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Fiscal Year 2018 Adopted Operating Budget
Fiscal Year 2018 Adopted Operating ...Budget CITY OF PALO ALTO 4 I• CITY OF PALO ALTO CITY OF PALO ALTO Fiscal Year 2018 Adopted Operating Budget City Council Gregory Scharff, Mayor Liz Kniss, Vice Mayor Tom DuBois Eric Filseth Adrian Fine Karen Holman Lydia Kou Greg Tanaka Cory Wolbach James Keene, City Manager Ed Shikada, Assistant City Manager/Utilities General Manager Lalo Perez, Director of Administrative Services/Chief Financial Officer David Ramberg, Assistant Director of Administrative Services Kiely Nose, Budget Director, Office of Management and Budget Eric Filseth, Finance Committee Chair • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 1 City of Palo Alto The government of the City of Palo Alto exists to promote and sustain a superior quality of life in Palo Alto. In partnership with our community, our goal is to deliver cost-effective services in a personal, responsive and innovative manner. Our Values Quality Superior celivery of services Courtesy Providing service with respect and concern Proc Efficiency uctive, effective use of resources Integrity Straight -forward, honest and fair relations Innovation Excellence in creative thought and implementation CITY OF PALO ALTO TABLE OF CONTENTS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 5 CITY OF PALO ALTO TABLE OF CONTENTS Table of Contents n m m 0 Introduction 11 Transmittal Letter 13 Budget Acknowledgments 25 City of Palo Alto Organizational Chart 27 Palo Alto at a Glance 29 The Budget Process and Document 37 Budget Awards 44 Citywide Funds 49 Citywide Funds Overview 51 Citywide Revenue by Category 53 Citywide Expense by Category 55 Citywide Projected Operating Fund Balance 57 Citywide Average Salary 59 Major Capital Projects 63 General Fund 77 General Fund Overview 79 General Fund Reserves 90 General Fund Revenue Descriptions 90 General Fund Revenue by Category 94 General Fund Expenditures by Department 97 General Fund Expenditures by Category 98 Enterprise Funds 101 Enterprise Funds Overview 103 Enterprise Fund Reserves 111 Residential Monthly Utility Cost Information 114 Internal Service Funds 117 Internal Service Funds Overview 119 Internal Service Funds Reserves 122 Special Revenue Funds 125 Special Revenue Funds Overview 127 Debt Service Funds 143 Debt Service Funds Overview 145 City Departments 153 City Attorney 155 City Auditor 165 City Clerk 177 City Council 187 City Manager 191 Administrative Services 203 General Fund 208 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 7 TABLE OF CONTENTS Printing and Mailing Services 216 Community Services 221 Human Service Contracts 241 Development Services 243 Fire 259 Human Resources 273 General Fund 278 General Liabilities Insurance Program 287 Workers' Compensation Fund 292 Information Technology 299 Library 315 Office of Emergency Services 325 Office of Sustainability 335 Planning and Community Environment 345 Police 357 Public Works 373 General Fund .. .378 Airport Fund 390 Refuse Fund 398 Storm Drainage Fund 409 Vehicle Replacement and Maintenance Fund 419 Wastewater Treatment Fund 426 Utilities 435 Electric Fund 443 Fiber Optics Fund 457 Gas Fund 465 Wastewater Collection Fund 478 Water Fund 488 Non -Departmental 503 Employee Information 509 General Benefits Fund Overview 511 Retiree Health Benefit Fund Overview 516 Table of Organization 519 Supplemental Information 537 Financial Policies 539 Budget Adoption Ordinance 543 Appropriations Limit Resolution and Calculation 547 Glossary 551 Americans with Disabilities Act 555 8 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY OF PALO ALTO 10 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INTRODUCTION CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 11 CITY OF PALO ALTO TRANSMITTAL LETTER August 31, 2017 To the Honorable Mayor and City Council 2018 Fiscal Year Adopted Operating Budget Transmittal Dear Mayor and Council Members: In accordance with the City Charter, I am presenting the City of Palo Alto's Fiscal Year 2018 Adopted Operating Budget totaling $672.3 million. This budget reflects a strong local economy that has led to stable revenues which support the wide array of programs and initiatives this organization provides to the residents of Palo Alto. This budget will maintain the high quality of services and facilities the community values, and address the priorities identified by the City Council. In addition, it maintains competitive wages for City employees through approved labor agreements, as part of an overall strategy to attract and retain a well -qualified workforce within the boundaries of fiscal prudency. As a result of our economic vitality, we are experiencing many challenges associated with the appeal of Silicon Valley. These include increased traffic and congestion, expensive housing, more demand for services, and variant views about the nature and pace of change. Over a year ago, staff identified an anticipated gap in available funds in the General Fund during the FY 2017 budget process. Council asked staff to make some short term adjustments to bal- ance the FY 2017 budget, with the goal of making structural adjustments in FY 2018. Staff reconfirmed this in December 2016 with the preliminary near term financial outlook with the Finance Committee. The primary drivers of this gap reflect extenuating circumstances includ- ing the increased costs of track watch guards ($1.7 million), assuming the electricity costs of streetlight and traffic signals ($2.3 million), and anticipated implications associated with current negotiations with Stanford over fire services ($2.0 million). The budget permanently addresses this gap while maintaining the General Fund Budget Stabilization Reserves at the Council approved level of 18.5 percent of expenditures. The structural fixes recommended in this bud- get also position the City to address future needs expected to occur in FY 2019 and beyond. Throughout the budget process this year, I stressed the need to examine the allocation and pri- oritization of existing resources before requesting additional funding with our departments. As a result, there are a minimal number of new positions that are recommended in this budget. City-wide only4.85 full time positions are recommended to be added, and full time positions of 1,059 continue to be below peak levels of 1,076 in FY 2009. Rising pension costs continue to be a concern. In FY 2017, the City's General Fund contributed $2.1 million to an irrevocable IRS Section 115 Pension Trust Fund, equivalent to an additional 10 percent of the City's annual required contribution for pensions in the General Fund. This budget includes an additional $1.4 million from all other funds to match the 10 percent contribution already made by the General Fund. Therefore, in total, $3.4 million will be contributed to the IRS Section 115 Pension Trust Fund. Additional information can be found in the Salaries and Ben- efits Attachment B to this letter. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 13 TRANSMITTAL LETTER City Council Priorities In addition to addressing the City's pension liability, both the operating and capital budgets continue to support the ongoing priorities of the City Council approved January 2017: • Transportation • Infrastructure • Healthy City, Healthy Community ▪ Budget and Finance • Housing Within these priorities, we will need to make key decisions on a number of transportation and infrastructure projects that will have lasting impact on future revenues and expenses, such as parking, Caltrain Grade Separation, and the City's Infrastructure Plan. The Infrastructure Plan is currently funded at $170 million; however, based on updated estimates and the most recent decisions made by the Council, the emergent gap in necessary resources is anticipated to grow to $196 million in capital costs. The FY 2018-2022 Capital Improvement Plan reflects this gap in funding and strategies to address it will need to be developed over the next year. We continue to assess our resources and delivery of services. Ongoing projects such as the evaluation of the animal shelter, the future of Project Safety Net, and adequate funding of the TMA are all examples of this work. This budget contemplates a number of these services and projects recommending incremental steps to achieve the goals set for by the City Council. It reflects the longer -term goals of the City Council and positions the City to be able to address increases in pension costs and new labor agreement negotiations, while highlighting the need to address the future year costs to complete the Infrastructure Plan. Some highlights include: ▪ Comprehensive Parking Strategy: This budget recommends increasing parking permit revenues between 45 percent and 120 percent by increasing the price of parking permits. The additional revenues generated will assist in providing funding for significant investments necessary to develop and implement a comprehensive parking management plan as well as a significant investment in the Transportation Management Association. Funds will be use for the future purchase of a consolidated permit system, paid parking program infrastructure, and future transportation initiatives. In addition, one-time funding is recommended to evaluate the parking ecosystem in the City and develop a path forward for parking and transportation initiatives including a strategic vision and review of the appropriate organizational structure. ▪ Project Safety Net: The City continues to invest in both the Project Safety Net collaborative promoting mental health and means restrictions. This budget includes further investments through the investment in a video monitoring system at various CalTrain crossings while slowly shifting away from the trackwatch monitors. The implementation of the video management system is intended to replace current in person monitoring services while allowing for continuous monitoring of persons and objects down the corridor, along the 14 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TRANSMITTAL LETTER right of way and at intersections. This shift will eventually reduce the current $1.7 million annual cost for in person monitoring services. Rising Pension Costs: As briefly mentioned earlier, I am concerned over the growing liabilities associated with the City's pension and retiree medical costs. Actions in this budget include additional contribution to an irrevocable IRS Section 115 Pension Trust Fund resulting in total contributions of $3.4 million between FY 2017 and FY 2018. In addition, staff will return to the Finance Committee during FY 2018 to discuss and recommend ongoing strategies to ensure the long-term financial health of the organization. Moderate utility rate adjustments reflecting an approximately 2.5% increase in the average monthly residential bill are included in this budget ensuring maintenance and management of services and infrastructure to the community. Funding Challenges The latest FY 2018 General Fund Budget initially reflected a gap of $4.5 million; through this budget, the City has invested in services such as funding for the Infrastructure Reserve and Human Services Resource Allocation Program (HSRAP) and approved structural reductions of $2.9 million in services or reallocation of costs to alternative funding sources such as a reduc- tion in the Fire Department reflecting anticipated changes in service delivery models. Overall, after all revenue and expense adjustments, this budget assumes a $3.4 million draw on the BSR which will balance the FY2018 General Fund Budget. This maintains the BSR at 18.5 percent of General Fund expenditures, at the Council approved target level. The rationale for my recom- mendation drawing one-time on the BSR has to do with the ongoing benefits of the structural reductions and the continued growth of key revenues. After these actions are accounted for the projected FY2019 Estimated Budget will have a surplus of $3.4 million, which allows room for Council and the staff to consider using those excess funds towards pension costs, labor negoti- ations, and the emerging gap in funding for the Infrastructure Plan. We will continue to prioritize operating and capital needs as we move forward to properly sequence the needs to available funding. Additional funding challenges we face are referenced in the General Fund Summary section of this document. Acknowlec gments In a region where change is swift and expectations high, it is important to celebrate our many accomplishments as we move into the future. I would like to thank City Council for your leadership and our Executive Leadership Team and the entire staff for providing outstanding services to our community. Special thanks to Lalo Perez, our Chief Financial Officer, Kiely Nose, Budget Director, and the dedicated Office of Man- agement and Budget team - Jessie Deschamps, Paul Harper, Steve Guagliardo, Alexandra Har- ris, Chris Yi, and Chaitali Paliwal - who have worked countless hours to construct and produce this budget. Additional thanks to Tarun Narayan and the recently retired Joe Saccio. Finally, I must praise staff across all departments who contributed greatly to this budget. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 15 TRANSMITTAL LETTER We are pleased to work with a dedicated Council, a professional City workforce, and a highly engaged community. Respectfully Submitted, James Keene City Manager 16 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TRANSMITTAL LETTER Attachment A: Fiscal Year 2018 Budget Balancing The FY 2018 Adopted budget of $672.3million reflects an increase of 4.8 percent from the FY 2017 Adopted Budget of $641.8 million. The General Fund of $210.4 million is approximately 30 percent of the City's total budget. General Fund expenses increased 8.4 percent from prior year levels of $194.2 million driven significantly by the three embedded cost increases of the Stan- ford Fire Contract, Street Lighting Expense Transfer, and Trackwatch transition. This budget was developed with consideration of the mutli-year implications of its recommendations with both strategic investments along with ongoing reductions recommended within. It strives to avoid service cuts, enhances services in limited areas, continues to invest heavily in the City's infra- structure, and continues to invest in employees and remain a competitive employer. General Func During the FY 2017 budget process, staff identified that the General Fund (GF) was facing a financial gap and committed to addressing this imbalance during the FY 2018 budget process. Short term adjustments to balance the FY 2017 budget were approved with the goal of making structural adjustments in FY 2018. Staff reconfirmed this gap in December 2016 with the prelim- inary near term financial outlook articulating that the General Fund is anticipated to face a gap in FY 2018 ranging from $4 million to $6 million. This gap was projected to continue into FY 2019 as well as potentially FY 2020 despite healthy revenue growth. Subsequent to the release of this near term forecast, staff has reviewed and revised all expenses and revenue estimates in the General Fund resulting in a final FY 2018 Base Budget gap of $4.5 million. This FY 2018 Budget includes General Fund revenue estimates of $207.0 million, a 6.1 percent increase from FY 2017 Adopted Budget levels of $194.2 million, or a $12.0 million increase. Despite this healthy growth, General Fund expenditures of $210.4 million reflect growth of 8.4 percent from the FY 2017 Adopted Budget level of $194.2 million, or a $16.3 million increase. The Budget Stabilization Reserve (BSR) is projected at FY 2018 BSR balance of $38.9 million, or 18.5 percent of the FY 2018 Budget expenses of $210.4 million. This is at the City Council target level of 18.5 percent or $38.9 million. Below outlines the General Fund balancing strategy which looked at a multi -year approach ensuring funding was available in the out years to address the anticipated increases in expenses due to variables such as pension costs and labor negotiations. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 17 TRANSMITTAL LETTER General Fund Balancing Strategy REVENUES Based on a continued gradual growth of the regional economy and Fiscal Year 2017 year-to- date major tax revenue receipts, this budget assumes continued healthy growth in Sales Tax, Property Tax, and Transient Occupancy Tax in comparison to the Fiscal Year 2017 Adopted Bud- get. This Fiscal Year 2018 Budget assumes increases to major tax revenue receipts by approxi- mately $9.0 million, or 8 percent, from $112.4 million to $121.4 million when compared to the FY 2017 Adopted Budget. Growth in major tax revenues reflect approximately 80 percent of the change from the FY 2017 Adopted Budget for all General Fund revenues. In FY 2019, growth in these same taxes of 5 percent or $5.9 million is factored into the ongoing General Fund figures. The City continues to also seek new way to generate revenues and monitors legislation for potential impacts as well. The passage of Santa Clara County Measure B will provide approxi- mately $38 million over the 30 year period to help address some of our transportation needs (this is separate funding from Measure B funds for grade separations). In addition, the recent passage of SB1 the Road Maintenance and Rehabilitation Account is estimated to provide an additional $1.2 million annually by FY2019. We must continue to explore new revenue opportu- nities while understanding their impacts such as proposed new hotels and/or car dealership opportunities. EXPENSES The City's General Fund expense budget of $210.4 million reflects a 8.4 percent increase from FY 2017 Adopted Budget levels of $194.2 million. As a service driven organization, the City's pri- mary expense continues to be salaries and benefits, making up nearly 60 percent of the City's General Fund budget. The next largest expense category reflects transfers from the General Fund of $29.9 million, reflecting the continued priority of investing in infrastructure of nearly $25 million annually. As discussed earlier, I stressed the need to examine the allocation and pri- oritization of existing resources before requesting additional funding; in no other fund was this principle more prevalent. This budget continues to work to manage escalating costs through the recent approval of labor contracts in which both ensure employee contributions to the employer pension costs as well as flat rate health coverage. The total positions budgeted in the General Fund reflect a year -over -year decrease in budgeted levels of 0.77 positions. Despite these cost containment strategies, we have continued to invest in critical services and initiatives such as public safety, parking plans, labor relations, and our employees. We will continue to assess our resources and delivery of services as discussed above such as the evaluation of the animal shelter and parking initiatives. 18 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TRANSMITTAL LETTER All Funds This budget not only focuses on the General Fund but also continues to ensure financial stabil- ity in all City funds. All other funds have been programed with a contribution to the irrevocable Section 115 Pension Trust for a total contribution of $1.4 million in FY 2018, to match the funding levels provided by the General Fund in FY 2017. Major activities in non -General Funds include: Waste Water Treatment Fund As part of the 2018-2022 Capital Improvement Program (CIP) expenditures of $94.9 million are programmed, with $38.0 million allocated in Fiscal Year 2018. It is important to note that about 64% of expenditures in the Wastewater Treatment Fund are reimbursed by five contributing partner agencies outside of the City of Palo Alto, based on each agencies expected capacity share. Overall, a total of ten capital projects are programmed over the five-year CIP. FY 2018 revenues in the Wastewater Treatment Fund are expected to increase by $6.45 million or 13.4 percent, compared to FY 2017. The majority of the increase resulted from State Revolving Fund Loans for programmed FY 2018 - 2022 capital improvement expenditures and partner revenue increases outlined in the Wastewater Treatment Fund section of the Public Works Department. Airport Fund The Palo Alto airport ranks among the busiest general aviation airports in the country, and the City assumed airport operations from Santa Clara County in August of 2014. Under previous terms, the County exercised the right to sublease to Fixed Base Operators (FBOs) with agree- ments that are scheduled to expire in April 2017. The City is currently working to transition from these FBOs resulting in projected increases for rental income, offset by expenses for mainte- nance and cleaning responsibilities that were previously assumed from the FBOs. The airport is also undergoing major construction projects leveraging grants from the Federal Aviation, approximately $5 million in FY 2018 alone. To ensure sufficient funding for operating costs and ensure continued services with minimal service delivery impact, the Airport fund will receive a $0.2 million loan from the General Fund for FY 2018 for a total loan of $3.1 million. Various Parking Funds Daily parking financial activities reside primarily in three funds: University Avenue Parking Dis- trict Fund, California Avenue Parking District Fund, and Residential Parking Permit Fund. Reve- nue in these funds comes from parking permits and is used for maintenance, repair, and beautification of parking facilities and public areas within these areas. Significant capital invest- ments and increases in permit revenues are included beginning in FY 2018. Based on permit lev- els outlined in the Downtown Parking Management Study, and the need for investment in future programs and infrastructure, increases in current permits are anticipated to increase revenues from 45 percent to 120 percent in the parking funds. Despite these increases, loans are antici- pated to be needed to provide the cash flow financing for the additional investments not cur- rently assumed in this FY 2018 Budget. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 19 TRANSMITTAL LETTER On April 11, 2017, the City Council received the City of Palo Alto Downtown Parking Management Study parking management strategies, including paid parking, within Downtown Palo Alto. As directed by the City Council, staff will develop potential strategies, in concert with the Planning and Transportation Committee and Finance Committee, for the organization and scaling of a comprehensive parking strategy during the next fiscal year. During FY 2018, staff will actively work with the City Council, and the community to develop a comprehensive parking strategy including advancing incremental steps as they are developed. Storm Drainage Fund An average increase of $0.65 per month was recently approved by the City property owners through a ballot measure in April 2017. This new Storm Water Management fee, which will aver- age $13.65 per month, will go into effect starting in FY 2018 with a sunset date of June 1, 2032 unless extended through a subsequent ballot measure. This fee will provide for a number of projects and infrastructure components as outlined in the Storm Drain Blue Ribbon Commit- tee's recommendations. Staff will begin to implement these recommendations and improve- ments to the Storm Water system through the addition of 1.0 position as well as capital improvement projects in FY 2018 and beyond. UTILITY RATE CHANGES FY 2017 was the first year in recent years that rate increases have been necessary across all the City's utilities resulting in an 8.7 percent increase in the average residential utility bill. For exam- ple, Electric rates had not increased since FY 2009. FY 2018 continues the rate increases fore- cast last year in order to ensure our ability to replenish lower reserves and provide funding sufficient to provide for continued increasing expenses for commodity costs and repair and replacement of the City's aging utility infrastructure. However, a modest increase of 2.5 percent to the average residential utility bill is expected, a $6.79 increase per month. The individual util- ity rate increases for FY 2018 can be found in the Enterprise Funds Summary section of this document. Attachment 3: Fiscal Year 2018 Salaries, 3enefits and Position Details The most significant asset the City has in serving our community is our employees. Local gov- ernment services are primarily delivered by employees whether they are police officers, utility linemen, librarians, or planners. It should not be surprising, therefore, that 59 percent of the Fis- cal Year 2017 General Fund Budget is attributable to salaries and benefits. As a result of recent labor negotiations, the City will be increasing employee salaries reflecting cost of living and market driven increases aimed at placing Palo Alto employee compensation at the median of comparable California jurisdictions. 20 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TRANSMITTAL LETTER Position Changes This budget includes the addition of a net 4.85 FTEs across all funds, a less than one percent increase in staffing. The level of FTEs in FY 2018 would be 1,059. (The net year over year increase of 6.85 FTEs is attributed to an increase of 2.0 FTEs approved by Council during Fiscal Year 2017 and an increase of 4.85 FTEs approved in this budget.) The table below summarizes the changes in positions from the FY 2017 Adopted Budget to the FY 2018 Adopted Budget. This budget assumes the following net position changes by funding source: 2.27 reduction in the General Fund, 3.50 addition in Enterprise funds, and 3.62 addition in Other Funds. Position Changes FY 2017 Adopted to FY 2018 Adopted Budget Fiscal Year 2017 Adopted Budget Fiscal Year 2017 Approved Adjustments* Fiscal Year 2017 Modified Budget Fiscal Year 2018 Net Increase Fiscal Year 2018 Reallocation Fiscal Year 2018 Adopted Budget Net Difference General Fund 603.94 1.25 605.19 0.35 (2.62) 602.92 Enterprise Funds 353.61 0.75 354.36 3.50 0.00 357.86 Other Funds* 94.55 0.00 94.55 1.00 2.62 98.17 1,052.10 2.00 1,054.10 4.85 0.00 1,058.95 (2.27) 3.50 3.62 4.85 * Other Funds include the Capital Improvement, Internal Service, and Special Revenue Funds. ** CMO Reorganization: This action reorganized the City Manager's Office staffing, eliminating 2.75 positions including 1.75 Assistant City Manager positions and 1.0 Economic Development Manager and adding 2.0 Deputy City Manager and 2.0 Assistant to the City Manager positions. In the Utilities Department, 1.0 Utilities Chief Operating Officer was added and the Utilities Director was retitled to the Assistant City Manager/Utilities General Manager shared by the CMO and Utilities Departments. NOTE: This table does not include Hourly positions. A net 4.85 full-time positions are recommended to be added throughout the City to enhance service delivery. In evaluating staffing, we continued to be very mindful of the ongoing liabilities the City may be incurring as additional full time employees are added. This is why we took a very hard look to ensure reductions in positions were also brought forward to right -size the organization. Positions being added and or deleted include: • Addition of 1.0 Public Safety Information Officer in the Police Department to proactively increase communication and outreach to the community. • Elimination of 1.0 Community Services Officer in the Police Department due to a decreased need for parking enforcement at the Stanford Hospital garage resulting from the use of license plate readers • Addition of 1.0 Junior Museum and Zoo Educator in the Community Services Department to enhance offerings at the Junior Museum and Zoo. ▪ Elimination of 0.75 Producer Arts/Science Program in the Community Services Department to align with anticipated class offerings at the Art Center. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 21 TRANSMITTAL LETTER • Augmentation of 0.25 Producer Arts/Science Program in the Community Services department, offset by the elimination of 0.15 Junior Museum & Zoo Educator in the Community Services department, to redistribute positions to align with anticipated enhanced program offerings. ▪ Addition of 1.0 Senior Technologist in the Information Technology Fund to add dedicated resources for public safety technology support. ▪ Addition of 1.0 Customer Service Representative in the Utilities Funds to augment capacity for handling customer inquiries. • Addition of 1.0 Associate Engineer in the Storm Drain Fund to implement the Storm Drain Blue Ribbon Commission recommendations as outlined in the recently approved ballot measure for fee increases. ▪ Addition of 1.50 Facilities Technicians in the Airport Fund to enhance maintenance services and decrease the maintenance cycle time at the Airport. In order to enhance the City's ability to be flexible and agile, while continuing to work to mini- mize the City's exposure to rising costs, several classification changes are being recommended to existing positions in this year's budget. In general, these changes fall into the following groups: • Reclassifications that are part of departmental reorganizations to increase functional capacity and facilitate succession planning in the City Attorney's Office (four positions), the Human Resources Department (two positions and a reduction to a part-time position), the Library Department (two positions), and the Utilities Department (ten positions). • Reclassifications that are recommended to align the position classification with the desired level of service delivery, including a position in purchasing to help manage the increased volume associated with Capital Improvement project work, a position in the Community Services Department that can do more with the Theater program, and the Utilities Department (one position). More information on these full-time positions changes and information on part-time positions changes can be found in the individual department and fund summaries elsewhere in this docu- ment. Salary & Benefits The City Council has implemented multiple efforts to minimize the growth of pension and other benefit expenses through labor negotiations. These are an important part of the City's cost con- tainment strategies, and include: • Continued employee payment of the CaIPERS employee contribution for all bargaining groups • Employees contributing between 0.5 percent and 3.0 percent of the employer portion of CaIPERS 22 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TRANSMITTAL LETTER • Employees sharing the cost of health plans, with almost all bargaining units receiving a flat - rate medical benefit ▪ Implementing a less costly second pension tier parallel to the state's implementation of a third tier that went into effect January 1, 2013. As expected, new employees are hired into the lower tiers as existing employees retire, thereby lowering the City's overall pension liability. PENSION Even with these efforts, the City's pension costs continue to grow. As part of the 2015 Actuarial Report, CaIPERS changed their pension calculation methodology; the reports now outline both the normal cost as well as a flat payment amount for the unfunded accrued liability. As such, in Fiscal Year 2017, they will no longer accept prepayment of the normal cost component of pen- sion costs. Additionally, in December 2016, the CaIPERS board voted to lower the expected rate of return for future years from 7.5 percent to 7 percent, phasing in the reduction over three years beginning in Fiscal Year 2019 with a rate of return assumption of 7.375 percent. In Fiscal Year 2018, before the rate reduction is incorporated into the CaIPERS payments, there will be a 1.3 percentage point increase in pension contribution rate for miscellaneous groups (from 28.9 percent to 30.2 percent) and a 4.29 percentage point increase in the pension contri- bution rate for safety groups (from 45.4 percent to 49.69 percent). These trends worsen with the lowered rate of return, as seen in the chart below of anticipated CaIPERS rates through Fiscal Year 2023. This chart is based on the guidance provided by CaIP- ERS for funds with a funding ratio under 70%, consistent with the City of Palo Alto's funding status of 69%. Pension Rates By Plan (Fiscal Year) Pension Plans 2016 2017 2018 2019 2020 2021 2022 2023 Miscellaneous 27.7% 28.9% 30.2% 31.2% 34.7% 38.7% 41.4% 43.7% Safety 41.9% 45.4% 49.7% 50.1% 55.6% 62.9% 67.7% 71.8% Rate of Return 7.5% 7.5% 7.5% 7.375% 7.25% 7.0% 7.0% 7.0% In anticipation of the lower rate of return and to proactively address the City's unfunded pen- sion liability, the City Council approved investing funds in an irrevocable IRS Section 115 Trust ("Trust") as part of CMR 7553 on January 23, 2017. That action authorized an initial deposit of $2.1 million in General Fund proceeds to be transferred to the Trust, representing approximately 10% of the General Fund's annual pension contribution, and this budget ensures additional fund- ing to be transferred from other funds throughout the City into the Trust representing the same 10% amount. This would transfer an additional $1.4 million, for a total of $3.4 million in the Trust. These transfers are discussed in each department and fund section where they are budgeted. This additional investment in retirement prefunding will help mitigate the City's risk from lower than anticipated rates of return and from other factors that would affect the City's pension costs. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 23 TRANSMITTAL LETTER Staff has been in close communication with neighboring jurisdictions, pension experts, and CaIPERS working to identify and understand all the intricate variables and options to address these growing costs. A number of strategies can be adopted by an organization such as annual contributions to an irrevocable pension Trust, a "fresh start" which would reduce the amortiza- tion schedule, policy changes to the use of excess funds in the General Fund Budget Stabiliza- tion Reserve, not phasing in the impacts from lowering the investment rate of return from 7.5 percent to 7.0 percent, increase employee pension contributions, dedicate new funding sources, and changes to annual contribution levels just to name a few. Staff will return to the Finance Committee during FY 2018 to discuss these options and more with the goal to have an approved strategy in place for inclusion in the FY 2019 budget. RETIREE HEALTHCARE Consistent with past practice, this budget assumes the full payment of the Annual Required Contribution (ARC) for retiree pension and healthcare costs. With the payment of the ARC, it is assumed that, all else being equal, within 30 years the City will pay off its obligations and unfunded liabilities for pension and retiree healthcare costs. The City's Fiscal Year 2018 ARC is $16.94 million, this represents an increase of $780,000, or 4.8%, from the Fiscal Year 2017 Adopted Budget amount of $16.16 million. Subsequent years will see a slight tapering in the rate, as evidenced in the chart below. The chart is based on the outside actuarial consultant's Actuar- ial Determined Contributions for the next ten years, as presented to the Finance Committee in May 2016. Retiree Healthcare Annual Required Contributions (by Fiscal Year) Fund 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 General Fund 10.0 10.9 10.3 10.6 11.0 11.4 11.7 12.2 12.6 13.0 13.5 Non -General Funds 4.8 5.2 6.7 6.9 7.1 7.4 7.6 7.9 8.2 8.5 8.7 TOTAL $14.8 $16.1 $16.9 $17.5 $18.1 $18.8 $19.3 $20.1 $20.8 $21.5 $22.2 More discussion on Retiree Healthcare can be found in the employee information section of this document. 24 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET BUDGET ACKNOWLEDGMENTS Budget Acknowledgments Department Budget Coordinators Administrative Services Mary Figone City Attorney Stacy Lavelle City Auditor Deniz Tunc City Clerk David Carnahan City Manager Khashayar Alaee Community Services Jazmin LeBlanc Sarah Ip Development Services Katie Whitley Fire Amber Cameron Human Resources Frank Lee Information Technology Sherrie Wong Library Evelyn Cheng Planning & Community Environment Sherry Nikzat Police/Office of Emergency Services Michael Dougherty Public Works Gina Magliocco Utilities Anna Vuong Budget Document Producers - Office of Management & Budget Staff Lalo Perez Kiely Nose Paul Harper Steve Guagliardo Chris Yi Jessie Deschamps Alexandra Harris Chaitali Paliwal Image Credits All artwork produced by children enrolled in Palo Alto Art Center Children's Fine Art camps and classes offered by the Community Services Department. For more information, please visit www.cityofpaloalto.org/gov/depts/csd/artcenter. BUDGET ACKNOWLEDGMENTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 25 CITY OF PALO ALTO CITY OF PALO ALTO ORGANIZATIONAL CHART City of Palo Alto Organizational Chart Palo Alto Residents City Council I I I City Attorney Molly S. Stump City Manager James Keene Assistant City Manager Edward K. Shikada Administrative Services Lalo Perez, Director/Chief Financial Officer Community Services Robert de Geus, Director Development Services Department Peter Pirnejad, Director Fire Department Eric Nickel, Chief Information Technology Jonathan Reichental, Chief Information Officer Library Monique le Conge-Ziesenhenne, Director City Clerk Beth Minor City Auditor Harriet Richardson ■ Office of Emergency Services Kenneth Dueker, Director I Office of Sustainability Gil Friend, Chief Sustainability Officer Human Resources Rumi Portillo, Director/Chief People Officer Planning and Community Environment Hillary Gitelman, Director ■ Police Department Ron Watson, Interim Chief Public Works Mike Sartor, Director Utilities Edward K. Shikada, General Manager CITY OF PALO ALTO ORGANIZATIONAL CHART • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 27 CITY OF PALO ALTO PALO ALTO AT A GLANCE Palo Alto at a Glance San Francisco Dal I San Frarrcdsco CI 13n.;hane Bay South Son Francisco rancisc,1'57aI I 'arse Refuge e El Cram;:a .37 I1all Flo' r L'.:ay. roe San Mateo sal M.31 e n San Carlos Oakland Alameda Chaffin fiegifcancd Park Sala LQ andrQ 11227;:Castro Valley Hayward qti Redwood City AI ie'Inn Palo Alto 'Nocrdsicle Stanford Union C EcenLandFng \ Ecological Reserve E4' I'srfala Valley La I!asca 35�' I S LI 0 nya Cuper INCORPORATION April 23, 1894 GOVERNMENT Palo Alto is a charter city operating under the Council -Manager form of government COUNTY Santa Clara County www.sccsgov.org SCHOOL DISTRICT Palo Alto Unified School District www.pausd.ora LOCATION 33 miles south of San Francisco; 17 miles north of San Jose; and 356 miles north of Los Angeles CLIMATE Mediterranean climate with cool, wet winters and warm, dry summers AREA 25.85 square miles ELEVATION 30 feet above sea level PARKS, PRESERVES AND OPEN SPACE 8,415 acres CREDIT RATING AAA PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 29 PALO ALTO AT A GLANCE POPULATION Palo Alto's population was 66,478 in 2016. This represents a 0.73 percent decrease over the pre- vious year and a 13.25 percent increase since 2000. Approximately 24.7 percent of the popula- tion is under the age of 18, and the median age is 41.1. Approximately 53.0 percent of the popula- tion is female, and 47.0 percent of the population is male. EDUCATION Palo Alto has one of the most outstanding edu- cational systems in the nation. In a recent survey, Palo Alto was named one of California's most educated cities. Over 96.4 percent of Palo Alto residents aged 25 or over have received a high school diploma. Close to 79.9 percent have obtained a bachelor's degree and nearly 51.8 percent have earned a post -graduate or profes- sional degree. School enrollments in Palo Alto increased to 12,488, or 12.95 percent, between 2007 and 2016. In school -year 2015-16, Palo Alto and Gunn high schools had a combined average SAT score of 1,883. The average scores for the United, Califor- nia, and Santa Clara County were 1,484, 1,476, and 1,606, respectively. INCOME Palo Alto's median household income on average for 2015 was $147,737 and the per capita income in 2015 was $81,860. As of 2015, 70.2 percent of all households in Palo Alto had an annual income of greater than $100,000. PERSONS PER HOUSEHOLD The average number of persons per household in Palo Alto owner -occupied and renter ccupied homes was 2.53 in 2015, compared to 2.26 per household in 2000. HOUSING UNITS In 2015, 54.0 percent of the 27,411 housing units were owner -occupied and 46.0 percent were renter -occupied. In 2000, there were 26,048 housing units - 55.4 percent owner occupied, 41.4 percent renter -occupied, and 3.2 percent were vacant. There were 5.2 percent more total housing units from 2000 to 2015. 30 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PALO ALTO AT A GLANCE DEVELOPMENT The City issued approximately 2,486 residen- tial and 651 commercial building permits in Fiscal Year 2016. The combined valuation for all permits was $387.3 million. OFFICE AND INDUSTRIAL RENTAL ACTIVITY Palo Alto's net rentable office space totaled approximately 7.4 million square feet as of the fourth quarter of 2016. The vacancy rate during this same time period was 7.1 percent compared to 7.6 percent for the Silicon Valley market. Average asking rents in Palo Alto and the Silicon Valley were, respectively, $8.35 and $4.73 per square foot, as of the fourth quarter of 2016. Net rentable square footage for industrial facilities in Palo Alto was 1.5 million, with a vacancy rate of 1.6 percent and average ask- ing rent of $2.76 per square foot for manufac- turing and $1.91 per square foot for warehouse. The Silicon Valley market had an average vacancy rate of 1.3 percent and ask- ing rent averaged $1.14 per square foot for manufacturing and $0.87 for warehouse. Net rentable space for Research and Develop- ment (R&D) facilities in Palo Alto totaled 10.3 million square feet with a vacancy factor of 1.3 percent and average asking rent of $5.36 per square foot. The vacancy rate for the Silicon Valley market was 7.2 percent with an average asking rent of $2.25 per square foot. JAMES STEWART HE GLENN MILLER STORY ONG OF THE THIN MAN Top 25 Major Sales/Use Tax Contributors, FY 2016 Anderson Honda Apple Stores Audi Palo Alto Bloomingdales Bon Appetit Management Co. CVS/Pharmacy Eat Club Fry's Electronics Hewlett-Packard Integrated Archive Systems Tesla Lease Trust Lucile Packard Children's Hospital Macy's Department Store Magnussen's Toyota Neiman Marcus Department Store Nordstrom Department Stores Redwood City Electric Space Systems Loral Stanford University Hospital RETAIL SALES AND SALES TAX REVENUE Sales and use tax totaled $30 million in FY 2016, an increase of $0.3 million or 1.2 percent. On a year over year basis (FY 2016 versus FY 2015), the economic segments showing par- ticular strength within the City were auto Tesla Motors Tiffany & Company USB Leasing Varian Medical Systems Volvo Cars Palo Alto leasing and sales, new restaurants, food mar- kets, electric equipment, service stations, con- struction, office equipment, business services. Retail sales, which represent 34.9 percent of sales tax receipts have been steadily eroding due to online sales. Restaurants and food PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 31 PALO ALTO AT A GLANCE products sales totaled $4.7 million or 5.4 per- cent growth over FY 2015. Principal Property Taxpayers, FY 2016 Rank Taxpayer 1 Leland Stanford Jr. University 2 Loral Space and Communications 3 Google Inc. 4 PPF OFF 3301 Hillview Avenue LP 5 EOSII Palo Alto Technology Center LLC 6 Whisman Ventures, LLC 7 5143 LLC 8 BVK Hamilton Ave LLC 9 Ronald & Ann Williams Charitable Foundation 10 PPC Forest Towers, LLC PALO ALTO BUSINESSES As the birthplace of the Silicon Valley, Palo Alto is the home to Stanford University and thousands of innovative companies including Hewlett-Packard, IDEO, Tesla, Flipboard, Palantir Technologies, Xerox Palo Alto Research Center, Wilson Sonsini Goodrich & Rosati, Manatt Phelps Phillips, Accel Ventures, Survey Monkey, Theranos, Genencor, Tencent America, Skype, Nest, the Institute for the Future and many other leading technology and business services firms. Total Taxable Assessed Value $3,952,158 $215,180 $158,245 $130,150 $121,692 $112,001 $76,823 $69,290 $62,685 $56,610 $4,954,834 Palo Alto was named the 2016 most livable U.S. city and again named among the top 6th most livable U.S. cities in 2016 due to its econ- omy, climate and natural beauty, parks and recreational activities, excellent public school system, university presence, proximity to three major airports (Oakland, San Jose and San Francisco) and rail service, world -class medical facilities, excellent retail centers and restaurants and its highly acclaimed city ser- vices. Businesses are drawn to Palo Alto not only because of its great location, workforce, and ga- monk 32 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PALO ALTO AT A GLANCE entrepreneurial culture, but also because of incentives including: great local utilities (including dark fiber), no payroll tax and no business license tax. Also, the City's Develop- ment Center is a "one -stop" service center staffed by the Planning, Building, Public Works, Utilities and Fire departments. EMPLOYMENT The City had 32,002 employed residents in 2017. Due to its location on the Peninsula and the presence of Stanford University, the City is a job importer versus exporter, and the number of jobs in the City is nearly 92,125. Palo Alto's unemployment rate was 2.6 per- cent in 2016, which was considerably lower than the nation (4.7 percent), state (5.2 per- cent), and county (3.5 percent), during the same period. LARGEST EMPLOYERS Palo Alto's top ten employers reflect jobs ranging from education and healthcare to technology and schools, as of June 30, 2016. Principal Employers, FY 2016 Rank 1 Stanford University 2 Stanford Healthcare 3 Lucille Packard Children's Hospital 4 Veteran's Affairs Palo Alto Healthcare System 5 VMware, Inc 6 SAP 7 Space Systems/Loral 8 Hewlett-Packard Company 9 Palo Alto Medical Foundation 10 Varian Medical Systems Total 11,500 5,000 4,700 3,900 3,500 3,500 2,800 2,500 2,200 1,400 41,000 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 33 PALO ALTO AT A GLANCE Parks, Recreation & Public Safety Community Centers Item (FY 2016) Parks Parks Acreage Playgrounds Community Centers Zoo Golf Courses Gymnasiums/Fitness Rooms Youth Centers Walking/Biking Trails Libraries Item (FY 2016) Library Branches Items Checked Out (Circulation) Books (Inventory) eBooks & eMusic (Inventory) AudioNisual - DVD/CDs (Inventory) Reference Questions 2,620 Numbe 36 162 acres 29 4 1 1 6 1 41.19 miles Number 5 1,400,926 248,319 145,165 47,727 Item (FY 2016) Police Police Stations Sworn Police Personnel (FY 2015) Police Vehicles Motorcycles Canine Units Number of Calls for Service Item (FY 2016) Fire Fire Stations Sworn Fire Personnel (FY 2016) Fire Engines Fire Trucks Ambulances Number of Calls for Service Number 1 93 25 4 1 52,366 Number 7 107 10 1 3 8,882 34 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PALO ALTO AT A GLANCE Infrastructure, Vaintenance & Development Activity Item (FY 2016) Street Miles Lane Miles Resurfaced Annually Building Permits Issued Annually Number of Fire Inspections Active Capital Improvement Projects Capital Improvement Projects Exp. Miles of Water Municipal Mains Gallons of Water Delivered (Daily) Miles of Municipal Wastewater Mains Gallons of Wastewater Treated Miles of Gas Mains Overhead Electrical Line Miles Underground Electrical Line Miles Fiber Optic Backbone Miles 471 miles 39 miles 3,137 permits 2,815 permits 238 projects $63.17 million 236 miles 7.8 million 216 miles 2.5 billion 210 miles 117 miles 187 miles 42 miles . rr�ilit.:Liuiil��ai►WaY•�'- •r PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 35 PALO ALTO AT A GLANCE Sustainability Item (FY 2016) ti Number Total Tons of Material Recycled or Composted Total Megawatt -hours Purchased from Eligible Renewable Sources* Percent of Electric Portfolio Purchased from Eligible Renewable Sources Percent of Electric Portfolio Purchased from Carbon Neutral Sources** 56,438 tons 298,700 hours 31.80% 100% * Calendar year 2016. "Eligible Renewable Sources" are wind, solar, small hydroelectric, and biogas gen- erators whose output is directly purchased by the City under a power purchase agreement. * Calendar year 2016. "Carbon Neutral Sources" include eligible renewable (40%), hydroelectric power (37%), and power from unspecified sources matched with renewable energy credits (23%). The City's goal is to purchase all energy from eligible renewable sources starting in 2017. SOURCES: POPULATION: U.S. Census Bureau, 2015 American Community Sur- vey, Demographic and Housing Estimates, 1 -Year Esti- mates., Table DP05. 2017 Official City Data Set. EDUCATION: U.S. Census Bureau, 2015 American Community Sur- vey, Educational Attainment, 1 -Year Estimates, Table S1501. FY2016 City of Palo Alto Comprehensive Annual Financial Report (Demographic and Economic Statis- tics- Last Ten Fiscal Years). California Department of Education -Data & Statistics - school performance -secondary education for Palo Alto Schools and County SAT score. 2016 average SAT scores by State on Prescholar.com for State level SAT scores. 2016 college board total group profile report for National level SAT scores. INCOME: 2015 American Community Survey 1 -Year Estimates, Selected Economic Characteristics, Table DP03. PERSONS PER HOUSEHOLD AND HOUSING UNITS: 2015 American Community Survey 1 -Year Estimates, Selected Housing Characteristics, Tables, DP04. DEVELOPMENT: City of Palo Alto Planning and Development Depart- ment OFFICE AND INDUSTRIAL RENTAL ACTIVITY: CBRE Silicon Valley Office MarketView Q4 2016 CBRE Silicon Valley Industrial MarketView Q4 2016 CBRE Silicon Valley R&D MarketView Q4 20156 RETAIL SALES AND SALES TAX REVENUE: City of Palo Alto Sales Tax Digest Summary 2016 (Office of the City Auditor) City of Palo Alto 2015-2016 Comprehensive Annual Financial Report (CAFR) TOP 25 MAJOR SALES/USE TAX CONTRIBUTORS: City of Palo Alto Sales Tax Digest Summary First Quar- ter Sales (Jan -March- 2016) -Top 25 Major Sales/Use Tax Contributors. PRINCIPAL PROPERTY TAXPAYERS: City of Palo Alto 2015-2016 Comprehensive Annual Financial Report (CAFR)- Principal Property Taxpay- ers -Current Year and Nine Years Ago. EMPLOYMENT: 2017 Official City Data Set. California Employment Development Department- Labor Market Information Division for State and County unemployment rate, US Department of Labor -Bureau of Labor Statistics for Nation unemployment rate. PALO ALTO BUSINESSES: Livability, Top 100 Best Places to Live City of Palo Alto Economic Development LARGEST EMPLOYERS: City of Palo Alto 2015-2016 Comprehensive Annual Financial Report (CAFR) 36 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT The Budget Process and Document Basis for 3uc get Development The budget is the City's financial plan for delivering effective services and efficiently managing the revenues which support those services. The City's charter and municipal code provide broad governance for preparation of the operating and capital budgets. The budget is also developed based on the following: • The City Council's top priorities and other City Council directives • Budget development status and guidelines ▪ Service level prioritization as identified by the City Manager ▪ Availability and sustainability of revenues • Legal mandates ▪ Prioritization criteria outlined in the capital budget • The City's policies regarding land use and community design, transportation, housing, natural environment, business and economics as outlined in the Comprehensive Plan The review of the operating and capital budgets is structured around public hearings con- ducted by the Finance Committee and prior to Council adoption of the budget in order to incorporate community input into the decision making process. City Council To a Five Priorities On an ongoing basis, the City is committed to providing high quality, cost effective services that reflect the City's core values and strategic goals. In addition, each year the City Council estab- lishes top priorities, which are topics or service areas that will receive particular, unusual, and significant attention during the year. The top priorities guide both budget development and department priority -setting. The following are the City Council's top priorities for 2017: ▪ Transportation • Infrastructure ▪ Healthy City, Healthy Community ▪ Budget and Finance ▪ Housing THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 37 THE BUDGET PROCESS AND DOCUMENT Oaerating and Capital Buc Activities gets - Calenc ar of September - November: Operating budget preparation begins with determination of the base budget for the upcoming year. The base budget establishes the current year adopted budget service levels with updated costs, removes one-time revenue and expenses, and adds ongoing expenditures as approved by the City Council. The capital budget preparation process begins with department staff and appointed committees meeting to review and discuss potential mod- ifications to the five-year capital plan. November - December: Budget guidelines and timeframes for development of the operating and capital budgets as well as the annual municipal fee schedule are developed and distributed. January: Departments submit requests to reallocate staffing and non -salary resources for the upcoming year to meet changing operational needs. The reallocation process results in no net change to the level of resources allocated to the department overall. The General Fund CIP Committee, consisting of senior managers in the Public Works, Community Services, Adminis- trative Services, and Planning and Community Environment Departments, reviews requests for General Fund capital projects. February: Departmental requests for changes and/or augmentations to the base budget are submitted to the Office of Management and Budget (OMB) for analysis. Departments provide targeted outcomes and performance measures associated with requests for resource or service level augmentations. Departments also submit updates to the budget document regarding goals and objectives, significant accomplishments, and key performance and workload mea- sures. OMB staff begins review of operating and capital budget requests. March: Internal budget hearings are held with the City Manager to discuss department budget requests and OMB's budget recommendations. April: OMB staff complete preparation of the proposed operating and capital budget docu- ments based on the City Manager's direction. May: The City Manager releases and presents the proposed operating and capital budgets to the City Council and posts the budget document on the City's Open Budget website. The Finance Committee conducts a series of public hearings and recommends the budget with or without amendments to the City Council. June: Final adoption by the City Council occurs after a public hearing in June. All changes made during the public process are incorporated into the adopted budget documents which are dis- tributed to City libraries as well as posted on the City's website and Open Budget website by early August. 38 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT BUDGET HEARINGS With City Council and Finance Committee FY 2018 Adopted Budget Description Time/Location Departments Attending Monday, April 17 City Council 6:00 PM Council Chambers City Manager Comments reviewing the proposed capital and operating budgets and notice the start of Finance Committee for discussions in May Tuesday, May 2 Finance Committee Special Meeting 6:00 PM Council Chambers Budget Kickoff; Departments/Funds: - Council Appointed Officials & Council - Office of Sustainability - Human Resources, Employee Benefits Funds - General Liability Fund - Administrative Services, Print & Mail Funds - Non -Departmental Thursday, May 4 Finance Committee Special Meeting 7:00 PM Community Meeting Room - Information Technology (capital & operating) - Library - Development Services - Public Works: General Fund, Storm Drain, Refuse, Wastewater Treatment, Vehicle Replacement, related capital Tuesday, May 9 Finance Committee Special Meeting 6:00 PM Community Meeting Room - Special Revenue Funds (including Parking District & Stanford Development Agreement Fund) - Police - Office of Emergency Services - Fire - Planning & Community Environment - Community Services Thursday, May 18 Finance Committee Special Meeting 2:00 PM Council Chambers - Municipal Fee Schedule - General Fund Capital - Utilities (Capital & Operating) - Wrap-up with Finance Committee Monday, June 27 City Council 5:00 PM Council Chambers Public Hearing - Budget Approval & Adoption THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 39 THE BUDGET PROCESS AND DOCUMENT Unc erstanding the Budget Document The operating budget document includes City-wide information as well as information specific to each fund and each department. The City receives revenue from numerous different sources, many of which have restrictions on how they can be used. Separate funds are established to account for the different types of revenues and allowable uses of those revenues. The annual budget information is available after the publication of the annual Adopted Budget, which occurs in August. In august, the annual budget will also be available on the City's Open Budget website, discussed below. General Fund: This is the primary fund used to account for all general revenues of the City (e.g. property, sales, transient occupancy and utility user taxes). In general, these funds are allocated at the discretion of the City Council. This revenue is used to support citywide services such as public safety, community services, planning and community environment, and administrative support services. Enterprise Funds: These funds are established to function as self-supporting operations wherein expenditures are entirely offset by fees or charges for services. For example, the City of Palo Alto provides a variety of utility services (electric, gas, water, etc.) for the community. Revenues from fees or charges are accounted for in separate enterprise funds and can only be used to pay for expenses related to those services. Internal Service Funds: These funds are established to account for a variety of business services provided by one City department (or division) to other City departments. Information technol- ogy, fleet maintenance, printing and mailing, general employee benefits, liability and workers' compensation services are provided to all City departments through internal service funds. Departments are charged for these services based on their respective utilization. Capital Fund: Revenues and expenses for capital projects are also accounted for in a separate fund. Capital projects are those that have a minimum cost of $50,000 for each standalone or combined project. Additionally, the project must have a useful life of at least five to seven years and/or extend the life of an existing asset or provide a new use for an existing asset for at least five years. The City produces a standalone budget document for capital projects that includes detailed information about each project. Special Revenue Funds: These funds are used to account for the proceeds of revenues that are designated for specific or restricted uses. These funds include gas tax funds from the state, in - lieu housing fees assessed for the City's Below Market Rate housing projects, and transportation mitigation fees paid by developers. Other special revenue funds include assessments for park- ing lot bond payments, parking permit revenues, Community Development Block Grants (CDBG) funds from the federal government, and development impact fees related to libraries, parks, and community centers. Debt Service Fund: Debt financing is occasionally undertaken for the purchase, replacement, or rehabilitation of capital assets. A separate fund is established to account for these non -operat- ing expenses. 40 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT Ooen Buc get In order to facilitate understanding and transparency of the budget document, the City pro- vides budget information through OpenGov, an online tool that provides users with different views of the City's budget data by fund, department, revenues, and expenditures. The tool can be accessed by visiting www.naloalto.00engov.com. The City invites you to use the online tool to: • Search seven years of budget and financial data ▪ View trends in revenues and expenditures over time • Drill down into expenses by department or account type • Display the data as graphs or charts • Download into Excel • Share with friends using email or social media • Send comments directly to the City online HOW DOES IT WORK? Governmental budgets are composed of funds, departments, and accounts. Using a pull -down filter you can choose the combination you want to explore. By clicking on one these icons, you can choose whether you want to display graphs showing changes over the years, a pie chart for a single year, or download portions into Excel. For example, you can also cut and paste any illustration into another document, send it to friends using email or Twitter, or post it on Facebook. a Reset Departments :0141, 201,-T1 • • • 2rM6 BLOW 1:tez,' Ens. DR, -,(4 Departments 2!.970.086 (lest{ Fk• S27,977,1440&- ,wm's,-,,» , $ 22,770.327117.74) t rwK. 3 34.074.471(10'71;1 PLOW Works 312,45./55 (73%1 3rnmg amC unity S 7.022.277.4.'7 ) Admirascradtve $ l[rts $ 795.772.777Ia 13m 2%) 1.mra'y S7920.912434%) Mar, K8 9 5502) 377152.205029e] THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 41 THE BUDGET PROCESS AND DOCUMENT De oartment and Enterprise Fund Information The budget document includes the following information for each department and enterprise fund: Mission Statement, Purpose, and Description: introduces the department. Organizational Chart: depicts full-time equivalent (FTE) positions, which report to a department director. The total FTE count in the organizational chart may not match the total FTE count in a department section, if positions are budgeted in a fund not included in the particular depart- ment section. For example, the Administrative Services Assistant Director oversees the SAP functional team and the positions are budgeted in the Technology Fund. Accomplishments: identifies the department's noteworthy accomplishments over the past one or two fiscal years. Initiatives: highlights the major work plan items for the department for the upcoming Fiscal Year. Goals and Objectives: identifies major goals as well as activities that support achievement of those goals. Key Performance Measures: lists key department performance measures related to some goals and objectives. Performance Measures are grouped by its intended outcome such as Quality, Cost, Cycle Time, Customer Satisfaction, and Sustainability identified with icons as follows: 4 O 0 0 Quality Cost Cycle Time Customer Satisfaction Sustainability Workload Measures: identifies key quantifiable department outputs. Budget Summary: summarizes key expenditure, revenue, and position data for the department and/or fund for several fiscal years (FY 2015 Actuals, FY 2016 Actuals, FY 2017 Adopted, and FY 2018 Adopted Budget). Revenues are shown as either internal or external depending on their source. External revenues include grant funds as well as fees collected when providing certain services such as inspections, plan checks and recreational programs. Internal revenues are those that are received from another City department. For example, the Utilities Department reim- burses the Attorney's Office for legal services. Staffing: lists all full-time equivalent (FTE) positions and their respective salary in a department based on their actual level of compensation. Budget Reconciliation: outlines the major base budget and adopted budget expenditure and revenue changes from the previously adopted budget to the newly presented proposed or 42 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT adopted budget. Base budget reconciliation changes include updated salary and benefits cost in accordance with the salary and benefits structure approved the City Council, deletion of one- time expenditures, or addition of ongoing expenditures as approved by the City Council. The budget change table itemizes expenditure and revenue recommendations and the net impact on the fund. Budget Changes: describes service level changes compared to the prior fiscal year as well as the anticipated performance impact as it relates to Quality, Cost, Cycle Time, Customer Satis- faction, and Sustainability. BUDGETARY BASIS The budget is prepared in accordance with Generally Accepted Accounting Principles. The bud- get for governmental funds has been prepared on a modified accrual basis. The modified accrual basis recognizes expenditures when the related fund liability is incurred. Revenues are recognized when they become both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. FUND STRUCTURE AND ACCOUNTING BASIS The accounts of the City are made up of funds that help organize and account for restricted resources. A fund is defined as a fiscal and accounting entity with a self -balancing set of accounts (comprised of assets, liabilities, fund equity, revenues, and expenditures), which are segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with regulatory requirements. The City has the following fund type categories: Governmental Fund Types The governmental funds include the General, Special Revenue, Debt Service, and Capital Project Funds. Governmental Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Proprietary Fund Types The proprietary funds, which include the Enterprise and Internal Service Funds, are used to account for the City's business -type activities. Proprietary funds are reported using the eco- nomic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Fiduciary Fund Types The Fiduciary Funds track assets held by the City in trust or as an agent for various assessment and community facilities districts. These funds are not included in the budget process. Agency Fund Types The Agency Funds are custodial in nature and do not involve measurement of results of opera- tions. The City maintains three agency funds, which are not included in the budget process. THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 43 BUDGET AWARDS �! ; � /��.,. 1E. ...'fir• �" � r_ ti Cal forma Society of .v1unicipaCFinance Officers C-,‘,...9) Certificate of Award Operating Budget Excellence Award Fiscal Year 2016-2017 Presented to the City of Palo Alto For meeting the criteria established to achieve the Operating Budget Excellence Award. January 31, 2017 1 John Adams CSMFO President Craig Boyer, Chair Professional Standards and Recognition Committee Dedicated Excellence in Municipal Financial Reporting • 44 BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET BUDGET AWARDS G GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Palo Alto California For the Fiscal Year Beginning July 1, 2016 Executive Director BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 45 G�9 The Government Finance Officers Associa tion of the United States a nd C anada pres ents this CERTIFIC ATE OF REC OGNITION FOR BUDGET PREPARATION to Office of Management & Budget City of Palo Alto, C alifornia The Certificate of Recogniti on f or B udg et Pr eparati on is pre sented by the G overnment F inance Officers Associ ati on to th ose individuals who have bee n inst rument al in their govern men t unit achie ving a Distinguished Budg et Prese ntati on Award . The Distinguished Budg et P rese nt atio n Award, which is the highest award in go ve rnment al budgeting, is presented to those g overnment units whose budgets are judged to adhere to program stand ards . Executive Director fifirrifeAg, Date February 13, 2017 CITY OF P ALO ALT O FISCAL YEAR 2018 ADOPTED BUDGET BUDGET AWARDS tD CITY OF PALO ALTO 48 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITYWIDE FUNDS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 49 CITY OF PALO ALTO Fund Structure CITYWIDE FUNDS OVERVIEW General Fund General Operating Utility Users Tax Special Revenue Fund Community Development Street Improvement Federal & State Revenues Housing In -Lieu Special Districts Public Benefits Business Improvement Stanford Development Capital mdk Capital Projects Cubberley Capital Traffic Mitigation & Parking in -Lieu Debt Service 2002 Certificate of Participation 2010 Library General Obligation CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 51 CITYWIDE FUNDS OVERVIEW Fund Structure Enterprise Electric Airport Gas Refuse Water I Storm Drainage Fiber Optics Wastewater Collection Wastewater Treatment 1 Internal Service General Benefits Retiree Health Benefits I Printing & Mailing Services Vehicle Replacement & Maintenance Workers' Compensation Information Technology IGeneral Liability Insurance 52 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW Total Citywide Revenue by Category Charges for Services From Other Agencies Return on Investments Sales Taxes Charges to Other Funds Other Revenue Documentary Transfer Tax Other Taxes and Fines Property Taxes Rental Income Transient Occupancy Tax Permits and Licenses Utility Users Tax Net Sales Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 28,259 25,990 27,715 28,985 1,270 5,337 3,621 26,396 43,228 16832 8,746 12,102 8162 8,064 (98) 29,675 30,018 29,150 31,458 2,308 11,369 12,851 11,775 11,857 82 31,145 26,020 37,676 42,916 5,240 10,051 6,266 6,747 6,930 183 2,052 2,785 2,071 2,247 176 38,836 41,290 43,748 46,500 2,752 15,173 16,323 15340 17,264 1,924 16,699 22,366 23,134 25,143 2,009 9,076 9,859 10,264 11,314 1,050 10,861 12,469 12,379 13,867 1,488 255,636 257,786 291,761 300,463 8,702 472,915 479,746 546,318 590,236 43,918 FY 2018 Change % 4.58% 63.77% -1.20% 7.92% 0.70% 13.91% 2.71% 8.50% 6.29% 12.54% 8.68% 10.23% 12.02% 2.98% 8.04% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 53 CITYWIDE FUNDS OVERVIEW Citywide Revenue by Category 3 Year Trend - Citywide Revenues By Category ($000s) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 .._ i11 ___ 111 ■■E III ... ■.. e`' e5 ,ce e" e' Je a4 e5 eh a a4 e� a4 e`' � t��• eo 4 J� e� t �C`� �a4 `0� e�� ;� �a\ yet° yoe ��tc ey etQ• �e� yr�e �� J \\,N arc. ``e yep e'` ��oc �reiP `��e yap Oar wren �ta� 4eya oQe� e��a ``JQ a�a \��J a4 �C o r ey o p �a� •Sls <2' Q, o`O _....4!' `��� V- oo et.�c ate �e'0 •ire y�e Qcs- ec Q- L`c Ooc O 4'6 ■ FY 2016 Actuals IN FY 2017 Adopted ■ FY 2018 Adopted FY 2018 Adopted $590.2 Million Net Sales 50.9% Charges for Services_ 4.9% Utility Users Tax 2.3% From Other Agencies 7.3% Permits and Licenses 1.9% Return on Investments 1.4% Sales Taxes 5.3% Charges to Other Funds 2.0% Other Revenue 7.3% Documentary Transfer Tax 1.2% Other Taxes and Fines 0.4% Property Taxes 7.9% Rental Income 2.9% Transient Occupancy Tax 4.3% 54 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET M I = CITYWIDE FUNDS OVERVIEW Total Citywide Expense by Category FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % General Expense 14,794 16,912 20,545 33,335 12,790 Rents & Leases 11,208 12,285 13,626 13,669 43 Net Transfers (4,190) (3,754) 11,236 10,743 (493) Allocated Charges 34,787 36,946 45,704 49,025 3,321 Contract Services 31,419 33,911 38,708 41,546 2,838 Facilities & Equipment 505 554 613 604 (9) Salary & Benefits 157,498 164,162 183,033 196,933 13,900 Supplies & Material 8,032 8,041 8,610 8,372 (238) Debt Service 18,099 23,980 21,424 20,609 (815) CapitallmprovementProgram 62,369 51,849 154,506 142,895 (11,611) Utility Purchase 127,728 124,214 143,786 154,550 10,764 Total 462,249 469,100 641,791 672,281 30,490 62.25% 0.32% -4.39% 7.27% 7.33% -1.47% 7.59% -2.76% -3.80% -7.51% 7.49% 4.75% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 55 CITYWIDE FUNDS OVERVIEW Citywide Expense by Category 3 Year Trend - Citywide Expenses By Category ($000s) 250,000 200,000 150,000 100,000 50,000 NMI M ■ ■ 111 ill eye Bey �ety �e5 ``e, e•• OP `c. �••• ahe +fie ��ea `a°� `rat ye�� • J`Q� �e�e K. qz,• 466c qtr �eta� e��y �e� `area �ta`� ��,o. t�4� e�� Oer� \��to AQ Cie ��° o* e� • a\a $- a\ `)� • FY 2016 Actuals • FY 2017 Adopted IN FY 2018 Adopted FY 2018 Adopted $672.3 Million Capital Improvement Program 21.26% Debt Service 3.07% Utility Purchase 22.99% Supplies & Material 1.25% General Expense 4.96% Rents & Leases 2.03% Net Transfers 1.60% Allocated Charges 7.29% Contract Services 6.18% Facilities & Equipment 0.09% Salary & Benefits 29.29% 56 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund 3alance GENERAL FUND General Fund ENDING FUND BALANCE 6/30/17 ESTIMATED REVENUES $ 42,318 $ 186,251 NET FUND TRANSFERS $ (9,098) ESTIMATED EXPENDITURES $ 180,538 ENDING FUND BALANCE 6/30/18 $ 38,933 Total General Fund $ 42,318 $ 186,251 $ (9,098) $ 180,538 $ 38,933 CAPITAL FUNDS I Capital Improvement Fund Cubberley Property Infrastructure Fund $ 50,645 970 $ 82,023 0 $ (42,123) 1,864 $ 79,994 949 $ 10,551 1,885 Total Capital Funds $ 51,615 $ 82,023 $ (40,259) $ 80,943 $ 12,436 DEBT SERVICE FUNDS r Parking 2002 COPS (Taxable) Debt Library Bonds Total Debt Service Funds $ 251 6,640 $0 4,433 $ 233 0 $ 233 4,433 $ 251 6,640 $ 6,891 $ 4,433 $ 233 $ 4,666 $ 6,891 ENTERPRISE FUNDS Electric Fund Fiber Optics Fund Gas Fund Wastewater Collection Fund Water Fund Refuse Fund Storm Drain Fund Wastewater Treatment Fund Airport Fund Total Enterprise Funds $ 63,859 24,827 12,466 3,145 20,652 2,617 16,946 14,924 (2,578) $ 149,907 5,457 36,347 19,292 43,181 32,118 7,178 61,868 7,202 $ (9,489) (125) (7,588) (400) (78) 148 (35) (159) 189 $ 162,905 4,019 36,242 18,744 46,813 30,613 6,275 62,831 7,172 $ 156,858 $ 362,550 $ (17,537) $ 375,614 $ 41,372 26,140 4,983 3,293 16,942 4,270 17,814 13,802 (2,359) $ 126,257 INTERNAL SERVICE FUNDS General Benefits Fund $ 1,360 Retiree Health Benefit Fund 3,264 Workers' Compensation Fund 1,132 Liability Insurance Fund 1,496 $ 16 $ 58,749 $ 59,479 $ 646 58 16,938 16,998 3,262 16 5,222 5,785 585 62 1,780 3,329 9 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 57 CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund Balance ENDING FUND BALANCE 6/30/17 ESTIMATED REVENUES NET FUND TRANSFERS ENDING FUND BALANCE ESTIMATED EXPENDITURES 6/30/18 Printing and Mailing Fund 0 Technology Fund 14,290 Vehicle Replacement and Maintenance Fund 23,971 0 474 1,453 15,607 333 8,798 1,453 19,951 0 10,420 13,255 19,847 Total Internal Service Funds $ 45,513 $ 959 $ 108,547 $ 120,250 $ 34,769 SPECIAL REVENUE FUNDS Community Development Fund Street Improvement Fund Federal and State Revenue Funds Housing In -Lieu and BMR Fund Special Districts Fund Traffic Mitigation & Parking In -Lieu Fund Public Benefits Fund Downtown Business Improvement District Stanford Development Agreement (SU MC) Public Art Funds Total Special Revenue Funds $ 14,901 $ 1,953 890 1,430 4,811 517 44,034 2,733 4,476 4,434 11,143 12,128 77 410 48 142 14,100 211 540 122 $ 107,100 $ (1,628) $ 0 (1,764) 0 0 818 (1) 14,899 (897) 3,800 0 0 0 28 0 148 (5,750) 0 152 182 $12,000 $ (9,888) $ 15,226 556 4,510 31,867 4,213 11,553 12,148 71 8,561 632 $ 19,875 $ 89,337 TOTAL OPERATING FUND BALANCE $ 410,295 $ 648,216 $ 31,998 $ 781,886 $ 308,623 58 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Citywide Average Salary Full -Time Equivalent (FTE) % of City Salary (1) In -Lieu Holiday Incentive Pay (2) Overtime (Average) Mgmt/ Prof. 229.35 21.7% 137,531 n/a n/a n/a Management Leave (80 Hours) 5,290 Pension Employer Portion (3) 41,534 Misc 30.20%; Safety 49.69% Medicare 1,994 Medical 17,267 Dental/Vision 2,130 Retiree Medical (4) 5,625 Workers' Comp 5,116 LI FE/LTD/SU I 645 Non -salary Benefits (5) 3,103 Average Salary & Benefits 220,234 Isolate Holiday Pay from Salary Category Salary, includes holidays 137,531 Holidays (assumes 11, 9 hour 6,546 days) Salary, excludes holidays 130,985 NOTES: Utilities Mgmt/ Prof. Fir' Chie Assn. 48.00 5.00 4.5% 0.5% 143,816 163,334 n/a n/a n/a n/a n/a n/a 5,531 6,282 43,432 81,161 2,085 2,368 22,010 17,383 2,442 2,219 7,354 8,400 1,454 n/a 645 645 3,147 2,647 231,916 284,439 143,816 163,334 6,845 7,774 136,971 155,560 CITYWIDE FUNDS OVERVIEW Police Mgmt Assn. 99.00 7.00 9.4% 0.7% 127,797 197,772 4,928 n/a 792 n/a 17,526 n/a n/a 7,607 63,502 98,273 1,853 2,868 20,557 22,418 2,464 2,506 7,928 11,000 10,567 n/a 658 645 150 3,147 258,722 346,235 127,797 197,772 6,083 9,413 121,714 188,359 PAPOA SEIU 83.00 587.60 7.8% 55.4% 129,279 89,320 3,897 271 1,154 356 14,747 4,423 n/a n/a 64,239 26,964 1,875 1,295 18,885 17,293 2,190 2,033 10,084 5,058 10,124 3,559 645 644 3,492 146 260,611 151,339 129,279 89,320 6,153 4,251 123,126 85,069 Weighted Average 1058.95 100.0% 110,047 907 360 5,212 11,809 37,139 1,596 17,928 2,125 5,987 4,930 644 1,275 199,988 110,047 5,238 104,809 (1) Salary is calculated at actual pay rate (base pay and special pays, as applicable) as of February 2017 adjusted for step increases in accordance with applicable Memoranda of Agreements with the City's bargaining groups or pay for performance increases for Management and Professional employees. (2) Incentive pay includes: Fair Labor and Standards Act Charges and Night Shift Differential pay. (3) Safety employees will pick-up up to 3.0% of the employer share of 49.69%, while SEIU employees will pick-up between 0.5% of the employer share of 30.2% until January 2018, when they will transition to 1.0%. MGMT employees will pick up 0.5% until July 1, 2018, when they will transition to 1.0%. (4) Annual amount incurred for active employees (normal cost only). (5) Non -salary Benefits include professional development for Mgmt, Utilities Mgmt, FCA and PMA; tuition reimbursement for FCA and PMA; and management excess benefit for Mgmt, Utilities Mgmt, FCA and PMA. Does not include administrative fees for General Benefits and Workers' Compensation Funds. CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 59 CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE by Fund 60 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE vs Population 10 Year Trend - Total Citywide FTE 63,. Positions vs. Population Growth FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Citywide FTE -Population 67,000 66,000 65,000 64,000 63,000 62,000 61,000 60,000 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 61 CITY OF PALO ALTO MAJOR CAPITAL PROJECTS Description The combined Fiscal Year 2018 Adopted Capital Budget, which includes the Capital Improvement Fund, Enterprise Funds, and Internal Service Funds, is $172.9 million, a decrease of $13.9 million, or 7.4%, compared to the Fiscal Year 2017 Adopted Capital Budget of $186.8 million. The overall 2018-2022 CIP is $603.5 million, a decrease of $60.6 million, or 9.1%, compared to the 2017-2021 Adopted CIP of $664.1 million. FY 2018 Adopted Projects by Funding Source CAPITAL PROJECT FUNDS 46.2% ENTERPRISE FUNDS 47.1% INTERNAL SERVICE FUNDS 6.7% On the following pages, please find a listing of major capital improvement projects which include: ▪ Projects that are part of the Council Approved Infrastructure Plan • Projects that are Politically Sensitive ▪ Projects with over $750,000 of costs in the first year of the 5 -Year CIP ▪ One-time projects with over $3.0 million over the life of the 5 -Year CIP For a detailed discussion of the City's Fiscal Year 2018 Adopted Capital Budget, please visit the City's website at www.cityofpaloalto.orca/budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 63 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2018 Five Year Total Budget CIP Cost Project Cost Airport Fund: Airport Apron Reconstruction (AP -16000) $5,630,490 $17,330,490 $18,353,893 This project provides funding for the design and reconstruction of the Palo Alto Airport apron in multiple phases within the existing footprint. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Baylands Flood Protection Leve Improvements (PE -17006) $1,000,000 $1,000,000 $1,000,000 This project provides funding for the design and environmental review of improvements to the existing network of flood protection levees in the Palo Alto Baylands between San Francisquito Creek and Mountain View. The project will be designed to provide 1% (100 -year) protection from tidal flooding, including the impacts of 50 years of future sea level rise. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Bicycle and Pedestrian Plan Implementation (PL -04010) $4,972,921 $14,942,692 $14,942,692 This project provides funding for the design and construction of bicycle boulevards, enhanced bikeways, shared -use paths, bicycle parking and a citywide bicycle sharing system in accordance with the Palo Alto Bicycle and Pedestrian Transportation Plan, which was adopted by the City Council in 2012. Effective Fiscal Year 2017, this project includes two projects that were formerly listed as separate CIP projects: CIP Project PL -14001, Midtown Connector, and PL - 11001, Dinah Summerhill Pedestrian/Bicycle Path. The Dinah Summerhill project includes construction of pedestrian/bicycle path on a public easement on the pan handle parcel of the Dinah's Hotel property, and the Midtown Connector project includes construction of a new shared -use path along the levees of the Matadero Creek between Waverly Street and Greer Road as well as a study/master plan of improvements between Alma Street and Highway 101. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Byxbee Park Completion (PE -18006) $0 $2,990,267 $2,990,267 This project provides funding for the remaining improvements to Byxbee Park following the completion of the remaining landfill capping work. As envisioned by the original artist and landscape architect, the completion of Byxbee Park would occur following capping of the remainder of the landfill and would consist of a network of white oyster shell -lined trails with wooden viewing platforms. The hilltops would also be accented with small soil mounds called "hillocks" to be used for planting wildflowers. Additionally, the parking lot for the park would be expanded. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. 64 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Project r t, . &. P s... MAJOR CAPITAL PROJECTS FY 2018 Budget Five Year Total CIP Cost Project Cost Capital Improvement Fund: CalTrain Corridor Video Management System Installation (PE -18001) $1,550,000 $1,550,000 $1,550,000 This project provides funding for installation of video cameras at the four at -grade crossings along the CalTrain corridor. The integrated video management system would be connected to the City's fiber loop and can be accessed in the Emergency Operations Center or monitored by a third -party. Operating Impact This project is anticipated to impact operating expenses in the future. The estimated annual maintenance cost is approximately $600,000 per year; however, the City paid $1.7 million in FY 2017 for the Track Watch guards. If the Track Watch guards were reduced or eliminated the net operating cost would substantially decrease as reflected in the Police Department's Adopted Operating Budget. Capital Improvement Fund: City Facility Parking Lot Maintenance (PE $860,314 $2,447,352 $2,447,352 09003) ■ This project provides funding for the repair, resurfacing, or reconstruction of parking lots and walkways at various City facilities, including restriping and signage. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Charleston/Arastradero Corridor Project (PE -13011) $4,661,836 $9,411,274 $11,861,109 This project provides funding for the reconfiguration of the Charleston/Arastradero corridor including engineering design and construction of new landscaped median islands, bulb outs, enhanced bike lanes, new street trees, and lighting. During the design phase, opportunities for including "green infrastructure" features such as infiltration basins and porous hardscape surfaces will be explored. The conceptual design and CEQA review for the entire corridor was completed in Fall 2015 and NEPA is expected to be completed in Summer 2016. Final design for the corridor will be done in Fiscal Year 2017. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Churchill Avenue Enhanced Bikeway (PL - 14000) $1,037,670 $1,076,847 $1,373,906 This project includes planning, design and construction of a shared -use path along the north side of Churchill Avenue between the existing shared -use path at Castelleja Avenue and the Stanford Perimeter Trail. It also includes intersection improvements at Churchill Avenue and El Camino Real, which will include a new dedicated westbound right -turn lane and an improved bicycle connection to the Bryant Street Bicycle Boulevard east of Alma Street. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Curb and Gutter Repairs (P0-12001) $854,634 $1,484,652 $1,484,652 This project provides funding to repair curbs and gutters that have been uplifted by tree roots and allows for the installation of valley gutters in the Barron Park neighborhood to address ponding and poor drainage. Operating Impact This project is not anticipated to impact operating expenses. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 65 MAJOR CAPITAL PROJECTS Fu _d Pro'ect Title , & Des . ,i FY 2018 Budget Five Year Total CIP Cost Project Cost Capital Improvement Fund: Downtown Mobility and Safety Improvements (PL -16001) $830,102 $898,398 $1,461,541 This project includes planning, design and construction of multi -modal safety improvements in Downtown Palo Alto, including, but not limited to, installation of countdown pedestrian signal heads and ADA-accessible vibra-tactile push buttons, installation or separated bikeways, addition of bicycle parking, traffic signal retiming and coordination, installation of transit amenities, and enhanced bicycle and pedestrian access to the Palo Alto Transit Center. This project will begin with a collaborative study of the existing mobility and safety challenges and opportunities in Downtown Palo Alto. Subsequent phases of the project will include the development of various innovative project alternatives, testing of the alternatives using tactical urbanism demonstrations and pilots, performance monitoring, a robust public engagement process, and installation of permanent improvements. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: El Camino Real Pedestrian Safety and Streetscape Project (PL -18000) $83,811 $5,561,624 $5,561,624 This project provides funding for streets improvements focused on pedestrian safety at controlled and uncontrolled crosswalks, enhanced bus operations at two existing major transit stops, and new urban design amenities between Stanford Avenue and Sheridan Avenue. The project includes: Curb extensions; median refuges; two pedestrian hybrid beacons at a new and existing uncontrolled crosswalks; median shade trees; pedestrian scale lighting. Operating Impact Once construction is complete, operating impacts are estimated to be approximately $93,100 annually. Capital Improvement Fund: Embarcadero Road at El Camino Real Improvements (PL -15001) $4,290,901 $4,336,310 $5,691,133 This project includes planning, design and construction of bicycle, pedestrian and traffic circulation improvements along Embarcadero Road between Bryant Street and El Camino Real. The concept approved by City Council includes Class IV raised separated bikeways between the Caltrain Path, Bryant Street Bicycle Boulevard and Stanford Perimeter Trail, a protected intersection for bicyclists and pedestrians at El Camino Real, intersection realignments at High Street, Emerson Street and Kingsley Avenue, new landscaping, transit amenities, and pedestrian safety enhancements. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Fire Station 3 Replacement (PE -15003) $5,900,584 $5,900,584 $7,304,395 This project provides funding to replace Fire Station 3 at the corner of Newell and Embarcardero Roads. The replacement facility will be based on the prior Replacement Study and Needs Assessment prepared in 2005. Operating Impact This project is anticipated to impact operating expenses in the future. Maintenance is estimated to increase by $7,107 in FY 2019 and by 3% annually thereafter. Capital Improvement Fund: Fire Station 4 Replacement (PE -18004) $7,894,325 $7,894,325 This project provides funding to replace Fire Station 4 at the corner of Middlefield Road and East Meadow Drive. The replacement facility will be based on the prior Replacement Study and Needs Assessment prepared in 2005. Operating Impact This project is anticipated to impact operating expenses in the future. Maintenance is estimated to increase by $8,063 in FY 2019 and by 3% annually thereafter. 66 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Pro'ect 't & Descri MAJOR CAPITAL PROJECTS FY 2018 Budget Five Year Total CIP Cost Project Cost Capital Improvement Fund: Highway 101 Pedestrian/Bicycle Overpass Project (PE -11011) $841,125 $11,520,065 $16,144,313 This project provides funding for a new pedestrian/bicycle bridge across Highway 101 at Adobe Creek. The City conducted a design competition that resulted in three innovative designs. Following the competition, the City Council selected a design team to continue with design and completion of the CEQA and NEPA documents. It is anticipated that construction on the bridge will start in spring 2017. Operating Fund This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Junior Museum and Zoo (JMZ) $706,000 $706,000 $706,000 Renovation (AC -18001) ... . This project provides funding to temporarily relocate the Palo Alto Junior Museum and Zoo (JMZ) for two years to the Cubberley Community Center to facilitate construction of a new JMZ at the current site. This project also includes funding for permit and inspection fees related to the JMZ rebuild project. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Lucie Stern Buildings Mechanical and Electrical Upgrades (PE -14015) $3,000,000 $3,000,000 $6,247,245 This project provides funding to replace and upgrade mechanical and/or electrical systems, fire/life safety and finishes as necessary at Lucie Stern Children's Theater; Lucie Stern Theater and Scene Shop; and Lucie Stern Community Center. The systems will meet current code and user needs, and optimize operational and energy efficiency. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Municipal Service Center Lighting, Mechanical, and Electrical Improvements (PF-16006) $923,988 $923,988 $1,458,382 1 I I This project provides for the replacement of original mechanical and electrical systems and lighting installed in 1966 at buildings A, B, and C of the Municipal Service Center. Operating Impact This project may impact operating expenses in future years. As the scope of this project is better defined through the design process, operating impacts will be reviewed and adjustments may be brought forward as part of the annual budget process, as necessary. Capital Improvement Fund: New California Avenue Area Parking Garage (PE -18000) $9,441,449 $9,441,449 $10,355,098 This project provides funding the design and construction of a new public parking garage on the existing Lot C-7 in the California Avenue commercial area. The project may include a retail component. Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $87,653 in FY 2019 and increase 3% annually thereafter. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 67 MAJOR CAPITAL PROJECTS Fu _d Pro'ect Title , & Des . ,i FY 2018 Budget Five Year Total CIP Cost Project Cost Capital Improvement Fund: New Downtown Parking Garage (PE -15007) -11 $405,977 $11,745,210 $13,220,074 This project provides funding for a new public parking garage in the University Avenue commercial area. The preferred location has been identified as Lot D at the corner of Waverley Street and Hamilton Avenue. An alternate location, Lot G behind the Post Office is also investigated. The project will also evaluate the feasibility of including retail and stacked parking as part of the new structure. Design and environmental consultant services will be needed, including the development of preliminary plans and cost estimates, and completion of the project's environmental review. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: New Public Safety Building (PE -15001) $1,091,134 $54,429,221 $57,806,816 This project provides funding for the design and construction of a new Public Safety Building on Lot C-6 in the California Avenue commercial area. Design and environmental consultant services will be needed, including the development of preliminary plans, cost estimates and special studies as part of an Environmental Impact Report and site evaluation for the approximately 44,500 square foot facility. The size and programming of the new facility were developed by the 2006 Blue Ribbon Task Force with adjustments for current and future projected program needs during the Infrastructure Blue Ribbon Commission process. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Newell Road/San Francisquito Creek Bridge Replacement (PE -12011) 4 $2,500,000 $2,500,000 $4,122,883 This project will provide funding to remove and replace the Newell Road bridge over San Francisquito Creek. Design considerations include a clear span over the creek to allow the channel to convey a flow consistent with the San FrancisquitoJoint PowersAuthority's (JPA) initialflood protection project; aswell as bicycleand pedestrian traffic. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Railroad Grade Separation (PL -17001 $967,097 $1,137,624 $1,972,320 This project will advance the railroad grade crossing circulation study and context sensitive solutions study envisioned by the City Council. It will also fund the preparation of Project Study Report and environmental analysis that will be required for the City to realize its goals of advancing grade separations. Operating Impact Operating impacts are estimated at $34,000 per year (2% of construction costs). Capital Improvement Fund: Roofing Replacement (PF-00006) $1,022,314 $2,357,796 $2,357,796 This project provides funding for ongoing roofing maintenance at various City facilities including major repairs, rehabilitation, replacement, roof deck, drainage systems, and sheet metal repair/replacement. Roofs scheduled for replacement are based on an annual evaluation of their condition. Operating Impact This project is not anticipated to impact operating expenses. 68 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET MAJOR CAPITAL PROJECTS Fu d Pro'ect Title , & Descri Capital Improvement Fund: Self -Contained Breathing Apparatus (SCBA) Replacement (FD -18000) FY 2018 Budget Five Year Total CIP Cost Project Cost $800,000 $800,000 $800,000 This project provides funding to replace Self Contained Breathing Apparatus (SCBA) that are used by firefighters when entering hazardous conditions when responding to fire and hazardous materials incidents. These apparatus provide breathable air for firefighters when entering environments where the atmosphere is immediately dangerous to life or health. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Sidewalk Repairs (P0-89003) ism $2,399,636 $7,844,618 $7,844,618 This project provides funding for sidewalk repairs as part of an annual district -based rehabilitation program, alleviating the backlog of sidewalk repairs and enhancing pedestrian comfort and safety. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Street Maintenance (PE -86070) a $6,967,589 $26,520,506 $26,520,506 This project provides funding for annual resurfacing, slurry seal, crack seal, and reconstruction of various city streets. Operating Impact This project is not anticipated to impact operating expenses. Cubberley Property Infrastructure Fund: Cubberley Amenities Improvements (CB -17000) 1 1 $950,000 $950,000 $950,000 This project provides funding for renovations of existing community recreational amenities at the Cubberley facility which include: tennis courts, playing fields, a gymnasium, an activity room, and a dance studio. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Colorado/Hopkins System Improvement (EL -15000) $1,575,000 $1,575,000 $1,575,000 This project will replace deteriorating equipment which will increase system capacity and improve service reliability for the areas served by Hopkins and Colorado substations and adjacent substations. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Electric Customer Connections (EL -89028) M $3,219,888 $17,191,890 $17,191,890 This project allows for the installation of services, transformers, meters for new customers, upgrades of existing services, temporary service connections, and overhead/underground extensions for new/existing customers. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Electric System Improvements (EL -98003) $2,400,000 $12,000,000 $12,000,000 This project provides funding as needed to improve the Electric Distribution System. Typical activities include: increasing system capacity for load growth, replacing deteriorated capital facilities, reconfiguring/adding to the system to improve service reliability, repairing and replacing storm damaged equipment, and making general improvements to the system. Operating Impact This project is not anticipated to impact operating expenses. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 69 MAJOR CAPITAL PROJECTS FY 2018 Budget Five Year Total CIP Cost Project Cost Electric Fund: Facility Relocation for Caltrain Modernization Project (EL -17007) $1,700,000 $1,700,000 $1,700,00 This project allows for the relocation of overhead Utility Electric and Fiber Optic lines to provide adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Powers Board (Caltrain) to convert their diesel powered commuter trains to electric power. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Rebuild Underground District 20 (EL -14002) MR $900,000 $1,400,000 $1,450,000 This project will rebuild and replace the underground electric system in Underground District 20. Work will include the replacement of deteriorated electrical cable, transformers, switches, and enclosures. Installation of new equipment will bring the electrical system up to current construction standards. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Rebuild Underground District 24 (EL -10006) =1 $920,200 $920,200 $2,701,183 This project will rebuild and replace the underground electric system in Underground District 24. Work will include the replacement of deteriorated electrical cable, transformers, switches, and enclosures. Installation of new equipment will bring the electrical system up to current construction standards. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Smart Grid Technology Installation (EL -11014) $1,000,000 $22,000,000 $22,000,000 This project will implement portions of the Smart Grid Road Map that can be cost effectively applied to the City's electric, gas, and water utility systems, resulting in operating cost savings, environmental benefits, plus an increased quality of life and productivity for the residents and businesses of Palo Alto. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Underground District 46 (EL -12001) $900,000 $900,000 $1,653,951 This project includes the costs to underground the existing overhead distribution system in the area along the 400 block of West Charleston and El Camino Real. Undergrounding will be completed by FY 2019, and the overhead system will be removed. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: VA Hospital Customer Load Requirements (EI-17003) $2,980,000 $2,980,000 $3,000,000 The VA Hospital is outgrowing the capability of the electric infrastructure the City has traditionally provided. Hanover and Maybell Substations currently serve the VA Hospital campus with 2 electric lines, as the federal guidelines require full redundancy of electric power in case one line goes down. Additional capacity is required as the VA Hospital is expected to reach the full capacity of a single line sometime in FY 2018, and this need will be met using mostly existing underground conduits in the short term. VA Hospital and CPAU staff are reviewing options to meet long term needs. Operating Impact This project is not anticipated to impact operating expenses. 70 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2018 Budget Five Year Total CIP Cost Project Cost Gas Fund: Gas System Customer Connections (GS -80017) $1,265,355 $6,717,942 $6,717,942 This funding allows for the Gas Distribution System to be extended in order to provide gas service to new customers and augment service to customers with increased natural gas demands. Improvements include new mains, services, valves, regulators, meters, and accessories. Operating Impacts This project is not anticipated to impact operating expenses. Gas Fund: Gas Main Replacement - Projects 22 to 26 (GS -12001, GS -13001, GS -14003, GS 15000, and GS -16000) $3,617,782 $18,783,492 $19,613,035 These projects replace leaking, inadequately -sized, and structurally deficient gas mains and services located on various streets throughout the City. Staff identifies problematic mains/services by researching maintenance and leak histories, analyzing performance of the entire gas distribution system, and considering risks ratings of the Distribution Integrity Management Plan. Operating Impacts This project is not anticipated to impact operating expenses. Technology Fund: Radio Infrastructure Replacement (TE-05000) $2,595,826 $2,995,826 $2,995,826 This project funds the annual replacement of various items in the City's telecommunications infrastructure inventory in accordance with a life -cycle replacement schedule, The City operates two radio systems (UHF frequency band and VHF frequency band) with five radio sites for each system. Most recently, the City has participated with 14 other local agencies in an effort organized by the Silicon Valley Regional Interoperability Authority to move towards a county -wide 700 Mhz radio communication system. This project provides funding for the City's share of establishing an interoperable radio communication system within the region. Upon completion of the project, the law enforcement, fire and rescue service, emergency medial response, and disaster recovery units within the participating agencies will be able to communicate via an integrated voice and data communications system. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Vehicle Replacement Fund: Scheduled Vehicle and Equipment Replacement - Fiscal Years 2015, 2016, 2017, and 2018 (VR- $7,717,635 $7,837,803 $15,410,674 15000, VR-16000, VR-17000, and VR-18000) I I These projects provide funding for the scheduled replacement of existing City fleet vehicles and equipment. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Collection Fund: Sewer Lateral/Manhole Rehabilitation and Replacement (WC -99013) I $636,540 $3,379,476 $3,379,476 This project replaces defective sewer laterals, cleanouts, manholes, install backwater devices, and purchase equipment to support these activities in order to maintain the Wastewater Collection System. Information collected during routine annual maintenance activities is used to prioritize work. Defective laterals, for example, will be replaced to re-establish existing services, reduce maintenance expenses, and eliminate ground water intrusion. Backwater devices will be installed to reduce backflows of sewage. New manholes will be installed or rehabilitated to improve structural integrity. Operating Impacts This project is not anticipated to impact operating expenses. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 71 MAJOR CAPITAL PROJECTS FY 2018 Budget Five Year Total CIP Cost Project Cost Wastewater Collection Fund: Wastewater Collection System Rehabilitation/Augmentation Projects 28 to 31 (WC -15001, WC- $702,600 $15,377,803 $15,377,803 16001, WC -17001, and WC -19001) , These projects fund the design and construction of high priority main and lateral replacement work, which reduces inflow of rainfall and ground water into the collection system, for various streets throughout the City. These projects will be comprised of laterals identified in video inspection work or through maintenance records identified as deficient and in need of replacement. Priority will be given to areas identified by Public Works as targeted work zones ensuring infrastructure coordination among different City departments. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Dewatering and Loadout Facility (WQ- 14001) $1,774,181 $5,980,764 $27,548,060 This project provides funding for the sludge dewatering and truck loadout facility, replacing the current sewage sludge incinerators with a new solids handling system. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Facility Condition Assessment and Retrofit (WQ-04011) $1,774,181 $5,980,764 $5,980,764 This project provides funding for the structural condition assessment of existing plant facilities and, once issues are identified, the construction of repair and retrofits. Concrete and metal structures are evaluated for evidence of damage caused by corrosion, weathering, age, and ground movement. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Fixed Film Reactor Rehabilitation (N0 $10,732,170 $19,381,018 $19,381,018 14004) 1 This project provides funding for the rehabilitation of fixed film reactors which provide biological treatment, helping the City to comply with discharge permit limits. The two reactors, which came online in 1980, need replacement of core structural components including fiberglass barriers, steel supports, and concrete underdrains. Process components need replacement including biofilter media, 20 -foot deep plastic media, rotating distributor mechanisms, electrical motor control centers, and process piping and pumping. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Headworks Facility Replacement (WQ IL $0 $3,971,313 $3,971,313 16002) This project provides funding for replacing influent pumping, including the suction and discharge piping, pipe manifolds, valves, the electrical and controls system; screening equipment, grit handling equipment, the force main to the primaries and modifying headworks building, and yard piping. Operating Impacts This project is not anticipated to impact operating expenses. 72 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Wastewater Treatment Fund: New Laboratory and Environmental Services Building (WQ-14002) L MAJOR CAPITAL PROJECTS FY 2018 Budget Five Year Total CIP Cost Project Cost $437,246 $18,273,867 $18,273,867 This project provides funding for the design of a new building that will consolidate staff and provide a larger and updated laboratory. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Outfall Line Construction (WQ-19000) I $0 $7,031,682 $7,031,682 This project consists of the construction of a new parallel outfall pipe to convey final plant effluent to San Francisco Bay. Under WQ-80021, Plant Equipment Replacement, Council approved a design contract to design the parallel outfall pipe in October 2016 with Kennedy Jenks Engineers (Staff Report ID 7245). Kennedy Jenks Engineers will complete bid documents, environmental documents, regulatory permits, and provide services during bidding and construction. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Plant Equipment Replacement (WQ- 80021) $1,923,575 $10,766,150 $10,766,150 This project provides funding for replacing necessary plant equipment to maintain treatment reliability and ancillary facilities to maintain existing infrastructure. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Primary Sedimentation Tank $772,798 $7,098,663 $7,633,962 Rehabilitation (WQ-14003) This project provides funding for new protective coatings on each of four concrete primary sedimentation tanks and replacement of rotating parts. Installed in 1972, each tank is 220 feet long by 41 feet wide and removes settleable solids and grease. The four tanks need their structural concrete recoated to ensure the reinforcing steel bars within the concrete are not attacked by penetrating corrosive sewer gases. An industrial coating contractor would install a new protective coating on the concrete to extend the life of concrete by approximately 30 years. Rotating parts are also worn and need replacement. Operating Impacts This project is not anticipated to impact operating expenses. Water Fund: Seismic Water System Upgrades (WS -09000) T $1,128,594 $1,128,594 $5,492,323 This project will provide structural reinforcement for the Corte Madera, Park, Boronda, and Dahl reservoirs to improve earthquake resistance in compliance with the American Society of Civil Engineers (ASCE 7) seismic codes. Work at the reservoir sites will also include the installation of: seismic shut off valves, flexible joints at the inlet/outlet piping connections, backup power supplies, the relocation of overflow pipes, and reinforcement of interior pipe columns. Operating Impacts This project is not anticipated to impact operating expenses. Water Fund: Water Main Replacement - Projects 26 to 30 (WS -12001, WS -13001, WS -14001, WS -15002, and WS -16001) $1,738,000 $27,848,420 $32,775,612 These projects will fund the design and replacement of structurally deficient water mains and appurtenances throughout the City. Mains are selected by researching the maintenance history of the system and identifying those that are undersized, corroded, and subject to breaks. Operating Impacts This project is not anticipated to impact operating expenses. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 73 MAJOR CAPITAL PROJECTS FY 2018 Bind• et. Total Project Cost Water Fund: Water System, Customer Connections (WS -80013) $710,700 $3,773,202 $3,773,202 This project allows for improvements that include new main extensions, valves, domestic services, meters on upgraded services, backflow devices, fire services, and fire hydrants. Operating Impacts This project is not anticipated to impact operating expenses. 74 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY OF PALO ALTO GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 77 CITY OF PALO ALTO GENERAL FUND OVERVIEW General Fund Overview FISCAL YEAR 2018 GENERAL FUND NEAR TERM FINANCIAL FORECAST Subsequent to the release of the FY 2017-2026 Long Range Financial Forecast (LRFF) and during the FY 2017 budget process, staff identified that the General Fund (GF) was facing a financial gap and committed to addressing this imbalance during the FY 2018 budget process. Council asked staff to make some short term adjustments to balance the FY 2017 budget, with the goal of making structural adjustments in FY 2018. Staff reconfirmed this in December 2016 with the preliminary near term financial outlook with the Finance Committee. The near term forecast confirmed that the General Fund was indeed facing a gap in FY 2018 ranging from $4 million to $6 million. This gap was projected to continue into FY 2019 as well as potentially FY 2020 despite healthy revenue growth. FY 2018 FY 2019 FY 2020 Net One -Time Surplus I (Shortfall) ($4 million to $6 million) ($2 million to $0) ($1 million to +500,000) Staff expects tax revenues to grow into FY 2018 and for the economy to remain strong. In a November 2016 meeting with Steve Levy, the head of the Center for the Continuing Study of the California Economy, Mr. Levy stated that we could expect a robust economy to continue for at least the next 18 months and that staff's tax revenue projections for that period were reason- able. The primary drivers of this gap reflects extenuating circumstances including the increased costs of track watch guards ($1.7 million), assuming the electricity costs of streetlight and traffic signals ($2.3 million), and anticipated implications associated with current fire services negotia- tions with Stanford ($2.0 million). Though there are political uncertainties and its potential economic impact, the forecast is based on a continuously improving economic climate which continues to be noted by the majority of national, state, regional, and local economic indicators. This Forecast assumes a continued, gradual growth of the national economy with positive impacts to the local economy, which is reflected in the estimates of economically sensitive revenues. This near term look reflected the need to evaluate programs and to be prudent with additional resource investments. The discussion with the Finance Committee highlighted the need for the organization to prioritize spending as looming expenses the City is will face, not included in this forecast, remain outstanding. In addition to changes in economic conditions, the City faces cost increases through growing pension costs, upcoming labor negotiations, and increasing con- structions costs associated with capital improvements. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 79 GENERAL FUND OVERVIEW This fiscal outlook still does not include a number of both known and unknown impacts with both short and long term implications. Below is a list of a few of the known/unknowns that are not included in the near term financial outlook: ▪ New staffing and program requests; ▪ Cost implications that may arise such as current negotiations with Stanford University for Fire services, support for the Parks Master Plan, and loans to the Palo Alto airport; • Escalating costs to complete the Capital Infrastructure Plan after full design; prevailing wage requirements; construction costs; and operating budget impacts from new facilities; • Parks Master Plan expenditures including Foothills Park 7.7 acres; ▪ Operating and capital costs related to a new Junior Museum and Zoo facility; • Capital costs related to City assets managed by non -profits such as Avenidas Senior Center, the Palo Alto History Museum, and the Ventura Child Care Center; ▪ Cubberley master plan; and • Funding long-term pension and retiree healthcare liabilities As of March 2017, 38 percent of employees received Tier 2 and Tier 3 pension benefits repre- senting a 4 percent increase from the March 2016 level of 34 percent. While the impact of employees hired during the last five years has had little impact on unfunded pension plan liabil- ities, the benefits of the lower pensions will be a long-term cost reduction. Per the June 2015 CaIPERS valuations for the Miscellaneous and Safety employees, the combined unfunded pen- sion liability amounts to $338.4 million for all funds. The General Fund portion totals $222.3 mil- lion. Once the unfunded liability for the retiree healthcare plan, $156.2 million, is added, the grand total is $494.6 million across all funds and $330.1 million in the General Fund. As part of the most recent labor agreements, employees have increased their share of pension contribu- tions, picking -up a share of the employer portion. This has helped contain costs, and cost con- tainment strategies such as this will continue to be explored through future rounds of negotiations. FISCAL YEAR 2018 GENERAL FUND BUDGET Subsequent to the release of this near term forecast, staff has reviewed all expenses and reve- nue estimates in the General Fund resulting in a final FY 2018 Base Budget gap of $4.5 million. This Adopted budget addresses this gap on an ongoing basis and proactively positions the General Fund in FY 2019 and FY 2020 with slight surpluses forecasted. These surpluses are intended to proactively position the City to address the anticipated upcoming investments such as additional contributions to an irrevocable IRS Section 115 Pension Trust Fund. Significant changes from the December preliminary financial discussion include: ▪ Increases in General Fund tax revenue estimates to reflect both current year tracking as well as the most up to date estimates for growth in FY 2018 (additional revenues of $919,000): ▪ Increases in charges for services and licenses and permits for services rendered such as planning and development fees and permits (additional revenues of $1.0 million); • Increases in transfers to other funds primarily for capital improvements projects (additional expenses of $908,000); and 80 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW Increases in salaries and benefits to reflect the current employee population (additional expenses of $605,000). This FY 2018 Adopted Budget includes General Fund revenues estimates of $207.0 million, a 6.1 percent increase from FY 2017 Adopted Budget levels of $195.1 million, or an $12.0 million increase. Despite this healthy growth, General Fund expenditures of $210.4 million reflect growth of 8.4% from the FY 2017 Adopted Budget level of $194.2 million, or a $16.3 million increase. At this time, staff projects the FY 2017 Budget Stabilization Reserve (BSR) to end the year at approximately $42.3 million, or 20.7 percent of the FY 2017 Modified Budget expenditure levels. This does not include any excess revenues or expense savings when compared to budgeted lev- els in FY 2017 based on current tracking. It is anticipated that the General Fund will end FY 2017 with some additional balance primarily attributed to major tax revenues and departmental vacancy savings. This budget recommends a one-time draw on the General Fund Budget Sta- bilization reserve of $3.38 million resulting in a projected balance of $38.9 million, or 18.5% of the FY 2018 Adopted Budget expenses of $210.4 million. This is at the City Council target level of 18.5%. The draw will produced a balance Adopted Budget for FY 2018 and staff will provide funding recommendations to infrastructure and/or unfunded pensions liabilities with the pro- jected surplus of FY 2017. REVENUES Based on a continued, gradual growth of the regional economy and Fiscal Year 2017 year-to- date major tax revenue receipts, this budget assumes continued healthy growth in Sales Tax, Property Tax, and Transient Occupancy Tax in comparison to the Fiscal Year 2017 Adopted Bud- get. This Fiscal Year 2018 Budget assumes increases to major tax revenue receipts by approxi- mately $9 million, or 8 percent, from $112.4 million to $121.4 million when compared to the FY 2017 Adopted Budget. Growth in major tax revenues reflect approximately 80 percent of the change from the FY 2017 Adopted Budget for all General Fund revenues. It is important to note that nearly 25.2 percent of the growth in tax revenue ($2 million) is due to the Transient Occupancy Tax which increased in mid -FY 2016 from 12.0 percent to 14.0 percent as approved by the voters in November 2014 and the four new hotels opened in the last few years. Of this increase, all the revenue associated with this 2.0 percent increase and revenues associated with new hotels has been earmarked for the City Council Infrastructure Plan. The Infrastructure Plan earmark for FY 2017 Adopted Budget is $8 million and FY 2018 forecast is $8.5 million. The following sections discuss the City's major revenue sources and their projected levels as well as major expenditure categories for Fiscal Year 2017 and 2018. SALES TAX Sales taxes continue to rise reasonably well from the Great Recession. Sales taxes are projected to rise to $31.5 million in FY 2018, a 4.2% growth rate from current FY 2017 estimates. The growth rate is consistent with the compound annual growth rate of 4.1% over the past ten years. Sectors showing growth that is expected to continue into FY 2018 are restaurants, food mar- kets, auto sales and leasing, and electronic equipment. Areas experiencing weak sales include department and apparel stores, service stations, office equipment, and business services. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 81 GENERAL FUND OVERVIEW There are concerns over future growth in this revenue category. Internet retail sales are steadily eroding brick and mortar receipts at a steady pace. Each critical fourth quarter that includes the all-important holiday season continue to bring negative news that more and more Black Fri- day and Cyber Monday business have moved on-line, however, increased receipts from county pools have been offsetting this loss. Sales tax that occur in Santa Clara County but cannot be identified to a specific jurisdiction within the county are allocated to the county (sales tax) pool then distributed to the local jurisdictions based on their local tax percentage. For example, sales tax on county -wide Amazon sales go to county pools; Palo Alto average receipt of pool sales tax has been 6.7 percent. The City's sales tax consultant believes that on-line sales may reduce future retail sales growth by 1 percent annually. These trends will be monitored carefully since sales tax represents 15 percent of General Fund revenue. Other sales tax concerns being monitored are the effects of Hewlett Packard's breakup into two companies and the amount of Stanford Hospital construction use tax dissipating as the expansion projects wind down. PROPERTY TAX Property tax from residential and commercial parcels continues to steadily grow, albeit, at a slower pace. After steadily growing since FY 2012, the growth rate of 11.5 percent peaked in FY 2015 followed by a 7.3 percent increase in FY 2016. In dollar terms it has risen from $34.1 million in FY 2015 to $36.6 million in FY 2016 and projected to grow to $39.1 million in FY 2017 and to $42.0 million in FY 2018. The increase from FY 2017 to 2018 equals 7.6 percent or $3.0 million which is slightly lower than the 10 year compound annual growth rate of 6.9 percent. Staff esti- mates for FY 2018 include excess ERAF funds at a much lower level than the past several years. The following charts are taken from a realtor (JStricker.com) web site. It shows the ascent in median prices (first chart) and inventory and sales volume (second chart), especially since the 2009 recession year. With property sales prices rising to record levels, the City's property tax revenues are expected to do well, however, the limited inventory supply is expected to moder- ate the number of sales and property tax growth. January Sales Prices -Palo Alto January 2003 toJanuary 2017 Median Sales Price (91,000's) 'Average Percentage of list Price Received 172.5, 3 SOU 2 MO 3095 2157 1996 1 800 151 1343 1373 1363 1 500 1075 782 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 '98% 100% 109% 10A 101% 100% 96% 99% 100% 103% 100% 109% 108% 106% 96% @2017 JStricker.com Data from MLSListings 82 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW January M arketActivity - Palo Alto January 2003 to Jan nary 2017 *Average Days on Market 90 60 30 —0—Inventory Sales -1 89 85 77 53 76 54 46 38 34 29 21 22 22 16 13 12 22 17 19 21 73 14 13 15 17 11 9 11 2003 2004 2005 2006 2007 2000 2009 2010 2011 2012 2013 2014 2015 2016 21117 *56 31 51 41 66 15 52 65 74 43 45 29 46 31 66 ED2©17 J5tricker.com Data from MLSListings City property tax estimates are based on information received from quarterly meetings with the Santa Clara County Assessor's Office. The estimate includes appeals on record with the Asses- sor's Office, additions to the roll, tax exempt properties and movements in assessed values. This FY 2018 forecast uses historical growth rates and information on any extraordinary transactions available to staff. TRANSIENT OCCUPANCY TAX (TOT) TOT receipts are brisk, especially with the advent of several new hotels in the past few years (two Hilton hotels, Epiphany, the Clement on El Camino Real, and the upgrade of the Quality Inn into the Nest). Occupancy and room rate data indicate that at the end of FY 2017 around 77 percent of the rooms available will have been occupied and that the average daily room rate will hover around $255 compared to 75 percent and $249 per day in the same prior year period. The addition of rooms due to the new hotels has somewhat constrained occupancy levels hitting the 80 to 85 percent rates representing full occupancy, but room rates have risen and exceed those in prior years. The addition of higher end hotels has enhanced this revenue source both for the General Fund and for the Infrastructure Management Plan project funding. Revenues moved upward from $16.7 million in FY 2015 to $22.4 million in FY 2016. TOT for Fis- cal Year 2017 is expected to reach $24.2 million. Projections for FY 2018 stand at $25.1 million, 3.8 percent or $0.9 million above the projection for FY 2017. The sharp increase in TOT from FY 2015 to projected FY 2018 is also attributable to the voter approved TOT increase from 12 to 14 percent starting January 2015. The revenue from a voter approved 2 percent Transient Occupancy Tax (TOT) increase plus revenue from four new hotels has been earmarked for transfer to the General Capital Improvement Fund ($8.5 million), specif- ically for the City Council Infrastructure Plan. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 83 GENERAL FUND OVERVIEW UTILITY USERS TAX The Utility Users Tax revenue budget for FY 2018 fully includes the two changes approved by voters in November 2014: the telephone UUT rate reduction from 5.0 percent to 4.75 percent and the elimination of the large utility user discount. Originally, staff expected that telephone revenues would decline annually by an estimated $0.16 million. Instead, revenues from this source in the first 7 months of FY 2017 have exceeded those in FY 2016 for the same period while the annual receipts for FY 2016 exceeded the FY 2015 receipts. Unfortunately, the City does not receive detailed information from service providers that would help explain trends in this revenue source. The City receives a "lump -sum" check from telephone companies on a monthly basis. Revenues in FY 2018 are budgeted at $4.7 million. Utility receipts from the UUT are based on the Utilities Department's five-year revenue projec- tions. Rate increases for FY 2018 are 14 percent for electric and up to 4 percent for water while gas rates are not expected to increase. The electric rate increase is related to several factors: increasing transmission costs and the cost of renewable projects coming online, sub-stantial additional capital investment in the electric distribution system is planned through FY 2023, and operations cost increases. In addition, sales volumes have decreased which has a sig- nificant short term impact on revenue. Although increasing rates should result in higher UUT revenues, customers reduction in usage, both for electric and water; the latter as a response of past drought conditions, will moderate the UUT increase. Also, warm weather conditions can result in less gas usage and UUT revenue as well. For FY 2018 the General Fund is expected to realize $9.2 million from utility sales. Combined, telephone and utility UUT revenues for the FY 2018 Budget are estimated at $13.9 million, representing growth of 5.2 percent over the revised FY 2017 year-end estimate of $13.2 million. DOCUMENTARY TRANSFER TAX (DTT) After an exceptional year in FY 2015 with receipts reaching $10.1 million attributable to several major commercial transactions, the DTT has returned to more "normal" levels. FY 2016 receipts were $6.3 million and FY 2017 expected to be $7.1 million. Adjusted Budget of $7.1 million reflects an increase of $323,000 over Adopted Budget. Through mid -March, revenues are run- ning 25 percent above the same prior year period. At this time, it is anticipated that the City will realize $6.9 million in FY 2018. As stated in prior analyses, this revenue source can be unpredictable given that the volume and mix of commercial and residential transactions can vary significantly from year to year. A com- parison of FY 2016 receipts to expected FY 2017 revenues will validate this observation. OTHER TAXES AND FINES Staff anticipates that revenues in this category will increase just slightly from FY 2017 levels to $2.1 million, a 1.9 percent increase from the FY 2017 Adopted Budget of $2.0 million. The largest source of revenue in this category is derived from parking violations revenue, and based on cur- rent tracking levels, staff estimates will increase $38,000 in Fiscal Year 2018. 84 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW CHARGES FOR SERVICES This revenue category consists of charges to Stanford for fire services, paramedic services, golf - related fees, arts and science classes, and plan check fees. In comparison to the Fiscal Year 2017 Adopted Budget revenue estimate of $26.5 million, the Fiscal Year 2018 Budget estimate increases $1.2 million, or 4.8 percent. A number of revenue adjustments have been made in the category from the FY 2017 Adopted level. Key changes from the FY 2017 Adopted Budget are listed below: • Opening of the City's Golf Course in the fall / winter of 2017 ($1.9 million); ▪ Development Services new technology fee and alignment to attain 100% cost recovery levels ($659,000); • Second year of the Planning Fee study revenues ($263,000); • Public Works Department Municipal Fee Schedules changes and revenue realignment ($236,000);and • Stanford Fire Services Contract fourth amendment (-$2.0 million). The $2.0 million reduction in estimated Stanford Fire Services contract revenue reflects the annual value of the fourth amendment to the contract, ending June 30, 2017. On October 8, 2013, the City received a Notice of Termination letter from Stanford with the intention to termi- nate the contract with the City no sooner than one year and no later than two years from the date of the notice. The City continues to negotiate with Stanford to settle on a service level and cost. As outlined in CMR #7489 Stanford Fire Agreement 4th Amendment (http://www.cityof- paioalto.org/civicax/filebank/documents/55187), the Fourth Amendment provides for continua- tion of fire services at a fixed fee of $4.8 million for nine months, a $6.6 million annual value less revenue received for medical transport generated from calls for service on the Stanford cam- pus. Therefore, the approximate net annual contract value of the forth amendments is $6.2 million. This budget assumes a Stanford reimbursement at this level for Fire Services however, the actual contract value is subject to continued conversations with Stanford and a revised con- tract for fire services. Additional reimbursements from Stanford for Public Safety Dispatch Ser- vices are also budgeted resulting in a net reimbursement of $7.1 million. Depending on the outcome of mediation significant adjustments to the assumed reimbursement level of fire ser- vices in the General Fund may be necessary. PERMITS AND LICENSES Permits and Licenses consist of payments to the City for issuance of Building Permits, Fire Per- mits, and miscellaneous health and safety -related licenses. In comparison to the Fiscal Year 2018 Budget revenue estimate of $8.8 million, represents an increase of $81,000, or 1.0 percent, primarily due to an increase in Planning and Community Environment Fees as a result of the Planning Fee Study ($265,000) offset by a realignment of Public Works fees which were recat- egorized as Charges for Services (-$199,000). RETURN ON INVESTMENT In the coming year, the expectation is the Federal Open Market Committee (FOMC) will slowly raise the interest rates. As interest rates rise, so will the yield on the City's investment portfolio. The actual earnings for FY 2016 were $0.82 million, the budget for FY 2017 is $975,000, and the GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 85 GENERAL FUND OVERVIEW forecast for FY 2018 is $1.0 million. At its peak, in FY 2002, the General Fund earned $4.2 mil- lion in interest income, back then both the City's investment portfolio yield and the General Fund cash balances were substantially higher. RENTAL INCOME The largest source of rental income comes from the City's Enterprise Funds and the Cubberley Community Center. The FY 2018 budget of $15.6 million reflects a $555,000 increase from the FY 2017 Adopted Budget, or 3.7 percent increase. The FY 2017 Adopted Budget assumed a decrease due to a projected loss in rental income due to Foothill College's departure from Cub- berley. Staff actively pursued and recommend replacement tenants to offset this significant loss allowing the revenue estimate to be brought up to former levels. Slight annual rental increases for enterprise funded departments at General Fund properties are based on an assessment of these properties that was conducted in Fiscal Year 2015 adjusted annually for cost of living increases. CHARGES TO OTHER FUNDS This revenue category is the reimbursement received by the General Fund for the provision of administrative and other services to Enterprise and Internal Service Funds. The General Fund charges these funds for legal, human resources, finance, and general administration services based on cost allocations from the last completed fiscal year. Total administrative cost plan charges increased by $310,000 or 2.9 percent from the Fiscal Year 2017 Adopted Budget level of $10.8 million to the Fiscal Year 2018 Budget of $11.1 million. OTHER REVENUES This revenue category is mainly comprised of Animal Services revenue from neighboring cities; the Palo Alto Unified School District's (PAUSD) share of maintenance for athletic fields: and other one-time revenue sources such as grants. Compared to the Fiscal Year 2017 Adopted Budget of $1.4 million, other revenues are $238,000 lower in the Fiscal Year 2018 Budget at $1.2 million mainly due a realignment of base revenue estimates and historical activity levels. OPERATING TRANSFERS -IN In comparison to the Fiscal Year 2017 Adopted Budget transfer -in amount of $20.0 million, the Fiscal Year 2018 Budget amount of $20.8 million represents an increase of $744,484 due to adjustments to the equity transfer from the Enterprise Funds. The largest component of this revenue category is the $19.5 million equity transfer from the Enterprise Funds. The equity transfer represents the return on the initial investment the City made when the Utility Depart- ment was created more than 100 years ago. In accordance with a methodology approved by Council in June 2009, the equity transfer is calculated by applying a rate of return to the capital asset base of the Electric and Gas Funds. The rate of return is based on PG&E's rate of return on equity as approved by the California Public Utilities Commission (CPUC). EXPENSES Fiscal Year 2018 Budget expenditures amount to $210.4 million for the General Fund, an increase of approximately $16.3 million, or 8.4 percent, compared to the Fiscal Year 2017 Adopted Budget of $194.1 million. Details of major expenditure categories are discussed below. 86 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW SALARY AND BENEFITS Salary and benefit costs in the General Fund for Fiscal Year 2018 total $125.6 million, a $9.2 mil- lion or 7.9 percent increase compared to the Fiscal Year 2017 Adopted Budget of $116.4 million. The main reasons for the increase in salary and benefits costs are increased salaries and City CaIPERS contributions for pensions, along with slightly increased healthcare costs. As a result of previous years' cost containment strategies, the City found that salaries of City of Palo Alto employees, primarily public safety employees, had fallen behind. On April 11, 2016, the City Council approved City Managers' Report #6789 Adoption of MOA for PMA, POA, SEIU, and IAFF with additional changes approved on March 27, 2017 for FCA. The ongoing implications of those MOAs are included in this budget. It is the City's desire to retain and attract a talented workforce; therefore, this budget includes salary and benefits increases to continue to adjust employees' salaries relative to the market over the next few years. Salaries of $74.8 million bud- geted in 2017-2018 reflect a 5.8% increase from 2016-2017 levels of $70.7 million. In addition, CaIPERS has increased its pension rates as a result of decreased confidence in the rate of return and the performance of its investment portfolio. Although the actuarial analysis that informs the FY 2018 budget does not yet factor impacts in the decrease in the rate of return from 7.5% to 7.0%, which will be phased in over three years beginning in 2018-2019, the rate for both the safety plan and the miscellaneous plan increased. The Safety Plan rate increased by 4.19 percent, from 45.5 percent to 49.69 percent. The Miscellaneous plan increased by 1.3 percent, from 28.9 percent to 30.2 percent. When those increases are compounded by the growth in salaries, pension costs increase by $2.12 million to $23.32 million from the Fiscal Year 2017 level of $21.2 million. That increase represents an 11.4% increase. The City has anticipated these increasing pension costs and actively sought strategies to address this growing liability. The FY 2018 Budget does contemplate that employees will pick up a portion of the employer share of pension contributions as agreed to in the most recent round of labor negotiations, an important cost containment strategy. Miscellaneous employees in the General Fund will pick up 1.0 percent by July 1, 2018 and Public Safety employees will pick up 3.0 percent by July 1, 2018. Additionally, the City has established an irrevocable IRS Section 115 Pension Trust Fund in order to proactively contribute funding that can be used to supple- ment the City's retirement contributions in order to minimize the risk of volatility to the City in the future. Additional details of this can be found in the Employee Information section of this document. Lastly, heath costs, including vision and dental, are anticipated to increase by $500,000, or 3.75 percent, from $13.3 million to $13.8 million. The FY 2018 Budget continues the methodology established in the prior year for budgeting sal- aries and benefits. This methodology represents the agreed upon terms for memorandums of agreement; the respective costs for those terms are budgeted directly in departmental sections. It is important to note that when looking at the budget section for a department, there may be a significant increase from Fiscal Year 2016 actuals to Fiscal Year 2017 Adopted Budget. This is to be expected, as the actual expenses for a department are a function of vacancies and costs actually incurred, while the Budget presumes a lower vacancy rate. Anticipated General Fund vacancy savings totaling $2.2 million are spread across departmental appropriations based on an analysis of historical vacancy trends. GENERAL FUND OVERVIEW • c ITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 87 GENERAL FUND OVERVIEW The costs of Other Benefits also increased significantly; in FY 2017, $2.1 million was budgeted for Other Benefits, while in FY 2018 $4.7 million is budgeted. This reflects the reversal of one-time reductions in the Workers' Compensation and General Liability Internal Service funds that were used in FY 2017 as a temporary budget balancing strategy. The allocated charges budgeted in City departments various funds and the corresponding transfers into the internal service funds were frozen since sufficient fund balance had been maintained in the internal service funds to support the work of those funds. The allocations were reinstated in FY 2018 to ensure that the levels necessary to fund the ongoing expenses can be sustained. NON -DEPARTMENTAL EXPENSES Non -departmental appropriations include expenses that are not directly related to the opera- tion of a particular department such as payments to the Palo Alto Unified School District (PAUSD) as part of the Cubberley Community Center lease or debt service. As a result of nego- tiations with PAUSD, $1.9 million will be transferred annually from the General Fund to the Cub- berley Infrastructure Fund for infrastructure improvements. This amount is included in the Operating Transfers Out discussion below. A transfer from the General Fund to reimburse the Electric Fund for electricity costs associated with City streetlight and traffic signal costs in the amount of $2.3 million was first approved by the City Council as part of the FY 2017 Adopted Budget. As part of the Electric Fund Cost of Services Analysis (COSA), these costs were identified as more appropriately aligned with the General Fund. This transfer was evaluated and an increase of $130,000 is recommended as part of the FY 2018 Budget. CONTINGENCY ACCOUNTS Contingency accounts are budgeted appropriations that are used at the discretion of the City Council, City Manager, City Attorney, or Chief People Officer to fund unanticipated expenses. As part of the 2017-2018 Budget, the City Council contingency will be reduced from $250,000 to $225,000 to help close the budgetary gap between revenues and expenses. The City Council approves any use of the City Council contingency the City Manager has to approve any use of any other contingency. The Fiscal Year 2018 Budget includes $811,000 in these accounts. OPERATING TRANSFERS OUT Funds are transferred to the Capital Infrastructure, Cubberley Infrastructure, Debt Service, and Technology Internal Service Funds on an annual basis. In Fiscal Year 2018, $26.7 million is pro- grammed to be transferred into these funds. In addition, $200,000 will be transferred to the Airport fund as part of a multi -year loan, $173,000 will be transferred to the University Avenue Parking District, $155,000 will be transferred to the Public Art Fund, and $75,000 will be trans- ferred to the California Avenue Parking District Fund. Additionally, a $2.5 million transfer to the Electric Fund is budgeted as a result of the electricity costs associated with streetlights and traffic signals. Transfers out of the General Fund in Fiscal Year 2018 total $29.6 million, repre- senting a $5.9 million increase. That increase is primarily due to the reversal of a one-time reduction in the FY 2017 base General Fund transfer to the General Capital Fund. 88 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW RESERVES The City's general reserve is referred to as the Budget Stabilization Reserve, or BSR. By policy, the City maintains a reserve level of 15-20 percent of the General Fund operating budget, with a targeted goal of 18.5 percent. City Council approval is required prior to setting reserves lower than 15 percent. The City Manager is authorized, at his/her discretion, to transfer any amount in excess of 18.5 percent to the Capital Projects Infrastructure Reserve. At this time, staff projects the FY 2017 Budget Stabilization Reserve (BSR) to end the year at approximately $42.3 million, or 20.7 percent of the FY 2017 Modified Budget expenditure levels. The Fiscal Year 2018 Budget is projected to have a $38.9 million BSR balance, or 18.5 percent of the Fiscal Year 2018 General Fund expenditure budget once adjusted for the recommended use of $3.4 million. A one-time use of this reserve is recommended however, both FY 2019 and 2020 are anticipated to have slight surpluses. The projected balance of $38.9 million, or 18.5% of the FY 2018 Budget expenses of $210.4 million is at the City Council target level of 18.5%. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 89 GENERAL FUND OVERVIEW General Fund Budget Stabilization Reserve (BSR) Activity: BSR Other Reserve Activityl Human Services Resource Allocation Process (HSRAP) Reserve Encumbrance & Reappropriation Inventory of Materials & Supplies Notes Receivable, Prepaid Items, Interfund Advances, & Unrealized Gains and Losses Total Reserves Reserves FY 2016 Actuals 51,582 6,195 4,364 4,790 ail FY 2017 Adopted Changes mIL FY 2017 Net Adjustments 162 (9,426) 42,318 (3,384) 38,934 Projected FY 2017 Year -End 50 6,195 4,364 4,790 Projected FY 2018 Adopted Budget Projected FY 2018 Year -End 50 6,195 4,364 4,790 (9,426) I 57,717 (3,384) I 54,333 1. The BSR is projected to be 18.6 percent of the FY 2018 Adopted Expense Budget at the end of FY 2018. 2. City reserve policy indicates a 15-20 percent range, with an 18.5 percent target. 3. Minimum FY 2018 BSR $31.5 million (15 percent); Maximum FY 2018 BSR $42.0 million (20 percent). 4. Target FY 2018 BSR $38.9 million (18.5 percent). 5. Projected FY 2017 BAOs assumes City Council approved budget adjustments through February 2017. This includes a$2.1 million transfer for the establishment of an irrevocable IRS Section 115 Pension Trust Fund; funds were previously reserved in the BSR as approved by the City Council in the FY 2016 Year End Review and FY 2017 Adopted Budget. 6. This assumes the Human Services Resource Allocation Process Reserve will not be spent in FY 2017 and is recommended to be carried forward to FY 2018. General Fund Revenue Descriptions PROPERTY TAX Under current law, all taxable real and personal property is subject to a basic tax rate of one percent of assessed value collected by local jurisdictions and school districts for general service purposes. There are other taxes and levies on a typical property tax bill such as parcel, General Obligation bond, and special assessments. On June 6, 1978, California voters approved Proposition 13, a seminal change in property tax levies. The proposition, which added Article XIII A to the state constitution, placed limits on increases in the valuation of real property. The major change was that the assessed value of real property could only be adjusted upward annually by the change in the California Consumer Price Index (CCPI) up to a maximum of two percent per year. One exception to this rule, how- ever, is that when property changes ownership and/or is substantially altered or newly -con- structed, it would be reassessed at full market value in the first year and then subject to the CCPI or two percent cap thereafter. 90 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW Another important exception to the formula for increasing assessed valuations and taxes is that during periods of declining property values (e.g., recessions), the County Assessor has the flexi- bility to decrease assessments whether through appeal by property owners or through the Assessor's analysis of value declines. In effect, this reduces the property valuation and tax. As market conditions improve, however, and values return or increase, the Assessor can then increase assessed values and taxes. In following years, another amendment to the constitution was passed that allows local govern- ments and school districts to raise property taxes above one percent to finance general obliga- tion (GO) bond sales. This change has to be approved by two-thirds of those voting in a local GO bond election. For school districts, however, the voting threshold for approving GO bonds was subsequently lowered to fifty-five percent. Dating back to the early 1990s, the state has made numerous and complex adjustments to local jurisdiction property tax revenues to solve its budget shortfalls. In one such action in 1992, which is known as the "Educational Revenue Augmentation Funds (ERAF), the state shifted mil- lions of dollars in local government funds to school districts. As a consequence of this action the City of Palo Alto has foregone a cumulative $110 million through Fiscal Year 2017 limiting its ability to meet its infrastructure needs. The County of Santa Clara administers and collects property taxes and remits the appropriate amounts (based on law and a complex formula) to local jurisdictions. Contrary to commonly held views, the City receives a relatively small portion of the basic one percent property tax. In fact, the City receives around 9 percent or 9 cents for every property tax dollar a property owner pays to the county. The majority of the tax dollar paid or 57 percent goes to the school district, 15 percent goes to the county, and the remaining goes to special districts and to the State. SALES AND USE TAX The Sales Tax is a tax imposed on retailers for the privilege of selling tangible personal property such as clothing, automobiles, and computers. Currently, and according to State law, sales tax is not applied to personal services such as legal, dental, or consultant services. The Use Tax is a form of sales tax and is applied, for example, on the sale of tangible goods from an out-of-state vendor. The City receives a specific portion or percentage of the sales tax paid by a consumer. Of the current 9 percent tax rate paid for goods sold within Palo Alto, the City receives 1.0 percent point of the purchase price or 11,8 percent for each tax dollar paid. The remaining sales tax dol- lars are distributed as follows: State of California (5.75 percentage points), Santa Clara County (0.125 percentage point), Santa Clara Valley Transportation Districts (1.625 percentage point), and the Public Safety Fund (0.5 percentage point). Sales tax rates may differ across jurisdictions since local jurisdictions have some flexibility on a countywide level (e.g. county or city) to increase the local portion of the sales tax with voter approval. The local Sales and Use Tax is collected and administered by the State Board of Equalization. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 91 GENERAL FUND OVERVIEW TRANSIENT OCCUPANCY TAX The Transient Occupancy Tax rate in Palo Alto is 14 percent and is applied to the daily rate charged by a hotel, motel, and lodging establishment. The rate only applies to stays of 30 days or less. In November 2014, Palo Alto voters approved increasing the tax rate from 12 percent to 14 percent. The rate increase was effective as of January 1, 2015. DOCUMENTARY TRANSFER TAX This tax is applied to the sale of real property within Palo Alto at the time property ownership is transferred. The current rate is $3.30 per thousand dollars of sale value. A house that sells for $1.5 million, for example, would result in the City collecting $4,950. This tax is collected by Santa Clara County and then remitted to the City. The county also levies a transfer tax of $1.10 per thousand dollars of sales value that is in addition to Palo Alto's tax. UTILITY USERS TAX The Utility Users Tax is charged to all users of electricity, gas, water, and telephone services. The current tax rate is for electricity, gas, and water is 5 percent and for telephone is 4.75 percent. In November 2014, Palo Alto voters approved decreasing the telephone utility user tax rate from 5 percent to 4.75 percent. This tax decrease became effective on April 1, 2015 due to Public Utility Commission advance noticing requirements. OTHER TAXES AND FINES The largest source of revenue in this category is derived from parking violations revenue. Other revenue items in this category include traffic violations, administrative citations, and library fines and fees. CHARGES FOR SERVICES Departmental charges are comprised of fees charged for services which are primarily provided by the following departments: Community Services, Development Services, Planning and Com- munity Environment, Police, and Public Works. Charges for Services from departments are approved annually by the City Council through the adoption of the Municipal Fee Schedule. The City has two separate agreements with Stanford University to provide Fire Response ser- vices and Dispatch services. As part of these agreements to reimburse the City for Stanford's proportional share of these services, Stanford is charged 16 percent of the Police Department's Communication and Dispatch Division. The Stanford contract for Fire Services is currently under negotiation. PERMITS AND LICENSES The City requires payment for the issuance of Building Permits, Fire Permits, and miscellaneous health and safety -related licenses and permits as approved annually by the City Council through the adoption of the Municipal Fee Schedule. RETURN ON INVESTMENT The City invests idle funds in order to earn interest. The total income varies with the market rates of interest and the funds available to invest. The basic principles underlying Palo Alto's investment philosophy is to ensure the safety of public funds; provide that sufficient money is 92 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW always available to meet current expenditures; and achieve a reasonable rate of return on its investments. RENTAL INCOME The General Fund charges rent to internal and external entities. The majority of rental income is derived from the Enterprise Funds and the Cubberley Community Center. REVENUE FROM OTHER AGENCIES This revenue category includes revenue received from a variety of other local government agen- cies, the state, and the federal government usually due to grants or contracts for services. CHARGES TO OTHER FUNDS The General Fund recuperates the cost for services provided by internal services departments such as Administrative Services, Council Appointees, and People Strategy and Operations to Enterprise, Internal, and Special Revenue funds through allocated charges. OTHER REVENUE Major revenue sources in this category are Animal Services charges to Los Altos and Los Altos Hills, reimbursements from PAUSD for its share of Cubberley and athletic field maintenance, donations from non -profits for City libraries, and miscellaneous revenues. OPERATING TRANSFERS -IN Operating Transfers include the equity transfer from the Electric and Gas Funds. In accordance with a methodology approved by Council in June 2009, the equity transfer is calculated by applying a rate of return to the capital asset base of the Electric and Gas Funds. This rate of return is based on PG&E's rate of return on equity as approved by the California Public Utilities Commission (CPUC). GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 93 GENERAL FUND OVERVIEW General Fund Revenue by Category FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ Sales Taxes 29,675 30,018 29,150 31,458 2,308 Property Taxes 34,117 36,607 38,953 41,927 2,974 Transient Occupancy Tax 16,699 22,366 23,134 25,143 2,009 Documentary Transfer Tax 10,051 6,266 6,747 6,930 183 Utility Users Tax 10,861 12,469 12,379 13,867 1,488 Other Taxes and Fines 1,899 2,238 2,022 2,060 38 Charges for Services 25,409 23,562 25,282 26,497 1,215 Permits and Licenses 7,621 8,263 8,756 8,837 81 Return on Investments 1,118 1,037 975 1,024 49 Rental Income 14,911 15,842 15,021 15,575 554 From Other Agencies 1,555 719 441 688 247 Charges to Other Funds 10,416 11,576 10,766 11,076 310 Other Revenue 3,095 4,899 1,406 1,169 (237) Subtotal 167,427 175,862 175,032 186,251 11,219 Operating Transfers -In 17,796 18,317 20,046 20,791 745 Total 185,223 194,179 195,078 207,042 11,964 FY 2018 Change % 7.9% 7.6% 8.7% 2.7% 12.0% 1.9% 4.8% 0.9% 5.0% 3.7% 56.0% 2.9% (16.9)% 6.4% 3.7% 6.1% 94 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Revenue by Category 3 Year Trend - General Fund Revenues By Category ($000s) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 111 IL ... III ill ... m __ ey e' a+ a+ a+ e`' e`' e, <7 e e' a5 .)e \o `a+ a+ �eJ e6 ye` �6 he.c �`Ge, y��e� \\�c2 �q5 e=< ' �e ea may, ha\,<Z, ova G09 ,`tam \ `� eya koc 2. e, ��,e ems_ reiP per rec eta Qc pe La�� J�� i a+ e' • o� Q p` Sao p� •\��O CCs �`a�<7\• eo o`�tc` Ogre pc2)..k° (2 �eS < ° Crate pieta O ■ FY 2016 Actuals r FY 2017 Adopted ■ FY 2018 Adopted $210.4 Million/FY 2018 Adopted Budget Stabilization Reserve Operating Transfers In 9.9% Other Revenue 0.6% Charges to Other Funds 5.3% From Other Agencies 0.3% Rental Income 7.4% Return on Investments 0.5% Permits and Licenses 4.2% Charges for Services 12.6% Other Taxes and Fines 1.0% 1.6% Utility Users Tax 6.6% Sales Taxes 14.9% Documentary Transfer Tax 3.3% Property Taxes 19.9% Transient Occupancy Tax 11.9% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 95 GENERAL FUND OVERVIEW General Fund Revenue by Category 10 Year Trend - Top General Fund Revenues (Millions) $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 2908 2909 2010 2011 2012 2013 2014 2015 2016 2017 2018 ■.Property Tax • Sales Tax • Charges for Services ■ Rental Income • Utility User's Tax • Documentary Transfer Tax 96 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Expenditures by Department Administrative Services City Attorney City Auditor City Clerk City Council City Manager Community Services Development Services Fire Human Resources Library Non -Departmental Office of Emergency Services Office of Sustainability Planning and Community Environment FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget 7,133 7,497 7,798 7,983 2,586 2,796 3,179 3,356 1,100 1,112 1,221 1,301 1,079 1,001 1,370 1,374 361 430 501 500 2,365 3,097 2,882 3,158 23,042 24,272 25,390 27,560 9,893 10,665 12,169 12,540 26,191 27,553 28,947 31,774 3,263 3,559 3,357 3,757 7,980 7,960 8,992 9,447 7,296 6,235 10,139 8,435 1,169 1,044 971 1,039 496 495 499 524 25 FY 2018 Change $ 185 177 80 4 (1) 276 2,170 371 2,827 400 455 (1,704) 68 FY 2018 Change % 2.4% 5.6% 6.6% 0.3% (0.2)% 9.6% 8.5% 3.0% 9.8% 11.9% 5.1% (16.8)% 7.0% 5.0% 7,434 8,880 8,768 8,452 (316) (3.6)% Police 34,559 35,666 38,137 42,333 4,196 11.0% Public Works 13,274 14,326 16,224 17,005 781 4.8% Subtotal 149,221 156,588 170,544 180,538 9,994 5.9% Transfer to Infrastructure 19,678 29,366 18,486 24,981 6,495 35.1% Operating Transfers -Out 2,606 5,095 5,136 4,908 (228) (4.4)% Total 171,505 191,049 194,166 210,427 16,261 8.4% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 97 GENERAL FUND OVERVIEW General Fund Expenditures by Category FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Salary & Benefits 102,531 Contract Services 14,919 Supplies & Material 3,844 General Expense 10,314 Debt Service 428 Rents & Leases 1,319 Facilities & Equipment 414 Allocated Charges 15,452 Subtotal 149,221 Transfer to Infrastructure 19,678 Operating Transfers -Out 2,606 Total 171,505 106,185 116,394 125,623 9,229 7.9% 17,803 17,539 18,984 1,445 8.2% 3,771 3,835 3,544 (291) (7.6)% 3 (1,618) (11.9)% 431 432 432 - 0.0% 37 2.4% 537 511 517 6 1.2% 1,185 7.1% 156,588 170,544 180,537 9,993 5.9% 29,366 18,486 24,981 6,495 35.1% 5,095 5,136 4,908 (228) (4.4)% 191,049 194,166 210,426 16,260 8.4% 9,568 13,551 11,93 1,537 1,530 1,567 16,756 16,752 17,937 98 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Expenditures by Category 3 Year Trend - General Fund Expenses By Category ($000s) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 ■1I 1 , III c, t-4‘ t • �ee� t`a\z eye e,<4. oe aa., �¢�� ata°ay ,te• emote O�c �e `ne ae +fie c.c.' �`� Lr t„ss KS �ety \at�q} ��ta`� a�a4` �eta� 0 e��� o GaK., \��ta5 �ia�5 Sa Lo �`eS Oe •Q \•e5 Pao two . % C:, Fay\ �`'e eta ,ta OQ ■ FY 2016 Actuals • FY 2017 Adopted ■ FY 2018 Adopted $210.4 Million/FY 2018 Adopted Transfers 14.2% Allocated Charges 8.5% Facilities & Equipment 0.2% Rents & Leases 0.7% Debt Service 0.2% General Expense 5.7% Supplies and Materials 1.7% Contract Services 9.0% Salary & Benefits 59.7% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 99 100 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 101 CITY OF PALO ALTO ENTERPRISE FUNDS OVERVIEW Overview The City of Palo Alto's utility and public works operations are comprised of the Airport, Electric, Fiber Optics, Gas, Refuse, Storm Drainage, Wastewater Collection, Wastewater Treatment, and Water Funds. A financial summary of the funds follows this overview along with discussion and pertinent information in each fund section. REVENUES The total budgeted revenue of the Enterprise Funds for Fiscal Year 2018 is $367.5 million, which is $21.2 million, or 6.1 percent, higher than Fiscal Year 2017. Similar to prior years, this increase is largely attributable to higher net sales revenue based on planned rate increases, as well as oper- ating transfers in revenues for capital projects. Utility services with rate increases for FY 2018 include Electric, Fiber Optics, Gas, Refuse, Storm Drainage, and Water, with a varying degree of increases. Electric rates are scheduled to increase the most at 14% and 12% for non-residential and residential customers, respectively. This increase in electric rates is anticipated to result in approximately $4.1 million in additional revenue. Wastewater Collection rates will remain the same for FY 2018. EXPENDITURES The total budgeted expenditure of the Enterprise Funds for FY 2018 is $398.1 million, which is $2.4 million, or 0.6 percent, lower than FY 2017. Compared to FY 2017, Capital Improvement Program (CIP) costs are decreasing approximately $8.3 million; however, this decrease is offset by increases in other areas, including approximately $10.8 million in Utility Purchase costs based on market adjustment commodity costs, approximately $3.4 million increase in salaries and benefits for medical contributions and other benefits adjustments, an increase of $1.3 million for contract services, and an increase of $0.7 million in the Equity Transfer amount. UTILITY RATE CHANGES FY 2018 Budget includes utility rate adjustments for Electric, Fiber Optics, Gas, Refuse, Storm Drainage, and Water charges. The median monthly residential utility bill is expected to increase by 2.5 percent or $6.79 from $271.60 to $278.39. In general, the size and timing of rate adjustments takes into account current and future reve- nue requirements and reserve levels. They may also cushion the impacts on customer bills by spreading rate adjustments during consecutive or alternate years. Electric Fund - Scheduled rate increase is up to 14.0 percent overall to fund rising transmission costs, new renewable projects coming online, and increased operating and capital costs to address deferred maintenance and capital replacement. The average ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 103 ENTERPRISE FUNDS OVERVIEW residential rate increase is 12.0 percent compared to 14.0 percent for non-residential customers. ▪ Gas Fund - Scheduled rate increase is 4.0 percent due to adoption of the Carbon Neutral Gas Plan, which is used by the City to purchase carbon offsets to neutralize emissions associated with natural gas usage. • Water Fund - Scheduled rate increase is up to 4.0 percent due to rising water supply costs, in particular the costs of water supplied by the San Francisco Public Utilities Commission (SFPUC), and reduced revenues from lowered water usage during the drought. However, with the removal of the drought surcharge, most residential water utility bills will decrease by approximately 2 to 4 percent, based on similar usage, even with the up to 4.0 percent rate increase. • Wastewater Collection Fund - No rate increase is scheduled for FY 2018. ▪ Fiber Optics Fund - Scheduled rate increase is 3.5 percent, based on Consumer Price Index (CPI) for All Urban Consumers in the San Francisco Bay Area, increase for customers on the EDF-1 rate. ▪ Storm Drainage Fund - An increase of $0.62 per Equivalent Residential Unit (ERU) per month was recently approved by property owners through a ballot measure in April 2017. This new Stormwater Management fee, which consists of a base component and a projects and infrastructure component, is set at $13.65 per ERU per month effective June 1, 2017. The projects and infrastructure component of this fee has a sunset date of June 1, 2032 unless extended through a subsequent ballot measure. ▪ Refuse Fund - No rate increase is scheduled for commercial customers. Scheduled rate increase for residential customers is 5.0 percent. This is the last year of a three year plan to increase rates to balance refuse revenues with costs. RENT Enterprise Funds pay market -based rental fees for the sites needed to conduct their business operations. The rent paid for City -owned sites was adjusted due to an independent appraisal of all sites, and an annual CPI increase of 3.2 percent was applied. As a result, the rent for FY 2018 will increase by approximately $0.3 million compared to FY 2017. EQUITY TRANSFERS In FY 2009, the Council adopted a change to the methodology, effective starting in FY 2010, used to calculate the equity transfer from Utilities Funds to General Fund. Under this methodol- ogy, the equity transfers are based on the asset base in the Electric and Gas Funds, along with the rate of return for each utility, which is based on Pacific Gas and Electric's (PG&E) rate of return on equity as approved by the California Public Utilities Commission (CPUC). For FY 2018, the equity transfers from the Electric and Gas Funds are projected to increase by approximately $0.7 million from $18.8 million in FY 2017 to $19.5 million. RESERVES The financial revenue and expense forecasts are estimates at a single point in time. Some Utili- ties Reserves serve as 'balancing accounts' which mitigate the risk of commodity price swings 104 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW and insure against default by the City's wholesale suppliers. Other Reserves are used to provide cash for replacement parts during an emergency infrastructure failure or serve as temporary 'parking' for planned expenditures. Reserve levels that are above guidelines are returned to customers in the form of lower future rates or used to pay for expenses, which also result in lower future rates. Based on a new practice established in FY 2016, the reappropriation of Capital budgets for con- tinuing projects previously approved and appropriated by the City Council in prior fiscal years is shown as expenditures in the operating budget for each Enterprise fund. The inclusion of these costs impacts the fund balance of the respective Enterprise Funds. To highlight this difference between the use of operating reserves and capital reappropriations, the capital reappropria- tions and their impact on fund reserves are reflected in the Capital Improvement Program Reserve line of the Enterprise Funds Reserve table. Based on the actions approved by the City Council, the total Enterprise Fund Reserve Balances are estimated to decrease by $30.6 million from FY 2017 to FY 2018. UTILITIES ENTERPRISE FUNDS The City of Palo Alto Utilities (CPAU) had to rely on its reserves more heavily over the past few years to offset rate increases. In order for CPAU to cover its operating costs while maintaining and continuing to provide safe and reliable utility services to customers, rate increases are pro- jected beyond FY 2018. Rate increases will ensure CPAU the ability to replenish depleted reserves and provide funding sufficient to provide for continued increasing expenses for com- modity costs and repair and replacement of the City's aging utility infrastructure through vari- ous capital projects. Electric FY 2018 electric rates are scheduled to increase up to 14.0 percent overall to recover costs for increasing transmission costs, new renewable projects coming online, substantial additional capital investment in the electric distribution system, and lower than projected sales. Beyond FY 2018, rates are projected to increase by 7.0 percent in FY 2019 before stabilizing to 1.0 per- cent increase annually through FY 2022. The average residential rate increase is approximately 12.0 percent compared to 14.0 percent for non-residential customers. The recent rate increase beginning in FY 2017 was the first in many years as this fund was heavily impacted by the drought. While long-term costs did not increase significantly from 2009 through 2016, the City drew down reserves in order to avoid any rate increases over those years. The primary reason for the recommended rate increase is not to replenish reserves, but to pay for long-term capital investment, operations and carbon neutral electric supply. Gas FY 2018 gas rates are scheduled to increase by 4.0 percent as a result of adoption of the Car- bon Neutral Gas Plan, even though there is no distribution -related gas rate change. In future years, CPAU anticipates that costs associated with the Carbon Neutral Gas Plan will change with the price of offsets and will be passed to customers. From FY 2018 through FY 2027, non - commodity costs are projected to increase approximately 3 to 4 percent annually. In the short term, some of these costs are related to the cross -bore inspection program, as well as cap -and - trade and carbon neutral allowance purchase costs. Capital project costs have increased as the ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 105 ENTERPRISE FUNDS OVERVIEW economy has improved, and while CPAU plans a new gas main replacement project every year, recent larger than expected bids have required resizing and redesigning of some of the existing projects, causing delays. As such, the next new main replacement project will take place in FY 2019. Water FY 2018 water utility rates are scheduled to increase by up to 4.0 percent due to rising water supply costs, in particular costs of the water supplied by SFPUC, which is issuing new debt to fund major improvements to its Hetch Hetchy transmission system, and reduced revenues from lowered water usage during the drought. The main driver for the increase over the next several years is the escalating cost of wholesale water. Wholesale water costs, adopted by SFPUC, generally change annually. In FY 2017, the SFPUC's wholesale rate rose by 9.0 percent. From FY 2018 through 2027, the cost of water is projected to rise by 2.0 to 3.0 percent annually. Beginning in FY 2018, the drought surcharge is going to be lifted due to changes in hydrologic conditions this winter. By removing the drought surcharge, most residential water utility bills will decrease by approximately 2 to 4 percent, based on similar usage, even with the up to 4.0 percent rate increase. Wastewater Collection FY 2018 wastewater collection rates remain unchanged. However, CPAU anticipates treatment costs to rise substantially over the forecast period due to increasing operating costs and capital replacement needs at the Regional Water Quality Control Plant. In addition, capital and operat- ing costs are anticipated to gradually increase for the wastewater collection system. As a result, rate increases of 7.0 percent are projected for FY 2019 through 2023. Fiber Optics Fiber optics rates are scheduled to increase by 3.5 percent for customers on the EDF-1 rate schedule in FY 2018. CPAU provides commercial dark fiber optic services within the boundaries of the City. In September 2006, Council approved the Dark Fiber Licensing Agreement allowing the commercial fiber optic fees charged under the EDF-1 and EDF-2 rate schedules to be adjusted annually in accordance with CPI. EDF-1 was a promotional rate and was closed to new Dark Fiber licenses in 2006. Customer expenses for engineering, construction and connection to the fiber optic backbone are charged under the EDF-2 rates. New fiber customers are enrolled under the Dark Fiber Licensing Services Rate Schedule EDF-3. As CPI increases are implemented for the EDF-I rate, some customers may voluntarily choose to move from the EDF-I rate to the EDF-3 rate for cost saving purposes. PUBLIC WORKS ENTERPRISE FUNDS Refuse FY 2018 refuse rates are scheduled to increase by 5.0 percent for residential customers only. This is the last year of a three year plan to increase rates to balance refuse revenues with costs. Under the City's Zero Waste goals, residential and commercial communities can benefit from local sustainable material management and reduce waste sent to landfills. The Refuse Fund works with the City's communities and continues making progress on Zero Waste goals to divert 90 percent or more waste from landfills by FY 2021. Through a combination of commu- 106 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW nity outreach, educational strategies and policy, the City can accomplish initiatives to divert over 2,500 tons of food scraps from residential garbage and 4,000 tons of food scraps from commercial garbage to beneficial use. Initially the Zero Waste program impacted the Fund negatively by loss of incoming revenue based on the amount of refuse collected and closure costs associated with the City's landfill. However, adjustments to refuse rates along with reduc- tions in expenditures have stabilized the Refuse Fund. Storm Drain An increase of $0.62 per ERU per month was recently approved by property owners through a ballot measure in April 2017. This new Stormwater Management fee is set at $13.65 per ERU per month effective June 1, 2017. The projects and infrastructure component of this fee has a sunset date of June 1, 2032 unless extended through a subsequent ballot measure. The Storm Drain- age fund maintains activities that ensure adequate local drainage of the City's storm drainage system. This fund also provides litter reduction, urban pollution prevention programs and flood- ing emergency response services with the goals of reducing storm water runoff and maintain- ing storm water quality protection for discharge to creeks and the San Francisco Bay. Wastewater Treatment The City's Regional Water Quality Control Plan serves six communities including Palo Alto, East Palo Alto, Mountain View, Stanford, Los Altos and Los Altos Hills. The Wastewater Treatment fund works with the City and Partner Cities' regional service area to protect the environment and the public's health while ensuring compliance with regulations protecting the San Francisco Bay and the environment. FY 2018 revenues in the Wastewater Treatment Fund are expected to increase by $13.5 million or 27.8 percent, compared to FY 2017. The majority of the increase resulted from State Revolving Fund Loans for programmed FY 2018 - 2022 capital improvement expenditures and partner revenue increases outlined in the Wastewater Treatment Fund section of the Public Works Department. Airport The Palo Alto airport ranks among the busiest general aviation airports in the country, and the City assumed airport operations from Santa Clara County in August of 2014. Under previous terms, the County exercised the right to sublease to Fixed Base Operators (FBOs) with agree- ments that expired in April 2017. The City has been working with the FBOs to sign new lease agreements and as a result, Airport fund revenues are projected to increase from rental income. Expenses are also projected to increase for maintenance and cleaning responsibilities that were assumed from the FBOs. In addition to the impact from lease expirations with FBOs, the airport is undergoing major construction projects with its costs partially offset by Federal Aviation Grants. To ensure sufficient funding for operating costs and ensure continued services with minimal service delivery impact, the Airport fund will receive a $0.2 million loan from the Gen- eral Fund for FY 2018 for a total loan of $3.1 million from the General Fund since the City took over operations. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 107 ENTERPRISE FUNDS OVERVIEW Enterprise Funds Summary Fund Summary ($000) Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Rental Income Return on Investments Total Expenses Allocated Charges 9,121 3,938 4,410 1,866 6,320 2,608 1,428 538 617 30,846 Contract Services 6,850 1,446 828 6,881 2,305 248 905 147 458 20,068 Debt Service 8,782 803 3,223 156 1,469 129 949 15,510 Equity Transfer 12,754 6,733 - - - - - - - 19,487 Facilities & 44 20 2 3 8 3 8 - - 87 Equipment General Expense 3,380 780 666 112 505 122 149 30 14 5,759 Operating 401 900 649 62 206 393 27 10 123 2,771 Transfers -Out Rents & Leases 5,603 729 2,932 2,303 - 400 47 12 77 12,102 Salary&Benefits 15,479 6,441 6,950 2,896 12,191 2,782 1,896 718 1,194 50,547 Supplies & 871 497 610 143 2,051 386 95 56 9 4,718 Material Utility Purchase 91,705 15,587 21,090 16,253 - 9,916 - 154,550 Capital Improvement 21,176 6,053 6,127 37,988 2,188 805 5,672 1,653 81,662 Program Total 176,167 43,926 47,487 30,675 63,042 19,174 6,310 7,183 4,144 398,107 Electric Fund 230 309 136,139 3,465 11,029 2,508 153,680 Gas Fund 20 96 34,740 1,061 526 36,443 Water Fund 10 84 577 40,914 512 904 775 43,777 Refuse Fund 34 211 29,360 2,546 179 32,329 Waste- water Treatment Fund 52 34,110 27,140 427 4 188 61,920 Waste- water Collection Fund 10 30 17,957 1,058 267 19,322 Storm Drainage Fund 118 6,928 3 130 7,178 Airport Fund 4,860 645 200 15 1,680 2 7,402 Fiber Optics Fund 4,891 200 366 5,457 Total 422 781 39,547 298,713 4,178 17,240 7 1,680 4,940 367,506 108 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS REVENUES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 R mini ir Electric Gas Fund Water Fund Refuse Fund Fund --- WW WW Storm Airport Fiber Optics Treatment Collection Drainage Fund Fund Fund Fund Fund FY 2016 Actuals FY 2017 Adopted FY 2018 Adopted FY 2018 ADOPTED/$367.5 MILLION Electric Fund $153.68/41.8% Fiber Optics Fund $5.46/1.5% Airport Fund $7.4/2% Storm Drainage Fund $7.18/2% WW Collection Fund $19.32/5.3% Gas Fund $36.44/9.9% Water Fund $43.78/11.9% Refuse Fund $32.33/8.8% WW Treatment Fund $61.92/16.8% ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 109 ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS EXPENSES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 _I' __ Electric Gas Fund Water Refuse WW WW Storm Airport Fiber Fund Fund Fund Treatment Collection Drainage Fund Optics Fund Fund Fund Fund FY 2016 Actuals FY 2017 Adopted FY 2018 Adopted Electric Fund $176.17/44.3% Fiber Optics Fund $4.14/1% Airport Fund $7.18/1.8% Storm Drainage Fund $6.31/1.6% FY 2018 ADOPTED/$398.1 MILLION WW Collection Fund $19.17/4.8% Gas Fund $43.93/11% Water Fund $47.49/11.9% Refuse Fund $30.68/7.7% WW Treatment Fund $63.04/15.8% 110 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Electric Fund Supply Rate Stabilization Operations Hydro Stabilization Electric Special Projects Public Benefit Underground Loan Capital Improvement Projects GASB 68 Pension Reserve Subtotal FY 2017 Projected Ending Balance 3,600 25,347 2,400 41,665 1,331 729 16,071 (27,284) 63,859 (22,487) 41,372 FY 2018 Changes (3,600) 46 (2,400) 0 (150) 0 (16,383) 0 FY 2018 Projected Ending Balance FY 2018 Reserve Guideline Range 0 25,393 25,438 - 50,876 0 41,665 1,181 729 (312) (27,284) Gas Fund Rate Stabilization 6,018 0 Operations 9,873 (2,547) Capital Improvement Projects 8,940 (4,936) GASB 68 Pension Reserve (12,365) 0 Subtotal 12,466 (7,483) 4,983 6,018 7,326 6,215 - 12,429 4,004 (12,365) Wastewater Collection Fund Rate Stabilization 342 Operations 5,285 Capital Improvement Projects 4,468 GASB 68 Pension Reserve (6,950) 0 342 1,881 7,166 (1,733) 2,735 0 (6,950) 2,779 - 5,559 Subtotal 3,145 148 3,293 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 111 ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Water Fund Reserves ($000) FY 2017 Projected Ending Balance Rate Stabilization Operations Capital Improvement Projects GASB 68 Pension Reserve Subtotal 1,877 20,856 9,528 (11,609) 20,652 FY 2018 Changes 0 1,212 (4,922) 0 FY 2018 Projected Ending Balance 1,877 22,068 4,606 (11, 609) (3,710) 16,942 FY 2018 Reserve Guideline Range 6,787 - 13,573 Refuse Fund Rate Stabilization Landfill Corrective Action Reserve Capital Improvement Projects GASB 68 Pension Reserve Subtotal 6,807 719 (17) (4,892) 2,617 1,654 0 0 0 8,461 719 (17) (4,892) 1,654 4,271 5,044 - 10,089 Storm Drainage Fund Rate Stabilization Capital Improvement Projects GASB 68 Pension Reserve Subtotal 16,708 3,161 (2,923) 16,946 1,658 18,366 (790) 2,371 0 (2,923) 868 17,814 Wastewater Treatment Fund Emergency Plant Replacement Rate Stabilization Capital Improvement Projects GASB 68 Pension Reserve Subtotal 1,980 13,581 16,892 (17,529) 14,924 0 2,746 (3,868) 0 1,980 1,936 (max.) 16,327 13,024 (17, 529) (1,122) 13,802 4,175- 8,350 Fiber Optics Fund Emergency Plant Replacement 1,000 0 Rate Stabilization 24,329 2,763 27,092 Capital Improvement Projects 1,185 (1,450) GASB 68 Pension Reserve (1,687) 0 (1,687) Subtotal 24,827 1,313 26,140 1,000 (265) 1,000 (min.) 664 - 1,329 112 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Airport Fund Fund Reserves Capital Improvement Projects GASB 68 Pension Reserve Subtotal FY 2017 Projected Ending Balance (1,902) (315) (361) (2,578) 219 (2,359) FY 2018 Changes FY 2018 Projected Ending Balance 1,026 (807) 0 (876) (1,122) (361) FY 2018 Reserve Guideline Range TOTAL RESERVES 156,857 (30,600) 126,257 Summary of Reserves Emergency Plant Replacement 2,980 Rate Stabilization 75,661 Operations 61,361 Capital 59,913 Electric Special Projects 41,665 Public Benefit 1,331 Underground Loan 729 Landfill Corrective Action Reserve 719 Fund Reserves (1,902) GASB 68 Pension Reserve (85,600) 0 2,821 592 (34, 889) 0 (150) 0 0 1,026 0 2,980 78,482 61,953 25,024 41,665 1,181 729 719 (876) (85,600) TOTAL RESERVES 156,857 (30,600) Landfill Closure and Postclosure Care Liability TOTAL RESERVES AND FULLY - FUNDED LIABILITY 10,997 167,854 0 10,997 (30,600) 137,254 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 113 ENTERPRISE FUNDS OVERVIEW Residential Monthly Utility Cost Information Utility Electric Water Gas Wastewater Refuse Storm Drain User Tax Total Monthly Bill Adjusted FY 2017 Bill Adopted FY 2018 Bill Difference o� Difference 46.79 51.82 5.03 10.8% 84.27 (2.97) (3.4)% 33.64 35.19 1.55 4.6% 34.83 0.00 0.0% 47.69 50.07 2.38 5.0% 13.65 0.62 4.8% 8.38 8.56 0.18 2.1% 271.60 278.39 6.79 2.5% 87.24 34.83 13.03 *Adopted FY 2018 Rates are effective July 1, 2017. 114 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY OF PALO ALTO c 1^144A 116 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INTERNAL SERVICE FUNDS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 117 CITY OF PALO ALTO INTERNAL SERVICE FUNDS OVERVIEW • Overview Internal Service Funds provide services to City departments and recover their costs through user charges. Charges for employee benefits (health, pension, life insurance, etc.) and workers' compensation are reflected in the departments' salary and benefit accounts. The remaining user charges are included in the 'allocated charges' expenditure category within each department or fund. As a one-time budget balancing strategy for Fiscal Year 2017, the allocated charges to other City departments and funds, which is the revenue source for these funds, were reduced or elim- inated in the General Benefits, General Liabilities, and Workers' Compensation funds. In Fiscal Year 2018, the allocated charges to other City departments and funds were calculated to ensure that ongoing expenditure activities receive the necessary funding levels. This change to the allo- cated charges for these funds is reflected in each of the department sections in the "Budget Summary" and the "Budget Reconciliation", most notably in the "Dollars by Category" section. GENERAL BENEFITS FUND This fund reflects costs for a variety of employee benefits, including pension, health, dental, vision, and life insurance. Funds are also included for payments made to employees who elect to waive healthcare coverage under a City plan because they have other coverage. As discussed in the overview of this fund that appears in the Employee Information section, costs for employee health benefits as well as pension benefits are projected to increase in Fiscal Year 2018 and will be allocated out to departments and funds in proportion to their share. In addition, an irrevocable IRS Section 115 Pension Trust Fund has been established, per City Council direc- tion, and the General Benefits Fund displays the transfers in from various funds, as well as the total Section 115 Pension Trust Fund contribution. GENERAL LIABILITIES INSURANCE PROGRAM FUND This fund reflects costs for the City's Liability program. In Fiscal Year 2018, costs are projected to increase compared to the Fiscal Year 2017 Adopted Budget based on an actuarial analysis of the City's liability costs over the past few years and in order to provide an 85% confidence level in the funding levels of the fund. This will ensure that the General Liabilities Insurance Program fund has the necessary resources in order to deal with unforeseen claims. The allocation of these charges is reevaluated annually as part of the budget process to ensure that sufficient resources are available and that the fund balance is maintained at an appropriate level. INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 119 INTERNAL SERVICE FUNDS OVERVIEW PRINTING AND MAILING SERVICES FUND This fund reflects costs for central copying, printing, and mailing services provided to City departments. An overview of the Fund is included in the Administrative Services Department section of this document. RETIREE HEALTH BENEFITS FUND This fund reflects costs for medical insurance provided to retired City employees. In addition, this fund includes payments for the unfunded liability for future medical benefits that will be provided to current and future retirees. An overview of this Fund is included in the Employee Information section of this document. TECHNOLOGY FUND This fund reflects costs associated with citywide Information Technology (IT) activities. IT staff maintain critical desktop, software, and infrastructure replacements and maintenance activities for all City departments, including the Utilities Department. The overview for the Information Technology Department contains information about projects and activities for Fiscal Year 2018. VEHICLE REPLACEMENT AND MAINTENANCE FUND This fund reflects costs for providing maintenance and replacement of vehicles and equipment used by City departments. In Fiscal year 2018, $7.5 million is allocated for vehicles and equip- ment that are due for replacement. Of the $7.5 million, $3,8 million is for the continuation of projects approved by City Council in prior fiscal years. The 2018-2022 Capital Improvement Pro- gram (CIP) reflects funding totaling $20.5 million over the next five years for vehicle replace- ments. The current reserve balance in the Vehicle Replacement and Maintenance Fund reflects funding allocated form City departments and committed to this five year plan. WORKERS' COMPENSATION FUND This fund reflects costs for the City's Workers' Compensation program. In Fiscal Year 2018, costs are projected to increase compared to the Fiscal Year 2017 Adopted Budget based on an actu- arial analysis of the City's workers' compensation costs over the past few years and in order to provide an 85% confidence level in the funding levels of the fund. This will ensure that the Work- ers' Compensation fund has the necessary resources in order to deal with unforeseen claims. The allocation of these charges is reevaluated annually as part of the budget process to ensure that sufficient resources are available and that the fund balance is maintained at an appropriate level. 120 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Summary Revenues Fund Summary ($000) Charges to Other Funds Operating Transfers -In Other Revenue Return on Investments Total Expenses Allocated Charges 1,186 997 204 Vehicle Replacement and Maintenance Fund Technology Fund Printing and Mailing Services 8,836 13,736 1,453 2,032 - 155 131 - 178 343 9,169 16,242 1,453 General Benefits Fund Workers' Compensation Program Fund General Liabilities Insurance Program Fund 1,775 1,427 - 5 59,733 5,225 40 16 16 22 61,176 5,241 1,842 Retiree Health Benefit Fund Total 25,799 2,411 5,875 14,527 79,811 58 634 16,996 112,119 2,387 Contract Services 512 5,641 250 215 7 70 - 6,695 General Expense 66 838 - - - 838 Operating Transfers - Out Rents & Leases Salary & Benefits Supplies & Material Capital Improvement Program Total 38 570 287 - 496 3,259 - 4,677 161 3 2,411 3 2,617 189 363 369 - - - - 920 2,295 7,724 260 59,263 5,281 16,998 91,822 1,169 84 80 - - - - 1,334 7,838 3,733 - 11,571 13,293 20,112 1,453 61,890 5,788 3,329 16,998 122,862 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 121 INTERNAL SERVICE FUNDS OVERVIEW Changes to Unrestricted assets Internal Service Funds Reserves Vehicle Replacement and Maintenance Fund Technology Fund Printing and Mailing Services Fund General Benefits Fund General Liabilities Retiree Total Workers' Insurance Health Internal Compensation Program Benefit Service Program Fund Fund Fund Funds June 30, 2017 Projected Unrestricted Assets 23,971 14,290 0 1,360 1,132 1,496 3,264 45,513 FY 2018 Adopted Changes (4,124) (3,870) 0 (714) (547) (1,487) (2) (10,744) June 30, 2018 Projected 19,847 10,420 0 646 585 9 3,262 34,769 Unrestricted Assets 122 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY OF PALO ALTO 124 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 125 CITY OF PALO ALTO SPECIAL REVENUE FUNDS OVERVIEW Special Revenue Funds Overview Special Revenue Funds comprise revenues that have either restrictions on their use or special reporting requirements, such as development impact fees for community centers, libraries, parks, public facilities, and transportation; gas tax revenues from the state; housing mitigation fees assessed on commercial and industrial projects; in -lieu fees for the City's Below Market Rate (BMR) housing program; transportation mitigation fees paid by developers; parking in -lieu fees from commercial projects in the downtown area; parking permit revenues; and Community Development Block Grants (CDBG) from the federal government. PUBLIC ART FUND Administered by the Community Services Department, the Public Art Fund was created in Fis- cal Year 2014 to support the City's Public Art Program which seeks to increase the public's daily exposure to art through the commissioning and acquisition of a diverse range of artworks inte- grated into the City's urban environment. The Public Art Program strives to build the City's rep- utation as a dynamic public art locale with works of diverse styles, disciplines, and the highest aesthetic standards. Funding for the Public Art Program is determined by the Municipal Code's direction of 1 percent for Art in Private Development that states construction projects in excess of 10,000 square feet, requiring Architectural Review and having an estimated construction value of more than $200,000, have the option of commissioning artwork on the development site equal to the cost of 1 percent of the estimated construction valuation, or paying 1 percent to the Public Art Fund. In Fiscal Year 2018, the projected revenue for the Public Art Fund is $0.3 million. Additionally, although not accounted for in this fund, the City requires that for certain City funded projects a 1 percent public art expense is set aside (please refer to the Fiscal Year 2018 - 2022 Capital Improvement Plan for further detail). COMMUNITY DEVELOPMENT FUNDS Revenue in this category comes from development impact fees for community centers, libraries, parks, public facilities, and transportation. The development impact fees collected from new developments provides funding for the City's infrastructure related to community centers, libraries, parks, public safety facility, general government facilities, and the Charleston-Aras- tradero Corridor. The projected revenue within the development impact fee funds is $1.9 million - for Fiscal Year 2018 primarily reflecting anticipated receipts in the Park Impact Fee Fund. The Fiscal Year 2018 - 2022 Capital Improvement Plan includes a transfer of $250,000 in Fiscal Year 2018 from Park Impact Fees for the installation and renovation of three Dog Parks in South Palo Alto & funding to evaluate natural turf athletic fields. Additionally, the Capital Improvement Plan includes a transfer of $1.3 million in Fiscal Year 2018 from Transportation Impact Fees for enhanced bikeways at Churchill Avenue ($1.0 million) and upgrades to traffic signal and intelli- gent transportation systems ($378,361). These funds have been reserved for this activity. Annu- SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 127 SPECIAL REVENUE FUNDS OVERVIEW ally the Administrative Services Department issues a report of the activities in these funds including the remaining balances within them. The FY 2016 annual report ending June 30, 2016, is included in Council Staff Report #7386 found here: http://www.cityofpaloalto.org/civicax/file- bank/documents/55646. STREET IMPROVEMENT FUNDS (SIF) Revenue in this category comes from the state gas tax and from federal and state grants ear- marked for street improvements. This fund provides funding for transportation and traffic - related capital projects. Based on projected gas tax revenues and interest income, revenues are estimated to be $1.4 million for Fiscal Year 2018. This level of receipts is consistent with the Fis- cal Year 2017 level of $1.4 million. In Fiscal Year 2018, $1.4 million is programmed to be trans- ferred to the Capital Improvement Fund for various citywide transportation projects that include various projects for Street Maintenance and Safe Routes to School. This level is main- tained through the Fiscal Year 2018 - 2022 Capital Improvement Plan in order to achieve the City's goal of reaching a citywide average Pavement Condition Index (PCI) score of 85 by 2019. In April 2017, the Governor of California signed transportation funding bill, S.B. 1; beginning July 1, 2017, adjustments to Highway User Tax Allocations (HUTA) and Road Maintenance and Reha- bilitation Account (RMRA) are anticipated. Based on the most recent estimates from California City Finance, revenues may increase in FY 2018 by $600,000. Staff intends to bring forward an ordinance for Council for approval in the Fall of 2017 that will outline a funding plan for S.B. 1 allocations. FEDERAL AND STATE REVENUE FUNDS The Federal and State Revenue Fund consists primarily of Community Development Block Grant (CDBG) funds. CDBG funds are grants from the U.S. Housing and Urban Development Department (HUD). They are used for a wide variety of community projects such as affordable housing, public services, and project expenditures. CDBG project expenditures draw upon pro- gram income and prior year allocations that have been unspent. Confirmation of Fiscal Year 2018 CDBG allocations were delayed due to the continuing budget resolution at the federal government level, which expired on April 28, 2017. Due to this delay, the Department of Housing and Urban Development (HUD) extended deadlines and requested that jurisdictions not submit their Fiscal Year 2018 CDBG Annual Action Plans until allocations were known. For this reason, the Fiscal Year 2018 Adopted budget reflects preliminary Staff esti- mates totaling $818,000. As of the timing of the printing of this report, Staff received confirma- tion of a $900,000 allocation and brought forth the Fiscal Year 2018 Action Plan for Council approval at the June 19, 2017 meeting. Further actions will be brought forward separately to align the budget in Fiscal Year 2018 once Staff has finalized the submission. Included in the request are staffing alignments to reduce the allocation of a Senior Planner by 0.26 to 0.10, and add 0.48 Management Specialist (part-time hourly). As part of this action, the part-time hourly position will assume administrative and planning functions, allowing the department to realign Senior Planner duties with Residential and Housing projects in Fiscal Year 2018. A more detailed presentation of CDBG funding for Fiscal Year 2018 is provided in this section. 128 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW HOUSING IN -LIEU FUNDS In -lieu housing revenues come from fees required of commercial, industrial, and residential developers. These fees are used to provide housing for the City's Subsidized Housing Program. For Fiscal Year 2018, $2.7 million in in -lieu fees are anticipated, a $1 million decrease from the $3.7 million assumed in the FY 2017. Decreases of $15,000 in Residential Housing loan pay-offs and $1.25 million in the Commercial Housing In -Lieu revenue are anticipated based on PCE staff projections. This is partially offset by budgetary alignment of interest receipts, netting an addi- tional $285,000. In June 2015, the City Council set aside a total of $14.5 million in the Residential and Commercial Housing In -Lieu Fund reserves for the purpose of preserving affordable housing at the Buena Vista Mobile Home Park (BVMHP). In June 2016, the Council approved a Memorandum of Understanding with Santa Clara County and the Housing Authority of the County of Santa Clara (HACSC), where the City and County committed to provide $14.5 million each to assist HACSC to acquire and improve BVMHP and operate it as an affordable mobile home park for up to 50 years. In May 2017, HACSC and the private -party owner of BVMHP entered into a purchase and sale agreement. The transaction is expected to close in September 2017, pending division of a portion of the property fronting El Camino Real and approval of a regulatory and funding agree- ment between the City, County and HACSC. Therefore, the Fiscal Year 2018 Adopted Budget appropriates funding necessary for the City to complete its payment commitment to resolve matters related to BVMHP anticipated to occur in Fiscal Year 2018. SPECIAL DISTRICTS FUNDS Special District Funds reflect the combined financial activity of the following funds: University Avenue Parking District Fund, California Avenue Parking District Fund, and Residential Parking Permit Fund. Revenue in this category comes from parking permits and is used for mainte- nance, repair, and beautification of parking facilities and public areas within the University and California Avenue business districts. This section also includes the City's Downtown Residential Parking Permit (RPP) program, approved by Council in Fiscal Year 2015, to mitigate parking congestion issues in Palo Alto neighborhoods. As of FY 2018, a total of five neighborhoods are anticipated to be approved and active in the RPP program: College Terrace, Downtown, Ever- green Park/Mayfield, Crescent Park, and SouthGate. This Fiscal Year 2018 Adopted Budget includes the following significant proposals impacting these funds: ▪ Reallocations to align staffing with the volume of work necessary for administering various parking funds. A net reduction of 0.60 positions are recommended within these funds reflecting more established RPP districts requiring less staff involvement, and the efficient use of contract services for some services including customer service and anticipated general workloads. ▪ Reallocation of maintenance costs in the downtown core to the University Avenue Parking District Fund for street tree lights and the Downtown Streets Team ($76,000). SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 129 SPECIAL REVENUE FUNDS OVERVIEW • Revenue adjustments increasing revenues between 45 percent and 120 percent from FY 2017 estimated levels as a result of approved increases in permit fees (outlined in the FY 2018 Proposed Municipal Fees schedule, as recommended by Finance Committee and adopted by City Council). • Increase expense allocation to the Transportation Management Association (TMA) to support the reduction of single occupancy vehicle rates (SOV) in Palo Alto ($480,000). • Capital improvement investments in FY 2018 through a net transfer of $ 1.3 million to the General Capital Improvement Fund. Major projects funded in FY 2018 include: modernization of two elevators in Parking Lot J and in the University Avenue Business District ($700,000); California Avenue parking district improvements to resurface parking lots 4 and 9 ($190,000, beginning June 2017); California Avenue District Gateway Signs ($150,000); University Avenue Parking Improvements ($141,759); High Street Parking Garage Waterproofing Study ($50,000), and Downtown Parking Wayfinding - second year ($61,325). Additional project details can be found in the FY 2018 - 2022 Adopted Capital Improvement Plan. On April 11, 2017, the City Council received the City of Palo Alto Downtown Parking Management Study that examined all of the City's current, planned and potential parking management strat- egies, including paid parking, within Downtown Palo Alto. As directed by the City Council, staff will develop potential strategies, in concert with the Planning and Transportation Committee and Finance Committee, for the organization and scaling of a comprehensive parking strategy during the next fiscal year. The anticipated reorganization and scaling of parking activities nec- essary to implement and maintain a comprehensive parking strategy, including a paid parking program, will require up -front financial and staff resource investments resulting in forecasts that show a net gap between anticipated revenues and expenses over the near term. However, it is important to note that these forecasts assume that paid parking fees are assessed for on -street and surface lot parking in the Downtown area. Initial forecasts show that net revenues will exceed expenses within a few years, and have the potential to generate a long term funding stream for transportation initiatives such as the Palo Alto Transportation Management Associa- tion (PATMA), the Palo Alto Shuttle, and other actions related to transportation demand man- agement. In order to mitigate the near -term cash flow variance, recommended increases in current per- mits throughout the City are included in the FY 2018 Adopted Municipal Fee Schedule resulting in anticipated revenue increases ranging from 45 percent to 120 percent in these funds as dis- cussed above. These increases are necessary to ensure solvency of the California Avenue Park- ing District Fund and to provide the cash flow financing for the additional investments not currently assumed in this FY 2018 Adopted Budget. Costs will be significantly impacted by the design and complexity of the elements of the comprehensive parking strategy including the pricing strategy and the equipment and system acquired. Parking initiatives and investments not appropriated in this FY 2018 Adopted Budget, but antic- ipated in the near term including the projected start date and estimated costs are detailed below: 130 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW • Consolidated "one -stop shop" permit and citation software management platform (FY 2018; $1 million to $1.5 million); ▪ Automated Parking Guidance System (FY 2018 currently programmed in FY 2019 capital improvement plan, $2 million to $3 million); • Parking Garage LED lighting upgrades (FY 2019 through FY 2020, $600,000 to $1 million); • Centralize parking operations within the City of Palo Alto (ongoing, to be determined); • On -Street and Surface Lot Paid Parking Program (FY 2019 Downtown only, $1.5 million to $2.2 million); ▪ Parking access and revenue controls (FY 2019, to be determined); and ▪ California Avenue Parking Management Study (FY 2018, $100,000) This is not intended to be a comprehensive list, nor does it outline the ongoing costs of these investments. This analysis will continue to be refined. During FY 2018, staff will actively engage the City Council, Committees, and the community to develop a comprehensive parking strategy including advancing incremental steps as they are developed and putting any new project initiatives on hold. This will ensure current projects in the pipeline are addressed timely and a scalable program is developed to address the growing parking and transportation needs of the City. Performance of these funds will be monitored closely in conjuncture with these plans and financing actions will be brought forward to ensure sufficient funding, identify alternative funding sources, or recommend cash flow loans as neces- sary during FY 2018. TRAFFIC MITIGATION AND PARKING IN -LIEU FUNDS Traffic mitigation fee revenue is derived from fees paid by developers of new, non-residential projects to alleviate additional traffic congestion resulting from new development. Parking in - lieu fees result from commercial projects in assessment district areas which contribute a fee for future parking spaces in lieu of providing the required spaces within the project area itself. For Fiscal Year 2018, $410,000 in traffic mitigation and parking in -lieu fees are anticipated, a $1.3 million decrease from the $1.7 million assumed in the Fiscal Year 2017. Decreases of $1.3 million in Parking in -lieu fees is anticipated, based on PCE staff projections. PUBLIC BENEFIT FUNDS Revenue in these funds is a result of a senior housing project on Hamilton Avenue and contribu- tions and mitigation fees paid for Planned Community Zone approvals. The Hamilton Avenue funds will continue to be used by Avenidas (formerly Senior Coordinating Council) to provide services to seniors. DOWNTOWN BUSINESS IMPROVEMENT DISTRICT (BID) The Downtown Business Improvement District (BID) was established by an ordinance adopted in January 2004 to promote the downtown business community through a variety of efforts including beautification, advocacy, and marketing. The BID continually surveys its member busi- nesses to determine what its priorities should be. Priorities identified as part of the Fiscal Year 2016-2017 plan were street cleanliness and creating a safe downtown. New events have been implemented to bring business downtown and new communications tools, such as social media SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 131 SPECIAL REVENUE FUNDS OVERVIEW and downtown walking maps, are available. Other programs that help keep Downtown Palo Alto safe, spotless, and successful will advance as the Palo Alto Business and Professional Associa- tion continues to operate the Downtown Palo Alto BID for Fiscal Year 2018. STANFORD UNIVERSITY MEDICAL CENTER (SUMC) In 2011, the City of Palo Alto entered into a Development Agreement between the City of Palo Alto and the Stanford University Medical Center Parties (SUMC). Funds received in Fiscal Year 2012 as part of this agreement were used in Fiscal Years 2013, 2014, and beyond as outlined in the agreement and approved by the City Council. Over the course of the agreement, Stanford is due to pay the City $44.3 million, of which the City has received $32.5 million. As part of the Development Agreement, the City is expecting to receive the remaining $11.8 million upon issu- ance of a use and occupancy permit for the new Stanford University Medical Center in the next year. The funds received per the development agreement are allocated for specific purposes which include funding for the City Council approved Infrastructure Plan. As outlined in the agreement, expenses and revenues for each category must be accounted for separately. A more detailed presentation of the Stanford University Medical Center funding for Fiscal Year 2018 is provided in this section. Community Health and Safety: Funds are to be distributed to selected community health pro- grams that benefit residents of the City. In Fiscal Year 2018, all previous allocations towards Project Safety Net (PSN) have been fully expended and costs for the Project Safety Net pro- gram (both the collaborative and the means restrictions) are fully budgeted in the City's Gen- eral Fund. The projected 2018 beginning balance in this category is $2.4 million and there are no planned expenditures or transfers in Fiscal Year 2018 to the Fiscal Year 2018 - 2022 Capital Improvement Plan. Quarry Road Improvements: Funds are to improve and enhance the public right-of-way at the pedestrian and bicycle connection from El Camino to Welch Road along Quarry Road. The pro- jected 2018 beginning balance in this category is $11,569. The Fiscal Year 2018 - 2022 Capital Improvement plan includes a transfer of the remaining balance in Fiscal Year 2018 for Quarry Road Improvements and Transit Center Access. Remaining funding will be expended from the Intermodal Transit Fund, consistent with the development agreement and recognizing cost increases incurred as a result of Quarry Road delays and mobilization of two separate projects rather than one combined project as originally planned. Intermodal Transit: Funds are to enhance the pedestrian and bicycle connection from the Transit Center to the El Camino/Quarry Road intersection. The projected 2018 beginning balance in this category is $2.2 million. The Fiscal Year 2018 - 2022 Capital Improvement Plan includes a trans- fer of $538,258 in Fiscal Year 2018 for Quarry Road Improvements and Transit Center Access. Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing: Funds in this category are to be used in connection with infrastructure, sustainable neighborhoods and communities, and affordable housing. The projected 2018 beginning balance in this category is $2.9 million. There are no planned transfers in Fiscal Year 2018 to the Fiscal Year 2018 - 2022 Capital Improvement Plan. Climate Change: Funds are to be used for projects and programs for a sustainable community, including programs identified in the City's Climate Action Plan. The projected 2018 beginning 132 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW balance for this category is $3.9 million. The Fiscal Year 2018 - 2022 Capital Improvement Plan includes $5.2 million in Fiscal Year 2018 for the Bicycle and Pedestrian Plan -Implementation Project. This action will result in a temporary negative fund balance, however a contribution from Stanford per the development agreement in calendar year 2017 of $4.0 million will fix this. Stanford Hospital Expansion Cost Mitigation: Funds are being held in this category for the pur- pose of assuring that City costs associated with the project do not exceed revenues to the City. The projected 2018 beginning balance for this category is $2.8 million. SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 133 SPECIAL REVENUE FUNDS OVERVIEW Special Revenue Summary by Fund Type Fund Summary ($000) Revenues Charges for Services From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses Property Taxes Rental Income Return on Investments Public Art Fund 120 155 2 Corn. Dev. Funds 1,689 264 Bus. Improv. District 140 2 Housing In -Lieu Funds 2,315 9 409 Street Improv Fund 1,416 13 Federal & State Rev. Funds 379 136 2 Public Benefits Fund 30 18 Special District Funds 1,750 340 180 2,477 27 Traffic Mitig. & Parking In -Lieu Funds - 2,066 257 153 - 1,796 - 1,750 495 - 2,481 - 180 - 2,477 - 140 9 211 1,100 Total 277 1,953 142 2,733 1,430 517 48 4,774 410 211 12,494 Expenses Allocated 1 Charges Contract Services General Expense 1 Operating 3 Transfers -Out Salary & Benefits 180 Supplies & Material Transfer to Infrastructure 1,628 148 239 14,600 1 60 364 1,400 1 744 73 28 239 2,255 121 134 1,075 110 1,103 - 242 - 2,012 - 15,641 502 - 1,387 110 5,750 9,881 Total 185 1,628 148 14,900 1,764 818 28 5,037 - 5,750 30,258 134 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Consolidated Special Revenue Funds Fund Summary ($000) FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Revenues Gas Tax Federal & State Grants Federal CDBG Housing In -Lieu Traffic Mitigation Fees Developer Impact Fees Parking Mitigation Fees BID Assessment Interest Income Other Revenue Subtotal Revenue 2,083 140 372 6,169 3,508 1,492 2,123 86 1,482 480 17,935 1,461 126 240 4,882 484 1,893 3,221 100 1,756 583 14,746 1,416 442 3,400 1,517 1,679 2,398 140 1,236 488 12,716 1,416 379 2,150 267 1,679 4,407 140 1,100 460 11,999 (63) (1,250) (1,250) 2,009 (136) (28) (717) 0.00 0.00 (14.25) (36.76) (82.40) 0.00 83.78 0.00 (11.00) (5.73) (5.64) Operating Transfers In Housing Improvement Technology Fund Utility Admin Fund Capital Projects Fund General Fund Subtotal Operating Transfers In 12 12 24 24 300 - 274 713 610 749 12 24 433 469 21 48 426 495 9 24 (7) 26 0.00 75.00 100.00 0.00 (1.62) 5.54 Total Source of Funds Expenditures 18,545 15,495 13,185 12,494 (692) General Expense 2,978 SUMC 393 Subtotal Expenditures 3,371 4,909 1,074 5,983 4,556 85 4,641 19,875 19,875 15,319 (85) 15,234 336.24 (100.00) 328.25 Transfers Out General Fund Refuse Fund General Benefits CIP Subtotal Operating Transfers Out 422 101 5,446 5,675 5,446 6,198 461 14,814 15,275 480 22 9,881 10,383 19 22 (4,933) (4,892) 4.12 0.00 100.00 (33.30) (32.03) Total Use of Funds 8,817 12,181 19,916 30,258 10,342 51.93 9,728 3,314 (6,731) (17,764) (11,034) 163.93 Net To (From) Reserves SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 135 SPECIAL REVENUE FUNDS OVERVIEW Community Development 3lock Grant SOURCE OF FUNDS Community Development Block Grant Fund Housing & Urban Development, current year Housing & Urban Development, prior years Prior Year Excess/Reallocation (1) FY 2017 Adopted Budget 441,253 213,165 FY 2018 Agency Requests FY 2018 Adopted Budget 379,477 329,057 Program Income Palo Alto Housing Corporation TOTAL SOURCE OF FUNDS USE OF FUNDS Public Service I 100,000 136,049 754,418 844,583 Palo Alto Housing Corporation - SRO Resident Support Services 22,983 49,457 21,000 Catholic Charities - Long -Term Care Ombudsman 5,012 10,000 7,000 YWCA/Support Network for Battered Women - Domestic Violence 8,020 10,000 8,489 InnVision/Shelter Network - Opportunity Center 35,592 50,000 35,000 Silicon Valley Independent Living Center 5,012 5,032 5,000 Subtotal: Public Service 76,619 124,489 76,489 Planning and Administration Project Sentinel/Fair Housing Services 30,941 32,012 28,810 City of Palo Alto - CDBG Administration includes 0.10 FTE & 0.48 74,295 Hourly CDBG Administrative Staff Subtotal: Planning and Administration 108,251 117,012 103,105 77,310 85,000 Housing, Economic Development, Capital Projects, & Public Facilities J Downtown Streets Team/Workforce Development 290,723 317,400 317,400 MidPen Housing - Palo Alto Gardens Rehab Project City of Palo Alto - Microenterprise Assistance Program La Comida - Kitchen Renovation - 321,000 321,000 Subtotal: Housing, Economic Development & Capital Projects 569,548 638,400 638,400 278,825 TOTAL USE OF FUNDS 754,418 879,901 817,994 136 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund Revenues Permit Sales FY 2017 Adopted FY 2017 Adjusted FY 2018 Adopted I- 2,190,000 Day Passes Ticket Machine Transfer from Other Funds for City Share Investment Income Total Revenue 1,402,000 1,402,000 312,000 312,000 215,000 215,000 169,935 169,935 21,800 21,800 2,120,735 2,120,735 312,000 215,000 340,180 21,800 3,078,980 Expenditures Administration Mir 1 Positions 1.42 1.42 1.18 Salaries & Benefits Miscellaneous Supplies Bank card charges for ticket machines Subtotal Administration 171,027 171,027 20,880 20,880 6,000 6,000 197,907 197,907 154,227 20,548 6,000 180,775 Maintenance Positions Salaries & Benefits 455,261 455,261 Supplies 3.87 3.87 Twinkle/Tree Lights Maintenance (garage, elevator, fire sprinkler, landscaping) Custodial (power washing, sweeping) Steam Cleaning 60,090 88,751 60,090 88,751 121,706 121,706 94,660 94,660 3.87 478,239 60,090 30,000 88,751 121,706 94,660 Subtotal Maintenance 820,468 820,468 A 873,446 Police Patrol Positions Salaries & Benefits Subtotal Patrols 0.50 0.50 0.50 97,812 97,812 116,296 97,812 97,812 116,296 Other Valet Programs (Lots R, CC, CW, & S) Downtown Streets Team 465,572 465,572 72,543 72,543 289,972 118,744 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 137 SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund FY 2017 Adopted FY 2017 Adjusted FY 2018 Adopted Transportation Management Authority (TMA) Utilities/Indirect Costs Transfer to GF (PARS trust) Transfer to CIP Fund - - 480,000 138,012 163,286 198,560 - - 10,802 682,676 682,676 953,084 Subtotal Other Total Operating Expenses Income from Operations 1,358,803 1,384,077 2,051,162 2,474,990 2,500,264 3,221,679 (354,255) (379,529) (142,699) 138 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW California Avenue Parking Permit Fund Revenues Permit Sales Day Passes Investment Income FY 2017 Adopted 125,000 70,000 5,200 FY 2017 Adjusted 125,000 70,000 5,200 FY 2018 Adopted 306,250 135,000 5,200 Total Revenue 200,200 446,450 Expenditures Administration Positions Salaries & Benefits Miscellaneous Supplies Subtotal Administration 0.56 60,419 8,453 68,872 0.56 60,419 8,453 68,872 0.62 85,259 8,453 93,712 Maintenance Positions Salaries & Benefits Supplies Garage maintenance Sweeping Ted Thompson and Cambridge garages Fire sprinkler maintenance Steam Cleaning Landscaping Facilities repair Street Sweeping Subtotal Maintenance Utilities/Indirect costs Transfer to GF (PARS trust) Transfer to CIP Fund Subtotal Other Total Operating Expenses Income from Operations 0.43 61,742 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 179,364 20,623 20,623 268,859 (68,659) 0.43 61,742 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 179,364 23,959 23,959 272,195 (71,995) 0.43 65,273 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 182,895 30,620 2,499 150,000 183,119 459,726 (13,276) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 139 SPECIAL REVENUE FUNDS OVERVIEW SOURCE OF FUNDS Stanford Development Agreement Fund FY 2017 Estimated FY 2018 Adopted (233,496) Unrestricted- Community Health and Safety 2,646,913 2,413,418 Unrestricted- Stanford Hospital Expansion Cost Mitigation 2,692,330 2,761,905 69,575 Unrestricted- Intermodal Transit 2,104,335 2,158,715 54,380 Unrestricted- Quarry Road Improvements 361,234 11,569 (349,665) Unrestricted- Neighborhoods and Communities and Affordable Housing Unrestricted- Climate Change Total Beginning Fund Balance 12,867,620 4,975,758 25,648,190 2,850,145 (10,017,475) 3,904,341 14,100,093 (1,071,417) (11,548,097) Revenue Interest - Community Health and Safety 68,401 36,032 (32,370) Interest - Stanford Hospital Expansion Cost Mitigation 69,575 41,234 (28,341) Interest - Intermodal Transit 54,380 32,229 (22,151) Interest - Quarry Road Improvements 9,335 173 (9,162) Interest - Neighborhoods/Communities/ Affordable Housing 332,525 42,552 (289,973) Interest - Climate Change 128,583 58,291 (70,293) Total Revenue 662,800 210,510 (452,290) Transfers In 140 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Stanford Development Agreement Fund ■ Total Transfers FY 2017 Esti TOTAL SOURCE OF FUNDS 26,310,990 14,310,603 (12,000,387) USE OF FUNDS Expenditures Community Health and Safety: Project Safety Net Director Community Health and Safety: Project Safety Net Coordinator Community Health and Safety: Project Safety Net Supplies Community Health and Safety: Project Safety Net Contracts Total Operating Expenditures Transfers Out Stanford Hospital Expansion Cost Mitigation Neighborhood and Communities and Affordable Housing: Capital Improvement Fund Climate Change: Capital Improvement Fund Intermodal Transit: Capital Improvement Fund Quarry Road Improvements: Capital Improvement Fund Total Transfers Total Expenditures 85,000 2,394 214,503 301,897 10, 350, 000 1,200,000 441,000 359,000 12,350,000 12,651,897 5,200,000 538,258 11,742 5,750,000 5,750,000 (85,000) (2,394) (214, 503) (301, 897) (10,350,000) 2,762,632 97,258 (347, 258) (7,837,368) (6,901,897) Ending Fund Balance Unrestricted- Community Health and Safety Unrestricted- Stanford Hospital Expansion Cost Mitigation Unrestricted- Intermodal Transit Unrestricted- Quarry Road Improvements Unrestricted- Neighborhoods and Communities and Affordable Housing Unrestricted- Climate Change Total Ending Fund Balance 2,413,418 2,761,905 2,158, 715 11,569 2,850,145 3,904,341 14,100, 093 2,449,449 2,803,139 1,652,686 2,892,697 (1,237,368) 8,560,603 36,032 41,234 (506, 029) (11,569) 42,552 (5,141, 709) (5,539,490) TOTAL USE OF FUNDS 26,751,990 14,310,603 (12,441,387) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 141 142 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEBT SERVICE FUNDS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 143 CITY OF PALO ALTO DEBT SERVICE FUNDS OVERVIEW Debt Service Funds Overview CITY OF PALO ALTO DEBT POLICY The City of Palo Alto recognizes the need for spending a prudent amount every year for ongo- ing capital replacement and rehabilitation needs. An ongoing capital improvement plan is vital to ensuring the future viability of services. To achieve this priority, the City funds its regular and ongoing capital needs primarily on a "pay-as-you-go" basis. There are, however, special or extraordinary capital improvement projects, refinancing of existing debt, and purchase of major and multiple pieces of equipment in which it is appropriate to consider debt financing. The City's Debt Policy establishes the guidelines to support the decision -making process for issuing debt. DEBT POLICY GUIDELINES The City's Debt Policy provides guidelines for refinancing existing debt; detailing the responsi- bilities of City staff engaged in issuing debt; delineating the debt instruments or vehicles (e.g. General Obligation Bonds or Certificates of Participation) the City can utilize; and describing sit- uations in which tax-exempt and taxable debt can be used. The depth and breadth of the policy serve to guide current and future staff. Below are highlights of the Debt Policy guidelines for the use of debt and other financing. A. Debt may be judiciously used when some or all of the following conditions exist: • Estimated future revenue is sufficient to ensure the payment of annual debt service. ▪ Other financing options have been explored and are not viable for the timely or economic acquisition or completion of a capital project. ▪ A capital project is mandated by federal or state authorities with no other viable funding option available. ▪ The capital project or asset lends itself to debt financing rather than pay-as-you-go funding based on the expected useful life of the project. ▪ Debt will not be used to fund ongoing operating expenses of the City except for situations in which cash flow problems arise and the City may need to issue short-term Tax or Revenue Anticipation Notes. • Annual debt service shall not exceed 10 percent of annual operating expenses for the General Fund unless an exception is approved by Council. For all other City funds annual debt service shall not exceed 15 percent of annual operating expenses unless an exception is approved by Council. B. Minimize borrowing costs by: DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 145 DEBT SERVICE FUNDS OVERVIEW ▪ Maximizing the use of existing resources for capital projects and equipment needs. • Issuing tax-exempt debt except in instances where IRS regulations require taxable bonds. ▪ Striving to obtain the highest credit ratings possible. • Maintaining a competitive bid process on bond sales except for situations in which negotiated or private placement sales meet City objectives. In negotiated or private placement sales, City staff will work with its Financial Advisor to review proposed interest rates and proposed fees. ▪ Ensuring that the type of debt and debt structure developed ensure advantageous marketing of each issue. C. Linking debt to appropriate revenue sources and project users: • When possible, tie project financing directly to users of a specific facility or use. Examples include renovation of the Golf Course where user fees can offset debt service or replacing gas mains where gas rates can be increased to cover debt expense. ▪ Using debt in the Enterprise Funds so as to avoid significant spikes in user rates by smoothing out costs over time. In addition to capital projects, the City can finance essential equipment and vehicles. These assets range from public safety vehicles to utility equipment. The underlying asset must have a minimum useful life of three years. Short-term financings, including loans and capital lease pur- chase agreements, are executed to meet such needs. It has been the City's practice to fund these purchases with existing resources; however, debt financing flexibility for future needs remains an option. Also, the Chief Financial Officer or Director of Administrative Services, supported by Treasury Division, will periodically evaluate its existing debt and execute re -financings when economi- cally beneficial. A refinancing may include the issuance of bonds to refund existing bonds or the issuance of bonds in order to refund other obligations. A net present value analysis, both in dol- lar and percentage terms, will be conducted to determine whether a re -financing is optimal. As a "rule of thumb," a minimum 3 percent net present value savings will be used as a basis to begin re -financing efforts. As with new debt, all refinancings must be approved by Council. Recently, the state legislature adopted Senate Bill 1029 (Hertzberg), amending Government Code section 8855 to place additional reporting obligations on issuers of public debt, effective January 1, 2017. The amendments require an issuer to certify that they have adopted a debt pol- icy concerning the use of debt and that the proposed debt issuance is consistent with that Pol- icy. Though the City's existing Debt Policy and practice substantially complied with the new requirements, minor updates to the Debt Policy were approved by the City Council on April 11, 2017 to explicitly comply with SB 1029 requirements. This statue also added additional reporting requirement to the California Debt and Investment Advisory Commission (CDIAC) such as the submission of annual report for any issue of debt. LEGAL DEBT LIMIT Based upon the assessed valuation of $29.4 billion for the fiscal year ending June 30, 2016, the City is limited to general obligation indebtedness of $1.04 billion. As of June 30, 2016, the amount of debt applicable to the debt limit is $65.2 million, which is well below its legal debt 146 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW limit. The debt amount is related to the voter approved general obligation bonds to renovate and build out the City's libraries including the Mitchell Park Library and Community Center. DEBT OBLIGATIONS Summaries of the City of Palo Alto debt activity for Fiscal Year 2017 are provided in the follow- ing section. DEBT OBLIGATION DESCRIPTIONS 2002B Downtown Parking Improvement Project Certificates of Participation (COPs) On January 16, 2002, the City issued $3.6 million of COPs to finance the construction of certain improvements to the non -parking area contained in the City's Bryant/Florence Garage complex. Due to lower construction costs, $0.9 million in par bonds were paid off early in January 2005. Principal payments are due annually on March 1 and interest payments semi-annually on March 1 and September 1, and are payable from lease revenues received by the Corporation from the City's available funds. As of June 30, 2017, there will be $1 million principal and $0.2 million interest as the remaining debt service on the bonds with final payment occurring in Fiscal Year 2022. 2010A and 2013A General Obligation (GO) Bonds: On June 30, 2010, the City issued the first series of $55.3 million and on June 26, 2013 the sec- ond series of $20.6 million of GO bonds to finance costs for constructing a new Mitchell Park Library and Community Center, as well as substantial improvements to the Main Library and the Downtown Library. Principal payments are due annually on August 1 and interest payments semi-annually on February 1 and August 1 from 2 percent to 5 percent, and are payable from property tax revenues. As of June 30, 2017, for the above 2010 and 2013 bonds, $47 million and $16.7 million principal and $30.7 million and $9.8 million interest as the remaining debt service on the bonds with final payment occurring in Fiscal Year 2041 and Fiscal Year 2042, respectively. 2011 Golf Course Master Lease -Purchase Agreement On August 2, 2011, the City entered into a master lease -purchase agreement with JP Morgan Chase Bank, N.A. to finance redemption of the 1998 Golf Course COPs. The lease is secured by a first priority security interest in eighteen Fire Department emergency vehicles. Lease proceeds were $3.2 million. Principal payments are due annually on September 1 and interest payments are due semi-annually on September 1 and March 1 at a rate of 2.49 percent, payable from Gen- eral Fund revenues. As of June 30, 2017, there will be $0.8 million in principal and $21,091 in interest as the remaining debt service on the bonds with final payment occurring in Fiscal Year 2019. 1995 Utility Revenue Bonds, Series A The City issued Utility Revenue Bonds on February 1, 1995 to finance certain extensions and improvements to the City's Storm Drainage and Surface Water System. The Bonds are special obligations of the City payable solely from and secured by a pledge of and lien upon the reve- DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 147 DEBT SERVICE FUNDS OVERVIEW nues derived by the City from the funds, services and facilities of all Enterprise Funds except the Refuse Fund and the Fiber Optics Fund. Principal payments are payable annually on June 1, and interest payments semi-annually on June 1 and December 1. A $2.9 million 6.25 percent term bond is due June 1, 2020. In lieu of a reserve fund, the Bonds are secured by a Surety Bond issued by AMBAC Indemnity Corporation. The pledge of future Net Revenues for the above funds ends upon repayment of the $1.8 million principal and $0.2 million interest as the remaining debt service on the bonds with final pay- ment occurring in Fiscal Year 2020. 1999 Utility Revenue and Refunding Bonds, Series A The City issued Utility Revenue Bonds on June 1, 1999 to refund the 1990 Utility Revenue Refunding Bonds, Series A and the 1992 Utility Revenue Bonds, Series A, and to finance rehabil- itation of the Wastewater Treatment System's two sludge incinerators. The 1990 Utility Revenue Refunding Bonds, Series A and the 1992 Utility Revenue Bonds, Series A, were subsequently retired. The 1999 Bonds are special obligations of the City payable solely from and secured by a pledge of and lien upon certain net revenues derived by the City's Sewer System and its storm and surface water system (the "Storm Drain System"). As of June 30, 2001, the 1999 Bonds had been allocated to and were repayable from net revenues of the following enterprise funds: Wastewater Collection (10.2 percent), Wastewater Treatment (64.6 percent) and Storm Drain (25.2 percent). Principal payments are payable annually on June 1, and interest payments semi- annually on June 1 and December 1. In lieu of a reserve fund, the Bonds are secured by a Surety Bond issued by AMBAC Indemnity Corporation. The pledge of future Net Revenues for the above funds ends upon repayment of the $9 million principal and $2.2 million interest as the remaining debt service on the bonds as of June 30, 2017, with final payment occurring in Fiscal Year 2024. 2007 Electric System Clean Renewable Energy Tax Credit Bonds: On November 1, 2007 the City issued $1.5 million of Electric Utility Clean Renewable Energy Tax Credit Bonds (CREBS), 2007 Series A, to finance the City's photovoltaic solar panel project. The bonds do not bear interest. In lieu of receiving periodic interest payments, bondholders are allowed federal income tax credit in an amount equal to a credit rate for such CREBS multiplied by the outstanding principal amount of the CREBS owned by the bondholders. The Bonds are payable solely from and secured solely by a pledge of the Net Revenues of the Electric system and other funds pledged therefore under the Indenture. The pledge of future Electric Fund Net Revenues ends upon repayment of the $0.6 million as the remaining debt service on the bonds as of June 30, 2017 with final payment occurring in Fis- cal Year 2022. 2009 Water Revenue Bonds, Series A On October 6, 2009, the City issued Water Revenue Bonds in the amount of $35.5 million to finance certain improvements to the City's water utility system. Principal payments are due annually on June 1, and interest payments are due semi-annually on June 1 and December 1, from 1.80 percent to 5.95 percent. The final debt service payment will be made in 2035. When these bonds were issued they were designated as 'Direct Payment Build America Bonds' under 148 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW the provisions of the American Recovery and Reinvestment Act of 2009 ('Build America Bonds'). The City expected to receive a cash subsidy payment from the United States Treasury equal to 35 percent of the interest payable on the 2009 bonds, however, due to the United States federal government budget (sequestration) cuts, in calendar year 2013, the receipts are 32 percent of interest payable. The lien on the 1995 Bonds on the Net Revenues is senior to the lien on Net Revenues securing the 2009 Bonds and the 2002 Bonds. The City received subsidy payments amounting to $534,538, which represents 32.8 percent of the two interest payments due on June 1, 2015 and December 1, 2015. The pledge of future Net Revenues of the above funds ends upon repayment of the $28.8 mil- lion principal and $17.4 million interest as the remaining debt service on the bonds as of June 30, 2017 with final payment occurring in Fiscal Year 2035. 2007 State Water Resources Loan In October 2007, the City approved the $9.0 million loan agreement with State Water Resources Control Board (SWRCB) to finance the City's Mountain View/Moffett Area reclaimed water pipeline project. Under the terms of the contract, the City agreed to repay $9.0 million to the State in exchange for receiving $7.5 million in proceeds to be used to fund the Project. The dif- ference between the repayment obligation and proceeds amounts to $1.5 million and represents in -substance interest on the outstanding balance. Loan proceeds are drawn down as the project progresses and debt service payments commenced on June 30, 2010. Concurrently with the loan, the City entered into various other agreements including a cost sharing arrangement with the City of Mountain View. Pursuant to that agreement, the City of Mountain View agreed to finance a portion of the project with a $5 million loan repayable to the City. This loan has been recorded as 'Due from other government agencies' in the financial statements. The pledge of future Net Revenues of the above funds ends upon repayment of the $4.5 million principal and $0.9 million in -substance interest as the remaining debt service on the bonds as of June 30, 2017 with final payment occurring in Fiscal Year 2029. 2009 State Water Resources Loan In October 2009, the City approved an $8.5 million loan agreement with the State Water Resources Control Board (SWRCB) to finance the City's Ultraviolet Disinfection project. As of June 30, 2011, the full loan in the amount of $8.5 million was drawn down and became outstand- ing. Interest in the amount of $96,000 was accrued and added to the outstanding balance. The pledge of future Net Revenues of the above funds ends upon repayment of the $6.1 million principal and $1.2 million interest as the remaining debt service on the bonds as of June 30, 2017 with final payment occurring in Fiscal Year 2030. 2011 Utility Revenue Bonds, Series A On September 22, 2011 the City issued Utility Revenue Bonds to refinance the 2002 Utility reve- nue bonds which was issued for certain improvements to the City's water and natural gas utility system. The refinancing resulted in net present value savings of 16.9 percent and cash savings over 15 years of $4.0 million. Principal payments are due annually on June 1, and interest pay- ments are due semi-annually on June 1 and December 1 from 3 percent to 4 percent. The Reve- DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 149 DEBT SERVICE FUNDS OVERVIEW nue Bonds are secured by net revenues generated by the Water Services and Gas Services Funds. The pledge of future Net Revenues of the above funds ends upon repayment of the $10.2 million principal and $1.5 million interest as the remaining debt service on the bonds as of June 30, 2017 with final payment occurring in Fiscal Year 2026. Credit Rating Agencies Credit rating a critical component of strong municipal management. According to Moody's Investors Service, reserves are an important factor in the analysis of a municipality's fiscal health and, therefore, a jurisdiction's fiscal policies should include a plan for maintaining reserves. Rat- ing agencies view sound reserves favorably, thus improving a municipality's rating and its ability to obtain low-cost financing for important projects. The City is proud to report that both Moody's and Standard and Poor's (S&P) awarded their highest credit ratings, Triple A, to the City's General Obligation Bonds for library and community center capital improvements in 2010 and it was most recently reaffirmed in 2013. These ratings demonstrate that Palo Alto's pru- dent financial management and fiscal strength are viewed most favorably by credit agencies. The four Utility bonds (1995, 1999, 2009, & 2001) that are rated also received, by S&P, their high- est credit rating of Triple A. Moody's has rated these Utility bonds with their second highest (Aa1) or third highest (Aa2) ratings. 150 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW Debt Service Fund ■ Revenues Property Tax Return on Investments Subtotal Revenues Operating Transfers In Parking 2002B COPS Taxable - General Fund Library GO Bonds - Capital Subtotal General Fund Operating Transfers FY 2015 Actuals $ 4,633 0 4,633 0 238 0 238 FY 2016 Actuals $ 4,582 39 4,582 0 234 3,018 3,252 FY 2017 Adopted $ 4,655 0 4,655 0 243 0 243 FY 2018 Adopted $ 4,433 0 4,433 0 233 0 233 FY 2018 Change $ $ (222) 0 (222) 0 (10) 0 (10) FY 2018 Change% (4.8) % N/A (4.8) N/A (4.1) N/A (4.1) Total Source of Funds $ 4,871 $ 7,834 $ 4,898 $ 4,666 $ (232) (4.7)0/0 Expenses Parking 2002B COPS Taxable Principal Parking 2002B COPS Taxable Interest Library GO Bonds Debt Service Library GO Bonds Principal Library GO Bonds Interest $ 145 93 0 1,420 3,262 $ 150 84 32 6,585 4,146 $ 150 93 0 1,445 3,210 $ 170 63 0 1,570 2,863 $ 20 (30) 0 125 (347) 13.3% (32.3) N/A 8.7 (10.8) Total Use of Funds $ 4,920 $ 10,997 $ 4,898 $ 4,666 $ (232) (4.7) % Net to (from) Reserves $ (49) $ (3,163) $0 $0 $0 N/A DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 151 152 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY DEPARTMENTS CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 153 CITY OF PALO ALTO CITY ATTORNEY Mission Statement The Office of the City Attorney's mission is to serve Palo Alto and its policymakers by providing legal representation of the highest quality. Purpose The purpose of the Office of the City Attorney is to partner with City leaders to find creative approaches to the opportuni- ties and challenges that face Palo Alto; draft contracts, legislation, legal opinions, and other legal documents and negotiate on behalf of the City; provide training and advice on how to manage risk and comply with the law; and enforce the municipal code and defend the City when it is sued. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 155 CITY ATTORNEY CITY ATTORNEY Molly S. Stump 1.00 Senior Management Analyst 1.00 Secretary to City Attorney 1.00 Senior Legal Secretary 1.00 Claims Investigator 1.00 Chief Assistant City Attorney 3.00 Assistant City Attorney 2.00 Deputy City Attorney 1.00 Legal Fellow FY 2018 POSITION TOTALS 12.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 156 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY ATTORNEY Description The Office of the City Attorney legally represents the City by: providing legal advice and/or training to the City Council, City Manager, boards, commissions, and operating departments; investigating and resolving claims against the City; defending the City in litigation and administrative actions; initiating and prosecuting litigation on behalf of the City; and drafting and approving contracts, legislation, and other legal documents. Accomplishments ▪ Drafted ordinances advancing Council priorities, including dewatering regulations, retail preservation and new residential preferential permit parking districts. • Supported the design and implementation of election for new storm water management fee. ▪ Negotiated and drafted loan agreements and contract documents for multi -million dollar sludge dewatering facility and plant rehabilitation project at the Regional Water Quality Control Plant. ▪ Supported Council's housing initiatives, including new rules for accessory dwelling units and increases in development impact fees to fund affordable housing. ▪ Assisted with documentation and launch of various Smart Cities technology pilot projects. ▪ Supported electric utility cost of service study and new rate design. ▪ Updated standard City contracts to increase efficiency and ensure protective provisions are in place for professional services, purchase of goods and construction contracts. ▪ Drafted updates to the California Building Codes, including cutting -edge measures in green building and energy efficiency. Initiatives Perform legal services to: ▪ Complete negotiation and drafting of agreements for major infrastructure initiatives, including the public safety building, two new garages, bicycle and pedestrian bridge and a redesigned Junior Museum and Zoo. ▪ Support completion of natural gas cost of service study and new rate design, and programs to support green gas initiatives. • Draft and negotiate agreement to transfer a portion of the City's guaranteed water supply to East Palo Alto. • Support sustainability initiatives, such as electrification and electric vehicle adoption. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 157 CITY ATTORNEY • Support Caltrain electrification, exploration of grade separation options and quiet zones. • Draft ordinance addressing data collection and potential privacy impacts in City programs and service Goals and Objectives GOAL 1 Advance the public interest by providing high -quality legal representation to the City. Objectives: • Enhance relationships with clients as trusted advisors and strategic partners. ▪ Provide practical and effective advice that includes creative solutions to difficult problems. • Propose alternative, legally acceptable ways to accomplish public objectives when the City encounters legal obstacles. • Regularly brief City employees on legal developments that impact their areas of service. • Inform the public about the City's legal program through the City Attorney's website. GOAL 2 Evaluate all claims and litigation promptly, resolving disputes where appropriate, and vigorously defending the City's interests. Objectives: ▪ Thoroughly investigate to promptly resolve claims appropriately. ▪ Increase transparency by reporting claim filings and resolutions to the public. • Advocate effectively in court and before administrative agencies when legal actions are brought against the City. GOAL 3 Identify and reduce exposure to legal risks. Objectives: • Identify legal risks and craft strategies to reduce the City's exposure. ▪ Provide relevant training to City officials and staff to reduce legal risk exposure. • Create user-friendly tools to assist new and existing employees in complying with public service requirements such as ethics, conflicts of interest, open meeting, and public records laws. 158 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY ATTORNEY Key Performance Measures CLAIMS RESOLUTION Goal Objective Evaluate all claims and litigation promptly, resolving disputes where appropriate, and vigorously defending the City's interests. Thoroughly investigate to promptly and appropriately resolve claims. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of claims resolved within 45 days of filing Description Purpose Status 91.00% 93.00% 90.00% 90.00% 90.00% This measure tracks the number of claims that are resolved within 45 days of filing. Thorough investigation to promptly and appropriately resolve claims is a core responsibility of the Office of the City Attorney. This measure is important because timely processing of claims demonstrates responsiveness to residents' concerns and safeguards public resources by reducing unnecessary lawsuits. The number of claims resolved within 45 days may go up or down in part due to the complexity of a claim. REfUCTION OF LEGAL RISK Goal Identify and reduce exposure to legal risks. Objective Provide relevant training to City officials and staff to reduce legal risk exposure. Percent of surveyed who agree/ strongly agree that the training provided is useful and relevant Description Purpose Status FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted 90.00% 93.00% 90.00% 90.00% 90.00% This measure tracks the usefulness and relevance of the training provided by the Office of the City Attorney to City staff. By collecting this data, we can assess the relevance and usefulness of the training provided, and revise our training as needs change. Knowledgeable staff is less likely to make errors thereby reducing the exposure of liability to the City. In FY 2017, the Office of the City Attorney conducted training for Boards and Commissions, and Council Candidate orientation as well as other department trainings. In FY 2018, the Office of the City Attorney will conduct training on the Brown Act, Ethics, Public Records and contracting. Workload Measures Number of claims handled FY 2015 Actuals 95 FY 2016 Actuals 112 FY 2017 Adopted 95 FY 2017 Estimated 93 FY 2018 Adopted 98 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 159 CITY ATTORNEY 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ Dollars by Division Administration 224,549 463,073 553,824 571,995 18,171 Consultation and Advisory 1,567,456 1,477,082 1,872,448 2,002,460 130,012 Litigation and Dispute Resolution 693,500 771,956 636,168 661,247 25,078 Official and Administration Duties 100,276 84,335 116,104 120,198 4,094 Total 2,585,780 2,796,446 3,178,544 3,355,900 177,355 FY 2018 Change % 3.3% 6.9% 3.9% 3.5% 5.6% Dollars by Category Salary & Benefits Healthcare 157,307 134,723 221,194 256,190 34,997 15.8% Other Benefits 67,161 74,900 63,960 73,020 9,060 14.2% Pension 311,744 318,434 460,605 497,657 37,052 8.0% Retiree Medical 130,050 132,445 144,937 152,481 7,544 5.2% Salary 1,258,097 1,289,893 1,734,929 1,772,423 37,494 2.2% Workers' Compensation 2,878 21,609 59,526 37,917 175.5% Total Salary & Benefits 1,924,360 1,953,272 2,647,234 2,811,297 164,063 6.2% Allocated Charges 117,054 162,490 107,818 121,178 13,360 12.4% Contract Services 500,580 626,943 340,301 340,301 - -% Facilities & Equipment 10,538 1,000 1,000 - -% General Expense 23,653 23,881 53,642 53,642 -% Rents&Leases 1,683 1,295 2,050 2,050 -% Supplies & Material 18,450 18,026 26,500 26,432 (68) (0.3)% Total Dollars by Expense Category 2,585,780 2,796,446 3,178,544 3,355,900 177,355 5.6% Revenues Charges for Services 14,062 14,845 28,052 28,052 -% Charges to Other Funds 755,613 584,882 639,985 577,833 (62,151) (9.7)% Other Revenue 22,899 (2,191) 10,789 10,789 - -% Total Revenues 792,574 597,536 678,826 616,675 (62,151) (9.2)% Positions by Division Administration 1.47 1.47 1.47 1.47 - % 160 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY ATTORNEY 3udget Summary Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties Total Staffing Assistant City Attorney Chief Assistant City Attorney Job Classification City Attorney Claims Investigator Deputy City Attorney Legal Fellow FY 2015 Actuals 7.31 1.86 0.36 11.00 FY 2015 Actuals 1.00 1.00 1.00 1.00 Legal Services Administrator 1.00 Principal Attorney 1.00 Secretary to City Attorney 1.00 Senior Assistant City Attorney 2.00 Senior Deputy City Attorney 1.00 Senior Legal Secretary 1.00 Senior Management Analyst Sub -total: Full -Time Equivalent Positions Total Positions 11.00 FY 2016 Actuals 7.31 1.86 0.36 11.00 FY 2016 Actuals FY 2017 Adopted Budget 7.31 1.86 0.36 11.00 FY 2017 Adopted Budget FY 2018 Adopted Budget 7.31 1.86 0.36 11.00 FY 2018 Adopted Budget 1.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 - - 1.00 1.00 1.00 1.00 FY 2018 Change $ FY 2018 Change FTE 2.00 FY 2018 Change % -% FY 2018 Salary 560,394 1.00 220,397 - 270,712 96,075 1.00 130,104 96,470 1.00 1.00 (1.00) 1.00 1.00 1.00 73,882 2.00 2.00 (2.00) 1.00 1.00 - (1.00) - 1.00 1.00 1.00 - 71,947 1.00 1.00 120,952 11.00 11.00 11.00 11.00 1.00 11.00 1,640,933 11.00 11.00 - 1,640,933 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 161 CITY ATTORNEY 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 11.00 3,178,544 678,826 2,499,718 Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Information Technology Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment 171,473 (68) 20,401 (7,239) (1,158) 1,356 (62,151) 171,473 (68) 62,151 20,401 (7,239) (1,158) 1,356 Adjustments to Costs of Ongoing Activities 184,765 (62,151) 246,916 Total FY 2018 Base Budget 11.00 3,363,309 616,675 2,746,634 Budget Adjustments 1 City Attorney's Office Staffing Restructure (7,409) (7,409) Total Budget Adjustments (7,409) (7,409) Total FY 2018 Adopted Budget 616,675 2,739,225 ENAM REP 162 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY ATTORNEY 3udget Adjustments 1 City Attorney's Office Staffing Restructure - 0.00 (7, (7,409) This action consolidates the position and job classification structure in the City Attorney's Office resulting in the reallocation of 2.0 Senior Assistant City Attorney to 2.0 Assistant City Attorney, 1.0 Senior Deputy City Attorney to Deputy City Attorney (an additional 1.0 Senior Deputy City Attorney, budgeted in various utility funds will also be reallocated as detailed in the Table of Organization), and retitling 1.0 Principal Attorney to 1.0 Chief Assistant City Attorney. This classification restructure eliminates one job classification layer in the attorney classification series and aligns with industry standards. (Ongoing savings: $8,010) Performance Results The realignment will more accurately reflect the roles and responsibilities of the positions and streamline the classification series. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 163 CITY OF PALO ALTO Mission Statement CITY AUDITOR The mission of the Office of the City Auditor is to promote honest, efficient, effective, economical, and fully accountable and transparent City government. Purpose The purpose of the Office of the City Audi- tor is to conduct internal audits and exam- inations of any City department, program, service, activity, or fiscal transaction to provide the City Council and City manage- ment with information and evaluations regarding the effectiveness and efficiency with which City resources are employed, the adequacy of the system of internal controls, and compliance with City policies and procedures, and regulatory requirements. In addition, the City Auditor's Office ensures that City depart- ments and officers responsible for accounting and financial management activ- ities comply with statutory requirements and accounting standards, and provides other analyses of financial and operating data as directed by the City Council. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 165 CITY AUDITOR CITY AUDITOR Harriet Richardson 3.00 Senior Performance Auditor 1.00 Performance Auditor II 1.00 Performance Auditor I FY 2018 POSITION TOTALS 6.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 166 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY AUDITOR Description The Office of the City Auditor conducts performance audits and reviews of City departments, programs, and services. Performance audits provide the City Council, City management, and public with independent and objective information regarding the economy, efficiency, and effectiveness of City programs and activities. The Office of the Auditor (OCA) coordinates the annual citizen survey and issues the annual City of Palo Alto Performance Report summarizing costs, workload, and performance results for City services over the last ten years. Each fiscal year, the Office presents an annual audit work plan for City Council approval. The Office will continue to report quarterly to the City Council on the status of audit projects. The Office contracts with an independent certified public accountant for the City's annual external financial audit. The Office also conducts and coordinates revenue monitoring of sales and use tax. Accomplishments ▪ City Auditor Harriet Richardson received a national award from the Association of Government Accountants (AGA) for Excellence in Government Leadership for a state or local government professional. ▪ Identified and confirmed the City's receipt of $59,551 in sales and use tax recoveries through the end of Fiscal Year 2016. ▪ Published the Cable Franchise and Public, Education, and Government (PEG) Fee Audit, which presented nine recommendations related to PEG fees and the cable communications program and state franchises. ▪ Published the Disability Rates and Workers' Compensation Audit, which presented 15 recommendations to ensure the City's Workers' Compensation policies and Injury and Illness Prevention Program are implemented in a manner that minimizes injuries and illnesses and workers' compensation costs. ▪ Compiled the results of the 2016 National Citizen SurveyTM into data visualization software that allows users to view the results of each question or multiple questions based on selected demographics or geographic areas of Palo Alto. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 167 CITY AUDITOR Initiatives ▪ ERP Planning: Data Integrity, Reliability, and Security: Evaluate the integrity, reliability, and security of data in the current SAP system and make recommendations to ensure that any identified deficiencies are corrected prior to transferring data to the new ERP system. ▪ ERP Planning: Segregation of Duties: Evaluate the adequacy of segregation of duties for various activities in the current SAP system and make recommendations to ensure that any identified deficiencies are corrected for the new ERP system. • ERP Planning: Data and System Governance: Evaluate the adequacy of data and system governance in the current SAP system and make recommendations to ensure that any identified deficiencies are corrected for the new ERP system. • Business Registry (limited scope): Evaluate the rules and processes used to establish the business registry and make recommendations to help clean up the data and ensure accuracy in the future. ▪ Code Enforcement: Conduct survey of resident opinions on the quality of code enforcement. Evaluate code enforcement policies and practices for responsiveness, consistency, and follow-up, particularly for repeat offenders and complex cases. • Contract Risk and Oversight: Develop a systematic, data -driven process to identify high -risk expenditures and revenues that occur under formal contracts. Audit selected high -risk contracts to determine if the City has received the goods and/or services it paid for and/or revenues to which it is entitled, that the contracts are needed and do not result in unnecessary overlaps in services, and that potential contract extensions are appropriately disclosed in the original contract documents. ▪ Analysis of Agreements with PAUSD: Identify all agreements with PAUSD and the parties involved in each, and benchmark against other school districts to determine which services are generally provided by a school district or the city. Report will be an information report. ▪ Public Safety: Civilianization of Sworn Positions: Evaluate if the City can reduce costs by converting certain sworn public safety positions to nonsworn positions without increasing risk to an unacceptable level. Audit will include benchmarking with other public safety organizations. ▪ Sales and Use Tax Monitoring: The OCA monitors sales and use tax payments due to the City both through its own analysis and through partnering with a third party specialist. • Performance Report and Citizen -Centric Reporting: designed to provide residents, City Council, and City staff with important data and information regarding the performance of the City. Additionally, we publish the annual National Citizen SurveyTM which provides insight into residents' perceptions of the City's performance and allows the City to compare itself to other jurisdictions. • Administration of the Fraud, Waste, and Abuse Hotline: Incident routing and monitoring is administered by the OCA and the City Auditor is a member of the Hotline Review Committee with the City Manager and the City Attorney. 168 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY AUDITOR Goals and Objectives GOAL Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, or operations to assist the City Council and management in making informed decisions. Objectives: ▪ Focus on the City's highest risks by maintaining an effective, systematic, and documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. ▪ Provide impactful audit services through timely and value-added communication to key stakeholders regarding the effectiveness and efficiency with which City resources are employed, the adequacy of internal controls, and compliance with provisions of laws, regulations, contracts, grant agreements, and City policies and procedures. • Maintain an effective follow-up process to monitor and evaluate the adequacy, effectiveness, and timeliness of actions taken by management to address audit recommendations and report to the City Council whether city management has implemented the recommendation or has assumed the risk of not taking action. GOAL 2 Provide the residents of Palo Alto, City Council, City staff, and other stakeholders with informa- tion on past performance to strengthen public accountability, improve government efficiency and effectiveness, and support future decision -making. Objectives: ▪ Administer the National Citizen SurveyTM to collect data from survey respondents regarding the quality of City services. • Publish the City of Palo Alto Performance Report to provide consistent, reliable information on the performance of City services. • Contract with the City's external auditor for the completion of the City's Comprehensive Annual Financial Report (CAFR) and the Single Audit Report. GOAL 3 Maintain efficient and effective audit processes. Objectives: ▪ Maintain an efficient and effective system of quality control by regularly performing internal and external assessments, and periodically updating the Office of the City Auditor's policies and procedures to ensure compliance with professional standards and incorporation of applicable leading industry practices. ▪ Maintain an adequately skilled, knowledgeable, and competent staff of audit professionals. • Communicate the engagement's objectives, scope, conclusions, and recommendations accurately, objectively, clearly, concisely, constructively, completely, and in a timely manner. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 169 CITY AUDITOR /Key Performance V easures NUMBER OF MAJOR WORK PRODUCTS PER AUDIT STAFF Focus on the City's highest risks by maintaining an effective, systematic, and Goal documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Provide impactful audit services through timely and value-added communication to key stakeholders regarding the effectiveness and efficiency with which City Objective resources are employed, the adequacy of internal controls, and compliance with provisions of laws, regulations, contracts, grant agreements, and City policies and procedures. Number of major work products per audit staff. Description Purpose FY 2015 Actuals 1.14 FY 2016 Actuals 0.80 FY 2017 Adopted 1.50 FY 2017 Estimated 1.60 FY 2018 Adopted 1.20 This measure targets the number of major work products generated by each audit staff. In order to provide timely impactful audit services, the Office of the City Auditor has a target to complete 1.2 major work products per audit staff on an annual basis. The number of major work products generated by each audit staff is estimated to Status be at a higher level of 1.60 for FY 2017 due to changes in staff count which would increase the amount workload per person. PERCENT OF AUDIT RECOMMENDATIONS IMPLEMENTED OVER THE LAST FIVE YEARS. Goal Objective Percent of audit recommendations implemented over the last five years. Description Purpose Status Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, or operations to assist the City Council and management in making informed decisions. Maintain an effective follow-up process to monitor and evaluate the adequacy, effectiveness, and timeliness of actions taken by management to address the audit recommendations and report to the City Council whether City management has implemented the recommendation or has assumed the risk of not taking action. FY 2015 Actuals 42.00% FY 2016 Actuals 45.00% FY 2017 Adopted 75.00% FY 2017 Estimated 40.00% FY 2018 Adopted 75.00% This measures the effectiveness of audit recommendations. Recommendations are effective when they are addressed to parties that have authority to act and when the recommended actions are specific, cost-effective, and measurable. Each audit recommendation is provided to specifically enhance and improve the effectiveness and efficiency of the respective entity being audited. Departments are responsible to follow up on audit recommendations every six months from the date of issuance to the Policy and Services Committee with the goal of encouraging management to implement all audit recommendations in a timely manner. The City Auditor's Office must sign off on all audit recommendations before they are considered complete. Due to the number of audit recommendations as well as general capacity of departments, implementation time frames continue to lag. 170 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY AUDITOR RATIO OF SALES TAX REVENUE RECOVERIES TO COST Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, or operations to assist the City Council and management in making informed decisions. Focus on the City's highest risks by maintaining an effective, systematic, and Objective documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Goal FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Ratio of sales tax revenue recoveries to cost. Description Purpose Status Workload V 4:1 3:1 2:1 4:1 2:1 This measure is a ratio of sales tax revenue recovered by our in-house staff and our consultant to the total cost (salary and benefits plus contracted cost). To determine the effectiveness of cost recovery efforts for sales and use tax revenues. The Office of the City Auditor updates the amount of revenue generated on a quarterly basis. ensures FY 2015 FY 2016 FY 2017 FY 2017 Actuals Actuals Adopted Estimated FY 2018 Adopted Number of major work products issued. 4 4 8 8 6 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 171 CITY AUDITOR 3udget Summary Dollars by Division Audit Services Total Dollars by Category Salary & Benefits FY 2015 Actuals 1,099,838 1,099,838 FY 2016 Actuals 1,112,413 1,112,413 FY 2017 Adopted Budget 1,221,149 1,221,149 FY 2018 Adopted Budget FY 2018 Change $ 1,301,326 80,177 FY 2018 Change % 6.6% 1,301,326 80,177 6.6% Healthcare 33,295 38,475 47,864 42,992 (4,872) (10.2)% Other Benefits 30,419 36,498 24,331 27,750 3,420 14.1% Pension 141,379 157,746 169,812 184,894 15,082 8.9% Retiree Medical 31,684 31,616 34,598 36,399 1,801 5.2% Salary 562,385 612,070 641,056 659,949 18,893 2.9% Workers' Compensation - - 8,800 23,777 14,977 170.2% Total Salary & Benefits 799,161 876,405 926,461 975,761 49,301 5.3% Allocated Charges 54,966 55,053 45,689 53,306 7,617 16.7% Contract Services 221,644 157,381 231,719 254,000 22,281 9.6% General Expense 19,014 17,004 13,760 15,279 1,519 11.0% Supplies & Material 5,051 6,571 3,521 2,980 (541) (15.4)% Total Dollars by Expense 1,099,838 1,112,413 1,221,149 1,301,326 80,177 6.6% Category Revenues Charges to Other Funds 690,666 799,890 795,992 740,731 (55,261) (6.9)% Sales Taxes 59,302 117,186 150,000 150,000 - -% Total Revenues 749,968 917,076 945,992 890,731 (55,261) (5.8)% Positions by Division Audit Services 4.50 5.00 5.00 5.00 -% Total 4.50 5.00 5.00 5.00 - -% 172 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY AUDITOR Staffing Job Classification Administrative Assistant City Auditor Performance Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor Sub -total: Full -Time Equivalent Positions Total Positions FY 2015 Actuals 1.00 1.00 0.50 FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget 1.00 1.00 1.00 1.00 1.00 1.00 - - 1.00 1.00 1.00 — 2.00 2.00 2.00 2.00 4.50 5.00 5.00 5.00 — 611,042 FY 2018 Change FTE FY 2018 Salary 180,315 79,498 107,890 243,339 4.50 5.00 5.00 5.00 — 611,042 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 173 CITY AUDITOR 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Triennial Peer Review ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Adjustments to Costs of Ongoing Activities Total FY 2018 Base Budget Budget Adjustments 1 Citizen's Survey on Code Enforcement Total Budget Adjustments Total FY 2018 Adopted Budget 5.00 5.00 5.00 1,221,149 49,301 4,000 (741) 8,206 40 (2,780) 2,151 60,177 1,281,326 20,000 20,000 1,301,326 945,992 275,157 (55,261) (55,261) 890,731 890,731 49,301 4,000 (741) 55,261 8,206 40 (2,780) 2,151 115,438 390,595 20,000 20,000 410,595 174 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY AUDITOR 3udget Adjustments 1 Citizen's Survey on Code Enforcement = 0.00 Consistent with the Finance Committee recommended revisions made on May 18, 2017 and approved by the City Council on Jun 27, 2017 through the adoption of the Fiscal Year 2018 Operating Budget, this action provides $20,000 to the City Auditor's Office to conduct a citizen survey of resident opinions on the quality of code enforcement in Palo Alto. Information collected from the survey will augment the Code Enforcement Audit and improve the quality of the Code Enforcement Program. In addition, funding will provide some capacity for customized questions in the City's annual National Citizen SurveyTM. (Ongoing Costs: $0) 20,000 Performance Results © 0 Reaching out to citizens with a survey to collect opinions will allow the City to address issues related to code enforcement and increase customer satisfaction. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 175 CITY OF PALO ALTO CITY CLERK Mission Statement The City Clerk's Office promotes transparency and public engagement through coordinating the legislative process, records management, elections, public records requests, supporting the Mayor and City Council, and acting as a liaison between the City Council and the public. Purpose The purpose of the City Clerk's Office is to provide prompt, high quality public service by connecting the public with the legisla- tive process; ensure the City's legislative processes are open and transparent including friendly customer service, knowledgeable staff and easy accessibility through technology; elections administration; facilitate the preservation of Palo Alto's legislative history, including approved Minutes; coordination of public records requests, claims against the city, applications for boards and commis- sions, and update and maintain City Ordinances and the Municipal Code; pro- vide access to legislative meeting information, and coordinate Statements of Economic Interest as well as campaign and other financial disclosure related fil- ings. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 177 CITY CLERK CITY CLERK Beth Minor 1.00 Assistant City Clerk 1.00 Deputy City Clerk 2.00 Administrative Associate Ill FY 2018 POSITION TOTALS 5.75 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 0.75 Parking Examiner 178 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY CLERK Description The City Clerk's Office provides a wide range of public services including: providing support to the City Council, City staff, and public by providing copies of agendas and associated reports; posting and publishing legal notices, and scheduling public hearings; transcribing meeting minutes; recording of Ordinances and Resolutions; engaging in records management, elections, and board and commission recruitments; and processing of public records requests. Accomplishments ▪ Successfully managed the election of four open City Council Member seats. ▪ Successfully managed the Storm Water Management Fee mail ballot election. ▪ Held the fourth annual Board and Commission recognition event at the Palo Alto Art Center. ▪ Updated the Conflict of Interest Code with the assistance of every department. ▪ Successfully managed the Mayor's State of the City address at HanaHaus. ▪ Implemented DocuSign to electronically receive Board and Commission Applications. ▪ Received applications for Board and Commission vacancies resulting in 38 interviews totaling 8 hours of interviews in calendar year 2016. • Prepared and published 51 City Council meeting agenda packets, and 25 Finance and Policy and Services Committees agenda packets in calendar year 2016. ▪ Supported 341 plus hours of Council and Council Standing Committee meetings in calendar year 2016. • Scheduled and supported 348 administrative and citation hearings in calendar year 2016. Initiatives ▪ Assist with upgrade to the Council Chambers audio/video system. ▪ Work with departments to create a staff report writing guide. ▪ Continue streamlining the Citywide records destruction process. ▪ Audit vital records stored off -site. ▪ Update the Citywide email retention policy. ▪ Continue working with Board and Commission Staff Liaisons to transition their webpages to a table format for their agendas, minutes, and meeting recordings providing uniformity across City webpages. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 179 Goals and Objectives GOAL Lead the agenda management process and records management program promoting transpar- ency, accountability, and effective service delivery. Objectives: • Ensure that preparation and distribution of the Council's agenda packets are timely, accurate, and responsive. ▪ Transcribe and post Council action minutes within one week of meeting date. ▪ Effectively manage the records destruction process and maintain the Records Retention Schedule for all City departments. GOAL 2 Respond to the legislative needs of the City Council, staff, and the community in a timely and effective manner. Objectives: ▪ Utilize technology to enhance access to legislative items, such as agendas, reports, Ordinances, Resolutions, and Minutes on the City Council and City Clerk webpages. ▪ Encourage online filing of campaign statements in compliance with the Fair Political Practices Commission (FPPC) and Municipal Code requirements. ▪ Encourage staff, City Council, and Board & Commission Members to use online filing of Statement of Economic Interest forms. GOAL 3 Effectively administer appointments to boards and commissions. Objectives: • Improve boards and commissions recruitment process, including expanding application accessibility, exploring new methods of advertising, and continuing successful interview processes. • Create and maintain community partnerships to enhance the public's knowledge of, and interest in serving on boards and commissions. 180 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY CLERK Key Performance ti easures PERCENTAGE OF ACTION MINUTES POSTED WITHIN ONE WEEK AFTER THE COUNCIL MEETING Goal Objective Provide timely reporting of City Council action in support of City operations and transparency to the public. Transcribe and submit Council action minutes for approval within one week of each Council meeting. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of action minutes posted within one week after each Council meeting Description Purpose Status 90.00% 97.00% 96.00% 95.00% 95.00% After each Council meeting, the City Clerk's Office transcribes the draft actions that the Council took, and within one week submits these actions to Council for approval. This supports transparency and informed decision making, by providing the public with Council actions in a timely manner. Following a leadership change at the end of FY 2015, the City Clerk's Office has maintained a higher performance level with 95% to 97% of action minutes posted within one week after each Council meeting and anticipates 95% to be an appropriate and reasonable level of performance for FY 2018. PERCENTAGE OF COUNCIL AGENDA PACKET MATERIALS POSTED ON THE THURSDAY, 11 DAYS PRIOR TO THE MONDAY CITY COUNCIL MEETING Goal Lead the agenda management process and records management program promoting transparency, accountability, and effective service delivery. Ensure that the preparation and distribution of the Council's agenda packets are timely, accurate, and responsive. Objective FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of Council agenda packets posted on Thursday, 11 days prior to Monday Council meeting Description Purpose Status 90.00% 98.00% 95.00% 98.00% 98.00% The City Clerk's Office strives to distribute agenda packets to the City Council and public on Thursday, 11 days before the Council's Monday meeting in order to maximize the amount of time to review the packet. Provide the City Council and public with adequate time to review upcoming issues that will be discussed by the City Council, ensuring transparency of Council proceedings. Through implementing an 11 -day goal for posting City Council agenda packets, the City Clerk's Office coordinates with other City departments to accomplish this at a level of 95% to 98% of packets posted 11 days prior to the Monday council meeting and anticipates to continue to strive to achieve 98% for FY 2018. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 181 CITY CLERK PERCENTAGE OF PUBLIC RECORDS REQUESTS RESPONDED TO WITHIN THE TEN DAYS REQUIRED BY LAW Goal Respond to the legislative needs of the City Council, staff, and the community in a timely and effective manner. Objective Percentage of public records requests responded to within the ten days required by law Description Purpose Status Workload Provide excellent customer service to the public. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted 81.00% 98.00% 98.00% 99.00% 99.00% Public Records requests are required to be addressed within ten days of receipt. This could be the actual response or a request for an extension of time to gather the requested data. Provide the public with information that is held by the City and is subject to public disclosure; ensure that a response is received by the requester within the allotted ten days. The City is on target to exceed the 98 percent goal adopted for FY 2017. Measures Number of applications processed for open board and commission seats Number of City Council Meeting Action Minutes posted annually Number of weekly agenda packets produced annually Number of public records requests received annually FY 2015 Actuals 51 43 42 313 FY 2016 Actuals 40 57 46 299 FY 2017 Adopted 50 50 45 275 FY 2017 Estimated 60 48 42 355 FY 2018 Adopted 50 50 45 315 182 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY CLERK 3udget Summary Dollars by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 135,067 128,736 125,569 118,721 (6,849) 135,750 58,830 193,554 206,481 12,926 556,772 573,092 762,758 746,322 (16,435) 91,844 92,478 118,779 126,857 8,078 82,723 72,085 82,169 86,080 3,911 76,555 75,920 87,599 89,407 1,807 1,078,713 1,001,140 1,370,429 1,373,867 3,439 FY 2018 Change % (5.5)% 6.7% (2.2)% 6.8% 4.8% 2.1% 0.3% Dollars by Category Salary & Benefits Healthcare 57,814 52,139 85,251 66,350 (18,901) (22.2)% Other Benefits 19,297 15,909 22,495 25,875 3,380 15.0% Overtime 6,748 5,237 6,696 6,696 -% Pension 103,414 104,007 149,361 165,848 16,487 11.0% Retiree Medical 79,667 73,486 80,416 84,602 4,186 5.2% Salary 470,239 425,956 584,996 616,225 31,229 5.3% Workers' Compensation - 8,081 22,469 14,388 178.1% Total Salary & Benefits 737,179 676,733 937,296 988,064 50,768 5.4% Allocated Charges 161,423 129,850 148,187 145,096 (3,091) (2.1)% Contract Services 119,921 118,362 222,320 177,320 (45,000) (20.2)% General Expense 46,781 56,737 47,591 52,591 5,000 10.5% Supplies & Material 13,410 19,458 15,035 10,796 (4,239) (28.2)% Total Dollars by Expense Category 1,078,713 1,001,140 1,370,429 1,373,867 3,439 0.3% Revenues Charges for Services 288 1 2,043 2,043 -% Charges to Other Funds 399,786 513,239 511,957 487,528 (24,429) (4.8)% Other Revenue 313 493 3,143 3,143 1 -% Total Revenues 400,387 513,733 517,142 492,714 (24,428) (4.7)% CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 183 CITY CLERK 3udget Summary 1 Positions by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total Staffing Job Classification FY 2015 Actuals 0.35 1.23 2.85 0.65 0.50 0.65 6.23 FY 2015 Actuals FY 2016 Actuals 0.35 1.23 2.85 0.65 0.50 0.65 6.23 FY 2016 Actuals Administrative Associate III 2.00 2.00 Assistant City Clerk 1.00 1.00 City Clerk 1.00 1.00 Deputy City Clerk 1.00 1.00 Hearing Officer 0.75 0.75 Sub -total: Full -Time Equivalent 5.75 5.75 5.75 5.75 - 568,495 Positions Temporary/Hourly 0.48 0.48 0.48 0.48 - 30,099 FY 2017 Adopted Budget 0.35 1.23 2.85 0.65 0.50 0.65 6.23 FY 2017 Adopted Budget FY 2018 Adopted Budget 0.35 1.23 2.85 0.65 0.50 0.65 6.23 FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change FTE FY 2018 Change % -% FY 2018 Salary Total Positions 2.00 1.00 1.00 1.00 0.75 2.00 1.00 1.00 1.00 0.75 163,379 94,120 141,149 79,227 90,620 6.23 6.23 6.23 6.23 - 598,594 184 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY CLERK 3udget Reconciliation Prior Year Budget 6.23 1,370,429 517,142 853,287 Base Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments 50,768 (9,239) 7,754 (291) (3,120) (7,434) — 50,768 (9,239) (24,428) 24,428 7,754 (291) (3,120) (7,434) Adjustments to Costs of Ongoing Activities 38,438 (24,428) 62,866 Total FY 2018 Base Budget 1,408,867 492,714 916,153 Budget Adjustments 1 Boards & Commissions Recruitment Budget Reduction (35,000) (35,000) Total Budget Adjustments —I (35,000) (35,000) Total FY 2018 Adopted Budget 6.23 1,373,867 492,714 881,153 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 185 CITY CLERK 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Board & Commission Recruitment Budget Reduction 1 0.00 (35,000) 0 (35,000) This action aligns the non -salary budget to reflect reduced costs associated with the Boards & Commissions various recruitments. These recruitments have been consolidated into a bi-annual process, with one recruitment in the spring and fall of each year resulting in a reduced number of annual recruitments. As the number of annual recruitments are reduced, annual costs associated with recruitments such as the quantity of newspaper advertisements purchases will also decrease. This consolidation reflects a more financially efficient recruitment, resulting in savings with no impact on the Boards & Commissions recruitment. (Ongoing net savings: $35,000) Performance Results This reduction reflects a more cost-effective recruitment strategy for Board & Commission recruitments resulting in an ongoing expenditure savings that does not impact the performance of the City's Boards and Commissions recruitments. 186 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY COUNCIL Mission Statement The City Council's mission is to develop an overall vision for the community as a whole. Purpose The City Council is responsible for the scope, direction, and financing of City ser- vices; establishing policy based on infor- mation provided by staff, advisory boards and commissions, and the general public; and implementing policy through staff under the Council -Manager form of gov- ernment. Description Under the Council -Manager form of government, the City Council is responsible for the legislative functions of the City such as establishing policies and priorities, developing an overall vision, and approving the annual spending plan for the City. The terms of the Mayor and the Vice - Mayor are one year, expiring at the first meeting in January. The terms of Council members are four years, and the General Municipal Election is held in even -numbered years on the first Tuesday after the first Monday in November. CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 187 CITY COUNCIL 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division City Council Operations 360,551 429,737 501,444 499,824 (1,620) (0.3)% Total 360,551 429,737 501,444 499,824 (1,620) (0.3)% Dollars by Category Salary & Benefits Healthcare Other Benefits Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services General Expense Supplies & Material Total Dollars by Expense Category Revenues Charges to Other Funds Total Revenues Positions by Division 95,567 107,922 116,473 77,303 (39,170) (33.6)% 10,172 13,328 4,762 5,614 852 17.9% 13,700 15,081 25,026 32,827 7,801 31.2% 77,652 76,049 83,222 87,553 4,332 5.2% 67,310 69,965 86,400 108,000 21,600 25.0% - - 1,227 4,270 3,044 248.1% 264,401 282,346 317,110 315,568 (1,542) (0.5)% 1,219 2,285 15,949 15,871 (78) (0.5)% 44,712 111,373 108,000 108,000 -% 47,199 31,251 57,455 57,455 -% 3,021 2,483 2,930 2,930 -% 360,551 429,737 91,042 99,396 501,444 499,824 77,099 95,624 (1,620) (0.3) % 18,525 24.0% 91,042 99,396 77,099 95,624 18,525 24.0% City Council Operations 9.00 Total Staffing City Council Job Classification Sub -total: Full -Time Equivalent Positions Total Positions 9.00 9.00 9.00 9.00 9.00 9.00 9.00 FY 2015 Actuals 9.00 9.00 9.00 FY 2016 Actuals 9.00 9.00 9.00 FY 2017 Adopted Budget 9.00 9.00 FY 2018 Adopted Budget 9.00 9.00 9.00 9.00 FY 2018 Change FTE -% -% FY 2018 Salary 108,000 108,000 108,000 188 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY COUNCIL 3udget Reconciliation Prior Year Budget 9.00 501,444 77,099 424,345 Base Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Information Technology Allocated Charges Adjustment (1,542) 1,474 (1,542) 18,525 (18,525) 1,474 (1,141) — (1,141) (411) (411) Adjustments to Costs of Ongoing Activities (1,620) 18,525 (20,145) Total FY 2018 Base Budget Total FY 2018 Adopted Budget 9.00 9.00 499,824 499,824 95,624 95,624 404,200 404,200 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 189 CITY OF PALO ALTO CITY MANAGER The City Manager's Office provides leadership and professional management to the City government organization and works with the City Council to develop and implement its policies to maintain and enhance Palo Alto's quality of life. The City Manager's Office adheres to guid- ing values that emphasize community, stewardship, and public service. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 191 CITY MANAGER CITY MANAGER OPERATIONS 0.25 Assistant City Manager/Utilities General Manager 2.00 Deputy City Manager 2.00 Assistant to the City Manager SUPPORT 1.00 Executive Assistant to the City Manager 1.00 Administrative Assistant 1.00 Administrative Associate Ill COMMUNICATIONS 1.00 Chief Communications Officer 1.00 Communications Manager FY 2018 POSITION TOTALS 10.25 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 192 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY MANAGER Description The City Manager's Office provides strategic leadership and guidance to the City operations and services for the City of Palo Alto through the following areas (including incubation of new programs): ADMINISTRATION AND CITY MANAGEMENT Provides the organizational support and leadership necessary to implement Council programs and policies to meet the City's current and future needs; ensures City operations demonstrate transparency and fiduciary responsibility to the public; builds a strong service culture and pro- vides ongoing, informative communications to City employees regarding key objectives, chal- lenges and accomplishments. PLACE AND NEIGHBORHOODS Fosters an informed and engaged community; develops mutual understanding and support between City government and the community by proactively communicating public informa- tion, creating and supporting community partnerships, and facilitating citizen involvement; cul- tivates livability by recognizing the distinctiveness and diversity of Palo Alto and its neighborhoods. ECONOMIC VITALITY Develops programs in support of a healthy, prosperous economic environment; maintains col- laborative relationships with residents and businesses to facilitate desired economic activity. Accomplishments The City Manager's Office provides leadership and professional management to the City gov- ernment organization. The accomplishments demonstrated throughout the budget document, within the department chapters, are a consequence of the overall guidance provided by the office. In addition to these many accomplishments, the office completed a series of key projects and activities through its general administration, public communication and economic develop- ment duties: ▪ Supported City Council priority setting and agenda planning while providing leadership and guidance to the organization. ▪ Supported City Council election cycle by providing candidate orientation forums to increase knowledge and awareness about key City priorities, projects, and functions. • Advanced organizational excellence through work plans, support for professional development and work/life balance, and performance management through the Executive Leadership Team. ▪ Played a key role with the San Francisquito Creek Joint Powers Authority to break ground on Phase 1 Flood Protection Project and continued progress with upstream next phase CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 193 elements, beginning the environmental clearance and coordination with stakeholders including Stanford University. ▪ Supported emergency preparedness and ready response throughout winter storm season. ▪ Coordinated advocacy for Santa Clara County Measure B transportation tax, with particular attention to grade separation funding and the flexible use of street paving funds. • Continued ongoing interdepartmental focus on Caltrain safety. • Negotiated extension of Stanford University fire/emergency services agreement, and restarted negotiations on a new long term agreement. ▪ Assisted with efforts to resolve key land use issues including Buena Vista, Edgewood Plaza, Palo Alto Square and Castilleja School. • Transitioned essential leadership and staff positions, restructuring the office to ensure the execution of key City Council priorities. ▪ Supported the Police Department during the retirement of the Police Chief and Assistant Police Chief, and began recruitment efforts for a new Police Chief. • Collaborated with Santa Clara Cities Association and the Administrative Services Department regarding regional minimum wage implementation leading to City Council approval on September 26, 2016. ▪ Coordinated with the Planning and Community Environment Department regarding the activities for approval of the Comprehensive Plan. • Restructured City's state and federal legislative program by utilizing resources in the Utilities Department while continuing to advance City Council and City department goals. ▪ Hosted several international delegations including representatives from China, European Union, Kenya, Holland, Germany, Taiwan, and United Arab Emirates. • Provided communications advice and support for issue specific efforts ranging from storm and floods to the Center for Disease Control Epi-Aid report. • Supported multiple community outreach efforts on variety of issues aimed at increasing civic participation, feedback and engagement. ▪ Produced and published multi -platform communications content related to City Council and organizational goals and programs; further expanded social media channel reach and provided responsive, informed and timely information to community, public and media stakeholders. ▪ Administered the Know Your Neighbor Grant Program encouraging neighborhood activities that foster a sense of place and community. • Organized the Bike Palo Alto & Expo which featured local vendors of cargo bikes, electric scooters, three -wheeled bikes, electric assist bikes, and many other ways to get around town other than driving a car solo. • Led Veteran Day Recognition Event to honor the armed services and hosted Lieutenant General Rex C. McMillian, Commander of Marine Forces Reserve and Marine Forces North, for the ceremony. 194 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY MANAGER • Partnered with local community groups to host the United Nations Association Film Festival throughout various City locations and assisted with the California Avenue Trick or Treat Halloween event. ▪ Continued to advance the Animal Services Assessment leading to a nonbinding exclusive negotiation with Pets In Need, a local nonprofit animal rescue. • Advanced efforts to address impacts of air traffic by supporting the local Congressional Select Committee which resulted in numerous recommendations to the Federal Aviation Administration (FAA). ▪ Continued partnership with the Department of Veterans Affairs regarding impacts of their development project at their Palo Alto location on citizens and the Bol Park Bike Path. • Continued to support key business districts such as Downtown Palo Alto, California Avenue, Stanford Shopping Center and the Stanford Research Park, during vacancy of Economic Development Manager, to ensure outreach regarding minimum wage, parking and development activity. Initiatives • Continue to support the City Council, the priority setting process, and regular, special, and committee meetings. • Continue to provide leadership and professional management to the City government organization. ▪ Advance City Council priority projects through the new staffing structure while promoting the high performance organization and smart cool cities initiatives. • Work with Rail Committee, citizens, and stakeholders to achieve consensus on a grade separation strategy for the Caltrain intersections. • Organize the delivery of City parking services and reach agreement on a paid parking strategy. • Continue and complete negotiations with Stanford University regarding fire safety services. • Advance international programs through our partnership with Neighbors Abroad to create new smart city relationships with existing sister cities and vice versa to transition existing sister city relationships into smart sister cities to share knowledge, experience and best practices related to government services and innovation. • Continue to support the City Council and departments with federal and state legislative priorities and goals. ▪ Continue to work with Congress, FAA, San Francisco International Airport, San Jose International Airport, other local governments, regional organizations or groups and citizens to implement goals and measures that reduce aircraft noise. • Continue to work collaboratively with Department of Veteran Affairs regarding impacts from their development activity at their Palo Alto location. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 195 CITY MANAGER • Continue to lead the Animal Shelter assessment for City Council consideration of a possible new service model. ▪ Assess the future of the City's current website platform for usability, responsiveness and mobile accessibility. • Further advance the City's digital engagement and online presence through responsiveness and quality content to both inform and engage the community. • Provide strategic communications support to departments across the city with a focus on programs and projects under the Council priorities. ▪ Provide strategic support for outreach efforts specifically related to infrastructure projects including parking garages and major downtown construction projects. ▪ Continue partnership with businesses to advance the City's economic development goals and to meet the needs of business owners with regards to, but not limited to, transportation, parking and development. ▪ Continue to administer the Know Your Neighbors Grant Program to foster sense of place and community. Goals and Objectives GOAL 1 Implement the City Council's policy direction and ensure their goals and objectives are achieved in a timely manner. Objectives: • Provide timely, accurate, and results -oriented financial and operational reports. ▪ Lead the development of citywide business plans that support achievement of the Council's policies and priorities. ▪ Maintain a highly qualified, engaged, and effective workforce to successfully attain the City's goals and objectives. GOAL 2 Lead the City's management team to ensure the provision of high -quality, cost-effective, and customer -focused services. Objectives: • Provide data and analytics to support informed decision -making processes. ▪ Improve the efficiency of the City's infrastructure, facilities, and equipment to support environmental and fiscal sustainability. • Facilitate a high level of citizen satisfaction with City services. GOAL 3 Advocate sound financial planning by developing and implementing Operating and Capital Improvement Program (CIP) budgets. 196 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY MANAGER Objectives: • Advance structural reforms to ensure the City lives within our means. ▪ Expand the use of innovation, performance management, and community partnerships to maintain and/or enhance public services. • Balance and manage economic growth and sustainability initiatives. GOAL 4 Promote and sustain citizen participation and engagement in public matters. Objectives: • Engage public and private partners to advance community initiatives. ▪ Expand outreach efforts and communications platforms to broaden citizen participation in local government and community matters. • Ensure timely and responsive resolution to citizens' inquiries. • Preserve transparency and enhance communication with the public. Key Performance CITIZEN SATISFACTION Goal Objective Percent of surveyed who rated the Quality of City Services as "Good" or "Excellent" Percent of surveyed who rated the Value of Services for the Taxes Paid as "Good" or "Excellent" Percent of surveyed who rated the Overall Image/Reputation of the City as "Good" or "Excellent" Description Purpose Status V ensures Lead the City's management team to ensure the provision of high -quality, cost- effective, and customer -focused services. Facilitate a high level of citizen satisfaction with City services. FY 2015 Actuals 85.00% 65.00% 88.00% FY 2016 Actuals 81.00% 58.00% 86.00% FY 2017 Adopted 87.00% FY 2017 Estimated 85.00% 67.00% 62.00% 92.00% 89.00% FY 2018 Adopted 87.00% 67.00% 92.00% The City participates in the National Citizen Survey (NCS), which is a collaborative effort between National Research Center, Inc. and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Residents' feedback on the quality of services provided by the City allows staff to evaluate performance and identify opportunities for improvement. Although Palo Alto continues to rank above the benchmark, the City will expand efforts to understand citizen satisfaction measures and how to continue to exceed citizens expectations. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 197 CITY MANAGER ECONOMIC VITALITY Goal Objective Advocate sound financial planning by developing and implementing Operating and Capital Improvement Program (CIP) budgets. Balance and manage economic growth and development initiatives. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Overall quality of business and service establishments rated as "Good" or "Excellent" Percent of surveyed rating economic development as "Good" or "Excellent" Description Purpose Status 77.00% 72.00% 69.00% 61.00% 81.00% 75.00% 81.00% 71.00% 65.00% 71.00% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of economic development and business and service establishments. The NCS is a collaborative effort between the National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Understanding the community perception of the business environment allows staff to work with developers and investors to ensure the right make-up of business and services are located in Palo Alto. Although Palo Alto continues to rank above the benchmark, the high cost of commercial real estate has had an impact on local services. The City continues to work with business owners to increase parking supply, walkability and enhance public spaces with arts and events to increase customers experience. OPEN GOVERNMENT AND COMMUNICATION Goal Promote and sustain citizen participation and engagement in public matters. Objective Preserve transparency and enhance communication with the public. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of surveyed rating the City's public info services as "Good" or "Excellent" Percent of surveyed attending a local public meeting Description Purpose Status 82.00% 78.00% 84.00% 82.00% 84.00% 22.00% 21.00% 25.00% 25.00% 25.00% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of local government media services. The NCS is a collaborative effort between National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Robust levels of community awareness and participation demand communication systems that are timely, accurate, meaningful, and readily accessible. Although Palo Alto continues to rank above the benchmark, the City will be expanding efforts to increase transparency, information sharing and outreach. 198 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY MANAGER Workload V ensures FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Number of City Council and City Council Committee meetings Total Hours of City Council and City Council Committee meetings 87 353 86 372 90 300 98 420 96 412 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 199 CITY MANAGER 3udget Summary Dollars by Division Administration and City Management Economic Development Public Communication Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,773,746 2,462,341 2,350,270 2,876,223 525,953 22.4% 323,762 305,249 273,615 48,877 (224,738) (82.1)% 269,974 331,769 260,103 234,528 (25,575) (9.8)% 2,367,482 3,099,359 2,883,989 3,159,629 275,640 9.6% Dollars by Category Salary & Benefits Healthcare 94,919 147,338 160,273 182,959 22,686 14.2% Other Benefits 94,343 125,036 84,359 60,696 (23,663) (28.1)% Overtime 126 - -% Pension 229,622 384,662 415,331 481,227 65,895 15.9% Retiree Medical 105,936 108,257 112,770 118,640 5,870 5.2% Salary 1,028,485 1,436,369 1,558,120 1,715,490 157,370 10.1% Workers' Compensation 2,750 6,708 20,310 53,288 32,978 162.4% Total Salary & Benefits 1,556,181 2,208,371 2,351,162 2,612,298 261,136 11.1% Allocated Charges 117,868 172,614 127,757 135,673 7,916 6.2% Contract Services 583,831 506,711 311,185 311,185 -% Facilities & Equipment 1,364 21,870 -% General Expense 95,175 171,623 79,391 88,641 9,250 11.7% Operating Transfers -Out 2,039 2,039 2,039 2,039 - -% Rents & Leases 64 75 154 154 - -% Supplies & Material 10,960 16,055 12,301 9,639 (2,662) (21.6)% Total Dollars by Expense Category 2,367,482 3,099,359 2,883,989 3,159,629 275,640 9.6% Revenues Charges to Other Funds 749,418 881,211 935,746 1,455,335 519,590 55.5% Other Revenue 207 - - -% Total Revenues 749,418 881,418 935,746 1,455,335 519,590 55.5% 200 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET CITY MANAGER 3udget Summary 1 Positions by Division Administration and City Management Economic Development Public Communication Total Staffing Administrative Assistant Administrative Associate III Assistant City Manager Assistant City Manager/Utilities General Manager Assistant to the City Manager FY 2015 Actuals 7.10 FY 2016 Actuals 7.10 FY 2017 Adopted Budget 7.10 FY 2018 Adopted Budget 9.35 FY 2018 Change $ FY 2018 Change % 2.25 31.69% 1.10 1.00 1.00 (1.00) (100.00)% 0.90 0.90 0.90 0.90 -% 9.10 9.00 9.00 10.25 1.25 13.89% FY 2015 Actuals 1.00 1.00 2.00 FY 2016 Actuals 1.00 1.00 2.00 FY 2017 Adopted Budget 1.00 1.00 2.00 FY 2018 Adopted Budget 1.00 1.00 0.25 FY 2018 Change FTE FY 2018 Salary 88,525 81,689 (2.00) - 0.25 71,250 2.00 2.00 Chief Communications Officer 1.00 1.00 1.00 1.00 - Chief Sustainability Officer 0.05 - - - - City Manager 1.00 1.00 1.00 1.00 Deputy City Manager 2.00 2.00 1.00 1.00 1.00 1.00 - Executive Assistant to the City Manager 300,000 196,227 298,542 357,000 100,131 Manager Communications 1.00 1.00 1.00 1.00 - 112,757 Manager Economic Development 1.00 1.00 1.00 (1.00) Sub -total: Full -Time Equivalent 9.05 9.00 9.00 10.25 1.25 1,606,122 Positions Temporary/Hourly 0.05 - Total Positions 9.10 9.00 9.00 10.25 1.25 1,606,122 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 201 CITY MANAGER 3udget Reconciliation Prior Year Budget 9.00 2,883,989 935,746 1,948,243 Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments City Manager's Office Realignment (CMR #7227), approved on October 24, 2016 Town Hall Meeting Funding (CMR #7176), approved on August 22, 2016 ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Expense Increases General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities 62,696 1.25 198,441 8,000 (2,662) 1.25 1,250 18,389 (7,253) (6,563) 3,342 275,640 519,589 519,589 62,696 198,441 8,000 (2,662) 1,250 (519,589) 18,389 (7,253) 3,342 (237,386) Total FY 2018 Base Budget Total FY 2018 Adopted Budget 10.25 10.25 3,159,629 3,159,629 1,455,335 1,455,335 1,710,857 1,710,857 202 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES • Mission Statement The Administrative Services Department strives to provide proactive financial and analytical support to City departments and decision makers, and to safeguard and facilitate the optimal use of City resources. Purpose The purpose of the Administrative Services Department is to provide excellent cus- tomer service to decision makers, the pub- lic, employees, and City departments; to provide analytical, organizational, and administrative support for a wide variety of projects; to record, monitor, and protect City assets in a responsible manner; to provide essential financial management and forecasting reports; and to pre- pare and present financial reporting to various committees and City Council. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 203 ADMINISTRATIVE SERVICES ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER La to Perez ADMINISTRATION 1.00 Administrative Assistant 0.50 SeniorManagementAnalyst REAL ESTATE 1.00 Real Property Manager 1.00 Senior Management Analyst 1.00 Assistant Director ACCOUNTING 1.00 Accounting Manager GENERAL LEDGER 1.00 Senior Accountant 1.00 Accountant 1.00 Lead Account Specialist ENTERPRISE FUND 1.00 Senior Accountant 2.00 Accountant 1.00 Account Specialist ACCOUNTS PAYABLE 1.00 Senior Accountant 1.00 Lead Account Specialist 2.00 Account Specialist 1.00 1.00 2.00 PAYROLL Senior Accountant Accountant Payroll Analyst PURCHASING & CONTRACTS 1.00 Chief Procurement Officer 4.00 Contract Administrator 1.00 Administrative Associate II 1.00 Buyer 2.00 SeniorBuyer SAP FUNCTIONAL 1.00 Principal Business Analyst 2.00 Senior BusinessAnalyst OFFICE OF MANAGEMENT AND BUDGET 1.00 Director 1.00 Budget Manager 1.00 Administrative Associate III 4.60 Senior Management Analyst 1.00 Assistant Director INVESTMENT & DEBT 0.60 ManagerofTreasury,Debt Investment 0.40 Senior Management Analyst REVENUE COLLECTIONS 1.00 ManagerofRevenue Collections 2.00 Lead Account Specialist 5.50 Account Specialist STORES WAREHOUSE 1.00 Warehouse Supervisor 1.00 Lead Sorekeeper 3.00 Storekeeper RISK MANAGEMENT 0.40 ManagerofTreasury, Debt & Investment 0.10 Senior Management Analyst PRINT & MAIL SERVICES 2.00 Offset Equipment Operator FY 2018 POSITION TOTALS 59.10 Full-time 2.54 Hourly lhisorganizational chart represents citywide Full -Time Equivalents(I-Its) forthisdepartment.lhe Department Summarytablessummarize Fltsby position allocation. 204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES Description The Administrative Services Department (ASD) is responsible for the following functions: ADMINISTRATION Provides financial, analytical, budget, strategic, and administrative support services for the department and organization. ACCOUNTING Performs financial transactions and provides accurate, timely and reliable financial information for internal and external customers, including vendor payments, payroll, and financial reporting. PURCHASING AND CONTRACTS Works with departments to facilitate their purchasing and contracting needs in a timely, effi- cient, and customer -oriented manner. OFFICE OF MANAGEMENT AND BUDGET (OMB) Oversees the citywide budget preparation, review and analysis, performance measures, and budget monitoring. PROPERTY MANAGEMENT AND ACQUISITION Provides asset management, acquires property rights, manages leasing of City's properties, prepares real estate agreements, completes easement acquisition/vacation, negotiates real estate deals and provides real estate services citywide. TREASURY Collects, safeguards, and invests revenue; issues and manages debt; and provides print shop and warehouse services. Accomplishments • Facilitated the maintenance of the City's AAA credit rating, which results in the lowest possible borrowing costs. • Managed the City's real estate leases resulting in revenue of $4.1 million. ▪ Continued implementation of a strategic plan for the department emphasizing four focus areas: customer service, innovation, best practices, and employee excellence. • Implemented online, self -paced training platform, expanded upon the application of eProcurement capability (PlanetBids). ▪ Began significantly reducing paper and office supply consumption of the City and generating operational efficiency by introducing a new multifunctional printer and managed print services networked program (MFP/MPS) along with an Electronic Document ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 205 ADMINISTRATIVE SERVICES Management System (EDMS) city-wide. The plan forward is to reduce cost initially by 20% then by at least 5% per year over the next three to five years. ▪ Followed best practices for Accounts Payable electronic payments, using Automated Clearing House (ACH) payments where possible. • Maintained employee excellence focusing on employee rating form, training plans, and specific goals improving customer service and responsiveness. • Continued implementation of the citywide procurement process improvements to improve efficiency and align with industry best practices, including new key metrics reporting, knowledge management solution, and electronic document management. ▪ Continued to expand DocuSign eSignature and electronic workflow for key department forms and facilitated the expanded citywide rollout of DocuSign. ▪ Explored and identified options for Council to address long-term unfunded liabilities for pension. ▪ Marketed and executed the sale of 2,500 square feet of Transfer Development Rights for the record price of $400 per square feet and paid the amount of $300,000 of the proceed to Environmental Volunteers for capital improvement of the Sea Scout Building. • Completed 20 easements and easement vacations. ▪ Completed the transition to paper free workflow in Purchasing and continued to expand scanning and electronic archiving in ASD and other city departments. • While continuing to uphold the City's policy effort in using recycled paper, the bulk of paper and toner cost has been rolled up into the new managed print services program to further extend cost savings and improve on office operations efficiency. ▪ Participated in citywide emergency preparation and planning to ensure financial support and reporting will be part of a coordinated emergency response effort. • Developed and implemented business processes to reduce instances of duplicate vendor payments. ▪ Received 'Excellence in Financial Reporting' from Government Finance Officers Association (GFOA) for the City's FY 2016 Comprehensive Annual Financial Report (CAFR). Initiatives ▪ Continue implementation of the ASD strategic plan in four focus areas: 1) High quality customer service, 2) Innovation and continuous improvement, 3) Best practices, 4) Employee excellence, including: customer support resources in purchasing, payroll and accounting, and implementation of electronic forms. ▪ Implement new procurement process improvement recommendations, including the new eProcurement system for managing solicitations and vendor relations and contract management. 206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES • Implement department -wide, technology -focused, core competency training such as: SAP module specific training for support resources and SAP reporting training in the human resources and payroll modules. ▪ Explore option to move current manual garage parking permit process to online platform. • Establish a cooperative purchasing mall to streamline the purchasing process while ensuring competitive pricing and compliance with policies and procedures. • Provide additional funding options for unfunded pension liability beyond the annual contributions. ▪ In conjunction with the Office of Emergency Services, continue to build out the financial support for emergency preparation to include templates for federal financial reporting after a disaster. ▪ Identify funding sources and investment options for Council to consider to address the City's unfunded liabilities for pension and healthcare. • Continue implementation of the paperless office program to the Accounting and Real Estate divisions of the Department. Budget Summary Dollars by Fund General Fund -Operating Printing & Mailing Services Fund Total Revenues Charges for Services Charges to Other Funds Net Sales Other Revenue Other Taxes and Fines Property Taxes Return on Investments Total Revenues FY 2015 Actuals 7,132,943 1,247,186 8,380,129 FY 2016 Actuals 7,497,404 1,289,499 8,786,902 FY 2017 Adopted Budget 7,797,896 1,297,453 9,095,349 FY 2018 Adopted Budget 7,982,836 1,453,146 9,435,982 FY 2018 Change $ 184,940 155,693 340,633 FY 2018 Change % 2.4% 12.0% 3.7% 16,082 28,124 12,570 12,570 — —% 4,651,562 5,248,028 4,905,882 4,454,246 (451,636) (9.2)% — 300 — — — —% 48,206 264,307 51,400 161,500 110,100 214.2% (1,380) — — — — —% 3,720 — — — —% (291) (1,441) 400 400 —% 4,714,179 5,543,038 4,970,252 4,628,716 (341,536) (6.9)% Positions by Fund General Fund 42.22 41.04 41.50 40.06 (1.44) (3.47)% Printing and Mailing Services 1.62 1.62 2.10 2.10 —% Total 43.84 42.66 43.60 42.16 (1.44) (3.30)% ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 207 ADMINISTRATIVE SERVICES GENERAL FUND Goals and Objectives GOAL 1 ▪ Ensure the City of Palo Alto's short and long-term financial status is healthy and sound. Objectives: ▪ Assist with implementation of Council's Infrastructure Plan by providing updated financial planning and issuance of debt. ▪ Review opportunities for new and/or enhanced revenues. ▪ Analyze additional options for reducing the City's pension and retiree healthcare long-term liabilities. ▪ Provide long-term recommendations and strategies for City's real estate assets and risk reduction such as Cubberley, Ventura, and Middlefield road lots. • Manage real estate assets effectively to enhance revenue and reduce cost. ▪ Recommend a strategically balanced budget within Council -approved reserve levels for City Council consideration. ▪ Assist with ongoing labor negotiations with analysis of labor and City proposals. • Develop plans for addressing any forecast shortfalls in funding for operations and infrastructure. GOAL 2 . Provide timely and accurate financial reporting and transactions. Objectives: • Ensure that payroll processing, vendor payments, budget, and annual financial reporting are clear, timely, accurate, and in compliance with governmental finance standards. ▪ Enhance financial reporting mechanisms to ensure that departmental financial information is relevant and timely. • Increase information availability and transparency using open data tools and dashboards. GOAL 3 . Ensure public funds and assets are invested prudently and well -managed. Objectives: . Ensure sufficient cash is always available to meet current expenditures. . Maintain a reasonable rate of return on investments. 208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES GOAL 4 • Continue implementation of the ASD Strategic Plan in the focus areas of customer service, innovation, best practices, and employee excellence. Objectives: • Continue implementing a succession plan for the department. ▪ Review ASD policies and procedures to continuously update and enhance. ▪ Rollout training and resources for customer support to improve processing time. ▪ Enhance training plans for employees for job specific training and career development. ▪ Implement new tools for team collaboration and sharing, such as SharePoint. /Key Performance V ensures ANNUAL PERCENTAGE YIELD ON INVESTMENTS Goal Ensure public funds and assets are invested prudently and are well -managed. Objective Maintain a reasonable rate of return on investments. FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Annual percentage yield on investments Description Purpose Status 1.95% 1.82% 1.85% 1.95% 2.10% This measure tracks the City's annual rate of return on investments while following primary objectives (in priority order) of safety, liquidity, and yield. A stable rate of return helps to grow the City's investment portfolio, and is one component in measuring the City's financial rating. As anticipated with a declining interest rate environment, the City's adopted goal of 1.85 percent is estimated to be achieved in FY 2017. In comparison, the State Investment Pool average yield through March FY 2017 is 0.07% and the five year treasury average for FY 2016 was 1.00%. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 209 ADMINISTRATIVE SERVICES AVERAGE PROCESSING TIME FOR PURCHASE REQUISITIONS Implement performance management programs to support and enhance communication, accountability, and positive outcomes. Continue developing and implementing Procurement and Inventory process improvements. Goal Objective FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Track the average time from receipt of a Purchase Requisition to issuance of Purchase Order (Days) Description Purpose Status Workload V 25.00 15.00 15.00 23.00 23.00 The City is required to follow procurement rules and regulations as outlined in the Municipal Code and State Law to ensure open and fair competition and the most cost-effective use of tax dollars. In compliance with existing rules and regulations, ASD endeavors to provide goods and services as quickly as possible to City departments. To measure the average processing time for Purchase Requisitions (PR) in order to identify processing improvements while being compliant with existing rules and regulations. In FY 2017, the Purchasing Division began to build on process improvements with increased training and new software solutions to increase efficiency and reduce turnaround time. Despite the process improvements, staff anticipates an increase in larger, more complex PRs in FY 2018 involving significant dollars and City Council decisions, therefore increasing estimated cycle time. The increase is associated with the increasing capital program expenditures. ensures Number of P -card (City credit card) transactions Number of purchase orders and purchase requisitions processed Total amount of cash and investments - as of June 30 (Millions) FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted 17,799 20,349 18,748 1,694 3,496 2,271 $544.70 $539.70 $516.00 FY 2017 Estimated 19,000 FY 2018 Adopted 20,000 2,300 1,784 $515.00 $520.00 210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division Accounting 1,693,803 2,031,310 2,090,866 2,273,096 182,230 8.7% Administration 683,735 797,339 679,892 452,517 (227,374) (33.4)% Office of Management and Budget 1,162,381 1,154,119 1,314,523 1,559,404 244,881 18.6% Purchasing 1,581,425 1,543,130 1,508,372 1,503,022 (5,350) (0.4)% Real Estate 669,499 556,027 623,443 641,373 17,930 2.9% Treasury 1,342,101 1,415,478 1,580,800 1,553,424 (27,376) (1.7)% Total 7,132,943 7,497,404 7,797,896 7,982,836 184,940 2.4% Dollars by Category Salary & Benefits Healthcare 561,528 566,126 716,258 729,465 13,206 1.8% Other Benefits 157,648 177,754 138,100 164,266 26,165 18.9% Overtime 35,716 45,516 33,723 33,723 -% Pension 898,851 979,873 1,105,467 1,238,194 132,727 12.0% Retiree Medical 523,211 490,474 536,733 564,670 27,937 5.2% Salary 3,777,732 4,120,344 4,280,155 4,212,658 (67,496) (1.6)% Workers' Compensation 19,488 13,346 58,206 150,294 92,088 158.2% Total Salary & Benefits 5,974,174 6,393,433 6,868,642 7,093,269 224,628 3.3% Allocated Charges 392,693 451,507 363,446 367,541 4,095 1.1% Contract Services 379,154 395,562 261,921 255,648 (6,274) (2.4)% Facilities & Equipment 3,693 10,071 6,200 4,200 (2,000) (32.3)% General Expense 331,358 199,071 239,374 214,924 (24,450) (10.2)% Rents & Leases 12,363 12,363 12,856 12,856 - -% Supplies & Material 39,508 35,396 45,457 34,398 (11,059) (24.3)% Total Dollars by Expense 7,132,943 7,497,404 7,797,896 7,982,836 184,940 2.4% Category Revenues Charges for Services 16,082 28,124 12,570 12,570 - -% Charges to Other Funds 3,387,378 3,952,406 3,608,829 3,001,500 (607,330) (16.8)% Net Sales 300 -% Other Revenue 48,206 264,307 51,400 161,500 110,100 214.2% ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 211 ADMINISTRATIVE SERVICES 3udget Summary Other Taxes and Fines Property Taxes Total Revenues FY 2015 Actuals (1,380) FY 2016 Actuals 3,720 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % -% -% 3,450,285 4,248,857 3,672,799 3,175,570 (497,230) (13.5)% Positions by Division Accounting 13.90 12.90 13.60 13.60 -% 1.30 1.60 2.08 1.60 (0.48) (23.08)% Office of Management and Budget 6.82 6.62 6.02 6.62 0.60 9.97% 9.83 9.35 9.53 8.57 (0.96) (10.07)% 2.60 2.80 2.32 2.32 - - % 7.77 7.77 7.95 7.35 (0.60) (7.55)% 42.22 41.04 41.50 40.06 (1.44) (3.47)% Administration Purchasing Real Estate Treasury Total Staffing Account Specialist Account Specialist -Lead Job Classification Accountant Administrative Assistant Administrative Associate II Administrative Associate Ill Assistant Director Administrative Services FY 2015 Actuals 5.95 4.59 2.00 1.00 1.00 1.65 Buyer 2.00 Chief Procurement Officer 1.00 Contracts Administrator 1.70 Director Administrative Services/ CFO Director Office of Management and Budget Manager Accounting Manager Budget 0.70 1.00 FY 2016 Actuals 4.95 4.59 3.00 1.00 FY 2017 Adopted Budget 5.88 4.05 3.00 1.00 1.00 1.00 1.75 1.65 2.00 1.00 1.70 1.00 1.00 1.70 0.70 0.80 1.00 1.00 FY 2018 Adopted Budget 4.88 3.05 3.00 1.00 1.00 1.00 1.65 1.00 1.00 FY 2018 Change FTE (1.00) (1.00) FY 2018 Salary 346,880 232,065 255,133 88,525 1.00 76,210 81,689 323,581 2.70 1.00 0.80 1.00 100,337 142,730 285,624 187,466 175,989 1.00 1.00 1.00 1.00 - 155,168 1.00 1.00 1.00 - 154,000 212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES Staffing Job Classification Manager Real Property Manager Revenue Collections Manager Treasury, Debt & Investments Payroll Analyst FY 2015 Actuals 1.00 FY 2016 Actuals 1.00 0.70 FY 2017 Adopted Budget 1.00 0.62 FY 2018 Adopted Budget 1.00 0.62 FY 2018 Change FTE FY 2018 Salary 145,246 87,925 1.00 0.60 0.60 - 82,992 2.00 2.00 2.00 2.00 169,536 Principal Management Analyst 1.00 Senior Accountant 3.00 3.00 3.00 3.00 - 321,069 Senior Buyer - - 1.00 1.00 - 101,361 Senior Management Analyst 5.90 4.20 4.90 4.90 - 634,366 Storekeeper 1.00 1.00 73,992 Storekeeper -Lead 1.00 1.00 0.20 0.20 15,837 Warehouse Supervisor 0.50 0.50 0.20 0.20 19,602 Sub -total: Full -Time Equivalent 37.99 38.09 38.60 38.60 - 4,257,321 Positions Temporary/Hourly 4.23 2.95 2.90 1.46 (1.44) 83,300 Total Positions 42.22 41.04 41.50 40.06 (1.44) 4,340,621 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 213 ADMINISTRATIVE SERVICES 3udget Reconciliation Prior Year Budget Base Adjustments One Time Prior Year Expenditures Deleted Temporary Management Specialist (e - Procurement and SAP) Temporary Purchasing Contract Administration Specialist One Time Prior Year Expenditures Deleted Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Purchase Card Rebate Increase Property Tax Liability Adjustment ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Vehicle Replacement and Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities Total FY 2018 Base Budget Budget Adjustments 1 Purchasing Division Staffing Realignment 2 Non -Salary Reductions Total Budget Adjustments Total FY 2018 Adopted Budget 41.50 7,797,896 (0.48) (74,880) (0.48) (53,974) (0.96) (128,854) 40.54 (0.48) (0.48) 40.06 333,100 (17,950) (5,059) 43,437 (4,700) (17,757) 23,908 (40,793) 314,186 7,983,228 21,382 (21,774) (392) 7,982,836 3,672,800 110,100 4,125,096 (74,880) (53,974) (128,854) 333,100 (110,100) (17,950) (5,059) (607,330) 607,330 (497,230) 3,175,570 3,175,570 43,437 (4,700) (17,757) 23,908 (40,793) 811,416 4,807,658 21,382 (21,774) (392) 4,807,266 214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Adjustments 1 Purchasing Division Staffing Realignment -0.48 — 21,382 This action realigns various positions in the Purchasing Division in order to meet current business needs. Adjustments include eliminating 1.0 Account Specialist -Lead and eliminating 0.48 part-time Management Specialist, adding 1.0 Contracts Administrator, and reclassifying 1.0 Account Specialist to Administrative Associate II. The addition of 1.0 Contracts Administrator and the elimination of 1.0 Account Specialist -Lead and 0.48 Management Specialist reflect the need for increased capacity and purchasing expertise in order to meet the demands of the City's significant investment in capital improvements. This increase in capacity and expertise enables the division to eliminate temporary assistance that has historically been used and provides a long term staffing strategy. The reclassification of 1.0 Account Specialist to 1.0 Administrative Associate II more accurately aligns current duties with the appropriate job classification. In FY 2017, a classification study was completed by Koff & Associates which recommended Administrative Associate II as the appropriate classification for the duties assigned. (Ongoing net costs: $21,656) Performance Results © 0 This will maintain purchasing contract cycle times, which improves performance for customer departments since the volume of complex capital transactions are increasing. 2 Non -Salary Reductions I I (21,774) (21, 774) This action reduces non -salary expenses by $21,774. The reductions are attributed to adoption of new technology and processes used to consolidate expenses for supplies, memberships, document scanning, and non -capital office machinery. (Ongoing net savings: $21,774) Performance Results This action will capture the cost savings associated with improved processes to decrease the burden on the General Fund. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 215 ADMINISTRATIVE SERVICES PRINTING AND MAILING SERVICES Accomplishments • Processed 330,000 utility bills. • Maintained timelines for producing council packets. • In December 2016, the print shop updated their production equipment with the latest Xerox technology in order to improve the quality of color requests. Initiatives • Maintain a high level of customer service for Printing and Mailing. ▪ Provide quality printing products. • In January 2017, postage equipment was replaced with a more efficient model which allows for faster processing of the Utility bills as well as other mail. Goals and Objectives GOAL `W • Provide timely and high quality services for City departments, City Council, and Committees. Objectives: • Continue analyzing additional cost saving options. • Ensure timely distribution of mail and utility bills. • Ensure timely creation and distribution of City Council and Committee packets. • Reduce outsourcing of color job requests with the implementation of new color equipment. 216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Summary Dollars by Division Printing and Mailing Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,247,186 1,289,499 1,297,453 1,453,146 155,693 12.0% 1,247,186 1,289,499 1,297,453 1,453,146 155,693 12.0% Dollars by Category Salary & Benefits Healthcare 30,672 32,606 35,546 25,455 (10,092) (28.4)% Other Benefits 3,358 3,742 2,355 3,099 744 31.6% Overtime 2,458 2,832 - -% Pension 21,394 26,657 29,316 31,537 2,221 7.6% Retiree Medical 61,815 54,687 59,845 62,960 3,115 5.2% Salary 103,410 122,022 127,551 132,598 5,046 4.0% Workers' Compensation 204 409 1,439 4,566 3,127 217.3% Total Salary & Benefits 223,311 242,956 256,053 260,214 4,161 1.6% Allocated Charges 154,758 183,441 194,794 204,255 9,461 4.9% Contract Services 67,886 34,411 114,711 249,642 134,931 117.6% General Expense 354,264 347,081 286,975 286,975 - -% Operating Transfers -Out - - 3,154 3,154 -% Rents & Leases 317,932 376,213 364,662 368,649 3,987 1.1% Supplies & Material 129,034 105,397 80,258 80,258 -% Total Dollars by Expense Category 1,247,186 1,289,499 1,297,453 1,453,146 155,693 12.0% Revenues Charges to Other Funds 1,264,184 1,295,623 1,297,053 1,452,747 155,694 12.0% Return on Investments (291) (1,441) 400 400 -% Total Revenues 1,263,893 1,294,182 1,297,453 1,453,147 155,694 12.0% Positions by Division Printing and Mailing Total 1.62 1.62 2.10 2.10 - - % 1.62 1.62 2.10 2.10 - -% ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 217 ADMINISTRATIVE SERVICES Staffing Manager Revenue Collections Job Classification Offset Equipment Operator Senior Management Analyst Sub -total: Full -Time Equivalent Positions FY 2015 Actuals 1.52 0.10 1.62 FY 2016 Actuals 0.10 1.52 1.62 FY 2017 Adopted Budget 0.10 1.52 1.62 FY 2018 Adopted Budget 0.10 1.52 1.62 FY 2018 Change FTE FY 2018 Salary 14,181 102,886 117,068 Temporary/Hourly — — 0.48 0.48 — 27,232 Total Positions 1.62 1.62 2.10 2.10 — 144,300 218 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Reconciliation 1,297,453 ositions Expenditures Revenues Net Printing and Mailing Services Base Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments ARC Document Solutions (Print & Mail Allocated Charges Realignment) Rents & Leases Expenditure Alignment General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Fund Allocated Charges Adjustment 4,161 4,161 134,931 134,931 0 3,987 — 29,850 — 1,320 (8,378) (2,953) 3,987 29,850 1,320 (8,378) (2,953) (10,378) 20,763 (31,141) Adjustments to Costs of Ongoing Activities 152,539 155,694 (3,155) Total FY 2018 Base Budget 2.10 1,449,992 1,453,147 (3,155) Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 3,154 3,154 Total FY 2018 Adopted Budget 2.10 1,453,146 1,453,147 (1) ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 219 ADMINISTRATIVE SERVICES 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Printing and Mailing Services 1 Supplemental Pension Trust Fund Contribution 0,00 3,154 3;15% This action establishes a transfer from the Print and Mail Service Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $3,154 which represents approximately 10% of the Print and Mail Service Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 220 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES Mission Statement The Community Services Department's mission is to engage individuals and families in creating a strong and healthy community through parks, recreation, social services, arts, and sciences. Purpose The purpose of the Community Services Department is to provide a diverse range of quality programs and services that are highly valued and relevant to the needs of the community. Community Services aims to develop and provide programs for increased knowledge, creativity, artistic expression, physical activity, social help, and enjoyment of the outdoors; seeks to be responsible stewards of the many unique community assets including open space, parks and their related interpretive centers, Children's Theatre, Palo Alto Art Center, Junior Museum and Zoo and three community centers at Cub- berley, Mitchell Park and Lucie Stern and the Palo Alto Public Art collection; seeks to provide comfortable, safe, and attractive facilities; strives for sustain- able practices that lower the City's carbon footprint; and develops and main- tains mutually beneficial partnerships and collaborations with local organizations, businesses, individuals, and foundations to achieve its mission. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 221 COMMUNITY SERVICES COMMUNITY SERVICES DIRECTOR Robert de Geus HUMAN SERVICES 1.00 Human Services Manager 1 .00 Management Assistant ADMINISTRATION 2.00 Assistant Director 1.00 Senior Management Analyst 1.00 Management Analyst 1.00 Administrative Assistant 1.00 Administrative Associate III OPEN SPACE, PARKS & GOLF DIVISION 1.00 Division Manager, Open Space, Parks & Golf 1.00 Open Space, Parks & Golf Superintendent 1.00 Program Assistant II OPEN SPACE 2.00 Community Services Manager 5.00 Park Ranger PARKS ADMINISTRATION 1.00 Parks Superintendent CITY PARKS & FACILITIES 2.00 Inspector, Field Services 4.00 Sprinkler System Representative 1.00 Park Maintenance - Lead 1.00 Community Services Manager 2.00 Parks/Golf Crew - Lead 6.00 Park Maintenance Person CAPITAL PROJECTS 1.00 Coordinator Public Works Projects RECREATION DIVISION 1.00 Recreation Superintendent LUCIE STERN COMMUNITY CENTER 1.00 Community Services Manager 2.00 Program Assistant I 1.00 Program Assistant II 2.00 Coordinator, Recreation Programs MITCHELL PARK COMMUNITY CENTER 1.00 Community Services Senior Program Manager 1.00 Program Assistant I 1.00 Program Assistant II 2.00 Coordinator, Recreation Programs CUBBERLEY COMMUNITY CENTER 1.00 Community Services Manager 1.00 Program Assistant II 1.00 Program Assistant I 2.00 Building Service Person -Lead 2.00 Building Service Person ARTS & SCIENCES DIVISION PALO ALTO ART CENTER 1.00 Community Services Manager 4.25 Producer Arts & Sciences 1.00 JMZ Educator 1.00 Program Assistant I PUBLIC ART PROGRAM 1.00 Community Services Senior Program Manager 1.00 Program Assistant II CHILDREN'S THEATRE 1.00 Community Services Senior Program Manager 1.00 Theater Specialist 3.75 Producer Arts & Sciences 1.00 Program Assistant I JUNIOR MUSEUM AND ZOO 1.00 Community Services Senior Program Manager 1.00 Theater Specialist 3.00 Producer Arts & Sciences 2.60 JMZ Educator 1.00 Program Assistant I FY 2018 POSITION TOTALS 80.60 - Full-time 66.27 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary table summarizes FTEs by position allocation. 222 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES Description The Community Services Department operates three divisions and an Office of Human Services, providing the following services to the community: ARTS AND SCIENCES Provides visual and performing arts, music and dance, and science programs to youth and adults, including a focus on family programs. The division manages the Art Center, Junior Museum and Zoo, Children's Theatre, Community Theatre, Cubberley Theatre, the Public Art Program, the Cubberley Artist Studios Program, and the MakeX studio. OPEN SPACE, PARKS, AND GOLF Maintains nature interpretive centers and operates more than 4,000 acres of open space and urban parkland. The division offers programs in ecology and natural history in open space, maintenance of facilities for outdoor recreational use in City parks, and a full -service golf com- plex. RECREATION Provides a diverse range of programs and activities for the community, establishing a culture of health and well-being for families and individuals of all ages. Programs include childhood learning, youth development, teen services, summer camps, organized sports, aquatics, special events, and a wide variety of adult recreation classes. The Recreation Division manages and operates three community centers and the Rinconada Pool. OFFICE OF HUMAN SERVICES Provides funding and coordinates grants to nonprofit organizations through the Human Ser- vices Resource Allocation Process (HSRAP). Provides oversight of the afterschool child care program, Palo Alto Mediation Program, the Family Resources data base, and serves as a key liai- son to local social services organizations and child care providers. Accomplishments • Renovation of Byxbee Park was completed in May 2017, transforming the former landfill to parkland with 2.3 miles of new trails. New park benches, interpretive signs, a group seating area, and native planting islands have also been added to enhance the visitor experience and improve the habitat. Recently, burrowing owls have started using the site. • The Baylands Nature Center Improvement project was completed on March 3, 2017 and opened on Earth Day, April 22, 2017. The project improved and upgraded the nature center, which was built in 1969. Improvements include swallows nesting features on the exterior of the building where by droppings will now fall harmlessly into the marsh rather than on the park benches and walkway. This project also replaced the decking, railing, structural COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 223 COMMUNITY SERVICES framing members, exterior wood siding, flooring, cabinets, and restroom. The new accessible restroom includes a nature mural. ▪ The Parks, Recreation, Natural Open Space and Trails Master Plan is expected to be completed by June 2017. The community, Parks and Recreation Commission (PRC) and Council provided significant contributions to the Master Plan throughout the planning process. The Master Plan represents the vision for the City's system of parks, open space, trails and recreation facilities and programs for the next twenty years and will guide staff, the PRC and City Council on future improvements to the system. ▪ Progress has been made on the Healthy City Healthy Community Resolution and initiatives including a community Health Fair (in partnership with the YMCA), submittal of an application to the World Health Organization to become an Age -Friendly Community, and a Healthy Palo Alto website, which provides a list of city resources that support a healthy lifestyle. ▪ In FY 2017, the synthetic turf at Stanford Palo Alto Playing Fields was replaced with a new type of synthetic turf and infill that contains no crumb rubber and provides a cooler surface temperature. Also in FY 2017, Sarah Wallace Park was renovated with new park benches, pathways, trash and recycling containers, and landscaping. ▪ The Think Fund grant program, formerly known as Bryant Street Garage Fund, funded a total of 15 grants as of March 2017. The Think Fund also granted the first teen -run hackathon, "Teens Exploring Code". With over 200 attendees, this 12 -hour hackathon event was a huge success with approximately 12 computer programming projects being created by teens. • The Palo Alto Art Center continues to expand its attendance, serving a record 108,840 people last fiscal year. In FY 2017, the Art Center continued celebrating its 45th anniversary, showcasing successful and critically acclaimed exhibition and program series including Fired Up: Monumental Clay and 45 Days of Clay. This innovative program engaged thousands of community members in free educational programs and supported the creation of new work by exhibiting artists and artists -in -residence. • The Public Art Program received a grant for $30,000 from the National Endowment for the Arts and raised more than $30,000 in corporate sponsorship to support Code:ART, a three day, new media festival in downtown Palo Alto. The festival featured nine installations that activate plazas, alleys and parking structures in the downtown area with temporary installations meant to stimulate conversation regarding the future of downtown Palo Alto. ▪ The Public Art Program completed its 10 year Public Art Master Plan and has begun to implement the recommendations by updating policies and procedures, increasing the diversity of temporary and permanent public art experiences, and addressing a number of artworks in the permanent collection identified as most in need of treatment, including the Arnautoff frescoes at the Roth Building and the California Avenue Underpass mural. ▪ The Palo Alto Children's Theatre, celebrating its 85th Anniversary, continued an eight -year trend of record attendance reaching more than 52,000 audience members in FY 2017. With funding from Partners in Education (PIE), the theatre's Dance in Schools and outreach initiatives served more than 8,000 Palo Alto Unified School District (PAUSD) elementary 224 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES students in 3rd through 5th grades. The theatre also premiered a new, commissioned work, The Ballad of Phineas McBoof, funded through the support of the theatre's nonprofit arm organization, Friends of the Palo Alto Children's Theatre. ▪ A Lucie Stern Community Center renovation project was completed in April 2017, adding air conditioning, a fire sprinkler system, updating air ducts and wiring, and converting wood burning fireplaces to more eco-friendly gas fireplaces. The facility is a popular spot for weddings and was featured in "Here Comes the Guide" as one of the top 12 affordable wedding locations in the Bay Area. ▪ In coordination with the Art Center, Cubberley Artist Studio Program (CASP) installed a new print studio, which will be available for artists and the public beginning July 2017. The printing press was donated through the generous support of the Paula Z. Kirkeby family. ▪ In March 2016, the Human Relations Commission (HRC) held a community forum titled, Being Different Together, to raise awareness of implicit biases and how stereotypes affect interactions in schools, workplaces, and civic and community life. The forum was well attended and stimulated a meaningful dialogue on the topic. This forum was followed with a series of four conversations called Being Different Together -Taking the Conversation Deeper. These thought provoking conversations took participants on a "journey together" towards building and nurturing a community that models respect for differences such as race, religion, gender, origin, sexual orientation, socio-economic status, political affiliation and opinion. These were very timely conversations and directly addressed the sentiments in the December 2016 Council Resolution on "Reaffirming Palo Alto's Commitment to a Diverse, Supportive, Inclusive, and Protective Community." • The City of Palo Alto Community Services Department hosts several special events that have been long-standing traditions in Palo Alto. Seven new events were added and many more involve partnerships with other organizations. For FY 2017, these included: The Fourth of July Chili Cook -Off; the Community Health Fair; the Moonlight Run; Veterans Day Recognition; Holiday Tree Lighting; New Year's Eve Champagne Brunch; Martin Luther King Celebration; the Great Race for Saving Water; May Fete Parade; World Music Day; Summer Camp Registration Survivor Fair (New); Bryant Street Garage Fund Grantee Gala (New); Journey for Veterans Walk (New); Teen Buoyancy Festival (New); Bike Expo Event (New); Palo Alto Golf Tournament (New); and Honoring the Journey Black History Month Celebration (New). ▪ The Recreation Division's Boost! Fitness Programs served over 200 seniors, providing a supportive environment to stay active and maintain mobility. A Boost! Fitness member recently turned 90 years old and credits her longevity and good health to attending recreation's fitness programs that are part of the City Council's Healthy City, Healthy Community resolution. • Project Safety Net had two major accomplishments: (1) led community engagement activities for Centers for Disease Control and Prevention (CDC) investigation into youth suicide in Santa Clara County and (2) rolled out 3 -Year Roadmap based on the Collective Impact with the goal to engage community stakeholders, measure impact, and advance youth wellbeing. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 225 COMMUNITY SERVICES Initiatives • The City of Palo Alto's long-awaited Golf Course Reconfiguration Project will be completed in the fall of 2017. This project will transform the Municipal Golf Course into a Baylands links - style course incorporating the native look and feel of the Palo Alto Baylands. ▪ The Buckeye Creek Hydrology Study is underway and will provide recommendations to solve the creek's erosion problems adjacent to Las Trampas Valley and the maintenance area in Foothills Park. The study will be complete in September 2017. ▪ Work on the Baylands Comprehensive Conservation Plan will continue, the plan will provide guidance on managing the habitat, wildlife, and appropriate recreation at the Baylands Nature Preserve. The plan is anticipated to be completed in the fall of 2018. • This year staff will release a request for proposals to bring on a design consultant to assist with a master plan for the Cubberley Community Center. A stakeholder and community engagement plan will be a significant element of the master planning process. Community Services will be working closely with the Palo Alto Unified School District during the master planning process. • The Public Art Program is developing new artworks for municipal projects, such as Fire Station 3, the Charleston/Arastradero corridor, the Junior Museum and Zoo, the Municipal Golf Course, parking garages in downtown and California Avenue, as well as managing dozens of public art in private development projects expected to be constructed in the next few years. ▪ The construction of a new Junior Museum and Zoo (JMZ) facility will begin, in partnership with the Friends of the JMZ who raised $25 million, and is expected to re -open in FY 2020. Design and planning for the project is well underway; construction is expected to begin in early 2018. ▪ Recreation has added several new special events including an upcoming Dogtoberfest in October 2017 in response to survey data collected in the summer of 2016. Staff will continue to engage with the community to plan future special events. ▪ In FY 2018 the Mitchell Park Adobe Creek Bridge will be replaced. The pathways on each side of the bridge were renovated to meet ADA standards, but the Bridge is only five feet wide and poses safety issues for pedestrians and bicyclists. The new bridge will meet ADA standards. In addition, the Ramos Park playground will be renovated, and some of the amenities will be replaced. Goals and Objectives GOAL I Provide high -quality, relevant, and diverse services and programs to the public. Objectives: • Achieve a high level of customer satisfaction for all programs and services offered by the department. 226 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES • Increase public awareness of, and participation in, recreational services. • Ensure programs are responsive to a broad range of needs within the community. GOAL 2 Ensure parks and recreational areas are safe and environmentally sensitive. Objectives: • Maintain grounds to be in good condition and facilities to be in good repair. • Protect public land and utilize best management practices for environmental preservation. GOAL 3 Provide innovative, well -managed programs and services. Objectives: ▪ Increase and diversify community involvement and volunteerism. ▪ Monitor cost recovery to facilitate sustainability of programs and services. • Explore partnerships with other agencies to maximize services for the public. Key Performance Measures COMMUNITY SERVICES DEPARTMENT ONLINE REGISTRATION AND EFFICIENCY Goal Provide innovative, well managed programs and services. Objective Increase online class registration. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of class registrations occurring online Description Increase self-service, efficient and convenient online class registration processes. Purpose Increase staff productivity and capacity. Status Currently, online class registration is the preferred method of registration. 64.00% 51.00% 68.00% 55.00% 60.00% COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 227 COMMUNITY SERVICES COMMUNITY SERVICES DEPARTMENT OPEN SPACE AND PARKS Goal Objective Ensure parks and recreational areas are safe and environmentally sensitive. Protect public land and utilize best management practices for environmental preservation. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of surveyed who rate the City's success in preserving natural areas as "Good" or "Excellent" Description Purpose Status 64.00% 78.00% 81.00% 79.00% 81.00% This measure tracks resident responses when asked to rate Palo Alto's preservation of natural areas such as open space and green belts in an annual National Citizen Survey (NCS). The Department maintains and manages 4,029 acres of open space including Foothills Park, Baylands Nature Preserve, Pearson- Arastradero Preserve and Esther Clark Nature Preserve. The City participates in the NCS, which asks residents to rate their perception of local government services. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinions about the quality of life in the community. It is important for the City to solicit feedback from and respond to residents regarding the services and programs provided. Palo Alto ranked 15th out of 207 jurisdictions in the 2016 National Citizen Survey for preservation of natural areas such as open space and green belts. CroMMUNITY SERVICES DEPARTMENT PROGRAMS AND SERVICES Goal Objective Provide high quality, relevant, and diverse services and programs to the public. Ensure programs are responsive to a broad range of needs within the community. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of surveyed who rate recreation programs/classes as "Good" or "Excellent" Description Purpose Status 84.00% 84.00% 88.00% 85.00% 88.00% The Department's motto is "Engage, Create, Enjoy!" to enhance the quality of life. We offer diverse experiences for children, teens, and adults of all ages. This measure tracks resident responses when asked to rate Palo Alto's recreation programs or classes in the annual National Citizen Survey (NCS). The City participates in the NCS, which asks residents to rate their perception of local government services. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinions about the quality of life in the community. It is important for the City to solicit feedback from and respond to residents regarding the services and programs provided. Palo Alto's ratings were similar to other cities in the survey benchmark (average ratings in all other cities). Residents' ratings ranked Palo Alto 48th of 309 jurisdictions in the 2016 National Citizen Survey . 228 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES Workload V ensures Total Enrollment in classes/camps in arts, sciences, recreation, and open space programs Average Enrollment in classes/ camps in arts, sciences, recreation, and open space programs 14,622 FY 2016 Actuals 14,494 FY 2017 Adopted 15,500 20 23 21 FY 2017 Estimated 15,000 21 FY 2018 Adopted 15,500 22 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 229 COMMUNITY SERVICES 3udget Summary Dollars by Division Administration and Human Services FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 3,774,060 3,938,106 3,914,460 3,987,583 73,124 FY 2018 Change % 1.9% Arts and Sciences 5,049,313 5,440,712 5,919,433 6,213,537 294,103 5.0% Open Space, Parks and Golf 8,919,376 9,004,816 8,910,489 10,479,195 1,568,706 17.6% Recreation and Cubberley 5,306,247 5,894,212 6,652,338 6,886,620 234,283 3.5% Total 23,048,996 24,277,846 25,396,719 27,566,935 2,170,216 8.5% Dollars by Category Salary & Benefits Healthcare 1,462,442 1,484,629 1,851,810 1,851,818 8 -% Other Benefits 211,846 229,568 202,918 259,224 56,305 27.7% Overtime 119,244 178,845 101,795 101,795 -% Pension 1,483,780 1,555,993 1,828,928 1,986,661 157,733 8.6% Retiree Medical 945,877 867,301 949,101 998,502 49,400 5.2% Salary 7,738,298 8,036,627 9,064,569 9,289,484 224,915 2.5% Workers' Compensation 53,412 90,352 128,423 333,881 205,458 160.0% Total Salary & Benefits 12,014,899 12,443,315 14,127,544 14,821,364 693,820 4.9% Allocated Charges 4,383,256 4,451,750 4,553,717 4,765,565 211,848 4.7% Contract Services 4,151,067 4,748,754 4,027,259 5,173,296 1,146,037 28.5% Facilities & Equipment 46,190 85,831 70,700 63,700 (7,000) (9.9)% General Expense 1,718,713 1,822,763 1,878,714 2,000,802 122,088 6.5% Operating Transfers -Out 6,990 6,990 6,990 6,990 - -% Rents & Leases 18,642 24,176 25,040 25,505 465 1.9% Supplies & Material 709,239 694,268 706,755 709,713 2,958 0.4% Total Dollars by Expense Category 23,048,996 24,277,846 25,396,719 27,566,935 2,170,216 8.5% Revenues Charges for Services 5,096,059 5,154,476 4,201,741 6,332,884 2,131,144 50.7% Charges to Other Funds 55,688 55,513 58,338 59,230 892 1.5% From Other Agencies 9,500 52,641 44,885 (44,885) (100.0)% Other Revenue 679,981 718,116 741,009 566,220 (174,789) (23.6)% 230 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES 3udget Summary Other Taxes and Fines Rental Income Total Revenues Positions by Division Administration and Human Services FY 2015 Actuals 700 965,673 6,807,601 FY 2016 Actuals (5,942) 1,099,522 7,074,326 FY 2017 Adopted Budget 1,026 915,806 5,962,805 FY 2018 Adopted Budget 1,026 1,049,386 8,008,746 FY 2018 Change $ FY 2018 Change % -% 133,580 14.6% 2,045,942 34.3% 5.91 5.96 5.79 6.24 0.45 7.77% Arts and Sciences 44.67 44.64 45.89 46.28 0.39 0.85% Open Space, Parks and Golf 31.68 31.93 32.87 32.87 - -% Recreation and Cubberley 55.74 59.51 59.71 59.65 (0.06) (0.10)% Total 138.00 142.04 144.26 145.04 0.78 0.54% Staffing Job Classification Administrative Assistant Administrative Associate Ill Assistant Director Community Services Building Serviceperson FY 2015 Actuals 1.00 0.75 FY 2016 Actuals 1.00 1.00 2.00 2.00 FY 2017 Adopted Budget 1.00 1.00 FY 2018 Adopted Budget 1.00 1.00 FY 2018 Change FTE FY 2018 Salary 88,504 81,689 2.00 2.00 - 335,629 2.00 2.00 2.00 Building Serviceperson-Lead 2.00 2.00 2.00 Coordinator Recreation Programs 4.00 4.00 4.00 Director Community Services 1.00 1.00 1.00 Division Manager Open Space, Parks and Golf Heavy Equipment Operator 0.07 0.07 0.07 0.07 6,743 Inspector, Field Services 2.00 2.00 2.00 2.00 - 206,752 Junior Museum & Zoo Educator 2.75 2.75 2.75 3.60 0.85 284,711 Management Analyst 1.00 1.00 1.00 1.00 - 104,998 Management Assistant 1.00 1.00 1.00 1.00 88,740 Manager Community Services 5.00 5.00 5.00 5.00 469,435 Manager Community Services 5.00 4.00 4.00 4.00 - 462,176 Senior Program Manager Human Services - 1.00 1.00 1.00 - 124,405 1.00 1.00 1.00 2.00 2.00 4.00 1.00 1.00 125,496 134,347 353,679 198,806 151,715 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 231 COMMUNITY SERVICES Staffing Job Classification Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead Producer Arts/Science Program FY 2015 Actuals 6.00 1.00 5.00 2.00 11.75 Program Assistant I 6.75 4.00 Project Manager - Senior Management Analyst 1.00 Sprinkler System Representative 4.00 Program Assistant II Superintendent Community Services Superintendent Recreation Theater Specialist Volunteer Coordinator Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 2.00 1.00 0.75 FY 2016 Actuals 6.00 1.00 5.00 2.00 12.50 7.00 4.00 0.10 1.00 4.00 2.00 FY 2017 Adopted Budget 6.00 1.00 5.00 2.00 12.50 8.00 4.00 0.10 1.00 4.00 2.00 FY 2018 Adopted Budget 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 2.00 FY 2018 Change FTE (1.50) FY 2018 Salary 451,064 87,158 418,532 163,600 1,054,371 618,571 332,455 10,745 131,976 305,857 239,949 1.00 1.00 1.00 - 114,899 1.00 1.00 2.00 1.00 205,136 75.82 77.42 78.42 78.77 0.35 7,352,138 62.18 64.62 65.84 66.27 0.43 3,171, 954 138.00 142.04 144.26 145.04 0.78 10, 524, 093 232 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES Budget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget J 144.26 25,396,719 5,962,805 19,433,914 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Art Center Creative Ecology Grant Funding — (44,885) (44,885) Friends of the Palo Alto Children's Theatre Donation (45,000) (45,000) JMZ Market Analysis and Collections Management — (30,600) — (30,600) Art Center Institute of Museum and Library Services Grant (16,000) (16,000) — One -Time Prior Year Expenditures — (136,485) (105,885) (30,600) Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustment 818,887 — 818,887 Golf Course Revenue and Expense Adjustments — 1,375,016 1,911,230 (536,214) Increased Facility Rentals Activity (Lucie Stern, 100,000 (100,000) Mitchell Park, and others) Project Safety Net Community Collaborative (0.45 FTE Administrative Specialist I - H from 0.45 85,000 — 85,000 Stanford University Development Agreement Fund to the General Fund) Foothills Park Donations — — (60,000) 60,000 Human Services Resource Allocation Program / _ 34,637 — 34,637 Avenidas / PACC (consumer price index) Gachina Landscape Contract Annual Increase 28,097 892 27,205 Adjustment Open Space, Parks & Golf Division maintenance — 23,000 — 23,000 minimum wage adjustments Recreation Camp Fees (5% increase in fees) 15,000 (15,000) Mitchell Park Maintenance Costs 10,000 10,000 ActiveNet Service Contract Adjustments (Service 4,000 (4,000) administration fee decrease) ARC Document Solutions (Print & Mail Allocated 3,989 3,989 Charges Realignment) General Liability Insurance Allocated Charges — 106,378 — 106,378 Adjustment Information Technology Department Allocation (FY (57,819) (57,819) 2016 Salary Savings; one-time) Information Technology Allocated Charges Adjustment — (10,070) — (10,070) COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 233 COMMUNITY SERVICES 3udget Reconciliation Print & Mail Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Storm Water Management Fee Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities 33,653 14,950 6,464 11,205 (39,705) (51,860) 0.45 2,391,822 1,971,122 33,653 14,950 6,464 11,205 (39,705) (51,860) 420,700 Total FY 2018 Base Budget 144.71 27,652,056 7,828,0 19,824,014 Budget Adjustments 1 Youth Community Services Funding 2 Human Services Resource Allocation Program (HSRAP) Funding 3 Junior Museum and Zoo Special Event Programming 4 Additional Art Center Classes 5 Arts & Science Program Staffing 6 Aquatics Program Pilot 7 Open Space, Parks and Golf Division Maintenance 8 Special Events Staffing and Event Funding 9 Human Services Omega Club Staffing 10 Make -X Program Staffing Realignment Total FY 2018 Budget Adjustments 50,000 44,000 0.29 28,451 i 72,175 0.10 23,046 2,459 (142,617) (80,000) 0.48 (10,270) (0.06) (190) (0.48) 0.33 (85,121) 108,530 180,705 50,000 44,000 (43,724) (85,484) 2,459 (142,617) (80,000) (10,270) (190) (265,826) Total FY 2018 Adopted Budget 145.04 27,566,935 8,008,747 19,558,188 234 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES 3udget Adjustments Budget :Adjustments Positions Expenditures Revenues Net General Fund 1 Youth Community Services Funding 0.00 50,000 This action provides $50,000 per year for the next three years to the Youth Community Services (YCS) to leverage matching grant funding from Santa Clara County. This funding, along with the County's matching funding, will allow YCS to work on their "Youth Connectedness Initiative" to increase community involvement and foster a more connected environment through collaborative, service -based activities. (Ongoing net costs: $50,000) Performance Results © 0 This action will enable YCS to expand their scope of service by starting the Youth Connectedness Initiative and increasing outreach efforts to teens in the community. 2 Human Services Resource Allocation Program (HSRAP) Funding 44,000 This action increases HSRAP funding by $44,000 for a new total of $503,213 based on Council's action at the June 27, 2017 meeting. Combined with the $50,000 HSRAP Emerging Needs reserve, the overall total funding level for HSRAP for FY 2018 is $553,213. This updated total matches an inflation adjusted FY 2004 funding amount, assuming an annual inflation of 2.6%. (Ongoing net costs: $44,000) Performance Results © 0 This action will increase access to various services, including senior services, early care and education, youth services, developmentally disabled services, homeless services, and low income healthcare services, from organizations that receive HSRAP grants. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 235 COMMUNITY SERVICES 3udget Adjustments udget Adjustments. Positions Expenditures Net Revenues General Fund 3 Junior Museum and Zoo Special Event Programming (43, 724) This action expands the science-themed birthday party programs at both the Junior Museum and Zoo and the Lucy Evans Baylands Interpretive Center. This action also raises class and camp fees by 5 percent and eliminates a 3 percent quantity discount for schools. This increase in revenue will allow the Department to open the Baylands Interpretive Center two additional afternoons each week. To facilitate these changes, several staffing adjustments are necessary, including adding 1) two part-time Instructor I positions (total of 0.18 FTE) to provide increased Baylands Interpretive Center hours, 2) three Recreation Leader III positions (total of 0.30 FTE) to provide additional birthday parties, 3) increase one Producer Arts/Science Program position from 0.75 to 1.0 FTE to provide marketing and oversight of the expanded birthday party program as well as to staff the Interpretive Center, and 4) reclassify 1.0 Producer Arts/Science Program to 1.0 Theater Specialist to provide coordination and supervision to these expanded programs, as well as deleting two Recreation Leader positions (total of 0.29 FTE) and reducing one Junior Museum and Zoo Educator position from 0.75 to 0.60 FTE. (Ongoing net savings: $43,724) Performance Results This action will enhance the quality of service and increase customer satisfaction levels by expanding the science- themed birthday party program and increasing open hours at the newly renovated Lucy Evans Baylands Interpretive Center. 4 Additional Art Center Classes 0.10 108,530 (85,484) This action adds four ceramics and eight printmaking classes and workshops. The addition of these classes and workshops is expected to generate gross revenue of $108,530 partially offset by additional staffing of 0.10 FTE and non -salary expenses of $18,554 for contracts and materials. Additional details can be found below: - Staffing changes include the reclassification and increased hours of 0.75 Producer Arts/Science Program to 1.0 JMZ Educator; reclassification of 0.40 Arts & Science Professional II to 0.25 Arts & Science Professional I; and reclassification of four part-time Instructor I positions within the Children's Fine Arts Program to three part-time Instructor II and one Instructor III positions. These classification changes are anticipated to reduce high turnover in these positions and attract more qualified candidates to fill vacancies. - Non -salary funding of $18,554 allows for additional contract instructors for new Adult Fine Art classes and for additional supplies and materials. (Ongoing net savings: $85,484) Performance Results © 0 This action will allow the Art Center to enhance the quality of services and increase customer satisfaction levels by offering more high demand classes. 5 Arts & Science Program Staffing This action reclassifies five limited hourly Arts and Science Professional I positions to Arts and Science Professional II in order to bring these positions that install new exhibits at the Art Center to more competitive pay rates, promote the retention of current employees and facilitate the future successful recruitment of new employees into those positions. (Ongoing net costs: $2,459) Performance Results This action will ensure the Art Center can continue to rely on experienced crews to install new exhibits. 236 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES 3udget Adjustments lid et Adjustments Positions Expenditures Net Revenues General Fund 6 Aquatics Program Pilot 0 (142,617) This action reduces costs associated with the Aquatics Program by freezing a full time vacant Recreation Coordinator position. Historically, this vacant position has managed the City of Palo Alto's approximately $500,000 Aquatics Program. Due to staffing challenges, the City has explored options for the delivery of aquatic programs and services to meet the increasing service demands. The City issued a Request for Proposals (RFP) and received two proposals. After careful review of both proposals by a team of aquatic professionals, CSD staff began evaluating short and long term options for future program delivery with Team Sheeper LLC (Team Sheeper). In January 2017, the City Council approved a contract for Team Sheeper to manage the year-round Learn to Swim program for the 2017 calendar year. Subsequently in June 2017, the City Council approved an amendment to the contract with Team Sheeper, to include operational management of lap and open swim programs, as well as oversight of Rinconada Masters and Palo Alto Stanford Aquatics programs, starting on August 14, 2017. This partnership with Team Sheeper establishes a revenue and expense sharing model that will result in savings to the General Fund while maintaining a high quality aquatics program. With this change in service delivery, CSD staff will closely monitor actual revenues and expenses and submit adjustments to the FY 2018 budget as necessary. (Ongoing net savings: $0) Performance Results This action aims to implement a more financially feasible and sustainable Aquatics program that also improves customer experience. 7 Open Space, Parks and Golf Division Maintenance 11 (80,000) MK 0 (80,000) This action reduces maintenance funding in the Open Space, Parks and Golf division due to a deferral of irrigation maintenance on the golf course as a result of its current renovation. In addition, open space maintenance will be reduced over the next year resulting in some overgrown areas of vegetation such as at Baylands Park. (Ongoing net savings: $0) Performance Results This is a one-time cost savings measure for FY 2018 with minimal impact due to the renovation of the golf course which is expected to be completed in October 2017. 8 Special Events Staffing and Event Funding (10, 270) This action adds a 0.48 Special Events Coordinator position offset by a reduction in contract funding. Previously a special events contractor was used to manage the coordination of special events; however, due to a retirement, the previous contractor is no longer available. This part-time position will assume the responsibilities that previously were completed by the special events contractor, including assisting staff with the detailed logistics of event planning. In addition, funding of $9,000 is included for the annual holiday tree installation, maintenance, and lighting. Previously this was managed by the City Manager's Office and funded from contingency. This realignment matches the shift in responsibility to this new Events Coordinator position. (Ongoing net savings: $10,270) Performance Results © © 0 This action will allow the City to continue to host and organize various special events, providing positive and engaging experiences for residents and visitors to Palo Alto. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 237 COMMUNITY SERVICES 9 Human Services Omega Club Staffing 3udget Adjustments Positions Expenditures Revenues Net General Fund This action reclassifies 0.18 Recreation Leader Ito 0.12 Recreation Leader III to allow Human Services to hire a staff member to serve as a trip leader for the Omega Club, which is an active social club for adults, ages 21 and older, with special needs. This is a high -functioning group involved in special trips, community service activities, social events, and life -skills training. Activities include dinners, dancing, music, and sporting events. The Recreation Leader III classification is required to fill this position due to staff experience needed and responsibility required as part of this position based on the special needs presented by the participants. It is anticipated that with the higher level of experience, fewer hours will be necessary; therefore, a reduction from 0.18 to 0.12 FTE is recommended as well. (Ongoing net savings: $190) Performance Results This action ensures that the quality of service provided for adults with special needs will remain high. 10 Make -X Program Staffing Realignment -0.48 0 0 This action eliminates an existing, vacant 0.48 Recreation Leader Ill - H position and reallocates the funding to non - salary expenses to maintain funding for supplies and equipment necessary to support the Make -X Program projects initiated by participating teens. (Ongoing net costs: $0) Performance Results 0 This action will allow the Make -X Program to continue its in -demand programs through participant driven projects, maintaining customer satisfaction and service delivery. 238 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET COMMUNITY SERVICES Golf Course Financials =i,_11 REVENUES Tournament Fees Green Fees Monthly Play Cards Driving Range Cart/Club Rentals Proshop Lease Restaurant Lease Restaurant Utilities Other Fees Total Revenue FY 2014 Actuals FY 2015 Actuals IN1,1Pr- $ 37,517 $ 212 FY 2016 Actuals FY 2017 Projected FY 2018 Adopted* $0 $0 $1,400 854,279 859,660 0 0 1,461,264 68,521 59,250 0 0 109,988 296,933 292,092 154,322 227,791 252,000 234,556 1,236 24,818 24,601 18,000 13,423 23,900 44,592 18,000 35,592 16,980 18,000 18,000 18,000 26,000 22,239 16,116 24,000 5,274 8,600 $ 1,577,019 $1,549,080 $ 232,322 $ 301,316 $ 2,143,552 216,541 220,800 39,191 39,600 0 EXPENDITURES Operating Expenses Salaries $ 52,627 $ 49,053 $ 77,755 $ 71,596 $ 73,279 Benefits 33,056 25,924 52,160 38,460 39,374 Advertising and Publishing 5,599 6,473 15,000 1,502 30,000 Supplies and Materials 1,106 1,477 10,000 3,964 45,000 General Expense 74 72 1,450 47 1,450 Facilities and Equipment Purchases 10,647 250 5,000 7,122 Allocated Charges 328,504 315,812 157,750 127,984 356,400 Subtotal $ 431,613 $ 399,061 $ 319,115 $ 250,675 $ 588,603 43,100 Contract Services Golf Maintenance $ 831,130 $ 807,230 $ 217,896 $ 217,896 $ 927,800 Miscellaneous 0 38,067 0 54,355 0 Range Fees 112,835 110,995 31,710 193,622 Cart Rentals 81,767 88,906 0 0 44,200 Club Rentals 4,880 4,804 0 0 4,300 Fixed Management Fees 319,057 349,116 30,500 30,500 300,000 Credit Card Fees 0 0 4,166 0 17,739 Subtotal $1,349,668 $1,399,118 $ 284,272 $ 496,373 $1,389,799 Total Operating Expenses $ 1,781,281 $1,798,179 $ 603,387 $ 747,049 $1,978,402 95,760 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 239 COMMUNITY SERVICES Golf Course Financials Income (Loss) From Operations FY 2018 $ (204,263) $ (249,099) $ (371,065) $ (445,732) $165,150 Debt Expenses Debt Service (refunded) $ 429,020 $ 429,020 $ 429,020 $ 429,020 $ 429,020 Subtotal Cost Plan Charges Net Income (Loss) $ 429,020 $ 429,020 $ 429,020 $ 429,020 $ 429,020 $ 20,459 S 0 $ 25,000 S 25,000 $ 25,000 $ (653,742) $ (678,119) $ (825,085) $ (899,752) $ (288,870) *Renovation at the Golf Course is expected to be completed by the end of October 2017. 240 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN SERVICE CONTRACTS Human Service Contracts T Human Services Contracts EXPENDITURE CATEGORY Avenidas - Senior Services1 PACCC - Child Care Subsidy and Outreachl FY 2017 Adopted $ 465,698 471,797 FY 2017 Agency Award $ 465,698 471,797 FY 2018 Base Budget $ 465,698 471,797 FY 2018 Agency Requests $ 465,698 471,797 FY 2018 Adopted Budget $ 477,341 483,592 Sole Source Contractors Subtotal $ 937,495 $ 937,495 $ 937,495 $ 937,495 $ 960,933 HUMAN SERVICES RESOURCE ALLOCATION PROCESS2 Abilities United Adolescent Counseling Services3 Adolescent Counseling Services (Outlet Program)3 Community Technology Alliance4 Community Working Group KARA Downtown Streets Team DreamCatchers LifeMoves (formerly InnVision Shelter Network) La Comida de California MayView Community Health Center Momentum for Mental Health Palo Alto Housing Corporation Peninsula HealthCare Connection Inc Senior Adults Legal Assistance Vista Center for the Blind & Visually Impaired Youth Community Service Two -Year Contractors Subtotal $ 43,582 108,780 10,000 8,565 0 0 38,978 13,272 34,381 35,469 26,317 33,861 19,504 28,945 14,043 11,190 21,125 $ 43,582 108,780 10,000 8,565 0 0 38,978 13,272 34,381 35,469 26,317 33,861 19,504 28,945 14,043 11,190 21,125 $ 43,582 108,780 10,000 8,565 0 0 38,978 13,272 34,381 35,469 26,317 33,861 19,504 28,945 14,043 11,190 21,125 $ 51,725 0 22,183 0 84,000 30,000 88,000 15,000 35,000 36,533 32,000 37,247 41,600 31,000 15,400 31,500 30,000 $ 44,691 0 10,250 0 0 8,565 39,972 13,609 35,257 36,372 26,990 34,724 20,001 29,684 14,401 11,475 21,663 $ 448,013 $ 448,013 $ 448,013 $ 581,188 $ 347,654 Amount Yet to Be Allocated5 $ 0 $ 0 $ 0 $ 0 $ 155,559 Human Services Reserve (One -Time) 50,000 0 0 0 0 TOTAL $ 1,385,508 $1,385,508 $ 1,385,508 $1,518,683 $1,464,146 HSRAP Emerging Needs Fund6 $ 50,000 $ 0 $ 0 $ 0 $ 50,000 HUMAN SERVICE CONTRACTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 241 HUMAN SERVICE CONTRACTS 1. Not part of the Human Services Resource Allocation Process (HSRAP). 2. HSRAP contracts are requested as part of a two-year cycle, and once approved, the agencies receive the same level of funding across each year of the cycle. The FY 2018 Agency Request reflects the request made for each year. 3. Adolescent Counseling Services has withdrawn their application for the on campus counseling program. As a result, just its Outlet Program will receive funding for the two-year cycle. 4. Community Technology Alliance did not request funding for the upcoming two-year cycle (FY 2018 and 2019). 5. The unallocated amount of $155,559 is the result of Adolescent Counseling Services withdrawing their application for the on -campus counseling program, as well as the City Council increasing the overall HSRAP funding by $44,000 as part of the budget adoption. CSD will re -open the HSRAP process during the first half of FY 2018 to receive applications from agencies and award remaining, unallocated funds to other programs. 6. Funding is displayed as part of the Non -Departmental section of this document. 242 HUMAN SERVICE CONTRACTS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES • Mission Statement The mission of the Development Services Department is to work collaboratively with other departments to provide citizens, business owners, developers, and applicants reliable and predictable expectations in the review, permitting, and inspection of development projects that meet the minimum municipal and building code requirements to ensure the health, safety, and welfare of the public. Purpose The Development Services Department ensures all private construction complies with a set of rules that specify the minimum standards for construction. The main purpose of Development Ser- vices is to protect the public health, safety, and general welfare as they relate to the construction and occupancy of buildings and structures. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 243 DEVELOPMENT SERVICES DEVELOPMENT SERVICES DIRECTOR Peter Pirnejad ADMINISTRATION 1.00 Administrative Assistant 1.00 Senior Management Analyst 1.00 Management Analyst BUILDING SERVICES 1.00 Chief Building Official 1.00 Assistant Chief Building Official 1.00 Planning Manager 1.00 Development Center Manager 1.00 Administrative Associate III 2.00 Administrative Associate II 4.00 Building Inspector Specialist 3.00 Development Project Coordinator I I I 2.00 Development Project Coordinator II PLANNING SERVICES* 5.21 FTE PUBLIC WORKS* 4.69 FTE FIRE INSPECTION* 6.60 FTE * Development Services activities cross over to the Fire, Planning and Community Environment, and Public Works departments. This organizational chart represents the city-wide Full - Time Equivalents (FTEs) for Development Services of 20.00 FTEs as well as the functional support from the other departments. The Department Summary tables summarizes FTEs by position allocation. FY 2018 POSITION TOTALS 20.00 - Full-time 3.50 - Hourly 244 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES Description The Development Services Department is responsible for the following functions: ADMINISTRATION Leads the Department, provides personnel, contract, budget, and project management support, and liaises with other departments and outside stakeholders. Ensures there is a clear vision for the Department as well as the metrics to measure progress. PLANNING Works collaboratively with City staff, consultants, and external customers to provide a link between the City's entitlement review and building processes. Planning is also responsible for gathering and analyzing data in support of land use policy; reviewing projects for potential envi- ronmental impacts on the City and its residents; and ensuring compliance with the Zoning Ordi- nance and Comprehensive Plan. BUILDING Protects the public's health, safety, and general welfare as they relate to the construction and occupancy of buildings and structures by enforcing laws and regulations that govern the design, construction, use and occupancy of buildings. The building division also provides timely and professional review of plans and documents for all building permit applications to ensure that the proposed work complies with all state and local code requirements. Following permit issuance, building inspectors ensure that construction complies with the approved plans and adopted codes in the plan review, permitting, and inspections of all buildings governed by the City of Palo Alto. PUBLIC WORKS Provides engineering support with concern for City -owned facilities, streets, sidewalks, storm drains, and parks infrastructure as well as for the urban forest. GREEN BUILDING Assists applicants for all residential and non-residential projects to comply with the City's Green Building and Energy Codes to maximize a project's energy and water use efficiency, and to maintain that level of efficiency into the future. The Green Building contract staff works with other departments to ensure that sustainable measures are incorporated into buildings from design through construction and continue in the monitoring of building performance. FIRE PREVENTION BUREAU Ensures compliance with the Fire Code for the safety of occupants and protection of property. Staff performs fire sprinkler and fire alarm plan checks, permitting, and field inspec- tions with the goal of ensuring all construction complies with local and national codes. The Fire Prevention Bureau works closely with applicants and residents, priding themselves in the level DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 245 DEVELOPMENT SERVICES of service they provide customers whether its keeping a project on schedule or the public edu- cated. UTILITIES Ensures new construction compliance with standards for water, gas, wastewater, and electric utilities. Projects are required to comply and integrate with the City's existing utility infrastruc- ture in accordance with local and applicable laws. PROJECT COORDINATION Development Services provides a one -stop -shop service model that assigns a project coordina- tor to every project that applies for a building permit to ensure the applicant is helped through the cross -departmental review process. This model ensures that the majority of permits con- tinue to be issued over-the-counter and those applications that need more time to be reviewed are completed in accordance with established performance guidelines. Accomplishments ▪ Updated all building codes and ordinances to comply with the triennial building code change cycle. • Completed the first phase of comprehensive updates to building fees to move toward Department cost neutrality. ▪ Worked with the Public Works Engineering division in the execution of a pilot dewatering program. ▪ Received the Industry Leader of the Year Award from the American Construction Inspector Association for exceptional educational outreach for the construction inspection community. ▪ Received the 2016 CA Energy Efficiency Industry Council Energy Champion Award for efforts in creating an energy reach code in excess of State requirements from State Senator Nancy Skinner. • Consolidated all public inquiries for building permits and planning entitlements on one website. ▪ Developed updated Landscape Ordinance reflecting emergency drought regulations required by the Department of Water Resources. ▪ Updated and re -launched Green Building instructional videos. ▪ Completed Electrification Study in collaboration with Utilities and the Office of Sustainability. ▪ Continued to improve and support the Palo Alto Inspection smartphone application that allows applicants to schedule and monitor the progress of inspections, reducing call volumes. ▪ Continued to work with the Office of Economic Development on the administration of the fully automated Business Registry process with the goal of administering the third year. 246 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES • Continued the process to develop a tool that is able to track and prioritize all City -related work in the right-of-way as well as provide notice to citizens and commuters through a single purpose app. • Received the 2016 Trendsetter Award from Accela for the creation of an analytic dashboard that leverages building permit data to measure service counts, speed of delivery and timeliness that both improve productivity as well as increase transparency of the development review process. • A more comprehensive list of accomplishments was prepared and published on the City's website as part of the Department's annual Action Plan. Initiatives ▪ Begin the development process for electronic plan review. • Launch the Citizen Right of Way Notification (CROWN) an online tool that is able to track and prioritize all construction work in the right-of-way. • Launch the automated expired permit notification system in Accela to inform applicants when the building permit expires. ▪ Complete evaluation of the Construction and Demolition Debris Diversion Program and develop recommendations to better align implementation. ▪ Complete phase II of the fee study and revise valuation based fees to ensure that all costs are fully recoverable and the Department is self supporting. ▪ Complete International Organization for Standardization (ISO) Class One Recertification. ▪ Continue enforcement of the Model Water Efficient Landscape Ordinance (MWELO) required by the State Department of Water Resources and the Urban Forestry Technical Manual required by the City's Department of Public Works. ▪ Improve and automate revenue evaluation and reporting. ▪ Obtain Disaster Preparedness ATC-45 (Flood) Rapid Evaluation Safety Assessment training and certification for all inspection and plan review staff. ▪ Continue enforcement of the Green Building and Energy Ordinance reflecting building code changes for the 2016 code cycle. Goals and Objectives GOAL 1 Provide a high level of customer service and optimize application review, processing, and permit issuance times. Objectives: • Optimize number of days to issue a permit. ▪ Optimize the number of over the counter plan checks that result in a permit issuance. . Interpret and apply building code through inspection and enforcement. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 247 DEVELOPMENT SERVICES GOAL 2 Work collaboratively with City departments, which support development services, to ade- quately staff and respond to workload demands and achieve excellent customer service out- comes. Objectives: ▪ Provide customers with clear, succinct, and consistent guidelines. ▪ Implement facility and technology enhancements. ▪ Develop performance measures with internal and external stakeholders. GOAL 3 Work collaboratively with City departments to set fees at full cost recovery while monitoring activity levels to ensure costs and revenues are aligned. This requires monitoring of activities and revenues to ensure rates are set at the appropriate levels and the applicant receives the ser- vice established by said fees. Objectives: ▪ Complete regular fee studies to ensure revenues cover expenditures in each of the departments that participate in the Development Services Department. • Monitor and track real time activity levels from each of the departments to ensure activities are aligned with expenditures. • Share and publish goals, metrics and accomplishments with all stakeholders to ensure the department is on track with established goals and fees are in line with activity levels. 248 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES Key Performance ti easures AVERAGE NUMBER OF DAYS FROM ISSUANCE TO FINAL Provide a high level of customer service and decrease the total time to approve the construction phase of a commercial tenant improvement. Goal Objective Decrease number of days from permit issuance to final inspection. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 FY 2018 Estimated Adopted Average number of days between permit issuance and temporary occupancy or final inspection Description Purpose Status 156.00 135.00 135.00 135.00 130.00 This measure tracks the amount of time it takes to inspect and approve commercial tenant improvement for occupancy. Moving new tenants into their space as quickly as possible is essential for the financial health and long-term success of new businesses. It is also important in promoting the general economic vitality of the City by reducing the number of days commercial spaces stay vacant and out of production. The goal is to provide the necessary information and coordination early in the construction phase which results in a positive outcome for the business owner while enhancing the economy of Palo Alto. Meanwhile, inspectors need to ensure construction complies with ever increasing requirements added to the building and green codes. Development Services has maintained an average of 135 days over the past two years as the Department works to adapt to workload associated with the increased Green Building and Energy requirements. The Department is also working towards further efficiency through development of an electronic plan check application that facilitates inspection scheduling, and estimates lowering the average to 130 days in FY 2018. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 249 DEVELOPMENT SERVICES INSURANCE SERVICES OFFICE (ISO) RATING Exemplify the City's commitment to well -enforced building codes and a commitment to health, safety, and general welfare. Goal Objective Obtain and maintain the highest rating (level 1) FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Insurance Services Office (ISO) Rating Description Purpose Status 1.00 1.00 1.00 1.00 1.00 ISO administers the Building Code Effectiveness Grading Schedule (BCEGS) program for the property/casualty insurance industry. The BCEGS program assesses the building codes in effect in a particular community and how the community enforces its building codes, assigning each municipality a grade of 1 (exemplary commitment to building code enforcement) to 10. Municipalities with well -enforced, up-to-date codes demonstrate less property damage due to fire and natural disasters. This can be reflected in the citizens' insurance rates. BCEGS helps communities by: 1. Improving building codes (by encouraging the adoption of the most current codes), building departments, and code enforcement; 2. Promoting construction of better, more catastrophe - resistant buildings; 3. Reducing property losses from catastrophes; and 4. Reducing the economic and social disruption that results from catastrophes' serious and widespread destruction. Since receiving a rating of 4 in 2006, the Development Services Department has made an effort to implement better staff training, certifications, public awareness and outreach programs. Development Services has received an Insurance Service Office (ISO) Class 1 rating and is one of only three cities in California to be honored with this distinguished award. The Class 1 rating indicates that the City maintains the highest standards for structural safety in the nation which reduces insurance costs to Palo Alto property owners. 250 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES Percent of permits initiated within a given period where all department reviews are completed PERCENT OF PERMITS ISSUED ON TIME Work collaboratively with City departments, which support development services, Goal to adequately staff and respond to workload demands and achieve excellent customer service outcomes. Objective Provide customers with clear, succinct, and consistent guidelines. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 FY 2018 Estimated Adopted Description Purpose Status 73.00% 77.00% 85.00% 79.00% 80.00% This measure tracks the percentage of time building permit plan reviews are completed by the estimated due date provided to the customer at the time of permit submittal. This includes projects that are submitted for the standard 30 - day review period and require multi -departmental review. This measure is a result of the collaborative approach with all involved departments. A project is not deemed on -time unless every review stage is completed on time. Customers depend upon the accuracy and dependability of estimated due dates to plan their construction projects. They may move out of their house or enter into a lease on a commercial tenant space based on the estimated timeline provided by Development Services. Being successful at adhering to timelines reduces costs for developers and property owners and has a direct correlation to the economic vitality of the City. The Department continues to work on implementing streamlining initiatives and innovative technologies to improve cross -departmental collaboration to improve results. Technology upgrades such as transitioning from Accela version 8.0 to 9.0, and Accela Citizen Access, have improved the ability to streamline the exchange of information between the applicant and reviewer. This has helped put more control in the hands of the applicant, allowing them to apply for and research permits online. Further contributing to process improvement, the Department has fully integrated the fire permitting process from a paper based system to digital, and has automated PW, photovoltaic, and electric vehicle charger permitting. Lastly, automated reminders and a performance dashboard have been put into place to help a reviewer track, report, and prioritize plans that are late or coming due. Calendar year 2016 was the end of tri-annual code cycle, and as a result, the Department received an unusual number of submittals at the end of calendar year. This resulted in a spike in workload and longer than expected plan review times; however, this is expected to be lowered in FY 2018. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 251 DEVELOPMENT SERVICES PERCENT OF PERMITS ISSUED OVER THE COUNTER Provide a high level of customer service and decrease application review, processing and permit issuance times. Increase the number of over the counter (OTC) plan checks that result in same day permit issuance. Goal Objective Percent of permits that are reviewed and approved by all necessary departments over-the- counter. Description Purpose Status Workload V FY 2015 Actuals 66.00% FY 2016 Actuals 65.00% FY 2017 Adopted 69.00% FY 2017 Estimated 67.00% FY 2018 Adopted 69.00% This measure tracks the percentage of building permits that can be successfully reviewed and approved by all the affected City departments over the counter (OTC) while the customer waits. This requires that Public Works, Planning, Utilities, and the Fire Prevention Bureau also review and approve the application for permit issuance. Without complete approval, the permit cannot be issued. To streamline the process so customers make as few trips as possible to the Development Center to obtain a permit. It is also beneficial to City staff, resulting in less reviewing and processing time than if the plans were taken in for review. This process also reduces waste as fewer plans are created and distributed for various departmental reviews. The Department is continuously looking for areas to improve the ability to issue same day permits and over the past year has focused on adding necessary staff from other departments, making key information available to the counter staff by utilizing technologies, standardizing processes, and improving public outreach, education, and formalized training. Key staffing expertise is critical to the success of this measure. In FY 2017, staff turnover and vacancies slightly impaired the ability to process OTC permits. ensures Number of building permit applications Number of building permits issued Fire permit inspections Number of calls and virtual contacts Number of walk-in customer interactions FY 2015 Actuals 3,853 FY 2016 Actuals 3,978 3,844 3,137 1,981 2,815 N/A 7,648 N/A 23,457 FY 2017 Adopted 4,121 4,303 2,300 N/A FY 2017 Estimated 3,554 2,880 2,420 9,221 FY 2018 Adopted 3,600 3,100 2,500 9,682 N/A 20,259 21,860 Number of building inspections N/A 31,158 N/A 27,945 29,550 252 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES 3udget Summary Dollars by Division Administration Building Fire GIS Green Building Planning Public Works Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 2,013,944 2,398,193 2,540,932 2,593,471 52,540 4,260,844 4,513,057 5,522,448 5,524,855 2,407 1,691,504 1,935,955 2,043,291 2,196,300 153,009 7.5% 122,424 (2,029) - - - -% 162,731 346,302 304,000 304,000 -% 663,360 616,486 787,300 758,018 (29,282) (3.7)% 978,389 856,944 971,230 1,162, 966 191,736 19.7% 9,893,196 10,664,909 12,169,201 12,539,610 370,410 3.0% FY 2018 Change % 2.1% -% Dollars by Category Salary & Benefits Healthcare 560,362 525,922 724,106 723,352 (753) (0.1)% Other Benefits 80,329 90,467 90,624 114,257 23,633 26.1% Overtime 93,806 317,769 47,500 47,500 -% Pension 935,780 1,004,236 1,141,124 1,273,390 132,266 11.6% Retiree Medical 370,316 353,758 387,121 407,271 20,150 5.2% Salary 3,402,255 3,299,985 4,082,729 4,293,217 210,488 5.2% Workers' Compensation 532 398 59,091 142,533 83,443 141.2% Total Salary & Benefits 5,443,380 5,592,534 6,532,293 7,001,520 469,227 7.2% Allocated Charges 850,114 813,783 972,831 1,014,339 41,508 4.3% Contract Services 2,351,628 2,812,040 3,107,674 2,989,039 (118,635) (3.8)% Facilities & Equipment 5,553 28,638 6,300 3,800 (2,500) (39.7)% General Expense 240,364 353,934 418,080 419,210 1,130 0.3% Rents & Leases 978,451 1,028,212 1,090,048 1,081,577 (8,471) (0.8)% Supplies & Material 23,706 35,768 41,975 30,126 (11,849) (28.2)% Total Dollars by Expense Category 9,893,196 10,664,909 12,169,201 12,539,610 370,410 3.0% Revenues Charges for Services 6,613,781 6,339,627 6,974,082 7,498,861 524,778 7.5% Charges to Other Funds 66,351 43,567 21,797 21,797 -% Other Revenue 153 1,636 -% DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 253 DEVELOPMENT SERVICES 3udget Summary FY 2015 Actuals Other Taxes and Fines 7,000 Permits and Licenses 5,397,801 Total Revenues 12,085,087 FY 2016 Actuals 8,500 6,222,505 12,615,834 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 4,247 4,247 6,700,758 6,896,341 195,583 13,700,885 14,421,246 720,361 5.3% FY 2018 Change % -% 2.9% Positions by Division Administration Building Fire GIS Green Building Planning Public Works Total Staffing Job Classification Administrative Assistant Administrative Associate II Administrative Associate III Assistant Chief Building Official Assistant Director Public Works Associate Engineer Associate Planner Building Inspector Specialist Building/Planning Technician Chief Building Official Chief Planning Official Code Enforcement Officer Code Enforcement -Lead Deputy Chief/Fire Marshal Development Project Coordinator II 4.66 4.25 5.21 5.21 -% 15.61 18.17 17.21 17.81 0.60 3.49% 8.37 9.23 7.08 7.08 - -% 0.65 - - - - -% 0.85 - - - -% 5.83 5.69 5.69 5.09 (0.60) (10.54)% 6.00 5.36 4.72 4.81 0.09 1.91% 41.97 42.70 39.91 40.00 0.09 0.23% FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget 1.00 1.00 1.00 3.02 3.02 3.00 1.01 1.01 1.00 1.00 1.00 0.02 0.02 FY 2018 Adopted Budget 1.00 3.00 1.00 1.00 FY 2018 Change FTE FY 2018 Salary 78,894 228,629 81,689 115,336 0.16 0.16 0.02 0.02 2,275 0.90 0.90 0.90 0.90 - 95,394 3.00 4.00 4.00 4.00 457,010 1.80 1.80 2.30 2.30 - 197,716 1.00 1.00 1.00 1.00 164,174 0.20 0.20 - 0.50 0.40 0.40 0.40 41,119 - 0.20 0.20 0.20 - 22,000 0.84 0.85 0.80 0.80 - 145,317 2.00 2.00 2.00 2.00 - 186,862 254 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES Staffing Job Classification Development Project Coordinator III Development Services Director Engineer Engineering Technician III Fire Fighter Fire Inspector Hazardous Materials Inspector Industrial Waste Inspector FY 2015 Actuals 3.00 1.00 0.62 2.10 1.00 4.00 1.90 0.01 Industrial Waste Investigator 0.21 Inspector, Field Services 0.70 Management Analyst 0.01 Manager Development Center 1.00 Manager Environmental Control Program Manager Planning 1.80 2.00 2.00 2.00 267,176 0.10 FY 2016 Actuals 3.00 FY 2017 Adopted Budget 3.00 FY 2018 Adopted Budget 3.00 1.00 1.00 1.00 0.62 0.64 0.64 2.10 1.78 1.78 1.00 FY 2018 Change FTE FY 2018 Salary 309,071 200,512 81,992 170,516 4.00 3.20 3.20 - 502,384 1.90 1.60 1.60 251,192 0.01 0.01 0.01 - 947 0.21 0.35 0.35 37,235 0.70 0.68 0.68 70,296 1.01 1.01 1.01 106,637 1.00 1.00 1.00 - 124,197 0.10 0.10 0.10 10,976 Manager Urban Forestry 0.04 0.04 0.04 0.04 5,678 0.05 0.05 - - - - Planner 0.80 0.25 0.17 0.17 - 19,262 Planning Arborist 0.25 0.25 0.25 0.29 0.04 36,309 Plans Check Engineer 1.00 - Project Engineer 0.15 0.13 0.03 0.03 4,137 Project Manager 0.07 0.07 0.07 (0.07) 0.68 0.68 0.46 0.46 - 70,058 Senior Industrial Waste Investigator 0.01 0.01 0.01 0.01 - 1,138 Senior Management Analyst 1.00 1.00 1.00 1.00 - 121,992 Senior Planner 0.40 0.36 0.24 0.24 31,418 Senior Technologist 0.50 - Supervisor Inspection and Surveying Surveyor, Public Works 0.47 - - - - - Sub -total: Full -Time Equivalent Positions Manager Watershed Protection Senior Engineer 0.27 0.27 0.27 0.27 38.59 39.32 36.53 32,562 36.50 (0.03) 4,272,102 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 255 DEVELOPMENT SERVICES Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Temporary/Hourly Total Positions 3.38 41.97 3.38 42.70 3.38 39.91 3.50 40.00 0.12 226,095 0.09 4,498,197 256 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET DEVELOPMENT SERVICES 3udget Reconciliation Prior Year Budget 39.91 12,169, 201 13, 700, 885 (1,531,684) Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Mayfield Development Contract Services Front Counter Planning Technician (IT Core Package) One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Development Services Fee Revenue Adjustments Public Works Fee Revenue and Expense Adjustments Public Works Staffing Reallocation (Increase of 0.04 FTE Planning Arborist and 0.12 FTE Project Construction Inspector; decrease of 0.07 FTE Project Manager) ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Liability Insurance Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Information Technology Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment Rents & Leases Expenditure Alignment Vehicle Replacement & Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities - (371,280) (371,280) (2,500) — (373,780) (371,280) — 465,740 — 465,740 424,287 (424,287) — 122,645 417,354 (294,709) 0.09 3,282 3,282 0.09 (10,649) (10,649) 49,188 — 49,188 (27,711) (27,711) 20,845 — 20,845 13,960 (8,471) (14,639) 614,190 841,641 13,960 (8,471) (14,639) (227,451) Total FY 2018 Base Budget 40.00 12,409,611 14,171,246 (1,759,135) Budget Adjustments 1 Permit System (Accela) Technical Support 2 Technology Surcharge Total Budget Adjustments 130,000 130,000 250,000 130,000 250,000 (250,000) (120,000) Total FY 2018 Adopted Budget 40.00 12, 539, 611 14, 421, 246 (1,879,135) DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 257 DEVELOPMENT SERVICES 3udget Adjustments Bu • •et . crust .e is Revenues Net General Fund 1 Permit System (Accela) Technical Support 0.00 130,000 This action increases funding for technical support by $130,000 for a total of $250,000. On September 6, 2011, the City Council approved the implementation of the Development Center Blueprint project to streamline and modernize the City's permit process. The design and build out of this project is nearly complete and ongoing funding for operations and maintenance of the central permit system (Accela) is needed. (Ongoing net costs: $130,000) Performance Results © 0 This action will ensure end users continue to receive necessary technical service support on the permit system including creation and modification of reports. 2 Technology Surcharge 250,000 (250,000) This action establishes a 1.8 percent technology surcharge to all of the Development Service Department (DSD) fees and recognizes the estimated corresponding revenue. This new surcharge will be utilized to fund costs associated with a new Accela support service contract, which DSD estimates to be approximately $250,000 annually. Any additional costs not covered by this surcharge will need to be identified and funded within the Department's budget. (Ongoing net savings: $250,000) Performance Results © 0 This action will ensure the maintenance costs for the electronic permit system will be fully funded by the users. 258 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE Mission Statement We are a professional team of men and women dedicated to safeguarding and enriching the lives of anyone, anytime, anywhere with compassion and pride. Purpose The purpose of the Fire Department is to protect life, property, and the environment from fire, hazardous materials, and other disasters; to provide rapid emergency response, proactive code enforcement, modern fire prevention methods, and pro- gressive safety education for our citizens and coworkers; and to promote customer satisfaction by maintaining quality, profes- sional, and friendly service to others. FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 259 FIRE FIRE CHIEF Eric Nickel 1.00 Administrative Assistant SUPPORT SERVICES 1.00 Deputy Chief 1.00 EMS Chief 1.00 EMS Data Specialist 0.50 GIS Specialist 1.00 Training Battalion Chief 1.00 Training Captain 1.00 Senior Management Analyst OPERATIONS II 1.00 Deputy Chief I 3.00 Battalion Chief 21.00 Fire Captain 30,00 Fire Apparatus Operator 41.00 Fire Fighter FIRE PREVENTION* 1.00 Deputy Chief/Fire Marshal 1.00 Administrative Associate II 2.00 Hazardous Materials Inspector 4.00 Fire Inspector FY 2018 POSITION TOTALS 114.50 - Full-time 0.55 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. ADMINISTRATION 2.00 Administrative Associate II * Fire Prevention is functionally a part of the Development Services Department. The Fire Department retains administrative oversight over department personnel. 260 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Description The Fire Department provides a wide range of community and employee related services for the City of Palo Alto through the following service programs: FIRE SUPPRESSION Maintain a state of readiness to effectively respond to emergency and non -emergency calls. Provide a means for a safer Palo Alto through community outreach, public education, and pre- vention. EMERGENCY MEDICAL SERVICES In an emergency setting, rapid assessment, treatment and transport of patients to definitive care in a safe and efficient manner. FIRE PREVENTION BUREAU Improve the quality of life for the Palo Alto community through risk assessment, code enforce- ment, fire investigation, public education, and hazardous materials management. EMPLOYEE FIRE/EMS CERTIFICATION TRAINING Provide training to certify that staff maintain safe, efficient, and effective practices when responding to emergencies. Ensure personnel are familiar with and able to utilize the most up to date and proven techniques. Training specific to required EMT and/or Paramedic re -certification is also incorporated. Accomplishments ▪ Responded to 150 fire incidents in Fiscal Year 2016 with 89% of responses in 8 minutes. ▪ Responded to 5,356 medical/rescue calls in Fiscal Year 2016; 99% of paramedic calls for service were responded to within 12 minutes and 92% of emergency medical calls within 8 minutes. ▪ Conducted 2,806 Fire Inspections in Fiscal Year 2016, a 43% increase from the prior fiscal year. ▪ EMS revenue totaled approximately $3.1 million in Fiscal Year 2016, a 20% increase over the last five years. • Sustained expanded outreach efforts, providing a total of 198 events in Fiscal Year 2016. • Began accreditation self -assessment process; the Department is on track to become accredited in calendar year 2017. ▪ New Fire Code adopted after extensive collaboration with Santa Clara County Fire Agencies to unify standards across the County. FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 261 FIRE • Established innovative multi -agency agreement with Stanford Hospital to serve as the single agency providing consistent medical direction for all Santa Clara County Advanced Life Support services delivered. ▪ Completed Active Shooter Policy and multi -agency and multi -jurisdictional training implementation. • Initiated efficiency meeting with IAFF Labor Group designed to maximize resources while maintaining emergency response times. • Finalize automatic aid agreement with Woodside Fire District. ▪ Implemented new 48/96 shift schedule pilot program. ▪ Completed successful labor contract negotiations with the Fire Chiefs Association • Implemented HAAS Alert on Fire units, alerting drivers and pedestrians through their phone that an emergency vehicle is approaching their location and instructs them to move to the right. ▪ Developed and converted to new hose deployment model, which provides efficiencies, safety and more flexible operations when battling a fire. • Community Health Needs Assessment started, designed to predict future needs and opportunities for emergency medical services. ▪ Hired and successfully graduated 1 firefighter in the Santa Clara Joint Fire Academy; successfully appointed 3 fire cadets through the College of San Mateo program who successfully completed the year long program. Initiatives • Evaluate community and public health risks and explore evidence -based prevention programs to reduce those risks. ▪ Support efforts to modernize and replace essential public safety facilities, investing in updating equipment, and station furniture. ▪ Continue to invest in and focus on training plans, professional certifications and succession planning efforts to develop a highly effective and prepared emergency response workforce. ▪ Continue to work with Stanford University to renegotiate a service delivery contract for Emergency Response Services to the campus. Goals and Objectives GOAL 1 Arrive at the scene of emergencies safely and in a timely manner within the Department's tar- geted response times. Objectives: • Promote timely adherence to Santa Clara County's clinical protocols and ensure consistent medical care in both Advanced and Basic Life Support (ALS/BLS) to the Palo Alto and Stanford communities. 262 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE ▪ Provide the highest level of patient care and response standards by ensuring Palo Alto ambulances respond to all ambulance calls for service. ▪ Fire response time will be within 8 minutes 90 percent of the time. ▪ Advanced Life Support (ALS) response times will be within 12 minutes 90 percent of the time. GOAL 2 Ensure reasonable life safety conditions through inspection programs. Objectives: ▪ Perform periodic inspections of all facilities within department's designated target cycle time. ▪ Identify and direct abatement of conditions or operating procedures which could cause an increase in probability or severity of a fire or hazardous materials release. GOAL 3 Develop, maintain, and sustain a comprehensive community risk reduction program that engages the whole community. Objectives: ▪ Support the Office of Emergency Services, the Palo Alto and Stanford Citizen Corps Council and the Emergency Services Volunteers in training and preparation in the areas of Medical Disaster Operations, Triage, Fire Suppression, and Light Search and Rescue. ▪ Complete an Integrated Risk Assessment and Management Plan designed to identify and quantify community risks and mitigation strategies. • Identify high -risk communities within the City of Palo Alto and design risk reduction programs for the highest risk groups. GOAL 4 Enhance training and maintain all certifications required by governing agencies such as the State Fire Marshal's Office and Santa Clara County Emergency Medical Services Office. Objectives: ▪ Document all training through the Joint Apprenticeship Committee (JAC). • Maintain the required minimum of 20 hours/month per employee of fire related training. • Maintain, as mandated, records of training related to EMS and EMT/Paramedic certification. GOAL 5 Internalize commitment to excellence in public service by continuously evaluating the assis- tance provided, identifying areas needing improvement, and implementing mitigation methods. Objective: • Maintain awareness of service quality by focusing on customers' view of assistance that was provided. FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 263 FIRE' Key Performance ti easures FIRE DEPARTMENT RESPONSE TIMES Arrive at the scene of emergencies safely and in a timely manner within the department's targeted response times. Goal Objective Percent of responses to EMS calls within 8 minutes Percent of responses to paramedic calls within 12 minutes Percent of responses to fire emergencies within 8 minutes Description Purpose Status Fire and EMS response times will be within 8 minutes, and Advanced Life Support (ALS) response times will be within 12 minutes 90 percent of the time. FY 2015 Actuals 92.00% FY 2016 Actuals 92.00% FY 2017 Adopted 90.00% FY 2017 Estimated 92.00% FY 2018 Adopted 90.00% 99.00% 99.00% 99.00% 99.00% 99.00% 90.00% 83.00% 89.00% 90.00% 90.00% This measure tracks the percentage of calls for service that are within established response time percentiles. Quick response times can mean the difference between short and long-term recovery, the extent and severity of injury, and most importantly, the difference between life and death. In Fiscal Year 2016, the Fire Department responded to 99 percent of paramedic calls for service within 12 minutes and responded to 92 percent of emergency medical calls within 8 minutes. The Department responded to 89 percent of fire calls within 8 minutes, which is the closest we've come to meeting our goal of 90 percent in many years. Using the results from the Community Focused Integrated Risk Management Assessment, the Department launched an Operational Readiness Initiative aiming at reducing response times. FIRES CONTAINED TO ROOM OF ORIGIN Goal Limit structural fire damage to the room or area of origin. Objective Percent of fires contained to the room or area of origin. Description Purpose Status Contain fires to the room or area of origin 90% of the time. FY 2015 Actuals 92.00% FY 2016 Actuals 71.00% FY 2017 Adopted 90.00% FY 2017 Estimated 90.00% FY 2018 Adopted 90.00% This measure tracks the percentage of fires that are contained to the room of origin. Containing a fire to the room of origin limits damage and spread of the fire. In Fiscal Year 2016, the Department limited 71 percent of fires to the room of origin which was below the goal of 90 percent. This measure can vary significantly from year to year because of the small number of structure fires the Department responds to each year. Of the 13 building fires in FY16, four were not contained to the area of origin. In every case, the fire had spread throughout the entire structure prior to arriving on scene despite a response time under 8 minutes. 264 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE PERCENT OF SURVEYED RESIDENTS RATING FIRE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Objective Percent of surveyed residents rating fire services good or excellent Percent of surveyed residents rating fire prevention services good or excellent Percent of surveyed residents rating ambulance/EMS services good or excellent Description Purpose Status Workload V Internalize commitment to excellence in public service by continuously evaluating the assistance provided, identifying areas needing improvement, and implementing mitigation methods. Maintain awareness of service quality by focusing on customers' view of assistance that was provided. FY 2015 Actuals 97.00% FY 2016 Actuals 97.00% FY 2017 Adopted 95.00% FY 2017 Estimated 95.00% FY 2018 Adopted 95.00% 85.00% 85.00% 85.00% 85.00% 85.00% 95.00% 96.00% 95.00% 95.00% 95.00% This measure tracks the percent of surveyed residents rating fire and emergency services good or excellent, as well as Fire Prevention Services, as reported monthly from the Customer Satisfaction Survey. Collecting this data allows the Department to compare itself to nationwide benchmarking data prepared by the National Research Center. Citizen satisfaction with Fire Department services is an important assessment of the overall quality of fire services offered to the community. More than 90 percent of surveyed residents have rated fire and EMS/ambulance services good or excellent in each of the last ten years. ensures Fire calls average response time (Target: 6:00 Minutes) Medical/rescue calls average response time (Target: 6:00 Minutes) Number of fire calls for service Number of medical/rescue calls for service Number of all other calls for service Total number of calls for service Number of ambulance transports FY 2015 Actuals 4:57 5:11 FY 2016 Actuals 5:06 6:37 135 150 5,270 3,143 8,548 3,862 5,356 3,376 8,882 3,842 FY 2017 Adopted 5:45 5:45 FY 2017 Estimated 5:30 5:40 150 150 5,356 3,376 8,882 3,750 5,400 3,350 8,900 3,800 FY 2018 Adopted 5:25 5:30 150 5,400 3,350 8,900 3,800 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 265 FIRE 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division Administration 1,981,824 2,081,753 1,063,714 1,606,088 542,375 51.0% Emergency Response 22,921,088 23,895,813 25,851,773 28,064,541 2,212,768 8.6% Environmental Safety Management 119,869 168,475 240,826 181,549 (59,277) (24.6)% Records and Information 304,232 399,836 310,202 348,496 38,293 12.3% Management Training and Personnel 863,963 1,006,042 1,480,777 1,573,198 92,421 6.2% Total 26,190,976 27,551,919 28,947,291 31,773,872 2,826,580 9.8% Dollars by Category Salary & Benefits Healthcare 1,856,739 1,900,382 2,186,317 2,250,001 63,684 2.9% Other Benefits 307,179 315,685 225,618 295,753 70,135 31.1% Overtime 2,171,315 2,595,138 1,413,714 1,396,436 (17,278) (1.2)% Pension 4,208,876 4,276,724 5,324,358 5,856,769 532,412 10.0% Retiree Medical 2,287,736 2,034,464 2,433,066 2,559,706 126,640 5.2% Salary 10,943,398 11,197,348 12,861,242 13,745,200 883,957 6.9% Workers' Compensation 792,688 852,598 338,640 1,046,143 707,503 208.9% Total Salary & Benefits 22,567,930 23,172,338 24,782,955 27,150,008 2,367,053 9.6% Allocated Charges 2,655,297 3,132,327 2,860,444 2,903,441 42,996 1.5% Contract Services 349,717 453,343 516,325 645,325 129,000 25.0% Facilities & Equipment 132,113 162,882 157,200 196,700 39,500 25.1% General Expense 180,838 197,479 264,722 426,722 162,000 61.2% Supplies & Material 305,080 433,549 365,645 451,676 86,031 23.5% Total Dollars by Expense 26,190,976 27,551,919 28,947,291 31,773,872 2,826,580 9.8% Category Revenues Charges for Services 11,628,005 9,888,335 11,778,932 9,970,718 (1,808,214) (15.4)% Charges to Other Funds 161,322 168,222 161,322 161,322 -% From Other Agencies 319,454 155,857 129,000 397,000 268,000 207.8% Other Revenue 221,498 569,022 57,000 57,000 -% Other Taxes and Fines 1,000 1,000 -% 266 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE 3udget Summary Permits and Licenses Total Revenues FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget 2,970 1,436 15,713 15,713 FY 2018 Change $ FY 2018 Change % - % 12,333,249 10,782,872 12,142,966 10,602,753 (1,540,214) (12.7)% Positions by Division Administration 4.00 3.00 3.00 3.00 Emergency Response 99.07 99.07 99.07 99.07 Environmental Safety Management 0.48 0.48 0.48 0.48 Records and Information 1.50 1.50 1.50 1.50 Management Training and Personnel 3.00 3.00 5.15 5.15 Total 108.05 107.05 109.20 109.20 Staffing Job Classification 40 -Hour Training Battalion Chief 40 -Hour Training Captain Administrative Assistant Administrative Associate II Battalion Chief Business Analyst Deputy Chief/Fire Marshal Deputy Director Technical Services Division Deputy Fire Chief FY 2015 Actuals 1.00 1.50 2.00 3.00 0.80 0.20 2.00 FY 2016 Actuals 1.00 1.00 1.00 2.00 3.00 0.80 0.20 2.00 FY 2017 Adopted Budget 1.00 1.00 1.00 2.00 3.00 0.80 0.05 FY 2018 Adopted Budget 1.00 1.00 1.00 2.00 3.00 0.80 0.05 0.20 0.20 2.00 2.00 FY 2018 Change -% - % - % FY 2018 Salary 166,483 156,995 79,144 152,419 483,658 119,792 9,082 37,993 402,334 Emergency Medical Service 1.00 1.00 1.00 1.00 137,010 Director Emergency Medical Services Data 1.00 1.00 1.00 1.00 - 81,689 Specialist Fire Apparatus Operator 30.00 30.00 30.00 30.00 4,043,954 Fire Captain 22.00 21.00 21.00 21.00 3,191,038 Fire Chief 1.00 1.00 1.00 1.00 - 234,354 Fire Fighter 40.00 40.00 41.00 41.00 - 5,244,154 Fire Inspector - - 0.80 0.80 - 125,596 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 267 FIRE Staffing Geographic Information System Specialist Hazardous Materials Inspector Police Chief 0.50 FY 2015 Actuals 0.50 FY 2016 Actuals 0.50 FY 2017 Adopted Budget 0.50 0.30 FY 2018 Adopted Budget 0.50 0.30 Senior Management Analyst 1.00 1.00 1.00 1.00 Sub -total: Full -Time Equivalent 107.50 106.50 108.65 108.65 — 14,913,945 Positions Temporary/Hourly 0.55 0.55 0.55 0.55 — 53,316 FY 2018 Change FY 2018 Salary 62,852 47,098 138,299 Total Positions 108.05 107.05 109.20 109.20 — 14,967,262 268 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE 3udget Reconciliation Prior Year Budget 109.20 28,947,291 12,142,967 16,804,324 Base Adjustments One -Time Prior Year Expenditures Deleted Fire Station Furniture, Fixtures, and Equipment - Phase 2 Fire Services Staffing One -Time Prior Year Expenditures Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Stanford Emergency Fire Services Revenue Adjustment (align with 4th amendment contract term, net $6.2 million) ARC Document Solutions (Print & Mail Allocated Charges Realignment) Medical Transport Reimbursement/Revenue from Other Agencies (Ongoing: $47,000/$95,000) General Liability Insurance Allocated Charges Adjustments Information Technology Allocated Charges Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Utilities Allocated Charges Adjustments Vehicle Replacement & Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities - (125,000) 453,676 (125,000) 151,225 302,451 — 328,676 151,225 177,451 3,213,377 3,213,377 - (2,049,439) (1,469) 162,000 105,914 (31, 018) (63,298) (7,718) 21,793 100,123 — 3,499,705 268,000 (1,781,439) 2,049,439 (106,000) 105,914 (31,018) (63,298) (7,718) 21,793 100,123 5,282,613 Total FY 2018 Base Budget 109.2 32,775,672 10,512,753 22,264,388 Budget Adjustments 1 Medical Gurney Replacement and Cardiac Monitor Warranty 2 EMS Transport Services/Medical Transport Fee Increases 126,000 — 126,000 80,000 90,000 (10,000) FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 269 FIRE 3udget Reconciliation 3 International Accreditation Phase III 4 Fire Hydrant Maintenance Program (reassign to Public Works) 5 Fire Services Deployment Changes Net xpenditures Revenues General Fund 50,000 42,200 (1,300,000) 50,000 42,200 (1,300,000) Total Budget Adjustments — (1,001,800) 90,000 (1,091,800) Total FY 2018 Adopted Budget 109.20 31,773,872 10,602,753 21,172,588 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net General Fund 1 Medical Gurney Replacement and Cardiac Monitor Warranty 0.00 L126,000 126,000 miL This action provides one time funding for the replacement of two gurneys ($45,000) and extends the warranty for three years for the departments 18 cardiac monitor machines ($81,000). In total, the City has seven gurneys for the six ambulance apparatus the department manages; two gurneys have reached the end of their useful life (typically a 7 year cycle). Additionally, the warranty for all eighteen cardiac machines that are maintained on various fire apparatus, is set to expire in FY 2018. This three year extension will ensure appropriate repair and replacement needs are guaranteed until FY 2021. Ongoing Costs: $0) Performance Results Ensures compliance with state and national laws on the delivery of emergency medical treatment for medical calls. 2 EMS Transport Services/Medical Transport Fee Increases 80,000 N 90,000 (10,000) 270 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FIRE 3udget Adjustments Budget Adjustment Positions Expenditures Revenues Net General Fund This action increases funding for Emergency Medical Services (EMS) supplies and equipment in the amount of $80,000 offset by anticipated higher than budgeted medical transport fee revenues. In Fiscal Year 2016, two new ambulances were approved for purchase to address increasing medical call volume. This additional funding provides sufficient supplies to maintain service delivery for increasing call volume, deployment of the two additional ambulances, and to comply with minimum inventory requirements from the County of Santa Clara in providing medical transport services. As part of the development of the 2018 Municipal Fee Schedule, transportation fess are recommended to increase a total of 9%. This increase is attributed to program cost increases of 3% and a 6% citywide annual inflator, and aligns fees to "high" recovery levels established in the User Fee Recovery Level Policy adopted by City Council. (Ongoing net savings: $10,000) Performance Results © 0 This action ensures that costs for EMS transport are aligned with the demand for services and that the high level of quality of those services is maintained. 3 International Accreditation Phase III 50,000 This action provides one-time funding necessary for the third phase of the accreditation process, which includes site visits from the Center for Public Safety Excellence (CPSE) representatives and attendance to the CPSE conference to present at an accreditation hearing. (Ongoing Costs: $0) Performance Results © © 0 0 The accreditation model is used to set goals, craft strategic and action plans, and continuously evaluate and improve services provided to the public and results in the development of planning documents, including short-term action and long-term strategic plans, important tools in the budgeting process and a basis for justifying departmental programs and services. Accreditation has the potential to dramatically improve a department, its services, and its vision for the future. 4 Fire Hydrant Maintenance Program (reassign to Public Works) 42,200 This action provide one-time funding to address the backlog of maintenance of the City's fire hydrants as well as supports the ongoing maintenance activities. In FY 2018, a total of $125,000 in funding is provided for contractual services to address a backlog of maintenance including: clearing overgrowth, painting, flow testing hydrants, and ensuring compliance with the National Fire Protection Agency (NFPA) standards. This is funded by reallocating $82,800 include in the base budget intended to reimburse the Utilities funds for their work in maintaining the hydrants and the one-time addition of $42,200. The Utilities Department will no longer be performing this maintenance work. Once this backlog of catch-up and clean-up is complete, the ongoing maintenance for painting will be completed by the Public Works Department. Flow testing and clearing work will remain the responsibility of the Fire Department. Funding wil be realigned in FY 2019 to reflect the realignment of responsibilities. (Ongoing Costs: $0) Performance Results © © 0 0 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 271 FIRE 3udget Adjustments udget Ad'ustme Net Positions Expenditures Revenues General Fund Bringing fire hydrants in compliance with standards set by the National Fire Protection Agency will increase safety of the community, and assist in improving the department Insurance Service Office (ISO) rating. 5 Fire Services Deployment Changes —MEW0.00 (1,300,000) MI. 0 (1,300,000) This action eliminates $1.3 million in salary and benefits costs, consistent with current proposals in meet and confer discussions with the International Association of Fire Fighters (IAFF). The FY 2018 Budget assumed Stanford University contractual funding levels for fire services at the current fourth amendment contractual level, approximately a net $6.2 million in annual revenues. In 2016, representatives from the City and Stanford have met periodically to discuss alternative service and cost allocation models for current and future service requirements. While progress has been made, the parties have not yet reached agreement on a full set of terms and the proposed alternative service and cost models have not been implemented. The Fire Department is also simultaneously meeting and conferring with the International Association of Fire Fighters, Local 1319 regarding impacts of the alternative staffing strategies that are expected to maintain response performance while reducing expenses. Although final agreement has not been reach in either negotiation, the City continues to pursue and anticipates being able to achieve savings of $1.3 million annually. (Ongoing Savings: $1.3 million) Performance Results This action will achieve a portion of the savings necessary to offset the reduction in the contract with Stanford Services for Fire Services while maintaining response performance. 272 FIRE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES 1 Mission Statement The Human Resources Department's mission is to recruit, develop, and retain a diverse, well -qualified, and professional workforce that reflects the high standards of the community we serve, and to lead City departments in positive employee relations, talent management, succession planning, and employee engagement. Purpose The purpose of Human Resources is to support City departments in achieving key goals and objectives; to provide a range of services, including new employee orienta- tion, staffing and recruitment management, talent and skill development, per- formance assessment, safety and wellness programs; and to support employee relations, compensation, job classification, risk management, and organization development to City departments. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 273 HUMAN RESOURCES HUMAN RESOURCES DIRECTOR/ CHIEF PEOPLE OFFICER Rumi Portillo 1.00 Assistant Director of Human Resources WORKERS' COMPENSATION 1.00 Senior Human Resources Administrator EMPLOYEE/LABOR RELATIONS & TRAINING 1.00 Manager, Employee Relations 1.00 Senior Management Analyst 0.50 Human Resources Technician 1.00 Senior Human Resources Administrator BENEFITS DIVISION 1.00 Manager, Employee Benefits 2.00 Human Resources Representative This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. RECRUITMENT 2.00 Senior Human Resources Administrator 1.00 Human Resources Representative 1.50 Human Resources Technician HUMAN RESOUCES INFORMATION SYSTEMS 1.00 Senior Management Analyst 2.00 Human Resources Technician FY 2018 POSITION TOTALS 17.00 - Full-time 1.20 - Hourly 274 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Description The Human Resources Department provides guidance to City departments in the following areas: TOTAL COMPENSATION Administer salary, health, pension, and other benefits. EMPLOYEE AND LABOR RELATIONS Provide guidance to City staff to enhance performance, create a positive work environment, and effectively resolve complaints, grievances, and other problems. ORGANIZATION AND EMPLOYEE DEVELOPMENT Identify and implement training and development opportunities to enhance skills, innovation, and leadership of City staff members. TALENT MANAGEMENT Recruit, select, and onboard employees who have a passion for public service and the right knowledge, skills, and abilities to take on increasingly complex public service roles. RISK MANAGEMENT, SAFETY, AND WORKERS COMPENSATION Support workplace safety, reduce injuries, and actively manage risk and other potential liabili- ties. Accomplishments • Fully launched a new hire onboarding platform (NEOGOV) for all new hires; full time and part time. ▪ Implemented a benefits enrollment portal for all new hires in efforts to go paperless. ▪ Introduced an enhanced benefits open enrollment process for all benefited City staff. • Completed a Benefits and Open Enrollment fair for all benefited employees. • Reached agreement with the Palo Alto Fire Chiefs' Association for a successor Memorandum of Agreement. ▪ Recruited 278 positions for the City of Palo Alto including Utilities Director, Police Officers, Fire Fighters, Librarians and Utilities Systems Operators. • Enhanced access to City-wide training resources by instituting an annual Leads academy, conducting Supervisor and Manager training throughout the year, and completing a new City-wide Ethics course. • Planned and executed employee engagement survey to over 1,100 full time and part time employees. • Completed communication and outreach for the medical retirement plan under California Government Code 22893. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 275 HUMAN RESOURCES Dollars by Fund • Completed organization -wide launch of an on-line Personnel Action Form (PAF) to streamline City-wide personnel transaction process. ▪ Digitized official employee personnel files. ▪ Continued contract negotiations with Utilities Managers and Professionals Association of Palo Alto (UMPAPA). Initiatives DEPARTMENT EFFECTIVENESS • Implement departmental Infographics and Dashboards • Plan and implement an intake tracking system; enabling the department to account and track incoming requests • Expand the use of DocuSign approval process for HR Departmental forms TALENT MANAGEMENT • Source recruitment applications and tools that will enhance the City's recruitment efforts • Re -engineer the recruitment process to reduce time to fill vacancies • Integrate the Onboarding (NEOGOV) tool with the Human Resources workforce database (SAP) to enhance productivity ORGANIZATION AND EMPLOYEE DEVELOPMENT • Evaluate the City-wide engagement survey data and leverage the information to enhance workforce development RISK MANAGEMENT, SAFETY AND WORKERS COMPENSATION • Explore tracking tools to ensure injury and illness prevention program compliance including completion of safety inspections ▪ Enhance the City's current Cyber Security liability insurance coverage BENEFITS . Transition to a new Retiree Medical Benefit third party administrator . Enhancements to the Employee Self Service process for FY 2018 Open Enrollment 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % General Fund -Operating Liability Insurance 3,263,171 3,559,492 3,356,833 389,202 1,848,428 2,122,100 3,757,228 400,395 3,328,535 1,206,435 11.9% 56.9% 276 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Worker's Compensation 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change $ FY 2018 Change % Total 1,315,080 4,967,453 2,180, 302 7,588,222 3,922,201 5,787,596 9,401,134 12,873,359 1,865,395 3,472,225 36.9% 47.6% Revenues Charges for Services 514 — — — — —% Charges to Other Funds 2,956,655 4,041,870 1,597,581 3,631,044 2,033,463 127.3% Operating Transfers -In 5,000 5,000 —% Other Revenue 2,947,701 2,255,360 1,910,901 5,265,000 3,354,099 175.5% Return on Investments 468,865 528,725 492,000 38,230 (453,770) (92.2)% Total Revenues 6,373,736 6,825,955 4,000,482 8,939,274 4,938,792 123.5% Positions by Fund General Fund Workers' Compensation Program Fund Total 16.70 16.70 17.44 17.20 (0.24) (1.38)% 1.00 1.00 —% 16.70 16.70 18.44 18.20 (0.24) (1.30) % HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 277 HUMAN RESOURCES GENERAL FUND Goals and Objectives GOAL 1 Implement a Comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Objectives: ▪ Invigorate the recruitment process to decrease 'time to fill' and increase quality of hires. . Reduce turnover with higher quality of hires and improved performance coaching. GOAL 2 Enhance City culture of engagement and innovation. Objectives: • Ensure employee attendance rate is high. • Enhance learning opportunities through a comprehensive employee training program. • Increase employee communication through all media, including an enhanced HR department website. ▪ Continue to implement a Wellness Program with a target of 15 percent employee participation. GOAL 3 Implement improvements to the department's operational systems especially employment, leave of absence, and benefit administration to ensure responsiveness and effectiveness of Human Resources staff performance. Objectives: • Strengthen oversight of benefit plan costs and processes. • Improve Human Resources ability to meet customer needs and provide superior customer service. 278 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Key Performance ti easures EMPLOYEE ATTENDANCE Goal Enhance City culture of employee engagement and innovation. Objective Maintain high employee attendance rate. Attendance Description Purpose Status RECRUITMENT Goal Objective Recruitment - Days to fill a position Description Purpose Status FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted 95.28% 96.16% 96.00% 96.00% 96.00% This measure will track the attendance of employees in terms of percentage of time present. Attendance is a proxy metric for engagement and productivity. Absenteeism hinders City operations, and results in inefficiency when employees assume additional responsibilities because of unexpected absences. The Department of Labor benchmark for attendance is 96 percent, allowing for absenteeism rate of 4 percent. Under this standard, absenteeism is defined to include unscheduled time away from work (not including vacations or holidays and scheduled/approved Workers Compensation, ADA or FMLA leave). The actual attendance for Fiscal Year 2016 of 96.16% was an improvement over the Fiscal Year 2015 estimate of 96.00%. Future attendance rates are expected to remain steady at 96% which is in line with the Department of Labor's benchmark rate. Implement a comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Invigorate the recruitment process to decrease time to fill and increase quality of hires. FY 2015 Actuals FY 2016 Actuals 110.00 94.55 FY 2017 Adopted FY 2017 Estimated 95.00 95.00 FY 2018 Adopted 95.00 This measure will provide the average number of days to fill a position from requisition approval until a hiring decision is made. A strong recruitment strategy is the foundation of talent management and should be accomplished in a focused, timely manner to provide departments with quality candidates as expeditiously as possible. This measure aligns with the International City/County Management Association's (ICMA) human resource metrics and is a standard tool as defined in the Society of Human Resource Management. The number of days to fill a position decreased in Fiscal Year 2016 to 94.55 days from 110 days in Fiscal Year 2015. It is estimated that this will hold steady in Fiscal Year 2017 and Fiscal Year 2018 at 95 days recruitment cycles despite fierce market conditions. It is expected that the recruitment process will see reduced cycles as process improvements to service delivery is being engineered. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 279 HUMAN RESOURCES SUCCESSION PLANNING Implement a comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Develop a strategic staffing plan for each department that identifies key roles and a succession plan. Goal Objective FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of key roles with succession plan in place Description Purpose Status TURNOVER Goal Objective 75.00% N/A N/A N/A N/A This measure tracks the number of key senior management roles, defined as Division Manager, Assistant Director, and Director, and technical roles defined by each department director, that have a succession plan in place. Succession planning is a focused process for keeping talent in the pipeline. The age demographics of the workplace lead the HR Department to expect a turnover of as much as half the staff over the next ten years, making succession planning imperative. HR assisted in this process through Fiscal Year 2015 at which point succession planning was diverted to departments. This measure is no longer actively administered nor controlled by HR. Implement a comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Reduce turnover with higher quality of hires and improved performance coaching. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Turnover - Voluntary Turnover Turnover - Total Turnover Turnover -Involuntary Turnover Turnover - Retirement Turnover Description Purpose Status 4.48% 8.44% 1.35% 2.60% 6.48% 10.14% 0.21% 3.45% 6.45% 9.57% 0.42% 2.70% 7.00% 10.00% 0.42% 2.70% 7.00% 10.00% 0.50% 2.70% This metric provides data to identify trends when there is turnover, including voluntary exits, involuntary separations and retirements. Employees who are qualified, are a good match for the organization, and who are actively engaged with work, are not expected to leave the City. If turnover is high, the City incurs additional costs of hiring new staff. Initiatives, such as offering a robust training program, provide employees with skills and knowledge to keep productivity at an optimal level. The actual turnover rates in Fiscal Year 2016 spiked up as the market observed significant competition for talent coupled with an increase in service retirements. Based on the current economic trends and year to date data, the total turnover rate is estimated to hold steady at 10%. 280 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Workload V ensures Employee personnel transactions* Percentage of employees participating in Citywide training program** 2,665 N/A 5,376 3,800 4,800 4,500 N/A 85.00% 85.00% 87.50% *A significant increase in employee personnel transactions was observed in Fiscal Year 2016 due to the ratification of mul- tiple union contracts. With union contracts in place, the volume of employee personnel transactions is expected to decrease in future years. ** `Percentage of employees participating in Citywide training program' was a new measure for Fiscal Year 2017. It is anticipated that there will be a slight increase in participation in Fiscal Year 2018 as the Human Resources' department increases training opportunities. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 281 HUMAN RESOURCES 3udget Summary Dollars by Division Administration, Employee Org Development and HR Systems FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,181,368 1,550,612 1,077,202 1,166,851 89,649 8.3% Benefits and Compensation 517,409 418,712 515,689 526,447 10,759 2.1% Employee and Labor Relations 870,907 980,800 982,601 1,284,146 301,545 30.7% Recruitment 425,311 407,623 467,526 444,005 (23,521) (5.0)% Risk Mgmt, Safety, Workers' 268,176 201,745 313,816 335,779 21,963 7.0% Compensation Total 3,263,171 3,559,492 3,356,833 3,757,228 400,395 11.9% Dollars by Category Salary & Benefits Healthcare 253,153 190,212 249,523 322,912 73,389 29.4% Other Benefits 88,882 83,324 80,549 91,351 10,802 13.4% Overtime 1,603 1,451 - - - -% Pension 406,181 370,224 478,432 534,887 56,456 11.8% Retiree Medical 174,472 175,169 191,690 201,668 9,977 5.2% Salary 1,686,158 1,667,000 1,811,523 1,857,392 45,869 2.5% Workers' Compensation 8,288 73 26,449 77,358 50,909 192.5% Total Salary & Benefits 2,618,735 2,487,452 2,838,166 3,085,568 247,402 8.7% Allocated Charges 132,717 192,008 131,060 159,481 28,421 21.7% Contract Services 371,146 607,404 269,309 249,309 (20,000) (7.4)% Facilities & Equipment 250 26,121 4,150 4,150 - -% General Expense 85,104 179,334 50,490 198,348 147,858 292.8% Rents & Leases 43,000 43,000 44,088 43,000 (1,088) (2.5)% Supplies&Material 12,219 24,171 19,570 17,372 (2,198) (11.2)% Total Dollars by Expense Category 3,263,171 3,559,492 3,356,833 3,757,228 400,395 11.9% Revenues Charges for Services 54 - -% Charges to Other Funds 1,693,299 1,673,028 1,597,581 1,856,044 258,463 16.2% 282 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES 3udget Summary Other Revenue Total Revenues FY 2015 Actuals FY 2016 Actuals 15 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % -% 1,693,353 1,673,043 1,597,581 1,856,044 258,463 16.2% Positions by Division Administration, Employee Org 4.65 4.99 5.36 5.56 0.20 3.73% Development and HR Systems Benefits and Compensation 2.61 2.51 2.88 2.44 (0.44) (15.28)% Employee and Labor Relations 4.69 4.60 4.60 5.00 0.40 8.70% Recruitment 3.01 3.00 3.00 2.60 (0.40) (13.33)% Risk Mgmt, Safety, Workers' 1.74 1.60 1.60 1.60 -% Compensation Total Staffing Job Classification Administrative Assistant Assistant Director Human Resources 16.70 16.70 17.44 17.20 (0.24) (1.38) % FY 2015 Actuals 1.00 1.00 FY 2016 Actuals 1.00 1.00 FY 2017 Adopted Budget 1.00 1.00 FY 2018 Adopted Budget 1.00 Director Human Resources/CPO 1.00 1.00 1.00 1.00 Human Resources Assistant 4.00 - - - - - Human Resources Representative 2.00 2.00 2.00 3.00 1.00 233,144 Human Resources Technician 4.00 4.00 4.00 - 294,258 Manager Employee Benefits 1.00 1.00 1.00 1.00 131,206 Manager Employee Relations 1.00 1.00 1.00 1.00 144,019 Senior Human Resources 4.00 4.00 4.00 3.00 (1.00) 318,302 Administrator Senior Management Analyst 1.00 1.00 1.00 2.00 1.00 251,314 Sub -total: Full -Time Equivalent 16.00 16.00 16.00 16.00 - 1,767,485 Positions Temporary/Hourly 0.70 0.70 1.44 1.20 (0.24) 68,625 Total Positions 16.70 16.70 17.44 17.20 (0.24) 1,836,110 FY 2018 Change FTE (1.00) FY 2018 Salary 186,118 209,123 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 283 HUMAN RESOURCES 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 17.44 3,356,833 1,597,581 1,759,252 Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Expense Adjustments Rents & Leases Expenditure Adjustment General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities 256,271 (2,198) (2,142) (1,088) 32,966 (10,281) (7,644) 13,380 279,264 258,463 258,463 256,271 (2,198) (2,142) (1,088) (258,463) 32,966 (10,281) (7,644) 13,380 20,801 Total FY 2018 Base Budget 3,636,097 1,856,044 1,780,053 Budget Adjustments 1 Labor Negotiations 2 Fire Department Recruiting 3 Human Resources Staffing Reorganization 4 Human Resources Non -Salary Expenses Total Budget Adjustments (0.24) 100,000 50,000 (0.24) (8,869) (20,000) 121,131 100,000 50,000 (8,869) (20,000) 121,131 Total FY 2018 Adopted Budget 17.20 3,757,228 1,856,044 1,901,184 284 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES 3udget Adjustments udget Adjustments Positions Net Expenditures Revenues General Fund 1 Labor Negotiations 0.00 100,000 0 100,000 This action provides one-time funding for upcoming labor negotiations with bargaining units in Fiscal Year 2018 as contracts expire. This funding will ensure sufficient resources are available to contract with outside counsel to expeditiously resolve the negotiating process with the bargaining groups, including Palo Alto Peace Officers Association (PAPOA) and International Association of Fire Fighters (IAFF). (Ongoing net costs: $0) Performance Results 0 This action will decrease the cycle time associated with labor negotiations by allocating additional one-time resources. 2 Fire Department Recruiting 0.00 50,000 0 50,000 This action provides one-time funding for contracting the services of industrial psychologists and professional screening firms to explore alternate selection and hiring methods for the Fire Department. The Fire Department will use the recommendations to increase efficiency, shifting from a three-year cycle to a more agile annual recruitment process. It is anticipated that untapped markets for qualified candidates will also be identified, thereby enabling targeted outreach. This action is necessitated due to the increased retirement eligibility, lack of qualified applicants, and diminished availability of qualified candidates as the hire list becomes outdated. (Ongoing net costs: $0) Performance Results © 0 This action will decrease the cycle time associated with Fire Department recruitments and is anticipated to increase the quality of applicants through the identification of new outreach targets. 3 Human Resources Staffing Reorganization -0.24 (8,869) 0 (8,869) This action will reclassify 1.0 Senior Human Resources Administrator to 1.0 Senior Management Analyst, delete 1.0 Administrative Assistant and add 1.0 Human Resources Representative, and reduce a 0.48 part-time Management Specialist to a 0.24 part-time Management Specialist to align with needed duties and increase the capacity of the Department. The reclassification of a Senior Human Resources Administrator to a Senior Management Analyst in Employee Relations will facilitate greater organizational capacity for labor matters and special projects, and is anticipated to reduce the ongoing use of outside consultants. The reclassification of an Administrative Assistant to a Human Resources Representative will better position the department to have subject matter expertise and more capacity for ad -hoc special projects while still providing general support to the department. The reduction of 0.24 FTE part-time Management Specialist realigns the anticipated scope of duties to the Management Specialist position commensurate with the reclassifications detailed above. (Ongoing net savings: $9,220) HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 285 HUMAN RESOURCES 3udget Adjustments ud•et Adjustments Positions Net Expenditures Revenues General Fund Performance Results O With this staffing reorganization, the Department will be better positioned to proactively respond to the Human Resources' needs of the organization. 4 Human Resources Non -Salary Expenses kil= 0.00 (20,000) Jinja (20,000) This action decreases certain non -salary expenses to align with anticipated activity levels. The department recently completed a review of past activity levels for activities such as arbitration, salary studies, and return to work evaluations, and these reductions align funding with these anticipated levels. Reductions include contract costs for workers' compensation ($3,000), employee relations' contract costs ($16,000), and employee recruitment costs associated with New Employee Orientation ($1,000). (Ongoing net savings: $20,000) Performance Results These budget reductions are anticipated to decrease costs associated with current service delivery with minimal impact on current service delivery levels. 286 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES GENERAL LIABILITIES INSURANCE PROGRAM Description The City's General Liability Program provides funding to cover flood, property, and various other insurance policies for City -owned equipment and machinery. The City is self -insured for the first $1 million in losses per occurrence and participates in a Joint Powers Authority for coverage up to $150 million per occurrence. Accomplishments • Collaborated with IT Security Manager to meet Cyber Liability insurance requirements from current insurance policy. • Explored an alternative third party source to obtain Department of Motor Vehicle driving records; implementation is in process. ▪ In development of the Fiscal Year 2018 Budget, this fund was analyzed by an outside consultant, consistent with the practice used in the development of the FY 2017 Budget. Staff used the 85% confidence level, consistent with the lower number of incidents and associated expenses over the past few years, in order to ensure sufficient budgetary resources are available in this fund. Initiatives ▪ Further enhance current Cyber Liability insurance coverage to minimize exposure to evolving cyber risks. • General Liability costs have been allocated out to respective departments based on the outside consultant's methodology, described above, at an 85% confidence level to ensure sufficient budgetary resources are available. See the Internal Service Fund Overview section of this document for further discussion. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 287 HUMAN RESOURCES Goals and Objectives GOAL :W Reduce liability exposure to the City. Objectives: • Reduce liability exposure to the City for employee -involved vehicle collision. ▪ Review DMV records on an annual basis for all employees whose job duties require that they drive City vehicles. ▪ Provide a proactive defensive driving course to all employees involved in vehicle collisions involving City vehicles regardless of fault. ▪ Reduce the number of claims related to City vehicle collision losses. Key Performance CITY VEHICLE COLLISION LOSS V ensures Goal Reduce liability exposure to the City. Objective Reduce the number of claims related to City vehicle collision losses. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Annual number of claims related to City vehicle collision losses Description This measure will provide data to identify trends. Analyzing claim trends will assist risk management staff in developing programs designed to reduce employee involved vehicle collisions. Purpose 25.00 16.00 20.00 15.00 12.00 Status The number of employee involved vehicle collisions has decreased due to consistent training programs and discussions with staff at department safety meetings. Additional training, such as online and onsite training, will continue to be offered to target specific collisions in efforts to continue the downward trend in claims. 288 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES DEFENSIVE DRIVING TRAINING Goal Objective Attendance at mandatory and proactive defensive driver training Description Purpose Status Reduce liability exposure to the City. Provide defensive driver training. FY 2015 Actuals 56.00 FY 2016 Actuals 51.00 FY 2017 Adopted 40.00 FY 2017 Estimated 50.00 FY 2018 Adopted 55.00 This measure tracks the number of employees completing a proactive defensive driving class. Providing supplemental training will increase knowledge and awareness about safe driving behavior in order to protect employee and public safety, in addition to preventing future claims against the City. Attendance in defensive driving class has remained steady and has contributed to lower vehicle collision loss. The target is to have more drivers attend the Defensive Driver training to lower the vehicle collision losses. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 289 HUMAN RESOURCES 3udget Summary ill Dollars by Division Non -Departmental Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 389,202 1,848,428 2,122,100 3,328,535 1,206,435 56.9% 389,202 1,848,428 2,122,100 3,328,535 1,206,435 56.9% Dollars by Category Salary & Benefits Other Benefits 34,886 —% Workers' Compensation 271,376 113,692 —% Total Salary & Benefits 306,262 113,692 — —% Contract Services 28,625 7,125 88,400 70,000 (18,400) (20.8)% General Expense 54,315 1,727,611 2,033,700 3,258,535 1,224,835 60.2% Total Dollars by Expense Category 389,202 1,848,428 2,122,100 3,328,535 1,206,435 56.9% Revenues Charges for Services 460 —% Charges to Other Funds 1,263,356 2,368,842 1,775,000 1,775,000 —% Operating Transfers -In — — — 5,000 5,000 —% Other Revenue 206,453 (215,609) 40,000 40,000 — —% Return on Investments 95,670 139,444 126,300 22,465 (103,835) (82.2)% Total Revenues 1,565,939 2,292,677 166,300 1,842,465 1,676,165 1,007.9% Positions by Division Total 290 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Prior Year Budget 2,122,100 166,300 3udget Reconciliation Net General Liabilities Insurance Positions Expenditures Revenues Program 1,955,800 Base Adjustments Adjustments to Costs of Ongoing Activities General Liability Insurance Claims Adjustments Town Hall Liability Insurance Adjustment (CMR #7176, approved on August 22, 2016) Property Loss Adjustment Broker and Consultant Adjustments Audit and Financial Services Adjustments Umbrella Excess Liability Adjustments Return on Investment Adjustments 952,835 1,775,000 (822,165) 5,000 5,000 (5,000) (16,500) (1,900) (103,000) (103,835) (5,000) (16,500) (1,900) (103,000) 103,835 Adjustments to Costs of Ongoing Activities Budget Adjustments 831,435 1,676,165 (844,730) 1 Buena Vista Mobile Home Park 375,000 375,000 Total Budget Adjustments 375,000 375,000 Total FY 2018 Adopted Budget 3,328,535 1,842,465 1,486,070 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net General Liabilities Insurance Program 1 Buena Vista Mobile Home Park . 375,000 0 375,000 This action appropriates funding necessary to resolve and settle Buena Vista MHP Residents Association v. City of Palo Alto, Santa Clara County Superior Court Case No. 2015 -1 -CV -284763. As discussed in the Special Revenue Fund section of this document, the City is partnering with Santa Clara County to assist the Housing Authority of the County of Santa Clara (HACSC) to acquire, improve, and operate the Buena Vista Mobile Home Park, according to the terms of a purchase agreement reached in May 2017 between HACSC and the Buena Vista Mobile Home Park owner. The funds are a compromise settlement of a claim for attorneys' fees from the Residents Association. (Ongoing costs: $0) Performance Results This action will ensure that issues related to the Buena Vista Mobile Home Park are resolved in a cost effective manner. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 291 HUMAN RESOURCES WORKERS' COMPENSATION FUND Description The Workers' Compensation Program provides wage and medical benefits for employees who sustain an injury or develop an occupational illness within the course and scope of employment. Accomplishments ▪ Initiated and completed a Request For Proposal for a Workers' Compensation administration provider. • HR worked with a third party vendor and provided training to key City Staff to use an online claim reporting system to improve timeliness and accuracy. ▪ Obtained a $200,000 reduction in Umbrella Excess Liability by increasing self -insured retention from $500,000 up to $750,000. HR staff reviewed workers' compensation history with actuary and based on claim information, recommended the change resulting in premium cost reduction. ▪ In development of the Fiscal Year 2018 Budget, this fund was analyzed by an outside consultant, consistent with the practice used in the development of the Fiscal Year 2017 Budget. Staff used the 85% confidence level, consistent with the lower number of incidents and associated expenses over the past few years, in order to ensure sufficient budgetary resources are available in this fund. Initiatives ▪ Explore methodologies to track and ensure injury and illness prevention program compliance including completion of safety inspections. ▪ Initiatives to pursue a Soft Tissue injury prevention program in efforts to reduce claims and lost time. • Workers' Compensation costs have been allocated out to respective departments based on the outside consultant's methodology, described above, at an 85% confidence level to 292 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES ensure sufficient budgetary resources are available. See the Internal Service Fund Overview section of this document for further discussion. Goals and Objectives GOAL 1 Provide a safe environment for employees. Objectives: • Provide workplace safety training for all departments. • Comply with all requirements of the Occupational Safety and Health Act (OSHA). GOAL 2 Minimize loss of productivity and disruption of services. Objectives: ▪ Facilitate early return to work program. • Reduce the number of costly lost time claims filed and days away from work. Key Performance Measures DOLLAR AMOUNT OF CLAIMS PAID Goal Minimize loss of productivity and disruption of services. Objective Reduce the number of costly lost time claims filed and days away from work. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Total dollar amount of claims paid 2,184,857.00 2,187,149.00 1,800,000.00 2,500,000.00 2,500,000.00 This measure tracks the total cost paid for work -related illness and injury claims in a given fiscal year. As claims develop, prior year total costs paid are revised. Effective workplace safety and loss control programs lessen the use of public funds for work -related employee injuries and illness. In Fiscal Year 2016, the total cost of workers compensation claims was relatively constant compared to Fiscal Year 2015 workers compensation claims. It is Status anticipated that the total Fiscal Year 2017 workers compensation claims will increase based on recent trends indicating higher per cost claims, and the same trend is expected to continue in Fiscal Year 2018. Description Purpose HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 293 HUMAN RESOURCES NUMBER OF CLAIMS Goal Objective Number of Workers' Compensation Claims Filed Description Purpose Status Minimize loss of productivity and disruption of services. Reduce the number of costly lost time claims filed and days away from work. FY 2015 Actuals 80.00 FY 2016 Actuals 82.00 FY 2017 Adopted 75.00 FY 2017 Estimated 75.00 FY 2018 Adopted 75.00 This measure tracks the total employee workers compensation claim volume filed each fiscal year. Effective workplace safety and injury prevention program lessen the use of public funds for work -related injuries and illness. In addition to claim costs, the expense of paying overtime or hiring additional staff is mitigated. The total number of claims has slightly increased in Fiscal Year 2016 to 82 from Fiscal Year 2015 of 80. The total number of claims was higher than expected due to increase in claims due to sprains, strains, and an aging employee population. HR is pursuing implementation of a soft tissue injury prevention program as a strategy to reduce frequency of these claims. Based on analysis of current data, it is expected that the number of claims will decrease slightly in Fiscal Year 2017 from Fiscal Year 2016 levels and continue at that rate in Fiscal Year 2018. 294 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES 3udget Summary Dollars by Division Non -Departmental Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,315,080 2,180,302 3,922,201 5,787,596 1,865,395 47.6% 1,315,080 2,180,302 3,922,201 5,787,596 1,865,395 47.6% Dollars by Category Salary & Benefits Healthcare 26,404 10,464 (15,940) (60.4)% Other Benefits 230,006 235,111 243,527 268,725 25,197 10.3% Pension 29,902 34,603 4,701 15.7% Salary 109,381 123,512 14,130 12.9% Workers' Compensation 621,334 1,457,186 2,810,086 4,843,932 2,033,846 72.4% Total Salary & Benefits 851,340 1,692,297 3,219,301 5,281,236 2,061,935 64.0% Contract Services 2,375 2,375 6,900 6,900 —% General Expense 461,365 485,630 696,000 496,000 (200,000) (28.7)% Operating Transfers -Out 3,460 3,460 —% Total Dollars by Expense Category 1,315,080 2,180,302 3,922,201 5,787,596 1,865,395 47.6% Revenues Other Revenue 2,741,248 2,470,954 1,870,901 5,225,000 3,354,099 179.3% Return on Investments 373,195 389,281 365,700 15,765 (349,935) (95.7)% Total Revenues 3,114,443 2,860,235 2,236,601 5,240,765 3,004,164 134.3% Positions by Division Non -Departmental 1.00 1.00 Total — — 1.00 1.00 — % - % HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 295 HUMAN RESOURCES Staffing Job Classification Senior Human Resources Administrator Sub -total: Full -Time Equivalent Positions Total Positions FY 2016 Actuals FY 2017 Adopted Budget 1.00 1.00 — 1.00 FY 2018 Adopted Budget 1.00 1.00 1.00 FY 2018 Change FTE FY 2018 Salary 114,358 114,358 - 114,358 296 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET HUMAN RESOURCES Budget Reconciliation Prior Year Budget ositions Expenditures Revenues Net Workers' Compensatio n Fund 3,922,201 2,236,601 1,685,600 Base Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefit Adjustments Workers' Compensation Insurance Claims Adjustments Return on Investment Adjustments Administrator Fees Umbrella Excess Liability Adjustments Adjustments to Costs of Ongoing Activities 3,089 2,033,846 25,000 (200,000) 1,861,935 3,354,099 (349, 935) 3,004,164 3,089 (1,320,253) 349,935 25,000 (200,000) (1,142,229) Total FY 2018 Base Budget 543,371 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution Total Budget Adjustments 3,460 3,460 3,460 3,460 Total FY 2018 Adopted Budget 5,787,596 5,240,765 546,831 Budget Adjustments i Positions Expenditures Revenues Net Workers' Compensatio n Fund 1 Supplemental Pension Trust Fund Contribution 0.00 This action establishes a transfer from the Workers' Compensation Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $3,460 which represents approximately 10% of the Worker Compensation Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 297 HUMAN RESOURCES Workers' Compensation Fund Workers' Compensation Fund Claims Paid Change in Estimated self-insurance liability CSAC excess insurance premium Actuarial Services TPA Administrator Fees State self-insurance fees In-house Administration Workers' Compensation Fund Subtotal FY 2015 Actuals 2,184, 858 (1,656,783) (837,910) FY 2017 FY 2016 Actuals Estimated FY 2018 Adopted 2,187,149 2,500,000 (311,378) 4,753,932 461,365 485,630 615,100 495,000 2,375 2,375 6,650 6,900 230,006 235,111 239,000 264,000 93,259 90,000 90,000 90,000 0 0 171,214 177,763 1,315,080 2,162,355 3,310,586 5,787,595 298 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY Mission Statement The Information Technology Department's mission is to provide innovative technology solutions that support City departments in delivering quality services to the community. Purpose The purpose of the Information Technol- ogy Department is to champion an inspir- ing and forward -leaning vision for citywide technology that reflects the unique role of the City of Palo Alto as a global leader in technology innovation; to provide a broad range of high -quality technology -related solutions to employees, departments, council members, and the community in order for each to meet their respective goals; to support and continuously improve essential technology infrastructure for enabling the day-to-day opera- tions of the City; and to create and maintain an exciting workplace for the Infor- mation Technology Department team that inspires high-performance and provides career growth opportunities. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 299 INFORMATION TECHNOLOGY CHIEF INFORMATION OFFICER Jonathan Reichental IT PROJECT MANAGEMENT OFFICE 1.00 IT Manager 5.00 Senior Technologist 1.00 Business Analyst IT OPERATIONS 1.00 IT Manager 7.00 Senior Technologist 6.00 Desktop Technician OFFICE OF THE CIO 1.00 IT Manager 1.00 Senior Management Analyst 1.00 Technologist 1.00 Administrative Assistant IT ENTERPRISE SERVICES 1.00 IT Manager 5.00 Senior Technologist INFORMATION SECURITY SERVICES 1.00 Security Manager FY 2018 POSITION TOTALS 33.00 - Full-time 0.98 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 300 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY Description Information Technology's vision statement is, 'to build and enable a leading smart and digital city.' A digital city broadly adopts innovative internet-based technologies to enable quality services and processes among city employees, citizens, visitors and businesses. Being smart means using these same digital city capabilities integrated with the physical environment to improve livability, workability, and sustainability. Beginning in Fiscal Year 2013, the Information Technology Department embarked on a multi -year journey to transform itself into being a provider of higher -value information technology solutions and make steady progress towards building a leading digital city. The Information Technology Department provides a wide range of services for the City of Palo Alto through the following operational divisions: OFFICE OF THE CIO (OCIO) Provides leadership and strategic direction for the City of Palo Alto's use of technology. OCIO provides advisory services to City Departments regarding opportunities to leverage technology to improve government services. In addition, the division sets IT policies and directions for the IT Department and the City. This division is often the public facing component of the team and is responsible for fostering mutually beneficial public -private, technology related partnerships. The core services include IT strategic planning, financial management, contract management, communications, work force development, overall department administration, and data analyt- ics. IT PROJECT MANAGEMENT OFFICE (PMO) Oversees technology projects across the City of Palo Alto. Offering IT portfolio management, program management, and project management services, PMO exists to enable the City of Palo Alto's technology projects to succeed, and to ensure that the right technology projects are selected for execution. IT PMO is a synthesis of both the IT Governance and IT Project Services program areas. IT OPERATIONS Maintains and supports all deployed back -end and front-end City technologies including the process of retiring products and services. The team also ratifies standards working alongside INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 301 INFORMATION TECHNOLOGY other IT divisions. Services include service desk, infrastructure support, server hosting, office automation software support, technical training and support, and asset management. IT ENTERPRISE SERVICES Responsible for maintaining a core set of large enterprise resource planning (ERP) systems like SAP and Geographic Information Systems (GIS) for supporting financial business processes, information flow, reporting, and data analytics for the City. These services include all aspects of Enterprise Systems management such as planning, integration, administration, support, mainte- nance, governance, and change management. INFORMATION SECURITY SERVICES Responsible for developing and implementing the citywide information security program that includes the preservation of the availability, integrity, and confidentiality of City information resources. These services include security policy and procedures, legal compliance, risk management, disaster recovery, and security audit. Accomplishments ▪ Raj Patel, Information Security Manager was awarded Excellence for Cybersecurity Leadership in Local Government by California Cybersecurity Symposium - Sept 2016 ▪ Cloud -based Communication and Productivity Suite Implementation complete (Office 365) - Sept 2016 ▪ Interactive Voice Response (IVR) System Implementation complete - Oct 2016 ▪ Mobile Emergency Operations Center Network and Phone System upgrade complete - Oct 2016 ▪ Palo Alto Named a Leading Digital City 4th Year in a Row by Center for Digital Government - Nov 2016 • Jonathan Reichental, CIO, recognized as one of the top 100 global influencers of government technology in 2016 by Onalytica - Dec 2016 • CORE cashiering system for credit collections and Utilities customer service upgrade complete - Dec 2016 ▪ Enterprise Asset Management System (EAMS) Implementation complete - May 2017 ▪ Geographic Information System (GIS) Needs Assessment complete - June 2017 ▪ Deployed several new cybersecurity systems and upgrades throughout FY 2017 Initiatives The following major initiatives will be worked on by the Information Technology Department in Fiscal Year 2018, but not necessarily completed in Fiscal Year 2018. As circumstances dictate, projects will be reprioritized or rescheduled as appropriate: 302 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY • SharePoint Academy Design, Development and Implementation - The SharePoint Academy provides a framework for understanding SharePoint features, functions, administration and collaboration. ▪ Next Generation Enterprise Resource Planning (ERP) System Selection - Select and procure new ERP system. • Geographic Information System (GIS) Implementation - Select and procure new enterprise GIS. • Council Chambers Equipment Replacement - Remove the old analog equipment and install a 100 percent digital system. • Service Management System Replacement - Next generation cloud -based solution for work order management, asset management, license management, and configuration management database (CMDB) management. ▪ Mobility Management - Increased security for smartphones, tablets and laptops. ▪ Smart City Experiments - Smart Lighting, Digital Signage, and Air Quality Sensors. Goals and Objectives GOAL 1 Design and implement high -priority digital capabilities for City staff, residents, visitors, and local businesses. Objectives: • Develop and 'pilot' new services that will increase the community's access to online self- services. • Maintain a governance model and roadmap for mobile application deployment to ensure quality and valuable mobile capabilities are deployed to our community. ▪ Deploy and maintain platforms and processes for supporting best -in -class open and participative government to enrich our democracy. ▪ Maintain an ongoing program of civic innovation activities to be ahead of the curve in government technology and include broad participation from innovators in the public and private sectors. • Execute the GIS strategy that will increase GIS capabilities and bring value to a larger number of stakeholders. GOAL 2 Maintain and mature an IT governance model. Objectives: ▪ Maintain and mature a citywide IT governance process to ensure alignment between technology priorities, project risks, City goals, and available funds. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 303 INFORMATION TECHNOLOGY • Maintain and keep current an accurate 3 -year IT roadmap. GOAL 3 Standardize and enhance IT service delivery. Objectives: • Organize IT service delivery around the principles of the Information Technology Infrastructure Library (ITIL) in order to provide high quality, consistent, and efficient IT services. ▪ Establish and maintain division processes, staff responsibilities, and performance measures. ▪ Execute appropriate training for IT staff to support established processes. • Maintain an actionable IT dashboard. ▪ Manage a program to provide a career path and learning opportunities for the City's technology staff. GOAL 4 Upgrade and enhance technology infrastructure, communications systems, and information security capabilities. Objectives: ▪ Upgrade our data center with emphasis on a 'cloud -first' approach to lower cost and support needs. ▪ Decommission all unnecessary systems and rationalize core services with a focus on Software -as -a -Service (SaaS). • Maintain and improve the confidentiality, integrity, and availability of information across the City's system. • Ensure a fully -tested disaster recovery and continuity program for a core set of City systems. 304 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY Key Performance ti easures PERCENT OF SURVEY RESPONDENTS RATING THE SERVICES PROVIDED BY THE INFORMATION TECHNOLOGY DEPARTMENT AS EXCELLENT Increase customer satisfaction on the services provided by the Information Technology Department. Establish clear division processes, staff responsibilities, and performance measures. Goal Objective Percent of survey respondents rating the services provided by the IT Department as excellent Description Purpose Status FY 2015 Actuals 89.00% FY 2016 Actuals 93.00% FY 2017 Adopted 90.00% FY 2017 Estimated 94.00% FY 2018 Adopted 95.00% This measure identifies the overall level of satisfaction internal customers have with telephone, network, application, and desktop support services. This measure is an important qualitative assessment of how well IT is supporting its internal customers and whether they feel IT is meeting their needs. Ongoing outreach and customer relationship management is being employed to ensure high customer satisfaction. Programs such as "Customer Shadowing" have provided excellent feedback and relationship building. PERCENTAGE OF SERVICE DESK REQUESTS RESOLVED AT TIME OF CALL Goal Track the overall time it takes to resolve service desk work orders. Objective Percent of service desk requests resolved within 8 hours Percent of service desk requests resolved within 5 days Percent of service desk requests resolved beyond 5 days Percent of service desk requests resolved at time of call Percent of service desk requests resolved within 4 hours Description Purpose Status Establish clear division processes, staff responsibilities, and performance measures. FY 2015 Actuals 5.00% FY 2016 Actuals 6.00% FY 2017 Adopted 4.00% FY 2017 Estimated 6.00% FY 2018 Adopted 6.00% 29.00% 28.00% 25.00% 30.00% 31.00% 11.00% 17.00% 11.00% 11.00% 31.00% 33.00% 33.00% 32.00% 32.00% 20.00% 12.00% 23.00% 22.00% 21.00% 21.00% These measures track the time it takes to resolve service desk work orders. Ensuring that IT staff are resolving work orders in a timely manner provides a quantitative measurement of one of the important services the department provides. There has been minor fluctuation of actuals for help desk work order resolution times; however, with the implementation of self-service and cloud automation tools to address lower level Tier 1 requests, staff will be available to work on more complex work orders. This may result in higher first call resolution times. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 305 INFORMATION TECHNOLOGY Workload V IT expenditure per workstation Number of closed help desk requests Number of datasets published on open data platforms ensures $5,226.00 9,885 FY 2016 Actuals $4,703.00 10,748 FY 2017 Adopted $5,808.00 11,556 FY 2017 Estimated $4,813.00 9,778 FY 2018 Adopted $4,861.00 10,334 84 83 102 88 98 306 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY 3udget Summary Dollars by Division CIP Technology Fund Enterprise Systems Office of the CIO Operations Project Services Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,235,268 2,069,255 4,915,087 3,733,077 (1,182,010) (24.0)% 2,339,887 2,582,366 3,611,975 3,323,269 (288,706) (8.0)% 2,780,458 2,883,501 3,165,386 3,120,591 (44,795) (1.4)% 6,716,926 5,702,804 7,351,849 7,788,970 437,122 5.9% 607,169 1,112,628 1,433,174 2,146,203 713,029 49.8% 13,679,707 14,350,553 20,477,471 20,112,110 (365,361) (1.8)% Dollars by Category Salary & Benefits Healthcare 531,064 551,700 742,824 789,387 46,562 6.3% Other Benefits 134,178 182,332 154,168 185,047 30,879 20.0% Overtime 17,379 11,662 18,585 18,585 -% Pension 673,950 947,892 1,200,041 1,356,582 156,541 13.0% Retiree Medical 264,356 273,435 299,224 314,799 15,575 5.2% Salary 3,464,454 3,798,444 4,591,711 4,932,078 340,366 7.4% Workers' Compensation 2,374 11,212 49,078 127,989 78,910 160.8% Total Salary & Benefits 5,087,755 5,776,675 7,055,632 7,724,466 668,834 9.5% Allocated Charges 952,033 1,089,438 1,114,193 997,238 (116,955) (10.5)% Contract Services 3,882,450 3,879,837 5,492,521 5,641,332 148,811 2.7% Facilities & Equipment 1,599,760 572,002 841,573 837,702 (3,871) (0.5)% General Expense 496,789 446,099 575,480 569,679 (5,801) (1.0)% Operating Transfers -Out 53,219 57,340 16,485 161,418 144,933 879.2% Rents & Leases 267,047 342,594 351,501 362,749 11,248 3.2% Supplies & Material 105,387 65,306 115,000 84,450 (30,550) (26.6)% Capital Improvement Program 1,235,268 2,121,263 4,915,087 3,733,077 (1,182,010) (24.0)% Total Dollars by Expense Category 13,679,707 14,350,553 20,477,471 20,112,110 (365,361) (1.8)% Revenues Charges for Services - 80,292 - - - -% Charges to Other Funds 11,718,436 13,253,295 13,788,468 13,735,894 (52,575) (0.4)% Operating Transfers -In 2,349,175 2,479,564 2,077,785 2,031,612 (46,173) (2.2)% INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 307 INFORMATION TECHNOLOGY 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget Other Revenue 53,576 130,864 130,864 Return on Investments 352,985 381,527 343,300 343,300 Total Revenues 14,474,172 16,194,678 16,340,417 16,241,669 (98,748) (0.6)% FY 2018 Change $ FY 2018 Change % -% -% Positions by Division Enterprise Systems Office of the CIO Operations Project Services Total Staffing T Job Classification Administrative Assistant Assistant Director Administrative Services Business Analyst 9.50 9.00 10.50 9.50 (1.00) (9.52)% 6.10 8.10 5.10 6.10 1.00 19.61% 13.96 13.48 13.48 14.48 1.00 7.42% 4.10 5.00 7.00 7.00 - -% 33.66 35.58 36.08 37.08 1.00 2.77% FY 2015 Actuals 1.00 0.10 FY 2016 Actuals 1.00 1.00 Desktop Technician 5.00 5.00 Director Administrative Services/ CFO Director Information Technology/ CIO 0.10 0.10 1.00 1.00 FY 2017 Adopted Budget 1.00 0.10 FY 2018 Adopted Budget 1.00 0.10 1.00 1.00 6.00 6.00 1.00 1.00 FY 2018 Change FTE FY 2018 Salary 87,173 19,192 - 149,739 - 543,198 220,584 Management Analyst 1.00 Manager Information Technology 4.00 4.00 4.00 4.00 563,950 Manager Information Technology 1.00 1.00 1.00 1.00 - 146,682 Security Principal Business Analyst 1.00 1.00 1.00 147,950 Principal Management Analyst 1.00 Senior Business Analyst 2.00 2.00 2.00 268,403 Senior Management Analyst 2.00 1.00 1.00 1.00 119,600 Senior Technologist 13.50 15.00 16.00 17.00 1.00 2,181,678 308 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Technologist Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 2.00 31.70 2.00 34.10 1.00 35.10 1.00 36.10 149,739 1.00 4,597,890 1.96 1.48 0.98 0.98 — 125,923 33.66 35.58 36.08 37.08 1.00 4,723,813 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 309 INFORMATION TECHNOLOGY 3udget Reconciliation Prior Year Budget 36.08 20,477,471 16,340,417 ositions Expenditures Revenues Net Technology Fund 4,137,054 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Project Management Application Pilot Accela Enhancements Data Center Failover Redundancy SAP Consultant for Human Resources Capital Improvement Project Funding One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities Salary and Benefit Adjustments Capital Improvement Funding Adjustments Application Replacement and Maintenance Infrastructure Replacement and Maintenance Desktop Replacement and Maintenance Telecommunication Services Transfer to University Avenue Parking Fund for Employee Parking Permits Enterprise Systems Service and Maintenance Office of the CIO Allocated Charges ARC Document Solutions (Print & Mail Allocated Charges Realignment) Charges to Other Funds - Information Technology Services Information Technology Surcharge Revenue Rents and Leases Expenditure Alignment General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustments Print & Mail Allocated Charges Adjustment Utilities Allocated Charges Adjustments (40,000) (100,000) (120,000) (125,000) (4,915,087) (5,300,087) 485,931 3,733,077 181,083 (46,957) (44,714) (10,000) 9,275 7,317 (5,801) (550) 11,248 (174,431) 44,169 1,875 4,993 (69,126) (1,140,921) (1,210,047) 1,067,413 534,832 27,335 (40,000) (100,000) (50,874) (125,000) (3,774,166) (4,090,040) 485,931 2,665,664 181,083 (46,957) (44,714) (10,000) 9,275 7,317 (5,801) (550) (534,832) (27,335) 11,248 (174,431) 44,169 1,875 4,993 310 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY 3udget Reconciliation 1Expenditures Revenues Net Technology Fund Vehicle Replacement & Maintenance Allocated Charges Adjustments Adjustments to Costs of Ongoing Activities 6,440 4,202,955 1,629,580 6,440 2,573,375 Total FY 2018 Base Budget 36.08 19,380,339 16,759,950 2,620,389 Budget Adjustments 1 Geographic Information System (GIS) Replacement 2 Supplemental Pension Trust Fund Contribution 3 City -Wide SharePoint Training 4 Security Incident and Event Management 5 Right of Way Notification Application 6 Public Safety Technical Staffing 7 Information Technology Department Allocation (FY 2016 Salary Savings) Total Budget Adjustments Total FY 2018 Adopted Budget — I 1.00 500,000 305,096 194,904 135,658 — I 135,658 50,000 30,510 19,490 27,050 27,050 ' 19,063 19,063 (900,000) 900,000 1.00 731,771 (518,281) 1,250,052 37.08 20,112,110 16,241,669 I 3,870,441 14 0111 0°01 11 0001 I 0 10 3 I 01. 0 1 01 0001 0YQ1g0 111Y00100 1010 01 0 010.115, 1110111101110.00000001 4,11 0111'11 i 140101101 0 00;61100.,,410., 10.tI ic 0111 0101110ol11lt 4±41 1 ' : loom Ioo111- 10011 101 11 0311 1001 000,0 0110 000111 :01.000 > a 101 1110011810 0010 04 1001 06001 101(1000 001 10111000 00100 111001101010011 101001111 110111100010111 11101000100010 10110100140101 1111111101110111011011 I INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 311 INFORMATION TECHNOLOGY Budget Adjustments 3udget Adjustments Positions Expenditures Revenues Net Technology Fund 1 Geographic Information System (GIS) Replacement 0.00 I 500,000 I 305,096 194,904 This action adds funding of $500,000 to replace the City's enterprise Geographic Information System (GIS) with existing funding of $250,000 that was programmed in the Fiscal Year 2018 base budget for a total project budget of $750,000. A GIS system will capture, store, manipulate, analyze, manage, and present spatial or geographic data. The City of Palo Alto will continue to use GIS for advanced mapping tools that integrate geographically -referenced data across the enterprise, and will facilitate other systems, departments, and the public to share information, increase productivity, and avoid data redundancy. An assessment of the City's current GIS system, which has been in place for over 20 years, was performed and concluded that a new system would best meet the City's growing needs and would foster collaboration and transparency. Funding will be provided through the following sources: Technology Surcharge Reserve for the General Fund portion ($195,000), enterprise and internal service funds ($305,000), and already accrued application replacement funding currently programmed into the Fiscal Year 2018 base budget ($250,000). Ongoing funding for operations and maintenance is already included in the IT annual budget. (Ongoing net costs: $0) Performance Results 0 The procurement of a new GIS will increase customer satisfaction through more robust mapping integration. 2 Supplemental Pension Trust Fund Contribution 0.00 135,658 This action establishes a transfer from the Technology Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $136,000 which represents approximately 10% of the Technology Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing Costs: $0) Performance Results 4 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 3 City -Wide SharePoint Training 0.00 50,000 — 30,510 19,490 This action provides one-time funding of $50,000 from the Technology Surcharge Reserve ($19,490) and from enterprise and internal service funds ($30,510) for city-wide training on SharePoint. Professional services will be obtained through a training organization to design, develop, and implement a city-wide training in collaboration with the City's SharePoint Leadership committee. The training will provide a framework for understanding features, functions, administration, and collaboration in order to more effectively use SharePoint across the organization. (Ongoing costs: $0) Performance Results 0 The provision of a SharePoint training is anticipated to reduce cycle time through increased collaboration across the organization. 4 Security Incident and Event Management 11 0.00 27,050 27,050 This action provides $27,050 in ongoing funding for the maintenance costs associated with networking tools and Security Information and Event Management (SIEM) tools to provide more robust security to the City network. SIEM technology will provide real-time analysis of security alerts generated by network hardware and applications, which will make the City more resilient to hacking and malicious events targeting the City's networking infrastructure. This action also aligns with the Information Technology Disaster recovery plan. These costs will be allocated throughout the City through the regular allocation of Information Technology costs. (Ongoing net costs: $0) 312 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET INFORMATION TECHNOLOGY 3udget Adjustments Performance Results This action will increase the quality of the City's network by decreasing the City's vulnerability to hacking and other networking attacks. 5 Right of Way Notification Application 19,063 This action provides $19,000 dollars in ongoing funding for a right of way notification application. This solution will provide notice to residents and commuters by visually demonstrating where all relevant street work and maintenance is scheduled to be performed on a map. Residents and commuters are currently impacted by disruptions to the public right of way by City staff, City contractors, and private entities. This public facing notification solution will enable proactive outreach of any planned right of way impacts. It is anticipated that this notification solution will greatly diminish the volume of phone and e-mail traffic associated with inquiries related to right of way disruptions. The Development Services Department will be responsible for the maintenance and management of this application; charges will be allocated accordingly. (Ongoing net costs: $0) Performance Results 0 This action will increase customer satisfaction through proactive notification of right of way disruptions. 6 Public Safety Technical Staffing This action adds 1.0 Senior Technologist for Public Safety and eliminates $183,000 in contract funding. In the FY 2016 Adopted Budget, funding was approved equivalent to 1.0 Senior Technologist, pending the completion of a staffing assessment by Gartner. The Information Technology Department and the public safety departments agree that the best use of funding is a full-time position which will be added to the Information Technology Department to focus exclusively on public safety technologies. Funding will continue to be allocated to the appropriate departments. (Ongoing net costs: $0) Performance Results 0 This action will increase customer satisfaction by allocating a dedicated resource for public safety technology. 7 Information Technology Department Allocation (FY 2016 Salary Savings) (900,000) 900,000 This one-time action reduces the allocation of Information Technology Department salary and benefit expenses across the organization consistent with salary savings that was realized in Fiscal Year 2016. Due to the number of vacancies in the Information Technology Department, significant expense savings were realized in FY 2016. Therefore, in order to assist in the City's overall reduction goals for FY 2018 and ensure appropriate reserves in the IT fund, this one-time reduction in allocated charges will generate $900,000 in reduced charges throughout the organization ($351,000 in the General Fund). (Ongoing costs: $0) Performance Results There is no impact on performance levels as a result of this action. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 313 CITY OF PALO ALTO staff to create resources and LIBRARY Mission Statement The Library Department connects and strengthens our diverse community through knowledge, resources, and opportunities. We inspire and nurture innovation, discovery, and delight. Purpose The purpose of the Library Department is to provide exceptional, responsive public service to Palo Alto residents and employ- ees; to promote exploration of library resources to support learning, recreation, and personal enrichment; to foster a love of reading, creative expression, and com- munity engagement for all ages; and to develop library facilities, technology, and a welcoming, inclusive environment in which to share valuable skilled expertise. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 315 LIBRARY DIRECTOR Monique le Conge Ziesenhenne PUBLIC SERVICES DIVISION 1.00 Assistant Director RINCONADA LIBRARY 1.00 Library Services Manager 1.00 Supervising Librarian 2.00 Senior Librarian 1.00 Coordinator, Library Program 2.00 Librarian 1.00 Library Associate 3.00 Library Specialist CHILDREN'S LIBRARY 1.00 Library Services Manager 1.00 Senior Librarian 2.00 Librarian 1.00 Library Associate 1.00 Library Specialist MITCHELL PARK LIBRARY 1.00 Library Services Manager 1.00 Supervising Librarian 2.00 Senior Librarian 3.00 Librarian 1.00 Library Associate 5.00 Library Specialist COLLEGE TERRACE LIBRARY 1.00 Library Associate 0.50 Library Specialist DOWNTOWN LIBRARY 1.00 Library Associate 1.00 Library Specialist ADMINISTRATION 1,00 Management Analyst 1.00 Administrative Associate III 1 INFORMATION TECHNOLOGY & COLLECTIONS DIVISION 1.00 Division Head, IT & Collections COLLECTIONS & TECHNOLOGY 2.00 Senior Librarian 2.00 Library Associate 1,00 Library Specialist 1.00 Business Analyst DIGITAL SERVICES & E -BRANCH 1.00 Library Services Manager 2.00 Senior Librarian 1.00 Library Specialist FY 2018 POSITION TOTALS 48.50 - Full -Time 15.08 - Hourly a This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation 316 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET LIBRARY Description The Library provides a wide range of public services for the City of Palo Alto through the following: PUBLIC SERVICES & PROGRAMS Offers a variety of programs free of charge to library users of all ages, interests, and abilities, to provide educational, self-help, recreational, technological, and multi-lingual outreach. When appropriate, partners with other civic, non-profit, business, and educational organizations to present these programs. INFORMATION, TECHNOLOGY, & COLLECTIONS Provides opportunities for the public to access a variety of technologies, both inside and out- side library facilities, including hardware devices, online databases, free WiFi, mobile applica- tions, and experimental partnerships. Library collections include a diverse selection of print and non -print materials, as well as digital resources such as electronic books, magazines, and media, to meet the educational, informational, and recreational needs of its clientele, reflecting the vari- ety of languages, cultures, and interests of our community. BUILDINGS, SUPPORT, & ADMINISTRATION Provides information, training, and support for City employees and the public, and ensures that all aspects of library services and policies are delivered with the highest degree of public stew- ardship in mind. By funding major facility renovations and improvements to three libraries through a dedicated library bond, and two previous renovation projects, Palo Alto has modern libraries offering comfortable, inviting, and flexible spaces for everyone in our community to gather and learn. Accomplishments ▪ Maintained 91% satisfaction with Library Services (rated 'excellent' or 'good'), as measured by the National Citizen SurveyTM • First U.S. public library to implement Kono, a service that provides digital magazines in Chinese and Japanese. • Implemented Storyplay*r, an online library of digital children's illustrated books in French and English. Palo Alto City Library (PACL) is the first institutional client in North America. • Initiated multiple Adult English as a Second Language (ESL) conversation groups (beginning and advanced) and an ESL book discussion club, with volunteer support as part of the New Americans program. • Implemented 3-D printers at Downtown and Rinconada libraries. • Developed an updated Technology Plan for FY 2017 - FY 2022. • Participated in the California State Library Initiative 'California Revealed' which aims to assist local public libraries, in partnership with other local heritage groups to digitize, preserve, LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 317 LIBRARY and provide online historically significant content on California (e.g. books, documents, audiovisual recordings). PACL and the Palo Alto Historical Association worked together to make more historical information available online. ▪ Collaborated with Community Services Department and Art Center staff for Mind in the Making (to understand early childhood development) and The Harwood Institute for Public Innovation (to facilitate community conversations to address problems and find solutions). • Held a children's author and illustrator festival at Mitchell Park. • Implemented BikePALS with a grant from the Pacific Library Partnership and a donation from the Friends of the Palo Alto Library to support Bike Outreach, including a bike mobile, two bicycle repair stations (one each at Mitchell Park and Rinconada libraries), creation of a Safe Routes to Libraries map, and bicycle safety training for children. The bike mobile project allows staff to set up at schools, farmers' markets, and other outreach events with a small collection and library card distribution, while modeling practices that are environmentally conscious and limit our contribution to traffic. In the first month of outreach, 2,500 people were contacted. • Installed drive -up book drops at Mitchell Park and Rinconada libraries. ▪ Completed the library's procedure manual to ensure that new processes reflect the completion of updated buildings, provide staff with appropriate guidance and align with existing policies. ▪ Visited all Palo Alto Unified School District (PAUSD) Kindergarten classes to make sure all kindergarten students have a library card. • Implemented inclusive programming for children who have differing needs and abilities. • Implemented a Seed Lending Library at Rinconada Library. • From 2006-2016, have increased the percentage of residents rating the 'variety of library materials' as 'excellent' or 'good' from 59% (2006) to 82% (2016), as reported by the National Citizen SurveyTM Initiatives • Implement eBranch selection to enhance Library users' on-line and mobile experience, making collections and services more accessible in web searches. • Partner with PAUSD to create 'Student Success Cards,' where every student ID will work as a public library card. • Develop a racial equity plan to include in next Library Strategic Plan, FY 2018 - FY 2021. ▪ Complete 'Positioning Libraries for a Virtual Future' grant, received from the Pacific Library Partnership Innovation Grants program, to test greeter robots and a 3-D modeling workstation. • Develop a collection maintenance plan and review the collection development policy. ▪ Implement a Total Business Solution to replace outdated public copy system, scanning, PC management, and printing. 318 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET LIBRARY Goals and Objectives GOAL Create a variety of opportunities for learning and provide effective tools for improving all types of literacy. Strategies: ▪ Provide early childhood literacy programs based on current research in child development and learning. ▪ Create opportunities for community members to acquire the necessary skills to succeed in an increasingly digital world. • Provide a portal to American culture, language, and civic life. ▪ Ensure that the library's collections, technology, and buildings support the evolving requirements of 21st Century lifelong learning. GOAL 2 Strengthen the community and the library through effective partnerships. Strategies: • Support Project Safety Net's programs to promote youth well-being and support the 41 Developmental Assets. ▪ Increase collaboration with Palo Alto's public and private schools and their school librarians. • Support library stakeholders in their advocacy and fundraising activities. • Connect librarians to community organizations in order to support their goals and participate in their activities by bringing library resources and services directly to them. GOAL 3 Facilitate civic participation and effective community engagement. Strategies: • Provide a forum to explore issues of local interest and current events. . Engage community members, with particular attention to teens and seniors, in library services as volunteers and program advisors. GOAL 4 Expand virtual customer experiences. Strategies: ▪ Make the library e -branch as usable and useful on mobile devices as on PCs and laptops. • Grow digital collections to a robust level to meet increasing demand. ▪ Make discovery and use of library collections, services, and resources more simple. GOAL 5 Foster a culture of excellence, continuous improvement, and risk -taking. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 319 LIBRARY Strategies: • Attract, develop, and retain the most talented employees. • Provide opportunities and resources for all employees to continue developing their skills and knowledge. • Embrace and reward creativity and innovation. Key Performance Measures NUMBER OF TEENS WHO PARTICIPATE IN THE LIBRARY'S PROGRAMS FOR TEENS, INCLUDING THE SUMMER READING PROGRAM Goal Develop and provide library services and programs supporting the 41 Developmental Assets for Adolescents Model. Encourage adolescents between the ages of 12 and 18 to read for pleasure three or more hours a week (Developmental Asset #25). Objective Number of teens who participate in the Library's reading programs for teens Description Purpose Status Workload V FY 2015 Actuals 2,746 FY 2016 Actuals 4,559 FY 2017 Adopted 6,785 FY 2017 Estimated 5,778 FY 2018 Adopted This measure tracks the level of interest and participation in the library's recreational reading programs. 6,785 Adolescents who enjoy reading are more likely to grow up into healthy, caring, and responsible adults. The Teen Library Advisory Board (T -LAB) works with staff to implement and guide program development. Combined with expanded spaces for teens at Mitchell Park and Rinconada Libraries, growth in participation is expected to continue. ensures Meeting Room Reservations Number of visits to library branches Number of virtual visits to the library Checkouts of library materials Annual turnover rate of library collections FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted 4,339 9,943 6,516 10,000 10,000 810,962 831,206 956,290 856,142 873,265 1,163,467 1,921,738 1,327,618 1,979,390 2,018,978 1,499,406 1,400,926 1,781,354 1,442,954 1,450,000 3.49 3.04 3.00 3.05 3.20 320 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET LIBRARY 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ Dollars by Division Administration 975,012 832,826 845,777 879,935 34,158 Collection and Technical Services 2,518,152 2,217,832 2,505,504 2,574,027 68,523 Public Services 4,486,403 4,909,335 5,640,221 5,992,892 352,671 Total 7,979,567 7,959,994 8,991,501 9,446,853 455,352 FY 2018 Change % 4.0% 2.7% 6.3% 5.1% Dollars by Category Salary & Benefits Healthcare 763,758 760,110 991,346 990,284 (1,062) (0.1)% Other Benefits 103,221 116,669 100,627 126,728 26,101 25.9% Overtime 43,747 36,276 68,783 68,783 - -% Pension 740,890 849,070 1,034,342 1,132,460 98,118 9.5% Retiree Medical 441,876 398,190 435,745 458,425 22,680 5.2% Salary 3,495,803 3,851,473 4,278,886 4,409,306 130,419 3.0% Workers' Compensation 9,155 7,458 51,358 139,838 88,480 172.3% Total Salary & Benefits 5,598,450 6,019,245 6,961,088 7,325,825 364,737 5.2% Allocated Charges 740,610 664,610 785,733 939,703 153,969 19.6% Contract Services 282,135 244,150 342,552 350,065 7,513 2.2% Facilities & Equipment 19,708 13,360 19,400 17,900 (1,500) (7.7)% General Expense 91,709 90,618 80,930 81,430 500 0.6% Rents & Leases 513 (513) (100.0)% Supplies & Material 1,246,954 928,011 801,286 731,931 (69,355) (8.7)% Total Dollars by Expense Category 7,979,567 7,959,994 8,991,501 9,446,853 455,352 5.1% Revenues Charges for Services 17,130 21,690 22,888 25,460 2,572 11.2% From Other Agencies 7,000 - (7,000) (100.0)% Other Revenue 354,719 72,484 18,100 23,600 5,500 30.4% Other Taxes and Fines 125,769 147,244 154,297 152,225 (2,072) (1.3)% Rental Income - 1,770 - - - -% Total Revenues 497,618 243,188 202,285 201,285 (1,000) (0.5)% LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 321 LIBRARY 3udget Summary 1 Positions by Division Administration Collection and Technical Services Public Services Total Staffing Administrative Assistant Administrative Associate Ill Job Classification Assistant Director Library Services Business Analyst FY 2015 Actuals 0.40 10.80 48.27 59.47 FY 2015 Actuals 1.00 FY 2016 Actuals 0.40 11.64 52.04 64.08 FY 2016 Actuals 1.00 FY 2017 Adopted Budget 0.40 13.24 49.94 63.58 FY 2017 Adopted Budget 1.00 FY 2018 Adopted Budget 0.40 13.24 49.94 63.58 FY 2018 Adopted Budget 1.00 1.00 1.00 1.00 1.00 - 1.00 1.00 1.00 1.00 - Coordinator Library Programs 1.00 1.00 1.00 1.00 - Director Libraries 1.00 1.00 1.00 1.00 Division Head Library Services 1.00 1.00 1.00 1.00 Librarian 6.70 7.00 7.00 7.00 Library Assistant 4.50 - - - Library Associate 7.00 7.00 7.00 7.00 - Library Specialist 7.00 12.50 12.50 12.50 FY 2018 Change $ FY 2018 Change FTE (1.00) 1.00 FY 2018 Change % -% FY 2018 Salary 81,689 146,578 149,739 97,746 196,914 125,466 552,495 499,263 843,111 Management Analyst 1.00 1.00 104,000 Management Assistant 1.00 1.00 1.00 - (1.00) Manager Library Services 4.00 4.00 4.00 4.00 411,986 Senior Librarian 8.50 8.50 9.00 9.00 - 806,736 Supervising Librarian 2.00 2.00 2.00 176,342 Sub -total: Full -Time Equivalent 44.70 48.00 48.50 48.50 - 4,192,064 Positions Temporary/Hourly 14.77 16.08 15.08 15.08 761,731 Total Positions 59.47 64.08 63.58 63.58 - 4,953,794 322 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET LIBRARY 3udget Reconciliation Prior Year Budget 63.58 8,991,501 202,285 8,789,216 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Pacific Library Partnership Building Up the Bicycles Grant One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Fund Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Storm Water Management Fee Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (1,000) (1,000) — (1,000) (1,000) 364,737 (3,555) 45,141 (392) 364,737 (3,555) 45,141 (392) (20,476) (20,476) (2,008) 1,413 236 400 132,450 (2,795) 515,152 (2,008) 1,413 236 400 132,450 (2,795) 515,152 Total FY 2018 Base Budg 63.58 9,505,653 201,285 9,304,368 Budget Adjustments 1 Electronic Library Material Databases 2 Administration Division Staffing Reorganization Total Budget Adjustments (58,800) 0 (58,800) (58,800) 0 0 0 (58,800) Total FY 2018 Adopted Budget 63.58 9,446,853 201,285 9,245,568 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 323 LIBRARY 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Electronic Library Material Databases This action reduces the Library's digital resources and technical services, minimizing overlap between existing resources and maintaining current service levels. The Library conducted an analysis of use by reviewing current customer and staff use as well as existing overlap of services and database offering. This reduction reflects the combined implication of eliminating redundant databases and technical services partially offset by the addition of new services intended to further augment and bolster the offerings of the Library. New services include video tutoring resources, live homework tutoring online, and a tool for library market analysis. The library will continue to monitor the use of digital resources and technical services. (Ongoing net savings: $58,800) Performance Results The reduction and consolidation of the Library's digital resources and services will help control costs and minimize impact to overall services. The reduction selections are made by reviewing current customer/staff use and/or partially overlapping coverage by other existing resources. 2 Administration Division Staffing Reorganization This action realigns two positions in the Administration Division to facilitate succession planning and more accurately represent the duties and responsibilities of the division. The reclassification of 1.0 Administrative Assistant to 1.0 Management Analyst aligns with the primary duties of the position including statistical analysis, management of the department's budget, contract administration, and department personnel administration. This higher level is commensurate with the scope and level of responsibility necessary to manage these tasks. This is offset by the reclassification of 1.0 Management Assistant to 1.0 Administrative Associate Ill. With the increased capacity and complexity assigned to the Management Analyst, the department will need more administrative and executive support, which is more commensurate with an Administrative Associate Ill. (Ongoing net costs: $0) Performance Results The realignment will more accurately reflect the current roles and responsibilities of the two positions and increase the quality of work performed by each position. 324 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES • Mission Statement KEEP THESE N UMHEf;S IEr arga c r Mort f/ester [tta,c 5u Broadcast: VZSU i©•1 FN C 5Cf:,29 The Office of Emergency Services mission is to prevent, prepare for and mitigate, respond to, and recover from all hazards. Purpose The Office of Emergency Services purpose is to develop, maintain, and sustain a city- wide, comprehensive, all -hazard, risk - based emergency management program that engages the whole community. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 325 OFFICE OF EMERGENCY SERVICES EMERGENCY SERVICES DIRECTOR Kenneth Dueker 1.00 Office of Emergency Services Coordinator 1.00 Program Assistant FY 2018 POSITION TOTALS 3.00 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 326 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Description The Office of Emergency Services develops, maintains, and sustains a citywide, comprehensive, all -hazard, risk -based emergency management program that engages the whole community. Accomplishments • Completed the five year update of the City of Palo Alto Local Hazards Mitigation and Adaptation Plan (LHMAP). • Facilitated the update of the Foothills Fire Management Plan, last published in 2007. • Assisted as subject matter expert in the development of the new Comprehensive Plan Safety Element. • Activated Emergency Operations Center (EOC) to manage the 2016-2017 Storm Season and other events. ▪ Worked with Santa Clara County OES to upgrade the Mass Notification System vendor for AlertSCC. ▪ Continued to develop the Emergency Services Volunteer (ESV) program and general community public safety awareness through ongoing public education sessions, training, and exercises. ▪ In coordination with CSD and the Police Department, piloted a new technology to improve rail monitoring; support Project Safety Net (PSN) and Track Watch guards/volunteers. • Continued to work with our regional public safety partners on a wide range of planned and special events, ranging from visits by the President of the United States and other dignitaries to mass -gatherings and high -risk events. The Mobile Emergency Operations Center (MEOC) and other specialized OES vehicles were deployed to the majority of these events. Initiatives • Continue to update and develop needed plans and documents such as the Continuity of Operations Plan (COOP), and Earthquake Annex to the Emergency Operations Plan. ▪ Situational Awareness: Implementing technology and other best practices to improve the efficacy of the City's EOC and other facilities. • Work with City IT and Utilities department's to deploy a new Public Safety Wireless Network. • Work with City Public Works, Police, and Fire department's on the design of the new Public Safety Building (PSB). OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 327 OFFICE OF EMERGENCY SERVICES Goals and Objectives GOAL Promote operational readiness of the City to implement the emergency management cycle (mitigate, prepare, respond, recover). Objectives: • Execute a training and exercise plan for designated staff assigned to the EOC, MEOC, Department Operations Center, or other assignments. • Maintain emergency management facilities, critical infrastructure, and equipment to ensure they are fully mission capable. • Coordinate development of new technologies for emergency management. • Acquire grant funding to improve capabilities of preparedness and response resources. GOAL 2 Engage the whole community to prepare for all hazards. Objectives: ▪ Administer the City ESV program to provide a cadre of trained volunteers in residential neighborhoods. • Coordinate with the private sector and non -governmental organizations to promote continuity of business operations. • Outreach to the citizenry to encourage emergency preparedness. GOAL 3 Maintain policies and plans related to disasters, critical incidents and city safety. Objectives: ▪ Lead a process to identify threats and hazards and to assess risks the City faces. ▪ Maintain awareness of threats through coordination with Law Enforcement agencies and other public safety partners. • Participate in regional planning efforts. ▪ Revise the Emergency Operations Plan and associated supporting plans and annexes through an adaptive planning process. 328 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Grant contributions received Key Performance ti easures READINESS OF OFFICE OF EMERGENCY SERVICES (OES) RESOURCES Goal Promote operational readiness of the City to implement the emergency management cycle (mitigate, prepare, respond, recover). Objective Maintain OES emergency management facilities, critical infrastructure, and equipment fully mission capable. FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Percent of Office of Emergency Services resources that are able to respond effectively to hazards 97.00% 97.00% 95.00% 95.00% 95.00% Description OES must be able to implement response procedures to an all -hazards threat matrix at any time. OES strives to maintain fully mission capable status to respond effectively to all hazards. However, given the specialized and discreet inventory of equipment, it is not feasible to maintain all systems to a 100 percent readiness standard. Therefore, the goal is to meet a 95 percent readiness rate, allowing some flexibility for unscheduled equipment maintenance during the year. Purpose Critical resources will improve the City's ability to manage a response. Status The Emergency Operations Center (EOC) is functioning as an information intelligence center hub and staffed during the day on a regular basis. Other assets, such as the Mobile Emergency Operations Center (MEOC) Support Vehicle were also fully operational. Workload V easures FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 FY 2018 Estimated Adopted $24,500 $0 $15,000 Number of presentations, training sessions, and exercises 193 234 150 160 125 Number of deployments of the EOC, MEOC, and Incident Command Post (ICP) 47 46 50 40 40 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 329 OFFICE OF EMERGENCY SERVICES 3udget Summary il Dollars by Division Emergency Services Total FY 2015 Actuals 1,169, 201 1,169,201 FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 1,044,478 970,969 1,038,721 67,752 FY 2018 Change % 7.0% 1,044,478 970,969 1,038,721 67,752 7.0% Dollars by Category Salary & Benefits Healthcare 38,817 32,971 36,026 37,420 1,394 3.9% Other Benefits 13,064 13,436 12,050 14,142 2,093 17.4% Overtime 480 260 - -% Pension 80,731 86,693 91,918 103,920 12,001 13.1% Retiree Medical 61,790 59,094 51,613 54,299 2,686 5.2% Salary 364,197 366,326 375,206 402,563 27,357 7.3% Workers' Compensation (1,522) 1,989 7,885 22,588 14,702 186.5% Total Salary & Benefits 557,557 560,769 574,698 634,931 60,233 10.5% Allocated Charges 37,031 43,062 29,272 52,168 22,896 78.2% Contract Services 354,897 229,162 150,000 150,000 - -% Facilities & Equipment 151,328 126,759 135,000 117,000 (18,000) (13.3)% General Expense 22,509 31,038 32,700 34,700 2,000 6.1% Supplies & Material 45,879 53,687 49,300 49,922 622 1.3% Total Dollars by Expense Category 1,169,201 1,044,478 970,969 1,038,721 67,752 7.0% Revenues Charges to Other Funds 94,623 94,623 94,623 94,623 Total Revenues 94,623 94,623 94,623 94,623 -% -% Positions by Division Emergency Services 3.48 3.48 3.48 3.48 -% Total 3.48 3.48 3.48 3.48 - -% 330 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Staffing Director Office of Emergency Services Job Classification Office of Emergency Services Coordinator Program Assistant Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2015 Actuals 1.00 1.00 FY 2016 Actuals 1.00 1.00 1.00 1.00 3.00 3.00 FY 2017 Adopted Budget 1.00 1.00 FY 2018 Adopted Budget 1.00 1.00 1.00 1.00 3.00 3.00 FY 2018 Change FY 2018 Salary 148,990 130,666 72,878 352,534 0.48 0.48 0.48 0.48 35,935 3.48 3.48 3.48 3.48 — 388,469 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 331 OFFICE OF EMERGENCY SERVICES 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 3.48 970,969 94,623 876,346 Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments MEOC Expense Reallocation (from Police Department) ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Liability Insurance Allocated Charges Adjustments Print & Mail Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities 60,234 12,000 (1,378) 5,023 14,055 3,818 93,752 60,234 12,000 5,023 14,055 91,312 Total FY 2018 Base Budget 3.48 1,064,721 94,623 967,658 Budget Adjustments 1 Non -Salary Expense Reduction Total Budget Adjustments Total FY 2018 Adopted Budget (26,000) (26,000) 3.48 1,038,721 94,623 (26,000) (26,000) 941,658 332 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES 3udget Adjustments 1 Non -Salary Expense Adjustments Positions M 0.00 1 (26,000) Revenues Net General Fund (26,000) This action reduces the department non -salary expenses. In Fiscal Year 2018, it will result in a delay in enhancements to vehicle storage for the Mobile Emergency Operation Center (MEOC). Ongoing, the department may maintain fewer supplies on -hand to prevent, respond to, and recover from hazardous events, or may increase the cycle time of the purchase/replacement of such supplies. (Ongoing Savings: $26,000) Performance Results C This action may result in delays to the acquisition of supplies. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 333 CITY OF PALO ALTO OFFICE OF SUSTAINABILITY Mission Statement The Office of Sustainability leads the organization, residents, businesses and visitors in promoting a culture of environmental sustainability by developing, coordinating, and leading initiatives citywide, regionally, and through partnerships with the community. Purpose The purpose of the Office of Sustainability is to promote and facilitate an environmen- tally sustainable future in ways that improve quality of life, grow prosperity and build resilience, and provide leadership in the region and to other communities. OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 335 OFFICE OF SUSTAINABILITY CHIEF SUSTAINABILITY OFFICER Gil Friend FY 2018 POSITION TOTALS 1.00 - Full-time 0.96 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 336 OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF SUSTAINABILITY Description The City's Office of Sustainability (OOS), led by the Chief Sustainability Officer, focuses on the following areas: STRATEGIC PLANNING: Create, update, and organize City department plans that enhance sustainability. POLICY AND PROGRAM COORDINATION: Work with City Council and City staff to design and implement policies and programs that advance the City's sustainability goals. INTERGOVERNMENTAL RELATIONS: Collaborate with international, federal, state, county, special districts, and other non -govern- mental organizations to leverage resources and advance the City's sustainability efforts. Accomplishments ▪ Received City Council approval on Sustainability and Climate Action Plan (S/CAP) framework establishing a goal of 80% reduction in Green House Gas (GHG) emissions from 1990 levels by 2030. ▪ Developed Sustainability Implementation Plans (SIP) from 2017 to 2020 to achieve goals of the S/CAP. • Partnered with community members to implement a Cool City Challenge pilot program which brought together 43 households within 12 neighborhood blocks who worked together on 1,208 actions that eliminated 611,066 pounds of CO2 emissions, an average 7.1 tons of CO2 per household. ▪ Developed a Municipal Sustainability Finance Toolkit with the Urban Sustainability Directors Network which provides innovative financing mechanisms to allow cities to craft investment deals that provide ongoing funding for climate action activities. ▪ Developed a Sustainable Purchasing Toolkit with Urban Sustainability Directors Network to develop purchasing policies that enhance and strengthen a city's sustainable procurement efforts dealing to cost and environmental savings. ▪ Reestablished the Electric Vehicle (EV) Task Force and assisted with work on polices for EV charging stations including implementation of municipal fees for EV charging stations. ▪ Secured California Energy Commission grant by conducting two EV ride and drive events. ▪ Secured Bay Area Air Quality Management District grant to fund additional EV chargers at City garages and parking lots. ▪ Participated in regional efforts focused on Mobility as a Service (MaaS). ▪ Participated in national "shared used mobility" study and development of database of initiatives. OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 337 OFFICE OF SUSTAINABILITY • Supported development of the Green Building Ordinance and Energy Reach Code. • Managed City and community GHG emissions reporting to the Climate Registry and the Carbon Disclosure Project. Initiatives • Secure City Council's final approval of the S/CAP including detailed Fiscal Year 2017- Fiscal Year 2020 Sustainability Implementation Plan (SIP) and CEQA review. ▪ Implement 00S -specific SIP elements focused on mobility and climate finance. ▪ Continue to work on advancing various EV initiatives such as pricing and additional charging infrastructure. ▪ Further embed S/CAP goals and SIP actions into City department's work plans, program goals, objectives and operations. ▪ Advance City's sustainability efforts by working with the Office of Management and Budget to integrate sustainability policy goals through the Capital Improvement Project budget process. ▪ Partner closely with the Utilities Department in updating their strategic plan. ▪ Coordinate with the Administrative Services Department to develop internal carbon pricing strategies and protocols, and to improve effectiveness of City's Environmentally Preferred Purchasing program. ▪ Work with the Public Works Department to develop a zero emissions fleet strategy as well as a facilities master plan. • Partner with the Human Resources Department and the Transportation Division to develop commute alternative pilots for city staff and possibly for local businesses and residents. • Complete sustainability dashboard to drive stronger community engagement with easily obtained data. • Continue Cool Block program to add 15 additional neighborhood blocks. Goals and Objectives GOAL 1: Establish bold, coherent and grounded direction, goals and plans. Objectives: ▪ Complete and adopt Sustainability and Climate Action Plan (S/CAP). ▪ Work with City Departments to develop and implement specific S/CAP implementation strategies and plans. • Assess and refine policies to ensure alignment with City sustainability commitments. ▪ Deploy sustainability performance dashboard, and use to educate and engage internal and external stakeholders. 338 OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF SUSTAINABILITY GOAL 2: Integrate sustainability policies, programs and practices into City operations and community actions. Objectives: • Upgrade existing "environmentally preferable purchasing" (EPP) initiatives to "default to green" wherever feasible. • Assess and improve operations and processes. • Review and implement "total cost of operations" (TCO) and externality policies in CIP and operating budgets. • Explore development of internal carbon pricing in City management and operations. GOAL 3: Foster experimentation, alliances and big leaps Objectives: • Develop regional MaaS initiatives and pilot programs. ▪ Develop external funding resources for sustainability initiatives. ▪ Develop electrification/fuel switching strategies. OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 339 OFFICE OF SUSTAINABILITY 3udget Summary il Dollars by Division Sustainability Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 496,204 495,345 498,701 523,762 25,062 FY 2018 Change % 5.0% 496,204 495,345 498,701 523,762 25,062 5.0% Dollars by Category Salary & Benefits Healthcare 9,691 18,360 20,001 20,723 722 3.6% Other Benefits 4,473 7,789 5,488 8,084 2,596 47.3% Overtime 450 - - -% Pension 18,466 38,619 46,690 51,685 4,995 10.7% Retiree Medical 6,572 6,244 12,530 13,182 652 5.2% Salary 146,842 300,642 176,259 296,681 120,422 68.3% Workers' Compensation 2,257 5,921 3,664 162.3% Total Salary & Benefits 186,494 371,652 263,225 396,276 133,051 50.5% Allocated Charges 1,779 560 48,976 50,987 2,011 4.1% Contract Services 287,328 101,797 171,750 61,750 (110,000) (64.0)% General Expense 19,342 19,899 13,500 13,500 - -% Supplies & Material 1,260 1,436 1,250 1,250 - -% Total Dollars by Expense Category 496,204 495,345 498,701 523,762 25,062 5.0% Revenues Charges to Other Funds - 144,142 124,202 130,234 6,032 4.9% Other Revenue - 1,819 - - - -% Total Revenues 145,960 124,202 130,234 6,032 4.9% Positions by Division Sustainability 1.00 2.00 1.00 1.96 0.96 96.00% Total 1.00 2.00 1.00 1.96 0.96 96.00% 340 OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF SUSTAINABILITY Staffing Job Classification FY 2015 Actuals FY 2017 FY 2016 Adopted Actuals Budget FY 2018 Adopted Budget FY 2018 Change FTE FY 2018 Salary Chief Sustainability Officer Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 0.50 0.50 0.50 1.00 1.00 1.00 1.00 1.00 1.00 2.00 1.00 1.00 1.00 0.96 170,810 170,810 0.96 110,000 1.96 0.96 280,809 OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 341 OFFICE OF SUSTAINABILITY 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 1.00 498,701 124,201 374,500 One Time Prior Year Expenditures Deleted Sustainability Initiatives Contract Funding One Time Prior Year Expenditures Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocation Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Adjustments to Costs of Ongoing Activities II (110,000) - (110,000) 23,051 2,043 1,905 (1,136) (802) 25,061 - (110,000) — (110,000) 6,033 6,033 23,051 (6,033) 1,905 (1,136) (802) 17,787 Total FY 2018 Base Budget 1.00 413,762 130,234 282,287 Budget Adjustments 1 Office of Sustainability Staffing Resources Total Budget Adjustments 0.96 0.96 110,000 110,000 110,000 110,000 Total FY 2018 Adopted Budget 1.96 523,762 130,234 392,287 342 OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET OFFICE OF SUSTAINABILITY 1 Office of Sustainability Staffing Resources 3udget Adjustments Positions Expenditures 0 (110,000) 0.96 110,000 This action continues one-time funding for temporary staffing that was first added to the Office of Sustainability in FY 2015, continued in FY 2016, and converted to contract dollars in FY 2017. This action converts the contract dollars back into part-time staffing. This staffing will continue to assist the Office of Sustainability to implement initiatives such as the Sustainability/Climate Action Plan (S/CAP), departmental Sustainability Implementation Plans (SIP), performance measurement, mobility programs, and community engagement. (Ongoing net costs: $0) Performance Results © 0 0 This action will give the Office of Sustainability flexibility to most effectively implement sustainability programs and initiatives, including the Sustainability/Climate Action Plan. OFFICE OF SUSTAINABILITY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 343 CITY OF PALO ALTO PLANNING AND COMMUNITY Mission Statement Wit s:sxa ,tti,aass wa.vi1It Iii..241F. yra.a&ottatarma. Anklitcr The mission of the Planning and Community Environment Department is to provide the City Council and the community with creative guidance on, and effective implementation of land use development, planning, transportation, housing and environmental policies, and plans and programs that maintain and enhance the City as a safe, vital, and attractive community. Purpose The Planning and Community Environment Department is responsible for a range of planning and implementation actions aimed at preserving and enhancing the quality of life in Palo Alto, ensuring wise transportation investments, and facilitating land use and development decisions through consistent and transparent processes. PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 345 PLANNING AND COMMUNITY ENVIRONMENT DIRECTOR PLANNING & COMMUNITY ENVIRONMENT Hillary Gitelman OPERATIONS 1.00 Assistant Director CURRENT PLANNING 1.00 Chief Planning Official 1.00 Planning Manager 4.00 Senior Planner* 3.00 Planner* CODE ENFORCEMENT 1.00 Code Enforcement Lead* 2.00 Code Enforcement Officer LONG RANGE PLANNING 1.00 Planning Manager 3.00 Senior Planner 1.00 Planner 1.00 Business Analyst PLANNING/DEVELOPMENT SERVICES 1.00 Planning Manager* 1.00 Associate Planner* 3.00 Building/Planning Technician* * Portions of these positions are functionally part of the Development Services Department. The Planning and Community Environment Department retains administrative oversight over department personnel. TRANSPORTATION 1.00 Chief Transportation Official 1.00 Transportation Planning 1.00 Traffic Engineering Lead 1.00 Senior Transportation Planner 2.00 Project Engineer 1.00 Associate Engineer 1.50 Coodinator Transit Systems Management 1.00 Parking Operations Lead 1.00 Transportation Program Assistant II ADMINISTRATION 1.00 Senior Management Analyst 1.00 Management Analyst 2.00 Administrative Associate Ill 1.00 Administrative Associate II 1.00 Administrative Associate I 1.00 Administrative Assistant FY 2018 POSITION TOTALS 42.50 - Full-time 1.93 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 346 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PLANNING AND COMMUNITY ENVIRONMENT Description The Planning and Community Environment Department is responsible for the following functions: LONG RANGE PLANNING This division is responsible for updating and maintaining the City's Comprehensive Plan, includ- ing its Housing Element. The division also prepares zoning ordinance amendments, site -specific plans, and is responsible for data and analysis to support a wide variety of planning projects. TRANSPORTATION AND PARKING This division is responsible for transportation planning and for the City's transportation infra- structure. The division also conducts traffic studies and is responsible for traffic engineering, transportation demand management initiatives, shuttle services, parking supply and manage- ment, and implementation of the City's Bicycle and Pedestrian Plan. CURRENT PLANNING This division is responsible for the review of public and private projects pursuant to the Califor- nia Environmental Quality Act (CEQA), the City's Zoning Ordinance, and the Comprehensive Plan. Activities include the review of applications submitted for planning entitlements, review of applications for building permits submitted at the Development Center, and providing gen- eral information to the public regarding the City's zoning and Comprehensive Plan provisions. CODE ENFORCEMENT This division is responsible for enforcement of code requirements and conditions of approval. ADMINISTRATION This division provides personnel, contract, budget, and project support for the department and also supports the Planning and Transportation Commission, Architectural Review Board, His- toric Resources Board, Bicycle and Pedestrian Advisory Committee, Comprehensive Plan Citi- zens' Advisory Committee, and other public meetings. Accomplishments ▪ Substantial progress on the Comprehensive Plan Update, including Citizen Advisory Committee recommendations on five elements and circulation of a Supplement to the Draft Environmental Impact Report for public review and comments. • City Council approval of concept plans for four additional bike boulevards as well as pedestrian and bicycle improvements to Embarcadero Road and Quarry Road. • Receipt of transportation -related grant for pedestrian streetscape improvements on El Camino Real. ▪ Continuation of the Downtown Residential Preferential Parking Program (RPP) and initiation of new RPP districts in Evergreen Park/Mayfield and Southgate. PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 347 PLANNING AND COMMUNITY ENVIRONMENT • Completion of traffic signal upgrades citywide and updated signal timing on San Antonio, Middlefield, Embarcadero, Bryant, and other streets. ▪ Initiation of leaf blower enforcement, including outreach to residents, investigation of about 400 complaints, and issuance of about 250 notices and seven citations in 2016. ▪ Council adoption of an ordinance to enable additional Accessory Dwelling Units and 'Junior' Accessory Dwelling Units. • Council adoption of a permanent ordinance to protect ground floor retail spaces from converting to other uses. ▪ Staff -level approval of about 100 two-story single family homes (Individual Review projects), about 100 staff level (minor) Architectural Review projects, and about 50 sign applications, with no resulting appeals to City Council. ▪ Staff review of close to 1,800 building permit applications for compliance with the zoning ordinance and conditions of approval. ▪ City Council adoption of Professorville design guidelines and updated Architectural Review findings for use citywide. • Updated impact fee calculation and collection procedures to assure consistent application and collection. ▪ Updated impact fees for affordable housing. Initiatives ▪ Complete the Comprehensive Plan Update. ▪ Initiate priority zoning ordinance changes needed to implement key Comprehensive Plan policies. • Initiate planning for grade separations to improve connectivity and safety along the Caltrain corridor. ▪ Complete a study of paid parking downtown and develop a phasing and implementation plan. ▪ Implement a 'wayfinding' project with changeable messaging (a 'parking guidance system') to make parking easier to find downtown. • Support the work of the Transportation Management Association (TMA) and conduct the annual survey of commute patterns downtown. • Implement a pilot program to test traffic safety improvements on Middlefield Road north of University Avenue. • Implement four major bicycle boulevard projects and complete pedestrian and bicycle connections between the transit center and Stanford University Medical Center (SUMC). ▪ Continue improvements to the code enforcement program, tracking officer caseloads and response times and increasing the presence and awareness of code enforcement in the community. 348 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PLANNING AND COMMUNITY ENVIRONMENT ▪ Advance planning entitlements for multifamily housing projects totaling over 200 new dwelling units. Goals and Objectives GOAL 1 Increase the public's trust in the City's planning functions, reaffirming the role of the Compre- hensive Plan as the City's fundamental land use and transportation policy document, maintain- ing transparency and objectivity, and providing ample data and a reasonable basis for recommendations. Objectives: • Improve the review times for Individual Review (IR) applications, architectural review applications (AR), and building permit applications. • Improve the review times for Individual Review (IR) applications and building permit applications. GOAL 2 Deliver ongoing programs that improve people's lives, including code enforcement, housing, historic preservation, community block grant, and transportation and parking programs. Objectives: ▪ Continue the City's significant commitment to Safe Routes to School. • Manage the City's Community Development Block Grant (CDBG) and Below Market Rate (BMR) housing programs. • Respond to citizen complaints and effectively abate zoning and building code violations. GOAL 3 Design and implement programs that encourage transportation alternatives to single occu- pancy vehicle trips and improve traffic flow and parking availability. Objectives: • Implement residential parking programs downtown. ▪ Operate a shuttle system and support a Transportation Management Association dedicated to decreasing the use of single occupant vehicles. ▪ Respond to work order requests related to parking and traffic and oversee operation of the City's transportation infrastructure. PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 349 PLANNING AND COMMUNITY ENVIRONMENT Key Performance CODE ENFORCEMENT ti easures Deliver ongoing programs that improve people's lives, including code Goal enforcement, housing, historic preservation, community block grant, and transportation and parking programs. Respond to citizen complaints and effectively abate zoning and building code violations. Objective Percent of surveyed residents rating the quality of code enforcement as good or excellent Description Purpose Status FY 2015 Actuals 59.00% FY 2016 Actuals 52.00% FY 2017 Adopted 70.00% FY 2017 Estimated 60.00% FY 2018 Adopted 60.00% This measure tracks residents' opinions through data collected in the National Citizen Survey. This measure can be used to measure changes in satisfaction as service enhancements to the code enforcement function are implemented. The department received a Code Enforcement Lead position in the FY 2016 budget and filled the position in January, 2016. Following the direction of the City Council, the team increased its focus on gas leaf blower enforcement, including outreach to residents, investigating about 400 complaints, issuing about 250 notices and seven citations. In the January 2017 performance report, the City Auditor's Office noted that some responses to the citizen survey seemed contradictory. A correlation analysis was conducted comparing the survey question regarding the rating of code enforcement and the question asking about observed code violations. Many respondents rated the quality of code enforcement as fair to poor although they also said they had not observed any code violations. BUILDING PLAN CHECKS Increase the public's trust in the City's planning functions, reaffirming the role of the Comprehensive Plan as the City's fundamental land use and transportation policy document, maintaining transparency and objectivity, and providing ample data and a reasonable basis for recommendations. Goal Objective Improve the review times for building permit applications. Percent of Planning Review of building plan checks completed within 30 days of application intake Description Purpose Status FY 2015 Actuals 81.00% FY 2016 Actuals 88.00% FY 2017 Adopted 95.00% FY 2017 Estimated 90.00% FY 2018 Adopted 90.00% This measure tracks the percentage of building plan checks completed within an expected time frame. Staff level reviews of building plan checks ensure compliance with land use and development standards. Factors that affect results in this area include staff vacancy levels, applicant delays, and application volume. 350 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PLANNING AND COMMUNITY ENVIRONMENT TRANSPORTATION AND PARKING Design and implement programs that encourage transportation alternatives to single occupancy vehicle trips and improve traffic flow and parking availability. Implement a suite of short-term parking and Transportation Demand Management programs concurrent with neighborhood parking restrictions in downtown. Goal Objective Number of annual shuttle bus boardings Description This measure tracks the annual usage of the shuttle program. Purpose This measure is used to track changes in satisfaction with the shuttle program. Ridership is expected to decrease in FY 2017 because the East Palo Alto shuttle route was discontinued. The department is currently assessing opportunities to expand the shuttle system and monitoring a VTA planning process that could have dramatic impacts on local transit service. FY 2015 Actuals 152,571 FY 2016 Actuals 181,259 FY 2017 Adopted 153,000 FY 2017 Estimated 154 5nn FY 2018 Adopted Status Workload V ensures FY 2015 Actuals Number of planning and Architectural Review Board 174 applications completed Average number of days for Planning to first review building permit applications Average number of days from Individual Review (IR) application to 143 187 126 175 approval 21 FY 2016 Actuals 383 20 FY 2017 Adopted 135 20 FY 2017 Estimated 174 19 152,500 FY 2018 Adopted 175 20 125 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 351 PLANNING AND COMMUNITY ENVIRONMENT 3udget Summary Dollars by Division Administration Building Planning and Transportation Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 1,209,749 1,590,566 1,738,825 1,596,380 (142,445) (8.2)% 55,175 12,246 6,176,863 7,285,184 7,037,050 6,863,318 (173,732) (2.5)% 7,441,787 8,887,997 8,775,875 8,459,697 (316,177) (3.6)% -% Dollars by Category Salary & Benefits Healthcare 425,712 414,698 598,213 558,675 (39,538) (6.6)% Other Benefits 94,285 105,503 87,926 103,131 15,205 17.3% Overtime 44,233 59,226 60,753 60,754 - -% Pension 659,237 754,646 966,262 980,842 14,580 1.5% Retiree Medical 287,667 274,311 300,159 315,782 15,623 5.2% Salary 2,866,179 3,116,093 3,396,040 3,207,363 (188,678) (5.6)% Workers' Compensation 14,011 125,842 40,521 119,435 78,914 194.7% Total Salary & Benefits 4,391,324 4,850,319 5,449,874 5,345,981 (103,893) (1.9)% Allocated Charges 611,709 727,270 677,530 782,009 104,480 15.4% Contract Services 2,121,541 2,975,806 2,226,339 1,909,939 (316,400) (14.2)% Facilities & Equipment 14,316 29,677 39,350 36,850 (2,500) (6.4)% General Expense 260,923 260,802 336,925 358,718 21,793 6.5% Operating Transfers -Out 7,607 7,607 7,607 7,607 -% Rents&Leases 1,444 1,160 - - - -% Supplies & Material 32,923 35,356 38,250 18,593 (19,657) (51.4)% Total Dollars by Expense Category 7,441,787 8,887,997 8,775,875 8,459,697 (316,177) (3.6)% Revenues Charges for Services 549,617 766,583 1,023,225 1,286,225 263,000 25.7% Charges to Other Funds 6,694 38,603 - - - -% Operating Transfers -In 128,000 128,000 128,000 128,000 - -% Other Revenue 221,280 221,435 220,900 2,500 (218,400) (98.9)% Other Taxes and Fines (1,312) 360,300 15,390 20,390 5,000 32.5% Permits and Licenses 881,750 1,256,265 842,239 1,107,239 265,000 31.5% 352 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PLANNING AND COMMUNITY ENVIRONMENT 3udget Summary Rental Income Total Revenues Positions by Division Administration Building Planning and Transportation Total Staffing Job Classification FY 2015 Actuals 83 1,786,111 FY 2016 Actuals 72 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % -% 2,771,258 2,229,754 2,544,354 314,600 14.1% 2.30 5.20 6.91 6.95 0.04 0.58% 0.10 -% 26.53 26.72 25.53 24.70 (0.83) (3.25)% 28.93 31.92 32.44 31.65 (0.79) (2.44)% FY 2015 Actuals FY 2016 Actuals Administrative Assistant 1.00 1.00 Administrative Associate I 1.00 1.00 Administrative Associate II 1.00 1.00 Administrative Associate III 2.00 2.00 Assistant Director PCE 1.00 1.00 Associate Engineer 1.00 1.00 Associate Planner 0.10 0.10 Building/Planning Technician 0.20 0.20 Business Analyst 1.00 1.00 Chief Planning Official 0.80 0.80 Chief Transportation Official 0.50 0.50 Code Enforcement Officer 1.50 1.60 Code Enforcement -Lead 0.80 Coordinator Transportation Systems Management FY 2017 Adopted Budget FY 2018 Adopted Budget 1.00 1.00 1.00 1.00 FY 2018 Change FY 2018 Salary 64,938 70,126 3.00 3.00 245,068 1.00 1.00 197,267 1.00 0.73 (0.27) 83,040 0.10 0.10 10,599 0.70 0.70 - 60,174 1.00 1.00 149,739 1.00 1.00 148,200 0.70 0.43 (0.27) 75,666 1.60 1.60 - 164,475 0.80 0.80 - 87,998 0.90 0.85 0.60 0.88 0.28 95,344 Director Planning/Community 1.00 1.00 1.00 1.00 - 222,976 Environment Management Analyst 0.40 0.40 0.88 0.98 0.10 95,438 Manager Planning 1.20 2.00 2.00 2.00 252,491 Parking Operations -Lead 0.30 0.20 (0.20) Planner 3.15 3.00 3.83 3.83 - 433,972 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 353 PLANNING AND COMMUNITY ENVIRONMENT Staffing Job Classification FY 2015 Actuals FY 2017 FY 2016 Adopted Actuals Budget FY 2018 Adopted FY 2018 Budget Change FY 2018 Salary Program Assistant II Project Engineer Senior Management Analyst Senior Planner Senior Project Engineer Traffic Engineering -Lead Transportation Planning Manager Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 1.65 1.00 7.60 0.20 0.35 0.60 1.65 1.15 0.50 1.00 1.00 1.00 7.64 6.70 6.51 0.25 (0.65) (0.19) 49,868 68,944 133,141 852,217 1.00 0.10 0.38 0.28 48,683 0.20 0.85 0.20 (0.65) 27,028 28.20 31.04 31.56 30.24 (1.32) 3,637,395 0.73 0.88 0.88 1.41 0.53 133,800 28.93 31.92 32.44 31.65 (0.79) 3,771,194 354 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PLANNING AND COMMUNITY ENVIRONMENT 3udget Reconciliation 2,229,754 6,546,121 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Transportation Management Authority Scanning and Storage Funding Technology for new postions - (100,000) (25,000) (2,500) - (100,000) (25,000) (2,500) One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities - (127,500) — (127,500) Salary and Benefits Adjustment — 148,224 148,224 Revenue Alignment, Fee Study phase II (CMR 433,000 (433,000) #6331) TMA Funding Adjustment, 3rd year (CMR #4766) (130,000) (130,000) Revenue Adjustment, East Palo Alto Shuttle — — (57,000) 57,000 ARC Document Solutions (Print & Mail Allocated — (19,657) — (19,657) Charges Realignment) Termination of East Palo Alto Shuttle Funding (161,400) (161,400) Agreement (CMR #7170) Information Technology Allocated Charges Adjustment — (15,196) — (15,196) Information Technology Department Allocation (FY 2016 Salary Savings; one-time) (19,178) (19,178) Liability Insurance Allocated Charges Adjustment — 99,841 — Print & Mail Allocated Charges Adjustment — 34,862 — Utilities Allocated Charges Adjustment 2,500 Vehicle Replacement & Maintenance Allocated Charges Adjustment 1,650 99,841 34,862 2,500 1,650 Adjustments to Costs of Ongoing Activities (58,354) 214,600 (272,954) Total FY 2018 Base Budget 32.44 8,590,021 2,444,354 6,145,667 Budget Adjustments 1 San Mateo County Transit District Grant 2 On -Call Contractual Services 3 Staffing Alignment 22,613 100,000 100,000 (0.79) (252,937) 22,613 (252,937) Total Budget Adjustments Total FY 2018 Adopted Budget (0.79) (130,324) 31.65 8,459,697 100,000 2,544,354 (230,324) 5,915,343 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 355 PLANNING AND COMMUNITY ENVIRONMENT 3udget Adjustments 1 San Mateo County Transit District Grant mdi 0.00 This action increases expenses necessary to meet the City portion of the local match requirements as defined in the funding agreement with San Mateo County Transit District and the City of Palo Alto for the Grand Boulevard Initiative: Creating Safe and Healthy Corridor Communities Project. The agreement funds a three year planning study for multi - modal improvements along El Camino Real. As part of this agreement, the Planning department will be involved in the public engagement process and guide the development of conceptual designs. (Ongoing Costs: $0) Performance Results © 0 This will prepare the City to apply for a One Bay Area Grant to cover the costs of future construction. 2 On -Call Contractual Services This net -zero action increases revenues and expenses for applicant -funded on -call contractual services. Following direction from the City Council to increase cost recovery for expenses related to the processing of development applications, the Planning and Community Environment Department collects the cost of on -call consultants from the applicant for project -specific contracts. This budget action more accurately aligns projected revenues and expenses, providing necessary expert resources for expected activity levels. (Ongoing net costs: $0) Performance Results © 0 The incorporation of revenues and expenses for on -call consultant contracts into the budget will increase transparency regarding the volume of work performed. Use of consultants to augment staff allows for responsive services and allows the City to effectively respond to fluctuating demand in applications. 3 Staffing Alignment -0.79 (252,937) 0 (252,937) This action realigns the funding of various positions resulting in a net reduction of 0.79 budgeted positions in the General Fund, reducing the impact to the General Fund. No overall staffing reduction is recommended for the department. However, this action more accurately aligns staff to their FY 2018 work assignments and projects. The largest reallocation reflects the increased focus on capital projects in the General Capital Improvement Fund in order to address significant transportation projects in the pipeline. The staffing realignment also includes the reduction of 0.26 positions in the Community Development Block Grant Fund, 0.24 positions in the University Avenue Parking Permit Fund, and 0.42 positions in the Residential Preferential Parking Fund. These reductions are offset by increases of 0.30 positions in Commercial and Residential Housing In -Lieu Funds, 0.06 positions to the California Avenue Parking Permit Fund, and 1.35 in the General Capital Improvement Fund. (Ongoing Savings: $252,937) Performance Results 0 The adjustment of staff alignment ensures that costs are accurately tracked. 356 PLANNING AND COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET tive animal control services; and to POLICE Mission Statement To proudly serve and protect the public with respect and integrity. Purpose The purpose of the Police Department is to apprehend and prosecute offenders and resolve investigations in a timely and thor- ough manner; to provide professional pub- lic safety services through comprehensive hiring, training, and development of employees and volunteers; to minimize injury and property damage by promoting a safe and orderly flow of pedestrian, bicy- cle, and vehicular traffic; to ensure the pro- tection and well-being of animals and people by providing responsive and proac- manage, enforce, and resolve vehicle park- ing regulations and issues in an effort to facilitate the timely movement of vehicles and provide for public safety within the City. POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 357 POLICE CHIEF Ron Watson, Iterim 1.00 Assistant Chief of Police POLICE PERSONNEL SERVICES 1.00 Police Lieutenant 1.00 Police Agent/Officer 1.00 Administrative Associate II 1.00 Program Assistant II ADMINISTRATION 1.00 Communications Manager 1.00 Senior Management Analyst 1.00 Administrative Assistant TECHNICAL SERVICES 1.00 Deputy Director, Technical Services 1.00 Court Liaison 2.00 Business Analyst 1.00 Crime Analyst 1.00 Code Enforcement Officer 1.00 Communications Technician 0.50 GIS Specialist DISPATCHING SERVICES 1.00 Public Safety Communications Manager 4.00 Public Safety Dispatcher - Lead 16.00 Public Safety Dispatcher 1.00 1.00 6.00 INFORMATION MANAGEMENT Public Safety Program Manager Police Records Specialist - Lead Police Records Specialist FIELD SERVICES 1.00 Police Captain 1.00 Police Agent/Officer 1.00 Administrative Associate II FIELD SERVICES (PATROL) 3.00 Police Lieutenant 10.00 Police Sergeant 50.00Police Agent/ Officer TRAFFIC, PARKING, & SPECIAL EVENT SERVICES 1.00 Police Lieutenant 2.00 Police Sergeant 6.00 Police Agent/Officer 1.00 Public Safety Program Manager 800 Community Service Officer INVESTIGATIVE SERVICES 1.00 Police Captain 1.00 Administrative Associate II 2.00 Police Sergeant 11.00 Police Agent/ Officer 2.00 Property/Evidence Technician ANIMAL SERVICES 1.00 Superintendent, Animal Services 1.00 Veterinarian 1.00 Animal Control Officer -Lead 3.00 Animal Control Officer 2.00 Animal Service Specialist II 2.00 Vetrinarian Technician FY 2018 POSITION TOTALS 156.50 - Full-time 3.38 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 358 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE Description The Police Department provides a wide range of public safety services for the City of Palo Alto through the following divisions: FIELD SERVICES Responsible for police response, critical incident resolution, regional assistance response, and police services for special events. TECHNICAL SERVICES Provides 911 dispatch services for police, fire, utilities, public works, Stanford, and police infor- mation technology management. INVESTIGATIONS Conducts police investigations, oversees storage and maintenance of evidence, and coordinates some youth services activities. TRAFFIC SERVICES Responsible for traffic enforcement, complaint resolution, and school safety. PARKING SERVICES Responsible for parking enforcement, parking citations and adjudication, and abandoned vehi- cle abatement. POLICE PERSONNEL SERVICES Oversees police hiring, retention, personnel records, and training. ANIMAL SERVICES Provides animal control, pet recovery/adoption services, animal care, animal health and welfare, and regional animal services. Accomplishments • Re -implemented the Basic Citizens Police Academy and graduated 50 citizens from the 8 - week course as of February, 2017. ▪ Continued to grow the number of followers on Department social media platforms, so that more residents could receive accurate and timely public safety information. • Received 88%'excellent/good` services rating from the National Citizen Survey, and the Citizen Centric Report. ▪ Continued to participate in several regional initiatives which promote emergency preparedness and response capabilities, including the Silicon Valley Regional Interoperability Authority. POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 359 POLICE • Completed a pilot project to test a limited number of body -worn cameras in the Patrol division. ▪ Replaced 911 system in partnership with Mountain View and Los Altos. ▪ Continued the development of the joint Records Management System (RMS) system in partnership with Mountain View and Los Altos. • Enhanced first responder training by implementing the following: Countywide active shooter protocol; trained officers and deployed AEDs in all patrol vehicles; enhanced critical incident training with a focus on de-escalation options; and provided updated Fair and Impartial Policing training to all officers. • Transitioned key leadership and staff after the retirement of the Police Chief and Assistant Police Chief, ensuring stability in the department and services to the City. Initiatives • Complete an executive recruitment for a new Police Chief. • Continue to enhance first responder training in -line with the Police Executive Research Forum's Integrating Communications, Assessment and Tactics (ICAT) nationwide training curriculum with a focus on deescalation options during critical incidents. ▪ Continue to host three sessions of Basic Citizens Police Academy classes per year, and implement new Advanced Citizens Police Academy courses. ▪ Continue to provide accurate and timely public safety information to the community using a variety of sources, to include traditional news releases, social media posts, and via our free mobile app. • Build -out Tri-City (Mountain View, Los Altos, Palo Alto) Fiber Ring to support shared public safety applications. • Continue progress on the new Public Safety building. ▪ Migrate to the new 700 MHz regional radio system as part of the county -wide effort led by the Silicon Valley Regional Interoperability Authority. ▪ Complete and implement new regional Records Management System. • Implement body -worn camera program, outfitting approximately 50 officers in the Patrol Division. Goals and Objectives GOAL 1 Protect and serve the public through proactive and effective policing, animal services, and emergency preparedness. Objectives: • Reduce crime rates, traffic violations and accidents. . Respond promptly to urgent calls for service. 360 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE ▪ Apprehend and assist with prosecution of offenders. ▪ Provide assistance, enforcement, and guidance to the community regarding animal services. • Provide assistance to the community in the event of a disaster. • Enhance technology applications in alignment with national initiatives such as text to 911. GOAL 2 Cultivate, enhance, and foster trustworthy relationships with the community. Objectives: ▪ Actively engage the community 24/7/365 through and social media and outreach programs. • Increase quality and timeliness of response to citizens' complaints regarding use of force, canine investigations, and other internal affairs matters. • Train and educate all employees in the community policing philosophies. ▪ Continue to consult with national experts in the field of promoting fair and equitable policing. • Create opportunities for increased communication, visibility, and interaction with community members. ▪ Enhance video capabilities by implementing a body -worn camera program for Patrol officers in the field. • Maintain and enhance the community's satisfaction with police services. GOAL 3 Minimize injury and property damage by promoting a safe and orderly flow of pedestrian, bicy- cle, and vehicular traffic. Objectives: • Enforce traffic laws, with an emphasis on speed reduction, red light violations, and bicycle and pedestrian safety around schools. ▪ Participate in regional and statewide initiatives designed to ensure vehicle occupant safety through the use of safety belts and to reduce deaths and injuries in crashes involving alcohol, speed, red light running, and aggressive driving. GOAL 4 Ensure the protection and well-being of animals and people by providing responsive animal ser- vices and spay/neuter advocacy. Objectives: • Provide animal control assistance, enforcement, and guidance to the community regarding animals. • Promote responsible pet ownership through adoption counseling, education, and support services. POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 361 POLICE GOAL 5 Manage, enforce, and resolve vehicle parking regulations and issues in an effort to facilitate the timely movement of vehicles and provide for public safety within the City. Objectives: ▪ Monitor compliance with parking regulations and time limits and issue citations for infractions. ▪ Efficiency process abandoned and stored vehicle complaints. Key Performance V ensures ANIMAL SERVICES RESPONSE TIMES Protect and serve the public through proactive and effective policing, animal services, and emergency preparedness. Objective Respond promptly to animal calls for service. Goal FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 FY 2018 Adopted Estimated Adopted Percent of Palo Alto live animal calls responded to within 45 minutes Description Purpose Status 88.00% 89.00% 90.00% 90.00% 90.00% A 45 minute response time to live animal calls is the threshold of service set by the Animal Services Division. Live animal calls require the most timely response because they are generally life threatening or represent higher danger crimes in progress. The Division has improved year over year response times from 88% to 89%, and upon hiring the vacant lead animal control position, anticipates to meet or exceed a 90% target in Fiscal Years 2017 and 2018. 362 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE PERCENT OF SURVEYED RESIDENTS RATING POLICE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Cultivate, enhance and foster trustworthy relationships with the community. Objective Maintain and enhance the community's satisfaction with police services. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Animal Control Services 80.00% 77.00% 80.00% 77.00% 77.00% Crime Prevention Services 79.00% 80.00% 80.00% 80.00% 80.00% Traffic Enforcement Services 60.00% 60.00% 66.00% 60.00% 60.00% Overall Police Services 88.00% 88.00% 90.00% 88.00% 90.00% Description Purpose Status These measures track the percent of residents rating overall and division specific police services to the community as good or excellent. This data is collected as part of the National Citizen's Survey that is conducted annually by the International City/County Management Association (ICMA) and allows the City to compare itself to other municipalities. Community satisfaction with the Police Department is an important assessment of the quality of services provided to the City and its residents. Crime Prevention surveys met targeted goals in FY 2016 of 80%, and although falling slightly short of targets, the overall Police Services year -over -year ratings have remained constant at 88%. Both measures are anticipated to remain constant in FY 2018 with unchanged targets at 80% and 90%, respectively. The decline in survey ratings for Animal Control from 80% to 77% can be attributed to staff vacancies being held as the City evaluates the service delivery model of animal care services. Traffic Enforcement Services ratings have maintained constant year -over -year ratings at 60%, though targets for this measure have been revised downward, from 66% to 60%. This downward revision reflects the anticipated implications of current staffing levels of the traffic and downtown special teams which are currently all vacant; the Department is actively recruiting for these positions. POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 363 POLICE POLICE DEPARTMENT RESPONSE TIMES Goal Objective Percent of urgent calls responded to within 10 minutes Percent of emergency calls responded to within 6 minutes Description Purpose Status Workload V Respond promptly to urgent calls for service. Protect and serve the public through proactive and effective policing, animal services, and emergency preparedness. FY 2015 Actuals 74.00% FY 2016 Actuals 74.00% FY 2017 Adopted 90.00% FY 2017 Estimated 65.00% FY 2018 Adopted 90.00% 75.00% 63.00% 90.00% 55.00% 90.00% Percent of emergency calls responded to within 6 minutes and percent of urgent calls responded to within 10 minutes Emergency and urgent calls require the most timely police response because they are generally life threatening or represent higher danger crimes in progress. The decline in response times are attributed to three primary factors: increased traffic congestion; call types realigned between what is defined as "emergency" versus "urgent" after the tri-city consolidation of the computer aided dispatch system during FY 2016; and although the department has maintained its average of 8 officers on patrol, department wide vacancies have reduced supplemental on street staffing typically provided by specialty teams such as the traffic and downtown teams. ensures Number of police calls for service Number of Part I crimes Number of Part II crimes Average response time for emergency calls (Goal: within 6 minutes) Average response time for urgent calls (Goal: within 8 minutes) Total number of Palo Alto animal service calls Number of regional animal services calls (Los Altos and Los Altos Hills) FY 2015 Actuals 59,795 1,595 3,050 5:40 FY 2016 Actuals 53,870 1,613 2,889 5:47 8:30 8:38 2,579 2,421 FY 2017 Adopted 59,000 1,600 2,750 5:30 FY 2017 Estimated 54,456 1,700 2,505 6:30 FY 2018 Adopted 55,000 1,600 2,650 6:00 8:00 10:30 8:00 2,750 566 560 700 2,400 2,400 400 450 364 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE 3udget Summary il Dollars by Division Administration Animal Services Field Services Investigations and Crime Prevention Services FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FY 2018 Change % 678,034 1,194,121 527,862 1,038,302 510,440 96.7% 1,559, 074 1,575,147 1,719,360 1,894,420 175,060 10.2% 15,616,047 15,696,641 16,864,818 21,705,557 4,840,739 28.7% 4,186,251 4,737,600 5,214,939 4,644,272 (570,667) (10.9)% Parking Services 1,192,659 1,241,728 1,418,946 1,496,299 77,352 5.5% Police Personnel Selection 1,514,692 1,398,558 1,371,056 1,343,204 (27,852) (2.0)% Technical Services 7,392,315 7,269,274 8,478,991 8,799,332 320,342 3.8% Traffic Services 2,420,441 2,552,209 2,541,463 1,411,594 (1,129,869) (44.5)% Total 34,559,513 35,665,276 38,137,435 42,332,980 4,195,545 11.0% Dollars by Category Salary & Benefits Healthcare 2,775,602 2,734,632 3,068,340 3,224,954 156,614 5.1% Other Benefits 721,396 1,031,944 598,257 694,156 95,899 16.0% Overtime 1,893,220 2,019,330 1,500,000 1,700,000 200,000 13.3% Pension 5,349,308 5,516,331 6,445,707 7,304,834 859,127 13.3% Retiree Medical 2,629,988 2,352,490 2,666,651 2,805,449 138,798 5.2% Salary 15,500,707 15,715,984 17,342,746 18,396,666 1,053,920 6.1% Workers' Compensation 1,045,478 949,783 407,425 1,167,029 759,604 186.4% Total Salary & Benefits 29,915,700 30,320,494 32,029,126 35,293,089 3,263,962 10.2% Allocated Charges 2,684,022 2,969,885 3,037,440 3,231,792 194,352 6.4% Contract Services 1,035,064 1,388,563 1,990,528 2,747,528 757,000 38.0% Facilities & Equipment 33,429 21,460 69,500 69,500 -% General Expense 361,649 417,774 415,405 452,205 36,800 8.9% Operating Transfers -Out 60 - - - - -% Rents & Leases 3,143 3,282 3,436 3,436 - -% Supplies & Material 526,448 543,819 592,000 535,431 (56,569) (9.6)% Total Dollars by Expense Category 34,559,513 35,665,276 38,137,435 42,332,980 4,195,545 11.0% POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 365 POLICE 3udget Summary a_ 1 Revenues Charges for Services Charges to Other Funds From Other Agencies Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses Rental Income Total Revenues Positions by Division Administration Animal Services Field Services Investigations and Crime Prevention Services Parking Services Police Personnel Selection Technical Services Traffic Services Total Staffing Job Classification Administrative Assistant Administrative Associate II Animal Control Officer Animal Control Officer -Lead Animal Services Specialist II Assistant Police Chief FY 2015 Actuals 1,295,895 427,000 260,037 42,000 448,810 1,732,358 278,662 705 4,485,466 2.30 10.66 66.80 15.28 8.75 5.20 37.13 11.49 157.61 FY 2015 Actuals 0.50 3.00 3.00 1.00 2.00 1.00 FY 2016 Actuals 1,133, 298 427,000 291,554 42,000 338,269 1,701,347 211,441 FY 2017 Adopted Budget 1,184,632 427,000 260,548 273,016 1,846,255 195,302 400 1,067 4,145,310 4,187,819 3.30 10.66 68.80 14.28 8.75 4.10 37.00 11.49 158.38 FY 2016 Actuals 1.00 3.00 3.00 1.00 2.00 1.00 3.30 10.66 61.80 21.28 8.75 5.10 37.00 10.49 158.38 FY 2017 Adopted Budget 1.00 3.00 3.00 1.00 2.00 1.00 FY 2018 Adopted Budget FY 2018 Change 1,287,121 102,489 481,000 54,000 290,548 30,000 273,016 1,881,255 195,302 1,067 4,409,309 221,490 5.30 10.56 73.55 16.38 7.75 4.10 37.00 3.74 158.38 FY 2018 Adopted Budget 1.00 3.00 3.00 1.00 2.00 1.00 35,000 2.00 (0.10) 11.75 (4.90) FY 2018 Change % 8.7% 12.6% 11.5% - % - % 1.9% -% -% 5.3% 60.61% (0.94)% 19.01% (23.03)% (1.00) (11.43)% (1.00) (19.61)% -% (6.75) (64.35)% -% FY 2018 Change FY 2018 Salary 88,525 228,629 216,435 77,188 156,899 204,589 366 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE Staffing Job Classification Business Analyst Code Enforcement Officer Communications Manager Communications Technician Community Service Officer Court Liaison Officer Crime Analyst Deputy Director Technical Services Division Geographic Information System Specialist Police Agent Police Captain Police Chief Police Lieutenant Police Officer Police Records Specialist II Police Records Specialist -Lead Police Sergeant Program Assistant II Property Evidence Technician Public Safety Communications Manager Public Safety Dispatcher FY 2015 Actuals 1.20 1.00 1.00 8.50 1.00 1.00 0.80 0.50 FY 2016 Actuals 1.20 1.00 1.00 8.50 1.00 1.00 0.80 0.50 FY 2017 Adopted Budget 1.20 1.00 1.00 8.50 1.00 1.00 0.80 0.50 FY 2018 Adopted Budget 1.20 1.00 1.00 1.00 7.50 1.00 1.00 0.80 0.50 FY 2018 Change FY 2018 Salary 179,687 - 102,797 1.00 114,400 - 104,439 (1.00) 588,776 102,206 102,206 151,973 62,852 19.00 19.00 19.00 19.00 - 2,739,663 2.00 2.00 2.00 2.00 - 409,178 0.50 1.00 1.00 1.00 - 237,349 5.00 5.00 5.00 5.00 918,611 50.00 50.00 50.00 50.00 6,421,526 6.00 6.00 6.00 6.00 - 455,827 1.00 1.00 1.00 1.00 81,289 14.00 14.00 14.00 14.00 - 2,266,092 1.00 1.00 1.00 1.00 83,114 2.00 2.00 2.00 2.00 157,159 1.00 Public Safety Dispatcher - Lead 4.00 2.00 2.00 Public Safety Dispatcher II 14.00 14.00 4.00 4.00 4.00 495,440 Public Safety Manager I 2.00 - - - - - Public Safety Manager II 1.00 - - - - - Public Safety Program Manager 2.00 2.00 2.00 - 242,174 Senior Management Analyst 1.00 1.00 1.00 1.00 138,528 Superintendent Animal Services 1.00 1.00 1.00 1.00 109,491 1.00 1.00 1.00 1.00 125,050 Public Safety Dispatcher I Public Safety Dispatcher -Lead 1.00 1.00 128,170 16.00 16.00 - 1,744,133 Veterinarian POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 367 POLICE Staffing Veterinarian Technician Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FY 2018 Salary Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 2.00 2.00 2.00 154.00 155.00 155.00 155.00 3.61 3.38 3.38 3.38 2.00 147,397 — 19,381,792 236,772 157.61 158.38 158.38 158.38 — 19, 618, 564 368 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE Budget Reconciliation Positions Expenditures Revenues Net General Fund J 158.38 38,137,435 4,187,819 33,949,616 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Project Safety Net - Track Watch Program Police Vehicle Modems Police Community Services Staffing One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities (574,000) (88,000) 101,488 - (574,000) (88,000) 101,488 - (560,512) — (560,512) Salary and Benefits Adjustments — 2,961,341 2,961,341 Overtime Adjustment (align with Palo Alto Police Officer's Association contract, ratified April 200,000 200,000 2016) Vacancy Realignment — (80,000) — (80,000) Project Safety Net - Track Watch Program — 1,450,000 1,450,000 Crossing Guards (CMR #5658, minimum wage 52,000 52,000 compliance) Parking Citation Processing (CMR #7179) — 35,000 35,000 — POST training reimbursment 30,000 30,000 — Uniform Cleaning 13,000 — 13,000 Media Subscriptions 6,000 6,000 ARC Document Solutions (Print & Mail Allocated (6,569) (6,569) Charges Realignment) MEOC Expense Reallocation (to Office of — (12,000) — (12,000) Emergency Services) Stanford Emergency Communication Services Revenue Adjustment 102,490 (102,490) Communication Allocated Charge Adjustment — — 54,000 (54,000) General Liability Insurance Allocated Charges 259,521 259,521 Adjustment Information Technology Allocated Charges — (60,199) — (60,199) Adjustment Information Technology Department Allocation (FY (60,890) (60,890) 2016 Salary Savings; one-time) Printing and Mailing Allocated Charges Adjustment 20,961 20,961 Utilities Allocated Charges Adjustment — 3,966 — 3,966 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 369 POLICE 3udget Reconciliation Positions Net Expenditures Revenues General Fund Vehicle Equipment Maintenance Allocated Charges Adjustment Vehicle Replacement Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (19,007) 50,000 4,843,124 221,490 (19,007) 50,000 4,621,634 Total FY 2018 Base Budget 158.38 42,420,047 4,409,309 38,010,738 Budget Adjustments 1 Project Safety Net - Track Watch Program Transition 2 Project Safety Net - Video Management System Maintenance 3 Parking Enforcement Community Services Officer (CSO) 4 Communications Manager - Public Information 5 Non -Salary Reduction 6 Less Lethal Ammunition 7 Tactical Medical Supplies Total Budget Adjustments (1.00) 1.00 (460,000) 300,000 (109,819) 191,952 (34,200) 15,000 10,000 (87,067) (460,000) 300,000 (109,819) 191,952 (34,200) 15,000 10,000 (87,067) Total FY 2018 Adopted Budget 158.38 42,332,980 4,409,309 37,923,671 370 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET POLICE 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Project Safety Net - Track Watch Program Transition 0.00 (460,000) 0 (460,000) This action reduces funding for contract track guards related to the Project Safety Net Community Collaborative (PSN), commonly referred to as the Track Watch Program, initiated to respond to teen fatalities that have occurred along the CalTrain corridor in Palo Alto. In Fiscal Year 2017, the contract for guard services was amended to increase the annual expenditure to $1.7 million and extend the term through June 30, 2017 (CMR #7333). Additional funding resulted in increased guard service levels to provide 24 hour security coverage, seven days a week, at five CalTrain crossing locations: California, Palo Alto, Churchill, Meadow, and Charleston. As part of this ongoing initiative, the City has been working on several means restrictions that will limit access to tracks, enhance and heighten fencing, and improve visibility along the rail line. Based on analysis of the Fiscal Year 2017 guard services program, staff has identified potential staffing modifications to the 24 -hour, seven day a week guard service coverage, resulting in a savings of $450,000. These modifications align with anticipated implementation of a video management system in FY 2018. The implementation of the video management system is intended to replace current guard services while allowing for continuous monitoring of persons and objects down the corridor, along the right of way and at intersections. The City will actively evaluate the efficacy of the video management system on an on -going basis to evaluate and adjust guard staffing needs as necessary. (Ongoing Savings: $1,700,000) Performance Results © © 0 Continuing the Track Watch Program and implementing the video management system will adjust the current level of track guard monitoring services along the Palo Alto Caltrain corridor through the end of FY 2018. 2 Project Safety Net - Video Management System Maintenance it 0.00 This action increases funding necessary to support ongoing operating and maintenance costs of the Caltrain Video Management System and aligns with the Project Safety Net proposal to transition guard services to camera -based technologies. The implementation of the video management system will be completed through RFP #166714 and is anticipated to go live in FY 2018. (Ongoing Costs: $600,000) Performance Results © 0 This action ensures regular system maintenance, including fiber and electricity, and supports administrative and monitoring services. 3 Parking Enforcement Community Services Officer (CSO) _ 1.00 (109,819) 0 (109,819) This action removes 1.0 FTE Community Services Officer (CSO) which has been vacant since February 2015 and has been held vacant due to the construction of the Stanford Hospital which severely decreased the need for parking enforcement in and around Stanford Hospitals. Stanford Hospitals intend to install License Plate Reader systems in all its garages in order to automate enforcement, eliminating the need for this position. Therefore, the department anticipates that current coverage with existing staffing resources will be sufficient to maintain parking enforcement needs once all Stanford hospital development is complete. (Ongoing Savings: $109,819) Performance Results This action aligns staffing levels to compliment parking enforcement activity levels. 4 Communications Manager - Public Information 191,952 0 191,952 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 371 POLICE 3udget Adjustments udget AdjustmenL Net Expenditures I Revenues , General Fund This action adds 1.0 FTE Communications Manager Officer to serve as the department Public Information Officer. This program was managed by a Police Lieutenant who has been promoted to Captain, and can no longer fill the responsibilities of the role. Therefore, this position is necessary to maintain the Police Department's comprehensive social media presence with almost 40,000 followers on social media across six platforms, and management of all aspects of community engagement and media relations. In the spirit of open government and building trust with the community, the Palo Alto Police Department social media and community outreach program has been recognized nationally as a model for law enforcement agencies. Given the sensitivities around law enforcement and community and media engagement, police communications require the individual to have intimate knowledge of law enforcement operations and be available 24/7/365. (Ongoing Costs: $191,952) Performance Results © 0 0 0 This action aligns with current national best practices and trends for law enforcement community outreach and engagement as well as local, state, and federal open government and transparency. 5 Non -Salary Reduction 0.00 - (34,200) 0 (34,200) This action reduces the department non -salary expenses. This reduction is a result of a more cost effective and efficient operation of fingerprint reviews and checks, as well as fewer crimes requiring lab submissions. (Ongoing Savings: $34,200) Performance Results This action aligns resources with current activity levels. 6 Less Lethal Ammunition This action increases funding for ammunition necessary to train and qualify officers for use of less lethal SAGE launchers. As part of an increased emphasis on de-escalation techniques and enable additional alternatives to traditional firearms, the department has increased the availability of SAGE launchers from one per shift to one per car so that this tool can be rapidly deployed in dangerous situations. (Ongoing Costs: $15,000) Performance Results © 0 This action aligns with current, nationwide de-escalation trends, less lethal launchers provide alternative methods to lethal force during critical incidents. 7 Tactical Medical Supplies in 0.00 IL 10,000 MI 0 10,000 This action increases funding to purchase tactical medical supplies necessary to comply with County protocols and effectively respond in mass casualty instances. (Ongoing Costs: $10,000) Performance Results © 0 0 This action aligns with current, nationwide emergency preparedness and response trends, tactical medical supplies provide critical, life-saving measures in a more timely manner during critical incidents. 372 POLICE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Mission Statement To preserve and enhance the quality of life for Palo Alto residents and visitors by providing efficient, safe, and cost effective services in partnership with our citizens while maintaining City assets, and being environmental stewards of the community. Purpose The purpose of the Public Works Depart- ment is to ensure the City's valuable infra- structure is well -maintained and available well into the future; promote the protec- tion and enhancement of Palo Alto's Urban Forest; enhance the quality of life for resi- dents and visitors to Palo Alto by prevent- ing pollution of the creeks and bay, promoting reuse and recycling, and encouraging use of alternative fuel vehi- cles; ensure continuous operation of the Regional Water Quality Control Plant; pro- vide efficient and cost effective garbage, recyclables and yard trimmings collection, processing, and disposal; deliver timely support to City departments in the area of engineering services; operate a safe and financially sustainable general aviation airport; and effectively manage the City's Capital Improvement Fund, including the Council Infrastructure Plan, as well as refuse, wastewater treatment, storm drainage, airport and fleet operations. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 373 PUBLIC WORKS PUBLIC WORKS DIRECTOR Mike Sartor 1.00 -Administrative Assistant 1 00 -Senior Management Analyst PUBLIC SERVICES 1.00 Assistant Director, Public Services 1.00 Management Analyst 1.00 Administrative Associate III 3.00 Administrative Associate II 0.50 Administrative Associate I FACILITIES MAINTENANCE 1.00 Facilities Manager 1.00 Facilities Maintenance Operations 2.00 Facilities Maintenance -Lead 6.00 Facilities Technician 2,00 Facilities Painter 1.00 Project Manager 1,00 Facilities Carpenter 1.00 Electrician 1.00 Coordinator Public Works Projects 1.00 Building Service Person -Lead 1.00 Building Service Person 1.00 Engineering Technician II I FLEET 1.00 Fleet Manager 1.00 Assistant Fleet Manager 1.00 Project Manager 2.00 Fleet Services Coordinator 2.00 Motor Equipment Mechanic -Lead 2.00 Equipment Maintenance Service Person 6.00 Motor Equipment Mechanic II URBAN FORESTRY 1.00 Manager Urban Forester 1.00 Planning Arborist* 2.00 Project Manager** 2.00 Tree Maintenance Special** 1,00 Tree Trim/Line Clear -Lead 7.00 Tree Trim/Line Clear TRAFFIC CONTROL / STREET SWEEPING 1.00 Manager, Maintenance Operations 1.00 Project Manager 2.00 Street Sweeper Operator 2.00 Street Maintenance Assistant 1.00 Coordinator, Public Works Projects 2.00 Traffic Control Maintenance II 2.00 Traffic Control Maintenance I STORM DRAIN / STREET MAINTENANCE 1.00 Manager, Maintenance Operations 2.00 Heavy Equipment Operator -Lead 3.00 Heavy Equipment Operator 4.00 Equipment Operator 1.00 Cement Finisher -Lead 3.00 Cement Finisher ENVIRONMENTAL SERVICES 1.00 Assistant Director, Environmental Service 1.00 Management Analyst WATER QUALITY CONTROL PLANT 1.00 Water Quality Control Plant Manager 2.00 Administrative Associate II 2.00 Assistant Manager WOC 2.00 Senior Engineer 3.00 Supervisor WQC Operations 6.00 Senior Operator, WQC 16.00 Plant Operator II 1.00 Manager Laboratory Services 1.00 Senior Chemist 3.00 Chemist 3.00 Lab Technician 2.00 Electrician Lead 3.00 Electrician 1.00 Senior Mechanic 7.00 Plant Mechanic 1.00 Senior Technologist 1.00 Project Engineer 1.00 Technologist WATERSHED PROTECTION 1.00 Watershed Protection Manager 2.00 Manager Environmental Controls 2.00 Program Assistant II 1.00 Project Manager 1.00 Senior Engineer 3.00 Associate Engineer 1.00 Senior Waste Investigator 2.00 Industrial Waste Investigator 3.00 Industrial Waste Inspector ZERO WASTE / REFUSE 1.00 Manager Solid Waste 3.00 Manager Environmental Controls 1.00 Zero Waste Coordinator 1.00 Program Assistant I 2.00 Environmental Specialist 1.00 Facilities Maintenance Lead 1.00 Landfill Technician 1.00 Landfill Maintenance Assistant This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation ENGINEERING SERVICES 1.00 Assistant Director, Engineering Service 1.00 Management Analyst 1.00 Administrative Associate III 1.00 Administrative Associate I FIELD SERVICE (SURVEY AND INSPECTION) 1.00 Supervisor Inspections/Survey 2.00 Inspector -Field Service 1.00 Surveyor CIP PROGRAM (STRUCTURES, STREETS & SIDEWALKS, STORM DRAIN, PARKS) 1.00 Senior Project Manager 3.00 Senior Engineer 1.00 Architect/Park Planner, 7.00 Project Engineer 4.00 Engineer 3.00 Associate Engineer 1.00 Project Manager PRIVATE DEVELOPMENT 1.00 Senior Engineer' 3.00 Engineering Technician III* 1.00 Engineer* AIRPORT DIVISION 1.00 Airport Manager 1.00 Manager, Maintenance Operations 1.00 Management Analyst 1.50 Facilities Technician FY 2018 POSITION TOTALS 205.00 - Full -Time 11.25 - Hourly *These positions serve functions that support the Development Services Department ** These positions serve functions that support the Utilities Department 374 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Description The Public Works Department is responsible for operations and capital projects in the following areas: ENGINEERING SERVICES Designs and constructs City -owned facilities, streets, sidewalks, storm drains, parks, and airport infrastructure; provides engineering support to City departments for construction in the public right of way. PUBLIC SERVICES Maintains and renovates City -owned and leased structures, streets, sidewalks, storm drains, street signage and parking lots; manages the City's Urban Forest; street sweeping program; and maintains the City's fleet. ENVIRONMENTAL SERVICES Operates and maintains the Regional Water Quality Control Plant; maintains a Pretreatment Program for control of industrial and commercial dischargers; provides pollution and waste prevention information and programs to residents and businesses; manages the City's solid waste programs, household hazardous waste programs, and the post -closure maintenance and monitoring of the City's closed landfill. AIRPORT OPERATIONS Operates the Palo Alto Airport; maintains Airport facilities and grounds, manages contracts with Fixed -Base Operators (tenants/lessees), serves as liaison with the Federal Aviation Admin- istration (FAA) and the Palo Alto flying community; and maintains compliance with FAA regula- tions. Accomplishments • Advanced progress toward goal of citywide average Pavement Condition Index score of 85, representing very good to excellent street conditions, by calendar year 2019. The 2016 calendar year-end score was 83. ▪ Continued implementation of the Council Infrastructure Plan. Initiated designs for the following projects: Downtown Parking Garage, New Public Safety Building and California Avenue Area Parking Garage. Completed designs for the Fire Station No. 3 Replacement and Charleston/Arastradero Corridor projects and completed 35% of the designs for the Highway 101 Bicycle and Pedestrian Bridge project. ▪ Completed upgrades to Byxbee Hills Park which includes the construction and planting of vegetative islands, adding new signage and benches and constructing a distinctive gathering area with a compass design. The project improvements have elevated Byxbee Hills Park to a place for people to enjoy, gather and experience spectacular south bay views. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 375 PUBLIC WORKS • Developed and began implementing an ordinance establishing new requirements for dewatering from basement and underground parking construction sites, with a goal of significantly reducing the amount of groundwater that is pumped. Initiatives ▪ Continue implementation of the Council Infrastructure Plan, managing the projects as a program with project management emphasis on maintaining scope, schedule, and budget. ▪ Continue working toward the goals and objectives identified in the Urban Forest Master Plan. ▪ Build on the initial implementation of the Infrastructure Management System (IMS) to capture street and sidewalk maintenance conducted by the Public Services Division and begin using the IMS to report to Council on the status of Palo Alto's infrastructure. ▪ Continue implementing organizational efficiencies as outlined in the Facility Master Plan Study, specifically analyzing the organizational structure and asset management process recommendations for implementation. ▪ Complete the core tasks of the Advanced Water Purification Feasibility Study to improve recycled water quality and award a contract for a recycled water strategic plan and groundwater study of indirect potable reuse. • Complete the Matadero Creek Stormwater Pump Station project, the last of the seven high - priority storm drain projects outlined in the 2005 storm drainage fee measure. ▪ Implement Stormwater Blue Ribbon Committee recommendations to develop continued storm drain system operations, a set of storm drain infrastructure improvements and green infrastructure innovations as a result of the passage of the Stormwater Management Fee ballot measure in April 2017. Budget Summary FY 2015 Actuals Dollars by Fund Airport Enterprise Fund General Fund Refuse Fund Storm Drainage Vehicle Replacement & 8,540,028 Maintenance Fund Wastewater Treatment 22,727,616 Total 81,228,784 Revenues Charges for Services 1,388,174 13,290,684 30,326,089 4,956,193 FY 2016 Actuals FY 2017 Adopted Budget 1,681,251 3,614,921 14,342,106 16,241,018 32,569,044 30,622,382 4,150,168 12,581,125 8,579,657 11,827,273 23,011,975 48,623,161 84,334,202 123,509,881 215,096 143,060 FY 2018 Adopted Budget 7,182, 951 17,021,951 30,674,955 6,309,668 13, 293, 051 63,041,886 137,524,463 181,328 205,168 FY 2018 Change $ 3,568,030 780,933 52,572 (6,271,457) 1,465,778 14,418,726 14,014,582 FY 2018 Change % 98.7% 4.8% 0.2% (49.8)% 12.4% 29.7% 11.3% 23,840 13.1% 376 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses Rental Income Return on Investments Total Revenues FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 9,461,509 9,560,988 10,844,390 10,916,891 72,501 299,664 230,080 23,518,849 38,969,880 15,451,031 58,173,949 58,904,362 62,093,754 64,071,504 1,977,750 1,225,417 2,091,790 1,391,814 396,107 (995,707) 4,344,241 3,734,842 2,722,150 3,189,000 466,850 4,422 16,900 6,500 6,500 1,059,930 571,442 1,001,516 622,300 (379,216) (37.9)% 257,248 475,470 310,000 1,680,000 1,370,000 441.9% 863,147 864,186 687,800 676,220 (11,580) (1.7)% 75,904,624 76,593,120 102,758,101 120,733,570 17,975,469 17.5% FY 2018 Change % 0.7% 65.7% 3.2% (71.5)% 17.2% -% Positions by Fund Airport Fund 2.00 5.88 5.88 5.46 (0.42) (7.14)% General Fund 55.65 56.49 57.85 56.66 (1.19) (2.06)% Refuse Fund 16.25 15.20 15.65 15.65 - -% Storm Drainage Fund 10.19 10.32 10.34 13.55 3.21 31.04% Vehicle Replacement and 18.22 17.26 17.26 17.26 -% Maintenance Fund Wastewater Treatment Fund 70.66 70.37 73.47 71.26 (2.21) (3.01)% Total 172.97 175.52 180.45 179.84 (0.61) (0.34)% * This table does not reflect positions in the Capital Improvement Fund or the Cubberley Property Infrastructure Fund PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 377 PUBLIC WORKS GENERAL FUND Goals and Objectives GOAL 1 Ensure the City's assets and infrastructure inventory are updated and well -maintained. Objectives: ▪ Implement an Infrastructure Management System (IMS) to support planning, budgeting, and accountability for the City's assets in accordance with the Infrastructure Blue Ribbon Commission's recommendations. • Maintain and enhance the overall condition of the City's streets while effectively communicating the program's accomplishments to the public. • Complete Sidewalk Program Evaluation Study to determine potential changes to the current sidewalk repairs program upon completion of the 30 -year sidewalk district cycle. GOAL 2 Provide high quality, cost-effective oversight of the City's capital improvement and facilities maintenance programs. Objectives: ▪ Continue implementation of the Council Infrastructure Plan for the Public Safety Building and other key infrastructure needs, managing the projects as a program with project management emphasis on maintaining scope, schedule, and budget. • Provide cost-effective custodial and facilities maintenance services that meet the expectations of the public and provide clean and safe buildings. ▪ Complete construction of the Golf Course Reconfiguration on time and within budget, allowing the new Baylands Golf Links to open in fall 2017. ▪ Implement the recommendations identified in the Facilities Organization Study, including evaluating asset inventory, data collection, performance standards and developing bench - marking and customer satisfaction surveys. • Begin improvements to the Municipal Service Center, including mechanical and electrical upgrades and roof replacements. GOAL 3 Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Objectives: ▪ Complete the Environmental Impact Report for and select an alternative to proceed with a Newell Road Bridge flood protection project. 378 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS • Ensure compliance with all applicable regulations related to the public's health and safety. • Increase the number of City trees planted per year by 200 while maintaining the health of the City's urban forest and ensuring proper tree clearance of all utility lines. ▪ Modernize City building systems to reduce energy consumption by including LED lighting conversions, roofing replacement upgrades, water efficient fixtures, more efficient mechanical equipment, computer controls of lighting and heating, ventilation and air conditioning (HVAC) systems. Key Performance Measures CITIZEN SURVEY - QUALITY OF SIDEWALK MAINTENANCE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Increase rating given by residents for quality of sidewalk maintenance. FY 2015 FY 2016 Actuals Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Percent of citizens rating the quality of sidewalk maintenance as "good" or "excellent" Description Purpose Status 62.00% 61.00% 65.00% 62.00% 63.00% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of sidewalk maintenance. The NCS is a collaborative effort between National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. To obtain feedback from residents on whether sidewalks are being maintained adequately in order to determine if the program's resources are appropriate. The Department had estimated that a 63 percent rating would be reached. In FY 2016 however, the measured rating of 61 percent for FY 2016 was less than the estimate. In consideration of the continued higher budgets for sidewalk maintenance that allowed for increased sidewalk improvements since FY 2013, the FY 2017 estimated and FY 2018 adopted ratings reflect continued modest increases. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 379 PUBLIC WORKS CITIZEN SURVEY - STREET MAINTENANCE Goal Objective Percent of citizens rating the quality of street repair as "good" or "excellent" Description Purpose Status Ensure the City's assets and infrastructure inventory are updated and well maintained. Increase rating given by residents for quality of street maintenance. FY 2015 Actuals 51.00% FY 2016 Actuals 57.00% FY 2017 Adopted 55.00% FY 2017 Estimated 57.00% FY 2018 Adopted 58.00% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of street maintenance. The NCS is a collaborative effort between National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. To obtain feedback from residents on whether streets are being maintained adequately in order to determine if the program's resources are appropriate. The Department estimated a 53 percent rating for FY 2016 and the actual measured rating for FY 2016 was higher at 57 percent. In consideration of the continued higher budgets for street maintenance that allow for increased paving since FY 2012, the FY 2017 estimated and FY 2018 adopted ratings reflect continued modest increases. CITIZEN SURVEY - STREET TREE MAINTENANCE Goal Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Objective Increase rating given by residents for quality of street tree maintenance. Percent of citizens rating street tree maintenance "good" or "excellent" Description Purpose Status FY 2015 Actuals 73.00% FY 2016 Actuals 71.00% FY 2017 Adopted 75.00% FY 2017 Estimated 73.00% FY 2018 Adopted 70.00% This measure assesses the residents' level of satisfaction with the City's street tree maintenance program. To obtain feedback from residents on whether street trees are being maintained adequately in order to determine if the program's resources are appropriate. The Department has been achieving between 70 and 75 percent satisfaction. In FY 2016 extra watering was offered so satisfaction numbers were estimated to u wredJe to 75 percent but the actual measured rating was only 71 percent. Due to prolonged drought conditions, tree removals increased leaving less time for tree trimming. With the drought abating, ratings are estimated to increase slightly in FY 2017 and decrease slightly in FY 2018. 380 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS PAVEMENT CONDITION SCORE Ensure the City's assets and infrastructure inventory are updated and well maintained. Goal Objective Maintain and enhance the overall condition of the City's streets. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Pavement Condition Score Description Purpose Status 79 82 83 83 This measure tracks the condition of the City's streets based on an index published by the Metropolitan Transportation Commission (MTC) as well as changes in that score. Improving the condition of our streets reduces overall maintenance costs and increases ride satisfaction. 84 Pavement Condition Index (PCI) scores are rated as follows: 80+= very good or excellent, 70-79 = good, 60-69 = fair, 50-59 = at -risk, 25-49 = poor, 0-24 = fail. The City Council has a goal of raising the citywide average PCI score to 85 by FY 2019. The FY 2017 estimated PCI is the same as the FY 2017 adopted goal and the Department remains on schedule to meet the citywide average goal. Annual reports by the Metropolitan Transportation Commission (MTC) indicate that Palo Alto now has one of the highest citywide average PCI scores in Santa Clara and San Mateo Counties. RESPONSE TO POTHOLE NOTIFICATION Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Increase rating. FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Percent of potholes repaired within 15 days of notification Description Purpose Status 90.00% 93.50% 93.50% 93.50% 90.00% This measure records the number of potholes that are repaired within 15 days of the Department being notified of the problem. The Department has set a goal of repairing potholes within 15 days in order to ensure streets are maintained and repaired in a timely manner. The Department has been making the repairs within 15 days 93.5 percent of the time. Increased inspection of adjacent areas to increase cost effectiveness and increase PCI scores has resulted in additional work. Since implementation of Palo Alto 311, notifications of potholes has increased substantially. Timely repair is conditional upon many factors, such as size of crew, weather, improved pavement conditions within City. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 381 PUBLIC WORKS Workload V ensures FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Number of street lane miles resurfaced annually Percent of lane miles resurfaced annually Total square footage of facilities maintained Cost per square foot for custodial services Cost per square footage for maintenance services Number of facilities work order requests completed Number of trees trimmed annually Total of trees maintained by the City Number of tree related electrical service disruptions 31 39 7.00% 8.00% 1,656,280 1,657,480 $1.06 $1.06 $1.85 $2.11 6,987 7,403 6,976 35,281 3 50 10.00% 1,657,480 $1.06 $1.86 7,200 5,678 5,500 36,381 35,390 41 8.70% 1,660,832 $1.06 $2.11 7,400 44 9.30% 1,660,832 $1.67 $2.11 7,400 6,150 5,500 37,254 37,254 4 5 8 8 382 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division General Fund Administration 1,277,626 1,448,725 1,125,088 1,388,775 263,687 23.4% General Fund Engineering Services 1,372,467 849,414 1,260,014 1,424,058 164,044 13.0% General Fund Public Services: 2,789,069 3,335,710 3,703,544 3,926,773 223,229 6.0% Streets General Fund Public Services: Structures and Grounds 5,110,365 5,901,104 6,361,428 6,188,470 (172,958) (2.7)% General Fund Public Services: Trees 2,741,156 2,807,153 3,790,944 4,093,876 302,931 8.0% Total 13,290,684 14,342,106 16,241,018 17,021,951 780,933 4.8% Dollars by Category Salary & Benefits Healthcare 974,952 978,822 1,166,476 1,194,500 28,023 2.4% Other Benefits 160,606 164,500 120,371 148,554 28,183 23.4% Overtime 208,125 222,549 172,085 171,389 (696) (0.4)% Pension 1,163,507 1,190,406 1,383,966 1,496,241 112,275 8.1% Retiree Medical 905,286 824,902 902,348 949,314 46,967 5.2% Salary 4,407,539 4,551,665 4,972,445 5,221,691 249,246 5.0% Workers' Compensation 160,675 43,500 69,461 190,214 120,753 173.8% Total Salary & Benefits 7,980,691 7,976,344 8,787,150 9,371,902 584,752 6.7% Allocated Charges 2,509,483 2,786,969 2,845,051 3,198,139 353,088 12.4% Contract Services 1,764,632 2,325,692 3,221,892 3,221,238 (654) (0.0)% Facilities&Equipment 5,664 255 2,146 2,146 -% General Expense 72,241 63,044 81,029 80,599 (430) (0.5)% Operating Transfers -Out 16,574 16,574 16,574 16,574 -% Rents & Leases 91,504 250,707 174,302 220,543 46,241 26.5% Supplies & Material 849,895 922,522 1,112,874 910,811 (202,063) (18.2)% Total Dollars by Expense Category 13,290,684 14,342,106 16,241,018 17,021,951 780,933 4.8% Revenues Charges for Services 115,235 6,687 53,828 53,280 (548) (1.0)% Charges to Other Funds 1,834,299 1,980,081 1,631,873 1,819,285 187,412 11.5% Operating Transfers -In 164,490 196,107 196,107 196,107 - -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 383 PUBLIC WORKS 3udget Summary Other Revenue Other Taxes and Fines Permits and Licenses Total Revenues FY 2015 Actuals 34,531 (975) 1,059,930 3,207,511 FY 2016 Actuals 15,602 571,442 2,769,920 FY 2017 Adopted Budget 6,000 1,001,516 2,889,324 FY 2018 Adopted Budget 46,000 622,300 2,736,972 FY 2018 Change $ 40,000 (379,216) (37.9)% (152,352) (5.3)% FY 2018 Change % 666.7% -% Positions by Division General Fund Administration 2.95 2.95 3.05 3.05 -% General Fund Engineering Services 6.55 3.47 4.56 5.29 0.73 16.01% General Fund Public Services: 14.88 18.98 18.02 18.22 0.20 1.11% Streets General Fund Public Services: 18,34 18.16 18.81 17.31 (1.50) (7.97)% Structures and Grounds General Fund Public Services: Trees 12.93 12.93 13.41 12.79 (0.62) (4.62)% Total 55.65 56.49 57.85 56.66 (1.19) (2.06)% Staffing Job Classification Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director Public Works Associate Engineer Building Serviceperson Building Serviceperson-Lead Cement Finisher Cement Finisher -Lead Coordinator Public Works Projects Director Public Works/City Engineer Electrician Engineer Engineering Technician Ill FY 2015 Actuals 1.00 0.60 2.63 1.28 0.30 1.00 1.80 FY 2016 Actuals 1.00 0.60 2.63 0.85 0.30 1.00 1.80 3.00 0.26 1.00 1.00 1.00 0.80 0.80 0.30 0.40 1.20 1.20 FY 2017 Adopted Budget FY 2018 Adopted Budget 1.00 1.00 0.60 0.60 2.65 2.65 0.01 0.01 0.87 0.87 0.30 0.30 1.00 1.00 1.80 1.00 3.00 3.00 0.26 0.26 0.50 1.50 1.00 1.00 0.80 0.80 0.66 0.66 1.47 1.47 FY 2018 Change FTE (0.80) 1.00 FY 2018 Salary 82,722 42,076 201,956 817 146,201 34,126 62,748 67,173 277,219 25,706 154,407 214,614 86,132 84,554 140,819 384 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Equipment Operator Facilities Carpenter Facilities Maintenance -Lead Facilities Mechanic Facilities Painter Facilities Technician FY 2015 Actuals 3.46 1.00 1.85 5.55 1.75 FY 2016 Actuals 3.46 1.00 1.85 5.55 1.75 FY 2017 Adopted Budget 3.46 1.00 1.85 1.75 5.55 Heavy Equipment Operator 2.13 2.33 2.33 Heavy Equipment Operator -Lead 0.85 0.85 0.85 Inspector, Field Services 0.83 0.10 0.11 Landscape Architect Park Planner - 0.10 0.10 Management Analyst 0.60 0.70 0.70 Manager Facilities 0.90 0.90 Manager Maintenance Operations 1.95 1.20 1.20 Manager Urban Forestry 0.96 0.96 0.96 Manager Watershed Protection - - 0.05 Planning Arborist 0.75 0.75 0.75 Project Engineer 0.30 0.40 0.50 Project Manager 1.63 1.93 2.58 Senior Engineer 1.47 0.57 0.79 Senior Management Analyst 1.11 1.11 1.11 Senior Project Manager 0.10 0.10 0.10 FY 2018 Adopted Budget 3.46 1.00 1.85 1.75 4.05 2.33 0.85 0.11 0.10 0.70 0.90 1.20 0.96 0.05 0.71 0.50 2.65 0.79 1.11 0.10 FY 2018 Change FTE FY 2018 Salary 294,319 92,406 - 220,911 161,711 (1.50) 412,778 224,430 87,585 11,371 12,468 75,175 - 130,572 162,240 - 136,282 7,119 (0.04) 88,895 68,944 0.07 274,934 121,505 - 121,293 15,097 Supervisor Inspection and 0.53 0.10 0.10 0.10 12,060 Surveying Surveyor, Public Works 0.31 0.10 0.33 0.33 34,521 Traffic Controller Maintainer -Lead 1.00 - - - - - Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 - 162,015 Traffic Controller Maintainer II 2.00 2.00 2.00 2.00 - 154,629 Tree Maintenance Person 1.00 1.00 1.00 1.00 85,689 Tree Trim/Line Clear 7.00 7.00 7.00 7.00 590,478 Tree Trim/Line Clear -Lead 1.00 1.00 1.00 1.00 90,236 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 52.98 54.59 55.93 54.66 (1.27) 5,470,934 2.67 1.90 1.92 2.00 0.08 117,154 55.65 56.49 57.85 56.66 (1.19) 5,588,088 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 385 PUBLIC WORKS 3udget Reconciliation Prior Year Budget 57.85 16,241,018 2,889,324 13,351,694 Base Adjustments Urban Forest Master Plan Bed Bugs Inspection One -Time Prior Year Expenditures and Revenues Salary and Benefits Adjustments Street Cut and Enroachment Permit and License Fees Adjustments Tree Trimming Services (Year 2 annualization under 7 -year cycle) Rents & Leases Expenditure Alignment for Cubberley Plan Checking Fees Adjustment ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Land Fill Allocated Charges Adjustment Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Stormwater Management Fee Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (0.48) (200,000) (30,000) (0.48) (230,000) 0.20 780,251 338,220 (759) (3,893) 166,934 190,438 (59,439) (15,140) 7,353 3,557 1,123 1,747 107,913 (51,397) 0.20 1,466,907 (379,216) (548) 55,311 (200,000) (30,000) (230,000) 780,251 379,216 338,220 (759) 548 (3,893) (55,311) 166,934 190,438 (59,439) (15,140) 7,353 132,101 (132,101) (192,352) 3,557 1,123 1,747 107,913 (51,397) 1,659,259 Total FY 2018 Base Budget JIM% 17,477,925 2,696,972 14,780,953 Budget Adjustments 386 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation Positions Expenditures Revenues Net General Fund 1 Urban Forestry Mitigation fee for Tree Planting 2 Staffing Resources Funding Realignment 3 Facilities Staffing Reorganization 4 Cubberley Community Center Maintenance and Repair Staffing Realignment 5 Facilities and Street Operations Reduction and Realignment 6 Tree Lights and Downtown Streets Team Funding Shift 0.59 40,000 36,063 16,164 (1.50) (348,000) (124,000) (76,201) 40,000 0 36,063 16,164 (348,000) (124,000) (76,201) Total Budget Adjustments (0.91) (455,974) 40,000 (495,974) Total FY 2018 Adopted Budget 56.66 17,021,951 2,736,972 14,284,980 3udget Adjustments Budget Adjustments Positions Expenditures Net Revenues General Fund 1 Urban Forestry Mitigation fee for Tree Planting 0.00 40,000 40,000 This action appropriates $120,000 of Urban Forestry mitigation fee revenue ($40,000 annually for three years) collected by the City in order to plant approximately 200 trees per year to replace trees removed through private development. Each time a private development submits plans that include removal of trees without a plan to replant them as part of the project, a $650 per tree fee is collected so that a tree can be planted somewhere else in the City, so as not to reduce the overall canopy within the City. (Ongoing net costs: $0) Performance Results © 0 This action appropriates developer fee funds to plant trees and maintain the overall urban forest canopy within the City. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 387 PUBLIC WORKS Budget Adjustments u • • et .Ad' ust e Expe ,alit ..,r-. Revenues Net General Fu.td 2 Staffing Resources Funding Realignment 0.59 36,063 36,063 This action realigns staff and operations allocations to accurately reflect actual workload activities by shifting 0.07 FTE Project Manager, 0.20 FTE Management Specialist, and 0.36 FTE Project Construction Engineer from the Capital Improvement Fund to the General Fund. Additionally, 0.04 FTE Planning Arborist will be shifted from the General Fund to the Capital Improvement Fund. This will ensure service and operations continue at the same levels under more accurate staffing allocations. (Ongoing net costs: $36,063) Performance Results No impact to current service levels are anticipated as a result of this funding realignment. 3 Facilities Staffing Reorganization 16,164 This action eliminates a 1.0 FTE Building Serviceperson Lead and adds a 1.0 FTE Coordinator Public Works Projects at a cost of approximately $20,000 to all funds ($16,164 to the General Fund). This action was recommended in the Facilities Study conducted in September 2015 to expand and adjust the duties necessary in the facilities division beyond only custodial services oversight. The new Coordinator Public Works Projects position will focus on administering, scheduling, coordinating, and inspecting assigned contractor related project activities for any projects in the Facilities Maintenance, Custodial Maintenance, Building Rehabilitation, and Capital Improvement projects. (Ongoing net costs: $21,241) Performance Results 4 This will ensure the appropriate staffing levels are in place to more effectively provide management and oversight of the facilities activities. 4 Cubberley Community Center Maintenance and0111. Repair Staffing Realignment -1.50 (348,000) 0 (348,000) As recommended by Staff as part of the FY 2018 Budget Adoption memorandum (CMR #8186) and approved by the City Council on June 27, 2017 through the adoption of the Fiscal Year 2018 Operating Budget, this action will reallocate the maintenance costs associated with the Cubberley Community Center facilities from the General Fund to the Cubberley Property Infrastructure Fund. In order to consolidate costs for Cubberley, current facilities operations and maintenance activities will be reflected in the Cubberley Property Infrastructure Fund. As discussed elsewhere in this document, $44,000 of these savings were designated by the City Council to increase the total Human Services Resource Allocation Process (HSRAP) funding from $459,213 to $503,213 and the remaining savings of $304,000 were transferred to the Capital Improvement Fund to increase the Infrastructure Reserve. (Ongoing net costs: $409,434) Performance Results 4 No impact to current service levels are anticipated as a result of this funding realignment. 5 Facilities and Street Operations Reduction and Realignment 0.00 (124,000) (124,000) mil• This action reduces Facilities rehabilitation funding from $165,256 to $81,256; Facilities Mitchell Park and Community maintenance funding from $224,363 to $204,363; and Streets materials funding from $358,285 to $338,285 for an overall reduction of $124,000. Service levels for facility rehabilitation projects will be reduced from beautification or replacement to repairs. However, service levels for Mitchell Park and Community Center will not be impacted since the building is newer. Beautification or replacement of functional items could be funded by requesting departments or if approved, added to the appropriate recurring CIP project. Street Operations will focus work from potholes and crack repair to roadside clearing for the last part of the fiscal year to better align workload capacity with the isues that occur more during certain times of the year. (Ongoing net savings: $124,000) 388 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Adjustments Performance Results As a result of this reduced service level, some cycle times may increase as capacity will reduce and satisfaction may decrease as rehabilitation for beautification or replacements will no longer be readily funded. 6 Tree Lights and Downtown Streets Team Funding Shift (76, 201) 0 (76,201) This action shifts the contract for the maintenance of the street tree lights as well as the contract with the Downtown Streets Team, to the University Avenue Parking District Fund. These contracts provide services used to help maintain a clean and inviting downtown. To align costs with the funding source where the work is being performed $46,201 for the Downtown Streets Team and $30,000 for street tree light maintenance will be shifted to the University Avenue Parking District Fund. (Ongoing net savings: $76,201) Performance Results No impact to current service levels are anticipated as a result of this funding realignment. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 389 PUBLIC WORKS AIRPORT FUND Description The Palo Alto Airport serves as a general aviation reliever airport to the Bay Area's major air carrier airports. It is the third busiest airport in the Bay Area, averaging 180,000 annual operations; open 24 hours each day, 365 days annually; and has a Federal Aviation Administration staffed air traffic control tower. Accomplishments ▪ Developed and began implementation of a transition plan for operating the Palo Alto Airport after the Fixed -Base Operator (FBO) leases expired in FY 2017. ▪ Completed the design and construction of the Airport Perimeter Fence project utilizing an FAA Grant reimbursement awarded for 90% of the design and construction. ▪ Completed the design of Phase I of the Airport Apron Reconstruction project and the Invitation for Bid. Initiatives ▪ Continue work on the Airport Apron Reconstruction project. ▪ Update and adopt Rules and Regulations, Minimum Business Standards, and Guiding Documents. ▪ Begin development of Airport Business Plan. ▪ Continue seeking grant funding opportunities from the Federal Aviation Administration (FAA) and other agencies for capital improvements. Goals and Objectives GOAL 1 Operate a safe and viable airport as an enterprise fund while controlling expenses and generat- ing sufficient revenues to become self-sufficient. Objectives: ▪ Implement Rules and Regulations and Minimum Standards for the Palo Alto Aiport (PAO) operations and leases. ▪ Maintain Compliance with federal and state requirements for airfield conditions. 390 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS ▪ Continue to follow industry standards and trends in staff training and education. • Adopt and implement an Airport Business Plan to guide future development and fund stability. GOAL 2 Provide high quality, cost-effective oversight of the airport's capital improvement plan. Objectives: ▪ Continue management of FAA sponsored capital improvement projects at the airport. ▪ Submit grant applications to the FAA for multi -phase projects that ensure efficiency and airfield safety. • Maintain grant funding eligibility by submitting a Five -Year Airport Capital Improvement Project work plan to the FAA annually. Key Performance V ensures AIRCRAFT OPERATIONS Goal To track the number of aircraft operations. Objective Number aircraft operations Description Purpose Status To provide a safe, aesthetically pleasing and profitable airport. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted 181,000 160,200 180,000 150,000 160,000 The Palo Alto Airport (PAO) is owned and operated by the City of Palo Alto and is a general aviation field. However, the Federal Aviation Administration (FAA) defines workload measures for airports with an air traffic control tower (ATCT) as the number of aircraft operations (sum of landings and takeoffs). In addition to being the tenth busiest single runway airport in California, PAO is a reliever to three Bay Area airports. PAO has one paved runway 13/31, which measures 2,443 x 70 feet. Providing a safe, well maintained and attractive airport will appeal to the tenants, pilots, visitors, outside agencies, residents and the flying community at large. Total operations were 160,200 in FY 2016 and are estimated to decrease to 150,000 in FY 2017 but increase back to FY 2016 levels in FY 2018. Operations are affected by construction, weather and training schools in the area. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 391 PUBLIC WORKS PERCENTAGE OF TIE -DOWNS LEASED Goal Objective To maximize vacant tie down spaces. To increase tenant occupancy by providing a safe and well -maintained airport that is also cost recoverable. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of Tie -downs Leased Description Purpose Status 63.00% 68.00% 70.00% 70.00% 70.00% The City of Palo Alto operates and maintains the Palo Alto Airport and provides airport users with safe transportation options with a high level of airport services. The airport has at total of 510 tie -down spaces. Of these, the City administers 350 tie -down spaces for aircraft storage that can be leased directly from the City. Utilizing the available spaces will increase revenue and will provide funding to revitalize the Palo Alto Airport without changing or increasing the current airport footprint. Tie -down and apron areas that are in disrepair are not available for leasing and unsightly. Providing a safe, well maintained and attractive airport will appeal to the tenants, pilots, visitors, outside agencies, residents and the flying community at large. Airport staff are responsible for maintaining 102.4 acres of airport facilities, infrastructure and equipment; and managing over 250 current tenant leases. In FY 2016 the percentage of leased tie -downs was 68% and this is anticipated to increase to 70% in FY 2017 and continue in FY 2018. 392 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Dollars by Division Airport Administration Airport Operations CIP Airport Fund Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 756,719 741,627 713,668 953,802 240,134 33.6% 249,815 269,397 331,597 556,909 225,311 67.9% 381,639 670,226 2,569,655 5,672,241 3,102,585 120.7% 1,388,174 1,681,251 3,614,921 7,182,951 3,568,030 98.7% Dollars by Category Salary & Benefits Healthcare 61,150 84,769 97,807 142,902 45,095 46.1% Other Benefits 12,663 18,205 16,841 20,231 3,390 20.1% Overtime 36,324 12,735 - - - -% Pension 26,387 90,631 101,056 146,008 44,952 44.5% Retiree Medical 9,636 10,254 11,221 11,804 584 5.2% Salary 377,294 494,250 539,525 576,577 37,052 6.9% Workers' Compensation 74 8,420 20,768 12,348 146.6% Total Salary & Benefits 523,454 710,916 774,870 918,291 143,421 18.5% Allocated Charges 92,487 295,146 299,112 538,108 238,996 79.9% Contract Services 385,850 104,386 7,500 146,700 139,200 1,856.0% Facilities & Equipment 15,000 (15,000) (100.0)% General Expense 35,935 45,345 30,180 30,480 300 1.0% Operating Transfers -Out 9,519 9,519 -% Rents & Leases 6,698 4,400 11,630 11,630 -% Supplies & Material 10,790 32,154 56,656 56,472 (184) (0.3)% Capital Improvement Program 332,959 488,905 2,419,973 5,471,751 3,051,778 126.1% Total Dollars by Expense Category 1,388,174 1,681,251 3,614,921 7,182, 951 3,568,030 98.7% Revenues Charges for Services 2,506 - - - -% From Other Agencies 299,664 131,868 2,177,975 4,860,000 2,682,025 123.1% Net Sales 517,835 493,046 533,370 644,879 111,509 20.9% Operating Transfers -In 704,150 200,000 (504,150) (71.6)% Other Revenue 108,837 15,000 15,000 -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 393 PUBLIC WORKS 3udget Summary Rental Income Return on Investments Total Revenues FY 2015 Actuals 178,620 848 999,473 FY 2016 Actuals 353,076 5,839 1,092,666 FY 2017 Adopted Budget 280,000 1,700 3,712,195 FY 2018 Adopted Budget 1,680,000 1,700 7,401,579 3,689,384 99.4% FY 2018 Change $ FY 2018 Change % 1,400,000 500.0% -% Positions by Division Airport Administration Airport Operations CIP Airport Fund Total Staffing 2.00 2.96 2.00 2.00 -% 0.50 2.42 2.21 (0.21) (8.68)% - 2.42 1.46 1.25 (0.21) (14.38)% 2.00 5.88 5.88 5.46 (0.42) (7.14)% Job Classification Facilities Technician Management Analyst Manager Airport Manager Maintenance Operations FY 2015 Actuals 1.00 1.00 FY 2016 Actuals 1.00 1.00 1.00 FY 2017 Adopted Budget 1.00 1.00 1.00 FY 2018 Adopted Budget 1.50 1.00 1.00 1.00 FY 2018 Change FTE 1.50 FY 2018 Salary 152,881 102,731 155,293 113,152 Sub -total: Full -Time Equivalent 2.00 3.00 3.00 4.50 1.50 524,057 Positions Temporary/Hourly 2.88 2.88 0.96 (1.92) 59,904 Total Positions 2.00 5.88 5.88 5.46 (0.42) 583,961 394 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation 3,614,921 3,712,195 (97,274) Base Adjustments Transfers from the General Fund One Time Prior Year Expenditures Deleted Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Capital Improvement Projects and Federal Aviation Administration (FAA) Grant Funding ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Plan Allocated Charges Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Liability Insurance Allocated Charges Adjustment Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement and Maintenance Allocated Charges Adjustment Wastewater Sales Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities Total FY 2018 Base Budg Budget Adjustments 1 Airport Tie Down and Rental Income 2 General Fund Loan to the Airport Fund 3 Airport Facilities Maintenance 4 Airport Operations Staffing 5 Airport Legal Fees 6 Supplemental Pension Trust Fund Contribution Total Budget Adjustments Total FY 2018 Adopted Budget - (704,150) - (704,150) 68,667 3,049,566 (184) 116,806 67,124 (8,232) 15,189 470 13,210 (623) 21,528 12,833 690 - 3,357,045 IMEE (0.42) (0A2) 5.46 6,971,966 75,000 74,754 50,000 11,231 210,985 7,182,951 2,682,025 2,682,025 5,690,070 704,150 704,150 68,667 367,541 (184) 116,806 67,124 (8,232) 15,189 470 13,210 (623) 21,528 12,833 690 675,020 1,281,896 1,511,509 (1,511,509) 200,000 (200,000) 75,000 74,754 50,000 11,231 1,711,509 (1,500,524) 7,401,579 (218,628) PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 395 PUBLIC WORKS 1 Airport Tie Down and Rental Income 3udget Adjustments Positions Expenditures 0.00 0 1,511,509 (1,511,509) This action recognizes revenues from property rental and tie -down fees collected by the City's Airport Operations once the current legacy leases expire. Legacy leases were collected directly by the Fixed Base Operator (FBO) lessees and expired April 2017. Once the legacy leases expired, the City began receiving actual rental revenue versus a percentage of the monthly lease amount. Included in the rental agreement with aircraft owers are tie -down fees, which are updated annually based on the local Consumer Price Index (CPI) and effective July 1 of the next fiscal year. Should the CPI decrease, the tie -down fee rates will remain the same. (Ongoing net savings: $1,549,797) Performance Results Increased revenue ensures the Airport has adequate resources to support operations in upcoming fiscal years. 2 General Fund Loan to the Airport Fund 200,000 (200,000) In FY 2017 the General Fund loaned the Airport Fund $704,150 to ensure that the Public Works Department had sufficient staffing and resources to operate and maintain the airport. With large capital projects underway funded by an FM grant that requires a 10% contribution from the City, a transfer of $200,000 from the General Fund to the Airport fund is needed in FY 2018 to support ongoing operations and funding augmentations recommended in this budget, ensuring the long-term financial health of the Airport Fund. (Ongoing net savings: $200,000) Performance Results This action will ensure that the Airport has adequate resources to support operations in Fiscal Year 2018. 3 Airport Facilities Maintenance 0.00 75,000 0 75,000 This action provides ongoing maintenance and operations funding of $75,000 to repair and maintain hangars and other facilities previously maintained by the FBO lease -holders. (Ongoing net costs: $75,000) Performance Results This ensures facility maintenance that was previously performed by the FBO lease holders will continue after the FBO leases expire. 4 Airport Operations Staffing 74,754 396 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Adjustments This action eliminates two 0.96 FTE General Laborer -H positions and adds one 1.0 FTE and one 0.5 FTE Facilities Technician positions. With the airport continuing to rebuild, implementing major capital projects, working with regulatory bodies and contracting directly with fixed based operators, more permanent staff are necessary to facilitate day-to-day airport operations. (Ongoing net costs: $89,640) Performance Results © 0 This addition will help solidify the resources necessary to maintain services and ensure attraction and retention of staff at the airport. 5 Airport Legal Fees 0.00 50,000 0 = 50,000 This action provides funding for legal fees associated with outside counsel that specializes in aviation law. The City's Attorney's Office does not have a specialist in aviation law so outside counsel is needed to review items related to modifying the Airport Business Plan, updating minimum standards, rules & regulations, leases and other guiding documents. (Ongoing net costs: $50,000) Performance Results This action enables the Airport to update its Airport Business plan and remain in compliance with aviation laws. 6 Supplemental Pension Trust Fund Contribution 0.00 11,231 This action establishes a transfer from the Airport Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $11,231 which represents approximately 10% of the Airport Fund's annual pension contribution. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 397 PUBLIC WORKS REFUSE FUND Description Public Works provides refuse related services on a user charge basis to Palo Alto's residents and businesses. The Refuse Fund goals are to minimize waste generation, maximize recycling and reuse to meet and exceed the City's Zero Waste goals, to protect the environment by safely collecting and disposing of household hazardous waste, and to maintain and monitor the City's closed landfill. Accomplishments ▪ Implemented the second phase of a three-phase commercial recycling and composting ordinance requiring all commercial customers to subscribe to all three waste collection services (garbage, recycling and compost) and sort properly. Phase 1, implemented in April 2016, diverted over 1,000 tons of food scraps and food soiled paper from food service establishments, large waste generators and multi -family residences in Fiscal Year 2016. Phase 2, implemented in January 2017, targeted mid -sized waste generators. Phases 1 and 2 together are projected to recover over 2,700 tons per year of recyclable and compostable materials from commercial garbage. ▪ Diverted approximately 1,700 tons of food scraps from residential garbage in the first year of the City's residential food scraps collection program. The diverted material is anaerobically digested and generates electricity and compost. This is the result of continued outreach to residents focused on placing food scraps and food soiled paper directly into green carts. ▪ Completed upgrades to Byxbee Hills Park, including the construction and planting of vegetative islands, adding new signage and benches and constructing a distinctive gathering area with a compass design. The project improvements have elevated Byxbee Hills Park to a place for people to enjoy, gather and experience spectacular south bay views. ▪ Developed a conceptual sustainability/climate action plan that includes new waste diversion goals and energy/carbon reduction goals and objectives. • Raised the Refuse Fund's rate stabilization reserves to be within fund guidelines at approximately $6 million. A result of six years of cost saving measures and revenue increases after the reserves plummeted to a negative $5 million in Fiscal Year 2011. 398 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Initiatives • Implement the third phase of the recycling and composting ordinance for smaller -sized commercial customers. Continue outreach and training to achieve near 100% compliance with the ordinance and eventually divert over 4,000 tons of food scraps per year from commercial garbage. • Develop and implement outreach and educational strategies for residential customers for the diversion of residential food scraps into green carts with a stretch goal of diverting over half of the estimated 5,000 tons of residential food scraps from the garbage to beneficial use. ▪ Continue working with GoBox to develop and foster a reusable takeout container service pilot in the downtown area, expanding the pilot to include reusable hot beverage containers. ▪ Continue both expanded home composting and food waste reduction campaigns to increase awareness and the benefits of local sustainable material management. • Develop a pilot program at the City's Household Hazardous Waste Station to reduce the disposal of hazardous products down drains by accepting disposal from residents in other communities within the Palo Alto Regional Water Quality Control Plant service areas. ▪ Award a consulting contract to characterize the City's waste streams, update the City's zero waste operational plans and prepare an RFP for waste management services to provide waste hauling, processing services, disposal and outreach. ▪ Research the feasibility of creating a policy that would require deconstruction and salvage as part of a development permit for residential houses in Palo Alto. Goals and Objectives GOAL 1 Minimize waste generation and maximize recycling and reuse programs to achieve zero waste to landfills by 2021. Objectives: • Promote recycling, composting, and reuse through educational programs and outreach to increase public participation. • Reduce landfilled waste by implementing new programs including the recycling and composting ordinance approved by Council in January 2016. • Develop and recommend policies to minimize and divert problem materials. GOAL 2 Protect the environment by providing convenient, weekly and local household hazardous waste collection services to residents and small businesses. Objectives: • Increase participation with the City's household hazardous waste collection services through educational programs and outreach. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 399 PUBLIC WORKS • Promote the reuse of good household products to residents at the City's Household Hazardous Waste Station reuse storage cabinets. GOAL 3 Effectively manage the City's closed landfill to meet all regulatory requirements and minimize the impacts of postclosure maintenance on Byxbee Park users. Objectives: • Perform annual settlement repairs of the landfill areas to minimize the impacts of periodic larger repairs to park users. • Develop and maintain a comprehensive preventative maintenance program for the landfill environmental control systems. Key Performance Measures AVERAGE AMOUNT OF GARBAGE (IN POUNDS) GENERATED PER RESIDENT AND DISPOSED IN LANDFILLS EACH DAY Goal Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2021. Promote recycling, composting, and reuse through educational programs and outreach in order to increase public participation. Objective FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Average amount of garbage (in pounds) generated per resident and disposed in landfills each day Description Purpose Status 3.60 3.90 3.50 N/A N/A This measure will be replaced as of FY 2017 by a more understandable measure which will track the percentage of waste diverted from landfills and will be calculated directly from the pounds of waste sent to the landfill. This measure calculated the daily average amount of garbage disposed per resident to measure how much waste is being disposed in landfills. This measure helps track waste generation and can help verify if the City is meeting its City's zero waste goals. This measure is being replaced by a similar measure, "Percentage of waste diverted from landfills". 400 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS NUMBER OF HOUSEHOLDS SERVICED THROUGH THE HOUSEHOLD HAZARDOUS WASTE PROGRAM ON AN ANNUAL BASIS Protect the environment by providing convenient, weekly and local household hazardous waste collection services to residents and small businesses. Goal Objective Annual number of Households Serviced through the Household Hazardous Waste Program Description Purpose Status Increase participation with the City's household hazardous waste collection services through educational programs and outreach. Promote the reuse of good household products to City residents at the City's Household Hazardous Waste Station reuse storage cabinets. FY 2015 Actuals 4,757 FY 2016 Actuals 4,920 FY 2017 Adopted 4,900 FY 2017 Estimated 4,970 FY 2018 Adopted 5,000 The number of households serviced at the City Household Hazardous Waste station is a direct measurement of the usage of the program and it indirectly relates to the convenience and public awareness of the program. The more that residents use the household hazardous waste collection program, the less likely that some of these unused hazardous products may be disposed in the garbage or down the drain. The City's household hazardous waste program has one of the highest public participation rates in the state at approximately 17.4%. By comparison, the County of Santa Clara Household Hazardous Waste Program had a participation rate of 4.1% in FY2016. PERCENTAGE OF HOUSEHOLDS WITH MINI -CAN GARBAGE SERVICE Goal Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2021. Promote recycling, composting, and reuse through educational programs and outreach in order to increase public participation. Objective Percentage of households with Mini -Can garbage service Description Purpose Status FY 2015 Actuals 35.00% FY 2016 Actuals 38.00% FY 2017 Adopted 39.00% FY 2017 Estimated 40.00% FY 2018 Adopted 42.00% The percentage of households with mini -can garbage service is a good measure of residential garbage generation. As more residents participate in the City's zero waste programs, their garbage volume will be reduced further increasing the City's diversion from landfill disposal and helping the community meet its zero waste and sustainability goals. The purpose of tracking this measure is to help verify if residents are reducing their garbage generation in order to achieve zero waste to landfills by 2021. Palo Alto residents have continued the trend of decreasing the size of their garbage carts by diverting their recyclable and compostable waste to the blue and green carts thereby decreasing the amount of garbage landfilled. Residents with larger garbage containers are also trending toward smaller garbage carts. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 401 PUBLIC WORKS PERCENTAGE OF WASTE DIVERTED FROM LANDFILLS Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2021. Promote recycling, composting, and reuse through educational programs and outreach in order to increase public participation. Goal Objective FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of waste diverted from landfills Description 80.00% 79.00% N/A 81.00% 82.00% As of FY 2017 this measure replaces the old measure of using the average number of pounds disposed per day per resident with an easier to understand percentage to indicate the City's effectiveness of zero waste programs. The percent of waste diverted from landfills is derived from both the amount of waste landfilled in the previous calendar year based on data from CalRecyle and the per capita disposal rate in landfills. Purpose This measure helps track waste generation and can help verify if the City is meeting its zero waste goals. The City's waste diversion percentage is currently between 79 and 82 percent. Status New organics programs are expected to raise the diversion measure to 82% or higher for 2018. The statewide average diversion rate is 64%. PERCENTAGE OF COMMERCIAL ACCOUNTS WITH COMPOST SERVICE Goal Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2021. Reduce landfilled waste by implementing new programs such as the recycling and composting ordinance approved by Council in January 2016. Objective FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 Adopted Estimated FY 2018 Adopted Percentage of commercial accounts with compost service Description Purpose Status Workload V 28.00% 36.00% 40.00% 60.00% 75.00% The percentage of commercial customers with compost service is a good measure of commercial customer participation with the City's zero waste programs, especially the recycling and composting ordinance. As more customers order compost service and sort their waste properly, additional food scraps and soiled paper will be diverted from landfills thereby advancing the city's goals. The purpose of tracking commercial customer compost service usage is to both verify that commercial customers are reducing their garbage generation as well as to confirm that customers are complying with the City's Recycling and Composting Ordinance. The new Recycling and Composting Ordinance was implemented in April 2016 and has increased this measure from a little over 30% to over 50%. Implementing Phase 2 in January 2017 and Phase 3 in January 2018 should push this measure much higher as customers begin to sort, diverting the waste from landfill disposal. ensures FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Tons of materials collected by the City for recycling or composting 50,546 56,438 53,000 57,000 58,000 402 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIP Refuse Fund 2,251,098 2,138,706 148,346 - (148,346) (100.0)% Refuse Administration 4,174,034 4,444,281 4,110,841 3,688,125 (422,716) (10.3)% Refuse Collection, Hauling and 5,313,757 5,377,366 5,422,561 4,776,133 (646,428) (11.9)% Disposal: Operations Refuse Collection, Hauling and Disposal: Payment to 14,381,492 16,250,898 16,252,909 16,252,909 -% GreenWaste Refuse Solid Waste: Operations 2,637,257 3,324,242 3,291,430 4,478,122 1,186,692 36.1% Refuse Street Sweeping 1,568,451 1,033,550 1,396,295 1,479,665 83,370 6.0% Total 30,326,089 32,569,044 30,622,382 30,674,955 52,572 0.2% Dollars by Category Salary & Benefits Healthcare 220,442 202,393 259,042 262,548 3,507 1.4% Other Benefits 53,705 52,932 42,119 51,305 9,186 21.8% Overtime 42,197 47,866 41,789 41,789 -% Pension 330,667 358,690 405,662 450,516 44,855 11.1% Retiree Medical 369,911 330,686 361,874 380,709 18,835 5.2% Salary 1,687,945 1,619,280 1,560,468 1,652,189 91,721 5.9% Workers' Compensation 64,275 45,139 20,894 57,126 36,232 173.4% Total Salary & Benefits 2,769,142 2,656,986 2,691,847 2,896,182 204,335 7.6% Allocated Charges 2,026,898 2,054,784 1,773,866 1,866,433 92,568 5.2% Contract Services 5,650,771 6,298,872 6,431,700 6,880,744 449,044 7.0% Debt Service 577,583 565,372 564,841 155,637 (409,204) (72.4)% Facilities & Equipment - - 3,000 3,000 - -% General Expense 68,606 45,244 113,147 112,275 (872) (0.8)% Operating Transfers -Out 42,289 27,915 57,437 62,282 4,845 8.4% Rents & Leases 2,538,983 2,466,105 2,546,790 2,302,687 (244,103) (9.6)% Supplies&Material 128,125 112,220 143,706 142,805 (901) (0.6)% Transfer to Infrastructure 68,880 - - - -% Utility Purchase 14,381,492 16,250,898 16,252,909 16,252,909 - -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 403 PUBLIC WORKS 3udget Summary Capital Improvement Program Total Dollars by Expense Category Revenues Charges for Services Charges to Other Funds Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Rental Income Return on Investments Total Revenues Positions by Division CIP Refuse Fund Refuse Administration Refuse Collection, Hauling and Disposal: Operations Refuse Solid Waste: Operations Refuse Street Sweeping Total Staffing Job Classification Account Specialist Accountant Assistant Director Public Works Business Analyst Chief Sustainability Officer Coordinator Public Works Projects FY 2015 Actuals 2,142,201 30,326,089 FY 2016 Actuals 2,021,767 FY 2017 Adopted Budget 43,140 32,569,044 30,622,382 FY 2018 Adopted Budget FY 2018 Change $ 0 (43,140) 30,674,955 52,572 FY 2018 Change % (100.0)% 0.2% 26,411 38,973 37,500 34,000 (3,500) (9.3)% 300,932 241,632 275,932 210,552 (65,380) (23.7)% 27,490,337 28,332,871 28,107,116 29,359,500 1,252,384 4.5% 1,060,927 356,255 13,325 - (13,325) (100.0)% 3,677,792 3,311,151 2,546,150 2,546,000 (150) (0.0)% 5,800 (2,100) - - - -% 78,628 122,395 30,000 (30,000) (100.0)% 234,454 260,539 178,900 178,900 -% 32,875,281 32,661,715 31,188,923 32,328,952 1,140,029 3.7% 0.65 0.65 0.65 - (0.65) (100.00)% 0.59 0.48 0.43 0.43 -% 1.00 1.00 1.00 1.00 - % 10.37 10.39 10.89 11.54 0.65 5.97% 3.64 2.68 2.68 2.68 - - % 16.25 15.20 15.65 15.65 - _0/0 FY 2015 Actuals 0.15 0.10 0.35 0.11 0.05 1.00 FY 2016 Actuals 0.15 0.10 0.35 1.00 FY 2017 Adopted Budget 0.10 0.10 0.35 FY 2018 Adopted Budget 0.10 0.10 0.35 FY 2018 Change FTE FY 2018 Salary 7,108 9,499 65,329 404 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification FY 2015 Actuals FY 2016 Actuals Deputy Chief/Fire Marshal 0.04 0.03 Environmental Specialist 1.00 1.00 Facilities Maintenance Lead - - Hazardous Materials Inspector 0.02 0.02 Landfill Technician 1.00 1.00 Management Analyst 1.10 0.10 Manager Environmental Control 2.00 3.00 3.00 3.00 Program Manager Maintenance Operations 0.46 0.46 0.46 0.46 - 62,192 Manager Solid Waste 1.00 1.00 1.00 1.00 146,869 Program Assistant I 1.00 1.00 1.00 1.00 77,321 Project Manager 0.20 0.20 0.20 0.20 20,467 Senior Accountant 0.10 0.10 0.10 0.10 - 11,596 Senior Management Analyst 0.08 0.08 0.08 0.08 - 10,081 Senior Technologist 0.11 Street Maintenance Assistant 1.00 1.00 71,344 Street Sweeper Operator 1.63 1.63 1.63 1.63 138,399 Surveyor, Public Works 0.11 0.35 Zero Waste Coordinator 2.00 2.00 1.00 1.00 - 98,840 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FTE FY 2018 Salary Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 0.03 2.00 1.00 0.02 1.00 0.43 0.03 2.00 1.00 0.02 1.00 0.43 5,449 225,362 119,411 3,140 104,481 44,667 380,141 13.61 13.57 14.50 14.50 - 1,601,696 2.64 1.63 1.15 1.15 - 61,170 16.25 15.20 15.65 15.65 - 1,662,866 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 405 PUBLIC WORKS 3udget Reconciliation Prior Year Budget 15.65 30,622,383 31,188,923 (566,540) Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Environmental Services Division Administration Staffing Technology Fee One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Residential and Commercial Refuse Hauling and Processing Services (rate increase 5%) Debt Service: City of Sunnyvale Solid Waste Revenue Refunding Bonds Capital Improvement Funding Adjustment Los Altos Treatment Plant Rent Vacancy Street Sweeping Services ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Rents & Leases Expenditure Alignment Storm Drain Allocated Charges Adjustment Stormwater Management Fee Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement and Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (872) — (872) 309,541 ' — (400,000) 1,252,384 (409,204) — (188,552) (13,325) (30,000) 19,044 (3,650) (901) (147,920) 50,133 (5,932) (32,721) 5,560 26,420 (30,107) (65,380) (244,103) 90 — 152 12,731 214,162 (821,607) 1,140,029 (872) (872) 309,541 (1,652,384) (409,204) (175,227) 30,000 22,694 (901) (147,920) 50,133 (5,932) (32,721) 5,560 26,420 35,273 (244,103) 90 152 12,731 214,162 (1,961,636) 406 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation Total FY 2018 Base Budget Positions 15.65 Net Expenditures Revenues Refuse Fund 29,799,904 32,328,952 (2,529,048) Budget Adjustments 1 Zero Waste Plan Update and Community Outreach 2 Landfill Pipe Replacement and Groundwater Studies 3 Supplemental Pension Trust Fund Contribution 525,000 305,000 45,052 525,000 305,000 45,052 Total Budget Adjustments 875,052 875,052 Total FY 2018 Adopted Budget 15.65 30,674,955 32,328,952 (1,653,997) 3udget Adjustments Budget Adjustments -N- Positions Net Expenditures Revenues Refuse Fund 1 Zero Waste Plan Update and Community Outreach This action provides funding for professional services related to the City's waste hauling, processing, disposal, and outreach for the City's Zero Waste program. Consultant services are necessary to characterize the City's waste streams, update the City's Zero Waste program and prepare an RFP for waste management services (or a contract extension with the City's current contractor whose agreement ends in 2021). Performing these professional services and contract assistance work is a multi -year process and these services will be solicited by potential consultants. Study results completed in FY 2018 can guide the City with waste management strategies to move toward the City's sustainability and carbon reduction goals and will strengthen the City's position during contract negotiations. Also included in this budget is an additional $25,000 for Zero Waste outreach to the community. Zero Waste outreach educates and informs the community of ways to move closer to being a zero waste City. (Ongoing net costs: $25,000) Performance Results © © 0 With the studies and additional outreach, the City will be better positioned for contract negotiations and successful implementation of a new waste management services contract that aligns with the City's zero waste goals. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 407 PUBLIC WORKS 2 Landfill Pipe Replacement and Groundwater Studies 3udget Adjustments Expenditures 305,000 Net evenues Refuse Fund 0 305,000 This action replaces older pipes in the leachate system and funds studies of the groundwater system at the landfill. Aging sections of the landfill pipes must be replaced before they fail to properly dispense of methane and leachate. In addition to replacing aging pipes, studies of the groundwater and leachate system will be conducted to ensure compliance with the City's new landfill permit requirements. (Ongoing net costs: $0) Performance Results 0 0 0 This action will help ensure the leachate system continues to function safely and fulfills requirements of the City's landfill permit. 3 Supplemental Pension Trust Fund Contribution AU 0.00 This action establishes a transfer from the Refuse Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $45,052 which represents approximately 10% of the Refuse Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) 45,052 45,052 Performance Results 0 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 408 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS STORM DRAINAGE FUND Description The City's stormwater management services are funded through user fees charged to property owners of developed parcels in Palo Alto. Stormwater management activities include operation, maintenance, replacement and augmentation of the storm drainage system to ensure adequate local drainage. The Fund provides litter reduction, urban pollution prevention programs, commercial and residential rebates, and flooding emergency -response services with the goals of reducing stormwater runoff and maintaining stormwater quality protection for discharge to creeks and San Francisco Bay. Accomplishments ▪ Completed the construction of the final phase of the high -priority Channing/Lincoln Avenue Storm Drain Improvement project; installation of new 42 -inch storm drain pipes along Lincoln Avenue between Middlefield Road and Alma Street and 30 -inch pipe along Alma Street between Lincoln Avenue and Addison Avenue to reduce local street flooding. • Awarded the contract for the Matadero Creek Stormwater Pump Station project and started construction of the project to improve storm drain system performance for a 1,200 -acre low-lying area in Midtown and Palo Verde neighborhoods. The project is expected to be completed in fall 2017. ▪ Developed the Green Infrastructure framework to ensure compliance of the Municipal Regional Permit for stormwater. Initiatives ▪ Begin implementing the 13 high -priority stormwater management projects outlined in the Stormwater Management Fee ballot measure passed in April 2017. ▪ Begin implementing the Storm Drain Blue Ribbon Committee's recommendations for stormwater management programs outlined in the Stormwater Management Fee ballot measure passed in April 2017. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 409 PUBLIC WORKS • Continue to work cooperatively with San Francisquito Creek Joint Powers Authority on implementing the Bay -to -Highway 101 flood control project, providing flood protection to residents and businesses along lower San Francisquito Creek. • Assist San Francisquito Creek Joint Powers Authority with presentation of the San Francisquito Creek: Upstream to Highway 101 Project Alternatives project, ultimate project will provide flooding protection to the residents and business West of Highway 101. ▪ Continue the development of a Green Infrastructure Plan for the City to comply with new State of California stormwater regulations. ▪ Comply with new Municipal Regional Permit for stormwater regulations. Goals and Objectives GOAL 1 Effectively manage the storm drain system to ensure adequate local drainage. Objectives: ▪ Continue to assist San Francisquito Creek Joint Powers Authority (SFCJPA) with the implementation of the Bay -to -Highway 101 flood control project to protect people and property from flooding along lower San Francisquito Creek • Assist SFCJPA with the community outreach presentation associated with the Upstream to Highway 101 Project Alternatives. • Systematically clean storm drain lines to prevent backups and ponding on city streets. GOAL 2 Reduce stormwater runoff and protect the quality of waters discharged to creeks and San Fran- cisco Bay. Objectives: • Continue implementation of measures, including green infrastructure planning, to comply with the new Municipal Regional Stormwater Discharge Permit (MRP 2.0) adopted in late 2015. • Conduct regular inspections of commercial facilities, industrial facilities and construction sites to ensure compliance with stormwater discharge regulations. ▪ Implement the City's Long -Term Trash Reduction Plan in order to achieve a 70% reduction in the volume of trash entering local creeks and San Francisco Bay through local storm drains, as required in the MRP 2.0. 410 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Key Performance ti CITIZEN SURVEY - STORM DRAIN easures Goal Effectively manage the storm drainage system to ensure adequate local drainage. Objective Percent rating the quality of storm drainage good or excellent Description Purpose Increase rating given by residents for quality of storm drainage. FY 2015 Actuals 71.00% FY 2016 Actuals 75.00% FY 2017 Adopted 80.00% FY 2017 Estimated FY 2018 Adopted 80.00% 80.00% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of storm drain management. The NCS is a collaborative effort between the National Research Center, Inc. and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. To obtain feedback from residents on whether storm drains are being maintained adequately in order to determine if the program's resources are appropriate. The Department has been achieving between 71 and 80 percent satisfaction and Status is estimating to maintain an 80 percent rating, which is above the benchmark of other cities. NUMBER OF CAPITAL PROJECTS ON THE 2005 STORM DRAINAGE FEE BALLOT MEASURE COMPLETED Goal Effectively manage the storm drainage system to ensure adequate local drainage. Objective Number of projects completed (Storm Drain) Description Purpose Status To manage a capital improvement program that utilizes annual revenues and staff resources in an efficient manner in order to complete the seven capital improvement projects that were identified in the 2005 storm drainage fee ballot measure before the fee sunsets in June 2017. FY 2015 Actuals 5.00 FY 2016 Actuals 5.00 FY 2017 Adopted 7.00 FY 2017 Estimated 6.00 FY 2018 Adopted 7.00 Public Works Engineering Services staff manages a capital improvement program to increase the capacity and maintain the condition of the storm drainage system infrastructure in accordance with the 2005 storm drainage fee ballot measure approved by a majority of property owners. The storm drain system must be improved and maintained on a regular basis so that it will continue to provide service to the community. Staff has completed six of the seven capital improvement projects identified in the 2005 Storm Drainage Fee Measure, and has the final project scheduled for completion in FY 2018. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 411 PUBLIC WORKS PERCENT OF INSPECTIONS IN COMPLIANCE WITH STORMWATER REGULATIONS Goal Reduce stormwater runoff and protect the quality of waters discharged to creeks and San Francisco Bay. Objective Conduct regular inspections to ensure compliance. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percent of inspections in compliance with stormwater regulations Description Purpose Status 83.00% 83.00% 80.00% 80.00% 80.00% Watershed Protection staff conducts a comprehensive program of public outreach and education, site inspections, and enforcement actions in order to prevent pollutants from contaminating stormwater runoff. Inspections are conducted at industrial facilities, commercial facilities, construction sites and other outdoor activities. Industrial facilities include varied activities such as research, laboratories, manufacturing, and other processing. Commercial facilities typically serve the public and include categories such as photo shops, food service establishments, dry cleaners, dentists, and other sales or services. Stormwater pollution prevention activities are required by the Municipal Regional Stormwater Discharge Permit issued to the City by the San Francisco Bay Regional Water Quality Control Board. Controlling pollutant discharges to the storm drain system helps to improve the water quality in local creeks and San Francisco Bay. Watershed Protection staff conducts an inspection program for industrial and commercial facilities and assesses them for compliance with stormwater regulations. In FY 2016, inspected sites included 73 industries, 101 automotive facilities, 110 construction sites, and approximately one third of the 363 restaurants on the inspection list. The FY 2017 estimated compliance rate is 80% based on the previous year as well as data to date, indicating that many new businesses are being inspected that may not yet be aware of the requirements. Watershed Protection staff educates these businesses on what it takes to be in compliance with stormwater regulations. 412 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary ill FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIP Storm Drainage Fund 1,997,511 1,084,083 8,236,570 804,875 (7,431,695) (90.2)% Storm Drainage Administration 642,955 777,068 1,079,934 1,207,070 127,135 11.8% Storm Drainage Environmental 419,956 378,978 961,412 952,985 (8,427) (0.9)% Compliance Storm Drainage Operations and 1,763,750 1,771,220 2,162,693 3,200,530 1,037,837 48.0% Maintenance Storm Drainage Systems 132,021 138,820 140,516 144,209 3,693 2.6% Improvement Flood Control Total 4,956,193 4,150,168 12,581,125 6,309,668 (6,271,457) (49.8)% Dollars by Category Salary & Benefits Healthcare 201,833 192,406 200,270 253,686 53,417 26.7% Other Benefits 26,763 28,052 27,692 41,466 13,773 49.7% Overtime 51,113 43,463 49,429 49,429 -% Pension 198,264 259,855 290,947 406,203 115,256 39.6% Retiree Medical 59,931 57,698 63,585 66,895 3,310 5.2% Salary 881,821 945,028 1,076,742 1,428,769 352,026 32.7% Workers' Compensation 6,519 6,707 15,129 39,437 24,308 160.7% Total Salary & Benefits 1,426,245 1,533,210 1,723,794 2,285,884 562,090 32.6% Allocated Charges 760,913 761,660 1,176,104 1,428,009 251,905 21.4% Contract Services 447,347 431,506 531,379 905,379 374,000 70.4% Debt Service 404,493 373,008 949,300 949,300 -% Facilities & Equipment 5,286 7,621 7,621 - -% General Expense 16,453 22,153 179,260 148,560 (30,700) (17.1)% Operating Transfers -Out 15,463 5,970 12,112 27,463 15,351 126.7% Rents & Leases 34,895 39,079 46,201 47,482 1,281 2.8% Supplies & Material 67,054 98,514 95,000 94,726 (274) (0.3)% Capital Improvement Program 1,783,331 879,784 7,860,355 415,243 (7,445,112) (94.7)% Total Dollars by Expense Category 4,956,193 4,150,168 12,581,125 6,309,668 (6,271,457) (49.8)% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 413 PUBLIC WORKS 3udget Summary 1 FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Revenues Charges for Services 70,944 97,399 90,000 117,888 27,888 31.0% From Other Agencies 98,212 - - Net Sales 6,206,943 6,326,562 6,604,644 6,927,531 322,887 4.9% Operating Transfers -In 233,662 -% Other Revenue 63 (55) -% Other Taxes and Fines (1,403) 2,500 2,500 -% Return on Investments 158,873 178,207 129,700 129,700 - -% Total Revenues 6,435,419 6,933,986 6,826,844 7,177,619 350,775 5.1% Positions by Division CIP Storm Drainage Fund Storm Drainage Administration Storm Drainage Operations and Maintenance Storm Drainage Systems Improvement Flood Control Total Staffing Job Classification Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Director Public Works Associate Engineer Business Analyst Electrician Electrician -Lead Engineer -% 2.20 2.15 2.17 2.37 0.20 9.22% 0.69 0.65 0.60 0.80 0.20 33.33% 6.78 6.98 6.98 9.79 2.81 40.26% 0.52 0.54 0.59 0.59 10.19 10.32 10.34 13.55 3.21 31.04% FY 2015 Actuals 0.15 0.05 0.10 0.15 0.10 0.20 0.02 0.10 1.00 1.00 FY 2016 Actuals 0.15 0.05 0.10 0.15 0.10 0.20 0.10 1.00 1.00 FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FTE -% FY 2018 Salary 0.10 0.10 - 7,108 0.05 0.05 - 4,750 0.10 7,013 0.15 0.15 11,431 0.10 0.10 8,169 0.20 0.30 0.10 53,352 0.19 1.00 135,366 0.10 1.00 0.90 0.10 1.19 0.10 1.00 0.90 10,767 115,265 115,301 414 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Engineering Technician III Equipment Operator Heavy Equipment Operator Heavy Equipment Operator -Lead FY 2015 Actuals 0.20 0.54 0.90 1.15 Industrial Waste Inspector 0.19 Industrial Waste Investigator 0.99 Management Analyst 0.20 FY 2016 Actuals 0.20 0.54 0.90 1.15 0.19 0.99 0.20 FY 2017 Adopted Budget 0.25 0.54 0.90 1.15 0.19 0.80 0.20 FY 2018 Adopted Budget 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2018 Change FTE FY 2018 Salary 23,949 45,934 86,690 118,497 0.21 37,870 0.20 106,386 0.10 29,765 Manager Environmental Control 0.40 0.40 0.40 0.70 0.30 77,505 Program Manager Maintenance Operations 0.50 0.50 0.50 0.50 55,536 Manager Watershed Protection 0.20 0.20 28,475 Program Assistant II 0.60 0.60 49,868 Project Engineer 0.81 0.83 0.83 0.83 - 114,448 Project Manager 0.15 0.15 0.15 0.55 0.40 58,748 Senior Accountant 0.10 0.10 0.10 0.10 - 11,596 Senior Engineer 0.76 0.76 0.76 0.76 100,302 Senior Industrial Waste Investigator 0.10 0.10 11,381 Senior Technologist 0.02 Surveyor, Public Works - - 0.12 0.12 - 12,553 Technologist 0.30 0.30 0.30 0.30 - 44,922 Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 - 5,011 Sub -total: Full -Time Equivalent 10.14 10.12 10.14 13.35 3.21 1,487,957 Positions Temporary/Hourly 0.05 0.20 0.20 0.20 9,152 Total Positions 10.19 10.32 10.34 13.55 3.21 1,497,109 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 415 PUBLIC WORKS 3udget Reconciliation Prior Year Budget 10.34 12,581,125 6,826,844 5,754,281 Base Adjustments One Time Prior Year Expenditures Deleted Green Infrastructure Plan One Time Prior Year Expenditures Deleted Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Capital Improvement Funding Adjustment Stormwater Muni Fee Revenues Adjustments Urban Runoff Pollution Prevention Program Contribution Increase ARC Document Solutions (Print & Mail Allocated Charges Realignment) Rents & Leases Expenditure Alignment General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement and Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (50,000) (50,000) — (50,000) — (50,000) — I 70,953 (7,468,783) 27,888 9,000 (274) 1,281 93,046 34,611 (8,585) (28,649) 70,953 (7,468,783) (27,888) 9,000 (274) 1,281 93,046 34,611 (8,585) (28,649) 1,880 1,880 19,815 — 19,815 (118) 7,890 (8,008) 25,957 48,706 — (7,201,159) 25,957 48,706 35,778 (7,236,937) Total FY 2018 Base Budg 10.34 5,329,966 6,862,622 (1,532,656) Budget Adjustments 1 Watershed Protection Funding Alignment (Shift 2.21 FTE from Wastewater Treatment Fund) 2 Green Infrastructure 2.21 346,648 341,000 346,648 341,000 416 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Budget Reconciliation Positions Net Storm Drainage Expenditures Revenues Fund 3 Stormwater Management Regulatory Requirements 4 Fiber connection for creek monitors 5 Supplemental Pension Trust Fund Contribution 6 Stormwater Management Fee Allocated Charges Adjustment Total Budget Adjustments 1.00 3.21 188,189 72,828 31,037 979,702 314,997 314,997 188,189 72,828 31,037 (314,997) 664,705 Total FY 2018 Adopted Budget 13.55 6,309,668 7,177,619 (867,951) Budget Adjustments 1 Watershed Protection Funding Alignment (Shift 2.21 FTE from Wastewater Treatment Fund) 2.21 L 346,648 0 346,648 This action reallocates 2.21 FTE from the Wastewater Treatment (WWT) Fund to the Storm Drainage Fund. The Storm Drain Blue Ribbon Committee recommended that staff who are working on watershed protection activities should be funded from the Storm Drainage Fund to better align their job duties and functions with the appropriate source of funding. This will also ensure these positions are working on compliance with new Municipal Regional Stormwater Permit regulations related to watershed protection. (Ongoing net costs: $346,648) Performance Results This will align watershed protection staff with the appropriate funding source and ensure increased compliance with Stormwater regulations related to watershed protection. 2 Green Infrastructure This action provides $341,000 to develop a Green Infrastructure Plan related to Stormwater Management, as required by the new municipal regional permit, and implement the plan in subsequent years. The goals of this plan will be to shift storm drain infrastructure to more -resilient, sustainable systems that slow stormwater runoff by dispersing it to vegetated areas and promote bioretention to clean stormwater runoff. (Ongoing net costs: $341,000) Performance Results © 0 This will promote the use of stormwater runoff to water vegetated areas around the City, lessening the need to use sprinkler systems and potable water. In addition, cleaner stormwater runoff will reduce the need to futher clean the water when it gets to the WWT plant. 3 Stormwater Management Regulatory Requirements 188,189 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 417 PUBLIC WORKS 3udget Adjustments This action adds a 1.0 FTE Associate Engineer position as well as $40,000 for consulting services to ensure the City is complying with all municipal regional stormwater permit regulatory requirements that were implemented by the Regional Water Board as of January 1, 2016. The revised regulations require the creation and implementation of a green infrastructure plan, litter assessments, C3 compliance, and increased stormwater inspections. The City is currently out of compliance with the stormwater permit, specifically the increased requirements with C3, so this action will allow the City to return to compliance through increased monitoring of the permit requirements. (Ongoing net costs: $188,189) Performance Results © 0 This additional position and funding for contractual services will allow current staff to return to focusing on the operations and capital improvement projects associated with stormwater management, while the new position ensures the City is in compliance with the expanded regulations under the municipal regional stormwater permit. 4 Fiber connection for creek monitors 72,828 72,828 This action will provide funding for the ongoing cost of the fiber optic connection between storm drain pump stations and creek monitors. The monitors will be installed during the 2017 summer season and funded as part of the Storm Drain System Replacement and Rehabilitation CIP. (Ongoing net costs: $72,828) Performance Results This action will connect storm drain pump stations and creek monitors to the City's fiber optic network to increase the accuracy of sensor readings. In the future, real-time camera views during potential flash flood events will be enabled. 5 Supplemental Pension Trust Fund Contribution W 0.00 31,037 0 31,037 This action establishes a transfer from the Storm Drainage Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $31,037 which represents approximately 10% of the Storm Drainage Fund's annual pension contribution. (Ongoing net costs: $0) Performance Results 4 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 6 Stormwater Management Fee Allocated Charges Adjustment 314,997 (314,997) Consistent with City Council approval of CMR 8125: Adopt Resolution to Revise Storm Drain Rate Schedule D-1, this action will implement voter -approved changes to the Stormwater Management Fee, and increase the annual revenue estimate for the Storm Drainage Fund by approximately $315,000 to reflect rate increases approved through the ballot measure. In April 2017 the Stormwater Management fee was approved by a majority of property owners via a ballot -by - mail process, which established a base rate of $13.65 per Equivalent Residential Unit (ERU) per month along with a provision that the City Council could increase the rate on an annual basis by the local inflation rate (as measured by the Consumer Price Index) or 6 percent, whichever is less. As part of the total revenue, corresponding increases to City expenses for the City's Storm Drain costs are detailed in the respective funds throughout this document. Performance Results Implementing the voter -approved changes will help fund capital improvement projects and continue stormwater protection programs that keep infrastructure clean and at peak performance, as recommended by the Storm Drain Blue Ribbon Committee. 418 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS VEHICLE REPLACEMENT AND MAINTENANCE FUND Description The Vehicle Replacement and Maintenance Fund is an internal service fund providing fleet management services for City vehicles and heavy equipment. Timely maintenance and replacement of vehicles and equipment ensures safe, reliable, and efficient use of resources. This program also provides for safe, efficient fuel storage and dispensing facilities while pursuing alternative fuel technologies, and minimizing the pollution and carbon footprint generated by the City's vehicle fleet. Accomplishments • Delivered 52 vehicles and 11 pieces of equipment in FY 2017 to maintain safe, reliable and efficient use of resources. Initiatives ▪ A cost recovery study utilizing an independent consulting firm to evaluate the City's current vehicle replacement and allocation methodologies for operations & maintenance is anticipated to be complete in July 2017. The study will also provide recommendations for best practices, incorporating inflation factors and alternatives for managing the program. ▪ Continue to reduce the backlog of older vehicles needing to be replaced, thereby providing more efficient vehicles/equipment and reducing the City's carbon footprint. ▪ Continue implementing Fleet Operational Study recommendations by improving fleet technology and staff training and increasing the number of electric and alternative fuel vehicles/equipment in the fleet where possible. ▪ Continue to assess the on -site parts and inventory program pilot with Napa IBS. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 419 PUBLIC WORKS • Evaluate cost recovery for public compressed natural gas (CNG) sales. ▪ Begin implementation of the cost recovery study recommendations. Goals and Objectives GOAL 1 Ensure the City's vehicles, equipment, and fuel storage/dispensing facilities are safe, reliable and energy efficient to reduce Green House Gas (GHG) emissions. Objectives: ▪ Continue seeking opportunities to increase the number of electric and alternative fuel vehicles/equipment. ▪ Continue providing staff training for safe operation and maintenance of vehicles/equipment and fueling stations. ▪ Annually review and update the 5 -year vehicle/equipment replacement Capital Improvement Program to maximize cost-effectiveness, reduce GHG emissions and explore opportunities to reduce the fleet. GOAL 2 Provide cost-effective preventive maintenance and repair services. Objectives: ▪ Continue to implement Operational Study recommendations, including replacing the oldest, least efficient vehicles first; replacing with electric or alternative fuel vehicles when possible; providing continued education and training for staff; and performing fleet utilization analyses to ensure the City has a right -sized fleet. ▪ Continue analyzing the three-year, on -site parts and inventory program pilot with Napa IBS. 420 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS /Key Performance V easures PERCENT OF NON -EMERGENCY VEHICLES IN FLEET THAT ARE USING ALTERNATE FUEL OR TECHNOLOGIES Goal Ensure the City's vehicles, equipment, and storage/dispensing facilities are safe, reliable, and energy efficient. Objective Increase the usage of alternative fuels. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of alternative fuel consumption Description Purpose 26.00% 26.60% 26.00% 29.20% 29.20% The City fleet is comprised of vehicles and equipment that are primarily gasoline, diesel and compressed natural gas (cng). In order to move toward a lower emissions goal the City needs to increase the use of alternative fuels for fleet vehicles. Status The City's fleet used a total of 295,852 gallons of fuel in 2016 among unleaded, diesel and natural gas. It used 78,725 gallons of compressed natural gas which equates to 26.6% of alternative fuel use. This is anticipated to increase in FY 2017 and remain constant for FY 2018. Workload V easures FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Number of vehicles that are alternatively fueled or electric Number of vehicle repair and preventative maintenance work orders Total number of vehicles and equipment in the City's fleet 51 50 4,492 4,619 552 559 58 4,700 55 4,170 555 552 55 4,100 549 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 421 PUBLIC WORKS Dollars by Division Vehicle Operations and Maintenance 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 5,632,076 5,586,194 5,725,646 5,455,409 (270,236) (4.7)% Vehicle Replacement and Additions 2,907,952 2,993,463 6,101,627 7,837,642 1,736,014 28.5% Total 8,540,028 8,579,657 11,827,273 13,293,051 1,465,778 12.4% Dollars by Category Salary & Benefits Healthcare 280,995 295,595 337,811 369,965 32,154 9.5% Other Benefits 45,404 53,639 41,968 50,507 8,539 20.3% Overtime 11,919 6,970 56,610 56,610 -% Pension 195,023 321,560 384,271 422,535 38,264 10.0% Retiree Medical 85,238 79,467 86,962 91,489 4,527 5.2% Salary 1,196,704 1,386,350 1,391,927 1,468,804 76,877 5.5% Workers' Compensation 8,597 7,726 20,965 53,936 32,972 157.3% Total Salary & Benefits 1,823,880 2,151,307 2,320,513 2,513,846 193,332 8.3% Allocated Charges 1,151,005 1,612,792 1,385,344 1,185,639 (199,705) (14.4)% Contract Services 261,007 282,187 354,470 511,900 157,430 44.4% General Expense 63,760 57,943 66,530 66,080 (450) (0.7)% Operating Transfers -Out 1,070,249 335,294 38,394 38,394 -% Rents & Leases 112,929 177,193 183,316 189,067 5,751 3.1% Supplies&Material 1,309,357 1,121,338 1,354,300 1,169,216 (185,084) (13.7)% Transfer to Infrastructure - 31,711 263,198 - (263,198) (100.0)% Capital Improvement Program 2,747,841 2,809,892 5,899,602 7,618,910 1,719,308 29.1% Total Dollars by Expense Category 8,540,028 8,579,657 11,827,273 13,293,051 1,465,778 12.4% Revenues Charges to Other Funds 7,266,712 7,291,552 8,885,085 8,835,554 (49,531) (0.6)% Operating Transfers -In 1,305,766 478,232 - (478,232) (100.0)% Other Revenue 529,235 296,297 155,000 155,000 -% 422 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Return on Investments Total Revenues FY 2015 Actuals 217,032 8,012,979 9,085,834 9,696,617 9,168,854 (527,763) (5.4)% FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 192,219 178,300 178,300 - % Positions by Division Vehicle Operations and Maintenance Vehicle Replacement and Additions Total Staffing Job Classification Administrative Associate III Assistant Director Public Works Assistant Fleet Manager 16.82 15.86 15.86 1.40 1.40 15.86 1.40 1.40 18.22 17.26 17.26 17.26 FY 2015 Actuals 1.00 0.25 1.00 Equipment Maintenance Service 2.00 Person FY 2016 Actuals 1.00 0.25 1.00 2.00 FY 2017 Adopted Budget 1.00 0.25 1.00 2.00 FY 2018 Adopted Budget 1.00 0.25 1.00 2.00 FY 2018 Change FTE - % -% - % FY 2018 Salary 81,689 41,460 99,715 134,496 Fleet Services Coordinator 2.00 2.00 2.00 2.00 - 168,478 Management Analyst 0.20 0.20 0.20 0.20 22,231 Manager Fleet 1.00 1.00 1.00 1.00 124,072 Motor Equipment Mechanic II 6.00 6.00 6.00 6.00 571,926 Motor Equipment Mechanic -Lead 2.00 2.00 2.00 2.00 - 203,924 Project Manager 1.00 1.00 1.00 1.00 91,790 Senior Management Analyst 0.08 0.08 0.08 0.08 - 10,081 Sub -total: Full -Time Equivalent 16.53 16.53 16.53 - 1,549,862 Positions Temporary/Hourly 1.69 0.73 0.73 0.73 61,773 Total Positions 18.22 17.26 17.26 17.26 - 1,611,634 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 423 16.53 PUBLIC WORKS 3udget Reconciliation Prior Year Budget positions Expenditures Revenues Net Vehicle Replacement and Maintenance Fund 17.26 11,827,273 9,696,617 2,130,656 Base Adjustments One -Time Prior Year Expenditures and Revenues Deleted Replacement of Co -Owned Fire Truck and Flatbed Crane Installation of GPS Monitoring One -Time Prior Year Expenditures and Revenues Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Capital Improvements Projects ARC Document Solutions (Print & Mail Allocated Charges Realignment) Rents & Leases General Fund Cost Allocation Plan Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Liability Insurance Allocated Charges Adjustment Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement and Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities (27,570) (27,570) 193,333 1,451,800 (84) 5,751 (102,061) 16,676 (26,932) 43,326 (328) 46,235 (8,076) - (168,545) - 1,451,095 (478,232) (478,232) 275,192 (324,723) (49,531) 478,232 (27,570) 450,662 193,333 1,176,608 (84) 5,751 (102,061) 16,676 (26,932) 43,326 (328) 46,235 (8,076) 156,178 1,500,626 Total FY 2018 Base Budget 17.26 13,250,798 9,168,854 4,081,944 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 42,254 42,254 Total FY 2018 Adopted Budget 17.26 13,293,051 9,168,854 4,124,197 424 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Vehicle Replacement and Maintenance Fund 1 Supplemental Pension Trust Fund Contribution 42,254 This action establishes a transfer from the Vehicle Replacement & Maintenance Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $42,254 which represents approximately 10% of the Vehicle Replacement & Maintenance Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 425 PUBLIC WORKS WASTEWATER TREATMENT FUND Description The City's Regional Water Quality Control Plant (RWQCP) operates 24 hours a day to treat all wastewater from the City of Palo Alto and the five partner cities' regional service area (Mountain View, Los Altos, Los Altos Hills, Stanford, and East Palo Alto Sanitary District) and to ensure the compliance with regulations protecting the San Francisco Bay and the environment. Accomplishments • Completed an Advanced Water Purification Feasibility Study to determine feasibility of installing a reverse osmosis facility to improve recycled water quality. ▪ Initiated a recycled water strategic plan to study groundwater in northwest region of Santa Clara County, future recycled water use including indirect potable reuse of treated wastewater, and to determine feasibility and cost for the phase I I I expansion of recycled water to the Stanford Research Park. • Maintained compliance with new and comprehensive Clean Air Act and Bay Area Air Quality Management District rules and regulations for the Plant's sewage sludge incinerators. • Completed design of the sludge dewatering and truck loadout facility, awarded the construction contract, and obtained a low interest state loan to finance the project. When complete, the two sludge -burning incinerators will be retired. Initiatives • Construct the sludge dewatering and truck loadout facility which is anticipated to be completed in Fall 2019. ▪ Complete planning and design for fixed film reactor and primary sedimentation tank rehabilitation, and the lab/environmental services building as part of fulfilling the Long Range Facilities Plan. • Complete construction of the old pumping plant rehabilitation. 426 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS • Design of the Advanced Water Purification Facility (i.e. reverse osmosis) to improve recycled water quality. ▪ Determine the feasibility for indirect potable reuse in the northwest region of Santa Clara County by understanding the groundwater basin. Determine phase I I I feasibility for recycled water expansion to Stanford Research Park and South Palo Alto. Goals and Objectives GOAL 1 Protect the environment and the public's health. Objectives: • Conduct regular inspections of commercial permitees to ensure compliance with all regulations. • Complete new capital improvement projects to ensure the plant's reliability. • Conduct ongoing operation and maintenance. GOAL 2 Operate high quality, cost-effective and visually neutral facilities. Objectives: ▪ Mitigate cost increases through effective maintenance of equipment and analysis of potential operational efficiencies. GOAL 3 Expand recycled water use. Objectives: . Improved recycled water quality through source control of salt water intrusion into sanitary sewers and potential future advance treatment for recycled water. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 427 PUBLIC WORKS Key Performance ti easures DISCHARGE TESTS IN COMPLIANCE Goal Protect the environment and the public's health. Objective Maintain 99% discharge test compliance. Percent of wastewater treatment discharge tests in compliance Description Purpose Status FY 2015 Actuals 99.40% FY 2016 Actuals 99.67% FY 2017 Adopted 99.00% FY 2017 Estimated 99.00% FY 2018 Adopted 99.00% The plant has numerous effluent limits and requirements to meet as part of its NPDES discharge permit for water discharged to the south San Francisco Bay. 100 percent compliance with these limits is the goal of the City; the RWQCP normally achieves over 99 percent of compliance. The percent discharge tests in compliance is an indicator of the compliance of the RWQCP treatment system's final water with the limits established in the NPDES discharge permit. Over 99% of discharge tests are expected to be in compliance with discharge limits. PERCENT OF PASSED FISH ACUTE TOXICITY BIOASSAY TESTS Goal Protect the environment and the public's health. Objective Obtain fish acute toxicity bioassays with 100% survival. Percent of passed fish acute toxicity bioassay tests Description Purpose Status Workload V FY 2015 Actuals 100.00% FY 2016 Actuals 100.00% FY 2017 Adopted 100.00% FY 2017 Estimated 100.00% FY 2018 Adopted 100.00% Percent of acute fish toxicity bioassay tests passed with 100% survival. Fish survival in the bioassay is an indicator that plant discharges to the Bay are safe for receiving water marine life. In Fiscal Year 2016, all acute toxicity bioassay tests passed with 100% survival rate. This trend is expected to continue in FY 2017 and FY 2018. easures Millions of gallons of recycled water delivered Number of inspections performed annually (Wastewater Treatment) Millions of gallons processed by the Palo Alto's Regional Water Quality Control Plant FY 2015 Actuals 200 450 6,512 FY 2016 Actuals 230 397 FY 2017 Adopted 250 450 6,387 6,692 FY 2017 Estimated 227 400 FY 2018 Adopted 260 400 6,398 6,398 428 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Dollars by Division CIP Wastewater Treatment Fund Wastewater Treatement Systems Improvement Operations Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 3,942,615 2,792,222 25,402,299 37,988,136 12,585,837 15, 402, 559 15, 951, 637 15, 242, 863 16, 486, 893 1,244,030 150,934 508,324 4,392,669 5,138,056 745,387 FY 2018 Change % 49.5% 8.2% 17.0% 3,231,508 3,759,792 3,585,331 3,428,802 (156,528) (4.4)% 22,727,616 23,011,975 48,623,161 63,041,886 14,418,726 29.7% Dollars by Category Salary & Benefits Healthcare 1,241,619 1,196,798 1,420,684 1,391,249 (29,435) (2.1)% Other Benefits 156,364 169,747 160,221 194,084 33,863 21.1% Overtime 319,520 353,542 310,126 310,126 - -% Pension 1,161,782 1,626,688 1,959,805 2,035,334 75,529 3.9% Retiree Medical 823,896 745,965 816,321 858,810 42,490 5.2% Salary 6,046,365 6,340,815 7,366,138 7,357,411 (8,726) (0.1)% Workers' Compensation 126,044 29,874 98,482 270,879 172,396 175.1% Total Salary & Benefits 9,875,591 10,463,429 12,131,776 12,417,893 286,117 2.4% Allocated Charges 4,997,874 5,348,078 5,220,764 6,319,704 1,098,939 21.0% Contract Services 1,401,097 1,602,264 1,878,354 2,305,354 427,000 22.7% Debt Service 514,387 480,060 1,468,851 1,468,851 -% Facilities & Equipment 1,427 1,888 7,500 7,500 -% General Expense 351,575 387,514 479,483 505,029 25,546 5.3% Operating Transfers -Out 13,572 11,597 320,000 206,049 (113,952) (35.6)% Supplies & Material 1,663,018 1,962,664 1,992,773 2,050,754 57,981 2.9% Capital Improvement Program 3,909,074 2,754,480 25,123,659 37,760,752 12,637,094 50.3% Total Dollars by Expense Category 22,727,616 23,011,975 48,623,161 63,041,886 14,418,726 29.7% Revenues Charges to Other Funds 59,566 47,723 51,500 51,500 - -% From Other Agencies - - 21,340,874 34,109,880 12,769,006 59.8% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 429 PUBLIC WORKS 3udget Summary Net Sales Other Revenue Other Taxes and Fines Return on Investments Total Revenues FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 23,958,834 23,751,883 26,848,624 27,139,594 290,970 102,619 3,010 - 427,000 427,000 1,000 19,000 4,000 4,000 - 251,940 227,383 199,200 187,620 (11,580) (5.8)% 24,373,959 24,049,000 48,444,198 61,919,594 13,475,396 27.8% FY 2018 Change % -% -% Positions by Division CIP Wastewater Treatment Fund Wastewater Treatement Systems Improvement Operations Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Total Staffing Job Classification Account Specialist Accountant Administrative Associate II Assistant Director Public Works Assistant Manager WQCP Associate Engineer Buyer Chemist Chief Sustainability Officer Deputy Chief/Fire Marshal Electrician Electrician -Lead Environmental Specialist Hazardous Materials Inspector 0.30 0.30 1.30 1.30 -% 56.13 55.69 56.36 56.16 (0.20) (0.35)% 0.74 13.49 0.64 0.59 13.74 15.22 0.59 13.21 -% (2.01) (13.21)% 70.66 70.37 73.47 71.26 (2.21) (3.01)% FY 2015 Actuals 0.15 0.25 2.00 0.75 2.00 1.35 1.00 3.00 0.05 0.04 2.90 1.00 1.00 0.02 FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget 0.15 0.10 0.10 0.25 0.25 0.25 2.00 2.00 2.00 0.75 0.75 0.65 (0.10) 2.00 2.00 2.00 1.35 1.80 1.80 1.00 3.00 3.00 3.00 - 306,678 0.04 0.04 0.04 - 7,266 2.90 2.90 2.90 312,230 1.00 1.00 1.00 115,265 1.00 - - - 0.02 0.02 0.02 - 3,140 FY 2018 Change FTE FY 2018 Salary 7,108 23,748 152,419 126,736 270,400 204,756 430 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Industrial Waste Inspector Industrial Waste Investigator Laboratory Technician WQC Maintenance Mechanic Management Analyst FY 2015 Actuals 2.80 0.80 3.00 7.00 FY 2016 Actuals 2.80 0.80 3.00 7.00 FY 2017 Adopted Budget 2.80 0.35 3.00 FY 2018 Adopted Budget 2.59 0.15 3.00 FY 2018 Change FTE (0.21) (0.20) FY 2018 Salary 245,206 15,958 274,298 0.67 0.57 (0.10) 57,952 Manager Environmental Control 1.50 1.50 1.50 1.20 (0.30) 137,760 Program Manager Laboratory Services 1.00 1.00 1.00 1.00 - 138,008 Manager Water Quality Control 1.00 1.00 1.00 1.00 178,069 Plant Manager Watershed Protection 0.95 0.95 0.95 0.75 (0.20) 106,782 Plant Mechanic - - 7.00 7.00 - 702,932 Program Assistant II 2.00 2.00 2.00 1.40 (0.60) 116,359 Project Engineer 1.00 1.00 1.00 1.00 - 137,889 Project Manager 1.00 0.60 (0.40) 65,096 Senior Accountant 0.10 0.10 0.10 0.10 11,596 Senior Buyer 1.00 1.00 - 101,361 Senior Chemist 1.00 1.00 1.00 1.00 - 113,600 Senior Engineer 1.00 1.00 3.00 3.00 - 357,261 Senior Industrial Waste Investigator 0.99 0.99 0.99 0.89 (0.10) 101,291 Senior Management Analyst 0.13 0.13 0.13 0.13 15,403 Senior Mechanic 1.00 1.00 1.00 1.00 107,969 Senior Operator WQC 6.00 6.00 6.00 6.00 687,429 Senior Technologist 1.00 1.00 1.00 1.00 134,597 Storekeeper 1.00 1.00 1.00 1.00 73,992 Supervisor WQCP Operations 3.00 3.00 3.00 3.00 - 343,013 Technologist 0.70 0.70 0.70 0.70 104,818 WQC Plant Operator II 16.00 16.00 16.00 16.00 1,616,365 Sub -total: Full -Time Equivalent 68.48 68.43 71.05 68.84 (2.21) 7,474,750 Positions Temporary/Hourly 2.18 1.94 2.42 2.42 - 205,299 Total Positions 70.66 70.37 73.47 71.26 (2.21) 7,680,049 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 431 PUBLIC WORKS 3udget Reconciliation Prior Year Budget 48,623,160 48,444,198 178,962 Base Adjustments Replace Flatbed Crane Truck One Time Prior Year Expenditures Deleted Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Capital Improvement Projects Liquid Waste Hauler and Tributary Agency Partner Contribution Adjustments Wastewater Treatment Plant Chemicals, Materials and Supplies Bay Area Clean Water Agencies Nutrient Study Technology equipment for new employees Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment Information Technology Allocated Charges Adjustment Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Liability Insurance Allocated Charges Adjustment Print & Mail Allocated Charges Adjustments Public Works Administration Allocated Charges Adjustment Public Works Services - Ground Allocated Charges Adjustment Refuse Sales Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Stormwater Management Fee Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement and Maintenance Allocated Charges Adjustment Wastewater Sales Allocated Charges Adjustment (320,000) — (320,000) 622,665 12,631,364 59,799 35,000 (7,054) 427,000 (1,818) 246,079 386,667 (110,723) 233,376 826 26,420 310 (20,147) - (320,000) — (320,000) — 622,665 12,757,426 (126,062) 290,970 (290,970) 427,000 59,799 35,000 (7,054) (1,818) 246,079 386,667 (110,723) 233,376 826 26,420 310 (20,147) 984 984 1,659 1,659 391,782 391,782 (55,448) (55,448) (2,845) — (2,845) 432 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation Positions Expenditures Revenues Net Wastewater Treatment Fund Adjustments to Costs of Ongoing Activities — 14,865,896 13,475,396 1,390,500 Total FY 2018 Base Budget 73.47 63,169,056 61,919,594 1,249,462 Budget Adjustments 1 Watershed Protection Funding Alignment (Shift 2.21 FTE from Wastewater Treatment Fund 2 Supplemental Pension Trust Fund Contribution 3 Senior Industrial Waste Investigator Pay Scale Adjustment Total Budget Adjustments (2.21) (346,648) 210,478 9,000 (127,170) (346,648) 210,478 9,000 (127,170) Total FY 2018 Adopted Budget 71.26 63,041,886 61,919,594 1,122,292 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 433 PUBLIC WORKS 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Wastewater Treatment Fund 1 Watershed Protection Funding Alignment (Shift 2.21 FTE from Wastewater Treatment Fund _ -2.21 (346,648) 0 (346,648) This action reallocates 2.21 FTE from the Wastewater Treatment (WWT) Fund to the Storm Drainage Fund. The Storm Drain Blue Ribbon Committee recommended that staff who are working on watershed protection activities should be funded from the Storm Drainage Fund to better align their job duties and functions with the appropriate source of funding. This will also ensure these positions are working on compliance with new Municipal Regional Stormwater Permit regulations related to watershed protection. (Ongoing net savings: $346,648) Performance Results This will align watershed protection staff with the appropriate funding source and ensure increased compliance with Stormwater regulations related to watershed protection. 2 Supplemental Pension Trust Fund Contribution This action establishes a transfer from the Wastewater Treatment Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $210,478 which represents approximately 10% of the Wastewater Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results 4 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 3 Senior Industrial Waste Investigator Pay Scale Adjustment ANI This action provides funding to adjust the payscale for the Senior Industrial Waste Investigator job classification. This reclassification aligns the position pay range according to the SEIU definitions for roles with supervising responsibilities. (Ongoing net costs: $9,000) Performance Results No impact to current services levels are anticipated as a result of this adjustment. 434 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET in sound financial condition. UTILITIES Mission Statement The City of Palo Alto Utilities' mission is to provide safe, reliable, environmentally sustainable and cost- effective services. Purpose The purpose of the City of Palo Alto Utili- ties is to provide high quality, cost-effec- tive electric, gas, fiber optics, water and wastewater collection services; promote effective energy and water effi- ciency programs; proactively manage infrastructure needs and replace deterio- rated or aging facilities with new technolo- gies to ensure safe and reliable delivery of services; and ensure the City's utilities are UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 435 UTILITIES GENERAL MANAGER Edward K. Shikada P ELECTRIC & WGW OPERATIONS 3.00 Administrative Associate II 1.00 Assistant Director Utilities Operations 1.00 Business Analyst 1.00 Cathodic Techician 1.00 Cathodic Protection Tech -Asst 2.00 Cement Finisher 5.00 Coordinator Utilities Projects 3.00 Electrician Assistant I 1.00 Electric Equipment Technician 7.00 Heavy Equipment Operator 4.00 Heavy Equipment Operator / Installer Repairer 2.00 Inspector, Field Services 11.00 Lineperson / Cable Splicer 4.00 Lineperson / Cable Splicer -Lead 2.00 Maintenance Mechanic Welding 1.00 Metering Technician- Lead 3.00 Metering Technician 1.00 Manager Electric Operations 1.00 Manager WGW Operations 2.00 Overhead/Underground Troubleman 1.00 Program Assistant 1.00 Restoration Lead 2.00 SCADA Technologist 1.00 Senior Mechanic 1.00 Senior Utilities Field Service Rep 2.00 Senior Water System Operator 5.00 Street Light, Traffic Signal & Fiber Technician 2.00 Street Light, Traffic Signal & Fiber Technician -Lead 6.00 Substation Electrician 2.00 Substation Electrician -Lead 2.00 Underground Inspectors 1.00 Underground Inspector -Lead 2.00 Utilities Comp Tech 1.00 Utilities Comp Tech -Lead 5.00 Utilities Field Service Rep 11.0D Utilities Installer/Repairer 5.00 Utilities Install/Rep-Lead 3.00 Utilities Install/Rep-Welding 2.00 Utilities Install/Rep-Welding-Lead 1.00 Utilities Safety Officer 5.00 Utilities System Operator 12.00 Utilities Supervisor 3.00 Utilities Locator 4.00 Water Systems Operator II 1.0 Gas & Water Meter Measurement and Control Technician -Lead 4.0 Gas & Water Meter Measurement and Control Technician UTILITIES ADMINISTRATION 1.00 Administrative Assistant 1.00 Administrative Associate II 3.00 Business Analyst 1.00 Compliance Manager 1.00 Coordinator, Utilities Projects 0.50 Program Assistant 1.00 Manager Communications 1.00 Manager Utilities Telecom 1.00 Principal Business Analyst 2.00 Senior Business Analyst 1.00 Senior Resource Planner 1.00 Strategic Business Manager 1.00 Chief Operating Officer CUSTOMER SUPPORT SERVICES 1.00 Assistant Director Utilities Customer Support Services 2.00 Customer Service Specialist -Lead 7.00 Customer Service Representative 2.00 Customer Service Specialist 1.00 Manager, Utilities Credit and Collections 6.00 Meter Reader 1.00 Meter Reader -Lead 1.00 Manager Customer Service 2.00 Credit and Collections Specialist ELECTRIC & WGW ENGINEERING 1.00 Administrative Associate II 1.00 Assistant Director Utilities Engineering 2.00 Business Analyst 2.00 Electric Project Engineer 4.00 Engineer 1.00 Engineering Manager - Electric 1.00 Engineering Manager- WGW 3.00 Engineer Technician III 3.00 Inspector, Field Services 3.00 Power Engineer 5.00 Project Engineer 4.00 Senior Electrical Engineer 5.00 Senior Project Engineer 1.00 Supervisor, Electric Project Engineer 5.00 Utilities Engineer Estimator 1.00 Utilities Engineer Estimator -Lead RESOURCE MANAGEMENT 1.00 Assistant Director, Resource Management 1.00 Administrative Assoc II 1.00 Business Analyst 3.00 Key Account Representative 1.00 Manager, Utility Program Services 6.00 Resource Planner 5.00 Senior Resource Planner 3.00 Marketing Program Administrator FY 2018 POSITION TOTALS 244.25 - Full-time 11.38 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 436 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Description Palo Alto is the only city in California that offers a full array of utility services to its citizens and businesses. Because of this, the City has a unique opportunity to partner with the Palo Alto community to enjoy the benefits and achievements of reliable, home-grown, and environmentally -focused utilities. Palo Alto has a tradition of over 100 years of successful public utility operations. It is a tradition that continues to provide the Palo Alto community with safe and reliable utilities service, local decision -making over policies, utility rate -making, environmental programs, and customized services. The City of Palo Alto Utilities (CPAU) continues to focus on customer service, infrastructure reliability, regulatory compliance and cost containment. Marketing of energy and water efficiency, increasing renewable energy supplies and promoting technological development for utility efficiency services continue to be focal points, especially in light of the City Council's environmental sustainability priority and state mandated efficiency goals. ADMINISTRATION Utilities Administration is responsible for the overall management of the CPAU including com- munication, regulatory compliance, strategic planning, budget coordination, legislation and reg- ulatory policy analysis, and personnel and administrative support to the entire Department. CUSTOMER SUPPORT SERVICES This group annually bills $250 million for the City's electric, natural gas, water, commercial fiber optic, wastewater collection (operated by CPAU), storm drain and refuse (operated by Public Works) services; operates the Customer Service Call Center with 75,000 annual customer inter- actions; reads 90,000 utility meters per month; implements Credit and Collection policies and financial assistance programs. ENGINEERING Engineering is responsible for managing all phases of CPAU's capital improvement projects including providing new or upgrading existing service to customers, and replacing and rehabili- tating the City's electric, fiber, water, gas, and wastewater distribution systems. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 437 UTILITIES OPERATIONS Utilities Operations is responsible for the operations, maintenance, and emergency response for the electric, fiber, water, gas and wastewater distribution systems. RESOURCE MANAGEMENT Resource Management is responsible for: the long-term resource acquisition plan, including electricity, natural gas, and water; contract negotiations to acquire renewable resources; finan- cial planning; rate development; energy efficiency and water conservation programs; and man- agement of key accounts. Accomplishments • Increased the City's Renewable Portfolio Standard (RPS) from 32% to 53% of retail energy sales with the addition of 80 MW of solar to the City's portfolio. Remaining power was carbon neutral, primarily using hydropower but with some purchases of Renewable Energy Credits (RECs). ▪ Achieved drought water savings of 24% compared to the first drought year in 2013, far surpassing the 10% voluntary water reduction goal established by the State Water Resources Control Board. • Added new electric service to new buildings and other major improvements in the Stanford Hospital/Lucille Packard Hospital area. • Implemented a new interactive response phone system to enable automated 24x7 communication for Utility customers offering bill balance, payment acceptance and customer service feedback. ▪ Completed substation security measures at one of the nine electric substations, with two remaining to be done. ▪ Completed the design of water main replacement project WMR 26 to replace approximately 11,000 linear feet of water main pipelines, 200 service pipelines, and 40 fire hydrants. • Repaired and/or replaced over 202 laterals with structural damage. • Surveyed, inspected, and cleaned 3,397 out of 18,141 City -owned sewer laterals. On average, the City surveys and inspects between 3,200 - 4,200 per year. ▪ Received and responded to a total of 944 requests for service, including power outages, street light outages, and low hanging wires for example. Of those 944 requests, 124 of them were service disconnect & reconnect requests. ▪ Replaced and reconfigured a large portion of the underground facilities in the downtown area. The estimated completion date of this project is the fall of 2017. • Moody's upgraded the City's Water Enterprise bond rating from Aa2 to Aa1, a rare event for water operations. 438 UTILITIES • " ITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Initiatives ▪ Capital Improvement Programs: Continue replacement of aging infrastructure on Electric, Gas, Fiber, Wastewater Collection, and Water systems; develop a long range master infrastructure plan for Gas and Water utilities. ▪ Downtown improvement projects: Water Main Replacement 26 - begin construction; Gas Main Replacement 22 - begin construction; and University Ave Improvement - complete design, coordinate with other departments and provide community outreach to general public and businesses. ▪ Update Utilities Strategic Plan to engage stakeholders and align resources and activities with City's priorities of civic engagement, innovation and sustainability. • Bring remaining solar projects online to bring RPS-eligible renewable energy share of portfolio to 60% of retail sales from 2017 forward, with remaining energy supplied by carbon -free hydroelectric power. • Implement the Carbon Neutral Gas plan to achieve a carbon neutral gas supply portfolio. • Launch Net Energy Metering (NEM) successor program to continue promoting installation of solar photovoltaic systems while providing fair compensation for local solar generation. ▪ Develop a "Dig Once" policy or ordinance to support the expansion of broadband in Palo Alto and to preserve City streets and other critical infrastructure. • Upgrade Utilities customer self-service website to allow for mobile optimized viewing, new self-service functionalities, recurring payment and enhanced security. ▪ Expand efforts to compete for the $5 million Georgetown University Energy Prize by reducing energy consumption through innovation, education and community participation. • Enhance customer feedback mechanisms through variety of survey formats, feedback forms, and different communication channels. • Complete smart grid assessment for advanced metering infrastructure (AMI); develop a long term technology roadmap with an implementation plan. ▪ Complete business requirements and issue request for proposal for new Utilities Customer Information and Billing system. • Develop education programs/materials to raise customer awareness on Public Power, Natural Gas, water and energy efficiency. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 439 UTILITIES Key Performance ti easures COMPARABLE AND COST-EFFECTIVE SERVICES Goal Ensure fiscally sound and cost-effective services Objective Reduce the cost of delivering services through best management practices. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Palo Alto's average residential monthly utility bill above/below the median of neighboring cities Description Purpose Status (7.00)% (6.80)% (6.80)% (6.80)% (6.80)% This compares the average residential monthly utility bill which includes electricity, gas, water, and wastewater services to the nearby communities (Santa Clara $214.80, Hayward $255.52, Los Altos $264.04, Mountain View $273.31, Redwood City $325.81, and Menlo Park $333.97). This measure compares the City's average utility rates charged to residents to other comparable cities (e.g., similar size, similar commodity purchase options, similar geography). Palo Alto's electric rates are significantly lower than PGE and slightly higher than Santa Clara. Natural gas rates are lower than surrounding communities due to PGE increasing its distribution rates for capital improvement and maintenance. Water rates are higher than many neighboring communities primarily because of differing system characteristics and levels of infrastructure investment, but also because some communities have different sources of supply. Palo Alto's water supply comes from the SFPUC who is in the middle of a $4.6 billion improvement project, and Palo Alto is investing more than other areas in improving local distribution pipelines and enhancing emergency water supply system. 440 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES CUSTOMER SATISFACTION Goal Provide excellent customer service Objective Percent rating services (electric, gas, wastewater, and water) "Good" or Excellent" Description Purpose Status Workload Maintain a high level of customer satisfaction, equal to or greater than 83 percent of Palo Alto citizens rating satisfaction of utility services as "Excellent" or "Good" in the National Citizen Survey. FY 2015 Actuals 84.00% FY 2016 Actuals 83.25% FY 2017 Adopted 85.00% FY 2017 Estimated 85.00% FY 2018 Adopted 85.00% The National Citizen Survey (NCS) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The NCS was developed by NRC to provide a statistically valid survey of opinions about community and services provided by local governments. The survey results may be used by staff, elected officials and other stakeholders for community planning and resource allocation, program improvement and policy -making. There are ten California communities participating in the survey. The best way to get feedback on whether our customers are satisfied with the nature, extent and delivery of services we provide them is to ask outright, using random -selection survey processes that include a good cross-section of our customer base. Results are statistically weighted to reflect the proper demographic composition of the entire community. A total of 744 completed surveys were obtained, providing an overall response rate of 26 percent. Typically, response rates obtained on citizen surveys range from 25 percent to 40 percent. From Fiscal Year 2012 to Fiscal Year 2016, Utilities has met its target of 83 percent. Measures Total cost of Capital Improvement Program annually (Millions) FY 2015 Actuals $27.00 3udget Summary Im 1 Dollars by Fund Electric Fund - Operating Electric Supply Fiber Optics Gas Fund - Operating Gas Supply Wastewater Collection FY 2015 Actuals FY 2016 Actuals $22.20 FY 2016 Actuals FY 2017 Adopted $42.90 FY 2017 Adopted Budget FY 2017 Estimated $24.40 FY 2018 Adopted Budget FY 2018 Adopted FY 2018 Change $ $26.20 FY 2018 Change % 47,565,953 53,504,506 73,204,664 69,158,197 (4,046,468) (5.5)% 91,302,629 85,918,737 101,478,975 107,008,613 5,529,638 5.4% 1,999,420 2,574,599 4,132,432 4,144,473 12,040 0.3% 22,825,964 19,079,098 30,585,351 26,768,899 (3,816,453) (12.5)% 11,543,034 9,061,954 14,363,841 17,157,301 2,793,460 19.4% 16,387,816 19,271,590 23,434,612 19,173,803 (4,260,809) (18.2)% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 441 UTILITIES 3udget Summary Water Fund Total Revenues FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 34,451,902 42,098,850 57,864,802 47,487,138 (10,377,663) FY 2018 Change % (17.9)% 226,076,718 231,509,334 305,064,677 290,898,423 (14,166,254) (4.6)% Charges for Services 529,927 438,985 270,000 270,000 - -% Charges to Other Funds 592,102 985,530 682,265 518,662 (163,602) (24.0)% From Other Agencies 534,328 636,666 576,632 576,632 -% Net Sales 196,794,497 197,161,475 228,776,506 234,641,566 5,865,060 2.6% Operating Transfers -In 751,521 481,233 2,922,786 3,977,536 1,054,750 36.1% Other Revenue 11,909,526 11,260,334 18,468,731 14,251,610 (4,217,121) (22.8)% Other Taxes and Fines 112,392 420,867 - - - -% Property Taxes 76 -% Return on Investments 4,442,020 3,969,933 4,442,200 4,442,200 - -% Total Revenues 215,666,312 215,355,098 256,139,120 258,678,207 2,539,087 1.0% Positions by Fund Electric Fund 114.26 Fiber Optics Fund 7.24 Gas Fund 52.80 Utilities Administration Fund 19.52 Wastewater Collection Fund 29.57 Water Fund 48.38 Total 271.77 116.38 113.32 6.76 6.82 52.16 52.55 18.12 18.22 29.74 29.17 46.15 47.99 269.31 268.06 111.23 (2.09) (1.84)% 7.60 0.78 11.50% 53.11 0.56 1.06% 19.21 0.99 5.43% 29.00 (0.16) (0.56)% 47.90 (0.09) (0.18)% 268.05 (0.01) (0.00)% 442 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES ELECTRIC FUND Description On January 16, 1900, the City of Palo Alto began operation of its own electric system. A steam engine was the initial source of the City's electricity, and was replaced by a diesel engine in 1914. As demand for electricity and the population continued to grow, the City of Palo Alto Utilities (CPAU) connected to the Pacific Gas and Electric distribution system and purchased power from additional sources. The integrity of the infrastructure required for achieving a high level of reliability and value for our customers is of paramount importance to CPAU. The Electric Fund plans to enhance the customer service connection experience, increase energy efficiency participation, and increase the percentage of electric supply obtained from renewable energy supplies. The City has entered into a number of contracts with producers of wind, landfill gas, and solar energy for more than 15 -year terms. Accomplishments ▪ Increased renewable supply sources secured through competitive solicitation. The City's qualifying supply for the State's Renewable Portfolio Standard (RPS) will rise from 32% percent of retail sales in 2016 to an estimated 53% by the end of fiscal year 2017. The City's RPS is projected to increase to 60% by the end of fiscal year 2018. ▪ Continued to focus on local generation. Received five PaloAltoCLEAN program applications, achieved full subscription of the PV Partners commercial and residential solar rebate programs, and established a plan for local generation compensation after Palo Alto reaches its net metering cap. ▪ Continued evaluation of electrification programs, including promotion and implementation of Heat Pump Water Heating and Space Heating pilots. ▪ Palo Altans saved 4 million kWh as a result of utility energy efficiency programs. Increased uptake for existing programs, particularly the Home Efficiency Genie for residents and the Multi -Family Plus program, a direct -install program for multi -family structures. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 443 UTILITIES • Completed the electric cost of service study which resulted in significant updates to electric rate structures, effective July 1, 2016. ▪ Completed substation security measures at one out of the nine electric substations, with two remaining to be done in fiscal year 2019. ▪ Updated the ten-year electric efficiency goals for 2018 to 2027 with a cumulative ten- year electric efficiency savings of 5.7% or 54,900 MWh of the City's projected load. • Participated, with other electric utilities (SVP & PG&E), in negotiations with the Peninsula Corridor Joint Powers Board (PCJPB) on development of guidelines for utility facilities that cross the Caltrain right of way from San Francisco to San Jose that need to be moved to facilitate electrification of railway trains. Successfully convinced PCJPB and the California Public Utilities Commission that overhead facilities are allowed and undergrounding of facilities is not required. ▪ Updated Rule and Regulation 27, Generating Facility Interconnection to keep pace with changing inverter technology. • Completed the planning of facilities at Hopkins and Colorado Substations that will improve service reliability and meet future capacity needs brought on by growth in the Stanford Hospital area. Initiatives • Bring remaining solar projects online to bring RPS-eligible renewable energy share of portfolio to 60% of retail sales from 2017 forward, with remaining energy supplied by carbon -free hydroelectric power. • Establish new ten year energy efficiency goals. Establish new efficiency programs, including new behavioral savings and facility management training programs. Increase uptake for commercial efficiency programs. • Continue to reduce barriers to building electrification and electric vehicle adoption, build on existing electrification programs, and evaluate new programs. ▪ Expand effort to lower greenhouse gas emissions through electrification of the transportation sector such as encouraging adoption of electric vehicles. • Develop new solar programs under the Local Solar Plan. Bring PaloAltoCLEAN projects online, evaluate sites for the community solar program, and complete a smooth transition from net metering to the replacement local generation compensation program once the net metering cap is reached in 2017 or 2018. ▪ Continue to offer electric safety education presentations to school and community groups. • Continue discussions on building a second transmission line to provide electric service to Palo Alto. ▪ Replace aging substation facilities and increase electric system capacity in the Colorado/ Hopkins/Quarry load areas to meet projected load growth. • Improve efficiency of Utility Electric System with installation of Power Factor correction capacitor banks. 444 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES • Add new facilities to meet the electric loads proposed by the VA Hospital for their site upgrades. ▪ Relocate/reconstruct City's electric and communication facilities as necessary to facilitate the electrification of the Caltrain system. ▪ Complete General Order 95, 128 and 174 Inspection and Maintenance related to electrical overhead, underground and substation facilities. • Rebuild underground facilities in District 20 (near Channing, Center, Hamilton, Lincoln) and underground District 46 (near Charleston and El Camino Real). ▪ Complete the pole inspection and replacement program for each fiscal year. ▪ Continue to plan and replace electric facilities before they reach the end of their useful life to maintain high system reliability. Goals and Objectives GOAL 1 Provide safe and reliable delivery of electric services to our customers. Objectives: ▪ Develop a plan to complete a second electric transmission line source to improve service reliability. ▪ Provide exceptional system reliability. • Reduce the backlog of infrastructure assets whose ages are beyond their useful lives. GOAL 2 Increase environmental sustainability and promote efficient use of resources. Objectives: ▪ Achieve the ten-year goal for electric energy efficiency of 5.7 percent of the electric load by 2027. • Measure actual electric energy efficiency achievement. • Increase the penetration of local solar installations so that 4% of the City's energy use is generated by local solar systems by 2023. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 445 UTILITIES Key Performance Measures ENVIRONMENTAL SUSTAINABILITY Goal Support environmental sustainability and promote efficient use of resources Objective Achieve Renewable Portfolio Standard (RPS) of at least 52% percent by 2017. Percent of retail electric sales volume provided by renewable supply resources under long-term PPAs Description Purpose Status SYSTEM RELIABILITY Goal Objective Average duration of customer outages in minutes as reported using industry guidelines Description Purpose Status FY 2015 Actuals 25.70% FY 2016 Actuals 31.80% FY 2017 Adopted 52.30% FY 2017 Estimated 57.50% FY 2018 Adopted 60.00% This measures the fraction of the City's retail electric sales volume that is provided by renewable supply resources that are under long-term agreement. The California Renewable Energy Resources Act (SBX1-2) requires that utilities supply 33 percent of their total retail electric sales volume with eligible renewable energy resources by 2020. The City's internal target, established by the Long- term Electric Acquisition Plan (LEAP), was to meet at least 33 percent by 2015. In March 2013, the City also adopted a 100 percent carbon neutral electric supply portfolio target. The City established a target to have a 33% renewable portfolio by 2015; however, the City was still unable to reach this target in fiscal year 2016. Early estimates for fiscal year 2017 are that the City will achieve the target of 57.5% through the execution of additional long-term renewable energy supply agreements, and through the procurement of short-term renewable energy certificates (RECs). The City currently meets its 100% carbon neutral electric supply portfolio target established in 2013, primarily through long-term renewable energy supply agreements, supplemented by short-term REC purchases. Provide safe and efficient delivery of electric services to our customers. Provide exceptional system reliability. FY 2015 Actuals 46.85 FY 2016 Actuals 39.48 FY 2017 Adopted 60.00 FY 2017 Estimated 39.48 FY 2018 Adopted 60.00 System Average Interruptible Duration Index (SAIDI) is a measure of outage duration. It measures the number of minutes over the year that the average customer is without power. Reliability indices were introduced in order to keep track of utility performance. This information will help Utilities prioritize capital and operating spending so that reliability can be improved without increasing costs. Despite continuous lineperson and system operator vacancies, The Electric Utility continues to meet the goal of average customer outages being 60 minutes or less in duration for the average customer by minimizing the number of outages and customers directly affected. This can be attributed to the Department's ongoing efforts for infrastructure replacement, outage isolation improvements, system maintenance, and improved response times. The adopted fiscal year 2017 number of 29 minutes was an error and has been corrected to 60 minutes in this document. 446 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES ENVIRONMENTAL SUSTAINABILITY - SOLAR Goal Objective Cumulative installed capacity of photovoltaic (PV) systems measured in megawatts (MW) Description Purpose Status Workload V Support environmental sustainability and promote efficient use of resources. Increase the penetration of local solar installations. FY 2015 Actuals 6.00 FY 2016 Actuals 7.70 FY 2017 Adopted 8.50 FY 2017 Estimated 10.00 FY 2018 Adopted 13.50 This represents the cumulatively installed capacity of PV systems in Palo Alto, measured in MW. It includes PV systems installed prior to the passage of Senate Bill 1 (SB1), which enacts the Million Solar Roofs Initiative and expands upon the current California Solar Initiative (CSI) and the Energy Commission's New Solar Homes Partnership (NSHP). The California Million Solar Roofs Bill (SB1) requires an expanded funding commitment by all California electric utilities, with a Statewide goal to add 3,000 MW of new PV systems over ten years. In addition to complying with state law, PV installations will benefit the environment and expand flexibility to Palo Alto's electric generation portfolio. This measure also supports the City achieving a 100 percent carbon neutral electric supply portfolio and meeting 4% of the City's electricity needs through solar by 2023. Rebate funds for residential solar have been fully reserved, and Staff expects the commercial funds to be reserved well before the 2017 goal set by SB1. With the costs of PV systems steadily going down, along with the added incentive of available rebates, staff anticipates more residential and commercial construction projects to include installation of these systems. ensures Number of Customer Accounts (Electric) Number of momentary outages Percent of residents surveyed who rate the quality of the Electric Utility 83 86 88 88 as "Good" or "Excellent" FY 2015 Actuals 29,299 1 FY 2016 Actuals 29,304 26 FY 2017 Adopted 29,299 0 FY 2017 Estimated 29,300 0 FY 2018 Adopted 29,300 0 88 Total Number of Outages 19 26 20 19 19 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 447 UTILITIES 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIP Electric Fund 11,727,427 14,087,807 26,128,692 21,175,750 (4,952,942) (19.0)% Electric Administration 20,476,339 22,014,672 25,376,584 26,286,978 910,394 3.6% Electric Customer Service 1,548,851 2,110,437 2,226,652 2,300,532 73,881 3.3% Electric Demand Side Management 3,559,586 3,724,006 6,817,126 6,992,874 175,748 2.6% Electric Engineering (Operating) 1,405,600 1,592,025 1,841,173 1,980,111 138,938 7.5% Electric Operations and 10,716,881 11,523,884 13,735,487 13,522,822 (212,665) (1.5)% Maintenance Electric Resource Management 89,457,201 84,370,412 98,557,925 103,907,742 5,349,817 5.4% Total 138,891,885 139,423,243 174,683,639 176,166,809 1,483,170 0.8% Dollars by Category Salary & Benefits Healthcare 1,858,579 1,767,659 2,211,278 2,270,685 59,408 2.7% Other Benefits 294,915 325,666 257,033 323,575 66,542 25.9% Overtime 803,397 978,506 492,003 492,003 - -% Pension 1,851,677 2,674,415 3,238,683 3,529,404 290,721 9.0% Retiree Medical 1,541,657 1,417,176 1,537,264 1,617,277 80,014 5.2% Salary 10,260,259 10,639,784 12,245,028 12,696,026 450,998 3.7% Workers' Compensation 241,886 254,447 157,312 405,828 248,516 158.0% Total Salary & Benefits 16,852,370 18,057,652 20,138,601 21,334,799 1,196,198 5.9% Allocated Charges 3,997,504 4,708,298 8,829,184 9,120,926 291,742 3.3% Contract Services 3,083,615 3,670,436 7,017,914 6,849,914 (168,000) (2.4)% Debt Service 8,940,084 8,889,294 8,957,186 8,782,300 (174,886) (2.0)% Equity Transfer 11,412,000 11,659,000 12,035,000 12,754,000 719,000 6.0% Facilities & Equipment 2,190 44,475 44,475 -% General Expense 2,153,071 1,826,521 3,930,817 3,380,080 (550,737) (14.0)% Operating Transfers -Out 661,061 177,323 255,269 400,940 145,671 57.1% Rents&Leases 4,136,105 5,301,644 5,439,572 5,603,447 163,875 3.0% Supplies & Material 677,677 665,283 873,097 871,207 (1,890) (0.2)% Transfer to Infrastructure 273,476 -% Utility Purchase 78,380,327 73,439,746 86,440,735 91,705,000 5,264,265 6.1% 448 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Capital Improvement Program Total Dollars by Expense Category Total Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services 3udget Summary FY 2015 Actuals 8,598,071 FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ 10,752,379 20,721,789 15,319,720 (5,402,068) 138,891,885 139,423,243 174,683,639 176,166,809 1,483,170 FY 2018 Change % (26.1)% 0.8% Revenues Charges for Services 421,977 320,308 230,000 230,000 -% Charges to Other Funds 305,151 290,667 289,096 308,566 19,470 6.7% Net Sales 112,001,079 110,604,293 131,990,403 136,139,180 4,148,777 3.1% Operating Transfers -In 547,139 259,400 2,678,768 3,465,100 786,332 29.4% Other Revenue 7,865,325 8,808,047 15,514,731 11,029,000 (4,485,731) (28.9)% Other Taxes and Fines 112,392 420,867 - - - -% Property Taxes 76 - % Return on Investments 2,414,464 2,039,748 2,507,700 2,507,700 -% Total Revenues 123,667,527 122,743,405 153,210,698 153,679,546 468,848 0.3% Positions by Division CIP Electric Fund 32.57 32.14 32.14 31.90 (0.24) (0.75)% Electric Customer Service 13.63 13.54 12.07 11.70 (0.37) (3.07)% Electric Demand Side Management 6.57 6.61 6.85 6.17 (0.68) (9.87)% Electric Engineering (Operating) 4.50 5.73 4.98 4.98 -% Electric Operations and 48.84 48.36 48.36 48.10 (0.26) (0.54)% Maintenance Electric Resource Management 8.15 10.00 8.18 8.38 0.20 2.44% 114.26 116.38 112.58 111.23 (1.35) (1.20)% FY 2015 Actuals 0.24 4.10 FY 2016 Actuals 0.26 4.10 0.15 0.15 FY 2017 Adopted Budget 0.33 4.00 FY 2018 Adopted Budget 0.31 3.90 FY 2018 Change FTE (0.02) FY 2018 Salary 22,035 (0.10) 297,218 0.20 0.20 - 40,227 0.40 0.40 0.40 0.40 - 67,949 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 449 UTILITIES Staffing Job Classification Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst Contracts Administrator FY 2015 Actuals 0.40 0.60 0.50 FY 2016 Actuals 0.40 0.60 0.50 FY 2017 Adopted Budget 0.40 0.60 0.50 FY 2018 Adopted Budget 0.40 0.60 0.50 FY 2018 Change FTE FY 2018 Salary 77,958 114,080 86,986 2.13 2.89 2.04 1.94 (0.10) 290,495 0.10 0.10 0.10 0.10 11,367 Coordinator Utilities Projects 1.80 1.80 1.55 1.55 172,299 1.62 1.86 1.62 1.87 0.25 141,244 Customer Service Representative Customer Service Specialist 0.66 0.62 0.66 0.66 - 54,820 0.58 0.62 0.58 0.58 - 51,521 Customer Service Specialist -Lead Electric Project Engineer 1.95 1.95 1.95 1.95 282,859 2.00 2.00 2.00 2.00 202,925 Electric Underground Inspector Electric Underground Inspector 1.00 1.00 1.00 1.00 108,512 Lead 1.00 1.00 - 92,630 Electrical Equipment Technician Electrician Assistant I 4.00 4.00 3.00 3.00 - 241,484 0.55 0.55 0.55 0.55 98,464 Engineering Technician III 2.40 2.40 2.40 1.40 (1.00) 134,114 2.00 2.00 2.00 2.00 192,644 Inspector, Field Services 0.25 0.25 25,844 11.00 11.00 11.00 11.00 - 1,411,327 Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 - 549,228 Manager Customer Service 0.33 0.33 0.33 43,367 Manager Customer Service and Meter Reading Manager Electric Operations 1.00 1.00 1.00 1.00 Manager Treasury, Debt & Investments Engineering Manager - Electric Heavy Equipment Operator Lineperson/Cable Specialist 0.33 Manager Utilities Compliance Manager Utilities Credit & Collection Manager Utilities Marketing Services Manager Utilities Program Services 0.15 0.15 0.15 0.15 0.40 0.40 0.30 0.30 0.15 0.15 0.15 0.15 154,232 41,496 24,841 19,906 0.40 0.40 - 52,424 450 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification Marketing Engineer Meter Reader Meter Reader -Lead Metering Technician Metering Technician -Lead Offset Equipment Operator Overhead Underground Troubleman FY 2015 Actuals 1.00 1.99 0.33 3.00 1.00 0.48 2.00 FY 2016 Actuals 1.00 2.41 0.40 3.00 1.00 0.48 2.00 FY 2017 Adopted Budget 1.99 0.33 3.00 1.00 0.48 2.00 FY 2018 Adopted Budget 1.99 0.33 3.00 1.00 0.48 2.00 FY 2018 Change FTE FY 2018 Salary 141,181 25,046 362,874 129,434 32,490 269,584 Planner 0.15 - - - - - 2.30 2.30 2.30 2.30 314,565 Principal Business Analyst 0.34 0.34 0.34 48,394 0.34 - Project Manager 0.75 0.75 0.75 0.75 - 83,803 2.65 3.95 3.65 3.85 0.20 528,374 SCADA Technologist 1.00 1.00 1.00 1.00 147,031 0.68 0.68 0.68 0.68 86,703 Senior Electrical Engineer 3.95 3.95 3.95 3.95 641,974 Senior Management Analyst 0.45 0.45 0.10 0.10 12,819 Senior Resource Planner 3.69 4.08 3.06 3.06 - 513,381 Senior Technologist 0.29 - - - - - Senior Utilities Field Service 0.10 11,193 Power Engineer Principal Management Analyst Resource Planner Senior Business Analyst Representative Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber Technician Apprentice Street Light, Traffic Signal & Fiber - Lead 0.10 2.00 1.00 1.00 3.00 1.00 0.10 3.00 1.00 0.10 3.00 1.00 Substation Electrician 5.50 5.50 5.50 5.50 Substation Electrician -Lead 2.00 2.00 2.00 2.00 Supervising Electric Project 1.00 1.00 Engineer Tree Maintenance Person Utilities Compliance Technician Utilities Compliance Technician - Lead 1.00 1.00 2.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00 1.00 347,103 123,800 694,182 270,137 137,072 85,689 269,429 144,163 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 451 UTILITIES Staffing Job Classification Utilities Credit/Collection Specialist Utilities Engineer Estimator Utilities Field Services Representative Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator FY 2015 Actuals 2.00 3.25 FY 2016 Actuals 2.00 3.25 0.50 0.50 FY 2017 Adopted Budget 2.00 3.25 FY 2018 Adopted Budget 2.00 3.25 0.50 0.50 FY 2018 Change FTE FY 2018 Salary 183,003 391,329 52,318 1.90 1.90 1.60 1.35 (0.25) 157,647 1.95 1.95 1.95 1.95 - 187,281 2.55 2.25 1.90 1.60 (0.30) 177,486 Utilities Safety Officer 0.55 0.55 0.55 0.55 61,604 Utilities Supervisor 5.00 5.00 5.00 5.00 - 679,827 Utilities System Operator 5.00 5.00 5.00 5.00 - 687,715 Utility Engineering Estimator - Lead - - - 1.00 1.00 128,892 Sub -total: Full -Time Equivalent 109.56 112.02 107.44 107.12 Positions (0.32) 13,232,020 Temporary/Hourly 4.70 4.37 5.15 4.11 (1.03) 328,067 Total Positions 114.26 116.38 112.58 111.23 (1.35) 13,560,086 452 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Reconciliation Prior Year Budget 112.58 174,683,639 153,210,698 21,472,941 Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Electric Commodity Purchases Expenditure Adjustment Electric Sales Revenue Adjustment (14% rate increase & changes in consumption levels) Equity Transfer to General Fund Adjustment Central Valley Project (CVP) O&M Loan Repayment Revenue Adjustment Palo Alto Green Gas Program Sales Revenue Adjustment Staff Reallocations within Utility Program Services and Resource Management Division ARC Document Solutions (Print & Mail Allocated Charges Realignment) Debt Service Expenditure Adjustment Capital Improvement Funding Adjustments Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement and TE-05000 Radio Infrastructure Replacement) Transfer from the General Fund (for Traffic Signal and Streetlight Electric Costs) General Fund Cost Allocation Plan Adjustment Dispatch Service Allocated Charges Adjustment General Liability Insurance Allocated Charges Adjustment Ground Maintenance Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment Rents & Leases Expenditure Alignment Refuse Allocated Charges Adjustment Storm Drain Allocated Charges Adjustment Storm Water Management Fee Allocated Charges Adjustment Street Cut Allocated Charges Adjustment 1,069,452 5,264,265 719,000 (0.59) 114,406 (1,890) (174,886) (6,794,962) 154,626 117,990 1,615 105,624 410 12,281 163,875 460 413 696 — (12,680) 2,727,727 1,421,050 104,269 19,469 (3,990,000) 186,332 1,069,452 2,536,538 (1,421,050) 719,000 (104,269) (19,469) 114,406 (1,890) (174,886) (2,804,962) 154,626 (186,332) 117,990 1,615 105,624 410 12,281 163,875 460 413 696 (12,680) UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 453 UTILITIES 3udget Reconciliation Positions Net Expenditures Revenues Electric Fund Utilities Administration Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment 22,853 73,146 (746) 22,853 73,146 (746) Adjustments to Costs of Ongoing Activities (0.59) 835,948 468,847 367,101 Total FY 2018 Base Budget 111.99 175,519,587 153,679,545 21,840,042 Budget Proposals 1 Supplemental Pension Trust Fund Contribution 2 Electrification Research and Development Projects 3 Electric Consultant Services Contract 4 Utilities Compliance Group Workload Realignment 5 Electric Engineering Staffing 6 Utilities Customer Service and Part -Time Staffing Reorganization (0.76) 353,620 150,000 132,000 54,320 25,949 (68,667) 353,620 150,000 132,000 54,320 25,949 (68,667) Budget Changes (0.76) 647,222 647,222 176,166,809 153,679,545 22,487,264 454 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution = 0.00 353,620 L 0 353,620 This action establishes a transfer from the Electric Funds to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $353,620 which represents approximately 10% of the Electric Funds' annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results 0 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 2 Electrification Research and Development Projects 150,000 150,000 This action provides funding for electrification related research and development projects. The hot water space heating program is currently funded at $50,000 per year. The department has been tasked to consider fuel -switching programs or incentives for residential customers. Staff seeks to increase the rebate funding by $150,000 for water heating and space heating appliances to pilot new programs and technologies, promote customer adoption, and lower the barriers of electrification. (Ongoing net costs: $150,000) Performance Results © 0 Increased participation of this program will promote electrification efforts, contributing to the reduction of carbon emissions. 3 Electric Consultant Services Contract = 0.00 1 132,000 = 0 132,000 This action provides funding for the second year of a three-year contract for consultant services in the Electric fund. The contract is used to augment staff resources and provide specialized knowledge and analysis in the areas of supply analysis and planning. (Ongoing net costs: $132,000) Performance Results © 0 Continuing funding of the on -call consulting contracts ensures the use of expert and experienced consultants in a cost effective manner to respond to electric legislative and regulatory changes, assist with transmission grid planning, and achieve community's energy efficiency initiatives such as renewable energy supply and greenhouse gas reductions. 4 Utilities Compliance Group Workload Realignment 54,320 This action updates the job descriptions and salary ranges for the Utilities Compliance Technician and Utilities Compliance Technician -Lead classifications. Additional duties including inspection on contract work performed that complies with General Orders 128 for underground inspection and General Orders 95 for overhead construction ensure the business needs of the Electric Operations Division and job requirements to perform the work are met. These changes are subject to the meet and confer process. (Ongoing net costs: $54,320) Performance Results © 0 The City's electric distribution system includes 5,930 overhead poles and 2,698 underground locations. Updating the job description will allow Electric Operations to manage the compliance of General Orders 128 and General Orders 95 through scheduled annual inspections for the entire distribution system, without having to contract out for services. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 455 UTILITIES 3udget Adjustments ud•et Ad'ustments Positions Net Expenditures Revenues Electric Fund 5 Electric Engineering Staffing 0.00 25,949 0 This action eliminates 1.0 Engineering Technician III and adds 1.0 Utility Engineering Estimator -Lead in the Electric Engineering Division. In addition to providing CAD drawings and cost estimates for customer connection and capital improvement projects, currently completed by Utility Engineering Estimators, the new lead position will be responsible for providing training, updating the City's Engineering standards, distributing project assignments, reviewing drawings and cost estimates, and verifying construction as -built plans. This increased responsibility will create additional capacity at the Senior Electric Engineer level, allowing them to refocus on addressing the backlog of capital improvement projects. This action is subject to the meet and confer process. (Ongoing net costs: $25,949) Performance Results 0 0 This reclassification will allow the Electric Engineering Division to reduce the backlog of customer connection and electric capital improvement projects (CIP) and create capacity at the Senior Engineer's level to oversee essential CIP projects, such as upgrading the distribution system, SCADA and communication network, and Smart Grid initiatives. 6 Utilities Customer Service and Part -Time Staffing Reorganization (68,667) This action reorganizes and reallocates various part-time employees' funding department -wide to better align resources based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff impacting 19 positions. Within this reorganization, impacts to the Electric Fund include: a net increase of 0.32 for two Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.64 for four Administrative Specialists I; a decrease of 0.48 for one Staff Specialist; a decrease of 0.24 for one Management Specialist; and a decrease of 0.02 for one Administrative Specialist II. (Ongoing net savings: $68,667) Performance Results 0 0 The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service counter in the Civic Center lobby to assist walk-in customers with Utilities -related services including billing, account services, and programs. With this additional position, the Utilities Call Center will improve performance and customer response time. 456 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES FIBER OPTICS FUND Description In 1996, the City built a dark fiber ring around Palo Alto that would be capable of supporting multiple network developers and service providers with significant growth potential. The fiber backbone network was routed to pass by and provide access to key City facilities and the Palo Alto business community, including research centers and commercial properties. Dark fiber optics service consists of providing the fiber optics cabling, splice points, service connections, and other infrastructure providing high -capacity bandwidth needed to transport large quantities of data. It does not include the transmitters, receivers, or data itself, which are owned and operated by each customer. Accomplishments • Staff completed initiatives related to the Fiber -to -the -Premises (FTTP) Master Plan and the Wireless Network Plan with the issuance of request for information for a partnership to deploy a citywide FTTP network and issuance of request for proposal to add a dedicated wireless communication network for Public Safety and Utilities. ▪ Initiated the fiber network upgrade project to install new aerial duct and substructure (conduit and boxes), in addition to fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near capacity. This project basically "overlays" new fiber over existing fiber routes in the network. ▪ Continuing upgrades to inter -departmental dark fiber databases (Engineering, Operations and Business Development) to fully leverage the physical audit data. ▪ Utilities staff worked closely with other City departments such as the City Attorney, Development Services, Planning & Community Environment and Public Works on proposed network upgrades by the wired and wireless telecommunication providers. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 457 UTILITIES Initiatives ▪ Ongoing upgrade of City's dark fiber ring to improve network performance and enable future expansion opportunities for licensing dark fiber to commercial firms and anchor institutions. ▪ Evaluate new opportunities to expand the existing commercial dark fiber customer base in other business sectors (e.g. licensing dark fiber to the cellular industry for network backhaul links for small cell deployments). ▪ Develop a plan to ensure commercial dark fiber customer retention due to anticipated changes in the market for business broadband services. • Develop a work plan with the Citizen Advisory Committee, Utilities Advisory Commission and City Council to support next -generation, gigabit -speed broadband. ▪ Develop a "Dig Once" policy or ordinance to support the expansion of broadband in Palo Alto and to preserve City streets and other critical infrastructure. • Support network upgrades by Internet service providers to deliver next -generation broadband. Goals and Objectives GOAL Increase the value of fiber utility services to customers. Objectives: • Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. ▪ Manage costs and add new dark fiber license agreements with commercial customers. GOAL 2 Improve capacity and reliability of the Dark Fiber system. Objectives: ▪ Ensure sufficient fiber optic cables are available to meet future customer needs. • Make system enhancements to prevent damage from outside sources and improve reliability. 458 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Number of Wholesale re -sellers Key Performance CUSTOMER SATISFACTION Goal Objective V easures Provide excellent customer service. Provide high -quality and competitively -priced fiber optic utility services to City Departments and commercial customers in the City of Palo Alto. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Number of commercial fiber connections completed Description Purpose Status Workload V 228.00 219.00 240.00 221.00 223.00 This measure shows the growth of the Fiber Enterprise based on customers and connections. Some customers have multiple fiber connections at various locations. The purpose of this measure is to add value to companies doing business in Palo Alto by providing a cost-effective, world class telecommunications system. The goal is to build out and fully leverage the fiber network to add value to the business and other communities as needed. The Fiber Enterprise continues to build out its network to provide more service options to the ever-expanding customer base. For example, a network was completed for the Palo Alto Unified School District (PAUSD) that will not only serve the schools, but provide fiber access to previously unserved areas. easures FY 2015 Actuals FY 2016 Actuals FY 2017 FY 2017 FY 2018 Adopted Estimated Adopted 11 10 14 12 13 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 459 UTILITIES 3udget Summary r FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIP Fiber Optics Fund 412,667 634,258 1,858,000 1,652,838 (205,162) (11.0)% Fiber Optics Administration 62,472 177,369 737,271 788,590 51,320 7.0% Fiber Optics Customer Service 420,523 402,806 1,017,098 1,128,287 111,189 10.9% Fiber Optics Operations and 1,103,758 1,360,167 520,063 574,757 54,694 10.5% Maintenance Total 1,999,420 2,574,599 4,132,432 4,144,473 12,040 0.3% Dollars by Category Salary & Benefits Healthcare 140,208 129,998 151,141 159,128 7,987 5.3% Other Benefits 20,634 20,292 18,928 24,978 6,050 32.0% Overtime 28,965 7,863 24,244 24,244 -% Pension 111,875 168,158 206,120 231,718 25,598 12.4% Salary 579,884 805,524 798,838 893,674 94,836 11.9% Workers' Compensation - - 10,082 26,440 16,358 162.2% Total Salary & Benefits 881,565 1,131,834 1,209,353 1,360,182 150,829 12.5% Allocated Charges 590,379 475,985 559,303 616,772 57,468 10.3% Contract Services 99,791 193,240 458,300 458,300 -% General Expense 2,999 3,982 14,000 14,000 -% Operating Transfers -Out 9,441 103,818 104,032 122,837 18,805 18.1% Rents & Leases 53,692 71,650 74,577 76,914 2,337 3.1% Supplies & Material 5,033 6,323 9,000 9,000 - -% Transfer to Infrastructure 17,141 -% Capital Improvement Program 356,520 570,626 1,703,867 1,486,468 (217,399) (12.8)% Total Dollars by Expense Category 1,999,420 2,574,599 4,132,432 4,144,473 12,040 0.3% Revenues Charges for Services 20,026 25,702 - - - -% Charges to Other Funds 5,300 - -% Net Sales 4,606,321 4,474,071 4,886,920 4,890,810 3,890 0.1% Operating Transfers -In 169 -% 460 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGE] UTILITIES 3udget Summary Other Revenue Return on Investments Total Revenues FY 2015 Actuals 2,752 411,870 5,041,137 FY 2016 Actuals 1,417 443,557 4,950,048 FY 2017 Adopted Budget FY 2018 Adopted Budget 200,000 366,400 366,400 5,253,320 5,457,210 203,890 3.9% FY 2018 Change $ FY 2018 Change % 200,000 - % - % Positions by Division CIP Fiber Optics Fund 0.79 0.79 0.79 0.79 -% Fiber Optics Customer Service 3.32 2.84 2.90 3.68 0.78 27.07% Fiber Optics Operations and 3.13 3.13 3.13 3.13 - -% Maintenance Total Staffing Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Business Analyst 7.24 6.76 6.82 7.60 0.78 11.50% FY 2015 Actuals FY 2016 Actuals 0.20 0.20 0.05 0.05 0.05 0.05 FY 2017 Adopted Budget 0.10 FY 2018 Adopted Budget 0.20 0.20 0.20 0.10 0.20 0.30 Chief Sustainability Officer 0.10 - - - Electric Project Engineer 0.05 0.05 0.05 0.05 Manager Utilities Compliance 0.10 0.10 0.10 0.10 Manager Utilities Credit & 0.40 0.40 0.40 0.40 53,082 Collection Manager Utilities Marketing 0.20 0.20 - - - Services Manager Utilities Program Services - 0.20 0.20 26,212 Manager Utilities 1.00 1.00 1.00 1.00 130,062 Telecommunications Power Engineer 0.40 0.40 0.40 0.40 - 54,707 Senior Electrical Engineer 0.05 0.05 0.05 0.05 - 8,026 Street Light, Traffic Signal & Fiber 2.00 2.00 2.00 2.00 231,402 Technician FY 2018 Change FTE 0.10 0.10 FY 2018 Salary 15,242 33,975 9,745 44,922 7,253 16,561 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 461 UTILITIES Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Street Light, Traffic Signal & Fiber - Lead Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator Sub -total: Full -Time Equivalent 6.28 6.18 6.48 6.78 0.30 851,290 Positions Temporary/Hourly 0.96 0.58 0.34 0.82 0.48 77,946 Total Positions 7.24 6.76 6.82 7.60 0.78 929,236 1.00 1.00 1.00 1.00 123,800 0.60 0.60 0.70 0.80 0.10 93,420 0.03 0.03 0.03 0.03 2,881 0.10 462 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Prior Year Budget 3udget Reconciliation Positions Expenditures Revenues Net Fiber Optics Fund 6.82 4,132,432 5,253,320 (1,120,888) Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustment Fiber Revenue Adjustment (Rate Increase 3.5% CPI) Staff Reallocation within Utility Program Services and Resource Management Divisions Capital Improvement Funding Adjustments Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement) IT Project Services Staffing (Management Specialist) General Fund Cost Allocation Plan Adjustment General Liability Insurance Allocated Charges Adjustment Rents and Leases Expenditure Alignment Utilities Administration Allocated Charges Adjustment 66,877 131,062 0.30 45,726 — (221,993) — 565 0.48 38,226 19,549 6,881 2,337 31,623 66,877 (131,062) 45,726 (221,993) 565 38,226 19,549 6,881 2,337 31,623 Adjustments to Costs of Ongoing Activities 0.78 (10,209) 131,062 (141,271) Total FY 2018 Base Budget 5,384,382 (1,262,159) Budget Proposals 1 Supplemental Pension Trust Fund Contribution 2 Fiber Connection for Creek Monitors 22,250 22,250 72,828 (72,828) Budget Changes 22,250 72,828 (50,578) Total FY 2018 Adopted Budget 7.60 4,144,473 5,457,210 (1,312,737) UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 463 1=f irr 3udget Adjustments Budget Adjustmen Positions Expenditures Revenues Net Fiber Optics Fund 1 Supplemental Pension Trust Fund Contribution 22,250 This action establishes a transfer from the Fiber Optics Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $22,250 which represents approximately 10% of the Fiber Optics Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results 4 Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 2 Fiber Connection for Creek Monitors 72,828 (72,828) This action recognizes the payment from Storm Drainage Fund for the ongoing costs associated with the fiber optic connection between storm drain pump stations and creek monitors. The monitors will be installed during the 2017 summer season and funded as part of the Storm Drain System Replacement and Rehabilitation Capital Improvement Program project. (Ongoing net savings: $72,828) Performance Results This action will connect storm drain pump stations and creek monitors to the City's fiber optic network to increase the accuracy of sensor readings. In the future, real-time camera views during potential flash flood events will be enabled. 464 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES GAS FUND Description The municipal natural gas system began operations in 1917 when Palo Alto acquired a privately -owned gas business. During the early years, gas was manufactured from coal tar. This was replaced in the 1920s by natural gas from Pacific Gas and Electric. Today, gas is purchased from several sources. The Gas Utility services include Crossbore Safety, Gas Main Replacements, and Home Energy Audits. The Gas utility infrastructure and its crews maintains an excellent safety record. The gas fund is responsible for planning, designing, budgeting, and constructing major capital improvements to the City's gas distribution system. Accomplishments ▪ Adopted a Carbon Neutral Natural Gas Plan to achieve a carbon neutral gas supply portfolio with a rate impact not to exceed ten cents per therm. ▪ Completed the design of gas main replacement project GMR 22 to replace approximately 19,440 linear feet of gas main pipelines and 367 service pipelines near the downtown area. ▪ Updated the ten-year gas efficiency goals for 2018 to 2027 with a cumulative ten-year gas efficiency savings of 5.1% or 1,491,000 therms of the City's projected load. ▪ Completed the development of a computer model to perform complex natural gas distribution system analyses. ▪ Reduced 286,000 therms of gas or one percent of the City's load in 2016 as a result of gas energy efficiency programs. Initiatives ▪ Implement the Carbon Neutral Gas Plan to achieve a carbon neutral gas supply portfolio and prioritize maximizing carbon reduction within the ten cents per therm impact cap. ▪ Continue to enhance outreach for gas safety awareness to all customer groups, as well as non -customers, living around a gas pipeline and/or working with utility services in Palo Alto. • Start construction of gas main replacement project GMR 22 to replace approximately 19,440 linear feet of gas main pipelines and 367 service pipelines near the downtown area. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 465 UTILITIES • Complete the gas cost of service study; the previous gas cost of service study was conducted in 2012. Goals and Objectives GOAL 1 Provide safe and efficient delivery of natural gas to our customers. Objectives: • Continue repairing 100 percent of laterals damaged by crossbore within 24 hours. • Remove and replace the remaining acrylonitrile butadien styrene (ABS) pipe from the gas system. ▪ Complete a walking gas leak survey for 50 percent of the City, and a mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. GOAL 2 Increase environmental sustainability and promote efficient use of natural gas resources. Objectives: ▪ Ten-year goal for natural gas efficiency is a reduction in expected gas use of 2.85 percent by 2023 (base year 2013). ▪ Reduce the carbon intensity of the gas portfolio in accordance with the Climate Protection Plan. Key Performance measures GAS LEAKS REPAIRED Goal Provide safe and efficient delivery of natural gas to customers. Objective Respond to and repair all Grade 1 gas leaks immediately. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of Grade 1 leaks responded to within 24 hours Description Purpose Status 100.00% 100.00% 100.00% 100.00% 100.00% This measures the total response time to Grade 1 leaks found during the walking and mobile (vehicle) surveys, and any reported leaks classified as Grade 1. The City's policy is to respond and repair Grade 1 leaks within 24 hours. Grade 1 leaks are hazardous leaks that pose an immediate hazard to persons or property and require continuous action until conditions are no longer hazardous. Leaks are assigned priority gradings according to location, extent of migration, gas concentration, potential for concentration, ignition sources, and potential hazard to the public and property. These priority grades are intended only as guidelines. Utilities Operations responds immediately to Grade 1 leaks. The average repair time can vary depending on the size and location of the gas leak. 466 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES GAS SAFETY Goal Objective Percentage of gas system surveyed by walking Percentage of gas system surveyed by mobile (vehicle) Description Purpose Status Provide safe and efficient delivery of natural gas to our customers. Complete a walking gas leak survey for 50 percent of the City, and a mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. FY 2015 Actuals 100.00% FY 2016 Actuals 100.00% FY 2017 Adopted 100.00% FY 2017 Estimated 100.00% FY 2018 Adopted 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% A walking survey is conducted to check for gas leaks on service/gas meters and covers one-half of the City (approximately 105 miles of gas mains and 36 miles of service lines) every year, so that the entire City's gas service system can be reviewed in a two-year period. Federal Department of Transportation (DOT) regulations require a survey of the entire City once every five years. In addition to walking survey, a mobile (vehicle) survey of all gas mains and some gas service lines (services in the business district) are conducted annually. To ensure the safety of all who live and work in Palo Alto and to comply with Federal DOT requirements. The department is meeting the requirements and repairing all discovered gas leaks in a timely manner. INCREASE ENVIRONMENTAL SUSTAINABILITY AND PROMOTE EFFICIENT USE OF NATURAL GAS RESOURCES Goal Support environmental sustainability and promote efficient use of natural gas resources. Objective Natural gas savings achieved annually through efficiency programs Description Purpose Status Ten-year goals for natural gas are a reduction in expected gas use of 2.85 percent by 2023 (2013 base year). FY 2015 Actuals 225, 817.00 FY 2016 Actuals 286,317.00 FY 2017 Adopted 158, 000.00 FY 2017 Estimated 200, 000.00 FY 2018 Adopted 287, 000.00 The department measures specific savings achieved from the installation of natural gas efficiency improvements, which are tracked through energy efficiency incentive programs. The Department can also track overall savings by customer class. Much of the non-residential savings were achieved through third party contractors who help large customer give their buildings a tune-up known as retrocommissioning. The carbon intensity of the natural gas portfolio is a function of where and how the gas is acquired and how much of it is burned in use. Improving gas efficiency directly reduces the gas -related carbon footprint in Palo Alto. FY 2016 gas efficiency savings were more than double of the yearly goal. As the cost of gas continues to decrease, the Department anticipates decline in large commercial gas savings projects. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 467 UTILITIES Workload V ensures i J Number of Customer Accounts (Gas) Number of gas leaks repaired FY 2015 Actuals 23,461 100 FY 2016 Actuals 23,467 109 FY 2017 Adopted 23,659 100 FY 2017 Estimated 23,460 82 FY 2018 Adopted 23,460 75 468 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Summary il FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIPGas Fund 7,460,806 3,298,187 11,111,443 6,052,844 (5,058,599) (45.5)% Gas Administration 9,245,419 9,729,505 12,213,114 12,283,724 70,611 0.6% Gas Customer Service 1,195,633 1,364,272 1,583,952 1,693,417 109,465 6.9% Gas Demand Side Management 631,749 565,553 1,471,467 1,593,290 121,823 8.3% Gas Engineering (Operating) 369,154 425,602 528,730 567,176 38,446 7.3% Gas Operations and Maintenance 4,403,054 4,158,721 4,979,614 5,550,022 570,408 11.5% Gas Resource Management 11,074,833 8,599,212 13,060,873 16,185,726 3,124,854 23.9% Total 34,380,649 28,141,053 44,949,192 43,926,200 (1,022,992) (2.3)% Dollars by Category Salary & Benefits Healthcare 898,497 819,155 985,191 1,053,572 68,381 6.9% Other Benefits 131,774 136,962 120,560 149,353 28,794 23.9% Overtime 316,690 325,581 188,249 188,249 -% Pension 837,860 1,116,780 1,389,351 1,511,446 122,095 8.8% Retiree Medical 587,151 543,452 594,708 625,662 30,954 5.2% Salary 4,268,909 3,603,977 5,238,544 5,406,444 167,900 3.2% Workers' Compensation 45,111 64,978 62,988 173,330 110,342 175.2% Total Salary & Benefits 7,085,992 6,610,886 8,579,590 9,108,056 528,466 6.2% Allocated Charges 2,321,250 2,550,031 4,173,283 3,938,355 (234,928) (5.6)% Contract Services 841,287 573,304 1,446,000 1,446,000 - -% Debt Service 265,519 248,930 802,615 802,615 - -% Equity Transfer 5,730,000 6,194,000 6,726,000 6,733,000 7,000 0.1% Facilities & Equipment 19,790 19,790 -% General Expense 522,091 348,019 780,361 780,274 (87) (0.0)% Operating Transfers -Out 150,635 375,638 484,066 899,639 415,573 85.9% Rents & Leases 512,509 688,649 709,958 728,615 18,657 2.6% Supplies & Material 428,429 445,378 498,034 497,216 (818) (0.2)% Transfer to Infrastructure - 100,119 - - - -% Utility Purchase 10,519,185 8,127,485 12,337,000 15,586,773 3,249,773 26.3% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 469 UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2015 Actuals 6,003, 751 FY 2016 Actuals 1,878,613 FY 2017 Adopted Budget 8,392,495 FY 2018 Adopted Budget FY 2018 Change $ 3,385,866 (5,006,629) FY 2018 Change % (59.7)% 34,380,649 28,141,053 44,949,192 43,926,200 (1,022,992) (2.3)% Revenues Charges for Services 19,698 20,982 20,000 20,000 Charges to Other Funds 96,316 216,628 208,104 95,587 (112,517) (54.1)% Net Sales 29,830,007 29,021,397 34,605,526 34,740,465 134,939 0.4% Operating Transfers -In 8,221 - - - - -% Other Revenue 787,248 984,314 1,030,000 1,060,510 30,510 3.0% Return on Investments 499,912 448,615 526,300 526,300 - -% Total Revenues 31,241,401 30,691,936 36,389,930 36,442,861 52,932 0.1% -% Positions by Division CIP Gas Fund 17.10 17.10 17.10 15.80 (1.30) (7.63)% Gas Customer Service 9.61 8.41 8.78 9.03 0.25 2.84% Gas Demand Side Management 0.34 0.34 1.34 1.94 0.60 44.78% Gas Engineering (Operating) 1.40 1.15 1.40 1.40 -% Gas Operations and Maintenance 22.07 22.38 22.43 23.98 1.55 6.91% Gas Resource Management 2.28 2.77 1.65 0.96 (0.69) (41.82)% Total 52.80 52.16 52.70 53.11 0.41 0.78% Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering FY 2015 Actuals 0.26 0.65 FY 2016 Actuals 0.26 0.65 0.10 0.10 0.20 0.20 0.20 0.20 FY 2017 Adopted Budget 0.23 0.75 FY 2018 Adopted Budget FY 2018 Change FTE 0.23 0.85 0.05 0.05 0.20 0.20 0.20 0.20 0.01 FY 2018 Salary 16,349 0.10 64,778 10,057 33,975 38,979 470 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst Cathodic Protection Technician Assistant FY 2015 Actuals 0.15 0.25 1.37 1.00 FY 2016 Actuals 0.15 0.25 FY 2017 Adopted Budget 0.15 0.25 0.83 1.28 1.00 1.00 FY 2018 Adopted Budget 0.15 0.25 FY 2018 Change FTE 1.48 0.20 1.00 FY 2018 Salary 28,520 43,493 221,614 102,943 Cathodic Technician 1.00 1.00 1.00 1.00 126,380 Cement Finisher 0.25 0.25 0.25 0.68 0.43 62,836 Contracts Administrator 0.10 0.10 0.10 0.10 11,367 Coordinator Utilities Projects 1.51 1.51 1.26 1.26 - 140,062 Customer Service Representative 1.62 1.50 1.62 1.87 0.25 141,244 0.68 0.50 0.68 0.68 - 56,481 Customer Service Specialist Customer Service Specialist -Lead 0.58 0.50 0.58 0.58 51,521 2.00 2.00 2.00 2.00 256,225 Engineer Engineering Manager - Electric 0.15 0.15 0.15 0.15 26,854 0.33 0.33 0.33 0.33 - 51,885 Engineering Manager - WGW Engineering Technician III 0.70 0.70 0.70 0.70 - 67,057 0.43 0.43 0.43 - (0.43) - Equipment Operator Gas and Water Meter Measurement 3.20 3.20 328,817 and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician 2.00 0.90 Heavy Equipment Operator 2.57 Heavy Equipment Operator - Install/Repair Inspector, Field Services 1.17 Gas System Technician II Maintenance Mechanic -Welding Manager Customer Service Manager Customer Service and Meter Reading Manager Treasury, Debt & Investments Manager Utilities Compliance 1.00 0.33 0.25 2.00 0.90 2.57 0.80 0.80 87,963 2.90 - (2.90) 2.52 2.52 242,731 0.65 0.65 1.17 1.42 1.42 1.00 1.00 1.00 0.33 0.33 0.33 0.10 0.25 0.25 0.10 68,953 146,794 102,838 43,367 13,832 0.25 - 41,402 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 471 UTILITIES Staffing Job Classification Manager Utilities Credit & Collection Manager Utilities Marketing Services FY 2015 Actuals 0.15 0.20 FY 2016 Actuals 0.15 0.20 FY 2017 Adopted Budget 0.15 FY 2018 Adopted Budget 0.15 FY 2018 Change FTE FY 2018 Salary 19,906 Manager Utilities Operations WGW 0.20 0.20 0.20 0.20 31,683 - - 0.20 0.20 - 26,212 1.98 1.92 1.98 1.98 - 140,472 0.33 0.32 0.33 0.33 - 25,046 Principal Business Analyst 0.33 0.33 0.33 46,970 0.33 - - - Program Assistant I 0.33 0.33 0.33 0.33 25,516 1.00 1.00 1.00 1.00 - 137,889 Resource Planner 1.15 0.95 0.65 (0.05) (0.70) (6,862) 0.43 0.43 0.43 0.43 - 43,199 SCADA Technologist 0.20 0.20 0.20 0.20 29,406 Senior Business Analyst 0.66 0.66 0.66 0.66 84,153 Senior Engineer 2.10 2.70 2.70 2.70 377,017 0.05 0.05 - - - - Senior Mechanic 0.33 0.33 0.33 0.33 - 35,630 Senior Project Engineer 0.60 - - - - - Senior Resource Planner 0.46 0.77 0.45 0.46 0.01 68,255 Senior Technologist 0.29 Senior Utilities Field Service Representative Substation Electrician 0.10 0.10 0.10 0.10 - 12,621 Manager Utilities Program Services Meter Reader Meter Reader -Lead Principal Management Analyst Project Engineer Restoration Lead Senior Management Analyst 0.41 0.41 Supervisor Inspection Services 0.29 0.29 0.85 0.85 Utilities Engineer Estimator Utilities Field Services Representative Utilities Install Repair -Lead -Welding Certified Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair Assistant 1.75 1.30 1.95 1.75 1.30 1.95 4.45 4.45 0.65 0.65 0.41 0.41 0.85 0.85 1.75 1.30 1.95 1.75 1.30 1.95 3.85 3.85 0.65 0.65 45,890 102,347 183,112 148,146 206,832 392,820 56,249 472 UTILITIES • c I T Y OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Utilities Install/Repair-Lead Utilities Key Account Representative Utilities Locator 1.98 0.35 1.98 0.35 1.98 0.45 1.98 0.50 220,481 0.05 58,388 0.29 0.29 0.29 0.29 - 27,852 Utilities Marketing Program 0.35 0.35 0.70 1.00 0.30 110,929 Administrator Utilities Safety Officer 0.20 0.20 0.20 0.20 22,402 Utilities Supervisor 2.08 2.08 2.37 2.37 291,064 Water System Operator II 0.66 0.66 0.66 0.66 63,547 Sub -total: Full -Time Equivalent 50.20 49.03 49.83 51.14 1.31 5,656,490 Positions Temporary/Hourly 2.60 3.13 2.88 1.97 (0.91) 115,208 Total Positions 52.80 52.16 52.70 53.11 0.41 5,771,697 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 473 UTILITIES 3udget Reconciliation Prior Year Budget 52.70 44,949,192 36,389,930 8,559,262 Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Gas Commodity Purchases Expenditure Adjustment Gas Sales Revenue Adjustment (Rate Increase, Consumption Decrease, Commodity Cost Decrease) Palo Alto Green Gas Program Sales to City Revenue Adjustment Staff Reallocations within Utility Program Services and Resource Management Division Equity Transfer to General Fund Expenditure Adjustment IT Project Services Staffing (Management Specialist) Capital Improvement Funding Adjustments Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement and TE-05000 Radio Infrastructure Replacement) ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment Dispatch Service Allocated Charges Adjustment General Liability Insurance Allocated Charges Adjustment Ground Maintenance Allocated Charges Adjustment Landfill Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment Rents & Leases Expenditure Alignment Storm Drain Allocated Charges Adjustment Storm Water Management Fee Allocated Charges Adjustment Street Cut Allocated Charges Adjustment Utilities Administration Allocated Charges Adjustment (0.04) (0.48) 429,099 3,249,773 12,418 7,000 (38,226) (4,864,194) 109,303 (818) (351,321) 29,171 45,112 77 (23,400) 2,222 18,657 8 13 28,928 84,067 374,939 (352,517) 30,510 429,099 3,249,773 (374,939) 352,517 12,418 7,000 (38,226) (4,894,704) 109,303 (818) (351,321) 29,171 45,112 77 (23,400) 2,222 18,657 8 13 28,928 84,067 474 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Reconciliation Utilities Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment (1,422) (33,485) (1,422) (33,485) Adjustments to Costs of Ongoing Activities (0.52) (1,297,018) 52,932 (1,349,950) Total FY 2018 Base Budget 52.18 43,652,174 36,442,862 7,209,312 Budget Proposals 1 Supplemental Pension Trust Fund Contribution 2 Gas and Water Meter Shop Reorganization 3 Utilities Customer Service and Part -Time Staffing Reorganization 4 Pavement Restoration Staffing 148,937 1.10 109,117 (0.17) 14,875 1,097 148,937 109,117 14,875 1,097 Budget Changes 0.93 274,026 274,026 Total FY 2018 Adopted Budget 53.11 43,926,200 36,442,862 7,483,338 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 475 UTILITIES 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution = 0.00 This action establishes a transfer from the Gas Funds to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $148,937 which represents approximately 10% of the Gas Funds' annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) 148,937 148,937 Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 2 Gas and Water Meter Shop Reorganization 109,117 This action realigns the structure of the existing Gas and Water Meter shops by consolidating into one shop. This action eliminates the isolated job classifications and adds new job classifications to reflect the merged team. By combining these two meter shops, the City will be better positioned to respond to customer needs and unforeseeable workload changes. This will make the City's meter shop more agile and flexible in its continued service. The proposed consolidation is outlined below: - Eliminate 3.0 Gas Meter Technicians II and add 3.0 Gas and Water Measurement and Control Technicians; - Eliminate 1.0 Water System Operator I and add 1.0 Gas and Water Measurement and Control Technician; and - Eliminate 1.0 Engineering Technician Ill and add 1.0 Gas and Water Measurement and Control Technician - Lead. This action is subject to the meet and confer process. (Ongoing net costs: $109,117) Performance Results 0 With this reorganization, Utilities will be able to reduce the risk of injuries, expand career opportunities, and reduce backlog of meter replacement and maintenance work for both the Gas and Water Meter Shops. 3 Utilities Customer Service and Part -Time Staffing Reorganization 14,875 This action reorganizes and reallocates various part-time employees' funding department -wide to better align resources based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff impacting 19 positions. Within this reorganization, impacts to the Gas Fund include: a net increase of 0.48 for three Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.64 for three Maintenance Assistants; a net decrease of 0.24 for four Administrative Specialists - I; and a decrease of 0.02 for one Administrative Specialist - II. (Ongoing net costs: $14,875) Performance Results O 476 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Adjustments Budget Adjustments Positions Expenditures Net Revenues Gas Fund The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service counter in the Civic Center lobby to assist walk-in customers with Utilities -related services including billing, account services, and programs. With this additional position, the Utilities Call Center will improve performance and customer response time. 4 Pavement Restoration Staffing This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water -Gas -Wastewater Division. The division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital improvement projects which will continue at current levels for the foreseeable future. With the crew's sole Cement Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing net costs: $1,097) Performance Results 0 This reclassification will allow Operations to restore pavement and concrete in a timely manner. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 477 UTILITIES WASTEWATER COLLECTION FUND Description In 1898, Palo Alto approved $28,000 in bond money to fund construction of the City's first sewer network, which was completed in 1899. Private cesspools and privies were banned, and the City Health Officer had residents connected to the sewer system within a few years. Wastewater Collection's staff is responsible for design, construction, operation, and maintenance of approximately 216 miles of sewer mains and over 18,000 City -owned laterals. Staff continues overlapping the design and construction elements of rehabilitation and augmentation projects. Wastewater Collection's priorities are: maintaining infrastructure reliability; identifying problems in mains and service laterals through expanded use of video technology; complying with all regulatory requirements; and maintaining its excellent safety record. Accomplishments ▪ Surveyed, inspected, and cleaned 3,397 out of 18,141 City -owned sewer laterals. On average, the City surveys and inspects between 3,200 - 4,200 per year. ▪ Repaired and/or replaced over 202 laterals with structural damage. ▪ The construction of Sanitary Sewer Replacement (SSR) project 24, 25, and 26 was completed March 2017. Approximately 42,000 linear feet of sanitary sewer mains, 780 sewer laterals, and 120 manholes in University South, Professorville, and Old Palo Alto neighborhoods were replaced. ▪ The construction of SSR project 27 was completed in April 2017. Approximately 15,753 linear feet of wastewater main pipelines, 259 lateral pipelines, and 46 manholes in Downtown North, Crescent Park, Community Center, and Duveneck/St. Francis neighborhoods were replaced. 478 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Initiatives • Continue customer and plumber safety outreach about the importance of calling Utilities prior to clearing a sewer lateral to confirm no risk of crossbore. ▪ Reduce the total number of Sanitary Sewer Overflows (SSOs) by 5% annually per State Water Resources Control Board's requirement. • Conduct a cost of service study for wastewater collection. ▪ Request proposals and procure a contractor to do Phase II of the Crossbore program to address high priority laterals. ▪ Replace aging sewer combination cleaning units with new units. ▪ Start the design of sanitary sewer replacement project SSR 28 to replace approximately 21,000 LF of wastewater main pipelines in Charleston Meadows and Leland Manor/Garland neighborhoods. Goals and Objectives GOAL 1 Maintain and provide reliable wastewater services to customers. Objectives: ▪ Clean and maintain 100 percent of the sewer mains in commercial areas on a quarterly basis. ▪ Clean and video a minimum of 17 percent of the City -owned laterals annually, to comply with City's Sewer Overflow Reduction Plan. • Maintain a low level of inflow and infiltration of saltwater into the City's wastewater system. • Maintain the integrity of the City's wastewater collection system by replacing mains and laterals as identified in the Wastewater Collection System Rehabilitation/Augmentation Capital Improvement Project plan. ▪ Minimize Sanitary Sewer Overflows and stoppages. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 479 UTILITIES Key Performance ti easures MAINTAIN AND PROVIDE RELIABLE SERVICES Goal Maintain and provide a reliable wastewater system to customers. Inspect and clean 100 percent of the sewer mains in commercial areas on a Objective quarterly basis. Clean and video a minimum of 17 percent of the City -owned laterals annually to comply with the City's Sewer Overflow Reduction Plan. Number of miles of sewer lines cleaned/treated in a fiscal year Percentage of sewer laterals inspected annually Description Purpose Status Workload FY 2015 Actuals 128.00 FY 2016 Actuals 133.00 FY 2017 Adopted 135.00 FY 2017 Estimated 135.00 FY 2018 Adopted 145.00 22.00% 17.00% 19.00% 19.00% 19.00% The purpose of the Sewer System Management Plan (SSMP) is to maintain and improve the condition of the collection system infrastructure; control infiltration and provide appropriate sewer capacity; and minimize the number and impact of sanitary sewer overflows. The goal is to perform sewer main cleaning of the entire collection system every 30 months (81.6 miles per year). This measures inspections and maintenance of 17 percent of City -owned laterals annually using closed-circuit television (CCTV) inspection data, including results of the on -going crossbore lateral inspection program, to target sewer mains and lower laterals for rehabilitation and replacement. To prevent blockage, sewer overflows, and to comply with the City's Sanitary Sewer Management Plan (SSMP), all the City's sewer mains must be cleaned within 30 months. The City is meeting the objectives of its Sanitary Sewer Management Plan, and through the implementation of an aggressive sewer main cleaning, the number of blockages and overflows have decreased. WGW Operations is on target to complete inspection of 19% or 3,447 laterals of 18,141 in the City. ✓ensures Number of Customer Accounts (Wastewater) Number of sewage overflows in a fiscal year Percent of sewage spill and line blockage responses within two hours Percent of surveyed residents rating the quality of the Sewer Service as good/excellent Percent of miles of sewer lines replaced FY 2015 Actuals 22,241 FY 2016 Actuals 22,016 FY 2017 Adopted 22,016 96 95 64 97.00% 100.00% 100.00% FY 2017 Estimated 22,174 65 100.00% FY 2018 Adopted 22,010 65 100.00% 83.00% 88.00% 88.00% 88.00% 88.00% 3.00% 1.50% 1.94% 1.20% 1.50% 480 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Summary I Dollars by Division CIP Wastewater Collection Fund Wastewater Collection Administration Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Total FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 3,090,810 5,300,945 6,668,830 2,188,157 (4,480,673) (67.2)% 1,454,325 1,962,889 2,616,917 2,847,999 231,082 8.8% 112,697 255,586 271,245 301,679 30,435 11.2% 318,560 347,062 447,371 480,976 33,605 7.5% 11,423,074 11,405,108 13,430,249 13,354,992 (75,258) (0.6)% 16,399,467 19,271,590 23,434,612 19,173,803 (4,260,809) (18.2)% Dollars by Category Salary & Benefits Healthcare 539,838 519,724 633,919 667,936 34,018 5.4% Other Benefits 70,690 67,991 60,712 76,568 15,857 26.1% Overtime 354,859 271,686 147,159 147,159 -% Pension 469,096 606,146 777,626 838,155 60,529 7.8% Retiree Medical 124,133 124,755 136,521 143,626 7,105 5.2% Salary 2,457,005 2,332,607 2,887,948 2,968,946 80,997 2.8% Workers' Compensation 18,019 22,645 35,739 95,475 59,737 167.1% Total Salary & Benefits 4,033,641 3,945,556 4,679,624 4,937,866 258,243 5.5% Allocated Charges 736,578 936,248 2,734,290 2,607,743 (126,548) (4.6)% Contract Services 86,187 171,722 247,640 247,640 - -% Debt Service 50,663 46,777 129,001 129,001 - -% Facilities & Equipment - - 3,000 3,000 - -% General Expense 75,022 47,240 122,160 122,160 -% Operating Transfers -Out 119,173 338,264 285,689 393,160 107,471 37.6% Rents & Leases 276,107 373,180 390,039 399,647 9,608 2.5% Supplies & Material 314,451 320,224 386,120 385,618 (502) (0.1)% Transfer to Infrastructure - 57,499 - - - -% Utility Purchase 8,776,795 8,769,780 9,855,026 9,915,579 60,553 0.6% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 481 UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2015 Actuals 1,930,851 16,399,467 FY 2016 Actuals 4,265,100 19,271,590 FY 2017 Adopted Budget 4,602,023 23,434,612 FY 2018 Adopted Budget FY 2018 Change $ 32,389 (4,569,634) 19,173,803 Revenues Charges for Services 23,042 20,972 10,000 10,000 Charges to Other Funds 30,107 30,107 30,107 30,107 Net Sales 15,494,811 16,296,938 17,947,509 17,957,112 Operating Transfers -In 4,467 - - - Other Revenue 1,251,859 511,434 1,046,000 1,057,820 Return on Investments 323,123 299,684 266,500 266,500 Total Revenues 17,127,410 17,159,136 19,300,116 19,321,539 Positions by Division CIP Wastewater Collection Fund Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Total Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Utilities Engineering 13.00 12.52 2.47 1.40 12.52 12.52 3.06 2.19 1.15 1.40 12.70 13.02 13.06 2.22 1.40 12.86 (4,260,809) FY 2018 Change % (99.3)% (18.2)% 9,603 0.1% -% 11,820 1.1% -% 21,423 0.1% 0.04 -% 1.60% -% (0.20) (1.53)% 29.57 29.74 29.17 29.00 (0.16) (0.56)% FY 2015 Actuals 0.25 0.40 0.15 FY 2016 Actuals 0.25 0.40 FY 2017 Adopted Budget 0.23 0.40 0.15 0.15 FY 2018 Adopted Budget 0.23 0.40 0.15 FY 2018 Change FTE 0.01 FY 2018 Salary 16,349 30,484 29,234 Assistant Director Utilities 0.10 0.10 0.10 0.10 19,013 Operations Associate Engineer 0.50 0.50 - - - - Business Analyst 0.75 0.50 0.75 0.75 - 112,305 482 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification Cement Finisher Contracts Administrator Coordinator Utilities Projects FY 2015 Actuals FY 2016 Actuals 0.50 0.50 0.05 0.05 1.35 1.35 Customer Service Representative 1.20 1.38 Customer Service Specialist 0.46 Customer Service Specialist -Lead 0.25 0.46 1.00 1.00 Engineering Manager - Electric 0.15 0.15 Engineering Manager - WGW 0.34 0.34 Engineering Technician III 0.45 0.45 Equipment Operator 0.26 0.26 Heavy Equipment Operator 2.13 2.13 Heavy Equipment Operator - Install/Repair Industrial Waste Investigator 0.50 0.50 53,193 1.43 1.43 1.68 1.68 173,672 Maintenance Mechanic -Welding 0.20 0.20 0.20 0.20 20,568 Manager Utilities Credit & 0.15 0.15 0.15 0.15 - 19,906 Collection Engineer FY 2017 Adopted Budget FY 2018 Adopted Budget 0.50 0.76 0.05 0.05 FY 2018 Change FTE 0.26 FY 2018 Salary Inspector, Field Services 1.10 1.10 - 1.20 1.45 0.25 0.25 0.25 1.00 1.00 0.15 0.15 - 0.34 0.34 - 0.45 0.45 - 0.26 (0.26) 0.23 0.23 22,154 70,229 5,684 122,277 109,521 22,207 128,113 26,854 53,457 43,108 3.15 3.15 - 334,158 Manager Utilities Operations WGW 0.30 0.30 0.30 0.30 - 47,524 Program Assistant I 0.34 0.34 0.34 0.34 26,289 Project Engineer 2.00 2.00 2.00 2.00 275,777 Restoration Lead 0.26 0.26 0.26 0.26 26,120 Senior Engineer 1.15 1.30 1.30 1.30 186,558 0.33 0.33 0.33 0.33 - 35,630 Senior Project Engineer 0.15 - - - - - Supervisor Inspection Services 0.42 0.42 - Utilities Engineer Estimator 0.47 0.47 0.47 0.47 56,592 Utilities Field Services 1.25 1.25 1.25 1.25 - 130,794 Representative Utilities Install Repair -Lead -Welding 0.24 0.24 0.24 0.24 27,350 Certified Senior Mechanic Utilities Install Repair Welding 0.36 0.36 0.36 0.36 - 38,184 Certified Utilities Install/Repair 5.50 5.50 4.25 4.25 - 433,632 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 483 UTILITIES Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Utilities Install/Repair-Lead 2.00 2.00 Utilities Locator 0.39 0.39 Utilities Safety Officer 0.10 0.10 Utilities Supervisor 1.30 1.30 Sub -total: Full -Time Equivalent 28.17 28.77 28.15 28.40 0.26 3,149,235 Positions Temporary/Hourly 1.40 0.98 1.02 0.60 (0.42) 37,812 Total Positions 29.57 29.74 29.17 29.00 (0.16) 3,187,047 2.00 0.39 0.10 1.72 2.00 0.39 0.10 1.72 222,708 37,456 11,201 180,934 484 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Reconciliation Prior Year Budget 29.17 23,434,612 Positions Expenditures Revenues Net Wastewater Collection Fund 19,300,115 4,134,497 Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Wastewater Treatment Cost Adjustment Rents and Leases Expenditure Adjustment Wastewater Treatment Sales to City Revenue Adjustment Capital Improvement Funding Adjustments Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement and TE-05000 Radio Infrastructure Replacement) ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustmentt Dispatch Service Allocated Charges Adjustment General Liability Insurance Allocated Charges Adjustment Landfill Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment Refuse Allocated Charges Adjustment Street Cut Fee Allocated Charges Adjustment Utilities Administration Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment Adjustments to Costs of Ongoing Activities 247,300 60,553 9,608 (4,647,022) 90,425 (502) 162,517 11,341 24,849 (1,840) 1,669 4,255 - (249,270) 1,240 253 (70,507) — (4,355,131) 247,300 60,553 9,608 9,604 (9,604) 11,821 (4,658,843) 90,425 (502) 162,517 11,341 24,849 (1,840) 1,669 4,255 (249,270) 1,240 253 (70,507) 21,425 (4,376,556) Total FY 2018 Base Budget (242,059) Budget Proposals 1 Supplemental Pension Trust Fund Contribution 83,380 83,380 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 485 UTILITIES 3udget Reconciliation 2 Utilities Customer Service and Part -Time Staffing Reorganization 3 Pavement Restoration Staffing (0.17) 10,279 663 10,279 663 Budget Changes Total FY 2018 Adopted Budget (0.17) 29.00 94,322 19,173,803 19,321,540 94,322 (147,737) 3udget Adjustments ud,•et Ad.ustments 0.00 • 83,380 Expenditres Revenues Net Wastewater Collection Fund 1 Supplemental Pension Trust Fund Contribution This action establishes a transfer from the Wastewater Collection Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $83,380 which represents approximately 10% of the Wastewater Collection Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 486 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Adjustments 2 Utilities Customer Service and Part -Time Staffing Reorganization This action reorganizes and reallocates various part-time employees' funding department -wide to better align resources based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff impacting 19 positions. Within this reorganization, impacts to the Wastewater Collection Fund include: an increase of 0.25 for one Customer Service Representative; an increase of 0.16 for one Journey Level Laborer - H; a net decrease of 0.48 for three Maintenance Assistants - H; a net decrease of 0.08 for three Administrative Specialists I; and a decrease of 0.02 for one Administrative Specialist II - H. (Ongoing net costs: $10,279) Performance Results 0 The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service counter in the Civic Center lobby to assist walk-in customers with Utilities -related services including billing, account services, and programs. With this additional position, the Utilities Call Center will improve performance and customer response time. 3 Pavement Restoration Staffing 663 This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water -Gas -Wastewater Division. The division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital improvement projects which will continue at current levels for the foreseeable future. With the crew's sole Cement Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing net costs: $663) Performance Results 0 This reclassification will allow Operations to restore pavement and concrete in a timely manner. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 487 UTILITIES WATER FUND Description From 1895 until 1928, the City's water supply came from deep wells. When the groundwater supply started to decline, water was purchased from the San Francisco Regional Water System to supplement the local water system. Since 1962, when Palo Alto's wells were discontinued as the primary water system, 100 percent of the water has come from the Regional Water System: 85 percent derived from snow melt flowing into the Hetch Hetchy Reservoir and the balance from runoff stored in San Francisco Bay Area reservoirs. The Water Fund focuses on increasing infrastructure reliability and responsiveness to meet the City's water supply needs during an emergency; maintaining high -quality and reliable sources of water; updating water efficiency goals; and implementing water efficiency programs and services. Additionally, Engineering is implementing a seismic upgrade to the existing reservoirs, wells and receiving stations to increase supply reliability during catastrophic emergencies. Accomplishments • Achieved drought water savings of 24% compared to the first drought year in 2013, far surpassing the 10% voluntary water reduction goal established by the State Water Resources Control Board. ▪ Led citywide drought response initiative including water conservation education and water use restriction enforcement. • The environmental impact report for phase I I I of the Recycled Water Pipeline Project was approved to evaluate the potential expansion of the recycled water system through South Palo Alto and Stanford Research Park. ▪ Updated the 2017 Water Integrated Resources Plan guidelines. ▪ Completed the design of Water Main Replacement (WMR) project 26 to replace approximately 11,000 LF of water main pipelines, 200 service pipelines, and 40 fire hydrants. 488 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES ▪ Completed the construction of Boronda Reservoir concrete water tank rehabilitation by removing the old steel tension cable and rewrapping with new cable and shotcrete. • Completed the construction for seismic upgrade of Montebello water steel tank and 3 turnouts. ▪ Successfully managed drought impacts. Exceeded State -mandated and voluntary usage reduction goals, expanded and improved cost-effectiveness of water efficiency programs, achieved 100% compliance with enforcement of water waste complaints without issuance of fines, and protected utility financial viability with a drought surcharge. ▪ Launched two pilot programs, developing Business Water Reports for restaurants and hotels and installing real-time water meters for City facilities and selected commercial properties, with grants from the Santa Clara Valley Water District (SCVWD). • Spearheaded the third Great Race for Saving Water 5K race and Earth Day Festival in partnership with various non -profits, environmental organizations and an array of community partners in support of water resources and conservation. Initiatives • Collaborate with Public Works and Santa Clara Valley Water District to begin the Recycled Water Strategic Plan, a comprehensive evaluation of all potential recycled water supply options including nonpotable and potable reuse options. • Assess the structural integrity and general strategic plans of water reservoirs. Determine the feasibility and cost effectiveness of alternatives to address the structural integrity issues. A water hydraulic model will be developed to evaluate the current and future operational needs of the water system. • Conduct the Geological study of Mayfield tank site to assess the stability of the reservoir. ▪ Complete the construction of water main replacement project WMR 26 to replace approximately 11,000 LF of water main pipelines, 200 service pipelines, and 40 fire hydrants. ▪ In compliance with the California Water Boards, the City is working with Palo Alto Schools on plans to test lead levels in any requested K-12 school site. Goals and Objectives GOAL 1 Provide safe and clean drinking water for customers. Objectives: • Ensure drinking water meets all regulatory standards. ▪ Maintain and update water infrastructure to ensure reliable service. ▪ Educate customers about backflow prevention as part of the City's Cross Connection Control Program. ▪ Ensure adequate water supplies are available to meet existing and future water demands. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 489 UTILITIES • Complete seismic upgrades to water system (reservoirs, receiving stations and wells). GOAL 2 Increase environmental sustainability of the water supply system. Objective: • Increase water conservation and efficiency participation. • Develop updated long-term water efficiency goals as part of the 2015 Urban Water Management Plan update. • Evaluate expanding the recycled water delivery system to help drought -proof the system, reuse local water supplies, and reduce the City's dependence on the Tuolumne River. Key Performance Measures PROVIDE SAFE AND CLEAN DRINKING WATER FOR OUR CUSTOMERS Goal Objective Provide safe and clean drinking water for customers. Ensure drinking water meets all regulatory standards. FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted FY 2017 Estimated FY 2018 Adopted Percentage of customer -owned water backflow prevention devices in compliance Description Purpose Status 94.00% 90.00% 94.00% 94.00% 94.00% Customer -owned and maintained backflow devices are an integral part of the City's Cross Connection Control Program which began in early 2010. The devices help to ensure that no contaminants of any kind (e.g., chemicals, debris, reclaimed water) enter the potable water system. The California Department of Public Health provides regulations for the City and its customers through California Code of Regulations, Title 17. These regulations specify the types of hazards that require backflow devices. The City is achieving a compliance rate of up to 95-96 percent on an annual basis. There are 3,330 backflow devices. This number is growing every year as current codes require backflow installation for residences as well as Commercial properties. 490 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES WATER EFFICIENCY Goal Objective Annual savings achieved through water efficiency programs as a percentage of total sales Description Purpose Status Increase environmental sustainability of the water supply system. Increase water conservation and efficiency participation. FY 2015 Actuals 0.91% FY 2016 Actuals 1.96% FY 2017 Adopted 0.91% FY 2017 Estimated 0.91% FY 2018 Adopted 0.91% The department measures specific savings achieved by the installation of water efficiency improvements through the programs that the City offers through the Santa Clara Valley Water District. The California Drought greatly affected the City's water savings numbers this past year, with the largest amount of savings attributed to the non-residential installation of drought tolerant landscapes and water efficient irrigation hardware. Improving water efficiency for homes and businesses can result in water supply, water operations and wastewater processing savings. This measure supports the Water Fund's ten-year goals for water, to reduce expected water use by 20 percent by 2020. Water efficiency program savings were significantly higher in FY 2015 and FY 2016 compared to previous years due to the California drought and the Governor's Executive Order mandating water conservation. Program marketing and general drought awareness helped to achieve acceptable levels of program participation; however, staff expects program participation to decrease after the current rainy winter. WATER QUALITY Goal Ensure the provision of safe and clean drinking water for customers. Objective Safe testing of drinking water to meet all regulatory standards. Percentage of samples passed from all sampling stations Description Purpose Status FY 2015 Actuals 100.00% FY 2016 Actuals 100.00% FY 2017 Adopted 100.00% FY 2017 Estimated 100.00% FY 2018 Adopted 100.00% The City of Palo Alto (CPA) regularly collects and tests water samples from connection points between the San Francisco Public Utilities Commission/City of Palo Alto (SFPUC/CPA), storage reservoirs, emergency wells, residential, and sample station locations within the distribution system to ensure that the water quality meets all California Department of Public Health (CDPH) and U.S. Environmental Protection Agency (EPA) prescribed regulations that limit the amount of contaminants in the drinking water. The City has 18 sampling stations and collects 84-105 samples monthly to test levels of chlorine residual, coliform and pH levels are within regulatory guidelines. All sample results are reported to CDPH on a monthly basis. Complying with regulations guarantees the City maintains its high standards of water quality and avoids fines. Palo Alto drinking water continues to be in complete compliance with all existing county, state, and federal standards for water quality. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 491 UTILITIES Workload V ensures T FY 2015 FY 2016 Actuals i Actuals FY 2017 FY 2017 FY 2018 Adopted Estimated Adopted Percent of miles of water mains replaced Number of Customer Accounts (Water) Percent of surveyed rating the quality of the Drinking Water (Water) as "Good" or "Excellent" 0.00% 0.70% 0.90% 22,421 19,994 19,638 83.00% 87.00% 88.00% 0.40% 20,000 88.00% 0.70% 20,000 88.00% 492 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Summary FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Division CIP Water Fund 4,313,935 9,082,022 20,044,312 6,127,567 (13,916,745) (69.4)% Water Administration 6,528,352 6,871,823 8,493,164 8,884,495 391,332 4.6% Water Customer Service 1,821,447 2,082,194 2,095,208 2,201,670 106,461 5.1% Water Engineering (Operating) 358,128 409,183 504,489 538,106 33,618 6.7% Water Operations and Maintenance 5,283,426 5,433,991 6,866,562 7,531,885 665,323 9.7% Water Resource Management 16,158,265 18,219,637 19,861,067 22,203,416 2,342,349 11.8% Total 34,463,553 42,098,850 57,864,802 47,487,138 (10,377,663) (17.9)% Dollars by Category Salary & Benefits Healthcare 759,274 750,434 897,417 957,649 60,232 6.7% Other Benefits 108,612 114,286 110,776 140,523 29,747 26.9% Overtime 239,791 250,524 267,963 267,963 -% Pension 787,607 1,025,830 1,319,198 1,397,443 78,245 5.9% Retiree Medical 270,265 260,618 285,198 300,042 14,845 5.2% Salary 4,443,438 4,949,770 4,979,927 5,117,401 137,474 2.8% Workers' Compensation 76,724 89,580 57,907 164,608 106,701 184.3% Total Salary & Benefits 6,685,711 7,441,043 7,918,386 8,345,630 427,244 5.4% Allocated Charges 2,697,240 2,867,207 4,028,173 4,410,152 381,979 9.5% Contract Services 728,992 806,550 827,806 827,806 -% Debt Service 1,863,964 1,813,658 3,222,606 3,222,606 - -% Facilities & Equipment 286 - 2,000 2,000 - -% General Expense 366,062 443,919 568,146 666,070 97,923 17.2% Operating Transfers -Out 63,612 251,541 324,306 649,055 324,749 100.1% Rents & Leases 2,329,829 1,803,087 2,876,500 2,931,563 55,063 1.9% Supplies & Material 437,889 544,371 610,010 609,982 (28) (0.0)% Transfer to Infrastructure - 112,692 - - - -% Utility Purchase 15,669,935 17,626,020 18,900,000 21,090,000 2,190,000 11.6% Capital Improvement Program 3,620,032 8,388,762 18,586,868 4,732,275 (13,854,593) (74.5)% Total Dollars by Expense 34,463,553 42,098,850 57,864,802 47,487,138 (10,377,663) (17.9)% Category UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 493 UTILITIES 3udget Summary a_ 1 Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Return on Investments Total Revenues FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 45,184 51,021 10,000 10,000 - -% 160,528 442,829 154,958 84,403 (70,555) (45.5)% 534,328 636,666 576,632 576,632 - -% 34,862,279 36,764,774 39,346,148 40,913,999 1,567,851 4.0% 191,525 221,833 244,018 512,436 268,418 110.0% 2,002,342 955,122 878,000 904,280 26,280 3.0% 792,652 738,329 775,300 775,300 -% 38,588,838 39,810,575 41,985,056 43,777,050 1,791,994 4.3% Positions by Division CIP Water Fund 9.53 9.05 9.05 8.03 (1.02) (11.29)% Water Customer Service 10.80 9.01 9.68 9.66 (0.02) (0.22)% Water Engineering (Operating) 1.37 1.12 1.37 1.35 (0.02) (1.46)% Water Operations and Maintenance 24.97 25.44 25.44 25.34 (0.10) (0.41)% Water Resource Management 1.71 1.53 3.03 3.52 1.49 16.17% Total 48.38 46.15 48.53 47.90 (0.68) (1.40)% FY 2015 Actuals 0.25 0.85 0.20 0.20 Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource 0.25 Management 0.15 0.25 FY 2016 Actuals 0.25 0.85 FY 2017 Adopted Budget 0.23 0.75 0.20 0.20 0.20 0.20 0.15 0.15 0.25 FY 2018 Adopted Budget FY 2018 Change FTE 0.23 0.65 0.20 0.20 0.15 0.25 0.01 (0.10) FY 2018 Salary 16,349 49,536 33,975 38,979 28,520 43,493 Business Analyst 1.62 1.68 1.73 1.53 (0.20) 229,101 Cement Finisher 0.25 0.25 0.25 0.56 0.31 51,747 Contracts Administrator 0.10 0.10 0.10 0.10 - 11,367 494 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification Coordinator Utilities Projects Customer Service Representative Customer Service Specialist Customer Service Specialist -Lead Engineer Engineering Manager - Electric FY 2015 Actuals 1.34 1.56 0.66 0.59 1.00 0.15 Engineering Manager - WGW 0.33 Engineering Technician III 0.45 Equipment Operator 0.31 Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician II 0.10 Heavy Equipment Operator 2.00 Heavy Equipment Operator - Install/Repair Inspector, Field Services Maintenance Mechanic -Welding Manager Customer Service Manager Customer Service and Meter Reading Manager Utilities Compliance Manager Utilities Credit & Collection Manager Utilities Marketing Services Manager Utilities Operations WGW Manager Utilities Program Services Meter Reader Meter Reader -Lead Planner Power Engineer Principal Business Analyst FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget 1.34 1.09 1.09 1.26 1.56 1.81 0.42 0.66 0.66 0.42 0.59 0.59 1.00 1.00 1.00 0.15 0.15 0.15 0.33 0.33 0.33 0.45 1.45 0.45 (1.00) 0.31 0.31 - (0.31) - FY 2018 Change FTE FY 2018 Salary 0.10 2.00 0.10 0.80 0.20 1.95 1.95 0.20 0.20 0.25 121,165 136,712 54,820 52,409 128,113 26,854 51,885 43,108 0.80 82,204 0.20 (0.10) 21,991 187,828 21,216 1.40 1.40 1.65 1.65 - 170,571 0.80 0.80 0.80 0.80 - 82,271 0.34 0.34 0.34 44,681 0.34 0.50 0.50 0.15 0.20 0.15 0.20 0.50 0.50 0.15 0.15 82,805 19,906 0.50 0.50 0.50 0.50 - 79,206 0.20 0.20 26,212 2.03 1.67 2.03 2.03 144,019 0.34 0.28 0.34 0.34 25,805 0.15 - - - - - 0.30 0.30 0.30 0.30 - 41,030 - 0.33 0.33 0.33 - 46,970 Principal Management Analyst 0.33 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 495 UTILITIES Staffing Job Classification Program Assistant I Project Engineer Resource Planner Restoration Lead SCADA Technologist Senior Business Analyst Senior Engineer Senior Mechanic Senior Project Engineer Senior Resource Planner Senior Technologist Senior Utilities Field Service Representative Senior Water Systems Operator Substation Electrician Supervisor Inspection Services Utilities Engineer Estimator Utilities Field Services Representative Utilities Install Repair -Lead -Welding Certified Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair Assistant Utilities Install/Repair-Lead Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator Utilities Safety Officer Utilities Supervisor Water Meter Cross Connection Technician Water System Operator I FY 2015 Actuals 0.33 2.00 0.20 0.31 0.80 0.66 0.75 0.34 0.25 1.05 0.29 0.49 FY 2016 Actuals 0.33 2.00 0.10 0.31 0.80 0.66 1.00 0.34 0.55 0.49 FY 2017 Adopted Budget 0.33 2.00 0.70 0.31 0.80 0.66 1.00 0.34 FY 2018 Adopted Budget 0.33 2.00 1.20 0.31 0.80 0.66 1.00 0.34 1.69 1.68 0.49 0.49 FY 2018 Change FTE 0.50 FY 2018 Salary 25,516 275,777 164,688 31,144 117,625 84,153 139,236 36,710 (0.01) 250,573 54,844 2.00 2.00 2.00 2.00 - 218,401 0.40 0.40 0.40 0.40 50,486 0.29 0.29 0.43 0.43 0.43 0.43 51,776 1.50 0.46 0.69 1.50 0.46 0.69 1.50 0.46 0.69 1.50 0.46 0.69 156,953 52,421 73,187 2.05 2.05 1.90 1.90 - 193,859 0.35 0.35 0.35 0.35 30,288 1.02 1.02 1.02 1.02 113,581 0.15 0.15 0.25 0.35 0.10 40,871 0.34 0.34 0.34 0.34 - 32,654 0.40 0.40 0.40 44,371 1.00 0.15 0.15 0.15 0.15 - 16,801 2.62 2.00 2.62 2.91 2.00 2.91 - 367,685 1.00 (1.00) 496 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES Staffing Job Classification FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted FY 2018 Budget Change FTE FY 2018 Salary Water System Operator II Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 3.34 45.66 2.72 3.34 42.95 3.21 3.34 45.85 3.34 321,589 45.29 (0.56) 5,140,038 213,252 2.73 2.61 (0.12) 48.38 46.15 48.58 47.90 (0.68) 5,353,290 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 497 UTILITIES 3udget Reconciliation Prior Year Budget 48.58 57,864,802 41,985,056 15,879,747 Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Capital Improvement Funding Adjustments Water Commodity Purchases Expenditure Adjustments Water Sales Revenue Adjustment Water Utility Sales to the City Revenue Adjustment Staff Reallocations within Utility Program Services and Resource Management Division State Water Resouce Control Board Fee Adjustment Bay Area Water Supply & Conservation Agency Fee Adjustment Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement and TE-05000 Radio Infrastructure Replacement) ARC Document Solutions (Print & Mail Allocated Charges Realignment) General Fund Cost Allocation Plan Adjustment Dispatch Service Allocated Charges Adjustment General Liability Insurance Allocated Charges Adjustment Ground Maintenance Allocated Charges Adjustment Print & Mail Allocated Charges Adjustment Rents and Leases Expenditure Alignment Storm Drain Allocated Charges Adjustment Storm Water Management Fee Allocated Charges Adjustment Street Cut Allocated Charges Adjustment Utilities Administration Allocated Charges Adjustment Utilities Allocated Charges Adjustment Vehicle Replacement & Maintenance Allocated Charges Adjustment 0.27 325,982 (13,776,276) 2,190,000 - 1,464,810 115,286 57,0991 — 50,000 47,100 97,814 (28) 294,698 113,408 11,873 42,842 325,982 (14,070,974) 2,190,000 (1,464,810) (115,286) 57,099 50,000 47,100 97,814 (28) 113,408 11,873 42,842 95 — 95 (5,380) (5,380) 55,063 55,063 36 36 — 61 61 — 28,928 28,928 — 10,800 10,800 — 144,349 144,349 43,199 43,199 Adjustments to Costs of Ongoing Activities 0.27 (10,563,035) 1,874,794 (12,437,829) 498 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Reconciliation Total FY 2018 Base Budget Positions 48.85 Net Expenditures Revenues Water Fund 47,301,767 43,859,850 3,441,918 Budget Proposals 1 Supplemental Pension Trust Fund Contribution 2 Fire Hydrant Maintenance Program 3 Utilities Customer Service and Part -Time Staffing Reorganization 4 Pavement Restoration Staffing 5 Gas and Water Meter Shop Reorganization Budget Changes 140,385 0.15 49,174 791 (1.10) (0.95) (4,979) 185,371 (82, 800) (82,800) 140,385 82,800 49,174 791 (4,979) 268,171 Total FY 2018 Adopted Budget 47.90 47,487,138 43,777,050 3,710,089 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution - 0.00 140,385 = 0 140,385 This action establishes a transfer from the Water Fund to the General Benefits Fund to contribute to the establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $140,385 which represents approximately 10% of the Water Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and increases associated with the unfunded accrued liability. (Ongoing net costs: $0) Performance Results Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 499 UTILITIES 3udget Adjustments ud • et Ad'ustments Net Positions Expenditures Revenues Water Fund 2 Fire Hydrant Maintenance Program =1=r- (82,800) ▪ 82,800 Historically, Utilities maintained the City's fire hydrants, performing various tasks including clearing overgrowth, painting, flow testing hydrants, and ensuring compliance with the National Fire Protection Agency (NFPA) standards. With the growing list of backlog for this maintenance work, one-time additional funding will be provided in FY 2018 to the Fire Department to clear this backlog. Going forward, ongoing maintenance of fire hydrants will be shared between the Fire and Public Works Departments instead. Funding wil be realigned in FY 2019 to reflect the realignment of responsibilities. (Ongoing net costs: $82,800) Performance Results © © O 0 Bringing fire hydrants in compliance with standards set by the National Fire Protection Agency will increase safety of the community, and assist in improving the department Insurance Service Office (ISO) rating. 3 Utilities Customer Service and Part -Time Staffing Reorganization This action reorganizes and reallocates various part-time employees' funding department -wide to better align resources based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff impacting 19 positions. Within this reorganization, impacts to the Water Fund include: a net increase of 0.96 for four Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.8 for three Maintenance Assistants and 0.24 for four Administrative Specialists I; and a decrease of 0.02 for one Administrative Specialist - II. (Ongoing net costs: $49,174) Performance Results O 0 The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service counter in the Civic Center lobby to assist walk-in customers with Utilities -related services including billing, account services, and programs. With this additional position, the Utilities Call Center will improve performance and customer response time. 4 Gas and Water Meter Shop Reorganization NM -1.10 L (4,979) This action realigns the structure of the existing Gas and Water Meter shops by consolidating into one shop. This action eliminates the isolated job classifications and adds new job classifications to reflect the merged team. By combining these two meter shops, the City will be better positioned to respond to customer needs and unforeseeable workload changes. This will make the City's meter shop more agile and flexible in its continued service. The proposed consolidation is outlined below: (4,979) - Eliminate 3.0 Gas Meter Technicians II and add 3.0 Gas and Water Measurement and Control Technicians; - Eliminate 1.0 Water System Operator I and add 1.0 Gas and Water Measurement and Control Technician; and - Eliminate 1.0 Engineering Technician I II and add 1.0 Gas and Water Measurement and Control Technician - Lead. This action is subject to the meet and confer process. (Ongoing net savings: $4,979) Performance Results With this reorganization, Utilities will be able to reduce the risk of injuries, expand career opportunities, and reduce backlog of meter replacement and maintenance work for both the Gas and Water Meter Shops. 500 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET UTILITIES 3udget Adjustments 5 Pavement Restoration Staffing .0o This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water -Gas -Wastewater Division. The division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital improvement projects which will continue at current levels for the foreseeable future. With the crew's sole Cement Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing net costs: $791) Performance Results 0 This reclassification will allow Operations to restore pavement and concrete in a timely manner. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 501 CITY OF PALO ALTO NON -DEPARTMENTAL Description The General Fund Non -Departmental budget includes revenue and expenditure appropriations that are not related to a specific department or function. These costs typically benefit the City as a whole and include such items as Cubberley lease payments to Palo Alto Unified School Dis- trict. The Non -Departmental budget may also include estimated provisions or placeholders for certain revenues and expenditures that have not yet materialized or distributed at the time the budget is developed or adopted. These items can be one-time or ongoing depending on the nature and frequency of the item. In Fiscal Year 2018, the annualization of one-time items that appeared in the Fiscal Year 2017 Budget, including the $2.0 million dollar uncertainty reserve, the $500,000 Planning and Trans- portation Contingency, and the $250,000 Sustainability Contingency, are partially offset by an operational reserve of $500,000 for anticipated increases to city-wide contracts, including jani- torial services or various parking initiatives, and a $400,000 salary reserve. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 503 NON -DEPARTMENTAL 3udget Summary d Dollars by Category Cubberly - Lease Payments to PAUSD Contingent Accounts Salary Reserve City Manager City Council City Attorney Human Resources Human Services Resource Allocation Process (HSRAP) Innovations & Special Events Planning & Transportation Sustainability Budget Operational Reserve Budget Uncertainty Reserve Other FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % 6,426,080 5,584,808 5,751,150 5,923,685 172,535 - - 400,000 250,000 250,000 250,000 225,000 100,000 100,000 - 50,000 50,000 - 50,000 50,000 50,000 50,000 500,000 250,000 - 500,000 2,000,000 3.0% 400,000 -% - % (25,000) (10.0)% - -% - -% - -% - % (500,000) (100.0)% (250,000) (100.0)% 500,000 -% (2,000,000) (100.0)% Allocated Charges 757 719 (719) (100.0)% Contract Services 40,000 40,000 -% Debt Service 428,194 430,791 432,149 432,271 122 -% General Expense 271,640 46,590 236,756 236,756 - -% Operating Transfers -Out 2,573,060 5,061,723 5,102,329 4,874,446 (227,883) (4.5)% Rents & Leases 169,017 172,886 177,786 177,786 -% Transfer to Infrastructure 19,678,146 29,365,580 18,486,097 24,980,569 6,494,472 35.1% Total Dollars by Expense 29,546,893 40,662,378 33,726,985 38,290,513 4,563,527 13.5% 504 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET NON -DEPARTMENTAL 3udget Reconciliation Prior Year Budget 33,726,985 33,726,985 Base Adjustments One -Time Prior Year Expenditures Deleted Budget Uncertainty Reserve Planning and Transportation Contingency Sustainability Contingency Transfer from the General Fund: Residential Preferential Parking Fund 2016 Elections Funding Transfer to Vehicle Maintenance Fund (2,000,000) (500,000) (250,000) (230,000) (150,000) (158,232) (2,000,000) (500,000) (250,000) (230,000) (150,000) (158,232) One -Time Prior Year Expenditures — (3,288,232) — (3,288,232) Adjustments to Costs of Ongoing Activities Infrastructure Transfer Adjustment Airport Fund Transfer Adjustment (FY 2018, $200,000 Loan) Information Technology Transfer Adjustment Transfer to Electric Fund Cubberley Lease Payments to PAUSD Adjustment Transfer to Public Art Fund Transfer to University Avenue Parking Fund Transfer to Debt Service Funds Transfer to General Liability Fund (CMR #7176), approved on August 22, 2016 Print & Mail Allocated Charges Adjustment Debt Service Expenditure Adjustments 6,190,472 (504,150) 259,837 186,332 172,535 86,324 38,637 (9,175) 5,000 (719) (277) 6,190,472 (504,150) 259,837 186,332 172,535 86,324 38,637 (9,175) — 5,000 (719) (277) Adjustments to Costs of Ongoing Activities — 6,424,816 - 6,424,816 Total FY 2018 Base Budget 36,863,569 36,863,569 Budget Adjustments 1 FY 2018 Operations Reserve 2 Transfer to Infrastructure Reserve 3 Salary Reserve 500,000 304,000 400,000 500,000 304,000 400,000 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 505 NON -DEPARTMENTAL Budget Reconciliation 4 City-wide Parking Evaluation Study 5 Transfer to University Avenue Fund 6 Council Contingency Reduction Total Budget Adjustments Total FY 2018 Adopted Budget Positions Budget Adjustments Expenditures 150,000 97,944 (25,000) 1,426,944 38,290,513 Net General Fund 150,000 97,944 (25,000) 1,426,944 38,290,513 1 FY 2018 Operations Reserve 500,000 This action establishes a reserve for FY 2018 operations for anticipated expenses that do not yet have fully refined costs or financial implications outlined. During the development of the FY 2018 budget, a number of initiatives were brought forward with significant funding requests for consideration and inclusion in the recommended actions in this budget document. Initiatives included but were not limited to a new contract for janitorial services citywide, potential matching funds for grants, and significant citywide change management projects including parking and transportation. However, through the research and analysis completed in evaluating these requests, it was determined that insufficient information was available to provide a recommended funding level. Therefore, this reserve is intended to proactively set aside some funding for the needs anticipated to arise in FY 2018, though it alone is insufficient to meet all the potential needs. Increasing costs for existing services and potential cash flow loans for the start-up of significant initiatives such as paid parking are all potential uses of these funds. As these projects are evaluated and funding needs are refined, recommendations for use of this reserve will be brought forward through City Manager Reports in FY 2018 including a status of the reserve level based on approved or recommended actions. (Ongoing costs: $0) Performance Results No impacts to current service levels are anticipated and this reserve will ensure maintenance of the General Fund Budget Stabilization Reserve at the City Council recommended level of 18.5 percent. 2 Transfer to Infrastructure Consistent with the direction provided by the City Council on June 27th, 2017 during the hearing to adopt the Fiscal Year 2018 budget, this action transfers an additional $304,000 from the General Fund to the Capital Improvement Fund to increase the Infrastructure Reserve. This funding was derived from savings generated by a redistribution of costs associated with Cubberley from the General Fund to the Cubberley Maintenance Fund. (Ongoing costs: $0) Performance Results This action will continue the high quality implementation of the Capital Improvement Plan. 3 Salary Reserve 400,000 This action establishes a one-time salary reserve of $400,000 in FY 2018 to proactively fund anticipated implications of upcoming salary studies and labor negotiations. The Human Resources Department is currently facilitating a management compensation study as discussed during the most recent approved agreement with the management and professionals employee group. Currently the FY 2018 budget does not assume any implications associated with this study, therefore one use of the funds set aside in the reserve will be to ensure sufficient funding for the recommendations of the study and the City Council. Staff will return to the City Council with recommendations to spend the reserve once the salary survey is complete. (Ongoing costs: $0) 506 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET NON -DEPARTMENTAL 3udget Adjustments ud•et Adjustments Positions Net Expenditures Revenues General Fund Performance Results This action will continue the City's efforts to recruit and retain a high -quality workforce. 4 City-wide Parking Evaluation Study 0.00 150,000 This action provides $150,000 in one-time funding to evaluate the parking ecosystem in the City of Palo Alto. The City continues to refine its parking activities, including the study and implementation of paid parking programs and the building of new parking infrastructure in special parking districts at University Avenue and California Avenue. The City is also continuing and exploring the expansion of Residential Preferential Parking Districts such as Evergreen, College Terrace, Crescent Park, and Southgate. An outside study will help inform the path forward for the City's parking and transportation efforts, contribute to the integration of a strategic vision across each of those efforts, and review what organizational structure would best manage these new initiatives. (Ongoing costs: $0) Performance Results This action will increase the quality of the City's long-term strategy for parking programs through use of consultant services to independently evaluate and make recommendations on the City's organizational structure to address parking and transportation activities. 5 Transfer to University Avenue Fund Consistent with the Finance Committee's recommended revisions approved on May 18th, 2017, this action increases a transfer from the General Fund to the University Avenue Fund. In order to fully fund parking initiatives in respective funds, various increases to the costs of parking permits were recommended. In the University Avenue Fund, employee parking permit prices were recommended to increase from $466.00 to $730.00 per year, an increase of $264.00. The General Fund transfers funds to the University Avenue Fund each year to provide parking permits for City staff; this increase represents the marginal costs associated with the increase in permit costs for City staff permits. (Ongoing costs: $97,944) Performance Results 4 This action will provide funding to implement a cost effective parking program. 6 Council Contingency Reduction 11111. 0.00 This ongoing action decreases the Council Contingency by $25,000, from $250,000 to $225,000, in order to align with historical tracking and anticipated expenditures. This action results in ongoing savings of $25,000 to help balance the General Fund. (Ongoing savings: $25,000) (25,000) 0 (25,000) Performance Results This action ensures sufficient funding for the Council Contingency while minimizing the cost. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 507 P 508 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET EMPLOYEE INFORMATION CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 509 CITY OF PALO ALTO GENERAL BENEFITS FUND OVERVIEW General Benefits Fund Overview The General Benefits Fund includes funding for employee pension benefits, health benefits (medical, dental, and vision) for current City employees and several other benefits, such as life insurance, the employee assistance program, and the employee commute program. Funding for retired employees' healthcare costs is reflected in the Retiree Health Benefits Fund, discussed elsewhere in this document. There is an overall net $6.0 million increase in employee pension, healthcare costs, and other benefits costs from the Fiscal Year 2017 Adopted Budget amount of $55.87 million to the Fiscal Year 2018 Budget amount of $61.9 million. This increase is primarily driven by changes in the pension rate, health care cost increases, and a citywide increase of 6.85 positions, or 0.6 percent (1,052.1 positions in the Fiscal Year 2017 Adopted Budget to 1,058.95 positions in the Fiscal Year 2018 Adopted Budget). It should be noted that two of these positions were already approved by the City Council in Fiscal Year 2017. Only 4.85 positions are recommended to be added in this Budget document. Please refer to the Internal Service Fund Overview section of this docu- ment for further discussion. PENSION COSTS CaIPERS annually prepares an actuarial analysis to determine the City's pension liability and annual required contribution for miscellaneous and safety employees. This budget includes the most recent pension rates from CaIPERS which, compared to the Fiscal Year 2017 rates, repre- sent a 1.3 percentage point increase in the pension contribution rate for miscellaneous groups (from 28.9 percent to 30.2 percent) and a 4.29 percentage point increase in the pension contri- bution rate for safety groups (from 45.4 percent to 49.69 percent) for Fiscal Year 2018. With the passage of the California Public Employees' Pension Reform Act (PEPRA), the City has three retirement tiers for Miscellaneous and Safety employees. As of June 2017, 38 percent of the City's employees are either in Tier 2 or Tier 3. For Fiscal Year 2018, CaIPERS changed their methodology for calculating pension liability. In prior years, the City of Palo Alto was eligible to prepay the entire employer contribution amount, including both the normal cost and the unfunded accrued liability. This prepayment generated $1.13 million in pension expense savings citywide in Fiscal Year 2017. For Fiscal Year 2018, only the unfunded accrued liability amount can be prepaid. The City of Palo Alto will once again use this mechanism to generate savings expected to be $813,000 in Fiscal Year 2018 of which $510,000 is in the General Fund. The savings are calculated by CaIPERS, and assume an average 7.5 percent investment return. Per CMR #7308, which transmitted the CaIPERS Actuarial Valuations as of June 30, 2015 to the City Council on December 12, 2016, the City's Unfunded Accrued Liability (UAL) for the Miscella- neous Plan for Fiscal Year 2018 was $219.7 million, with UAL payments of $15.8 million due in Fiscal Year 2018. In addition, CaIPERS calculated that the Normal Cost to the City of Palo Alto for the Miscellaneous Plan would be $7.8 million, for a total of $23.6 million due from the City for the Safety Plan in Fiscal Year 2018. In CMR #7308, it was also noted that the City's UAL for the Safety Plan in Fiscal Year 2018 was $118.8 million, with UAL payments of $7.1 million due in Fiscal Year 2018. In addition, CaIPERS calculated that the Normal Cost to the City of Palo Alto for the GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 511 GENERAL BENEFITS FUND OVERVIEW Safety Plan would be $4.4 million, for a total of $11.5 million due from the City for the Safety Plan in Fiscal Year 2018. In December 2016, the CaIPERS board voted to lower the rate of return to 7.0 percent from 7.5 percent. This decrease will be phased in over three years and will not begin until July 2018 (or Fiscal Year 2019). In anticipation of this lowered rate of return, and to proactively address the City's unfunded pension liability, the City Council approved investing funds in an irrevocable IRS section 115 Pension Trust Fund as part of CMR #7553 on January 23, 2017. That action autho- rized an initial deposit of $2.1 million in General Fund proceeds to be transferred to the IRS Sec- tion 115 Pension Trust Fund, or approximately 10 percent of the General Fund Pension annual cost. Included in this FY 2018 Adopted Budget are additional contributions from other funds throughout the City at the same 10 percent level into the IRS Section 115 Pension Trust Fund. In total, $3.5 million will be contributed to the IRS Section 115 Pension Trust Fund. This additional investment in retirement prefunding will help mitigate the City's risk from lower than anticipated rates of return and from other factors that would affect the City's pension costs. These transfers are discussed in each department section where they are budgeted. The City will bring forward an ongoing strategy to continue addressing the increased pension costs and growing unfunded liability in Fall 2017. This Fiscal Year 2018 Adopted Budget closely manages ongoing resources and recommends a forecasted surplus in Fiscal Year 2019 in order to provide funding for this ongoing strategy. In addition, it is anticipated the excess funds resulting in the current year (FY 2017) from higher than anticipated revenues and estimated expenditure savings can be used for another one-time contribution through the Fiscal Year 2017 year-end review. Another pension cost savings measure pursued by the City through labor negotiations and first implemented in Fiscal Year 2016 is having employees pay an additional portion of their pension costs above the current employee contribution level. With the adoption of labor contracts all bargaining units in the safety group will pick-up 3.0 percent of the employer pension contribu- tion upon completion of an amendment to the City's contract with CaIPERS. SEIU employees and employees in the management group are anticipated to pick-up 1.0 percent of the employer pension contribution by Fiscal Year 2019. Offsetting increases to the employer share of pension contributions by increasing the employee contribution is an important tool to help the City con- tain pension costs. HEALTHCARE COSTS The Fiscal Year 2018 budget for healthcare is based on the health plan choices employees made for calendar year 2017. For calendar year 2018, the budget assumes an 8 percent annual increase in medical costs for labor groups on the 90/10 medical cost plan and a 4 percent annual health care cost increase for the labor groups on the flat rate contribution structure. Fur- ther, this budget includes a 4 percent annual increase in dental and vision costs. Based on the approved agreements with IAFF, POA, FCA, PAPMA, and SEIU, all employees except those in the Utilities Management Professional Association of Palo Alto (UMPAPA), will be on the flat rate contribution structure by calendar year 2018. Ongoing increases in healthcare and other benefit costs will be included in the next set of negotiations for FY 2019 implications. Consistent with the Fiscal Year 2017 Adopted Budget and Government Accounting Standards Board regulations that require government agencies to recognize the true cost of medical health care by active employees and retirees, an implied subsidy for retiree healthcare was cal - 512 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL BENEFITS FUND OVERVIEW culated. Health care premiums are the same regardless of age or active status, with the excep- tion of Medicare premiums, and the implied subsidy is calculated in order to recognize the higher cost of medical services for retirees, which is reduced from the active employees' health care costs. In Fiscal Year 2018, the full cost of active employee healthcare is budgeted in the var- ious City departments and collected in the General Benefits Fund to be paid to CaIPERS. In order to account for the implied subsidy, health care costs for active employees have been reduced in the General Benefits Fund by $2.4 million, and a corresponding transfer from the General Benefits Fund to the Retiree Health Benefits Fund has been continued to reflect the full payment of the City's Annual Required Contribution (ARC) for Retiree Healthcare in the Retiree Health Benefits Fund. Additional discussion of Retiree Healthcare costs and the ARC are located in the Retiree Health Benefits Fund section of this document. GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 513 GENERAL BENEFITS FUND OVERVIEW 3udget Summary ill FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Dollars by Category Salary & Benefits Healthcare 16,584,488 17,697,809 18,059,976 18,845,038 785,062 4.3% Other Benefits 768,061 613,967 1,090,733 1,090,740 7 —% Retiree Medical 25,652,887 26,076,879 34,192,389 39,304,074 5,111,685 14.9% Salary 502,190 513,382 22,963 23,422 459 2.0% Total Salary & Benefits 43,507,626 44,902,036 53,366,061 59,263,275 5,897,213 11.1% Contract Services 56,819 172,858 215,200 215,200 —% General Expense 150 — — —% Operating Transfers -Out 2,102,000 2,291,745 2,411,030 119,285 5.2% Total Dollars by Expense 43,564,445 47,177,044 55,873,006 61,889,505 6,016,498 10.8% Category Revenues Charges for Services 12 — —% Operating Transfers -In 1,427,044 1,427,044 —% Other Revenue 44,464,235 46,924,554 54,544,108 59,733,098 5,188,990 9.5% Return on Investments 202,973 63,865 4,000 15,765 11,765 294.1% Total Revenues 44,667,208 46,988,431 54,548,108 61,175,907 6,627,799 12.2% 514 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GENERAL BENEFITS FUND OVERVIEW 3udget Reconciliation Prior Year Budget 0.48 55,873,005 54,548,108 1,324,897 Base Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefit Adjustments Citywide Pension Adjustments Implied Subsidy Transfer to the Retiree Healthcare Fund Citywide Dental Insurance Adjustments Citywide Healthcare Insurance Adjustments Citywide Vision Insurance Adjustments PARs Contributions and Expenses Department Charges for General Benefits Return on Investment Adjustments Adjustments to Costs of Ongoing Activities 468 3,684,641 119,285 (22,439) 810,376 (2,875) 1,427,044 — 6,016,500 1,427,044 5,188,990 11,765 6,627,799 468 3,684,641 119,285 (22,439) 810,376 (2,875) (5,188,990) (11,765) (611,299) Total FY 2018 Adopted Budget 61 889 505 61,175,907 17711 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 515 RETIREE HEALTH BENEFIT FUND OVERVIEW Retiree Health Benefit Fund Overview In addition to providing pension benefits, the City participates in the California Public Employ- ees' Medical and Hospital Care Act (PEMHCA) program to provide certain health care benefits for retired employees. This fund reflects costs for this program as well as payments for the unfunded liability for future medical benefits that will be provided to current and future retirees. Based on the June 30, 2015 actuarial study results updated by an outside consultant for the lat- est CaIPERS mortality rate assumptions, investment gains for the Retiree Healthcare Trust Fund as of June 30, 2015, and the lowering of the assumed investment returns from 7.61 percent to 7.25 percent, the City's Fiscal Year 2018 annual Actuarial Required Contribution (ARC) is $16.94 million, an increase of $780,000 or 4.8%, from the Fiscal Year 2017 Adopted Budget amount of $16.16 million. The June 30, 2015 actuarial study was performed in accordance with applicable actuarial stan- dards and Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Post -Employment Benefits Other Than Pension. The ARC includes the normal cost of the plan for the fiscal year, plus amortization towards the Unfunded Actuarial Accrued Liability (UAAL). According to the valuation as of June 30, 2013, approximately 33 percent of the UAAL is attributable to current active employees and 67 per- cent is attributable to retirees. The City has established an irrevocable trust fund to account for assets accumulated to offset the retiree medical for current and future retirees. The annual ARC is fully funded in the City's General Fund, Enterprise Funds, and Other Funds. Respectively, the General Fund, Enterprise Funds, and Other Funds fund 66 percent, 29 percent, and 5 percent of the ARC cost. As stated above, the ARC assumed for the Fiscal Year 2018 budget is $16.94 million, however, the charges to the City's funds is budgeted at $14.54 million. The difference of $2.4 million rep- resents the City's implied subsidy for retiree healthcare. There is a requirement, first imposed in Fiscal Year 2017, which dictates that government agencies must recognize the true cost of med- ical health care by active employees and retirees. The health care premiums are the same regardless of age or active status with the exception of medicare premiums. The new require- ment is intended to recognize that as people age their medical costs increase; therefore, an actuarial calculation has been completed to recognize the higher cost of medical services for retirees, which is reduced from the active employees' health care costs, also known as the implied subsidy. In Fiscal Year 2018, the full cost of active employee healthcare is budgeted in the various City departments and collected in the General Benefits Fund to be paid to CaIPERS. In order to account for the implied subsidy, healthcare costs for active employees have been reduced in the General Benefits Fund by $2.4 million and a transfer from the General Benefits Fund of $2.4 million to the Retiree Health Benefits Fund has been established to reflect the full payment of the City's Annual Required Contribution (ARC) for Retiree Healthcare in the Retiree Health Benefits Fund. 516 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET RETIREE HEALTH BENEFIT FUND OVERVIEW Budget Summary J Dollars by Category Salary & Benefits FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change $ FY 2018 Change % Other Benefits 71,619 71,237 60,000 60,000 — —% Retiree Medical 13,643,046 14,372,057 16,100,000 16,938,000 838,000 5.2% Total Salary & Benefits 13,714,665 14,443,294 16,160,000 16,998,000 838,000 5.2% Total Dollars by Expense Category 13,714,665 14,443,294 16,160,000 16,998,000 838,000 5.2% Revenues Operating Transfers -In — 2,102,000 2,291,745 2,411,030 119,285 5.2% Other Revenue 13,470,903 12,343,188 13,808,255 14,526,970 718,715 5.2% Return on Investments 70,997 69,922 57,700 57,700 —% Total Revenues 13,541,900 14,515,110 16,157,700 16,995,700 838,000 5.2% Budget Reconciliation Positions Expenditures Revenues Net Prior Year Budget 16,160,000 16,157,700 2,300 Base Adjustments Adjustments to Costs of Ongoing Activities Citywide Retiree Health Benefits Adjustment Implied Subsidy Transfer from the General Benefits Fund 718,715 718,715 119,285 119,285 Adjustments to Costs of Ongoing Activities 838,000 838,000 Total FY 2018 Adopted Budget 16, 998, 000 16, 995, 700 2,300 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 517 CITY OF PALO ALTO ■ TABLE OF ORGANIZATION Table of Organization 1 FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FTE FY 2018 Change % General Fund Administrative Services Account Specialist Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate III Assistant Director Administrative 1.65 Services Buyer 2.00 Chief Procurement Officer 1.00 Contracts Administrator 1.70 Director Administrative Services/CFO 0.70 Director Office of Management and 1.00 Budget Manager Accounting 1.00 Manager Budget 0.00 Manager Real Property 1.00 Manager Revenue Collections 0.00 Manager Treasury, Debt & Investments 5.95 4.59 2.00 1.00 0.00 1.00 0.00 Payroll Analyst 2.00 Principal Management Analyst 1.00 Senior Accountant 3.00 Senior Buyer Senior Management Analyst Storekeeper Storekeeper -Lead Warehouse Supervisor 0.00 5.90 0.00 1.00 0.50 Total Administrative Services 37.99 4.95 5.88 4.88 4.59 4.05 3.05 3.00 3.00 3.00 1.00 1.00 1.00 0.00 0.00 1.00 1.00 1.00 1.00 -1.00 -1.00 0.00 0.00 1.00 0.00 (17.01)% (24.69)% 0.00% 0.00% 0.00% 0.00% 1.75 1.65 1.65 0.00 0.00% 2.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 0.00 0.00% 1.70 1.70 2.70 1.00 58.82% 0.70 0.80 0.80 0.00 0.00% 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 0.00 0.00% 0.70 0.62 0.62 0.00 0.00% 1.00 0.60 0.60 0.00 0.00% 2.00 0.00 3.00 0.00 4.20 0.00 1.00 0.50 38.09 2.00 2.00 0.00 0.00 3.00 3.00 1.00 1.00 4.90 4.90 1.00 1.00 0.20 0.20 0.20 0.20 38.60 38.60 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% City Attorney Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator Deputy City Attorney Legal Fellow Legal Services Administrator Principal Attorney 1.00 0.00 1.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 1.00 1.00 0.00 1.00 0.00 1.00 1.00 0.00 1.00 1.00 0.00 1.00 0.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 0.00 0.00 2.00 1.00 0.00 0.00 1.00 0.00 0.00 -1.00 200.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 519 TABLE OF ORGANIZATION Secretary to City Attorney Senior Assistant City Attorney Senior Deputy City Attorney Senior Legal Secretary Senior Management Analyst FY 2015 Actuals 1.00 2.00 1.00 1.00 0.00 FY 2016 Actuals 1.00 2.00 1.00 1.00 1.00 FY 2017 Adopted Budget 1.00 2.00 1.00 1.00 1.00 FY 2018 Adopted Budget 1.00 0.00 0.00 1.00 1.00 FY 2018 Change FTE 0.00 -2.00 -1.00 0.00 0.00 FY 2018 Change % 0.00% (100.00)% (100.00)% 0.00% 0.00% Total City Attorney 11.00 11.00 11.00 11.00 0.00 0.00% City Auditor Administrative Assistant City Auditor Performance Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor Total City Auditor 1.00 1.00 0.50 0.00 0.00 2.00 0.00 1.00 0.00 1.00 1.00 2.00 4.50 5.00 0.00 1.00 0.00 1.00 1.00 2.00 0.00 1.00 0.00 1.00 1.00 2.00 5.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% City Clerk Administrative Associate Ill Assistant City Clerk City Clerk Deputy City Clerk Hearing Officer 2.00 1.00 1.00 1.00 0.75 2.00 1.00 1.00 1.00 0.75 2.00 1.00 1.00 1.00 0.75 Total City Clerk 5.75 5.75 5.75 2.00 1.00 1.00 1.00 0.75 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 5.75 0.00 0.00% City Manager Administrative Assistant Administrative Associate Ill Assistant City Manager Assistant City Manager/Utilities General Manager 1.00 1.00 2.00 0.00 1.00 1.00 2.00 1.00 1.00 2.00 0.00 0.00 1.00 1.00 0.00 0.00 0.00 -2.00 0.25 0.25 0.00% 0.00% (100.00)% 0.00% Assistant to the City Manager 0.00 0.00 0.00 2.00 2.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% Chief Sustainability Officer 0.05 0.00 0.00 0.00 0.00 0.00% City Manager 1.00 1.00 1.00 1.00 0.00 0.00% Deputy City Manager 0.00 0.00 0.00 2.00 2.00 0.00% Executive Assistant to the City 1.00 1.00 1.00 1.00 0.00 Manager Manager Communications 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 0.00 -1.00 (100.00)% Chief Communications Officer 0.00% Manager Economic Development Total City Manager 9.05 9.00 9.00 10.25 1.25 13.89% 520 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FTE FY 2018 Change % Community Services Administrative Assistant Administrative Associate III Assistant Director Community Services Building Serviceperson Building Serviceperson-Lead Coordinator Recreation Programs Director Community Services Division Manager Open Space, Parks and Golf Heavy Equipment Operator Inspector, Field Services Junior Museum & Zoo Educator Management Analyst Management Assistant Manager Community Services Manager Community Services Senior Program Manager Human Services Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead Producer Arts/Science Program Program Assistant I Program Assistant II Project Manager Senior Management Analyst Sprinkler System Representative Superintendent Community Services Superintendent Recreation Theater Specialist Volunteer Coordinator 1.00 0.75 2.00 2.00 2.00 4.00 1.00 1.00 0.07 2.00 2.75 1.00 1.00 5.00 5.00 0.00 6.00 1.00 5.00 2.00 11.75 6.75 4.00 0.00 1.00 4.00 2.00 0.00 1.00 0.75 1.00 1.00 2.00 2.00 2.00 4.00 1.00 1.00 0.07 2.00 2.75 1.00 1.00 5.00 1.00 1.00 1.00 1.00 2.00 2.00 2.00 2.00 4.00 1.00 1.00 0.07 2.00 2.75 1.00 1.00 5.00 4.00 4.00 1.00 6.00 1.00 5.00 2.00 12.50 7.00 4.00 0.10 1.00 4.00 2.00 1.00 1.00 0.00 1.00 6.00 1.00 5.00 2.00 12.50 8.00 4.00 0.10 1.00 4.00 2.00 1.00 1.00 0.00 2.00 2.00 4.00 1.00 1.00 0.07 2.00 3.60 1.00 1.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.85 0.00 0.00 0.00 4.00 0.00 1.00 0.00 6.00 0.00 1.00 0.00 5.00 0.00 2.00 0.00 11.00 -1.50 8.00 0.00 4.00 0.00 0.10 0.00 1.00 0.00 4.00 0.00 2.00 0.00 1.00 0.00 2.00 1.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 30.91% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (12.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% Total Community Services 75.82 77.42 78.42 78.77 0.35 0.45% Development Services Administrative Assistant Administrative Associate II Administrative Associate III Assistant Chief Building Official Assistant Director Public Works Associate Engineer 1.00 3.02 1.01 0.00 0.02 0.16 1.00 3.02 1.01 1.00 0.02 0.16 1.00 3.00 1.00 1.00 0.00 0.02 1.00 3.00 1.00 1.00 0.00 0.02 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 521 TABLE OF ORGANIZATION Associate Planner Building Inspector Specialist Building/Planning Technician Chief Building Official Chief Planning Official Code Enforcement Officer Code Enforcement -Lead Deputy Chief/Fire Marshal Development Project Coordinator II Development Project Coordinator III Development Services Director Engineer Engineering Technician III Fire Fighter Fire Inspector Hazardous Materials Inspector Industrial Waste Inspector Industrial Waste Investigator Inspector, Field Services Management Analyst Manager Development Center Manager Environmental Control Program Manager Planning Manager Urban Forestry Manager Watershed Protection Planner Planning Arborist Plans Check Engineer Project Engineer Project Manager Senior Engineer Senior Industrial Waste Investigator Senior Management Analyst Senior Planner Senior Technologist Supervisor Inspection and Surveying Surveyor, Public Works FY 2015 Actuals 0.90 3.00 1.80 1.00 0.20 0.50 0.00 0.84 2.00 3.00 1.00 0.62 2.10 1.00 4.00 1.90 0.01 0.21 0.70 0.01 1.00 FY 2016 Actuals 0.90 4.00 1.80 1.00 0.20 0.40 0.20 0.85 2.00 3.00 1.00 0.62 2.10 1.00 4.00 1.90 0.01 0.21 0.70 1.01 1.00 0.10 0.10 1.80 0.04 0.05 0.80 0.25 1.00 0.15 0.07 0.68 0.01 1.00 0.40 0.50 0.27 0.47 2.00 0.04 0.05 0.25 0.25 0.00 0.13 0.07 0.68 0.01 1.00 0.36 0.00 0.27 0.00 FY 2017 Adopted Budget 0.90 4.00 2.30 1.00 0.00 0.40 0.20 0.80 2.00 3.00 1.00 0.64 1.78 0.00 3.20 1.60 0.01 0.35 0.68 1.01 1.00 FY 2018 Adopted Budget 0.90 4.00 2.30 1.00 0.00 0.40 0.20 0.80 2.00 3.00 1.00 0.64 1.78 0.00 3.20 1.60 0.01 0.35 0.68 1.01 1.00 0.10 0.10 2.00 0.04 0.00 0.17 0.25 0.00 0.03 0.07 0.46 0.01 1.00 0.24 0.00 0.27 0.00 2.00 0.04 0.00 0.17 0.29 0.00 0.03 0.00 0.46 0.01 1.00 0.24 0.00 0.27 0.00 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% FY 2018 Change % 0.00 0.00 0.00 0.00 0.04 0.00 0.00 -0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 16.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Development Services 38.59 39.32 36.53 36.50 -0.03 (0.08)% Fire 40 -Hour Training Battalion Chief 1.00 1.00 1.00 1.00 0.00 0.00% 522 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION 40 -Hour Training Captain Administrative Assistant Administrative Associate II Battalion Chief Business Analyst Deputy Chief/Fire Marshal Deputy Director Technical Services Division Deputy Fire Chief 2.00 Emergency Medical Service Director 1.00 Emergency Medical Services Data Specialist Fire Apparatus Operator 30.00 Fire Captain 22.00 Fire Chief 1.00 Fire Fighter 40.00 Fire Inspector 0.00 Geographic Information System Specialist Hazardous Materials Inspector Police Chief Senior Management Analyst Senior Technologist FY 2015 Actuals 0.00 1.50 2.00 3.00 0.80 0.00 0.20 FY 2016 Actuals 1.00 1.00 2.00 3.00 0.80 0.00 FY 2017 Adopted Budget 1.00 1.00 2.00 3.00 0.80 0.05 0.20 0.20 2.00 2.00 1.00 1.00 1.00 1.00 30.00 21.00 1.00 40.00 0.00 0.50 0.50 0.00 0.50 1.00 0.00 0.00 0.00 1.00 0.00 Total Fire 107.50 106.50 FY 2018 Adopted Budget 1.00 1.00 2.00 3.00 0.80 0.05 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.00 2.00 0.00 1.00 0.00 1.00 1.00 30.00 21.00 1.00 41.00 0.80 30.00 21.00 1.00 41.00 0.80 0.50 0.50 0.30 0.30 0.00 0.00 1.00 1.00 0.00 0.00 108.65 108.65 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00 0.00% Human Resources Administrative Assistant Assistant Director Human Resources Director Human Resources/CPO Human Resources Assistant Human Resources Representative Human Resources Technician Manager Employee Benefits Manager Employee Relations Senior Human Resources Administrator Senior Management Analyst 1.00 1.00 1.00 4.00 2.00 0.00 1.00 1.00 1.00 1.00 1.00 0.00 2.00 4.00 1.00 1.00 4.00 4.00 1.00 1.00 Total Human Resources 16.00 16.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 0.00 2.00 3.00 4.00 4.00 1.00 1.00 1.00 1.00 4.00 3.00 1.00 2.00 16.00 16.00 -1.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 (100.00)% 0.00% 0.00% 0.00% 50.00% 0.00% 0.00% 0.00% -1.00 (25.00)% 1.00 100.00% 0.00 0.00% Library Administrative Assistant Administrative Associate III Assistant Director Library Services 1.00 0.00 1.00 1.00 0.00 1.00 1.00 0.00 1.00 0.00 1.00 1.00 -1.00 1.00 0.00 (100.00)% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 523 TABLE OF ORGANIZATION FY 2015 Actuals Business Analyst 1.00 Coordinator Library Programs 1.00 Director Libraries 1.00 1.00 Librarian 6.70 Library Assistant 4.50 Library Associate 7.00 7.00 Management Analyst 0.00 Division Head Library Services Library Specialist Management Assistant Manager Library Services Senior Librarian Supervising Librarian 1.00 4.00 8.50 0.00 FY 2016 Actuals 1.00 1.00 1.00 1.00 7.00 0.00 7.00 12.50 0.00 1.00 4.00 8.50 2.00 FY 2017 Adopted Budget 1.00 1.00 1.00 1.00 7.00 0.00 7.00 12.50 0.00 1.00 4.00 9.00 2.00 FY 2018 Adopted Budget 1.00 1.00 1.00 1.00 7.00 0.00 7.00 12.50 1.00 0.00 4.00 9.00 2.00 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 -1.00 0.00 0.00 0.00 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% Total Library 44.70 48.00 48.50 48.50 0.00 0.00% Office of Emergency Services Director Office of Emergency Services Office of Emergency Services Coordinator Program Assistant 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Total Office of Emergency Services 3.00 3.00 1.00 1.00 0.00 0.00 0.00% 0.00% 1.00 0.00 0.00% 3.00 3.00 0.00 0.00% Office of Sustainability Chief Sustainability Officer 0.50 1.00 1.00 Total Office of Sustainability 0.50 1.00 1.00 1.00 0.00 0.00% 1.00 0.00 0.00% Planning and Community Environment Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director PCE Associate Engineer Associate Planner Building/Planning Technician Business Analyst Chief Planning Official Chief Transportation Official Code Enforcement Officer Code Enforcement -Lead Coordinator Transportation Systems Management 1.00 1.00 1.00 2.00 1.00 1.00 0.10 0.20 1.00 0.80 0.50 1.50 0.00 0.90 1.00 1.00 1.00 2.00 1.00 1.00 0.10 0.20 1.00 0.80 0.50 1.60 0.80 0.85 1.00 1.00 0.00 3.00 1.00 1.00 0.10 0.70 1.00 1.00 0.70 1.60 0.80 1.00 1.00 0.00 3.00 1.00 0.73 0.10 0.70 1.00 1.00 0.43 1.60 0.80 0.60 0.88 0.00 0.00 0.00 0.00 0.00 -0.27 0.00 0.00 0.00 0.00 -0.27 0.00 0.00 0.28 0.00% 0.00% 0.00% 0.00% 0.00% (27.00)% 0.00% 0.00% 0.00% 0.00% (38.57)% 0.00% 0.00% 46.67% 524 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION Director Planning/Community Environment Management Analyst Manager Planning Parking Operations -Lead Planner Program Assistant II Project Engineer Senior Management Analyst Senior Planner Senior Project Engineer Traffic Engineering -Lead Transportation Planning Manager FY 2015 Actuals 1.00 0.40 1.20 0.00 3.15 0.00 1.65 1.00 7.60 0.20 0.00 0.00 FY 2016 Actuals 1.00 0.40 2.00 0.30 3.00 0.00 1.65 1.00 7.64 0.00 1.00 0.20 FY 2017 Adopted Budget 1.00 0.88 2.00 0.20 3.83 0.35 1.15 1.00 6.70 0.00 0.10 0.85 FY 2018 Adopted Budget 1.00 0.98 2.00 0.00 3.83 0.60 0.50 1.00 6.51 0.00 0.38 0.20 FY 2018 Change FTE 0.00 0.10 0.00 -0.20 0.00 0.25 -0.65 0.00 - 0.19 0.00 0.28 - 0.65 FY 2018 Change % 0.00% 11.36% 0.00% (100.00)% 0.00% 71.43% (56.52)% 0.00% (2.84) % 0.00% 280.00% (76.47)% Total Planning and Community Environment 28.20 31.04 31.56 30.24 -1.32 (4.18)% Police Administrative Assistant Administrative Associate II Animal Control Officer Animal Control Officer -Lead Animal Services Specialist II Assistant Police Chief 0.50 3.00 3.00 1.00 2.00 1.00 Business Analyst 1.20 Code Enforcement Officer 1.00 Communications Manager 0.00 Communications Technician 1.00 Community Service Officer 8.50 Court Liaison Officer 1.00 Crime Analyst 1.00 Deputy Director Technical Services Division Geographic Information System Specialist Police Agent Police Captain Police Chief Police Lieutenant Police Officer Police Records Specialist II Police Records Specialist -Lead Police Sergeant Program Assistant II 1.00 3.00 3.00 1.00 2.00 1.00 1.20 1.00 0.00 1.00 8.50 1.00 1.00 0.80 0.80 0.50 0.50 1.00 3.00 3.00 1.00 2.00 1.00 1.20 1.00 0.00 1.00 8.50 1.00 1.00 1.00 3.00 3.00 1.00 2.00 1.00 1.20 1.00 1.00 1.00 7.50 1.00 1.00 0.80 0.80 0.50 0.50 19.00 19.00 19.00 19.00 2.00 2.00 2.00 2.00 0.50 1.00 1.00 1.00 5.00 5.00 5.00 5.00 50.00 50.00 50.00 50.00 6.00 6.00 6.00 6.00 1.00 1.00 1.00 1.00 14.00 14.00 14.00 14.00 1.00 1.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 -1.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (11.76)% 0.00% 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 525 TABLE OF ORGANIZATION Property Evidence Technician Public Safety Communications Manager Public Safety Dispatcher Public Safety Dispatcher - Lead Public Safety Dispatcher I Public Safety Dispatcher II Public Safety Dispatcher -Lead Public Safety Manager I Public Safety Manager II Public Safety Program Manager Senior Management Analyst Senior Technologist Superintendent Animal Services Veterinarian Veterinarian Technician FY 2015 Actuals 2.00 0.00 0.00 0.00 2.00 14.00 4.00 2.00 1.00 0.00 1.00 0.00 1.00 1.00 2.00 FY 2016 Actuals 2.00 1.00 0.00 4.00 2.00 14.00 0.00 0.00 0.00 2.00 1.00 0.00 1.00 1.00 2.00 FY 2017 Adopted Budget 2.00 1.00 16.00 0.00 0.00 0.00 4.00 0.00 0.00 2.00 1.00 0.00 1.00 1.00 2.00 Total Police 154.00 155.00 155.00 FY 2018 Adopted Budget 2.00 1.00 16.00 0.00 0.00 0.00 4.00 0.00 0.00 2.00 1.00 0.00 1.00 1.00 2.00 FY 2018 Change FTE 0.00 FY 2018 Change % 0.00% 0.00 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 155.00 0.00 0.00% Public Works Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director Public Works Associate Engineer Building Serviceperson Building Serviceperson-Lead Cement Finisher Cement Finisher -Lead Coordinator Public Works Projects Director Public Works/City Engineer Electrician Engineer Engineering Technician Ill Equipment Operator Facilities Carpenter Facilities Maintenance -Lead Facilities Mechanic Facilities Painter Facilities Technician Heavy Equipment Operator Heavy Equipment Operator -Lead 1.00 0.60 2.63 0.00 1.28 0.30 1.00 1.80 0.00 0.00 0.00 1.00 0.80 0.30 1.20 3.46 1.00 1.85 5.55 1.75 0.00 2.13 0.85 1.00 0.60 2.63 0.00 0.85 0.30 1.00 1.80 3.00 0.26 1.00 1.00 0.80 0.40 1.20 3.46 1.00 1.85 5.55 1.75 0.00 2.33 0.85 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.80 3.00 0.26 0.50 1.00 0.80 0.66 1.47 3.46 1.00 1.85 0.00 1.75 5.55 2.33 0.85 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.00 3.00 0.26 1.50 1.00 0.80 0.66 1.47 3.46 1.00 1.85 0.00 1.75 4.05 2.33 0.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.80 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -1.50 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (44.44)% 0.00% 0.00% 200.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (27.03)% 0.00% 0.00% 526 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION Inspector, Field Services Landscape Architect Park Planner Management Analyst Manager Facilities Manager Maintenance Operations Manager Urban Forestry Manager Watershed Protection Planning Arborist Project Engineer Project Manager Senior Engineer Senior Management Analyst Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Controller Maintainer -Lead Traffic Controller Maintainer I Traffic Controller Maintainer II Tree Maintenance Person Tree Trim/Line Clear Tree Trim/Line Clear -Lead FY 2015 Actuals 0.83 0.00 0.60 0.00 1.95 0.96 0.00 0.75 0.30 1.63 1.47 1.11 0.10 0.53 0.31 1.00 1.94 2.00 1.00 7.00 1.00 FY 2016 Actuals 0.10 0.10 0.70 0.90 1.20 0.96 0.00 0.75 0.40 1.93 0.57 1.11 0.10 0.10 0.10 0.00 1.94 2.00 1.00 7.00 1.00 FY 2017 Adopted Budget 0.11 0.10 0.70 0.90 1.20 0.96 0.05 0.75 0.50 2.58 0.79 1.11 0.10 0.10 0.33 0.00 1.94 2.00 1.00 7.00 1.00 FY 2018 Adopted Budget 0.11 0.10 0.70 0.90 1.20 0.96 0.05 0.71 0.50 2.65 0.79 1.11 0.10 0.10 0.33 0.00 1.94 2.00 1.00 7.00 1.00 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.04 0.00 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (5.33)% 0.00% 2.71% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Public Works 52.98 54.59 55.93 54.66 -1.27 (2.27)% Total General Fund 58158 601171 613.94. 00292 -1.02 1017)°/o Enterprise Fund Public Works Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Director Public Works Assistant Manager WQCP Associate Engineer Business Analyst Buyer Chemist Chief Sustainability Officer Coordinator Public Works Projects Deputy Chief/Fire Marshal Electrician 0.45 0.40 0.10 2.15 0.10 1.30 2.00 1.35 0.13 1.00 3.00 0.10 1.00 0.08 3.00 0.45 0.40 0.10 2.15 0.10 1.30 2.00 1.35 0.00 1.00 3.00 0.00 1.00 0.07 3.00 0.30 0.40 0.10 2.15 0.10 1.30 2.00 1.99 0.00 0.00 3.00 0.00 0.00 0.07 3.00 0.30 0.40 0.10 2.15 0.10 1.30 2.00 2.99 0.00 0.00 3.00 0.00 0.00 0.07 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 50.25% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 527 TABLE OF ORGANIZATION Electrician -Lead Engineer Engineering Technician III Environmental Specialist Equipment Operator Facilities Maintenance Lead Facilities Technician Hazardous Materials Inspector Heavy Equipment Operator Heavy Equipment Operator -Lead Industrial Waste Inspector Industrial Waste Investigator Laboratory Technician WQC Landfill Technician Maintenance Mechanic Management Analyst Manager Airport Manager Environmental Control Program Manager Laboratory Services Manager Maintenance Operations Manager Solid Waste Manager Water Quality Control Plant Manager Watershed Protection Plant Mechanic Program Assistant I Program Assistant II Project Engineer Project Manager Senior Accountant Senior Buyer Senior Chemist Senior Engineer Senior Industrial Waste Investigator Senior Management Analyst Senior Mechanic Senior Operator WQC Senior Technologist Storekeeper Street Maintenance Assistant Street Sweeper Operator Supervisor WQCP Operations FY 2015 Actuals 2.00 1.00 0.20 2.00 0.54 0.00 0.00 0.04 0.90 1.15 2.99 1.79 3.00 1.00 7.00 2.30 1.00 3.90 1.00 0.96 1.00 1.00 0.95 0.00 1.00 2.00 1.81 0.35 0.30 0.00 1.00 1.76 0.99 0.21 1.00 6.00 1.13 1.00 0.00 1.63 3.00 FY 2016 Actuals 2.00 1.00 0.20 2.00 0.54 0.00 0.00 0.04 0.90 1.15 2.99 1.79 3.00 1.00 7.00 1.30 1.00 4.90 1.00 1.96 1.00 1.00 0.95 0.00 1.00 2.00 1.83 0.35 0.30 0.00 1.00 1.76 0.99 0.21 1.00 6.00 1.00 1.00 0.00 1.63 3.00 FY 2017 Adopted Budget 2.00 0.90 0.25 2.00 0.54 1.00 0.00 0.04 0.90 1.15 2.99 1.15 3.00 1.00 0.00 2.30 1.00 FY 2018 Adopted Budget 2.00 0.90 0.25 2.00 0.54 1.00 1.50 0.04 0.90 1.15 2.99 1.15 3.00 1.00 0.00 2.30 1.00 4.90 4.90 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 1.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 528 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION Surveyor, Public Works Technologist Traffic Controller Maintainer I WQC Plant Operator II Zero Waste Coordinator FY 2015 Actuals 0.11 1.00 0.06 16.00 2.00 FY 2016 Actuals 0.35 1.00 0.06 16.00 2.00 FY 2017 Adopted Budget 0.12 1.00 0.06 16.00 1.00 FY 2018 Adopted Budget 0.12 1.00 0.06 16.00 1.00 FY 2018 Change FTE 0.00 0.00 0.00 0.00 0.00 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% Total Public Works 94.23 95.12 98.69 101.19 2.50 2.53% Utilities Account Specialist Accountant Administrative Assistant Administrative Associate II Assistant City Manager/Utilities General Manager Assistant Director Administrative Services Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Associate Engineer Business Analyst Cathodic Protection Technician Assistant Cathodic Technician Cement Finisher Chief Sustainability Officer Contracts Administrator Coordinator Utilities Projects Customer Service Representative Customer Service Specialist Customer Service Specialist -Lead Deputy Chief/Fire Marshal Deputy City Attorney Director Administrative Services/CFO Director Utilities Electric Project Engineer Electric Underground Inspector Electric Underground Inspector -Lead Electrical Equipment Technician Electrician Assistant I 2.55 2.55 1.70 1.70 0.00 0.60 0.60 0.60 0.60 0.00 1.00 1.00 1.00 1.00 0.00 6.00 6.00 6.00 7.00 1.00 0.00% 0.00% 0.00% 16.67% 0.00 0.00 0.00 0.75 0.75 0.00% 0.25 0.25 0.25 0.25 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 0.50 0.50 0.00 0.00 0.00 0.00% 6.87 7.00 7.00 7.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 1.00 1.00 1.00 2.00 1.00 0.35 0.00 0.00 0.00 0.00 0.70 0.70 0.70 0.70 0.00 7.00 7.00 6.00 6.00 0.00 6.00 6.00 6.00 7.00 1.00 2.00 2.00 2.00 2.00 0.00 2.00 2.00 2.00 2.00 0.00 0.08 0.08 0.08 0.08 0.00 0.00 0.00 0.00 1.00 1.00 0.20 0.20 0.20 0.20 0.00 1.00 1.00 1.00 0.00 -1.00 2.00 2.00 2.00 2.00 0.00 2.00 2.00 2.00 2.00 0.00 1.00 1.00 1.00 1.00 0.00 0.00 0.00 1.00 1.00 0.00 4.00 4.00 3.00 3.00 0.00 0.00% 100.00% 0.00% 0.00% 0.00% 16.67% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 529 TABLE OF ORGANIZATION FY 2015 Actuals Engineer 4.00 Engineering Manager - Electric 1.00 Engineering Manager - WGW 1.00 Engineering Technician III 4.00 Equipment Operator 1.00 Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician 2.00 Gas System Technician II 1.00 Hazardous Materials Inspector 0.06 Heavy Equipment Operator 8.70 FY 2016 Actuals 4.00 1.00 1.00 4.00 1.00 0.00 0.00 0.00 0.00 2.00 1.00 0.06 8.70 FY 2017 Adopted Budget 4.00 1.00 1.00 5.00 1.00 FY 2018 Adopted Budget 4.00 1.00 1.00 3.00 0.00 0.00 4.00 0.00 1.00 0.00 3.00 0.06 6.70 0.00 0.00 0.06 6.70 FY 2018 Change FTE 0.00 0.00 0.00 -2.00 -1.00 FY 2018 Change % 0.00% 0.00% 0.00% (40.00)% (100.00)% 4.00 0.00% 1.00 0.00% 0.00 -3.00 0.00 0.00 Heavy Equipment Operator - Install/ 0.00 0.00 4.00 4.00 0.00 Repair Industrial Waste Investigator 0.00 0.00 0.50 0.50 0.00 Inspector, Field Services 4.00 4.00 5.00 5.00 0.00 Lineperson/Cable Specialist 11.00 11.00 11.00 11.00 0.00 Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 0.00 Maintenance Mechanic -Welding 2.00 2.00 2.00 2.00 0.00 Manager Communications 1.00 1.00 1.00 1.00 0.00 Manager Customer Service 0.00 1.00 1.00 1.00 0.00 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Manager Customer Service and Meter 1.00 0.00 0.00 0.00 0.00 0.00% Reading Manager Electric Operations 1.00 1.00 1.00 1.00 0.00 0.00% Manager Treasury, Debt & 0.00 0.00 0.40 0.40 0.00 0.00% Investments Manager Utilities Compliance 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Marketing Services 1.00 1.00 0.00 0.00 0.00 0.00% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Program Services 0.00 0.00 1.00 1.00 0.00 0.00% Manager Utilities Strategic Business 0.00 0.00 1.00 1.00 0.00 0.00% Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 0.00 0.00% Marketing Engineer 1.00 1.00 0.00 0.00 0.00 0.00% Meter Reader 6.00 6.00 6.00 6.00 0.00 0.00% Meter Reader -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Metering Technician 3.00 3.00 3.00 3.00 0.00 0.00% Metering Technician -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Offset Equipment Operator 0.48 0.48 0.48 0.48 0.00 0.00% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 0.00 0.00% Planner 0.30 0.00 0.00 0.00 0.00 0.00% Power Engineer 3.00 3.00 3.00 3.00 0.00 0.00% 530 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION Principal Business Analyst Principal Management Analyst Program Assistant I Project Engineer Project Manager Resource Planner Restoration Lead SCADA Technologist Senior Accountant Senior Business Analyst Senior Deputy City Attorney Senior Electrical Engineer Senior Engineer Senior Management Analyst Senior Mechanic Senior Performance Auditor Senior Project Engineer Senior Resource Planner Senior Technologist Senior Utilities Field Service Representative Senior Water Systems Operator Storekeeper Storekeeper -Lead Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber Technician Apprentice Street Light, Traffic Signal & Fiber -Lead Substation Electrician Substation Electrician -Lead Supervising Electric Project Engineer Supervisor Inspection Services Tree Maintenance Person Utilities Account Representative Utilities Chief Operating Officer Utilities Compliance Technician Utilities Compliance Technician -Lead Utilities Credit/Collection Specialist Utilities Engineer Estimator Utilities Field Services Representative Utilities Install Repair -Lead -Welding Certified FY 2015 Actuals 0.00 1.00 2.50 5.00 0.75 5.00 1.00 2.00 0.70 2.00 1.00 4.00 4.00 2.40 1.00 1.00 1.00 6.00 0.87 1.00 2.00 2.00 0.00 4.00 1.00 2.00 6.00 2.00 1.00 1.00 1.00 0.00 0.00 2.00 1.00 2.00 5.00 5.00 2.00 FY 2016 Actuals 1.00 0.00 2.50 5.00 0.75 5.00 1.00 2.00 0.70 2.00 1.00 4.00 5.00 2.40 1.00 1.00 0.00 6.00 0.00 1.00 2.00 2.00 0.00 5.00 0.00 2.00 6.00 2.00 1.00 1.00 1.00 0.00 0.00 2.00 1.00 2.00 5.00 5.00 2.00 FY 2017 Adopted Budget 1.00 0.00 2.50 5.00 0.75 6.00 1.00 2.00 0.70 2.00 1.00 4.00 5.00 0.70 1.00 1.00 0.00 6.00 0.00 1.00 2.00 1.00 0.80 5.00 FY 2018 Adopted Budget 1.00 0.00 1.50 5.00 0.75 6.00 1.00 2.00 0.70 2.00 0.00 4.00 5.00 0.70 1.00 1.00 0.00 6.00 0.00 1.00 2.00 1.00 0.80 5.00 0.00 0.00 2.00 6.00 2.00 1.00 0.00 1.00 0.00 0.00 2.00 1.00 2.00 5.00 5.00 2.00 2.00 6.00 2.00 1.00 0.00 1.00 0.00 1.00 2.00 1.00 2.00 5.00 5.00 FY 2018 Change FTE 0.00 0.00 -1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 2.00 0.00 FY 2018 Change % 0.00% 0.00% (40.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 531 TABLE OF ORGANIZATION Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair Assistant Utilities Install/Repair-Lead Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator Utilities Safety Officer Utilities Supervisor Utilities System Operator Utility Engineering Estimator - Lead Warehouse Supervisor Water Meter Cross Connection Technician Water System Operator I Water System Operator II FY 2015 Actuals 3.00 12.00 1.00 5.00 3.00 3.00 4.00 1.00 11.00 5.00 0.00 0.50 2.00 0.00 4.00 FY 2016 Actuals 3.00 12.00 1.00 5.00 3.00 3.00 3.00 1.00 11.00 5.00 0.00 0.50 2.00 0.00 4.00 FY 2017 Adopted Budget 3.00 10.00 1.00 5.00 3.00 3.00 3.00 1.00 12.00 5.00 0.00 0.80 0.00 1.00 4.00 FY 2018 Adopted Budget FY 2018 Change FTE 3.00 10.00 1.00 5.00 3.00 3.00 3.00 1.00 12.00 5.00 1.00 0.80 0.00 0.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 -1.00 0.00 FY 2018 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% Total Utilities 258.36 255.97 254.92 256.67 1.75 0.69% Other Funds Capital Project Funds Administrative Associate I Administrative Associate III Assistant Director Public Works Associate Engineer Cement Finisher Cement Finisher -Lead Chief Transportation Official Contracts Administrator Coordinator Public Works Projects Coordinator Transportation Systems Management Engineer Engineering Technician III Facilities Technician Heavy Equipment Operator Inspector, Field Services Landscape Architect Park Planner Management Analyst Manager Facilities 0.80 0.89 0.15 2.69 3.00 1.00 0.50 0.60 0.00 0.10 2.08 0.50 0.00 0.20 0.47 1.00 1.49 0.00 0.80 0.89 0.58 2.69 0.00 0.74 0.50 0.60 1.00 0.15 2.98 0.50 0.00 0.00 1.20 0.90 1.39 0.10 0.80 0.89 0.58 2.69 0.00 0.74 0.30 0.60 1.50 0.90 2.80 0.50 0.00 0.00 1.21 0.90 0.89 0.10 0.80 0.89 0.58 2.96 0.00 0.74 0.52 0.60 1.30 0.62 2.80 0.50 1.50 0.00 1.21 0.90 0.79 0.10 0.00 0.00 0.00 0.27 0.00 0.00 0.22 0.00 -0.20 0.00% 0.00% 0.00% 10.04% 0.00% 0.00% 73.33% 0.00% (13.33)% -0.28 (31.11)% 0.00 0.00 1.50 0.00 0.00 0.00 -0.10 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (11.24)% 0.00% 532 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION Manager Maintenance Operations Parking Operations -Lead Program Assistant I Program Assistant II Project Engineer Project Manager Senior Engineer Senior Management Analyst Senior Planner Senior Project Engineer Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Engineering -Lead Transportation Planning Manager FY 2015 Actuals 0.90 0.00 1.00 0.00 5.09 1.20 1.09 0.60 0.00 0.70 0.90 0.20 0.11 0.00 0.00 FY 2016 Actuals 1.65 0.00 0.00 0.00 4.99 1.80 1.99 0.60 0.00 0.00 0.90 0.63 0.55 0.00 0.70 FY 2017 Adopted Budget 0.65 0.30 0.00 0.20 6.49 1.15 1.99 0.60 0.70 0.00 0.90 0.63 0.55 0.90 0.15 Total Capital Project Funds 27.26 28.83 30.61 FY 2018 Adopted Budget 0.65 1.00 0.00 0.40 7.14 1.15 1.99 0.60 0.85 0.00 0.90 0.63 0.55 0.62 0.50 FY 2018 Change FTE 0.00 0.70 0.00 0.20 0.65 0.00 0.00 0.00 0.15 0.00 0.00 0.00 0.00 -0.28 0.35 FY 2018 Change % 0.00% 233.33% 0.00% 100.00% 10.02% 0.00% 0.00% 0.00% 21.43% 0.00% 0.00% 0.00% 0.00% (31.11)% 233.33% 33.79 3.18 10.39% Printing and Mailing Services Manager Revenue Collections Offset Equipment Operator Senior Management Analyst 0.00 1.52 0.10 0.10 1.52 0.00 0.10 1.52 0.00 0.10 1.52 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% Total Printing and Mailing Services 1.62 1.62 1.62 1.62 0.00 0.00% Special Revenue Funds Account Specialist Account Specialist -Lead Administrative Associate II Building Serviceperson-Lead Chief Transportation Official 1.55 0.41 0.20 0.20 0.00 Community Service Officer 0.50 0.00 Electrician 0.20 Facilities Maintenance -Lead 0.15 Facilities Mechanic 0.45 0.25 Facilities Technician 0.00 Management Analyst 0.00 Manager Community Services Senior Program Manager Maintenance Operations 0.19 0.19 0.19 0.19 0.00 Manager Revenue Collections 0.00 0.20 0.28 0.28 0.00 Coordinator Public Works Projects Facilities Painter 1.00 1.55 0.41 0.20 0.20 0.00 0.50 0.00 0.20 0.15 0.45 0.25 0.00 0.00 1.00 1.62 0.95 0.20 0.20 0.00 0.50 0.00 0.20 0.15 0.00 0.25 0.45 0.02 1.00 1.62 0.95 0.20 0.00 0.05 0.50 0.20 0.20 0.15 0.00 0.25 0.45 0.02 1.00 0.00 0.00 0.00 -0.20 0.05 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Parking Operations -Lead 0.00 0.70 0.50 0.00 -0.50 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 533 TABLE OF ORGANIZATION Planner Program Assistant II Senior Management Analyst Senior Planner Senior Project Engineer Street Maintenance Assistant Street Sweeper Operator Transportation Planning Manager FY 2015 Actuals 0.75 0.00 0.20 0.00 0.10 2.00 0.37 0.00 FY 2016 Actuals 0.75 0.00 0.00 0.00 0.00 2.00 0.37 0.10 FY 2017 Adopted Budget 0.00 0.45 0.00 0.36 0.00 2.00 0.37 0.00 FY 2018 Adopted Budget 0.00 0.00 0.00 0.40 0.00 2.00 0.37 0.30 FY 2018 Change FTE 0.00 -0.45 0.00 0.04 0.00 0.00 0.00 0.30 FY 2018 Change % 0.00% (100.00)% 0.00% 11.11% 0.00% 0.00% 0.00% 0.00% Total Special Revenue Funds 8.52 9.22 9.69 9.13 -0.56 (5.78)% Technology Fund Administrative Assistant Assistant Director Administrative Services Business Analyst Desktop Technician Director Administrative Services/CFO Director Information Technology/CIO Management Analyst Manager Information Technology Manager Information Technology Security Principal Business Analyst Principal Management Analyst Senior Business Analyst Senior Management Analyst Senior Technologist Technologist 1.00 0.10 0.00 5.00 0.10 1.00 1.00 4.00 1.00 0.00 1.00 0.00 2.00 13.50 2.00 1.00 0.00 1.00 5.00 0.10 1.00 0.00 4.00 1.00 0.10 1.00 6.00 0.00 1.00 0.00 4.00 1.00 1.00 1.00 0.00 2.00 1.00 15.00 2.00 1.00 0.00 2.00 1.00 16.00 1.00 1.00 0.10 1.00 6.00 0.00 1.00 0.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 1.00 0.00 2.00 1.00 17.00 1.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.25% 0.00% Total Technology Fund 31.70 34.10 35.10 36.10 1.00 2.85% Vehicle Replacement and Maintenance Fund Administrative Associate III Assistant Director Public Works Assistant Fleet Manager Equipment Maintenance Service Person Fleet Services Coordinator Management Analyst Manager Fleet Motor Equipment Mechanic II Motor Equipment Mechanic -Lead Project Manager Senior Management Analyst 1.00 0.25 1.00 2.00 2.00 0.20 1.00 6.00 2.00 1.00 0.08 1.00 0.25 1.00 2.00 2.00 0.20 1.00 6.00 2.00 1.00 0.08 1.00 0.25 1.00 2.00 2.00 0.20 1.00 6.00 2.00 1.00 0.08 1.00 0.25 1.00 2.00 2.00 0.20 1.00 6.00 2.00 1.00 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 534 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET TABLE OF ORGANIZATION FY 2015 Actuals FY 2016 Actuals FY 2017 Adopted Budget FY 2018 Adopted Budget FY 2018 Change FTE FY 2018 Change % Total Vehicle Replacement and Maintenance Fund Workers' Compensation Program Fund Senior Human Resources Administrator 0.00 0.00 1.00 1.00 0.00 0.00% Workers' Compensation Program Fund Total Workers' Compensation Program Fund 0.00 0.00 1.00 1.00 0.00 0.00% Total Other Funds 85.63 90.30 94.55 98.17 3.62 3.83% Total Citywide Positions 1,027.80 1,042.10 1,052.10 1,058.95 6.85 0.65% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 535 536 • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET SUPPLEMENTAL INFORMATION CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 537 CITY OF PALO ALTO Ending BSR Balance (in millions) FINANCIAL POLICIES Reserve Policies One of the key components of a financially stable organization is the adherence to a policy of maintaining an appropriate level of reserves. The Government Finance Officers Association (GFOA) recommends, at a minimum, that general purpose governments, regardless of size, maintain reserves (unrestricted fund balance) in their General Fund of no less than two months of operating revenues or expenditures, or a minimum of approximately 16.6 percent of General Fund operating expenditures. The GFOA further recommends that reserve levels be directly related to the degree of uncertainty the local government faces; specifically, the greater the uncertainty, the greater the financial resources necessary. Since reserves are used to mitigate risk, during these uncertain economic times, it is crucial that the City continue its practice of adhering to this GFOA guidance. This will provide the City with resources to cope with unfore- seen expenditures, unanticipated events, or revenue shortfalls. General Func 3udget Sta ailization Reserve The City's Budget Stabilization Reserve (BSR) serves as the primary General Fund reserve. By policy, the BSR is maintained in the range of 15 to 20 percent of General Fund operating expen- ditures, with a target of 18.5 percent. Any reduction to the reserve below 15 percent requires City Council approval. At the discretion of the City Manager, any BSR balance above 18.5 per- cent may be transferred to the Infrastructure Reserve (IR), which was established to provide funding for maintenance and rehabilitation of the City's capital assets. The BSR is used to fund unanticipated one-time costs as opposed to ongoing or recurring operating expenditures. The City's intent is to fund ongoing programs and services with ongoing dollars. The City has held a long-standing practice of maintaining a BSR balance of no less than 15 per- cent of General Fund operating expenses. The table below depicts the BSR balances for seven years, last five years of actual ending BSR balances and two years of budgeted ending BSR bal-ances. As discussed in this document, the Fiscal Year 2018 Adopted Budget assumes a BSR ending balance of $39.1 million or 18.63 percent; this is $273,000 above the Council approved 18.5 percent target. FY 2014 Actuals FY 2015 FY 2016 FY 2017 FY 2018 Actuals Actuals Adopted Adopted $27.1 $30.4 $33.1 $48.2 $49.5 $41.3 $39.1 % of Total Expenses 18.50% 18.50% 19.33% 25.96% 24.06% 21.27% 18.63% FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 539 FINANCIAL POLICIES Over the years, the City's BSR has served as a repository for unspent operating funds at year- end and to fund one-time unexpected needs that arise outside of the regular budget prepara- tion process. Prudent financial management practices dictate that the BSR not be used to fund or solve on -going, recurring financial needs. The City has adhered to this practice and has not used the BSR to provide ongoing budget stabilization during periods of economic downturns. In Fiscal Year 2014-2015, the BSR closed with an additional $13.5 million set aside pending Coun- cil direction. A total of $8.0 million was reserved for additional capital expenditures, $4.2 million dedicated to Fiscal Year 2015-2016 one-time expenditures, and $1.3 million dedicated to poten- tially address the unfunded pension liability. HUMAN SERVICES RESOURCE ALLOCATION PROCESS (HSRAP) RESERVE In Fiscal Year 2015, the City Council set aside an earmarked reserve for the Human Resource Allocation Process (HSRAP) in the amount of $50,000 to be used during future budget cycles. These funds are anticipated to be unspent at the conclusion of Fiscal Year 2017, and it is recom- mended that this reserve be carried forward to Fiscal Year 2018. Crec it Rating Agencies Credit rating agencies view General Fund reserves as a critical component of strong municipal management. According to Moody's Investors Service, reserves are an important factor in the analysis of a municipality's fiscal health and, therefore, a jurisdiction's fiscal policies should include a plan for maintaining reserves. Rating agencies view sound reserves favorably, thus improving a municipality's rating and its ability to obtain low-cost financing for important proj- ects. The City is proud to report that both Moody's and Standard and Poor's (S&P) awarded their highest credit ratings, Triple A, to the City's General Obligation Bonds for library and com- munity center capital improvements in 2010 and it was most recently reaffirmed in 2013. These ratings demonstrate that Palo Alto's prudent financial management and fiscal strength are viewed most favorably by credit agencies. The four Utility bonds that are rated by S&P also received their highest credit rate of Triple A. Moody's has rated these Utility bonds with either their second highest (Aa1) or third highest (Aa2) ratings. Capital Fund Reserve Infrastructure Reserve (IR) The Infrastructure Reserve (IR) provides a mechanism for financing the City's infrastructure maintenance and rehabilitation requirements and allows for the City to apply for reimbursable infrastructure grants and respond to urgent infrastructure needs. The primary purpose of the IR is to the fund projects which are critical to the maintenance of existing infrastructure. As part of the Council approved Infrastructure Plan (IP), approved in FY 2014„ the Infrastructure Reserve was planned to fund $7.5 million of the IP funding needs. Between FY 2012 and FY 2016 unspent monies from General Fund capital projects are returned to the IR and retained within the Capital Fund. General Fund Operating Budget surpluses of $36.9 million have been transferred to the 540 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET FINANCIAL POLICIES Infrastructure Reserve beyond base budget transfers. Investment income from this reserve is also retained within the IR to fund future capital project needs. Other Policies Debt The City of Palo Alto recognizes the need for spending a prudent amount every year for ongo- ing capital replacement and rehabilitation needs. An ongoing capital improvement plan is vital to ensuring the future viability of services. To achieve this priority, the City funds its regular and ongoing capital needs primarily on a "pay-as-you-go" basis. There are, however, special or extraordinary capital improvement projects, refinancing of existing debt, and purchase of major and multiple pieces of equipment in which it is appropriate to consider debt financing. The City's Debt Policy establishes the guidelines to support the decision -making process for issuing debt. These guidelines were adopted by the City Council on May 13, 1997 (City Manager's Report 210:97). Staff revised the guidelines at the April 11, 2017 City Council meeting to explicitly comply with the recently passed SB 1029 amendments to Government Code section 8855. A summary of the Debt Service guidelines, including more information on the new reporting requirements, is in the Debt Service Fund Overview section. Investments The basic principles underlying Palo Alto's investment philosophy are to ensure the safety of public funds, provide that sufficient money is always available to meet current expenditures and achieve a reasonable rate of return on its investments. Safety is the top priority, followed by liquidity and yield. The City pools cash from all sources and funds - except restricted bond proceeds with fiscal agents - and invests its pooled idle cash in accordance with state law and the City's charter. The City follows the "Prudent Investor Standard" cited in State Government Code (Section 53600.3). Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and, therefore, fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchang- ing, selling or managing public funds, a trustee shall act with the same care, skill, prudence and diligence under the prevailing circumstances that a prudent person acting in a like capacity and familiarity with those matters would use in the same circumstances to safeguard the principal and maintain the liquidity needs of the agency. Prevailing circumstances include, but are not limited to, economic conditions and the anticipated needs of the agency. The City's preferred and chief practice is to buy securities and to hold them to their date of maturity rather than trade or sell securities prior to maturity. The City may, however, elect to sell a security prior to its maturity date should there be a significant financial need. If securities are purchased and held to their maturity date, then any changes in the market value of those secu- rities during their life will have no effect on the principal value. Under a buy and hold philosophy, the City is able to protect its invested principal. The economy, money markets and various finan- FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 541 FINANCIAL POLICIES cial institutions (such as the Federal Reserve System) are monitored carefully to make prudent investments and assess the condition of the City's portfolio. A detailed explanation of investment objectives, applicability and general investment guidelines can be found on the City's website. The Investment policy also delineates authorized invest- ments, authorized investment personnel and administrative procedures. 542 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Rudget Adoption Ordinance CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 543 BUDGET ADOPTION ORDINANCE Erg r o4EMaaaeS50-sso- E-21066516372 Ordinance No. 5414 Ordinance Of The Council Of The City Of Palo Alto Adopting The Budget For Fiscal Year 2018 SECTION 1. The Council of the City of Pak Alto finds and determines as follows: A. Pursuant to the provisions of Section 6(g) of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2018; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 27, 2017, hold public hearings on the budget after publication of notice in accordance with Section 2.28.070 of the Palo Alto Municipal Code, and C. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on June 27, 2017, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing. SECTION 2. Pursuant to Chapter 2.28 of the Palo Alto Municipal Code, the following documents, collectively referred to as "the budget" are hereby approved and adopted for Fiscal Year 2018: A. The budget document (Exhibit "1") containing the proposed operating and capital budgets submitted on April 25, 2017, by the City Manager for Fiscal Year 2018, entitled 'City of Palo Alto a City Manager's Fiscal Year 2018 Proposed Budget' covering General Government Funds, Enterprise Funds, Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and B. The Amendments to the City Manager's Fiscal Year 2018 Proposed Budget, attached hereto as Exhibit "2," and made a part hereof; and C. Changes and revised pages in the Table of Organization, as displayed on pages 487 through 503 in "Exhibit 1," and amended in Exhibit"2" made a part hereof; and D. Fee changes of the Municipal Fee Schedule attached hereto as Exhibit "3'; and 170707 th osseiu_ 544 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET BUDGET ADOPTION ORDINANCE QocuSly EnVekce ID: D4EM&36-656D-4503-943E-02106f616i372 SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein. SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended_ SECTION 5. Appropriations for the Fiscal Year 2017 that are encumbered by approved purchase orders and contracts for which goods or services have not been received or contract completed, and/or for which all payments have not been made, by the last day of the Fiscal Year 2017 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2018. SECTION 6_ The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit "2" and the Fiscal Year 2016 appropriations carried forward as provided in Section 5. SECTION 7_ As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 8_ As specified in Section 2.28.140(b} of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City's funds to the Director of Administrative Services, as Treasurer, in accordance with the City's Investment Policy for Fiscal Year 2018, SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "3". The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department and Development Services Department fees relating to a "development project" as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged_ The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art. XIII C, Section 1(e)(2), such fees are not a tax. SECTION 11. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. 170707 010140102 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 545 BUDGET ADOPTION ORDINANCE DomSO Envelope ID: DaEM816-555 943E -c21 [a&FE1e372 SECTION 12. The Council of the City of Palo Alto hereby finds thatthis is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: June 27, 2017 AYES: NOES: ABSENT: ABSTENTIONS NOT PARTICIPATING: ATTEST: DUBOIS, FILSETH, FINE, HOLMAN, KNISS, KOU, SCHARFF,'u"UOL3ACH TANAKA o If -oa •.s� rr gla 144.55 i of itsauk11111? V/1115r950i'4EA,. City Clerk Mayor APPROVED AS TO FORM: APPROVED: 6ec A10.14/g�5'• MAI City Attorney 170707 ti 01101u_ DYIcrNg19N by' ll//NI 7e`e�1F H.T.1F1PiH City Manager Director of Administrative Services. 546 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET Fiscal Year 2018 Appropriations Limit Resolution and Calculation CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 547 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSiyf Envelope ID: a 944aFAFJ3B-4D36-9AF9-95AF53CEA323 Resolution No. 9691 Resolution of the Council of the City of Palo Alto Determining the Calculation of the Appropriations Limit For Fiscal Year 2018 RECITALS A. Under Article XI IIB of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit (Limit); and B. Since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with inflation and population adjustment factors; and C. Pursuant to Government Code Section 37200, the calculation of the Limit and the total appropriations subject to the limit were set forth in the annual budget of the City for Fiscal Year 2018, which was adopted by ordinance of the Council on June 27, 2017; and D. Pursuant to Government Code sections 7901 and 7910, the final calculation of the limit has been determined, and the adjustment factors on which the calculation is based are a 3.69% percent change in California per capita income and a 0.82% percent change in the population growth for the City of Palo Alto; and E The documentation used in the determination of the Limit has been made available to the general public for fifteen {15) days prior to the date of adoption of this resolution; and F. According to the final calculation, the City's net appropriations subject to limitation are approximately $131.49 million. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1_ The Council of the City of Palo Alto hereby finds that, for Fiscal Year 2018, the final calculation of the Appropriations Limit of the City of Palo Alto has been determined in accordance with the adjustment factors referred to above, the documentation used in the determination of the calculation has been made available to the general public for the period of fifteen days as required by law, and the City's appropriations subject to limitation are under the Limit by approximately $26.88 million. SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of the City for Fiscal Year 2018, a copy of which is attached hereto as Exhibit 1. 1/ 170627 th 0140162 548 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION rwu Erwelope 10: d3F944&FA L30-4036-9AF&-93M-63CEA323 SECTION S. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, and, therefore, no environmental assessment is necessary_ INTRODUCED AND PASSED: June 27, 2017 AYES: DUBOIS, FILSETH, FINE, HOLMAN, KNISS, KOU, SCHARFIF, TANAKA,WOLBACH NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: recauStirsol Sy gat Pf City Clerk ,APPROV'FI). S TO FORM: LicneAignmsl Shoir l WA+JF1iaJi.•4.SY City Artrirney 1713627th 01.Yll 182 r Beelyiatiet aP 7iEFa-sorer.. Mayor claticaeliipnwel by: .40I.TFEMPPLNYLiril. City Manager Lp.cgiqest try, Administrative Services Director APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 549 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION Owl L lgts Envelope ID: 4413FA -41]38- EI- r55GEA.323 Attachment A, Exhibit 1 APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION FOR FISCAL YEAR 20118 ADOPTED BUDGET ,$ Ir r:•i .sI Total &udgeled ApFopriaions Ft 2016 Adopted Budget Less: Interfuna Transfers Alocated Charges Non-PToceeds General Fund 210.43 $ Capita spec` Service l Debt Servi Projc ch Funds Revenue Fun I 80.23 $ =02 $ Combined Funds 4.67 $ 325.37 3 (29.36) $ - $ Iv' -B81 $ - $ (39-271 $ (1.7.vt} s - 3 - $ - 3 (17.s4I $ 1.4y.16) $ 1.81264 $ 17-251 $ - $ (136.661. Met Apprapriaimns Subject lo Lim? $ 113.24 3 3 17_116 $ 4.47 $ 131A9 CITY OF PA L!4 ALTO FY 2018 Per Capital OM change 1CA Department of Financel FadofA 3.89% 7.0569 FY 2018 Popubtron C'ri'nge 1=. ty of Palo A to;) 0_212X. Fr 2017 Ad -opted Appropriations Limit FY 2018 Adopted Appropriations Limit 11e, f.ppropriarions svgect to Amount Under the Limit FCCTOF 8 Factor A x Factor 6 _0382 $ 151.49 GU4 $ 158.37 S 131.49 26.88 The Cty of Palo Alto remains well av`tnn its appropriations mt in FY 2616_ Fut ire year limit fiends oar de made tamed an the average c harge in regional papubton and income growth_ The approprfatons subject to limitation include: proceeds of taxes from the General Fund, Capital Prcieon Fund, and Spec -al Revenue Funds. Amused Under lie lima' 17 1.537 1.0130 1.0674 $ 151.9 $ 109.51 2016 1.35M 1.0113 1.6499 3. 141.92 $ 160.611 S 9115 0.9977 1.0150 1.0127 $ 135.17 $. 82.43 $ 2014 1.3512 1.0157 1.6677 $ 133.48 3 90.28 $ 2013 1___377 1.0124 1.€9106 $ 125.01 3 96.73 2012 1.3251 1.0069 1.0342 3 119.00 $ 39.06 241T 0.9744 1.0144 0.9686 3 115.06 3. 73.94 $ 2010 1.0462 1.0226 1.0263 3 116.38 3. 72.0) $ 2009 1_01429 1.0172 1.0608 $ 113_17 $ 73.64 $ 2(}46 1.3442 1.0152 1.0601 $ 106.68 3. 73.30 $ 41.97 41.31 5224 43.20 22026 30.00 36.12 44.36 34.53 33.33 On Flavermbser 6, 19717, California voters approved Proposition 4, an iritialive that added Mice X1116 to the state Corsttutian. rite provis<ors of This orrice pace limits on the amount of revenue that oar be appropriated by a entices of government. The Approprfatians Lgnit it loosed OR actual appropriations during the 1978-1979 fish year. as -nareased each year usng specified population and inhlationary growth factors. 550 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GLOSSARY Key Budget Terms Accrual Accounting: A method of accounting that recognizes expenses when incurred and revenues when earned rather than when payment is made or received Adopted Budget: The budget that is approved and enacted by the City Council annually on before June 30th. Appropriation: The allocation of an expense budget for a particular project or program usually for a spe- cific period of time. Balanced Budget: A balanced budget exists when total revenues are equal to, or greater than, total expenses. Bond: A debt investment in which an investor loans money to an entity (governmental or otherwise) that borrows the money for a defined period of time at a fixed interest rate to pay for a variety of projects. Budget Stabilization Reserve (BSR): The BSR was established as a prudent measure to maintain the City's fiscal stability in the event that unanticipated events reduce revenue or create obligations that significantly impact the current -year budget. Examples of such events include a downturn in the economy, a natural disaster or actions that may be taken by another governmental agency that reduce revenues and/or increase expenses for the City. Capital Budget: A plan of proposed capital outlays and the means of financing them for the current fiscal period. In a two-year budget, the second year of the Capital Improvement Program is adopted -in -concept. Capital Improvement Program (CIP): The City's plan for current and future projects related to the acquisi- tion, expansion, or rehabilitation of buildings, equipment, parks, streets, and other public infrastructure. Capital Projects Fund: A fund created to account for all resources to be used for the construction or acquisition of designated fixed assets by a governmental unit except those financed by proprietary or fidu- ciary funds. City Manager's Report (CMR): Staff reports for City Council meetings as well as boards and commissions that are prepared by City staff and submitted through the City Manager's Office. Comprehensive Plan: The Palo Alto Comprehensive Plan contains the City's official policies on land use and community design, transportation, housing, natural environment, business and economics, and com- munity services. Its focus is on the physical form of the City and is applicable to both public and private properties. The Budget integrates the 1998-2010 Comprehensive Plan into the budget process. GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 551 GLOSSARY Cost Accounting: The branch of accounting that provides for the assembling and recording of all the ele- ments of cost incurred to accomplish a purpose, carry on an activity or operation, or complete a unit of work or a specific job. Enterprise Funds: Funds used to account for services that are provided to the public on a user charge basis, similar to the operation of a commercial business. The City's enterprise funds include the gas, elec- tric, water, fiber optics and wastewater collection and treatment funds. Fiduciary Fund: A fund used to account for assets held by the City acting in a fiduciary capacity for other individuals or entities. These funds are operated to carry out the specific actions required by the trust agreements, ordinances and other governing regulations. Fiscal Agent: A bank or other corporate fiduciary that performs the function of paying, on behalf of the governmental unit, or other debtor, interest on debt or principal of debt when due. Fiscal Year: A 12 -month period of time to which the annual budget applies and at the end of which a gov- ernmental unit determines its financial position and the results of operations. Palo Alto's fiscal year begins on July 1st and ends on June 30th. Fixed Assets: Assets such as land, structures and improvements, furniture and/or equipment that are expected to last and/or be used for more than one year. Full -Time Equivalent (FTE): Used to quantify staffing hours for permanent and temporary employees. A 1.0 FTE employee works full time; a.50 FTE employee works half-time. Fund Balance: An excess of the assets of a fund over its liabilities. General Fund: The primary fund used to account for the City's general purpose revenues such as sales, property, utility users and transient occupancy taxes. General Fund revenues typically pay for citywide ser- vices such as public safety, community development, recreation, libraries and parks. The General Fund is distinguished from Special Funds in that the latter are used to account for revenues that have restricted uses (e.g. gas tax funds that must be used for street maintenance or repair). Governmental Funds: A generic classification used to refer to all funds other than proprietary and fidu- ciary funds. Governmental funds include the general fund, capital fund, special revenue funds and debt service funds. Infrastructure Assets: Roads, bridges, curbs and gutters, streets, sidewalks, drainage systems, and lighting systems installed for the common good. Infrastructure Management Plan (IMP): A portion of the General Fund capital improvement program which focuses on rehabilitating the City's infrastructure. In 1998-99, an outside consultant on the City's infrastructure prepared a report known as the Adamson report. Within this report the City's infrastructure was cataloged and ranked based on when the infrastructure needed to be upgraded or replaced and the cost for each item. At that time, the City Council decided to establish a plan using the Adamson report as a guide for both timeline and cost. 552 GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET GLOSSARY Internal Service Funds: These funds provide services to City departments and recover their costs through user charges. For example the Vehicle Replacement Fund is an Internal Service Fund managing the replacement and maintenance of the City fleet. Method of Accounting: The City's General Fund budget is developed using a modified accrual basis of accounting, with revenues being recorded when measurable and available, and expenditures recorded when the liability is incurred. Enterprise Funds and Internal Service Funds are budgeted on a generally accepted accounting principles (GAAP) basis, which for Proprietary Funds is on a full accrual accounting basis. Operating Transfer: Amounts transferred between funds, not considered a revenue or expense. For exam- ple, legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended. Pay -As -You -Go -Basis: A term used to describe the financial policy of a governmental unit that finances all of its capital outlays from current revenues rather than by borrowing. Proposed Budget: The proposed budget is the budget that is sent to the Finance Committee by the City Manager. The proposed budget, including changes made by the Finance Committee during their review, is reviewed and then adopted by the City Council. Proprietary Funds: A generic classification used to refer to all funds other than governmental funds or fiduciary funds. Proprietary funds include internal service funds and enterprise funds. Reimbursements: Inter -fund transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it but that properly apply to another fund. For example, the Enterprise Funds reimburse the Technology Fund for CIP projects from which the Enterprise Funds benefit. Reserve: Represents the portion of fund balance set aside for financing future financing needs and addressing one-time emergency or unanticipated events. Revenues: Revenues include compensation received by the project for specific services to the public (external revenues), as well as revenues received from other funds (internal revenues). Special Revenue Funds: These funds account for the proceeds derived from specific revenue sources that are legally restricted to expenditures for specified purposes. The Street Improvement Fund (SIF) is a Spe- cial Revenue Fund that derives its funding from state gas tax revenues. Capital appropriations from the SIF must be spent on the construction and maintenance of the road network system of the City. GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 553 CITY OF PALO ALTO Americans with Disabilities Act CITY OF PALO A LT O IN COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA) OF 1990, THIS DOCUMENT MAY BE PROVIDED IN OTHER ACCESSIBLE FORMATS. For information contact: ADA Coordinator City of Palo Alto 285 Hamilton Ave (650) 329-2550 CITY OF PALO ALTO FISCAL YEAR 2018 ADOPTED BUDGET 555 Spanish explorers named the area for the tall, twin-trunked redwood tree they camped beneath in 1769. Palo Alto incorporated in 1894 and the State of California granted its first charter in 1909. The City has long been known for its innovative people and its exploration of ideas that have changed the world. In Palo Alto, our history has always been about the future. City of Palo Alto 250 Hamilton Avenue, P alo Alto, CA 94301 P 650.329.2100 W cityofpaloalto.org