HomeMy WebLinkAboutStaff Report 4023
City of Palo Alto (ID # 4023)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 9/17/2013
City of Palo Alto Page 1
Summary Title: 2013 Reappropriations
Title: Approval of Fiscal Year 2013 Reappropriation Requests to be Carried
Forward into Fiscal Year 2014
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee preliminarily approve the Fiscal Year 2013
reappropriations to be carried forward into Fiscal Year 2014 and direct staff to forward the Finance
Committee’s recommendation to the City Council.
Executive Summary
Each year, unexpended funds from the prior fiscal year are requested to be carried over to the current
fiscal year for projects which were not completed due to various timing and/or demand issues, or other
strategic purposes. In order for these funds to be available for expenditure in the current fiscal year,
City Council approval is required. This report provides the Finance Committee with an overview of
proposed reappropriation requests and seeks preliminary approval for these reappropriations to be
forwarded to the City Council for approval. Staff will return to the Finance Committee and then the City
Council later in the year when the annual financial audit is complete for final confirmation of these
reappropriation requests as part of the final Fiscal Year 2013 Budget Ordinance Amendment
recommendations.
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 these
encumbrances.
However, each year there are a small number of important projects the City carries forward into the
next year with unencumbered funds. The reappropriation process is used for these projects, which are
City of Palo Alto Page 2
generally one-time needs. Although the Municipal Code also requires that the Council provide final
approval as part of approval of the final amendments to the Budget Ordinance once the accounting
books are closed, the Council may provide a preliminary approval at this time to allow the
reappropriations to move forward. The preliminary approval allows the Administration to move forward
with projects which may need funding in the first part of the fiscal year. The Municipal Code also states
that unless amended by Council, the appropriations of capital improvement funds for project
expenditures shall continue in full force and effect until the purpose for which each was made has been
accomplished or abandoned. The purpose of any capital appropriation is deemed abandoned if two
years pass without any expenditure from the appropriation.
Discussion
As noted above, the Municipal Code provides that the City Council may preliminarily approve
reappropriations, with final City Council approval as part of the approval of the annual year-end closing
budget ordinance. The year-end closing ordinance is scheduled to be presented to the Finance
Committee in November 2013 when the annual financial audit is complete with final approval by the
City Council.
Attachment A identifies those reappropriation requests that staff recommends for preliminary approval,
including any capital projects that have had no expenditures within the last two years. The projects for
which reappropriations are recommended can generally be categorized as follows:
Operating Projects where FY 2013 workload resulted in delays: These projects were delayed
due to competing workload demands, staffing issues, or other unanticipated delays. Examples
of projects in this category include Office of Emergency Services (Emergency Management
Training Support and Critical Protected Assets Inventory), Development Blueprint Process, and
the Police Utilization Study.
Capital Projects where funds have not been expended for two years: A limited number of
capital projects have not had funds expended for two years, however staff still intends to
complete these projects. There are numerous reasons for not completing these items in 2013
and the need for carrying funds into 2014, including workload constraints, the desire to align the
completion of projects with other capital projects occurring in FY 2014, and difficulties in
locating materials. In some instances funds are recommended to be carried forward to ensure
funds are in place for critical anticipated equipment replacement needs.
Projects that were strategically deferred in Fiscal Year 2013: Certain projects (Innovation
Contingency Account and Mitchell Park Library Collections) were not expended in Fiscal Year
2013 for strategic purposes. The Innovation Contingency was not expended in order to provide
funds for this purpose in FY 2014, as FY 2014 Innovation Contingency Funds were programmed
for the Library Virtual Branch Capital Project. For Mitchell Park, funds were purposefully not
spent in order to align the acquisition of library material with the current construction schedule
City of Palo Alto Page 3
to ensure the most up-to-date library materials are purchased for the community.
Funds available due to lower than anticipated resident demand: In the Electric and Storm
Drainage Funds, reappropriations are recommended for projects that were not utilized fully in
Fiscal Year 2013 due to lower citizen interest. In the Storm Drainage Operating Fund, a rebate
program available to the public since 2008, and in the Electric Fund a multi-year energy
efficiency loan program that provides zero interest loans to Palo Alto commercial and residential
customers, have not yet generated sufficient demand to expend all allocated resources.
Management and Professional Development funds: A number of City employees, as part of
their compensation plan, are eligible for certain self-improvement activities. These funds are
available to certain employees for civic and professional association memberships, conference
participation and travel, educational programs, certain tuition costs, and professional and trade
journal subscriptions, and are recommended to be carried over to Fiscal Year 2014 to improve
and supplement the job and professional skills of employees. As part of the FY 2014 Mid-Year
Budget Adjustments, the Administration intends to bring forward a recommendation to move
these funds to a non-departmental appropriation for citywide training opportunities.
Resource Impact
The requested items have been previously reviewed and approved by City Council as part of the Fiscal
Year 2013 budget process. Staff has determined that sufficient funds exist to allow for the approval of
the attached Fiscal Year 2013 reappropriations list (Attachment A). For Fiscal Year 2014, staff
recommends $0.6 million in carryover funds in the General Fund, and $2.3 million across all other funds.
Preliminary FY 2013 unaudited financials indicate that the General Fund Budget Stabilization
Reserve (BSR) will be set in accordance with the City Council approved policy.
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.
Attachments:
Attachment A: Reappropriations Summary (PDF)
2013 Reappropriations
General Fund
Department
Reappropriation
Amount Reappropriation Justification
Various 84,659 Unused Management and Professional Development funds
Non-Departmental 100,000 Innovation Contingency: The Innovation Contingency is set annually at $100,000 and is available
for unanticipated innovative, or technological enhancements which will enhance City operations.
The 2014 Adopted Operating Budget assumed that the entire 2014 allocation would be utilized fund
Library Virtual Branch project. This reappropriation of unused 2013 funds will allow for additional
innovation efforts in FY 2014.
Library 149,524 Mitchell Park Library collections: The City received a gift from the Palo Alto Library Foundation
for this purpose, however usage is being delayed in order to provide customers with the most
current publications and productions when the Library opens.
Office of Emergency Services 60,000 Critical Protected Assets Inventory & GIS (HAZUS):In accordance with federal guidelines, this
project will identify, catalogue, prioritize, and protect critical infrastructure and key resources to
support local readiness, prevention, mitigation, and response efforts. This project will integrate
infrastruture information and GIS technology in an accessible tool for emergency responders,
enhance incident command capabilities, support the development of site-specific protective
programs, and improve the ability to plan for and manage special events. The project was delayed
in Fiscal Year 2013 due to staffing constraints and workload prioritization, however it is anticipated
that it will completed in Fiscal Year 2014.
Office of Emergency Services 40,000 Emergency Management Training Support: This project will improve the training level of
employees designated as Emergency Operations Center staff necessary for compliance with the
National Incident Management System. It will also train city employees to respond to an all-
hazards threat matrix of risks that may occur within city facilities. Training efforts experienced
delays in Fiscal Year 2013 due to staffing constraints and workload prioritization, however the
training is now anticipated to be completed in Fiscal Year 2014.
Planning and Community Environment 43,000 Development Blueprint Process: $70,000 was originally allocated in FY 2013 for organizational
improvements, including coaching and training. Due to high level of change and workload, all of
the planned training was not able to be accomplished in FY 2013, and is now anticipated to be
completed in FY 2014.
Police 78,799 Police Utilization Study: In FY 2013, $80k was allocated for the department to hire a consultant
to conduct a utilization study of overall police operations, however the study was not completed due
to competing workload demands. Staff anticipates the Request for Proposals for this project will
be completed in FY 2014.
Total General Fund
Reappropriations 555,982$
Attachment: A
1of 4 9/10/2013
2013 Reappropriations
Fund
Reappropriation
Amount Reappropriation Justification
Capital Projects Fund 59,768 Security System Improvements CIP Project:This reappropriation is proposed to prevent a lapse
in funding. This project will upgrade the camera system and card access system located at the
Municipal Services Center. The project was delayed in Fiscal Year 2013 due to workload
constraints, and the anticipated workload for Fiscal Year 2014 should allow for the completion of
this project.
Capital Projects Fund 50,000 Wilkie Way Bridge Tile Deck Improvement:This reappropriation is proposed to prevent a lapse
in funding. The project will allow for the replacement of all the recycled plastic tiles in the W ilkie
Way Bicycle/Pedestrian Bridge, including any necessary repairs to the wood decking underneath
the tiles. The project was delayed due to difficulty in locating suitable replacement tiles, however
staff has recently selected an acceptable replacement product which should allow for the
completion of this project in Fiscal Year 2014.
Capital Projects Fund 257,985 Downtown Tree Gates CIP Project:This reappropriation is proposed to prevent a lapse in
funding. This ongoing project is used to purchase tree gates on an "as needed" basis when new or
replaced sidewalks are constructed. Numerous workload issues have resulted in the project being
placed on hold. The project is anticipated to commence again as needed and concurrent with
sidewalk work in Fiscal Year 2014.
Wastewater Treatment 161,673 System Flow Meters: This reappropriation is proposed to prevent a lapse in funding. This project
provides funding to replace plant flow meters which are used for regulatory reporting and billing
partner agencies. No plant flow meters were replaced in Fiscal Year 2013, and the reappropriation
is proposed to ensure funds are in place should a flow meter fail in Fiscal Year 2014.
Capital Projects Fund 364,472 Palo Alto Traffic Signal Central System: This reappropriation is proposed to prevent a lapse in
funding. This grant-funded project includes replacement of traffic signal controllers at signalized
intersections and upgrades to the City's traffic signal central system, and allows for controller
upgrades at 35 of the City's 99 signals. The project has been delayed as Caltrans has not released
an Authorization to Proceed for the project, which is necessary for the City to encumber the funds
into a contract. It is anticipated that this will occur in Fiscal Year 2014.
CIP Fund 100,000 Scott Park Improvements CIP Project: This reappropriation is proposed to prevent a lapse in
funding. The project will provide upgrades and renovations for safety and accessibility
improvements at Scott Park. The project was not completed in Fiscal Year 2013 due to public
outreach and additional requests for amenities outside the original project scope. Staff will be
taking a revised park design and Park Improvement Ordinance to the Parks and Recreation
Commission and City Council in Fiscal Year 2014.
Other Funds
2of 4 9/10/2013
2013 Reappropriations
Fund
Reappropriation
Amount Reappropriation Justification
Capital Projects Fund 50,000 Stanford/Palo Alto Playing Fields Netting CIP Project:This reappropriation is proposed to
prevent a lapse in funding. This project will install necessary netting to prevent soccer balls from
going over the fence and damaging vehicles in the adjacent parking lot at the Palo Alto Golf
Course. The project was deferred so that it could occur simultaneously with the upcoming
synthetic turf replacement at the course. Heavy trucks will be required to install the netting and
addressing both projects at once will avoid damage to the synthetic turf and reduce course
closures due to repair.
Capital Projects Fund 65,000 Sarah Wallis Park Improvements CIP Project:This reappropriation is proposed to prevent a
lapse in funding. This project will provide upgrades and renovations for safety and accessibility
improvements at Sarah W allis Park. The project was not completed in FY 2013 due to staffing
limitations, however a reduced number of projects planned in Fiscal Year 2014 will allow Parks
staff to complete this project in the upcoming year.
Gas Fund 520,764 Directional Boring Equipment CIP Project: This reappropriation is proposed to prevent a lapse
in funding. This reappropriation will allow for the purchase two new directional boring machines for
gas, water, and waste water crew to install services and mains. The project was not completed in
Fiscal Year 2013 due to staffing shortages in the Public W orks Department, and is anticipated to
be completed in Fiscal Year 2014.
Gas Fund 36,419 Polythylene Fusion Equipment CIP Project:This reappropriation is proposed to prevent a lapse
in funding. This project will allow for the purchase of a new polythylene (PE) fusion machine. The
new equipment will replace existing equipment that has reached the end of its useful life. The
replacement did not occur in Fiscal Year 2013 as staff worked to utilize existing equipment as long
as possible. Staff has determined that this replacement cannot be delayed again and must be
replaced in Fiscal Year 2014.
Electric Supply 300,000 Energy Efficiency Loan Program: The City Council previously approved a multi-year energy
efficiency loan program to be funded from the Electric Special Projects reserve. This program was
to be used for four years (2011 through 2014) to provide zero interest loans to commercial and
residential customers in Palo Alto.
Information Technology 100,000 Storage Area Network (SAN) Solution: The SAN solution will allow for future Cloud deployments,
disaster recovery, back-up, and failover. Server equipment replacement was put on hold in FY 13
in order to develop a data center strategy, and essential equipment is failing. This project is now
anticipated to be completed in Fiscal Year 2014.
Other Funds
3of 4 9/10/2013
2013 Reappropriations
Fund
Reappropriation
Amount Reappropriation Amount
Information Technology 95,694 SAP Continuous Improvement CIP Project: This reappropriation is proposed to prevent a lapse
in funding. Staff received a number of SAP recommendations from an internal audit in December
2011. W hile a number of the audit recommendations have been addressed and completed, two
remain. These remaining recommendations will be addressed in Fiscal Year 2014.
Information Technology 75,000 Fire Mobile Data Computers (MDCs):This project will replace 15 of 27 fire mobile data
computers in accordance with the City's replacement schedule and to ensure that up-to-date
equipment is available for emergency response activities. The project experienced delays in Fiscal
Year 2013 as the Fire Departement evaluated potential products. The project is anticipated to be
completed in Fiscal Year 2014.
Various 8,627 Unused Management and Professional Development funds:Utilities Administration: $5,000,
Information Technology, $3,627
Storm Drainage- Operating 38,869 Innovative Storm Drain Fund: Funds were originally earmarked in the approved 2005 Storm
Drainage Fee property owner ballot measure for Storm Drainage Improvements. The funds have
been utilized since 2008 to fund a rebate program offering financial incentives to
residents/businesses for the installation of measures that reduce stormwater runoff. As the
program has not yet generated sufficient demand to spend all of the funds, remaining funds will be
utilized for a storm drain improvement project in the Southgate neighborhood. Per the terms of the
2005 Storm Drainage Fee ballot measure approved by Palo Alto property owners, these funds must
be carried over to be utilized for Innovative Storm Drainage Improvements.
Total Other Funds
Reappropriations 2,284,271$
Total- All Reappropriations 2,840,252$
Other Funds
4of 4 9/10/2013