HomeMy WebLinkAbout2000-03-21 City Council (7)City of Palo Alto
C ty Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTN:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:MARCH 21, 2000 CMR: 179:00
SUBJECT:1999-00 MIDYEAR FINANCIAL SUMMARY AND BUDGET
AMENDMENT ORDINANCE
RECOMMENDATION
Staff recommends that the City Council adopt the attached Budget Amendment Ordinance
(BAO), which reflects midyear adjustments to the 1999-00 Budget on the basis of updated
revenue, expenditure, and reserve balance projections, a proposed Capital Improvement
Program (CIP) project to remodel the computer room, adjustments to an Electric Fund CIP
and to several Gas Fund CIP projects.
BACKGROUND
This report summarizes the financial results for the first six months of the fiscal year 1999-00
and updates budget projections for the full fiscal year, including reserve balances for the
General Fund and Utilities Funds. A Midyear Financial Results section presents an overview
of the adjustments being made (Attachment 1). It is followed by a more detailed discussion
of the adjustments to the revenues, expenditures, and reserves of the City’s principal funds.
DISCUSSION
The financial position of the City remains healthy. At this time, the City and State appear
to have weathered negative effects of the severe Asian economic downturn and the recent
turbulence of world financial markets. The General Fund is projected to report a net surplus
of $.7 million in 1999-00, which represents an increase of $.62 million from the Adjusted
Budget. Since the Budget Stabilization Reserve (BSR) is currently funded to the Council-
approved maximum of $20.5 million, the entire $.62 million will be added to the
Infrastructure Reserve. The Electric Fund Supply Rate Stabilization Reserve (RSR) is
projected to end the year above the Council-approved maximum guideline level. Despite a
7- percent rate decrease last year, the Gas Fund Supply and Distribution RSRs will continue
to exceed the maximum levels. In addition, the Wastewater Collection and Refuse RSRs are
projected to exceed the Council-approved maximum levels.
CMR:179:00 Page 1 of 2
Included in this report is a BAO (Attachment 2), which includes: Exhibits A and B, reflecting
the associated budget adjustments being requested and Utility Fund summaries; and Exhibit
C, which provides the project description for proposed Renovation and Upgrades to Data
Management Areas CIP project 10027. The report also includes a summary of the Council-
approved Budget Amendment Ordinances impacting the B SR and the various Utility Fund
RSR’s (Attachment 3). Finally, this report includes some financial indicators for the General
Fund to allow for analysis of the fiscal health of the General Fund (Attachment 4).
RESOURCE IMPACT
Adoption of the attached ordinance will allow for certain adjustments to the fiscal year 1999-
00 Budget, based upon updated projections and the establishment of a new General Fund CIP
project.
POLICY IMPLICATIONS
This recommendation does not represent any change to existing City policies.
ENVIRONMENTAL ASSESSMENT
This is not a project for purposes of the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment 1:
Attachment 2:
Exhibit A
Exhibit B
Exhibit C
Attachment 3:
Attachment 4:
Fiscal Year 1999-00 Midyear Summary
Ordinance Approving Midyear Adjustments
General Fund, Special Revenue Funds, and Capital Improvement Funds
Utility Funds
Renovation and Upgrades to Data Management Areas, CIP 10027
Changes to the Budget Stabilization Reserve
Financial Indicators
PREPARED BY:Gigi Harrington, Deputy Director, Administrative Services Department
Leslie Jennings, Intern, Administrative Services Department
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
CARL Y~F~,
~,~ Director,/A ~ministrative Services
~l ity Manager
CMR:179:00 Page 2 of 2
Attachment 1
REVENUE OVeRVieW AN~ ~UD~£T
Revenue results at the midpoint of the 1999-00
fiscal year indicate a solid local and State econ-
omy. Overall, revenues have exceeded expecta-
tions and are projected to exceed the Adopted
Budget and prior year revenues.
General Fund revenues and other funding sources
are projected to increase by $2.2 million over the
1999-00 Adjusted Budget. This is due in part to
strong tax revenues, including property ($.5 mil-
lion), transient occupancy ($.6 million), docu-
mentary transfer ($.4 million), and motor vehicle
($.05 million). Other revenue increases include
an adjustment to sales tax based on strong third
quarter (and anticipated fourth quarter) perfor-
mance ($.08 million) and increased interest
income based on actual receipts ($. 1 million).
Additional miscellaneous reve-
1999.00 Difference
1999-00 t999.00 Midyear (Midyear
1998-99 Adopted Adjusted Projected Projected to
Actuels Budget Budget Budget Adjusted)
Sales Taxes $20,226 $20,770 $20,770 $20,850 $81
Property Taxes 9,521 9,500 9,500 10,000 500
Utility Users Tax 6,039 5,775 5,775 5,775
Transient Occupancy Tax 6,551 7,025 7,025 7,600 575
Other taxes, fines & penalties 7,255 7,072 7,072 7,522 450
Service fees and permits 8,731 10,394 10,394 10,394
Charges to Other Funds 8,890 8,919 8,979 8,979 -
Rentai Income 10,239 9,838 9,942 10,093 151
Other Revenues 9,743 10,462 10,537 10,982 445
Total Revenues $87,194 $89,754 $89,994 $92,196 $2,202
Plus Operating Transfers In 14,~46 12,987 12,987 12,987
From Infi’astrueture Reserve 1,161 1,161 1,161
Plus Encumbrances and Reappropri 5,067 5,258 5,258
TOTAL SOURCE OF FUNDS $106,507 $103,902 $109,400 $111,602 $2,202
Administrative Departments $17,254 $15,l 18 $17,717 $17,667 ($50)
,Community Services 20,583 20,068 21,513 21,708 195
Fire 15,233 14,427 15,031 14,981 (50)
Planning 6,909 6,583 7,720 7,720
Police l 8,248 18,033 18,920 t 8,920
Public Works 13,227 11,698 12,746 12,746
Non-Departmental 5,200 8,650 6,862 7,389 527
Total Expenditures $96,654 $94,576 $100,509 $101,131 $622
Add: Operating Trans Out 7,116 8,164 8,592 9,551 959
To Infrastructure Reserve 213 213 213
Total Use o| Funds $103,770 $102,953 $109,314 $110,895 $1,581
Net Suffplusl(Oeflcit)$2,737 $949 $86 $707 $621
nue adjustments totaling $.5
million are discussed below.
General Fund expenditures are
increasing by $1.6 million over
the 1999-00 Adjusted Budget.
This change includes the pay-
ment of a lump sum bonus to all
SEIU employees, as stipulated
in the f’mal year of the current
three-year labor agreement ($.5
million), a loan/transfer to the
Storm Drain Fund ($.3 million),
and additional one-time
expenses discussed below.
The 1999-00 Adopted Budget
included a surplus or addition to
reserves of $.95 million; how-
ever, there have been $.87 mil-
lion in Budget Amendment
Ordinances (BAOs) approved
by Council during the first half
of the fiscal year. Thus, the
1999-00 midyear projections
indicate the General Fund will
end this year with a surplus of
$.7 million.
UTILITY FUNDS
The implementation of the new Utilities Cus-
tomer Information System has impacted staffs
ability to clearly analyze the projected year end
results for the Utility Funds. Details related to
utility bill payments posting into the City’s finan-
cial system are still being resolved. Until this
technical issue is resolved, it is not possible to
review budget to actual performance for Utility
Fund customer sales. Staff is confident that this
technical problem will be resolved shortly and
also does not anticipate significant variances
from the forecasted budget for revenues.
the Council-approved maximum guideline levels.
The reserve surplus will be used to fund rising
costs in the Gas Fund as presented with the City
Manager’s Proposed 2000-01 Budget.
Sales and expenditures are close to budget in the
first half of 1999-00, and only require minor
adjustments. An increase to the budget for water
purchases is requested based on increased con-
sumption. The Water Fund RSR is projected to
be $7.7 million, slightly below its maximum
reserve guideline of $7.9 million by yearend.
At this point in time revenues are projected to
end the year at $79.8 million, slightly below the
1999-00 Adjusted Budget. The Electric Fund
Distribution RSR is projected to be $4.5 million,
slightly above the Council-approved minimum
level, while the Supply RSR is projected to be
$19.9 million, approximately $6.1 million above
its maximum level° The Calaveras Reserve is
projected to be drawn down by $3.0 million,
bringing the reserve to $68.0 million as planned.
The purpose of this reserve is to pay for
"stranded costs" associated with the Calaveras
Hydro-electric Project.
Revenues are projected to be $18.3 million at
yearend, with only minor changes from the
Adjusted Budget. Increased gas purchase costs of
$.57 million have contributed to produce a pro-
jected $.67 million reduction in reserves at
yearend. However, the Gas Fund Supply and
Distribution RSR’s will still significantly exceed
Revenues are projected to end the year at $24.7
million, slightly above the Adjusted Budget of
$24.3 million. The RSR projected balance at
yearend is $7.1 million, representing an increase
of $.7 million from the Adjusted Budget projec-
tions. The RSR proj ected ending balance will be
significantly above the maximum guideline level
of $3.7 million.
Pending a rate increase, the Storm Drainage Fund
had to borrow approximately $. 16 million from
the General Fund as part of the 1999-00 Adopted
Budget. Due to revenue shortfalls in 1998-99,
slight increases in debt service costs, and a short-
fall in interest income when compared to budget,
the loan from the General Fund to the Storm
Drainage Ftmd needs to increase by $.3 million
to provide fimds for the remainder of the fiscal
year. Staff is working to bring forward a request
to proceed with a Proposition 218 fee election to
increase storm drain fees in order to undertake
necessary capital work in the Storm Drainage
Fund. This request will be brought forward to
Council in May 2000. Following Council
approval of the fee increase process, it will take
approximately four months to complete the Prop-
osition 218 hearing and associated ballot mea-
sure. If approved by the property owners, the fee
increase will go into effect in Fall 2000. At that
time, the Storm Drainage Fund would begin to
repay the General Fund loan.
Minor changes in budgeted revenues, expendi-
tures, and reserves are projected for the Waste-
water Collection, Wastewater Treatment, and
Storm Drainage Funds. The Wastewater Collec-
tion Fund RSR is projected to end the year at
$8.0 million, which is above the Council-
approved maximum guideline of $5.4 million.
The Wastewater Treatment Fund RSR will
exceed the Council-approved target but be below
the maximum guideline.
GENERAL FUND
As a result of the robust local economy, the City
of Palo Alto has realized favorable revenue
lO
8
6
4
2
o
GENERAL FUND: Property Tax ($MiHions)
~[] 94-95
[] 95-96
[] 96-97
[] 97-98
[] 98°99
[]Projected
99-00
results. Receipts from property, documentary,
and transient occupancy taxes have exceeded
expectations and require adjustments at midyear.
Based on a sizzling local and county property
market, property related tax revenues soared
toward the end of 1998-99 and during 1999-00.
GENERAL FUND: Transient Occupancy Tax
($tVlillions)
E] 94-95
[] 95-96
[] 96-97
[] 97-98
[] 98-99
[]Projected
99-00L~__
Despite an 11 percent increase in the 1999-00
budget over the prior year budget, property tax
revenues are anticipated to rise by another 5 per-
cent or $.5 million. Property tax revenues likely
will reach $10.0 million by yearend. The combi-
nation of escalating property values, resolution
of past property tax appeals in the county, and
the accelerated pace at which new property val-
ues are listed on the county roll, has led to a
sharp increase in property taxes.
As a consequence of considerable demand for
residential and commercial properties, the City’s
documentary transfer tax revenues have risen
dramatically. The fact that transfer tax revenues
never exceeded the $2.0 million mark prior to
1998 and jumped to the $3.0 million level in
1999 shows that Palo Alto is extremely attractive
to families and businesses. Revenues for 1999-00
are expected to increase by $.4 million over the
current budget of $3.1 million. While this reve-
nue source has remained steady for the past sev-
eral years, it is important to note that it is highly
sensitive to the mix of sales between commercial
and residential properties and this significant
growth should not be expected to continue.
Transient occupancy taxes (TOT) have risen
swiftly in the past two years. The 1999-00 budget
of $7.0 million will be augmented by $.58 mil-
lion based on receipts to date and the opening of
the new Westin hotel in April or early May. In
addition to the new hotel, factors driving the 8
percent increase in this year’s budget include the
opening of newly renovated rooms at the Cabana
hotel, the upgrading of hotels/motels in the City
(leading to higher rates), and high occupancy lev-
els. The thriving Silicon Valley economy has
resulted in a surge in demand for hotel rooms and
the ability of hoteliers to sustain and increase
their rate structures.
GENERAL FUND: Sales Tax
[] 94-95
I~ 95-96
[] 96-97
[] 97-98
[] 98-99
[]Projected
99-00
Sales taxes have tumed in a modest performance
thus far into 1999-00. The first two quarters
showed flat sales taxes with weakness in the usu-
ally resilient department store sales area and in
electronic equipment sales. In the third quarter,
receipts perked up with key gains in auto and
computer related sales and in restaurants. Prelim-
inary indications for the fourth quarter, which
includes Christmas sales, are positive. A slight,
upward adjustment of $.08 million is recom-
mended at midyear.
Motor vehicle in-lieu tax revenues have steadily
risen and projections are recommended to
increase by $.05 million at midyear. New auto
sales have become a major source of City and
State sales taxes and have driven the increase in
the in-lieu tax. In addition to this increase, staff
recommends that interest income on its fixed
income portfolio be adjusted upward by $. 1 mil-
lion. Rising short-term interest rates have
resulted in better than expected interest income.
Other significant revenue adjustments include the
renegotiation of the E1 Camino ParkiMacArthur
Park lease agreement with Stanford, resulting in
a revenue increase (and offsetting increase in
expendittu’es) of $151,000; reimbursement from
San Francisco International Airport to fund
marsh/harbor improvements ($.2 million); and
reimbursement from the State of California for
Police Department booking fees ($. 15 million).
Except for the expenditure changes which are
discussed below, the General Fund departments
are on target with the 1999-00 Adjusted Budget,
General Fund departments will likely show sav-
ings at yearend, consistent with prior years’ expe-
rience. Because these savings will vary from
department to department, they are not included
in the attached BAO or in the General Fund Sum-
mary.
Cable Refranchising: A total of $50,000 is
needed for the Cable Television Franchise
renewal process. This includes $40,000 for out-
side legal counsel to review documents submitted
by Cable Co-op and AT&T and to prepare ordi-
nances for Council review and adoption. The
remaining $10,000 is needed for support services
in publicizing the Needs Assessment Focus
Group Workshops, which are designed to iden-
tify the future cable-related needs of the commu-
nity, and will be used to print and mail brochures
to ensure as broad a turnout as possible.
SEIUPayment: The current labor agreement
with Service Employees International Union
(SEIU) calls for a one-time, lump sum payment
of $1,500 per employee in the third and f’mal
year of the contract. As the contract term runs
from May 1, 1998
to April 30, 2001,
the majority of the
contract’s third
year falls in fiscal
year 2000-01. For
that reason, fund-
ing for the lump ~o.~
sum payment was s,~
budgeted in fiscal 14,666
year 2000-01;
however, the City
is required to 5,477
479make this payment
in the pay period
including May 1,
2000 so a mid-year adjustment to add the fund-
ing to the 1999-00 Adjusted Budget is necessary.
expense of the study will be shared equally by
the Friends and the City, to a maximum of
$15,000 each.
Street Improvement Fund: As a result of overes-
timation of the receipt of Measure A and B funds
for street related capital work, a reduction in the
amount of the transfer from the Street Improve-
ment Fund to the CIP ($279,526) is necessary.
Feasibility Stu@- Children’s Library: The
Friends of the Library have requested that the
City conduct a building expansion feasibility
study of the Children’s Library. The request was
approved by the City Manager, and presented to
and approved by City Council in December 1999
(CMR: 442:99). As indicated in the CMR, the
Miscellaneous Adjustments: There are miscella-
neous expenditure adjustments to fund parks
maintenance contracting ($44,000). Addition-
ally, there were two
administrative
encumbrances
($150,000) carried
forward as part of the
1998-99 yearend
closing process
0 0 s,~which need to be
~1 14,~removed. These bud-
7 get allocations of
$100,000 in the
5,477 Administrative Ser-470 vices Department and
$50,000 in the Fire
Department will be
returned to reserves. Finally, there is an expendi-
ture increase of $151,000 (offset by revenues)
due to the renegotiation of the E1 Camino Park!
MacArthur Park rental agreement between the
City and Stanford.
7 0
0
0
Budget Stabilization
Reserve for ~
C~ain/(Loss) on
19~J-00 19~J~0 19SS~) 19~-00 199o~0
As a result of discussions with the Finance Com-
mittee, this report includes an attachment regard-
ing financial indicators. These indicators provide
some insight into the overall health of the Gen-
eral Fund and point out areas where there may be
cause for concern with regard to the fiscal situa-
tion of the General Fund. These indicators are
included in Attachment 4.
CAPITAL {MPROVEMENT FUND
A new CIP project, Renovation and Upgrades to
Data Management Areas, CIP 10027, is being
proposed. This will fund the expansion, renova-
tion and upgrading of the computer room on the
second floor of City Hall, as well as improve-
ments needed in the Police Department commu-
nications center and adjoining equipment room.
A portion of the funding will come from Infra-
structure Reserves, with the remainder coming
from the General Fund and Utilities Funds°
UTiLiTY FUNDS
The City continues to proactively respond to the
challenges posed by the deregulation of the elec-
tric and natural gas industries. The Electric and
Gas Funds have been divided into separate "sup-
ply" and "distribution" business units. In addi-
tion, a study of the equity transfers from the
Electric, Gas and Water funds is underway and
expected to be presented for review and discus-
sion with the 2000-01 Proposed Budget. As men-
tioned above, the implementation of the new
Utilities Customer Information System has pre-
sented some technical challenges that have
resulted in difficulties with recording sales reve-
nue into the City’s financial system. As such, no
adjustments to sales revenues are proposed as
part of this report. However, staff is confident
that sales revenues by year end will be correctly
allocated to the different utility funds and that
this delay in information will not unduly effect
the fmancial performance of the various funds.
Telecommunications revenues are projected to be
$.3 million below the Adjusted Budget. This
decrease is due to recalculation of the projected
revenues based on actual experience with the
function. It is anticipated that the telecommunica-
tions function will break even by 2000-01 and
revenues will cover expenditures. Based on these
estimates, it is anticipated that the function will
be able to pay back the initial investment and the
subsidies to date by around 2006.
No change in power purchase costs is recom-
mended at this time. Other expenses are projected
to increase by $.2 million in 1999-00. The adjust-
ments include: a $.2 million increase to the East
Meadow Circle Underground CIP resulting from
the identification of necessary upgrades/replace-
ments to damaged conduits and boxes to increase
reliability to large customers; and an increase to
support the Electric Fund’s portion of the costs
for the Renovations and Upgrades to Data Man-
agement Areas, discussed above.
The Electric Fund Supply RSR is projected to be
$19.9 million at yearend, $6.0 million above the
Council-approved target level. The Electric Fund
Distribution RSR is projected to end the year at
$4.5 million, slightly above the Council-
approved minimum level. The Calaveras Reserve
is projected to be drawn down by $3.0 million to
$68.0 million, which is slightly above the target
of $67.9 million.
The projected revenue for the Public Benefit Pro-
gram (PBP) is $1.7 million, while the projected
PBP expenditures will total $1.8 million. The
PBP Reserve is projected to increase to $2.2 mil-
lion at yearend. The Council recently approved
the elements of the Utility’s PBP along with asso-
ciated expenditures. Significant accomplish-
ments in this area include the following
programs: an appliance rebate; efficiency loans
and rebates; renewable energy including photo-
voitaic systems; and, an electric vehicle demon-
stration project.
No adjustments are proposed for sales revenues.
A minor increase in other revenues is recom-
mended to reflect increased revenues associated
with the Customer Connection Services CIP.
An increase in the gas purchase budget of $.6
million is recommended based on a 4.5 percent
increase in consumption during the first six
months of the fiscal year. Other expenses are
being increased by $.04 million due to an
increase in the Gas Customer Connection Ser-
vices CIP to reflect an increase in demand. This
increase is offset by charges to customers for the
connections. In addition, the Poly Fusion Equip-
ment Replacement CIP is recommended to be
increased by $0.01 million to reflect an account-
ing transaction that did not correctly carry for-
ward into the 1999-00 fiscal year. In addition,
there is a minor expenditure increase for the Gas
Fund’s portion of the Renovations and Upgrades
to Data Management Areas CIP and funding for
the SEIU contract as discussed above.
The Gas Supply RSR is projected to end the year
at $4.7 million, and the Distribution RSR is pro-
jected to be $5.8 million, both of which signifi-
cantly exceed the Council-approved maximum
guideline levels.
No adjustments are recommended to Water Fund
revenues. An increase in water purchases of $.3
million is recommended based on a 3 percent
increase in consumption during the first half of
the fiscal year. An increase in expenses of $.05
million is included to support a consulting con-
tract to prepare an integrated resource plan for
the Water Fund. This funding will be used to
examine ways to improve the operation and reli-
ability of the City’s water distribution system,
particularly in the case of an emergency disrup-
tion of the City’s primary water supply. This
study will augment work already completed with
regard to the City’s water wells and storage
capacity. Other small changes include an addi-
tional $.01 million for supplies for valve replace-
ments and the Fund’s share of the Renovations
and Upgrades to Data Management Areas CIP.
The Water Fund RSR is projected to decrease by
$1.8 million in 1999-00, and be slightly under
the maximum level of $7.9 million.
Refuse Fund revenues are projected to increase
by $.3 million, due to higher than anticipated bin
rentals due to significant construction activity.
Refuse Fund expenditures are projected to be $.4
million less than budget, as a result of position
vacancies and savings in various contract ser-
vices allocations, with a slight offset for an
increase for the SEIU contract costs.
Refuse Fund revenues are projected to increase
by $.3 million, due to higher than anticipated bin
rentals due to significant construction activity.
Refuse Fund expenditures are projected to be $.4
million less than budget, as a result of position
vacancies and savings in various contract ser-
vices allocations, with a slight offset for an
increase for the SEIU contract costs.
Wastewater Treatment Fund revenues are pro-
jected to be $22.3 million, with a slight addition
to reserves of $.4 million, which is almost no
change from the original budget. The projected
yearend reserves of $3.7 million exceed the
Council target guideline.
The Refuse RSR is projected to end the fiscal
year at $7.1 million, which is $3.4 million above
the Council-approved maximum guideline of
$3.7 million. This
excess may be
used to defer future
costs, including the
need to increase
tonnage delivered
to the SMART sta-
tion to keep the
Palo Alto landfill
open until its pro-
jected closure date
in 2011-12, and
other costs associ-
ated with future
changes in refuse
services.
Storm Drainage Fund expenses need to be
increased slightly by $.02 million to reflect a
change in debt service costs due to the ref’manc-
ing of some out-
standing Storm
Drainage bonds.
As discussed
above, the loan
from the General
Fund to the Storm
Drainage Fund
needs to be
increased by $.3
million to reflect
a lower 1998-99
,,.~ ~ ,~ ~~ ~ ~ending balance in
’~~~~..~o’-o~~~ ~,~ ~the RSR, prima-
~rily due to a sho~-
fall ~ revenues
and projected lower ~terest income ~ 1999-00.
A request for a fee increase ~11 be brought for-
ward to be voted on by the prope~ o~ers in the
fall of this year. ~is vote will follow the guide-
lines identified in Proposition 218.
Wastewater Collection Fund revenues are pro-
jectedto be $19.4 million, with a $1.7 million use
of reserves at year end which is a slight change
from the original budget. The projected yearend
Wastewater Collection RSR of $8.0 million
exceeds the Council-approved maximum guide-
line level of $5.4 million.
Utility Funds Reserve Surr~ary ($O00s)
A~tachment 2
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 1999-00 TO ADJUST
BUDGETED REVENUES AND EXPENDITURES IN ACCORDANCE WITH THE
RECOMMENDATIONS IN THE MIDYEAR REPORT
WHEREAS, pursuant to the provisions of Section 12 of Article
III of the Charter of the City of Palo Alto, the Council on June 28,
1999 did adopt a budget for fiscal year 1999-00; and
WHEREAS, after reviewing the current budgeted revenues and
expenditures for fiscal year 1999-00, adjustments to the budget are
recommended to more accurately reflect year-end projections; and
WHEREAS, City Council authorization is needed to amend the
1999-00 budget as hereinafter set forth.
NOW, THEREFORE, the Council of the City of Palo Alto does
ORDAIN as follows:
SECTION i. The sum of Six Hundred Twenty Thousand Eight
Hundred Twenty Five Dollars ($620,825) is hereby added to the
Reserve for Infrastructure Improvements, as described in Exhibit A.
As a result of this change, the Infrastructure Reserve will increase
from $13,718,000 to $14,338,825.
SECTION 2. A new Capital Improvement Project, No. 10027,
Computer Room Remodel, Civic Center, described in Exhibit C and
incorporated herein by this reference, is created and the sum of
Eight Hundred Thousand Dollars ($800,000) is appropriated to it.
Funding for this appropriation will be provided with interfund
transfers from various Utilities Funds, and General Fund reserves,
as described in Exhibit A and Exhibit B.
SECTION 4. The sum of Two Hundred Thousand Dollars ($200,000)
is hereby appropriated to Capital Improvement Project No. 9904, East
Meadow Circle Undergrounding Project. The Electric Fund
Distribution Rate Stabilization Reserve is decreased by this amount.
SECTION 5. The sum of Forty Thousand Dollars ($40,000) is
hereby appropriated to Capital Improvement Project No. 8017, Gas
Customer Connection Services. Funding is provided by reimbursement
from customers.
SECTION 6. The sum of Ten Thousand Five Hundred Sixty Six
Dollars ($10,566) is hereby appropriated to Capital Improvement
Project No. 9907, Poly Fusion Equipment Replacement. The Gas Fund
Distribution Rate Stabilization Reserve is decreased by this amount.
SECTION 7. The sum of Fifty Thousand Dollars ($50,000) is hereby
appropriated to Capital Improvement Project No. 9912, Gas Main
Replacement. Funding is provided by the Gas Fund.
"SECTION 8. The sum of Two Hundred Seventy Nine Thousand, Five
Hundred Twenty Six Dollars ($279,526) is hereby reduced from CIP No.
18670, Street Maintenance. This reduction is necessary due to lower
than budgeted reimbursements to the Street Improvement Fund for this
project.
SECTION 9. The sum of Five Hundred Sixty Seven Thousand, Five
Hundred Dollars ($567,500) is hereby reduced from the budgeted
Distribution Rate Stabilization Reserve in the Electric Fund to
reflect changes in the Electric Fund as described in Exhibit B,
which is incorporated herein by this reference.
SECTION i0. The sum of One Hundred Three Thousand, Sixty Six
Dollars ($103,066) is hereby reduced from the Distribution Rate
Stabilization Reserve in the Gas Fund to reflect changes in the Gas
Fund as described in Exhibit B.
SECTION ii. The sum of Five Hundred Sixty Two Thousand Dollars
($562,000)is hereby reduced from the Supply Rate Stabilization
Reserve in the Gas Fund to reflect changes in the Gas Fund as
described in Exhibit B.
SECTION 12. The sum of Three Hundred ~Fifty One Thousand
Dollars ($351,000) is hereby reduced from the Rate Stabilization
Reserve in the Water Fund to reflect changes in the Water Fund as
described in Exhibit B.
SECTION 13. The sum of Six Hundred Ninety Four Thousand Five
Hundred Dollars ($694,500) is hereby added to the Rate Stabilization
Reserve in the Refuse Fund to reflect changes in the Refuse Fund as
described in Exhibit B.
SECTION 14. The sum of Twenty Five Thousand, Nine Hundred
Sixty Dollars ($25,960) is hereby reduced from the Rate
Stabilization Reserve in the Wastewater Collection Fund to reflect
changes in the Wastewater Collection Fund as described in Exhibit B.
SECTION 15. The sum of Eighteen Thousand, Seven Hundred Forty
Dollars ($18,740) is hereby reduced from the Rate Stabilization
Reserve in the Wastewater Treatment Fund to reflect changes in the
Wastewater Treatment Fund as described in Exhibit B.
SECTION 16. The sum of Twenty Seven Thousand Dollars ($27,000)
is hereby added to the Storm Drainage Fund to reflect changes in the
Storm Drainage Fund as described in Exhibit B.
SECTION 17. The sum of Two Hundred Seventy Nine Thousand, Five
Hundred Twenty Six Dollars ($279,526) is hereby reduced from
revenues and expenditures in the Street Improvement Fund as
described in Exhibit B.
SECTION 18. As specified in Section 2.28.080(a) of the Palo
Alto Municipal Code, a two-thirds vote of the City Council is
required to adopt this ordinance.
SECTION 19. The Council of the City of Palo Alto hereby finds
that this midyear adjustment is not a project under the California
Environmental Quality Act and, therefore, no environmental impact
assessment is necessary. However, projects described in this
ordinance will be assessed individually as appropriate.
SECTION 20. As provided in Section 2.04.350 of the Palo Alto
Municipal Code, this ordinance shall become effective upon adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:APPROVED:
City Clerk Mayor
City Manager
APPROVED AS TO FORM:
Senior Asst. City Attorney Director of Administrative
Services
S: ASD~Budget~9899BUDGET~99BAO\WordPerf~ldyrbao.doc
Exhibit A
1999-00 Midyear Adjustments
General Fund, Special Revenue, and Capital Improvement Funds
Code Code Description Change
Revenues
02000000 1188
02000000 1101
02000000 1185
02000000 1180
02000000 1183
02000000 1601
02000000 1599
02000000 1537
02000000 1603
Expenditures
02814220 3126
02414210 3107
02751160 3533
02814250 3401
02000000 3070
02816100 3199
02410010 3199
02000000 4056
02000000 4041
02000000 3849
02000000 3849
Sales Tax
Property Tax - Secured
Transient Occupancy Tax
Documentary Transfer Tax
Motor Vehicle in Lieu Tax
Interest Income adjustment
Reimbursement from San Francisco Airport for
Harbor Marsh CIP
Reimbursement from State of California for
Police booking fees
Revenue adjustment due to renegotiation of
E1 Camino Park rental agreement with Stanford
Change in General Fund Revenues
Parks maintenance contracting
Reversal of administrative encumbrance in
Administrative Services Department
Reversal of administrative encumbrance in
Fire Department
Expenditure adjustment dtie to renegotiation of
El Camino Park rental agreement with Stanford
Lump sum SEIU bonus
Funds for feasibility study dt Children’s Library
Funds for cable refranchising project
Transfer to Storm Drain Fund
Funds for CIP 10027 - Computer Room Remodel
’ Change in General Fund Expenses
Net Change in General Fund
81,000
500,000
575,000
400,000
50,000
100,000
194,000
151,025
151,000
$2,202,025
44,200
(100,000)
(50,000)
151,000
512,000
15,000
50,000
296,000
663,000
$1,581,200
$ 620,825
Transfer of funds from Infrastructure Reserve to CIP 10027 (400,000)
Infrastructure Reserve 1,020,825
Net Change in Infrastructure Reserves $ 620,825
Page 1
Exhibit A
1999-00 Midyear Adjustments
General Fund, Special Revenue, and Capital Improvement Funds
Code Code Description Change
CAPITAL IMPROVEMENT FUND
71000000 2011
71000000 2055
71000000 2056
71000000 2057
71000000 2053
71000000 2052
71000000 2051
71000000 2054
71000000 2065
71000000 3879
71000000 2021
71000000 3879
Transfer for CIP 10027, Renovation and Upgrades to Data 663,000
Transfer for CIP 10027,. Renovation and Upgrades to Data 6,000
Transfer for CIP 10027, Renovation and Upgrades to Data 2,000
Transfer for CIP 10027, Renovation and Upgrades to Data 12,000
Transfer for CIP 10027, Renovation and Upgrades to Data 26,000
Transfer for CIP 10027, Renovation and Upgrades to Data 26,000
Transfer for CIP 10027, Renovation and Upgrades to Data 13,000
Transfer for CIP 10027, Renovation and Upgrades to Data 8,000
Transfer for CIP 10027, Renovation and Upgrades to Data 44,000
Change in Capital Fund Revenues $ 800,000
CIP Project 10027, Renovation and Upgrades to
Data Management Areas
Reduce reimbursement from Gas Tax Fund for CIP 18670
Reduce project expenditures for CIP 18670
Net Change to Capital Fund
800,000
(279,526)
(279,526)
$0
Page 2
Exhibit B
1999-00 Midyear Adjustments
Enterprise Funds
Activity Object
Fund Code Code
Electric Fund
23 000000 1723
23 000000 ~ 1724
23 000000 1725
23 000000 1726
23 250790 3879
23 000000 4041
Changein Reserves
23 000000 3804
13 000000 3817
13 000000 3808
23 000000 3816
Gas Fund
24 250780 1402
14 231160 3604
24 210000 3070
24 250780 3001
24 250780 3099
24 250780 3879
24 250790 3879
24 250790 3001
24 250790 3099
24 250790 3879
24 000000 4041
Changein Reserves
24 000000 3804
14 000000 3817
Description
Telecommunications Revenue
Telecommunications Revenue
Telecommunications Revenue
Telecommunications Revenue
East Meadow Circle Underground CIP (CIP 9904)
Transfer for Renovation & Upgrades CIP (10027)
Net Change in Electric Fund
Distribution Rate Stabilization
Supply Rate Stabilization
Calaveras
Public Benefit Program
Net Change in Electric Fund Reserves
Reimbursement from Customers for CIP 8017
Gas Commodity Purchase
Salary Contingency - SEIU
Gas Customer Connection Services (CIP 8017)
Gas Customer Connection Services (CIP 8017)
Gas Customer Connection Services (CIP 8017)
Poly Fusion Equipment Replacement (CIP 9907)
Gas Main Replacement (CIP 9912)
Gas Main Replacement (CIP 9912)
Gas Main Replacement (CIP 9912)
Transfer for Renovation & Upgrades CIP (10027)
Net Change in Gas Fund
Distribution Rate Stabilization
Supply Rate Stabilization
Net Change in Gas Fund Reserve
Change
10,000
239,500
(536,000)
(55,000)
200,000
26,000
S (567,500)
(567,500)
0
0
0
$ (567,500)
40,000
562,000
16,500
20,400
3,600
16,000
10,566
29,750
5,250
15,000
26,000
(665,066)
(103,066)
(562,000)
$ (665,066)
Page 1
Exhibit B
1999-00 Midyear Adjustments
Enterprise Funds
Activity Object
Fund Code Code Description Change
Water Fund
22 230160 3603
22 230160 3100
22 250214 3225
22 000000 4041
Changein Reserve
22 000000 3804
Refuse Fund
25 000000 1431
25 000000 1651
25 551430 3001
25 551430 3099
25 551460 3001
25 210000 3070
25 551460 3099
25 551430 3199
25 551460 3199
25 552100 3199
25 000000 4041
25 552450 3366
Changein Reserve
25 000000 3804
Water Purchases
Integrated Resource Plan Consulting Contract
Supplies and Materials - valve replacements
Transfer for Renovation & Upgrades CIP (10027)
Net Change in Water Fund
Rate Stabilization
Net Change in Water Fund Reserve
Revenue from PASCO
Rental Income
Regular Salaries
Benefits Allocation
Regular Salaries
Salary Contingency - SEIU
Benefits Allocation
Contract Services
Contract Services
Contract Services
Transfer for Renovation & Upgrades CIP (10027)
Reduction in Kirby Canyon costs
Net Change in Refuse Fund
Rate Stabilization
Net Change in Refuse Fund Reserve
270,000
50,000
18,000
13,000
$(351,000)
(351,000)
(351,000)
355,000
(20,000)
(20,000)
(5,000)
(15,000)
8,500
(5,000)
(179,000)
(40,000)
(60,000)
6,000
(50,000)
$ 694,500
694,500
$ 694,500
Page 2
Exhibit B
1999-00 Midyear Adjustments
Enterprise Funds
Activity Object
Fund Code Code Description Change
Wastewater Collection Fund
27 000000 4052 Operating Transfer to Electric Fund for Bill Processin
27 210000 3070 Salary Contingency - SEIU
27 000000 4041 Transfer for Renovation & Upgrades CIP (10027)
Net Change in Wastewater Collection Fund
11,160
6,800
8,000
$ (25,960)
Changein Reserve
27 000000 3804 Rate Stabilization
Net Change in WW Collection Fund Reserve
(25,960)
(25,960)
Wastewater Treatment Fund
26 000000 4052 Operating Transfer to Electric Fund for Bill Processin
26 000000 4041 Transfer for Renovation & Upgrades CIP (10027)
26 210000 3070 Salary Contingency- SEIU
Net Change in Wastewater Treatment Fund
Change in Reserve
26 000000 3804 Rate Stabilization
Net Change in WW Treatment Fund Reserve
Storm Drainage Fund
28 000000 2011
28 000000 1601
28 581790 1602
28 000000 3321
28 210000 3070
28 000000 4041
Operating Transfer from General Fund
Interest Earnings
Interest Earnings - Fiscal Agent
Interest Payments
Salary Contingency - SEIU
Transfer for Renovation & Upgrades CIP (10027)
Net Change in Storm Drainage Fund
ChangeinReserve
28 000000 3804 Rate Stabilization
Net Change in Storm Drainage Fund Reserve
(11,160)
12,000
17,900
$ (18,740)
(18,740)
$ (18,740)
296,000
(50,000)
(200,000)
12,000
5,000
2,000
$27,000
27,000
$27,000
Total Changes in Enterprise Funds
Page 3
$(906,766)
Exhibit B
1999-00 Midyear Adjustments
Enterprise Funds
Activity Object
Fund Code Code Description Change
Street Improvement Fund
31 000000 4041
31 000000 1594
31 000000 1595
Operating Transfer tO CIP
County Measure A and B Funds
County Payement Management Grant
279,526
(1,339)
(278,187)
Net Change in Street Improvement Fund $0
Page 5
Revenues
Electric sales
Other revenues
Reappropriations / encumbrances
Total Revenues
Operating Expenses
Purchases
Other expenses
Total operating expenses
Capital expenses
Total Expenses
To/(From) Reserves
Reserves
Distribution Rate Stabilization
Supply Rate Stabilization
Calaveras
Public Benefit Program
Other Reserves
Total
Exhibit B
Electric Fund Summary
(000’s)
Actual
FY98-99
Midyear
Adjusted Projected
Budget Budget
FY 99-00 FY 99-00 Difference
72,050 59,711 59,711 0
12,292 13,877 13,536 (342)
5,931 6,546 6,546 0
90,273 80,134 79,793 (342)
25,478 24,390 24,390
36,752 39,831 39,857
62,230 64,221 64,247
10,834 18,607 18,807
73,064 82,828 83,054
0
26
26
200
226
17,209 (2,694) (3,262)(568)
5,413 5,098 4,531 (568)
19,184 19,914 19,914 0
71,072 68,013 68,013 0
2,172 2,239 2,239 0
4,773 4,656 4,656 0
102,614 99,920 99,353 (568)
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
Distribution Supply Calaveras
RSR RSR
4,061 6,927 61,072
6,092 10,391 67,858
8,122 13,855 84,823
Revenues
Gas sales
Other revenues
Reappropriations / encumbrances
Total Revenues
Operating Expenses
Purchases
Other expenses
Total operating expenses
Capital expenses
Exhibit B
Gas Fund Summary
(o00’s)
Actual
FY 98-99
Midyear
Adjusted Projected
Budget Budget
FY 99-00 FY 99-00 Difference
17,942 15,873 15,873 0
1,765 1,390 1,430 40
1,772 993 993 0
21,479 18,256 18,296
Total Expenses
40
To/(From) Reserves
10,247 10,552 11,114 562
7,813 8,903 8,946 43
18,060 19,455 20,060 605
3,439 3,925 4,026 101
Reserves
Distribution Rate Stabilization
Supply Rate Stabilization
Other Reserves
Total
21,499 23,380 24,085 "705
(20) (5,124) (5,789)(665)
8,936 5,920 5,817 (103)
7,445 5,304 4,742 (562)
1,349 1,382 1,382 0
17,730 12,606 11,941 (665)
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
Distribution Supply
RSR RSR
1,375 1,817
2,062 2,725
2,749 3,633
Revenues
Water sales
Other revenues
Reappropriations / encumbrances
Total Revenues
Operating Expenses
Purchases
Other expenses
Total operating expenses
Capital expenses
Total Expenses
Exhibit B
Water Fund Summary
(ooo’s)
Actual
FY 98-99
Adjusted
Budget
FY 99-00
Midyear
Projected
Budget
FY 99-00 Difference
12,615
926
3,193
16,734
13,281
1,109
1,021
15,411
13,281
1,109
1,021
15,411
0
0
0
0
4,114
7,050
11,164
3,500
14,664
5,279
7,756
13,035
3,869
16,904
5,549
7,837
13,386
3,869
i7,255
270
81
351
0
351
To/(From) Reserves
Reserves
Rate Stabilization
Other Reserves
Total
2,070
9,547
854
10,401
(1,493)
8,029
879
8,908
(1,844)
7,678
879
8,557
(351)
(351)
0
(351)
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
3,967
5,951
7,935
Revenues
Customer revenues
Reappropriations / encumbrances
Total Revenues
Operating Expenses
Payments to PASCO
Other expenses
Total operating expenses
Capital expenses
Total Expenses
To/(From) Reserves
Reserves
Rate Stabilization
Water Resources Board
Total
Exhibit B
Refuse Fund Summary
(000’s)
Actual
FY 98-99
Adjusted
Budget
FY 99-00
22,428
2,356
24,784
7,169
13,595
20,764
2,068
22,832
1,952
7,923
590
8,513
Midyear
Projected
Budget
FY 99-00 Difference
22,094
2,263
24,357
22,429
2,263
24,692
335
0
335
7,530
16,348
23,878
1,980
25,858
(1,501)
7,530
15,989
23,519
1,980
25,499
(807)
0
(360)
(360)
0
(360)
695
6,422
590
7,012
7,117
590
7,707
695
0
695
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
1,862
2,794
3,725
Revenues
Exhibit B
Wastewater Collection Fund Summary
(ooo’s)
Midyear
Adjusted Projected
Actual Budget Budget
FY 98-99 FY 99-00 FY 99-00 Difference
Customer revenues
Reappropriations / encumbrances
Total Revenues
10,230 11,178 11,178
8,331 8,262 8,262
18,561 19,440 19,440
0
0
Operating Expenses
Sewer treatment expenses
Other expenses
Total operating expenses
Capital expenses
4,275 4,778 4,778
2,710 2,902 2,928
6,985 7,680 7,706
9,289 13,426 13,426
0
26
26
0
Total Expenses 16,274 21,106 21,132 26
To/(From) Reserves 2,287 (1,666) (1,692)(26)
Reserves
Rate Stabilization
Other Reserves
Total
9,678 7,996 7,970 (26)
404 420 420 0
10,082’8,416 8,390 (26)
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
2,691
4,037
5,382
Revenues
Exhibit B
Wastewater Treatment Fund Summary
(O0O’s)
Midyear
Adjusted Projected
Actual Budget Budget
FY 98-99 FY 99-00 FY 99-00 Difference
Treatment revenues
Bond Proceeds
Reappropriations / encumbrances
Total Revenues
12,271 13,213 13,213
7,266 --
3,468 9,129 9,129
23,005 22,342 22,342
0
0
0
Operating Expenses
Operating expenses
Total operating expenses
Capital expenses
11,978 12,313 12,332
11,978 12,313 12,332
10,994 9,650 9,650
19
0
0
Total Expenses 22,972 21,963 21,982 19
To/(From) Reserves 33 379 360 (19)
Reserves
Rate Stabilization
Other Reserves
Total
3,372
1,279
4,651
3,663
1,367
5,030
3,644
1,367
5,011
(19)
0
(19)
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
1,893
2,840
3,786
Revenues
Exhibit B
Storm Drainage Fund Summary
(000’s)
Midyear
Adjusted Projected
Actual Budget Budget
FY 98-99 FY 99-00 FY 99-00 Difference
Revenues
Reappropriations / encumbrances
Total Revenues
2,202 2,619 2,665 46
2,664 1,603 1,603 0
4,866 4,222 4,268 46
Operating Expenses
Operating expenses
Total operating expenses
Capital expenses
2,311 2,342 2,361 19
2,311 2,342 2,361 19
2,984 1,998 1,998 0
Total Expenses 5,295 4,340 4,359 19
To/(From) Reserves (429)(118)(91)27
Reserves
Rate Stabilization
Total
91 (118)0 27
91 (118)0 27
FY 99-00 Approved RSR Levels
Minimum
Target
Maximum
N/A
N/A
N/A
Exhibit C
PROJECT DESCRIPTION
This project will fund the expansion and renovation of the computer room on the second floor of City Hall, as well
as improvements needed in the Police Department dispatch center and adjoining equipment room of City Hall.
These improvements will address severe and long-standing overcrowding in the computer room, electrical power
quality problems caused by overextended electrical circuits, and Will include ventilation system modifications, as
well as reconfiguration of the space to create more room for equipment. In addition, funding is included to equip
the renovated room with shelving for proper storage. Improvements for the Level A Communications Dispatch
equipment area will include improved ventilation, a new Uninterruptible Power Supply (UPS) to support
communications equipment, redistribution of loads on generators and hn automatic transfer switch to provide
redundancy for the Computer Aided Dispatch System and the Enhanced Emergency 911 system. Replacement of
the Main Emergency Generators and Building UPS is addressed separately in the Infrastructure Management Plan
and will be completed at a later date.
PROJECT JUSTIFICATION
These improvements are necessary to ensure that electrical and ventilation systems are appropriate for the computer
equipment located at City Hall. Due to expanded public access and use of the City’s web site, employee use of e-
mail, new telephone 911 technology that allows emergency cell phone call reception at the dispatch center, and
improvements called for in the IT Strategic Plan, it is necessary to address electrical capacity deficiencies and
uninterruptible power shortfalls. In addition, in order to correct equipment crowding, an expansion of the current
computer room is necessary. In spring of 1998, a several hundred foot space shortage was identified in the computer
room.. This space shortage places computer equipment at risk and potentially shortens its life span due to the
possibility of overheating. The shortage has since been exacerbated as a result of implementation of
¯recommendations in the IT Strategic Plan, including consolidating the Utilities technology functions into one
Information Technology group, and centralizing all information technology systems in City Hall to ensure they
have sufficient power back up and protection from fire.
FUTURE FINANCIAL REQUIREMENTS
FISCAL YEAR
PY Budget
1999-00
2000-01
2001-02
2002-03
2003-04
AMOUNT
$800,000
COMPONENTS
Improvements to the 2nd floor computer room and the Level A Police
dispatch area, including computer room expansion and shelving on the
2nd floor ($200,000), electrical design, upgrades, and controls on 2nd
floor and Level A ($300,000), Level A design work, air conditioning
and ventilation ($150,000), and a Uninterruptible Power Source for
Level A ($150,000).
Sources of Funding: General Fund with reimbursement from the Utility Funds and the Infrastructure Reserve
FUNDING BY FUND (IN $1,000S)
Infra-
structure
$400
General
Fund
$263
Refuse
Fund
Waste-
Storm water Electric
Drain Fund Treat. Fund Gas Fund Fund
$6 $2 $12 $26 $26
Water Fund
$13
Waste-
water CoIL
Fund
$8
Stanford
$44
IMPACT AND SUPPORT ANALYSIS
Environmental:
Design Elements:
Operating:
Telecommunications:
Ca~goficallyexemptunder Section 15301 of CEQA.
None.
None.
None.
COMPREHENSIVE PLAN
The Comprehensive Plan contains no policies or procedures directly related to this project.
Total
$800
2
Attachment 3
Budget Amendment Ordinances Impacting General Fund Reserves Approved To Date in 1999-00
Balance
Adopted Budget Addition to BSR
Downtown Urban Design Improvements, CIP 19608
Salary and Benefit Increases Relroactive to July 1, 1999 for
Management and Confidential Employees
City Manager Executive Recruitment
Friends of the Palo Alto Library Grant
Arts Council of Santa Clara County Grant
Palo Alto Art Center Foundation Donation
Costof Sound Wall for Tennis Facility at 3005 Middlefield Rd.
IT Strategic Plan
Citizens Options for Public Safety (COPS)
Local Law Enforcement (LLE) Block Grant
Downtown Parking Structure Feasibility Study, CIP 19530
Golf Course Management Agreement
Police Department Table of Organization Change
Animal Services Fees
Midyear Report
($120,349)
($432,200)
($26,000)
($58,000)
($5,407)
($10,000)
($50,0O0)
($250,100)
($135,901)
($26,192)
($308,000)
($34,100)
($10,000)
($1,200)
$o
$58,000
$5,407
$10,000
$60,534
$135,901
$26,192
$103,900
$1,750
$189,566
$20.~91,000
$949,000
($120,349)
($432,200)
($26,000)
$6
$0
$0
($50,000)
$0
$0
$0
($308,0OO)
$69,800
$0
$550
$0
($432,200)
($317,917)
($7,000)
$1,700
BSR Balance After BA 0 "s $20,673,801
Attachment 3
Budget Amendment Ordinances Impacting Utilities Rate Stabilization Reserves Approved To Date in 1999-00
03/15/00
Electric Fund
Estimated Electric Distribution Rate Stabilization Reserve
(RSR) Balance
Customer Information System (CIP 9357)
IT Strategic Plan
Stanford West Underground Extension Project (CIP 9901)
$5,477,000
($255,000)($255,000)
($2,545)($2,545)
($120,000)($120,000)
Midyear Report
Total BAOs
RSR Balance After BAO’s
Electric Fund
Estimated Electric Supply Rate Stabilization Reserve (RSR
Balance
IT Strategic Plan
Midyear Report
($567,500)($567,500)
($945,045)$0 ($945,045)
$4,531,955
$19,945,000
($31,207)($31,207)
($4,213)
($4,213)
($51,666)
Total BAOs
RSR Balance After BAO’s
Gas Fund.
($31,207)$0 ($31,207)
$19,913,793
Estimated Gas Distribution Rate Stabilization Reserve
(RSR) Balance
Customer Information System (CIP 9357)
IT Strategic Plan
Midyear Report
Total BAOs
RSR Balance After BAO’s
Gas Fund
$5,994,000
($63,750)($63,750)
($9,838)($9,838)
($103,066)($103,066)
($176,654)$0 ($176,654)
$5,817,346
Estimated Gas Supply Rate Stabilization Reserve (RSR)
Balance
IT Strategic Plan
Midyear Report
Total BAOs
RSR Balance After BAO’s
$5,311,000
($7,137)($7,137)
($562,000)($562,000)
($569,137)$0 ($569,137)
$4,741,863
($51,666)
($16,284)
($16,284)
($11,812)
($11,812)
Attachment 3
Budget Amendment Ordinances Impacting Utilities Rate Stabilization Reserves Approved To Date in 1999-00
03/14/00
Refuse Fund
Estimated Refuse Rate Stabilization Reserve (RSR)
Balance
Residential Mix Paper Curbside Recycling Program
Customer Information System (CIP 9357)
IT Strategic Plan
Midyear Report
$6,733,000
($265,000)($265,000) TBD
($42,500)($42,500)
($2,796)($2,796)($4,689)
$694,500 $694,500
Total BAOs $384,204 $0 "$384,204 ($4,689)
RSR Balance After BAO’s $7,117,204
W~tew~er cohe~ffon Fund
Estimated WWC Rate Stabilization Reserve (RSR) Balance
Customer Information System (CIP 9357)
IT Strategic Plan
System Rehabilitation/Augmentation
Midyear Report
$8,052,000
($21,250)($21,250)
($6,719)($6,719)
($28,000)($28,000)
($25,960)($25,960)
($11,111)
Total BAOs ($81,929)$0 ($81,929)($11,11t)
RSR Balance After BA O’s $7,970,071
Estimated WWT Rate Stabilization Reserve (RSR) Balance
IT Strategic Plan
Midyear Report
$3,668,000
($5,157)($5,157)
($6,740)($18,740)
Total BAOs ($11,897)$0 ($23,897)
RSR Balance After BA O’s $3,644,103
($8,649)
($8,649)
Estimated Water Rate Stabilization Reserve (RSR) Balance
Customer Information System (CIP 9357)
IT Strategic Plan
Midyear Report
$8,084,000
($42,500)($42,500)
($11,722)($11,722)
($351,000)($351,000)
Total BAOs ($405,222)$0 ($405,222)
RSR Balance After BA O’s $7,678,778
($19,387)
($19,387)
Attachment. 3
Budget Amendment Ordinances Impacting Utilities Rate Stabilization Reserves Approved To Date in 1999-00
03/14/00
Storm Drainage Fund
Estimated Storm Drainage Stabilization Reserve (RSR) Balance
Midyear Report
($27,000)
$27,000 $27,000
RSR Balance After BAO’s $0
Attachment 4
Per Capita Revenue
Per Capita Expenditures
Warning Trend
Decrease or Flat
Increase
Palo Alto Five-Year Historical Trend
Increased steadily in real terms between
1995 and 1998, reflecting strong economic
growth. Declined slightly in 1999. Worth
monitoring.
Stable between 1995-97 but increased
significantly in 1998 due to new City
services associated with economic growth.
Sales Tax Revenue Decrease
Should be monitored. Sales tax receipts
fluctuated between increases and decreases.
In constant $, declined slightly in 1999.
Employee Per Capita Increase Stable with minor variations.
Discretionary Fund Balances Decrease
Increased steadily in dollar terms but
maintains a steady 20% range as a ratio of
total operating fund.
Long Term Debt Increase
Population Increase/Decrease
City’s direct debt gradually decreased from
1995 to 1998. In 1999, the City’s GO bond
obligations increased by $6.7 million due
to bond financing for the Golf Course
improvements.
Palo Alto’s population stays fairly stable
with minor changes.
Assessed Value Decrease
Assessed value after slow growth and a
decline in 1997 has finally increased by
about 4-5% each year for 1998 and 1999.
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3/14/002:53 PMMidYear9900chart narratives-2new.xlsl 1. Financial Factors
Attachment 4
Operating Transfers
In
14%Other Reveneus
10%
Rental Income
10%
Sabs Taxes
Propedy Taxes
9%
Utility Users Tax
6%
Transient OccupancyCharges to Service Fees Other’TaxOther Funds and Permits Fines & Penalties 6%9%9%7%
* This indicator illustrates City ofPalo Alto’s diverse revenue base.
* Sales tax is the largest single source of revenue to the City, it constitutes
about 20% of the total in 1998-99.
*Other major revenues are Property Tax, Transient Occupancy Tax, Utility Users Tax, Service
Fees and Permits. Each averaging less than 10% of the total.
*The City does not rely heavily on one single revenue source and thus is less affected by
economic fluctuations.
The average sales & property tax as a percentage of all GF revenues and transfers for
neighboring cities surveyed in 1998 was 43.5%. At that time Palo Alto’s percentage was 30.9%.
Presently Palo Alto’s percentage is about 29.3%. This decline can be attributable to increases in
other taxes, such as the TOT.
*Sales and Property taxes per capita for the neighboring cities surveyed in 1998 was $397. Palo Alto’s
ratio was $470 in 1998 but has subsequently increased to $486 in 1999.
Page 2
MidYear9900chart narratives-2new.xls 2. Revenues by Source
Attachment 4
$350
$250
$2OO
Major Revenues - Per Capita 1995 -1999
1~5 1996 1~7 1~8 1~9
*Between 1995 and 1999, and after adjusting for inflation, Sales Tax/per capita have fluctuated
from a low of $285 per capita, to a high of $344 in 1998, and finally ended with $330 in 1999.
As sales tax is sensitive to the economy, consumer and business to business purchasing behavior,
recent developments in intemet sales may affect this tax. Additionally, significant amounts of
sales are made by non-residents and thus per capita revenue may appear higher than cities with
mostly local resident activities.
*Historically, Property Tax has been fairly stable and grew with assessed valuation. Recently the
strong economy and housing market have contributed to the real growth in this areas. In
addition to inflation, property tax/per capita had a healthy increase of about 11% in 1998, and
another 3% in 1999. This is after a decline of about 9% in 1997. Per capita tax in 1999 was about
$156.
* UUT per capita was at $106 in 1995, but remained fairly stable at $99 in 1998 and 1999.
*Of the four major tax categories, the strongest growth was in the TOT and is expected to perform
well, reflecting Palo Alto’s attractiveness as a destinations, proximity to Stanford University
and as the heart of Silicon Valley. A strong 59% per capita growth was realized between 1995 and 1999.
Page 3
3/14/002:17 PMMidYear9900chart narratives-2new.xls5. Maior RevenuesGraph
Attachment 4
Major Revenues ($000s) 1995 - 1999
$25,000-
$1o, ooo-
1995
1996
1997
1998
1999
* This graph provides the five year historic trend of City’s four largest tax categories:
Sales Tax
Property Tax
Utility Usei’s Tax (U-.IT)
Transient Occupancy Tax (TOT)
Strong performances in Sales, Transient Occupancy and Property Taxes appear to reflect
recent regional and local economic growth. But in constant dollars, after adjusting for
inflation Sales Tax receipts for 1999 have fallen behind that of 1998. Significant
real growths were made in TOT while UUT and Property Tax had moderate increases after
adjusting for inflation.
Page 4
3/14/002:31 PMMidYear9900chart narratives-2new.xls5. Major RevenuesGraph
Attachment 4
Public Works
13%
Non.Departmental Administrative
6%Departments
Police
20%
Planning 16%Community Ser~
7%21%
J
*. This graph demonstrates the City’s expenditures by functional and service area.
*. Over one-third of the City’s General Fund expenditures is for~ublic safety (Police
and Fire Services).
*. Community Services with 21%, is the single largest expenditure category.
* Of the Community Services, the City provides Library Service (20%), Recreational Services
( 15 %), Park Services (17 %), Open Space & Science Service (11%), Golf Services (11%),
and Cubberly Community Center (6%).
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3/14/002:22 PM MidYear9900chart narratives-2new.xls 3. Expenditures by Function
Attachment 4
Office Equipment
6%
Apparel Stores
6%
SALES TAX BY SOURCE 1999
Total $17.9 Million
All Others Department Stores
12%17%
Electronic
Equipment
5%
Food Markets
2%
Furniture/
Appliance
7%Business
Services
5%
Miscellaneous ’Restaurants
Retail 12%
11%
Auto Sales. New
13%
Light Industries
4%
The graph shows City of Palo Alto’s different sales tax revenue sources.
Sales tax is a major City revenue source, and department store sales is the
largest single source of sales tax. Miscellaneous retail also contributes significantly to the tax base.
In total, retail accounts for about 28% of all sales tax revenues.
Restaurant sales are another important revenue source. Palo Alto’s attraction as a destination for shopping,
restaurants, proximity to a major university and as the heart of Silicon Valley have all benefited the
sales tax base.
In recent years, a strong contributor to sales tax has been new auto sales, total sales grew by 33% between
the third quarters of 1997 and 1999.
Sales tax receipts are sensitive to the economy and electronic sales in the business to business component
is particularly so. It is considered a very volatile sector, affected by product cycle and severe competition.
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3/14/002:35 PMMidYear9900chart narratives-2new.xls6. City’s Sales Tax 1999
Attachment 4
*Personnel costs are a major portion of a local government’s operating budget. Changes
in the number of employees per capita are a measure of expenditures, productivity and
labor utilization.
* Palo Alto’s employee per ~apita count has been held fairly constant for the last five years,
with only slight variations.
* A point worth noting is that Palo Alto’s day population is significantly larger than its local
residents. Not only does the City provide services to its residents, it also
provides and maintain services to the commuting population. This needs to be taken
into consideration in assessing and comparing the employee per capita count with other
cities.
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3/14/002:37 PM MidYear9900chart narratives-2new.xls8. Employee Per Capita
Attachment 4
$1,700
$1,600
$1,5oo
.$1,400
$1,300
$1,2oo
Revenues & Expenditures Per Capita
1995 1996 1997 1998 1999
Per Capita--~-Expenditures Per CapitaI
*These indicators examine changes in revenues and expenditures relative to changes in population size.
*As population increases it would be expected that revenues and the need for services (expenditures) would increase
proportionately.
*In constant dollars, Palo Alto’s overall revenue per capita increased steadily between 1995-98 reflecting economic growth, but total
revenues per capita declined slightly in 1999.
In constant dollars, Palo Alto’s expenditures per capita stayed relatively.stable between 1995-97 but increased significantly in 1998 and 1999.
As observed from the data and trend ,the City of Palo Alto experienced expenditures close to the level of the revenues in 1995. But
starting in 1996 the gap began to widen, revenues grew at a faster pace than expenditures until 1998 when expenditures for services rose
quickly and nearly equaled revenues in 1999.
Palo Alto is a unique City with a relatively constant local population base, with increasing number of commuters who work in the City during
the day. Such daily inflow would also require additional public service such as police, fire and community services, etc. While economic
prosperity brings additional revenues to the City, the demand for services and implementation often lags but would eventually catch up.
The recent trend and pace of expenditure growth & revenue decline in constant $ is worth monitoring
Page 8
3/14/002.44 PMMIdYear9900chart narratnte~2new,xlsl Rev & Exp
Attachment 4
*The total bonded debt per capita for Palo Alto more than doubled in 1997
over that of a year ago. This’is due to the new bond financing for the Palo Alto
Unified School District.
* Based on a 1998 survey of neighboring cities, the average general fund debt outstanding
per capita at time was $256. Palo Alto’s current debt per capita of $217 is still
below the average.
* From the same survey, total taxpayei direct and overlapping debt outstanding per capita for
all cities surveyed was $1,474 ( including Palo Alto), and for neighboring cities only (not including Palo Alto)
was $1,212 while the City had $3,302. Presently the City’s debt burden per capita is at $3,412.
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3/14/002:47 PM MidYear9900chart narratives-2new.xls7. Bonded Debt per Capita