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HomeMy WebLinkAboutStaff Report 3782 City of Palo Alto (ID # 3782) City Council Staff Report Report Type: Action Items Meeting Date: 6/3/2013 City of Palo Alto Page 1 Council Priority: City Finances Summary Title: Fiscal Year 2014 Budget Adoption Title: PUBLIC HEARING AND PROPOSITION 218 HEARING: Adoption of Budget Amendment Ordinance for FY 2014, including Adoption of Operating and Capital Budgets and Municipal Fee Schedule; Adoption of 6 Resolutions, including: Adopting a Dark Fiber Rate Increase and Amending Utility Rate Schedules EDF-1 and EDF-2; Adopting a Water Rate Increase and Amending Utility Rate Schedules W-1, W-2, W-3, W-4 and W-7; Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Drain Rates by 2.2 Percent Per Month Per Equivalent Residential Unit for Fiscal Year 2014; Amending the 2011-2013 Compensation Plan for Management and Professional Adopted by Resolution No. 9282 to Change the Title and Salary of One Position; Amending the 2012-2013 Memorandum of Agreement for Local 521, Service Employees International Union (SEIU), Adopted by Resolution No. 9277 to Add One new Classification and Amending the 2010- 2014 Compensation Plan for the International Association of Fire Fighters (IAFF) Adopted by Resolution No. 9204 to Properly Record the Top Step Salary for One Existing and Create One New Position From: City Manager Lead Department: Administrative Services Recommendation Staff and the Finance Committee recommend that Council approve the following: A. Budget Amendment Ordinance (Attachment A), which includes: 1. Exhibit 1: the City Manager’s Fiscal Year 2014 Proposed Operating and Capital Budget, previously distributed in the April 29th Council Packet; Fiscal Year 2014 Proposed Municipal Free Schedule previously distributed on May 16th 2. Exhibit 2: Amendments to the City Manager’s Fiscal Year 2014 Proposed City of Palo Alto Page 2 Operating and Capital Budget 3. Exhibit 3: Revised City Table of Organization 4. Exhibit 4: Revised Municipal Fee Schedule pages B. Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Utility Rate Schedules EDF-1 and EDF-2 (Attachment B) C. Resolution of the Council of the City of Palo Alto Adopting a Water Rate Increase and Amending Utility Rate Schedules W-1, W-2, W-3, W-4 and W-7 (Attachment C) D. Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Drain Rates by 2.2 Percent Per Month Per Equivalent Residential Unit for Fiscal Year 2014 (Attachment D) E. Resolution of the Council of the City of Palo Alto Amending the 2011-2013 Compensation Plan for Management and Professional Adopted by Resolution No. 9282 to Change the Title and Salary of One Position (Attachment E) F. Resolution of the Council of the City of Palo Alto Amending the 2012-2013 Memorandum of Agreement for Local 521, Service Employees International Union (SEIU), Adopted by Resolution No. 9277 to Add One new Classification (Attachment F) G. Resolution of the Council of the City of Palo Alto Amending the 2010-2014 Compensation Plan for the International Association of Fire Fighters (IAFF) Adopted by Resolution No. 9204 to Properly Record the Top Step Salary for One Existing and Create One New Position (Attachment G) Executive Summary The attached documents outline the amendments to the City Manager’s Fiscal Year 2014 Operating and Capital Proposed Budgets, Utility rate changes, and amendments to various employee compensation plans. Background The City Manager’s Fiscal Year 2014 Proposed Operating Budget and the Fiscal Year 2014 Proposed Capital Budget were submitted to City Council on April 29, 2013. During the month of May, the Finance Committee held hearings and reviewed the Proposed Budget, including the General Fund, Enterprise Funds, Internal Service Funds, Capital Improvement Programs, and the Municipal Fee Schedule. A total of five public hearings were held on May 7, 9, 14, 16, and 23 during which the Committee reviewed and discussed the City’s operating and capital expenditures for the next year. As a result of the hearings, the Finance Committee and staff have recommended changes to the Fiscal Year 2014 Proposed Budget as discussed below. Detail for these transactions is listed in City of Palo Alto Page 3 the Amendments to the City Manager’s Fiscal Year 2014 Proposed Budget schedule (Attachment A, Exhibit 2). Staff is to presenting to Council a balanced budget that does not contain significant cost/service reductions as in prior years. The vigorous local economy has generated a trend of rising revenues and has resulted in a recovery of the City’s tax and permit revenues. Tax revenues have experienced 20.6 percent grown from Fiscal Year 2009, from $65.8 million to $79.3 million in FY 2013. The Fiscal Year 2014 projects 5 percent overall growth over the Fiscal Year 2013 adopted budget. Improved revenue has allowed the General Fund to fund for a series of important one-time investments and to fill positions that were frozen due to financial constraints. In addition to improved revenues, a key element that helped yield a balance budget is cost savings. Since Fiscal Year 2010, the City has made $26.3 million in one-time and ongoing expense reductions. Of this amount, the General Fund reduced costs by $5.9 million majority of which were reductions of employee salary and benefit costs. The City Manager’s transmittal letter, which can be found on pp. xi-xviii of the Proposed City Manager’s Operating Budget provides a detailed overview and discussion of these items as well as future challenges that the City faces. Discussion This staff report focuses primarily on the financial changes recommended by the Finance Committee and staff during the public hearing process that followed the submission of the original proposed budget. Certain key non-financial changes are also highlighted in this report. All other non-financial recommended changes to the proposed budget are described in the budget wrap memorandum (Appendix 1), which was distributed to the Finance Committee on May 23rd, and will be incorporated into the Fiscal Year 2014 Adopted Budget. Adjustments to Date This section summarizes actions made by the Finance Committee during the department budget hearings that occurred in May and wrapped on May 23rd. Detail in this section is organized by fund then by department. The discussion below segregates changes that were initiated by the Finance Committee from changes that are initiated by staff. A summary of Full- Time Equivalent (FTE) changes is presented following fund detail. Human Services Resource Allocation Process Fiscal Year 2014 Funding Recommendation At the May 9, 2013 Finance Committee meeting, city staff introduced the draft funding recommendation for the Human Services Resource Allocation Process (HSRAP) for FY 2014. The City of Palo Alto Page 4 funding recommendation allocated $300,737 to fourteen agencies, including two new agencies. Staff explained that funding was freed up for the two new agencies only as a result of a 5 percent cut to current grantees. HSRAP funding has been reduced 10 percent since 2005 due to City budget constraints. Members of the Finance Committee expressed a desire to allocate additional HSRAP funding but felt that the decision needed to be made within the context of the full Community Services Department (CSD) budget discussion later that meeting. During that subsequent discussion, the Committee passed a motion to allocate $55,523 in additional HSRAP funding. The Human Relations Commission (HRC) was then charged with bringing back a proposal for fund distribution. A sub-committee of the HRC drafted a funding recommendation that that was presented to the full HRC on May 24, 2013 where it passed unanimously. An explanation of the proposed funding recommendation (Attachment H) is as follows: 1) Previous recommended funding reduction of 5 percent for FY 2014 restored to agencies affected. This amounted to $15,037 for the existing fourteen agencies. 2) $11,511 used as base amount for new increases for Inn Vision Shelter Network (IVSN). This was amount proposed by the HRC before additional funds were recommended by the Finance Committee. Staff found that if IVSN was returned to their base grant amount for FY 2012-13, $8,920, as the starting point for the new increases, they would be the only agency which would not be better off with the increased funds recommended by the Finance Committee. The HRC wanted to make substantial increase in IVSN’s funding as the primary provider of food for homeless and low income people in the community. 3) Additional funding recommended for Dream Catchers and Palo Alto Housing Corporation. 4) “Starter” grant of $5,000 recommended for VISTA Center for the Blind and Visually Impaired. 5) 1 percent increase recommended for Palo Alto Community Child Care and Avenidas. 6) Balance of $24,426 distributed in equal percentage to each remaining agency based proportionally on their current contract amount. Kara, a grief counseling organization, was not recommended for funding. It was the opinion of the HRC that their recent Human Services Needs Assessment did not uncover an unmet need for grief services. They also felt that the fee structure for clinical services was beyond the reach of many low- to moderate-income residents. Finally the HRC felt that funding three new agencies was already a calculated risk, given HSRAP's limited funding and history of budget cuts. Funding a fourth, especially one whose programs are not as well aligned with community needs and human services gaps, was not reasonable at this time. City of Palo Alto Page 5 General Fund The Fiscal Year 2014 Proposed Budget presented to City Council on April 29th reflected a $220,000 budget surplus. Changes approved by the Finance Committee resulted in a net budget surplus of $31 thousand. Based on the latest audited financials (as of June 30, 2012), the Budget Stabilization Reserve (BSR) balance at the end of Fiscal Year 2014 is estimated to be $30.306 million, or 18.9 percent of the Proposed Operating Budget $160.0 million for total expenses. The City’s adopted reserve policy stipulates that a reserve range of 15 to 20 percent of General Fund operating expenditures, with a target of 18.5 percent, shall be maintained. The Fiscal Year 2014 projected BSR percentage falls within this range and meets the targeted BSR percentage. Table 1: Amendments to the Proposed General Fund Budget Date Dept Description Amount Proposed budget - BSR increase $220 5/7 PSO HRIS consultant (exp incr)(50) 5/7 POL PD scheduling software (exp incr)(50) 5/9 CSD *Add'l HSRAP (exp incr)(56) 5/16 Various Adjustments for parking district (exp decr)128 5/16 PWD Remove PW non-sal for parking district (exp decr)40 5/16 PWD Infrastructure ballot funding (exp decr)15 5/16 PWD Tree trimming contract (exp incr)(70) 5/23 POL *Add 1 FTE School Resource Officer (SRO) (exp incr)(168) 5/23 POL *Contribution from PAUSD for SRO (rev incr)84 5/23 CSD Baylands California Land Management (exp incr)(77) 5/23 COU Remove add'l funding for council meals (exp decr)15 Subtotal - tentatively approved changes to date ($189) Tentatively approved budget - BSR increase $31 * Change initiated by the Finance Committee. Finance Committee Recommended Changes to the City Manager’s Proposed Budget Community Services Department, net $55,523 budget increase The Finance Committee initiated a proposed $55,523 increase to HSRAP funding the the Community Services Department Budget. City of Palo Alto Page 6 Police Department, net $84,250 budget increase The Finance Committee initiated a proposed net increase of $84,250 increase to the Police Department budget, and approved an additional 1 FTE Police Officer for the School Resource Officer program. The addition of this position, $168,500, is contingent upon the Palo Alto Unified School District reimbursing the City for one half , $84,250, of the total cost of the position. Staff Recommended Changes to the City Manager’s Proposed Budget Community Services Department, net $76,610 budget increase California Land Management provides both ranger patrol and park maintenance services within the Baylands Nature Preserve. In addition to these services, the contractor also enforces City regulations and ordinances, maintenance, and litter and trash removal. The Community Services and Public Works Departments (through the Refuse Fund) share the cost of the contract. In anticipation of the landfill closure, Community Services will assume the contract costs in its Department budget. People Strategy and Operations, net $50,000 budget increase In addition to changes outlined in the People Strategy and Operations department proposed budget, $50,000 is being requested for a consultant to assist in preliminary planning and selection of a Human Resources Information System (HRIS). The department is looking for a system that is much more intuitive; organized the way staff handles daily operations. Parking Permit Fund related changes, net $126,643 budget reduction For 2014, activity for the University Avenue Parking Permit Fund and the California Avenue Parking Permit Fund is centralized and consolidated in the proposed budget. Previously, the expenditures related to the maintenance and administration of these funds was budgeted in the General Fund and Refuse Fund, with the General Fund and Refuse Fund being reimbursed for those costs out of the appropriate parking fund, via fund transfers. Beginning in 2014, all costs associated with the districts are budgeted directly in the parking funds. As staff was preparing all of the necessary changes, a few adjustments were inadvertently omitted, and are therefore recommended to be corrected as part of this memorandum. The benefits associated with parking-related positions in the Planning Department, Administrative Services Department, and Public Works Department were not eliminated from the General Fund. No adjustments for the benefits are required in the Parking Funds. These changes result in a decrease of $139,620 in the General Fund, and will be realized as follows: City of Palo Alto Page 7 Administrative Services Department: ($62,555) Planning and Community Environment: ($8,079) Public Works Department: ($68,986) Additionally, the budget for utilities at the garages was established in the Parking Funds, but not reduced from the Public Works Department. A reduction to the Utilities budget in the Public Works Department in the amount of $139,905 is recommended. In the University Avenue Parking Permit Fund, a transfer from the General Fund ($152,882), Utilities Funds ($27,093), and Technology Fund ($13,546) is recommended. This transfer, which was assumed in the Parking Fund but not budgeted for in the General Fund, is intended to reimburse the Parking District for the share of spaces in the garages and lots utilized by City staff. The budget in the Parking Funds is correctly stated in the proposed budget. Public Works Department, net $40,250 budget reduction Previously, the expenses related to maintenance and administration of these funds was budgeted in the General Fund, with those funds reimbursed by transfers from the Parking Permit Funds (primarily through permit sales). A decrease of $40,250 to the Public Works General Fund budget is recommended, as these costs ($40,000 for contract services and $250 for General Expenses) are now accounted for in the Parking Permit Funds. An increase of $70,000 is recommended for the Public Works General Fund budget because bids for tree trimming services are higher than originally anticipated. Police Department, net $50,000 budget increase In addition to changes outlined in the Police Department proposed budget, $50,000 is being requested for the purchase of scheduling software. The department currently tracks overtime and schedules manually with spreadsheets. City Council, net $15,000 budget decrease The 2014 Proposed Budget for the City Council included a recommended $15,000 increase for meals. The increase was in response to a higher number of meetings requiring meals. Upon further review, it has been determined that the increased meals costs can be accommodated City of Palo Alto Page 8 through existing resources; therefore, a $15,000 reduction to the City Council proposed budget is recommended. Enterprise Funds Changes to the Enterprise Funds Fiscal Year 2014 Proposed Budget are listed below. Staff Recommended Changes to the City Manager’s Proposed Budget Utilities Department, net $198,179 budget increase 0.87 FTE Sr. Technologist was inadvertently moved to the Information Technology Fund – this change is to restore funding to the Utilities Department. This change has a net $162,780 budget increase. The Proposed Budget includes a full-time equivalent (FTE) add of 0.5 FTE Program Assistant I and results in a salaries and benefits increase of $52,287. Staff requests an amendments to the Proposed Budget to drop 0.5 FTE Program Assistant I, and add 1.0 FTE Utilities Project, Coordinator. The gross salaries and benefits impact of this change is an increase of $94,686. The result is a net budget increase of $42,399 to the proposed budget. This Utilities Project, Coordinator position will assist the Communications Manager by coordinating complex communications projects, including program and service outreach and education. Allocated charges to the Water Fund from the Wastewater Treatment Fund are decreased from $51,000 to $44,000 to align the budget with expected actuals. These charges represent laboratory work done for the Water Fund by staff at the Water Quality Control Plant. Utilities Parking Permit Fund related changes, net $27,093 budget increase In the University Avenue Parking Permit Fund, a transfer from the Utilities Funds ($27,093) is recommended. This transfer, which was assumed in the Parking Fund but not budgeted for in the Utilities Fund, is intended to reimburse the Parking District for the share of spaces in the garages and lots utilized by City staff. The budget in the Parking Funds is correctly stated in the proposed budget. Public Work Department, net $24,324 budget increase 0.13 FTE Sr. Technologist was inadvertently moved to the Information Technology Fund – this change is to restore funding to the Public Works Department. This change has a net $24,324 budget increase. City of Palo Alto Page 9 Special Revenue Funds Finance Committee Recommended Changes to the City Manager’s Proposed Budget Stanford University Medical Center Fund The 2014 Proposed Operating Budget included a recommendation to fund the Bicycle and Pedestrian Transportation Plan (PL-04010; $1.2 million) from the Stanford University Medical Center (SUMC) Fund. The Finance Committee recommended against the usage of SUMC funds at this time, as the Policy and Services Committee will be reviewing the allocation process for the SUMC Fund. To ensure that the project can continue in the meantime, until the Council makes a final determination, the Finance Committee recommended that the Infrastructure Reserve be used. Staff Recommended Changes to the City Manager’s Proposed Budget University Avenue Parking Permit Fund In the University Avenue Parking Permit Fund, an increase to the budgeted revenue estimate of $118,915 is recommended. This revenue increase is anticipated to be achieved through an 8.5 percent increase to the parking permit, day pass, and ticket machine fees. Additionally, a transfer to the Capital Improvement Fund in the amount of $340,900 is recommended for improvements within the district. California Avenue Parking Permit Fund In the California Avenue Parking Permit Fund, a transfer to the Capital Improvement Fund in the amount of $186,400 is recommended for improvements within the district. No adjustment to the budgeted revenue estimate is recommended, although a 15 percent increase to the fees is proposed. Debt Service Funds Staff Recommended Changes to the City Manager’s Proposed Budget Sale of the second series of the Measure N General Obligation (GO) bonds will occur in June 2013. The GO bonds will fund capital improvements to the Mitchell Park, Downtown, and Main libraries and to the Mitchell Park community center. The Measure allows for a total issuance amount of $76 million, of which $55 million was issued in May 2010. The second series of the GO bonds is estimated to be $21 million and will fund planned improvements to the Main Library and potentially to cover any unanticipated costs associated with the Mitchell Park library and community center projects. Annual debt service is estimated to be $0.6 million and is offset by assessed property tax. City of Palo Alto Page 10 Internal Service Funds Staff Recommended Changes to the City Manager’s Proposed Budget Information Technology Department, net zero budget impact The first recommended adjustment to the Information Technology Fund is an increase of $50,000 allowing for the purchase of police scheduling software. The current process for scheduling police hours and shifts is very manual and time intensive. An increase to Information Technology Fund revenue ($50,000) is also recommended, as is a corresponding increase to the Police Department General Fund allocation. The second recommended change is a correction to the staffing level in the Information Technology Department. The Proposed Budget Changes table indicates that a Sr. Technologist position was reallocated from Enterprise Funds to the Information Technology Fund. The reallocation of this position was inadvertent and is therefore recommended that the funding for this position be eliminated from the Information Technology Fund and restored to the Utilities Funds (87%), Refuse Fund (11%), and Storm Drain Fund (2%). The total cost of this position, including benefits, is $187,104. Information Technology Parking Permit Fund related changes, net $13,546 budget increase In the University Avenue Parking Permit Fund, a transfer from Technology Fund ($13,546) is recommended. This transfer, which was assumed in the Parking Fund but not budgeted for in the Information Technology Fund, is intended to reimburse the Parking District for the share of spaces in the garages and lots utilized by City staff. The budget in the Parking Funds is correctly stated in the proposed budget. Vehicle Replacement Fund, net $300,000 budget increase The FY 2014 budget for CIP VR-14000 Scheduled Vehicle and Equipment Replacements is increased by $300,000 from $2,700,000 to $3,000,000. This increase includes $100,000 to purchase and outfit a 2013 Chevy Suburban for the Fire Department. This vehicle will replace their current command unit #6059. An additional $200,000 is needed for the purchase of an aerial ladder truck for the Fire Department. Subsequent to the development of the Proposed Capital Budget, a quote of $1,195,346 was received which is approximately $200,000 above the original estimate. Both of these items have been reviewed and approved by the Fleet Review Committee. City of Palo Alto Page 11 Infrastructure/Capital Fund Finance Committee Recommended Changes to the City Manager’s Proposed Budget Infrastructure Reserve, $1.2 million budget impact The 2014 Proposed Operating Budget included a recommendation to fund the Bicycle and Pedestrian Transportation Plan (PL-04010; $1.2 million) from the Stanford University Medical Center (SUMC) Fund. The Finance Committee recommended against the usage of SUMC funds at this time, as the Policy and Services Committee will be reviewing the allocation process for the SUMC Fund. To ensure that the project can continue in the meantime, the Finance Committee recommended that the Infrastructure Reserve be used for this project. Staff Recommended Changes to the City Manager’s Proposed Budget Capital Projects Fund, net $527,300 budget increase CIP PF-14003 University Avenue Parking District Parking Improvements created to account for capital work to parking facilities. Fiscal Year 2014 expenses projected of $340,900. CIP PF-14004 California Avenue Parking District Parking Improvements created to account for capital work to parking facilities. Fiscal Year 2014 expenses projected of $186,400. Follow Up Items for the Finance Committee Police Department – School Resource Officer The Finance Committee recommended a $84,250 net budget increase to the Police Department to add 1.0 FTE Police Officer as the School Resource Officer Program. The total cost of the Police Officer, $168,500, is recommended to be offset by a contribution from the Palo Alto Unified School District (PAUSD), $84,250, reimbursing for half of the position. The addition of resources for this program is contingent upon the reimbursement from PAUSD. Staff will follow up discussion with PAUSD regarding partial reimbursement of this position. If discussions do not result in a contribution from PAUSD, staff will return to Council for further discussion. Table of Organization Amended pages to the Fiscal Year 2013 Position Allocation by Department are included with this report (see Attachment A, Exhibit 3). The table has been revised to reflect the staffing changes presented in this report. Changes reflected in the Table of Organization will be incorporated into the relevant department organization charts and the revised organization charts will be published in the adopted budget. The changes are as follows: City of Palo Alto Page 12  Utilities allocations – net increase 0.87 FTE o Reclassify 1.00 FTE Program Assistant I to 1.00 FTE Coordinator Utilities Projects o Reallocate 0.87 FTE Sr. Technologist from Information Technology to Utilities  Public Works allocations – net increase 0.13 FTE o Reallocate 0.13 FTE Sr. Technologist from Information Technology to Refuse Fund (0.11 FTE) and Storm Drainage Fund (0.02 FTE)  Information Technology allocations – net decrease 1.00 FTE o Reallocate 1.00 FTE Sr. Technologist to the City’s Enterprise Funds  Police Department – net increase 1.00 FTE School Resource Officer (Police Officer)  Community Services Department – net change 0.00 FTE o Reclassify 1.00 FTE Division Manager Recreation and Golf to Assistant Director Community Services o Reclassify 1.00 FTE Community Services Manager to Community Services Senior Program Manager Compared to the Fiscal Year 2013 Adjusted Budget, the Proposed Budget presented to Council on April 29th had a net 4 FTE increase. Below is a summary by fund of these changes. Detail for the FTE Amendments to the Proposed Budget is discussed previously in this report within each department section. Table 2: Summary of FTE Changes General Fund Enterprise Funds Other Funds*Citywide FY 2013 Adopted 578.06 357.82 78.47 1014.35 FY 2013 Net Midyear Changes 1.65 0.00 (0.65)1.00 FY 2013 Adjusted 579.71 357.82 77.82 1015.35 FY 2014 Reallocations (1.86)(5.12)6.98 0.00 FY 2014 Eliminations (7.50)0.00 0.00 (7.50) FY 2014 Adds 7.45 1.85 2.20 11.50 Subtotal of 2014 Changes (1.91)(3.27)9.18 4.00 FY 2014 Proposed**577.80 354.55 87.00 1019.35 * Other Funds are Internal Service Funds, Special Revenue Funds, and the Capital Fund ** Includes 2 frozen FTE in the Library Department Municipal Fee Schedule City of Palo Alto Page 13 On May 16th, the Finance Committee recommended that the Council adopt the changes to the Fiscal Year 2014 Proposed Municipal Fee Schedule (staff report ID #3804) with amendments (Attachment A, Exhibit 4). Fee increases were deferred pending completion of the cost of services study. For Fiscal Year 2014, changes have been limited to fees which are mandated, new fees, corrections to previous year fee adjustments and enhancements to fee descriptions to provide reader clarity. Based on prior years’ fee analyses and rising benefit costs, the fees will still remain below full cost recovery levels. Once the cost of services study is finalized additional fee modifications will be discussed. Please refer to staff report ID #3804 for additional information. The staff recommended, and was accepted by the Finance Committee, the following changes to the City Manager’s Proposed Municipal Fee Schedule. The recommendations are: 1. Development Impact Fees:  Parks - Both residential and nonresidential fees decreased $1/unit  Libraries – Residential, Multi-family cost per unit decreased $10 for units greater than 900 square feet 2. Housing Impact Fees:  Increased Housing Impact fee $0.45 per square foot for nonresidential development 3. Traffic Impact Fees:  Citywide Transportation Impact Fee – Increased transportation impact fee $144 per net new PM peak hour trip  Charleston/Arastradero – Increased fee $0.01 per square foot for commercial units and $53 per square foot for residential units 4. Parkland Dedication Fee:  Increased fees for both Single-family and Multi-family projects by $1,849/unit and $1,288/unit, respectively. 5. Transportation Fees: (8.5% - University Ave, 15% - California Ave)  Increased fees for quarterly permits and quarterly transferable permits within Business Districts by $6.50.  Increased fees for annual permits within Business Districts by $26  Increased fee for one-day parking permit in California Avenue Business District by $1  Increased fee for one-day parking permit in University Avenue Business District by $1.50 City of Palo Alto Page 14  Increased fee for quarterly permits and quarterly transferable permits within the University Avenue Parking District by $11.50  Increased fee for annual permits within the University Avenue Parking District by $46 Rate Changes Staff and the Finance Committee recommend that Council approve the following Utility Rate Changes:  Fiber Optic Rate Increase (Attachment B): rates are adjusted annually based on the Consumer Price Index (CPI). The Fiber Optic Rate will increase 2.2 percent to reflect the annual CPI change. See Staff Report ID #3778 for additional information.  Water Rate Increase (Attachment C): 7 percent increase due to changes in water purchase cost, operating costs, and capital projects in the fund. See Staff Report ID #3596 for additional information.  Storm Drain Rate Increase (Attachment D): rates are adjusted annually based on the Consumer Price Index (CPI). The Storm Drain Rate will increase 2.2 percent to reflect the annual CPI change. See Staff Report ID #3641 for additional information. Compensation Plans Changes in the proposed Fiscal Year 2013 budget result in these amendments to the following compensation plans:  Management and Professional (Attachment E): title change and salary for the Chief Sustainability Officer  Service Employees International Union (SEIU) (Attachment F): add the Senior Industrial Waste Investigator classification  International Association of Fire Fighters (Attachment G): adjust top step for the Haz Mat Inspector classification and add the Haz Mat Inspector – EMT classification Resource Impact The Fiscal Year 2013 Proposed Budget as submitted by staff to the City Council results in a BSR contribution of $31 thousand. The projected ending balance for the BSR in Fiscal Year 2014 is $160.0 million and equals 18.9 percent of the Proposed Operating Budget. Per the adopted reserve policy, a reserve range of 15 to 20 percent of the General Fund operating expenditures, with a target of 18.5 percent, shall be maintained. The projected FY 2014 ending BSR balance of 18.9 percent of General Fund operating expenditures falls within the 15 to 20 percent range of the adopted reserve policy. City of Palo Alto Page 15 As a result of the changes to the capital budget, the projected ending balance in the Infrastructure Reserve (IR) for Fiscal Year 2014 is $10.6 million. Additional changes to the Enterprise Funds result in an approximately $0.2 million net decrease in reserve balances in Fiscal Year 2014 from the proposed document. The proposed FY 2014 budget for Internal Service Funds results in a net decrease to reserves totaling $0.1 million. Environmental Review The adoption of the City’s Annual Budget is not a project under the California Environmental Quality Act. Attachments:  Attachment A - Fiscal Year 2014 Budget Adoption Budget Amendment Ordinance (PDF)  Attachment A, Exhibit 1 - FY 2014 Proposed Budget & Muni Fee Previously Distributed (DOCX)  Attachment A, Exhibit 2 - Amendments to Proposed Budget (PDF)  Attachment A, Exhibit 3 - Revised Table of Organization (PDF)  Attachment A, Exhibit 4 - Revised Muni Fees (PDF)  Attachment B - Resolution for Dark Fiber Rate Increase (PDF)  Attachment C - Resolution for Water Rate Increase (PDF)  Attachment D - Resolution for Storm Drain Rate Increase (PDF)  Attachment E - Resolution for Management & Professional Compensation Plan Changes (PDF)  Attachment F - Resolution for Service Employees International Union (SEIU) Memorandum of Agreement (MOA) Changes (PDF)  Attachment G - Resolution for International Association of Fire Fighters (IAFF) Compensation Plan Changes (PDF)  Attachment H - 2013-15 HSRAP Funding Recommendations to City Council (PDF)  Appendix 1 - Budget Wrap Up Memo (May 23, 2013) (PDF)  Appendix 2 - Memos Distributed to Finance Committee At Places (PDF)  Appendix 3 - Staff Presentations to Finance Committee (PDF)  Appendix 4 - Finance Committee Minutes May 7, 2013 (DOC)  Appendix 4 - Finance Committee Minutes May 9, 2013 (DOC)  Appendix 4 - Finance Committee Minutes May 14, 2013 (DOC) City of Palo Alto Page 16  Appendix 4 - Finance Committee Minutes May 16, 2013 (DOC)  Appendix 4 - Finance Committee Minutes May 23, 2013 (DOC)  Letter to Council - Item 17 (PDF) ATTACHMENT A 1 ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2014 SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 6(g) of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2014; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 3 and 10, 2012, hold public hearings on the budget after publication of notice in accordance with Section 2.28.070 of the Palo Alto Municipal Code; and C. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on June 3 and 10, 2012, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing. SECTION 2. Pursuant to Chapter 2.28 of the Palo Alto Municipal Code, the following documents, collectively referred to as “the budget” are hereby approved and adopted for Fiscal Year 2014: (a) The budget document (Exhibit “1”) containing the proposed operating and capital budgets submitted on April 29, 2013, by the City Manager for Fiscal Year 2014, entitled “City of Palo Alto - City Manager’s Fiscal Year 2014 Proposed Budget” covering General Government Funds, Enterprise Funds and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and ATTACHMENT A 2 (b) The Amendments to the City Manager’s Fiscal Year 2014 Proposed Budget, attached hereto as Exhibit “2,” and made a part hereof; and (c) Changes and revised pages in the Table of Organization, attached hereto as Exhibit “3,” and made a part hereof; and (d) Revised pages of the Municipal Fee Schedule attached hereto as Exhibit “4”; and SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein. SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended. SECTION 5. Appropriations for the Fiscal Year 2013 that are encumbered by approved purchase orders and contracts for which goods or services have not been received or contract completed, and/or for which all payments have not been made, by the last day of the Fiscal Year 2013 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2014. SECTION 6. The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit “2” and the Fiscal Year 2013 appropriations carried forward as provided in Section 5. SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City’s funds to the Director of Administrative Services, as Treasurer, in accordance with the City’s Investment Policy for Fiscal Year 2014. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit “4”. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental ATTACHMENT A 3 activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer’s burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning Department fees relating to a “development project” as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art. XIII C, Section 1(e)(2), such fees are not a tax. SECTION 11. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 12. Except as specified in Section 9, as provided in Section 2.04.330 (a)(3) of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ______________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: City Attorney ATTACHMENT A 4 APPROVED: City Manager Director of Administrative Services ATTACHMENT A, EXHIBIT 1 Fiscal Year 2014 City Manager’s Proposed Operating & Capital Budget These documents were originally distributed in Council Packet April 29, 2013. Printed copies are available upon request for $22 per book. The Proposed Fiscal Year 2014 Municipal Fee Schedule was distributed in Council Packet on May 16, 2013 These documents may be viewed at any City of Palo Alto Library or the City’s website: www.cityofpaloalto.org/depts/asd/budget.asp ATTACHMENT A, EXHIBIT 2 Category Amount Description GENERAL FUND Operating Transfer 152,882                   Establish Transfer to University Avenue Parking Fund for City Share 152,882                  (152,882)$                Salaries and Benefits (43,082)                  Reduce Benefits associated with University Avenue Parking Fund Salaries and Benefits (19,475)                  Reduce Benefits associated with California Avenue Parking Fund (62,557)                    62,557$                   CITY COUNCIL General Expense (15,000)                   City Council Meals (15,000)                   15,000$                  Contract Services 76,610                    California Land Management Contract  55,523                    Additional HSRAP funding 132,133                  (132,133)$                Contract Services 50,000                    Planning consultant for an HRIS system 50,000                     (50,000)$                  Salaries and Benefits (7,271)                      Reduce Benefits Associated with University Avenue Parking Fund Salaries and Benefits (808)                         Reduce Benefits Associated with California Avenue Parking Fund (8,079)                       8,079$                      Reimbursement 84,250                     Reimbursement from Palo Alto Unified School District for one half of School  Resource Officer expansion 84,250                      Salaries and Benefits 168,500                   Additional Police Officer position for expansion of School Resource Officer  Program. Allocated Charges 50,000                     Staffing and scheduling software  218,500                   (134,250)$                Use Changes POLICE Use Changes Net Changes To (From) Reserves Use Changes PLANNING & COMMUNITY PEOPLE STRATEGY AND OPERATIONS  Use Changes Net Changes To (From) Reserves Net Changes To (From) Reserves Net Changes To (From) Reserves Use Changes Net Changes To (From) Reserves Use Changes Net Changes To (From) Reserves COMMUNITY SERVICES Net Changes To (From) Reserves ADMINISTRATIVE SERVICES Use Changes Use Changes NON‐DEPARTMENTAL CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET  5/29/2013 General Fund 2012 ATTACHMENT A, EXHIBIT 2 Category Amount Description CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET  Salaries and Benefits (59,135)                   Reduce Benefits associated with University Avenue Parking Fund Salaries and Benefits (9,851)                      Reduce Benefits associated with California Avenue Parking Fund Allocated Charges (18,187)                    Eliminate Budget for Utilities associated with California Avenue Parking  Permit Fund. Allocated Charges (121,719)                  Eliminate Budget for Utilities associated with University Avenue Parking  Permit Fund. Contract  Services/General  Expense (40,250)                    Eliminate Contract Services ($40,000) and General Expenses ($250) formerly  associated with University Avenue and California Avenue Parking Permit  Funds.   (15,000)                  Engineering support for potential infrastructure measure 70,000                    Tree trimming contract ‐ responses are coming in higher than budgeted (194,142)                  194,142$                 Total General Fund Changes to BSR (189,487)$                Tsf from Other Funds (1,200,000)               Decrease transfer from SUMC development agreement for CIP PL‐11000  Bicycle & Pedestrian Transportation Plan Tsf from Other Funds 186,400                  Transfer from California Ave Parking Permit Fund for CIP project Tsf from Other Funds 340,900                  Transfer from University Ave Parking Permit Fund for CIP project Source Changes (672,700)                  CIP 186,400                   Establish CIP PF‐14004 California Ave Parking District Parking Improvements CIP 340,900                   Establish CIP PF‐14003 University Ave Parking District Parking Improvements Use Changes 527,300                   (1,200,000)$           Capital Fund Infrastructure ReserveNet Changes To (From) Reserves PUBLIC WORKS Use Changes Net Changes To (From) Reserves GENERAL FUND CIP  5/29/2013 General Fund 2012 ATTACHMENT A, EXHIBIT 2 Category Amount Description ENTERPRISE FUNDS UTILITIES ADMIN Reimbursements 69,492            Reimbursements from Utilities Funds for add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Source Changes            69,492  Salaries and benefits 42,399          To add 1.0 FTE Utilities Coordinator, Projects; drop 1.0 FTE  Program Assistant I Tsf to Other Funds 27,093            Establish Transfer to University Avenue Permit Parking  Fund for City Share  Use Changes 69,492           Net Changes To (From) Reserves                     ‐     Fund Balancing Entries                      ‐   Change in Fund Balance  Total Utilities Administration Fund                     ‐    ELECTRIC FUND Salaries and benefits 54,260          Reallocate 0.29 FTE Sr. Technologist back to Electric Fund  from Technology Fund  (position was reallocated in error) Allocated charges 31,618            Increase utilities administration charges to add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Use Changes            85,878   Net Changes To (From) Reserves          (85,878)  Fund Balancing Entries           (85,878) Change in Fund Balance  Total Electric Fund          (85,878) CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET  5/29/2013 Enterprise Funds 2012 ATTACHMENT A, EXHIBIT 2 Category Amount Description CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET   FIBER OPTICS FUND  Allocated charges 1,851              Increase utilities administration charges to add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Use Changes 1,851             Net Changes To (From) Reserves            (1,851)  Fund Balancing Entries             (1,851) Change in Fund Balance  Total Fiber Optics Fund            (1,851)  GAS FUND 7 Salaries and benefits 54,260          Reallocate 0.29 FTE Sr. Technologist back to Gas Fund from  Technology Fund  (position was reallocated in error) Allocated charges 14,578            Increase utilities administration charges to add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Use Changes 68,838           Net Changes To (From) Reserves          (68,838)  Fund Balancing Entries           (68,838) Change in Fund Balance  Total Gas Fund          (68,838) Allocated charges 8,265              Increase utilities administration charges to add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Use Changes              8,265   Net Changes To (From) Reserves            (8,265)  Fund Balancing Entries             (8,265) Change in Fund Balance  Total Wastewater Collection Fund            (8,265) WASTEWATER COLLECTION FUND 5/29/2013 Enterprise Funds 2012 ATTACHMENT A, EXHIBIT 2 Category Amount Description CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET   WATER FUND 7 Salaries and benefits 54,260            Reallocate 0.29 FTE Sr. Technologist back to Water Fund  from Technology Fund  (position was reallocated in error) Allocated charges (7,000)             Decrease charges from Wastewater Treatment Fund to  align budget with expected actuals for Water Quality  Control Plan lab charges Allocated charges 13,180            Increase utilities administration charges to add 1.0 FTE  Utilities Coordinator, Projects; drop 1.0 FTE Program  Assistant I, and for transfer to Univ. Ave. Parking Permit  Fund  Use Changes 60,440           Net Changes To (From) Reserves          (60,440)  Fund Balancing Entries           (60,440) Change in Fund Balance  Total Water Fund          (60,440)  REFUSE FUND  Salaries and benefits            20,581  Reallocate 0.11 FTE Sr. Technologist back to Refuse from  Technology Fund (position was reallocated in error)  Use Changes            20,581   Net Changes To (From) Reserves          (20,581)  Fund Balancing Entries           (20,581) Change in Fund Balance  Total Refuse Fund          (20,581)  STORM DRAINAGE FUND  Salaries and benefits              3,742  Reallocate 0.02 FTE Sr. Technologist back to Storm  Drainage Fund from Technology Fund (position was  reallocated in error)  Use Changes              3,742   Net Changes To (From) Reserves            (3,742)  Fund Balancing Entries             (3,742) Change in Fund Balance  Total Refuse Fund            (3,742) 5/29/2013 Enterprise Funds 2012 ATTACHMENT A, EXHIBIT 2 Category Description Operating Transfer 186,400             Resurface Lot 7 186,400              Use Changes (186,400)             Service Fees/Permits/ Licenses 118,915              8.5% parking permit fee increase 118,915              Operating Transfer 340,900             Various capital Improvements to Parking Districts Use Changes 340,900              (221,985)             563,703             Library G.O. Bonds, Election of 2008, Series 2013 Source Changes (563,703)             563,703             Library G.O. Bonds, Election of 2008, Series 2013 Use Changes 563,703              (0)                         300,000           Purchase fire command vehicle and aerial ladder truck (CIP VR‐14000)  Use Changes 300,000            (300,000)           Operating Transfer 50,000               Charges from Police Department associated with PD scheduling software. Source Changes 50,000              Contract Services 50,000             PD Scheduling Software Salaries and Benefits (187,104)          Reallocate Sr. Technologist to Enterprise Funds Operating Transfer 13,546             Establish Transfer to University Avenue Parking Fund (City Share) Use Changes (123,558)           173,558              CALIFORNIA AVENUE PARKING PERMIT FUND LIBRARY PROJECT DEBT SERVICE FUND VEHICLE REPLACEMENT FUND INFORMATION TECHNOLOGY FUND Net Changes To (From) Reserves Net Changes To (From) Reserves UNIVERSITY AVENUE PARKING PERMIT FUND Source Changes Net Changes To (From) Reserves CITY OF PALO ALTO AMENDMENTS TO THE CITY MANAGER'S 2014 PROPOSED BUDGET  SPECIAL REVENUE FUNDS Amount Net Changes To (From) Reserves INTERNAL SERVICE Net Changes To (From) Reserves 5/29/2013 Other Funds 2012 - 1 - City of Palo Alto Fiscal Year 2014 Proposed Budget Summary of Position Changes FTE GENERAL FUND FY 2013 ADOPTED BUDGET 578.06 FY 2013 BAO Position Adjustments ASD - Assistant Director, Administrative Services 0.10 ASD - Dir Adm Svcs/Chief Financial Officer 0.05 AUD - Performance Auditor 0.50 CSD - Community Services Manager 6.00 CSD - Community Services Senior Program manager 2.00 CSD - Community Services Superintendent 2.00 CSD - Community Services Superintendent (2.00) CSD - Supt Parks (2.00) CSD - Supv Open Space, Supv Parks, Supv Rec Prog (6.00) HRD - Human Resources Asst Conf (1.00) HRD - Human Resources Representative 1.00 HRD - Mgr, Employee Relations 1.00 HRD - Sr. Administrator Human Resources (1.00) LIB - Sr. Librarian 0.50 PCE - Management Analyst 0.50 PCE - Senior Planner 1.00 POL - Animal Control Officer (0.50) POL - Animal Control Officer (0.50) POL - Animal Services Supervisor (1.00) POL - Senior Management Analyst 1.00 FY 2013 Total BAO Positions 1.65 FY 2013 ADJUSTED TOTAL 579.71 FY 2014 Additions CSD - Program Assistant II 0.25 CSD - Volunteer Coordinator 0.25 PCE - Administrative Assistant 1.00 PCE - Administrative Associate III 1.00 PCE - Bldg/Plg Technician 2.00 PCE - Mgr, Planning 1.00 POL - Animal Control Officer 0.50 POL - Police Officer - Intermediate 1.00 PWD - Project Manager 0.45 FY 2014 Total Additions 7.45 FY 2014 Elimination or Reduction CLK - Administrative Associate III (1.00) MGR/PCE - Deputy City Manager Special Projects (1.00) PCE - Asst Building Official (1.00) PCE - Building Inspector (1.00) PCE - Building Inspector (1.00) PCE - Plans Check Engineer (1.00) PCE - Plans Examiner (1.00) POL - Volunteer Coordinator (0.50) City of Palo Alto - 2 - Fiscal Year 2014 Proposed Budget Summary of Position Changes FY 2014 Total Elimination or Reduction (7.50) FY 2014 General Fund Net Increase/(Decrease) FY 2014 General Fund Net Change from Additions/Eliminations or Reduction (0.05) FY 2014 Reclassified, Add/Drop, and Title Changes CSD - Community Services Manager (1.00) CSD - Community Services Senior Program Manager 1.00 CSD - Division Manager, Recreation & Golf (1.00) CSD - Assistant Director Community Services 1.00 CSD - Program Assistant I (1.00) CSD - Program Assistant II 1.00 FIR - Administrative Assistant 1.00 FIR - Administrative Associate II (1.00) FIR - Public Safety Dispatcher - Lead (0.40) FIR - Business Analyst 0.40 HRD - Human Resources Representative (1.00) HRD - Manager, Employee Benefits 1.00 MGR - Asst to City Mgr (0.55) MGR - Chief Sustainability Officer 0.55 PCE - Bldg Inspector (2.00) PCE - Bldg Inspector Specialist 2.00 PCE - Bldg/Plg Technician (2.00) PCE - Development Project Coordinator II 2.00 PCE - Engr Tech II (1.00) PCE - Sr. Project Engineer 1.00 POL - Public Safety Dispatcher - Lead (0.60) POL - Business Analyst 0.60 PWD - Associate Engineer 0.10 PWD - Engineering Tech III (0.10) PWD - Inspector Field Services 0.78 PWD - Surveying Assistant (0.78) FY 2014 Total Reclassified Positions 0.00 FY 2014 Reallocated Positions ASD - Acct Spec - Lead (0.24) ASD - Acct Spec (0.20) ASD - Acct Specialist - Lead (0.17) ASD - Acct Specialist (0.25) ASD - Acct Specialist (0.60) ASD - Asst Dir Adm Svcs (0.25) ASD - Asst Dir Adm Svcs 0.10 ASD - Buyer 0.05 ASD - Contracts Administrator 0.30 ASD - Dir Adm Svcs / Chief Financial Officer 0.15 ASD - Sr. Financial Analyst (0.20) CSD - Heavy Equipment Operator 0.07 FIR - Fire Captain EMT 0.01 FIR - Fire Fighter EMT 0.01 FTE - 3 - City of Palo Alto Fiscal Year 2014 Proposed Budget Summary of Position Changes FIR - GIS Specialist (0.50) MGR - Chief Sustainability Officer (0.50) OES - Fire Captain EMT (0.01) OES - Fire Fighter EMT (0.01) OS - Chief Sustainability Officer 0.50 PCE - Associate Planner 1.00 PCE - Chief Transportation Officer (0.10) PCE - Management Analyst (0.10) POL - GIS Specialist 0.50 PWD - Administrative Associate I 0.10 PWD - Associate Engineer 0.10 PWD - Heavy Equipment Operator 0.23 PWD - Inspector Field Services (0.45) PWD - Project Engineer 0.10 PWD - Sr. Engineer 0.10 PWD - Administrative Associate II (0.20) PWD - Bldg Serviceperson - Lead (0.20) PWD - Electrician (0.20) PWD - Facilities Maintenance - Lead (0.15) PWD - Facilities Mech (0.45) PWD - Facilities Painter (0.25) PWD - Mgr, Maint Operations (0.15) FY 2014 Total Reallocated Positions (1.87) FY 2014 TOTAL PROPOSED GENERAL FUND POSITIONS 577.80 ENTERPRISE FUNDS FY 2013 ADOPTED BUDGET 357.82 FY 2013 BAO Position Adjustments PWD - Program Assistant I (1.00) PWD - Program Assistant II 1.00 UTL - Supervisor Water Transmission (1.00) UTL - Utilities Supervisor 6.00 UTL - WGW Supervisor (5.00) FY 2013 Total BAO Positions 0.00 FY 2013 ADJUSTED TOTAL 357.82 FY 2014 New Positions PWD - Project Manager 0.35 UTL - Utilities Credit/Collection Specialist 1.00 FY 2014 Total New Positions 1.35 FY 2014 Elimination or Reduction FY 2014 Total Eliminated Positions 0.00 FY 2014 Enterprise Fund Net Increase/(Decrease) FY 2014 Enterprise Fund Net Change from Additions/Eliminations or Reduction 1.35 FY 2014 Reclassified, Add/Drop, and Title Changes PWD - Associate Engineer (1.00) PWD - Asst to City Mgr (0.45) FTE City of Palo Alto - 4 - Fiscal Year 2014 Proposed Budget Summary of Position Changes PWD - Chief Sustainability Officer 0.45 PWD - Engineering Tech III (1.00) PWD - Industrial Waste Inspector 1.00 PWD - Inspector Field Services 0.11 PWD - Senior Industrial Waste Investigator 1.00 PWD - Surveying Assistant (0.11) PWD - Technologist 1.00 PWD - WQC Operator II (1.00) UTL - Administrative Associate I (1.00) UTL - Administrative Associate II (1.00) UTL - Coordinator, Utilities Projects 1.00 UTL - Customer Service Representative 1.00 UTL - Heavy Equiptment Operator 1.00 UTL - Inspector, Field Services (1.00) UTL - Manager, Utilities Credit and Collection 1.00 UTL - Program Assistant I (0.50) UTL - Coordinator, Utilities Projects 1.00 UTL - Senior Project Engineer 1.00 UTL - Senior Resource Planner (1.00) UTL - Supervising Project Engineer (1.00) UTL - Supervisor, Inspection Services 1.00 UTL - Water Meter Cross Connection Technician (1.00) FY 2014 Total Reclassified Positions 0.50 FY 2014 Reallocated Positions PWD - Administrative Associate I 0.10 PWD - Administrative Associate III 0.10 PWD - Associate Engineer (0.50) PWD - Associate Planner (1.00) PWD - Inspector, Field Services (0.11) PWD - Management Analyst 0.10 PWD - Project Engineer (0.15) PWD - Sr. Engineer (0.10) PWD - Heavy Equipment Operator (0.29) PWD - Heavy Equipment Operator - Lead (0.29) PWD - Mgr, Maint Operations (0.04) PWD - Street Maintenance Asst (2.00) PWD - Street Sweeper Operator (1.04) UTL - Associate Engineer 0.50 UTL - Asst Dir Adm Svcs 0.25 UTL - Contracts Administrator (0.30) UTL - Dir Adm Svcs / Chief Financial Offier (0.05) UTL - Heavy Equipment Operator (0.30) FY 2014 Total Reallocated Positions (5.12) FY 2014 TOTAL PROPOSED ENTERPRISE FUND POSITIONS 354.55 OTHER FUNDS FY 2013 ADOPTED BUDGET 78.47 FY 2013 BAO Position Adjustments FTE - 5 - City of Palo Alto Fiscal Year 2014 Proposed Budget Summary of Position Changes IT - Assistant Director, Administrative Services (0.10) IT - Dir Adm Svcs/Chief Financial Officer (0.05) PCE - Management Analyst (0.50) FY 2013 Total BAO Positions (0.65) FY 2013 ADJUSTED TOTAL 77.82 FY 2014 New Positions IT - Technologist 1.00 PWD - Project Engineer 1.00 PWD - Project Manager 0.20 FY 2014 Total New Positions 2.20 FY 2014 Elimination or Reduction FY 2014 Total Eliminated Positions 0.00 FY 2014 Reclassified Positions PWD - Associate Engineer 0.90 PWD - Associate Engineer 1.00 PWD - Engineering Tech III (0.90) PWD - Engineering Tech III (1.00) PWD - Inspector Field Services 0.11 PWD - Surveying Assistant (0.11) FY 2014 Total Reclassified Positions (0.00) FY 2014 Reallocated Positions ASD - Acct Spec - Lead 0.17 ASD - Acct Spec - Lead 0.24 ASD - Acct Spec 0.25 ASD - Acct Spec 0.60 ASD - Acct Spec 0.20 ASD - Sr. Financial Analyst 0.20 IT - Asst Dir Adm Svcs (0.10) IT - Dir Adm Svcs / Chief Financial Officer (0.10) PCE - Chief Transportation Officer 0.10 PWD - Administrative Associate I (0.20) PWD - Administrative Associate III (0.10) PWD - Associate Engineer (0.10) PWD - Buyer (0.05) PWD - Inspector, Field Services 0.56 PWD - Management Analyst 0.10 PWD - Management Analyst (0.10) PWD - Project Engineer (0.10) PWD - Project Engineer 0.15 PWD - Heavy Equipment Operator 0.29 PWD - Heavy Equipment Operator - Lead 0.29 PWD - Mgr, Maint Operations 0.04 PWD - Street Maintenance Asst 2.00 PWD - Street Sweeper Operator 1.04 PWD - Administrative Associate II 0.20 PWD - Bldg Serviceperson - Lead 0.20 FTE City of Palo Alto - 6 - Fiscal Year 2014 Proposed Budget Summary of Position Changes PWD - Electrician 0.20 PWD - Facilities Maintenance - Lead 0.15 PWD - Facilities Mech 0.45 PWD - Facilities Painter 0.25 PWD - Mgr, Maint Operations 0.15 FY 2014 Total Reallocated Positions 6.98 FY 2014 TOTAL PROPOSED OTHER FUNDS POSITIONS 87.00 FY 2014 TOTAL PROPOSED CITYWIDE POSITIONS 1019.35 FISCAL YEAR 2014 FROZEN POSITIONS LIB - 1.00 FTE Librarian LIB - 1.00 FTE Library Assistant FTE - 7 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE GENERAL FUND Administrative Services Accountant 2.00 2.00 2.00 2.00 2.00 0.00 Acct Spec 7.00 7.00 7.00 7.00 5.95 (1.05) Acct Spec-Lead 5.00 5.00 5.00 5.00 4.59 (0.41) Admin Assistant 0.93 0.93 1.00 1.00 1.00 0.00 Administrative Associate III 0.00 1.00 1.00 1.00 1.00 0.00 Asst Director Adm Svcs 0.60 1.50 1.70 1.80 1.65 (0.05) Buyer 1.95 1.95 1.95 1.95 2.00 0.05 Contracts Administrator 1.40 1.40 1.40 1.40 1.70 0.30 Deputy Dir Adm Svcs 0.80 0.00 0.00 0.00 0.00 0.00 Dir Adm Svcs/Chief Financial Officer 0.50 0.50 0.50 0.55 0.70 0.20 Director, Office of Management and Budget 1.00 1.00 1.00 1.00 1.00 0.00 Graphic Designer 1.00 0.00 0.00 0.00 0.00 0.00 Mgr Accounting 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Pur & Cntr Admin 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Real Property 1.00 1.00 1.00 1.00 1.00 0.00 Payroll Analyst 2.00 2.00 2.00 1.00 1.00 (1.00) Payroll Analyst - S 0.00 0.00 0.00 1.00 1.00 1.00 Principal Financial Analyst 0.00 1.00 1.00 1.00 1.00 0.00 Sr. Accountant 3.00 3.00 3.00 3.00 3.00 0.00 Sr. Financial Analyst 5.81 4.91 6.10 6.10 5.90 (0.20) Storekeeper-L 1.00 1.00 1.00 1.00 1.00 0.00 Warehouse Supv 0.50 0.50 0.50 0.50 0.50 0.00 Total Administrative Services 37.49 37.69 39.15 39.30 37.99 (1.16) City Attorney Asst City Atty 1.00 1.00 1.00 1.00 1.00 0.00 City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 Claims Investigator 0.60 1.00 1.00 1.00 1.00 0.00 Legal Administrator 1.00 1.00 1.00 1.00 1.00 0.00 Secretary To City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 Senior Legal Secretary - Confidential 2.00 1.00 1.00 1.00 1.00 0.00 Sr. Asst City Atty 2.00 2.00 2.00 2.00 2.00 0.00 Sr. Deputy City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 Total City Attorney 9.60 9.00 9.00 9.00 9.00 0.00 City Auditor Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Auditor 0.00 0.00 0.00 0.50 0.50 0.50 City Auditor 1.00 1.00 1.00 1.00 1.00 0.00 Sr. Performance Auditor 2.00 2.00 2.00 2.00 2.00 0.00 Total City Auditor 4.00 4.00 4.00 4.50 4.50 0.50 City of Palo Alto - 8 - Fiscal Year 2014 Proposed Budget Table of Organization City Clerk Administrative Associate III 3.00 3.00 3.00 3.00 2.00 (1.00) Asst City Clerk 1.00 1.00 1.00 1.00 1.00 0.00 City Clerk 1.00 1.00 1.00 1.00 1.00 0.00 Deputy City Clerk 1.00 1.00 1.00 1.00 1.00 0.00 Parking Examiner 0.75 0.75 0.75 0.75 0.75 0.00 Total City Clerk 6.75 6.75 6.75 6.75 5.75 (1.00) City Manager Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Administrative Associate I 1.50 0.50 0.00 0.00 0.00 0.00 Administrative Associate III 0.00 1.00 1.00 1.00 1.00 0.00 Asst City Manager/Chief Operating Officer 1.00 1.00 1.00 1.00 1.00 0.00 Asst To City Mgr 1.50 1.55 1.05 1.05 1.00 (0.05) Chief Communication Officer 0.00 0.00 1.00 1.00 1.00 0.00 Chief Sustainability Officer 0.00 0.00 0.00 0.00 0.05 0.05 City Manager 1.00 1.00 1.00 1.00 1.00 0.00 Communications Mgr 1.00 1.00 1.00 1.00 1.00 0.00 Deputy City Mgr Spec Proj 0.50 0.50 0.50 0.50 0.00 (0.50) Executive Assistant To The City Manager 1.00 1.00 1.00 1.00 1.00 0.00 Management Analyst 0.50 0.50 0.00 0.00 0.00 0.00 Mgr Economic Dev 0.00 1.00 1.00 1.00 1.00 0.00 Total City Manager 9.00 10.05 9.55 9.55 9.05 (0.50) Community Services Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Administrative Associate III 0.75 0.75 0.75 0.75 0.75 0.00 Arts & Culture Div Mgr 1.00 1.00 0.00 0.00 0.00 0.00 Assistant Director CSD 0.00 0.00 1.00 1.00 2.00 1.00 Bldg Serviceperson 2.00 2.00 2.00 2.00 2.00 0.00 Bldg Serviceperson-L 2.00 2.00 2.00 2.00 2.00 0.00 Community Services Senior Program Manager 1.00 1.00 1.00 3.00 4.00 3.00 Community Services Superintendent 1.00 1.00 0.00 2.00 2.00 2.00 Coord Rec Prog 4.50 4.00 4.00 4.00 4.00 0.00 Dir Comm Svcs 1.00 1.00 1.00 1.00 1.00 0.00 Division Manager, Recreations & Golf 1.00 1.00 1.00 1.00 0.00 (1.00) Heavy Equip Oper 0.00 0.00 0.00 0.00 0.07 0.07 Inspector, Field Svc 2.00 2.00 2.00 2.00 2.00 0.00 Junior Museum & Zoo Educator 2.25 2.25 2.25 2.25 2.25 0.00 Management Assistant 1.00 1.00 1.00 0.00 0.00 (1.00) Management Assistant - S 0.00 0.00 0.00 1.00 1.00 1.00 Mgr Arts 2.00 2.00 2.00 0.00 0.00 (2.00) Open Spc & Parks Div Mgr 1.00 1.00 1.00 1.00 1.00 0.00 Park Maint - Lead 1.00 1.00 1.00 1.00 1.00 0.00 Park Maint Person 6.00 6.00 6.00 6.00 6.00 0.00 Park Ranger 5.00 5.00 5.00 5.00 5.00 0.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 9 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization Parks/Golf Crew-Lead 2.00 2.00 2.00 2.00 2.00 0.00 Prod Arts/Sci Prog 12.00 12.00 11.75 11.75 11.75 0.00 Program Assistant I 7.50 7.50 7.50 7.50 6.75 (0.75) Program Assistant II 3.00 3.00 3.00 3.00 4.00 1.00 Senior Management Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Sprinkler Sys Repr 4.00 4.00 4.00 4.00 4.00 0.00 Supt Parks 1.00 1.00 2.00 0.00 0.00 (2.00) Supv Open Space 2.00 2.00 2.00 0.00 0.00 (2.00) Supv Parks 1.00 1.00 1.00 6.00 5.00 4.00 Supv Rec Prog 4.00 4.00 4.00 1.00 1.00 (3.00) Theater Specialist 1.00 1.00 1.00 1.00 1.00 0.00 Volunteer Coord 0.50 0.50 0.50 0.50 0.75 0.25 Total Community Services 74.50 74.00 73.75 73.75 74.32 0.57 Library Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Assistant Director, Library Services 1.00 1.00 1.00 1.00 1.00 0.00 Business Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Coord Library Prog 1.00 1.00 1.00 1.00 1.00 0.00 Dir Libraries 1.00 1.00 1.00 1.00 1.00 0.00 Division Head, Library Services 1.00 1.00 1.00 1.00 1.00 0.00 Librarian 5.00 5.00 5.00 5.00 5.00 0.00 Library Associate 4.00 4.00 5.00 5.00 5.00 0.00 Library Asst 5.50 5.50 5.50 5.50 5.50 0.00 Library Services manager 4.00 4.00 4.00 4.00 4.00 0.00 Library Specialist 8.00 8.00 7.00 7.00 7.00 0.00 Management Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Sr Librarian 7.75 7.75 7.75 8.25 8.25 0.50 Total Library 41.25 41.25 41.25 41.75 41.75 0.50 Office of Sustainability Asst To City Mgr 0.00 0.00 0.50 0.50 0.00 (0.50) Chief Sustainability Officer 0.00 0.00 0.00 0.00 0.50 0.50 Total Office of Sustainability 0.00 0.00 0.50 0.50 0.50 0.00 People Strategy and Operations Adm Human Res 5.00 5.00 5.00 4.00 4.00 (1.00) Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Assistant Director Human Resources 1.00 1.00 1.00 1.00 1.00 0.00 Dir Human Resources 1.00 1.00 1.00 1.00 1.00 0.00 Human Resources Rep 2.00 2.00 2.00 3.00 2.00 0.00 Human Rsrce Asst Cnf 5.00 5.00 5.00 4.00 4.00 (1.00) Mgr Emp Benefits 0.00 0.00 0.00 0.00 1.00 1.00 Mgr Employee Relations 0.00 0.00 0.00 1.00 1.00 1.00 Senior Management Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Total People Strategy and Operations 16.00 16.00 16.00 16.00 16.00 0.00 Planning and Community Environment Adm Pln & Comm Envrn 1.00 1.00 1.00 1.00 1.00 0.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE City of Palo Alto - 10 - Fiscal Year 2014 Proposed Budget Table of Organization Admin Assistant 1.00 1.00 1.00 1.00 2.00 1.00 Administrative Associate I 1.00 1.50 1.00 1.00 1.00 0.00 Administrative Associate II 3.80 3.80 3.80 3.80 3.80 0.00 Administrative Associate III 1.00 1.00 1.00 1.00 2.00 1.00 Assistant Director Planning & Comm Env 0.00 1.00 1.00 1.00 1.00 0.00 Assoc Engineer 1.00 1.00 1.00 1.00 1.00 0.00 Assoc Planner 0.00 0.00 0.00 0.00 1.00 1.00 Asst Build Official 1.00 1.00 1.00 1.00 0.00 (1.00) Asst To City Mgr 0.05 0.00 0.00 0.00 0.00 0.00 Bldg Inspector 4.00 4.00 4.00 4.00 0.00 (4.00) Bldg Inspector Spec 1.00 1.00 1.00 1.00 3.00 2.00 Bldg/Plg Technician 2.00 2.00 2.00 2.00 2.00 0.00 Chief Bld Official 1.00 1.00 1.00 1.00 1.00 0.00 Chief Plg Official 1.00 0.00 1.00 1.00 1.00 0.00 Chief Transp Off 1.00 1.00 1.00 1.00 0.90 (0.10) Code Enforcement Off 2.00 2.00 2.00 2.00 2.00 0.00 Coor Trans Sys Mgmt 0.50 0.50 0.50 0.00 0.00 (0.50) Coor Trans Sys Mgmt - S 0.00 0.00 0.00 0.50 0.50 0.50 Deputy City Mgr Spec Proj 0.50 0.50 0.50 0.50 0.00 (0.50) Development Center Manager 0.00 0.00 1.00 1.00 1.00 0.00 Development Project Coordinator II 0.00 0.00 0.00 0.00 2.00 2.00 Development Project Coordinator III 0.00 0.00 3.00 3.00 3.00 0.00 Development Services Director 0.00 0.00 1.00 1.00 1.00 0.00 Dir Plan/Comm Envir 1.00 1.00 1.00 1.00 1.00 0.00 Engineer 1.00 1.00 1.00 1.00 1.00 0.00 Engr Tech II 1.00 1.00 1.00 1.00 0.00 (1.00) Management Analyst 0.00 0.00 0.00 0.50 0.40 0.40 Mgr Economic Dev 1.00 0.00 0.00 0.00 0.00 0.00 Mgr Planning 2.00 2.00 1.00 1.00 2.00 1.00 Planner 5.75 5.75 3.75 3.75 3.75 0.00 Planning Arborist 1.00 0.00 0.00 0.00 0.00 0.00 Plans Check Engr 2.00 2.00 2.00 2.00 1.00 (1.00) Plans Examiner 0.00 0.00 1.00 1.00 0.00 (1.00) Project Engineer 1.00 1.00 1.00 1.00 1.00 0.00 Sr Planner 5.00 5.00 6.00 7.00 7.00 1.00 Sr. Project Engineer 0.00 0.00 0.00 0.00 1.00 1.00 Supv Bldg Inspection 1.00 1.00 1.00 1.00 1.00 0.00 Total Planning and Community Environment 44.60 43.05 47.55 49.05 49.35 1.80 Public Safety 40-Hr Training Captain 1.00 1.00 1.00 1.00 1.00 0.00 Admin Assistant 1.00 1.00 1.00 1.00 2.00 1.00 Administrative Associate II 7.00 7.00 7.00 7.00 6.00 (1.00) Animal Control Off 4.50 4.50 4.50 3.50 4.00 (0.50) Animal Services Spec 1.00 0.00 0.00 0.00 0.00 0.00 Animal Services Spec II 1.00 2.00 2.00 2.00 2.00 0.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 11 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization Assistant Police Chief - Adv 1.00 1.00 1.00 1.00 1.00 0.00 Battalion Chief 56-Hour Workweek 3.00 3.00 3.00 3.00 3.00 0.00 Business Analyst 1.00 1.00 1.00 1.00 2.00 1.00 Code Enforcement Off 1.00 1.00 1.00 1.00 1.00 0.00 Comm Tech 1.00 1.00 1.00 1.00 1.00 0.00 Community Serv Offcr 8.50 8.50 8.50 8.50 8.50 0.00 Court Liaison Officer 1.00 1.00 1.00 1.00 1.00 0.00 Crime Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Deputy Chief/Fire Marshall 0.84 0.84 0.84 0.84 0.84 0.00 Deputy Director Technical Services 1.00 1.00 1.00 1.00 1.00 0.00 Deputy Fire Chief 2.00 2.00 2.00 2.00 2.00 0.00 Emergency Services Director 0.00 1.00 1.00 1.00 1.00 0.00 EMS Data Specialist 0.00 0.00 1.00 1.00 1.00 0.00 EMS Manager 1.00 1.00 1.00 1.00 1.00 0.00 Fire Apparatus Op 30.00 30.00 30.00 30.00 30.00 0.00 Fire Captain 27.00 27.00 22.00 22.00 22.00 0.00 Fire Chief 1.00 1.00 1.00 1.00 1.00 0.00 Fire Fighter 45.00 45.00 41.00 41.00 41.00 0.00 Fire Inspector 3.00 3.00 4.00 4.00 4.00 0.00 GIS Specialist 0.00 0.00 1.00 1.00 1.00 0.00 Haz Mat Inspector 1.90 1.90 1.90 1.90 1.90 0.00 OES Coordinator 1.00 1.00 1.00 1.00 1.00 0.00 Police Agent 19.00 19.00 19.00 19.00 19.00 0.00 Police Captain-Adv 2.00 2.00 2.00 2.00 2.00 0.00 Police Chief-Adv 1.00 1.00 1.00 1.00 1.00 0.00 Police Lieut-Adv 5.00 5.00 5.00 5.00 5.00 0.00 Police Officer 49.00 49.00 49.00 49.00 50.00 1.00 Police Records Specialist - Lead 1.00 1.00 1.00 1.00 1.00 0.00 Police Records Specialist II 6.00 6.00 6.00 6.00 6.00 0.00 Police Sergeant 14.00 14.00 14.00 14.00 14.00 0.00 Program Assistant 0.00 0.00 1.00 1.00 1.00 0.00 Program Assistant II 1.00 1.00 1.00 1.00 1.00 0.00 Property Evid Tech 2.00 2.00 2.00 2.00 2.00 0.00 Public Safety Disp 2.00 2.00 2.00 2.00 2.00 0.00 Public Safety Dispatcher - Lead 5.00 5.00 5.00 5.00 4.00 (1.00) Public Safety Dispatcher II 14.00 14.00 14.00 14.00 14.00 0.00 Senior Management Analyst 1.00 1.00 1.00 2.00 2.00 1.00 Supt Animal Services 1.00 1.00 1.00 1.00 1.00 0.00 Supv Animal Svcs 1.00 1.00 1.00 0.00 0.00 (1.00) Supv Police Service 3.00 3.00 3.00 3.00 3.00 0.00 Veterinarian 1.00 1.00 1.00 1.00 1.00 0.00 Veterinarian Tech 2.00 2.00 2.00 2.00 2.00 0.00 Volunteer Coord 0.50 0.50 0.50 0.50 0.00 (0.50) Total Public Safety 277.24 278.24 273.24 272.24 273.24 0.00 Public Works Accountant 0.02 0.02 0.00 0.00 0.00 0.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE City of Palo Alto - 12 - Fiscal Year 2014 Proposed Budget Table of Organization Acct Spec 0.04 0.04 0.00 0.00 0.00 0.00 Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Administrative Associate I 1.70 0.70 0.50 0.50 0.60 0.10 Administrative Associate II 1.80 1.80 2.85 2.85 2.65 (0.20) Assoc Engineer 0.10 0.10 0.10 0.10 0.30 0.20 Asst Dir Public Wrks 1.10 1.10 1.30 1.30 1.30 0.00 Bldg Serviceperson 1.00 1.00 1.00 1.00 1.00 0.00 Bldg Serviceperson-L 2.00 2.00 2.00 2.00 1.80 (0.20) Dir Pw/City Engr 1.00 1.00 1.00 1.00 1.00 0.00 Electrician 1.00 1.00 1.00 1.00 0.80 (0.20) Engineer 0.30 0.30 0.30 0.30 0.30 0.00 Engr Tech III 3.30 3.30 3.30 3.30 3.20 (0.10) Equip Operator 3.46 3.46 3.46 3.46 3.46 0.00 Facilities Carpenter 1.00 1.00 1.00 1.00 1.00 0.00 Facilities Maint-L 2.00 2.00 2.00 2.00 1.85 (0.15) Facilities Mech 6.00 6.00 6.00 6.00 5.55 (0.45) Facilities Painter 2.00 2.00 2.00 2.00 1.75 (0.25) Heavy Equip Oper 1.90 1.90 1.90 1.90 2.13 0.23 Heavy Equip Oper-L 0.85 0.85 0.85 0.85 0.85 0.00 Inspector, Field Svc 1.00 1.00 1.00 1.00 1.33 0.33 Management Analyst 0.00 0.55 0.60 0.60 0.60 0.00 Managing Arborist 1.00 0.00 0.00 0.00 0.00 0.00 Mgr Fac Maint & Proj 0.80 0.00 0.00 0.00 0.00 0.00 Mgr Maint Oper 0.12 1.72 2.10 2.10 1.95 (0.15) Planning Arborist 0.00 1.00 1.00 1.00 1.00 0.00 Project Engineer 0.20 0.20 0.20 0.20 0.30 0.10 Project Mgr 1.75 0.75 1.25 1.25 1.70 0.45 Senior Management Analyst 0.90 0.90 0.95 0.95 0.95 0.00 Sr. Accountant 0.02 0.02 0.00 0.00 0.00 0.00 Sr. Engineer 0.20 0.20 1.10 1.10 1.20 0.10 Sr. Financial Analyst 0.16 0.16 0.16 0.16 0.16 0.00 Sr. Project Manager 1.00 1.00 0.10 0.10 0.10 0.00 Supt PW Opns 0.60 0.00 0.00 0.00 0.00 0.00 Supv Facil Mgt 1.95 0.00 0.00 0.00 0.00 0.00 Supv Insp/Surv Pw 0.80 0.80 0.80 0.80 0.80 0.00 Surveying Asst 0.78 0.78 0.78 0.78 0.00 (0.78) Surveyor, Public Wks 0.78 0.78 0.78 0.78 0.78 0.00 Traf Cont Maint I 1.94 1.94 1.94 1.94 1.94 0.00 Traf Cont Maint II 2.00 2.00 2.00 2.00 2.00 0.00 Traf Cont Maint-L 1.00 1.00 1.00 1.00 1.00 0.00 Tree Maint Person 2.00 2.00 1.00 1.00 1.00 0.00 Tree Trim/Ln Clr 7.00 7.00 7.00 7.00 7.00 0.00 Tree Trim/Ln Clr-L 1.00 1.00 1.00 1.00 1.00 0.00 Urban Forester 0.00 1.00 1.00 1.00 1.00 0.00 Total Public Works 58.57 56.37 57.32 57.32 56.35 (0.97) Total GENERAL FUND 579.00 576.40 578.06 579.71 577.80 (0.26) FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 13 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization ENTERPRISE FUNDS Public Works - Enterprise Funds Accountant 0.23 0.23 0.40 0.40 0.40 0.00 Acct Spec 0.46 0.46 0.45 0.45 0.45 0.00 Administrative Associate I 0.00 0.00 0.00 0.00 0.10 0.10 Administrative Associate II 3.20 3.20 2.15 2.15 2.15 0.00 Administrative Associate III 0.00 0.00 0.00 0.00 0.10 0.10 Administrator, Refuse 1.00 1.00 1.00 1.00 1.00 0.00 Airport Manager 0.00 0.00 1.00 1.00 1.00 0.00 Assistant Director, Environmental Services 0.00 1.00 1.00 1.00 1.00 0.00 Assoc Engineer 3.30 3.30 3.00 3.00 1.50 (1.50) Assoc Planner 1.00 1.00 1.00 1.00 0.00 (1.00) Asst Dir Public Wrks 0.75 0.75 0.30 0.30 0.30 0.00 Asst Mgr WQCP 1.00 2.00 2.00 2.00 2.00 0.00 Asst To City Mgr 0.10 0.10 0.10 0.10 0.00 (0.10) Business Analyst 1.13 0.13 0.00 0.13 0.13 0.13 Buyer 1.00 1.00 1.00 1.00 1.00 0.00 Chemist 3.00 3.00 3.00 3.00 3.00 0.00 Chief Sustainability Officer 0.00 0.00 0.00 0.00 0.10 0.10 Coord Pub Wks Proj 0.00 1.00 1.00 1.00 1.00 0.00 Coord Zero Waste 2.00 2.00 2.00 2.00 2.00 0.00 Deputy Chief/Fire Marshall 0.08 0.08 0.08 0.08 0.08 0.00 Electrician 3.00 3.00 3.00 3.00 3.00 0.00 Electrician-Lead 2.00 2.00 2.00 2.00 2.00 0.00 Engineer 1.00 1.00 1.00 1.00 1.00 0.00 Engr Tech III 1.40 1.40 1.30 1.30 0.30 (1.00) Environmental Spec 2.00 2.00 2.00 2.00 2.00 0.00 Equip Operator 0.54 0.54 0.54 0.54 0.54 0.00 Executive Assistant 2.00 0.00 0.00 0.00 0.00 0.00 Haz Mat Inspector 0.04 0.04 0.04 0.04 0.04 0.00 Heavy Equip Oper 5.90 5.90 1.90 1.90 1.61 (0.29) Heavy Equip Oper-L 3.15 3.15 2.15 2.15 1.86 (0.29) Ind Waste Inspec 2.00 2.00 2.00 2.00 3.00 1.00 Ind Waste Invtgtr 2.00 2.00 2.00 2.00 2.00 0.00 Laboratory Tech WQC 2.50 2.50 2.50 2.50 2.50 0.00 Landfill Technician 1.00 0.00 1.00 1.00 1.00 0.00 Maint Mech 7.00 7.00 7.00 7.00 7.00 0.00 Management Analyst 0.00 1.20 1.20 1.20 1.30 0.10 Mgr Env Control Prog 3.00 3.00 3.00 3.00 3.00 0.00 Mgr Envrn Compliance 1.00 0.00 0.00 1.00 1.00 1.00 Mgr Lab Services 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Maint Oper 1.38 1.38 1.00 1.00 0.96 (0.04) Mgr Solid Waste 1.00 1.00 1.00 1.00 1.00 0.00 Mgr WQC Plant 1.00 1.00 1.00 1.00 1.00 0.00 Program Assistant I 2.00 2.00 2.00 1.00 1.00 (1.00) FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE City of Palo Alto - 14 - Fiscal Year 2014 Proposed Budget Table of Organization Program Assistant II 1.00 1.00 1.00 2.00 2.00 1.00 Project Engineer 2.00 2.00 2.00 2.00 1.85 (0.15) Project Mgr 0.00 0.00 0.00 0.00 0.35 0.35 Refuse Disp Atten 4.00 4.00 0.00 0.00 0.00 0.00 Senior Management Analyst 0.10 0.10 0.05 0.05 0.05 0.00 Sr Chemist 1.00 1.00 1.00 1.00 1.00 0.00 Sr Ind Waster Inspect 0.00 0.00 0.00 0.00 1.00 1.00 Sr Mech 1.00 1.00 1.00 1.00 1.00 0.00 Sr Operator WQC 6.00 6.00 6.00 6.00 6.00 0.00 Sr. Accountant 0.23 0.23 0.30 0.30 0.30 0.00 Sr. Business Analyst 0.00 0.00 0.13 0.00 0.00 (0.13) Sr. Engineer 2.75 2.25 1.90 1.90 1.80 (0.10) Sr. Financial Analyst 0.16 0.16 0.16 0.16 0.16 0.00 Sr. Technologist 0.13 1.13 1.13 1.13 1.13 0.00 St Maint Asst 2.00 2.00 2.00 2.00 0.00 (2.00) St Sweeper Op 7.00 7.00 7.00 7.00 5.96 (1.04) Storekeeper 1.00 1.00 1.00 1.00 1.00 0.00 Supt PW Opns 0.20 0.00 0.00 0.00 0.00 0.00 Supv Public Works 1.00 1.00 0.00 0.00 0.00 0.00 Supv WQC Oper 5.00 3.00 3.00 3.00 3.00 0.00 Surveying Asst 0.11 0.11 0.11 0.11 0.00 (0.11) Surveyor, Public Wks 0.11 0.11 0.11 0.11 0.11 0.00 Technologist 0.00 0.00 0.00 0.00 1.00 1.00 Traf Cont Maint I 0.06 0.06 0.06 0.06 0.06 0.00 Watershed Protection Manager 0.00 1.00 1.00 0.00 0.00 (1.00) WQC Plt Oper II 16.00 17.00 17.00 17.00 16.00 (1.00) Total Public Works - Enterprise Funds 115.01 114.51 104.06 104.06 99.19 (4.87) Utilities Accountant 0.75 0.75 0.60 0.60 0.60 0.00 Acct Spec 2.50 2.50 2.55 2.55 2.55 0.00 Admin Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Administrative Associate I 2.00 2.00 2.00 2.00 1.00 (1.00) Administrative Associate II 7.00 7.00 7.00 7.00 6.00 (1.00) Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 1.00 0.00 Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 1.00 0.00 Assistant Director Utl Cust Support Svs 1.00 1.00 1.00 1.00 1.00 0.00 Assoc Engineer 0.00 0.00 0.00 0.00 0.50 0.50 Asst Dir Ut/Res Mgmt 1.00 1.00 1.00 1.00 1.00 0.00 Asst Director Adm Svcs 0.00 0.10 0.00 0.00 0.25 0.25 Asst To City Mgr 0.35 0.35 0.35 0.35 0.00 (0.35) Business Analyst 2.87 4.87 5.87 5.87 5.87 0.00 Cathodic Protection Technician Assistant 1.00 1.00 1.00 1.00 1.00 0.00 Cathodic Tech 1.00 1.00 1.00 1.00 1.00 0.00 Cement Finisher 1.00 1.00 1.00 1.00 1.00 0.00 Chief Sustainability Officer 0.00 0.00 0.00 0.00 0.35 0.35 Communications Mgr 1.00 1.00 1.00 0.00 0.00 (1.00) FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 15 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization Contracts Administrator 1.00 1.00 1.00 1.00 0.70 (0.30) Coord Util Saf & Sec 1.00 1.00 1.00 1.00 1.00 0.00 Coord Utility Proj 5.00 4.00 4.00 4.00 6.00 2.00 Cust Srv Specialist-L 2.00 2.00 2.00 2.00 2.00 0.00 Cust Svc Represent 5.00 5.00 5.00 5.00 6.00 1.00 Cust Svc Spec 2.00 2.00 2.00 2.00 2.00 0.00 Deputy Chief/Fire Marshall 0.08 0.08 0.08 0.08 0.08 0.00 Deputy Dir Adm Svcs 0.20 0.00 0.00 0.00 0.00 0.00 Dir Adm Svcs/Chief Financial Officer 0.15 0.15 0.25 0.25 0.20 (0.05) Dir Utilities 1.00 1.00 1.00 1.00 1.00 0.00 Elec Asst I 5.00 5.00 4.00 4.00 4.00 0.00 Elec Undgd Inspec 2.00 2.00 2.00 2.00 2.00 0.00 Electric Project Engineer 2.00 2.00 2.00 2.00 2.00 0.00 Electric Underground Inspector - Lead 1.00 1.00 1.00 1.00 1.00 0.00 Electrician 14.00 14.00 14.00 14.00 14.00 0.00 Electrician-Lead 6.00 6.00 6.00 6.00 6.00 0.00 Engineer 4.00 4.00 4.00 4.00 4.00 0.00 Engr Mgr - Electric 1.00 1.00 1.00 1.00 1.00 0.00 Engr Mgr - WGW 1.00 1.00 1.00 1.00 1.00 0.00 Engr Tech III 3.00 3.00 3.00 3.00 3.00 0.00 Equip Operator 1.00 1.00 1.00 1.00 1.00 0.00 Gas System Tech 2.00 2.00 2.00 2.00 2.00 0.00 Gas System Technician II 1.00 1.00 1.00 1.00 1.00 0.00 Haz Mat Inspector 0.06 0.06 0.06 0.06 0.06 0.00 Heavy Equip Oper 9.00 9.00 8.00 8.00 8.70 0.70 Inspector, Field Svc 4.00 4.00 5.00 5.00 4.00 (1.00) Lineper/Cable Spl 11.00 11.00 11.00 11.00 11.00 0.00 Lineper/Cable Spl-L 4.00 4.00 4.00 4.00 4.00 0.00 Maint Mech 1.00 0.00 0.00 0.00 0.00 0.00 Maintenance Mechanic-Welding 1.00 2.00 2.00 2.00 2.00 0.00 Manager Energy Risk 1.00 0.00 0.00 0.00 0.00 0.00 Marketing Eng 1.00 1.00 1.00 1.00 1.00 0.00 Meter Reader 6.00 6.00 6.00 6.00 6.00 0.00 Meter Reader-Lead 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Communications 0.00 0.00 0.00 1.00 1.00 1.00 Mgr Cust Svc & Meter Reading 1.00 1.00 1.00 1.00 2.00 1.00 Mgr Electric Oprns 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Util Mkt Svcs 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Util Oprns WGW 1.00 1.00 1.00 1.00 1.00 0.00 Mgr Util Telecomm 1.00 1.00 1.00 1.00 1.00 0.00 Offset Equip Op 0.48 0.48 0.48 0.48 0.48 0.00 OH UG Troubleman 0.00 0.00 2.00 2.00 2.00 0.00 Planner 0.30 0.30 0.30 0.30 0.30 0.00 Power Engr 3.00 3.00 3.00 3.00 3.00 0.00 Program Assistant I 3.00 3.00 3.00 3.00 2.50 (0.50) Project Engineer 5.00 5.00 5.00 5.00 5.00 0.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE City of Palo Alto - 16 - Fiscal Year 2014 Proposed Budget Table of Organization Project Mgr 0.75 0.75 0.75 0.75 0.75 0.00 Resource Planner 5.00 5.00 5.00 5.00 5.00 0.00 Restoration Lead 1.00 1.00 1.00 1.00 1.00 0.00 Senior Management Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Sr Mech 1.00 1.00 1.00 1.00 1.00 0.00 Sr Mkt Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Sr Util Field Svc Rep 1.00 1.00 1.00 1.00 1.00 0.00 Sr Water Sys Oper 2.00 2.00 2.00 2.00 2.00 0.00 Sr. Accountant 0.75 0.75 0.70 0.70 0.70 0.00 Sr. Business Analyst 2.00 2.00 2.00 2.00 2.00 0.00 Sr. Deputy City Attorney 1.00 1.00 1.00 1.00 1.00 0.00 Sr. Electric Project Engineer 4.00 4.00 4.00 4.00 4.00 0.00 Sr. Financial Analyst 1.10 1.60 1.40 1.40 1.40 0.00 Sr. Performance Auditor 1.00 1.00 1.00 1.00 1.00 0.00 Sr. Project Engineer 4.00 4.00 4.00 4.00 5.00 1.00 Sr. Resource Planner 7.00 7.00 7.00 7.00 6.00 (1.00) Sr. Technologist 0.87 0.87 0.87 0.87 0.87 0.00 Storekeeper 2.00 2.00 2.00 2.00 2.00 0.00 Supervising Electric Project Engineer 1.00 1.00 1.00 1.00 1.00 0.00 Supervising Project Engineer 1.00 1.00 1.00 1.00 0.00 (1.00) Supervisor, Inspection Services/Utilities 0.00 0.00 0.00 0.00 1.00 1.00 Supv Water Trans 1.00 1.00 1.00 0.00 0.00 (1.00) Supv WGW 5.00 5.00 5.00 0.00 0.00 (5.00) Tree Maint Person 1.00 1.00 1.00 1.00 1.00 0.00 Util Acct Rep 3.00 4.00 4.00 4.00 4.00 0.00 Util Comp Tech 2.00 2.00 2.00 2.00 2.00 0.00 Util Comp Tech-L 1.00 1.00 1.00 1.00 1.00 0.00 Util Credit/Col Spec 1.00 1.00 1.00 1.00 2.00 1.00 Util Engr Estimator 5.00 4.00 5.00 5.00 5.00 0.00 Util Fld Svcs Rep 5.00 5.00 5.00 5.00 5.00 0.00 Util Install/Rep 12.00 12.00 12.00 12.00 12.00 0.00 Util Install/Rep Ast 1.00 1.00 1.00 1.00 1.00 0.00 Util Install/Rep-L 5.00 5.00 5.00 5.00 5.00 0.00 Util Key Acct Rep 3.00 3.00 3.00 3.00 3.00 0.00 Util Locator 3.00 3.00 3.00 3.00 3.00 0.00 Util Syst Oper 5.00 5.00 5.00 5.00 5.00 0.00 Utilities Compliance Manager 1.00 1.00 1.00 1.00 1.00 0.00 Utilities Supervisor 5.00 5.00 5.00 11.00 11.00 6.00 Utl Install Repair Lead-Welding Cert 2.00 2.00 2.00 2.00 2.00 0.00 Utl Install Repair-Welding Cert 3.00 3.00 3.00 3.00 3.00 0.00 Warehouse Supv 0.50 0.50 0.50 0.50 0.50 0.00 Water Sys Oper II 4.00 4.00 4.00 4.00 4.00 0.00 Wtr Mtr Crs Cn Tec 3.00 3.00 3.00 3.00 2.00 (1.00) Total Utilities 250.71 251.11 253.76 253.76 255.36 1.60 Total ENTERPRISE FUNDS 365.72 365.62 357.82 357.82 354.55 (3.27) FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 17 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization OTHER FUNDS Capital Administrative Associate I 0.80 0.80 1.00 1.00 0.80 (0.20) Administrative Associate III 1.00 1.00 1.00 1.00 0.90 (0.10) Assoc Engineer 0.60 0.60 0.90 0.90 2.70 1.80 Asst Dir Public Wrks 0.15 0.15 0.15 0.15 0.15 0.00 Cement Finisher 3.00 3.00 3.00 3.00 3.00 0.00 Cement Finisher Lead 1.00 1.00 1.00 1.00 1.00 0.00 Contracts Administrator 0.60 0.60 0.60 0.60 0.60 0.00 Engineer 2.70 2.70 2.70 2.70 2.70 0.00 Engr Tech III 2.30 2.30 2.40 2.40 0.50 (1.90) Heavy Equip Oper 0.20 0.20 0.20 0.20 0.20 0.00 Inspector, Field Svc 0.00 0.00 0.00 0.00 0.67 0.67 Landscape Architect/Pk Planner 1.00 1.00 1.00 1.00 1.00 0.00 Management Analyst 1.00 1.25 1.50 1.50 1.50 0.00 Mgr Fac Maint & Proj 0.20 0.00 0.00 0.00 0.00 0.00 Mgr Maint Oper 0.50 0.90 0.90 0.90 0.90 0.00 Program Assistant I 1.00 1.00 1.00 1.00 1.00 0.00 Project Engineer 3.80 3.80 3.80 3.80 4.85 1.05 Project Mgr 0.50 0.50 1.00 1.00 1.20 0.20 Sr. Engineer 2.05 2.55 2.00 2.00 2.00 0.00 Sr. Financial Analyst 0.60 0.60 0.60 0.60 0.60 0.00 Sr. Project Manager 0.00 0.00 0.90 0.90 0.90 0.00 Supt PW Opns 0.20 0.00 0.00 0.00 0.00 0.00 Supv Facil Mgt 0.05 0.00 0.00 0.00 0.00 0.00 Supv Insp/Surv Pw 0.20 0.20 0.20 0.20 0.20 0.00 Surveying Asst 0.11 0.11 0.11 0.11 0.00 (0.11) Surveyor, Public Wks 0.11 0.11 0.11 0.11 0.11 0.00 Total Capital 23.67 24.37 26.07 26.07 27.48 1.41 Information Technology Admin Assistant 0.07 1.07 1.00 1.00 1.00 0.00 Administrative Associate II 1.00 0.00 0.00 0.00 0.00 0.00 Asst Director Adm Svcs 0.40 0.40 0.30 0.20 0.10 (0.20) Business Analyst 1.00 1.00 1.00 1.00 1.00 0.00 Chief Information Officer 1.00 1.00 1.00 1.00 1.00 0.00 Desktop Technician 5.00 5.00 5.00 5.00 5.00 0.00 Dir Adm Svcs/Chief Financial Officer 0.35 0.35 0.25 0.20 0.10 (0.15) Information Technology Security Manager 0.00 0.00 1.00 1.00 1.00 0.00 Management Analyst 0.50 0.50 1.00 1.00 1.00 0.00 Mgr IT 3.00 3.00 4.00 4.00 4.00 0.00 Sr. Business Analyst 2.00 2.00 2.00 2.00 2.00 0.00 Sr. Financial Analyst 0.09 0.09 0.00 0.00 0.00 0.00 Sr. Technologist 13.00 13.00 12.00 12.00 12.00 0.00 Technologist 3.00 3.00 3.00 3.00 4.00 1.00 Total Information Technology 30.41 30.41 31.55 31.40 32.20 0.65 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE City of Palo Alto - 18 - Fiscal Year 2014 Proposed Budget Table of Organization Authorization is given to create no more than 20.0 FTE temporary overstrength positions. Overstrength positions are justified by business needs and provide a vacancy to allow for cross training of a critical classification. These interim positions facilitate organizational transitions and succession planning in the cases of long-term disability, Printing and Mailing Fund Buyer 0.05 0.05 0.05 0.05 0.00 (0.05) Offset Equip Op 1.52 1.52 1.52 1.52 1.52 0.00 Sr. Financial Analyst 0.00 0.00 0.10 0.10 0.10 0.00 Total Printing and Mailing Fund 1.57 1.57 1.67 1.67 1.62 (0.05) Special Revenue Acct Spec 0.50 0.50 0.50 0.50 1.55 1.05 Acct Spec-Lead 0.00 0.00 0.00 0.00 0.41 0.41 Administrative Associate II 0.20 0.20 0.20 0.20 0.40 0.20 Bldg Serviceperson-L 0.00 0.00 0.00 0.00 0.20 0.20 Chief Transp Off 0.00 0.00 0.00 0.00 0.10 0.10 Community Serv Offcr 0.50 0.50 0.50 0.50 0.50 0.00 Electrician 0.00 0.00 0.00 0.00 0.20 0.20 Facilities Maint-L 0.00 0.00 0.00 0.00 0.15 0.15 Facilities Mech 0.00 0.00 0.00 0.00 0.45 0.45 Facilities Painter 0.00 0.00 0.00 0.00 0.25 0.25 Heavy Equip Oper 0.00 0.00 0.00 0.00 0.29 0.29 Heavy Equip Oper-L 0.00 0.00 0.00 0.00 0.29 0.29 Management Analyst 0.00 0.00 0.50 0.00 0.00 (0.50) Mgr Maint Oper 0.00 0.00 0.00 0.00 0.19 0.19 Planner 0.95 0.95 0.95 0.95 0.95 0.00 Sr. Financial Analyst 0.00 0.00 0.00 0.00 0.20 0.20 St Maint Asst 0.00 0.00 0.00 0.00 2.00 2.00 St Sweeper Op 0.00 0.00 0.00 0.00 1.04 1.04 Total Special Revenue 2.15 2.15 2.65 2.15 9.17 6.52 Vehicle Replacement Fund Administrative Associate III 1.00 1.00 1.00 1.00 1.00 0.00 Asst Dir Public Wrks 0.00 0.00 0.25 0.25 0.25 0.00 Asst Fleet Mgr 1.00 1.00 1.00 1.00 1.00 0.00 Equip Maint Serv Per 2.00 2.00 2.00 2.00 2.00 0.00 Fleet Manager 1.00 1.00 1.00 1.00 1.00 0.00 Fleet Svcs Coord 2.00 2.00 2.00 2.00 2.00 0.00 Management Analyst 0.00 0.00 0.20 0.20 0.20 0.00 Mobile Service Tech 1.00 1.00 1.00 1.00 1.00 0.00 Motor Equipment Mechanic II 7.00 7.00 7.00 7.00 7.00 0.00 Senior Fleet Services Coordinator 1.00 1.00 1.00 1.00 1.00 0.00 Sr. Financial Analyst 0.08 0.08 0.08 0.08 0.08 0.00 Total Vehicle Replacement Fund 16.08 16.08 16.53 16.53 16.53 0.00 Total OTHER FUNDS 73.88 74.58 78.47 77.82 87.00 8.53 Total Citywide Positions 1,018.60 1,016.60 1,014.35 1,015.35 1,019.35 5.00 FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change FTE - 19 - City of Palo Alto Fiscal Year 2014 Proposed Budget Table of Organization retirement, and critical vacancies. The overstrength positions also accommodate newly approved provisional employment programs. Refer to City Council Staff Report ID #1812 for additional information. Refundable Key Deposit Rental Fee Bicycle Training (or other training TBD) Parking Permits – Business Districts All Lots Transferable Permit Lot X (Sheraton Parking Lot) One-Day Parking Permits-California Avenue One-Day Parking Permits-University Avenue Replacement Permit University Avenue Parking District Wait list registration (applied to permit fee)$10 $10 All Lots Transferable Permit 800 High Street Parking Garage Parking Permit Residential Parking Permit Program Annual Permit - College Terrace Lost Annual Permit - College Terrace Guest Permit - College Terrace Lost Guest Permit - College Terrace Day Use Permit - College Terrace Residential Parking Permit - Other (Trial) Parking Permits – Commercial/Construction Construction/Maintenance Vehicles Emergency Repair Vehicles Wide Load/Heavy Load Permits Per Vehicle Each Occurrence Building Moving/Relocating Permit To site outside City To site within City Valet Parking Permit Application Permit Application Renewal (annual) Short-term Application Fee On-street Parking Space Rental Valet Parking Sign and Curb Markings $183.00/year $5.00/permit $22.00 $65.00/quarter, $250/year $119.00 plus cash deposit or bond $50 through trial period $40.00/permit $606.00 plus cash deposit or bond $10.00/permit $76.00/space per week $43.00/quarter, $123.00/year $26.00/quarter, $75.00/year $7.00/day $40.00/permit FY 2013 FEE $6.00 $16.00-$54.00 per class $88.00/year $270.00 $76.00/space per week $973.00 $40.00/permit $579.00 $16.00/day $10.00 $135.00/quarter, $420.00/year $135.00/quarter $43.00/quarter $27.00 FY 2014 FEE $27.00 $6.00 $16.00-$54.00 per class $49.50/quarter, $149.00/year $49.50/quarter $5.00/permit $26.00/quarter, $75.00/year $8.00/day $17.50/day $10.00 $146.50/quarter, $466.00/year $146.50/quarter $40.00/permit $40.00/permit $973.00 Bicycle Locker Rental $50 through trial period $76.00/space per week $183.00/year $22.00 $119.00 plus cash deposit or bond $606.00 plus cash deposit or bond $65.00/quarter, $250/year PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Transportation $579.00 $88.00/year $270.00 $76.00/space per week $40.00/permit $10.00/permit City of Palo Alto FY 2014 Municipal Fee Schedule 17-1 For more information on impact fees and parkland dedication, refer to Palo Alto Municipal Code Chapters 16.45; 16.46;16.47; 16.57; 16.58; 16.59;16.60; and 21.50. Development Impact Fees PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Impact Fees (1) For the purposes of this fee, "single-family" is defined as a single dwelling unit that does not share a common wall with another dwelling unit. A second dwelling unit, as defined in 18.04.030 of the Palo Alto Municipal Code, is considered a multi-family unit for purposes of calculating this fee. Nonresidential: Commercial/Industrial, $243 per 1,000 square feet or fraction thereof; Hotel/Motel, $102 per 1,000 square feet or fraction thereof. FY 2014 FEE Residential: Single family $10,638/residence (or $15,885/residence larger than 3,000 square feet); Multi-family $6,963 unit (or $3,521/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $4,517 per 1,000 square feet or fraction thereof; Hotel/Motel, $2,043 per 1,000 square feet or fraction thereof. Residential: Single family1 $2,758/residence (or $4,129/residence larger than 3,000 square feet); Multi-family $1,815/unit (or $916/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $255 per 1,000 square feet or fraction thereof; Hotel/Motel, $115 per 1,000 square feet or fraction thereof. Residential: Single family $963/residence (or $1,434/residence larger than 3,000 square feet); Multi-family $565 unit (or $316/unit smaller than or equal to 900 square feet). Residential: Single family1 $963/residence (or $1,434/residence larger than 3,000 square feet); Multi-family $575/unit (or $316/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $4,518 per 1,000 square feet or fraction thereof; Hotel/Motel, $2,043 per 1,000 square feet or fraction thereof. Libraries Nonresidential: Commercial/Industrial, $243 per 1,000 square feet or fraction thereof; Hotel/Motel, $102 per 1,000 square feet or fraction thereof. FY 2013 FEE Residential: Single family1 $10,639/residence (or $15,887/residence larger than 3,000 square feet); Multi-family $6,964/unit (or $3,521/unit smaller than or equal to 900 square feet). Community Centers Residential: Single family1 $2,758/residence (or $4,129/residence larger than 3,000 square feet); Multi-family $1,815/unit (or $916/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $255 per 1,000 square feet or fraction thereof; Hotel/Motel, $115 per 1,000 square feet or fraction thereof. Parks City of Palo Alto FY 2014 Municipal Fee Schedule 17-3 PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Impact Fees FY 2014 FEEFY 2013 FEE Stanford Research Park/El Camino Real CS Zone San Antonio / West Bayshore Area Citywide Transportation Impact Fee Charleston/ Arastradero Parking in lieu fee for the Downtown Assessment District Only applies to residential projects that require a subdivision or parcel map. Land dedication is required for subdivisions resulting in more than 50 parcels. When parkland dedication applies, park impact fees (above) do not apply. $60,750 per parking space Land required: Single-family = 555 square feet / unit, Multi-family = 382 sq. ft. / unit In-lieu Fee: Single-family = $58,366/unit, Multi-family - $40,187/unit. $18.89 per square foot applies to nonresidential development $11.08 per net new square foot $2.28 per square foot $3,197 per net new PM peak hour trip $0.34 per square foot - commerical; $1,168 per residential unit $3,053 per net new PM peak hour trip Traffic Impact Fees $0.33 per square foot - commerical; $1,115 per residential unit $11.08 per net new square foot 18.44 per square foot applies to nonresidential development Housing Impact Fees $60,750/parking space Parkland Dedication Fee Land required: Single-family = 555 square feet / unit, Multi-family = 382 sq. ft. / unit In-lieu Fee: Single-family = $56,517/unit, Multi-family - $38,899/unit $2.28 per square foot City of Palo Alto FY 2014 Municipal Fee Schedule 17-4 Certificate of Compliance /Certificate of Correction/Map Amendment Construction in Public Right-of-Way (including public or private subdivision streets) Improvement Plan Review Excellent (Pavement Score 94-100) Good (Pavement Score 81-93) Fair (Pavement Score 63-80) Poor (Pavement Score 0-62) Service Lateral Connection - Per Trench Dumpster, Container Fence Non-residential Long Term > 5 days Residential Non-residential Short Term < 5 days Non-residential 1 DayVTA Bus Shelters' Installation/Relocation Flood variance fee 101-1,000 cubic yards 1,001-10,000 cubic yards 10,001 cubic yards or more $11.00 per sq. ft. of trench $920.00 $1,080.00 $140.00 for the first 100 cubic yards, plus $140.00 for each additional 100 yards, or fraction thereof. $215.00 $460.00 $430.00 $3,240 $260.00 minimum, or 5% of contract work Initial deposit of $1,080.00, 100 percent of processing costs will be recovered plus any permit fees per the Municipal Fee Schedule. $340.00 City cost plus 15% $2,685.00 for the first 10,000 cubic yards, plus $140.00 for each additional 10,000 cubic yards or fraction thereof. Excavating, Grading and Fill Permits $1,415.00 for the first 1,000 cubic yards, plus $140.00 for each additional 1,000 or fraction thereof. FY 2014 FEE $3,000 $260.00 minimum, or 5% of contract work Initial deposit of $1,080.00, 100 percent of processing costs will be recovered plus any permit fees per the Municipal Fee Schedule. $16.00 per sq. ft. of trench Pavement Condition FY 2013 FEE $16.00 per sq. ft. of trench $11.00 per sq. ft. of trench $8.00 per sq. ft. of trench $5.00 per sq. ft. of trench $1,080.00 $8.00 per sq. ft. of trench $5.00 per sq. ft. of trench $145.00 $145.00 Encroachment Permit *Based on Pavement Maintenance Management System $145.00 $145.00 $920.00 $430.00 $460.00 $215.00 $340.00 City cost plus 15% $140.00 for the first 100 cubic yards, plus $140.00 for each additional 100 yards, or fraction thereof. $1,415.00 for the first 1,000 cubic yards, plus $140.00 for each additional 1,000 or fraction thereof. $2,685.00 for the first 10,000 cubic yards, plus $140.00 for each additional 10,000 cubic yards or fraction thereof. PUBLIC WORKS DEPARTMENT Engineering Fees Street Cut Fee City of Palo Alto FY 2014 Municipal Fee Schedule 20-1 Flood Zone Determination Letter Temporary Elevation Benchmarks Temporary Discharge to Storm Drain from Construction Site Dewatering. Plan Check Fee Inspection Fee Construction and Repair STRAIGHT: $93.00 OT: $140.00 STRAIGHT: $93.00 OT: $140.00 Sweeping Services STRAIGHT: $96.00 OT: $144.00 STRAIGHT: $96.00 OT: $144.00 Traffic Control/Graffiti Services STRAIGHT: $85.00 OT: $128.00 STRAIGHT: $85.00 OT: $128.00 Tree Services STRAIGHT: $79.00 OT: $119.00 STRAIGHT: $79.00 OT: $119.00 Supervision STRAIGHT: $92.00 OT: $138.00 STRAIGHT: $92.00 OT: $138.00 Newsrack Impoundment Fee Street trees-new trees for subdivisions Tree Removal (any tree requiring removal) Tree Inspection for private development FY 2014 FEEFY 2013 FEE $57.00 per letter $292.00 per benchmark FY 2013 FEE $54.00 for the first day of impoundment, plus $3.00 for each subsequent day of impoundment $140.00 per request to discharge + $82.00 per month of discharge to storm drain. $360.00 per project $330.00 per inspection (up to 4 hours) + $82.00 per hour thereafter. $115 per inspection/minimum 2 visits Special Fees Street Tree Destruction To determine fee, the trunk diameter is to be measured 4.5 feet above ground level. If the tree is multi-trunk, use 1.5 times the diameter of the largest trunk to determine fee. If there is tree damage 4-5 feet above ground level, trunk diameter is to be measured 1 foot above ground level and 1 inch is to be subtracted from the diameter to determine fee. $100.00/inch of trunk diameter plus planting installation $54.00 for the first day of impoundment, plus $3.00 for each subsequent day of impoundment $100.00/tree $100.00/inch of trunk diameter plus planting installation $100.00/inch of damage (Trees will be assessed a fee by measuring damage at the widest diameter.) FY 2014 FEE PUBLIC WORKS DEPARTMENT Operations Maintenance and Repair Charges For services provided by Public Works/Operations to support an unbudgeted special event, repair damage to public property (ie: graffiti clean-up) or to bill other outside agencies for services (i.e. Caltrans for street sweeping El Camino Real). Also used to determine inter-departmental charges for employee services to other departments. $57.00 per letter $292.00 per benchmark $140.00 per request to discharge + $82.00 per month of discharge to storm drain. $360.00 per project $330.00 per inspection (up to 4 hours) + $82.00 per hour thereafter. $100.00/tree $100.00/inch of damage (Trees will be assessed a fee by measuring damage at the widest diameter.) $115 per inspection/minimum 2 visits Fees Storm Water Fees for Development Project Subject to PAMC Chapter 16.11 (C.3 Regulations) PUBLIC WORKS DEPARTMENT Storm Drain City of Palo Alto FY 2014 Municipal Fee Schedule 20-2 Specific Fees Dirt from commercial loads (acceptance subject to need). Rate subject to change based on site needs. Dirt from commercial loads. The landfill is now closed. Call 650- 329-2113 for soil drop- off availability. Rate subject to change based on site needs. $35/cubic yard Dirt from commercial loads. The landfill is now closed. Call 650- 329-2113 for soil drop- off availability. Rate subject to change based on site needs. $35/cubic yard Construction & Demolition Program Fees Demolitions Commercial and Multi-Family projects greater than or equal to $25,000 in valuation $230.00/permit $230.00/permit Single Family and Two Family projects greater than 75,000 in valuation $205.00/permit $205.00/permit Single Family and Two Family projects greater than $25,000 and less than $75,000 in valuation 1 $77.00/permit $77.00/permit Materials Per Load of 1000 gal or less Each Additional 500 gal Per Load of 1000 gal or less Each Additional 500 gal Septic Tank Waste and Portable Toilet Pumpings $63.70 $31.80 $63.70 $31.80 Grease Trap Waste $106.00 $53.00 $106.00 $53.00 Industrial Waste Discharge BMP: Best Management Practices. Small, non-categorical, facilities with minimal process discharge Exceptional Waste: Short term, non- standard discharges Groundwater: Groundwater remediation discharges Basic: Non-categorical/small categorical with only minor pollutant concerns Permit Fee FY 2013 FEE $425.00 $750.00 $750.00 $1,250.00 PUBLIC WORKS DEPARTMENT Wastewater Treatment FY 2014 FEE FY 2013 FEE PUBLIC WORKS DEPARTMENT $750.00 $1,250.00 These charges were previously reflected on Utilities S-2 rate schedule. Permiting fees are required for the issuance of an Industrial Discharge Permit. Permits have five year durations except for Exceptional Waste. Industrial Permit requirements and definitions are contained in Chapter 16.09 of the Palo Alto Municipal Code. Exceptional Waste discharges in excess of 25 CCF are subject to volume based discharge fees as shown in Utilities Schedule S-2. Permit Fee $425.00 $750.00 Refuse FY 2014 FEE Additional refuse rates can be found in Utility Rate Schedules R. City of Palo Alto FY 2014 Municipal Fee Schedule 20-3 Full: Categorical or Significant Industrial Users with ability to impact the Regional Water Quality Control Plant $2,100.00 $2,100.00 City of Palo Alto FY 2014 Municipal Fee Schedule 20-4 *NOT YET APPROVED* 1 130514 dm 015018 Resolution No. ______ Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Utility Rate Schedules EDF-1 and EDF-2 The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-1 (Dark Fiber Licensing Services) is hereby amended to read in accordance with sheets EDF-1-1 and EDF-1-2, attached and incorporated. Utility Rate Schedule EDF-1, as amended, shall become effective July 1, 2013. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-2 (Dark Fiber Connection Fees) is hereby amended to read in accordance with sheet EDF-2-1, attached and incorporated. Utility Rate Schedule EDF-2, as amended, shall become effective July 1, 2013. SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 4. The Council finds that the adoption of this resolution increasing dark fiber rates by the Consumer Price Index to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of // // // // // // // // ATTACHMENT B *NOT YET APPROVED* 2 130514 dm 015018 Regulations Sec. 15273(a). After reviewing the fiber rate staff reports presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ Deputy City Attorney City Manager _____________________________ Director of Utilities _____________________________ Director of Administrative Services ATTACHMENT B DARK FIBER LICENSING SERVICES UTILITY RATE SCHEDULE EDF-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-1-1 Effective 07-01-20123 dated 7-01-20121 Sheet No. EDF-1-1 A. APPLICABILITY: This rate schedule applies to customer accounts established prior to September 18, 2006, unless the customer elects to apply the EDF-3 rate to the entire customer account. This rate applies to Fiber Optic services from the City of Palo Alto Utilities (CPAU) pertaining to the City's network (Backbone and associated connections). B. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. C. FEES: 1. DARK FIBER BACKBONE LICENSE FEES: The values or ranges for each of these price components are shown below: (1) Fiber Price………………………………………………………………. $3270.7890/FM/month (2) Quantity discount ……………………………………………………… $0 to $59.84/FM/month (3) Buffer tube discount……………………………………………………….. $0 to $59.84/FM/month (4) Route length discount…………………………………………………….. $0 to $77.80/FM/month (5) Ring topology discount………………………………………………………$0 to $23.94/FM/month (6) Length of term discount…………………………………………………… $0 to $46.80/FM/month Minimum Backbone License Fee ...................................................................................... $48595.1693/month Project Minimum Backbone Fees apply to any project proposal signed after September 18, 2006 in which the project connects with the Backbone. Description for Discounts: Quantity discount: based on an array of discounts for quantities of fiber licensed on a specific path. Buffer tube discount: discount for numbers of full buffer tubes licensed on a specific path. Route length discount: based on the route length licensed on a specific project. Ring topology discount: The ring topology discount for customers contracting for complete rings. Term discount: based on an array of discounts for contracts greater than one and less than ten years. 2. DARK FIBER LATERAL CONNECTION FEES: Customer responsibilities and fees for drop and custom cable construction are described in the CPAU Rules and Regulations, Rate Schedule EDF-2, project proposals and other associated documents. In all cases, the Licensee shall pay an annual Drop/Custom Cable Management Fee based on the follow per foot fees: (1) Drop Cable Management Fees (for the first 12-Fibers) …………………………… $0.02-$0.06/ft/month (2) Custom Cable Management Fees (for the first 12-Fibers)……………………….. $0.312/ft/month (3) Fees for additional Drop or Custom Cable fibers (each additional set of 12-Fibers) $0.06/ft/month Minimum Drop or Custom Cable Management Fees ........................................................ $23945.7305/month Minimum Drop Cable Management Fees apply to any project proposal signed after September 18, 2006. ATTACHMENT B DARK FIBER LICENSING SERVICES UTILITY RATE SCHEDULE EDF-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-1-2 Effective 07-01-20123 dated 7-01-20121 Sheet No. EDF-1-2 3. EARLY TERMINATION FEES: If the Licensee chooses to terminate for convenience the License Agreement or the term of any project under the License Agreement, then the Licensee shall pay the applicable termination payment as specified in this schedule or in the License Agreement, as provided below. Unless otherwise provided in the License Agreement, the Licensee shall pay a termination fee in one of the following amounts, whichever is less:  Annual fee of the contract year that the Licensee chooses to terminates in full without term discounts, or  Remaining fees of the project term as indicated in the License Agreement. D. SPECIAL NOTES: 1. All fees must be paid to the City in accordance with the terms of the Dark Fiber License Agreement, the customer’s project proposals and all the applicable Utilities Rates, Rules, and Regulations. 2. All fees and minimum charges are subject to Consumer Price Index (CPI) adjustments, to be applied annually, except as defined by Section D.3 of this Rate Schedule. Discounts will not be modified by changes to CPI. 3. The CPI adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland-San Jose MSA, published by the U.S. Department of Labor, Bureau of Labor Statistics. The adjustment is calculated by dividing the most recent calendar year December CPI by the December CPI in the year rates last changed. In the event that the change between December CPI’s indicates an adjustment of less than 1% is required, a change to rate schedules may not be made for the upcoming year. Future rate changes will take the last year of change as the new base year for purposes of calculation. {End} ATTACHMENT B DARK FIBER SERVICE CONNECTION FEES UTILITY RATE SCHEDULE EDF-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-2-1 Effective 7-01-20123 dated 7-01-20112 Sheet No. EDF-2-1 A. APPLICABILITY: This schedule applies to all connections, expansions, and upgrades to the City's Dark Fiber network (Backbone). B. TERRITORY: All territory within the incorporated limits of the City and land owned or leased by the City. C. FEES: 1. ADVANCE ENGINEERING FEES: Advance engineering (AER) fees must be paid to start the engineering process and are non-refundable. The fees will be credited against the estimated project cost prior to the collection of the project construction fees. (1) Commercial/Industrial AER minimum fee ..................................................................... $76683.00 (2) Special conditions (requiring expert assessment) ........................................................... By Estimate 2. ESTIMATED SERVICE CONNECTION AND RECONFIGURATION FEES All estimated service connection and reconfiguration fees must be paid prior to the scheduling of any construction or reconnections to the City's Dark Fiber network. (1) Service connection (Interconnection) fee ...................................................... By Estimate (2) Reconfiguration Fees ..................................................................................... By Estimate Labor rates are subject to change as stated in the Utility Rate Schedule C-1. D. NOTES: 1. The Customer is responsible for the installation and maintenance of all ducts and pathways from the facility to the property line in compliance with City of Palo Alto Utilities Rules and Regulations and contract agreements. 2. The City shall not be held liable for delays or interruptions in service, but will make reasonable efforts to provide timely continuous service. 3. All fees are subject to Consumer Price Index (CPI) adjustments, to be applied annually. The CPI adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland- San Jose MSA, published by the U.S. Department of Labor, Bureau of Labor Statistics. The adjustment is calculated by dividing the most recent calendar year December CPI by the December CPI in the year rates last changed. In the event that the change between December CPI’s indicates an adjustment of less than 1% is required, a change to rate schedules may not be made for the upcoming year. Future rate changes will take the last year of change as the new base year for purposes of calculation. {End} ATTACHMENT B *Not Yet Approved* 130312 dm 015005 Resolution No. _________ Resolution of the Council of the City of Palo Alto Adopting a Water Rate Increase and Amending Utility Rate Schedules W-1,W-2, W-3, W-4 and W-7 R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. Pursuant to Article XIIID Sec. 6 of the California Constitution, on June 3, 2013, the City of Palo Alto held a public hearing to consider all protests against the proposed water rate amendments. C. The total number of written protests presented by the close of the public hearing was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed water rate amendments. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-1, as amended, shall become effective July 1, 2013. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-2, as amended, shall become effective July 1, 2013. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-3 (Fire Service Connections) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-3, as amended, shall become effective July 1, 2013. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (Residential Master-Metered and General Non-Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-4, as amended, shall become effective July 1, 2013. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Non-Residential Irrigation Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-7, as amended, shall become effective July 1, 2013. ATTACHMENT C *Not Yet Approved* 130312 dm 015005 SECTION 6. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 7. The Council finds that the adoption of this resolution changing water rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ____________________________ Sr. Deputy City Attorney City Manager ____________________________ Director of Utilities _____________________________ Director of Administrative Services ATTACHMENT C GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-1-1 Effective 7-1-20132 dated 10-1-20117-1-2012 Sheet No W-1-1 A. APPLICABILITY: This schedule applies to all separately metered single family residential water services. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge: Per Month For 5/8-inch meter ..................................................................................................... $ 13.7414.67 For 3/4 inch meter ..................................................................................................... 18.2819.51 For 1 inch meter ........................................................................................................ 27.3529.18 For 1 1/2 inch meter .................................................................................................. 50.0353.37 For 2-inch meter ........................................................................................................ 77.2582.39 For 3-inch meter ........................................................................................................ 163.44174.29 For 4-inch meter ........................................................................................................ 290.46309.72 For 6-inch meter ........................................................................................................ 594.39633.80 For 8-inch meter ........................................................................................................1,093.391,165.86 For 10-inch meter ......................................................................................................1,728.481,843.02 For 12-inch meter ....................................................................................................... 2,423.45 Commodity Rate: (To be added to Service Charge and applicable to all pressure zones.) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Tier 1 usage ........................................................................................................................$4.9954 Tier 2 usage (All usage over 100% of Tier 1) ........................................................................ 7.5806 Temporary unmetered service to residential subdivision developers, per connection ........................................................................ $6.00 ATTACHMENT C GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-1-2 Effective 7-1-20132 dated 10-1-20117-1-2012 Sheet No W-1-2 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Calculation of Usage Tiers Tier 1 water usage shall be calculated and billed based upon a level of 0.2 ccf per day rounded to the nearest whole ccf, based on meter reading days of service. As an example, for a 30 day bill, the Tier 1 level would be 0 through 6 ccf. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. {End} ATTACHMENT C WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-2-1 Effective 7-1-20123 dated 7-1-200912 Sheet No W-2-1 A. APPLICABILITY: This schedule applies to all water taken from fire hydrants for construction, maintenance, and other uses in conformance with provisions of a Hydrant Meter Permit. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: 1. Monthly Service Charge. METER SIZE 5/8 inch ........................................................................................................................... 50.00 3 inch ........................................................................................................................... 125.00 2. Commodity Rate: (per hundred cubic feet) ................................................................ $5.756.15 D. SPECIAL NOTES: 1. Monthly charges shall include the applicable monthly service charge in addition to usage billed at the commodity rate. 2. Any applicant using a hydrant without obtaining a Hydrant Meter Permit or any permittee using a hydrant without a Hydrant Meter Permit shall pay a fee of $50.00 for each day of such use in addition to all other costs and fees provided in this schedule. A hydrant permit may be denied or revoked for failure to pay such fee. 3. A meter deposit of $750.00 may be charged any applicant for a Hydrant Meter Permit as a prerequisite to the issuance of a permit and meter(s). A charge of $50.00 per day will be added for delinquent return of hydrant meters. A fee will be charged for any meter returned with missing or damaged parts. 4. Any person or company using a fire hydrant improperly or without a permit, or who draws water from a hydrant without a meter installed and properly recording usage shall, in addition to all other applicable charges be subject to criminal prosecution pursuant to the Palo Alto Municipal Code. {End} ATTACHMENT C FIRE SERVICE CONNECTIONS UTILITY RATE SCHEDULE W-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-3-1 Effective 7-1-20132 dated 10-1-20117-1-2012 Sheet No W-3-1 A. APPLICABILITY: This schedule applies to all public fire hydrants and private fire service connections. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: 1. Monthly Service Charges Public Fire Hydrant .................................................................................................... $5.00 Private Fire Service: 2-inch connection .......................................................................................................$3.303.03 4-inch connection .......................................................................................................20.4418.78 6-inch connection ....................................................................................................... 59.3854.55 8-inch connection .......................................................................................................126.54116.24 10-inch connection .....................................................................................................227.56209.03 12-inch connection ..................................................................................................... 337.65 2. Commodity (To be added to Service Charge unless water is used for fire extinguishing or testing purposes.) Per Hundred Cubic Feet All water usage........................................................................................................... $10.00 D. SPECIAL NOTES: 1. Service under this schedule may be discontinued if water is used for any purpose other than fire extinguishing or testing and repairing the fire extinguishing facilities. Using hydrants and fire services for other purposes is illegal and will be subject to the commodity charge as noted above, fines, and criminal prosecution pursuant to the Palo Alto Municipal Code. 2. For a combination water and fire service, the general water service schedule shall apply. ATTACHMENT C FIRE SERVICE CONNECTIONS UTILITY RATE SCHEDULE W-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-3-2 Effective 7-1-20132 dated 10-1-20117-1-2012 Sheet No W-3-2 3. Utilities Rule and Regulation No. 21 provides additional information on Automatic Fire Services. 4. Repairs and testing of fire extinguishing facilities are not considered unauthorized use of water if records and documentation are supplied by the customer. {End} ATTACHMENT C RESIDENTIAL MASTER-METERED AND GENERAL NON-RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-4-1 Effective 7-1-20123 dated 10-1-20117-1-2012 Sheet No W-4-1 A. APPLICABILITY: This schedule applies to non-residential water service in the City of Palo Alto and its distribution area. This schedule is also applicable to multi-family residential customers served through a master meter. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge Per Month For 5/8-inch meter .................................................................................... $ 13.7414.67 For 3/4-inch meter .................................................................................... 18.2819.51 For 1-inch meter .................................................................................... 27.3529.18 For 1 ½-inch meter .................................................................................... 50.0353.37 For 2-inch meter .................................................................................... 77.2582.39 For 3-inch meter .................................................................................... 163.44174.29 For 4-inch meter .................................................................................... 290.46309.72 For 6-inch meter .................................................................................... 594.39633.80 For 8-inch meter ....................................................................................1,093.391,165.86 For 10-inch meter ....................................................................................1,728.481,843.02 For 12-inch meter .................................................................................... 2,423.45 Commodity Rates: (to be added to Service Charge) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Per ccf ............................................................................................................ $ 5.756.15 ATTACHMENT C RESIDENTIAL MASTER-METERED AND GENERAL NON-RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-4-2 Effective 7-1-20123 dated 10-1-20117-1-2012 Sheet No W-4-2 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. {End} ATTACHMENT C NON-RESIDENTIAL IRRIGATION WATER SERVICE UTILITY RATE SCHEDULE W-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-7-1 Effective 7-1-20123 dated 10-1-20117-1-2012 Sheet No W-7-1 A. APPLICABILITY: This schedule applies to non-residential water service supplying dedicated irrigation meters in the City of Palo Alto and its distribution area. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge Per Month For 5/8-inch meter .................................................................................... $ 13.7414.67 For 3/4-inch meter .................................................................................... 18.2819.51 For 1-inch meter .................................................................................... 27.3529.18 For 1 1/2 inch meter .................................................................................... 50.0353.37 For 2-inch meter .................................................................................... 77.2582.39 For 3-inch meter .................................................................................... 163.44174.29 For 4-inch meter .................................................................................... 290.46309.72 For 6-inch meter .................................................................................... 594.39633.80 For 8-inch meter ....................................................................................1,093.391.165.86 For 10-inch meter ....................................................................................1,728.481.843.02 For 12-inch meter .................................................................................... 2,423.45 Commodity Rates: (to be added to Service Charge) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Per ccf ............................................................................................................ $ 7.1952 ATTACHMENT C NON-RESIDENTIAL IRRIGATION WATER SERVICE UTILITY RATE SCHEDULE W-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-7-2 Effective 7-1-20123 dated 10-1-20117-1-2012 Sheet No W-7-2 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. {End} ATTACHMENT C NOTYETAPPROVED 1 130319jb0131057 ResolutionNo.______ ResolutionoftheCounciloftheCityofPaloAltoAmendingUtilityRate ScheduleD1(StormandSurfaceWaterDrainage)toIncreaseStorm DrainRatesby2.2%PerMonthPerEquivalentResidentialUnitfor FiscalYear2014    TheCounciloftheCityofPaloAltoRESOLVESasfollows:   SECTION1.PursuanttoSection12.20.010ofthePaloAltoMunicipalCode,Utility Rate Schedule D1 (Storm and Surface Water Drainage) is hereby amended to read in accordancewithsheetD11,attachedheretoandincorporatedherein.TheforegoingUtility RateSchedule,asamended,shallbecomeeffectiveJuly1,2013.   SECTION2.TheCouncilfindsthatthisrateincreaseisbeingimposedtooffsetthe effectsofinflationonlaborandmaterialcostspursuanttotheannualinflationaryfeeescalator provisionoftheStormDrainageFeeballotmeasure,whichwasapprovedbyamajorityofPalo AltopropertyownersonApril26,2005.   SECTION 3. The Council finds that the revenue derived from the authorized adoptionenumeratedhereinshallbeusedonlyforthepurposesetforthinArticleVII,Section 2,oftheCharteroftheCityofPaloAlto.   SECTION4.TheCouncilfindsthatmodificationandapprovalofthischangetothe UtilityRateScheduleD1(StormandSurfaceWaterDrainage)forthepurposeofmeeting  //  //  //  //  //  //  //  //  //  ATTACHMENT D NOTYETAPPROVED 2 130319jb0131057 operatingexpensesisstatutorilyexemptfromCaliforniaEnvironmentalQualityAct(CEQA) review,pursuanttoPublicResourcesCodeSection15273(a).   INTRODUCEDANDPASSED:    AYES:   NOES:  ABSENT:  ABSTENTIONS:  ATTEST:        __________________________  _____________________________ CityClerk    Mayor   APPROVEDASTOFORM:   APPROVED:  ___________________________  _____________________________ SeniorAsst.CityAttorney   CityManager       _____________________________      DirectorofPublicWorks       _____________________________      DirectorofAdministrative       Services  ATTACHMENT D GENERAL STORM AND SURFACE WATER DRAINAGE UTILITY RATE SCHEDULE D-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2013 Supersedes Sheet No.D-1-1 dated 7-1-2012 Sheet No. D-1-1   A. APPLICABILITY: This schedule applies to all storm and surface water drainage service, excepting only those users and to the extent that they are constitutionally exempt under the Constitution of the State of California or who are determined to be exempt pursuant to Rule and Regulation 25. B. TERRITORY: Inside the incorporated limits of the city of Palo Alto and land owned or leased by the city. C. RATES: Per Month: Storm Drainage Fee per Equivalent Residential Unit (ERU) .......................................................$11.99 D. SPECIAL NOTES: 1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm drainage fees for residential and non-residential customers. All single-family residential properties shall be billed the number of ERUs specified in the following table, based on an analysis of the relationship between impervious area and lot size for Palo Alto properties. RESIDENTIAL RATES (Single-Family Residential Properties PARCEL SIZE (sq.ft.) ERU <6,000 sq.ft. 0.8 ERU 6,000 - 11,000 sq.ft. 1.0 ERU >11,000 sq.ft. 1.4 ERU All other properties will have ERU's computed to the nearest 1/10 ERU using the following formula: No. of ERU = Impervious Area (Sq. Ft.) 2,500 Sq. Ft. 2. For more details on the storm drainage fee, refer to Utilities Rule and Regulation 25. {End}  ATTACHMENT D NOT YET APPROVED 130514 sh 0140094 1 Resolution No. ______ Resolution of the Council of the City of Palo Alto Amending the 2011- 2013 Compensation Plan for Management and Professional Adopted by Resolution No. 9282 to Change the Title and Salary of One Position. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2011-2013 Compensation Plan for Management and Professional Personnel, adopted by Resolution No. 9282 is hereby amended to change the title and salary of one position as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including July 1, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer ATTACHMENT E NOT YET APPROVED 130514 sh 0140094 2 EXHIBIT A Management/Professional Compensation Plan Changes – Effective July 1, 2013 Job Code Classification Title Grade Code Control Point Approx. Annual Hourly TBD Chief Sustainability Officer (title and salary change from Assistant to City Manager) 28 11,067.28 132,807.33 63.85 ATTACHMENT E *NOT YET APPROVED* 130513 sh 0140092 1 Resolution No. _______ Resolution of the Council of the City of Palo Alto Amending the 2012- 2013 Memorandum of Agreement for Local 521, Service Employees International Union (SEIU), Adopted by Resolution No. 9277 to Add One New Classification The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2012-2013 Memorandum of Agreement for SEIU Personnel, adopted by Resolution No. 9277, is hereby amended to add one new classification, as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including July 1, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer ATTACHMENT F *NOT YET APPROVED* 130513 sh 0140092 2 EXHIBIT A SEIU Memorandum of Agreement Change – Effective July 1, 2013 Job Code Classification Title Grade Code Control Point Approx. Annual Hourly TBD Senior Industrial Waste Investigator (new classification) TBD $7427.33 89,135.50 $42.85 ATTACHMENT F ** NOT YET APPROVED ** 130513 sh 0140091 1 Resolution No. ______ Resolution of the Council of the City of Palo Alto Amending the 2010- 2014 Compensation Plan for IAFF Adopted by Resolution No. 9204 to Properly Record the Top Step Salary for One Existing and Create One New Position The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2010-2014 Compensation Plan for IAFF, adopted by Resolution No. 9204, is hereby amended to properly record the top step salary of one existing position and create one new position, as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including July 1, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer ATTACHMENT G ** NOT YET APPROVED ** 130513 sh 0140091 2 EXHIBIT A IAFF Compensation Plan Changes – Effective July 1, 2013 Job Code Classification Title Grade Code Top Step Approx. Annual Approx. Monthly 646 HAZ MAT INSPECTOR (properly record top step pay rate) R78 53.85 9,335 112,015 TBD HAZ MAT INSPECTOR - EMT (new position) TBD 55.47 9,615 115,375 ATTACHMENT G ATTACHMENT H 2013-2015 Human Services Resource Allocation Process (HSRAP) Funding Recommendations to City Council June 2014 No.Agency Program Description 2012-13 Contract Amount 2013-14 Agency's Request for Funding 2013-14 Proposed Funding Recommendation Six-Year Contracts Avenidas Senior Services $ 402,224 $ 406,246 PACCC Child Care Subsidy Program $ 407,491 $ 411,566 Six-Year Contracts Total $ 809,715 $ 817,812 Two-Year Contracts 2013-14 Proposed Funding Recommendation 1 Abilities United Disability Services 37,642$ 53,111$ $ 40,352 2 Adolescent Counseling Sv On Campus Counseling Sv 87,561$ 110,000$ $ 93,861 3 Community Health Awareness Council Outlet Program 8,930$ 13,742$ $ 9,573 4 Community Technology Alliance Shared Technical Infrastructure 5,432$ 8,000$ $ 5,823 5 Downtown Streets Team Downtown Streets Team 33,666$ 75,000$ $ 36,090 6 DreamCatchers Tutoring & Mentoring low-income PA Youth 55,000$ 8,000$ 7 InnVision Shelter Network Opportunity Service Center 8,920$ 25,000$ $ 12,340 8 Kara (No Funding Recommendation)Grief Support for Children and Adults 60,000$ 9 La Comida de California Hot Meals for the Elderly 30,362$ 33,300$ $ 32,548 10 MayView Community Health Center Health Care for Low Income & Homeless PA Residents 16,074$ 25,000$ $ 17,231 11 Momentum for Mental Health Homeless Outreach Program 24,111$ 30,000$ $ 25,847 12 Palo Alto Housing Corporation Stepping Stone to Success- Academic support: 1st-12th grade 47,730$ 10,000$ 13 Peninsula HealthCare Connection Inc Project Downtown Connect 25,000$ 41,200$ $ 26,800 14 Senior Adults Legal Assistance Legal Assistance to Elders 8,037$ 9,000$ $ 8,616 15 Vista Center for the Blind & Visually Impaired Vision Rehab. Svs for Seniors 20,650$ $ 5,000 16 Youth Community Service Service and leadership 15,002$ 16,000$ $ 16,082 Two-Year Contracts Total 300,737$ 622,733$ 348,163$ Overall Total 1,110,452$ 1,165,975$ 5/28/2013 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 1 APPENDIX 2 5/22/2013    City of Palo Alto    M E M O R A N D U M    TO:   Finance Committee    DATE:   May 9, 2013    SUBJECT: Additional Information Pertaining to the Fiscal Year 2014 Proposed Budget      Staff would like to provide the Finance Committee with additional information pertaining to the Fiscal Year 2014  Proposed Budget Hearings.    Community Services Department  There was a formula error for the Golf Course Financial Summary on page 146, which has been corrected and a  replacement page is provided. (See Attachment 1).      Planning and Community Environment/University Avenue Parking Permit Fund & California Avenue Parking Permit  Fund  For 2014, activity for the University Avenue Parking Permit Fund and the California Avenue Parking Permit Fund is  centralized and consolidated in the proposed budget. Previously, the expenditures related to the maintenance and  administration of these funds was budgeted in the General Fund and Refuse Fund, with the General Fund and  Refuse Fund being reimbursed for those costs out of the appropriate parking fund, via fund transfers.  Beginning in  2014, all costs associated with the districts are budgeted directly in the parking funds.  As staff was preparing all of  the necessary changes, a few adjustments were inadvertently omitted, and are therefore recommended to be  corrected as part of this memorandum.  The benefits associated with parking‐related positions in the Planning  Department, Administrative Services Department, and Public Works Department were not eliminated from the  General Fund.   No  adjustments for the benefits are required in the Parking Funds.   These changes result in a  decrease of $139,620 in the General Fund, and will be realized as follows:  Administrative Services Department:  ($62,555)  Planning and Community Environment:  ($8,079)  Public Works Department:  ($68,986)    Additionally, the budget for utilities at the garages was established in the Parking Funds, but not reduced from the  Public Works Department.  A reduction to the Utilities budget in the Public Works Department in the amount of  $139,905 is recommended.    Lastly, in the University Avenue Parking Permit Fund, a transfer from the General Fund ($152,882), Utilities Funds  ($27,093), and Technology Fund ($13,546) is recommended.  This transfer, which was assumed in the Parking Fund  but not budgeted for in the General Fund, is intended to reimburse the Parking District for the share of spaces in  the garages and lots utilized by City staff.      The budget in the Parking Funds is correctly stated in the proposed budget. In total, these recommendations  related to the Parking Funds will have the following Impact:    APPENDIX 2 5/22/2013  General Fund:  a net reduction of $126,643  Utilities Fund:  increased costs of $27,093  Technology Fund:  increased costs of $13,546    It should be noted that additional recommendations related to the Parking Permit Funds are anticipated to be  brought forward at the May 16, 2013 Finance Committee meeting.        Information Pertaining to the Storm Drain Fund  A memorandum from the members of the Storm Drain Oversight Committee is attached for your review  (Attachment 2). The Public Works Department Budget is scheduled to be reviewed by the Finance Committee on  May 16th.       Information Pertaining to the Proposed Capital Improvement Program  Attached for your review is a letter from the Chair of the Planning and Transportation Commission (PTC)  summarizing the Commissions review of the Fiscal Year 2014‐2018 proposed Capital Improvement Plan  (Attachment 3) and the Planning and Transportation Division staff report (Attachment 4) that was presented to  the PTC that contains detail for the Capital Improvement Plan.  Minutes from this meeting are also included for  your review (Attachment 5). These items are reference for the May 16th Finance Committee meeting.                DEPARTMENT HEAD:                     LALO  PEREZ           Director, Administrative Services/CFO        CITY MANAGER:                      JAMES  KEENE           City  Manager  APPENDIX 2 - 13 -City of Palo Alto Fiscal Year 2014 Proposed Budget Community Services Golf Course Financial Summary FY 2011 Actuals FY 2012 Actuals FY 2013 Projected FY 2014 Proposed Budget REVENUES Tournament fees $2,190 $1,878 $1,754 $1,250 Green Fees 1,859,473 1,779,053 1,508,490 1,040,550 Monthly play cards 154,933 161,672 166,059 99,700 Driving range 343,878 355,594 303,071 253,750 Cart/club rentals 302,815 301,225 230,578 169,400 Proshop lease 26,537 29,966 32,000 22,500 Restaurant lease 55,075 43,827 67,200 58,800 Restaurant Utilities 25,920 21,600 25,920 22,032 Interest Income - Debt Service 36,866 -- Sale of Golf Course equipment*35,230 -- Total Revenue $2,842,917 $2,694,815 $2,335,072 $1,667,982 EXPENDITURES Operating Expenses Salaries 154,006 88,340 101,546 100,883 Benefits 105,449 41,246 70,059 68,569 Miscellaneous Supplies and Materials 43,742 12,238 36,607 29,447 General Expense 582 754 800 1,438 Rents and Leases 0 - - 1,000 Facilities and Equipment Purchases 93 - - - Allocated Charges 509,704 314,653 495,860 412,338 Subtotal $813,576 $457,231 $704,872 $613,675 Contract Services Golf Maintenance 475000 772,540 832,351 616,974 Miscellaneous 32,708 18,318 23,733 22,003 Range fees 130,152 135,310 127,290 110,173 Cart rentals 117,529 114,621 90,843 64,785 Club rentals 5,576 6,061 6,000 2,975 Fixed management fees 343,544 343,544 343,544 248,965 Credit card fees 38,000 41,474 38,000 38,000 Subtotal $1,142,509 $1,431,868 $1,461,761 $1,103,875 Total Operating Expenses $1,956,085 $1,889,099 $2,166,633 $1,717,550 Income From Operations $886,832 $805,716 $168,439 $(49,568) Debt Expenses Debt Service 560,000 499,075 428,180 429,020 Loan payment to General Fund for CIP Projects PG-08001 and PG-07700 94,849 - - - Subtotal $654,849 $499,075 $428,180 $429,020 Cost Plan Charges 44,151 16,892 23,327 25,317 Net Income (Loss)$187,832 $289,749 $(283,067)$(503,905) Golf Rounds 67,381 *The maintenance of the Golf Course was contracted out to ValleyCrest in October 2010. Golf course equipment and certain vehicles were purchased by ValleyCrest. APPENDIX 2 APPENDIX 2 City of Palo Alto (ID # 3654) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 4/24/2013 City of Palo Alto Page 1 Summary Title: 2014-2018 Proposed CIP- Comprehensive Plan Compliance Report Title: Review and Recommendation to City Council Regarding 2014-2018 Proposed CIP- Comprehensive Plan Compliance Report From: Chitra Moitra, Planner Lead Department: Planning and Community Environment RECOMMENDATION Staff recommends that the Planning and Transportation Commission (PTC) find the proposed 2014-2018 Capital Improvement Program (CIP) consistent with the Comprehensive Plan and forward the finding to the City Council. BACKGROUND The Planning and Transportation Commission is required to review the proposed CIP for consistency with the Comprehensive Plan and forward its recommendations to the City Council on an annual basis. The Commission is charged with using the Comprehensive Plan as a guide for reviewing the CIPs and examining its impacts on the physical development of the City. The Commission may also suggest modifications to the CIP. These suggested modifications are typically communicated as a letter to the City Council, which is sent after the PTC makes their CIP recommendations. The most recent letter to the City Council concerning the 2013-2017 CIP, dated May 14, 2012 is contained in Attachment A. DISCUSSION Over the past year, City staff has worked with the PTC CIP subcommittee (Commissioners Arthur Keller and Alex Panelli). The subcommittee made several recommendations for the CIP, fiscal year 2014-2018. On September 12, 2012, a study session was held to inform the PTC of the changes proposed to be made to the CIP document. PTC recommendations from that meeting are incorporated into the document. The link to the memorandum from City of Palo Alto’s Administrative Service Department and the September 12, 2012 meeting minutes are provided below: <http://www.cityofpaloalto.org/civicax/filebank/documents/31076>. <http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=31539> APPENDIX 2 City of Palo Alto Page 2 The 2013-2017 CIP letter to the City Council formed the basis for the improvements for this year’s CIP review process. Highlights of the changes to the document format include the following: Project Relationship with the Comprehensive Plan: The relationship of each project to the City’s Comprehensive Plan is more clearly communicated. The primary Comprehensive Plan element to which a given project is linked is now more readily apparent on each project page. Each CIP now has a primary element, section of Comprehensive Plan, goal and a policy assigned to it. Some projects also have secondary element and goal. Project Designation: Each project has been designated as either “Annual Recurring” or “Nonrecurring” to distinguish those projects which are one-time in nature versus those which occur every year. Project Maintenance Designation: For certain General Fund projects, labels as defined by the Infrastructure Blue Ribbon Commission (IBRC) have been assigned. “Keep-up” refers to the annual maintenance of existing infrastructure. “Catch-up” refers to deferred maintenance needs. “New” refers to other needs not considered “keep-up” or “catch-up”. Visuals: Each project page now contains a picture or graphic for better illustration. Salaries and Benefits: For FY 2014 only, salaries and benefits have been included in certain CIP projects where appropriate and possible. This change is intended to give the reader a more complete representation of the total costs for a given project. Planning Staff has provided an in-depth analysis of the 2014-2018 CIPs in Attachment B. The Analysis report consists of the following graphs, tables and charts that illustrate the Comprehensive Plan’s relationships to the CIPs. The analysis of the Capital Improvement Program Projects and the Comprehensive Plan resulted in the following charts and tables: Chart 1: Comprehensive Plan Elements by Number of Citations; Table 1: Number of Citations by Comprehensive Plan Goals, Policies and Programs; Chart 2: Goals, Policies and Programs Citations, by Element; Chart 3: Total CIP Budget by Comprehensive Plan Element; Table 2: Most Cited Comprehensive Plan Goals, Policies and Programs, by Element; Chart 4: Comprehensive Plan Elements by Source of Funds;  Chart 5: Capital Improvement Project Budget Summary by Comprehensive Plan Element and Policy Sections: APPENDIX 2 City of Palo Alto Page 3  Chart 5.1 Natural Environment Element  Chart 5.2 Community Service and Facilities Element  Chart 5.3 Transportation Element  Chart 5.4 Land use Element and  Chart 5.5 Business and Governance Elements Chart 6: Capital Improvement Project Summary by City Council Priorities. The spreadsheet database requested by PTC subcommittee is contained in Attachments C. The PTC’s recommendation will be presented to the Finance Committee during CIP budget hearing on May 7, 2013. The City Council will hold public hearing on the CIP budget in June and adoption of the entire budget is scheduled for June 10, 2013. POLICY IMPLICATIONS All CIP projects shall be consistent with the Comprehensive Plan. Staff has reviewed the 2014- 2018 CIP for consistency with the 1998-2010 Comprehensive Plan. A list of the Comprehensive Plan policies and programs cited in the CIP is provided in Attachment D. RESOURCE IMPACT The impact on City resources from individual projects, both fiscal and operational, is addressed in each project CIP description. ENVIRONMENTAL REVIEW The Capital Improvement Program is not a project under CEQA. Individual projects may or may not be subject to CEQA; an environmental determination will be made on each individual project at the time of project implementation. Attachments:                  Attachment A: PTC Letter on CIP to City Council May 14, 2012 (PDF)  Attachment B: Comprehensive Plan Analysis Report of the Proposed 2014-18 Capital Improvement Programs (PDF)  Attachment C: Financial and Infrastructure Analysis Report of the Proposed 2014-18 CIPs (PDF)  Attachment D: List of 2014-2018 Capital Improvement Projects (PDF)  Attachment E: List of 1998-2010 Comprehensive Plan Goals, Policies and Programs Cited in the CIP (PDF)  Attachment F: Proposed Capital Improvement Program 2014-2018 Rough Book Link, copies to Planning & Transportation Commission, Libraries and Development Services Center (PDF) APPENDIX 2 APPENDIX 2 . May 14, 2012 Honorable City Council c/o City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Review of 2013-2017 Proposed Capital Improvement Plan (CIP) At the meeting of May 9, 2012, the Planning and Transportation Commission (PTC) completed its review of the 2013-2017 Capital Improvement Plan (CIP) and determined that the projects in the CIP are consistent with the Comprehensive Plan. The motion to determine that that 2013-2017 CIP is consistent with the Comprehensive Plan passed on a vote of 6-0. The Commission was particularly pleased with the efforts of staff to provide an analysis of the relationship of CIP projects to Comprehensive Plan elements, the ranking of projects in terms of Council priorities and staff’s responsiveness to PTC concerns from last year. The CIP planning team has proposed to meet with the Commission in the summer months to develop additional measures to analyze next year’s CIP compliance with the Comprehensive Plan. We will forward to Council these recommendations prior to the start of work on the 2014-2018 CIP. Respectfully submitted, Eduardo Martinez, Chair Planning and Transportation Commission APPENDIX 2 APPENDIX 2 1 | P a ge ATTACHMENT B CAPITAL IMPROVEMENT PROGRAM PROJECTS AND COMPREHENSIVE PLAN CHART 1: COMPREHENSIVE PLAN ELEMENTS BY NUMBER OF CITATIONS 2 46 2 15 70 10 Business & Economics Community Services & Facilities Governance Land Use and Community Design Natural Environment Comprehensive Plan Element by Number of Citations A total of 327 times goals, policies, and programs of the 1998-2010 Comprehensive Plan were cited. 80% of the citations were from Natural Environment and Community Service Elements. APPENDIX 2 2 | P a ge TABLE 1: NUMBER OF CITATIONS BY COMPREHENSIVE PLAN GOALS, POLICIES AND PROGRAMS CHART 2: GOALS, POLICIES, AND PROGRAM CITATIONS BY ELEMENTS Elements Goals Policies Programs Business Element 2 2 2 Community Service 46 44 22 Governance Element 2 0 0 Landuse Element 15 15 5 Natural Environment 70 70 10 Transportation Element 10 10 2 0 10 20 30 40 50 60 70 Business Element Community Service Governance Element Landuse Element Natural Environment Transportation Element Goals Policies Programs Comparison of Comprehensive Plan Goals, Policies, and Program Citations by Element APPENDIX 2 3 | P a ge CHART 3:TOTAL CIP BUDGET BY COMPREHENSIVE PLAN ELEMENT Business & Economics 0% Community Services & Facilities 23% Governance 0% Land Use and Community Design 4% Natural Environment 59% Transportation 10% Salaries 5% Comprehensive Plan Elements by Percentage of Total Budget Invested The Total City budget for CIP is approximately $374.5 million. It comprises of General Fund ($123.7 million), Enterprise Fund ($245.5 million) and Internal Service Fund ($5.3 million). $221 Million (59%) of the total budget was invested for the Natural Environment Element and $81.6 Million (22%) for the Community Service Element. The other Elements accounted for 14% of the total budget. Salaries and Benefits related to the CIP accounted for little over 5% of the total budget. APPENDIX 2 4 | P a ge TABLE 2: MOST CITED COMPREHENSIVE PLAN GOALS, POLICIES AND PROGRAMS BY ELEMENT Natural Environment Number of Times Cited Community Services & Facilities Number of Times Cited Land Use and Community Design Number of Times Cited Transportation Number of Times Cited N-4 31 C-4 37 L-9 10 T-3 4 N-9 31 N-44 30 C-24 38 L-79 8 T-24 3 N-19 7 T-14 3 N-18 6 N-25 6 N-1 5 N-20 5 N-24 5 N-26 5 N-36 5 C-19 16 L-80 3 T-21 1 N-2 3 L-81 3 T-19 1 N-41 2 Programs Programs Programs Programs Goals Goals Goals Goals Policies Policies Policies Policies The following are the two most cited policies of the Comprehensive Plan: Policy C-24 of the Community Service Element: “Reinvest in aging facilities to improve their usefulness and appearance. Avoid deferred maintenance of City infrastructure (38 times) Goal C-4 of Community Service Element: “Attractive, well-maintained community facilities that serve Palo Alto residents (37 times) and Policy N-44 of Natural Environment Element : “Maintain Palo Alto’s long- term supply of electricity and natural gas while addressing environmental economic concerns” (30 times) APPENDIX 2 5 | P a ge CHART 4: COMPREHENSIVE PLAN ELEMENTS BY SOURCE OF FUNDS $0 $50 $100 $150 $200 $250 Natural Environment Community Services & Facilities Land Use and Community Design Transportation Business & Economics Governance Salaries Comparison of Comprehensive Plan Elements by Fund Source (in Million) Internal Service Fund General Fund Enterprise Fund 85% of the Enterprise Fund is allocated for Capital Improvement Projects supporting Natural Environment Element and 52% of the General Fund for Community Service Element supporting projects. APPENDIX 2 6 | P a ge CHART 5: CAPITAL IMPROVEMENT PROJECT BUDGETSUMMARY BY COMPREHENSIVE PLAN ELEMENT, AND POLICY SECTION Chart 5.1 NATURAL ENVIRONMENT ELEMENT $2.8 $207.8 $10.4 $221.0 Internal Service Fund Enterprise Fund General Fund Total NEE CIP Budget CIP Budget (in Millions) Natural Hazards 2% Open Space 98% General Fund CIP Budget by Natural Environment Element Policy Section ($10.4 Million) Air Quality 1% Energy 24% Natural Hazards <1% Open Space 5% Water Resources 70% Total CIP Budget by Natural Environment Element Policy Section ($221 Million) Projects complying with Natural Environment Element constitute 10% of General Fund budget and 59% of total City’s CIP budget. Enterprise Fund is allocated for Utility Department’s projects while the General Fund money is invested in improving our open space and trails. APPENDIX 2 7 | P a ge Chart 5.2 COMMUNITY SERVICE AND FACILITIES ELEMENT $2.5 $14.3 $64.8 $81.6 Internal Service Fund Enterprise Fund General Fund Total CSE CIP Budget CIP Budget (in Millions) Access 1% Customer Service 2% Efficient Service Delivery <1% Parks & Public Faciliites 97% General Fund CIP Budget by Community Service Element Policy Section (64.8 Million) Access < 1% Customer Service 4% Efficient Service Delivery 1% Parks & Public Faciliites 95% Total CIP Budget by Community Service Element Policy Section ($81.6Million) Community Service Element accounts for 22% of total City’s CIP budget and 52% of General Fund budget. General Fund budget is mostly used for CIPs to improve and maintain conditions of City owned buildings, facilities and parks and open spaces. APPENDIX 2 8 | P a ge Chart 5.3 TRANSPORTATION ELEMENT $11.9 $24.4 $36.3 Enterprise Fund General Fund Total TE CIP Budget CIP Budget (in Millions) Bicycling and Walking 85% Neighborho od Impacts 2% Traffic Safety 13% General Fund Budget by Transportation Element Policy Section ( $24.4 Million) Bicycling and Walking 56% Reducing Auto Use 34% Traffic Safety 8% Neighborho od Impacts 2% Total CIP Budget by Transportation Element Policy Section ($36.3 Million) 20% of General Fund budget for CIPs comply with the Transportation Element. Majority of the General Fund budget is allocated for projects improving bicycle and pedestrian safety. Other CIPs supporting the Transportation Element aims at reducing auto use and traffic safety. APPENDIX 2 9 | P a ge Chart 5.4 LAND USE ELEMENT $8.2 $5.3 $13.4 Enterprise Fund General Fund Total LUE CIP Budget CIP Budget (in Millions) Design of Buildings Public Places 5% Local Landuse and Growth Management 32% Public Ways 43% Residential Neighborhoo d 20% General Fund CIP Budget by Land Use Element Policy Section ($5.3 Million) Design of Buildings Public Places 2% Local Landuse and Growth Manageme nt 12% Public Ways 78% Residential Neighborho ods 8% Total CIP Budget by Land Use Element Policy Section ($13.4 Million) Approximately 4% of the total CIP budget and General Fund budget is invested for projects complying with the Land use Element. CIPs funded by the General Fund are mainly used for streets and sidewalk improvements supporting the Public Ways and Local Land use and Growth Management sections of the Land use Element. APPENDIX 2 10 | P a ge Chart 5.5 BUSINESS AND GOVERNANCE ELEMENT $1.3 $2.0 $3.3 Enterprise Fund Total BE & GE CIP Budget Total CIP Budget for Governance and Business Element (in millions) Governance Business & Economics Governance Element (Public Participation) $1.3 Milllion Business Element (Growth) $2 Million Enterprise Fund Budget by Business and Governance Elements Policy Section (3.3 Million ) Business Element and Governance Element accounts for .5% and .4% of the total City budget. All of the CIPs are funded through Enterprise Funds. These projects are related to improving commercial telecommunication need, and hardware/software upgrades. These are Utility Department projects: EL 02010, EL 02011, FO 10000 and FO 10001. APPENDIX 2 11 | P a ge CHART 6: CAPITAL IMPROVEMENT PROJECT SUMMARY BY CITY COUNCIL PRIORITY Infrastructure Infrastructure (California Avenue Area) Infrastructure (Downtown Area) Technology $295.6 $38.0 $3.7 $18.2 Total Budget Invested in Million Dollars by City Council Priorities Approximately 79% of the total budget is invested for infrastructure. 10% of the budget invested in the California Avenue area and 1% for Downtown area. 5% of City’s budget is being invested for technology improvements. Salaries and benefits are not included in the calculation but it accounts for 5% of the total budget. APPENDIX 2 APPENDIX 2 Buildings and Facilities $17,338,907 14% Parks and Open Space $22,211,512 18% Streets and Sidewalks $43,420,574 35% Traffic and Transportation $21,899,809 18% Salaries and Benefits‐ unallocated $18,862,194 15% Proposed FY2014‐18 General Fund CIP Total by Category Buildings and Facilities Parks and Open Space Streets and Sidewalks Traffic and Transportation Salaries and Benefits‐ unallocated APPENDIX 2 Buildings and Facilities $5,689,907 17% Parks and Open Space $11,850,512 35% Streets and Sidewalks $9,320,651 28% Traffic and Transportation $4,589,809 14% Salaries and  Benefits‐ unallocated $1,976,191 6% Buildings and Facilities Parks and Open Space Streets and Sidewalks Traffic and Transportation Salaries and Benefits‐ unallocated Proposed FY2014 General Fund CIP Total by Category APPENDIX 2 Catch‐up  $7,346,653 6% Keep‐up $60,442,962 49% New‐IR Funded  $8,046,264 7% New‐Outside Funded  $27,844,923  23% Salaries and Benefits  (unallocated) $18,868,784 15% Catch‐up Keep‐up New‐IR Funded New‐Outside Funded Salaries and Benefits (unallocated) Proposed FY2014‐18 by IBRC Category APPENDIX 2 Proposed FY 2014‐2018 CIP by Category $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Buildings and Facilities Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Parks and Open Space Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Streets and Sidewalks Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Traffic and Transportation Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Buildings and Facilities Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Parks and Open Space Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Streets and Sidewalks Nonrecurring Recurring $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Traffic and Transportation Nonrecurring Recurring APPENDIX 2 Proposed FY2014‐2018  CIP by IBRC Recommendation $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Buildings and Facilities New‐ IR Funded Keep‐up Catch‐up $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Parks and Open Space New‐ Outside Funded New‐ IR Funded Keep‐up Catch‐up $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Streets and Sidewalks New‐ Outside Funded New‐ IR Funded Keep‐up Catch‐up $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 FY2014 FY2015 FY2016 FY2017 FY2018 Traffic and Transportation New‐ Outside Funded New‐ IR Funded Keep‐up Catch‐up APPENDIX 2 $27,435,262 $30,773,819 $18,312,874 $18,774,757 $19,267,036 $33,427,070 $31,112,929 $21,998,820 $17,098,619 $20,095,558 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Sources Uses APPENDIX 2 $17,751,355 $11,759,547 $11,420,437 $7,734,491 $9,410,630 $8,582,108 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected IR Balance APPENDIX 2 Buildings & Facilities Land & Land Improvements Miscellaneous Non- Infrastructure Management Plan Parks & Open Space Streets & Sidewalks Totals By Year FY 2009 10,082 2,503 110 440 1,733 6,227 21,095 FY 2010 9,312 2,353 291 7 3,460 5,855 21,278 FY 2011 20,250 98 211 889 1,731 7,422 30,601 FY 2012 23,868 17 228 31 1,113 6,977 32,235 FY 2013 YTD 8,542 0 145 1 521 4,633 13,842 Totals 72,054 4,971 985 1,368 8,558 31,114 119,051 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 General Fund Capital Improvement Program Expenditures Summarized by Project Category for Five Years: Fiscal Years 2009-2013 ($ in thousands) APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s FO-10000 45 Fiber Optics Customer Connections Utilities Y Commercial Telecommunications No Enterprise Fund Fiber Optics Fund Business & Economics Growth B-3 B-13 B-4 UAC, ARB Categorically Exempt Screening of pad-mount equipment will be included. This project may be subject to ARB review. $1,000,000 Technology and the Connected City FO-10001 47 Fiber Optics Network System Improvements Utilities Y Commercial Telecommunications No Enterprise Fund Fiber Optics Fund Business & Economics Growth B-3 B-13 B-4 UAC, PTC Categorically Exempt Screening of pad-mounted equipment will be included. $1,000,000 Technology and the Connected City OS-09001 60 Off-Road Pathway Resurfacing and Repair Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PTC Categorically Exempt This project may require Site and Design Review. 5 20 20 10 5 60 $500,000 Infrastructure Strategy and Funding PE-09003 13 City Facility Parking Lot Maintenance Public Works Y Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PTC Various location Categorically Exempt This project may require Site and Design Review. 0 15 20 10 5 50 $1,065,422 Infrastructure Strategy and Funding PE-86070 91 Street Maintenance Public Works Y Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PTC Various locations Categorically Exempt This project will make reasonable efforts to match existing pavement. 5 20 20 20 10 75 $26,472,281 $9,283,463 Infrastructure Strategy and Funding California Avenue Area PF-00006 36 Roofing Replacement Public Works Y Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 HRB, ARB Citywide Categorically Exempt This project may be subject to ARB and HRB review. 0 20 20 5 5 50 $223,111 Infrastructure Strategy and Funding PF-01003 11 Building Systems Improvements Public Works Y Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB, HRB Citywide This project may require Mitigated Negative This project may be subject to ARB and HRB 0 15 20 5 5 45 $412,440 Infrastructure Strategy and Funding PF-02022 20 Facility Interior Finishes Replacement Public Works Y Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 HRB Citywide Categorically Exempt This project may require design review for historic structures. 0 15 20 10 5 50 $827,440 Infrastructure Strategy and Funding PF-93009 3 Americans with Disabilities Act Compliance Public Works Y Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Access C-5 C-32 C-27 ARB, HRB Citywide This project may require mitigated negative declaration if Historic Building This project may be subject to ARB and HRB review. 20 15 15 10 10 70 $538,277 Infrastructure Strategy and Funding PG-06001 76 Tennis and Basketball Court Resurfacing Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 PRC Various City parks and facilities Categorically Exempt None 0 15 20 20 5 60 $1,075,000 Infrastructure Strategy and Funding Page 1 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s PG-06003 43 Benches, Signage, Fencing, Walkways, and Perimeter Landscaping Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-26 Categorically Exempt This project may require ARB or PRC review. 10 15 20 5 5 55 $750,000 Infrastructure Strategy and Funding Downtown Area PG-09002 64 Park and Open Space Emergency Repairs Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PTC, ARB Categorically Exempt This project may be subject to ARB review. This project may require Site and Design Review. 5 25 20 10 5 65 $375,000 Infrastructure Strategy and Funding PO-89003 85 Sidewalk Repairs Public Works Y Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-21 None Ventura Avenue, southern City limits, Alma St, and El Camino Real Categorically Exempt None 10 20 15 20 10 75 $9,985,553 Infrastructure Strategy and Funding California Avenue Area TE-10001 7 Utilities Customer Billing System Continuous Improvements Utilities Y Technology No Internal Service Fund Technology Fund Community Services & Facilities Customer Service C-2 C-10 C-12 PTC Categorically Exempt None $1,250,000 Technology and the Connected City TE-99010 2 Acquisition of New Computers Information Technology Y Technology No Internal Service Fund Technology Fund Community Services & Facilities Customer Service C-2 None Categorically Exempt None $375,000 Technology and the Connected City AC-14000 5 Art Center Auditorium Audio, Visual, and Furnishings Community Services N New Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Art Center Auditorium Categorically Exempt None Required 0 0 20 20 5 45 $150,000 Infrastructure Strategy and Funding AC-14001 10 Baylands Nature Interpretive Center Exhibit Improvements Community Services N New Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 ARB Baylands Nature Interpretive Center Categorically Exempt Design Review 0 0 20 15 5 40 $56,000 Infrastructure Strategy and Funding PD-14000 26 Internal Alarm System Replacement Fire N New Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Efficient Service Delivery C-1 C-24 C-19 None None 0 25 20 20 0 65 $78,000 Technology and the Connected City PE-08001 70 Rinconada Park Improvements Public Works N New Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PRC, PAC, ARB 777 Embarcadero Road Categorically Exempt Review by PAC and ARB may be required. 0 20 20 15 5 60 $4,124,233 Infrastructure Strategy and Funding PE-12017 15 City Hall First Floor Renovations Public Works N New Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB 25 Hamilton Avenue Categorically Exempt The exterior signage/way finding elements of the project may be subject to review by the Architectural Review Board. 0 0 20 20 0 40 $900,000 Infrastructure Strategy and Funding Page 2 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s PE-13005 50 City Hall/King Plaza Landscape Public Works N Keep- up Parks and Open Space Yes General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-26 ARB, PAC 250 Hamilton Avenue Categorically Exempt This project may require ARB and PAC review. 0 10 20 5 0 35 $124,041 Infrastructure Strategy and Funding Downtown Area PE-13008 45 Bowden Park Improvements Public Works N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PRC 2380 High St Categorically Exempt This project may require ARB or PRC review 0 20 20 5 5 50 $199,041 Infrastructure Strategy and Funding California Avenue Area PE-14012 27 Junior Museum & Zoo Improvements Public Works N Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Customer Service C-2 C-9 C-18 Land Use and Community Design Civic Uses L-8 PRC and PC 1451 Middlefield Road Categorically Exempt none 15 15 20 5 5 60 $1,175,000 Infrastructure Strategy and Funding PE-14015 29 Lucie Stern Buildings Mechanical/Elec trical Upgrades Public Works N Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 ARB, HRB 1305 Middlefield Rd Categorically Exempt This project may be subject to ARB and HRB review. 5 20 20 10 5 60 $2,791,964 Infrastructure Strategy and Funding PE-14018 8 Baylands Interpretive Center Improvements and Boardwalk Repair Public Works N Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 ARB, PRC, HRB Permitting from various agencies (Fish and Game, Army Corp, BCDC) will require a year prior to construction for full approval. This project may required ARB, PRC, HRB 15 25 20 10 5 75 $2,381,445 Infrastructure Strategy and Funding PE-15005 17 Cubberley Mechanical and Electrical Upgrades Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 ARB Cubberley Community Center Categorically Exempt Exterior modification may require ARB review. 0 10 20 0 5 35 $1,450,000 Infrastructure Strategy and Funding PE-15011 38 Ventura Buildings Improvements Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB 3990 Ventura Circle Categorically Exempt This project may be subject to ARB review. 0 15 20 5 5 45 $690,000 Infrastructure Strategy and Funding PE-18010 59 Mitchell Park Improvements Public Works N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 none 600 East Meadow Drive Categorically Exempt none 0 15 20 5 5 45 $386,000 Infrastructure Strategy and Funding PE-18012 55 Hoover Park Improvements Public Works N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-1 C-4 C-24 ARB,PRC 2901 Cowper Street Categorically Exempt This project may be subject to ARB, PRC review 0 10 20 5 5 40 $490,000 Infrastructure Strategy and Funding PE-18015 72 Robles Park Improvements Public Works N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-1 C-24 none 4116 Park Blvd Categorically Exempt none 0 15 20 5 5 45 $325,000 Infrastructure Strategy and Funding PF-05002 32 Municipal Service Center Improvements Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB, PTC 3201 East Bayshore Road Categorically Exempt Exterior changes of this project are subject to ARB review. 5 10 20 20 5 60 $891,000 Infrastructure Strategy and Funding Page 3 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s PF-07002 7 Baylands Interpretive Center Improvement Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 PTC, ARB, PRC 2775 Embarcadero Road Project may require environmental review. This project may be subject to ARB review. This project may require Site and Design Review. 5 20 20 15 15 75 $267,000 Infrastructure Strategy and Funding PF-14000 19 Cubberley Roof Replacements Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 HRB, ARB 4000 Middlefield Road Categorically Exempt This project may be subject to ARB and HRB review. 0 10 20 0 5 35 $1,503,931 Infrastructure Strategy and Funding PF-14002 24 Fire Station 1 Improvements Public Works N New Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Efficient Service Delivery C-4 C-24 C-19 301 Alma Street None Required None Required 0 10 20 0 5 35 $280,377 Infrastructure Strategy and Funding Downtown Area PF-15000 34 Rinconada Pool Locker Room Public Works N Catch- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 Community Services & Facilities Access C-5 C-32 C-27 777 Embarcadero Road Categorically Exempt None 15 15 20 20 5 75 $400,000 Infrastructure Strategy and Funding PF-17000 31 MSC Building A, B, & C Roofing Replacement Public Works N Keep- up Buildings and Facilities No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB, HRB Municipal Service Center Categorically Exempt This project may be subject to ARB and HRB review. 0 20 20 5 5 50 $1,100,000 Infrastructure Strategy and Funding PG-13001 74 Stanford/Palo Alto Soccer Turf Replacement Community Services N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 ARB Categorically Exempt This project may require ARB review. 0 20 20 20 5 65 $1,395,000 Infrastructure Strategy and Funding PG-14000 69 Ramos Park Improvements Community Services N Catch- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Parks & Rec Commiss ion Ramos Park Categorically Exempt None Required 15 20 20 15 5 75 $175,000 Infrastructure Strategy and Funding PG-14001 68 Peers Park Improvements Community Services N Catch- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Parks and Rec Commiss ion Peers Park Categorically Exempt None Required 5 20 20 15 5 65 $205,000 Infrastructure Strategy and Funding California Avenue Area PG-14002 49 Cameron Park Improvements Community Services N Catch- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Parks and Rec Commiss ion Cameron Park Categorically Exempt None Required 15 20 20 15 5 75 $124,000 Infrastructure Strategy and Funding California Avenue Area PG-14003 73 Seale Park Improvements Community Services N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Parks and Rec Commiss ion Seale Park Categorically Exempt None Required 15 20 20 15 5 75 $121,000 Infrastructure Strategy and Funding PG-18000 52 Golf Course Driving Range Net and Artificial Turf Replacement Community Services N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Palo Alto Municipal Golf Course Categorically Exempt This is a replacement project with like materials. 0 15 20 20 0 55 $770,000 Infrastructure Strategy and Funding TE-05000 5 Radio Infrastructure Replacement Police N Technology No Internal Service Fund Technology Fund Community Services & Facilities Customer Service C-2 C-9 Possibly ARB review Categorically Exempt None $400,000 Technology and the Connected City TE-14002 3 Library Virtual Branch Library N Technology No Internal Service Fund Technology Fund Community Services & Facilities Efficient Service Delivery C-1 LAC Categorically Exempt $195,000 Technology and the Connected City Page 4 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s VR-14002 12 MSC Fuel Station Demolition Public Works N Miscellaneous No Internal Service Fund Vehicle Replacement Fund Community Services & Facilities Parks & Public Facilities C-4 C-24 3201 East Bayshore Road CEQA Initial Study Checklist to be prepared. Hazardous material storage closure $240,000 Infrastructure Strategy and Funding WQ-04011 14 Facility Condition Assessment & Retrofit Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 2501 Embarcadero Way, Palo Alto, CA 94303 Categorically Exempt Possible exemption from Design Review. $5,128,500 Infrastructure Strategy and Funding WQ-80021 22 Plant Equipment Replacement Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 None 2501 Embarcadero Way, Palo Alto, CA 94303 Categorically Exempt Possible exemption from Design Review. $9,013,500 Infrastructure Strategy and Funding WS-13006 79 Water Meter Shop Renovations Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Community Services & Facilities Parks & Public Facilities C-4 C-24 C-19 Categorically Exempt $200,000 Infrastructure Strategy and Funding EL-02011 11 Electric Utility GIS Utilities Y Distribution System - System Improvements No Enterprise Fund Electric Fund Governance Public Participation G-1 G-3 Transportation Reducing Auto Use T-1 T-3 T-10 UAC This is not a project under CEQA. None Required $885,000 Technology and the Connected City EL-02010 30 SCADA System Upgrades Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Governance Public Participation G-1 G-3 Transportation Housing Opportunites T-1 T-10 UAC Categorically Exempt This project may have possible exemption from Design Review. $455,000 Technology and the Connected City AC-86017 41 Art in Public Places Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Land Use and Community Design Public Ways L-9 L-72 ARB, PAC Categorically Exempt Location and installation of Public Art may be subject to review by PAC and ARB. 10 15 15 5 15 60 $250,000 Infrastructure Strategy and Funding Downtown Area EL-89031 4 Communications System Improvements Utilities Y General Services - Communications No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. $400,000 Technology and the Connected City EL-89038 37 Substation Protection Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-81 UAC Categorically Exempt Possible exemption from Design Review. $1,445,000 Infrastructure Strategy and Funding PO-05054 89 Street Lights Improvements Public Works Y Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Land Use and Community Design Public Ways L-9 L-66 ARB Citywide Categorically Exempt This project may be subject to ARB review. 5 20 20 20 5 70 $1,180,000 Infrastructure Strategy and Funding PO-11000 87 Sign Reflectivity Upgrade Public Works Y Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Land Use and Community Design Design of Buildings Public Places L-6 L-50 Land Use and Community Design Public Ways L-9 L-79 Citywide Categorically Exempt None 12 15 15 15 5 62 $291,385 Infrastructure Strategy and Funding PO-11001 97 Thermoplastic Marking and Striping Public Works Y Keep- up Streets and Sidewalks No General Fund Street Improvement Fund Land Use and Community Design Public Ways L-9 L-66 Citywide Categorically Exempt None 12 20 15 15 5 67 $421,509 Infrastructure Strategy and Funding PO-12001 79 Curb and Gutter Repairs Public Works Y Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Land Use and Community Design Residential Neighborhoods L-3 L-17 none Various location Categorically Exempt City Arborist will be consulted for tree root protection. 5 20 15 20 10 70 $1,061,929 Infrastructure Strategy and Funding Downtown Area Page 5 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s EL-04010 13 Foothills System Rebuild Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, ARB Categorically Exempt Screening of equipment will be included in the design. CIP Design Consultant will be consulted when new above-ground equipment is located. Design Review required. $75,000 Infrastructure Strategy and Funding EL-08001 39 UG District 42 - Embarcadero Rd. (Between Emerson & Middlefield) Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 L-80, L- 81 UAC, ARB Categorically Exempt Screening of pad-mounted equipment will be included. This project may be subject to ARB review.Design Review required. $2,300,000 Infrastructure Strategy and Funding EL-11009 41 UG District 43 - Alma/Embarcad ero Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 L-80, L- 81 UAC, ARB Possible exemption. Pad-mounted equipment will be screened. This project may be subject to ARB review. $2,650,000 Infrastructure Strategy and Funding EL-12000 20 Rebuild UG District 12 Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 L-81 Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $450,000 Infrastructure Strategy and Funding EL-13002 27 Relocate Quarry Road/Hopkins Substations 60 kV Line (Lane A & B) Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Land Use and Community Design Public Ways L-9 L-79 UAC, ARB Categorically Exempt This project may be subject to ARB review. $850,000 Infrastructure Strategy and Funding Page 6 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s PE-13012 95 Structural Assessment of City Bridges Public Works N Keep- up Streets and Sidewalks No General Fund Infrastructure Reserve Land Use and Community Design Public Ways L-1 L-79 Transportation Bicycling and Walking T-2 t-14 ARB, PTC Various location throughout the City Categorically Exempt This project is coordinated with the street resurfacing program and the Palo Alto Bicycle Master Plan. 0 15 20 20 5 60 $185,394 Infrastructure Strategy and Funding PE-13014 93 Streetlight Condition Assessment Public Works N New Streets and Sidewalks No General Fund Infrastructure Reserve Land Use and Community Design Public Ways L-8 L-79 ARB, PTC Various location through out the City Categorically Exempt This project may be subject to ARB review 10 0 15 0 5 30 $220,078 Infrastructure Strategy and Funding PE-14010 57 LATP Site Development Preparation and Security Improvements Public Works N New Parks and Open Space No General Fund Infrastructure Reserve Land Use and Community Design Local Landuse and Growth Management L-1 L-1 TBD 1237 San Antonio Rd. CEQA will be completed as part of this project Consultant services will be required 0 25 20 10 5 60 $1,668,782 Infrastructure Strategy and Funding EL-13007 43 Underground Distribution System Security Utilities Y Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Community Services & Facilities Parks & Public Faciliites C-4 C-24 UAC, ARB Categorically Exempt This project may be subject to ARB review. $600,000 Infrastructure Strategy and Funding EL-89028 7 Electric Customer Connections Utilities Y Distribution System - Customer Design and Connection Services No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, PTC Categorically Exempt Pad-mounted equipment will be screened. $12,000,000 Infrastructure Strategy and Funding EL-89044 36 Substation Facility Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt This project may be subject to ARB review. $945,000 Infrastructure Strategy and Funding EL-98003 9 Electric System Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $12,500,000 Infrastructure Strategy and Funding GS-02013 51 Directional Boring Machine Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC None Required None Required $303,850 Infrastructure Strategy and Funding GS-03007 49 Directional Boring Equipment Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC, PTC Categorically Exempt None Required $138,040 Infrastructure Strategy and Funding GS-03008 69 Polyethylene Fusion Equipment Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC None Required None Required $73,283 Infrastructure Strategy and Funding GS-03009 72 System Extensions - Unreimbursed Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC, PTC Categorically Exempt None Required $957,130 Infrastructure Strategy and Funding GS-11002 58 Gas System Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $1,140,254 Infrastructure Strategy and Funding Page 7 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s GS-13002 60 General Shop Equipment/Tool s Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 Housing Housing Opportunites H-5 H-25 UAC None None $106,000 Infrastructure Strategy and Funding GS-80017 56 Gas System Extensions Utilities Y Distribution System - Customer Design and Connection Services No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Categorically Exempt This project will be coordinated with Public Works Department. $3,919,960 Infrastructure Strategy and Funding GS-80019 54 Gas Meters and Regulators Utilities Y Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Categorically Exempt None $1,747,225 Infrastructure Strategy and Funding OS-00001 62 Open Space Trails and Amenities Community Services Y Keep- up Parks and Open Space No General Fund Infrastructure Reserve Natural Environment Open Space N-1 N-1 PRC Categorically Exempt None 15 20 15 15 10 75 $864,000 Infrastructure Strategy and Funding SD-06101 10 Storm Drain System Replacement and Rehabilitation Public Works Y Collection System - System Improvements No Enterprise Fund Storm Drainage Fund Natural Environment Water Resources N-4 N-24 N-36 SDOC Various location Categorically Exempt This project is coordinated with street resurfacing program. $2,366,387 Infrastructure Strategy and Funding VR-14001 10 Emergency Repair and Replacement Program Public Works Y Miscellaneous No Internal Service Fund Vehicle Replacement Fund Natural Environment Air Quality N-5 N-26 N-41 3201 East Bayshore Road Categorically Exempt None $100,000 Infrastructure Strategy and Funding WC-13002 101 Fusion and General Equipment/Tool s Utilities Y Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18, N-25 UAC None None $104,500 Infrastructure Strategy and Funding WC-15002 107 Wastewater System Improvements Utilities Y Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18, N-25 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $1,160,000 Infrastructure Strategy and Funding WC-80020 105 Sewer System Extensions Utilities Y Collection System - Customer Design and Connection Services No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18, N-25 Land Use and Community Design Local Landuse and Growth Management L-1 UAC Categorically Exempt The trenching work of this project will be coordinated with Public Works Department. $1,915,000 Infrastructure Strategy and Funding WC-99013 103 Sewer Lateral/Manhole Rehab/Replace ment Utilities Y Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18, N-25 Land Use and Community Design Local Landuse and Growth Management L-1 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $500,000 Infrastructure Strategy and Funding WS-11003 78 Water Distribution System Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $1,161,000 Infrastructure Strategy and Funding Page 8 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s WS-11004 87 Water System Supply Improvements Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $1,161,000 Infrastructure Strategy and Funding WS-13002 75 Fusion and General Equipment/Tool s Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC None.None. $109,180 Infrastructure Strategy and Funding WS-80013 85 Water System Extensions Utilities Y Distribution System - Customer Design and Connection Services No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt None $2,309,000 Infrastructure Strategy and Funding WS-80014 83 Water Service Hydrant Replacement Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt Screening may be required on above-grade equipment. This project may be subject to ARB review. $1,221,480 Infrastructure Strategy and Funding WS-80015 81 Water Meters Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt None $1,965,452 Infrastructure Strategy and Funding EL-04012 44 Utility Site Security Improvements Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-40 Categorically Exempt None Required $500,000 Infrastructure Strategy and Funding EL-09000 18 Middlefield Underground Rebuild Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $200,000 Infrastructure Strategy and Funding EL-10009 34 Street Light System Conversion Project Utilities N General Services - Street Lights No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Transportation Traffic Safety T-6 T-39 ARB, HRB Categorically Exempt This project may be subject to ARB and HRB review. $500,000 Infrastructure Strategy and Funding EL-11006 23 Rebuild UG District 18 Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $200,000 Infrastructure Strategy and Funding Page 9 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s EL-12001 42 UG District 46 - Charleston/El Camino Real Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Screening of pad-mounted equipment will be included. This project may be subject to ARB review. $950,000 Infrastructure Strategy and Funding EL-13000 6 Edgewood / Wildwood 4 kV Tie Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $450,000 Infrastructure Strategy and Funding EL-13003 22 Rebuild UG District 16 Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $300,000 Infrastructure Strategy and Funding EL-13004 15 Hansen Way / Hanover 12kV Ties Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $200,000 Infrastructure Strategy and Funding EL-13006 28 Sand Hill / Quarry 12kV Tie Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Community Services & Facilities Parks & Public Faciliites C-4 C-24 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $200,000 Infrastructure Strategy and Funding EL-14000 3 Coleridge/Cowp er/Tennyson 4/12 kV Conversion Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC, ARB Categorically Exempt This project will have pad- mounted equipment screened. This project may be subject to ARB review. $520,000 Infrastructure Strategy and Funding Page 10 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s EL-14002 25 Rebuild UG District 20 Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Land Use and Community Design Public Ways L-9 L-79 L-81 UAC, ARB Categorically Exempt Pad-mounted equipment will be screened. This project may be subject to ARB review. $1,000,000 Infrastructure Strategy and Funding EL-14004 17 Maybell 1&2 4/12kV Conversion Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 Categorically Exempt None $450,000 Infrastructure Strategy and Funding EL-14005 26 Reconfigure Quarry Feeders Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Natural Environment Energy N-9 N-44 UAC Categorically Exempt None $450,000 Infrastructure Strategy and Funding FD-14002 22 Fire Ringdown System Replacement Fire N New Buildings and Facilities No General Fund Infrastructure Reserve Natural Environment Natural Hazards N-10 N-53 Categorically Exempt 0 0 20 20 15 55 $157,500 Technology and the Connected City GS-12001 61 GMR - Project 22 Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Various Streets in Palo Alto Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,668,000 Infrastructure Strategy and Funding GS-13001 #N/A GMR - Project 23 Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Various Streets in Palo Alto Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,782,000 Infrastructure Strategy and Funding GS-14003 63 GMR - Project 24 Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Various Streets in Palo Alto Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $3,957,000 Infrastructure Strategy and Funding GS-14004 53 Gas Distribution System Model Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC None None $150,000 Technology and the Connected City GS-15000 67 GMR - Project 25 Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC Various Streets in Palo Alto Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $542,000 Infrastructure Strategy and Funding GS-15001 71 Security at City Gas Receiving Stations Utilities N Distribution System - System Improvements No Enterprise Fund Gas Fund Natural Environment Energy N-9 N-44 UAC None None $150,000 Infrastructure Strategy and Funding PE-13003 66 Parks Master Plan Public Works N Keep- up Parks and Open Space No General Fund Infrastructure Reserve Natural Environment Open Space N-1 N-1 PRC Various location Categorically Exempt This project may be subject to PRC review 0 5 15 15 10 45 $155,677 Infrastructure Strategy and Funding Page 11 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s PE-13017 81 El Camino Median Landscape Improvements Public Works N Catch- up Streets and Sidewalks Yes General Fund Infrastructure Reserve Natural Environment Open Space N-1 N-1 N-2 ARB This project may require environmental review. Caltrans review may be required 0 5 20 0 5 30 $1,102,445 Infrastructure Strategy and Funding California Avenue Area PE-13020 47 Byxbee Park Trails Public Works N New Parks and Open Space No General Fund Infrastructure Reserve Natural Environment Open Space N-1 N-1 N-2 PRC Baylands Categorically Exempt This project may require PRC review. 10 5 20 5 5 45 $89,233 Infrastructure Strategy and Funding PG-13003 53 Golf Course Reconfiguration and Baylands Athletic Center Improvements Public Works N New Parks and Open Space No General Fund Infrastructure Reserve Natural Environment Open Space N-1 N-1 N-2 ARB, PTC, PRC 1875 Embarcadero Road An Environmental Impact Report is being prepared for this project during the design phase. Review by ARB, PTC, and PRC may be required 0 0 20 20 15 55 $8,045,505 $8,045,505 Infrastructure Strategy and Funding SD-06104 4 Connect Clara Drive Storm Drains to Matadero Pump Station Public Works N Collection System - System Improvements No Enterprise Fund Storm Drainage Fund Natural Environment Water Resources N-4 N-24 N-36 SDOC Clara Drive (Greer Road to Louis Road) Categorically Exempt This project is coordinated with street resurfacing program. $807,064 Infrastructure Strategy and Funding SD-10101 8 Southgate Neighborhood Storm Drain Improvements Public Works N Collection System - System Improvements No Enterprise Fund Storm Drainage Fund Natural Environment Water Resources N-4 N-24 N-36 Land Use and Community Design Local Landuse and Growth Management L-1 SDOC, ARB Various location in Southgate Neighborhood Categorically Exempt This project is coordinated with the street resurfacing program $222,839 Infrastructure Strategy and Funding SD-11101 2 Channing Avenue/Lincoln Avenue Storm Drain Improvements Public Works N Collection System - System Improvements No Enterprise Fund Storm Drainage Fund Natural Environment Water Resources N-4 N-24 N-36 SDOC Lincoln Avenue (Waverley Street to Alma Street) Categorically Exempt This project is coordinated with street resurfacing program. $1,531,405 Infrastructure Strategy and Funding SD-13002 6 Matadero Creek Storm Water Pump Station and Trunk Lines Improvements Public Works N Collection System - System Improvements No Enterprise Fund Storm Drainage Fund Natural Environment Water Resources N-4 N-24 N-36 SDOC, ARB Various locations in Midtown neighborhood Categorically Exempt This project is coordinated with street resurfacing program. $6,085,387 Infrastructure Strategy and Funding VR-14000 13 Scheduled Vehicle and Equipment Replacements Public Works N Miscellaneous No Internal Service Fund Vehicle Replacement Fund Natural Environment Air Quality N-5 N-26 N-41 3201 East Bayshore Road Categorically Exempt None $2,700,000 Infrastructure Strategy and Funding WC-13001 109 WW Collection Sys. Rehab/Aug. Project 26 Utilities N Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,310,000 Infrastructure Strategy and Funding WC-14001 111 WW Collection Sys. Rehab/Aug. Project 27 Utilities N Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,410,000 Infrastructure Strategy and Funding Page 12 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s WC-15001 113 WW Collection Sys. Rehab/Aug. Project 28 Utilities N Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $3,513,000 Infrastructure Strategy and Funding WC-16001 115 WW Collection Sys. Rehab/Aug. Project 29 Utilities N Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program $3,610,000 Infrastructure Strategy and Funding WC-17001 117 WW Collection Sys. Rehab/Aug. Project 30 Utilities N Collection System - System Improvements No Enterprise Fund Wastewater Collection Fund Natural Environment Water Resources N-4 N-18 UAC Categorically Exempt This project will be coordinated with Public Works Streeet Maintenance Program. $350,000 Infrastructure Strategy and Funding WQ-10001 20 Long Range Facilities Plan Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Natural Environment Water Resources N-4 N-25 ARB, PTC 2501 Embarcadero Way, Palo Alto, CA 94303 This project may require Environmental Impact Report. This project may be subject to ARB review. This project may require Site and Design Review. $40,200 Infrastructure Strategy and Funding WQ-14001 12 Biosolids Facility Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Natural Environment Water Resources N-4 N-25 2501 Embarcadero Way, Palo Alto, CA 94303 CEQA will be required. This project may require Site and Design review. $89,039,000 Infrastructure Strategy and Funding WQ-14002 18 Laboratory and Environmental Services Building Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Natural Environment Water Resources N-4 N-25 Yes 2501 Embarcadero Way, Palo Alto, CA 94303 This project will require Site and Design review. This project is exempt from design review. $2,048,000 Infrastructure Strategy and Funding WQ-14003 23 Primary Sedimentation Tank Rehabilitation Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Natural Environment Water Resources N-4 N-25 Yes 2501 Embarcadero Way, Palo Alto, CA 94303 Categorically Exempt This project may require Site and Design review. $7,313,001 Infrastructure Strategy and Funding WQ-14004 16 Fixed Film Reactor Rehabilitation Public Works N Wastewater Treatment - System Improvements No Enterprise Fund Wastewater Treatment Fund Natural Environment Water Resources N-4 N-25 2501 Embarcadero Way, Palo Alto, CA 94303 Categorically Exempt This project is exempt from design review. $2,290,000 Infrastructure Strategy and Funding WS-11000 89 WMR - Project 25 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-20 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $2,736,906 Infrastructure Strategy and Funding Page 13 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s WS-12001 91 WMR - Project 26 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-20 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,480,000 Infrastructure Strategy and Funding WS-13001 93 WMR - Project 27 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-20 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,409,000 Infrastructure Strategy and Funding WS-14001 95 WMR - Project 28 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-20 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,769,000 Infrastructure Strategy and Funding WS-15002 97 WMR - Project 29 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-19 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $3,884,000 Infrastructure Strategy and Funding WS-16001 99 WMR - Project 30 Utilities N Distribution System - System Improvements No Enterprise Fund Water Fund Natural Environment Water Resources N-4 N-20 UAC Categorically Exempt This project will be coordinated with Public Works Street Maintenance Program. $344,020 Infrastructure Strategy and Funding AS-10000 113 Salaries and Benefits - General Fund CIP Projects Administrative Services Y Salaries No General Fund Infrastructure Reserve Salaries Not Applicab le Not Applicable Not Applicable n/a n/a n/a n/a n/a 0 $18,862,194 PL-00026 106 Safe Routes to School Planning and Community Environment Y Keep- up Traffic and Transportation No General Fund Infrastructure Reserve Transportation Neighborhood Impacts T-5 T-34 Transportation Bicycling and Walking T-3 T-14 T-19 PTC Streets on Suggested Walk and Roll Routes for PAUSD schools This project may require Environmental Assessments.None 10 25 15 15 15 80 $569,536 $500,000 Infrastructure Strategy and Funding PL-04010 99 Bicycle & Pedestrian Transportation Plan - Implementation Project Planning and Community Environment Y New Traffic and Transportation No General Fund Infrastructure Reserve Transportation Bicycling and Walking T-3 T-20 T-29 Land Use and Community Design Local Landuse and Growth Management L-1 PTC & PARC Citywide This project may require an environmental assessment.None 10 25 20 5 15 75 $6,118,009 $6,000,000 Infrastructure Strategy and Funding PL-05030 108 Traffic Signal and ITS Upgrades Planning and Community Environment Y Keep- up Traffic and Transportation No General Fund Infrastructure Reserve Transportation Traffic Safety T-4 T-24 Transportation Traffic Safety T-5 T-34 PTC Various intersections throughout the City. Categorically Exempt This project may be subject to PTC review. 5 25 20 20 0 70 $1,535,589 Infrastructure Strategy and Funding WS-02014 76 W-G-W Utility GIS Data Utilities Y Distribution System - System Improvements No Enterprise Fund Water Fund Transportation Reducing Auto Use T-1 T-2 T-10 UAC Categorically Exempt None $1,375,000 Technology and the Connected City Page 14 APPENDIX 2 Pro j e c t I D Pa g e N u m b e r Na m e De p t . Re c u r r i n g IBR C Ca t e g o r y Art Fu n d S o u r c e Fu n d i n g Pri m a r y C P E l e m e n t Pri m a r y C P S e c t i o n Pri m a r y C P G o a l Pri m a r y C P P o l i c y Pri m a r y C P P r o g r a m Sec o n d a r y C P E l e m e n t Se c o n d a r y C P S e c t i o n Sec o n d a r y C P G o a l Se c o n d a r y C P P o l i c y Se c o n d a r y C P P r o g r a m Po t e n t i a l C o m m i t t e e R e v i e w Pro j e c t L o c a t i o n En v i r o n m e n t a l I m p a c t De s i g n R e v i e w Le g a l M a n d a t e ( 2 0 p t s ) He a l t h a n d S a f e t y ( 2 5 p t s ) Fa c i l i t i e s / I n f r a s t r ( 2 0 p t s ) Cit y O p s / S e r v i c e D e l i v e r y ( 2 0 p t s ) Co u n c i l V i s i o n ( 1 5 p t s ) To t a l S c o r e To t a l B u d g e t Gra n t s / R e i m b u r s e m e n t s / B o n d s Cit y C o u n c i l P r i o r i t i e s EL-11014 32 Smart Grid Technology Installation Utilities N Distribution System - System Improvements No Enterprise Fund Electric Fund Transportation Reducing Auto Use T-1 T-3 Natural Environment Energy N-9 N-44 This project may have possible exemption from environmental review. This project may have possible exemption from Design review. $10,500,000 Technology and the Connected City PE-11011 103 Highway 101 Pedestrian/Bicyc le Overpass Project (formerly PL- 11000) Public Works N New Traffic and Transportation Yes General Fund Infrastructure Reserve Transportation Bicycling and Walking T-3 T-14 ARB, PRC, PTC This project may require Environmental Assessment. This project may require ARB review 10 25 20 20 10 85 $9,586,168 $9,586,168 Infrastructure Strategy and Funding PE-12011 83 Newell Road/San Francisquito Creek Bridge Replacement Public Works N New Streets and Sidewalks Yes General Fund Infrastructure Reserve Transportation Bicycling and Walking T-3 T-14, T- 25 Land Use and Community Design Public Ways L-1 L-72 ARB,PTC ,SFCJPA, CEPA, PAC Newell Rd at SF Creek The project is subject to environmental assessment compliant with both the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) This project is coordinated with the street resurfacing program and the Palo Alto Bicycle Master Plan. 20 25 20 0 10 75 $2,500,000 $2,213,250 Infrastructure Strategy and Funding PL-12000 110 Transportation and Parking Improvements Planning and Community Environment N Keep- up Traffic and Transportation No General Fund Infrastructure Reserve Transportation Traffic Safety T-4 T-24 Transportation Traffic Safety T-4 T-25 PTC Various locations throughout City. This project may require an environmental assessment. This project may be subject to PTC review. 20 20 20 20 5 85 $1,273,205 $1,125,000 Infrastructure Strategy and Funding Downtown Area PL-14000 101 El Camino Real & Churchill Avenue Intersection Improvements - Design Planning and Community Environment N New Traffic and Transportation No General Fund Infrastructure Reserve Transportation Traffic Safety T-4 T-24 Transportation Traffic Safety T-4 T-33 PTC El Camino Real & Churchill Avenue This project provides for the design phase of future capital improvements, environmental assessment of the project will be included in the design phase. The project maybe subject to PTC and ARB review. 0 25 20 0 15 60 $283,651 Infrastructure Strategy and Funding PL-14001 104 Matadero Creek Trail Planning and Community Environment N New Traffic and Transportation No General Fund Infrastructure Reserve Transportation Bicycling and Walking T-3 T-14 Transportation Bicycling and Walking T-3 T-20 PTC, PRC, ARB This project may require an environmental assessment. This project may be subject to PTC, PRC, and ARB review. 20 25 20 5 15 85 $2,533,651 $2,000,000 Infrastructure Strategy and Funding Page 15 APPENDIX 2 1 ATTACHMENT E List of most cited Comprehensive Plan Goals, Policies and Programs. COMMUNITY SERVICES AND FACILITIES ELEMENT EFFICIENT SERVICE DELIVERY GOAL C-4: Attractive, Well-maintained Community Facilities That Serve Palo Alto Residents. CUSTOMER SERVICE POLICY C-9: Deliver City services in a manner that creates and reinforces positive relationships among City employees, residents, businesses, and other stakeholders. PARKS AND PUBLIC FACILITIES POLICY C-24: Reinvest in aging facilities to improve their usefulness and appearance. Avoid deferred maintenance of City infrastructure. PROGRAM C-19: Develop improvement plans for the maintenance, restoration and enhancement of community facilities, and keep these facilities viable community assets by investing the necessary resources. NATURAL ENVIRONMENT ELEMENT OPEN SPACE POLICY N-1: Manage existing public open space areas and encourage the management of private open space areas in a manner that meets habitat protection goals, public safety concerns, and low impact recreation needs. PROGRAM N-2: Examine and improve management practices for natural habitat and open space areas, including the provision of access to open space for City vehicles and equipment, to ensure that natural resources are protected. GOAL N-4: Water Resources that are Prudently Managed to Sustain Plant and Animal Life, Support Urban Activities, and Protect Public Health and Safety. WATER RESOURCES POLICY N-18: Protect Palo Alto’s groundwater from the adverse impacts of urban uses. POLICY N-19: Secure a reliable, long-term supply of water for Palo Alto. APPENDIX 2 2 POLICY N-20: Maximize the conservation and efficient use of water in new and existing residences, businesses and industries. POLICY N-24: Improve storm drainage performance by constructing new system improvements where necessary and replacing undersized or otherwise inadequate lines with larger lines or parallel lines. PROGRAM N-36: Complete improvements to the storm drainage system consistent with the priorities outlined in the City's 1993 Storm Drainage Master Plan, provided that an appropriate funding mechanism is identified and approved by the City Council. POLICY N-25: Reduce pollutant levels in City wastewater discharges. AIR QUALITY POLICY N-26: Support regional, state, and federal programs that improve air quality in the Bay Area. ENERGY PROGRAM N-41: Reduce emission of particulates from wood burning stoves, construction activity, automobiles, and other sources. POLICY N-44 Maintain Palo Alto’s long-term supply of electricity and natural gas while addressing environmental and economic concerns. TRANSPORTATION ELEMENT GOAL-T-3 Facilities, Services, and Programs that Encourage and Promote Walking and Bicycling BICYCLING AND WALKING POLICY T-14: Improve pedestrian and bicycle access to and between local destinations, including public facilities, schools, parks, open space, employment districts, shopping centers, and multi-modal transit stations. PROGRAM T-19 Develop, periodically update, and implement street, bicycle, and pedestrian facilities programs that identify and prioritize critical pedestrian and bicycle links to parks, schools, retail centers, and civic facilities. PROGRAM T-21 Study projects to depress bikeways and pedestrian walkways under Alma Street and the CalTrain tracks and implement if feasible. APPENDIX 2 3 ROADWAYS POLICY T-24: Maintain a hierarchy of streets that includes freeways, expressways, arterials, residential arterials, collectors, and local streets. LANDUSE AND COMMUNITY DESIGN ELEMENT GOAL-L-9 Attractive, Inviting Public Spaces and Streets that Enhance the Image and Character of the City. POLICY L-79: Design public infrastructure, including paving, signs, utility structures, parking garages and parking lots to meet high quality urban design standards. Look for opportunities to use art and artists in the design of public infrastructure. Remove or mitigate elements of existing infrastructure that are unsightly or visually disruptive. PROGRAM L-80: Continue the citywide undergrounding of utility wires. Minimize the impacts of undergrounding on street tree root systems and planting areas. PROGRAM L-81: Encourage the use of compact and well-designed utility elements, such as transformers, switching devices, and back flow preventers. Place these elements in locations that will minimize their visual intrusion. APPENDIX 2 APPENDIX 2 ATTACHMENT F PROPOSED CAPITAL IMPROVEMENT PROGRAM 2014-2018 Hard copies provided to Planning & Transportation Commission, Libraries, and Development Services Center To view online, go to https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=34026 APPENDIX 2 City of Palo Alto Page 1 Planning and Transportation Commission 1 Verbatim Minutes 2 April 24, 2013 3 DRAFT 4 EXCERPT 5 6 Capital Improvement Program Plan FY 2014-18: Review of the 2014-2018 proposed 7 Capital Improvement Programs for Comprehensive Plan Compliance. 8 9 Chair Martinez: Anything else on that? Ok. We are going to go to our first item and that’s the 10 Planning Commission review of the Capital Improvement Program (CIP) rough report and I’ve 11 asked Commissioner Panelli to introduce this item for us. 12 13 Commissioner Panelli: Thank you Mr. Chair. I’ll provide you with a little bit of history, brief 14 history on how I got involved in this. Close to the end of last year our esteemed Chairman 15 asked me to join this CIP committee, subcommittee and I obliged and thought it was a great 16 way to sort of segue way some of my experience on the Infrastructure Commission. Soon 17 thereafter Commissioner Tuma became former Commissioner Tuma and I found myself as the 18 senior member of the CIP subcommittee after only one meeting. So it turned out to be a little 19 bit of a trial by fire or throw me in the deep end and see if I can swim. I think I was able to 20 keep my nose above water and breathe for a little while, but it’s been, I’ve enjoyed it. I’ve 21 enjoyed the work. 22 23 I really want to commend staff for what I consider a job well done. The final product is 24 extremely good and I’m really pleased to see the level of coordination and cooperation between 25 three different departments in Planning, Public Works, and Finance. And I think what we came 26 up with is much better than what we started with. So really well, job well done. 27 28 Since I didn’t have a whole lot of history I built off of most of what Commissioner Tuma had 29 started, which is really about focusing the efforts of the Planning and Transportation 30 subcommittee on ending up with a work product that both communicates what we’re trying to 31 accomplish well, not only with Commissioners on this Commission and other commissions, but 32 also the public at large. But also have a product that actually can be used internally and isn’t 33 just a product for external communication and I think we were able to do that. Further, we 34 spent a lot of time focusing on ways to establish and communicate the linkages between 35 projects and the goals and objectives outlined in the Comprehensive Plan to make it really clear, 36 to be able to show for this year and going forward that the CIP does advance what we’re trying 37 to accomplish or what we laid out in the Comprehensive Plan. 38 39 I’m going to now turn it over to staff to go more in depth and I think we’re going to go Finance, 40 Public Works, Planning? Is that it? But one of the things I’d like to ask from our, my esteemed 41 colleagues as I, I’ll phase it as a strong suggestion is that we spend as much time as possible 42 on the CIP in relationship to Comp Plan objectives. Staff is going to be spending a lot of time 43 with a number of other commissions talking about things like the dollars and such. And so I 44 think where, and if we spend a little bit of time looking at the agenda, we’re being asked, we’re 45 being specifically asked to recommend the CIP to be adopted by Council with respect to the 46 Comprehensive Plan compliance. And so as much as possible I’d like us to focus on that and 47 less on the finances if possible. Mr. Chairman. 48 49 APPENDIX 2 City of Palo Alto Page 2 Chair Martinez: Thank you Commissioner Panelli. I also want to acknowledge the work of 1 Commissioner Keller as part of this subcommittee. I think the two of them have really helped 2 move forward what we see here tonight. Additionally since our agenda didn’t identify the staff 3 present, can we do a quick roll call on staff for the record? Thank you. 4 5 Brad Eggleston, Asst. Director, Public Works: I’m Brad Eggleston the Assistant Director of Public 6 Works. 7 8 Mike Sartor, Director, Public Works: Mike Sartor, Director of Public Works. 9 10 Lalo Perez, Chief Finance Officer, ASD: Lalo Perez, Chief Financial Officer. 11 12 Aaron Aknin, Assistant Director, Planning: Aaron Aknin, Assistant Planning Director. 13 14 Steven Turner, Manager, Advance Planning: Steven Turner, Advance Planning Manager. 15 16 Cara Silver, Senior Assistant Attorney: And Cara Silver, Senior Assistant City Attorney. 17 18 Chair Martinez: And thank you all. Ok, so Lalo are you prepared to begin? 19 20 Mr. Perez: Thank you Chair Martinez, Commissioners. Thank you Commissioner Panelli and 21 Commissioner Keller also for your input through this process. As most of you are aware, some 22 of you are new and I haven’t had the pleasure to meet you yet, but we’ve been getting a lot of 23 good feedback from this Commission over the years on improving our capital budgeting. Our 24 goal is to make this document to a point where people can pick it up and be able to read it and 25 understand it. And I think a lot of the input that you’re giving us is along those lines and 26 obviously with the focus on the Comp Plan and how it relates to that. We believe that we’re 27 doing a better job in summarizing the information. Some of the comments you had given us in 28 the past was you give us this big fat book with a bunch of projects, but what does that really 29 mean? And so I think what we’re trying to do is give you a better summary and illustrate it 30 with graphs or charts as part of the suggestions that you had made. So we believe we have 31 some of that in here. 32 33 I wanted to open it up from a finance perspective and then we’ll give you a Public Works 34 perspective in terms of the projects and then Comprehensive Plan overview. We also have staff 35 behind us that are project managers of the various projects that are included in the document 36 with us tonight. The good news, if there is good news during this process is that since we last 37 came to see you we have had a better financial condition than we anticipated. We saw a 38 dramatic downturn in revenues to the point where we had to make major adjustments as an 39 organization. We reduced our workforce by 10 percent. We reduced our operating budget to 40 the tune of $16 million ongoing. A lot of that also included changes in compensation to our 41 employees and so, and thanks to the employees for the cost sharing and to the turn in the 42 economy we’re seeing better revenues and as a result when we closed the last fiscal year we 43 were able to send to the infrastructure reserve $7.6 million that was not budgeted or planned 44 for. 45 46 And so part of why I’m going into this discussion it’s just to give you an overview of how the 47 funding mechanism works. We have a Council approved policy that states that any budget that 48 is put forth in front of the Council must have a reserve and that reserve is anywhere between 49 10 and 20 percent of the expenditures of that year. And so we have a target of 18.5 percent. 50 APPENDIX 2 City of Palo Alto Page 3 Anything above that 18.5 percent the City Manager can send to those excess funds to the 1 infrastructure reserve. So that’s an additional mechanism that we have beyond our normal 2 transfer that we make, our annual transfer is about $13 million dollars and growing with 3 inflation. We inflate part of that number. So that’s how we fund the CIP. 4 5 It goes from you then to the Finance Committee, which is comprised of four out of the nine 6 Council Members for review and as Commissioner Panelli said that’s where we do a lot of 7 discussion on the funding. Some of the changes that we made to get to your discussion 8 tonight, I say we think that we did a better job in identifying the Comp Plan Elements for each 9 project and we believe that they’re more apparent in each page of the document for each 10 project. We’ve also added the definitions or labeling such as annual reoccurring and non-11 reoccurring and we can discuss, talk about that with the team. 12 13 Keeping in mind of the excellent work that was done by the Infrastructure Blue Ribbon 14 Commission (IBRC) we are instituting some of those recommendations such as the keep up and 15 catch up. So to touch base on that there was a recommendation that we add $4.2 million 16 annually for catch up and $2.2 for keep up. The $2.2 is included in the budget of this fiscal 17 year that is active and is going to be in the proposed. Our plan is to continue that in 18 perpetuity. Probably the number would need to be inflated, but the point is we’re going to put 19 that in. The $4.2 is a little bit more of a challenge since we’re still coming out of the deep 20 recession, but as I mentioned we did put $7.6 million dollars in that was not expected. So in a 21 way you can say we’re addressing that number of need for the catch up. We also identified 22 projects that are neither one of those two in the reports. 23 24 We tried to, as you recommended, add some graphics or pictures that might better illustrate 25 the projects. Another recommendation you made was that we should include the salaries 26 wherever possible to a project. As you may recall we had all salaries and benefits lumped into 27 one project. So where it’s feasible we identified the salary and benefit for those projects. 28 Another recommendation you made was for use to include a listing of previously approved 29 projects. We’re going to include that in the document. Our first attempt I think needs a little 30 bit more work, a little more improvement, but we wanted to get started and put something in 31 play. So we have that in there. And we’re always looking for feedback. Our position is this is a 32 living document and we always want to continue to make improvements so the reader can 33 better understand what’s going on in the City of Palo Alto in terms of capital infrastructure 34 work. So we’re open to that. 35 36 What I wanted to do was just briefly go over a couple of slides. I’m looking at Attachment C, 37 which is right after Page 11 of the presentation, graphs if you will. And I wanted to show you 38 that the five year outlook for the General Fund. Here we’re looking at a budget of about $124 39 million. As you can see the biggest focus is streets and sidewalks. And our work that we’ve 40 done and the work the IBRC’s done there was a lot of discussion about our streets and our 41 sidewalks and how we need that work and funding. And so Mark and Brad can go into more 42 details, but I just wanted to show you what that focus is. You obviously see that we have equal 43 importance to traffic and parking/open space and as well as buildings, and then the support for 44 the staffing. 45 46 The next graph shows you by category type. And there you can see the 2014 budget so you’re 47 going to see that we’re spending $9 million for streets and sidewalks and $11 million in park 48 and open space and Brad will touch on some of that. We’re also addressing transportation and 49 then building and facilities. Then the last slide that I’ll touch on briefly is by IBRC 50 APPENDIX 2 City of Palo Alto Page 4 recommendation or category I should say. And as you can see about half of the five year plan 1 is for keep up in terms of the work. And catch up is about $7.3 million. With that let me turn it 2 over to Mike and see if he has any comments. 3 4 Mr. Sartor: Actually I would like to introduce Brad Eggleston, our Assistant Director of 5 Engineering Services in the Public Works Department and the persons have been working into 6 the details of putting together this plan. So Brad, go ahead. 7 8 Mr. Eggleston: Good afternoon Chair Martinez and Commissioners. I’ll kind of say a little more 9 starting really on the same slide we left off on with Lalo and I wanted to speak a little more to 10 the importance of the IBRC’s work in how we developed this five year CIP plan. And essentially 11 the IBRC’s work really was the primary driver in developing this latest plan. During the IBRC’s 12 work in identifying the catch up backlog of infrastructure work that was needed and what was 13 needed to keep up there were detailed spreadsheets developed that showed the amounts of 14 catch up that were in various areas and that showed the work that was needed year by year for 15 us to keep up on the capital projects side. So a new thing in developing this plan is that the 16 fifth year, the fiscal year 2018 is for the most part developed by looking directly at those 17 spreadsheets and pulling out what was needed to keep up. And that’s kind of a new way of 18 doing things for us from the way that we’ve sometimes put projects in, scored them, evaluating 19 them in the past. In this case we had a developed work product to take these projects from. 20 21 Also to address IBRC recommendations we’ve increased funding in some of the annual recurring 22 projects that are in the Capital Plan every year. To start catching up and addressing some of 23 that backlog. Just a couple quick examples: we’ve got about a million dollars in backlog in 24 maintaining and repairing city facility parking lots. And so we actually have doubled the annual 25 funding in that CIP and developed a plan to start addressing that backlog of parking lot work. 26 Another example is in Community Services Department’s (CSD) work in tennis and basketball 27 court resurfacing. We looked at the funding there and increased it to start working on some of 28 that backlog and start eliminating it. 29 30 Lalo also mentioned the $2.2 million in keep up funding that’s been added to the budget. And 31 if you look through this five year CIP plan you’ll note that we’ve added a million dollars a year 32 to both the streets and the sidewalks program. And there’s an additional about $2.2 million, 33 the other portion of the $2.2 million that’s going into the operating budget for operating 34 maintenance in the General Fund. I did want to make the point that we will be looking annually 35 at that $2.2 million and its uses even though we’ve shown it in the five year plan for streets and 36 sidewalks. We’ll be looking at that annually to make sure we’re meeting all the keep up needs 37 and reevaluating whether we need to make changes to how that money is allocated. Our goal 38 for putting that money in streets and sidewalks work is to address the backlogs we have in 39 those areas and really to respond to the public’s feedback about the need for improvements in 40 these areas that we see expressed in the City Auditor’s Annual Performance Report in those 41 areas. 42 43 So as I had mentioned although scoring of the projects was done this year as it has been in 44 past years, the primary drivers were the IBRC recommendations and the need to keep up and 45 catch up in those categories as well as some other projects that have been approved by 46 Council, many of which have outside funding outside of the Infrastructure Reserve and we’ll 47 touch on some of those in one of the forthcoming slides. This year in looking at the projects 48 and scoring them there was actually only one project that was removed and not funded. That 49 project was the Charleston/Arastradero Corridor Project. and it wasn’t removed because it 50 APPENDIX 2 City of Palo Alto Page 5 didn’t score well or wasn’t a worthy project, but rather it’s one of the projects that the City is 1 doing public opinion polling on to see if it may be part of an infrastructure revenue ballot 2 measure in the future and so was not appropriate to include with full funding at this time in the 3 CIP. 4 5 So back to the slides, Lalo’s already touched on the pie chart of the five year plan with respect 6 to IBRC category. This set of bar charts are another view of the same type of data, so in the 7 previous pie chart we had categories for buildings and facilities, parks and open space, etcetera. 8 But now here you see we’re showing you those same categories with bar charts for each of the 9 five fiscal years that are in the plan and we’re showing it in terms of categories of how much of 10 the funding in the different areas is for keep up, catch up, or new projects. I kind of wanted to 11 touch on that for a moment. When we say “new” here, we don’t mean that it’s some, a new 12 idea someone just came up with. “New” means something that wasn’t considered in the IBRC’s 13 analysis of the financial needs for infrastructure. So for instance, a grant funded or outside 14 funded project that’s come up since then or any other project that has kind of come on to the 15 table since the IBRC did its work would be defined in that way. 16 17 So I think it’s interesting in this table to look and see that median levels are relatively constant; 18 for instance, streets and sidewalks. But I wanted to touch on a couple of the places and just 19 point out where you see spikes in the funding and tell you what those projects are. So for 20 instance in streets and sidewalks in fiscal year 2015 you’ll note a little over a $2 million purple 21 piece of the bar there. The purple is for new projects that weren’t considered by IBRC but have 22 outside funding and are not funded by the General Fund Infrastructure Reserve. So that 23 project is the Newell Road Bridge Project. And then similarly if you look at the set of traffic and 24 transportation bar charts you’ll see there’s new with outside funding relatively large especially in 25 fiscal year 2015 and then quite large in fiscal year 2014. That funding is primary for the 26 Highway 101 bike bridge and it’s shown in the CIP plan as being funded by grant funding. We 27 have grant applications in that if successful would nearly fully fund the project in that way. 28 29 Moving up to the buildings and facilities category you’ll see that in fiscal year 2014 there’s a 30 large keep up project. It’s actually probably several projects. But the largest piece of that is 31 the projects for making renovations at Lucie Stern Center, the Lucie Stern Community Theatre 32 and Children’s Theatre to upgrade mechanical and electrical systems and fire/life safety 33 systems. And then moving on under buildings and facilities to fiscal year 2016 you’ll note 34 there’s about $3 million in catch up work, the blue piece of the bar. That’s primarily work on 35 mechanical and electrical systems at the Cubberley Community Center. And also in that year 36 the keep up projects there primarily consist of work on the Baylands Interpretive Center 37 Boardwalk to replace that facility and improvements to the Junior Museum and Zoo that are 38 planned in the CIP. 39 40 And in the last category of parks and open space you’ll note a very large new outside funded 41 project in fiscal year 2014. That project is the golf course renovation pause in audio at about 42 23:05 project that’s being done in conjunction with the Joint Power Authorities (JPA) Flood 43 Control Project. And I think the last one I wanted to touch on was under parks and open space 44 for fiscal year 2018, the Infrastructure Reserve funded project that’s in the green is a project in 45 Rinconada Park to implement the Rinconada Park Master Plan components that the Master Plan 46 has been under development over the last year. And the relatively large keep up project there 47 is multiple park projects that were in the IBRC spreadsheet plans as well as a driving range 48 work at the golf course. 49 50 APPENDIX 2 City of Palo Alto Page 6 We also showed the same kind of charts, bar charts with respect to instead of the IBRC 1 categories the types of projects that are happening on a reoccurring basis and are ongoing with 2 typically the same funding each pause in audio at 24:22 versus the ones that are nonrecurring 3 one time projects. And here what I’d really point out is that when you look at streets and 4 sidewalks it generally has very consistent recurring funding. Parks and open space and 5 buildings and facilities and to some extent traffic and transportation tend to have less recurring 6 funding and to have more of the projects that occur in those funded as one time projects. 7 8 And then the final slide that we have to show you is an imperfect comparison of the current five 9 year proposed CIP we were just looking at with the previous five years. And I say it’s imperfect 10 because the categories that we had this data available for the previous five years don’t match 11 up exactly with what we were just showing you, but I think it’s still useful to look at. The key 12 thing I would point out here is that if you look in the buildings and facilities all the way to the 13 left you’ll see that back two and three years ago there were very large appropriations in those 14 areas. Those are primarily in for the library projects that were funded by the Measure N funds 15 and hence the large expenditures in those years. And that concludes our Public Works 16 presentation. We’ll turn it back over to Planning. 17 18 Mr. Turner: Great, thanks Brad. Steven Turner, Advance Planning Manager. Just wanted to 19 focus the Commission on what Commissioner Panelli said at the beginning of his presentation 20 that the purpose for the Planning and Transportation Commission (PTC) this evening is 21 relatively straightforward. It’s mainly to find that the proposed CIP is consistent with the 22 Comprehensive Plan. Staff has worked very closely with members of Staff from Administrative 23 Services Department (ASD) and Public Works to understand each project that is part of the CIP, 24 understand its Comprehensive Plan policies and programs that are applicable to those projects. 25 And after a thorough review of those projects staff is recommending that the Commission find 26 that the CIP is consistent with the Comprehensive Plan. That is simple enough, but certainly 27 over the years the Commission has challenged staff to look at the CIP more closely in 28 relationship to the Comprehensive Plan. 29 30 The CIP by its nature is a forward looking document that’s looking out into the future about 31 how the City wants to spend its Capital Improvement dollars and it makes sense to compare 32 that against the Comprehensive Plan, which is itself a very forward looking document looking 33 further into the future than say a single year CIP. But certainly it does make sense to really go 34 into some more detail with regards to the CIP and the Comprehensive Plan and so staff has 35 been working very hard to come up with metrics and measures and graphs and charts that 36 might show better the relationships between the CIP and the Comprehensive Plan. This 37 process started many, many months ago, right at the beginning of the CIP process where 38 Planning staff came to a meeting with the project managers and really challenged and 39 requested that the project managers take a good look at their individual CIP projects and the 40 Comprehensive Plan and find the primary and secondary policies and programs that really do fit 41 and match with their projects. We wanted to make sure that we good data into the system 42 early so that it made it easier for staff to review and analyze that data for the purposes of this 43 meeting and I think for the most part that has happened I think very successfully. 44 45 Once we received that data our staff again worked very closely with ASD and Public Works to 46 really crunch the numbers, to analyze the data, to really find those patterns, and find the 47 metrics that show how the CIP best relates with the Comprehensive Plan. And so we’ve 48 provided that data to you in a number of charts and graphs and tables that are in your 49 attachment tonight. And there’s really kind of four groupings of charts that are with you 50 APPENDIX 2 City of Palo Alto Page 7 tonight. I won’t go chart by chart, but I can explain the groupings together. The first set of 1 charts which are in Attachment B of your staff report, and that comprises of Chart 1 and Table 2 1 and Chart 2 and then even Table 2, which is on Page 4, those are really charts that take a 3 look at the Comprehensive Plan element and the number of citations for each element that 4 appear in this CIP. So we’ve presented that in a number of ways, we have kind of a pie chart 5 that shows the distribution of CIP projects related to elements. We’ve broken that down into 6 goals, policies, and programs on Table 1 and Table 2, which shows a little bit more in detail 7 about the number of times a specific policy or program was mentioned in the CIP. Chart 8 Number 2 on Page 2 is a little bit more of a visual representation of that data, but it’s all very 9 similar into, as to really the number of citations that appear in the CIP that relate to each of the 10 elements in the Comprehensive Plan. 11 12 The next set of charts begins on Page 3. These charts get into a little bit more detail about 13 how much of the CIP is going for each particular element. So we look at the total CIP budget 14 invested, took the data regarding the appropriate Comprehensive Plan policies and programs 15 and created a pie chart on Page 3 that shows the breakdown of each element and the total 16 budget that is being applied for each element within the Comprehensive Plan. On Page 5 we 17 took another look at that, but in this particular chart we look at the different types of funds and 18 how it relates to each Comprehensive Plan element. So we look at Internal Service funds, the 19 General Fund versus the Enterprise Fund and you can see the breakdown of the funds by 20 element. 21 22 The next set of charts are to me I think probably the most fascinating out of, if CIP charts can 23 be fascinating, out of this whole effort. We really looked at each individual element and really 24 tried to identify where the money was going within each element. And so you’ll see at the very 25 top there is a breakdown of the CIP budget looking at each individual element and each page is 26 a different element. So you can see how much money is spent on the Natural Environment 27 Element for example on Page 6: how much of that is from the General Fund, how much is the 28 Enterprise Fund, how much is the Internal Service Fund. And then the two pie charts down 29 below look at the spending just on the General Fund; that’s the pie chart on the left, and then 30 the total CIP budget, which includes the General Fund, the Enterprise Fund, and the Internal 31 Services Funds. And they’re broken down by kind of subchapters or sections within each 32 element. 33 34 As all of the Commissioners know working on the Comp Plan update there are a number of 35 subsections or individual sections within each element. And so we created data that shows 36 really how much money is being spent in each of those appropriate subsections. So for 37 instance, on Natural Environment in the open space section of the Natural Environment Element 38 those policies that relate to open space comprise 98 percent of the budget being spent for the 39 General Fund CIP. And so we’ve provided this for each individual element and I think it really 40 does dial down pretty deeply to show really where we are spending our CIP money. I think it 41 relates very much to the graphs that Brad showed you earlier, but certainly it’s a, we think it’s a 42 very helpful tool to really see how the Comprehensive Plan relates to the CIP. And those 43 continue through Page 10. 44 45 On Page 11 is one slide that represents a fourth category, and this is a request by the 46 Infrastructure subcommittee to really show the spending by City Council priority and so really 47 there were two sets of Council priorities that are represented, appropriately represented here in 48 terms of infrastructure and technology. Infrastructure we were able to break down into three 49 separate subcategories. There’s infrastructure in general throughout the City and then there’s 50 APPENDIX 2 City of Palo Alto Page 8 infrastructure spending in two particular geographic areas on California Avenue and in the 1 downtown area. And then fourth, spending on technology and that’s described there as well. 2 3 So all in all staff does feel again that the Comprehensive, that the CIP is consistent with the 4 Comprehensive Plan. We’re very, very pleased with the level of cooperation Planning has 5 received from ASD and Public Works. We think we’ve produced a number of enhancements 6 over the years. Certainly this is enhancement over the prior years. And I specifically wanted to 7 thank Chitra Moitra who did a lot of fabulous work on preparing these graphs. I had a vision on 8 what I wanted these to look like. Chitra ran with it and just nailed it 100 percent. So I wanted 9 to thank her and also the work of Dale Wong who worked very closely with her to crunch those 10 numbers. 11 12 And then finally I just wanted to make a reminder. As a result of this meeting the Commission 13 has typically prepared a written letter to the City Council with their determination on whether or 14 not the CIP is consistent with the Comprehensive Plan. That letter usually accompanies the 15 staff report that goes to the Finance Committee and then to the full Council. The Finance 16 Committee meeting I think is coming up within a few short weeks and so we would need to get 17 that letter drafted and finalized before that meeting. With that I believe that concludes the 18 staff presentation. Unless there’s any other comment? No? Good. Thank you. 19 20 Chair Martinez: Great, thank you all. With that I’m going to open the public hearing. The 21 opportunity of members of the public to speak on this item. Do we have any speaker cards? 22 We’re going to leave it open in case someone does come forth and wants the opportunity to 23 speak on it. 24 25 Commissioners let’s start with our IBRC alumni since there are many of you here and give you a 26 chance to ask questions and give comments. And we’ll begin with Commissioner Tanaka. 27 28 Commissioner Tanaka: Well I just wanted to thank the subcommittee for their work. I’ve 29 served on this committee before, subcommittee before and I realize how much work it is and 30 how much detail there is. So thank you for your work. 31 32 I have a few questions. First question is how, so the finance situation, this is for staff, the 33 financial situation is looking like it’s getting better. There was some thoughts about having 34 some sort of bond measure, have a structured bond measure. Can staff talk about what’s the 35 thoughts about that given the improved budget situation? 36 37 Mr. Sartor: Mike Sartor, Public Works Director. The City Council has formed an Infrastructure 38 Committee that is looking at staff’s work on a potential revenue measure for November 2014. 39 Staff is also in the process of doing some polling. I believe that’s going to start this weekend 40 with the public on various aspects of potential revenue measure and then they’ll bring that data 41 back to the Council Infrastructure Committee. 42 43 Commissioner Tanaka: Is there any update on the size of the bond that might be raised? 44 45 Mr. Sartor: Those decisions have not been made yet and will be dependent upon what the 46 results of the polling are and other conversations that the committee may have. Including, as 47 you’re probably aware there’s a proposal in from the J Paul Company on a Planned Community 48 (PC) project on Park Avenue that might include a public safety facility. 49 50 APPENDIX 2 City of Palo Alto Page 9 Commissioner Tanaka: Ok. Also I was looking at the Reserve Budget and it looks like it’s, you 1 know as it goes from Infrastructure Reserve it’s going from I guess 17 down to 8. Subjective 2 balance. 3 4 Mr. Perez: Correct. So right now the, like I mentioned the goal is to continue the $13 million 5 plus with the inflator continue with the 2.2. We’re trying to find, it’s, there’s multi lanes to 6 potential funding of infrastructure that we’re working on. One was related to your first 7 question. That’s one path. A second path that we’re looking at and we’ve had a couple of 8 preliminary meetings with the Finance Committee is to conduct what’s called a Cost of Service 9 Study. So the Cost of Service Study takes into account all of the services that we provide 10 where there’s a fee. We want to find out what is our bottom line cost for providing those 11 services and then have a policy discussion with the Council, with the community about what we 12 value, what we want, and how do we want it; meaning we could have less or more of a 13 particular service. We could have it, if it’s being subsidized at 80 percent we may have a 14 Council direction that it gets subsidized at 50 percent and the fees are changed. We could 15 make a recommendation that we chance the mode of delivery of the service. Instead of having 16 in house staff it’s contracted out. We could have a hybrid of the various options. 17 18 So that’s one, another path that we’re looking at, and we hope to have a draft report to the 19 Finance Committee in June, it’s not going to be part of the 2014 proposed budget discussions, 20 but it’s going to hopefully lead to discussions in 2015. And my, if I can go forward and envision 21 a process that we’re going to divide it in various categories, the services and either do some 22 polls, some outreach to the community to get impute and feedback and let that process go. 23 And then another process that we’re going to have is a review of the services that we provide 24 where there’s no fee in that particular type of service that we may have. And then the third 25 category is to look at what we call the back room operations, if you will. A lot of it, my shop, 26 for example we provide support to the organization. And to see what those costs are and what 27 can we do with those areas. That could be a source of funding if we decrease the costs or 28 increase revenues from that. It could potentially go to additional infrastructure funding. I don’t 29 know if I’m taking your time, so I could stop if I’m taking your time. 30 31 Commissioner Tanaka: I did have other items, but I don’t know if… (Trailed off) 32 33 Chair Martinez: No, we’re not setting any time limits since this is our only item tonight. 34 35 Commissioner Tanaka: Ok. 36 37 Mr. Perez: So I think those are the areas that we are looking at. With the, it’s too early in the 38 Infrastructure Committee work right now to really tell where we’re going to be, where we’re 39 going to go. But, we would anticipate out of this that at the very least we’re going to identify 40 what the community thinks is the priority in terms of infrastructure. Whether they decide to 41 fund it or not is another question. 42 43 Commissioner Tanaka: Ok. Thank you. I think the idea of understanding the cost of service 44 whether, so we explicitly understand that we’re subsidizing a service by providing maybe free 45 rent or subsidized or low rent makes a lot of sense. I think the work you’re doing seems to be 46 headed in the right direction. 47 48 I have a few other items here. I don’t know whether I keep just going through them or we 49 want to do another round or… (Trailed off) 50 APPENDIX 2 City of Palo Alto Page 10 1 Chair Martinez: It’s up to you if you want to come back. 2 3 Commissioner Tanaka: I’ll keep going if it’s ok. 4 5 Chair Martinez: Sure. 6 7 Commissioner Tanaka: So I was looking at Program AS 10,000 on Page 13. And on that page I 8 guess I was hoping that maybe staff could explain, when I looked at this section it looked like, 9 I’d have to flip to it myself… it looked like the salaries went from roughly $2 million in 2014 to 10 $4 million. And maybe can staff explain why does the salaries double in one year and what’s 11 the rationale behind that? 12 13 Mr. Perez: My apologies. I should’ve covered that at the beginning. I kind of glossed over it a 14 little bit. In my opening remarks I was talking about how this Commission and also the Finance 15 Committee of the Council suggested to us that we start budgeting the salary and benefits on 16 the projects. Because we’re just starting that process we were able to do that for the first year 17 of the five years. So the remaining dollars that you’re not seeing in 2014 are in the projects 18 themselves. It’s just the way we’re showing it as distribution. What we did not do for 2015 19 through 2018 is assign the salaries to the projects. Does that make sense? 20 21 Commissioner Tanaka: I think I understand. So basically you’re saying that 2014 all of the 22 salaries, most of the salaries are with the projects and 2015 through 2018 they’re not. 23 24 Mr. Perez: They’re not. They’re centralized (interrupted) 25 26 Commissioner Tanaka: Oh, I see, ok. So it’s not like people’s pay is getting doubled. 27 28 Mr. Perez: No and we’re not adding (interrupted) 29 30 Commissioner Tanaka: I was just (interrupted) 31 32 Mr. Perez: Paying more people. 33 34 Commissioner Tanaka: Ok, I was just trying to understand what was going on. Ok, that makes 35 more sense. Ok. And then Cubberley; given the recent I guess discussion on Cubberley does it 36 really make sense to be investing in Cubberley given the uncertainty still surrounding the 37 project? 38 39 Mr. Perez: Let me talk from a funding level and Mike or Brad can talk on the specifics of any 40 project that they may be working on. The direction of the City Manager and it makes all the 41 sense in the world I think to everybody is we’re not going to invest in any significant capital 42 program for Cubberley until decisions are made. But if there are things that need to be taken 43 care of because of health or safety then we’re going to address those. You know if we have a 44 leaky, leaking roof or some Heating, Ventilation, and Air Conditioning (HVAC) need that needs 45 to be addressed immediately as long as it’s within a reasonable nature we’ll address it. Those 46 are the only things that we’re doing are things that we had already started. But in terms of 47 projects that are of bigger magnitude than they’re being deferred until the decisions are made. 48 49 APPENDIX 2 City of Palo Alto Page 11 Commissioner Tanaka: Because right now about $3 million is being spent on Cubberley. I mean 1 I, could, you said replacing roof. Could they just be patched? I mean I’m just wondering how 2 much money do you want to put in something that might not, may be bulldozed. 3 4 Mr. Sartor: Yeah, as Lalo mentioned we’ve included in the first year some roof replacements 5 because we’re experiencing leaks and that kind of thing. The bulk of is you may recall we had 6 estimated about $17 million of catch up work that needs to be done to the buildings over time. 7 That work’s been pushed out into future years dependent upon the decision that the Council 8 and the School District makes on the future of Cubberley. So at this point we don’t, are not 9 funding any of that work. We’re just showing it as needed if the buildings are to be continued 10 to be used in their current configuration if you will. 11 12 Commissioner Tanaka: Ok. I would still recommend if possible to, because we don’t know 13 what’s going to happen to Cubberley still to minimize and if you patch the roof instead of 14 replacing it it’s certainly better, but that’s probably more detailed than we have to get into; but, 15 my recommendation. Actually back to Lalo on the salaries; if possible it would be great if you 16 update that table to kind of, so we can see apples to apples comparison. Because when people 17 see that salaries double people wonder what happened. So it’s probably something you could 18 fix. 19 20 Mr. Perez: Yes, thank you. 21 22 Commissioner Tanaka: And then last item is the Mayor this year has put a big emphasis on 23 trying to make fiber optic, or fiber happen in the City. And I saw some of these items on our 24 list here, although I don’t know whether we actually have any purview over it or it’s more of a 25 Utilities Advisory Committee (UAC) thing. Does staff know? Is this in our purview at all? 26 There’s like fiber optic customer connections, FO 1,000, FO, or sorry FO 10,000, FO 10,001. Is 27 this a UAC or is this a Planning Commission item? 28 29 Mr. Perez: I’m sorry I was reading back on some of the comments to see if we could have 30 answered your question on the salaries. 31 32 Commissioner Tanaka: Oh. 33 34 Mr. Perez: The UAC? 35 36 Commissioner Tanaka: I was, fiber optics? You know fiber, I think the Mayor this year has kind 37 of emphasized trying to get fiber happening again. And I saw a couple of fiber optic items on 38 our list here and I was wondering are those applicable to us? Is it UAC really? 39 40 Mr. Aknin: Yeah, I think that would be more something within the realm of UAC as well as 41 Council, another Council committee. 42 43 Commissioner Tanaka: Sounds good, thank you. 44 45 Chair Martinez: Commissioner I think it is appropriate for you to comment on whether that is 46 consistent with the Comprehensive Plan. So if there’s something you want to say about that 47 continue. 48 49 APPENDIX 2 City of Palo Alto Page 12 Commissioner Tanaka: Yeah, I didn’t look too closely, but now that I know that maybe we can 1 comment I’ll think about it a little bit more and maybe come around next round. Thank you. 2 3 Chair Martinez: Ok. Commissioner Panelli, comment? 4 5 Commissioner Panelli: Mr. Chair if you’ll indulge me, since I’ve been involved in this 6 subcommittee I’d like to reserve my comments and questions after everybody else gets a 7 chance. 8 9 Chair Martinez: Ok and finally our last alumni member, Vice-Chair Michael. 10 11 Vice-Chair Michael: So just to add onto Commissioner Tanaka’s comment, this is an impressive 12 report and I think in general it’s excellent. One question that’s come up in the past and I think 13 you’ve covered it pretty well here is regarding the prioritization of the different projects. I 14 notice in Attachment D you’ve got columns relating to what’s legally mandated, health and 15 safety facilities and infrastructure, service delivery, Council vision, etcetera and you’re using a 16 scoring system to prioritize. So one of the questions that I have and the public may have is 17 that if you had an infinite amount of money, a bigger budget, what have you, you might have 18 done more. So what projects didn’t make the cut and how were the projects prioritized that 19 were not included in what we see here? Because what we see here is pretty good, but what’s 20 missing? What’s just, what didn’t make the cut? 21 22 Mr. Eggleston: So this year was different from other years in that we essentially didn’t cut 23 anything except for the one project that I had mentioned earlier, the Charleston/Arastradero 24 Corridor Project. That’s about a $10 million project to redo that entire corridor area with new 25 medians, reduce lanes, new lighting, landscaping. And the reason we didn’t fund that is 26 because it’s part of one of the infrastructure projects that we’re doing a public opinion polling 27 on to potentially fund through a ballot measure. 28 29 Mr. Sartor: Let me add to that Commissioner Michael. Thank you Brad. So what Brad’s 30 explaining is that as you recall we have a five year plan and we fund each year the first year. 31 So what we started out with was the list of projects that was proposed for the second year of 32 the plan that will be now funded in 2014, which will be the first year of the new plan. All of 33 those projects that were proposed in fiscal year 2014 in last year’s CIP are going forward and 34 funded. In addition to that we’ve added $2.2 million in keep up money, which is going as Brad 35 said earlier to primarily our streets and sidewalks programs to keep up with the street repairs 36 and sidewalk repairs. 37 38 Vice-Chair Michael: Ok. So my next question and I think you covered this pretty well, this 39 might relate to Lalo or Public Works, but in the course of the IBRC’s work we worked with staff 40 pretty closely and an enormous spreadsheet was created to track, mostly in relationship to each 41 of the infrastructure projects, first a complete inventory of all of the infrastructure, but then as 42 to each one any amount of maintenance expense that had been deferred, which became catch 43 up, and then the estimated current maintenance, which became the keep up amount. And out 44 of that the IBRC recommended and I believe the City has endorsed the notion of creating an 45 Infrastructure Management System (IMS). And I would imagine that once that system is up 46 and running it would help inform the CIP project process. Can you address what’s the status of 47 the IMS? 48 49 APPENDIX 2 City of Palo Alto Page 13 Mr. Sartor: Certainly Commissioner Michael. And you’re absolutely right, the giant spreadsheet 1 from hell as we called it is perfectly usable for this year, but it will quickly become outdated. 2 We’ve identified a work team to develop an Infrastructure Management System and the work 3 team comprises experts from our IT Department, our Budget Office, and Public Works. The 4 project manager is in Public Works. We’ve conducted a number of research and meetings with 5 outside experts both looking at what private industry uses for asset management as well as 6 other cities. And we’re in the process of preparing a request for proposals that we plan to get 7 out by the June/July timeframe to get proposals from providers to develop a robust database 8 centered Infrastructure Management System that we can use for planning into the future. And 9 of course the spreadsheet data will be downloaded into that system as well as new projects as 10 they come forward. 11 12 Vice-Chair Michael: So one question that I know concerned me during the course of the IBRC 13 and I think is still open is that when we talk about the Infrastructure Reserve we’re not talking 14 about creating reserve for the replacement of facilities. We’re, it’s more a reserve for the 15 maintenance of the facilities. So for example, we’re holding this meeting in City Hall. City Hall 16 won’t last forever. Let’s say we think it will last 50 years or 40 years or 200 years, whatever we 17 would use as the estimated remaining life of City Hall. Why would the City not set aside 18 something, maybe an arbitrary something, each year for the replacement of something which is 19 inevitably going to have to be replaced? So this is kind of if you have catch up for deferred 20 maintenance, keep up for current maintenance, this obsolescence, which is I think inevitable 21 might be “replace up.” And but that’s not part of the process currently, is it? 22 23 Mr. Perez: It is not. I think ideally that would be the best way to do it. In the articles that we 24 read it’s just not something government is able to accommodate and plan for that way. This is 25 a national issue. It’s obviously a state issue. And I think with, you know I can certainly say 26 that within California, but I think it’s within the country. Some of it has to do with the salary 27 and benefit obligations that government has. We’re looking at anywhere between, I’m 28 speaking in general terms here 60 to 70 plus percent of budgets go towards that. And I can tell 29 you that we’ve attempted in the Nineties we had a, we talk about it in our document that we 30 had a $100 million infrastructure plan and we made pretty good headway. At one point we had 31 over $30 million in that fund identified for the projects that we identified. And those funds were 32 raided. They started going to other projects that were not identified on that list, new projects. 33 And we fought as hard as we could being the Finance Department to try to say, “Hey, wait a 34 minute, those are identified for these projects,” but being in the political world that we are in 35 different Councils come in and different decisions are made. So that’s why it’s difficult to try to 36 earmark or reserve because when the economy changes that is primarily the first place that 37 government goes and stops funding infrastructure. 38 39 So I think there’s been a lot of good work as a result of the IBRC and I think we’re, this Council 40 is taking it serious. And I think we’re seeing the actions and the steps and I think, I feel that 41 we’re pretty good with our policies and fiscal policies as my opening remarks in terms of having 42 a target and anything that is excess of what we expect to have it in terms reserved for general 43 operations is going to infrastructure. And I think that’s the prudent thing to do. I think we 44 need to continue to find a way to fund that other 4.2. That’s our target, that’s what we’re trying 45 to work towards. I just don’t think that we can do as you suggested for all of our 46 infrastructure. I just don’t think it’s sustainable for us in how limited we have in limitations. 47 48 Vice-Chair Michael: So my comment isn’t really on the work that you’ve presented tonight, 49 which I think is actually quite good. And really it’s maybe a question or concern that would go 50 APPENDIX 2 City of Palo Alto Page 14 to the Council’s Infrastructure Committee or some people in the future who are taking a look at 1 this. I think that at the time that the IBRC met and I’m going to have the wrong citation, but I 2 think there’s a Government and Accounting Standard 22 or something like that which relates to 3 what you could potentially adopt as an accounting method relative to the obsolescence of 4 facilities. And there is [long pause in audio at 58:19-1:57ish] 5 6 Mr. Eggleston: [already speaking] every city street to determine its current pavement condition 7 index and then we’ll have an updated number. One of the things we’re hoping to accomplish 8 with the increased funding for streets that’s proposed in this five year plan is to reach those 9 goals even earlier than 2021 although there’s a lot of issues regarding coordination with the 10 utilities projects that are ongoing that do influence whether, how soon we can actually meet 11 those goals. 12 13 Vice-Chair Michael: Ok, and then my (interrupted) 14 15 Mr. Sartor: I’d like to take a quick if you don’t mind advertisement here. We completed 16 yesterday the repaving of Alma Street from Oregon Expressway to the south boarder with 17 Mountain View. And that street has been done with rubberized asphalt. So I encourage you all 18 to go take a drive. It’s pretty cool. [Note—break in audio with music playing from 1:02—19 1:04ish] 20 21 Mr. Perez: [Note-already speaking] on its own and is running great and is off to a great start. 22 We have an excellent new CIO and we have a Governance Committee where we’re looking at 23 the needs of the organization today and then for the future. And so some of that we need to 24 plan and identify and work in conjunction with any Council subcommittee, such as like the 25 Technology one and try to see where the vision is and what we want to do. 26 27 And so I think some of those discussions I think Commissioner Tanaka talked about it earlier 28 are going to start in terms of what do we want to do with fiber to the premises for example. 29 There’s been a lot of discussion and interest about continuing the undergrounding of utilities 30 and accelerating that at a much faster pace. So there’s some discussions of that and so frankly 31 we have not identified the source of funding, but if those projects elevate than we have to 32 reprioritize what we’re doing. We would have to look at special initiatives because maybe it’s 33 something we believe and we want and if the community wants to do that we could look to 34 ways to ask the community to fund it. It could be a temporary sales tax increase as some 35 agencies have done where you say that sunsets or something similar to what the Storm Drain 36 Fund has done. They have a list of projects, I forget, 12 projects from 2005. There’s an add it 37 fee for the Storm Drain and it sunsets once these projects are funded. So it could be 38 something specific where, like that if the City were not to have the funds within its structure. 39 40 Vice-Chair Michael: Thank you. 41 42 Chair Martinez: And thank you. And now I’d like the other subcommittee member 43 Commissioner Keller. Given the opportunity to speak. 44 45 Commissioner Keller: Thank you Chair. First I would like to thank the staff for their excellent 46 work. I’ve had the pleasure of participating in this and I think that the presentation material 47 certainly improved through the process. I’d like to echo the thanks to Chitra Moitra for her 48 work on this. I think that’s excellent, and all the other members of the staff who were working 49 on this. And I’d also like to thank my fellow member of the Commission, Commissioner Panelli 50 APPENDIX 2 City of Palo Alto Page 15 for his able leadership and I think that it certainly helped with the process with his background 1 in the IBRC effort. 2 3 So let me start off with a follow up to what Vice-Chair Michael mentioned, which is what’s 4 missing and didn’t make the cut. And the answer to that was interesting. It says, “Well, we’re 5 following on the second year of fiscal year 2013’s five year plan.” And in some sense we have a 6 rolling five year plan. And therefore to some extent what we should be focusing on and this 7 occurred to me now I mean I didn’t realize this in previous iterations, but we should really be 8 focusing on what entered in fiscal year 2018 because that’s what’s really new. And we’re 9 mostly focusing on what’s occurring for fiscal year 2014 when we really need to be focusing on 10 what’s inserted into the hopper and then we can rephrase Vice-Chair Michael’s question as to 11 what didn’t make it into the hopper into the fifth year of the five year plan. 12 13 And maybe next time this comes around we could have a focus on what’s new and what’s, and 14 why it got to be there. And that would allow us to effect things when they’re first entered into 15 the system and when there’s opportunity for adjustment and when there is things cut. Because 16 there are necessarily things that you have a, I would hope you have a list of things that might 17 go into fiscal year 2018 that you say, “Well, this will go into fiscal year 2018, this will probably 18 go into 2019, 2020 or whatever.” And so that’s a list that which cutting makes sense. 19 20 The next thing is I remember a few years ago when we had the, we were dealing with the 21 recession there was an issue to accelerate our CIP expenditures because the costs and bids 22 were down. In other words it was a lot cheaper to do infrastructure and so I’m wondering if 23 we’re still in that state or if they’ve come back up to prerecession levels because that has 24 something to do with the level at which, maybe we want to accelerate more while the bidding is 25 good. 26 27 Mr. Sartor: Commissioner Keller I think the good news is the construction market has, is coming 28 back. The bad news for us is that our bids are going up as well. We received bids on the main 29 library for example last week and the bids for that were higher than, well, we had one low bid. 30 It was actually withdrawn, but the second, third, and fourth bids were higher than our estimate. 31 And there was an article, a very good article in yesterday’s San Jose Mercury talking about the 32 construction industry in general in Santa Clara County and the fact that it’s getting busy. So 33 that means bids are going to start getting higher. 34 35 Commissioner Keller: Thank you. It reminds me the definition of a low bidder is somebody who 36 wonders what they left out of the bid. 37 38 Ok, so it was mentioned street maintenance, so let me follow up on that too. If we look at 39 Page 91 is a street maintenance item and street maintenance is kind of an interesting category 40 because it says in here that the primary connection is the Community Services and Facilities 41 Element, parks and public facilities. And there’s Goal C4, C24, Policy C24, and Program C19, 42 but on the other hand in Attachment B, Page 9 I think that this category of Public Ways under 43 the Land Use Element is for streets and sidewalks. And I’m wondering, do I have that right or 44 am I confused? 45 46 Mr. Eggleston: That sounds correct. I’m not sure if it’s correct that Public Ways is referring to 47 streets, but if it is then we have this, clearly have this miscategorized in terms of the Comp 48 Plan. 49 50 APPENDIX 2 City of Palo Alto Page 16 Commissioner Keller: Ok and the other part of it is that when you look at, there’s in the 1 Attachment E in the back, you look at these policies and they are very generic. And I’m 2 wondering, realizing how generic these are. Does it make sense to have more specific goals in 3 terms of having a keeping the streets and sidewalks in good repair and stuff like that? Does it 4 make sense to have goals like that specifically in the Transportation Element or is the catch all 5 in Community Services and Facilities appropriate? And maybe that’s a question for Steven 6 Turner since that, well in terms of the Comp Plan. 7 8 Mr. Turner: I think some of the effort that we’re doing with the Comp Plan Amendment is 9 recognizing that some of the existing goals and polices may in some respects make sense about 10 where they are, but could certainly also be in another element and might be more appropriate 11 in that other element. So I think we’re going through the process of making sure that each 12 goal and policy and program is placed appropriately so that they can reflect say in future CIP’s 13 where money is being spent. And I think that by its nature goals, policies, and programs are 14 general. They are not meant to be specific and certainly they are not meant to be regulations 15 or requirements. So they are general and they are broad and there’s, I don’t know if there’s 16 any other way to necessarily improve on that. 17 18 Commissioner Keller: Well what we wind up as the anomaly here then on Page 8 of Attachment 19 B you have money on transportation going for traffic safety, neighborhood impacts, and 20 bicycling and walking and no money for streets and sidewalks, which seems rather anomalous. 21 So I’m not sure how you want to characterize that to make it more clear, but if there isn’t an 22 appropriate element in the Transportation Element for that, sorry, appropriate goal, policy or 23 procedure, or program in the Transportation Element then there’s nothing to attach it to. So it 24 just, that just seems anomalous. Ok. 25 26 And I remember that from previous CIP we had a bound book. And I don’t mind having this 27 instead of a bound book. This is probably cheaper and less paper or whatever, but there was 28 something that I miss from the previous document and that was maps. The previous document 29 had these nice color maps saying where things were happening around the City and what’s for 30 example I think there was a map for the pavement condition index and there are maps where 31 the utilities work was going to be done in the next few years and I thought, that’s one thing I 32 miss. I’m wondering whether that will be returning next year. 33 34 Mr. Perez: It’s this year’s version. We just don’t have it in your packet, but we expect the 35 document, the proposed document to be released to the public next week. So you’ll see it next 36 week. 37 38 Commissioner Keller: Ok. So maybe that can be provided to us when it’s available? 39 40 Mr. Perez: Fine. 41 42 Commissioner Keller: Is there a potential for grant funding for Charleston/Arastradero 43 improvements that are proposed or is that not an option? 44 45 Mr. Eggleston: There’s definitely a potential for grant funding. In fact the project has already 46 received a $450,000 Safe Routes to School to fund a portion of the project. We just heard 47 word that we’re almost certain to get $1 million towards the project for what’s called the Verves 48 Grant Program, which is Vehicle Emissions based around schools. And we also have I think a 49 APPENDIX 2 City of Palo Alto Page 17 $5.5 million grant application currently outstanding through the One Bay Area Grant or OBAG 1 program, which we expect to receive word on the likely outcome of essentially any day. 2 3 Commissioner Keller: Thank you. So that’s another reason that should be subscribed as to why 4 it isn’t in the CIP directly, because you’re expecting it to happen from somewhere else. Be 5 funded from somewhere else. 6 7 Mr. Eggleston: Well I would add that even if it was funded through grants we would still include 8 it in the CIP book and show it as primarily funded through grants. 9 10 Commissioner Keller: No, I’m saying that’s why it was one of the things you cut from this year. 11 Because I’m hoping you’re deferring it because you’re expecting it to be paid from elsewhere 12 rather than from our own funds. 13 14 Mr. Eggleston: Yeah, it’s that and the fact that it’s one of the infrastructure public opinion 15 polling projects. 16 17 Commissioner Keller: Great. Talking about infrastructure public polling; I assume one of the 18 issues for the infrastructure public polling is the public safety building. And I’m wondering 19 whether the people are being polled with the question of would you rather have a large 20 development funding the public safety building or would you rather have the public safety 21 building funded by a bond? I’m wondering whether that question is being asked (interrupted) 22 23 Mr. Sartor: Actually think that question is being phased that way in the poll. 24 25 Commissioner Keller: Yes, because I think that that’s an interesting question for the people. So 26 thank you for that. And I just want to maybe take a little, a quick note to point out a 27 suggestion I made to staff about that, which was to put the, consider putting the public safety 28 building if it’s at 395 Page Mill actually on the property on the corner of Page Mill and Ash. 29 30 Chair Martinez: You’re going off topic Commissioner. Would you just stay on the topic; that’s 31 an item that was continued. 32 33 Commissioner Keller: Ok, thank you. 34 35 Chair Martinez: Thank you. 36 37 Commissioner Keller: And the last thing about that is, the last thing I have is, is there’s a 38 consideration of undergrounding Caltrain. And I’m wondering, I think there’s a lot of interest in 39 undergrounding Caltrain. I think there are potential benefits from it, a lot of potential benefits 40 from it. There are also potential things that can happen in terms of reusing the land for various 41 purposes, some of which might pay for part of undergrounding Caltrain. And I’m wondering 42 where in the CIP process, probably not in the next five years, but might be part of 43 infrastructure bond at some point. After all I think Berkeley undergrounded Bay Area Rapid 44 Transit (BART) that way. So I’m wondering where in the CIP process, where in this whole 45 infrastructure milieu undergrounding Caltrain would go? 46 47 Mr. Sartor: Let me. At this point the Caltrain project, if you will and I’d assume you’re talking 48 about high speed rail? 49 50 APPENDIX 2 City of Palo Alto Page 18 Commissioner Keller: No, I’m actually talking about undergrounding the train tracks whether 1 high speed rail is built or not. But in some sense some sort of engineering study of how much 2 it might cost to underground, what the, how we might create policies that cause it to be 3 undergrounded partly by us, partly paid for by us and partly paid for by somebody else. I’m 4 wondering what studies are being done in terms of undergrounding Caltrain? 5 6 Mr. Aknin: So that’s something that the Rail Committee is looking at now within the context of 7 the Environmental Impact Report (EIR) associated with Caltrain electrification. So I think as we 8 move along the lines and over this next year the Caltrain electrification EIR is going to come out 9 and they’re going to show some impacts related to that EIR and then the question is going to 10 become how are those impacts mitigated. So within the context of that EIR the Rail Committee 11 is looking, having staff look into various options for having the rail line go through Palo Alto. 12 13 Commissioner Keller: Great. If that can be, if some, the materials can be given to us when 14 available that would be useful. 15 16 Mr. Aknin: Correct. I don’t see anything coming out within the next couple of months, but 17 know over the next year or so it’s something we’re going to look into more. 18 19 Commissioner Keller: Thank you. 20 21 Chair Martinez: Great. Again I want to thank Commissioner Keller for his involvement in the 22 subcommittee and we know that without his input we wouldn’t have half as many charts as we 23 got. Commissioner Alcheck? 24 25 Commissioner Alcheck: Thank you. Thank you for your work on this, great work on this. I was 26 not a member of IBRC. I don’t have that in my, on my resume and I didn’t sit on the 27 subcommittee. And as some of you probably know I’m a real estate land use attorney, so this 28 is really, this was sort of an astonishing read for me because this, it’s amazing how many, the 29 sort of responsibility that the City has to maintain all of these I guess features is what I would 30 call them. It is astonishing. It touches every single person in the City in probably some fashion 31 or another and it’s, it was a learning experience for me just to kind of review all the different 32 areas that you guys are consider, that is being considered. 33 34 Compliance is sort of like a relative scale. We have full compliance, partial compliance, no 35 compliance. This might seem like an odd question, but let’s assume that this is shy of full 36 compliance. Just hypothetically. What action would staff take to create greater compliance 37 with the Comprehensive Plan? I mean I assume the list of things we have to do is the list. No 38 one’s removing an item from that list because it doesn’t comply with the plan. If the street 39 signs need to be replaced because they’re not reflective enough, they’re on the list. So what 40 would you do to create greater compliance? And I ask that question because I guess I sort of 41 think the notion is a little redundant. I think if our City’s general plan requires, has all these 42 goals then the notion of sort of upkeep and maintenance of the projects that have resulted 43 from those goals should just sort of… I mean, I agree with Commissioner Keller’s sort of 44 assessment that the Community Services and Facilities Element’s general goal sort of 45 encompasses all of it. I ask this question because we’re working on the element now, the 46 various elements now and is it the department’s sort of vision that the element or that the 47 Comprehensive Plan that we’re working on will speak more specifically to these sorts of CIP 48 projects? 49 50 APPENDIX 2 City of Palo Alto Page 19 Mr. Aknin: I think there’s either two ways you have to go about it. Either your CIP has to 1 comply with the existing Comp Plan or if the Comp Plan gets too old you have to amend your 2 Comp Plan and create relevant policies so that your CIP falls in line with it. So I mean in 3 general a lot of the CIP stuff is going to be consistent with the Comp Plan no matter what time 4 because it’s ongoing maintenance type issues like street signs that are going to be consistent. 5 For larger CIP projects let’s say that are new CIP type projects and are not within your Comp 6 Plan, which isn’t the case here, you would eventually have to catch up with your Comp Plan to 7 make sure that you are consistent. 8 9 Ms. Silver: Cara Silver, Senior Assistant City Attorney. If I could just add to that; what we’re 10 looking for here is consistency rather than technical compliance. And so State law actually had 11 proscribed say a process for the Planning Commission to review the City projects so that there 12 is a finding that they are generally consistent with the General Plan or Comprehensive Plan. 13 And it’s just another check. That type of check happens through the entitlement process by 14 this body with private sector development, but it doesn’t always happen with public projects 15 largely because cities have the ability to exempt themselves from zoning codes. We don’t do 16 that here in this City so historically there has been this function that this, that Planning 17 Commission takes on to review that consistency for public projects. 18 19 Commissioner Alcheck: Ok, I can appreciate that. 20 21 Chair Martinez: Excuse me. Commissioner Keller had a follow up for that. Commissioner? 22 23 Commissioner Keller: Yes. Since you weren’t on the Commission when these incidents happen I 24 figured I’d relate something based on my experience. And that is there have been two 25 particular projects that this Commission has dealt with specifically. Namely one year we 26 removed a project from the CIP because we found that it was not consistent. And that was at 27 that time we felt, this Commission as then constituted felt that the compost facility was not 28 then consistent with the Comp Plan and required further study. It shouldn’t have been done. 29 And that was removed from the CIP and it is now the subject of much further study. 30 31 The second thing is that the, there was a CIP element added one year several years ago to put 32 a study of the bike bridge across Highway 101 in South Palo Alto that’s now become a much 33 bigger project. And that was added by the PTC when it was noted that other communities 34 further south on Highway 101 were getting bike bridges and we weren’t. And the reason we 35 weren’t was because we didn’t have one studied and ready to go to be funded. So we initiated 36 that process and added it to the CIP. 37 38 So that I think is perhaps more of the kind of thing that would be within our purview in terms of 39 adding and in terms of consistency. And also in terms of, a separate thing is in terms of 40 making the description of the Comp Plan and its consistency more clear and that consistent. So 41 the backup in here describing all of the elements and the nature of the review and that kind of 42 work is part of making sure that it’s consistent and described properly. Thank you. 43 44 Chair Martinez: And thank you. Continuing, Commissioner Alcheck. 45 46 Commissioner Alcheck: Yeah so no that’s, thank you for that Commissioner Keller and staff. I 47 think I appreciate sort of the process of reviewing let’s say a new expenditure like the bike 48 bridge and identifying compliance with our goals as they are stated in our Comprehensive Plan. 49 When it comes to resurfacing existing tennis courts for example, that sort of seems like a given 50 APPENDIX 2 City of Palo Alto Page 20 that it would comply with our Comp Plan. That that be maintained properly. At the same time 1 I guess it’s maybe stating the obvious to say that just because I think that the process of 2 resurfacing tennis courts is in compliance with our General Plan’s goals, that doesn’t necessarily 3 mean that the intended expenditure of resurfacing tennis courts in 2013 or 2014 is necessarily 4 necessary. I just want to throw that out there and I know that’s not our purview. I’m just 5 saying that 95 percent of this seems to me like “of course, absolutely.” And hopefully, and it’s 6 not us obviously, someone’s evaluating whether these are needed and necessary and I just 7 want to make sure that it’s obvious to everyone that I can’t make that determination. And not 8 that we’re being asked to, but I just thought I might as well say that. 9 10 I want to ask another question; hopefully I won’t get stopped. And this is for you guys. How 11 would the development of the “public benefit” of the PC that you referred to change this CIP 12 over the next five years, this proposed CIP? I ask that because the buildings and facilities 13 doesn’t really discuss, and maybe I missed it, doesn’t really discuss Police Safety Building 14 (interrupted) 15 16 Chair Martinez: I think that’s pretty clear. Why don’t you allow him to answer that question? 17 18 Mr. Perez: It’s been a challenge and I think I noticed that the Chief noted I think that we had 19 replacing the Police facility in our budget about 20 years ago. So it’s been a long, long 20 discussion. And we would have to find alternative funding. It would not be part of this CIP five 21 year plan. The reason that most of the items are compliant, in compliance most likely is 22 because we’re behind and we’re just trying to catch up. If we were to divert those funds to a 23 public safety building then we would have issues with the rest of the infrastructure in the 24 community. So we would have to look at other measures. Either potentially tax increases, 25 trying to find new revenue streams, maybe as we are seeing more hotels come on board maybe 26 we dedicate some of those revenues toward the funding. 27 28 Commissioner Alcheck: Yeah so let me kind of just jump in real quick. So would you, wouldn’t 29 you argue, I mean I guess I’m going to better understand this process as we have this 30 discussion, but do items make it onto this list that we can’t budget for but that need to be 31 done? And the reason I ask that is because earlier Commissioner Michael asked if there was 32 things that didn’t make it onto the list and if the safety building is something that… if a 33 component of enhancing the current situation we have or it’s a needed infrastructure, I guess 34 it’s sort of more enjoyable to cross something off the list than to add it later because it didn’t 35 work out through this process if that is the case. I’m just sort of wondering. So would that be 36 something that is missing from the list? That like five years ago would have been? 37 38 Mr. Perez: Let me see if I understand your question. You’re saying are there things that we 39 should be funding but we’re not including them on the list. So there’s this spreadsheet that we 40 were talking about earlier. There’s this spreadsheet that goes out, it was like a 30 year 41 spreadsheet. So there are projects further out that somebody could make an argument that 42 they could be done sooner. So there are some things that we could do. There are things that 43 the community has asked for, a bigger theatre for example. And you could argue the value of 44 that. 45 46 Commissioner Alcheck: Once it makes it on here it’s budget, there’s a I guess an assumption 47 your budget can encompass it or the fund will provide for it as opposed to this Police building, 48 which is going to be so expensive it would push everything off the list and that’s why it’s not on 49 here. 50 APPENDIX 2 City of Palo Alto Page 21 1 Mr. Perez: Correct. 2 3 Commissioner Alcheck: Ok, and let me ask you one more question. You know sometimes 4 perfect is the enemy of good and if you had the money for it I guess would that building be on 5 this list? And I guess I’m trying to figure out how big of a priority is it? How, I don’t know. 6 7 Mr. Perez: It is a top priority. When I first took over as the CFO in 2008 the then City Manager 8 and I were trying to find a funding mechanism and we had hopes at that time because the 9 economy was going well and strong early in 2007 when we started this process and we were 10 counting on the expansion of the Stanford Shopping Center for example as one possibility. The 11 leasing out of the Police wing once we moved them out. And so we had various funding 12 mechanisms. Some of them needed a little more work. Our attempt was there and then the 13 economy went south and so did the plan. so to answer your question directly, if we had the 14 money yes it would be in 2014. 15 16 Commissioner Alcheck: Ok, so I’m going to that’ll be it (interrupted) 17 18 Chair Martinez: Commissioner, I’d kind of like, I’m getting a little bit nervous about talking 19 about that one (interrupted) 20 21 Commissioner Alcheck: Yeah that’s it for me on that. I just wanted to sort of hear your 22 thoughts on that. 23 24 Chair Martinez: Ok. Commissioner King. 25 26 Commissioner King: Excuse me. Thanks to all for the preparation of the report. I have a 27 process question as far as how this actually gets budgeted. So the near year here 2014, so 28 then this feeds to Council in their budget preparation with the hope and expectation that they 29 will fund as per these numbers or somewhere near those? 30 31 Mr. Perez: Good question. So I should explain a little bit of that real quick here. So the five 32 year plan, you’re exactly correct being new to the PTC. The first year is adopted and is 33 obligated and we can award contracts once we go through the bidding process. And we see no 34 reason why we can’t send the money from the General Fund that we are forecasting to send. 35 What could happen is potentially some grant funding that we may have identified and are 36 accounting for may not come so then we’ll have to use reserves to make it work, but we would 37 make it work. The outer four years are adopted in concept. So there’s less emphasis by the 38 Council on that review. It’s more of a are we heading in the right direction and that’s kind of 39 why we want to have a five year plan because you want to see where we’re going as an 40 organization without investments and infrastructure. 41 42 Commissioner King: Ok, thank you. And then can you, I have to say I’m not that familiar with 43 the different funds. So can you please explain, you’ve got the General Fund, Enterprise Fund 44 from which the bulk of the funding is expected, Internal Service Fund? Could you if possible 45 give an overview of the sources of money flowing into those and the restrictions and purposes 46 for the outflow of those and then also where grants fit in? Do they go into one of those funds 47 or does it vary with the grant type? 48 49 APPENDIX 2 City of Palo Alto Page 22 Mr. Perez: Good, good question. So the focus tonight and it’s typically the focus is on your 1 General Fund. In most cities the discussion is that because that’s where the challenge is to 2 have sufficient funds, revenues allocated to invest in your infrastructure. On the Enterprise 3 Fund it’s more like a business set up. And they are all, by law we have to segregate them. So 4 for example, the Electric Fund is separate from every other fund, the Gas Fund itself, the 5 Refuse fund, they all have their own account and you cannot take money from one fund to 6 another without a justifiable reason. So if you’re building an infrastructure that is benefiting 7 multiple funds then the appropriate share could be allocated that way otherwise you cannot do 8 that. The Electric Fund can’t pay for the streets for example, but they could pay if they are 9 making a cut on the street or something like that. 10 11 The funding, 50 percent of the funding for the General Fund is tax revenue, sales tax, hotel tax, 12 etcetera. The other 50 percent is fees. And the Enterprise Fund it’s a rate base. And so rates 13 are, staff makes projections on the needs for expenditures for operating and capital and based 14 on those projections they determine what the rates should be. And so the Council approves 15 those rates on an annual basis and for some of them there’s a public vote requirement and so 16 that’s also part of the process. And so annually we bring to you, the Council the five year plan 17 and it’s funded either by the revenues I mentioned or the rate base. 18 19 Commissioner King: Ok. And when you say rates does that mean those are all from utility rates 20 or? 21 22 Mr. Perez: So there’s, gosh what we have now? Nine Enterprise Funds. So most of them are 23 either utilities, we have one that is the airport. There’s really no revenue right now and so the 24 General Fund is making loans. So if you see projects from the airport they are going to be on a 25 loan basis so they won’t be rate based. So that, I think that’s the exception on the (trailed off) 26 27 Commissioner King: Ok. Ok, that’s interesting that it is such, it so overwhelms the part that 28 comes in through taxes. I guess the portion of this budget that comes from that fund. I guess 29 that’s probably because the, our utility structure has such high infrastructure costs that it’s 30 paying for itself basically? 31 32 Mr. Perez: Right and there’s also some fees in the Enterprise Funds, but it’s predominately the 33 rate that funded. I think we’re doing an organizational review of the department and the 34 preliminary reports are saying that we have well-run Utilities. And I think you can attest to that 35 by the level of service and the work that’s being done in keeping up and maintaining our 36 infrastructure. I think we have a pretty good pace of reinvesting in our infrastructure and it’s a 37 good investment to make. 38 39 Commissioner King: And the utility users tax, where does that enter? Which fund does that go 40 into? 41 42 Mr. Perez: So that was something the voters approved and it’s a tax that is on the water, gas, 43 and electric and it goes to the General Fund. And it’s a general use revenue. So in other words 44 the Council can dictate where it should be spent for General Fund purposes. 45 46 Commissioner King: Ok, great. Thanks. Let’s see, and then I had sort of a specific question on 47 the pavement condition index and how the streets are prioritized for resurfacing and do we 48 currently in that prioritization do we include bicycle use as one of the parameters? 49 50 APPENDIX 2 City of Palo Alto Page 23 Mr. Eggleston: With respect to the streets that are selected, bicycle use is not one of the things 1 that goes into calculating the PCI. We’re generally trying to select the streets that have the 2 lowest PCI for resurfacing as long as they don’t have the utilities project conflict. But along 3 with that we also consult with the transportation group, look at the Bicycle and Pedestrian 4 Transportation Plan, and meet with Palo Alto Bicycle Advisory Committee (PABAC), the bicycling 5 group. So we do kind of shuffle priorities at times to make sure that we are addressing the 6 streets without heavy bicycling use first. 7 8 Commissioner King: Ok. 9 10 Mr. Eggleston: And I can’t remember the specific example, but I know even just in this past 11 year the contract that we had we actually moved some streets out and moved some other ones 12 in based on the fact that they were bicycle boulevards in the new Bike Plan. 13 14 Commissioner King: Got it. Ok. Yeah, I don’t want to lead us out into the weeds, but if it’s in 15 North California, which is a primary bike route has horrible pavement. I think that may tie in 16 with Old Palo Alto. There seems to be some challenge in paving there because much of Old 17 Palo Alto has poor pavement. But ok, thank you. 18 19 And then I just want to say thanks. These graphs are helpful and I think in a goal of civic 20 engagement you’re probably not going to get a lot of citizens that will go through 200 pages of 21 information, but they might be drawn into the graphs, presenting the information graphically 22 and then drill down if they have questions. So I think that’s great. 23 24 I, let’s see, I had one or a question on I think this is on the Public Works graphs. Can you 25 explain I think there’s one you should break out 2014 General Fund CIP total by category and 26 then you have one for the whole time period by IBRC category. Could you explain the overlap 27 or lack thereof of IBRC categories versus CIP categories? 28 29 Mr. Eggleston: Are you referring to the pie charts or (interrupted) 30 31 Commissioner King: Well, I’m referring to as a, so I’m not, so are those IBRC, is there a 32 separate list for IBRC versus CIP? How do those two interact? 33 34 Mr. Eggleston: Oh, ok. That’s a good question. Both charts are based on the same group of 35 projects. 36 37 Commissioner King: Ok. 38 39 Mr. Eggleston: We just categorized them in different ways on different charts. So for instance 40 in one set of charts we wanted to just break them down according to which projects are 41 recurring every year and which ones are stand-alone one or two year projects. And then in the 42 next we wanted to break that, those same projects down according to those IBRC categories of 43 keep up, catch up, etcetera. 44 45 Commissioner King: Ok, so one really sort of is more applicable to CIP. When I look at the 46 graph is more applicable to oh, we can tie this into our, the Comp Plan comparison whereas the 47 IBRC really doesn’t relate to Comp Plan. It’s just about the type, the keep up versus catch up. 48 49 Mr. Eggleston: That’s correct. 50 APPENDIX 2 City of Palo Alto Page 24 1 Commissioner King: Analysis. Ok. And then the recommendation I would make is if you kept 2 consistency with the Planning staff’s graphs it makes it much easier if each page is numbered, I 3 believe. And then also if you, on the pie charts if you show a total; if you look at Planning 4 staff’s they were, that was helpful. 5 6 And then lastly and this sort of ties in, I believe ties into Commissioner Tanaka’s comment on 7 salaries and benefits issue where there is a change in how the calculation was done, where we 8 saw the jump in salaries. I note that there is a supplemental information paragraph there, but 9 it’s I would say a bit obtuse and it doesn’t hit you in the head and say, “Hey, we made a big 10 change in how we’re doing this, that’s why it changed.” It talks about salaries and benefits 11 have been included in certain projects where appropriate in 2014, but it doesn’t hit you over the 12 head. I think in this case hitting you over the head with huge change, that’s why the big jump 13 occurred. And then similarly I found it very helpful for the, on the graphs that indicated big 14 projects coming up where you saw a jump for a certain year and a certain category and you 15 mentioned that that was the redoing of some project, a large one. Your comments were 16 helpful and I think it would be helpful if you in those cases would footnote so that it would 17 explain so that a citizen looking at that would be able to say, wonder “Oh, what’s the big jump 18 there?” And then if you footnoted it on the graph I think that would be very helpful. 19 20 Mr. Eggleston: Thank you. 21 22 Mr. Perez: Very good comments. Thank you. We will, if we don’t, we’re not able to make them 23 in this proposed version we’ll definitely put them in the adopted. 24 25 Chair Martinez: Ok, all done? Chair gets to speak. Every year that the CIP comes before us 26 there’s a benefit that I personally receive. Like I got to drive on the newly repaved Homer 27 Street today. So I wanted to thank the Public Works Director for that. Maybe we should have 28 CIP’s more often and I’ll get more benefits. 29 30 This idea of is the CIP consistent with the Comp Plan, with the Comprehensive Plan is an 31 interesting question because there are two ways to look at it based on how you look at the 32 Comprehensive Plan. There are the basic needs and services that the Comprehensive Plan tries 33 to address, are our sidewalks safe? Are they accessible? Can bicycles ride on the streets 34 without hitting a pothole? And by and large the CIP does a good job. This CIP for this year 35 does a great job being consistent with that Comp Plan. There’s another Comp Plan and that’s 36 the Comp Plan that represents our values and aspirations as a community. And I think that the 37 Commissioners have largely addressed some of those ideas today. The undergrounding of 38 Caltrain; well the undergrounding, what does that do? You know it makes our community more 39 whole, it makes it more accessible. It gives us access to parts of the neighborhoods we don’t 40 have access to. 41 42 And so on the first Comp Plan I would rate the CIP A+. On the second Comp Plan, does it 43 address our long term needs in some way? Does it address climate change? Does it look at 44 our habitats? I don’t know. Does it serve all of our neighborhoods? Well, we don’t know 45 because it hasn’t addressed the Comprehensive in that way. We don’t have the chart that says 46 every neighborhood in the City has been addressed in terms of its sidewalks and streets and 47 like that; that every neighborhood would be treated equally. So in some ways I would like to 48 see if we’re going to be asked to recommend that the CIP for this year is consistent with the 49 Comp Plan I would like those higher standards to also be there in the way in which the 50 APPENDIX 2 City of Palo Alto Page 25 Commission has asked about the year 2018 and the planning for that. As I go through the 1 rough book I see a few projects that begin to take us there. The Master Plan for let me see, for 2 Parks, Trails, Open Space and Recreation Master Plan. That definitely is appealing to the 3 Comprehensive Plan of our values and aspirations. And there are some others there as well 4 when we’re looking forward. 5 6 When I think of the IBRC’s catchy little phrase or maybe we should call it “catchy keepy” little 7 phrase about catching up and keeping up I see a great distinction between what is catch up 8 and what is keep up. And maybe it’s different from what IBRC has defined it as because if a 9 project is called repairs I look at it as a catch up. If it’s looking toward expanding a recreation 10 facilities as the golf course project is, I would call that keep up because it’s keeping up with the 11 demand. So I don’t know whether that term that you’re using is a strict definition of what, how 12 IBRC has defined it. That and I think the Vice-Chair has alluded to that addressing current 13 needs is keep up. But I think I would make it more rigorous. I would challenge you to say 14 keep up means that we’re keeping ahead of the game. We’re looking to the future; we’re 15 planning for making sure that we always have access to our libraries and community facilities 16 and like that. A different kind of keep up than what I read in the repairs and roof replacements 17 and pothole repairs and like that. 18 19 So that’s I think my criticism. And it’s not as much criticism as a suggestion that the CIP is 20 consistent and I would certainly vote to recommend that to Council. But we also have to look 21 at the CIP to be more planning oriented. And I would like the planning for future Palo Alto to 22 be a higher priority in the years to come in what we see next year and maybe addressing these 23 as priorities for our community. But again, I think you’ve come so far and it’s easy to follow, 24 clearly documented that it’s quite a good document and I want to thank you for that. 25 Commissioners, follow up? Yes, Vice-Chair. 26 27 Vice-Chair Michael: So once again I think this is going to attract a lot of support from the PTC 28 and it’s a heck of a job. I had tried to make a reference to something. I was able to look up 29 the correct reference and this was from the Government Accounting Standards Board (GASB). 30 It’s Statement 34, just for the record. 31 32 When preparing basic financial statements and the management’s discussion and analysis for 33 state and local governments the GASB 34 I think is the controlling reference. And what I was 34 trying to get to in that previously if I can, I had it just a moment ago, but essentially the, and it 35 goes to the CIP process, and again I was just maybe advocating on your behalf to others who 36 have to make the decision and allocate resources. Part of what the presentation of the City’s 37 finances are intended to do is to determine, and this is from GASB 34, whether the 38 government’s overall financial position is improved or deteriorated as it relates to infrastructure 39 and maintenance and so forth is the question. And then they get into, let’s see… I had it. Well, 40 essentially it says, oh, important aspects of the government wide financial statements, this is 41 about halfway through Statement 34, “The government should report all capital assets including 42 infrastructure assets in the government wide statement of net assets and generally should 43 report appreciation expense in the statement of activities.” But then it goes on to say 44 infrastructure assets that are part of a network or subsystem of a network are not required to 45 be depreciated as long as the government manages those assets using an asset management 46 system that has certain characteristics and the government can document that the assets are 47 being preserved approximately at or above a condition level established and disclosed by the 48 government. So this seems to go to the importance of moving ahead with Infrastructure 49 Management System so that you would support the exception. Otherwise the failure to report 50 APPENDIX 2 City of Palo Alto Page 26 depreciation of the capital assets infrastructure facilities of the City would be sort of contrary to 1 how I read GASB 34. 2 3 So I just want to encourage the powers that be to support Public Works and Finance in making 4 sure either that you have a system that allows you to monitor and maintain the condition of all 5 these assets at a level at or above the level that’s designed to keep them running in perpetuity 6 or sort of consider adopting a financial reporting an MDNA per GASB 34 that has depreciation 7 and may reflect on your creation of a manageable infrastructure reserve. I apologize for diving 8 into the weeds in this. When I’m not at PTC meetings I serve on the audit committee of a 9 public company and we deal with Financial Accounting Standards Board (FASB) and it just came 10 as a great revelation that there’s GASB, so good grief. 11 12 Chair Martinez: Commissioner Panelli. 13 14 Commissioner Panelli: Thank you Mr. Chair. So the reason I asked to defer to the very end is I 15 have the distinction I suppose or indistinction of being the only person on this Commission who 16 served both on IBRC and on this CIP subcommittee. And I wanted to get a chance to hear the 17 questions and comments from my fellow Commissioners. So that’s the reason I asked to be, 18 the order to be changed. So thank you Mr. Chair for indulging me there. 19 20 The first thing I want to do is correct a huge mea culpa, a huge oversight on my part. And that 21 is I thanked everybody except my colleague Commissioner Keller who joined, who I am senior 22 to on this subcommittee by all of about six weeks. But he was absolutely instrumental. I think 23 we’ve been working on so many different things together that I think we almost share a brain 24 at this point so, but I want to say thank you. You were quite helpful and you were too kind in 25 calling me the leader of this sub commission, subcommittee. I think a better description is a 26 shepherd. There are lots of sheep and they all have minds of their own, but I was just trying to 27 keep them on the right course. 28 29 So I have a few just small questions and comments and then I have a soapbox item and it sort 30 of builds off what Commissioner Michael was talking about. The first thing, if we go, let’s see… 31 Mr. Turner. On Page 11 just for, I think I know the right answer to this, but just to be clear, 32 sorry, Page 11, Chart 6. This is in the exhibit to the staff report. Attachment B, yes. The 33 categories are, it’s basically broken down infrastructure and technology and then further broken 34 down into California Avenue infrastructure and downtown infrastructure. As I recall from our 35 meetings the first bar of infrastructure is infrastructure except California and downtown. It’s 36 not the total, right? It’s, yeah it’s exempt? 37 38 Mr. Turner: Except, yes. 39 40 Commissioner Panelli: Just want everybody to be clear about that. That’s what I thought it 41 was. On, let’s see, Brad you were talking about on the fiscal year 2009 to 2013 actual 42 expenditures chart and the one line item is fiscal year 2013 year to date. Which month is that 43 year to date through? Is that January? 44 45 Mr. Perez: It should be through December. 46 47 Commissioner Panelli: Through December? Alright so it’s a six month number? 48 49 Mr. Perez: Right. 50 APPENDIX 2 City of Palo Alto Page 27 1 Commissioner Panelli: Ok. Alright. One of the things that struck me just, and we talked a little 2 bit about it in some of the earlier meetings, was the way these, the project summaries have 3 been drafted tend to talk about the primary connection to one policy. I think though what I’m 4 hearing from my fellow Commissioners is that when you put it in the aggregate it almost skews 5 the numbers or the grouping. So for example if we go to slide, sorry, Page 2 of Exhibit B, of 6 Attachment B, and we see an inordinate number and maybe a couple of groupings and then we 7 see very few in some of the others. And I’m wondering maybe that there’s a way when we do 8 this in the future perhaps to do a waiting or I’m not exactly sure of the right way to do it, but 9 perhaps there’s a way to reflect more than just the primary connection. I think it’s great when 10 you’re looking at the individual project. When you aggregate it all up it basically says 11 everything we’re doing we’re doing for Natural Environment and Community Service and I don’t 12 think that’s necessarily true. I’m happy to see so many citations to Natural Environment and 13 Community Service... 14 15 So a quick question there. We have very few citations for Governance and Business, 16 Governance Element and Business Element. Do you think that’s just the nature of Public Works 17 projects is that they don’t, they tend to be more infrastructure related and not necessarily 18 governance and I’m just curious. If somebody off the street looks at this chart they say why 19 aren’t we investing in X? 20 21 Mr. Turner: The Governance and Business Elements, especially the Governance Element is more 22 of a process related element. A way of doing things and how government is supposed to 23 operate rather than having anything to do with tangible type of items I think that the City might 24 want to improve in the future. So I think that’s kind of a uniqueness between the Governance 25 and the Business Element as compared to the other elements. Yeah. 26 27 Commissioner Panelli: Good. I just wanted to make that explicit. And it actually leads into my 28 final item, which is my soapbox item here. I was struck by what our esteemed Assistant City 29 Attorney said earlier, which is, and I think it’s endemic in government, which is you said I think 30 municipalities so not have to observe their own zoning codes. Right? 31 32 Ms. Silver: Yes, that’s correct although Palo Alto does not follow that. 33 34 Commissioner Panelli: But it reminded me of something that I’ve really harped on during the 35 IBRC year and a half, whatever it was, which is my number one objective walking into IBRC 36 was whatever happened let’s fix it. Number one. And number two; let’s make sure it never 37 happens again. Meaning we never have some huge unfunded backlog. And as Lalo had 38 mentioned earlier it’s too easy for any given Council to forget whatever happened in the past or 39 maybe not know what happened in the past because they’re new and take money from one 40 place and move it elsewhere. 41 42 One of the laws that the State of California has and I believe all the other states has for 43 example with Homeowners Associations (HOA) is that Homeowners Associations are required by 44 law to have an infrastructure reserve. That reserve is based on the life of each component of 45 that condo or townhome association. So for example if there’s an elevator and it lasts for 20 46 years that HOA has to budget one twentieth of the cost of replacement every year in cash and 47 store it somewhere with an inflator on top of that. Ok? Now in any given year they are allowed 48 to borrow from the infrastructure reserve as long as they pay it back within the next fiscal year. 49 50 APPENDIX 2 City of Palo Alto Page 28 I had discussed this within IBRC, but again it builds off what Commissioner Michael had talked 1 about, which is in standard accounting procedures you depreciate your assets and the other 2 thing you do is if you intend to keep them for a long time you replace those dollars. I wonder if 3 our Governance Element should explicitly state that we commit to maintaining our 4 infrastructure? That’s an open question. I don’t expect us to answer it tonight, but I think that 5 that plus perhaps something that statutorily requires us to reserve for the replacement of our 6 assets gets us out of this problem of trying… we spend so much time. You know our Chair is 7 saying before we don’t spend enough time looking in the future. And I think one of the big 8 reasons we don’t spend enough time looking into the future is because we spend so much time 9 trying to fix problems from the past. And wouldn’t it be nice if instead of spending time fixing 10 problems in the past we anticipate what those problems are going to be in the future, put in 11 solutions or corrective actions up front, know that the money is going to be there when that 12 asset is gone and spend most of our working time actually planning. So anyway that’s my 13 soapbox and thank you for your indulgence. 14 15 Chair Martinez: Anybody else want the soapbox? Yeah, Commissioner Alcheck. 16 17 Commissioner Alcheck: Ok, so I just want to say that I hope that Chair Martinez’s 18 insightfulness, I hope your insightfulness is largely a result of your tenure because then there’s 19 sort of hope for all of us. I stumbled in my prep for tonight. As I attempted to sort of 20 acknowledge compliance mainly because it seemed a little too obvious, but the notion of 21 reviewing a CIP that in addition to everything that we’ve, that’s in this one takes bold steps to 22 sort of address our vision of a future Palo Alto and then assess the compliance of those bold 23 steps with the Comp Plan I think is a noteworthy suggestion. So I think that Commissioner 24 Panelli’s comments about sort of looking, I think we need to look forward and backwards at the 25 same time if you will. 26 27 I think you’ll be happy to know that the Governance Element subcommittee discussions have 28 touched upon creating a more inviting and accessible City Hall. And one of the items here talks 29 about the first floor entryways of that, you know, the assumption there is when we pass the 30 Governance Element that could be attributed to that budget. So it will increase. But yeah, no, 31 I really love the idea of components of this CIP looking forward and having sort of, which like 32 the bike bridge does and then really evaluating does that comply with our Comp Plan. And that 33 seems like a really great suggestion. So that’s it. 34 35 Chair Martinez: Thank you. Commissioner Panelli are you ready? 36 37 MOTION 38 39 Commissioner Panelli: Yes, thank you Mr. Chair. I would like to make the Motion to recommend 40 the adoption of this CIP 2014 to 2018 to Council and specifically state that we believe that it 41 does in fact comply with the Comprehensive Plan. 42 43 SECOND 44 45 Commissioner Keller: Second. 46 47 Chair Martinez: Ok, we have the Motion by Commissioner Panelli, second by Commissioner 48 Keller. Do you care to speak to this Motion? 49 50 APPENDIX 2 City of Palo Alto Page 29 Commissioner Panelli: I’ve already used up all of my energy on my soapbox item, so I’m going 1 to keep this short and sweet. I think what we have, this product that we have is much better 2 than it was at the beginning and much better than maybe past versions. And so I’m really 3 pleased with it and I think we can make it better and better going forward. And you’ve heard a 4 lot of really good suggestions here from my colleagues tonight, but don’t take those as harsh 5 criticisms. Those are constructive criticisms. I think we’ve gone above and beyond what most 6 people would’ve expected. 7 8 Chair Martinez: Commissioner Keller. 9 10 FRIENDLY AMENDMENT 11 12 Commissioner Keller: Thank you. First let me suggest that the Motion be worded as in the staff 13 report. Staff recommends the Planning and Transportation Commission find the proposed 2014 14 to 2018 Capital Improvement Program consistent with the Comprehensive Plan and forward the 15 finding to the City Council. 16 17 Commissioner Panelli: I’m happy to accept that amendment. 18 19 Commissioner Keller: Thank you. There is a wonderful quote about standing on the shoulder of 20 giants and the issue is that in some sense this work stands on the shoulder of both the IBRC 21 that has done an extensive job in understanding the infrastructure needs to bring us to the 22 point where that could be distilled into this CIP and also in terms of the extensive work of 23 previous members of the CIP subcommittees as well as previous members of the Planning 24 Commission who have continued to refine how this material is presented and I think that it 25 shows in this report. And I’m pleased to second this recommendation. Thank you. 26 27 Chair Martinez: Question to the staff. Is the staff report with the analysis of the Comp Plan 28 policies and programs attached to the CIP or what’s the plan for that? 29 30 Mr. Perez: We can definitely put it as part of our package that we present to the Finance 31 Committee and we can add your letter to that. 32 33 Chair Martinez: Ok, very good. Anyone else, comments? Commissioner Panelli. 34 35 Commissioner Panelli: I’d like to just back you up on that Mr. Chairman because I think Council 36 from what I gather and the comments I’ve gotten from certain Council Members that they 37 spend a lot of time reading the minutes from our meetings and in this particular meeting we 38 spent a lot of time referring to particular exhibits. And so I think it’s really important for those 39 to be attached so if they’re trying to follow along I think it would be helpful. 40 41 Mr. Perez: Yeah, the timing won’t allow for us to put it in the document itself, but we will 42 definitely put it in their packet. 43 44 VOTE 45 46 Chair Martinez: Ok, very good. Ok Commissioners ready to vote? Those in favor of the Motion, 47 aye (Aye). Those opposed? We see no opposed. Motion passes unanimously. And again 48 thank you all very much, great job. 49 50 APPENDIX 2 City of Palo Alto Page 30 MOTION PASSED (7-0) 1 2 Mr. Perez: Thank you. I encourage you to put some of your thoughts into the letter into the 3 vision of the future. I wholeheartedly agree that that’s something that we need to keep 4 working on together. And I want to thank Dale, Chitra, and Brad for driving all the hard work 5 and then the rest of the project managers behind me as well and the people at the table. 6 Thank you. 7 8 Chair Martinez: Great job. 9 10 APPENDIX 2 Storm Drain Oversight Committee MEMORANDUM Date: April 24, 2013 To: Honorable Finance Committee of the Palo Alto City Council From: Members of the Storm Drain Oversight Committee Subject: Review of the Proposed FY 2014 Storm Drainage Fund budget As directed by the City Council, we have reviewed the proposed Storm Drainage Fund budget for fiscal year 2014 and compared it with the provisions of the Storm Drainage Fee increase approved by Palo Alto property owners in 2005. Based on this review, we find that the proposed budget reflects the increased fees, CIP projects, and operating expenditures approved in the ballot measure. The Committee met to discuss the proposed budget on Wednesday, April 24, 2013. Prior to the meeting, Storm Drainage staff provided a packet of informational materials about the approved ballot measure and the proposed budget for the Committee’s review. During the meeting, staff presented information regarding the Storm Drainage Fund operating and capital budgets and answered questions from the Committee members. There are several noteworthy items in this year’s proposed Storm Drainage Fund budget that the Committee discussed during the meeting. After careful consideration, the Committee voted to endorse the proposed expenditures listed below, but would like to bring them to the Finance Committee’s attention since they are non-routine in nature. 1. Proposed funding for Storm Drain System Replacement and Rehabilitation is reduced by $250,000 from levels prescribed in the ballot measure and transferred to the Connect Clara Drive Storm Drains to Matadero Pump Station CIP in order to provide adequate funding for construction of the latter project. Staff and the Committee agree that completion of the Clara Drive project is a higher priority than system rehabilitation and recommend the reallocation of the $250,000 for the Clara Drive project. 2. This year’s funding for Innovative Storm Drain Improvements ($146,000) is allocated towards the Southgate Neighborhood Storm Drain Improvements and Green Street CIP in order to provide supplemental funding to cover project construction costs. $1 million in prior years’ Innovative Improvements funding has been applied to the Southgate neighborhood CIP in past years’ approved budgets. Staff and the Committee agree that the innovative nature of the Southgate Neighborhood project (bioretention planters, permeable pavement, etc.) warrants the use of the Innovative Improvements funding. 3. The proposed Storm Drainage Fund budget includes funding for an additional 0.88 Full-Time Equivalent (FTE) employee positions to pay for employees who spend a portion of their time APPENDIX 2 Review of the Proposed FY 2014 Storm Drainage Fund budget April 24, 2013 Page 2 working directly on storm drain issues (storm drain capital improvement projects, storm drain system maintenance, storm water pollution prevention, storm water pump station instrumentation, etc.). Staff and the Committee agree that it is appropriate to fund all staff resources performing storm drain-related functions from the Storm Drainage Fund rather than subsidizing their efforts through the General Fund or other Enterprise Funds. The proposed reallocation of the FTEs would result in an annual cost of $114,408 to the Storm Drainage Fund. Based upon our review of the materials provided to us by Storm Drainage staff, we find that the attached matrix describing the proposed use of the Storm Drainage Fee increase for FY 2014 and the table providing a side-by-side comparison of the ballot measure and the proposed budget accurately describe the relationship between the budget and the ballot measure. In addition, the attached spreadsheet summarizes the status of the Storm Drainage Fund capital improvement program implementation to-date. Staff and the Committee concur that there will be adequate funding generated by the Storm Drainage Fee increase authorized through the 2005 ballot measure to fully fund the seven capital improvement projects specified for implementation in the ballot measure. Attachments APPENDIX 2 Proposed Use of Storm Drainage Fee Increase for FY 2014 Line Item Revenue Expenditures Fee Increase Revenue SD Fee Increase $3,745,891 Capital Improvements and Program Enhancements A. One-time SD CIP Projects San Francisquito Creek Pump Station $0 Channing/Lincoln Storm Drain $1,430,000 Southgate Neighborhood Storm Drains $146,000 Gailen/Bibbits SD Improvements $0 Clara Drive SD Improvements $750,000 Matadero Creek Pump Station & Trunks $315,000 Alma Street SD Improvements $0 B. Enhanced Maintenance SD Replacement/Rehabilitation CIP $353,000 Augmented SD Maintenance $158,367 C. Innovative SD Projects $0 D. Augmented Storm Water Quality $163,756 E. Capital Improvement Program Staffing New CIP Engineer $149,060 CIP Support Staff $32,279 SUBTOTALS $3,745,891 $3,497,462 From Storm Drainage Fund Reserves $638,480 Other storm drain expenses previously covered by General Fund subsidy $886,909 TOTALS $4,384,371 $4,384,371 Prepared for the Storm Drain Oversight Committee by Joe Teresi and Tatiana Pham 4/24/2013 APPENDIX 2 Approved Storm Drainage Fee Increase Ballot Measure vs. Preliminary FY 2014 Storm Drainage Fund Budget BALLOT MEASURE 1. Implementation of seven (7) high- priority storm drain capital improvement projects. 2. $ 500,000 annually (adjusted annually for inflation) for storm drain system repair and rehabilitation. 3. $ 90,000 annually for augmented storm drain system maintenance. 4. $ 125,000 annually (adjusted annually for inflation) for innovative projects to reduce storm water runoff and pollutant levels. 5. $ 100,000 annually (adjusted annually for salary increases) to fund storm water quality protection activities formerly funded by the Wastewater Treatment Fund. 6. $ 115,000 annually (adjusted annually for salary increases) for an engineer to assist with implementation of storm drain capital improvement projects. 7. Annual adjustment of fees by local CPI increase or 6%, whichever is lower. 8. Pre-payment of Storm Drainage Fees for City-owned properties to accelerate implementation of storm drain capital improvement projects. PROPOSED BUDGET 1. $ 1,430,000 for Lincoln Ave Storm Drain Improvements (CIP SD-11101); $750,000 for Connect Clara Drive Storm Drains to Matadero PS (CIP SD-06104); $315,000 for Matadero PS and Trunk Lines Improvements (CIP SD-13002). 2. $ 353,000 for Storm Drain System Replacement and Rehabilitation (CIP SD-06101). 3. $158,367 in additional funding for Storm Drain In-House Maintenance: ($ 90,000 for supplies & materials + 0.45 additional FTE staffing). 4. $ 146,000 allocated to Southgate Neighborhood Storm Drain Improvements (CIP SD-10101). 5. $163,756 in additional funding for Storm Water Quality Protection (0.9 additional FTE staffing, $ 39,000 for non-salary expenses). 6. $181,339 in additional funding for Engineer position (1.0 FTE) and CIP support staff (0.3 FTE) funded in Storm Drain System Improvements. 7. Proposed 2.2% increase per the change in the CPI for San Francisco-Oakland- San Jose for calendar year 2012. 8. No pre-payment for FY 2012-13; all scheduled pre-payments by General Fund have been made. APPENDIX 2 Proposed Storm Drain Capital Spending Plan SF Creek Pump Station Gailen / Bibbits Alma Street Channing Lincoln Trunk Matadero PS and Trunks Clara Drive Southgate Neighborhood YEARLY PROJECT Year FY $4,500,000 $650,000 $1,500,000 $4,600,000 $3,000,000 $900,000 $2,000,000 TOTAL 1 FY 2005-06 $900,000 $650,000 $180,000 $1,730,000 2 FY 2006-07 $735,000 $735,000 3 FY 2007-08 $7,535,000 ($915,000)$6,620,000 4 FY 2008-09 $700,000 $785,000 $1,485,000 5 FY 2009-10 $820,000 $820,000 6 FY 2010-11 $895,000 $895,000 7 FY 2011-12 $1,590,000 $140,000 $1,730,000 8 FY 2012-13 $1,680,000 $860,000 $2,540,000 9 FY 2013-14 $1,430,000 $315,000 $750,000 $146,000 $2,641,000 10 FY 2014-15 $1,840,000 $1,840,000 11 FY 2015-16 $1,915,000 $1,915,000 12 FY 2016-17 $1,990,000 $1,990,000 $9,135,000 $650,000 $785,000 $6,415,000 $6,060,000 $750,000 $1,146,000 $24,941,000 NOTES: 1. Cost figures immediately below project titles reflect Year 2005 cost estimates. Spreadsheet figures represent actual incurred costs & projected future costs. 2. Shaded projects have been completed to-date. 3. Phases 1 & 2 (of 4) of the Channing/Lincoln CIP have been completed. Design of Clara Drive and Southgate Neighborhood CIPs has been completed. 4/24/13 JT APPENDIX 2 5/22/2013    City of Palo Alto    M E M O R A N D U M    TO:   Finance Committee    DATE:   May 14, 2013    SUBJECT: Additional Information Pertaining to the Fiscal Year 2014 Proposed Budget      Staff would like to provide the Finance Committee with additional information pertaining to the Fiscal Year 2014  Proposed Budget Hearings.    Community Services Department  A formula error has been corrected and total FTE changes have been adjusted on pg. 140‐142 to reflect the 10.41  FTE increase found in the Staffing section of the Community Services Department Proposed Budget. These changes  have no budget impact and are solely to correct presentation errors. In addition, the Net Impact column was  corrected to reflect the net cost of all line items on the budget change table. Replacement pages have been  provided. (See Attachment 1).     Utilities Department  The Proposed Budget includes a full‐time equivalent (FTE) add of 0.5 FTE Program Assistant I and results in a  salaries and benefits increase of $52,287.  Staff requests an amendments to the Proposed Budget to drop 0.5 FTE  Program Assistant I, and add 1.0 FTE Utilities Project, Coordinator.  The gross salaries and benefits impact of this  change is an increase of $94,686. The result is a net budget increase of $42,399 to the proposed budget.  This  Utilities Project, Coordinator position will assist the Communications Manager by coordinating complex  communications projects, including program and service outreach and education.    Allocated charges to the Water Fund from the Wastewater Treatment Fund are decreased from $51,000 to  $44,000 to align the budget with expected actuals.  These charges represent laboratory work done for the Water  Fund by staff at the Water Quality Control Plant.    A correction is made to the Residential Monthly Utility Cost Information on page 56 of the Proposed Operating  Budget.  The current FY 2013 median monthly amount for gas service should be $39.07 instead of $49.67.  The  proposed FY 2014 median monthly amount for gas service is estimated to be 0.5 percent higher at $39.27 than the  current FY 2013 amount.  It should be noted that the median monthly residential bill will vary depending on actual  gas market prices. (See Attachment 2)          DEPARTMENT HEAD:                     LALO  PEREZ           Director, Administrative Services/CFO        CITY MANAGER:                      JAMES  KEENE           City  Manager  APPENDIX 2 -140- City of Palo Alto Fiscal Year 2014 Proposed Budget Community Services Department Summary General Fund Department Expenditures/FTE by Service Program/Division Proposed Budget Changes FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change $ FY 2014 Change % Positions 123.82 122.71 123.72 125.52 134.13 10.41 8% Staff Expenditures $10,707,705 $10,876,921 $11,214,219 $11,233,590 $12,014,159 $799,940 7% Other Expenditures 9,365,082 9,995,507 10,685,291 10,780,999 10,285,452 (399,839) (4%) Total Expenditures $20,072,787 $20,872,428 $21,899,510 $22,014,589 $22,299,611 $400,101 2% Total Revenues $7,154,800 $6,816,045 $7,514,936 $7,562,621 $6,151,347 $(1,363,589)(18%) FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change $ FY 2014 Change % Administration and Human Services $4,151,355 $2,882,033 $3,724,515 $3,277,460 $3,416,543 $(307,972) (8%) FTE Staff 15.31 15.71 4.99 5.88 5.13 0.14 3% Arts and Sciences 4,494,190 4,572,965 4,439,400 4,514,142 4,971,620 532,220 12% FTE Staff 36.73 36.91 37.18 38.20 43.87 6.69 18% Open Space, Parks and Golf 5,698,552 8,220,462 8,817,168 8,845,473 8,424,694 (392,474) (4%) FTE Staff 30.16 30.71 31.51 31.33 31.73 0.22 1% Recreation and Cubberley 5,728,690 5,196,968 4,918,427 5,377,514 5,486,754 568,327 12% FTE Staff 41.62 39.38 50.04 50.11 53.40 3.36 7% Total Expenditures $20,072,787 $20,872,428 $21,899,510 $22,014,589 $22,299,611 $400,101 2% Total FTE 123.82 122.71 123.72 125.52 134.13 10.41 8% Change FTE Expense Revenue Net Cost One Time Golf Course Reconfiguration (Note 1) (567,417) (1,312,188) 744,771 Marketing Outreach (Note 2) 50,000 50,000 Subtotal 0.00 (517,417) (1,312,188) 794,771 Ongoing Reduction to County reimbursement for median maintenance (Note 3)(9,000) 9,000 Art Center Foundation Contribution (Note 4) 0.50 56,000 81,000 (25,000) Increase in Recreation Programs (Note 5) 2.00 92,000 119,500 (27,500) Budget Class Fee Revenue on Historical Trends (Note 6) (242,901) 242,901 Enjoy! Catalog Expense (Note 7) 58,000 58,000 Special Events Contract (Note 8) 50,000 50,000 CIP Projects moved to Operating Budget (Note 9) 55,000 55,000 Mediation Contracts 7,000 7,000 Expenses moved to Parking District Fund (23,826) (23,826) Unfreeze 0.75 FTE Program Assistant I (Note 10) 37,804 37,804 Add 0.25 FTE Volunteer Coordinator (Note 11) 0.25 21,548 21,548 Reclassify 0.75 FTE Program Assistant I to 1.0 FTE Program Assistant II (Note 12) 0.25 25,453 25,453 APPENDIX 2 City of Palo Alto -141- Fiscal Year 2014 Proposed Budget Community Services Budget Changes Notes Note 1: On July 23, 2012 City Council approved a reconfiguration of the golf course in conjunction with the flood mitigation project for San Francisquito Creek. The reconfiguration is estimated to begin in April 2014, which will cause the course to be closed for part of Fiscal Year 2014. As a result of the reconfiguration the course is expected to see a significant reduction in revenue from Fiscal Year 2013. In addition, major contracts for maintenance and management were renegotiated and approved by Council on March 18, 2013. Expenditures have decreased as a result of the new agreement terms. Note 2: Competition for classes and camps has increased in the region over the past five years, which has had a negative impact on enrollment numbers for the Community Services Department overall. This funding will be used to contract for marketing research to determine the needs and desires of the community to assist in developing a marketing strategy. Note 3: The City receives reimbursement from Santa Clara County for the maintenance of medians and other areas that are under the jurisdiction of the County. The reimbursement amount is set annually based on county-wide standards. The reimbursement amount is decreasing in Fiscal Year 2014. The Community Services Department is exploring cost saving measures to offset this reduction. Note 4: City Council approved an agreement with the Palo Alto Art Center Foundation on April 8, 2013. This agreement includes an annual contribution of $81,000 for the department to use to support children's educational programs at the Art Center. This will include an additional 0.5 FTE in hourly staff. Note 5: Although overall department enrollment has declined, in the past two years the Recreation Division has seen an increase in activity and enrollment for Aquatics, Lucie Stern rentals, Summer Camps and Middle School Athletics. The revenue target for these programs has been increased to reflect historical trends, which will be used to hire 2.0 FTE additional hourly staff to respond to the increase in demand for programs and services in these areas. Note 6: Class fee revenue for the Department as a whole has decreased steadily over the past five years, with most of the decline in the Arts and Sciences Division. The revenue targets are budgeted reflect historical trends. Note 7: The Enjoy! Catalog is the primary marketing tool for generating the annual revenue for programs and services. The cost for design, publication, and distribution has increased in the past five years. City Council on April 15, 2013 approved an additional $38k as part of midyear, and the department anticipates an additional $20k of increases in Fiscal Year 2014. This addition is primarily due to a summer supplement, and expanded programs in the Recreation Division. Note 8: The Community Services Department plans and manages a number of citywide events each year. Among the events are the May Fete Parade, Chili Cook Off, Senior New Year's Bash, Moonlight Run, Holiday Tree Lighting along with unplanned events to support or celebrate various city happenings. Additional funding is requested for Fiscal Year 2014 for staff overtime required for preparation and day-of activities, as well as a contracted event management services. Note 9: During the Fiscal Year 2014 Capital Improvement Planning process, it was determined that two on-going projects (CIP#: OS-00002; PG-12002) should be transferred to the Department's Operating Budget. Note 10: In the Fiscal Year 2013 Budget this position was frozen from July through December in order to achieve needed savings to balance the budget. The position has been unfrozen and the department is able to fill the vacancy. Note 11: In the past four years the Art Center has seen an 81 percent increase in the number of volunteers and a 15 percent increase in the number of service hours. The volunteer coordinator is responsible for recruiting, training and managing this pool of 575active volunteers. This position will be increased from 0.5 FTE to 0.75 FTE. Add 0.07 FTE Heavy Equipment Operator 0.07 8,600 8,600 Add 0.5 FTE Management Specialist (Note 13)0.50 48,000 48,000 Increase Temporary Staffing to meet Operational Needs (Note 14) 6.84 360,800 360,800 Increase Overtime for Special Events (Note 8)10,000 10,000 Budgeting Salary on Actual Pay Rates (Note 15)(102,633)(102,633) Citywide Benefit Changes (Note 16)262,120 262,120 Allocated Charges (Note 17)(66,527)(66,527) Other Changes 18,179 18,179 Subtotal 10.41 917,518 (51,401) 968,919 Net Change to Budget 10.41 400,101 (1,363,589)1,763,690 Change FTE Expense Revenue Net Cost APPENDIX 2 -142-City of Palo Alto Fiscal Year 2014 Proposed Budget Community Services Note 12: With the re-opening of the Mitchell Park Community Center, the Recreation Division will need a full time Program Assistant II act as a sales manager, coordinate facility rentals, oversee cash handling and provide general customer service for visitors that come to the new community center. The new center is expected to generate an increase in activity and rentals that will also provide new revenues to more than offset the cost of this customer service position. Revenues will be monitored closely and adjustment to budgeted revenue may be changed through the midyear process in Fiscal Year 2014. Note 13: This hourly staff position of Management Specialist is within the Arts and Sciences Division of and acts as the staff liaison to the Public Art Commission and is responsible for the management, maintenance, and oversight of the City's public art collection. Currently, the position is filled, but has been previously funded by attrition savings; this provides sufficient funding for the position correcting this issue. Note 14: As a result of significant reductions to regular staff that were made in the past five years, the Department has had to increase reliance on hourly staff to maintain expected service levels. An analysis of historical trends and operational needs show that the department requires an additional 6.84 FTE to maintain services at current levels and actual needs. Note 15: This year salaries are being budgeted at actual rate of pay. The City has two types of compensation systems: 1) "control point" which refers to the midpoint of the range, and 2) a five step pay system, which defines the amount of pay an employee receives. Previously, the budget was set at control point or highest step for permanent benefited positions; temporary positions were budgeted at the second step. In addition, this fiscal year vacant full-time benefited positions are budgeted at control point or the highest step; vacant temporary positions are budgeted at the second step. Most employees are hired below control point or under the highest step. A salary reserve has been set aside to account for step or increases towards control point during the year based on performance as per the memorandum of understanding. Note 16: This increase in benefits is primarily a result from increased pension, medical, and retiree medical costs. For additional information, please refer to the General Benefits Fund and Retiree Health Benefit Fund sections of this document. Note 17: General Fund cost allocation plan charges are driven primarily by changes to the budget and changes in the level of support the administrative departments provide to the direct service departments/funds. The budgeted amounts for most General Fund Information Technology allocations decreased in 2014 as compared to the 2013 Adopted Budget. For more detail on the basis for this change, please refer to the Information Technology Department Budget Changes table. Revenues and Expenditures FY 2011 Actuals FY 2012 Actuals FY 2013 Adopted Budget FY 2013 Adjusted Budget FY 2014 Proposed Budget FY 2014 Change $ FY 2014 Change % Revenues Internal Revenues $51,659 $48,659 $58,338 $58,338 $58,338 $0 0% External Revenues 7,103,141 6,767,386 7,456,598 7,504,283 6,093,009 (1,363,589) (18%) Total Revenues $7,154,800 $6,816,045 $7,514,936 $7,562,621 $6,151,347 $(1,363,589)(18%) Expenditures Salaries and Benefits $10,707,705 $10,876,921 $11,214,219 $11,233,590 $12,014,159 $799,940 7% Contract Services 3,230,863 3,739,588 3,964,852 4,013,168 3,702,838 (262,014) (7%) Supplies and Materials 575,653 601,311 688,457 686,457 682,603 (5,854) (1%) Facilities and Equipment Purchases 45,786 31,804 70,700 70,700 70,700 0 0% General Expense 1,294,177 1,296,547 1,351,018 1,368,394 1,369,098 18,080 1% Rents and Leases 15,970 22,188 25,466 25,466 25,466 0 0% Allocated Charges 4,195,643 4,295,090 4,577,808 4,579,824 4,427,757 (150,051) (3%) Operating Transfers Out 6,990 6,990 6,990 36,990 6,990 0 0% Total Expenditures $20,072,787 $20,870,439 $21,899,510 $22,014,589 $22,299,611 $400,101 2% APPENDIX 2 City of Palo Alto - 56- Fiscal Year 2014 Proposed Budget Residential Monthly Utility Cost Information Utility Current FY 2013 Bill Proposed FY 2014 Bill $ Difference % Difference Electric (1) $42.76 42.76 - 0.0% Water (2) 62.14 67.35 5.21 8.4% Gas (3)39.07 39.27 0.20 0.5% Wastewater (4)29.31 29.31 -0.0% Refuse (5)41.54 41.54 -0.0% Storm Drain (6)11.73 11.99 0.26 2.2% User Tax (7)7.73 7.47 (0.26) -3.4% Total Monthly Bill $234.28 $239.69 $5.41 2.3% COMMENTS: 1 - Electric comparisons based on recent residential median data: 365 kWh/month in summer (May-Oct), 453 kWh/month winter (Nov-Apr) 2 - Water comparisons based on recent residential median data: 9 ccf/month 3 - Gas comparisons based on recent residential median data: 18 therms/mo in summer (May-Oct), 54 therms/ mo. in winter (Nov-Apr). Commodity prices switched to market-rate in FY 2013. Proposed FY 2014 monthly bill is based on rates effective February 1, 2013. 4 - Wastewater comparisons are for a residential dwelling unit. Rates are not metered. 5 - Refuse rate based on 32-gallon can. 6 - Storm drain increase based on December 2012 CPI data. 7 - UUT currently 5% of Electric, Water and Gas bills. APPENDIX 2 5/22/2013    City of Palo Alto    M E M O R A N D U M    TO:   Finance Committee    DATE:   May 16, 2013    SUBJECT: Additional Information Pertaining to the Fiscal Year 2014 Proposed Budget      Staff would like to provide the Finance Committee with additional information pertaining to the Fiscal Year 2014  Proposed Budget Hearings.    Staff Proposed Changes to Municipal Fee Schedule (See Attachments 1 and 2)    Staff recommends the following changes to the Municipal Fee Schedule as presented in staff report #3804 – packet  pages are listed for your reference:    Planning & Community Environment/Impact Fees, beginning packet p. 77‐78, Municipal Fee book p. 17‐3 & 17‐4:  1. Development Impact Fees:    Parks ‐ Both residential and nonresidential fees decreased $1/unit   Libraries – Residential, Multi‐family cost per unit decreased $10 for units greater than 900  square feet  2. Housing Impact Fees:   Increased Housing Impact fee $0.45 per square foot for nonresidential development  3. Traffic Impact Fees:   Citywide Transportation Impact Fee – Increased transportation impact fee $144 per net new  PM peak hour trip   Charleston/Arastradero – Increased fee $0.01 per square foot for commercial units and $53  per square foot for residential units  4. Parkland Dedication Fee:   Increased fees for both Single‐family and Multi‐family projects by $1,849/unit and  $1,288/unit, respectively.   5.  Transportation Fees: (8.5% ‐ University Ave, 15% ‐ California Ave)   Increased fees for quarterly permits and quarterly transferable permits within Business  Districts by $6.50.     Increased fees for annual permits within Business Districts by $26   Increased fee for one‐day parking permit in California Avenue Business District by $1   Increased fee for one‐day parking permit in University Avenue Business District by $1.50   Increased fee for quarterly permits and quarterly transferable permits within the University  Avenue Parking District by $11.50   Increased fee for annual permits within the University Avenue Parking District by $46     Revenue impact is minimal. Impact Fee updates are directed by ordinance. Contributing factors include changes in  the Consumer Price Index and changes in the construction cost index, which is derived from the Engineering News  Record.  Justification for the increases to the Transportation Fees is provided below.              APPENDIX 2 5/22/2013  University Avenue Parking Permit Fund    Several adjustments are recommended in the University Avenue Parking Permit Fund.  On April 23, 2013 City staff  met with the Palo Alto Business and Professional Association Parking Committee (Committee).  At that meeting, an  8.5% increase to the parking permit, day pass, and ticket machine fees was discussed, and is recommended for  approval via the attached revisions to the FY 2014 Proposed Municipal Fee Schedule (see Attachment 2).  Upon  approval of this increase, which was supported by the Committee, the University Avenue Parking District permits  will increase from $135/quarter and $420/annual in FY 2013 to $146.5/quarter and $466/annual in FY 2014. The  One‐Day Parking Permits for the district increase from $16/day to $17.50/day.    The 8.5% fee increase is anticipated to generate $118,915 in additional revenue in FY 2014, therefore an increase  to the budgeted revenue estimate is also recommended. This level of fee increase allows for numerous  improvements over the next five years within the district, while maintaining adequate reserve balances.   The  improvement projects are outlined in the proposed University Avenue Parking Improvements Project (see  Attachment 3, pp. 5‐6 PF‐14003).      California Avenue Parking Permit Fund    Several adjustments are recommended in the California Avenue Parking Permit Fund.  First, a 15% increase to the  fees is proposed.  This  increase, which is recommended for approval via the attached revisions to the FY 2014  Proposed Municipal Fee Schedule, will translates to an increase of $6.50 per quarterly and $26.00 per annual  permit fees, with day passes increasing by $1.00 (see Attachment 2).  The revenues generated by this fee increase,  and additional fee increases in future years, will fund necessary improvements within the California Avenue  Parking Permit District.   The  improvement projects are outlined in the proposed California Avenue Parking  Improvements Project (see Attachment 3, pp. 3‐4 PF‐14004).  While the 15% increase is anticipated to generate an  additional $25,000 annually, the additional revenue will be offset by lower than anticipated revenue for Parking  Permits and Day Passes.  Therefore, the overall 2014 budgeted revenue estimate is recommended to remain at  $195,000.      Public Works    Adjustments totaling a net reduction of $194,141 to the General Fund are recommended for the Public Works  Department.  As outlined for the Finance Committee on May 9, 2013, a change in the budgeting methodology for  the University Avenue and California Avenue Parking Permit Funds is recommended starting in FY 2014.   Previously, the expenses related to maintenance and administration of these funds were budgeted in the General  Fund and Refuse Fund, with those funds reimbursed by transfers from the Parking Permit Funds (primarily through  permit sales).  Beginning in 2014, the expenses for these funds are proposed to be budgeted directly in the parking  permit funds.  As staff was preparing all of the necessary changes, a few adjustments were inadvertently omitted.   Most of these adjustments were detailed at the May 9th Finance Committee meeting, including the reallocation of  benefits and other non‐salary expenses to the parking funds ($208,891).   One additional adjustment is  recommended.  A decrease of $40,250 to the Public Works General Fund budget is recommended, as these costs  ($40,000 for contract services and $250 for General Expenses) are now accounted for in the Parking Permit Funds.   No impacts are anticipated as a result of this reduction.      In addition, $15,000 in savings is available from funds previously allocated for engineering support related to the  potential infrastructure finance measure for the November 2014 ballot.   The 2014 Proposed Operating  Budget set aside one‐time funds for this purpose, however the department has projected savings in the current  year budget which can be used for this purpose.      Savings related to the parking funds and Infrastructure ballot measure are partially offset by a recommended  increase to contract funding associated with tree trimming.  This $70,000 increase is recommended as bids for tree  trimming services are coming in at higher than expected levels.    APPENDIX 2 5/22/2013    Vehicle Replacement Fund (See Attachment 3, pp. 7‐8)    The attached page for the  FY 2014 CIP VR‐14000 Scheduled Vehicle and Equipment Replacements is increased by  $300,000 from $2,700,000 to $3,000,000 and replaces pp. 370‐371 in the proposed capital book.  This increase  includes $100,000 to purchase and outfit a 2013 Chevy Suburban for the Fire Department.  This vehicle will replace  their current command unit #6059.  An additional $200,000 is needed for the purchase of an aerial ladder truck for  the Fire Department.  Subsequent to the development of the Proposed Capital Budget, a quote of $1,195,346 was  received which is approximately $200,000 above the original estimate.  Both of these items have been reviewed  and approved by the Fleet Review Committee.      Capital Projects Fund (See Attachment 3)    CIP PF‐07002 Baylands Interpretive Center Improvement (p. 73) is removed because it had already been included  in CIP PE‐14018 Baylands Interpretive Center Improvements and Boardwalk Repair (p. 74).    CIP PF‐01003 Building Systems Improvements (p. 77) is updated to reflect planned expenditures of $100,000 in FY  2018.  This amount had not been included in the Proposed Capital Budget document.    CIP PF‐14003 University Avenue Parking District Parking Improvements is established to account for capital work  for parking facility improvements as discussed above.  This project will be funded by the University Avenue Parking  Permit Fund.  Planned expenditures are:        FY 2014 340,900  FY 2015 234,800  FY 2016 122,900  FY 2017 93,900  FY 2018 117,600  Total 910,100    CIP PF‐14004 California Avenue Parking District Parking Improvements is established to account for capital work  for parking facility improvements as discussed above.  This project will be funded by the California Avenue Parking  Permit Fund.  Planned expenditures are:          FY 2014 186,400  FY 2015 0  FY 2016 0  FY 2017 0  FY 2018 222,800  Total 409,200        DEPARTMENT HEAD:                     LALO  PEREZ           Director, Administrative Services/CFO          CITY MANAGER:                      JAMES  KEENE           City  Manager  APPENDIX 2 For more information on impact fees and parkland dedication, refer to Palo Alto Municipal Code Chapters 16.45; 16.46;16.47; 16.57; 16.58; 16.59;16.60; and 21.50. Development Impact Fees PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Impact Fees (1) For the purposes of this fee, "single-family" is defined as a single dwelling unit that does not share a common wall with another dwelling unit. A second dwelling unit, as defined in 18.04.030 of the Palo Alto Municipal Code, is considered a multi-family unit for purposes of calculating this fee. Nonresidential: Commercial/Industrial, $243 per 1,000 square feet or fraction thereof; Hotel/Motel, $102 per 1,000 square feet or fraction thereof. FY 2014 FEE Residential: Single family $10,638/residence (or $15,885/residence larger than 3,000 square feet); Multi-family $6,963 unit (or $3,521/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $4,517 per 1,000 square feet or fraction thereof; Hotel/Motel, $2,043 per 1,000 square feet or fraction thereof. Residential: Single family1 $2,758/residence (or $4,129/residence larger than 3,000 square feet); Multi-family $1,815/unit (or $916/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $255 per 1,000 square feet or fraction thereof; Hotel/Motel, $115 per 1,000 square feet or fraction thereof. Residential: Single family $963/residence (or $1,434/residence larger than 3,000 square feet); Multi-family $565 unit (or $316/unit smaller than or equal to 900 square feet). Residential: Single family1 $963/residence (or $1,434/residence larger than 3,000 square feet); Multi-family $575/unit (or $316/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $4,518 per 1,000 square feet or fraction thereof; Hotel/Motel, $2,043 per 1,000 square feet or fraction thereof. Libraries Nonresidential: Commercial/Industrial, $243 per 1,000 square feet or fraction thereof; Hotel/Motel, $102 per 1,000 square feet or fraction thereof. FY 2013 FEE Residential: Single family1 $10,639/residence (or $15,887/residence larger than 3,000 square feet); Multi-family $6,964/unit (or $3,521/unit smaller than or equal to 900 square feet). Community Centers Residential: Single family1 $2,758/residence (or $4,129/residence larger than 3,000 square feet); Multi-family $1,815/unit (or $916/unit smaller than or equal to 900 square feet). Nonresidential: Commercial/Industrial, $255 per 1,000 square feet or fraction thereof; Hotel/Motel, $115 per 1,000 square feet or fraction thereof. Parks City of Palo Alto FY 2014 Municipal Fee Schedule 17-3 APPENDIX 2 PLANNING & COMMUNITY ENVIRONMENT DEPARTMENT Impact Fees FY 2014 FEEFY 2013 FEE Stanford Research Park/El Camino Real CS Zone San Antonio / West Bayshore Area Citywide Transportation Impact Fee Charleston/ Arastradero Parking in lieu fee for the Downtown Assessment District Only applies to residential projects that require a subdivision or parcel map. Land dedication is required for subdivisions resulting in more than 50 parcels. When parkland dedication applies, park impact fees (above) do not apply. $60,750 per parking space Land required: Single-family = 555 square feet / unit, Multi-family = 382 sq. ft. / unit In-lieu Fee: Single-family = $58,366/unit, Multi-family - $40,187/unit. $18.89 per square foot applies to nonresidential development $11.08 per net new square foot $2.28 per square foot $3,197 per net new PM peak hour trip $0.34 per square foot - commerical; $1,168 per residential unit $3,053 per net new PM peak hour trip Traffic Impact Fees $0.33 per square foot - commerical; $1,115 per residential unit $11.08 per net new square foot 18.44 per square foot applies to nonresidential development Housing Impact Fees $60,750/parking space Parkland Dedication Fee Land required: Single-family = 555 square feet / unit, Multi-family = 382 sq. ft. / unit In-lieu Fee: Single-family = $56,517/unit, Multi-family - $38,899/unit $2.28 per square foot City of Palo Alto FY 2014 Municipal Fee Schedule 17-4 APPENDIX 2 APPENDIX 2 City of Palo Alto - 8 - Fiscal Year 2014 Proposed Budget PF-01003Building Systems Improvements BUILDING SYSTEMS IMPROVEMENTS (PF-01003) CIP FACTS: • Project Type: Annual Recurring • Project Stage: Construction • Est. Timeline: Summer 2012-Spring 2018 • Managing Department: Public Works • IBRC Reference: Keep-up • Overall Project Completion: 0% • Location: Citywide • Potential Board/Commission Review: ARB, HRB IMPACT ANALYSIS: • Environmental: This project may require Miti- gated Negative Declaration if Historic Building. • Design Elements: This project may be subject to ARB and HRB review. • Operating: None Relationship to Comprehensive Plan Primary Connection • Element: Community Services & Facilities • Section: Parks & Public Faciliites • Goal: C-4 • Policy: C-24 • Program: C-19 Description: This project provides electrical, mechanical, and structural system upgrades as required at various City facilities. Upgrades may include main and emergency power sources, fixtures, fire alarm systems and devices, HVAC (inclugin adding air conditioning), and structural repairs or reinforcement. System upgrades required for code compliance are also provided through this project. Implementation of this plan is ongoing. See Supplemental Information for work in upcoming years. Justification: This project will allow upgrades to the electrical systems in facilities with systems that are overloaded or are no longer efficient. Due to increased usage of computers and other devices over the past ten years, many buildings' electrical or wiring systems are outdated and at- capacity. Heating and air-conditioning units in older buildings are at the end of their useful life. Structural systems have become damaged or fatigued due to heavier equipment requirements or increased loading. Supplemental Information: Department of Public Works uses a asset maintenance tracking software to identify the maintenance needs addressed through this CIP. Projects identified for upcoming work include: FY 2014 - Golf Course boiler replacement and City Hall chiller overhaul; FY 2015 - Art Center basement HVAC system and City Hall water pressure control system; FY 2016 - Fire Station 4 mechanical replacement and Junior Museum mechanical replacement; FY 2017 - Mitchell Park and Rinconada Park tennis court lighting replacement; FY 2018 - Utility Control Center boiler replacement and Utility Control Center boiler and chiller controls upgrade. APPENDIX 2 BUILDING SYSTEMS IMPROVEMENTS (PF-01003) CONTINUED - 9 -City of Palo Alto Fiscal Year 2014 Proposed Budget Prior Years Expended and Encumbered ongoing Continuing Appropriations $207,462 Expenditures FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Salaries and Benefits $12,440 $12,440 Design Costs Construction Costs $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 Other Total Budget Request $112,440 $100,000 $100,000 $100,000 $100,000 $512,440 Revenues FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Infrastructure Reserve $112,440 $100,000 $100,000 $100,000 $100,000 $512,440 Total Sources of Funds $112,440 $100,000 $100,000 $100,000 $100,000 $512,440 APPENDIX 2 City of Palo Alto - 10 - Fiscal Year 2014 Proposed Budget PF-14004California Avenue Parking District Parking Improvements CALIFORNIA AVENUE PARKING DISTRICT PARKING IMPROVEMENTS (PF-14004) CIP FACTS: NEW • Project Type: Annual Recurring • Project Stage: Construction • Est. Timeline: Spring 2014-Summer 2018 • Managing Department: Public Works IMPACT ANALYSIS: • Design Elements: Replacement of street furniture will require ARB review • Operating: Maintaining infrastructure will reduce repair workload Relationship to Comprehensive Plan Primary Connection • Element: Transportation • Section: Parking • Goal: T-8 • Policy: T-47 • Program: T-52 Description: Establishment of this CIP will provide for improvements in the California Avenue parking district. The type of improvements that would be funded are projects that are beyond routine maintenance and include such things as parking lot resurfacing, striping and signing; parking structure painting or staining; electrical system upgrades needed to support improved lighting, security, parking, fountains or other systems; replacement or rehabilitation of parking lot signs. Justification: In the past, larger infrastructure improvements in the downtown area have been done as the need arose, after discussions with the California Avenue Area Development Association. Due the timing of these discussions, it was sometimes difficult to insert these projects into the City’s budget process. An established, recurring CIP for the California Avenue area would better merge the improvement needs with the City’s internal budget process schedule. Supplemental Information: The completion of projects identified in this CIP are dependent upon the 15% increase proposed for Fiscal Year 2014, as well as additional fee increases in future years. FY 2014 projects: resurface and restripe Lot 7 (Sherman/Birch). FY 2018 projects: resurface and restripe Lot 8 (Sherman/Ash). APPENDIX 2 CALIFORNIA AVENUE PARKING DISTRICT PARKING IMPROVEMENTS (PF-14004) CONTINUED - 11 -City of Palo Alto Fiscal Year 2014 Proposed Budget Expenditures FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Salaries and Benefits Design Costs Construction Costs $186,400 $222,800 $409,200 Other Total Budget Request $186,400 $222,800 $409,200 Revenues FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding California Avenue Parking Per- mits Fund $186,400 $222,800 $409,200 Total Sources of Funds $186,400 $222,800 $409,200 APPENDIX 2 City of Palo Alto - 38 - Fiscal Year 2014 Proposed Budget PF-14003University Avenue Parking District Parking Improvements UNIVERSITY AVENUE PARKING DISTRICT PARKING IMPROVEMENTS (PF-14003) CIP FACTS: NEW • Project Type: Annual Recurring • Project Stage: Construction • Est. Timeline: Fall 2013-Summer 2018 • Managing Department: Public Works • Potential Board/Commission Review: ARB IMPACT ANALYSIS: • Design Elements: ARB review may be needed for any signage • Operating: Maintaining infrastructure will reduce repair workload Relationship to Comprehensive Plan Primary Connection • Element: Transportation • Section: Parking • Goal: T-8 • Policy: T-47 • Program: T-52 Description: Establishment of this CIP will provide for improvements in the University Avenue parking district. The improvements that would be funded are projects that are beyond routine maintenance, including parking lot resurfacing, striping and signing; parking structure painting or staining; electrical system upgrades needed to support improved lighting, security systems or other systems; design and installation of parking guidance technology to help drivers identify vacant parking spaces. Justification: In the past, larger infrastructure improvements in the downtown area have been done as the need arose, after discussions with the Chamber of Commerce Infrastructure Committee. Due the timing of these discussions, it was sometimes difficult to insert these projects into the City’s budget process. An established, recurring CIP for the downtown area would better merge the improvement needs with the City’s internal budget process schedule. Supplemental Information: The completion of projects identified in this CIP are dependent upon the 8.5% increase for parking permit, day pass, and ticket machine fees proposed for 2014. FY 2014 projects: resurface and restripe Lots A (Emerson/Lytton), H (Cowper/Hamilton) and D (Hamilton Waverly) ($90,900); restripe the Cowper/Webster garage and paint the interior so as to brighten its appearance ($175,000); parking garages security camera feasibility study and design ($25,000) FY 2015 projects: resurface and restripe Lots E (Gilman/Bryant) and G (Waverly/Gilman) ($34,800); installation of security cameras at downtown garages ($150,000). FY 2016 projects: resurface and restripe Lots N (Emerson/Hamilton), T (Lytton/Kipling), and P (High/Hamilton) FY2017 projects: resurface and restripe Lots O (Emerson/High) and F (Florence/Lytton) FY2018 projects: resurface and restripe Lots K (Lytton/Waverley) and C (Ramona/Lytton) Parking guidance system technology ($50,000 per year from FY 2014 to FY 2018) APPENDIX 2 UNIVERSITY AVENUE PARKING DISTRICT PARKING IMPROVEMENTS (PF-14003) CONTINUED - 39 -City of Palo Alto Fiscal Year 2014 Proposed Budget Expenditures FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Salaries and Benefits Design Costs $25,000 $25,000 Construction Costs $315,900 $234,800 $122,900 $93,900 $117,600 $885,100 Other Total Budget Request $340,900 $234,800 $122,900 $93,900 $117,600 $910,100 Revenues FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding University Avenue Parking Permits Fund $340,900 $234,800 $122,900 $93,900 $117,600 $910,100 Total Sources of Funds $340,900 $234,800 $122,900 $93,900 $117,600 $910,100 APPENDIX 2 City of Palo Alto - 4 - Fiscal Year 2014 Proposed Budget VR-14000Scheduled Vehicle and Equipment Replacements SCHEDULED VEHICLE AND EQUIPMENT REPLACEMENTS (VR-14000) CIP FACTS: NEW • Project Type: Nonrecurring • Project Stage: Other • Est. Timeline: Summer 2013-Spring 2014 • Managing Department: Public Works • Location: 3201 East Bayshore Road IMPACT ANALYSIS: • Environmental: This project is categorically exempt from CEQA under section 15301. • Design Elements: None • Operating: This project will generate ongoing maintenance and replacement costs. Relationship to Comprehensive Plan Primary Connection • Element: Natural Environment • Section: Air Quality • Goal: N-5 • Policy: N-26 • Program: N-41 Description: This project will involve the scheduled replacement of existing City fleet vehicles and equipment for Fiscal Year 2014. A total of 20 vehicles and pieces of equipment will be replaced under this project. Significant purchases include a Fire aerial truck ($1.2M), paint truck ($200,000), lift truck ($267,000) and fork lift ($150,900). All vehicle replacements will be reviewed by the Fleet Review Committee prior to the acquisition process. Justification: The ongoing replacement of City fleet vehicles and equipment is prescribed by City Policy and Procedures Section 4-01. The policy includes guidelines for these replacements based on age, mileage accumulation, and obsolescence. Timely replacement of vehicles lowers maintenance costs, helps to maintain or even increase the productivity of client departments, and allows the City to take advantage of new technology. Supplemental Information: 20 vehicles and pieces of equipment are scheduled for replacement in FY 2014, this includes six patrol vehicles, fire department aerial truck, five trucks, an asphalt paver, two backhoes, a turf mower, and a van as well as the significant purchases mentioned above. Although a large number of vehicle and equipment replacements were completed in FY 2013, a significant backlog of pending replacements still exists which presents a significant liability in terms of increased maintenance costs, reduced efficiency and productivity, and regulatory compliance. All of the vehicles proposed for replacement are well beyond existing replacement guidelines for age and mileage accumulation. APPENDIX 2 SCHEDULED VEHICLE AND EQUIPMENT REPLACEMENTS (VR-14000) CONTINUED - 5 -City of Palo Alto Fiscal Year 2014 Proposed Budget Expenditures FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Salaries and Benefits Design Costs Construction Costs Other $3,000,000 $3,000,000 Total Budget Request $3,000,000 $3,000,000 Revenues FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding Vehicle Replacement Fund $3,000,000 $3,000,000 Total Sources of Funds $3,000,000 $3,000,000 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 APPENDIX 2 5/22/2013 1 City Manager’s Proposed Budget Finance Committee May 7, 2013 2 Date Meeting Time/Location Agenda Tues, 5/7 Finance Committee Special Meeting 6PM, Chambers Budget Kickoff; Departments:  ‐ Council Appointed Officials & Council ‐ HR, Employee Benefits Funds  ‐ General Liability Fund  ‐ IT Department (capital & operating)                         ‐ ASD/Printing & Mailing Fund Thurs, 5/9 Finance Committee Special Meeting 6PM, Chambers ‐ HSRAP                                                                              ‐ CSD ‐ Library ‐ Planning Tues, 5/14 Finance Committee Special Meeting 6PM, Chambers ‐ Police, Fire & Office of Emergency Services  ‐ Utilities (capital & operating)                                   ‐ Power Purchase Agreements for Project Output  from Three Solar Photovoltaic Facilities ‐ Muni Fees Thurs, 5/16 Finance Committee Special Meeting 6PM, Chambers ‐General Fund Capital                                                     ‐Public Works: General Fund, Storm Drain,  Refuse, Wastewater Treatment, Vehicle  Replacement, Airport, related capital  ‐ Special Revenue Funds (including Parking District  & Stanford Devl Agreement Fund)                                ‐ Non‐departmental Thurs, 5/23 Finance Committee Special Meeting 6PM, Chambers ‐ Wrap up with Finance Committee ‐ Management Compensation Study Mon, 6/3 City Council 6PM, Chambers Public Hearing ‐ Utility Rates (Prop 218); Budget  adoption Mon, 6/10 City Council 6PM, Chambers Public Hearing ‐ Budget adoption City of Palo Alto Council & Finance Committee Budget Hearings Fiscal Year 2014 Budget Process General Fund FY 2013 Adopted Compared to FY 2014 Proposed Proposed Operating Budget, p. xix FY 2013 Adopted Budget ‐ BSR draw ($390) Revenue Changes or Enhancements Tax revenues $5,764 Golf reconfiguration project revenue impact (1,312)      Plan check and permitting revenue 3,974       Equity transfer adjustment (725)         Other revenue adjustments (141)         Total Revenue Changes $7,560 Ongoing Expense Changes Salary & benefit adjustments for pension/healthcare increases $4,036 Unfreeze 7 positions in public safety 1,224       Net department position requests 129           Police overtime adjustment 532           Planning and Community Environment & Development Services contract expense 1,388       Final Technology Loan payment in FY 2013 (1,220)      Other ongoing expense changes (209)         Subtotal ‐ Ongoing Expense Changes 5,880       One‐Time Expense Changes Library collection materials funded by Library Foundation 500           Planning and Community Environment & Development Services contract expense 755           Golf Course reconfiguration project (567)         Other one‐time expense changes 382           Subtotal ‐ One‐time Expense Changes 1,070       Total Expense Changes $6,950 Net General Fund Change $610 FY 2014 Proposed Budget ‐ BSR contribution $220 3 4 General Fund Overview Proposed Operating Budget, pp. 31‐44 5.0% rev increase 4.6% exp increase Pension, $0.2M; Healthcare, $1.1M; Retiree ARC, $0.2M $0.2M surplus $30.5M BSR balance, 19.1% of proposed budget General Fund Major Revenues 5 General Fund Revenue by Type $160 Million 6 Sales Tax, $23,846 ,  15% Property Tax, $29,102  , 18% Transient Occupancy  Tax, $11,545 , 7% Document Transfer  Tax, $5,699 , 4%Utility Users Tax ,  $11,013 , 7% Other Taxes and  Fines, $2,107 , 1% Charges for Services,  $24,379 , 15% Permits & Licenses,  $8,346 , 5% Return on  Investment ,  $769 , 1% Rental Income,  $12,891 , 8% From other Agencies,  $168 , 0% Charges to other  Funds, $10,574 , 7% Other Revenue,  $2,010 , 1% Operating Transfers‐ In, $17,529 , 11% APPENDIX 3 5/22/2013 2 General Fund Expenditures 7 Administration Public Works Planning Police Fire CSD and Library $5 $8 $11 $14 $17 $20 $23 $26 $29 $32 $35 Mill i o n s General Fund Expense by Category $159.8 Million 8 Salaries & Benefits ,  $93, 61%Contract Services ,  $12, 8% Supplies & Materials ,  $3, 2% General Expense, $10,  7% Rents and Leases, $1,  1% Facilities and  Equiptment, $1, 0% Allocated Charges,  $17, 11% Contingent Acct, $1,  0% Operating Trans‐Out ,  $15, 10% 9 Citywide Budget Summary (in millions) Operating Capital Total Percent of Total GeneralFund $159.8 $18.5 $178.3 38% Enterprise Funds $263.8 $23.3 $287.1 62% Total $423.6 $41.8 $465.4 100% This table does not include Internal Service Fund expense. Capital Projects by Fund $60 Million 10 Capital Project Fund  (General Fund),  $19,790 , 34% Vehicle Replacement  Fund, $1,225 , 2% Technology Fund,  $2,492 , 4% Electric Fund, $10,910 ,  19% Fiber Optics Fund, $400  , 1% Gas Fund, $7,756 , 13% Water Fund,  $6,115 , 10% Wastewater Collection  Fund, $4,404 , 8% Wastewater Treatment  Fund, $2,600 , 4% Storm Drain Fund,  $3,130 , 5% 11 Enterprise Funds Overview Proposed Operating Budget, pp. 47‐56 •Water rate increase: 7% •Gas: shift in gas purchasing strategy to market-based supply rates •Refuse rate increase: varies, above reflects 32-gal can •Storm Drain & Fiber Optics rate increase 2.2% (CPI) Utility  Current  FY 2013 Bill   Proposed  FY 2014 Bill   $ Difference % Difference Electric $42.76 $42.76 $0.00 0.0% Water 62.14                   67.35                   5.21                      8.4% Gas 49.67                   39.27                   (10.40)                   ‐20.9% Wastewater 29.31                   29.31                    ‐                        0.0% Refuse 41.54                   41.54                    ‐                        0.0% Storm Drain 11.73                   11.99                   0.26                      2.2% User Tax 7.73                      7.47                      (0.26)                     ‐3.4% Total Monthly Bill $244.88 $239.69 ($5.19)‐2.1% Citywide Position Changes Proposed Operating Budget, pp. 328‐346 *Other Funds are Internal Service Funds and the Capital Fund**Includes 2 Library Frozen FTECitywide FTE in FY 2011 was 1,078.50 FTE 12 GF ENT Other* Total FY 2013 Adopted FTE 578.06 357.82 78.47 1,014.35 Midyear Changes 1.65 - (0.65) 1.00 FY 2013 Adjusted FTE’s 579.71 357.82 77.82 1,015.35 Reallocations (1.86) (6.12) 7.98 - Eliminations/Adds (1.05) 1.85 2.20 3.00 Net FY 2014 Proposed Changes (2.91) (4.27) 10.18 3.00 FY 2014 Proposed Budget** 576.80 353.55 88.00 1,018.35 APPENDIX 3 5/22/2013 3 13 Citywide Changes Change in salary budgeting methodology,  $1.5M Personnel Benefits –General Benefits Internal Service Fund, $3.2M •Pension, $0.7M; healthcare, $2.4M –Retiree Actuarial Required Contribution (ARC),  ($1.3M) Allocated Charges –Technology Fund, ($2M) –General Fund cost allocation plan, ($0.3M) 14 Salary Budgeting Methodology General Fund 000s    Difference between control point and actual (56)$             1) Related to new management compensation plan    Increases above mid point (performance based)225$               Management Compensation study reserve for       market adjustments in FY 2013 310                   Total 535              2) 2% potential performance based salary increases for    mgmt and SEIU employees 589              3) Salary budget for merit increases (mgmt, safety, SEIU)571              4) Pension: elect to not smooth the 0.25% discount    rate decrease impact over two years 602              5) Attrition (2,000)          Total General Fund salary and benefit reserve 297$            15 Questions Finance Committee Budget Process Proposed Budget FY 2014 16 City Attorney, pp. 79‐86  Expense: None FTE Changes: None Other Changes: Decrease Attorney Contingency Account  by $50,000 (in non‐departmental) Proposed Budget FY 2014 Department Changes 17 City Auditor, pp. 87‐96  Expense : $41,848 Staffing changes $33,348 Ethics Hotline annual costs $3,000 Reallocate Development Funds $5,500 FTE Changes : 0.18 FTE  Add 0.5 FTE Performance Auditor Eliminate 0.32 FTE Hourly Staff Proposed Budget FY 2014 Department Changes 18 City Clerk, pp. 96‐103  Expense : ($332,820) Eliminate 1.0 FTE Admin. Assoc. III ($110,472) Minutes Transcription Contract $56,000 Removal of Election Costs ($282,098) Reallocate Development Funds $3,750 FTE Changes : (1.0 FTE) Eliminate 1.0 FTE Administrative Associate III  Proposed Budget FY 2014 Department Changes APPENDIX 3 5/22/2013 4 19 City Council, pp. 104‐106 Expense : $25,000 Council Meetings $5,000 Council Travel & Training $5,000 Council Meals $15,000 FTE Changes : None Proposed Budget FY 2014 Department Changes 20 City Manager, pp. 107‐115 Expense : ($94,683) Staffing changes ($127,683) Communications Outreach $25,000 Reallocate Development Funds $8,000 FTE Changes : (0.5 FTE) Eliminate 0.5 FTE Deputy City Manager Drop 0.05 FTE Assistant to the City Manager Add 0.05 FTE Chief Sustainability Officer Proposed Budget FY 2014 Department Changes 21 Office of Sustainability, pp. 117‐120 Expense : $23,023 Staffing changes $23,023 FTE Changes : 0.0 FTE Drop 0.5 FTE Assistant to the City Manager Add 0.5 FTE Chief Sustainability Officer Proposed Budget FY 2014 Department Changes 22 People Strategy & Operations, pp. 147‐155  Expense: $34,000 City Wellness Program $30,000 New Employee Orientation $4,000 HRIS Planning Consultant $50,000 (Exhibit 2) FTE Changes : $93,466 Reduce 1.0 FTE HR Representative, add 1.0 FTE  Benefits Manager, $50,642 Midyear reclassifications $42,824 Proposed Budget FY 2014 Department Changes 23 Proposed Budget FY 2014 Workers’ Compensation Fund, pp. 162‐165 Expense: $321,492 ‐Workers’ Comp Assessment Fees $29,148 ‐Estimated Claims Paid $206,480 ‐Umbrella Excess Liability $85,864 Revenue: $321,492 24 Proposed Budget FY 2014 General Benefits Fund, pp. 327‐329 Expense: $3.16M –Net pension increase, $0.74M –Net healthcare increase, $2.4M –Other benefits & admin fee increases, $0.02M Revenue: $3.16M APPENDIX 3 5/22/2013 5 25 Proposed Budget FY 2014 Retiree Medical Fund, pp. 326‐327 Expense: ($1.3M) ARC increase: $0.3M, 2.2% Employee medical contribution: $1.5M Next actuarial update will be as of June 30,  2013 26 Proposed Budget FY 2014 General Liability Insurance Fund, pp. 159‐161 Expense: $125,225 ‐Umbrella Excess Liability $74,654 ‐Property Loss & Special Liability Insurance $45,571 Revenue: $125,225 27 Proposed Budget FY 2014 Information Technology, pp. 163‐173 Revenue Changes Operating Reimbursements ($2,043,000);  Recommended $50,0000 Exhibit B increase Capital Projects Transfer: ($1,327,000) Technology Fee: $376,000 Interest Earnings $63,000 28 Information Technology  (Cont’d.) Expenditures SAP Database Archiving Solution:  $150,000 Enterprise Resource Planning Evaluation:  $150,000 Cloud‐Based Communication and  Productivity Suite:  $150,000 29 Information Technology  (Cont’d.) Expenditures Public Safety Business Intelligence and  Mobile Records:  $61,000 Police Scheduling Software: Exhibit B  Adjustment:  $50,000 Various Non‐Salary Adjustments ($125,000) Reduced CIP expenses ($2.2 million) 30 Information Technology  (Cont’d.) FTE Changes Eliminate 3.38 hourly positions: ($236,000) Add 1.0 Technologist: $171,000 Reallocate 0.35 FTE to Administrative  Services Department: ($74,000) Reallocate 1.0 Senior Technologist from  Utilities and PW Enterprise Funds  (Recommend reversal of this action in  Exhibit B) APPENDIX 3 5/22/2013 6 31 Proposed Capital Budget Technology Projects, pp. 375‐381 Acquisition of New Computers:  $75,000 Library Virtual Branch:  $100,000 Radio Infrastructure Replacement:  No  Funding in 2014, funding begins again in  2015 Utilities Customer Billing System  Continuous Improvements:  $250,000 32 Administrative Services, pp. 121‐130  Revenue Easement fee, sale of salvage, and  miscellaneous revenue $38,000 Expense : $1,000 Bankcard charges $25,000 Supplies moved to parking permit funds  ($24,000) Proposed Budget FY 2014 Department Changes 33 Administrative Services (cont’d) FTE Changes : $25,310 0.10 FTE net reallocations from Utilities $6,639 0.35 FTE reallocations from IT $74,338 1.66 FTE reallocations to Parking Permit Funds  ($174,321) 0.05 FTE reallocation from Printing and Mailing  Fund $6,733 Increase temporary salaries $111,921 34 Printing and Mailing Fund, pp. 131‐133  FTE Changes: Reallocate 0.05 Buyer to General Fund  ($6,733) Proposed Budget FY 2014 Department Changes 35 Contact info: Lalo Perez Administrative Services Director/CFO City of Palo Alto  Administrative Services Department  Ph: (650) 329‐2692 Email: Lalo.Perez@cityofpaloalto.org  URL: cityofpaloalto.org/asd 36 City Manager’s Proposed Budget Finance Committee May 7, 2013 APPENDIX 3 5/22/2013 1 1 City Manager’s Proposed Budget Finance Committee May 9, 2013 2 Date Meeting Time/Location Agenda Tues, 5/7 Finance Committee Special Meeting 6PM, Chambers Budget Kickoff; Departments:  ‐ Council Appointed Officials & Council ‐ HR, Employee Benefits Funds  ‐ General Liability Fund  ‐ IT Department (capital & operating)                         ‐ ASD/Printing & Mailing Fund Thurs, 5/9 Finance Committee Special Meeting 6PM, Chambers ‐ HSRAP                                                                              ‐ CSD ‐ Library ‐ Planning Tues, 5/14 Finance Committee Special Meeting 5PM, Chambers ‐Utilities (capital & operating)                                    ‐ Power Purchase Agreements for Project Output  from Three Solar Photovoltaic Facilities Thurs, 5/16 Finance Committee Special Meeting 4PM, Chambers ‐Police, Fire & Office of Emergency Services             ‐General Fund Capital                                                    ‐Muni Fees                                                                        ‐Public Works: General Fund, Storm Drain,  Refuse, Wastewater Treatment, Vehicle  Replacement, Airport, related capital  ‐ Special Revenue Funds (including Parking District  & Stanford Devl Agreement Fund)                                ‐ Non‐departmental Thurs, 5/23 Finance Committee Special Meeting 6PM, Chambers ‐ Wrap up with Finance Committee ‐ Management Compensation Study Mon, 6/3 City Council 6PM, Chambers Public Hearing ‐ Utility Rates (Prop 218); Budget  adoption Mon, 6/10 City Council 6PM, Chambers Public Hearing ‐ Budget adoption City of Palo Alto Council & Finance Committee Budget Hearings Fiscal Year 2014 Budget Process 3 Community Services Department, Page  134‐146  Revenue : ($1,363,589) Proposed Budget FY 2014 Department Changes 4 Community Services (continued) Expense : $289,141 Golf Course Reconfiguration (one‐time) ($567,417) Marketing Outreach (one‐time) $50,000 Art Center Foundation Contribution $56,000 Increase in Recreation Programs $92,000 Enjoy! Catalog $58,000 Special Events Contract $50,000 CIP Projects Transferred to Operating Budget $55,000 Mediation Contracts $7,000 Expenses Moved to Parking District Fund ($23,826) Overtime Increase for Special Events $10,000 Other Staffing Changes (Outlined on next slide) $502,205 Other Changes $179 5 Community Services (continued) FTE Changes: 10.41 Regular Staff 0.57 FTE Increase Volunteer Coordinator 0.25 FTE Reclassify and Increase Program  Assistant I to Program Assistant II 0.25 FTE Add Heavy Equipment Operator 0.07 FTE Hourly Staff 9.84 FTE Increase Temporary Staffing to Meet  Operational Needs 6.84 FTE Art Center Foundation Contribution 0.50 FTE Increase Recreation Programs 2.00 FTE Add Management Specialist 0.50 FTE 6 Highlight on Golf Reconfiguration FY13 Projected FY14 Proposed FY15 Projection FY16 ProjectionRevenue Fee Revenue $2,209,952 $1,564,650 $99,044 $3,008,500  Other Revenue $125,120 $103,332 $61,968 $119,500  Total Revenue $2,335,072 $1,667,982 $161,012 $3,128,000  Expense Golf Maintenance $832,351 $616,974 $686,698 $797,596  Management Contract $605,677 $464,898 $115,975 $589,146  Other Operating Costs $728,605 $635,678 $541,998 $629,960  Total Expense $2,166,633 $1,717,550 $1,344,671 $2,016,701  Income from  Operations $168,439 ($49,568) ($1,183,658) $1,111,299  Less Debt Service ($428,180) ($429,020) ($428,194) ($430,790) Less Cost Plan ($23,327) ($25,317) ($27,849) ($30,634) Net Income or (Loss) ($283,067) ($503,905) ($1,680,139) $609,437 Net Impact ($1,857,674) APPENDIX 3 5/22/2013 2 7 Library, pp. 174‐183  Revenue : $443,250 Library Foundation Donation $500,000 Reduced fees, fines, sales ($56,650) Proposed Budget FY 2014 Department Changes 8 Library (cont.) FTE Changes : $270,022 Unfreeze 1.0 FTE Asst. Director, 1.0 FTE Library  Services Manager, 1.0 FTE Librarian $402,222 Midyear increase of 0.50 FTE $44,513 Temporary salaries decrease ($151,713) Reduce overtime ($25,000) 9 Library (cont.) Other Changes: $720,000 Library strategic plan $57,000 Link + $50,000 Collection digitization $30,000 Historical Association $2,000 Increase Library collections $550,000 Misc. supplies $3,900 Memberships, Training $9,700 Equipment, Furniture $10,700 Digital signage $6,700 10 Proposed Budget FY 2014 Planning and Community Environment,  pp. 184‐198 Revenue changes:  $4.0 million Personnel changes $365,000; Net add of 1.8  FTE Non‐salary changes:  $2.1 million One‐time changes:  $755,000 Ongoing changes:  $1.3 million 11 Planning and Community  Environment (continued) Department Changes:  Revenues: $4.0 million increase Net Expenditure increase of $2.5 million  Analysis of current and projected activity  levels: $2.3 million increase Restructuring of deposit accounts:  $1.5  million increase Construction and Demolition permit fees  previously recognized in Refuse Fund: $0.2  million 12 Planning and Community  Environment (continued) Development Services FTE Changes: (‐2.0 FTE,            ‐$465,000)  Eliminate 5.0 FTE Vacant Positions:  1.0 Assistant Building Official, 2.0 Building Inspector, 1.0  Plans Examiner, 1.0 Plans Check Engineer: ($755,000) Add 2.0 FTE: 1.0 Administrative Associate III and 1.0 Administrative  Assistant:  $130,000 Transfer 1.0 Associate Planner from Public Works: $137,000 Various Reclassifications: $23,000 APPENDIX 3 5/22/2013 3 13 Planning and Community  Environment (continued) Planning FTE Changes:  (4.0 FTE, $670,000) Add 5.0 FTE: 1.0 Sr. Planner, 1.0 Planning Manager: $354,000 2.0 Planning/Building Technician:  $222,000 1.0 Senior Project Engineer:  $154,000 Eliminate 1.0 Engineering Technician: ($77,000) Reclass 1.0 Administrator to Senior Management  Analyst: $17,000 14 Planning and Community  Environment (continued) Development Services Department Changes  (Non Salary/Benefits): Restructuring of deposit accounts: $1.4  million Scanning services contract: $145,000 Development Center Lease: $23,000 Other adjustments: ($13,000) 15 Planning and Community  Environment (continued) Planning Department Changes (Non  Salary/Benefits): 27 University Avenue Community  Engagement Process: $250,000, one time  Downtown Parking Study: $250,000, one  time Comprehensive Plan Update: $105,000, one  time) Climate Protection Plan Update: $50,000, one time)  16 Contact info: Lalo Perez Administrative Services Director/CFO City of Palo Alto  Administrative Services Department  Ph: (650) 329‐2692 Email: Lalo.Perez@cityofpaloalto.org  URL: cityofpaloalto.org/asd 17 City Manager’s Proposed Budget Finance Committee May 9, 2013 APPENDIX 3 5/22/2013 1 1 City Manager’s Proposed Budget Finance Committee May 14, 2013 2 Date Meeting Time/Location Agenda Tues, 5/7 Finance Committee Special Meeting 6PM, Chambers Budget Kickoff; Departments:  ‐ Council Appointed Officials & Council ‐ HR, Employee Benefits Funds  ‐ General Liability Fund  ‐ IT Department (capital & operating)                         ‐ ASD/Printing & Mailing Fund Thurs, 5/9 Finance Committee Special Meeting 6PM, Chambers ‐ HSRAP                                                                              ‐ CSD ‐ Library ‐ Planning Tues, 5/14 Finance Committee Special Meeting 5PM, Chambers ‐Utilities (capital & operating)                                    ‐ Power Purchase Agreements for Project Output  from Three Solar Photovoltaic Facilities Thurs, 5/16 Finance Committee Special Meeting 4PM, Chambers ‐Police, Fire & Office of Emergency Services             ‐General Fund Capital                                                    ‐Muni Fees                                                                        ‐Public Works: General Fund, Storm Drain,  Refuse, Wastewater Treatment, Vehicle  Replacement, Airport, related capital  ‐ Special Revenue Funds (including Parking District  & Stanford Devl Agreement Fund)                                ‐ Non‐departmental Thurs, 5/23 Finance Committee Special Meeting 6PM, Chambers ‐ Wrap up with Finance Committee ‐ Management Compensation Study Mon, 6/3 City Council 6PM, Chambers Public Hearing ‐ Utility Rates (Prop 218); Budget  adoption Mon, 6/10 City Council 6PM, Chambers Public Hearing ‐ Budget adoption City of Palo Alto Council & Finance Committee Budget Hearings Fiscal Year 2014 Budget Process 3 Utilities Department, pp. 273‐316  Rate Adjustments Electric: no rate change Fiber Optics: 2.2% CPI adjustment Gas: no rate change Water: 7% increase Wastewater Collection: no rate change Proposed Budget FY 2014 Department Summary 4 Proposed Budget FY 2014 5 Utilities Department, pp. 273‐316  Position Changes, net 1.5 FTE increase Add 1.0 Credit Collections Specialist Drop hourly Admin. Spec. II Net impact to budget‐$60,335 increase Add 1.0 Coordinator, Utilities Project Drop 0.5 Program Assistant I Amendment required to restore original proposal Drop 1.0 Program Assistant I Net impact to budget‐$94,686 increase Proposed Budget FY 2014 Department Summary 6 Electric Fund, pp. 284‐291 (Operating)  No net revenue change Customer Sales: ($1.1 million) Carbon Cap and Trade Program: $1.7 million Decrease interest income: ($0.4 million) Proposed Budget FY 2014 Utilities Department Summary APPENDIX 3 5/22/2013 2 7 Electric Fund, pp. 284‐291 (Operating)  Expense decrease: ($1.1 million) Increase commodity purchases: $1.5 million Decrease equity transfer to General Fund:  ($0.6 million) Decrease Capital Improvement Program: ($2.3  million) Increase Emerging Technology Demonstration  Program: $0.1 million Proposed Budget FY 2014 Utilities Department Summary 8 Electric Fund, pp. 197‐242 (Capital)  FY 2014 Expenditures: $8.6 million Smart grid technology: $1.0 million LED streetlight conversion: $0.5 million Customer connections: $2.2 million System improvements: $2.4 million Undergrounding projects: $0.9 million Proposed Budget FY 2014 Utilities Department Summary 9 Electric Fund, pp. 284‐291 (Operating)  Proposed Budget FY 2014 Utilities Department Summary 10 Electric Fund, pp. 284‐291 (Operating)  Based on Palo Alto’s median residential usage levels of 365 kWh/month in  the summer months (May‐Oct) and 453 kWh/month in the winter months  (Nov‐Apr) FY 2014 proposed Palo Alto monthly median rate is unchanged Proposed Budget FY 2014 Utilities Department Summary 11 Fiber Optics Fund, pp. 292‐296 (Operating)  Revenue increase: $0.3 million 2.2% CPI rate adjustment for rate schedules  EDF‐1 and EDF‐2 Fiber network to serve all 18 PAUSD schools Expense increase: $0.1 million Increase salaries and benefits: $0.1 million Proposed Budget FY 2014 Utilities Department Summary 12 Fiber Optics Fund, pp. 243‐248 (Capital)  FY 2014 Expenditures: $0.4 million Network system improvements: $0.2 million Customer connections: $0.2 million Proposed Budget FY 2014 Utilities Department Summary APPENDIX 3 5/22/2013 3 13 Fiber Optics Fund, pp. 292‐296 (Operating)  Proposed Budget FY 2014 Utilities Department Summary 14 Wastewater Collection Fund, pp. 297‐302  (Operating)  Revenue increase: $0.1 million No rate increase Increase from connection charges: $0.1 million Proposed Budget FY 2014 Utilities Department Summary 15 Wastewater Collection Fund, pp. 297‐302  (Operating)  Expense decrease: ($3.4 million) Decrease Capital Improvement Program: ($3.4  million) WWC system rehab/aug. projects backlog is  being addressed Project 26 construction delayed to FY 2015 Proposed Budget FY 2014 Utilities Department Summary 16 Wastewater Collection Fund, pp. 309‐330  (Capital)  FY 2014 Expenditures: $1.0 million Sewer system extensions: $0.4 million Sewer lateral/manhole rehab/replacement:  $0.1 million WWC system improvements: $0.2 million WWC system rehab/augmentation Project 26:  $0.3 million Proposed Budget FY 2014 Utilities Department Summary 17 Wastewater Collection Fund, pp. 297‐302  (Operating)  Proposed Budget FY 2014 Utilities Department Summary 18 Wastewater Collection Fund, pp. 297‐302  (Operating)  Palo Alto residential charges are fixed monthly charges Proposed Budget FY 2014 Utilities Department Summary APPENDIX 3 5/22/2013 4 19 Gas Fund, pp. 303‐310 (Operating)  Revenue decrease: ($0.7 million) Market‐based pricing for natural gas supply Median monthly residential bill will vary  depending on actual gas market prices Proposed Budget FY 2014 Utilities Department Summary 20 Gas Fund, pp. 303‐310 (Operating)  Expense decrease: ($7.7 million) Decrease gas commodity purchases: ($1.1  million) Decrease Capital Improvement Program: ($6.2  million) Gas main replacement projects backlog is  being addressed Cross‐bore inspection program One‐time funding FY 2013 ($0.5 million) Proposed Budget FY 2014 Utilities Department Summary 21 Gas Fund, pp. 249‐277 (Capital)  FY 2014 Expenditures: $1.6 million Gas system extensions: $0.7 million Gas meters and regulators: $0.3 million Gas system improvements: $0.2 million Proposed Budget FY 2014 Utilities Department Summary 22 Gas Fund, pp. 303‐310 (Operating) Proposed Budget FY 2014 Utilities Department Summary 23 Gas Fund, pp. 303‐310 (Operating) Based on median residential usage levels of 18 therms per month in the  summer months (May‐Oct) and 54 therms per month in the winter months  (Nov‐Apr). Proposed Budget FY 2014 Utilities Department Summary 24 Water Fund, pp. 311‐316 (Operating)  Revenue increase: $0.8 million 7% rate increase Effective July 1, 2013 Proposed Budget FY 2014 Utilities Department Summary APPENDIX 3 5/22/2013 5 25 Water Fund, pp. 311‐316 (Operating)  Expense decrease: ($1.2 million) Increase in water purchase costs from SFPUC:  $0.8 million Decrease in Capital Improvement Program:  ($0.9 million) Decrease in operating transfers to other funds:  ($1.3 million) Proposed Budget FY 2014 Utilities Department Summary 26 Water Fund, pp. 311‐316 (Operating)  Amendment to Proposed Budget: Decrease allocated charges from Wastewater  Treatment Fund: ($7,000) Water Quality Control Plant lab charges Align budget with expected actuals Proposed Budget FY 2014 Utilities Department Summary 27 Water Fund, pp. 279‐308 (Capital)  FY 2014 Expenditures: $5.2 million Water main replacement Project 25: $2.7  million Water main replacement Project 26: $0.5  million Water system extensions: $0.4 million Water meters: $0.4 million Proposed Budget FY 2014 Utilities Department Summary 28 Water Fund, pp. 311‐316 (Operating)  Proposed Budget FY 2014 Utilities Department Summary 29 Water Fund, pp. 311‐316 (Operating)  FY 2014 proposed Palo Alto monthly median rate is $67.35 Proposed Budget FY 2014 Utilities Department Summary 30 Questions Proposed Budget FY 2014 APPENDIX 3 5/22/2013 6 31 Contact info: Lalo Perez Administrative Services Director/CFO City of Palo Alto  Administrative Services Department  Ph: (650) 329‐2692 Email: Lalo.Perez@cityofpaloalto.org  URL: cityofpaloalto.org/asd 32 City Manager’s Proposed Budget Finance Committee May 14, 2013 APPENDIX 3 5/22/2013 1 1 City Manager’s Proposed Budget Finance Committee May 16, 2013 2 Date Meeting Time/Location Agenda Tues, 5/7 Finance Committee Special Meeting 6PM, Chambers Budget Kickoff; Departments:  ‐ Council Appointed Officials & Council ‐ HR, Employee Benefits Funds  ‐ General Liability Fund  ‐ IT Department (capital & operating)                         ‐ ASD/Printing & Mailing Fund Thurs, 5/9 Finance Committee Special Meeting 6PM, Chambers ‐ HSRAP                                                                              ‐ CSD ‐ Library ‐ Planning Tues, 5/14 Finance Committee Special Meeting 5PM, Chambers ‐Utilities (capital & operating)                                    ‐ Power Purchase Agreements for Project Output  from Three Solar Photovoltaic Facilities Thurs, 5/16 Finance Committee Special Meeting 4PM, Chambers ‐Police, Fire & Office of Emergency Services             ‐General Fund Capital                                                    ‐Muni Fees                                                                        ‐Public Works: General Fund, Storm Drain,  Refuse, Wastewater Treatment, Vehicle  Replacement, Airport, related capital  ‐ Special Revenue Funds (including Parking District  & Stanford Devl Agreement Fund)                                ‐ Non‐departmental Thurs, 5/23 Finance Committee Special Meeting 6PM, Chambers ‐ Wrap up with Finance Committee ‐ Management Compensation Study Mon, 6/3 City Council 6PM, Chambers Public Hearing ‐ Utility Rates (Prop 218); Budget  adoption Mon, 6/10 City Council 6PM, Chambers Public Hearing ‐ Budget adoption City of Palo Alto Council & Finance Committee Budget Hearings Fiscal Year 2014 Budget Process 3 Police Department, pp. 222‐233 Revenue Changes : $253,948 •Parking Revenue Increase $100,000 •Animal Services Revenue Increase $97,148 •Massage Ordinance Revenue $3,500 •Transfer from Radio Maintenance CIP $42,000 •Grant for 911 Maintenance $11,300 Proposed Budget FY 2014 Department Changes 4 Police Department (continued) Expense : $449,821 Unfreeze 7.0 FTE Sworn Positions $1,223,007 Budget Overtime to Historical Trends $532,100 Other Staffing Changes ($30,808) Negotiated Benefit Savings with PAPOA ($1,376,271) Cal‐ID Contract Increase $10,500 Background Check Contract Increase $10,000 SVRIA Annual Increase $8,000 Radio Maintenance Contract Increase $42,000 911 Maintenance Increase $11,300 Other Changes $19,993 Exhibit 2 Request: Police Scheduling Software  (tentatively approved on May 7th with I.T. Dept) $50,000 5 Police Department (continued) FTE Changes: (1.22 FTE) Add Sr. Management Analyst 1.00 FTE Reallocate GIS Specialist from Fire 0.50 FTE Animal Services Staff Reductions (2.60 FTE) Add regular Animal Control Officer 0.50 FTE Eliminate temporary Animal  Control Officer (0.50 FTE) Other temporary staffing changes (0.12 FTE) 6 Police Department (continued) Palo Alto Animal Services Projected net cost in FY 2013 is  approximately $406,000 Includes one‐time donations FY 2014 net cost is estimated to be  $587,000; target is $500,000 Includes the full impact of losing Mt.  View, various fee increases, and staff  reductions APPENDIX 3 5/22/2013 2 7 Fire Department, pp. 203‐214 Revenue : $794,663 Plan Check Revenue Increase (one‐time) $531,000 EMS Revenue Increase $308,000 Stanford Revenue Impact from All  Changes in Fire Department ($45,334) Hazmat Reporting Grant $20,000 Removal of Charges to Refuse due to  Closing of Landfill ($19,003) Proposed Budget FY 2014 Department Changes 8 Fire Department (continued) Expense : $15,637 Community Focused Integrated Risk  Management Assessment (one‐time) $45,000 Succession Planning Management Training  (one‐ time) $35,000 Digitize Fire Prevention Records (one‐time)$50,000 HazMat Reporting (CUPA Grant, one‐time)$20,000 Overtime Savings ($200,000) Lexipol Procedures  (Fire Study recommendation) $6,050 EKG Wireless Charges $5,040 Staffing Changes $47,577 Other Changes $6,970 9 Fire Department (continued) FTE Changes: 0.94 FTE Increase Temporary Staff 1.44 FTE Reallocate portion of GIS Specialist  to Police Department (0.50 FTE) Reclassify Administrative Associate  III to Administrative Assistant 0.00 FTE 10 Office of Emergency Services, pp. 215‐221  Expense: $96,226 •Unfreeze 1.0 FTE Program Assistant $96,226 No revenue or FTE changes Proposed Budget FY 2014 Department Changes 11 Proposed GF CIP Budget FY 2014 Changes to the Capital Budget document Relationship to City’s Comprehensive Plan  more clearly communicated “Annual Recurring” vs. “Nonrecurring”  designation IBRC labels assigned where applicable “Catch‐up”, “Keep‐up”, “New” Picture or graphic for each project Salaries and benefits included in projects  where appropriate for FY 2014  12 2014 Proposed Citywide CIP  Projects by Fund 1 2 3 4 5 6 7 8 9 10 $60.0 Million1‐ Capital Project Fund (General Fund) ‐ 56% 2‐ Vehicle Replacement Fund ‐ 5% 3‐ Technology Fund ‐ 1% 4‐ Electric Fund ‐ 14% 5‐Fiber Optics Fund ‐  1% 6‐ Gas Fund ‐ 3% 7‐ Water Fund ‐ 9% 8‐ Wastewater Collection Fund ‐ 2% 9‐ Wastewater Treatment Fund ‐ 5% 10‐ Storm Drain Fund ‐ 6% APPENDIX 3 5/22/2013 3 13 Proposed GF CIP Budget FY 2014 Internal CIP Committee Process CIP Committee began meetings in October  2012 Reviewed prioritization criteria and  prioritized projects Reviewed projected Infrastructure Reserve  Balance Reviewed current capacity ‐staff’s ability to  start and complete projects as budgeted Met with the Planning and Transportation  Commission to get input on the CIP Plan  14 Proposed GF CIP Budget FY 2014 1 2 3 4 5 Total General Fund Projects ‐$33.4 Million 1‐ Buildings and Facilities ‐ 17% 2‐ Streets and Sidewalks ‐ 28% 3‐ Parks and Open Space ‐ 35% 4‐ Traffic and Transportation ‐ 14% 5‐ Salaries and Benefits (unallocated) ‐ 6% 15 16 17 Proposed GF CIP Budget FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total SOURCES General Fund Annual Capital Transfer 13,226,485 13,627,465 14,047,123 14,509,006 15,001,285 70,411,364 Interest Income 1,075,000 1,075,000 1,075,000 1,075,000 1,075,000 5,375,000 Project Reimbursements    Debt Financing 5,045,505 0 0 0 0 5,045,505   Local Agency 5,263,272 13,246,354 365,751 365,751 365,751 19,606,879   Gas Tax Fund 1,625,000 1,625,000 1,625,000 1,625,000 1,625,000 8,125,000   Stanford U. Med. Center Agreement 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 6,000,000 TOTAL SOURCES $27,435,262 $30,773,819 $18,312,874 $18,774,757 $19,267,036 $114,563,748 USES Budgeted CIP Projects 33,427,070 31,112,929 21,998,820 17,098,619 20,095,558 123,732,996 TOTAL USES $33,427,070 $31,112,929 $21,998,820 $17,098,619 $20,095,558 $123,732,996 SOURCE OVER (SHORT)(5,991,808) (339,110) (3,685,946) 1,676,138 (828,522) (9,169,248) Infrastructure Reserve Balance, beginning 17,751,355 11,759,547 11,420,437 7,734,491 9,410,629 17,751,355 Infrastructure Reserve Balance, ending $11,759,547 $11,420,437 $7,734,491 $9,410,629 $8,582,107 $8,582,107 FIVE‐YEAR PLAN Projected Infastructure Reserve Note: General Fund spending declines beginning in FY 2016 due to Highway 101 Pedestrian/Bicycle Overpass Project of $8.2 million in  FY 2015, and Golf Course Reconfiguration and Baylands Athletic Center Improvements of $8.0 million in FY 2014 18 FY 2013 Accomplishments Art Center Renovation Cogswell Plaza Improvements Renovation of Public Art Pieces Main Library Renovation and Expansion Bicycle Boulevard Street Signage Street Maintenance San Antonio Road Improvements Rinconada Park Master Plan University Avenue Beautification APPENDIX 3 5/22/2013 4 19 Accomplishments Increased Funding for Street Maintenance FY 2010 Adopted Budget = $1.9 million FY 2011 Adopted Budget = $3.8 million FY 2014 Adopted Budget = $5.7 million Improved Pavement Condition Index score 2010 average PCI score = 74 2011 average PCI score = 76 2012 average PCI score = 77 2021 goal = 85 (now projected to reach  sooner in 2019) 20 Proposed GF CIP Budget FY 2014 21 Proposed GF CIP Budget FY 2014 Highlights of Changes to CIP Projects Sidewalk Repairs (p. 115) Additional $1.0 million per year from GF  transfer Street Maintenance (p. 121) Additional $1.0 million per year from GF  transfer $477,353 each in FY 2014 and FY 2015  from One Bay Area Grant (OBAG) Approx. $365,000 per year from County  Vehicle Reg. Fee (Measure B, Nov. 2010) 22 Proposed GF CIP Budget FY 2014 Highlights of Changes to CIP Projects (cont’d.) Golf Course Reconfiguration and Baylands  Athletic Center Improvements (p. 143) $8.0 million for FY 2014 $3.0 million from SF Creek JPA $5.0 million from Certificates of  Participation Bicycle & Pedestrian Transp. Plan (p. 171) Additional $1.2 million from SUMC  development agreement 23 Proposed GF CIP Budget FY 2014 Highlights of Changes to CIP Projects (cont’d.) Highway 101 Pedestrian/Bicycle Overpass  (p. 175) $1.4 million in FY 2014 funded by  County grant Lucie Stern Building Mechanical & Electrical  Upgrades (p. 96) Combined approved and proposed  funding from four Lucie Stern CIP  projects for efficiency 24 Infrastructure Blue Ribbon  Commission (IBRC) Status: Annual maintenance (keep‐up) needs ‐$2.2  million per year Now funded by GF transfer Deferred maintenance (catch‐up) needs ‐$4.2  million for the next ten years $7.6 million FY 2012 year‐end GF surplus  transferred to Capital Fund APPENDIX 3 5/22/2013 5 25 Infrastructure Blue Ribbon  Commission (IBRC) Status: Council Infrastructure Committee reviewing  other unfunded projects Infrastructure Management System (IMS) Requirements currently under discussion 26 27 Proposed GF CIP Budget FY 2014 Changes to Proposed Document Remove Baylands Interpretive Center  Improvement (p. 73) Already included in new Baylands  Interpretive Center project (p. 74) Update FY 2018 for Building System  Improvements (p. 77)‐add $100,000 28 Proposed GF CIP Budget FY 2014 Changes to Proposed Document Add California Avenue Parking District  Improvements‐$186,400 in FY 2014 Funded by California Avenue Parking  Permit Fund Add University Avenue Parking District  Improvements‐$340,900 in FY 2014 Funded by University Avenue Parking  Permit Fund 29 Proposed GF CIP Budget FY 2014 Questions 30 Municipal Fees (“User Fees”) Proposition 26 (Nov. 2010) – “No Hidden  Taxes” •User fees must reflect costs incurred  (directly or indirectly) in order to provide  the service or activity for which fee is  charged Cannot exceed estimated cost but can be set  below full cost recovery level APPENDIX 3 5/22/2013 6 31 No revenue projection adjustments for Fiscal  Year 2014 Actual revenues may vary based on changes in  utilization or volume Municipal Fee Changes 32 Public Works Department, pp. 233‐272  New Positions, 2.0 FTE increase Add 1.0 Project Engineer Allocated to Capital Projects Fund Net impact to budget‐$175,527 increase Add 1.0 Project Manager 0.45 allocated to General Fund 0.20 each to Capital Projects Fund and Refuse Fund 0.15 to Storm Drainage Fund  Net impact to budget‐$145,775 increase Proposed Budget FY 2014 Department Summary 33 Public Works Department, pp. 233‐272  Summary of FTE Changes by Fund Additions, Drops, Reallocations, Reclassifications Proposed Budget FY 2014 Department Summary General Fund (1.06) Refuse Fund (3.52) Wastewater Treatment Fund (0.85) Storm Drainage Fund 0.88 Vehicle Replacement Fund 0.73 Subtotal, Non‐capital (3.82) Capital Projects Fund 1.46 Total FTE Changes (2.36) 34 Public Works – General Fund, pp. 233‐244 Revenue : $143,824 Special assessment (Midyear) ($23,000) Fees, permits, licenses $321,370 Property damage $4,000 Allocated charges $41,115 Internal street cut fees ($256,583) Transfers in for capital projects $51,022 Miscellaneous revenue ($7,600) Proposed Budget FY 2014 Fund Changes 35 Public Works (cont.) Expense: ($82,291) APWA Certification $25,000  San Francisquito Creek JPA $10,000 Mitchell Park custodial, maintenance, supplies  $114,273 Maintenance and supplies to parking funds  ($331,564) Electronic scanning, archiving $30,000 Street maintenance $70,000 36 Public Works (cont.) Exhibit 2: ($194,141) Tree trimming contracts (Exhibit 2)  $70,000 Remove remaining parking district non‐ salary dollars: ($40,250) Infrastructure ballot measure engineering  support (use FY13 funds): ($15,000) Reallocate benefits and other non‐salary  related to parking district ($208,891) APPENDIX 3 5/22/2013 7 37 Storm Drainage Fund, pp. 252‐258 Revenue : $147,512 Increased Plan Check Fees $25,000 Reduced interest income ($2,400) Residential Sales $48,665 Commercial Sales $60,126 Industrial Research Sales $16,121 Proposed Budget FY 2014 Fund Changes 38 Storm Drainage (cont.) Expense: ($308,787) Permit increase for Santa Clara Valley Urban  Runoff $22,000 Utility charges ($194,231) Public Works Admin allocation $1,585 CIP projects ($132,581) Debt service $960 Operating transfers out ($6,520) 39 Storm Drainage Fund, pp. 347‐360 (Capital)  FY 2014 Expenditures: $3.3 million Channing Avenue/Lincoln Avenue storm drain   improvements: $1.5 million Connect Clara Drive storm drains to Matadero  Creek pump station: $0.8 million Matadero Creek pump station improvements:  $0.3 million Southgate neighborhood improvements:  $0.2  million Proposed Budget FY 2014 Public Works Department Summary 40 Refuse Fund, pp. 245‐251  Revenue : ($857,276) Net revenue change due to economic activity and historic  actuals ($53,354)  –Special fees $300,000; bin rental ($69,000); commercial  retail ($11,000); industrial research ($155,354); sales to  city $36,000; misc ($154,000) Construction and demolition ($140,000) Disposal fees ($60,000) Investment income ($16,700) Landfill charges and gas sales to departments ($45,025) Operating transfers to parking funds ($542,197) Proposed Budget FY 2014 Fund Changes 41 Refuse Fund (cont.) Expense: $143,449 One‐time greenhouse gas study $85,000 Household Hazardous Waste $50,000 SMartStation $61,116 Move parking fund contracts ($187,604) GreenWaste $471,249 Capital Improvement Projects, project  management  ($17,418) Other Changes ($42,032) Operating Transfers out ($276,862) 42 Wastewater Treatment Fund, pp. 259‐264 Revenue : $255,696 Revenue from partners, $307,065 Wastewater treatment sales, $33,231 Septic tank hauling, ($40,000) Utility service to other funds ($7,000) Investment income, ($37,600) Proposed Budget FY 2014 Fund Changes APPENDIX 3 5/22/2013 8 43 Wastewater Treatment (cont.) Expense: $519,606 Chemical purchases, $68,000 Supplies for equipment needs, $131,367 Debt service ($5,606) Public Works Admin allocation, $3,395 Capital Improvement Projects, $334,132 Operating Transfers out, ($11,682) 44 Wastewater Treatment Fund, pp. 331‐345  (Capital)  FY 2014 Expenditures: $2.9 million Facility condition assessment and retrofit: $1.1  million Plant equipment replacement: $1.8 million Biosolids facility planned for FY 2015‐2018:  $89.0  million Proposed Budget FY 2014 Public Works Department Summary 45 Airport Fund, pp. 265‐267  Revenue : GF loan $15,000  Other Expenses: $78,074 One‐time transition support $75,000 Travel and meetings ($1,000) Public Works Admin allocation $4,074 Proposed Budget FY 2014 Fund Changes 46 Vehicle Replacement Fund, pp. 268‐272  Revenue: ($135,092) Compressed natural gas sales $14,968 Maintenance allocated charges $60,619 Replacement allocated charges ($233,179) Investment income $22,500 Proposed Budget FY 2014 Fund Changes 47 Vehicle Replacement Fund (cont.) Expense: $2,070,432 Organizational study –FY13 midyear ($50,000) Capital Improvement $1,815,000 Fire Command Vehicle and Aerial Ladder Truck (Exhibit 2) $300,000 –Public Works Admin allocation $5,432 48 Vehicle Replacement Fund, pp. 365‐371  (Capital)  FY 2014 Expenditures: $3.0 million Emergency repair and replacement: $0.1  million MSC fuel station demolition: $0.2 million Scheduled vehicle and equipment  replacement: $2.7 million Proposed Budget FY 2014 Public Works Department Summary APPENDIX 3 5/22/2013 9 49 Vehicle Replacement Fund, pp. 365‐371  (Capital)  Amendments to the Proposed Budget: Scheduled vehicle and equipment replacement Aerial ladder fire truck:  $200,000 Quote above original estimate Replace fire command unit with 2013  Chevy Suburban:  $100,000 Proposed Budget FY 2014 Public Works Department Summary 50 Community Development Street Improvement  Federal and State Housing in‐lieu Special District Traffic Mitigation and Parking in‐lieu Public Benefit Downtown Business Improvement District Stanford University Medical Center Special Revenue Funds pp. 63‐72 51 Revenues:  8.5% fee increase proposed  2014 Expenditure Changes: Resurfacing ($91,000) Parking Guidance System ($50,000) Cowper/Webster Improvements (Restriping  and Interior White Paint:  $175,000) Security Cameras Feasibility Study and Design  ($25,000) Projected Fund Balance, July 1, 2014:  $470,000 University Avenue Parking Permit Fund, p. 69 52 Revenues:  15% fee increase proposed  Expenditures:  New $186,000 resurfacing project  (Lot 7, Sherman/Birch) Projected Fund Balance, July 1, 2014:  $180,000 California Avenue Parking Permit Fund, p. 71 53 Projected 2014 Interest Earnings: $679,000  Bicycle and Pedestrian Transportation Plan:  $1.2  million Project Safety Net:  $260,000   Additional funds to  be carried over from 2013 (including funds  allocated on May 6, 2013) Policy and Services Committee to discuss  guidelines for allocating SUMC Funds Stanford University Medical Center, p. 72 54 Revenues: ($938,339) Removed FY 2013 placeholders for Development Center  and cost of service study estimated revenues Expense: $2.2M Salary & Benefits: $2.1M Cubberley lease payments increase: $135,000 Golf Course lease purchase debt: $429,020 Remove PAAS placeholder: $449,105 Assistance with grant applications: $40,000 Decrease transfers out: ($865,810) Other changes: $38,906 General Fund Non-Departmental, pp. 318-320 APPENDIX 3 5/22/2013 10 55 Salary Budgeting Methodology General Fund 000s    Difference between control point and actual (56)$             1) Related to new management compensation plan    Increases above mid point (performance based)225$               Management Compensation study reserve for       market adjustments in FY 2013 310                   Total 535              2) 2% potential performance based salary increases for    mgmt and SEIU employees 589              3) Salary budget for merit increases (mgmt, safety, SEIU)571              4) Pension: elect to not smooth the 0.25% discount    rate decrease impact over two years 602              5) Attrition (2,000)          Total General Fund salary and benefit reserve 297$            56 Contingency Accounts: ($150,000) City Attorney Contingency Account: ($50,000) Innovation Contingency Account: ($100,000) •One‐time decrease to fund the Virtual Library Project General Fund Non-Departmental, pp. 318-320 57 Contact info: Lalo Perez Administrative Services Director/CFO City of Palo Alto  Administrative Services Department  Ph: (650) 329‐2692 Email: Lalo.Perez@cityofpaloalto.org  URL: cityofpaloalto.org/asd 58 City Manager’s Proposed Budget Finance Committee May 16, 2013 APPENDIX 3 5/22/2013 1 1 City Manager’s Proposed Budget Finance Committee May 23, 2013 2 Date Meeting Time/Location Agenda Tues, 5/7 Finance Committee Special Meeting 6PM, Chambers Budget Kickoff; Departments:  ‐ Council Appointed Officials & Council ‐ HR, Employee Benefits Funds  ‐ General Liability Fund  ‐ IT Department (capital & operating)                         ‐ ASD/Printing & Mailing Fund Thurs, 5/9 Finance Committee Special Meeting 6PM, Chambers ‐ HSRAP                                                                              ‐ CSD ‐ Library ‐ Planning Tues, 5/14 Finance Committee Special Meeting 5PM, Chambers ‐Utilities (capital & operating)                                    ‐ Power Purchase Agreements for Project Output  from Three Solar Photovoltaic Facilities Thurs, 5/16 Finance Committee Special Meeting 4PM, Chambers ‐Police, Fire & Office of Emergency Services             ‐General Fund Capital                                                    ‐Muni Fees                                                                        ‐Public Works: General Fund, Storm Drain,  Refuse, Wastewater Treatment, Vehicle  Replacement, Airport, related capital  ‐ Special Revenue Funds (including Parking District  & Stanford Devl Agreement Fund)                                ‐ Non‐departmental Thurs, 5/23 Finance Committee Special Meeting 6PM, Chambers ‐ Wrap up with Finance Committee ‐ Management Compensation Study Mon, 6/3 City Council 6PM, Chambers Public Hearing ‐ Utility Rates (Prop 218); Budget  adoption Mon, 6/10 City Council 6PM, Chambers Public Hearing ‐ Budget adoption City of Palo Alto Council & Finance Committee Budget Hearings Fiscal Year 2014 Budget Process 3 Bicycle and Pedestrian Transportation Plan  Implementation Project (CIP PL‐04‐010):  $1.2  million See p. 72 operating book; pp. 171‐172 capital book Stanford Development Agreement Fund 4 Revenues: ($938,339) Removed FY 2013 placeholders for Development Center  and cost of service study estimated revenues Expense: $2.2M Salary & Benefits net increase: $2.1M Cubberley lease payments increase: $135,000 Golf Course lease purchase debt: $429,020 Remove PAAS placeholder: $449,105 Assistance with grant applications: $40,000 Decrease transfers out: ($865,810) Other changes: $38,906 General Fund Non-Departmental, pp. 318-320 5 General Fund Non-Departmental, pp. 318-320 Placeholder for mgmt comp study impacts 310$        Performanced based increases beyond midpoint 225$        Mert increases for all labor groups 571          2% increase for misc labor groups 589          1,385       Not phase in PERS assumption changes 602         1,987       Subtotal 2,297       Net decrease for achieved public safety concessions, attrition  savings, and allocating benefit cost to dept budgets (180)         Net Non‐Departmental change in salary/benefits 2,117$     6 Salary Budgeting Methodology General Fund 000s    Difference between control point and actual (56)$             1) Related to new management compensation plan    Increases above mid point (performance based)225$               Management Compensation study reserve for       market adjustments in FY 2013 310                   Total 535              2) 2% potential performance based salary increases for    mgmt and SEIU employees 589              3) Salary budget for merit increases (mgmt, safety, SEIU)571              4) Pension: elect to not smooth the 0.25% discount    rate decrease impact over two years 602              5) Attrition (2,000)          Total General Fund salary and benefit reserve 297$            APPENDIX 3 5/22/2013 2 7 Contingency Accounts: ($150,000) City Attorney Contingency Account: ($50,000) Innovation Contingency Account: ($100,000) •Will be used to fund the Virtual Library Project in FY  2014 General Fund Non-Departmental, pp. 318-320 8 Actions Needed Staff proposed increase for CSD Baylands  CA Land Management Contract, $76,610 Debt Service for second series of GO  Bonds, $563,703 and offsetting assessed  revenue Any additional items proposed by the  Finance Committee after review of General  Fund BSR and parking lot items Budget Wrap Up 9 Parking Lot Overall review of department KPMs Additional information related to Council  meals request, $15,000 Summer concert series School Resource Officer and related data Police overtime and staffing data Budget Wrap Up (con’t) 10 Items Staff Will Provide During Council  Adoption Night Hotel weekend stay data, year‐over‐year  increase New title for the 27 University Avenue  project School Resource Officer data Budget Wrap Up (con’t) 11 Budget Wrap Up (con’t) Adjustments to the General Fund Date Dept Description Amount Proposed budget ‐ BSR increase $220 5/7 PSO HRIS consultant (exp incr) (50) 5/7 POL PD scheduling software (exp incr) (50) 5/9 CSD *Add'l HSRAP (exp incr) (56) 5/16 Various Adjustments for parking district (exp decr) 127 5/16 PWD Remove PW non‐sal for parking district (exp decr)40 5/16 PWD Infrastructure ballot funding (exp decr)15 5/16 PWD Tree trimming contract (exp incr)(70) Subtotal ‐ tentatively approved changes to date ($44) Tentatively approved budget ‐ BSR increase $176 Pending staff requests as of May 23: CSD California land mgmt contract ‐ Baylands (exp incr)($77) COU Council meals (exp decr)$15 Subtotal ‐ pending staff requests ($62) Change to BSR considering pending staff requests $114 * Change initiated by the Finance Committee. 12 Contact info: Lalo Perez Administrative Services Director/CFO City of Palo Alto  Administrative Services Department  Ph: (650) 329‐2692 Email: Lalo.Perez@cityofpaloalto.org  URL: cityofpaloalto.org/asd APPENDIX 3 5/22/2013 3 13 City Manager’s Proposed Budget Finance Committee May 23, 2013 APPENDIX 3 APPENDIX 4 FINANCE COMMITTEE MINUTES Page 1 of 31 Special Meeting Tuesday, May 7, 2013 Chairperson Burt called the meeting to order at 6:05 P.M. in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Schmid, Shepherd Absent: Agenda Items 1. Overview of FY 2014 Budget. James Keene, City Manager invited all Council Members to provide questions or comments on the Budget document. The City was in a better financial position because of Council making cut backs in prior years. Economic challenges remained, particularly relating to the California Public Employees' Retirement System (CalPERS). Lalo Perez, Director of Administrative Services Department (ASD) recommended that the Finance Committee (Committee) use a parking lot method when they wanted to move Agenda Items in and out of the discussion. Staff or the Committee was able to initiate changes to the Budget. The last two years were financially better than expected and resulted in surpluses. Staff requested retaining surplus funds in the Budget Stabilization Reserve (BSR) Fund. At the close of Fiscal Year (FY) 2012, the Council transferred $7.6 million from the General Fund to the Infrastructure Reserve. This amount was in addition to the $11 to $12 million transferred earlier. The Reserve Policy called for a minimum of 15 percent to a maximum of 20 percent of the Operating Budget to be placed in Reserve. Funds above 18.5 percent of the Reserve needed to be transferred to the Infrastructure Reserve at the City Manager's recommendation to the Council. Staff projected a $1.7 million surplus for FY 2013. As a result of revenue trends, the surplus was likely to be closer to $5 million. The Proposed MINUTES Page 2 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Budget recommended unfreezing seven Police Officer positions, and increasing overtime to reflect the actual expenditure experience. The Budget that was proposed added three Full Time Employees (FTE) Citywide, additional revenue for the Development Center, and increasing temporary Staff in Community Services. The Library Foundation donated $500,000 to the City for the Library Collection. The Proposed Budget did not include impacts from the Affordable Care Act. The Affordable Care Act resulted in the City offering healthcare services for temporary employees working more than 30 hours in non-benefited positions. Staff hoped the balance of the General Benefits Fund would be sufficient to cover impacts. Pension plan changes impacted the City in FY 2016. Staff hoped to provide the final report for the Cost of Services Study in the summer of 2013. Staff needed to review services without fees and administrative costs in order to include them in the FY 2015 Budget. Staff provided summary sheets of Citywide impacts of expenses shared by departments and funds. These charges were typically allocated based on different methodologies. The Enterprise Funds did not have significant changes. Rate changes were discussed in the Capital Program. Christine Paras, Principal Financial Analyst noted the date scheduled for adoption of the Proposed Budget was June 10, 2013. Review of the Management Compensation Study occurred on May 23, 2013. Staff recommended reallocating a Senior Technologist position in the Information Technology (IT) Department for a savings of $87,000 in salaries and benefits. Also recommended for the IT Department was an increase of $50,000 for Police Department scheduling software. Staff proposed a change of $50,000 in the People Strategy and Operations Department for a new information system. Tax revenues increased by $5.8 million. The net revenue change in the Proposed Budget compared to the FY 2013 Adopted Budget totaled $7.6 million. The Proposed Budget also included a $4 million increase in plan check and permit revenues. The majority of ongoing expense increases related to salaries and benefits. The net change included a change in salary budgeting methodology, increases for pension and healthcare, and proposed FTE changes. The Proposed Budget also contained a proposed $1.4 million increase in the Planning Department's contract expense. The net change of revenue over expense in the Proposed Budget was approximately $0.6 million. The Proposed Budget included a five percent revenue increase above the FY 2013 Adopted Budget, and a 4.6 percent increase related to salaries and benefits. This resulted in a $0.2 million surplus, or a contribution to the BSR in the General Fund. Staff projected a $30.5 million BSR balance at the end of FY 2014 based on the projected surplus for FY 2013. MINUTES Page 3 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Joe Saccio, Assistant Director of ASD indicated the FY 2014 Proposed Budget reflected the continued optimism for revenue. As a result of the unusually large transactions in the Documentary Transfer Tax, Staff decreased proposed receipts for FY 2014. The number and value of transactions increased. Staff included some revenue in FY 2014 from the Casa Olga Project into the Transient Occupancy Tax (TOT). Occupancy levels reached 80 percent for some months. By the end of the year, occupancy levels were expected to be 78-80 percent higher than FY 2013. Per diems moved into the $180 level, and were averaging approximately $178-$179 at the end of the year. Sales Tax and Property Tax were also doing well. Staff predicted a good rate of growth for Property Tax. Permanent revenues were also increasing. Real property prices in the area increased because of high demand and low supply. Council Member Schmid felt tax revenues were in line with the Long Term Financial Forecast. He was surprised by Staff's optimism regarding charges for services, other funds, and permits and licenses. He requested Staff comment on those increases. Mr. Perez stated permits were one of the drivers that changed in the third quarter. Staff was reviewing whether those increases were sustained in FY 2014. Council Member Schmid inquired whether that was also true for the charges for services. Charges for services and other funds seemed to be significantly higher over the past few months. Mr. Keene indicated Mr. Perez addressed the charges for services. Council Member Schmid believed Mr. Perez was discussing permits and licenses. Mr. Perez said he would answer Council Member Schmid's question a little later. Ms. Paras reported Staff included a $2.2 million increase for plan check fees, which was included in the increase for Development Center services. Staff projected a $1.8 million increase in the cost of permits alone. The main contributors to General Fund expense increases were employee benefit increases. She commented that overall, the average monthly utility bill for the customer decreased by $5.19. Staff proposed a Water Rate increase of seven percent, a Gas Rate decrease of $10.40, or 21 percent, and a Storm Drain and Fiber Optic Rate increase of 2.2 percent, based on the Consumer Price Index (CPI). Included in the Budget summaries were a number of MINUTES Page 4 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 reallocations from the General Fund and Enterprise Funds into other funds. The majority of the funds for the 7.98 FTE’s moving to other funds were related to capital. Many Public Works Department positions moved into the capital category to address infrastructure needs. The Proposed Budget showed a net increase of three FTEs. Citywide changes were overall changes made by the Office of Management and Budget for salaries and benefits and allocated charges. The Office of Management and Budget changed the methodology for budgeting salaries and benefits to utilize actual employee pay. This resulted in a $1.5 million decrease Citywide. The second type of Citywide change was personnel benefits. The General Benefits Internal Service Fund held all costs for pension, healthcare, and similar expenses. Staff projected a Citywide increase of $0.7 million for pensions, and an increase of $2.4 million for healthcare. The General Fund had a $0.2 million increase in pensions. That increase was substantially lower because of employee contributions. The FY 2013 Adopted Budget for employee contribution paid by the City was approximately $2 million. Citywide the net change was $0.7 million. Staff included a credit of $0.5 million, which was an assumed savings realized from normal erosion within the General Fund. The Citywide change for medical expense alone was a $2.4 million increase. City employees currently paid 10 percent of their own medical to contribute towards retiree medical. In the FY 2014 Proposed Budget, Staff assigned that credit to the Retiree Medical Fund. In the FY 2013 Adopted Budget, the retiree medical annual required contribution (ARC) was $12.8 million; in the FY 2014 Proposed Budget the ARC was $13 million Citywide. The ARC amount was offset by the 10 percent employee contribution. That represented the $0.2 million increase in the Citywide ARC, which was offset by the employee 10 percent contribution. Council Member Schmid noted the $1.9 million paid by the City for employee contribution had virtually disappeared; yet, the City contribution increased by $2 million. He asked what caused the employee contribution to rise so high. Ms. Paras inquired whether Council Member Schmid was referencing the employer contribution comparison between the $12.84 million and the $14.87 million. Council Member Schmid answered yes. There was an increase of $200,000 despite the fact that employees contributed $1.9 million. Ms. Paras asked if Council Member Schmid was referring to the $128,846 number. MINUTES Page 5 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Council Member Schmid said these numbers showed the difference in employee contributions. Ms. Paras reported the main driver of the $2 million increase in employer contribution was the increase in pension rates. In FY 2013 the Miscellaneous Employee rate increased from 22.97 percent to 24.6 percent. The Safety Employee rate increased from 30.05 percent to 33.44 percent. Citywide, the impact of those rate increases was approximately $1.8 million. Council Member Schmid recalled Mr. Perez mentioned an expected increase in FY 2016, and inquired whether that increase affected Attachment A, an attachment in the Staff report. Mr. Perez indicated it would increase the table significantly. The rates were reflections of the net increase of $1.63 million for Miscellaneous Employees and $2.39 million for Safety Employees. This was assuming the City accepted a two-year smoothing of the 0.25 percent on the discount rate change impact. Staff did not recommend a two-year smoothing. Ms. Paras stated the allocated charge for the Technology Fund decreased by $2 million because the final loan payment of $1.2 million was paid to the General Fund in FY 2013. The final Citywide change was implemented toward the General Fund Cost Allocation Plan. The Citywide charge resulted in a revenue decrease of $0.3 million to the General Fund. Staff refined calculations to reflect actual activities. Mr. Perez reported the change from control point to actual salary for the General Fund was approximately $56,000 for salary and approximately $20,000 for pension. Mr. Keene indicated the numbers applied to all General Fund salaries. Mr. Perez stated the next amount applied only to the Management Compensation Group. In the Budget, Staff proposed a performance-based compensation strategy that allowed a manager to move beyond the salary midpoint. This $225,000 amount represented 0.92 percent of the total compensation of the Management Group. To bring the Management Group to the midpoint, Staff set aside $310,000 in FY 2013. If the Council did not approve the proposed plan, then the number was eliminated from the FY 2014 Budget. The $310,000 amount represented 1.26 percent of total compensation for the Management and Professional Group. Staff recommended a potential increase of two percent, based on performance and contribution toward the Management Group; that was in the Budget for a full year. He said that because of the Service Employees International MINUTES Page 6 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Union (SEIU) agreement expiring at the end of December 2013, Staff was going to show a two percent increase for the final six months of FY 2014. The City Manager made these recommendations; however, the Council had not approved them yet. Mr. Keene noted represented Safety Employees were not included because both the Palo Alto Police Officers Association and Fire Fighters' contracts expired at the end of FY 2014. Mr. Perez explained the $589,000 amount represented 2.4 percent of the total compensation for those groups. Staff budgeted salaries at the actual salary amounts employees received. He mentioned that during the fiscal year, an employee could receive a step increase in salary, and the $571,000 represented that salary increase. For the management positions, an individual was able to move closer to the midpoint. Staff strongly recommended the City not accept the two-year smoothing. If the City accepted CalPERS' change from a 15-year to a 5-year smoothing, then the City needed to change from a two-year to a single-year smoothing. Staff recommended that because it allowed the City to address its obligation sooner. The City was able to afford to make the full payment in one year rather than two because of the improved revenue situation. Vice Mayor Shepherd inquired whether Staff recommended the City not accept the percentage of smoothing from CalPERS. Mr. Perez answered yes. By not accepting the smoothing, the City was to pay a higher rate. Vice Mayor Shepherd understood that not accepting the smoothing made the City appear to have a greater deficit in its financial statements; she asked how that could be explained. Mr. Perez explained it was basically a $1 million Citywide increase in the pension obligation for FY 2014. While the payment increased, the unfunded liability decreased in the future. Vice Mayor Shepherd stated the City would book the amount differently from other cities, but that fact was not disclosed. She did not believe it affected the City's bond rating. Mr. Perez indicated the higher payment would impact available funds in FY 2014. Vice Mayor Shepherd felt an explanation needed to be clearly stated. MINUTES Page 7 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Keene explained that the higher payment did not make the financial statements look bad. In comparing cities, Palo Alto paid more in FY 2014 than other cities. The City made the appropriate notations regarding its actions to provide a full explanation. Mr. Perez made that clear in the final Adopted Budget document, assuming the Council approved it. Mr. Saccio reported on Standard and Poor’s (S&P) and Moody's, credit bond ratings, and asked about the City's liabilities for pension and healthcare. While those factors were a small proportion of the rating methodology, S&P and Moody's reflected the burden of the liability on cities. Making a higher payment supported the City's credit in terms of the financial statements. Vice Mayor Shepherd agreed with the proposed recommendation; however, the Council needed to explain its actions. Chair Burt believed the City would show a smaller surplus. Mr. Keene agreed that would be the net effect in FY 2014. Chair Burt expected CalPERS' projected rate of return to decrease another 0.25 percent from 7.5 percent. At that time, cities took another big hit. The hit was not as large for Palo Alto because Palo Alto paid down the liability amount. Mr. Perez agreed. Attrition provided a net result of $297,000, minus the CalPERS pension amount. Council Member Schmid inquired whether the steps were additive in nature. Mr. Perez responded yes for budgetary purposes. Some received an increase and some not because of different labor groups in the categories. Council Member Schmid asked if some groups were not listed. Mr. Perez noted the Police and Fire contracts were not currently open for negotiation. Council Member Schmid inquired whether the additive amount was up to five percent. Mr. Perez explained Item Number One was at 2.18 percent for the $535,000 amount and that was additive. MINUTES Page 8 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Keene indicated these changes were not necessarily evenly distributed to all employees. The measure, as it related to the group, was the percentage. There was discretion as to whether the funds were fully applied. Council Member Schmid stated the authorization was there for a total increase of approximately five percent. He inquired whether there would be an additive for benefits if salaries increased by that amount. Mr. Perez reported it was not a full benefit increase because not all benefits changed. It only affected those benefits related to salary, such as pension and life insurance. Council Member Schmid asked if these were sustainable revenues because as the City shifted to salary increases and benefit increases, the Council needed to ensure the revenue base continued to grow. Mr. Perez indicated Staff would discuss that at the next Council meeting. In FY 2016, Staff projected a deficit and the City needed a plan for that deficit. In the Long Range Financial Forecast Staff embedded the impacts of CalPERS' pension changes; however, Staff continued to work on the potential savings of the pension third tier. Council Member Schmid wanted to ensure the Council discussion of the Long Range Financial Forecast related to the Budget. Mr. Perez indicated the Council discussion would occur prior to approval of the Proposed Budget. Mr. Saccio noted tax revenues for the next ten years matched historical performance over the prior 20 years. Chair Burt stated the increases for FY 2014 over FY 2013 were significantly greater than FY 2013 over FY 2012. He inquired whether Staff was confident that the rate of increase would continue to grow. Mr. Saccio reported Staff was confident the FY 2013 projections were accurate and that the City could achieve the FY 2014 projections. The actual amounts for FY 2011 to FY 2012 were carryovers from the recession. Chair Burt focused on the significantly higher rates of increase that were projected for FY 2014 over FY 2013. MINUTES Page 9 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Perez believed the rates of increase for FY 2013 over FY 2012 were not great because Staff was unsure whether the recession was abating. The actual increases for FY 2013 exceeded Staff's projections. Chair Burt stated the projections for FY 2013 were not upgraded to reflect the actual increases. Mr. Keene mentioned where the Adjusted Budget amounts were in the Staff report. Chair Burt realized that was the explanation. Slide five reflected Adopted Budget amounts rather than adjusted Budget amounts. Mr. Perez added the amounts for FY 2013 and 2014. Chair Burt noted FY 2013 amounts were the original Adopted Budget amounts; Staff projected higher figures for FY 2013. Mr. Saccio reported the FY 2013 Adjusted Budget should be close to the actual figures at the end of the fiscal year. Chair Burt indicated the projected rate of increase for FY 2014 over the FY 2013 Adjusted Budget was a slower rate of increase. Mr. Saccio agreed the rates of growth were not as significant. Chair Burt inquired whether Staff tracked trends for occupancy rates on weekends, and whether weekend occupancy rates were increasing. Mr. Saccio reported the data from hotels was not refined to that degree. Chair Burt suggested one method to determine the current weekend occupancy rate was to compare the current average occupancy rate with the average occupancy rates for FY 2000-2001 and FY 2006-2008. Assuming 100 percent occupancy Monday through Thursday, any increase in the average occupancy rate probably resulted from weekend occupancy. Mr. Perez said he would approach the hotels for the information because they had shared that information in the past. Chair Burt suggested Staff request information from the hotels and that they perform the analysis he outlined. MINUTES Page 10 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Perez referenced a newspaper article stating that Santa Clara Valley led the state in growth of the Hotel Tax year over year. Chair Burt felt that was a slightly different subject. The increase in hotel capacity most likely responded to business demand on Monday through Thursday. Mr. Saccio noted a direct correlation between increased occupancy and increased rates. Increased rates were driving the increased Hotel Tax. Chair Burt requested Staff comment on the retiree annual required contribution (ARC) of negative $1.3 million. Ms. Paras reported the ARC increase was organized by fund and department. The Citywide total was $12.8 million. The ARC increase for FY 2014 was $13.03 million. Overall, there was a Citywide increase of $0.2 million, based on data from January 2011. Staff was scheduled for a revised actuarial study for the retiree medical on June 30, 2013. The employee medical contribution totaled $1.5 million Citywide. The $1.5 million amount represented the credit against the ARC that employees were paying 10 percent of their medical. That brought the Proposed Budget to $11.5 million. The change between the $12.8 million in the Adopted Budget and the $11.5 million overall was a decrease of $1.2 million. Chair Burt indicated the employee's share reduced the City's required contribution but the overall contribution was not reduced. Mr. Perez stated Staff reflected the contribution to match agreements. 2. City Attorney Budget. Christine Paras, Principal Financial Analyst reported the City Attorney's Office had no expense or budget augmentation requests and no Full Time Employee (FTE) or position requests. One change was a decrease in the Attorney Contingency Account of $50,000 stemming from the historical usage of the Account. Council Member Berman noted the Operating Budget indicated ten fulltime employees with two Senior Deputy City Attorneys; however, the staffing table indicated nine fulltime employees and one Senior Deputy City Attorney. Molly Stump, City Attorney explained one Senior Deputy City Attorney position was funded through the Utilities Department. That position was dedicated to supporting Utilities. MINUTES Page 11 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Council Member Berman inquired about the difference in salary amounts between the staffing table and the subtotal of the total staff expenditures. Ms. Paras reported Staff used the salary control point for the staffing table as opposed to the actual salary amount because it was easier to manage. Council Member Berman indicated the more realistic salary amount was located in the total staff expenditures table. Ms. Paras replied yes. Vice Mayor Shepherd asked where the $50,000 decrease in the Attorney Contingency Account was found. Ms. Paras stated the $50,000 decrease was located in the Non-Departmental Section, under the proposed budget changes table. Vice Mayor Shepherd requested an explanation of the $10,000 general expense change for Fiscal Year (FY) 2014. Ms. Paras explained the Management Employee Group had a decrease of $10,000 in Management Training Funds, previously placed in the salaries and benefits category. The development expense was placed in the general expense for non-salary. Council Member Schmid inquired about the substantial net decrease in benefit payments. Lalo Perez, Director of Administrative Services (ASD) reported the decrease was partly caused by changing the salary methodology from control point to actual pay. Council Member Schmid believed the methodology change affected salaries rather than benefits. Mr. Perez indicated some benefits, such as pension, Medicare, and life insurance were driven by salary. Staff needed to provide a summary of all benefits and a better explanation. Council Member Schmid noted benefits for the City Attorney's Office were strikingly lower than other departments, while salaries were somewhat similar. MINUTES Page 12 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Perez stated Staff noticed that and they were looking into the explanations. Council Member Berman referenced Performance Measure Number One which indicated a survey was conducted in the fall of 2013. He inquired whether the table showed what was not applicable for FY 2013. Ms. Stump requested clarification of the question. Council Member Berman asked if Performance Measure Number One was surveyed in FY 2013 and if an actual percentage was determined. Ms. Stump said she did not ask that survey question in FY 2013 because it was a new tool and needed refining. With Staff turnover in the office, it was not the right time to work with client departments to obtain accurate feedback. Staff needed to begin to do that on a regular basis. Council Member Berman wished to understand the measure. Ms. Stump struggled with identifying measurable, accurate, and valuable performance measures. She was working with the City Auditor's Office regarding new measures. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the City Attorney’s Budget. MOTION PASSED: 4-0 3. City Auditor Budget. Christine Paras, Principal Financial Analyst reported expense increases totaled $41,848, due to staffing changes. The department requested an additional augmentation for Ethics Hotline annual costs. The department reallocated development funds of $5,000 from benefits to general expense. Council Member Berman inquired about the difference in the number of employees for the department. Jim Pelletier, City Auditor stated one employee was funded through the Enterprise Fund. A Senior Auditor was dedicated to auditing the Enterprise Funds. Council Member Schmid felt performance measures were less objective because departments did not reach out to the Council and citizens. He MINUTES Page 13 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 asked Staff to comment on the connection between current and past performance measures. Mr. Pelletier inquired whether Council Member Schmid wanted performance measures connected to the residents' perception of the City. Council Member Schmid stated that was one measure for departments dealing with the public. Staff had many statistical measures of activities. He asked what Staff thought about reaching out to obtain performance measures. Mr. Pelletier indicated the cost of surveying citizens was prohibitive. The National Citizens Survey (Survey) provided data from a City service perspective; unfortunately the Survey did not contain a question specific to the City Auditor's Office. In terms of performance measures, Staff did reach out to citizens directly beyond the Survey. Council Member Schmid believed the City Auditor played a role with other departments in providing suggestions for performance measures. Mr. Pelletier played a role in terms of promoting performance measurements within the City. The departments determined the key performance measures, and he encouraged them to choose the most meaningful measures. He worked with departments regarding the best performance measures to use. For departments that worked directly with the public, perhaps Staff was able to consider some measurements in terms of direct customer feedback. Council Member Schmid suggested placing performance measures in the parking lot (a method used primarily for changes in the Budget) to determine if there was a role for the City Auditor. Mr. Pelletier noted the performance measures stated in the Budget represented a subset of the performance measures for the City. Departments used the three most critical performance measures for the Budget document. James Keene, City Manager reported the City Auditor played a helpful role by providing a perspective regarding best practices. One of the reasons for restructuring the Office of Management and Budget was to provide additional Staff resources to focus on suggestions from the Auditor and other departments. MINUTES Page 14 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Council Member Schmid wished to review performance measures for all departments, and inquired whether a second was needed to place an item in the parking lot. Lalo Perez, Director of Administrative Services Department (ASD) recommended the Finance Committee (Committee) discuss its rules for moving an item to the parking lot. Vice Mayor Shepherd recalled in 2012 a simple majority vote was needed to place an item in the parking lot. Council Member Schmid stated performance measures for the first two departments were not clear. Chair Burt felt a qualitative approach for the parking lot was different but reasonable. He suggested two members of the Committee agree to place an item in the parking lot. He requested Staff comment on the adjustment in staffing. Mr. Pelletier explained the City Auditor's Office had a part-time employee designated as a temporary employee. That employee was temporary for almost nine years. In moving to a part-time designation with benefits, the employee agreed to accept a 13 percent pay decrease to offset the cost of benefits. Chair Burt inquired whether those actions totaled the $33,000 increase in staffing expense. Mr. Pelletier replied yes. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Burt to recommend the City Council approve the City Auditor’s Budget. MOTION PASSED: 4-0 4. City Clerk Budget. Christine Paras, Principal Financial Analyst reported an expense decrease of $332,820, due to the removal of election costs included in the Fiscal Year (FY) 2013 Adopted Budget. There was one Full Time Employee (FTE) reduction for an Administrative Associate III, resulting in a $110,000 decrease. The department added $56,000 for minute transcription contract costs. MINUTES Page 15 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Council Member Berman asked about the role of a Parking Examiner. Donna Grider, City Clerk explained the Parking Examiner reviewed appeals of tickets. Citizens who did not agree with the Parking Examiner's decision appealed to the Superior Court. Chair Burt inquired whether outsourcing minute transcription and eliminating the Administrative Associate III position provided a savings to the City. Ms. Grider answered yes. The savings from outsourcing minute transcription was found in the benefits. Vice Mayor Shepherd asked which Commission meetings the Clerk took minutes for. Ms. Grider reported the Clerk's Office was responsible for the City Council and Council appointed Committees. The Clerk's Office was not responsible for minutes for Commissions. Council Member Schmid agreed with the outsourcing of transcription because the turnaround time was less and the cost was less. He questioned whether transcription for more Board and Committee meetings was outsourced. Ms. Grider stated outsourcing transcription was successful. Minutes were provided quickly and were easier to edit. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council to approve the City Clerk’s Budget. Vice Mayor Shepherd thanked the Clerk for experimenting with transcription of minutes. It was a good reflection of managing the Budget. Staff needed to continue working to reduce pension costs. MOTION PASSED: 4-0 5. City Council Budget. Christine Paras, Principal Financial Analyst reported the proposed expense increase totaled $25,000. The majority of the $25,000 was for Council meals, and $10,000 was for special Council meetings, travel, and training. Chair Burt inquired about the increase for the cost of Council meals. MINUTES Page 16 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Donna Grider, City Clerk explained Council meetings that began earlier required a meal. The Council had more Committees and they sometimes had meetings at 4:00 P.M. or 5:00 P.M., which was when meals were required. The Council was also holding more meetings where meals were provided. Chair Burt requested a breakdown of meal costs. James Keene, City Manager indicated the food cost in the Council's Budget did not feed only Council Members. More Council meetings, more Committee meetings, and more Staff attending meetings required more food. Providing meals for Staff was less expensive than paying a per diem. Staff also discussed providing healthier food. Ms. Grider reported the average cost of meals for 15 people was $250. The meals were not elaborate; however, Council Members indicated they wanted healthier food which was going to cost more. Chair Burt noted Council Member Schmid supported moving the Item to the parking lot, (the parking lot was a term used for changes in the Budget). Vice Mayor Shepherd favored having three Committee Members support moving an item to the parking lot. MOTION: Council Member Shepherd moved, seconded by Council Member XXX to require three Committee Members to put something into the parking lot. MOTION FAILED DUE TO THE LACK OF A SECOND Vice Mayor Shepherd supported having meals and purchasing meals from Palo Alto small businesses. Chair Burt was concerned about food waste. Meals needed to be healthier and of better quality, without increasing the cost if waste was reduced. Vice Mayor Shepherd asked how food was being wasted. Chair Burt indicated a great deal of food was left over. Vice Mayor Shepherd requested Staff comment on food waste. Chair Burt requested Staff review the issue. MINUTES Page 17 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Vice Mayor Shepherd wanted to ensure the public did not think the Council was wasting food and money. Council Member Berman felt a deeper analysis was helpful but he did not necessarily agree food was wasted. Chair Burt raised the question because the increase was moderately significant. Ms. Grider suggested the analysis include a projection of Fiscal Year (FY) 2014 meetings that required food and its average cost. Chair Burt did not believe there was an increase in the number of meetings. MOTION: Council Member Berman moved, seconded by Vice Mayor Shepherd to recommend the City Council approve the City Council Budget. MOTION PASSED: 4-0 6. City Manager Budget. Christine Paras, Principal Financial Analyst reported the expense decreases totaled $94,683, primarily due to creating an Office of Sustainability. Costs were shifted from the City Manager's Budget to the Office of Sustainability's Budget. Staff proposed an increase for communications outreach to the public. The department proposed a net decrease of 0.5 Full Time Employees (FTE) due to the elimination of the Deputy City Manager position. Council Member Berman inquired about the lack of percentages for performance measures in Fiscal Year (FY) 2013. James Keene, City Manager understood those questions were not included in the National Citizen Survey (Survey) for FY 2013. Council Member Berman asked if the vendor included those questions in the Survey. Mr. Keene answered yes. The contract provided for a limited number of questions that Staff could initiate. The main points of the Budget were elimination of a Deputy City Manager position and creation of the Office of Sustainability within the City Manager's Office. Chair Burt was encouraged by the reorganization of the City Manager's Office. Some assumed the changes required net increases in the Budget, MINUTES Page 18 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 but that did not appear to be the case. He inquired whether the reorganization resulted in a net decrease. Mr. Keene responded yes. Chair Burt inquired whether Performance Measure Numbers One and Two were single questions or an aggregation of related questions in the Survey. Mr. Keene understood those were single questions. Sheila Tucker, Executive Assistant to the City Manager noted Measure Number Three contained two separate questions. Chair Burt asked if Measure Number Three contained individual questions from the Survey. Ms. Tucker answered yes. Chair Burt believed the Survey results showed real trends. Mr. Keene agreed. The Survey had some margin of error, but those were actual numbers. Chair Burt was more concerned when the numbers fluctuated from year to year. He asked when results of the Survey were provided. Ms. Tucker stated the end of the calendar year. Mr. Keene added the City Auditor's Office received the results in September or October. Rating numbers for public information services needed to match people's perceptions of the quality of City services. Staff needed to improve communication outreach to have a stronger linkage with other strong scores. Chair Burt felt those numbers indicated what the community wanted and that they expected strong communications. MOTION: Council Member Schmid moved, seconded by Chair Burt to recommend the City Council approve the City Manager’s Office Budget, to include increasing the proposed communication Key Performance Measure Number 2–Preserve transparency and enhance communication with the public–from 74 percent in 2014 to 80 percent in 2014. Vice Mayor Shepherd inquired about the purpose of the 0.05 FTE for sustainability. MINUTES Page 19 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Keene said Staff attempted to distribute a person's time to the departments where Staff expected that person to expend time during the course of the year. MOTION PASSED: 4-0 7. Office of Sustainability Budget. Christine Paras, Principal Financial Analyst reported the Office of Sustainability's purpose was to develop a comprehensive and strategic plan for the City to become more environmentally sustainable. Key expense increases were shifting costs from the City Manager's Office and adding a Chief Sustainability Officer. The net increase of those changes was $23,023. The net Full Time Employee (FTE) impact was zero. James Keene, City Manager noted Staff typically did not include small office budgets in the Budget; however, the Office of Sustainability's reach extended throughout the City. Almost all aspects of the City focused on sustainability. FTE’s for the Office of Sustainability were contained in the Budgets for the Office of Sustainability, the City Manager's Office, and other Enterprise Fund operations. The Chief Sustainability Officer, while technically reporting to the City Manager, reported to a board of department directors. Chair Burt inquired whether the decrease of 0.5 FTE’s was a result of eliminating the position of Assistant to the City Manager. Mr. Keene answered yes. Chair Burt requested an explanation regarding the allocation of FTE’s. Sheila Tucker, Executive Assistant to the City Manager indicated the FTE’s were allocated as follows: City Manager's Office 0.05, Utilities 0.1, Refuse Fund 0.05, and Wastewater Treatment Fund 0.05. Chair Burt stated the FTE’s were distributed to the departments that the FTE supported, and inquired whether the FTE for the Office of Emergency Services was distributed in the same manner. Mr. Keene did not want Staff to migrate the allocations into the Office of Sustainability. For the purpose of the Budget document, it was the most effective way to show that. Chair Burt asked if the City employed fewer Administrative Assistants. MINUTES Page 20 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Keene reported administrative support staff was also reduced. Chair Burt indicated the City created new positions without creating a net increase in the cost. Mr. Keene concurred. With rising costs and the community growth, the City did not increase the permanent workforce. Staff needed flexibility to create new positions to offset those positions with reductions in other areas. Chair Burt inquired about the percentage of decrease in General Fund employees over the past few years. Lalo Perez, Director of Administrative Services Department (ASD) reported the number of General Fund employees decreased 12 percent since 2007. Chair Burt noted during the same time Palo Alto's population increased. Mr. Keene reported performance measures were increasing. With fewer staff and increasing performance levels, there needed to be improved performance. Chair Burt indicated significantly fewer employees served a moderately larger population with higher performance evaluations. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend to the City Council the approval the Office of Sustainability Budget. MOTION PASSED: 4-0 Ms. Paras reported the FTE’s for the Office of Emergency Services were not distributed across departments. The three full-time benefited FTE’s in the Office of Emergency Services were budgeted within that department. Chair Burt inquired whether the FTE’s were included in Police and Fire Budget. Ms. Paras answered no. The FTE’s were budgeted solely for the Office of Emergency Services. 8. Human Resources Department Budget. Christine Paras, Principal Financial Analyst noted the proposal of a new name for the Human Resources Department Budget was People Strategy and MINUTES Page 21 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Operations. Staff proposed an amendment to the Budget of $50,000 for consultant costs and preliminary planning for the selection of a Human Resources Information System (HRIS). The Budget included an additional $34,000 related to the Cities Wellness Program and the new Employee Orientation Program. The department proposed eliminating one Human Resources (HR) Representative position and adding a Benefits Manager position, for a net impact of $51,000. The Proposed Budget included a midyear reclassification of one position for $42,000. Kathy Shen, Chief People Officer indicated Staff wanted to effectively provide healthcare to employees and said she needed an employee with different skills. Vice Mayor Shepherd recalled a discussion of a more complex method of providing healthcare, and inquired whether the new position worked on that. Ms. Shen stated that was one of the main considerations. Staff wanted to move some transactional work to a vendor so that Staff was able to focus on value-added work. Council Member Schmid noted the performance measures covered a wide territory, and inquired whether they captured the issues. Ms. Shen worked with the City Auditor to determine meaningful metrics in this regard. Talent and succession planning were key components. The recruiting metric was a basic HR metric. Council Member Schmid inquired whether a distinction between recruiting for a specialized position and recruiting young people had different meanings with regard to the day’s recruitment was held. Ms. Shen agreed and said measuring the well-being, including those special cases, allowed Staff to improve. The average position included special and typical recruitments. Council Member Schmid asked why the turnover performance measure focused on first year. Ms. Shen explained the probation period was now one year, and Staff wanted to ensure they were hiring people with the right skills, including helping managers mentor newly hired employees. Council Member Schmid inquired whether an important issue was the loss of employees with three or four years of service. MINUTES Page 22 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Ms. Shen said she would track turnover in general. Council Member Berman observed that the department had one more performance measure than other departments; it contained the least amount of historical data and had ambitious goals for Fiscal Year (FY) 2014. Ms. Shen reported performance measures were new, except for the first year turnover. She thought those were the right topics to focus on. Chair Burt asked if Staff had a sense of whether they were reaching the FY 2013 goal for first-year turnover. Ms. Shen did not know the current percentage. MOTION: Council Member Berman moved, seconded by Chair Burt to recommend that the City Council approve the People Strategy and that the Operations Budget include the inclusion of $50,000 for the HRIS Planning Consultant. MOTION PASSED: 4-0 9. Employee Benefits Fund. Christine Paras, Principal Financial Analyst reported the Employees Benefit Fund included the Workers Compensation Fund, the General Benefits Fund, and the Retiree Medical Fund. Regarding the Workers Compensation Fund, the expense increase totaled $0.3 million, the majority of which was due to an eight percent increase in premiums recommended by a third-party administrator. For the General Benefits Fund, the expense increase totaled $3.1 million, comprised of the net pension increase of $0.7 million and a net Citywide healthcare increase of $2.4 million. The Citywide annual required contribution (ARC) was said to increase by $0.2 million; employee contributions towards the ARC totaled $1.5 million. The next update for the annual ARC was scheduled for June 30, 2013. Council Member Schmid requested an explanation for the decrease in the amount of claims, while the number of claims did not decrease. Sandra Blanch, Assistant Director People Strategy and Operations explained the number of workers' compensation claims decreased; however, the severity of claims and associated costs continued to increase. Council Member Schmid noted the decrease in claim amounts was 50 percent. MINUTES Page 23 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Ms. Blanch reported claims in Fiscal Year (FY) 2012 were not fully developed. Older claims with more medical treatment were differentiated from newer claims with less medical treatment. Council Member Schmid asked if the claim amount was attributed to the year of injury or incident. Ms. Blanch answered yes. Costs were associated with the date on which the injury occurred. Council Member Schmid inquired whether Staff expected the amounts to increase as time passed. Ms. Blanch replied yes. Chair Burt asked if the paid amount were actual payments in the fiscal year. Ms. Blanch responded yes. Chair Burt inquired whether the decline in workers' compensation costs paid was real. Ms. Blanch reported those amounts were actual costs; she said the estimated claims that were paid increased. The third-party administrator recommended an increase because of a legislative change that became effective January 1, 2013. Chair Burt inquired whether the information was presented in this format in prior years. Ms. Blanch noted in prior years Staff provided a graph. Chair Burt asked if there was a broader context for how the improvement was achieved. Ms. Blanch explained more claims costs were associated with older employees, and as employees retired costs decreased. Another factor was utilization of contract workers. Chair Burt believed the cost decreased even after considering those factors. He wanted to know what caused the success so it could continue. Lalo Perez, Director of Administrative Services Department (ASD) indicated Staff would follow up. MINUTES Page 24 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Council Member Schmid inquired whether the net increase of $3.2 million for FY 2013 in the General Benefits Fund was correct. Mr. Perez answered yes. Council Member Schmid indicated that without the employees paying their share, that number would have increased by 22 percent. Mr. Perez stated it would have increased by the $2.9 million. The majority of the increase was with the California Public Employees' Retirement System (CalPERS) rate. Chair Burt suggested Staff clarify that the share paid by the City decreased because employees increased their contribution. Mr. Perez said he would include that as a footnote. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the Employee Benefits Fund Budget. MOTION PASSED: 4-0 Mr. Perez reported the Council Contingency Fund had $250,000 available for recommendations. Chair Burt recalled in FY 2013, funds were spent for automated external defibrillators. Mr. Perez remembered funds were also spent for another item, but he did not remember the specific item. Vice Mayor Shepherd inquired about the process for using the Council Contingency Fund. Mr. Perez reported a Committee could make a recommendation to the Council to expend funds. The Council had the option to replenish the Council Contingency Fund from the Budget Stabilization Reserve (BSR) Fund. Chair Burt added that Council could initiate a motion to expend funds. Mr. Perez added the item had to be agendized. Staff also could recommend expenditure of funds. MINUTES Page 25 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Vice Mayor Shepherd asked which method was used for the automated external defibrillators expenditure. Mr. Perez explained the discussion occurred as part of the midyear review when the entire Budget was open for discussion. He said the Council could accept, decline, or change Staff recommendations during the midyear review. Chair Burt believed the Finance Committee (Committee) normally did not budget the Council Contingency Fund in advance. Mr. Perez indicated that Staff had recommended the dollar amount, and the Committee recommended it to the Council. Chair Burt suggested the Committee not recommend use of Contingency Funds to pay for an item the Committee wished to add to the budget. Mr. Perez reported the Committee could add funds for a program from surplus funds, from reserves, and from Contingency Funds. Chair Burt felt it was technically permissible for the Committee to use Contingency Funds during the initial budgeting process; however, he did not remember that occurring. Mr. Perez indicated it occurred for augmentation of the Human Services Resource Allocation Process (HSRAP). 10. General Liability Fund. Christine Paras, Principal Financial Analyst reported the expense increase totaled $125,000, primarily due to premium increases for umbrella excess liability and increases for property loss and special liability. Council Member Schmid inquired about the source of revenues. Ms. Paras asked if Council Member Schmid meant the $125,000 revenue amount. Council Member Schmid answered no. Ms. Paras indicated the allocation methodology was based on a ten year claim expense. Staff used the claim liability to review the claim expense trend for the prior ten years. Some expenditures were directly allocated to other funds. MINUTES Page 26 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Chair Burt asked Council Member Schmid if he wanted to know whether the source of other revenue was payouts from insurers. Council Member Schmid explained that on the expenditure side there were provisions for claims, and he assumed that was calculated each year by departments. The general expense item varied dramatically year over year, and he assumed that was based on claims. Lalo Perez, Director of Administrative Services (ASD) reported other revenue was the allocation to departments and funds. The general expense was an expense for claims. Council Member Schmid inquired whether there was a reserve fund for claims. Mr. Perez explained a significant incident could increase the expense. A second factor was the funding ratio, or the confidence level for funding the actuarial valuation of expected liability. He seemed to recall a significant incident resulted in the large increase for claims. Council Member Schmid indicated Staff did not seem to anticipate any unusual claims for Fiscal Year (FY) 2014. Mr. Perez indicated Staff returned to the 90 percent confidence level funding. Staff was more confident that funding was available should something significant occur. MOTION: Council Member Schmid moved, seconded by Chair Burt to recommend the City Council approve the General Liability Fund Budget. MOTION PASSED: 4-0 11. IT Department Budget (Capital and Operating). Jonathan Reichental, Chief Information Officer reported on the three-year strategy for the Information Technology (IT) Department. The first element of the strategy was to embrace civic innovation and to relate to technologies. A second element was related to IT governance, or ensuring that Staff was working on the right technology for departments at the right time. The third element was in regard to enhancing service delivery. Two components of the third element were training and implementing employees through a new operating model. The fourth element was significant infrastructure upgrades for technology. For the first time the department had a dedicated employee to focus on information security. The external MINUTES Page 27 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 audit identified ten areas as problematic and made ten recommendations. Staff agreed with all recommendations, and completed six of the ten recommendations. The remaining four recommendations were to be completed prior to the end of Fiscal Year (FY) 2014. Some of the security recommendations required significant work. The department's posture with regard to disaster recovery was to protect the City from earthquakes, power outages, fires, cyber attacks, water, and other risks. Investing in measures to protect against water damage alone was a poor use of taxpayer money. The cost for conversion from a water-based suppression system to a gas- based suppression system was in excess of $200,000. Ultimately the footprint of the data center was reduced to the point that there was nothing to protect. Recommended modifications to the sprinkler system were completed. Staff was working on a comprehensive disaster recovery plan. The external audit recommended a comprehensive IT risk assessment; Staff was expected to complete that project by the end of FY 2014. Chair Burt felt the transformation of the IT Department was significant. Lalo Perez, Director of Administrative Services (ASD) recalled the Finance Committee (Committee) requested an update from the IT Department regarding audit recommendations. Christine Paras, Senior Financial Analyst reported the net revenue decrease was primarily due to the loan repayment to the General Fund. Staff proposed an amendment to include a $50,000 increase for Police Department scheduling software. Capital project transfers decreased by $1.3 million. Staff proposed an increase of $0.4 million for the technology fee. Interest earnings were the interest pool earnings for cash balances. The net expenditure decrease was $1.3 million. The department proposed eliminating 3.38 hourly positions, resulting in a decrease of $0.2 million. The department requested the addition of one Full Time Employee (FTE). Staff reallocated 0.35 FTEs from the IT Department to the ASD. The department proposed reallocating a Senior Technologist from the Utilities and Public Works Departments. Technology projects included acquisition of new computers, a virtual library branch, radio infrastructure replacement, and improvements to the Utility customer billing system. Mr. Perez noted changes to the layout of the capital portion of the Budget. Vice Mayor Shepherd asked Staff if cloud computing required additional security measures. MINUTES Page 28 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Mr. Reichental reported vendors were designing solutions to accommodate government needs and incorporated additional security measures consistent with Federal and State requirements. Vice Mayor Shepherd assumed computer operations were moving to a cloud; however, the community was concerned about security. Mr. Reichental said he needed to evaluate proposed solutions to understand whether it was appropriate. He mentioned that some Public Safety technologies would not be moved to a cloud in the near to medium term. Many government agencies were already utilizing cloud technology. Council Member Schmid stated security and functionality of the system in all situations were keystones for all activities. The strategic plan needed to include productivity elements of IT infrastructure and methods for engaging the public and sharing information with the public. He requested Staff review performance measures in order to track and monitor achievements. Council Member Berman indicated immense amounts of information were now available to the public, and the availability of that information needed to be communicated to the public. Chair Burt felt the IT plan and program was good. Staff needed to provide the story to the public. There was a lag between improvements and the community understanding the improvements. The Council needed to invest in communication to the public. MOTION: Council Member Berman moved, seconded by Council Member Schmid to recommend the City Council approve IT Department Budget (Capital and Operating). Council Member Berman felt the public needed to be made aware of the City's efforts regarding transparent governance. Chair Burt reported public opinion reflected in City surveys was not the same as public opinion expressed in online comments. MOTION PASSED: 4-0 12. Administrative Services Department Budget. Christine Paras, Senior Financial Analyst reported that Staff proposed a revenue increase of $38,000 for easement fees, sale of salvage, and miscellaneous revenue. A $25,000 increase in bank card charges and a MINUTES Page 29 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 decrease of $24,000 for supplies resulted in a $1,000 net increase for expenses. Full Time Employee (FTE) changes resulted in a net increase of $25,000, which was offset by the reallocation of 1.66 FTE’s, totaling $0.2 million. For the printing and mailing component of the Administrative Services Department (ASD), Staff proposed one FTE reallocate 0.05 of the General Fund, resulting in a decrease of $7,000. Vice Mayor Shepherd asked why ASD budgeted for the full amount of bank card charges. Lalo Perez, Director of ASD was working with the Legal Department regarding options, and wanted to provide potential recommendations on fee increases. Vice Mayor Shepherd inquired about the bills being paid in order for the charge to be allocated to ASD. Mr. Perez explained it was an administrative fee charged by Visa and MasterCard to the merchant. Vice Mayor Shepherd asked what City bills or services the public was paying for that caused the credit card fee to be charged to ASD. Mr. Perez indicated residents were paying with credit cards at the revenue collections office. Vice Mayor Shepherd asked why the bank card fees were not charged to the revenue being collected. Mr. Perez reported bank card charges for payments on utility bills were allocated to the Utilities Department. Administratively, the charges were not worth the time required to allocate those costs to the various departments. The Utilities portion was significant enough to warrant allocating those charges. Vice Mayor Shepherd inquired whether Staff considered outsourcing some ASD services. Mr. Perez was using temporary salaries to staff two open payroll positions while he analyzed outsourcing options. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the Administrative Services Department Budget. MINUTES Page 30 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 MOTION PASSED: 4-0 MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to include the increase of $50k to IT Department Budget. MOTION PASSED: 4-0 13. Printing and Mailing Fund Budget. Lalo Perez, Director of Administrative Services (ASD) reported Staff maintained the status quo for the Budget. The Printing and Mailing Fund was maintained because of the need to print the Council packet. Staffing was reduced from five Full Time Employees (FTE) to 2.5 FTE’s, which included a 0.5 FTE for a temporary employee. MOTION: Council Member Schmid moved, seconded by Council Member Berman to recommend the City Council approve the Printing and Mailing Fund Budget. MOTION PASSED: 4-0 Future Meetings and Agendas Chair Burt announced the next meeting was scheduled for May 9, 2013 at 6:00 P.M. Budgets to be reviewed on May 9 were Planning and Community Environment, Community Services, Human Services Resource Allocation Process (HSRAP), and Library. Budgets scheduled for review on May 14 included Police and Fire, Utilities, and Municipal Fees. On May 16, the budgets for review were Public Works, Special Revenue, and General Fund Capital. Wrap up and Management Compensation Study were scheduled for May 23, 2013. Lalo Perez, Director of Administrative Services (ASD) requested rescheduling the May 14, 2013 meeting. James Keene, City Manager needed to attend the Policy and Services Committee meeting scheduled at the same time the Finance Committee meeting was scheduled for on May 14. He suggested rescheduling the meeting to 10:00 A.M. on May 14 or May 15. Council Member Schmid favored meeting Tuesday morning. Council Member Berman was available Tuesday morning. MINUTES Page 31 of 31 Special Finance Committee Meeting Minutes: 5/7/2013 Chair Burt was not available Tuesday morning, and suggested Wednesday. Vice Mayor Shepherd was unavailable on Wednesday. Mr. Keene suggested meeting at noon on Tuesday. Chair Burt suggested a longer meeting on Thursday, May 16, 2013. Mr. Perez noted the Capital Budget was scheduled for May 16, and suggested the meeting begin earlier on May 16. Chair Burt indicated the meeting could begin at 4:00 P.M. and include a dinner break. Mr. Perez felt the only concern was the availability of department directors. Council Member Schmid thought the meeting could last as long as six hours. Mr. Perez indicated Budgets not reviewed could be moved to the wrap-up night. The May 14, 2013 meeting was canceled, and the May 16, 2013 meeting was scheduled to begin at 6:00 P.M. Adjournment: The meeting was adjourned at 10:08 P.M. APPENDIX 4 FINANCE COMMITTEE MINUTES Page 1 of 29 Special Meeting Thursday, May 9, 2013 Chairperson Burt called the Finance Committee meeting to order at 6:17 P.M., in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Schmid, Shepherd Absent: Agenda Items 1. Review of Human Services Resource Allocation Funding Recommendations for Fiscal Year 2014 Minka Van Der Zwaag, Office of Human Services Manager reported the Human Relations Commission (HRC) reviewed Priority of Needs when compiling Human Services Resource Allocation Program (HSRAP) recommendations. The recommendations were informed by many surveys, focus groups, interviews, and research. Based on research, the HRC added dental health and elder abuse prevention to the Priority of Needs. Staff invited 12 new agencies, in addition to current providers to respond to the Request for Proposal (RFP) for the HSRAP process. The funding recommendation was $300,737 for 14 agencies, with an option to renew for the next fiscal year. Palo Alto Community Child Care and Avenidas were the two largest recipients of funds. Staff received funding requests in excess of available funding. Two agencies did not receive awards because of the static funding of HSRAP, plus, their needs were not as great as other agencies' needs. Through the Human Resource Needs Assessment, Staff identified tutoring for low income children as a need. Palo Alto Housing Corporation and Dream Catchers submitted proposals and received funding for tutoring programs. The two programs provided different but complementary services. The HRC Allocations Committee felt food for the homeless was a basic need, and they wished to increase funding for a program to meet that need. InnVision/Shelter Network, the community's only major provider of MINUTES Page 2 of 29 Finance Committee Special Meeting Minutes 5/9/13 food for the homeless received a $3,000 increase. The only method to add new agencies was to reduce funding to current agencies by five percent. After the RFP closed, Staff discovered an application was not received from one long-term applicant and recipient: Abilities United, because of an incorrect email address. The City Attorney advised it was permissible to allow Abilities United two weeks to submit an application. Staff proposed recommendations to 1) approve funding for agencies and include funds in the Budget; 2) to waive the timeliness requirement for the RFP submission by Abilities United; and 3) to authorize the City Manager or his designee to authorize the execution of contracts. Council Member Berman inquired about the decision not to fund Vista Center for the Blind and Visually Impaired. Ms. Van Der Zwaag reported Vista Center for the Blind and Visually Impaired requested funds to work with seniors experiencing vision loss. The program did not receive funds due to the lack of funds. The program fit a Priority of Needs, but the only method for providing funds was through reducing funds in other programs. The HRC Allocations Committee and the HRC felt stronger about making new funding available for the tutoring agencies. Council Member Schmid inquired whether the contracts would automatically renew in Fiscal Year (FY) 2015. Ms. Van Der Zwaag answered yes. As a courtesy, Staff provided the Finance Committee (Committee) an update on HSRAP. Council Member Schmid asked if the HRC Allocations Committee followed an assessment process in determining the amount of funds each program received. Ms. Van Der Zwaag reported the HRC and HRC Allocations Committee discussed reducing funds for certain agencies to make money available for other agencies, but decided to reduce funds across the board. Council Member Schmid recalled the newest element was food for the homeless, and asked if there were programs other than InnVision, such as La Comida that were able to help. Ms. Van Der Zwaag noted La Comida provided meals for seniors and was a current grantee. InnVision/Shelter Network was the largest provider of food, specifically for the homeless. MINUTES Page 3 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Schmid inquired about churches providing food on a regular basis. Ms. Van Der Zwaag explained InnVision/Shelter Network managed the program for churches to provide food. Council Member Schmid noted various applicants counted the homeless population at 600, 400, and 300. The Housing Element counted 170 homeless individuals. He asked if Staff could reconcile those counts. Ms. Van Der Zwaag responded not at the current time. The last homeless census was taken a few years ago, and that number was closer to 275. She said information from a recent census had not been released yet. One possibility was that agencies could be using larger numbers because they felt the homeless population was significantly undercounted in the last homeless census. The homeless counts from the agencies were probably based on the agencies' experiences. Council Member Schmid noted there was not a request for increased funding. Ms. Van Der Zwaag did not want to request additional funding as part of the HSRAP process. If the Committee was willing to increase funding, then perhaps they needed to consider an increase as part of the Community Services Department Budget, separate from HSRAP recommendations. Jim Keene, City Manager recalled previous discussion around holding the Stanford Funds discussion before making a policy decision on different methodologies for funding. Council Member Schmid stated any discussion regarding increased funding needed to be part of Agenda Item Two. Vice Mayor Shepherd asked if Staff was requesting that the Committee accept the grantees. Ms. Van Der Zwaag answered yes. Vice Mayor Shepherd noted funding for HSRAP remained stagnant, while the cost of living increased. MINUTES Page 4 of 29 Finance Committee Special Meeting Minutes 5/9/13 Ms. Van Der Zwaag requested the Committee recommend the indicated grant amounts. Vice Mayor Shepherd asked why Palo Alto Housing Corporation did not receive funding in the past. Ms. Van Der Zwaag explained the Palo Alto Housing Corporation and Dream Catchers were the new recommended grantees for the afterschool tutoring program and some summer enrichment programs. Vice Mayor Shepherd inquired whether the Committee considered increased funding for HSRAP under Agenda Item Number One. Ms. Van Der Zwaag relayed that was the purview of the City Manager and City Finance Director. Lalo Perez, Director of Administrative Services (ASD) mentioned that the Committee considered increased funding in the current discussion and asked if it should be part of Agenda Item Number Two. Chair Burt suggested discussion regarding amount and methodology be held under Agenda Item Number Two. If the Committee addressed Staff recommendations in the current discussion, then they could consider the methodology under Agenda Item Number Two. Vice Mayor Shepherd noted Agenda Item Number One was to accept approved funding. Chair Burt felt the Committee could discuss the total amount of funding under Agenda Item Number Two. He inquired whether a discussion concerning methodology should be held under Agenda Item Number Two or Agenda Item Number One. Mr. Perez believed it was best to discuss that component now. Chair Burt thought the Committee could discuss the methodology for the $300,000 funding of HSRAP under Agenda Item Number One, and the total amount of funding under Agenda Item Number Two. Vice Mayor Shepherd wished to discuss the HRC's proposal to expand funding, and increased funding for HSRAP together. MINUTES Page 5 of 29 Finance Committee Special Meeting Minutes 5/9/13 Chair Burt felt increased funding needed to be discussed under Agenda Item Number Two. The method for allocating $300,000 was part of the current discussion. Staff indicated supplementing the Budget needed to be discussed as part of Agenda Item Number Two. Council Member Berman noted the first half of Vice Mayor Shepherd's comments applied to the current conversation. Chair Burt agreed. Vice Mayor Shepherd wanted to ensure her vote conveyed her intentions and intended to discuss the ability to increase the methodology for FY 2014. Chair Burt stated if Vice Mayor Shepherd wished to increase the dollar amount budgeted, that was part of Agenda Item Number Two. Mr. Perez clarified that if the Committee wished to provide additional funding and wished Staff to work with the HRC, that discussion was part of Agenda Item Number Two. If the Committee wanted to give direction on particular contracts, they needed to do so now. Chair Burt reiterated that the Committee was discussing division of the $300,000 under Agenda Item Number One. If the Committee wanted to increase the pool of funds above $300,000, they needed to discuss that under Agenda Item Number Two. Mr. Perez felt that if the Committee did not have a specific agency in mind and wanted Staff to work with the HRC, then that made sense. If the Committee had specific direction for Staff, then it needed to be discussed now. Chair Burt clarified that if the Committee considered the possibility of increasing funds under Agenda Item Number Two, then they needed to discuss the method now for determining which agency received additional funds. Mr. Keene thought the Committee was interested in discussing a different pool. The only reason to discuss funding under Agenda Item Number Two was to reallocate funds within the Community Services Department Budget to some increased allocation for HSRAP. MINUTES Page 6 of 29 Finance Committee Special Meeting Minutes 5/9/13 Chair Burt noted the Committee could allocate additional funds to the Community Services Department Budget. If Council Members wished to discuss reallocating funds from any of the Staff and HRC proposed agencies to a different agency, then they needed to discuss it at this time. If the Committee wanted to explore additional funds and methods for allocating those funds, then the discussion needed to be held under Agenda Item Number Two. If a Committee Member intended to propose funds be reallocated from some agency to others, he should do so now. Vice Mayor Shepherd said she had no intention of doing that. Council Member Schmid believed there were discrepancies between the amounts agencies received, and suggested the HRC consider criteria to make grants more equal in size, or that they reflect on the value to the community. Chair Burt reported the distributions were the result of numerous years of discussion around various issues. Allocations were based on extensive community and HRC discussions over a number of years. Ms. Van Der Zwaag stated distributions were based on service levels that agencies provided and priorities set in the past. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Schmid to recommend the City Council: 1) approve funding for Fiscal Year 2014 to be included in the Fiscal Year 2014 Office of Human Services contract budget; 2) waive the timeliness requirement for the Request for Proposal submission by Abilities United; and 3) to allow the City Manager or his designee to authorize him to execute year one contracts, and for a renewal up to one additional year (Fiscal Year 2015). The City Manager or his designee was authorized to execute the Human Services Contract and any other necessary documents concerning the contracts. Jill O’Nan, Chair of Human Relations Commission explained the City's relationship with the different HSRAP recipients differed from agency to agency. For example, Adolescent Counseling Services was founded in Palo Alto and was funded entirely by the City. Other agencies received funding from other governmental bodies and private donations. With Adolescent Counseling Services, the HRC wondered whether the City needed to partner with Palo Alto Unified School District (PAUSD) to find funding elsewhere; that freed HSRAP funds to support other programs. The City did not abandon agencies with which it had longstanding relationships. MINUTES Page 7 of 29 Finance Committee Special Meeting Minutes 5/9/13 Vice Mayor Shepherd was impressed that the HRC found new agencies because HSRAP funding did not meet the need. She was proud that the City provided funds to community nonprofit agencies that served the most vulnerable residents. Bill Blodgett, La Comida served approximately 38,000 meals to seniors annually. La Comida was primarily funded by Santa Clara County with a stipulation that La Comida obtain a 10 percent match from another source. Palo Alto was the 10 percent funding source for La Comida. Any reduction of funds from the City of Palo Alto had a tenfold effect. MOTION PASSED: 4-0 2. Community Services Department Budget Christine Paras, Principal Financial Analyst for Administrative Services Department (ASD) noted review of the Police, Fire, and Office of Emergency Services Budgets. The Municipal Fee Schedule was rescheduled to May 16, 2013. Attachment One to the at-places memorandum indicated changes to the Proposed Operating Budget. The revenue line item for driving range in the Fiscal Year (FY) 2014 Proposed Budget column changed to $253,750. Under the contract services line item for miscellaneous, the revised FY 2014 Proposed Budget column needed to read $22,003. For range fees, the total changed to $110,173. The bottom line total for net income changed to negative $503,905. The second Item in the memorandum concerned the Planning and Community Environment, University Avenue Parking Permit Fund and California Avenue Parking Permit Fund. Planning and Community Environment Department and the Public Works Department had the salary portion of those positions moved to the Parking Permit Funds because Staff reallocated a number of Staff positions from ASD; however, Staff needed to transfer the benefits for those positions. In prior years, the activity and costs for the Parking Permit Funds were captured in different departments. Staff consolidated costs into the special revenue funds to show the total net cost of the entire program. Lalo Perez, Director of ASD noted Staff agreed with the recommendation from the University Parking Committee. Ms. Paras stated another correction was moving Parking District utility costs of $139,905 from the General Fund Public Works Department to the Parking District. The last correction was a transfer of $152,822 from the General Fund to the University Avenue Parking Permit Fund to reimburse the Parking MINUTES Page 8 of 29 Finance Committee Special Meeting Minutes 5/9/13 District for the City's share of parking spaces at City Hall. The overall result of corrections to the General Fund was an additional $126,643. The Utilities Fund had a net increase in costs of $27,093. The Technology Fund had increased costs of $13,546. These increased costs resulted from the transfer of funds for parking spaces at City Hall. Attachment Two was a memorandum from the Storm Drain Oversight Committee (SDOC) regarding its review of the FY 2014 SDOC Budget. Attachment Four was the Staff Report reviewing and recommending the proposed Capital Improvement Program (CIP) report to the Planning and Transportation Commission (PTC). Attachment Five was the verbatim minutes of the April 24, 2013 PTC meeting. In the FY 2014 Proposed Budget, Staff changed the presentation of employee benefits to increase transparency for the reader and to review employee benefits in detail. In prior years, Staff included the largest employee benefits for pension and healthcare in the benefits allocation. In the FY 2014 Proposed Budget, Staff separated the largest items, pension and healthcare, into separate line items so that the reader could see the actual change. The second table demonstrated the breakdown of pension, healthcare, and miscellaneous benefits. Chair Burt indicated the change was found in the third and eighth rows of the table on page 86. Council Member Berman noted the word ”Miscellaneous” was excluded from the Proposed Budget. Mr. Perez said he would revise the Proposed Budget prior to the adoption to show Miscellaneous Benefit Allocation. Chair Burt believed deleting Miscellaneous was the correct method to revise the Budget. The Proposed Budget needed to indicate the prior designation of aggregated benefits; now it was broken into subsections. Mr. Perez reported the Miscellaneous Benefits Allocation was now comprised of administrative costs for third-party administrators. Chair Burt clarified that the Miscellaneous Benefits Allocation should not be deleted. Council Member Berman thought Staff should add the word ”Miscellaneous”. Vice Mayor Shepherd explained that Staff would add the word ”Miscellaneous” before ”Benefits Allocation”. MINUTES Page 9 of 29 Finance Committee Special Meeting Minutes 5/9/13 Mr. Perez indicated Staff did not answer Council Member Schmid's question on May 7, 2013 because he wanted to provide an illustration. Ms. Paras reported the net revenue decrease for the Community Services Department (CSD) Budget was $1.4 million, the majority of which was related to reconfiguration of the Golf Course. The increase in recreation program’s needed to be $119,500. The decrease of $0.2 million reflected historical trends of decreasing class revenue. The overall expense increase was $0.3 million. The Golf Course Reconfiguration Project had a decrease of $0.6 million. An additional $50,000 was budgeted for market outreach. The Art Center Foundation was provided an additional $56,000. Recreation programs were increased by $92,000. She mentioned that Staff budgeted a $0.5 million increase for staffing changes. Overall, CSD increased Full Time Employee (FTE) by 10.41. The majority of the FTEs resulted from an increase in hourly Staff to meet CSD's operational needs. The increase in temporary staffing shown on was 6.84 FTEs. The subtotal net change to the Budget for overall FTEs in CSD showed an increase of 10.41 FTEs. Staff projected a FY 2013 net loss of $0.3 million, due to the Golf Course Reconfiguration Project. Mr. Perez added Staff provided projections of future revenue and expenses for the Golf Course because of prior discussions about the Golf Course Reconfiguration Project. Ms. Paras stated the net impact through FY 2016 and the scheduled completion date of the Golf Course Reconfiguration Project was an overall General Fund decrease of $1.9 million. Mr. Perez noted the surplus balance carried over from the May 7, 2013 meeting was $120,000. The Finance Committee (Committee) approved $100,000 in changes for a consultant for Human Resources data analysis and for Public Safety scheduling software. Council Member Schmid requested to complete the discussion of Human Services Resource Allocation Program (HSRAP) funding. He said grants in CSD totaled $1.1 million; this amount declined over time and only held steady over the prior few years. With an improved General Fund outlook, the goal was one percent of the Budget for members of the community who needed services the most. He proposed adding five percent, or $55,000, to the Budget for CSD. He thought this was a relatively small amount and funds were leveraged for delivery of services. MINUTES Page 10 of 29 Finance Committee Special Meeting Minutes 5/9/13 MOTION: Council Member Schmid moved, seconded by Vice Mayor Shepherd to recommend the City Council add five percent of the budget of $1.1 million to the Community Services Department Budget. Chair Burt originally understood Council Member Schmid was talking about five percent of $1.1 million, but now understood Council Member Schmid was talking about five percent of the HSRAP funds of $300,000. Council Member Schmid wanted to include five percent of all spending. Chair Burt added funding would be increased for all HSRAP contracts. Jim Keene, City Manager asked if the five percent recommendation was limited to FY 2014. Council Member Schmid answered yes. Vice Mayor Shepherd wanted to integrate the Human Relations Commission's (HRC) thinking with regard to increasing funds because the HRC wanted to find a methodology for making HSRAP grants one percent of the Budget. She suggested reviewing the HRC's report yearly to determine whether HSRAP funding increased to one percent of the Budget. Council Member Berman noted expenses of $289,141 and asked where that was located in the Proposed Operating Budget. He found expenses of $400,101 in the Proposed Operating Budget. Ms. Paras explained the information only accounted for changes proposed by CSD; the $400,101 amount included Citywide changes. Mr. Perez inquired whether Council Member Berman was referencing revenue. Council Member Berman responded no, expenses. He said the expenses for increasing 0.5 FTE, increasing temporary staffing, and increasing overtime for special events were not transferred to the net cost column, leading to an incorrect net change to the Budget. Mr. Perez said he would verify the information and suggested Staff provide the departmental request changes. MINUTES Page 11 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Berman asked if the net reduction of $126,643 to the General Fund related to the Parking Funds would offset the surplus of $120,000. Mr. Perez indicated the $126,643 was a net reduction in expense. In reviewing the Public Works Department Budget, the Committee needed to add $126,643 to the surplus. Council Member Berman supported an increase for HSRAP funding. Chair Burt inquired whether Budget changes addressed the additional $50,000 for marketing outreach. He questioned the need to counteract growing competition among programs. Greg Betts, Community Services Director explained a minimum number and maximum number for enrollment in classes were needed in order to cover the cost of a class. Staff wanted to optimize the use of facilities and eliminate underutilized programs. Chair Burt requested further clarification. Mr. Betts reported Staff reviewed the skill building classes essential to the CSD mission, and they eliminated many programs that were available through other organizations. Rhyena Halpern, CSD Assistant Director indicated the purpose of increased funding for marketing efforts concerned visibility and presence of City programs. Staff wished to create basic marketing materials in print, and on the internet that described CSD's programs. Chair Burt inquired whether the increase in funding was explained. Ms. Halpern responded yes. Chair Burt said funding was used for marketing research, as opposed to implementing a marketing plan. Ms. Halpern reported that approximately three years were required to develop a marketing strategy with measureable impact. Customer service was included in marketing. Staff needed to understand the market better in order to serve it better; Staff was considering analysis, design, and MINUTES Page 12 of 29 Finance Committee Special Meeting Minutes 5/9/13 implementation of an evaluation system, as well as customer service software as a result. Chair Burt believed identifying needs and desires in the community and understanding how to provide better services were sound investments. He requested Staff ensure the marketing effort focus on the second note, not the first note. Council Member Berman suggested a marketing strategy complement the Cubberley Advisory Committee's recommendation of a community needs assessment. Ms. Halpern stated part of the proposal was to provide basic information regarding programs. The community was not fully aware of the services and programs offered by CSD. Council Member Berman agreed more materials were needed. Chair Burt suggested Staff consider signage and kiosks at the community centers, in addition to collateral materials. Ms. Halpern agreed with the suggestion. Chair Burt inquired about the hours pools remained open after school began in mid-August. Robert De Geus, Division Manager for Recreation and Golf indicated pools remained open after school began and later into September. The increase for temporary salaries and new revenues were related to extended pool hours. Chair Burt recommended that Staff better utilize the City's website for more dynamic interactive communications. Ms. Halpern agreed that was another reason for Staff to focus on marketing. Mr. de Geus reported the City had a Facebook page and a Twitter account for City pools. Chair Burt understood the discussion in Agenda Item Number One was to restore the five percent reduction to the agencies that were reduced in order MINUTES Page 13 of 29 Finance Committee Special Meeting Minutes 5/9/13 to provide funding for the two new agencies. The Motion was to add five percent to Avenidas and Palo Alto Community Childcare funding above the FY 2013 Budget. He requested an explanation for the need to increase funding for the two agencies that did not have a reduction in funds. Mr. Keene suggested the Motion was to provide a marginal increase to the total category, but said it did not necessarily predetermine how the five percent was distributed among contracts. Chair Burt requested a clarification from the maker of the Motion. His priority was to restore funding to those agencies whose funds were reduced. Council Member Schmid explained that over the last five years funding for the most vulnerable programs in the community were reduced several times. During the earlier discussion, he suggested a review of allocating funds; Staff indicated they reviewed the allocation process over many years and funding was appropriate. Senior services through Avenidas and childcare services for low-income families needed to be part of the increase, which he recommended in order to attempt to offset the loss of funds over the last five years. Chair Burt expressed concerns about sustaining increased funding. Funds from the Stanford Medical Center Development Fund were a possible ongoing funding source for some portion of the increase. He thought Staff and colleagues should consider whether funding could be sustained, and whether Stanford Development funds should be considered as a source for ongoing funding. Vice Mayor Shepherd recalled funds were reduced by five percent in 2009. Minka Van Der Zwaag, Office of Human Services Manager reported HSRAP funding was reduced by five percent in 2005 and again in 2009. Vice Mayor Shepherd believed the five percent increase was only a slight restoration of funds, and less than past reductions. The question was not sustainability, but whether HSRAP funding as one percent of the Budget needed to be a policy. She wanted the HRC to consider that and for them to determine whether the Council needed to make that a policy. She had no comment on the use of Stanford funds. Council Member Berman supported a five percent increase with the Budget outlook improving. Everyone understood funding was reduced when MINUTES Page 14 of 29 Finance Committee Special Meeting Minutes 5/9/13 revenues declined. He inquired whether funding sources required a smaller funding source as a usual practice. Ms. Halpern reported that often public dollars were considered first monies, and nonprofit agencies leveraged those fund commitments to other funding sources. Vice Mayor Shepherd explained if a nonprofit agency qualified for funds through the City's rigorous process, then other sources did not vet it as closely. Council Member Berman felt the City had flexibility regarding use of Stanford funds. Mr. Keene respectfully suggested the Committee not consider a policy establishing a percentage of the Budget for HSRAP funding. However, it was appropriate for the HRC to make such a recommendation. The Council was charged with making the trade-off decisions each year. He thought it would be simplistic to assume other portions of the City's budget were not also directed to a wide range of populations in the community. The idea of a five percent adjustment was logical. With regard to sustainability, the Committee made the same decision in FY 2015 and 2016 based on projections for those years. Beyond FY 2016, there were too many other factors to consider. Council Member Berman clarified that he was referring to the $55,000. Chair Burt wanted to be thoughtful and prudent regarding the change in funding, and was concerned about sustaining Council actions. Vice Mayor Shepherd felt the City made bold moves in previous years to restore funding to important parts of the community. This was a small portion of the budget that benefited those most at risk in the community. MOTION PASSED: 4-0 Chair Burt requested Staff comment on the process to allocate the additional funds. Mr. Perez reported the HRC attempted to call a special meeting in order to reallocate funds prior to the Committee's meeting on June 17, 2013. At the MINUTES Page 15 of 29 Finance Committee Special Meeting Minutes 5/9/13 June 17 meeting, the Committee needed to go through the usual process of reviewing HRC recommendations. If possible, Staff needed to provide HRC recommendations to the Council on June 10, 2013 when they adopted the Budget. The total amount of the funding increase was $55,523, to be taken from the surplus of $120,000. Council Member Schmid noted an expense increase of $400,000, a revenue decrease of $1.3 million, and the net cost of $1.3 million. He asked if the net cost should be $1.9 million. Mr. Perez indicated Ms. Paras would clarify that amount. Council Member Schmid inquired about the need for additional staffing when the Golf Course closed and other services were staffed by contractors. Ms. Halpern reported CSD had 75 regular full-time employees, part-time workers equaled 50 FTEs, and 70 percent of part-time employees worked less than 0.1 FTE. She mentioned that the part-time salary budget decreased by $770,000 over the past seven years; CSD was working with a large staffing gap. The proposed increase in staffing would close approximately two-thirds of the gap. Staffing was reduced while programs and services were not. Council Member Schmid asked if increased staffing maintained services, rather than the growth of services. Ms. Halpern replied yes. Council Member Schmid inquired whether staffing increased from 123 FTEs in 2011 to 134 FTEs in 2013. Ms. Halpern stated most of the additional FTEs allowed CSD to meet capacity. New revenue was tied to some of the staffing increase. Council Member Schmid assumed increase in the number of classes offered and the number of part-time employees resulted from increased demand; however, the number of people enrolled in classes declined over the past four years. Ms. Halpern indicated enrollment declined in the recreation division. The number of people enrolled in Arts and Sciences increased. MINUTES Page 16 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Schmid believed the increase in Staff reflected a growth in outreach and participation. When the Golf Course reopened, staffing was expected increase again with a burst of new activity. Ms. Halpern mentioned that the opening of the Mitchell Park Community Center was an important project, and Staff anticipated $140,000 in new revenues in the first 12 months. Vice Mayor Shepherd understood the Golf Course was expected to have a loss, but there was a much greater overall loss in revenue. She asked for the reason behind the loss. Mr. de Geus anticipated construction on the Golf Course beginning in April 2014; therefore, losses were expected to occur in the last quarter of FY 2014. Chair Burt clarified that Vice Mayor Shepherd asked about sources of revenue loss other than the Golf Course. Vice Mayor Shepherd noted a change in revenue of $1.3 million and said she understood $0.5 million of the change resulted from the Golf Course. Mr. de Geus explained part of the change related to tracking the actual revenues from a variety of programs. Some programs did not achieve the expected revenues. The $1.3 million included a correction for the expected revenues for several programs. Chair Burt inquired whether the over budgeting of revenue resulted in a deficit for those programs. Mr. de Geus answered yes. Vice Mayor Shepherd asked if the programs were identified. Lam Do, Senior Management Analyst identified underperforming programs and said Staff worked with the Office of Management and Budget to reduce revenue targets for areas that did not perform well. Council Member Berman asked how much revenue was lost because of closure of the Golf Course. MINUTES Page 17 of 29 Finance Committee Special Meeting Minutes 5/9/13 Mr. Do replied $1.3 million in revenue in FY 2014. Vice Mayor Shepherd noted a request for additional funds of $20,000 related to the Enjoy! catalog, and asked if that request was related to the request for $50,000 in marketing expenses. Ms. Halpern indicated the two requests were not connected. The Enjoy! catalog was underfunded, and the additional funds covered actual costs. Vice Mayor Shepherd asked if the shortfall in previous years was included in the actual figures. Ms. Halpern responded yes. Staff was rightsizing the Budget. Vice Mayor Shepherd inquired about the job responsibilities of the Volunteer Coordinator for the Palo Alto Art Center. Ms. Halpern reported the Volunteer Coordinator was responsible for overseeing and training 881 volunteers, the person was coordinating programs, and they were developing a manual for volunteers. Mr. Betts asked if Vice Mayor Shepherd was interested in volunteer activities. Vice Mayor Shepherd replied yes. Mr. Betts indicated docent volunteers led programs, performed jobs in the gallery, and staffed special events and activities in the park. Vice Mayor Shepherd inquired whether the Chili Cook-Off was part of the Art Center. Mr. Betts stated the Chili Cook-Off had an art component for children. Vice Mayor Shepherd asked if World Music Day was simply omitted from a part of the Staff Report and wondered about the effect of not having employees for special events. Ms. Halpern reported that Ms. Van Der Zwaag coordinated special events. If Staff contracted services to remove the overtime expense, they could MINUTES Page 18 of 29 Finance Committee Special Meeting Minutes 5/9/13 continue to provide events and have Ms. Van Der Zwaag devote more time to the Human Services Program. Vice Mayor Shepherd inquired whether those activities continued with funding of $50,000. Ms. Halpern remarked that $50,000 was a start to reaching capacity. The proposed CSD Budget was an attempt to fill the gaps. $50,000 could fund the City's five major events. Vice Mayor Shepherd felt it was important to integrate funding for special events because the community loved special events. Mr. Betts mentioned that World Music Day was a program of the Palo Alto Recreation Foundation, and Staff helped with logistics. The Recreation Foundation coordinated specific projects. Vice Mayor Shepherd wanted to ensure Staff accounted for special events. Ms. Halpern continued to analyze the situation in preparation for the FY 2015 Budget. Chair Burt recalled recent cutbacks reduced the number of concerts in the summer concert series and moved performances to Saturday, which resulted in lower attendance. He inquired whether concerts would continue on Saturday. Ms. Halpern reported six shows were planned for the summer on Saturdays in three different locations. If the Air Force Concert Band was subject to sequestration, the number of concerts was reduced to five. Chair Burt inquired about the number of concerts in the past. Ms. Halpern understood six concerts were held in past years. Mr. de Geus believed the number was eight. Ms. Halpern reported attendance in 2010 was 2,500, in 2011 4,000, and in 2012 5,500. MINUTES Page 19 of 29 Finance Committee Special Meeting Minutes 5/9/13 Chair Burt asked if it was too late in the year to increase the number of concerts to eight. Ms. Halpern said she would report back on that possibility. Chair Burt requested to put the concert discussion on the parking list. Vice Mayor Shepherd agreed. Mr. Perez said he would note that. Chair Burt asked how Staff managed to increase staffing without a net increase in Citywide staffing. Mr. Perez reported the summary provided on opening night referred to fully benefited positions. Chair Burt inquired whether part-time employees were a different category. Mr. Perez indicated 9.84 of the 10.41 FTEs were hourly, non-benefited positions. Chair Burt asked if half of a regular employee was being added. Mr. Perez answered yes. Council Member Berman inquired about Golf Course revenue. Mr. Perez explained $503,905 was the projected amount, while $1.3 million compared the FY 2013 Adopted Budget to the FY 2014 Proposed Budget. Council Member Berman was looking at FY 2013 projected numbers, not adopted numbers. The adopted amount was less than $2.3 million. Mr. Perez indicated the adopted figures projected a surplus. Council Member Berman stated the actual amount was $2.9 million. Mr. Perez reported there were two different views. Staff provided the projected amounts to prepare the Committee for a loss. MINUTES Page 20 of 29 Finance Committee Special Meeting Minutes 5/9/13 Ms. Paras referenced the apparent discrepancy between the total expense increase of $289,141 and the total expense increase of $400,101. The changes that were included reflected what the department and Staff included in the Proposed Budget, but did not include Citywide changes. Citywide changes were decreased by $102,633, $262,120, and $66,527. She mentioned $179,000 was included, whereas $18,179 was not. The $18,179 in other change increase resulted from the reallocation of $1,000 for management professional development benefits from salaries and benefits to general expense. On May 14, 2013, Staff provided a corrected table regarding formulas not carrying forward to the net cost column. Council Member Berman indicated changes to the net cost column would change the net change for the Budget. He inquired whether that change had broader ramifications. Mr. Perez related that Staff needed to clarify the descriptors that caused change. The descriptors were not in the right category. Staff needed to restate the net change; however, the Budget itself was not going to change. Council Member Berman was concerned that changes would result in a deficit. Mr. Perez wanted to provide explanations in the correct order. MOTION: Council Member Schmid moved, seconded by Chair Burt to recommend to Council the approval of the tentative Budget for the Community Services Department as amended. MOTION PASSES: 4-0 Council took a 10-minute break from 8:25-8:34 P.M. 3. Library Department Budget Christine Paras, Principal Financial Analyst for Administrative Services Department (ASD) reported revenue increases totaled $443,250, approximately $0.5 million of which was the result of a Library Foundation donation. Fines, fees, and sales revenues decreased by $56,650, primarily due to the closure of the Main Library and Mitchell Park Library. Full Time Employee (FTE) changes resulted in a $0.3 million increase in salaries and benefits because of unfreezing three positions that were frozen in Fiscal Year MINUTES Page 21 of 29 Finance Committee Special Meeting Minutes 5/9/13 (FY) 2013. Temporary salaries decreased by $0.2 million due to a one-time increase in the FY 2013 Adopted Budget. A reduction in overtime resulted from the removal of a one-time increase in FY 2013 for overtime. Other expense changes totaled an increase of $0.7 million, resulting primarily from increasing funds for library collections by $550,000. The department proposed increasing the non-salary budget by $57,000 for the first segment of the Library Strategic Plan. The department expected additional funding to support the Strategic Plan in FY 2015. The department was expanding its Link Plus Program, and needed $50,000 to fund the expansion. In addition, the department was digitizing its collection, and that cost was approximately $30,000. Chair Burt asked how the department would digitize its collection at a cost of $30,000. Monique LeConge, Director of Library Services explained the entire collection would not be digitized. Staff proposed to begin digitization of microfilm while the Main Library was closed. Chair Burt asked if the Proposed Budget accounted for the revised opening date of the Mitchell Park Library. Ms. LeConge indicated planning for staffing and materials was based on half a year because the Mitchell Park Library was not anticipated to open until late 2013. Council Member Schmid inquired whether Staff intended to hire employees for the full-time positions. Ms. LeConge said she would not hire them immediately, but would hire them during the year. The request for temporary staff in FY 2013 was in anticipation of the opening of Mitchell Park Library before the closure of the Main Library. Council Member Schmid asked if the request to unfreeze positions was in anticipation of the Main Library and Mitchell Park Library being open. Ms. LeConge said the request was made because both libraries were open and some people were planning to retire in FY 2014. As a result, two of positions were going to be open for replacements. Staff proposed unfreezing the Assistant Director position in anticipation of Mitchell Park Library opening. MINUTES Page 22 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Schmid believed no career positions would be filled from within current Library Staff. Ms. LeConge believed the positions would not be filled from within Library Staff. Council Member Schmid wanted to bring out changes that were going on with the Library and asked how that affected the Budget. Ms. LeConge indicated existing Staff worked on the library virtual branch while the Main Library was closed. Staff considered community needs, the direction set by facilities, and available technologies to help bridge the gap. Council Member Schmid inquired whether success of the virtual library reduced the number of patrons physically in the Library. Ms. LeConge did not expect the number of patrons to decrease. While patrons continued to access online resources, the number of people in the library did not change but Patrons' use of the library did change. Council Member Schmid asked if changes in use of the library led to changes for the Mitchell Park Library. Ms. LeConge incorporated changes specific to collections and programs. Council Member Berman felt Performance Measure Two showed a higher growth than anticipated in FY 2012, and inquired whether the growth resulted from a new program. Ms. LeConge suggested growth was based on having a community room available at the Downtown Library. While the Main Library was closed, the number of programs offered was reduced. Council Member Berman asked what Performance Measure Two entailed. Ms. LeConge reported teen reading was extensive if online content was included. She said statistics were measured through self-reporting. Chair Burt indicated Performance Measure Two showed an increase from FY 2011 to FY 2012 in actual figures, and a decline in the FY 2013 adopted MINUTES Page 23 of 29 Finance Committee Special Meeting Minutes 5/9/13 figure. If the projected FY 2013 number was revised to the actual number, then it could be higher based on feedback. Ms. LeConge agreed. Chair Burt asked if the same explanation applied to Performance Measure Three. Ms. LeConge responded yes. Chair Burt suggested the numbers reflect those trend changes. If that information was not available, then it needed to be noted. Ms. LeConge stated Staff reported semi-annual statistics and made a projection. Mr. Perez suggested Staff consider incorporating adjusted numbers. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Schmid to recommend to Council the approval the tentative Budget for the Library Department. MOTION PASSED: 4-0 4. Planning and Community Environment Department Budget Christine Paras, Principal Financial Analyst for Administrative Services Department (ASD) reported the overall revenue change was an increase of $4 million. One component of the increase was a projection of an additional $2.3 million related to historical trends and upcoming large projects. A second component was restructuring the department deposit accounts, which accounted for $1.5 million. Another revenue change was a $0.2 million increase in construction and demolition permit fees. Personnel changes resulted in a net 1.8 Full Time Employee (FTE) increase. Non- salary expense increases totaled $2.1 million. There was a separation between the Development Services component and the Planning component; however, revenue was aggregated for the two components. The Development Services FTE changes resulted in a net decrease of two FTEs and a savings of $465,000. The Development Services component of Planning eliminated five vacant positions, resulting in a savings of $0.8 million. Development Services added two FTEs totaling $130,000. An MINUTES Page 24 of 29 Finance Committee Special Meeting Minutes 5/9/13 Associate Planner was transferred from the Public Works Department, and the Development Center was reclassifying various positions. FTE changes for the Planning component resulted in a net increase of four FTEs and an expense increase of $0.7 million. The Planning Department added five FTEs, they eliminated one Engineering Technician, and they reclassified an Administrator to a Senior Management Analyst. Restructuring deposit accounts led to an increase of non-salary expense by $1.4 million. The department increased scanning service contracts to a total of $145,000. Those two changes, along with other adjustments resulted in a net increase of $10,000. A one-time expense for the 27 University Avenue community engagement process totaled $250,000. Funding for the Downtown Parking Study totaled $250,000. In addition, the department planned to update its Comprehensive Plan and Climate Protection Plan. Council Member Berman inquired about the 27 University Avenue community engagement process. James Keene, City Manager recalled the City Council directed Staff to draft a community engagement process, and specifically requested two community meetings. Staff felt community engagement needed to be more extensive. The funds needed to come from the General Fund because additional Stanford Funds were reserved for actual improvements. Staff continued to account for design and other expenditures. Council Member Berman believed the title indicated the City was paying for items associated with a proposed Planned Community project. Earlier expenditures related to design of the Intermodal Transit Center. Mr. Keene agreed more needed to be added to the description. Previous work was initiated by a potential development project. There was the sense that work was performed in response to a particular proposal. The Council wanted to begin a community process in which Staff would independently develop concepts for the site and also accept feedback through the community process. Chair Burt stated that if the title remained the same, then the purpose needed to be clearer. Historically, the development concerned the Intermodal Transit Center; therefore, he suggested the title be the Intermodal Transit Center area specific plan. The current title appeared to concern the private development. MINUTES Page 25 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Berman felt the title implied that the City paid for community engagement to support the private development. Mr. Keene said he would work on revising the title. Staff needed to articulate the title to indicate the activities in the area. Curtis Williams, Director of Planning and Community Environment noted Staff also used the title Arts and Innovation District. Chair Burt felt the Intermodal Transit Center area’s specific plan was more descriptive, less threatening, and described the City's historic intentions. Council Member Berman agreed. The Arts and Innovation District title was part of the development plan. Intermodal Transit Center area specific plan did not carry preconceived ideas. Mr. Keene felt the discussion was more appropriate in a different forum. Existing City policies were disingenuous if the Council was not already considering development or redevelopment around the site. Chair Burt stated describing the project as a specific plan returned to the starting point of the Comprehensive Plan. Council Member Schmid inquired whether Fiscal Year (FY) 2014 activities were projected to increase even more than in FY 2013. Peter Pirnejad, Development Services Director was hesitant to project increases for FY 2014; he adopted a conservative approach. The Planning Department's projections confirmed assumptions that activities were increasing. Council Member Schmid requested the projected activity level for FY 2013. Mr. Pirnejad reported the projection for Development Services in FY 2013 was $13.5 million, with a current actual amount of $12.7 million. Specific to building fees, the actual amount was slightly more than $9 million, and the projected amount was more than $10 million. Council Member Schmid requested an explanation of deposit accounts. MINUTES Page 26 of 29 Finance Committee Special Meeting Minutes 5/9/13 Mr. Pirnejad stated deposit accounts were used to accommodate large clients that wanted a dedicated building inspector on site. Those inspectors approved processes as they occurred. Council Member Schmid inquired whether deposit accounts were included in the previous item. Mr. Pirnejad indicated deposit accounts were included in Budget projections for FY 2015. Mr. Williams added Planning had some deposit accounts. They represented a kind of pass-through cost. The deposit accounts were primarily an accounting issue. Lalo Perez, Director of ASD reported the process allowed Staff to track and compare revenues and expenses. Council Member Schmid asked if there was a loss of several building inspectors. Mr. Pirnejad indicated some of the vacant positions had been vacant for some time, and some positions were being converted to contract Staff. Council Member Schmid expected more building inspectors, given the increased in activity. Chair Burt stated the important distinction was that these were not existing employees. Council Member Schmid believed retaining vacant positions provided flexibility to hire Staff. Mr. Pirnejad reported Staff increased contract funds in order to hire contractors as building inspectors and plan checkers as needed. Vice Mayor Shepherd inquired whether Staff planned to hire a Senior Project Engineer to monitor parking. Mr. Williams noted the increased concern regarding parking, and wanted to hire a senior level person to assist with parking issues. The person in the MINUTES Page 27 of 29 Finance Committee Special Meeting Minutes 5/9/13 position was expected to spend time primarily on parking issues, not counting parking spaces. Vice Mayor Shepherd asked if the position would be ongoing and attentive to the parking situation Downtown and along California Avenue. Mr. Williams indicated the person in the position would address Citywide parking issues. Vice Mayor Shepherd inquired whether the person in the position handled the Newell Street Bridge parking problems. Mr. Williams answered yes. Council Member Berman inquired whether Staff was currently meeting or exceeding the FY 2013 projected amount for Performance Measure One, and whether a more ambitious goal for FY 2014 was appropriate. Mr. Williams did not know because the measurements were taken from results of the National Citizens Survey. Staff wanted to develop specific performance measures for the department. Mr. Pirnejad reported the current average wait time was approximately 15 minutes. The average response time to receive first plan check comments decreased from more than 100 days to approximately 45 days. Chair Burt wished to include Development Center performance measures in the FY 2014 Proposed Budget. He inquired about the measure discussed at the previous Council meeting. Mr. Pirnejad indicated the time between submitting an application and receiving a permit decreased more than 60 percent. Mr. Keene planned to add some of those measures to the Adopted Budget. The key was to establish a wide range of standards for which Staff could measure themselves. Chair Burt requested the status of updating impact fees. Mr. Perez reported Staff retained a consultant to assist with the process. Staff had to consider potential projects and find the nexus, and then the MINUTES Page 28 of 29 Finance Committee Special Meeting Minutes 5/9/13 consultant determined impacts and provided fee recommendations. Some of the fees probably reached the 80 percent ratio of fee setting. Chair Burt expressed concern about the pace of the update. By the time the Council was ready to adjust fees, the economy would enter a downturn and the Council would not adjust fees. Council Member Schmid mentioned that making comparisons with other communities might not be the most effective method to determining comparable benefits because of the high cost of land in Palo Alto. Mr. Perez indicated the Council at the time that decision was made viewed the situation differently. They purposely left some fees at the 80 percent level. The Council had the ability to make policy decisions. He said he could commit to making impact fees a priority in the work plan. Chair Burt inquired about the possibility of outsourcing activities, such as plan checks in the Development Services Center. Mr. Pirnejad utilized the model of having a core Staff perform the main functions relative to permits, plan checks, and inspections. As trends occurred Staff was able to either increase or decrease to meet demand. In the last few months, Staff experienced increased efficiencies through use of advanced technologies. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Schmid to recommend to Council the approval of the tentative budget for Planning and Community Environment. MOTION PASSED: 4-0 Future Meetings and Agendas Lalo Perez, Director of Administrative Services Department (ASD) reported the surplus was $64,000, not including the additional funds to be considered at a meeting the following week. The next meeting was scheduled for Tuesday, May 14, 2013, at 5:00 P.M. Agenda items were the Utilities Department Budget and a Power Purchase Agreement for three photovoltaic facilities. The following meeting on Thursday, May 16, 2013, included a review of the Public Safety and Capital Improvement Program Budgets. MINUTES Page 29 of 29 Finance Committee Special Meeting Minutes 5/9/13 Council Member Schmid inquired about the time of the meetings. Mr. Perez indicated the May 14, 2013 meeting would begin at 5:00 P.M. and the May 16, 2013 meeting at 4:00 P.M. Adjournment: This meeting was adjourned at 9:36 P.M. APPENDIX 4 FINANCE COMMITTEE MINUTES Page 1 of 20 Special Meeting Tuesday, May 14, 2013 Roll Call Vice Mayor Shepherd called the meeting to order at 5:10 P.M. in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair) arrived at 5:25 P.M., Schmid, Shepherd Absent: Oral Communications None Agenda Items 1. Utilities Department Operating and Capital Budget (Operating pp. 273- 316; Capital pp. 201-330). Greg Kerber believed the utility discount provided to low-income disabled and senior residents was insufficient to alleviate hardships. He would like the Council to increase the discount from 25 percent to 50 percent on utilities. From personal experience, utility bills were a severe hardship. Christine Paras, Principal Analyst for Administrative Services Department (ASD), reported the first item in the at-places packet concerned the Community Services Department (CSD) Budget. The first attachment corrected pages 140-142. The second page of the attachment corrected the Full Time Equivalent (FTE) changes for the increase in temporary staffing. Page 141 of the Proposed Operating Budget was revised to 6.84 FTEs, resulting in a subtotal of 10.41 FTEs and a net change increase to the Budget of 10.41 FTEs. Vice Mayor Shepherd inquired whether the corrected information correlated MINUTES Page 2 of 20 Finance Committee Special Meeting Minutes 05/14/2013 to the Staff presentation for the CSD Budget. Ms. Paras answered yes. On page 141, Staff corrected the net cost column to reflect a cost of $48,000 for the addition of the Management Specialist; a $360,800 increase for temporary staffing; and a $10,000 increase for overtime. The grand total net cost was $1,763,690. Vice Mayor Shepherd asked if the net cost column should contain an amount if amounts were in the other columns. Ms. Paras replied yes. Vice Mayor Shepherd inquired whether Staff had changes to notes on page 141. Ms. Paras indicated in note 11 Staff changed the number of active volunteers from 300 to 575. Vice Mayor Shepherd asked if Staff made any changes to page 142. Ms. Paras responded no. Chair Shepherd inquired about changes for page 56. Ms. Paras reported Staff's correction replaced page 56 of the Proposed Operating Budget. The gas service line for the current Fiscal Year (FY) 2013 bill was revised to $39.07, resulting in an increase of $0.20 rather than a decrease of $10.40. In Attachment 2 of the at-places memorandum, the total for the current FY 2013 bill was corrected to $234.28, and the net dollar difference between the proposed FY 2014 bill and the current FY 2013 bill was an increase of $5.41. Vice Mayor Shepherd noted changes made at prior Finance Committee (Committee) Budget hearings did not necessarily change the overall Proposed Budget. Ms. Paras reported Staff requested an amendment to the Utilities Department Proposed Budget to delete the 0.5 FTE Program Assistant position and include 1.0 FTE for a Utilities Project Coordinator position. This change increased gross salary and benefits to $94,686. Because the Proposed Budget included $52,284 for the Program Assistant position, the net increase was $42,399. The second amendment to the Proposed Budget was for allocated charges to the Water Fund from the Wastewater Treatment Fund. Staff decreased allocated charges from $51,000 to $44,000 to align MINUTES Page 3 of 20 Finance Committee Special Meeting Minutes 05/14/2013 the Budget with expected FY 2013 actual numbers. Vice Mayor Shepherd inquired about the page in the Proposed Operating Budget for the change to allocated charges. Ms. Paras replied page 316. The expense was included as an allocated charge in the Water Fund; therefore, $51,000 decreased to $44,000. The change was not stated in the budget adjustment table on pages 314-315. Council Member Berman clarified that the expense should be added to the table. Ms. Paras explained the amount was embedded in the total. Vice Mayor Shepherd asked which line of the table. Ms. Paras clarified that the amount was embedded in the total allocated charge line on page 316 as an expense. Vice Mayor Shepherd requested further clarification. Lalo Perez, Chief Financial Officer, explained the line item for allocated charges on page 316 should be decreased. Vice Mayor Shepherd inquired whether the amount should be decreased by $7,000. Mr. Perez responded yes. Vice Mayor Shepherd asked if the total expenditures would change as well. Mr. Perez indicated Staff would provide a revised page at the wrap-up. James Cook, Chair of Utilities Advisory Commission, reported the Utilities Advisory Commission (UAC) Budget Subcommittee thoroughly reviewed the Proposed Budget with Staff. They reviewed data that was provided publicly at meetings, but did not compare staffing with other utilities. Overall, the Proposed Budgets were good. The UAC continued to be concerned about the defunding of construction. The funding decrease for construction did not reduce the effectiveness of the utility or create future problems for operations. The UAC was pleased that utility rates were stable, with the exception of water. Ms. Paras indicated rate increases were proposed for the Fiber Optics Fund MINUTES Page 4 of 20 Finance Committee Special Meeting Minutes 05/14/2013 of 2.2 percent based on the Consumer Price Index (CPI), and for the Water Fund of 7 percent. Overall the Utilities Department had a net 1.5 FTE increase comprised of adding a Credit Collection Specialist position and eliminating an hourly Administrative Specialist position. The net impact increased the salary and benefits expense by $60,335. Staff's proposed amendment resulted in a net impact of $42,399. Council Member Schmid asked if the Utilities Department contributed to the 5 percent increase in benefits costs. Mr. Perez responded no. Pensions and healthcare costs were the main drivers for increased benefits costs. Council Member Schmid inquired whether the 5 percent increase was caused by Public Safety Department benefits. Mr. Perez believed one of the factors for the increase was Public Safety Department benefits; however, he could not state it was the only factor. Council Member Schmid asked if there was a difference in the Utilities Department that would account for a portion of the increase. Mr. Perez indicated there was not a different benefit or calculation for the Utilities Department. Council Member Schmid noted Capital Improvement Program (CIP) spending decreased by approximately $13 million. Dave Yuan, Senior Management Analyst, explained the deferral for many CIP projects was due to a large backlog of current projects, resource constraints, and a few high priority projects. Council Member Schmid believed the FY 2014 numbers showed a dramatic decline for CIP, but not a decline in work or spending. Mr. Yuan stated the department was carrying approximately $15-$20 million for CIP projects. Council Member Schmid inquired whether the stable rate amounts, with the exception of water, was caused by the decline in spending for CIP projects. Mr. Yuan indicated that was partially correct. Council Member Schmid asked if rates would increase substantially in FY MINUTES Page 5 of 20 Finance Committee Special Meeting Minutes 05/14/2013 2015 when spending levels for CIP returned. Mr. Yuan reported Staff forecasted the CIP projects for the next five years, and there were no dramatic rate increases with the exceptions of possibly water and wastewater. Council Member Schmid asked how Staff planned to increase revenues to cover the return of $13 million for CIP. Mr. Yuan stated the Funds were within the medium to high Reserve Guidelines. Council Member Schmid clarified that the Proposed Budget was balanced because of the decrease of $13 million in CIP, and inquired whether substantial rate increases in FY 2015 would fund the return of CIP spending. Valerie Fong, Utilities Director, asked where Council Member Schmid found the $13 million amount. She believed the difference was closer to $6 million. Council Member Schmid stated the change from FY 2013 to FY 2014 was $!2.7 million. Decreased CIP spending was consistent throughout all the Funds. Ms. Fong explained that the rate structures would sustain CIP spending without dramatic rate increases over time. CIP spending could return with nominal or modest rate increases. Mr. Yuan reported the rate increases projected for FY 2015 were 7 percent for water, none for electric, 9 percent for wastewater, and none for gas. Mr. Perez indicated Staff would draw down Reserve levels to the midpoint and lower in order to fund capital projects in the outer years. Council Member Schmid remarked that CIP funding declined approximately $13 million on a total budget of approximately $30 million. Mr. Perez stated the CIP document included a summary by Fund that showed the return of funding in outer years. Council Member Berman noted Utilities would have a $5 million surplus in FY 2014; consequently, $8 million in Reserves would be needed for the return of CIP spending in FY 2015. He inquired about the discrepancy of $25,000 between the total expenditures line under department summary and the MINUTES Page 6 of 20 Finance Committee Special Meeting Minutes 05/14/2013 total expenditures line under Enterprise Funds on page 279. Mr. Perez would review it. Vice Mayor Shepherd indicated Staff calculated healthcare benefits per employee per department, and hoped that did not become an issue for defining employee compensation. She requested Staff consider whether that was a good technique for managing department expenses and overhead as opposed to a per capita calculation. Mr. Perez noted Staff also provided the average cost per employee. Vice Mayor Shepherd asked when the Council would review the utility discount for senior and disabled citizens. Ms. Fong stated under Proposition 218 the City could not provide discounts; however, Staff proposed changes for the current rate assistance program, particularly for gas and electric customers. The City implemented the Project Pledge voluntary program, and Staff dispensed those funds over the course of the year. Vice Mayor Shepherd inquired about the process for donating through Project Pledge. Ms. Fong reported donations could be made through the utility bill. Staff included reminders about the program as a bill insert. Debra Katz, Manager, Communications noted bill inserts and a City website page provided information about Project Pledge. Vice Mayor Shepherd asked if there was an option on the utility bill. Ms. Fong did not recall a standing option on the bill. Vice Mayor Shepherd requested Staff present information about Project Pledge when rate changes were presented to the Council. Ms. Fong suggested Staff present information as a standalone program rather than in the rate context. Chair Burt inquired about rate increases for FY 2013. Ms. Fong believed rates increased for wastewater and water, but not gas and electric, in FY 2013. MINUTES Page 7 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Chair Burt felt the community was not aware of the lack of electric rate increases, and asked how that could be better communicated. Electric rates for residential were approximately 20 percent below PG&E rates. Ms. Paras reported the Proposed Budget for the Electric Fund had a minimal overall net revenue change. A decrease in customer sales of $1.1 million resulted from lower projected customer demand. This revenue decrease was offset by an increase in revenue of $1.7 million for the cap-and-trade program. The Utilities Department sold allocated emission allowances at auctions, and proceeds benefited taxpayers in the form of purchases of renewable resources and supply-funded energy efficient programs. Expenses decreased by $1.1 million. There was a $1.5 million increase in commodity costs due to increases in renewables and Western Area Power Administration power purchases. The equity transfer to the General Fund decreased because of the lower PG&E rate of return on equity. The percentage decreased from 11.35 percent to 10.4 percent. Capital programs decreased by $2.3 million. Total fund expenditures for the Capital Budget were $8.6 million. The Fund Reserves were within Reserve Guideline ranges. Palo Alto had lower electric rates than four neighbors, and was lower than the average benchmark. Council Member Berman inquired about the increased duration of power outages in Performance Measure 1. Ms. Fong explained the Utilities Department experienced competition for certain highly qualified electric line workers over the past few years. The industry had a shortage of experienced workers. Staff was also aware that a number of Staff in electric operations was interviewing with other agencies, and anticipated more vacancies. Council Member Berman asked if Staff identified measures to mitigate Staff losses. Ms. Fong augmented Staff resources with contract resources, and was working with the Human Resource Department to develop other measures. Residents were experiencing longer response times because of fewer Staff. Chair Burt inquired about enhanced training programs for line workers. Ms. Fong noted Staff was moving to PG&E and other municipal agencies. The City could hire inexperienced workers and train them. Staff was considering hiring more workers from training schools. MINUTES Page 8 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Chair Burt asked if training schools increased the output of graduates in response to demand. Ms. Fong believed that was the case. Training schools were more popular, and more people were enrolling. Local community colleges were developing programs for foundational training. Chair Burt inquired about the salary range for a lineman. Ms. Fong did not have that information; however, Palo Alto compensation packages were not as attractive as in the past. The City utilized Service Employee International Union workers, and the typical electric line worker was a member of the International Brotherhood of Electrical Workers (IBEW). Mr. Yuan reported salaries ranged from $80,000 for apprentice to $100,000 for lead. Chair Burt suggested Staff participate more actively in training programs. Ms. Fong indicated the department did not decrease its training budget, and aggressively provided training opportunities. Council Member Berman asked if Staff was concerned about training workers, and then the workers moving to other agencies. Ms. Fong answered yes, and noted that did happen. Council Member Berman suggested the Proposed Budget indicate Fund Reserves were stated in thousands, not millions. He inquired about the streetlight system conversion project pilot program. Ms. Fong reported Staff conducted the pilot program. Tomm Marshall, Utilities Engineering Assistant Director, believed the description was outdated, because the pilot program occurred and high pressure sodium lights were replaced with LED lights throughout the City. Ms. Fong stated Staff learned from the pilot program, and incorporated that knowledge into purchases of different fixtures. Mr. Marshall indicated LED lighting technology matured, and many more vendors were available. Staff continued to evaluate technology in order to obtain the most efficient and least costly fixtures. MINUTES Page 9 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Chair Burt asked if the pilot program was complete. Mr. Marshall replied yes. Chair Burt recommended the description be changed to reflect a successful pilot program and implementation of the change throughout the City. Mr. Marshall added that Staff was in the bid process for the second large installation of LED streetlights. Chair Burt inquired whether the cost benefit of programs was included in CIP descriptions. Mr. Marshall reported Staff typically did not include cost benefits; however, they could do so. Ms. Fong felt that could be a useful piece of information for this type of project, because typically CIP projects involved aging infrastructure. Vice Mayor Shepherd agreed with Council Member Burt's comments regarding the community's awareness of electric rates. She inquired about the length of time until undergrounding projects were no longer approved. Mr. Marshall reported projects were planned for the next three to four years, and Staff continued to look for areas to coordinate with AT&T. In the next five to seven years, joint projects would be difficult to find. Vice Mayor Shepherd inquired whether Staff would request a new policy for undergrounding. Mr. Marshall replied yes. Vice Mayor Shepherd wanted to prepare the community for discontinuation of undergrounding. Ms. Fong recalled Staff proposed formation of a committee with the intent of providing recommendations regarding the undergrounding program for Council consideration. The City collected 2 percent per year from electric sales for the undergrounding program. Funding became an issue when partner funds ceased. Vice Mayor Shepherd inquired whether the UAC could have that discussion and provide recommendations. MINUTES Page 10 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Ms. Fong reported the UAC agreed there should be more involvement from the community, and agreed to participate in a committee. Vice Mayor Shepherd inquired about the redundancy line. Ms. Fong explained the project was a second electric transmission feed to the City of Palo Alto. Staff continued to actively discuss the project with other parties, and was reviewing costs and route from an engineering perspective. Vice Mayor Shepherd asked if the Smart Grid Technology program began in the winter of 2012. Ms. Fong indicated a few pilot programs were implemented. Staff would begin a number of pilot programs, and set aside funds to implement the various pilot programs. Vice Mayor Shepherd inquired whether Staff considered using fiber optics. Ms. Fong believed some of that could probably be satisfied with a municipal Wi-Fi system. Staff hoped to utilize the Electric Special Projects Reserve to fund the second transmission line. Chair Burt asked why Staff hoped to use the Reserve. Ms. Fong believed there were other ideas for use of those monies. The Utilities Department would recommend use of the Electric Special Projects Reserve to benefit electric ratepayers with respect to reliability. Chair Burt requested Staff reconsider comparing Palo Alto to Mountain View, Redwood City, and Menlo Park, because PG&E supplied all three cities. Santa Clara was the only utility in the region with slightly lower rates than Palo Alto. Palo Alto's rates were favorable when compared to other municipalities. He felt Palo Alto's electric rates were cheap in comparison to other cities, and rates did not increase for three consecutive years. Ms. Fong suggested rates had not increased for five consecutive years. Chair Burt believed the community assumed rates increased annually. Staff needed to make the community aware of the City's low electric rates. Ms. Fong could substitute different benchmarks for Mountain View, Redwood City, and Menlo Park. MINUTES Page 11 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Vice Mayor Shepherd preferred using the three cities, because she did not know which cities PG&E supplied. Ms. Fong could add other agencies and note that Mountain View, Redwood City, and Menlo Park were PG&E customers. Council Member Schmid inquired about the discrepancy between the $1.5 million increase in commodity purchases on slide 7, and the $2.5 million increase in commodity purchases on page 289. Mr. Yuan explained page 290 compared $74.5 million to $73 million. Council Member Schmid clarified that he meant page 289, note 7. Mr. Yuan indicated the $2.5 million was offset by the $1 million decrease in Central Valley project loan advances. Ms. Fong added $1.5 million was a net of the $2.5 million and $1 million. Council Member Schmid asked if commodity purchases totaled $2.5 million. Mr. Yuan answered yes. Commodity purchases included the carbon neutral plan. Council Member Schmid inquired whether the PG&E base rate change was caused partially by gas line problems. Ms. Fong did not believe so. PG&E accounted for its two businesses differently. Council Member Schmid inquired about the basis of PG&E's reassessment. Ms. Fong reported it was the return on equity, because the cost of money decreased. Council Member Schmid believed that basis was not unique to PG&E. Ms. Fong explained the PG&E return on equity was decreased to reflect reduced financing costs for capital projects. Council Member Schmid inquired whether the underground rebuilds in the CIP projects were being performed early to make them watertight. MINUTES Page 12 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Mr. Marshall reported Staff attempted to move as much equipment above ground as possible in order to remove it from standing water. When that was not feasible, Staff rebuilt in the underground vault and assumed a shorter lifespan for the equipment. Council Member Schmid noted complaints of erratic service because of that. Mr. Marshall explained Staff found a number of items in underground vaults that caused corrosion or deterioration of equipment in the vaults. Council Member Schmid asked if Staff utilized the same technology and materials as in the past. Mr. Marshall stated no new materials were available. Council Member Schmid inquired whether chemicals would affect fiber optic lines. Mr. Marshall answered probably not. The plastic covering for fiber optic lines was more resistant to chemicals than rubber. Council Member Schmid inquired whether plastic could be substituted for the rubber used in underground vaults. Mr. Marshall indicated plastic could not be utilized, because the flexibility of rubber was needed. Council Member Schmid inquired whether it was fair for residents to continue paying 2 percent annually for undergrounding with no prospect of benefiting from undergrounding. Ms. Fong stated the Council would have to answer that question. Chair Burt suggested discussion of the Budget was not an appropriate forum for discussion of a policy question. Council Member Schmid felt approving the Budget implied a policy decision. Chair Burt stated the Budget reflected a prior policy decision. Council Member Schmid indicated the policy decision was made through the Committee's vote. Chair Burt reiterated that the Council previously provided policy guidance. MINUTES Page 13 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Council Member Schmid understood the Council decided not to form a committee. Ms. Fong explained Staff operated under prior policy and guidance to collect the 2 percent. The Council had not overridden that policy; therefore, Staff continued to collect the funds. Council Member Schmid felt the Committee was receiving a five-year perspective on collecting the 2 percent. Ms. Fong indicated Staff projected five years ahead, but requested approval of the Budget for the upcoming fiscal year. MOTION: Council Member Berman moved, seconded by Vice Mayor Shepherd to recommend the City Council approve the Utilities Department Operating and Capital Electric Fund. MOTION PASSED: 4-0 Ms. Paras reported revenue increases for the Fiber Optics Fund totaled $0.3 million. The revenue increase resulted from a 2.2 percent CPI adjustment, and a $0.2 million increase in revenue for fiber network to serve all schools in the Palo Alto Unified School District (PAUSD). Expense increases included $0.1 million for salaries and benefits. The total FY 2014 expenditures for the Capital Fund were $0.4 million. Overall there was no change in capital dollar amount between FY 2013 and FY 2014. The Reserve balances exceeded the Reserve Guideline range. Council Member Berman asked if PAUSD reimbursed the City for building the fiber network to schools. Ms. Fong explained PAUSD agreed to pay 50 percent to shorten the time for expansion of fiber optics to schools. Council Member Schmid requested an updated map of the fiber optic ring. Ms. Fong stated an updated map was available on the City's website. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the Utilities Department Operating and Capital Fiber Optics Fund. MOTION PASSED: 4-0 MINUTES Page 14 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Ms. Paras reported the Wastewater Collection Fund had a revenue increase of $0.1 million, and no rate increases. The $0.1 million resulted from increases in connection charges. There was an expense decrease of $3.4 million, primarily due to the CIP program decreasing from $3.8 million to $1 million. Total FY 2014 expenditures for the Capital Program were $1 million. The Reserve Fund balance was within Reserve Guidelines. In comparison to neighbors, Palo Alto was below the average benchmark. Council Member Berman inquired whether the goal of 30 months in Performance Measure 1 should be 3 months. Mr. Yuan stated 30 months was correct. Vice Mayor Shepherd asked about the appropriate time to discuss cross bore drilling. Ms. Fong suggested waiting for discussion of the Gas Fund, because the program was funded by the gas utility. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the Utilities Department Operating and Capital Wastewater Collection Fund. MOTION PASSED: 4-0 Ms. Paras reported revenue decreases for the Gas Fund totaled $0.7 million, the majority of which were due to market-based pricing for natural gas, the change in pricing methodology, and lower demand. Expense decreases totaled $7.7 million, most of which resulted from deferral of the gas main project to FY 2015. The cross bore inspection program was expected to be completed in December 2013. Total FY 2014 expenditures for the Capital Program was $1.6 million, primarily due to gas system extensions, gas meter regulators, and gas system improvement projects. The Reserve Balances were within Reserve Guideline ranges. Monthly residential bills averaged approximately $39.27. Council Member Berman inquired about the frequency of Grade 1 gas leaks. Ms. Fong indicated leaks did not occur often. Because of the aggressive infrastructure replacement program, the number of leaks declined. Council Member Berman asked if Staff had a sense of the actual FY 2013 percentage for Performance Measure 3. MINUTES Page 15 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Mr. Yuan explained that the decrease in FY 2012 resulted from a few large, one-time expansion projects. Council Member Berman inquired whether Staff felt the FY 2013 actual would be closer to 0.5 percent. Mr. Yuan answered yes. Vice Mayor Shepherd requested Staff comment on the cross bore concept as a policy and the methodology of customer payment for repair of sewer lines from the property line to the center of the street. Mr. Marshall stated the payment methodology varied among cities. As part of the cross bore, Staff determined the condition of lateral lines and repaired them to allow visual inspections. Staff could present information regarding lateral lines between the curb and the main sewer line for a policy decision. Repairing lateral lines was a considerable expense, and a number of repairs were backlogged. Vice Mayor Shepherd inquired whether the Council should hold the policy discussion after completion of the cross bore program. Ms. Fong answered yes. The system would be in better shape, and a policy discussion would be reasonable. Council Member Schmid assumed Reserves would be used in FY 2015 for CIP spending. Mr. Yuan indicated three gas main replacement projects were underway with a contract value of $14 million. Staff anticipated the projects would be completed in 2015. Council Member Schmid asked if Reserves would be used for the next project. Mr. Yuan replied yes. Chair Burt inquired whether the Distribution Rate Stabilization Fund should be outside the range in order to accommodate upcoming projects. Mr. Yuan responded yes. Reducing rates in FY 2014 would lead to substantial rate increases over the next few years. MINUTES Page 16 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Chair Burt suggested Staff note the reasons for being outside the range. MOTION: Council Member Berman moved, seconded by Vice Mayor Shepherd to recommend the City Council approve the Utilities Department Operating and Capital Gas Fund. MOTION PASSED: 4-0 Ms. Paras reported the Water Fund included a $0.8 million revenue increase as a result of the 7 percent rate increase effective July 1, 2013. The main driver for the rate increase was the increase of wholesale water costs. There was a $1.2 million expense increase due to decreases in the CIP program. Costs for capital increased from $1.6 million in the FY 2013 Adopted Budget to $5.2 million in FY 2014. Operating transfers to other funds decreased by $1.3 million due to a one-time payment in FY 2013 to the Capital Project Fund for the El Camino Park playing fields and amenities project. Staff proposed one amendment to decrease allocated charges from the Wastewater Treatment Fund to align allocated costs with historical actual amounts. Total FY 2014 expenditures for the Water Fund Capital Projects was $5.2 million. The largest project was the water main replacement project. Reserve balances were healthy. The Rate Stabilization Reserve was slightly above the Reserve Guideline range. The average residential monthly bill as of February 1, 2013 was slightly higher according to benchmark studies, primarily due to replacement of aging infrastructure. Council Member Schmid inquired whether the cost of Hetch Hetchy purchases were included in utility purchases. Mr. Yuan answered yes. Council Member Schmid noted Palo Alto rates were twice as high as other cities, yet Palo Alto residents were the heaviest users of water per capita. Higher rates did not seem to impact consumption. Ms. Fong stated higher costs were a combination of a number of things, including the water source, rents, and leases. Chair Burt clarified that the question was whether Staff could explain why Palo Alto consumed more water per capita despite high rates. Ms. Fong believed a fair amount of potable water was used for irrigation. Council Member Schmid felt price elasticity did not apply in Palo Alto. MINUTES Page 17 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Ms. Fong explained if consumption decreased, the rates could increase because the San Francisco Public Utilities Commission (SFPUC) had to recover a set amount of dollars. Chair Burt inquired whether colleagues were interested in requesting Staff to return with a review of factors for water costs. Ms. Fong indicated Staff could present an analysis of cost drivers versus other agencies from the cost of service study. A water cost of service study was not planned for the immediately future. Chair Burt asked if colleagues were interested in a discussion or if the UAC should hold the discussion first. Council Member Schmid was interested, and suggested the UAC hold a discussion first. Vice Mayor Shepherd was more interested in the status of Hetch Hetchy improvements, and whether the improvements were on budget. MOTION: Chair Burt moved, seconded by Council Member Schmid to request Staff to return at a date uncertain with additional discussion on water rate costs and consumption. MOTION PASSED: 3-1 Shepherd no MOTION: Council Member Berman moved, seconded by Chair Burt to recommend the City Council approve the Utilities Department Operating and Capital Water Fund. MOTION PASSED: 4-0 MOTION : Council Member Schmid moved, seconded by Council Member Berman to include the changes brought forward in the at-places memo, under the Utilities Department, paragraph two. MOTION PASSED: 4-0 2. Utilities Advisory Commission Recommendation to Adopt Three Resolutions Approving Power Purchase Agreements for the Acquisition of Project Output over 30 Years from Three Solar Photovoltaic Facilities for a Total Not to Exceed an Amount of $350 Million. James Stack, Senior Resource Planner, reported Staff issued a Request for MINUTES Page 18 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Proposal (RFP) for new contracts in September 2012, and received 92 proposals. Most projects were solar and of significantly lower cost. Criteria for evaluating the proposals included price using the green premium concept and project viability. The three projects recommended by Staff had the lowest cost proposals with green premiums of less than zero, and scored high on project viability. If the three projects were approved, then Palo Alto would be very close to achieving a fully carbon neutral portfolio beginning in Fiscal Year (FY) 2017. In 2021 earlier contracts would begin to expire; therefore, Palo Alto would need to acquire new renewable resources in order to maintain the Renewable Portfolio Standard (RPS) and carbon neutral goals. In FY 2017 under average conditions, the portfolio would be roughly balanced with long-term resources. In dry years, Palo Alto would have to compensate for significant deficits through market purchases. All contracted projects provided a total green premium of approximately $1.9 million per year, which was a rate impact of approximately $0.27 per kilowatt hour (kWh). The three contracts all contained negative green premiums; consequently, they provided a green premium of approximately –$850,000 per year. Adding those to other projects provided a total green premium of .11¢ per kWh. Chair Burt requested an explanation of green premium. Mr. Stack explained Staff compared the price of the proposed project to a forecast of the brown market price, and adjusted for the variables of the project. Chair Burt inquired about the comparison of these projects to brown power. Mr. Stack forecasted the three projects to be lower cost than brown power over the lifetime of the project. The three projects were the Elevation Solar C project, the Western Antelope Blue Sky Ranch B project, and the Frontier Solar project. They were fairly large solar project contracts beginning at the end of 2016, and were priced at approximately $69 per Megawatt hour (MWh). The first two proposals were presented by the developer Silverado Power. The Frontier proposal was presented by Ridgeline Energy. The two companies were below investment grade, which was fairly common for companies in the industry. The City had the option of the projects coming online at the end of 2015 or 2016. A slightly lower price was associated with the later start date. Given the significant cost increase for the earlier start date, Staff and the Utilities Advisory Commission (UAC) recommended the later start date. With the two Silverado projects, a slightly lower price was associated with selecting both projects. Some risks were associated with a 30-year contract and locking in fixed prices. To address the risk, the City would not pay for energy until it was delivered. To mitigate the MINUTES Page 19 of 20 Finance Committee Special Meeting Minutes 05/14/2013 development or completion risk, the developer pledged cash in the form of a letter of credit. The City could retain some or all funds if the project was late or not completed. Because the three projects were in advanced stages of development, Staff was confident they would be completed. If project output fell below a certain threshold, the City could collect damages. The City could not mitigate the risk of finding more attractive proposals at a later time. The City should begin making significant energy purchases in order to meet the carbon neutral and RPS goals. The prices were extremely low. Reasons for acting at the current time included tax incentives, lower solar panel costs, and a potential increase in the State's RPS requirement to 40 percent. Staff recommended and the UAC unanimously supported approval of the three Power Purchase Agreements (PPA) for 30 years with the three companies, the later start date option, and a waiver of the investment grade credit rating requirement. Chair Burt felt the prices were phenomenal. A convergence of factors resulted in almost artificially low prices. The City had a window of opportunity for low prices before other factors adjusted the prices upward. MOTION: Chair Burt moved, seconded by Council Member Berman to direct Staff to agendize a discussion regarding taking advantage of any other solar opportunities at this price range. Vice Mayor Shepherd expressed concern about the competition between agriculture and energy. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to include in the discussion competition between wind and solar energy with agriculture. MOTION PASSED: 4-0 MOTION: Council Member Shepherd moved, seconded by Council Member Schmid to recommend the City Council adopt three resolutions approving Power Purchase Agreements for the acquisition of Project Output over 30 years from three Solar Photovoltaic Facilities for a total not to exceed amount of $350 Million. Council Member Schmid supported the PPAs while acknowledging the uncertainty of costs and pricing. MOTION PASSED: 4-0 MINUTES Page 20 of 20 Finance Committee Special Meeting Minutes 05/14/2013 Future Meetings and Agendas Lalo Perez announced the next meeting was scheduled for May 16, 2013 at 4:00 P.M. Council Member Schmid requested an estimate of the length of the meeting. Mr. Perez a noted the Agenda was considerable. Any topic not completed on May 16 could be agendized for the May 23 wrap-up meeting. ADJOURNMENT: Meeting adjourned at 7:12 P.M. APPENDIX 4 FINANCE COMMITTEE MINUTES Page 1 of 39 Special Meeting Tuesday, May 16, 2013 Roll Call Chairperson Burt called the meeting to order at 4:02 P.M. in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Schmid, Shepherd Absent: Oral Communications None Agenda Items 1. Police Department Budget (Operating pp. 222-233). Lalo Perez, Chief Financial Officer, recalled two items resulted in changes to the Budget. The surplus of $220,000 decreased by $100,000 for Police Department scheduling software and a Human Resources Department consultant. The Finance Committee (Committee) added $56,000 to the Human Services Resource Allocation Program (HSRAP), leaving a surplus balance of $64,000. Review of key performance measures and the possibility of additional summer concerts were placed in the parking lot for discussion at the wrap-up meeting. Christine Paras, Principal Financial Analyst, reviewed the May 16, 2013 at- places memorandum. Staff proposed amendments to development impact fees, housing impact fees, traffic impact fees, and parkland dedication fees in the Municipal Fee Schedule to include adjustments for the Consumer Price Index (CPI) and construction costs. The revenue impact for the fee changes was minimal; therefore, the Planning and Community Environment Budget would not increase. Staff proposed an 8.5 percent increase to the University Avenue Parking Permits, and a 15 percent increase to the California Avenue Parking Permits. The fee increase for University Avenue would generate MINUTES Page 2 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 $118,915 in additional revenue in Fiscal Year (FY) 2014. The fee increase for California Avenue would generate additional revenue totaling $25,000 annually, which would be offset by lower than anticipated revenue for parking permits and day passes. Therefore, Staff did not propose a change to overall budgeted revenue in the California Avenue Parking Permit Fund. For the Public Works Department, Staff proposed adjustments totaling $194,141 for benefits associated with positions moved from the Public Works General Fund to the Parking District Funds. Staff also recommended a $15,000 decrease in the Public Works General Fund Budget, because the department proposed using funds in the FY 2013 Budget to finance an infrastructure measure for the November 2014 ballot. Staff proposed a $70,000 increase related to tree trimming due to higher than expected bids. The Vehicle Replacement Fund would increase by $0.3 million for the purchase of an aerial ladder truck and a new vehicle. Funds for the Baylands Interpretive Center Improvement Project were being removed, because costs were included in the Baylands Interpretive Center Improvements and Boardwalk Repair Project. The Building Systems Improvement Project was updated to reflect planned expenditures of $100,000 in FY 2018. The final changes were establishing the University Avenue Parking District Improvements Capital Project and the California Avenue Parking District Improvement Capital Project. Chair Burt asked when the Committee could inquire about the changes. Mr. Perez suggested the Committee ask questions when the Agenda Items were being discussed. Chair Burt inquired about the Agenda Items affected by the proposed changes. Mr. Perez indicated changes on page 1 of the at-places memorandum were part of Agenda Item Number 5; changes on page 2 were part of Agenda Item Numbers 6a and 7; changes to the Vehicle Replacement Fund were part of Agenda Item Number 6f; and changes to the Capital Project Funds were part of Agenda Item Number 4. Ms. Paras reported overall revenue changes for the Police Department totaled $0.3 million. Increased parking citations led to $0.1 million of the increase. A new Municipal Fee required by the Massage Ordinance would increase revenue by $3,500. The department's expenses increased by $0.5 million. Seven sworn positions within the department would be unfrozen. The Budget increased by $0.5 million for overtime to align with historical trends. Staff included a decrease in salaries and benefits due to negotiated benefit savings. Overall the department had a decrease of 1.22 Full Time MINUTES Page 3 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Equivalents (FTE). Staff included savings and FTE reductions for Animal Services of 2.6 FTEs. Animal Services projected costs in FY 2013 were approximately $0.4 million to the General Fund. This included an offset for one-time donations to Animal Services. In FY 2014, the net cost for Animal Services was estimated to be $587,000 to the General Fund. The initial target was $0.5 million. Included in the net cost estimate was the full impact of losing Mountain View as a partner, various fee increases, and Staff reductions. The projected estimated cost to the General Fund included fee increases for cat surgeries; although, Animal Services experienced a decrease in volume for cat and small dog surgeries. Scottie Zimmerman, Friends of the Palo Alto Animal Shelter, was searching for local corporate sponsors. The Animal Shelter would participate in pet adoptions through Maddie's Fund. Vice Mayor Shepherd inquired about the frequency of complaints measured in Performance Measure Number 2. Ron Watson, Police Captain, reported in calendar year 2012 the department had three formal citizen complaints, 149 commendations, and 16 use-of- force incidents. Of the 16 use-of-force incidents, one was a canine deployment. Those figures were typical for a 12-month period. Vice Mayor Shepherd inquired about the 149 commendations. Mr. Watson explained a citizen either called or wrote the department with compliments about its work in some area of service. Vice Mayor Shepherd asked how traffic services expenses increased by 32 percent while the number of FTEs decreased. Ms. Paras reported 3 FTEs were added to traffic services. Vice Mayor Shepherd inquired whether the increased number of FTEs represented the increased expenses for traffic services. Mr. Watson answered yes. Vice Mayor Shepherd requested Staff comment on the responsibilities of the traffic team. Mr. Watson recalled in FY 2013 the Council froze seven positions. Because the department did not have enough Staff to support a traffic team, it was disbanded. Dayshift officers supported schools and traffic. As part of the MINUTES Page 4 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 new fiscal year, he hoped to reinstitute the standalone traffic team with three officers and have it operational around the opening of school. As hiring and training continued, additional officers could be assigned to the traffic team. Vice Mayor Shepherd asked if the full traffic team would be operational before the end of the calendar year. Mr. Watson indicated the team would begin with three officers. Assigning more officers to the traffic team depended on hiring across all areas of the Police Department. Vice Mayor Shepherd inquired about the number of vacant positions within the Police Department. Mr. Watson stated the department had three vacancies, which were part of the FY 2013 Budget. Two lateral officers were scheduled to begin work on May 20, 2013. A conditional offer of employment was made to a third officer. He anticipated the third officer would begin work in June 2013. Staff released some of the frozen positions in order to provide conditional offers of employment to two additional lateral officers; however, they would not begin work until late June or early July 2013. Staff wished to place an additional four or five entry-level officers in the summer academy to fill most if not all of the frozen positions. Vice Mayor Shepherd requested an explanation of a lateral officer. Mr. Watson explained a lateral officer could be a fully trained police officer who worked for another agency for a number of years. Lateral also meant an academy graduate who paid his own way through the academy. The officer needed significant on-the-job training. Vice Mayor Shepherd inquired about budgeting for resource officers at the high schools. Mr. Watson reported in the past Palo Alto had two resource officers, one at each high school. One resource officer was included in the Budget, and the position was filled. The officer split his time between the two high schools, with very little time at the middle schools. In addition, ancillary duties for the position allowed less time at the high schools. Vice Mayor Shepherd asked if the resource officer salary was divided between the City and Palo Alto Unified School District (PAUSD). MINUTES Page 5 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Watson understood the salary for one resource officer was divided half to Palo Alto and half to PAUSD. Vice Mayor Shepherd inquired about the amount of funds needed to hire a second resource officer. Mr. Watson indicated one position with benefits would cost approximately $165,000. Vice Mayor Shepherd inquired about grants to fund a second resource officer. Mr. Watson understood grants were a possibility; however, grants typically had requirements for matching funds, and were geared toward communities that needed financial assistance. Vice Mayor Shepherd asked if Staff discussed funding a second resource officer with PAUSD. Mr. Watson believed Chief Burns discussed the matter preliminarily with the PAUSD Superintendant. If the Council was interested, Staff could discuss the matter further with PAUSD. Vice Mayor Shepherd asked if colleagues were interested in funding a second resource officer. Resource officers embedded themselves in the school community in a useful manner. Mr. Watson agreed with adding a second resource officer at the appropriate time. Resource officers' actions at the schools directly impacted the dayshift patrol division. When officers were well known within the school, the police department received more information and solved more crimes. James Keene, City Manager, had not approached the PAUSD Superintendant regarding funding for a second resource officer. He wished to see some data regarding return on investment for the position. The Council's approach was to maintain staffing at existing levels. Information regarding encounters and impacts on drug and alcohol use would be helpful. Vice Mayor Shepherd inquired about the type of information needed. Mr. Keene suggested review of historical data to determine the impacts of one resource officer versus two resources officers. The Council should have a sense of the improvements resulting from additional resource officers. MINUTES Page 6 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Council Member Berman inquired about the reason for comparing key accomplishment metrics to FY 2007 as opposed to the previous year. Ian Hagerman, Senior Management Analyst, reported the data was taken from the Service Efforts and Accomplishments Report. Staff used 2007 to provide an indication of trends. Council Member Berman asked why a higher time figure was adopted in FY 2013 and proposed for FY 2014 in Performance Measure 4. Mr. Hagerman explained that police departments did not have a standard for response time. Staff compared Palo Alto to the median response time for the United States. The national average decreased from 5 1/2 minutes the previous year to 5 minutes. Council Member Berman encouraged all departments to continue to lower their performance measure scores. Mr. Hagerman suggested the ability to decrease response times stabilized without additional resources. Council Member Berman was disappointed that the resource officer focused on high schools, because the officer's interaction in middle school had greater impacts. He would like to see metrics on potential gains from having a second resource officer. Mr. Watson cautioned that data presented only side of the equation in law enforcement. The deterrent effect of a police presence in the community could not be quantified. Council Member Schmid felt the community relied on the Police Department to solve problems, and held officers to a high standard. The response time of 4:28 minutes provided a sense of security to citizens. He hoped the response time would be lower in the case of a school emergency. He inquired whether the decline in Police Department staffing occurred in FY 2010 and FY 2012. Mr. Watson felt declines in staffing occurred over decades. When the seven positions were unfrozen, the department would have 91 sworn positions. In 1974, the department had 110 sworn positions. Council Member Schmid asked if Staff expected to fill the unfrozen positions in FY 2014. MINUTES Page 7 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Watson reported the department made two conditional offers that would be taken from the seven frozen positions. The two positions could be filled in late June or early July 2013. Council Member Schmid asked if the 1 FTE decline occurred through loss of personnel. Mr. Watson answered no. Staff worked through the seven vacancies it had in FY 2012. Council Member Schmid noted the actual FTEs in FY 2012 were 161, and the adjusted FTEs in FY 2013 were 157. Mr. Perez explained that frozen positions did not decrease the total number of FTEs; however, the dollar amounts were defunded from the Budget. Council Member Schmid inquired whether the salary increase of 9 percent reflected the addition of frozen positions. Mr. Watson answered yes. Council Member Schmid asked if the staffing table included filled and paid positions. Mr. Perez stated it counted all positions including frozen positions. Council Member Schmid asked if it included the positions in the process of being filled. Mr. Perez explained it was the total of approved positions Citywide. Some of those positions could be vacant or frozen. Council Member Schmid felt it was difficult to determine the number of positions that would be filled and paid in the FY 2014 Proposed Budget. Mr. Perez asked if Council Member Schmid was trying to figure out the total number of positions the Committee was approving in the FY 2014 Budget. Council Member Schmid was attempting to determine how many paid people were in the Police Department in FY 2013 and how many would be in the FY 2014 Budget. Mr. Perez would review the Budget for that information. MINUTES Page 8 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Chair Burt inquired whether funds were allocated for traffic functions even though the traffic team was not a dedicated group. Mr. Watson reported officers focused their time on schools and traffic in the time between responding to calls once the traffic team was disbanded. Chair Burt asked if 3 of the 7 FTEs would be dedicated to traffic and schools. Mr. Watson explained the three dedicated positions would not be responsible for responding to calls for service; their efforts would focus on traffic and schools. Chair Burt suggested the three positions' primary functions were schools and traffic barring unusual events. Mr. Watson agreed. Chair Burt felt Performance Measures 2 was not a core function of the department. Two of the accomplishments were important performance measures, and both were quite favorable. The average emergency response time was a more important metric than the number of days to respond to certain forms of investigations. He encouraged the department to move to more meaningful metrics, while recognizing that external factors affected performance. Mr. Watson reported that timely resolution of officer-involved incidents was important to the organization, officers and community. Perhaps it was more important internally. Chair Burt suggested two potential metrics regarding Part 1 crimes were the amount of crime that occurred in the community and the percentage of resolved cases. He wanted the department to move toward meaningful performance measures while acknowledging uncontrollable external factors. Council Member Berman inquired whether Chair Burt was referring to performance measures on page 228. Chair Burt stated the percentage of resolved crimes was included in the performance measures. He asked how the average response time for emergencies decreased significantly when the department had fewer officers and worse traffic. Mr. Watson explained that some of the reduction resulted from better deployment of officers. Staff worked to ensure beats were uniformly MINUTES Page 9 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 deployed. Chair Burt believed that the amount of overtime would decrease with additional officers being hired. Historically, Police Department vacancies were filled through overtime. Mr. Perez noted the department included a line item for a study of police services that would analyze the utilization of officers and overtime. The unfrozen positions would create some savings. Chair Burt wanted to be realistic regarding overtime. A savings in overtime expense could cover a 50 percent expense for a resource officer. Mr. Watson explained that approximately one-third of overtime resulted from backfilling vacant or training positions in the dispatch center. Another one-third resulted from field operations, including writing reports after a shift ended, critical incidents extending beyond the shift, and court appearances. In this third, the number of Staff could impact overtime. The final one-third of overtime was spent on special events, investigations, and miscellaneous areas. The number of Staff in the first and last thirds would have virtually no impact overtime. The staffing number impacted the department's ability to adjust to events in the community. Most of the events requiring overtime were not directly related to the number of people on patrol. Chair Burt felt adding seven positions should have some anticipated impact on overtime. If a potential resource officer was placed in the parking lot, he wanted to couple the discussion with a consideration of impact on overtime. Mr. Perez suggested Staff track overtime, and the Committee could review it at the mid-year Budget review. Vice Mayor Shepherd stated the real costs of special events were not being calculated and budgeted. She inquired about the percentage of overtime that resulted from special events. Mr. Watson indicated special events were approximately 25 percent of overtime, because most special events occurred on weekends. Vice Mayor Shepherd asked if 25 percent of the budgeted overtime amount was due to special events. Mr. Watson stated 25 percent of the total amount of overtime, and probably 25 percent of the amount budgeted for overtime. The department could not MINUTES Page 10 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 control special events, such as the number of Stanford football games. Chair Burt believed unfreezing the seven positions was a result of benefits savings. He was interested in placing discussion of a resource officer in the parking lot and requesting Staff return with impacts of a second resource officer. Vice Mayor Shepherd inquired whether Staff could communicate with PAUSD before the parking lot discussion. Chair Burt felt the Committee's discussion regarding a second resource office would be influenced by PAUSD's willingness to share the expense, and by identified impacts of a second resource officer. Mr. Perez suggested Staff return with information at the Council level if they could not return to the Committee. Chair Burt stated the Committee could defer the discussion to the Council if Staff could not provide information by May 23, 2013. He asked if there was Committee support to request Staff to evaluate overtime. Vice Mayor Shepherd supported an evaluation of overtime. Council Member Schmid requested Staff explain the number of positions being increased in the Police Department. Mr. Perez asked if Council Member Schmid wished Staff to focus on the number of police officers. Chair Burt inquired whether Council Member Schmid wanted to understand the staffed and expended amount in FY 2013 versus FY 2014. Council Member Schmid answered yes. Mr. Perez reported Staff would provide the actual and proposed amounts. Vice Mayor Shepherd inquired about the target amount of $500,000 and budgeted amount of $587,000 for Animal Services. Mr. Perez reported Animal Services fell short of its goal by $87,000. Given the better financial outlook, Staff decided to include $587,000 in the Proposed Budget. Vice Mayor Shepherd asked if Staff continued to decrease expenses in order MINUTES Page 11 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 to reach the goal of $500,000. Mr. Hagerman indicated Animal Services reduced Staff, and worked hard to reach revenue goals. Licensing revenue doubled over the prior year, and Staff exceeded the prior year's revenue targets. The number of spay and neuter surgeries decreased by 15 percent; however, revenue increases for non-residents offset that decrease. The Animal Services Superintendant had some flexibility to adjust fees for spay and neuter surgeries as the market changed. Staffing reductions could not continue without severe service impacts. The current revenue targets could not be increased; therefore, the $587,000 amount was realistic for FY 2014. Vice Mayor Shepherd requested the information be included in notes for Animal Services. Mr. Hagerman stated the net cost for FY 2013 included approximately $160,000 from Mountain View for four months of service. The net cost for FY 2014, excluding the donation, was closer to $700,000. The FY 2014 Proposed Budget provided the full impact of Staff reductions and revenue increases. Chair Burt asked if Staff continued to work on obtaining long-term partners for Animal Services. Mr. Hagerman reported potential partners in San Mateo County had contractual obligations through 2015. A focus on public-private partnerships would be most fruitful. Chair Burt encouraged Staff to continue communicating with other municipalities. Mr. Hagerman indicated one problem with obtaining new partners was the size of the facility. The shelter could work with an additional municipality the same size as Mountain View, but not two additional municipalities. Chair Burt stated two partners were not needed. Mr. Hagerman reported Staff would communicate with potential municipal partners. Vice Mayor Shepherd inquired whether Staff discussed a higher contribution from Los Altos and Los Altos Hills. Mr. Hagerman answered no. Los Altos Hills indicated they could not afford a MINUTES Page 12 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 higher contribution. Vice Mayor Shepherd requested Staff provide additional strategies to reach the target amounts. Chair Burt recalled in the prior year the City was in jeopardy of losing municipal partners if it raised contribution amounts. MOTION: Council Member Berman moved, seconded by Vice Mayor Shepherd to recommend the City Council approve the Police Department Budget. MOTION PASSED: 4-0 2. Fire Department Budget (Operating pp. 203-214). Christine Paras, Principal Financial Analyst, reported department revenue increases totaled $0.8 million, primarily as a result of a $0.5 million increase in plan check revenue. A revenue increase of $0.3 million was proposed for Emergency Medical Services (EMS), resulting from increased calls for paramedics and an improved billing process. The net increase in expenses was $15,637. The department proposed a $0.2 million reduction in overtime. As a result of the Fire Utilization Study recommendations, $6,050 was included for Lexipol. An increase of $47,577 for net staffing changes was also included in the Budget. Overall Full Time Equivalents (FTE) increased by 0.94, driven by a 1.44 FTE increase in temporary staff and reallocation of a GIS Specialist. Fred Balin stated the Proposed Budget showed no changed in vehicle personnel over last year, and increased emergency medical services. He concluded that plans were to remove two units from service as more personnel were shifted to EMS. Rescue 2 was the only vehicle in the department with specialized equipment for hazardous materials incidents, vehicle extrication, air tank refilling, and night time lighting. Pressure continued to reduce traditional Palo Alto Fire Department services. Council Member Schmid noted 38 percent more Staff in the Police Department than the Fire Department, yet Fire Department salaries were 16 percent higher. The Police response time was 4:28 minutes; Fire response time was approximately 8 minutes. He inquired about the discrepancy in response time and in number of firefighters and salary. James Keene, City Manager, asked if Council Member Schmid was referring MINUTES Page 13 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 to a higher number of police officers than firefighters, but higher salaries for firefighters. Council Member Schmid was stating the numbers in the table. Mr. Keene believed the number of firefighters was closer to 120. Council Member Schmid indicated 113 plus 5 FTEs in the Fire Department, and 154 in the Police Department. Mr. Keene stated the number of sworn officers in the Police Department would be 91 once the full complement was achieved. Ian Hagerman, Senior Management Analyst, reported much of staffing was shared across both departments, but shown in the Police Department Budget. The dispatch center, records unit, and other administrative Staff were included in the Police Department Budget; however, the services were shared by both the Police Department and Fire Department. Mr. Keene explained typically salaries and costs for sworn officers and for firefighters were higher than support staff. Firefighters totaled approximately 100 FTEs, police officers approximately 91 FTEs. Council Member Schmid inquired about the difference in response times. Eric Nichols, Fire Chief, reported response time was comprised of subcategories: call processing with a standard of 60 seconds or less; get- out time with a standard of 1 minute during the day and 1:30 minutes for night; and drive time. Staff achieved the response time goal for emergency medical calls of 12 minutes or less 90 percent of the time. For fire calls, Staff did not meet the goal of 12 minutes or less 90 percent of the time. EMS calls were the majority of emergency calls to the department, and resulted in a lack of ambulances on a daily basis. Rural Metro ambulances responded to calls in Palo Alto on average 60 times each month, while Palo Alto fire ambulances responded to no calls in Santa Clara County. Consequently, a third ambulance was cross-staffed to respond to medical calls. Council Member Schmid suggested deployment for medical calls could be improved. Mr. Nichols stated the next three to five years would radically change the method of delivering services. As the aging population increased, the opportunities for service would also increase. MINUTES Page 14 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Chair Burt inquired about the status of cross-staffing a third ambulance. Mr. Nichols reported the ambulance went into service on May 10, 2013. Since then, Rural Metro did not respond to a call in Palo Alto. As of May 13 or 14, the Fire Department handled five additional calls that would have been handled by Rural Metro. Chair Burt asked if those changes were included in the mid-year FY 2013 Budget review. Mr. Perez noted one ambulance scheduled to be replaced was kept; therefore, there was no capital cost per se. Chair Burt inquired about efforts to implement mobile deployment. Mr. Nichols indicated the department did not have a formal program for mobile deployment. When in transit to or from training exercises or inspections, fire crews took calls that were near their location, but not in their primary zone. That was the department's mobile deployment. Chair Burt inquired about advanced technology and trends regarding mobile communications. Mr. Nichols understood the next version of the computer-aided dispatch system would allow text messaging and that type of communication. The challenge with advanced technologies was cost. Staff was attempting to use data analytics to predict the pockets of risk and the potential location of calls. Predicting future calls would aid flexible deployment. Chair Burt asked if a future trend for paramedics would be more mobile diagnostics and mobile treatments. Mr. Nichols wanted to position the Fire Department to be a relevant pre- hospital healthcare provider in order to provide the highest level of service to the community. Chair Burt felt the 62 percent increase in fire inspections was a good accomplishment, and requested comments. Mr. Nichols stated the prevention bureau did a solid job, and wanted to perform more inspections. Chair Burt inquired whether the department was achieving the FY 2013 MINUTES Page 15 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 adopted goal of 90 percent of responses to fire emergencies within 8 minutes, and inquired about possible reasons for achieving the goal. Mr. Hagerman indicated the FY 2010 percentage was higher than normal. Consistently over the prior five years, the Fire Department achieved 70-80 percent success for the measure. Mr. Nichols stated implementing preventive measures was less expensive than building a large response force. As the number of inspections increased, the number of fires decreased. Prevention was the best and most cost effective method to reduce risk. Chair Burt requested comments regarding the Hanover Station and Rescue Unit 2. Mr. Nichols reported that was another operational redeployment scheduled to occur on or about the end of June 2013, and removing Engine 2 from service was included in the FY 2013 Budget. Command Staff decided to retain Engine 2 in service, because it responded to the majority of calls and had a pump and water. As a firefighter, he was uncomfortable with not having an apparatus capable of carrying and pumping water. The decision was made to redeploy resources from Rescue 2 to Engine 2. In the next month, Staff would present a request to the Council to purchase a new ladder truck to replace the aging one. The decision was made to make the ladder truck the primary technical, rescue, hazardous material, search and rescue, ventilation piece of equipment for the community. Personnel would not change. Vice Mayor Shepherd asked if services would remain the same for the neighborhood served by Engine 2. Mr. Nichols believed redeploying resources to a station further away would degrade services to some degree. Because the majority of hazardous materials incidents in 2012 were very small, low-level incidents, the degradation of services would be small. A regional approach for hazardous materials incidents would be less expensive with the same results. The trade-off was a potentially small increase in community risk. Having a third ambulance reduced risk, which outweighed a slight risk increase for hazardous materials incidents. Vice Mayor Shepherd noted the environmental safety management component of the Budget increased significantly, and inquired about causes for the increase. MINUTES Page 16 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Hagerman explained the FTE increase resulted from additional hourly plan checkers. Staff added temporary FTEs to accommodate workload. Vice Mayor Shepherd asked if hazardous materials response was included in environmental safety management. Mr. Nichols reported that environmental safety management included the fire prevention bureau, the hazardous materials inspectors, and the plan checkers; everything related to fire prevention and community risk reduction. Hazardous materials were a small portion of environmental safety management. The increase was related to growth in the Development Center and increased construction. Vice Mayor Shepherd inquired about status of the fire efficiency study recommendation to merge two stations at a different location. Mr. Nichols indicated that was a low priority from an economic perspective. He recommended the Council not pursue that recommendation. Merging Stations 5 and 2 into one facility would be an expensive proposition, and would require 5-10 years to complete. Vice Mayor Shepherd noted Mr. Nichols did not mention the cost of savings of the recommendation. Mr. Nichols stated cost savings would occur when the rescue crews were redeployed. Vice Mayor Shepherd felt one of the purposes of the recommendation was increased efficiencies for the neighborhoods. She wished to see key accomplishments across time to better understand trends. Mr. Hagerman reported Staff was attempting to report outcomes and provide more meaningful performance measures. Mr. Nichols indicated from 2007 to 2012 EMS calls increased 16 percent and transports increased 27 percent. The EMS percentage would continue to increase, particularly as the community aged into a higher risk demographic. With Federal healthcare reform, many emergency calls could be screened out of the system before reaching firefighters. He wanted to ensure the community continued to receive quality services. Council Member Berman encouraged the Fire Department to continue striving for high percentages with regard to performance measures. MINUTES Page 17 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 MOTION: Council Member Schmid moved, seconded by Council Member Berman to recommend the City Council approve the Fire Department Budget. MOTION PASSED: 4-0 Mr. Keene reported Stanford University was interested in renegotiating its contract with the Fire Department; however, Staff did not have a target date for completing negotiations. 3. Office of Emergency Services Budget (Operating pp. 215-221). Christine Paras, Principal Financial Analyst, reported previously the Office of Emergency Services (OES) Budget was embedded in the Fire Department Budget. The total OES Proposed Budget for Fiscal Year (FY) 2014 included a total expense of $0.89 million. The one significant change for the OES was unfreezing a Program Assistant position. There were no other revenue or Full Time Equivalent (FTE) changes for the department. Vice Mayor Shepherd inquired about the difficulty of filling the Program Assistant position. Ken Dueker, Director of OES, believed the position could be filled expeditiously. He had a number of internal candidates in mind; however, the position would be open to external candidates as well. Chair Burt requested Staff comment on the differences between the Emergency Operations Center (EOC) and the Mobile Emergency Operations Center (MEOC). Mr. Dueker explained that the MEOC was a mitigation measure to correct a number of known deficiencies. City Hall, which contained the existing EOC and the 911 Dispatch Center, was seismically unsound. The MEOC was a field command post, not a substitute for a public safety building. Chair Burt asked if the MEOC could accommodate the emergency team. Mr. Dueker answered no, nor could the existing EOC accommodate the emergency team. Staff worked around that deficit by utilizing wireless teleconferencing. In addition to the MEOC, the City deployed command post tents; however, neither the MEOC nor tents substituted for a hard structure. Chair Burt noted the MEOC had many technical capabilities, and asked if it could accommodate one-third of the team needed in an emergency. MINUTES Page 18 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Dueker reported the MEOC had one-tenth the seating capacity of the EOC. Chair Burt inquired whether the MEOC could be considered a satellite and the public safety building a command post. Mr. Dueker responded yes. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to recommend the City Council approve the Office of Emergency Services Budget. MOTION PASSED: 4-0 The Finance Committee took a break from 6:28-6:57 P.M. 4. General Fund Capital Budget (Capital pp. 65-188). Lalo Perez, Chief Financial Officer, referenced the proposed amendments contained in the at-places memorandum, and the Planning and Transportation Commission (PTC) letter regarding the Fiscal Year (FY) 2014- 2018 Capital Improvement Program (CIP). Staff added designations, labels, and graphics to the Budget. The Finance Committee (Committee) requested Staff distribute salaries from the central CIP; therefore, Staff allocated salaries to major projects only. The CIP Budget for FY 2014 was $60 million. Chair Burt inquired about the relationship to the Comprehensive Plan. Mr. Perez noted that the PTC requested Staff add a focus on the relationship to the City's Comprehensive Plan. Staff wanted to initiate the planning process for the Capital Budget earlier in the year with regard to infrastructure. The prioritization criteria were not used heavily for FY 2014, because the majority of projects were approved. As funding increased, Staff wanted to ensure the projects could be completed, and made recommendations to add Staff. The majority of $33.4 million would fund parks and open space. Approximately $2 million of the $4.3 million was not allocated to salaries. Reserve amounts included the mid-year changes presented earlier. At the mid-year review, Staff anticipated a $2 million surplus; however, a $5 million surplus was likely. Staff recommended amounts over the 18.5 percent target of the Budget Stabilization Reserve (BSR) be transferred to Capital. Chair Burt inquired whether the document reflected the mid-year changes. MINUTES Page 19 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Perez answered yes. If the surplus reached $5 million, then the Reserve balance at the end of the five years would be approximately $11.5 million, which included $7.6 million transferred at the end of FY 2012. For FY 2014, Staff recommended retaining the balances. Staff projected transfers from the General Fund would increase from $13.2 million in FY 2014 to approximately $15 million, not including a surplus. Brad Eggleston, Assistant Director of Public Works, reported accomplishments included renovation of the Art Center, improvements to San Antonio Road, and improvements to Cogswell Plaza. The Budget for street maintenance doubled in FY 2011. In the intervening three years, Staff completed work using approximately $2.6 million in grant funds. Street conditions were rated using the Pavement Condition Index (PCI). Along with increasing street funding, Palo Alto set a goal of raising its average street PCI score to 85 over ten years with no street having a PCI score below 60. With the proposed addition of $1 million annually to the base funding for the street maintenance program, Staff estimated that the goal of an 85 average PCI score could be met in 2019, two years earlier. With respect to sidewalk repairs, Staff proposed increased funding of $1 million annually. Additional funding for sidewalk repairs would address the backlog of $3.7 million identified by the Infrastructure Blue Ribbon Commission (IBRC). The $3.7 million represented funding needed to complete the original 23 sidewalk district program within 30 years. The Golf Course Reconfiguration Project was scheduled to begin construction in April 2014. Staff requested $8 million in funding in the CIP Budget; $3 million from the San Francisquito Creek Joint Powers Board and $5 million funded through Certificates of Participation (COP). With respect to the Bicycle and Pedestrian Transportation Plan, Staff recommended a Budget of $1.2 million in FY 2014, with funds coming from the Stanford University Medical Center Mitigation Funds. Given the ongoing discussions with the Council regarding use of Stanford University funds, the Council could fund the project at a different level or from a different source. Staff proposed funding the Highway 101 Bike Bridge in FY 2014 with $1.4 million from the $4 million grant awarded by Santa Clara County (County). Four projects for the Lucie Stern Building were combined into one new project for mechanical and electrical upgrades. Two important IBRC recommendations were keep-up and catch-up programs. Funds in the amount of $2.2 million were transferred annually from the General Fund to the Infrastructure Reserve for keep-up. Catch-up needs were approximately $4.2 million annually; however, Staff had not identified a mechanism to fully fund catch-up needs. The new Infrastructure Committee was working on a potential infrastructure revenue ballot measure to fund other projects identified by IBRC. A key IBRC recommendation was the Infrastructure Management System (IMS). MINUTES Page 20 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Staff was working on implementing the IMS, and expected it would be available for planning the FY 2016 Capital Budget. One of the Baylands Interpretive Center Projects was removed, because it was included in another project. Staff failed to include funding for the final fiscal year for one of the CIP projects. Staff worked with the California Avenue and University Avenue Parking Districts to find ways to fund maintenance and improvements to parking facilities. Eric Nordman felt the City had fallen behind other cities with regard to bicycle transportation, and asked the Committee to fund the $1.2 million proposed Bicycle and Pedestrian Transportation Plan. Andrew Boone noted the objectives of the Bicycle and Pedestrian Transportation Plan and the Climate Protection Plan. The goals of those two Plans were realistic. The City needed an integrated system to continue progress. He supported the proposed investment in the Bicycle and Pedestrian Transportation Plan, and suggested the Committee increase funding. Adina Levin supported investments in the bicycle and pedestrian network. Parking issues could be addressed through increased use of bikes and transit. Continued improvements for biking and public transit could forestall expensive parking investments. Kevin Anderson stated the bike network in Palo Alto was excellent, and allowed him and his wife to become utility bikers. He urged the Committee to continue funding the bike network and, if possible, increase funding. Vice Mayor Shepherd felt the Budget was more user-friendly. She inquired about the reasons for decreased funding of curb and gutter repair in FY 2016 and 2017. Mr. Eggleston explained the CIP was originally created to address a backlog of repairs to curbs and sidewalks. Once the backlog was completed, $100,000 would be sufficient to meet new needs. Vice Mayor Shepherd asked why the amount returned to $200,000 in FY 2018. Mr. Eggleston felt the increase could be a mistake. Vice Mayor Shepherd stated the Budget did not indicate that remaining funds for the Bicycle and Pedestrian Transportation Plan would be taken from Stanford University funds. She asked if Staff was asking the MINUTES Page 21 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Committee to recommend the use of Stanford University funds, and which category of Stanford University funds would supply the funds. James Keene, City Manager, reported Staff anticipated using the sustainability component in the Development Agreement for bike and pedestrian activities. Vice Mayor Shepherd inquired whether funds would be capped at $6 million for the five-year plan. Mr. Perez explained the five-year plan was a yearly commitment which the Council reaffirmed. For FY 2015, the Committee could decide to reduce or eliminate funding or change the source of funding. In order to accelerate programs which were important to the community, Staff recommended use of sustainability funds. Mr. Keene stated it was important to include dedicated funding for the Bicycle and Pedestrian Transportation Plan throughout the term of the CIP. Because Staff identified the funding source as Stanford University funds, $1.2 million would be a reasonable allocation over five years. Estimates for the full implementation of the Bicycle and Pedestrian Transportation Plan totaled $35 million. Ultimately the Bicycle and Pedestrian Transportation Plan could be funded from Stanford University funds or the Infrastructure Reserve. It was important for the Council to adopt a Budget which included a funding stream for the Bicycle and Pedestrian Transportation Plan. Vice Mayor Shepherd wanted to include in the Budget a few major capital projects that did not require Stanford University funds. She inquired about the survey regarding transportation modes. Jaime Rodriguez, Chief Transportation Officer, reported the survey received almost 3,600 responses. The survey focused on the modes of transportation used in Palo Alto and the time of day people traveled in the community. Results of the survey would be used in the future to measure changes in behavior resulting from projects built today. Vice Mayor Shepherd would not support a designation of Stanford University funds. She inquired about Staff's vision for the Matadero Creek Trail. Mr. Rodriguez indicated the Matadero Creek Trail was a specific element of the Stanford-Palo Alto Trail Program, which required completion of a feasibility study and approval by the Santa Clara Valley Water District and the City Council. Staff had not started the design process; therefore, the vision was unknown. The vision would be determined through the MINUTES Page 22 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 community outreach process. Mr. Perez referenced the supplemental information for the Highway 101 Pedestrian/Bicycle Overpass Project, which indicated the local match of $1 million from the Stanford University Medical Center Mitigation Funds was approved in concept by the Council. Council Member Berman was pleased Staff raised the issue of capacity to implement and complete infrastructure projects. He was encouraged that the IMS was being developed; however, he was surprised it was not further along. Mike Sartor, Public Works Director, explained that Staff worked with consultants and talked with other cities to understand the IMS. Staff was working with the Information Technology Department to develop a Request for Proposal (RFP) that would be compatible with existing systems. Council Member Berman inquired whether funding would be needed for possible renovation of the Junior Museum and Zoo. Greg Betts, Community Services Director, reported if the Friends' project for renovation of the Junior Museum and Zoo proceeded, then the budgeted project would not be necessary. Council Member Berman requested the status of the Municipal Services Center (MSC) study. Mr. Sartor stated Staff was preparing to issue an RFP for an expert to review operations at the MSC. The study would review potential opportunities for moving operations from the site and for revenue-generating businesses at the site. Council Member Berman asked for the costs contained in the category labeled other for tennis and basketball court resurfacing expenditures. Mr. Eggleston understood the other category was comprised of contractor construction costs. That amount should be in the construction category. Council Member Berman asked if Staff was considering use of parking technology. Mr. Rodriguez stated Staff identified the development and implementation of parking guidance systems as a near-term improvement. As part of the proposed fee schedule for the parking program, Staff set aside funding for MINUTES Page 23 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 that type of preliminary improvement. Council Member Berman inquired whether Staff would provide information to the Council. Mr. Rodriguez indicated the Council directed Staff to focus those types of improvements through the PTC. If the Council was interested, Staff would be happy to discuss improvements. Council Member Berman was happy to see bridge assessment in the Budget. He asked if the photograph was of the Chaucer Street bridge. Mr. Sartor replied yes. Council Member Berman suggested using a photograph of a bridge that was not slated for reconstruction. Mr. Sartor reported the Chaucer Street Bridge was included in the San Francisquito Creek Joint Powers Board project; therefore, the City would not assess the bridge. Council Member Berman felt there was no barrier between the Matadero Creek Trail path and nearby homes, which could upset the homeowners. Mr. Rodriguez stated Staff would identify the appropriate barriers and types of mitigations in response to community concerns or environmental impacts. Council Member Berman suggested using a different photograph or stating the photograph was a simulation to allay community concerns. Council Member Schmid believed a great deal of information was available that could be shared with the community regarding the Matadero Creek Trail. With respect to the Budget coinciding with the Comprehensive Plan, the Comprehensive Plan used broad statements such that any investment would fulfill the need. He asked why the Charleston-Arastradero Road Corridor Project was omitted from the list of projects. Mr. Rodriguez noted the Council authorized Staff to advanced funding for the design phase of the Charleston-Arastradero Road Corridor Project. Public Works was preparing to hire a consultant to build the Project. Since adoption of the current CIP in FY 2013, Staff secured outside funding of $1,450,000. The first step was to complete the design. Previously funded projects were not shown in the proposed CIP. MINUTES Page 24 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Council Member Schmid indicated some of the future CIPs were funded elsewhere, were already funded, or had identified funding. The Charleston- Arastradero Road Corridor had identified funding, but it was not in the CIP. Mr. Sartor explained that the FY 2013 Adopted Capital Budget contained funding for design of the Charleston-Arastradero Road Corridor Project. Construction funding for the Project was not contained in the FY 2014-2018 Budget. Council Member Schmid stated $4 million for the Project was contained in the Budget just a few years ago. Mr. Perez reported if the Project was not identified on the list of projects for funding, then it needed to be reprioritized in future budgets. The Project was part of the polling to determine whether the community wanted it to be part of the ballot measure. Council Member Schmid was concerned that the Project was omitted from the list of projects. The PTC was supposed to connect projects to the strategic vision and plans; however, removing the Project from the list removed the ability to relate the Project to the strategic vision and plans. Mr. Keene recognized that the CIP was an evolving document, and it was getting better. Current year funding was not included in the CIP. The first year of the Proposed Budget was the Capital Budget; the remaining four years was the program. Staff could retain in the document a project for which no potential funding was identified. That approach raised the question of funding for projects. Council Member Schmid indicated Committee comments concerned FY 2015 and FY 2016 for items listed. To get an item that was not listed into the conversation was not easy. Vice Mayor Shepherd suggested Council Member Schmid put the issue in the parking lot. Mr. Keene worked with councils on other CIPs where part of the oversight role was allocating future funding. That was a complicated conversation, because the projects had stages and sequences each year. Council Member Schmid requested the issue be placed in the parking lot. Chair Burt felt the issue was not appropriate for the parking lot. MINUTES Page 25 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Council Member Schmid suggested the CIP be revised to list the Charleston- Arastradero Road Corridor Project, because it had funding in FY 2013 and a promise of future funding. Mr. Keene agreed it was not a parking lot issue. He recommended the Committee direct Staff to add the Project when the adopted CIP was published. Mr. Perez noted page 385 contained a list of prior approved CIPs, including Project PE13011 Charleston-Arastradero Road Corridor Project. Page 386 contained another budget for the Project, PL05002. This was Staff's first attempt to provide readers with a list of active projects. Chair Burt inquired whether the Budget indicated that funds were for design only. Mr. Perez answered yes. Staff was searching for another budgeting system, which could be the IMS. Chair Burt asked if the Budget could include a notation that a project was complete and a summary of the circumstances of projects. Mr. Perez explained that new projects were indicated by shading in the current system. It would be appropriate to add a section within the narratives of which projects were removed. Chair Burt suggested a supplemental section noting projects that benefited Palo Alto, were located in Palo Alto, and involved the City, but were not funded by Palo Alto. He inquired whether the Santa Clara Valley Water District would participate in funding the Matadero Creek Trail Project. Mr. Rodriguez reported the Santa Clara Valley Water District was not participating in implementation of the Matadero Creek Trail Phase 1 Midtown, because the County grant fully funded estimated construction costs of the Project. If mitigations increased costs above the estimated amount, then it would be appropriate to request funding from the Santa Clara Valley Water District. The Santa Clara Valley Water District usually would not fund a project until feasibility studies were completed. Chair Burt believed Staff should approach the Santa Clara Valley Water District as soon as Staff determined additional funds would be needed to allow the Water District to plan for expenditures. He inquired whether Staff planned to use COPs only for the Golf Course Renovation Project. MINUTES Page 26 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Perez responded yes. Chair Burt asked if it would be less expensive to borrow from the Stanford University funds than to issue COPs. Mr. Perez felt that could be an option. Staff considered it from a short-term perspective to bridge the Project. That would tie up the principle for a few years. Chair Burt inquired whether the term of the COPs would be 20 years. Mr. Perez reported the term could be 20 or 25 years. Chair Burt asked if COPs could be issued five years after a project was completed. Joe Saccio, Assistant Director of ASD, stated COPs could be used to reimburse a past project; however, he was not sure of a time constraint. Staff would inquire with bond counsel about time constraints. Chair Burt suggested the slide regarding PCI scores should note the scores were a three-year rolling average. Mr. Eggleston indicated the scores on the slide were scores determined by Palo Alto, not a three-year average. Chair Burt wanted to communicate the improvements in streets to the community. He suggested Staff utilize a tool to show streets scheduled to be paved under the old Budget versus streets paved under the increased Budget. The community was not aware of the many repaved streets. Mr. Sartor reported Staff placed more information on the website, and were preparing a software application for the community to report pavement condition. Chair Burt inquired whether Staff could provide the impact of increased bike mode share in terms of money saved by eliminating the need for additional parking spaces. Mr. Rodriguez did not have that information. The transportation survey would provide the baseline data for transportation mode shift. One of the near-term parking improvements for the Downtown core was development of transportation demand management. Staff needed to develop a comprehensive program. MINUTES Page 27 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Chair Burt was interested in the avoided cost of constructing structured parking through increased bike mode share. The community needed to understand the cost benefit provided by increased biking for the whole community. One additional biker meant one additional open parking space. Concerning the Bicycle and Pedestrian Transportation Plan, he asked which projects would proceed if the $1.2 million remained in the CIP Budget and which projects would not proceed if the $1.2 million was removed. Mr. Rodriguez noted Staff committed to presenting the Council with an update report regarding implementation of the Bicycle and Pedestrian Transportation Plan. Staff would provide that update in late summer or early fall. Staff needed to know whether funds were available before committing to projects. Part of the upcoming CIP would target bicycle boulevard deployments. Signage for the bike boulevard was in; however, Staff was waiting for the Green Street Project to install the signs. The community stressed the safety needs for bike boulevards and lanes. Chair Burt asked what would be the result of removing the $1.2 million from the Capital Budget. Mr. Rodriguez reported projects contained in the CIP would proceed. The planning for all other projects would stop. Planning for community outreach and for larger projects would cease without those funds. Chair Burt asked if the $1.2 million was budgeted for construction. Mr. Rodriguez indicated it was budgeted for planning and design. Chair Burt wanted to understand the impact of removing the $1.2 million from the Budget. Mr. Perez suggested Chair Burt review the summary of all traffic and transportation projects on page 41. Chair Burt inquired about the impact on projects for the Bicycle and Pedestrian Transportation Plan if PL04010 was not funded. Mr. Rodriguez stated Staff could develop a list of projects they wanted to fund with the $1.2 million. Chair Burt explained that in FY 2014 some projects were being constructed and some projects were being designed. If the $1.2 million was removed from the Budget, then design in FY 2014 would cease and construction in MINUTES Page 28 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 future years would cease. If the issue was placed in the parking lot, then he requested Staff explain which projects would not be constructed in FY 2014 and in following years. Council Member Berman questioned whether the discussion was funding or funding source. If the Committee decided to fund the Bicycle and Pedestrian Transportation Plan, then the question was the funding source. Chair Burt had not heard about another funding source. Council Member Berman proposed that as part of the conversation. Mr. Perez recalled the City Manager suggested use of the Infrastructure Reserve as an option. Mr. Keene hoped the Committee was not moving away from funding for FY 2014 and subsequent years. Chair Burt wanted to understand the impact of not funding the Bicycle and Pedestrian Transportation Plan. Mr. Perez asked if the Committee had an assignment for Staff on the issue. Council Member Berman suggested placing the source of funds issue in the parking lot. Chair Burt agreed to place in the parking lot the issue of source of funds for the Bicycle and Pedestrian Transportation Plan. He inquired if there were additional changes or amendments for the Capital Budget. Council Member Berman clarified that the Committee could approve the $1.2 million allocation without indicating the funding source for the allocation. Mr. Perez requested that the Motion include the proposed amendments contained in the at-places memorandum. MOTION: Council Member Schmid moved, seconded by Council Member Berman to recommend the City Council approve the General Fund Capital Budget, include the CIP changes listed in at places memo on page 3. MOTION PASSED: 4-0 5. Adoption of Fiscal Year 2014 Proposed Municipal Fee Schedule MINUTES Page 29 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Christine Paras, Principal Financial Analyst, referenced the proposed changes to the Municipal Fee Schedule found in the at-places memorandum. Proposition 26 stated user fees must reflect costs incurred directly or indirectly to provide the service or activity for which the fee was charged. In addition, fees could not exceed estimated costs, but could be set below full cost recovery levels. The 2014 Municipal Fee Schedule did not contain a revenue adjustment. Actual revenues could be based on changes in utilization or volume. Council Member Schmid inquired whether the statement on packet page 16 regarding fees not including 9 percent sales tax meant sales tax was not charged or not shown. Lalo Perez, Chief Financial Officer, indicated the statement noted sales tax was in addition to the fee. Council Member Schmid asked if sales tax was charged on services. Mr. Perez responded no. Sales tax was not charged for services. Council Member Schmid referenced the range of fees for open space activities, and asked what $757 was charged for. Lam Do, Community Services Department Senior Management Analyst, reported some fees within the Community Services Department (CSD) had a range of fees whether for classes or special use permits. The $757 amount was charged for a special use permit. The amount of the fee assessed was based on the type of permit. Council Member Schmid asked if the $1,100 emergency response fee on pages 48 and 52 was charged for a fire truck responding to a call. Chair Burt indicated that particular emergency response fee was charged for a hazardous materials incident. Mr. Perez would provide a response the following week. Chair Burt stated the fee was labeled as a hazardous materials fee. Mr. Perez reported the City did not charge for a fire engine to respond to a fire incident. The City charged for transporting people in an ambulance to a hospital. Council Member Schmid inquired whether the parking fees found on page 78 MINUTES Page 30 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 were included the proposed revisions. Mr. Perez answered yes. Staff collaborated with the Downtown and California Avenue working groups regarding improvements for both areas. Council Member Schmid asked if the City was performing a study on development impact fees to determine whether the correct amounts were assessed. Mr. Perez replied yes. On June 18, 2013, Staff would present the Council with a list of projects, and the consultant would explain the method for calculating fees. Council Member Schmid inquired whether the Council would have time to make revisions to the fees prior to adoption of the Budget. Mr. Perez indicated Staff could revise fees after adoption of the Budget if the Council directed Staff to do so. Council Member Schmid stated the development impact fees listed were not revised to include recommendations from the study. Mr. Perez noted that timing issues could affect notification. Vice Mayor Shepherd inquired whether the Alma Plaza Community Room was being used. Greg Betts, Director of Community Services Department, reported that CSD Staff used the room once, and the public used it twice. Staff was not allowed to use the space until after the holidays so as not to impact Miki's Market. Other restrictions concerned setting up the room and providing keys; however, Staff hoped to proceed with use of the room in the next few months. Chair Burt asked if Staff planned to notify non-profit agencies that the space was available for use on a routine basis. Mr. Betts responded yes. The main challenge for the space was the limited number of parking spaces. Staff encouraged carpooling for those using the room. Vice Mayor Shepherd asked how many parking spaces were available. Mr. Betts did not know the exact number, but believed 10-12 spaces were MINUTES Page 31 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 available including underground spaces. The development did not have adequate parking for the Community Room and commercial businesses. Vice Mayor Shepherd inquired about the changed amount of –$3,000 on page 98. Mr. Perez reported the amount was a typographical error. Chair Burt asked about the purpose of additional capital funds for the Parking Districts. He related a story of a business that bought parking permits, but had not received them after two years. Mr. Perez indicated pages 3 and 5 of the at-places memorandum provided a description of the project in terms of the planning of the work. Mr. Perez requested the Finance Committee include in its Motion the proposed revisions from the at-places memorandum. MOTION: Council Member Berman moved, seconded by Council Member Schmid to recommend the City Council approve the 2014 Municipal Fee Schedule to include the changes on the at places memo, page one and page two. MOTION PASSED: 4-0 6. Public Works Department Budget a. General Fund (Operating pp. 233-244) b. Storm Drain (Operating pp. 252-258; Capital pp. 349-360) c. Refuse (Operating pp. 245-251) d. Wastewater Treatment (Operating pp. 259-264; pp. 333-345) e. Airport (Operating pp. 265-267) F. Vehicle Replacement (Operating pp. 268-272; Capital pp. 367-371) Christine Paras, Principal Financial Analyst, reported a net total increase of 2 Full Time Equivalents (FTE); 1 FTE for a Project Engineer allocated to the Capital Projects Fund, and 1 FTE for a Project Manager allocated to the General Fund, Capital Project Fund, Refuse Fund, and Storm Drain Fund. The subtotal for Non-Capital Funds for the Public Works Department decreased by 3.82 FTEs. The Capital Fund increased by 1.46 FTEs, resulting in a net decrease of 2.36 FTEs. Staffing changes resulted in reallocation of 5.26 FTEs to the Parking District Funds. Within the General Fund Budget, revenue increased by $143,824, and net expenses decreased by $82,291. She reviewed proposed amendments contained in the at-places MINUTES Page 32 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 memorandum. Nancy Clark, Storm Drain Oversight Committee Chair, stated the Storm Drain Oversight Committee reviewed the Budget for the Storm Drain Fund, and determined it met the mandate of the voters. Council Member Berman inquired about the $17,000 discrepancy between total expenditures in the department summary and the total expenditures in the General Fund table. Lalo Perez, Chief Financial Officer, would review the amounts and follow-up. Ms. Paras reported the Storm Drain Fund revenue increased $147,512, due to increased plan check fees and increased residential sales. Expenses decreased $0.3 million, due to the increase in utility charges. The total of the Capital Improvement Program (CIP) for Fiscal Year (FY) 2014 was $3.3 million. Council Member Schmid was pleased the Storm Drain Fund overcame the expenses of the first few years and completed projects. Council Member Berman noted five projects were indicated under the Proposed FY 2014 column of Performance Measure 3, while the discussion indicated four projects. Joe Teresi, Senior Engineer, stated at the end of FY 2014 five projects would be complete. Ms. Paras reported Refuse Fund revenue decreased $0.9 million due to decreased transfers from the Parking Fund. Expenses increased $143,449 due to decreased transfers. Council Member Berman asked if Staff reduced the goal for Performance Measure 2 in FY 2014, because the goal for FY 2013 was not attained. Mike Sartor, Director of Public Works, answered yes. Council Member Berman inquired about the use of an average amount rather than actual amounts for surrounding cities in the discussion of Performance Measure 2. Mr. Sartor believed the point of the discussion was that the disposal rate for other cities was greater on average than Palo Alto's disposal rate. MINUTES Page 33 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Council Member Berman questioned whether one city had a much higher average disposal rate, such that it increased the average for all cities. Mr. Sartor did not have that information. Revenue changes exceeded expense changes for FY 2014. Overall, expenditures were $1 million less than planned revenues; therefore, Staff did not anticipate increasing revenue rates during FY 2014. Chair Burt asked why the goal for Performance Measure 2 in FY 2014 was raised. Mr. Sartor suggested residents were buying more and placing more into garbage as the economy improved. The diversion rate for FY 2011 was approximately 80 percent, and the diversion rate decreased to approximately 78 percent in FY 2012. Chair Burt inquired whether the disposal rate was calculated on garbage placed in the black bin or the black bin plus residuals from the recycling bin. Ron Arp, Solid Waste Manager, reported the disposal rate was calculated based on the amount sent to disposal. From the black bin, 17 percent of waste was removed as recyclable. Chair Burt reiterated that a portion of black bin waste was removed as recyclable, and asked if a portion of the recyclable bin was actually sent to disposal. Mr. Arp responded yes. Chair Burt inquired whether sorting procedures or reporting methodology changed to account for the increased amount of waste. Mr. Arp confirmed the same trend in other communities. Council Member Schmid congratulated the Refuse Fund for reducing the number of employees and transitioning the landfill to parkland. He inquired whether the increase in GreenWaste fees reflected the increased amount of garbage. Mr. Arp reported the amount of the increase was based partially on four indices, all of which supported an increase in fees. The remaining portion of the increased fees was based on the increase in economic activity. Council Member Schmid suggested residents were more aware of services MINUTES Page 34 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 being offered. Ms. Paras reported the Wastewater Treatment Fund revenue increase totaled $255,696, primarily due to revenue from partners. Wastewater treatment sales increased because of the 2.2 percent Consumer Price Index (CPI) increase. Expenses increased by $519,000 as a result of the increase for CIP. Total FY 2014 expenditures for Capital Projects were $2.9 million. Council Member Schmid inquired about the necessity for smaller capital improvements when the water treatment plant was undergoing major renovations. Mr. Sartor indicated the updating of the water treatment plant was a 20-year plan, and the Capital Budget reflected the first five years of renovations. James Allen, WQC Plant Manager, explained $2.9 million of ongoing CIP expense was needed for regular capital replacement of smaller cost items. Smaller replacement projects would always be needed. Council Member Schmid stated the smaller projects would fit into the new water treatment plant. Mr. Allen reported partners agreed to ongoing minor CIP projects, and approved major capital improvement projects. Staff envisioned obtaining a state loan or a water revenue bond to pay for replacement of incinerators and major structures. Council Member Schmid asked if partners annually bought into capital expenditures. Mr. Allen responded yes. Andrew Swanson, Airport Manager, looked forward to working with the Council. Ms. Paras reported the Airport Fund revenues increased $15,000, reflecting the General Fund loan. Expenses increased $78,074, primarily due to the one-time transition support cost of $75,000. Council Member Schmid recalled a Santa Clara County (County) Commissioner did not want to invest long-term in the Airport, because the ground was unstable. He asked if Staff considered that as the transition proceeded. MINUTES Page 35 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Sartor replied yes. In a tour of the facility, he noticed many deferred maintenance items, and would discuss those items with the County. The Business Plan and Study clearly showed that the Airport could be a functional, revenue-generating operation. Council Member Schmid expressed concern about the amount of capital investments for the Airport. Mr. Sartor reported once the City officially took possession of the Airport, the City would be in line for annual entitlement grant funding for improvements. In addition, the Federal Aviation Administration (FAA) offered grants for major infrastructure work. Chair Burt requested the anticipated date for the City taking possession of the Airport. Mr. Sartor hoped to take possession by the end of the calendar year, but realistically approval of legal documents would require a year. Ms. Paras reported the Vehicle Replacement Fund revenue decreased $135,000, primarily due to a decrease in replacement allocated charges. Staff reviewed the inventory of equipment and vehicles, and adjusted the allocated charge to reflect inventory. The department conducted an operational and organizational study in FY 2013. Expenses increased approximately $2 million. Capital improvement projects increased $1.8 million. Total expenditures for the Capital Fund were $3 million. Council Member Schmid recalled that the City Auditor performed an audit of the vehicle fleet, and inquired whether the City Auditor reviewed the Budget and determined it was in compliance. Mr. Sartor stated the City Auditor recommended establishing a fleet review committee, which reviewed the proposed expenditures for FY 2014 in accordance with the vehicle replacement audit. Mr. Perez explained that the City Auditor reported through the Policy and Services Committee. As Staff implemented audit recommendations, the Council would see them through the Policy and Services Committee. Council Member Schmid asked when the City Auditor would update the Policy and Services Committee. Mr. Perez was unsure of the exact timeframe, but thought the City Auditor reported in the fall. MINUTES Page 36 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Council Member Schmid felt the City Auditor should have some comment. Mr. Perez noted that the Public Works Department reviewed the fleet, and issued a Request for Proposal (RFP) regarding leasing vehicles. Staff was making progress towards the recommendations. Once the process was complete, Staff anticipated returning to a Budget for purchasing equipment rather than seeking Council approval for each purchase. Council Member Schmid inquired about the results of the RFP regarding leasing vehicles. Mr. Sartor reported Staff continued to review leasing of vehicles as part of the operational study. The pieces of equipment budgeted in the Capital Program included six Police patrol vehicles and a Fire ladder truck. Staff would present results of the operational study, leasing options, and a potential increase of the alternative fuel portfolio to the Council. Council Member Schmid requested a possible date for presentation of the operational study results. Mr. Sartor anticipated presenting recommendations to the Committee after July 2013. Chair Burt inquired whether any of the vehicles proposed for purchase utilized natural gas. Mr. Sartor indicated the Police vehicles and Fire ladder truck did not utilize natural gas. Staff recently replaced 17 Honda Civics. The study would compare electric vehicles with natural gas vehicles. Chair Burt asked if Police cars operated on natural gas. Mr. Sartor explained that natural gas tanks occupied half the trunk space in a Police patrol car. MOTION: Council Member Schmid moved, seconded by Council Member Berman to recommend the City Council approve the Public Works Department budget, including the changes listed on pages 2-3 of the at places memo. MOTION PASSED: 4-0 MINUTES Page 37 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mr. Perez requested discussion of the Stanford Development Agreement Fund relative to CIP funding be moved to May 23, 2013. Chair Burt agreed to reschedule the discussion. He noted Staff requested discussion of the Non-Departmental Budget be postponed to May 23, 2013 as well. 7. Special Revenue Funds, including Parking District and Stanford Development Agreement Fund (Operating pp. 63-72). Christine Paras, Principal Financial Analyst, referenced the proposed amendments to the University Avenue Parking Permit Fund. The Proposed Budget included a decrease of $91,000 for resurfacing and an increase of $175,000 for Cowper-Webster improvements. Staff projected the Fund balance to be $471,000 at the end of the fiscal year. Staff planned to implement parking guidance system technology over the life of the project. A proposed fee increase would fund improvements in the California Avenue Capital Improvement Program (CIP). In the Stanford University Medical Center Fund, Staff projected the amount of interest earned in Fiscal Year (FY) 2014 would be $679,000. The fund included $1.2 million for bicycle and pedestrian transportation plans, and an increase of $260,000 for Project Safety Net. Additional funding would be carried forward from FY 2013. Lalo Perez, Chief Financial Officer, requested the Finance Committee (Committee) focus on funding for Project Safety Net. The total Budget for Project Safety Net was $260,000, an increase of approximately $32,000 over funding in FY 2013. The Budget included funding for one administrative support position. Vice Mayor Shepherd asked if there was a method for determining the impact of Project Safety Net on youth. Lam Do, Community Services Department Senior Management Analyst, would provide information on or before May 23, 2013. Council Member Schmid inquired about the Staff positions being transferred from the Refuse Fund to the Parking Funds. Mr. Perez indicated on page 69 under the category expenditures, positions totaled 1.57 Full Time Equivalents (FTE) for administration and 4.53 FTEs for maintenance. Council Member Schmid stated those amounts were smaller than in FY 2013; yet, four Staff transferred from the Refuse Fund. MINUTES Page 38 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 Mike Sartor, Director of Public Works, reported two street maintenance assistants and a street sweeper operator transferred from the Public Works Department's General Fund. Council Member Schmid asked if those positions transferred to the Parking Funds. Chair Burt stated the Budget did not show that the positions were added. Mr. Perez explained that the Parking Fund reflected the FTEs, even though the FTEs were not allocated to the Parking Fund. Staff would include a footnote explanation. Council Member Schmid inquired whether the 4.74 FTEs shown under FY 2013 were actually just positions used by the Parking Fund but not actually employees, and now they were employees. Mr. Perez answered yes. Council Member Schmid asked if Parking Fund revenues paid for the FTEs in the past and would pay for them in the future. Mr. Perez replied yes. The Parking Fund paid through a transfer. MOTION: Council Member Berman moved, seconded by Vice Mayor Shepherd to recommend the City Council approve Special Revenue Funds and Parking District Funds. MOTION PASSED: 4-0 8. Non-Departmental Budget (Operating pp. 318-320). Chair Burt reported this Agenda Item was continued to May 23, 2013. Future Meetings and Agendas Lalo Perez, Chief Financial Officer, announced the next meeting regarding the Fiscal Year (FY) 2014 Proposed Budget was scheduled for May 23, 2013, beginning at 6:00 P.M. Agenda Items included the Non-Departmental Budget, the Capital Improvement Program related to the Stanford Development Agreement Fund, any outstanding informational items, and the Management Compensation Study. The Budget surplus reached $177,000 MINUTES Page 39 of 39 Finance Committee Regular/Special Meeting Final Minutes 5/16/2013 after changes approved during the meeting. Staff anticipated a few minor changes for discussion on May 23, 2013. ADJOURNMENT: Meeting adjourned at 9:51 P.M. APPENDIX 4 FINANCE COMMITTEE MINUTES Page 1 of 26 Finance Committee Special Meeting Working Minutes 5/23/13 Special Meeting May 23, 2013 The Finance Committee met on this date in the Council Conference Room at 6:07 P.M. Present: Berman, Burt (Chair), Schmid, Shepherd Absent: ORAL COMMUNICATIONS None AGENDA ITEMS 1. Stanford Development Agreement Fund (Operating pp 63-72) Lalo Perez, Director of Administrative Services Department, announced a Budget surplus of $177,000. Staff provided recommendations for further action. Christine Paras, Principal Financial Analyst, reported the wrap-up memorandum discussed outstanding issues from prior Budget meetings. The first item contained in the memorandum was tentative approval of the Non-Departmental Budget, Agenda Item Number 2. The second item was an amendment to the Proposed Budget for Debt Service Funds. Staff was working on a sale of the second series of Measure N General Obligation (GO) Bonds, which would occur in June 2013. The City would have an annual debt service totaling $563,703 offset by assessed property tax. The third item was discussion of whether use of Stanford Development Agreement Funds or other funds should fund the Bicycle and Pedestrian Transportation Plan (Plan). For the Internal Service Funds, Staff presented the Employee Benefit Funds on May 7, 2013, which included the retiree medical internal service fund. The memorandum contained additional information requested by the Finance Committee (Committee), a list of parking lot items, a discussion of proposed adjustments, current balances of the General Fund, and proposed Motions. Attachment A to the memorandum was Staff's MINUTES Page 2 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 response and additional information regarding the City Council meal expense. Attachment B provided updated Library Department key performance measures. During the Utility Department Budget and Water Fund discussions, the Committee noted clerical errors in the summary. Staff provided corrected pages in Attachment C. In addition, the Committee requested the change for the $7,000 proposed increase to allocated charges in the Water Fund. Also at places was additional information pertaining to the Fiscal Year (FY) 2014 Budget. For the Community Services Department (CSD), Staff proposed reclassifying CSD Manager to Senior Program Manager and Division Manager Recreation and Golf to Assistant Director of CSD. These reclassifications aligned current job duties with updated job descriptions. The Committee requested information regarding measures and metrics to determine the effectiveness and impacts of Project Safety Net on the community. CSD provided its response in Attachment A. The Police Department provided a response for the School Resource Officer (SRO) and Police Department overtime in Attachment B. The Committee inquired whether Stanford Development Agreement funds could be used to fund the Golf Course Reconfiguration Project. Staff outlined their research results in the memorandum. The Committee requested additional information regarding hotel stays and occupancy, and that information was contained on page 2 of the memorandum. Staff provided an update on One Bay Area Grant (OBAG) proposals. Vice Mayor Shepherd understood the Committee discussion was to include OBAG proposals in the Capital Improvement Program (CIP) Budget. The Charleston-Arastradero Road Corridor Project was not included in the Proposed Budget. James Keene, City Manager, indicated all grant requests were included; however, they were not programmed in the CIP Budget. Vice Mayor Shepherd suggested a page for each project be included in the CIP Budget so that the public would know the Council was attempting to find funding for the projects. The funding could be categorized as other revenue rather than CIP revenue. Mr. Perez reported Staff could create a page for each project describing the project and indicating that funding was not secure and grant opportunities were available. A second option would be to create a new section outlining projects for which the City applied for grants and describing the projects. He was concerned that including a complete program page would give the impression that the City would potentially proceed with the project. Having a separate section would give the clear impression that the City would only proceed with a project once funds were available. MINUTES Page 3 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Vice Mayor Shepherd wished to be consistent with the Council direction to Staff to apply for grants, and to make the public aware of projects for which the City was seeking funding even though there was not a plan to proceed. Mr. Keene stated Staff could prepare a project area for grants in the Budget. If the City received funds for a project, then Staff could advance the project to the CIP Budget. Including a project area would demonstrate the Council's intention to invest in important projects. Chair Burt recalled that the second area of capital projects for inclusion in the Budget were capital projects that benefitted Palo Alto but were funded through other agencies. Mr. Keene believed the concept was to demonstrate the Council's capital investment strategy in all things that benefitted the City. Vice Mayor Shepherd wanted to demonstrate the bundle of projects the Council identified. Council Member Schmid believed the CIP Budget should indicate the projects in which the community was interested, even if funding was provided by outside sources. Often external funding sources were more interested in projects if the City prepared the design work or leveraged funds. Mr. Perez noted Staff sometimes did not have information or knowledge of projects, but they would do the best they could with the information they had. Staff also committed to detail any projects that were defunded. The Committee placed in the parking lot discussion of whether Stanford Development Agreement funds could be used to fund the Plan CIP starting in FY 2014 for five years for a total of $6 million. The Infrastructure Reserve Fund had sufficient funds to accommodate $1.2 million for FY 2014, pending a Council resolution of use of Stanford Development Agreement funds. Mr. Keene believed the Committee should fund the Plan and show the multi- year aspect of the Plan. Having a plan and setting aside funds allowed momentum to build. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman that the Finance Committee recommend the City Council to postpone applying Stanford dollars until the full Council had concluded how to utilize the Stanford Development Agreement Funds and to fund the Bicycle and Pedestrian Transportation Plan and Implementation Project with Infrastructure Reserve Funds (IR). MINUTES Page 4 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Vice Mayor Shepherd expressed concerns about using Stanford Development Agreement funds without having a full Council discussion. Council Member Berman preferred to wait for a Council resolution regarding use of Stanford Development Agreement funds, especially since the Council determined a process for allocating those funds. Chair Burt inquired about a possible date for the Policy and Services Committee to review use of Stanford Development Agreement funds. Mr. Perez reported the item was included on the tentative Agenda for June 24, 2013. Chair Burt presumed the topic would be presented to the Council after the break. Mr. Perez assumed the Policy and Services Committee would make a recommendation to the Council. MOTION PASSED: 4-0 2. Non–Departmental Budget (Operating pp.318-320) Christine Paras, Principal Financial Analyst, reported revenue decreased by $0.9 million as a result of removing Fiscal Year (FY) 2013 placeholders for Development Center revenue and Cost of Service Study estimated revenues. Both placeholders totaled approximately $0.4 million. Expenses increased by $2.2 million, primarily due to an increase in salaries and benefits of $2.1 million. Other items contained in the Non-Departmental Budget were the Cubberley lease payment, the Golf Course lease-purchase agreement payment, the Palo Alto Animal Services placeholder, and $40,000 in consultant costs for grant applications. Transfers from the General Fund decreased $0.8 million because of refunding the Golf Course debt and a decrease in transfers to the Technology Fund for technology projects. Lalo Perez, Director of Administrative Services Department, noted that the first line item in the amount of $310,000 concerned the Management Compensation Study. The anticipated impact amount was carried over from FY 2013 to FY 2014, assuming the Finance Committee (Committee) approved the Study. If the Committee did not approve the Study, then the $310,000 would be removed from the Budget. Performance based increases beyond the midpoint in the new compensation process for management had a budget of $225,000. As a result of changing the budgeting process to MINUTES Page 5 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 actual pay, Staff set aside the funds for step increases in pay. Movement through the step process for employees was represented by the $571,000 amount. Included in the $571,000 were pay increases as a management employee moved toward the midpoint, if he was hired below the midpoint and if he performed satisfactorily. A 2 percent increase for miscellaneous laborers in management and Service Employees International Union (SEIU) was a placeholder pending funding approval. Funding the contingency did not obligate the City to provide the increase. If the Committee did not approve any increases, then the funds would return to the Reserve Fund. If the Committee approved the increases, then the funding was available in the FY 2014 Budget. Staff strongly urged the Committee not to accept the two- year phase-in for the last 1/4 percent decrease of the rate of return assumption provided by the California Public Employees' Retirement System (CalPERS). Given the improved financial position, the City could absorb the non-smoothing amount. The General Fund share was approximately $1 million, and the other Funds would cover their respective shares. Placeholders in the FY 2013 Budget for Public Safety concessions, attrition savings, and allocation of benefits resulted in a net decrease of $180,000. When proposing the FY 2013 Budget, Staff placed additional funds for benefits in the Non-Departmental Budget, because they did not have time to spread the amounts to the various departments. After accounting for the attrition savings, the net impact was approximately $300,000. James Keene, City Manager, reported the decision not to smooth would cost the City money in FY 2014. The 2 percent was a placeholder. Everything else was identified in the Budget. The City always included those amounts in its Budget. Because Staff budgeted actual salaries, they wanted to express the amount of money that could pay for other expenditures. None of this was a departure from standard practice; simply a different method for reporting it. Chair Burt inquired whether the total impact of the 1/4 percent discount rate decrease was $2 million. Mr. Perez responded no. The total impact was $1 million; roughly $400,000 was in other Funds, primarily in Utilities. Chair Burt asked if half the amount was attributable to the election not to smooth, because the City would have to pay half in FY 2014 if it did smooth. Mr. Perez stated embedded in the City's rate was one year, because it was smoothed over two years. Staff added the additional $1 million for the second year. MINUTES Page 6 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Chair Burt inquired whether the total impact of the discount rate change was $2 million. Mr. Perez answered yes. Council Member Schmid requested an explanation of attrition. Mr. Perez explained that attrition meant vacant positions. The number of vacant positions varied from year to year. The City would continue to have vacant positions because that was normal. Staff offset costs by the non- expenditure for those vacancies. Council Member Schmid suggested the word attrition was not accurate. Mr. Keene believed salary savings or salary lapse would be more accurate. Once employees left the City, four to five months were often required to replace them. Because of that process, the $2 million amount included four to five months of salary. Chair Burt inquired if it was salary savings from vacancies. Mr. Keene replied yes. Council Member Schmid referenced the Service Efforts and Accomplishments (SEA) Report regarding the number of vacant positions totaling approximately 10 percent of Staff. He inquired whether staffing positions were up to 10 percent higher than the number of people actually working for the City at any point in time. Mr. Perez reported 10 percent was probably accurate for one year, because the percentage typically varied. Over the prior three years, Staff deliberately carried vacancies in order to balance the Budget. Council Member Schmid asked if there was a public document that accurately reported the number of people working for the City. Mr. Perez was unsure if Staff reported the actual number of employees outside the SEA Report. Staff could provide that information and add it to the Proposed Budget. Council Member Schmid inquired whether the dollar amount for salaries and benefits was based upon staffing reported in the Operating Budget or based upon the actual number of people working. MINUTES Page 7 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Perez indicated it was based on the number of positions approved. If the Committee approved 1,018 positions, then Staff calculated the salary amount for 118 positions. Council Member Schmid asked if the Committee's approval of the Budget also approved a maximum number of Staff. Mr. Keene answered yes. Council Member Schmid believed that provided the City Manager and operating officers the flexibility to fill positions. Mr. Keene reported Staff budgeted salaries based on the number of filled positions and the associated salaries. He asked which step Staff used to calculate salaries for vacant positions. Mr. Perez stated the top step. Mr. Keene indicated the $2 million in vacancy savings was designed to partially cover the four to five months required to fill a vacant position. The vacancy savings was an attempt to reduce salary appropriations so that the Budget was not overfunded. Council Member Schmid noted the City Auditor stated 10 percent of positions were vacant. He asked if the Committee's approval of the Budget indicated an expectation of a 5-10 percent difference between the amount budgeted for salary and benefits and the amount actually spent for salary and benefits. Mr. Perez explained that Staff did not budget 100 percent of Full Time Equivalents (FTE) for benefits. Using demographics and trends, Staff budgeted benefits closer to the actual number of positions filled. Staff also budgeted for the exact medical plan that employees chose. While the money was included in the Budget, it was not extra money. Most of the time a vacant position was filled with a temporary position. Council Member Schmid stated flexibility was an important element. Page 26 of the Operating Budget contained a table indicating the costs and average salary and benefits by class of employee; however, the number was based upon the maximum number of employees. If some vacant positions were filled with temporary employees, then the temporary employees did not fit into the table very well. MINUTES Page 8 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Perez reported actual expense versus budgeted expense was always the discussion in labor negotiations. Staff attempted to represent the full expense for a position while acknowledging some vacancies would occur. Council Member Schmid felt the 5-10 percent variation was essential for flexibility; however, it created an incentive to spend the funds on a variety of items that did not show up in the detailed budget. Mr. Perez reported budget controls removed the incentive. An internal committee reviewed requests to transfer funds from regular to temporary salaries. Mr. Keene stated departments were not allowed to transfer money from salary savings into operations. Council Member Schmid inquired whether a vacancy rate of 5-10 percent at the end of the year would result in a net surplus of 5-10 percent in salaries. Mr. Keene explained that was one of the reasons Staff usually increased the surplus at the end of the year. Mr. Perez agreed that end of year savings typically resulted from salary. All of that money at the end of the year netted back to Reserves. Mr. Keene did not want to report a deficit at the end of the year. Ms. Paras reported Staff proposed a decrease in the City Attorney Contingency Account of $50,000 based on trends in usage. An Innovation Contingency Account was used to fund the Virtual Library Project in FY 2014. While the line item decreased, Staff actually transferred that decrease to fund the Project. Chair Burt asked if the amount of the Contingency Account decrease was transferred to a line item in the Budget. Ms. Paras replied yes. Mr. Keene expected a balance would remain in the Innovation Contingency Account at the end of FY 2013, and would potentially carry forward to FY 2014. Chair Burt did not believe the City had a consistent policy regarding unspent amounts in contingency accounts. MINUTES Page 9 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Perez reported Staff's practice was not to rollover unspent amounts unless there was a specific Staff or Council request. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman that the Finance Committee recommend the City Council tentatively approve the Non-Departmental Budget, and to include Staff's proposed amendment to transfer $152,882 to the University Avenue Parking Permit Fund. Council Member Schmid noted four different levels of pay increase that any single individual could receive. He inquired whether the 7 percent increase for salaries and benefits was a correct aggregation. Mr. Perez asked if Council Member Schmid was adding the dollars or referring to the total budget. Council Member Schmid wanted to determine the percentage of increase for salary and benefits including all forms of compensation. Mr. Perez reported salaries and benefits increased 6 percent, as shown in the summary table on page 37. Two changes were the 2 percent increase and the $602,000 amount for non-smoothing. The other numbers were a representation of the new methodology of compensation. Council Member Schmid indicated expenses including salaries and benefits were growing at 6 percent and total funding sources were growing at 5 percent. Mr. Perez agreed. That included the operating transfers in, with total revenues increasing by 7 percent. Council Member Schmid inquired whether revenues were a better measure of available funds. Mr. Perez explained that it was better not to use the total source of funds, because Staff moved expenses for the University Avenue Parking District and the California Avenue Parking District. The transfer of expenses distorted the numbers in FY 2014. The equity transfer decreased significantly as well. Council Member Schmid asked if the items on page 5 were all recurring. MINUTES Page 10 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Perez reported the $602,000 amount would help the budget in the long run by some factor, because the City was prepaying some of its obligation earlier. Otherwise, he agreed with Council Member Schmid's comment. Council Member Schmid inquired whether the merit increases were built into the salary base. Mr. Perez responded yes. Chair Burt recalled that 75 percent of revenue from the commercial part of the Bryant Street Garage would be used to fund special teen events, and requested Staff comment. Joe Saccio, Assistant Director of Administrative Services, reported that it had taken some time for the rent to pay the debt service. He understood that when the garage turned a profit, then 75 percent of the profit would be used for teen activities. Perhaps a year had passed since the rent exceeded the actual debt service payment. Chair Burt was not sure it was written that way. Mr. Saccio would review the issue. Chair Burt believed 75 percent of the gross of the rent amount was to be used for teen activities. Mr. Saccio explained that taking 75 percent of the gross would not leave sufficient funds to pay the debt service. He suggested the amount was meant to be the net amount after debt service to construct the building was paid. Mr. Perez noted the City had to meet the bond covenants, because the bond covenants or debt service had first priority. Staff would review it and provide more information. Chair Burt inquired whether those funds, if available, could be included in the FY 2014 Proposed Budget. Mr. Perez stated if the policy was unchanged, then the funds could be included in the Budget. MOTION PASSED: 4-0 MINUTES Page 11 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 3. Wrap Up Discussion of Outstanding Issues from Prior Budget Hearing Meetings Christine Paras, Principal Financial Analyst, reported that Staff proposed an additional $76,610 for the Community Services Department (CSD) Budget for contract costs for the Baylands-California Land Management Contract; and an additional $0.5 million for the Debt Service Funds for the second series of the General Obligation (GO) Bonds. Information regarding Police Department overtime and staffing data and Council meal expense was included in the at-places memorandum. Staff proposed a decrease in the amount for Council meals in Fiscal Year (FY) 2014. Hotel weekend occupancy rates and School Resource Officer (SRO) information were included in the at-places memorandum. Staff would provide a new title for the 27 University Avenue Project. The original amount of the Budget surplus was $220,000. Over the course of the Budget hearings, the Finance Committee (Committee) made changes, resulting in a surplus of $176,000. If the Committee adopted the tentative changes in the at-places memorandum, the surplus would be $114,000. Lalo Perez, Director of Administrative Services, reviewed options for funding a second SRO. The City Manager held preliminary discussions with the Superintendant of the Palo Alto Unified School District (PAUSD) regarding funding 50 percent of the costs of a second SRO position; however, no decision was reached. The Committee could add a placeholder for half of the costs, assuming PAUSD funded the remaining half. The surplus of $114,000 was sufficient to fund half the costs of a second SRO position. Staff could place funds in the Non-Departmental Budget and add the position as a placeholder. The Committee could reduce Police overtime, and use those funds to pay for the SRO position. Staff did not recommend that option. Assuming PAUSD funded half the costs, the Committee could move one unfrozen Police position to an SRO. The Committee could add the position with PAUSD funding, and draw from Reserves or Stanford Development Agreement funds. Staff was reappraising City real property and reassessing rents, which could provide additional revenue to the General Fund. Those funds were a potential source for funding a second SRO position. James Keene, City Manager, recommended adding a second SRO position with PAUSD paying 50 percent of the added costs. If the Committee did not want to fund a second SRO position, then at least half of an existing Police position could be used for an SRO. He did recommend a 50 percent funding mechanism. Chair Burt inquired about the possibility of adding summer concerts. MINUTES Page 12 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Rhyena Halpern, Assistant Director of Community Services, explained that every weekend was booked with activities; therefore, Staff could not add concerts in 2013. Chair Burt asked if additional concerts could be planned for 2014. Ms. Halpern answered yes. Vice Mayor Shepherd felt a second SRO position was critical for both high school campuses. Fred Balin questioned whether the new ladder truck in the Fire Department Budget would provide the same services as the rescue vehicle, and whether it would be cross-staffed. Emergency Medical Services (EMS) was being expanded with a third, older vehicle. Cross-staffing Fire trucks reduced the number of inspections the Fire Department could perform. The proposed changes should be reviewed carefully. MOTION: Vice Mayor Shepherd moved that the Finance Committee recommend the City Council include the School Resource Office (SRO) by one position into the budget wrap-up adjustment into the General Fund with the Staff requesting the Palo Alto Unified School District (PAUSD) fund half. Mr. Keene agreed with adding an additional SRO, as long as PAUSD paid half the costs. Vice Mayor Shepherd requested Staff return to the Council if PAUSD did not agree to fund half the costs. She hoped PAUSD would prioritize a second SRO. Mr. Keene would ensure PAUSD understood the need. Vice Mayor Shepherd also wanted the position to be stable over time with reliable funding. Council Member Berman inquired whether the Motion concerned only the SRO. Vice Mayor Shepherd reiterated that the Motion was to include half the costs of an additional SRO position into the Budget wrap-up adjustments to the General Fund. Chair Burt felt Vice Mayor Shepherd's comments conflicted with her stated Motion. MINUTES Page 13 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Vice Mayor Shepherd clarified that the Motion was to include half the cost of an SRO in the Budget wrap-up adjustments. Mr. Perez suggested the intent was to add a full SRO position with the net costs being half a position. Vice Mayor Shepherd agreed. Mr. Perez inquired whether the funding source for the SRO position was the General Fund surplus. Vice Mayor Shepherd replied yes. Mr. Keene asked if Staff should pursue half the funding for the position from PAUSD. Vice Mayor Shepherd indicated that was part of her Motion. If PAUSD did not agreed to fund half the position, then Staff was to return to the Council for further action. Council Member Berman inquired about the process for Staff presenting information to the Council on the issue if the Committee decided not to take action at the current time. Mr. Keene reported Staff could present information to the Council at any point in time. If the Committee directed Staff to proceed expeditiously, then Staff would obtain information as quickly as possible. MOTION FAILED DUE TO LACK OF A SECOND Chair Burt expressed concern regarding the Motion's implication that the Council would fund the full costs of a second SRO if PAUSD did not agree to do so. He would support a Motion to add a second SRO position contingent upon PAUSD funding half the costs. Vice Mayor Shepherd did not want the discussion to end without further Council consideration, should PAUSD not agree to fund half the costs. Chair Burt would support a Motion that did not require the City to fund all costs of a second SRO position. MOTION: Vice Mayor Shepherd moved, seconded by Chair Burt that the Finance Committee recommend the City Council increase the General Fund MINUTES Page 14 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 budget wrap-up by one School Resource Office (SRO) position contingent upon the Palo Alto Unified School District (PAUSD) funding half of the position. Vice Mayor Shepherd hoped funding would remain consistent. Chair Burt felt an additional SRO position was important as the school population increased, but PAUSD had to fund half the costs of the position. Council Member Berman supported the Motion. He preferred to know PAUSD's position before acting on the Motion, but that was not possible. Council Member Schmid was impressed with the Police Department response regarding overtime. He suggested an officer at the middle schools could have an impact on children at an impressionable age. He would like an ongoing discussion with the Police Department regarding placement of an extra officer in the community for maximum impact. MOTION PASSED: 4-0 Chair Burt requested Staff respond to concerns raised by Mr. Balin. Mr. Keene indicated the Fire Department was funded from the General Fund; therefore, Fire Department revenues were used to fund the Fire Department. Catherine Capriles, Deputy Fire Chief, reported the Command Staff decided to remove the rescue unit from service in order to provide flexibility in operational deployment. The response level of the rescue unit was far less than most equipment, and most of the capabilities of the rescue unit could be taken over by an engine company or truck or other personnel. The rescue unit was removed from service, but the function remained in service. Personnel with certifications in hazardous materials response remained available. First due engine companies continued to carry small first responder hazardous materials kits in order to take immediate action. Chair Burt inquired whether the existing rescue vehicle would remain in service until the new ladder truck was put in service. Ms. Capriles stated the Fire Department's intention was to take the rescue unit out of service in July 2013. Chair Burt asked how services would be provided between removal of the rescue unit and implementation of the new ladder truck. MINUTES Page 15 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Ms. Capriles explained that the existing ladder truck would respond. In addition, a trailer containing hazardous materials equipment could be transported to a scene. Ms. Paras reminded the Committee that Staff proposed an additional $76,610 for the Non-Departmental Budget; an additional $76,610 for the Baylands-California Land Management Contract; a decrease of $15,000 for the City Council Budget; an additional $563,703 in annual debt service; and reclassification of two positions in CSD. MOTION: Council Member Schmid moved, seconded by Council Member Berman that the Finance Committee accept Staff's recommended amendments to the proposed budget which included the following four amendments: 1) a debt service expense increase totaling $563,703 in the Measure N Debt Service Fund for the second series of the Measure N General Obligation (GO) bonds and an offsetting increase in assessed property tax revenue in this fund; 2) a $76,610 expense increase for the Baylands California Land Management Contract cost in the Community Services Department (CSD); 3) a $15,000 expense decrease in the City Council proposed budget standing committee and board and commission meeting meal expense; and 4) the reclassification of 1 Full Time Employee (FTE) Community Services Manager to Community Services Senior Program Manager and reclassification of 1 FTE Division Manager Recreation and Golf to Assistant Director Community Services in CSD. Council Member Schmid was pleased to have a surplus in the Budget. MOTION PASSED: 4-0 Mr. Perez reported a net surplus of $31,000 for FY 2014. The Committee took a 15-minute break. 4. Request Finance Committee Recommendation to Council to Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Resolution Amending the Merit Rules. James Keene, City Manager, reported the City had a long overdue obligation to readjust the salary schedule based upon accurate data to align with the market. Staff requested the Council amend a portion of the annual Management and Professional Compensation Plan and the Merit Rules to adopt the new salary schedule. If the Finance Committee (Committee) wished to fund the 2 percent increase, the increase would have to be MINUTES Page 16 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 presented to the Council separately as an amendment to the Compensation Plan. Kay Koneco, Cauff and Associates, explained that the first decision before beginning a compensation study concerned comparator agencies. She reviewed agencies the City used in the past as a comparator group, and scouted the state for municipalities that provided services similar to Palo Alto. She considered the size of the city, the population served, the Full Time Equivalents (FTE), and cost of living issues. Usually 10-12 comparators provided a sufficient sample of the labor market. Because the Bay area was a unique labor market and one of the most competitive in compensation, she attempted to use as many municipalities as possible in the Bay area labor market. The City was unique in that it operated its own utilities; therefore, she considered municipalities that also provided utility services, particularly electric service. The 14 recommended agencies were presented to the Council before the study process began. Next, she determined the benchmark classifications, and surveyed 82 classifications. The classifications were intended to represent the levels within each job family in order to provide a strong foundation of the amount the labor market paid for comparable work. The top monthly salary data included the cost to the employer for an array of benefits, costs the employer paid on behalf of the employee, and the cost of enhancements to each of the agencies. She utilized the average actuarial costs of benefits as provided by the California Public Employees' Retirement System (CalPERS). The best method to determine retiree health costs for current employees was to take the normal cost divided by the amount of payroll. In surveying the 82 classifications, she reviewed class descriptions, typical duties, minimum qualifications, experience, education, certifications, and licensing so that matching classifications were at least 70 percent similar to work being performed within Palo Alto classifications. The matches for the top monthly salary data were shared with all directors and employees to obtain feedback. In some cases, matches were changed if employee concerns were appropriate. In other cases, matches were not changed. Next she compiled a recommendation for adjustments to the salary range, and provided the City with three data spreadsheets. One summarized the top monthly salary data; a second summarized the benefits detail; and a third summarized total compensation. She found that the benefits offered by the City of Palo Alto brought it closer to market competitiveness. Considering base salaries only, Palo Alto was below market. Recommendations for future salary increases were based on total compensation. The percentage difference between the comparator group and the City's salary was applied to the current salary to create a range structure. She placed each classification within that range structure based on the closest range that the classification would fit into. MINUTES Page 17 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 The control point, representing the market, became the midpoint. Ranges were 20 percent above and below the midpoint. Mr. Keene noted the data from the study was also applicable to the analysis taking place for utilities managers and the police management association in relation to the market. However, the Committee was not acting on adjustments to their compensation. With respect to salary only, Palo Alto fell below the median market in general. With respect to salary plus benefits but not including retiree medical care, Palo Alto's position improved. When retiree medical benefits were added, Palo Alto improved even more. That seemed to be a distinguishing characteristic in comparison to the market. Classifications of some positions were going down in relation to the market. Not a large number of classifications moved up or significantly out of the market. Kathryn Shen, Chief People Officer, indicated recommendations for some classifications would have no change, the range for many classifications would be lowered, and the range for some classifications would be raised. The purpose of the study was not to provide raises to employees. Council Member Berman inquired about the reasons for so many classifications being out of sync with the market. Mr. Keene explained this was not unusual, because agencies did not perform full benchmark studies each year. Early in 2009 Staff made reductions that were not being made in some of the comparator cities, or froze cost of living adjustments. In addition, adjustments were made based on specific recruitment issues. Ms. Shen added the City's prior overall salary study occurred at least ten years ago. Ms. Koneco recommended that some sort of market survey be conducted every five years. Council Member Berman inquired whether an increased salary range would result in a higher caliber of applicants, and whether higher salaries would be given to the person or the position. Ms. Shen reported the salary ranges were not person specific. The City needed to meet the median of the market in order to recruit skilled employees. Anecdotal evidence suggested higher salaries were necessary for hard-to-fill jobs. MINUTES Page 18 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Council Member Berman clarified that he was interested in whether some employees would receive increased salaries for which they might not be qualified. Ms. Shen stated any increases for the individual employee in those ranges would be based on merit. Council Member Berman asked if employee salaries below the midpoint would increase 10 percent if the salary range increased 10 percent. Mr. Keene indicated a performance validation would apply in that situation. Council Member Berman inquired whether employees would receive an automatic raise. Ms. Shen answered no. Mr. Keene explained the City could have hired higher in the range in the past in order to fill positions. Salaries for new hires were partially based on the prior salary earned by the new hire. By improving the salary ranges, the City could hire the same person but lower in the range. Council Member Berman referenced page 5 of the May 6, 2013 report regarding adjustment of individual employees' salaries at or below the midpoint of the current range to the same relative place at or below midpoint of the new range provided the employees are meeting or exceeding performance expectations. This statement seemed to address only a too low range when the employee was at or below the midpoint. He asked if an employee's salary would be increased if he was above midpoint and the range was low. Mr. Keene responded yes. Ms. Shen indicated employees would most likely move to the same relative place. Staff would review individual circumstances when making decisions. Council Member Berman believed not many employees were above midpoint in general. Mr. Keene explained that if the value of a job was out of place with the market and an employee had a certain experience level in the market, then the employee would move to the same place on that line going forward. The one difference was that some employees were above the midpoint, and their MINUTES Page 19 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 salaries were adjusted. In that situation, the employee received the salary increase early and would not receive a commensurate move forward. Council Member Berman asked if an employee, who was 15 percent over the midpoint in the new salary range, would move back to 10 percent over the new midpoint over time. Ms. Shen reported the range was a reflection of where a job was in the market. She did not want to take money away from Staff in implementing the study. She met with departments and small groups of management and professional Staff to assure them that they would not lose salary, and that salary increases would remain available as the market increased and the ranges moved. For example, if the Proposed Budget was adopted and a 2 percent increase implemented, then the whole salary range would move. An employee at the top of the range would still receive the 2 percent increase because the range moved. Council Member Berman assumed there was a reason for an employee to be 10 percent above midpoint in an inflated range. Mr. Keene stated no employee's salary would be decreased. Council Member Berman inquired whether there would be an attempt over time to move salaries back to midpoint. Mr. Keene replied yes, on a case-by-case basis. Merit adjustments would vary based on performance. Ms. Shen expected a long service employee would be towards the top of the range. By implementing the compensation plan, employees would not be held just to the control point, which was really only the halfway point. Opening up the whole range would acknowledge the City's wish for employees to spend their careers at Palo Alto. Council Member Schmid inquired whether the final salary range was set as a market median taking the percentage difference from salaries. Ms. Koneco used the total compensation market median as the percentage difference between the City of Palo Alto salary and the market median total compensation, and the percentage was then applied to current salary ranges to adjust the salary ranges for a final recommendation. Council Member Schmid asked if benefits only were used for the adjustment, not for setting the range. MINUTES Page 20 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Ms. Koneco responded yes. Council Member Schmid inquired about the CalPERS average costs. Ms. Koneco explained that CalPERS determined average costs for each of the specific benefits throughout the State of California. She applied that percentage to the City of Palo Alto's benefits as well as to all the comparators, so that the same formula percentages were used. Council Member Schmid asked if the CalPERS average costs were taken in 2010-2011. Ms. Koneco answered yes. Council Member Schmid noted CalPERS was increasing costs drastically due to past mistakes, and inquired whether the City was missing some of the real valuations due to CalPERS' mistakes. Ms. Koneco stated any compensation study was a snapshot in time to reflect the state of each comparator agency. After using the 2010-2011 numbers, the CalPERS average costs were adjusted. Council Member Schmid asked how the City could determine the true value of costs. Mr. Keene indicated the study had at least three parts: 1) aligning jobs vertically within the organization; 2) choosing the benchmark cities and the positions to benchmark; and 3) collecting the actual salary data. Another salary study would be performed in a year using the same classifications and same benchmarks to obtain updated comparison data. Council Member Schmid inquired whether it would be another salary benefit comparison. Mr. Keene replied yes. When the comparison was made previously, the Management Professional Group employee paid 2 percent; the employee now paid 8 percent. Council Member Schmid noted Palo Alto invested heavily in future compensation; however, recruitment involved salaries. He suggested Staff study ways to market benefits more effectively or to shift compensation into salaries rather than benefits. MINUTES Page 21 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Ms. Shen reported the high cost of living and high cost of housing made recruiting difficult unless the cash salary was high enough to justify the expense. Staff needed to have a good marketing message concerning long- term benefits, and to review the mix of benefits. Salary was becoming more important for the younger generation of workers. Mr. Keene reported CalPERS and bargaining groups imposed restrictions on the City's flexibility regarding compensation. Staff wanted to tailor compensation packages to individual employees as part of recruitment; however, they were restricted from doing that. Council Member Schmid believed the City's benefit package was attractive to employees later in their careers, and suggested recruitment should be oriented to attracting younger people. Mr. Keene added that a long-term employee could move to another agency that paid a higher salary; yet, the City was still obligated for the portion of the employee's retirement resulting from working at Palo Alto. Council Member Schmid asked what happened to the retiree health benefits. Mr. Keene indicated health benefits could vary depending on where the employee went. A long-term employee could increase his pension benefit, and yet Palo Alto retained the bulk of the responsibility for paying the employee benefit even at a higher cost. Lalo Perez, Director of Administrative Services, reported an employee had to retire from the City and be 50 years of age or disabled to eliminate the City's obligation for an employee who moved to another agency. Chair Burt indicated state reforms led to the same medical benefits for employees, but not the same pension benefits. In fact, pension benefits within the workforce were radically different. Under this program, employees would be adjusted according to salary, not total compensation. He asked if the City had the ability to set the new salary ranges based not entirely on salary but on total compensation within the organization. Ms. Shen explained that using an individual's total compensation would result in a salary schedule with individual ranges for each employee. Chair Burt recalled that Staff calculated the total compensation for various employee levels, and asked if anything prevented the use of set points based on total compensation. MINUTES Page 22 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Keene stated the study compared an average position in Palo Alto with an average position in the marketplace. Council Member Burt's point was that Staff would establish the benchmark in the same way, but where an employee would be placed within the range or the size of the range might be different. He believed the City might have to pay a higher salary to a number of employees, because the total benefit was less. Chair Burt understood Mr. Keene's point to be that total compensation was only half the equation. Mr. Keene indicated over time total compensation would change. He guessed that most of the study data compared 2.7 percent at 55 years of age to 2 percent at 60 years of age. Chair Burt noted that since the 2010-2011 study, employees began paying the entire CalPERS contribution. The City would have an easier time hiring if it offered more salary and less benefits. The problem was hiring new employees within a salary structure equivalent to carryover employees who had higher pensions. New employees were stuck under a salary structure that reflected salary rather than total compensation. If the salary structure was based on total compensation, some time would be needed to realize the benefits of the cost savings from new employees being in a lower salary structure. Without the cost savings, offering a higher salary would be difficult even though new hires would receive less pension benefit. Ms. Shen felt there were creative ways to attract younger professionals and employees to the City. Companies were having the same sort of issues with recruiting. Chair Burt believed updating the study would reveal greater disparity. If the City's total compensation on average was roughly equivalent to benchmark cities' total compensation, then employees covered by the old pension structure would be above the benchmark cities on average, and the new employees covered by the lower pension structure would be below the benchmark cities. The salary ranges should be based on total compensation or a hybrid. The study benchmarked Palo Alto against other cities based on total compensation, but within Palo Alto the benchmark was based on salary. Mr. Keene indicated his point was the internal issue. Chair Burt suggested the salary structure should include some merit review for salary adjustments. MINUTES Page 23 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Perez reported the CalPERS system contained an adjustment within the employee's contribution, even if employees made the same salary. Chair Burt did not assume that the City could reach full equity for existing employees using a system based on total compensation. Mr. Keene understood Council Member Burt's point to be internal equity, rather than the City's position in relation to the market. In 2010-2011 there was more flux in the marketplace than there would be in 2014 when benefits would be more equitable for all cities. In 2014 it would be easier for the Council to discuss specific guidelines regarding recruiting or incentivizing employees whose total compensation was less of a package. Chair Burt was interested in receiving information for the next adjustment that attempted to consider total compensation and the differences among employees, and to provide parity for a given position based on total compensation. Mr. Keene felt that aligned with Council policy positions concerning generational equity within the workforce. Chair Burt asked if colleagues were interested in that issue. Ms. Shen reminded the Committee that the City had to remain competitive with neighboring cities. Chair Burt reported the City would be more competitive because new employees would receive higher salaries. Mr. Keene noted higher salaries meant higher costs during the transition period. Over time, costs would not be higher. Chair Burt did not assume use of total compensation would result in an increase of total expenditure. There would be an adjustment period. Mr. Keene agreed additional information would be good. The City would have to remain competitive for a while with legacy employees. Chair Burt noted total compensation for employees would be competitive. He inquired whether total compensation included the prorated share of the unfunded liability. Ms. Koneco explained that total compensation was the normal cost for current employees. MINUTES Page 24 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Chair Burt requested an explanation of normal cost. Ms. Koneco stated it was the amount the City contributed currently. Chair Burt asked if the normal cost included employees' proportionate share of unfunded liability. Ms. Koneco replied no. Chair Burt explained that an existing employee's compensation was comprised of the normal cost plus his share of the unfunded liability. The liability was unfunded because the employee would receive pension benefits exceeding the amount contributed by the employee and the City in the past. Mr. Keene stated the unfunded liability would vary from one city to the next. Chair Burt indicated the City's total compensation was proportionately higher for benefits. If the unfunded liability was contained within benefits, then Palo Alto had a higher proportion of unfunded liability than another city with lower benefits and higher salary. Ms. Koneco reported the study captured the actual costs related to current employees for that future benefit. They could separate any unfunded liability related to past workforce. Chair Burt inquired whether the study separated the unfunded liability. Ms. Koneco captured the normal costs related to the current workforce. Chair Burt noted Palo Alto was comparable to other benchmark cities when benefits were included. For salary alone, Palo Alto was below the benchmark. That meant Palo Alto's amount of unfunded liability per employee was higher than other benchmark cities. Mr. Keene stated the retiree medical was a larger component than the pension. Many other factors would affect each jurisdiction's calculations of unfunded liability. Chair Burt explained that the $30-$40 million amount set aside for unfunded liability would accrue to both retirees and current employees, because Palo Alto funded more of the unfunded liability than most other cities. MINUTES Page 25 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Mr. Keene suggested the issue was part of a larger compensation, placement, and equity conversation. Chair Burt requested additional information on those issues for future policy decisions. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Burt that the Finance Committee Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Adopt a Resolution Amending the Merit Rules. Vice Mayor Shepherd did not disagree with comments. The primary consideration was disposable income. She wanted good people to work for the City; therefore, the Council should review benefits. She was uncertain whether employees could live off future benefits. Chair Burt explained that these adjustments would provide employees with more disposable income. Those coming into the workforce would have more salary as a result of the adjustments made in pension. Vice Mayor Shepherd understood that point, and wanted to take care of workers today and tomorrow. INCORPORATED INTO THE MOTION WITH CONSENT FROM THE MAKER AND SECONDER for Staff to return in 2014 with information on how the City might incorporate total compensation into the salary structure across the organization as a whole. Council Member Berman supported the Motion. He agreed with bringing salaries up to market level, because the City was having difficulty filling positions. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to update the comparisons within 18 months. Vice Mayor Shepherd felt the language was redundant, but would accept it. Chair Burt wanted to provide clarity and direction to Staff. Mr. Keene reported Staff would perform another benchmark of the salary structure and comparison with the market within 18 months. Council Member Schmid asked if the study would include salary and benefits. MINUTES Page 26 of 26 Finance Committee Special Meeting Final Minutes 5/23/13 Ms. Shen indicated the study would include total compensation. MOTION PASSED: 4-0 Mr. Keene understood the Committee recommended that Staff make an adjustment based on data for the City and comparable organizations from 2010-2011. The study placed the City's pay plan for employees at the median of the market. The City aspired to excellence, not the middle of the market. While working for the City was not easy, it was rewarding. The City offered interesting work in a great community and the chance to be on the leading edge of many issues. Staff expected to hire and retain top people for the City. FUTURE MEETINGS AND AGENDAS Lalo Perez, Director of Administrative Services, announced the June 4, 2013 meeting was cancelled. The one Agenda Item, third quarter financial reports, was moved to the June 18, 2013 meeting. Staff was considering a formal adjustment to revenues in order to align actual amounts with the Adopted Budget. Staff would present a draft report of the Cost of Service Study to the Committee. ADJOURNMENT: The meeting was adjourned at 9:13 P.M.