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HomeMy WebLinkAbout1998-05-21 City Council (4)BUDGET ’98- ’99 City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTENTION: FROM: FINANCE COMMITTEE CITY MANAGER DEPARTMENT: CITY MANAGER DATE: SUBJECT: May 21, 1998 CMR: 243:98 RECOMMENDATION FOR CHANGES TO THE PROPOSED 1998-99 BUDGET TO IMPLEMENT THE SAND HILL CORRIDOR IMPROVEMENT .PROJECTS REPORT IN BRIEF Stanford University has the obligation, under the Development Agreement approved by the City Council on June 30, 1997 and the voters on November 4, 1997, to reimburse the City for various City staff and consultant costs associated with implementation of the Sand Hill Corridor Projects. This report identifies the resources that will be needed by the City to support the Sand Hill Corridor Projects and recommends changes to the Proposed 1998- 99 Budget that is currently under review by the Finance Committee to accommodate these resource.requirements. All expenditure requirements identified in this report will beoffset by fees generated from Stanford. RECOMMENDATION Staffrecommends the Finance Committee approve funding associated with providing various City services related to Stanford’s Sand Hill Corridor Project as follows: 1) Additional appropriation of $21,4,000 and additiona! revenues of $297,0,00 Planning Department Proposed 1998-99 Budget; 2) Additional appropriation of $24,000 and additional revenues of $106,000 to the Fire Department Proposed 1998-99 Budget; 3)Additional appropriation of$118,000 and additional revenues of$118,000 the Public Works Department Proposed 1998-99 Budget; CMR: 243:98 Page 1 of 6 4)Additional appropriation of $121,000 to the Water System Extension Capital Improvement Project (CIP) Project No. 8013 and additional revenues of $121,000 to the Water Fund Budget; 5)Additional appropriation of $250,000 to the Gas System Extension CIP Project No. 8017 and additional revenues of $250,000 to the Gas Fund Budget; and 6)Additional appropriation of $121,000 to the Wastewater Collection System Extension CIP Project No 8020 and additional revenues of $121,000 to the Wastewater Collection Fund Budget. Staff also recommends that the Council waive standing committee review of the scope of work for archaeologist/historian, arborist and creek restoration consulting contracts. BACKGROUND On June 30, 1997, the City Council approved the set of developments (i.e., apartment, senior housing, Shopping Center expansion and roadway modifications) known as the Sand Hill Corridor Improvement Project (Project). The voters ratified the Council’s action on November 4, 1997. The Council adopted Mitigation Measures, Conditions of Approval and a Development Agreement that requires Stanford University, as the developer, to fund a variety of City staff activities and City consultants. This obligation is in recognition of the very unusual size of the developments~ the complexity of City infrastructure modifications and project permitting tasks, and the anticipated multi-year phased construction schedule. The Development Agreement also provides that the City will not require Stanford to pay any fees otherwise payable under the Municipal Fee Schedule if services are performed by a City consultant funded by Stanford. DISCUSSION Since early 1998, Citystaff and Stanford Management Company representatives have been meeting to explore Project implementation issues, and identity the best combination of resources to carry out the City’s and Stanford’s obligations related to the Project. This report identifies the resources needed by the City to support the Project and recommends changes to the 1998-99 Proposed Budget currently under discussion by the Finance Committee to fund these needs. The report also requests revenue increases for reimbursement of consulting costs and payment of fees from Stanford associated with the Project. The additional costs and revenues associated with providing various City services to Stanford to implement the Project are described below by department. CMR: 243:98 Page 2 of 6 Planning and Communi .ty Environment Department The Building Inspection Division of the Planning and Community Environment Department has the responsibility for reviewing the Project plans to ensure conformity to the City’.s Uniform Codes, issuing building permits and inspecting construction activity. In order to accommodate this work, the Building Division plans to rely primarily on hourly hired City employees to do Sand Hill Corridor related work. Some contract consulting assistance may also be necessary. Staff recommends an increase in the Building Inspection Division’s Proposed 1998-99 Budget of $94,000 for the cost of the hourly City employees and contract assistance. In accordance with the City’s Municipal Fee Schedule, Stanford will be billed for building plan check and permit fees, which will cover these costs. Accordingly, staff recommends revenue increases of $177,000 for the building plan check fees anticipated in 1998-99. Although these plan check fees are anticipated in 1998-99, receipt may occur later depending on the progress of the project. The Planning Division of the Planning and Community Environment Department has several Project obligations that will be managed by the Deputy City Manager. First, the Planning Division has entered into a contractual agreement with a Senior Planner who will work on the Project on a full-time basis. The Senior Planner’s duties will include, among many other tasks, the Planning Division’s plan check work scope. Thus, Stanford will reimburse the City for the costs of the Senior Planner and is not obligated to pay the City’s normal planning plan check fees. Staff recommends an increase to the Planning Division Proposed 1998-99 Budget of $120,000 to cover the maximum costs for the contract Senior Planner position. As Stanford will fully reimburse the City for the costs of these services, staff also recommends an increase to Planning. Division revenues in the Proposed 1998-99 Budget in the amount of $120,000. The remaining project obligation of the Planning Division relates to archaeological, arborist, and creek restoration work. The City and Stanford staff have .agreed that the most expeditious way to handle archaeological and historical work is to have one consultant, under contract to the City. The alternative is to have Stanford retain an expert and the City retain a second expert to monitor the Stanford consultant. This alternative approach would have the potential for conflicting and confusing professional opinions. Given the extensive amount of pre-construction archaeological work, a Request for Proposals (RFP) has been issued. Responses to the RFP are due in May 1998. Staff plans to bring the contract to Council for approval in July 1998. An RFP for a consultant to monitor arborist and creek restoration work has also been issued with responses due in May 1998. As with the archaeology consultant, there is significant pre-construction work to be performed by the arborist and creek restoration consultants. Staff also plans to bring these contracts to Council for approval in July 1998. At that time, staff will bring a Budget Amendment Ordinance for the associated revenue and expenditures increases for the archaeologist, CMR: 243:98 Page 3 of 6 arborist and creek restoration consultants. Staff recommends that the Council waive standing committee review of the scope of work for these consultants (archeologist/historian, arborist/creek restoration) due to the urgent need to establish contracts and begin work on the Project. Fire Department The Fire Department’s plan Check, permitting and inspection services are proposed, to be handled in a similar manner as the Building Inspection Division. A combination of regular staff and hourly City employees will be utilized to support the Project. Staff recommends an increase of $24,000 in the Department’s Proposed 1998-99 Budget to cover the costs of the additional hourly City employees required to support this effort. In accordance with the City’s Municipal Fee Schedule, Stanford will be billed for fire plan check, which will cover these costs. Accordingly, staff recommends revenue increases of $106,000 in 1998- 99 for the plan check fees. Although these plan check fees are anticipated in 1998-99, receipt may occur later depending on the progress of the project. Public Works Department The tasks that are the responsibility of the Public Works Department, the Transportation Division of the Planning and Community Environr~ent Department and the Real Property Division of the Administrative Services Department will be supported by a consultant contract administered by the Public Works Department. Specific tasks include a wide variety of engineering work, surveying and inspections. An RFP will be issued during late Summer 1998 with Council approval of a contract anticipated in Fall 1998. Total consultant costs for the entire Project are anticipated to be approximately $680,000. Staff recommends an increase of $118,000 to the Public Works Department Proposed 1998-99 Budget to pay for the consulting services required next fiscal year. Since the Development Agreement requires Stanford to reimburse the City, staff also recommends revenue increases of $! 18,000 to the Public Works Department budget in 1998-99. Electric Fund Stanford is obligated under the City’s,Utility Rules and Regulations to pay the design and connection costs associated with providing ’connections to City’s Electric Utility. The Electric Fund will use existing staff for the majority of the City’s work on the Project. Stanford will reimburse the City for the costs in accordance with the City’s Utility Connection Rate Schedules. In 1998-99, the Electric Utility will use a Customer Design and Connection CIP (Project No. 9901 - Stanford West Underground Extension) to fund this work. This CIP project has adequate funding in 1998-99. Water/Gas/Wastewater Utilities CMR: 243:98 Page 4 of 6 The Water/Gas/Wastewater Utilities will handle the Project in the same manner as the Electric Utility. Existing customer design and connection CIP projects in each fund will be used to record costs associated with the Project. Like the Electric Fund, Stanford will reimburse the City for its capital costs, in accordance with the City’s Utility Connection Rate Schedule. In order to cover the additional costs related to this project, staff is requesting additional funding in the Proposed 1998-99 Budget of $121,000, $250,000, $121,000 to the Water, Gas and Wastewater Funds, respectively. A corresponding increase in utility connection revenues from Stanford in each of these funds is also recommended. Staff is negotiating the design and construction of the gas system extensions with Stanford. The costs shown for the Gas System Extensions only includes the City design costs for the gas system extensions in FY 98-99. If the City does ultimately design and construct the gas system extensions, staff will bring a construction contract and a Budget Amendment Ordinance for the associated revenues and expenditures to Council for approval. RESOURCE IMPACT The resources paid for by Stanford are essential to implementation of the Project. While the additional resources will relieve City staff of some work implementation of the Project will be a major activity for numerous City departments. Staff is recommending the following revenue and expenditure changes to the Proposed 1998-99 Budget associated with the implementation of the Project. Revenues Planning $297,000 Fire $106,000 Public Works $118,000 Water Gas $121,000 $250,000 Wastewater $121,000 Expenditures - Operating, - Capital $214,000 .$24,000 $118,000 $121,000 $250,000 $121,000 POLICY IMPLICATIONS Implementation of the Sand Hill Corridor Projects is consistent with adopted City policies. CMR: 243:98 Page 5 of 6 The archaeologist/historian and arbor:st creek restoration consulting contracts will be forwarded to the Council for approval in July 1998. These contracts will be accompanied by a Budget Amendment Ordinance for the associated revenue and expenditure increases: The Public Works and related engineering contract will be forwarded to the Council for approval in Fall 1998. Implementation work on the Sand Hill Corridor Projects will occur during the next four fiscal years. ENVIRONMENTAL REVIEW Approval of budget modifications is not a project under the California Environmental Quality Act. PREPARED BY: R. SCHREIBER Deputy City CITY MANAGER APPROVAL: [~ roger / Special? JUI~]~city ~cts cc: Robert Reidy (Stanford Management Company) CMR: 243:98 Page 6 of 6