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Home My WebLink About1998-03-17 City Council (7)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTN:FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:MARCH 17, 1998 CMR:169:98 SUBJECT:1997-98 MIDYEAR FINANCIAL SUMMARY AND BUDGET~ AMENDMENT ORDINANCE RECOMMENDATION Staff recommends the City Council adopt the attached Budget Amendment Ordinance (BAO), which reflects midyear adjustments to the 1997-98 Budget, on the basis of updated revenue, expenditure and reserve balance projections, adjustments resulting from storm- related emergency response and repairs, and a proposed new Capital Improvement Program (CIP) project for a utility bill remittance processor. .DISCUSSION This report summarizes the financial results for the first six months of fiscal year 1997-98, and updates budget projections for the full fiscal year, including reserve balances for the General Fund and the Utilities Funds. Also included in this report is a BAO, including Exhibits A and B, reflecting the associated budget adjustments being requested, and Exhibit C, describing a proposal for a new CIP. .RESOURCE IMPACT Adoption of the attached ordinance will allow for certain adjustments to the fiscal year 1997- 98 Budget, based on updated projections and the establishment of a new CIP. Included in the adjustment is a reduction of $1.3 million from the Reserve for Emergencies to provide funds for emergency response and repairs related to the recent flooding emergency. It is anticipated that normal budget savings in operating departments will provide funds to replenish this reserve at year end. CMR:169:98 Page 1 of 2 POLICY IMPLICATIONS Adoption of the midyear BAO does not represent any change to existing City policies. ENVIRONMENTAL ASSESSMENT This is not a project for purposes of the California Environmental Quality Act (CEQA). The appropriation of the proposed new CIP, the purchase of utility bill remittance processing equipment, is not a project for the purposes of CEQA. ATTACHMENTS 1997-98 Midyear Financial Results Budget Amendment Ordinance Exhibit A - General Fund, Special Revenue Funds, and Capital Improvement Fund Exhibit B - Enterprise Funds Exhibit C - Utility Bill Remittance Processor, CIP No. 19817 PREPARED BY:Linda Craig, Senior Financial Analyst Tony Sandhu, Senior Accountant Joe Saccio, Senior Financial Analyst APPROVED BY: CITY MANAGER APPROVAL: Act~g Director Administrative Manager CC: n/a CMR: 169:98 Page 2 of 2 EXECUTIVE SUMMARY GENERAL FUND The General Fund adopted budget for 1997-98 included a surplus or addition to reserves of $1.6 mil- lion. Financial results during the first six months of this fiscal year would have increased the surplus by $1 million, primarily due to stronger than anticipated tax revenues. However, $1.3 million is being withdrawn from the Reserve for Emergencies, so the General Fund is projected to end the year with a $1.3 million addition to reserves. The continued high level of local revenues as of midyear confirms a vigorous economy in Palo Alto during 1997. Revenue increases have been principally driven by stronger-than-anticipated transient occupancy, documentary transfer and tele- phone utility user taxes. Projected sales tax revenues are slightly below the budget estimate, but above 1996-97 levels by $1.4 million. Midyear 1997-98 General Fund Summary 1997-98 1997-98 1997-98 Midyear 1996-97 Adopted Adjusted Projected Actuals Budget Budget Budget Expenditures remain on targe’t with the adopted bud~ get. Costs associated with the 1998 winter storms are not yet fully known, although $1.3 million is being withdrawn from the Reserve for Emergencies at this time. It is expected that normal budget savings within the General Fund departments will provide sufficient funds to replenish this reserve at year end. Difference Revenues Sales Taxes 18,277 19,995 19,995 19,700 (295) Property Taxes 7,735 8,177 8,177 8,370 193 Utility Users Tax 5,509 5,414 5,414 5,485 71 Transient Occupancy Tax 5,107 4,900 4,900 5,700 800 Other taxes, fines & penalties 5,299 5,253 5,253 5,718 465 Service fees and permits 9,087 8,365 8,391 8,705 314 Charges to Other Funds 6,938 7,411 7,417 7,619 202 Rental Income 9,544 10,594 10,618 10,639 21 Other Revenues 8,101 7,968 8,377 8,71 l 334 Total Revenues 75,597 78,077 78,542 80,647 2,105 Plus Operating Transfers In 12,759 12,962 12,962 12,962 0 Plus Encumbrances and Reappropriations 3,068 3,068 Total Source of Funds $88,356 $91,039 $94,572 $96,677 $2,105 Expenditures Administrative Departments I 1,876 12,729 14,775 14,775 0 C6~munity Services ! 6,514 17,466 18,426 18,494 68 Fire 12,841 12,723 13,536 13,614 78 Planning 4,498 4,666 5,703 5,715 12 Police 15,354 15,856 16,704 16,722 18 Public Works 9,965 10,748 I 1,510 12,028 518 Non-Departmental 4,816 8,168 6,102 6,810 708 Contingency for Prop. 218 1,000 1,000 1,000 Total Expenditures 75,864 83,356 87,756 89,158 1,402 Operating Transfers Out 6,469 6,090 6,173 6,173 0 Total Use of Funds $82,333 $89,446 $93,929 $95,331 $1,402 Net Surplus/(Deticiti $6,023 $1,593 $643 $1,346 $703 The Budget Stabilization Reserve (BSR) will remain capped at 20 percent of the adopted budget, or $17.9 million. Funds in excess of this amount are being placed in the Reserve for Infrastructure Improve- ments, in accordance with Council’s priority regarding infrastructure. UTILITY FUNDS Electric Fund revenues are projected to increase 13.5 percent, or $10.8 mil- lion, above the adjusted budget, resulting from increased energy usage dur- ing the summer months and the sale of excess power. The Electric Fund Rate Stabilization Reserve (RSR) is projected to end the year at $23.2 million, or $4.2 million above the max- imum guideline established by Council. Reserve targets are being revised and will be presented for Council approval with the adoption of the 2.5 1998-99 Budget. The Calaveras Reserve is projected to end the year at $55 million, which rep-2 resents an increase of $2.8 mil- lion above the adjusted § ~.~ budget.~ Gas sales are below budget at 1 midyear, and are projected to be $.8 million less than the 0.5adjusted budget at year end. The Gas Fund RS~ is projected to be reduced by$.9 million,o but it will still exceed its maxi- mum limit by $3.8 million by year end. A rate reduction will be proposed with the 1998-99 Budget. 1995-97 Sales Tax in Millions I I I 95/3 95/4 96/1 96/2 ,~ Dept stores £~- Auto Sales ~. Restaurants .~. Misc Retail ~r Elec Equipment ~. Fum/Appliance , 1 I I I I 96/3 96/4 97/t 97/2 97/3 Year/Qtr Water sales show only a slight increase at midyear, reflecting seasonal water consumption. Water pur- chase costs bxe also up, therefore, there will be no change in the projected year end RSR. Refuse Fund revenues are slightly ahead of budget, primarily due to increased disposal fees and royalty income from methane gas exploration at the landfill. The Refuse Fund RSR is projected to end the fiscal year at $4 million, which is equal to the maximum tar-. get. Other Utility Funds: The Wastewater Collection Fund is anticipated to exceed its maximum RSR guideline by $1.7 million, in part due to increased rev- enues from industrial groundwater discharge fees and interest earnings. The Wastewater Treatment Fund has remained within budget for the first half of the year and no adjustments are proposed. Actual. revenues and expenditures in the Storm Drainage Fund are on target and no overall adjustments are proposed at this time. GENERAL FUND REVENUES Sales Tax: By year end, sales taxes are expected to be $.3 million, or 1.5 percent, below an ambitious 1997-98 Budget. Expected annual receipts of $19.7 million, however, will be $1.4 million greater than 1996-97 levels. This shortfall results primarily from the loss of a key tax generator in the light industry seg- ment, the loss of car leasing tax revenue due to a state regulation change, and declines in the volatile elec- tronic equipment segment. Property Tax: Budgeted property tax receipts are being adjusted upward by $.2 million in anticipation of $8.4 million in revenues for 1997-98, as Palo.Alto is beginning to realize property tax gains from growth in assessed property values. Rising residential and commercial property values, and higher personal property taxes on business and manufacturing equip- ment have contributed to the increase. Transient Occupancy Tax: Transient Occupancy Tax (TOT) revenues have risen to new levels in 1997-98 and are projected to reach $5.7 million by year end. This is an 11.6 percent increase over 1996-97 actual receipts. The addition of rooms at the Cabana Hotel, the high demand for rooms in general, combined with a high percentage of occupancy, are the primary factors causing the increase. Other Taxes, Fines and Penalties: Documentary transfer tax revenues have soared in 1997-98, and are expected to be 15.3 percent abrve 1996-97 revenues. This reflects a strong commercial and residential real estate market. Receipts are expected to total $2.3 mil- lion in 1997-98 representing a $.4 million increase over the budget. Parking citation revenues have increased over the past year, and are expected to exceed the 1997-98 adopted budget by $.07 million. Utility User Taxes: As a whole, Utility User Tax (UUT) revenues are anticipated to rise $.07 million over budget, chiefly as a result of strong UUT tele- phone receipts. Solid growth in the number of Internet lines and in business activity has contributed to higher revenues. UUT revenues from utility sales are expected to be slightly lower than 1997-98 budget projections. Service Fees and Permits: Revenues from permits and other service charges will increase by $.3 million. These include an increase of $. 15 million in new building permits, due to the strong real estate market and the construction of the new Palo Alto Medical Foundation campus, an increase in the reimbursement from Stanford for,1996-97 Fire/Communications ser- vices contract, and other program-related increases. These increases are offset by a reduction of $.05 mil- lion in Paramedic Service Fee collections, which is a result of fewer billed transports during the past six months, compounded by the larger-than-normal write-off of prior year’s uncollectible billings. Interest Income: Interest earnings in the General Fund are increasing by $.3 million as a result of grow- ing cash balances which can be attributed in large part to higher-than-anticipated revenue growth in the Tran- sient Occupancy Tax and other revenues. This level of increase will be able to be maintained even with flood- related costs and a slight drop in interest rates. Gas Tax: Gas taxes are expected to be up $.09 million this year. This increase in revenue has likely been stimulated by greater personal and business automo- bile travel in the thriving economy. EXPENDITURES Except for the expenditure changes which are pro- posed at midyear and are discussed below, the General Fund departments are on target with the 1997-98 adopted budget. General Fund departments will likely show savings at year end, as well, consistent with prior years’ experience. These savings will vary from department to department ,and are therefore not included in the attached Budget Amendment Ordi- nance or in the attached Fund Summary. Utility Line Clearing Services: Additional funds are required for tree trimming contract services in Public Works to clear around utility power lines. This is a result of the California Public Utilities Commission (CPUC) requirement for greater clearance distances from power lines and increased tree growth after two years of heavy winter rains. These costs are reim- bursed by a transfer from the Electric Fund. Emergency Street Repairs: The recent 1998 winter storms caused significant damage on Palo Alto Ave- nue between Tasso and Webster. An emergency con- tract to repair the embankment and roadway in that area has been awarded. The Public Works Department budget is being increased in the amount of $.3 million to cover this contract, which_also includes repair of damage to culverts in the Arastradero Preserve, repair of the roadway and embankment on Los Trancos Road and minor repairs in other locations. Fire Overtime Costs: In June 1997, the Fire Depart- ment began an agreement with the Los Altos County- Fire Protection District to add additional staffing (on an overtime basis) at the Foothills Park fire station during the high fire danger season. The agreement was approved too late for funds to be included in the 1997- 98 Budget. Between July and September 1997, $.08 million in costs were incurred, and this has been fully reimbursed by the District. ~ Planning Costs: Additional photographs of the Los Trancos Road (Arrillaga) subdivision proposal were requested by the Council at a cost of $7,500. In addi- tion, on February 23, 1998, Council approved $3,722 for the cost of renting a temporary mobile trailer for the Urban Ministry to use as an interim facility. Junior Museum and Zoo Projects: Working with Neighbors Abroad, the Junior Museum and Zoo is developing an interpretive exhibition on the Philip- pines which will be installed in May 1998. Neighbors Abroad has raised funds for the exhibit, and entered into a contract with the City to fund the construction and maintenance costs. In addition, the Friends of the Junior Museum and Zoo has agreed to donate $9,000 to fund a part-time volunteer coordinator at the facil- ity. The amount is added to the Community Services budget. Parks Maintenance: The Parks Division budget is increased by $.04million to cover bids that came in higher than expected for parks maintenance work that -- has been contracted in accordance with the recom- mendations of the Hughes-Heiss study. Police: $15,000 is being added to the Police Depart- ment budget to cover the costs of monitoring the new valet parking regulations, as mentioned in CMR and the need for a minimum number of dispatchers and officers on each shift; additional overtime require- ments to support large investigative efforts including the downtown homicide; and planning and staffing requirements for presidential visits. No adjustments in the Police Department salary budget for 1997-98 are being proposed, as it is anticipated that the department will have regular salary savings due to vacancies that will offset the increased overtime expenditures. Should the department exceed its salary and benefits budget at year end, an adjustment will be included in the 1997-98 Year End Report. Miscellaneous Interfund Adjustments: The previ- ously budgeted interfund transfer from various, utili- ’ ties to the Public Works Department for a soils testing contract is being deleted, in the future, this contract will be billed directly to each utility fund. Reserve for Emergencies: The Reserve for Emergen- cies in the General Fund is will be reduced by $1.3 million, and this amount will be transferred to various accounts in the General Fund to cover costs for debris removal, emergency repairs and protective measures ~’elated to the recent flooding emergency. These expenditures are eligible for reimbursement by FEMA. It is anticipated that normal budget savings within departmental budgets will provide funds to replenish this reserve. 404:97 on October 6, 1997. The budget is also being increased by $4,500 to cover costs associated with a Women in Law Enforce- ment Conference. These costs were fully funded by registration fees. In addition, the Police Depart- ment overtime expenditures in the first six months of the fiscal year were $.6 million, compared to the annual budget for overtime of $.7 million. This is due to vacancies in Communications and Patrol General Fund Reserves ($ Millions) 1996-97 1997-98 1997-98 1997-98 1997-98 1997-98 Actuals Adopted Adjusted Midyear Projected Projected 06/30/97 Changes Changes Changes 06/30/98 Changes Reserves Budget Stabilization 17.9 1.8 -1 -0.8 17.9 0 Streets/Sidewalks 0.4 -0.2 0.1 0.3 -0.1 Emergencies 5.6 - 1.3 4.3 - 1.3 Infrastructure 8.2 2.7 10.9 2.7Improvements ReapprOpriation/ Encumbrances 3.7 3.7 0 Inventory &2.8 2.8 0Notes Receiv. Total Reserves 38.6 1.6 - 1 0.7 39.9 1.3 4 CAPITAL IMPROVEMENT FUND UTILITY FUNDS City Council Chambers Refurbishing: The City Council has defined the scope of the City Council Chambers Refurbishing Project. Accordingly, an appropriation to increase the Capital Improvement Project by $.4 million is provided. Funds were previ- ously included in the City Manager’s contingency, so this has no net financial impact. Utility Customer Payment Projects: A new project in the amount of $. 14 million is proposed at midyear to purchase new Utility Bill Remittance Processing Equipment (see description in Exhibit "C"). This project is proposed because hardware support from the vendor of the existing equipment will be discontinued in April 1998 and the supplyof spare parts is no longer available. This~ equipment is critical to the daily processing of utility bil! payments (revenues average approximately $500,000 daily). Because of the critical nature of this equipment, it is not advisable to wait until 1998-99 for acquisition of a new remittance processor. In addition, $11,000 is being added to an existing project to fund an interface to provide "real time" updates of customer accounts to the new Utilities CIS system. This additional item was identified in CMR:479:97 on December 15, 1997, when the con- tract for purchase of automated point-of-sale software from Core Business Technologies was approved. These two items will be funded by the utility funds. Downtown Parking Structures: The CIP project, Downtown Parking Structures (19530), is being changed to Downtown Parking Structures (9850), to better allow for project management and accounting. There is no change in the amount budgeted. ELECTRIC FUND Electric Fund sales to local customers are $3.3 million higher than budget at midyear, mainly a result of an increase in energy usage during the summer months. In addition, the City has begun selling power to other power marketers on the wholesale market and the bud- get is being increased by $8.2 million to reflect these revenues. Revenues from joint capital projects will be $.7 million lower due to delay in the construction of Underground District Number 37. Power purchases costs are $3.9 million higher than budget at midyear, primarily due to the purchase of additional power for resale on the wholesale market. Interfund transfers are bein~ increased by $.2 million for an increased level of utility line clearing services. Also being added is $. 1 million for legal and consult- ing services related to electric deregulation and tele- communications activities and $.04 million for the street light replacement program and for temporary help in Electric Operations. The Electric Rate Stabili- zation Reserve (RSR) is projected to be $23.2 million by year end, $4.2 million above the Council approved maximum guideline level. A revised reserve policy will be proposed for the utility funds in conjunction with the 1998-99 Budget. Interest earnings of $2.8 million are also being transferred from the RSR to the Calaveras Reserve. GAS FUND Gas sales for 1997-98 are being adjusted downward by $1.3 million for the year, based upon the actual gas consumption at midyear. On the other hand, the City has additional revenues from the sale of its excess gas transmission capacity to other marketers. As a result, only a net $.8 million reduction in budgeted revenues is proposed. The price of natural gas has risen moderately since the budget was adopted. In order to cover the additional costs, a $.09 million budget increase is requested. Despite the proposed decrease .in gas revenues, the year end Gas RSR is projected to be $10.6 million, $3.8 million above the maximum target reserve level. WATER FUND Despite occasional wet weather during the second quarter, water sales revenue as of midyear was 5 per- cent above budget, due to a slight increase in water consumption. Although sales have increased, staff believes that it is not prudent to adjust the water reve- nue budget at this time. Water purchase costs, which reflect the higher water consumption, were $.08 million above the budget at midyear. Staff is requesting a $.2 million budget increase to cover the costs of current and any future increase in the water consumption. Other operating expenses remain close to the budget and no changes are proposed at this time. The RSR balance at the end of 1997-98 is projected to be approximately $6.3 million, slightly more than midway betwebn the target and maximum levels. , IREFUSE FUND Refuse Fund revenues are over budget in the fol- lowing categories: disposal fees at the landfill site, and royalty income from methane gas explo- ration at the landfill. Interest earnings are also above the budget as a result of higher cash bal- ances due to delays in the acquisition of the Los Altos Treatment Plant site. Offsetting these. increases is a $. 1 million downward adjustment in revenues to the City’s share of PASCO-billed services, reflecting lower actual PASCO reve- nues during the first half of this fiscal year. On the expense side, rio major variances are pro- jected at midyear. The Refuse RSR is projected to be close to its maximum guideline level of $4 million at year end. $25 $20 $15 $10 $5 ’ $o WASTEWATER COLLECTION FUND Wastewater Collection revenues are projected to be $.2 million higher than the adopted budget. Of this amount, $. 1 million is due to higher groundwater dis- charge fees resulting from an increase in the volume of industrial sewage discharged by local industry; the balance of the revenue increase ($..1 million) stems from higher-than-projected interest earnings. WASTEWATER TREATMENT FUND Revenues and expenditures are close to budget in the first half of 1997-98 and require no adjustments to the adopted budget. The Fund’s RSR is projected to remain within the guideline limits. STORM DRAINAGE FUND Storm Drainage revenues and expenditures are on budget at midyear. The attached BAO includes a transfer of $.05 million from the capital to operating expense budget to pay for costs associated with updat- ing the Federal Emergency Management Agency (FEMA) flood zoning maps. 1997-98 UTILITY FLeD RESERVES IN THOUSANDS i Projected E3 Target RSR Electdc Gas Refuse Storm Dm WWColl VWVTreat. Water 6 ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY ~OF PALO ~ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1997-98 TO ADJUST BUDGETED REVENUES AND EXPENDITURES IN ACCORDANCE WITH THE RECOMMENDATIONS IN THE MIDYEAR REPORT WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 23, 1997 did adopt a budget for fiscal year 1997-98; and WHEREAS, after reviewing the current budgeted revenues ahd expenditures for fiscal year 1997-98,adjustments to the budget are recommended to more accurately reflect.year-end projections; and WHEREAS, due to flooding emergencies in February 1998, funds need to~_be withdrawn from the Reserve for Emergencies for debris~ removal, emergency repairs and protective measures; and NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTIQN Io The sum of Eight Hundred Thousand Nine Hundred Nine Dollars ($800,909) is hereby transferred from the Budget Stabilization Reserve (BSR) in the General Fund to the Reserve for Infrastructure Improvements in the General Fund, which reduces the BSR from $18,700,909 to $17,900,000. SECTION 2. The sum of Two Million Seven Hundred Thirty Two Thousand Four Hundred Eighty Seven Dollars ($2,732,487) is hereby added to the Reserve for Infrastructure Improvements, which increases from $8,152,042 to $10,884,529. SECTION 3. The sum of Seventy One Thousand Dollars ($71,000) is hereby added to the Streets and Sidewalks Reserve in the General Fund to reflect Utility User Tax revenue changes as displayed in Exhibit Ao As a result of this change, the budgeted Streets and Sidewalks Reserve will increase from $271,000 to $342,000. SECTION .4. The Reserve for Emergencies is hereby decreased by the sum of One Million Three Hundred Thousand Dollars ($1,300,000) to reflect emergency expenditure increases as described in Exhibit A, which is attached to this ordinance and incorporated herein by this reference. AS a result of these changes, the budgeted reserve will decrease from $5,600,000 to $4,300,000. SECTION 5. A new Capital Improvement Project, No. 19817 in the Administrative Services Department, described in Exhibit C and incorporated herein by this reference, is appropriated in the sum of $140,000. Funding is provided with an interfund transfer from various Utilities Funds in an equivalent amount. ~ The appropriation for Capital Improvement Project No. 18614, in the Administrative Services Department is increased in the sum of $Ii,000. Funding is provided with an interfund transfer from various Utilities Funds in an equivalent amount. SECTION 7. The appropriation for Capital Improvement Project No. 19625 in the Public Works Department is increased in the sum of $390,000. Funding is provided with an interfund transfer from the General Fund in a corresponding amount. SECTION ..8, Capital Improvement Project No. 19530, Downtown Parking Structures, in the Public Works Department is changed to Major Project No. 9850, Downtown Parking Structures. There-is no change in the amount budgeted for this project. SECTION 9. The sum of Two Million Six Hundred Forty Thousand Eight Hundred Fifty Four Dollars ($2,640,854)is hereby added to the budgeted Rate Stabilization Reserve (RSR) in the Electric Fund to reflect changes in the Electric Fund as displayed in Exhibit B, which is incorporated herein bY this reference. ~SECT~0N 9. The sum of Two Million Eight Hundred Thousand Dollars ($2,800,000) is hereby added to the Calaveras Reserve in the Electric Fund to reflect changes in the Electric Fund as displayed in Exhibit B. $~. The sum of Three Hundred Forty Four Thousand One Hundred Eighty Two Dollars ($344,182) is hereby added to the Central Valley Project Reserve in the Electric Fund to reflect changes in the Electric Fund as displayed in Exhibit B. SECTION 11. The sum of Nine Hundred One Thousand Five Hundred Twenty Six Dollars ($901,526) is.hereby reduced from the budgeted Rate Stabilization Reserve in the Gas Fund to reflect changes in the Gas Fund as displayed in Exhibit B. SECTIQN 12. The sum of Ninety Five Thousand One Hundred and Dollars ($95,100) is hereby reduced from the budgeted Rate Stabilization Reserve in the Water Fund to reflect changes in the Water Fund as displayed in Exhibit B. SECTION 13. The sum of Two Hundred Seventy Five Thousand Dollars ($275,000) is hereby reduced from the Reserve for Reappropriations and the sum of Two Hundred Seventy Five Thousand Dollars ($275,000) is added to the CIP Carryover Reserve in the Water Fund as displayed in Exhibit B. SECTION 14. The sum of’One Hundred Ninety One Thousand Three Hundred Dollars ($191,300) is hereby added to the budgeted Rate Stabilization Reserve in the Refuse Fund to reflect changes in the Refuse Fund as displayed in Exhibit B0 ~. The sum of One Hundred Ninety Two Thousand Two Hundred Dollars ($192,200) is hereby added to the budgeted Rate Stabilization Reserve in the Wastewater Collection Fund to reflect changes in the Wastewater Collection Fund as displayed in Exhibit B. SECTIQN l~. The sum of Two Thousand Eight Hundred Dollars ($2,800) is hereby reduced from the budgeted Rate Stabilization Reserve in the Storm Drainage Fund to reflect changes in the Storm Drainage Fund as displayed in Exhibit B. SECTION 97. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 18. The Council of the City of Palo Alto hereby finds that the enactment of this ordinance is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 19. As provided in Section 2.04.350 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: .AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Mayor Senior Asst. City Attorney City Manager Acting Director, Administrative Services Department EXHIBIT A 1997-1998 Midyear Adjustments General Fund, Special Revenue and Capital Improvement Funds Activity O~ect Code Code Revenues 02000000 1181 02000000 1101 02000000 1103 02000000 1107 02000000 1185 02000000 1180 02708340 1203 02706290 1347 02750010 1267 02750010 1299 02751110 1309 02000000 1399 026~4100 1457 02511143 1920 02513250 1925 02817340 1599 02000000 1601 02817340 1801 Expenditures 02513250 3126 02613100 3203 02618100 3503 02708340 3004 02706290 3122 02751130 3004 02817340 3003 02817340 3200 02817340 3003 02814220 3126 02000000 3702 02000000 4041 02000000 3822 102000000 3850 03000000 1187 03000000 1186 03000000 3823 Description Sales Tax Property Tax- Secured Property Tax- Unsecured Property Tax - Airplane Tax Transient Occupancy Tax Documentary Transfer Tax Parking Violations Seminar Fees (Women in Law Enforcement) Stanford Fire Service 96-97 Year End Adj. , Other Service Contracts (Los Altos Co. FD) ’Paramedic Service Fees Other Fees (In Lieu Property Tax - PAMF) New Building Permits Reimbursement for Services to Enterprises Electric Line Clearing Service . Revenue from other agencies Interest Income Contributions (Friends of Museum and Zoo) Change in General Fund Revenues Electric Line Clearing Contract Services Planning Photo Expense Urban Ministry Emergency Rental Valet Parking Monitoring Women in Law Enforcement Conference Fire Suppression Overtime - Station #8 Neighbors Abroad Exhibit Neighbors Abroad Exhibit Friends of Museum Volunteer Coordinator Parks Maintenance Contracts . Contingency for Council Chambers Transfer to ClP Total General Fund Expenditures Net Change in General Fund Budget Stabilization Reserve ’Infrastructure Reserve ;Net Change in General Fund Reserves Utility Users Tax -Telephone Utility Users Tax - City Utilities Net Change in Utility User Revenues Streets and Sidewalks Reserve Change (295,0001 128,000 30,000 ¯ 35,000 800,000 395,000, 70,00014,5ool 87,000 78,000 (50,000 45,000 150,000 (16,200 217,570 21,368 325,000 9,000 2,034,238 (217,570 (7,500 (3,722 (15,000 (4,5001 (78,000 (7,868 (13,500 (9,000 (38,000 682,000 (390,000 ($102,660 $1,931,578 (800,909 2,732,487 1,931,578 207,000 (136,0001 71,000 71,000 EXHIBIT A 1997-1998 Midyear Adjustments General Fund, Special Revenue and Capital Improvement Funds Activity O~ect Code Code 02511100 3100 02000000 3702 Description Emergency Street Repairs Non-Salary Contingency 12000000 3850 Reserve for Emergencies SPECIAL REVENUE FUNDS e~sTa x _Fund 31000000 1520 Gas Tax 31000000 1522 , Gas Tax ,Increase in Gas Tax Revenues 31000000 3850 Change in Fund Balance Change (300,000: (1,000,000 (1,300,000 28,000 60,000 88,000 88,000 CAPITAL 71000000 2011 71000000 2052 71000000 2053 71000000 2055 !71000000 2054 ~71000000 2056 ~71000000 2051 IMPROVEMENT FUND Transfer from General Fund Transfer from Electric Fund Transfer from Gas Fund Transfer from Refuse Fund Transfer from Wastewater Collection Fund Transfer from Storm Drainage Fund Transfer from Water Fund Total ClP Revenue 71000000 3879 71000000 3879 71000000 3879 Utility Biil Processing Machine ClP (new) CORE cash receipt interface - CIP 18614 Council Chambers Refurbishing - CIP 19625 Total CIP Expenditures 390,000 75,800 40,800 8,700 7,800 2,800 15,100 541,-~ (140,0001 (11,000 (390,000 (541,000 Activity Object Code Code ~=lectric Fungi EXHIBIT B 1997-98 Midyear Adjustments Enterprise Funds Descriptions Debit Credit 23 250220 3925 23 230160 -3611 ;23 230160 3612 23 000000 1711 23 000000 1712 23 000000 1713’ 23 000000 23 000000 23 000000 23 000000 23 000000 1722 23 000000 1728 23 230160 3315 23 230160 3107 23 260280 3107 23 220250 3003 23 220230 3229 23 250220 3104 23 250220 3920 23 000000 4041 ~h~nge~R~s~rve Electric Line Clearing Electric Purchases Electric Purchases Electric Sales - Single Family Electric Sales - Multi Family Electric Sales - Commercial 1714 Electric Sales - Industrial ’ 1715 Electric Sales - Public Agencies 1255 Other Revenues - Pac Bell 1810 Other Revenues - Cable Co.op Wholesale Electric Sales Wholesale Direct Electric Sales Joint-Agency Debt Service Contract Services Contract Services Temporary Salaries Supplies Contract Services Interfund Transfers - Soil Testing Services Transfers to Capital Improvement Proj Fund 217,570 6,240,000 11,425,399 435,000 312,000 544,766 50,000 50,000’ 15,000 25,000. 1,700 75,800, 1,490,000 5,936,395. 2,535,334 4,051,568~ 2,281,102~ 8,701,472 179,700 1,700 23 000000 23 000000 23 000000 3804 Change to RSR 3808 Change to Calaveras 3827 Change to CVP O&M Reserve Total Electric Fund ~as_Fu~d -- 2,640,854I 2,800,000 344,182 25,177,271 25,177,2711 24 000000 1601 24 230160 3604 24 000000 1711 24 000000 1712 24 000000 1713 24000000 1714 24 000000 1715 24 000000 1722 24250220 3104 24250220 3920 24 000000 4041 Interest Income Gas Commodity Purchases Sales - Single Family Residential Sales - Multi Family Residential Sales - Commercial Sales - Industrial Sales - Public Facilities VVholesale Sales Contract Services. Interfund Transfers - Soil Testing Services Transfers to Capital Improvement Proj Fund 85,000 11,887,276 5,500 40,800 50,000 1,740,000 3,987,0001 3,881,000. 984,000 469,550. 5,500’ ~hang~_R_eserve 24 000000 3804 Change to RSR Total Gas Fund , 901,526~ __~2:0T8,576 12,01~ + + + + + + + + + + + + + + + + +’ + + + + + + Activity Object Code Code Water Fund 22 000000 1601 22 230160 3603 22 250790 3879 22 250220 3104 22 250220 3920 22 000000 4041 Chan_g~jn_Reserve 22 000000 3801 22 000000 3804 Re{use F~nd 25 551430 1401 25 000000 1601 25 000000 --1660 25 000000 1431 25 000000 4041 Chan~q~j~_Reserv_e 25 000000 3804 WWCogecti_onF~nd 27 250290 3104 !27 250290 3920 27 000000 1601 27 000000 1711 27 000000 1712 27 000000 1713 27 000000 1714 27 000000 1715 27 000000 1752 27 000000 4041 Change_in_Reserve 27 000000 3804 Storm_Drainage Fund 28581520 3199 28581790/8870 3879 28 000000 4041 C~angein_R~serve 28 000000 3804 EXHIBIT B 1997-98 Midyear Adjustments Enterprise Funds Descriptions Debit Credit Interest Income Water Purchases JL Project Expenditure Contract Services Interfund Transfers - Soil Testing Services ’Transfers to Capital Improvement Proj Fund Change to Reappropriation Reserve Change to RSR Total Water Fund Disposal Fees Interest Income Royalty Income Special Revenues from PASCO Transfers to Capital Improvement Proj Fund Change to RSR Total Refuse Fund Contract Services Interfund Transfers - Soil Testing Services Interest Income Sales - Single Family Residential Sales - Multi Family Residential Sales - Commercial Sales - Industrial Sales - Public Facilities Groundwater Discharge Fees Transfers to Capital Improvement Proj Fund Change to RSR Total WW Collection Fund Contract Services JL Project Expenditure Transfers to Capital Improvement Proj Fund Change to RSR Total Storm Drainage Fund L 160,000 275,000 4,500 15,100 80,000 4,500 275,0001 95,100! 454,600 100,000 8,700 19i,300 300,000 454,600 100,000 150,0001 50,0001 300,000 4,500 6,452,000, 7,800 4,500 100,000 1,422,000 3,099,000 1,595,000 336,000 100,000 192~200 6,656,500’ 6,656,500 + + + + + + + + + + -+ + + 45,000 + 45,000 2,800,+ 2,800, 47,800 47,800" Total Enter rise Fund 44 654 747 44 654 747! Attachment 1 ELECTRICFUND SUMMARY (ooo’s) REVENUE Electric Sales Other Revenues Reappropriations / Enc TOTAL REVENUE EXPENSES Purchases Other Expenses TOTAL OPERATING EXPENSES Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES Midyear Adjusted Projected Actual Budget Budget FY 96-97 FY 97-9~FY 97-98 Difference 62,164 65,218 76,754 11,536 12,835 10,085-9,338 (747) 6,957 4,352 4,352 0 81,956 79,655 90,444 10,789 25,843 27,214 31,964 (4,750) 29,623 35,078 35,332 (254) 55,466 62,292 67,296 (5,004) 13,729 11,818 11,818 0 69,195 74,110 79,114 (5,004) 12,761 5,545 11,330 5,785 RESERVES Rate Stablization Calaveras Other Reserves Total 24,329 20,569 23,210 2,641 41,680 52,178 54,978 2,800 5,847 4,654 4,998 344 71,856 77,401 83,186 5,785 FY 97-98 APPROVED RsR LEVELS Minimum Target Maximum 9,500 14,250 19,000 9,500 14,250 19,000 Attachment 2 GAS FUND SUMMARY (ooo’s) REVENUE Gas Sales Other Revenues Reappropriations /Enc TOTAL REVENUE EXPENSES Purchases Other Expenses TOTAL OPERATING EXPENSES Capital Expenses TOTAL EXPENSES TOI(FROM) RESERVES RESERVES Rate Stablization Other Reserves Total FY 97-98 APPROVED RSR LEVELS Midyear Adjusted Projected Actual Budget Budget FY 96-97 FY 97-98 FY 97-98 Difference 20,125 21,334 20,559 (775) 9,734 9,822 9,907 (85) 6,706 8,314 8,356 (42) 16,440 18,136 18,263 (127) 4,447 4,664 4,664 0 20,887 22,800 22,927 (127) (762)(1,466)(2,368)(902) 13,015 11,519 10,617 (902), 3,745 3,775 3,775 0 16,760 15,294 14,392 (902) Minimum Target Maximum 3,401 5,102 6:802 3,401 5,102 6,802 16,229 17,791 16,966 (825) 2,133 1,677 1,727 50 1,763 1,866 1,866 0 REVENUE Water Sales Other Revenues Reappropriations / Enc TOTAL REVENUE EXPENSES Purchases Other Expenses TOTAL OPERATING EXPENSES- Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES Attachment 3 WATER FUND SUMMARY (ooo’$) Midyear Adjusted Projected Actual Budget Budget FY 96-97 FY 97-98 FY 97-98 .13,280 12,149 12,149 1,252 775 855 2,526 2,195 2,195 17,058 15,119 15,199 4,815 4,544 4,704 6,370 7,546 7~561 .11,185 12,090 12,265 4,846 4,372 4,372 16,031 16,462 16,637 1,027 (1,343)(1,438) Differ~ence 0 8O 0 80 (16o) (15) (175) o (175) (95) RESERVES Rate Stablization Other Reserves Tota! 7,814 6,411 6,316 (95) 769 829 829 0 8,583 7,240 7,145 (95) FY 97-98 APPROVED RSR LEVELS Minimum Target Maximum 3,666 5,499 7,865 3,666 5,499. 7~65 Attachment 4 REFUSE FUND SUMMARY (ooo’s) REVENUE Customer Revenue Other Revenue Reappropdations / Eric TOTAL REVENUE EXPENSES Payments to PASCO~ Other Expenses TOTAL OPERATING EXPENSES Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES Midyear Adjusted Projected Actual Budget Budget FY 96-97_FY 97-98 FY 97-98_Difference 18,506 18,572 18,572 0 2,901 4,451 4,651 200 309 881 881 0 21,716 23,904 24,104 6,338 7,199 7,199 13,255 15,182 15,191 19,593 22,381 22,390 600 3,477 3,477 20,193 25,858 25,867 ÷ 1,523 (1,954) (1,763) 20O 0 (9) (9) 0 (9) 191 RESERVES Rate Stablization Other Reserves Total 5,885 3,813 4,004 191 472 590 590 0 6,357 4,403 4,594 191 FY 97-98 APPROVED RSR LEVELS Minimum Target Maximum 2,017 3,026 4,034, 2,017 3,026 4,034 Attachment 5 WASTEWATER COLLECTION FUND SUMMARY (ooo’s) REVENUE Customer Revenues Other Revenues Reappropdations / Enc TOTAL REVENUE EXPENSES Sewer TreatmentExp, Operating Expenses TOTAL OPERATING EXPENSES Capital Expenses Principal Payments TOTAL EXPENSES TO/(FROM) RESERVES Midyear Adjusted Projected Actual Budget Budget FY 96-97 FY 97-98 FY 97-98 Difference 8,683 8,906 8,906 0 1,565 1,214 1,414 200 4,864 5,513 5,513 0 15,112 15,633 15,833 200 3,824 4,157 4,157 0 1,993 2,685 2,693 (8)" 5,817 6,842 6,850 (8) 9,601 10,487 10,487 0 165 175 175 0 15,583 17,504 17,512 (8) (471)(1,871)(1,679)192 RESERVES Rate Stablization Other Reserves Total 8,454 6,567 6,759 192 372 388 388 0 8,826 6,955 7,147 192 FY 97-98 APPROVED RSR LEVELS Minimum 2,526 2,526 Ta~et 3,789 3,789 Maximum 5,052 5,052 Attachment 6 WASTEWATER TREATMENT FUND SUMMARY (ooo’s) REVENUE Treatment Revenues Other Revenues Reappropriations /Enc TOTAL REVENUE EXPENSES Operating Expenses TOTAL OPERATING EXPENSES Capital Expenses Principal Payments TOTAL EXPENSES TO/(FROM) RESERVES Adjusted Actual Budget FY 96-97 FY 97-98 Midyear Projected Budget FY =97-98 10,559 11,431 11,431 584 566 566 2,942 2,984 2,984 14,085 14,981 14,981 10,894 11,610 10,894 11,610 2,475 2,540 360 380 13,729 14,530 356 451 11,610 11,610 2,540 380 14,530 ~451 Difference 0 0 0 0 0 0 0 0 0 RESERVES Rate Stablization Other Reserves Total FY 97-98 APPROVED RSR LEVELS 2,803 3,124 3,124 1,015 1,103 1,103 3,818 4,227 4,227 Minimum Target Maximum 1,697 2,546 3,393 1,697 2,546 3,393 0 0 Attachment 7 STORM DRAINAGE FUND SUMMARY (ooo’s) REVENUE Midyear Adjusted Projected Actual Budget Budget FY 96-97 FY 97-98 FY 97-98 Difference Customer Revenues Other Revenues Reappropriations / Enc 2,063 2,125 2,125 0 51 68 68 0 4,758 3,903 3,903 0 TOTAL REVENUE EXPENSES 6,872 6,096 6,096 Operatin~Expenses TOTAL OPERATING EXPENSES Capital Expenses Principal Payments TOTAL EXPENSES TO/(FROM) RESERVES 1,544 1,861 1,909 (48) 1,544 1,861 1,909 (48) 6,825 4,551 4,506 45 275 285 285 0 8,644 6,697 6,700 (3) (1,772)(601)(604)(3) RESERVES Rate Stablization Other Reserves 1,291 618 615 (3) 0 0 0 0 Total 1,291 618 615 (3) FY 97-98 APPROVED RSR LEVELS Minimum N/A N/A Target 500 500 Maximum N/A N/A ¢IP EXHIBIT C PROJECT DESCRIPTION This project will replace the current utility bill remittance processing machine (UNISYS $40) with a new, vendor- supported remittance processor. In addition, the new system will have optical imagining capability. The system will be used to continue in-house procegsing of the more than 104,000 utility payments which are received monthly by the City. PROJECT JUSTIFICATION The vendor is discontinuing support of the current utility bill remittance hardware as of April 1998. Various options were explored, including contracting out bill remittance and finding someone locally to provide hardwaresupport. When remittance processing was moved in-house in the early 1990s, this was done because of the inconsistency and volatility of the outside vendors which had been used. These reasons are still true today. It was not po.ssible to find local hardware support, and there is an international shortage of parts for the current processing machine. For all these reasons, it makes sense to replace the current system with another one. Further, the optical imagining component will eliminate issues related to storage cost and increase efficiency through the use of non-paper files for research. FUTURE FINANCIAL REQUIREMENTS FISCAL YEAR PY Budget 1997-98 1998-99 1999-00 2000-01 2001-02 AMOUNT $140,000 COMPONENTS To purchase new system. Includes $11,000 for maintenance in the first year. Sources of Funding: Enterprise Funds. as show in the table below. ELECTRIC GAS REFUSE 1998-99 $70,000 $39,200 $7,000 IMPACT AND SUPPORT ANALYSIS STORM WASTE- DRAINAGE WATER WATER TOTAL $2,800 $7,000 $ i 4,000 $140,000 Environmental:Not a project under CEQA. Design Elements:None. Operating:None. Telecommunications:None. COMPREHENSIVE PLAN The Comprehensive Plan contains no policies or programs directly related to this project. 2