HomeMy WebLinkAboutStaff Report 2212-05158.Discuss the FY 2023 Mid-Year Budget Review and Approve 1) FY 2023 Budget
Amendments in Various Funds, and 2) Amendments to the FY 2023 Table of Organization
to add 5.25 full-time and 2.43 part-time Full Time Equivalent (FTE) Positions
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: Action
Lead Department: Administrative Services
Meeting Date: February 13, 2023
TITLE
Discuss the FY 2023 Mid-Year Budget Review and Approve 1) FY 2023 Budget Amendments in
Various Funds, and 2) Amendments to the FY 2023 Table of Organization to add 5.25 full-time
and 2.43 part-time Full Time Equivalent (FTE) Positions
RECOMMENDATION
Staff recommends that the City Council review, discuss, and approve:
1) Amendments to the Fiscal Year 2023 Budget Appropriation for various funds and various
capital projects, as identified in Attachment A and Attachment A, Exhibit 1 and 2
(requires a supermajority, 2/3 approval); and
2) Amend the FY 2023 Table of Organization in Attachment B consistent with the budget
amendments in Attachment A, adding 5.25 full time and 2.43 part time FTE positions.
EXECUTIVE SUMMARY
This report provides and extensive update on the City’s financial status as of December 31, 2022,
halfway (6 months) through the current fiscal year. Included in this report are (1) recommended
budget adjustments to FY 2023 that reflect urgent / high priority fiscal needs or technical
adjustments, (2) recommended changes in staffing levels in FY 2023 adding 5.25 positions and
2.43 part-time FTE, (3) updated information on the City’s financial position in and outlook in FY
2023 including positioning for the upcoming FY 2024 budget process, and (4) FY 2023 2nd quarter
financial status updates (Attachment C). The next significant financial planning and budget
discussions will be the review of the FY 2024 proposed operating and capital budgets and
municipal fee schedule (May 2023 – June 2023) and recommended utility rates (March 2023 –
June 2023).
Each year staff bring forward recommendations to adjust the budget as part of the Mid-Year
Budget review. The City continues to reinvest in the most immediate needs of the City in order
to maintain high quality services for residents and position the City to proactively position itself
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financially in alignment with the 2024-2033 Long Range Financial Forecast1. Recommended
adjustments address measured investments for immediate needs to be addressed in FY 2023,
rather than waiting for the FY 2024 budget process. Revenue adjustments align the FY 2023
budget for major tax revenue sources with current projections and proactively fund reserves to
sustain the City through the next forecasted 2 years of projected deficits.
The City Council may amend the annual budget through appropriate motion; Attachment A and
B, if approved as recommended, provide the necessary transactional information for official
amendment of the annual budget. The budget appropriation actions require a supermajority
approval by the City Council (PAMC 2.28.080(c)(1)), or five (5) votes. The staff report provides
discussion of the balancing strategy as well as key highlights from the detailed adjustments. This
report is organized as follows:
1) FY 2023 Mid-Year Budget Adjustments
a) General Fund
i) Mid-Year Budget Review Balancing Strategy Summary
ii) Reinvestment Actions, Recommended Adjustments to the Budget
iii) Position/Table of Organization Changes Summary
iv) Technical Adjustments and Previous Council Direction
v) Budget Balancing Actions and City’s Financial Position in FY 2023 and FY 2024
b) Other Funds
c) Enterprise Funds
d) Capital Funds
2) Preliminary Q2 Financial Status & public safety overtime (Attachment C & D)
3) Timeline and Next Steps
Staff continues to manage resource availability and demands for extreme flexibility and
nimbleness in an environment that requires increased resources to deliver the same quality of
service. Passage of Measure L (Utility Transfer) and Measure K (Business Tax) by voters on the
November ballot will help to bolster revenues to pay for the increased cost of the services but
are not enough to cover the projected gap between revenues and expenses for the next several
years.
The balancing strategy works to continue the practice of funding ongoing activities with ongoing
revenue sources to proactively establish an uncertainty reserve at a level to offset projected
deficits for the next several years. Staff will continue to monitor these estimates and may bring
forward a year-end budget adjustment report in June with any additional refinements to
budgeted levels based on the most current information available.
12024-2033 Long Range Financial Forecast
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The economic outlook remains uncertain with national, state, regional, and local economic
indicators in transition. The economy exited 2021 in overdrive, but that growth combined with
global supply chain constraints pushed inflation higher than expected. The federal reserve began
raising the fed funds interest rate in March 2022 and is expected to continue in 2023, though at
a slower pace, which is intended to tame inflation. It remains unknown if the federal reserve will
achieve a “soft landing” where a slowdown in economic growth stems the rate of high inflation
but avoids a recession. The UCLA Anderson Forecast for California paints a generally positive
picture for the state as compared to national economic concerns. The local economy continued
to show strong performance in the latter half of the calendar year 2022, but “headwinds” will
likely slow the pace of economic growth. Finally, there are several issues across the City
continuing to impact the ability to transition beyond impacts of the pandemic including staff
turnover, recruitment and retention, and supply chain issues and inflation that continue to
increase costs across all aspects of the City.
BACKGROUND
Annually, staff brings forward the Mid-Year Budget Review to report the financial status of major
funds and the Capital Improvement Program as of the second quarter (Q2) of the current fiscal
year and recommends adjustments to the Adopted Budget. Adjustments to the City’s budget may
become necessary as revenues and expenditures vary from the original budget plan and are
typically ministerial. Staff has modified this Mid-year Budget Review to be more robust and
include adjustments that proactively reinvest in City services and priority initiatives in advance of
the FY 2024 budget process in alignment with expressed priorities by the City Council.
Additionally, this report aligns estimates for significant changes that have occurred in FY 2023,
including projections for major tax revenues and the status of new labor agreements.
Where possible, budget change recommendations are brought forward for City Council
consideration as part of the approval of the Mid-Year Budget Report to consolidate requests and
streamline changes to budget appropriations. These adjustments are necessary as revenues and
expenditures vary from the original budget plan for many reasons, including, but not limited to,
changes in economic factors, project estimates and scope, and City Council policy and direction.
The Mid-Year Budget Report reflects adjustments to align with prior City Council approved
direction, clean-up actions based on FY 2022 actual experience or current FY 2023 actual
activities.
As discussed in the FY 2024-2033 Long Range Financial Forecast (LRFF)2, the City made significant
service reductions in FY 2021 and FY 2022 Adopted Budgets to align expenses with losses of
nearly $40 million in General Fund tax revenues due to economic impacts resulting from the
COVID-19 pandemic. During this time, many services were reduced or eliminated across the
2 2024-2033 Long Range Financial Forecast
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organization and essential services were prioritized. In FY 2022, the City began to see gradual
signs of improvement and a positive economic outlook that supported initial reinvestments.
Further reinvestments were made in the FY 2023 Adopted Budget to restore services that were
previously reduced and provide resources to support priority initiatives. Additionally, the budget
continued proactive funding of long-term retiree benefits and initiated a three-year plan to
recover capital infrastructure investments to pre-pandemic levels.
In the first half of FY 2023, staff brought forward the FY 2022 Annual Comprehensive Financial
Report (ACFR) (Staff Report 2301-0715)3 for Council approval and the First Quarter (Q1) FY 2023
Financial Report (Staff Report 14630)4 for Finance Committee review. Staff reported higher
annual earnings for general fund revenues in FY 2022 as compared to the budget primarily due
to a faster recovery of major tax revenues in the last two quarters of the fiscal year. This recovery
trend continued in the first and second quarter of FY 2023, with several major tax revenue
categories tracking to exceed budgeted levels; actual year end results may vary due to continued
economic uncertainty. Staff anticipates using this additional one-time funding and reserves to
support near-term reinvestments and bridge projected shortfalls in the LRFF. Ongoing, staff
expects that continued economic recovery and a more diverse revenue base will help to stabilize
the fiscal outlook.
A list of prior staff reports providing various fiscal updates for Council deliberations can be found
in Attachment E for ease of reference.
ANALYSIS
This item serves as a continuation of the many touch points as the City balances responding to
emergent priorities with following through on established commitments. This report highlights
several areas of staff work ahead and outlines next steps and timing for a series of City Council
conversations planned to focus on fiscal monitoring, community and economic recovery, and
more. Further strategic work continues aside from the financial reporting discussed above,
focused on a Community and Economic Recovery Strategy. Findings and recommended
adjustments in this report are based on the data available at the time of reporting and reflect
preliminary 2nd Quarter financial activity in FY 2023 (Attachment C). Final Q2 data is typically
available at the end of March 2023, though material differences are not expected.
The following is an overview of the status for the General Fund, Enterprise Funds, and other funds
including recommended budget adjustments as they pertain to the City’s FY 2023 Operating and
Capital Budgets.
3 City Council Staff Report 2301-0715 January 23, 2022
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1061
4City Council Staff Report 14630 December 6, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/finance-committee/2022/20221206/20221206pfcsm-late-packet.pdf
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General Fund
Mid-Year Budget Review Balancing Strategy Summary
The General Fund ended FY 2022 with funding more than the 18.5% target level for the Budget
Stabilization Reserve (BSR) in FY 2023. The BSR is currently at $59.8 million or $14.2 million above
the 18.5% Council target level. Use of this excess BSR funding is recommended to fund actions in
this memorandum as discussed in the 2024-2033 LRFF report5. Use of several other reserves is
also recommended to fund actions in this report and consolidate reserve funding into one Budget
Uncertainty Reserve to proactively address the estimated deficits over the next several years. In
addition to this funding, a few of the major tax revenue categories are tracking at or above the
FY 2023 budget, most significantly Property Tax, Sales Tax, and Transient Occupancy Tax.
Adjustments to these Major Tax revenues are recommended to align the budget with current
projections for these categories, and staff will continue to monitor other more volatile revenue
sources. Finally, there are also potential risks and benefits associated with this balancing strategy
that should be considered when looking beyond FY 2023. The risks would further reduce the
City’s ability to fund the current level of services over the next several years, while the benefits
could offset costs for a longer period or even increase available funding sources. These are
discussed further in the Proposed Balancing Solutions section of this report.
The following table outlines the major drivers of the General Fund mid-year recommended
balancing strategy to offset the collective impact of these activities:
Table 1: General Fund Mid-Year Adjustments and Balancing Solutions
Summary of General Fund Adjustments
Net $ Impact
(Cost)/Benefit
Reinvestment Actions:
Neighborhood, Community and Library Services $(0.4) M
Public Safety $(0.4) M
Planning and Transportation Services $(0.2) M
Internal Services/Strategic Support $(0.1) M
Subtotal Reinvestment Actions:$(1.1) M
Technical Adjustments:
Major Tax Revenues
(Property Tax, Sales Tax, Transient Occupancy Tax)
$6.0 M
General Fund Reserves
(2023 Service Reinvestments, Utility Transfer Litigation, Transition Costs, Administrative
Support, COVID-19)
$7.8 M
52024-2033 LRFF report
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Program Funding
(Race and Equity, Rent Forgiveness)
$0.8 M
Labor Negotiation Alignment (Net-Neutral Action)
($2.6M for new labor agreements, offset by $0.9M Labor and Inflation Reserve and
$1.7M Vacancy Savings)
$0.0 M
Establish a Budget Uncertainty Reserve
($5.0M of the excess FY22 Budget Stabilization Reserve)
$(14.0) M
Supplemental Pension 115 Trust Contribution
($5.0M of the excess FY22 Budget Stabilization Reserve)
$(5.0) M
Capital Improvement Funding
($4.0M of the excess FY22 Budget Stabilization Reserve)
$(4.0) M
Electricity and Gas Commodity Purchases/Utility Allocated Charges $(0.6) M
Utility Equity Transfer $(0.6) M
Legal Services
(Utility Equity Transfer Case, Personnel Investigations, Wireless Ordinance Update)
$(0.4) M
Public Safety Revenue
(FireMed Program, First Responder Fee, Stanford Fire Services)
$(0.3) M
Golf Course Revenue Alignment $(0.2) M
Flood Response $(0.1) M
Subtotal Technical Adjustments $(10.6) M
Use of Budget Stabilization Reserve (BSR)
(BSR remains at 19.4% and $2.5 M above the 18.5% target level)
$11.7 M
Total Net Impact General Fund Mid-Year Adjustments $0.0 M
Reinvestment Actions
This report includes budget adjustments, grouped by service area, to continue to realign
resources with the priorities identified by the City Council. Major changes are recommended as
directed by the City Council and/or recommended by staff are below, and all transactions can be
found in greater detail in Attachment A. It should be noted that recommended budget
adjustments have been prorated for the remainder of the fiscal year, or approximately five (5)
months.
Neighborhood, Community and Library Services:
$17,000 revenue, $388,000 expense; 1.25 full-time, 2.43 part-time staffing
The Community Services Department’s recommendations reflect strategic investments in its
operations and represent current community needs. The restoration of 1.00 FTE Division
Manager of Park Open Space & Golf is due to the need for additional administrative support for
the department from the growing list of capital projects where extensive project monitoring and
specialized expertise are required. Additional trash pickup at parks is reflective of community
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feedback for increased service levels and the current popularity of the City’s open spaces. The
reopening Junior Museum & Zoo (JMZ) has been successful; however, challenges exist regarding
a myriad of issues including staffing, ticket and membership pricing, and utilization of technology
to improve operations. The organization study requested by the department represents the City’s
commitment to operating efficient high-quality youth facilities and services for the community.
Other recommendations include providing financial aid to Team Sheeper (the City’s contractors
providing community swim classes) while the Rinconada Pool resurfacing project (Building
System Improvements PF-01003) is being completed, funding for an overnight warming shelter,
and small community grants to teachers.
The Library Department has completed its organizational assessment and staffing analysis
approved in the FY 2023 Adopted Budget and actions to restructure operations in two divisions:
Community Engagement & Support Services and Branch Management & Operations are
recommended in this report. The reorganization will allow the department to provide more
administrative support and leadership for staff. The new service model also prioritizes efficiency
by hiring/reclassifying staff that enables the library to cross-train and lead initiatives that improve
community wellbeing. The new model also will strengthen and broaden community partnerships.
Larger and more strategic programming initiatives aligned with City and community priorities and
needs like sustainability, climate action, DEI (Diversity, Equity and Inclusion) and technology will
be supported. In addition, the library will also have resources to support services to underserved
communities. In addition, the department is recommending increasing expenditures by $30,000
to increase its current collection of materials related to DEI, along with materials in foreign
languages common in the community and expand its web-based collections.
Public Safety Services:
$0 revenue, $374,000 expense; 1.00 full-time, 0.00 part-time staffing
The Police Department recommendation includes the addition of 1.00 FTE Court Liaison Officer
to support criminal justice reforms, changes in reporting standards, and staff attrition causing
significantly higher staff time needed to process arrests and pursue successful prosecutions in
coordination the District Attorney’s Office.
Additionally, this report includes recommendations funding in the Fire Department for new fire
fighter hiring costs such as uniforms, personal protective equipment (PPE), academy fees, and
background checks as 16 entry-level fire fighters have been hired in FY 2023. The Department is
also shifting $1.5M in salary and benefits savings to offset overtime costs associated with the
academy. For more information, see the technical adjustments section below. Recruitment and
retention remain the top priorities in the immediate term for the Fire Department. These
investments are focused on ensuring the Department can continue to provide suppression and
rescue services for the City while meeting necessary staffing levels and training requirements.
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Planning and Transportation Services:
$34,000 revenue, $173,000 expense; 2.00 full-time, 0.00 part-time staffing
This report includes recommendations to recognize the impacts of expanding the Building
Inspection and Plan Review staffing classifications to include a senior level. These new
classifications will be brought forward to be legitimized in the FY 2024 budget cycle. It also
includes recommendations to reclassify administrative staff in accordance with a recent
classification study and recommendations to increase Long Range Planning capacity to continue
to support work on Council priorities including housing and coordinated area plans.
For the Office of Transportation, this report recommends the reclassification of a 1.00 FTE
Management Analyst to a Senior Management Analyst, consistent with the classification study’s
finding that the duties of the position are better aligned with the senior-level position. The Senior
Management Analyst will be responsible for higher level oversight of the department budget and
contracts for projects and programs including Rail Grade Separation, Safe Routes to School,
Parking, Traffic Operations and Safety, and the Bike and Pedestrian Plan. This position will also
provide administrative support for staffing needs, prepare staff reports, and act as a liaison for
cross-departmental assignments. The cost of the reclassification will be absorbed by vacancy
savings from the current budget and will therefore have no budgetary impact in FY 2023.
Internal Services/Strategic Support:
$0 revenue, $125,000 expense; 0.00 full-time, 0.00 part-time staffing
Included in this report are recommendations to add one-time funding for two outside counsel
agreements in the amount of $125,000 for legal work associated with the Roth Building
Rehabilitation.
Position/Table of Organization Changes Summary
Critical staffing challenges remain citywide. This report includes recommendations to add 5.25
full-time and 2.43 part-time positions. The recommendations in this report increase full-time
staffing levels in the General Fund Table of Organization from the FY 2023 adopted level of 552.81
FTE to 557.06 FTE (1,017.85 FTE to 1,023.10 FTE Citywide). See Attachment B, an amended Table
of Organization, for additional detail regarding the full-time position changes.
Technical Adjustments and Previous Council Direction
This report includes actions that are technical in nature and are needed to align budget with
current trends, and previous direction approved by the Council. Major changes are
recommended as directed by the City Council and/or recommended by staff are below, and all
transactions can be found in greater detail in Attachment A.
Major Tax Revenue: $6,000,000 additional revenue
Staff evaluated departmental and major tax revenue through Q2 and recommends actions that
result in a net $6.0 million increase. As noted in the Q1 Financial Report, major tax revenue
categories are trending higher than budgeted in FY 2023, and a $6.0 million increase is
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recommended to increase Transient Occupancy Tax ($4.0 million), Sales Tax ($1.5 million), and
Property Tax ($0.5 million).
General Fund Reserves: $8,700,000 expense savings
A number of reserves in the General Fund are being reduced in order to fund actions
recommended in this report and consolidate reserve funding to ease administration and clarity.
•The 2023 Service Reinvestments Reserve ($3.8 million) is being eliminated in order to
consolidate the funding into the Budget Uncertainty Reserve as discussed below.
•The Utility Transfer Litigation (Equity Transfer) Reserve is being reduced by $3.5 million
due to the passage of Measure L on the November 2022 ballot. This funding was set
aside for potential future costs related to the Green v. City of Palo Alto (Santa Clara
Superior Court, Case No. 1-16-CV-300760) if Measure L did not pass. The reserve will
still have $17.5 million to fund the estimated settlement of the case.
•The Transition Costs ($0.2 million) and Administrative Support ($0.2 million) Reserves
are being eliminated in order to fund various actions in this report as well as consolidate
reserve funding within the General Fund.
•The COVID-19 Reserve is being reduced by $0.1 million to fund flood response needs
around the City. This reserve will still have approximately $0.4 million to fund any
remaining COVID-19 related costs such as technology equipment for hybrid operations.
Any remaining funding in this reserve is anticipated to be liquidated at the end of FY
2023.
Program Funding (reconciliation): $800,000 expense savings
These technical corrections reduce funding for programs that have already spent funding or have
been completed and the funding is no longer needed. As part of the FY 2022 Reappropriations to
FY 2023 (Staff Report 14728)6, unspent funding was moved from FY 2022 to FY 2023 for the
Advancing Racial Equity program ($0.5 million) and the Rent Forgiveness program ($0.7 million).
After further analysis, it was determined that $0.1 million had been spent on contracts related
to Advancing Racial Equity work, and the Rent Forgiveness program had been completed in FY
2022. As a result, technical corrections are needed in this report to reduce the funding for
Advancing Racial Equity work to $0.4 million and eliminating the $0.7 million funding for Rent
Forgiveness to reconcile budget estimates with program activities.
Labor Negotiation Alignment: $2,600,000 expense; $2,600,000 expense savings
(Net-Neutral Action)
All labor agreements were scheduled to expire on December 31, 2022, except for the Service
Employees International Union Hourly Unit (SEIU-H) agreement, which is extended through
June 30, 2023. This net-neutral adjustment increases departmental salary and benefit
6City Council Staff Report 14728 October 24, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-
minutes-reports/agendas-minutes/city-council-agendas-minutes/2022/20221024/20221024pccsm-amended.pdf
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expenditures to align with the status of City and labor group economic proposals for all
contracts, including compensation adjustments and other terms of employment. An additional
$2.6 million in estimated expense increases is expected for new labor terms and is fully offset
by the elimination of the Labor and Inflation Reserve ($900,000) and projected departmental
vacancy savings ($1.7 million) based on current expense tracking.
Budget Uncertainty Reserve (establish): $14,000,000 expense
This adjustment establishes a $14.0 million Budget Uncertainty Reserve to proactively set aside
funding to address estimated deficits over the next two years. This action consolidates the City
Council prior actions for a two-year budget strategy adopted in FY 2023 and additional funds
approved by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR).
Excess BSR of $5.0 million was directed to establish an Economic Uncertainty Reserve. The
remaining funding is coming from the liquidation of the 2023 Service Reinvestments Reserve
($3.8 million) and appropriating a portion of the excess FY 2023 major tax revenue ($5.2 million)
both discussed as part of the City’s FY 2024-2033 LRFF.
Supplemental Pension Trust Contribution: $5,000,000 expense
This adjustment adds a $5.0 million transfer to the General Benefits Fund for an additional
contribution to the City’s Section 115 Pension Trust, bringing total principal contributions to
$55.0 million ($36.8 million from the General Fund) since inception in 2017. This action was
approved by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR) for
BSR exceeding target levels of 18.5% and reflects General Fund contributions only and is
consistent with the City’s Retiree Benefits Funding Policy. Staff will include adjustments for
proportional contributions from other (non-General Fund) funds as part of the FY 2023 year-end
or FY 2024 proposed process consistent with past practice and policy guidelines.
Capital Improvement Funding: $4,000,000 expense
This adjustment formalizes City Council actions to allocate $4.0 million resulting from FY 2022
year-end excess BSR, bringing the total base General Fund transfer to the Capital Improvement
Fund to $12.8 million in FY 2023 and is consistent with the Council policy guiding use of surplus
funds. This funding will be used to fund projects that are anticipated to exceed their current
budget such as the Downtown Automated Parking Guidance Systems project (PL-15002) as well
as increasing the fund balance in the Capital Improvement Fund for use in the development of
the upcoming 2024-2028 five-year Capital Improvement Plan.
Utility Equity Transfer: $583,000 expense
This action reduces the equity transfer to the General Fund from the Electric ($101,000) and Gas
($482,000) Funds in FY 2023 as a result of lower than anticipated fixed assets (depreciation) in FY
2022, and increased commodity and operation and maintenance costs, as well as the passage of
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Measure L in November 2022. This action is in alignment with the FY 2022 Annual Comprehensive
Financial Report (ACFR) as of June 30, 2022 (CMR 2301-0715)7.
Gas Commodity Purchases/Utility Allocated Charges: $228,000 expense
Gas commodity purchases increased in the Gas Fund consistent with the preliminary gas supply
forecast, which reflects fluctuating market prices and anticipated demand. This action aligns
revenue in the Gas Fund and City gas expenses accordingly.
Electric Commodity Purchases/Utility Allocated Charges: $427,000 expense
Electric commodity purchases increased in the Electric Fund consistent with the preliminary
electric supply forecast, which reflects fluctuating market prices and anticipated demand. This
action aligns revenue in the Electric Fund and City electric expenses accordingly.
Legal Services Contractual Support: $395,000 expense
Recommendations are included to add ongoing funding of $250,000 for employee-specific
personnel investigations and one-time funding for outside counsel agreements in the amounts
of $120,000 for the Utility Transfer Litigation (Equity Transfer) and $25,000 for a wireless
ordinance update.
Public Safety Revenue: Stanford Fire Service Agreement and FireMed/First Responder Programs
$140,000 revenue, $461,000 expense
This report includes technical actions to realize FY 2022 and FY 2023 Stanford fire and
communications services revenue, Fire Station 8 overtime reimbursements from the County, and
a realignment of revenue estimates for Fire Department programs.
Per the agreement with Stanford, at the second quarter of each year actual expenditures are
calculated and reconciled against budgeted levels for the prior fiscal year, resulting in either an
additional payment or a reimbursement. For FY 2022 actuals, an additional payment of $495,000
has been made by Stanford based on this reconciliation. An adjustment of $539,000 for FY 2023
Stanford revenue is also included to align the forecasted budget for fire prevention services with
the actual amounts being invoiced. Additionally, the City has an agreement in place with Santa
Clara County to staff Fire Station 8 on alternate months during high fire season months. As a
result, the County has provided a reimbursement of $177,000 for overtime from staffing the
station on behalf of the City of Los Altos Hills. Also included in this report is a reduction of $1.4
million to Fire Department revenue estimates for the FireMed Program and discontinuation of
the First Responder Fee Program. Lastly and net neutral adjustment of revenue and matching
expenses is recommended to recognize reimbursement from the State for medical
transportation costs through the Ground Emergency Medical Transportation (GEMT) program.
7 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1061
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Golf Course Services: $255,000 expense
This adjustment increases contract expenditure by $255,000 for City Golf Course operations
owed to the management company, OB Sports. The terms of agreement include a revenue share
equivalent to 20% of the calculated FY 2022 difference between Gross Revenue and Target
Revenue for that fiscal year.
Flood Response: $100,000 expense
Floods caused by multiple atmospheric rives in California beginning on December 31, 2022
caused periods of heavy rainfall that resulted in flooding, property damage, loss of power, and
evacuations across the state. The City provided regular updates and communication to residents
during this time, including opening a Community Resource Center at Rinconada Library to provide
a warm and dry location to relocate and gather. This action increases associated expenses for
materials and equipment rentals, lodging for displaced residents, and additional staffing to
provide consistent coverage.
Budget Balancing Actions and City’s Financial Position in FY 2023 and FY 2024
With the approval of these amendments the BSR would be reduced by $11.7 million. The
projected ending balance of the General Fund Budget Stabilization Reserve is anticipated to be
$48.1 million, which is above the City Council recommended 18.5 percent level of $45.6 million
by $2.5 million.
This balancing solution follows the City Council approved budget guiding principles as presented
annually with the approval of the City’s LRFF and seeks to:
1) Develop a structurally balanced budget that brings ongoing revenues and expenses into
alignment. Develop a plan for any structural imbalance to ensure that the City maintains
fiscal sustainability over the short, medium, and long-term.
2) Allocate one-time resources for one-time needs rather than committing one-time
resources to ongoing services. Examine appropriate uses of revenue surpluses that exceed
forecasted levels such as planning for recession needs, restoration needs, and strategic
investments.
3) Ensure appropriate resource allocation for City Council’s existing priorities.
6) Continue to thoroughly analyze non-personnel/equipment/other costs, such as contract
services, for cost savings opportunities or realignment with current needs.
9) Continue to prioritize proactively funding long term liabilities including but not limited to
debt obligations, pension obligations, and capital infrastructure in accordance with City
policies as approved by Council.
When bringing forward budget actions, staff works to align recommendations with the guiding
principles for budget balancing as approved by the Council The above principles most closely
align with this FY 2023 Mid-Year Budget Review. Establishing a $14 million Budget Uncertainty
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Reserve ensures that in the short and medium term, the City has a stable financial plan to address
current service levels while investing in core priority service areas. Although it does not fully fund
all identified priority projects, it does continue to focus reinvestment in areas that support the
Council’s priorities. A number of adjustments continue to align revenues and expenses with
current tracking including use of vacancy savings for increase labor contract costs and excess
revenues for proactive planning for the future. Lastly, the City continues to maintain its policies
for use of excess BSR through continued proactive funding of pension liabilities and a transfer to
support capital investment. Lastly, the BSR remains above target levels by $2.5 million allowing
for further investment in priority areas as part of the FY 2024 annual budget process or may be
used to assist should economic challenges become more apparent due to recessionary trends.
With any forecast and adjustments based on projections, there are inherent risks and benefits.
Staff seeks to conservatively position the City in order to provide organizational stability, while
acknowledging the service and resource needs, capacity to implement, and project pipeline to
continue to reinvest at a pace the organization can support. Potential risks and benefits
associated with this balancing solution that should be considered when looking beyond FY 2023.
The risks would further reduce the City’s ability to fund the current level of services over the next
several years, while the benefits could offset costs for a longer period of time or even increase
available funding sources.
Risks
•Unresolved Gap beyond FY 2025 – The Uncertainty Reserve recommended in this report
will cover estimated deficits in the first two years of the forecast (FY 2024 and FY 2025);
however, at this time the estimated deficits in FY 2026 and FY 2027 (approximately $7
million in total) would still need to be resolved.
•Labor Out of Contract – The current labor contracts would also be up for renegotiation
around the time of developing the FY 2026 budget, which may further increase the
current costs estimated for that year and years beyond.
•A more severe economic recession would cause increased deficits over the next several
years and likely shorten the period of time the Uncertainty Reserve could be used to
maintain services requiring reductions in costs, new revenues, and/or use of additional
reserves such as the BSR. The LRFF is currently modeled with limited underlying
economic growth but growth as a result of inflation in the near term (based on the most
recent economic forecasts for California).
Benefits
•Establishing a Budget Uncertainty Level at $14 million reserves enough funding to cover
the estimated deficits and maintain services for at least the next two fiscal years. This
stability is provided both to the community and the workforce supporting the goal to
attract and retain employees who deliver the services.
Item No. 8. Page 14 of 18
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•Major Tax revenue estimates are measured, depending on economic variables,
additional revenue above these modified budgeted levels may materialize.
•Reserve accounts health - The City’s Pension 115 Trust and California Employers’ Retiree
Benefit Trust (CERBT) accounts have the potential to fund annual pension and retiree
healthcare costs to provide short-term relief to City funds in order to maintain funding
to pay for services.
•A more robust economic recovery and the influx of Measure K (Business Tax) funding
would provide additional sources of funding to reduce the current forecasted deficits.
General Fund: Budget Stabilization Reserve
The General Fund Budget Stabilization Reserve is anticipated to be $48.1 million, which is above
the City Council recommended 18.5% level of $45.6 million by $2.5 million.
Should the Council approve the actions recommended in this report, there will be three (3)
reserves that remain in the General Fund; this is a consolidation from the current seven (7):
1. Reserve: Utility Transfer Litigation (Equity Transfer) $17.5 million, from $21.0 million
2. Budget Uncertainty Reserve $14.0 million, from $0
3. Reserve: COVID-19 $400,000, from $500,000
4. Reserve: 2023 Service Reinvestments $0, from $3.8 million
5. Reserve: Labor and Inflation $0, from $900,000
6. Reserve: Transition Costs $0, from $210,000
7. Reserve: Administrative Support $0, from $175,000
Other Funds – Mid-Year Budget Adjustments
Information Technology Fund
The Technology Fund will add 1.00 FTE Senior Technologist to serve as an additional project
manager. The City has 34 technology projects in process with 23 future projects in the pipeline.
The additional staffing will allow the City to keep up with its increasingly complex and demanding
technology initiatives. In addition, adjustments for contracts that were implemented, amended,
or omitted during the current fiscal year have also been included as technical adjustments. These
costs will be allocated across the City’s departments and funds in alignment with the allocation
methodology used as part of the FY 2023 Adopted Budget; however, for General Fund related
charges, those costs will be absorbed the Technology Reserve in FY 2023.
Investments in cybersecurity initiatives have also been recommended. As security incidents such
as phishing, data breaches, and viruses become more prevalent online, the need to further
insulate the City from cyber threats is needed and been advised by the Baker Tilly audit
assessments. These costs will be absorbed by Technology Fund in FY 2023.
Item No. 8. Page 15 of 18
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Public Art Fund – Code Art
The Public Art Fund to increase expenditures for continued support for Code:ART, a three-
evening interactive media art festival produced by the City of Palo Alto Public Art Program, which
re-imagines Palo Alto’s underutilized plazas, alleys, and public spaces through interactive light,
sound, and motion. The festival features a major interactive media artwork anchoring the festival
and six Urban Interventions activating downtown storefronts, alleys, parking lots or blank walls
in new and inventive ways. The artworks will invite play and participation, engaging area locals
in an event that outwardly reflects the creative community and culture that thrives here. The
Public Art Commission approved the use of $60,000 from the Public Art Fund to support
Code:ART at the September 15, 2022 meeting.
Supplemental Law Enforcement Services Fund – Opioid Grant
The City has received grant funding tied to Opioid Settlements. The Police Department will
spearhead new community initiatives for substance abuse treatment. The Department will
provide additional details regarding future programming as federal and state regulators provide
guidance on restrictive uses of the funding. This report includes a net-neutral adjustment in the
Supplemental Law Enforcement Service Fund to recognize the annual funding of $44,291 and
appropriate the corresponding expense.
Gas Tax Fund
The City receives revenues from California’s Highway Users Tax Account (HUTA) and the Road
Maintenance and Rehabilitation Account (RMRA SB1). In January, the Department of Finance’s
updates for estimated revenues from these accounts indicated that receipts would be lower than
what is currently in the City’s budget. To align with the new estimates, gas tax revenues will be
reduced by $271,000, and transfers to the Capital Improvement Fund for the Street Maintenance
project (PE-86070) will be reduced by $136,600 with the remaining gap to be funded by the
Infrastructure Reserve.
Enterprise Funds – Mid-Year Budget Adjustments
Mid-year actions being recommended in these funds are primarily related to the alignment of
the Utilities Department budgets with current market conditions for revenues and expenses
related to the purchase of commodities and the operation of utilities. The actions recommended
for FY 2023 mid-year will align revenues and expenses for the contract for tree and vegetation
clearing from the overhead electric distribution system; Electric and Gas Fund revenue
projections and commodity costs; interfund transfers for the Gas and Electric Fund Utilities Equity
Transfers; a Fiber Fund transfer to the Electric Fund; legal support contract services; and
increased membership fees for the Bay Area Water Supply and Conservation Agency (BAWSCA).
See Attachment A, Exhibit 1 for further information regarding the recommended changes in the
Enterprise Funds.
Capital Budget – Mid-Year Budget Adjustments
Several Capital Improvement Program projects require adjustments in FY 2023. For a detailed
view of all project adjustments by Fund, see Attachment A, Exhibit 2.
Item No. 8. Page 16 of 18
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- Funding of $100,000 will be appropriated in both the Capital Improvement Fund
Administration project (AS-10000) and the Plant Repair, Retrofit, and Equipment
Replacement project (WQ-19002) in the Wastewater Treatment Fund. This action will
fund legal costs associated with capital projects in these funds instead of funding the costs
in the Attorney’s Office General Fund budget.
- The Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities project (PG-
06003) requests $35,000 to replace the aging slide and pool covers at the Rinconada Kids
Pool. Approving this action at midyear will allow the slide to be replaced before summer.
- The Charleston/Arastradero Corridor project (PE-13011) will appropriate revenues,
including $37,200 of grant funding from the State for rubberized asphalt and $35,000 of
Charleston/Arastradero Development Impact Fees to offset costs for this project.
- The Roth Building Rehabilitation project (PF-23001) also has new revenue: $353,000 from
Santa Clara County, $50,000 from the Palo Alto Museum, and $978,825 from a Housing
and Urban Development (HUD) grant. The combined $1,381,825 of additional funds will
allow the project to increase appropriation for construction costs by $848,825 and free
up $533,000 in the Capital Improvement Fund to be used for other capital project needs.
- The Street Maintenance project (PE-86070), on the other hand, will need to decrease
revenue and appropriation by $136,600 due to the reduced gas tax revenue estimates
discussed in the Gas Tax Fund section above.
- Two projects require technical adjustments: the Byxbee Park Completion project (PE-
18006) needs to correct a -$1,300,000 revenue reappropriation from FY 2022 to FY 2023
that was entered in error as part of the Reappropriation actions. The Civic Center Fire Life
Safety Project (PE-18016) needs a correction to address a $142,000 year-end
encumbrance error that occurred while moving from FY 2022 to FY 2023 in order to
appropriately fund the project for the scope of work.
- The budget for the Wastewater Collection System Rehabilitation/Augmentation Project
31 (WC-19001) will be increased in FY 2023 by $5.7 million in order to expedite the
timeline for completion of the project. The overall project will only increase by $2.1
million, with the other funding coming from savings ($825,000) in the
Sewer/Lateral/Manhole Rehabilitation and Replacement project (WC-99013) and funding
programmed for WC-19001 in FY 2024 being moved to FY2023. This will allow the project
to be competed earlier and avoid higher costs related to night construction.
TIMELINE AND NEXT STEPS
Staff is actively working on the FY 2024 budget and regular reporting activities over the coming
months. Below is a list of expected reports and Council updates planned for the remainder of FY
Item No. 8. Page 17 of 18
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2023. The Council and Finance Committee will continue to be updated through these planned
discussions with adjustments brought forward as necessary. Expected upcoming financial status
and budget reporting include:
March/April 2023:
•Utility Advisory Commission (UAC) and Finance Committee Meetings – Five Year Utility
Financial Plans and FY 2024 Rate Recommendations
May 2023:
•Release of the FY 2024 Proposed Operating and Capital Budgets & Municipal Fee Changes
•Public Budget Hearings on the Proposed Budgets with Finance Committee, including
Utility Rates, Municipal Fees, and the 5-Year Capital Improvement Plan
June 2022:
•FY 2023 Third Quarter (Q3) Fiscal Analysis Report (information)
•FY 2024 Operating and Capital Budget Adoption
•FY 2024 Municipal Fee Adoption
•FY 2024 Utility Rates adoption
In addition, routine information reports including but not limited to utilities risk management,
investment reports, contracts and lease reporting will continue.
FISCAL/RESOURCE IMPACT
Approval of the attached transactions is required to amend the FY 2023 budget appropriation.
With the approval of these amendments, the Budget Stabilization Reserve (BSR) would be
reduced by $11.7 million and the projected ending balance of the General Fund BSR is anticipated
to be $48.1 million, which is within the target range of 15% to 20% of the General Fund Budget
expenses and is above the City Council target level of 18.5%, or $45.6 million, by $2.5 million. 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:
Table 6: Resource Impact (Non-General Fund)
Fund Type Fund Amount
Capital Capital Improvement Fund $5.6 M
Enterprise Airport Fund $(23,000)
Electric Fund $8.9 M
Fiber Optics Fund $(0.2 M)
Gas Fund $6.2 M
Refuse Fund $(11,000)
Item No. 8. Page 18 of 18
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Fund Type Fund Amount
Stormwater Management Fund $(17,000)
Utility Administration Fund $(0.1 M)
Wastewater Collection Fund $(4.7 M)
Wastewater Treatment Fund $(0.4 M)
Water Fund $(0.5 M)
Internal Service Information Technology Fund $(0.4 M)
Print and Mail Services Fund $(1,000)
Vehicle Replacement Fund $(0.1 M)
Special Revenue California Avenue Parking Fund $(4,000)
Charleston/Arastradero Development Impact
Fee Fund
$(35,000)
Gas Tax Fund $(0.1 M)
Parkland Dedication Fee Fund $1.1 M
Public Art Fund $(60,000)
University Avenue Parking Fund ($25,000)
STAKEHOLDER ENGAGEMENT
The Office of Management and Budget has coordinated with all departments city-wide and the
City Manager’s Office, as appropriate, to bring forward the changes discussed and recommended
in this report.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the amendments to the
FY 2023 Budget Appropriation and FY 2023 Table of Organization are fiscal activities which do
not involve any commitment to any specific project which may result in a potentially significant
physical impact on the environment. CEQA Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A, Exhibit 1: FY 2023 Recommended Operating Budget Adjustments
Attachment A, Exhibit 2: FY 2023 Recommended Capital Budget Adjustments
Attachment B: Amended FY 2023 Table of Organization
Attachment C: Preliminary FY 2023 2nd Quarter Financial Status
Attachment D: Public Safety Overtime Analysis
Attachment E: Summary of Financial Status Reports in FY 2023 [for reference only]
APPROVED BY:
Kiely Nose, Administrative Services Director
Report #: 2212-0515
Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
City Attorney Legal Support
This action adds ongoing funding of $250,000 for employee-specific personnel investigations and one-time
funding for outside counsel agreements in the amounts of $125,000 for the Roth Building Rehabilitation,
$120,000 for Green case litigation, and $25,000 for a wireless ordinance update. (Ongoing Cost: $250,000)
- -$ 520,000$
City Clerk City Clerk Staff Training
This action provides one-time funding of $6,000 to the staff training budget for technical and leadership and
succession planning skills development. Funding is being shifted from Management Development Training
Funds in Non-Deparmental to cover the traiing needs. (Ongoing costs: $0)
- -$ 6,000$
Community
Services
Art & Sciences Division: Public Art Studio Staffing Reorganization
This action increases Art Center capacity to meet community demand for adult ceramic classes that are held at
the Art Center. This proposal adds one Junior Museum & Zoo Educator position (0.75 FTE) and eliminates two
hourly Instructor positions (0.40 FTE), for a net decrease of 0.05 FTE. Additionally, this action increases
revenues by $8,000 for fees generated by new Ceramics classes, which will become available if this action is
approved. This proposal creates greater staffing sustainability for this revenue-generating program, helping to
meet the increased community demand (Ongoing net costs: $0)
(0.05)8,000$ (7,200)$
Community
Services
Transfer from the Child Care Fund/Human Services Division: Early Education Professional Development
This action would transfer funds from the Child Care Trust Fund to the General Fund and appropriate funding
for professional development for early education providers via a mini-grant program. This aligns with the
previous Council Action (CMR 13553) on October 4, 2021 for the same purpose (Ongoing net costs: $0)
- 5,000$ 5,000$
Community
Services
Human Services Division : Overnight Warming Location (OWL) Funding
This action increases funding to provide shelter beds for Palo Alto unhoused at an Overnight Warming Location
(OWL) operated by a community partner. Costs will include shelter space (bed and food costs), outreach and
referral services to unhoused individuals, and transportation. (Ongoing costs: $15,000)
- -$ 15,000$
Community
Services
Art & Sciences Division: Junior Museum & Zoo (JMZ) Business and Operating Plan
This action will provide funding for a consultant to 1) perform an operational analysis of the JMZ and to 2)
prepare a business plan to inform ongoing operational and budgetary decisions. This will include an analysis of
the JMZ’s financial, operational, organizational, and programmatic performance for the first year of operations,
and recommendations for ongoing/future operations based on attendance and revenue projections. (Ongoing
costs: $0)
- -$ 50,000$
Community
Services
Open Space, Parks, & Golf Division: Management Staffing
This action adds 1.00 FTE Division Manager of Parks, Open Space, and Golf Position to manage large projects
such as the family wellness center, skatepark, 10.5 acres at the Baylands, and urgent and unplanned projects
like the Mayfield soccer complex infill replacement and Lytton Plaza fountain repair. This would allow the
Assistant Director to focus on complex policy issues, division leadership, and environmental regulatory
obligations. (Ongoing costs: $220,000)
1.00 -$ 71,000$
Community
Services
Recreation Division: Team Sheeper Operations Assistance – Rinconada Lap Pool
This action will provide funding for Team Sheeper (Palo Alto Swim & Sport) to continue to pay employees for 45
days while the City re-plasters the Rinconada Lap Pool and Kiddie Pool, which is anticipated to begin in early
March 2023. During this Capital Improvement Project, Team Sheeper will be unable to offer programming.
(Ongoing costs: $0).
- -$ 85,000$
Community
Services
Open Space, Parks, & Golf Division: Weekend Trash Pickup
This action increases the park maintenance contract service levels by adding weekend trash removal service at
ten of the most impacted parks. The amount requested for approval is prorated for the current Fiscal Year.
Current services under this contract include landscape maintenance of parks, athletic fields, courts, roadsides,
medians, City buildings, community centers, and other facilities throughout Palo Alto. (Ongoing costs:
$125,000)
- -$ 125,000$
Community
Services
Open Space, Parks, & Golf Division: Golf Course Green Fee Contract Services Alignment
This action increases expenditures related to City Golf Course operations. Contract expenditures are increased
by $255,000 to reflect amounts owed to OB Sports per the terms of the agreement with the City for the
calculated FY 2022 revenue share, or 20% of the difference between Gross Revenue and Target Revenue for
that fiscal year. (Ongoing costs: $0)
- -$ 255,000$
Fire First Responder Fee and FireMed Program Revenue
This action discontinues the First Responder Fee Program, eliminating $1.0 million in projected revenue,
following an external consultant's review and also reduces FireMed Program revenue by $375,000 due to
delayed advertising and reduced public interest. (Ongoing costs: $1,075,000).
- (1,380,000)$ -$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Fire Overtime: Fire Station 8 Reimbursement
This net-neutral action recognizes reimbursment revenue from the County for staffing Fire Station 8 on
alternate months during high fire season months on behalf of the City of Los Altos Hills. This revenue is used to
offset incurred Fire Department overtime costs. (Ongoing net costs: $0)
- 177,000$ 177,000$
Fire Fire Fighter New Hire Costs
This action adds one-time funding of $330,000 for new hire uniforms, personal protective equipment (PPE),
academy fees, and background checks as the Department has hired 16 entry-level fire fighters in FY 2023. These
costs are not budgeted as part of the adopted budget and typically funded as part of Mid-Year, because the
number of new hires can vary from year to year. Additionally, this action shifts $1.5 million from salaries to
overtime to realign budget estimates for vacant positions that are backfilled on overtime. (Ongoing costs: $0)
- -$ 330,000$
Fire Stanford Fire Service Agreement: Revenue True-Up
This action recognizes $1,033,000 in revenue from the Stanford University for the fire and communication
services agreement. At the second quarter of each year actual expenditures are calculated and are reconciled
against budgeted levels for teh prior year, resulting in either an additional payment or a reimbursement. For FY
2022 actuals, an additional payment of $495,000 has been made by Stanford. An adjustment of $539,000 for FY
2023 Stanford revenue is also included to align the forecasted budget for fire prevention services with the
actual amounts being invoiced. (Ongoing savings: $0)
- 1,033,000$ -$
Fire State Paramedic Rembursement Program
This action is a net neutral adjustment of revenue and matching expenses to recognize reimbursement from
the State for medical transportation costs through the Ground Emergency Medical Transportation (GEMT)
program. After contributing matching funds, this program reimburses the City for costs associated with
transporting patients in an abulance. (Ongoing savings: $0).
- 310,000$ 284,000$
Library Pacific Library Partnership Innovation and Technology Grant
This action recognizes $4,300 in revenue and expenditures related to the receipt of the Pacific Library
Partnership Innovation and Technology Opportunity Grant to support the purchase of ten drones for the
Mitchell Park Library program, Light Up the Library with Drones. (Ongoing costs: $0)
- 4,300$ 4,300$
Library Library Staffing Reorganization
This action reorganizes the Library Department organizational structure to reflect recommendations in the
completed staffing analysis and organizational assessment. This involves the reclassification of several full-time
and part-time positions, including a net addition of 2.73 FTE positions, to allow for a new service model that
meets community needs by providing additional programming and services while maintaining current
operating hours. (Ongoing costs: $165,000)
2.73 -$ 4,600$
Library Library Collections
This action adds $30,000 in ongoing funding for Library collections development. The Library strives to continue
to maintain a viable, well-rounded library collection to meet customers’ perennial needs, as identified in the
Library’s Collection Development Plan. (Ongoing costs: $75,000)
- -$ 30,000$
Office of
Transportation
Management Staffing Adjustment
This action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the General
Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of a classification
analysis which found that the duties of the position are better aligned with a Senior Management Analyst. The
work performed is critical to the department and cannot be distributed to another position. The cost of the
reclassification will be absorbed by vacancy savings from the current budget and will therefore have no
budgetary impact in FY 2023. (Ongoing costs: $13,000)
- -$ -$
Planning and
Development
Building Inspection and Plan Review Staffing Support
This action increases salary and benefits expenses and offsetting revenue to the Planning and Development
Services Department to recognize proposed reclassification of 3.00 FTE Building Inspector Specialist positions
and 1.00 FTE Plans Check Engineer position to new classifications of Senior Building Inspector and Senior Plans
Check Engineer, respectively. These Senior level classifications are being dicussed with labor and if approved,
will be legitimized in the FY 2024 budget process. The Senior Building Inspector classification is recommended
to attract more qualified and experienced candidates in an effort to meet high levels of inspection service
demand. Palo Alto's code is complex and often inspections require a higher level of inspection services that is
better reflected by a Senior level classification. The Senior Plans Check Engineer classification is recommended
to allow capacity for quality control of plan reviews and will be assigned the most complex permitting projects.
Establishing these new Senior level classifications is anticipated to increase the level of support in Building
Inspection and Plan Review services and improve recruitment and retention efforts by establishing a path for
advancement. This action is anticipated to be fully offset by revenue. (Ongoing net costs: $0)
- 21,000$ 21,000$
Planning and
Development
Administrative Staffing Adjustment
This action reclassifies 1.00 FTE Adminstrative Associate II to an Administrative Associate III. This action is the
result of a classification study which found that the duties of the position are better aligned with an
Administrative Associate III. The work accomplished by this position is critical to customer service functions in
the Development Center and cannot be reallocated to other staff. (Ongoing net costs: $0)
- 13,000$ 13,000$
Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Planning and
Development
Planning Long Range Staffing
This action adds 2.00 FTE Senior Planner positions to the Long Range Planning Team to support a variety of
Council-directed policies and projects. Long Range Planning is currently working on a wide breadth of initiatives
that require additional support and resources and over the past few years, the work plan for this team has
grown significantly with major projects. Some of these initiatives include: Rental Protection, Coordinated Area
Plans, Housing Element Implementation, State Law Updates and Implementation, and other Council-directed
policy. These positions will lead and manage progress on these complex and significant initiatives. (Ongoing
costs: $342,000)
2.00 -$ 139,000$
Police Public Safety Information Management Staffing Augmentation
This action adds 1.00 FTE Court Liason Officer position. The position will supplement the City's current court
liaison officer and provides the following essential services: 1 ) Being the primary coordinator of court cases for
criminal, traffic, and administrative matters. This includes pre-trial and mid-trial coordinating with city attorney,
defense attorney, District Attorney's Office (DAO), and police officers. 2) Quality control for police reports
issued by this department in adherence to standards. 3) Informing staff of policy and protocol changes from the
State or County including DAO, Department of Motor Vehicles, Courts, Probation, and jails or detention
facilities. In addition, the position can assist the Police Record's Division which has seen significant turnover
(Ongoing costs: 134,000)
1.00 -$ 44,000$
Non-
Departmental
General Fund Reserves
This action consolidates various reserves in the General Fund, including the FY 2023 Service Reinvestment
Reserve - Year 2 ($3.8 million), FY 2023 Utility Transfer Litigation or Equity Transfer Reserve ($3.5 million),
Transition Costs Reserve ($0.2 million), Administrative Support Reserve ($0.2 million), and COVID-19 Reserve
($0.1 million). (Ongoing costs: $0)
- -$ (7,785,000)$
Non-
Departmental
Major Tax Revenue Alignment
This action recognizes adjustments to estimates for Property Tax ($0.5 million), Sales Tax ($1.5 million), and
Transient Occupancy Tax (TOT) ($4.0 million), based on trends experienced through the first half of FY 2023.
This would bring the total estimate for Property Tax revenue to $61.3 million, Sales Tax revenue to $34.1
million, and TOT revenue to $23.2 million. (Ongoing savings: $0)
- 6,000,000$ -$
Non-
Departmental
Rent Forgiveness and Race & Equity Program Funding
This action reduces funding for programs that have already spent funding or have been completed and the
funding is no longer needed. As part of the FY 2022 Reappropriations to FY 2023 (CMR 14728), unspent funding
was moved from FY 2022 to FY 2023 for the Advancing Racial Equity program ($0.5 million) and the Rent
Forgiveness program ($0.7 million). After further analysis, it was determined that $0.1 million had been spent
on contracts related to Advancing Racial Equity work, and the Rent Forgiveness program had been completed in
FY 2022. As a result, technical corrections are needed in this report to reduce the funding for Advancing Racial
Equity work to $0.4 million and eliminating the $0.7 million funding for Rent Forgiveness. (Ongoing savings: $0)
(841,000)$
Non-
Departmental
Management Development Funds
This action uses Management Development Training Funds to offset recommendations to increase the City
Clerk staff training budget for technical and leadership and succession planning skills development. With this
adjustment, a total of $281,000 remains unspent in Management Development Funds (Ongoing savings: $0)
- -$ (6,000)$
Non-
Departmental
Storm and Flood Response
This action allocates funding for community assistance during the significant storm sytems beginning December
31, 2022, including materials an equipment rentals, lodging for displaced residents, and additional staffing to
provide consistent coverage. (Ongoing costs: $0)
100,000$
Non-
Departmental
Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Electric ($101,000) and Gas ($482,000)
Funds in FY 2023 as a result of lower than anticipated fixed assets (depreciation) in FY 2022, and increased
commodity and operation and maintenance costs, as well as the passage of Measure L in November 2022.
(Ongoing costs: $0)
- (583,000)$ -$
Non-
Departmental
Transfer to the Capital Improvement Fund
This action transfers $4.0 million to the Infrastructure Reserve in the Capital Improvement Fund, as approved
by the City Council in the FY 2022 Annual Comprehensive Financial Report (ACFR) for BSR exceeding target
levels of 18.5%. (Ongoing costs: $0)
4,000,000$
Non-
Departmental
Transfer to the General Benefits Fund for Supplemental Pension Contributions
This action transfers $5.0 million to the General Benefits Fund to increase the contribution to the City's Section
115 Pension Trust Fund, as approved by the City Council in the FY 2022 Annual Comprehensive Financial Report
(ACFR) for BSR exceeeding target levels of 18.5%. (Ongoing costs: $0)
- -$ 5,000,000$
Non-
Departmental
Budget Uncertainty Reserve
This action allocates $14.0 million for a Budget Uncertainty Reserve to proactively set aside funding to address
estimated deficits over the next several years, including the Uncertainty Reserve approved in the FY 2022
Annual Comprehensive Financial Report (ACFR) ($5.0 million), liquidation of the FY 2023 Service Reinvestments
Reserve ($3.8 million), and appropriation of a portion of the excess FY 2023 major tax revenue adjustment ($5.2
million). (Ongoing costs: $0)
14,000,000$
Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Various Labor Negotiation Adjustments
This net-neutral action recognizes increased expenses in departmental salary and benefits ($2.6 million), which
are offset by the use of the Labor and Inflation Reserve ($900,000) and projected year-end vacancy savings
($1.7 million). This year the City is engaging in labor negotiations with various groups. This report recognizes
$2.6 million in estimated expense increases commensurate with the status of economic proposals for all
groups, including compensation adjustments and other terms of employment. This expense increase is fully
offset by the elimination of the Inflation and Salary Reserve ($900,000) and projected departmental vacancy
savings ($1.7 million). (Ongoing costs: $12.5 million)
- -$ -$
Various Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate adjuster (E-
HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and results in revenue
impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the General Fund in FY 2023
is approximately $228,000; other funds $437,000. (Ongoing costs: $0)
- -$ 228,000$
Various Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and anticipated
demand. The City's cost of gas is budgeted as allocated charges in citywide departments and funds; therefore,
corresponding increases in various departments' allocated charges are recommended. The impact to the
General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing costs: $0)
- -$ 427,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (11,686,400)$
GENERAL FUND (102) SUBTOTAL 6.68 5,608,300$ 5,608,300$
CHILD CARE FUND (193)
Community
Services
Transfer to the General Fund for Human Services Division: Early Education Professional Development
This action would transfer funds from the Child Care Trust Fund to the General Fund and appropriate funding
for professional development for early education providers via a mini-grant program. This aligns with the
previous Council Action (CMR 13553) on October 4, 2021 for the same purpose (Ongoing costs: $5,000)
- -$ 5,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (5,000)$
CHILD CARE FUND (193) SUBTOTAL - -$ -$
Revenues
Department FTE Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
GENERAL FUND CAPITAL IMPROVEMENT FUND (471)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in
Attachment A, Exhibit 2.2,617,425$ 989,225$
Office of
Transportation
Management Staffing Adjustment
This action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50
FTE in the General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This
action is the result of a classification analysis which found that the duties of the position are
better aligned with a Senior Management Analyst. The work performed is critical to the
department and cannot be distributed to another position. The cost of the reclassification will
be absorbed by vacancy savings from the current budget and will therefore have no budgetary
impact. (Ongoing costs: $4,000)
- -$ -$
Transfer to the Capital Improvement Fund
This action recognizes a transfer of $4.0 million from the General Fund to increase the
contribution to the Capital Improvement Fund, as approved by the City Council in the FY 2022
Annual Comprehensive Financial Report (ACFR). This brings the total base General Fund
transfer to $12.8 million in FY 2023. This funding will be used to fund projects that are
anticipated to exceed their current budget such as the Downtown Automated Parking
Guidance Systems project (PL-15002) as well as increasing the fund balance in the Capital
Improvement Fund for use in the development of the upcoming 2024-2028 five-year Capital
Improvement Plan. (Ongoing costs: $0)
- 4,000,000$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 5,628,200$
GENERAL FUND CAPITAL IMPROVEMENT FUND (471) SUBTOTAL - 6,617,425$ 6,617,425$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
AIRPORT ENTERPRISE FUND (530)
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 7,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing costs: $0).
- -$ 14,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $2,000)
- -$ 1,523$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (22,523)$
AIRPORT ENTERPRISE FUND (530) SUBTOTAL - -$ -$
ELECTRIC FUND (513 & 523)
Utilities Electric Line Clearing Services
This one-time action increases Contract Services from $2.9 million to $4.5 million to align the FY 2023
Electric Line Clearing budget with anticipated overhead line tree clearing work from the City's contractor,
Davey Tree. This increase meets the cumulative authorized spending approved by Council for the
overhead line tree clearing contract and allows an increase from four 2-person crews to six 2-person
crews. The City has experienced an increased number of outages in the past year caused by tree limbs
falling on overhead power lines, and this will address a backlog of routine work and respond to urgent
issues in a timely manner (Ongoing costs: $0)
- -$ 1,566,000$
Utilities Electric Hydro Rate Revenue/Electric Commodity Adjustments
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- 20,564,000$ 10,359,000$
Utilities Transfer to the Electric Fund for Foothills Work
This one-time action will transfer funds from the Fiber Fund to the Electric Fund, to purchase 25% or 12
strands of fiber installed by the Electric Utility at the Foothills, for the Adobe Creek connection to enable
SCADA services to monitor the Foothills reservoirs. The Fiber Utility plans to offer its Commercial Dark
Fiber service to Fiber service provider(s) in the Foothills area and use service providers to add internet
services to “light” the fiber for the residents. The Electric Utility does not foresee a use for the 12 fibers
and this is a much more cost effective solution to installing additional fiber in the area. (Ongoing costs: $0)
- 163,000$ -$
Utilities Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Electric Fund as a result of lower than
anticipated fixed assets (depreciation) in FY 2022, and increased commodity and operation and
maintenance costs. (Ongoing savings: $0)
- -$ (101,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $32,000)
- -$ 32,000$
Utilities Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 18,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 8,853,000$
ELECTRIC FUND (513 & 523) SUBTOTAL - 20,727,000$ 20,727,000$
FIBER OPTICS FUND (533)
Utilities Transfer to the Electric Fund for Foothills Work
This one-time action will transfer funds from the Fiber Fund to the Electric Fund, to purchase 25% or 12
strands of fiber installed by the Electric Utility at the Foothills, for the Adobe Creek connection to enable
SCADA services to monitor the Foothills reservoirs. The Fiber Utility plans to offer its Commercial Dark
Fiber service to Fiber service provider(s) in the Foothills area and use service providers to add internet
services to “light” the fiber for the residents. The Electric Utility does not foresee a use for the 12 fibers
and this is a much more cost effective solution to installing additional fiber in the area. (Ongoing costs: $0)
- -$ 163,000$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $2,000)
- -$ 2,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (165,000)$
FIBER OPTICS FUND (533) SUBTOTAL - -$ -$
GAS FUND (514 & 524)
Utilities Net Sales Revenue/Gas Commodity Purchase
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- 25,400,000$ 19,822,000$
Utilities Utilities Equity Transfer to the General Fund
This action reduces the equity transfer to the General Fund from the Gas Fund as a result of lower than
anticipated fixed assets (depreciation) in FY 2022, and increased commodity and operation and
maintenance costs, as well as the passage of Measure L in November 2022. (Ongoing costs: $0)
- -$ (482,000)$
Utilities Transfer to the Water Fund for Water, Gas, Wastewater Utility GIS Data Capital Project (WS-02014)
The Gas and Wastewater Collection Funds pay a portion of the WS-01014 capital project costs through
transfers to the Water Fund. This funding cover ongoing conversion activity to bring maps into the new
GIS platform. Transfers were completed in prior years; however, GIS conversion work was not completed
in the prior years. Since this is an ongoing project, the FY23 transfers are being reduced to align total
cumulative transfers more closely based on work performed to date. (Ongoing savings: $0)
- -$ (166,000)$
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $15,000)
- -$ 15,000$
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0).
- -$ 50$
Fund Balance Adjustment to Fund Balance
- -$ 6,210,950$
GAS FUND (514 & 524) SUBTOTAL - 25,400,000$ 25,400,000$
REFUSE FUND (525)
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 3,300$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $8,000)
- -$ 8,036$
Fund Balance Adjustment to Fund Balance
- -$ (11,336)$
REFUSE FUND (525) SUBTOTAL - -$ -$
STORMWATER MANGEMENT FUND (528)
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 9,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $8,000)
- -$ 7,598$
Fund Balance Adjustment to Fund Balance
- -$ (16,598)$
STORMWATER MANGEMENT FUND (528) SUBTOTAL - -$ -$
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
UTILITIES ADMINISTRATION FUND (521)
Utilities Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $98,000)
- -$ 98,180$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing net costs: $0)
- 70,000$ 70,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (98,180)$
UTILITIES ADMINISTRATION FUND (521) SUBTOTAL - 70,000$ 70,000$
WASTEWATER COLLECTION FUND (527)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- -$ 4,825,000$
Utilities Transfer to the Water Fund for Water, Gas, Wastewater Utility GIS Data Capital Project (WS-02014)
The Gas and Wastewater Collection Funds pay a portion of the WS-01014 capital project costs through
transfers to the Water Fund. This funding cover ongoing conversion activity to bring maps into the new
GIS platform. Transfers were completed in prior years; however, GIS conversion work was not completed
in the prior years. Since this is an ongoing project, the FY23 transfers are being reduced to align total
cumulative transfers more closely based on work performed to date. (Ongoing savings: $0)
- -$ (166,000)$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $8,000)
- -$ 8,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 140$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (4,667,140)$
WASTEWATER COLLECTION FUND (527) SUBTOTAL - -$ -$
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
WASTEWATER TREATMENT FUND (526)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- -$ 100,000$
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This adjustment is
consistent with the preliminary gas supply forecast, which reflects fluctuating market prices and
anticipated demand. The City's cost of gas is budgeted as allocated charges in citywide departments and
funds; therefore, corresponding increases in various departments' allocated charges are recommended.
The impact to the General Fund in FY 2023 is approximately $427,000; other funds $186,000. (Ongoing
costs: $0)
- -$ 25,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 282,000$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated, omitted or
amended during the current fiscal year. Services include Neogov ($9,000), Sherpa ($20,000), Monday.com
($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and Code42 ($64,600). The costs of these
services are budgeted as allocated charges in citywide departments; therefore, corresponding increases in
various departments’ allocated charges for internal services provided by the Information Technology
Department are also recommended to offset this expense. The impact on the General Fund in FY 2023 is
$117,000 and will be funded by the annual Technology Surcharge transfer to the Technology Fund. The
impact to other funds is $162,000. (Ongoing costs: $38,000)
- -$ 38,332$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (445,332)$
WASTEWATER TREATMENT FUND (526) SUBTOTAL - -$ -$
Revenues
Department FTE Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
WATER FUND (522)
Capital Capital Improvement Project Adjustments
This action reflects the combined impact from adjustments to projects as outlined in Attachment A,
Exhibit 2.
- (332,400)$ -$
Utilities Bay Area Water Supply and Conservation Agency (BAWSCA) Membership
This action increases membership fees for BAWSCA from $321,000 to $416,000. BAWSCA is a government
agency that was created by special legislative action to represent the water supply and conservation
interests of Palo Alto and other Wholesale Customers of the San Francisco Public Utilities Commission
(SFPUC). An assessment increase of 25% for membership fees is needed for a catch up because BAWSCA
relied on the use of the General Reserve and Balancing Account to fund its operating budget. (Ongoing
costs: $95,000)
- -$ 95,000$
Utilities Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to the
General Fund in FY 2023 is approximately $228,000; other funds $437,000. (Ongoing costs: $0)
- -$ 85,000$
Utilities Personnel Investigations Utilities Allocated Charges
The number of personnel investigations has increased over the last several years, and this action increases
the amount allocated for this work from $100,000 to $170,000. This will allow the Department and the
Attorney's Office to conduct these investigations without impacting funds allocated for other services.
These costs are allocated in the Utilities Adminstation Fund and allocated proportionatly based on the
adopted budget across the various Utilities Funds. (Ongoing costs: $13,000)
- -$ 13,000$
Fund Balance Adjustment to Fund Balance
This action increases/decreases the fund balance to offset adjustments recommended in this report.
-$ (525,400)$
WATER FUND (522) SUBTOTAL (332,400)$ (332,400)$
Department FTE Adjustment Adjustment
INTERNAL SERVICE FUNDS
GENERAL BENEFITS FUND (687)
Non-
Departmental
Transfer from the General Fund for Supplemental Pension Contributions
This net-neutral action recognizes a transfer of $5.0 million from the General Fund to increase
the contribution to the City's Section 115 Pension Trust Fund, as approved by the City Council in
the FY 2022 Annual Comprehensive Financial Report (ACFR). A corresponding adjustment is
made to recognize pension expense. This brings total contributions to $55.0 million through FY
2023 ($36.8 million from the General Fund). Staff will include proportional contributions from
other funds as part of the FY 2023 year-end or FY 2024 Proposed Budget process. (Ongoing
costs: $0)
- 5,000,000$ 5,000,000$
GENERAL BENEFITS FUND (687) SUBTOTAL - 5,000,000$ 5,000,000$
INFORMATION TECHNOLOGY FUND (682)
Information
Technology
IT Project Services Administration Staffing
This action adds 1.00 FTE Senior Technologist to serve as a project manager and appropriates
an additional $67,838 in funding. Currently, the ITD has 34 projects with 23 additional projects
in the pipeline. The additional staffing will allow the City to keep up with the increasingly
complex technology demands of the City. (Ongoing costs: $209,000)
1.00 -$ 67,838$
Information
Technology
Cybersecurity Initiatives
This action adds $250,000 towards Citywide cybersecurity initiatives which include but are not
limited to disaster recovery, management framework, and endpoint controls. This funding will
allow for investments in solutions to protect the City against cyber threats and to address
recommendations from the Baker Tilly audit assessments. (Ongoing costs: $500,000)
- -$ 250,000$
Information
Technology
Charges to Other Departments/Information Technology Contract Services
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $279,000)
- 162,013$ 279,285$
Information
Technology
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro
rate adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to
$0.048/kWh and results in revenue impacts are anticipated to increase from $4,050,000 to
$23,980,000. The impact to the General Fund in FY 2023 is approximately $228,000; other
funds $437,000. (Ongoing costs: $0)
- -$ 1,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (436,110)$
INFORMATION TECHNOLOGY FUND (682) SUBTOTAL 1.00 162,013$ 162,013$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
p
ATTACHMENT A, EXHIBIT 1
Department FTE Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
p
ATTACHMENT A, EXHIBIT 1
PRINT AND MAIL SERVICES FUND (683)
Administrative
Services
Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $1,000)
- -$ 956$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (956)$
PRINT AND MAIL SERVICES FUND (683) SUBTOTAL - -$ -$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Public Works Gas Commodity Purchase Utilities Allocated Charges
Expenses for gas commodity purchases increased by $19.8 million in the Gas Fund. This
adjustment is consistent with the preliminary gas supply forecast, which reflects fluctuating
market prices and anticipated demand. The City's cost of gas is budgeted as allocated charges in
citywide departments and funds; therefore, corresponding increases in various departments'
allocated charges are recommended. The impact to the General Fund in FY 2023 is
approximately $427,000; other funds $186,000. (Ongoing costs: $0)
- -$ 136,000$
Public Works Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro
rate adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to
$0.048/kWh and results in revenue impacts are anticipated to increase from $4,050,000 to
$23,980,000. The impact to the General Fund in FY 2023 is approximately $228,000; other
funds $437,000. (Ongoing Cost: $0)
- -$ 30$
Public Works Information Technology Contract Services Allocated Charges
This action increases expenses in the Information Technology Fund by $279,000 for software,
subscriptions, and technology licensing costs contracts that were implemented, renegotiated,
omitted or amended during the current fiscal year. Services include Neogov ($9,000), Sherpa
($20,000), Monday.com ($9,250), Microsoft 365 ($116,000), Team Dynamix ($17,500), and
Code42 ($64,600). The costs of these services are budgeted as allocated charges in citywide
departments; therefore, corresponding increases in various departments’ allocated charges for
internal services provided by the Information Technology Department are also recommended
to offset this expense. The impact on the General Fund in FY 2023 is $117,000 and will be
funded by the annual Technology Surcharge transfer to the Technology Fund. The impact to
other funds is $162,000. (Ongoing costs: $7,000)
- -$ 7,388$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (143,418)$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL - -$ -$
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
BELOW MARKET RATE FUND (230)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 60$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (60)$
BELOW MARKET RATE FUND (230) SUBTOTAL - -$ -$
CALIFORNIA AVENUE FUND (237)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing Cost: $0)
- -$ 3,800$
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact in FY 2023. (Ongoing Costs: $1,000)
- -$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (3,800)$
CALIFORNIA AVENUE FUND (237) SUBTOTAL - -$ -$
CHARLESTON/ARASTRADERO DEVELOPMENT IMPACT FEE FUND (213)
Public Works Transfer to the Capital Improvement Fund for the Charleston/Arastradero Corridor Project (PE-
13011)
This action transfers Charleston/Arastradero Impact Fee funds to the Capital Improvement Fund for
use by the Charleston/Arastradero Corrideor Project (PE-13011). This action should transfer the
remaining fee funds in order to close out this Fund. (Ongoing costs: $0)
- 35,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (35,000)$
CHARLESTON/ARASTRADERO DEVELOPMENT IMPACT FEE FUND (213) SUBTOTAL - -$ -$
GAS TAX FUND (231)
Public Works Gas Tax Revenues/Transfers to the Capital Improvement Fund for Streets Improvement Project (PE-
86070)
This action reduces Fund 231 Gas Tax revenue by $270,900, and reduces the transfer to the Capital
Improvement Fund by $136,600 for teh Streets Improvement project (PE-86070). This is based on the
State's updated January HUTA and SB1 gas tax revenue estimates. (Ongoing costs: $0)
- (271,000)$ (136,600)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (134,400)$
GAS TAX FUND (231) SUBTOTAL - (271,000)$ (271,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
PARKLAND DEDICATION FUND (209)
Public Works Transfer to the Capital Improvement Fund for the Boulware Park Project (PE-17005)
This technical correction aligns the transfer for a reappropriation of funds from FY 2022 to FY 2023
involving a transfer from the Parkland Dedication Fund to the Capital Improvement Fund for the
Boulware Park Project (PE-17005). The transfer into the Capital Improvement Fund was recorded, but
tthe transfer from the Parkland Dedication Fund was not, so this adds the missing portion of the
transfer to align both sides. (Ongoing costs: $0)
- -$ (1,100,000)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ 1,100,000$
PARKLAND DEDICATION FUND (209) SUBTOTAL - -$ -$
PUBLIC ART FUND (207)
Community
Services
Art & Sciences Division: Annual Funding for Code Art
This action adds funding to continue support for Code:ART, a three-evening interactive media art
festival produced by the City of Palo Alto Public Art Program, which re-imagines Palo Alto’s
underutilized plazas, alleys, and public spaces through interactive light, sound, and motion. The
festival features a major interactive media artwork anchoring the festival and six Urban Interventions
activating downtown storefronts, alleys, parking lots or blank walls in new and inventive ways. The
artworks will invite play and participation, engaging area locals in an event that outwardly reflects the
creative community and culture that thrives here. The Public Art Commission approved the use of
$60,000 from the Public Art Fund to support Code:ART at the September 15, 2022 meeting (Ongoing
costs: $60,000)
- -$ 60,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (60,000)$
PUBLIC ART FUND (207) SUBTOTAL - -$ -$
RESIDENTIAL PARKING PERMIT FUND (239)
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact. (Ongoing Costs: $6,500)
- -$ -$
RESIDENTIAL PARKING PERMIT FUND (239) SUBTOTAL - -$ -$
SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (248)
Police Annual Opioid Settlement Funding
This net-neutral action appropriates $44,291 in revenues and expenditures in the Supplemental Law
Services Fund. The City has applied for and received grant funding from National Opioid Settlement
which will be administered by the Police Department. Many program terms and conditions are in
discovery as this is the first year offered, but outreach and intervention are expected uses of the
funding. Funding of the program is expected to last for the next 18 years and will be cost netural
(Ongoing net costs: $0)
- 44,291$ 44,291$
SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (248) SUBTOTAL - 44,291$ 44,291$
Revenues
Department FTE Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
UNIVERSITY AVENUE FUND (236)
Non-
Deptartmental
Electric Hydro Rate Utilities Allocated Charges
This action aligns the budget for potential revenue impacts from changes in the electric hydro rate
adjuster (E-HRA). Per CMR 14874, the allowable rate increased from $0.013/kWh to $0.048/kWh and
results in revenue impacts are anticipated to increase from $4,050,000 to $23,980,000. The impact to
the General Fund in FY 2023 is approximately $223,000; other funds $437,000. (Ongoing costs: $0)
- -$ 25,000$
Office of
Transportation
Management Staffing Adjustment This
action reclassifies 1.00 FTE Management Analyst to a Senior Management Analyst (0.50 FTE in the
General Fund, 0.30 FTE in Parking Funds, and 0.20 FTE in the Capital Fund). This action is the result of
a classification analysis which found that the duties of the position are better aligned with a Senior
Management Analyst. The work performed is critical to the department and cannot be distributed to
another position. The cost of the reclassification will be absorbed by vacancy savings from the
current budget and will therefore have no budgetary impact in FY 2023. (Ongoing costs: $1,300)
- -$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
- -$ (25,000)$
UNIVERSITY AVENUE FUND (236) SUBTOTAL - -$ -$
Project
Number Title Revenue Expense Comments
AS-10000 Capital Improvement Fund Administration
$ - $ 100,000 This action will fund legal costs associated with capital projects in the Capital Improvement Fund
instead of the City Attorney's Office General
Fund budget.PG-06003 Benches, Signage, Walkways, Perimeter
Landscaping, and Site Amenities
$ - $ 35,000 This action adds funding to replace the aging
slide and pool covers at the Rinconada Kids Pool.
Approving this action at midyear allows for the
slide to be replaced before summer.
PE-18006 Byxbee Park Completion $ 1,300,000 $ - This action corrects a reappropriation from FY
2022 to FY 2023 in this capital project. The
operating budget was not impacted so no
correction is needed.
PE-13011 Charleston/Arastradero Corridor Project $ 37,200 $ - This action appropriates rubberized asphalt
grant revenue from the State to offset costs for
this project.
PE-13011 Charleston/Arastradero Corridor Project $ 35,000 $ - This action appropriates funding from the
Charleston/Arastradero Development Impact
Fee Fund to offset costs in this project.
PE-18016 Civic Center Fire Life Safety Project $ - $ 142,000 This action is a technical correction to fully fund
this project in FY 2023 as there was an issue
moving an encumbrance FY 2022 to FY 2023.
PF-23001 Roth Building Rehabilitation $ 1,381,825 $ 848,825 This action aligns the FY 2023 budget with updated cost and revenue amounts in the Roth
Building Tenant Work Letter.
PE-86070 Street Maintenance $ (136,600) $ (136,600) This action aligns the FY 2023 budget with the
State's updated January HUTA & SB1 Gas Tax
revenue estimates.
Total $ 2,617,425 $ 989,225
WC-19001 Wastewater Collection System
Rehabilitation/Augmentation Project 31
$ - $ 5,650,000 This action increases WC-19001 with savings
from WC-99013 ($825k), moves funding in WC-
19001 programmed in FY24 to FY23 ($3.3M),
and increases the overall project budget by
$2.1M. The project can be expedited to save
costs related to night constuction.
WC-99013 Sewer Lateral/Manhole Rehabilitation and
Replacement
$ - $ (825,000) This action shifts savings from this project to WC-19001 in order to complete work in that project
in FY 2023. Total $ - $ 4,825,000
WQ-19002 Plant Repair, Retrofit, and Equipment
Replacement
$ - $ 100,000 This action will fund legal costs associated with
capital projects at the Regional Water Quality
Control Plant instead of the City Attorney's Office
General Fund budget.
Total $ - $ 100,000
WS-02014 Water, Gas, Wastewater Utility GIS Data $ (332,400) $ - This action reduces the transfers from the Gas
and Wastewater Collection Fund and allocated
funding for this project to align the funding with work completed in previous fiscal years.
Total $ (332,400) $ -
TOTAL CIP ADJUSTMENTS $ 2,285,025 $ 5,914,225
WATER FUND
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2023 CAPITAL IMPROVEMENT PROGRAM
WASTEWATER COLLECTION FUND
WASTEWATER TREATMENT FUND
ATTACHMENT A, EXHIBIT 2
CAPITAL IMPROVEMENT FUND
TABLE OF
ORGANIZATION
1
Table of Organization
Attachment B is the Table of Organization, as amended by the recommended
actions impacting full-time staffing in the FY 2023 Mid-Year Budget Review. In
this report, net 5.25 FTE full-time and 2.43 FTE part-time positions are
recommended to be added. Position additions, reclassifications, and realignments
include:
1.Add 1.00 Division Manager Open Space, Parks, and Golf
2.Add 0.75 FTE Junior Museum and Zoo Educator, offset by the elimination of
0.40 FTE Arts & Science Professional I - H and 0.40 FTE Arts & Science
Professional II - H
3.Add 1.00 Senior Technologist
4.Reclassify 1.00 Management Analyst to 1.00 Senior Management Analyst
5.Reclassify 1.00 Administrative Associate II to 1.00 Administrative Associate III
6.Add 2.00 Senior Planner
7.Add 1.00 Court Liaison Officer
8.Reclassify 1.00 Administrative Associate III to 1.00 Administrative Assistant
9.Add 3.23 part-time positions (0.15 FTE Librarian – H, 2.99 FTE Library Clerk –
H, 0.09 FTE Library Page – H), partially offset by the elimination of 1.00
Librarian and 0.50 FTE Library Specialist
10.Reclassify 1.00 Business Analyst to 1.00 Senior Business Analyst
11.Reclassify 1.00 Assistant Director to 1.00 Division Head Library Services
12.Add 3.00 Coordinator Library Programs, offset by the elimination of 2.00
Senior Librarian
13.Reclassify 1.00 Librarian to Senior Librarian
14.Reclassify 3.00 Library Specialist to 3.00 Library Associate
t
Attachment B
TABLE OF ORGANIZATION
2
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
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%
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 ——%
Attachment B
TABLE OF ORGANIZATION
3
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%
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 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
4
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 ——1.00 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 4.85 1.60 49.2%
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 71.87 4.85 7.2%
Fire
40-Hour Captain**———0.20 0.20 —%
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 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
5
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 33.3%
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%
Library
Administrative Assistant***———1.00 1.00 —%
Administrative Associate III***1.00 1.00 ——(1.00)(100.0)%
Assistant Director Library Services***1.00 1.00 ————%
Business Analyst***1.00 1.00 1.00 —(1.00)(100.0)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
6
Coordinator Library Programs***1.00 1.00 1.00 5.00 4.00 400.0%
Director Libraries 1.00 1.00 1.00 1.00 ——%
Division Head Library Services***1.00 1.00 1.00 2.00 1.00 100.0%
Librarian***6.00 6.00 6.00 5.00 (1.00)(16.7)%
Library Associate***7.00 7.00 6.00 9.00 3.00 50.0%
Library Specialist***11.50 11.50 10.50 9.00 (1.50)(14.3)%
Management Analyst 1.00 1.00 1.00 1.00 ——%
Manager Library Services 3.00 3.00 3.00 3.00 ——%
Senior Business Analyst***———1.00 1.00 —%
Senior Librarian***8.00 8.00 6.00 5.00 (1.00)(16.7)%
Supervising Librarian 4.00 4.00 4.00 4.00 ——%
Total Library 46.50 46.50 40.50 46.00 5.50 13.6%
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)(100.0)%
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 Management Analyst***———0.50 0.50 —%
Senior Planner 0.50 0.50 0.15 0.15 ——%
Traffic Engineering-Lead*0.35 0.35 0.35 —(0.35)(100.0)%
Transportation Planning Manager 1.15 1.15 1.00 1.00 ——%
Total Office of Transportation 6.20 6.35 5.20 5.20 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
7
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 1.80 (1.00)(35.7)%
Administrative Associate III*,***4.00 4.00 3.00 5.80 2.80 93.3%
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 —%
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 ——%
Manager Urban Forestry 0.04 —————%
Planner 4.00 4.00 4.00 5.00 1.00 25.0%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
8
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 —%
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 6.65 3.00 82.2%
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 67.20 13.20 24.4%
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 2.00 1.00 100.0%
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 ——%
Police Chief 1.00 1.00 1.00 1.00 ——%
Police Lieutenant 5.00 5.00 4.00 4.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
9
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 149.00 149.00 124.33 134.13 9.80 7.9%
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 —%
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 ——%
Facilities Technician 4.05 4.05 4.05 4.05 ——%
Heavy Equipment Operator 2.33 2.33 2.10 2.10 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
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)(51.7)%
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 25.0%
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 574.93 574.43 506.80 557.06 50.26 9.9%
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 ——%
Chemist 3.00 3.00 2.00 2.00 ——%
Deputy Chief/Fire Marshal 0.07 0.07 0.07 —(0.07)(100.0)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
11
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 ——%
Senior Engineer 3.76 3.76 3.76 3.76 ——%
Senior Industrial Waste Investigator 0.99 1.00 1.00 1.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
12
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 ——%
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%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
13
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 ——%
Management Analyst**———1.00 1.00 —%
Manager Communications 1.00 1.00 1.00 1.00 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
14
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 —%
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 ——%
Senior Performance Auditor 1.00 1.00 ————%
Senior Resource Planner 6.50 6.50 6.50 7.00 0.50 7.7%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
15
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 ——%
Water System Operator II 4.00 4.00 4.00 4.00 ——%
WGW Heavy Equipment Operator —4.70 4.70 4.70 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
16
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 0.80 (0.15)(15.8)%
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 0.75 0.15 25.0%
Senior Planner 0.50 0.50 0.80 0.80 ——%
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)%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
TABLE OF ORGANIZATION
17
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)(100.0)%
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 Management Analyst***———0.35 0.35 —%
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 ——%
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 ——%
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
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 17.00 3.00 21.4%
Technologist 1.00 1.00 ————%
Total Technology Fund 36.10 36.10 29.10 32.10 3.00 10.3%
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 94.46 4.00 4.4%
Total Citywide Positions 1,034.85 1,034.85 956.00 1,023.10 67.10 7.0%
*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 Amended Budget.
**The FY 2023 Amended Budget includes new job classifications that require completion of appropriate review and potential discussions
with bargaining groups. Proposals in this budget include estimated funding levels for financial planning purposes only and do not reflect
the final terms of the proposed classifications.
***Indicates position adjustments subsequent to the adoption of the FY 2023 budget.
Table of Organization
FY 2020
Actuals
FY 2021
Actuals
FY 2022
Adopted
Budget
FY 2023
Amended
Budget
FY 2023
Change
FTE
FY 2023
Change %
Attachment B
Attachment C
Attachment C – Page 1 of 7
Preliminary FY 2023 2nd Quarter Financial Status
General Fund
Overall, the General Fund is tracking closely to adopted estimated revenues and at or below
adopted expenses. Positive revenue trends continue to persist in the second quarter, with overall
revenues exceeding the same period in the prior year. Although the City has experienced positive
economic trends in recent periods, staff remains cautious to mixed economic indicators of
potential recession. Though data continues to be uncertain, staff believe that these
recommended adjustments are measured and align more closely with the current financial
outlook.
General Fund: Revenues:
The FY 2023 Adopted Operating Budget approved a $215.2 million estimate for revenue sources
(excluding Operating Transfers-in), of which $90.9 million has been collected to date, or 42% of
the budgeted estimate. The overall tax revenue estimates in the FY 2023 Adopted Budget are
higher than FY 2022 Adopted Budget levels by $23 million, from approximately $110 million to
$133 million. Adjustments to realign revenue estimates such as increasing estimates for Property
Tax, Sales Tax receipts, and Transient Occupancy Tax receipts were adopted in FY 2023 to align
with a recovering economy. Highlights of current data on major revenue sources are included
below. Overall, staff is optimistic that revenues will exceed FY 2023 Adopted Budget levels and
adjustments are included in this report to align with the higher estimates.
Table 2
Property Tax
The FY 2023 Adopted Budget is $59.8 million, a $6.5 million or 16.7% increase from the FY 2022
adjusted budgeted level of $53.2 million. Property Tax receipts of $59.4 million were received in
% change FY 2023 %FY 2022 %
Property Tax 7.8%$59,770 32.6%$51,228 35.3%
Sales Tax 23.1%32,580 35.8%28,184 33.7%
Charges for Services 27.1%30,786 49.1%24,515 48.5%
Transient Occupancy Tax 95.9%18,199 53.9%8,428 59.4%
Utility User Tax 10.3%15,579 51.4%14,370 50.5%
Permits and Licenses 3.4%9,794 31.9%8,273 36.5%
Documentary Transfer Tax -46.5%7,217 34.1%7,137 64.6%
All Other Revenue Sources -4.1%41,851 50.7%42,434 52.1%
Total Revenue 11.6%$215,776 42.1%$184,569 44.1%$90,887 $81,454
3,121 3,019
2,464 4,608
21,204 22,103
15,105 11,885
9,809 5,008
8,011 7,261
$19,499 $18,085
11,674 9,485
2nd Quarter Actuals Adjusted Budget
FY 2023 FY 2022
General Fund Revenue
FY 2023 2nd Quarter
(000's)
Attachment C
Attachment C – Page 2 of 7
FY 2022 due to higher than anticipated assessed value growth and payment of disputed excess
Educational Revenue Augmentation Fund (ERAF) distributions ($1.7 million) contributed to these
increased receipts. Consistent with the County of Santa Clara Assessor’s Office, revenues are
expected to meet or exceed FY 2023 budget levels due to higher than conservatively budgeted
revenues. In November 2021, the County of Santa Clara notified the cities that the California
School Boards Association and its Education Legal Alliance filed a lawsuit against the Controller
of the State of California arguing that the settlement reached with the counties in the excess
ERAF calculation methodology is unlawful. The County estimates that 20% to 25% of excess ERAF
in FY 2022, FY 2023, and beyond are at risk due to this litigation. The FY 2022 disputed amount
that has been received has been reserved and the FY 2023 adopted budget excludes this amount
($1.5 million). The FY 2023 adopted budget is anticipated to be higher, therefore staff is
recommending increasing this budget by $0.5 million in this report.
Sales Tax
The FY 2023 Adopted Budget is $32.6 million, an assumed growth of 15.6% from the FY 2022
adjusted budgeted of $28.2 million. Actual Sales Tax receipts of $32.7 million in FY 2022 were
above year end estimated levels; however, overall receipts remained 10.4% below pre-
pandemic actuals of $36.5 million in FY 2019.
Sale Tax for the first six months of FY 2023 is 23.1% higher than the same period of the prior year.
During this period, business sectors with strong growth where apparel, department, and
furniture/appliance stores, restaurants, food markets, auto parts/repair, service stations, health,
and auto leasing. Higher prices due to the elevated inflation contributed to their sales tax
performance. Sectors that didn’t do as well include auto sales, office and electronic equipment,
drug stores, recreation products, and business services. Should the federal reserve achieve its
goal of further taming inflation, sales tax receipts are anticipated to be negatively impacted. As
a result, staff is forecasting a little over 10% decrease for the remainder of FY 2023 due to the
expected slowdown in the economic growth in the latter half of FY 2023. Even with the
anticipated economic slowdown, Sales Tax is anticipated to generate more than the
conservatively budgeted amount in FY 2023, therefore staff recommends increasing the budget
by $1.5 million in this report.
Transient Occupancy Tax (TOT)
The FY 2023 Adopted Budget assumed an estimate of $18.2 million, a 6.9% increase from FY 2022
actual receipts of $16.9 million or $ 1.3 million above. FY 2022 actual receipts were higher than
adopted budget levels of $8.4 million by $8.5 million but remained significantly lower than pre-
pandemic actuals of $25.7 million in FY 2019. Current receipts indicate that this revenue category
continues to have significant growth from the unprecedented lows seen during the pandemic.
TOT is anticipated to generate more than the budgeted 18.2 million in FY 2023 and staff
recommends increasing the budget by $4.0 million in this report.
Transient Occupancy Tax for the first six months of FY 2023 is 95.9% higher than the same period
of the prior year. For this period, the average occupancy rate is 73.2% (prior year it was 59.7%)
Attachment C
Attachment C – Page 3 of 7
and the average room rate is $270 (prior year it was $180). Staff is conservatively forecasting a
10% increase over the prior year for the remainder of FY 2023.
Charges for Services & Permits and Licenses
The FY 2023 Adopted Budget assumed an estimate of $30.8 million in Charges for Services, a
$6.3 million or 25.6% increase from FY 2022 adjusted levels. The FY 2023 Adopted Budget
assumed an estimate of $9.8 million in permit and license revenue, a $1.5 million or 18.4%
increase from the FY 2022 adjusted level. Together, these revenue categories make up nearly
half of all non-tax revenues. In total, $37.7 million was received during FY 2022, above the
revised budget estimates by $4.5 million. These revenue categories consist of charges to
Stanford for fire services and paramedic services, fees related to the City’s golf course, arts and
science classes, plan check fees, and payments to the City for issuance of Building Permits, Fire
Permits, and miscellaneous health and safety-related licenses. Several adjustments to revenue
in Charges for Service are recommended in this report; however, overall revenues in these
categories are in line with activity levels anticipated thus far.
•Community Services (CSD): The demand for CSD programming remains at elevated levels.
Total departmental revenue through the end of the second quarter is approximately $5.8
million or 46% of the FY 2023 total budgeted revenue. At this same time last year, CSD’s
total revenue was tracking at 41% of FY 2022 budgeted revenue levels through the second
quarter. CSD is recommending adjustments to several programs with high demand. Due
to the popularity of ceramics classes, the Public Art Studio has requested a strategic
reorganization that is anticipated to increase the number of classes while being cost-
neutral. As tennis programs have increased in popularity, the department has amended
the contract in FY 2023 to accommodate additional classes. As part of the FY 2024 budget,
the department is also exploring increasing subsidies for low-income youth (17 & under),
seniors (60+), and/or disabled adult residents. The current policy allows a 25 percent or
50 percent fee discount through the Fee Reduction Program up to $300 annually. Income
eligibility is determined using the Community Development Block Grant (CDBG) Low-
Income Guidelines.
•Golf Course: Golf revenue continues to perform well in the first and second quarters of
FY 2023 but is down roughly 5% from this time last year. This could be attributed to
several weeks of heavy rains which would deter play both at the course and the driving
range. Revenue guidance is recommended to remain at its current budgeted level due to
the unpredictability of winter storms in the coming months. The proposed FY 2024 budget
will reassess golf revenue and expenditures based on additional information from third-
quarter results. In addition, the division is working with purchasing to draft a contract to
study the feasibility of adding a second story to the driving range with the additional
potential revenue as an element of the study. Once completed, those projections will be
included as a part of future revenue estimates if that potential project moves forward.
Attachment C
Attachment C – Page 4 of 7
•Junior Museum & Zoo (JMZ): Through the first two quarters of FY 2023, revenue is roughly
at 35% of budgeted levels (approximately $0.9 million in actual revenue vs. $2.5 million
in budgeted revenue). FY 2023 revenues should easily exceed the FY 2022 total of $1.48
million, however, FY 2023 represents the first full year of operations, as the JMZ opened
its doors in October 2021. Memberships remain the best-performing revenue category
(60% of FY 23 target), while facilities rentals are the lowest performing (19% of FY 23
target), reflecting similar trends as the prior year.
Staff has requested funding for a comprehensive operational analysis of the newly
opened Palo Alto Junior Museum and Zoo and to prepare a business plan to inform
ongoing operational and budgetary decisions as a part of Mid-Year recommendations
($50,000). The study will examine financial, operational, and programmatic status and
make recommendations for future operations to include ticket and membership prices,
and how pricing will impact consumer demand. Once the study is completed, staff will
review the results and present recommendations for financial and operational efficiencies
to Council. In addition, Staff is currently working with purchasing for a new reservation
and ticketing platform for the JMZ. Funding this technology initiative was a part of the
Community Services Department FY 2023 Adopted Operating Budget ($50,000).
•Development Services: Preliminary FY 2023 Development Services revenue is up 42.0%
compared to last year and is currently at 54.7% of the FY 2023 revenue target. This is
mainly driven by increased permit activity in the last quarter of 2022 due to a code change
year. Department-managed expenses are currently under or on pace to meet the budget.
The table below articulates Development Services revenues from January through
December from 2020 to 2022.
Table 3: Development Services Revenue – 2021 vs 2022
Attachment C
Attachment C – Page 5 of 7
General Fund: Expenses
Overall General Fund expenses are currently expected to remain within the FY 2022 Adjusted
budget levels of $248.4 million. General Fund expenses (excluding operating transfers) for second
quarter are 11.2% higher than the prior year and are tracking at 38.0% of the Adjusted Budget
(excluding encumbrances). This is slightly lower than the percent expended through the second
quarter in FY 2022 and can be attributed to the continued vacancies across the City in particular
in the Community Services, Planning and Development Services, and Library Departments.
Table 4
Salaries and Benefits
As a service driven organization, the largest expenses are salaries and benefits. Preliminary salary
and benefits expenditures through December 2022 are approximately $71.3 million, or 48.1% of
the $148.4 million FY 2023 Adopted Budget, compared to $64.3 million in the same period in the
prior year. The City continues to maintain vacancies of approximately 154 positions, though this
changes frequently, which reflects approximately a 15.1% vacancy rate. When comparing staff
capacity to deliver services to the community beyond the authorized staffing levels, looking at
December 2021 to December 2022, the City has 30 more full-time employees, however staffing
is still approximately 8% below pre-pandemic benefitted employee (typically full-time) counts. If
looking at all employees, including part-time staffing from March 2020 (pre-pandemic) to
December 2022, the total number of City employees is down over 10%. Use of leaves2 also
impacts service capacity. Looking at the six-month period ending December 2022 versus that
same period in December 2021, use of leave is nearly identical year over year but represents a
23% increase as compared to December 2020.
This year the City is engaging in labor negotiations with various bargaining groups and
unrepresented management professionals to negotiate new agreements. Tentative agreements
Expenditures FY 2023 FY 2022 % change FY 2023 %FY 2022 %
Police 23,934$ 21,025$ 13.8%47,723$ 50.2%43,739$ 48.1%
Fire 20,420 18,289 11.7%41,479 49.2%36,446 50.2%
Community Services 13,379 13,262 0.9%34,690 38.6%32,508 40.8%
Public Works 9,264 7,844 18.1%22,764 40.7%20,124 39.0%
Planning and Development Services 8,916 7,691 15.9%26,426 33.7%20,447 37.6%
Library 4,272 4,073 4.9%10,524 40.6%9,011 45.2%
Administrative Services 4,705 4,263 10.4%10,107 46.6%9,401 45.3%
All Other Departments 9,609 8,522 12.8%54,672 17.6%38,926 21.9%
Total Expenses 94,499$ 84,969$ 11.22%248,385$ 38.0%210,602$40.3%
General Fund Expenses
FY 2023 2nd Quarter
(000's)
2nd Quarter Actuals Adjusted Budget
Attachment C
Attachment C – Page 6 of 7
have been reached with MGMT, IAFF, and SEIU, and the remaining four labor groups (PAPOA,
PMA, FCA, UMPAPA) are pending. This report recognizes $2.6 million in estimated expense
increases commensurate with the status of economic proposals for all groups, including
compensation adjustments and other terms of employment. This expense increase is fully offset
in FY 2023 by the elimination of the Inflation and Salary Reserve ($900,000) set aside by the City
Council during the FY 2023 budget process in anticipation of these agreements, and department
vacancy savings ($1.7 million). Final agreements with the City’s remaining labor groups are
pending.
Public Safety Overtime
Table 5
As shown in Table 4 above, Police Department overtime is trending higher compared to FY 2022
due to a number of factors, including backfilling shifts due to vacancies, benefited leave or
industrial injuries and training a higher than usual volume of new hires. As of this writing, 7% of
positions are vacant, another 10% of staff are unavailable to work due to benefited leave or
industrial injury, and 13% of filled positions have new staff in training (in-house or at the police
academy). The Department is anticipating overtime to continue trending over FY 2022 with a
leveling off if the active hiring cycle continues to stay ahead of departures. For more information
on vacancy and overtime staffing, see Attachment D.
Fire Department overtime expenses are tracking lower compared to FY 2022. The Department
hired nine entry level fire fighters in February 2022 but continues to experience increased
turnover and employee injuries which create vacancies requiring backfill overtime. Seven sworn
Police and Fire
Salaries and Overtime Expense
FY 2023 2nd Quarter YTD
(000's)
FY 2023 FY 2022 % change FY 2023 %FY 2022 %
Inc (Dec)
Police - Salaries 9,148$ 8,192$ 12%20,026$ 46%17,586$ 47%
Police - Overtime 1,509 1,011 49%973 155%944 107%
Total Police 10,657 9,203 16%20,999 51%18,530 50%
Fire - Salaries 7,450 6,451 15%15,997 47%13,936 46%
Fire - Overtime 1,816 2,374 -24%2,124 85%1,931 123%
Total Fire 9,266 8,825 5%18,121 51%15,867 56%
Total Public Safety
Salaries & Overtime 19,923$ 18,028$ 11%39,120$ 51%34,397$ 52%
2nd Quarter YTD Actuals Adjusted Budget
Attachment C
Attachment C – Page 7 of 7
employees have voluntarily left the Department during FY 2023. A current job posting accepting
entry level firefighters is active, and those new recruits will begin an academy in April 2023. The
report includes an adjustment moving $1.5 million from salaries to overtime to help mitigate
impacts, as well as recognizing income and expense offsets for the shared staffing of Fire Station
8 with the Santa Clara County during the high fire risk season. Table 4 above does not show these
recommended adjustments; however, please see Attachment D for Fire Department overtime
information with these recommendations included.
Q2
2021 2022 2023
POLICE DEPARTMENT
Overtime Expense
Adopted Budget (A)$944,186 $944,186 $972,512
Modified Budget (B)944,186 1,244,186 972,512
Net Overtime Cost - see below 366,045 781,344 683,911
Variance to Budget 578,141 462,842 288,601
Overtime Net Cost
Actual Expense $1,431,959 $2,319,043 $1,508,997
Less Reimbursements
California OES/FEMA (Strike Teams)- - -
Stanford Communications 64,906 107,684 67,524
Utilities Communications Reimbursement 33,191 56,004 34,162
Local Agencies (C) 2,412 5,456 2,659
Police Service Fees 467,167 120,411 86,169
Total Reimbursements 567,676 289,556 190,514
Less Department Vacancies (A)498,238 1,248,143 634,572
Net Overtime Cost $366,045 $781,344 $683,911
Department Vacancies (number of days)1,494 3,903 2,322
Workers' Compensation Cases 14 11 8
Department Disabilities (number of days) 1,007 1,221 495
FIRE DEPARTMENT
Overtime Expense
Adopted Budget (D)$1,931,121 $1,931,121 $2,124,054
Modified Budget (E)2,971,460 2,703,621 3,800,642
Net Overtime Cost - see below 1,792,228 4,073,011 1,277,561
Variance to Budget 1,026,424 (1,369,390) 2,523,081
Overtime Net Cost
Actual Expense $2,840,968 $4,684,796 $1,907,675
Less Reimbursements
California OES/FEMA (Strike Teams) 887,531 - -
Total Reimbursements 887,531 - -
Less Department Vacancies (D)161,208 611,784 630,114
Net Overtime Cost $1,792,228 $4,073,011 $1,277,561
Department Vacancies (number of days)1,942 1,717 2,017
Workers' Compensation Cases 14 35 14
Department Disabilities (number of days) 387 947 367
NOTES:
(A)The FY 2023 Police Department budget was increased by 4.0 Police Officers, 1.0 Business Analyst, and 2.0 Public Safety Dispatcher.
(B)Police Department adopted budget has not been adjusted in FY 2023.
(C)Includes Animal Control Services contract with Los Altos and Los Altos Hills.
(D)The FY 2023 Fire Department budget was increased by 1.0 Deputy Chief, 0.20 40-Hour Captain, 3.0 Fire Fighter Trainee,
and 0.05 Fire Marshal
(E)Fire Department adopted budget actions at mid-year: $177,000 County Fire Station 8 overtime reimbursement
and $1.5M salary savings transfer to overtime salaries.
Attachment D
Public Safety Departments
Overtime Analysis for Fiscal Years 2021 through 2023
Attachment D - 1
Attachment E
Attachment E - 1
Summary of Financial Status Reports in FY 2023
A list of prior staff reports providing various fiscal updates for Council deliberations are below.
However, this does not include informational items that have been distributed for quarterly
reporting, such as the Investment Activity Reports.
September 20, 2022, Finance Committee (CMR 14628):
Accept CalPERS Pension Annual Valuation as of June 30, 2021
October 18, 2022, Finance Committee (CMR 14829):
Review Pension and Other Post-Employment (OPEB) (Retiree Healthcare) Trust Funds with
Plan Providers
November 29, 2022, Finance Committee (CMR 14632):
Recommendation to the City Council to Approve the Fiscal Year (FY) 2022 Annual
Comprehensive Financial Report (ACFR) and FY 2022 Budget Amendments in Various Funds
December 6, 2022, Finance Committee (CMR 14748):
Review Revised Actuary Pension Analysis using Alternative Assumptions to CalPERS and
Review Potential Modifications to the Pension Funding Policy
December 6, 2022, Finance Committee (CMR 14630):
Review Q1 Fiscal Year (FY) 2023 Financial Status Report
December 6, 2022, Finance Committee (CMR 14629):
Review and Forward to the City Council the FY 2024 – FY 2033 Long Range Financial Forecast
(LRFF) and FY 2024 Budget Development Guidelines
January 23, 2022, City Council (CMR 2301-0715):
Approval of the FY 2022 Annual Comprehensive Financial Report (ACFR)
February 6, 2022, City Council (CMR 2212-0513):
Adopt Revised Retiree Benefit Funding Policy (Formerly “Pension Policy”) for the Financial
Planning of Employee Pension and Other Post-Employment (OPEB) (Retiree Healthcare)
Plans
February 6, 2022, City Council (CMR 2301-0753):
Accept the FY 2024 – FY 2033 Long Range Financial Forecast (LRFF) and FY 2024 Budget
Development Guidelines