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HomeMy WebLinkAboutStaff Report 14352 City of Palo Alto (ID # 14352) City Council Staff Report Meeting Date: 6/20/2022 Report Type: Action Items City of Palo Alto Page 1 Title: PUBLIC HEARING: Adoption of the Budget Ordinance for Fiscal Year 2023, Including the Operating and Capital Budgets, Table of Organization, and Municipal Fee Schedule; Acceptance of Updates to the Capital Improvement Plan and Sustainability/Climate Action Plan, and the Retiree Healthcare Actuarial Report; and Approval of Contributions for Retiree Healthcare Benefits From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that the City Council: 1. Adopt the Fiscal Year 2022 Budget Ordinance (Attachment A), which includes: a. City Manager’s Fiscal Year 2023 Proposed Operating and Capital Budgets, previously distributed at the May 2nd City Council Meeting (Attachment A, Exhibit 1) b. Amendments to the City Manager’s Fiscal Year 2023 Proposed Operating Budget (Attachment A, Exhibit 2) c. Amendments to the City Manager’s Fiscal Year 2023 Proposed Capital Budget (Attachment A, Exhibit 3) d. Centralized Allocation Amendments to the City Manager’s Fiscal Year 2023 Proposed Operating and Capital Budgets (Attachment A, Exhibit 4) e. Fiscal Year 2023 City Table of Organization (Attachment A, Exhibit 5) f. Fiscal Year 2023 Municipal Fee Changes (Attachment A, Exhibit 6) 2. Accept the Fiscal Year 2023 – 2027 Capital Improvement Plan 3. Accept an Update on the Sustainability and Climate Action Plan (S/CAP) (Attachment B) 4. Accept the June 30, 2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan and approve full funding of the Actuarial Determined Contribution (ADC) for Fiscal Year 2023 using the staff recommended funding level of $16.3 million and affirm the continued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City’s California Employers’ Retiree Benefit Trust (CERBT) Fund (Attachment C). EXECUTIVE SUMMARY This memorandum summarizes changes to the City Manager’s Fiscal Year (FY) 2023 Proposed Budget through Budget Hearings with the Finance Committee and City Council and brings forth refined actions to revise the FY 2023 Proposed Operating and Capital Budgets and FY 2023 Municipal Fee Schedule for final City Council review and adoption. This memorandum includes City of Palo Alto Page 2 the necessary supporting documents for formal adoption by the City Council, such as the FY 2023 Budget Ordinance and the Table of Organization. The FY 2023 Budget sets forth a two-year budget strategy to assist with reinvesting in community services reduced over the last several years. New revenues are needed to ensure sustained services and support evolving community needs, including unfunded priorities such as investing in rail crossings, affordable housing and unhoused services, and more. Refined actions to revise the Proposed Budget, that were part of the May 24th Finance Committee Meeting (CMR 14455), are discussed in the FY 2023 Final Recommended Changes section of this memorandum. All changes to the Proposed Budget tentatively approved by the Finance Committee are detailed for the FY 2023 Operating Budget, by fund and by department, in Attachment A Exhibit 2; FY 2023 Capital Budget adjustments can be found in Attachment A, Exhibit 3; changes to the Table of Organization are discussed later in this memorandum, and an updated Table of Organization is included as Attachment A, Exhibit 5. Links to the meetings with the Finance Committee and the City Council, as well as the memoranda, presentations, and additional information provided for discuss can be found on the City’s website (www.cityofpaloalto.org/budget) under the FY 2023 Budget Process section. The report is organized by the following sections: • Background and Discussion: Summary of FY 2023 budget process and overall balancing strategies organized by fund type, as well as several areas of focus that the Finance Committee wanted to highlight as more information for the City Council. • FY 2023 Final Recommended Changes: A summary of final direction given by the Finance Committee on May 24 and additional recommended technical adjustments organized by fund type. • Table of Organization: A summary of additional changes to the Table of Organization as a result of adjustments made to the proposed budget that was released on May 2, 2022. • Municipal Fee Schedule: A summary of the changes in the Review and Recommendations to Council on the FY 2023 Municipal Fee Schedule Amendments for Incorporation in the FY 2023 Proposed Budget (CMR 14111). • FY 2023 Utility Rate Changes: A brief overview of the rate changes reviewed by the Utilities Advisory Commission and Finance Committee and the final decision the City Council scheduled for June 13, 2022 (CMR 13661); each of these rate changes are included in the FY 2023 budget assumptions. • Review of Referral Items from the Finance Committee: This report details a list of areas that the Finance Committee recommends for additional staff work as a result of discussions from the FY 2023 budget hearings. These are areas identified for deeper analysis or alternative funding strategies to be explored over the course of the next fiscal year. City of Palo Alto Page 3 • Attachments: Attached to this report are a number of documents as outlined and referenced throughout the recommendation language and the report. In addition, links to all the materials presented throughout the budget process to the City Council such as staff reports, At Places Memorandums, presentations made during the budget hearings, and transcripts from City Council Budget Hearings are included. Not included in this staff report is the approval of the FY 2023 Appropriations (GANN) Limit that is required under Article XIIIB to the California State Constitution, as amended by proposition 98 in 1988 and Proposition 111 in 1990. The GANN Limit calculation is transmitted separately for City Council consideration on June 20, 2022 (CMR 14442). The appropriation calculation can be found on the City’s website (www.cityofpaloalto.org/budget) under the FY 2023 Budget Process section. BACKGROUND Per the Municipal Code, the City Manager is charged with proposing a budget that provides a clear and complete financial plan for all City activities proposed for the coming budget cycle, or fiscal year. The FY 2023 Proposed Operating and Capital Budgets were transmitted to the City Council on May 2, 2022. These documents represent the planned expenditures and revenues for FY 2023 for the various fund types that constitute the City’s Budget: General Fund, Capital Fund, Enterprise Funds, Internal Service Funds, Special Revenue Funds, and Debt Service Funds. The budget documents contain an overview section with descriptions of each of these fund types and detailed information of the revenues and expenses for each fund as well as for each individual department. The FY 2023 Proposed Operating and Capital Budgets were presented to the City Council in a study session on May 2, 2022. This study session provided an overview of the budget for review and discussion, including Citywide budget strategies, assumptions used in budget development, and a summary of service impacts on the organization. As part of this discussion, the City Council provided guidance to the Finance Committee for their review of the budget documents during hearings on May 10, 11, and 24. The Finance Committee review of operating and capital budgets is structured around public hearings conducted prior to the City Council adoption to complete a detailed review of the budget documents and to incorporate opportunities for community input into the decision-making process. These meeting proceedings are organized by service area and include department presentations to highlight areas of emphasis for their respective department and fund(s). The Finance Committee reviews individual budget sections by Department for tentative approval of the budget, potential amendments, and requests for additional information to aid in their review. At the conclusion of these hearings (Budget Wrap- up), the Finance Committee is ultimately tasked to provide recommendations to amend the Proposed Operating and Capital Budgets and Municipal Fee Schedule for City Council consideration. These amendments, and additional information recommended for City Council review, are included in this adoption memorandum. City of Palo Alto Page 4 The City Council adoption of the City Manager’s FY 2023 Proposed Operating and Capital Budgets and FY 2023 Municipal Fee Schedule, including the amendments summarized in the Budget Wrap-up Memorandum on May 24, 2022 (CMR 14455), will represent the ratification of the amendments that were approved by vote through the budget hearings. These amendments include all changes to the Municipal Fee Schedule and the Table of Organization. A comprehensive list of meeting materials issued during Finance Committee budget hearings is available on the City website: www.cityofpaloalto.org/budget. In addition to the meetings with the Finance Committee, the City initiated the Fiscal Sustainability Community Conversation to engage the community in the budget development process through solicited online and mailed feedback regarding the City’s fiscal sustainability efforts. Community members could rank their priorities for community services, provide suggestions for additional service priorities, and pose questions about the City’s fiscal sustainability efforts and revenue measures. Additional information can be found on the City website in the Fiscal Sustainability Website section. DISCUSSION The FY 2023 Proposed Budget was presented to the City Council on May 2, 2022 which included a proposed budget balancing strategy that reflects continued cautious optimism, consistent with the conservative financial assumptions used to develop the FY 2022 Adopted Budget and included in the Council-adopted Long-Range Financial Forecast. This budget continues to reflect a recovery period and transition to an endemic state, building on reinvestments that the City Council has made in the current year. It should be noted that the FY 2023 Budget sets forth a two-year funding strategy that uses one-time funds to assist in service reinvestments for fire, police, library, and community services reduced over the last several years. New revenues are needed to ensure sustainable services, to address evolving community needs, and make progress on unfunded needs like grade separation, affordable housing and homeless services. Without new revenue additional service reductions in future years are likely. The FY 2023 Budget recommends reinvestments in ongoing resources for urgent, critical needs for health, safety, and prior City Council direction ($2.6 million, including $1.0 million for Project Homekey) and approximately $4.0 million in priority service reinvestments using American Rescue Plan Act (ARPA) funding and major tax revenues expected to exceed budgeted estimates by approximately $14 million in FY 2022. These one-time funds are recommended to assist in the service reinvestments for a two-year period (through FY 2024). This approach allows the City to continue its ambitious plans to rebuild community services; however, to sustain these reinvestments beyond the limited term, ongoing revenues will be needed. The potential revenue ballot measure to affirm the current transfer of natural gas proceeds would provide ongoing funding needed to sustain these reinvestments in services. A second measure for a new Business Tax to provide stability and a foundation for a more diverse revenue portfolio and begin to address unfunded needs is being considered as well. The FY 2023 Budget was developed based on the FY 2023-2032 Long Range Financial Forecast (LRFF) (CMR 13800) approved by the City Council which outlined a conservative recovery from the City of Palo Alto Page 5 pandemic over a three to five-year period, and more rapid investments in services in the workforce. The FY 2023 Budget ensures that the City continues to proactively fund long term liabilities, begins to phase in capital investments that had been reduced in prior years, and uses one-time resources for limited term priority service investments. Recognizing the continued economic uncertainties in the year ahead, it will be important to closely monitor the City’s financial outlook as new information becomes available and continue to rebalance resources with the pace of recovery. Additionally, the City must contemplate major changes for programs and services such as affordable housing, grade separation, and other initiatives that do not have planned funding sources. In the coming year, the City will continue to engage in community discussion around fiscal sustainability and feedback on service priorities. In parallel, the City Council will continue to discuss and evaluate potential revenue measures for voter consideration for the November 2022 election that could generate new revenues to further restore services to pre-pandemic levels, support investments in the community's future, expand priority services, and build on Palo Alto's services as community needs evolve. General Fund Overall, the City’s General Fund is recommended to have $237.8 million in revenues and $247.5 million in expenses, a balanced budget for FY 2023. A total of $350,000 in expenditures has been added to FY 2023 proposed funding levels to support non-profit programs, explore ownership of Barron Park Alley (Cypress Lane), and align budget estimates for several technical adjustments. Additionally, this change includes staffing resources to support updates made to the Tree Protection Ordinance, approved by the City Council on June 6, 2022 (CMR 14355). Overall, this reflects a $38.3 million, or 15.5 percent, increase compared to the FY 2022 Adopted Budget. This includes an increase from the FY 2023 Proposed Budget of 3 full-time staff (2.00 FTE in the General Fund and 1.00 FTE in Enterprise Funds) and one part-time staff (0.48 FTE in the General Fund), resulting in an overall workforce of 1,017.85 full-time positions (552.81 FTE in the General Fund) and 89.68 FTE part-time positions (63.07 FTE in the General Fund). Budget Stabilization Reserve The FY 2023 Proposed Budget recommended an adjustment to increase the projected FY 2022 Year-End BSR by $14.0 million, from $40.7 million to $54.7 million to reflect higher than anticipated tax revenues. The net impact from FY 2023 Proposed actions reduces this BSR level by $8.9 million, resulting in a projected FY 2023 year-end balance of $45.8 million. At proposed expense levels of $247.2 million, this BSR level was slightly above the 18.5 percent target by $100,000, or $800,000 once adjusted for appropriate reserves. This adjustment reflects the exclusion of the reserve for the two-year funding strategy and has been calculated to avoid unintentional inflation of the BSR. Amendments outlined in this report reduce the projected FY 2023 BSR levels by $21,000, from $45.8 million to $45.7 million. At revised expense levels of $247.2 million, the BSR level is at the City of Palo Alto Page 6 18.5 percent target. Once adjusted for reserves mentioned above, the BSR level is higher than the 18.5 percent target by $715,000, at 18.8 percent. These funds may be allocated at the discretion of the City Council and remain within the 15 to 20 percent range outlined in the City’s BSR policy. Capital Funds The City’s Capital Improvement Plan reflects a $379.5 million FY 2023 budget, and an $821.9 million plan over the five-year CIP (FY 2023-FY 2027). Of this, the Capital Improvement Fund FY 2023 budget reflects expected expense of $88.1 million and $205.5 million over the five-year CIP. Capital Reappropriations The Municipal Code requires City Council authorization to reappropriate funds for capital projects from one fiscal year to the next. The FY 2023 budget process continues this procedure, and the FY 2023 Proposed Capital Budget included approximately $56.0 million in reappropriated funds for project expenditures across all funds. In the time since the FY 2023 Proposed Budget figures, Staff refined the FY 2022 estimated project activity levels and provided further updates to increase the reappropriations by $27.6 million, to $83.6 million across all funds. The additional reappropriation adjustments are summarized in Attachment A, Exhibit 3, along with the other adjustments detailed below. Other Capital Project Adjustments Capital Improvement Fund - Performing Arts Venues Seat Replacement (AC-18000) - Funding in the Performing Arts Venues Seat Replacement (AC-18000) project in FY 2022 ($0.4 million) will be used to award a contract to repair the seats at the Children’s Theater; however, there will not be enough funding to complete repairs at the Lucie Stern Theater. Bids were received for work at the Children’s Theater in May 2022 and based on the estimated work at the Lucie Stern Theater, Staff recommends adding funding of $0.7 million to AC-18000 to replace the seats at the Lucie Stern Theater. Damages to the seats at the Lucie Stern Community Center include: broken springs, loose and missing screws, ripped and stained upholstery, and missing seat numbers. In addition, broken seat mechanisms are limiting accessibility and the replacement seating will also incorporate a more modern ADA compliance design. As directed by the Finance Committee on May 24, additional funding of $50,000 will be programmed in FY 2023 for design work at the Lucie Stern Community Center and $650,000 in FY 2024 to complete construction. - Ramos Park Improvements (PG-14000) - The design for this project is complete and the Community Services Department anticipates bidding this project in Summer 2022. Funding for this project has been diminished in prior years through administrative charges, so staff recommends adjusting this project in FY 2023 to fund the award of the project. As directed by the Finance Committee on May 24, additional funding of $300,000 will be programmed in FY 2023, and the funding will be reimbursed from the Capital Improvement Fund Administration project (AS-10000) so that the Infrastructure Reserve will not be impacted. Electric Fund City of Palo Alto Page 7 - Substation Physical Security (EL-16003) - As directed by the Finance Committee on May 24, the Substation Physical Security Project (EL-16003) will be increased by $2.2 million in FY 2023 from the proposed level of $2.2 million to $4.4 million. The $2.2 million is comprised of $1.1 million reappropriated from FY 2022 and $1.1 million reappropriated from year-end savings in various projects within the Electric fund which were reprioritized and deferred due to staffing shortages ($0.5 million Substation Breaker Replacement EL-17002; $0.6 million Facility Relocation for Caltrain Modernization Project EL-17007). The resulting $4.4 million budget in FY 2023 for EL- 16003 will cover the estimated costs and related staffing expenses to install security walls, perimeter lighting and cameras at all nine Electric Substations. Areas of Focus Recruiting In budget hearings on May 10, May 11, and May 24, the Finance Committee engaged in extended discussions regarding recruitment and retention of City-staff. Recruitment and retention issues have impacts on service levels. As the City anticipates a need to return to more normalized operations, due to recovery from the pandemic, several challenges have emerged such as the current backlog of recruitments, a tight labor market, expiration of labor agreements, inflationary pressures, and other factors. In consideration of these conditions, the Finance Committee has requested to include additional information regarding the recruitment process and timeline, vacancies and active requisitions, and funding and staffing available to support recruitments. The At-Places Memo and its attachments from the May 10 meeting identify current vacancies and respective hiring status. As of May 2022, there are 139.75 vacancies as compared to authorized staffing levels of 976.00, a 14.3 percent vacancy rate. This level of vacancy is higher than the same period in the prior year in which there were 87.15 vacancies as compared to authorized staffing levels of 958.35, a 9.1 percent vacancy rate. A detailed list of full-time (benefitted) positions that are vacant throughout the City is detailed in Attachment B of the At-Places Memo, per the link above. The table below shows the normal process and timeline required to fill a typical full-time City vacancy. Stage Timeline Requisition - This is the stage where a department submits their request to fill a vacant or soon to be vacant position. Requisitions are initiated by the departments and routed for approval through the Office of Management and Budget and finalized by HR. 2-4 weeks Recruitment Plan – Hiring Managers and Recruiters meet in advance of the job posting to map out the strategy to fill the position. This includes determining the type, timing, and duration of the job posting as well as what objective criteria will be used to rank and rate the candidates during the process. 2-4 weeks Exam Plan and Posting – Draft of the job posting is finalized and put into approved templates/formats for publication and the number of review steps is finalized (i.e. phone screenings, panel interviews, etc..) 2-6 weeks City of Palo Alto Page 8 Screen Applications – Recruiters along with subject matter experts from the hiring department review applications and review based on experience, education, and knowledge to determine best qualified candidates who will move on to the selection process. 1-3 weeks Selection – The most qualified applicants are invited to a selection stage based on the size and depth of the candidate pool. This traditionally is made up of at least one panel interview and a final round interview with the Hiring Manager. 1-4 weeks Offer and Hire – This stage includes the conditional offer, negotiation (if any), pre- employment conditions, and onboarding paperwork and processing. The culmination being their New Employee Orientation. 2-4 weeks Currently, the City has 5 staff (4.5 FTE) that are focused on recruitment activities, which include 1.0 Senior Management Analyst, 1.0 Senior Human Resources Representative, 2.0 Human Resource Representatives, and 0.5 Human Resources Technician. Additionally, the FY 2023 Budget includes $400,000 for labor negotiations. The supplemental funding will allow the City to utilize outside expertise to aid in that process and preserve staff capacity to carry out recruitment activities. Pension Policy In the FY 2023 Proposed budget staff set aside a General Fund reserve to begin a phased-in reduction of the assumed discount rate (DR) from 6.2 to 5.3 percent and increase contributions to the City’s proactive pension funding via contributions to a Section 115 Pension Trust Fund (“Pension Trust”). The reserve was $1.3 million, which represents six months at the new DR and is approximately equivalent to an interim DR of 5.8 percent. A DR of 5.3 percent more closely aligns anticipated rate of return with the recent CalPERS Asset Liability Management (ALM) study, which includes a survey of external asset managers and consultants to gain expert projections on expected market returns. Further information is available in the May 24, 2022 Finance Committee Budget Wrap-up memo (CMR 14455). The Finance Committee tentatively approved staff’s proposal to phase in the 5.3 percent DR and directed staff to liquidate the reserve by allocating funds from the reserve into the respective departments so funding could be transmitted to the Pension Trust in FY 2023. The Committee also recommended that Council refer further discussion of the policy of setting the discount rate back to the Finance Committee. To maintain consistency in pension contribution levels among all funds, in addition to the $1.3 million programmed in the General Fund, proportional supplemental pension funding of $0.9 million is programmed in other funds for a citywide total of $2.2 million in FY 2023. These funds materialize in the respective departments and funds as personnel benefit expenses and pass through the General Benefits Fund to the Pension Trust. A detailed list of impacts by department and fund can be found in Attachment A, Exhibit 4. Sustainability and Climate Action Plan S/CAP Overview As discussed during the Finance Committee’s budget hearing on May 10, the Sustainability/Climate Action Plan review was an overlay of budget items included within City of Palo Alto Page 9 individual departments’ budgets, but presented separately to reflect the cross-departmental nature of the S/CAP effort and its status as one of the 2022 Council Priorities. The review included new positions approved by Council during the FY 2022 Mid-year, and new positions and resources recommended in the FY 2023 Budget. Attachment B includes an overview of the functional areas involved in implementing the electrification efforts needed to support the 80 percent greenhouse gas reduction by 2030 goal, and how the staffing and other resources recommended in the FY 2023 budget support these areas and the goal. Bicycle and Pedestrian Status and Next Steps Improvements to the street network and bicycle and pedestrian infrastructure are in progress and in alignment with the 2012 Bicycle and Pedestrian Transportation Plan (BPTP) as resources allow. Some BPTP projects are funded via the Bicycle and Pedestrian Transportation Plan Implementation capital project (PL-04010) while others have been pulled out into their own capital projects or funded out of the Safe Routes to School project (PL-00026) where appropriate. Further information regarding the status of various capital projects (in addition to PL-04010 and PL-00026) related to the overall Bicycle and Pedestrian Plan can be found in the at places memo (CMR 14455) presented to the Finance Committee on May 24, 2022. Grade Separation Investments Cumulative investment from FY 2017 through May 24, 2022 (tracking through the Rail Grade Separation capital project PL-17001) is $4.6 million. Associated funding has been used to: • Identify and recommend alternatives for consideration at four at-grade separation locations • Prepare conceptual plans for various alternatives for grade separation • Perform data collection and conduct studies needed to determine the major impacts at this preliminary evaluation • Community engagement and Outreach efforts in providing information to community • Support Technical and Advisory Groups such as Expanded Community Advisory Panel (XCAP) This project provides engineering support, circulation studies, community engagement efforts, and other subsequent tasks needed to advance the City’s goal of grade separating railroad crossings; involving changing four rail grade crossings and estimated to exceed $1 billion in costs. Information Technology Department Budgeting As technology continues to move toward a software as a service (SaaS) or subscription-based model, expenses are typically considered as part of operating expenses rather than capital expenses. More and more frequently, organizations are moving to an operating expenditure model rather than a capital one, as capital expenses are generally reserved for static investments while operating expenses are intended for fluctuating costs that can be scaled as necessary. City of Palo Alto Page 10 A few examples of services moving from capital to operating are the City’s enterprise resource planning (ERP) software, Amazon Web Services (AWS), laptop replacements, and network infrastructure (e.g., switches, hubs and, wireless access points). FY 2022 FINAL RECOMMENDED CHANGES During the most recent budget meeting on May 24, the Finance Committee addressed several remaining items from the May 10 and 11 meetings, and on June 6 the City Council recommended approval of changes to the City’s Tree Ordinance which included adding several positions in FY 2023. More information about these items is below. General Fund Funding for Barron Park Alley (Cypress Lane) The Finance Committee recommended to appropriate $18,000 to research ownership of Cypress Lane, the alley behind Barron Park. This funding will support staffing and consultant resources as the first step in a three-step process to: 1) confirm current ownership of Cypress Lane; 2) based on the findings in step one, determine how the City could take ownership of Cypress Lane; and 3) if the City takes ownership of the property, repair and maintain Cypress Lane. Staff plans to return to the City Council with the results of step one and recommend necessary actions and funding needs to continue with steps two and three if desired, in FY 2023. Further information is available in the May 24, 2022 Finance Committee Budget Wrap-up memo (CMR 14455, Attachment E). Funding to Youth Community Services (YCS) for the Youth Connectedness Initiative (YCI) The Finance Committee recommended to appropriate an additional $50,000 to provide funding to YCI in FY 2023 to supplement the City’s teen mental health services. The 2017-2019 YCI Impact Report has been provided as Attachment D for additional information regarding prior use of City funding for this program. In addition, the Committee has recommended an ongoing increase of HSRAP funding by $50,000 starting in FY 2024 to be a part of the biennial human service grant award process. Funding for the United Nations Association Film Festival (UNAFF) The Finance Committee recommended to appropriate an additional $20,000 in one-time funding in support of the UNAFF. Historically, the City has provided roughly $10,000 annually over the past several years fiscal years in support of the film festival as well as waived rental fees at the Mitchell Park Community Center. Due to the importance of the film festival to the community, the Committee has proposed an increase in funding for the event. In addition, the Committee requests that the Council discuss the City’s current policies and procedures for funding non-profits as reflected in item #2 on the list of referral items. Funding for the City’s National Citizen Survey (NCS) City of Palo Alto Page 11 The Finance Committee recommended restoring $30,000 in funding to conduct the NCS on an annual instead of bi-annual basis. In FY 2021, the NCS was transitioned from the City Auditor to the City Manager’s Office, and as a cost-saving measure was reduced to being conducted on a biannual basis during odd numbered Fiscal Years. Most departments include NCS survey results as part of performance metrics and the reinstatement of annual surveys will enable the City to receive community feedback more frequently. Funding is currently budgeted for the NCS in FY 2023 and this adjustment will not impact the current budget; however, funding will be included annually beginning in FY 2024. Reduce $1.3 Million Pension Trust Reserve and Allocate Costs Across the City As discussed in the section above, the Finance Committee recommended to liquidate the $1.3 million reserve in the Proposed Budget by allocating funds from the reserve into the respective departments so that funding is transmitted to the City’s Pension Trust in FY 2023. The increased contribution reflects an interim discount rate (DR) of 5.8 percent, which is lower than the City’s current assumption of 6.2 percent. The additional pension contribution expense will be proportional spread across all City departments based on current pensionable payroll liabilities, with those funds being directed to the City’s Pension Reserve, and then ultimately transmitted to the City’s Section 115 Pension Trust Fund. A detailed breakdown of the additional costs by department can be found in Attachment A, Exhibit 4. In addition, the Finance Committee requests that the Council discuss the appropriate level to set the DR for the City’s pension policy as reflected in item #1 on the list of referral items. General Fund Transfer to the Art Fund The Finance Committee approved the staff recommendation to increase the transfer from the General Fund to the Public Art Fund, in compliance with requirements that limit the administrative expenses that are funded through fees (ordinance 5226). This technical alignment was inadvertently excluded from the development of the FY 2023 Proposed Budget. The Public Art Fund was created in FY 2014 to support the City’s Public Art Program. As Public Art expenses have increased, it is necessary to increase the FY 2023 transfer from the General Fund to the Public Art Fund by $14,000 from $170,000 to $184,000. Tree Ordinance Update and Additional Positions On June 6, City Council adopted an ordinance amending Title 8 of the Palo Alto Municipal Code to expand tree protection to include additional protected tree species, revise grounds for tree removal, and make clarifying changes and amending Titles 2, 9, and 18 to make clerical updates (CMR 14355). The ordinance significantly increases the staff resources needed for development plan review, tree removal permit review, violations investigation, and enforcement. To meet those needs, 2.48 positions totaling $332,580 have been added to the FY 2023 Operating Budget, including a 1.0 FTE Project Manager, a 1.0 FTE Building/Planning Technician, and a 0.48 FTE hourly Staff Specialist. In FY 2023, the full cost of the positions will be covered by the General Fund, but staff will add revenue through adjustments during the fiscal year, if possible, and offsetting revenue will be included in the FY 2024 budget process. City of Palo Alto Page 12 Other Funds Other Post-Employment Benefits (OPEB) Actuarial Valuation On June 7, 2022, the Finance Committee unanimously recommended approval of the June 30, 2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan (CMR 14112) included in Attachment C. As part of this report, the Finance Committee recommended the full funding of the Actuarial Determined Contribution (ADC) for FY 2023 and FY 2024, using the staff recommended funding levels, and affirmed the continued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City’s California Employers’ Retiree Benefit Trust (CERBT) Fund. This report is completed biannually to provide an actuarial valuation detailing the latest status of the City of Palo Alto’s Retiree Healthcare plans for employees and retirees. The analysis is used to determine the City’s retiree healthcare liability and the annual ADC to the trust. In addition, the report details funding status, results of assumptions such as discount rate (DR), healthcare plan premiums, and projected future healthcare costs. This action results in a revised FY 2023 funding level of $16.3 million as compared to the $16.9 million in the FY 2023 Proposed Budget, a $600,000 reduction. This funding level is compromised of the ADC of $15.9 million and $0.4 million for retiree healthcare costing of approximately 60 new staff added in the FY 2023 budget. A detailed list of impacts by department and fund can be found in Attachment A, Exhibit 4. Eliminate funding for the Parking Attendant Program The Finance Committee recommended the elimination of FY 2023 funding of $289,972 for the Parking Attendant Program in the University Avenue Parking Permit Fund in recognition that parking demand and revenue have been reduced as compared to pre-pandemic levels. Valet programs are typically in use at Lots R, CC, CW, and S during peak usage as a method to increase garage capacity. This expenditure will be eliminated during FY 2023 and staff will re- evaluate funding needs as part of the FY 2024 budget development. Enterprise Funds Add Staffing to Support Utilities Business Operations and Initiatives The Finance Committee approved the staff recommendation to add 1.00 FTE Principal Utilities Program Manager presented in an at places memo at the May 11 meeting. This staffing provides high level strategic management support across multiple Utilities divisions (Engineering, Operations, Resource Management, Customer Support), and collaborate with other City departments (City Manager, Office of Sustainability, Development Services, Transportation, Public Works) on citywide initiatives such as the Sustainability and Climate Action Plan (S/CAP). TABLE OF ORGANIZATION During budget hearings and in subsequent City Council meetings, the Finance Committee and City Council recommended staffing adjustments in the Infrastructure and Environment service City of Palo Alto Page 13 area. A more detailed description of these actions is included in Attachment A, Exhibit 2, and an updated Table of Organization is included in Attachment A, Exhibit 5: • Add 1.0 Principal Utilities Program Manager to the Utilities Department • Add 1.0 Project Manager, 1.0 Building Planning Technician, and 0.48 FTE Staff Specialist (CMR 14355) for a total of 2.48 FTE to the Public Works Department MUNICIPAL FEE SCHEDULE On May 11, 2022, the Finance Committee reviewed the FY 2023 Proposed Municipal Fee Schedule and recommended approval as outlined in CMR 14111 and further amended by the At Places memorandum released on May 24, 2022 (CMR 14459). Attachment A, Exhibit 6 provides a summary of all recommended changes as reviewed by the City Council on May 11, 2022. The upcoming Planning and Development Services (PDS) fee study has been rescheduled following the summer. All previously unchanged fees PDS fees will be updated to reflect the general rate of increase of 4.6 percent for FY 2023 and further re-evaluated for changes following completion of the fee study. FISCAL YEAR 2023 RATE CHANGES An overview of the rate changes was reviewed and approved by the Utilities Advisory Commission (UAC) and Finance Committee in April 2022. These rate changes are included in the FY 2023 budget assumptions. This section references those changes for informational purposes only; a separate report recommending final rate changes will be considered by the City Council on June 13, 2022 (CMR 13661). • 5% rate change for Electric (recommended by UAC and Finance Committee); • 4.2% CPI increase for Fiber (recommended by UAC and Finance Committee); • 4.0% rate increase for Gas (recommended by UAC and Finance Committee); • 0.0% rate change for Refuse; • 4.2% CPI increase for Stormwater (recommended by UAC and Finance Committee); • 3.0% rate change for Wastewater (recommended by UAC and Finance Committee); and • 8.9% rate change for Water (recommended by UAC and Finance Committee) These rate adjustments reflect the upward pressure on rates as consumption remains below long-term trends as a result of the COVID-19 pandemic. The size and timing of rate adjustments are impacted by current and future revenue requirements to purchase commodities, provide customer service, plan for and invest in capital infrastructure, and maintain adequate reserve levels. The Finance Committee tentatively approved the rate changes listed above including the 5.0 percent increase for Electric rates due to escalating transmission costs and substantial additions to capital investment in the City’s aging electric distribution system in preparation for City of Palo Alto Page 14 sustainability electrification; the 4.2 percent CPI increase for Fiber customers on the EDF-1 rate in accordance with the original dark fiber leasing agreement; 4.2 percent CPI increase for Stormwater, consistent with the 2017 Storm Water Management Fee ballot measure, to keep fund revenues consistent with inflationary cost increases and to provide sufficient funds for planned Stormwater Management capital and operating expenditures; the 4.0 percent increase for Gas to cover the substantial increases in Capital costs and to support regular main replacement; the 3.0 percent increase for Wastewater Collection due to increasing Capital costs in Wastewater Collection and Regional Water Quality Control Plant; and the 8.9 percent increase for Water, which consists of a 4.0 percent distribution increase and a 4.9 percent commodity cost pass-through increase from the San Francisco Public Utilities Commission (SFPUC). Additional information regarding the Water utility rate change and corresponding actions is available in the May 24, 2022 Finance Committee staff report 14455. REVIEW OF REFERRAL ITEMS FROM THE FINANCE COMMITTEE During the Budget Hearings, certain items were approved that require a longer timeline to return to the City Council and are recommended to be placed in the “long-term parking lot.” The list below is reflective of the final referral items from the Budget Hearings that the City Council has directed staff to follow-up with additional work throughout FY 2023. These referrals will need to be prioritized in the context of diminished resources and adverse impacts on service delivery necessitated by continuing constraints that remain as the City begins to move beyond the COVID-19 pandemic. 1. Pension Funding Policy 2. Non-Profit Audit and Future Non-Profit Funding Requests RESOURCE IMPACT This report summarizes and seeks City Council approval of the FY 2023 Operating and Capital Budgets, the supporting fee schedules, and table of organization in order to support the projections and appropriations included. The approval of the City Manager’s FY 2023 Capital and Operating Budget, as recommended to be amended in this report, would result in a projected General Fund Budget Stabilization Reserve of $45.4 million, which is below the City Council recommended level of 18.5 percent by $385,000, at 18.3 percent. The projected changes to the fund balance for all other funds including Enterprise Funds, Internal Services Funds, Special Revenue Funds, and Capital Funds are outlined in Attachment A and accompanying exhibits and impacts to fund balance summarized as follows: Resource Impact (Non-General Funds with Fund Balance Change) Fund Type Fund Name Fund Balance Change Capital Capital Improvement Fund -$6.1M City of Palo Alto Page 15 Cubberley Infrastructure Fund +$0.6M Enterprise Airport Fund -$0.6M Electric Fund -$7.2M Fiber Optic Fund -$0.1M Gas Fund -$2.3M Refuse Fund -$13k Stormwater Management Fund -$0.7M Wastewater Collection Fund -$0.9M Wastewater Treatment Fund -$6.7M Water Fund -$6.3M Internal Service Printing and Mailing Fund -$2k Technology Fund -$57k Vehicle Replacement Fund -$1.5M Workers’ Compensation Fund -$2k Special Revenue California Avenue Parking Permit Fund -$1k Community Development Block Grant Fund -$200 Housing In-Lieu Commercial Fund -$300 Housing In-Lieu Residential Fund -$300 Parks Impact Fee Fund +$19k Public Art Fund +$12k Residential Preferential Parking Permits Fund -$2k University Avenue Parking Permit Fund +$0.3M STAKEHOLDER ENGAGEMENT Fiscal Sustainability Community Conversation Feedback Starting February 15, 2022, the City shared public information as well as solicited online and mailed feedback regarding the City’s fiscal sustainability efforts. Community members could rank their priorities for community services, provide suggestions for additional service priorities, and pose questions about the City’s fiscal sustainability efforts and revenue measures. There were 433 responses as of May 17, 2022 (242 online survey responses and 191 mailed survey responses). The most highly ranked priorities for the survey respondents were: Maintaining basic services; Repairing streets/roads; Investing in community owned assets; Adding public safety services such as police, fire, and emergency medical; and Funding affordable housing and homeless services. This communication has continued to provide updates on the City budget and ballot measure development efforts. ENVIRONMENTAL REVIEW This is not a project under Section 21065 for purposes of the California Environmental Quality Act (CEQA). Attachments: City of Palo Alto Page 16 • Attachment A - FY 2023 Budget Adoption Ordinance • Attachment A, Exhibit 1 - City Manager's Fiscal Year 2023 Proposed Operating & Capital Budgets & Municipal Fee • Attachment A, Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2023 Proposed Operating and Capital Budgets • Attachment A, Exhibit 4 - Central Adjustments in Various Funds • Attachment A, Exhibit 5 - Table of Organization • Attachment A, Exhibit 6 - Fiscal Year 2023 Municipal Fee Changes Attachments: • Attachment A: Fiscal Year 2023 Budget Adoption Ordinance • Attachment A, Exhibit 1: City Manager's Fiscal Year 2023 Proposed Operating & Capital Budgets & Municipal Fee • Attachment A, Exhibit 2 and 3: Operating and Capital Adjustments • Attachment A, Exhibit 4: Central Adjustments in Various Funds • Attachment A, Exhibit 5: Table of Organization • Attachment A, Exhibit 6: Fiscal Year 2023 Municipal Fee Changes • Attachment B: Sustainability and Climate Action Plan (S/CAP) Update • Attachment C: June 30 2021 OPEB Valuation (CMR 14112) • Attachment D - YCI 2017-2019 Impact Report ATTACHMENT A 1 ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2023 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 2023; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 20, 2022, 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 20, 2022, 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 2023: (a) The budget document (Exhibit “1”) containing the proposed operating and capital budgets submitted on May 2, 2022, by the City Manager for Fiscal Year 2022, entitled “City of Palo Alto - City Manager’s Fiscal Year 2023 Proposed Budget” covering General Government Funds, Enterprise Funds, Special Revenue 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 (b) The Amendments to the City Manager’s Fiscal Year 2023 Proposed Budget, attached hereto as Exhibit “2”, Exhibit “3”, and Exhibit “4” and made a part hereof; and (c) Changes and revised pages in the Table of Organization, as displayed on pages 339 through 356 in “Exhibit 1,” and amended in Exhibit “5” made a part hereof; and ATTACHMENT A 2 (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit “6”. 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 2022 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 2022 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2023. 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”, Exhibit “3”, and Exhibit “4” and the Fiscal Year 2022 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 2023. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit “6”. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental 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 & Community Environment 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 ATTACHMENT A 3 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. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 12. 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. INTRODUCED AND PASSED: Enter Date Here AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: _________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: City Attorney City Manager Director of Administrative Services Fiscal Year 2023 City Manager’s Proposed Operating & Capital Budgets and Municipal Fees These documents were originally distributed on May 2, 2022. Printed copies are available upon request for $40 per book (FY 2023 fee). These documents may be viewed at any City of Palo Alto Library or the City’s website: www.cityofpaloalto.org/Departments/Administrative-Services/City- Budget Changes to the Municipal Fee Schedule were distributed in Finance Committee Packet on May 11, 2022. The City Manager’s Staff Report (#14111) can be viewed on the City’s website: https://www.cityofpaloalto.org/files/assets/public/administrative-services/city- budgets/fy2023-city-budget/budget-hearing-related/fy-2023-proposed- municipal-fee-schedule-staff-report.pdf In addition, various at places memorandum and presentations were presented throughout the Finance Committee Hearings in May 2022 to provide additional information. These documents can be found on the City’s budget website under “FY 2023 Budget Process”: www.cityofpaloalto.org/Departments/Administrative- Services/City-Budget ATTACHMENT A, EXHIBIT 1 ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment GENERAL FUND (102 & 103) Administrative  Services Barron Park Alley (Cypress Lane) Consistent with Finance Committee direction at the May 24  meeting, this action provides staffing and consultancy resources  as to confirm ownership of Cypress Lane. Staff will return to the  City Council with these results and necessary actions to continue  exploration of City ownership. ‐$                      18,000$                City Manager's Office National Citizens Survey (NCS) Consistent with Finance Committee direction at the May 24  meeting, this action increases funding by $30,000 to conduct the  NCS on an annual instead of bi‐annual basis. Funding is currently  budgeted for NCS in FY 2023 as this was a year scheduled for the  survey. Ongoing annual funding will be included beginning in FY  2024.  ‐$                       ‐$                      Community Services Youth Community Services (YCS) Youth Connectedness Initiative  (YCI) Consistent with Finance Committee direction at the May 24  meeting, this action provides $50,000 in one‐time funding to YCI  in FY 2023 and provides $50,000 in additional funding to the  HSRAP in FY 2024 on an ongoing basis.      ‐$                      50,000$                Community Services United Nations Association Film Festival (UNAFF) Consistent with Finance Committee direction at the May 24  meeting, this action provide $20,000 in one‐time funding to  provide support to the UNAFF in FY 2023.   ‐$                      20,000$                Non‐Departmental Supplemental Pension Trust Fund Contributions Consistent with Finance Committee direction at the May 24  meeting, this action increases supplemental pension funding from  the previously approved discount rate (DR) of 6.2% to 5.3% to be  phased in over two years. FY 2023 is a transitional year in which  half of the difference is budgeted, which is approximately  equivalent to a 5.8 DR. To execute this direction, this action  allocates funding proportionately to departments that will  materialize as a personnel benefit expense totaling $2.2 million  (General Fund $1.3 million, other funds $0.9 million). General  Fund expenses are offset by the distribution of the $1.3 million  reserve established in the FY 2023 Proposed Budget. A detailed  list of impacts by department and fund can be found in  Attachment A, Exhibit 4. This action passes through the General  Benefits Fund, which centrally collects revenue and transmits  corresponding funding to the Section 115 Pension Trust Fund.  ‐$                      (1,300,000)$         CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment GENERAL FUND (102 & 103) CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Non‐Departmental Transfer from the General Fund to the Public Art Fund Consistent with staff recommendation at the May 24 meeting,  this action increases the transfer from the General Fund to the  Public Art Fund by $14,000 beginning in FY 2023 to comply with  requirements that limit the Public Art Fund administrative costs  that are funded through fees to 20% of the fund's annual expense  budget (Ordinance 5226). ‐$                      14,000$                Public Works Tree Ordinance Update and Additional Positions Consistent with City Council approval at the June 6, 2022 meeting  (CMR 14355), this action adss 1.0 Project Manager, 1.0  Building/Planning Technician, and 0.48 part‐time Staff Specialist  to make clarifying changes and amend Titles 2, 9, and 18 to  expand tree portection to include protected tree species and  revise grounds for tree removal. 332,580$             Various Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting,  this action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can  be found in Attachment A, Exhibit 4.  ‐$                      (87,196)$              Various Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). A  detailed list of impacts by department and fund can be found in  Attachment A, Exhibit 4.  ‐$                      1,300,000$          Various Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                      (326,159)$            Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                      (21,226)$              GENERAL FUND (102 & 103) SUBTOTAL ‐$                       ‐$                      ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment CAPITAL IMPROVEMENT FUNDS CAPITAL IMPROVEMENT FUND (471) Capital Capital Improvement Project Amendments to Proposed  Reappropriations This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. Projects with other recommended  adjustments, as directed by Finance Committe on May 24, are  detailed below. All recommended changes to proposed capital  projects are outlined in Attachment A, Exhibit 3. (18,800)$         6,017,046$         Capital Performing Arts Venues Seat Replacement (AC‐18000) Consistent with Finance Committee direction at the May 24  meeting, this action programs $50,000 for design work at the  Lucie Stern Theater. An additional $650,000 has been  programmed into FY 2024 as part of the 2023‐2027 CIP for the  construction need at the Lucie Stern Theater. ‐$                 50,000$              Capital Ramos Park Improvements (PG‐14000) Consistent with Finance Committee direction at the May 24  meeting, this action programs $300,000 to fund the award of the  Ramos Park Project. The funding will be reimbursed from the  Capital Improvement Fund Administration Project (AS‐10000). ‐$                 300,000$            Capital Capital Improvement Fund Administration (AS‐10000) Consistent with Finance Committee direction at the May 24  meeting, this action reiumburses the programming of $300,000  for the Ramos Park Improvements Project (PG‐14000). ‐$                 (300,000)$           Capital Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 67,790$              CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment CAPITAL IMPROVEMENT FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Capital Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (22,821)$             Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (6,130,815)$       CAPITAL IMPROVEMENT FUND (471) SUBTOTAL (18,800)$         (18,800)$             ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment CAPITAL IMPROVEMENT FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses CUBBERLEY INFRASTRUCTURE FUND (472) Capital Capital Improvement Project Amendments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 (572,400)$           Capital Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 5,089$                 Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 567,311$            CUBBERLEY INFRASTRUCTURE FUND (472) SUBTOTAL ‐$                  ‐$                     ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS AIRPORT FUND (530) Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 533,000$         Public Works Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 9,092$              Public Works Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 9,962$              Public Works Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  ‐$                 (463)$                Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (551,592)$        AIRPORT FUND (530) SUBTOTAL ‐$                  ‐$                  CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses UTILITIES ADMINISTRATION FUND (521) Utilities Supplemental Pension Funding This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  ‐$                 39,654$           Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 6,467$              Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (46,121)$          UTILITIES ADMINISTRATION FUND (521) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ELECTRIC FUND (513 & 523) Capital Capital Improvement Project Adjustments to Proposed  Reappropriations This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. Projects with other recommended  adjustments, as directed by Finance Committe on May 24, are  detailed below. All recommended changes to proposed capital  projects are outlined in Attachment A, Exhibit 3. ‐$                 6,879,000$      Capital Substation Physical Security                                                Consistent with Finance Committee direction at the May 24  meeting, this action programs an additional $2.2 million to the  Substation Physical Security Project in FY 2023. The $2.2 million is  included in the $6.9 million reappropriation amount listed above. ‐$                  ‐$                  Utilities Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 248,691$         Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (57,542)$          ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Utilities Staffing Update for Sustainability and Climate Action Plan  Consistent with staff recommendation at the May 11 meeting, this  action adds 1.0 Principal Utilities Program Manager, a new  classification, to the Utilities Department. This will result in  staffing increases of 0.60 FTE in the Electric Fund, 0.30 FTE in the  Gas Fund, and 0.10 FTE in the Water Fund. The Principal Utilities  Program Manager would be a new job classification which  requires completion of appropriate review including any potential  discussions with bargaining groups. HR approves this new Utilities  classification in concept with expectation that more analysis will  need to be conducted to evaluate impact to other S/CAP  assignments. Amounts estimated for funding levels are for  financial planning purposes only and do not reflect the final  negotiated terms of the proposed classification.  ‐$                 153,924$         Utilities Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  ‐$                 (182)$                Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (7,223,891)$    ELECTRIC FUND (513 & 523) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses FIBER FUND (533) Utilities Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 12,840$           Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (2,264)$            Utilities Fiber Revenue Alignment Consistent with staff recommendation at the May 24 meeting, this  action decreases Fiber revenues by $0.1 million in FY 2023 from  $3.7 to $3.6 million in alignment with the anticipated revenues  from Dark Fiber Licensing Services on the EDF‐1 Rate Schedule  increase based on the annual Consumer Price Index (CPI) of 4.2%.  Commercial fiber optic fees charged under the EDF‐1 Rate  Schedule are adjusted annually in accordance with the CPI, which  is published by the United States Bureau of Labor Statistics. This  adjustment also includes a technical correction to remove revenue  from industrial fiber customers, as there are no longer customers  in this category. (95,919)$          ‐$                  Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (106,495)$        FIBER FUND (533) SUBTOTAL (95,919)$         (95,919)$          ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses GAS FUND (514 & 524) Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 2,073,694$      Utilities Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 95,473$           Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (40,688)$          Utilities Electric Operations Technologist Staff Correction This action is a technical correction to adjust the transaction  reclassifying the SCADA Technologist in the FY 2023 Proposed  Operating Budget. It does not result in any increase or reduction  of expenses nor FTE when combined with the transaction included  in FY 2023 Proposed.  ‐$                 89,648$           ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Utilities Staffing Update for Sustainability and Climate Action Plan  Consistent with staff recommendation at the May 11 meeting, this  action adds 1.0 Principal Utilities Program Manager, a new  classification, to the Utilities Department. This will result in  staffing increases of 0.60 FTE in the Electric Fund, 0.30 FTE in the  Gas Fund, and 0.10 FTE in the Water Fund. The Principal Utilities  Program Manager would be a new job classification which  requires completion of appropriate review including any potential  discussions with bargaining groups. HR approves this new Utilities  classification in concept with expectation that more analysis will  need to be conducted to evaluate impact to other S/CAP  assignments. Amounts estimated for funding levels are for  financial planning purposes only and do not reflect the final  negotiated terms of the proposed classification.  ‐$                 76,962$           Utilities Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  ‐$                 (17)$                  Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (2,295,072)$    GAS FUND (514 & 524) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses REFUSE FUND (525) Public Works Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 26,646$           Public Works Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (13,080)$          Public Works Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  ‐$                 (178)$                Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (13,388)$          REFUSE FUND (525) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses STORMWATER MANAGEMENT FUND (528) Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. Projects with other recommended  adjustments are detailed below. All recommended changes to  proposed capital projects are outlined in Attachment A, Exhibit 3. ‐$                 685,800$         Public Works Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  ‐$                 (256)$                Public Works Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (8,925)$            Public Works Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 25,203$           Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (701,822)$        STORMWATER MANAGEMENT FUND (528) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses WASTEWATER COLLECTION FUND (527) Utilities Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 47,359$           Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (12,075)$          Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 879,688$         Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (914,972)$        WASTEWATER COLLECTION FUND (527) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses WASTEWATER TREATMENT FUND (526) Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 6,587,500$      Public Works Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (58,533)$          Public Works Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 125,246$         Public Works Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  ‐$                 (926)$                Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (6,653,288)$    WASTEWATER TREATMENT FUND (526) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses WATER FUND (522) Capital Capital Improvement Project Adjustments to Proposed This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 3,127,750$      Utilities Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 87,028$           Utilities Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (42,438)$          Utilities Electric Operations Technologist Staff Correction This action is a technical correction to adjust the transaction  reclassifying the SCADA Technologist in the FY 2023 Proposed  Operating Budget. It does not result in any increase or reduction  of expenses nor FTE when combined with the transaction included  in FY 2023 Proposed.  ‐$                 (89,648)$          ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Utilities Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting, this  action reflects a Water rate increase of 8.9% in FY 2023 and  corresponding adjustments. On May 10, 2022 the San Francisco  Public Utilities Commission (SFPUC) approved a wholesale water  commodity rate increase of 15.9%, which will be passed through  to Palo Alto water utility customers. This results in an 8.9%  systemwide average rate increase for water, comprised of the 4%  distribution rate increase plus a water commodity pass‐through  rate increase. The Water Utility’s reserves will be used to smooth  rate increases over several years. To align with the commodity  rate increase, water revenues and corresponding charges will  decrease by $1.7 million from the FY 2023 Proposed amount of  $49.6 to $47.9 million, which results in an approximately $87,000  expense reduction in the General Fund, $90,000 across all funds. A  detailed list of impacts by department and fund can be found in  Attachment A, Exhibit 4. Water commodity purchase expense  levels will increase by $1.5 million from the FY 2023 Proposed  amount of $21.8 to $23.3 million to reflect the wholesale rate  increase. (1,677,205)$   1,501,340$      Utilities Staffing Update for Sustainability and Climate Action Plan  Consistent with staff recommendation at the May 11 meeting, this  action adds 1.0 Principal Utilities Program Manager, a new  classification, to the Utilities Department. This will result in  staffing increases of 0.60 FTE in the Electric Fund, 0.30 FTE in the  Gas Fund, and 0.10 FTE in the Water Fund. The Principal Utilities  Program Manager would be a new job classification which  requires completion of appropriate review including any potential  discussions with bargaining groups. HR approves this new Utilities  classification in concept with expectation that more analysis will  need to be conducted to evaluate impact to other S/CAP  assignments. Amounts estimated for funding levels are for  financial planning purposes only and do not reflect the final  negotiated terms of the proposed classification.  ‐$                 25,654$           Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (6,286,892)$    WATER FUND (522) SUBTOTAL (1,677,205)$   (1,677,205)$    ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CALIFORNIA AVENUE PARKING PERMITS FUND (237) Non‐ Departmental Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting,  this action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can  be found in Attachment A, Exhibit 4.  ‐$                 (59)$                  Non‐ Departmental Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (869)$                Non‐ Departmental Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 1,902$              Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 (974)$                CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL ‐$                  ‐$                  CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND (232) Planning &  Development  Services Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 209$                 Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 (209)$                COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND (232) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses HOUSING IN‐LIEU RESIDENTIAL FUND (233) Planning &  Development  Services Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 313$                 Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 (313)$                HOUSING IN‐LIEU RESIDENTIAL FUND (233) SUBTOTAL ‐$                  ‐$                  HOUSING IN‐LIEU COMMERCIAL FUND (234) Planning &  Development  Services Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 313$                 Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 (313)$                HOUSING IN‐LIEU COMMERCIAL FUND (234) SUBTOTAL ‐$                  ‐$                  PARKS IMPACT FEE FUND (210) Community  Services  Transfer to the Capital Improvement Fund This action reduces the transfer to the Capital Improvement Fund  in FY 2023 by $5,500 for the Dog Park Installation and Renovation  project (PG‐18001) and $13,300 for the Park Restroom  Installation project (PG‐19000). The transfer will occur in FY 2022  to align with project expenditures. ‐$                 (18,800)$          Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 18,800$           PARKS IMPACT FEE FUND (210) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses PUBLIC ART FUND (207) Community  Services  Transfer from the General Fund to the Public Art Fund Consistent with staff recommendation at the May 24 meeting,  this action increases the transfer from the General Fund to the  Public Art Fund by $14,000 beginning in FY 2023 to comply with  requirements that limit the Public Art Fund administrative costs  that are funded through fees to 20% of the fund's annual expense  budget (Ordinance 5226). 14,000$           ‐$                  Community  Services  Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 2,028$              Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 11,972$           PUBLIC ART FUND (207) SUBTOTAL 14,000$          14,000$           ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses RESIDENTIAL PREFERENTIAL PARKING PERMITS FUND (239) Non‐ Departmental Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 3,778$              Non‐ Departmental Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (1,514)$            Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. (2,264)$            RESIDENTIAL PREFERENTIAL PARKING PERMITS FUND (239) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment SPECIAL REVENUE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses UNIVERSITY AVENUE PARKING PERMITS FUND (236) Office Of  Transportation University Avenue Valet Parking Consistent with Finance Committee recommendation at the May  11 meeting, this action eliminates funding for the Parking  Attendant (Valet) Program in FY 2023 in recognition of lower  demand for parking permits and increased capacity in lots and  garages.  ‐$                 (289,972)$        Non‐ Departmental Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (3,650)$            Non‐ Departmental Supplemental Pension Trust Fund Contributions This action executes the FY 2023 Supplemental Pension Trust  Fund Contributions action (General Fund $1.3 million, other funds  $0.9 million). For additional information see the General Fund  section of Attachment A, Exhibit 2. A detailed list of impacts by  department and fund can be found in Attachment A, Exhibit 4.  ‐$                 6,994$              Non‐ Departmental Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting,  this action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can  be found in Attachment A, Exhibit 4.  ‐$                 (345)$                Fund Balance Ending Fund Balance This action adjusts the fund balance to offset the actions  recommended in this report. ‐$                 286,972$         UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment INTERNAL SERVICE FUNDS GENERAL BENFITS FUND (687) Non‐ Departmental Supplemental Pension Trust Fund Contributions Consistent with Finance Committee direction at the May 24  meeting, this action increases supplemental pension funding  from the previously approved discount rate (DR) of 6.2% to 5.3%  to be phased in over two years. FY 2023 is a transitional year in  which half of the difference is budgeted, which is approximately  equivalent to a 5.8 DR. To execute this direction, this action  allocates funding proportionately to departments that will  materialize as a personnel benefit expense totaling $2.2 million  (General Fund $1.3 million, other funds $0.9 million). General  Fund expenses are offset by the distribution of the $1.3 million  reserve established in the FY 2023 Proposed Budget. A detailed  list of impacts by department and fund can be found in  Attachment A, Exhibit 4. This action passes through the General  Benefits Fund, which centrally collects revenue and transmits  corresponding funding to the Section 115 Pension Trust Fund.  2,202,631$    2,202,631$     Non‐ Departmental Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  199,000$        199,000$         Non‐ Departmental Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                  ‐$                  GENERAL BENFITS FUND (687) SUBTOTAL 2,401,631$    2,401,631$     RETIREE HEALTH BENEFITS FUND (694) CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment INTERNAL SERVICE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses Non‐ Departmental Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). As part of this report, the Finance Committee  recommended the full funding of the Actuarial Determined  Contribution (ADC) for FY 2023 and FY 2024 and affirmed the  continued practice of transmitting amounts at a 5.75 percent  discount rate as an additional discretionary payment to the City’s  California Employers’ Retiree Benefit Trust (CERBT) Fund. This  action results in a new FY 2023 funding level of $16.3 million,  which is comprised of the ADC of $15.9 million and $0.4 million  for newly proposed staff in FY 2023. This constitutes a $0.6  million reduction from FY 2023 Proposed funding levels of $16.9  million. A detailed list of impacts by department and fund can be  found in Attachment A, Exhibit 4.  (598,000)$       (598,000)$        Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                  ‐$                  RETIREE HEALTH BENEFITS FUND (694) SUBTOTAL (598,000)$      (598,000)$       PRINTING & MAILING FUND (683) Administrative  Services Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 1,726$             Administrative  Services Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (175)$                Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (1,551)$            PRINTING & MAILING FUND (683) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment INTERNAL SERVICE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses TECHNOLOGY FUND (682) Information  Technology Utilities Water Rate and Corresponding Adjustments Consistent with staff recommendation at the May 24 meeting,  this action aligns Water Fund revenue and expenses and citywide  Allocated Charge expenses to a Water rate increase of 8.9%. For  more information, see the Water Fund section of Attachment A,  Exhibit 2. A detailed list of impacts by department and fund can  be found in Attachment A, Exhibit 4.  ‐$                 (402)$                Information  Technology Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (13,994)$          Information  Technology Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 70,897$           Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (56,502)$          TECHNOLOGY FUND (682) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment INTERNAL SERVICE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses VEHICLE REPLACEMENT FUND (681) Capital Capital Improvement Project Reappropriations This action reflects the impact from adjustments to capital  projects as a result of funds recommended to be reappropriated  from FY 2022 to FY 2023. All recommended changes to proposed  capital projects are outlined in Attachment A, Exhibit 3. ‐$                 1,443,000$     Public Works Other Post‐Employment Benefits (OPEB) Actuarial Valuation  On June 7, 2022, the Finance Committee approved the June 30,  2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan  (CMR 14502). This action results in a new FY 2023 funding level of  $16.3 million, which is comprised of the ADC of $15.9 million and  $0.4 million for newly proposed staff in FY 2023. For more  information see the Retiree Health Benefits Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 (9,705)$            Public Works Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 22,182$           Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (1,455,477)$    VEHICLE REPLACEMENT FUND (681) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 2 Department Adjustment Adjustment INTERNAL SERVICE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED BUDGET Revenues Expenses WORKER'S COMPENSATION FUND (688) Non‐ Departmental Supplemental Pension Trust Fund Contributions This action executes the FY 2023 supplemental pension funding  action (General Fund $1.3 million, other funds $0.9 million). For  additional information see the General Fund section of  Attachment A, Exhibit 2. A detailed list of impacts by department  and fund can be found in Attachment A, Exhibit 4.  ‐$                 2,179$             Non‐ Departmental Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments  recommended in this report. ‐$                 (2,179)$            WORKER'S COMPENSATION FUND (688) SUBTOTAL ‐$                  ‐$                  ATTACHMENT A, EXHIBIT 3 FY 2023 Appropriation: FY 2023 Revenue:  Project Project Proposed Capital FY 2023 Appropriation FY 2023 Revised Proposed Capital FY 2023 Revenue FY 2023 Revised Title Number Budget Document Adjustment Appropriation Budget Document Adjustment Revenue Americans With Disabilities Act Compliance PF‐93009  $                             874,900  $                         (100,000) $           774,900  Animal Shelter Renovation PE‐19002  $                             739,100  $                          252,000  $           991,100  Art In Public Spaces AC‐86017  $                          1,727,600  $                          277,200  $        2,004,800  Athletic Courts Resurfacing PG‐06001  $                             238,700  $                             75,800  $           314,500  Baylands Comprehensive Conservation Plan PG‐17000  $                               7,100  $                7,100  Cameron Park Improvements PG‐14002  $                          101,500  $           101,500  Capital Improvement Fund Administration AS‐10000  $                          1,010,700  $                         (300,000) $           710,700  City Bridge Improvements PE‐20001  $                             483,000  $                             20,000  $           503,000  City Hall Space Planning PE‐19000  $                             416,400  $                          200,000  $           616,400  Civic Center Fire Life Safety Upgrades PE‐18016  $                             178,900  $                             44,000  $           222,900  Civic Center Waterproofing Study and Repairs PE‐15020  $                             304,200  $                             27,000  $           331,200  Curb and Gutter Repairs PO‐12001  $                             111,000  $                             11,600  $           122,600  Dog Park Installation and Renovation PG‐18001  $                             166,500  $                             (5,500) $           161,000  $                            150,000  $                               (5,500) $                      144,500  Extrication Tool Replacement FD‐22000  $                          118,187  $           118,187  Facility Interior Finishes Replacement PF‐02022  $                             510,400  $                             (5,900) $           504,500  $                                         ‐  $                                   ‐  Fire Station 4 Replacement PE‐18004  $                          195,000  $           195,000  Golf Reconfiguration & Baylands Athletic Center  Improvements PG‐13003  $                          200,000  $           200,000  JMZ Renovation AC‐18001  $                       1,279,200  $        1,279,200  Library Automated Material Handling LB‐21000  $                             821,600  $                             25,093  $           846,693  $                            540,000  $                      540,000  Magical Bridge Playground Rubber and Synthetic Turf  Resurfacing PE‐21003  $                          163,000  $           163,000  Municipal Service Center A, B, & C Roof Replacement PF‐17000  $                          131,000  $           131,000  Municipal Service Center Lighting, Mechanical, and Electrical  Improvements PF‐16006  $                          6,346,700  $                          150,000  $        6,496,700  $                         1,539,000  $                  1,539,000  New California Avenue Area Parking Garage PE‐18000  $                             351,400  $                          493,000  $           844,400  Newell Road/San Francisquito Creek Bridge Replacement PE‐12011  $                       12,397,500  $                       1,000,000  $      13,397,500  $                      12,500,000  $                12,500,000  Off‐Road Pathway Resurfacing And Repair OS‐09001  $                             111,000  $                             57,000  $           168,000  Open Space Trails and Amenities OS‐00001  $                             194,300  $                             13,000  $           207,300  Park and Open Space Emergency Repairs PG‐09002  $                             222,100  $                             83,300  $           305,400  Park Restroom Installation PG‐19000  $                             377,100  $                           (13,300) $           363,800  $                            350,000  $                             (13,300) $                      336,700  Parking Management and System Implementation PL‐16002  $                          110,000  $           110,000  Performing Arts Venues Seat Replacement AC‐18000  $                             50,000  $              50,000  Railroad Grade Separation and Safety Improvements PL‐17001  $                          3,468,200  $                          114,963  $        3,583,163  $                         1,000,000  $                  1,000,000  Ramos Park Improvements PG‐14000  $                          308,900  $           308,900  Safe Routes To School PL‐00026  $                             149,900  $                          700,000  $           849,900  $                            100,000  $                      100,000  Sidewalk Repairs PO‐89003  $                          1,387,900  $                             65,000  $        1,452,900  Sign Reflectivity Upgrade PO‐11000  $                               94,400  $                             12,000  $           106,400  Street Maintenance PE‐86070  $                          4,960,700  $                          314,000  $        5,274,700  $                         3,545,200  $                  3,545,200  Thermoplastic Lane Marking and Striping PO‐11001  $                             138,800  $                             28,000  $           166,800  Transportation and Parking Improvements PL‐12000  $                             971,500  $                          434,903  $        1,406,403  $                            500,000  $                      500,000  Water, Gas, Wastewater Office Remodel PE‐19001  $                             632,900  $                         (570,000) $              62,900  $                            570,000  $                      570,000  TOTAL CAPITAL IMPROVEMENT FUND PROJECT ADJUSTMENTS  $                       39,387,400  $                       6,067,046  $     45,454,446  $                      20,794,200  $                            (18,800) $                20,775,400  Cubberley Field Restroom CB‐17002  $                             485,000  $                             23,000  $           508,000  Cubberley Repairs CB‐17001  $                             855,000  $                          227,000  $        1,082,000  Cubberley Roof Replacements CB‐16002  $                          2,925,000  $                         (822,400) $        2,102,600  $                         1,962,800  $                  1,962,800   $                         4,265,000  $                        (572,400) $        3,692,600  $                        1,962,800  $                                         ‐   $                  1,962,800  Airport Apron Reconstruction AP‐16000  $                          532,000  $           532,000  Airport Temporary Office Buildings AP‐22001  $                             359,800  $                               1,000  $           360,800   $                             359,800  $                          533,000  $           892,800  $                                         ‐   $                                         ‐   $                                   ‐  Capacitor Bank Installation EL‐16002  $                          146,000  $           146,000  Coleridge/Cowper/Tennyson 4/12kV Conversion EL‐14000  $                          1,250,000  $                       1,250,000  $        2,500,000  Colorado Distribution Feeder Outlet Replacement EL‐22002  $                          400,000  $           400,000  Colorado Substation Site Improvements EL‐19002  $                             340,000  $                          650,000  $           990,000  East Meadow Circles 4/12kV Conversion EL‐17001  $                             500,000  $                          240,000  $           740,000  Electric Utility Geographic Information System EL‐02011  $                             165,000  $                          160,000  $           325,000  Foothills Rebuild (Fire Mitigation) EL‐21001  $                          2,000,000  $                       1,500,000  $        3,500,000  Inter‐substation Line Protection Relay EL‐17005  $                             150,000  $                          150,000  $           300,000  Rebuild Underground District 26 EL‐16000  $                             350,000  $                          183,000  $           533,000  Substation Physical Security EL‐16003  $                          2,200,000  $                       2,200,000  $        4,400,000  TOTAL ELECTRIC FUND PROJECT ADJUSTMENTS  $                         6,955,000  $                       6,879,000  $     13,834,000  $                                         ‐   $                                         ‐   $                                   ‐  Gas Main Replacement ‐ Project 23 GS‐13001  $                             93,694  $              93,694  Gas Main Replacement ‐ Project 24 GS‐14003  $                          8,000,000  $                       1,980,000  $        9,980,000  TOTAL GAS FUND PROJECT ADJUSTMENTS  $                         8,000,000  $                       2,073,694  $     10,073,694  $                                         ‐   $                                         ‐   $                                   ‐  Corporation Way System Upgrades and Pump Station SD‐21000  $                          2,682,200  $                          500,000  $        3,182,200  Storm Drainage System Replacement And Rehabilitation SD‐06101  $                          1,421,100  $                         (188,000) $        1,233,100  Trash Capture Device Installation SD‐22002  $                             532,000  $                             18,000  $           550,000  $                            613,000  $                      613,000  West Bayshore Road Pump Station SD‐20000  $                             784,000  $                          350,000  $        1,134,000  West Bayshore Road Trunk Line Improvements SD‐23000  $                             885,600  $                               5,800  $           891,400  CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED CAPITAL IMPROVEMENT PROGRAM CAPITAL IMPROVEMENT FUND CUBBERLEY INFRASTRUCTURE FUND TOTAL CUBBERLEY INFRASTRUCTURE FUND PROJECT ADJUSTMENTS AIRPORT FUND TOTAL AIRPORT FUND PROJECT ADJUSTMENTS ELECTRIC FUND GAS FUND STORMWATER MANAGEMENT FUND ATTACHMENT A, EXHIBIT 3 FY 2023 Appropriation: FY 2023 Revenue:  Project Project Proposed Capital FY 2023 Appropriation FY 2023 Revised Proposed Capital FY 2023 Revenue FY 2023 Revised Title Number Budget Document Adjustment Appropriation Budget Document Adjustment Revenue CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 PROPOSED CAPITAL IMPROVEMENT PROGRAM  $                         6,304,900  $                          685,800  $        6,990,700  $                            613,000  $                                         ‐   $                      613,000  Scheduled Vehicle and Equipment Replacement ‐ Fiscal Year  2020 VR‐20000  $                             786,700  $                          627,000  $        1,413,700  Scheduled Vehicle and Equipment Replacement ‐ Fiscal Year  2021 VR‐21000  $                             224,700  $                             47,000  $           271,700  Scheduled Vehicle and Equipment Replacement ‐ Fiscal Year  2022 VR‐22000  $                             300,000  $                          769,000  $        1,069,000   $                         1,311,400  $                       1,443,000  $        2,754,400  $                                         ‐   $                                         ‐   $                                   ‐  Wastewater Collection System Rehabilitation/Augmentation  Project 30 WC‐17001  $                          879,688  $           879,688   $                                          ‐   $                          879,688  $           879,688  $                                         ‐   $                                         ‐   $                                   ‐  Advanced Water Purification Facility WQ‐19003  $                       16,866,500  $                          194,000  $      17,060,500  $                      18,521,000  $                18,521,000  Horizontal Levee Pilot WQ‐22001  $                             169,400  $                             25,000  $           194,400  Plant Repair, Retrofit, and Equipment Replacement WQ‐19002  $                          4,093,000  $                       6,372,000  $      10,465,000  Secondary Treatment Upgrades WQ‐19001  $                     144,688,700  $                             (3,500) $   144,685,200  $                    148,799,600  $              148,799,600   $                     165,817,600  $                       6,587,500  $   172,405,100  $                    167,320,600  $                                         ‐   $              167,320,600  Water General Equipment/Tools WS‐13002  $                               50,000  $                             55,000  $           105,000  Water Main Replacement ‐ Project 28 WS‐14001  $                       2,000,000  $        2,000,000  Water Main Replacement ‐ Project 29 WS‐15002  $                             675,000  $                          124,600  $           799,600  Water Meters WS‐80015  $                             562,800  $                          400,000  $           962,800  Water Regulation Station Improvements WS‐07000  $                               60,000  $                          548,150  $           608,150   $                         1,347,800  $                       3,127,750  $        4,475,550  $                                         ‐   $                                         ‐   $                                   ‐   $                     233,748,900  $                     27,704,078  $   261,452,978  $                    190,690,600  $                            (18,800) $              190,671,800  TOTAL STORMWATER MANAGEMENT FUND PROJECT ADJUSTMENTS WATER FUND TOTAL WATER FUND PROJECT ADJUSTMENTS TOTAL ADJUSTMENTS ACROSS ALL FUNDS VEHICLE REPLACEMENT FUND TOTAL VEHICLE REPLACEMENT FUND PROJECT ADJUSTMENTS WASTEWATER COLLECTION FUND TOTAL WASTEWATER COLLECTION FUND PROJECT ADJUSTMENTS WASTEWATER TREATMENT FUND TOTAL WASTEWATER TREATMENT FUND PROJECT ADJUSTMENTS ATTACHMENT A, EXHIBIT 4 Fund Department/ Fund Title Revenue Expense Comments General Fund Community Services Utilities Water Rate and Corresponding Adjustments $ - (80,669)$ Adjustment to a Water rate increase of 8.9% General Fund Fire Utilities Water Rate and Corresponding Adjustments $ - (659)$ Adjustment to a Water rate increase of 8.9% General Fund Library Utilities Water Rate and Corresponding Adjustments $ - (4,026)$ Adjustment to a Water rate increase of 8.9% General Fund Public Works Utilities Water Rate and Corresponding Adjustments $ - (1,842)$ Adjustment to a Water rate increase of 8.9% $ - $ (87,196) University Avenue Parking Permits 236 Utilities Water Rate and Corresponding Adjustments $ - (345)$ Adjustment to a Water rate increase of 8.9% California Avenue Parking Permits 237 Utilities Water Rate and Corresponding Adjustments $ - (59)$ Adjustment to a Water rate increase of 8.9% $ - $ (404) Electric Supply Fund 513 & 523 Utilities Water Rate and Corresponding Adjustments $ - (182)$ Adjustment to a Water rate increase of 8.9% Gas Supply Fund 514 & 524 Utilities Water Rate and Corresponding Adjustments $ - (17)$ Adjustment to a Water rate increase of 8.9% Water Fund 522 Utilities Water Rate and Corresponding Adjustments (1,677,205)$ 1,501,340$ Adjustment to a Water rate increase of 8.9% Refuse Fund 525 Utilities Water Rate and Corresponding Adjustments $ - (178)$ Adjustment to a Water rate increase of 8.9% Wastewater Treatment Fund 526 Utilities Water Rate and Corresponding Adjustments $ - (926)$ Adjustment to a Water rate increase of 8.9% Stormwater Management Fund 528 Utilities Water Rate and Corresponding Adjustments $ - (256)$ Adjustment to a Water rate increase of 8.9% Airport Enterprise Fund 530 Utilities Water Rate and Corresponding Adjustments $ - (463)$ Adjustment to a Water rate increase of 8.9% $ (1,677,205) $ 1,499,318 Information Technology Fund 682 Utilities Water Rate and Corresponding Adjustments $ - (402)$ Adjustment to a Water rate increase of 8.9% $ - $ (402) TOTAL ADJUSTMENT $ (1,677,205) $ 1,411,317 INTERNAL SERVICE FUNDS SUBTOTAL ENTERPRISE FUNDS ENTERPRISE FUNDS SUBTOTAL INTERNAL SERVICE FUNDS SPECIAL REVENUE SUBTOTAL CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET GENERAL FUND GENERAL FUND SUBTOTAL SPECIAL REVENUE FUNDS Attachment A, Exhibit 4 page 1 ATTACHMENT A, EXHIBIT 4 Fund Department/ Fund Title Revenue Expense Comments General Fund Administrative Services Supplemental Pension Contribution Adjustment $ - 73,205$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund General Fund City Attorney Supplemental Pension Contribution Adjustment $ - 29,729$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund City Clerk Supplemental Pension Contribution Adjustment $ - 8,613$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund City Council Supplemental Pension Contribution Adjustment $ - 1,380$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund City Manager Supplemental Pension Contribution Adjustment $ - 30,795$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund General Fund Community Services Supplemental Pension Contribution Adjustment $ - 108,137$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Fire Supplemental Pension Contribution Adjustment $ - 343,397$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Human Resources Supplemental Pension Contribution Adjustment $ - 32,563$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund General Fund Library Supplemental Pension Contribution Adjustment $ - 60,547$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Office Of Emergency Services Supplemental Pension Contribution Adjustment $ - 5,631$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Office Of Transportation Supplemental Pension Contribution Adjustment $ - 12,123$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Planning and Development Services Supplemental Pension Contribution Adjustment $ - $ 116,550 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund General Fund Police Supplemental Pension Contribution Adjustment $ - 395,761$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundGeneral Fund Public Works Supplemental Pension Contribution Adjustment $ - 81,570$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund $ - 1,300,000 Public Art Fund 207 Supplemental Pension Contribution Adjustment $ - $ 2,028 Adjustment to increase pension contributions to the Section 115 Pension Trust FundCommunity Development Block Grant 232 Supplemental Pension Contribution Adjustment $ - $ 209 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund Housing In-Lieu/Residential 233 Supplemental Pension Contribution Adjustment $ - $ 313 Adjustment to increase pension contributions to the Section 115 Pension Trust FundHousing In-Lieu/Commercial 234 Supplemental Pension Contribution Adjustment $ - $ 313 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund University Avenue Parking Permits 236 Supplemental Pension Contribution Adjustment $ - $ 6,994 Adjustment to increase pension contributions to the Section 115 Pension Trust FundCalifornia Avenue Parking Permits 237 Supplemental Pension Contribution Adjustment $ - $ 1,902 Adjustment to increase pension contributions to the Section 115 Pension Trust FundResidential Parking Permit Programs 239 Supplemental Pension Contribution Adjustment $ - $ 3,778 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund $ - $ 15,536 Capital Improvement Fund 471 Supplemental Pension Contribution Adjustment $ - $ 67,790 Adjustment to increase pension contributions to the Section 115 Pension Trust FundCubberley Property Infrastructure Fund 472 Supplemental Pension Contribution Adjustment $ - $ 5,089 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund $ - $ 72,879 CAPITAL FUNDS CAPITAL FUNDS SUBTOTAL ENTERPRISE FUNDS SPECIAL REVENUE SUBTOTAL CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET GENERAL FUND SUBTOTAL SPECIAL REVENUE FUNDS GENERAL FUND Attachment A, Exhibit 4 page 2 ATTACHMENT A, EXHIBIT 4 Fund Department/ Fund Title Revenue Expense Comments CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET GENERAL FUND Electric Supply Fund 513 Supplemental Pension Contribution Adjustment $ - $ 21,123 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund Gas Supply Fund 514 Supplemental Pension Contribution Adjustment $ - $ 5,657 Adjustment to increase pension contributions to the Section 115 Pension Trust FundUtilities Administration Fund 521 Supplemental Pension Contribution Adjustment $ - $ 39,654 Adjustment to increase pension contributions to the Section 115 Pension Trust FundWater Fund 522 Supplemental Pension Contribution Adjustment $ - $ 87,028 Adjustment to increase pension contributions to the Section 115 Pension Trust FundElectric Fund 523 Supplemental Pension Contribution Adjustment $ - $ 227,568 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund Gas Fund 524 Supplemental Pension Contribution Adjustment $ - $ 89,816 Adjustment to increase pension contributions to the Section 115 Pension Trust FundRefuse Fund 525 Supplemental Pension Contribution Adjustment $ - $ 26,646 Adjustment to increase pension contributions to the Section 115 Pension Trust FundWastewater Treatment Fund 526 Supplemental Pension Contribution Adjustment $ - $ 125,246 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund Wastewater Collection Fund 527 Supplemental Pension Contribution Adjustment $ - $ 47,359 Adjustment to increase pension contributions to the Section 115 Pension Trust FundStormwater Management Fund 528 Supplemental Pension Contribution Adjustment $ - $ 25,203 Adjustment to increase pension contributions to the Section 115 Pension Trust FundAirport Enterprise Fund 530 Supplemental Pension Contribution Adjustment $ - $ 9,092 Adjustment to increase pension contributions to the Section 115 Pension Trust FundFiber Optics Fund 533 Supplemental Pension Contribution Adjustment $ - $ 12,840 Adjustment to increase pension contributions to the Section 115 Pension Trust Fund $ - $ 717,232 Vehicle Replacement & Maintenance Fund 681 Supplemental Pension Contribution Adjustment $ - 22,182$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundTechnology Fund 682 Supplemental Pension Contribution Adjustment $ - 70,897$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund Printing & Mailing Services Fund 683 Supplemental Pension Contribution Adjustment $ - 1,726$ Adjustment to increase pension contributions to the Section 115 Pension Trust FundWorker's Compensation Fund 688 Supplemental Pension Contribution Adjustment $ - 2,179$ Adjustment to increase pension contributions to the Section 115 Pension Trust Fund $ - $ 96,984 TOTAL ADJUSTMENT $ - $ 2,202,631 ENTERPRISE FUNDS SUBTOTAL INTERNAL SERVICE FUNDS INTERNAL SERVICE FUNDS SUBTOTAL Attachment A, Exhibit 4 page 3 ATTACHMENT A, EXHIBIT 4 Department/Fund General Fund Administrative Services Retiree Health Adjustment $ - (16,454) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund City Attorney Retiree Health Adjustment -$ (8,659) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund City Clerk Retiree Health Adjustment -$ (3,411) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund City Council Retiree Health Adjustment -$ (5,423) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund City Manager Retiree Health Adjustment -$ 10,480 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Community Services Retiree Health Adjustment -$ (41,265) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Fire Retiree Health Adjustment -$ (96,876) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Human Resources Retiree Health Adjustment -$ (4,466) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Library Retiree Health Adjustment -$ 6,704 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Office of Emergency Services Retiree Health Adjustment -$ (3,069) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Office of Transportation Retiree Health Adjustment -$ (4,930) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Planning and Development Services Retiree Health Adjustment -$ 24,360 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Police Retiree Health Adjustment -$ (133,843) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) General Fund Public Works Retiree Health Adjustment -$ (49,306) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) $ - (326,158) University Avenue Parking Permits 236 Retiree Health Adjustment $ - (3,650) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) California Avenue Parking Permits 237 Retiree Health Adjustment $ - (869) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Residential Parking Permit Programs 239 Retiree Health Adjustment $ - (1,514) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) $ - (6,033) Capital Improvement Fund 471 Retiree Health Adjustment -$ (22,821) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) $ - (22,821) Electric Supply Fund 513 Retiree Health Adjustment -$ (2,115) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Gas Supply Fund 514 Retiree Health Adjustment -$ 489 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Utilities Administration Fund 521 Retiree Health Adjustment -$ 6,467 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Water Fund 522 Retiree Health Adjustment -$ (42,438) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502)Electric Fund 523 Retiree Health Adjustment -$ (55,427) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502)Gas Fund 524 Retiree Health Adjustment -$ (41,177) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Refuse Fund 525 Retiree Health Adjustment -$ (13,080) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Wastewater Treatment 526 Retiree Health Adjustment -$ (58,533) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Wastewater Collection 527 Retiree Health Adjustment -$ (12,075) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502)Stormwater Management 528 Retiree Health Adjustment -$ (8,925) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502)Airport Enterprise Fund 530 Retiree Health Adjustment -$ 9,962 Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) Fiber Optics Fund 533 Retiree Health Adjustment -$ (2,264) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) $ - (219,114) Vehicle Replacement & Maintenance Fund 681 Retiree Health Adjustment -$ (9,705) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) SPECIAL REVENUE SUBTOTAL CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET GENERAL FUND SUBTOTAL SPECIAL REVENUE FUNDS Fund Title Revenue Expense Comments GENERAL FUND CAPITAL FUNDS CAPITAL FUNDS SUBTOTAL ENTERPRISE FUNDS ENTERPRISE FUNDS SUBTOTAL INTERNAL SERVICE FUNDS Attachment A, Exhibit 4 page 4 ATTACHMENT A, EXHIBIT 4 CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET Technology Fund 682 Retiree Health Adjustment -$ (13,994) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502)Printing & Mailing Services Fund 683 Retiree Health Adjustment -$ (175) Adjustments to align OPEB costs with the June 30, 2021 Valuation (CMR 14502) $ - (23,873) TOTAL ADJUSTMENT $ - (598,000) INTERNAL SERVICE FUNDS SUBTOTAL Attachment A, Exhibit 4 page 5 TABLE OF ORGANIZATION Table of Organization Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % General Fund Administrative Services Account Specialist 4.63 4.63 4.13 4.13 ——% Account Specialist-Lead 3.45 3.45 3.45 3.45 ——% Accountant 3.00 3.00 2.00 2.00 ——% Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate II 1.00 1.00 0.50 0.50 ——% Administrative Associate III 1.00 1.00 1.00 1.00 ——% Assistant Director Administrative Services 1.65 1.65 1.65 1.65 ——% Buyer 1.00 1.00 2.00 2.00 ——% Chief Procurement Officer 1.00 1.00 1.00 1.00 ——% Contracts Administrator 2.70 2.70 1.70 2.70 1.00 58.8% Director Administrative Services/CFO 0.80 0.80 0.80 0.80 ——% Director Office of Management and Budget 1.00 1.00 1.00 1.00 ——% Management Analyst 2.00 2.00 2.00 2.00 ——% Manager Budget 2.00 2.00 2.00 2.00 ——% Manager Real Property 1.00 1.00 1.00 1.00 ——% Manager Revenue Collections 0.62 0.62 0.62 0.62 ——% Manager Treasury, Debt & Investments 0.60 0.60 0.60 0.60 ——% Manager, Finance 1.00 1.00 1.00 1.00 ——% Payroll Analyst 2.00 2.00 2.00 2.00 ——% Performance Auditor II —1.00 ————% Senior Accountant 3.00 3.00 3.00 3.00 ——% Senior Buyer 1.00 1.00 1.00 1.00 ——% Senior Management Analyst 2.30 2.30 2.30 2.30 ——% Storekeeper 1.00 1.00 1.00 2.00 1.00 100.0% Storekeeper-Lead 0.20 0.20 0.20 0.20 ——% Warehouse Supervisor 0.20 0.20 0.20 0.20 ——% Total Administrative Services 39.15 40.15 37.15 39.15 2.00 5.4% ATTACHMENT A, EXHIBIT 5 1 TABLE OF ORGANIZATION City Attorney Assistant City Attorney*3.00 3.00 3.00 4.00 1.00 0.33% Chief Assistant City Attorney 1.00 1.00 1.00 1.00 ——% City Attorney 1.00 1.00 1.00 1.00 ——% Claims Investigator 1.00 1.00 1.00 1.00 ——% Deputy City Attorney*1.00 1.00 1.00 —(1.00)(100.0)% Legal Fellow 1.00 1.00 1.00 1.00 ——% Secretary to City Attorney 1.00 1.00 1.00 1.00 ——% Senior Management Analyst 1.00 1.00 1.00 1.00 ——% Total City Attorney 10.00 10.00 10.00 10.00 ——% City Auditor City Auditor 1.00 1.00 ————% Performance Auditor II 2.00 —————% Senior Performance Auditor 1.00 2.00 ————% Total City Auditor 4.00 3.00 ————% City Clerk Administrative Associate III 2.00 2.00 2.00 2.00 ——% Assistant City Clerk 1.00 1.00 1.00 1.00 ——% City Clerk 1.00 1.00 1.00 1.00 ——% Deputy City Clerk 1.00 1.00 1.00 1.00 ——% Total City Clerk 5.00 5.00 5.00 5.00 ——% City Manager Administrative Assistant 2.00 2.00 2.00 2.00 ——% Assistant City Manager 1.00 1.00 1.00 1.00 ——% Assistant to the City Manager*2.00 2.00 1.00 3.00 2.00 200.0% Chief Communications Officer 1.00 1.00 1.00 1.00 ——% City Manager 1.00 1.00 1.00 1.00 ——% Deputy City Manager 1.00 1.00 1.00 1.00 ——% Executive Assistant to the City Manager 1.00 1.00 1.00 1.00 ——% Management Analyst 0.75 —————% Manager Communications 1.00 1.00 1.00 1.00 ——% Senior Management Analyst ———1.00 1.00 —% Total City Manager 10.75 10.00 9.00 12.00 3.00 33.3% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 2 TABLE OF ORGANIZATION Community Services Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate III 1.00 1.00 ————% Assistant Director Community Services 2.00 2.00 1.00 1.00 ——% Building Serviceperson 1.25 1.00 1.00 1.00 ——% Building Serviceperson-Lead 0.60 0.60 0.60 0.60 ——% Coordinator Recreation Programs 4.00 4.00 4.00 4.00 ——% Director Community Services 1.00 1.00 1.00 1.00 ——% Division Manager Open Space, Parks and Golf 1.00 —————% Heavy Equipment Operator 0.07 0.07 ————% Inspector, Field Services 2.00 2.00 2.00 2.00 ——% Junior Museum & Zoo Educator*3.60 3.60 3.25 4.10 0.85 26.2% Management Analyst 1.00 1.00 1.00 1.00 ——% Management Assistant 1.00 1.00 1.00 1.00 ——% Manager Community Services 5.00 5.00 5.00 5.00 ——% Manager Community Services Senior Program 4.00 4.00 4.00 4.00 ——% Manager Human Services 1.00 1.00 1.00 1.00 ——% Park Maintenance Person 6.00 6.00 6.00 6.00 ——% Park Maintenance-Lead 1.00 1.00 1.00 1.00 ——% Park Ranger 5.00 5.00 5.00 6.00 1.00 20.0% Parks/Golf Crew-Lead 2.00 2.00 2.00 2.00 ——% Producer Arts/Science Program 11.00 12.00 11.00 12.25 1.25 11.4% Program Assistant I 8.00 7.00 3.00 3.00 ——% Program Assistant II 3.00 4.00 4.00 4.00 ——% Project Manager 0.10 0.10 0.10 0.10 ——% Senior Management Analyst 1.00 1.00 1.00 1.00 ——% Sprinkler System Representative 4.00 4.00 4.00 4.00 ——% Superintendent Community Services 2.00 2.00 2.00 2.00 ——% Superintendent Recreation 1.00 1.00 ————% Theater Specialist 2.00 2.00 2.00 2.00 ——% WGW Heavy Equipment Operator ——0.07 0.07 ——% Total Community Services 75.62 75.37 67.02 70.12 3.10 4.6% Fire 40-Hour Captain**———0.20 0.20 —% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 3 TABLE OF ORGANIZATION 40-Hour Training Battalion Chief 1.00 1.00 1.00 1.00 ——% 40-Hour Training Captain 1.00 1.00 1.00 1.00 ——% Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate II 2.20 2.20 2.20 2.20 ——% Administrative Associate III ———0.20 0.20 —% Battalion Chief 3.00 3.00 3.00 3.00 ——% Business Analyst 0.80 0.80 0.80 0.80 ——% Deputy Chief/Fire Marshal 0.05 0.05 0.05 —(0.05)(100.0)% Deputy Director Technical Services Division*0.20 0.20 —0.20 0.20 —% Deputy Fire Chief 2.00 2.00 1.00 2.00 1.00 100.0% Emergency Medical Service Director 1.00 1.00 1.00 1.00 ——% Emergency Medical Services Data Specialist 1.00 1.00 1.00 1.00 ——% Fire Apparatus Operator 26.00 26.00 26.00 26.00 ——% Fire Captain 21.00 21.00 20.00 20.00 ——% Fire Chief 1.00 1.00 1.00 1.00 ——% Fire Fighter*34.00 34.00 29.00 34.00 5.00 17.2% Fire Fighter Trainee**———3.00 3.00 —% Fire Inspector 0.80 0.80 0.40 0.40 ——% Fire Marshal**———0.05 0.05 —% Geographic Information System Specialist 0.50 0.50 0.50 0.50 ——% Hazardous Materials Inspector 0.30 0.30 0.30 0.70 0.40 133.3% Senior Management Analyst 1.00 1.00 1.00 1.00 ——% Total Fire 97.85 97.85 90.25 100.25 10.00 11.1% Human Resources Assistant Director Human Resources 1.00 1.00 1.00 1.00 ——% Director Human Resources/CPO 1.00 1.00 1.00 1.00 ——% Human Resources Representative 3.00 3.00 2.00 2.00 ——% Human Resources Technician*4.00 4.00 3.00 4.00 1.00 25.0% Manager Employee Benefits 1.00 1.00 1.00 1.00 ——% Manager Employee Relations 1.00 1.00 1.00 1.00 ——% Senior Human Resources Administrator 3.00 3.00 3.00 3.00 ——% Senior Management Analyst 2.00 2.00 2.00 2.00 ——% Total Human Resources 16.00 16.00 14.00 15.00 1.00 7.1% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 4 TABLE OF ORGANIZATION Library Administrative Associate III 1.00 1.00 —1.00 1.00 —% Assistant Director Library Services 1.00 1.00 —1.00 1.00 —% Business Analyst 1.00 1.00 1.00 1.00 ——% Coordinator Library Programs 1.00 1.00 1.00 2.00 1.00 100.0% Director Libraries 1.00 1.00 1.00 1.00 ——% Division Head Library Services 1.00 1.00 1.00 1.00 ——% Librarian 6.00 6.00 6.00 7.00 1.00 16.7% Library Associate 7.00 7.00 6.00 6.00 ——% Library Specialist 11.50 11.50 10.50 12.50 2.00 19.0% Management Analyst 1.00 1.00 1.00 1.00 ——% Manager Library Services 3.00 3.00 3.00 3.00 ——% Senior Librarian 8.00 8.00 6.00 6.00 ——% Supervising Librarian 4.00 4.00 4.00 4.00 ——% Total Library 46.50 46.50 40.50 46.50 6.00 14.8% Office of Emergency Services Director Office of Emergency Services 1.00 1.00 1.00 1.00 ——% Office of Emergency Services Coordinator 1.00 1.00 1.00 1.00 ——% Program Assistant II 1.00 1.00 ————% Total Office of Emergency Services 3.00 3.00 2.00 2.00 ——% Office of Transportation Administrative Assistant 0.50 0.50 0.60 0.60 ——% Associate Engineer 0.30 0.30 0.35 0.35 ——% Associate Planner 0.30 0.45 0.40 0.40 ——% Chief Transportation Official 0.70 0.70 0.70 0.70 ——% Coordinator Transportation Systems Management 1.25 1.25 0.65 0.65 ——% Management Analyst 0.50 0.50 0.50 0.50 ——% Parking Operations-Lead ——0.05 0.05 ——% Project Engineer 0.45 0.45 0.25 0.25 ——% Senior Engineer*0.20 0.20 0.20 0.55 0.35 175.0% Senior Planner 0.50 0.50 0.15 0.15 ——% Traffic Engineering-Lead*0.35 0.35 0.35 —(0.35)100.0% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 5 TABLE OF ORGANIZATION Transportation Planning Manager 1.15 1.15 1.00 1.00 ——% Total Office of Transportation 6.20 6.35 5.20 5.20 ——% Planning and Development Services 40-Hour Captain**———0.80 0.80 —% Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate I 1.00 1.00 1.00 1.00 ——% Administrative Associate II 2.80 2.80 2.80 2.80 ——% Administrative Associate III*4.00 4.00 3.00 4.80 1.80 60.0% Assistant Chief Building Official 1.00 1.00 1.00 2.00 1.00 100.0% Assistant Director PCE 1.00 1.00 1.00 1.00 ——% Associate Engineer 0.22 0.20 ————% Associate Planner 3.15 3.00 3.25 1.25 (2.00)(61.5)% Building Inspector Specialist 4.00 6.00 6.00 8.00 2.00 33.3% Building/Planning Technician***3.00 3.00 2.00 2.50 0.50 25.0% Chief Building Official 1.00 1.00 1.00 1.00 ——% Chief Planning Official 1.00 1.00 1.00 1.00 ——% Code Enforcement Officer*2.00 2.00 —1.00 1.00 100.0% Code Enforcement-Lead 1.00 1.00 1.00 1.00 ——% Deputy Chief/Fire Marshal 0.80 0.80 0.80 —(0.80)(100.0)% Development Project Coordinator II 2.00 2.00 2.00 2.00 ——% Development Project Coordinator III 3.00 3.00 3.00 3.00 ——% Director Planning/Community Environment 1.00 1.00 1.00 1.00 ——% Engineer 0.64 0.52 0.52 0.52 ——% Engineering Technician III 1.78 1.50 1.50 1.50 ——% Fire Inspector 3.20 3.20 1.60 1.60 ——% Fire Marshal**———0.80 0.80 —% Hazardous Materials Inspector 1.60 1.60 1.60 3.20 1.60 100.0% Industrial Waste Inspector 0.01 —————% Industrial Waste Investigator 0.35 0.35 0.35 0.35 ——% Inspector, Field Services 0.68 0.68 0.68 0.68 ——% Landscape Architect Park Planner 0.50 0.50 0.50 0.50 ——% Management Analyst 0.01 —————% Manager Environmental Control Program*0.10 —————% Manager Planning 5.00 4.00 4.00 4.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 6 TABLE OF ORGANIZATION Manager Urban Forestry 0.04 —————% Planner 4.00 4.00 4.00 5.00 1.00 25.0% Plans Check Engineer ———1.00 1.00 —% Principal Management Analyst 1.00 —————% Principal Planner 2.00 2.00 1.00 2.00 1.00 100.0% Program Assistant 1.00 1.00 ————% Project Engineer 0.13 0.10 ————% Project Manager***———0.50 0.50 100.0% Senior Business Analyst 1.00 1.00 1.00 1.00 ——% Senior Engineer*0.46 0.40 0.40 0.45 0.05 12.5% Senior Industrial Waste Investigator 0.01 —————% Senior Management Analyst 2.00 2.00 2.00 2.00 ——% Senior Planner 3.60 3.60 3.65 4.65 1.00 27.4% Supervisor Inspection and Surveying 0.27 0.25 0.25 0.25 ——% Traffic Engineering-Lead*0.10 0.10 0.05 —(0.05)100.0% Transportation Planning Manager ——0.05 0.05 ——% Total Planning and Development Services 62.45 61.60 54.00 65.20 11.20 20.7% Police Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate II 3.00 3.00 2.00 2.00 ——% Animal Control Officer 3.00 3.00 2.00 2.00 ——% Animal Control Officer-Lead 1.00 1.00 1.00 1.00 ——% Assistant Police Chief 1.00 1.00 1.00 1.00 ——% Business Analyst 1.20 1.20 1.20 2.20 1.00 83.3% Code Enforcement Officer 1.00 1.00 1.00 1.00 ——% Communications Manager 1.00 1.00 ————% Communications Technician 1.00 1.00 ————% Community Service Officer 7.50 7.50 5.63 5.63 ——% Court Liaison Officer 1.00 1.00 1.00 1.00 ——% Crime Analyst 1.00 1.00 1.00 1.00 ——% Deputy Director Technical Services Division*0.80 0.80 —0.80 0.80 —% Geographic Information System Specialist 0.50 0.50 0.50 0.50 ——% Police Agent 19.00 19.00 19.00 19.00 ——% Police Captain 2.00 2.00 2.00 2.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 7 TABLE OF ORGANIZATION Police Chief 1.00 1.00 1.00 1.00 ——% Police Lieutenant 5.00 5.00 4.00 4.00 ——% Police Officer 50.00 50.00 39.00 43.00 4.00 10.3% Police Records Specialist II 6.00 6.00 6.00 6.00 ——% Police Records Specialist-Lead 1.00 1.00 1.00 1.00 ——% Police Sergeant 14.00 14.00 14.00 14.00 ——% Program Assistant II 1.00 1.00 1.00 1.00 ——% Property Evidence Technician 2.00 2.00 2.00 2.00 ——% Public Safety Communications Manager*1.00 1.00 —1.00 1.00 —% Public Safety Dispatcher 16.00 16.00 12.00 14.00 2.00 16.7% Public Safety Dispatcher-Lead 4.00 4.00 4.00 4.00 ——% Public Safety Program Manager 2.00 2.00 1.00 1.00 ——% Senior Management Analyst 1.00 1.00 1.00 1.00 ——% Total Police 149.00 149.00 124.33 133.13 8.80 7.1% Public Works Administrative Assistant 1.00 1.00 0.50 0.50 ——% Administrative Associate I 0.10 0.10 ————% Administrative Associate II 2.65 2.65 2.65 2.65 ——% Administrative Associate III 0.01 0.01 ————% Assistant Director Public Works 0.73 0.73 0.73 0.73 ——% Building/Planning Technician***———0.50 0.50 100.0% Building Serviceperson-Lead 1.00 1.00 1.00 1.00 ——% Cement Finisher 2.00 2.00 2.00 2.00 ——% Cement Finisher-Lead 0.26 0.26 0.26 0.26 ——% Coordinator Public Works Projects 1.50 1.50 1.50 1.50 ——% Director Public Works/City Engineer 1.00 1.00 1.00 1.00 ——% Electrician 0.80 0.80 0.80 0.80 ——% Engineer 0.36 0.48 0.48 0.48 ——% Engineering Technician III 1.47 1.75 1.75 1.75 ——% Environmental Specialist*———0.33 0.33 —% Equipment Operator 2.46 2.46 2.46 2.46 ——% Facilities Carpenter 1.00 1.00 1.00 1.00 ——% Facilities Maintenance-Lead 1.85 1.85 1.85 1.85 ——% Facilities Painter 1.75 1.75 1.75 1.75 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 8 TABLE OF ORGANIZATION Facilities Technician 4.05 4.05 4.05 4.05 ——% Heavy Equipment Operator 2.33 2.33 2.10 2.10 ——% Heavy Equipment Operator-Lead 0.85 0.85 0.85 0.85 ——% Inspector, Field Services 0.11 0.11 0.11 0.11 ——% Landscape Architect Park Planner 0.60 0.60 0.60 0.60 ——% Management Analyst*0.70 1.45 1.45 0.70 (0.75)(0.52)% Manager Environmental Control Program*———0.33 0.33 —% Manager Facilities 0.90 0.90 0.90 0.90 ——% Manager Maintenance Operations 1.20 1.20 1.20 1.20 ——% Manager Urban Forestry 0.96 1.00 1.00 1.00 ——% Manager Watershed Protection 0.05 0.05 0.05 0.05 ——% Project Manager***2.65 2.65 2.00 2.50 0.50 0.25% Senior Engineer 0.59 0.60 0.60 0.60 ——% Senior Management Analyst 1.11 1.11 1.11 1.11 ——% Supervisor Inspection and Surveying 0.10 0.10 0.10 0.10 ——% Surveyor, Public Works 0.33 0.33 0.33 0.33 ——% Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 ——% Traffic Controller Maintainer II 2.00 2.00 1.00 1.00 ——% Tree Maintenance Person 1.00 1.00 1.00 1.00 ——% Tree Trim/Line Clear 7.00 7.00 7.00 7.00 ——% Tree Trim/Line Clear-Lead 1.00 1.00 1.00 1.00 ——% WGW Heavy Equipment Operator ——0.23 0.23 ——% Total Public Works 49.41 50.61 48.35 49.26 0.91 1.9% Total General Fund 574.93 574.43 506.80 552.81 46.01 9.1% Enterprise Fund Public Works Account Specialist 0.30 0.30 ————% Accountant 0.40 0.40 0.70 0.70 ——% Administrative Associate I 0.10 0.10 —1.00 1.00 —% Administrative Associate II 2.15 2.15 2.15 2.15 ——% Administrative Associate III 0.10 0.10 0.20 0.20 ——% Assistant Director Public Works 1.30 1.30 1.30 1.30 ——% Assistant Manager WQCP 2.00 2.00 2.00 2.00 ——% Associate Engineer 2.99 3.00 3.00 3.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 9 TABLE OF ORGANIZATION Chemist 3.00 3.00 2.00 2.00 ——% Deputy Chief/Fire Marshal 0.07 0.07 0.07 —(0.07)(100.0)% Electrician 3.00 3.00 3.00 3.00 ——% Electrician-Lead 2.00 2.00 2.00 2.00 ——% Engineer 0.90 0.90 0.90 0.90 ——% Engineering Technician III 0.25 0.25 0.25 0.25 ——% Environmental Specialist*2.00 2.00 2.00 2.33 0.33 16.5% Equipment Operator 0.54 0.54 0.54 0.54 ——% Facilities Maintenance Lead 1.00 1.00 1.00 1.00 ——% Facilities Technician 1.50 1.50 1.50 2.50 1.00 66.7% Fire Marshal**———0.07 0.07 —% Hazardous Materials Inspector 0.04 0.04 0.04 0.04 ——% Heavy Equipment Operator 0.90 0.90 0.90 0.90 ——% Heavy Equipment Operator-Lead 1.15 1.15 1.15 1.15 ——% Industrial Waste Inspector 2.99 3.00 3.00 3.00 ——% Industrial Waste Investigator 1.15 1.15 1.15 1.15 ——% Laboratory Technician WQC 3.00 3.00 3.00 3.00 ——% Landfill Technician 1.00 1.00 1.00 1.00 ——% Management Analyst 2.30 2.30 2.30 2.30 ——% Manager Airport 1.00 1.00 1.00 1.00 ——% Manager Environmental Control Program*4.90 5.00 5.00 5.33 0.33 6.6% Manager Laboratory Services 1.00 1.00 1.00 1.00 ——% Manager Maintenance Operations 1.96 1.96 1.96 1.96 ——% Manager Solid Waste 1.00 1.00 1.00 1.00 ——% Manager Water Quality Control Plant 1.00 1.00 1.00 1.00 ——% Manager Watershed Protection 0.95 0.95 0.95 0.95 ——% Plant Mechanic 7.00 7.00 7.00 7.00 ——% Program Assistant I 1.00 1.00 1.00 1.00 ——% Program Assistant II 2.00 2.00 2.00 2.00 ——% Project Engineer 1.83 1.83 1.83 1.83 ——% Project Manager 1.35 1.35 1.35 1.35 ——% Senior Accountant 0.30 0.30 0.30 0.30 ——% Senior Buyer 1.00 1.00 1.00 1.00 ——% Senior Chemist 1.00 1.00 2.00 2.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 10 TABLE OF ORGANIZATION Senior Engineer 3.76 3.76 3.76 3.76 ——% Senior Industrial Waste Investigator 0.99 1.00 1.00 1.00 ——% Senior Management Analyst 0.21 0.21 0.21 0.21 ——% Senior Mechanic 1.00 1.00 1.00 1.00 ——% Senior Operator WQC 6.00 6.00 6.00 6.00 ——% Senior Technologist 1.00 1.00 1.00 1.00 ——% Storekeeper 1.00 1.00 1.00 1.00 ——% Street Maintenance Assistant 1.00 1.00 1.00 1.00 ——% Street Sweeper Operator 1.63 1.63 1.63 1.63 ——% Supervisor WQCP Operations 3.00 3.00 3.00 3.00 ——% Surveyor, Public Works 0.12 0.12 0.12 0.12 ——% Technologist 1.00 1.00 1.00 1.00 ——% Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 ——% WQC Plant Operator II 16.00 16.00 16.00 16.00 ——% Zero Waste Coordinator 1.00 1.00 1.00 1.00 ——% Total Public Works 101.19 101.32 101.32 103.98 2.66 2.6% Utilities Account Specialist 1.70 1.70 1.00 1.00 ——% Accountant 0.60 0.60 1.30 1.30 ——% Administrative Assistant 1.00 1.00 1.00 1.00 ——% Administrative Associate II 6.00 6.00 6.00 6.00 ——% Assistant City Attorney*———1.00 1.00 —% Assistant Director Administrative Services 0.25 0.25 0.25 0.25 ——% Assistant Director Utilities Customer Support Services 1.00 1.00 1.00 1.00 ——% Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 ——% Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 ——% Assistant Director Utilities/Resource Management 1.00 1.00 1.00 1.00 ——% Associate Sustainability Program Administrator** ———1.00 1.00 —% Business Analyst 6.00 6.00 6.00 6.00 ——% Cathodic Protection Technician Assistant 1.00 1.00 1.00 1.00 ——% Cathodic Technician 1.00 1.00 1.00 1.00 ——% Cement Finisher 2.00 2.00 2.00 2.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 11 TABLE OF ORGANIZATION Contracts Administrator 0.70 0.70 0.70 0.70 ——% Coordinator Utilities Projects*6.00 6.00 6.00 8.00 2.00 33.3% Customer Service Representative 7.00 7.00 7.00 7.00 ——% Customer Service Specialist 2.00 2.00 2.00 2.00 ——% Customer Service Specialist-Lead 2.00 2.00 2.00 2.00 ——% Deputy Chief/Fire Marshal 0.08 0.08 0.08 —(0.08)(100.0)% Deputy City Attorney*1.00 1.00 1.00 —(1.00)(100.0)% Director Administrative Services/CFO 0.20 0.20 0.20 0.20 ——% Electric Heavy Equipment Operator —2.00 2.00 1.00 (1.00)(50.0)% Electric Project Engineer*4.00 4.00 4.00 8.00 4.00 100.0% Electric Underground Inspector 2.00 2.00 2.00 2.00 ——% Electric Underground Inspector-Lead 1.00 1.00 1.00 1.00 ——% Electrical Equipment Technician 1.00 1.00 1.00 1.00 ——% Electrician Assistant I 3.00 3.00 3.00 3.00 ——% Engineer 4.00 4.00 4.00 4.00 ——% Engineering Manager - Electric 1.00 1.00 1.00 1.00 ——% Engineering Manager - WGW 1.00 1.00 1.00 1.00 ——% Engineering Technician III 3.00 3.00 3.00 3.00 ——% Environmental Specialist*———0.34 0.34 —% Equipment Operator ———1.00 1.00 —% Fire Marshal**———0.08 0.08 —% Gas and Water Meter Measurement and Control Technician 4.00 4.00 4.00 4.00 ——% Gas and Water Meter Measurement and Control Technician - Lead 1.00 1.00 1.00 1.00 ——% Hazardous Materials Inspector 0.06 0.06 0.06 0.06 ——% Heavy Equipment Operator 6.70 —————% Heavy Equipment Operator - Install/Repair 4.00 4.00 4.00 4.00 ——% Human Resources Representative ——1.00 1.00 ——% Industrial Waste Investigator 0.50 0.50 0.50 0.50 ——% Inspector, Field Services 5.00 5.00 ————% Inspector, WGW Utilities Field Svc ——5.00 5.00 ——% Lineperson/Cable Specialist 11.00 10.00 10.00 10.00 ——% Lineperson/Cable Specialist-Lead 4.00 4.00 4.00 4.00 ——% Maintenance Mechanic-Welding 2.00 2.00 2.00 2.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 12 TABLE OF ORGANIZATION Management Analyst**———1.00 1.00 —% Manager Communications 1.00 1.00 1.00 1.00 ——% Manager Customer Service 1.00 1.00 1.00 1.00 ——% Manager Electric Operations 1.00 1.00 1.00 1.00 ——% Manager Environmental Control Program*———0.34 0.34 —% Manager Treasury, Debt & Investments 0.40 0.40 0.40 0.40 ——% Manager Utilities Compliance 1.00 1.00 1.00 1.00 ——% Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 ——% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 ——% Manager Utilities Program Services*1.00 1.00 1.00 2.00 1.00 100.0% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 ——% Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 ——% Meter Reader 6.00 6.00 6.00 6.00 ——% Meter Reader-Lead 1.00 1.00 1.00 1.00 ——% Metering Technician*3.00 3.00 3.00 2.00 (1.00)(33.3)% Metering Technician-Lead 1.00 1.00 1.00 1.00 ——% Offset Equipment Operator 0.48 0.48 0.48 0.48 ——% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 ——% Power Engineer*1.00 1.00 1.00 —(1.00)(100.0)% Principal Business Analyst 1.00 1.00 1.00 1.00 ——% Principal Utilities Program Manager***———1.00 1.00 100.0% Program Assistant I 1.50 1.50 1.50 1.50 ——% Program Assistant II 1.00 1.00 1.00 —(1.00)(100.0)% Project Engineer 5.00 5.00 5.00 5.00 ——% Project Manager 0.75 0.75 0.75 0.75 ——% Resource Planner 5.00 5.00 5.00 5.00 ——% Restoration Lead 1.00 1.00 1.00 1.00 ——% SCADA Technologist 2.00 2.00 2.00 —(2.00)(100.0)% Senior Accountant 0.70 0.70 0.70 0.70 ——% Senior Business Analyst 3.00 3.00 3.00 3.00 ——% Senior Electrical Engineer 4.00 4.00 5.00 5.00 ——% Senior Engineer*5.00 5.00 5.00 6.00 1.00 20.0% Senior Management Analyst 0.70 0.70 0.70 0.70 ——% Senior Mechanic 1.00 1.00 1.00 1.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 13 TABLE OF ORGANIZATION Senior Performance Auditor 1.00 1.00 ————% Senior Resource Planner 6.50 6.50 6.50 7.00 0.50 7.7% Senior Utilities Field Service Representative 1.00 1.00 1.00 1.00 ——% Senior Water Systems Operator 2.00 2.00 2.00 2.00 ——% Storekeeper 1.00 1.00 1.00 1.00 ——% Storekeeper-Lead 0.80 0.80 0.80 0.80 ——% Street Light, Traffic Signal & Fiber Technician 5.00 5.00 5.00 4.00 (1.00)(20.0)% Street Light, Traffic Signal & Fiber-Lead 2.00 2.00 2.00 2.00 ——% Substation Electrician 6.00 6.00 6.00 6.00 ——% Substation Electrician-Lead 2.00 2.00 2.00 2.00 ——% Supervising Electric Project Engineer 1.00 1.00 ————% Sustainability Programs Administrator ——4.00 5.00 1.00 25.0% Tree Maintenance Person 1.00 1.00 1.00 1.00 ——% Utilities Chief Operating Officer 1.00 1.00 1.00 1.00 ——% Utilities Compliance Technician 2.00 3.00 3.00 3.00 ——% Utilities Compliance Technician-Lead 1.00 1.00 1.00 1.00 ——% Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 ——% Utilities Director 1.00 1.00 1.00 1.00 ——% Utilities Engineer Estimator 5.00 5.00 5.00 5.00 ——% Utilities Field Services Representative 5.00 5.00 5.00 5.00 ——% Utilities Install Repair-Lead-Welding Certified 2.00 2.00 2.00 3.00 1.00 50.0% Utilities Install Repair-Welding Certified 3.00 3.00 3.00 3.00 ——% Utilities Install/Repair 10.00 10.00 10.00 10.00 ——% Utilities Install/Repair Assistant 1.00 1.00 1.00 1.00 ——% Utilities Install/Repair-Lead 5.00 5.00 5.00 4.00 (1.00)(20.0)% Utilities Key Account Representative 3.00 3.00 3.00 3.00 ——% Utilities Locator 3.00 3.00 3.00 3.00 ——% Utilities Marketing Program Administrator 4.00 4.00 ————% Utilities Safety Officer 1.00 1.00 1.00 1.00 ——% Utilities Supervisor 12.00 12.00 12.00 12.00 ——% Utilities System Analyst**———2.00 2.00 —% Utilities System Operator 5.00 5.00 5.00 6.00 1.00 20.0% Utility Engineering Estimator - Lead 1.00 1.00 1.00 1.00 ——% Warehouse Supervisor 0.80 0.80 0.80 0.80 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 14 TABLE OF ORGANIZATION Water System Operator II 4.00 4.00 4.00 4.00 ——% WGW Heavy Equipment Operator —4.70 4.70 4.70 ——% Total Utilities 257.42 257.42 257.42 267.60 10.18 4.0% Total Enterprise Fund 358.61 358.74 358.74 371.58 12.84 3.6% Other Funds Capital Project Fund Administrative Assistant 0.15 0.15 0.65 0.65 ——% Administrative Associate I 0.80 0.80 ————% Administrative Associate III 0.89 0.89 0.80 0.80 ——% Assistant Director Public Works 0.72 0.72 0.72 0.72 ——% Associate Engineer 2.49 2.50 1.65 1.65 ——% Associate Planner 0.30 0.30 0.35 0.35 ——% Building Serviceperson 0.75 1.00 1.00 1.00 ——% Building Serviceperson-Lead 1.40 1.40 1.40 1.40 ——% Cement Finisher-Lead 0.74 0.74 0.74 0.74 ——% Chief Transportation Official 0.30 0.30 0.30 0.30 ——% Contracts Administrator 0.60 0.60 0.60 0.60 ——% Coordinator Public Works Projects 1.30 1.30 1.30 1.30 ——% Coordinator Transportation Systems Management 0.75 0.75 1.35 1.35 ——% Engineer 3.10 3.10 2.10 3.10 1.00 47.6% Engineering Technician III 0.50 0.50 0.50 0.50 ——% Facilities Technician 1.50 1.50 1.50 1.50 ——% Inspector, Field Services 1.21 1.21 1.21 1.21 ——% Landscape Architect Park Planner 0.90 0.90 0.90 0.90 ——% Management Analyst 0.94 0.95 0.95 0.95 ——% Manager Facilities 0.10 0.10 0.10 0.10 ——% Manager Maintenance Operations 0.65 0.65 0.65 0.65 ——% Parking Operations-Lead 0.40 0.40 0.30 0.30 ——% Project Engineer 7.59 7.62 7.92 7.92 ——% Project Manager 1.15 1.15 0.80 0.80 ——% Senior Engineer*2.99 4.04 4.04 4.64 0.60 14.9% Senior Management Analyst 0.60 0.60 0.60 0.60 ——% Senior Planner 0.50 0.50 0.80 0.80 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 15 TABLE OF ORGANIZATION Senior Project Manager 1.00 —————% Supervisor Inspection and Surveying 0.63 0.65 0.65 0.65 ——% Surveyor, Public Works 0.55 0.55 0.55 0.55 ——% Traffic Engineering-Lead*0.55 0.55 0.60 —(0.60)(100.0)% Transportation Planning Manager 0.35 0.35 0.45 0.45 ——% Total Capital Project Fund 36.40 36.77 35.48 36.48 1.00 2.8% Printing and Mailing Services Manager Revenue Collections 0.10 0.10 0.10 0.10 ——% Offset Equipment Operator 1.52 1.52 1.52 1.52 ——% Total Printing and Mailing Services 1.62 1.62 1.62 1.62 ——% Special Revenue Funds Account Specialist 1.87 1.87 1.37 1.37 ——% Account Specialist-Lead 0.55 0.55 0.55 0.55 ——% Administrative Assistant 0.35 0.35 0.25 0.25 ——% Administrative Associate II 0.20 0.20 0.20 0.20 ——% Associate Planner 0.25 0.25 ————% Community Service Officer 0.50 0.50 0.37 0.37 ——% Coordinator Public Works Projects 0.20 0.20 0.20 0.20 ——% Electrician 0.20 0.20 0.20 0.20 ——% Facilities Maintenance-Lead 0.15 0.15 0.15 0.15 ——% Facilities Painter 0.25 0.25 0.25 0.25 ——% Facilities Technician 0.45 0.45 0.45 0.45 ——% Management Analyst 0.35 0.35 0.35 0.35 ——% Manager Community Services Senior Program 1.00 1.00 1.00 1.00 ——% Manager Maintenance Operations 0.19 0.19 0.19 0.19 ——% Manager Revenue Collections 0.28 0.28 0.28 0.28 ——% Parking Operations-Lead 0.60 0.60 0.65 0.65 ——% Senior Planner 0.40 0.40 0.40 0.40 ——% Street Maintenance Assistant 2.00 2.00 2.00 2.00 ——% Street Sweeper Operator 0.37 0.37 0.37 0.37 ——% Transportation Planning Manager 0.50 0.50 0.50 0.50 ——% Total Special Revenue Funds 10.66 10.66 9.73 9.73 ——% Technology Fund Administrative Assistant 1.00 1.00 1.00 1.00 ——% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 16 TABLE OF ORGANIZATION Assistant Director Administrative Services 0.10 0.10 0.10 0.10 ——% Business Analyst 1.00 1.00 1.00 1.00 ——% Desktop Technician 6.00 6.00 6.00 6.00 ——% Director Information Technology/CIO 1.00 1.00 1.00 1.00 ——% Manager Information Technology 3.00 3.00 3.00 3.00 ——% Manager Information Technology Security 1.00 1.00 ————% Principal Business Analyst 1.00 1.00 ————% Senior Business Analyst 2.00 2.00 2.00 2.00 ——% Senior Management Analyst 1.00 1.00 1.00 1.00 ——% Senior Technologist*18.00 18.00 14.00 16.00 2.00 14.3% Technologist 1.00 1.00 ————% Total Technology Fund 36.10 36.10 29.10 31.10 2.00 6.9% Vehicle Replacement and Maintenance Fund Assistant Director Public Works 0.25 0.25 0.25 0.25 ——% Assistant Fleet Manager 1.00 1.00 1.00 1.00 ——% Equipment Maintenance Service Person 2.00 2.00 1.00 1.00 ——% Fleet Services Coordinator 1.00 1.00 1.00 1.00 ——% Management Analyst 0.20 0.20 0.20 0.20 ——% Management Assistant 1.00 1.00 1.00 1.00 ——% Manager Fleet 1.00 1.00 1.00 1.00 ——% Motor Equipment Mechanic II 6.00 6.00 5.00 5.00 ——% Motor Equipment Mechanic-Lead 2.00 2.00 2.00 2.00 ——% Project Manager 1.00 1.00 1.00 1.00 ——% Senior Management Analyst 0.08 0.08 0.08 0.08 ——% Total Vehicle Replacement and Maintenance Fund 15.53 15.53 13.53 13.53 ——% Workers' Compensation Program Fund Senior Human Resources Administrator 1.00 1.00 1.00 1.00 ——% Total Workers’ Compensation Program Fund 1.00 1.00 1.00 1.00 ——% Total Other Funds 101.31 101.68 90.46 93.46 3.00 3.3% Total Citywide Positions 1,034.85 1,034.85 956.00 1,017.85 61.85 6.5% Table of Organization FY 2020 Actuals FY 2021 Actuals FY 2022 Adopted Budget FY 2023 Adopted Budget FY 2023 Change FTE FY 2023 Change % ATTACHMENT A, EXHIBIT 5 17 TABLE OF ORGANIZATION *The FY 2022 Adopted Budget does not include City Council actions to amend staffing levels approved in the Preliminary Q1 FY 2022 Financial Status Update (CMR 13439), Staffing for Adequate Fire and Emergency Response (SAFER) Grant Acceptance (CMR 13643), and FY 2022 Mid-Year Budget Review (CMR 13801). These positions appear as a base adjustment in the FY 2023 Proposed Budget. **The FY 2023 Proposed Budget includes new job classifications that require completion of a meet and confer process with the respective bargaining groups to negotiate terms for wages, hours, and other employment conditions. Proposals in this budget include estimated funding levels for financial planning purposes only and do not reflect the final negotiated terms of the proposed classifications. ***Positions approved by Finance Committee and/or City Council subsequent to the presentation of the FY 2023 Proposed Budget. ATTACHMENT A, EXHIBIT 5 18 Attachment A, Exhibit 6: Page 1 of 2 Municipal Fee Schedule Amendments for FY 2023 Changed Fees ATTACHMENT A , Exhibit 6 Administrative Services Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification Budget Book $35.00 each $40.00 each 14.3% Fees aligned to cover minimum material and staffing costs Community Services Department Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification Auditorium and Stage Resident Fee: $250.00 per hour; Non-Resident Fee: $375.00 per hour Resident Fee: $270.00 per hour; Non-Resident Fee: $405.00 per hour 8.0% Align fee to actual costs Field Trips $152.00 per group $200.00 per group 31.0% Palo Alto Junior Museum & Zoo Attendant Regular time: $34.00 per hour; Overtime & Holiday: $51.00 per hour Regular time: $44.00 per hour; Overtime & Holiday: $66.00 per hour 29.4% Tennis Courts (USTA and Palo Alto Tennis Club Only) Resident Fee: $7.00 per hour; Non-Resident Fee: $9.00 per hour Resident Fee: $8.00 per hour; Non-Resident Fee: $10.00 per hour 12.7% Rehearsal Hall Resident Fee: $50.00 per hour; Non-Resident Fee: $75.00 per hour Resident Fee: $54.00 per hour; Non-Resident Fee: $81.00 per hour 8.0% Peers Park, Mitchell Park Field House) $28.00 per hour Resident Fee: $174.00 per day; Non-Resident Fee: $235.00 per day - Fee structure change from hourly to daily Fire Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification Paramedic Internship Fee $1,394.00 each $1,000 each -28.3%Fee set low to keep competitive with other agencies Office of Transportation (OOT) Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification All Downtown and SOFA Lots and Garages Annual Parking Permit $806.00 per year $900.00 per year 11.7% FY 2023 Pricing based on CMR#11795 California Avenue Area All Garages and Lots Annual Parking Permit $403.00 per year $650.00 per year 39.0% Downtown RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year - Downtown RPP - Reduced-Price Employee Parking Permit $50.00 per six months $131.25 per six months 162.5% Downtown RPP Full Price Employee Parking Permit $403.00 per six months $525.00 per six months 30.3% Evergreen Park - Mayfield RPP Annual Resident Parking Permit $50.00 per year $50.00 per year - Evergreen Park - Mayfield RPP Full Price Employee Parking Permit $201.50 per six months $375.00 per six months 86.1% Evergreen Park - Mayfield RPP Reduced-Price Employee Parking Permit $25.00 per six months $93.75 per six months 275.0% Southgate RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year - Southgate RPP - Full Price Employee Parking Permit $201.50 per six months $375.00 per six months 86.1% Southgate RPP - Reduced Price Employee Parking Permit $25.00 per six months $93.75 per six months 275.0% Planning and Community Environment Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification Community Center Impact Fee Single Family $4,438.00 per unit; Multi-Family $3,283.00 per unit Community Center Impact Fee Commercial/Industrial $1,301.00 per net new 1,000 sq. ft.; Hotel/Motel $222.00 per net new 1,000 sq. ft. Library Impact Fee Single Family $2,645.00 per unit; Multi-Family $1,956.00 per unit Library Impact Fee Commercial/Industrial $776.00 per net new 1,000 sq. ft.; Hotel/Motel $132.00 per net new 1,000 sq. ft. Park Impact Fee Single Family $57,420.00 per unit; Multi-Family $42,468.00 per unit Park Impact Fee Commercial/Industrial $16,837.00 per net new 1,000 sq. ft.; Hotel/Motel $2,866.00 per net new 1,000 sq. ft. Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Updated Fee pending Finance Committee recommendation to Council on May 3, 2022 Finance Committee recommendation to Council on May 3, 2022 to determine appropriate method to update the fees Attachment A, Exhibit 6: Page 2 of 2 Municipal Fee Schedule Amendments for FY 2023 Changed Fees Public Works Fee Title FY 2022 Adopted FY 2023 Proposed % Change Justification Home Improvement Exception – Trees $739.00 per application $432.00 per application -41.5%Fees aligned to modified salary costs of staff time required for this service IR Review – Trees $319.00 per application $672.00 per application 110.7% A. Pavement Condition: Poor $11.00 per square foot $12.00 per square foot 9.1% Fees aligned to increased cost of supplies B. Pavement Condition: Fair/At-Risk $13.00 per square foot $15.00 per square foot 15.4% C. Pavement Condition: Good $16.00 per square foot $18.00 per square foot 12.5% D. Pavement Condition: Very Good - Excellent $23.00 per square foot $25.00 per square foot 8.7% ATTACHMENT A , Exhibit 6 ATTACHMENT B Fiscal Year 2023 Update on the Sustainability and Climate Action Plan (S/CAP) As the work on the S/CAP update has continued, budget proposals have been included in both the FY 2022 Mid-Year (CMR 13801) and FY 2023 Budget to reflect the priorities identified through the work of the S/CAP Ad Hoc Committee and the S/CAP’s status as one of the 2022 Council Priorities. The S/CAP is a cross-departmental effort primarily involving the Office of Transportation, Planning and Development Services, Public Works, and Utilities Departments. As the S/CAP work has progressed, it has become clear that reaching the City’s goal of reducing carbon emissions 80 percent from 1990 levels by 2030 (80X30 goal) relies on electrification of transportation, homes, and businesses. Electrification of single-family homes has been identified as a particular focus, because conversions from gas to electric heat pump appliances in homes has been found to be cost-effective and analysis has shown that effectively 100 percent of single-family homes need to be electrified to meet the 80X30 goal. As staff considers the development of programs that will ultimately be scalable to provide for the transformation that is needed, the progress can be thought of as occurring in three phases: Discussion Strategy Operations To date, development of S/CAP electrification programs has primarily been in the Discussion phase, with certain incentive and education programs underway, and ongoing exploration with the S/CAP Ad Hoc Committee and community engagement helping to inform next steps. The S/CAP Working Group Teams are currently working to define an advanced pilot program for significant numbers of citywide heat pump water heater installations, and staff and the Ad Hoc Committee plan to bring the details of this program to City Council in September. This program will move into the Strategy phase, with a structure intended to be scalable to the Operations phase to support the production levels needed for full electrification of residential water heaters by 2030. The Discussion phase conversations have also helped staff to identify certain key functional areas that must be integrated and responsive to allow S/CAP programs to progress to the Operations phase, even though they are located in different organizational units and/or departments. These functional areas are: Programs, Utility Integration, Permitting, Communications, and Finance. • Programs: Utilities added $2.8 million in the FY 2023 budget to support the launch and operation of programs to help residents and businesses electrify equipment. The programs include analysis, contract management, program administration, program monitoring and improvement, managing customer experience, and sales and marketing. Much day to day program operation is performed by contractors, but oversight and coordination of these vendors and the programs themselves requires significant staff work. • Utility Integration: This includes 1) the review of incoming applications for new electrified devices or all-electric buildings, upgrading the local electric grid to accommodate it, and modifying the local gas system as needed (e.g. removing gas service lines), and 2) planning for systematic grid modernization to accommodate even more widespread electrification. Staffing is a significant challenge for this program, with high vacancy rates in Utilities Electric Engineering and Operations. Significant shares of this work will be performed by contractors, but even staff capacity to manage contractors is limited due to recruitment and retention issues. ATTACHMENT B • Permitting: This includes 1) review of incoming electrification applications for code compliance, 2) permit streamlining efforts, including partnerships with Utilities program operators, and 3) development of new codes, such as Energy Reach Codes. • Communications: This includes engagement and outreach efforts to make the community aware of the need for action on climate change and the things residents can do. It includes partnerships with local volunteer organizations. General communications efforts also are coordinated with sales and marketing of specific electrification programs. • Finance: This includes coordinating the funding of all other program areas. With funding sources limited, programs need to be designed and prioritized based on their ability to generate emissions reductions cost-effectively and in a way that keeps the need for additional funding such as highly impactful rate increases or major tax increases to a minimum and makes efficient use of available funding sources like grants and State emissions reduction programs. Many of these programs are aligned with the responsibilities of existing organizational units and will be staffed by reorganizing work plans of these units. The staffing requests in the FY 2022 mid-year and FY 2023 budget will complement these reorganizations by providing additional project management and operational capacity where needed. • 1.0 Sustainability Programs Administrator (Utilities, FY 2023 Budget): This position adds staff capacity in the Programs area, which is primarily being managed by Utilities Program Services, a workgroup within the Utilities Resource Management Division, enabling it to expand residential electrification programs. • 1.0 Manager, Utilities Program Services (Utilities, FY 2022 Mid-year): This working manager provides both staff capacity and leadership capacity in the Programs Area (Utilities Program Services) for non-residential electrification programs and partnerships with major employers. • 1.0 Manager, Environmental Programs and 1.0 Environmental Specialist (Public Works, FY 2022 Mid-year): These positions expand the Sustainability Office to facilitate inter-departmental coordination on climate change and non-climate sustainability efforts, to coordinate with the Chief Communication Officer and team on sustainability communications, and to facilitate expanded City partnerships with non-governmental organizations, the State, and other agencies. • 3.0 Electric Project Engineers (Utilities, FY 2022 Mid-year): These positions provide the needed staff capacity to manage impacts to utility systems from electrification while managing regular investment. Additional action on recruitment and retention issues is needed to make full use of these positions due to the challenges of attracting and retaining power engineering staff. • 1.0 Senior Engineer (Public Works, FY 2022 Mid-year) and 1.0 Principal Utilities Programs Administrator (Utilities, FY 2023 Budget): These positions will provide inter-departmental oversight of the climate action element of the S/CAP and coordination of Utilities inter-Divisional coordination of technical and operational aspects of the plan. The management structure for the Operational phase of the S/CAP incorporating these positions is still in development There were also staffing reclassifications in the FY 2022 mid-year and FY 2023 budget to better reflect their role in Climate Action Plan implementation (Metering Technician to Utilities Project Coordinator, Program Assistant II to Associate Sustainability Program Administrator, and Power Engineer to one of the three Electric Project Engineer listed above) and the addition of 0.5 FTE of Senior Resource Planning staff (bringing two 0.75 FTE positions to 1.0 each) to manage the sustainability elements of the S/CAP. City of Palo Alto (ID # 14112) Finance Committee Staff Report Meeting Date: 6/7/2022 Report Type: Action Items City of Palo Alto Page 1 Title: Accept June 30, 2021 Actuarial Valuation of Palo Alto's Retiree Healthcare and Other Post Employment Benefits, Approve Annual Actuarially Determined Contributions for Fiscal Years 2023 and 2024, and Affirm Additional Payments to Employers' Benefit Trust Fund From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that the Finance Committee recommend the City Council: 1. Review and accept the June 30, 2021 actuarial valuation of Palo Alto’s Retiree Healthcare Plan; 2. Approve full funding of the annual Actuarial Determined Contribution (ADC) for Fiscal Year 2023 and Fiscal Year 2024 using the staff recommended adjusted assumptions; and 3. Affirm the continued the practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City’s California Employers’ Retiree Benefit Trust (CERBT) Fund. EXECUTIVE SUMMARY In accordance with the Governmental Accounting Standards Board (GASB), the City Council is required to review and approve the actuarial valuation for retiree healthcare plan on a bi- annual basis for the upcoming two fiscal years and approve funding of the annual Actuarial Determined Contribution (ADC). This current study presents the fund’s status as of June 30, 2021 and will be used to inform the FY 2023 and FY 2024 annual operating budgets. This report was finalized after the development of the FY 2023 Proposed Budget. Therefore, funding levels in the FY 2023 Proposed Budget reflect the out years of the prior study completed on June 30, 2019 (CMR 11284). Funding levels recommended by the Finance Committee as part of this discussion will be included as an amendment to the FY 2023 Proposed Budget and included for City Council adoption of the budget on June 20, 2022. The City continues to selecta Strategy 1 asset allocation, currently projected at a 6.25 percent discount rate for the California Employers’ Retirement Benefit Trust (CERBT) Fund, managed by CalPERS. Beginning with the June 30, 2019, valuation (CMR 11284), the City Council directed staff to calculate additional discretionary payments (“prefunding”) equivalent to a 6.25 percent discount rate and transmit amounts above payments at a 6.75 percent discount rate to the City of Palo Alto Page 2 CERBT Fund. The CERBT was subsequently reduced from 6.75 percent to 6.25 percent; therefore, this new target beginning with the June 30, 2021 valuation, is in-line with the prefunding assumptions used in the prior valuation. Through FY 2022, a total of $3.5 million in additional contributions are expected to be made to the CERBT. The June 30, 2021, valuation includes several changes that have favorably impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic and continued proactive funding contributions: • 2020-21 investment returns of 27.5 percent (6.25 percent target); • Lower than anticipated healthcare premiums; and • Accumulated contributions (full ADC payments and prefunding) These favorable changes are advised to be taken in consideration of an uncertain environment. Current portfolio earning is not expected to meet target return this year (FY 2022) and it is not known whether the recent change in healthcare premiums will be ongoing or an anomaly due to the significant governmental support of healthcare costs over the past two years. Because we do not know whether these favorable changes are the beginning of a trend, or merely a temporary anomaly, this report includes several options to fund Other Post-Employment Benefit (OPEB) obligations for Finance Committee review and discussion beyond the typical recommended “baseline” strategy. • Recommended Funding: consider alternative assumptions that are intended to better align with the current economic outlook and proactive funding of long-term liabilities. • Alternative 1 (“baseline”): reflects the ADC for current City Council approved funding levels and actuary assumptions. The below table provides a summary of the options and a comparison of costs to the FY 2023 Proposed Budget in all funds. A more detailed discussion of these options is included in this report. All options reflect expected savings when compared to assumptions currently built in the FY 2023 Proposed Budget as reviewed by the Committee in May. Staff recommends that any savings remain unallocated and fall to respective funds fund balance/reserves based on standing policies, unless otherwise directed. Table 1: Funding for the FY 2023 OPEB Obligations FY 2023 OPEB Funding $ Change FY 2023 Proposed Budget (based on June 30, 2019 valuation) $16.9M - Recommended Funding Adjusted Assumptions • Zero percent return 2021-22 • Proactive contribution at lower discount rate of 5.75 in ADC • Shorten Amortization period (from 22 to 15 years) • Additional funding for FY 2023 Proposed staffing $16.3M ($0.6M) City of Palo Alto Page 3 Alternative: Baseline • Current approved funding levels assuming a 6.25 percent discount rate • No proactive contribution at lower discount rate • Assumed earnings in 2021-22 at planned levels (6.25 percent) $11.4M ($5.5M) *Approximately 65 percent of costs are allocated to the General Fund. BACKGROUND The City of Palo Alto offers its employees and retirees a Retiree Healthcare benefit plan which is managed and administered by the California Public Employees’ Retirement System (CalPERS), a State of California Retiree Healthcare Trust program. Bi-annually staff contracts with an actuary firm that provides an actuarial report detailing the latest status of the City of Palo Alto’s Retiree Healthcare plans for employees and retirees. The actuarial report is used to calculate the annual ADC to the trust. In addition, updates on the rate of return, funding status, and changes to the trust based on various impacts are detailed in the report. Unlike the pension actuary reports, this actuary details impacts by Fund, Department, Employee Group, and Healthcare Plans selected. There are four groups of benefits within the CalPERS Retiree Healthcare benefit plans. Table 1 below outlines the different benefits levels by Group. These benefit levels are negotiated and approved as part of the employee contracts. Employees and retirees have an open enrollment window in October each year in which they can make changes to their healthcare plans that take effect in January of the following year. Table 2: City of Palo Alto Retiree Healthcare Benefit Plans and Tiers Miscellaneous Safety: Fire Safety: Police Group 1 Retired before January 1, 2007; eligibility starting at the age 50 and 5 years of service; full premium up to family coverage Retired before January 1, 2007; eligibility starting at the age of 50 and 5 years of service; full premium up to family coverage Retired before March 1, 2009; eligibility starting at the age of 50 and 5 years of service; full premium up to family coverage Group 2 Retired between January 1, 2007 and May 1, 2011; eligibility starting at the age 50 and 5 years of service; same as Group 1, but premium limited to 2nd most expensive medical plan Retired between January 1, 2007 and December 1, 2011; eligibility starting at the age 50 and 5 years of service; same as Group 1, but premium limited to 2nd most expensive medical plan Retired between March 1, 2009 and April 1, 2015 (POA), between January 1, 2007 and June 1, 2012 (PMA) ; eligibility starting at the age 50 and 5 years of service; same as Group 1, but premium limited to 2nd most expensive medical plan Group 3 (Retirees) Retired after Group 2, did not elect into Group 4, benefit same as active employees Group 3 (Active EEs) Currently active, not in Group 4. Flat Dollar Caps equal to actives N/A (All active Group 3 IAFF & FCA elected into Group 4) N/A (All active Group 3 POA & PMA elected into Group 4) Group 4 Vesting Schedule: 10 years gets 50%, 20 years gets 100%, formula amount Vesting Schedule: 10 years gets 50%, 20 years gets 100%, formula amount Vesting Schedule: 10 years gets 50%, 20 years gets 100%, formula amount City of Palo Alto Page 4 CalPERS Projected Contribution Levels The actuary report has two components to the annual billing of the employer portion of retiree healthcare contributions that comprise the Actuarial Determined Contribution (ADC), 1) the Normal Cost (NC), and 2) the Unfunded Actuarial Accrued Liability (UAAL). • NC: This reflects a rate of contribution for the plan of retirement healthcare benefits provided to current employees based on the current set of assumptions. • Employer Amortization of UAAL: This is an annual payment calculated to pay down an agency’s unfunded accrued liability. Assuming every assumption in the actuarial valuation was accurate, an organization would eliminate its unfunded pension liability if it made these payments annually for 30 years. The City Council approved a closed period to amortize the entire net pension liability over a specific timeframe, and 22 years of payments remain as of June 30, 2021. The total liability will vary from one year to the next because of assumption changes and actuarial experience that is different from anticipated, such as actual investment returns that do not meet expectations. As established by the City Council, the City’s CERBT Fund is invested in a Strategy 1 asset allocation at a 6.25 percent discount rate. Beginning with the June 30, 2019, valuation (CMR 11284), consistent with the City’s proactive pension funding policy, the City Council approved the calculation of ADC at a lower 6.25 percent discount rate, transmitting the amounts above a 6.75 percent discount rate as an additional discretionary payment (“prefunding”) to the CERBT Fund. Other proactive measures to mitigate the increasing costs of healthcare plans for current and future retirees include cost sharing with employees, capping the plans covered, and establishing a flat contribution that can be adjusted with each labor agreement for active employees. The City’s CERBT Fund was established in May 2008 at a level of $33 million and it has grown to $164 million as of March 31, 2022. DISCUSSION Summary of Actuarial Report June 30, 2021 Staff contracted with Bartel Associates, LCC (BA) for this retiree healthcare actuarial report (Attachment A) to determine the City’s retiree healthcare liability and the ADC for Fiscal Years 2023 and 2024. The actuarial analysis is based on current employees’ accrued benefit, and retired employees as of June 30, 2021. This updated valuation includes several changes that have favorably impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic. Most notably, investment returns for 2020-21 reached an unprecedented level of 27.5 percent for the period. This level of return had a significant impact on the overall status of the fund and is not expected to continue in future periods. Healthcare premiums were lower City of Palo Alto Page 5 than anticipated likely due to government funding of pandemic-related healthcare costs, deferral of individual healthcare visits during the pandemic due to personal safety decisions and public health orders and use of CalPERS reserves to keep premiums down. The full impact on healthcare costs resulting from the pandemic is yet to be determined and is expected to be factored into future valuation reports based on actual experience in costs. As an actuarial study, the calculation is based on the information at this time, which reflects this significantly lower cost. Staff and Bartel Associates are skeptical on the longevity of these lower costs, versus the immediate result of the variables noted previously. Beginning with this valuation, based on the favorable changes, baseline projections reflect accumulated contributions to the CERBT may be used to pay a portion of the annual retiree medical costs. This is a result of asset growth, where returns generated on higher asset levels are sufficient to contribute toward a portion of the annual benefit payments. The ability to use returns for this purpose is a goal of the prefunding strategy and a sign that a good practice is in place. Achieving this status was anticipated to occur as a result of prefunding, however, has occurred sooner than anticipated due to the favorable impacts discussed above. Discount Rate Assumptions The City Council has taken great interest to ensure long-term liability assumptions and costs for pension and OPEB are being proactively addressed, including the adoption of a Pension Policy that assumes a 6.2 percent discount rate for pension costs compared to CalPERS rate of 7.0 percent (CMR 11722) and starting in FY 2023 a potential phased-in reduction to 5.3 percent or alternative rate as designated by Council, to better align with market survey results included in the most recent CalPERS Asset Liability Management (ALM) study. Additionally, the City Council has taken actions to invest at an estimated discount rate for OPEB of 6.75 percent and transmit additional contributions to prefund OPEB obligations at the equivalent of a 6.25 percent discount rate. The CERBT has subsequently reduced the discount rate from 6.75 to 6.25 percent; therefore, no prefunding is necessary to meet this target beginning with the June 30, 2021 valuation. Through FY 2022, a total of $3.5 million in additional contributions are expected to be contributed to the CERBT. Discussed above, the ADC is impacted when actual experience differs from assumptions. One of the more significant impacts to ADC occurs when actual investment returns do not meet expectations. The following graph presents historical returns, looking back to 2008-09. City of Palo Alto Page 6 Figure 1: Historical Returns of the OPEB Trust (Market Value of Plan Assets (MVA) and Expected Return) Projected Unfunded Actuarial Accrued Liability This actuarial report includes the plan’s “Funded Status.” As of June 30, 2021, the CERBT Trust is funded at 70 percent, up 1,200 basis points from 58 percent in the June 30, 2019 actuarial valuation. As of June 30, 2021, the Unfunded Actuarial Accrued Liability (UAAL) was $80.0 million for all funds and $51.5 million for the General Fund. Beginning with the June 30, 2013 valuations, the City aligned its actuarial analysis to align with GASB’s rules regarding the “implied subsidy”. The calculation of implied subsidy requires an agency to recognize that it pays the same medical premiums for active employees as those that are retired. The implied subsidy identifies and accounts for the agency paying the same blended premium for both active employees and retirees, even though the medical cost for active employees is lower than retirees. Palo Alto had 874 active employees and 1,009 retirees as of June 30, 2021. The calculation increases the UAAL by $15.1 million or 18.9 percent; without the implied subsidy the UAAL for all funds would be at $64.9 million. Table 3: Unfunded Actuarial Accrued Liability (UAAL) As of June 30, 2019* As of June 30, 2021 Projected June 30, 2022 Citywide – UAAL $122,972 $80,027 $76,159 General Fund – UAAL $82,624 $51,522 $49,032 Funded Ratio) 49.0% 67.2% 70.0% Citywide UAAL % Change from prior valuation -35.0% -38.1% * The June 30, 2019 values are based on a 6.75 percent discount rate. Beginning June 30, 2021, the discount rate has been reduced from 6.75 to 6.25 percent Sensitivity Analysis: Discount Rate and Amortization Period CalPERS recognizes the varying assumptions that may impact a plan’s unfunded actuarial City of Palo Alto Page 7 accrued liability and therefore a retiree healthcare plan’s funding status, especially the implications of the discount rate and amortization assumptions. Therefore, in addition to the actuarial assumptions used to develop this annual evaluation, BA includes a sensitivity analysis of the retiree healthcare plan. Table 4 below reflects the impact on UAAL resulting from a reduction in the discount rate. Table 5 reflects the impact on ADC if the UAAL is amortized over different timeframes. It should be noted that the Council has adopted a Pension Funding Policy seeking to reach a 90 percent funded level in what remains to be approximately 14-15 years, a shorter period that the sensitivity scenarios below. Table 4: Discount Rate Sensitivity 6.25% (Current) 5.75% 5.25% Citywide – UAAL $80,027 $94,571 $110,567 General Fund – UAAL $51,522 $60,886 $71,184 Funded Ratio 67.2% 63.4% 59.8% Table 5: Amortization Sensitivity 22 Years (Current) 20 Years 18 Years Normal Cost $6,316 $6,316 $6,316 UAAL Amortization $5,112 $5,459 $5,887 Total ADC $11,428 $11,775 $12,203 ADC (% of payroll) 10.3% 10.6% 11.0% * Includes administrative expenses Funding for the FY 2023 Including Actuarial Determined Contribution (ADC) This section outlines staff’s recommended funding level for OPEB obligations beginning in FY 2023 for Finance Committee review and discussion and an alternative. Due to the uncertainties noted previously that are unique to this report and given the limited data on the impacts of COVID-19, staff recommend alternatives assumptions that are rooted in the City’s Pension Funding Policy, may be adjusted later in a subsequent fiscal year, and position the City to smooth potential volatility in projected liabilities. A key result of the recovery period as the pandemic moves into an endemic is a need to foster and work towards stability as an organization; this stability helps ensure continued focus on high priority projects, supports recruitment and retention efforts in a competitive labor market, and ensures a readiness and nimbleness to adapt to changes. Acknowledging these lessons, staff recommends the Finance Committee consider an alternative funding approach that adjusts assumptions based on current data and the principles noted above. Staff have also outlined an alternative, or “baseline” scenario for consideration. This funding level may be adjusted annually based on City Council direction, so long as the baseline ADC is met. Staff Recommended Funding for FY 2023 OPEB Obligations Staff recommend adjusting funding from the typical baseline calculation to better align with the current economic outlook, the current instability in the assumptions used to calculate the City of Palo Alto Page 8 baseline and continue to proactively fund long-term liabilities. Recommended revisions to baseline assumptions include: o Assume a zero percent investment return for the current 2021-22 period: The most recent March 31, 2022 quarterly report from CERBT reported year-to-date investment returns of negative 1.39 percent as compared to a 6.25 percent target. This scenario assumes investment returns of zero percent for the period ending June 30, 2022 to hedge against returns that may not be realized. o Exclude proactive contributions at a lower discount rate towards the ADC: Consistent with the pension proactive funding, this would treat the proactive contributions assuming a lower discount rate of 5.75 as if in a separate “trust” or “saving account.” ADC calculations will remain at consistent levels and these proactive contributions remain additive to baseline calculations of liability. o Assume a shortened amortization period from 22 to 15 years: This change in the amortization period will more closely align OPEB with the City’s Pension Policy goals to reach a 90 percent funded status over 15 years (by FY 2036). The City Council previously approved a 30-year closed amortization period of which 22 years remain as of June 30, 2021. o Assume additional normal costs or “pay-go” costs: Adjust funding to include costs for the recommended additional staffing as approved or being considered for approval in FY 2023. This option results in an FY 2023 Proposed ADC of $16.3 million citywide ( $9.9 million in the General Fund), a $0.6 million reduction from the $16.9 million ADC in the FY 2023 Proposed Operating Budget. Baseline The baseline calculation reflects standard actuarial calculations and existing City Council direction assuming the Strategy 1 asset allocation at a 6.25 percent discount rate. Since this rate reflects the 6.25 percent discount rate approved by the City Council to assume for additional discretionary payments to the CERBT Fund, no additional prefunding payments are assumed in the baseline calculation. Unlike the CalPERS pension plan, additional City contributions do not go into a separate Section 115 trust; instead, they remain in the plan and are included as assets in the CERBT each subsequent year, impacting the calculation of the ADC. This treatment of prefunding contributions included in assets and effectively reduce the ADC each future year. Overall, this baseline reflects an FY 2023 Proposed ADC of $11.4 million citywide ( $7.1 million in the General Fund), a $5.5 million reduction from the $16.9 million ADC in the FY 2023 Proposed Operating Budget. FY 2023 Proposed Staffing Additional Normal Cost Contributions To be factored in all calculations of funding for FY 2023 is the potential addition of nearly 60 full-time staff since the June 30, 2021 valuation date: 20 full-time positions during FY 2022, and City of Palo Alto Page 9 nearly 40 full-time positions in the FY 2023 Proposed Budget (mostly in the General Fund). As reported in this valuation, the average salary of active employees is approximately $120,000 and the variable portion of ADC, or normal cost for current employees, is 5.6 percent of payroll. Under these assumptions, the retiree healthcare cost of the additional staffing is approximately $400,000. Staff recommends that this associated retiree health cost be included in the final budget for Council consideration for FY 2023 adoption in alignment with the assumptions in the recommended option above. Stakeholder Engagement The transmittal of the actuarial valuation as of June 30, 2021 begins conversations regarding the fiscal outlook for the City’s OPEB liabilities and the appropriate contribution for the FY 2023 Actuarial Determined Contribution. Public discussion will be held with the Finance Committee on June 7, 2022, prior to City Council review and adoption of the FY 2023 Budget, currently scheduled for June 20, 2022. Resource Impact The FY 2023 Proposed Budget includes an ADC of $16.9 million, an increase of $0.5 million from FY 2022 Adopted levels of $16.4 million. Staff recommendations in this report result in funding levels of $16.3 million, a net savings of $0.6 million from the FY 2023 Proposed Budget in all funds. Funding levels recommended by the Finance Committee will be included as an amendment to the FY 2023 Proposed Budget for City Council adoption of the budget on June 20, 2022. Staff will incorporate this direction on an ongoing basis beginning in FY 2024. Future funding is subject to City Council approval through the annual budget process. The recent market fluctuations and overall impact of the current pandemic are yet to be fully realized. These reports are calculated bi-annually and reflect market conditions at that point in time. This Trust experienced gains in this most recent report, however, will continue to be closely monitored. Environmental Review This report is not considered a project for the purposes of the California Environmental Quality Act (CEQA). Environmental review is not required. Attachments: y outh community service PO Box 61000, palo alto, ca 94306 voice: 650.858.8019 www.youthcommunityservice.org December 16, 2019 Minka Van Der Zwaag Office of Human Services Cubberley Community Center 4000 Middlefield Road, T2 Palo Alto, CA 94303 Dear Minka, We are writing to express our appreciation at Youth Community Service (YCS) for the $50,000 annual City of Palo Alto contract for our Youth Connectedness Initiative (YCI). That three-year contract runs from July 2017 to June 2020 and has an annual $50,000 match from Santa Clara County for a leveraged budget of $100,000. We’re writing to share this 2017-2019 Impact Report on our work on YCI to date in the Palo Alto community with youth ages 14 to 18 and with parents and adult allies. The three-year YCI was a response to surveys showing a need for Palo Alto youth to develop more protective factors against stress, including the CDC Epi-Aid Suicide Prevention Report that reported a youth suicide rate in Palo Alto at 14.1 per 100,000 persons, the highest rate in the County and more than double than that of the County. The YCI project was designed with evidence-based strategies from CDC Epi-Aid recommendations, program strategies from the Search Institute “Developmental Relationships framework,” and decades of Youth Community Service experience. YCI engages youth and adults in service learning and parent/adult education with the aim of building meaningful relationships. YCI is unique in its two pronged approach; a Peer Leader program where youth work on service learning projects centered on wellness, and the Parent Program where YCI hosts workshops for parents and youth-serving adults to educate on increasing protective factors. The 2017-2019 Impact Report includes the following information: • YCI Parent Program survey results demonstrating growing parent engagement and satisfaction, as well as increasing impact through collaboration with multiple wellness program partners • YCI Youth Peer Leader Program description of our peer leader team, events and achievements • Budget information on YCS financial strategies to leverage the annual City budget for greater Palo Alto community impact. We believe that this Impact Report makes a strong case for renewal of an additional 2020 to 2023 three-year contract for the following reasons: 1. The program staff and student peer leader team have established strong momentum and leveraged impact through a growing network of school, City and community partners. We shared costs for our most recent parent educator from Search Institute with YMCA Project Cornerstone, and the event was co-sponsored by over 20 youth and adult wellness partners. 2. YCI program leaders continue to demonstrate outcomes with the four contract deliverables for youth peer leaders, youth participants, and engaged parents and adult allies. 3. Recent surveys continue to express the need for continuation of our work with prevention strategies that build protective factors like connectedness, positive perception of self, service to others, and caring developmental relationships with peers and adults. California Healthy Kids Survey (CHKS) 2018 survey results for 11 graders in Palo Alto report 33 percent who do not “feel like I am part of this school,” 29 percent with “chronic sad or hopeless feelings,” 14 percent who “seriously considered attempting suicide in past 12 months.” With appreciation for our continuing City partnership in this critical work. Leif Erickson Ashley Yee-Mazawa Executive Director Palo Alto Program Director Partners City of East Palo Alto City of Menlo Park City of Palo Alto Santa Clara County Palo Alto Unified School District Ravenswood City School District Sequoia Union High School District Kiwanis Club of Palo Alto Palo Alto University Rotary Club Rotary Club of Palo Alto Youth Empowerment Strategies for Success (YESS) Project Safety Net East Palo Alto Re-entry Coalition Youth Community Service Youth Connectedness Initiative Impact Report 2017 to 2019 Youth Community Services | 780 Arastradero Rd., Room V-14 | PO Box 61000 Palo Alto, CA 94306 | IRS EIN 20-8099150 | (650) 858-8019 ycs@youthcommunityservice.org Youth Connectedness Initiative (YCI) This report is intended to express our appreciation at Youth Community Service (YCS) for the $50,000 annual City of Palo Alto contract for our Youth Connectedness Initiative (YCI). That three- year contract runs from July 2017 to June 2020 and has an annual $50,000 match from Santa Clara County for a leveraged budget of $100,000. We’re writing to share this 2017-2019 Impact Report on our work to date in the Palo Alto community with youth ages 14 to 18 and with parents and other adult allies. The three-year YCI was a response to surveys showing a need for Palo Alto youth to develop more protective factors against stress, including the CDC Epi-Aid Suicide Prevention Report that reported a youth suicide rate in Palo Alto at 14.1 per 100,000 persons, the highest rate in the County and more than double than that of the County. The YCI project was designed with evidence-based strategies from CDC Epi-Aid recommendations, program strategies from the Search Institute “Developmental Relationships framework,” and decades of Youth Community Service experience. YCI engages youth and adults in service learning and parent/adult education with the aim of building meaningful relationships. YCI is unique in its two pronged approach; a Peer Leader program where youth work on service learning projects centered on wellness, and the Parent Program where YCI hosts workshops for parents and youth-serving adults to educate on increasing protective factors. The program’s strength is in its unique structure of two pronged approach with youth and adults. See the student-produced video created for the parent program: https://www.youtube.com/watch?v=zDr7aW8IfPc Parent Program: Deliverable: Increase parents and adults’ awareness of ways to help build youth connectedness and developmental relationships. See the following pages for YCS Youth Connectedness Workshops and Events details Talk to Me: 12/5/18 28 participants (20 adults, 8 youth) Description: a facilitated conversation between adults and youth to raise awareness of the importance of youth feeling like they belong and building relationships that help youth thrive. Listen to Me: 3/26/19 40 participants (30 adults, 10 youth) Description: A Facilitated conversation and presentation from Susan Stone Belton on how to communicate and develop skills in listening and talking. Guest speaker: Susan Stone Belton Connect with Me: Planned for December 2019, Connect with Me will offer participants a space to share stories with one another through a facilitated conversation from a parenting expert and therapist. During the event, YCI Peer Leaders will debut their depression awareness video they created in collaboration with the Gunn and Paly Wellness Centers. Strengthening Families & Developmental Relationships: 11/2/19 61 participants (59 adults, 2 youth) Description: The workshop addressed families and relationships. The Search Institute facilitated the workshop and taught participants about the Developmental Relationships Framework. Participants will reflect on their own relationships and families through the lens of Search Institute’s innovative research. Our keynote speaker was Jim Conway, who brought over 25-years experience in the youth development field to the workshop with our community. Strengthening Families: YCS Partners Partners in Attendance and Their Clients’ Locations Organization Region *CASSY: Counseling and Support Services for Youth www.cassybayarea.org Palo Alto, Milpitas, Los Gatos, & Campbell *Gunn & Paly High Wellness Centers https://gunn.pausd.org/wellness-counseling/wellness https://paly.net/counseling-wellness/wellness-center-counseling- resources Palo Alto Palo Alto Family YMCA: Dedicated to building healthy, confident, connected children, adults, and families www.ymcasv.org/locations/palo-alto-family-ymca Palo Alto Palo Alto Medical Foundation: Dedicated to improving health in communities www.sutterhealth.org/pamf Southern San Mateo County and Northern Santa Clara County *Parents Place: “One-stop-shop for all your parenting needs” www.parentsplace.jfcs.org/location/peninsula San Francisco, San Mateo, and Santa Clara Counties Project Cornerstone: Helping all children and teens feel valued, respected, and known. www.ymcasv.org/ymca-project-cornerstone Santa Clara County and Southern San Mateo County *Safe Space: Youth programs and mental health services www.safespace.org/ San Mateo County *New partnership with YCS Strengthening Families: Results Peer Leaders: A dedicated group of youth in the Peer Leader program create service learning projects and build healthy relationships that help youth thrive. The high school student participants have weekly activities for which they are compensated with stipends or service hours. Deliverables: A) Engage other participating youth/peers in community service and learning to build protective factors and connectedness to community, school, and family. B) Youth will demonstrate their understanding of ways to plan and implement workshops and activities to increase protective factors and connectedness among youth peers. C) Participating youth will demonstrate an increase in indicators for protective factors and connectedness. Number of students: 2018-19: 14 Peer Leaders 2019-20: 17 Peer Leaders with additional students starting in January 2020 Peer Leader Projects: 2018-19 Food Drive ● Food Drive for Ecumenical Hunger Program (EHP) worked in collaboration with Sacred Space and community members to find donations ● Deliverable(s) Demonstrated: B Thank You Grams with Gunn Wellness Center and ROCK ● Peer Leaders decided to do Thank you Grams for students as finals are upcoming and it would be a nice reminder to send everyone on how special they are. ● Deliverable(s) Demonstrated: B, C, D Youth Takeover for Wellness ● The intention of this event was to open the Palo Alto City Hall Chamber with music and collaboration among youth group. Goal was for youth to occupy the space where power is held and make it their own. The youth were the leaders with adult staff supporting. There were resource tables and workshops as well as music and fun. This event was open to all youth (middle school to recent high school graduates). YCI Peer Leaders participated along with students from two Gunn High School groups named ROCK (Reach Out Care Know) and Bring Change 2 Mind. 89% of youth surveyed were interested in attending a similar event in the future. ● Deliverable(s) Demonstrated: C, D Talk to Me Video: Awareness and Communication ● The Talk to Me video was made to raise awareness on how different styles of parenting affect their kids, and how to approach issues differently. The video was shown at the two Parent events that were put on last year, and also shared on the website. On YouTube, it currently has 151 views. The peer leaders completed the video on their own, without collaborations. ● Deliverable(s) Demonstrated: B, C Presentation at NYLC ● Two Peer Leaders traveled to Philadelphia to present at the National Youth Leadership Conference (NYLC), a national service learning conference. Their workshop, “From Blues to Belonging,” was on their work and to inform participants about trauma and stress and how to build resilience and wellness through service learning. They shared their Anxiety video and co-presented with the Youth Coordinator, YCS Executive Director, and former YCS Board Chair. ● Deliverable(s) Demonstrated: C Fall 2019 Open Mic ● The open mic event “Bands and Brew” will be held at a coffee shop on Stanford campus. The theme of the event is connectedness. They are encouraging every artist that signs up to incorporate the theme is some way. Their ultimate goal with the event is to create a “connected” environment through art and music and people of all ages are welcome to listen and participate. ● Deliverable(s) Demonstrated: C, D Depression Awareness Video ● The depression awareness video is a video that shares the stories of a few Palo Alto students and their experiences with depression. Peer Leaders are currently collaborating with the Paly and Gunn Wellness Centers. The intended audience is anyone who might find comfort hearing similar stories and similar events. There is an option for youth to be anonymous and have their faces blurred out and voice masked. The video will be shared on our website, and also shown at YCI events, such as possibly our open mic, and parent events. ● Deliverable(s) Demonstrated: B, C Youth Connectedness Initiative Testimonials "YCI has really helped me learn about my community and how to connect people together in order to create change" –Ashley Q. Peer Leader "I like YCI because there's a big sense of community and you can really see that in all your interactions with other peers" –Valeria W., Peer Leader “The leaders were really able to connect with all the people and I felt like I was in a safe place to talk with them.” –Youth Takeover for Wellness youth participant “It is not too late to learn how to connect with my children” –Talk to Me adult participant “Empathy, listen the way you want to be listened to” –Listen to Me adult participant “Thank you for bringing this workshop to the community” –Strengthening Families participant “What was done today is an amazing experience” –Strengthening Families participant 2019-20 Youth Connectedness Initiative (YCI) and YCS Annual Budgets Youth Community Service is pleased to accept the $50,000 annual contract from the City Palo Alto, and leverage it, as shown below, with a matching $50,000 YCI contract with Santa Clara County Behavioral Health Services, in the broader context of our $237,000 budget for YCS programs addressing young people in Palo Alto, and the total YCS program budget of $703,000. The work of YCS paid staff is further leveraged for wider community impact through extensive use of collaborative partners, in-kind support (office space and transportation), and engaged adult and youth volunteers in our service and wellness programs and events. Expense budget detail for the combined $100,000 YCI program budget is shown below. Report Summary The 2017-2019 Impact Report included the following information: • A description and overview of the purpose and objectives of the three year contract with the City of Palo Alto. • YCI Parent Program survey results demonstrating growing parent engagement and satisfaction in Palo Alto, as well as increasing impact through collaboration with multiple wellness program partners • YCI Youth Peer Leader Program description of our Palo Alto peer leader team, events and achievements • Budget information on YCS financial strategies to leverage support and overall reach The Continued Need We believe that this Impact Report makes a strong case for renewal of an additional 2020 to 2023 three-year contract for the following reasons: 1. The program staff and student peer leader team have established strong momentum and leveraged impact through a growing Palo Alto-based network of school, City and community partners. We shared costs for our most recent parent educator from Search Institute with YMCA Project Cornerstone, and the event was co-sponsored by over 20 youth and adult wellness partners. 2. YCI program leaders report to City staff on a monthly and quarterly basis to align our work and demonstrate outcomes with the four contract deliverables for youth peer leaders, youth participants, and engaged parents and adult allies. Project leaders also coordinate our Palo Alto strategies with County-wide meetings of School-Linked Services Stakeholders and Bi- Monthly Meetings, as well as Suicide Prevention Stakeholders Meetings with Mego Lien. 3. Recent surveys continue to demonstrate the need for continuation of our work with prevention strategies that build protective factors like connectedness, positive perception of self, service to others, and caring developmental relationships with peers and adults. California Healthy Kids Survey (CHKS) 2018 survey results for 11 graders in Palo Alto report 33 percent who do not “feel like I am part of this school,” 29 percent with “chronic sad or hopeless feelings,” 14 percent who “seriously considered attempting suicide in past 12 months.” We look forward to working with City staff to renew our contract application for inclusion as a City match to the County contract in the new year’s budget.