HomeMy WebLinkAbout2023-08-15 Finance Committee Agenda PacketFINANCE COMMITTEE
Regular Meeting
Tuesday, August 15, 2023
Community Meeting Room & Hybrid
5:30 PM
Pursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference or in person. To maximize public safety
while still maintaining transparency and public access, members of the public can choose to
participate from home or attend in person. Information on how the public may observe and
participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if
attending in person. The meeting will be broadcast on Cable TV Channel 26, live on
YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media
Center https://midpenmedia.org.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/99227307235)
Meeting ID: 992 2730 7235 Phone: 1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an
amount of time determined by the Chair. All requests to speak will be taken until 5 minutes
after the staff’s presentation. Written public comments can be submitted in advance to
city.council@CityofPaloAlto.org and will be provided to the Council and available for inspection
on the City’s website. Please clearly indicate which agenda item you are referencing in your
subject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,
the Clerk will have them shared at public comment for the specified item. To uphold strong
cybersecurity management practices, USB’s or other physical electronic storage devices are not
accepted.
CALL TO ORDER
PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda.
ACTION ITEMS
1.Staff Request for Finance Committee discussion for Chief Financial Officer (CFO)
Recruitment and input of candidate’s key characteristics
2.Discussion and Finance Committee Recommendation on Alternative to Manage Winter
2023‐24 Natural Gas Price Uncertainty
FUTURE MEETINGS AND AGENDAS
Members of the public may not speak to the item(s)
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. For in person public comments please complete a speaker request card located on the
table at the entrance to the Council Chambers and deliver it to the Clerk prior to
discussion of the item.
3. Spoken public comments using a computer or smart phone will be accepted through
the teleconference meeting. To address the Council, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
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. Or download the Zoom application onto
your smart phone from the Apple App Store or Google Play Store and enter in the
Meeting ID below.
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.
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.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
4. 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
Council. You will be advised how long you have to speak. When called please limit your
remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 992‐2730‐7235 Phone: 1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
1 Regular Meeting August 15, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
FINANCE COMMITTEERegular MeetingTuesday, August 15, 2023Community Meeting Room & Hybrid5:30 PMPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/99227307235)Meeting ID: 992 2730 7235 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,
the Clerk will have them shared at public comment for the specified item. To uphold strong
cybersecurity management practices, USB’s or other physical electronic storage devices are not
accepted.
CALL TO ORDER
PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda.
ACTION ITEMS
1.Staff Request for Finance Committee discussion for Chief Financial Officer (CFO)
Recruitment and input of candidate’s key characteristics
2.Discussion and Finance Committee Recommendation on Alternative to Manage Winter
2023‐24 Natural Gas Price Uncertainty
FUTURE MEETINGS AND AGENDAS
Members of the public may not speak to the item(s)
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. For in person public comments please complete a speaker request card located on the
table at the entrance to the Council Chambers and deliver it to the Clerk prior to
discussion of the item.
3. Spoken public comments using a computer or smart phone will be accepted through
the teleconference meeting. To address the Council, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
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. Or download the Zoom application onto
your smart phone from the Apple App Store or Google Play Store and enter in the
Meeting ID below.
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.
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.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
4. 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
Council. You will be advised how long you have to speak. When called please limit your
remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 992‐2730‐7235 Phone: 1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
2 Regular Meeting August 15, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
FINANCE COMMITTEERegular MeetingTuesday, August 15, 2023Community Meeting Room & Hybrid5:30 PMPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/99227307235)Meeting ID: 992 2730 7235 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance tocity.council@CityofPaloAlto.org and will be provided to the Council and available for inspectionon the City’s website. Please clearly indicate which agenda item you are referencing in yoursubject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received,the Clerk will have them shared at public comment for the specified item. To uphold strongcybersecurity management practices, USB’s or other physical electronic storage devices are notaccepted.CALL TO ORDERPUBLIC COMMENT Members of the public may speak to any item NOT on the agenda.ACTION ITEMS1.Staff Request for Finance Committee discussion for Chief Financial Officer (CFO)Recruitment and input of candidate’s key characteristics2.Discussion and Finance Committee Recommendation on Alternative to Manage Winter2023‐24 Natural Gas Price UncertaintyFUTURE MEETINGS AND AGENDAS
Members of the public may not speak to the item(s)
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to city.council@cityofpaloalto.org.
2. For in person public comments please complete a speaker request card located on the
table at the entrance to the Council Chambers and deliver it to the Clerk prior to
discussion of the item.
3. Spoken public comments using a computer or smart phone will be accepted through
the teleconference meeting. To address the Council, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
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. Or download the Zoom application onto
your smart phone from the Apple App Store or Google Play Store and enter in the
Meeting ID below.
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.
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.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
4. 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
Council. You will be advised how long you have to speak. When called please limit your
remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 992‐2730‐7235 Phone: 1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
3 Regular Meeting August 15, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
Item No. 1.Page 1 of 3
Finance Committee
Staff Report
From: Kiely Nose, Assistant City Manager
Meeting Date: August 15, 2023
TITLE
Staff Request for Finance Committee discussion for Chief Financial Officer (CFO) Recruitment
and input of candidate’s key characteristics
RECOMMENDATION
This item is for the Finance Committee discussion and feedback; no action necessary.
BACKGROUND
The Administrative Services Director/CFO position became vacant when the incumbent Kiely
Nose was promoted to the Assistant City Manager position after serving as the Administrative
Services Director/CFO for 3 ½ years. Staff is preparing to launch this executive recruitment and
receiving the Finance Committee feedback of key characteristics will help guide in the
identification of potential candidates.
Human Resources has a current contract with Executive Recruiter Teri Black & Company. Teri
Black will lead the discussion with the Finance Committee and attain feedback to recruit for a
new CFO.
ANALYSIS
The Chief Financial Officer/Administrative Director role is specified in the City’s Municipal Code.
Palo Alto Municipal Code (section 2.08.150) includes the following responsibilities for the
Administrative Services Department Director:
(1) Provide administrative support for the finance committee of the city council;
(2) Management and preparation of the city's budget reports in coordination with the
city manager and in accordance with the requirements set forth in the Municipal Code and City
Charter, includes analysis and review of citywide revenue and expenses and departmental
budget requests;
(3) Provide analytical resources for studies on organization, staffing utilization,
management and procedures for the city, in order to provide cost-effective municipal services;
Item 1
Staff Report
Packet Pg. 4
Item No. 1.Page 2 of 3
(4) To participate in intermediate and long-range financial planning strategies and to
develop and recommend methods for financing city programs and projects;
(5) Manage production of the city's annual financial reports, general-purpose financial
statements, and comprehensive annual financial report in accordance with city ordinances, legal
requirements and generally accepted accounting principles:
(A) generate appropriate financial reports as required by county, state and
federal agencies;
(B) coordinate financial audit activities with appropriate parties (internal and
external).
(6) Administer the procurement of supplies, materials and equipment and contracts for
general services for the city. Control emergency purchasing in accordance with approved
procedures when centralized procurement is impracticable;
(7) Manage and complete the accounts payable and payroll processes;
(8) Operate and maintain the warehouse and storage facilities of the city;
(9) Administer the city's responsibilities regarding surplus property;
(10) Provide centralized mail and messenger services and printing and other duplicating
services for all city departments;
(11) Administer the investment of city funds and banking agreements in accordance
with city policy and state law;
(12) Administer and manage the issuance of debt by the city or financing authority
entities as may be formed by the city from time to time;
(13) Administer and enforce all ordinances and regulations of the city relating to the
imposition and collection of city taxes and other miscellaneous accounts receivables, to provide
revenue collections services and to collect delinquent receivables;
(14) Administer and supervise real property such as secure easement titles and leases,
negotiate for the purchase or disposition of real property on behalf of the city, and manage all
property owned by the city and leased to other persons or agencies;
(15) Perform or cause to be performed all duties required by this code or other law of
the director of finance, tax administrator, manager of purchasing, supervisor of revenue
collections, chief financial officer, city treasurer and city controller;
(16) To perform such other duties as may be required.
This position is also responsible for a number of policies and procedures internally including but
not limited to: travel, cash handling, loans/debt, gifts, investments, surplus property and assets,
user fee cost recovery policy, employee reimbursements, and long term benefits funding policy
(formerly pension funding policy).
Input and feedback gathered from the Finance Committee and members of the public will assist
Teri Black & Company to develop the recruitment brochure as well as to screen potential
candidates. The goal is to open the recruitment in September.
Item 1
Staff Report
Packet Pg. 5
Item No. 1.Page 3 of 3
FISCAL/RESOURCE IMPACT
An executive recruitment for this role is within existing contract authority and salary savings
from the vacant position will be sufficient to provide the funding necessary.
ATTACHMENTS
Attachment A: FY 2024 Proposed Budget Administrative Services Department
Report #: 2308-1864
Item 1
Staff Report
Packet Pg. 6
ADMINISTRATIVE SERVICES
CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET 181
Administrative ServicesMission Statement
The Administrative Services Department
strives to provide proactive financial and
analytical support to City departments and
decision-makers, and to safeguard and facili-
tate the optimal use of City resources.
Purpose
The purpose of the Administrative Services
Department is to provide excellent customer
service to decision-makers, the public,
employees, and City departments; provide
analytical, organizational, and administrative
support for a wide variety of projects; record,
monitor, and protect City assets in a respon-
sible manner; provide essential financial
management and forecasting reports; and
prepare and present financial reporting to
various committees and City Council.
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
Packet Pg. 7
ADMINISTRATIVE SERVICES
182 • CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET
ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER
%!(5ƫ+/!
ADMINISTRATION
1.00 Administrative Assistant
0.50 Senior Management Analyst
āċĀĀƫƫƫƫƫ
* #!)!*0ƫ* (5/0
āċĀĀƫƫƫƫƫ )%*%/0. 0%2!ƫ//+ % 0!ƫ
INVESTMENT & DEBT
0.60 Manager of Treasury, Debt
Investment
0.40 Senior Management Analyst
ƫĂĀĂąƫ ƫ
5ćċĀĀ Full-Time
ĀċĊĉ Hourly
This organizational chart represents
citywide Full-Time Equivalents (FTEs) for
this department. The Department
Summary tables summarize FTEs by
position allocation
REAL ESTATE
1.00 Real Property Manager
1.00 Senior Management Analyst
1.00 Assistant Director
ACCOUNTING
1.00 Finance Manager
GENERAL LEDGER
1.00 Senior Accountant
1.00 Accountant
1.00 Lead Account Specialist
ENTERPRISE FUND
1.00 Senior Accountant
1.00 Accountant
1.00 Account Specialist
ACCOUNTS PAYABLE
1.00 Senior Accountant
1.00
PAYROLL
1.00 Senior Accountant
1.00 Accountant
2.00 Payroll Analyst
PURCHASING & CONTRACTS
1.00 Chief Procurement Officer
ą.Ā0 Contract Administrator
Ă.00
2.00
15!.
Senior Buyer
OFFICE OF MANAGEMENT AND BUDGET
2.00 Budget Manager
1.00 Administrative Associate III
2.00 Senior Management Analyst
1.00 Management Analyst
1.00 Assistant Director
REVENUE COLLECTIONS
1.00 Manager of Revenue Collections
2.00 Lead Account Specialist
5.Ā0 Account Specialist
STORES WAREHOUSE
1.00 Warehouse Supervisor
1.00 Lead Storekeeper
ą.00 Storekeeper
RISK MANAGEMENT
0.40 Manager of Treasury, Debt &
Investment
0.10 Senior Management Analyst
PRINT & MAIL SERVICES
2.00 Offset Equipment Operator
1.00 %.! 0+.
1.00
Lead Account Specialist
Account Specialist
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
Packet Pg. 8
ADMINISTRATIVE SERVICES
• CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET 183
Description
The Administrative Services Department (ASD) is responsible for the following
functions:
ADMINISTRATION
Provides financial, analytical, budget, strategic, and administrative support services for the department and
organization.
ACCOUNTING
Performs financial transactions and provides accurate, timely, and reliable financial information for internal
and external customers, including vendor payments, customer billing, payroll, and financial reporting.
PURCHASING AND CONTRACTS
Facilitates negotiations, purchasing, and contracting needs in a timely, efficient, and customer-oriented
manner.
OFFICE OF MANAGEMENT AND BUDGET (OMB)
Oversees the citywide operating and capital budget preparation, review, and analysis, performance mea-
sures, and budget monitoring. In addition, prepares the long-range financial forecast and provides inde-
pendent analytical support to the organization.
PROPERTY MANAGEMENT AND ACQUISITION
Provides asset management, acquires property rights, manages the leasing of City properties, prepares
real estate agreements, completes easement acquisitions/vacations, negotiates real estate agreements,
and provides real estate services citywide.
TREASURY AND REVENUE COLLECTIONS
Treasury safeguards and invests the City’s portfolio, forecasts major General Fund tax revenues, issues and
manages debt, and performs Utility Risk Management oversight. Revenue Collections collects payment
revenue and provides customer support for parking permits and payment transactions. Provides print shop
services to departments and warehouse services, including logistics, for the City’s Electric, Water, Gas, and
Wastewater Utilities, as well as for Public Works and the Regional Water Quality Control Plant.
Accomplishments
•Maintained the City’s AAA credit rating, which results in the lowest possible borrowing costs; confirmed
in the most recent rating by Standard and Poor’s and Moody’s in May 2022 and November 2022,
respectively.
•Achieved investment returns of 2.40%, as compared to 1.61% the prior year.
•Updated the Pension Funding Policy to the Retiree Benefit Funding Policy with Council who approved
as part of a comprehensive effort to proactively address the City’s long-term liabilities.
•Planned for and contributed $8.1 million ($4.7 million from the General Fund) in FY 2023 to the City’s
Section 115 Pension Trust Fund, in support of the funding goal of the City’s Retiree Benefit Funding
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
Packet Pg. 9
ADMINISTRATIVE SERVICES
184 • CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET
Policy, bringing total contributions to $54.4 million ($36.8 million from the General Fund) through FY
2023.
•Entered into a 40-year lease agreement with the Palo Alto History Museum to restore, preserve, and
improve the Roth Building at 300 Homer Avenue as a historic asset and make that asset available to
the Palo Alto community through displays, exhibits, interactive demonstrations, workshops, classes,
and lectures. The City licensed back a portion of the building for storage and/or display of the City’s
official archives and records.
•Issued a Request for Information to examine the feasibility of partnering with a private entity on the
development of new parking using Downtown In-Lieu Parking Fees, in conjunction with housing or
other uses.
•Earned the Excellence in Financial Reporting Award from the Government Finance Officers’
Associations of United States and Canada (GFOA) for the FY 2022 Annual Comprehensive Financial
Report (ACFR).
•Earned the Capital and Operating Budget Excellence Awards from the California Society of Municipal
Finance Officers (CSMFO) and the Distinguished Budget Presentation Award and Certificate of
Recognition for Budget Preparation for the Fiscal Year 2022 Adopted Capital and Operating budgets.
•Implemented the Government Accounting Standards Board (GASB) Statement 87 for new reporting of
leases in the City’s financial statements.
•Allocated an additional $5.0 million to the Supplemental Pension Trust Fund, $4.0 million to the Capital
Improvement Infrastructure Reserve, and established a $14.0 million Uncertainty Reserve to bridge
forecasted funding gaps over the next several years as part of the balancing strategy during review of
the Budget Stabilization Reserve (BSR).
•Facilitated multi-step, complex procurements that support the City’s Infrastructure Plan (Secondary
Treatment Upgrades project, Electrical Power Distribution Loop Rehabilitation, Electric Construction
Services, Sanitary Sewer Replacement Project 31), strategic and long-term goals of the regional water
quality control plant, among others.
•Facilitated complex procurements such as Online Electronic Plan Review Software for the Planning and
Development Services Department and On-Demand Transit for the Office of Transportation.
•Revised the Purchasing Manual to modernize requirements and follow current practices in procurement
to help users better understand guidelines and engage the Purchasing process more effectively, and
launched a Purchasing Resource Library with guides for City Staff.
•Partnered with the Information Technology (IT) Department to introduce online W-2 access for
electronic delivery through the City’s data processing software (SAP).
Initiatives
•Administer the Roth Building lease including mutually developing and ensuring compliance with a
tenant work letter.
•Implement the City’s Business Tax (Measure K), a Revenue Generating Ballot Measure that was placed
on the general election ballot, as directed by the City Council.
•Continue to strengthen internal controls for Purchasing through continued education of staff and
improved processes.
•Review the City’s procurement process, policies and procedures and implement improvements by
decreasing the cycle time of the procurement and contract process while ensuring the proper
expenditure of the City’s financial resources and ensuring an open, fair and competitive process.
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
Packet Pg. 10
ADMINISTRATIVE SERVICES
• CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET 185
•Continue to consolidate staff resources and tools for Procurement processes and procedures to the
Purchasing Resource Library on SharePoint, and implement the new e-procurement Software.
•Develop guidelines to address current and potential new tenants at the Cubberley Community Center.
•Select and work with a real estate broker to procure a new tenant for the approximately 7,410 square
foot two-story building at 445 Bryant Street that was vacated by Form Fitness. Site is formerly the
location of the Bryant Street Teen Center and rental revenue would be used to fund programs
specifically for Palo Alto youth and teens.
•Continue to support the citywide effort on the Enterprise Resource Planning (ERP) upgrade and
additional enhancements to improve financial reporting, streamline processes and provide
enhancements to payroll processing and timekeeping.
•Continue to update the City’s capital asset policy to conform with new internal controls over
construction in progress to ensure accurate reporting of capital project costs.
•Implementation of GASB 96 to comply with new Accounting standards regarding Subscription Based
Information Technology Arrangements (SBITA) accounting guidelines.
•Continue to assist with redevelopment plans of the former Los Altos Treatment Plant Site for use by
Valley Water as a Regional Water Purification facility and LifeMoves as an Emergency Shelter.
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
Packet Pg. 11
ADMINISTRATIVE SERVICES
186 • CITY OF PALO ALTO FISCAL YEAR 2024 PROPOSED OPERATING BUDGET
Budget Summary
FY 2021
Actuals
FY 2022
Actuals
FY 2023
Adopted
Budget
FY 2024
Proposed
Budget
FY 2024
Change $
FY 2024
Change %
Dollars by Fund
General Fund-Operating 7,618,435 8,975,585 9,744,883 10,539,018 794,135 8.1%
Printing & Mailing Services
Fund
1,217,034 1,083,182 1,467,291 1,514,033 46,742 3.2%
Total Dollars by Fund $8,835,468 $10,058,768 $11,212,175 $12,053,051 $840,877 7.5%
Revenues
Charges for Services 36,063 82,830 247,007 249,547 2,540 1.0%
Charges to Other Funds 3,730,067 4,331,238 5,546,563 6,443,647 897,084 16.2%
Other Revenue 145,158 121,737 171,400 171,400 ——%
Return on Investments (2,197)778 100 3,800 3,700 3,700.0%
Sales Taxes ——150,000 150,000 ——%
Total Revenues $3,909,091 $4,536,583 $6,115,070 $7,018,394 $903,324 14.8%
Positions by Fund
General Fund-Operating 41.61 38.13 40.13 40.63 0.50 1.2%
Printing & Mailing Services
Fund
2.10 2.10 2.10 2.10 ——%
Total Positions by Fund 43.71 40.23 42.23 42.73 0.50 1.2%
Item 1
Attachment A - FY24
Proposed Budget
Administrative Services
Department
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Finance Committee
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: August 15, 2023
Staff Report: 2306-1653
TITLE
Discussion and Finance Committee Recommendation on Alternative to Manage Winter 2023-24
Natural Gas Price Uncertainty
RECOMMENDATION
Staff requests the Finance Committee make a recommendation on the Utility’s natural gas price
purchasing strategy for Winter 2023-24 and recommend Council approval
EXECUTIVE SUMMARY
The attached presentation describes the City’s current market-price-based natural gas
purchasing and pass-through commodity rate strategy and an alternative capped-price winter
purchasing strategy to manage natural gas price uncertainty. Staff seeks the Finance Committee’s
recommendation on whether to maintain the current strategy or implement the alternative. Staff
plans to present these options to Council in September 2023 and implement the Council-
approved strategy in October 2023. In addition, this presentation offers some potential longer-
term natural gas market price risk containment strategies for discussion.
ATTACHMENTS
Attachment A: Presentation
APPROVED BY:
Dean Batchelor, Director of Utilities
Staff: Jason Huang, Resource Planner
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Staff Report
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September 5, 2023 www.cityofpaloalto.org
Alternative to Manage Winter 2023-24 Natural Gas Price Uncertainty
Finance Committee
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Attachment A - Presentation
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§In 2012, Council approved a monthly market-price-based natural gas purchasing and
pass-through commodity rate strategy (Resolution 9244) due to falling market natural
gas prices and resulting non competitiveness with PG&E
§City purchases gas at prices tied to a published market monthly index
§Customer gas rates include the commodity charge based on the published monthly
index (commodity charge is capped per the customer gas rates schedule)
§Monthly prices remained under the previous Council-approved $2/Therm commodity
charge cap until January 2023
Background
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Attachment A - Presentation
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§In late November 2022, gas prices started rising
dramatically in CA
§Staff communicated to customers about the expected
higher prices and in December 2022 Council increased the
$2/Therm commodity charge cap to $4/Therm
§Monthly index price for January 2023 settled at just below
$5/Therm
§Reserves ($1.84 million) were utilized to cover a portion of
the price increase
Winter 2022-23 Price Surge
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Attachment A - Presentation
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Gas Monthly Index Prices
Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23
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Gas Monthly Index Prices ($/Therm)
PG&E Citygate
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Attachment A - Presentation
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§Continue purchasing gas at prices tied to a published market monthly index
§Continue monthly variable retail rate tied to published market monthly index
§Utilize reserves when actual commodity price exceeds Council-approved cap (has
only happened once – January 2023)
§Longer-term variation of status quo: adder to commodity rate to build reserve for
market price spikes
Current Policy (Status Quo)
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Attachment A - Presentation
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§Energy market prices are inherently unpredictable and
volatile, but gas prices including for the projected upcoming
winter have stabilized and come down significantly since
March 2023
§Commodity rates loosely track and are less than PG&E’s
under most circumstances
§Cost is lowest over the long run
Considerations for Current Policy
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Attachment A - Presentation
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§Continue purchasing gas at prices tied to a published market monthly index
§For some winter months, CPAU can also purchase gas with a price cap in place, which
functions as an insurance policy and caps the retail price paid at $2/Therm
§If the monthly index settles below $2/Therm, the price paid is the monthly index
§If the monthly index settles at or above $2/Therm, the price paid is $2/Therm
§Retail cost of the price cap for Dec-Feb estimated at $0.175 - $0.275/Therm, based on
recent supplier quotes (CPAU’s total estimated cost $1.93 million - $3.03 million)
§Commodity charge will continue to be tied to monthly market price plus an adder
that spreads out the total Dec-Feb price cap cost over 12 months (estimated adder
$0.07 - $0.11/Therm)
Alternative: Capped-Price Winter Gas
Purchasing
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Attachment A - Presentation
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§Adder of $0.07 - $0.11/Therm for the total Dec-Feb price cap cost results in an
increase of 4%-6% in the median monthly residential bill over the year
§Winter months (Nov-Mar): 4%-6% increase
§Summer months (Apr-Oct): 3%-5% increase
Capped Price Adder: Customer Bill Impact
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Attachment A - Presentation
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§Will protect reserves from price spikes
§Will protect customers from price spikes
§Will be higher cost to customers in long term
§May be an insurance policy that adds cost and is not used (policy can be reviewed
annually)
§Capped price product is uncommon and may not be readily available from
suppliers
§Cost of product may be higher if market is very volatile or lower if market is stable
Considerations for Alternative: Capped-
price Winter Gas Purchasing
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Attachment A - Presentation
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§Establish reserve to manage gas price spikes
§Fixed-price gas purchases
§Full laddering strategy
§Gas production assets
§Gas storage
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Other Alternatives – Potentially Considered
for the Future
This Photo by Unknown Author is licensed under CC BY-NC-ND
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§Council consideration on September 18, 2023
§Implement Council-approved strategy in October 2023 for gas year November
2023-October 2024
Next Steps
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For winter 2023-24, the Finance Committee recommends Council direct staff to:
§Maintain current market-price-based natural gas purchasing and pass-through
commodity rate strategy; or
§Revise current strategy and implement the capped-price winter natural gas
purchasing alternative
Recommended Motion
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Attachment A - Presentation
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