HomeMy WebLinkAboutStaff Report 5043
City of Palo Alto (ID # 5043)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 9/16/2014
City of Palo Alto Page 1
Summary Title: Approval of Fiscal Year 2014 Reappropriation Requests to be
Carried Forward into Fiscal Year 2015
Title: Approval of Fiscal Year 2014 Reappropriation Requests to be Carried
Forward Into Fiscal Year 2015
From: City Manager
Lead Department: Ad ministrative Services
Recommendation
Staff recommends that the Finance Committee preliminarily approve the Fiscal Year 2014
reappropriations to be carried forward into Fiscal Year 2015 and direct staff to forward the
Finance Committee’s recommendation to the City Council.
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 from one fiscal year to the next.
However, each year there are a small number of important projects the City carries forward
into the next year with unencumbered funds. The reappropriations process is used for these
projects, which are generally one-time needs. Although the Municipal Code also requires that
the Council provide final approval once the accounting books are closed, the Council must
provide a preliminary approval at this time to allow the reappropriations to move forward.
In 1995, the Municipal Code was amended to allow the Council to preliminarily approve the
reappropriations (Chapter 2.28, Section 2.28.090) because projects may need funding in the
first part of the fiscal year. The Municipal Code also states that unless amended by Council, the
appropriations of capital improvement funds for project expenditures shall co ntinue in full
force and effect until the purpose for which each was made has been accomplished or
abandoned. The purpose of any capital appropriation is deemed abandoned if two years pass
City of Palo Alto Page 2
without any expenditure from the appropriation. On August 18, 2014 , the Finance Committee
approved a recommendation to amend Chapter 2.28, Section 2.28.090 of the Municipal Code to
eliminate the provision allowing for the automatic reappropriation of capital improvement
funds. The City Council is scheduled to approve this change in to the Municipal Code at the
September 22, 2014 City Council meeting. If this ordinance change is approved by the City
Council, staff will bring forth a second reading of the ordinance and the ordinance will become
effective 30 days after the second reading. Therefore, this change would not affect the FY 2014
reappropriation process.
Discussion
As noted above, the Municipal Code requires the “preliminary” approval of reappropriations,
with final approval by the City Council at the same tim e as the normal year-end closing
ordinance. Attachment A identifies those reappropriation requests that staff recommends for
preliminary approval, including any capital projects that have had no expenditures within the
last two years. The projects for which reappropriations are recommended can generally be put
in the following categories:
Timing and Workload Delays- Certain projects were delayed due to competing
workload demands, appropriation of funds late in the fiscal year, or other unanticipated
delays. Examples of projects in this category include the Police Utilization Study, Airport
Legal Outside Counsel, Comprehensive Plan, Business Registry Certificate Program,
Ecological Footprint Analysis, Virtual Private Network Upgrade, Virtual Private Clout , and
Council Chambers Voting System Replacement.
Capital Projects with no Expenditures in FY 2014 or FY 2013- A limited number of
capital projects have not had funds expended for two years, however staff still intends
to complete the project. As mentioned previously in the report, appropriation of capital
improvement funds, per the existing Municipal Code, are to remain in full force and
effect until the purpose for which each was made has been accomplished or
abandoned. The purpose of any capital appropr iation is deemed abandoned if two years
pass without any expenditure from the appropriation. There are two projects that fall
into this category (Municipal Services Center Facilities Study and Long Range CCTV
Cameras). It is anticipated that work will commence on these projects during FY 2015.
Library Materials- Savings were realized in the area of Library Materials in FY 2014 in
anticipation of the 2015 openings of Mitchell Park Library and the Rinconada Library.
These funds, from the Palo Alto Library Foundation, will allow for the library to purchase
publications and materials for library patrons.
Teen Programs- At the June 2, 2014 City Council meeting, the City Council approved a
recommendation from the Policy and Services Committee to use the net revenue
collected from 455 Bryant Street in Fiscal Years 2009 through 2013 ($213,834) to fund
City of Palo Alto Page 3
Teen Programs. Per City Council action/direction, the net revenue from prior years in
the amount of $213,834 in addition to $84,000 for Fiscal Year 2014 f or a total of
$297,834 is to brought forward for reappropriation. A long term expenditure plan will
be brought to the City Council in fall 2014, including the use of estimated Fiscal Year
2015 revenue of $84,000.
Management and Professional Development funds- A number of City employees, as
part of their compensation plan, are eligible for certain self -improvement activities.
These funds are available to certain employees for civic and professional association
memberships, conference participation and travel, educational programs, certain tuition
costs, and professional and trade journal subscriptions, and are recommended to be
carried over to Fiscal Year 2015 to improve and supplement the job and professional
skills of employees.
Resource Impact
The requested items have been previously reviewed and approved by City Council as part of
annual budget processes. Staff has determined that sufficient funds exist to allow for the
approval of the attached Fiscal Year 2014 reappropriations list (At tachment A). For Fiscal Year
2015, staff recommends $1.6 million in carryover funds in the General Fund, and $0.8 million
across all other funds.
Policy Implications
This recommendation is consistent with adopted Council policy.
Environmental Review (If Applicable)
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
Attachments:
ATTACHMENT A: Reappropriations to FY 2015 CMR (XLSX)
2014 Reappropriations
Attachment A
General Fund
Department Fund
Amount
Recommended Reappropriation Justification
City Manager's Office General
Fund
35,000 Business Registry Certificate Program: At the April 29, 2014 City Council meeting, the Council
approved a recommendation to fund a Business Registry Certificate (BRC) Ordinance and Fee
Program as a full cost-recovery replacement/enhancement of the existing Use Certificate Process,
with funds from the City Council Contingency. These funds were to be used for start-up costs
including outreach, training, and program/ technology developm ent; however, staff was not able to
work on this project due to other competing priorities and the funding becoming available late in the
fiscal year. Staff committed to return to Council before December 30, 2014 for approval of the BRC
ordinance and program implementation and launch.
City Manager's Office General
Fund
25,000 Electric Vehicle Consultant:At the May 13, 2014 Policy and Services Committee Meeting, an
ordinance was approved requiring all new multi-family residential and non-residential construction to
provide for current or future installation of electric vehicle (EV) chargers at the recommendation of
the Electric Vehicle Supply Equipm ent Task Force. Funding was allocated on June 12, 2014 from
the City Manager's Contingency to hire a consultant to implement this direction and guide
developers in technical equipment decision making as well as provide training to staff during the
review process; however, since this was not approved until the end of Fiscal Year 2014, staff could
not complete the contract before the end of the fiscal year. On June 16, the City Council approved
the ordinance change.
City Manager's Office General
Fund
25,000 Ecological Footprint Analysis:A study is needed to assess the demand and consumption of
resources by the City as a whole compared to the availability of resources in the ecosystem
surrounding and supporting the City. The results will provide a Palo Alto Consumption Land Use
Matrix (CLUM) and the data from the CLUM will be used for the subsequent Climate Action Plan,
which was presented to the CIty Council on August 11, 2014. Funding was allocated from the City
Manager's Contingency in FY 2014 to conduct this study; however, staff was not able to complete
the project in Fiscal Year 2014.
11503.xlsx 1 9/17/2014,9:20 AM
2014 Reappropriations
Department Fund
Amount
Recommended Reappropriation Justification
Community Services General
Fund
297,834 Teen Programs:At the June 2, 2014 City Council meeting, the Council approved a
recommendation from the Policy and Services Committee to use the net revenue collected from
455 Bryant Street in Fiscal Years 2009 through 2013 ($213,834) to fund Teen Programs for Fiscal
Year 2015. Per Council action, the fund balance of $213,834 is to be reappropriated in addition to
the $84,000 in Fiscal Year 2014 proceeds for a total of $297,834. A long-term expenditure plan will
be brought to Council in fall 2014, including use the estimated revenue for Fiscal Year 2015 of
$84,000.
Developm ent
Services/Fire
General
Fund
50,000 Digitize Fire Prevention Records: This funding will be used to digitize historical records in the
Fire Prevention Bureau (FPB) and implement an electronic records management sy stem for
historical and future documents with collaboration from the Information Technology (IT)
Department. This funding was appropriated in the Fire Department as part of the Fiscal Year 2014
Operating Budget; however, the IT Department is still developing a city wide electronic records
management strategy. As part of the Fiscal Year 2015 Operating Budget, FPB was moved from the
Fire Department to the Development Services Department. Reappropriation of these funds to the
Developm ent Services Department will allow the FPB to move forward with the digitizaton of their
records and move the electronic records into a records management sy stem once IT implements a
citywide solution.
Library General
Fund
600,000 Library Publications: In Fiscal Year 2012, the library received a donation of $1.9 million from the
Palo Alto Library Foundation, of which $1.4 million was appropriated to the CIP and the balance of
$500,000 was appropriated to the General Fund for the purchase of library collection materials
(CMR 2258). The remaining General Fund balance of $100,000 has been reappropriated through
Fiscal Year 2014 in anticipation of the completion of the new Mitchell Park library . In addition, a
second donation of $1.2 million was received from the Palo Alto Library Foundation in Fiscal Year
2014 (CMR 4092) of which $500,000 is requested for reappropriation in anticipation of completion
of the new Rinconada library in Fiscal Year 2015. The balance of $100,000 from CMR 2258 and
$500,000 from CMR 4092, for a total of $600,000, will be used for the purchase of collection
materials in Fiscal Year 2015 in order to provide library patrons with the most current publications
and productions.
People Strategy and
Operations
General
Fund
50,000 Temporary Salaries: Two employees, one working as a Human Resources Assistant and one
working as a Labor Relations Manager will be out on maternity leave for approximately six months
in Fiscal Year 2015. Reappropriating Fiscal Year 2014 vacancy savings will allow PSO to hire
temporary staff to backfill for the vacancies in Fiscal Year 2015.
11503.xlsx 2 9/17/2014,9:20 AM
2014 Reappropriations
Department Fund
Amount
Recommended Reappropriation Justification
People Strategy and
Operations
General
Fund
165,000 Management Development: Savings from Fiscal Year 2013 was carried forward to Fiscal Year
2014 to develop a citywide m anagement training program; however, staffing resources were not
available in Fiscal Year 2014 in PSO to fully implement the program. PSO is fully staffed going into
Fiscal Year 2015, so this funding ($85,000 in savings from FY 2013 and $80,000 from FY 2014) will
be used for training programs in the following areas: Civics and Citizen Engagement, Leadership
and Talent Exchange, Budget, Finance and Procurement, Interpersonal communication, Ethics and
legal awareness, Presentation Skills, Business W riting, Time Management, Project management,
Change Management, SkillSoft for Computer skills, Safety & Security and Personal and
Professional Development.
People Strategy and
Operations
General
Fund
25,000 Wellness Program: Funding will be used to hire a third party vendor to create a holistic, accessible
and fun employee wellness program that encourages and supports healthy eating, work life
balance, and an active lifestyle. The vendor will be responsible for managing a wellness website for
City staff, organizing training seminars, coordinating coaching, organizing team challenges,
organizing an incentive program, coordinating biometric screening, and reporting on the overall
program. The City launched an RFP in Fiscal Year 2014 and received several responses; however,
a vendor was unable to be selected before the end of FY 2014. The Department is currently in the
process of reviewing the proposals and anticipates seletcing a vendor prior to the City's Health and
Wellness Fair in early October 2014.
Planning &
Community
Environment
General
Fund
256,596 Comprehensive Plan:The Comprehensive Plan update is a large project involving significant
community engagement. The Plan is scheduled for completion at the end of 2015. Funds were
budgeted in FY 2014 and $56,596 is available for reapproriation in addition to the Council approved
a BAO on March 17, 2014 for an additional $200,000. These expenses include meetings,
advertising, supplies, note taking, and additional professional services to address unanticipated
events and needs.
Police General
Fund
78,000 Police Utilization Study:In Fiscal Year 2013, funding was allocated for the department to hire a
consultant to conduct a utilization study of overall police operations; however the study was not
completed due to competing workload demands. The funds were reappropriated to Fiscal Year
2014 to conduct the study; however, the Technical Services Division had many other projects that
took precedence (Tri-City Computer Aided Dispatch, Records Management System, Patrol Vehicle
Mobile Audio Video, etc.) and were again unable to conduct the utilization study . Reappropriation of
these funds will allow Technical Services staff to determine the scope of the study , integrate it into
their workload, and hire a consultant to conduct the study in Fiscal Year 2015.
1,607,430$ Total General Fund Reappropriations
11503.xlsx 3 9/17/2014,9:20 AM
2014 Reappropriations
Department Fund
Amount
Recommended Reappropriation Justification
Other Funds
Fund Fund Rec. Amount Reappropriation Justification
Airport Fund 530 50,000 Airport Legal Outside Counsel: On August 11, 2014 the City Council approved the City's
takeover of the Alto Airport, three years sooner than the end of the lease (2017) with the County of
Santa Clara.The 2015 Adopted Operating Budget has assumed a Fiscal Year 2015 takeover.
There were numerous documents that needed to be written, negotiated, and approved by the City
Council prior to the City taking back ownership of the operations. This reappropriation will support
outside legal counsel required due to the workload of the City Attorney's Office and specific
expertise needed in this transaction. Due to the volume and complexity of the work associated with
the takeover, it is anticipated that additional resources, above and beyond this $50,000, will be
required for Airport related outside legal counsel for Fiscal Year 2015.
Capital Improvement
Fund
471 249,780 Municipal Services Center Facilities Study:This project will study options for relocating City
functions, personnel, and equipment currently operating out of the Municipal Services Center (MSC)
and Animal Services Center (ASC), and then repurposing the sites to produce long term economic
benefits for the City. Over the past year, staff has developed a scope of services that could be
performed by a consultant team to advance the project, but the preparation and issuance of an RFP
has yet to be completed. Public W orks staff plans to advance this project in Fiscal Year 2015.
Capital Improvement
Fund
471 65,000 Long Range CCTV Cameras: Reappropriating these funds will allow the Fire Department to
purchase a fire weather camera to replace the current outdated camera that is mounted by Fire
Station 8 in Foothill Park. This funding was originally appropriated as part of the FD-13000 CIP to
replace the existing fire weather camera and add a second camera with thermal detection
capabilities to act as an early warning system for fires in the foothills south of Palo Alto. The
technology needs for the project were reevaluated in Fiscal Year 2014, and it was determined that
the current funding will only be able fund the replacement of the fire weather camera.
Reappropriation of these funds will allow for the purchase of the replacement camera in Fiscal Year
2015. The second thermal detection camera is expected to be brought back for Council
consideration in the future as a separate CIP.
11503.xlsx 4 9/17/2014,9:20 AM
2014 Reappropriations
Department Fund
Amount
Recommended Reappropriation Justification
Storm Drainage Fund 528 45,000 Storm Drainage Pump Station:This reappropriation will allow for a repair to one of the 24' pumps
at the Storm Pump Station located at the Airport. During a routine inspection, it was recently
discovered that water was leading from one of the pumps, which could lead to larger damages.
The repair was not completed in Fiscal Year 2014 as a portion of the funding was used for design
and configuration of storm software, a maintenance contract for storm software, and debris
disposal. Funding will be used, in conjunction with Fiscal Year 2015 approved funding, to repair the
pump in Fiscal Year 2015.
Technology Fund 682 35,000 Council Chambers Voting System Replacement:Reappropriating these funds will allow for the
replacement of the existing analog voting system in the Council Chambers, which is over 20 years
old and no longer supported by the manufacturer. This project was unable to be completed in
Fiscal Year 2014 due to other infrastructure and technology related projects that took precedence.
Technology Fund 682 50,000 Virtual Private Network Upgrade: Reappropriating these funds will allow the IT Department to
complete upgrades to the Virtual Private Network (VPN) in order to enhance the security and
scalability of the computing network, create additional functionality and access of mobile devices to
the network, and ensure the City can upgrade to the most current operating system. This project
was approved as part of the application replacement funding in the Fiscal Year 2014 Budget;
however, IT was unable to be complete the project due to other infrastructure and technology
related projects that took precedence.
Technology Fund 682 275,000 Virtual Private Cloud: Reappropriating these funds will allow the IT Department to implement a
primary and redundant storage area network through the Virtual Private Cloud. This project was
approved as part of the infrastructure replacement funding in the Fiscal Year 2014 Budget, and the
Department was going to award the project prior to the end of Fiscal Year 2014; however, a vendor
could not be selected to meet that deadline. This funding will allow the project to be awarded in
Fiscal Year 2015.
769,780$ Total Other Funds Reappropriations
2,377,210$ Total- All Reappropriations
11503.xlsx 5 9/17/2014,9:20 AM