HomeMy WebLinkAboutStaff Report 8605
City of Palo Alto (ID # 8605)
Policy and Services Committee Staff Report
Report Type: Action Items Meeting Date: 11/14/2017
City of Palo Alto Page 1
Summary Title: CSD Fee Schedule Audit and Status Updates
Title: Discussion of City Auditor's Community Services Department Fee
Schedule Audit Recommendations and Recommend that the City Council
Accept the Status of Audit Recommendations Report.
From: City Manager
Lead Department: Community Services
Recommendation
Staff recommends the Policy and Services Committee recommend that the City Council accept
the attached Status of Audit Recommendations resulting from the City Auditor’s Community
Services Department Fee Schedule Audit.
Background
The City Auditor’s Office issued an audit, the Community Services Department (CSD) Fee
Schedule Audit on February 14, 2017 (Attachment A). The audit objective was to determine if
department fees cover the cost of services to ensure:
Financial sustainability of CSD programs;
Customers pay the appropriate share of service costs, including direct costs and the
indirect cost rate related to the service;
City programs are subsidized in accordance with the City’s cost recovery policy and that
the financial impact of subsidies on total cost recovery is clear.
The City Auditor made three recommendations to strengthen the department’s cost recovery
procedures and processes for monitoring program costs. The key recommendations were:
The City Manager’s Office should coordinate with the City Attorney’s Office and the
Administrative Services Department to revise the City’s cost recovery policy and
Questica budget system procedures to clarify which fees are not subject to laws limiting
fees to cost recovery.
CSD should create a procedure to implement the City’s User Fee Cost Recovery Level
Policy and incorporate relevant and useful elements from its existing “Class Cost
Recovery Policy,” which can then be rescinded.
CSD should work with the Administrative Services Department (ASD) and the
Information Technology Department to configure SAP or include a requirement for the
City of Palo Alto Page 2
proposed new enterprise resource planning system to align cost centers with CSD
programs.
Discussion
The status of the audit recommendations is included in Attachment B. The City Manager’s
Office, Administrative Services Department, and Community Services Department has
implemented one of the three open recommendations and anticipates that the remaining two
recommendations should be substantially completed by fall 2018. Recommendation #2 was
implemented by updating CSD’s Cost Recovery Procedure to include use of the City’s three cost
recovery groups, fee exceptions, and clear guidelines on how to determine cost recovery and
how to monitor cost recovery, among other changes.
Attachments:
Attachment A: City Auditor’s Report: Community Services Department Fee Schedule Audit
Attachment B: Status of Audit Recommendations
Attachments:
Attachment B: Status of Audit Recommendations
Attachment A: City Auditor's Audit of the Community Services Department's Fee
Schedule
Community Services Department: Fee Schedules Audit 1
The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report progress on
implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been implemented.
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status Implementation Update and
Expected Completion Date
Finding: Most Community Services Department (CSD) programs recover costs consistent with City policy;
however, CSD does not consistently apply its cost recovery policies and procedures
1. The City Manager’s Office should coordinate
with the City Attorney’s Office and the
Administrative Services Department to revise
the City’s cost recovery policy and Questica
budget system procedures to clarify which
fees are not subject to laws that limit fees to
cost recovery; modify the cost recovery
categories to allow for fees that recover more
than costs, based on market rates; and
configure the Questica budget system to
support setting fees to recover more than
100 percent of costs when appropriate.
ASD Concurrence: Agree
Target Date: 6/30/2017
Action Plan: ASD staff will coordinate with the
CMO, City Attorney and departments to revise
and implement the recommendations.
Not started. ASD and the CMO expect to begin
the policy update shortly and will
likely complete this
recommendation by Fall 2018.
2. After recommendation 1 is complete, CSD
should create a procedure to implement the
City’s User Fee Cost Recovery Level Policy and
incorporate relevant and useful elements
from its existing “Class Cost Recovery Policy,”
which can then be rescinded. CSD’s new
procedure should:
a. Update and finalize the draft CSD program
level cost recovery targets to be consistent
with the ranges in the City policy. The
procedure should clarify the rationale for
targets assigned to programs and
reference the City policy categories.
b. Clarify exceptions to fees that are set to
target specific cost recovery goals and that
may impact rates for other service
recipients and program cost recovery
CSD Concurrence: Agree
Target Date: 6/30/2017
Action Plan: Staff will develop a new CSD
procedure with the following features:
a. cost recovery targets in alignment with
the City’s three Cost Recovery Level
Groups and clarity around how the
rationale for cost recovery levels for each
major CSD activity as well as references
to City policy categories
b. a list of exceptions to fees and a rationale
for each exception
c. a clear process outlined for staff to use
with instructions on who should assess
costs, where the assessments are
maintained, how they are reviewed, how
Implemented
.
Staff have developed an updated
procedure that includes all of the
identified improvements including:
use of the City’s three cost
recovery groups, fee exceptions,
and clear guidelines on how to
determine cost recovery and how
to monitor. Completion date:
10/25/17
2 Community Services Department: Fee Schedule Audit
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status Implementation Update and
Expected Completion Date
levels, such as discounted rates for certain
groups.
c. Require CSD to annually assess whether
cost recovery levels achieved targets and
address obstacles and opportunities to
meet targets.
d. Describe how to use the fee-setting form
to calculate service costs based on total
costs for the service provided, including
direct costs and an indirect cost rate
calculated by OMB, and set fees that are
consistent with the City’s cost recovery
policy. To minimize administrative efforts,
describe which classes/services may be
grouped together when calculating costs
(i.e., one form may cover more than one
class).
e. Require completion and review of the
forms to ensure that class/service costs are
known and that fees are set to recover
costs consistent with targets. Clarify who is
responsible to complete the forms, when
the forms are completed, and who reviews
and approves the forms.
f. Establish a method to estimate a
reasonably accurate minimum and
maximum class enrollment number to
enter in ACTIVE Net. The procedure should
address what enrollment levels should
prompt a review to determine whether to
cancel a class or increase offerings to
accommodate demand.
to calculate service costs, how to group
activities, and how frequently to do these
assessments
d. a process to incorporate cost recovery
reviews into the Department’s existing
internal quarterly budget review
e. a process outlined for management
responsibility and oversight to ensure
that service cost calculations and fee
setting occur when expected
f. a process outlined for establishing
minimum and maximum enrollments in
Activenet and the rationale and
evaluation of whether to proceed with
classes enrolled below the minimum.
Community Services Department: Fee Schedules Audit 3
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status Implementation Update and
Expected Completion Date
3. CSD should work with ASD and the
Information Technology Department to
configure SAP or include a requirement for
the proposed new enterprise resource
planning system to align cost centers with CSD
programs.
CSD Concurrence: Agree
Target Date: 7/1/2018
Action Plan: While we will begin working on this
in earnest, realistically, we anticipate that we will
not fully implement this recommendation for at
least two budget cycles. We are currently working
with ASD to better align CSD’s Cost Centers in SAP
with our individual lines of business. We expect
we will complete much of this recommendation
by 7/1/2017 but that there will be additional clean
up in the next budget year.
Partly
Implemented
.
CSD has worked with Budget
Office staff to better align cost
centers with CSD programs. Staff
have already updated cost centers
for the Children’s Theatre and
Human Services and are in the
process of updating Recreation,
Teen Programs, and Cubberley.
Staff have also reviewed CSD staff
assignments to ensure that
positions are assigned to the
appropriate cost centers. Staff
anticipates that this review of staff
and budget by program should be
substantially complete this fall but
will likely require clean-up at the
beginning of FY 2019. Expected
Completion date: 11/1/18
CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
April 17, 2017
The Honorable City Council
Palo Alto, California
Policy and Services Committee Recommendation to Accept the
Community Services Department: Fee Schedule Audit
The Office of the City Auditor recommends acceptance of the Community Services Department: Fee
Schedule Audit. At its meeting on February 14, 2017, the Policy and Services Committee approved
and unanimously recommended that the City Council accept the report. The Policy and Services
Committee minutes are included in this packet.
Respectfully submitted,
Harriet Richardson
City Auditor
ATTACHMENTS:
Attachment A: Community Services Department: Fee Schedule Audit (PDF)
Attachment B: Policy and Services Committee Meeting Minutes Excerpt (February 14, 2017)
(PDF)
Department Head: Harriet Richardson, City Auditor
Page 2
CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
February 14, 2017
The Honorable City Council
Palo Alto, California
Community Services Department: Fee Schedule Audit
In accordance with the Fiscal Year 2016 Annual Audit Work Plan, the Office of the City Auditor has
completed the Community Services Department: Fee Schedule Audit. The audit report presents one
finding with a total of three recommendations. The Office of the City Auditor recommends that the
Policy and Services Committee review and recommend to the City Council acceptance of the
Community Services Department: Fee Schedule Audit.
Respectfully submitted,
Harriet Richardson
City Auditor
ATTACHMENTS:
Attachment A: Community Services: Fee Schedule Audit (PDF)
Department Head: Harriet Richardson, City Auditor
Attachment A
Page 2
Attachment A
Community Services Department:
Fee Schedule Audit
December 15, 2016
Office of the City Auditor
Harriet Richardson, City Auditor
Houman Boussina, Senior Performance Auditor
Marisa Lin, FISCal Intern
Attachment A
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Attachment A
OFFICE OF THE CITY AUDITOR
EXECUTIVE SUMMARY:
Community Services Department: Fee Schedule Audit
December 15, 2016
PURPOSE OF THE AUDIT
The purpose of this audit was to determine if fees cover the cost of services provided as expected.
REPORT HIGHLIGHTS
Finding: Most Community
Services Department
(CSD) programs recover
costs consistent with City
policy; however, CSD
does not consistently
apply its cost recovery
policies and procedures
(Page 6)
In FY 2016, six of eight Community Services Department (CSD) programs1
recovered service costs at rates consistent with the City’s 2015 User Fee Cost
Recovery Level Policy. The policy does not require recovery of all service costs,
and acknowledges that the City will subsidize some programs more than others
depending on the level of benefit to the community versus the individual. CSD
can refine and further implement existing fee-setting policies and procedures to
ensure:
• Financial sustainability of its programs.
• Customers pay the appropriate share of service costs, including direct costs
and the indirect cost rate related to the service.
• City programs are subsidized in accordance with the City’s cost recovery
policy and that the financial impact of subsidies on total cost recovery is
clear.
CSD does not consistently apply its cost recovery policies and procedures, and
its internal policy’s four cost ranges are not aligned with the three cost recovery
ranges in the City’s 2015 cost recovery policy. Implementing the City’s cost
recovery policy and updates to procedures may result in changes to CSD’s cost
recovery levels and overall 28 percent recovery rate.
Key Recommendations:
• The City Manager’s Office should coordinate with the City Attorney’s Office
and the Administrative Services Department to revise the City’s cost
recovery policy and Questica budget system procedures to clarify which
fees are not subject to laws limiting fees to cost recovery.
• CSD should create a procedure to implement the City’s User Fee Cost
Recovery Level Policy and incorporate relevant and useful elements from its
existing “Class Cost Recovery Policy,” which can then be rescinded.
• CSD should work with the Administrative Services Department (ASD) and
the Information Technology Department to configure SAP or include a
requirement for the proposed new enterprise resource planning system to
align cost centers with CSD programs.
1 We use the term “programs” throughout the audit as a generic reference to all services, programs, or activities that CSD
offers to the public.
Attachment A
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Attachment A
TABLE OF CONTENTS
Objective ................................................................................................................................................. 1
Background ............................................................................................................................................. 1
Scope ...................................................................................................................................................... 3
Methodology .......................................................................................................................................... 4
Finding:
Most Community Services Department (CSD) programs recover costs consistent with City policy;
however, CSD does not consistently apply its cost recovery policies and procedures .................... 6
Recommendations ........................................................................................................................... 10
Appendix 1: City of Palo Alto User Fee Cost Recovery Level Policy .................................................... 12
Appendix 2: Community Services Department Class Cost Recovery Policy ........................................ 14
Appendix 3: Community Services Department Expenses, Revenues, Subsidies, and Cost Recovery
Percentages (FY 11 to FY 16) ......................................................................................................... 19
Appendix 4: City Manager’s Response ................................................................................................ 22
ABBREVIATIONS
ASD Administrative Services Department
CSD Community Services Department
FY Fiscal Year
GFOA Government Finance Officers Association
OMB Office of Management and Budget
Attachment A
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Attachment A
INTRODUCTION
Objective The purpose of this audit was to determine if fees cover the cost
of services provided as expected.
Background The City provides a variety of services to the public that benefit
the entire community, individual residents, or businesses. The
City has traditionally recovered a portion or all of the costs of
certain services, which otherwise would have been paid from the
General Fund or other sources. Each City department
recommends a schedule of fees and rates for its services to the
Administrative Services Department (ASD) and is required to
collect and deposit fees in accordance with City policies and
procedures. The City Manager issues an annual municipal fee
schedule, which the City Council approves.
Community Services Department
Programs2
The Community Services Department (CSD) operates the Arts and
Sciences; Open Space, Parks, and Golf; and Recreation and
Cubberley Divisions and the Office of Human Services to provide a
diverse range of programs and services designed to increase
knowledge, creativity, artistic expression, physical activity, social
assistance, and enjoyment of the outdoors. Although CSD charges
fees for many services and programs, it provides some that do
not charge fees based on City Council and management direction.
The City’s fee schedule lists specific fees for facility rentals, golf
services, open space and parks, and certain recreation activities
and a range of fees for camps and classes. The specific fees for
camps and classes are provided in CSD’s quarterly Enjoy! catalog.
Calculating costs The Government Finance Officers Association (GFOA)
recommends collecting cost data for a variety of purposes,
including setting user fees and charges and identifying alternative
service delivery options. The full cost of a service encompasses:
• Direct costs, including the salaries, wages, and benefits of
employees who deliver the service; materials and supplies; and
other associated operating costs, such as utilities, rent,
training, and travel.
• Indirect costs, including shared administrative expenses within
the work unit and in support functions outside the work unit
2 We use the term “programs” throughout the audit as a generic reference to all services, programs, or activities that CSD
offers to the public.
Attachment A
(e.g., legal, finance, human resources, facilities,3 maintenance,
technology). Shared costs should be apportioned by a
transparent, systematic, and rational allocation methodology.
General fund charges for
services
The City’s General Fund revenue includes “charges for services,”
which includes fees for fire services to Stanford, paramedic
services, golf-related activities, art and science classes, and plan
checks. “Charges for services” was the City’s third largest source
of revenue and comprised $25.4 million (14 percent) of the City’s
General Fund revenue in Fiscal Year (FY) 2015.
Legal framework Under California law, municipalities have wide discretion to
establish charges for use of government facilities, including park
entrance fees and facility rentals, and participation in elective
services and programs, such as arts and recreation classes.
Although the California Constitution, Article XIII C, as amended by
Proposition 26 in November 2010 (“Prop. 26”), limits some types
of user fees to the estimated reasonable cost of providing the
service, it exempts the fees and charges addressed in this audit.
For these fees, it is lawful for the City to establish charges at,
below, or above the cost of providing the service.
User Fee Cost Recovery Policy The City adopted a User Fee Cost Recovery Level Policy in
May 2015 (see Appendix 1). Its purpose is to set cost recovery
goals for City services. The policy acknowledges that fees should
not be charged or should be low for services that benefit the
entire community or for services that promote City goals and
policies, such as healthy habits and environmental stewardship.
The policy identifies three cost recovery levels and says that
recreational activity fees should generally be set at the medium
level, which means that fees would generally recover
30.1 percent to 70 percent of the related costs. The policy also
states, however, that high-demand recreational activities may
have a high cost recovery level due to high enrollment per class.
The City began to align fees with the policy during the FY 2017
budget process.
CSD Class Cost Recovery Policy The City adopted CSD’s Class Cost Recovery Policy in 2007 “as a
guideline to establish cost-recovery targets for fee-based classes
and camps within the divisions of Recreation & Golf, Arts &
3 According to a November 2013 City Manager report, the City does not include facility expense as a cost component to
calculate cost recovery.
Attachment A
Sciences, and Open Space & Parks.”4 The policy identified four
cost recovery groups, which represent the low to high ends of the
cost recovery spectrum:
• Group I: Community benefit
• Group II: Majority community benefit
• Group III: Equal community benefit and personal benefit
• Group IV: Majority personal benefit
The policy, which CSD developed as a result of an October 2006
audit recommendation, requires programs to be reviewed
annually and fee adjustments to be made to ensure that
established cost recovery levels are met. CSD drafted another
document that assigned categories of classes and activities to a
group.
Scope Our original audit scope included financial information through
FY 2015; however, the audit process extended through December
2016, which provided an opportunity to include certain FY 2016
financial information to assess the extent to which CSD’s fees
recover the cost of its programs. We did not update background,
sampling, and class enrollment information to include FY 2016
data. We did not assess fees that other departments, such as
Planning and Community Environment and Development
Services, charge for services that primarily benefit service
recipients. We also excluded activities that primarily benefit the
community and do not generate revenues.
CSD’s cost recovery and fee setting policies and procedures cover
only fee-based classes and camps. However, because cost
recovery data for individual classes was not readily available, we
focused our assessment on cost recovery for CSD divisions and
programs overall. CSD did not have written procedures specific to
other program areas.
We did not benchmark Palo Alto’s CSD program cost recovery
levels with other jurisdictions because other studies identified
difficulties due to variations in service levels, service bundling,
pricing structures, and methods of budgeting and accounting for
revenues. For example, unlike most jurisdictions, CSD operates
the Office of Human Services, the Children’s Theatre, the Art
Center, an artist studio program, and the Junior Museum and
Zoo.
4 CSD has reorganized since 2007 and now includes the Arts and Sciences; Open Space, Parks, and Golf; and Recreation and
Cubberley Divisions and the Office of Human Services.
Attachment A
Methodology To accomplish our audit objective, we:
• Interviewed Office of Management and Budget (OMB) and CSD
staff responsible for fee setting to understand the relevant data
and policies and procedures.
• Obtained clarification from the City Attorney’s Office regarding
laws and regulations applicable to CSD fees.
• Conducted a risk assessment to identify and prioritize risks
associated with setting fees.
• Reviewed applicable laws and regulations, and fee setting best
practices from the Government Finance Officers Association.
• Reviewed published audit reports and included audit steps to
address risks identified in the City’s 2006 audit report on CSD
class cost recovery and relevant audit and technical reports
from other jurisdictions.
• Calculated CSD’s cost recovery rates from FY 2011 through
FY 2016 by compiling and mapping relevant financial data from
the City’s SAP system, CSD, and OMB. The SAP financial data
consisted of actual City revenues and expenses, excluding
noncash expenses such as depreciation.
• Compared CSD’s cost recovery rates with ranges specified in
the City’s cost recovery policy.
• Reviewed a judgmental sample of CSD fees to assess the fee-
setting process and alignment of cost recovery with the City’s
cost recovery policy.
• Reviewed CSD class enrollment data.
Sampling methodology We judgmentally selected and reviewed a sample of 33 CSD fees
to assess whether CSD’s cost recovery procedures are consistent
with the City’s cost recovery goals and objectives. Our sample
covered classes, camps, registration seasons, and varying
participant and fee levels. Because this was a judgmental sample,
our conclusions cannot be projected to the total population of
CSD classes.
Because expense data was not readily available for the 33 CSD
classes in our sample, we could not assess whether cost recovery
levels for each class were aligned with the City’s cost recovery
policy. The finding provides an assessment of cost recovery for
CSD programs overall, assuming that most classes or services
within each program align with the same City policy cost recovery
category.
Attachment A
Data reliability We assessed the accuracy and completeness of CSD revenue and
class enrollment data in its ACTIVE Net recreation management
software system by reconciling the data with the City’s SAP
system and published CSD course catalogs. Based on these
assessments and discussions with ASD accounting staff, we
concluded that the data were sufficiently reliable for the
purposes of this report.
Because SAP data, which the City’s external financial auditor
audits annually, is widely accepted as the source for financial data
in the City, we relied on the data without assessing data
reliability.
Compliance with government
auditing standards
We conducted this audit of CSD class fees in accordance with our
FY 2016 Annual Audit Work Plan and generally accepted
government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
We would like to thank management and staff in the Administrative Services and Community
Services Departments for their time, cooperation, and assistance during the audit process.
Attachment A
Finding Most Community Services Department (CSD) programs recover
costs consistent with City policy; however, CSD does not
consistently apply its cost recovery policies and procedures
In FY 2016, six of eight Community Services Department (CSD)
programs recovered service costs at rates consistent with the City’s
2015 User Fee Cost Recovery Level Policy. The policy does not
require recovery of all service costs, and acknowledges that the City
will subsidize some programs more than others depending on the
level of benefit to the community versus the individual. CSD can
refine and further implement existing fee-setting policies and
procedures to ensure:
• Financial sustainability of its programs.
• Customers pay the appropriate share of service costs, including
direct costs and the indirect cost rate related to the service.
• City programs are subsidized in accordance with the City’s cost
recovery policy and that the financial impact of subsidies on total
cost recovery is clear.
CSD does not consistently apply its cost recovery policies and
procedures, and its internal policy’s four cost ranges are not aligned
with the three cost recovery ranges in the City’s 2015 cost recovery
policy. Implementing the City’s cost recovery policy and updates to
procedures may result in changes to CSD’s cost recovery levels and
overall 28 percent recovery rate.
Most CSD programs recover
costs at rates consistent with
City policy
CSD recovered $8.0 million (28 percent) of its $28.5 million in service
costs in FY 2016 through fees and outside contributions. Exhibit 1
shows cost recoveries for CSD program areas. Based on the City’s
2015 User Fee Cost Recovery Policy, eight program areas would
generally be expected to recover at least 30.1 percent of costs and
four would generally be expected to recover 30 percent or less of
costs. Although CSD has its own class cost recovery policy, it is
applicable only to fee-based classes and camps and is not consistent
with the City’s newer cost recovery policy, which has broader
applicability. The amount of future cost recovery will depend on
Council and City management decisions within the broad framework
of the City policy.
Attachment A
Although the City’s User Cost Fee Recovery Level Policy was not
expected to be implemented until the FY 2017 budget process,
Exhibit 1 shows that six of CSD’s eight programs that would generally
be expected to recover at least 30.1 percent of costs did so in
FY 2016.
• The cost recovery rate for the Junior Museum and Zoo is less than
the policy range because the City does not currently charge
admission fees to the facility, which is considered a community
benefit.
• The cost recovery rate for Theatre, Music, & Dance is lower
because the Children’s Theatre does not charge to participate in
productions, the City fully subsidizes the three theatre groups’
exclusive use of the Stern Community Theatre, and the theatre
groups do not meet the City’s $90,000 revenue target for annual
ticket sales that they provide to the City. CSD estimates that the
EXHIBIT 1: CSD Cost Recovery by Program Area (Fiscal Year 2016)
CSD Programs
CURRENT POTENTIAL
Expense
(millions)
Revenue
(millions)
Recovery
Percentage
General Fund
Subsidy (millions)
City Policy Cost
Recovery RangeA
CSD programs that should generally recover at least 30.1 percent of costsA
1. Art Center (Exhibitions
& Visual Arts) $1.8 $0.8 43.2% $1.0 30.1% - 70%
2. Theatre, Music, &
Dance $2.6 $0.8 29.8% $1.8 30.1% - 70%
3. Junior Museum and
Zoo $2.9 $0.7 22.4% $2.3 30.1% - 70%
4. Aquatics $0.9 $0.4 44.8% $0.5 30.1% - 70%
5. Middle School Athletics $0.5 $0.3 61.3% $0.2 30.1% - 70%
6. Recreation $3.9 $2.1 53.6% $1.8 30.1% - 70%
7. Cubberley $2.1 $0.9B 45.3% $1.1 30.1% - 70%
8. Golf $1.8 $1.5 84.2% $0.3 70.1% - 100%
CSD programs that should generally recover between 0% and 30% of costsA
9. Public Art, Concerts, &
Art Partnerships $0.3 $0.0 1.0% $0.3 0% - 30%
10. Special Events $0.3 $0.0 5.8% $0.3 0% - 30%
11. Parks & Open Space $9.2 $0.5 5.0% $8.7 0% - 30%
12. Human Services $2.1 $0.0 0.5% $2.1 0% - 30%
A Based on City of Palo Alto 2015 User Fee Cost Recovery Level Policy ranges as applied by the Office of the City Auditor.
However, some activities within a program area may have different cost recovery expectations, including services that
are either not expected to generate fees or warrant lower or higher fees due to their level of benefit to the community
or individual.
B Does not include revenue from leases managed by ASD that are not considered “charges for services.”
Source: Office of the City Auditor cost recovery analysis based on City policy and SAP financial data.
Attachment A
theatre group subsidies have a combined value of about $500,000
annually.
• Golf is the least subsidized program. Golf revenues surpassed
expenses from FY 2011 through FY 2013 (see Appendix 3), but the
City began subsidizing Golf in FY 2014 and recovered about 84
percent of costs in FY 2016.
Some CSD programs do not
have cost recovery objectives
Exhibit 1 shows four programs that do not have significant cost
recovery objectives: Public Art, Concerts, & Art Partnerships; Special
Events; Parks & Open Space; and Human Services. Because most of
the expenses for Parks & Open Space are for maintenance, there
currently is limited opportunity to recover those costs. Cost recovery
rates may reflect the Council’s policy to subsidize, in part or in full,
services that benefit the public at large or promote health activities
and educational enrichment to the community, but the City policy
does not provide detailed expectations regarding subsidies for
specific activities. CSD’s implementation of the City policy will help
define where subsidies supplement or supplant fees for specific
services.
Cost recovery rates fluctuate
from year to year
CSD’s total cost recovery has ranged from a high of 34 percent in
FY 2011 to a low of 28 percent in FY 2015 and FY 2016. The decline is
mostly due to lower Golf revenues. Appendix 3 shows program
expenses, revenues, general fund subsidies, and cost recoveries, by
CSD program, from FY 2011 to FY 2016.
CSD has not consistently
applied its cost recovery
policies and procedures
CSD has developed policies and tools to meet cost recovery
objectives but has not updated them since 2007 or consistently
applied them. These include fee-setting templates, a draft document
with specific program cost recovery targets, and a 2007 Class Cost
Recovery Policy. The City’s policy does not acknowledge that state
law exempts recreation programs and facility rentals from the cost
recovery limits that apply to many other City services.
Fee-setting templates and
tools not consistently used
CSD created a document to show the cost recovery targets for its
programs and a fee-setting template to calculate fees based on
projected costs, revenues, enrollment, and cost recovery targets.
However, CSD does not have a process to ensure that the templates
are completed, reviewed, and used, or that the targets in the
templates align with the cost recovery target document. CSD had not
used the template to set fees for any of the 33 classes and camps in
our sample, although some program coordinators provided
completed forms as examples for the audit. Updating the cost
recovery target document and consistently using the templates
Attachment A
would help ensure compliance with the City’s 2015 User Fee Cost
Recovery Level Policy.
SAP not configured to help
monitor cost recovery
As shown in Exhibit 1, comparing cost recovery levels by program
area with City policy cost recovery ranges is useful to assess if the
City is meeting cost recovery objectives. The City’s SAP financial
system tracks revenues and expenses by City department, division,
fund, and cost centers that generally correspond to services.
However, SAP cost centers are not aligned with program revenues
and expenses. Calculating cost recovery by program area, including
appropriately allocating indirect costs, requires a manual process to
map SAP cost centers to program areas. Also, there is no procedure
or tool to allocate division, department, and City indirect costs to
program areas. Calculating cost recovery, including both direct and
indirect costs, by program area can help CSD staff ensure that it sets
fees at a level that meets the City’s cost recovery objectives.
CSD Class Cost Recovery
Policy not aligned with City
policy and is redundant
CSD has a 2007 Class Cost Recovery Policy but has not yet updated it
to align it with the City’s 2015 User Fee Cost Recovery Level Policy,
which was expected to be used starting with the FY 2017 budget
process. CSD’s policy:
• Only addresses fee-based classes and camps and excludes services
such as golf green fees.
• Has four cost-recovery groups with targets based on the benefit
level to the community or the individual versus the three cost
recovery groups in the City’s policy.
• Has cost recovery targets that are based on direct cost plus
overhead rates for department and City overhead; the City policy
targets are based on total cost but does not specify how to include
overhead.
Class enrollment levels may
affect anticipated cost
recovery
Of the 33 CSD classes we reviewed, 14 (42 percent) had enrollment
that was less than the minimum or more than the maximum listed in
ACTIVE Net. Because of this, we looked at FY 2015 enrollment levels
in ACTIVE Net and found that 428 (19 percent) of the 2,238 activities
or classes had actual enrollment under the stated minimum. CSD
does not have written policies and procedures to ensure that class
enrollment levels support the City’s cost recovery policy. Although
CSD program coordinators use their judgment, based on knowledge
of past enrollment levels, ideal class size, and room capacity to enter
minimum and maximum enrollment levels in ACTIVE Net, they do not
always cancel classes or limit enrollment based on these numbers.
According to CSD staff, enrollment levels below the minimum in
Attachment A
ACTIVE Net may not adversely impact cost recovery for contracted
classes because the contracts compensate instructors based on the
number of enrollees. However, this does not consider that overhead
costs for that class or activity may not be recovered or that the
facility may have been better used for a different activity.
State law exemption to cost
recovery limit not reflected in
policies and procedures
The City’s 2015 User Fee Cost Recovery Level Policy; budget, fee
setting, and publishing tool (i.e., the Municipal Fee Module of the
City’s Questica budget system); and procedures to use the Municipal
Fee Module limit fees the City can charge to 100 percent of service
costs. This limit applies to fees for recreation services such as golf
where market pricing may lawfully provide revenues that exceed
costs. Prop. 26 exempts recreation programs and facility rentals from
the cost recovery limits that apply to some service costs, such as
permit or utilities fees. Minutes for various Council meetings show
that fee-setting decisions were influenced by this misunderstanding
of state law.
Effects of lower than
expected cost recovery
Lower than expected cost recovery could result in:
• The City subsidizing more programs than expected or not being
able to offer some programs.
• Some residents paying more or less than appropriate for services
they benefit from.
• The City not achieving its social goals and objectives, such as
subsidizing low-income individuals, seniors, and/or youth, because
it subsidizes other unintended individuals.
Recommendations 1. The City Manager’s Office should coordinate with the City
Attorney’s Office and the Administrative Services Department to
revise the City’s cost recovery policy and Questica budget system
procedures to clarify which fees are not subject to laws that limit
fees to cost recovery; modify the cost recovery categories to
allow for fees that recover more than costs, based on market
rates; and configure the Questica budget system to support
setting fees to recover more than 100 percent of costs when
appropriate.
2. After recommendation 1 is complete, CSD should create a
procedure to implement the City’s User Fee Cost Recovery Level
Policy and incorporate relevant and useful elements from its
existing “Class Cost Recovery Policy,” which can then be
rescinded. CSD’s new procedure should:
a. Update and finalize the draft CSD program level cost recovery
Attachment A
targets to be consistent with the ranges in the City policy.
The procedure should clarify the rationale for targets
assigned to programs and reference the City policy
categories.
b. Clarify exceptions to fees that are set to target specific cost
recovery goals and that may impact rates for other service
recipients and program cost recovery levels, such as
discounted rates for certain groups.
c. Require CSD to annually assess whether cost recovery levels
achieved targets and address obstacles and opportunities to
meet targets.
d. Describe how to use the fee-setting form to calculate service
costs based on total costs for the service provided, including
direct costs and an indirect cost rate calculated by OMB, and
set fees that are consistent with the City’s cost recovery
policy. To minimize administrative efforts, describe which
classes/services may be grouped together when calculating
costs (i.e., one form may cover more than one class).
e. Require completion and review of the forms to ensure that
class/service costs are known and that fees are set to recover
costs consistent with targets. Clarify who is responsible to
complete the forms, when the forms are completed, and
who reviews and approves the forms.
f. Establish a method to estimate a reasonably accurate
minimum and maximum class enrollment number to enter in
ACTIVE Net. The procedure should address what enrollment
levels should prompt a review to determine whether to
cancel a class or increase offerings to accommodate demand.
3. CSD should work with ASD and the Information Technology
Department to configure SAP or include a requirement for the
proposed new enterprise resource planning system to align cost
centers with CSD programs.
Attachment A
APPENDIX 1 – City of Palo Alto User Fee Cost Recovery Level Policy
Attachment A
Attachment A
APPENDIX 2 – Community Services Department’s Class Cost Recovery Policy
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
APPENDIX 3 – Community Services Department Expenses, Revenues, Subsidies, and
Cost Recovery Percentages (FY 11 to FY 16)
Year CSD Programs/Divisions Expense Revenue
General Fund
Subsidy/Revenue5
Cost
Recovery %
FY
2
0
1
1
Art Center (Exhibitions & Visual Arts) $1,244,402 $450,597 $793,805 36%
Public Art, Concerts, & Art Partnerships $203,404 $2,986 $200,418 1%
Theatre, Music, & Dance $2,217,346 $553,620 $1,663,726 25%
Junior Museum and Zoo $2,353,146 $551,066 $1,802,080 23%
Aquatics $777,592 $469,109 $308,483 60%
Middle School Athletic $460,362 $258,597 $201,765 56%
Recreation $3,323,113 $1,646,006 $1,677,107 50%
Special Events $226,955 $13,593 $213,362 6%
Cubberley $1,825,519 $865,944 $959,575 47%
Golf $2,076,378 $2,817,141 -$740,764 136%
Parks & Open Space $7,107,273 $380,431 $6,726,842 5%
Human Services $1,557,612 $14,027 $1,543,585 1%
2011 Total $23,373,103 $8,023,117 $15,349,985 34%
FY
2
0
1
2
Art Center (Exhibitions & Visual Arts) $1,209,679 $303,594 $906,085 25%
Public Art, Concerts, & Art Partnerships $230,632 $4,399 $226,233 2%
Theatre, Music, & Dance $2,254,777 $548,622 $1,706,155 24%
Junior Museum and Zoo $2,471,170 $512,266 $1,958,904 21%
Aquatics $820,346 $500,110 $320,236 61%
Middle School Athletic $516,139 $288,737 $227,402 56%
Recreation $3,135,541 $1,493,968 $1,641,572 48%
Special Events $131,480 $15,686 $115,794 12%
Cubberley $1,959,129 $838,380 $1,120,749 43%
Golf $1,951,978 $2,740,197 -$788,219 140%
Parks & Open Space $7,948,316 $398,164 $7,550,152 5%
Human Services $1,535,920 $11,996 $1,523,924 1%
2012 Total $24,165,107 $7,656,120 $16,508,987 32%
5 Negative values for Golf through FY 2013 mean that revenues exceeded expenses and the General Fund received revenue
as a result.
Attachment A
Year CSD Programs/Divisions Expense Revenue
General Fund
Subsidy/Revenue5
Cost
Recovery %
FY
2
0
1
3
Art Center (Exhibitions & Visual Arts) $1,453,828 $522,431 $931,397 36%
Public Art, Concerts, & Art Partnerships $240,109 -$264 $240,373 0%
Theatre, Music, & Dance $2,107,253 $593,381 $1,513,872 28%
Junior Museum and Zoo $2,361,788 $498,189 $1,863,599 21%
Aquatics $834,692 $569,079 $265,613 68%
Middle School Athletic $550,576 $346,143 $204,432 63%
Recreation $3,031,055 $1,795,906 $1,235,149 59%
Special Events $128,069 $21,580 $106,490 17%
Cubberley $1,984,666 $905,257 $1,079,409 46%
Golf $2,184,277 $2,528,484 -$344,207 116%
Parks & Open Space $8,395,630 $418,449 $7,977,181 5%
Human Services $1,479,075 $11,716 $1,467,359 1%
2013 Total $24,751,017 $8,210,351 $16,540,666 33%
FY
2
0
1
4
Art Center (Exhibitions & Visual Arts) $1,502,846 $604,625 $898,221 40%
Public Art, Concerts, & Art Partnerships $356,030 $5,943 $350,086 2%
Theatre, Music, & Dance $2,443,410 $744,354 $1,699,056 30%
Junior Museum and Zoo $2,516,689 $594,013 $1,922,676 24%
Aquatics $787,284 $454,388 $332,896 58%
Middle School Athletic $567,044 $305,118 $261,926 54%
Recreation $3,050,877 $1,982,081 $1,068,796 65%
Special Events $95,576 $12,738 $82,838 13%
Cubberley $2,065,456 $844,367 $1,221,089 41%
Golf $1,972,998 $1,761,100 $211,897 89%
Parks & Open Space $9,018,480 $419,092 $8,599,387 5%
Human Services $1,862,867 $14,532 $1,848,335 1%
2014 Total $26,239,555 $7,742,353 $18,497,202 30%
Attachment A
Year CSD Programs/Divisions Expense Revenue
General Fund
Subsidy/Revenue5
Cost
Recovery %
FY
2
0
1
5
Art Center (Exhibitions & Visual Arts) $1,672,498 $654,852 $1,017,646 39%
Public Art, Concerts, & Art Partnerships $284,814 $1,520 $283,294 1%
Theatre, Music, & Dance $2,476,064 $751,020 $1,725,045 30%
Junior Museum and Zoo $2,757,841 $608,276 $2,149,565 22%
Aquatics $856,545 $449,826 $406,719 53%
Middle School Athletic $548,856 $314,146 $234,710 57%
Recreation $3,413,008 $2,010,039 $1,402,969 59%
Special Events $98,392 $22,037 $76,355 22%
Cubberley $2,142,635 $840,003 $1,302,632 39%
Golf $1,829,851 $1,576,872 $252,979 86%
Parks & Open Space $9,177,995 $410,959 $8,767,036 4%
Human Services $1,868,762 $9,588 $1,859,173 1%
2015 Total $27,127,262 $7,649,139 $19,478,123 28%
FY
2
0
1
6
Art Center (Exhibitions & Visual Arts) $1,813,481 $783,217 $1,030,264 43%
Public Art, Concerts, & Art Partnerships $316,328 $3,085 $313,243 1%
Theatre, Music, & Dance $2,580,474 $769,582 $1,810,892 30%
Junior Museum and Zoo $2,944,558 $659,974 $2,284,584 22%
Aquatics $948,180 $424,848 $523,332 45%
Middle School Athletic $517,671 $317,540 $200,132 61%
Recreation $3,882,819 $2,079,900 $1,802,919 54%
Special Events $286,205 $16,704 $269,501 6%
Cubberley $2,080,703 $942,867 $1,137,836 45%
Golf $1,839,437 $1,548,993 $290,444 84%
Parks & Open Space $9,168,139 $460,215 $8,707,924 5%
Human Services $2,084,917 $11,257 $2,073,660 1%
2016 Total $28,462,913 $8,018,182 $20,444,731 28%
Attachment A
APPENDIX 4 – City Manager’s Response
Attachment A
The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report progress on
implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been implemented.
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status
Finding: Most Community Services Department (CSD) programs recover costs consistent with City policy; however, CSD does not consistently
apply its cost recovery policies and procedures
1. The City Manager’s Office should coordinate
with the City Attorney’s Office and the
Administrative Services Department to revise
the City’s cost recovery policy and Questica
budget system procedures to clarify which
fees are not subject to laws that limit fees to
cost recovery; modify the cost recovery
categories to allow for fees that recover more
than costs, based on market rates; and
configure the Questica budget system to
support setting fees to recover more than
100 percent of costs when appropriate.
ASD Concurrence: Agree
Target Date: 6/30/2017
Action Plan: ASD staff will coordinate with the
CMO, City Attorney and departments to revise
and implement the recommendations.
2. After recommendation 1 is complete, CSD
should create a procedure to implement the
City’s User Fee Cost Recovery Level Policy and
incorporate relevant and useful elements
from its existing “Class Cost Recovery Policy,”
which can then be rescinded. CSD’s new
procedure should:
a. Update and finalize the draft CSD program
level cost recovery targets to be consistent
with the ranges in the City policy. The
procedure should clarify the rationale for
targets assigned to programs and
reference the City policy categories.
b. Clarify exceptions to fees that are set to
target specific cost recovery goals and that
may impact rates for other service
recipients and program cost recovery
levels, such as discounted rates for certain
CSD Concurrence: Agree
Target Date: 6/30/2017
Action Plan: Staff will develop a new CSD
procedure with the following features:
a. cost recovery targets in alignment with
the City’s three Cost Recovery Level
Groups and clarity around how the
rationale for cost recovery levels for
each major CSD activity as well as
references to City policy categories
b. a list of exceptions to fees and a
rationale for each exception
c. a clear process outlined for staff to use
with instructions on who should assess
costs, where the assessments are
maintained, how they are reviewed,
Attachment A
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status
groups.
c. Require CSD to annually assess whether
cost recovery levels achieved targets and
address obstacles and opportunities to
meet targets.
d. Describe how to use the fee-setting form
to calculate service costs based on total
costs for the service provided, including
direct costs and an indirect cost rate
calculated by OMB, and set fees that are
consistent with the City’s cost recovery
policy. To minimize administrative efforts,
describe which classes/services may be
grouped together when calculating costs
(i.e., one form may cover more than one
class).
e. Require completion and review of the
forms to ensure that class/service costs are
known and that fees are set to recover
costs consistent with targets. Clarify who is
responsible to complete the forms, when
the forms are completed, and who reviews
and approves the forms.
f. Establish a method to estimate a
reasonably accurate minimum and
maximum class enrollment number to
enter in ACTIVE Net. The procedure should
address what enrollment levels should
prompt a review to determine whether to
cancel a class or increase offerings to
accommodate demand.
how to calculate service costs, how to
group activities, and how frequently to
do these assessments
d. a process to incorporate cost recovery
reviews into the Department’s existing
internal quarterly budget reviews
e. a process outlined for management
responsibility and oversight to ensure
that service cost calculations and fee
setting occur when expected
f. a process outlined for establishing
minimum and maximum enrollments in
Activenet and the rationale and
evaluation of whether to proceed with
classes enrolled below the minimum.
Attachment A
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree
and Target Date and Corrective Action
Plan
Status
3.CSD should work with ASD and the
Information Technology Department to
configure SAP or include a requirement for
the proposed new enterprise resource
planning system to align cost centers with CSD
programs.
CSD Concurrence: Agree
Target Date: 7/1/2018
Action Plan: While we will begin working on this
in earnest, realistically, we anticipate that we will
not fully implement this recommendation for at
least two budget cycles. We are currently
working with ASD to better align CSD’s Cost
Centers in SAP with our individual lines of
business. We expect we will complete much of
this recommendation by 7/1/2017 but that there
will be additional clean up in the next budget
year.
Attachment A
POLICY AND SERVICES COMMITTEE
TRANSCRIPT
Page 1 of 19
Special Meeting Tuesday, February 14, 2017
Chairperson Wolbach called the meeting to order at 6:02 P.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
[First 34 minutes recorded on a digital device]
Chair Wolbach: Alright, let's call bring this meeting of the Policy and Services
Committee to order.
Present: DuBois, Kniss, Kou, Wolbach (Chair)
Absent:
Vice Mayor Kniss: Four present, exhausted Council Members.
Oral Communications
Chair Wolbach: Do we have any members of the public that would like to
speak? Looks like we don’t have any Oral Communications.
Agenda Items
1.Community Services Department: Fee Schedule Audit.
Chair Wolbach: Let’s move onto our first Action Item of the evening.
(Inaudible) Community Services Department Fee Schedule Audit. I’ll turn it
over to our City Auditor.
Harriet Richardson, City Auditor: Thank you. Good evening Mr. Chair and
members of the Committee. Harriet Richardson, City Auditor. We’re here to
present the audit of fee schedules in the Community Services Department.
Houman Boussina, who’s sitting beside me was the lead auditor on that and
we also had a Stanford intern, [phonetics] [Merser Lynn] who worked on
that with us. She couldn’t attend tonight but she as a great asset to our
office this past summer. Then, we also have Community Services Center to
answer questions after. The audit objective was whether the fees –
Attachment B
TRANSCRIPT
Page 2 of 19
Policy and Services Committee Special Meeting Transcript 02/14/17
community service fees for their projects cover the cost of services provided
as expected. We focused the audit on CSD primarily, because other
departments we identified that have fees for services had had some recent
fee studies and CSD had not. CSD implemented a cost recovery policy in
2007 and in May 2015, the City adopted a Citywide user fee cost recovery
level policy to set cost recovery goals for City services. We looked at the
extent which CSD’s fee setting practices might need to be updated to align
with the newer Citywide Cost Recovery Policy and because cost recovery
data was not available for individual classes, we focused our assessment on cost recovery for CSD divisions and programs overall. I am going to turn the
presentation over to Houman, who’s going to go through the audit
(inaudible) findings and recommendations.
Houman Boussina, Senior Performance Auditor: The Audit Report has one
finding. Most CSD programs recover cost (inaudible) with City policy,
however, CSD does not consistently apply its cost recovery policies and
procedures. We found that CSD’s total cost recovery has ranged from a high
of 34 percent in Fiscal Rear ‘11 to a low of 28 percent in Fiscal Year ‘15 and
‘16. The decline is mostly due to lower golf revenues. CSD has developed
policies and tools to meet cost recovery objectives…
Vice Mayor Kniss: Can I just ask quickly? Are you on Packet Page 16? Do
you know where you are? (Crosstalk) Am I following along with the right
one?
Ms. Richardson: Did you get the handout?
Vice Mayor Kniss: Yes. It should be the same.
Council Member DuBois: Page 32 for the findings.
Mr. Boussina: What I’m reading is (inaudible) bullets.
Ms. Richardson: He’s using the PowerPoint notes. Yes.
Vice Mayor Kniss: Ok, good.
Mr. Boussina: Alright…
Vice Mayor Kniss: We’re still waiting (inaudible) with the bouncing ball here.
Ms. Richardson: I think you have – yeah, you have the separate hand out
there.
Attachment B
TRANSCRIPT
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Policy and Services Committee Special Meeting Transcript 02/14/17
Mr. Boussina: CSD has policies and tools to meet cost recovery objectives
but has not updated them since 2007 or consistently applied them. CSD has
a 2007 cost recovery policy but has not yet updated that to align with the
City’s 2015 User Fee Cost Recovery Level Policy which was expected to be
used starting with the Fiscal Year ‘17 budget process. The City’s 2015 User
Cost Recovery Policy limits fee the City can charge to 100percent of service
costs, however, Prop. 16 (inaudible) recreation programs such as golf and
facility rentals, from the cost recovery limits where market pricing may
provide revenues that exceed costs. Staff reports presented to Council when the City was developing its Cost Recovery Policy, misstated the requirements
of the law, which influences decisions regarding the policy. As (inaudible)
cost was another area we looked at. We found that they are not aligned with
the program revenues and expenses. Calculating cost recovery by program
area including appropriately allocating a direct cost requires a manual
process currently (inaudible) cost centers to program areas. The Audit
Report includes three recommendations. These include coordinating with the
City’s Attorney’s office and ASD who provides the City’s Cost Recovery Policy
and Questica procedures by which fees are not subject to laws limiting fees
to cost recovery. Creating a procedure to implement the City’s User Fee Cost
Recovery Policy and incorporating (inaudible) in useful elements from CSD’s
existing Class Cost Recovery Policy which then can be rescinded and working with ASD and the IT Department to configure SAP to include a requirement
for the proposed new ERP system to align cost centers with CSD programs.
Just the correction, I may have said Prop. 16 instead of Prop. 26 as what
exempts recreational grounds from the cost recovery limits. Alright…
Ms. Richardson: That concludes our presentation and we’ll answer your
questions and the departments here to answer your questions.
Chair Wolbach: Ok, we’ll turn to Committee Members for questions or
comments. Liz, (inaudible) you have some questions?
Vice Mayor Kniss: Under – on Packet Page 16, you indicate that cost
recovery rates for the Junior Museum and Zoo is less than the policy
(inaudible) which the City doesn’t currently charge an admission fee for that
facility which is great. (Inaudible) remember that. Just for the mic, I’m on
Page 16 and close to the bottom of the Page. How do we go about making
that kind of, somewhat subjective decision? This is a community benefit and
therefore, I’m guessing that golf is not a community benefit because we
recover far more of the cost there. My question is, how do we make that
subjective decision…
Ms. Richardson: I think…
Attachment B
TRANSCRIPT
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Policy and Services Committee Special Meeting Transcript 02/14/17
Vice Mayor Kniss: …of does somebody else make it for us?
Ms. Richardson: I think it is somewhat subjective. If you look at Packet Page
22, the City policy is there and (inaudible) cost recovery percentages in
ranges which allow for some room within those ranges for the cost recovery
should be. It can… as a community benefit – primarily a community benefit,
the expectations at that – it might not recover anything or it might recovery
up to 30 percent of the cost. When it’s an individual personal benefit, the
expectations that it would likely cover 70 to 100 percent of the cost. There’s room within each of those ranges for some decision making and they aren’t
hard set ranges.
Vice Mayor Kniss: You fit them into these and make the best decision you
can, right?
Ms. Richardson: Correct.
Vice Mayor Kniss: Golf is probably pretty easy. Maybe the Zoo is pretty easy.
Which ones are hard to decide whether or not they’re being a good benefit?
Is that your decision Rob?
Rob de Geus, Community Services Director: Yeah, we look at the policy to
give us guidance. Rob de Geus, Director of Community Service (inaudible)
she’s the senior analyst for the department. The Junior Museum – this is a
little tricky one. When we looked at that – (inaudible) we looked at the
whole of the Junior Museum and Zoo and some of the programs within the
Junior Museum (inaudible) may fit into different categories within the
(inaudible). For instance, the exhibit in the Zoo is free and I think that’s
going (inaudible) for the City, right? It’s not in that range of 30 percent-70
percent at least it hasn’t been the policy until now. While the summer camps
and the classes and the fee-based programs in the schools – are fee-based
and they fall within the range of the 30 percent-70 percent but the way the
audit was done, they looked at the whole of the Junior Museum (inaudible)
one program.
Vice Mayor Kniss: One of the things that we’re always discussing is cost
recovery. That’s one of our (inaudible). It just seems that there must be
times when it’s somewhat difficult. I remember this decision a long time ago
at the Children’s Theater and whether that was community or whether that
was individual. I’m not making any new decisions or asking you to. I’m just
curious as to how you made those and where the cost recovery does fit in.
Glad (inaudible) – I don’t play golf so it’s good to see (inaudible), pretty well
on the golf.
Attachment B
TRANSCRIPT
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Policy and Services Committee Special Meeting Transcript 02/14/17
Ms. Richardson: We had – but golf is an example of where you can actually
collect market rate and policy – the City policy right now, goes only up to
100 percent so one of our recommendations does focus on the recognition
that you can go above that. This policy should be revisited to allow for
opportunities where revenue can be generated for the City based on what
the market will allow.
Vice Mayor Kniss: Good thanks.
Chair Wolbach: Lydia.
Council Member Kou: I’m just trying to understand, being new to all of this.
Which of the CSD programs – can your kind of elaborate a little bit more
about how these programs fall into the recovery fee level policy – I mean
the community wide – first there’s private benefit and then they’re 1, 2, 3, 4
over there on Page – Packet Page 21.
Ms. Richardson: As far as – our office would not make that decision. Rob –
someone answered already. It really depends on a bit on who – a lot on
who's benefitting for it. Is it really a community-wide benefit? Is there some
community benefit mixed with some individual benefit? Is it all individual benefit? Those are the types of things they would look at as they decide
which one of these categories to fit it into. That’s where – when the CSD
policy was established back in 2007, the City policy didn’t exist. The audit is
really focusing on recommending that CSD, now that there’s a City policy.
Look at the City policy and realign their programs to match.
Council Member Kou: What is the percentage between resident and non-
resident that uses all of these services?
Mr. de Geus: It varies from program to program. It’s on average, I think,
70/30, 70 percent residents. With our summer camp program and swim
lessons, it’s very high residents, 90 percent-95 percent. Some of our art
programs for instance – studio – adult art program is really a regional
(inaudible). We have almost 50 percent non-residents, 50/50. The Junior
Museum and Zoo also sees a lot of non-residents because there’s not
something like it nearby so we get people coming from a long way away.
The golf course is the other example. We get a lot of non-residents which is
not – which is typical for a golf course to see. (Inaudible)
Vice Mayor Kniss: Could I piggyback on that because that’s really
interesting?
Chair Wolbach: Tom, do you mind if Liz just ends (inaudible) (crosstalk).
Attachment B
TRANSCRIPT
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Policy and Services Committee Special Meeting Transcript 02/14/17
Vice Mayor Kniss: I promise – just a follow up (inaudible) because I think
that’s just a good question, the resident versus not. In return, do many of
our residents go to Mountain View or Melow Park (inaudible) could swim
program and so forth? Is there any exchange there like we belong to the
same club and therefore, we go back and forth because residency is so
interesting? Are we – the real question I think would eventually be, are we
subsidizing other communities to our own – for our own cost? I didn’t want
to say the word.
Mr. de Geus: There aren’t too many programs or any that I can think that is
predominately non-resident. Actually, they’re majority resident and when we
get non-residents they pay a little more. They don’t get the first…
Vice Mayor Kniss: They do pay a little more.
Mr. de Geus: …opportunity to register. Yeah, so residents get the first
chance. Usually, it helps the bottom line to have -- to fill the class, fill the
program.
Vice Mayor Kniss: I didn’t realize they paid a little more. That’s good. We’re cost recovering. Thanks, Tom.
Chair Wolbach: Tom.
Council Member DuBois: First of all, Houman, thank you for the audit. It
looks like it was a good audit. There was the finding about the SAP System I
guess. I don’t know how quickly we’re going to get our new system but do
we have a way to track requirements that we want to put into the new
system?
Ms. Richardson: One of the things that happing right now is that the new
(inaudible) system is in the requirement development phase and the
Department of Information and Technology has hired a consultant,
[phonetics] [Plant Meran], who has met with all the departments and
collected information about requirements. Now they’re re-meeting with
departments and reviewing those requirements. We have been doing this,
trying to identify in our audits some things that we know. I had requested a
specific meeting with Plant Moran and IT – on what was that, about 5 or 6
months ago? Where we actually sat down with them and just talked about
issues we identified in audits so that they would pick up on those things in
case…
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Council Member DuBois: Is there an ongoing way? Does Rob have to add it
to the list for CSD or when you find something new that you want in the
(inaudible) system? How do we make sure it doesn’t get lost?
Ms. Richardson: I think the primary way is when the – we’re hoping
departments can keep track but I think the primary way is when the RFP is
ready to be issued, we are going to be looking at that and when we see that,
we’ll do a cross check with some of our – with all of our outstanding
recommendations and say, is there something we identified that we’re still missing? In some ways, the RFP will identify things in a very broad way and
we might not be able to exactly say that’s a direct match but as they
implement, there’ll be more discussion to make sure that that happens.
Council Member DuBois: Ok. That would be great if the departments owned
it in some way and just added it to their requirements.
Mr. de Geus: I was just going to say, we expressed that same thing. We
looked at the new system, what we would like to see and we would like to
see a robust system that allows us to tie direct cost to programs so when we
get questions about how much does it cost to run the pool? We can easily
and quickly report.
Council Member DuBois: This could be really helpful for you. What kinds of
programs can go over 100 percent legally?
Terence Howzell, Principal Attorney: Terence Howzell, City’s Attorney’s
Office. Just direct your attention to Packet Page 11 which kind of lays out
the legal framework and I think that accurately sets forth what the law is.
Responding directly to your question, we can go – given that this is the
services that are the subject of this audit, are excepted from the Prop. 26
requirements that we’ve all discussed at other context. Given these are
(inaudible) recreation programs, we can exceed those…
Council Member DuBois: So, all of these?
Mr. Howzell: All of these that are subject to – of the audit.
Council Member DuBois: Then can you include overhead and Capital
Replacement Fund as part of the cost recovery?
Mr. Howzell: You can as long – I think the only real challenge is making sure
that you are just competitive in whatever market you're in but that – those
are really the limits.
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Council Member DuBois: Ok. It doesn’t even really apply to this?
Mr. Howzell: No.
Council Member DuBois: I did see one place where we offer classes when we
have more than or less than the minimum amount. How did we decide to do
that?
Mr. de Geus: We did look at that. That was one of the findings that surprised us in the department to and we took a closer look and said, why is that
happening? So many that seem to go forward with less than the minimum
and so we looked into that further and we found a couple things. One, when
classes were canceled – effectively canceled, they didn’t have any
enrollment. They were not being subsequently canceled in the system. You
actually have to go into the system and official cancel the class and so when
we ran the numbers or the auditor ran the numbers, those classes came up
as still active, even though they were effectively canceled. That was a big
portion of why that number was there. In addition to that, what we found
was several program areas had minimums that were really just too high. We
have group lesson for products as an example, where if we get two out of
four, we will go ahead with the class but we had set the minimums at three. I’m not sure why we did that because we would always go forward if there
are two kids in that class. I think we need to relook at (inaudible) and make
sure that they’re accurate.
Council Member DuBois: Cool, thanks. I guess with the new Junior Museum,
I think the plan is they are going to charge – start charging fees, right?
Mr. de Geus: That’s correct.
Council Member DuBois: That will… I mean overall, I think we make the right
choices. I’m pretty comfortable with the levels of recovery and what we offer
for free. I do think – do we have a golf course management company when
the fold course opens?
Mr. de Geus: We – (inaudible) to ask because we currently have three firms
that we work with. We have Brightview Maintenance that does the
maintenance at the golf course. Brad Lozares does the golf professional
services and (inaudible) that own the restaurant. The (inaudible) makes sure
everybody is working together. All of those contracts expire in April of 2018.
We are currently thinking about how we might proceed with a new operator.
Do we extend the contracts of the existing 3 or do we put out an RFP and
bring in a new operator? One operator which we think is more effective
ultimately. Have them come in before we re-open in November and
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(inaudible) Council or something on that soon because that’s the direction
(inaudible) now or the next couple months so we can have someone on
board.
Council Member DuBois: Yeah, this seems like a really interesting pricing
question. It’s going to be (inaudible) of a golf course. Probably want to be
the high end of the market rate I would think but you want it to be used,
right? Some kind of expert like a golf course management company; seem
like they could figure that out.
Mr. de Geus: That’s the balance – we’ve been working closely with National
Golf Course Foundation which is an organization that helps with price setting
and finding a good operator. We will be working with them again as we put
out this RFP if that’s the direction we go. We will have a discount for
residents, certainly. To make sure that that’s (inaudible).
Council Member DuBois: It will probably be – once brand new, it will
probably be the highest and with that over time its (inaudible). I know it’s
not in here, I’m just curious, the airport is not considered community service
at all, right? Those fees?
Mr. de Geus: Not yet.
Council Member DuBois: Ok. I mean, wow. Is it just (inaudible) something at
this point?
Mr. de Geus: It’s kind of Public Works I think. We have an airport manager
that’s managing it, Andy – I forget his last name…
Mr. de Geus: …Swanson. (Inaudible)
Council Member DuBois: I mean it’s off topic, do you guys know if we
manage that as market rate for fees and things?
Khashayar Alaee, Management Analyst: There’s a study underway to look at
all the fees of the airport as well. I don’t know the specifics about it. From
what I understand that those are being looked at too. In addition to the
leases at the site.
Council Member DuBois: Thanks.
Chair Wolbach: Any other questions or comments? Let’s go back to – do the
second round. Would either you want to go ahead then…
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Council Member Kou: Chair, I still have questions is that ok?
Chair Wolbach: Sure.
Vice Mayor Kniss: Only one per night.
Council Member Kou: I was just wondering what programs are here that are
unique to Palo Alto within – different from say, Mountain View or Los Altos, that would draw in more out of towners and non-residents so we have that
cost recoverage?
Mr. de Geus: We have a number of unique programs and assets in Palo Alto
because the Council and Communities invested in for many decades in parks
and recreation services. I think the Children’s Theater – dedicated Children’s
Theater are very, very unique. You don’t see that in other Cities. Even a
municipally run Art Center in Palo Alto is also quite unique. Junior Museum
and Zoo is another example of something that you don’t see in neighboring
Cities and so it draws people from the region. Palo Alto is definitely an
attraction. People come here to use our facilities, to come to our theaters.
We have three theaters which is unusual for a town of our size.
Council Member Kou: Three?
Mr. de Geus: Yeah, the Community Theater, the Children’s Theater and the
Cubberley Theater. They all have different – they operate differently from
one another. Then we have playgrounds like the Magical Bridge Playground
that gets people coming from Santa Cruz to the north end to participate in
that universally accessible playground that has hundreds of people every
day. (Inaudible) gets at your question but Palo Alto is a draw or a lot of the
different activities and programs that we have; which has an impact on wear
and tear and other thing but most of the fee-based programs across the
realm non-residents pay and they pay more than Palo Alto residents. They
stay in Palo Alto and hopefully spend a little money in Palo Alto. They get
lunch or dinner or spend some money (inaudible).
Council Member Kou: I guess what I’m trying to figure out is are we taking
full advantage of the cost recovery for those that we can charge for? I know
Magical Bridge is not – there’s not cost there.
Mr. de Geus: There’s no cost. The City covers the full cost of the Magical
Bridge Playground and it’s not inconsiderable because it wears down
because of the amount of use it gets there.
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Council Member Kou: I met with Magical Bridge people and they said that
they like the show. Every other City who wants to have one, they come here
to look at it and then there is definitely that wear and tear. When the…
Vice Mayor Kniss: We should charge those other Cities.
Council Member Kou: …the Junior Museum, when it comes back is there the
cost – there’s a fee charge. Is it going to be the same where non-residents
are going to have a high fee?
Mr. de Geus: Yes.
Council Member Kou: Ok. Very good. Thank you.
Chair Wolbach: Liz, you had another question to?
Vice Mayor Kniss: Yeah. (Inaudible) because we went late last night and I’m
not totally absorbing some of it. The theater, music and dance; we’ve got
three theater groups. We’ve got Theater Works. We’ve got Palo Alto Players?
Mr. de Geus: Yep.
Vice Mayor Kniss: Ok, Theater Works, Palo Alto Players and
Vice Mayor Kniss: (Inaudible) that’s the one I hadn’t thought about. Those
are – when you say they don’t meet the City’s $90,000 revenue target or in
those (inaudible) provides to the City so on and so forth. Then you talk
about the value annually. Why am I having some trouble with my math
here? The theater group has to meet the $90,000 revenue target for annual
sales and if they did meet it – even though it’s the $500 on the next that’s
kind of (inaudible) me a little.
Ms. Richardson: I can tell you what was explained to us during the audit.
They have a target to generate a certain amount of revenue from each ticket
that gets contributed to the City; that’s the $90,000. We’re at the bottom of
Packet Page 16, top of Page 17. At $500,000 is the value of the City’s
subsidies and that takes into consideration the cost of maintenance of the
facility; utilities that are provided and that sort of thing. There isn’t right
now an expectation where the portion of the ticket sales that the City gets to
offset – to fully offset that – those cost so that’s where your $90,000,
$500,000 are.
Council Member DuBois: Does that include theater Staff as well? Yep. That’s
probably the biggest part of it.
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Vice Mayor Kniss: Does that also include – Theater Works is kind of
interesting because they go back and forth between two theaters. Does that
alter anything or not?
Mr. de Geus: When we – the theaters come in and it’s pre-scheduled
throughout the year and they each have approximately (inaudible)
(crosstalk).
Vice Mayor Kniss: You figure it out…
Mr. de Geus: Yeah.
Vice Mayor Kniss: … is what you’re saying.
Mr. de Geus: Their participation and attendance have not been growing.
That’s been a challenge for the theater groups that they have shared with
us. Theater Works does pretty well but the other two…
Vice Mayor Kniss: I know.
Mr. de Geus: …they struggle a little bit.
Vice Mayor Kniss: How about the Children’s Theater? Have you listed that
separately somewhere? I just remember one awful year we tried to raise the
ticket prices a dollar and needless to say, we never did.
Mr. de Geus: I think that’s here, right?
Vice Mayor Kniss: Yes.
Mr. de Geus: The Children’s Theater…
Vice Mayor Kniss: Pardon?
Mr. de Geus: There’s a policy or a philosophy – I’m not sure what you call it
but the Children’s Theater does not have a pay to play program. Kids sign up
to be in a play, they don’t need to pay for that. The parents do pay for
costumes, they pay for tickets to go see the play but we do not (inaudible)
charge the kids to participate in the Children’s Theater and that’s been a
long stand tradition…
Vice Mayor Kniss: It has been, right.
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Mr. de Geus: … at the theater.
Vice Mayor Kniss: I think it’s worth reiterating because there’s really no cost
recovery there and – but there is a cost to maintaining the theater. Just
what Tom has talked about the Staff and the backstage crew.
Mr. de Geus: The Children’s Theater has some cost recovery. Those kids also
take acting lessons and singing lessons and all of those are fee-based
programs. We have the friends of the Children’s Theater. By the way, we have five friend’s groups in community service that support – they are
tremendous in what they do for the department but the friends of the
Children’s Theater -- is that when that topic came up, should we charge pay
to play? The friend's group stepped up and said, we will pay. We will raise
money and pay. They pay, I want to say $50,000 or something annually to
support the theater.
Vice Mayor Kniss: There’s no appetite for charging Children’s Theater
anymore that we do, I know there isn’t.
Ms. Richardson: I just want to add something. When Rob mentioned the
friend's group, that reminded me of another thing where with – during the audit, there’s not a clear way to identify where those subsidies from the
friend's groups are coming into offset program cost. The new ERP system
could potentially help with that so you could really get a full sense, not just
of what the cost of a program is? What’s revenue are being generated
through fees? What costs the City is paying because you really have three
revenue sources; fees, General Fund and those friend’s groups and being
able to link those altogether would give a much better picture of what’s
going on.
Council Member DuBois: Are those friends amount showing up in here? Not
at all?
Ms. Richardson: No, we couldn’t identify how they (inaudible) (crosstalk)…
Council Member DuBois: The theaters at 30 percent but the friend's money
is on top of that?
Mr. de Geus: Yes.
Council Member DuBois: Great. Yeah, it would be good to see that.
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Mr. de Geus: Some of it is really considerable. It’s remarkable what the
friends of the Junior Museum have been able to do. They just now hit their
25-million-dollar goal rebuilding…
Vice Mayor Kniss: Astonishing.
Mr. de Geus: Yeah. Amazing residents and non-residents that just love the
program and are willing to put that much into it and spend money and ask
for money to support a City program like that. The Palo Alto Art Center Foundation is the same way. I mean, they raised over 4 million dollars to
renovate -- as you know, is the Palo Alto Art Center. They raised $100,000
or more a year to support programs which are also not represented here.
Council Member DuBois: Well, that’s pretty big.
Vice Mayor Kniss: They – at least the Art Center has a paid developer. I
don’t know about Theater Works whether they do or not.
Mr. de Geus: Each of the friend – every friend's group or most have some
type of Staff to help the development … (Crosstalk).
Vice Mayor Kniss: Somebody who attracts that development work.
Mr. de Geus: Particularly ones that have a membership program like the
Junior Museum and Zoo. They have a robust membership program. The Art
Center does as well. The Recreation Foundation not so much in the friends of
Palo Alto parks. They are really project based. They raise money for a
specific park or playground.
Vice Mayor Kniss: You know that would be fun to know Tom, is how many
friend’s groups there are because I have a feeling there are 20 or 25.
Mr. de Geus: We have many partners that support us like Save the Bay and
Acterra, the two (inaudible) but there’s 5 foundations that exist, non-profits,
just to raise money for the City of Palo Alto in a specific program area.
Council Member Kou: Can you name them?
Mr. de Geus: Yeah, there’s the Friends of the Children's Theater, Friends of
the Junior Museum and Zoo, Friends of Palo Alto parks, the Palo Alto Art
Foundation, and the Palo Alto Recreation Foundation. They’re the…
Council Member DuBois: That’s a lot of (inaudible).
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Mr. de Geus: They’re a different department -- there is a Friend’s of the
Library, also raise a lot of money and sell used books and other things in
generating a couple $100,000 for the libraries.
Vice Mayor Kniss: Theater Works has something called Their Inner Circle,
where they raise money as well.
Council Member DuBois: Those are expenses we don’t see (inaudible).
Chair Wolbach: Alright. Any other questions for now?
Vice Mayor Kniss: Not at the moment.
Chair Wolbach: Tom, do you have a couple more?
Council Member DuBois: I would just make us move that we accept the
audit for (crosstalk).
Chair Wolbach: Mind if I ask a couple questions first?
Council Member DuBois: Oh, certainly. Sorry. (Crosstalk).
Chair Wolbach: I’ll try to be quick because I know we all want to get out of
here. It’s Valentine’s Day and we did have quite a meeting last night. Just a
few questions. First, the goals on – just stepping back a little bit, right, to
think about the goals for a second on Packet Page 6. Ensuring financial
stability – I mean, obviously, that’s something I think we want to be in favor
of. Customers paying appropriate shares of the costs and (inaudible)
programs are subsidized in accordance with the City’s Cost Recovery Policy.
I think these are generally pretty good goals but I just want to make sure
we are all thinking about that in the context of this. I don’t really have a
question there but in that context, looking at a couple of other things here.
On Packet Page 10 at the top listing the objectives of the audit. In kind of
getting towards what the impact of the audit will be. Does this audit obligate
CSD to seek more cost recovery or does it just offer a recommendation?
Then it’s totally up to the director or the City Manager to make that
determination.
Ms. Richardson: It doesn’t direct them to seek new cost recovery. What it
does is it makes a recommendation to ensure that they’re – now that the
City has a City-wide policy, that their cost recovery practices align with the
City policy and that they look at the cost – the actual cost which was hard
for us to really identify on a class by class basis. I don’t think it’s necessary
that they identify it to class by class but they do need to know on a program
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level basis at least, what it’s costing them so that they can set their fees
appropriately. The goal is really and the recommendation is to really make
sure that what they charge aligns with the City policy but before they can
necessarily do that, that City policy needs to be revisited to allow for market
level recovery when that’s appropriate.
Chair Wolbach: Ok. Going – actually looking at Packet Page 20, Item C,
where it talks about – it says, requires CSD to annually assess whether cost
recovery levels achieved targets and addressed obstacles and opportunities to meet targets. I actually wonder if there are times where Council will
actually want to be one of those obstacles, right? Really my question here is
knowing that there may be times where – I really – let me step back a
second and say, I think this audit is really useful because I think it does help
get us towards a better understanding and help the department have a
better understanding in coordination and alignment with the City policies.
Then when it comes time to make a determination or make a decision about
how much to charge for a program? Obviously, Council may have a sense
about a particular program where we want to charge more or maybe even
more likely, where we want to charge less than the director or the City
Manager may recommend because we see an equity issue or we see some
need in the community – a benefit to the community of having a lower fee for – especially for residents. I just wanted to check – as a reminder for all
of us, what the process is for when Council wants to say, we actually want to
see a lower fee? That would come to us as a separate – that would be a
separate agenda item, right? Whether it’s at Policy and Services or at full
Council, talking about the Fee Schedule itself separately from the audit of
the Fee Schedule.
Ms. Richardson: I would agree. Let Rob speak for a second but I also want to
say, we didn’t (inaudible) wrote that. We didn’t envision Council as being the
type of obstacle (crosstalk) (inaudible). We were thinking that more once
there was some sort of agreement and there was something that was
unexpected that caused them not to be able to meet – that they would look
at that and say, why can’t we meet this target. Kind of like a performance
measure. What causes you not to meet that measure?
Chair Wolbach: Right. I was taking it a bit poetically, you say. Taking
liberties but again, when Council wants to weigh in on the fees themselves.
That will come back to us. Will that come to P&S or will that come to – does
that come to full Council or does that come to finance.
Mr. de Geus: It goes to Finance…
Chair Wolbach: That’s right.
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Mr. de Geus: …Committee. I think to you question Chair Wolbach, we – and
we currently are preparing the ’18 Budget – and I see Kiely over there and
we talk at length about fees and revenues and what is reasonable. What
does the policy say? We know that costs are going up and so to keep up with
even today’s cost recovery level means fees need to go up to maintain that.
What does that mean? Does that create a barrier for participation or not so
there are some real trade-offs that we have to consider? You’re right, it
comes to the Finance Committee and the full Council as part of the budget process and the (inaudible) Fee Schedule.
Chair Wolbach: Right and I think that that’s important for us to just
remember that Staff, you guys will do your best to implement the policy but
then, ultimately – I know you guys know that this Council is never afraid to
weigh in if we wanted to tweak something in the details. My last question is,
just as far as implementing the recommendations. I actually wanted to think
about a few different departments here; CDS, ASD – I see a representative
here (inaudible) and the City’s Attorney’s Office and IT, are all named in the
recommendations. I was just wondering if we had a sense of what the
administrative burden of implementing this audit might be in – even in a
qualified rather than or qualitative rather than quantitative sense. I don’t know if any of those departments want to weigh in or if there’s any thinking
on the administrative burden that Staff would like to share with us? Just so
that we have a sense of what the implementation would look like.
Mr. de Geus: I can begin – that’s a good question. I don’t think it’s a huge
administrative (inaudible). I think most of it falls to CSD to manage. The
cost recovery policy that was drafted and approved in 2007 is not very
different than the one that the Council approved as the City-wide policy so
there are some tweaks we need to make. The template tools and
consistency, we’ve already begun working on that. We’re going to be
working closely with Office of Management Budget and ASD to make sure
that that’s going to work. I don’t think – first of all, we agree with all the
recommendations and I don’t think it’s a big burden. I would add and I was
going to say this at the beginning but I’ll just say it now. Thanks to the
auditor for the work that they did. I mean, we – as you know, the
department does a lot. Community Services does a great deal – all across
the community and is very diverse and you don’t always get the time to do
deep dives into fee settings and other things. It’s actually very helpful to
have a report like this and we this will help us do our homework better.
Chair Wolbach: Great. Well, that’s it for my questions.
Vice Mayor Kniss: Just one last thing. What are you most popular…?
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Chair Wolbach: Don’t forget your mic.
Vice Mayor Kniss: What are the most popular programs? I frequently hear
parents say, I just never can get my kids into those summer programs or I
can’t get into the afterschool whatever it is or we waited in line – use to be
for preschool family and things like that. So, that’s school, not you but what
do you – if you were going to expand what you’re doing. Where would you
do it?
Mr. de Geus: The two that come to mind that we see waitlist consistently is
the Junior Museum and Zoo and the Palo Alto Art Center. I think largely a
testament to the Staff that runs those programs, phonetics Karen Kienzel
and John Aikin are the two managers. The unique facilities and they’re
constantly reinventing the program and it’s a combination of fun but also
science and education which just people love. They just do a really nice job
with it and it’s a unique facility. People want to be in Zoo Camp and there’s
only one Zoo and so there’s only so much – that gets filled up immediately.
Those are the two that come to mind that is really, really popular. Within the
recreate division we have more opportunity to add kids and participants
because a lot of the programs are in community centers and on athletic fields so we can have 30 or 40 or even more – Foothills Park we had 55 kids
at every camp and we have several camps. We have over 150 children and
they do fill up but there’s just a lot of space whereas Zoo Camp, it’s 12-15
kids and that’s all we can really accommodate to make sure the experience
is a quality one.
Vice Mayor Kniss: Yeah, no it’s an enormous and varied department and
very visible in the community.
Chair Wolbach: Thank you. (Crosstalk) I think somebody was making a
Motion? Who wanted to go ahead and make it?
Vice Mayor Kniss: Tom did and I seconded it.
Chair Wolbach: Tom, let's just make it official.
MOTION: Council Member DuBois moved, seconded by Vice Mayor to
recommend the City Council accept the Community Services Department Fee
Schedule Audit.
Vice Mayor Kniss: Amen.
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Chair Wolbach: Seconded by Vice Mayor Kniss.
Vice Mayor Kniss: Yes.
Chair Wolbach: Any discussion? Alright.
Vice Mayor Kniss: Thanks, guys.
Chair Wolbach: All in favor of the Motion? Alright.
Vice Mayor Kniss: Good job.
MOTION PASSED: 4-0
Chair Wolbach: Looks like it passes unanimously. Thank you all.
Vice Mayor Kniss: Go forth and raise the fees.
Attachment B