HomeMy WebLinkAbout2015-03-03 Finance Committee Agenda Packet Finance Committee
Tuesday, March 3, 2015
Regular Meeting
Community Meeting Room
7:00 PM
Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in
the Council Chambers on the Thursday preceding the meeting.
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Call to Order
Oral Communications
Action Items
1. Discussion of a New Residential Curbside Collection and Composting
Program, Commencing FY 2016 and Acceptance of Ongoing Staff
Efforts to Later Present to Council for its Approval or Adoption: (1)
Amendment No. Two to Greenwaste of Palo Alto Agreement, Extending
the Term Until June 30, 2021, (2) Ordinance Requiring Commercial
Customers to Take Commercial Organics Service and Undertake Efforts to Reduce Garbage Contamination, and (3) New Refuse Rate
Structure, Including an Increase in Residential Customers Rates Over a
Three-year Period
2. Finance Committee Recommendation Regarding Adoption of a Budget
Amendment Ordinance Amending the Budget for Fiscal Year 2015 to
Adjust Budgeted Revenues and Expenditures in Accordance with the
Recommendations in the FY 2015 Midyear Budget Review Report
3. Preliminary Financial Forecasts and Rate Changes for Electric, Gas,
Wastewater Collection, and Water Utilities
1
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Adjournment
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City of Palo Alto (ID # 5546)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 3/3/2015
City of Palo Alto Page 1
Summary Title: Discussion of New Zero Waste Program Plans and Rate
Structure Modifications
Title: Discussion of a New Residential Curbside Collection and Composting
Program, Commencing FY 2016 and Acceptance of Ongoing Staff Efforts to
Later Present to Council for its Approval or Adoption: (1) Amendment No.
Two to Greenwaste of Palo Alto Agreement, Extending the Term Until June
30, 2021, (2) Ordinance Requiring Commercial Customers to Take Commercial
Organics Service and Undertake Efforts to Reduce Garbage Contamination,
and (3) New Refuse Rate Structure, Including an Increase in Residential
Customers Rates Over a Three-year Period
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee:
1. Discussion of a new residential curbside collection and composting program
of food scraps commingled with yard trimmings in the green carts, effective
July 1, 2015;
2. Accept Staff’s preliminary recommendations to extend GreenWaste of Palo
Alto’s Agreement for Solid Waste, Recyclable Materials, Organic Materials
and Yard Trimmings Collection and Processing Services (GreenWaste’s
Contract) through June 30, 2021 and develop amendments that would help
increase diversion and efficiencies;
3. Accept Staff’s preliminary plans to adopt and implement a new City
ordinance that would require businesses to subscribe to commercial
City of Palo Alto Page 2
compostable service and sort their wastes so that there will be less than
10% contamination in any container;
4. Accept Staff’s preliminary plan to develop and implement a new refuse rate
structure along with a three year schedule to increase refuse rates charged
to the Residential Sector;
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. Since then, the City’s waste diversion rate
has not increased as desired, especially given our Zero Waste Goal by 2021. The
next big step in the City’s efforts to attain its zero waste goals is getting
compostables out of the landfill, as they make up 40% of today’s garbage. In this
report, Staff proposes a series of activities to keep the compostable materials out
of the landfill, which include: modifying the GreenWaste Contract, providing
residential food scrap collection, and adopting an ordinance requiring commercial
customers to recycle and compost in an optimal manner. Staff is also proposing
to modify the City’s Refuse Rates to encourage recycling and composting while
balancing residential and commercial rates. Staff recommends pursuing the
following three new diversion related actions:
1) Collect residential food scraps curbside commingled with yard trimmings,
beginning July 1, 2015;
2) Amend the Contract, extending the term until 2021, and focusing on the
collection and diversion of residential food scraps comingled with the yard
trimmings and commercial food scraps; and
3) Implement an ordinance that would require commercial customers to
subscribe to a rigorous composting and recycling service.
These three actions can be accomplished in an efficient and cost-effective manner
and are forecasted to divert and recover 7,000-8,000 tons of compostable
material currently being landfilled every year for less than a three percent overall
budget cost increase of $790,000. The result of this diversion should increase the
Palo Alto diversion rate from 78% to approximately 82%, higher than most other
City of Palo Alto Page 3
cities in the United States and reduce greenhouse gas emissions by over 3,800
metric tons of CO2 equivalent each year.
Refuse rates have not increased since July 1, 2012 and in fact were decreased in
November 2014 due to the change in service delivery model for the street
sweeping program. Staff is also recommending a three-year plan to adjust
Residential Refuse Rates to an amount that will cover these new diversion related
expenses as well as balance Residential and Commercial rates. While the amount
of the rate increase required is still being determined, preliminary analysis
suggests that the residential rates would need to be increased by approximately
9% in FY 2016 and 8% in both FY 2017 and FY 2018 for mini-can and 32 gallon
containers. Changes to the rates for FY 2016 will be incorporated into the FY
2016 budget process. Staff is also recommending a structural change to the
Refuse Rates that would eliminate listing fixed charges on monthly bills, in
addition to improving the refuse billing system accuracy by contracting with
GreenWaste to perform this function in the commercial sector.
Background
In 2005, the disposal of recyclable and compostable materials in landfills
represented 10% of the greenhouse gas emissions for the entire Palo Alto
community. That year, Council adopted a policy to achieve Zero Waste by 2021.
In 2007, a Zero Waste Operational Plan (ZWOP) was developed that identified
specific actions necessary to achieve zero waste. The City has made tremendous
progress implementing zero waste programs over the past seven years. The
diversion rate, which was approximately 60% in 2005, had increased to
approximately 80% in 2010 then leveled-off (or slipped a little due to the increase
in economic activity in the City) since then because the diversion programs such
as the commercial compostable collection program have been fully implemented
as designed. This increased diversion from landfills has resulted in significant
reductions in greenhouse gas emissions. One of the major programs that has
helped the City drive towards zero waste is the collection of commercial
compostables (e.g., food scraps, food soiled paper, and compostable plastics).
Over 11,000 tons of commercial waste annually has been diverted from landfills
and composted. Yet, commercial customers still send over 7,000 tons of
compostable material to the garbage. The commercial customers’ collective
garbage also is filled with over 6,500 tons of recyclable materials. While some of
the recyclable material in the garbage is recovered at the Sunnyvale Material
City of Palo Alto Page 4
Recovery and Transfer (SMaRT) Station, the compostable materials placed in the
black garbage carts are nearly all lost to the landfill.
Compostable Material
GreenWaste took over curbside refuse collection in July 2009 (CMR 416:08),
implementing a number of new zero waste programs including a commercial
compostable collection program and worked aggressively to add customers to the
compostables collection program. A mandatory recycling and composting
ordinance was considered in 2009, but was never implemented. Staff began
discussions to implement the ordinance in 2010, however, later that year when
the Refuse Fund incurred large deficits following the recession Staff shifted
priorities to focus on cost savings measures. In 2013 and 2014 GreenWaste
focused on reducing the level of contamination in the composting containers.
While some new customers have added compostable service, the amount of
compostable material collected has remained relatively flat.
FY 10 FY 11 FY 12 FY 13 FY 14
Commercial Compostables
Recovered (tons per year) 10,247 11,932 11,723 11,688 11,487
Recovering compostable materials placed in garbage carts is not limited to
commercial customers. Based on a 2012 Waste Characterization Report, over
one-half of the material placed in residential garbage – 5,000 tons - is
compostable and approximately one quarter is recyclable. Unlike commercial
customers, residents in single-family households currently do not have a food
scraps collection option. A Curbside residential food scrap collection program
was identified as a priority project in the 2008 Zero Waste Operational Plan;
however, due to the added rate increase that would have been needed to pay for
the program, it was not implemented with the inception of the GreenWaste
contract in 2009 resulting in only yard trimmings collected curbside in the green
cart. Currently, most single-family residents dispose of food scraps in the garbage
or through a kitchen sink grinder – options that negatively impact the
environment. Some residents, about 10%, compost at home, which is the best
environmental option.
Curbside collection of food scraps and food soiled paper is a widespread and
successful practice throughout the Bay Area. Staff has worked to identify the best
City of Palo Alto Page 5
curbside collection method for these compostable materials. In April 2013, the
City implemented a year-long Two Cart Collection Pilot Program in the
Greenmeadow neighborhood that eliminated the black (garbage) carts. Residents
were asked to change two behaviors: first, place food scraps into compostable
bags and then into the green carts combined with yard trimmings; secondly,
residents were to bag any remaining garbage and place it in the blue recycling
carts. Both of the carts (blue and green) were collected weekly and sorted at a
materials recovery facility (MRF).
The Two Cart Collection Pilot Program confirmed that the two-cart collection
system is a good method to increase diversion of food scraps and additional
recyclables from landfills. However, the method of separation in the pilot was
complicated, as residents were required to: 1) Separate food scraps from yard
trimmings using compostable bags; and 2) Separate garbage from recyclable
materials using plastic bags. Because of these complexities that led to confusion
by residents in the pilot area, Staff is not recommending a citywide roll-out of the
two-cart collection system at this time. Staff is recommending a simpler option
where residents can place their food scraps bagged or loose in the green carts, as
is described later in this report.
GreenWaste Contract
The current Contract with GreenWaste of Palo Alto, a joint venture (GreenWaste)
has an initial term of 8 years with a provision to extend up to 4 additional years
(through June 30, 2021). The agreement has provisions for GreenWaste to
provide six new zero waste services, five were implemented in 2009. A sixth zero
waste service would have added a mandatory recycling and composting
participation ordinance but it was never adopted. Staff shifted priorities to focus
on cost savings measures when the Refuse Fund incurred large deficits following
the 2008 recession.
Refuse Rates
To obtain better estimates of the existing residential and commercial refuse fund
costs, Staff initiated a cost of service study in 2012. The study found that the
Refuse Fund’s commercial and residential sectors revenues were not in balance,
and began to modify rates in FY 2013 to achieve the proper balance. The
residential rates, which have been in effect since July 1, 2012, include a variable
charge for the black, garbage cart (mini-can, 32-gallon, 64-gallon, 96-gallon), and
City of Palo Alto Page 6
fixed charges for Street Sweeping, Household Hazardous Waste (HHW), and the
Annual Clean-Up Day.
The City bills waste collection for three different sectors: residential, commercial
and roll-off. Staff also determined the rate plan provided residential customers
taking large garbage cart service with a smaller percentage rate increase
compared to the rate increase imposed on residential customers with mini-can
service. This message runs counter to the City’s zero waste goals and could
potentially encourage customers to use a larger cart as it is a “better deal”. For
these reasons, and because the 2012 rate model was overly complex, Staff have
developed a new model and recommended approach which is described in the
Discussion section below. Staff has identified a number of programs where a
greater percentage of costs should be allocated to the commercial and roll-off
sectors.
Discussion
There are two main challenges that this staff report describes and addresses:
Challenge #1 The City’s waste diversion percentage rate attained has leveled off
(or dipped slightly) since 2010 and without further changes to induce an increase
in diversion, the City will not attain its zero waste goals; and
Challenge #2 The City’s refuse rates need to be rebalanced between the
Residential and Commercial Sectors, and then the rates must be increased to
cover the costs of the new programs described in this report.
Addressing Challenge #1: The City’s Waste Diversion Rate has Leveled-off Since
2010
After a dramatic increase in diversion since new zero waste services were
implemented in July 2009, the City’s waste diversion percentage has stalled for
the last three years (see graph below). If the City is to reach its 2021 zero waste
(to landfills) goals, then more aggressive program activities will be needed to
“jump-start” the City’s diversion rate. Staff has identified that the largest
diversion opportunity in the garbage is compostable organics – food scraps and
food soiled paper, which constitutes over 40% of the current garbage stream.
City of Palo Alto waste diversion rate over time:
City of Palo Alto Page 7
Below are three actions Staff is proposing to divert 7,000 to 8,000 tons per year of
waste, primarily food waste, currently being landfilled for an overall Refuse Fund
cost increase of less than three percent. These actions to divert and recover
waste from landfills will help the City meet its Zero Waste program goals, while
keeping Palo Alto a leader in sustainability. The three actions are outlined below:
1. Collect residential food scraps curbside commingled with yard trimmings in
a new residential food scraps collection program.
2. Adopt and implement a recycling and composting ordinance that would
require commercial customers to sort their waste so that food scraps can
be recovered and composted.
3. Modify the Contract and add new zero waste services that focus on the
largest source of unrecovered material in the garbage stream (food scraps
and food soiled paper).
City of Palo Alto Page 8
New Residential Food Scraps Collection Program
Staff is recommending the city-wide collection of residential food scraps (bagged
or loose) commingled in the green carts with yard trimmings. Commingling the
food scraps with yard trimmings is the simplest way to recover this material,
divert it from the landfill, and produce valuable compost. Many cities throughout
the Bay Area have been collecting and composting commingled residential food
scraps with yard trimmings for several years. There are several regional
composting facilities that are permitted to compost commingled food scraps and
yard trimmings. The food scraps collection program will likely divert and recover
over half (or approximately 3,000 tons per year) of the food scraps in the
residential garbage.
In addition, a curbside food scraps collection program that allows for the loose
placement of food scraps in the green yard trimmings cart is consistent with the
City’s commercial compostable materials collection program. No longer will
school children sort one way at school (part of the commercial program) and then
another at home (part of the residential program for single family residents). The
improved consistency between the residential and commercial programs will
improve outreach opportunities and effectiveness. The proposed program also
will be consistent with the other Bay Area communities, including Menlo Park,
San Francisco, San Mateo, Redwood City Atherton, Berkeley, and Oakland.
If this program is approved, Staff will purchase kitchen pails and distribute them
to all single-family residences within the City. Residents can use the pails to
temporarily keep food scraps indoors until the material is emptied into the green
yard trimmings carts. The program allows for all food scraps to be composted
and placed directly into the green cart in a variety of options: loose, in a
compostable bag (paper or plastic), in a paper carton (e.g., milk, juice, ice cream),
or any other compostable container. The acceptable compostable items include
but are not limited to: spoiled food, inedible food scraps (e.g., banana peels,
apple cores), meat, bones, egg shells, compostable plastics and food soiled paper
(e.g., paper towels, used tissues, paper plates, paper cups, and paper cartons).
Larger compostable food scraps like pizza boxes or paper cartons also can be
placed directly into the green carts. Diapers, pet waste and feminine hygiene
products would not be allowed in the green carts and should continue to be
placed in the black garbage carts. Multifamily dwellings with five or more units
City of Palo Alto Page 9
that subscribe to commercial refuse service have had the opportunity to have
food scrap collection since 2009, however, many of these customers do not
subscribe to the compostables service. These customers will be subject to the
recommended ordinance.
The combined materials in the green carts will be collected by GreenWaste of
Palo Alto and transported to the Sunnyvale Material and Recovery Transfer
(SMaRT) Station for consolidation. The material will then be transported to a
regional composting facility for processing and composting. The regional
composting facility will either be: 1) Z-Best Composting Facility near Gilroy (a
sister company of GreenWaste of Palo Alto); 2) Zero Waste Energy Development
Company (ZWED) (also a sister company of GreenWaste) in San Jose; 3) Newby
Island Composting Facility operated by Republic Services in Milpitas; or 4)
Harvest-Lathrop Composting Facility (a sister company to Harvest Power) located
outside Lathrop. If the City decides to utilize the ZWED facility in North San Jose
then the material would be directly hauled to that facility by GreenWaste,
bypassing the SMaRT Station due to ZWED’s close proximity to Palo Alto.
A Budget Amendment Ordinance for $387,000 will be needed to fund the
purchase of the outreach and training materials that will be needed to implement
this new program by July 1, 2015.
Home Composting
The residential curbside collection of food scraps does not reduce the need or
importance of home/backyard composting. Home composting is a great option
for many residents to recover most food scraps. Home composting helps to
reduce collection costs and lower greenhouse gas emissions and also provides a
“closed-loop” for the food scraps. It is estimated that less than 10% of Palo Alto
household’s compost at home. In 2014 Staff implemented an expanded home
composting campaign to increase participation citywide. The expanded campaign
has been a focused outreach and incentive-based campaign that has augmented
and added emphasis to the City’s traditional, ongoing, multi-partner program for
home composting, water conservation, and pollution prevention. The expanded
campaign’s goal has been to raise awareness about the benefits of home
composting while increasing the number of people composting at home and using
compost in the yard/garden. Also, the expanded campaign has aligned with
California’s drought as it encourages home composting by highlighting compost’s
City of Palo Alto Page 10
water-saving properties, and through incentives such as the City providing free
home composting bins to Palo Alto residents. In 2014, 159 residents attended 15
composting workshops where Staff gave away 82 backyard compost bins.
Home composting will continue to be an important City waste diversion program
complementing residential curbside food scrap collection, but it will not work for
everyone and will not be able to accept all of types of compostables, as described
below. Surveys conducted in 2014 indicated that two-thirds of residents actively
chose not to have backyard compost. Residents cited time constraints and not
gardening as the main reasons. Many do not have space available for home
composting, or perceive home composting as smelly and an activity that can
attract rodents, flies or other bugs to their home. In addition, some types of food
scraps and yard trimmings should not be placed into a home compost feedstock
including various vegetation seeds, meat, bones, dairy products and fats. With
the proposed curbside Residential Food Scraps Collection Program, this type of
food waste can be placed in the green cart and commercially composted. Home
composting and curbside food scrap collection complement each other by
providing a complete solution to maximize the environmental benefit for all
household organics.
New Recycling and Composting Ordinance
The latest Waste Characterization Study, performed in 2012 showed that 25% of
the material in the commercial garbage was recyclable and 40% was compostable.
A small amount of the recyclables in the garbage is recovered at the Sunnyvale
Material Recovery and Transfer (SMaRT) Station where all of Palo Alto’s garbage
is processed before being sent to a landfill. However, nearly all of the
compostable materials end up in the landfill along with the garbage. Other cities
and counties have recently adopted mandatory recycling and composting
ordinances (food bans) and have had good success diverting their waste from
landfills including San Francisco, Oakland, Vancouver, Portland, New York and
most recently Seattle.
The majority of the businesses in Palo Alto have recycling service. However, as of
October 2014, only 477 of 1,615 commercial accounts take compost service. In
addition, of the 197 food service establishments where Staff would expect
generation of a high percentage of food waste, only 123 take compostables
service. In order to identify why businesses are not electing to subscribe to
City of Palo Alto Page 11
compost service, in early 2014 Staff surveyed a number of businesses without
compostable service. The most common answer as to why they had not elected
to have compost service was that it was not required by the City. For many of
these commercial customers, saving a few dollars and the perceived extra for the
environment was “just not worth it.” Therefore, Staff recommends a mandatory
recycling and composting ordinance for the commercial sector.
The proposed ordinance (not yet written) would require commercial customers to
subscribe to both recycling and compostables service. In addition, customers
could not place recoverable items in the garbage. In other words, customers
must subscribe to the services, have a garbage, recycling, and compostable cart or
bin and sort properly. Staff proposes that the City takes the following actions
with customers who fail to sort properly as identified by either the GreenWaste
collection truck driver or by GreenWaste staff through a random audit. With the
first instance of a high percentage of contamination (over 10% in any cart), the
customer receives a cart tag from GreenWaste giving notice of the contamination
problem; with the second instance, GreenWaste would send a letter and staff
would follow up with a telephone call to find out if training is needed; and with
the third instance, GreenWaste would charge a special solid waste processing
(amount to be determined) for each time the customer fails to sort properly.
Staff recommends implementing the ordinance in the following phases:
Phase 1: April 1, 2016. Initiate mandatory service with all Food Service
Establishments and all commercial customers generating 8 cubic yards or
more per week of garbage. This phase would add 147 customers and would
include (but are not limited to): restaurants, markets, bakeries, bars,
farmers' markets, hotels, and catering facilities. Initiate proper sorting
procedures (as appropriate for the service they have) for all commercial
customers.
Phase 2: January 1, 2017. Expand program to commercial customers
generating at least 2 cubic yards per week of garbage. This phase would
add 223 customers.
Phase 3: January 1, 2018. Expand mandatory service to all remaining (612)
commercial customers. Staff proposes that the ordinance include a
variance procedure where commercial customers can apply to take a lesser
quantity of service than is afforded by the three collected materials
(garbage, recycling and food scraps) based on their specific waste
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generation quantities. Staff would exercise the administrative discretion to
approve the requests if warranted.
GreenWaste Contract Amendments
GreenWaste has provided waste collection and material processing services for
the City since 2009. The Contract will terminate on June 30, 2017 unless the City
elects to extend the term. The Contract permits an extension of up to 4
additional years until June 30, 2021. GreenWaste has met its performance
obligations since its inception and staff has been negotiating with GreenWaste for
the last few months to determine a cost effective way to extend the Contract,
while at the same time replace some of GreenWaste’s older vehicles and increase
diversion activities to meet the City’s zero waste goals. Staff believes that the
following concepts will achieve the balance necessary.
GreenWaste Contract Amendment Categories
Item Recommended Contract Changes Annual Cost
Impacts
1
Extend contract term by 4 years until June 30, 2021.
Retain the same pricing, terms and conditions unless
modified in the items below.
$0
2 Compostables Package
New residential food scraps collection
Process residential food/yard trimmings at ZWED*
Implement recycling and composting ordinance in
the commercial sector
Increase commercial compostables incentives
Redirect commercial food to ZWED**
Subtotal
$0
*$1,134,000
$0
$190,000
**$22,000
$1,346,000
3 Billing for commercial accounts $150,000
4 Variable costs reductions, method of payments (savings to
the City) <$75,000>
5 New automated collection vehicles (savings to the City) <$55,000>
6 Minor administrative changes $0
Total annual cost increase to the GreenWaste Contract *$1,366,000
City of Palo Alto Page 13
*There will also be a corresponding cost decrease of approximately $576,000 from
redirecting residential yard trimmings and food scraps away from SMaRT and the
Kirby Canyon Landfill.
**Staff prefers that this commercial compostables materials be processed at the
nearby ZWED Facility because it is the closest processing facility that would result
in less greenhouse gas emissions and would generate electricity through dry
anaerobic digestion. The ZWED cost per ton for FY 2016 would be $81 per ton,
2.3% higher than the expected rate of $79.19 per ton at ZBest.
1) Contract extension(No net cost impact)– The Contract commenced on
November 24, 2008 and will expire on June 30, 2017, along with a provision
to extend the contract for up to four additional one-year terms, until June
30, 2021. Staff recommends an extension of the full four one-year terms
because:
GreenWaste has been meeting and exceeding their collection and
processing scope of work thus far in the contract term;
Customer feedback is positive; the City has received minimal
customer complaints regarding the service provided;
GreenWaste has been collaborating with the City by suggesting cost
effective service changes during negotiations;
A longer term would allow the City to take advantage of collection
vehicles expected useful; and
The new term would synchronize with the City’s other major solid
waste agreements, SMaRT and Kirby Canyon Landfill, which also
expire on June 30, 2021. Subjecting the City’s collection, processing,
and landfill solid waste contracts to a competitive selection process
i.e., a request for proposals (RFP) process at the same time more
likely could provide the City with cost-effective and integrated
solutions.
If the Council were to decide not to extend the term of the Contract over
the next four years, then Staff would need to begin developing an RFP
process by summer 2015. This should provide enough time for staff to gain
consensus on the collection and processing scheme criteria, to select a
successful proposer and enough lead time for the purchase and delivery of
new collection equipment.
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2) Compostables package ($1,346,000 net increase) – Staff recommends
adding provisions to the GreenWaste contract that would increase the
recovery of food scraps and use these food scraps for energy production.
New residential food scraps collection – As discussed above,
GreenWaste would collect the City’s residential food scraps commingled
with yard trimmings and deliver the material to a processing facility
without additional fees. The material could be taken to the SMaRT
Station and be transferred to a processing facility or could be taken to
GreenWaste’s sister company Zero Waste Energy Development (ZWED),
a dry anaerobic digestion facility designated to produce electricity.
Implement a recycling and composting ordinance in the commercial
sector – GreenWaste staff will assist in the implementation of a
compliance program promulgated under a proposed recycling and
composting ordinance for the City’s commercial sector at no additional
cost, utilizing current staff assigned to the City.
Increase commercial compostables incentives – Staff recommends
modifying the contract’s current incentive clause that pays GreenWaste
for processing commercial food scraps a price per ton based on the net
tonnage (that is the overall tonnage collected minus the contamination
percentage which can typically be 10%-20%). The incentive payment
would change to paying GreenWaste based on gross tonnage collected,
which will incentivize GreenWaste to collect and divert more
compostables wastes where more effort and costs are needed to sort
the material and landfill the garbage contamination residue. Staff’s goal
is to get all of the City’s commercial customers established with the
compostables collection program and require customers to clean up
their compostable wastes through the recycling and composting
ordinance compliance requirements.
Redirect commercial compostables to the Zero Waste Energy
Development (ZWED) Facility – Staff recommends diverting commercial
compostable material to the ZWED facility in order to use the material
to produce electricity. The marginal cost increase would be $22,000 per
year. Processing this material locally, (located in north San Jose near
Zanker Road and Hwy 237) would also yield the benefit of saving
greenhouse gas emissions related to transportation of the material.
City of Palo Alto Page 15
3) Commercial billing ($150,000 net increase)– Staff recommends that
GreenWaste provide billing services to the City’s commercial sector
customers in lieu of the City hiring full time staff to monitor and maintain
the data. In 2014, the City’s Auditor conducted an audit on the Refuse
Fund and found discrepancies between the City’s SAP billing system and the
GreenWaste collection database (RAMS), which resulted in billing errors.
The errors are primarily due to the fact that the City’s billing system (SAP) is
not customized to manage the hundreds of different service levels offered
by GreenWaste. GreenWaste maintains a complete detailed customer
database that must interface with SAP. Due to changes in refuse service
and the complexities in the interface between the two databases, there
remain inconsistencies in customer account data between the two systems.
While the City and GreenWaste are continuously working together to
identify, correct, and enhance the systems to eliminate these discrepancies,
shifting the complex commercial billing to GreenWaste provides the best
opportunity to minimize billing errors at the lowest cost. Staff’s response
to this audit concern was to recommend either shifting the billing to
GreenWaste or by adding a position to focus on software improvements
and on the fulltime monitoring and maintenance of the data.
GreenWaste providing commercial refuse billing services will cost
approximately $150,000 per year, increasing the total cost of Refuse
related billing services from $250,000 to $400,000. The residential refuse
bill will remain on the consolidated City Utilities bill. The Public Works
Department will work with the Utilities Department to identify the resulting
savings from this proposed change in the service delivery model, and, if
approved, it is anticipated that a reduction to the annual transfer will be
recommended for City Council approval following the implementation of
the change.
4) Variable costs ($70,000 net decrease)– The variable cost related
amendments involve rolling the itemized cost items such as the special
events and hard to serve areas into the Contract’s base compensation. The
City would save about $70,000 per year.
5) New trucks/cart purchases ($55,000 net decrease)– GreenWaste will
purchase new automated trucks to replace the oldest six trucks that collect
City of Palo Alto Page 16
residential yard trimmings and garbage. These trucks are older than the
rest of the GreenWaste fleet because GreenWaste purchased these trucks
from the City’s previous contracted hauler, “Palo Alto Sanitation Company”.
The new, more fuel-efficient trucks will run on compressed natural gas
(CNG). The new trucks will be fully-automated, that is, will have loading
“arms” to reach and pick up the waste containers from the curb. These
new automated trucks will allow for just one driver to service residential
routes instead of a driver plus a helper as is currently the case, resulting in
the reduction in cost of 4 fulltime positions. Replacing the older trucks
provides a net savings of $55,000 per year to the City due to the reduced
operating costs. A change to the current cart placement procedures would
need to be implemented – the carts would need to be placed on the street
so that the automated arms can reach the carts as opposed to the current
practice of placement at the curb (i.e. near the sidewalk). GreenWaste will
continue to utilize semi-automated trucks in areas where parking is a
problem. Moving forward, GreenWaste will also be responsible for the
purchase of all replacement carts.
6) Minor administrative changes – These changes involve less substantial
items with no cost impacts but are needed for contract compliance and
require an amendment to the contract. Some changes involve
modifications to the measurement criteria, the schedule to allow
reconditioning of containers, and past letters of intent that have already
been agreed between the City and GreenWaste.
Addressing Challenge #2 - The City’s refuse rates need to be adjusted between
sectors, then increased to cover the costs of the new programs described in this
report.
As mentioned above, In May 2012, Council approved a single-family residential
(residential) rate plan to address an imbalance between the sector revenues and
expenses. The residential rates, which have been in effect since July 1, 2012,
include a variable charge for the black, garbage can or cart (20- gallon minican,
32-gallon, 64-gallon, 96-gallon), and fixed charges for street sweeping, household
hazardous waste (HHW), and the annual Clean Up Day.
City of Palo Alto Page 17
Variable Fixed Total
Cart Size Current
Monthly
Street
Sweeping*
HHW Annual
Clean-up
Day
20 gallon (minican) $13.79 $5.26 $1.07 $2.17 $22.29
32 gallon (standard) $31.64 $5.26 $1.07 $2.17 $40.14
64 gallon $67.84 $5.26 $1.07 $2.17 $76.34
96 gallon $101.76 $5.26 $1.07 $2.17 $110.26
*The street sweeping charge was originally $6.66 and was reduced to $5.26 in November 1,
2014, with the new street sweeping contract.
The residential rate plan presented by staff to the Finance Committee in April
2012 suggested a three year phase-in, which would have resolved the sector
imbalance with a combination of fixed percentage and flat increases to rates (also
referred to as Option 8, see Staff Report 2706 for details). Staff, however, wished
to further study allocation of costs between the sectors and elected to postpone
the rate increases in order to do so. Staff subsequently identified a number of
programs where a greater percentage of costs should properly be allocated to the
commercial and roll-off sectors. The most significant program cost was relative to
the landfill closure and ongoing maintenance activities, which are costs that
should have been allocated to the commercial sector at a greater percentage,
since these sectors contributed the most material to the landfill.
A consultant study was commenced in 2014 in order to update and evaluate the
cost allocations among the sectors. The report from the City’s consultant is
currently being finalized and has shown that the residential service rates need to
be raised by approximately 28% (mini-cans and 32 gallon garbage service) to fully
cover the cost of the service (See table below). Staff recommends adjusting the
rates over a three year period. Staff also recommends changing the bill, including
moving away from listing the separate fixed charges currently on the residential
utility bills.
Staff suggests adjusting the residential monthly rates in the table below to
provide for an equitable distribution of costs while encouraging zero waste
behaviors. Staff recognizes that increases of this size should be accomplished over
a three year period in order to soften the cost increases for the residents. These
City of Palo Alto Page 18
residential rate increases also include costs for a vital programmatic change, a
new single-family residential curbside food scrap collection program.
Recommended Adjustments (Single-Family Residential Rates)
Cart Size
Current
Monthly
Rate*
Projected
FY 2016
Projected
FY 2017
Projected
FY 2018
Projected
Increase over
3 years
20 gallon $22.29 $24.36 9%-
$2.07 $26.42 8%-
$2.06 $28.49 8%-
$2.07 $6.20 28%
32 gallon $40.14 $43.86 9%-
$3.72 $47.57 8%-
$3.71 $51.29 8%
$3.72 $11.15 28%
64 gallon $76.34 $85.09 11%-
$8.75 $93.83 10%-
$8.74 $102.58 9%-
$8.75 $26.24 34%
96 gallon $110.26 $124.80 13%-
$14.54 $139.33 12%-
$14.53 $153.87 10%-
$14.54 $43.61 40%
Notes
1. Rates include street sweeping, household hazardous waste, and the annual clean-up
day.
2. The table above shows projected rate modification over 3 years. Staff would only bring
forward rate adjustments 1 year at a time.
3. Projected fees assume a revenue loss from the migration of 5% of residents moving to
smaller carts. However, based on actual customer choices to move to smaller cart sizes,
the annual increases may be different.
Rate Structure Modification
Staff proposes that the monthly Refuse Rate include all of the residential services
costs in the one price (listed in the table above), instead of separating fixed
charges, currently for street sweeping, household hazardous waste, and the
annual clean-up day on the bill. One advantage of this is when there are year to
year changes in these fixed costs (contract pricing, CPI adjustments, etc.) Staff will
not necessarily need to raise the refuse rates every year in order to ensure that
the fixed fees will adequately fund each fixed costs; rather, the refuse rates will
be set to ensure cost recovery of the entire service provided to customers. In
addition, Staff has identified many other costs such as recycling service,
compostable service, some SMaRT Station costs, and landfill maintenance costs
that could also be listed separately as a fixed fee but would not be practical or
possible with the SAP current billing system.
City of Palo Alto Page 19
Staff calculated the single family residential monthly rates (listed in the table
above) with the following three-step method:
1) First, add the fixed costs per single family residences for street sweeping,
household hazardous waste program, annual Clean Up-Day, recyclables in
the blue cart service, yard trimmings in the green cart service and landfill
postclosure maintenance to determine a combined fixed cost per
residence.
2) Second, calculate a cost per gallon for the garbage cart by dividing the
overall costs of residential refuse service by the total number of gallons of
service within the City. This would yield a variable cost per gallon that
would be used to calculate the variable cost per service for refuse
collection.
3) Finally, calculate the final monthly fee by adding the fixed cost per
residence to the variable cost of the black garbage cart to generate the
monthly fee for the 32-gallon cart. Other service levels (various garbage
cart sizes) would be based on the 32-gallon base rate. The 64 and 96-gallon
cart customers will pay double and triple the 32-gallon rate respectively. A
minican (20-gallons) is roughly two-thirds the size of a standard 32-gallon
cart. Therefore, the minican customers will pay roughly 2/3rds of the 32-
gallon rate less minor cost adjustments to the mini-can rate thus
incentivizing recycling and composting.
Commercial Rates
In order to bring the Refuse Fund Reserve to the required percentage, Staff
recommends that most of the commercial garbage rates should be maintained at
the 2012 rates until the costs and revenues received for these services are
balanced (expected by FY 2017).
Staff recommends a rate reduction to the commercial compostable materials
service (green cart/bin) once the recycling and composting ordinance is
implemented. Compostable materials service currently is provided at a 10%
percent discount by comparison to garbage service of the same size container.
Staff has initially calculated that the actual cost of this compostable materials
service may warrant a steeper discount for compostable service (30% discount)
City of Palo Alto Page 20
compared to garbage service, both of which use the same size container. The
discount would offset the additional costs incurred by customers adding
compostable service as part of the mandatory recycling and composting
ordinance. Some customers may realize cost savings on their refuse bill with
proper refuse sizing and sorting. Staff expects revenue losses as a result of the
discounted commercial compostable service will be offset by the new revenue
from new customers subscribing to compostable service as required by the
mandatory recycling and composting ordinance.
Should Council choose to create a recycling and composting ordinance coupled
with the new reduced compostable rate structure, initial estimates show that
commercial customers could divert an additional 4,000-5,000 tons annually of
food scraps and other compostables from the landfill. Removing the discount on
the service or not implementing the recycling and composting ordinance likely
would decrease participation and significantly reduce the environmental benefits
of the program.
Timelines
GreenWaste Contract Amendment
Task Schedule
Finance Committee approval February 3, 2014
Attorney review/final negotiations February-April 2015
Council approval May/June 2015
New Rate Implementation Schedule
Task Schedule
Finance Committee approval – concepts February 3, 2014
Finance Committee final rate approval as part
of the budget process
March 2015
Council approval June 2015
New Rates implemented July 1, 2015
Recycling and Composting Ordinance
Task Schedule
Finance Committee approval of concepts February 3, 2014
Develop final ordinance February – July 2015
City of Palo Alto Page 21
Council approval August 2015
Phase 1: Food service establishments and large
commercial customers
April 1 2016
Phase 2: Commercial customers generating 2
cubic yards of garbage per week
January 1, 2017
Phase 3: All commercial customers January 1, 2018
Residential Food Scraps Collection Implementation Schedule
Task Schedule
Finance Committee approval February 2015
Council approval March 2015
Develop outreach and training materials April – June 2015
Hold community training sessions June – July 2015
Run advertising Late June 2015 – June 2016
Distribute kitchen pails Late June 2015
Begin collection July 1, 2015
Resource Impact
The cost to the Refuse Fund for all of these program modifcations would be
approximatly $790,000 per year, beginning in FY 2016, which is equivalent to
approximately a 2.7% overall Refuse Fund expense increase. The major cost
implications are:
GreenWaste Contract/Scope Changes $1,366,000 per year increase
SMaRT/Kirby Canyon decrease ($576,000) per year decrease
$790,000 per year net increase
It should be noted that the rate increase recommended for FY 2016 may be
higher than 2.7% pending a full analysis of the increased costs in the Refuse Fund.
Further, since 2010, Staff has aggressivly implemented cost savings measures
listed below. These cost savings measures have made it unnecesary to implement
a Refuse Rate increase since 2012, and will minimize the impacts of the new zero
waste measures discussed above. The cost saving measures which have been
implemented are:
Expediting the landfill closure through a “fast-fill” program, closing the
City of Palo Alto Page 22
landfill early, reducing staff and equipment, saving $2.1million per year in
operating expenses (2010 budget compared to FY 2015 budget);
Closing the Recycling Center in FY 2012 saving $225,000 per year; and
Modifying the street sweeping program, modifying the frequency of
sweeping during the non-leaf season and contracting out a large portion of
the work, saving the City $649,000 per year ($522,000 to the Refuse Fund).
The Refuse Fund is in the process of rebuilding its financial reserves. The Rate
Stabilization Reserve in the Refuse Fund, as reported in the Adopted Operating
Budget, currently has a negative balance. This negative balance is attributable to
liabilities associated with maintaining the closed landfill, as mandated by Public
Resources Code and the California Code of Regulations. As revenues are realized
and maintenance activities are completed, the liabilities will be reduced and the
Rate Stabilization Reserve negative balance will become positive. While the Rate
Stabilization Reserve reflects a negative balance, it is important to note that there
is sufficient cash in the fund to cover operations and the cost of the kitchen pails,
outreach and education, and advertising costs recommended to be appropriated
in FY 2015 pending eventual City Council approval of a Budget Amendment
Ordinance for these items in the amount of $387,000.
Residential Food Scraps Collection Program Costs
Implemening a new residential food scraps collection program will cost
approximately $1,134,000 per year, beginning in FY2016. This is equivalent to an
approximate 6% rate increase for residential customers with 32-gallon garbage
cart service or an average monthly increase of approximately $2.52 per month for
all residential customers. This cost is incorporated into the residential rate tables
earlier in the report and projected rate increases will be brought forward for
Council consideration as part of the FY 2016 budget process.
An initial investment of $387,000 will be needed in FY 2015 to purchase kitchen
pails and provide the outreach and training materials needed for this new
program’s 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 information.
Community meetings will be held to orient the public at the beginning of the roll-
out of this new program. At a later date it is anticipated that Staff will bring
forward for City Council approval a Budget Amendment Ordinance for the Refuse
City of Palo Alto Page 23
Fund in the amount of $387,000, to be offset by a reduction to the ending fund
balance in order that the City may fund this outreach prior to FY 2016.
One-Time FY 2015 Costs – Residential Food Scraps Collection Program
Item One Time Costs
Purchase kitchen pails for each residence (18,000 at $6.00
per bucket) $108,000
Outreach and training materials design, development,
printing and distribution costs $239,000
Print and online ads and other advertisement costs $40,000
Total One Time Costs $387,000
Policy Implications
The collection of food scraps is consistent with the City’s Zero Waste Operational
Plan and Climate Protection Plan both adopted in 2007 to provide for the
collection and diversion of all compostable materials.
The increased discount for commercial compostable service will help the City
achieve its zero waste goals by 2021.
Environmental Review
GHG Savings
Diverting and composting the expected recoverable amount of 10,000 tons of
residential and commercial food scraps per year would save over 3,800 metric
tons of CO2e emissions per year that contribute to global climate change.
CEQA
Collecting residential food scraps within the existing green carts and composting
this material is consistent with the baseline three cart collection services that was
studied in the Initial Study-Mitigated Negative Declaration adopted by Council
with the GreenWaste Contract award in 2008 (CMR 416:08). In addition, this new
food scraps program is designed to reduce the impacts to the environment by
reducing the amount of greenhouse gas generated and by maximizing the
recovery of compostable materials generated within the City.
City of Palo Alto Page 24
There will be negligible transportation related impacts from modifications to
existing compostable collection routes.
City of Palo Alto (ID # 5544)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 3/3/2015
City of Palo Alto Page 1
Summary Title: Fiscal Year 2015 Midyear Budget Review and Budget
Amendment Ordinance
Title: Finance Committee Recommendation Regarding Adoption of a Budget
Amendment Ordinance Amending the Budget for Fiscal Year 2015 to Adjust
Budgeted Revenues and Expenditures in Accordance with the
Recommendations in the FY 2015 Midyear Budget Review Report
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee recommend to the City Council adoption of the
FY 2015 Midyear Budget Amendment Ordinance (BAO) (Attachment A) which includes:
1) Proposed midyear adjustments to the FY 2015 Budget for the General Fund, Enterprise
Funds, Special Revenue Funds, Internal Service Funds, and Capital Improvement Projects
Fund (Exhibit 1)
2) FY 2015 Midyear CIP Adjustments (Exhibit 2)
3) Amendments to the FY 2015 Table of Organization (Exhibit 3) to add 1.0 Chief Attorney
position
The following documents are attached as informational items; no action is required on these
items:
1) FY 2015 Midyear Financial Reports (Attachment B)
2) General Fund Capital Improvement Program Project Expenditures for FYs 2011-2015
(Attachment C)
3) FY 2015 Midyear Capital Improvement Program Projects Status Report (Attachment D)
4) Continuous Capital Projects Expenditures for FYs 2011-2015 (Attachment E)
5) Public Safety Overtime Analysis FY 2013 - FY 2015 (Attachment F)
Motions
Motion to recommend to the City Council to adopt the FY 2015 Midyear Budget Amendment
Ordinance (BAO) for the proposed midyear adjustments to the FY 2015 budget for the General
Fund, Capital Improvement Projects Fund, Enterprise Funds, Special Revenue Funds, Internal
Service Funds as identified in Attachment A and related exhibits.
City of Palo Alto Page 2
Executive Summary
Annually, in March, staff presents to the Finance Committee the status of revenues and
expenditures for major funds and Capital Improvement Program as of December 31 of the
current fiscal year. As part of that status report, staff also brings forward recommendations to
adjust the annual adopted budget. The attached documents summarize and outline changes to
the City’s FY 2015 adopted budget. Adjustments to the city’s budget may become necessary as
revenues and expenditures may vary from the original budget plan. These require
amendments to department budgets which the Finance Committee reviews and responds to
staff’s recommendation for approval. In this report, recommended budget adjustments are
related to new requests, reimbursements, grants, previous Council direction, the ongoing
drought, or technical clean-ups.
The FY 2015 Midyear Budget Summaries (Attachment A, Exhibit 1) provide a financial report of
the General Fund and Enterprise Funds as of December 31, 2014. This report compares FY 2015
actual expenditures with the FY 2015 Midyear Budget, including budget adjustment
recommendations contained in this report and carryover encumbrance balances. Since in some
funds, the carryover encumbrance balances are quite high in comparison to the original
budgeted amounts, the actual percent expended in comparison to the budget may well be
above 50 percent. Overall, with the adjustments recommended in this report, the General
Fund and all enterprise funds are on track to end the fiscal year within budgeted amounts.
Including recommendations contained in this report, the General Fund is projected to generate
a one-time budget surplus of $5.3 million and the Budget Stabilization Reserve is projected at
$38.0 million, or 22.1 percent of adopted expenditures. This level is $6.1 million above the
target level of 18.5 percent of total operating expenditures. As part of the development of the
FY 2016 Proposed Budget (late April/early May) as well as closing of the FY 2015 budget
(November/December), staff will bring forward recommendations for use of the FY 2015
projected budget surplus.
The FY 2015 Midyear Budget review report includes recommendations to adjust project
budgets for the City’s 2015 Capital Improvement Plan (CIP) for various funds. The majority
actions recommend closing out existing projects and transferring the remaining balances to the
appropriate fund. Additionally, additional funding is requested in order to start design work or
complete an existing project.
Background
This report summarizes proposed changes to the FY 2015 Adopted Budget and reports financial
activity through December 31, 2014. Where possible, budget change recommendations are
brought forward for City Council consideration as part of the approval of the FY 2015 Midyear
Budget Review report to consolidate requests and streamline the Budget Amendment
Ordinance process. This report is organized by fund with a primary focus on major changes in
the General Fund. Financial results and midyear changes for the Enterprise, Internal Service,
and Special Revenue Funds are also included in this report. Adjustments, as well as all fund
City of Palo Alto Page 3
summaries, are detailed in Attachment A and related exhibits and Attachment B. The Midyear
CIP Program Project Status report (Attachment D) provides the Finance Committee with
information on the status of the City’s CIP projects as of December 31, 2014.
Discussion
The following pages provide an overview of the FY 2015 Midyear fund status for the General
Fund and enterprise funds and recommended budget adjustments as they pertain to the City’s
FY 2015 Operating and Capital budget.
Operating Budget
Under this section of the report, citywide changes to the FY 2015 Adopted Operating Budget
are described for the General Fund, Enterprise Funds, Internal Service Funds, and two Special
Revenue Funds.
General Fund
After six months experience in the current fiscal year, the General Fund is expected to generate
a one-time budget surplus of approximately $5.3 million by the end of the fiscal year primarily
due to higher than expected revenue receipts for property tax, sales tax, and Transient
Occupancy Tax receipts offset with lower than expected receipts for Utility Users Tax and
Documentary Transfer Tax. As described in more detail below and detailed in Exhibit 2, staff
recommends various adjustments to the FY 2015 General Fund Budget related to new requests,
reimbursements, grants, previous Council direction, the ongoing drought, or technical clean-
ups.
General Fund Revenue
The chart below compares the FY 2015 Adopted Budget revenue estimates for all revenue
categories with the FY 2015 Midyear Budget Review projections. As depicted in the chart, the
majority of revenue categories are trending upwards offset by decreases in the Utility User Tax
and Documentary Transfer Tax receipts. A detailed discussion by revenue category follows.
City of Palo Alto Page 4
$0
$5
$10
$15
$20
$25
$30
$35
General Fund Revenues
FY 2015 Adopted Compared to FY 2015 Midyear Projected
Adopted Budget Midyear Budget
Major Tax Revenue Estimate Adjustments
Sales Tax
As shown in the graph above, the FY 2015 Adopted Sales Tax revenue estimate was
approximately $26.0 million. This report includes a recommendation to increase the Sales Tax
revenue estimate for FY 2015 by $3.3 million to $29.2 million. Of this growth, a one-time $1.7
million is attributable to a change in the accrual period to bring sales receipts accruals in line
with all other tax revenue accruals. Prior to FY 2015, except for Sales Tax, the accrual period for
all other major tax revenues was from July 1 to June 30. For Sales Tax, the accrual period was
from mid-May to mid-May the following calendar year. This accrual change results in a one-
time increase in sales receipts for FY 2015 to account for sales tax receipts from mid-May 2014
until June 30, 2015 – a 13 ½ month accrual period versus the standard 12 month accrual period.
Ongoing sales tax revenue is also showing continued positive growth. Restaurant and electronic
sales are trending higher and auto sales in key, older dealerships are rising.
Property Tax
The FY 2015 Property Tax receipt was estimated at $31.9 million. The midyear property tax
updated estimate is based on information received from quarterly meetings with the Santa
Clara County Assessor’s Office. The estimate includes appeals on record with the Assessor’s
Office, additions to the roll, and movements in assessed values. After analyzing property tax
receipts for the first six months of the fiscal year, staff recommends increasing the FY 2015
Property Tax revenues by $0.6 million to $32.6 million.
City of Palo Alto Page 5
Transient Occupancy Tax (TOT)
During the first six months of the fiscal year, TOT receipts are trending above budgeted levels.
In the first five months of FY 2015 average occupancy and daily room rates were 82 percent and
$228, respectively. While occupancy percentage has held steady, daily room rates has
increased 14.3 percent over the prior year. As part of this report, staff recommends increasing
TOT projections by $1.7 million from $14.2 million to $15.9 million. Of this increase, $1.3 million
is attributable to the voter approved TOT rate increase from 12 to 14 percent that took effect
on January 1, 2015 and $0.4 million is due to continued improvement in room rates. The City’s
newest hotels (Hilton Garden Inn and Homewood Suites by Hilton) are expected to open for
business on March 1st; the additional expected TOT revenue has been already included in FY
2015 revenue projections.
Documentary Transfer Tax
This economically sensitive revenue source has experienced ups and downs tied to the City’s
housing market as the mix of commercial and residential transactions can vary significantly
from year to year. Through December 2014, Documentary Transfer Tax receipts are running 44
percent below the prior year period. As a result, staff recommends a reduction in estimated
revenue of $1.0 million from the FY 2015 Adopted Budget amount.
Utility Users’ Tax (UUT)
The City’s utility tax revenue is based on a 5 percent tax on electric, water, gas and telephone
usage. Based on current receipt levels, staff recommends a slight decrease in the revenue
estimate by $0.4 million from $11.3 million to $10.9 million primarily due drought related water
and gas usage decreases. Gas usage has been lower than expected due to a warmer than
expected winter. Further, at the November 2014 general election, the voters approved a
reduction of the utility user tax for telephony services from 5 percent to 4.75 percent.
Other General Fund Revenues:
Charges for Services
The FY 2015 Adopted Budget revenue estimate for this revenue category is $24.1 million. This
report includes recommendations to increase the revenue estimate by $0.4 million due to the
year-end adjustment of the Stanford Fire Services revenue billing that captures the variance
between quarterly billing to the University and final, year-end FY 2014 Actuals.
From Other Agencies
The FY 2015 Adopted Budget revenue estimate projected $0.5 million in revenues from other
Agencies. A $0.2 million revenue increase is recommended in this category for the Fire
Department reimbursement from the State of California Office of Emergency Services for
emergency fire services provided on overtime as part of mutual aid for Strike Teams responding
to wildfires burning across the state during the Summer of 2014. This revenue increase is offset
by a corresponding increase to the Fire Department’s overtime expense appropriation as
discussed elsewhere in this report.
City of Palo Alto Page 6
Other Revenue
The FY 2015 Adopted Budget assumes $1.1 million in other revenue. This report recommends
increasing this amount by $0.03 million for grants and reimbursements including a donation of
$15,000 from the Pacific Library Partnership for the Maker + science summer program and a
$4,845 budget augmentation in California Library Services Act funds.
Operating Transfers In
The General Fund will receive reimbursements from the Information Technology Fund in the
amount of $0.09 million for closing out of Technology CIP TE-13002 Employee Self Service
Manager/Self Service Enhancements.
General Fund Expense
Attachment A, Exhibit2 identifies General Fund budget recommendations. These
recommendations can generally be grouped by new requests, reimbursements and grants,
previous Council direction, and technical adjustments.
New requests: This report recommends three new requests. As part of the City’s sustainability
effort, staff recommends funding the acquisition of a sustainability dashboard to streamline the
collection and analysis of sustainability data and make this data available for staff and the
public ($85,000 from various funds with $47,000 from the Technology Surcharge added to
Municipal Fees). In continuation of analyzing Fire response data, it is recommended to fund a
Fire Deployment Modeling and Predictive Analytic Software which will be used for dynamic
resource deployment modeling throughout the City and at Stanford University ($20,000). For
the Planning Department, staff recommends funding to integrate development impact fees into
Accela, the City's online permit processing and tracking system.
Reimbursements and Grants: As part of this report, staff recommends adjusting the Fire and
Police department budgets to reimburse the City for additional costs incurred for providing fire
and dispatch services to Stanford University in FY 2014 ($421,000); reimbursing the Fire
department for overtime cost incurred during the 2014 fire season from the State of California
($184,000); and recognizes revenue and expenses for two grants the Library department
received ($20,000).
Previous Council Direction: This report recommends a transfer of $932,124 from the Cubberley
Not-To-Develop Reserve to the newly established Cubberley Property Infrastructure Fund in
accordance with the new Cubberley lease agreement between the City and the Palo Alto
Unified School District. Further, it is recommended to transfer $28,000 from the Community
Services Department to the Library Department to hire a Teen Activity Specialist for the Library
to support the continuation of the MakeX program. Lastly, it is recommended to replenish the
City Manager's Office Contingency Account for funds temporarily reallocated to the
Administrative Services Department to pay Ada's Cafe $87,356 for construction delays at
Mitchell Park Library and Community Center (approved by the City Council on Dec. 15, 2014).
City of Palo Alto Page 7
Technical Clean-ups: The FY 2015 budget included $40,000 for grant writing services to assist
City departments in researching and submitting grant applications to fund or enhance City
services. This report recommends transferring $11,600 from the non-departmental budget to
the Community Services Department to support the submittal of the three grant applications.
As part of the FY 2015 budget, the Development Services department was fully established.
After adoption of the budget, staff identified that some contractual dollars ($123,000) and
Management and Professional development training funds ($5,000) were erroneously
budgeted in the Planning Department. Also, as part of the development of the FY 2015 budget,
staff did not include the sworn Police personnel retention/career incentive program in the
Police Department budget. Finally, it is recommended to replenish the City Manager's Office
Contingency Account for funds to pay for the Know Your Neighbor program as funds for this
program were inadvertently not included in the FY 2015 Adopted Budget. The contingency
account was used to fund the grants for the FY 2015 grant cycle. This report recommends
correcting these errors.
Chief Attorney position: This report recommends adding 1.0 Chief Attorney position to the
Table of Organization to facilitate the recruitment of this position in advance of the FY 2016
budget process. The funding for this position of approximately $330,000 will be included in the
FY 2016 Base Budget. The position will increase the ability of the City Attorney’s Office to
provide high-level legal services for strategic advice and transactional legal services on complex
projects, strategic oversight of the litigation portfolio, assistance with managing and
coordinating the Office’s workload, and communicating and reporting on the Office’s work to
City policymakers and the public. It is expected that a portion of the cost for this position will
be offset with a reduction of contractual services for outside counsel and/or the City Attorney's
contingency reserve.
Budget Stabilization Reserve
The General Fund began FY 2015, after the closing out of the FY 2014 budget, with a $33.1
million Budget Stabilization Reserve (BSR) balance which was 19.33 percent of the operating
budget expenditures. Subsequent to the FY 2015 budget adoption, Council has approved BAOs
totaling $0.4 million which reduced the BSR to $32.7 million by the end of December 31, 2014.
As a result of better than expected revenue income, midyear adjustments result in a $5.3
million supplement to the General Fund BSR. The midyear budget adjustments reflect a
projected $4.9 million increase in sources and a $0.4 million decrease in uses. These changes
result in a projected $38.0 million BSR balance, or 22.1 percent of adopted expenditures. This
level is $6.1 million above the target level of 18.5 percent of total operating expenditures. As
part of the development of the FY 2016 Proposed Budget (late April/early May) as well as
closing of the FY 2015 budget (November/December), staff will bring forward
recommendations for use of the FY 2015 projected budget surplus.
Overtime Analysis
The Public Safety Overtime Analysis Fiscal Year 2013 - Fiscal Year 2015 (Attachment F)
City of Palo Alto Page 8
compares the net overtime cost for the Fire and Police departments for Fiscal Years 2013, 2014
and the first six months of FY 2015. Net overtime cost represents the Public Safety
departments’ modified overtime budgets offset with revenue received to fund overtime along
with vacancy savings that are being covered by overtime expenditures. Overtime expenditures
for each department are discussed in further detail below.
Fire Department
As of December 31, 2014, the Fire Department expended $1.4 million or 95.6 percent of its FY
2015 Adopted overtime budget, which is slightly higher than the $1.3 million expended for the
same period in FY 2014. The increase is largely attributable to having more vacancies in FY
2015 (approximately 10 vacancies, nine sworn and one non-sworn management position)
compared to FY 2014 (approximately eight vacancies, five sworn, two non-sworn administrative
positions, and one non-sworn management position). Also, during the first half of Fiscal Year
2015 the Fire Department had nine personnel on workers’ compensation paid leave which is
half the number of positions on workers’ compensation paid leave in for the entire Fiscal Year
2014. After adjusting for reimbursement for overtime from Stanford University and vacancies
being backfilled with overtime, the net overtime cost is approximately $346,000.
Staff vacancies and workers' compensation disabilities are the major reasons for the high level
of overtime spending. The remaining use of overtime is related to succession planning, sick
leave, vacation, other leaves (military, bereavement, jury duty), special events (Stanford
Football, Senior Games and Earthquake’s Soccer), seasonal fire station coverage and multiple
mutual aid responses (Strike Teams) to wild land fires and fire station cover assignments
throughout the State during the summer of 2014. To reimburse the City for its participation in
these Strike Teams, the California Office of Emergency Services has approved a reimbursement
to the City for these mutual aid services, in the amount of approximately $185,000 in revenue
from other agencies and a corresponding increase to the Fire Department’s overtime
appropriation are recommended elsewhere in this report. Overall, the Department is tracking
to remain under budget in salary and benefits expenditures, despite the above average
overtime expenses. Staff will continue to monitor overtime expenditures to ensure the
Department will remain within budget by the end of FY 2015.
Police Department
As of December 31, 2014, the Police Department expended $1.0 million or 66.7 percent of its
annual overtime budget, which is similar to the $964,000 expended during the same period in
FY 2014. The similar level of overtime expenditures is attributable to having the same number
of vacancies in FY 2015 (approximately nine vacancies, two sworn, one community service
officer, three dispatchers, two non-sworn administrative positions, and one non-sworn
management position) compared to FY 2014 (approximately nine vacancies, one sworn, two
community service officers, one dispatcher, four non-sworn administrative positions, and one
non-sworn management position). Also, during the first half of Fiscal Year 2015 the Police
Department had 11 personnel on workers’ compensation paid leave which is only three fewer
City of Palo Alto Page 9
than the number of positions on workers’ compensation paid leave in for the entire Fiscal Year
2014, 14.
After adjusting for overtime reimbursements from Stanford and the Utilities Department for
dispatch services, and from neighboring cities for animal control and care services and
vacancies backfilled with overtime, the net overtime cost is approximately $463,000. Traffic
control services at Stanford football games and other events are partially offset by
reimbursements from the University and other organizations. Although, these reimbursements
bring down the net overtime costs for the Department; overall the Department is tracking to
exceed its budget for salary and benefits expenditures. An action is recommended elsewhere
in this report to correct the Department’s budget for Retention/Career Incentive Program
funding that was inadvertently left out of the FY 2015 budget. This funding will only partially
correct the Department’s salary and benefits expenditures. Staff will continue to monitor
overtime expenditures to ensure the Department will come within budget by the end of FY
2015.
Enterprise Funds
The FY 2015 Midyear Budget Summaries (Attachment A, Exhibit 1) provide a financial report of
the Enterprise Funds as of December 31, 2014. This report compares FY 2015 actual
expenditures with FY 2015 Adopted Budget levels including carryover encumbrance balances.
Since in some funds, the carryover encumbrance balances are quite high in comparison to the
budgeted amounts, the actual percent expended in comparison to the budget may well be
above 50 percent. Overall, with the adjustments recommended in this report all enterprise
funds are on track to end the fiscal year within budgeted amounts.
While most of the Enterprise Fund midyear adjustments actions are net zero changes, revenue
and expenditures offsets, and budgetary cleanup items. Notable midyear adjustments to the
City’s Electric, Gas, Water and Airport Enterprise Funds operating budgets are discussed below.
The midyear transactions for the other Enterprise Funds: Fiber Optics, Refuse, Storm Drainage,
Utilities Administration, Wastewater Collection, and Wastewater Treatment reflect small
allocated expenses for the Sustainability Dashboard software and the return of closed out CIP
funding. Detail on those funds and all of the Enterprise Fund midyear adjustments are
presented in greater detail in Exhibit 1. Staff recommendations related to the Enterprise Fund
Capital Improvement Program are discussed later in this report.
Electric Fund
Net reserve reduction of $15,094,756 is recommended primarily due to the drought and
updated revenue projections as summarized below:
Electric commodity purchases are recommended to be increased by $11.3M to reflect
the most current forecasted electric commodity costs. The primary driver of the
commodity increase is low hydroelectric power as a result of the drought conditions.
Hydroelectric power represents approximately 50% of the total electric supply and is
City of Palo Alto Page 10
expected to be 25% lower than budgeted. The low hydroelectric output has resulted in
the need to purchase additional power in the market. Electric market purchases will be
increased by $7.5M to meet customer load. In addition, Western Area Power
Administration has increased the City’s shared cost of the Central Valley Project
Improvement Act (CVPIA) Restoration Fund obligations by $2.8M to offset lower
revenues from CVP water customers. There is also a one-time startup charge of $0.8M
for a new 4.3 megawatt landfill gas-to-energy project in San Joaquin County.
Electric customer sales revenue is recommended to be decreased by $7.1M to reflect
the latest revenue projection. Customer sales revenue in the adopted FY 2015 budget
was inadvertently overstated by $5.3M. Revenue was forecasted lower because
commercial load is growing less than anticipated due to delays in several large
construction projects. In addition, there is continued lower usage and a shift in
commercial consumption patterns. Based on the most recent projections, revenue is
expected to decrease by another $1.8M by the end of FY 2015 including $1.0M
reduction in surplus energy. There are lower sales of surplus electric energy in the
market due to lower hydroelectric power generation.
Transmission costs will be decreased by $2.4M based on the latest forecast by the
California Independent System Operator. Transmission charges are projected lower due
to delays in constructing new transmission lines throughout California to accommodate
new renewable projects.
Gas Fund
Net reserve use in the amount of $3.4 million is recommended primarily due to lower than
expected gas commodity purchase costs and a warmer than expected winter as detailed below:
Gas commodity purchases is recommended to be decreased by $2.1M due to declining
market prices. Driven by ample gas in storage, high production rates, and a lack of cold
winter weather, natural gas prices have declined significantly over the first half of FY
2015. Gas commodity purchases are 10% lower than budgeted.
Gas customer sales is recommended to be decreased by $4.7M to reflect the latest
revenue projection. Customer sales revenue in the adopted FY 2015 budget was
inadvertently overstated by $2.6M. Gas consumption has been trending downward in
the past five years as a result of continued investments in energy efficiency programs.
Due to warmer than average weather, customer consumption is 13% lower than
expected in the financial plan for the first half of FY 2015. As a result of declining
market prices and usage, revenue is expected to decrease by another $2.1M by the end
of FY 2015.
Gas transportation cost will be increased by $0.8M due to rising infrastructure expenses
passed through by PG&E. Palo Alto receives gas at four receiving stations where CPAU’s
distribution system connects with PG&E’s system. PG&E provides only local
transportation service (transportation from the PG&E City Gate gas delivery hub across
PG&E’s distribution system to Palo Alto).
City of Palo Alto Page 11
Water Fund
Net reserve increase in the amount of $43,000 is recommended primarily due to the drought as
detailed below:
A decrease of $1,676,000 in projected revenue due to drought effects as water use has
declined across the board from residential, commercial, industrial and internal (City)
customers.
A corresponding decrease of $1,395,000 in water commodity expenditures as the water
rate from the San Francisco Public Utilities Commission (SFPUC), the City's water
supplier, was substantially lower than projected.
Airport Fund
For the Airport Fund staff recommends a budget augmentation in the amount of $100,000 to
provide for Liability Funding at the Palo Alto Airport as well as a net revenue increase of
$15,000 primarily due to renting space to a local auto dealership partially offset due to lower
than expected revenues from a cell phone tower.
Internal Service Funds
Information Technology
Net reserve reduction in the amount of $143,210 due to the following budget adjustment
recommendations:
$85,000 increase in computer software funding to purchase a Sustainability Dashboard
Application to streamline the collection and analysis of sustainability data and make this
data available for staff to use to in making decisions related to sustainability. 55% of
funding is from the technology surcharge assessed on Municipal Fees, with the
remaining 45% funded by transfers from Enterprise Funds.
$53,540 revenue increase to reflect Stanford's portion of the Radio Infrastructure
Replacement and Computer Aided Dispatch Replacement, based on the Fire Safety
Services contract with Stanford University.
Vehicle Replacement Fund
Net reserve gain in the amount of $409,442 due to Stanford's portion of the Fire Department
Vehicle Replacement CIP for VR-13000 ($105,057) and VR-14000 ($304,385).
Special Revenue Funds
Gas Tax Fund
A technical correction to eliminate the budgeted transfer to the Stanford Research Park Fund is
recommended. In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford
Research Park Fund for various street-related costs. However, it was determined that the
transfers were not used, and therefore the $994,217 originally transferred needs to be
returned to the Gas Tax Fund.
City of Palo Alto Page 12
Stanford Research Park Fund
A technical correction to eliminate the budgeted transfer from the Gas Tax Fund is
recommended. In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford
Research Park Fund for various street-related costs. However, it was determined that the
transfers were not used, and therefore the $994,217 originally transferred needs to be
returned to the Gas Tax Fund.
Capital Improvement Program Budget
Adjustments to the City’s 2015 Capital Improvement Plan for various projects are noted in
Attachment A, Exhibit 2, with specific project adjustments described in Exhibit 3. CIP changes
fall into three basic categories: 1) projects requiring additional appropriations; 2) projects
having reductions in appropriations; and 3) projects with other adjustments such as transfer of
funding between projects, closing completed projects or creating new projects. For General
Fund Capital Projects, different categories have been created, as described below. Highlights of
CIP changes by fund are as follows:
General Fund
The Infrastructure Reserve (IR) serves as the ending fund balance of the Capital Improvement
Fund and is required primarily for cash flow purposes, unforeseen urgent projects, and funding
for future projects not yet budgeted in the Capital Improvement Program. The actions
recommended as part of this report will result in $3.3 million being restored to the IR. This
increase in the IR will be considered in the development of the 2016-2020 Proposed Capital
Improvement Program.
In FY 2015, a significant change to the Municipal Code was approved by the City Council which
will impact the Infrastructure Reserve. Previously, unexpended funds carried over from one
year to the next automatically, as long as the project had expenditures in the previous two
years. As a result of the Municipal Code change that was approved, the City Council will need
to approve the reappropriation of funds annually and funds will no longer automatically carry
forward from one year to the next. Because funds will be reappropriated through the annual
budget document, staff will need to estimate current year expenditures and estimate how
much can be carried forward into the subsequent budget year. It is intended that this change
will give better insight to staff regarding the funding needed for all active projects. This change
in methodology will result in a higher starting IR balance when the IR is presented in the
Proposed Capital Budget.
The table on the following page, as well as the subsequent analysis, summarizes the various
reduction recommendations by category. Additionally, staff is currently reviewing the funding
strategies for future years, and will incorporate adjustments into the FY 2016 capital budget
process with the intention of further increasing the IR to align funding with the assumptions of
the Council approved Infrastructure Plan.
City of Palo Alto Page 13
Mid-Year Increases to the Infrastructure Reserve by
Category
Impact
Project Completions $104,871
Revenue and Alternative Funding Sources $55,376
Strategic Adjustments $3,185,644
Total Mid-Year Increase to IR $3,345,891
Project completions: $104,871 will be realized by closing twelve completed projects.
Revenues and alternative funding sources: $55,126 will be realized through a transfer from
the Cubberley Property Infrastructure Fund to reimburse the Capital Improvement Fund for
projected expenses incurred after January 1, 2015 for the Cubberley Roof Replacement Project
(PF-14000). Additionally, a minor increase in revenue for Charges for Service to recognize
reimbursement from Stanford for its portion (25%) of the Fire Station 1 Improvements CIP
based on the Fire Safety Services contract between Stanford and Palo Alto.
Strategic adjustments: A net contribution to the IR balance in the amount of $3,185,644 is
recommended by reducing funding for the four projects discussed below:
LATP Site Development ($1,486,705 reduction): The LATP Site Development Project is
recommended to be closed as the proposed site development work will not be
permitted by regulatory agencies until there is a proposed use for the site. Once an
intended use for the site is determined, staff will work with regulatory agencies to
approve the new use and return to Council with a related funding request.
Parking and Transportation Improvements ($1,653,367 reduction): As part of the FY
2015 budget process, $2.0 million was allocated for the purchase of Parking Guidance
System, Access Control, and Revenue Collection equipment for the downtown parking
garages. Staff is in the process of awarding a contract for the design of this equipment.
Funding associated with the construction of this equipment is recommended to be
removed until the costs are better defined, however funding is being retained in the
project for the necessary design work ($100,000).
Parking Guidance System, Access Controls & Revenue Collection Equipment ($20,000
addition): Allocates funds for the design of parking guidance systems, access controls,
and revenue collection equipment. Funds were previously allocated in the Parking and
Transportation Improvements Project, as described above, however are being
eliminated from that project until the costs are better defined, and are recommended
to be accounted for in a separate project.
Park Restroom Installation ($65,572 reduction): Funding is recommended to be reduced
from this project until the completion of the Parks Master Plan, which will identify the
ideal location of additional park restrooms.
Enterprise Funds
Consistent with the recommendations of the City Auditor’s Utilities Reserves Audit, the Utilities
City of Palo Alto Page 14
Department is disencumbering funds for several projects as part of an ongoing effort to
improve CIP project management and budgeting for projects. This year, one project has a
revised engineering estimate and needs additional funding to be completed. Projects
requesting additional funding are listed here. All capital project funding adjustments, including
disencumbering and close-outs are shown in Attachment B, Exhibit 2. The net result of midyear
capital adjustments to the Enterprise Funds are shown in the table below.
Gas Fund
WBS GS-10000 - Gas Station 3 Rebuild
Increase funding by $21,640 to complete the project. The remaining balance of $30,125 in the
related contract was accidentally disencumbered, thus omitted in the annual re-appropriation
process; there was also a lengthy delay in the procurement of a specialized part for the rebuild.
Fund # of Projects Total Increase
Total Reduction/Closing
of Projects Net
Electric 14 $0 ($1,796,795) ($1,796,795)
Gas 7 $21,640 ($44,904) ($23,264)
Water 2 $0 ($209,305) ($209,305)
Total Enterprise Funds 21 $21,640 ($2,051,004) ($2,029,364)
Internal Service Funds
The Internal Service Departments have several projects disencumbering funds for several
projects as part of an ongoing effort to improve CIP project management and budgeting for
projects. The complete list of Internal Service Fund capital funding adjustments is shown in
Attachment B, Exhibit 2. The net result of midyear capital adjustments to the Internal Service
Funds are shown in the table below.
Fund # of Projects Total Increase
Total Reduction/Closing
of Projects Net
Vehicle Replacement 3 $0 ($419,681) ($419,681)
Technology 1 $0 ($150,000) ($150,000)
Total Internal Service Funds 4 $0 ($569,681) ($569,681)
Fiscal Year 2015 Midyear Capital Improvement Program Projects Status Report
This report provides the Finance Committee with information on the status of the City’s Capital
Improvement Program (CIP) projects as of December 31, 2014. The following graph summarizes
all General Fund projects by project category and provides five years of actual expenditures.
Information about individual projects within each project category is provided in Attachment C.
City of Palo Alto Page 15
Buildings &
Facilities
Streets &
Sidewalks
Parks &
Open Space
Land &
Land
Improveme
nts
Other
FY 2011 20,250 7,422 1,731 98 1,100
FY 2012 23,868 6,977 1,113 17 259
FY 2013 14,040 12,748 1,480 460 1,340
FY 2014 17,935 10,546 2,898 80 642
FY 2015 YTD 11,607 7,888 2,663 40 400
0
5,000
10,000
15,000
20,000
25,000 General Fund Capital Improvement Program Expenditures Summarized by
Project Category for Five Years: Fiscal Years 2011-2015
($ in thousands)
In the attached matrix (Attachment C), City departments have submitted information on
current projects and commented on any issues that might cause a change in the scope or timing
of the projects. The report is intended to update Council on the progress of all CIP projects
opened at the beginning of FY 2014, and on those that were added or completed during the
fiscal year. The matrix categorizes CIP projects into minor projects (projects that can be
completed within a one-year period) and multi-year projects (projects that have multi-year
budgets and/or complex implementation schedules with identifiable phases). The project
status portion of the matrix identifies the phase of the project as of December 31, 2014 and
illustrates how much progress was made. The table on the following page provides a
description of activities for each phase.
City of Palo Alto Page 16
Phase Activities
Pre-Design Preparation of a feasibility study
Development of a master plan
Definition of a project scope
Preparation of an Environmental Impact Report
Design Hiring a design consultant
Completion of project design
Soliciting bids or proposals
Construction Acquisition of major equipment
Installation
Implementation of a project
In the attached matrix (Attachment C), projects are listed by department for the General Fund
and by fund for the Enterprise and Internal Service Funds. The matrix also includes information
on the total budget of the project from inception; available budget as of the beginning of the
fiscal year; fiscal year expenditures, contingencies, and encumbrances through December 31st;
remaining balance in the project budget as of midyear; and the percentage of completion for
the project.
The matrix does not include “continuous” projects. These projects, such as water meter
replacement, have no definitive beginning or end dates and receive ongoing funding to reflect
continuing replacement cycles or commitments. Continuous projects are listed by responsible
department and fund and include five years of actual expenditures including the current fiscal
year through December 31, 2014 (Attachment D).
Table of Organization Changes
The proposed Full Time Equivalent (FTE) adjustments to the Table of Organization (Attachment
A, Exhibit 3) include the request to add 1.0 Chief Attorney position. Funding for this position
will be added as part of the FY 2016 budget. As an update to the total FTE count for the City,
the table below shows the reduction in FTEs as approved by the Council on Sept. 22, 2014 as
part of outsourcing street sweeping services.
FY 2015
Adopted
FY 2015
Midyear
Change
FY 2015
Adjusted
General Fund 588.58 1.00 589.58
Enterprise Funds 358.34 (7.00)351.34
Other Funds 86.88 0.00 86.88
Total 1033.80 (6.00)1027.80
FY 2015 Midyear Position Change Summary
* Approved at September 22, 2015 City Council Meeting
*
City of Palo Alto Page 17
Resource Impact
Adoption of the attached ordinance will allow for adjustments to the FY 2015 budget, along
with amendments to the Table of Organization, and General Fund CIP projects. With the
approval of this ordinance, the projected ending balance of the General Fund Budget
Stabilization Reserve is $38.0 million.
The projected ending Rate Stabilization Reserve total for all Enterprise funds increases by $18.4
million
Policy Implications
These recommendations are consistent with existing City policies.
Environmental Assessment
This is not a project under Section 21065 for purposes of the California Environmental Quality
Act (CEQA).
Attachments:
Attachment A - FY 2015 Midyear Budget Amendment Ordinance (PDF)
Attachment A, Exhibit 1 - Proposed Fiscal Year 2015 Midyear Adjustments (PDF)
Attachment A, Exhibit 2 - Midyear CIP Adjustments (PDF)
Attachment A, Exhibit 3 - Table of Organization (PDF)
Attachment B - FY 2015 Midyear Financial Report (PDF)
Attachment C - GF CIP Project Expenditures For FYs 2011-2015 (PDF)
Attachment D - FY 2015 Midyear Capital Improvement Program Status Report (PDF)
Attachment E - Continuous Capital Projects Expenditures for Fiscal Years 2011-2015
(PDF)
Attachment F - Public Safety Overtime Analysis FY 2013 - FY 2015 (PDF)
ATTACHMENT A
1
BAOXXX/so updated 2/18/2015
Ordinance No. XXXX
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET
FOR THE FISCAL YEAR 2015 TO ADJUST BUDGETED REVENUES AND EXPENDITURES
IN ACCORDANCE WITH THE RECOMMENDATIONS IN THE MIDYEAR REPORT
The Council of the City of Palo Alto does ordain as follows:
SECTION 1. The Council of the City of Palo Alto finds and determines as follows:
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, including a
Table of Organization describing the staffing for each department; and
B. After reviewing the current budgeted revenues and expenditures for Fiscal Year
2015, adjustments to the budget are recommended to more accurately reflect year‐end
projections; and
C. A staffing adjustment requiring an amendment to the Table of Organization for
the addition of the classification for Chief Attorney; and
D. City Council authorization is needed to amend the fiscal year 2015 budget as
hereinafter set forth;
SECTION 2. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this
ordinance shall become effective upon adoption.
SECTION 3. 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 4. The General Fund Budget Stabilization Reserve is hereby increased by
the sum of Five Million Two Hundred Eighty Four Thousand Seven Hundred Eighty Nine
Dollars ($5,284,789), as described in Exhibit 1. As a result of this change, the Budget
Stabilization Reserve will change to Thirty Seven Million Nine Hundred Sixty One Thousand
($37,961,000).
SECTION 5. The Capital Fund Infrastructure Reserve is hereby increased by the sum
of Three Million Two Hundred Ninety Thousand Two Hundred Sixty Five Dollars
($3,290,265), as described in Exhibit 1.
SECTION 4. The Supply Rate Stabilization Reserve in the Electric Fund is hereby
decreased by the sum of Seven Million Ninety Thousand Thirty Eight Dollars ($7,090,038) as
described in Exhibit 1.
ATTACHMENT A
2
BAOXXX/so updated 2/18/2015
SECTION 5. The Distribution Rate Stabilization Reserve in the Electric Fund is hereby
decreased by the sum of Eight Million Four Thousand Seven Hundred Eighteen Dollars
($8,004,718) as described in Exhibit 1.
SECTION 6. The Rate Stabilization Reserve in the Fiber Optics Fund is hereby
decreased by the sum of Eight Thousand Three Hundred Ninety Dollars ($8,390) as
described in Exhibit 1.
SECTION 7. The Supply Rate Stabilization Reserve in the Gas Fund is hereby
decreased by the sum of Four Million Seven Hundred Thirty Four Thousand Seven Hundred
Seventy Nine Dollars ($4,734,779) as described in Exhibit 1.
SECTION 8. The Distribution Rate Stabilization Reserve in the Gas Fund is hereby
increased by the sum of One Million Three Hundred Twelve Thousand Five Hundred Eighty
One Dollars ($1,312,581) as described in Exhibit 1.
SECTION 9. The Rate Stabilization Reserve in the Wastewater Collection Fund is
hereby increased by the sum of Two Hundred Six Thousand Nine Hundred Twelve Dollars
($206,912) as described in Exhibit 1.
SECTION 10. The Rate Stabilization Reserve in the Water Fund is hereby increased by
the sum of Forty Two Thousand Nine Hundred Seventy Three Dollars ($42,973) as described
in Exhibit 1.
SECTION 11. The Rate Stabilization Reserve in the Refuse Fund is hereby decreased
by the sum of Three Hundred Sixty Three Dollars ($363) as described in Exhibit 1.
SECTION 12. The Rate Stabilization Reserve in the Storm Drainage Fund is hereby
increased by the sum of One Thousand Six Hundred Seven Dollars ($1,607) as described in
Exhibit 1.
SECTION 13. The Rate Stabilization Reserve in the Wastewater Treatment Fund is
hereby increased by the sum of Seven Thousand Four Hundred Thirty Two Dollars ($7,432)
as described in Exhibit 1.
SECTION 14. Adjustments to other funds are made as shown in Exhibit 1. These
changes impact Special Revenue, Internal Service, and Other Funds Reserves as indicated in
Exhibit 1.
SECTION 15. Adjustments to decrease or increase amounts allocated to various
Capital Improvement Projects are made as shown in Exhibit 2. These changes impact the
Infrastructure Reserve and are reflected in the adjustments as shown in Exhibit 1.
ATTACHMENT A
3
BAOXXX/so updated 2/18/2015
SECTION 17. The Table of Organization is hereby amended to reflect the changes
shown in Exhibit 3, which is attached hereto and incorporated herein by reference.
SECTION 18. The Council of the City of Palo Alto hereby finds that this midyear
adjustment is not a project under Section 21065 of the California Environmental Quality Act
and, therefore, no environmental impact assessment is necessary. Capital improvement
projects described in this ordinance will be assessed individually as appropriate.
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
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
NON‐DEPARTMENTAL
Sales Tax 3,281,000 The FY 2015 Adopted Sales Tax revenue estimate was approximately $26.0 million. This report
includes a recommendation to increase the Sales Tax revenue estimate for FY 2015 by $3.3 million
to $29.2 million. Of this growth, a one‐time $1.7 million is attributable to a change in the accrual
period to bring sales receipts accruals in line with all other tax revenue accruals. Prior to FY 2015,
except for Sales Tax, the accrual period for all other major tax revenues was from July 1 to June 30.
For Sales Tax, the accrual period was from mid‐May to mid‐May the following calendar year. This
accrual change results in a one‐time increase in sales receipts for FY 2015 to account for sales tax
receipts from mid‐May 2014 until June 30, 2015 – a 13 ½ month accrual period versus the standard
12 month accrual period. Ongoing sales tax revenue is also showing continued positive growth.
Restaurant and electronic sales are trending higher and auto sales in key, older dealerships are
risingProperty Tax 629,000 The FY 2015 Property Tax receipt was estimated at $31.9 million. The midyear property tax updated
estimate is based on information received from quarterly meetings with the Santa Clara County
Assessor’s Office. The estimate includes appeals on record with the Assessor’s Office, additions to
the roll, and movements in assessed values. After analyzing property tax receipts for the first six
months of the fiscal year, staff recommends increasing the FY 2015 Property Tax revenues by $0.6
million to $32.6 million.Transient Occupancy Tax 1,745,000 During the first six months of the fiscal year, TOT receipts are trending above budgeted levels. In the
first five months of FY 2015 average occupancy and daily room rates were 82 percent and $228,
respectively. While occupancy percentage has held steady, daily room rates has increased 14.3
percent over the prior year. As part of this report, staff recommends increasing TOT projections by
$1.7 million from $14.2 million to $15.9 million. Of this increase, $1.3 million is attributable to the
voter approved TOT rate increase from 12 to 14 percent that took effect on January 1, 2015 and
$0.4 million is due to continued improvement in room rates. The City’s newest hotels (Hilton
Garden Inn and Homewood Suites by Hilton) are expected to open for business on March 1st; the
additional expected TOT revenue has been already included in FY 2015 revenue projections.
Documentary Transfer Tax (1,014,000) This economically sensitive revenue source has experienced ups and downs tied to the City’s
housing market as the mix of commercial and residential transactions can vary significantly from
year to year. Through December 2014, Documentary Transfer Tax receipts are running 44 percent
below the prior year period. As a result, staff recommends a reduction in estimated revenue of $1.0
million from the FY 2015 Adopted Budget amount.
Utility Users Tax (390,000) The City’s utility tax revenue is based on a 5 percent tax on electric, water, gas and telephone usage.
Based on current receipt levels, staff recommends a slight decrease in the revenue estimate by $0.4
million from $11.3 million to $10.9 million primarily due drought related water and gas usage
decreases. Gas usage has been lower than expected due to a warmer than expected winter.
Further, at the November 2014 general election, the voters approved a reduction of the utility user
tax for telephony services from 5 percent to 4.75 percent.
Operating Transfers‐In 91,500 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 4,342,500
Contract Services (8,660) The FY 2015 budget included $1,000,000 in a Shuttle Service Reserve for enhanced shuttle services.
This action transfers $8,660 from the Shuttle Service Reserve to the Planning and Community
Environment Department for additional base shuttle expenses incurred during the fiscal year for the
Crosstown and Embarcadero routes.
General Expense (11,600) The FY 2015 budget included $40,000 for grant writing services to assist City departments in
researching and submitting grant applications to fund or enhance City services. This action transfers
$11,600 from the non‐departmental budget to the Community Services Department to support the
submittal of the three grant applications. (1) Silicon Valley Creates ($1,600) ‐ If awarded, this grant
will be used to supplement the budget for Art Center exhibitions, providing for artist honoraria for
site‐specific project installations, lectures, fine art shipping, and other related exhibition expenses.
(2) ArtPlace America ($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts
destination by leveraging public art, wayfinding, public events, and collaborative arts programming
to create a sense of place for public engagement. (3) National Endowment for the Arts ‐ Our Town
($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts destination by leveraging
public art, wayfinding, public events, and collaborative arts programming to create a sense of place
for public engagement.
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
2/18/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Contingent Account 25,000 Replenish the City Manager's Office Contingency Account for funds to pay for the Know Your
Neighbor program. Request for grants in this amount were accepted as part of the annual grant
submission process. These funds were inadvertently not included in the FY 2015 Adopted Budget
and will be funded in the FY 2016 Base Budget for the City Manager's Office.
Contingent Account 87,356 Replenish the City Manager's Office Contingency Account for funds temporarily reallocated to the
Administrative Services Department to pay Ada's Cafe $87,356 for construction delays at Mitchell
Park Library and Community Center. The reimbursement for Ada's Cafe was approved by the City
Council on Dec. 15, 2014.
Operating Transfers‐Out (932,124) As part of the new five‐year lease agreement with the Palo Alto Unified School District and the City,
the parties agreed to designate approximately $1.8 million per lease year (January through
December) for infrastructure repairs at the Cubberley site. To separately track these funds, the City
established a Cubberley Infrastructure Fund. This action transfers $932,124 from the Cubberley Not‐
To‐Develop Reserve to the newly established Cubberley Infrastructure Fund.
Use Changes (840,028)
5,182,528
CITY ATTORNEY
Salary & Benefits ‐ This action adds 1.0 Chief Attorney position to the Table of Organization to facilitate the
recruitment of this position in advance of the FY 2016 budget process. The funding for this position
of approximately $330,000 will be included in the FY 2016 Base Budget. The position will increase
the ability of the City Attorney’s Office to provide high‐level legal services for strategic advice and
transactional legal services on complex projects, strategic oversight of the litigation portfolio,
assistance with managing and coordinating the Office’s workload, and communicating and
reporting on the Office’s work to City policymakers and the public. It is expected that a portion of
the cost for this position will be offset with a reduction of contractual services for outside counsel
and/or the City Attorney's contingency reserve.
Use Changes ‐
‐
COMMUNITY SERVICES
Charges for Services (23,000) Decrease in Charges for Services revenue from Ballroom Dancing program budget. The City will
continue to provide a Ballroom Dancing program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
Charges for Services (20,000) Decrease in Charges for Services revenue from Vocal Lessons program budget. The City will
continue to provide a Vocal Lessons program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
Source Changes (43,000)
General Expense (23,000) Decrease in General Expenses revenue from Ballroom Dancing program budget. The City will
continue to provide a Ballroom Dancing program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
General Expense (20,000) Decrease in General Expenses revenue from Vocal Lessons program budget. The City will continue
to provide a Ballroom Dancing program, however, in lieu of directly contracting for the ballroom
dancing instructors and collecting the fees for the program, the City will rent the facility to the
ballroom dancing instructors and participants will pay the instructors directly.
General Expense (28,000) On June 2, 2014, the Council approved the FY 2015 Teen Programs using the net revenue collected
from the Bryant Street Garage. This action transfers $28,000 from the Community Services
Department budget to the Library Department to hire a Teen Activity Specialist for the Library to
support the continuation of the MakeX program. Make is a high profile, innovative program
consisting of a mobile makers space originally created by teens for teens under the supervision of
the Library and the Art Center and funded by a California State Library grant. Without this position
the Library will not be able to continue managing and developing this program.
Net Changes To (From) Reserves
Net Changes To (From) Reserves
2/18/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
General Expense 11,600 The FY 2015 budget included $40,000 for grant writing services to assist City departments in
researching and submitting grant applications to fund or enhance City services. This action transfers
$11,600 from the non‐departmental budget to the Community Services Department to support the
submittal of the three grant applications. (1) Silicon Valley Creates ($1,600) ‐ If awarded, this grant
will be used to supplement the budget for Art Center exhibitions, providing for artist honoraria for
site‐specific project installations, lectures, fine art shipping, and other related exhibition expenses.
(2) ArtPlace America ($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts
destination by leveraging public art, wayfinding, public events, and collaborative arts programming
to create a sense of place for public engagement. (3) National Endowment for the Arts ‐ Our Town
($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts destination by leveraging
public art, wayfinding, public events, and collaborative arts programming to create a sense of place
for public engagement.
Use Changes (59,400)
16,400
DEVELOPMENT SERVICES
Salary & Benefits 5,000 This action transfers $5,000 in Management and Professional development training funds from the
Planning and Community Environment Department to the Development Services Department. As
part of the transition to the newly created Development Services Departments, funds were
inadvertently over allocated to Planning and Community Environment Department.
Contract Services 122,579 This action transfers $122,579 in contract services funds from the Planning and Community
Environment Department to the Development Services. As part of the annual reappropriation
process contract funds were erroneously allocated to incorrect cost centers. As a result,
Development Services was underfunded by the amount listed. This action corrects this error.
Use Changes 127,579
(127,579)
FIRE
Charges for Services 275,126 This action increases revenue from Stanford for the Fiscal Year 2014 Year‐End Adjustment by
$275,126 due to a variance between the budgeted and actual costs of providing Fire Services to the
University. The primary contributor to the variance is higher overtime expenses incurred in FY 2014
that the Department used to support succession planning and career development in anticipation of
several key leadership promotions in Fiscal Year 2015.
From Other Agencies 184,296 This action increases revenue from the California Office of Emergency Services for reimbursement
for emergency fire services provided on overtime as part of mutual aid for Strike Teams that
responded to wildfires that were burning during the summer of 2014 around the State.
Source Changes 459,422
Salary & Benefits 184,296 This action increases overtime funding for reimbursement from the California Office of Emergency
Services for emergency fire services provided as part of mutual aid for Strike Teams that responded
to wildfires that were burning during the summer of 2014 around the State.
Facilities & Equipment 20,000 This action funds a Fire Deployment Modeling and Predictive Analytic Software which will be used
for dynamic resource deployment modeling to measure the impact to response times, patient care,
staff workload, and other metrics based on deployment changes. Advanced deployment system
modeling will allow the Department to identify areas of efficiency for system resources and support
decisions to redeploy personnel and apparatus throughout the City and at Stanford University. The
ongoing cost for system maintenance is approximately $3,500.
Use Changes 204,296
255,126 Net Changes To (From) Reserves
Net Changes To (From) Reserves
Net Changes To (From) Reserves
2/18/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
LIBRARY
Other Revenues 4,845 This action increases revenue the City has received from the Pacific Library Partnership (PLP) due to
a one time budget augmentation of California Library Services Act (CLSA) funds offset with a
corresponding expenditure increase. The funds will be used to offset costs of the Linked +
interlibrary loan program for participating organizations. Linked + is a union catalog of contributed
holdings from participating libraries in California. Patrons from member libraries electronically
request an item not available in their own library and it is delivered to them for check‐out.
Other Revenues 15,000 This action increases grant revenue for Maker +: A Summer Maker Program to support the STEAM
(Science, Technology, Engineering, Art & Math) and foster interdisciplinary exploration among
sciences, art, and social sciences. By participating in the program, students will discover solutions
for today's social issues through technology. The program includes opportunities for people of all
ages to participate in a week long structured programming at the Rinconada and Mitchell Park
libraries.Source Changes 19,845
General Expense 4,845 This action increases expenses offset with revenue for a one time budget augmentation of
California Library Services Act (CLSA) funds. The funds will be used to offset costs of the Linked +
interlibrary loan program for participating organizations. Linked + is a union catalog of contributed
holdings from participating libraries in California. Patrons from member libraries electronically
request an item not available in their own library and it is delivered to them for check‐out.
General Expense 15,000 This action increases general expenses for Maker +: A Summer Maker Program to support the
STEAM (Science, Technology, Engineering, Art & Math) and foster interdisciplinary exploration
among sciences, art, and social sciences. By participating in the program, students will discover
solutions for today's social issues through technology. The program includes opportunities for
people of all ages to participate in a week long structured programming at the Rinconada and
Mitchell Park libraries.
General Expense 28,000 On June 2, 2014, the Council approved the FY 2015 Teen Programs using the net revenue collected
from the Bryant Street Garage. This action transfers $28,000 from the Community Services
Department budget to the Library Department to hire a Teen Activity Specialist for the Library to
support the continuation of the MakeX program. Make is a high profile, innovative program
consisting of a mobile makers space originally created by teens for teens under the supervision of
the Library and the Art Center and funded by a California State Library grant. Without this position
the Library will not be able to continue managing and developing this program.
Use Changes 47,845
(28,000)
PLANNING & COMMUNITY ENVIRONMENT
Charges for Services 3,400 Additional revenue received for Greenwaste code enforcement abatement action billed to resident.
Greenwaste is the City of Palo Alto's contractor to collect recyclables, garbage, and yard trimmings
from Palo Alto residents and businesses.
Source Changes 3,400
Salary & Benefits (5,000) This action transfers $5,000 in Management and Professional development training funds from the
Planning and Community Environment Department to the Development Services Department. As
part of the transition to the newly created Development Services Departments, these funds were
inadvertently allocated to Planning and Community Environment Department.
Contract Services 8,660 The FY 2015 budget included $1,000,000 in a Shuttle Service Reserve for enhanced shuttle services.
This action transfers $8,660 from the Shuttle Service Reserve to the Planning and Community
Environment Department for additional base shuttle expenses incurred during the fiscal year for the
Crosstown and Embarcadero routes.
Contract Services 18,000 This action provides additional contract funding to integrate development impact fees into Accela,
the City's online permit processing and tracking system. Currently, development impact fees are
calculated by using a complex and outdated spreadsheets. To provide for better monitoring and a
clearer paper trail, adding impact fees to Accela will allow impact fees to be consistently calculated
and taken over the counter at the Development Center. Adding online permitting capabilities for
simple entitlements will reduce the impact on staff resources and move toward the online
permittingmodelContract Services 3,400 Additional expenses incurred for Greenwaste code enforcement abatement action billed to
resident. Greenwaste is the City of Palo Alto's contractor to collect recyclables, garbage, and yard
trimmings from Palo Alto residents and businesses.
Net Changes To (From) Reserves
2/18/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Contract Services (122,579) This action transfers $122,579 in contract services funds from Planning and Community
Environment Department the to the Development Services. As part of the annual reappropriation
process contract funds were erroneously allocated to incorrect cost centers. As a result,
Development Services was underfunded by the amount listed. This action corrects this error.
Use Changes (97,519)
100,919
POLICE
Charges for Services 145,395 Increase revenue from Stanford for the Fiscal Year 2014 Year‐End Adjustment by $145,395 due to a
variance between the budgeted and actual costs of providing Public Safety Communication Services
to the University. The primary contributor to the variance is related to benefit expenses that were
incurred in the Communications Division; however, the funds were budgeted in other divisions
within the Police Department. This issue was corrected as part of the Fiscal Year 2015 adopted
budget to reduce budget to actual discrepancies in future years.
Source Changes 145,395
Salary & Benefits 260,000 Increase funding for the Retention/Career Incentive Program that is described in the Palo Alto
Peace Officers' Association (PAPOA) Memorandum of Agreement (MOA). The Retention/Career
Incentive Program gives PAPOA employees a 3% special pay after 5 years of service and a 6% special
pay after 10 years of service. This action is a technical correction to add funding for this special pay
to the Police Department's Budget, because it was not included as part of the development of the
Fiscal Year 2015 Operating Budget. This funding will be included as part of the Fiscal Year 2016
BudgetUse Changes 260,000
(114,605)
Total General Fund Changes to BSR 5,284,789
Transfer from the
Cubberley Property
Infrastructure Fund
55,126 Transfers funds from the Cubberley Property Infrastructure Fund to offset costs incurred after
January 1, 2015 in the Cubberley Roof Replacement Project (PF‐14000).
CIP 250 Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Source Changes 55,376
CIP (3,290,515) Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Transfer to University
Avenue Parking Debt
Service Fund
240,402 Transfers funds from the Capital Improvement Fund to the University Avenue Parking Debt Service
Fund. As identified by the City Auditor's Office, $240,402 in unused 2002 University Avenue Off‐
Street Parking Assessments District bonds were left in this fund due to a clerical error. When the
bond funds final expenditure reconciliation was completed for the Lot S/L (PE‐95030) in September
2007 it was incorrectly determined that all the bond funds were expended. As a result, the unused
bond funds need to be transferred to the University Avenue Parking Debt Service Fund to offset the
FY 2016 debt service payment and the related property tax assessment.
Transfer to University
Avenue Parking Permit
Fund
300,000 As mentioned elsewhere in this report, the FY 2015 Adopted Capital Budget included funds in the
Transportation and Parking Improvements Project (PL‐12000) for the purchase of parking guidance
system, access control, and revenue collection equipment. The amount allocated for parking
guidance system equipment ($400,000) was offset by a transfer from the University Avenue Parking
Permit Fund. As the funding for this project is recommended to be removed from the budget as
part of this report, until costs are better defined and the design is completed, it is recommended
that funding is returned to the University Avenue Parking Permit Fund. $100,000 is recommended
to be retained in the Capital Improvement Fund to be used for the design work associated with a
future CIP project to fund the purchase and installation of such equipment.
Use Changes (2,750,113)
2,805,489
Net Changes To (From) Reserves
Net Changes To (From) Reserves
GENERAL FUND CIP
Net Changes To (From) Reserves
2/18/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
AIRPORT FUND
Other Income 15,000 The Palo Alto Airport (PAO) is providing temporary storage for Audi Palo Alto. A Revocable License
Agreement with the Audi Palo Alto dealership was established to store cars on a monthly basis
during their construction project at the Audi dealership. Currently, this parking lot area at the
Airport is not being used for any aviation uses and the cars stored at the Airport are not on display
to the public. This agreement is anticipated to generate approximately $40,000 this year. Partially
offsetting this additional revenue is a $25,000 reduction in revenue that was budgeted for cell
phone tower rentals and has yet to materialize.
Source Changes 15,000
Allocated Charges 100,000 Provides funding for the annual Liability Insurance payment at the Palo Alto Airport. In August 2014
the City took possession of the Palo Alto Airport. When the FY 2015 Adopted Budget was approved,
the timing of the transfer was in question and costs of insurance were unknown. Therefore, the
funding for the liability insurance is requested as part of this report.
Use Changes 100,000
Net Changes To (From) Reserves (85,000)
Fund Balancing Entries
(85,000)Change in Fund Balance
Total Airport Fund (85,000)
ELECTRIC FUND
Net Sales (7,077,000) Previous electric fund revenue forecasts were overestimated given that key customers projected
expansion did not occur. The latest forecast has been adjusted, but the FY 2015 budget reflected
the overestimation. The decrease reflects the correction to the forecasted revenues, not a decrease
in actual revenues received for the first six months of the current fiscal year and as projected for the
remainder of the fiscal year.
Other Income 20,962 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Net Sales (956,000) Decrease to expected surplus energy revenue by approximately $1 million as a result of lower than
expected hydroelectric generation due to dry weather conditions. Lower hydro‐electric power
generation led to lower sales of surplus electric energy in the market.
Other Income 922,000 The City is one of several Western customers who assists the Western Area Power Administration
and Bureau of Reclamation by providing payment of certain charges one month in advance, which
allows those agencies to commit those funds to major capital projects under Federal appropriations
rules. These advance payments are offset by bill discounts one month later. The charges and credits
exactly offset each other, and therefore have no budget impact.
Source Changes (7,090,038)
CIP (1,796,795) Close outs/Changes in CIP Projects (See Attachment A, Exhibit 2 for more detail)
Utility Purchases 902,000 Decrease in costs associated with sales of surplus energy in the summer months. This decrease
offset decreases in revenue for sales of surplus energy. lower hydro‐electric power generation led
to lower sales of surplus electric energy in the market and it is recommended to lower the
estimated revenue.
Utility Purchases (902,000) Decrease in costs associated with sales of energy in the summer months in excess of the City's load.
This decrease is exactly offset by expenditures in Contra Surplus Energy Cost.
Utility Purchases 922,000 The City is one of several Western customers who assists the Western Area Power Administration
and Bureau of Reclamation by providing payment of certain charges one month in advance, which
allows those agencies to commit those funds to major capital projects under Federal appropriations
rules. In accordance with the contract with the WAPA, these advance payments are offset by bill
discounts one month later and therefore have no budget impact.
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
2/18/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Utility Purchases 2,765,000 Increase in charges by Western Area Power Administration for Central Valley Project hydropower
this year due to low revenues from CVP water contractors.
Utility Purchases (2,391,000) Decreases current year transmission costs. Increases in transmission charges forecasted by the
California Independent System Operator have been delayed or are not expected to be implemented
until the next fiscal year.
Utility Purchases (148,000) Prices for local capacity in 2015 were slightly lower than projected.
Utility Purchases 306,000 Increase in commodity purchases is driven by the decreased hydroelectric production via the
Northern California Power Agency (NCPA) Power Pool.
Utility Purchases 795,000 Increased funding for a one‐time charge for the startup of the San Joaquin landfill gas project.
Project was originally projected for FY 2014, but was delayed until FY 2015.
Utility Purchases 7,543,000 Increased funding requested for electricity commodities purchases in the amount of $7.5 million
due to low output from hydroelectric resources caused by to the drought. CPAU has had to
purchase more power in electric markets than was projected in the budget.
Operating Transfer Out 9,513 Increases the transfer to the Utilities Administration Fund by $9,513 ($687 from the Electric
Operating Fund and $8,826 from the Electric Supply Fund) to fund the Utilities Department portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Use Changes 8,004,718
Net Changes To (From) Reserves (15,094,756)
Fund Balancing Entries
(15,094,756)Change in Fund Balance
Total Electric Fund (15,094,756)
FIBER OPTICS FUND
Allocated Charges 169 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 169
Operating Transfers Out 8,500 Increases the transfer to the Technology Fund by $8,500 to fund the Fiber Optics specific portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers Out 599 Increases the transfer to the Utilities Administration Fund by $599 to fund the Utilities Department
portion of the Sustainability Dashboard to streamline the collection and analysis of sustainability
data and make this data available for staff to use to in making decisions related to sustainability.
Use Changes 9,099
Net Changes To (From) Reserves (8,930)
Fund Balancing Entries
(8,930)Change in Fund Balance
Total Fiber Optics Fund (8,930)
GAS FUND
Net Sales (4,743,000) Due to declining gas market prices and a switch to a pass‐through commodity rate as lower
residential consumption, gas sales revenue is expected to be $4.7 million or 13% lower than the
original budget. Residential consumption is lower than normal due to warmer than average
weather.
Other Income 8,221 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes (4,734,779)
CIP (23,264) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Utility Purchases (2,098,754) Commodity Market prices have declined through January 2015.
2/18/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Utility Purchases 804,934 Projected cost of transportation increases. PG&E costs are rising due to infrastructure expenses,
passed on to City.
Operating Transfers Out 4,503 Increases the transfer to the Utilities Administration Fund by $4,503 ($192 from the Gas Operating
Fund and $4,311 from the Gas Supply Fund) to fund the Utilities Department portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Use Changes (1,312,581)
Net Changes To (From) Reserves (3,422,198)
Fund Balancing Entries
(3,422,198)Change in Fund Balance
Total Gas Fund (3,422,198)
Other Income 3,887 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 3,887
CIP
Operating Transfers Out 4,250 Increases the transfer to the Technology Fund by $4,250 to fund the Refuse Fund portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Use Changes 4,250
Net Changes To (From) Reserves (363)
Fund Balancing Entries
(363 Change in Fund Balance
Total Refuse Fund (363)
Other Income 1,607 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 1,607
Net Changes To (From) Reserves 1,607
Fund Balancing Entries
1,607 Change in Fund Balance
Total Storm Drainage Fund 1,607
Operating Transfers In 9,513 Increases the transfer from the Electric Fund by $9,513 ($687 from the Electric Operating Fund and
$8,826 from the Electric Supply Fund) to fund the Utilities Department portion of the Sustainability
Dashboard to streamline the collection and analysis of sustainability data and make this data
available for staff to use to in making decisions related to sustainability.
REFUSE FUND
STORM DRAINAGE FUND
UTILITIES ADMINISTRATION FUND
2/18/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Operating Transfers In 4,503 Increases the transfer from the Gas Fund by $4,503 ($192 from the Gas Operating Fund and $4,311
from the Gas Supply Fund) to fund the Utilities Department portion of the Sustainability Dashboard
to streamline the collection and analysis of sustainability data and make this data available for staff
to use to in making decisions related to sustainability.
Operating Transfers In 599 Increases the transfer from the Fiber Optics Fund by $599 to fund the Utilities Department portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,064 Increases the transfer from the Water Fund by $4,064 to fund the Utilities Department portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 2,571 Increases the transfer from the Wastewater Collections Fund by $2,571 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Source Changes 21,250
Operating Transfers Out 21,250 Increases the transfer to the Technology Fund by $21,250 to fund the Utility Department's portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Use Changes 21,250
Net Changes To (From) Reserves ‐
Fund Balancing Entries
‐ Change in Fund Balance
Total Storm Drainage Fund ‐
Other Income 4,467 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 4,467
CIP (205,016) Close outs/Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Operating Transfers Out 2,571 Increases the transfer to the Utilities Administration Fund by $2,571 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Use Changes (202,445)
Net Changes To (From) Reserves 206,912
Fund Balancing Entries
206,912 Change in Fund Balance
Total Wastewater Collection Fund 206,912
WASTEWATER COLLECTION FUND
2/18/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Other Income 11,682 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 11,682
CIP
Operating Transfers Out 4,250 Increases the transfer to the Technology Fund by $4,250 to fund the Wastewater Treatment Fund
portion of the Sustainability Dashboard to streamline the collection and analysis of sustainability
data and make this data available for staff to use to in making decisions related to sustainability.
Use Changes 4,250
Net Changes To (From) Reserves 7,432
Fund Balancing Entries
7,432 Change in Fund Balance
Total Wastewater Collection Fund 7,432
WATER FUND 7
Other Income 7,505 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Net Sales (1,676,079) Decrease in revenue projections due to drought effects as water use has declined across the board
from residential, commercial, industrial and internal (City) customers. This year, these revenue
decreases are largely offset by corresponding decrease in water purchases. Rates projected to
increase slightly next few years to stabilize revenue. If drought conditions persist beyond FY 2015,
staff may recommend to implement drought rate surcharges.
Source Changes (1,668,574)
CIP (320,326) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Utility Purchases (1,395,285) Water Purchase costs are lower than projected because the final adopted FY 2015 wholesale water
rate from the San Francisco Public Utilities Commission (SFPUC), the City's water supplier, was
substantially lower than projected in the City's FY 2015 budget. In addition, water sales are
substantially lower due to drought restrictions. This budget assumes average rainfall and drought
restrictions lifted in February, but purchase costs may be even lower if the drought continues and
restrictions are not lifted.
Operating Transfers Out 4,064 Increases the transfer to the Utilities Administration Fund by $4,064 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Use Changes (1,711,547)
Net Changes To (From) Reserves 42,973
Fund Balancing Entries
42,973 Change in Fund Balance
Total Water Fund 42,973
WASTEWATER TREATMENT FUND
2/18/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Description
Operating Transfers In 994,217 In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford Research Park Fund
for various street‐related costs. However, it was determined that the transfers were not used, and
therefore the amount originally transferred needs to be returned to the Gas Tax Fund.
Source Changes 994,217
994,217
Operating Transfers
Out
994,217 In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford Research Park Fund
for various street‐related costs. However, it was determined that the transfers were not used, and
therefore the amount originally transferred needs to be returned to the Gas Tax Fund.
Use Changes 994,217
(994,217)
Operating Transfers In 409,442 Stanford's portion of the Fire Department Vehicle Replacement CIP for VR‐13000 ($105,057) and VR‐
14000 ($304,385)
Source Changes 409,442
CIP (419,681) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Use Changes (419,681)
829,123
INTERNAL SERVICE FUNDS
Net Changes To (From) Reserves
VEHICLE REPLACEMENT FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Amount
SPECIAL REVENUE FUNDS
Gas Tax Fund
Net Changes To (From) Reserves
Stanford Research Park Fund
Net Changes To (From) Reserves
2/18/2015
Other Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Description
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Amount
Operating Transfers In 53,540 Stanford's portion of the Radio Infrastructure Replacement CIP (TE‐05000) $30,237 and Computer
Aided Dispatch Replacement CIP (TE‐09000) $23,303
Operating Transfers In 21,250 Increases the transfer from the Utilities Administration Fund by $21,250 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Operating Transfers In 8,500 Increases the transfer from the Fiber Optics Fund by $8,500 to fund the Fiber Optics related portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,250 Increases the transfer from the Refuse Fund by $4,250 to fund the Refuse related portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make this
data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,250 Increases the transfer from the Wastewater Treatment Fund by $4,250 to fund the Wastewater
Treatment related portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Source Changes 91,790
Operating Transfers
Out
20,962 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
169 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
8,221 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
91,500 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
3,887 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
1,607 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
4,467 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
11,682 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
7,505 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Contract Services 85,000 Increase computer software funding to purchase a Sustainability Dashboard Application to streamline
the collection and analysis of sustainability data and make this data available for staff to use to in
making decisions related to sustainability. Based on the current funding split of the Office of
Sustainability, 55% of the cost is covered by the General Fund through funds collected from the
Technology Surcharge ($46,750). The remaining 45% ($38,250) is funded by transfers from the
Utilities Administration Fund (25%, $21,250); Fiber Optics Fund (10%, $8,500); Refuse Fund (5%,
$4,250); and Wastewater Treatment Fund (5%, $4,250).
Use Changes 235,000
(143,210)
INFORMATION TECHNOLOGY FUND
Net Changes To (From) Reserves
2/18/2015
Other Funds 2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
PROJECT COMPLETIONS
ALS EKG Monitor Replacements FD-12000 $ (3) Infrastructure Reserve Removes remaining funding due to completion of
the project
Dimmer Replacement CC-09001 $ (25) Infrastructure Reserve Removes remaining funding due to completion of
the project
Cubberley Restroom PF-06004 $ (50) Infrastructure Reserve Removes remaining funding due to completion of
the project
Alma Guardrail PE-12009 $ (232) Infrastructure Reserve Removes remaining funding due to completion of
the project
Lytton Plaza Renovation PE-08004 $ (1,500) Infrastructure Reserve Removes remaining funding due to completion of
the project
Tree Wells - University Avenue PE-12002 $ (4,299) Infrastructure Reserve Removes remaining funding due to completion of
the project
Art Center Electrical PF-07000 $ (1,530) Infrastructure Reserve Removes remaining funding due to completion of
the project
Parks and PWD Trees PF-12001 $ (41,604) Infrastructure Reserve Removes remaining funding due to completion of
the work programmed within this project, which
rehabilitated office space for the Public Works
Department Street Trees group.
City-Wide Backflow Prevention Installation PF-12004 $ (5,000) Infrastructure Reserve Removes remaining funding due to completion of
the project
Wilkie Way Bridge Design PO-12000 $ (13,566) Infrastructure Reserve Removes remaining funding due to completion of
the project
LATP Site Development PO-12002 $ (2,853) Infrastructure Reserve Removes remaining funding due to completion of
the project
Ventura Community Center PE-10002 $ (34,209) Infrastructure Reserve Removes remaining funding due to completion of
the work programmed within this project, which
included play equipment at Ventura Community
Center.
Subtotal - Project Completions $ - $ (104,871)
STRATEGIC ADJUSTMENTS
LATP Site Development PE-14010 $ (1,486,705) The funding for this project is being returned to the
Infrastructure Reserve because regulatory agencies
have indicated that the proposed site development
work cannot be permitted until there is a use
proposed for the site. The project as proposed was
intended to prepare the site for an as yet
undetermined future use. Once an intended use for
the site is determined, staff will work with regulatory
agencies to approve the new use and return to
Council with a related funding request. During the
FY 2015 budget process, a $500,000 reduction to
this project was approved by Council to fund the
Baylands Levee Improvements Feasibility Study.
Park Restroom Installation PE-06007 $ (65,572) Infrastructure Reserve Removes remaining funding for the Park Restroom
Installation project. The installation of additional
park restrooms is recommended to be deferred until
completion of the Parks Master Plan.
FY 2015 CIP Mid-Year Adjustments
CAPITAL PROJECT FUND
1 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
Parking and Transportation Improvements PL-12000 $ (1,653,367) As part of the FY 2015 budget process, $2.0 million
was allocated to this project for the purchase of
Parking Guidance System, Access Control, and
Revenue Collection equipment for the downtown
parking garages. Staff is in the process of awarding
a contract for the design of this equipment.
Funding associated with the construction of this
equipment is recommended to be removed until the
costs are better defined. Funding remains in the
project for the necessary design work ($100,000).
It should be noted that the project's original budget
of $1.9 million is not fully reduced as funds for this
project were used on unanticipated expenditures
such as improvements along Embracadero Road
and a study for the widening of the intersection at
University and Middlefield.
Parking Guidance Systems, Access Controls, and
Revenue Collection Equipment
$ 20,000 Provides funding for design work associated with
the Parking Guidance Systems, Access Controls,
and Revenue Collection Equipment project. The
installation of this equipment is recommended to be
accounted for in a separate project, rather than the
Parking and Transportation Improvements project.
A reduction to the Parking and Transportation
Improvements project is recommended as part of
this project to offset this cost. It is anticipated that
the 2016-2020 Proposed Capital Improvement
Program will include a recommendation to fund an
additional $80,000 for the design of this project.
Funding for the purchase and installation of this
equipment will be requested once the costs and
associated policy implications are clearly defined.
Subtotal - Strategic Adjustments -$ (3,185,644)$
REVENUE AND ALTERNATIVE FUNDING
SOURCESFire Station 1 Improvements PF-14002 $ 250 $ - Charges for Service Increase revenue for Charges for Service to
recognize reimbursement from Stanford for its
portion (25%) of the Fire Station 1 Improvements
CIP based on the Fire Safety Services contract
between Stanford and Palo Alto.
Subtotal - Revenue and Alternative
Funding Sources
$ 250 $ -
TOTAL GENERAL FUND CIP MID-YEAR
ADJUSTMENTS
$ 250 $ (3,290,515)
2 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
PROJECT COMPLETIONS
Foothills System Rehab EL-04010 $ (82,129) Electric Reserve Removes remaining funding due to completion of
the project
Rebuild UG District 17 EL-09003 $ (82,586) Electric Reserve Removes remaining funding due to completion of
the project
W. Charleston/Wilkie Way EL-09004 $ (85,483) Electric Reserve Removes remaining funding due to completion of
the project
Torreya Court Rebuild EL-11001 $ (7,195) Electric Reserve Removes remaining funding due to completion of
the project
Hewlett Subdivision EL-11004 $ (60,634) Electric Reserve Removes remaining funding due to completion of
the project
Reconductor 60 kV OH EL-11015 $ (67,089) Electric Reserve Removes remaining funding due to completion of
the project
Hanover 22 -Transformer EL-12002 $ (6,679) Electric Reserve Removes remaining funding due to completion of
the project
El Camino Underground EL-05000 $ (200,000) Electric Reserve Removes remaining funding due to completion of
the project
230 kV Electric Intertie EL-06001 $ - Electric Reserve Removes remaining funding due to completion of
the project
UG District 45 EL-06002 $ (75,000) Electric Reserve Removes remaining funding due to completion of
the project
E. Charleston 4/12 k EL-08000 $ (30,000) Electric Reserve Removes remaining funding due to completion of
the project
Smart Grid Technology EL-11014 $ (300,000) Electric Reserve Removes remaining funding due to completion of
the project
Sand Hill / Quarry 1 EL-13006 $ (50,000) Electric Reserve Removes remaining funding due to completion of
the project
Electric System Improvement EL-98003 $ (750,000) Electric Reserve Removes remaining funding due to completion of
the project
Total $ - $ (1,796,795)
TOTAL ELECTRIC FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (1,796,795)
ADDITIONAL APPROPRIATIONS
Gas Station 3 Rebuild GS-10000 $ 21,640 Gas Reserve Remaining balance of $30,125 in a contract for this
project was inadvertently disencumbered and
omitted in the annual reappropriation process. This
action allows for the project to be completed.
Total $ - $ 21,640
PROJECT COMPLETIONS
Directional Boring Machine GS-02013
($414)
Gas Reserve Removes remaining funding due to completion of
the project
Directional Boring Equipment GS-03007
($408)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 2 Rebuild GS-08000
($10,023)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Main Replacement 18 GS-08011
($10,531)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 1 Rebuild GS-09000
($6,631)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 4 Rebuild GS-11001
($16,897)
Gas Reserve Removes remaining funding due to completion of
the project
Total $ - $ (44,904)
GAS FUND
ELECTRIC FUND
3 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
TOTAL GAS FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (23,264)
PROJECT COMPLETIONS
Automated Motor Poll Reservation and Vehicle Key
Management System
VR-07001 $ (10,979) Removes remaining funding due to completion of
the project
Vehicle Replacement VR-11000 $ (325,177) Removes remaining funding due to completion of
the project
In-Ground Vehicle Lift VR-12001 $ (83,525) Removes remaining funding due to completion of
the project
TOTAL VEHICLE REPLACEMENT FUND CIP
MID-YEAR ADJUSTMENTS
(419,681)$
ADDITIONAL APPROPRIATIONS
Total $ - $ -
PROJECT COMPLETIONS
Water Main Replacement Project 23 WS-09001 $ (112,021) Removes remaining funding due to completion of
the project
Water Main Replacement Project 24 WS-10001 $ (208,305) Removes remaining funding due to completion of
the project
Total $ - $ (208,305)
TOTAL WATER FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (208,305)
PROJECT COMPLETIONS
ESS/MSS Enhancements TE-13002 $ (150,000)
TOTAL TECHNOLOGY FUND CIP MID-YEAR
ADJUSTMENTS
(150,000)$
TECHNOLOGY FUND
WATER FUND
VEHICLE REPLACEMENT FUND
4 2/18/2015
Table of Organization
FY 2012
Actuals
FY 2013
Actuals
FY 2014
Adopted
Budget
FY 2015
Adopted
Budget
FY 2015
Modified
Budget
FY 2015
Change FTE
FY 2015
Change %
General Fund
City Attorney
Assistant City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Chief Attorney 0.00 0.00 0.00 0.00 1.00 1.00 0.00%
Claims Investigator 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Legal Fellow 0.00 0.00 0.00 1.00 1.00 1.00 0.00%
Legal Services Administrator 1.00 1.00 1.00 1.00 0.00 -1.00 (100.00)%
Secretary To City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Senior Assistant City Attorney 2.00 2.00 2.00 2.00 2.00 0.00 0.00%
Senior Deputy City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Senior Legal Secretary - Confidential 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Senior Management Analyst 0.00 0.00 0.00 0.00 1.00 1.00 0.00%
Total City Attorney 9.00 9.00 9.00 10.00 11.00 2.00 22.22%
Total General Fund 576.40 579.71 577.80 588.58 589.58 11.78 2.04%
Total Citywide Positions 1,016.60 1,015.35 1,019.35 1,033.80 1,027.80 8.45 0.83%
ATTACHMENT A, EXHIBIT 3
ATTACHMENT B
FISCAL YEAR 2015 MIDYEAR FINANCIAL REPORT
GENERAL FUND
(in thousands)
BUDGET ACTUALS (as of 12/31/14)
Adopted Adjusted Midyear Midyear Pre % of Midyr % Midyr
Categories Budget Budget Budget Changes Encumbr Encumbr Actual Budget*
Revenues & Other Sources
Sales Tax 25,957 25,957 29,238 3,281 4,251 ‐ 8,634 44%
Property Tax 31,927 31,927 32,556 629 ‐ ‐ 11,716 36%
Transient Occupancy Tax 14,156 14,156 15,901 1,745 ‐ ‐ 5,983 38%
Documentary Transfer Tax 7,514 7,514 6,500 (1,014) ‐ ‐ 2,458 38%
Utility Users Tax 11,285 11,285 10,895 (390) ‐ ‐ 5,250 48%
Motor Vehicle Tax, Penalties & Fines 2,164 2,164 2,164 ‐ ‐ ‐ 925 43%
Charges for Services 23,013 24,130 24,510 380 ‐ ‐ 9,182 37%
Permits & Licenses 7,804 7,738 7,738 ‐ ‐ ‐ 3,392 44%
Return on Investment 685 685 685 ‐ ‐ ‐ 289 42%
Rental Income 14,254 14,206 14,206 ‐ ‐ ‐ 7,397 52%
From Other Agencies 453 453 637 184 ‐ ‐ 408 64%
Charges To Other Funds 10,647 10,647 10,647 ‐ ‐ ‐ 5,310 50%
Other Revenues 1,060 1,289 1,309 20 ‐ ‐ 663 51%
Total Revenues 150,919 152,151 156,986 4,835 4,251 ‐ 61,607 42%
Operating Transfers‐In 18,433 18,528 18,620 92 ‐ ‐ 8,804 47%
Encumbrances and Reappropriation 6,386 6,386 ‐ ‐ ‐
From Infrastructure Reserve ‐ ‐ ‐
Contribution from Budget Stabilization Reserve ‐ ‐ ‐
As Assumed in the Adopted Budget 1,732 1,732 1,732 ‐
Total Sources of Funds 171,084 178,797 183,724 4,927 4,251 ‐ 70,411 ‐ 42%
Expenditures & Other Uses
City Attorney 2,578 3,129 3,129 ‐ 10 450 1,303 56%
City Auditor 1,065 1,075 1,075 ‐ 10 39 549 56%
City Clerk 1,276 1,286 1,286 ‐ 10 72 576 51%
City Council 432 517 517 ‐ ‐ 61 173 45%
City Manager 2,728 2,485 2,485 98 227 1,063 56%
Administrative Services 7,175 7,413 7,476 ‐ 21 136 3,453 48%
Community Services 22,764 24,115 24,056 (59) 53 2,729 11,291 59%
Development Services 10,535 10,772 10,900 128 28 385 4,453 45%
Library 7,521 8,253 8,301 48 14 619 3,833 54%
Office of Sustainability 272 575 575 ‐ ‐ 131 244 65%
Public Safety 62,054 62,996 63,460 464 123 1,069 30,175 49%
People Strategy and Operations 3,264 3,757 3,757 ‐ 315 140 1,573 54%
Planning and Community Environment 7,015 8,839 8,741 (98) 100 1,110 3,450 53%
Public Works 13,397 14,315 14,315 311 600 6,492 52%
Non‐Departmental 13,272 12,945 13,036 91 4,251 33%
Total Expenditures 155,348 162,472 163,046 574 1,093 7,768 72,879 50%
Operating Transfers‐Out 2,077 2,276 1,344 (932) ‐ ‐ 1,138 85%
Transfer to Infrastructure 13,659 13,659 13,659 ‐ ‐ 6,830 50%
Total Uses of Funds 171,084 178,407 178,049 (358) 1,093 7,768 80,847 50%
Net Surplus/(Deficit)‐ 390 5,675 5,285
Budget Amendments Authorized by Council thru 12/31/14:* Including reappropriations and prior year encumbrances
Shuttle Contract, EPA Contribution (6/23/14)‐ ‐
Golf Course Operating Budget (6/23/14)‐ ‐
Transportation Management Authority (8/4/14)(30) (30)
Sustainability and Climate Action Plan (8/18/14)(137) (137)
Increase Airport Fund loan for legal counsel (9/22/14)(200) (200)
Golf Course Operating Loss Reserve (9/22/14)‐ ‐
Golf Restaurant Lease Revenue (10/6/14)(23) (23)
Total Augmentations Authorized by Council ‐ (390) (390) ‐
Net Surplus/(Deficit) Without BAOs ‐ 0 5,285 5,285
Net Surplus/(Deficit) After BSR Drawdown ‐ 0 5,285 5,285
BSR Balance as of 12/31/14 33,066 32,676 37,961
BSR % of Total Use of Funds 19.33% 19.00% 22.11%
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 122,484 122,516 114,483 (8,033) 59,485 52%
Interest Income 2,698 2,698 2,698 1,328 49%
Other Income 9,247 9,247 10,169 922 5,884 58%
Reapprop/Encumbrances 14,452 14,473 21 -
Total Sources 134,429 148,913 141,823 (7,090) - - 66,697 52%**
Uses of Funds
Utility Purchases 71,967 71,979 81,781 9,802 13 42,448 52%
Salaries & Benefits 12,803 12,804 12,804 5,942 46%
Contract Services 4,538 6,744 6,744 166 2,655 537 50%
Supplies and Materials 886 912 912 12 43 238 32%
Facilities and Equipment 48 48 48 0%
General Expenses 4,953 5,739 5,739 781 897 29%
Rent and Leases 4,226 4,226 4,226 1,086 26%
Allocated Charges 8,349 8,349 8,349 1,404 17%
Debt Service 9,131 9,131 9,131 4,514 49%
Subtotal 116,901 119,932 129,734 9,802 178 3,492 57,066 47%
Equity Transfer 11,412 11,412 11,412 2,853 25%
Operating Transfers Out 123 123 123 31 25%
Capital Improvement Program 9,740 24,359 22,562 (1,797) 3,246 1,843 5,796 48%
Total Uses 138,176 155,826 163,831 8,005 3,424 5,335 65,746 45%
Net To (From) Reserves (3,747) (6,913) (22,008) (15,095)
Beginning Reserves 133,046 126,013 126,013 -
Projected Ending Reserves 129,299 119,100 104,005 (15,095)
** Excludes encumbrances and reappropriation
BUDGET (as of 12-31-14)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
ELECTRIC FUND
(in thousands of dollars)
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 4,025 4,025 4,025 - 1,901 47%
Interest Income 341 341 341 - 198 58%
Other Income - - - - 0%
Reapprop/Encumbrances 518 518 - -
Total Sources 4,366 4,884 4,884 - - - 2,099 48%**
Uses of Funds
Salaries & Benefits 1,080 1,080 1,080 399 37%
Contract Services 168 467 467 26 97 26%
Supplies and Materials 10 10 10 0%
General Expenses 22 22 22 1 5%
Rent and Leases 55 55 55 13 24%
Allocated Charges 645 645 654 9 93 14%
Subtotal 1,980 2,279 2,288 9 - 26 603 27%
Operating Transfers Out 1 1 1 - 0%
Capital Improvement Program 400 1,200 1,200 - 93 146 20%
Total Uses 2,381 3,480 3,489 9 - 119 749 25%
Net To (From) Reserves 1,985 1,404 1,395 (9)
Beginning Reserves 15,557 19,415 19,415
Projected Ending Reserves 17,542 20,819 20,810 (9)
** Excludes encumbrances and reappropriation
BUDGET (as of 12-31-14)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
FIBER OPTICS FUND
(in thousands of dollars)
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 37,583 37,583 32,840 (4,743) 13,181 40%
Interest Income 715 715 715 278 39%
Other Income 709 709 717 8 413 58%
Reapprop/Encumbrances 11,305 11,305 -
Total Sources 39,007 50,312 45,577 (4,735) - - 13,872 40%**
Uses of Funds
Utility Purchases 14,114 14,114 12,015 (2,099) 3,361 3,931 61%
Salaries & Benefits 5,107 5,121 5,121 2,461 48%
Contract Services 1,400 3,087 3,087 114 1,752 278 69%
Supplies and Materials 478 576 576 154 220 65%
Facilities and Equipment 22 22 22 0%
General Expenses 752 765 1,570 805 59 336 25%
Rent and Leases 529 529 529 149 28%
Allocated Charges 3,923 3,923 3,928 5 716 18%
Debt Service 802 802 802 111 14%
Subtotal 27,127 28,939 27,650 (1,289) 114 5,326 8,202 49%
Equity Transfer 5,730 5,730 5,730 1,433 25%
Operating Transfers Out 472 472 472 437 93%
Capital Improvement Program 2,075 20,677 20,654 (23) 58 6,600 3,516 49%
Total Uses 35,404 55,818 54,506 (1,312) 172 11,926 13,588 47%
Net To (From) Reserves 3,603 (5,506) (8,929) (3,423)
Beginning Reserves 14,326 16,981 16,981 -
Projected Ending Reserves 17,929 11,475 8,052 (3,423)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
GAS FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 15,270 15,270 15,270 7,400 48%
Interest Income 309 309 309 - 160 52%
Other Income 996 996 1,000 4 674 67%
Reapprop/Encumbrances 8,312 8,312 - -
Total Sources 16,575 24,887 24,891 4 - - 8,234 50%**
Uses of Funds
Utility Purchases 8,589 8,589 8,589 4,295 50%
Salaries & Benefits 2,241 2,242 2,242 1,070 48%
Contract Services 319 370 370 25 45 27 26%
Supplies and Materials 325 389 389 138 121 67%
Facilities and Equipment 3 3 3 0%
General Expenses 102 102 102 1 41 41%
Rent and Leases 283 283 283 85 30%
Allocated Charges 2,246 2,246 2,249 3 329 15%
Debt Service 128 128 128 21 16%
Subtotal 14,236 14,352 14,355 3 26 183 5,989 43%
Operating Transfers Out 107 107 107 - 96 90%
Capital Improvement Program 4,067 13,895 13,690 (205) 7,664 2,033 1,461 82%
Total Uses 18,410 28,354 28,152 (202) 7,690 2,216 7,546 62%
Net To (From) Reserves (1,835) (3,467) (3,261) 206
Beginning Reserves 4,554 8,285 8,285 -
Projected Ending Reserves 2,719 4,818 5,024 206
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WASTEWATER COLLECTION FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 38,081 38,081 36,405 (1,676) 20,201 55%
Interest Income 752 752 752 416 55%
Other Income 1,632 1,707 1,715 8 1,592 93%
Reapprop/Encumbrances 15,995 15,995 -
Total Sources 40,465 56,535 54,867 (1,669) - - 22,209 57%**
Uses of Funds
Utility Purchases 18,430 18,430 17,035 (1,395) 9,554 7,413 100%
Salaries & Benefits 5,725 5,705 5,705 2,694 47%
Contract Services 723 1,193 1,193 17 609 192 69%
Supplies and Materials 533 648 648 204 176 59%
Facilities and Equipment 6 6 6 0%
General Expense 542 465 465 5 184 41%
Rents and Leases 3,333 3,333 3,333 606 18%
Allocated Charges 3,654 3,654 3,658 4 825 23%
Debt Service 3,219 3,219 3,219 777 24%
Subtotal 36,165 36,653 35,262 (1,391) 17 10,372 12,867 66%
Equity Transfer - - - -
Operating Transfers Out 362 362 362 340 94%
Capital Improvement Program 5,355 26,372 26,052 (320) 4,469 4,133 1,565 39%
Total Uses 41,882 63,387 61,676 (1,711) 4,486 14,505 14,772 55%
Net To (From) Reserves (1,417) (6,852) (6,810) 43
Beginning Reserves 11,865 21,132 21,132
Projected Ending Reserves 10,448 14,280 14,323 43
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WATER FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 26,761 26,761 26,761 13,789 52%
Interest Income 187 187 187 114 61%
Other Income 2,744 3,805 3,809 4 1,810 48%
Reapprop/Encumbrances 1,046 1,046 -
Total Sources 29,692 31,799 31,803 4 - - 15,713 51%**
Uses of Funds
GreenWaste Hauling Contract 14,131 14,131 14,131 10,146 5,515 111%
Salaries and Benefits 2,968 2,519 2,519 1,361 54%
Contract Services 5,896 7,246 7,246 228 1,075 2,485 52%
Supplies and Materials 154 157 157 18 64 52%
Facilities and Equipment 3 3 3 0%
General Expenses 87 87 87 2 28 34%
Rents and Leases 2,579 2,579 2,579 635 25%
Allocated Charges 2,088 1,730 1,734 4 725 42%
Debt Service 625 625 625 567 91%
Subtotal 28,531 29,077 29,081 4 228 11,241 11,380 79%
Operating Transfers Out 29 29 29 7 24%
Capital Improvement Program 187 5,327 5,327 14 1,020 1,657 51%
Total Uses 28,747 34,433 34,437 4 242 12,261 13,044 74%
Net (From) Landfill Closure Liab - -
Net To (From) Reserves 945 (2,634) (2,634) -
Beginning Reserves (1,857) (672) (672) -
Projected Ending Reserves (912) (3,306) (3,306) -
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
REFUSE FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 5,954 5,954 5,954 3,112 52%
Interest Income 135 135 135 78 58%
Other Income 92 92 94 2 (3) -3%
Reapprop/Encumbrances 6,319 6,319 -
Total Sources 6,181 12,500 12,502 2 - - 3,187 52%**
Uses of Funds
Salaries and Benefits 1,192 1,192 1,192 595 50%
Contract Services 471 603 603 92 125 242 76%
Supplies and Materials 95 112 112 22 24 41%
Facilities and Equipment 8 9 9 0%
General Expenses 168 168 168 179 107%
Rents and Leases 40 40 40 0%
Allocated Charges 905 905 905 247 27%
Debt Service 947 947 947 0%
Subtotal 3,826 3,976 3,976 - 92 147 1,287 38%
Operating Transfers Out 6 6 6 2 33%
Capital Improvement Program 2,811 10,585 10,585 470 1,488 18%
Total Uses 6,643 14,567 14,567 - 92 617 2,777 24%
Net Surplus (Deficit) (462) (2,067) (2,065) 2
Beginning Reserves 2,007 1,601 1,601 -
Projected Ending Reserves 1,545 (466) (464) 2
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
STORM DRAINAGE FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 22,286 22,286 22,286 - 11,075 50%
Interest Income 317 317 317 - 130 41%
Other Income 55 55 67 12 234 349%
Reapprop/Encumbrances 22,599 22,599 -
Total Sources 22,658 45,257 45,269 12 - - 11,439 50%**
Uses of Funds
Salaries and Benefits 10,318 10,318 10,318 5,035 49%
Contract Services 1,898 2,740 2,740 116 1,112 531 64%
Supplies and Materials 1,636 1,925 1,925 5 815 838 86%
Facilities and Equipment 7 7 7 0%
General Expenses 431 431 431 469 109%
Rents and Leases - - - 0%
Allocated Charges 4,982 4,982 4,986 4 2,024 41%
Debt Service 821 821 821 0%
Subtotal 20,093 21,224 21,228 4 121 1,927 8,897 52%
Operating Transfers Out - - - - 0%
Capital Improvement Program 3,478 13,205 13,205 - 778 2,638 1,026 34%
Total Uses 23,571 34,429 34,433 4 899 4,565 9,923 45%
Net To (From) Reserves (913) 10,828 10,836 8
Beginning Reserves 10,169 8,022 8,022 -
Projected Ending Reserves 9,256 18,850 18,858 8
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WASTEWATER TREATMENT FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre- % of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales - - - - - 0%
Interest Income 5 5 5 - 1 20%
Other Income 1,305 2,045 2,060 15 587 28%
Reapprop/Encumbrances 151 151 -
Total Sources 1,310 2,201 2,216 15 - - 588 28%**
Uses of Funds
Salaries and Benefits 363 363 363 - 248 68%
Contract Services 307 658 658 55 52 339 68%
Supplies and Materials 32 32 32 - 5 0%
Facilities and Equipment 15 15 15 - - 0%
General Expenses 5 5 5 - 2 0%
Rents and Leases 5 5 5 - 4 0%
Allocated Charges 57 57 157 100 19 12%
Debt Service - - - - - 0%
Subtotal 784 1,135 1,235 100 55 52 617 59%
Operating Transfers Out - - - - - 0%
Capital Improvement Program 180 540 540 - - 0%
Total Uses 964 1,675 1,775 100 55 52 617 41%
Net To (From) Reserves 346 526 441 (85)
Beginning Reserves (520) (1,039) (1,039) -
Projected Ending Reserves (174) (513) (598) (85)
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
AIRPORT FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
Attachment C
Page 1 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
AC-09001 Children's Theatre
Replacement and Expansion
Buildings
and
Facilities
5,019$ 4,581$ 64,235$
AC-09002 Community Theatre Sound
System Replacement
Buildings
and
Facilities
6,844 86,389 59,513
AC-14000 Art Center Auditorium
Audio, Visual, and
Furnishings
Buildings
and
Facilities
5,678
CC-09001 Dimmer Replacement and
Lighting System
Buildings
and
Facilities
7,611$ 4,609$ 11,266 149,191
CC-10000 Replacement of Cubberley
Gym B Bleachers
Buildings
and
Facilities
29,495
CC-11000 Cubberley Gym Activity
Room
Buildings
and
Facilities
58,041
FD-08001 Fire Station #6
Improvements
Buildings
and
Facilities
48,110 271
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
Attachment C
Page 2 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-05010 College Terrace Library
Improvements
Buildings
and
Facilities
846,020 7,344 4,600
PE-06001 San Antonio Bridge
Structural Repairs &
Maintenance
Buildings
and
Facilities
82,782
PE-09003 City Facility Parking Lot
Maintenance
Buildings
and
Facilities
51,098 30,634 12,446 3,030
PE-09005 Downtown Library
Improvements
Buildings
and
Facilities
3,133,576 714,043 31,093 580
PE-09006 Mitchell Park Library &
Community Center
(New Construction)
Buildings
and
Facilities
10,381,000 14,213,182 8,691,974 4,150,743 1,151,848
PE-09010 Library & Community
Center Temporary Facilities
Buildings
and
Facilities
110,020 2,205 412 4,540
PE-10002 Ventura Community Center
and Park
Buildings
and
Facilities
21,130 287,503 140,475
Attachment C
Page 3 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-11000 Main Library New
Construction and
Improvements
Buildings
and
Facilities
792,913 1,139,804 741,837 11,548,567 8,591,707
PE-11012 Temporary Main Library Buildings
and
Facilities
96,435 429,616 29,997
PE-12017 City Hall 1st Floor Buildings
and
Facilities
63,537 91,491 377,655 1,153,722
PE-14015 Lucie Stern
Mechanical/Elecrical
Upgrades
Buildings
and
Facilities
219,686 72,331
PE-14018 Baylands Interpretive Center
Improvements & Boardwalk
Repair
Buildings
and
Facilities
28,738 1,063
PE-98020 Public Safety Building Buildings
and
Facilities
30,910 14,943 7,252 17,143 3,604
PE-95030 Downtown Parking Structure Buildings
and
Facilities
469
Attachment C
Page 4 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-00006 Roofing Replacement Buildings
and
Facilities
104,617 319,495 246,068 119,682 3,559
PF-01002 Civic Center Infrastructure
Improvements
Buildings
and
Facilities
3,803,962 1,950,609 423,121 344,298 42,329
PF-01003 Building Systems
Improvements
Buildings
and
Facilities
74,876 59,798 34,320 150,878
PF-01004 Fire Station Improvements Buildings
and
Facilities
394
PF-02022 Facility Interior Finishes Buildings
and
Facilities
23,874 234,085 70,609 390,667 17,940
PF-04000 Security System
Improvements
Buildings
and
Facilities
3,581
PF-05002 Municipal Service Center
Renovation
Buildings
and
Facilities
12,176
Attachment C
Page 5 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-05003 Foothills Park Interpretive
Center Improvements
Buildings
and
Facilities
12,897 141,633 7,869 36,063 2,768
PF-06004 Cubberley Restroom
Renovation
Buildings
and
Facilities
27,422 3,129 11,849 86
PF-07000 Art Center Electrical &
Mechanical Upgrades
Buildings
and
Facilities
543,877 4,628,983 2,418,160 5,223 1,470
PF-07003 Children's Theatre Fire/Life
Safety Upgrade
Buildings
and
Facilities
6,150 131
PF-07011 Roth Building Maintenance Buildings
and
Facilities
1,205
PF-09000 Children's Theatre
Improvements
Buildings
and
Facilities
30,199 52,172
PF-09002 Lucie Stern Community
Center and Theatre Exterior
Paint
Buildings
and
Facilities
90,816
Attachment C
Page 6 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-10002 Lot "J" Cowper/Webster
Structural Repairs
Buildings
and
Facilities
15,260 32,672 448,804
PF-11001 Council Chambers Carpet
Replacement
Buildings
and
Facilities
80,000
PF-14000 Cubberley Roof
Replacements
Buildings
and
Facilities
1,489 298,696
PF-14002 Fire Station 1 Improvements Buildings
and
Facilities
820 151
PF-14003 University Avenue Parking
District Parking
Improvements
Buildings
and
Facilities
51,117
PF-15005 Emergency Facility
Improvements
Buildings
and
Facilities
48,058
PF-93009 ADA Compliance Buildings
and
Facilities
9,994 167,537 10,019 16,024 834
Total Buildings and
Facilities
20,250,843$ 23,867,878$ 14,040,559$ 17,934,710$ 11,607,076$
Attachment C
Page 7 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
AC-86017 Art in Public Places Land
and
Land
Improvements
77,956$ 17,171$ 59,526$ 80,497$ 40,015$
AS-08000 Acquisition of Los Altos
Treatment Plant
Land
and
Land
Improvements
400,000
AS-09000 City of Palo Alto Municipal
Airport Transition Project
Land
and
Land
Improvements
4,050
PE-09004 Los Altos Treatment Plant
Master Plan Study
Land
and
Land
Improvements
16,278
Total Land and Land
Improvements
98,284$ 17,171$ 459,526$ 80,497$ 40,015$
FD-12000 ALS EKG Monitor
Replacement
Miscellaneous 517,914$ 92,966$
Attachment C
Page 8 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
LB-11000 Furniture & Technology for
Measure N Project
Miscellaneous 28,124$ 178,774$ 531,457 449,827 399,653$
PE-12002 Tree Wells - University
Avenue Irrigation
Miscellaneous 28,743 152,993 37,553 350
PE-12004 Municipal Services Center
Facilities Study
Miscellaneous 220
PE-12009 Alma Guardrail Miscellaneous 5,888 34,353 397
PD-08000 Crime Scene Evidence
Collection Vehicle
Miscellaneous 174,201 6,039
PF-12004 Citywide Backflow
Preventer Installations
Miscellaneous 95,643
PO-10002 Downtown Tree Grates Miscellaneous 8,136
PO-12002 LATP Site Development
Preparation & Security
Miscellaneous 8,636 7,668 61,147
Attachment C
Page 9 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
Total Miscellaneous 210,461$ 228,300$ 1,340,028$ 641,890$ 400,003$
FD-05000 Sixteen (16) ALS Monitors Non-Infrastructure
Management
Plan
434$
PD-07000 Mobile Command Vehicle Non-Infrastructure
Management
Plan
695,337
PL-05002 Charleston/Arastradero
Corridor Plan
Non-Infrastructure
Management
Plan
193,613 26,988$
PL-06002 Comprehensive Parking
Signage Plan
Non-Infrastructure
Management
Plan
4,248
Total Non-Infrastructure
Management Plan
889,384$ 31,236$ -$ -$ -$
AC-10000 Junior Museum & Zoo New
Bobcat Habitat
Parks
and
Open Space
23,210$
Attachment C
Page 10 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
AC-12001 Junior Museum & Zoo
Perimeter Fence and
Footpath
Parks
and
Open Space
31,101$
OS-00001 Open Space Trails and
Amenities
Parks
and
Open Space
47,473 162,466$ 125,150 93,274$ 136,816$
OS-00002 Open Space Lakes & Ponds
Maintenance
Parks
and
Open Space
54,097 24,615 15,000 35,000 14,067
OS-07000 Foothills Park Road
Improvements
Parks
and
Open Space
150,000
OS-09001 Off-Road Pathway
Resurfacing and Repair
Parks
and
Open Space
4,130 13,248 52,060 1,250
OS-09002 Baylands Emergency Access
Levee Repair
Parks
and
Open Space
54,098
PE-06005 University Avenue Gateway
Landscaping Improvements
Parks
and
Open Space
1,479 429 486
Attachment C
Page 11 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-06007 Park Restroom Installation Parks
and
Open Space
224,048 98,119 147,865 132,515
PE-07005 California Avenue
Improvements
Parks
and
Open Space
53,810
PE-08001 Rinconade Park
Improvements
Parks
and
Open Space
2,591 1,089
PE-08004 Lytton Plaza Renovation Parks
and
Open Space
2,545 11,793 11,570 3,542
PE-09002 Greer Park Phase IV Parks
and
Open Space
925,076 142,030 8,078
PE-12003 Rinconada Park Master Plan
& Design
Parks
and
Open Space
121,690 118,299 36,125 5,706
PE-12012 Eleanor Pardee Park
Improvements
Parks
and
Open Space
21,827 26,641 657,659 308
Attachment C
Page 12 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-12013 Magical Bridge Playground Parks
and
Open Space
129,237 92,606 134,795 1,967,097
PE-13003 Parks Master Plan Parks
and
Open Space
29,193 120,719 168,612
PE-13005 City Hall/King Plaza
Landscape
Parks
and
Open Space
1,337 72,956 13,462
PE-13007 El Camino Park Dog Park Parks
and
Open Space
977 2,117 347
PE-13008 Bowden Park Improvements Parks
and
Open Space
36,961 27,719
PE-13010 Greer Park Renovations Parks
and
Open Space
1,896 58,589 1,559
PE-13016 El Camino Park Expanded
Parking Lot and New
Restroom
Parks
and
Open Space
8,886 33,976 52,543
Attachment C
Page 13 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-13020 Byxbee Park Trails Parks
and
Open Space
21,374 4,625 56,061
PE-14010 LATP Site Development
Preparation & Security
Improvements
Parks
and
Open Space
9,764 1,322
PE-15022 Palo Alto Community
Gardens Irrigation System
Parks
and
Open Space
5,203
PE-15028 Baylands Levee
Improvements Feasibility
Study
Parks
and
Open Space
58,500
PF-12001 Parks and PWD Trees Work
Space Improvements
Parks
and
Open Space
836 7,515 371,406 249
PG-06001 Tennis and Basketball Court
Resurfacing
Parks
and
Open Space
77,512 53,635 506
PG-06003 Benches, Signage, Fencing,
Walkways, and Perimeter
Landscaping
Parks
and
Open Space
118,366 105,225 168,788 242,964 34,056
Attachment C
Page 14 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PG-09002 Park and Open Space
Emergency Repairs
Parks
and
Open Space
147,651 52,875 42,793 100,044 12,070
PG-09003 Park Maintenance Shop
Remodel
Parks
and
Open Space
55,414 2,244 3,760
PG-11000 Hopkins Park Improvements Parks
and
Open Space
4,100 8,400
PG-11001 Cogswell Plaza
Improvements
Parks
and
Open Space
11,123 134,635
PG-11002 Monroe Park Improvements Parks
and
Open Space
3,200 794 3,000
PG-11003 Scott Park Improvements Parks
and
Open Space
618
PG-12002 Golf Course Tree
Maintenance
Parks
and
Open Space
21,014 3,597 28,358
Attachment C
Page 15 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PG-13001 Stanford/Palo Alto Soccer
Turf Replacement
Parks
and
Open Space
373
PG-13002 El Camino Park Playing
Fields and Amenities
Parks
and
Open Space
314,994 22,300
PG-13003 Golf Reconfiguring Parks
and
Open Space
406,950 367,478 50,583
Total Parks and Open
Space
1,730,681$ 1,113,288$ 1,480,052$ 2,897,563$ 2,662,650$
PE-00104 San Antonio Road Median
Improvements
Streets
and
Sidewalks
142,556$ 676,384$ 314,834$ 58,823$
PE-11011 Highway 101 Pedestrian /
Bicycle Overcrossing
Streets
and
Sidewalks
194,020 115,011 263,479 270,055 115,010$
PE-12011 Newell Road Bridge / San
Francisquito Creek Bridge
Replacement
Streets
and
Sidewalks
55,715 328,933 163,774 27,642
Attachment C
Page 16 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-13011 Charleston/Arastradero
Corridor Project
Streets
and
Sidewalks
32,880 106,656 264,107
PE-13012 Structural Assessment of
City Bridges
Streets
and
Sidewalks
285
PE-13014 Streetlight Condition
Assessment
Streets
and
Sidewalks
662
PE-13017 El Camino Median
Landscape Improvements
Streets
and
Sidewalks
2,620
PE-13022 University Avenue
Pedestrian/Bicycle
Underpass Rehabilitation
Streets
and
Sidewalks
178,901
PE-86070 Street Improvements (Street
Improvement Fund)
Streets
and
Sidewalks
4,710,791 3,170,679 7,097,782 5,072,597 2,467,328
PL-00026 Safe Routes to School Streets
and
Sidewalks
20,750 87,321 294,601 439,395 76,843
Attachment C
Page 17 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PL-04010 Bicycle Transportation Plan
Implementation Project
Streets
and
Sidewalks
80,862 103,599 57,921 135,827 430,287
PL-05030 Traffic Signal Upgrades Streets
and
Sidewalks
183,141 244,272 385,302 290,944 236,636
PL-07002 El Camino Real/ Stanford
Intersection
Streets
and
Sidewalks
247,112 341,683 963,546
PL-11001 Dinah SummerHill
Pedestrian/Bicycle Path
Streets
and
Sidewalks
188,187 2,845 6,853
PL-11002 California Avenue Transit
Hub Corridor
Streets
and
Sidewalks
16,361 81,210 573,960 2,576,593
PL-11003 Palo Alto Traffic Signal
Central System
Streets
and
Sidewalks
35,528
PL-11004 Alma Street Traffic Signal
Improvements
Streets
and
Sidewalks
645
Attachment C
Page 18 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PL-12000 Transportation and Parking
Improvements
Streets
and
Sidewalks
91,002 292,854 579,002 293,888
PL-14000 El Camino Real and
Churchill Avenue
Intersection Improvements
Streets
and
Sidewalks
8,225 9,292
PL-14001 Matador Creek Trail Streets
and
Sidewalks
12,054
PL-98013 School Commute Safety
Improvements (SIF)
Streets
and
Sidewalks
6,170
PO-05054 Street Light Improvements Streets
and
Sidewalks
159,070 61,844 69,707 74,636 18,147
PO-11000 Sign Reflectivity Upgrade Streets
and
Sidewalks
20,792 136,380 2,029 17,475
PO-11001 Thermoplastic Lane Marking
and Striping
Streets
and
Sidewalks
29,639 127,958 74,614 82,332
Attachment C
Page 19 of 19 2/12/2015
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PO-12000 Wilkie Way Bridge Deck
Replacement
Streets
and
Sidewalks
37,944
PO-12001 Curb and Gutter Repairs Streets
and
Sidewalks
1,851 287,582 368,699 2,962
PO-12003 Foothills Fire Management Streets
and
Sidewalks
19,884 113,723
PO-89003 Sidewalk Improvements Streets
and
Sidewalks
1,611,917 1,673,715 1,864,954 2,160,793 1,336,097
Total Streets and Sidewalks 7,421,556$ 6,977,019$ 12,748,209$ 10,546,267$ 7,887,928$
Grand Total 30,601,209$ 32,234,892$ 30,068,374$ 32,100,927$ 22,597,672$
Attachment D
GENERAL FUND
COMMUNITY SERVICES DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
AC-09001 Children's Theatre
Replacement and
Expansion
Buildings
and
Facilities
$107,600 $98,000 $64,235 $0 $33,765 $0 100%Construction Jun 15 Construction began in May 2014 for installation of a
theatrical audio system, inclusive of an assisted listening
system.
AC-09002 Community Theater
Sound System
Replacement
Buildings
and
Facilities
$200,000 $106,767 $59,513 $0 $26,594 $20,660 90%Construction Oct 15 This project is under construction and it is anticipated that
it will be fully expended upon completion in Fall 2015.
AC-14000 Art Center Auditorium
Audio, Visual, and
Furnishings
Buildings
and
Facilities
$150,000 $150,000 $5,678 $0 $0 $144,322 4%Design Sep 15 Replacement of audio visual equipment and furnishings to
return auditorium back to intended use after being vacated
by temporary library.
CC-09001 Dimmer Replacement
and Lighting System
Buildings
and
Facilities
$180,651 $11,590 $0 $0 $11,565 $25 100%Complete Nov '13 Theatre dimmer system replaced and most lights converted
to LED. Remaining funding recommended to be restored
to Infrastructure Reserve as part of this report.
OS-09002 Baylands Emergency
Access Levee Repair
Parks
and
Open Space
$175,000 $120,902 $0 $0 $0 $120,902 31%Design Sept 15 Design and EIR complete. Project now independent of
JPA and will no longer be paired with JPA flood control
project. Construction start date pending permits.
PG-09003 Park Maintenance Shop
Remodel
Parks
and
Open Space
$159,096 $94,419 $0 $0 $0 $94,419 41%Complete Feb 15 This project is complete and will be closed out as part of
the 2016 budget process.
PG-11000 Hopkins Park
Improvements
Parks
and
Open Space
$95,000 $82,500 $0 $0 $82,500 $0 100%Construction Feb 15 Design Complete. Construction contract awarded. Project
scheduled for completion in February 2015.
PG-11002 Monroe Park
Improvements
Parks
and
Open Space
$250,000 $246,006 $3,000 $0 $6,300 $236,706 5%Design Aug 15 Design is 90% complete. This proect is scheduled to go
out to bid in April 2015.
PG-11003 Scott Park
Improvements
Parks
and
Open Space
$100,000 $99,383 $0 $0 $99,383 $0 100%Design Jun 15 Design complete.(paid under PG-06003). Out to bid
December 2014.
PG-12001 Stanford / Palo Alto
Playing Field Netting
Parks
and
Open Space
$50,000 $50,000 $0 $0 $0 $50,000 0%Design TBD Project to be done concurrently with project PG-13001
Stanford Palo Alto Soccer Turf Replacement.
PG-12002 Golf Course Tree
Maintenance
Parks
and
Open Space
$43,597 $40,000 $28,358 $0 $0 $11,642 73%Ongoing TBD Further utilization of this project may be necessary for
emergency tree care until the Golf Course reconfiguration
project commences.
PG-12004 Sarah Wallis Park
Improvements
Parks
and
Open Space
$65,000 $65,000 $0 $0 $0 $65,000 0%Pre-Design TBD Staff in initial planning and development of scope of
contract.
PG-14000 Ramos Park
Improvements
Parks
and
Open Space
$175,000 $175,000 $0 $0 $0 $175,000 0% Design Aug 15 Staff in initial planning and development of scope of
contract.
OS-00001 Open Space Trails &
Amenities
Parks
and
Open Space
$2,401,209 $388,640 $136,816 $0 $32,712 $219,112 N/A Ongoing Ongoing Various trail improvements at Arastradero, Foothills Park
and Baylands. In Year 1 of a 3 year contract.
OS-00002 Open Space Lakes &
Ponds Maintenance
Parks
and
Open Space
$442,183 $14,920 $14,067 $0 $3,517 ($2,664)N/A Ongoing Ongoing Contract awarded in October 2014. In year 1 of 3 year
contract for maintenance of Boronda Lake.
MULTI-YEAR PROJECTS
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
2/18/2015Page 1 of 28
Attachment D
GENERAL FUND
COMMUNITY SERVICES DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
OS-09001 Off-Road Pathway
Resurfacing and Repair
Parks
and
Open Space
$426,357 $361,049 $1,250 $0 $0 $359,799 N/A Ongoing Ongoing Work is now done in-house by Public Works Engineering
or combined with their paving contracts.
PG-06001 Tennis & Basketball
Court Resurfacing
Parks
and
Open Space
$956,443 $465,112 $0 $0 $13,360 $451,752 N/A Ongoing Ongoing Staff in planning and development of scope of contract.
PG-06003 Benches, Signage,
Fencing, Walkways, and
Perimeter Landscaping
Parks
and
Open Space
$928,643 $160,092 $34,056 $0 $66,568 $59,468 N/A Ongoing Ongoing Recent projects completed: Golf Course signage, Lucie
Stern brick pathway design, and Baylands Nature Preserve
picnic area site improvements.
PG-09002 Park and Open Space
Emergency Repairs
Parks
and
Open Space
$492,761 $100,325 $12,070 $0 $73,617 $14,638 N/A Ongoing Ongoing Recent projects completed: Playground equipment repairs
at Cameron, Werry and Rinconada Parks.
PG-13001 Stanford / Palo Alto
Soccer Turf
Replacement
Parks
and
Open Space
$725,000 $725,000 $373 $0 $0 $724,627 0%Design Aug 15 It is expected that this project will go out to bid in May
2015. Estimated completion is August 2015.
PG-13002 El Camino Park Playing
Fields and Amenities
Parks
and
Open Space
$3,538,700 $3,223,706 $22,300 $0 $2,614 $3,198,792 10%Construction Nov 15 Currently under construction. Estimated project
completion is November 2015.
PG-13003 Golf Course
Reconfiguration and
Baylands Athletic
Center
Parks
and
Open Space
$11,258,312 $10,483,884 $50,583 $0 $436,314 $9,996,987 11%Design Oct 17 Waiting for permits from state and federal resource
agencies to begin construction; funds anticipated to be
reappropriated to FY 2016 as part of FY 2016 Proposed
Capital Budget.
2/18/2015Page 2 of 28
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Percent Expended/Completion
Number Title Category Inception Budget Adjustments Balance Complete Encumbered Date Comments
FD-14002 Fire Ringdown
System
Replacement
Buildings and
Facilities
$157,500 $157,500 $0 $0 $0 $157,500 0%Pre-design Jun-2016 It is anticipated that
funding will be
reappropriated to FY
2016 as part of the
2016 Proposed Capital
Budget.
FD-12000 ALS EKG
Monitor
Replacement
Miscellaneous $610,884 $3 $0 $0 $0 $3 100%Complete Project Complete.
Remaining funding
recommended to be
restored to the
Infrastructure Reserve
as part of this report.
FD-13000 Long Range
CCTV Cameras
Miscellaneous $65,000 $65,000 $0 $0 $0 $65,000 0%Pre-design It is anticipated that
funding will be
reappropriated to FY
2016 as part of the
2016 Proposed Capital
Budget.
GENERAL FUND
FIRE DEPARTMENT
MULTI-YEAR PROJECTS
MINOR PROJECTS
2/18/2015
Page 3 of 28
Attachment D
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
LB-11000 Furniture &
Technology for
Library Measure N
Project
Miscellaneous $2,471,000 $1,282,817 $399,653 $0 $806,861 $76,303 97%Construction Jun 15 It is anticipated that this
project will be complete by
the end of this fiscal year.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
GENERAL FUND
LIBRARY SERVICES DEPARTMENT
MULTI-YEAR PROJECTS
2/18/2015
Page 4 of 28
Attachment D
GENERAL FUND
PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
PL-11001 Dinah SummerHill
Pedestrian Bicycle
Path
Streets
and
Sidewalks
$309,101 $116,052 $0 $0 $0 $116,052 62%Design Jun 15 It is anticipated that construction on this
project will commence in Summer 2015.
PL-14000 El Camino Real and
Churchill Avenue
Intersection
Improvements
Streets
and
Sidewalks
$307,608 $299,384 $9,292 $0 $257,483 $32,609 89%Construction Jun 15 It is anticipated that this project will be
completed by the end of this fiscal year.
PL-15001 Embarcadero Road
Corridor
Improvements
Streets
and
Sidewalks
$498,957 $498,957 $0 $0 $0 $498,957 0%Design Fall 2015 It is anticipated that construction on this
project will commence in May 2015.
PL-00026 Local and
Neighborhood
Collector Street
Traffic Calming
Program (SIF)
("Safe Routes To
Schools")
Streets
and
Sidewalks
$1,772,077 $523,920 $76,843 $0 $212,274 $234,803 N/A Ongoing N/A Ongoing project
PL-04010 Bicycle and
Pedestrian
Transportation Plan
Implementation
Project
Streets
and
Sidewalks
$2,765,106 $2,348,414 $430,287 $0 $530,883 $1,387,244 N/A Ongoing N/A Ongoing project
PL-11002 California Avenue
Transit Hub
Corridor
Streets
and
Sidewalks
$6,873,206 $6,201,983 $2,576,593 $0 $1,282,971 $2,342,419 66%Construction Spring 2015 It is anticipated that this project will be
completed by the end of this fiscal year.
PL-11003 Palo Alto Traffic
Signal Central
System
Streets
and
Sidewalks
$400,000 $364,472 $0 $0 $0 $364,472 9%Design December 2015 It is anticipated that this project will be
completed by the end of this calendar year.
PL-12000 Transportation and
Parking
Improvements
Streets
and
Sidewalks
$3,435,255 $2,563,397 $293,888 $0 $828,510 $1,440,999 58%Ongoing N/A Ongoing project
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
2/18/2015
Page 5 of 28
Attachment D
GENERAL FUND
PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
PL-14001 Matadero Creek
Trail
Streets
and
Sidewalks
$425,814 $425,814 $12,054 $0 $357,392 $56,368 87%Design FY 2018 It is anticiapted that design for this project
will continue through FY 2016 and the
project will be completed in FY 2018.
2/18/2015
Page 6 of 28
Attachment D
Budget FY 2015 FY 2015 Percent Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Encumbered Status Date Comments
PD-14000 Internal Alarm
System
Replacement
Buildings and
Facilities
$78,000 $78,000 $0 $0 $0 $78,000 0%Pre-design Dec-2015 It is anticipated that funding
will be reappropriated to FY
2016 as part of the 2016
Proposed Capital Budget.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
GENERAL FUND
POLICE DEPARTMENT
MINOR PROJECTS
2/18/2015
Page 7 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
PE-08004 Lytton Plaza Renovation Parks
and
Open Space
$777,668 $1,500 $0 $0 $0 $1,500 100%Complete 2010 This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-11011 Highway 101
Pedestrian/Bicycle
Overcrossing
Streets
and
Sidewalks
$2,205,232 $1,437,927 $115,010 $0 $138,182 $1,184,735 46%Design Dec-18 Design competition completed, currently reviewing options with boards and
commissions
PE-12002 Tree Wells - University
Avenue Irrigation
Miscellaneous $194,845 $4,299 $350 $0 $0 $3,949 100%Complete 2013 This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-12003 Rinconada Park Long Range
Plan & Design
Parks
and
Open Space
$225,893 $13,228 $5,706 $0 $121,565 ($114,043)150%Environmental
Review
15-Dec Completion pending environmental review
PE-12009 Alma Guardrail Miscellaneous $40,871 $232 $0 $0 $0 $232 100%Complete This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-12013 Magical Bridge Playground Parks
and
Open Space
$3,454,665 $3,163,074 $1,967,097 $0 $1,151,980 $43,997 99%Construction Spring 2015 Construction started June 2014 and is anticipated to be completed in FY 2015
PE-12017 City Hall First Floor
Renovations
Buildings
and
Facilities
$4,087,633 $3,618,484 $1,153,722 $0 $2,315,872 $148,890 96%Construction Jun-15 Renovated 1st floor HR space; moved utilities cust service to 1st floor; began
2nd floor renovation;
PE-13003 Parks Master Plan Parks
and
Open Space
$566,947 $417,035 $168,612 $0 $231,770 $16,653 97%Design Winter 2015 Completed community outreach and site analysis; starting prioritization phase
PE-13008 Bowden Park Improvements Parks
and
Open Space
$357,595 $320,634 $27,719 $0 $16,120 $276,795 23%Design Winter 2015 Design approved by ARB; Construction plans being drafted
PE-13010 Greer Park Renovations Parks
and
Open Space
$318,562 $258,077 $1,559 $0 $46,500 $210,018 34%Construction Summer
2015
Completed design of skate park and pathways
PE-13012 Structural Assessment of City
Bridges
Streets
and
Sidewalks
$185,394 $185,394 $285 $0 $150,000 $35,109 81%Study Oct-15 Anticipate award of consultant contract by City Council in March/April 2015,
with work expected to take 5-6 months to complete. It is anticipated that request
to reappropriate some portion of remaining funding to FY 2016 will be included
in the Proposed Capital Budget.
PE-13014 Streetlight Condition
Assessment
Streets
and
Sidewalks
$220,078 $220,078 $662 $0 $0 $219,416 0%Study Dec-15 Sending out RFP in spring 2015
PE-13016 El Camino Park Expanded
Parking Lot and New
Restroom
Parks
and
Open Space
$1,002,860 $959,999 $52,543 $0 $5,025,621 ($4,118,165)511%Construction Dec-15 Construction contract awarded in December 2014; construction to start in
February 2015. BAO to be posted.
PE-13020 Byxbee Park Trails Parks
and
Open Space
$360,607 $334,608 $56,061 $0 $8,410 $270,137 25%Design Jun-16 The interim park plan (design) is near 100% complete and will go to the PRC in
March. Trails are being constructed as landfill capping occurs; other amenities
such as benches, signage and vegetative islands to be added/constructed in FY
2016.
PE-14010 LATP Site Development
Preparation & Security
Improvements
Parks
and
Open Space
$1,668,782 $1,659,018 $1,322 $0 $170,991 $1,486,705 11%Close Permitting agencies would not accept applications without proposed use of
property. A recommendation to restore remaining funding to the Infrastructure
Reserve is included as part of this report.
PE-14015 Lucie Stern
Mechanical/Electrical
Upgrades
Buildings
and
Facilities
$2,808,133 $2,588,447 $72,331 $0 $54,725 $2,461,391 12%Design Dec-15 Submitted for building permit
PE-15020 Civic Center Waterproffing
Study
Buildings
and
Facilities
$258,492 $258,492 $0 $0 $0 $258,492 0%Pre-design Dec-15 RFP to be issued in second half of FY 2015.
PE-15022 Palo Alto Community Gardens
Irrigation System
Parks
and
Open Space
$256,504 $256,504 $5,203 $0 $0 $251,301 2%Design Dec-15 Community outreach and construction plan being drafted
GENERAL FUND
PUBLIC WORKS DEPARTMENT
MINOR PROJECTS
2/18/2015
Page 8 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PE-15028 Baylands Levee Improvements
Feasibility Study
Parks
and
Open Space
$500,000 $500,000 $58,500 $0 $441,500 $0 100%Pre-design Dec-15 Project being conducted in partnership with San Francisquito Creek Joint Powers
Authority (JPA); funds will need to be reappropriated into FY2016.
PF-04000 Security System Improvements Buildings
and
Facilities
$275,000 $59,768 $0 $0 $0 $59,768 78%Construction Jun-15 Work should be complete as of end of fiscal year.
PF-06004 Cubberley Restroom
Renovation
Buildings
and
Facilities
$41,678 $50 $0 $0 $0 $50 100%Close Jun-15 Project funding reduced in FY 2014. Remaining funding is recommended to be
restored to Infrastructure Reserve as part of this report.
PF-07011 Roth Building Maintenance Buildings
and
Facilities
$224,395 $58,576 $0 $0 $9,108 $49,468 78%Ongoing Jun-20 Patch of roofing completed.
PF-11001 Council Chambers Carpet
Replacement
Buildings
and
Facilities
$80,000 $80,000 $80,000 $0 $0 $0 100%Complete Aug-14 Project completed.
PF-12001 Parks and PWD Trees Work
Space Improvements
Parks
and
Open Space
$420,773 $41,853 $249 $0 $0 $41,604 100%Complete Dec-15 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PF-12004 Citywide Backflow Preventer
Installations
Miscellaneous $100,643 $5,000 $0 $0 $0 $5,000 100%Complete Dec-15 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PF-14002 Fire Station 1 Improvements Buildings
and
Facilities
$280,377 $279,557 $151 $0 $1 $279,405 0%Pre-construction Jun-15 It is anticipated that work will be complete by the end of FY 2015.
PF-15000 Rinconada Pool Locker Room Buildings
and
Facilities
$423,218 $423,218 $0 $0 $0 $423,218 0%Pre-construction Jun-16 Meetings have been held and it was determined to schedule construction for
January 2016 since committee wanted to look at all of Rinconada and not just
pool area. As a result, it is anticipated that the 2016 Proposed Capital Budget
will include a recommendation to carry forward remaining funding to FY 2015.
PF-15005 Emergency Facility
Improvements
Buildings
and
Facilities
$250,000 $250,000 $48,058 $0 $0 $201,942 19%Construction N/A
PO-12000 Wilkie Way Bridge Deck
Replacement
Streets
and
Sidewalks
$51,509 $13,566 $0 $0 $0 $13,566 100%Complete 2013 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PO-12001 Curb and Gutter Repairs Streets
and
Sidewalks
$1,108,119 $451,838 $2,962 $0 $418,213 $30,663 N/A Construction N/A Award construction contract in January 2015; construction starts in March with
sidewalk project PO 89003
PO-12002 LATP Site Development
Preparation & Security
Miscellaneous $80,303 $2,853 $0 $0 $0 $2,853 100%Complete 2012 Project to be closed.
PO-12003 Foothills Fire Management Streets
and
Sidewalks
$200,000 $66,393 $0 $0 $41,498 $24,895 88%Construction Aug-15 All funds should be encumbered by fiscal year end for work scheduled during
summer months.
PE-06007 Park Restroom Installation Parks
and
Open Space
$531,666 $65,572 $0 $0 $0 $65,572 100%Defunded 2015 Future restroom installation plans are awaiting completion of Parks Master Plan.
As a result, this project will be closed and remaining funds are recommended to
be restored to the Infrastructure Reserve as part of this report.
PE-08001 Rinconada Park Improvements Parks
and
Open Space
$1,356,313 $1,353,722 $1,089 $0 $0 $1,352,633 0%Design TBD Design for improvements will be begin upon approval of the Rinconada Park
Long Range Plan.
PE-09003 City Facility Parking Lot
Maintenance
Buildings
and
Facilities
$942,386 $899,306 $3,030 $0 $367,206 $529,070 N/A Construction N/A Recurring Project
PE-09005 Downtown Library
Improvements
Buildings
and
Facilities
$4,530,212 $45,051 $0 $0 $43,716 $1,335 100%Project to be closed.
PE-09006 Mitchell Park Library &
Community Center
(New Construction)
Buildings
and
Facilities
$49,704,775 $8,941,106 $1,151,848 $0 $1,956,787 $5,832,471 88%Complete Dec-14 Construction complete; project closeout and warranty period continuing
PE-09010 Library & Community Center
Temporary Facilities
Buildings
and
Facilities
$793,181 $135,261 $4,540 $0 $3,540 $127,181 84%Construction Aug-15 Temp facility closed; clearing out library equipment, to be followed by
restoration of kitchen.
MULTI-YEAR PROJECTS
2/18/2015
Page 9 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PE-10002 Ventura Community Center
and Park
Buildings
and
Facilities
$477,219 $34,209 $0 $0 $0 $34,209 100%Complete 2014 Project to be closed.
PE-11000 Main Library New
Construction and
Improvements
Buildings
and
Facilities
$23,362,045 $11,071,641 $8,591,707 $0 $2,499,080 ($19,146)100%Complete Nov-14 Construction complete; project closeout and warranty period continuing
PE-11012 Temporary Main Library Buildings
and
Facilities
$665,218 $109,169 $0 $0 $4,888 $104,281 84%Construction Apr-15 Temp facility closed; clearing out library equipment;
PE-12011 Newell Road Bridge / San
Francisquito Creek Bridge
Replacement
Streets
and
Sidewalks
$3,348,787 $2,856,081 $27,642 $0 $279,475 $2,548,964 24%Design Oct-17 Caltrans just approved additional grant funding for Environmental Impact Report
(EIR); staff will be returning to Council in March 2015 for BAO to fund EIR;
programmed construction funds of $2.5 million can be returned to IR; remaining
design funds are anticipated to be reappropriated to FY 2016 as part of FY 2016
Proposed Capital Budget.
PE-12012 Eleanor Pardee Park
Improvements
Parks
and
Open Space
$755,439 $70,818 $308 $0 $53,681 $16,829 98%Complete Project to be closed.
PE-13005 City Hall/King Plaza
Landscape
Parks
and
Open Space
$190,150 $115,857 $13,462 $0 $19,213 $83,182 56%Design Winter 2015 IFB to go out March 2015
PE-13007 El Camino Park Dog Park Parks
and
Open Space
$3,178 $104 $347 $0 $0 ($243)108%Project to be closed.
PE-13011 Charleston/Arastradero
Corridor Project
Streets
and
Sidewalks
$1,525,651 $1,386,116 $264,107 $0 $495,935 $626,074 59%Preliminary
design/environmental
assessment
Jun-16 Held 3 community meetings to develop conceptual plan line; PTC & Council
approval of plan line in spring 2015; start environmental assessment
PE-13017 El Camino Median Landscape
Improvements
Streets
and
Sidewalks
$296,729 $296,729 $2,620 $0 $0 $294,109 1%Design Winter 2015 Preparing Request for Proposals
PE-14018 Baylands Interpretive Center
Boardwalk Repair
Buildings
and
Facilities
$98,738 $70,000 $1,063 $0 $0 $68,937 30%Predesign Summer
2015
Boardwalk Feasibility Study to begin in second half of FY 2015. A request for
proposals was issued in February 2015 and anticipate study to be complete by
June 2015.
PE-15029 Baylands Interpretive Center
Improvements
Parks
and
Open Space
$136,298 $136,298 $0 $0 $0 $136,298 0%Design Early 2016 A request for proposals was issued in January with anticipation of design
complete by December 2015; permitting for work may begin in early 2016.
PE-98020 Police Building Project Buildings
and
Facilities
$4,254,781 $33,467 $3,604 $0 $0 $29,863 99%New Public Safety Building project to be created in second half of FY 2015 with
funding from Council Infrastructure Plan. Funding for this project will be
recommended to be eliminated at that time.
PF-01002 Civic Center Infrastructure
Improvements
Buildings
and
Facilities
$16,077,749 $78,895 $42,329 $0 $0 $36,566 100%Pre-construction Jun-16 Pre-construction complete and construction to be completed next fiscal year.
PF-05003 Foothills Park Interpretive
Center Improvements
Buildings
and
Facilities
$369,004 $67,491 $2,768 $0 $5,851 $58,872 84%Construction Jun-15 Work should be complete as of end of fiscal year.
PF-07000 Art Center Electrical &
Mechanical Upgrades
Buildings
and
Facilities
$7,780,362 $11,508 $1,470 $0 $8,508 $1,530 100%Complete Dec-14 Project Complete. Remaining funding recommended to be restored to
Infrastructure Reserve as part of this report.
PF-14000 Cubberley Roof Replacements Buildings
and
Facilities
$455,420 $453,931 $298,696 $0 $42,824 $112,411 75%Ongoing Jun-20 Roofs on Building S and L complete.
PF-14003 University Avenue Parking
District Parking Improvements
Buildings
and
Facilities
$400,700 $349,583 $0 $0 $38,720 $310,863 22%Ongoing Jun-15 Paved Lots G, A & P as part of construction contract for street resurfacing
August 2014
PF-14004 California Avenue Parking
District Parking Improvements
Buildings
and
Facilities
$186,400 $186,400 $0 $0 $0 $186,400 0%Ongoing Jun-15 Waiting to pave Lot 7 once Cal Ave Streetscape project complete
PO-11000 Sign Reflectivity Upgrade Streets
and
Sidewalks
$288,362 $149,953 $17,475 $0 $7,525 $124,953 N/A Ongoing N/A Project is ongoing, but survey of signs has been completed for 2014.
2/18/2015
Page 10 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PO-11001 Thermoplastic Lane Marking
& Striping
Streets
and
Sidewalks
$404,361 $139,818 $0 $0 $83,266 $56,552 N/A Ongoing N/A List of streets needing thermoplastic completed for FY14.
2/18/2015
Page 11 of 28
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
EL-04010 Foothills System Rebuild Minor $931,517 $82,129 $0 $0 $82,129 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-09004 W. Charleston/Wilkie Way
to South City Limit 4/12 kV
Conversion
Minor $562,466 $85,483 $701 $0 $84,782 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-10008 Advanced Metering
Infrastructure System
Minor $183,885 $56,188 $7,887 $5,000 $43,301 76% Complete Project Complete.
EL-11001 Torreya Court Rebuild Minor $103,301 $7,195 $0 $0 $7,195 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11004 Hewlett Subdivision Rebuild
Los Trancos
Minor $697,050 $60,634 $0 $0 $60,634 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11006 Rebuild UG District 18 Minor $629,298 $517,955 $0 $475,000 $42,955 93% Bid Jun-15 Bid received and reviewed; Staff report
requesting approval to award contract
scheduled for March 2015 Council
meeting.
EL-12002 Hanover 22 - Transformer
Replacement
Minor $1,200,450 $6,679 $0 $0 $6,679 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-14004 Maybell 1 and 2 4/12 kV
Conversion
Minor $450,000 $444,127 $37,473 $0 $406,654 10% Construction Jun-15 Construction is in progress with CPAU
personnel.
EL-15000 Colorado/Hopkins System
Improvement
Minor $50,000 $50,000 $0 $0 $50,000 0% Pre-Design Nov-15 Load study completed and alternatives
being reviewed.
EL-15001 Electric Substation Battery
Replacement
Minor $400,000 $400,000 $0 $180,000 $220,000 45% Bid Jun-16 IFB for materials is with Purchasing.
Installation will be done by CPAU
personnel.
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
2/18/2015
Page 12 of 28
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
MULTI-YEAR PROJECTS
EL-02010 SCADA System Upgrades Multi-Year $912,565 $186,716 $63,807 $10,965 $111,944 88% Construction Jun-15 Upgrades completed; commissioning
and staff training on changes scheduled.
EL-04012 Utility Site Security
Improvements
Multi-Year $1,375,373 $305,274 $27,286 $12,661 $265,327 81% Design Jun-15 Design of Phase IV completed; IFB
being prepared.
EL-05000 El Camino Underground
Rebuild
Multi-Year $2,000,994 $282,513 $57,378 $0 $225,135 89% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11008 Rebuild UG District 19 Multi-Year $161,286 $101,473 $2,602 $0 $98,871 39% Design Nov-15 Design completed, preparing IFB
documents for project and ordering long
lead-time equipment.
EL-06001 230 KV Electric Intertie Multi-Year $656,154 $126,515 $40,679 $56,233 $29,603 95% Pre-Design TBD Awaiting agreement for project from
SLAC and Stanford.
EL-06002 Underground District 45 Multi-Year $3,622,018 $134,271 $0 $0 $134,271 96% Construction Apr-15 CPAU work completed; awaiting
completion of AT&T work and
payment of AT&T joint poles invoices
(submitted to CPAU when AT&T
removes poles) to close project.
EL-08000 E. Charleston 4/12kV
Conversion
Multi-Year $768,125 $413,586 $300,006 $51,716 $61,864 92% Construction Mar-15 Physical construction completed;
awaiting final invoices before closing
project. A reduction to this project is
recommended as part of this report,
with funding being returned to the
Electric Fund reserves.
EL-09000 Middlefield Underground
Rebuild
Multi-Year $1,099,489 $407,927 $0 $0 $407,927 63% Bid Jun-15 Bid received and reviewed; Staff report
requesting approval to award contract
scheduled for March 2015 Council
meeting.
EL-09003 Rebuild UG District 17
(Downtown)
Multi-Year $851,693 $82,586 $0 $0 $82,586 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
MULTI-YEAR PROJECTS
2/18/2015
Page 13 of 28
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
EL-10006 Rebuild UG District 24 Multi-Year $2,200,481 $1,612,899 $198,611 $26,374 $1,387,914 37% Design Nov-15 Design completed, preparing IFB
documents for project and ordering long
lead-time equipment.
EL-13006 Sand Hill/Quarry 12kV Tie Multi-Year $250,011 $237,500 $3,015 $0 $234,485 6% Design Dec-15 Waiting for guidance from Attorneys
office on easement request, for
electrical equipment, that was
submitted to Stanford.
EL-13007 Underground Distribution
System Security
Multi-Year $300,000 $299,172 $7,853 $0 $291,319 3% Design Jun-16 Evaluating options for securing utility
vaults and boxes; samples have been
received for evaluation by Engineering
and Operations.
EL-13008 Upgrade Electric Estimating
System
Multi-Year $150,000 $148,650 $0 $0 $148,650 1% Design TBD Bids for development of construction
standards exceeded anticipated cost.
Alternatives for creation of standards
and Bills of Material are being
evaluated.
EL-14005 Reconfigure Quarry Feeders Multi-Year $450,000 $449,951 $5,429 $0 $444,522 1% Design TBD Waiting for completion of Substation
Relay replacement to start construction.
EL-10009 Street Light System
Conversion Project
Multi-Year $2,279,558 $548,876 $218,990 $237,378 $92,508 96% Construction Dec-14 Contractor has completed construction
of Phase III; awaiting receipt and
payment of final invoice before closing
project.
EL-11003 Rebuild UG District 15 Multi-Year $481,079 $456,427 $1,453 $0 $454,974 5% Pre-Design Jun-16 Design work on hold due to other
projects. This will be coordinated with
other projects planned along
Arastradero Road.
EL-11007 Rebuild Greenhouse Condo
Area
Multi-Year $508,843 $333,591 $266,898 $23,522 $43,171 92% Construction Mar-15 Physical construction completed;
awaiting final invoices before closing
project.
EL-11010 UG District 47 - Middlefield,
Homer Avenue, Webster
Street and Addison Avenue
Multi-Year $2,255,574 $2,093,808 $54,050 $1,402,500 $637,258 72% Bid Jun-16 Bids for substructure installation
received and reviewed; Staff report
requesting approval to award contract
scheduled for February 2015 Council
meeting.
MULTI-YEAR PROJECTS
2/18/2015
Page 14 of 28
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
EL-11014 Smart Grid Technology
Installation
Multi-Year $1,102,846 $743,286 $45,324 $94,906 $603,056 N/A Ongoing Jan-17 This project is to implement pilot
projects as necessary to validate smart
grid technology and cost.
Two pilot projects constructed and
being evaluated; others in development.
EL-11015 Reconductor 60kV Overhead
Transmission System with
ACCR conductor
Multi-Year $3,002,412 $67,089 $0 $0 $67,089 100% Complete Remaining funds are recommended to
be restored to Electric Fund reserves as
part of this report.
EL-12000 Rebuild UG District 12 Multi-Year $530,781 $433,379 $414,059 $28,146 ($8,826) 102% Construction Mar-15 Physical construction of this project has
been completed, and the project will be
closed once final invoices have been
received. The project reflects as being
over budget, however this is due to the
fact that some invoices were incorrectly
charged to this project and need to be
charged against other projects. This
project is currently being reconciled,
and once all adjustments are made it is
anticipated that the project will be
below budget.
EL-12001 UG District 46 -
Charleston/El Camino Real
Multi-Year $553,954 $488,347 $2,263 $0 $486,084 12% Design Nov-16 Design work in process.
$11,664,226 $1,755,764 $2,604,401
2/18/2015
Page 15 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
GS-08000 Gas Station 2 Rebuild Minor $207,007 $10,023 $0 $0 $10,023 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-09000 Gas Station 1 Rebuild Minor $201,000 $6,631 $0 $0 $6,631 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-10000 Gas Station 3 Rebuild Minor $207,007 $8,489 $30,125 $0 ($21,636)110%Completed Project completed, and currently
reflected as over budget. A
recommendation to increase the
funding for this project is included as
part of this report, as an encumbrance
that was required for the project was
inadvertently disencumbered in FY
2014.
GS-11001 Gas Station 4 Rebuild Minor $337,000 $16,897 $0 $0 $16,897 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-14004 Gas Distribution System
Model
Minor $150,000 $148,608 $0 $60,918 $87,690 42%Pre-Construction Jan 17 Contract signing stage. A computer
model for natural gas distribution
system analyses will be created and
maintenance of the model will be
provided till 1/1/2017. It is
anticipated that funds will need to be
carried forward to FY 17.
GS-15001 Security at City Gas
Receiving Stations
Minor $150,000 $150,000 $0 $0 $150,000 0%Pre-design TBD It is anticipated that the 2016
Proposed Capital Budget will include
a recommendation to carry funds
forward into FY 2016.
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
GAS FUND
2/18/2015
Page 16 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ENTERPRISE FUND
UTILITIES DEPARTMENT
GAS FUND
GS-01019 Global Positioning System Multi-Year $381,062 $80,306 $3,637 $2,810 $73,859 81%Ongoing Jun 16 Integrating field data into mapping
system, defining additional
equipment needs.
GS-08011 GMR - Project 18 Multi-Year $5,900,883 $10,531 $0 $0 $10,531 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-09002 GMR - Project 19 Multi-Year $5,787,828 $2,348,249 $1,048,708 $1,441,383 ($141,842)102%95%Feb 15 Projects 19B/20/21 are combined. It
is anticipated that the budget overage
will be resolved upon completion of
the project by disencumbering unused
contingency funding.
GS-10001 GMR - Project 20 Multi-Year $6,616,749 $4,755,580 $1,570,223 $3,157,251 $28,106 100%95%Feb 15 Projects 19B/20/21 are combined.
GS-11000 GMR - Project 21 Multi-Year $6,667,478 $2,314,846 $450,003 $1,769,516 $95,327 99%95%Feb 15 Projects 19B/20/21 are combined.
GS-11002 Gas System Improvements Multi-Year $945,149 $485,370 $184,117 $179,150 $122,103 N/A Ongoing Jun 16 This project addresses ongoing
capital system improvements. A
current project for Risk Assessment
Study of PVC/PE gas pipes will be
completed by Dec 15.
GS-12001 Gas Main Replacement -
Project 22
Multi-Year $602,669 $602,575 $3,579 $43,854 $555,142 8%Design Jun 16 It is anticipated that the 2016
Proposed Capital Budget will include
a recommendation to carry funds
forward into FY 2016.
GS-13002 Gas Equipment and Tools Multi-Year $150,000 $148,062 $12,857 $0 $135,205 N/A Ongoing Jun 16 This project is for replacement of
equipment and tools for Operations.
MULTI-YEAR PROJECTS
2/18/2015
Page 17 of 28
Attachment D
ENTERPRISE FUND
REFUSE FUND
PUBLIC WORKS DEPARTMENT
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Percent Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Complete Status Date Comments
RF-10002 Flare Relocation Project Minor $867,734 $42,350 $0 $318 $42,032 95%Completed Completed Project completed and closed in Feb 14.
RF-07001 Relocation of Landfill Facilities Multi-Year $825,968 $18,698 $0 $0 $18,698 98%Completed Completed This project was completed in October 2013 and will be
closed.
RF-11001 Landfill Closure Multi-Year $4,718,404 $2,978,662 $1,593,954 $1,034,181 $350,527 93%Construction Dec 15 Construction of the new cap - an evapotranspirative soil cap -
began in January 2014. Approximately 57% of the site has
been capped and the remainder to be capped by December
2015. It is anticipated that unencumbered and unspent funds
for this project will be reappropriated to FY 2016 as part of
the 2016 Proposed Capital Budget. An additional
appropriation of $1,200,000 will be needed in FY16 to
complete the project by December 2015, and it is
anticipated that a request for this funding will be included in
the 2016 Proposed Capital Budget. Revenue received from
the imported cap soils is estimated at $750,000 during FY15
and $250,000 in FY2016.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
2/18/2015
Page 18 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
SD-06101 Storm Drain System Replacement
and Rehabilitation
Minor $319,320 $319,320 $30,451 $0 $288,869 10%Ongoing Ongoing It is anticipated that funds for this
ongoing project will be reappropriated
to FY 2016 as part of the Proposed
Capital Budget.
SD-06102 San Francisquito Creek Storm
Water Pump Station
Multi-Year $6,387,642 $35,158 $0 $0 $35,158 99%Complete Complete This project is complete and can be
closed.
SD-06104 Connect Clara Drive Storm Drains
to Matadero Pump Station
Multi-Year $953,480 $70,507 $35,030 $0 $35,477 96%Complete Complete This project is complete and can be
closed.
SD-10101 Southgate Neighborhood Storm
Drain Improvements
Multi-Year $2,176,878 $1,743,145 $1,306,441 $370,484 $66,220 97%Construction Sep-15 It is anticipated that a request to
reappropriate remaining funds to FY
2016 will be included in the 2016
Proposed Capital Budget in order to
cover landscape maintenance
expenses.
SD-11101 Channing Avenue/Lincoln
Avenue Storm Drain
Improvements
Multi-Year $7,442,779 $3,316,971 $177,287 $94,998 $3,044,686 59%Design Mar-16 Final project construction is
anticipated to begin in Summer 2015.
It is anticipated that a request to
reappropriate remaining funds to FY
2016 will be included in the 2016
Proposed Capital Budget to cover the
construction cost of the last project
phase.
SD-13002 Matadero Creek Storm Water
Pump Station & Trunk Lines
Improvements
Multi-Year $2,252,633 $2,252,333 $4,200 $1 $2,248,132 0%Design Oct-17 RFP for consultant services to be
issued in February 2015. It is
anticipated that the 2016 Proposed
Capital Budget will include a request
to reappropriate remaining funds to
FY 2016 to cover project design costs.
MINOR PROJECTS
STORM DRAINAGE FUND
ENTERPRISE FUND
PUBLIC WORKS DEPARTMENT
MULTI-YEAR PROJECTS
2/18/2015
Page 19 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WC-11000 Wastewater Collection
Rehabilitation/Augmentation
Project 24
Multi-Year $3,119,809 $2,512,435 $63,576 $2,282,801 $166,058 95%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-12001 Wastewater Collection
Rehabilitation/Augmentation
Project 25
Multi-Year $3,212,000 $2,854,977 $71,352 $2,296,851 $486,774 85%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-13001 Wastewater Collection
Rehabilitation/Augmentation
Project 26
Multi-Year $3,310,000 $3,272,550 $27,811 $3,040,000 $204,739 94%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-13002 Wastewater Fusion and
General Equipment/Tools
Multi-Year $102,187 $78,132 $0 $0 $78,132 24%Ongoing N/A This project addresses ongoing
needs for equipment/tools by
WGW Operations to perform their
work.
WC-14001 Wastewater Collection
Rehabilitation/Augmentation
Project 27
Multi-Year $320,000 $320,000 $0 $40,950 $279,050 13%Design Jun 16 Project currently in design phase
and anticipated to be complete
during FY 2016. It is anticipated
that the 2016 Proposed Capital
Budget will include a
recommendation to reappropriate
funds into FY 2016.
WC-15002 Wastewater System
Improvements
Multi-Year $641,403 $506,701 $45,729 $80,823 $380,149 41%Ongoing N/A
This project addresses ongoing
capital system improvements.
MULTI-YEAR PROJECTS
ENTERPRISE FUND
UTILITIES DEPARTMENT
WASTEWATER COLLECTION FUND
2/18/2015
Page 20 of 28
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Percent Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Complete Status Date Comments
WQ-10001 Plant Master Plan Minor $1,594,697 $146,435 $45,521 $34,472 $66,442 96%Construction Jun 19 Long Range facilities Plan Report 100%
completed Oct 12; BAO for Biosolids Plan
completed in Jan 13 for $421,678.
Biosolids Facility Plan completed Oct 14.
Biosolids Facility Plan 100% complete.
WQ-04011 Facility Condition Assessment
and Retrofit
Multi-Year $4,426,192 $1,505,901 $31,152 $0 $1,474,749 67%Design Jun 19 Ongoing retrofit projects. Facility Repair
and Retrofit Project #2 construction
completed. Facility Repair and Retrofit
Project #3 contract awarded to Anderson
Pacific Engineering.
WQ-14001 Biosolids Facility Multi-Year $575,104 $575,104 $0 $216,534 $358,570 38%pursuing state
loan
Dec-19
WQ-14003 Primary Sedimentation Tank
Rehabilitation
Multi-Year $80,532 $80,532 $0 $0 $80,532 0%pursuing state
loan
Jun-19
WQ-14004 Fixed Film Reactor
Rehabilitation
Multi-Year $127,398 $127,398 $0 $0 $127,398 0%pursuing state
loan
Jun-18
MINOR PROJECTS
ENTERPRISE FUND
PUBLIC WORKS DEPARTMENT
WASTEWATER TREATMENT FUND
MULTI-YEAR PROJECTS
2/18/2015
Page 21 of 28
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WS-09000 Seismic Water Tank Valve Minor $6,673,000 $6,514,420 $40,620 $2,327,155 $4,146,645 38%Pre-
construction
Oct 17 Council Award in Spring 2015.
Anticipated completion date is
Spring 2019.
WS-13003 GPS Equipment Upgrade Minor $200,000 $200,000 $0 $0 $200,000 0%Pre-design Jun 15 The Department is evaluating the
latest GPS technology to determine
the need to upgrade the existing
equipment.
WS-13004 Asset Management Mobile
Deployment
Minor $100,000 $98,471 $3,229 $0 $95,242 5%Pre-design Jun 15 The Department is assessing the
options for mobile device
deployment.
WS-13006 Water Meter Shop
Renovations
Minor $315,000 $56,893 $10,001 $0 $46,892 85%Complete This project is complete. The
Utilities Department is in the
process of closing out this project.
WS-15004 Water System Master Plan Minor $500,000 $500,000 $0 $268,400 $231,600 54%Construction Dec 15 Foothills transmission main
assessment was completed. G&E is
currently assessing capital
improvement needs for remaining
transmission and distribution water
system. It is anticipated that funds
will need to be carried forward to
FY 16.
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
2/18/2015
Page 22 of 28
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
WS-07000 Water Regulation Station
Improvements
Multi-Year $544,001 $370,823 $15,406 $354,503 $914 100%Pre-
construction
Oct 17 URS completed the design of the
seismic retrofit project for 4 steel
tanks and 3 turnouts with combined
budget from WS-07000, WS-08001,
and WS-09000. IFB for the retrofit
work is being prepared and
construction will start in Apr/May
15. It is anticipated that funds will
need to be carried forward to FY 16.
WS-07001 Water Recycling Facilities Multi-Year $901,126 $388,421 $37,469 $157,380 $193,572 79%On-going Jun 16 Resource Management is preparing
Environmental Impact Report
(EIR). Assessment and
sustainability recommendation to be
completed in 2016. It is anticipated
that funds will need to be carried
forward to FY 16.
WS-08001 Water Reservoir Coating
Improvements
Multi-Year $3,226,491 $2,927,560 $15,406 $354,503 $2,557,651 21%Pre-
construction
Oct 17 URS completed the design of the
seismic retrofit project for 4 steel
tanks and 3 turnouts with combined
budget from WS-07000, WS-08001,
and WS-09000. IFB for the retrofit
work is being prepared and
construction will start in Apr/May
15. Anticipated completion Spring
2019.
WS-08002 Emergency Water Supply
Project
Multi-Year $36,463,630 $1,210,490 $296,577 $570,929 $342,984 99%Pre-
construction
Sep 15 Well Rehabilitation Phase 3 (site
and facilities restoration). It is
anticipated that funds will need to
be carried forward to FY 16.
WS-09001 Water Main Replacement -
Project 23
Multi-Year $3,136,843 $112,021 $0 $0 $112,021 100%Complete Project complete. Remaining
funding is recommended to be
restored to Water Fund reserves as
part of this report.
MULTI-YEAR PROJECTS
2/18/2015
Page 23 of 28
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
WS-10001 Water Main Replacement -
Project 24
Multi-Year $3,259,205 $208,305 $0 $0 $208,305 100%Complete Project complete. Remaining
funding is recommended to be
restored to Water Fund reserves as
part of this report.
WS-11000 Water Main Replacement -
Project 25
Multi-Year $5,252,600 $5,238,360 $51,181 $4,105,435 $1,081,744 79%Pre-
construction
Oct 15 Tentative Council Approval date is
2/23/15. It is anticipated that funds
will need to be carried forward to
FY 16.
WS-11003 Water Distribution System
Improvements
Multi-Year $1,270,745 $916,693 $671,418 $40,556 $204,719 N/A Ongoing On-going This project addresses ongoing
capital distribution system
improvement needs.
WS-11004 Water System Supply
Improvements
Multi-Year $936,995 $382,622 $119,723 $75,643 $187,256 N/A Ongoing On-going This project addresses ongoing
capital supply system improvement
needs.
WS-12001 Water Main Replacement -
Project 26
Multi-Year $505,000 $461,065 $1,176 $0 $459,889 9%Design Jun 15 Design is on targeted schedule.
WS-13002 Water Fusion and General
Equipment/Tools
Multi-Year $100,000 $78,132 $6,068 $0 $72,064 N/A Ongoing On-going This project addresses the purchase
of PE fusion equipment for
Operations to perform their work of
maintaining and operating the water
system.
MULTI-YEAR PROJECTS
2/18/2015
Page 24 of 28
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
TECHNOLOGY FUND
Total
Budget FY 2015 Percent
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Encumbered/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Expended Status Date Comments
TE-01012 IT Disaster Recovery Plan Minor $578,626 $466,309 $101,082 $0 $189,367 $175,860 70%
TE-08004 Fire Mobile Data Computer Minor $250,000 $61,083 $34,040 $0 $1 $27,042 89%On-going
Final phase of the project is in progress to update Fire Mobile
Date Computers and add new Fire Mobile Data Computers to
the fire engines for patient and permit reporting purposes.
TE-09000 Public Safety Computer-Aided
Dispatch Replacement
Minor $1,400,000 $918,980 $131,388 $0 $0 $787,592 44%On-going Jun-16 It is anticipated that remaining funding will be reappropriated
to FY 2016 as part of the 2016 Proposed Capital Budget.
TE-11001 Library Computer System
Software
Minor $570,250 $441,313 $21,500 $0 $651 $419,162 26%Pre-design Project is currently in the planning phase and an RFP has been
started for a software solution.
TE-11002 Police Mobile In-Car Video
System Replacement
Minor $310,000 $34,070 $0 $0 $31,546 $2,524 99%On-going Dec-14 Project near completion, the remainder of funding will be
allocated toward body-worn camera outfitting. It is
anticipated that funding will be reappropriated to FY 2016 as
part of the 2016 Proposed Capital Budget.
TE-95016 Permit Information Tracking
System
Multi-Year $980,050 $176,648 $0 $0 $0 $176,648 82%
TE-07006 SAP Continuous Improvement
Project
Multi-Year $8,898,680 $30,266 $0 $0 $1,949 $28,317 100%
TE-99010 Acquisition of New Computers Multi-Year $437,350 $188,074 $0 $0 $0 $188,074 57%This project is recommended to be closed, as new computers
are no longer being purchased through this project. It is
anticipated that the project will be closed before the end of
FY 2015.
TE-00010 Telephone System Replacement Multi-Year $2,646,587 $605,245 $79,457 $0 $45,472 $480,316 82%Construction
TE-13001 Interactive Voice Response
System
Multi-Year $200,000 $200,000 $0 $0 $0 $200,000 0%
TE-13002 ESS/MSS Enhancements Multi-Year $150,000 $150,000 $0 $0 $0 $150,000 0%Project recommended to be closed as part of this report, with
remaining funding being returned to various funds that initially
supported this project.
TE-13003 SAP Refuse Billing Improvements Multi-Year $250,000 $250,000 $0 $0 $0 $250,000 0%
MULTI-YEAR PROJECTS $0
TE-13004 Infrastructure Management
System
Multi-Year $300,000 $251,192 $23,975 $17,450 $209,767 30%This CIP has been split into two phases, an analysis of
enterprise asset management systems (EAMS) to determine
requirements and solutions that will fit the City's needs, and
the implementation of the chosen solution.
TE-14002 Library Virtual Branch Multi-Year $195,000 $192,971 $0 $0 $13,100 $179,871 8%
TE-05000 Radio Infrastructure Replacement Multi-Year $2,665,980 $1,417,859 $78,394 $0 $43,314 $1,296,151 51%On-going Jun-18 It is anticipated that a recommendation to reappropriate
remaining funding to FY 2016 will be included as part of the
2016 Proposed Capital Budget.
TE-06001 Library Radio Frequency
Identification (RFID)
Implementation
Multi-Year $810,000 $489,448 $76,168 $0 $122,527 $290,753 64%
TE-10001 Utility Customer Billing System Multi-Year $850,000 $766,088 $0 $0 $4,500 $761,588 N/A On-going N/A Recurring Project
INTERNAL SERVICE FUND
INFORMATION TECHNOLOGY DEPARTMENT
MINOR PROJECTS
MULTI-YEAR PROJECTS $1
2/18/2015Page 25 of 28
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
TECHNOLOGY FUND
Total
Budget FY 2015 Percent
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Encumbered/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Expended Status Date Comments
INTERNAL SERVICE FUND
INFORMATION TECHNOLOGY DEPARTMENT
MINOR PROJECTSTE-12001 Development Center Blueprint Multi-Year $1,738,001 $1,278,574 $237,121 $0 $188,715 $852,738 51%On-going TBD Work is continuing on this project, and it is anticipated that a
recommendation to reappropriate remaining funding to FY
2016 will be included in the 2016 Proposed Capital Budget.
$23,230,524 $7,918,120 $783,125 0 $658,592 $6,476,403
2/18/2015Page 26 of 28
Attachment D
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Percent Project Completion Number Title Category Inception Budget Expenditures Adjustments*Encumbrances Balance Complete Status Date Comments
VR-01001 MSC Fuel Storage Tank /Svc Island
Replacement
Minor $2,623,368 $63,083 $1,165 $0 $62,267 ($349) 100% Ongoing Dec 14 Project to be closed.
VR-06801 Replace City-Wide Fuel Transaction
and Inventory Management System
Minor $310,831 $108,955 $9,203 $0 $13,765 $85,987 72% Ongoing June 16 Looking into Inventory Management
Systems. Remaining funds will need to
be reappropriated for projects in
FY16.
VR-07001 Automated Motor Pool Reservation and
Vehicle Key Management System
Minor $127,875 $10,979 $0 $0 $0 $10,979 100% Complete Dec 14 Project to be closed.
VR-11000 Vehicle Replacement Minor $1,585,767 $325,177 $0 $0 $0 $325,177 100% Complete Dec 14 Project to be closed.
VR-12001 In-Ground Vehicle Lift Minor $450,000 $83,525 $0 $0 $0 $83,525 100% Complete Dec 14 Project to be closed.
VR-13000 Vehicle Replacement Minor $4,424,664 $1,474,682 $56,915 $0 $1,406,990 $10,777 100% Ongoing Dec 15 Remaining funds will need to be
reappropriated for vehicle outfitting in
FY16.
VR-14000 Vehicle Replacement Minor $3,000,000 $1,782,462 $644,501 $0 $1,010,833 $127,128 96% Ongoing Dec 15 Remaining funds will need to be
reappropriated for vehicle outfitting in
FY16.
VR-14001 Emergency Repair and Minor $100,000 $26,462 $5,418 $0 $0 $21,044 100% Complete Dec 14 Project to be closed.
VR-14002 MSC Fuel Station Demo Minor $240,000 $216,344 $42,001 $0 $18,589 $155,754 35% Ongoing Dec15 Remaining funds will need to be
reappropriated for completing project.
VR-04010 Vehicle Maintenance Facility Upgrades Multi-Year $561,733 $262,860 $0 $0 $1 $262,859 100% Complete Dec 14 CIP has been TECO'D and is ready to
close.
VR-07002 Diesel Truck Engine Emissions
Retrofits
Multi-Year $846,488 $25,344 $0 $0 $0 $25,344 97% Ongoing Dec 17 Remaining funds will need to be
reappropriated for diesel particulate
filters to be added to appropriate
vehicles.
VR-92006 Fuel Tank Storage/Upgrade Multi-Year $260,378 $9,199 $0 $0 $0 $9,199 96% Ongoing Dec 15 Remaining funds will need to be
reappropriated for upgrade in FY16.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
INTERNAL SERVICE FUND
VEHICLE REPLACEMENT AND MAINTENANCE FUNDPUBLIC WORKS DEPARTMENT
2/18/2015
Page 27 of 28
Attachment D
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Percent Project Completion Number Title Category Inception Budget Expenditures Adjustments*Encumbrances Balance Complete Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
INTERNAL SERVICE FUND
VEHICLE REPLACEMENT AND MAINTENANCE FUNDPUBLIC WORKS DEPARTMENT
VR-15000 Scheduled Vehicle and Equipment
Replacements
Multi-Year $3,786,000 $3,786,000 $112,301 $0 $245,439 $3,428,260 9% Ongoing June 16 Remaining funds will need to be
reappropriated for purchase of
vehicles that remain on replacement
schedule for Fiscal Year 2015.
VR-15001 Emergency Repair and Replacement
Program
Multi-Year $100,000 $100,000 $9,792 $0 $0 $90,208 10% Ongoing June 20 Remaining funds at end of each fiscal
year can go back to Vehicle Reserve
Fund since new budget will be added
each year.
2/18/2015
Page 28 of 28
Attachment E
Page 1 of 2
YTD
Project Category Department/Fund Project Title FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Community Services - General Fund :
Land & Land Improvements AC-86017 Art in Public Places $77,956 $17,171 $59,526 80,497 40,015
Planning & Community Environment - General Fund :
Streets & Sidewalks PL-05030 Traffic Signal Upgrades 183,141 244,272 385,302 290,944 236,636
Public Works - General Fund :
Streets & Sidewalks PE-86070
Street Improvements (Street Improvement
Fund)4,710,791 3,170,679 7,097,782 5,072,597 2,467,328
Building & Facilities PF-00006 Roofing Replacement 104,617 319,495 246,068 119,682 3,599
Building & Facilities PF-01003 Building Systems Improvements 74,876 59,798 34,320 150,878 0
Building & Facilities PF-02022 Facility Interior Finishes 23,874 234,085 70,609 390,667 17,940
Building & Facilities PF-93009 ADA Compliance 9,994 167,537 10,019 16,024 834
Streets & Sidewalks PO-05054 Street lights Improvements 159,070 61,844 69,707 74,636 18,147
Streets & Sidewalks PO-89003 Sidewalk Improvements 1,611,917 1,673,715 1,864,954 2,160,793 1,336,097
Public Works - Storm Drainage Fund :
SD-06101 Storm Drain System Replacement 488,793 242,488 745,927 98,479 1,273
Public Works - Wastewater Treatment Fund :
WQ-80021 RWQCP Plant Equipment Replacement 66,916 589,965 1,840,887 2,449,616 1,431,677
WQ-80022 RWQCP System Flow Metering 28,468 0 0 9,770 0
Electric Fund :
EL-02011 Electric Utility GIS 321,713 175,382 127,798 65,294 32,894
EL-06005 Fiber Optics Ring System Improvements 0 0 0 0 0
EL-06006
Fiber Optics Customer Design and
Connection Services 0 0 0 0 0
EL-89028 Electric Customer Connections 1,882,242 2,522,815 2,802,451 2,922,100 703,382
EL-89031 Communications System Improvements 3,501 0 3,345 13,935 5,003
EL-89038 Substation Protection Improvements 129,086 200,418 188,049 158,683 93,032
EL-89044 Substation Facility Improvements 148,871 180,672 60,458 243,564 115,776
EL-98003
Electric Distribution System Reconstruction
and Improvements 1,608,521 2,389,593 1,453,123 1,319,059 1,240,197
Fiber Optics Fund :
FO-10000 Fiber Optic Customer Connections 88,061 125,913 291,425 360,428 138,793
FO-10001 Fiber Optic Network System Improvements 327,736 448,950 137,878 154,906 76,926
Five Years of Expenditures for Fiscal Years 2011-2015
Continuous Capital Projects
Attachment E
Page 2 of 2
YTD
Project Category Department/Fund Project Title FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Five Years of Expenditures for Fiscal Years 2011-2015
Continuous Capital Projects
Gas Fund :
GS-02013
GS-03007 Directional Boring Equipment 162 20,160 0 289,195 0
GS-03002
GS-04003
GS-05002 Gas Main Replacements 86,159 54,157 0 0 0
GS-03008
Polyethylene Fusion Equipment
Replacement 444 0 24,055 26,718 0
GS-03009 System Extensions-Unreimbursed 7,718 0 90,838 92,466 17,272
GS-06001 Gas Main Replacements, GMR-Project 16 127,056 0 0 0 0
GS-07002 Gas Main Replacements, GMR-Project 17 211,515 139,958 577 0 0
GS-80017 Gas System Extensions 471,001 605,635 932,035 904,684 400,747
GS-80019 Gas Meters and Regulators 294,191 325,988 25,652 2,178 0
Wastewater Collection Fund:
WC-02002
WC-03003
WC-04002
Sewer System Rehabilitation and
Augmentation, Project 15,16 and 17 122,870 57,715 0 0 0
WC-05003
WC-06003
WC-07004
Sewer System Rehabilitation and
Augmentation, Project 18,19 and 20 94,468 188,511 241,489 56,751 0
WC-08012
WC-09001
WC-10002
Sewer System Rehabilitation and
Augmentation, Project 21,22 and 23 1,928,374 1,023,537 2,139,395 2,236,935 155,983
WC-80020 Sewer System Extensions 224,066 270,793 445,570 279,411 85,519
WC-99013 Sewer Manhole Rehabilitation 378,841 357,343 555,382 516,840 224,260
Water Fund :
WS-02014 Water-Gas Wastewater Utilities GIS Data 289,694 222,244 282,573 195,881 98,683
WS-06002 Water Main Replacements, Project 20 10,821 0 0 0 0
WS-07003 Water Main Replacements, Project 21 1,432,826 528 0 0 0
WS-80013 Water System Extensions 258,968 551,131 528,788 528,260 254,477
WS-80014 Service and Hydrant Replacements 44,232 151,928 359,994 67,570 81,388
WS-80015 Water Meters 0 34,000 4,183 346,743 89,841
Attachment F
Public Safety Departments
Overtime Analysis for Fiscal Years 2013 through 2015
thru 12/31/14
2013 2014 2015
POLICE DEPARTMENT
Overtime Expense
Adopted Budget $967,900 $1,500,000 $1,500,000
Modified Budget 970,382 1,500,000 1,500,000
Net Overtime Cost - see below (82,848) 593,565 463,414
Variance to Budget $1,053,230 $906,435 $1,036,586
Overtime Net Cost
Actual Expense $1,542,754 $1,711,764 $999,694
Less Reimbursements
Stanford Communications 51,299 54,552 36,493
Utilities Communications Reimbursement 28,247 29,845 21,127
Local Agencies (A)16,255 8,905 5,452
Police Service Fees 83,785 73,934 54,808
Total Reimbursements 179,586 167,236 117,881
Less Department Vacancies 1,446,017 950,963 418,399
Net Overtime Cost ($82,848) $593,565 $463,414
Department Vacancies (number of days)5,543 4,251 1,754
Workers' Compensation Cases 10 14 11
Department Disabilities (number of days)641 776 418
FIRE DEPARTMENT
Overtime Expense
Original Budget $1,624,415 $1,424,414 $1,424,414
Modified Budget (B)1,624,415 1,750,956 1,424,414
Net Overtime Cost - see below 628,711 1,012,521 346,310
Variance to Budget $995,704 $738,435 $1,078,104
Overtime Net Cost
Actual Expense $1,812,170 $2,562,549 $1,361,295
Less Reimbursements
Stanford Fire Services (C)549,088 776,452 412,472
Cal-Fire/FEMA (Strike Teams) - 50,542 -
Total Reimbursements 549,088 826,994 412,472
Less Department Vacancies 634,371 723,034 602,513
Net Overtime Cost $628,711 $1,012,521 $346,310
Department Vacancies (number of days)2,340 2,618 1,821
Workers' Compensation Cases 9 18 9
Department Disabilities (number of days)216 489 141
NOTES:
(A)Includes Animal Services contract with Los Altos and Los Altos Hills.
(B)Does not include Strike Team Reimbursement of $184,296 recommended in this Report.
(C )Stanford reimburses 30.3% of Fire Service expenditures.
2/18/2015
City of Palo Alto (ID # 5542)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 3/3/2015
City of Palo Alto Page 1
Summary Title: Preliminary Financial Forecasts and Utilities Rate Changes
Title: Preliminary Financial Forecasts and Rate Changes for Electric, Gas,
Wastewater Collection, and Water Utilities
From: City Manager
Lead Department: Utilities
Recommendation
This item is for discussion and no action is requested. Staff will use input from the Finance
Committee on its preliminary rate projections for the Electric, Gas, Wastewater Collection, and
Water utilities to finalize the Financial Plans and inform its formal recommendations on rates
adjustments.
Executive Summary
The attached presentation describes staff’s preliminary forecasts for the Electric, Gas,
Wastewater Collection, and Water Utilities. A similar presentation was provided to the Utilities
Advisory Commission (UAC) at its February 4, 2015 meeting. It should be noted that staff has
updated the preliminary forecasts for the Water Utility since the UAC’s February 4, 2015
meeting, and these updated forecasts are included in the attached presentation. They include
changes to the water rate forecasts based on an updated wholesale rate forecast provided by
the SFPUC subsequent to the UAC meeting. SFPUC’s wholesale rate is now forecasted to
increase from $2.93/per hundred cubic feet (CCF) to $3.83/CCF (30.7%) instead of the
previously projected $3.42/CCF. This results in the need for the City to propose a 12% rate
increase for July 1, 2015 rather than the 7% preliminary rate change previously discussed with
the UAC.
Staff’s proposal also now assumes that drought restrictions will continue through 2015 and that
consumption will not return to pre-drought levels, which is consistent with what has happened
following previous droughts. These changes caused the projected rates to increase by 8% per
year for FY 2017 through FY 2019 rather than the 7% per year in the preliminary forecast. To
mitigate the customer bill impact of a larger water rate increase for FY 2016, staff also proposes
to defer the gas rate increase that was in the preliminary forecast.
City of Palo Alto Page 2
The retail rate increase trajectory for the preliminary financial forecasts over the next five fiscal
years is shown in the table below. The rate changes shown are approximate based on the
system average rate. Actual rate changes will be based on the cost of service methodologies
established by the cost of service studies for each utility and may differ slightly from these
projections.
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0% 5% 5% 3% 2%
Gas Utility* 0% 7% 4% 4% 4%
Wastewater 9% 9% 9% 9% 6%
Water Utility 12% 8% 8% 8% 3%
Bill Change** (%) 6% 7% 7% 6% 4%
($/mo) $10.79 $14.10 $13.83 $13.80 $8.13
Refuse*** 9% 8% 8% 3% 3%
Bill Change
w/ Refuse**
(%) 7% 8% 7% 6% 3%
($/mo) $14.51 $17.81 $17.55 $15.34 $9.72
* Gas rate changes are shown with commodity rates held constant. Actual gas
commodity rates will vary monthly with wholesale market fluctuations.
** Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45
with Refuse
***No forecast available past FY 2018, inflationary increases assumed.
.
Staff would like to get input from the Finance Committee in advance of finalizing the Utilities
Financial Plans and developing recommendations for rate changes that would be effective July
1, 2015. The proposed Financial Plans and rate adjustment recommendations are currently
scheduled to be presented to the Finance Committee in April.
Background
Every year staff presents the UAC and Finance Committee with financial forecasts for the
Electric, Gas, Water, and Wastewater Collection Utilities and recommends any rate adjustments
required to maintain their financial health. These forecasts are memorialized in Financial Plans
that comprehensively discuss the outlook for each utility.
Commission Review
The UAC reviewed the preliminary financial forecasts at its February 4, 2015 meeting. Council
Member Scharff, the Council liaison to the UAC was also in attendance. No recommendation
was requested at that meeting, but staff sought input from Commissioners before finalizing the
Financial Plans and rate adjustment recommendations.
One Commissioner requested that the UAC be briefed on the reasons for the increasing
wastewater treatment costs, and staff intends to include a presentation on the Regional Water
City of Palo Alto Page 3
Quality Control Plant’s Long Range Facility Plan at the UAC’s March 4, 2015 meeting when the
Wastewater Collection Utility Financial Plan will be reveiwed. Discussion of the drought
scenarios prompted one Commissioner to note that water consumption may not return to pre-
drought levels once the drought is over. Staff has included some discussion of that
phenomenon in the attached presentation.
Commissioners asked whether it would be possible to have either: 1) no rate increase for the
Gas or Wastewater Collection Utilities for FY 2016 (necessitating a higher incrase in FY 2017); or
2) a higher rate increase in FY 2016 followed by a lower, or no, rate increase in FY 2017. The
Council liaison also expressed interest in this possiblity. In response to this input, staff included
a slide in the attached presentation showing a possible scenario in which the gas rates could be
delayed and a larger rate increase for FY 2016 for the Wastewater Collection Utility would be
followed by no rate increase for FY 2017.
One Commissioner also noted how important it was for staff to have a good communications
plan to help customers understand the rate increases. Staff agrees with this assessment.
Next Steps
The UAC is scheduled to review the Financial Plans and proposed rate adjustments for the
Water and Wastewater Collection utilities on March 4, 2015. The UAC will then review the
Electric and Gas Utility Financial Plans and proposed Gas rate adjustments on April 1, 2015.
The Finance Committee is tentatively scheduled to review the Financial Plans and proposed
rate adjustments on April 7, 2015 (for the Water and Wastewater Collection Utilities) and on
April 21, 2015 (for the Electric and Gas Utilities. In addition, as part of the development of the
FY 2016 proposed budgets, staff is evaluating the CIP Reserve levels Once the Finance
Committee has provided its recommendation, notification of any recommended Refuse, Water,
and Wastewater Collection rate increases and the opportunity to protest the proposed changes
will be sent to customers as required by Article XIIID of the State Constitution (added by
Proposition 218). The Financial Plans and proposed rate schedules will then go to the City
Council with the FY 2016 budget, at which time the public hearing required by Article XIIID of
the State Constitution will be held.
Environmental Impact
The Finance Committee’s review of these Financial Plans does not meet the definition of a
project, pursuant to Section 21065 of the California Environmental Quality Act, thus no
environmental review is required.
Attachments:
Attachment A: Presentation on the Preliminary Utilities Long-term Financial Forecasts
(PDF)
Attachment B: Draft Minutes of the February 4, 2015 Utilities Advisory Commission
Meeting (PDF)
1
Preliminary Financial Forecasts and Rate
Changes for Electric, Gas, Wastewater
Collection, and Water Utilities
Finance Committee
March 3, 2015
ATTACHMENT A
2
Financial Forecast Summary
§Reviewing four funds: Electric, Gas, Water and
Wastewater Collection
§Refuse rate projections included for information
§Staff intends to propose Water,and Wastewater
Collection rate changes for FY 2016
§Gas commodity rates vary with market
§Forecasting the need for higher FY 2016-2019 rate
increases than forecasted last year
§Financial Plans with detailed cost and revenue
information will be provided to the UAC in March/April
and Finance in April
3
Preliminary Rate Projections
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%5%5%3%2%
Gas Utility*0%7%4%4%4%
Wastewater 9%9%9%9%6%
Water Utility 12%8%8%8%3%
Bill Change**(%)6%7%7%6%4%
($/mo)$10.79 $14.10 $13.83 $13.80 $8.13
Refuse***9%8%8%3%3%
Bill Change w/
Refuse **
(%)7%8%7%6%3%
($/mo)$14.51 $17.81 $17.55 $15.34 $9.72
*Gas rate changes are shown with commodity rates held constant. Actual gas commodity
rates will vary monthly with wholesale market fluctuations
**Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45 with
Refuse)
***No forecast available past FY 2018, inflationary increases assumed.
4
Comparison to Last Year’s
Projected Bill Changes
0%
1%
2%
3%
4%
5%
6%
7%
8%
FY 2016 FY 2017 FY 2018 FY 2019
Current
Previous
5
Change to CIP Reserve to be Proposed
§Proposal to be included in all utility Financial Plans
§Expand purpose of Capital Improvement Program (CIP) Reserve:
§Current purpose: To be used to hold funds to support large future
one-time projects when needed
§Additional proposed purpose: To also be used as a cash flow and
contingency reserve for CIP expenditures
§Why:
§City will no longer automatically reappropriate CIP funds after FY 2015.
§Reappropriations reserve currently acts as cash flow reserve for CIP program.
§When CIP reappropriations stop at the end of FY 2015, the funds in the
Reappropriations reserve will be released.
§The proposed reserves structure change would allow staff to move the
released funds to the CIP reserve
§Proposal will include minimum and maximum guidelines for the
reserve
6
Electric Utility Financial
Plan, FY 2016-FY 2023
7
FY 2016 –FY 2023 Projections
§FY 2016: 0% rate increase
–Obtain Council authorization fora transfer of $11M from the hydro
reserve for year-end FY 2015
–Obtain Council authorization for$11.4M transfer from the Supply
Rate Stabilization Reserve for year-end FY 2015
§FY 2017 –FY 2023 projected actions
–Complete COSA, implement July 1, 2017 or earlier if necessary
–Complete development of hydro rate adjuster along with COSA
–Use hydro rate adjuster and hydro stabilization reserves in case of
extended drought conditions
–Forecast assumes Smart Grid rollout ($3M/yr starting in FY 2019),
partially funded by Water/Gas Funds. Forecast assumes the
remainder is funded by the Electric Special Projects Reserve.
Electric Utility
8
FY 2016 –FY 2023 ProjectionsElectric Utility
9
FY 2016 –FY 2023 Supply Reserves
Electric Utility
10
Supply Operations ReserveElectric Utility
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
FY
2015
FY
2016
FY
2017
FY
2018
FY
2019
FY
2020
FY
2021
FY
2022
FY
2023
Reserve Maximum
Reserve Target
Reserve Minimum
Reserve (Year-End)
Risk Asssessment
11
Supply Reserve AdequacyElectric Utility
12
FY 2016 –FY 2023 Distribution Reserves
Electric Utility
13
Distribution Operations ReserveElectric Utility
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
FY
2015
FY
2016
FY
2017
FY
2018
FY
2019
FY
2020
FY
2021
FY
2022
FY
2023
Reserve Maximum
Reserve Target
Reserve Minimum
Reserve (Year-End)
Risk Assessment
14
Projected Rate Increases
Comparison to FY 2015 –FY 2019 Financial Plan Forecast
Changes in assumptions:
§Slightly lower inflation rate for expenses
§More CIP projects planned ($1M -$1.5M per year)
§Commodity costs up $1M-$1.5M per year (added Hayworth solar, small market
energy price increases from last year as of the time of the forecast)
Electric Utility
15
Uncertainties
§How long will the drought last?
§Will second transmission line (resulting in TAC
savings) be built?
§Cost of Smart Grid implementation, use of
Electric Special Projects Reserve
Electric Utility
16
Gas Utility Financial Plan,
FY 2016-FY 2022
17
FY 2016 –FY 2022 Projections
Gas Utility
18
FY 2016 –FY 2022 Reserves
Gas Utility
19
Operations Reserve
Gas Utility
20
FY 2016 –FY 2022 Projections
§FY 2016: 0% non-commodity rate increase
§FY 2017 –FY 2022 projected actions
–7% non-commodity increase in FY 2017
–Ongoing 4% non-commodity increases thereafter
§Reasons for increases:
–Higher ongoing CIP costs, primarily for gas main replacement
($500K to $700K per year vs. last year’s forecast) –Water
and Wastewater utilities experiencing similar increases
–Inflationary increases to operational costs
–Increase in PG&E Transportation Rate (doubling in FY 2016)
Gas Utility
21
Projected Rate Changes
Comparison to FY 2015 –FY 2021 Financial Plan Forecast
Changes in assumptions:
§PG&E Transportation Rate rising much faster than previously
projected. This has a much larger impact on PG&E customers than
on Palo Alto customers.
§Higher costs for main replacement
Gas Utility
22
Uncertainties
§Prices for main replacement currently 50%
higher than historical. Will that continue?
–Base case assumes they return to normal.
–Continued higher cost results in an additional
$1.6 to $1.8 million per year.
§Is current rate of main replacement optimal?
–Gas System Master Planning Study underway
Gas Utility
23
Rate Changes under
Various Business Cases
Gas Utility
24
What Potential Costs aren’t
Included in the Forecast?
§Potential Revenue Loss: Long term decrease in consumption
due to fuel switching
–Solution: This is a long-term policy issue requiring comprehensive
analysis in the context of the Sustainability and Climate Action Plan
policy making process.
§Potential Cost: Changes in design of Cap-and-Trade Program
allowance allocations after 2020.
–Solution:Assume current design will continue, but if there are
changes, pass through costs to customers.
§Potential Cost: Additional cross-bore program costs.
–Solution:Current forecast assumes $3M additional for cross-bore
program in forecast period, actual costs could be higher. Staff to
return to Council in 2015 to discuss.
Gas Utility
25
Wa stewater Collection
Utility Financial Plan,
FY 2016-FY 2021
26
FY 2016 –FY 2021 Projections
Wastewater Collection Utility
27
FY 2016 –FY 2021 Reserves
Wastewater Collection Utility
28
Operations Reserve
Wastewater Collection Utility
29
FY 2016 –FY 2021 Projections
§FY 2016 proposal: 9% rate increase
–$2.64 per month change on a residential bill
–Capital project cost increases
§FY 2017 –FY 2021 projected actions
–Ongoing 9% increases, tapering down to 6% in FY 2020
–Assumes continuing increases in treatment costs,
operational costs
Wastewater Collection Utility
30
Projected Rate Changes
Comparison to FY 2015 –FY 2019 Financial Plan Forecast
Wastewater Collection Utility
31
Uncertainties
§Higher main replacement costs seen in water
and gas occur here as well. How long will it
continue?
–Base case assumes no changes as of yet.
–Similar 50% increased cost case results in higher
costs of $1.5 to $1.7 million per year.
§Is current rate of main replacement optimal?
–Wastewater System Master Planning Study
planned.
Wastewater Collection Utility
32
Rate Changes under
High CIP Cost Scenario
Wastewater Collection Utility
33
Water Utility Financial
Plan, FY 2016-FY 2023
34
FY 2016 –FY 2023 ProjectionsWater Utility
35
FY 2016 –FY 2023 ProjectionsWater Utility
36
FY 2016 –FY 2023 ProjectionsWater Utility
37
FY 2016 –FY 2023 Projections
§FY 2016 proposal:
–12% rate increase due to increase in wholesale
water supply rates (rate increasing from $2.93/CCF
to $3.83/CCF)
–Continue to work to develop drought surcharge
rate sheet, but do not use drought rates unless
SFPUC imposes restrictions above 10% in 2015
§FY 2017 –FY 2023 projected actions
–8% increases through FY 2019
–Use drought rate surcharges if drought lasts
beyond 2015
Water Utility
38
Projected Rate Changes
Comparison to FY 2015 –FY 2021 Financial Plan Forecast
Changes in assumptions:
§Larger FY 2016 SFPUC wholesale rate increase
§Assumes drought continues through 2015
§Load forecast methodology revised
Water Utility
0%
2%
4%
6%
8%
10%
12%
14%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
FY 2015 - FY 2021 Financial Plan
Current Forecast
39
Change in Load ForecastWater Utility
40
Uncertainties
Capital Improvement Program Uncertainty:
1.Prices for main replacement are currently 50%
higher than historical. Will that continue?
–Base case assumes they return to normal.
–Continuing with infrastructure replacements in keeping with
budget and any safety considerations.
2.Is current rate of main replacement optimal?
–Results from Water System Master Planning Study expected
to be available in May 2015
–Could result in increase or decrease to recommended rate of
replacement
Water Utility
41
Rate Changes, High CIP Scenario
Water Utility
42
What Potential Costs aren’t Included
in the Forecast?
§Potential Cost: SFPUC doing condition assessments of
some Hetch Hetchy system assets not included in
WSIP
–Impact:Could affect commodity rates in outer years (after
2020)
§Potential Cost: Seismic rehabilitation work may be
required on Foothills transmission line
–Solution:Consultant investigating a solution in which the
transmission line is not replaced, and CPAU installs a valve
and hose system (under $2M cost) to bypass earthquake
breaks to do repairs
Water Utility
43
What Potential Costs aren’t Included
in the Forecast?
§Potential Revenue Loss: Extended drought, or 20% or
higher mandatory reductions required by SFPUC
–Solution: Impose drought rates
§Potential Revenue Loss: Post-drought consumption
does not return to pre-drought levels
–Impact:Forecast assumes 50% rebound in consumption. If
consumption recovers fully, rate increases would not be as
high. If no recovery, rate increases could be even higher.
§Potential Cost:Recycled water project
–Impact: Rate impact to be analyzed in 2015
Water Utility
44
Conclusion
45
Preliminary Rate Projections
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%5%5%3%2%
Gas Utility*0%7%4%4%4%
Wastewater 9%9%9%9%6%
Water Utility 12%8%8%8%3%
Bill Change**(%)6%7%7%6%4%
($/mo)$10.79 $14.10 $13.83 $13.80 $8.13
Refuse***9%8%8%3%3%
Bill Change w/
Refuse **
(%)7%8%7%6%3%
($/mo)$14.51 $17.81 $17.55 $15.34 $9.72
*Gas rate changes are shown with commodity rates held constant. Actual gas commodity
rates will vary monthly with wholesale market fluctuations
**Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45 with
Refuse)
***No forecast available past FY 2018, inflationary increases assumed.
46
Preliminary Financial Forecasts and Rate
Changes for Electric, Gas, Wastewater
Collection, and Water Utilities
Finance Committee
March 3, 2015
47
Backup Slides
48
Estimated Rate Projections with
Alternate Gas/Wastewater Plan
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%5%5%3%2%
Gas Utility*0%9%4%4%4%
Wastewater 17%0%9%9%6%
Water Utility 8%7%7%7%3%
Bill Change**(%)6%6%6%6%3%
($/mo)$10.65 $11.10 $12.82 $12.61 $7.97
Refuse 9%8%8%3%3%
Bill Change w/
Refuse **
(%)7%6%7%5%3%
($/mo)$14.37 $14.81 $16.54 $14.15 $9.56
*Gas rate changes are shown with commodity rates held constant. Actual commodity rates
will vary monthly with wholesale market fluctuations
**Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45 with
Refuse)
***No forecast available past FY 2018, inflationary increases assumed.
49
Estimated Rate Projections with
No Rate Increases in FY 2016
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%5%5%3%2%
Gas Utility*0%9%4%4%4%
Wastewater 0%20%7%2%3%
Water Utility 0%12%10%10%6%
Bill Change**(%)0%11%8%6%4%
($/mo)$0.00 $19.96 $15.00 $13.53 $6.04
Refuse 9%8%8%3%3%
Bill Change w/
Refuse **
(%)2%10%8%6%4%
($/mo)$3.72 $23.67 $18.72 $15.07 $7.63
*Gas rate changes are shown with commodity rates held constant. Actual commodity rates
will vary monthly with wholesale market fluctuations
**Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45 with
Refuse)
50
Estimated Rate Projections with
Staggered Rate Increases
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%10%0%4%2%
Gas Utility*0%9%0%9%7%
Wastewater 17%0%17%0%3%
Water Utility 11%0%10%10%2%
Bill Change**(%)7%4%7%7%4%
($/mo)$12.58 $8.00 $13.63 $14.21 $8.64
Refuse 9%8%8%3%3%
Bill Change w/
Refuse **
(%)7%5%7%6%4%
($/mo)$16.30 $11.71 $17.35 $15.75 $10.23
*Gas rate changes are shown with commodity rates held constant. Actual commodity rates
will vary monthly with wholesale market fluctuations
**Change in estimated median residential bill, $178.31 as of June 30, 2014 ($218.45 with
Refuse)
51
FY 2014 Results
§FY 2014 Financial Forecast: $2.2 million deficit
§FY2015–FY2019 Financial Plan forecast: $144,000 deficit
§Actual Results for FY 2014: $230,000 deficit
§Significant changes from original forecast:
Net Cost/
(Benefit)
Type of
change
Lower renewable energy costs (project cancelations)($6,093,000)Cost savings
Higher market purchase costs due to renewable project
cancelations and low hydro
$9,669,000 Cost increase
Lower than projected CAISO charges*($5,197,000)Cost savings
Other commodity purchase cost savings ($1,401,000)Cost savings
Funds released from capital budgets ($3,897,000)Cost savings
Savings in operating budgets (2,042,000)Cost savings
Sales revenue lower than projected $6,483,000 Revenue decrease
Other $448,000 Various
NET TOTAL $2,030,000
*lower than projected transmission costs, higher congestion revenue, and
favorable timing of prior month bill adjustments
Electric Utility
52
FY 2015 Projections
§FY 2015 –FY 2019 Financial Plan: $5.8M deficit
§Current projection for FY 2015: $16.6M deficit
§Significant changes from last year’s forecast:
Net Cost/
(Benefit)
Type of
change
Decrease in projected sales $1,672,000 Revenue decrease
Other revenue higher than projected ($403,000)Revenue increase
Drought -Western Base Resource / Reclamation cost $2,765,000 Cost increase
Renewables –Ameresco interconnection payment $795,000 Cost increase
Increased market purchase costs / decreased surplus rev.$8,499,000 Cost increase
Transmission cost savings ($2,391,000)Cost savings
Other ($137,000)Various
TOTAL $10,800,000
Electric Utility
53
FY 2014 Results
§FY 2014 Financial Projection: $3.09M surplus (CMR3595)
§FY2015–FY2021 Financial Plan forecast: $3.92M
surplus (CMR4799)
§Actual Results for FY 2014: $4.7 million surplus
§Significant changes from forecast:
Net Cost/
(Benefit)
Type of
change
Savings on Operations budgets ($1,210,000)Cost savings
Savings in Capital project costs (midyear)($1,185,000)Cost savings
Lower purchases ($845,000)Cost savings
Other revenues (interest, capacity fees) were higher ($189,000)Revenue increase
Sales volumes were 6% lower than forecasted $2,329,000 Revenue decrease
Other ($600,000)Various
TOTAL (NET)($1,700,000)
Gas Utility
54
FY 2015 Projections
§FY 2015 –FY 2021 Financial Plan forecast: $1.18
million surplus (CMR4799)
§Current projections for FY 2015: $334,000 surplus
§Significant changes from last year’s forecast:
Net Cost/
(Benefit)
Type of
change
Lower revenues (due to lower sales/commodity prices)$2,356,000 Revenue decrease
Cap and Trade related allowance sales ($272,000)Revenue increase*
Projected other revenue increases (PaloAltoGreen Gas,
Interest Income, Connection fees, etc.)
($643,000)Revenue increase
Capital project costs higher than expected $525,000 Cost increase
Lower commodity costs due to lower load and prices ($1,293,000)Cost decrease
Other $33,000 Various
TOTAL $846,000
* Cap and Trade revenues may only be used for AB32 compliant programs for the benefit of gas ratepayers
Gas Utility
55
FY 2014 Results
§FY 2014 Financial Projection: $1.2M surplus (CMR 3567)
§FY2015–FY2021 Financial Plan forecast: $3.3M surplus
(CMR 4799)
§Actual Results for FY 2014: $3.2 million surplus
§Significant changes from forecast:
Net Cost/
(Benefit)
Type of
change
One year savings in treatment costs ($2,278,000)Cost savings
Higher connection and capacity fees ($941,000)Revenue increase
Higher operations costs $663,000 Cost increase
Sales volumes were lower than forecasted $853,000 Revenue decrease
Other ($297,000)Various
TOTAL (NET)($2,000,000)
Wastewater Collection Utility
56
FY 2015 Projections
§FY 2015 –FY 2021 Financial Plan forecast: $1.55
million deficit (CMR 4799)
§Current projections for FY 2015: $1.66 million deficit
§Very little change from last year’s forecast.
Wastewater Collection Utility
57
FY 2014 Results
§FY 2014 Financial Forecast: $810K deficit
§FY2015–FY2021 Financial Plan forecast: $236K deficit
§Actual Results for FY 2014: $3.3 million surplus
§Significant changes from forecast:
Net Cost/
(Benefit)
Type of
change
Savings in Operations budgets ($1,576,000)Cost savings
Sales volumes were 5% higher than forecasted ($2,227,000)Revenue increase
SFPUC rate was 9% lower than projected (partially
offset by purchase volumes that were 5% higher)
($648,000)Cost savings
Other revenues (interest income, capacity fees) were
higher
($1,590,000)Revenue increase
Transfers out lower than forecasted ($1,219,000)Cost savings
Capital project costs higher than projected $3,135,000 Cost increase
TOTAL (NET)($4,125,000)
Water Utility
58
FY 2015 Projections
§FY 2015 –FY 2021 Financial Plan forecast: $3.1 million
deficit, assumed drought restrictions entire fiscal year
§Current projections for FY 2015:
–If drought restrictions are lifted in March: no surplus/deficit
–If drought restrictions continue: $500,000 deficit
§Significant changes from last year’s forecast:
Net Cost/
(Benefit)
Type of
change
Savings in Operations budgets ($1,000,000)Cost savings
SFPUC rate 5% lower than projected ($670,000)Revenue increase
Other revenues (interest income, capacity fees) are higher ($450,000)Revenue increase
Sales revenue projections higher ($740,000)Revenue increase
TOTAL ($2,860,000)
Water Utility
59
Preliminary Average
Residential Bill Projections
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Electric Utility 0%3%4%3%2%
Gas Utility*4%4%4%4%5%
Wastewater 9%9%9%9%7%
Water Utility 5%6%4%3%4%
Refuse 9%8%8%3%3%
Overall Bill
Impact**5%6%5%4%4%
*Gas rate changes are shown with commodity rates held constant. Actual
commodity rates will vary monthly with wholesale market fluctuations
**Average residential bill
60
Rate Changes, Various Business Cases
Water Utility
EXCERPTED DRAFT MINUTES OF THE FEBRUARY 4, 2015
UTILITIES ADVISORY COMMISSION MEETING
ITEM 2: DISCUSSION: Preliminary Financial Forecasts and Rate Changes for Electric, Gas,
Wastewater Collection, and Water Utilities
Senior Resource Planner Jon Abendschein stated that this is an informational item, but that the
comments from the UAC are very helpful for staff while finalizing the Financial Plans. He said
the presentation would include information on the Electric, Gas, Wastewater Collection, and
Water Utilities, but some information on Refuse rates was also included for context. He said the
City had been able to hold rates steady last year, and the year before that there were no
increases except to water rates. Future projected cost increases were such that holding rates
steady would begin to require cuts in things like infrastructure investment. That meant that the
next few years will require rate increases for the Electric, Gas, Water, and Wastewater utilities.
Next year staff is proposing 3% increases for the Gas Utility, 9% for Wastewater, and 7% for
Water. After that, the median residential bill is projected to increase 5-6% each year through
FY 2019, a bit above inflation, and higher than that if Refuse is included. The main driver for the
Electric, Gas, Water, and Wastewater increases was infrastructure investment, mainly in the
City’s suppliers’ systems. Wholesale water costs were going up due to investment in the Hetch
Hetchy water system, improvements to the wastewater treatment plant were underway, and
our costs to transport gas across PG&E’s system were going up as they overhaul their system to
make it safer. In the past, in the face of cost increases like these, the City has been exemplary
about not cutting back on infrastructure investment, and has continued to make the capital
investments needed to keep the system running safely and to avoid pushing a large capital
investment need on to future ratepayers. This forecast assumes that practice continues. He
stated that this year’s bill projections were slightly higher than last year’s, which was mainly
related to higher infrastructure projections.
Abendschein said staff was also planning to propose one change to the Reserves Management
Practices that would apply to all four utilities. The change would not have any short term
impact on the financial forecasts, but it would help staff manage a change in City capital
improvement project (CIP) budgeting practices. That change was expected to result in a release
of funds from the Reappropriations Reserve. The purpose of the CIP Reserve would be changed
for each utility to make it a cash flow and contingency reserve, and funds released from the
Reappropriations Reserve would be added to the CIP Reserve. Staff was also planning to
propose adding minimum and maximum guidelines to the CIP Reserve.
ATTACHMENT B
Commissioner Hall asked if the CIP reserve would have a specific plan for CIP reserve
replenishment.
Abendschein stated that staff would make an initial reserves management practices proposal
with the upcoming Financial Plans, but plans to review those practices and may propose
changes next year.
Electric Utility
Abendschein stated that for July 1, 2015 staff was proposing no rate increase for the electric
utility. Reserves were adequate to avoid a rate increase until FY 2017, even with the drought.
Delaying the rate increase would allow the City time to do a thorough job with an electric cost
of service study before rates were changed again. He said that the drought had resulted in
additional costs that staff planned to propose to fund from reserves. Staff had originally
planned to draw down the Rate Stabilization Reserve by $5.8 million, but now planned to
propose to transfer $11 million from the hydro stabilization reserve and $11.4 million
drawdown of the rate stabilization reserve. Even with the transfer, reserves were adequate to
manage the utility’s financial position even if the drought continued through FY 2016.
Abendschein showed the utility’s financial projections. He said 5% rate increases were
projected in FY 2017 and FY 2018, and subsequently rates were projected to be stable over the
long term. The increase in costs was mostly associated with renewable energy projects coming
online. The ratepayers were still getting a great value from their electric utility. Rates were
lower than most other utilities in the state, and substantially lower than PG&E. PG&E had
increased their rates 8% in 2011, 3-4% since then, and they had future 3-4% rate increases
planned. By contrast, the City had not changed electric rates since July 1, 2009.
Abendschein showed the reserves levels over the forecast period. The drought had an impact
on supply reserves due to low hydroelectric generation, but there were still ample reserves
remaining to protect against continuing drought. Both supply and distribution reserve levels
were projected to stay within the reserve guidelines through the forecast period, and well
above the level of staff’s risk assessments.
Abendschein showed the current rate projections compared to the previous year’s projections,
noting that the lack of a rate increase for FY 2016 meant slightly higher rate increases in the
following year, but that the current rate change trajectory would result in roughly the same
customer bill in FY 2020 as projected the previous year. He noted some uncertainties in the
forecast, including the length of the drought (and its effect on hydroelectric generation) and the
timeline for the new transmission line the City had been investigating. The forecast also
assumed the use of the Electric Special Projects Reserve (previously known as the Calaveras
Reserve) for the cost of Smart Grid implementation. That was not a formally adopted policy yet,
and if a different policy was adopted, and the smart grid rollout was funded by rates, it could
result in higher rates in the short term.
Commissioner Hall asked if the chart showing the drawdown in reserves in FY 2015 and FY 2016
assumed a 0% electric rate change.
Abendschein confirmed that this was correct.
Commissioner Hall asked what the risk assessment level for reserve adequacy included.
Abendschein stated that the risk assessment included a list of scenarios that had a negative
impact on the utility’s financial position, such as increases in market prices, a decrease in
hydroelectric generation, or supplier default. The utility wanted to keep the reserves above the
risk assessment level.
Commissioner Hall asked whether there were other contexts in which the reserve levels were
reviewed.
Director Fong said that the reserves were reviewed in the context of the budget annually. She
added that an internal staff risk oversight committee reviews the reserve levels.
Commissioner Hall asked when the levels of the reserves were reviewed outside the budget
process throughout the year.
Director Fong stated that the reserve levels are reported to the UAC and Council in the
quarterly informational reports.
Commissioner Hall recommended that staff provide detail of the reserves and their
management practices in the future.
Director Fong said staff would provide that with the Financial Plans and the quarterly reports.
Commissioner Cook noted that the City has done a remarkable job holding the line on electric
rates over many years as the supply portfolio has become greener and greener and, ultimately
carbon neutral.
Gas Utility
Resource Planner Eric Keniston stated that there would 3 to 4% increases over the planning
horizon. Rate increases were presented holding commodity costs ‘steady’ as they vary monthly
and are passed-through directly to customers. Referring to cost components, capital
improvement budgeting would resume after a two year hiatus to complete outstanding
projects, and all other costs were rising steadily. He noted that the Rate Stabilization reserve
was being drawn down by FY 2018 to moderate rate increases, with the Operations reserve
staying above the minimum and risk assessment guideline levels through the forecast period.
Keniston stated that the 3% increase in FY 2016 was primarily due to increases in the PG&E
transportation cost to Palo Alto, and in outer years, higher capital improvement costs, with rate
increases starting two years earlier than what last year’s financial plans projected.
Regarding capital improvement costs, Keniston stated that costs for main replacement in water,
gas and wastewater have increased by 25 to 50 percent from prior projections. Where possible
and can be done safely, projects have been reduced in size to keep budgets stable. He stated
that staff is completing a Gas System Master Plan to determine the appropriate rate of future
pipeline replacement, but future costs remain an uncertainty.
He stated that the forecasts do not include the impact of fuel switching, which could lead to
reduced load. Keniston added that the cap-and-trade program is currently only planned
through 2020 and it is unclear what will happen after that time. The cross-bore program also
is costing more than originally expected, and may go even higher.
Commissioner Eglash stated that he was happy to see the continued focus on infrastructure
investment by the Utilities. He asked if the labor shortages that were experienced a few years
ago have been solved. Assistant Director Tomm Marshall stated that they are caught up now
on projects, but labor shortages for engineers still exist.
Commissioner Eglash noted that in the Electric Utility, we are not proposing a rate increase
even though there are also CIP increases. Abendschein stated that the size of the electric utility
was much larger than the other funds and that the CIP expenses were a smaller portion of the
total expenses for electric.
Chair Foster asked if we could either not increase rates in 2015 and have higher rate increases
next year, or, alternatively, we could have higher increases this year to avoid increases in 2016.
He noted that the 3% and 4% rate increases could be replaced with no change followed by a
subsequent year higher rate change, or the other way around. Abendschein stated that bill
increases may be larger in those scenarios. Director Fong said that the proposal is to spread
out the rate increases and total bill impact. Council Member Scharff stated that he may prefer
an earlier larger increase with no increase the following year. Abendschein stated that
proposals would have to be weighed against having reserves too high.
Commissioner Hall said that his memory is that the commission has supported smoothing out
the rate changes and not having pre-emptive rate increases that are higher than justified.
Chair Foster mentioned it would be interesting to see what increase in FY 2016 could generate
no increase in FY 2017.
Wastewater Collection Utility
Keniston said that the wastewater rate projections are driven by substantial treatment cost
increases (about 5% per year) causing the need for 4 years of 9% per year rate increases
starting in 2016. Prior year projections were for 7%. The Rate Stabilization reserve is projected
to be drawn down by the end of FY 2016, with the Operations reserve dropping closer to the
minimum and risk assessment guideline levels.
Commissioner Hall inquired as to whether this drawdown was being done to prevent even
larger increases. Keniston responded that that was the case.
Keniston showed that a 9% increase amounted to a $2.64 per month increase in residential
customer bills, and that at the end of the forecast period, with the rate changes shown, average
residential bills in FY 2021 would be slightly under $45 per month. As a point of comparison,
surrounding community average bills are currently about $44.50, so Palo Alto is well under the
average.
Keniston stated that sewer main replacement and rehabilitation costs are higher than
anticipated, and that, similar to water and gas, a wastewater collection master planning study is
planned in future years.
Commissioner Hall noted that the treatment cost is a black box to this commission since it does
not have jurisdiction over wastewater treatment. He stated that the Council does not get the
benefit of UAC review of that large part of the costs. Director Fong said that she would ask the
Manager of the Regional Water Quality Control Plant to attend the UAC’s March meeting when
the UAC reviews the Wastewater Financial Plan and rate proposals.
At this point in the meeting, Commissioner Hall left the meeting due to a self-identified conflict
of interest on water issues.
Water Utility
Abendschein presented the water financial projections, which show that 7%/year rate increases
will be required due to the rising cost of water supplies from the San Francisco Public Utilities
Commission (SFPUC) as well as increases in CIP costs. He stated that staff will propose
separating out of the commodity cost on the bill so that the wholesale water cost would be
passed directly on to the customers. This would enhance transparency so that customers
would be able to see the water cost. In addition, the cost of noticing water rate changes would
be reduced. Reserves were projected to stay within reserve management guidelines over the
forecast period. Staff anticipated keeping additional funds in the CIP reserve through the end of
FY 2017 in case of unanticipated costs in CIP projects, particularly seismic upgrades to various
reservoirs. Staff was still working on preparing a drought surcharge, which was not expected to
be needed in 2015 unless water use restrictions increase.
Commissioner Eglash asked staff to confirm that a drought surcharge would be needed because
the water utility’s costs were largely fixed, and when usage decreased, revenue had to increase
to cover those costs.
Abendschein confirmed that was the case.
Abendschein explained that rate increases in later years were increasing from the previous
year’s forecast due to a change in the load forecast methodology. Water consumption had
decreased since the recession, and in previous years staff had projected that consumption
would return to normal once the economy recovered. The Bay Area economy had largely
recovered, however, and there had been no increase in water consumption, so staff was now
projecting that water consumption would not increase in the future.
Abendschein said staff had analyzed two major uncertainties in our forecast, a higher CIP cost
scenario just like the one that had been done for the Gas and Wastewater Collection Utilities,
and two extended drought scenarios. An extended drought would reduce reserves meaning
that some of the rate increases in the outer years would have to be moved forward to FY 2020.
Higher CIP costs would result in higher near-term rate increases, 9-10% for three years instead
of the 7% under the normal CIP scenario.
Abendschein said that several potential costs are not included in the forecast. These include
extended (or more severe) drought, the impact of which would be managed through drought
surcharges. It also included the need for seismic work on the Foothills water transmission line,
though staff had a consultant investigating a possible lower cost approach to that project
involving a system that could be used to bypass breaks. The SFPUC was also doing condition
assessments of some Hetch Hetchy assets that were not included in their Water System
Improvement Plan, and if those revealed the need for additional work, it could increase
wholesale water costs. Lastly, the rate impact of a potential recycled water project had not yet
been analyzed.
Commissioner Eglash complimented staff on the complex analysis. He stated that staff may be
much too optimistic regarding the drought’s impact on water rates and that he thought that
there a return to pre-drought use levels may not be a good assumption to make. He said that it
will take many years to replenish the state’s water reservoirs. There could be extended periods
with reduced precipitation and less snowfall and more rain in the Sierra as well. He asked if
staff has given enough consideration of a "new normal" of lower water availability.
Abendschein said it was worth considering, and that there had not been a return to pre-
drought usage levels after prior droughts. He said it was a good argument for not putting the
water rate increase off another year. He added that although there is the potential for a “new
normal” level of water consumption, it would be premature to adjust rates preemptively.
Director Fong added that if there was a real need, staff would return to Council with a mid-year
rate increase request.
Commissioner Chang asked if the forecasts took into account efficiency savings.
Abendschein confirmed they did.
Commissioner Chang asked if staff considered the bill impact on business customers.
Abendschein said rates were based on a cost of service model, but that staff considered the bill
impact to all customer groups when setting rates.
Commissioner Chang asked about the outreach strategy for the rate increases. The projections
showed large cumulative rate increases, 30% over 5 years. There were good reasons for the
increases, but it was important to explain them to people in easily understandable terms.
Director Fong explained that staff had focused on carefully communicating rate changes in prior
years and would continue to do so.
Council Member Scharff asked what would happen if customers conserved and the SFPUC was
able to sell the water they saved to other agencies. Would it have a beneficial impact to
customers bills?
Abendschein said that if Palo Altans reduced their per-capita water consumption and more
water was available to other agencies, as those agencies grew they might use more water,
meaning more of the costs of the Hetch Hetchy system would be allocated to other agencies.
That would have a beneficial impact on Palo Alto customers’ bills.
Chair Foster asked staff to confirm that customers in Palo Alto had paid substantially for
improvements to the Hetch Hetchy system.
Abendschein said they had, just like other customers of the Hetch Hetchy system.
Chair Foster asked whether the Santa Clara Valley Water District had paid anything for those
improvements.
Abendschein said that to his knowledge, they had not.