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Tuesday, February 13, 2018
Regular Meeting
Community Meeting Room 7:00 PM
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PUBLIC COMMENT
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Call to Order
Oral Communications
Members of the public may speak to any item NOT on the agenda.
Action Items
1.Presentation and Recommendations for Next Steps Regarding Federal
Aviation Administration (FAA) Initiative to Address Airplane Noise
Concerns of Santa Cruz, Santa Clara, San Mateo, and San Francisco
Counties
2.Staff Recommendation That the Policy and Services Committee
Recommend the City Council Accept the Status Update of the 2016
Disability and Workers Compensation Rates Audit
3.Triennial External Quality Control Review of the Office of the
City Auditor
4.Auditor's Office Quarterly Report as of December 31, 2017
Future Meetings and Agendas
Adjournment
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Policy and Services Committee Staff Report
Report Type: Action Items Meeting Date: 2/13/2018
City of Palo Alto Page 1
Summary Title: Presentation and recommendations regarding Aircraft Noise
Title: Presentation and recommendations for next steps regarding FAA
Initiative to Address Airplane Noise Concerns of Santa Cruz, Santa Clara, San
Mateo and San Francisco Counties.
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends the Policy and Services Committee recommends to the City Council that
Council commits to regularly assign one or more Council Members to actively participate on
available community roundtables related to aircraft impacts; and directs staff to:
i. Request temporary noise monitoring in Palo Alto from San Francisco International
Airport (SFO); and
ii. Provide support to Palo Alto Council Members participating on available community
roundtables related to aircraft impacts; and
iii. Continue to include community impacts of aircraft in the City’s regional, state and
federal legislative priorities and engage with policy makers and associated advocacy
groups as appropriate; and
iv. Include in the above efforts Palo Alto’s continued support for:
a. Improvements to SFO’s Fly Quiet Program,
b. Adherence to the agreement to increase the altitude of aircraft over the
Peninsula whenever able,
c. Maximizing the use of the BDEGA East Arrival route to SFO when possible,
d. Maximizing sequencing under current conditions and prioritizing the application
of air traffic control technology to improve sequencing and aircraft management
to minimize community impacts, and
e. Adoption of improved metrics for airplane noise and related impacts, and
f. Greater community engagement by the FAA, San Francisco and San José airports.
Background
On June 19, 2017, the City Council voted 7-0 (Council Members Fine and Scharff were absent)
to direct staff to:
1. Obtain expert opinion on aircraft noise monitoring strategy; and
City of Palo Alto Page 2
2. Meet with neighboring cities to establish a regional position on the issue of aircraft
noise; and
3. Align resources to be prepared to respond to the Federal Aviation Administration’s
(FAA) response to the reports of the Select Committee on South Bay Arrivals and San
Francisco International Airport (SFO)/Community Roundtable.
The City of Palo Alto submitted a letter to the FAA on July 7, 2017 (Attachment A) to express its
positions in alignment with several recommendations from the Select Committee and the SFO
Roundtable.
In late July 2017, the FAA released its initial response to the Select Committee and SFO
Roundtable recommendations in the form of the “Phase Two report on the FAA Initiative to
Address Noise Concerns of Santa Cruz/Santa Clara/San Mateo/San Francisco Counties, compiled
at the requests of Representatives Farr (Panetta), Eshoo and Speier.”
On November 15, 2017, the City of Palo Alto submitted a letter to the FAA (Attachment B)
expressing its concerns about the Phase Two report and clarifying its positions on the need to
reduce the concentration of SFO arrivals using the MENLO waypoint, increase the minimum
altitude of flights in this vicinity, and reduce vectoring of flights. The letter also underscored the
positions the Select Committee had taken with regard to reverting the SERFR track to the
previous BSR track and the importance of improved noise metrics. The cities of East Palo Alto
and Menlo Park sent similar letters to the FAA in mid-November.
In late November 2017, the FAA released its “Update on the Phase Two report on the FAA
Initiative to Address Noise Concerns of Santa Cruz/Santa Clara/San Mateo/San Francisco
Counties, compiled at the requests of Representatives Farr (Panetta), Eshoo and Speier” (Phase
Two Update) (Attachment C).
On October 3, 2017, the San José City Council authorized the establishment of the Ad Hoc
Committee on South Flow Arrivals to explore possible solutions to address the noise impacts on
residents from certain landing configurations at Mineta San Jose International Airport (SJC). All
cities in Santa Clara County, and the county, were invited to participate with one vote except
San José, which has two votes. Council Member Lydia Kou represents the City of Palo Alto on
this body, which is to complete its work in 120 days. The south flow committee held meetings
on November 17, 2017 and January 26, 2018.
At the recommendation of the Select Committee and of Representatives Eshoo, Khanna and
Panetta, the Cities Association of Santa Clara County has formed a separate Ad Hoc Committee
to explore building the framework for a permanent Roundtable for the South Bay (Santa Clara
and Santa Cruz Counties) regarding aircraft noise issues related to SFO and SJC. Palo Alto
Council Member Greg Scharff is one of the seven current members of the Ad Hoc Committee.
City of Palo Alto Page 3
The Cities Association’s Ad Hoc Committee held meetings on August 31, 2017 and January 25,
2018.
In addition, Atherton Council Member Elizabeth Lewis, in her capacity as the Chair of the SFO
Roundtable, has recently contacted the Cities Association of Santa Clara County to invite one
representative of Santa Clara County, along with one representative of Santa Cruz County, to
join the SFO Roundtable and/or explore the potential for future collaboration between the SFO
Roundtable and a future permanent South Bay Roundtable.
Discussion
With respect to item #1 in Council’s June 2017 direction to staff (obtain expert opinion on
aircraft noise monitoring strategy), staff has consulted experts, interested community
members, and the SFO noise office. SFO staff have confirmed that SFO will honor a previous
offer to provide temporary noise monitoring in the City of Palo Alto. Staff recommends the City
pursue this option with SFO.
With respect to item #2 in Council’s June 2017 direction to staff (meet with neighboring cities
to establish a regional position on the issue of aircraft noise), Palo Alto staff began reaching out
to staff of neighboring jurisdictions last summer. In addition, the mayors of Palo Alto, East Palo
Alto and Menlo Park met with residents to discuss shared perspectives, resulting in the three
cities communicating consistent messages to the FAA in November 2017. The formation of one
or more roundtable entities would provide a more effective, comprehensive and transparent
means of establishing a regional position on aircraft noise. Staff recommends that the City
continue participating collaboratively on the currently established and proposed roundtables
described above.
With respect to item #3 in Council’s June 2017 direction to staff (align resources to be prepared
to respond to the FAA Phase Two report), staff has reviewed the agency’s Phase Two Update
with aviation experts and interested members of the community. In the Phase Two Update, the
FAA categorizes its responses to community positions in four categories: “Addressed Concerns”,
“Feasible and Could Be Implemented in the Short Term”, “Feasible and Could Be Implemented
in the Long Term”, or “Not Endorsed”. Unfortunately, the majority of Palo Alto’s positions were
not endorsed by the FAA or, if found feasible, present limited potential relief due to the
considerable restrictions faced by a metropolitan region juggling arrivals and departures for
three large and growing international airports (SFO, SJC, and Oakland [OAK]). In fact, SJC is now
one of the fasting growing airports in the country (See Attachment G, Mercury News Article). A
brief summary of those City positions (which were adopted in support of formal positions
articulated by the Select Committee and/or the SFO Roundtable), and FAA responses provided
in its Phase Two Update is presented here in items A – G, followed by a brief discussion of
recurring themes in the report.
A. Reduce Concentration of Arrivals through MENLO Waypoint: Not Endorsed.
City of Palo Alto Page 4
Palo Alto supported reducing the concentration of SFO arrivals using the MENLO
waypoint. The FAA has explained it cannot endorse this proposal because shifting
arrivals to variously proposed points to the east or north would conflict with SJC
airspace, which cannot be modified due to safety requirements for SJC.1
B. Relocate Arrivals from the South to the East: Not Endorsed.
Palo Alto supported the notion of redirecting flights arriving from the south farther to
the east (towards the hills to the west of Interstate 5). The FAA has explained that the
current flow of arriving flights from the east (via FAITH waypoint and DYAMD arrivals) is
already saturated with the majority (68%) of SFO’s arriving traffic, and could not
accommodate the addition of flights currently arriving from the south.2 The FAA also
argues against the inefficiency of routing flights from southern California (and Phoenix,
and Mexico) farther to the northeast of their current route into the approach used by
the majority of flights arriving from the east coast and Midwest.3
C. Fly Higher Over the Peninsula: Not Endorsed; Addressed Concerns.
(This is an example of apparent contradictions in the Phase Two Update.)
Palo Alto supported proposals to increase the minimum altitude for flights in our vicinity
from 4,000 to 5,000 feet. In one portion of the Phase Two Update, the FAA states this
recommendation is not endorsed for safety reasons because, to fly a stabilized
approach, aircraft are subject to specific descent gradient requirements that essentially
prohibit being too high, too close to landing. According to the FAA, to stay above 5,000
feet over our area, SFO arrivals would have to travel farther away from SFO to descend
to the appropriate altitude for approach, thereby forcing them into prohibited SJC
airspace.4
However, in another section of the Phase Two Update, the FAA categorizes this matter
as an “addressed concern,” referencing the existing agreement between the SFO
Aircraft Noise Abatement Office and the FAA’s Northern California TRACON that calls for
aircraft to cross the MENLO waypoint “at 5,000 feet during visual conditions and 4,000
feet during instrument landing conditions” when able. The SFO roundtable requested
that this agreement stay in place and be followed, and the FAA states it agrees with the
Roundtable’s recommendation “to the extent feasible.”5 Staff recommends that the City
of Palo Alto advocate for adherence to this agreement.
D. Relocate Northern Arrivals from Peninsula to Bay: Concern Addressed; Feasible in
Short-Term.
(This is an example of an “addressed concern” and a “short-term feasible” solution that
presents little to no improvement from the current state.)
1 Attachment C, page 108.
2 Attachment C, page 109.
3 Attachment C, page 111.
4 Attachment C, pages 106-107.
5 Attachment C, page 88.
City of Palo Alto Page 5
Palo Alto supported calls for BDEGA arrivals to be shifted from the west leg to the east
leg.
(The BDEGA arrival from the north is characterized by two options. The BDEGA West
Downwind leg brings arrivals from north of San Francisco southbound over the
Peninsula before they make an easterly U-turn into a north-facing approach over the
Bay into SFO. The BDEGA East Downwind leg brings arrivals from north of San Francisco
southeasterly over the Bay before they make a westerly U-turn to approach SFO over
the Bay. See Attachment D, Figure 1.)
The FAA classifies its answer to this proposal as an “Addressed Concern” because it
concurs with the recommendation to utilize BDEGA East when possible. In fact, the FAA
“currently routes BDEGA arrivals to the East downwind to the extent operationally
feasible.”6 However, the FAA report underscores the limitations of utilizing BDEGA East
because it shares its final approach with the highly congested DYAMD arrival from the
east. The FAA reports that folding BDEGA arrivals in with DYAMD arrivals is a challenge
not only due to DYAMD’s density of use, but also because DYAMD is constrained by OAK
airspace to the north and SJC airspace to the south, thereby limiting the ability of air
traffic controllers to vector DYAMD arrivals (to make space for BDEGA arrivals) without
creating “a ripple effecting, jeopardizing safety and resulting in delays” potentially
across all three airports (See Attachment D, Figure 2). Furthermore, the limited space in
between DYAMD arrivals that can be used for routing BDEGA arrivals on the East leg
instead of the West leg will likely continually decrease as SFO’s overall traffic counts are
expected to continually increase.7 Therefore, while this solution demonstrates a
willingness on the part of the FAA to mitigate impacts on the Peninsula, it is not likely to
produce any improvement from the current state (since it is already being utilized) and,
instead, will likely shrink in value over time as a mitigating solution – at least with
respect to daytime noise.
With respect to nighttime hours, the FAA identifies a “feasible short-term” solution as it
reports it is working to update its procedures to accommodate maximizing use of
BDEGA East from the beginning of Nose Abatement Procedure hours until 6:00AM. The
FAA commits to “continue to reinforce the use of this procedure to personnel through
training and briefings.”8 Staff recommends the City communicate its acknowledgement
of the FAA’s commitment to this short-term solution and encourage continued
exploration of other ways to maximize use of BDEGA East whenever possible.
E. Reduce Vectoring over the Peninsula: Requirements Not Endorsed; Study Feasible
Short-Term.
The City joined with others in calls for reduced vectoring of arriving flights. The FAA
insists that speed control and vectoring are tactical decisions used by air traffic
controllers to manage the sequencing of aircraft and it will not support any proposed
formal restrictions on when air traffic controllers may or may not use this “vital
6 Attachment C, page 98.
7 Attachment C, pages 71-72, 81-82.
8 Attachment C, page 98.
City of Palo Alto Page 6
component” of their tools for accomplishing their mission.9 However, the FAA “is
continuously working to improve aircraft setup and sequencing between facilities” and
agrees that the BDEGA Arrival route has light enough traffic that it is a candidate for
studying whether in-trail spacing may result in a decrease in vectoring.10 Staff
recommends the City seek opportunities to maximize the FAA’s use of in-trail spacing or
sequencing on BDEGA in the near term and, when beneficial, on additional routes in the
long term.
F. Organize Aircraft Schedules and Use Flow Management to Limit Noise: Feasible Long-
Term.
The City of Palo Alto has supported recommendations to encourage the FAA staff to
work across its divisions to minimize noise through efficient organization of aircraft
schedules and utilizing arrival descents that limit the use of speed brakes. In response to
calls for new, more effective, time-based flow management tools that allow for better
sequencing of aircraft that are vectored or held prior to final approach, the FAA has
stated it is committed to incorporating these improvements as they become available.11
Staff recommends the City continue to advocate for such solutions to be implemented
by the FAA as quickly and thoroughly as possible.
G. Develop Improved Metrics for Airplane Noise: “Not FAA’s Action”
The City of Palo Alto has supported recommendations by the Select Committee calling
for Congressional action to direct the FAA to adopt supplemental metrics that better
characterize the true impact of aircraft on people on the ground. Although the adoption
of new metrics would fall under the purview of the FAA, the FAA’s Phase Two Update
declined to speak to this policy recommendation; apparently because the
recommendation’s phrasing is, technically, directed to the legislative branch of the
federal government.
The City of Palo Alto, through its legislative advocacy team in Washington, D.C., has
been monitoring the progress of FAA reauthorization legislation. As reported to the
Policy & Services Committee during its discussion of legislative priorities on November
14, 2017, while the Senate FAA reauthorization bill does not address aircraft noise and
community engagement, the House FAA reauthorization bill includes several provisions
related to noise and community engagement. These include a requirement for the FAA
to conduct a review of the relationship between aircraft noise exposure and its effects
on communities around airports, which would subsequently inform future
recommendations for revising the FAA’s land use compatibility guidelines (See
attachment E).
Staff recommends the City continue to advocate for improved noise metrics and other
solutions to negative impacts of aircraft, including greater FAA community engagement.
9 Attachment C, page 110.
10 Attachment C, page 97.
11 Attachment C, page 101.
City of Palo Alto Page 7
The FAA’s Phase Two Update addresses several community concerns by citing its request that
SFO update its Fly Quiet Program. Staff recommends the City partner with other jurisdictions,
including through community roundtables, to work with SFO in developing detailed
improvements as part of its update to its Fly Quiet Program.
Throughout the Phase Two Update, the FAA makes clear that safety considerations are
paramount; City staff concurs.
Several times in the Phase Two Update, the FAA reiterates it will not support solutions that
result in shifting the problem of noise from one community to another. It also repeatedly
identifies increased flying distance as an unacceptable outcome of many community-proposed
solutions that conflict with the economic and environmental benefits and operational
efficiencies gained from shorter flying distances. In addition, it repeatedly points to the
anticipated inevitability of increased congestion as airports increase and expand their flight
operations. The Phase Two Update explicitly states it will not move forward on certain
technically feasible recommendations “until issues of congestion, noise shifting and flying
distance have been addressed with the airline stakeholders and the affected communities by
the Select Committee and/or SFO Roundtable.”12 While the Select Committee has disbanded,
the South Bay Roundtable envisioned by the Cities Association would likely be viewed as an
appropriate surrogate for this function in partnership with the SFO Roundtable.
The City of Palo Alto is one of over 100 municipalities in the Bay Area. The ability of any single
community of 67,000 to influence the complex operations of a federal agency serving a region
of 8 million people is, by definition, limited. In addition, the impacts of airplane noise must be
considered amid the often competing interests of our neighboring jurisdictions, the flying
public, airline industry priorities, airport operational requirements, broader economic and
environmental impacts and, above all else, safety. The successful navigation of these public
interest challenges requires effective collaboration. Staff strongly recommends the City
continue to seek cooperative opportunities to team with neighboring jurisdictions through
community roundtables and similar partnerships to most effectively address the community
impacts of aircraft operations.
Palo Alto’s Representative Anna Eshoo, as well as Representatives Khanna, Panetta and Speier,
have expressed support for aircraft noise solutions. In addition, Congresswoman Eshoo joined
with other Members of Congress to form the Quiet Skies Caucus in Congress to support policy
solutions to address airplane noise. Staff recommends the City continue to express appreciation
to Congresswoman Eshoo and the rest of the region’s Congressional delegation for their
continued support on these issues. Staff also recommends the City continue partnering with
national organizations like the National Association to Insure a Sound Controlled Environment
(N.O.I.S.E.) (see Attachment F) to advocate at the federal level for improved noise metrics,
community engagement, and other solutions to the negative impacts of aircraft operations.
Attachments:
12 Attachment C, page 103
City of Palo Alto Page 8
Attachment A: 2017-07-07 Mayor's Letter to FAA
Attachment B: Letter to FAA_11_15_17
Attachment C: FAA Phase Two Update
Attachment D: Maps
Attachment E: VanScoyoc
Attachment F: Noise
Attachment G Mercury News Article
Michael P. Huerta, Administrator
Federal Aviation Administration
800 Independence Ave. SW
Washington, D.C. 20024
Ci~ of Palo Alto
Office of the Mayor and City Council
Subject: City of Palo Alto Response to FAA Initiative Phase Two Report Issued July 2017
Dear Administrator Huerta:
On behalf of the Palo Alto City Council and further to our letter dated July 7, 2017, I want to reiterate
our continuing appreciation for the work of FAA staff to address the problems Palo Alto and neighboring
cities have experienced since implementation of the NextGen program in the Northern California
Metroplex. NextGen added substantial air traffic to our skies, mainly due to the high concentration of
jets that now fly over or near MENLO waypoint, at low altitudes, throughout the day and night. It
remains critical to achieve meaningful relief since jet noise -as well as emissions -have a negative
impact on the quality of life and health of people who live, work and study in our City.
We recognize that the FAA Initiative to Address Noise Concerns of Santa Cruz/Santa Clara/San
Mateo/San Francisco Counties is intended to explore changes to published procedures that would help
mitigate noise complaints. The purpose of this letter is to highlight Palo Alto's top three priorities as they
relate to specific items in the FM's Phase Two report issued July 2017 (the "Report") as part of the
initiative.
While the Report signals some relief is in progress at last, we are concerned the FAA does not provide
adequate assurance that solutions will include higher, more distributed flights, as well as fewer
overnight flights, sooner rather than later. Nor does it sufficiently commit to a transparent process -
including credible impact assessments -before any final implementation decisions. We urge the FM to
consider the below priorities as it prepares for Phase Three of the initiative process.
1. Reduce the concentration of SFO arrivals using MENLO waypoint. Per FAA data, 60% of SFO
arrivals pass over or near MENLO waypoint, mostly on the SERFR and BDEGA West-leg paths. One
action that would greatly alleviate this problem is to designate alternative waypoint(s) to MENLO for
a portion of SERFR southern arrivals {which represent 30% of all SFO arrivals). The Report indicates
this proposal is "currently under evaluation" {4.d .iv). Some alternative waypoints have been
proposed that could enable aircraft to fly at significantly higher altitudes -and over less-populated
areas-and then descend the length of the Bay. We also encourage the FM to develop other
options based on its analysis and modeling. To address potential objections to moving some flights
(in both this and other contexts), the FAA should specify objective criteria for what constitutes
"noise shifting."1
1 One such standard appears in the FAA's Finding of No Significant Impact and Record of Decision for the NorCal
OAPM Project issued July 2014 (at http://www.metroplexenvironmental.com/docs/norcal metroplex/
NorCal OAPM FONSl-ROD.pdf). On page 5, it states that noise impacts need only be evaluated for proposed
changes in arrival procedures up to 7,000 feet above ground level (AGL), which implies that re-routing flights to
above 7,000 feet AGL would not be considered to cause noise-shifting. To the extent some overflights of
populated areas will occur below 7,000-foot altitudes, the FAA should establish an equitable dispersal approach
that uses a "pre-NextGen baseline" of flight concentrations.
P.O. Box 10250
Palo Alto, CA 94303
650.329.2477
650.328.3631 fax
November 15, 2017
Another action that would help reduce MENLO concentration is to rebalance BDEGA West northern
arrivals {which come down the Peninsula and make a U-turn over Palo Alto area) and BDEGA East
arrivals {which fly more over the Bay). We appreciate that the Report indicates rerouting night
flights is feasible and could be implemented in the short term {l.c.vi, 2.a.i). The Report additionally
states that rerouting flights during certain times of the day is also feasible but implementation
would be in the long term {3.a.i), and that restoring the West/East balance to its pre-2010 level
{SO/SO) is "currently under evaluation" (4.a.iii). Although these changes would still leave a
significant number of BDEGA flights over Palo Alto, they would provide some relief, and we
therefore hope the FAA proceeds with these steps as expeditiously as possible.
2. Increase minimum altitude for all flights over/in vicinity of MENLO waypoint to at least 5,000 feet.
The current minimum altitude at MENLO is 4,000 feet {although anecdotal data from users of the
stop.jetnoise.net app show a significant portion of jets overfly MENLO below 4,000 feet), which is
lower than before NextGen. The Select Committee on South Bay Arrivals unanimously
recommended increasing the minimum altitude to S,000 feet for all traffic over and around MENLO.
The Report states that a S,000 minimum altitude for vectored flights in the vicinity of Menlo, as well
as aircraft crossing Menlo/vicinity under visual conditions, is "currently under evaluation" (4.d.i,
4.d.ii). The Report rejects a 4,000-foot minimum altitude for instrument approaches over MENLO as
"not feasible" due to "procedural development criteria & safety standards" (6.c.viii).
While we are encouraged that S,000-foot minimums are under evaluation for vectored and visual
approaches and urge prompt action, we believe strongly that similar relief must be extended to
instrument arrivals, which constitute much of the MENLO traffic. The FAA provided assurance that
NextGen would allow aircraft to "maintain higher altitudes and lower thrust for longer periods" in its
draft Environmental Assessment for the NorCal OAPM published in March 2014.2 No sound reason
has been given why a S,000-foot minimum for instrument flights would not be feasible if, for
example, the glide slopes for RWYs 28R and/or 28L were increased even slightly to allow for higher
descending altitudes, especially considering that technological advances such as RNAV and GPS
enable aircraft to follow more accurate and better-defined routes. We therefore urge the FAA to
reconsider its position and to further provide a means for ongoing monitoring and enforcement to
assure compliance once new procedures are established.
3. Reduce vectoring of SFO arrivals without worsening MENLO concentration. About SO% of arrivals
on SERFR, plus those on BDEGA and OCEANIC, are routinely turned off their assigned procedure by
Air Traffic Control to sequence them for merging onto final SFO approach. This causes substantial
noise due to more aircraft miles, turning, and changes in speed. The Report notes that a proposal
for the FAA to work with the SFO Roundtable "to determine where aircraft can be vectored with the
least noise impact" is feasible/short-term {2.d.i). Increased in-trail separation on SERFR and possibly
BDEGA, which may entail ground delays at departing airports, is noted as feasible/long-term (3.c.ii).
We appreciate the intent to direct aircraft to be vectored so as to cause "the least noise impact,"
but request more specific criteria for how this determination will be made. Also, under no
circumstances should a reduction in vectoring lead to even higher concentrations on flight paths
over and around MENLO waypoint.
2 At http://www.metroplexenvironmental.com/docs/norcal metroplex/NorCal OAPM DEA Complete.pdf,
section 1.2.5.3.
2
In addition, the FAA is considering reverting the SERFR track to the old BSR track (2.f.i). The Select
Committee had conditioned its approval of this proposal on several criteria to prevent moving noise as
compared to 2014 levels, and it is important these are followed. Further, we continue to believe that
improved, supplemental noise metrics are critical to properly assess the true impact experienced by
people on the ground, and we encourage prompt action on the FAA's evaluation of this issue (4.e.xi).
The Palo Alto City Council remains committed to working with the FAA, San Francisco International
Airport, San Jose International Airport, Congressional leaders, our neighboring cities and counties, and
all stakeholders to ensure a reasonable solution is identified for our region.
Sincerely,
~ H. G egory Scharff
Mayor
cc: Senator Dianne Feinstein of California
Senator Kamala D. Harris of California
Representative Anna Eshoo
Representative Jackie Speier
Dennis Roberts, Federal Aviation Administration, Regional Administrator
Palo Alto City Council
James Keene, City Manager
Molly Stump, City Attorney
3
Attachment C:
FAA Initiative to Address Noise Concerns of Santa
Cruz/Santa Clara/San Mateo/San Francisco Counties
UPDATE ON PHASE TWO
Compiled at the Requests of Representatives Farr
(Panetta), Eshoo and Speier
November 2017
This attachment can be found at the following link:
https://www.cityofpaloalto.org/civicax/filebank/documents/62294
Attachment D
Figure 1: BDEGA Arrivals, West and East Legs
Figure 2: DYAMD Arrival, SFO Final Approach, and Surrounding Airspace
1
Memorandum
TO: Heather Dauler and Khashayar Alaee
FROM: Steve Palmer, Channon Hanna, and David Haines
RE: Update: Committee Votes on House and Senate FAA Reauthorization Bills / Summary of
Noise and Community Engagement Provisions
DATE: June 30, 2017
This memo is an update to the memo dated June 23 which outlined the noise and community
engagement provisions in H.R. 2997, the 21st Century Aviation Innovation, Reform, and Reauthorization
Act (21st Century AIRR Act) and S. 1405, the Federal Aviation Administration Reauthorization Act of
2017. The additional information reflects in this memo reflects how both bills were treated during
Committee consideration.
H.R. 2997, the 21st Century Aviation Innovation, Reform, and Reauthorization Act
House Committee Markup
On June 27, the Transportation and Infrastructure Committee approved by a vote of 32-25, H.R. 2997,
the 21st Century AIRR Act. The six-year bill creates a private, nonprofit organization to run the nation’s
air traffic control system and provides additional language on airport noise and community engagement.
During the markup, only one amendment on noise was offered by Rep. Michael Capuano (D-MA). The
amendment would have given FAA the exclusive authority to resolve noise disputes and require any
change in air traffic management procedures, including standard instrument departure procedures,
standard terminal arrival routes, and instrument approach procedures, or other necessary activities by
the new corporation affecting the airspace to reduce noise exposure. During the discussion, Chairman
Shuster voiced opposition to the amendment saying that he believes the bill already provides this
authority on noise issues to FAA. He continued by saying that he would agree to continue to work on
this issue with Rep. Capuano, if he would agree to withdraw his amendment. In response, Rep. Capuano
withdrew the amendment saying he looked forward to working with the Chairman on the issue.
H.R. 2997 – Noise and Community Engagement Provisions
The following provisions are in the bill and did not change during this week’s committee action:
• Addressing Community Noise Concerns. When proposing or amending area navigation
departure procedures that would have flights between the surface and 6,000 feet over noise
sensitive areas, the bill requires FAA to consider other procedures to address community noise
concerns if: 1) the affected airport, in consultation with the affected community, submits a
2
request to FAA to consider other procedures; 2) the airport’s request would not conflict with the
safe and efficient operation of the national airspace system; and 3) the effect of a modified
departure procedure would not significantly increase the noise over noise sensitive areas.
• Study on Potential Heath Impacts of Overflight Noise. The bill requires FAA to conduct a study
on the heath impacts of noise from aircraft flights on residents exposed to a range of noise
levels. The study must include: an examination of the incremental health impacts of noise
exposure including sleep disturbance and elevated blood pressure; consider the incremental
heath impacts on residents living partly or wholly underneath flight paths most frequently used
by aircraft flying below 10,000 feet, including during takeoff and landing; include an assessment
of the relationship between a perceived increase in aircraft noise and an actual increase in
noise, particularly in areas with high or variable levels or non-aircraft ambient noise. The study
is required to focus on the following metropolitan areas: Boston, Chicago, New York, the
Northern California Metroplex, Phoenix, and any other area the FAA believes should be
considered. A report to Congress is due within 90 days of FAA completing the study.
• Community Involvement in FAA NextGen Projects Located in Metroplexes. The bill requires that
within 180 days of enactment, FAA complete a review of the agency’s community involvement
practices for Next Generation Air Transportation System (NextGen) projects located in FAA-
identified metroplexes. There is a requirement that the review include a determination of how
and when to engage airports and communities in performance based navigation proposals.
• The FAA is required to submit a report to Congress within 60 days of the review which describes:
1) how FAA will improve community involvement practices for NextGen projects located in
metroplexes; 2) how and when FAA will engage airports and communities in performance based
navigation proposals; and 3) lessons learned from NextGen projects and pilot programs and how
those lessons are being integrated into community involvement practices for future NextGen
projects located in metroplexes.
• Noise Exposure Study. The bill requires that FAA conduct a review of the relationship between
aircraft noise exposure and its effects on communities around airports. The FAA is required to
send a report to Congress within two years containing the results of the review. Based on the
results of the review and in coordination with other agencies, the report should include FAA’s
preliminary recommendations for revising the land use compatibility guidelines.
S. 1405, the Federal Aviation Administration Reauthorization Act of 2017
Senate Committee Markup
On June 29, the Commerce, Science, and Transportation Committee approved S. 1405, the Federal
Aviation Administration Reauthorization Act of 2017. The bill does not contain any relevant language on
airport noise and community engagement. During the markup, several amendments were offered and
accepted, none of which touched on airport noise or community engagement.
Next Steps
While both House Transportation and Infrastructure Chairman Bill Shuster and Senate Commerce,
Science, and Transportation Chairman John Thune have said they would like to see floor action on their
3
respective bills in July, both have admitted that time may not be available given the packed
Congressional agenda before August recess. We will continue to track these bills as they move through
both the House and the Senate and notify you of any changes made that are relevant to airport noise
and community engagement.
N.O.I.S.E.
National Association to Insure a Sound Controlled Environment
2017 Legislative Priorities
1. COMMUNITY ENGAGEMENT // ADVOCACY
N.O.I.S.E. supports expanding community engagement/review and the elimination of Categorical
Exclusions (CATEX) when implementing Performance Based Navigation (PBN).
Although N.O.I.S.E. supports NextGen and its goal of modernizing the air traffic control system,
Performance Based Navigation (PBN) has the potential to bring significant changes to flight patterns
across the country. N.O.I.S.E. contends that the community impacts of aviation noise should be
considered as a crucial part of the calculation that determines the overall benefits of the proposed
changes. Changes should not be solely based on improved capacity and fuel savings. With the increased
concentration of overflights due to the narrowing of flight paths and the decrease in separation between
aircraft enabled by PBN, air traffic changes have become even more closely tied to changes on the
ground.
Aviation noise is a health issue. Aviation noise is an economic issue. To that end, robust, two-way
communication with affected communities is vital to ensuring that the impact and concerns of
communities are heard and incorporated into the final design of new airspace as much asfuel savings
and efficiency of airspace. This would allow communities under a new or concentrated flight path,
guaranteed participation in a due process during the implementation of PBN.
As a part of efforts to ensure adequate community engagement, N.O.I.S.E. believes that both regulatory
and legislative Categorical Exclusions or “CATEXes” in current NEPA regulation are not appropriate for
the implementation of significant changes to our aviation system. N.O.I.S.E. supports efforts by the FAA
and Congress to develop, implement and maintain a more robust community impacts process, in
addition to or outside of the traditional NEPA process. This process should insure that ground impacts
are considered and community concerns are not only heard, but also incorporated into PBN and
traditional track changes that will change noise exposure, even if it does not reach the current FAA
threshold of “measurable impacts”
In December of 2016, the following language was included in the National Defense Authorization Act,
which promotes this priority: Performance-Based Navigation : This section improves the Federal
Aviation Administration's (FAA) advance consultation with communities underneath the flight paths of
proposed "NextGen" departure and arrival procedures, and requires the Administrator to reopen his
assessment of new NextGen procedures at Phoenix Sky Harbor International Airport and to mitigate any
adverse effects on the human environment that resulted from those procedures."
2. NOISE METRICS REVIEW
N.O.I.S.E. supports investigation and review of DNL and its current level of 65 as the only metric
used to measure noise impact and expanding noise metrics to take into account the increased
concentration of overflights due to the narrowing of flight paths and the decrease in separation
between aircraft enabled by PBN procedures to insure that noise impacts are appropriately
measured.
N.O.I.S.E.
National Association to Insure a Sound Controlled Environment
In order to adequately understand and address the impacts of aviation noise, we must first establish
adequate metrics to measure those impacts. The FAA and Members of Congress are in the process of
studying whether 65 is still the appropriate DNL level for measuring noise impacts. As we move forward
with NextGen, implement PBN and undertake major airport overhauls, lowering the DNL level may
allow for further mitigation for impacted communities and N.O.I.SE supports investigation of lowering
the DNL level, however it will not address impacts that are caused by concentrated flight paths
characterized by PBN procedures.
As DNL is an average and humans do not perceive noise in averages but rather as individual events, we
believe it is time to investigate alternative metrics that could measure impacts such as:
• The psychological impact of concentrated, extended noise
• The physiological impact of infrequent, significant noise spikes during nighttime hours
• Impact of less audible low frequency noise who’s vibration induces audible noise
• The length of each period of frequent, regular noise spikes “rush hours” due to over-flights
• The number of rush hours per day
• The average dB of a rush hour’s noise—not day-night average
• The intensity of spikes above the average dB of a rush hour’s noise
• The intensity and number of spikes above the average, for non-rush hours from 10 PM to 7 AM
Investigating a more appropriate metric to measure aviation noise impacts is crucial and will
supplement efforts to greater engage the community to understand their concerns.
3. HEALTH IMPACTS STUDI ES
N.O.I.S.E. supports increased funding for studies on the health impacts of aviation noise.
There are currently very few federal studies pertaining to the human impact of the concentration of
flights associated with PBN procedures. Some communities do not have the ability to mitigate noise
below flight paths and their citizens are exposed to continuous concentrated noise. Although there may
not necessarily be an increase in decibels from the planes, there are unknown potential impacts from
the increased number and frequency of flights under a given PBN procedure.
Although N.O.I.S.E. has supported the implementation of NextGen technologies as a part of their formal
legislative platform in the past, we assert that there must be proper investment into research and
development on the health and psychological impacts of that type of the resulting noise due to the more
concentrated flight paths. These studies need to begin as soon as possible in order to protect the health
of affected communities and mitigate avoidable damage.
4. SOUND INSULATION PROGRAM FUNDING
N.O.I.S.E. supports implementing Sound Insulation Programs Resulting from Part 150 Program
studies to the standards used prior to the September, 2012 Public Guidance Letter (PGL-12-09).
A Part 150 program is a noise mitigation master plan developed by the airport and communities to
address noise impacts and is funded by the Federal Aviation Administration (FAA) out of the Airport
Improvement Program (AIP). One outcome or tool of a Part 150 is a sound insulation program where
homes are mitigated for noise by providing improvements to windows or heating and cooling systems.
N.O.I.S.E.
National Association to Insure a Sound Controlled Environment
Insulation programs historically have mitigated homes within the 65 DNL noise contour. A Public
Guidance Letter (PGL) was issued by the FAA to change the AIP handbook in August, 2012 and amended
in November, 2012.
In order to be eligible for insulation, properties must meet a 2-stage eligibility test: the property must be
in the 65 contour and the property must meet an interior noise level requirement (45 dB or greater).
Additionally, use of Passenger Facility Charges (PFC’s) is no longer considered eligible to be used to
mitigate beyond the stated criteria. The FAA maintains that this is not a new policy and that this PGL
serves to clarify their noise policy that has been in place since the mid-1980’s. Previously, however,
common practice dictated that properties need only be within the 65 DNL to qualify for mitigation.
In addition, given the age of some SIP programs in the Unites States, as well as the increase in traffic
density at our nation’s airports and improved technologies, N.O.I.S.E. supports the development of
criteria for eligibility for SIP funding for “second round” implementations.
5. AIR TRAFFIC CONTROL PRIVATIZATION
N.O.I.S.E. opposes privatization of the air traffic control
N.O.I.S.E. has advocated strongly for community engagement opportunities when air traffic patterns are
changed. Under a federally-operated Air Traffic Control (ATC) system, those opportunities are the result
of persistent advocacy by the community and often times at the request of elected officials at the
Congressional level. Although small communities have a role in the proposed advisory board of the new
private air traffic control, airport-adjacent communities are concerned that without a mechanism for
compelling the private company to meet and discuss their concerns over ground and noise impacts of
airport traffic. Authors of this proposal in the House have assured interest groups that community
concerns will still be managed by the FAA and not the private ATC. However, because of the great
importance that N.O.I.S.E. and its members place on the ability to build relationships and trust with local
air traffic employees, our concerns with this proposal remain.
6. N.O.I.S.E. SUPPORTS EFFORTS TO REINSTITU TE
THE ENVIRONMENTAL PR OTECTION AGENCY’S
(EPA) OFFICE OF NOISE ABATEMENT AND
CONTROL (ONAC).
The EPA office of Noise Abatement and Control was previously responsible for oversight and regulation
of aviation noise, however, in 1981, the Office was defunded due to budget cuts. There are currently
legislative efforts, such as Congresswoman Grace Meng’s (NY) “Quiet Communities Act of 2015”
(H.R.3384) which requires the Environmental Protection Agency (EPA) to combat aviation noise
pollution. This legislation would reinstate the ONAC, and also require the EPA Administrator to conduct
a study of airport noise and examine the FAA’s selection of noise measurement methodologies, health
impact thresholds, and abatement program effectiveness. N.O.I.S.E. supports this legislation and the
reinstitution of the ONAC in order to provide proper checks and balances to FAA noise policies and
procedures that impact residents and the environment on the ground under flight paths and in airport-
adjacent communities.
New and cheaper flights fueled by resurgence
at Bay Area airports
The surge in flights at SJC and OAK has been a delight to East Bay
and South Bay travelers
By JOHN WOOLFOLK | jwoolfolk@bayareanewsgroup.com |
PUBLISHED: January 28, 2018 at 6:00 am | UPDATED: January 29, 2018 at 5:53 am
It’s a good time to fly in the Bay Area.
In a turnaround that seemed unimaginable a decade ago, airlines that were rocked by spiking fuel
prices, a sour economy and a rash of bankruptcies are now flying high, filling Bay Area airports
with new and cheaper domestic and international flights.
Flights once available only in San Francisco have flocked to San Jose, now the nation’s fastest
growing airport, and Oakland, which has seen a surge in international travel. Gone are the days
when the only San Jose to New York flight was a red-eye and the city airport’s only international
destination was Mexico. Silicon Valley travelers now fly from San Jose to the Big Apple
throughout the day, and jet straight to Japan, China, England, Canada and Germany.
At Oakland’s airport, international no longer means just late night flights to Mexico and a
weekly departure to the Azores during the summer. It now boasts flights to Spain, England,
Denmark, Sweden, Norway, and coming this year, Italy and France.
“The Bay Area and Silicon Valley in particular has become the center of the universe, and every
airline wants to be part of the action,” said Chris McGinnis, founder of San Francisco-based
travel blog Travelskills.com. “San Francisco appears to be running out of space to accommodate
all this, so everyone’s running to San Jose and Oakland to get into the market. With all those new
seats and new flights, it means fares are coming down.”
A couple could book a weekend getaway in April with nonstop roundtrip flights from San Jose to
Beijing for as low as $470 on Hainan Airlines. They could fly from Oakland to Barcelona
nonstop on Norwegian for $588 round trip each.
The resurgence of the Bay Area’s smaller airports has been a delight to travelers, particularly
those who find San Jose or Oakland closer to work or home.
“It’s a lot more convenient,” said Tim Renouf, 50, a software engineer at Advanced Micro
Devices who now flies direct between home in England and work in Silicon Valley.
“It beats sitting on 101 after a long flight to San Francisco,” co-worker David Stuttard, 47, said
with a smile.
For Veronica Niegsch of Pleasanton, more options to fly direct from Oakland to visit family in
Mexico have been a blessing.
“I love it,” said Niegsch, 44, a Federal Aviation Administration budget official who was waiting
last week to board a Volaris flight to Guadalajara. Not only is Oakland closer to home, but she
finds it much quicker to park and get through security. “It’s small, but you have a lot of options.”
The air travel surge has been a relief to Bay Area airport officials, who bet big on modernizing
their 1960s-era facilities during the downturn a decade ago.
Shortly after San Jose approved its biggest-ever bond sale for a $1.3 billion airport makeover, the
airport’s top official warned that the U.S. airline industry was “facing its worst crisis in its
history.” Fuel prices were soaring, carriers were reporting record losses and a half-dozen airlines
had filed for bankruptcy protection.
San Jose and Oakland watched anxiously as struggling airlines consolidated routes at major hubs
like San Francisco. Passenger traffic was still falling to 8.2 million in 2010 when San Jose
unveiled its gleaming new, spacious high-tech terminal, which had been scaled back from a more
ambitious plan. Oakland invested in a $300 million terminal improvement program and a BART
transit connection that opened in 2014. Yet passenger traffic that peaked at 14.6 million in 2007
plummeted to 9.3 million with the onset of the Great Recession.
But in the last five years, annual passenger traffic has jumped 25 percent to 55.8 million at San
Francisco International, 31 percent to 13.1 million at Oakland International and a stunning 51
percent to 12.5 million at Norman Y. Mineta San Jose International Airport.
“To some extent San Jose has bounced back the most because it had lost the most before,”
said Alan R. Bender, professor of aeronautics at Embry-Riddle Aeronautical University
Worldwide in Daytona Beach, Florida.
Falling fuel prices and a now-booming economy helped pull the airlines out of their tailspin,
along with a wave of mergers and a new generation of highly efficient jetliners. Aircraft like the
Boeing 787 and Airbus A350 have allowed airlines more freedom to take chances on routes from
smaller airports.
“With fuel prices low and these very economical jets, that favors medium markets like San
Jose,” Bender said. “They can take risks they couldn’t take a few years ago.”
But patience, persistence and some smart plays helped San Jose and Oakland take advantage as
the industry recovered.
In San Jose, city officials spent years courting a direct flight to Asia, something Silicon Valley
executives had been craving. They worked with business leaders to assure airlines there was pent
up demand for new routes. It eventually paid off when All Nippon Airways launched a direct
flight to Japan in 2013 on the new 787 Dreamliner. A wave of other flights quickly followed.
“If a couple carriers go to a new airport, others do follow,” said Carl Guardino, chief executive
of the Silicon Valley Leadership Group, which represents major technology companies. “But it’s
really hard to get the first ones to make that bet. We tell that airline that if they come here, we’ll
do everything we can to make them successful.”
In five years San Jose went from 29 domestic and two international destinations in 2012 to 43
domestic and 11 international destinations in 2017.
“The rate of growth has been tremendous,” said Marc Casto, president of Casto Travel in San
Jose, one of the largest travel management companies in the Bay Area. “It’s one of the fastest
growing airports in passenger growth around the nation.”
The growth has been so rapid that San Jose added two gates, bringing the total to 30, and is
planning an expansion of up to 10 more.
“We’ve experienced tremendous passenger growth and it’s been a great thing,” said San Jose
Airport Director John Aitken. “But with that growth comes some deficiencies in our facilities
we’ll have to deal with pretty soon.”
Oakland airport officials bored into travel data and found a huge proportion of international
travelers flying out of San Francisco lived in the East Bay or Wine Country, and pursued a
strategy to tap that market.
“You can go over to another airport and be the fourth airline going to a European market, or go
to Oakland and be the only one,” said John Albrecht, Oakland International’s manager of
aviation marketing.
It paid off. Oakland has gone from 29 domestic and three international destinations in 2012 to 48
domestic and 14 international destinations today. International traffic surged 134 percent in the
past year, and the airport just completed a $45 million renovation and expansion that doubled its
international arrival operations capacity.
San Francisco meanwhile continues to set new records in passenger traffic.
Some airports have seen double-digit growth,” said SFO spokesman Doug Yakel, noting the
bounce-back at the Bay Area’s smaller airports. “Our growth has been steady for a number of
years.”
McGinnis said the turnabout at the smaller airports has been stunning.
“Multiple flights to Asia from San Jose is something I never thought I’d see,” McGinnis said.
“And I never thought I’d see Oakland be the first airport (in the Bay Area) to get a nonstop to
Rome. They beat San Francisco to that, that’s a big deal.”
Guardino said businesses don’t see the airports in competition, but that “the goal is to balance
out three great airports so that the whole region is successful.”
At the moment, that seems to be working, for both business and leisure travelers. Albrecht said
that with so many oversees flights pushing prices down, Bay Area travelers are making weekend
getaways to Europe.
“You wouldn’t do it if air fare was $2,000, but now that it’s $500 round trip, it’s suddenly on the
list of things to do,” Albrecht said. “That used to be ‘Lifestyles of the Rich and Famous.'”
City of Palo Alto (ID # 8891)
Policy and Services Committee Staff Report
Report Type: Action Items Meeting Date: 2/13/2018
City of Palo Alto Page 1
Summary Title: Status Update of Audit for Disability and Workers
Compensation Rates
Title: Staff Recommendation That the Policy and Services Committee
Recommend the City Council Accept the Status Update of the 2016 Disability
and Workers Compensation Rates Audit
From: City Manager
Lead Department: Human Resources
Recommendation
Staff recommends the Policy and Services Committee recommend that the City Council accept
the attached Status of Audit Recommendations for the 2016 Disability Rates and Workers’
Compensation Audit.
Background
The City Auditor’s Office previously issued an audit with objectives to assess the effectiveness
of activities to manage and minimize disability retirements and workers’ compensation claims.
Review of processes to ensure employee safety, tracking and reporting activities, contract
administration, and efficiency of claim processing.
Since the 2016 Audit, new procedures and processes to improve claim monitoring, timely claim
reporting, and recordkeeping have been implemented and documented. Training for
supervisors has also been provided. The Administrative Services Department (ASD) SAP
Functional team assisted by configuring a payroll code for tracking medical appointments for
injured employees, followed by testing by Payroll and HR staff. The Human Resources (HR)
Department has completed 7 of the 15 recommendations. The recommendations and actions
taken for completion are listed in the attached document (Attachment A).
The attached report also provides an update of the status of the eight open recommendations.
HR is in the process of implementing employee safety training to minimize strain injuries as well
as working with third-party administrator (York Risk Services) to improve performance metrics.
City of Palo Alto Page 2
In addition, HR team will be working with ASD SAP Functional and Payroll teams to test and
implement updated CalPERS report which includes correcting temporary disability pay coding.
Staff expects to have all completed by June 2018.
Attachments:
Disability Work Comp Audit January 2018
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 1
The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report
progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been
implemented.
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
Finding 1: The City’s Injury and Illness Prevention Program (IIPP) is comprehensive but has lost its effectiveness due to the loss of its City Safety Officer.
1.1. The City Manager allocate
sufficient resources to implement
and maintain the City’s IIPP and to
monitor the City’s compliance
with the program.
Human
Resources
Concurrence: Agree
Target Date: December 1, 2016
Action Plan: The Human Resources
Department requested a new dedicated
position (1 FTE) in FY17 Budget. As soon as
the position is approved and can be filled
this position will review and update the
City’s IIPP to ensure effective program
compliance.
Completed July 2016 Management Update:
Council approved additional position in HR for
FY17. Senior HR Administrator assigned is
currently focused on training, administering daily
claim activities to maintain the Workers’
Compensation program while at same time
focusing on updating policies and procedures and
training on City’s IIPP.
1.2. HR update the safety manual,
including supplemental tools and
guidance posted on the intranet,
to ensure:
• The roles and responsibilities
over the IIPP are redefined.
• The City’s IIPP complies with all
Cal/OSHA standards and other
applicable safety laws.
Human
Resources
Concurrence: Agree
Target Date: March 2017
Action Plan: Once appropriate staff
resources are in place, the roles and
responsibilities can be reestablished to
ensure the safety manual (IIPP) is reviewed
and updated as necessary.
While a few safe work practices have been
updated, such as the Heat Stress Prevention
Guidelines in July 2014, a thorough review
will be conducted and any necessary
updates will be completed.
In Progress January 2018 Management Update:
Updates have been posted to HR Risk
Management and Safety website, specifically
targeting Ergonomic awareness. Review of all
other safe work practices will continue.
Expected Completion Date: June 2018
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 2
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
1.3. HR review departmental
procedures and safety
requirements to ensure they align
with the revised IIPP and City
policy and procedures.
Human
Resources
Concurrence: Agree
Target Date: December 15, 2016
Action Plan: HR is in process of securing a
safety specialist to conduct periodic
inspections of City facilities for hazard
assessment. This comprehensive evaluation
will include determining if any corrections
need to be completed, including updating or
implementing work procedures.
In Progress January 2018 Management Update:
Currently, the following components of an
effective IIPP are ongoing:
Accident Investigation: supervisors investigate all
accidents, injuries and near-misses and make
appropriate changes to minimize recurrence.
Hazard Correction:
Supervisors correct conditions that are discovered
during their monthly inspections or after an injury
or accident to prevent reoccurrence.
Training:
Supervisors are responsible for ensuring their
employees are trained to perform work safely.
Documentation:
Safety training sign-in sheets and investigation
reports are maintained.
Communication:
Employees know how to inform management
about health and safety matters.
Expected Completion Date: June 2018
1.4. HR work with York and
departments to identify useful
safety statistics, appropriate HR
and departmental recipients of
this information, and reporting
frequency, and establish an
automated process for those
statistics to be provided.
Human
Resources
Concurrence: Agree
Target Date: December 16 , 2016
Action Plan: HR will work with York to
identify useful reports that identify injury
and illness trends and implement an
automated process for those reports to be
emailed to department representatives.
Completed January 2018 Management Update:
HR is working with York to finalize two reports for
distribution to departments, one graph showing
claim frequency to be distributed quarterly and a
comprehensive report to be distributed on a
monthly basis showing trend information: injury
description, job classification, body part, and cost
detail.
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 3
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
1.5. HR identify industry-specific
ergonomics and general wellness
training opportunities to minimize
common injuries, and coordinate
with departments to ensure
regular training is provided to
employees.
Human
Resources
Concurrence: Agree
Target Date: September 16, 2016
Action Plan: HR will coordinate industry-
specific ergonomic training, similar to
training provided to Parks maintenance
employees in 2010 and Library employees in
2014. We agree industry-specific ergonomic
training serves as a reminder for example,
that the best way to prevent back injuries is
to develop habits that reduce the strain
placed on the back.
In Progress January 2018 Management Update:
Have identified trainer and in process of
establishing contract and training dates. Using
claim data for previous 5 years, have identified top
5 body parts injured with objective to train
employees with highest exposure and focus on
injury prevention.
Expected Completion Date: May 2018
Finding 2: Injured employees’ benefit eligibility is not accurately and completely tracked and monitored, resulting in both overpayments and underpayments of
workers’ compensation benefits.
2.1. HR continue working with ASD and
CalPERS to address the disability
leave benefits that were
incorrectly reported as
compensation to CalPERS.
Human
Resources
Concurrence: Agree
Target Date: February 2017
Action Plan: HR worked with Payroll to
identify wage codes and required
corrections needed to fix CalPERS payroll
report.
In Progress January 2018 Management Update:
SAP Functional has configured new disability
coding to make correction to CalPERS report. Next
steps include testing by Payroll and HR to move
forward with correction which have been delayed
due to other priority projects.
Expected Completion Date: June 2018
2.2. HR review the 22 claims that
accounted for 87 percent of the
total additional city benefits
difference in Exhibit 11, and take
necessary action to address any
errors identified.
Human
Resources
Concurrence: Agree
Target Date: July 2016
Action Plan: HR working on timecard
amendments to address errors with 2 Public
Safety officers whose claims were initially
delayed when claims first submitted and
final determination resulted in denial and
non-acceptance.
In Progress January 2018 Management Update:
HR reviewed 22 claims and action on errors where
possible still under review.
Expected Completion Date: May 2018
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 4
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
2.3. HR review the existing disability
leave management process in
Exhibit 12 and determine the
optimal monitoring structure,
update the tools and procedures,
and allocate sufficient and skilled
resources to ensure:
a. Benefit eligibility and work
status of injured employees is
accurately, completely, and
timely tracked including:
• Start date of disability
• Date released back to work
by the treating physician
• Date returned to modified
duty, including the
assignment and payroll
code used
• Date returned to full duty
b. Any changes in work status are
communicated to York
c. Disability leave time buckets
are updated as soon as HR is
notified of the status change.
d. Benefit notices and vouchers
issued by York are consistent
with the timecards and actual
benefits paid through payroll.
e. Employees comply with the
City policy requiring timely
submission of work status
notes.
Human
Resources
Concurrence: Agree
Target Date: December 16, 2016
Action Plan:
a. HR is exploring better methods to
track temporary disability and
return-to-work status accurately,
completely and timely.
b. HR will also improve process of
maintaining timely communication
with York.
c. HR staff will explore how to
improve management of disability
leave buckets in SAP.
d. HR will explore how to audit
benefit notices and vouchers issued
by York to ensure they are
consistent with timecards. This
would be a manual process that
may not be able to be supported.
e. HR will work with supervisors to
ensure employees comply with City
policy requiring timely submission
of work status notes.
f. HR will explore options for
improved disability leave
management and tracking as part
of the SAP replacement RFP
process.
In Progress January 2018 Management Update:
80% complete
a. In progress- York is able to track return-
to-work in claim file in “notes,” which
does not provide ability to run report. HR
still exploring improved tracking
methodology.
b. Completed- The workers’ compensation
desktop procedures have been reviewed
and revised to include the most effective
monitoring process based on the tools,
systems and resources currently
available.
c. Completed- Central email box was
created to receive work status notes.
Monitoring now in place morning and
afternoon as well as establishing timely
responses. Work procedures have been
established to ensure the monitoring and
management of the box, including
process in place with support staff to
track and monitor start and end dates of
disability leave buckets.
d. In progress- HR explored how to audit
benefit notices and vouchers issued by
York and determined that comparison is
not possible due to difference in TD
payments. HR will review with York to
determine if they can track the salary
continuation TD code 7200 as well as the
difference between what the City pays
highly compensated injured employees
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 5
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
and state requirements.
e. Completed-
1. Procedure document was updated
and posted on City website in 2016.
Roles of WC staff members, third
party administrator, injured
employee’s and their supervisors has
been streamlined and documented in
detail.
2. Training was completed in June 2016;
74% of supervisors/managers
attended. Created training video
which is posted on the HR Workers’
Compensation intranet site and
PowerPoint slides for future
reference for supervisors.
Expected Completion Date: March 2018
2.4. HR work with ASD to ensure that
the data necessary for disability
leave management is captured
through time reporting in SAP to
support the process, including:
a. Revising the City’s payroll
procedures, Policies and
Procedures 2-06/ASD, to
provide clear instruction for
reporting disability leave on
Human
Resources /
Administrative
Services
Concurrence: Agree
Target Date: February 2017
Action Plan:
a. HR following up with ASD Payroll on
feasibility to revise City payroll
procedures; otherwise, will include
steps in City’s Workers Compensation
policy.
b. ASD and HR have determined how to
In Progress January 2018 Management Update:
50% complete
a. Completed- HR has drafted Timecard
Disability and Modified Duty Coding
guideline which will be attached to City’s
Workers Compensation policy
b.
1. In Progress- SAP Functional has
configured new disability coding to make
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 6
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
SAP timecards.
b. Configuring the SAP system to:
• Track compensation
reportable to CalPERS
separately.
• Track medical
appointments that qualify
as disability leave by
creating a separate payroll
code.
• If feasible and cost-
effective, limit the number
of days each employee can
code disability leave or
modified duty on their
timecard based on their
position.
code public safety temporary disability
as “PERSable” and non-public safety
temporary disability as “non-PERSable”
by using different SAP codes.
- A separate timecard code (7600) is
being developed to track medical
appointments.
- Limiting the number of hours each
employee can code disability leave
can be accomplished when disability
leave bucket is established; may not
be feasible for modified duty and
requires further review.
correction to CalPERS report.Next steps
include testing by Payroll and HR to move
forward with correction which has been
delayed due to other priority projects.
2. Completed- New SAP payroll code has
been created by ASD and tested by HR to
track medical appointments separately
from disability leave. An email
communication was distributed to city
staff on use of new code.
3. Not started- HR discussed new process
with SAP Functional to develop new SAP
coding system for workers compensation
tracking. At this time, determined not
feasible in SAP. Instead, HR will review
new HR ERP solution to look for improved
coding process
Expected Completion Date: June 2018
2.5. HR work with York to identify and
train responsible HR staff, and
maintain online access to York
data for analyzing claims, payment
transactions, and trends. Establish
and maintain written procedures
for granting, monitoring, and
removing access to the York data
and appropriate handling and
safeguarding of the data.
Human
Resources
Concurrence: Agree
Target Date: December 2016
Action Plan: Training will be provided to HR
staff newly assigned to oversee workers
compensation.
Completed October 2017 Management Update:
On September 14, 2017 HR Sr Administrator and
Asst HR Director received online “FOCUS” training
on how to run claim data and trend reports. HR
has established desktop written procedure for
granting, monitoring and removing access to York
data; HR will forward an annual memo to York
identifying employees with approval to maintain
access and those who should be removed in order
to safeguard data.
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 7
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
Finding 3: The City has not met the state requirement for timely reporting of its workers’ compensation claims to York, potentially causing the cost of claims to
increase.
3.1. HR streamline the workers’
compensation reporting process
and improve the accuracy and
completeness of the claim forms
by:
• Revising the procedures to
clarify the roles and
responsibilities. This should
include determining whether
departments should be
responsible for completing
only the Employee Claim Forms
(DWC-1) and Supervisor’s
Report of Injury and Exposure
(City form), with HR staff being
responsible for completing the
Form 5020.
• Revising the City form for
supervisors to complete with
necessary information that can
be easily copied and pasted to
the Form 5020.
• Ensuring the use of York’s
online claims reporting to
submit the Form 5020, and
having appropriate and trained
staff enter any sensitive
personnel or payroll
information.
• Making the required forms and
Human
Resources
Concurrence: Partially Agree
Target Date: February 2017
Action Plan: HR agrees the reporting
process needs to be improved and
streamlined. HR will determine if using
York’s online claim reporting to submit the
Form 5020 is most efficient process. As an
alternative, HR will evaluate ability to create
DocuSign Form 5020 which Department
would initiate, completing facts related to
employee filing claim and details regarding
injury or illness. DocuSign Form 5020 could
then be submitted by departments to HR
staff who would complete salary data. HR
staff could then submit DocuSign form to
York.
Completed October 2017 Management Update:
Procedure document has been updated to clarify
roles and responsibilities on how to file claim and
follow up steps.
HR held training session for managers, supervisors
and department liaisons responsible for
completing claim forms to be familiarized with
online claims reporting website and given
overview for workers compensation benefits. 74%
of all managers and supervisor have completed
Workers Comp 101 training as well as learning
how to access York website and 5020 entry.
Sr HR Administrator will periodically review York
Scorecard data, “new claims > 5 days from date of
injury” to ensure timely reporting of workers’
compensation claims.
Forms and instructions on how to file a claim are
all available on HR Workers’ Compensation
intranet site.
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 8
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
procedures available online in
one place with clear
instructions and adding
electronic signature capability,
if feasible and cost-effective.
• Regularly reviewing the forms,
procedures, and performance
to ensure their compliance
with state law.
Finding 4: The City has not ensured that York met all contract terms.
4.1 HR create a list of key contract
terms and assign staff to monitor
and follow up on York
performance against each term,
including recovery of $5,000 from
York for not meeting the
indemnity claim closure ratio for
FY 2013.
Human
Resources
Concurrence: Agree
Target Date: July 29, 2016
Action Plan: HR will create a list of key
contract terms that require follow-up. New
HR staff assigned to administer workers
compensation program will monitor and
follow up with York regularly on contract
terms.
Completed January 2018 Management Update:
$5000. Recovered. Key contract term sheet based
on new contract with York created, to be
reviewed at end of each term.
4.2. HR work with York to streamline
the monthly, quarterly, and
annual reporting process by
leveraging online access to York
data (see recommendations 1.3
and 2.5).
Human
Resources
Concurrence: Partially Agree
Target Date: August 30, 2016
Action Plan: The York data is readily
available, currently 8 reports are provided
to HR monthly. However the contract calls
out for reports that are no longer in use.
This can be cleaned up in next contract RFP
and in any future contracts. HR will review
reporting capabilities to determine how to
improve use of data.
Completed October 2017 Management Update:
During claim system training in September 2017,
HR reviewed reporting capabilities to determine
how to improve use of data. Worked with York to
complete report automation and readily accessible
on Claim system dashboard.
STATUS OF AUDIT RECOMMENDATIONS
DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16
PAGE 9
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
Finding 5: Workers’ compensation revenues, costs, and performance data are not clearly reported for informed decision making.
5.1. HR work with ASD’s Office of
Management and Budget to clarify
the presentation of the workers’
compensation costs in the City’s
budget documents.
Human
Resources/
Administrative
Services
Concurrence: Agree
Target Date: December 16, 2016
Action Plan: HR staff will meet with Budget
Manager to clarify presentation for workers
compensation costs for FY18 Budget and
determine changes or improvements.
Completed April 2017 Management Update:
Completed- HR worked with OMB Director and
Analyst to create inlay document in FY 18
Proposed Budget, page 298, showing workers
comp costs not previously identified clearly.
5.2. HR work with York to identify
useful performance measures and
establish procedures to ensure
reliable reporting of performance
data using a consistent
methodology.
Human
Resources
Concurrence: Partially Agree
Target Date: January 2017
Action Plan: HR will explore best practice
performance measures and establish
procedure to ensure reliable reporting.
In Progress January 2018 Management Update:
HR has worked with York to identify useful
performance measures available on York
Scorecard. HR participating in webinar to explore
workers compensation best practice metrics.
Expected Completion Date: March 2018
CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
February 13, 2018
The Honorable City Council
Palo Alto, California
Triennial External Quality Control Review of the Office of the City
Auditor
BACKGROUND
The Office of the City Auditor follows Government Auditing Standards, established by
the Comptroller General of the United States. The standards provide a framework for
conducting high quality audits with competence, integrity, objectivity, and
independence. The Government Auditing Standards are mandated for use by federal
audit agencies, but because they are written by government and for government, the
standards are often adopted for use by state and local government audit offices. The
Palo Alto Municipal Code requires the Office of the City Auditor to use the Government
Auditing Standards. By using those standards, we are required to establish and maintain
a system of internal quality control (i.e., policies and procedures) to ensure that our
audits comply with the standards and to have an external quality control review, also
known as a “peer review,” at least once every three years to assess our compliance with
the standards. The attached letter and report contain the results of our most recent
peer review.
In November 2017, government audit professionals from the City and County of Denver,
Colorado, and the City of Raleigh, North Carolina, came to our office to conduct our peer
review. The peer review was coordinated through the Association of Local Government
Auditors. Their review included reviewing our written policies and procedures, our
internal monitoring procedures, the work we did to complete a sample of audit and
nonaudit service engagements, and our compliance with continuing professional
education requirements. The team found that our office fully complied with the
Government Auditing Standards for the period April 15, 2014, through June 30, 2017.
RECOMMENDATION
The Office of the City Auditor recommends that the Policy and Services Committee
review and recommend to the City Council acceptance of the Triennial External Quality
Control Review of the Office of the City Auditor.
Respectfully Submitted,
Page 2
Harriet Richardson, City Auditor
ATTACHMENTS:
Attachment A - External Quality Control Review (PDF)
Department Head: Harriet Richardson, City Auditor
Page 3
Attachment A
Attachment A
Attachment A
Attachment A
November 9, 2017
Ms. Sonia Montano Mr. D. Lamar Norwood
Audit Supervisor Senior Internal Auditor
Office of the Auditor City of Raleigh, NC
City & County of Denver, CO
Dear Ms. Montano and Mr. Norwood,
Thank you for conducting the external quality control review of the City of Palo Alto’s Office of the City
Auditor, which the Government Auditing Standards require to be conducted every three years. We are
pleased with your opinion that the Office of the City Auditor’s internal quality control system was
suitably designed and operating effectively to provide reasonable assurance of compliance with the
Government Auditing Standards during the period April 15, 2014, through June 30, 2017.
We appreciate your thorough review, your comments about the areas in which our office excels, and
your suggestion to further enhance our operations. We are committed to continuously improving and
refining our audit processes and, as you noted, have already updated our Audit Policies and Procedures
Manual, as well as the Assessment of Audit Evidence section of our Preliminary Findings and
Recommendations template, to require audit staff to specifically document in their workpapers their
evaluation of the objectivity, credibility, and reliability of testimonial evidence when they are relying on
that evidence to support their audit findings and conclusions.
We would like to express our appreciation and thanks to the peer review team and the Association of
Local Government Auditors for their work and commitment to ensuring that government auditors,
through the peer review process, adhere to Government Auditing Standards. I will share your report
with the City Council and make it available to the public on our website.
Respectfully,
Harriet Richardson, CPA, CIA, CGAP, CRMA
City Auditor
Attachment A
CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
February 13, 2018
The Honorable City Council
Palo Alto, California
Auditor's Office Quarterly Report as of December 31, 2017
RECOMMENDATION
The City Auditor’s Office recommends the Policy and Services Committee review and
recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of
December 31, 2017.
SUMMARY OF RESULTS
In accordance with the Municipal Code, the City Auditor prepares an annual work plan and
issues quarterly reports to the City Council describing the status and progress towards
completion of the work plan. This report provides the City Council with an update on the
second quarter for FY 2018.
Respectfully submitted,
Harriet Richardson
City Auditor
ATTACHMENTS:
Attachment A - Auditor's Office Quarterly Report as of December 31, 2017 (PDF)
Attachment B - Advice and Fraud Waste and Abuse Hotline Information (PDF)
Department Head: Harriet Richardson, City Auditor
Page 2
Attachment A
Quarterly Report as of December 31, 2017
Office of the City Auditor
“Promoting honest, efficient, effective, economical, and fully
accountable and transparent city government.”
Attachment A
PAGE 2
Fiscal Year (FY) 2018 Second Quarter Update (October – December 2017)
Overview
The audit function is essential to the City of Palo Alto’s public accountability. The mission of the Office of the City Auditor,
as mandated by the City Charter and Municipal Code, is to promote honest, efficient, effective, economical, and fully
accountable and transparent city government. We conduct performance audits and reviews to provide the City Council
and City management with information and evaluations regarding how effectively and efficiently resources are used; the
adequacy of internal control systems; and compliance with policies, procedures, and regulatory requirements. Taking
appropriate action on our audit recommendations helps the City reduce risks and protect its good reputation.
Activity Highlights
Coordinated with the external financial auditor to release and present the City’s financial statement audits.
Coordinated with the Department of Human Resources to develop a flyer and business card to begin advertising
the Fraud, Waste, and Abuse Hotline and the Employee Advice Line, and the difference between them (copies
attached).
Received our triennial external peer review with a fully pass rating.
Audit and Project Work
Below is a summary of our audit and project work for the second quarter of FY 2018:
Title Objective(s) Start
Date
End
Date
Status Results/Comments
Enterprise
resource
planning (ERP)
Planning Audit:
Data and System
Governance and
Security
Evaluate the adequacy of data and
system governance and security in the
current SAP system and make
recommendations to ensure that
identified deficiencies are corrected for
the new ERP system.
05/17 04/18 In Process The audit is in the report
writing phase, and we expect
to complete the audit in
early 2018.
ERP Planning
Audit: Data
Reliability and
Integrity
Evaluate the integrity and reliability of
data in the current SAP system and
make recommendations to ensure that
identified deficiencies are corrected
prior to transferring data to the new
ERP system.
05/17 06/18 In Process This will be a series of
reports that focus on
different aspects of data
reliability or specific data
sets. Our first two audits will
be on data standardization
and a specific data set. These
audits are currently in the
field work phase, and we
expect to complete them in
early 2018, with more audits
to follow.
ERP Planning
Audit:
Separation of
Duties
Evaluate the adequacy of separation of
duties for various activities in the
current SAP system and make
recommendations to ensure that
identified deficiencies are corrected for
the new ERP system.
05/17 06/18 In Process The audit is in the field work
phase, and we expect to
complete it early 2018.
Attachment A
PAGE 3
Title Objective(s) Start
Date
End
Date
Status Results/Comments
Code
Enforcement
Audit
Evaluate code enforcement policies
and practices for responsiveness,
consistency, and follow‐up. Resident
opinions to help inform our audit will
be gathered through a custom citizen
survey, as described below.
05/17 06/18 In Process The audit is in the field work
phase. We expect to
complete the audit in early
2018.
ERP Nonaudit
Service
Provide advisory services to the
Department of Information Technology
regarding its planning of a new ERP
system.
09/16 Ongoing We attended 17 strategic
and tactical team meetings
during the second quarter of
FY 2018 and provided verbal
and written advice based on
our technical expertise and
best practice information
readily available to us. We
met with IT staff biweekly to
discuss specific issues
requiring immediate
attention. We also issued a
memo to the IT Director that
summarizes our advice and
enhancement opportunities.
Custom Citizen
Survey
Conduct a citizen survey, separate from
the annual National Citizen Survey™, to
obtain resident opinions about code
enforcement activities and the built
environment.
06/17 01/18 In process The National Research
Center mailed the survey to
3,000 residents. We have
received the raw data from
the National Research Center
and are currently compiling it
into a report and analyzing
the results.
National Citizen
Survey™
Obtain resident opinions about the
community and services provided by
the City of Palo Alto and benchmark
our results against other jurisdictions.
06/17 01/18 In process The National Research
Center has mailed the survey
to 3,000 residents and is
currently in the data
collection phase. We expect
to receive the results in mid‐
December and to analyze
them by early January.
Annual
Performance
Report
Provides citywide information for key
areas, including spending, staffing,
workload, and performance
08/17 01/18 In process Departments provided data,
which we are compiling into
the annual report. We will
present the report to the
Council at its annual retreat
on February 3, 2018.
Citizen Centric
Report
Provides City and community
information, performance results, and
summary revenue and expenditure
data in an easy‐to‐ready four‐page
format.
12/17 01/18 In process Staff collected data and are
compiling it into the report,
which will be presented at
the annual Council retreat.
Attachment A
PAGE 4
Other Monitoring and Administrative Assignments
Below is a summary of other assignments as of December 31, 2017:
Title Objective(s) Status Results/Comments
City Auditor
Advisory Roles
Provide guidance and advice to
key governance committees
within the City.
Ongoing The City Auditor serves as an advisor to the Utilities Risk
Oversight Committee and Information Security Steering
Committee. We are also serving as an advisor for the
strategic and technical planning groups for planning the
new ERP system (see comment in the Audit and Project
Work section above).
Sales and Use
Tax Allocation
Reviews
1) Identify businesses that do
business in Palo Alto that may
have underreported or misallo‐
cated their sales and use tax and
submit inquiries to the state for
review and tax reallocation.
2) Monitor sales taxes received
from the Stanford University
Medical Center Project and
notify Stanford of any differences
between their reported taxes
and state sales tax information,
in accordance with the
development agreement.
3) Provide Quarterly Status
Updates and Sales Tax Digest
Summaries for Council review.
Ongoing 1) Total sales and use tax recoveries for the second
quarter of FY 2018 were $232,280 from our inquiries and
$21,135 from the vendor’s inquiries, for a total of
$253,415 for the quarter and $271,528 fiscal year‐to‐date.
Due to processing delays at the State Board of
Equalization, 34 potential misallocations are waiting to be
researched and processed: 11 from our office and 23 from
the vendor.
2) We receive calendar‐year sales tax information for the
Stanford Medicine development project about six months
after the end of the calendar year. We will report the
2017 sales tax information for this project in our June
2018 quarterly report. The City has received $2,896,941
for calendar years 2011 through 2016 as a result of this
agreement.
3) Quarterly sales tax reports are published on the Office
of the City Auditor website at
www.cityofpaloalto.org/gov/depts/aud/reports/default.asp.
Status of Audit Recommendations
Sixty recommendations were open at the beginning of the second quarter of FY 2018, and none were closed. One status
report was past due as of December 31, 2017, but is scheduled to be presented to the Policy and Services Committee in
February 2018. Four status reports that were past due at the end of the first quarter of FY 2018 were presented in the
second quarter of FY 2018. Below is a summary of the open audit recommendations as of September 30, 2017:
Audit Title and
Report Date
Due Date
and Prior
Status
Report Dates
Total
Recommendations/
Number Open Summary of Open Recommendations
Citywide Cash
Handling and Travel
Expense
Issued 09/15/10
Due – 02/18
08/22/17
11/10/15
09/23/14
09/10/13
10/22/12
04/19/11
Recommendations:
11
Open: 1
Implemented during
quarter: 0
Review practice of reimbursing employee meals when
not in a travel status and report the amounts as income
to employees to conform to Internal Revenue Service
requirements.
Attachment A
PAGE 5
Audit Title and
Report Date
Due Date
and Prior
Status
Report Dates
Total
Recommendations/
Number Open Summary of Open Recommendations
Inventory
Management
Issued 02/18/14
Due – 05/18
11/02/17
09/23/14
Recommendations:
14
Open: 4
Implement City’s inventory management policies and
procedures
Update and enforce inventory count policies and
procedures to ensure consistent and accurate
inventory records
Identify, formalize, and communicate inventory
management goals and objectives to City departments
Ensure staff identify and use key SAP inventory
management reports and appropriately configure and
update SAP parameters that affect inventory levels
Utility Meters:
Procurement,
Inventory, and
Retirement
Issued 03/10/15
Due – 05/18
11/02/17
Recommendations:
15
Open: 1
Correct purchase order documents to accurately reflect
engineering specifications
NOTE: Two recommendations are closed because they
are deemed to be no longer relevant.
Parking Funds
Issued 12/15/15
Due – 05/18
11/02/17
Recommendations: 8
Open: 3
Implemented during
quarter: 0
Develop policies and procedures to clarify roles and
responsibilities and ensure accurate calculation and
reporting of parking‐in‐lieu fees
Establish policies and procedures to clarify roles and
responsibilities for parking programs and parking
permit funds
Identify financial and performance data required for
effective evaluation of parking program
Disability Rates and
Workers’
Compensation
Issued 05/10/16
Past Due –
Scheduled for
2/13/18
None
Recommendations:
15
Open: 15
Implemented during
quarter: 0
Allocate sufficient resources to implement and
maintain and monitor compliance with the City’s Injury
and Illness Prevention Program
Update the safety manual/supplemental tools
Review departmental procedures and safety
requirements to ensure they align with citywide
policies and procedures
Identify useful safety statistics, their recipients, and
reporting frequency, and develop an automated
process for providing the statistics
Identify and provide industry‐specific ergonomics and
general wellness training opportunities
Address the disability leave benefits incorrectly
reported as compensation to CalPERS
Review claims that had differences in additional city
benefits and correct any errors identified
Determine optimal structure, update tools and
procedures, and allocate sufficient and skilled
resources to ensure accuracy of benefit eligibility and
work status of injured employees
Ensure that data for managing disability leave is
accurately captured through SAP time reporting
Attachment A
PAGE 6
Audit Title and
Report Date
Due Date
and Prior
Status
Report Dates
Total
Recommendations/
Number Open Summary of Open Recommendations
Provide online access to claims data and establish
procedures for granting, monitoring, and removing
access and safeguarding data
Streamline workers’ compensation reporting process
and improve accuracy/completeness of claim forms
Monitor and follow‐up on third‐party administrator’s
performance against key contract terms
Streamline third‐party administrator’s reporting
processes
Clarify workers’ compensation in City budget
Identify useful performance measures and establish
procedures to ensure reliable reporting
Cable Franchise and
Public, Education,
and Government
(PEG) Fees
Issued 06/14/16
Due – 02/18
08/22/17
Recommendations: 9
Open: 7
Implemented during
quarter: 0
Assess ongoing need for PEG fees; place fees in
restricted account until decisions are made about use
of fees
Determine whether to allocate unrestricted funds,
instead of PEG fees, to subsidize the Media Center’s
operations.
Send letters to cable companies to demand payment of
underpaid franchise and PEG fees
Work with cable companies to ensure accuracy of
address databases and assign separate billing codes for
each Cable Joint Powers service area
Develop criteria for assessing the accuracy of future
cable franchise and PEG fee payments and require
more detail with payment remittances
Assign responsibility for the cable communications
program and provide effective oversight of the
program
Draft an ordinance to update the Palo Alto Municipal
Code based on clarified assignment of responsibility
Community
Services
Department (CSD):
Fee Schedule Audit
Issued 02/14/17
Due – 05/18
11/14/17
Recommendations: 3
Open: 3
Implemented during
quarter: 0
Revise City’s cost recovery policy to align with relevant
laws and reconfigure the Questica budget system to
support fees that recover more than 100 percent of
costs
Establish procedures in CSD to align with the City’s
updated cost recovery policy
Configure SAP or the new ERP system to align cost
centers with CSD programs
Attachment A
PAGE 7
Audit Title and
Report Date
Due Date
and Prior
Status
Report Dates
Total
Recommendations/
Number Open Summary of Open Recommendations
Continuous
Monitoring:
Payments
Issued 04/13/17
Due – 02/18
None
Recommendations: 7
Open: 7
Implemented during
quarter: 0
Build a continuous monitoring process into the new
ERP system to identify potential duplicate invoices and
seek recovery of duplicate payments
Update invoice processing policies and procedures to
facilitate identification of duplicate payments
Review unconfirmed potential duplicate payments and
prioritize recovery of confirmed duplicate payments
Update policies and procedures to clarify guidance for
creation of vendor master records and develop
standardized coding vendor records
Build a continuous monitoring process into the new
ERP system to identify duplicate, incomplete, or
unused vendor records
Develop a requirement for the proposed ERP system to
support entry of multiple vendor addresses when
needed
Clean vendor master file before merging data into new
ERP system
Green Purchasing
Practices
Issued 04/13/17
Due – 02/18
None
Recommendations: 8
Open: 8
Implemented during
quarter: 0
Clearly define department(s) responsible for
implementing green purchasing policies and determine
if additional staffing and funding are needed to
implement the policies
Align Municipal Code with green purchasing policies
Develop consolidated procedures to implement green
purchasing policies
Educate City staff on green purchasing policies
Evaluate quality of 40 percent postconsumer fiber
paper towels, monitor janitorial contractor’s use of
cleaning and paper products, and evaluate feasibility of
including additional green products in janitorial
contract
Evaluate if new e‐procurement system or other
technology solution can help with tracking and
reporting green purchases and establish appropriate
green purchasing performance measures
Require vendors to provide data on amounts of green
products and services that City purchases from them
Develop and implement a process to formally
document the assessment of battery‐electric and plug‐
in hybrid vehicles
Attachment A
PAGE 8
Audit Title and
Report Date
Due Date
and Prior
Status
Report Dates
Total
Recommendations/
Number Open Summary of Open Recommendations
Utilities
Department: Cross
Bore Inspection
Contract
Issued 06/01/17
Due – 02/18
None
Recommendations: 4
Open: 4
Implemented during
quarter: 0
Prioritize uninspected sewer pipelines for inspection
and disclose potential inspection challenges in future
contract solicitations
Identify and update missing data in laterals database
Incorporate relevant provisions from National
Association of Sewer Service Companies’ contract
template in future sewer inspection contracts
Identify gaps in staff expertise and develop a training
and certification plan for field staff who will monitor
field inspections
Accuracy of Water
Meter Billing
Issued 08/16/17
Due – 05/18
None
Recommendations:
11
Open: 11
Implemented during
quarter: 0
Correct billing errors identified
Investigate 123 other meter records with discrepancies
and correct as necessary
Review and correct meter records for meters larger
than 2 inches
Explore options for addressing equity in meter size
rates
Until new ERP system is implemented, implement a
temporary monitoring or reporting system to identify
and correct discrepancies that may result in billing
errors and ensure new ERP system has controls to
prevent and identify such discrepancies
Develop a policy and procedures to report significant,
systemic infrastructure changes to Council and update
City of Palo Alto Utilities’ (CPAU) Rules and Regulations
as needed
Seek direction from Council before proceeding with
installing additional electronic meters
Determine if installed eMeters should be replaced and
if billing adjustments are required
Continuous
Monitoring:
Overtime
Issued 09/06/17
Due – 05/18
None
Recommendations: 2
Open: 2
Implemented during
quarter: 0
Explore potential of developing a continuous
monitoring process for overtime
Form a work group to design standardized overtime
management processes in the new ERP environment
Attachment A
PAGE 9
Fraud, Waste, and Abuse Hotline Administration
The hotline review committee, composed of the City Auditor, the City Attorney, and the City Manager, or their
designees, meets as needed to review hotline‐related activities. We did not receive or close any hotline complaints
during the second quarter of FY 2018, and no prior complaints remain open. The chart below summarizes the status of
complaints received in each fiscal year since the hotline was implemented.
Source: City of Palo Alto hotline case management system as of December 31, 2017
9
0000
2
4
6
8
10
Q1 Q2 Q3 Q4
Number of Implemented
Recommendations by Quarter
31
18
17
0
20
40
60
80
100
Number of Open Recommendations
FY 18
FY 17
Prior Fiscal
Years
7
3 2
15
9
00
2
4
6
8
10
12
14
16
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Status of Complaints Received by Fiscal Year
Closed Complaints
Open Complaints
Attachment B
Attachment B