HomeMy WebLinkAboutStaff Report 6089
City of Palo Alto (ID # 6089)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 9/22/2015
City of Palo Alto Page 1
Summary Title: City Council Budget and Table of Organization Amendment
Approval
Title: Amendment of Municipal Code Section 2.28.080 Regarding City Council
Budget and Table of Organization Amendment Approvals
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee recommend to the City Council to amend
Municipal Code Section 2.28.080 titled Amendments after Adoption which would change the
City Council budget and Table of Organization amendment approval from an ordinance to a
motion.
Recommended Motion
The Finance Committee recommends to the City Council to amend Municipal Code Section
2.28.080 titled Amendments after Adoption which would change the City Council Budget and
Table of Organization amendment approval from an ordinance to a motion.
Executive Summary
Annually the City Council adopts the City’s budget and the Table of Organization. Throughout
the fiscal year, primarily due to unforeseen circumstances, staff requests that the budget for
various funds be amended. Less frequently, the Table of Organization is amended. Palo Alto
Municipal Code section 2.28.050, titled Amendments after Adoption, states, in part, that during
the fiscal year the City Council may amend the City’s budget and the Table of Organization by
ordinance through approval of Budget Amendment Ordinances.
Staff recommends that the City Council approve Budget and Table of Organization amendments
by motion versus ordinance. This change would avoid duplicative work and add the specific
budget and Table of Organization amendment recommendations to the recommendation
language of the staff report versus to an attachment to the report. In instances where a
multitude of amendments are recommended, such as the Midyear Budget Review,
amendments would be detailed in an attachment referenced in the motion.
City of Palo Alto Page 2
Staff presented the attached report (Attachment A) on June 16 to the Finance Committee. The
Committee expressed concerns regarding the historical record of budget changes approved
throughout the year by the City Council (see Attachment B for the June 16 Finance Committee
minutes) and the ability of future Council members, commissioners, or the public to find
historical information. Currently, all ordinances including Budget Amendment Ordinances are
listed in chronological order in the ordinance section of the City Clerk’s website.
To address these concerns, staff has launched a new section on the City’s website titled
“Budget Adjustments and Monitoring.” At this site, staff has listed by fund type all Council
approved budget changes for Fiscal Year 2015 and linked the respective City Manager Reports
(CMRs). Going forward, as budget changes are approved, they will be listed by fiscal year and
fund type and linked to the approved CMR. In contrast to the City Clerk’s website, which
includes all Council approved ordinances by calendar year and residents have to scroll through
the website to find the budget related ordinances, the Budget Adjustments and Monitoring
section of the City’s website provides one location for all budget changes organized by fiscal
year. Further, this new site also links the quarterly financial reports as heard by the Finance
Committee and approved by the City Council.
Although the Finance Committee approved the June 16 City Manager’s Report (two yeas, one
abstain, one absent), staff felt it to be a more prudent approach to return to the Committee to
address the Committee’s concern before taking the item to the City Council.
Background
Annually the City Council adopts the City’s budget and the Table of Organization. Throughout
the fiscal year, primarily due to unforeseen circumstances, staff requests that the budget for
various funds be amended. Less frequently, the Table of Organization is amended. Reasons for
budget amendments include the acceptance of grants and the related expenditure, requests for
funding to support Council initiatives, insufficient funding of capital projects due to higher
construction costs, or corrections to the approved budget. In Fiscal Year 2015, the Table of
Organization was amended as part of outsourcing the street sweeping service, the addition of a
Principal Attorney position as part of approval of the Fiscal Year 2015 Midyear Budget review,
and technical adjustments as part of approval of the Management and Professional
Compensation Plan.
In accordance with Palo Alto Municipal Code section 2.28.050 titled Amendments after
Adoption states in part that during the fiscal year, the City Council may amend the City’s budget
and the Table or Organization by ordinance.
Staff presented the attached report (Attachment A) on June 16 to the Finance Committee. In
discussion with the Committee the Committee expressed concerns regarding the historical
record of budget changes approved throughout the year by the City Council and the ability of
future Council members, commissioners, or the public to find historical information. Although
the Finance Committee approved the June 16 City Manager’s Report (two yeas, one abstain,
City of Palo Alto Page 3
one absent), staff felt it to be a more prudent approach to return to the Committee with a
recommendation to address the Committee’s concern before taking the item to the City
Council.
Discussion
As outlined in more detail in the June 16 report (Attachment A), when staff brings forward a
report with a recommendation to amend the budget or the Table of Organization, a separate
Budget Amendment Ordinance (BAO) is prepared and attached to the report. The separate
Budget Amendment Ordinance is required, since Palo Alto Municipal Code Section 2.28.050
states in part that the City Council is required to amend the budget or Table of Organization by
ordinance. The BAO contains the same information in summary form as the staff report, such
as the background, discussion of the staff report, and a California Environmental Quality Act
statement. The recommended budgetary transactions or specific Table of Organization
changes are the only additional information provided in the BAO. In order to ensure
consistency between the staff report and the BAO, staff spends significant time to write the
BAO. In general, the Office of Management and Budget spends about an hour for preparation,
coordination, review, and final processing for each BAO. After Council approval, staff circulates
the approved ordinance for signature, at minimum, to the Mayor as well as staff in the City
Clerk, City Attorney, City Manager, and Administrative Services Department. In Fiscal Year
2015, over 30 BAOs and Table of Organization amendments were written and routed for
signature.
In order to increase efficiencies in the preparation of staff reports which include budget and
Table of Organization amendment recommendations, staff proposes that the Council adopt
budget and Table of Organization amendment recommendations by motion instead of by
ordinance. The attached draft ordinance identifies the recommended Municipal Code changes
(Attachment C). If these changes in the Municipal Code are recommended for approval by the
Finance Committee and approved by the Council, staff will include the specific budget and
Table of Organization amendment recommendations in the recommendation language of the
staff report versus creating a separate BAO and attaching the BAO to the staff report. Further,
this change would streamline the staff report preparation process and save staff time.
In discussion with the Committee on June 16, the Committee expressed concerns regarding the
historical record of budget changes approved throughout the year by the City Council and the
ability of future Council members, commissioners, or the public to find historical information.
Currently, all ordinances including Budget Amendment Ordinances are listed in chronological
order by calendar year in the ordinance section of the City Clerk’s website. In order to identify
ordinances related to Council approved budget changes, residents are required to know the
calendar year of the approved change and find the change among all other ordinances
approved by the Council.
Therefore, to address the Committee’s concerns, improve the residents’ access to Council
approved budget changes by fiscal year, and build a historical summary staff has launched a
City of Palo Alto Page 4
new section on the City’s website titled “Budget Adjustments and Monitoring.” At this site,
staff has listed by fund type all Council approved budget changes for Fiscal Year 2015 and year-
do-date for Fiscal Year 2016 and linked the respective City Manager Reports (CMRs). Going
forward, as budget changes are approved, they will be listed by fiscal year and fund type and
linked to the approved CMR. Further, this site also links the quarterly financial reports as heard
by the Finance Committee and approved by the City Council.
Staff appreciates the Committee’s discussion regarding the proposed Municipal Code changes
during the June 16 meeting and hopes that with the new website, the Committee’s concerns
are addressed and the City improved in documenting budget changes in an accessible way for
our residents.
Timeline
If the Finance Committee approves this change in the Municipal Code, staff will bring forward
the recommendation to the City Council in October 2015.
Resource Impact
If approved by the City Council, this change in the budget amendment process will allow staff to
spend its time on higher value activities.
Environmental Review
This is not a project under the California Environmental Impact Report.
Attachments:
Attachment A: City Council Budget and Table of Organization Amendment Approval
CMR Finance Committee June 16 2015 (PDF)
Attachment B: Finance Committe Minutes June 16 2015 (PDF)
Attachment C: Draft Ordinance Amending Section 2.28.080 of Chapter 2 Fiscal
Procedures (PDF)
City of Palo Alto (ID # 5692)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 6/16/2015
City of Palo Alto Page 1
Summary Title: City Council Budget and Table of Organization Amendment
Approval
Title: Amendment of Municipal Code Section 2.28.080 regarding City Council
Budget and Table of Organization Amendment Approvals
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee recommend to the City Council to amend
Municipal Code Section 2.28.080 titled Amendments after Adoption which would change the
City Council budget and table of organization amendment approval from an ordinance to a
motion.
Recommended Motion
The Finance Committee recommends to the City Council to amend Municipal Code Section
2.28.080 titled Amendments after Adoption which would change the City Council budget and
Table of Organization amendment approval from an ordinance to a motion.
Executive Summary
Annually the City Council adopts the City’s budget and the Table of Organization. Throughout
the fiscal year, primarily due to unforeseen circumstances, staff requests that the budget for
various funds be amended. Less frequently, the Table of Organization is amended. Palo Alto
Municipal Code section 2.28.050, titled amendments after adoption, states, in part, that during
the fiscal year the City Council may amend the City’s budget and the Table of Organization by
ordinance through approval of budget amendment ordinances.
Staff recommends that the City Council approve budget and table of organization amendments
by motion versus ordinance. This change would avoid duplicative work and add the specific
budget and Table of Organization amendment recommendations to the recommendation
language of the staff report. In instances where a multitude of amendments are
recommended, such as the Midyear Budget Review, amendments would be detailed in an
attachment referenced in the motion.
Attachment A
City of Palo Alto Page 2
Background
Annually the City Council adopts the City’s budget and the Table of Organization. Throughout
the fiscal year, primarily due to unforeseen circumstances, staff requests that the budget for
various funds be amended. Less frequently, the Table of Organization is amended. Reasons for
budget amendments include the acceptance of grants and the related expenditure, requests for
funding to support Council initiatives, insufficient funding of capital projects due to higher
construction costs, or corrections to the approved budget. In Fiscal Year 2015, the Table of
Organization was amended as part of outsourcing the street sweeping service, the addition of a
Principal Attorney position as part of approval of the Fiscal Year 2015 Midyear Budget review,
and technical adjustments as part of approval of the Management and Professional
Compensation Plan.
Palo Alto Municipal Code section 2.28.050 titled Amendments after Adoption states in part that
during the fiscal year, the City Council may amend the City’s budget and the Table or
Organization by ordinance.
Discussion
When staff brings forward a report with a recommendation to amend the budget or the Table
of Organization, a separate Budget Amendment Ordinance (BAO) is prepared and attached to
the report. The separate budget amendment ordinance is required, since Palo Alto Municipal
Code Section 2.28.050 states in part that the City Council is required to amend the budget or
Table of Organization by ordinance. After approval, the BAO is assigned a number by the
Clerk’s Office and routed for signature to the Mayor, the City Manager, the City Attorney’s
Office, the Administrative Services Director, and to the department director whose budget was
amended. Unlike most ordinances, a BAO becomes effective upon adoption and does not
require a second reading.
The BAO contains the same information in summary form as the staff report, such as the
background, discussion of the staff report, and a California Environmental Quality Act
statement. The recommended budgetary transactions or specific Table of Organization
changes are the only additional information provided in the BAO. In order to ensure
consistency between the staff report and the BAO, staff spends significant time to write the
BAO. In general, the Office of Management and Budget spends about an hour for preparation,
coordination, review, and final processing for each BAO.
In order to increase efficiencies in the preparation of staff reports which include budget and
Table of Organization amendment recommendations, staff proposes that the Council adopt
budget and Table of Organization amendment recommendations by motion instead of by
ordinance. The attached draft ordinance identifies the recommended Municipal Code changes
(Attachment A).
If these changes in the Municipal Code are recommended for approval by the Finance
Committee and approved by the Council, staff will include the specific budget and Table of
Attachment A
City of Palo Alto Page 3
Organization amendment recommendations in the recommendation language of the staff
report, versus creating a separate BAO or Table of Organization Ordinance. Further, this
change would streamline the staff report preparation process and save staff time. Attachment
B provides an example (first page only) of a recently approved staff report (CMR #5558,
Approval of a Residential Curbside Compostable Collection Program) and attached BAO with
the relevant budget amendment section highlighted in the BAO. Attachment C exemplifies how
the recommendation language for the same staff report would be written, if Finance
Committee approves staff recommendation to adopt budget amendments by motion. As
another step to provide relevant budgetary information, staff will include available reserve
balances in the Recommendation and Resource Impact sections of the staff report. This will
occur after the issuance of the Fiscal Year 2015 Comprehensive Annual Financial Report (CAFR),
as the audited financial statements provide staff with the Fiscal Year 2015 ending fund balances
for all funds, which become the Fiscal Year 2016 beginning fund balances. Once the actual fund
balances are known, staff can determine available fund balances and the impact of
recommended actions on these fund balances.
Timeline
If the Finance Committee approves this change in the Municipal Code, staff will bring forward
the recommendation to the City Council in August 2015.
Resource Impact
If approved by the City Council, this change in the budget amendment process will allow staff to
spend its time on higher value activities.
Environmental Review
This is not a project under the California Environmental Impact Report.
Attachments:
Attachment A: Draft Ordinance Amending Section 2.28.080 of Chapter 2 Fiscal
Procedures (PDF)
Attachment B: CMR 5558, Approval of Residential Curbside Compostable Collection
Program (first page only) and Budget Amendment Ordinance (PDF)
Attachment C: New Budget Amendment Recommendation Language for CMR 5558
(PDF)
Attachment A
NOT YET APPROVED
150325 jb 0131328 1
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Section 2.28.080
(Amendments after Adoption) of Chapter 2.28 (Fiscal Procedures) of the Palo
Alto Municipal Code to __________________
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Section 2.28.080 Amendments after Adoption of Chapter 2.28 (Fiscal
Procedures) of the Palo Alto Municipal Code is amended to read as follows:
2.28.080 Amendments after adoption.
During the fiscal year, the city manager shall amend the budgetary accounts of the city to
reflect the following:
(a) Additional Appropriations. By a two‐thirds vote, the council may make additional
appropriations of receipts that are in excess of the total estimated receipts and appropriations
contained in the adopted budget.
(b) Additional Positions. By a majority vote, the council may add positions to the table of
organization.
(c) Transfer of Appropriations.
(1) By a majority vote, the council may transfer part or all of the unencumbered balance of
any appropriation from one fund, department, office, or capital project to another;
(2) By written authorization, the city manager may direct the redistribution, within any
department or office, of the unencumbered balance of appropriations within the departments
or offices, provided that he or she shall not make transfers from the classification of utilities
purchased for resale to any other object or make transfers between funds or transfers between
departments without the affirmative vote of a majority of the council;
(3) By written authorization, the city manager may authorize a transfer of appropriation from
the unallocated balance of the contingent account to any department, office or capital project.
Funds shall not be transferred between the general fund and the enterprise funds, nor between
operating and capital funds.
(d) Transfer of Positions. By written authorization, the city manager may transfer positions or
assign personnel from any department or office under the control of the city manager to
another in accordance with Article IV, Section 6(n) of the Charter.
(e) Inter‐fund Transactions. In the event that appropriations and equivalent offsetting credits
for allocated inter‐fund services or transfers are affected by amendments to appropriations for
Deleted: by ordinance
Deleted: by ordinance
Deleted: by ordinance
Attachment A
NOT YET APPROVED
150325 jb 0131328 2
direct expenditures or estimated revenue, the city manager may make corresponding
adjustments to the inter‐fund accounts so affected.
(f) Salaries and Benefits. Amendments to the Employee Classification and Compensation Plan
adopted by the council pursuant to Article III, Sections 12, 18 and 21 of the Charter.
(g) Prior year Encumbrances. Appropriations that were encumbered by properly executed,
but uncompleted, purchase orders or contracts at the close of the previous fiscal year may be
carried forward and incorporated with appropriations of the current year.
(h) Municipal Fee Schedule. By a majority vote, the council may, by ordinance, add or change
fees in the municipal fee schedule.
SECTION 2. The City Council finds that this ordinance is exempt from the
provisions of the California Environmental Quality Act pursuant to Section 15061(b)(3) of the
California Environmental Quality Act Guidelines, because it can be seen with certainty that
there is no possibility of significant environmental effects occurring as a result of the adoption
of this ordinance.
SECTION 3. This ordinance shall become effective upon the commencement
of the thirty‐first day after the date of its adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Asst. City Attorney City Manager
____________________________
Director of Administrative Services
Attachment A
City of Palo Alto (ID # 5558)
City Council Staff Report
Report Type: Action Items Meeting Date: 3/23/2015
City of Palo Alto Page 1
Council Priority: Environmental Sustainability
Summary Title: Approval of a Residential Curbside Compostable Collection
Program
Title: Approval of a Residential Curbside Compost Collection Program and
Adopting a Budget Amendment Ordinance for $387,000 for the Purchase of
Kitchen Buckets and New Outreach Materials
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council:
1.Approve a new residential curbside collection and composting program of
food scraps commingled with yard trimmings in the green carts, effective
July 1, 2015; and
2.Adopt the attached Budget Amendment Ordinance in the amount of
$387,000 to fund the purchase of kitchen buckets and outreach materials
that are needed as part of the implementation of the new residential
curbside compost collection program.
Executive Summary
The implementation of the GreenWaste Contract in 2009 added several zero
waste programs that boosted the City’s diversion rate (from landfills) from 62% in
2008 to approximately 78% in 2013. While this diversion rate is one of the
highest in the state, it has not increased as desired over the past few years to help
the City meet its Zero Waste Goal by 2021. The next big step in the City’s efforts
to attain its zero waste goals is getting food scraps out of the landfill, as they
make up 50% of residential garbage – over 5,000 tons landfilled annually.
Attachment A
1
Revised December 08, 2014
5238/eb
Ordinance No. XXXX
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING
THE BUDGET FOR FISCAL YEAR 2015 TO PROVIDE ADDITIONAL
APPROPRIATION OF $387,000 IN THE REFUSE FUND FOR THE
RESIDENTIAL FOOD SCRAPS PROGRAM.
The Council of the City of Palo Alto does ordain as follows:
SECTION 1.
A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of
Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015; and
B. Staff is recommending a new residential food scraps collection and composting
program that would be implemented July 1, 2015 as part of the City’s efforts to meet its
goal of zero waste to landfills by 2021; and
C. Food scraps comprise nearly fifty percent of the material found in single-family
residential garbage in Palo Alto. Currently, these food scraps can only be disposed in
garbage cans. Other residents send food scraps down the drain, which is not
recommended due to additional water usage and the potential for sewer blockages.
Neither of these methods is appropriate for meat, cheeses, eggs, or other foods high in
protein or oil; and
D. In April 2013, the City implemented a year-long Two Cart Pilot Program in the
Green Meadow neighborhood that eliminated garbage carts completely and redirected
food scraps to compostable bags and into the yard trimming cart. Residents in the pilot
were asked to bag any remaining garbage and place it in the recycling carts; and
E. While the Two Cart Pilot Program did increase diversion of food scraps and
additional recyclables from the landfills, staff is not recommending a citywide roll-out of
the two-cart collection system at this time, as many participants felt that the program
was too complicated. City intends to continue the pilot for calendar year 2015; and
F. Under the new program, the city-wide collection of residential food scraps would
be commingled with yard trimmings. There are several regional composting facilities
that are permitting compost being commingled with food scraps and yard trimmings.
The food scraps collection program will likely divert and recover over half of the food
scraps in the residential garbage, which is equivalent to a four percent increase in the
City’s overall diversion rate; and
G. An initial investment of $387,000 will be needed to purchase kitchen pails and
provide the outreach and training materials needed for implementation. Outreach and
training materials will include cart tags, program brochures, stickers for collection carts,
stickers for the kitchen pails, how-to-video, and informational postcards with program
Attachment A
2
Revised December 08, 2014
5238/eb
information. The annual net costs associated with the new residential food scraps
collection and composting program are currently anticipated to be $532,000, and are
expected to be recovered through an increase in the single-family residential refuse rate
pending City Council approval as part of the Fiscal Year 2016 budget process.
SECTION 2. Therefore, the sum of Three Hundred Eighty Seven Thousand Dollars
($387,000) is hereby appropriated in the Refuse Fund for the residential food scraps
program, offset by a corresponding reduction to the ending fund balance ($387,000).
SECTION 3. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this
ordinance shall become effective upon adoption.
SECTION 4. The Council of the City of Palo Alto hereby finds that this is not a project
under the California Environmental Quality Act and, therefore, no environmental impact
assessment is necessary.
INTRODUCED AND PASSED: Enter Date Here
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Assistant City Attorney City Manager
____________________________
Director of Administrative Services
____________________________
Director of Public Works
Attachment A
Recommendation
Staff recommends that Council:
1. Approve a new residential curbside collection and composting program of
food scraps commingled with yard trimmings in the green carts, effective
July 1, 2015; and
2. Approve an amendment to the Fiscal Year 2015 Adopted Budget for the
Refuse Fund by:
a. Increasing the budget by $387,000 to fund the purchase of kitchen
buckets and outreach materials that are needed as part of the
implementation of the new residential curbside compost collection
program; and
b. Decreasing the Rate Stabilization Reserve by $387,000.
Executive Summary
The implementation of the GreenWaste Contract in 2009 added several zero
waste programs that boosted the City’s diversion rate (from landfills) from 62% in
2008 to approximately 78% in 2013. While this diversion rate is one of the
highest in the state, it has not increased as desired over the past few years to help
the City meet its Zero Waste Goal by 2021. The next big step in the City’s efforts
to attain its zero waste goals is getting food scraps out of the landfill, as they
make up 50% of residential garbage – over 5,000 tons landfilled annually.
Staff proposes to start residential curbside compost (e.g., food scraps and food
soiled paper) collection in July 2015. The new program will allow residents to
place loose food scraps and food soiled paper directly into the ‘green’, yard
trimmings cart. Residents will also be given a kitchen bucket to store a few days’
worth of food scraps in the house before depositing it in the green cart. This
program will reduce community greenhouse gas emissions by over 1,140 metric
tons of CO2 equivalent each year. The program will incur annual (net) cost
increases of approximately $532,000 to compost and/or anaerobically digest food
scraps commingled with yard trimmings. The resulting increase in costs to
residents would be approximately 6.1% (about a $2.63 per month increase for a
32 gallon‐sized garbage service). Staff is also requesting a one‐time Budget
Amendment Ordinance (BAO) for $387,000 to fund the purchase of the kitchen
buckets and print new program outreach materials.
Attachment A
FINANCE COMMITTEE
MINUTES
Page 1 of 28
Special Meeting
Tuesday, June 16, 2015
Chairperson Schmid called the meeting to order at 6:15 P.M. in the Council
Chambers, 250 Hamilton Avenue, Palo Alto, California.
Present: Filseth, Kniss, Schmid (Chair)
Absent: Scharff
Oral Communications
None
Agenda Items
1. Staff Recommendation that the City Council Adopt Two Resolutions
Effective September 1, 2015: 1) Amending Rate Schedules W-1
(General Residential Water Service), W-2 (Water Service from Fire
Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-
Metered and General Non-Residential Water Service), and W-7 (Non-
Residential Irrigation Water Service) to Increase Rates 4 Percent and
Add Drought Surcharges; and 2) Activating Drought Surcharges at the
20 Percent Level in Response to Mandatory Potable Water Use
Restrictions Imposed by the State Water Resources Control Board.
Jon Abendschein, Senior Resource Planner: Good evening, Council
Members. My name's Jon Abendschein. I'm a Senior Resource Planner with
the Resource Management Division. I'm here to talk to you tonight about
the four percent Water Rate increase and Drought Surcharges. The
recommendation that we have for you tonight is to adopt two Resolutions,
one to amend Water Rates, to raise rates by four percent, and add Drought
Surcharges effective September 1, 2015. The second is to activate those
Drought Surcharges. We're putting three levels of Drought Surcharge on the
rate schedule, and we're recommending that you activate the 20 percent
reduction level surcharge effective September 1, 2015. We're trying to
achieve three objectives with these ...
Attachment B
MINUTES
Page 2 of 28
Finance Committee Special Meeting
Minutes 6/16/2015
Chair Schmid: Could I ask a question? You're asking us to activate or to
recommend to Council to activate.
Mr. Abendschein: To recommend to Council to activate. I'm sorry. This is
our recommendation to the City Council we're asking you to recommend to
the City Council.
Chair Schmid: Pass it on, yes.
Mr. Abendschein: Our objectives with these two Resolutions. We have
three objectives. First off, we want to complete the 12 percent rate increase
that we discussed with you last week, which we recommended be broken
into two parts, an eight percent effective July 1st and four percent effective
September 1st. Last night you approved the first part of that two-part rate
increase. This would be the second part. We're also, as I said, adding
Drought Surcharges and activating the Drought Surcharges. On June 3rd,
the Utilities Advisory Commission (UAC) unanimously recommended the
Council approve the recommended action. We don't' unfortunately have the
minutes of the discussion in the report, because their meetings were too
close together. We do have Chair Foster, Jonathan Foster, here to talk
about the UAC's discussion. I'll just go over the background. It's important
just to remind everyone how we got here. Last fall as we were getting into
the drought, the Finance Committee discussed a set of Rate Design
Guidelines to be used in designing Drought Surcharges. We started a Cost
of Service analysis. In March and April, we started our usual financial
forecasting process. We recommended a 12 percent rate increase. That
was adopted by the UAC and the Finance Committee. I'm reiterating some
discussion we had at the Council Member meeting. In late April when we
were mailing our Prop 218 notice, there was a court decision. We asked our
Water Rate Consultant to take a look at our rate design methodology. We
came to you last week to incorporate some recommended adjustments
effective July 1st. I don't think I need to necessarily reiterate this. You've
already heard this earlier in the week. If you have any questions on it, I'm
happy to answer them. This slide, Slide Number ...
Council Member Kniss: Could I interrupt with that one? Given that court
decision, even though you've discussed tiers in here, help me out with that.
Perhaps I didn't understand the court decision.
Mr. Abendschein: I can go into this in a little more depth then. The court
decision did address tiers. The court decision did not say—I'll defer to the
City Attorney on this—that tiers were something cities couldn't use; they just
had to be cost justified. Our Water Rate Consultant took a look at ...
Attachment B
MINUTES
Page 3 of 28
Finance Committee Special Meeting
Minutes 6/16/2015
Council Member Kniss: That's a big thing, to cost justify it. That's what it
hung on, as I understand it.
Mr. Abendschein: That's right. When we adopted our Two-tier rate system
back in 2012, we had a methodology for justifying that two-tier system. In
the wake of the court decision, we wanted to take a look at it and say, "Do
we still feel comfortable with it?" The consultant said, "We do still feel
comfortable with it." It has to do with the way that system capacity is
allocated to year-round and seasonal uses. I'm happy to go into that in
more depth, if you would like to.
Council Member Kniss: As I said, this is the crux of the whole thing. It's
why we're debating this. It's why, as I understand it, we're doing one right
now and we're going to add more at the end of the summer. If I'm wrong
on that, I'd like to know it. That was my understanding as I looked at this
and realized what our objectives are and so forth.
Mr. Abendschein: You're absolutely right.
Council Member Kniss: If I'm not in the right direction then ... What people
are asking us now is, "How are you setting the rates?" Someone said,
"Here's what Mountain View anticipates." What is your limit? What are you
telling people they can use or not use? What are you telling them about if
they use more water, it's going to cost them more? We need to be very
exact when we are explaining to the public this very scarce resource
becoming scarcer unless the Niño does hit, which certainly one hopes will.
This may be a long term and really important resource that we have to deal
with.
Molly Stump, City Attorney: Jon, perhaps I can wade in a little bit?
Mr. Abendschein: Please do, yes.
Ms. Stump: Molly Stump, City Attorney. Thanks for the question. There's
been a fair amount of confusion about this, since the Court of Appeal issued
the San Juan Capistrano decision. As you know, Proposition 218 has some
significant, substantive requirements in it. One of them is that when a local
agency adopts rates to assess property-related fees or charges that those
fees need to be based on the cost of providing service to those payers.
Although the language of Prop 218 says the cost needs to be proportional to
the service to the parcel, courts have said it's legitimate for agencies to
group customers into similarly situated clusters and to figure out the cost of
serving based on those groupings. It's very common, state of the art, to put
residential customers together, commercial customers and then perhaps
agricultural or industrial. We do that. The court in Southern California
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looked at one rating agency's decisions to create a tiered rate structure.
San Juan Capistrano had four tiers in their residential rates. They were very
steep tiers. Every rating agency does this different. Palo Alto has two tiers,
and they're relatively close together. The court found that San Juan
Capistrano did not have evidence that their rate structure was supported by
the cost of providing service to the people in those various tiers. Our
situation is different. The Utilities Department has worked with Raftelis, and
they have developed a methodology that measures the usage including the
base usage and also what's called the peaking factor. This is something that
the utility has to design for, the regular usage and then usage that will rise
up and peak typically on very hot days in the summer. There's an expert
methodology for assessing what it costs to build for that peaking capacity
and then allocating that to the customers that generate those costs. When
the new decision came down, there have been several on tiered rates. This
is one of several. We took that opportunity to look at the guidance from this
panel of the Court of Appeal and go back to the expert and say, "This is the
methodology that you've recommended before, that you believe allows us to
charge people based on the cost of serving them. In light of the court's
newest comments, are we still good?" They said, "Yes. The methodology is
fundamentally sound." They did update it and recommend some minor
adjustments which, if I'm correct, had the effect of bringing our tiers a little
closer together. Because of those changes, the City needed to put the rate
increases that are needed to fund the full cost of the system in place in two
steps. This is the second step. To answer your question, unfortunately the
media reporting on the San Juan Capistrano decision was very high level.
"Court says tiered rates are unconstitutional." What they actually said was
this particular jurisdiction's rates did not meet the constitutional standard. If
court challenges are filed in other jurisdictions, it's going to depend on the
work that those jurisdictions have done to establish what is the cost of
serving, what is their rate structure and what kind of evidentiary basis do
they have to support it. We feel we're in a very different position, and these
tiered rates are well supported by our expert. Does that help?
Council Member Kniss: That's very reassuring. It'll be very reassuring to
the public. Those of us will accept them, but it's about what we're saying to
the public as to why this is happening when the San Juan Capistrano case
was so visible and so well-discussed. Thank you.
Mr. Abendschein: Slide 5 illustrates why we had to break the rate increase
into two parts. As Molly said, the adjustments that the consultant
recommended we make to the methodology flattened the tiers slightly. We
had sent out a Prop 218 notice with rates at this level. If we were to have a
12 percent increase and incorporate the methodology changes, it would have
resulted in tiered rates at this level which means the Tier 1 rate would have
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been above what we sent out in the Prop 218 notice. What we did was we
said, "We'll have an eight percent increase instead." As you can see, that
sets the Tier 1 rate for July 1st at the Prop 218 notice level. We're going to
have a second Prop 218 notice to do an additional 4 percent to get us to the
total 12. We don't like to send out two Prop 218 notices, but fortunately we
were in the process of developing Drought Surcharges and we knew we
would have to have a second Prop 218 notice of the Drought Surcharges
anyway, so we were able to combine those two efforts into one Prop 218
notice. That's ready to go out assuming you recommend approval tonight.
Slide 6 and Slide 7 are for reference. If you'd like to speak to any of those
slides, I can put them back up for the public. I'm not going to go into them
in-depth; they're covered in the report.
Council Member Kniss: One more question on this, if I might. If I'm looking
at my Tier 2 rates...
Chair Schmid: Can you read what slide?
Council Member Kniss: I'm on Slide 6. I'm looking at the tiered rates. They
go up, but it's not a great deal. It's not a huge amount. When I get my
water bill, and that is the big discussion lately. "Have you gotten your water
bill? What did your water bill look like?" What am I going to see? What is
the average water bill? I don't actually know.
Mr. Abendschein: It's in the ballpark of 12 to 14 Centum Cubic-feet (CCF)
annually.
Valerie Fong, Utilities Director: Slide 10.
Council Member Kniss: Am I jumping ahead of you?
Ms. Fong: Yeah.
Council Member Kniss: Why don't you hold on for a minute and then we'll
see.
Mr. Abendschein: These are the billing (crosstalk) Drought Surcharges.
Ms. Fong: This is the Drought Surcharge (crosstalk).
Mr. Abendschein: I have a backup slide. If you're able to turn and take a
look, I can show it to you. If you want to open your report to Page 5.
Council Member Kniss: Packet Page 5?
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Lalo Perez, Administrative Services Director and Chief Financial Officer: Or
Page 5 of the Report?
Mr. Abendschein: Page 5 of the report itself.
Mr. Perez: Packet Page 7.
Mr. Abendschein: Packet Page 7. It looks like the table is cut off across
pages unfortunately. It's at the very bottom of Page 5, the top of Page 6,
Report Page 5 and 6. The annual median, I'm sorry, is 9 CCF. The summer
median is 14 CCF. The winter median is 7 CCF. The impact of the 4 percent
increase is between $2 and $4 to the average residential bill, or the median
residential bill that is. That's in addition to what you'd see for the July 1,
2015 8 percent rate increase which is unfortunately not in your report. If
you want to look at the backup slide that I've put up here, you can see that
as well.
Chair Schmid: If I could ask a question there. Tier 1 and Tier 2 are
separated at 6 CCF.
Mr. Abendschein: That's right.
Chair Schmid: Yet, you say here that your median is—you have a winter
median, an annual median, a summer median. How does that fit into Tiers 1
and 2?
Mr. Abendschein: I'm going to have to take a look at the winter median
again, because last time I checked it was at 6. I don't know why our table is
showing 7 here. We checked that over with the consultant as well.
Chair Schmid: At six.
Mr. Abendschein: Six is the breakpoint, if you think of that as the winter
median ...
Chair Schmid: If the annual median is nine, I would assume that in six you
have 20-25 percent of the residents.
Mr. Abendschein: Six CCF, for most residential customers it represents their
year-round usage, their base load usage. It's their winter usage and it's the
portion of the system that gets used year-round. Anything above six
generally is seasonal.
Chair Schmid: Everybody is in both Tiers 1 and 2.
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Mr. Abendschein: Correct. It's actually not everybody. We do have a
significant subset of customers who do stay within six. Is this helpful as far
as the bill impacts of the normal year rate increases? This doesn't address
the bill impacts of the Drought Surcharges, which we'll get to in a moment.
If there are no more questions on that, I'm happy to move onto the Drought
Surcharges. This is Slide 8. This is a challenging part of this proposal. We
would have preferred to have presented the Drought Surcharges entirely
separately from the normal year four percent rate increase, but we weren't
able to do that this year. The Drought Surcharges are different from normal
year rate increases. We present them differently. They're only intended to
recover lost revenue due to lower sales during a drought. They're not
intended to raise additional revenue. The four percent and the eight percent
increases are intended to raise additional revenue.
Council Member Kniss: If I might. That is what has people so puzzled. Why
is it that you're charging me more when I'm using less?
Mr. Abendschein: That's right. It's a good question and it goes to the issue
that you're paying for the transportation rather than the water itself. You're
paying for the pipes and the maintenance and all of those things that we
have to do every year, rather than the water itself.
Council Member Filseth: Is it as simple as the fixed costs being amortized
over a smaller volume of water or is there more than that?
Mr. Abendschein: That's exactly it. That's all there is.
Council Member Filseth: That's all there is. There's nothing more.
Mr. Abendschein: That's all there is to it. We're proposing rate schedules to
deal with three different levels of water use reductions. We have a 10 and
15 percent level, a 20 percent and a 25 percent level. You might ask why
the 10 and 15 percent level are the same. It has to do with the way water is
allocated during a drought under our contract with the San Francisco Public
Utilities Commission (SFPUC) We have a high—I'm sorry, what's the...The
supply guarantee, that's the word I’m looking for. We have a higher supply
guarantee relative to our usage, contractual supply guarantee with the
SFPUC relative to our normal year usage than other agencies do. That
benefits us during a drought. We end up seeing very similar water use
reduction requirements under 10 percent and 15 percent system-wide Hetch
Hetchy water use reductions. That's why those are the same. We want
these surcharges to be on the rate schedules all the time, updated every
time we update the regular rate schedules. When we get into a drought,
they could be activated by separate Council action. I'm moving on to Slide 9
here. Because of the Governor's requested mandate that we cut water use
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24 percent from calendar year 2013, we're recommending activation of the
surcharges at the 20 percent reduction level. You might ask why 20 percent
instead of 25 percent. The answer is these are calculated as a reduction
from a normal year, a 20 percent reduction from a normal year. Calendar
year 2013 was an above average year. It was very dry. We sold a lot more
water than we normally would have sold. Activating them at the 20 percent
level, which is a little bit confusing, recovers exactly the revenue that we
need to recover. Because we would be activating these in September rather
than July, we would be drawing down reserves to recover some of the lost
revenue. We're comfortable that we can accommodate that within the
financial forecast. Moving on to Slide 10, unless there are any questions on
Slides 8 or 9. When we look at the bill impacts of Drought Surcharges, you
have to think about three different customers. When we activate these
Drought Surcharges, there are three different types of customers you need
to think about. There are customers who are not conserving and then
choose to start conserving. Those customers will see a bill reduction, even
with the Drought Surcharges. You see customers who have not conserved
and choose to continue not to conserve. Those customers will see a bill
increase. There are customers who are already conserving, and we have a
lot of those. Those customers will see an increase in their bills. This is
where the public communication gets very complicated. Essentially these
customers are going to be doing better than customers who are not
conserving, but they're not going to be doing as well as they were before.
Council Member Filseth: I have a question. I'm sure this is fiendishly
complicated and that's why (inaudible). Did you guys look at the possibility
of somehow taking that into account and normalizing it for cubic feet per
head in household? I don't know; something like that. Just for that case of
the person who says, "Now wait a second. I've had three bricks in my toilet,
and I only shower every other day. Meanwhile, my neighbor with the
swimming pool, with the two swimming pools, is going to get a rate cut, and
I'm going to have to pay more." I assume there's no simple way around
that.
Mr. Abendschein: There isn't a simple way, but we did take that into
account. When we did the Drought Rate Design Guidelines, we said we're
going to ask for lower levels of conservation from smaller users. That's built
into these Rate Schedules. You can see it's exhibited in the Drought
Surcharges as well. The surcharge for Tier 1 is a lot lower than the
surcharge for Tier 2.
Council Member Filseth: That's a very important message. If you're already
conserving, you're being asked to do less than somebody who is not. I hope
that comes out in the communications.
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Mr. Abendschein: Absolutely. We have examples here. Our
Communications Manager couldn't be here tonight, but we have some
examples of communication pieces that we've been developing. We're
happy to share that with you.
Council Member Kniss: That you're going to put in the bill?
Mr. Abendschein: Yeah. We'll have it available online as well. That's it.
We're preparing a communications plan. We have some examples; this isn't
all the collateral that we're going to have put together. As part of the
communications, one of the things that we do hear from customers is that
there isn't any economic incentive right now for people to conserve. There
are people who feel like they're doing their part, but others have not faced
an economic incentive. They may be paying a higher bill, but they may be
glad to see those surcharges in place.
Council Member Filseth: From a macro level, it's hard to think that
anybody's going to be surprised to see water getting more expensive, given
the context of everything we've heard in all this (inaudible).
Mr. Abendschein: No, I don't think so.
Council Member Filseth: I wanted to ask another question. The way that I
read this, the Drought Surcharge and the rate increases don't completely
cover the cost, and we're going to make up some of that from reserves.
Mr. Abendschein: That's correct.
Council Member Filseth: Why would we not increase it so it covers
(inaudible) reserves?
Mr. Abendschein: This year it's a practicality. We're adopting the
surcharges starting September 1st. We want them to be at a level where
we're only going to be recovering our revenues if the drought extends on
year after year after year. We would have had to try and set them above
our long-term revenue recovery level to make up for those two months. It's
perfectly reasonable, we thought, to take a little out of reserves.
Ms. Fong: The reserves are covering a couple of high-use months, what
would normally be high water use months because we're not starting the
surcharge until September 1.
Mr. Perez: You're expecting it to cover the minimum anyway, right?
Mr. Abendschein: Yes.
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Chair Schmid: I wondered if before we got into detailed questions, it might
be good to hear from Chair Foster to share where the UAC was on this.
Jonathan Foster, Utilities Advisory Commission Chair: I'll just say a couple
of things. Happy to answer any questions that arise. The UAC has looked at
Water Rates over an extended period of time. It is a subject that keeps
coming back unfortunately. I would say the UAC, all of us, would like to do
anything we can to avoid rate increases in general. The reality of life here is
we're getting hit with a double whammy. We've got the reality of the
increasing costs coming to us from the San Francisco PUC, leading to the
underlying rate increases, and then the drought mandates as well. None of
us like to do this. We were, for example, very pleased that last year we
were able to avoid rate increases in any of our utilities. Obviously this is not
the year with respect to the Water Utility. We certainly looked at it; we
asked the kind of questions you're asking, and then unanimously endorsed
the Staff recommendation. It's painful, but we think it is the right choice.
To the point for the conserving customers, they will be largely shielded from
the Drought Surcharge increases.
Chair Schmid: Were there any particular issues that you spent time on,
going back and forth?
Mr. Foster: To be honest, we went through it in the detail of the underlying
rate increase, the drought increase. I do not recall anyone saying—our
heads were getting around it. It is complex, but I do not recall anybody
saying we ought to do it a different way. At the end of the day after you've
absorbed what is being recommended here, it did appear to us that it was
the best approach possible. Nobody on the UAC said, "Aha! Here's a better
way to do it."
Chair Schmid: That's important given the fact that, as you say, you've been
doing this for years.
Mr. Foster: We have. We would love to come up with a better approach,
but we couldn't.
Chair Schmid: If there are questions about the UAC.
Herb Borock: Thank you, Chair Schmid. I have two concerns about whether
these rates are proper under Proposition 218. The first has to do with the
separation of the potable water service being proposed for these rates and
the recycled water service that the City's currently using for some irrigation
and that a couple of private companies are using and then selling for a profit
to others. The court decision discussed this in the factual context of capital
expenses for recycling. I believe that it applies whether there isn't any
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additional expenses on a recycling program or whether there are. The City
has both factual situations. First, let me read what the court decided. It
said, "The trial court assumed that providing recycled water is a
fundamentally different kind of service from providing traditional potable
water. We think not. When each kind of water is provided by a single local
agency that provides water to different kinds of users, some of whom can
make use of recycled water, for example cities irrigating parkland, while
others such as private residences can only make use of traditional potable
water, providing each kind of water is providing the same service. Both are
getting water that meets their needs. Non-potable water for some
customers frees up potable water for others. Since water service is already
immediately available to all customers of city water, there is no
contravention of Subdivision (b)(4) in including charges to construct and
provide recycled water to some customers." In fact, that's what we do for
the Capital Improvement Programs that we have for considering for future
recycled program. It's in the water fund Budget, and it comes out, those
expenses, in these rates. We are also currently providing recycled water
separately as if it is a separate service. What that means is that those using
that service, such as the City irrigating the Golf Course or Greer Park or
some private company getting it, are not paying their share of the water
service fixed expense for the potable water. That doesn't comply with Prop
18. It is one water service. The second concern I have is that you seem to
be trying to do three different things with these Drought Surcharges. Under
Proposition 218, the fees are charges imposed on a parcel shall not exceed
the proportional cost of the service attributable to the parcel. What we're
also doing is something that the court said not to do, which is to try and
figure out your rates by saying, "We have to get this much money," and
then try and have a rate structure that does that. The third thing is we're
talking about conservation. There's nothing in 218 about that. In fact, the
court case rejected the argument made by the City in this case and that I
was making myself earlier that the constitutional requirement for
conservation could be balanced with Prop 218. They went through the
history of that part of the constitution. They said, "No." We are saying, on
the one hand, we need to charge a Drought Surcharge because people are
not going to be using as much water and, therefore, aren't incurring the
fixed expenses. If you do use exactly the same amount as you did before,
we're going to give you a higher surcharge. You're going to be paying a
bigger surcharge, whereas, before if you used that amount you were
covering the fixed charges. We're also saying to others that we're going to
motivate you to use less and if everyone uses less, maybe those surcharges
wouldn't be high enough. I have some problem with how this surcharge
complies with Prop 218 and how we're trying to sell it to the ratepayers in
terms of conservation when that is not how you go about setting rates
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including with the decision in this court case that conservation is not
something to do. Thank you.
Council Member Kniss: Mine, as I said, is a wind back question. I
remember when we began this a couple of years ago. The discussion was
about where were we in the drought and where were we as far as Hetch
Hetchy. As we look toward the future, what do we have, what have we
contracted for and how long can we go on in this drought? Is it year 4 or
year 5?
Mr. Abendschein: It depends on where you look at it. A lot of people would
say year 4. One of the ways to look at this is how many years do we have
left in storage. We have 3 1/2 years of storage. We would expect to be able
to use that for substantially longer because of conservation measures.
Council Member Kniss: Maybe we can stretch it out 4 1/2 or 5 years?
Mr. Abendschein: If not longer.
Council Member Kniss: Herb's point is interesting. The more our group
conserves water, literally long term, we will have to charge more. It's just
what you said earlier. There's a fixed cost and if you're not using enough,
then long term you will get, I would think, penalized. There must be a
better word to use than that. The less you use, the more it is going to cost
long term.
Mr. Abendschein: I'll say two things about it. Number one, when we as a
City use less, it frees up more capacity for other users in the Bay Area. If
those other cities build out, they're going to be taking on more of the cost of
the Hetch Hetchy water system. We actually will save some money. If we
as a City...
Council Member Kniss: I hadn't thought of that. That's even taking it a step
further than I certainly would have thought.
Mr. Abendschein: You have to look at those long-term trends when you're
thinking about this. In the short term, yes, when we cut usage by quite a
bit, we end up having to add surcharges back to recover our fixed costs.
Council Member Filseth: Your rate goes up, but your bill doesn't go up
(crosstalk).
Mr. Abendschein: Right. That's another key—yeah. The other thing I'd say
though is that we've had some challenges recently with communicating
these things. People see themselves as conserving either through water
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efficiency or because of the drought, then their bills continue to go up. They
believe that that's happening because they conserved. The problem is we're
asking them to conserve at the same time as our costs are going up. Even if
they hadn't conserved, their bills would have gone up. Trying to
communicate that is something we have to also work on.
Council Member Kniss: One other thing. I don't remember how much of our
waste water goes to Mountain View. What is it roughly?
Ms. Fong: Our recycled water?
Council Member Kniss: Yeah, recycled.
Mr. Abendschein: The vast majority. They paid to build that recycled water
pipeline.
Council Member Kniss: One of the things Herb talked about is people who
are getting the recycled water, is there an increase in their cost?
Mr. Abendschein: We have very few recycled water customers. It's almost
entirely City usage.
Council Member Kniss: That's what I meant. It's Mountain View, so do we
charge them any more as our rates are going up for the infrastructure? It's
their infrastructure I realize.
Mr. Abendschein: We have very few costs associated with recycled water.
We've recovered those directly from the customers who are using the
recycled water. When we eventually build out our recycled water system,
we're going to have to give a lot of thought to our Recycled Water Rates.
We don't have recycled...
Chair Schmid: I think Herb was making the point that water itself is a value,
and that there's no difference to the user whether it's recycled or Hetch
Hetchy. Shouldn't they be charged the same rates? Including our
Recreation Department.
Mr. Abendschein: Given that these costs are not associated with the Water
Utility, we don't...
Ms. Fong: You can't double recover the same water.
Ms. Stump: If I may, just on that point. The San Juan Capistrano
discussion is very specific to what was going on in that jurisdiction. It's
difficult to generalize. Again, very fact specific these questions. What was
happening there is that they had a recycled water system that was available
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to some customers and not to others. Some customers who didn't receive
recycled water said that system was not a cost of serving them. The Court
said in that particular case, because in that system the provision of recycled
water to one group of customers freed up additional potable water that was
provided to others, the constitutional requirement was met. The court was
looking at some very specific language in Prop 218 that said that Cost of
Service only can include facilities that are immediately available to the user.
This was intended to prevent charging for when you don't have a hook-up at
all, when you're not on the system. The court said that was not intended in
this particular situation. It did support some flexibility for development of
infrastructure and charging that to the rate base when it benefits all.
Council Member Kniss: If I could just push on it a little more. We know that
there are a number of wells in the City. How are we addressing water use
from the wells? Or aren't we?
Ms. Fong: What we've been informed by the Santa Clara Valley Water
District is there are about 200 wells in the City. The Santa Clara Valley
Water District charges pump fees to those well owners who pump.
Groundwater here is managed by the Santa Clara Valley Water District.
Chair Schmid: Let me raise a couple of issues. As came out in the
discussion, the messaging is complicated and how you use words around it.
The Drought Surcharge, people associate that with not maintaining the fixed
revenue, but rather we need to cut back and this is a Drought Surcharge.
Maybe using a different term for that would make the messaging clearer.
We have to pay for the Hetch Hetchy rebuild for seismic safety. We have to
cover what we're losing.
Council Member Filseth: Calling it a Drought Surcharge is a really simple
message. It's a drought; water costs more. Everybody's going to get that.
Although, the mechanics are more complex.
Ms. Fong: Jon, you're going to correct me if I’m wrong here. The fixed
costs that we're covering are our own, not SFPUC's. The SFPUC costs are
recovered in the SFPUC rates. For us, it isn't about recovering Hetch Hetchy
costs; it's about recovering our own distribution costs.
Chair Schmid: Our own distribution costs are 25 percent of the SFPUC
number.
Mr. Abendschein: About 50 percent. Half of our costs are distribution. In
the total rate, about half the costs are distribution related; half are Hetch
Hetchy system related.
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Chair Schmid: I guess I saw a different number.
Council Member Filseth: There's been a lot of publicity in the last couple of
years about seismic upgrades to Hetch and Hetchy and the costs of those.
Mr. Abendschein: Maybe where the confusion is coming is that most of the
increase in our rates, almost all the increase in our rates, is related to the
Hetch Hetchy upgrade. That may be where that's coming from.
Chair Schmid: I'm concerned about the next step. The State and the PUC
have said there might be fines associated with not meeting the targets that
have been handed out. That is a drought penalty, and the message there is
if we don't meet the 25 percent, we will be fined substantial amounts.
That's a clear message, but we haven't got that yet. To use up the drought
message on something that is not this mandated fine might bind us when
the squeeze comes.
Mr. Abendschein: The squeeze is on already. From June 1st until next
February we will be measured against that 24 percent, and we may be fined.
(crosstalk)
Chair Schmid: That's what I’m talking about. We haven't had a fine yet.
Ms. Fong: Correct. What the State will look at, the Water Resources Control
Board, is whether or not we did a bona fide effort to try to achieve the
reductions that were assigned to us. We've been aggressive in everything
we've been doing including our rates. Beyond all that, all of our programs,
all of our messaging, our enforcement of the two days per week watering,
we've been very much out in front of a lot of other agencies. That will weigh
in if we don't hit the 24. Our customers have been just amazing, and we're
trying to be optimistic that we will hit the 24 percent target. If we don't, the
State will look at what we've done.
Chair Schmid: I was struck by the Sunday Chronicle article where the San
Francisco PUC, when the Governor cut back water allocations, said if you had
a claim by 1904 you were grandfathered in and the PUC has a 1902. They
then interviewed the head of the PUC who said, "We're going to fix that in
the summer and that date will no longer be protective." I don't want to be a
pessimist, but I assume that there will be a ruling in the next couple of
months saying that Hetch Hetchy water is not protected. That was the clear
implication (inaudible).
Ms. Fong: These legal actions—maybe Molly might know a little bit more.
Maybe it's so fresh she hasn't had a chance to look into it yet—are going to
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be ongoing. That's for certain. I wouldn't want to speculate on what's going
to happen there at this point.
Chair Schmid: That's not what we're talking about tonight. It is out there in
terms of the messaging, that we've got to be prepared for the next steps.
One other thing that flows from that is the Plan Bay Area. Does the City
have an attitude toward the impact of the drought on planning for the future
of the Bay Area and having that as a critical input to how fast California
grows, how big California can be, how many new ...
Mr. Abendschein: We probably want to have the Planning Director weigh in
on regional planning issues.
Ms. Fong: Exactly. We're probably not the right folks to answer that
question.
Mr. Abendschein: We know what our water allocations are. We know what
our water rights are. We know how that fits into our development.
Regionally, I'm not sure we're prepared to comment on that.
Council Member Filseth: You're asking the question of what's the
relationship between water consumption and population growth. I assume
Plan Bay Area is like, "We don't worry about that."
Ms. Fong: I don't know.
Mr. Abendschein: I think they do.
Chair Schmid: The Santa Clara Valley Water District has announced that
they will participate in the Plan Bay Area discussions.
Ms. Fong: I don't know that we're necessarily tied into that right now. For
every development that is brought forward, we do a water supply assurance
study. We are part of the development impact assessment.
Chair Schmid: As we go down the drought road though, that might be an
issue that comes out.
Ms. Fong: That gets considered.
Chair Schmid: Plan Bay Area is especially significant because they start the
process this summer. The question is will water be a part of the discussions.
It would be helpful to have it there. One last question, you say that we will
draw a little bit on reserves. I did not see any financial numbers in here.
What are the reserves we have, and how much would be drawn?
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Mr. Abendschein: It would take me a minute or two to bring up the total
reserves numbers. Right now, they're well above the minimum. The
$600,000 doesn't take us all that close to the minimum. In fact, we have a
fair amount of reserves that are set aside for Rate Stabilization and Capital
Improvement Reserves as we finish up this water system master planning
study in case there are some additional projects that we have to fund as a
result of that. We're comfortable with our reserves right now. What it may
result in is a slight acceleration of future rate increases, because we don't
have as much available for Rate Stabilization. We'll be very comfortable
with our Operational Reserves.
Chair Schmid: Given we're the Finance Committee, it would be nice if, when
it goes to the Council, you could have a paragraph on the amount of the
reserves.
Ms. Fong: Okay.
Mr. Abendschein: Not a problem.
Chair Schmid: Are we ready for a Motion.
Council Member Kniss: I think we are. Do you want me to read the whole
thing or would you ... I'm on Page 3 and under the recommendation:
“That's to adopt a Resolution, Attachment A, amending rate schedules and
so forth, and adopt a Resolution, Attachment C, activating the Drought
Surcharges”—I guess we're staying with that word—“at the 20 percent
reduction level effective in September.” Is there a second?
Chair Schmid: I will second that.
MOTION: Council Member Kniss moved, seconded by Chair Schmid to
recommend the City Council:
1. Adopt a Resolution amending rate schedules W-1 (General Residential
Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire
Service Connections), W-4 (Residential Master-Metered and General
Non-Residential Water Service), and W-7 (Non-Residential Irrigation
Water Service) to add Drought Surcharges and increase rates four
percent effective September 1, 2015; and
2. Adopt a Resolution activating the Drought Surcharges at the 20
percent reduced level effective September 1, 2015.
Chair Schmid: As the UAC said, we're coming out of a period of time where
we've had very low utility increases. We have seen substantial increases on
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the wastewater and the refuse and certainly on this. Now we're asking for
three separate increases, an 8, a 4, and a 20 percent surcharge. It is
important and significant and likely to have some questions coming in on
that. Appreciate very much the background material.
Council Member Kniss: Did we vote?
Chair Schmid: No. Just putting a word in. The communications is
important. It's good to see you preparing the way for that. We'll get some
public input when these rate bills start coming in. We're aiming for a
discussion of the surcharge in August. There'll be a public ...
Mr. Abendschein: On August 17th, there'll be a public hearing.
Chair Schmid: All in favor? That passes three to nothing.
MOTION PASSED: 3-0, Scharff absent
2. Amendment of Municipal Code Section 2.28.080 Regarding City
Council Budget and Table of Organization Amendment Approvals.
Walter Rossmann, Office of Management and Budget Director: Good
evening, Walter Rossmann, Budget Director. Just a short presentation to
summarize the item in front of you. As you know, we just adopted the
Budget yesterday. Thank you for your support during the last few weeks to
get the Budget through Finance Committee. Then what we do is once we
adopt the Budget, we have a midyear Budget review which it comes to you
usually in February. We make some major adjustments to some funds as it
may be in order to update you where we stand after six months of the
Budget being passed, how much expenditure, how the revenues are coming
in. Throughout the year, we do have Budget Amendment Ordinances. They
could be to any kind of Fund, the General Fund, Special Revenue Funds or
Enterprise Funds. The reasons are primarily unexpected events. It could be
a housing development which gets negotiated by the Planning Department.
It could be a grant we receive; we want to recognize those funds and we
want to expend those the same fiscal year. It could be something which we
sometimes forget to put in the Budget, something we didn't realize we
needed to do. The way we do this currently is through a Budget
Amendment Ordinance. That means that we produce a separate document
attached to the City Manager Report (CMR). Then this Ordinance gets
routed after it gets produced. If it reflects the same information in the
actual CMR, it's duplicative work. Then what we do is, once the Council
approves the Ordinance, it gets routed for signature and it gets filed. What
other cities do, and that's what I'm here proposing to you today, instead of
adopting a change to the Budget and to the Table of Organization, which
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reflects authorized positions, we do it by Ordinance or by Motion, which
doesn't mean any change from the Council's perspective, your vote.
However, it does make a change for us at the Staff level that we have to
produce one document less and we don't have to route it for signatures. I
request your support for this item. Thank you.
Chair Schmid: The goal is just efficiency, of being able to operate and
having top-level time available for other things than doing duplicate reports.
Council Member Kniss: You're skipping a step that expedites it.
Mr. Rossmann: That's correct. We are skipping a step; it's efficiency. It's
taking City Staff time towards more higher level work.
Council Member Filseth: Any reason not to do this? Any downside?
Mr. Rossmann: Not from my side. I checked with the Attorney's Office;
they're always in support for that. The cities who do this, the City of Santa
Monica, the City of San Jose, the City of San Diego. They do this type of
work by Motion.
Herb Borock: Thank you. I oppose this proposal. As the Staff Report
indicates, you'll be saving a trivial amount of Staff time. In exchange,
making it harder to find out what the historical record is of what City actions
are. All that's going to be in the record, if you find the right Action Minutes
or look at the right videotape, then you'll know this action has been taken,
as opposed to having a numbered Ordinance that's kept as historical record
that are easily accessible for the public. Sometimes I get the feeling in
bureaucracies that there are two tendencies which I believe are bad. The
first is that when an action is taken, such as the Council voting on it, then
that's the end of the story and you should forget about what's happened. In
government, the responsibility to the public is keeping an easily accessible
historical record of what you've done. The second tendency in some
bureaucracies is if somebody comes up and asks for something, some
document, then the assumption is they must have done something wrong as
opposed to someone just wanting information. If you make things harder to
find, you have that attitude, these are one way. Those of you who haven't
been on the Council for the past 15 years have not noticed this change until
you come to some Agenda item and ask the City Staff for the history of
what's been going. Unless they went to Bob Moss' house and looked in his
file cabinets, they wouldn't know about the single-story overlay. Since
you've made the change in minutes, you've not had the Action Minutes on
your Agenda for approval. What is someone supposed to do? Go to the
Clerk's website and look for a specific one if it's been posted yet and it's not
signed by anyone as being official. This is part of the same pattern. In
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terms of calling this a trivial amount of Staff hours saved, I'll give you an
example of some positions that have not been filled for a period of time in
the organization. The two Assistant City Manager positions were approved
in the Budget last year. It went on for about ten months before there were
appointments made. I believe the only reason they were made when they
were made was because it was just before the new Budget coming out. Can
you imagine someone coming to you at your first Budget hearing with those
positions both being vacant and saying why are these two even in the
Budget? Look at how much money we can save. We saved it all year
already. Other examples. I think it's been about five years since we've had
a permanent Assistant Chief of Police, yet it's in the Budget. One of the two
Captains has been serving as an Acting Assistant Chief of Police. A position
in the Planning Department, in advanced planning which now is called long
range planning, was vacant for a long time because the Director was not
given the authority to fill the position even though it was in the Budget and
authorized by the Council. That's just examples. It's throughout the
organization. To come in here and say, "It's an hour of time we're going to
save," it doesn't make sense that that's even the reason why it's being done.
It's one more step in making it harder to find out what the Council is doing.
Not just for the public but for future Council Members. The only way you
can have a historical record is if there is a written record that's easily
accessible and a Staff that is able to access that history. I would suggest
that you reject this proposal.
Council Member Kniss: I'd be interested in Walter's response to Herb's
comments.
Chair Schmid: Let me make a point. I was going to bring up the same
thing. I can recall being concerned about the parking district and the
parking rules. I went to the City website and put in—someone had told me
that the original thing had been done in 1998 or something. I entered that
into the website. It took me back to a couple of Ordinances that were very
clearly decisions by the Council about the parking district and about traffic
that became very important in my thinking. The question is if we shift to,
and we give some examples here.
Mr. Rossmann: Attachment C on Packet Page 58.
Chair Schmid: Of shifting from an Ordinance that Google categorizes by title
and you end up with that. Would I be able to find it, with the track
backwards 5 years, 10 years, 15 years, being good enough to get me to that
Page?
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Mr. Rossmann: That probably depends on how you search for information.
The way I do it, I go to the City Manager Reports and I pull it up through the
CMR. What the City Manager Report shows you is the actual transaction
right as it's proposed here in Attachment C. The actual financial transaction
is included in the recommendation language. The historical record would be
the City Manager Report with the recommendation language as approved by
the Council. That also becomes the record for the City Clerk's Office.
Versus having the same information of the recommendation language and
have an Ordinance as well.
Lalo Perez, Administrative Services Director and Chief Financial Officer: One
of the things that we started recently, Chair Schmid, is also listing the
Budget changes or amendments that we made in our quarterly reports.
What we could do is expand the data that is there, if that's something that is
needed. I'm trying to think out loud with you as to what else we would
need. That way there's a chronological listing of all the Budget amendments
in our financial reporting that could be looked at.
Chair Schmid: Something like that that can become a tracking device; you
would know where to go.
Mr. Perez: I would guess, given that we don't have the tagging mechanisms
in our systems as of yet, that that would be probably an easier search
because you can say, "I'm going to look for Fiscal Year 2014, see what
Budget changes were made."
Chair Schmid: You would have that on an annual basis, quarterly?
Mr. Perez: It would be quarterly and then the annual one would have the
summary of the year by fund. It would not just be one fund; it would be all
funds. You could go look there and we could reference the CMR maybe,
because there won't be an Ordinance anymore. We would reference the
CMR, and the person that is looking for the infrastructure could get the
information.
Chair Schmid: You would need a date to do that effectively.
Mr. Perez: We could add the date
Suzanne Mason, Assistant City Manager: Chair Schmid, Council Members,
Suzanne Mason, Assistant City Manager. I do want to share from an
administrative perspective our world has changed. The electronic world
we're in is very different than when we started with hard record Ordinances.
Our search capabilities are open government approach. It's transparent.
From my experience in the past, having individual Ordinances sometimes are
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not as easily accessible as the Staff Reports in the Council meeting. In our
City, we're trying to make everything accessible, but we're also trying to
take out manual process where we've implemented electronic approaches to
managing data. We're crossing over from one world to another. From a
legal perspective, this is an adequate way to record the change. From an
electronic perspective, we should be able to find those changes readily.
Chair Schmid: I'm just taking it from the perspective of a Council Member,
and there's continual change on the Council. People come without that
historical experience and background. It took me five years to find some of
these things, when you finally get enough searchable information that you
can go back and find it. I'm trying to think of how to facilitate that process,
whether a new Council Member or a new Member of a Commission or a
citizen who is concerned about something can find an easily searchable path
to answer the question of where did this come from.
Mr. Rossmann: If I may add one more thing. It's actually easier for the
recommended process to search information because the Budget
Amendment Ordinance number is assigned after the Council adopts the
Budget Amendment Ordinance. If you were to know that number, which we
currently reference in the report, you couldn't find it online. You'd have to
find the title of the CMR. With the process which Lalo is recommending, by
listing the title to the CMR which reflects the item, the CMR number
immediately creates a link to the website, where we can more easily find the
information. The new process will enhance your idea.
Chair Schmid: I'll make a suggestion that we—I'm not sure who the right
person is to do it—just draw up a page about that issue of online searching
for public, Council Members, Commission Members, trying to track and state
what you're asking for might improve or help those types of searches, so
that we enter this with a clearer notion in mind that what we're trying to do
is open up the process and make it more available rather than make it more
difficult.
Mr. Rossmann: If the Chair agrees with that, we could as a recommendation
to the full Council provide a summary of that as part of the Staff Report.
Would that work for you?
Chair Schmid: Okay.
Council Member Kniss: It's such a good conversation. I hear what you're
saying, but I've already noticed that I'm missing the minutes. Either we're
getting verbatim minutes which take that much to get through or we're just
getting Action Minutes which just says this is what you did. We're also going
to be missing the discussion of why we did the Budget amendment, if there
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is any discussion in our minutes. Maybe Suzanne is right. Maybe all this is
going to be electronic and be easily found. It isn't always the case so far.
Maybe in the future everything is going to fall into place.
Chair Schmid: The minutes are a different issue. That involves the Clerk's
Office.
Council Member Kniss: They're a different issue but the same issue,
because we're talking about history.
Chair Schmid: Yeah, about finding things.
Council Member Kniss: We're trying to find out what went on and what was
said. I don't want to lose any of the history that's in here because we want
to be expedient.
Council Member Filseth: Herb is basically asking a question, if I understand
it right, about transparency. It's a very low level transparency issue, but it's
finite. I was waiting for you to suggest implementing the recommendation
here and implementing the process that Lalo is suggesting be one thing. Is
that where you were going?
Chair Schmid: Yeah.
Mr. Rossmann: We can do that. That will be fine. We could provide you a
sample as part of the next Staff Report, which will document that for you.
Council Member Filseth: Am I allowed to ask members of the public what
they think?
Chair Schmid: Sure.
Council Member Filseth: Herb, what do you think? I was talking about
proceeding with this, but increasing the transparency.
Mr. Borock: You can start by removing the robot exclusion from the City's
website so the internet archive can again make available both what it has,
crawl through and did have when the current contractor started working for
the City, Civica. I use that and I made the mistake of accessing the City's
address rather than the cached one that was at the internet archive.
Somebody, I assumed it was the technologist at the City but it could have
been the contractor, decided in response to getting requests for addresses
that no longer were being serviced, they put a robot's exclusion and that
didn't just stop the internet archive from archiving current and future, but
also stopped access to everything prior. Make stuff available on the internet
archive, we can find it. We don't have access to the same computer
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systems you do when you go search for things. That's what I would
suggest. If you want to be transparent and figure out a way, happy to work
with Information Technology to see what is the easiest way and what kind of
help you may need. I would support funding for it to make those prior
internet addresses that the City had used in various formats to access
material in the past. They're not doing it now. The archive website is still
available if you know how to access it, but it's not being supported. That
still doesn't go back and cover all the things that were on the way-back
machine, the internet archive. That's a level of transparency.
Chair Schmid: Yeah, I think that is a broader issue.
Mr. Borock: Let us see it. There'll be someone who has a business of doing
that and is in the business of that. That's many years where that hasn't
been available. It was stopped when somebody tried to use it to access a
City document.
Chair Schmid: You're asking for one particular piece, the Budget
Amendment Ordinances (BAO), to be made more efficient. In a way you've
opened up an issue. It would be helpful if you could take that piece, the
BAO piece, and try and help us sort through what issues arise from this.
That might be helpful. Suzanne, it might be helpful from your perspective to
take a look at that and see if there's other steps that we could think about.
Mr. Perez: In general terms of transparency, I see us improving. One of the
things that we've done for example—I don't want to digress from the
Agenda item too much—to give you and the public some assurances that
we're working on that and that's our target is that we have, for example,
OpenGov which we had our proposed Budget available for the community to
look at online if they wanted to and look at the historical and do comparisons
and trending and download the data. Our salary, there's four years of
salary. You can look up any individual that's employed by the City of Palo
Alto or has been employed over the four years. In the big picture, we're
heading there. Its work in progress, as Suzanne mentioned. Unfortunately
with some of the older documents, it's hard because of the way they were
archived. They're not searchable, because they're not tagged. Technology
is improving, and we're able to get there. It's going to get better. The way
I look at is we're working with the people's money, and we want to be
transparent about how we manage those funds and how people find it. That
was the reason why we went with OpenGov because we wanted people to
see the Budget at the lowest possible level. If anything, we're fine with
additional transparency. We're trying to find the vehicle to do it in a good
efficient manner.
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Chair Schmid: We want to help you be more efficient. At the same time,
it's raised some very interesting questions. Kim, you might note that the
Clerk's Office should be aware of the issue as well, because you are in
charge of archives and how they're accessed. Can we make a Motion then?
Council Member Kniss: I like the Ordinances, I have to confess. I'm not
sure I'm in favor of making this change at this point. I'm not supporting it,
but we could send it forth and see what the rest of the Council thinks. They
might not have this wonderful deliberation time we've had.
Chair Schmid: If we do have a dissent, that is not unanimous and would not
go on Consent, but would allow you to write a broader memo and give the
context and the benefits of having a different type of searchable archive of
these Budget changes. It would be for full Council to make any decision.
Council Member Kniss: I have to confess that Herb bringing up the single-
story overlay, that we certainly missed some clues on, really troubled me.
Why wasn't that pulled up easily? That has nothing to do with your
Ordinance. It has to do with why couldn't we find something when we
needed it. That's my issue.
Council Member Filseth: We're verging in new territory here, which is
broader than the Finance Committee. It does deserve more. As I think of it,
when I was listening to Council Member Kniss, that's right. We're outside
the domain of this group. It's worth a discussion in front of the Council,
particularly with the Information Technology (IT) organization involved.
What I was envisioning was it would come and there would be this
explanation of we proposed to move away from using the Ordinance to track
this. Here's what we're going to replace that with that's going to improve
accessibility and transparency in this way. That's worth a discussion
including more than Finance.
Chair Schmid: If you feel comfortable putting that on the Council's Agenda,
that's what we're looking for. If you've captured Eric's Motion.
Council Member Filseth: I'd rather you made the Motion. You'll get the
words (crosstalk) and I won't.
Chair Schmid: Let me put down the recommended Motion that the Finance
Committee recommends the City Council to amend the Municipal Code which
would change the City Council Budget and Table of Organization Amendment
approval from Ordinance to Motion. With that will come a description of the
consequences for search and transparency of material for future Council
Members, the public and Commissioners in the City.
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MOTION: Chair Schmid moved, seconded by Council Member Filseth to
recommend the City Council amend Municipal Code Section 2.28.080 titled
“Amendments after Adoption” which would change the City Council Budget
and Table of Organization Amendment approval from an Ordinance to a
Motion, with that will come a description of the consequences for a search
and availability transparency of material for future Council Members, the
public and Commissioners.
Council Member Filseth: I hope it's clear that it shouldn't come just as is
and say, "Transparency has gone down." There should be ...
Chair Schmid: Some description.
Mr. Perez: Some examples.
Council Member Filseth: What's the replacement?
Mr. Perez: We know.
Chair Schmid: Any help that you need from the City Manager's Office or the
Clerk's Office, you could feel free (inaudible) intern. All in favor of that
Motion? All opposed?
Council Member Kniss: I'm going to abstain, because I want to hear this full
discussion. Anyone else voting?
MOTION PASSED: 2-1 Kniss abstain, Scharff absent
Chair Schmid: I want to make sure it goes to the Council (crosstalk).
Council Member Kniss: It will.
Mr. Perez: It would, yes.
Council Member Kniss: There are two of you with one abstention. It goes
on.
Chair Schmid: Greg Scharff has made the point before that you need a
negative vote in order to go on the Action Agenda. I want to make sure it
gets on the Action Agenda.
Ms. Mason: The Committee can recommend, even with a unanimous vote,
that it be placed on the Action. That's what the Staff understands.
Chair Schmid: Yeah, I think your point is correct.
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Mr. Lalo: It's an Action item to us.
Council Member Kniss: One of the things you could do, if I might say so, is
do a demo for us. Just as interesting, you put it all in writing, do a demo,
show us how it changes. Pull it up. Do the ...
Mr. Rossmann: Do a dog and pony show.
Council Member Kniss: Yeah. It helps to do the dog and pony show. It
really does.
Future Meetings and Agendas
Lalo Perez, Administrative Services Director and Chief Financial Officer: You
have your break, as you know, so we do not have a meeting in July. Our
next scheduled meeting is August 18th. At that point, we'll be bringing you
the third quarter Financial Report, which will include the listing of the Budget
Amendment Ordinances (BAO). We're going to bring to you a more
expansive City Debt Policy. Currently, we have a City Debt Policy, but it's
pretty narrow, pretty simple. As we are talking about expanding the
issuance of debt, we believe that it's important and something that the
Finance Committee had asked us to. We're finally ready to do that. We'll be
bring that to you on August 18th. Currently there's nothing on the Agenda
for September 1st.
Chair Schmid: You have the pension and retiree.
Mr. Perez: Sorry, let me correct myself. We had pension and retiree on
September 1st, but City Manager Keene will be absent that day, so we're
moving those items to September 15th. We believe that you would probably
want to make sure that he's here for that discussion.
Suzanne Mason, Assistant City Manager: He wants to be here for that
discussion.
Mr. Perez: Thank you. He wants to be here for that discussion. We also will
have Mr. John Bartel joining us. The Council has found it very useful to have
Mr. Bartel share his experience California-wide on these two issues. We're
preparing documentation internally. We anticipate being able to meet that
date of September 15th with a bit of a caveat that it is the summer break
and some of us are gone. We're going to try our best to make sure we have
the discussion. Personally I see it that this is the beginning of multiple
discussions about this subject obviously.
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Chair Schmid: It has been brought up numerous times. It's great to have
this well before you get into the Long Term Financial Forecast because it's
such an important piece of thinking about our future.
Mr. Perez: That's as far as I’m going right now. As we get more Agendas,
we'll report on them in August at our first meeting.
Council Member Kniss: I missed it. You're moving the pension to the 15th,
but what is on the 1st?
Mr. Perez: Right now there's nothing else scheduled on the 1st.
Council Member Kniss: Right now, the 1st is not scheduled or it is scheduled
but nothing's on it?
Mr. Perez: Correct. Let's leave it on the calendar.
Council Member Kniss: Cancel if necessary.
Mr. Perez: In August, we'll cancel if necessary unless there's a scheduling
conflict that the committee is aware of.
Chair Schmid: After May, we've earned a couple of weeks off.
Council Member Kniss: I am gone September 1st, if that (crosstalk).
Mr. Perez: You are? That helps.
Council Member Kniss: That's why I was pushing on that.
Mr. Perez: That's another reason why to move it to the 15th.
Chair Schmid: We are looking forward to summer break.
Mr. Perez: Thank you and enjoy your break.
Chair Schmid: Thank you. Meeting is closed.
ADJOURNMENT: Meeting was adjourned at 7:37 P.M.
Attachment B
NOT YET APPROVED
150325 jb 0131328 1
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Section 2.28.080
(Amendments after Adoption) of Chapter 2.28 (Fiscal Procedures) of the Palo
Alto Municipal Code to __________________
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Section 2.28.080 Amendments after Adoption of Chapter 2.28 (Fiscal
Procedures) of the Palo Alto Municipal Code is amended to read as follows:
2.28.080 Amendments after adoption.
During the fiscal year, the city manager shall amend the budgetary accounts of the city to
reflect the following:
(a) Additional Appropriations. By a two‐thirds vote, the council may make additional
appropriations of receipts that are in excess of the total estimated receipts and appropriations
contained in the adopted budget.
(b) Additional Positions. By a majority vote, the council may add positions to the table of
organization.
(c) Transfer of Appropriations.
(1) By a majority vote, the council may transfer part or all of the unencumbered balance of
any appropriation from one fund, department, office, or capital project to another;
(2) By written authorization, the city manager may direct the redistribution, within any
department or office, of the unencumbered balance of appropriations within the departments
or offices, provided that he or she shall not make transfers from the classification of utilities
purchased for resale to any other object or make transfers between funds or transfers between
departments without the affirmative vote of a majority of the council;
(3) By written authorization, the city manager may authorize a transfer of appropriation from
the unallocated balance of the contingent account to any department, office or capital project.
Funds shall not be transferred between the general fund and the enterprise funds, nor between
operating and capital funds.
(d) Transfer of Positions. By written authorization, the city manager may transfer positions or
assign personnel from any department or office under the control of the city manager to
another in accordance with Article IV, Section 6(n) of the Charter.
(e) Inter‐fund Transactions. In the event that appropriations and equivalent offsetting credits
for allocated inter‐fund services or transfers are affected by amendments to appropriations for
Deleted: by ordinance
Deleted: by ordinance
Deleted: by ordinance
Attachment C
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direct expenditures or estimated revenue, the city manager may make corresponding
adjustments to the inter‐fund accounts so affected.
(f) Salaries and Benefits. Amendments to the Employee Classification and Compensation Plan
adopted by the council pursuant to Article III, Sections 12, 18 and 21 of the Charter.
(g) Prior year Encumbrances. Appropriations that were encumbered by properly executed,
but uncompleted, purchase orders or contracts at the close of the previous fiscal year may be
carried forward and incorporated with appropriations of the current year.
(h) Municipal Fee Schedule. By a majority vote, the council may, by ordinance, add or change
fees in the municipal fee schedule.
SECTION 2. The City Council finds that this ordinance is exempt from the
provisions of the California Environmental Quality Act pursuant to Section 15061(b)(3) of the
California Environmental Quality Act Guidelines, because it can be seen with certainty that
there is no possibility of significant environmental effects occurring as a result of the adoption
of this ordinance.
SECTION 3. This ordinance shall become effective upon the commencement
of the thirty‐first day after the date of its adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Asst. City Attorney City Manager
____________________________
Director of Administrative Services
Attachment C