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HomeMy WebLinkAbout2000-12-12 City CouncilTO: ATTENTION: City of Palo Alto CRy Manager’s Report HONORABLE CITY COUNCIL ~ FINANCE COMMITTE FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE:DECEMBER 12, 2000 CMR: 443:00 SUBJECT:ORDINANCE CLOSING THE 1999-00 FISCAL YEAR, INCLUDING REAPPROPRIATION RE QUE ST S, COMPLETED CAPITAL IMPROVEMENT PROJECTS, AND THE YEAR END PERFORMANCE HIGHLIGHTS REPORT RECOMMENDATION Staff recommends that the Finance Committee review and forward the attached ordinance and associated exhibits to the City Council for its approval to close the 1999-00 Budget and its authorization to re-appropriate 1999-00 funds into the 2000-01 Budget (Exhibit A), close completed capital improvement projects (Exhibit B) and transfer remaining balances to the appropriate reserves (Exhibits C & D for General Fund and Exhibits E & F for Enterprise Funds). BACKGROUND Exhibit C and Exhibit E of the budget-closing ordinance summarize financial results for the fiscal year 1999-00 for the General Fund and Ent.erprise Funds respectively. They provide an analysis of the performance of these funds in comparison to the Budget as adopted and adjusted by Council throughout the fiscal year. The result of net operations is explained in terms of changes to the various fund reserves authorized by Council. The economic trend and financial performance analysis that has been attached to this CMR in prior years is now included as a supplement to the Comprehensive Annual Financial Report, which is attached as Exhibit G. DISCUSSION The City’s financial position remains one of health and strength, with the General Fund reporting a net operating surplus of $6.6 million before the use of reserves to fund the PAMF/SOFA acquisition. This performance is primarily due to revenues exceeding budget and it should be noted that, for the second year in succession, departments CMR:443:00 Page 1 of 3 obligated nearly 100 percent of their budgets. The Rate Stabilization Reserves (RSRs) for all enterprise funds combined increased $2.3 million and the balances exceed guidelines. This result is down from last’s year’s by $7.6 million, primarily due to the $5.2 million reduction in the Gas Fund RSR related to the unprecedented rise in gas supply prices. These results, while still positive, show a declining rate of growth from prior years and reflect a leveling off of the current economic expansion. With the demand for capital spending for the Infrastructure Management Plan and also for a continued high level of services, the City should take a conservative approach to its finances and carefully review ¯ and prioritize expenditure requests. RESOURCE IMPACT Adoption of the attached budget-closing ordinance allows for reappropriation and carryover of funding from the 1999-00 Budget for the completion of specific operating budget programs or projects in the current fiscal year. In addition, the closing of completed capital improvement project balances to the Budget Stabilization Reserve (BSR) releases unspent monies for further appropriation by Council. The General Fund BSR has been capped in accordance with Council policy and the remaining surplus has been utilized to fund the Reserves for Emergencies to its Council-approved target. Due to use of the reserve for the PAMF/SOFA acquisition, there is a small decrease in the General Fund Infrastructure Reserve this year. Exhibit D and Exhibit F provide the balance changes for all reserve categories for the General Fund and the Enterprise Funds. POLICY IMPLICATIONS This recommendation is consistent with existing policies. ENVIRONMENTAL REVIEW The action recommended is not Environmental Quality Act. a project for the purposes of the California ATTACHMENT Attachment A: Budget Closing Ordinance body text Exhibit A - 1999-00 Re-Appropriation Requests Exhibit B - Capital Improvement Projects Completed & Closed in 1999-00 Exhibit C- General Fund Summary Exhibit D - General Fund Reserve Summary Exhibit E - Enterprise Summaries Exhibit F - Enterprise Reserve Summary Exhibit G - Performance Highlights Report PREPARED BY:Stanley Arend, Accounting Manager Lalo Perez, Budget Director CMR:443:00 Page 2 of 3 DEPARTMENT HEAD APPROVAL: ¯ CITY MANAGER APPROVAL: HARRISON Assistant City Manager CMR:443:00 Page 3 of 3 ATTACHMENT A ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AUTHORIZING CLOSING OF THE BUDGET FOR FISCAL YEAR 1999-00 WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto and as set forth iD Section 2.28.070 of the Palo Alto Municipal Code, the Council on June 19, 1999 did adopt a budget for fiscal year 1999-00; and WHEREAS, fiscal year 1999-00. has ended and the financial results, although subject to post-audit adjustment, are now available and are herewith reported in summarized financial Exhibits ~A" and "B" and ~C" and ~D" prepared by the Director, Administrative Services, which are attached hereto, and by reference made a part hereof; and WHEREAS, pursuant to Section 2.28.080 of the Palo Alto Municipal Code, the City Manager did amend the budgetary accounts of the City of Palo Alto to reflect: (A) Additional appropriations authorized by ordinance of the City Council. (B) Amendments to employee compensation plans adopted by the City Council. (C) Transfers of appropriations from the contingent account as authorized by the City Manager. (D) Redistribution of appropriations between functional areas major activities, and objects within various departments as authorized by the City Manager. (E) Fiscal year 1999-00 appropriations which on July i, 2000 were encumbered by properly executed, but uncompleted, purchase orders or contracts; and WHEREAS, fiscal year 1999-00 appropriations in certain departments and categories as .shown on the attached Exhibit "A", while not encumbered by purchase order or contract, at year end are nevertheless recommended for reappropriation in the fiscal year 2000-01 budget. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION I. The fiscal year 1999-00 encumbered balances for the departments and categories shown on Exhibit ~C" shall be carried forward and reappropriated to those departments and categories in the fiscal year 2000-01 budget. SECTION 2. The City Manager is further authorized directed: and (A) To’close the fiscal year 1999-00 budget accounts in all funds and departments and, as required by the Charter of the City of Palo Alto, to make such interdepartmental transfers in the 1999- 00 budget as adopted or amended by ordinance of the Council. (B) To close various completed Capital Improvement Projects as shown in Exhibit ~B" and move the balances into the respective reserve funds indicated in Exhibit ~B". (C) To establish reserves as shown in Exhibit "D" and "E" for all Funds as necessary to provide for: (I) A reserve for encumbrances and reappropriations in the various funds, the purpose of which is to carry forward and continue in effect the unexpended balance of appropriations for: (a) Fiscal year 1999-00 departmental expenditures which were authorized to be carried forward pursuant to Section 1 above. (2) Reserves for Advances to Other Funds and for Stores Inventory in accordance with ordinance and policy guidelines. (3) A reserve for general contingencies of such amount that the City Council has approved. (4) Reserves for utilities plant replacement, rate stabilization, and other reserves in accordance with Charter and policy guidelines. (D) To fund the Budget Stabilization Reserve in accordance with the General Fund Reserves Policy adopted by the City Council. SECTION 3. The sum of Two Hundred Seventy Seven Thousand Nine Hundred Thirty Three Dollars ($277,933) is hereby transferred from the Vehicle Maintenance Retained Earnings to the Vehicle Maintenance and Replacement Fund. This. transfer will reduce the balance in the Vehicle Maintenance Retained Earnings to $7,032,874. SECTION 4. Upon completion of the independent audit, detailed financial statements reflecting the changes made by Sections i, 2, and 3 of this ordinance, shall be published as part of the annua! financial report of the City as required by Article III, Section 16, of the Charter of the City of Palo Alto and in accordance with generally accepted accounting principles. SECTION 5. As specified in Section 2.28.080(a) of the Palo Alto Municipa! Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 6. The Council of the City of Palo Alto hereby finds that the enactment of this ordinance is not a project under the California Environmental Quality Act and, therefore, no enwironmental impact assessment is necessary. SECTION 7.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 APPROVED AS TO FORM: Mayor City Manager Senior Asst. City Attorney Director Services of Administrative Exhibit A 1999-00 RE-APPROPRIATION REQUESTS Total Recommended $474,152 $50,000 $119,945 $563,000 $1,207,097 ’ ~ ~ ’~ ~~CommentslReasonfor not Comp!etjpg in’ ’ Administrative Services Department :~ ~ -~.-~ : ,~ ~ : ~ i: ~ _ . ,, ~ $6~,486 Improvements to University Avenue Depot, Golf Course, Pro-Shop, and Golf Course restaurant, and sound wall improvements ($50,000). More time is needed to complete projects. Community Services Department-¯ " = $20,000 Carpeting for Cubberley Theater.Purchase order and signed contract were not executed by June 30 because only one bid was received and it was over budget. Human Resources Department $30,000 retain consultant services for the new employee orientation project. $4,000 To retain consultant services for the new " employee orientation project. $20,000 To retain a consultant for salary survey and negotiations data collection. There was a delay in obtaining a consultant. Scope of work is currently being developed and consultant list is completed. There was a delay in obtaining a consultant. Scope of work is currently being developed and consultant list is completed. Current provider discontinued salary surveys. New contractor is being sought. Project was also delayed to coincide with the hiring of the new City Manager. 1999-00 RE-APPROPRIATION REQUESTS $129,000 Consultants and contractors to facilitate $34,000 $39,000 $14,266 $20,000 $35,400 $15,500 $18,500 processing planning applications and completing planning projects. Contract services for local shuttle service. Plan check and inspection services for Stanford projects. Completion of the zoning ordinance in 2 rather than 3 years will require a greater level of fiscal resources tha~ are available in one year. The department hopes to maximize the availability of funding from 99-00 and 00 01 to meet its goals. The contractor providing shuttle service has not invoiced the City. Funding will be needed in 00-01 when invoices are finally received. There will be an ongoing need for these funds as Stanford projects continue in 00-01. Anticipating this, temporary personnel were hired in 99-00 so that these funds could be used in 00-01. Program expense for the Commute This project was delayed because staff was not hired Coordination Pilot Project.until later in the fiscal year. Zoning ordinance work plan.Work plan is scheduled for completion in the first quarter of 00-01. Expenses used to reimburse the Santa County is delayed in billing the City. Funding is Clara County Congestion Management needed to process invoices as they arrive. program. The second workshop conducted by the Advisory Group is delayed and scheduled for July 2000. Expenses related to the R-1 Advisory Group, which develops guidelines for neighborhood compatibility and replacement homes. Printing services.Year end savings are needed to support the Zoning Ordinance Update initiative, which will require significant expense related to duplication of materials. Public Works Department $12,000 $20,000 Purchase o~’Th’~ater cabin’~t and step lighting. Redundant fiber connection at the MSC RFQ’s were sent out prior to June 30, 2000 but contracts could not be executed before the end of the fiscal year. Department was unaware that fiber optics could be utilized from an existing connection at the MSC until late in the fiscal year. Utilities Department - Administration ¯ $50,000 Contract web design and implementation services needed to complete a large-scale site redesign of the Utilities web page. Changes is scope continued through the year. This resulted in changes to the contract development process, which delayed the project. 1999-00 RE-APPROPRIATION REQUESTS $563,000 Miscellaneous vehicle and equipment purohases and outfitting services. The vehicle maintenance audit coupled with high volume of workload left staff with less time to complete vehicle replacement projects. $28,400 Bikeway system improvements. (PLA 19524) Project was delayed pending the completion of the citywide Bicycle Master Plan, due in Fall 2000. Public Works ¯ " ~91 54~ ............City facility water backflow 19407) Existing workload constraints made this project a lower priority than other assignments. ***Note To General Fund Reappropriations: The Comprehensive Annual Financial Report shows $612,000 in General Fund reappropriations. The $138,000 difference from the $474,000 shown here is a capital project carry- forward for the Community Center that does not require Council action. Exhibit B City of Palo Alto CAPITAL IMPROVEMENT PROGRAM PROJECTS Completed and Closed in 1999-00 PROJECT NUMBER GeneralFund 19519 19706 19802 19810 19811 19919 WaterFund 0005 Electric Fund 0007 * 0012 9510 Gas Fund 9906 9909 PROJECT TITLE Mulit-line Telephone System Replacement Facilities Walkway Improvement Sailing Platform Removal New Vehicles New Equipment Purchase Top Dressing Tractor Total Water Receiving Station Total East Meadow Switch Replacement New Vehicles Substation Transformer Replacement Total Vacuum Mud Disposal Trailer Gas Meter Prover Total PROJECT BALANCE 5,873 1,060 11,926 178 1,431 22,461 $ 42,929 90,000 $ 9O,0OO 280,000" 16,537 40O $ 296,937 188 6,517 $ 6,705 * Projects are closed No expenditures were incurred EXHIBIT C Revenues Property Taxes Sales Taxes Utility Users Tax Transient Occupancy Tax Other taxes, fines & penalties Service fees and permits Charges to Other Funds Rental Income Other Revenues Total Revenues Add: Operating Transfers In Prior Year Encum & Reapprc 1999-00 Adjusted Budget ¯10,057 20,851 5,775 7,600 7,522 10,500 8,979 9,989 10,932 12,993 5,428 T~tai Source of,Funds’ i i ~]:(,, ~!0,622 Expenditures Administrative Departments Community Services Fire Planning Police Public Works Non-Departmental PAMF/SOFA Total Expend!ture~ ~ Add: Operating Trans Out Total Use of Funds Net Surpius!(Defieit) 1999-00 1999-00 1999-00 1999-00 CAFR Basis Budgetary Encum+Budgetary Rev/Exp Adjs Reapprop Rev/Exp 10,770 22,867 5,861 8,293 9,096 12,408 517 9,944 11,841 91;597 7,078 n/a n/a n/a n/a n/a n/a n/a n/a n/a 10,770 22,867 5,861 8,293 9,096 12,408 7,595 9,944 11,841 1999-00 Budget Variance 713 2,017 86 693 1,575 1,909 (1,384) (45) 909 12,837 ,104,434- 18,112 15,772 22,076 17,858 15,711 14,512 7,885 6,639 19,106 17,666 12,864 8,827 5,711 6,927 6,917 ii0s,3s ’ 88ao1 9,596 9,605 -’117,978 I’ 97’806~ ’~ ’(%356)! ¯6,628 98;676’, i,] ’6,473 n/a 12,836 5,428 n/a 5,428 ¯ -5,428. : " n/a ,,116,940 580 1,637 17,989 3,021 1,003 21,882 775 421 15,708 (49)988 7,578 1,063 376 19,105 2,810 898 12,535 (1,100)50 5,877 6,917 6,917 ,7,1o0 12,288 12~288 107~589 9,605 117,!94 (253) (156) 0 123 194 3 308 2 330 (166) 793 (9) 784 7,102 CAFR Reconciliation:Current year encumbrance/reappropriations Prior year encumbrance/reappropriations Current year stores emcumbrance adjustment Prior year stores emcumbrance adjustment CAFR Net imcome 12,288 (5,428) 88 (67) 6,628 EXHIBIT D Balance Net From Balance @ 06130/99 Operations @ 06/30/00 CAFR TO Budget Reconciliation: CAFR Fund Balance Less: Encumbrances Reappropriations Adjustment for Stores Operations BudgetaryFund Balance,, :~; -_ ,, ;~-~ 49,137 6,628 55,765 (5,067)(6,978)(12,045) (670)58 (612) 242 39 281 43,642 -~- (253) ~ 43;389 Allocate To Reserves: Budget Stabilization Reserve Reserve For Infrastructure Improvements Notes Receivable Reserve Stores Inventory Reserve Unrealized Investment Gain/Loss Reserve Reserve For Streets & Sidewalks Reserve For Emergencies Adjustment for Stores Operations Budgetary Fund Balance ~ 20;591 (562)20,029 14,666 (768)13,898 479 170 649 1,691 453 2,144 7 (7)0 0 0 0 5,966 422 6,388 242 39 281 ~43,642 ~ -(253),43,389 EXHIBIT E ENTERPRISE SUMMARIES REVENUE Water sales Other revenues Reappropriations /Enc TOTAL REVENUE EXPENSES Purchases Other Expenses TOTAL OPERATING EXPENSE Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES ...., WATI=R,FUND~ ~ 1998-99 Act/Enc/ Reapprop 12,615 926 3,193 ’16,734 4,114 7,050 11,164 3,500 14,664 2 070 1999-00 Adjusted 13,281 1,109 1,021 15,411 5,712 7,754 13,466 3,869 17,335 (1,924) 1999-00 Act/Enc/ Reapprop 14,551 1,163 1,021 16,735 5,711 7,400 13,111 3,640 16,751 (16) $ Variance Favorable (Unfavor.) 1,270 54 0 1,324 1 354 355 229 584 1,908 I ¯’~ELECTRIC FUND, Act/Enc/ Reapprop Actual/Enc. REVENUE Electric retail sales Electric wholesale sales Other revenues Reappropriations /Enc TOTAL REVENUE EXPENSES Purchases NCPA & TANC Debt Svc Other Expenses TOTAL OPERATING EXPENSE Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES 1998-99 Act/Enc/ Reapprop 66,409 5,641 12,292 5,931 90,273 25,478 10,940 25,812 62,230 10,834 73,064 17,209 1999-00 Adjusted 56,364 3,347 14,335 6,546 80,592 24,390 11,391 28,408 64,189 19,666 83,855 (3,263) 56,769 4,582 10,844 6,546 78,741 18,261 11,026 27,965 57,252 18,603 75,855 2,886 $ Variance Favorable (Unfavor.) 4O5 1,235 (3,491) 0 (1,851) 6,129 365 443 6,937 1,063 8,000 6,149 GAS FUND REVENUE Gas retail sales Gas wholesale sales Other revenues Reappropriations / Enc TOTAL REVENUE EXPENSES Pu~hases Other Expenses TOTAL OPERATING EXPENSE Capital Expenses TOTAL EXPENSES TO/(FROM) RESERVES 1998.99 Act/Enc/ Reapprop 17,942 0 1,765 1,772 21,479 10,247 7,739 17,986 3,439 21,425 54 1999-00 Act/Eric/ Adjusted Reapprop Bud.~et Actual/Enc. $ Variance Favorable (Unfavor.) 15,873 16,443 570 0 0 0 1,430 1,372 (58) 993 993 0 18,296 18,808 512 11,596 11,595 1 8,542 8,470 72 20,138 20,065 73 4,026 3,904 122 24,164 23,969 195 (5,868)(5,161)707 WASTEWATER COLLECTION FUND ,,~~i ’, - 1998-99 1999-00 ActJEnc/ Act/Enc/Adjusted Reapprop Reapprop Bud_qet Actual/Enc. REVENUE Revenues Reappropriations /Enc TOTAL REVENUE EXPENSES Sewer Treatment Exp. Operating Expenses TOTAL OPERATING EXPENSE Capital Expenses Principal Payments TOTAL EXPENSES TO/(FROM) RESERVES 10,230 8,331 18,561 4,275 2,523 6,798 9,289 187 16,274 2,287 $ Variance Favorable (Unfavor.) 11,338 11,307 (31) 8,262 8,262 0 19,600 19,569 (31) 4,778 4,390 388 2,945 2,542 403 7,723 6,932 791 13,426 13,569 (143) 43 47 (4) 21,192 20,548 644 (1,592)(979)613 !-_~ ¯¯~: WASTEWATER TREATMENT FUNDI 1998-99 Act/Enc/ Real~l~rol~ REVENUE Operating Revenues 12,271 Bond Proceeds 7,266 Reappropriations / Enc 3,468 Bonded Reappr/Encum 0 TOTAL REVENUE 23,005 EXPENSES Operating Expenses 11,570 TOTAL OPERATING EXPENSE 11,570 Capital Expenses 10,994 Principal Payments 408 TOTAL EXPENSES 22,972 TO/(FROM) RESERVES 33 1999-00 ActJEnc/$ Variance Adjusted Reapprop Favorable ~ActuallEnc.(Unfavor.) 13,213 12,650 (563) 0 0 0 2,246 2,246 0 6,883 6,883 22,342 21,779 (563) 11,899 11,921 (22) 11,899 11,921 (22) 9,650 9,997 (347) 433 298 135 21,982 22,216 (234) 360 (437)(797) I :, ,-¯:REFUSE FUND 1998-99 Act/Enc/ Reapprop REVENUE Revenues 22,428 Reappropdations /Enc 2,356 TOTAL REVENUE 24,784 EXPENSES Payments to PASCO 7,169 Other Expenses 13,595 TOTAL OPERATING EXPENSE 20,764 Capital Expenses 2,068 TOTAL EXPENSES 22,832 TO/(FROM) RESERVES 1,952 1999-00 Adjusted Act/Enc/ Reapprop Actual/Enc. 22,429 2,263 24,692 23,041 2,263 25,304 7,530 15,988 23,518 1,980 25,498 (806) 6,957 14,754 21,711 1,979 23,690 1,614 $ Variance Favorable (Unfavor.) 612 0 612 573 1,234 1,807 1 1,807 2,419’ ~-,, ,’ -¯ ~’,, ,,,~ STORM,, ,DRAINAGEFUND ~,,~, ~" ,, ~ 1998-99 AcUEnc/ ReaDDroD REVENUE Revenues 2,202 Reappropriations / Enc 2,664 Bonded Reappr/Encum 0 Restricted Bond Proceeds 0 TOTAL REVENUE 4,866 EXPENSES Operating Expenses 2,011 TOTAL OPERATING EXPENSE 2,011 Capital Expenses 2,984 Principal Payments 300 TOTAL EXPENSES 5,295 TO/(FROM) RESERVES (429) 1999-00 Act/Eric/$ Variance Adjusted Reapprop Favorable ~Actual/Enc.(Unfavor.) 2,665 2,527 (138) 275 275 0 1,327 1,327 0 0 944 944 4,267 5,073 806 2,060 2,088 (28) 2,060 2,088 (28) 1,998 2,148 (150) 300 200 100 4,358 4,436 (78) (91)637 728 EXHIBIT F ENTERPRISE RESERVE SUMMARY FISCAL YEAR 1998-99 Water Electric Gas WWC WWT Refuse Storm Beginning Reserves 10,401 102,614 To (From) Reserves (16)2,886 ;Ending Reserves ,~_ ~ ~ -.:, ,’,,, ,!0,385 ~,~ ~t05,500 ~ ¯ Budgeted Reserves 8,477 99,351 % of Budget 123%106% 17,730 10,082 4,651 8,513 91 (5,161)(979)(437) 1,614 637 ,12,569’" ’~ ¯9,103 ~ ,~" 4,214 :.’10,127-,,~,,~’~,, ",728 11,862 ,8,490 5,011 7,707 n/a 106%107%84%131%n/a Totals 154,082 (1,456) ",152,626 ~, 140,898 108% FISCAL YEAR 1998-99 Water Electric Gas WWC WWT Refuse Storm Rate stabilization (RSR): General RSR 9,506 8,683 2,847 9,537 728 Supply RSR 28,750 3,832 Distribution RSR 2,632 7,355 Total RSR 9,506 31,382 11,187 8,683 2,847 9,537 728 Emergency plant replace 879 2,198 748 420 1,367 Calaveras 68,013 Underground loan 613 Conservation loan 634 Water Resources Board 590 Shasta rewind loan 64 Central Valley Project 908 Public benefit program 2,322 Ending Reserves "10,385 105,500 12,569 9,103 , i 4,214 10,127 , 728 Totals 31,301 32,582 9,987 73,870 5,612 68,013 613 634 590 64 908 2,322 152,626: ¯RATE STABILIZATION RESERVE FISCAL YEAR 1998-99 Water Electric Gas WWC WWT Refuse Storm Totals Beginning RSR 9,547 24,597 16,381 9,678 3,372 7,923 91 To (From) RSR (41)6,785 (5,194)(995)(525)1,614 637 ,Ending RSR 9,506 31,382~11,187 8,683 ~ 2,847 ¯9,537 728 RSR Maximum 7,935 21,977 6,382 5,382 3,786 3,725 n/a RSR % of Maximum 120%143%175%161%75%256%n/a 71,589 2,281 73,870 49,187 149%