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Home My WebLink AboutRESO 101421 0160109_20230830_ay16 Resolution No. 10142 Resolution of the Council of the City of Palo Alto to Extend and Amend the Development Services Reserve Fund Policy Previously Adopted by Ordinance No. 5420. R E C I T A L S A. In 2016, the Development Services Department completed Phase I of a fee study to update certain non -valuation-based fees for services, reserving a n update of valuation - based fees for Phase II of the fee study. B. In 2017, the Development Services Department completed Phase II of the fee study, which recommended adjustments to the Depart ment’s valuation -based fees, the adoption of an operating reserve, and associated changes. C. On September 19, 2017, the Finance Committee reviewed the fee study and recommended adoption of an ordinance updating Development Services Department fees in accordance with the study’s recommendations, adjusted by the annual salary and benefits adjustment of 5.5 percent. D. On November 13, 2017, the City Council adopted Ordinance 5420 to adjust Development Services Department fees and approve a FY 2018 Development Services Department Reserve Fund Policy. E. The Development Services Department Reserve Fund Policy was based on a fee study regarding best practices and assumed that the Reserve Fund would be fully funded by FY 2022. F. Reserve funds were expended in FY 2020 and FY 2021 to cover pandemic-related departmental operating losses and maintain continuity of service. G. As a result of this use of reserve funds, the Planning and Development Services Department seeks to extend the funding period for the Reserve Fund beyond the planned sunset in FY 2022. H. The Planning and Development Services Department plans for continued use of the Reserve Fund at existing levels through FY 2025 when a new Cost of Services Study is expected to be implemented. // // DocuSign Envelope ID: D504EDFF-661A-4A1E-B0D5-DD9FF74EED4E 2 0160109_20230830_ay16 NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council of the City of Palo Alto adopts the Planning and Development Services Department Reserve Fund Policy, as set forth in Exhibit “1” and incorporated herein by reference. This policy replaces the policy adopted by Ordinance 5420. SECTION 2. The Council finds that the adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21065, thus, no environmental assessment under the California Environmental Quality Act is required. INTRODUCED AND PASSED: January 16, 2024 AYES: BURT, KOU, LAUING, LYTHCOTT-HAIMS, STONE, TANAKA, VEENKER NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Assistant City Attorney City Manager _____________________________ Director of Planning and Development Services _____________________________ Director of Administrative Services DocuSign Envelope ID: D504EDFF-661A-4A1E-B0D5-DD9FF74EED4E 3 0160109_20230830_ay16 EXHIBIT 1 Planning and Development Services Department Reserve Fund Policy Section 1. Purpose The purpose of the Planning and Development Services Department Reserve Fund (PPDSDRF) is to build and maintain an adequate level of unrestricted funds available to cover any unforeseen shortfalls that arise outside of the regular budget planning process, as well as one- time, nonrecurring expenses that will build long-term capacity for Development Services. The fund may not be used to create or hire new full time benefited positions. The department intends for the operating reserve to be used and replenished within a reasonable period of time for Development Services. This policy will be implemented in conjunction with the other financial policies of the City and is intended to support the goals and strategies contained in those related policies and in strategic and operational plans. Section 2. Definitions and Goals The PDSDRF is a designated fund set aside by action of the City Council. The target of the PDSDRF is equal to three (3) months of average recurring operating costs; with a range of 23 (minimum) to 27 (maximum) percent with a target of 25 percent of average recurring operating cost. The PDSDRF is dynamic and will be reviewed and adjusted in response to internal and external changes. In addition to calculating the actual reserve at the fiscal year-end, the reserve fund minimum, target and maximum can be adjusted by the Council as necessary each year during the annual budget development process. These reserves will be reported to the Finance Committee and City Council. Section 3. Funding of Reserves The PDSDRF will be funded by a five (5) percent of Development Services fees as listed in the City’s Municipal Fee Schedule beginning in Fiscal Year 2024, upon City Council approval, through Fiscal Year 2025. The City Council may, from time to time, direct that a specific source of revenue be set aside for the PDSDRF. Section 4. Accounting for Reserves The PDSDRF will be recorded in the City’s accounting system and financial statements titled as the Development Services Department Reserve Fund. The PDSDRF will be maintained in accordance with the City’s investment policy. Section 5. Authority to Use the PDSDRF Authority to use the PDSDRF will remain with the City Council. The City Manager will submit a request to use the PDSDRF to the City Council. The Director of Development Services Department will prepare the report identifying the need for access to the PDSDRF and confirm that the use is consistent with the purpose of the reserves as described in this policy. Determination of need requires analysis of the sufficiency of the current level of reserve DocuSign Envelope ID: D504EDFF-661A-4A1E-B0D5-DD9FF74EED4E 4 0160109_20230830_ay16 funds, the availability of any other sources of funds before using reserves, and evaluation of the time period for which the funds will be required and replenished. Section 6. Fee or Rate Stabilization PDSDRF may be added to the Planning and Development Services Department revenue projections by action of the City Council and held to manage the trajectory of future year rate increases. Section 7. Reappropriation of PDSDRF At the end of each fiscal year the PDSDRF will be reappropriated to the following fiscal year in accordance with Palo Alto Municipal Code Section 2.28.090. Section 8. Relationship to Other Policies The City Manager maintains City Council approved policies, which may contain provisions that affect the creation, sufficiency, and management of the PDSDRF. It will be the responsibility of the City Manager and Director of Administrative Services Officer to notify the Director of Development Services if changes to city-wide policies impact the PDSDRF. These policies may be City Council approved policies such as the Investment Policy or administrative policies within the confines of the Municipal Code. Section 9. Reporting, Monitoring and Review of Policy The Director of Planning and Development Services is responsible for ensuring that the PDSDRF is maintained and used only as described in this policy. Upon approval of the use of PDSDRF, the Director of Planning and Development Services and the Director of Administrative Services will maintain records of the use of funds and plan for replenishment. Staff will provide reports to the City Council within the annual budget process, or sooner if warranted by internal or external events. DocuSign Envelope ID: D504EDFF-661A-4A1E-B0D5-DD9FF74EED4E Certificate Of Completion Envelope Id: D504EDFF661A4A1EB0D5DD9FF74EED4E Status: Completed Subject: DocuSign: RESO 10142 - Development Services Reserve Fund Policy Source Envelope: Document Pages: 4 Signatures: 6 Envelope Originator: Certificate Pages: 2 Initials: 0 Vinhloc Nguyen AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Vinhloc.Nguyen@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 1/19/2024 3:53:54 PM Holder: Vinhloc Nguyen Vinhloc.Nguyen@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Albert Yang Albert.Yang@CityofPaloAlto.org Assistant City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 97.113.236.151 Sent: 1/19/2024 4:00:18 PM Viewed: 1/22/2024 12:33:48 PM Signed: 1/22/2024 12:34:14 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Kiely Nose Kiely.Nose@CityofPaloAlto.org Assistant City Manager/CFO City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 174.160.220.192 Sent: 1/22/2024 12:34:15 PM Viewed: 1/26/2024 8:27:34 AM Signed: 1/26/2024 8:27:44 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jonathan Lait Jonathan.Lait@CityofPaloAlto.org Interim Director Planning and Community Environment City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Sent: 1/26/2024 8:27:45 AM Viewed: 1/29/2024 3:55:18 PM Signed: 1/29/2024 3:58:15 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 1/29/2024 3:58:17 PM Viewed: 1/29/2024 9:20:22 PM Signed: 1/29/2024 9:20:28 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Signer Events Signature Timestamp Greer Stone greer.stone@cityofpaloalto.org Vice Mayor Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 1/29/2024 9:20:30 PM Viewed: 1/29/2024 9:55:30 PM Signed: 1/29/2024 9:55:40 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Mahealani Ah Yun Mahealani.AhYun@CityofPaloAlto.org City Clerk Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 1/29/2024 9:55:41 PM Viewed: 1/29/2024 10:10:48 PM Signed: 1/29/2024 10:13:03 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 1/19/2024 4:00:18 PM Certified Delivered Security Checked 1/29/2024 10:10:48 PM Signing Complete Security Checked 1/29/2024 10:13:03 PM Completed Security Checked 1/29/2024 10:13:03 PM Payment Events Status Timestamps