HomeMy WebLinkAboutStaff Report 3651
City of Palo Alto (ID # 3651)
City Council Staff Report
Report Type: Action Items Meeting Date: 5/6/2013
City of Palo Alto Page 1
Summary Title: Stanford Funds Review and Allocation Process
Title: Review of Guiding Principles for Stanford University Medical Center
Fund Allocations and Allocation of $2 Million to Project Safety Net
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Council provide input on staff’s proposed process for allocating
Stanford University Medical Center (SUMC) Development Agreement funds and formally
approve an allocation of $2 million for Project Safety Net from the Community Health and
Safety Program funds, which was previously discussed by the City Council.
Motion
To approve Staff’s recommendation to approve an allocation of $2 million for Project Safety Net
from the Community Health and Safety Program funds.
Executive Summary
The SUMC Parties (Stanford Hospitals and Clinics, Lucile Packard Children’s Hospital, and
Stanford University) have paid $32.5 million in public benefit fees to the City through January
2013 as required by the Development Agreement between SUMC and the City as part of the
Stanford University Medical Center Facilities Renewal and Replacement Project. The City is set
to receive an additional $11.7 million from Stanford in the 2016-2017 timeframe upon issuance
of final occupancy permits. This final payment brings the total due the City to $44.3 million.
The City has spent $664,000 for activities related to Project Safety Net and the 27 University
Avenue project. Additionally, Council recently committed $4.3 million from the Infrastructure,
Sustainable Neighborhoods & Communities, and Affordable Housing fund to fund a long-term
loan to the Stevenson House rehabilitation project and a short-term loan to the Maybell-Clemo
affordable senior housing site. This report outlines a proposed process and set of guidelines for
allocating Stanford funds to appropriate projects consistent with the requirements of the
City of Palo Alto Page 2
Development Agreement. The report also recommends that the City Council formally approve
an allocation of $2 million to Project Safety Net as discussed below.
Background
On June 6, 2011, the City Council approved Comprehensive Plan amendments, zoning changes,
a conditional use permit, annexation and design applications for the Stanford University
Medical Center Facilities Renewal and Replacement Project (the “Projects”). The Projects
include the construction of a new Stanford Hospital and clinics buildings, an expansion of the
Lucile Packard Children’s Hospital, construction of new School of Medicine buildings,
renovation of the existing Hoover Pavilion, construction of a new medical office building and
parking garage at Hoover Pavilion, roadway improvements along Welch Road and Durand Way,
and SUMC design guidelines. A Development Agreement vesting these approvals was entered
into between the SUMC Parties and the City and was effective on June 6, 2011 and continued
for thirty years from the effective date.
On July 25, 2011 Council discussed the status of the funds (Report ID #1954) and high-level
themes guiding the use of the funds. Staff committed to returning to Council with defined
guidelines, which are discussed in this report. In addition, at the July 25 meeting Council
discussed the intent to allocate $2 million to Project Safety Net from the $4 million in
Community Health and Safety Program funds. While the $2 million allocation was discussed, it
was not formally approved via a Council vote. Staff is, therefore, asking Council to formalize the
allocation via this staff report. The Council minutes from the July 25, 2011 meeting are
attached to this report (Attachment C).
This report lays out Staff’s recommendation of a proposed process and set of guidelines for
allocating these funds in the near term and in future years. While the Infrastructure Blue
Ribbon Commission (IBRC) initiative has identified many specific projects that could be funded
by the SUMC monies, to best leverage all available funds, it is important to examine these
projects in a larger context. Staff is proposing a phased approach to allocating the SUMC funds
that is tied to leveraging opportunities such as grant funding, capital improvement program
budget discussions, and a possible revenue ballot measure. Staff is seeking Council input on
this proposed process and guidelines so staff can tailor upcoming discussions at the key
decision points mentioned above.
Discussion
City Staff responsible for the project areas that will receive funds have met to layout a proposal
for a process and guidelines to allocate SUMC funds. This process hinges on upcoming
decisions and discussions that could take place around possible transportation grant
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opportunities in 2013 or beyond, the FY2014 (or beyond) capital improvement program budget,
and projects for a possible bond or initiative in FY2014.
Guiding Principles
Council discussed all the SUMC funds during an update on July 25, 2011 (Report ID #1954).
Council comments suggested the funds should not be used for budgetary deficits, but rather to
establish permanent funds from which the community could benefit for years to come
(Attachment C). Comments also pointed to the transformative nature of the funds to do
something for the community in a major way. Further, comments suggested that only high-
priority projects, after much vetting from the community, should be selected. Projects that
were fiscally sustainable could also be a requirement.
Staff, building on Council comments, added financial management concepts along with
principles of endowment management to develop the following recommended policy
guidelines for reviewing SUMC funding allocation proposals (for Council discussion).
Guiding Principles for Use of SUMC Funds
1. SUMC funds are onetime funds and they should be used to invest in initiatives that will
have lasting impact
2. Funding decisions should strike a balance between safeguarding the principal and
leveraging the interest
3. Interest is accrued to the individual funds
4. Should the vote threshold to approve the use of the funds by Council be high?
5. Any decision to expend funds includes full status report, review of approved policy
guidelines and an accounting of expenditure outlays
6. Proposed projects or programs that would leverage matching grant funding or other
funding sources would be weighted highly
7. The funds should not be used for ongoing expenditures, should strive to be one-time in
nature
8. Endowment fund management concepts to consider and help frame discussion:
a. Capital preservation for future generations
b. “The trustees of an endowment institution are the guardians of the future
against the claims of the present. Their task is to preserve equity among
generations.” James Tobin
c. Capital appreciation as well as current income (i.e. rent from real property)
d. Restricted versus unrestricted funds
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e. The role of the endowment in supporting the organization’s mission?
f. How much of the endowment’s return should be spent and how much
should be reinvested?
g. Balance this tension: the current needs of the City and community vs. the
obligation to preserve the endowment for future generations
h. What’s the life of the SUMC funds? (i.e. endowments are forever)
i. Risks:
Gradual reduction of assets on small non impactful projects or outcomes
“Too many hands in the pot,” Dilution of impact
Lax oversight
j. How can endowment value be preserved for the future?
k. Policies that will guide it’s management, written down and reviewed
periodically
Staff proposes that the (Council) Finance Committee weigh the merits of any proposed funding
allocations via these guidelines and concepts. Under this process, all funding allocation
proposals would come through Finance Committee for review and recommendation to the full
Council. Staff would provide a package for Finance Committee review that would include a
review of the guidelines, status on any expenditures and a recommendation based on staff
review and other input from possible staff or external review committees.
Current Fund Status
As of March 2013, the City has spent a portion of SUMC funds on specific projects: 27 University
($524,124), Project Safety Net ($139,389), and affordable housing ($4,300,000; long and short
term housing loans).
The table below summarizes the responsible departments, funding received and the remaining
funding after taking into account committed funds and interest income earned. The table does
not include proposed allocations from the SUMC funds in the FY2014 Proposed Budget for
Project Safety Net ($260,000) and the Bicycle and Pedestrian Transportation Plan ($1.2 million).
These proposed allocations are due to be reviewed by the Finance Committee on May 16 as
part of the FY2014 budget hearings. For a detailed accounting of SUMC funds to date see
Attachment A.
City of Palo Alto Page 5
SUMC Funds
Category
Responsible
Department
Payments
due from
Stanford per
Development
Agreement
Amount
Received
from
Stanford
Amount
Spent or
Loaned
Available
Funding as
of 3/31/13
(includes
interest
earned)
Committed/
Status
Committed/Designated
Project Operating
Deficit
ASD $2,417,000 $2,417,000 $0 $2,612,413 Committed through end of
project to mitigate
unexpected project impact
costs
Linkage from
Downtown through
PAITS to Quarry/ECR
Intersection
Planning $2,250,000 $2,250,000 $374,124 $2,035,937 Recommended for CIP
funding in FY2015
Linkage along Quarry
Road for
Pedestrian/Bicycles/
Transit
Planning $400,000 $400,000 $0 $432,340 Recommended for CIP
funding in FY2015
Not Committed – Council Input Sought
Community Health
and Safety Programs
Community
Services
$4,000,000 $4,000,000 $139,389 $4,180,151 Available, recommended
in part for Project Safety
Net
Infrastructure,
Sustainable
Neighborhoods and
Affordable Housing
Public
Works
and
Planning
$23,200,000 $15,466,666 $4,470,220
(Council
voted on
9/24/12 to
use $150,000
for a portion
of 27
University)
$11,669,332
($7,733,333
due upon
occupancy,
est. 2016)
Available pending OBAG
project selection, then to
Infrastructure and
Sustainability Committees
for prioritization and
recommendation to
Council
Sustainability
Programs
Public
Works
and
Planning
$12,000,000 $8,000,000 $8,381,809
($4,000,000
due upon
occupancy,
est. 2016)
Available pending OBAG
project selection, then to
Infrastructure and
Sustainability Committees
for prioritization and
recommendation to
Council
Totals $44,267,000 $32,533,666 $4,983,733 $29,311,982
(includes
$1.8m
interest)
City of Palo Alto Page 6
Two projects, Linkage from Downtown through Palo Alto Intermodal Transit Station to
Quarry/El Camino Real Intersection and Linkage along Quarry Road for Pedestrians, Bicycles,
and Transit, have well-defined project areas. The Quarry Road linkage is a project that is
required to be completed by December 2016. The same deadline applies to the larger
Downtown linkage funds. Staff will work with Stanford as needed to coordinate these projects.
Two other funding areas, Infrastructure and Affordable Housing and Climate Change and
Sustainability represent funding that could go to any number of projects without any
Development Agreement conditions. As discussed below, staff recommends that the process
for allocating these funds be staged.
The fourth funding category is for Community Health and Safety Programs with an emphasis on
Project Safety Net. Staff proposes formalizing the $2million allocation to Project Safety Net and
that no new allocations be decided until Project Safety Net has completed their strategic
planning process currently under way. This is discussed in more detail below.
Finally, the Project Operating Deficit funds are set aside in the Development Agreement to
mitigate unanticipated project impact expenses that emerge during the course of the project.
Staff anticipates holding these funds until final project completion, at which time the funds
could be used to backfill additional City operating expenses that arise when the projects come
fully online. At this point, the funds are not considered available for other projects.
Community Health and Safety Programs ($4.2 million available)
DA requirement:
$4 million to be distributed to selected community health programs that benefit
residents of the City, based on joint committee recommendations and Council
acceptance
Council may decide to use the entire portion for the Project Safety Net Program
The SUMC parties and the City shall establish a joint committee to review proposals and
make recommendations to the City Council on programs or projects other than Project
Safety Net. (The decision is Council’s sole discretion.)
Consistent with the Guiding Principles discussed above and Council’s earlier direction, staff
proposes that $2 Million of the Stanford funds be allocated to Project Safety Net (PSN). PSN is a
recognized leader in suicide prevention and youth well-being and the umbrella entity for this
effort in Palo Alto. The SUMC funding would support prevention, intervention, and education
programs and projects targeted at “At Risk Youth” in the community. Project Safety Net is
currently going through a significant planning process as a community collaborative with a local
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non-profit Compass Point to define a strategic path for meaningful social impact on Palo Alto’s
youth wellbeing and suicide prevention goals over the next three years. This planning work will
be complete by the end of the fiscal year and will be particularly informative as we consider
how best to invest the remainder of the Community Health and Safety funds. The planning
work will further define PSN’s core programmatic and strategic goals, building upon current
efforts. The plan will also provide a recommended structure along with decision making
processes for the collaborative that will support the programmatic and strategic goals.
At this time staff recommends that Council make no decision as to the allocation of the
remainder of the funds, but wait until staff returns with the results of PSN’s strategic planning
process. Staff does believe that a process similar to the Human Services Resources Allocation
Process would be appropriate in discussing and prioritizing fund allocations.
The Development Agreement anticipates use of this $4 million within a 10 year period. At the
right point in time, staff recommends establishment of the joint review committee to discuss
the best investment opportunities for the other $2 million.
Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing ($11.8
million available)
DA requirement:
$23 million for use in connection with infrastructure, sustainable neighborhoods and
communities and affordable housing
Final payment of $7 million due upon issuance of a hospital occupancy permit, which is
expected in 2016.
Council recently approved the City’s participation in the One Bay Area Grant Program (OBAG) to
seek grant opportunities for transportation projects that would satisfy infrastructure needs and
sustainability objectives (report ID #3551). The Stanford funds were identified as a potential
source for the necessary matching grants. The total for matching grants is $25 million and the
available funds in the two SUMC funds categories is $22.7 million. It is unlikely that the City will
be approved for all 10 projects so the ultimate matching requirement is expected to be far less
than $25 million. The grant approval process is expected to be completed in April, with the City
learning which projects have been approved by May. Staff proposes to return after the grant
awards are announced with a final funding strategy, including the possible use of SUMC funds,
recognizing there are many other competing possibilities, now and in the future.
City of Palo Alto Page 8
Staff recommends that Council consider that upcoming discussions about the potential use of
SUMC funds and prioritization and allocation possibilities be held with the Infrastructure
committee, as a prelude to Finance Committee review.
Staff proposes to set aside an amount of approximately $1,500,000 to be ready for affordable
housing opportunities.
Climate Change and Sustainability ($8.2 million available)
DA Requirement:
$12 million for use in projects and programs (including carbon credits) for a sustainable
community, including programs identified in the City’s Climate Action Plan, and
investments in renewable energy and energy conservation.
$8 million received to date; $4 million final payment to be received upon hospital
occupancy permit
Projects prosed for the OBAG program, such as Adobe Creek/Highway 101 Bicycle-Pedestrian
Bridge, are consistent with the City’s sustainability goals. Staff expects to learn what projects
have been approved for OBAG funding in May.
In any case, staff proposes that the discussion of project prioritization and recommended
allocation of the sustainability funds be referred to the City’s staff “Sustainability Board” for a
more detailed analysis and report.
Resource Impact
In addition to the funds from the Development Agreement identified earlier, development
impact fees of $5.4 million have been collected so far on the project. Staff recommends
preserving the development impact fees until the end of the project to help address remaining
mitigations at that time.
Administrative Fees:
The development agreement allows for the City to recover from the SUMC funds the
reasonable costs associated with managing, accounting and reporting for the funds. While City
staff has recently began contributing time to managing the funds it is not significant. At this
time staff does not recommend charging an administrative fee to the funds.
City of Palo Alto Page 9
Since the City has proposed using SUMC funds as matching grant funding and for loans, in the
case of affordable housing, this funding will be returned to the City in the future. As these
funds are returned to the SUMC categories they will become available for appropriate projects
in future years.
Policy Implications
One of the policy implications is how to synchronize the process for prioritizing infrastructure
and other potential projects with the availability of funding. Council will surely want to discuss
alternatives.
Staff has met with representatives of Stanford to discuss the proposed allocation of funds
discussed in this report and the ongoing process for allocating those funds.
Environmental Review
No environmental review is required at this stage of the discussion process but, if funded, some
of the proposed projects may be required to complete a CEQA Analysis prior to construction.
Attachments:
Attachment A: SUMC Funds 2012 (XLSX)
Attachment B: SUMC Funds 2013 (XLSX)
Attachment C: Excerpt City Council minutes from 07-25-2011.pdf (PDF)
City of Palo Alto 5/2/2013
Stanford Medical Center Development Agreement (Fund 260)
FY 2012
Project Ped & Bike Link Ped & Bike Link Infrastructure &Climate Change Community Total FY 2012 FY 2012
Operating at El Camino Park At Quarry Rd Afford Housing & Sustainability Health & Safety Actuals Authorized
Deficit
cost centers 26000000 60260010 60260020 60260030 60260040 80260010
Revenues:
Revenues From Stanford 2,417,000 2,250,000 400,000 7,733,333 4,000,000 4,000,000 20,800,333 20,800,333
Investment Earnings 1,340,172 1,340,172 459,984
Allocate to categories (1,340,172) (1,340,172)
Allocated Investment Earnings 157,814 130,758 26,117 504,934 261,173 259,376 1,340,172 -
Total Revenues 2,574,814 2,380,758 426,117 8,238,267 4,261,173 4,259,376 22,140,505 21,260,317
Expenditures:
Temp Salaries/Benefits (1)20,224 20,224 45,000
Contract Services for 27 University (2)247,369 247,369 250,000
Contract Services 1,650 1,650 -
Other expenses 5,644 5,644 20,000
Total Expenditures - 247,369 - - - 27,518 274,886 315,000
Net total 06/30/12 2,574,814 2,133,390 426,117 8,238,267 4,261,173 4,231,858 21,865,619 20,945,317
Future Revenues from Stanford:
Estimated January 2012-Foundation 7,733,333 4,000,000
permit for 1st hospital project.
Permit is still under review by OSHPD
Estimated January 2018-1st hospital 7,733,333 4,000,000
occupancy permit
(1) Position was budgeted for six months, the person did not start until April.
(2) $66K Fergus Gerber Young Architects
$50K Sandis Engineers
$31K Sand Civic Engineers
$85K Fukuji Planning
$13K Metropolitan Planning
$2K Michael Reardon
City of Palo Alto 5/2/2013
Stanford Medical Center Development Agreement (Fund 260)
FY 2013
Expansion Cost Intermodal Transit Quarry Road Infrastructure &Climate Change Community Total FY 2013 FY 2013
Mitigation Improvements Afford Housing & Sustainability Health & Safety Actuals Authorized
cost centers 26000000 60260010 60260020 60260030 60260040 80260010
Beginning Balance 07/01/12 2,574,814 2,133,390 426,117 8,238,267 4,261,173 4,231,858 21,865,619
Revenues:
Revenues From Stanford (1)- - - 7,733,333 4,000,000 - 11,733,333
Investment Earnings 459,843 459,843 -
Allocate to categories (459,843) (459,843)
Allocated Investment Earnings 37,599 29,302 6,222 167,952 120,636 60,163 421,876 -
Total Revenues 37,599 29,302 6,222 7,901,285 4,120,636 60,163 12,155,209 -
Expenditures:
Temp Salaries/Benefits 70,704 70,704 118,000
Contract Services for 27 University 126,755 150,000 276,755 374,504
Contract Services 37,476 37,476 95,000
Other expenses 3,691 3,691 15,000
Transfer to HIL-Residential 1,000,000 1,000,000 1,000,000
Loan to HIL-Residential 2,600,000
Transfer to HIL-Commercial 720,220 720,220 720,220
Total Expenditures - 126,755 - 4,470,220 - 111,871 2,108,846 2,322,724
FY 2013 Revenues less Exp 37,599 (97,453) 6,222 3,431,065 4,120,636 (51,708) 10,046,363 (2,322,724)
Net total 03/31/13 2,612,413 2,035,937 432,340 11,669,332 8,381,809 4,180,151 31,911,982
Future Revenues from Stanford:
Estimated January 2018-1st hospital 7,733,333 4,000,000
occupancy permit
07/25/2011 108-408
Council Member Shepherd asked whether wireless antennae could be
installed on traffic lights.
Mr. Marshall stated that he did not believe that the City would allow
installation on traffic lights due to safety concerns.
Council Member Shepherd asked how wireless antennae differed from traffic
cameras.
Mr. Marshall stated that wireless antennae were fairly large and heavy, and
could potentially interfere with the traffic signal.
MOTION PASSED: 8-0 Schmid absent
17. Stanford University Medical Center Community Benefits Discussion and
Appointment of City Representatives to Joint Committee for
Community Health and Safety Programs.
Council Member Klein advised that he would not participate in the Item, as
his wife was a member of the faculty at Stanford University.
Deputy City Manager, Steve Emslie, explained that the Staff Report provided
a summary of the schedule of payments to the City resulting from approval
of the Stanford University Medical Center (SUMC) Development Agreement
in June 2011. He stated that the first payment was due at the time of initial
permit, estimated for summer 2011. The last two payments were due when
the hospital’s foundation permit was pulled in January 2012, and upon
occupancy of the first hospital project some time in 2018. He noted that the
payments were to be divided into three major categories of funds: the
Sustainability Fund ($12,000,000), the Neighborhood Infrastructure Fund
($23,200,000), and the Community Health and Safety Fund ($4,000,000).
He stated that approximately $20,000,000 of the Neighborhood
Infrastructure Fund was uncommitted, and could be used at Council’s
discretion for projects that supported neighborhood infrastructure and other
infrastructure needs of the City. He remarked that Council had designated
$2,000,000 from the Community Health and Safety Fund to go to Project
Safety Net, and that Staff would return after Council’s August break with a
Budget Amendment Ordinance and a job description for the creation of a
Project Safety Net Coordinator position in the Community Services
Department. He stated that Staff’s recommendation was for Council to utilize
the Finance Committee in determining the allocation of the funds. He
explained that the Finance Committee was well equipped to facilitate
conversations within the context of the City’s budgetary priorities and
Capital Improvement Projects.
Mr. Keene stated that there was no particular urgency regarding the issue.
He stated that considering the amount of money that would be needed for
07/25/2011 108-409
Project Safety Net, the $2,000,000 allocation was not an extraordinary sum.
He explained that only a portion of the $2,000,000 would be allocated to the
new Project Safety Net Coordinator staff position. He stated that one of the
reasons that Staff had placed the Item on the Agenda was so that Council
could receive an update on the status of the Project Safety Net Coordinator
position.
Council Member Price observed that although the Staff report stated that the
Finance Committee had recommended the designation of $2,000,000 from
the Community Health and Safety Fund toward Project Safety Net, the
Policies and Services Committee P&S had also reviewed the Item and made
a similar recommendation. She asked that Staff correct the information in
the Staff Report to include the P&S Committee. She asked whether the
purpose of the Joint Stanford/City Committee for Community Health and
Safety Programs was to develop procedures for the utilization of the funds.
Mr. Keene stated that Council Member Price was correct, and added that
Council may want to use the Joint Committee as a model for the assessment
of allocations across all of the Funds. He acknowledged that Council may not
use the same appointment technique for each committee, but emphasized
the need to establish an allocation process and criteria would be more critical
as Council began to make decisions regarding some of the larger Funds.
Council Member Price agreed that Council would need an organized approach
to defining the policy priorities that would determine the allocation of funds.
She stated that although the Staff recommendation was rather broad, it was
important to present Council the opportunity to discuss those issues. She
emphasized that there was a lot of money at stake, and that it would need
to be handled in a careful and responsible manner. She stated that Project
Safety Net was an extremely important project, and that she looked forward
to discussing it further.
Mr. Keene stated that Staff sought direction from Council regarding how to
create a process for allocation of the Community Benefit funds. He explained
that Staff was not yet ready to present specific alternatives, but that with
some direction they could return to Council with a more refined proposal.
Council Member Shepherd stated that the strategic planning and vision work
that had already been done by the Project Safety Net group was extremely
valuable. She asked whether Staff intended to spread out the $2,400,000
fiscal neutrality payment over a number of years.
Mr. Keene stated that the plan for the money was to place it in a savings
account and allow the interest to grow to a point which could guarantee
fiscal neutrality.
07/25/2011 108-410
Council Member Shepherd asked whether Council Member Klein’s
participation in determining allocation of funds which had already been
received from Stanford would represent a conflict of interest.
City Attorney, Molly Stump, stated that Council Member Klein should not
participate in the Joint Committee for Community Health and Safety
Programs.
Council Member Shepherd stated that Council had been asked to offer
direction to Staff regarding allocation of Community Benefit funds, and
asked whether Council Member Klein would be allowed to participate at
some point.
Ms. Stump replied that Council Member Klein’s participation could be further
discussed as the project continued, but that he should not participate at the
present time.
Council Member Shepherd stated that the funds received from Stanford
University should not be used for general purposes, such as balancing the
annual budget.
MOTION: Council Member Shepherd moved, seconded by Vice Mayor Yeh
to accept Staff recommendation to authorize the Mayor to appoint two
Council Members to the Joint Stanford/City Committee for Community
Health and Safety Programs and provide Staff direction regarding the
recommended process for expending Community Benefit funds.
Vice Mayor Yeh agreed with Council Member Shepherd that the money
should not be used to compensate for budgetary deficits within a given fiscal
year, but to establish permanent Funds from which the community could
benefit for years to come.
Council Member Scharff expressed support for the Motion. He stated that the
money should be used in a transformative way to do something positive for
the community of Palo Alto. He stated that Council should focus on only the
highest impact projects, which would require a great deal of input from the
community. He commented that Council should consult the Infrastructure
Blue Ribbon Task Force for their input regarding projects that could be
extremely transformative to the City’s infrastructure. The Council needed to
use the money on long-term rather than short-term projects, and that the
emphasis should be placed on fiscally sustainable projects.
Council Member Burt expressed support for the Motion, but asked for
clarification regarding the Joint Committee. He asked whether, once formed,
the Joint Committee would be advisory to one of the standing committees or
to Council.
07/25/2011 108-411
Mr. Keene replied that the Joint Committee would be advisory to Council. He
stated that most likely, the Joint Committee would seek explicit policy
direction from Council prior to making any commitments.
Council Member Burt stated that it was important to avoid
misunderstandings regarding the delegation of authority. He expressed
concerns regarding the misconception by some that Project Safety Net Staff
would determine how to spend the funds, and asked that any
misunderstandings be addressed as soon as possible. He stated that in order
to avoid a false sense of authority over final decision making, it was
necessary to have open communication and to be very clear from the outset
about where the authority would reside. He stated that two of the Funds
were primarily policy oriented, and so should be sent to the P&S Committee.
He stated that he would like to hear from the other Council Members
regarding which committees should review the Fund allocations.
Mr. Keene explained that Staff was still in the very initial stages of the plan,
but that they had included Finance Committee review in order to connect the
projects to the budget cycle. He assured Council that conversations
regarding Project Safety Net programs had been focused on how to create
endowment funding that would leverage other money to remain sustainable.
He indicated that during Fall 2011, Council might want to move forward with
development of some guiding values and principles regarding the use of the
funds.
Council Member Holman suggested that any advisory committee’s formed to
consider the allocation of funds from either the Sustainability Fund or the
Neighborhood Infrastructure Fund should include different Council Members
than the Joint Committee for Community Health and Safety Programs. She
stated that Mr. Keene had indicated that the Joint Committee would seek
explicit policy directions from Council prior to making any commitments, and
inquired as to what types of commitments the two Council Members would
make.
Mr. Keene stated that his comments were intended to convey that efforts
should be made to avoid a situation in which the Joint Committee Members
made commitments without explicit direction from Council. He stated that
Staff had recommended the Joint Committee because it was specifically
prescribed by the SUMC Development Agreement. He stated that he had
assumed that Council would prefer not to delegate full authority to the two
Council Members appointed to the Joint Committee, but rather to give them
direction prior to making any commitments.
Council Member Holman asked why two Council Members would be making
commitments, and not the Council as a whole.
07/25/2011 108-412
Mr. Keene stated that Council should be making the final decisions, and that
the two Joint Committee Members would need to receive direction from
Council.
Council Member Burt clarified that the Joint Committee for Community
Health and Safety Programs was the only committee specifically referenced
in the SUMC Development Agreement.
Council Member Holman stated that the Joint Committee had been described
as an advisory body, and that she had been unclear as to the intent of Mr.
Keene’s comments. She stated that having received clarification, she would
support the Motion.
Mayor Espinosa stated that he would like to see Staff provide a timeline, a
process, and a list of responsibilities for both the Joint Committee and for
the other two Funds. He would like to see those materials presented for
review not long after Council’s return from the August break so that
everyone was clear early on about how the process would work. He stated
that the issues presented a great deal of overlap, and should be reviewed by
both the Finance and the P&S Committees. He asserted that prior committee
review would allow Council to engage in a broader conversation, and agreed
that community input would be very important moving forward.
MOTION PASSED: 7-0 Klein not participating, Schmid absent
18. Resolution 9194 entitled “Resolution of the Council of the City of Palo
Alto Amending Section 1401 of the Merit System Rules and
Regulations to Incorporate a Side Letter with SEIU Local 521 to Extend
the Term of the Memorandum of Agreement for One Additional Year,
Through June 30, 2012, and Add a Provision for a Flexible Spending
Arrangement.”
City Manager, James Keene, stated that the proposal would extend the SEIU
Local 521 Memorandum of Agreement (MOA) until June 30, 2012. If
approved, Staff would begin negotiation at the end of the calendar year for
the 2012 MOA. He commented that Staff would have placed the Item on the
Consent Calendar, but that the 2010 Santa Clara County Civil Grand Jury
Report had specifically recommended that all cities in the County place labor
agreements on the Action Agenda to improve transparency.
Acting Assistant Director Human Resources, Marcie Scott, stated that the
MOA would apply to 582 full-time equivalent employees working in nearly
every City Department. She explained that in late October 2009, the City
and SEIU were at impasse and could not agree on a wage and benefit
package. As a result, Council implemented significant changes to
compensation and made structural changes to pension and medical benefits.
She explained that the changes included increased employee pension