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Home My WebLink About2021-02-02 Finance Committee Agenda PacketFinance Committee 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION ONLINE ON THE CITY CLERK’S WEBSITE. Tuesday, February 2, 2021 Regular Meeting 7:00 PM ***BY VIRTUAL TELECONFERENCE ONLY*** Click to Join Zoom Meeting ID: 992-2730-7235 Phone: 1(669)900-6833 Pursuant to the provisions of California Governor’s Executive Order N-29-20, issued on March 17, 2020, to prevent the spread of Covid-19, this meeting will be held by virtual teleconference only, with no physical location. The meeting will be broadcast on Midpen Media Center at https://midpenmedia.org. Members of the public who wish to participate by computer or phone can find the instructions at the end of this agenda. Call to Order Oral Communications Members of the public may speak to any item NOT on the agenda. Action Items 1.Fiscal Year 2021 and Prior Finance Committee Referrals Update and Direction to the City Council to Accept the Current Status Report 2.Review and Affirm City Council Procedures and Protocols for Contract Approval on City Council Agendas and Forward to the City Council For Approval Future Meetings and Agendas Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. Presentation 2 February 2, 2021 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION ONLINE ON THE CITY CLERK’S WEBSITE. Public Comment Instructions Members of the Public may provide public comments to virtual meetings via teleconference or by phone. 1. Spoken public comments using a computer will be accepted through the teleconference meeting. To address the Committee, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. A. You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers including Internet Explorer. B. You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. C. When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. D. When called, please limit your remarks to the time limit allotted. E. A timer will be shown on the computer to help keep track of your comments. 2. Spoken public comments using a smart phone will be accepted through the teleconference meeting. To address the Committee, download the Zoom application onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID below. Please follow the instructions B-E above. 3. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Committee. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. https://zoom.us/join CLICK HERE TO JOIN Meeting ID: 992-2730-7235 Phone No: 1 (669) 900-6833 City of Palo Alto (ID # 11966) Finance Committee Staff Report Report Type: Action Items Meeting Date: 2/2/2021 City of Palo Alto Page 1 Council Priority: Fiscal Sustainability Summary Title: FY 2021 and Prior Finance Committee Referrals Status Update Title: Fiscal Year 2021 and Prior Finance Committee Referrals Update and Direction to the City Council to Accept Current Status Report From: City Manager Lead Department: Administrative Services Recommendation This report provides a status update of City Council referrals requested for Finance Committee Action and staff recommend that the Finance Committee Forward this status to the City Council for approval. Background and Discussion This report provides an update on all outstanding City Council referrals to the Finance Committee. Staff researched the referrals and the current list reflects direction as recently as the February 2020 City Council Retreat and May 2020 Budget Process to as to 2013. City Council requested information on various items that are discussed in this report and is provided in coordination with assigned departments. During this period staff has found records for approximately 36 referrals of which 20 have been completed. The table below outlines the remaining 16 referrals of which 11 are recommended to be closed and five remain outstanding as work continues. A summary table of the current referrals and status of them follows, with additional information on the referrals after the summary table. These are in order of most recent to longest aged. Referral Assigned Department Status FY2021 Budget: Explore changing delivery of services from a dominant fire-oriented model to a dominant medical-oriented model. Referred June 2020 Fire Department Closed Included in the staff report is a summary of the current status of Fire medical services delivery. Staff recommends that considering the current medically oriented agency status and complementary cross- staffing model, that no immediate action be taken. The Fire Department will continue to look for efficiencies and methods for modernization of its delivery of services. FY2021 Budget: Community On Hold City of Palo Alto Page 2 Referral Assigned Department Status A report or item on the JMZ six months after it opens and what it would look like to eliminate the General Fund Subsidy through a fully cost recoverable program. Referred June 2020 Services Department The Junior Museum and Zoo (JMZ) construction project is 98% complete. In May 2020, staff presented the preliminary operating plan to Council (CMR 11222) along with adjustments to the municipal fee schedule (memo). Due to COVID-19, re-opening of the new facility was delayed. Staff anticipated a March 2021 opening; however, that has been further delayed due to the pandemic. Staff and the Friends of the JMZ are now considering either a June or November 2021 opening. Staff will return with an analysis and modeling of a fully cost-recoverable program once JMZ is completely operational. Resume work on a potential business tax or local tax ballot measure. Referred March 2020 Administrative Services On Hold March 2020, this work was placed on hold in March 2020 as part of CMR #11161 due to the COVID-19 public health emergency. Direct the Finance Committee to come up with proposed thresholds for Council to consider related to Section 2.4.L, Consent Calendar Categories, which determines the eligibility for items to be placed on the Consent Calendar. Referred February 2020. Administrative Services Department Closed This item is agendized separately on this same February 2, 2021 agenda for Finance Committee Review and consideration. This item was previously agendized on December 15, 2021, however during the Finance Committee meeting was deferred until calendar year 2021. Refer to the Finance Committee, a proposal to consider an affordable housing tax. Referred February 2020. Planning & Development Services Department/ Administrative Services Department In Progress Staff expects to bring initial discussion on this item during the first half of 2021. Colleagues' Memo on Fiscal Transparency in Labor Negotiations: Workplan and Suggested Terms Requires Informed Conversations w/ Labor Groups. Referred September 2018 Human Resources Department Closed This item was considered by the Finance Committee on September 4, 2018 (CMR #9549). Work was directed to the Human Resources Department to review this with the City’s bargaining units and incorporate this in the City’s next round of labor negotiations. Currently the majority of the City’s contracts remain closed, however are expected to re- open over the coming 12 -18 months if not sooner for some. This work will be included as part of those discussions. CY2019 Fiscal Sustainability Workplan: Human Resources Closed This item is no longer applicable. Staff remain focused City of Palo Alto Page 3 Referral Assigned Department Status Proposals to address/ recruitment & retention challenges. Referred April 2019. Department on restructuring the workforce to adapt to the current changing workforce environment, making adjustments based on financial constraints, and preparing for the new normal. CY2019 Fiscal Sustainability Workplan: Parking Management Referred April 2019. Office of Transportation Closed This item is no longer applicable. Through the establishment of the Office of Transportation including additional resources for parking management activities, programs are brought forward by this team. For example, plans brought forward for the opening of the new California Avenue parking garage. CY2019 Fiscal Sustainability Workplan: Improvement of code enforcement, 311 system, and customer relationship management activities. Referred April 2019. Planning & Development Services/ City Manager’s Office/ Information Technology Department In Progress This item has been delayed due to vacancies and resource availability. In addition, code enforcement reductions were approved as part of the FY 2021 Adopted Budget, freezing two of three code enforcement staff. Evaluation of Printing & Mailing Services levels and service delivery. Referred May 2019. Administrative Services In Progress This item has been delayed due to vacancies and resource availability. Development of a request for proposal (RFP) is underway. Report to City Council on the plan and implications of power redundancy. Referred May 2017. Utilities Department Closed Staff is providing an update via an information item as part of the February 8, 2021 City Council agenda Update on Progress Toward a Second Transmission Line Corridor Connecting the City of Palo Alto Electric Distribution System to the Pacific Gas & Electric Transmission Grid. Capture costs associated with parking and traffic initiatives attaining cost recovery between revenues and expense. Referred May 2016. Office of Transportation Closed This item is no longer applicable. Through the establishment of the Office of Transportation including additional resources for parking management activities, programs are brought forward by this team. For example, plans brought forward for the opening of the new California Avenue parking garage. Review sworn versus non- sworn staffing for cost savings/enhanced services/increased revenues. Referred May 2016. Police Department/ Fire Department Recommend to Policy & Services Committee Staff continue to evaluate delivery of services through the annual budget process with a lend towards cost savings. However, considering the current race and equity work, it is recommended that this work be reassigned to the Policy and Services Committee in alignment with the services reforms being explored through race and equity workplan. Fire staffing models have been discussed below in the summary of the City of Palo Alto Page 4 Referral Assigned Department Status current status of Fire medical services delivery. Discussion of changes to the Public Art Ordinance to Simplify the Calculation of the Public Art Fee Part of Public Art Master Plan. Referred May 2015. Community Services Department Closed The City Council considered ordinance changes for the City’s Public Art Program on October 5, 2020 (City Manager Report #11539 Percent for Public Art Ordinances). No changes to the public art ordinance for public or private development projects were made. Consideration of stronger encroachment fees for construction that impact portions or all of a city street or sidewalk. Referred May 2015. Public Works Department Closed As part of the application process for any development or construction project work, street and sidewalk closures are reviewed and appropriate fees assessed. As part of the annual review of the municipal fee schedule, staff works to maintain full cost recovery on these fees. Police Services Utilization and Resources Study: evaluating the possibility of using the CA commission for Police Officer Standards and Training to conduct the police service evaluation or issue an RFP. Referred 2013. Police Department Closed This study was not commissioned however, given the age of this referral is recommended closed. Work is actively under review as part of the City’s Race and Equity projects which ensure the intention of this is addressed however, updated for current priorities. Explore changing delivery of services from a dominant fire-oriented model to a dominant medical- oriented model. Palo Alto Fire is currently recognized as a medically oriented agency. In the most recent bi-annual report (January 1, 2020- June 30, 2020), it was noted that Rescue and Emergency Medical Service (EMS) calls account for sixty-two percent (62%) of total calls. Our ability to respond to EMS calls has exceeded our response time standards: • At least ninety percent (90%) of first responders arriving on scene to EMS calls within eight (8) minutes. Palo Alto Fire arrived on the scene of EMS calls within eight minutes ninety-one percent (91%) of the time, • At least 90% of paramedic responders on scene to EMS calls within twelve (12) minutes. PAFD paramedics arrived on the scene of EMS calls ninety-nine percent (99%) of the time. The Palo Alto Fire Department exceeds the response time standards because of the following EMS focused response models: • Palo Alto Fire is the only fire agency in Santa Clara County that operates an emergency ambulance transport service. • Every fire unit (engine, truck, and ambulance) is always staffed with at least one paramedic. • Multiple Palo Alto Fire engine crews simultaneously staff an ambulance, called “cross-staffing.” This cross-staffing model allows a fire engine crew to put the fire engine out of service and respond to the medical emergency based on need. Cross-staffing affords us the ability to rely on City of Palo Alto Page 5 County Ambulance resources to respond into Palo Alto to transport EMS patients to the hospital, and consequently exceed the response time standards. Before the cross-staffing model, County Ambulances were averaging sixty (60) responses a month into Palo Alto fire patient transport. The cross-staffing model reduced County Ambulance responses into Palo Alto to less than ten (10) responses a month, resulting in faster response times and a higher service level to the Palo Alto community. Stakeholder Engagement This is an informational report to follow up on Council referral items and has been coordinated internally among departmental parties. Resource Impact This is an information item to follow up on Council referral items and has no fiscal impact. Environmental Impact This is not a project under Section 21065 for purposes of the California Environmental Quality Act (CEQA). . City of Palo Alto (ID # 11965) Finance Committee Staff Report Report Type: Action Items Meeting Date: 2/2/2021 City of Palo Alto Page 1 Council Priority: Fiscal Sustainability Summary Title: Finance Committee Referral: City Council Agenda Contract Approval Protocols Title: Review and Affirm City Council Procedures and Protocols for Contract Approval on City Council Agendas and Forward to the City Council to Accept From: City Manager Lead Department: Administrative Services Recommendation Staff recommends the Committee review and accept this report and affirm current practices for approval of contracts on consent agendas and recommend forwarding this status to the City Council for approval. Discussion On February 1, 2020, the City Council conducted its annual retreat where the Council reviewed the Council Meeting and Agenda Guidelines of the City Council Procedures and Protocols Handbook (Council Handbook) was reviewed. The Council discussed Consent Calendar Categories and the following motion was passed: MOTION: Council Member Tanaka moved, seconded by Vice Mayor DuBois to direct the Finance Committee to come up with proposed thresholds for Council to consider related to Section 2.4.L, Consent Calendar Categories, which determines the eligibility for items to be placed on the Consent Calendar. MOTION PASSED: 4-3 Cormack, Filseth, Fine no Staff engaged the assistance of its Purchasing Special Advisor, Management Partners, to review the Council Handbook, analyze City Council awarded contracts and review average duration times for meetings in Fiscal Years 2020 and 2019, and research typical agency practices. Results of this review can be found in Attachment A. Specifically, Section 2.4.L of the Council Handbook outlines Consent Calendar Categories and describes the Consent Calendar as “the section where administrative and non-controversial items shall be presented. The Mayor and City Manager should be sensitive to high dollar value items and consider placing those items in the action agenda section.” Furthermore, the Consent Calendar section may include administrative matters that include contracts, appointments, approval of applications, and any City of Palo Alto Page 2 other matters. The focus of the analysis was placed on contracts associated with the purchase of goods and services, as defined in the Council Handbook: “A contract for goods, general services, professional services, public works projects, dark fiber licensing contracts or wholesale commodities, purchases, as outlined in the Purchasing Ordinance, provided such contracts represent the customary and usual business of the department as included in the Adopted Budget. Examples include: routine maintenance contracts, annual audit agreement; software and hardware support agreements, janitorial services, copier agreements or postage machine agreements.” (Section 2.4.L.2) Referral Assigned Department Status FY2020 City Council Retreat: Direct the Finance Committee to come up with proposed thresholds for Council to consider related to Section 2.4.L, Consent Calendar Categories, which determines the eligibility for items to be placed on the Consent Calendar. Administrative Services Department Closed Included in the staff report as well as further detailed in Attachment A, staff in consultation with Management Partners, has reviewed the contract approvals by the City Council and the not to exceed limits and whether they were approved as a consent item or action item. Options for potential recommendations that the Finance Committee may consider for the full City Council’s consideration and action: 1) Review the data analysis presented and affirm current practice, 2) Clarify the types of purchase contracts that must be placed on the Consent Calendar or as an Action Item in the City Council Procedures and Protocols Handbook, 3) Implement a contract dollar threshold for items that must be placed on the Consent Calendar or as an Action Item, and/or 4) Consider increasing thresholds for City Council approval of contracts and/or include indexing provisions for these thresholds. City of Palo Alto Page 3 Review and Analysis of Council Agendas City Council Agendas were reviewed and each item, for both the Consent Calendar and Action, were categorized into types of contracts and typical contract actions. Table 1: Contract Types and Actions Types of Contracts Contract Actions Purchase of Goods, Services, and Public Works Construction Initial approval and amendments Wholesale utility commodities, service purchase, and sale Time extensions Intergovernmental Deferrals and removal from agenda Other (employment-related, leases and licensing) Direction to staff, termination Focus of the analysis was placed on contracts awarded for the purchase of goods, services and public works construction. Within this contract type, initial approval and amendments contract action was considered as this type of action has an associated dollar value impact that can be grouped into a potential threshold for Consent Calendar Categories. Table 2: Contracts on Council Agendas Purchase Contracts Other Contracts/Actions Total Scheduled Agenda Items FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 Action Items 3* 4* 11 5 85 83 Consent Calendar 75* 88* 43 31 229 200 Total 78 92 54 36 314 283 Table 2 summarizes discrete agenda items however there may be multiple contracts awarded in some instances (as noted by the asterisk). In FY 2020, a total of 143 purchase contracts were awarded on consent and a total six contracts were awarded as an Action item, one of which was moved to the Consent Calendar. For FY’s 2019 and 2020, City Council agenda items that were initial approval or amendments of purchase contracts respectively total 25 percent and 32 percent of total scheduled agenda items. Other Contracts/Actions includes intergovernmental agreements and wholesale commodity purchases. In addition to the presented in Table 2, Tables 3 and 4 illustrate the average number of purchase contracts on Consent, Action, average elapsed time per Action item and groups these items by dollar amount. City of Palo Alto Page 4 Table 3: Contract and Agenda Item Averages FY 2019 FY 2020 Purchase Contracts on Consent 2.6 3.5 Consent Items per Meeting 6.7 5.9 Average Elapsed Time per Action Item 1:25 1:12 Action Items per Meeting 2.5 2.4 Table 4: Purchase Contracts on Consent by Dollar Threshold Dollar Value FY 2019 FY 2020 Up to $250,000 16 13 $250,001 to $500,000 16 20 $500,001 to $1,000,000 20 18 $1,000,001 to $5,000,000 15 28 Greater than $5,000,000 6 6 Total 73 85 In FY 2020, the average time per Action item was 1 hour and 12 minutes, with the actual time distribution being between 31 minutes and 2 hours and 45 minutes. If a threshold of $1,000,000 were to be selected, for example, based on FY 2020 activity, 34 additional Action items would be added to Council agendas and would result in an additional 40 hours and 48 minutes across all Council meetings throughout the year. In addition to number of agenda items, time average, and grouping purchase contracts by dollar amount, the distribution of these contracts is summarized by month in the below table. Table 6: Contracts on Consent Calendar by Month As noted in the Council Handbook, “the Mayor and City Manager should be sensitive to high dollar value items and consider placing those items in the action agenda section.” Considering this practice and comparing it to potentially assigning a dollar threshold to whether purchase contract be placed as Action, a chart comparing the elapsed time in minutes to the dollar value of the purchase contract was compiled. It should be noted that discussion of these items focused on policy considerations, other City of Palo Alto Page 5 actions, and public comment and the time noted in this chart does not count the time focused on the actual contract approval. Table 7: Dollar Value and Action Agenda Time Duration Based on the above chart, the contract having the lowest dollar value is the Independent Police Auditing contract, totaling $75,000, that went to Council FY 2020; time spent on this item was 122 minutes. In contrast, the largest dollar value contract, New California Avenue Garage, was discussed for 47 minutes and totaled $48.4 million. Using the Independent Police Auditing and Pension Funding Policy items as examples, both with much lower dollar values relative to the other contracts considered, the discussion surrounding these items was focused on policy considerations and public comment. Agency Practices and Observations The City’s current practice is aligned with the most common method used by California Cities, that is to place contracts for approval on the Consent Calendar. These items are typically characterized as administrative and/or routine in nature. Discretion is usually given to the City Manager, in consultation with the Mayor and staff, to determine what contracts should be considered as Action items. Comparable cities were selected through a combination of demographic information and proximity to Palo Alto to review the contract approval process: • Menlo Park • Milpitas • Mountain View • Redwood City • San Jose • San Mateo • Santa Clara • Sunnyvale In reviewing the contract approval practices of the cities listed above, all eight jurisdictions utilize the consent calendar to award contracts. The City’s Purchasing Advisor also reviewed Council agendas from City of Palo Alto Page 6 several other Bay Area cities, all which place contracts on the consent calendar. These cities include Campbell, Cupertino, Daly City, Fremont, Hayward, Pleasanton, Union City and Walnut Creek. While some California cities may have policies or practices that require Council consideration of contracts as action items, it appears to be uncommon. In addition, some cities do not bring certain contracts forward for Council approval if funds are included in the Adopted Budget. A summary of agency trends is summarized in the table below. Table 8: Agency Trends City Practice Mountain View Goods and general service purchases do not require Council approval if budgeted funds are available. Redwood City Approval thresholds can be adjusted annually by lesser of CPI or 2%. San Jose Goods and public works contracts less than $1,000,000 do not require Council approval; approval thresholds can be periodically adjusted by CPI. Santa Clara Goods procured with purchase orders do not require Council approval if budgeted funds are available; increases to award thresholds and indexing anticipated. In reviewing statistics of Council Agenda for the last two fiscal years together with agency trends, the following observations should be noted: Most California cities place contracts on the Consent Calendar. Contracts that are considered administrative and routine in nature are placed on the Consent Calendar. Policies allow for members of the public, Council, and staff to pull items from Consent to Action. Discretion is given to the City Manager, in consultation with Mayor and staff to place items on Consent or Action. Used as an important time management tool. Greater clarity could be provided in the Council Handbook. Current policy language focusing on high dollar value contracts dilutes emphasis on controversial items and/or items of significant public interest that may not come with substantial cost but are more appropriately considered as Action Items. Agency Trends. Trends among the agencies noted increased thresholds for Council approval are being reviewed and that indexing provisions are included in the policy; some have higher thresholds than Palo Alto. Additionally, the periodic indexing of solicitation thresholds is a common practice done by federal and state agencies. Time Management Tool. Placing contracts of a predetermined high dollar value as Action Items will have varying impacts on meeting scheduling and meeting times, and can impact operational effectiveness, with more significant impacts occurring at critical times of the fiscal year. Contracts resulting from competitive solicitations should come before Council when they are ready for award and may have time sensitivity due to grant restrictions, timing for construction or service provision, timely receipt of goods, or expiry. The high number of contracts presented near the end of the fiscal year typically includes expiring contracts that must be renewed. City of Palo Alto Page 7 Stakeholder Engagement This is an informational report to follow up on Council referral items and has been coordinated internally among departmental parties. Resource Impact This is an information item to follow up on Council referral items and has no fiscal impact, however, should recommended action differ from current practices, resources may be impacted. Environmental Impact This is not a project under Section 21065 for purposes of the California Environmental Quality Act (CEQA). . Attachments: • Attachment A: Consideration of Potential Dollar Thresholds for Treating Contract Awards as Action Items on City Council Agendas City of Palo Alto Finance Committee Consideration of Potential Dollar Thresholds for Treating Contract Awards as Action Items on City Council Agendas December 15, 2020 Pete Gonda, Special Advisor ATTACHMENT A Areas of Focus 2 Background on Council Referral and Typical Agency Practices Analysis of Palo Alto Contracts for Two Fiscal Years Observations Gleaned from the Analysis A B C ATTACHMENT A City Council Referral 3 Research to include: •Number of contracts awarded and dollar “buckets” •Review of other City policies •Projection of additional Action items to be added to Council agendas if Consent Calendar approvals were limited by dollar value Council Member Tanaka moved, seconded by Vice Mayor DuBois, to direct the Finance Committee to come up with proposed thresholds for Council to consider related to Section 2.4.L, Consent Calendar Categories, which determines the eligibility for items to be placed on the Consent Calendar. ATTACHMENT A City Council Procedures and Protocols Handbook 4 “The consent calendar portion is the section where administrative and non- controversial items shall be presented. The Mayor and City Manager should be sensitive to high dollar value items and consider placing those items in the action agenda section.” ATTACHMENT A Typical Consent Calendar Items 5 1.Ordinances and Resolutions 2.Administrative Matters Including Contracts, Appointments, Approval of Applications, and Any Other Matter 3.Request to Refer Items to Any Council Standing Committee, Committee, Board, Commission or Council Appointed Officer 4.Items Unanimously Recommended for Approval by a Council Committee Unless Otherwise Recommended by the Committee, Mayor, City Attorney or City Manager 5.Items Recommended for Approval by Council-Appointed Boards and Commissions ATTACHMENT A Typical Consent Calendar Items: Contracts 6 •Contracts for which the subject or scope of work has been previously reviewed by the City Council. •A contract for goods, general services, professional services, public works projects, dark fiber licensing contracts or wholesale commodities, purchases, as outlined in the Purchasing Ordinance, provided such contracts represent the customary and usual business of the department as included in the Adopted Budget. Examples include:routine maintenance contracts, annual audit agreement; software and hardware support agreements, janitorial services, copier agreements or postage machine agreements. ATTACHMENT A Typical Agency Practices 7 ➢Most common method by California cities for approving contracts is to place them on the Consent Calendar ✓Characterized as administrative and/or routine in nature ✓Discretion is usually given to the City Manager, in consultation with Mayor and staff, to determine what contracts are considered as Action items ATTACHMENT A Typical Agency Practices 8 ➢Management Partners reviewed procedures for eight Bay Area cities ➢Cities selected through combination of demographic information, proximity to Palo Alto ATTACHMENT A Typical Agency Practices 9 All agencies reviewed use the Consent Calendar for contract approvals: Menlo Park, Milpitas, Mountain View, Redwood City, San Jose, San Mateo, Santa Clara, Sunnyvale ATTACHMENT A Trends in Agency Practices 10 ✓Trends point to increased thresholds for Council approval and including indexing provisions ✓Some cities do not bring certain contracts forward for Council approval if funds are included in Adopted Budget ATTACHMENT A Agency Trends 11 City Practice Mountain View Goods, general services purchases do not require Council approval if budgeted funds are available Redwood City Approval thresholds adjusted annually by lesser of CPI or 2% San Jose Goods and public works contracts less than $1,000,000 do not require Council approval; approval thresholds periodically adjusted by CPI Santa Clara Goods procured with purchase orders do not require Council approval if budgeted funds are available; increases to award thresholds and indexing anticipated ATTACHMENT A Types of Contracts Purchase of Goods, Services and Public Works Construction Wholesale utility commodities, services purchase and sale Intergovernmental Other (employment-related, leases and licensing) 12 ATTACHMENT A Contract Actions Initial approval and amendments Time extensions Deferrals and removal from agenda Direction to staff, termination 13 ATTACHMENT A Contracts on Council Agendas 14 Purchase Contracts Other Contracts, Actions Total Scheduled Agenda Items FY2018-19 FY2019-20 FY2018-19 FY2019-20 FY2018-19 FY2019-20 Action Items 3*4*11 5 85 83 Consent Calendar 75*88*43 31 229 200 Total 78 92 54 36 314 283 *Represents discrete agenda items even though multiple contracts may have been awarded in some instances. In FY 2019/20, a total of 143 purchase contracts were awarded on Consent; 6 total purchase contracts were awarded from the Action Calendar, with one moved to Consent. ATTACHMENT A Other Contracts –FY 2019-20 15 ➢14 intergovernmental agreements ✓Cable-related, cost-sharing, grants, estimated costs/fiscal impacts ✓Three with direct award costs between $112,000 and $800,000 ➢Four wholesale utility commodities and services purchase and sale agreements ✓Annual expense cap of $5 million, no revenue limit (1) ✓Regulatory representation, program management (3) ➢16 of 18 on Consent ATTACHMENT A Palo Alto Contract Analytics -Two Fiscal Years 16 FY 2018-19 Average FY 2019-20 Average Purchase Contracts on Consent 2.6 3.5 Consent Items per Meeting 6.7 5.9 Average Elapsed Time per Action Item 1:25 1:12 Action Items per Meeting 2.5 2.4 ATTACHMENT A Contracts on Consent Calendar by Month 17 6 2 7 4 8 2 2 3 9 4 26 8 6 14 8 7 4 11 2 2 3 20 July August September October November December January February March April May June FY 2018-19 FY 2019-20 0 ATTACHMENT A Total Action and Consent Items by Month 18 1 22 10 26 19 34 7 14 10 16 16 54 0 23 11 25 19 19 13 17 9 8 14 42 3 11 2 6 6 10 8 7 4 9 5 14 0 3 7 5 7 8 9 8 7 4 5 20 4 33 12 32 25 44 15 21 14 25 21 68 0 26 18 30 26 27 22 25 16 12 19 62 FY 2018-19 FY 2019-20 Consent Action ATTACHMENT A Palo Alto Contract Analytics: Purchase Contracts 19 Purchase Contracts on Consent by Dollar Threshold Dollar Value FY 2018-19 FY 2019-20 Up to $250,000 16 13 $250,001 to $500,000 16 20 $500,001 to $1,000,000 20 18 $1,000,001 to $5,000,000 15 28 Greater than $5,000,000 6 6 Total 73 85 ATTACHMENT A “Number of additional Action items to be added to Council agendas if Consent Calendar approvals were limited by dollar value “ •Average of 1:12 hours per Action Item, with actual distribution between 0:31 and 2:45 hours •Number of Consent Calendar contracts greater than $1,000,000 = 31 •Average number of Consent Calendar Items per meeting greater than $1,000,000 = 3 •Uneven distribution of Consent Calendar contracts greater than $1,000,000: Zero to 8 across all meetings; 1 to 12 by month 20 FY 2019-20 ATTACHMENT A Hwy 101 Bike Bridge, 41 Minutes, $15,549,772 Pension Funding Policy, 92 Minutes, $230,000 Independent Police Auditing, 122 Minutes, $75,000 New California Avenue Garage, 47 Minutes, $48,396,817 GreenWaste Agreement, 99 Minutes, $22,183,000 Downtown Garage Final EIR, 120 Minutes, $2,287,866 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 45,000,000 50,000,000 0 20 40 60 80 100 120 140 Do l l a r A m o u n t ( $ ) Elapsed Time (Minutes) RPP Old Palo Alto, 43 Minutes, $3,223,857 Dollar Value and Agenda Item Duration (Action Calendar Contracts) 21 FY 2018-19 FY 2019-20 Legend ATTACHMENT A Observations 22 1. Most California cities place contracts on the Consent Calendar. •Considered administrative and routine in nature. •Allow for members of the public, Council and staff to pull items. •Provide discretion to the City Manager to consult with Mayor and staff to place controversial items, high value contracts and contracts with significant public interest on the Action agenda. •Used as an important time management tool. ATTACHMENT A Observations from Analysis 23 2. Greater clarity could be provided in the Council Procedures and Protocols Handbook. •Current policy language focusing on high dollar value contracts dilutes emphasis on controversial items and/or items of significant public interest that may not come with substantial cost but are more appropriately considered as Action Items. ATTACHMENT A Observations from Analysis 24 3. Trends point to increasing staff level contract approval thresholds (and indexing them) that would reduce the number of contracts considered by City Councils. •Reflection of the impact of inflation. •Viewed as efficiency tool at all levels of government. ATTACHMENT A Observations from Analysis 25 4. Placing contracts of a predetermined high dollar value on the Action Calendar will have varying impacts on meeting scheduling and meeting times, as well as operational effectiveness, with more significant impacts occurring at critical times of the fiscal year. •Contracts resulting from competitive solicitations come before Council when they are ready for award and may have time sensitivity due to grant restrictions, timing for construction or service provision, timely receipt of goods, or expiry. •The high number of contracts presented near the end of the fiscal year typically include expiring contracts that must be renewed. ATTACHMENT A Other Practical Considerations 26 •Analysis focused on purchase contracts of goods, services and public works construction with enumerated dollar values and does not include: ▪Contracts with other governmental agencies ▪Contracts related to hiring or wages, hours and working conditions ▪Purchase and sale agreements for wholesale utility commodities and services ▪Revenue generating contracts or bond financings •Most of these items are placed on the Consent Calendar and can have significant fiscal impacts. •Moving these types of contracts to the Action Calendar based on maximum dollar value of fiscal impact will further impact meeting scheduling. ATTACHMENT A Questions and Comments Pete Gonda, Special Advisor| pgonda@managementpartners.com ATTACHMENT A