HomeMy WebLinkAboutStaff Report 186-08City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
10
DEPARTMENT: PUBLIC WORKS
DATE:APRIL 14, 2008 CMR: 186:08
SUBJECT:RECOMMENDATION FROM THE FINANCE COMMITTEE TO THE
COUNCIL REGARDING THE UPDATE~ON GENERAL FUND
INFRASTRUCTURE BACKLOG
RECOMMENDATION
City Council review the General Fund Infrastructure Backlog information provided with this
report and direct staff to return to the Finance Committee with an implementation plan to address
the backlog.
COMMITTEE REVIEW AND RECOMMENDATIONS
The Committee voted unanimously to have staff present the same information presented to the
Finance Committee to the City Council for their input as they review the Capital Budget during
the upcoming budget process. There are no changes to the City Manager’s Report.
ATTACHMENTS
Attachment 1:CMR:167:08
Attachment 2: March 18, 2008 Finance Colnmittee Meeting Minutes
PREPARED BY:
of Public Works
DEPARTMENT HEAD:
GLENN S. ROBERTS
Director of Public Works
CITY MANAGER APPROVAL:
HARRISON’
Assistant City Manager
CMR:186:08 Page 1 of 1
ATTACHMENT 1
Reper
FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE:MARCH 18, 2008 C1VLR:167:08
SUBJECT:UPDATE ON GENERAL FUND INFRASTRUCTURE BACKLOG
RECOMMENDATION
Finance Committee to review the General Fund Infrastructure backlog information provided with
this report and direct staff_to return to the Finance Committee with an implementation plan to
address the backlog. "
¯.. ~--.
BACKGROUND
In 1998, staff proposed a $100 million, ten-year General Fund Infrastructure Management Plan
(IMP) for maintenance and improvement of the City’s existing infrastructure based.on an
infrastructure management study, by Adamson Associates (Adamson Study) completed in
January of that year. Although the Adamson Study identified nearly $400 million in
recommended infrastructure improvements over a twenty-five year period, staff recommended
limiting the IMP to $100 million over the first ten-year period for only the most critical needs
addressing safety and building integrity issues. In 2001, staff presented a proposal to fund the
$100 million, ten year IMP implementation. At that time Council also adopted a policy that
existing resources would be used to rehabilitate existing infrastructure and new infrastructure
projects would be approved only if new resources could be identified.
Despite that policy direction, a number of new projects have been approved by the Council using
the funding designated for the IMP including the Library Bond Measure effort of 2002, Roth
Building, Heritage Park, Children’s Library renovation and expansion, and the design of the new
Public Safety building. Also, the increasing cost of construction has impacted the IMP funding
plan as costs have risen dramatically since the Adamson Study. Lastly, the Adamson Study did
not provide for additional costs triggered by code requirements such as seismic upgrades and
Americans with Disabilities Act (ADA) access. As a result, almost all of the Infrastructure
Reserve (IR) funds have been appropriated for infrastructure CIP projects through 2007-08,
seven years into the IMP, and there are many more critical rehabilitation projects to be
accomplished.
’ CMR:167:08 Page 1 of 3
In fiscal year 2006-07 Council adopted a proposal to add $3 million each year to the IR to
address the growing backlog of infrastructure projects needed to be accomplished. This amount
was included in the 2007-08 budget and will be continued in future years of the General Fund
CIP deve!opment and will be increased each to address the rise in construction costs. The 2007-
08 IR is currently at $16.2 million.
DISCUSSION
Staff has updated the General Fund infrastructure inventory, because the Adamson Study is 10
years old and so much has changed since it was done, and because the Council directed staff as
part of the 2007-08 Budget process to reconfigure the IMP to incorporate new and existing
infrastructure projects in a comprehensive, prioritized plan,
This report provides a snapshot of the total probable backlog for General Fund infrastructure that
will need IR funding over the next twenty years (2007-27). This inventory does not include
enterprise funded infrastructure such as utilities, water quality control plant, storm drains or the
landfill and recycling center. The attached Table 1 shows a total back!og of about $307 million
in 2008 dollars to accomplish infrastructure repairs and renovations over the next 20 years in the
areas of streets, sidewalks, bridges, parks and open space, City buildings and at facilities shared
with the Palo Alto Unified School District. In addition, the attached Table 2 shows another $!48
million, in 2008 dollars, ~,,ill: be needed to address future infrastructure needs at major City
facilities such as building replacements at the Municipal Services Center (MSC), Fire Stations 3
and 4, and the Animal Shelter, replacement of the Civic Center plaza deck and completion of the
Charleston Arastradero Corridor and Bs-xbee Park Phase II projects. Therefore, the total General
Fund infrastructure.backlog for the next 20 years is projected to be almost $455 million in 2008
dollars. Unfortunately, the cost of construction will continue to increase these costs over time
adding to the projected backlog.
The costs shown on Attachment A were developed using data provided by:
Kitchell CEM, consultants who have recently completed a review of existing City
Buildings and prepared associated cost estimates
The City’s pavement maintenance management system
The City’s 35 district sidewalk replacement program
Parks and Open Space annual surveys
®Staff survey of all existing bridges within the City, many of which are shared by
neighboring cities
RESOURCE IMPACT
While the adopted 2007-12 budget plans to appropriate $50.6 million $155.2 million has been
identified as the cost to address the infrastructure backlog over the next five years (2007-12)
while the Adopted 2007-12 budget plans to appropriate $50.6 million. This leaves almost $105
million in unfunded backlog for the first five years. The two primary reasons for this are IR
Fund revenue limitations and staff resource limitations necessary to manage the projects. The
CMR:167:08 Page 2 of 3
Kitchell report also noted that if the City devoted more staff time to facilities maintenance and
repairs, future costs devoted to building renovations could likely be reduced.
Staff plans to return to the Finance Committee to present an implementation plan to address the
General Fund infrastructure backlog.
ENVIRONMENTAL REVIEW
Finance Committee review of the General Fund infrastructure
project under the California Environmental Quality Act (CEQA).
backlog does not represent a
ATTACHMENTS
Attachment A: Table 1 - ~General Fund Infrastructure Backlog Summary"
Attachment B: Table 2 - "Other Major Infrastructure Projects"
PREPARED BY:
DEPARTMENT HEAD:
dICt-I~EL SARTO
~istant Public Works Director
ENN S. ROBERTS
Works
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 167:08 Page 3 of 3
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ATTACHMENT 2
FINANCE COMMITTEE
MINUTES
Regular Meeting
March 18, 2008
Chairperson Morton called the meeting to order at 7:01 p.m. in the Council
Chambers, 250 Hamilton Avenue, Palo Alto, California.
Present: Burr, Morton (chair), Schmid, Yeh
1. Oral Communications
Wynn Grcich, 3045 Mira Loma, Union City, spoke regarding water pollution
in the bay and where it is coming from.
Mike Francois, 224 Gardenia Way, East Palo Alto, spoke regarding pollution
in the water in East Palo Alto.
2. Update on General Fund Infrastructure Backlog
Assistant Public Works Director Mike Sartor spoke regarding original general
fund infrastructure reserve backlog versus updated inventory, summary of
updated plan, challenges and next steps.
MOTION: Chairman Morton moved, seconded by Council Member Schmid
to have staff incorporate tonight’s visual presentation during the upcoming
budget process for full Council review.
MOTION PASSED 4-0.
3. Utilities Advisory Commission Recommendation to Adopt a Resolution
Adopting a Water Rate Increase and Amending Utility Rate Schedules W-l,
W-2, W-4, and W-7
Utilities Director Valerie Fong presented the need for rate increases for the
water, gas, and electric funds via the Proposition 218 process.
Wynn Grcich, 3045 Mira Loma, Union City spoke regarding water rates
charged to Bay Area residents and not to raise water rates for Palo Alto
residents.
03/18/08 FIN: 1
NOTION-" Council Member Yeh moved, seconded by Chairman Morton, that
the Finance Committee recommend to the City Council to adopt the attached
resolution to:
(a) Approve an 8 percent increase to retail water rates, for Fiscal Year (FY)
2008-09, effective _July 1, 2008, which will increase annual revenues by $2.0
million; and
(b) Approve the changes to the Water Utility Rate Schedules (W-l, W-2,
W-4, and W-7).
NOTION PASSED 4-0
The Committee took a break at 8:30 p.m., returning at 8:35 p.m.
4. Utilities Advisory Commission Recommendations to Adopt a Resolution
to Adopting a Natural Gas Rate Increase and Amending Utility Rate
Schedules G-l, G-2, G-6, and G-10
NOTION: Council Member Burr moved, seconded by Council MemberYeh,
that the Finance Committee recommend to the City Council to approve the
attached resolution to:
(a) Approve a 7.1 percent increase to natural gas retail rates, for Fiscal
Year (FY) 2008-09, effective July 1, 2008, which will increase annual
revenues by $3.4 million; and
(b) Approve the changes to the Gas Utility Rate Schedules (G-l, G-2, G-6
and G-10).
MOTION PASSED 4-0
5. Utilities Advisory Commission Recommendation to Adopt a Resolution
Adopting an Electric Rate Increase and Amending Utility Rate Schedules E-l,
E-l-G, E-2, E-2-G, E-4, E-4-G, E-4-TOU, E-7, E-7-G, E-7-TOU, E-14, E-16,
E-!8 and E-18-G
MOTION: Chairman Morton moved, seconded by Council Member Schmid,
that the Finance Committee recommend to the City Council to approve to
adopt the attached resolution to:
(a)Approve a 14 percent increase to electric retail rates, for Fiscal Year
(FY) 2008-09, effective July :1, 2008, which will increase annual
revenues by $12.9 million; and,
03/18/08 FIN:2
(b)Approve the changes to the Electric Utility Rate Schedules (E-l, E-
l-G, E-2, E-2-G, E-2, E-2-G, E-4, E-4-G, E-4-TOU, E-7, E-7-G, E-7-
TOU, E-14, E-16, E-18 AND E-18-G).
MOTlrON PASSED 4-0.
6. Approval of Refuse Rate Increase; Request for Adoption of a
Resolution to Amend Utility Rate Schedules R-l, R-2, and R-3
Public Works Director Glen Roberts spoke regarding challenges in the refuse
fund and the need for rate increases for refuse services via the Proposition
218 process.
MOTIOI~: Council Member Schmid moved, seconded by Council Member
Burr that the Finance Committee recommend to the City Council to approve
the increase in Refuse Rates; and to adopt the resolution to Amend Utility
Rate Schedules R-l, R-2, and R-3;
MOTIf:ON PASSED: 4-0
~lOT]:O~: Council Member Burr moved, seconded by Council Member Yeh
that Staff bring back with the budget additional information based on
discussion with the City Attorney on ways in which the cost structure might
encourage waste reduction.
MOTZON PASSED 4-0.
7.Discussion for Future Meeting Schedules and Agendas
April 1, 2008
April 22, 2008
May 2008- Budget Meetings
AD3OURNMENT: The meeting adjourned at 10:01p.m,
03/18/08 FIN:3