Other entities, public and private, that. can materially further the mission of the Palo
Alto/Stanford Citizen Corps Council (Bylaws, Art. III)
MembelshipiffCtlie·CCCls=-subletrto·a'Pfltovalb\Fthe=€ity····M amrgel';c-·Whileinformation ··sharingls .-a-==cc C7.CC.C···
component, the key driver of the CCC is work product. To that end, the CCC is structured with work
groups with accountability for projects.
Work Groups & Projects:
The CCC Steering Committee and the CMO have identified (in no particular order) a number of
projects:
• Emergency Public Information/Warning Work Group: This group will develop plans for a
Joint Information Center (Jle) and other means to coordinate among all entities with Public
Information Officers (PIOs), warning/alerting systems (such as AlertSCe)7, broadcast radio
(KZSU) or other such systems. This group will coordinate with the City's Public Information
Officer (PIO) Team. This group will also support the CCC best practice: " ... communications
to the public should convey a more realistic understanding of emergency response capacity
and emphasize the importance of self-reliance. Messaging should speak to a shared
responsibility and stress that everyone has a role to play in preparedness and response."s
• Grants and Funding: This group will work to identify sources of funding for the CCC and
related stakeholder projects.
• Pandemic & Public Health: This group, in conjunction with the Medical Sector Work Group,
will coordinate the efforts of all sectors related to the current H1N1 Pandemic and future
public health concerns. One specific project will be to develop specific instructions for Block
Preparedness Coordinators (and, later, other volunteers) in a "neighbors helping neighbors"
model.
• Midpeninsula Safety Fair: This group will put on a community-focused safety education
event in cooperation with neighboring jurisdictions including Stanford, Menlo Park, East Palo
Alto, and others. This group is coordinating with the San Mateo County Sheriff's Office on
the September 18,2010, Community Safety Education Fair at USGS (Menlo Park) and is also
working on a CCC-sponsored Community Safety Fair in May of 2011 in the Stanford Shopping
Center area. Going forward, this group may transition to a sustained function to coordinate
public education, including classes, fairs, events, marketing, etc. For example, there is an
identified need to develop a "Speakers' Bureau to facilitate sharing subject matter experts
among organizations for training and the development of educational resources. .
• Technology Work Group: This group will develop, evaluate, and recommend technology
tools and solutions to address the needs of CCC members and their organizations. The group
7 AiertSCC replaces CANS, see: http://www.cityofpaloalto.org/civica/filebanklblobdload.asp?Blob1D=22976
8 http://www.citizencorps.gov/ready/2009findings.shtm
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
8
City of Palo Alto
will also work with City staff on projects related to Geographic Information Systems (GIS)
(computer maps) and upgraded web site capabilities, such as a common special events and
training calendar.
• Midpeninsula Foothills Emergency Forum (MFEF): This group will implement the MFEF, per
the recommendations in the newly~adopted 2009 Foothills Fire Management Plan. This
group will supplement existing Fire Safe Councils by integrating government agencies, as well
·········~as· ... non::.govemment:::'o-rganizations-:.'{neighb-orhoods) in ...• cooperative .... planntng:for······ public
education (prevention), warning, evacuation, and related matters.
• Community Emergency Plan: .In accordance with Municipal Code Section 2.12.080, the CCC
shall also develop and submit a Community Emergency Plan (an annex or subplan to the City
EOP) which "shall provide for the effective mobilization of all the resources of this city, both
public and private, to meet any condition constituting an emergency." This group will
coordinate with the City's Emergency Plans (EOP, COOP) Team.
• Training and Exercise Design Team: The Training and Exercise Design Team (TEDT) will
support the design and implementation of exercises for cce members. There will also be a
City-staff TEDT subgroup whose resources may be provided, at the discretion of the CMO, to
non-City grou.ps. The CCC national best practices support the TEDT concept: "Drills and
exercises for multiple hazards and multiple locations need to be conducted through social
networks. In addition, community members need to be included more effectively in
government-sponsored community exercises.,,9
• Critical Infrastructure & Key Resources (CI/KR); This work group (including an internal City-
staff group, including Continuity of Operations (COOP)) will perform a hazard vulnerability
assessment (gap analysis) and threat assessments on various CI/KR in the area, including
transportation (roads, aviation), utilities (water, gas, power, emergency fuel), essential
facilities, and so forth. This group will coordinate with the City's Terrorism Liaison Officers
(TLOs) Team and others, including the Plans Team on resource sharing.
• Sand Hill Corridor Neighborhood Disaster Committee: The Stanford University Medical
Center and the CCC Medical Sector have formed a "neighborhood" for the Sand Hill area to .
facilitate resource sharing in a major disaster among residents, commercial facilities, hotels,
retail, education, and medical providers. This is a cross-sector group that is responding to
the needs of a geographic area with complex jurisdictional and organizational challenges.
Details of this group's activities are found in the Medical Sector section, below.
Most of the work groups listed above are in the formative stage, since the CCC structure is
comparatively new and most groups are designed to be driven by community members and
supported by City staff, as opposed to led by City staff.
The inherent value of the new CCC structure is derived from the common goal setting and team
building activities. This connection of government and community resources supports, in the
parlance of the national program, "outreach and education on personal preparedness, such as
9 http://www.citizencorps.gov/ready/2009findings.shtm
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
9
City of Palo Alto
neighborhoods, the workplace, schools, and faith communities. And the concepts of mutual
support at the local, neighborhood level should be emphasized."10
Steering Committee Org Chart
~-------------------------------~
City Nfanager's Oftlce ! Council Liaison i
1. Keene (ex officio). K. Morariu. K. Dueker i Mayor P. Burt i
.. "._.. .'" ........ " .. " .. -.--'-~.-~.--"".. ." .. "~ .•.. ~-.~.-....................... _....... . .............. , ... .
Police Chief
D.Bums
Public "Vorks Director
G.Roberts
Neighborhood Sector
A. GlanckopfAshton& P. Muffler
Stanford Sector
K. Perry & L. Wason
Stanford Shop. Ctr. Sector
1. Benvenuto & V. Lastra
Seniors Sector
T. Pamilla & L. Hibbs
...... ... ....... ....... .. __ ._._----.... :;::~ .... ~:-:::-.=.~.::':-.. :-.-.::'"':':~~.":::"'"~-~.~.-.-.. ----~ .. -j .
Fire Chief
[vacant]
Utilities Director
V. Fong
Business Sector
P. Sandas & [vacant]
Nfedical Sector
B. Burnes-Line & fun Schweikhard
Stanford Indust. PIc Sector
D. Martin & S. Brichacek
Schools & Youth Sector
L. Erickson & L. Lenoir
Volunteers Sector
D. Kalish. K. Matzke. R. Bacchetti & K. !ida
The following sections present a description of the above sectors, including staff projects and
certain other efforts.
10 http://www.citizencorps.gov/ready/2009findings,shtm
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
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City of Palo Alto
Accomplishments:
Since the BPC Program became operational about 1& months ago, numerous accomplishments have
been realized, including:
• Training over 250 NPCs and BPCs, including assigning 42 of 52 needed NPCs.
• Developing a comprehensive training program, including a Manual covering topics, ranging
.. ··.·from ·.emefgencycommunicaticlRs:andcc.,damaga:assessmenLto,Neighborhpod: .. WatchAcrlme ................... -... .
prevention).
• Implemented an emergency two-way radio network, allowing the City's Incident Commander
to communicate to NPCs and BPCs city-wide.
• Exploring new technologies
The Neighborhood Sector, with many members also a part of the CCC Safety Faire Work Group, is
also highly active in community education efforts. On September 11, 2010, neighbors experienced a
post-earthquake campout in a local park in a new event: "Quakeville". On September 21, the BPC
leadership will pilot a local version of the "READY" personal preparedness 2-hour training class.
On October 21, 2010, at 7pm, there will be a CCC Awards Ceremony with a keynote address by Dr.
Ross Stein of the USGS.13
13 For a list of all events and more details, go to: http://www.paneighborhoods.org/ep
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
13
City of Palo Alto
is aimed at adding volunteers to the law enforcement and fire agencies in the area, and consists of
five components, three of which are Volunteers in Police Service (VIPS) programs: Citizens on Patrol,
Volunteers in Police Administration .... The Public Safety Volunteers Program also serves as the
umbrella for Fire Department Volunteers, a fire safety, public education and outreach program, and
the Citizens Police Academy .... "15
The P~.I(»)~1~9/Stanf()rd .. C:C:C: •. WiJl ... E:!~p:I()[~aJ.JcQJtiE:!ctC:gmf!1}~Dg. progr~mf()rpuQli(:;.·~ilfE:!·1y=-¥()ILI nJgers.
The EOP defines the Incident Command System concept of Unified Command: "Unified command
provides for all agencies with geographical or functional responsibility to establish together a
common set of incident objectives and strategies, and a single Incident Action Plan.'i
There are, for example, a number of youth-focused groups and programs, such as the Police
Explorers (scout cadets) and a similar group in the Fire Department. A very large program, the Life
Guards (run by the Community Services Department), is another candidate for inclusion in CCC
activities. See the Youth & Schools Sector section for more information.
The City remains committed to volunteers and acknowledges the substantial time donated by our
community members. For example, in 2009, PANDA members donated about 11,000 volunteer
hours to the community. Doubtlessly, there are similar numbers of hours being donated by the
other groups on a per-person basis.
Therefore, the Volunteers Sector leadership has crafted the following goal:
"Our group will assess (1) what activities need to be performed by volunteers
during a disaster ... ; (2) inventory which of those activities the volunteer
organizations already believe is their mission; (3) determine whether there are
any gaps between the expectations of what the volunteer organizations should
provide and the services needed; and (4) determine where the volunteer
organizations would benefit from coordination in planning and execution of their
missions. The primary focus of our activities will be in cross-organizational
coordination .... "16
15 https:llwww.citizencorps.gov/councils/cc_councils/fresno.shtm
16 E-mail from Doug Kalish to Ken Dueker, dated August 29,2010.
Presented September 13, 2010
15
City Council Study Session: Emergency Preparedness
City of Palo Alto
s. Stanford University Sector
The structure of the CCC acknowledges the special relationship between the City and the University:
"Stanford University is included in this Citizen Corps Council, since the University contracts
with· the City for various emergency servkes,.8Ad.the.· Unive r-sityandtheCit-y.sh.areor.have.·.·
interdependencies for many resources. The Palo Alto Fire Department provides service to
Stanford University under contract, including the Stanford Linear Accelerator (SLAC) in San
Mateo County. The Palo Alto Police Department, in addition to providing mutual aid, is the
primary law enforcement agency for large portions of Stanford lands (Stanford Hospital,
Stanford Shopping Center, Stanford Industrial Park, and so forth). The Palo Alto Police
Department also provides the 911 Public Safety Answering Point (PSAP) and radio dispatch
of the Stanford Department of Public Safety (Stanford Police) under contract." (Bylaws, Art.
II)
This Report does not attempt to catalog the activities of the University beyond a few highlights as
presented by the CCC Stanford University Sector, such as:
• Stanford DPS collaborated with PAPD and PAUSD on training for schools on critical incidents
(Code Red) and related policy and planning efforts.
• Joint homeland security training and upcoming drills regarding the Stanford Stadium with
DPS, PAPD, others.
• . The University received a prestigious U.S. Department of Education grant to facilitate the
development of disaster planning at institutions of higher learning.
• Stanford hosting the City's new Mobile Emergency Operations Center (MEOC) vehicle.
The Stanford University Sector also interoperates with the other CCC Sectors and work groups,
where the University has resources or needs.
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
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City of Palo Alto
6. Business Sector
The Business Sector (including the Palo Alto Chamber of Commerce and other groups) is the general
private sector stakeholder on the CCC Steering Committee .
. .. '." .. ¥._ ""~ ___ '<~"'" " ••••• _ •• _ ••• __ ._" __ '_ •••• ,, __ , __ • _." •••• _. • ••••••••• _ ••• _. ______ ~_. __ '" • __ ••• ~. _____ • __ ~ __ ._. _ •• _ ••• __ • __ • ____ "0 • • •• ____ • _____ • _____ • ••• • •• ____ ._. ________ .~_ .... _. """~_ ••• ____ • __ -._ •• ........ ... ... _-_........ . ................. _----.................... " ..... -~ .. -.. -.-.. -' .... _. '. -. ". " .. __ .
Some of this Sector's accomplishments, supported by City staff, include:
• Training for businesses on "all hazards" planning, including crime, terrorism, cyber, and how
to work with government Incident Command System.
• CIAS Cyber Storm (Cyber Security): The City of Palo Alto was selected by the Federal
Department of Homeland Security (DSH) and the State of California Emergency Management
Agency (Cal EMA) to host a series of trainings and drills related to computer and
telecommunications systems. Numerous businesses in Palo Alto and the surrounding area
partiCipated in the CIAS program. The Police Department, Administrative Services
Department (IT), and CMO provided staff support to this process. To learn more about the
Center for Infrastructure Assurance and Security, see: http://cias.utsa.edu
• Promulgated "Crisis Box" and related protocols, developed by the Police Department for
critical incidents (in process).
• Adopted Block Preparedness Coordinator (BPC) best practices to form "business
neighborhoods" (Le., Sand Hill Corridor, Stanford Industrial Park, etc.), including common
emergency radio channel system for SIP and one pending for Sand Hill.
Many of these efforts, not surprisingly, are coterminous with the other business-related sectors,
listed subsequently. Through the Palo Alto Chamber of Commerce and other groups, the best
practices applicable to businesses in the area can be shared via this Sector.
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
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City of Palo Alto
11. Seniors Sector
The. Seniors Sector provides representation for both senior citizens as well as organizations that
support them, such as Channing House, Stevenson House, and others.
. .......... _----_ ... _--_ ..•. _---_ ............... . .. .•. _".--' -_ .......... _ ...... .
The special needs and considerations for seniors are being incorporated into the all-hazards
approach via the CCc. For example, training on crime prevention and disasters is being adapted for
senior living and care facilities.
Certain residential facilities have been tied-in to the Block Preparedness Coordinator program and
emergency radio system.
Channing House, Lytton Gardens, Stevenson House, and others have participated in functional
exercises and City-wide emergency drills.
This Sector is also coordinating with the Neighborhood Sector and the Volunteers Sector to expand
opportunities for volunteer service for all age groups.
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
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City of Palo Alto
12. City Emergency Preparedness Overview
There are numerous Essential Service Functions (ESFs) that the City provides or for which it has
some responsibility. In other words, these are the basic capabilities the City is expected to have:
·6:·-c··L~fwEnforc-ement:marntaiffrreestaBlIsfirpuBnc-c{rdet (faWen'f6-fcement)'ilndsUpportOther
public safety (fire/EMS, etc.)
o Fire Fighting and Emergency Medical Services (EMS) (provided by the Fire Department as
well as the CSD Park Rangers and certain other groups)
o City public safety communications (radio & IT; Dispatch; administered by the Police
Department)
o Utilities: water, gas, electricity
o Public Works: facilities, transportation, storm drains
o Critical Infrastructure (Asset) Protection Program (CIP): support efforts to protect critical
infrastructure and key assets: water supply, roadways, electrical power, and other utilities;
piping and pump stations; schools, hospitals, key sources of economic activity/value
o Emergency Public Information (Warning): community notification/communication: PIO
function; outreach function
As detailed in the EOP, these various functions occur, to varying degrees, in the four phases of
emergency management: prevention, preparation, response, and recovery (PPRR).
If we translate the ESFs to homeland security and emergency planning/preparedness nomenclature,
they can be categorized as follows:
o Policy & Planning: This can encompass disaster response or more defined incident action
plans oroperation orders for things like dignitary visits. In other words, both strategic and
tactical planning is involved.
o Operational Readiness: How well can the staff respond to a given situation? Operational
readiness can be tested/evaluated through drills and exercises.
o Situational Awareness & Intelligence: Collection of information regarding threats. This
includes liaison with other government and non-:government sources. The most important
part of this function is filtering and sharing said information.
Each of these. items is comprised of numerous projects, plans, and resource requirements. Those
applicable to the Council Priorities Work Plan, referenced above in the Background section, will be
presented below. Prior to discussing the future direction of City efforts, it is important to emphasize
that the City is part of a regional (and national) system. That is discussed in the following section.
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
23
City of Palo Alto
well. The City also participates on various Santa Clara County committees,
such as the Emergency Managers Association, the County Police Chiefs
. Association, and the County Fire Chiefs Association.
As government resources shrink, the existing momentum towards regional planning and
cooperation will likely increase. This Report will not seek to summarize the manifold regional
effortsl.but·encouragesth~r~adeLtoexplore.somaoftbgexisting.postedplal1s,e~eclallyJhe_San Francisco B~y Ar~;Regi~nal Ern~rge~cy Coordi·~~ti~~Pi~n.20· ..... .. ..... ... .. ...... ... ...... .. --..
20
http://www.calema.ca.gov/WebPage/oeswebsite.nsf/contentlF39818FB706ECED68825743D00738C6A?Open
Document
,._--"._------. -.-., .. _ .. __ .. _-" .. _"
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
25
City of Palo Alto
14. City Projects I Strategic Work Plan
This section provides a list of topics and activities that the City has identified as primarily staff-
driven. These topics are not in any particular order, but arise from various after-action reports from
.... d isasterexe.reises,·lfite rna L eUs€u ssian switl'lcstaff:;can dctheJi.ke..····cco·.=:::.·· .• c .. ·.=.,,·,.··.:,::::::::::,,::: ... ::::=:=e:ce· ...................•..................... -.•.....•...
Planning:
As cited above, the City Emergency Operations Plan (EOP) is the core document for the City.
The City has identified the need to create or update the following plans:
• City Emergency Operations Plan (missing annexes, other updates)
• City Continuity of Operations Plan (COOP)
• City Public Health Emergency Plan (includes Pandemic)
• Palo Alto Community Emergency Plan (requires CCC work group formation before it can be
completed)
• Foothills Fire/Emergency Plan (related: Regional Foothills Evacuation/Emergency Plan to be
written with the MFEF)21
Constrained staff resources remainthe primary impediment to completion of the bulk of the work
identified here.
Foothills Fire Management Plan:
This plan (Jan. 15, 2009, adopted Oct. 26, 2009), in addition to the CCC aspects such as the MFEF
cited above, also calls for the removal of invasive plants and other "fuels" to improve the viability of
evacuation routes, to protect critical infrastructure, and to mitigate the spread of fires.
The City retained an expert outside consultant to write that plan and, later, to explore sources of
grant funding to fill the roughly $715,000 required to conduct such work over five years.
At this point, there has been no receipt of grant funding. The 2011 application process for several
potential grants has not yet been initiated . . ~
21 The Foothills Fire Management plan is included in the link of the draft plan and environmental documents at
http://www.cityofpaloalto.org/civica/filebanklblobdload.asp?BlobID=15866; When the plan returned to Council,
there were a few updates: htte:/IWWW.cityofpaloalto.org/civica/filebanklblobdload.asp?BlobID=17 449.
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
26
City of Palo Alto
Many of these efforts are, at least in part, coordinated with or supportive of larger, regional
initiatives. The complexity ofthese projects and, moreover, their criticality to the City's
sustainability, require much more in-depth analysis than can be presented in this Report.
Animals in Disasters:
The PoliceDepartmentAnimaLS.ervicesDivi~jon.has.been_veryactiveinpreparingto hancHellon-
human companions in disasters. Activities include:
• Outfitting a new Animal Disaster Trailer and other emergency supplies
• Serving on the Santa Clara County Animals in Disaster Committee
• Developing a Disaster Plan for Animals in Palo Alto
City Operational Readiness:
An ongoing task for the City is the need to test assumptions. The City needs to conduct more
exercises and drills (mix of field and "tabletop") to shake down operational readiness.
For example: If the City were cut off from outside supplies (pandemiC, big earthquake,
terrorism/WMD), how long could core functions continue? Put another way, there is a tendency to
exercise the first few hours of a disaster; however, there is a need need to look at "Week 2" (and
"Month 2"), as well.
Further analysis is required regarding the key resources City government needs to operate:
o Water
o Electricity
o Communications/IT
o Fleet
o Fuel
o Food
o Facilities/shelter
o Task-specific equipment/supplies (such as personal protective equipment)
The most important resource is people. Core questions for review include:
o If the Big One happened today, how long (and how well) could the City perform?
o Do City staff know how they will be called in, where to report, their role, etc.?
o Are City workers prepared at home?
o How communications are done with no phone or Internet
The Santa Clara County regional training priorities support the above concept of operational
readiness, supported by City staff in the Office of Emergency Services as well as our CCC efforts:
• Expand Regional Collaboration
• Implement the National Incident Management System (NIMS) and National Response
Framework (NRF)
Presented September 13, 2010 City Council Study Session: Emergency Preparedness
30
City of Palo Alto
• Implement the National Infrastructure Protection Plan (NIPP)
• Strengthen Information Sharing and Collaboration Capabilities
• Strengthen Interoperable and Operable Communications Capabilities
• Strengthen Chemical, Biological, Radiological/Nuclear, and Explosive (CBRNE) Detection,
Response, and Decontamination Capabilities
• Strengthen Medical Surge and Mass Prophylaxis Capabilities
.·· .• :tommunityPreparedness -:Strengthening.PlanI'lJngand· Citizen-Capabilities
Santa Clara County has numerous committees and groups to facilitate inter-agency work on such
matters, such as:
• Emergency Volunteer Center (EVC)
• Emergency Managers Association (EMA), including a subcommittee "Public/Private"
preparedness and response integration
• County (Community Emergency Response Team) CERT subcommittee
• SCC Emergency Preparedness Council
• SCC Public Health
• Collaborative ABAG-Dewberry and Davis Mitigation plans
• County Animals in disasters planning and drills
• Santa Clara Valley Water District Volunteer creek watch
Electrical Utility Improvements:
Subsequent to the February power outage, the City has been investigating options for another
interconnection point to the Electric Grid to provide a new independent path to deliver electricity to
the City. Over the last 4 years, the City has prepared a preliminary design study for an
interconnection to the 230kV system that serves the Stanford Linear Accelerator Center (SLAC).
The City is also currently investigating other transmission path options including the possibility of
undergrounding a portion of one of the PG&E transmission lines that was impacted in the February
plane crash.
Emergency Water Supply:
The City is currently implementing the Emergency Water Supply and Storage (EWSS)24 project and
other projects related to emergency preparedness in the event of a disruption of our primary water
supply from San Francisco's Hetch-Hetchy system. The EWSS project involves installing a new 2.5
million gallon reservoir at EI Camino Park, installing three new groundwater wells, and rehabilitating
the City's 5 existing groundwater wells. In addition the City is currently performing seismic analysis
and upgrades at the City's 6 existing water reservoirs.
24 http://www.cityofpaloalto.org/info/news/details.asp?NewsID=691 & TargetlD=60
Presented September 13,2010 City Council Study Session: Emergency Preparedness
31
Emergency Preparedness
Draft Council Priorities Workplan -Emergency Preparedness
June 22, 2010
;/
1) Organizational Aspects
Restructure internal City,emergency
preparedness functions ~o enhance
la) Internal City structure operational efficiencies :1
Identify goals and submit to the Citizen
Corps Council; speCific t~sk: develop
the "Community Emerge~cy Plan"
lb) Community/Neighborhoods
annex to the City's Emer~ency
QDerations Plan ;1
Identify goals and submit to the Citizen
Corps Council: include "qommunity
Disaster Network"; colla~orate with
Moffett Field's Silicon V~Hey Disaster
) lc) Regional (interoperability) II Center, etc. ! j
ld) Business
Identify goals and submIt to the Citizen.
". I CorDS Council :i I
le) Funding availability/opportunities Explore grants / commuhity funding
2) Disaster Preparedness/ 1I if :1
Mitigation q
Identify goals and submi~ to the Citizen
Corps Council; CCC has r~cently
requested the formation/of a Training
I " " and Exercise DesignTea#l (TEDT) and
the deployment ofcom~unity "Ready"
2a) Encourage Community Involvement! Self-!,
preparedness classes" ,i reliance
Implement recommend~~ions related " .. to reducing road-side fu~ls a"nd
firebreak vegetation and haunch the " Foothills Fire Plan-recommended
"Mid peninsula Foothills ~mergency
Forum (MFEF)" as part of the Citizen
2b) Fire -Wildland Fire Plan Implementation Corps Council "'I
Page 1 of 3
('
Draft Council Prioriti~.s Workplan -Emergency Preparedness
June 22, 2010
2c) Fire -Funding for Station 8 Staffing
2d) Flood -SF Creek JPA Project
2e) Earthquake -SUMC Project
2f) Earthquake -Public Safety Building (new)
2g) Earthquake ~ Mobile Command Vehicle
2h) Earthquake -Emergency Water Supply (See
IT)
2i) Emergency Block Preparedness Coordinator
Program (See IT)
3) Disaster Response
Page 20f3
The MFEF/CCC, in conjunction with
staff, will investigate fun~ing sources
and will coordinate outreach to
residents a'nd businesse~ in the I,
Foothills, should fundra1sing or fees be
on the table 'I ;1
II 1I
Receive periodic updatd from JPA on
project status; provide iHterim policy
guidance as to project i~pacts to
Baylands, Palo Alto Municipal Golf ii, Course, and Baylands Atf;lletic Center.
Final project approval b~ Council. is
expected in 2011. ;! :1
Identify goals arid submit to the Citizen' :1
Corps Council; specificti!isk: improve
. 'I
coordination among SU~C EOC,
Stanford EOC & City Eoqi '
No data II
MCV to be.delivered in s~mmer 2010;
working with Stanford a~d other'
neighbors tO'find a locatj,on to house
!i the MCV
Increase the City's emer~ency water
supply through the com' letion ofthe , :! project by 2013. i i
Provide emergency (rairl\ng for 550
Block Preparedness coo~dinators
(BPCs) j'lnd Neighborhoo~
Preparedness Coordinat~rs (NPCs) by
the end of 2010. Ii ;!
:'
:1
i
.j ,
:1
I
Draft Council Priorities Workplan -Emergency Preparedness
June 22, 2010
Staff should review newiState of
California EOP and mod~1 City Recovery
3a) Recovery Plan Annex of Emer Ops Plan
Annex off the State ver~ion
,
3b) Update of Emer Ops Plan and related 'I Ii
documents Annual review
Identify goals and submit to the Citizen
Corps Co.uncil: include "~ommunity
Disaster Network", (collaborate with . . ;1
Moffett Field's Silicon V~lIey Disaster !i .. .
Center, etc. -Specific Gpal: evaluate
feasibilty of using volunteers and NGOs
3c) CERT training conducted by community (Red Cross) to take on b~lk ofteaching
and administration ofCERT volunteers ' II
Identify communication~ needs
between 1) governmentlentitiesand 2)
3d) Coordination of communications systems community entities -viz.i the Block
and contingency plans for extensive power Preparedness Coordinatbr Program
outage II
No scorecard/inforrTiatio'n only
3e) Community Alert Notification System (See IT)
'.
Page 30f3
,
City of Palo Alto
City Manager's Report
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: SEPTEMBER 13, 2010
REPORT TYPE: CONSENT
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 342:10
SUBJECT: Recommendation from Finance Committee to Preliminarily Approve Fiscal
Year 2010 Reappropriation Requests to be Carried Forward into Fiscal Year
2011
RECOMMENDATION:
The Finance Committee recommends that the Council preliminarily approve the Fiscal Year
2010 reappropriations to be carried forward into Fiscal Year 2011 (Attachment A).
Reappropriation is defined as the inclusion of a balance from the prior year's budget as pali of
the budget of the subsequent fiscal year. This year, General Fund proposed reappropriations
total $185,000. Enterprise Fund proposed reappropriations total $3,443,418. Internal Service
Fund proposed reappropriations total $194,000.
COMMITTEE REVIEW AND RECOMMENDATIONS:
On July 6, 2010, the Committee voted unanimously to accept staff's recommendation to carry
forward the Fiscal Year 2010 reappropriations into Fiscal Year 2011.
PREPARED BY:
DEPARTMENT HEAD:
ALEWONG Q
Senior Financial alyst
~~
Director, Administrative Services
~ .. --.. ~. :-0----------------------::---:-::c:--CMR:342:10 Page lof2
CITY MANAGER APPRQV AL:
ATTACHMENTS
Attachment A: CMR 297:10, July 6, 2010 Report to the Finance Committee
Attachment B: Excerpt from July 6,2010 Finance Committee Minutes
CMR:342:10 Page 2 of2
TO:
ATTENTION:
FROM:
DATE:
SUBJECT:
ATTACHMENT A
City of Palo Alto
City Manager's Report
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER
JULY 6,2010
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 297:10
Request to Preliminarily Approve Fiscal Year 2010 Reappropriations
Requests to Be Carried Forward into Fiscal Year 2011
RECOMMENDATION
Staff recommends that the Finance Committee recommend that the Council preliminarily
approve the Fiscal Year 2010 reappropriations be carried forward into Fiscal Year
201 1 (Attachment A).
BACKGROUND
As a part of the fiscal year-end process, staff reviews the City's unencumbered and unspent
appropriations of the fiscal year just ended along with the City's spending plans. Encumbered
amounts are those subject to the legal claims of other parties due to contractual obligations (for
example, commitments made through purchase orders). The City has a process for carrying
forward encumbrances.
However, each year there are a small number of important projects we carry forward into the
next year with unencumbered funds. The reappropriations process is used for these projects.
The Council must provide a preliminary approval at this time to allow the reappropriations to
move forward, although the Municipal Code also requires that the Council provide final approval
at mid-year, once the accounting books are closed. Because projects may need funding in the
first part of the fiscal year, the Municipal Code was amended in 1995 to allow the Council to
preliminarily approve the reappropriations (Chapter 2.28, Section 2.28.090).
DISCUSSION
As noted above, the Municipal Code aUows the "preliminary" approval of reappropriations as
long as final approval is included with the normal year-end closing ordinance. The preliminary
reappropriation action allows for an early review of uncommitted funds in a just-concluded fiscal
year, Attachment A identifies those reappropriation requests that staff recommends for
preliminary approval.
CMR:297:10 Page I of2
RESOURCE IMPACT
Staff has determined that sufficient uncommitted budgeted funds exist to allow for the
preliminary approval of the attached Fiscal Year 2010 reappropriations list (Attachment A).
General Fund proposed reappropriations total $185,000. Enterprise Fund proposed
reappropriations total $3,443,418. Internal Service Fund proposed reappropriations total
$194,000.
POLICY IMPLICATIONS
This recommendation is consistent with adopted Council policy.
ENVIRONMENTAL REVIEW
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
PREPARED BY:
DALEWONG ~
. Senior Financial alyst
DEPARTMENT HEAD APPROVAL:
LAL
Director, Administrative Services
CITY MANAGER APPROVAL: ;(/
ATTACHMENT
Attachment A: Fiscal Year 2010 Reappropriations List
CMR:297:IO Page2of2
\.
Attachment A
FY 2010 REAPPROPRIATION
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Ci~y Manager's Office
$55,000 High Speed Rail Project This reappropriation is being requested for Recommended $55,000, There is
staffing costs related to the High Speed Rail sufficient balance in the Fiscal Year
Project. Per CMR 267:10, Council approved 2010 budget that can be
the appropriation of $55,000 from the FY 2010 reappropriated.
Council contingency to fund these costs.
Planning Department
$40,000 High Speed Rail This reappropriation is being requested for Recommended $40,000. There is
Project contract services related to the High Speed Rail sufficient balance in the Fiscal Year
Project which is a multi-year project that does 20 I 0 budget that can be
not have an identified source of funding. In reappropriated.
FY 2010, this project was funded by the
Council contingency and was also absorbed by
the Planning Department budget. There is
remaining budget from the Destination Palo
Alto contract in FY 2010. Part of this
remaining amount is being proposed to be
reappropriated to the High Speed Rail Proiect.
$40,000 . Development Center This reappropriation is being requested for Recommended $40,000. There is
Restructuring Project contract services related to the restructuring at sufficient balance in the Fiscal Year
the Development Center. Although it was 2010 budget that can be
mandated by the City Council, this project does reappropriated.
not have a designated budget. There is
remaining budget from the Destination Palo
Alto contract in FY 2010. Part of this
remaining amount is being proposed to be
reappropriated to help complete this project.
Page I of 4
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Administrative Services
~50,OOO Special Studies This reappropriation is being requested for the Recommended S50,000. There is
, funding of special studies that arise related to sufficient balance in the Fiscal Year
the Stanford Expansion, Palo Alto Airport, 2010 budge! that can be
Cable Franchising, or other projects as reappropriated,
necessary, The budget for contract services in
FY 2011 is entirely comprised of funding for
specific identified contracts, leaving no room
for unanticipated contracts, This
, reappropriation allows for funding for
i
assistance on special projects related to the
City's finances, .
Utilities Department-Electric Fund
$2,000,000 Electric Efficiency . This reappropriation is being requested to fund Recommended $2,000,000. There is
Financing Program an electric efficiency financing program for sufficient balance in the Fiscal Year
nonresidential customers through a third party 2010 budget that can be
contractor, On December 7, 2009, Council reappropriated,
approved using up to $_2,000,000 from the I
Calaveras Reserve to develop this four-year
pilot program (CMR 430:09), It was Council's
intent that these funds be used for a four-year
program and rolled over throughout the length
of the program, The contract is expected to be
signed by June 30, 2010, The program will
begin in Fall 2010.
$459,700 Customer rebates for This reappropriation is being requested to fund Recommended $459,700. There is ,
energy efficiency customer rebates for completion of energy sufficient balance in the Fiscal Year
projects efficiency projects. A very large number of 20 I 0 budget that can be
energy efficiency projects are either committed reappropriated,
or projected to be completed, while only a
small percentage of projects have been
completed to dale, Actual payment of rebates
will occur as the projects are completed in FY
2011. These energy efficiency projects support
Council's environmental sustainability
objectives.
:
Page 2 of4
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
$300,000 Customer rebates for This reappropriation is being requested to fund Recommended $300,000. There is
solar electric customer rebates for the installation of sufficient balance in the Fiscal Year
(photovoltaic) systems photovoltaic systems. SB I r~quires California 20 I 0 budget that can be
electric utilities to offer incentives for solar reappropriated.
electric syslems installed on customer facilities
after January I, 2007. Because there is
uncertainty in knowing when a customer will
complete the solar installation, it is difficult to
match the rebate payments to each year's
program budget. The reason for this
reappropriation request is to caOJ: forward
funds from FY 2010 to FY 2011 to help cover
the large amount of pending rebates. Each year
$1,300,000 is budgeted for this program.
Between January 1,2007 and May 19,2010,
over $3,600,000 in rebates has been paid. The
program has reserved an additional $2.700,000
for pending applications.
Utilities Department-Water Fund
$54,000 Customer rebate This reappropriation is being requested for the Recommended $54,000. There is
program for customer rebate program for water/energy sufficient balance in the Fiscal Year
water/energy reduction reduction projects, The Santa Clara Valley 2010 budge! that canbe
projects Water District (SCVWD) currently offers reappropriated.
rebates for innovative water/energy reduction
projects through the existing Water Efficiency
Technology program. The goal oflhe program
is to encourage individuals to implement
innovative projects that will result in cost·
effective water/energy savings. This
reapprorpriation is being requested to expand
the program in Palo Alto in coordination with
SCVWD,
Public Works Department-Storm Drainage Fund
$629,718 Storm Drain Innovative This reappropriation is baing requested for Recommended $629,718. There is
Improvements innovative storm drain improvements. These sufficient balance in the Fiscal Year
funds must be reappropriated because they 2010 budget that can be
have been specifically earmarked for reappropriated.
innovative stann drain improvements per the
2005 Storm Drainage ballot measure approved
by the Palo Alto property owners. These funds
have been budgeted for a storm water rebate
'program that offers incentives to residents and
businesses to reduce stormwater runoff.
However, the rebate program has not generated
sufficient demand to spend the funds. Staff
plans to utilize the unused funds in FY 20 I 1 for
an innovative storm drain jmprovement project
in the Southgate neighborhood.
Page 301'4
'.
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Administrative Serllices Department-Technology Fund
.
$94,000 Update of the City's This reappropriation is being requested for Recommended $94,000. There is
Information contract services related to .the update of the sufficient balance in the Fiscal Year
Teclmology Strategic City's Information Te<;bnology Strategic Plan. 2010 budget that can be
Plan This reappropriation is needed to supplement reappropriated.
the cost of the full project, which is to be
completed in FY 20 I I.
$100,000 Infrastructure This reappropriation is being requested for Recommended $100,000. There is
Replacement infrastructure server equipment purchases and sufficient balance in the Fiscal Year
computer purchases. Not all of the 2010 budget that can be
infrastructure server equipment could be reappropri ated.
purchased in FY 20J O. The FY 2011 budget is I not adequate to cover the cost of all the
necessary servers to adequately serve the
organization.
Page 4 of4
Excerpt from the minutes of July 6, 2010
ATTACHMENT B
FINANCE COMMITTEE
Regular Meeting
July 6,2010
Chairperson Chair Schmid called the meeting to order at 7:03 p.m. in the
Council Conference Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Schmid (Chair), Espinosa, Klein, Scharff
Absent: None
1. Oral Communications
2. Request to Preliminarily Approve Fiscal Year 2010 Reappropriations
Requests to be Carried Forward into Fiscal Year 2011
Lalo Perez, Director of Administrative Services spoke regarding the
reappropriations process. He said that encumbered amounts are reserved
funds per legal agreements. Unencumbered funds are for projects carried
forward into the next year. Staff is bringing the items carried over from FY
2010 to FY 2011 to the Finance Committee. He said that the Municipal Code
allows for preliminary approval of reapproprlations. He said the requested
amount for the General Fund was $185,000. About $95,000 of that was for the
High Speed Rail Project, $40,000 was for the Development Center Restructuring
Project, and $50,000 was for Special Studies out of the Administrative Services
Department. He said that for the Enterprise Funds had a reappropriations
amount of $3.4 million. This included a $2 million Electric Efficiency Financing
program that was previously approved by Council. Lastly there was the
Internal Service Fund totaling $194,000.
Chair Schmid said he wanted to know why 95% of the reappropriations were in
the Enterprise Funds. He said that many of them were for incentives and
rebates. He asked if customers were paying twice since the City offered
behavior based rebates, and then when City revenues drop because of the
rebate programs the rates are increased.
Assistant Director of Utilities Tom Auzenne spoke regarding the rebates. He
said that rebates were to encourage participation in a program. The bills would
then go up for everyone else. The individual participant's bill lowers, thus
incenting them to take action.
Chair Schmid said the community was paying at least a portion of the rate
increase so the average rate payer paid twice for the same goal. He asked why
they didn't simply raise rates which would encourage people to waste less
without the double payment.
Mr. Auzenne said the participant would benefit but the rest of the community
would not with that program.
MOTION: Council Member Scharff moved, seconded by Council Member
Council Member Klein that the Finance Committee recommend that the City
Council preliminarily approve the Fiscal Year 2010 reappropriations to be
carried forward into Fiscal Year 2011.
MOTION PASSED: 4-0
.f
September 13, 2010
The Honorable City Council
Palo Alto, California
Finance Committee Recommendation to Accept the City
Auditor’s Office Fiscal Year 2011 Work Plan
At its meeting on July 20, 2010, the Finance Committee unanimously recommended to the City
Council acceptance of the Auditor’s Office 2010 Work Plan. The Auditor’s Office will be issuing
quarterly reports describing the status and progress of the work plan.
Respectfully submitted,
Lynda Flores Brouchoud
City Auditor
Attachments:
City Auditor’s Fiscal Year 2011 Work Plan and City Wide Risk Assessment
July 20, 2010 Finance Committee Minutes (Excerpt)
CITY OF PALO ALTO
OFFICE OF THE CITY AUDITOR
City Auditor’s FY 2011 Work Plan Page 1 of 4 July 20, 2010
July 20, 2010
Honorable City Council
Attention: Finance Committee
Palo Alto, California
City Auditor’s Fiscal Year 2011 Work Plan and Citywide Risk
Assessment
RECOMMENDATION
The City Auditor’s Office recommends that the Finance Committee review and recommend to the
City Council approval of the City Auditor’s Fiscal Year (FY) 2011 Work Plan.
BACKGROUND
The mission of the City Auditor’s Office is to promote honest, efficient, effective and fully
accountable City government. To fulfill this mission, the Auditor’s Office conducts audits and
examinations of City departments, programs, and services. The purpose of these audits and
examinations is to provide the City Council and City management with information and evaluations
regarding the effectiveness and efficiency with which City resources are employed, the adequacy of
systems of internal controls, and compliance with City policies and procedures and regulatory
requirements.
The Palo Alto Municipal Code requires the City Auditor to submit an annual plan to the City Council
for review and approval. This report presents the City Auditor’s Work Plan for FY 2011.
As part of our annual review of potential audit subjects, we solicit audit suggestions from City
Council members, members of the public, and staff. We also use information from the City’s
adopted operating and capital budgets and financial statements to prepare a spreadsheet model of
potential audit subjects. The model, called the “Citywide Risk Assessment,” helps prioritize audit
work by comparing the following ten factors: proposed 2011 expenditures, three-year expenditure
trend, fund type, proposed five-year capital expenditures, estimated 2011 revenue, three-year
revenue trend, number of staff (budgeted full time equivalents), fund balance, audit requests, and
date of last audit. The results of the Citywide Risk Assessment are attached (see Attachment B).
DISCUSSION OF PROPOSED AUDIT ASSIGNMENTS
The list of proposed assignments for FY 2011 includes a mix of audits and special projects that
address a wide range of concerns and are consistent with the City Auditor’s areas of responsibility.
Of the top ten highest risk areas identified by our Citywide Risk Assessment, the Utilities
CITY OF PALO ALTO
OFFICE OF THE CITY AUDITOR
City Auditor’s FY 2011 Work Plan Page 2 of 4 July 20, 2010
Department had the highest risk, with five of the top ten risk areas (see Attachment B). Last year’s
work plan included the Utilities Department in our list of audit projects, and had not been started
due to limited staff resources. In May, the Finance Committee recommended adding a senior
auditor position to provide on-going and continuous audits of Enterprise Fund activities, with a
primary focus on Utilities. City Council approved their recommendation in the FY 2011 budget. The
Auditor’s Office is in the process of recruiting for this position and will be initiating the Utilities
Department audit this month.
The current work plan covers the remaining top ten risk areas, with the exception of the Human
Resources Department and General Benefits and Insurance Fund. Based on the risk assessment,
we would recommend this area as a new audit for FY 2011. There are also new projects
recommended by the Finance Committee, as noted in the following descriptions. We have included
an outline summary of the proposed work plan, along with the affected City departments (see
Attachment A).
We welcome your comments and suggestions to help ensure we prioritize our work plan to meet
the City Council’s needs. Following is a description of each of the projects.
AUDIT ADMINISTRATION, FOLLOW-UP, AND OTHER RESPONSIBILITIES:
1. Annual Audit Work Plan and Quarterly Status Reports – The Auditor’s Office submits
quarterly reports to the City Council outlining project status and progress towards completing
the assignments on the annual work plan.
2. Annual Audit Recommendation Status Report – The Municipal Code requires the City
Auditor to issue an annual report on the implementation status of recommendations from
completed audits. We also meet with departments during the year to discuss progress
towards implementing open audit recommendations.
REVENUE AUDITS:
3. Sales Tax Allocation Reviews (on-going) – Sales tax represents about 15 percent, or $18
million, of projected General Fund revenue for FY 2011. We contract with MuniServices for
quarterly sales tax audit and information services, and we also conduct sales tax audits in-
house. The purpose of these audits is to identify misallocations of local sales tax. In addition,
MuniServices prepares the quarterly sales tax information reports that are provided to the City
Council as information items.
4. Alternative Fuel Tax Credit Recoveries – As part of the Auditor’s Office continuous revenue
monitoring efforts and preliminary findings from the vehicle audit, the Auditor’s Office initiated
revenue recoveries from the Federal government’s alternative fuel tax program. There is a
six-month period of recoveries from FY 2010 to file during FY 2011.
FINANCIAL AUDITS AND PROCEDURAL REVIEWS:
5. Annual External Financial Audit (contracted audit service) – The City Charter requires that
the City Council engage an independent certified public accounting firm (currently Maze &
Associates) to conduct an annual external audit. Target date for completion of the audit of the
June 30, 2010 financial statements: Dec-2010
6. SAP Account Sampling (in-process) – The City implemented the SAP system and
upgrades to serve as an enterprise management system for a variety of key financial
City Auditor’s FY 2011 Work Plan Page 3 of 4 July 20, 2010
information and transactions including payroll, utility billing, procurement and financial
transactions. The purpose of these reviews will be to provide continuous monitoring and
sampling of accounts within the SAP system to test for internal controls and to identify
efficiencies and cost savings. Target date: TBD
PERFORMANCE AUDITS AND SPECIAL PROJECTS:
7. Annual Service Efforts and Accomplishments (SEA) Report (annual) – This will be the 9th
annual SEA report. The purpose of SEA reporting is to strengthen public accountability and
help improve government efficiency and effectiveness. Palo Alto’s SEA report provides data
about the costs, quality, quantity, and timeliness of City services. It includes a variety of
comparisons to other cities, and the results of an annual citizen survey (the National Citizen
Survey). Target date: Jan-2011
8. Citywide Cash Handling (in process) - on July 7, 2008, the City Council voted to have the
City Auditor study Citywide cash handling and travel reimbursements, oversight procedures,
and the City Auditor’s history of audits on cash services. Target date: Sept-2010
9. Prospective Analysis of Bond Measure Proceeds (in process) – Through the 2008 voter-
approved Measure N, the City issued general obligation bonds to rebuild the Mitchell Park
Library and adjacent community center, and renovate the Main and Downtown libraries. This
audit will evaluate controls for the use of the general obligation bond funds to ensure the funds
are used efficiently and in compliance with federal regulations for the use of tax-exempt bond
funds. Target date: Sept-2010
10. Audit of Purchasing Card Transactions (in-process) – The purpose of this audit is to
determine the adequacy of controls over purchasing card transactions, and to assess
compliance with existing guidelines and procedures. Target date: TBD
11. Utilities Department (in-process) – Several of the highest risk areas identified in the Citywide
Risk Assessment pertain to the Utilities Department. This audit will conduct a preliminary
survey of the Utilities Department and develop an audit scope to identify opportunities for
improvements in efficiency and effectiveness. Target Date: TBD
12. Wastewater Treatment Fund (carryover) – The Regional Water Quality Control Plant
provides services to Mountain View, Los Altos, Los Altos Hills, Stanford, and East Palo Alto.
With proposed revenues of $20.6 million, proposed expenditures of $21.3 million, this is one of
the areas consistently targeted by our annual citywide risk assessment model. The purpose of
our audit would be to review the cost-sharing agreements and allocation of charges to partner
agencies. Target date: TBD
13. Planning and Community Environment Development Permit Process (carryover) – Two of
the top ten risk assessment areas pertain to the Development Center Services and Planning
and Community Environment Department. In FY 2010, Council requested the Auditor’s Office
review the permit process to identify opportunities for efficiency and effectiveness.
Simultaneously, the City Manager and Department also initiated efforts to study the permit
process and identify improvements. Because these staff improvements are in-process, the
City Manager has requested a temporary deferral of this audit to coordinate the audit work
with Staff’s improvement efforts.
City Auditor’s FY 2011 Work Plan Page 4 of 4 July 20, 2010
NEW PROJECTS
14. Audit of Fleet Purchases (NEW) – As a result of the April 2010 Audit of Fleet Utilization and
Replacement, the Finance Committee recommended the City Auditor review the City’s fleet
purchases to assess whether the City is purchasing appropriately-sized vehicles at the lowest
available cost.
15. Follow-up Recommendation Status on the 2010 Audit of Fleet Utilization and
Replacement (NEW) – As a result of the April 2010 Audit of Fleet Utilization and
Replacement, the Finance Committee directed the Public Works Department to return in
January 2011 with an assessment of their implementation of the audit recommendations. The
Finance Committee directed the City Auditor’s Office to identify any audit recommendations
staff was not adequately implementing.
16. Human Resources Employee Benefits (NEW) – Two of the top ten risk assessment areas
pertain to the Human Resources Department and employee benefits. In FY 2011, the
projected benefit costs are expected to be over $43 M. This audit would review benefit
oversight, costs and administration through the Human Resources Department.
17. Request for Proposals (RFP) for the External Financial Auditor Contract (NEW) – the
City’s Charter requires the City Council to engage a certified public accounting firm to conduct
the City’s annual financial statement audit and also requires the City Auditor to coordinate the
audit. The City’s contract with the current vendor expires in FY 2011.
NEXT STEPS
After discussing the proposed Work Plan with the Finance Committee, we will ask the City Council
to approve the FY 2011 Work Plan in September. Meanwhile, we are continuing work on in-
process items from the FY 2010 Work Plan.
As audit work proceeds, we issue quarterly reports describing the status and progress towards
completing each of the approved assignments. The quarterly reports are issued to the City Council
and discussed at the Finance Committee. Generally, audit reports are heard at the committee level
(either by the Finance Committee or the Policy and Services Committee) unless the item is
considered to be of interest to the full City Council.
Respectfully submitted,
Lynda Flores Brouchoud
City Auditor
Attachment A: FY 2011 Work Plan Summary
Attachment B: Citywide Risk Assessment Model
Audit assistance: Davina The, Performance Audit Intern
ATTACHMENT A
FY 2011 WORK PLAN SUMMARY
AUDIT ADMINISTRATION, FOLLOW-UP, AND OTHER RESPONSIBILITIES:
1. Annual Audit Work Plan and Quarterly Status Reports
2. Annual Audit Recommendation Status Report
REVENUE AUDITS:
3. Sales Tax Allocation Reviews
4. Alternative Fuel Tax Credit Recoveries
PROCEDURAL REVIEWS:
5. External Financial Audit
6. SAP Account Sampling
PERFORMANCE AUDITS AND SPECIAL PROJECTS:
In process
7. Annual Service Efforts and Accomplishments (SEA) report
8. Citywide Cash Handling
9. Prospective Analysis of Bond Measure Proceeds
10. Audit of Purchasing Card Transactions (Citywide/ASD)
Carried over from FY 2010 Work Plan
11. Utilities Department
12. Wastewater Treatment Plant Cost Allocations (PWD)
13. Planning and Community Environment Development Permit Process
New for FY 2011
14. Audit of Fleet Purchases
15. Follow-up Recommendation Status on the 2010 Audit of Fleet Utilization and
Replacement
16. Human Resources Employee Benefits
17. Request for Proposals (RFP) for the External Financial Auditor Contract
ATTACHMENT C
FINANCE COMMITTEE - EXCERPT
Regular Meeting
Tuesday, July 20, 2010
Chairperson Schmid called the meeting to order at 7:02 p.m. in the Council
Conference Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Schmid (Chair), Espinosa, Klein (arrived at 7:03), Scharff
Absent: none
4. City Auditor’s Fiscal Year 2011 Work Plan and Citywide Risk Assessment.
Lynda Brouchoud City Auditor said that the City Auditor’s Office assembles a
workplan through a risk assessment based on programs contained in the City’s
proposed budget. She also asked the City Council, City Manager, and City
Attorney to provide requests. She discussed administrative, follow-up, revenue
and financial audits on the workplan. Additionally the workplan included
performance audits which she said were a good focus for the Finance
Committee to provide direction. Three items were carried over from FY 2010
which included the Utilities Department, Wastewater Treatment Fund, and the
Planning and Community Environment Development Permit Process. The
Planning and Community Environment Development Permit Process was
deferred at the request of the City Manager since the department is in the
process of making improvements in this area.
She said that four new audit projects have been added, two were at the request
of the Finance Committee; Fleet Purchases, Recommendation Status on Fleet
Utilization and Replacement, Human Resources Employee Benefits, and Request
for Proposals for the External Finance Auditor Contract. She said that some
projects were more in-depth than others such as the Utilities Department Audit
which will be a larger audit because of its scope.
Vice Mayor Espinosa asked about the items on the Citywide Risk Assessment.
He said he wanted to understand the items that fell below the line of projects
the City Auditor considered such as the Refuse Fund.
Ms. Brouchoud said the model was Staff’s attempt to identify projects they
could audit. They looked at the ten riskiest programs for audit coverage. Some
items that didn’t get in the top ten are still important in terms of risk and the
ATTACHMENT C
Refuse Fund was still higher on the list. If the Committee had concerns and
wanted an audit in that area the workplan can be amended. In terms of
areas that were above the line, the Utilities functions were very prevalent due
to the high revenue trends, expenditure trends, and staffing levels. She said it
would be important to begin the Utilities Audit and to use the audit to define
future audits. She said that for Planning, which was number 12 on the risk
assessment, they had a pending audit in the workplan. She said this was
Staff’s best attempt to cover the needs. Staff did not cover topical items as the
focus was on items in the budget.
Council Member Schmid asked about the broad range and long time line for the
Utilities Audit. He said that the Cash Handling Audit had been two years with
many of the audit recommendations already implemented by the time they
were made. He expressed concern about this happening with Utilities. He
asked what Staff thought about performing a series of shorter, more focused
audits instead.
Ms. Brouchoud said that if Staff knew specifically which focused concerns the
Finance Committee had, they could focus the audit appropriately. She said the
audit would start with a preliminary survey to determine different functions in
utilities and to identify risks. They will address findings as they are discovered.
She said they would appreciate guidance on the Finance Committee’s
preferences.
Council Member Schmid said that the Cash Handling Audit was in process for
two years before results were shared with the Committee.
Ms. Brouchoud said that Audit began in March of 2009. Since then Staff
assigned to the audit had also completed the Telephone Audit, the SEA Report,
and Quarterly Reports. She said that with a small Staff there were starts and
stops to projects.
Council Member Schmid suggested the initial position for the Utilities Audit was
the Enterprise Fund. This leaves out the IT Operations and the Refuse Fund.
Mr. Perez said technically IT was an internal services fund, but it could be
audited.
Ms. Brouchoud said Staff was following the Committee’s direction to have an
auditor position to audit the Enterprise Fund activities with a primary focus on
Utilities. There were other items on the Risk Assessment that involve other
areas of the Enterprise Funds. Other items could be added to the Workplan.
ATTACHMENT C
Council Member Schmid said that his concern was that Utilities was going
through some changes and implementing a long-term audit would be
inefficient.
Ms. Brouchoud cited an example using the Planning and Community
Environment Development Permit Process Audit that was deferred because the
department was undertaking a significant change in the audited area. Given
the size and variety of functions in the Utilities Department, she did not
anticipate this would happen.
Council Member Schmid said that to avoid the issue there could be check in
points with the Finance Committee.
Vice Mayor Espinosa said there should be with the Quarterly Updates.
Council Member Schmid but those updates were just that they were working on
it, but not detailed.
Vice Mayor Espinosa said that looking at complex departments a detailed
update would be difficult.
Ms. Brouchoud agreed. She said that based on findings during the initial field
work, staff had to expand some of the audit testing, which makes it difficult to
predict. And the findings are confidential until vetted with the department and
reported.
Vice Mayor Espinosa discussed the “To Be Determined” dates listed on the
Workplan. He suggested that Staff could be more specific even if the date is
pushed back because of other projects. He said this would provide a realistic
expectation and level of transparency.
Council Member Scharff agreed and added that it would help the Finance
Committee better understand the Staff workloads.
Ms. Brouchoud agreed and said she would implement the process.
Mr. Perez said that the departments also play a role in the audit process with
their response times. Additionally every audit finds something that it is vetted
and a plan is formed. He said that the plan needs to include the priories based
on what Staff can accomplish. He said that of 17 audits, 11 of them fell under
his jurisdiction plus partial impacts from other audits, plus new tasks issues by
Council, plus the standard workload created a situation where the City Auditor
ATTACHMENT C
may complete the audit, but the departments still need to be able to implement
the process.
Ms. Brouchoud said that once a year the Audit Recommendation Status is
completed with department’s feedback.
Vice Mayor Espinosa asked about the Refuse Fund, he wanted clarification that
the City Auditor recognized the concern, but because of impending changes
such as the rate structure change, it should be potentially reprioritized at a
later date.
Ms. Brouchoud said that if the scope of interest for an audit is broader than the
rate structure scope staff is in the process of completing, then an audit could be
put on the workplan now, otherwise the Committee may want to postpone
adding the audit until the rate structure study is completed. She would like
more information on the scope of the rate structure study to provide further
information.
Vice Mayor Espinosa said they could discuss that at a later date.
Ms. Brouchoud said it could be added, it just has to be coordinated with Staff.
She said that it would also be helpful to have some recommended prioritization
of the carried over items on the Workplan.
MOTION: Council Member Vice Mayor Espinosa moved, seconded by Council
Member Scharff, that the Finance Committee recommends to the City Council
approval of the City Auditor’s Fiscal Year 2011 Work Plan.
Council Member Scharff asked if the Workplan was listed in priority order.
Ms. Brouchoud said they were ordered by topic area. She suggested the
Finance Committee review items 12-17 to provide feedback on the Committee’s
priority areas.
Council Member Scharff said the Fleet Purchase Audit would be a high priority.
He thought it would be the same as the follow-up with the Fleet Purchases
Audit.
Ms. Brouchoud said the Fleet Purchases Audit would be a new audit as the
procurement process had not been looked at. The follow-up would be looking
at the prior fleet audit recommendations made regarding replacement criteria
and utilization.
ATTACHMENT C
Council Member Scharff said that the Planning Process Audit would be a priority
once the currently planned changes were implemented. He asked about the
External Auditor contract.
Ms. Brouchoud said it was a requirement, so they had to include it on the work
plan.
Council Member Scharff asked what was being audited for the Waste Water
Treatment Audit.
Ms. Brouchoud said it was a review of the cost allocation agreement with
partner agencies.
Council Member Scharff asked where more savings could be found between the
Waste Water Audit and the Human Resources Audit.
Ms. Brouchoud said from a dollar amount perspective, given the cost of the
benefits, the Human Resources Audit might be able to provide more cost
savings.
Council Member Scharff asked for the City Auditor’s recommendation.
Ms. Brouchoud said she would probably look at the higher dollar value first.
Council Member Scharff said that would be his recommendation as well.
Council Member Klein said it should be left to the City Auditor’s discretion. But
he disagreed that it should be solely dollar based. Management Audits don’t
necessarily net much money but were very important. Benefits had become
very important and thus a high priority. The task was to create a government
that produces the best services perfectly efficiently. The City Auditor’s
evaluation of the Waste Water Treatment Plant would be very valuable.
Council Member Schmid said the Waste Water Plant and Planning and
Development were both changing and thus should be delayed. This left
Utilities, which should then be prioritized. Secondly a critical audit would be the
Employee Benefits Audit. Providing oversight over investments was critical. He
added there was no mention of the Fire Department.
MOTION PASSED 4-0.
September 13, 2010
The Honorable City Council
Palo Alto, California
Finance Committee Recommendation to Accept the City
Auditor’s Office Quarterly Report as of June 30, 2010
At its meeting on July 20, 2010, the Finance Committee unanimously recommended to the City
Council acceptance of the Auditor’s Office Quarterly Report as of June 30, 2010. Excerpt of
minutes of the meeting are attached.
Respectfully submitted,
Lynda Flores Brouchoud
City Auditor
Attachments:
Auditor’s Office Quarterly Report as of July 20,2010
Finance Committee Minutes of July 20, 2010 (Excerpt)
CITY OF PALO ALTO
OFFICE OF THE CITY AUDITOR
Auditor’s Office Quarterly Report Page 1 As of June 30, 2010
July 20, 2010
The Honorable City Council
Attention: Finance Committee
Palo Alto, California
Auditor’s Office Quarterly Report as of June 30, 2010
RECOMMENDATION
The City Auditor’s Office recommends the Finance Committee review and recommend to the City
Council acceptance of the Auditor’s Office Quarterly Report as of June 30, 2010.
SUMMARY OF RESULTS
In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues
quarterly reports to the City Council describing the status and progress towards completion of the
work plan. This report provides the City Council with an update on the fourth quarter activities and
summarizes our Fiscal Year (FY) 2010 Work Plan activities. Information on the status of each
assigned project is attached (pages A-1 through A-5).
Completed Projects and Accomplishments
During FY 2010, the City Auditor’s Office issued the following reports to the City Council:
Audit of Fleet Utilization and Replacement (Apr-2010)
Internal Controls Review of SAP Upgrades and Utilities Module Implementation (Feb-
2010)
Palo Alto’s first Citizen-Centric Report (Jan-2010)
Geographic Subgroup Comparisons from the 2009 National Citizen Survey Results (Jan-
2010)
8th Annual Service Efforts and Accomplishments Report for Fiscal Year 2009 (Dec-
2009)
Maze & Associates Audit of the City of Palo Alto’s Financial Statements as of June 30,
2009 and Management Letter (Dec-2009)
Status of Audit Recommendations (Oct-2009)
Annual Audit Work Plan with Risk Assessment (Oct-2009)
Review of City Telephone Rates and Charges (Sept-2009)
Audit of Police Investigative Fund (Jul-2009)
Quarterly summaries on Palo Alto sales and use tax receipts
Quarterly progress reports summarizing audit progress towards our annual work plan,
revenue recoveries and accomplishments.
CITY OF PALO ALTO
OFFICE OF THE CITY AUDITOR
Auditor’s Office Quarterly Report Page 2 As of June 30, 2010
In addition, the City Auditor’s Office completed the following projects:
Sales and Use Tax Allocation Reviews (the City received $135,118 in recoveries from
our in-house and contracted sales and use tax monitoring)
Alternative Fuel Tax Credit Revenue Monitoring (the City received $123,368 in
recoveries)
The City Auditor’s Office received and followed up on 3 public inquiries.
To date, the City Auditor’s Office revenue recoveries and other audit savings have resulted in a total
estimated economic benefit of $3.3 million for FY 2010. Our overall economic benefit to cost ratio
was 3.3:1, including budgeted costs for performance audits, financial audits, consultants, and
overhead costs. The City’s FY 2011 Adopted Operating Budget included an additional $3.9 million
in reductions related to the implementation of audit recommendations. The majority of these
reductions ($3.2 million) were for fleet replacements; actual savings will be reduced by the amount
of fleet purchases during the coming year.
In FY 2010, the City Auditor’s Office received three national awards for our work. Specifically, the
Association of Local Government Auditors awarded their Bronze Knighton Award for the Auditor’s
Office September 2009 Review of Telephone Rates and Charges. The Association of Government
Accountants (AGA) awarded their Gold Award for the FY 2009 Service Efforts and
Accomplishments Report and their Certificate of Excellence in Citizen-Centric Reporting for Palo
Alto’s first Citizen-Centric Report. These awards are AGA’s highest report distinctions and put Palo
Alto in the top cities nationally for transparency and accountability in performance reports.
Our completed projects also resulted in improvements to City programs. During our
recommendation follow-up process in October 2009, we found departments had implemented 45%
of open audit recommendations. A more detailed analysis of the FY 2010 audit recommendations
will be completed with our annual Status of Audit Recommendations report anticipated in the fall.
In-process Projects
The following projects are in-process:
Audit of Citywide Cash Handling
Prospective Analysis of Bond Measure Proceeds
Audit of Purchasing Card Transactions
SAP Account Sampling
In addition to the in-process projects, the following projects will be carried over into FY 2011:
Utilities Department
Wastewater Treatment Fund
Planning and Community Development Permit Process (temporarily deferred to provide City
Manager and Department time to implement program improvements and coordinate their
progress with the audit work).
Community Outreach and Other Information
The Auditor’s Office conducted community outreach about the Service Efforts and
Accomplishments (SEA) Report, the Citizen-Centric Report, and the activities and role of
the Auditor’s Office, meeting with the Chamber of Commerce, the Palo Alto neighborhoods
(PAN), and the local chapter of the Association of Government Accountants.
Houman Boussina, Senior Auditor, joined the City Auditor’s Office in June 2010 to fill the
vacant position due to retirement.
The Fiscal Year 2011 Budget includes approval for a new senior auditor to provide
continuous and on-going audits of Utilities and Enterprise Fund activities. We have begun
Auditor’s Office Quarterly Report Page 3 As of June 30, 2010
the hiring process to fill this new position.
Two volunteer summer interns, Davina The and Victor Vallejo, joined the City Auditor’s
Office to assist in audit work and learn about our audit process.
On behalf of the City Auditor’s Office, I would like to express my appreciation to City staff for their
cooperation and assistance during our reviews throughout this past year.
Respectfully submitted,
Lynda Flores Brouchoud
City Auditor
Attachment:
Status of Audit Projects as of June 30, 2010
City Auditor’s Quarterly Report A – 1 As of June 30, 2010
Status of Audit Projects as of June 30, 2010
Original Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Items to be Completed
AUDIT ADMINISTRATION, FOLLOW-UP, AND OTHER RESPONSIBILITIES
1) Annual Audit Work Plan and Quarterly Status Reports – The
Auditor’s Office submits quarterly reports to the City Council outlining
project status and progress towards completing the assignments on
this annual work plan.
Completed FY 2010 Work Plan completed.
First, second, third, and fourth quarterly
status reports completed.
2) Annual Audit Recommendation Status Report – The Municipal
Code requires the City Auditor to issue an annual report on the
implementation status of recommendations from recently completed
audits. We also meet with the departments involved during the year to
discuss progress towards implementing open audit recommendations.
Completed Report issued October 2009.
The report summarized the status of 83
audit recommendations from 14 different
reports (63 carried over and 20 new
recommendations). The report determined
that 37 (45%) of the audit recommendations
were completed or resolved, 37 (45%) were
in-process, and 9 (11%) were not started.
3) Meeting Attendance – To facilitate internal communication and
coordination of efforts, the City Auditor attends:
a. City Manager’s weekly executive leadership team meetings and
budget meetings.
b. Utility Risk Oversight and Coordinating Committee (UROCC
Meetings) – Since issuance of our Assessment of Utility Risk
Management Procedures in July 2002, the City Auditor has
acted as an advisor to the UROCC.
On-going
On-going
City Auditor’s Quarterly Report A – 2 As of June 30, 2010
Original Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Items to be Completed
REVENUE AUDITS AND MONITORING
4) Sales and Use Tax Allocation Reviews – Sales and use tax
represented about 14%, or $19.65 million, of projected General Fund
revenue in the City’s Adopted Operating Budget for FY 2010.
According to the Administrative Services Department (ASD), projected
sales and use tax revenue has declined significantly and is now
estimated at $17.2 million for FY 2010.
The Auditor’s Office contracts with MuniServices for quarterly sales and
use tax recovery and information services, and we also conduct sales
and use tax monitoring in-house. The purpose of this monitoring is to
identify misallocations of local sales and use tax for companies doing
business in Palo Alto. In addition, MuniServices prepares the quarterly
sales and use tax information reports that are provided to the City
Council as informational items.
The contract with MuniServices has been renewed until March 2011.
On-going
In the first quarter of FY 2010, the City
received $31,121 in sales and use tax
recoveries related to misallocation of tax
from 4 companies.
In the second quarter of FY 2010, the City
received $62,118 in sales and use tax
recoveries related to the misallocation of tax
from 4 companies.
In the third quarter of FY 2010, the City did
not receive sales and use tax recoveries
although there were potential misallocations
pending resolution.
In the fourth quarter of FY 2010, the City
received $28,669 in sales and use tax
recoveries related to the misallocation of tax
from 5 companies.
During FY 2010, the City received an
additional $13,210 in recoveries related to
new businesses.
Moreover, potential misallocations from
37 companies (11 MuniServices and 26
City of Palo Alto) are pending resolution by
the State Board of Equalization.
Note: In July 2010, the State Board of
Equalization advised us they have a 9-
month backlog in processing inquiries.
Total Sales and Use Tax Recoveries:
FY 2010 $135,118
(MuniServices- $36,166 and the City
Auditor’s Office - $98,952)
City Auditor’s Quarterly Report A – 3 As of June 30, 2010
Original Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Items to be Completed
5) Alternative Fuel Tax Credit Recoveries – As part of the Auditor’s
Office continuous revenue monitoring efforts and preliminary findings
from the Audit of Fleet Utilization and Replacement, the Auditor’s Office
initiated revenue recoveries from the Federal government’s alternative
fuel tax program, which was in effect through December 31, 2009.
Extensions have not yet been determined.
On-going The Auditor’s Office worked with ASD,
Utilities, and our revenue consultant to file
claims for the alternative fuel tax credit.
The City received $123,368 in recoveries
during the second quarter.
6) Unclaimed Property Recoveries – The State of California acquires
unclaimed property through State law which requires businesses to
annually report and deliver property after there has been no customer
contact for three years.
On-going The Auditor’s Office worked with ASD to file
five claims for unclaimed property with the
State. The City received $1,074 in
recoveries during the second quarter.
FINANCIAL AUDITS AND PROCEDURAL REVIEWS
7) Annual External Financial Audit (contracted audit service) – The
City Charter requires that the City Council engage an independent
certified public accounting firm to conduct the annual external audit.
FY 2009
Completed
The FY 2009 audited financial statements
were issued in December 2009.
Maze & Associates began interim audit
work in March to prepare for the audit of the
June 30, 2010 financial statements.
8) Internal Controls Review of SAP Upgrades and Utilities Module
Implementation – The City’s SAP upgrade is occurring in two phases –
Phase I on Employee Self-Service/Management Self-Service and
Phase II on Utilities. Phase I was completed July 2008. The Auditor’s
Office reviewed general controls throughout the upgrades.
Completed
Report issued February 2010 (attachment
to the Auditor’s Office Quarterly Report as
of December 31, 2009).
9) SAP Account Sampling (NEW) – The City implemented the SAP
system and upgrades to serve as an enterprise management system for
a variety of key financial information and transactions including payroll,
utility billing and financial transactions. The purpose of these reviews
will be to sample accounts within the SAP system to test for internal
controls and efficiencies.
In process Preliminary survey in process. Target completion date:
TBD
City Auditor’s Quarterly Report A – 4 As of June 30, 2010
Original Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Items to be Completed
10) American Reinvestment and Recovery Act (ARRA) Monitoring
(NEW) – President Obama signed the ARRA in February 2009,
providing approximately $787 billion in federal stimulus grant funds,
including $144 billion for state and local fiscal relief. The ARRA
requires unprecedented accountability and transparency of the grant
funds. The Auditor’s Office will identify best practices and internal
controls to share with departments receiving ARRA funds.
Completed During the first quarter, the Auditor’s Office
developed a self-assessment checklist
consistent with specific expectations and
compliance requirements of the ARRA.
During the second quarter, the City
Manager’s Office distributed the checklist to
each department program awarded ARRA
funding. Three departments had been
awarded stimulus funds totaling $1,931,477.
The department responses did not note
any significant internal control weaknesses.
PERFORMANCE AUDITS AND SPECIAL PROJECTS
11) Annual Service Efforts and Accomplishments (SEA) Report Completed The 8th annual SEA Report was issued in
December 2009.
In January 2010, the Auditor’s Office issued
our first Citizen-Centric Report (CCR). The
CCR is a concise four-page summary of
Service Efforts and Accomplishments
Report highlights, financial data, and an
overview of Palo Alto's economic outlook.
12) Audit of Fleet Utilization and Replacement – The purpose of this
review is to evaluate the efficiency and effectiveness of fleet and
equipment replacement and maintenance operations.
Completed Report issued April 2010.
13) Audit of Citywide Cash Handling - The purpose of this review is to
study Citywide cash handling and travel reimbursement, oversight
procedures, and the City Auditor’s history of audits on cash services.
In process Report writing in process. Target completion date:
September Finance
Committee
14) Prospective Analysis of Bond Measure Proceeds – Through the
2008 voter-approved Measure N, the City is preparing to issue general
obligation bonds to rebuild the Mitchell Park Library and adjacent
community center, and renovate the Main and Downtown libraries. This
audit will prospectively evaluate controls for the use of the general
obligation bond funds to ensure the funds are used efficiently and in
compliance with federal regulations for the use of tax-exempt bond
funds.
In process Field work in process. Target completion date:
Sept. 2010
City Auditor’s Quarterly Report A – 5 As of June 30, 2010
Original Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Items to be Completed
15) Audit of Purchasing Card Transactions – The purpose of this audit is
to determine the adequacy of controls over purchasing card
transactions, and to assess compliance with existing guidelines and
procedures.
In process Preliminary survey in process. Target completion date:
TBD
16) Utilities Department – Several of the highest risk areas identified in the
Citywide Risk Assessment pertain to the Utilities Department. This
audit will conduct a preliminary survey of the Utilities Department and
develop an audit scope to identify opportunities for improvements in
efficiency and effectiveness.
Not started In preparation for the audit, the Auditor’s
Office selected a consultant to provide
utilities expertise during the audit. For FY
2011, the City Council approved a Senior
Auditor position to provide on-going audits
of Enterprise Fund activity. Recruitment is
underway and we anticipate to begin this
audit within the next month.
Target completion date:
TBD
17) Wastewater Treatment Fund – The Regional Water Quality Control
Plant provides services to Mountain View, Los Altos, Los Altos Hills,
Stanford, and East Palo Alto. With proposed revenues of $22 million,
proposed expenditures of $20 million, this is one of the areas
consistently targeted by our annual citywide risk assessment model.
The purpose of our audit would be to review the cost-sharing
agreements and allocation of charges to partner agencies.
Not started Target completion date:
TBD
18) Planning and Community Development Permit Process (NEW) –
According to the 2007-08 SEA Report, Planning and Community
Development revenue increased 68%, the number of inspections
increased 71%, and the number of building permits issued decreased
6%. The Department has also implemented the new Green building
program and certifications. This audit will focus on the efficiency and
effectiveness of the permit process.
Not started Audit temporarily deferred to provide the
City Manager and Planning and Community
Development Department time to implement
program improvements and coordinate
scope of work with the audit.
Target completion date:
TBD
ATTACHMENT B
1
FINANCE COMMITTEE MINUTES - EXCERPT
Regular Meeting
Tuesday, July 20, 2010
Chairperson Schmid called the meeting to order at 7:02 p.m. in the Council
Conference Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Schmid (Chair), Espinosa, Klein (arrived at 7:03), Scharff
Absent: none
3. Auditors Office Quarterly Report as of June 30, 2010.
Lynda Brouchoud City Auditor spoke regarding the Quarterly Report. She
highlighted some of the projects completed during the year and said Staff had
tracked the economic benefits of the projects. Staff identified over $135,000
from Sales and Use Tax monitoring which was an increase over the previous
year. New revenues of $123,000 had been identified through the Federal
Alternative Fuel Tax Credit Recovery. Staff also identified $3.3 million in total
economic benefits for Fiscal Year (FY) 2010. The Auditor’s Office also released
the Recommendation Status Report In October 2009 of the Fiscal Year. She
said that 45% of the recommendations had been implemented and they are
now in the process to prepare a status report as of the end of FY 2010. During
the last Quarterly Report meeting another Auditor position was approved and
recruitment has begun to fill the position. She mentioned three national
awards the City received for the high quality of audit reports. She reviewed in-
process projects including the Audit of Citywide Cash Handling and Prospective
Analysis of Bond Measure Proceeds.
Council Member Scharff asked about the Fleet Replacement Audit. He said
there was a $3.2 million savings because the City had planned to not make any
purchases for FY 2010.
Ms. Brouchoud said for FY 2010 there was $2.5 million that was included in the
total.
ATTACHMENT B
2
Council Member Scharff said the CIP had been suspended for 2011.
Ms. Brouchoud said that for FY 2011 the Adopted Operating Budget had
reductions related to audit recommendations with $3.2 million related to the
suspension of the fleet replacement.
Council Member Scharff asked what the fleet status was.
Ms. Brouchoud said that currently the process is being reviewed. Public Works.
Administrative Services, and the City Manager’s Office have formed a Fleet
Review Committee. They are in the process of developing forms and criteria
the Auditor’s Office recommended to review requests for fleet additions and
replacements.
Mr. Perez said the Fleet Review Committee had two meetings, and they were
working on a form. First steps would be immediate procurement needs which
were being wrapped into the current review. For example, one vehicle request
for a one-time basis, was a vehicle request for the Art Center. The next step
will be overall review of the fleet.
Council Member Scharff asked about the form.
Mr. Perez said the process for checking out a vehicle was informal, and based
on the audit recommendations they were working on a form to document the
process.
Council Member Scharff asked about an exception being made by the Art
Center.
Mr. Perez said the Art Center received funding to purchase a vehicle. They
wanted to use existing budget to pay for maintenance. Additionally they
requested to not be charged replacement costs since it was not intended to be
replaced.
Glen Roberts Public Works Director agreed with the previous statements and
added that much work still needed to be completed by the Fleet Review
Committee. He said there were a number of underutilized vehicles, with many
to still review. Through recent budget changes there were additional vehicles
that were not being used and may be able to fold into the fleet for other uses.
He said the 2011 budget amount could best be used as a deferral.
ATTACHMENT B
3
Council Member Scharff asked about the SAP account sampling.
Ms. Brouchoud said it was recently started and is in process. Given the breadth
of the SAP system in terms of transaction amounts and the internal control
function, this audit was intended to take samples and test how the system is
working. She said they will report on that on a later date. For the Fleet Audit,
there would be a follow-up on the workplan.
Council Member Schmid asked about the status of Administration and Meeting
Attendance. He said the City Auditor was a part of the Utility Risk Oversight
Committee. He asked if there was anything the City Auditor would recommend
the Council be aware of.
Ms. Brouchoud said her involvement was advisory
Council Member Schmid asked if that Committee generated ideas about
potential audits.
Ms. Brouchoud said it did not.
Council Member Schmid asked about the audited data on the Annual
Comprehensive Financial Report. He said it was different than the budget data
and the SEA data. There had been some discussion about creating a sheet to
explain the discrepancies.
Ms. Brouchoud said the SEA Report was able to tie in the budget data and
reconcile it to the Comprehensive Annual Financial Report (CAFR). She said the
external Financial Auditor was discussing a bridge with the Administrative
Services Staff, so it was in progress.
Mr. Perez said that Maze & Associates had shown them a sample that would
help bridge the information and explain it better.
Council Member Schmid said the only historical data was the back of the CAFR.
He thought it would not coincide with the budget.
Ms. Brouchoud said the historical information is in the back of the CAFR and is
not typically part of the financial audit work Maze & Associates performas. She
said that would be something that Administrative Services Division Staff could
work on.
ATTACHMENT B
4
Council Member Schmid said his point was for bridging prior years.
Mr. Perez said the Committee could request Staff put that together.
Ms. Brouchoud added that when the audit is presented in December it might be
a good time to get that type of feedback.
MOTION: Council Member Klein moved, seconded by Council Member Scharff,
that the Finance Committee recommends to the City Council accept the
Auditors Office Quarterly Report as of June 30, 2010.
MOTION PASSED 4-0.
4. City Auditor’s Fiscal Year 2011 Work Plan and Citywide Risk Assessment.
Lynda Brouchoud City Auditor said that the City Auditor’s Office assembles a
workplan through a risk assessment based on programs contained in the City’s
proposed budget. She also asked the City Council, City Manager, and City
Attorney to provide requests. She discussed administrative, follow-up, revenue
and financial audits on the workplan. Additionally the workplan included
performance audits which she said were a good focus for the Finance
Committee to provide direction. Three items were carried over from FY 2010
which included the Utilities Department, Wastewater Treatment Fund, and the
Planning and Community Environment Development Permit Process. The
Planning and Community Environment Development Permit Process was
deferred at the request of the City Manager since the department is in the
process of making improvements in this area.
She said that four new audit projects have been added, two were at the request
of the Finance Committee; Fleet Purchases, Recommendation Status on Fleet
Utilization and Replacement, Human Resources Employee Benefits, and Request
for Proposals for the External Finance Auditor Contract. She said that some
projects were more in-depth than others such as the Utilities Department Audit
which will be a larger audit because of its scope.
Vice Mayor Espinosa asked about the items on the Citywide Risk Assessment.
He said he wanted to understand the items that fell below the line of projects
the City Auditor considered such as the Refuse Fund.
Ms. Brouchoud said the model was Staff’s attempt to identify projects they
could audit. They looked at the ten riskiest programs for audit coverage. Some
items that didn’t get in the top ten are still important in terms of risk and the
ATTACHMENT B
5
Refuse Fund was still higher on the list. If the Committee had concerns and
wanted an audit in that area the workplan can be amended. In terms of
areas that were above the line, the Utilities functions were very prevalent due
to the high revenue trends, expenditure trends, and staffing levels. She said it
would be important to begin the Utilities Audit and to use the audit to define
future audits. She said that for Planning, which was number 12 on the risk
assessment, they had a pending audit in the workplan. She said this was
Staff’s best attempt to cover the needs. Staff did not cover topical items as the
focus was on items in the budget.
Council Member Schmid asked about the broad range and long time line for the
Utilities Audit. He said that the Cash Handling Audit had been two years with
many of the audit recommendations already implemented by the time they
were made. He expressed concern about this happening with Utilities. He
asked what Staff thought about performing a series of shorter, more focused
audits instead.
Ms. Brouchoud said that if Staff knew specifically which focused concerns the
Finance Committee had, they could focus the audit appropriately. She said the
audit would start with a preliminary survey to determine different functions in
utilities and to identify risks. They will address findings as they are discovered.
She said they would appreciate guidance on the Finance Committee’s
preferences.
Council Member Schmid said that the Cash Handling Audit was in process for
two years before results were shared with the Committee.
Ms. Brouchoud said that Audit began in March of 2009. Since then Staff
assigned to the audit had also completed the Telephone Audit, the SEA Report,
and Quarterly Reports. She said that with a small Staff there were starts and
stops to projects.
Council Member Schmid suggested the initial position for the Utilities Audit was
the Enterprise Fund. This leaves out the IT Operations and the Refuse Fund.
Mr. Perez said technically IT was an internal services fund, but it could be
audited.
Ms. Brouchoud said Staff was following the Committee’s direction to have an
auditor position to audit the Enterprise Fund activities with a primary focus on
ATTACHMENT B
6
Utilities. There were other items on the Risk Assessment that involve other
areas of the Enterprise Funds. Other items could be added to the Workplan.
Council Member Schmid said that his concern was that Utilities was going
through some changes and implementing a long-term audit would be
inefficient.
Ms. Brouchoud cited an example using the Planning and Community
Environment Development Permit Process Audit that was deferred because the
department was undertaking a significant change in the audited area. Given
the size and variety of functions in the Utilities Department, she did not
anticipate this would happen.
Council Member Schmid said that to avoid the issue there could be check in
points with the Finance Committee.
Vice Mayor Espinosa said there should be with the Quarterly Updates.
Council Member Schmid but those updates were just that they were working on
it, but not detailed.
Vice Mayor Espinosa said that looking at complex departments a detailed
update would be difficult.
Ms. Brouchoud agreed. She said that based on findings during the initial field
work, staff had to expand some of the audit testing, which makes it difficult to
predict. And the findings are confidential until vetted with the department and
reported.
Vice Mayor Espinosa discussed the “To Be Determined” dates listed on the
Workplan. He suggested that Staff could be more specific even if the date is
pushed back because of other projects. He said this would provide a realistic
expectation and level of transparency.
Council Member Scharff agreed and added that it would help the Finance
Committee better understand the Staff workloads.
Ms. Brouchoud agreed and said she would implement the process.
Mr. Perez said that the departments also play a role in the audit process with
their response times. Additionally every audit finds something that it is vetted
ATTACHMENT B
7
and a plan is formed. He said that the plan needs to include the priories based
on what Staff can accomplish. He said that of 17 audits, 11 of them fell under
his jurisdiction plus partial impacts from other audits, plus new tasks issues by
Council, plus the standard workload created a situation where the City Auditor
may complete the audit, but the departments still need to be able to implement
the process.
Ms. Brouchoud said that once a year the Audit Recommendation Status is
completed with department’s feedback.
Vice Mayor Espinosa asked about the Refuse Fund, he wanted clarification that
the City Auditor recognized the concern, but because of impending changes
such as the rate structure change, it should be potentially reprioritized at a
later date.
Ms. Brouchoud said that if the scope of interest for an audit is broader than the
rate structure scope staff is in the process of completing, then an audit could be
put on the workplan now, otherwise the Committee may want to postpone
adding the audit until the rate structure study is completed. She would like
more information on the scope of the rate structure study to provide further
information.
Vice Mayor Espinosa said they could discuss that at a later date.
Ms. Brouchoud said it could be added, it just has to be coordinated with Staff.
She said that it would also be helpful to have some recommended prioritization
of the carried over items on the Workplan.
MOTION: Council Member Vice Mayor Espinosa moved, seconded by Council
Member Scharff, that the Finance Committee recommends to the City Council
approval of the City Auditor’s Fiscal Year 2011 Work Plan.
Council Member Scharff asked if the Workplan was listed in priority order.
Ms. Brouchoud said they were ordered by topic area. She suggested the
Finance Committee review items 12-17 to provide feedback on the Committee’s
priority areas.
Council Member Scharff said the Fleet Purchase Audit would be a high priority.
He thought it would be the same as the follow-up with the Fleet Purchases
Audit.
ATTACHMENT B
8
Ms. Brouchoud said the Fleet Purchases Audit would be a new audit as the
procurement process had not been looked at. The follow-up would be looking
at the prior fleet audit recommendations made regarding replacement criteria
and utilization.
Council Member Scharff said that the Planning Process Audit would be a priority
once the currently planned changes were implemented. He asked about the
External Auditor contract.
Ms. Brouchoud said it was a requirement, so they had to include it on the work
plan.
Council Member Scharff asked what was being audited for the Waste Water
Treatment Audit.
Ms. Brouchoud said it was a review of the cost allocation agreement with
partner agencies.
Council Member Scharff asked where more savings could be found between the
Waste Water Audit and the Human Resources Audit.
Ms. Brouchoud said from a dollar amount perspective, given the cost of the
benefits, the Human Resources Audit might be able to provide more cost
savings.
Council Member Scharff asked for the City Auditor’s recommendation.
Ms. Brouchoud said she would probably look at the higher dollar value first.
Council Member Scharff said that would be his recommendation as well.
Council Member Klein said it should be left to the City Auditor’s discretion. But
he disagreed that it should be solely dollar based. Management Audits don’t
necessarily net much money but were very important. Benefits had become
very important and thus a high priority. The task was to create a government
that produces the best services perfectly efficiently. The City Auditor’s
evaluation of the Waste Water Treatment Plant would be very valuable.
Council Member Schmid said the Waste Water Plant and Planning and
Development were both changing and thus should be delayed. This left
ATTACHMENT B
9
Utilities, which should then be prioritized. Secondly a critical audit would be the
Employee Benefits Audit. Providing oversight over investments was critical. He
added there was no mention of the Fire Department.
MOTION PASSED 4-0.
5. Discussion for Future Meeting Schedules and Agendas
Lalo Perez Administrative Services Director said that at the Committee’s
direction he asked PERS what would happen if the returns were 1% less than
the 7 3/4, they said it would be a 15-20% increase from the normal cost and a
10-15% on accrued liability. They chose 21% for the model. They will bring it
back to the Committee with the Long Range Forecast, but it would equal about
$2.7 million if the 21% was used with that mix of numbers. The next Finance
Committee meeting will be on September 21, 2010 and the Airport Business
Plan is currently scheduled to be discussed on that date. Staff will prepare an
early packet for that item. The Long Range Financial Forecast was scheduled
for an upcoming meeting. The pension return through June 30 for PERS is
11.5% year-to-date. He said that did not include the losses on real estate. The
rate of return on the medical side was 15.8% which is a healthy number. He
said that depending on the Auditor’s items they will schedule those items for
either September 21, 2010 or October 5, 2010. He said that Staff would also
bring the update to FY 2010.
Council Member Klein said there shouldn’t be a lot of action items.
Mr. Perez said that with for example Workers Comp he doesn’t have a sense of
how close the budget was yet.
Council Member Klein asked what their choices for action would be.
Mr. Perez said they would have to draw down the reserve.
Council Member Schmid said that was going to be a very busy September.
Mr. Perez said they would not be able to accomplish everything on September
21, 2010. He was working on scheduling the not only September 21, but also
October 5th and October 19th. All these items should fit in those three
meetings.
ATTACHMENT B
10
Council Member Klein asked if they were going to factor additional sales tax
revenue from Hewlett Packard into the Long Range Forecast.
Mr. Perez said if Staff could get the pertinent information Hewlett Packard them
Staff would be able to include it. He wasn’t sure if Hewlett Packard would be
willing to provide the needed information. All the other previously requested
items will be included.
ADJOURNMENT: Meeting adjourned at 10:00 p.m.
D
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: . UTILITIES
DATE: SEPTEMBER 13, 2010 CMR: 345.10
REPORT TYPE: CONSENT
SUBJECT: Adoption of a Resolution Approving an Amendment to the Northern
California Power Agency Green Power Project Third Phase
Agreement to Allocate Shares from Existing Participants to an
Additional Member, the City of Gridley
EXECUTIVE SUMMARY
Palo Alto and seven other members of the Northern Power California Power Agency (NCPA)
participate in a project to jointly seek and acquire renewable energy resources. The City of
Gridley, also a member ofNCPA, is not a member of the project, but now wants to become one.
This' report recommends that Palo Alto approve an amendment to the agreement to allow Gridley
to participate inthis joint action effort. Palo Alto's share of the project will decline slightly to
allow Gridley'S participation .. Moreover, admitting Gridley will not have a significant impact on
Palo Alto's share of projects when pursuing renewable energy resources in the future.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution approving the Amendment to the
Northern California Power Agency (NCPA) Green Power Project (NGPP) Third Phase
Agreement (Amended NGPP Agreement) to allocate shares from existing participants to one
additional member, the City of Gridley.
BACKGROUND
In July 2006, the Council approved the original NGPP Third Phase Agreement (2006 NGPP
Agreement) to' pursue renewable resource projects jointly with other municipal agencies in
Northern California (CMR: 296:06). The 2006 NGPP Agreement was amended by Council in
2007 to remove a price cap that hindered finding renewable resources in an increasing price
market, and to facilitate development ofNCPA-owned renewable projects and allow members to
opt out of individual projects in the pre-construction, pre-contracting phase (CMR: 454.07). The
NGPP effort has not yet resulted in contracts executed through NCP A. However, NGPP now
has four California based projects with various degrees of member support including; solar PV
CMR: 345.10 Page 1 of 3
projects, a wind project, a landfill gas power purchase agreement and a landfill gas development
opportunity.
One of the current NGPP projects under consideration by NCP A members involves the
construction of several utility scale solar photovoltaic (PV) projects. One of the PV projects may
be developed in the territory of the City of Gridley, an NCP A member that is not an NGPP
participant. This opportunity has induced the City of Gridley to apply to join NGPP and
participate in the PV project by signing the Amended NGPP Agreement.
To follow Council direction to perform a thorough reassessment of the goals and strategies for
the acquisition of energy efficiency and renewable energy prior to making additional renewable
resource commitments, Palo Alto recently opted out of all four NGPP renewable electric projects
and is currently only participating in an effort to explore development of dairy methane gas to
meet a small fraction of the gas utility's load and perhaps through a voluntary customer-funded
program similar to PaloAltoGreen for the gas utility.
DISCUSSION
Under the current NGPP Agreement, NCPA members who participate in NGPP each have an
initial participation share of projects under consideration. As a specific project moves through
the process from evaluation towards some level of commitment, individual members can drop
out or reduce their participation percentages and other members can increase their participation
percentages.
The Amendment being considered would simply revise the participation shares matrix (Exhibit
A of Attachment B, the Amended NGPP Agreement) to admit Gridley as a new member at a
0.389 percent participation level (less than one percent) and reduce the percentage shares of all
eight other members proportionately. Palo Alto's participation share would drop only about 0.1
percent, from 23.4375% to 23.3463%. The small reduction in Palo Alto's share of future NGPP
projects is immaterial in terms of Palo Alto's ability to meet its needs for renewable energy as
determined by the Council.
Exhibit A of the Amended NGPP Agreement incorporating the percentage share changes has
been reviewed and approved by the City Attorney's Office.
RESOURCE IMPACT
This Amendment to the NGPP Third Phase Agreement is not expected to have any material
resource impact on Palo Alto.
POLICY IMPLICATIONS
Approval of this resolution allows the City of Gridley to participate in the Amended NGPP to
purchase renewable energy and thereby may help reduce greenhouse gas emissions. consistent
with the Council's policy on Climate Protection. Otherwise, approval of this resolution does not
change existing polity or constitute any new policy.
CMR: 345.10 Page 2 of3
,;
,I
r
ATTACHMENT· A
Not Yet Approved
Resolution No.
i ---
Resolution of the Council of the City of Palo Alto
Approving an Amendment to the Northern California
Power Agency Green Power Project Third Phase
Agreement to Allocate Shares/, from Existing Participants
to an Additional Member, City of Gridley
WHEREAS, the City of Palo Alto (the "City"), a municipal utility and a chartered
city, is a member of the Northern California Power Agency ("NCPA"); and
WHEREAS, the City, along with other members of NCPA, entered into THE
NORTHERN CALIFORNIA POWER AGENCY GREEN POWER PROJECT (NGPP) THIRD
PHASE AGREEMENT for the purpose of procuring electrical power and environmental
attributes ("Green Power") from NCPA's NGPP; and
WHEREAS, the NGPP Third Phase Agreement provides for NGPP project
participants to purchase Green Power from renewable resources and/or to develop or acquire
physical renewable generation assets; and
.WHEREAS, the NCP A Green Power Pool took steps to begin developing a Solar
PV Project (the "Project") for the benefit of its members; and
WHEREAS, the City of Gridley ("Gridley") is not a member of the NGPP or a
signatory to the NGPP Third Phase Agreement; and
WHEREAS, Gridley now wishes to become a member of the NGPP and a
signatory to the NGPP Third Phase Agreement; and
WHEREAS, in accordance with Section 7.2 of the NGPP Third Phase Agreement,
no NCP A member may become an additional party to the NGPP Third Phase Agreement unless
one or more of the Participants elect to allocate a portion of its Participant Percentage to such
Member; and
WHEREAS, the NGPP Participants, including the City, now wish to allocate a
portion of their participation percentages to Gridley, so that Gridley may become a member of
the NGPP and a signatory to the NGPP Third Phase Agreement.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves the Amended Northern California Power
Agency Green Power Project (NGPP) Third Phase Agreement, including the amended Exhibit A,
which allocates 0.0912 percentage points of Palo Alto's 23.4375% participation interest in the
1
100729 jb 0073408
d
Not Yet Approved
NGPP to the City of Gridley. As a result, the City of Palo Alto will hold a revised participation
interest of23.3463% in the NGPP.
SECTION 2. The Council finds that the adoption of this resolution does not
constitute a project under the California Environmental Quality Act and the CEQA Guidelines
and, therefore, no environment assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
100729 jb 0073408
2
APPROVED:
Mayor.
City Manager
Director of Utilities
Director of Administrative
Services
~ u:> o g _.
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~
NGPP Participant Election (aMW")
NGPP Participant Election (%) r aMW = Ca~acity in Averag_e M~
NGPP Participant Election (aMW")
NGPP Participant Election (%) r aMW = Capacity in Averaqe M\IVl
NGPP 3rd Phase Allreement Participantion -Without Gridlev
Total
Ann aMW BART Healdsburg Lodi Lompoc Palo Alto Plumas
64.0 7.0 2.0 5.0 5.0 15.0 2.0
100.00% 10.9375% 3.1250% 7.8125% 7.8125% 23.4375% 3.1250%
NGPP 3rd Phase Aqreement Particioantion -Adiusted to Reflect Gridley Participation
Total
Ann aMW BART Healdsburg Lodi .Lompoc Palo Alto Plumas
64.25 7.0 2.0 5.0 5.0 15.0 2.0
100.00% 10.8949% 3.1128% 7.7821% 7.7821% 23.3463% 3.1128%
SVP Ukiah
25.0 3.0
39.0625% 4.6875%1
I
SVP Ukiah Gridley
25.0 3.0 0.25
38.9105% 4.6693% 0.3891%
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.' ATTACHMENT C
RESOLUTION 10·49
RESOLUTION OF THE NORTHERN CALIFORNIA POWER AGENCY APPROVING
AN AMENDMENT TO THE NORTHERN CALIFORNIA POWER AGENCY
GREEN POWER PROJECT (NGPP) 3RD PHASE AGREEMENT TO ALLOCATE SHARES FROM
EXISTING PARTICIPANTS TO ADDITIONAL MEMBER, CITY OF GRIDLEY
(reference Staff Report #162:1 O)
WHEREAS, the Members of the Northern California Power Agency ("NCPA") desire to ,
increase the utilization of renewable energy resources as part of their power mix strategy and have
accordingly each adopted a Renewable Portfolio Standard ("RPS"); and
WHEREAS, to assist its Members in' meeting their respective RPS, the NCPA Commission '
on June 22,2006 approved execution of a form of NCPA Green Power Pool ("NGPP") Third Phase
Agreement to be entered into with those Members of NCPA desiring to do so; and
WHEREAS, the NCPA Green Power Pool amended its Third Phase Agreement on or about
November29,2007;and
WHEREAS, the NGPP Third Phase agreement, as amended, provides for NGPP project
participants to purchase electricity from renewable resources and/or to develop or acquire physical
renewable generation assets; and
WHE:REAS, the NCPA Green Power Pool took steps to begin developing a SOLAR PV
Project ("Project") for the benefit of its members; and
WHEREAS, The City of Gridley ("Gridley") is not a member of the NGPP or a signatory to
the NGPP Third Phase Agreement; and
WHEREAS, NCPA has been providing project management services related to the
acquisition of solar PV projects to be located within Gridley's distribution area or to serve Gridley
retail electric load pursuant to a Professional Services Agreement dated July 7, 2009 ("PSA"); and
WHEREAS, Gridley now wishes to become a member of the NGPP and a signatory to the
NGPP Third Phase Agreement; and
WHEREAS, in accordance with Section 7.2 of the NGPP Third Phase Agreement, no NCPA
member I'liay become an additional party to the NGPP Third Phase Agreement unless one or more
of the Participants elect to allocate a portion of its Participant Percentage to such Member; and
WHEREAS, the NGPP Participants now wish to allocate a portion of each of their
participation percentages to Gridley so that Gridley may become a member of the NGPP and a
Signatory to the NGPP Third Phase Agreement; and
WHEREAS, the Participants entered into a Amendment to the NGPP Third Phase
Agreement to Allocate Shares to Additional Member, City of Gridley, pursuant to Section 7.2 of the
NGPP Third Phase Agreement, which proposed Amendment is attached hereto as Exhibit A; and
WHEREAS, each Participant and Gridley have submitted evidence in the form of
Resolutions or similar documents demonstrating that the Amendment to the NGPP Third Phase
Agreement to Allocate Shares to the City of Gridley has been approved in accordance with the
Participants' and Gridley's applicable Constitutive Documents; and
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: SEPTEMBER 13,2010
REPORT TYPE: CONSENT
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 331:10
SUpJECT: Approval of a Term Contract with Okonite Company in the Not to Exceed
Annual Amount of $1,313,356 for a Three Year Period for the as Needed
Purchase of Four Types of Medium Voltage Cable in Support of Utility
Department. Maximum Value of Contract for the Three Year Term of the
Agreement would be $3,940,068
RECOMMENDATION
Staff recommends that Council:
I. Approve and authorize the City Manager or his designee to execute a Term Contract with
Okonite Company in an amount not to exceed $1,313,356 per year.
2. Authorize the City Manager or his designee to execute subject Contract for a three year Term
with a maximum value $3,940,068 dollars.
DISCUSSION
To meet the Utilities Department requirement for medium voltage cables, the Purchasing
Division solicited for a Term Contract. Through this process, a competitive solicitation was
issued to award a contract that will be used on an as needed basis (versus predetermine fixed
amount ordered) with the maximun1 dollar amount that can be ordered under this contract of
$1,313,356 dollars per year (or $3,940,068 over a threc year period). Moreover, this type of
contract results in greater efficiency in the ordering and management of this commodity.
Medium voltage cables, also known as primary cables, are uscd in residential and commercial
underground distribution circuits for the distribution of power. For this contract, there are four
types of cables, 25,000 Volt rated 600 kcmil, 15,000 Volt rated 750 kcmil, 15,000 Volt, I/O
AWO, and 15,000 Volt, 1/0 Three Parallel Conductor. The cables are manufactured to comply
with City of Palo Alto cable specifications and industry standards.
A Request for Quotation (RFQ) for the four types of medium voltage cable was sent to eight
suppliers as well as advertised on the City Purchasing Solicitations Web Site. Three suppliers
responded, Okonite, One Source (Kerite) and Prysmian.
CMR:331:10 Page 1 of2
The RFQ for eaeh cable requested a unit price per foot based on estimated aunual quantities for
purposes of making an award determination. Furthermore, these estimated quantities were
determined based on previous annual usage and estimated future use. The Okonite Company
submitted the lowest responsive bid for all four bid items requested.
The proposed tenn contract requires Council approval because the not to exceed expenditure for
this commodity will be $1,313,356 dollars per year for a total not to exceed amount of
$3,940,068 dollars for three years. The aunual amount is calculated based on historical usage of
three cables and an estimated usage on the fourth cable as well as anticipated future needs to the
City.
RESOURCE IMPACT
There wit! be no new resource impact on the Electric Fund as a consequence of implementing
this term contract. Electric Fund projects using cable have budgets that are sufficient to cover
cable costs. When cable is purchased through the new term contract it will become part of the
City's Store's inventory (as in the past). As the cable is used, inventory is reduced and the cost
of the cable is charged to an Electric Fund budgeted project or to budgeted operating expense.
POLICY IMPLICATIONS
Authorization of this Term Contract does not represent any change to the existing policy.
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
ATTACHMENTS
Attachment A: Bid Summary
CMR:331:10
LA
Director of Administrative Services
Page 2 of2
Attad'lmem: A -
AI B Ie DEI F G H I J
2 I !
3 • ,," ,I Ell[)[)ER NAME : OKONITE I PRYSMIAN.KEIlIT§. ~ ..... ESTIMATE!)
ITEM ANNUAL UNIT OESCRjP110N UNIT Exte~ UNIT Extended Price UNIT Exte~dcd
4 USAGE PRICE Pnc. PRICE PRICE Pnc.
5 SCHEOULE A (WOOD
5
3 90,000 Ft Cable, 25kV. 1
conouctor, Gea kemil
Comp~c~ Aluminum NON~
Strand Filled
cono~ctor, 289 mil EPR
insulution, with 1f6
neutral copper $ 3.230 $290,700,0 $ 4.100 369,000.00 $ 4.149 $427,410.00 concentric conductor
per City of Palo Alto
1,$ kV EPR C<tb1e
Specification, UE-e4-G6
CPA PIN 35374-
4 150,000 Ft Cable, 15kV, 1
conductor. 750 kcmi 1
Compressed Aluminum
Strand Fiiled
conductor, 22a mi 1 EPR
insulation. with 1/3
neutral concentric $ 4.672 $700,800.00 $ 5.900 885,000.00 $ 6,649 997,:350.00 copper conductor per
City of Palo Alto 15 kV
EPR Cuble
Specification, UE-a4-
a6.
7 CPA PIN 35372
8 SCHEDULEB@TEELREELS .. ~=====t======t========1=======t======~~=====+========= 1 200,noo Ft CClble, 15kV. :;-
conductor. 1/a AWG
Compressed Aluminum
Stralld Filled
cQllduetor. 226 mi1 EPR
insulation, with 113
neutral copper $ 1.343 $268,600.0 $ 1.750 350,000,00 $ 1,647 329,400,00
concentr1C conductor,
per C,ty of Pa10 Alto
is kV EPR Cable
Specification, UE·G4· es.
9 ~A PIN 35361 .. --.--.-+------~--------~------~--------_1------t_--------6 12,000 Circuit Ca~ble~:~1"5kV, ·C
Ft conductor, 1/& AWG
Compressed Aluminum
Strand Fi11ed
conductor. 22& mil EPR
insulation, with 1/3
neutral copper A ... ., 4'1:3"." $ 55~ 662'000 <t! 4780 5736000 concentric conductor, $ 4."'>VQ ......, ,~._ -""", ,'-W. 'i1 • , •
per City of Pa10 A1to
1 S kV EPR Cable
Specification, UE-94-••• h'HREE P ARM-LEt.
10 COHDUCTORS
11 TOTAl I $1313356.00"~" $1,670,240.00: $1,811,520.00
12 I
13 -I
14 i
RESOURCE IMPACT
A Budget Amendment Ordinance in,theamount of $275,000 is required to cover
the following approximate costs to hold the election. Funds will come from the
Budget Stabilization Reserve.
Registrar of Voters:
Publications to include
Translation Into th'ree languages:
TOTAL:
POLICY IMPLICATIONS
$241,000
$ 34,000
$275,000
This recommendation does not represent any change to existing City Policies.
ENVIRONMENTAL REVIEW
This is riot a project for purposes of the California Environmental Quality Act.
ATTACHMENTS
Attachment A: Budget Amendment Ordinance
Prepared by: ~~
Beth Minor, Assistant City Clerk
Department Head: i~~
Donna Grider, City Clerk, MMC
',.
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: SEPTEMBER 13, 2010 CMR: 343:10
REPORT TYPE: CONSENT
SUBJECT: Approval of Utilities Advisory Commission Recommendation to Defer
any Action on Trading the City's Unused Individual Water Supply
Guarantee Until at Le~st January 2011 and Approval of the City's
Position that San Francisco should use the Individual Water Supply
Guarantee to establish the Interim Water Supply Allocation
EXECUTIVE SUMMARY
In May 2010, the City received an offer from the Purissima Hills Water District to purchase
some of the City's unused water supply guarantee for $1 million. There are many unresolved
issues such as how much water the City would get in a drought and for the long-term. Given the
uncertainty regarding the value of retaining its full water supply guarantee and the potential
amount it could receive for selling it, the City responded that it is not ready to pursue a sale at
this time. This report recommends deferring action on any further offers from Purissima Hills
Water District or other water agencies to buy the City'S unused water supply guarantee until at
least January 2011, when some of the issues regarding the water supply guarantee are expected
to be resolved. The report also recommends the City's position in its discussions with San
Francisco regarding how it decides to split up the water available to be delivered from the
regional water system until 2018.
REQUEST
Staff and the Utilities Advisory Commission (UAC) recommend that the Council defer any
action on trading the City's unused Individual Water Supply Guarantee until at least January
2011.
Additionally, staff recommends that the Council direct staff to advocate that the San Francisco
Public Utilities Commission recognize the Individual Water Supply Guarantee as a major
criterion in its decision on how, to divide the Interim Water Supply Limitation of 184 million
gallons per day between the members of the Bay Area Water Supply and Conservation Agency.
BACKGROUND
Palo Alto's potable water supplies are provided by the City and County of San Francisco through
. the regional water system operated by the San Francisco Public Utilities Commission (SFPUC).
Agencies that buy water from the SFPUC are members of the Bay Area Water Supply and
CMR: 343:10 . Page 1 of5
Conservation Agency (BAW-SCAl). On June 30, 2009, the 25-year contract between San
Francisco and the BAWSCA member agencies expired. On June 1, 2009, Council approved a
new Water Supply Agreement (the 2009 Contract) between San Francisco and the BAWSCA
agencies (CMR: 269:09), effective July 1, 2009 through June 30, 2034.
Individual Supply Guarantee
Under the old contract, San Francisco committed to providing a total of 184 million gallons per
day (MGD) of water, in perpetuity, to 24 BAWSCA agencies2• Palo Alto's share of the 184
MGD, its Individual Supply Guarantee (ISG), is 17.075 MGD. The 2009 Contract reconfirms
'the 24 wholesale agencies' collective supply assurance of 184 MGD as well as the agencies'
Individl;1al Supply Guarantees.
In addition, under the 2009 Contract, the ISGs are permanently transferrable between BA WSCA
agencies. Since Palo Alto's current and projected water usage is around 13 MGD, Palo Alto has
a significant unused ISG that it could transfer to another BAWSCA agency. Money from the
sale of unused ISG could be used to help fund water-related projects such as a recycled water
project.
Interim Supply Allocation
As part of the process to gain approval for its capital program to repair and seismically upgrade
the regional water system, theSFPUC opted to adopt a water supply element that included the
Interim Supply Limitation (ISL), which restricts water deliveries from the regional system's
watersheds to 265 MGD until 2018. The primary reason the SFPUC did this is to encourage
water conservation and minimize environmental damage from diverting more water from the
river systems that supply the regional water system.
The 2009 Contract describes how the SFPUC will implement the ISL it imposed. San
Francisco's share of the ISL is 81 MGD, and the BAWSCA agencies' share, including the two
interruptible customers, the Cities of Santa Clara and San Jose, is 184 MGD. Specifically, the
2009 Contract states that by December 31, 2010, San Francisco will unilaterally decide how to
divide the total BAWSCA agencies' share of the ISL, or 184 MGD, among the 26 BAWSCA
agencies, by allocating each agency an Interim Supply Allocation (ISA). The sum of all 26
agencies' ISAs will collectively total 184 MGD. The 2009 Contract also explicitly states that the
Wholesale Customers (the BAWSCA agencies) do not concede the legality of the SFPUC's
establishment of ISAs or imposition of the Environmental Enhancement Surcharge (described
below) and reserve the right to challenge in court these issues individually or collectively.
The table below shows the key attributes of the ISG and the ISA.
1 The 26 BA WSCA agencies include Alameda County Water District, California Water Service Company, .
Coastside County Water District, Estero Municipal Improvement District, Guadalupe Valley Municipal
Improvement District, Mid-Peninsula Water District, North Coast County Water District, Purissima Hills Water
District, Skyline County Water District, Stanford University, Westborough Water District, and the Cities of
Brisbane, Burlingame, Daly City, East Palo Alto, Hayward, Hillsborough, Menlo Park, Milpitas, Mountain View,
Palo Alto, Redwood City, San Bruno, San Jose, Santa Clara, and Sunnyvale.
2 Two agencies do not have an Individual Supply Guarantee. The Cities of San Jose and Santa Clara are interruptible
customers of the SFPUC and, therefore, have no ISG. The City of Hayward does not have an ISG, but it is part of
the 184 MGD supply assurance.
CMR: 343:10 Page 2 of5
Water Supply Origin of Water Who is Total Palo Alto's Share
Element Supply Element Included? Amount
Individual Perpetual contractual 240f26 184 17.075 MGD
Supply obligation in 2009 and BAWSCA MGD
Guarantee (lSG) 1984 Contracts with agencIes
San Francisco
Interim Supply 2009 Contract All 26 265 81 MGD for San
Limitation (lSL) describes San BAWSCA MGD Francisco
Francisco's unilateral agencIes 184 MGD for the
decision to limit water and San BA WSCA agencies (see
deliveries until 2018 Francisco below for ISAl
Interim Supply 2009 Contract states All 26 184 Unknown -San Francisco
Allocation (lSA) San Francisco can BAWSCA MGD will determine by end of
unilaterally impose agencIes December 2010
The main purpose of the Interim Supply Limitation is to encourage water conservation and to
allow time to study the environmental conditions of the watersheds that supply the regional water
system. As such, additional diversions from the Tuolumne River and Bay Area watersheds are
restricted until additional environmental studies are complete (before 2018). If water usage from
the regional water system exceeds the 265 MGD ISL, then an Environmental Enhancement
Surcharge will be levied on those agencies (including San Francisco) that exceed their ISAs.
Receipts from the surcharge will be used for environmental restoration or enhancement projects
on San Francisco watersheds.
Water Shortage Allocation
For water shortages (droughts), the 2009 Contract contains a formula for how to divide available
water between San Francisco and the BA WSCA agencies similar to the method agreed to in the
old contract. However, because the method used to divide the water among the BA WSCA
agencies expired with the old contract and there is no replacement methodology in the 2009
Contract, the BA WSCA agencies are in the process of developing one.
DISCUSSION
The BA WSCA agencies have been discussing these water supply issues since the 2009 Contract
was approved. The water shortage allocation formula discussions have progressed to narrow
down the choices, but unanimous agreement has not been achieved. Further, there is little time
left for the agencies to agree on how they would propose that San Francisco establish the ISAs
for each agency, since San Francisco must decide by December 31, 2010. In addition, even if
the BA WSCA agencies agree on a proposed ISA formula, San Francisco is not obligated to
accept any proposal from the BA WSCA agencies.
Palo Alto staff is closely engaged in these ongoing discussions and feels strongly that its
perpetual ISG of 17.075 MGD must be properly recognized in any formula. Whether either or
both the water shortage allocation formula decided upon by BA WSCA or the ISA set by San
Francisco will be based in some way on the ISG is unclear at this time.
Meanwhile, several BA WSCA agencies have contacted Palo Alto to express interest in
purchasing Palo Alto's unused ISG. One BAWSCA member, the Purissima Hills Water District
(PHWD), recently sent a letter to Palo Alto's mayor with an offer to buy 0.5 MGD'ofPalo Alto's
CMR: 343:10 Page 3 of5
ISG for $1 million (Attachment A). The Mayor's response declining the offer is attached
(Attachment B).
The value of Palo Alto's unused ISG is difficult to assess while the water shortage allocation
formula and the ISA remain unknown. The value of the ISG will depend in part on whether, and
to what extent, the ISG is a component of a water shortage allocation, as Palo Alto advocates. In
addition, whether the ISA will be somehow based on the ISG will not be clear before December
31,2010. Thus, the offer from PHWD was refused and staff recommends that any other offers
received from PHWD or other parties be refused at this time and that no work be done to solicit
any other offers to purchase any unused ISG until January 2011 at the earliest.
Although San Francisco will unilaterally make a decision on the ISA before December 31, 2010,
the SFPUC has stated that it welcomes input on the process from BA WSCA members. Staff
believes that in the meantime, it can best represent Palo Alto's perspective by providing as much
relevant information to San Francisco as possible. Fundamentally, staff believes that the
perpetual nature of the ISG makes it an obvious choice for the ISA as it defines the contractual
relationship between San Francisco and the Wholesale Customers. In fact, the ISG was granted
to the Wholesale Customers in perpetuity in both the 1984 and 2009 contracts with San
Francisco. Staff recommends that the City adopt. a position that the San Francisco Public
Utilities Commission heavily weight the ISG in its determination of ISAs for each of the
Wholesale Customers. Staffs proposal aligns the ISA with the City'S existing, perpetual, ISG
entitlement. This position may not be entirely consistent with other BAWSCA member's
position, but is in the best interest of preserving the City'S rights.
COMMISSION REVIEW AND RECOMMENDATIONS
The UAC considered the staff recommendation to defer any action on trading the City'S unused
Individual Water Supply Guarantee until after the end of 2010 at its meeting on July 20, 2010.
The UAC discussed the several issues with the ISG and the ISA and determined it would be
prudent to wait until the issues were resolved prior to consider selling any unused ISG.
Commissioners did acknowledge that PHWD's offer could perhaps be worthwhile and deferring
action may result in negative consequences. The City however, could be in a stronger position in
future negotiations with San Francisco if it did not sell any of the ISG at this point.
Commissioners also agreed that Palo Alto should protect its interests in these important
negotiations by contacting San Francisco and discussing its interests.
The UAC voted unanimously (6-0) to recommend that the Council defer any action on trading
the City's unused Individual Water Supply Guarantee until after the end of 2011. The excerpted
draft notes from the UAC meeting are provided as Attachment C.
RESOURCE IMPACT
Passing up the offer from PHWD of $1 million means that the water utility could lose the
opportunity for that revenue. However, it is likely that the City's unused ISG will continue to
have value after January 2011 since several agencies have expressed an interest in buying it.
POLICY IMPLICATIONS
The requested action creates no new Council or City policy, but does establish the City's position
to be used in its discussions with the SFPUC when it establishes Interim Supply Allocations for
Palo Alto and the other BA WSCA members.
CMR: 343:10 Page 4 of5
PRINCIPLES OF AGREEMENT FOR PURCHASE OF PORTION OF
CITY OF PALO ALTO EXCESS SFPUC SUPPLY GUARANTEE
Amount to be Purchased:
PHWD will purchase 500 acre feet of the City's excess SFPUC Individual Supply
Guarantee.
. Purchase Price:
PHWD will pay a one-time price of $2,000 per acre foot for the permanent transfer of 500
acre feet of the City's Individual Suppiy Guarantee, for a total purchase price of
$1,000,000.
Manner of Payment:
PHWD will pay 100% of the purchase price within 90 days from the date of execution of
agreement between PHWD and City for the permanent transfer of a portion of the
Individual Supply Gu~rantee, or the date that the City and County of San Francisco
. approves the permanenttransfer of this portion of the Individual Supply Guarantee,
whichever occurs later.
Time of'Transfer:·
City will transfer the portion of its Individual Supply Guarantee concurrent with PHWD
payment of purchase price to City.
Recycled Water:
PHWD will investigate in good faith the alternatives and feasibility of becoming a recycled.
water customer of the City of Palo Alto.
CEQA:
PHWD, at its sale cost, will complete the environmental review required for the
permanent transfer of a portion of the City's Individual Supply Guarantee.
June 9, 2010
Gary Waldeck
President, Board of Dh'ector's
Purissima Hills Water District
26375 Fremont Road
Los Altos Hills, CA 94022
Ci~of Palo ATTACHMENT B
Office of the Mayor and City Cou1J.cil
Subject: City of Palo Alto response to Purissima Hills Water District letter of May 18th 2010, titled
"Principles of Agreement for Purchase of Portion of City of Palo Alto Excess SFPUC Supply
Guarantee"
Dear President Waldeck:·
I received your letter dated May 18th regarding your interest in proposing Principles of Agreement applicable
to a potential transfer of a portion of the·City of Palo Alto's Individual Supply Guarantee (ISG) to the ..
Purissima Hills Water District. Your letter outlines the broad principles and foundation of such a transaction,
including pricing, volume and timeline~
The City, like Purissima Hills, receives 100% of its water supply fronithe San Francisco Public Utilities
Commission~s Hetch Hetchy system. ·Both of our agencies have an ISG, a contractual entitlement to water
from the system that exists.in perpetuity. For Palo Alto, this perpetual ISG is 17.07 million gallons of water
per day. The City did historically use an amount of water equivalent to Its ISG, but aggressive conservation,
incentive pricing and ~ustomer awareness have resulted in dramatic water use reductiOllS to the point that, the
City now consistently uses signific~llltly less than its ISG, and is not projected to exceed its ISG in the
foreseeable 'future. >
At this time there is uncertainty .surrounding the development of all allocation formula for water deliveries
from· San Francisco during droughts, and uncertainty in how San Francisco will establish the Interim Water
~upply Limitation, which is discussed in Article Four of the 'Water Supply Agreement with the City and
County of San Francisco, executed by both of our agencies in June 2009. The City anticipates this uncertainty
will be settled within a, year. At that time, the City will re-evaluate the best way to encourage an ISG trading
mechanism in a manner that will create a· durable market for aU theBA. WSCA agencies, reward agencies that
have invested in conservation and water recycling, and provide a mechanism for agencies to meet their neelis
in a cost-effective manner. In. the interim, while I appreciate your inquiry, the City is not entertaining offers to
purchase any portion of its ISG:
Please feel free to contact Nicolas Procos at (650) 329~2214 if you have further questions.
/;liJ4~
P.!.rick Burt {
Mayor of Palo Alto.
cc: City Council Members
Utilities Advisory Commissioners
City Manager James Keene
CityAttomey Gary Baum
P.O. Box 10250 '
Palo Alto, CA 94303
650.329.2477
650.328.3631 fax
Page 1 of 2
CITY OF PALO ALTO
Memorandum
TO: MAYOR AND CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: CITY MANAGER
DATE: SEPTEMBER 13, 2010
REPORT: STUDY SESSION
SUBJECT: HIGH SPEED RAIL UPDATE
Discussion
The Palo Alto City Council High Speed Rail (HSR) Committee has held several meetings in
recent weeks to discuss the most recent developments occurring with HSR. The City Council
will hold a study session Monday, September 13th to discuss necessary background information
and status reports. At this meeting the Council will receive a presentation from Californian’s for
Responsible Rail Design (CARRD). The Council will also receive a presentation from staff on
the current activities related to HSR. Provided here is an outline of upcoming dates and activities
for the Palo Alto HSR Committee:
September 15th, HSR Committee Meeting, the Committee plans to discuss
Receive public comment on potential legal matters related to the CHSRA Certification of
the HSR Program EIR
Draft No Confidence Resolution in the California High Speed Rail Authority (CHSRA)
Review revised staff scope of work for HSR economic impact study
High Speed Train (HST) Station Area Development: Principles and Guidelines document
van Ark letter draft letter from meeting with CHSRA CEO on July 29th, 2010
Questions identified by staff in August 24, 2010 memorandum re: a Palo Alto mid-
peninsula HSR station, HSR track options A, B and B1, rail corridor vision, funding
issues, Caltrain electrification, ridership, HSR project level EIR/EIS and potential
alternative future City actions
Supplemental Alternatives Analysis Report (SAAR) review
September 20th, City Council meeting has been structured to allow most of the meeting to deal
with HSR.
The City Council will decide on potential actions on HSR based your discussions at the
September 13th City Council meeting, public input received, information to come out of
the Palo Alto High Speed Rail Committee meeting of the 15th and other input the City
Council may receive. It is anticipated there will be a closed session discussion of HSR
Page 2 of 2
on the 20th. Potential action that may be taken by the City Council at the meeting on the
20th may include but is not limited to the following:
o Action the City may want to take on the CHSRA Program EIR
o Discussion and action on the Draft Resolution of No Confidence in the CHSRA
o Other potential action or direction to staff for follow up
September 27th, 2010, City Council meeting
Potential meeting to continue discussions of HSR should the City Council not complete
discussion and action on September 20th
___________________________
STEVE EMSLIE
Deputy City Manager
___________________________
JAMES KEENE
City Manager
FISCAL IMPACT
The City Council approved the budget for 2010-2011 without the monies
appropriated to pay for the publishing of the City Council agendas. If Council
should decide to continue to have the Council agendas published in the
newspapers, $35,000 would need to be added to the City Clerk budget. The
funds would be taken out of the Budget Stabilization Reserve.
RECOMMENDATION
The City Clerk's Department is requesting approval of:
a) Amending Section 2.04.010 (Regular Meeting) to "The determination to
hold the meeting at a place other than the Council Chambers may be made by
the Mayor prior to the regular meeting date; provided, that notice of the change
in place for conduct of the meeting shall be faxed to the local newspapers";
b) Amending Section 2.04.070 (Agenda) to change Wednesday to Tuesday.
c) Delete the requirement to publish in a newspaper of general circulation.
Prepared b~aL
Beth Minor, ASSistant City Clerk
Department Head: ~ ~
Donna Grider, City Clerk, MMC I
At.tachment A: Proposed Ordinance
Not Yet Approved
prior to the time scheduled for the meeting and during the meeting. If the ..¥~u_n~~l ___ -{ Deleted: C ~--------------~ adjourns its meeting from the council chambers to another place, then notice to
adjourn and the identity of the new place for holding the meeting shall be posted
on the council chamber§ door during the time the meeting is being held.
(b) Each year, no later than Q!Lthe third meeting in February, the
council shall by resolution schedule its vacation for that year. The resolution shall
designate the dates of this scheduled vacation and the city clerk will give notice
thereof by whatever means are deemed appropriate. During~ ~~h_e~~le-,,':'.a~~~~l!., ___ --I Deleted: said
there shall not be ~chedu!ed or hel~ _Il!lY r~gt!l~~ ~e~~~&.9f _t1.!~ ~~1!.l!.ciIJ~.r_ ~(~~ _ ---
council standing committees, unless it is an adjourned regular meeting. The '~.:-
mayor or a majority of the council may call a special meeting during the '~,'
scheduled vacation~ if necessary. ,
SECTION 3. Section 2.04.070 (Agenda) of Chapter 2.04 of Title 2
(Administrative Code) of the Palo Alto Municipal Code is hereby amended to
read, as follows:
Deleted: alUlUal
Deleted: no
Deleted: s
Deleted: n
/ 1 Deleted: .
2.04.070 ~~~!l~I!' _____________________________________ / / /
(a) The city clerk shall prepare the agenda of all matters to be submitted
to the council at its regular meeting according to the order of business which may
be set forth in the ~te~ s_et foJ1!1 in .!he city ~oun~il_proc~dures & council
protocols, numbering each item consecutively.
__ -{ Deleted: council's procedura I
/ 1 Deleted: Wednesday
(b) Not later than 12:00 noon on the.Tuesdayp!~c~~~Kt!t~ !1~~t_r~gt!I.!l~ _///
meeting, the city clerk shall be notified by the city manager or city attorney of the
titles of all agenda items to be submitted to the council at its next regular meeting" _ / / /
(c) The city manager, with the prior approval of the mayor, is
authorized to designate upon the agenda of the council,jtems that shall be taken
up as the first item of business or at a specific time during the-c~u~se-of th~ -----""', \
meeting. UponJ.~a! !?-~,!rJ !1!e_ ~~u.!l~!l_II!~ ~u_sP~I!<! ~~l!.si<!e!l!tio.p-_ ~(t!?-~ it~!ll_ ~~~ _ _ '\ \
under discussion, or may complete consideration of such item, and then must '\
commence consideration of such item for which time is specified, without further ",
action to take.fua~ it~tp_ ~u_t _of .9!<!e! _up.9~ _t1.!~ ,!ge.!l~~' ______________________ _
Deleted: The city clerk shall cause a
summarized digest of the agenda to be
published in a newspaper of general
circulation at least twenty-four hours
before each meeting. This section shall
be directory so that failure to provide the
notification and digest publication shall
not prevent addition of matters to the
council agenda in any other manner
allowed by law.
Deleted: and the city clerk shall publish
in the agenda digest,
Deleted: said
Deleted: said'
(d) All reports, ordinances, resolutions, contracts, documents or other
matters and supporting materials in sufficient quantity for full packet distribution
shall to the greatest extent possible be delivered to the city clerk no later than the
JI'!. ednes~ay Er~~~<!~g !1!e_ I!e_x~ !~&.ull!r_I!l~~t~~..: T!t~ ~!ty .s:!e!~ ~~I!l! p~ep~~e_ t!t~ _____ -{,-De_let_ed_: T_h_ur.:..-sda...:.y _____ ...J
agenda of all such matters according to the order ofbusiness~ which may be set
forth in the A'les set forth in .!he city, council pr~cedures & council protocol§,. ______ -Deleted: council's procedural
numbering each item consecutively. A complete copy of such agenda and the --Deleted: rules ~l.!EE.~~i~g !I!.a~~rial~ ~1!.all t.9 _t!t~ g~e_a!e_s! ~~t~~t..1~o_s~i.P!~ ~~ ~~li':'.e!~<! ~t:.. tp~!l~<! ~o ___ -->=D=e=let=ed=:-a-for";es=a=id=~-~=-<
100712 jb 007340 I 2
,)
J
Not Yet Approved
each council member and each department head so as to reach the recipie~t not . {\..-o_e_le_t_ed_:_T_hur_sda...:' y'--____ ~
later than 7:00 p.ill. on the.Wed]lesday p'r~(;e_djTlg ~~ch_ c_o,u!J<:iJ .n~e_e!i!Jg. ____ , _ ' , _ "
(e) The agenda and materials, including any letters from council
members to their colleagues concerning agenda items, shall be made available to
the public, all newspapers of general circulation within the city, and in the office
of the city clerk, and shall be delivered to all city libraries, except the Children's
Library, by 9:00 a.m. on the Friday preceding each council meeting, and posted in
the counciL chambers during each meeting. Copies of the agenda may be obtained
during business hours ~no later than the Friday preceding the meeting and the
day of the meeting at the office of the city clerk, at all city libraries, except the
Children's Library, and in the council chambers during each meeting.
SECTION 4. The Council finds that deleting the publication requirement
for the changed locations of Council meetings and deleting the requirements for
publishing agenda digests and increasing the time available to the City Clerk to manage
'agenda items do not meet the definition of a project under the California Environmental
Quality Act pursuant to California Public Resources Code Section 2] 065, and therefore
no environment impact assessment is necessary.
II
II
II
II
II
II
SECTION 5.
the date of its adoption.
INTRODUCED:
PASSED:
J007J2jb0073401
This ordinance shall be effective on the thirty-first day after
3
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Assistant City Attorney
100712 jb 0073401
Not Yet Approved
Mayor
APPROVED:
City Manager
Director of Administrative Services
4
" .
.-.~:!
I.
INFORMATION AND PROCEDURES
RESOLUTIONS CONTAINED IN THIS PACKET: The League bylaws provide that resolutions shall
be referred by the president to an appropriate policy committee for review and recommendation.
Resolutions with committee recommendations shall then be considered by the General Resolutions
Committee at the Annual Conference.
This year, six resolutions have been introduced for consideration by the Annual Conference and referred to
the League policy committees. Please note that two resolutions have been referred to more than one policy
committee for consideration.
POLICY COMMITTEES: Six policy committees will meet at the Annual Conference to consider and take
action on resolutions referred to them. These are: Administrative Services; Community Services;
Environmental Quality; Housing, Community & Economic Development; Revenue and Taxation; and
Transportation, Communication & Public Works. These committees will meet on Wednesday, September 15,
2010 at the Hilton Bayfront Hotel, located next to the San Diego Convention Center. Please see page iii for the
policy committee meeting schedule. The sponsors of the resolutions have been notified of the time and location of·
the meetings. .
Two policy committees will not be meeting at the annual conference. These committees are: Employee
Relations and Public Safety.
GENERAL RESOLUTIONS COMMITTEE: This committee will meet at 4:00 p.m. on Thursday, September
16, atthe San Diego Convention Center, Ballroom 20D, to consider the reports ofthe six policy committees
regarding the six resolutions. This committee includes one representative from each of the League's regional
divisions, functional departments and standing policy committees, as well as other individuals appointed by the
League president.
ANNUAL BUSINESS MEETING/GENERAL ASSEMBLY: This meeting will be held at
3 :00 p.m. on Friday, September 17; at the San Diego Convention Center, Ballroom 20ABC.
PETITIONED RESOLUTIONS: For those issues that develop after the normal60-day deadline, a
resolution may be introduced at the Annual Conference with a petition signed by designated voting
delegates of 10 percent of all member cities (48 valid signatures required) and presented to the Voting
Delegates Desk at least 24 hours prior to the time set for convening the Annual Business Session of the
General Assembly. This year, that deadline is 3:00 p.m., Thursday, September 16. If the petitioned
resolution is substantially similar in substance to a resolution already under consideration, the petitioned
resolution may be disqualified by the General Resolutions Committee.
Resolutions can be viewed on the League's Web site: www.cacities.org/resolutions.
Any questions concerning the resolutions procedures may be directed to Linda Welch Diamond at the
League office: Idiamond@cacities.org or (916) 658-8224. .
II.
GUIDELINES FOR ANNUAL CONFERENCE RESOLUTIONS
Policy development is a vital and ongoing process within the League. The principal means for deciding policy
on the important issues facing cities and the League is through the League's eight standing policy committees
and the board of directors. The process allows for timely consideration of issues in a changing environment
and assures city officials the opportunity to both initiate and influence policy decisions.
Annual conference resolutions constitute an additional way to develop League policy. Resolutions should
adhere to the following criteria.
Guidelines for Annual Conference Resolutions
1. Only issues that have a direct bearing on municipal affairs should be considered or adopted at the
Annual Conference.
2. The issue is not of a purely local or regional concern.
3. The recommended policy should not simply restate existing League policy.
4. The resolution should be directed at achieving one of the following objectives:
(a) Focus public or media attention on an issue of major importance to cities.
(b) Establish a new direction for League policy by establishing general principals around which
more detailed policies may be developed by policy committees and the Board of Directors.
(c) Consider important issues not adequately addressed by the policy committees and Board of
Directors.
(d) Amend the League bylaws (requires 2/3 vote at General Assembly).
11
IV.
KEY TO ACTIONS TAKEN ON RESOLUTIONS
. Resolutions·have been grouped by policy committees to.which they have been assigned. Please note that two resolutions
have been assigned to more than one committee. These resolutions are noted by this sign ( • ).
Number Key Word Index
I I
Reviewing Body Action
1 I 2 I 3
I -Policy Committee Recommendation
to General Resolutions Committee
2 -General Resolutions Committee
3 -General Assembly
ADMINISTRATIVE SERVICES POLICY COMMITTEE
2 3
II 1 I League Bylaws Amendment I.
COMMUNITY SERVICES POLICY COMMITTEE
2 3
2 I Let's Move Campaign ]
ENVIRONMENTAL QUALITY POLICY COMMITTEE
1 2 3
. +3 I AB32/ SB 375 I . ]
HOUSING, COMMUNITY & ECONOMIC DEVELOPMENT POLICY COMMITTEE
I 2 3
11~3 AB32/ SB 375 I II
II +4
+3
+4
5
Responsible Banking I
REVENUE AND TAXATION POLICY COMMITTEE
2 3
AB32/ SB 375
Responsible Banking
Unfunded State Mandates
TRANSPORTATION, COMMUNICATION & PUBLIC WORKS POLICY COMMITTEE
123
+3 AB32/ SB 375
II
6· Enhancing Public Safety
Please note: These committees will NOT meet at the annual conference: Employee Relations and Public Safety
Infonnation pertaining to the Annual Conference Resolutions will also be posted on each committee's page on the League
Web site: www.cacities.org. The entire Resolutions Packet will be posted at: Www.cacities.orglresolutions.
RESOLUTIONS INITIATED BY PETITION AT THE ANNUAL CONFERENCE
General Resolutions
Committee
Recommendation
IV
General·
Assembly
Action
KEY TO ACTIONS TAKEN ON RESOLUTIONS (Continued)
KEY TO REVIEWING BODIES
1. Policy Committee
2. General Resolutions Committee
3. General Assembly
Action Footnotes
* Subject matter covered in another resolution
* * Existing League policy
* * * Local authority presently exists
KEY TO ACTIONS TAKEN
A -Approve
D -. Disapprove
N -No Action
R -Refer to appropriate policy committee for
study
a-Amend
Aa -Approve as amended
Aaa -Approve with additional amendment(s)
Ra -Amend and refer as amended to
appropriate policy committee for study
Raa -Additional amendments and refer
Da -Amend (for clarity or brevity) and
Disapprove
Na -Amend (for clarity or brevity) and take
No Action
W -Withdrawn by Sponsor
Procedural Note: Resolutions that are approved by the General Resolutions Committee, as well as all
qualified petitioned resolutions, are reported to the flobr of the General Assembly. In addition, League policy
provides the following procedure for resolutions approved by League policy committees but not approved by
the General Resolutions Committee:
Resolutions initially recommended for approval and adoption by all the League policy committees to which
the resolution is assigned, but subsequently recommended for disapproval, referral or no action by the
General Resolutions Committee, shall then be placed on a consent agenda for consideration by the General
Assembly. The consent agenda shall include a brief description ofth,e basis for the recommendations by both
the policy committee(s) and General Resolutions Committee, as well as the recommended action by each.
Any voting delegate may make a motion to pull a resolution from the consent agenda in order to request the
opportunity to fully debate the resolution. If, upon a majority vote of the General Assembly, the requ~st for
debate is approved, the General Assembly shall have the opportunity to debate and subsequently vote on the
resolution.
v
V.
2010 ANNUAL CONFERENCE RESOLUTIONS
RESOLUTION REFERRED TO ADMINISTRATIVE SERVICES POLICY COMMITTEE
1. RESOLUTION RELATING TO LEAGUE BYLAWS AMENDMENTS
(2/3 vote at General Assembly required to approve)
Source: League Board of Director
Referred to: Administrative Services Policy Committee
Recommendation to General Resolutions Committee:
WHEREAS, The League of California Cities is a nonprofit mutual benefit corporation under
California law, and, as such, is governed by corporate bylaws; and
WHEREAS, the League's Board of Directors periodically reviews the League's bylaws for issues of
clarity, practicality, compliance with current laws, and responsiveness to membership interests; and
WHEREAS, the League's Board of Directors convened a Bylaws Review Committee to make
recommendations regarding various necessary amendments to ensure that the most qualified and committed
city officials are selected to serve on the League's Board, policy committees and other leadership positions,
representing a broad diversity of backgrounds, experience, abilities, geography and other factors, and that
any barriers to their selection are removed; and
WHEREAS, the Board of Directors approved the Bylaws Review Committee's recommendations
that identified amendments to the bylaws that: a) encourage all segments of League membership to pursue
leadership positions within the League to advance the goal that the League Board of Directors reflects the
diverse ethnic and social fabric of California; b) clarify the League Board's nomination procedures and
expand Board membership by four positions; and c) provide guidance to avoid conflicts of interest for Board
and policy committee members with the expectation that decisions should be in the best overall interests of
cities statewide; and
WHEREAS, the League's Board offers amendments and additions to the following sections of the
bylaws for the membership's consideration:
1. Article VII, Section 1; new subsection l(b): Board Diversity Policy, Board of Directors
2. Article VII, Section 2 (c), (f): Composition, Board of Directors
3. Article VII, Section 5 (d): Nomination Process, Board of Directors
4. Article XIV, Section 1, new section: Conflicts ofInterest
5. Article XIV, Section 4, new section: Ethical Considerations;
now, therefore, be it
RESOLVED, by the General Assembly of the League of California Cities assembled during the
Annual Conference in San Diego, September 17, 2010, that the League make the specified changes to the
League bylaws by amending the above-referenced sections as indicated on Attachment A.
{Please see ATTACHMENT A, following background information, for text of proposed bylaws
amendments.]
1II11IIIII
6
Background Information on Resolution No.1
Source: League Board of Directors
Title: Resolution Relating to League Bylaws Amendments
Background:
At its February, 2010 Board meeting the League Board authorized the President to appoint a Bylaws Review '
Committee, consisting of a crosNection of current Board members, to review the provisions of League
bylaws. This included policies r:elated to governing ~e nomination and election of League Board members
and officers with the goal of ensuring the most qualified and committed city officials are selected,
representing abroad diversity of backgrounds, experience, abilities, geography and other factors, and that
any barriers to their selection are removed. The Committee, chaired by First Vice President Jim Ridenour,
completed its work in four face-to-face meetings (April 2, April 29, June 17 and July 9) and submitted its
recommendations to the board. The Board approved the Committee's report and recommends the adoption of
the following five amendments to the League bylaws:
• Amendment to Article VII, Section 1. Board of Directors. The Committee reviewed a variety of
recommendations from previous task forces to encourage greater diversity on the board of directors.
It concluded that the best way to encourage greater diversity on the board of directors is to adopt a
clear and unequivocal policy statement that the various subunits of the League should encourage and
support all members to pursue leadership within the League with the ultimate goal of serving on the
board of directors. The League board recommends this proposal for approval.
• Amendment to Article VII, Section 2. Composition of Board of Directors. The Committee
examined the current composition of the board of directors and is proposing to expand the board by
two at-large positions and two large city positions to meet particular needs. Currently, the bylaws
provide for approximately 50 directors, including 16 from regional divisions, 11 from functional
departments of the League (e.g., city attorneys, city managers, etc.), 10 at"large directors, the mayors
of the 8 largest cities (ranging from Los Angeles with 4,065,585 population to Oakland with 425,068
population, and the directors on the National League of Cities Board of Directors that are from
California (approximately 2 - 4 members). All must be from dues paying cities.
The Committee concluded that due to the overwhelming interest in the at-large positions (4 - 5 times
the applications 'as available seats each year) additional opportunities to serve on the League board
should be provided by increasing the available at-large seats from 10 to 12. The Committee also
concluded that large city representation should be adjusted to reflect the existence and political
value provided throughthe coalition of the state's "Big Ten" Mayors, by increasing bi~ city mayoral
representation on the board from 8 to 10. The current make-up of the Board allows for only the
mayors of the eight largest cities. This excludes two important cities that participate regUlarly in the
coalition of the ten (10) largest cities in the state--Santa Ana (355,662) and Anaheim (348,467)--with
'Yhich the League works closely. The League board recommends this proposal for approval.
• . Amendment to Article VII, Section 5. Nomination Process. The Committee examined problems
associated with the current process for the President selecting division representatives to serve on
the Board Nominating Committee. Each year the President selects representatives from half (8) of
the regional divisions, but the bylaws exclude those board members who are candidates for an
officer or at-large position from serving. The Committee concluded that a problem can arise when
the President is unable to appoint another board representative from a division if one or all of its
representatives are candidates for officer or at-large positions. The proposed changewould allow the
League President to appoint a substitute nominating committee member from the same regional
division, if available. If one is not available, the President shall appoint a substitute from a nearby
regional division. The League board recommends this proposal for approval.
7
• Amendment to Article XIV, Section 1 (new section). Conflicts ofInterest. The Board of
Directors recently adopted a policy designed to reduce potential conflicts of interest by Board
members and policy committee members involved in the adoption of League policy and asked the
Committee to consider whether it should be proposed to be added to the League bylaws. The
Committee recommends that this step be taken. The proposed new language is a general statement
that Board members and policy committee members are expected to make decisions in the best
overall interests of cities statewide, as opposed to narrow parochial, personal, or financial interests.
The League board recommends this proposal for approval.
• Am~ndment to Article XIV, Section 4 (new section). Ethical Considerations. As part of the
guidance to avoid conflicts of interest by Board members and policy committee members, language
related to ethical considerations is recommended to clarify that the items described under Article
XIV as prohibited transactions represent the floor and not the ceiling for standards of ethical
conduct. The additional guidance recommends abstention from decisions where personal conflict
. may exist! The League board recommends this proposal for approval.
[NOTE: Please see ATTACHMENT A (page 9) fot'text of proposed bylaws amendments.]
8
(g) Forpurposes of this section, the population of each city is the most current population as
determined by the California Department of Finance, Demographic Research Unit, or its
successor agency or unit. If no successor agency or unit is named, the most current
population used to determine these dues shall be used to determine future dues until such
time as these bylaws are amended to designate a new source for determining city .
. population.
(h) Directors hold office until their successors are elected and qualified or, if they sit on the .
League Board by virtue of their membership on the National League of Cities Board of
Directors, until their terms on the NationalLeague of Cities Board of Directors conclude.
Article VII: Board of Directors
Section 5: Nomination Process.
(d) Candidates for Positions Ineligible. Candidates for officer and at-large positions on the
League Board are not eligibkto serve on the nominating committee. In the event a
regional division representative on the nominating committee wishes to be a candidate
for an officer or at-large position, the League President will appoint a substitute
nominating committee member (rom the same regional division. if available. If one is
not available; the President shall appoint a substitute (rom a nearby regional division.
**********
Article XIV: Prohibited Transactions
Section 1: Conflicts o(lnterest
General Principle. Members o(the League board as well as members o(League policy committees.
and members o(anvstanding or ad hoc committees and task forces consisting of members ofthe
League board or League policy committees. are expected to make decisions in the best overall
interests of cities statewide. as opposed to narrow parochial. personal. or financial interests. This
is analogous to city officials being expected to make decisions in the best overall interests ofthe
community as opposed to narrow private or self-interests.
Section 2. Loans.
Except as permitted by California Nonprofit Corporation Law, the League may not make any loan of
money or property to, or guarantee the obligation of, any director or officer. This prohibition does not
prohibit the League from advancing funds to a League director or officer for expenses reasonably
anticipated to be incurred in performance of their duties as an bfficer or director, so long as such
individual would be entitled to be reimbursed for such expenses under League Board policies absent
that advance. .
Section 3: Self-Dealing and Common Directorship Transactions.
(a) Self-Dealing Transactions. A self-dealing transaction is a transaction to which the
League is a party and in which one or more of its directors has a material financial
interest.
10
(b) Common Directorships. "Common directorships" occur when the League enters into a
transaction with an organization in which one of the League directors also serves on the
organization's board. .
(c) Pre-Transaction Approval. To approve a transaction involving either self-dealing or a
common directorship, the League Board shall determine,before the transaction, that,
(i) The League is entering i11to the transaction for its own benefit;
(ii) The transaction is fair and reasonable to the League at the time; and
(iii) After reasonable investigation, the League Board deterinines that it could not have
obtained a more advantageous arrangement with reasonable effort under the
circumstances.
Such determinations shall be made by the League Board in good faith, with knowledge of
the material facts concerning the transaction and the director's interest in the transaction,
without counting the vote of the interested director or directors.
(d) Post-Transaction Approval. When it is not reasonably practicable to obtain Board
approval before entering into such transactions, a Board committee may approve such
transaction in a manner consistent with the requirements in the preceding paragraph,
. provided that, at its next meeting, the full Board determines in good faith that the League
Board committee's approval of the transaction was consistent with such requirements
and that it was not reasonably practical to obtain advance approval by the full Board, and
ratifies the transaction by a majority of the directors then in office without the vote of
any interested director. 1
Section 4: Ethical Considerations.
These restrictions. o(course. represent the floor not the ceiling (or ethical conduct as a League
board member or policy committee member. I(a board member or policy committee member
believes that there are circumstances under which the League's members might reasonably
question the board member's or policy committee member's ability lo act solely in the best
interests in the League and its member cities. the prudent courseis to abstain. As an example,
typically. League board members have abstained from participating in decisions on legislation
that would affect organizations (or which they work. Another example is legislation that would
uniquely benefit a·board member's city. Policy committee members should also consider
abstaining in similar circumstances.
»»»»
1 S~e Cal. Corp. Code § 7233 (specifying under what circumstances a self-dealing transaction is void or voidable).
11
RESOLUTION REFERRED TO COMMUNITY SERVICES POLICY COMMITTEE
2. RESOLUTION RELATING TO THE NATIONAL LET'S MOVE CAMPAIGN
Source: League Board of Directors
Referred to: Community Services Policy Committee
Recommendation to General Resolutions Committee:
WHEREAS, the League supports policies that focus on health and wellness, continuing
education, and healthier lifestyles in all communities; and
WHEREAS, many cities, counties, and schools have adopted policies, programs, and ordinances
that promote healthy lifestyles by making their communities walkable, promoting youth and senior
activities, eliminating the sale of junk food in city, county, or school facilities, providing incentives for
stores that sell fresh produce to locate in depressed neighborhoods, and providing exercise opportunities
for their residents; and
WHEREAS, city officials believe there are important, long-term community benefits to be gained .
by encouraging healthy lifestyles, including a decrease in the rate of childhood obesity and its negative
hea~th-related impacts; and
WHEREAS, cities and other community partners can work together to understand the
relationship between obesity, land-use policies, redevelopment, and community planning; and
WHEREAS, cities and other community partners can work together to ensure that there are safe
places for their residents to be active such as in parks, ball fields, pools, gyms, and recreation centers; and
WHEREAS, access to healthy foods has a direct impact on the overall health of our community
and planning for fresh food, open space, sidewalks, and parks should be a priority; and
WHEREAS, the League has partnered with the Healthy Eating Active Living (HEAL) Cities
Campaign to provide training and technical assistance to help city officials adopt policies that improve
th~ir communities' physical activity and retail food environments; and
WHEREAS, the League wants to partner with and support the Let's Move! Campaign headed by
the First Lady of the United States, the President's Task Force on Childhood Obesity and the Secretary of
Health and Human Services, in an effort to solve the challenge of childhood obesity within a generation;
now, therefore, be it .
RESOLVED, by the General Assembly of the League of California Cities, assembled during the
Annual Conference in San Diego, September 17,2010, that the League encourages the existing 480
California cities to adopt preventative measures to fight obesity as set forth by the First Lady of the
United States of America in the Let's Move campaign; and, be it further
RESOLVED, that California cities be encouraged to sign-up with the United States Department
of Health and Human Services -Region IX office as a Let's Move! City; and, be it further
RESOLVED, that California cities are encouraged to: (1) help parents make healthy family
choices; (2) create healthy schools; (3) provide access to healthy and affordable foods; and (4) promote
physical activity.
/1////////
12
Background Information on Resolution No.2
Source: League Board of Directors
Title: Resolution Relating to the National Let's Move Campaign
Background:
According to the United States Department of Health and Human Services, Region 9:
In February, First Lady Michelle Obama launched the Let's Move! campaign to solve the childhood
obesity epidemic within a generation. First Lady Obama is expanding the effort to include a call to
action for mayors and other elected officials to join her Let's Move! Campaign ("Let's Move Cities
and Towns") in an effort to leverage cities and communities unique ability to solve obesity locally and
adopt long-term, sustainable, regional approaches to fight childhood obesity.
On February 2, 2010, President Barack Obama established the Task Force on Childhood Obesity,
which includes senior administration officials. The Task Force developed an interagency plan after
incorporating input from more than 2,500 public comments in 90 days. The plan details a coordinated
strategy, identifies key benchmarks, and outlines an action plan to end the problem of childhood
obesity within a generation.
League adopts resolution in 2004: This resolution related to "encouraging healthier lifestyles for
children, adults, and seniors in cities throughout California." This resolution directed the League to
enCOUfl:lge cities to embrace policies that facilitate activities that promote healthier lifestyles, including
. healthy diet and nutrition, and adopt city design and planning principles that enable citizens to undertake
e¥ercise with the goal of achieving a more active and healthy community.
League adopts resolution in 2006: This resolution related to "encouraging health and wellness in cities."
This resolution directed that the League in cooperation with related League committees, departments, and
the CCS Partnership, work together to develop a clearinghouse of information that cities. can use to
promote wellness policies and healthier cities. It also directed the League to develop a toolkit on the
League's Website for cities to visit in order to share, fmd and develop successful models of health and
wellness to use in their respective communities. It also estabiished that health and wellness programs
become a topic of the Helen Putnam Awards Program beginning in 2007.
Previous Legislation: SCR 31 was introduced by Senator Alex Padilla in 2007, which established
Healthy Communities Awareness Month. This Senate Concurrent Resolution recognized the impOltance
of health and wellness in communities and declared the month of Mayas Healthy Communities
Awareness Month. This was a League sponsored resolution.
League Partners with the Healthy Eating Active Living (HEAL) Cities Campaign: The HEAL Cities
. Campaign provides training and technical assistance to help city officials adopt policies that improve
their communities' physical activity and retail food environments. The HEAL Cities Campaign, funded
by Kaiser Permanente and the Vitamin Cases Consumer Settlement Fund, is a partnership of the League
of California Cities, the California Center for Public Health Advocacy, and the Cities Counties and
Schools Partnership. At its core the HEAL Cities Campaign believes that supporting healthy choices is
essential to address the obesity epidemic among California's children and adults, which they purport
currently costs the state nearly $50 billion annually in healthcare and lost productivity. Forty cities have
adopted resolutions and adopted specific action steps and a timeline in one of the several key campaign
areas (e.g., language in general plan, zoning ordinances governing street design or community gardens,
joint use of recreational facilities, and employee wellness). The HEAL campaign goals are:
13
• To provide city officials information about the statewide obesity epidemic and demonstrate how the
community food environment, physical activity environment, children's out-of-school
environment(s), and soda consumption perpetuate the epidemics; and,
• To inform city officials about the role they can play locally to fight the obesity and inactivity
epidemics th~ough policy adoption, and to recommend those policies that would improve the physical
activity and food environments of their cities and make their community healthier.
Existing League policy on Healthy Cities: The League encourages cities to embrace policies that
facilitate activities that promote healthier lifestyles, including healthy diet and nutrition, and to adopt city
design and planning principles that enable citizens to undertake exercise with the goal of achieving a
more active and healthy community.
Institute for Local Government (ll.,G) On Healthy Neighborhoods: ll.,G heads the Healthy
Neighborhoods Project, which provides support and resOurces local officials can use to protect and
improve community health by integrating health considerations into their planning, land use and other
decisions. The resources the ILG Website offers are geared to strengthen the efforts of local officials,
staff, planning and development professionals, and community residents in creating healthier
coinmunities. .
According to the Healthy Neighborhoods Project, healthy neighborhoods provide:
(1 ) Places where walking and bicycling are safe and convenient and where residents of all ages and
abilities have the opportunity to be physically active; (2) Nutritious, fresh, culturally appropriate food -
grown locally whenever possible -is affordable and accessible, promoting health and boosting the local
economy; (3) A place where residents aren't exposed to environmental hazards or pollutants that
endanger their present or future health or well-being. ll.,G's Healthy Neighborhoods' Website provides
current, relevant resources to aid in adapting general poliCies and strategies to reverse the negative trends
related to physical inactivitY, unhealthy eating, and environmental hazards.
National League of Cities CNLC) Commends First Lady Michelle Obama for Including Cities and Towns
in Let's Move Campaign: In a press release dated June 11,2010, NLC commends First Lady Michelle
Obama for her newest initiative to combat childhood obesity, Let's Move Cities and Towns. The release
continued that "NLC looks forward to working with the First Lady in encouraging local leaders to be
proactive in their approach against childhood obesity."
Through its Institute for Youth, Education and Families, NLC works to combat childhood obesity by
raising awareness among municipal leaders and providing them with tools and resources to make changes
in their communities. Most recently, NLC and the Foundation for the Mid South, with support from
Leadership for Healthy Communities, a national program of the Robert Wood Johnson Foundation,
launched the Municipal Leadership for Healthy Southern Cities project. This initiative will help local
officials in Arkansas, Louisiana and Mississippi advance policies to promote healthy eating and active
living in order to reduce childhood obesity. NLC also recently collaborated with the American
Association of School Administrators on a report, Community Wellness: Comprehensive City-School
Strategies to Reduce Childhood Obesity. For more information on this NLC initiative visit
www.n1c.org/iyef.
»»»»»
14
RESOLUTION REFERRED TO ENVIRONMENTAL QUALITY POLICY COMMITTEE
+3. RESOLUTION OPPOSING THE BOARD OF DIRECTORS' DECISION TO DEFER
ACTION ON AB 32 AND SB 375 AND TO ADOPT THE BOARD-APPOINTED TASK
FORCE RECOMMENDATIONS
Source: Desert/Mountain Division
Referred to: Environmental Quality Policy Committee; Housing, Community & Economic
Development Policy Committee; Revenue and Taxation Policy Committ:ee; and Transportation,
Communication & Public Works Policy Committee
Recommendations to General Resolutions Committee:
+ Environmental Quality Policy CommIttee:
. + Housing, Community and Economic Development Policy Committee:
+ Revenue and Taxation Policy Committee:
+ Transportation, Communication & Public Works Policy Committee:
WHEREAS, the DesertlMoimtain Division of the League of California Cities has broad concerns
about the economy; and
WHEREAS, these concerns extend both to the ability of cities to deliver vital public services and
. the viability of businesses which are critical to the State's economic recovery; and
WHEREAS, the Desert/Mountain Division of the League of California Cities is concerned that
cities lack the resources to implement existing State mandates imposed at either the regional or local
level; and
.WHEREAS, the League of California Cities Board of Directors appointed a Task Force to craft
it recommendation regarding AB 32 and SB 375, based upon the recommendations developed by four
policy committees; and
WHEREAS, the Task Force recommended that the League of California Cities Board of
Directors request specific actions by Governor Schwarzenegger and the California Air Resources Board
to delay certain deadlines and take other actions with respect to AB 32 and SB 375; and
WHEREAS, the League of California Cities Board of Directors rejected the specific .
recommendations of the Task Force and four policy committees by deferring action on AB 32 and
SB 375; and
WHEREAS, the DesertlMountain Division of the League of California Cities wishes to file an
official protest of the Board of Directors' decision to defer action on a position regarding AB 32 and
SB 375; now, therefore, be it
RESOLVED, by the General Assembly of the League of California Cities, assembled during the
Annual Conference in San Diego, September 17, 2010, that the League of California Cities fmds,
determines and orders the adoption of the consolidated recommendations of four policy committees and
the Board appointed Task Force, as follows:
1. Request that the Governor exercise his authority to delay individual AB 32 implementation
. deadlines.
15
2. Request that the California Air Resources Board take the following three actions:
• Revisit and update economic and growth assumptions used to estimate 2020
business-as-usual emissions and recalculate AB 32 goal;
• Consider local government costs in all future studies relating to AB 32 and SB 375; and
• Request that the SB 375 targets be set in a way to reflect the economy and scarce
local resources.
3. Support (but not sponsor) any legislation that would suspend or delay implementation of
SB 375 until there is funding and resources in place to implement individual mandates and
requirements associated with the bill; and, be it further,
RESOLVED, that the specific recommendations developed by the four policy committees and
Task Force be considered by the General Assembly at the Annual Conference unless the Board of
Directors reverses its deferred action stance on AB 32 and SB 375 and adopts the Task Force
recommendations.
Source:
Title:
/II //I //1/
Background Information on Resolution No.3
DesertlMountain Division
Resolution Opposing the Board of Directors Decision to Defer Action on AB 32 and
SB 375 and to Adopt the Board-Appointed Task Force Recommendations
Background:
TheDesert/Mountain Division adopted a Resolution formally opposing the Board of Directors decision
to defer action on the Task Force's recommendations regarding AB 32 and SB 375. We. took this action
out of concern of the impact these regulations will have on our economy and our ability to serve Our
constituents, and do not want to be complicit by remaining silent on this issue.
The recommended revisions to the League's current positions on AB 32 and SB 375 were crafted by a
Board-appointed Task Force after study of the issue by four League policy committees. The changes
recommended specific actions by Governor Arnold Schwarzenegger and the California Air Resources
Board to delay certain deadlines and take other actions with respect to AB 32 and to suspend or delay the
implementation of SB 375 until state funding is provided for the implementation of its mandates.
The DesertlMountain Division believes that the Board's decision to defer action on the specific
recommendations developed by the four policy committees and Board-appointed Task Force does not
represent the majority of the member cities. This Resolution is being presented for consideration by the
General Assembly at the Annual Conference to allow the entire membership to weigh in on the decision
of whether or not to adopt the Task Force recommendations regarding AB 32 and SB 375.
»»»»»
16
RESOLUTION REFERRED TO HOUSING, COMMUNITY & ECONOMIC DEVELOPMENT·
POLICY COMMITTEE .
• 3. RESOLUTION OPPOSING THE BOARD OF DIRECTORS DECISION TO DEFER
ACTION ON AB 32 AND SB 375 AND TO ADOPT THE BOARD·APPOINTED TASK
FORCE RECOMMENDATIONS
Resolution #3 also referred to these policy committees: Environmental Quality; Revenue and
Taxation; and Transportation, Communication & Public Works. Please see Environmental
Quality Policy Committee section for the resolution and background information.
IIIIIIIIII
.4. RESOLUTION RELATING. TO RESPONSIBLE BANKING
Source: Richard Alarc6n, Council Member, Los Angeles and
Karen A villa, City Treasurer, Carson
Referred to: Housing, Community & Economic Development Policy Committee; and
Revenue and Taxation Policy Committee
Recommendation to General Resolutions Committee:
• Housing, Community and Economic Development Policy Committee:
• Revenue and Taxation Policy Committee:
WHEREAS, cities strive to spend taxpayer dollars wisely on services; and
WHEREAS, cities invest taxpayer dollars with a range of institutions that provide financial
service contracts each year; and
WHEREAS, it is important to ensure that taxpayer dollars are invested in institutions that are not
just fiscally sound, but are committed to investing back into our communities, generating positive
investment and lending in our cities; and
WHEREAS, cities can help support the nation's economic recovery by supporting financial
institutions that in turn re-invest in our local communities; and .
WHEREAS, the national Community Reinvestment Act, passed by the U. S. Congress in 1977,
pioneered the use of transparent, responsible banking, by starting a federal rating system to measure
banks' local lending and investment activity in the communities they take deposits from, providing
accountability to the communities that institutions serve; and
WHEREAS, three decades have passed since the or.iginal passage of the Community
Reinvestment Act (CRA), and due in partto the dramatic changes in the U.S. banking system since this
time, CRA does not provide the level of detail needed for local municipalities to determine our financial
partners' lending activity and investment within a single city alone; and
WHEREAS, on March 20,2002, the City of Philadelphia signed into law a requirement that all
banks authorized to receive deposits from the City submit an annual statement of community .
reinvestment goals within Philadelphia, including but not limited to a summary of the home loans, small
business loans, and other lending and investment activity within Philadelphia, which independent studies
17
have confirmed has resulted in increased access to credit among Philadelphia's minority and low-and
moderate-income communities; and
WHEREAS, the City of Cleveland enacted into law a similar Community Reinvestment
Depository Ordinance in 1991, and since that time has negotiated over $10 billion in lending
commitments and investments through designated Community Reinvestment Initiative agreements with
designated depository banks, with an independent study by the Brookings Institution confirming that
compared to comparable midwestern cities Cleveland's CRA Ordinance has resulted in "more bang for
the community development buck;" and
WHEREAS, on March 5, 2010, the Los Angeles City Council unanimously passed a Responsible
Banking Initiative that requires financial institutions with which the City contracts to provide an annual
"report card" detailing investment and lending activity within Los Angeles, to allow the City to reward
institutions that re-invest in Los Angeles by adding extra points to these institutions' applications during
the City's RFP process for financial service providers; and .
WHEREAS, many municipalities could benefit from increased transparency about which of the
financial institutions their city taxpayer dollars are invested in are in tum re-investing in their city's
homes, businesses, and non-profits, which will allow cities to hold banks to a higher standard of re-
investment by offering increased city business to those that are generating higher levels of investment,
lending, and community service activity within their city; now, therefore,be it
RESOLVED, by the General Assembly of the League ofCaiifornia Cities, assembled during the
Annual Conference in San Diego, September 17, 2010, that the League of California Cities strongly
encourages municipalities to require transparent, responsible banking from the financial institutions
receiving city funds; and, be it further '
RESOLVED, that the League of California Cities serve as a clearinghouse of information on the
responsible banking initiatives of municipalities across the country, such as those of Philadelphia,
Cleveland, Los Angeles and Carson, California; in order to help California cities interested in taking
steps to increase transparent, responsible banking in their own communities.
/1////////
Background Information on Resolution No.4
Source: Richard Alarc6n, Council Member, Los Angeles and Karen Avilla, City Treasurer, Carson
Title: Resolution Relating to Responsible Banking .
Background:
As a Councilmember from the City of Los Angeles and a Treasurer from the City of Carson, we know
that stewards of public funds must strive to ensure that taxpayer dollars are invested in businesses and
institutions that are not just fiscally sound, but committed to investing back into our communities.
On Friday, March 5, 2010, the Los Angeles City Council unanimously passed a Responsible Banking
Initiative that Councilmember Alarcon introduced last year, which will require fmancial institutions with
which the CityofLos Angeles does business to provide an annual "report card" detailing the institution's
investment and lending activity within the City.
The purpose of the report card is to determine which institutions the City does business with are in turn
reinvesting in the City, by extending credit to residents and busines~es, and investing capital in
18
commufiities and development projects. The report card will allow policy makers to reward institutions
with above average rates of impact in the City, while decreasing business with those institutions that do
not recycle dollars back into the local economy.
This effort could be likened to a local version of the federal Community Reinvestment Act, by allowing
local policymakers to review the cQmmunity reinvestment activity of the fmancial institutions with which
the City invests. It builds on the work of existing law in the cities of Philadelphia and Cleveland. Both the
City of Philadelphia, in 2002, and the City of Cleveland, ill 1991, passed laws requiring annual
statements of community reinvestment goals from the institutions that manage their City deposits.
The City of Cleveland reports that, from 1991 through 2008, Cleveland has negotiated over 10 billion
dollars in lending commitments and investments with designated depository banks as a result of their
responsible banking law. In a 2003 report, the independent Brookings Institution compared three
Midwestern cities and praised the City of Cleveland for achieving "more bang for their community
development buck" through the use. of their Community Reinvestment .and other innovative City laws.
We owe it to the current and future residents of our Cities to ensure that taxpayer dollars are invested in
responsible banking institutions that are creating opportunities for investment and lending in our
communities. That's why we urge the League of California Cities to encourage municipalities to require
transparent, responsible banking from financial service providers. With the strength of our collective
wallets combined, Cities will be sending a powerful message to banks: invest in us, and we will invest
in you.
»»»»»
. RESOLUTIONS REFERRED TO REVENUE AND TAXATION POLICY COMMITTEE
.3. RESOLUTION OPPOSING THE BOARD OF DIRECTORS DECISION TO DEFER
ACTION ON AB 32 AND SB 375 AND TO ADOPT THE BOARD-APPOINTED TASK
FORCE RECOMMENDATIONS
Resolution #3 also referred to these policy committees: Environmental Quality; Housing,
Community & Economic Development; and Transportation, Communication & Public Works.
Please see Environmental Quality'Policy Committee section for the resolution and
background information.
IIIIIIIIII
.4. RESOLUTION RELATING TO RESPONSIBLE BANKING·
Resolution #4 also referred to the Housing, Community & Economic Development Policy
Committee. Please see the Housing, Community & Economic Development Policy
. Committee section for the resolution and background information. .
IIIIIIIIII
-Continued, Revenue and Taxation Resolutions -
19
5. RESOLUTION RELATING TO UNFUNDED STATE MANDATES
Source: . City of Santa Clarita
Referred to: Revenue and Taxation Policy Committee
Recommendation to General Resolutions Committee:
WHEREAS, unfunded mandates imposed upon local governments, including cities, counties and
special districts, by the State of California place a tremendous financial burden upon local governments; and
WHEREAS, some of the mandates placed upon local governments are the result of actions by
Boards and Commissions not directly accountable to the electorate; and
WHEREAS, the State of California and many local governments within the state are under
financial duress due to the continuing national economic crisis, and
WHEREAS, approximately twelve perc.ent of Californians, are currently unemployed and
struggling to pay for basic life necessities, well above the national average; and
WHEREAS, mandates enacted by the State of California may r~sult in the need for local. agencies
to increase fees or taxes to satisfy the requirements of the mandate; and
WHEREAS, as citied in a 2005 report on state mandates published by the League of California
Cities, the original intent of Property Tax Relief Act of 1972, which established the concept of state
reimbursement of local agencies for state mandated activities, was to limit the ability of local agencies to
levy taxes; and
WHEREAS, in 1979 the voters of the State of California approved Proposition 4 adding Article
XIII B to the California Constitution, requiring the state to provide a subvention of funds to local
governments for costs associated with state mandated program~, under specified conditions, and through.
subsequent legislation creating the Commission on state mandates; and
WHEREAS, in 2004, the voters of the State of California adopted Proposition 1 A expanding the
constitutional protections for local governments regarding state mandates; and
WHEREAS, the State of California has struggled to balance its budget for the past several years
and has chosen to borrow funds from local governments, thus reducing traditional revenues to local
governments, forcing additional local program and service reductions and cutbacks; and
WHEREAS, various federal and state laws and regulations may result in the imposition of state
mandates on local governments; and
WHEREAS, an example of state imposed mandates are the establishment of Total Maximum
Daily Loads (TMDL) for such things as bacteria, chloride, metals, and toxicity, and
WHEREAS, in order to meet the obligations imposed by Regional Water Quality Control Boards
throughout California, local agencies may need to implement or increase fees and taxes to pay for new
programs or facilities, in order to avoid penalties for non-compliance; and
20
WHEREAS, there appears to ·be no correlation between the imposition of state mandates, taxpayer
funded resources to pay for the costs of state mandates, California's high unemployment rate, and the fiscal
conditions of the State of California and local governments; now, therefore be it
RESOLVED, by the General Assembly of the League of California Cities, assembled during the
Annual Conference in San Diego, September 17, 2010, that:
1. The League of California Cities work with its member cities and other local government partners
to identify situations in which local governments must increase fees or taxes to meet state
mandated requirements; and
2. The League of California Cities petition the Governor of the State of California and Legislature
of the State of California to suspend or eliminate certain state mandates until improvement of the
national and California economy results in substantially lower statewide unemployment and
. fiscal solvency of the State of California and·local governments; and
3. The League of California Cities work with Members of Congress and the government of the
United States to suspend or eliminate certain federal mandates, passed along to the states for
implementation, until the improvement of the national economy results in substantially lower
national unemployment and fiscal solvency of the United States, the State of California and local
governments; and
4. That the League of California Cities will support legislation to suspend, elimmate, or otherwise
modify the negative impacts of state mandates on local agencies, particularly in which a new
local tax or fee or tax or fee increaseis necessary to implement the mandate.
IIIIIIIIII
Background Information on Resolution No.5
Source: City of Santa Clarita
Title: Resolution Relating to State Unfunded Mandates
Background:
Reaching back at least forty years, local governments, including cities, counties and special districts, have
struggled with mandates placed upon them by the State of California. Under California law, whenever
the Legislature, Governor, or a state agency enacts a new law, executive order, regulation, or rule that
requires a local government to implement a new program or provide a higher level of service to an
existing program, the state shall reimburse the local agency for the increased cost.
Over the past two decades, the California Legislature has made a practice of borrowing, transferring,
shifting, or otherwise conveying from local governments to the State of California, as part of the state
budget balancing process, what have historically been considered local revenues. The failure of the State
of California, for the most part, to repay these funds to local governments has led to ballot measures
restricting the ability of the state to use local revenues to balance its continual budget deficit.
Against this backdrop, state regulatory agencies continue to impose requirements upon local
governments, which may result in the need to increase local fees or taxes. Failure to implement the
regulatory requirements may result in the imposition of substantial financial penalties, which must be
paid for by the local government and ultimately, taxpayers or rate payers within the jurisdiction.
21
At a time when California's unemployment rate is in excess of 12%, which is well above the national
unemployment rate, and California businesses are struggling to stay afloat in the worst national recession
since the great depression of the 1930s, the q\lestion of regulatory relief must be considered.
For example, many communities throughout the State of California are facing establishment of Total
Maximum Daily Load (TMDL) requirements for such things as bacteria, chloride, metals, and toxicity.
While the environmental or other goals that are sought to be achieved are laudable, regulatory
requirements must be sensitive to the overlaying statewide and national economic climate and the ability
of local governments to pay for new programs and enhancements. In the Santa Clarita area, the Los
Angeles Regional Water Quality Control Board, through imposition of a Chloride TMDL mandate and its
required implementation, is causing local sanitation district ratepayers to pay a 50% fee increase over
four years for increased operational and new facility expenses and committing to long term additional
increases. Failure to approve the increase will likely invite substantial fines, totaling in the millions of
dollars collectively for the ratepayers.
In a time of economic uncertainty and high unemployment, is it appropriate to require California
taxpayers to pay for new regulatory requirements or is it reasonable to suspend or eliminate certain state
mandates until such time as unemployment levels return to more traditional levels and national, state and
local governments return to financial stability?
»»»»»
RESOLUTIONS REFERRED TO TRANSPORTATION, COMMUNICATION &
PUBLIC WORKS POLICY COMMITTEE
+3. RESOLUTION OPPOSING THE BOARD OF DIRECTORS DECISION TO DEFER
ACTION ON AB 32 AND SB 375 AND TO ADOPT THE BOARD-APPOINTED TASK
FORCE RECOMMENDATIONS
Resolution #3 also referred to these policy committees: Environmental Quality; Housing,
Community & Economic Development; and Revenue and Taxation. Please see Environmental
Quality Policy Committee section for the resolution and background information.
6. RESOLUTION RELATED TO ENHANCING PUBLIC SAFETY WHILE DRIVING
A MOTOR VEHICLE
Source: City of Elk Grove
Referred to: Transportation, Communication & Public Works Policy Committee
Recommendation to General Resolutions Committee:
WHEREAS, cities throughout the State of California hold the health and safety of their residents
as a paramount concern; and
WHEREAS, the use of text messages has grown exponentially in recent years; and
WHEREAS, any time a driver attempts to send an electronic text message while driving, his or
her attention is diverted from the road; and
WHEREAS, a recent VirginiaTech study showed sending electronic text messages while driving
makes an accident 23 times more likely; and
22
" .
WHEREAS, a study conducted by The Transport Research Laboratory in the United Kingdom
showed that sending text messages while driving is riskier than driving under the influence ofa1cohol or
drugs; and
WHEREAS, Senate Bill 28 and California Vehicle Code Section 23123.5 ban writing, sending,'
or reading electronic text messages while operating a motor vehicle in the state of California; and
WHEREAS, the League supports this type of traffic safety enhancement as demonstrated through
their support of motorcycle helmets, child restraints, seat belt and speed limit laws; now, therefore, be it .
RESOLVED, by the General Assembly of the League of California Cities, assembled during the
Annual Conference in San Diego; September 17,2010, that the League encourages cities to promote safe
driving across California and the education of the general public about the dangers oftexting while driving.
/1////////
. Background Information on Resolution No.6
Source: City 6fElk Grove
Title: Resolution Relating to Enhancing Public Safety While Driving a Motor Vehicle
Background:
On September 24, 2008, the Governor of California, Arnold Schwarzenegger, signed Senate Bill 28
("SB 28") into law. SB 28 is codified in section 23123.5 of the California Vehicle Code and prohibits
any person from driving a niotor vehicle while using an electronic wireless communications device to
write, send, or read a text~based communication. SB 28 complements an existing law which Governor
Schwarzenegg;er signed in 2006 requiring motorists to use hands-free devices while talking on a mobile
phone when driving a motor vehicle.
Many studies recognize that the distraction that occurs while using electronic devices while operating a
motor vehicle is very dangerous:
• It is estimated that 28% of crashes -1.6 million crashes per year -can be attributed to cell
phone talking and texting while driving. (Source: National Safety Council)
• Drivers who use hand-held devices are four times as likely to get into crashes serious enough to
injure themselves. (Source: Insurance Institute for Highway Safety)
• Using a cell phone while driving delays a driver's reactions as much as having a blood alcohol
concentration at the legal limit of .08 percent. (Source: University of Utah)
Because the health and safety of the residents of Elk Grove is paramount to the members of the City
Council; on May 12,2010, the Elk Grove City Council unanimously adopted a resolution promoting
awareness of the dangers of texting while driving. The City is embarking on an aggressive, yet
economical, public outreach campaign to educate its residents about the dangers of texting while driving,
which includes: educational links on the City's Web site, a flyer in the city;s utility billing insert which
reaches every household, free promotional items for residents specifically geared toward this topic, and a
spotlight feature in the City's bimonthly newsletter.
Other cities in California are encouraged to enhance public safety in their community by educating
residents about the dangers of texting while driving a motor vehicle. Educational outreach will benefit
23
drivers, passengers, by~standards, bicyclists, walkers and runners. Local governments have the ability to
implement cost-effective educational tools to communicate with residents about this important public
safety issue.
All local government officials and employees in California want to protect their families, themselves~ and
others. Please put down your phone when you are driving or use a hands-free device and do not teXt. It' s
safe and it's the law.
»»»»»
[NOTE: No resolutions were assigned to the following policy committees: Employee Relations and
P~kS~~J .
##########
24