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HomeMy WebLinkAboutStaff Report 269-10TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: JUNE 7,2010 REPORT TYPE: INFORMATION DEPAlnMENT: ADMINISTRATIVE SERVICES CMR: 269:10 SUBJECT: Fiscal Year (FY) 2011 General Fund Proposed Budget Finance Committee Review Update INFORMATION REPORT ONLY The Finance Committee's review of the Fiscal Year 2011 Proposed Budget continues through June 14, 2010; therefore, given the short turnaround to package the changes, staff is providing Council with this informational report and no Council action is required. DISCUSSION The City Manager presented the Fiscal Year 2011 Proposed Budget at the May 6, 2010 Finance Committee meeting. Since then, the Finance Committee has met a total of five times and plans to meet at least one more time on Monday, June 14, 2010 to finalize any outstanding issues and wrap up the changes to the FY 2011 Proposed Budget. The main focus of the budget discussions has been on the General Fund as a result of the $7.3 million budget gap for FY 2011. At the request of the Finance Committee, the City Manager introduced a budget that included recommendations for reducing the budget by $9.4 million in order to close the budget gap and provide some additional funds to allow the Committee and ultimately the Council flexibility in their budget deliberations. To the extent that the City Council does not add back reductions that takes the City Manager's recommendation all the way back to the $7.3 million gap and can reserve $1 million or so in the 2011 Adopted Budget, it would provide flexibility in the 2012 budget deliberations as staff is estimating a budget gap of approximately $1.1-$1.5 million. This would be beyond the $23.8 million or 17.4 pereent (expected at the end ofFY 2010) in the Council adopted Budget Stabilization Reserve policy. The City Manager's FY 20 II Proposed Budget recommendations include a reduction of 75.02 Full-Time Equivalent (FTE) positions including 56.5 full-time benefited FTE's, of which 50.41 are in the General Fund. Changes made by the Finance Committee to date have resulted in adding back a net of9.75 FTE (1 FTE funded by Enterprise Fund and excluding the parking lot CMR: 269:10 Page I of5 items/FTE discussed later in this CMR). The revised number stands at 41.66 FTE being eliminated in the General Fund. General Fund The General Ftmd FY 2011 Proposed Budget includes the following changes totaling $1 million outlined in the tables below. The first table reflects recommended and approved changes by the Finance Committee. The second table reflects changes recommended by staff and approved by the Finance Committee to correct or update the Proposed Budget. The changes at this point now provide a total of $8.4 million (originally $9.4 million) in budget solutions to cover the $7.3 million budget 1 million more than needed to close the budget gap. . non shaded lines reduce from the l!UU')4'" soiuti<ms. Table I • Limit park fee increases {Entrance fees reduced, but staff series Reinstate HSRAP Total of Finance Committee Adjustments CMR: 269:10 N/C 27 50 COMMUNITY SERVICE COMMUNITY SERVICE COMMUNITY SERVICE COMMUNITY SERVICE DEPARTMENT Page 2 of 5 Table 2 contract services 68 Total of All Adjustments $1,095 The Finance Committee has made several changes to the City Manager's Proposed Budget and has been utilizing the "parking lot" system, where items needing further information are parked discussion at a later date or for decision at the budget wrap up meeting on June 14, 2010. In order to add items to the parking lot, two members of the Committee must be in agreement. Table 3 below summarizes the parking lot items. Table 3 Monday closure of library branches 'Staff to review partial CMR: 269:10 Page 3 of 5 In addition, staff has been asked to provide additional information on the following items, these items are neither part of the changes nor parking lot items for later discussion: • Provide a Fire Department budget that includes a 4 percent reduction equivalent to the salary reductions for SEIU and Professional and Management employees. • Provide a list of Fire Department reductions that could be made if there were no labor contract limitations. • Provide a legal decision on whether the City Council salaries can be reduced by 10 percent or if this decision must be voluntary. (Approximate annual savings of$6,500 if all Council members participate in this reduction). • Provide additional information on potentially increasing noise abatement fees which could potentially cover thc full cost of the program. Finally, rcgarding position changes, the Finance Committee has added a net citywide increase of 9.75 Fill (8.75 in the General Fund), The additions include a Senior Auditor in the City Auditor's Office at a cost of $156,000, wqich will be funded from the Enterprise Funds. The position is intended to focus on the Enterprise Fund and their operations, As a result of the changes in the tables above (not including the parking lot items) the table below reflects reinstated, additions and eliminated positions. I Position Changes to City Manager's Proposed Budaet ; Reinstated 19.75 FTE) I Program Assistant 1 (,75) ; Code Enforcement Officer ; Police Ser eant Police Officers (3) Tree Trimm!n IUne Clearers 4 Additions (1 FTE) ; Sr, Auditor (Funded by Enterprise Funds) Enterprise Funds The Enterprise Funds include the Utilities and Public Works Departments. The Utilities Department budget in concept had rate increases that are no longer in place in the FY 2011 Proposed Budget. The Public Works Department Proposed Budget has an increase of 2.6% for the Storm Drainage Fund as a result of the voter approved measure. In addition, staff is proposing that the Finance Committee reconsider increasing Refuse Fund rates to insure that the Fund has sufficient funds to close the laridfill at a cost of $6.1 million at the end FY 2011, The Finance Committee will provide fulther guidance in the near future when staff returns with a specific rate increase recommendation. The revenues for the Refuse Fund have decreased as a result of a policy decision to stop acccpting commercial disposal at the landfill, a reduction in CMR:269:IO Page 4 of5 business activity due to the recession and the increased recycling success of many of the green initiatives. If the Finance Committee decides to go forward with staff's recommendation for a rate increase, which has yet to be determined, it will require a 45 day notification process. At a minimum, a rate increase would not be effective until September 1,2010. The Enterprise Funds include a net increase total of9.38 FTE. This includes 5 FTE added in the Utilities Department (the department removed 2 FTE from the Proposed Budget), 1 FrE to the Auditor's Office (as previously noted), but funded from the Enterprise Funds, and a net increase of 3.38 FTE in direct charges from the General Fund. Other Funds This includes the centralized Internal Service Funds (ISF), which captm-e the costs of specific citywide services such as Vehicle Replacement and Maintenance, Mail and Print Shop operations and Information Technology (IT) services. The Mail and Print Shop operation is reducing 2.48 FTE as it moves to contracting out more of the print shop operations. The IT fund is reducing I FTE and adding .5 FTE for a net reduction of.5 FTE. The Vehicle Replacement and Maintenance Fund is undergoing a review of the fleet utilization and the general fund has included $.48 million as a place holder for vehicles that will be removed from the fleet. RESOURCE IMPACT Ba~ed on the current changes made by the Finance Committee, staff projects the FY 2011 General Fund Proposed Budget will end in a balanced budget. The FY 2012 budget gap is estimated to be between $1.1 million to $1.5 million based on CUlTen! information. There are several financial challenges that will continue to face the City and will continue to require structural changes. Structural compensation changes have been made to non-safety employees and the organization will begin negotiations with safety labor groups to address structural compensation changes going forward includIng two-tier pension and contributions to other benefit costs. ENVIRONMENTAL REVIEW This is not a project for the purposes of the California Environmental Quality Act. DEPARTMENT HEAD APPROVAL: Director of Administrative Services CITY MANAGER APPROVAL: ~w1kC:-1J ~AMESKEENE ~.... City Manager ATTACHMENTS Attachment A: April 20,20 10 Finance Committee Minutes (Minutes to other Finance Committee meetings will be provided as they become available) CMR: 269:10 Page 5 of 5 FINANCE COMMITTEE Regular Meeting Tuesday, April 20, 2010 Chairperson Schmid called the meeting to order at 7:01 p.m. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Schmid (Chair), Espinosa, Klein, Scharff Absent: none 1. Oral Communications None. 2. Human Services Resource Allocation Process (HSRAP) Contract Renewal (2 nd Year of two-Year Contract for FY2011). Administrative Services Director, Lalo Perez said the item was closely related to the proposed budget. Some of the Operating Budget restructuring involves Human Services Resource Allocation Process (HSRAP). Recreation Program Supervisor, Minka Van Der Zwaag said Staff was requesting the direction from the Committee on HSRAP funding allocations for Fiscal Year 2011. She explained that HSRAP was a funding program for nonprofits that provided direct services in Palo Alto. It was funded from the General Fund. She explained that there were two types of funding. One funding type was the Sole Source Contract Funding used for agencies when they were the sole provider of services and were either created by the City or received a high level of priority by the City, such as Avenidas, Palo Alto Child Care, and Second Harvest Food Bank. There were also General Agency HSRAP Allocates. These were agencies that met a critical service need in the community as set by the Human Relations Commission and included Abilities United, Adolescent Counseling Services, Community Health Awareness Council, Community Technology Alliance, the Downtown Streets Team, La Com ida de California, Mayview Health Center, Momentum for Mental Health, SALA, and Youth 1 Community Services. She said Staff is requesting policy direction on one of three options. Each option included a $50,000 program cut. Option one was to reduce the funding of the HSRAP program by $50,000 (4.5%) and reduce funding across the board evenly to all funded agencies. Option two was to reduce funding of the HSRAP program by $50,000, reduce funding to those agencies that do don't directly meet the core objectives of the program, reduce support of other programs that were either offered or financially supported by other governmental agencies. Option 3 was to continue funding ofthe existing HSRAP agencies at the same level of funding, $1,110,452.15, cutting funding from other community services programs by $50,000 to meet the budget targets. Council Member Klein asked who determined that $50,000 was the correct amount to consider. Director of Community Services, Greg Betts said the Community Services Department target in reductions was $2 million. The managers have looked at a combination of cutbacks. In most areas, 8% cuts were being made. They set a goal of trying to keep the HSRAP cuts under 5%. Council Member Klein said it was difficult to judge whether or not the Committee should agree to the $50,000 in cuts without seeing the other Community Services cuts first. He asked why they couldn't be considered at the same time. Mr. Betts said the item was associated with the CDBG funding, and the importance of the program made it more urgent for the recipient agencies. This provided the Committee with an opportunity to provide feedback. Council Member Klein asked for the Chair of the Human Relations Commission for any comments. Human Relations Commission Chair, Daryl Savage said that she would like this issue to return to the Human Relations Commission. Council Member Espinosa asked Ms. Savage to discuss the normal process of the Human Relations Commission (HRC). Ms. Savage said they look at each agency, the past practices and current needs to come to a deCision of what to recommend for funding. She said she understood that current times were different and processes needed to be fleXible. 2 Chair Schmid said he thought Option two had been picked out by the HRC. Ms. Van Der Zwaag said Option two was Staff's recommendation. She also stated that these options would return to the HRC. Council Member Scharff asked if the HRC would like to suggest options. Ms. Savage said she was attending the meeting to hear comments from the agency in an effort to discover a solution. She was not prepared to comment on specific options. Council Member Scharff asked if the HRC thought input into each cut would be helpful, rather than across the board cuts. Ms. Savage said she wasn't prepared to make those recommendations now, but she thought the process would be beneficial. Council Member Scharff asked if pushing this back to the HRC would create a timing Issue for the agencies. Mr. Betts said there was adequate time to pursue that feedback. Council Member Espinosa asked if option three would have to come out of another budget. Mr. Betts said that the options they would bring to the Finance Committee in May were broader than the target to give them some flexibility. It could involve elimination of staffing at Baylands Interpretive Center, the Junior Science Museum, the reduction of sports field renovations, increased user fees for sports fields, or it could reduce the hours of operations at the Rlnconda Pool. Council Member Scharff asked if they looked at what percentage of the agencies budgets were funded by the City. Ms. Van Der Zwaag said they haven't looked at it, but could if the Committee requested it. Council Member Scharff asked why they didn't. Ms. Van Der Zwaag said Stafffeitthey wanted Finance Committee input before proceeding. Council Member Klein said there was a two year commitment to these agencies. 3 Council Member Espinosa suggested there might be a better method to evaluate it. The percentage' cut could end up too high. He said that methodology didn't give indications of the health or scope of the program. Helrl Schuppisser spoke regarding the agency he worked for, Momentum for Mental Health. He said all the HSRAP agencies work well together as a team to make the region better. Lisa Hendrickson, Avenidas spoke regarding the history of Avenidas and the vital role the HSRAP funding had. She said the amount of the contract was currently less than it was 10 years ago. She requested that Avenidas not be required to take a larger reduction than other agencies. Beatriz Lopez, 160 E. Virginia Street, said that SALA was a nonprofit law office that serviced Santa Clara County seniors, with a focus on elder abuse cases. Herb Borock, PO Box 632 said that Charter process should be followed. The City Manager should propose a budget, and the Finance Committee should make recommendations. Lanie Wheeler, 362 Diablo Court spoke regarding Palo Alto Community Child Care. She said the City Funds provided subsidies for the low-Income families to receive childcare. She said they had received major deductions in recent years even while their costs continued to rise. Crystal Gamage, 156 Channing spoke regarding La Comida, and agency that had served meals since 1972. She said there might not be a program in Palo Alto without the City's financial support. Linda Chin, 836 Santo Rita Ave representing Abilities United, spoke regarding the vital funding from the City. She said they were the only agency in the area that provided the services they did for people with developmental and physical challenges. Council Member Espinosa said this was the time they needed to focus on how to help those with the most need. He said he didn't feel prepared to make a decision at this point. Part of it had to do with whether or not HSRAP funding was a necessity compared to other budget cuts. He said that on May 11th when the broader discussion happens they would be better prepared. He said that when the time comes he would prefer to look at strategic cuts rather than across the board equal cuts. 4 Council Member Klein said that prior the development of Avendias, the City didn't have any senior programs, and Avenidas had filled that hole, He said his interests were mainly with Avenidas and PACC because they filled services the City did not provide, MOTION: Council Member Klein moved, seconded by Vice Mayor Espinosa, that the Finance Committee continue the item to May 11, 2010, Council Member Scharff added that he agreed with the other Committee Members, He supported targeted cuts versus across the board cuts as well. Mr. Betts said that Staff appreciated the comments and asked that the Committee carefully consider the information on the attachments which detailed the funding to each organization, Council Member Schmid added that $1.1 million was a substantial part of the Community Services budget and he appreciated that those cuts might be different In scope, He also agreed that it should be done In context with the entire budget. Council Member Klein said that when they hear this again on May 11, 2010, he hoped the people that spoke tonight would not speak again in the Interest of time. MOTION PASSED 4-0. 3. Proposed Fiscal Year 2010-2011 Community Development Block Grand (CDBG) Funding Allocations; 2010-2015 Draft Consolidated Plan and 2010-2011 Draft Action Plan, Chief Planning and Transportation Official, Julie Caporgno said that CDBG funding had a tight schedule. They were required to have the documents submitted to the Department of Housing and Urban Development (HUD) by May 15, 2010, Staff would bring this item to Council on May 3, 2010 with a recommendation. She said there was approximately $1 million worth of funding Staff was recommending for CDBG. She said that Staff was requesting the Finance Committee to recommend that the Council allocate the CDBG funding as recommended by Staff in the draft 2010-2011 Action Plan, authorize Staff to submit the 2010-2011 Action Plan to HUD by the May 15, 2010 deadline, authorize Staff to submit the 2010-2015 Consolidated Plan to HUD by the May 15, 2010 deadline, and authorize the City Manager, on behalf of the City, to execute the 2010-2011 application and Action Plan for CDBG funds, 2010-2015 Consolidated Plan and any other necessary documents concerning the 5 application, and to otherwise bind the City with respect to the application and commitment of funds. She said the Consolidated Plan was a five year plan which was collaborated on with other entitlement cities. She said they were advocating creating income opportunities for low income households including small business loans or micro enterprise development. She said the environmental sustainability goal was a new component to the Consolidated Plan. ' Council Member Scharff asked about the funding difference, on Table 1 of the CMR which listed $478,808 as the 2010-2011 Funding Request, and $478,304 as the CAC/Staff Recommendation$ for their sewer replacement. Ms. Caporgno said she wasn't sure, and would check on it. Council Member Scharff said that he was concerned about the cut to Avenidas from $60,000 to $10,000. Ms. Caporgno said it had been discussed with Avenidas, and they did not object to it. Council Member Scharff said there was a funding request for each agency t and a Staff recommendation. He asked if there was a methodology to the Staff recommendations. Ms. Caporgno said the proportions in the recommendation were carried over from last year. Council Member Scharff asked what the program administration budget for the City of Palo Alto was used for. Ms. Caporgno said there was one full-time Staff Member and 20% of a support Staff Member. She said the program was very paper-work intenSive. She said later in the year Staff would propose the elimination of the Citizens Advisory Committee to Council In an effort to reduce the Staff workload. She said there was no HUD requirement for the Committee. Staff would recommend a process similar to Human Services Resource Allocation Process (HSRAP). Chair Schmid asked If the program administration job was full time for this $1 million project. Ms. Caporgno said there was one full time job and one 20%. Chair Schmid said that seemed Staff heavy. 6 Ms. Caporgno reiterated that there was much paperwork involved, many reports that had to be turned into HUD and the Citizens Advisory Committee required much Staff work. She said the process starts in November. Chair Schmid asked if the agencies did much of the work themselves. Ms. Caporgno said they provide detailed information about their requests. There was a monthly contract process, a billing process, and monthly paper work to send into HUD. Council Member Scharff asked about the funding request for the City of Palo Alto. He wanted to know if the Staff employed for this project were fully funded by CDBG funds, or if some came from the General Fund as well. Ms. Caporgno said there had been General Fund monies used in the past. She said the current year was pretty much covered by the funds. Administrative Services Director, Lalo Perez said that the program had been subsidized from the General Fund in the past. Ms. Caporgno said that this year the CDBG Coordinator believed the City was funding $4,000-$5,000 for the program. She said they were attempting to make the Coordinator position anywhere between V2 to 3/4 of a position. Council Member Scharff asked for clarification on whether the $175,000 was a fully loaded cost and asked if that was the difference of the $45,000. Mr. Perez said it should be fully loaded. The benefits were considered also. Council Member Scharff asked if the 1.2 people worked full time on this project. Ms. Caporgno said that in the past year that wasn't the case. She said that number was based on what was historically done. Alisa Tantraphol, Corporate and Foundation Relations Manager, Second Harvest Food Bank, 750 Curtner Avenue, San Jose spoke regarding the Second Harvest vision of ending hunger in Palo Alto. She said the biggest barrier they faced was lack of space. They were proposing to convert 11,021 square feet of storage space into office space for Staff and Volunteers. This would increase the amount of services they would be able to provide. 7 Thomas Pamilla, Director of Stevenson House, 455 E Charleston Road, spoke regarding the aging building. He said the sewage pipes were a health issue. He said because of the nature of his clients they were not able to raise rents and depended on grants such as CDBG to get work like that done. Carroll Harrington, 830 Melville spoke in favor of the grant for Stevenson House. She said that the dedication and spirit of the workers at Stevenson house was Incredible and they depended on the City to help fix the aging Infrastructure of the house. Mr. Perez said that he was now able to report on specific subsidy amounts, in reference to Council Member Scharff's questions. He said that in 2006, the City subsidized the program with $29,667, In 2007 It was $23,500, In 2008 it was $14,715, In 2009 it was zero, and zero dollars were expected to be used to subsidize the program In 2010. Chair Schmid said that no one mentioned the day worker program, which was Identified as one of the major Capital prOjects. ojects. . Ms. Caporgno said the project was for the Day Worker Center In Mountain View. Individuals at the facility were hired for the day and the program was allowed by the Federal Government. Chair Schmid asked if the program cost was shared with Mountain View. Ms. Caporgno said the City of Mountain View provided the bulk of the funding for the project. Cynthia Luedtke, Chair of the Capital Campaign for the Day Worker Center of Mountain View, 1054 St. Joseph Ave, Los Altos said that currently the program was located in a Church and has had to move many times. She said the center was only open until 2:00pm which limited the amount of time they were able to operate. They had purchased a property in Mountain Wew which required about $700,000 worth of improvements. Council Member Espinosa said that they had received a letter from the Mountain View Mayor last year describing this program as being regional and requesting support from neighboring communities. Council Member Scharff said he understood from the report that they were limited to $159,313 for administration purposes. He asked if it could all be allocated to the City of Palo Alto for administrative purposes. He said the report indicated that HUD had a requirement that no more than 20% could be 8 allocated for administration, but that amount was broken out between the City of Palo Alto and Project Sentinel. He wanted to know if all that money could be allocated to the City of Palo Alto. Ms. Caporgno said that it could, but the City was required to have a fair housing. provider. Council Member Scharff asked what Project Sentinel did exactly. Ms. Caporgno said they resolved housing discrimination issues. Council Member Scharff said that since that number was fixed as well Staff should reflect it that way. Ms. Caporgno said Project Sentinel might be able to be funded through the Public Services funds, but then that would be reduced. It could not be funded with Capital money. MOTION: Council Member Klein moved, seconded by Espinosa, that the Finance Committee recommends to the City Council allocates CDBG funding as recommended by Staff in the draft 2010-2011 Action Plan, authorize Staff to submit the 2010-2011 Action Plan to the Department of Housing and Urban Development (HUD) by the May 15, 2010 deadline, authorize Staff to submit the 2010-20015 Consolidated Plan to HUD by the May 15, 2010 deadline, and authorize the City Manager to execute the 2010-2011 application and Action Plan for CDBG funds, 2010-2015 Consolidated Plan and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application and commitment of funds. Council Member Espinosa said he was concerned about the Staffing needs for the program and the issue should be discussed. He said that he would be happy to be a resource for Staff as they continue to develop funding models for these organizations, as that had been the focus of his career. Council Member Scharff said he would support the motion, though he had some concerns about the top heavy nature of Palo Alto's support of the program. MOTION PASSED 4-0. 4. Audit of Fleet Utilization and Replacement. City Auditor, Lynda Brouchoud offered an overview of the $3 million savings identified in the report. She said that $2.5 million had already been realized 9 through the deferred fleet replacement. She said there was an annual cost of $396,000 for the underutilized transport vehicles. In the proposed budget the City Manager has included a $483,000 savings for fleet efficiencies. She said there was another $123,000 identified through fuel recoveries due to alternative fuels. She said the scope of the audit was to review the economy and efficiency of the program. To accomplish this Staff analyzed City policies for replacement as well as utilization requirements. They reviewed the internal controls of fuel purchases and the fleet management strategy for climate projection goals. They focused on FY 07-09 and on non-emergency vehicles. She said that in 2009 the City had 630 units, 461 were rolling stock .. Public Works valued the fleet at $32 million before depreciation and $10.5 million after depreciation. The Vehicle Replacement Fund was responsible primarily for the operations, maintenance, and replacement of most of the City's fleet. She said the report consisted of three primary findings. Although the City avoided spending about $2.5 million in Fiscal Year 2010, longer term efficiencies could be realized through reducing the fleet. She said that 35% of the transport vehicles did not meet the minimum use requirement in FY 08-09. Out of the special purpose or work platform vehicles 25% did not meet the minimums. A potential reason for this was that there was not a central vehicle pool where employees could use vehicles, there were several pools and they were manually managed. The one piece they looked at for emergency vehicles was on the varying use. For example, the 25 marked police cars had wide varying use. In one year It varied from 1,100 miles to over 36,000 miles. It was recommended that those vehicles rotate to more evenly distribute the mileage and extend the life of the vehicles. Criteria assessing the need for the non-rolling stock materials should be created. She also said that the information in the Public Works database should be kept current. She said that Public Works had taken some proactive steps based on the findings. She said the second finding focused on the funding stability of the vehicle replacement fund. In FY 06-08 the expenses exceeded the revenues. Revenues were mainly generated through the charges of the expenses to the departments that used the fleet. They found that the charges were not enough to cover the fleet costs. The costs that were distributed were done by allocated charges which did not allow the departments control over the line items in their budget. Mileage reimbursement was included in a department's line items. She said, the audit also has a recommendation about the Climate Protection Plan. In Fiscal Year 2009 the City had about 87 CNG vehicles and 3 hybrid vehicles. There has been a lot of developments in the field and it would be a good time to take advantage of new technology and have a strategy in place. The third finding had to do with the fuel and parts inventory. Between the Compressed Natural Gas vehicles (CNG), and the unleaded and diesel fuel vehicles, the consumption reports did not match with the balances that were provided. There were also issues with vehicles not being locked at the Municipal Services Center (MSC). 10 She recommended policies were revised to cover this. The parts inventory could not be verified as there had not been an inventory done in a number of years. Council Member Klein said that 7-8 years ago the vehicle usage requirement was reduced. He said there was no explanation as to why that happened. It seemed counter Intuitive as the vehicles become more reliable. Director of Public Works, Glen Roberts said there were three criteria for annual utilization. He explained that it was 2,500 miles per year, or 220 days per year, or, for equipment, 50 hours per year. He said that (1)any of the vehicles may be utilized less than 2,500 miles but were utilized 220 days per year. He said it makes sense because Palo Alto was condensed. He added that Staff agreed with the City Auditor that the process needed to be refined. Council Member Klein said the geography of the City had not changed since the utilization requirements had changed. He said he was trying to find ways to be more effiCient. He added that if using a City car to drive from City Hall to the Service Center, there should be a centralized pool. . Mr. Roberts said that from either place just about every location in the City could be reached in less than five miles. Vehicles could be used every day and accumulate 2,500 miles, it was not a case of them driving solely between MSC and City Hall. He said that several vehicles on the list were used by Building Inspectors who drive out virtually every day to perform site inspections, but they were stili used less than 2,500 miles. He addressed the replacement cycle by stating that the annual mileage usage threshold was lowered at the same time the replacement cycle was lengthened. Council Member Scharff asked when the vehicle reservation system would be implemented. Mr. Roberts said Staff was projecting to have a reservation system up by the end of the calendar year. He added that there would still be some need to have a bit of decentralization. Council Member Scharff asked If the reservation system would allow users to choose which location the reservation was for. Mr. Roberts said yes. Council Member Scharff asked about the three criteria. He asked what the advantage would be to changing it to 5 /000 miles instead of 2 /500. 11 Mr. Roberts said the 5,000 level was causing them to target many vehicles creating a need for more reviews. Council Member Scharff asked if the system should track the criteria. Otherwise, the 2,500 was a proxy for the 220 days or the 50 hours, then you see if you meet the other two criteria and this might not be the most efficient approach. Mr. Roberts said Staff was working toward better track utilization logs. Council Member Scharff stated that he felt the fleet was over stocked, and asked if it was going to be reduced when the new system was implemented. Mr. Roberts said it was their goal to reduce the size of the fleet, the expense of the fleet and improve the utilization. He said that in order to accomplish this they must review the budget issues that may affect the need of vehicles and evaluate the specific vehicles with the client departments. Council Member Espinosa asked about Staff's consideration of the shared bicycle plan and how it would affect the vehicle use rates. Ms. Brouchoud said it's a great idea. We don't have available data at this time, but it brings up ideas that you could have the reservation system also apply to bicycles. They made general recommendations and hope Public Works will utilize the whole tool kit such as having a reservation system, utilizing mileage reimbursement, with some exceptions for the unique situations Mr. Roberts referred to. Those should be the exception and not the default, especially in looking at the cost of having underutilized vehicles. Mr. Roberts said it was in place through tile Community Services Department. He said there was some utilization during appropriate weather. Council Member Espinosa said he would be interested in the City Auditor's comments on the implementation plans. Chair Schmid said that while some vehicles were used every day they were being used for round trips and then sitting all day. Fifty hours wasn't very much when there were several thousand hours in the work year. He asked if there was a metric of emergency services when several pieces of equipment were required at the same time. 12 Mr. Roberts said the hour issue was an hour meter on the equipment that measured the amount of time it was actually running. He said that during transport, and during the time the worker was completing other tasks on the job site, the meter wasn't running. It was not a good indicator of the 2,080 hour work year. He said that most of the emergency equipment was in Public Works and Utilities. Chair Schmid asked about the 16.5 fleet maintenance employees, with low usage rates the maintenance should not be that great. Mr. Roberts said the bulk of their time was spent on heavy equipment, not on regular vehicles. There were two managers for 14 people. That Staffing level had been reviewed several times, for the current fleet mix was it a valid staffing ratio. He said it had been considered to change the sourcing on the sedans and light trucks to an outside contract which would include maintenance. Ms. Brouchoud, returning to the presentation, said they were recommending a replacement freeze of non urgent vehicles until the analysis of the under­ utilized vehicles was complete. They were recommending that the City Manager and Public Works consider increasing the fleet utilization requirements and identify an optimal fleet size. They recommended a tool kit approach where all opportunities were available such as renting, pooling, etc. She said a best practice would be to have a committee from a variety of departments that could review these options. Conducting annual assessments to cover programmatic changes should be looked at. Public Works should have the authority to manage the fleet. They recommended revising Vehicle Policies and Procedures to address areas on the report, revising the methodology for the distribution of charges among the client departments, identifying the budget impacts for additional units, and developing systems for reconciliation of fuel purchases and inventory balances. She said that Pubic Works has reviewed fleet utilization and already reassigned four vehicles. They were in the process of implementing a reservation system and installing an electronic fueling system. She said there would be some challenges in implementing the recommendations. Cultural and procedural changes would be needed. Council Member Scharff asked about the implementation of revising the methodology for charging the client departments. Mr. Roberts said it was a cross departmental effort. Public Works identified the replacement costs, allocation spreadsheets which then were forwarded to Administrative Services who added that to the department budget through allocated charges. They have not been able to track well with the inflated cost of the vehicles. 13 Administrative Services Director} Lalo Perez added that it was important to note that in prior budgets they made funding decisions to not fully fund the replacement costs of the vehicles in order to accomplish one-time savings. Council Member Scharff said that when an employee makes a choice to use a vehicle} the usage should affect the budget in a way that provides the department head with an incentive to control the cost. He asked if that was the vision of the recommendations. Mr. Perez said that Staff agreed with that vision, but it would take longer to implement. They would have to review expanding the car allowance policy as it might cost less to offer a car allowance rather than the use of a car. Council Member Scharff asked if the City was going to move away from having a compartmentalized department based fleet toward a City fleet. Mr. Roberts said that was the common vision. To address the issue of putting employees on a mileage reimbursement plan he said, there were some conflicting policy issues, for example employees that did not commute to work USing their cars would have to start driving to work If they had to use their own cars which might even move them Into a car with a larger carbon footprint. He said that issues such as that would be overcome; they just were not yet sure what that would look like. He said the word transport had been used to broadly. These vehicles were not simply transporting people. Many were transporting tools and eqUipment which needed a home. He said it would not be efficient to have workers move eqUipment from vehicle to vehicle or store it In their private vehicles. Revising the policies for pure transit vehicles will be a quicker process. Ms. Brouchoud said they did look at this. There were some light pieces of eqUipment that could be transported between vehicles. The decision would have to be made about the amount of eqUipment, and whether you could have a pool car with the light pieces of eqUipment available for different people to use. Council Member Scharff asked if the City Auditor would be part of that committee. Mr. Perez said that typically the City Auditor acted as an advisor rather than a member of a committee. Council Member Scharff asked about take home vehicles. 14 Mr. Roberts said there were two categories of equipment that went home with Staff. The bulk of the take home vehicles are standby vehicles in the fleet that went home with employees on a rotating basis to allow for the employees to respond directly to a site. The second category is exclusive use vehicles, of which there used to be 12, now there were 3 in the fleet. Council Member Klein asked why the purchase of gasoline has increased. Ms. Brouchoud said that should be reviewed. The data the Auditor's Office received from Public Works actually showed some decreases. This data is based on the fiscal year. The data Mr. Van Orsdol presented last night was on the calendar year basis. But even then, given some of the discrepancies, the data should be reviewed. Council Member Klein asked if Staff could respond to efficiencies regarding the cost of new vehicies with respect to determining what size and type of car to purchase as well as how to determine the best price to pay for it. Ms. Brouchoud said that was not in the scope of the audit. Mr. Roberts said there were specific guidelines regarding the size of the vehicles for given tasks. He said their goal was to purchase the least expensive, lowest carbon footprint vehicie possible for the task. Council Member Klein said that would be expected. He wanted to know if the City Auditor could be a second set of eyes to determine If that was followed through on. Mr. Roberts said that, regarding the price of the smaller vehicles, they try to piggy back on a larger bid, such as one by the State of California, so they get the better price based on quantity. Larger equipment was awarded to the lowest bid. Chair Schmid asked about outsourcing to a regional pool for equipment or with fleet suppliers. Mr. Roberts said there were some aspects of shared use, such as in the Fire Department. They had been meeting with some outside suppliers regarding how that process would work. The budget process has not had this input yet. Mr. Perez said there would be some factor for It in the budget as a placeholder. 15 MOTION: Council Member Klein moved, seconded by Council Member Espinosa that the Finance Committee recommends that the City Council accept the Audit of Fleet Utilization and Replacement, and direct Staff and the City Auditor to report on the success of these implementation efforts to the Finance Committee in January, and direct the City Auditor to determine whether there had been a spike in the purchase of gasoline by the City in 2009 and if so why, and to also direct the City Auditor to determine if the City was buying the right size vehicles, and paying the best price. Council Member Scharff asked to amend the Motion to direct the City Auditor to identify any areas where there had been reSistance from Staff. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER that the City Auditor identify any areas where there had been resistance from Staff. Council Member Klein said he did not mean for the vehicle report on the purchase of vehicles to be due in January, but rather that it should be added to the work plan. He added that he regarded this report as an opportunity for significant savings, and for continued cooperation by Public Works, but he said it was unfortunate that there had been that large of a problem. Council Member Espinosa added that the implementation time-line should also be developed. Council Member Schmid said the best metric for this would be the budget in anticipation of what will come. MOTION PASSED 4-0. 5. Auditor's Office Quarterly Report as of March 31, 2010. City Auditor, Lynda Brouchoud said the report included the first Citizen-Centric Report, and the Internal Control Review of SAP upgrades and Utilities Module Implementation. During the first half of the year the City Auditor's Office revenue recoveries and other audit savings had resulting in an economic benefit of $452,681 plus an additional $2.5 million In avoided fleet replacement costs for FY 2010. Council Member Scharff said he noticed there were a number of items not started and his concern was that the Auditor's Office did not have the Staff to do them. He asked where the Auditor's Office was on its staffing and ability to get the heavy workload done .. 16 Ms. Brouchoud said they did not have the Staff to complete all of the items. The next significant audit was the Utilities Department audit; they had a consultant in place but were waiting to have Staff available to start the audit. Council Member Scharff asked if it was possible to have a new dedicated Auditor funded through the Enterprise Funds which would audit the Utilities Department and other Enterprise Fund departments. He asked if that was common practice In other cities. Ms. Brouchoud said that was possible and something to explore through the budget process. ~ight now, their costs are shown through the General Fund and then allocated every year to cover the Enterprise Fund audit costs. Council Member Scharff asked if there were reasons to not go through the Enterprise Fund directly. Administrative Services Director, Lalo Perez said there was no reason. They would have to implement a process that would involve some estimating on the City Auditor's part regarding the length of the project. Council Member Scharff said if they were to hire a person for the City Auditor's Office, their salary and benefits would be fixed and there would always be a person to audit the enterprise funds which are huge. It wouldn't be a question of how much money is in the budget, it would be a number we would know for each on-going budget that would come out of the enterprise fund ... Mr. Perez said in that case it would be very possible. Council Member Scharff asked if they could ask Staff to look into It. Mr. Perez said that when an employee was dedicated to the Enterprise Funds they have to allocate the workload to the Individual fund. Council Member Klein said they would have to clarify potential Issues due to the City Charter. The City Auditor was appOinted by Council, but the Utilities Staff fell under the purview of the City Manager. To place a full-time Staff Member, funded by Utilities, in a position not reporting to the City Manager might require an amendment to the City Charter. But if you are just talking about an auditor then that can be funded in the same way the City Attorney has someone for Utilities. 17 Council Member Scharff said he was not necessarily trying to change the Charter, but trying to explore how to fund an auditor position to audit Utilities and other enterprise funds. Council Member Klein said that was his pOint. The allocations of that person's salary in the City Attorney's Office is paid for by Utilities. Council Member Scharff he was attempting to explore that type of funding for the Auditor's Office as well. Council Member Klein suggested the Auditor's Office follow up with the City Attorney and Mr. Perez. . Mr. Perez said Staff would speak to the City Attorney. Council Member Schmid thanked the City Auditor for the fleet report and knows it will have a big impact on the City. He continues to find the SEA Report showing up around town effectively and knows the cash handling report will be due out in a few months and is looking forward to it. MOTION: Council Member Scharff moved, seconded by Chair Schmid, that the Finance Committee recommends that the City Council accept the Auditors Office Quarterly Report as of March 31, 2010, and that the City Auditor come back to Finance Committee with an exploration of how to hire another Auditor in the City Auditor's Office to focus primarily on the Utility Funds, and how to arrange getting that funded. Council Member Scharff said it was Important to start the Enterprise Funds Audit. MOTION PASSED 4-0. 6. Emergency Medical Services (EMS) Master Plan Update. Fire Chief, Nick Marinaro said the City of Palo Alto had a unique and comprehensive system. The program had grown, demand has increased, making it critical to have a report card on the system. Public Safety Research Group (PSRG) President, John Altmann said the report was a snapshot of the work they were doing. The analysis was still being done for a final report. He said the Fire Department first started paramedic services in 1975. In 1980 the California Health and Safety Code was enacted, referred to as 201 rights. Organizations that were already in the business of medical 18 transport could stay in business; otherwise they would have to use a County contract. In 1990 calls increased beyond the ability to respond with the one unit. The system today included Advanced Life Support (ALS) engines and two medic units. He said the last financial audit was done about three years prior. The payer mix reported In that audit showed 2/3 of the payer mix was private Insurance, a little less than 1/3 was Medicare, the remaining amount was more difficult to collect. Since that audit there had been a slight increase in private insurance and Medicare, and a slight decline in self-pay. The final report will illustrate the different methods used and provide comparisons. He said that Palo Alto's use of a public/private partnership via a contracted ambulance firm made financial sense. He said the Medicare age populate was Increasing which was a challenge to the bottom-line, depending on how the National Health Care resolves. He said the overall ambulance collection rate was healthy. He said the City might consider expanding the Basic Life Support (BLS) non-emergency unit to generate further revenue. He said that, regarding benchmarks, they could use a 1991 study that included cal volumes, medical response by type, and a comparison of call volumes of all PAFD units. He said that Palo Alto had a fairly consistent response time. He said there were opportunities for improvements, though it may be enhanced by the time the final report was submitted. He said that response time performance had some standards that act as guides in determining the desired levels of response times. He said that Sudden Cardiac Attack was the example in EMS because It was the most frequent run in the industry. The chance of success was factored by time. The longer it takes to get advanced life support to that patient decreases the chance of success. He said that from FY2005 to FY2009 the call loads and the average response times have increased. He said the volume had also Increased. He said the Medic Unit in Palo Alto was very busy. He said that Palo Alto's call demand was Increasing with static resources. He said the bUSiest call times were between 7:00 am and 11:00 pm. The busiest days were Thursdays and Fridays. He said the most frequent time blocks when calls were sent to the County Contractor, where revenue was lost, were between 11: 00 and 2: 00 pm and between 7:00 and 11:00 pm. He said that they intended to offer multiple options regarding Staffing suggestions in the final report. He said that paramedics could be redistributed to assure all seven engines were ALS compliant every day. Another suggestion was to add a peak-time unit. He also said there were some opportunities to increase the good things that the Fire Department was already doing. He said the primary conclusions were that the PAFD was delivering good service, there were opportunities to gain efficiencies, the increasing call load was affecting the response times, the medical study opportunities will broaden field of practice, expertise, and increase professional pride. He said that if PAFD were a private ambulance company, it would be judged as financially positive. 19 Council Member Espinosa asked if they tended to have reports that recommended downsizing. Mr. Altmann said their practice had been to recommend efficiencies. He said he had avoided politically motivated contracts that wanted to go after a budget issue because they were having a workplace disagreement. He said that his intent would be to lay a strong foundation to enable to Council to make a good business deciSion. Council Member Espinosa asked if that had typically been a recommendation. He said the recommendations tend to involve Increased needs. Mr. Altmann said they preferred to redirect Staff to drive efficiency. The final report will provide up and downsides to each finding. Each EMS operation tended to operate within their model. The final report will work within that model to help Council decide what to do with each line of business. Council Member Espinosa said the Finance Committee will be interested in that methodology. Mr. Altmann said the community he lived in had Similar challenges. It was a reality everywhere. He said that even in good times, his company's recommendations have led Cities to make smart choices. Council Member Espinosa asked If most of the people on the project team had worked in similar agencies. Mr. Altmann said that he was formerly an executive with a national ambulance company, not AMR. The Medical Advisor was formerly the CEO of a hospital chain and had been a trauma doctor and a State Health Department Director. He said that of the two Fire Service Associates one was the current EMS Chief in MemphiS, and the most published EMS writer in America, the other was a retired EMS Chief, and the new Fire Chief in Cedar Rapids. Lastly he said they have a well qualified person from the Phoenix Fire Department as well. He said there were others as well. Each project team was assembled based on the needs of the project. Council Member Scharff asked if Mr. Altmann was going to cost out the recommendations for the Council. Mr. Altmann said that to the extent that they had cost data available they would. 20 Council Member Scharff asked if it would be fully loaded with the cost of personnel and equipment. Mr. Altmann said it would be personnel centric as that was the heaviest cost. He said that Palo Alto wouldn't need to invest much into new equipment at this pOint. Council Member Scharff asked if the cost of personnel would be determined by Mr. Altmann or by City Staff. Mr. Altmann said that information would be supplied by the Fire Department. Council Member Scharff asked about partnering with Santa Clara County. Mr. Altmann said that Palo Alto had 201 rights; if they give that up they would be out of the bUSiness. In a way they were partnered with the County already in that they had mutual aid. He cautioned that Palo Alto would end up subsidizing the rest of the County. Council Member Scharff asked why would they Staff with full-time paramedics during peak hours instead of part-time medics. Mr. Altmann said those were chOices the City would be given to make. Council Member Scharff asked if financial information would be provided on those choices. Mr. Altmann said they would provide a cost and an upside and a downside. The decision could also be made based on the service models. Decisions could also be made based on a revenue efficiency basis. Council Member Scharff asked if they were going to analyze if there were any conflicts that would exist such as when someone leaves an engine to staff an ambulance. Mr. Altmann said they would for EMS. Council Member Klein asked what were 201 rights. Mr. Altman said it was the section of the california Health and Safety Code that stated that If an organization was not in the ambulance service prior to a specific date they would have to use the County contract. Palo Alto was in business prior to that date. 21 Mr. Marinaro added that the City of Campbell was in the same situation as Palo Alto with 201 rights. When they merged with County Fire they opted to give up those rights. They would never be able to get them back. He said he did some preliminary research to determine the affects of merging with County Fire; it would reduce the number of personnel, but it appeared the money generated by the system would still exceed the amount that would be saved. Council Member Scharff asked what Mr. Altman meant when he said PAFD would be considered financially positive. Mr. Altmann said the department was making money. The department was willing to take a look at processes through an internal audit. Chair Schmid asked if the department was covering costs. Mr. Altmann said he wasn't prepared to answer that. Chair Schmid said that regarding staffing, there was an issue about minimum staffing of 29 personnel on duty at all times. He asked how many of those were EMS. Mr. Altmann said there were 39 paramedics in the City. Given that they asked what the best efficiencies were. Chair Schmid asked if that went into the minimum Staffing. Mr. Marinaro said the budget allowed for 39, current 36 were filled. Of those two were on ambulance 24 hours a day count as part of that minimum. The other paramedics were on the engine rosters. Chair Schmid asked if the 36 positions were uniformed Fire Fighters. Mr. Marinaro said they were Fire Fighter Paramedics. Chair Schmid asked about a set of medical first responders who were not part of the authorized amount. Mr. Marinaro said the BLS equated to 3 FTE, but it was staffed with hourly personnel. Chair Schmid asked how many were on duty at a given time. 22 Mr. Marinaro said two. Chair Schmid said that one of the suggestions was that the intense time periods would require more people on duty. Mr. Altmann said that they were suggesting an opportunity for the City to determine how to handle that situation. Chair Schmid said there did seem to be the greatest need during those times. Mr. Altmann agreed. He said they were looking at the lost revenue component to that piece. Chair Schmid asked if they were going to complete a personnel financial analysis of that process. Mr. Altmann said they were preparing for that. Mr. Marinaro added that internally they've discussed reallocating res'Ources to be able to manage those calls without increasing Staff. Council Member Espinosa said that benchmarking had been mentioned several times. 'He said it was Important to have an independent voice. He said he would be interested in seeing the balance of revenue generation and response time models. Mr. Altmann said one comparison was to look at similar cities. Some do EMS themselves, some have contractors. Chair Schmid said that it would be useful for them to include the call volume by hour data. Mr. Altmann said that would be a very long appendix. They have requested it from the Fire Department. Ms. Antil spoke regarding the cglls lost to AMR. She said it be useful to know why those calls were lost and how many were lost. Mr. Marinaro said that there 600-700 calls lost per year. Sometimes they response, and then our units will free up and take the call. He said it has long been a goal to have those units available. 23 " Deputy Director of Administrative Services, Joe Saccio said an operating statement across BLS and ALS to see how much the City's General Fund was supporting the operation. Break 10:26 Return 10:29 7. Standards of Coverage (SOC) Study Update Emergency Services Consulting International Project Manager, Joe Parrott introduced himself as the project manager for the Standards of Coverage project. He said his organization was retained to complete a comprehensive review of the Fire Department. As part of that review they would review the service capabilities, the resources being used, and the risk within the community. They would provide an assessment of how well the department was doing in serving their community, Including Stanford. They would 'then provide Council with a list of recommendations for improvements. He said that on May 17th they would spend time with the Council reviewing goals. He spoke regarding the Community Risk Assessment stating that it would be a comprehensive description of the risks within the community that were protected by the Fire Department. He said that analysis shows what types of resources the Fire Department would require to manage the risks. He then spoke of the historic system performance. He said based on what the department was currently able to deliver and national standards, they would propose performance objectives and performance measures. He said It may mean repositioning resources or changes in operational practices, but they were not that far along in the project yet. He said he was aware of the timellnes. The original scope of work gave them until June 1, 2010 to complete phase one. Two months after that the assessment recommendations would be due. He said his organization was going to attempt to deliver both phase one and phase two by the June 1 deadline. Council Member Klein asked where Mr. Parrot's organization was located. Mr. Parrott said they were in Wilsonville, Oregon. Council Member Klein asked for additional organization background. Mr. Parrott said the organization started in the mid 1970s and had grown over time. They were partners with the International Association of Fire Chiefs. They had completed hundreds of studies across the country and internationally. He said they had one of the better reputations in the field. 24 Council Member Klein asked if he worked for the company full-time. Mr. Parrott said he worked for the company part-time, Council Member Klein asked what he did the rest of the time. Mr. Parrott said he was the Deputy Fire Chief for the City of Salem for the last five year. Previously he worked full time with Emergency Services Consulting as the Senior Vice President. Before that he was the Fire Chief of the City of Gresham, Oregon. Council Member Klein asked if his partnership with the International Association of Fire Chiefs created any type of conflict. Mr. Parrott said he didn't believe so. He said the organization was interested in improving Fire Service. The partnership has brought some marketing value and has provided some additional resources for the organization. CounCil Member Klein asked about some of the other studies the organization had done. He wanted to know about communities similar to Palo Alto and the results they had recommended. Mr. Parrott said the City of Oxnard had moved forward with Implemented station relocations based on their recommendations. He said the city he worked in had successfully passed a bond measure for the addition of two new fire stations based off of a similar standards of coverage survey. Council Member Klein asked if the surveys he had completed typically recommended increases In the numbers of fire fighters, no changes, or did they often recommend reductions. Mr. Parrott said he could not recall one where they recommended reductions. He said there had been cases where he recommended increased resources to provide improved outcomes. He said there had always been efficiency improvements. He said that not every recommendation involved a cost Increase. Council Member Klein asked if the methodology included dynamic staffing and dynamic employment. Mr. Parrott confirmed that it did. Council Member Klein asked him to compare that to the standards of coverage. 25 Mr. Parrott said that was a term used for public safety excellence. He said his organization partnered with the International Association of Fire Chiefs and the International City Managers Association. He said that they reviewed the process and it was recently published In a fifth edition. The City had requested compliance with that model. Council Member Klein asked if he was familiar with the Integrated Risk Management Model and if that would be part of his report. Mr. Parrott asked for clarification. Council Member Klein said it was the UK's standard. Mr. Parrott said he was a bit familiar with it. He said the model was applied in the UK, as a means of identifying what was most at risk in the community and how to mitigate that. He said the philosophy was more aggressive in preventing fires than domestic philosophies were. He said it was not an important factor in what they were developing for the City of Palo Alto. Council Member Klein said that using Integrated risk management utilized much data from existing city services such as trends and when calls come in. They were focusing on making fire personnel more mobile. Mr. Parrott said they were reviewing response activity by time and day. It would be a factor in developing recommendations for the City. Council Member Klein asked for clarification regarding the statement that Mr. Parrott had never completed a report recommending reductions in the amount of personnel. Mr. Parrott said he could not recall making that recommendation. Council Member Klein asked Mr. Parrott to elaborate on the comment. Mr. Parrott said the reality was once they had the conversations with the client regarding the department goals, expectations of performance increase not decrease. Council Member Klein said that another possibility was to have good level of services that were not as efficient as they it could be. 26 Mr. Parrott said that was often the case, and would potentially be the case in Palo Alto. Council Member Klein asked if that would then hypothetically lead to staff reductions. Mr. Parrott said it was hypothetically possible. He said it was more likely an opportunity to capture an Improvement in service. Council Member Scharff asked for the source of the data used in the survey. Mr. Parrott said the data was gathered from a number of sources, including from the Dispatch Center, Planning Department and the Census Bureau. Council Member Scharff asked if therewere any cities In the United States that were using unique staffing models. And if those best practices were going to be reviewed. Mr. Parrott said there were a number of departments across the country that have unique models. He said that one community has their paramedics on motorcycles, because the traffic during rush hours was impassable. Preferential deployment by time of day was another example of a different model. Council Member Scharff asked if the study would determine the City's ability to generate revenue and pay for the recommendations in the report. Mr. Parrott said that was not part of the standards of coverage process. He said they realized the City didn't have $20 million to cover new processes. Their recommendations would be enacted contingent upon the City's ability to finance them. They would not, however consider other revenue generating opportunities. Council Member Scharff asked if they were going review the most efficient use of current resources without regard to the current limitations In the union contract. Mr. Parrott said they WOUld. They would attempt to flag conflicts in the union contracts. Their recommendations would be independent of the union contract. Council Member Espinosa expressed concerns over the fact that there had never been recommendations of reductions. He asked if that specific factor had been conSidered regarding cross jurisdictional savings within our department. 27 Mr. Parrott said cross boundary support already occurs in Palo Alto. He said the agreements in place have some limitations. Reviewing those agreements was part of the process. He said that under current staffing levels a five alarm fire would already require outside support. He recalled a project in Michigan where they proposed closing several stations so they could be distributed to an under served part; of town. Chair Schmid said the Staff Report stated that this process started with an audit report of staffing and overtime. Staff was directed to complete a standard of coverage survey. He said that Mr. Parrott's letter dated April 18, 2010 did not use any of that language. Mr. Parrott asked what was specifically missing. Chair Schmid said he didn't see the words "staffing", "overtime", or "standards of coverage". He said it discussed risk assessments and community expectations. Mr. Parrott said that section six of that letter stated that that information would be included in the final report. Section seven stated that they will review overtime information. . Chair Schmid said he had mentioned the importance of time of day. One of the issues originally identified was staffing. He asked if Mr. Parrott was familiar with Paio Alto's Minimum Staffing Agreement. Mr. Parrott said he was. Chair Schmid said the times of day would be an issue. Mr. Parrott agreed and added that the union contract point of view would be different than whether or not enough coverage was provided. . Chair Schmid said Mr. Parrott had not mentioned overtime as a specific issue even though it had been identified as one of the original concerns. Mr. Parrott said they were looking into how overtime was being used. They would evaluate why and if it would make more sense to have increased personnel. Chair Schmid said he thought the report would be done by mid-June. 28 Mr. Parrott said the phase one standards of coverage document was due in mid­ June and the phase two was due within two months following which was the recommendations phase. He said they were trying to get the entire project completed by the first part of June. Chair Schmid asked about fire and emergency services. Mr. Parrott said they would review the full range of services offered by PAFD. Chair Schmid asked about the financial impacts. Mr, Parrott said for the purposes of the standard of coverage document, one of their charges was to evaluate the contract with Stanford. He said they would have the details to accompany the equipment recommendations. Chair Schmid asked if a dollar amount would be assigned to the efficiencies as well. Mr. Parrott said financial savings opportunities would be identified. Council Member Espinosa asked Staff about the process to select the contractor. He reiterated that Council was looking for an independent and objective view, and that it was striking to have selected a company that had never suggested staffing reductions. He also wanted to know if Staff had any concerns about the content of the report. Mr. Marinaro said there were five members of the selection committee including three senior Fire Personnel, one Financial Analyst from Administrative Services, and one Financial Analyst from Utilities. He said they narrowed it down to two out of three responders, a main criteria being the tlmel1ne. They had interviews and presentations, and based on a standard contract rating paradigm and this company was selected. The methodology they used was industry recognized, and they had specific Bay Area experience. Council Member Espinosa said that experts were important. He asked if it was a concern for the panel that they selected someone who was currently serving as a leader In a fire department. Mr. Marinaro said that practice was not uncommon. They also performed back ground references on the organization and felt their research was adequate. Council Member Espinosa said It was not surprising to have a Fire Chief from another area determine that staffing levels needed to be increased. 29 Council Member Klein said he wanted to add a discussion about whether the Committee was comfortable with the study to the May 6, 2010 agenda as it was an important item. Council Member Schmid said they would request Staff to bring feedback back to the Committee. Mr. Parrott said he wasn't sure why the Committee was uncomfortable with the study. Council Member Schmid said there had been a series of questions which demonstrated a disconnection between Committee expectations and what was being assembled by the consultant. Assistant City Manager, Pamela Antil said that it would be helpful to have this type of dialogue prior to selecting a consultant. She added that when the City Auditor provided the report, the office may have indicated the type of study, but the dialogue of having a series of discussions to determine the expectations never happened. She thought that the Council might have a disconnect with. the study if the Committee did. Then on the 6th they could determine if that RFP met the goals. She said that she wasn't sure how to alleviate their concern over the consultants associations. Council Member Schmid said it would be a good starting point to look at the original audit recommendation. Mr. Perez said they would bring the scope of services to the Committee. Council Member Klein said that he was familiar with hiring consultants, but he expected the consultant to come to the project with no preconceived notions. There should be a list of three .possibilities: increase staff, keep staffing levels current, decrease staff. He stated that Mr. Parrott had, in affect, said that one of those options was off the table which indicated an institutional bias. Mr. Parrott said that the RFP requested a standards of coverage document compliant with the fifth edition. That was a highly defined document organization. The report itself was very well defined, and if it wasn't what Council was looking for, redirection would be required. He stated that reductions in staff were client driven. He said it has been rare that a client has requested their department be made less affective. 8. Discussion for Future Meeting Schedules and Agendas 31 Administrative Services Director, Laio Perez said May 6, 2010 was the budget kick off. The May 4,2010 Finance Committee meeting had been canceled due to lack of agenda items. He said the next meeting would be May 6, 2010 when they would review budgets for the CAOs, City Attorney, ASD, and the Library. He said it may be too long of an agenda, so he would follow up with the Chair. On May 18, 2010 and May 25, 2010 they would discuss the Utilities and Public Works budgets. On May 27, 2010 they would discuss Public Works and Service Funds. He said the June 8, 2010 meeting would wrap up the budget discussions. Council Member Espinosa asked why they didn't move some of the items to the 4th rather than cancelling it. Chair Schmid asked when the budget document would be available. Mr. Perez said between Aprll 28, 2010 and April 30, 2010. Assistant City Manager, Pamela Anti! said they were attempting to schedule a special Council meeting on May 4, 2010. Chair Schmid asked Staff to review It and get back to them. Council Member Klein said he was not available on June 8, 2010. ADJOURNMENT: Meeting adjourned at 11:31 p.m. 32