HomeMy WebLinkAboutStaff Report 342-10City of Palo Alto
City Manager's Report
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: SEPTEMBER 13, 2010
REPORT TYPE: CONSENT
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 342:10
SUBJECT: Recommendation from Finance Committee to Preliminarily Approve Fiscal
Year 2010 Reappropriation Requests to be Carried Forward into Fiscal Year
2011
RECOMMENDATION:
The Finance Committee recommends that the Council preliminarily approve the Fiscal Year
2010 reappropriations to be carried forward into Fiscal Year 2011 (Attachment A).
Reappropriation is defined as the inclusion of a balance from the prior year's budget as pali of
the budget of the subsequent fiscal year. This year, General Fund proposed reappropriations
total $185,000. Enterprise Fund proposed reappropriations total $3,443,418. Internal Service
Fund proposed reappropriations total $194,000.
COMMITTEE REVIEW AND RECOMMENDATIONS:
On July 6, 2010, the Committee voted unanimously to accept staff's recommendation to carry
forward the Fiscal Year 2010 reappropriations into Fiscal Year 2011.
PREPARED BY:
DEPARTMENT HEAD:
ALEWONG Q
Senior Financial alyst
~~
Director, Administrative Services
~ .. --.. ~. :-0----------------------::---:-::c:--
CMR:342:10 Page lof2
CITY MANAGER APPRQV AL:
ATTACHMENTS
Attachment A: CMR 297:10, July 6, 2010 Report to the Finance Committee
Attachment B: Excerpt from July 6,2010 Finance Committee Minutes
CMR:342:10 Page 2 of2
TO:
ATTENTION:
FROM:
DATE:
SUBJECT:
ATTACHMENT A
City of Palo Alto
City Manager's Report
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER
JULY 6,2010
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 297:10
Request to Preliminarily Approve Fiscal Year 2010 Reappropriations
Requests to Be Carried Forward into Fiscal Year 2011
RECOMMENDATION
Staff recommends that the Finance Committee recommend that the Council preliminarily
approve the Fiscal Year 2010 reappropriations be carried forward into Fiscal Year
201 1 (Attachment A).
BACKGROUND
As a part of the fiscal year-end process, staff reviews the City's unencumbered and unspent
appropriations of the fiscal year just ended along with the City's spending plans. Encumbered
amounts are those subject to the legal claims of other parties due to contractual obligations (for
example, commitments made through purchase orders). The City has a process for carrying
forward encumbrances.
However, each year there are a small number of important projects we carry forward into the
next year with unencumbered funds. The reappropriations process is used for these projects.
The Council must provide a preliminary approval at this time to allow the reappropriations to
move forward, although the Municipal Code also requires that the Council provide final approval
at mid-year, once the accounting books are closed. Because projects may need funding in the
first part of the fiscal year, the Municipal Code was amended in 1995 to allow the Council to
preliminarily approve the reappropriations (Chapter 2.28, Section 2.28.090).
DISCUSSION
As noted above, the Municipal Code aUows the "preliminary" approval of reappropriations as
long as final approval is included with the normal year-end closing ordinance. The preliminary
reappropriation action allows for an early review of uncommitted funds in a just-concluded fiscal
year, Attachment A identifies those reappropriation requests that staff recommends for
preliminary approval.
CMR:297:10 Page I of2
RESOURCE IMPACT
Staff has determined that sufficient uncommitted budgeted funds exist to allow for the
preliminary approval of the attached Fiscal Year 2010 reappropriations list (Attachment A).
General Fund proposed reappropriations total $185,000. Enterprise Fund proposed
reappropriations total $3,443,418. Internal Service Fund proposed reappropriations total
$194,000.
POLICY IMPLICATIONS
This recommendation is consistent with adopted Council policy.
ENVIRONMENTAL REVIEW
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
PREPARED BY:
DALEWONG ~
. Senior Financial alyst
DEPARTMENT HEAD APPROVAL:
LAL
Director, Administrative Services
CITY MANAGER APPROVAL: ;(/
ATTACHMENT
Attachment A: Fiscal Year 2010 Reappropriations List
CMR:297:IO Page2of2
\.
Attachment A
FY 2010 REAPPROPRIATION
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Ci~y Manager's Office
$55,000 High Speed Rail Project This reappropriation is being requested for Recommended $55,000, There is
staffing costs related to the High Speed Rail sufficient balance in the Fiscal Year
Project. Per CMR 267:10, Council approved 2010 budget that can be
the appropriation of $55,000 from the FY 2010 reappropriated.
Council contingency to fund these costs.
Planning Department
$40,000 High Speed Rail This reappropriation is being requested for Recommended $40,000. There is
Project contract services related to the High Speed Rail sufficient balance in the Fiscal Year
Project which is a multi-year project that does 20 I 0 budget that can be
not have an identified source of funding. In reappropriated.
FY 2010, this project was funded by the
Council contingency and was also absorbed by
the Planning Department budget. There is
remaining budget from the Destination Palo
Alto contract in FY 2010. Part of this
remaining amount is being proposed to be
reappropriated to the High Speed Rail Proiect.
$40,000 . Development Center This reappropriation is being requested for Recommended $40,000. There is
Restructuring Project contract services related to the restructuring at sufficient balance in the Fiscal Year
the Development Center. Although it was 2010 budget that can be
mandated by the City Council, this project does reappropriated.
not have a designated budget. There is
remaining budget from the Destination Palo
Alto contract in FY 2010. Part of this
remaining amount is being proposed to be
reappropriated to help complete this project.
Page I of 4
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Administrative Services
~50,OOO Special Studies This reappropriation is being requested for the Recommended S50,000. There is
, funding of special studies that arise related to sufficient balance in the Fiscal Year
the Stanford Expansion, Palo Alto Airport, 2010 budge! that can be
Cable Franchising, or other projects as reappropriated,
necessary, The budget for contract services in
FY 2011 is entirely comprised of funding for
specific identified contracts, leaving no room
for unanticipated contracts, This
, reappropriation allows for funding for
i
assistance on special projects related to the
City's finances, .
Utilities Department-Electric Fund
$2,000,000 Electric Efficiency . This reappropriation is being requested to fund Recommended $2,000,000. There is
Financing Program an electric efficiency financing program for sufficient balance in the Fiscal Year
nonresidential customers through a third party 2010 budget that can be
contractor, On December 7, 2009, Council reappropriated,
approved using up to $_2,000,000 from the I
Calaveras Reserve to develop this four-year
pilot program (CMR 430:09), It was Council's
intent that these funds be used for a four-year
program and rolled over throughout the length
of the program, The contract is expected to be
signed by June 30, 2010, The program will
begin in Fall 2010.
$459,700 Customer rebates for This reappropriation is being requested to fund Recommended $459,700. There is ,
energy efficiency customer rebates for completion of energy sufficient balance in the Fiscal Year
projects efficiency projects. A very large number of 20 I 0 budget that can be
energy efficiency projects are either committed reappropriated,
or projected to be completed, while only a
small percentage of projects have been
completed to dale, Actual payment of rebates
will occur as the projects are completed in FY
2011. These energy efficiency projects support
Council's environmental sustainability
objectives.
:
Page 2 of4
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
$300,000 Customer rebates for This reappropriation is being requested to fund Recommended $300,000. There is
solar electric customer rebates for the installation of sufficient balance in the Fiscal Year
(photovoltaic) systems photovoltaic systems. SB I r~quires California 20 I 0 budget that can be
electric utilities to offer incentives for solar reappropriated.
electric syslems installed on customer facilities
after January I, 2007. Because there is
uncertainty in knowing when a customer will
complete the solar installation, it is difficult to
match the rebate payments to each year's
program budget. The reason for this
reappropriation request is to caOJ: forward
funds from FY 2010 to FY 2011 to help cover
the large amount of pending rebates. Each year
$1,300,000 is budgeted for this program.
Between January 1,2007 and May 19,2010,
over $3,600,000 in rebates has been paid. The
program has reserved an additional $2.700,000
for pending applications.
Utilities Department-Water Fund
$54,000 Customer rebate This reappropriation is being requested for the Recommended $54,000. There is
program for customer rebate program for water/energy sufficient balance in the Fiscal Year
water/energy reduction reduction projects, The Santa Clara Valley 2010 budge! that canbe
projects Water District (SCVWD) currently offers reappropriated.
rebates for innovative water/energy reduction
projects through the existing Water Efficiency
Technology program. The goal oflhe program
is to encourage individuals to implement
innovative projects that will result in cost·
effective water/energy savings. This
reapprorpriation is being requested to expand
the program in Palo Alto in coordination with
SCVWD,
Public Works Department-Storm Drainage Fund
$629,718 Storm Drain Innovative This reappropriation is baing requested for Recommended $629,718. There is
Improvements innovative storm drain improvements. These sufficient balance in the Fiscal Year
funds must be reappropriated because they 2010 budget that can be
have been specifically earmarked for reappropriated.
innovative stann drain improvements per the
2005 Storm Drainage ballot measure approved
by the Palo Alto property owners. These funds
have been budgeted for a storm water rebate
'program that offers incentives to residents and
businesses to reduce stormwater runoff.
However, the rebate program has not generated
sufficient demand to spend the funds. Staff
plans to utilize the unused funds in FY 20 I 1 for
an innovative storm drain jmprovement project
in the Southgate neighborhood.
Page 301'4
'.
$ COMMENTS/REASONS
AMOUNT INTENDED USE FOR NOT COMPLETING IN FY 2010 STATUS
Administrative Serllices Department-Technology Fund
.
$94,000 Update of the City's This reappropriation is being requested for Recommended $94,000. There is
Information contract services related to .the update of the sufficient balance in the Fiscal Year
Teclmology Strategic City's Information Te<;bnology Strategic Plan. 2010 budget that can be
Plan This reappropriation is needed to supplement reappropriated.
the cost of the full project, which is to be
completed in FY 20 I I.
$100,000 Infrastructure This reappropriation is being requested for Recommended $100,000. There is
Replacement infrastructure server equipment purchases and sufficient balance in the Fiscal Year
computer purchases. Not all of the 2010 budget that can be
infrastructure server equipment could be reappropri ated.
purchased in FY 20J O. The FY 2011 budget is I not adequate to cover the cost of all the
necessary servers to adequately serve the
organization.
Page 4 of4
Excerpt from the minutes of July 6, 2010
ATTACHMENT B
FINANCE COMMITTEE
Regular Meeting
July 6,2010
Chairperson Chair Schmid called the meeting to order at 7:03 p.m. in the
Council Conference Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Schmid (Chair), Espinosa, Klein, Scharff
Absent: None
1. Oral Communications
2. Request to Preliminarily Approve Fiscal Year 2010 Reappropriations
Requests to be Carried Forward into Fiscal Year 2011
Lalo Perez, Director of Administrative Services spoke regarding the
reappropriations process. He said that encumbered amounts are reserved
funds per legal agreements. Unencumbered funds are for projects carried
forward into the next year. Staff is bringing the items carried over from FY
2010 to FY 2011 to the Finance Committee. He said that the Municipal Code
allows for preliminary approval of reapproprlations. He said the requested
amount for the General Fund was $185,000. About $95,000 of that was for the
High Speed Rail Project, $40,000 was for the Development Center Restructuring
Project, and $50,000 was for Special Studies out of the Administrative Services
Department. He said that for the Enterprise Funds had a reappropriations
amount of $3.4 million. This included a $2 million Electric Efficiency Financing
program that was previously approved by Council. Lastly there was the
Internal Service Fund totaling $194,000.
Chair Schmid said he wanted to know why 95% of the reappropriations were in
the Enterprise Funds. He said that many of them were for incentives and
rebates. He asked if customers were paying twice since the City offered
behavior based rebates, and then when City revenues drop because of the
rebate programs the rates are increased.
Assistant Director of Utilities Tom Auzenne spoke regarding the rebates. He
said that rebates were to encourage participation in a program. The bills would
then go up for everyone else. The individual participant's bill lowers, thus
incenting them to take action.
Chair Schmid said the community was paying at least a portion of the rate
increase so the average rate payer paid twice for the same goal. He asked why
they didn't simply raise rates which would encourage people to waste less
without the double payment.
Mr. Auzenne said the participant would benefit but the rest of the community
would not with that program.
MOTION: Council Member Scharff moved, seconded by Council Member
Council Member Klein that the Finance Committee recommend that the City
Council preliminarily approve the Fiscal Year 2010 reappropriations to be
carried forward into Fiscal Year 2011.
MOTION PASSED: 4-0
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