HomeMy WebLinkAbout1999-10-25 City Council (13)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
OCTOBER 25, 1999 CMR: 388:99
ANTICIPATED CHANGES TO THE 2000-01 FISCAL YEAR
BUDGET AND ANALYSIS OF ANTICIPATED EXPENDITURES
ON COUNCIL PRIORITIES
This is an information report and no Council action is required.
DISCUSSION
In June 1999, the Council adopted a two-year budget. The budget for the second year,
fiscal year 2000-01, was a spending plan, which was adopted-in-concept by the Council.
Under a traditional two-year budget, relatively minor adjustments are made to the second
year spending plan. In previous years, the City has permitted the types of changes more
typical of new budgets rather than budgets that have been approved in-concept. In
keeping with a traditional approach to the second year of a two year budget, the
adjustments staff plans to propose to the 2000-01 Budget will include only changes
which are mandatory, or of critical importance to the City.
General Fund Summary
Start-has prepared a preliminary 2000-01 General Fund Summary (Attachment A) using
the most recent revenue and expenditure data, which includes Budget Amendment
Ordinances approved in 1999-00. The revenues reflected in the attachment have been
adjusted, based on preliminary receipts for 1999-00, and indicate projected trends for
2000-01. In 2000-01, revenues are projected to increase by $1.9 million (Attachment B),
primarily due to revised projections of property tax receipts, transient occupancy tax
receipts and other taxes and fines. Expenditures are increasing by $.4 million
(Attachment C) as a result of the 1999-00 management compensation adjustment.
Attachment C also shows the Budget Amendment Ordinances approved in 1999-00.
Based on revenue and expenditure projections, the General Fund is expected to have a
surplus of $3.3 Million in 2000-01. Any financial surplus would be handled in
CMR: 388:99 Page 1 of 5
accordance with the Council-approved General Fund reserve policy, which includes
contributions to the Infrastructure Reserve Fund.
General Fund Changes
Start anticipates the following changes to the 2000-01 proposed Budget:
Revenues are being adjusted to reflect the latest projections.
Any Council approved changes to the methodology for Utility Fund transfers to
the General Fund will be applied to the 2000-01 proposed budget.
Salaries and benefits have been established for one of the bargaining groups. Staff
will negotiate with the remaining bargaining groups and any agreement reached
will be includedin the 2000-01 proposed budget, with the goal of keeping the City
a competitive employer with other public agencies.
Proposed staffing additions to the 2000-01 proposed budget must result from
health and safety issues, legal and regulatory mandates, or responses to Council-
approved programs.
As information is available from the Palo Alto Medical Foundation/South of
Forest Avenue (PAMF/SOFA) coordinated area plan, recommendations for both
operating and capital budget programs will be included in the proposed budget.
Any program approved by Council during 1999-00 that is ongoing will be
included in the 2000-01 proposed budget. Possible programs include the
Infrastructure Management Plan staffing requirements beyond the current
placeholder ($300,000), the IT Strategic Plan beyond the current placeholder
($200,000), Historic Preservation Program costs beyond current placeholder
($140,000), and a work plan for the Children’s Theatre current placeholder
($50,000).
Enterprise Fund Changes
The assumptions tor the Enterprise budget differ as a result of the funding source. The
Enterprise Funds generate income via fees or rates, depending on needs of the specific
fund. The following changes are anticipated:
Any Council approved changes to the methodology for Utility Fund transfers to
the General Fund, including any prior year adjustments, will be applied to the
proposed budget presented to Council.
CMR: 388:99 Page 2 of 5
The proposed Operating Budget for the Enterprise Funds will include continuing
recommendations regarding any changes in rate structures or programs.
Rate adjustments for the Refuse, Water and Storm Drainage Funds may be
proposed, taking into account the restrictions imposed by Proposition 218.. The
fee increases in the Storm Drainage Fund require voter approval, which could
occur in the spring 2000 elections.
The Utility Funds will not be subject to the same General Fund CIP recommended
guidelines. The 2000-05 Utility Funds CIP will be prepared as a traditional five-
year CIP.
Council Priorities
In addition to describing the anticipated changes to the 2000-01 Budget approved-in-
concept, this report also provides information on the resource commitments made in the
2000-01 Budget to Council’s adopted priorities. Previously, staff has provided separate
reports for Council Priorities and Budget Guidelines. In December 1997, Council
directed staff to more fully integrate Council priorities into the Mission-Driven Budget
process, starting in 2000-01. Therefore, beginning this year, staff is providing a single
report that addresses both Council Priorities and guidelines as to the anticipated changes
as two critical pieces of the budget process.
The Council’s current priorities -traffic management and safety, the infrastructure plan
and implementation of the Comprehensive Plan - were adopted in October 1997 through
a Council study session process. The 2000-01 budget will continue the City’s focus on
these Council Priorities.
Staff has prepared an introductory analysis of the 2000-01 expenses related to the
Council priorities, as well as major expenditures on other significant programs (See
Attachment D), with the intent of providing Council with a better understanding of the
level of resources currently committed to these priorities and programs in the 2000-01
Adopted-in-Concept Budget. This analysis is staffs initial effort to identify these
expenses and tracking systems are not currently in place to identify all costs associated
with Council priorities. Consequently, the analysis in Attachment D reflects substantial,
identifiable expenses specifically related to action on the Priorities and may not be
inclusive of all expenses. In the future, staff plans to provide a more precise tracking of
such expenses.
This analysis in Attachment D, is based on the 2000-01 Adopted Budget, as well as
approved additions since the Budget’s adoption. The allocation of staff time is generally
not included in this analysis (specifically in the Comprehensive Plan Implementation
Priority), except in those instances in which new or existing positions are explicitly
CMR: 388:99 Page 3 of 5
linked to Council priorities. A summary of the priorities and expenditures is provided
below.
Traffic Management and Safety
The following objectives were identified when this priority was adopted:
Reduce risk to pedestrians, bicyclists and drivers due to increased incidents
speeding and other traffic violations.
of
Address issues of speed, traffic safety, congestion and parking by means such as
enhanced enforcement, driver education and physical changes to the street
environment such as traffic calming devices.
¯Evaluate transportation altematives, for commuter and non-commuter alike, including
the provision of a Palo Alto shuttle bus system, as a way to lessen traffic volumes.
¯Continue to work cooperatively with the school district in dealing with school
commute safety.
As detailed in Attachment D, major General Fund top line expenditures on traffic
management and safety in 2000-01 are estimated at $2.6 million. Capital expenditures
related to this priority are anticipated to be $.6 million. The projects, activities and
positions associated with Traffic Management and Safety include: the employee
commute alternatives program; the commute coordinator position; the traffic enforcement
program; traffic control maintenance and local and collector traffic calming projects. The
Palo Alto shuttle bus system is included under the Comprehensive Plan Implementation
priority.
Comprehensive Plan Implementation
When this priority was adopted, it was acknowledged that the Comprehensive Plan was
the planning guide for the future of Palo Alto, addressing several significant City issues,
including traffic, safety, housing and community design. Council’s goal in adopting a
focus on the Comprehensive Plan as a priority was to determine the manner in which the
Plan’s policies and programs would be implemented and undertake any necessary
ordinance changes.
Significant, identifiable General Fund expenditures on Comprehensive Plan
implementation are estimated to be $1.1 million in 2000-01. Capital Improvement
Program (CIP) Projects related to the implementation of the Plan are expected to total $.6
million in 2000-01. Areas of spending include: the development of economic resources
plans and materials, implementation of the Information Technology Strategic Plan,
library automation, and an update of the zoning ordinance.
CMR: 388:99 Page 4 of 5
Infrastructure Plan
When the Infrastructure Plan was identified as a priority, Council emphasized the
importance of restoring and maintaining the City’s public infrastructure, including
buildings, parks, open space, streets, sidewalks and other public paths and bikeways.
Council’s goal in focusing on the Infrastructure Plan was to establish priorities and
financing strategies for plan implementation.
In 2000-01, CIP projects are expected to total $7.4 million, including open space, parks,
medians, buildings, sidewalks, and street maintenance. There is a $.3 million placeholder
included in the Budget to address staffing needs.
Other Major Projects
Other major projects identified in the 2000-01 budget include Utilities risk management,
ongoing Development Center costs, loan to the Storm Drainage Fund, Emergency Plan
Implementation, a citywide user fee study, and ongoing Palo Alto Unified School District
support.
RESOURCE IMPACT
The fiscal impact of the anticipated changes is unknown at this time.
POLICY IMPLICATIONS
The Proposed 2000-01 Budget
identified in this report.
will be consistent with the changes and priorities
ATTACHMENTS
Attachment A: 2000-01 Projection General Fund Summary
Attachment B: 2000-01 Revenue Projection Assumptions
Attachment C: Budget Amendment Ordinances Impacting General Fund Reserves
Approved To-Date in 1999-00
Attachment D: 2000-01 Resource Allocation on Council Priorities and Major Projects
PREPARED BY:Audrey Seymour, Senior Executive Assistant
Lalo Perez, Budget Manager
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
~rec tARLor ,Yt~d mS¢/~tive Services
~ ty Manager
CMR: 388:99 Page 5 of 5
Revenues
Total Revenues
Plus Operating Transfers In
From Infrastructure Reserve
Total Source of Funds
Expenditures
Attachment A
2000-01 Projection General Fund Summary (S000’s)
199~)-00 1999-00 Changes % Change 2000-01 2000-01 Changes
Adopted Projected Projected Adopted in Budget Projected
Budget Budget To Adopted Concept Guidelines to Adopted
in Concept
89,755 91,621 1,866 2.1%92,568 94,476 1,908
12,988 12,988 0 0.0%12,900 12,900 0
1,161 1,161 0 0.0%1,156 1,156 0
$103,904 $105,770 $1,866 1.8%$106,624 $108,532 $1,908
09/21/99
% Change
2.1%
0.0%
0.0%
1.8%
Total Expenditures
Operating Transfers Out
To Infrastructure Reserve
Total Use of Funds
Net Surplus/(Deficit)
94,577 95,159 582 0.6%96,617 97,049 432
8,165 8,355 190 2.3%7,591 7,591 0
213 213 580 614 34
$102,955 $103,727 772 0.7%$104,788 $105,254 1,061
$949 $2,043 $1,094 115.3%$1,836 $3,278 $1,442
3.9%
0.0%
5.9%
1.0%
78.6 %
Attachment B
2000-01 Revenue Projection Assumptions
Sales Taxes
A 1.4 percent growth rate over the adopted 1999-00 budget.
Property Taxes
An 11.1 percent growth rate over the adopted 1999-00 budget.
Utility Users Tax
Consistent with the latest projected Utility rate changes and projected sales. Telephone revenues
are projected to increase 4.0 percent above the adopted 1999-00 budget.
Transient Occupancy Tax
A 12.8 percent growth rate over projected, actual 1999-00 revenues is anticipated for 2000-01.
This growth includes estimated annual revenues from the new hotel adjacent to the Sheraton.
Other Taxes and Fines
This category includes the documentary transfer tax, motor vehicle in-lieu tax, and City violation
and fine revenue:
A weighted, 16.3 percent growth rate over 1999-00 adopted revenues is anticipated for 2000-01.
Attachment C
Budget Amendment Ordinances Impacting General Fund Reserves Approved To Date in 1999-00
Estimated Beginning Budget Stabilization Reserve (BSR)
Balance
Adopted Budget Addition to BSR
Downtown Urban Design Improvements, CIP 19608
Downtown Parking Structure Feasibility Study, CIP 19530
Salary and Benefit Increases Retroactive to July 1, !999 for
Management and Confidential Employees
City Manager Executive Recruitment
Friends of the Palo Alto Library Grant
Arts Council of Santa Clara County Grant
Palo Alto Art Center Foundation Donation
Cost of Sound Wall for Tennis Facility at 3005 Middlefield
($120,349)
($70,000)
(,$432,200)
($26,000)
($58,000)
($5,407)
($ I 0,000)
($50,000)
$58,000
$5,407
$10,000
$18,877,888
$1,214,000
($120,349)
($70,000)
($432,200)($432,200)
($26,000)
$0
$0
$0
($50,000)
BSR Balance After BAO’s $19,393,339
Attachment D
General Fund
2000-01 Budget
iPro~ect
Traffic Management Comprehensive Plan
and Safety Implementation
Infrastructure
Plan
Major Projects
Ongoin~l
Implementing Comp Plan references such as
Enhancement of the Cable Scroll, posting of
public information on the Web, and the PAMC
including contract costs and staff salaries. (City
Clerk)
Economic Resource Plan (City Manager)
Development and printing of the
Comprehensive Plan Status Report.
(Adminstrative Services)
Implementation of IT Strategic Plan.
(Administrative Services)
Cable CO-OP franchise renewal.
(Adminstrative Services)
Disaster recovery site for the Emergency Plan
Implementation. (Adminstrative Services)
Utilities Risk Management program.
(Adminstrative Services)
Various Comp Plan references indicated on
Form 2A that were eventually approved in
Adopted Budget (Community Services)
Traffic Engineering ($165K), Traffic Studies
($78K). (Planning)
Commute Coordinator. (Planning)
Transportation and parking management, traffic
signals, bicycle programs, mobility alternatives
and school safety. Offset by 563K revenue.
(Planning)
Local Shuttle Bus System. Pending
revenue/grants to continue service. (Planning)
Zoning ordinance update (5100K); customer
surveys ($20K); coordinated area plan ($100K).
(Planning)
Development Center ongoing costs (Planning)
Employee Commute Altematives Programs
(Human Resources)
Traffic Enforcement Program; addition of Traffic
Officer (Police)
School safety activities and traffic complaint
resolution (Police)
Animal Services. Revenue $317K. (Police)
Volunteer Program. (Police)
$243,155
$70,000
$282,162
5101,338
S1,358,823
$178,481
518,000
$33,000
$11,900
$200,000
5198,178
S100,000
$220,000
$42,000
$130,606
$84,047
$90,000
S125,000
$390,700
Youth Services. (Police)
Traffic control maintenance (Public Works)
Infrastructure Staffing
Loan to the Storm Drainage Fund
Citywide User Fee Study
Ongoing PAUSD Support
Total Operating Budget
Capital Improvement Program ~
$384,003
$2,617,962
$62,519
$1,100,250
Geographical Information System (GIS)
Adminstrative Services)
Open Space (Infrastructure Plan CIPs)
(Community Services)
Medians (Infrastructure Plan CIPs) (Community
Services)
Parks (Infrastructure Plan CIPs) (Community
Services)
Library Automation (CIP Project 19418)
(Community Services)
Buildings and facilities (Infrastructure Plan
ClPs) (Public Works)
Sidewalks (Infrastructure Plan CIPs) (Public
Works)
Street Maintenance (Infrastructure Plan CIPs),
;1.25M offset from County (Public Works)
Preservation Programs.
Local and Collector Traffic Calming. (10026)
El Camino Safety Improvements (19523)
School Commute Safety Improvements (19813)
Arastradero Road Bike Lane Improvements.
Offset by $380K ~n grants. (19815)
Total Capital Improvement Program
Overall Totals
$100,000
$15,000
$85,000
$420,000
$483,750
$150,000
$300,000
$300,000
$353,000
$156,000
$1,035,000
$1,059,000
$1,353,000
$3,401,369
$150,000
$30,00O
$5,830,000
$6,615,700
$150,000
$620,000
$3,237,962
$633,750
$1,734,000
$7,357,369
$7,657,369
$150,000
$6,765,700