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Fiscal Year 2019 Adopted Operating Budget
CITY OF PALO ALTO Fiscal Year 2019 Adopted Operating Budget City Council Liz Kniss, Mayor Eric Filseth, Vice Mayor Tom DuBois Adrian Fine Karen Holman Lydia Kou Gregory Scharff Greg Tanaka Cory Wolbach James Keene, City Manager Edward 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 Steve Guagliardo, Budget Manager, Office of Management and Budget Gregory Scharff, Finance Committee Chair • CITY OF PALO ALTO FISCAL YEAR 2019 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. Quality Superior delivery of services Courtesy Providing service with respect and concern Efficiency Productive, effective use of resources Integrity Straight -forward, honest and fair relations Innovation Excellence in creative thought and implementation 2 • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTEDBUDGET 3 CITY OF PALO ALTO TABLE OF CONTENTS Table of Contents Q Introduction 7 Transmittal Letter 9 Budget Acknowledgments 23 City of Palo Alto Organizational Chart 25 Palo Alto at a Glance 27 The Budget Process and Document 35 Budget Awards 43 M Citywide Funds 47 Citywide Funds Overview 49 Citywide Revenue by Category 51 Citywide Expense by Category 53 Citywide Projected Operating Fund Balance 55 Citywide Average Salary 57 Major Capital Projects 61 La General Fund 73 General Fund Overview 75 General Fund Reserves 85 General Fund Revenue Descriptions 86 General Fund Revenue by Category 90 General Fund Expenditures by Department 92 General Fund Expenditures by Category 93 Ea Enterprise Funds 95 Enterprise Funds Overview 97 Enterprise Funds Reserves 105 Residential Monthly Utility Cost Information 108 0 Internal Service Funds 109 Internal Service Funds Overview 111 m Special Revenue Funds 115 Special Revenue Funds Overview 117 ® Debt Service Funds 131 Debt Service Funds Overview 133 ® City Departments 141 City Attorney 143 City Auditor 153 City Clerk 165 City Council 175 City Manager 181 Administrative Services 197 General Fund 203 Printing and Mailing Services 213 Community Services 219 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 5 TABLE OF CONTENTS Development Services 237 Fire 253 Human Resources 267 General Fund 272 General Liabilities Insurance Program 279 Workers' Compensation Fund 284 Information Technology 291 Library 305 Office of Emergency Services 317 Planning and Community Environment 327 Police 341 Public Works 355 General Fund 360 Airport Fund 373 Refuse Fund 380 Storm Drainage Fund 390 Vehicle Replacement and Maintenance Fund 400 Wastewater Treatment Fund 408 Utilities 417 Electric Fund 425 Fiber Optics Fund 438 Gas Fund 445 Wastewater Collection Fund 456 Water Fund 465 Non -Departmental 477 Employee Information 481 General Benefits Fund Overview 483 Retiree Health Benefit Fund Overview 489 Table of Organization 493 El Supplemental Information 511 Budget Adoption Ordinance 513 Appropriations Limit Resolution and Calculation 517 Financial Policies 521 Glossary 525 Americans with Disabilities Act 529 6 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 7 CITY OF PALO ALTO TRANSMITTAL LETTER August 20, 2018 To the Honorable Mayor and City Council 2019 Fiscal Year 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 2019 Bud- get totaling $711.2 million. This budget represents a $38.9 million increase over the FY 2018 Adopted Budget, or 5.8 percent growth. The primary driver for the increase from FY 2018 Adopted Budget levels is the Capital Improvement Fund where significant investments in the 2014 City Council approved Infrastructure Plan are programed for FY 2019. The FY 2019 General Fund expense budget is $210.7 million, a modest 0.1 percent increase over the prior year budget, including a reserve for a $4.0 million reduction pending additional Finance Committee discus- sions. This budget includes net reductions of 6.60 full-time positions, and when combined with the 11.00 reduction in the Fire Department already approved by the City Council, citywide staff- ing has decreased 17.60 positions or 1.7 percent from FY 2018 (a 2.9 percent reduction in Gen- eral Fund staffing). Moderate utility rate adjustments of 3.9 percent, approved by the Utilities Advisory Commission and the Finance Committee, are included in this budget ensuring mainte- nance and management of services and infrastructure to the community. This budget reflects a strong local economy that continues to provide stable revenues that sup- port the vast array of programs and initiatives this organization provides to our citizens. This budget maintains the high quality of services and facilities that our community values, with a focus on the priorities of the City Council and structurally balancing expenses with revenues. As a result of our distinctive place in the global economy, we continue to experience many chal- lenges associated with the appeal of Silicon Valley. These include increased traffic and conges- tion, expensive housing, more demand for services, and various views about the nature and pace of change. We are not facing these challenges alone, as cities across the region share in the impacts that have accompanied such strong economic growth over the past eight years. Over the past few years, staff has identified anticipated gaps in available funds in the General Fund during prior year budget processes as well as upcoming projects and funding challenges that will require the City to prioritize initiatives and related resources. Recently, the City had to absorb several increased costs driven by extenuating circumstances, including the increased costs of track watch guards ($1.7 million), transfer of the electricity costs of streetlight and traf- fic signals ($2.3 million), and anticipated revenue reductions associated with Stanford negotia- tions over fire services ($2.0 million). That gap was closed in part by drawing on the Budget Stabilization Reserve (BSR) and other one-time solutions. Staff agreed with the City Council that the FY 2019 Budget would close that gap on a permanent structural basis; this budget accomplishes that. As reported in the FY 2019-2028 Long Range Financial Forecast, the City's FY 2019 General Fund projected a gap between revenues and expenses of $2.6 million. With this Budget, I am reducing $2.3 million in structural expenses. This reduction in expenses is anticipated to bring FY 2019 and FY 2020 revenues and expenses into alignment. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 9 TRANSMITTAL LETTER During the hearings to adopt the FY 2019 Operating Budget the Finance Committee recom- mended, and the City Council approved, direction that General Fund expenses be reduced by an additional $4.0 million; the implications of that $4.0 million reduction are to be discussed with the Finance Committee in the fall of 2018. This $4.0 million is budgeted as a negative reserve in the non -departmental section of this document and credited in the BSR. Even if the $4.0 million reduction was not credited towards the BSR, the BSR for FY 2019 would still be above the City Council approved target level of 18.5 percent. The General Fund In order to meet our objectives for FY 2019 and present a structurally balanced budget, it was necessary to make some reductions in staffing. As a result, there are no outright new positions that are recommended in this budget; instead, citywide this budget recommends a net reduc- tion of 6.60 full-time positions, essentially all within the General Fund. When combined with City Council's prior approval of 11.00 position reductions in the Fire Department, as part of the effort to continue to provide for Stanford Fire Services, full-time positions in the City have decreased 17.60 positions from the FY 2018 Adopted Budget to 1,041.35 in FY 2019. This represents a 1.7 percent reduction in the full-time City workforce. No full-time staff lose their positions in this budget. At the same time, I believe the structurally balanced FY 2019 Budget maintains existing services and responds to City Council Priorities. As a a comparison, the number of General Fund positions for FY 2019 is 10 percent below levels seen in FY 2008 and FY 2009. City Council Priorities In spite of the reductions, both the operating and capital budgets continue to support the ongoing priorities of the City Council that were approved in January 2018: Transportation Housing Budget and Finance (focus on funding our infrastructure plan and pensions) Grade Separation (choose preferred alternative by end of year) Of particular note in this budget: Parking & Transportation Strategy: This budget includes incremental steps in already planned parking and transportation initiatives. As a result of vacancies in key staff positions, this budget reflects a need to scale the ecosystem of parking and transportation programs. It continues funding for the Transportation Management Association (TMA) at $480,000 and focuses resources on the procurement of a new comprehensive parking permit system. In the capital budget, funding for grade separation initiatives are recommended to be added as well. Pension and Other Post -Employment Benefits (OPEB) Actions: In 2008, the City established an OPEB Trust Fund for retiree healthcare obligations, which now has over $100 million in assets. After a regular outside bi-annual review of the City's OPEB liabilities, a favorable report reduced our annual retiree medical contributions in the General Fund by $1.3 million for FY 2019. After 10 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER establishing an irrevocable IRS Section 115 Pension Trust fund in FY 2017, the City has contributed $5.6 million in all funds ($3.4 million from the General Fund). The FY 2019 Budget includes additional contributions of $2.0 million for a total of $7.6 million ($4.6 million from the General Fund). Additional information can be found in the Salaries and Benefits Attachment B to this letter. While the FY 2019 Operating Budget maintains current services and takes important steps toward ongoing fiscal stability and health, the City will face critical challenges in the near and long-term. Near -Term Challenges Infrastructure Funding: Based on updated estimates and the most recent decisions on the plan made by the City Council, the emergent gap in necessary resources for the 2014 City Council Infrastructure Plan is currently estimated at $76 million. Anticipated new Transient Occupancy Tax (TOT) revenue (not included within the budget) could close half of that funding gap. An increase in the TOT via the ballot box in 2018 could resolve the remaining gap. Other funding challenges in the near -term include our Animal Shelter, the Junior Museum and Zoo, other City facilities like the Roth Building, and future planning for parks. Transportation: Completion of plans and funding included in the City Council Infrastructure Plan, such as our Bike and Pedestrian Plan improvements and Charleston-Arastradero Corridor are an important factor in expanding our modes of transportation. Finding a permanent funding source for our TMA is also a near term challenge. Maintaining adequate funding for our parking needs (new systems, community engagement demands) will continue to challenge the City. Competitive Workforce - Retaining and Recruiting a Quality Staff: Road gridlock and needed transit investments, along with out -of -reach housing costs, make our ability to attract and maintain the workforce our community requires a genuine concern. Labor negotiations with four bargaining groups will unfold throughout FY 2019. Unknown costs beyond this budget remain. The quality of services provided to our community is most directly the result of having an adequate and high -quality workforce. This is a fact that needs to be better articulated to our community. Pension Costs: The City already knows the expected range of increases in annual pension costs, which will put a continuing annual strain on our budgets. Housing: Provision of adequate housing and the ability to meet our housing production goals will require action much more within the realm of policy and zoning than in direct City funding. Some affordable housing funding is available within the City's existing programs, but it could quickly be used up within the near term. The City has larger goals and housing needs than the pool of municipal funding could meet. Creative concerted policy action by City Council will be essential. Longer -Term Challenges TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 11 TRANSMITTAL LETTER Grade Separation: Arguably the biggest infrastructure project in the City's recent history and for the next decades ahead is grade separation. Over the next ten years the City will need to plan for, find funding for, and then construct grade separation improvements along our four -mile corridor. The cost will run from the hundreds of millions of dollars into billions. How to accom- plish this is the challenge of the decade ahead. Sustainable Pensions and Health Care: The liabilities and risks to the CaIPERS system are well known. Our City Council continues to be a leader in understanding the scale of the problem and in coming to grips with solutions that will be necessary. This, as we know, will continue to dom- inate the work of the Finance Committee and City Council in the years ahead. Competitive and Quality Workforce: This too will continue to be the other large financial driver in the City budgets in the years ahead. Beyond just funding, creative approaches to working envi- ronment and commutes will be needed under conditions that are significantly affected by state regulations limiting the City's options. There are additional funding challenges we face; each is referenced further in the General Fund Summary section of this document. Other Funds - Summary Beyond the General Fund, the City's Enterprise and Other Funds remain healthy and continue to maintain and invest in the City's many service areas including Utilities, the Airport, and parking initiatives. As discussed above, moderate utility rate adjustments representing a 3.9 percent increase in the average residential monthly bill are assumed in this budget. The Airport Fund continues to see significant investment in capital improvements through grant funding awarded by the Federal Aviation Administration. Both an Airport business plan assessment and facilities assessment are scheduled to be completed in FY 2019 to assist in future operating and investment decisions. As noticed previously, a focus on parking operations is anticipated in FY 2019. No significant changes in the program are included as the FY 2019 budget focuses on scaling the programs with much needed tools including a comprehensive permit system. 12 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER Acknow ec c ments 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. Having spent the early, formative period of my career in budget offices, I know first-hand the teamwork and professionalism it takes to develop and produce the annual budget of a munici- pal organization. Special thanks to Lalo Perez, our Chief Financial Officer, Kiely Nose, Budget Director, Tarun Narayan, Treasury Manager, and the dedicated Office of Management and Bud- get team - Paul Harper, Steve Guagliardo, Jessie Deschamps, Chris Yi, Alexandra Harris, Chaitali Paliwal, Jamie Perez, and Kayla Shapiro. The completion of this budget document could not have been accomplished without the skill, dedication and professionalism of this team. Unless one has been involved in the actual planning and preparation of the budget it is impossible to appreciate the many hours our folks have sacrificed over the last few months. My gratitude must also go to the Department Directors of our Executive Leadership Team and all of the department personnel who worked on the preparation of the material. They are too numerous to mention here but all the senior/management analysts, division managers, administrative assistants, and others have earned a well -deserved thank you. We are pleased to work with a dedicated City Council, a professional City workforce, and a highly engaged community. Respectfully Submitted, James Keene City Manager TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 13 TRANSMITTAL LETTER Attachment A: Fiscal Year 2019 Budget Balancing The FY 2019 budget of $711.2 reflects an increase of 5.8 percent from the FY 2018 Adopted Budget of $672.3 million. The General Fund of $210.7 million is approximately 30 percent of the City's total budget. General Fund expenses remained generally consistent with prior year levels of $210.4 million. This budget was developed with consideration of the multi -year implications of its recommendations. It strives to avoid reductions that significantly impact services and continues to invest heavily in the City's infrastructure. General Fund The FY 2019 Budget includes General Fund revenue estimates of $214.5 million, a 3.6 percent increase from FY 2018 Adopted Budget levels of $207.4 million, or a $7.4 million increase. Gen- eral Fund expenditures of $210.7 million reflect marginal growth of 0.1 percent from the FY 2018 Adopted Budget level of $210.4 million, or a $278,000 increase. The Budget Stabilization Reserve (BSR) is projected at FY 2019 BSR balance of $45.1 million, or 21.4 percent of the FY 2019 Budget expenses of $210.7 million. This is above the City Council target level of 18.5 percent or $39.0 million. The General Fund balancing strategy (see below) looked at a multi -year approach that antici- pates FY 2020 General Fund to also be in balance. This is an incremental step to position the City in advance of unknown future costs in such areas as pension and labor. General Func REVENUES Balancing Strategy Based on a continued gradual growth of the regional economy and Fiscal Year 2018 year-to- date major tax revenue receipts, this budget assumes continued healthy growth in Property Tax and Transient Occupancy Tax in comparison to the Fiscal Year 2018 Adopted Budget. This Fiscal Year 2019 Budget assumes increases to major tax revenue receipts by approximately $5.8 million, or 4.9 percent, from $119.3 million to $125.2 million when compared to the FY 2018 Adopted Budget. Growth in major tax revenues reflects over 75 percent of the change from the FY 2018 Adopted Budget for all General Fund revenues. The City continues to seek new ways to generate revenues and monitors State and regional legislation for potential impacts as well. The passage of Santa Clara County Measure B will pro- vide approximately $38 million over the 30 -year period to help address some of our transporta- tion needs (this is separate funding from Measure B funds for grade separations). In addition, the recent passage of SB1, the Road Maintenance and Rehabilitation Act, is estimated to pro- vide an additional $1.2 million annually. These funds have been programed as part of the FY 2019-2023 Capital Improvement Plan for high -priority projects such as grade separation. We must continue to explore new revenue opportunities related to proposed new hotels and/or car dealership opportunities. 14 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER EXPENSES The City's General Fund expense budget of $210.7 million reflects a 0.13 percent increase from FY 2018 Adopted Budget levels of $210.4 million. As a service driven organization, the City's primary 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 Gen- eral Fund of $30.9 million, which includes the continued priority of investing $25.2 million in infrastructure annually. As discussed earlier, I stressed the need to examine the allocation and prioritization 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 and takes a further step by reducing costs through the elimination of ongoing expenses. The total positions budgeted in the General Fund reflect a year -over -year decrease in budgeted levels of 17.89, representing the net reduction of 17.6 FTE and a funding shift of 0.29 FTE. Despite these cost -containment strategies, we have continued to invest in critical services and initiatives such as public safety, parking plans, and our employees. We will continue to assess our resources and delivery of services as discussed above to ensure the continued high level of services cou- pled with fiscal prudency. All Funds This budget not only focuses on the General Fund but also continues to ensure financial stability 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 $0.8 million in FY 2019, to match the funding levels provided by the General Fund for a total contribution of $2.0 million. Major activities in non -General Funds include: Wastewater Treatment Fund As part of the 2019-2023 Capital Improvement Program (CIP) expenditures of $120.5 million are programmed, with $9.8 million allocated in Fiscal Year 2019. It is important to note that about 64 percent of expenditures in the Wastewater Treatment Fund are reimbursed by five contribut- ing partner agencies outside of the City of Palo Alto, based on each agency's expected capacity share. Overall, a total of eight capital projects are programmed over the five-year CIP. Airport Fund The City assumed airport operations from Santa Clara County in August of 2014 for the Palo Alto airport, which ranks among the busiest general aviation airports in the country. As the City assumed operations and transitioned away from subleases to Fixed Base Operators (FBOs), rental income has increased, offset by expenses for maintenance and cleaning responsibilities that were previously performed by the FBOs. The airport has been undergoing major construc- tion projects, leveraging grants from the Federal Aviation Administration (FAA), which reim- burse up to 90 percent of project costs. To ensure the stability of this fund, staff will continue researching alternative funding options to support the significant investment of grant funding from the FAA. Various Parking Funds Financial activities from daily parking reside primarily in three funds: University Avenue Parking District Fund, California Avenue Parking District Fund, and Residential Parking Permit Fund. Revenue in these funds is generated from parking permits and used for maintenance, repair, TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 15 TRANSMITTAL LETTER and beautification of parking facilities and public areas within these areas. In FY 2019, permits will increase in cost by 2.6 percent to cover rising general costs. As directed by the City Council, staff will develop potential strategies for the organization and scaling of a comprehensive parking strategy during the next fiscal year. Staff will continue to actively work with the City Council and engage the community to develop a comprehensive parking strategy including advancing incremental steps as they are developed. Storm Drainage Fund The FY 2019 Storm Water Management Fee is scheduled to increase by 2.9 percent based on an average increase of $0.65 per month approved by City property owners through a ballot measure in April 2017. The Storm Water Management Fee will sunset 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 Committee's recom- mendations, which has identified 13 capital improvement projects for FY 2019 and beyond. UTILITY RATE CHANGES FY 2017 was the first year in recent years that rate increases have been necessary across the City's utilities, resulting in an 8.7 percent increase in the average residential utility bill. Electric rates had not increased since FY 2009. FY 2019 continues the rate increases forecast last year in order to ensure the City's ability to replenish lower reserves, provide sufficient funding to cover increasing expenses for commodity costs, and repair and replacement of the City's aging utility infrastructure. The median monthly residential utility bill is expected to increase by 3.9 percent, or $11.02, from $282.48 to $293.50. The individual utility rate increases for FY 2019 can be found in the Enterprise Funds Summary section of this document. These rate adjustments were approved by the Utilities Advisory Commission and the Finance Committee. 16 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER Attachment B: Fiscal Year 2019 Salaries, Benefits, 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. Therefore, it should not be surprising that nearly 60 percent of the Fiscal Year 2019 General Fund Budget is attributable to salaries and benefits. The City will continue to conduct labor negotiations in FY 2019 with its various bargaining units, striving to ensure that Palo Alto remains a competitive employer in the region for top talent. Position Changes This budget includes the net reduction of 17.60 FTEs across all funds, representing a decrease of 1.7 percent from the FY 2018 Adopted Budget, from 1,058.95 to 1,041.35 full-time equivalent (FTE) positions. This represents the elimination of 11.00 positions in the Fire Department, reflecting changes to the fire services agreement with Stanford University, as well as other reductions, discussed in greater detail below. The table following summarizes the changes in positions from the FY 2018 Adopted Budget to the FY 2019 Adopted Budget. Position Changes FY 2018 Adopted to FY 2019 Ado otec Bucget General Fund Enterprise Funds Other Funds* Total Fiscal Year 2018 Adopted Budget Fiscal Year 2018 Approved Adjustments Fiscal Year 2018 Modified Budget Fiscal Year 2019 Increase Fiscal Year 2019 Decrease Fiscal Year 2019 Reallocation Fiscal Year 2019 Adopted Budget 602.92 (11.00) 591.92 0.75 (7.35) (0.29) 585.03 Net Difference (17.89) 357.86 357.86 357.86 98.17 1,058.95 (11.00) 98.17 1,047.95 0.75 (7.35) .29 0.00 98.46 1,041.35 0.29 (17.60) * Other Funds include Internal Service Funds, Special Revenue Funds, and the Capital Improvement Fund NOTE: This table does not include Hourly positions. This budget reflects a year -over -year net reduction of 17.60 positions, of which 11.00 positions have already been approved by the City Council with the realignment of the fire service agree- ment with Stanford University. This budget recommends the following net position changes by funding source: a net 6.89 reduction in the General Fund, representing the elimination of 7.35 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 17 TRANSMITTAL LETTER positions partially offset by the conversion of two part-time positions into a 0.75 FTE, and a 0.29 increase in Other Funds. The 0.29 FTE increase reflects a net -zero reallocation between the General Fund and Other Funds. The entirety of the 7.35 full-time FTEs recommended to be eliminated throughout the organiza- tion are in the General Fund. The 0.29 position reallocation reflects the realignment of certain services across the organization, while the 7.35 FTE eliminations represent efforts to reduce costs while minimizing the impacts to service delivery. Position Changes recommended in this budget include: Conversion of two 0.48 (part-time) management specialists in the Office of Sustainabil- ity into a 0.75 Management Analyst to better align with desired roles and responsibili- ties. Elimination of 1.00 Coordinator Recreation Programs, associated with the aquatics pro- gram that is now managed by an outside contractor. Elimination of 1.00 Library Specialist associated with special programming; the Library Department does not anticipate core service reductions such as hours of operations from this elimination. Elimination of 1.00 Senior Legal Secretary in the Office of the City Attorney. Elimination of 1.00 Cement Finisher and 1.00 Equipment Operator in the Public Works Department. Elimination of 1.00 Building Serviceperson in the Public Works department and realign- ment of funding to work being performed by an outside contractor. Elimination of 0.75 Hearing Officer in the City Clerk's office to align with the work being performed by an outside contractor. Elimination of 0.60 Senior Management Analyst in the Office of Management and Bud- get. Throughout the organization, classification changes are being recommended for existing full- time positions in this year's budget. They include: Reclassification of 1.00 Information Technology Manager to 1.00 Senior Technologist in the Information Technology department, giving the department greater operational capacity. The addition of 1.00 Landscape Architect, offset by the elimination of 1.00 Planning Arborist, enabling the Public Works department to ensure compliance with new state regulations. Reclassification of 1.00 Business Analyst to 1.00 Senior Business Analyst in the Utilities department. 18 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER Reclassification of 1.00 Program Assistant II to 1.00 Associate Planner in the Planning and Community Environment department to align with the business needs of the park- ing program. Reorganization in the Planning and Community Environment department, reclassifying 1.00 Senior Planner to 1.00 Principal Planner, 1.00 Planning Manager to 1.00 Planning Division Manager, and 2.00 Senior Planners to 2.00 Associate Planners. Reclassification of 1.00 Program Assistant to 1.00 Program Assistant II in the Office of Emergency Services to align with the needs of the department. More information on each of these full-time position changes, and information on part-time position changes, can be found in the individual department and fund summaries later in this document. In total, 19.22 part-time FTE are recommended to be eliminated through this budget. These changes in positions may be subject to meet and confer and reflect the recommended actions to the Finance Committee at this time. The Human Resources Department will evaluate all actions and the implications based on the City's current memoranda of agreements with var- ious employee units and address as appropriate. 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 overall cost -containment strategies. Past successful steps 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. Employees sharing the cost of health plans with almost all bargaining units receiving a flat -rate medical benefit. Implementing a less costly second -tier pension plan, parallel to the state's implementa- tion 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 is the case across the state. As part of the 2016 Actuarial Report, CaIPERS has continued their pension calculation methodology that calculates a payment for the Unfunded Accrued Liability (UAL) separate from the Normal Cost (NC). In December 2016, the CaIPERS board voted to lower the discount rate for future years from 7.5 percent to 7.0 percent, phasing in the reduction over three years beginning in Fiscal Year 2019 with a discount rate assumption of 7.375 percent. This budget includes the most recent pension rates from these valuation reports, as of June 30, 2016. When TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 19 TRANSMITTAL LETTER compared to the prior fiscal year, Fiscal Year 2019 employer contribution rates represent an average year -over -year increase of 9.9 percent. Miscellaneous plan rate increased 2.4 percentage points, a year -over -year 7.9 percent growth, from an employer contribution rate of 30.2 percent to 32.6 percent. Safety plan rate increased 5.9 percentage points, a year -over -year 11.9 percent growth, from an employer contribution rate of 49.7 percent to 55.6 percent. These increases reflect the more conservative assumption in the discount rate as well as changes to various actuarial assumptions, including the mortality tables. CaIPERS projected pension rates are included in the table below. Pension Rates By Plan (Fiscal Year) - CaIPERS FY 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Miscellaneous (%) 28.9 30.2 32.6 35.4 37.8 39.7 41.2 42.0 42.9 40.9 37.2 37.1 Safety (%) 45.4 49.7 55.7 60.8 65.0 68.6 71.6 73.2 74.8 76.1 76.6 76.8 Discount Rate (%) 7.5 7.5 7.375 7.25 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 As the above chart evidences, the City's pension payment trend continues to escalate based on the CaIPERs' assumptions of a 7.0 discount rate. This move represents CaIPERs' effort to lower the volatility associated with pension payments. A more conservative investment strategy should enable the fund to make its investment target on a more frequent basis. As of the June 20, 2016 reports, the City's unfunded liability of $404.7 million ($261.7 million miscellaneous plan, $143.0 million safety plan) reflects a funded rate of 64.2 percent and 63.6 percent for the miscellaneous and safety benefit plans, respectively. As directed by the City Council during the FY 2018 budget adoption, staff has worked with the Finance Committee regarding pension funding options over the course of the current fiscal year. Over three dedicated agenda items have been brought forward for discussion with the Committee working towards education on the City's pension liabilities and proactive policies that will ensure the continued active management of these liabilities. Staff anticipates returning to the Finance Committee during 2018 to present potential paths forward regarding the City's pension obligations. Alternative Pension Modeling: The tables and charts below continue the reporting and financial modeling that has been presented to the Finance Committee for alternative scenarios as com- pared to those reported above. Much discussion has centered on the actuarial assumptions used by CaIPERs that determine the City's annual contributions. This chart shows the pension rates as a percentage of payroll, with the immediate assumption of a 6.2 percent discount rate, as calculated by the City's outside actuarial consultant Bartel Associates. 20 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TRANSMITTAL LETTER Pension ates By Plan (Fiscal Year) - 6.2% Discount Rate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Miscellaneous (%) Safety (%) Discount Rate (%) 42.3 43.2 44.1 44.7 44.9 44.3 44.0 73.4 77.0 6.2 6.2 6.2 6.2 6.2 6.2 6.2 74.9 76.4 77.8 78.4 77.4 41.5 37.1 36.6 77.2 76.4 75.4 6.2 6.2 6.2 As the above chart evidences, the City's pension payment escalates more aggressively should the discount rate be amended to 6.2 percent. Should the discount rate be amended to 6.2 per- cent, an increase in the pension contribution for the FY 2019 budget would be approximately $12.5 million, a 31.6 percent increase over the current FY 2019 budget pension costs of $39.4 million. Of this increase, the General Fund contribution would rise by approximately $8.2 million. This increase in costs would require significant contemplation on the implications of achieving such a funding level. The Unfunded Liability of the City's plans would increase to $509.8 million at this 6.2 percent discount rate ($330.1 million miscellaneous plan, $179.8 million safety plan). To help proactively address the City's pension liabilities, this budget includes another $2.0 mil- lion contribution, representing approximately 5.0 percent of the City's pension obligation for FY 2019, to the City's irrevocable Section 115 Trust Fund (PARS). This continues the City's efforts to prefund its pension obligation and brings the total contributions to the PARS trust since its inception to approximately $7.6 million across all funds. The General Fund represents approximately $4.6 million of that total. A more in-depth discussion of the City's ongoing efforts with regards to pension are included in the 'Employee Information' section of this docu- ment. RETIREE HEALTHCARE Consistent with past practice, this budget assumes the full payment of the Actuarial Deter- mined Contribution (ADC) for retiree pension and healthcare costs. With the payment of the ADC, it is assumed that, all else being equal, the City will pay off its obligations and unfunded liabilities for pension and retiree healthcare costs. A separate City Manager Report more fully detailing the latest valuation report for the City's Other Post -Employment Benefit (OPEB) costs was transmitted to the Finance Committee for consideration in parallel with the development of this budget. Bi-annually, the City has an actuarial valuation done on its retiree medical benefits by an out- side consultant. The valuation was performed at the end of FY 2017 and it had a net positive outcome on the City's finances. The City's Fiscal Year 2018 ADC was $16.9 million based on the 2015 valuation report, and presumed a 7.25 percent discount rate. Based on the 2017 valuation report, the City's Fiscal Year 2019 ADC will be lower, and was calculated to be $16.0 million using a 6.75 percent discount rate. The primary drivers for this are premium caps, changes in mortality assumptions, and increased eligibility for Medicare premium plans, which are much lower in cost. The impact on the General Fund is even greater, representing the shifting popula- tions among the funds in the City of Palo Alto and the retirees from each fund. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 21 TRANSMITTAL LETTER A more in-depth discussion of the City's ongoing efforts with regards to OPEB liabilities will be included in the separate City Manager Report. More information is also included in the 'Retiree Health Benefit Fund' portion of this document. Retiree Healthcare Annual Required Contributions (by Fiscal Year) Fund 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 General Fund Non -General Funds TOTAL 10.9 5.2 16.1 10.3 6.7 16.9 10.2 5.8 16.0 10.5 6.0 16.5 10.8 6.2 17.0 11.2 6.3 17.5 11.5 6.5 18.1 11.9 6.7 18.6 12.2 6.9 19.2 12.6 7.2 19.8 13.0 7.4 20.4 13.4 7.6 21.0 22 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET BUDGET ACKNOWLEDGEMENTS .budget Acknowledgments Department Budget Coordinators Administrative Services Mary Figone City Attorney Stacy Lavelle City Auditor Jordan Christenson City Clerk David Carnahan City Manager Chantal Gaines Judy Ng Community Services Jazmin LeBlanc Sarah Ip Development Services Katie Whitley Khashayar Alaee 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 Jessie Deschamps Kiely Nose Jamie Perez Paul Harper Alexandra Harris Steve Guagliardo Chaitali Paliwal Chris Yi Kayla Shapiro • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 23 CITY OF PALO ALTO CITY OF PALO ALTO ORGANIZATIONAL CHART City of Palo Alto Organizational Chart Palo Alto Residents City Council 1 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 Monique le Conge-Ziesenhenne, Interim Director Development Services Department 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 Office of Sustainability Gil Friend, Chief Sustainability Officer Human Resources Rumi Portillo, Director/Chief People Officer Planning and Community Environment Police Department Robert Jonsen, Chief Public Works Mike Sartor, Director Utilities Edward K. Shikada, General Manager CITY OF PALO ALTO ORGANIZATIONAL CHART • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 25 CITY OF PALO ALTO Palo Alto at a Glance iirestfac San Francisco Sonnet Dra;rict Ua KIa.0 San Raman Alameda Crraltor degion. Ilor:e,s Point San Francisco [)ay Crty Brisbane Bay South San Francisco Pan M brae I rancisco and 136,, Refuge c e 1,err;a El Granada loll Moon Bay San Mitten Soynb San r•.nateo San Czar los San Leandro 4111 Castro Valle Hayward rrei Union City Luer Larding Ecological Reserve Fremont Newark L;. Redwood City (0 0.) Arne --"ton Palo Alto Stanford Woodside Portola Valley U'' co. La I•on;fa ;asp Pleasr Milprtar North San Jose Sunnyvale San Jo, Cupertino,_,. s^', L .l�lr BT 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.org 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 4,385 acres CREDIT RATING AAA PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 27 PALO ALTO AT A GLANCE POPULATION Palo Alto's population was 66,649 in 2017. This represents a 0.26 percent increase over the previous year and a 13.5 percent increase since 2000. Approximately 24.7 percent of the population is under the age of 18, and the median age is 41.8. Approximately 50.1 per- cent of the population is female, and 49.9 percent of the population is male. EDUCATION Palo Alto has one of the most outstanding educational systems in the nation. Palo Alto was recently named one of California's most educated cities. Over 98.3 percent of Palo Alto residents aged 25 or over have received a high school diploma. Over 81.3 percent have obtained a bachelor's degree and 53.3 per cent have earned a post -graduate or profes- sional degree. School enrollments in Palo Alto increased to 12,261, or 8.23 percent, between 2008 and 2017. 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, California, and Santa Clara County were 1,484, 1,476, and 1,606, respectively. INCOME Palo Alto's median household income on average for 2016 was $132,673 and the per capita income in 2016 was $83,033. As of 2016, 59.2 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 house- hold in Palo Alto owner -occupied and renter occupied homes was 2.36 in 2016, compared to 2.26 per household in 2000. HOUSING UNITS In 2016, 54.9 percent of the 29,336 housing units were owner -occupied and 45.1 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 12.6 per- cent more total housing units from 2000 to 2016. 28 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PALO ALTO AT A GLANCE DEVELOPMENT The City issued approximately 2,259 residen- tial and 711 commercial building permits in Fiscal Year 2017. The combined valuation for all permits was $366.8 million. OFFICE AND INDUSTRIAL RENTAL ACTIVITY Palo Alto's net rentable office space totaled approximately 7.45 million square feet as of the fourth quarter of 2017. The vacancy rate during this same time period was 3.9 percent compared to 10.3 percent for the Silicon Val- ley market. Average asking rents in Palo Alto and the Silicon Valley were, respectively, $8.39 and $4.79 per square foot, as of the fourth quarter of 2017. Net rentable square footage for industrial facilities in Palo Alto was 1.6 million, with a vacancy rate of 3.5 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 2.2 percent and ask- ing rent averaged $1.19 per square foot for manufacturing and $0.93 for warehouse. Net rentable space for Research and Develop- ment (R&D) facilities in Palo Alto totaled 10.1 million square feet with a vacancy factor of 1.7 percent and average asking rent of $5.51 per square foot. The vacancy rate for the Silicon Valley market was 8.2 percent with an aver- age asking rent of $2.36 per square foot. •1:11V1'1.111 11 P41111 111_AIU:11.. Top 25 Major Sales/Use Tax Contributors, FY 2017 Anderson Honda Apple Stores Audi Palo Alto Bloomingdales Bon Appetit Management Co. Fry's Electronics Hewlett-Packard Houzz Shop Integrated Archive Systems Lucile Pa Macy's D Magnuss :kard Children's Hospital partment Store m's Toyota Neiman Marcus Department Store Nordstrom Department Stores Shell Service Stations Space Systems Loral Stanford University Hospital Tesla Lease Trust RETAIL SALES AND SALES TAX REVENUE Sales and use tax totaled $29.9 million in FY 2017, a decrease of $0.1 million or 0.3 percent. Tesla Motors The Pace Gallery Tiffany & Company Urban Outfitters USB Leasing Varian Medical Systems Volvo Cars Palo Alto On a year over year basis (FY 2017 versus FY 2016), the economic segments showing par- ticular strength within the City were auto leasing and sales, drug stores, recreation products, furniture/appliance, office equip - PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 29 PALO ALTO AT A GLANCE ment, and health services. Those showing decreases were department stores and con- struction. Retail sales, which represent 29.7 percent of sales tax receipts have been steadily eroding due to online sales. Restaurants and food products sales totaled $4.7 million, a decrease of 1 percent over FY 2016; in the prior six years this economic segment averaged 8.5 percent growth. Principal Property Taxpayers, FY 2017 Rank 1 2 3 Google Inc. 4 5 Whisman Ventures, LLC 6 7 Hobach Realty Co. LP 8 9 BVK Hamilton Ave LLC 10 Taxpayer Leland Stanford Jr. University Loral Space and Communications EOSII Palo Alto Technology Center LLC Hudson Embarcadero Place LLC SI 43 LLC Ronald & Ann Williams Charitable Foundation 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, Genencor, Tencent America, Skype, Nest, the Institute for the Future and many other leading technology and business services firms. Palo Alto was named the 2017 most livable U.S. city and again named among the top 7th most livable U.S. cities in 2017 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 Total Taxable Assessed Value $4,517,330 $254,505 $191,425 $123,548 $113,709 $110,126 $76,703 $72,300 $70,347 $63,641 $5,593,634 restaurants and its highly acclaimed city ser- vices. Businesses are drawn to Palo Alto not only because of its great location, workforce, and 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. 30 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PALO ALTO AT A GLANCE EMPLOYMENT The City had 32,008 employed residents in 2018. 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 95,882. Palo Alto's unemployment rate was 2.8 percent in 2017, which was considerably lower than the nation (4.1 percent), state (5.7 percent), and county (4.0 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, 2017. Principal Employers, FY 2017 Rank Employer Number of Employees 1 Stanford Healthcare 2 Lucille Packard Children's Hospital 3 Stanford University 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 5,500 4,850 4,300 3,900 3,500 3,500 2,800 2,500 2,200 1,400 34,450 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 31 PALO ALTO AT A GLANCE Parks, Recreation & Public Safety Community Centers Item (FY 2017) Parks Parks Acreage Playgrounds Community Centers Zoo Golf Courses Gymnasiums/Fitness Rooms Youth Centers Walking/Biking Trails Libraries Item (FY 2017) Library Branches Items Checked Out (Circulation) Books (Inventory) eBooks & eMusic (Inventory) AudioNisual - DVD/CDs (Inventory) Reference Questions Number 36 162 acres 29 4 1 1 6 1 41.19 miles Number 5 1,524,614 249,735 92,117 49,350 34,294 Item (FY 2017) Police Police Stations Sworn Police Personnel (FY 2015) Police Vehicles Motorcycles Canine Units Number of Calls for Service Item (FY 2017) Fire Fire Stations Sworn Fire Personnel (FY 2017) Fire Engines Fire Trucks Ambulances Number of Calls for Service Number 1 92 25 4 1 53,901 Number 7 96 9 2 6 9,056 32 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PALO ALTO AT A GLANCE Infrastructure, Vaintenance & Development Activity Item (FY 2016) Number Street Miles 471 miles Lane Miles Resurfaced Annually 39 miles Building Permits Issued Annually 2,970 permits Number of Fire Inspections 6,228 Active Capital Improvement Projects 240 projects Capital Improvement Projects Exp. $73.92 million Miles of Water Municipal Mains 236 miles Gallons of Water Delivered (Daily) 9.6 million Miles of Municipal Wastewater Mains 217 miles Gallons of Wastewater Treated Miles of Gas Mains Overhead Electrical Line Miles 2.8 billion 209 miles 117 miles Underground Electrical Line Miles 187 miles Fiber Optic Backbone Miles Sustainability 42 miles Number Total Tons of Material Recycled or Composted 60,582 tons * Calendar year 2017. "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 2017. "Carbon Neutral Sources" include eligible renewable (51%) and large hydro- electric power (73%). Due to the bountiful hydro conditions in 2017, the City was able to sell surplus carbon neutral electricity supplies to other utilities. PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 33 PALO ALTO AT A GLANCE Sustainability Item (FY 2017) Number Total Megawatt -hours Purchased from Eligible Renewable Sources* 481,974 hours Percent of Electric Portfolio Purchased from Eligible Renewable Sources 51% Percent of Electric Portfolio Purchased from Carbon Neutral Sources** 100% * Calendar year 2017. "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 2017. "Carbon Neutral Sources" include eligible renewable (51%) and large hydro- electric power (73%). Due to the bountiful hydro conditions in 2017, the City was able to sell surplus carbon neutral electricity supplies to other utilities. SOURCES: POPULATION: U.S. Census Bureau, 2015 American Commu- nity Survey, Demographic and Housing Esti- mates, 1 -Year Estimates., Table DP05. 2017 Official City Data Set. EDUCATION: U.S. Census Bureau, 2015 American Commu- nity Survey, Educational Attainment, 1 -Year Estimates, Table S1501. FY2016 City of Palo Alto Comprehensive Annual Financial Report (CAFR) (Demo- graphic and Economic Statistics- Last Ten Fiscal Years). CA Dept. of Education -Data & Statistics - school performance -secondary education for Palo Alto Schools and County SAT score. 2016 average SAT scores by State on Pre- scholar.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 Esti- mates, Selected Economic Characteristics, Table DP03. PERSONS PER HOUSEHOLD AND HOUSING UNITS: 2015 American Community Survey 1 -Year Esti- mates, Selected Housing Characteristics, Tables, DP04. DEVELOPMENT: City of Palo Alto Planning and Development Department OFFICE AND INDUSTRIAL RENTAL ACTIVITY: CBRE Silicon Valley: Office, Industrial, and R&D MarketViews Q4 2016 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 CAFR TOP 25 MAJOR SALES/USE TAX CONTRIBUTORS: City of Palo Alto Sales Tax Digest Summary First Quarter Sales (Jan -March- 2016) -Top 25 Major Sales/Use Tax Contributors. PRINCIPAL PROPERTY TAXPAYERS: City of Palo Alto 2015-2016 CAFR- Principal Property Taxpayers -Current Year and Nine Years Ago. EMPLOYMENT: 2017 Official City Data Set. California Employ- ment Development Department- Labor Mar- ket 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 CAFR 34 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT The Budget Process and Document Basis for 3uc get Deve oament 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 City Council adoption of the budget in order to incorporate community input into the decision making process. City Council Top 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 2018: • Transportation ▪ Housing ▪ Finance ▪ Grade Separation THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 35 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 modifications to the five-year capital plan. November - December: Budget guidelines and timeframes are developed and distributed for the operating and capital budgets as well as the annual municipal fee schedule. 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 reviews 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. 36 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT BUDGET HEARINGS With City Council and Finance Committee FY 2019 Adopted Budget escription Time/Location Departments Attending, Monday, April 30 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 15 Finance Committee Special Meeting 9:00 AM Community Meeting Room Budget Kickoff; Departments/Funds: - Non -Departmental - Council Appointed Officials & Council; Office of Sustainability - Retiree Health Benefit Fund - Human Resources (including Employee Benefits Funds, Worker's Compensation Fund, and General Liabilities) - Administrative Services, Print & Mail Funds - Information Technology (Capital & Operating) - Development Services - Community Services - Utilities (Capital & Operating) Wednesday, May 16 Finance Committee Special Meeting 9:00 AM Community Meeting Room Budget Continuation; Departments/Funds: - Municipal Fee Schedule - Fire - Police - Office of Emergency Services - Planning & Community Environment - Special Revenue Funds (including Parking District & Stanford Development Agreement Fund) - Library - General Fund Capital - Public Works: General Fund, Refuse, Storm Drain, Wastewater Treatment, Airport, Vehicle Replacement, related Capital Wednesday, May 23 Finance Committee Special Meeting 9:00 AM Community Meeting Room - Wrap-up with Finance Committee Monday, June 18 City Council 6:00 PM Council Chambers Public Hearing - Budget Approval & Adoption THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 37 THE BUDGET PROCESS AND DOCUMENT Unc erstanding the Budget Document The operating budget document includes citywide 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 funds 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. 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 allo- cated 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 adminis- trative 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, general 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 with 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 transporta- tion mitigation fees paid by developers. Other special revenue funds include assessments for parking 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. 38 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 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.paloalto.opengov.com. The City invites you to use the online tool to: ▪ Search 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. You can also cut and paste any illustration into another document, send it to friends using email or Twitter, or post it on Facebook. D9e,e, Departments gin Departments Comeau -60r Services $22.»0.827(I5 ) Public Woke soots 513,4(32155 (>B`%) 2010-0 20719 Actual PSC. Year Actual 229Aua-15 Budget Fire S 27.977,154 (16.4%) Ponce $ 34.o>0.42100 5%) ane commomry 57,022 377 (aI'M 0 7475.472 (. Services S 7175,372 (0,0 bre, 87.520,312 (e4%) More (a groupeO) $22,152.207(12.9£) THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 39 THE BUDGET PROCESS AND DOCUMENT 0 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 department section. For example, the Administrative Ser- vices Assistant Director oversees the SAP functional team so it is included on the orga- nizational chart, but the positions are budgeted in the Technology Fund so they do not appear in the ASD departmental budget summary. Accomplishments: identifies the department's noteworthy accomplishments over the past fiscal year. 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 achieve- ment of those goals. Key Performance Measures: lists key department performance measures related to some goals and objectives. Performance Measures are grouped by intended outcome such as Quality, Cost, Cycle Time, Customer Satisfaction, and Sustainability identified with icons as follows: 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 2016 Actuals, FY 2017 Actuals, FY 2018 Adopted and FY 2019 Proposed 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 40 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET THE BUDGET PROCESS AND DOCUMENT those that are received from another City department. For example, the Utilities Department reimburses 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 adopted budget. Base budget reconciliation changes include updated salary and benefits cost in accordance with the salary and benefits structure approved by the City Council, deletion of one-time expenditures, and/or the 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 budget 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 Proj- ect 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. THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 41 THE BUDGET PROCESS AND DOCUMENT 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. 42 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET BUDGET AWARDS C \e/ California Society of jvlunicipalFinance Officers Certificate of Award Operating Budget Excellence Award Fiscal Year 2017-2018 Presented to the City of Palo Alto For meeting the criteria established to achieve the Operating Budget Excellence Award. February 7, 2018 Drew Corbett CSMFO President Craig Boyer, Chair Professional Standards and Recognition Committee Dedicated Excellence in Municipal Financial Reporting ) BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 43 BUDGET AWARDS GO GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Palo Alto California For the Fiscal Year Beginning July 1, 2017 Executive Director 44 BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ;111M.g1IMM,a12 GD The G ov ernment Finan ce Officers Association of the Un ited States an d Can ada presents this CERTIFICATE OF RECOGN ITION FO R BUDG ET PREPARATION to Office of Man agemen t & Budget City of Palo Alto, California The Cer tifica te of Recognition for Budget Preparation is presented by the Gover nment Finan ce Officers Association to those individuals who have been instrument al in their govern ment unit achieving a Distinguished B udget Present atio n Award, The D istin guished Budget Prese ntation Award, which is the high est aw ard in governm ental budgeting, is presented to those government u nits whose budgets are judged to adhere to program standards . Executive Direct or Date March 01, 2018 BUDGET AWARDS • CITY OF PALO ALT O FISCAL YEAR 2019 ADOPTED BUDGET 45 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 47 CITY OF PALO ALTO Fund Structure CITYWIDE FUNDS OVERVIEW General Fund General Operating Utility Users Tax Special Revenue Fund Community Development Street IIII Improvement Federal & State Revenues Housing In -Lieu I Special Districts Public Benefits Business Improvemen Stanford Development Capital Capital Projects Traffic Mitigation & Parking in -Lieu • Debt Service 2002 Certificate of Participation 2010 Library General Obligation CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 49 CITYWIDE FUNDS OVERVIEW Fund Structure Enterprise Electric Airport Gas Refuse Water 7 Storm Drainage Fiber Optics Wastewater Collection Wastewater7 Treatment Internal Service General Benefits Retiree Health Benefits Printing & Mailing Services U Vehicle Replacement & Maintenance Workers' Compensation Information Technology General Liability Insurance 50 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ■ CITYWIDE FUNDS OVERVIEW Total Citywide Revenue by Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ Charges for Services 25,990 24,210 28,985 29,421 436 Charges to Other Funds 12,851 11,414 11,857 10,863 (994) Documentary Transfer Tax 6,266 7,491 6,930 7,434 504 From Other Agencies 3,621 7,373 43,228 17,094 (26,134) Net Sales 257,786 291,672 300,463 314,561 14,098 Other Revenue 26,020 19,580 42,916 76,979 34,063 Other Taxes and Fines 2,785 2,360 2,247 2,372 125 Permits and Licenses 9,859 9,322 11,314 11,423 109 Property Taxes 41,290 44,051 46,500 49,899 3,399 Rental Income 16,323 16,466 17,264 16,571 (693) Return on Investments 12,102 8,458 8,064 8,303 239 Sales Taxes 30,018 29,923 31,458 31,246 (212) Transient Occupancy Tax 22,366 23,477 25,143 25,049 (94) Utility Users Tax 12,469 14,240 13,867 16,092 2,225 Total 479,746 510,037 590,236 617,307 27,071 FY 2019 Change % 1.50% (8.38%) 7.27% (60.46%) 4.69% 79.37% 5.56% 0.96% 7.31% (4.01%) 2.96% (0.67%) (0.37%) 16.05% 4.59% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 51 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 III _I■ III ■.■ ■ .I III eh e, ,,5 e5 a5 oe a+ e5 e`' a a+ e" a+ e5 .c, i? e° a+ o p '� �� a+ oto o� .� a� c�etJ QaOe� e4. `ems etQ� Q'eJe ���ec acaQ AAA \' % AP ' c yeic eN. ko ei `SI Sa D -r e. ,Sta AO Qe <*a J°Q *� J a`�eh r p e� o Der mac `<a+ Quo Q.e ��0c. �`�ya J,��• Cr Qt° ct-e��i acao Leo ire y6c% Qes ( O°ef ? ,�t2. • FY 2017 Actuals is FY 2018 Adopted • FY 2019 Adopted FY 2019 Budget $711.2 Million Use of Reserves/Fund Balance 13.2% Net Sales 44.2% Charges for Services 4.1% Utility Users Tax Permits and Licenses 2.3% 1.6% From Other Agencies 2.4% Return on Investments 1.2% Sales Taxes 4.4% Charges to Other Funds 1.5% Other Revenue 10.8% Documentary Transfer Tax 1.0% Other Taxes and Fines 0.3% Property Taxes 7.0% Rental Income 2.3% Transient Ocucpancy Tax 3.5% 52 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW Total Citywide Expense by Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Allocated Charges 36,946 35,729 49,025 50,557 1,532 3.12% Contract Services 33,911 35,541 41,546 47,278 5,732 13.80% Debt Service 23,980 17,383 20,609 20,692 83 0.40% Facilities & Equipment 554 769 604 655 51 8.44% General Expense 16,912 14,822 33,335 15,341 (17,994) (53.98%) Rents & Leases 12,285 12,402 13,669 14,118 449 3.28% Salary&Benefits 164,162 176,389 196,933 198,097 1,164 0.59% Supplies & Material 8,041 7,260 8,372 8,521 149 1.78% Utility Purchase 124,214 138,003 154,550 153,533 (1,017) (0.66%) Capital Improvement Program 51,849 66,760 142,895 190,561 47,666 33.36% Net Transfers (3,754) (5,272) 10,743 11,863 1,120 10.43% Total 469,100 499,786 672,281 711,216 38,935 5.79% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 53 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 MIN ■U• EA dl ill III __. 1111 eye /4? $ �� e �`a` J`�ee t ye tac o a e Deb a& <C.d' 4} e� Qt J of �e� \`o`a ot• ey4r • a•e ``eh O a• J �. • FY 2017 Actuals M FY 2018 Adopted • FY 2019 Adopted FY 2019 Budget $711.2 Million Capital Improvement Program 26.79% General Expense 2.16% Utility Purchase 21.59% Rents & Leases 1.99% Net Transfers 1.67% Allocated Charges 7.11% Contract Services 6.65% Facilities & Equipment 0.09% Salary & Benefits 27.85% Debt Service Supplies & Material 2.91% 1.20% 54 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund 3alance GENERAL FUND ENDING FUND BALANCE 6/30/18 ESTIMATED REVENUES NET FUND TRANSFERS General Fund $41,287 $ 194,725 $ (11,217) ESTIMATED EXPENDITURES $ 179,808 ENDING FUND BALANCE 6/30/19 $ 44,987 Total General Fund $41,287 $ 194,725 $ (11,217) $ 179,808 $ 44,987 CAPITAL FUNDS Capital Improvement Fund $ 28,936 $ 54,409 $ 51,559 $ 133,244 $ 1,660 Cubberley Property Infrastructure $ 3,830 $ 0 $ 1,864 $ 1,994 $ 3,700 Fund Total Capital Funds $ 32,766 $ 54,409 $ 53,423 $ 135,238 $ 5,360 DEBT SERVICE FUNDS Parking 2002 COPS (Taxable) Debt Library Bonds Total Debt Service Funds $251 $0 $162 $162 $251 $ 6,640 $ 4,427 $ 0 $ 4,427 $ 6,640 $ 6,891 $ 4,427 $162 $ 4,589 $ 6,$9'1, ENTERPRISE FUNDS Electric Fund Fiber Optics Fund Gas Fund Wastewater Collection Fund Water Fund Refuse Fund Storm Drain Fund Wastewater Treatment Fund Airport Fund $ 68,361 $ 154,438 $ (8,935) $ 161,912 $ 51,952 $ 5,556 $ (115) $ 4,051 $ 27,270 $ 14,487 $ 37,799 $ (7,130) $ 36,328 $ 8,828 $ 941 $ 21,182 $ (282) $ 23,562 $ (1,721) $ 17,698 $ 44651 $ 122 $ 58,530 $ 3,941 $ 8,321 $ 32,868 $ 170 $ 29,702 $ 11,657 $ 828 $ 7,378 $ (25) $ 9,339 $ (1,158) $ 17,072 $ 34,411 $ (54) $ 35,401 $ 16,028 $ 2,096 $ 11,879 $ (7) $ 12,373 $ 1,595 $ 25,880 Total Enterprise Funds $ 155,684 $ 350,162 $ 916,256) $ 371,198 $ 118,392 INTERNAL SERVICE FUNDS General Benefits Fund $ 1,596 $ 16 $ 61,157 $ 61,905 $ 864 Retiree Health Benefit Fund $ 3,262 $ 59 $ 15,998 $ 16,059 $ 3,260 Workers' Compensation Fund $ 2,815 $ 16 $ 3,763 $ 6,102 $ 492 Liability Insurance Fund $ 1,400 $ 64 $ 1,982 $ 2,984 $ 462 Printing and Mailing Fund $ 0 $ 0 $ 1,565 $ 1,480 $ 85 Technology Fund $ 18,343 $ 473 $ 15,837 $ 19,518 $ 15,135 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 55 CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund 3alance Vehicle Replacement and Maintenance Fund Total Internal Service Funds ENDING FUND BALANCE 6/30/18 $ 6,441 $ 33,857 ESTIMATED REVENUES $ 333 NET FUND TRANSFERS ESTIMATED EXPENDITURES $ 8,332 $ 13,409 $ 961 $ 108,634 ENDING FUND BALANCE 6/30/19 $ 1,697 $ 121,457 $ 21,995 SPECIAL REVENUE FUNDS 111 I 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 Downtown Business Improvement District Stanford Development Agreement (SUMC) Public Art Funds Total Special Revenue Funds $ 150,29 $ 604 $ 5,371 $ 44,738 $ 4,609 $ 10,714 $ 32 $ 19,712 $ 892 $ 2,904 $ 530 $ 2,782 $ 4,755 $ 474 $ 142 $ 296 $ 285 $ 37 $ (3,891) $ (2,904) $0 $ (1) $ (2,508) $ (6,947) $0 $ (10,283) $ 168 $0 $0 $ 578 $ 375 $ 4,949 $ 2,200 $ 148 $0 $ 188 $ 101,094 $ 12,812 $ (26,366) $ 12,030 $ 604 $ 5,323 $ 47,143 $ 1,907 $ 2,041 $ 26 $ 9,725 $ 302 $ 8,439 $ 79,101 TOTAL OPERATING FUND BALANCE $ 371,579 $ 617,496 $ 108,380 $ 820,729 $ 276,726 56 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW Citywide Average Salary Full -Time Equivalent (FTE) % of City Salary (1) In -Lieu Holiday Incentive Pay (2) Mgmt/ Prof 230.75 22.1% 143,146 N/A N/A Overtime (Average) N/A Management Leave (80 Hours) 5,506 Pension Employer Portion Misc 32.56%;Safety 56.63% (3) Medicare Medical DentalNision Retiree Medical (4) Workers' Comp LI FE/LTD/SU I Non -salary Benefits (5) Average Salary & Benefits Isolate Holiday Pay from Salary Category Salary, includes holidays Holidays (assumes 11, 9 hour days) Salary, excludes holidays Notes: 46,608 Utilities Mgmt/ Prof 49.00 4.7% 156,503 N/A N/A N/A 6,019 50,957 Fire Chief Asscn. Fire Fighters Police Mgmt Asscn. 4.00 88.00 7.00 0.4% 8.5% 0.7% 182,387 130,809 205,579 N/A 5,574 N/A N/A 896 N/A N/A 21,725 N/A 7,015 N/A 7,907 101,462 72,769 114,364 PA POA 83.00 8.0% 136,894 4,022 1,184 15,411 N/A 76,154 SEIU 579.6 55.6% 90,382 284 357 4,595 N/A 29,428 Average 1,041.35 100.0% 113,437 1,317 512 7,799 5,671 42,482 2,075 2,269 2,645 1,897 2,981 1,909 1,310 1,645 18,044 19,382 25,557 20,802 23,312 20,919 18,265 18,865 1,950 1,827 2,507 2,195 2,281 2,135 1,828 1,930 6,842 6,939 11,750 9,307 12,714 11,193 5,654 6,798 4,470 1,424 N/A 8,564 N/A 7,293 4,831 5,106 658 658 658 658 658 658 658 658 3,118 3,111 2,673 173 3,173 173 173 994 232,998 249,090 336,654 275,369 372,969 278,021 157,753 207,214 143,146 156,503 182,387 130,809 205,579 136,894 90,382 113,437 6,813 7,449 8,681 6,226 9,785 6,516 4,302 5,399 136,333 149,054 173,706 124,583 195,794 130,378 86,080 108,038 (1) Salary is calculated at actual pay rate (base pay and special pays, as applicable) as of February 2016 adjusted for step increases in accordance with applicable Memoranda of Understandings 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 55.63%, while SEIU employees will pick-up 1.0% and MGMT employees will pick up 0.5%, transitioning to 1.0%. (4) Annual amount incurred for active employees (normal cost only). CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 57 CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE by Fund 10 Year Trend - Citywide FTE by Fund 700 600 500 400 300 200 100 1 1 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (Current) General Fund FTE ■ Enterprise Fund FTE F Other Funds FTE 58 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE vs Population 10 Year Trend - Total Citywide FTE Positions vs. Population Growth 1,080 1,070 1,060 1,050 1,040 — 1,030 — 1,020 — 1,010 — 1,075.60 63,- 67,0W - 66,000 - 65,000 1,04235 64,000 63,000 62,0W 61,0W 1,000 60,0W FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (Current) Mm Total Citywide HE —Population CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 59 CITY OF PALO ALTO MAJOR CAPITAL PROJECTS Description The combined Fiscal Year 2019 Adopted Capital Budget, which includes the Capital Improvement Funds, Enterprise Funds, and Internal Service Funds, is $221.2 million, an increase of $48.3 mil- lion, or 27.9%, compared to the Fiscal Year 2018 Adopted Capital Budget of $172.9 million. The overall 2019-2023 Capital Improvement Program (CIP) is $747.0 million, an increase of $143.5 mil- lion, or 19.2%, compared to the 2018-2022 CIP of $603.5 million. 2019-2023 Capital Improvement Program by Fund Type Capital Innprovement_/ Funds 45% _Enterprise Funds 51% _Internal Service Funds 4% On the following pages, please find a listing of major capital improvement projects which include: • Projects that are part of the City 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 5 -Year CIP For a detailed discussion of the City's Fiscal Year 2019 Adopted Capital Budget, please visit the City's website at www.cityofpaloalto.orq/budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 61 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Five -Year Total Budget CIP Cost Project Cost Airport Fund: Airport Apron Reconstruction (AP -16000) $10,768,663 $27,989,502 $39,323,810 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 will have maintenance operating expenses for asphalt slurry seal estimated every five years. Capital Improvement Fund: Animal Shelter Renovation (PE -19002 $831,279 T $831,279 $831,279 This project provides funding for interim facility improvements to the Animal Shelter that are anticipated to accompany operation of the shelter by a contractor. The improvements include expanding and remodeling the medical suite and providing a new 900 square foot modular building for office space and educational programs for the public. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Baylands Boardwalk Improvements (PE - 14018) $1,039,099 $1,039,099 $1,738,861 This project provides funding for design and construction to replace the existing boardwalk at the Lucy Evans Baylands Nature Interpretive Center (Interpretive Center). Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Baylands Flood Protection Levee Improvements (PE -17006) $1,039,099 $1,039,099 $1,039,099 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 the 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 Transportation Plan Implementation (PL -04010) $4,261,921 $6,795,155 $6,795,155 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. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 62 MAJOR CAPITAL PROJECTS Capital Improvement Fund: Byxbee Park Completion (PE -18006) $653,962 $3,373,962 $3,600,000 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. Byxbee Park is maintained under a large parks maintenance contract, which will be bid out for services during FY 2019. As these costs are quantified, adjustments will be brought forward in future budgets. Capital Improvement Fund: Charleston/Arastradero Corridor Project (PE -13011) $400,000 $6,745,200 $19,640,070 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 California Environmental Quality Act (CEQA) review for the entire corridor was completed in September 2015 and National Environmental Protection Act (NEPA) was completed in October 2016. Final design for the corridor was completed in FY 2017. Operating Impact This project is anticipated to impact operating expenses in the future. Landscaping and irrigation maintenance is estimated to increase by $53,045 in FY 2020 and by 3% annually thereafter. Tree trimming maintenance is estimated to be $17,500 per year. Capital Improvement Fund: Downtown Automated Parking Guidance Systems, Access Controls, and Revenue Collection Equipment (PL -15002) $1,291,734 $2,704,839 $2,862,643 This project addresses infrastructure and capital improvements for downtown parking facilities. This includes a facility management system, lane equipment, lane access controls, and pay -on -foot stations. This project includes design and installation of new downtown parking guidance systems, access controls, and revenue collection equipment that will be coordinated with both the Downtown Parking Wayfinding project (PL -15004) and findings from the Downtown Parking Management Study that were presented to the City Council early in 2017. This project also includes cameras in garages for patron security. The City Council has directed staff to proceed with a Single Space Detection with Individual Indicator Lights. This system provides the highest level of customer service and tracks occupancy by space using ceiling mounted detection sensors in conjunction with LED lights mounted above each space that indicate the type of space (available, occupied, permit, public, handicapped, valet, etc.). Operating Impact The ongoing operating costs for cameras is not known at this time. As costs are quantified, adjustments will be brought forward in future budgets. Capital Improvement Fund: Downtown Parking Management and System Implementation (PL -16002) $1,116,122 $1,320,913 $1,343,883 This project includes implementation and installation of equipment to implement the outcomes of the paid parking study for downtown, including the Comprehensive Parking Permit and Citation System. Operating Impact This project is not anticipated to impact operating expenses. 63 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET MAJOR CAPITAL PROJECTS we- ear Total CIP Cost Project Cost Capital Improvement Fund: Embarcadero Road at El Camino Real Improvements (PL -15001) $5,709,966 $5,709,966 $6,875,690 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: Facility Interior Finishes Replacement (PF $1,036,509 $2,096,648 $2,096,648 02022) This project provides funding for replacement or improvements to interior finishes such as flooring, walls, cabinets, paint, lighting, ceiling tiles, soundproofing, fixed office furniture, doors, windows, and associated fire/life safety, mechanical, electrical, and plumbing code compliance requirements at various City facilities. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Fire Station 3 Replacement (PE -15003) $665,000 $9,899,447 This project provides funding to replace Fire Station 3 at the corner of Newell and Embarcadero 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 $7,233 in FY 2019 and by 3% annually thereafter. Capital Improvement Fund: Fire Station 4 Replacement (PE -18004) $0 $8,200,000 $8,200,000 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 $8,195 in FY 2019 and by 3% annually thereafter. Capital Improvement Fund: Highway 101 Pedestrian/Bicycle $13,749,999 $13,969,999 $18,496,187 Overpass Project (PE -11011) 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. 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) Renovation (AC -18001) $1,077,331 $1,930,828 $3,588,952 This project provides funding to 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, new exhibitions (including temporary staffing for design and prototyping), deck construction costs (partial), park signage (partial), furniture and equipment costs, payment and performance bonds, re -opening marketing and outreach expenses. Operating Impact MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 64 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost This project is not anticipated to impact operating expenses. Capital Improvement Fund: Municipal Service Center A, B, and C Roof $1,974,289 $1,974,289 $1,974,289 Replacement (PF-17000) This project provides funding for a fluid, reinforced water proofing application over the existing roof. The existing asphalt and gravel roof is nearing the end of its useful life and needs to be rehabilitated. If the existing roof is allowed to deteriorate beyond a certain point, the fluid applied system cannot be used and a full replacement of the roofing system would be required. The application will meet current cool roofing codes to optimize 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) $831,279 $831,279 $2,334,769 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. The project also includes the renovation of office space and shop areas in building C. 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) $44,903,537 $45,963,537 $47,901,827 This project provides funding for the design and construction of a new public parking garage on the existing Lot C-7 in the California Avenue commercial area. The project will include approximately 636 parking stalls and will have two below -ground and four above -ground levels. Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $110,000 in FY 2020 and increase 3% annually thereafter. Capital Improvement Fund: New Downtown Parking Garage $26,075,000 $26,675,000 $29,136,002 (PE -15007) This project provides funding for a new public parking garage in the University Avenue commercial area at existing Parking Lot D at the corner of Hamilton Avenue and Waverly Street. The project will 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. Custodial and maintenance costs are estimated to be $81,164 in FY 2020 and increase 3% annually thereafter. Capital Improvement Fund: New Public Safety Building (PE -15001) T $100,000 $87,650,000 $92,197,236 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 (EIR) 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. Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $334,577 in FY 2022 and increase by 3% annually thereafter. 65 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost Capital Improvement Fund: Newell Road/San Francisquito Creek Bridge Replacement (PE -12011) $2,623,726 $2,623,726 $4,269,858 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 Francisquito Joint Powers Authority's initial flood protection project as well as bicycle and pedestrian traffic. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Railroad Grade Separation (PL -17001) $1,116,122 $10,137,065 $11,938,858 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 2% of actual construction costs. Capital Improvement Fund: Sidewalk Repairs (P0-89003) M_ $1,628,027 $8,466,585 $8,466,585 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. Additionally, a sidewalk program assessment to evaluate options for improving the City's Sidewalk Repair Program will be completed in Summer 2018 and offer suggestions for establishing goals and priorities related to repairs and replacements throughout the City. Operating Impact This project is not anticipated to impact operating expenses. Capital Improvement Fund: Street Maintenance (PE -86070) $7,625,552 $34,241,371 $34,241,371 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. Capital Improvement Fund: Traffic Signa"and Intelligent Transportation Systems (PL -05030) $1,288,219 $4,304,792 $4,304,792 This project provides funding for the design and construction of traffic signals, traffic signal communication networks, video surveillance projects for transportation use, and maintenance of the City's traffic signal central system. The project includes the replacement of traffic signal controllers/cabinets, video detection systems, and other field equipment. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Electric Customer Connections (EL -89028) M $2,400,000 $12,000,000 $12,000,000 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: Facility Relocation for Caltrain Modernization (EL -17007) $2,985,000 $2,985,000 $3,000,000 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 commuter trains from diesel to electric power. Operating Impact MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 66 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost This project is not anticipated to impact operating expenses. Electric Fund: Rebuild Underground District 20 (EL -14002) $1,380,000 $1,380,000 $1,408,631 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: Smart Grid Technology Installation (EL -11014) $1,000,000 $14,296,958 $14,764,559 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 - Charleston/EI Camino Real (EL -12001) $1,385,000 $1,385,000 $3,499,993 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 in FY 2019 and the overhead system will be removed. Operating Impact This project is not anticipated to impact operating expenses. Electric Fund: Wood Pole Replacement (El -19004) $1,500,000 $7,500,000 $7,500,000 This project will fund the annual replacement of deteriorated wood poles. Operating Impact This project is not anticipated to impact operating expenses. Fiber Optics Fund: Fiber Optics System Rebuild (F0-16000)111 $1,200,000 $1,800,000 $1,961,503 This system capacity improvement project rebuilds portions of the "dark" fiber optic network around Palo Alto, which, in turn, is leased to parties providing telecommunication services to citizens and businesses in Palo Alto. The rebuild projects will install new aerial duct or substructures (conduit and boxes) and additional fiber backbone cable to increase capacity for sections of the dark fiber ring that are at or near capacity and allow the Utilities Department to meet customer requests for service. The main rebuild project areas are the Stanford Research Park, Palo Alto Internet Exchange, and Downtown. Operating Impacts This project is not anticipated to impact operating expenses. Gas Fund: Gas ABS/Tenite Replacement Project (GS -18000) $1,500,000 $1,500,000 $1,500,000 This project replaces approximately 160 gas services using Acrylonitrile-butadiene-styrene (ABS) or tenite gas pipes. These gas services are located in various neighborhoods throughout the City. The Distribution Integrity Management Plan (DIMP) has identified ABS/tenite gas pipes as a priority to be replaced. 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) $1,350,000 $29,454,525 $40,556,017 67 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Descriptk Y2019 Budget Five -Year Total CIP Cost Project Cost 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 risk ratings of the Distribution Integrity Management Plan. Operating Impacts These projects are not anticipated to impact operating expenses. Gas Fund: Gas System, Customer Connections (GS -80017) 1 $1,303,315 $6,919,481 $6,919,481 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. Storm Drainage Fund: Corporation Way System Upgrades and Pump Station (SD -21000) $40,000 $3,055,240 $3,055,240 This project provides funding for the design of a new small pump station with 25 cubic feet per second capacity and an upgrade of 700 linear feet of storm drain pipe to 30 -inch High Density Polyethylene. Operating Impacts 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. Storm Drainage Fund: Loma Verde Avenue Trunk Line Improvements (SD -19000) $2,430,913 $2,490,913 $2,490,913 This project provides funding to upgrade 1,750 linear feet of storm drain pipe with 51 -inch High Density Polyethylene and replace associated catch basins, laterals, and manholes. Operating Impacts This project is not anticipated to impact operating expenses. Storm Drainage Fund: Storm Drain System Replacement and Rehabilitation (SD -06101) $1,545,877 $4,157,344 $4,157,344 This project provides funding for annual replacement and rehabilitation projects, identified by a previous condition assessment, to help maintain the integrity of the storm drain system, including the replacement or rehabilitation of deteriorated storm drain pipes, manholes, and storm drain inlets. Operating Impacts This project is not anticipated to impact operating expenses. Technology Fund: Enterprise Resource Planning Upgrade (Reserve) (TE-19000) $1,250,000 $4,950,000 $4,950,000 This project provides funding to replace the existing Enterprise Resource Planning (ERP) system and Customer Information System (CIS) with a best -fit solution to better meet the City's needs. Operating Impact This project is not anticipated to impact operating expenses. Vehicle Replacement Fund: Scheduled Vehicle and Equipment Replacement - Fiscal Years 2017 to 2023 (VR-17000, VR-18000, VR-19000, VR-20000, VR-21000, VR-22000, VR-23000) $7,361,953 $21,992,055 $25,766,016 These projects provide funding for the scheduled replacement of existing City fleet vehicles and equipment. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 68 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost Operating Impacts These projects are not anticipated to impact operating expenses. Wastewater Collection Fund: Wastewater Collection System Rehabilitation/Augmentation Projects 28 to 32 (WC -15001, WC - 16001, WC -17001, WC -19001, and WC -20000) $5,252,449 $23,786,547 $24,036,547 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 These projects are not anticipated to impact operating expenses. Wastewater Treatment Fund: Advanced Water Purification Facility (WQ-19003) $1,030,073 $23,274,552 $23,274,552 This project provides funding for an Advanced Water Purification Facility to further improve the quality of the tertiary - treated recycled water by microfiltration or ultrafiltration followed by reverse osmosis to reduce the level of total dissolved solids (TDS). Operating Impacts 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. Wastewater Treatment Fund: Headworks Facility Replacement (WQ $5,000 $15,774,733 $39,131,175 16002) This project provides funding for replacing influent pumping, including the suction and discharge piping; pipe manifolds; valves; the electrical and controls systems; 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. Wastewater Treatment Fund: New Laboratory and Environmental Services Building (WQ-14002) $962,959 $18,822,656 $19,236,596 This project provides funding for a new building that will consolidate staff and provide a larger and updated laboratory. Operating Impacts 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. Wastewater Treatment Fund: Outfall Line Construction (WQ-19000) $10,000 $7,486,859 $7,486,859 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 Repair, Retrofit, and Equipment Replacement (WQ-19002) $3,910,232 $16,846,120 $16,846,120 69 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost This project provides funding for the assessment, repair, and retrofit of the Plant's concrete and metal structures; the replacement of necessary Plant equipment and ancillary facilities to maintain treatment reliability and existing infrastructure; and the replacement of large diameter flow meters built into the wastewater treatment system on sewers, pipes, and water lines. Tasks and funding previously budgeted in three separate maintenance related projects, WQ-80021, WQ-80022, and WQ-04011, will now be consolidated and budgeted in this one recurring project. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Primary Sedimentation Tank Rehabilitation PQ -14003) $2,336,471 $6,761,100 $7,518,285 This project provides funding for new protective coatings on each of the four concrete primary sedimentation tanks and replacement of worn rotating parts. Installed in 1972, each tank is 220 feet long by 41 feet wide and removes settleable solids and grease. The coating ensures the reinforcing steel bars within the concrete are protected from penetrating corrosive sewer gases and extends the concrete's life another 30 years. Operating Impacts This project is not anticipated to impact operating expenses. Wastewater Treatment Fund: Secondary Treatment Upgrades (WQ- 19001) $1,545,109 $30,636,799 $30,636,799 This project provides funding for upgrades to the Secondary Treatment process at the Regional Water Quality Control Plant. The existing Secondary Treatment process has two main components: the Fixed Film Reactors (FFR) and the Activated Sludge (AS) Process. This project includes the reconstruction of the AS process, rehabilitation of the AS Aeration Basins and the different zones where different pollutants can be treated. One of the zones will then operate without oxygen, treating nitrogen and cutting the nitrogen in the treated wastewater in half. The project will not only reduce organics and ammonia in the existing process but will also reduce total nitrogen, the next pollutant being regulated. Operating Impacts This project is anticipated to impact operating expenses in the future, potentially by lowering utilities usage. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Water Fund: Water Main Replacement - Projects 27 to 31 (WS -13001, WS -14001, WS -15002, WS -16001, and WS -19001) $7,760,107 $34,104,261 $34,146,761 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. Water Fund: Water Meters (WS -80015) $900,000 $3,054,569 $3,054,569 This funding allows for the purchase of meters for new customers, upgrading meters for current customers, installing meter bypasses, and replacing obsolete meters that are no longer repairable. This funding also allows for annual testing and calibration of select meters. Operating Impacts This project is not anticipated to impact operating expenses. Water Fund: Water System Customer Connections (WS -80013) $732,021 $3,886,398 $3,886,398 This project allows for improvements that include new main extensions, valves, domestic services, meters on upgraded services, backflow devices, fire services, and fire hydrants. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 70 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2019 Budget Five -Year Total CIP Cost Project Cost Operating Impacts This project is not anticipated to impact operating expenses. Water Fund: Water Tank Seismic Upgrade and Rehabilitation (ws- 09000) $3,000,000 $7,000,000 $11,890,361 This project will provide tank rehabilitation, seismic upgrades, and/or tank replacement and structural reinforcement for the Corte Madera, Park, Boronda, and Dahl reservoirs in order 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: new seismic shit off valves between the reservoirs and valve vaults, new plug valves, piping and pipe supports in the valve vaults, and recoating of the interior and exterior reservoir walls. Operating Impacts This project is not anticipated to impact operating expenses. 71 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 73 CITY OF PALO ALTO GENERAL FUND OVERVIEW Overview FISCAL YEAR 2019 GENERAL FUND LONG TERM FINANCIAL FORECAST As part of the annual budget process, a ten year long range financial forecast is produced by staff looking at current City financials in the General Fund in both the near and long term horizon. The Long Range Financial Forecast (LRFF) marks the beginning of the FY 2019 annual budget process and discusses projected General Fund financials over the next ten years based on current City Council approved service levels as well as alternative financial models. At the December Finance Committee meeting and subsequently accepted by the City Council in January 2018, the Base Case financial forecast at the time reflected a gap in the General Fund of $2.6 million in FY 2019 and a range between annual gaps of up to $2.4 million and surpluses of $8.8 million in the out years. The Base Case provided a forecast that can provide comparison in evaluating the effects of major policy revisions against a "status quo" version of the future. It assumes that the world continues to change and unfold in line with current expectations. Adopted 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total Revenue Total Expenditures $207,042 $213,229 $221,638 $229,695 $237,623 $245,792 $253,881 $262,065 $269,898 $277,349 $285,652 3.0% 3.9% 3.6% 3.5% 3.4% 3.3% 3.2% 3.0% 22% 3.0% $210,426 $215,780 $223,855 $232,045 $239,609 $246,919 $253,672 $260,223 $266,387 $270,488 $276,842 2.5% 3.7% 3.7% 3.3% 3.1% 2.7% 2.6% 2.4% 1.5% 2.3% Net One -Time Surplus/(Gap) Cumulative Net Operating Margin (One -lime) ($3,384) ($2,551) ($2,217) ($2,350) ($1,986) ($1,127) $209 $1,842 $3,511 $6,861 $8,810 $11,002 Net Operating Margin Cumulative Net Operating Margin Assumes that the annual shortfalls are solved with ongoing solutions and annual surpluses are spent for ongoing expenditures. $2,551) $334 ($133) $363 $859 $1,336 $1,634 $1,668 $3,350 $1,949 $8,810 Staff expects tax revenues to grow into FY 2019 and for the economy to remain strong and assumes gross domestic product (GDP) between mid -2 percent to low 3.0 percent; unemploy- ment remaining around 4.0 percent, which is currently at the lowest level in a decade at 4.1 per- cent; and the CPI (consumer price index; aka inflation) is expected to be in the low 2.0 percent though wage growth is tepid. Tax revenues continue to parallel the local economy and, included in this LRFF, staff projected a $4.5 million or 3.7 percent increase in tax revenues in FY 2019 over those projected for FY 2018 approximately six months through the year. Based on this forecast, guidance to prioritize spending is critical to ensure financial stability. The City is facing a number of future pressures such as the 2014 Council Infrastructure Plan, which is currently projected to have an approximately $75 million gap in funding; the growing costs of pension benefits; and the upcoming labor negotiations for many of the City's largest employee units. Staff communicated that a containment strategy is necessary to maintain a manageable GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 75 GENERAL FUND OVERVIEW financial position and to address known and unknown financial challenges, program needs, or an economic downturn. It is this review and planning that will be critical as the City is facing many requests and has identified several key community supported programs that would need funding. 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/unknown impacts that are not included in the LRFF: ▪ New staffing and program requests; ▪ Labor negotiations; ▪ Cost implications that may arise such as support for the Parks Master Plan, Cubberley 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 FISCAL YEAR 2019 GENERAL FUND BUDGET Subsequent to the release of the Long Range Financial Forecast (LRFF), staff has reviewed all expenses and revenue estimates in the General Fund resulting in a final FY 2019 Base Budget gap of $1.3 million as well as in FY 2020 with revenues of $214.1 million estimated and $215.4 mil- lion in expenses forecasted. This budget addresses this gap on an ongoing basis and proac- tively positions the General Fund in FY 2020 with a further gap forecasted in the years beginning in FY 2021. 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 2019 (additional revenues of $1.1 million): ▪ Increases in charges for services and licenses and permits primarily due to the opening of the golf course and the new Council -approved managed services contract terms (additional revenues of $1.0 million); ▪ Reduction in cost allocation receipts reflecting a refinement of the General Fund cost allocation plan (reduction in revenues of $1.3 million); ▪ Reduction in Salaries and Benefits of $2.1 million primarily due to revised retiree medical actuarial valuations ($1.3 million), which reflects the current employee population as of February 2018 (reduced expenses of $773,000); ▪ Increases in Allocated Charges of $1.3 million to reflect more refined expense estimates as well as address inadvertent omissions in the LRFF. 76 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW This FY 2019 Adopted Budget includes General Fund revenues estimates of $214.5 million, a 3.6 percent increase from FY 2018 Adopted Budget levels of $207.1 million, or a $7.4 million increase. General Fund expenditures of $210.7 million are consistent with the FY 2018 Adopted Budget level of $210.4 million. It should be noted that a $4.0 million expense reduction is cred- ited in the FY 2019 Adopted Budget; further discussion with the Finance Committee will take place in the first half of FY 2019 to discuss how that reduction can be operationalized. At this time, staff projects the FY 2018 Budget Stabilization Reserve (BSR) to end the year at approximately $41.3 million, or 19.0 percent of the FY 2018 Modified Budget expenditure levels. This does not include any excess revenues or expense savings when compared to budgeted lev- els in FY 2018 based on current tracking. It is anticipated that the General Fund will end FY 2018 with some additional balance primarily attributed to major tax revenues and departmental vacancy savings. This budget recommends a one-time contribution to the General Fund BSR of $3.8 million, resulting in a projected balance of $45.1 million, or 21.4 percent of the $210.7 million budget. If the $4.0 million reserve that is pending Finance Committee review of the implications and actions necessary to achieve $4.0 million in structural reductions and expenses were to be excluded from the BSR, but counted as an expense reduction, then $41.1 million, or 19.5 percent of the FY 2019 budget expenses of $210.7 million would remain. If the $4.0 million reduction was excluded completely from the calculation, then $41.1 million, or 19.1 percent of the FY 2019 budget expenses of $214.7 million would remain. This is still above the City Council target level of 18.5 percent. REVENUES Based on a continued, gradual growth of the regional economy and FY 2018 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 FY 2018 Adopted Budget. The FY 2019 bud- get assumes increases to major tax revenue receipts by approximately $5.8 million, or 4.9 per- cent, from $119.3 million to $125.2 million when compared to the FY 2018 Adopted Budget. Growth in major tax revenues reflects over 85 percent of the change from the FY 2018 Adopted Budget for all General Fund revenues. The following sections discuss the City's major revenue sources and their projected levels as well as major expenditure categories for FY 2018 and FY 2019. SALES TAX Sales taxes continue to rise reasonably well from the Great Recession. Sales taxes are projected to rise to $31.2 million in FY 2019, a 3.3 percent growth rate from the current FY 2018 estimates. The growth rate is consistent with the compound annual growth rate of 3.1 percent over the past ten years. Sectors showing growth that is expected to continue into FY 2019 are auto leas- ing and sales, drug stores, recreation products, furniture/appliance, office equipment, and health services. Areas experiencing weak sales include department stores and construction. There are continued 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 brings negative news indicating additional transac- tions have moved on-line. However, increased receipts from county pools continue to offset this loss. Sales taxes that occur in Santa Clara County but cannot be identified to a specific jurisdic- GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 77 GENERAL FUND OVERVIEW tion within the county, are allocated to the county sales tax pool. Then, the pool gets distributed to the local jurisdictions based on their local tax percentage. For example, sales tax on county- wide Amazon sales goes to county pools; Palo Alto's average receipt of pool sales tax has been 6.9 percent. The City's sales tax consultant believes that on-line sales may reduce future retail sales growth by 1.0 percent annually. These trends will be monitored carefully since sales tax represents 15.0 percent of General Fund revenue. Other sales tax concerns being monitored are on-line retailers' expansion to brick and mortar platforms, which will allow them a platform to test products and pricing such as Amazon's purchase of Whole Foods; potential state legisla- tion to change county sales tax pool allocation methodology from local tax percentage to a methodology based on population, which will adversely impact the City; 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 and 7.6 percent increase in FY 2016 and FY 2017. In dollar terms, it has risen from $34.1 million in FY 2015 to $36.6 million in FY 2016, to $39.4 million in FY 2017 and is projected to grow to $42.4 million FY 2018 and to $45.3 million in FY 2019. The increase from FY 2018 to 2019 equals 7.0 percent or $3 million, which is higher than the 10 year com- pound annual growth rate of 6.3 percent. Staff estimates for FY 2019 include excess Education Revenue Augmentation Fund (ERAF) funds at a similar level as the past several years. The following charts are taken from a realtor (JeffandSteve.com) website. 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 continued limited inventory supply is expected to moderate the number of sales and property tax growth. 78 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW February Sales. Prices - Palo Alto February 2004 to February 2018 Median Saie9 Price 1S1,0U4's 'Average Percentage sal List Price Received 3444 2412 2520 2'444 221 2180 127 1390 1439 1450 1657 1528 1617 1595 IND 2004 ?005 2006 2007 2048 2004 2010 2011 Xi 1? 2013 ;9)14 701S ?016 2417 2019 1024 107`4 IO i 105'4 109'% 974 97% 96% 104'i 11 Y 111`. 1144 107% 105% 11 02019 Otn arr.suar Data dram ML3ld+rigs.aoar February Market Activity - Palo Alto F eb ru ary 2004 Co February 7018 `Av oraga Days n Mariust 111 14 17 .16i 17 17 15 13 15 . 2004 2005 2006 2001 7008 2009. 2010 2011 2012 2013 20114 2015 2016 2017 2018 '.36 72 40 38 15 64 64 29 39 19 12 9 21 18 11 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 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 79 GENERAL FUND OVERVIEW 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 February 2018 around 77.5 percent of the rooms available will have been occupied and that the average daily room rate will hover around $265 compared to 77.2 percent and $257 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 to $23.5 mil- lion in FY 2017. TOT for Fiscal Year 2018 is expected to reach $24.4 million. Projections for FY 2019 stand at $25.1 million, 2.6 percent or $0.6 million above the projection for FY 2018. The sharp increase in TOT from FY 2015 to projected FY 2019 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 TOT increase plus revenue from four new hotels has been earmarked for transfer to the General Capital Improvement Fund ($8.4 million), specifically for the City Council Infrastructure Plan. UTILITY USERS TAX The Utility Users Tax (UUT) revenue budget for FY 2019 fully includes the two changes approved by voters in November 2014: the telephone UUT rate reduction from 5.0 percent to 4.8 percent and the elimination of the large utility user discount. Originally, staff expected that telephone revenues would slightly decline. Instead, revenues from this source in the first 7 months of FY 2018 have significantly exceeded those in FY 2017 for the same period while the annual receipts for FY 2017 significantly exceeded the FY 2016 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 2019 are budgeted at $6.2 million. Utility receipts from the UUT are based on the Utilities Department's five-year revenue projec- tions. The electric rate increase is related to several factors: increasing transmission costs and the cost of renewable projects coming online, substantial additional capital investment in the electric distribution system planned through FY 2023, and operations cost increases. The water rate increase is primarily due to increasing water demand and capital projects. The gas rate increase is attributable to increased operations costs from the cross -bore inspection program, increased capital improvement program costs as a result of higher bids on capital projects, and a modest increase in commodity costs around 1.0 percent to 2.0 percent. In addition, sales vol- umes for water and gas have been trending downward over the last several years. Water and gas usage fluctuate drastically in response to environmental factors such as drought or warmer winter seasons. During the drought, water usage decreased and gas usage decreased due to less hot water being used. At the end of the drought restrictions, water usage increased. During 80 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW a relatively warm winter, gas usage drops and during a cooler winter, gas usage increases. Over the last few decades, the gas usage has, in general, been declining and is now at pre -drought levels. However, as with water, it is difficult to determine whether usage will continue on a declining trend or spike in response to environmental changes. Although increased rates should result in higher UUT revenues, potential reductions in usage, both for electric and water; the lat- ter as a response of past drought conditions, could moderate the UUT increase. Also, warm weather conditions can result in less gas usage and UUT revenue as well. For FY 2019 the Gen- eral Fund is expected to realize $9.9 million from utility sales. Combined, telephone and utility use tax revenues for the FY 2019 budget are estimated at $15.9 million, representing growth of 3.7 percent over the revised FY 2018 year-end estimate of $15.3 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, FY 2017 receipts were $7.5 million, and FY 2018 receipts are expected to be $7.4 million. The $7.4 million FY 2018 adjusted budget amount for receipts reflects an increase of $467,400 or 6.7 percent over the adopted budget amount due to revenues running 14.2 per- cent above the same prior year period through mid -March. At this time, it is anticipated that the City will realize approximately $7.4 million in FY 2019. 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. OTHER TAXES AND FINES Staff anticipates a marginal decrease in this category from FY 2018 levels of $2.1 million to $2.0 million, a 1.3 percent decrease. The largest source of revenue in this category is parking viola- tions revenue, which is projected to remain relatively flat from FY 2018 to FY 2019 and decrease only slightly. The anticipated slight decrease is primarily attributed to a lower revenue estimate for Library fines, which were aligned to current performance and represents a small portion of overall fines. 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 2018 Adopted Budget revenue estimate of $26.5 million, the Fiscal Year 2019 Budget estimate increases $1.5 million, or 5.7 percent. A number of revenue adjustments have been made in the category from the FY 2018 Adopted level. Key changes from the FY 2018 Adopted Budget are listed below by department: • Community Services Department: $1.1 million increase, primarily driven by Golf Course estimates ▪ Fire Department: $0.2 million increase, primarily due to anticipated adjustments to the Stanford Fire Agreement • Planning and Community Environment: $0.1 million increase, primarily due to municipal fee changes GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 81 GENERAL FUND OVERVIEW The City continues to negotiate with Stanford to settle on a service level and cost. This budget assumes a Stanford reimbursement at current levels however, the actual contract value is sub- ject to continued conversations with Stanford and a revised contract for fire services. Addi- tional reimbursements from Stanford for public safety dispatch services are also budgeted resulting in a net reimbursement of $7.3 million. Depending on the outcome of negotiations sig- nificant adjustments to the assumed reimbursement level of fire services 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 FY 2018 bud- get revenue estimate of $8.8 million, the FY 2019 budget revenue estimate represents an increase of $112,000, or 1.3 percent, primarily due to an increase in Planning and Community Environment Fees ($62,000) and Police Fees anticipated from false alarms ($35,000). 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 FY 2018 forecast is $1.1 million, and the forecast for FY 2019 is $1.2 million. At its peak, in FY 2002, the General Fund earned $4.4 million in interest income; back then both the City's invest- ment 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 2019 budget of $15.8 million reflects a $231,000 increase from the FY 2018 Adopted Budget, or a 1.5 percent increase. Slight annual rental increases for depart- ments funded by Enterprise Funds renting General Fund properties are based on an assessment conducted in FY 2015 for these properties, adjusted annually for cost of living increases. It is anticipated that another assessment will be conducted during FY 2019 and that the results will be incorporated into the development of the FY 2020 budget. 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 decreased by 8.9%, from $11.1 million in FY 2018 to $10.1 million in FY 2019. This decrease is attributable mainly to refining the methodology used for the cost allocation plan. 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 2018 Adopted Budget of $1.2 million, other revenues are $1.2 million higher, due to a change in how Public, Education, and Government (PEG) revenues from Cable Franchise Fees are treated. They have been designated as 'other revenues' to more appropriately align with the type of revenue. 82 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW OPERATING TRANSFERS -IN In comparison to the FY 2018 Adopted Budget transfers -in amount of $20.8 million, the FY 2019 Budget amount of $19.8 million represents a decrease of $1.0 million primarily due to a change in how PEG revenues are characterized. The largest component of this revenue category is the equity transfer from Enterprise Funds, which was at $19.3 million, a slight decrease from the FY 2018 level of $19.5 million. The equity transfer represents the return on the initial investment the City made when the Utility Department was created more than 100 years ago. In accordance with a methodology approved by the City Council in June 2009, the equity transfer is calcu- lated 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 FY 2019 Budget expenditures total $210.7 million in the General Fund, consistent with the FY 2018 Adopted Budget of $210.4 million. Details of major expenditure categories are discussed below. This modest grow reflects the significant effort to structurally balance this FY 2019 bud- get on an ongoing basis, including $2.3 million in structural reductions and an additional $4.0 million reductions in expenses as directed by the Finance Committee with the implications of that reduction to be discussed in FY 2019. SALARY AND BENEFITS Salary and benefit costs in the General Fund for FY 2019 total $125.4 million, representing a minor decrease of 0.1% from the FY 2018 total of $125.6 million. The primary reason for the decrease in salary and benefit costs are the net reduction of 35.1 positions with 17.6 full-time position reductions and 17.5 part-time benefited position reductions in the General Fund, a favorable update to the City's Retiree Healthcare Actuarial Valuation, and the use of one-time fund balance in the Workers' Compensation Fund to subsidize annual contributions from all funds for Workers' Compensation. The FY 2019 budget maintains the historical methodology for calculating salaries and benefits; this methodology represents the agreed upon labor terms outlined in memorandums of agree- ment and the respective costs of those terms are budgeted directly in department sections. Additionally, it is presumed that departments will realize a certain level of vacancies throughout the year. As part of budget development, a vacancy rate is used to adjust the budget for Salary and Benefits for each department based on historical experience, totaling $2.0 million in the General Fund. In the 'Budget Reconciliation' section of each department a variance between the FY 2017 Actuals and the FY 2018 Adopted Budget columns is expected. This variance reflects the difference between estimated vacancies and staff costs actually incurred. Salaries: Salaries of $74.7 million in FY 2019 are 0.7% higher than the $74.2 million budgeted in the FY 2018 Adopted Budget. Although the year -over -year payroll growth was higher than 0.7%, the growth in this category was slowed significantly by the savings associated with the elimination of 24.1 FTE beyond the 4.0 FTE Apparatus Operators and 7.0 FTE Firefighters that were presumed in the FY 2018 Adopted Operating Budget. This modest growth in salaries is not expected to continue in the near future, since it is tempered primarily by those staffing reduc- tions. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 83 GENERAL FUND OVERVIEW Pension Costs: Pension costs are increasing 5.3 percent in the General Fund in FY 2019, from $23.3 million in FY 2018 to $24.6 million. This increase represents the first year of the CALPERS' phase -in of a 7.0 percent discount rate. The discount rate used for the determination of the FY 2019 contributions was 7.4 percent, down from 7.5 percent in FY 2018. In FY 2019, there will be a 7.9 percent increase in the Miscellaneous pension rate (from 30.2 percent of salary to 32.6 per- cent) and an 11.9 percent increase in the Safety pension rate (from 49.7 percent of salary to 55.6 percent of salary). These increases reflect the more conservative assumptions in the discount rate as well as changes to various actuarial assumptions, including the mortality tables. The City has anticipated these increasing pension costs and actively developed strategies to proactively address this growing liability. The FY 2019 budget assumes that employees will con- tinue to pick up a portion of the employer share of pension contributions, as agreed to in the most recent round of labor negotiations. In addition, this budget includes a recommendation for additional funding of approximately $1.2 million from the General Fund for an additional contri- bution to the City's irrevocable Section 115 Trust Fund (PARS) to prefund future pension obliga- tions. Additional details of the City's pension work to date can be found in the 'Employee Information' section of this document. Retiree Health: The City's Other Post -Employment Benefits (OPEB) costs, primarily Retiree Healthcare, are decreasing 10.4% in the General Fund, from $9.8 million in FY 2018 to $8.8 mil- lion in FY 2019. This represents the latest figure from the City's outside actuarial consultant, Bar- tel Associates. The favorable adjustment is primarily driven by premium caps, changes in mortality assumptions, and increased eligibility for Medicare premium plans, which are much lower in cost. A separate report, CMR 9213 discussing the City's OPEB liabilities was transmitted on May 15, 2018 more fully detailing the changes to the City's liability. Healthcare: Healthcare costs are increasing only marginally, driven primarily by significant sav- ings in dental premiums as a result of lower than anticipated utilization in the prior year. These savings are not expected to continue in future years. Other Benefits: Other benefits costs, including special pays, long-term disability, Medicare, and management excess benefit funding, are increasing 3.8%, from $2.2 million in FY 2018 to $2.3 million in FY 2019. This increase primarily represents increased eligibility for special pays, includ- ing retention pay for Police Officers. Workers' Compensation costs are down 28.1 percent in the General Fund from FY 2018 to FY 2019, from $3.6 million to $2.6 million. This represents a one-time reduction in payments to the Workers' Compensation Fund. The Workers' Compensation fund is an Internal Service Fund; costs are recovered through allocated charges to departments. In FY 2019, the fund has suffi- cient accumulated fund balance to offset some of the expenditures. The one-time reduction in payments into the Workers' Compensation Fund across all funds will partially draw down that accumulated fund balance in FY 2019. 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. Other non -departmental expenses include one-time funding of $100,000 for the Fall 2018 City Council election, as well as funding for costs associated with property tax collection which is administered by the County of Santa Clara. The $4.0 million reduction discussed above is also 84 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW budgeted in non -departmental as a negative adjustment, pending further conversations with the Finance Committee. CONTINGENCY ACCOUNTS Contingency accounts are budgeted appropriations that are used at the discretion of the City Council, City Manager, City Attorney, or Human Resources Director to fund unanticipated expenses. As part of the FY 2018 budget, the City Council contingency was reduced from $250,000 to $225,000 to help close the budgetary gap. This level is maintained in FY 2019. The City Council approves any use of the City Council Contingency, while the City Manager has to approve the use of any other contingency. The FY 2019 budget includes $725,000 in these accounts. OPERATING TRANSFERS -OUT Funds are transferred to the Capital Infrastructure Fund, Cubberley Infrastructure Fund, Debt Service Fund, and Technology Fund on an annual basis. In Fiscal Year 2019, $26.5 million is pro- grammed to be transferred to these funds, a level consistent with Fiscal Year 2018 transfers. In addition, in the FY 2019 budget $170,000 is transferred to the Public Art Fund, $283,000 is transferred to the University Avenue Parking District Fund (for City employee permits in the downtown garages), and $2.7 million is transferred to the Electric Fund. The transfer to the Electric Fund is to reimburse the Electric Fund for electricity costs associated with City street- light and traffic signal costs to align with the most recent Electric Fund Cost of Services Analy- sis (COSA). RESERVES The City's general reserve is referred to as the Budget Stabilization Reserve (BSR). By policy, the City maintains a reserve level of 15.0-20.0 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 15.0 percent. The City Manager is authorized, at their discretion, to transfer any amount in excess of 18.5 percent to the Capital Projects Infrastructure Reserve. The Fiscal Year 2019 Budget is projected to have a $45.1 million BSR balance, or 21.4 percent of the General Fund Budget, including the $4.0 million reduction. General Fund 'Reserves FY 2017 Actuals FY 2018 Adopted Changes Budget Stabilization Reserve (BSR) Activity: BSR FY 2018 Net Adjustments Projected FY 2018 Year -End Projected FY 2019 Adopted Budget Projected FY 2019 Year -End 48,118 (3,385) (3,446) 41,287 3,794 45,081 Other Reserve Activity: • Human Services Resource Allocation Process (HSRAP) Reserve Encumbrance & Reappropriation 7,280 50 7,280 50 7,280 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 85 GENERAL FUND OVERVIEW General Fund Reserves Inventory of Materials & Supplies Notes Receivable, Prepaid Items, Interfund Advances, & Unrealized Gains and Losses FY 2017 Actuals FY 2018 Adopted Chang FY 2018 Net djustments 4,298 3,411 Projected FY 2018 Year -End 4,298 3,411 Projected FY 2019 Adopted Budget Projected FY 2019 Year -End 4,298 3,411 Total Reserves 63,107 (3,385) I (3,446) = 56,326 3,794 60,120 1. The BSR is projected to be 21.4 percent of the FY 2019 Expense Budget at the end of FY 2019. 2. City reserve policy indicates a 15.0-20.0 percent range, with an 18.5 percent target. 3. Minimum FY 2019 BSR $31.6 million (15.0 percent); Maximum FY 2019 BSR $42.1 million (20.0 percent). 4. Target FY 2019 BSR $39.0 million (18.5 percent). 5. Projected FY 2018 BAOs assumes City Council approved budget adjustments through February 2018. 6. This assumes the HSRAP Reserve will not be spent in FY 2018 and is recommended to be carried forward to FY 2019. 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 (GO) bond, and special assessments. On June 6,1978, California voters approved Proposition 13, a seminal change in property tax lev- ies. 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 a 2.0 percent cap thereafter. 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 GO bond sales. This change has to be approved by two-thirds of those voting in a local GO bond election. For 86 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW school districts, however, the voting threshold for approving GO bonds was subsequently low- ered 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 $119 million through FY 2018, limiting its ability to meet its infrastructure needs. The County of Santa Clara administers and collects property taxes and remits the appropriate amounts to local jurisdictions based on law and a complex formula. 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 9.4 percent or 9.4 cents for every property tax dollar a property owner pays to the county. The majority of the tax dollar paid or 56.6 percent goes to the school dis- trict, community college, and county school service, 15.9 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 9.0 percent tax rate paid for goods sold within Palo Alto, the City receives 1.0 percent point of the purchase price or 11.1 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 county -wide 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 Equal- ization. TRANSIENT OCCUPANCY TAX The Transient Occupancy Tax rate in Palo Alto is 14.0 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 12.0 percent to 14.0 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. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 87 GENERAL FUND OVERVIEW 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 5.0 percent and for telephone is 4.8 percent. In November 2014, Palo Alto voters approved decreasing the telephone utility user tax rate from 5.0 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 16.0 percent of the Police Depart- ment's Communication and Dispatch Division. The Stanford contract for Fire Services is cur- rently 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 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 service departments such as Administrative Services, Council Appointees, and Human Resources to Enterprise, Inter- nal Service, and Special Revenue funds through allocated charges. 88 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW OTHER REVENUE Major revenue sources in this category are Animal Services charges to Los Altos and Los Altos Hills, reimbursements from Palo Alto Unified School District (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). 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 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ■ Property Tax ■ Sales Tax • Charges for Services • Rental Income ■ Utility User's Tax ■ Documentary Transfer Tax GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 89 GENERAL FUND OVERVIEW General Fund Revenue by Category Y 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget Sales Taxes 30,018 29,923 31,458 Property Taxes 36,607 39,381 41,927 Transient Occupancy Tax 22,366 23,477 25,143 Documentary Transfer Tax 6,266 7,491 6,930 Utility Users Tax 12,469 14,240 13,867 Other Taxes and Fines 2,238 2,167 2,060 Charges for Services 23,562 21,989 26,497 Permits and Licenses 8,263 7,714 8,837 Return on Investments 1,037 1,209 1,024 Rental Income 15,842 15,767 15,575 From Other Agencies 719 1,156 688 Charges to Other Funds 11,576 10,439 11,076 Other Revenue 4,899 2,300 1,169 Subtotal 175,862 177,253 186,251 Operating Transfers -In 18,317 19,222 20,791 Total 194,179 196,475 207,042 FY 2019 Adopted Budget 31,246 45,332 25,049 7,434 16,092 2,032 28,015 8,949 1,166 15,806 1,150 10,09. 2,361 194,725 19,772 214,497 FY 2019 Change $ (212) 3,405 (94) 504 2,225 (28) 1,518 112 142 231 462 (983) 1,192 8,474 (1,019) 7,455 FY 2019 Change % (0.7%) 8.1% (0.4%) 7.3% 16.0% (1.4%) 5.7% 1.3% 13.9% 1.5% 67.2 (8.9%) 102.0% 4.5% (4.9%) 3.6% 90 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ('t General Fund 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Revenue by Category 3 Year Trend - General Fund Revenues By Category ($000s) III ... , ��� ...Mill.] e`' e5 a+ '� b,4 t zy 4.`' i`' e I35 :. NS' Sa} c i+ �� i �i• `� � 20 acs �'..'2''' �� k; `eh a a�C e y4,4‘6' �� c Ue ,tip \\c` lei �c lea c,-, c�a p4e `}4 �ia� e'a CP 7, s. \cue e, 4' .. ©`�' �- �<a 4c �• e4'._ efit{ S. r ��t Le.c �ac$�5 �., \ Jtcp� Q d` ey o p� C's- �`afiy � O� � k` Crate 0 O • FY 2017 Actuals • FY 2018 Adopted • FY 2019 Adopted $214.5 Million/FY 2019 Budget Operating Transfers -In 9.2% Other Revenue 1.1% Charges to Other Funds 4.7% From Other Agencies 0.5% Rental Income 7.4% Return on Investments 0.5% Permits and Licenses 4.2% Charges for Services 13.1% Other Taxes and Fines 0.9% 7.5% Utility Users Tax 3.5% Documentary Transfer Tax Sales Taxes 14.6% Property Taxes 21.1% Transient Occupancy Tax 11.7% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 91 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 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget 7,497 2,796 1,112 1,001 430 3,592 24,272 10,665 27,553 3,559 7,960 Non -Departmental 6,235 Office of Emergency Services 1,044 Planning and Community 8,880 8,654 Environment 7,379 3,158 1,208 1,049 452 2,890 25,200 11,014 31,530 3,314 8,953 6,400 983 7,983 3,356 1,301 1,374 500 3,682 27,560 12,540 31,774 3,757 9,447 8,435 1,039 8,452 FY 2019 Adopted Budget 7,963 3,263 1,258 1,282 488 4,386 28,915 12,561 31,826 3,634 9,664 3,8251 1,509 8,791 FY 2019 Change $ (20) (93) (43) (92) (12) 704 1,355 21 52 (123) 217 (4,610) 470 339 FY 2019 Change % (0.3%) (2.8%) (3.3%) (6.7%) (2.4%) 0.2% 4.9% 0.2% 0.2% (3.3%) 2.3% (54.7%) 45.2% 4.0% Police 35,666 39,206 42,333 41,951 (382) (0.9%) Public Works 14,326 16,655 17,005 18,492 1,487 8.7% Subtotal 156,588 168,045 180,538 179,808 (730) (0.4%) Transfer to Infrastructure 29,366 22,859 24,981 25,173 192 0.8% 5,095 6,572 4,908 5,725 817 16.6% Total 191,049 197,476 210,427 210,706 279 0.1% 1The $4.0 million reduction in expenses was budgeted in 'Non -Departmental' department in FY 2019. Operating Transfers -Out 92 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Expenditures by Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Salary & Benefits Contract Services Supplies & Material General Expense Debt Service Rents & Leases Facilities & Equipment Allocated Charges Subtotal Transfer to Infrastructure Operating Transfers -Out Total 106,185 115,608 125,623 125,452 17,803 19,436 18,984 22,041 3,771 3,723 3,544 3,563 9,568 9,971 11,933 6,1251 431 432 432 613 1,537 1,345 1,567 1,690 537 685 517 522 16,756 16,845 17,937 19,850 156,588 168,045 180,537 179,808 29,366 22,859 24,981 25,173 5,095 6,572 4,908 5,725 191,049 197,476 210,426 210,706 1The $4.0 million reduction in expenses was budgeted in the General Expense category in FY 2019. (171) 3,057 19 (5,808) 181 123 5 1,913 (792) 192 817 280 (0.1%) 16.1% 0.5% (48.7%) 41.9% 7.8% 1.0% 10.7% (0.4%) 0.8% 16.6% 0.1 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 93 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 11 III III III nl ■.■ �e• �y `• c ec\,a\ e0ye et \`e e., c7 "e.2. 0 t eN. y k. i" `K... y�\?c ,` J ao 0e 5e �a F+� �`' �`Q _.,,,,b. cam �t0 het at�� �`a�� �eia\ Oe� e��� �a ��ea ` \��a5 a�5 a� o� Q�e 0e \e .o a s9 . % 5 L --, aG`� Q SNs" e�a�S ,`tam pQ • FY 2017 Actuals ■ FY 2018 Adopted • FY 2019 Adopted $210.7 Million/FY 2019 Budget Transfers 14.7% Allocated Charges 9.4% Facilities & Equipment 0.2% Rents & Leases 0.8% Debt Service 0.3% General Expense 2.9% Supplies & Material 1.7% Contract Services 10.5% Salary & Benefits 59.5% 94 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 95 CITY OF PALO ALTO ENTERPRISE FUNDS OVERVIEW Overview The City of Palo Alto's Utility and Public Works operations are comprised of the Airport, Elec- tric, 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 FY 2019 is $355.1 million, which is $12.4 million, or 3.4 percent, lower than FY 2018. This overall decrease is largely due to a $34.1 million reduction in revenue in the Wastewater Treatment Fund from other agencies, partially offset by both higher estimated net sales revenue and operating transfers in revenues for capital projects. Utility services with rate increases for FY 2019 include Electric, Fiber Optics, Gas, Storm Drainage, Wastewater Collection, and Water. Details on these changes are discussed below. Wastewater Collection rates are scheduled to increase the most at 11.0 percent. This increase in Wastewater Collection rates is largely due to costs associated with a major capital improvement project to upgrade the Wastewater Treatment Plant and is anticipated to result in approximately $1.7 million in additional revenue. Refuse rates will remain the same for FY 2019. EXPENDITURES The total budgeted expenditure of the Enterprise Funds for FY 2019 is $392.4 million, which is $5.7 million, or 1.4 percent, lower than FY 2018. Lower Capital Improvement Program (CIP) costs of approximately $5.8 million when compared to FY 2018 are the primary driver for this year over year reduction. This decrease is partially offset by increases in other expenses includ- ing: approximately $2.0 million in contract services associated with the cross -bore inspection program and electric overhead maintenance, $0.3 million in rents and leases, and $0.1 million in salaries and benefits. UTILITY RATE CHANGES FY 2019 Budget includes utility rate adjustments for Electric, Fiber Optics, Gas, Storm Drainage, Wastewater Collection, and Water charges. The median monthly residential utility bill is expected to increase by 3.9 percent or $11.02 from $282.48 to $293.50. In general, the size and timing of rate adjustments take into account current and future revenue requirements and reserve levels. They may also smooth the impacts on customer bills by spreading rate adjustments during consecutive or alternate years. Electric Fund - Scheduled rate increase is up to 6.0 percent overall to fund rising transmission costs, new renewable projects coming online, and substantial capital investment and replacement in the electric distribution system. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 97 ENTERPRISE FUNDS OVERVIEW ▪ Gas Fund - Scheduled rate increase is 4.0 percent due to increasing construction costs for gas main replacements. ▪ Water Fund - Scheduled rate increase is up to 3.0 percent due to rising capital costs for water main replacements and seismic improvements for reservoirs. ▪ Wastewater Collection Fund - Scheduled rate increase is 11.0 percent due to significant increase in wastewater collection system capital project costs, as well as increase in operating and treatment costs. ▪ Fiber Optics Fund - Scheduled rate increase is 2.9 percent, based on Consumer Price Index (CPI) for All Urban Consumers in the San Francisco Bay Area, for customers on the EDF-1 rate. ▪ Storm Drainage Fund - Scheduled rate increase of 2.9 percent, or $0.40 per Equivalent Residential Unit (ERU) per month based on CPI for All Urban Consumers in the San Francisco Bay Area. • Refuse Fund - No rate adjustment is scheduled for FY 2019. 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 2019 will increase by approximately $0.3 million compared to FY 2018. EQUITY TRANSFERS In FY 2009, the City Council changed the methodology, beginning in FY 2010, used to calculate the equity transfer from Utilities Funds to the 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 2019, the equity transfers from the Electric and Gas Funds are projected to decrease by approxi-mately $0.2 million from $19.5 million to $19.3 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 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 Fund. To highlight this differ-ence between the use of operating reserves versus the capital reappropriations, their impact on fund reserves are reflected in the Capital Improvement Program Reserve line of the Enterprise Funds Reserve table. Based on the actions included in this budget, the total Enterprise Fund Reserve Balances are estimated to decrease by $37.3 million from FY 2018 to FY 2019. 98 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW 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 2019. Rate increases will ensure CPAU has the ability to replenish depleted reserves and provide sufficient funding for continued increasing expenses in commodity costs and repair and replacement of the City's aging utility infrastructure through various capital proj- ects. Electric FY 2019 electric rates are scheduled to increase by 6.0 percent overall to recover costs for increasing transmission costs, new renewable projects coming online, and substantial additional capital investment in the electric distribution system. Electricity purchase costs have increased substantially since FY 2013 as new renewable projects have come online to fulfill the City's envi- ronmental goals and as transmission costs have increased due to improvements being made to the California grid. Projected capital expenses for FY 2019 through FY 2023 are higher in FY 2019 through FY 2021 due to relocation of overhead lines for Caltrain, completion of 4kV to 12kV conversion projects, as well as anticipated Advanced Metering Infrastructure (AMI) and smart grid implementation. Once these larger, one-time project cost increases are completed, annual Capital Improvement Program (CIP) projects are anticipated to decline back to levels seen in recent years. The forecast also assumes that smart grid costs are funded from the Elec- tric Special Projects Reserves. Gas FY 2019 gas rates are scheduled to increase by 4.0 percent due to increasing capital and opera- tion costs. Gas Utility expenses are projected to increase by roughly 6.0 to 7.0 percent annually from FY 2020 to FY 2022 and 1.0 to 4.0 percent annually from FY 2023 through FY 2028. In the short term, some increases in operations costs are related to the cross -bore inspection pro- gram, but CIP costs have increased substantially as the economy has improved. Future CIP proj- ect costs have been revised upwards from prior forecasts to reflect higher bids on gas CIP projects. Commodity costs are the most volatile component of the Gas Utility's expenses, but market prices have been steady and current forecasts project increases of around 1.0 to 2.0 per- cent annually. Water FY 2019 water rates are scheduled to increase by 3.0 percent due to rising water supply costs and increasing capitals costs. The main driver for the increase over the next several years is the escalating cost of wholesale water and rising construction costs for water main replacements, as well as large one-time capital costs in FY 2019, FY 2020, and FY 2021 related to reservoir rehabilitation and additional costs required to switch water meters to be read automatically with AMI. Wastewater Collection FY 2019 wastewater collection rates are scheduled to increase by 11.0 percent. Capital and oper- ating costs are anticipated to increase for the wastewater collection system. In addition, CPAU ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 99 ENTERPRISE FUNDS OVERVIEW anticipates treatment costs to rise over the forecast period due to increasing operating costs and capital replacement needs at the Regional Water Quality Control Plant. As a result, projected rate increases range from 9.0 to 11.0 percent annually through FY 2022 and 3.0 to 4.0 percent annually for FY 2023 and beyond. Fiber Optics Fiber optics rates are scheduled to increase by 2.9 percent for customers on the EDF-1 rate schedule in FY 2019. CPAU provides commercial dark fiber optic services within the boundaries of the City. In September 2006, the City 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 connec- tion 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-1 rate, some customers may voluntarily choose to move from the EDF-1 rate to the EDF-3 rate for cost saving purposes. PUBLIC WORKS ENTERPRISE FUNDS Refuse FY 2019 refuse rates remain unchanged. FY 2020 and 2021 rates are projected to increase at a rate based on CPI, which is the end date for all three Refuse Fund related agreements for waste collection, processing, and disposal (over $20 million in annual agreements). In addition, a new Zero Waste Plan Update will be finalized and include initiatives that will help the City continue making progress on its Zero Waste goals to divert 90.0 percent or more waste from landfills by 2021 and 95.0 percent by 2030. Storm Drainage FY 2019 Stormwater Management fee is scheduled to increase by 2.9 percent. The Stormwater Management fee was approved by property owners through a ballot measure in April 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 Drainage 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 flooding emergency response ser- vices with the goals of reducing stormwater runoff and maintaining stormwater quality protec- tion for discharge to creeks and the San Francisco Bay. Wastewater Treatment The City's Regional Water Quality Control Plant 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 2019 revenues in the Wastewater Treatment Fund are expected to decrease by $27.5 million or 43.7% compared to FY 2018. The majority of this decrease resulted from changes to funding sources programmed for FY 2019 - FY 2023 capital improvement expenditures. The Dewatering and Loadout Facility is on track for completion by Winter 2019 100 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW and will result in the retirement of the incinerator around the same time. The net result of this change will increase operating expenses for utilities and contract services. Airport The City assumed airport operations from Santa Clara County in August 2014 for the Palo Alto Airport, which ranks among the busiest general aviation airports in the country. Under previous terms, the County exercised the right to sublease to Fixed Base Operators (FBOs) with agree- ments that expired in April 2017 and the City worked on signing new lease agreements. As a result of new lease agreements signed, Airport Fund revenues from rentals are projected to increase by approximately $38,000 in FY 2019. The Airport's fees and charges are scheduled to increase by 2.9 percent. Expenses are also projected to increase due to major construction proj- ects that incur costs which are 90.0 percent offset by Federal Aviation Grants. To ensure suffi- cient funding for operating costs and continued services with minimal service delivery impact, the Airport Fund has received loans from the General Fund, totaling $3.1 million as of FY 2019 since the City took over operations. It should be noted that no additional funding is anticipated to be loaned to the Airport Fund in FY 2019. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 101 ENTERPRISE FUNDS OVERVIEW Enterprise Funds Summary Fund Summary ($000) Electric Fund Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Rental Income Return on 267 130 2 366 4,952 Revenues Refuse Fund 230 20 10 294 98 81 577 143,040 36,161 42,358 3,664 - 539 8,660 1,092 931 34 Waste- water Treatment Fund 213 53 30,110 28,370 2,546 5,838 4 Waste- water Collection Fund 10 31 118 Airport Fund Fiber Optics Fund Total 422 - 770 9,500 - 10,076 19,836 7,128 648 4,990 312,640 - 4,203 1,070 975 200 21,312 3 - - 7 - 755 - 755 Investments Total 2,508 526 775 158,396 37,897 45,272 179 199 33,081 34,464 21,213 7,379 11,879 5,556 355,137 Expenses Allocated Charges 8,799 4,329 4,517 1,841 6,122 2,540 1,173 526 576 30,424 Contract Services 7,744 2,463 819 6,206 3,008 249 908 259 455 22,110 Debt Service 8,722 803 3,223 196 1,469 129 949 15,491 Equity Transfer 12,709 6,563 - 19,272 Facilities & 64 19 17 3 8 13 8 - 2 133 Equipment General Expense 3,457 769 667 112 451 125 146 40 14 5,782 Operating 128 641 486 43 105 294 22 6 114 1,837 Transfers -Out Rents & Leases 5,893 760 3,003 2,213 - 420 49 12 79 12,428 Salary & Benefits 15,253 6,482 7,022 2,709 12,430 2,817 1,959 712 1,267 50,650 Supplies & Material 924 489 611 143 2,091 381 95 56 9 4,798 Transfer to 27 - 27 Infrastructure Utility Purchase 89,712 14,672 22,620 16,253 - 10,276 - - - 153,533 Capital Improvement 21,400 5,567 16,044 9,825 6,631 4,056 10,768 1,650 75,942 Program Total 174,805 43,556 59,028 29,745 35,508 23,875 9,364 12,381 4,165 392,427 102 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS REVENUES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Electric Fund Gas Fund Water Fund Refuse WW WW Storm Airport Fiber Optics Fund Treatment Collection Drainage Fund Fund Fund Fund Fund FY 2017 Actuals FY 2018 Adopted FY 2019 Adopted FY 2019 ADOPTED/$355.1 MILLION Electric Fund $158.4/44.6% Fiber Optics Fund $5.6/1.6% Airport Fund $11.9/3.3% Storm Drainage Fund $7.4/2.1% WW Collection Fund $21.2/6% Gas Fund $37.9/10.7% Water Fund $45.3/12.7% Refuse Fund $33.1/9.3% WW Treatment Fund $34.5/9.7% ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 103 ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS EXPENSES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 i ' IthInko END Electric Gas Fund Water Refuse WW WW Storm Airport Fiber Fund Treatment Collection Drainage Fund Optics Fund Fund Fund Fund Fund Fund FY 2017 Actuals FY 2018 Adopted FY 2019 Adopted Electric Fund $174.8/44.5% Fiber Optics Fund $4.2/1.1% Airport Fund $12.4/3.2% Storm Drainage Fund $9.4/2.4% FY 2019 ADOPTED/$392.4 MILLION WW Collection Fund $23.9/6.1% Gas Fund $43.6/11.1% .Water Fund $59.0/15.0% Refuse Fund $29.7/7.6% WW Treatment Fund $35.5/9.0% 104 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 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 Gas Fund Rate Stabilization Operations Capital Improvement Projects GASB 68 Pension Reserve Subtotal Wastewater Collection Fund Rate Stabilization Operations Capital Improvement Projects GASB 68 Pension Reserve Subtotal Water Fund Rate Stabilization Operations Capital Improvement Projects GASB 68 Pension Reserve Subtotal FY 2018 Projected Ending Balance FY 2019 Changes FY 2019 Projected Ending Balance FY 2019 Reserve Guideline Range 24,825 10,400 45,838 739 730 13,488 (27,659) (14,020) (2,389) 10,805 27,887 - 50,070 10,400 45,838 739 730 11,099 (27, 659) 68,361 (16,409) 51,952 4,810 - 15,463 (4,604) 6,719 (1,055) (12,505) - 14,487 4,810 10,859 5,664 (12,505) (5,659) 8,828 5,533 - 11,067 342 - 4,468 (365) 3,150 (2,297) (7,019) - 342 4,103 853 (7,019) 941 (2,662) (1,721) 4,069 13,918 11,447 (11,736) (4,646) (9,111) 17,698 4,069 9,272 2,336 (11,736) (13,757) 3,941 2,775 - 6,939 7,197 - 14,498 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 105 ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Refuse Fund Rate Stabilization Landfill Corrective Action Reserve Capital Improvement Projects GASB 68 Pension Reserve Subtotal Storm Drainage Fund Rate Stabilization Capital Improvement Projects GASB 68 Pension Reserve Subtotal Wastewater Treatment Fund Emergency Plant Replacement Rate Stabilization Capital Improvement Projects GASB 68 Pension Reserve Subtotal FY 2018 Projected Ending Balance 12,485 741 (4,905) 8,321 1,159 2,624 (2,955) FY 2019 Changes 3,336 FY 2019 Projected Ending Balance FY 2019 Reserve Guideline Range 15,821 4,900 - 9,800 741 (4,905) 3,336 11,657 1,626 (3,612) 2,785 (988) (2,955) 828 (1,986)) (1,158) 1,980 14,266 2,863 18,209 (17,383) 17,072 Fiber Optics Fund Emergency Plant Replacement Rate Stabilization Capital Improvement Projects GASB 68 Pension Reserve Subtotal 1,000 24,922 1,659 (1,701) 25,880 (3,907) 1,980 1,936 (max.) 17,129 3,945 - 7,869 14,302 (17,383) (1,044) 16,028 2,665 1,000 1,000 (min.) 27,587 (1,275) 384 (1,701) 1,390 27,270 687 - 1,374 106 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Airport Fund Fund Reserves Capital Improvement Projects GASB 68 Pension Reserve Subtotal FY 2018 Projected Ending Balance FY 2019 Changes FY 2019 Projected Ending Balance (2,015) 4,505 (394) 554 (1,055) (1,461) 3,450 (394) 2,096 (501) 1,595 FY 2019 Reserve Guideline Range TOTAL RESERVES 155,684 (37,292) Summary of Reserves Emergency Plant Replacement Hydro Stabilization Rate Stabilization Operations Capital Improvement Projects Electric Special Projects Public Benefit Underground Loan Landfill Corrective Action Reserve Fund Reserves GASB 68 Pension Reserve 2,980 10,400 62,053 58,674 61,801 45,838 739 730 741 (2,015) (86, 257) 10,490 (23,635) (24,701) 554 2,980 10,400 72,543 35,039 37,100 45,838 739 730 741 (1,461) (86,257) (37,29 Landfill Postclosure Care Liability TOTAL RESERVES AND FULLY - FUNDED LIABILITY 6,825 162,509 6,825 (37,292) 125,217 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 107 ENTERPRISE FUNDS OVERVIEW Residential Monthly Utility Cost Information Adjusted FY 2018 Bill FY 2019 Bill $ Difference % Difference Electric Water Gas Wastewater Refuse Storm Drain User Tax 51.81 84.27 39.09 34.83 50.07 13.65 8.76 54.33 86.59 40.72 38.66 50.07 14.05 9.08 2.52 2.32 1.63 3.83 0.00 0.40 0.32 4.9% 2.8% 4.2% 11.0% 0.0% 2.9% 3.7% Total Monthly Bill 282.48 293.50 11.02 3.9% *Adopted FY 2019 Rates are effective July 1, 2018. 108 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Service Funds wpopftir Joizi: Lucas GREER Cilj' of Palo Alto PARK, • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 109 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 strategy in Fiscal Year 2019 the allocated charges to other City departments and funds were reduced for both the Workers' Compensation and General Liability funds. Over the past few years, fund balance has accumulated in each of these funds. Since the revenue source for these funds is other funds and departments, the charges were able to be reduced. This one- time draw on accumulated fund balance is not sustainable, and is only recommended on a one- time basis. These reductions are 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 2019 and will be allocated out to departments and funds in proportion to their share. In addition, the FY 2019 budget continues past practice of contributing to the City's irrevocable IRS Section 115 Pension Trust Fund. 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 General Liability Insurance Program. In Fiscal Year 2019, costs are projected to increase compared to the Fiscal Year 2018 Adopted Budget. This increase is based on an actuarial analysis of the City's liability costs over the past few years and provides an 85% confidence level in the funding levels of the fund. This will ensure that the General Liabil- ities Insurance Program fund has the necessary resources 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 PROPOSED BUDGET 111 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 the Fund is included in the 'Employee Information' section of this document, and a City Manager Report discussing the June 30, 2017 valuation prepared by the outside actuarial consultant was transmitted separately for discus- sion. 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 2019. 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 2019, $8.3 million is allocated for vehicles and equip- ment that are due for replacement. Of the $8.3 million, $4.4 million is for the continuation of projects approved by City Council in prior fiscal years. The 2019-2023 Capital Improvement Pro- gram (CIP) reflects funding totaling $23.4 million over the next five years for vehicle replace- ments. The current reserve balance in the Vehicle Replacement and Maintenance Fund reflects funding allocated from 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 2019, costs are projected to increase slightly compared to the Fiscal Year 2018 Adopted Budget based on an actuarial 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 Workers' Compensation Fund has the necessary resources 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. 112 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Summary Fund Summary ($000) Revenues Charges to Other Funds Operating Transfers -In Other Revenue Return on Investments Total Expenses Vehicle Replacement and Maintenance Fund Printing and Mailing Services 9,014 14,571 1,566 1,366 - 155 33 - 178 441 9,347 16,410 1,567 General Benefits Fund Workers' Compensation Program Fund General Liabilities Insurance Program Fund 1,977 1,992 5 61,362 3,764 41 16 16 23 63,369 3,780 2,046 Retiree Health Benefit Fund Total 27,128 2,197 5,559 13,800 79,154 59 734 16,056 112,576 Allocated Charges 1,353 1,440 277 Contract Services 507 5,647 115 221 7 72 Facilities & Equipment - 870 - - - - General Expense 71 500 287 - 650 2,913 - Operating Transfers 140 100 2 2,197 2 Out 3,070 6,568 870 4,421 2,440 Rents & Leases 195 374 508 1,077 Salary & Benefits 2,246 7,907 214 61,684 5,444 16,059 93,554 Supplies & Material 1,339 85 80 - - - - 1,504 Transfer to 540 - 540 Infrastructure Capital Improvement 7,702 2,694 - - - 10,396 Program Total 14,091 19,618 1,482 64,102 6,103 2,985 16,059 124,439 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 113 INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Reserves Changes to Unrestricted Assets June 30, 2018 Projected Unrestricted Assets FY 2019 Adopted Changes June 30, 2019 Projected Unrestricted Assets Vehicle Replace ment and Mainten ance Fund Technol ogy Fund Printing and Mailing Services General Benefits Fund Workers' Compen cation Program Fund Liability Insuranc e Fund Retiree Health Benefit Fund Total Internal Service Funds 6,441 18,343 0 1,596 2,815 1,400 3,262 33,857 (4,744) (3,208) 85 (732) (2,323) (938) (2) (11,862) 1,697 15,135 85 864 492 462 3,260 21,995 114 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 115 CITY OF PALO ALTO SPECIAL REVENUE FUNDS OVERVIEW Overview Special Revenue Funds have revenues with 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) hous- ing program; transportation mitigation fees paid by developers; parking in -lieu fees from com- mercial 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. The program seeks to increase the pub- lic's daily exposure to art through the commissioning and acquisition of a diverse range of artworks integrated into the City's urban environment. The Public Art Program strives to build the City's reputation 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. Construction projects in excess of 10,000 square feet that require Architectural Review and have an estimated construc- tion value of more than $200,000 have the option of commissioning artwork on the develop- ment site equal to the cost of 1 percent of the estimated construction valuation or paying the 1 percent to the Public Art Fund. In Fiscal Year 2019, the projected revenue for the Public Art Fund is $0.2 million and includes a transfer of $170,000 from the General Fund to ensure the fund remains financially stable. 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 2019 - 2023 Capital Improvement Plan for further detail). COMMUNITY DEVELOPMENT FUNDS Revenue in this category comes from Development Impact Fees for community centers, librar- ies, parks, public facilities, and transportation. The Development Impact fees collected from new developments provide funding for the City's infrastructure related to community centers, librar- ies, parks, public safety facility, general government facilities, and the Charleston-Arastradero Corridor. The projected revenue within the Development Impact Fee Funds is $0.9 million for Fiscal Year 2019, primarily reflecting anticipated receipts in the Park Impact and Parkland Dedi- cation Funds. The Fiscal Year 2019 - 2023 Capital Improvement Plan includes a transfer of $2.4 million in Fiscal Year 2019 from Park Impact Fees for the remaining improvements to Byxbee Park and a $450,000 transfer from Park Dedication Impact fees for park restroom installations ($350,000) and the Baylands Athletic Center 10.5 acre expansion plan ($100,000). Additionally, the Capital Improvement Plan includes a transfer of $1.0 million in Fiscal Year 2019 from Corn - SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 117 SPECIAL REVENUE FUNDS OVERVIEW munity Center Impact Fees for renovations to the Junior Museum and Zoo (JMZ) and a $507,000 transfer from Transportation Impact Fees for upgrades to traffic signal and intelligent transportation systems. These funds have been reserved for this activity. Annually, the Administrative Services Department issues a report of the activities in these funds including the remaining balances within them. The FY 2017 annual report ending June 30, 2017, is included in City Council Staff Report #8753 found here: https://www.cityofpaloalto.org/civi- cax/filebank/documents/62814. STREET IMPROVEMENT FUNDS (SIF) Revenue in this category comes from the state gas tax including estimated receipts from the recently approved S.B. 1 transportation funds and from federal and state grants earmarked for street improvements. These funds are used for transportation and traffic -related capital proj- ects. Based on preliminary estimates from the State Department of Finance, the projected reve- nues are estimated to be $2.9 million for Fiscal Year 2019. This level of receipts is $1.5 million higher than the Fiscal Year 2018 level of $1.4 million as result of adjustments to Highway Users Tax Account (HUTA) allocations and the new S.B. 1 transportation funding bill, effective July, 1, 2017. The first full year of S.B.1 funding will occur in Fiscal Year 2019 and is anticipated to allo- cate a total of $1.1 million in revenue from the Road Maintenance and Rehabilitation Account (RMRA) and $80,000 from State General Fund loan repayments. In Fiscal Year 2019, $2.5 million is programmed to be transferred to the Capital Improvement Fund for several citywide transportation projects that include projects for street maintenance and safe routes to school. This level is maintained through the Fiscal Year 2019 - 2023 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 addition, the total receipt of $1.1 million in S.B. 1 funding is programmed to be transferred to the Capital Improvement Fund for the Charleston/ Astradero project, which will reconfigure the corridor to enhance pedestrian and bicycle safety and reduce motor vehicle congestion. In April 2018 the City Council approved this use of the Fiscal Year 2019 S.B. 1 funds. FEDERAL AND STATE REVENUE FUNDS The Federal and State Revenue Funds consist primarily of Community Development Block Grant (CDBG) funds. CDBG funds are grants from the U.S. Department of Housing and Urban Development (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. The Fiscal Year 2019 Adopted Budget reflects preliminary Staff estimates totaling $578,000 as approved by the Finance Committee on April 3, 2018. As of the printing of this report, Staff received confirmation of a $670,000 allocation and brought forth the Fiscal Year 2019 Action Plan for City Council approval on May 7, 2018. The finalized application to HUD was due in mid - May. Therefore, adjustments to the budget were not included in the transmittal of the Fiscal Year 2019 Adopted Budget. Further actions will be brought forth separately to align to the bud- get to the final allocation funding levels in Fiscal Year 2019. 118 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW The Fiscal Year 2019 draft action plan is included in Council Staff Report #9027 and can be found here: https://www.cityofpaloalto.org/civicax/filebank/documents/64797. 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 2019, $2.7 million in in -lieu fees are anticipated. These estimates remain constant from Fiscal Year 2018 and are based on historical tracking and Planning and Community Envi- ronment (PCE) staff projections. Annually, the Administrative Services Department issues a report of the activities in these funds including the remaining balances within them. The FY 2017 annual report ending June 30, 2017, is included in City Council Staff Report #8753 found here: https://www.cityofpaloalto.org/civi- cax/filebank/documents/62814. As of June, 30, 2017, approximately $12.5 million remained avail- able in these funds. 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. This grouping does not include any Assessment District Funds. Revenue in these funds, generated from parking permits, is used for maintenance, repair, and beautification of parking facilities and public areas within the University and California Avenue business districts and Residential Parking Permit (RPP) program costs. As of Fiscal Year 2019, five neighborhoods are active in the RPP program to mitigate parking congestion in Palo Alto neighborhoods: Col- lege Terrace, Downtown, Evergreen Park/Mayfield, Crescent Park, and SouthGate. In Fiscal Year 2019, it is anticipated that Parking Funds will be able to meet near -team cash flow needs. Therefore, increases to current permits throughout the City are recommended to increase at the 2.6% annual escalator rate to maintain cost recovery for general increases in annual costs. This would increase annual permits in the Downtown core from $730 to $750 per year, and the California Avenue Business District from $365 to $375 per year. A complete list of fees and fee changes can be found in the Fiscal Year 2019 Municipal Fee Schedule. This Fiscal Year 2019 Adopted Budget includes the following significant expense proposals. In consideration of vacancies in current key positions, the Fiscal Year 2019 budget reflects a main- tenance of current efforts while the City works to evaluate resources and programs. Most criti- cal in the upcoming year is the investment in a parking permit system to scale current programs to manageable levels. • Reallocations to align staffing with the volume of work necessary for administering various parking programs. A net increase of 0.95 positions are recommended within these funds, reflecting a shift of staff resources from the implementation of Traffic and Transportation capital projects to the operational management of these programs ($166,000); ▪ Add 0.48 part-time Administrative Specialist II to provide customer support services during the implementation and transition to the new parking management software system (6-12 months, $19,000 one-time); SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 119 SPECIAL REVENUE FUNDS OVERVIEW • Increase expense allocation to contract services to assist in administering parking programs despite vacancies in staffing ($300,000); • Maintain funding to the Transportation Management Association (TMA) to support the reduction of single occupancy vehicle rates (SOV) in Palo Alto ($480,000); • Provide temporary valet parking services during the construction of new garages at University and California Avenues ($150,000); • Increase contract service funding for janitorial services to University Avenue lots and garages in accordance with the recent agreement approved by City Council on August 14, 2017 ($148,000); • Increase contract services funding for the collection and synthesis of parking occupancy data ($127,000); and ▪ Capital improvement investments in FY 2019 through a net transfer of $2.7 million to the General Capital Improvement Fund. Major projects funded in FY 2019 include: Downtown Automated Parking Guidance Systems (APGS), Access Controls, and Revenue Collections Equipment ($1.1 million); Parking Management and System Implementation ($1.0 million); High Street Parking Garage Waterproofing Study ($300,000), Parking Lot J Elevator Modernization ($50,000); and Downtown Parking Wayfinding ($280,000). Additional project details can be found in the FY 2019 - 2023 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 has worked to develop potential strategies for the organization and scaling of a comprehensive parking strategy. The anticipated reorganization and scaling of parking activities necessary to implement and maintain a comprehensive parking strategy, including a paid parking program, may require up -front financial and staff resource investments resulting in forecasts that show a net gap between anticipated revenues and expenses in future periods. However, it is important to note that these forecasts assume that paid parking fees are assessed for on -street and sur- face lot parking in the Downtown area. The ability of the funds to meet future cash flow needs will be significantly impacted by existing projects in the pipeline and the design and complexity of the elements of the comprehensive parking strategy, including permit pricing. In the upcoming year staff will actively engage the City Council, Committees, and the community to develop a comprehensive parking road map. In order to strategically manage existing projects and programs in the pipeline and to enact a comprehensive parking strategy, a pause on new projects and initiatives is recommended in the upcoming fiscal year to allow staff to fill critical vacancies and assess the various programs. Parking initiatives and investments not appropriated in this Fiscal Year 2019 Budget but antici- pated on the horizon, including the projected start date and estimated costs, are detailed below: ▪ Parking Garage LED lighting upgrades (FY 2019 - 2020, $600,000 to $1.0 million); . Centralize parking operations within the City of Palo Alto (ongoing, to be determined); and 120 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW On -Street and Surface Lot Paid Parking Program (FY 2019 Downtown only, $1.5 million to $2.2 million); 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 and brought before City Council for deci- sions as appropriate. 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 2019, $0.5 million in traffic mitigation and parking in -lieu fees are anticipated. These estimates remain steady with FY 2018 revenues and are based on historical tracking and PCE staff projections. The Fiscal Year 2019 - 2023 Capital Improvement Plan includes a transfer of $6.9 million in Fiscal Year 2019 for the new public parking garage in the University Avenue com- mercial area, street maintenance ($900,000), and traffic signals ($500,000). 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 2017-2018 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 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 2019. 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. In Fiscal Year 2018, the City received the final payment of $11.8 million, for a total amount of $44.3 million over the course of the development agreement. The funds received per the development agreement are allocated for specific pur- poses, 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. Annually PCE issues a report of activities during the prior period for City Council review to ensure compliance with the agreement. The annual report for the 2016-2017 period is included SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 121 SPECIAL REVENUE FUNDS OVERVIEW in City Council Staff Report #8999 found here: https://www.cityofpaloalto.org/civicax/filebank/ documents/65285. Community Health and Safety: Funds are to be distributed to selected community health pro- grams that benefit residents of the City. The projected FY 2019 beginning balance in this cate- gory is $2.7 million. The Fiscal Year 2019 - 2023 Capital Improvement Plan includes a transfer of $11,200 in Fiscal Year 2019 to pilot traffic signal preemption for emergency vehicles. 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. The pro- jected FY 2019 beginning balance for this category is $2.8 million. Intermodal Transit: Funds are to enhance the pedestrian and bicycle connection from the Transit Center to the El Camino/Quarry Road intersection. The projected FY 2019 beginning balance in this category is $1.2 million. There are no planned transfers in Fiscal Year 2019 to the Fiscal Year 2019 - 2023 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. Begin- ning FY 2019 there is no longer fund balance in this category. Remaining funding for Quarry Road Improvements and Transit Center Access will be expended from the Intermodal Transit Fund in future periods, 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. 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 FY 2019 beginning balance in this category is $10.4 million. The Fiscal Year 2019 - 2023 Capital Improvement Plan includes a transfer of $9.1 million for the new public parking garage in the University Avenue commercial area. 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 FY 2019 begin- ning balance for this category is $2.7 million. The Fiscal Year 2019 - 2023 Capital Improvement Plan includes $1.2 million in Fiscal Year 2019 for the Bicycle and Pedestrian Plan -Implementation Project. A detailed presentation of the Stanford University Medical Center funding for Fiscal Year 2019 follows below. 122 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Fund Summary ($000) Special Revenue Summary by Fund Type I Public Art Fund T Corn. Dev. Funds Bus. Improv. District Housing In -Lieu Funds !Street Improv. Fund Federal & State Rev. Funds Special District Funds Traffic Mitig. & Parking In -Lieu Funds Stan. Univ. Medical Center Fund Total Revenues Charges for Services From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses 35 673 276 984 - - - - 2,891 393 - - - 3,283 1,921 1,921 170 - - - - - 354 - - 524 - - - 2,345 - 136 - - - 2,481 - 333 - 333 Property Taxes - 140 Rental Income 9 9 - 2,474 - 2,474 140 Return on 2 219 2 428 13 2 27 198 296 1,185 Investments Total 207 892 142 2,782 2,904 530 5,109 474 296 13,335 Expenses Allocated Charges 1 1 269 272 Contract Services 269 2,757 3,026 General Expense 1 - 148 53 - 505 528 2,200 - 3,435 Operating 2 15 - 1 364 - 132 - - 513 Transfers -Out Salary & Benefits 185 53 72 1,274 1,585 Supplies & - - - - - - 121 - - 121 Material Transfer to 3,876 2,541 2,730 6,947 10,283 26,377 Infrastructure Total 189 3,891 148 376 2,904 578 7,812 9,147 10,283 35,329 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 123 SPECIAL REVENUE FUNDS OVERVIEW Consolidated Special Revenue Funds Fund Summary ($000) FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % REVENUES Gas Tax Federal & State Grants Federal CDBG Housing In -Lieu Traffic Mitigation Fees Developer Impact Fees Parking Mitigation Fees BID Assessment SUMC Interest Income Other Revenue Subtotal Revenue 1,461 126 240 4,882 484 1,893 3,221 100 1,756 583 14,746 1,304 803 2,234 376 736 3,282 97 1,526 898 11,256 1,416 379 2,150 467 1,479 4,407 140 1,100 460 11,998 2,891 393 2,150 276 673 4,728 140 1,185 375 12,811 1,475 14 (191) (806) 321 85 (85) 813 104.7 3.69 (40.90) (54.50) 7.28 7.73 (18.48) 6.78 Transfers In General Fund Technology Fund Utility Admin Fund Subtotal Operating Transfers In 713 12 24 749 443 12 24 479 426 21 48 495 453 24 47 524 27 3 (1) 29 6.34 14.29 (2.08) 5.86 Total Source of Funds EXPENDITURES 15,495 11,735 12,493 13,335 842 6.74 General Expense SUMC Subtotal Expenditures 4,909 1,074 5,983 4,306 33 4,339 19,875 19,875 8,439 8,439 (11,436) (11,436) (57.54) (57.54) Transfers Out General Fund Capital Project Fund General Benefits Refuse Fund Subtotal Operating Transfers Out 422 5,675 101 6,198 461 14,865 15,326 480 9,881 22 10,383 500 26,377 13 26,890 20 16,496 (9) 16,507 4.22 166.95 (41.20) 158.98 Total Use of Funds 12,181 19,665 30,258 35,329 5,071 16.76 Net To (From) Reserves 3,314 (7,930) (17,765) (21,994) (4,229) 23.81 124 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Community Development 3lock Grant Community Development Block Grant Fund Housing & Urban Development, current year Housing & Urban Development, prior years Prior Year Excess/Reallocation (1) FY 2018 Adjusted Budget 436,309 329,057 FY 2019 Agency Requests FY 2019 Adopted Budget 392,678 49,569 Program Income Palo Alto Housing Corporation 136,049 136,049 TOTAL SOURCE OF FUNDS 901,415 578,296 USE OF FUNDS Public Service Palo Alto Housing Corporation - SRO Resident Support Services Catholic Charities - Long -Term Care Ombudsman YWCA/Support Network - Domestic Violence Services LifeMoves (formerly InnVision) - Opportunity Service Center Silicon Valley Independent Living - Housing and Emergency Services 23,327 9,327 10,000 37,328 5,032 49,457 10,000 10,000 50,000 5,032 24,023 10,000 10,000 38,023 5,032 Subtotal: Public Service 85,014 124,489 87,078 Planning and Administration Project Sentinel/Fair Housing Services City of Palo Alto - CDBG Administration includes 0.10 FTE & 0.48 Hourly CDBG Administrative Staff 32,012 82,460 33,698 85,000 32,012 73,733 Subtotal: Planning and Administration 114,472 118,698 105,745 Housing, Economic Development, Capital Projects, & Public Facilities Downtown Streets Team/Workforce Development City of Palo Alto - Minor Home Repair Program Community Working Group - Opportunity Center Rehabilitation 336,400 145,529 220,000 336,400 100,000 331,002 54,471 Subtotal: Housing, Economic Development & Capital Projects 701,929 436,400 385,473 TOTAL USE OF FUNDS 901,415 679,587 578,296 (1) Funds received in excess of revenue estimate for local program income (prior fiscal years) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 125 SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund Revenues Permit Sales Day Passes Ticket Machine Transfer from Other Funds for City Share Investment Income FY 2018 Adopted FY 2018 Adjusted 2,190, 000 312,000 215,000 340,180 21,800 2,190, 000 312,000 215,000 340,180 21,800 Y 2019 Adopted 2,217,000 675,000 215,000 354,000 21,800 Total Revenue 3,482,800 Expenditures Administration 1.18 1.18 154,227 154,227 Positions Salaries & Benefits Contract Staffing Parking Occupancy Services Miscellaneous Supplies Ticket Machine (bankcard services, transmission, maintenance) Subtotal Administration 20,548 20,548 6,000 6,000 180,775 1 .30 189,541 182,248 77,031 21,048 20,790 180,775 490,668' Maintenance Positions Salaries & Benefits Supplies Twinkle/Tree Lights Maintenance (garage, elevator, fire sprinkler, landscaping) Custodial (janitorial services, power washing, sweeping) Steam Cleaning Subtotal Maintenance 3.87 3.87 478,239 478,239 60,090 60,090 30,000 30,000 88,751 88,751 121,706 121,706 94,660 94,660 873,446 3.87 495,785 60,090 30,000 88,751 270,519 94,660 873,446 1,039,805 Police Patrol Positions Salaries & Benefits Subtotal Patrols I 0.50 0.50 116,296 116,296 116,296 0.50 121,723 116,296 121,723 126 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund FY 2018 Adopted FY 2018 Adjusted FY 2019 Adopted Other Valet Programs (Lots R, CC, CW, & S) Valet Program (garage construction) Downtown Streets Team Transportation Management Authority (TMA) Utilities/Indirect costs Transfer to GF (PARS trust) Transfer to CIP Fund 289,972 118,744 480,000 198,560 10,802 953,084 289,972 118,744 480,000 198,560 10,802 953,084 289,972 150,000 118,744 480,000 224,716 5,621 2,337,015 Subtotal Other 2,051,162 2,051,162 3,606,069 Total Operating Expenses 3,221,679 3,221,679 5,258,254 Income from Operations (142,699) (142,699) (1,775,454) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 127 SPECIAL REVENUE FUNDS OVERVIEW California Avenue Parking Permit Fund Revenues Permit Sales Day Passes Investment Income FY 2018 Adopted 306,250 135,000 5,200 FY 2018 Adjusted 306,250 135,000 5,200 FY 2019 Adopted 275,625 225,000 5,200 Total Revenue Expenditures Administration Positions Salaries & Benefits Miscellaneous Supplies Contract Staffing Parking Occupancy Services Valet Program Subtotal Administration 0.62 85,259 8,453 93,712 0.62 85,259 8,453 0.80 119,941 35,620 41,400 17,545 150,000 93,712 364,506 Maintenance • L Positions Salaries & Benefits Supplies Garage maintenance Sweeping Ted Thompson and Cambridge garages Fire sprinkler maintenance Steam Cleaning Landscaping Facilities repair Street Sweeping Subtotal Maintenance 182,895 182,895 184,211 Utilities/Indirect costs 30,620 30,620 Transfer to GF (PARS trust) 2,499 2,499 Transfer to CIP Fund 150,000 150,000 Subtotal Other 183,119 183,119 172,205 Total Operating Expenses 459,726 459,726 720,922 Income from Operations (13,276) (13,276) (215,097) 0.43 65,273 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 0.43 65,273 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 0.43 66,589 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 32,690 1,515 138,000 128 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Stanford Development Agreement Fund SOURCE OF FUNDS 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 Beginning Fund Balance Revenue Interest - Community Health and Safety Interest - Stanford Hospital Expansion Cost Mitigation Interest - Intermodal Transit Interest - Neighborhoods/Communities/ Affordable Housing and Affordable Housing Interest - Climate Change SUMC Agreement - Neighborhoods and Communities and Affordable Housing SUMC Agreement - Climate Change FY 2018 Estimated FY 2019 Adopted 1 Change 2,652,673 2,735,817 1,693,514 4,966 2,636,007 3,845,757 13,568,734 2,682,708 30,034 2,755,161 19,343 1,157,572 (535,942) (4,966) 10,442,654 7,806,648 2,673,655 (1,172,102) 19,711,749 6,143,015 30,034 19,343 9,092 73,315 27,898 7,733,333 4,000,000 40,241 41,327 17,364 156,640 40,105 10,206 21,984 8,271 83,325 12,207 (7,733,333) (4,000,000) Total Revenue TOTAL SOURCE OF FUNDS 1 ■ 11,893,015 25,461,749 295,676 (11,597,339) 20,007,425 (5,454,324) USE OF FUNDS Transfers Out I Community Health and Safety: Capital Improvement Fund Intermodal Transit: Capital Improvement Fund Quarry Road Improvements: Capital Improvement Fund Neighborhood and Communities and Affordable Housing: Capital Improvement Fund Climate Change: Capital Improvement Fund Total Transfers Total Expenditures 545,034 4,966 5,200,000 5,750,000 11,200 9,072,000 1,200,000 10,283,200 11,200 (545, 034) (4,966) 9,072,000 (4,000,000) 4,533,200 5,750,000 10,283,200 4,533,200 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 129 SPECIAL REVENUE FUNDS OVERVIEW Ending Fund Balance Stanford Development Agreement Fund FY 2018 Estimated FY 2019 Adopted 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 2,682,708 2,711,748 29,041 2,755,161 2,796,488 41,327 1,157,572 1,174,935 17,364 10,442,654 1,527,294 (8,915,360) 2,673,655 19,711,749 1,513,759 9,724,255 (1,159,895) (9,987,524) TOTAL USE OF FUNDS 25,461,749 20,007,425 (5,454,324) 130 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Debt Sejvic;Fund,. • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 131 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 City Council. For all other City funds annual debt service shall not exceed 15 percent of annual operating expenses unless an exception is approved by City Council. B. Minimize borrowing costs by: DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 133 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 Municipal Advisor (aka 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. ▪ Debt financing 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 existing debt and execute refinancing when economically beneficial. A refinancing may include the issuance of bonds to refund existing bonds or the issu- ance of bonds in order to refund other obligations. A net present value analysis, both in dollar 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 refinancing must be approved by City Council. In September 2016, the state legislature adopted Senate Bill (SB) 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 policy concerning the use of debt and that the proposed debt issuance is con- sistent with that Policy. Though the City's Debt Policy prior to this legislation and practice sub- stantially complied with the new requirements, minor updates to the Debt Policy were approved by the City Council in April 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 an annual report for any issue of debt. LEGAL DEBT LIMIT Based upon the assessed valuation of $32.0 billion for the fiscal year ending June 30, 2017, the City is limited to general obligation indebtedness of $1.13 billion. As of June 30, 2017, the amount of debt applicable to the debt limit is $63.7 million, which is well below its legal debt limit. The 134 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW 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 2018 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, 2018, these bonds were refinanced with the issuance of the AA+ rated 2018 (Golf Course Renovation) Green COP bonds. The present value savings of $0.3 million included $0.2 million in reserve funds, and highly rated bonds no longer require a reserve fund, so the existing reserve funds were used to reduce the principal amount that was refinanced to $0.6 million with $0.1 million in interest. The final payment on this bond will be in November 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, 2018, for the above 2010 and 2013 bonds, $45.8 million and $16.3 million principal and $28.5 million and $9.1 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 twelve 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 2.5 percent, payable from General Fund revenues. As of June 30, 2018, there will be $0.4 million in principal and $5,302 in interest as the remaining debt service on the bonds with final payment occurring in September 2018. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 135 DEBT SERVICE FUNDS OVERVIEW 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 systems. The bonds are special obligations of the City payable solely from and secured by a pledge of and lien upon the reve- 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 6.3 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 $1.3 million principal and $0.1 million interest as the remaining debt service on the bonds with final payment 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 $8.3 million principal and $1.7 million interest as the remaining debt service on the bonds as of June 30, 2018, 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 $0.4 million as the remaining debt service on the bonds as of June 30, 2018 with final payment occurring in Fiscal Year 2022. 136 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW 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 1.8 percent to 6.0 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 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 range from mid to high 32 percent of interest payable. The lien on the 1995 Bonds on the Net Reve- nues is senior to the lien on Net Revenues securing the 2009 Bonds and the 2002 Bonds. The City received subsidy payments amounting to $0.5 million, which represents 33 percent of the two interest payments due on June 1, 2016 and December 1, 2016. The pledge of future Net Revenues of the above funds ends upon repayment of the $27.7 million principal and $15.9 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 $4.1 million principal and $0.8 million in -substance interest as the remaining debt service on the bonds as of June 30, 2018 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, 2018 with final payment occurring in Fiscal Year 2031. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 137 DEBT SERVICE FUNDS OVERVIEW 2011 Utility Revenue Bonds, Series A On September 22, 2011 the City issued Utility Revenue Bonds to refinance the 2002 Utility Rev- enue Bonds, which were 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 payments are due semi-annually on June 1 and December 1 from 3 percent to 4 percent. The Revenue 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, 2018 with final payment occurring in Fiscal Year 2026. 2018 Golf Course (Green) Certificates of Participation (COPs) On June 5, 2018, the City issued $8.2 million of COPs to reimburse the Capital Infrastructure Fund for the City's complete reconfiguration of the municipal golf course (aka Baylands Golf Links). The lease is secured by the City's Fire Station 1, with proceeds of $8.4 million; the addi- tional proceeds cover the cost of issuance of the bonds. Principal payments will be due on November 1 and interest payments are due semi-annually on November 1 and May 1. Standard and Poor's (S&P) gave an AA+ rating and the bond's true interest costs is 4.3 percent, payable from the General Fund. Credit Rating Agencies Credit rating is 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 prudent financial management and fiscal strength are viewed most favorably by credit agencies. The four Utility bonds (1995, 1999, 2009, & 2011) that are rated also received S&P's highest credit rat- ing of Triple A. Moody's has rated these Utility bonds with their second highest (Aa1) or third highest (Aa2) ratings. 138 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW Debt Service Fund Revenues FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted 1110_ _NM Property Tax 4,582 Return on Investments 39 Subtotal Revenues 4,621 Operating Transfers In Parking 2002B COPS Taxable - General Fund Library GO Bonds - Capital 3,018 0 Subtotal General Fund Operating Transfers FY 2019 Adopted 4,572 4,433 4,427 33 0 0 4,605 4,433 4,427 234 Total Source of Funds I 234 3,252 234 233 161 FY 2019 Change $ FY 2019 Change (6) (0.1)% 0 0.0% (6) (0.1)% (72) (30.9)% 0 0 0 0.0% (30.9)% 233 161 (72) 4,839 4,666 4,588 (78) (1.7)% Expenses Parking 2002B COPS Taxable Principal Parking 2002B COPS Taxable Interest Library GO Bonds Debt Service Library GO Bonds Principal Library GO Bonds Interest Subtotal Expenses 150 160 170 150 (20) (11.8)% 84 74 63 11 (52) (82.5)% 32 (11) 0 0 0 0.0% 6,585 1,500 1,570 1,640 70 4.5% 4,146 2,932 2,863 2,787 (76) (2.7)% 10,997 4,655 4,666 4,588 (78) (1.7)% Total Use of Funds WM 10,997 I 4,655 4,666 4;. 'J (78) Net to (from) Reserves (3,124) 184 0 0 0 0.0% DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 139 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 141 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 2019 ADOPTED BUDGET 143 CITY ATTORNEY CITY ATTORNEY Molly S. Stump 1.00 Senior Management Analyst 1.00 Secretary to City Attorney 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 2019 POSITION TOTALS 11.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 144 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 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 ▪ Supported the completion of the Comprehensive Plan Update, including legal review of the Plan and Environmental Impact Report (EIR) and preparation of required resolutions for adoption. • Prepared ordinances implementing Council's initiatives to protect and improve neighborhood quality of life, including anti -idling, cannabis regulation, and enhancements to dewatering requirements. • Drafted loan and regulatory agreements, and resolved federal and state litigation, enabling acquisition of Buena Vista Mobile Home Park, protection of current residents, and long-term affordability of the Park. ▪ Supported development of utility rate changes and updates to financial management policies. ▪ Provided training on Public Records Act requirements to City departments. • Drafted contracts and other transaction documents for major infrastructure projects, including new Junior Museum and Zoo and California Avenue parking garage. ▪ Drafted service contracts for City facilities such as the Baylands Golf Course and Palo Alto Animal Shelter. • Updated standard contracts and competitive solicitation documents and revised the Purchasing Manual to enhance City -protective provisions and ensure compliance with current legal and regulatory requirements. ▪ Negotiated and drafted key inter -agency agreements, including Caltrain electrification and provision of fire services to Stanford University. Initiatives • Support implementation of the City's housing work plan and initiatives through preparation of zoning ordinances to facilitate housing production consistent with the Comprehensive Plan Update and Council direction. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 145 CITY ATTORNEY • Prepare transaction documents for design and construction of infrastructure projects, including the City Council approved 2014 Infrastructure Plan and new public safety building. ▪ Support the implementation of traffic mitigation measures required under the Comprehensive Plan Update, including adoption of a traffic impact fee. ▪ Continue to advocate in administrative forums and state court to enforce City ordinances and requirements. • Advise and assist completion of natural gas cost of service study and new rate design, and programs to support green gas initiatives. • Support acquisition of human capital, finance, and customer information software systems. ▪ Provide legal support for key policy initiatives, including exploration of rail grade separation options and potential measures to protect and enhance City revenues. 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. 146 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY ATTORNEY 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. /Key Performance C1 -AIMS RESOLUTION Goal Objective V easures 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of claims resolved within 45 days of filing Description Purpose Status 93.00% 97.00% 90.00% 98.00% 98.00% 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. REDUCTION 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. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of surveyed who agree/ strongly agree that the training provided is useful and relevant Description Purpose Status Workload V N/A N/A N/A N/A N/A This measure tracks the usefulness and relevance of the training provided by the Office of the City Attorney to City staff. Training assists in reducing errors thereby reducing the exposure of liability to the City. The Office of the City Attorney recommends the elimination of this metric as it is not an effective measure of the legal risks to the City. Performance measures will be re-evaluated as part of the citywide performance measure and management review. easures FY 2019 Adopted Number of claims handled 112 93 98 88 88 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 147 CITY ATTORNEY 3udget Summary Dollars by Division Administration Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 463,073 537,560 571,995 604,877 32,882 5.7% 1,477,082 1,435,074 2,002,460 1,884,109 (118,351) (5.9)% 771,956 1,107,646 661,247 685,143 23,896 3.6% 84,335 77,725 120,198 114,086 (6,112) (5.1)% 2,796,446 3,158,005 3,355,900 3,288,215 (67,685) (2.0)% Dollars by Category Salary & Benefits Healthcare 134,723 127,806 256,190 176,846 (79,345) (31.0)% Other Benefits 74,900 62,267 73,020 69,176 (3,844) (5.3)% Pension 318,434 352,259 497,657 476,345 (21,312) (4.3)% Retiree Medical 132,445 144,937 152,481 115,560 (36,921) (24.2)% Salary 1,289,893 1,270,158 1,772,423 1,690,879 (81,544) (4.6)% Workers' Compensation 2,878 59,526 42,882 (16,645) (28.0)% Total Salary & Benefits 1,953,272 1,957,426 2,811,297 2,571,687 (239,610) (8.5)% Allocated Charges 162,490 109,805 121,178 137,246 16,068 13.3% Contract Services 626,943 1,066,351 340,301 472,301 132,000 38.8% Facilities & Equipment 10,538 1,000 1,000 - -% General Expense 23,881 12,878 53,642 52,642 (1,000) (1.9)% Operating Transfers -Out 24,857 24,857 -% Rents & Leases 1,295 1,907 2,050 2,050 - -% Supplies & Material 18,026 9,638 26,432 26,432 - -% Total Dollars by Expense Category 2,796,446 3,158,005 3,355,900 3,288,215 (67,685) (2.0)% Revenues Charges for Services 14,845 28,052 28,052 -% Charges to Other Funds 584,882 1,108,575 577,833 392,700 (185,134) (32.0)% Other Revenue (2,191) 8,000 10,789 10,789 - -% Total Revenues 597,536 1,116,575 616,675 431,541 (185,134) (30.0)% 148 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY ATTORNEY 3udget Summary 1 Positions by Division Administration Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1.47 1.47 1.47 1.47 - -% 7.31 7.31 7.31 6.46 (0.85) (11.63) % 1.86 1.86 1.86 1.71 (0.15) (8.06) % 0.36 0.36 0.36 0.36 -% 11.00 11.00 11.00 10.00 (1.00) (9.09) % Staffing Job Classification Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator Deputy City Attorney Legal Fellow FY 2016 Actuals FY 2017 Actuals 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Principal Attorney 1.00 1.00 Secretary to City Attorney 1.00 1.00 1.00 1.00 Senior Assistant City Attorney 2.00 2.00 - - Senior Deputy City Attorney 1.00 1.00 - - Senior Legal Secretary 1.00 1.00 1.00 (1.00) Senior Management Analyst 1.00 1.00 1.00 1.00 127,754 Sub -total: Full -Time Equivalent 11.00 11.00 11.00 10.00 (1.00) 1,565,432 Positions Total Positions 11.00 11.00 11.00 10.00 (1.00) 1,565,432 FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 3.00 1.00 1.00 1.00 1.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 499,171 231,566 284,253 101,504 150,000 91,645 79,539 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 149 CITY ATTORNEY 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 11.00 3,355,900 616,675 2,739,225 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings: one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Contract Services Adjustments for Outside Counsel General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Adjustments to Costs of Ongoing Activities 7,239 7,239 — 7,239 — 7,239 (89,055) (89,055) — 32,000 — 32,000 (5,747) — (5,747) — (17,089) — (17,089) 8,069 5,969 539 (65,315) (185,134) (185,134) 185,134 8,069 5,969 539 119,819 Total FY 2019 Base Budget 11.00 2,866,282 Budget Adjustments 1 Reduce Office of the City Attorney Administrative Staffing 2 Supplemental Pension Trust Fund Contribution 3 Outside Counsel Resources Total Budget Adjustments (1.00) (134,466) (1.00) 24,857 100,000 (9,609) - (134,466) 24,857 100,000 (9,609) Total FY 2019 Adopted Budget 10.00 3,288,215 431,541 2,856,674 150 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY ATTORNEY 3udget Adjustments Budget Adjustments Expenditures Revenues Net General Fund 1 Reduce Office of the City Attorney Administrative Staffing -1.00 (134,466) 0 (134,466) This action eliminates a vacant 1.0 FTE Senior Legal Secretary in the Office of the City Attorney. The Senior Legal Secretary position has been vacant since 2016. This action institutes this staffing model on a permanent basis and is anticipated to reduce the administrative capacity, resulting in an increased reliance of these duties on attorney staffing. (Ongoing savings: $100,000). Performance Results There is no anticipated significant impact to operations. 2 Supplemental Pension Trust Fund Contribution 0.00 24,857 0 24,857 This action transfers $24,857 from the Office of the City Attorney to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Office of the City Attorney's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 3 Outside Counsel Resources 0.00 100,000 0 100,000 This action adds $100,000 in one-time funding for additional outside counsel resources to provide the office with additional capacity for addressing complex legal matters. (Ongoing costs: $0). Performance Results Proactively setting aside resources for outside counsel will provide flexibility for the Office of the City Attorney to address issues that require special attention. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 151 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 2019 ADOPTED BUDGET 153 CITY AUDITOR CITY AUDITOR Harriet Richardson 2.00 Senior Performance Auditor 2.00 Performance Auditor II 1.00 Performance Auditor I FY 2019 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. 154 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY AUDITOR Description The Office of the City Auditor (OCA) 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 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 OCA presents an annual audit work plan for City Council approval. The OCA will continue to report quarterly to the City Council on the status of audit projects. The OCA contracts with an independent certified public accountant for the City's annual external financial audit. The OCA also conducts and coordinates revenue monitoring of sales and use tax. Accomplishments • Identified and confirmed the City's receipt of $380,290 in sales and use tax recoveries through the end of Fiscal Year 2017 in coordination with the City's consultant. ▪ Published Fee Schedule Audit, which presented three recommendations related to updating the City's cost recovery policy and aligning the Community Services Department's cost recovery policy with the City's. ▪ Published the Cross Bore Inspection Contract Audit, which presented four recommendations to ensure that future inspections of sewer lines are completed in a more effective manner and to improve the accuracy of inspection data. ▪ Published the audit of Continuous Monitoring: Payments, which presented seven recommendations to improve the ability to identify duplicate payments and the accuracy of the vendor master file. ▪ Published the audit of Green Purchasing Practices, which presented eight recommendations to update policies to improve compliance with City requirements for green purchasing and to evaluate options for tracking and reporting green purchases. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 155 CITY AUDITOR ▪ Compiled the results of the 2017 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. 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. ▪ 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 Palo Alto Unified School District (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 Survey 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. Goals and Objectives GOAL 1 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. 156 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY AUDITOR 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 Survey 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 2019 ADOPTED BUDGET 157 CITY AUDITOR Key Performance ti 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. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of major work products per audit staff. Description Purpose Status 1.00 1.67 1.20 1.27 1.75 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 1.20 major work products per audit staff on an annual basis. The FY 2019 Adopted Budget will be 0.55 major work products higher than the target due primarily to carryover of several in -progress audits that will be completed early in the fiscal year, in addition to completion of new projects. The number of major work products generated by each audit staff is estimated to be at a higher level of 1.27 for FY 2018 due to changes in staff count which would increase the amount of workload per person. 158 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY AUDITOR PERCENT OF AUDIT RECOMMENDATIONS IMPLEMENTED OVER THE LAST FIVE YEARS Goal Objective 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, and/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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of open audit recommendations implemented over the last five years. Description Purpose Status 45.00% 50.00% 75.00% 50.00% 60.00% 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 Office of the City Auditor 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. 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 documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Goal Objective FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 FY 2019 Estimated Adopted Ratio of sales tax revenue recoveries to cost. Description Purpose Status 3:1 5:1 2:1 9:1 3:1 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. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 159 CITY AUDITOR Workload V ensures T FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of major work products issued. 4 8 6 9 8 160 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY AUDITOR 3udget Summary Dollars by Division Audit Services Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1,112,413 1,207,797 1,301,326 1,267,289 (34,037) (2.6)% 1,112, 413 1,207,797 1,301,326 1,267,289 (34, 037) (2.6) % Dollars by Category Salary & Benefits Healthcare 38,475 42,244 42,992 38,612 (4,380) (10.2)% Other Benefits 36,498 31,362 27,750 27,609 (141) (0.5)% Pension 157,746 172,942 184,894 180,734 (4,159) (2.2)% Retiree Medical 31,616 34,598 36,399 44,844 8,445 23.2% Salary 612,070 637,696 659,949 643,242 (16,707) (2.5)% Workers' Compensation - - 23,777 17,129 (6,648) (28.0)% Total Salary & Benefits 876,405 918,841 975,761 952,171 (23,591) (2.4)% Allocated Charges 55,053 45,079 53,306 59,355 6,049 11.3% Contract Services 157,381 221,220 254,000 228,000 (26,000) (10.2)% General Expense 17,004 19,895 15,279 15,279 - -% Operating Transfers -Out - - 9,505 9,505 -% Supplies & Material 6,571 2,762 2,980 2,980 - -% Total Dollars by Expense Category 1,112, 413 1,207,797 1,301,326 1,267,289 (34, 037) (2.6) % Revenues Charges to Other Funds 799,890 385,751 740,731 897,314 156,584 21.1% Sales Taxes 117,186 380,290 150,000 150,000 - -% Total Revenues 917,076 766,041 890,731 1,047,314 156,584 17.6% Positions by Division Audit Services 5.00 5.00 5.00 5.00 -% Total 5.00 5.00 5.00 5.00 - -% CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 161 CITY AUDITOR Staffing City Auditor Job Classification Performance Auditor I Performance Auditor II Senior Performance Auditor Sub -total: Full -Time Equivalent Positions Total Positions FY 2016 Actuals 1.00 1.00 1.00 2.00 FY 2017 Actuals 1.00 1.00 1.00 2.00 FY 2018 Adopted Budget 1.00 1.00 1.00 2.00 FY 2019 Adopted Budget 1.00 1.00 2.00 1.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 FY 2019 Change FTE 1.00 (1.00) FY 2019 Salary 187,533 70,013 205,594 132,434 595,573 595,573 162 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY AUDITOR 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget One -Time Prior Year Budget Adjustments 5.00 1,301,326 890,731 410,595 Citizen's Survey on Code Enforcement Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Triennial Peer Review (20,000) 2,780 (4,000) (20,000) 2,780 (4,000) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (21,220) — (21,220) Salary and Benefits Adjustments General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) Contract Services General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges 19,226 — 19,226 (2,311) (2,311) (6,826) — (6,826) (2,000) (2,000) 156,584 (156,584) 3,245 3,245 2,854 — 2,854 (519) — (519) Adjustments to Costs of Ongoing Activities Total FY 2019 Base Budget Budget Adjustments 5.00 13,669 1,293,775 156,584 1,047,315 (142,914) 246,461 1 Supplemental Pension Trust Fund Contribution 2 Realign Office of the City Auditor Staffing 9,505 (35,991) 9,505 (35,991) Total Budget Adjustments (26,486) (26,486) Total FY 2019 Adopted Budget 5.00 1,267,289 1,047,315 219,975 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 163 CITY AUDITOR 3 tro'' `r 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution 0.00 9,505 maim °xi This action transfers $9,505 from the Office of the City Auditor to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Office of the Office of the City Auditor's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Realign Office of the City Auditor Staffing (35,991) (35,991) This action eliminates 1.0 FTE Senior Program Performance Auditor and adds 1.0 FTE Program Performance Auditor II in the Office of the City Auditor. Although the Office of the City Auditor has authorized staffing levels at the Senior Program Performance Auditor level, the Office has been underfilling their staffing. This action aligns authorized staffing with actual staffing levels and is therefore not anticipated to have immediate impacts on service delivery for the Office of the City Auditor. (Ongoing savings: $35,991) Performance Results Permanently reducing the staffing levels will reduce the overall cost for the Office of the City Auditor to deliver current services without impacting the quality of services. 164 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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 legislative process; ensure the City's legislative pro- cesses 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 action 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 2019 ADOPTED BUDGET 165 CITY CLERK CITY CLERK Beth Minor 1.00 Assistant City Clerk 1.00 Deputy City Clerk FY 2019 POSITION TOTALS 5.00 - 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. 2.00 Administrative Associate I l l 166 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY CLERK Description The City Clerk's Office provides a wide range of public services including: supporting 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 • Held the fifth annual Board and Commission recognition event at the Mitchell Park Bowl. ▪ Successfully managed the Mayor's State of the City address at the Oshman Family Jewish Community Center. ▪ Received applications for Board and Commission vacancies resulting in 72 interviews, totaling 13 hours of interviews in calendar year 2017. ▪ Prepared and published 52 City Council meeting agenda packets, and 19 Finance and Policy and Services Committee's agenda packets in calendar year 2017. ▪ Supported 311 plus hours of Council and Council Standing Committee meetings in calendar year 2017. • Scheduled and supported 315 administrative and citation hearings in calendar year 2017. • Worked 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. ▪ Added additional public meeting supplementary information to the Council and Council Standing Committee agendas and webpages (staff responses to Council Member questions, staff memorandum, and presentations). Initiatives • Run a successful Council election and a potential ballot measure election in November 2018. ▪ Facilitate voter -approved transition from nine Council Members to seven Council Members. ▪ Assist with upgrades 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. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 167 CITY CLERK • Update the citywide email retention policy. ▪ Update citywide records management and training program. • Explore an online records portal. • Transition from verbatim transcript minutes to synopsis Sense minutes for City Council and Standing Committee meeting records. • Update the Conflict of Interest Code with the assistance of every department. • Explore various online board and commission application solutions. Goals and Objectives GOAL 1 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 11 days prior to the Council meeting. ▪ 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, recordings, 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. 168 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percentage of action minutes posted within one week after the Council meeting Description Purpose Status 97.00% 95.00% 95.00% 98.00% 98.00% 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. The City Clerk's Office has maintained a high performance level with 95% to 97% of action minutes posted online within one week after each Council meeting and anticipates maintaining the 98% level of performance estimated for FY 2018 into FY 2019. 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 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted Percentage of Council agenda packet materials posted Thursdays, 11 days prior to the Council meeting Description Purpose Status 98.00% 99.00% 98.00% 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 98% of packets posted 11 days prior to the Council meeting and anticipates maintaining a level of 98% for FY 2019. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 169 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 V Provide excellent customer service to the public. FY 2016 Actuals 98.00% FY 2017 Actuals 96.00% FY 2018 Adopted 99.00% FY 2018 Estimated 99.46% FY 2019 Adopted 99.50% 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 99.00% goal adopted for FY 2018 and anticipates exceeding this target in FY 2019. ensures Number of City Council Meeting Action Minutes posted annually Number of weekly agenda packets produced annually Number of public records requests received annually Number of applications processed for open board and commission seats FY 2016 Actuals 57 46 FY 2017 Actuals 53 37 FY 2018 Adopted 50 45 FY 2018 Estimated 46 40 FY 2019 Adopted 47 42 299 340 315 370 400 40 66 50 52 55 170 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 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 Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services General Expense Operating Transfers -Out Supplies & Material Total Dollars by Expense Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget 128,736 142,416 118,721 592,955 58,830 30,009 206,481 120,049 573,092 585,353 746,322 410,415 92,478 124,787 126,857 109,760 72,085 86,787 86,080 57,245 75,920 79,175 89,407 1,001,140 1,048,526 1,373,867 1,290,424 FY 2019 Change $ FY 2019 Change % 474,234 399.5% (86,431) (41.9)% (335,907) (45.0)% (17,098) (13.5)% (28,835) (33.5)% (89,407) (100.0)% (83,443) (6.1) % 52,139 34,447 66,350 39,983 (26,367) (39.7)% 15,909 19,078 25,875 21,687 (4,188) (16.2)% 5,237 1,201 6,696 6,870 174 2.6% 104,007 129,902 165,848 140,685 (25,163) (15.2)% 73,486 80,417 84,602 40,532 (44,070) (52.1)% 425,956 451,658 616,225 521,892 (94,332) (15.3)% (369) 22,469 16,186 (6,283) (28.0)% 676,733 716,334 988,064 787,835 (200,229) (20.3)% 129,850 136,466 145,096 167,649 22,553 15.5% 118,362 142,835 177,320 255,320 78,000 44.0% 56,737 42,636 52,591 51,591 (1,000) (1.9)% - - - 8,510 8,510 -% 19,458 10,255 10,796 19,519 8,723 80.8% 1,001,140 1,048,526 1,373,867 1,290,424 (83,443) (6.1) % Revenues Charges for Services Charges to Other Funds Other Revenue Total Revenues 1 138 2,043 2,043 513,239 324,795 487,528 658,196 493 649 3,143 3,143 513,733 325,582 492,714 663,382 -% 170,668 35.0% -% 170,668 34.6% CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 171 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 Administrative Associate Ill Assistant City Clerk City Clerk Deputy City Clerk Hearing Officer FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 0.35 0.35 0.35 2.85 2.50 714.29% 1.23 1.23 1.23 0.48 (0.75) (60.98)% 2.85 2.85 2.85 1.30 (1.55) (54.39)% 0.65 0.65 0.65 0.55 (0.10) (15.38)% 0.50 0.50 0.50 0.30 (0.20) (40.00)% 0.65 0.65 0.65 (0.65) (100.00)% 6.23 6.23 6.23 5.48 (0.75) (12.04)% FY 2016 Actuals 2.00 1.00 1.00 1.00 0.75 FY 2017 Actuals 2.00 1.00 1.00 1.00 0.75 FY 2018 Adopted Budget 2.00 1.00 1.00 1.00 0.75 FY 2019 Adopted Budget 2.00 1.00 1.00 1.00 FY 2019 Change FTE (0.75) Sub -total: Full -Time Equivalent 5.75 5.75 5.75 5.00 (0.75) 493,851 Positions FY 2019 Salary 166,646 97,947 146,806 82,451 Temporary/Hourly 0.48 0.48 0.48 0.48 30,701 Total Positions 6.23 6.23 6.23 5.48 (0.75) 524,552 172 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY CLERK 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 6.23 1,373,867 492,714 881,153 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Supplies & Material General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one -Time FY 2019 Savings) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Adjustments to Costs of Ongoing Activities 3,120 3,120 (41,325) 3,120 3,120 (41,325) 6,723 6,723 (2,184) (6,450) 3,067 1,548 17,003 (21,619) 170,668 170,668 (2,184) (6,450) (170,668) 3,067 1,548 17,003 (192,287) Total FY 2019 Base Budget 6.23 1,355,368 663,382 691,986 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Administrative Hearing Service Delivery Change Total Budget Adjustments (0.75) (0.75) 8,510 (73,454) (64,944) 8,510 (73,454) (64,944) Total FY 2019 Adopted Budget 5.48 1,290,424 663,382 627,042 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 173 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution 0.00 This action transfers $8,510 from the City Clerk's Office to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the City Clerk's Office's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Administrative Hearing Service Delivery Change (73,454) (73,454) This action eliminates a vacant 0.75 FTE Hearing Officer position in the City Clerk's Office, partially offset by the addition of contract dollars to align with current service delivery. The City Clerk is required to provide a hearing officer to adjudicate various required administrative hearings. For the past two years, the City Clerk has piloted the use of outside contractors as the hearing officer for such hearings. This pilot has resulted in comparable levels of quality in services as well as provided increased flexibility to draw on services only on an as -needed basis, ultimately resulting in a reduction in the cost to provide this required service. (Ongoing Savings: $73,454) Performance Results Transitioning from a Hearing Officer position to using outside contractors as the hearing officers will reduce the overall cost for the City Clerk's Office to deliver current services without impacting quality of services and satisfaction of customers. 174 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2019 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 2019 ADOPTED BUDGET 175 CITY COUNCIL 3udget Summary Dollars by Division City Council Operations Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 429,737 452,223 499,824 489,510 (10,314) (2.1)% 429,737 452,223 499,824 489,510 (10,314) (2.1)% Dollars by Category Salary & Benefits Healthcare 107,922 119,386 77,303 114,888 37,585 48.6% Other Benefits 13,328 4,326 5,614 5,640 26 0.5% Pension 15,081 16,991 32,827 33,459 632 1.9% Retiree Medical 76,049 83,222 87,553 49,156 (38,397) (43.9)% Salary 69,965 88,111 108,000 96,000 (12,000) (11.1)% Workers' Compensation - - 4,270 3,076 (1,194) (28.0)% Total Salary & Benefits 282,346 312,034 315,568 302,220 (13,349) (4.2)% Allocated Charges 2,285 15,949 15,871 17,220 1,349 8.5% Contract Services 111,373 76,609 108,000 108,000 -% General Expense 31,251 45,748 57,455 57,455 - -% Operating Transfers -Out - - 1,686 1,686 -% Supplies & Material 2,483 1,883 2,930 2,930 - -% Total Dollars by Expense Category 429,737 452,223 499,824 489,510 (10,314) (2.1)% Revenues Charges to Other Funds 99,396 136,295 95,624 91,738 (3,886) (4.1)% Total Revenues 99,396 136,295 95,624 91,738 (3,886) (4.1)% Positions by Division City Council Operations 9.00 9.00 9.00 7.00 (2.00) (22.22)% Total 9.00 9.00 9.00 7.00 (2.00) (22.22)% 176 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY COUNCIL Staffing Job Classification FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary City Council Sub -total: Full -Time Equivalent Positions Total Positions 9.00 9.00 9.00 7.00 (2.00) 84,000 9.00 9.00 9.00 7.00 (2.00) 84,000 9.00 9.00 9.00 7.00 (2.00) 84,000 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 177 CITY COUNCIL 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 9.00 499,824 95,624 404,200 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Adjustments to Costs of Ongoing Activities 1,141 — 1,141 (2.00) (1,226) 583 40 (2.00) (13,141) 1,141 1,141 (12,123) (415) (1,226) (3,886) 3,886 (3,886) 583 40 (9,255) Total FY 2019 Base Budget 7.00 487,824 91,738 396,086 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution Total Budget Adjustments 1,686 1,686 1,686 1,686 Total FY 2019 Adopted Budget 7.00 489,510 91,738 397,772 178 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY COUNCIL 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution - 0.00 1,686 1,686 This action transfers $1,686 from the City Council to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the City Council's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 179 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 2019 ADOPTED BUDGET 181 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 I 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 1 SUSTAINABILITY 1.00 Chief Sustainability Officer 0.75 ManagementAnalyst FY 2019 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. 182 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 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. • Advanced organizational excellence through work plans, support for professional development and work/life balance, and performance management through the Executive Leadership Team. ▪ Transitioned essential leadership and staff positions, restructuring the office to ensure the execution of key City Council priorities. ▪ Supported the Police Department following the retirement of the Police Chief and Assistant Police Chief, and successfully recruited a new Police Chief. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 183 CITY MANAGER • Managed the City's state and federal legislative program to advance City Council and City department goals. ▪ Hosted several international delegations from China and the European Union, including representatives from Sister Cities in Heidelberg, Germany and Linkoping, Sweden. • 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 elements, beginning the environmental clearance and coordination with stakeholders including Stanford University. ▪ Negotiated extension of Stanford University fire/emergency services agreement, and restarted negotiations on a new long-term agreement. • Supported emergency preparedness throughout winter storm season. ▪ Coordinated strategic planning for Caltrain grade separation visioning, technical analysis and financial planning. • Continued ongoing interdepartmental focus on Caltrain safety. • Assisted with efforts to resolve key land use issues including Buena Vista, Edgewood Plaza, Palo Alto Square and Castilleja School. ▪ Coordinated with the Planning and Community Environment Department to support the adoption of a new Comprehensive Plan. ▪ Led the effort to develop the Council adopted 3 -year Sustainability Implementation Plan. ▪ Provided communications advice and support for issue -specific efforts ranging from small cell towers to Code Art Festival. ▪ Supported multiple community outreach efforts on a 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. ▪ Organized "On the Table" day of regional conversation about housing issues in partnership with local coffee houses as gathering venues. • Led Veterans Day Recognition Event to honor the armed services and hosted the United States Army's 63rd Regional Support Command Color Guard, as well as other members of the Armed Forces. • 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. ▪ Administered the Know Your Neighbor Grant Program encouraging neighborhood activities that foster a sense of place and community and successfully transitioned it to the Community Services Department. 184 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY MANAGER • 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 advocating for and responding to initiatives by the Federal Aviation Administration (FAA) and regional efforts to expand and create new community roundtables. • 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. • Held a Business Development Summit in 2017 in partnership with the Palo Alto Chamber of Commerce hosting a panel that included the U.S. Commercial Service, U.S. Small Business Administration, U.S. Export -Import Bank, and U.S. Patent and Trademark Office. ▪ Santa Clara County Healthy City Awards named the City of Palo Alto as the Best Overall, 2017 and the Exemplary City for Reduced Exposure to Secondhand Smoke. • Developed and received City Council acceptance of the 2018-2020 Sustainability Implementation Plan (SIP) to achieve the goals of the Sustainability/Climate Action Plan. 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 cool cities initiatives. ▪ Work with Rail Committee, citizens, and stakeholders to achieve agreement on a grade separation alternative for rail crossings. ▪ 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. ▪ Enhance and advance international programs through the partnership with Neighbors Abroad to create smart city relationships with existing 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 the Department of Veterans Affairs regarding impacts from their development activity at their Palo Alto location. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 185 CITY MANAGER • Continue to lead the Animal Shelter assessment in partnership with the Community Services Department for City Council consideration of a possible new service model. • Further implement the Cool Block Community Engagement program to develop and strengthen the citizen/local government relationships, and enable authentic partnerships in building community. • Conduct a usability assessment of current website with internal/external stakeholders in anticipation of website redesign and platform migration. • 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 grade separation, planning and transportation issues, as well as infrastructure projects including major downtown construction projects. • Continue partnership with businesses to advance the City's economic development goals and meet business owners' needs regarding concerns such as transportation, parking, and development. ▪ Embed S/CAP goals and SIP actions into department work plans, program goals, objectives and operations, and support interdepartmental SIP implementation teams. 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. 186 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY MANAGER GOAL 3 Advocate sound financial planning by developing and implementing Operating and Capital Improvement Program (CIP) budgets. 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. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 187 CITY MANAGER Key Performance CITIZEN SATISFACTION ti easures Goal Lead the City's management team to ensure the provision of high -quality, cost- effective, and customer -focused services. Objective Facilitate a high level of citizen satisfaction with City services. FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted 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 81.00% 58.00% 86.00% 86.00% 61.00% 86.00% 87.00% 67.00% 92.00% 86.00% 65.00% 88.00% 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. 188 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 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 72.00% 72.00% 81.00% 75.00% 81.00% 61.00% 66.00% 71.00% 66.00% 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 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 78.00% 82.00% 84.00% 83.00% 84.00% 21.00% 24.00% 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. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 189 CITY MANAGER Workload V ensures FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of City Council and City Council Committee meetings Total Hours of City Council and City Council Committee meetings 86 372 60 281 96 412 70 325 70 325 190 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY MANAGER 3udget Summary il Dollars by Division Administration and City Management Economic Development Public Communication Sustainability Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 2,462,341 1,955,938 2,876,223 2,998,094 121,871 FY 2019 Change % 4.2% 305,249 251,849 48,877 47,033 (1,845) (3.8)% 331,769 193,511 234,528 241,613 7,085 3.0% 495,345 490,988 523,762 1,131,116 607,354 116.0% 3,594,704 2,892,286 3,683,391 4,417,856 734,465 19.9% Dollars by Category Salary & Benefits Healthcare 165,698 115,537 203,682 213,988 10,306 5.1% Other Benefits 132,825 103,583 68,779 77,148 8,369 12.2% Overtime 118 -% Pension 423,281 330,387 532,912 593,110 60,199 11.3% Retiree Medical 114,501 125,300 131,822 126,771 (5,051) (3.8)% Salary 1,737,011 1,367,184 2,012,171 1,908,941 (103,229) (5.1)% Workers' Compensation 6,708 6,844 59,209 42,653 (16,556) (28.0)% Total Salary & Benefits 2,580,023 2,048,954 3,008,574 2,962,612 (45,962) (1.5)% Allocated Charges 173,174 168,052 186,660 184,127 (2,532) (1.4)% Contract Services 608,509 497,763 372,935 1,149,935 777,000 208.3% Facilities & Equipment 21,870 - - - - -% General Expense 191,523 166,443 102,141 78,141 (24,000) (23.5)% Operating Transfers -Out 2,039 2,039 2,039 31,999 29,960 1,469.3% Rents & Leases 75 63 154 154 -% Supplies & Material 17,491 8,973 10,889 10,889 -% Total Dollars by Expense Category 3,594,704 2,892,286 3,683,391 4,417,856 734,465 19.9% Revenues Charges to Other Funds 1,025,353 994,008 1,585,569 1,452,948 (132,620) (8.4)% From Other Agencies 780,000 780,000 -% Other Revenue 2,026 31,576 -% Rental Income 403 -% CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 191 CITY MANAGER 3udget Summary FY 2016 Actuals Total Revenues 1,027,379 Positions by Division Administration and City Management Economic Development Public Communication Sustainability Total Staffing Job Classification Administrative Assistant Administrative Associate Ill Assistant City Manager Assistant City Manager/Utilities General Manager Assistant to the City Manager FY 2017 Actuals 1,025,987 7.10 7.10 1.00 1.00 0.90 0.90 0.90 0.90 - -% 2.00 1.00 1.96 1.75 (0.21) (10.71)% 11.00 10.00 12.21 12.00 (0.21) (1.72) % FY 2018 Adopted Budget 1,585,569 FY 2019 Adopted Budget 2,232,948 FY 2019 Change $ 647,380 FY 2019 Change % 9.35 9.35 40.8% - % FY 2016 Actuals 1.00 1.00 2.00 FY 2017 Actuals FY 2018 Adopted Budget 1.00 1.00 2.00 1.00 1.00 FY 2019 Adopted Budget 1.00 1.00 0.25 0.25 2.00 Chief Communications Officer 1.00 1.00 1.00 Chief Sustainability Officer 1.00 1.00 1.00 City Manager 1.00 1.00 1.00 Deputy City Manager - 2.00 Executive Assistant to the City Manager 1.00 1.00 1.00 Management Analyst Manager Communications 1.00 1.00 Manager Economic Development 1.00 1.00 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 1.00 - Total Positions 11.00 10.00 10.00 10.00 2.00 1.00 1.00 1.00 2.00 FY 2019 Change FTE - % FY 2019 Salary 90,730 83,323 77,096 302,235 201,136 182,098 313,477 403,853 1.00 102,648 0.75 0.75 1.00 1.00 - 85,800 115,586 11.25 12.00 0.75 1,957,982 0.96 (0.96) 12.21 12.00 (0.21) 1,957,982 192 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY MANAGER 3udget Reconciliation Prior Year Budget 12.21 3,683,391 1,585,569 2,097,822 Base Adjustments One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) 7,699 7,699 Sustainability Initiatives Contract Funding (0.96) (110,000) (110,000) One -Time Prior Year Budget Adjustments (0.96) (102,301) — (102,301) Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments 111,822 — 111,822 Know Your Neighbor Grant Funding (CMR #7176), (25,000) (25,000) approved on August 22, 2016 (Transfer to CSD) General Fund Cost Allocation Plan (132,621) 132,621 General Liability Insurance Allocated Charges — 8,081 — 8,081 Information Technology Department Allocated (16,011) (16,011) Charges Print and Mail Allocated Charges 3,455 General Liability Savings (one-time FY 2019 — (5,755) — savings) Workers' Compensation Savings (one-time FY 2019 savings) Adjustments to Costs of Ongoing Activities (16,998) 59,594 (132,621) 3,455 (5,755) (16,998) 192,215 Total FY 2019 Base Budget 12.21 3,640,684 11,452,948 2,187,736 Budget Adjustments 1 Federal Transit Administration Grant 2 Supplemental Pension Trust Fund Contribution 3 City Manger's Office of Sustainability Transition Total Budget Adjustments 780,000 780,000 29,959 0.75 (32,787) 0.75 777,172 780,000 29,959 (32,787) (2,828) Total FY 2019 Adopted Budget 12.96 4,417,856 2,232,948 2,184,908 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 193 CITY MANAGER 3udget Adjustments 1 Federal Transit Administration Grant 0.00 780,000 This action recognizes anticipated grant funding from the Federal Transit Administration for a research project in collaboration with local agencies and two 'Mobility as a Service' providers to evaluate approaches to reducing single occupancy vehicle trips. The contractual agreements will be brought to City Council approval on a rolling basis once they are ready for review. This research grant will inform 'Mobility as a Service' options to improve traffic congestion and explore potential commute options. Performance Results 0 This grant will contribute to the City's sustainability goals. 2 Supplemental Pension Trust Fund Contribution 29,959 29,959 This action transfers $29,959 from the City Manager's Office to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the City Manager's Office's annual pension contribution. Contributing to the Pension Trust Fund will further 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 194 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY MANAGER 3udget Adjustments Budget Adjustment; Net Positions Expenditures Revenues General Fund Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NFL). 3 City Manger's Office of Sustainability Transition 7IV 0.75 • (32,787) mmil 0 (32,787) This action realizes $220,000 in ongoing savings in the City Manager's Office of Sustainability to align with anticipated needs for FY 2019 and beyond. With the City Council approval of the Sustainability & Climate Action Plan (S/CAP) and Sustainability Implementation Plans (SIPs), it is anticipated that the Office of Sustainability will shift away from the current staffing model. It is recommended that the SIP goals and initiatives be matriculated into the routine business processes and various City initiatives throughout the organization. This diffused implementation will uphold the goals of the Office of Sustainability and the Sustainability Action Plan as part of the core values within the organization. This reduction recognizes this transition through anticipated savings from the Chief Sustainability Officer position. Remaining resources associated with this position will be evaluated through FY 2019 and a recommendation will be brought forward for City Council consideration in the future. (Ongoing savings: $145,000). Performance Results © © 0 This action will give the Office of Sustainability flexibility to most effectively implement sustainability programs and initiatives, including the Sustainability/Climate Action Plan. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 195 CITY OF PALO ALTO 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 Ser- vices Department is to provide excellent customer service to decision -makers, the public, employees, and City departments; provide analytical, organizational, and administrative support for a wide variety of projects; record, monitor, and pro- tect City assets in a responsible manner; provide essential financial manage- ment and forecasting reports; and prepare and present financial reporting to various committees and City Council. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 197 ADMINISTRATIVE SERVICES ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER Lalo Perez ADMINISTRATION 1.00 Administrative Assistant 0.50 Senior Management Analyst REAL ESTATE 1.00 Real Property Manager 1.00 Senior Management Analyst 1.00 Assistant Director ACCOUNTING 1.00 Finance Manager GENERAL LEDGER 1.00 Senior Accountant 1.00 Accountant 1.00 Lead Account Specialist ENTERPRISE FUND 1.00 Senior Accountant 1.00 Accountant 1.00 Accountant 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 Senior Buyer SAP FUNCTIONAL 1.00 Principal Business Analyst 2.00 Senior Business Analyst OFFICE OF MANAGEMENT AND BUDGET 100 Director 2.00 Budget Manager 1.00 Administrative Associate III 2.00 Senior Management Analyst 1.00 Management Analyst 1.00 Assistant Director INVESTMENT & DEBT 0.60 Manager of Treasury, Debt Investment 0.40 Senior Management Analyst REVENUE COLLECTIONS 1.00 Manager of Revenue Collections 2.00 Lead Account Specialist 5.50 Account Specialist STORES WAREHOUSE 1.00 Warehouse Supervisor 1.00 Lead Storekeeper 3.00 Storekeeper RISK MANAGEMENT 0.40 Manager of Treasury, Debt & Investment 0.10 Senior Management Analyst PRINT & MAIL SERVICES 2.00 Offset Equipment Operator FY 2019 POSITION TOTALS 58.50 Full -Time 1.46 Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation 198 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 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 Facilitates negotiations, purchasing and contracting needs in a timely, efficient, and customer - oriented manner. OFFICE OF MANAGEMENT AND BUDGET (OMB) Oversees the citywide budget preparation, review and analysis, performance measures, and budget monitoring. In addition, prepare the long range financial forecast. PROPERTY MANAGEMENT AND ACQUISITION Provides asset management, acquires property rights, manages leasing of city properties, pre- pares real estate agreements, completes easement acquisition/vacation, negotiates real estate deals and provides real estate services citywide. TREASURY Collects, safeguards, forecasts, and invests revenue; issues and manages debt; and provides print shop and warehouse services. Warehouse services include handling logistics for the City's Electric, Water, Gas, and Wastewater Utilities, as well as for Public Works and the Water Quality Control Plant. 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 $4.0 million. ▪ Issued an RFP for 40,000 square feet of space at Cubberley and successfully rented all the vacant spaces as a result of the Foothill College departure. ▪ Executed 12 office space leases, 63 hangars and 468 tie -downs spots including club tie - downs. The projected annual revenue from the Airport real estate assets is $2.1 million. • Identified and replaced expired lease at 285 Hamilton second floor space for Development Services Department with a new lease for an office suite negotiated at below market rate. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 199 ADMINISTRATIVE SERVICES • Implemented online self -paced training platform and expanded upon the application of eProcurement capability (PlanetBids). ▪ 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 calculate the long-term unfunded liabilities for pension based on updated assumptions. In addition, the Pension Section 115 Trust will have approximately $5 million in deposits by end of FY 2018. • Completed 20 easements and easement vacations. ▪ Completed the transition to a paper -free workflow in Purchasing and continued to expand scanning and electronic archiving in ASD and other City departments. ▪ Continued to uphold the City's policy effort in using recycled paper. Consolidated bulk of paper and toner costs 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 an award in the Accounting Division for the Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2017 from the Government Finance Officer Associations of United States and Canada (GFOA) for "excellence in financial reporting'. ▪ Issued the 2018 Golf Course Certificate of Participation (COP) bonds to reimburse the General Fund Infrastructure Reserve for a full golf course renovation, practice area, and driving range expansion. The par issuance size is approximately $8 million. • Received CSMFO and GFOA awards in the Office of Management and Budget (OMB) for the FY 2018 Adopted CIP and Operating budgets. ▪ Increased P -card activity along with the bank card rebate revenue in Purchasing. 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. • Reduce paper and office supply consumption of the City and generate operational efficiency by implementing a citywide Multi -functional Printer and Managed Print Services networked program (MFP/MPS) along with an Electronic Document Management System (EDMS). • Maintain employee excellence by focusing on employee rating form, training plans, and specific goals improving customer service and responsiveness. 200 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES • Continue implementing 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. ▪ Implement new procurement process improvement recommendations, including the new eProcurement system for managing solicitations and vendor relations and contract management. • 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 such as identifying funding sources and investment options for Council to consider. ▪ Continue to build out the financial support for emergency preparation for federal financial reporting after a disaster in conjunction with the Office of Emergency Services. ▪ Continue implementation of the paperless office program for the Accounting and Real Estate divisions. ▪ Develop best practices for accounts payable Automated Clearing House (ACH) implementation and Treasury wires. ▪ Prepare business blueprint and identify business process improvement for the next generation Enterprise Resource Planning (ERP) System. ▪ Support sound environmental, social, and governance investing. Over $9 million in the City's portfolio has been invested in highly rated municipal "green" or clean renewable energy bonds; these bonds funded photovoltaic energy systems installation, mass transportation including electrification of trains, and clean water projects. The City has also suspended new investments in the Tennessee Valley Authority (TVA) over concern for their use of fossil fuels. • Support the citywide effort to replace aging enterprise resource planning system and implement a new system. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 201 ADMINISTRATIVE SERVICES 3udget Summary FY 2016 Actuals Dollars by Fund General Fund -Operating 7,497,404 7,378,820 7,982,836 8,028,509 45,673 Printing &Mailing Services Fund 1,289,499 1,364,905 1,453,146 1,481,584 28,437 Total 8,786,902 8,743,725 9,435,982 9,510,092 74,110 Revenues Charges for Services 28,124 4,647 12,570 12,570 —% Charges to Other Funds 5,248,028 3,742,337 4,454,246 3,335,030 (1,119,217) (25.1)% Net Sales 300 Other Revenue 264,307 144,894 161,500 171,400 9,900 6.1% Property Taxes 3,720 — — — —% Return on Investments (1,441) (140) 400 400 — —% Total Revenues 5,543,038 3,891,737 4,628,716 3,519,400 (1,109,317) (24.0)% FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 0.6% 2.0% 0.8% -% Positions by Fund General Fund 41.04 41.50 40.06 39.61 (0.45) (1.12)% Printing and Mailing Services 1.62 2.10 2.10 2.10 —% Total 42.66 43.60 42.16 41.71 (0.45) (1.07)% 202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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. • Look for opportunities to improve financial reporting as part of the new Enterprise Resource Planning (ERP) system. 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. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 203 ADMINISTRATIVE SERVICES ▪ Invest in green and sustainable bonds, when available and appropriate. 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 FY 2019 Estimated Adopted Annual percentage yield on investments Description Purpose Status 1.82% 1.82% 2.05% 2.05% 2.15% 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 rising interest rate environment, the City's adopted goal of 2.15% is estimated to be achieved in FY 2019. In comparison, as of January 2018, the State Investment Pool average yield is 1.16%. 204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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 Average time from receipt of a Purchase Requisition to issuance of Purchase Order (Days) Description Purpose Status Workload V FY 2016 Actuals 15.00 FY 2017 Actuals 22.00 FY 2018 Adopted 23.00 FY 2018 Estimated 22.00 FY 2019 Adopted 22.00 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. Additionally, to date Purchasing is still working with City stakeholders to onboard technology for process improvements that will further reduce turnaround times on PR and PO processing. Until then little change or improvement is realized beyond what has been achieved over the last year. 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 2016 Actuals 20,349 3,496 FY 2017 Actuals 19,087 2,400 $539.70 $532.10 FY 2018 Adopted 19,000 2,300 FY 2018 Estimated 19,100 2,624 FY 2019 Adopted 19,100 2,400 $532.00 $532.00 $540.00 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 205 ADMINISTRATIVE SERVICES 3udget Summary FY 2016 Actuals Dollars by Division Accounting 2,031,310 2,043,348 2,273,096 2,313,999 40,903 Administration 797,339 700,131 452,517 502,573 50,055 Office of Management and Budget 1,154,119 1,019,241 1,559,404 1,427,663 (131,742) Purchasing 1,543,130 1,439,096 1,503,022 1,609,770 106,748 Real Estate 556,027 862,337 641,373 651,916 10,543 Treasury 1,415,478 1,314,666 1,553,424 1,522,588 (30,836) Total 7,497,404 7,378,820 7,982,836 8,028,509 45,673 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1.8% 11.1% (8.4)% 7.1% 1.6% (2.0)% 0.6% Dollars by Category Salary & Benefits Healthcare 566,126 613,176 729,465 720,469 (8,996) (1.2)% Other Benefits 177,754 121,110 164,266 163,209 (1,057) (0.6)% Overtime 45,516 21,488 33,723 34,599 877 2.6% Pension 979,873 1,019,697 1,238,194 1,266,442 28,248 2.3% Retiree Medical 490,474 536,733 564,670 473,449 (91,221) (16.2)% Salary 4,120,344 3,841,677 4,212,658 4,257,849 45,190 1.1% Workers' Compensation 13,346 20,338 150,294 108,269 (42,025) (28.0)% Total Salary & Benefits 6,393,433 6,174,219 7,093,269 7,024,287 (68,983) (1.0)% Allocated Charges 451,507 364,415 367,541 443,050 75,510 20.5% Contract Services 395,562 323,681 255,648 238,148 (17,500) (6.8)% Facilities & Equipment 10,071 270,979 4,200 4,200 - -% General Expense 199,071 198,066 214,924 206,924 (8,000) (3.7)% Operating Transfers -Out - 65,146 65,146 -% Rents & Leases 12,363 11,856 12,856 12,856 -% Supplies & Material 35,396 35,602 34,398 33,898 (500) (1.5)% Total Dollars by Expense Category 7,497,404 7,378,820 7,982,836 8,028,509 45,673 0.6% Revenues Charges for Services 28,124 4,647 12,570 12,570 - -% Charges to Other Funds 3,952,406 2,403,540 3,001,500 1,768,909 (1,232,591) (41.1)% Net Sales 300 -% 206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Summary Other Revenue Property Taxes Total Revenues FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget 264,307 142,894 161,500 3,720 - - FY 2019 Adopted Budget 171,400 FY 2019 Change $ 9,900 FY 2019 Change % 6.1% -% 4,248,857 2,551,080 3,175,570 1,952,879 (1,222,691) (38.5)% Positions by Division Accounting 12.90 13.60 13.60 13.52 (0.08) (0.59)% Administration 1.60 2.08 1.60 1.60 -% Office of Management and Budget 6.62 6.02 6.62 6.02 (0.60) (9.06)% Purchasing 9.35 9.53 8.57 9.05 0.48 5.60% Real Estate 2.80 2.32 2.32 2.32 - -% Treasury 7.77 7.95 7.35 7.10 (0.25) (3.40)% Total 41.04 41.50 40.06 39.61 (0.45) (1.12)% Staffing Job Classification Account Specialist Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate III Assistant Director Administrative Services FY 2016 Actuals 4.95 4.59 3.00 1.00 FY 2017 Actuals 5.88 4.05 3.00 1.00 1.00 1.00 FY 2018 Adopted Budget 4.88 3.05 3.00 1.00 1.00 1.00 FY 2019 Adopted Budget 4.63 3.45 3.00 1.00 1.00 1.00 FY 2019 Change FTE FY 2019 Salary (0.25) 335,681 0.40 267,749 278,741 90,730 77,734 83,323 1.75 1.65 1.65 1.65 - 330,564 Buyer 2.00 1.00 1.00 1.00 - 102,344 Chief Procurement Officer 1.00 1.00 1.00 1.00 148,512 Contracts Administrator 1.70 1.70 2.70 2.70 293,232 Director Administrative Services/ 0.70 0.80 0.80 0.80 - 199,845 CFO Director Office of Management and Budget Management Analyst Manager Accounting 1.00 1.00 1.00 1.00 187,614 1.00 1.00 1.00 1.00 105,000 1.00 - (1.00) ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 207 ADMINISTRATIVE SERVICES Staffing Job Classification Manager Budget Manager Real Property Manager Revenue Collections Manager Treasury, Debt & Investments Manager, Finance FY 2016 Actuals 1.00 1.00 0.70 FY 2017 Actuals 1.00 1.00 0.62 1.00 0.60 FY 2018 Adopted Budget 1.00 1.00 0.62 FY 2019 Adopted Budget 2.00 1.00 0.62 0.60 0.60 FY 2019 Change FTE 1.00 FY 2019 Salary 301,309 151,133 91,484 86,362 1.00 1.00 145,476 Payroll Analyst 2.00 2.00 2.00 2.00 - 172,927 Senior Accountant 3.00 3.00 3.00 3.00 - 352,560 Senior Buyer - 1.00 1.00 1.00 - 103,384 Senior Management Analyst 4.20 4.90 4.90 2.30 (2.60) 306,505 Storekeeper 1.00 1.00 1.00 75,472 Storekeeper -Lead 1.00 0.20 0.20 0.20 16,154 Warehouse Supervisor 0.50 0.20 0.20 0.20 - 17,767 Sub -total: Full -Time Equivalent 38.09 38.60 38.60 38.15 (0.45) 4,321,602 Positions Temporary/Hourly 2.95 2.90 1.46 1.46 98,375 Total Positions 41.04 41.50 40.06 39.61 (0.45) 4,419,977 208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 40.06 7,982,836 One -Time Prior Year Budget Adjustments 3,175,570 4,807,266 Information Technology Department Allocation (One-time FY 2016 Salary Savings) 17,757 17,757 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities 17,757 — 17,757 Salary and Benefits Accounting Division Funding Realignment (inadvertent allocation error in prior year) Purchase Card Rebate Increase General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Vehicle Replacement Allocated Charges 0.40 141,226 42,448 (12,236) (43,147) 17,179 12,928 (11,131) 51,012 9,900 (1,232,591) 141,226 (9,900) (12,236) (43,147) 1,232,591 17,179 12,928 (11,131) 51,012 Adjustments to Costs of Ongoing Activities 0.40 198,280 (1,222,691) 1,378,523 Total FY 2019 Base Budget 40.46 8,198,873 1,952,879 6,203,546 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Office of Management and Budget Restructure 3 Reduction in Office of Management and Budget Analytical Staffing 4 Elimination of Accounting Division Contractual Staffing 5 Revenue Collections Staffing Funding Realignment 6 Reduction in Administrative Services Department Non -Salary Expenses 65,146 936 (0.60) (140,469) (40,000) (0.25) (30,978) (25,000) 65,146 936 (140,469) (40,000) (30,978) (25,000) Total Budget Adjustments (0.85) (170,365) — (170,365) Total FY 2019 Adopted Budget 39.61 8,028,509 1,952,879 6,033,182 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 209 ADMINISTRATIVE SERVICES sa k ' ,�-+ „. f y 9 \-f,.,-} lib, \.1/, \!.4 \‘AL 3udget Adjustments Revenues Net General Fund 1 Supplemental Pension Trust Fund Contribution 0.00 65,146 This action transfers $65,146 from the Administrative Services Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Administrative Services Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Office of Management and Budget Restructure This action realigns the structure of the Office of Management and Budget (OMB) resulting in funding source realignment and the following position changes: eliminate 2.0 FTE Senior Management Analyst positions and add 1.0 FTE Principal Management Analyst and 1.0 FTE Management Analyst position. The current staffing model for a team of 7.6 FTE full time positions (with 0.60 FTE position reduction included in this budget), requires a high degree of experience for positions with the most typical path for professional advancement to be through opportunities outside of the office, creating a high turnover environment. This action ensures technical and managerial expertise as well as opportunities for advancement within the office through the addition of a Principal Management Analyst and allows for a more journey level entry point to the office through the addition of a Management Analyst. OMB has been piloting this for the last 18 months and has resulted in a more stable team, reducing the turnover, and maintaining the professional analytical support required of the office. This strategic shift of positions ensures OMB can provide citywide analysis that enables data -driven decisions to be made cohesively among departments while creating an embedded succession planning structure. This action results in overall savings across all funds of $37,700. (Ongoing Savings: $39,602 all funds, $1,000 in the General Fund) Performance Results © O The addition of a Budget Manager from a vacant Senior Management Analyst enables the Office of Management and Budget team to help support the City through its Executive Leadership management changes. 210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES 3udget Adjustments ud • et Ad'ustme Positions Net Expenditures Revenues General Fund 3 Reduction in Office of Management and Budget Analytical Staffing -0.60 (140,469) 0 (140,469) This action eliminates a vacant 0.6 FTE Senior Management Analyst in the Office of Management and Budget (OMB). OMB has operated with this position vacant or filled by graduate student fellowship participants for a year as it underwent an internal evaluation and subsequently reorganized. This position historically supported all labor negotiations by providing the financial costing of proposals throughout the process. In coordination with the Human Resources Department, these tasks have been absorbed by the remaining staff in OMB as well as the Employee Relations team in HR. In addition to labor costing, this position provided the capacity for ad hoc special project analytical support to both OMB and ASD for various projects such as representation on the Utilities ROCC Committee, which will be absorbed by the remaining management staff in OMB and ASD. Additional responsibilities, such as the transition of performance measures and the annual SEA from the City Auditor's Office to OMB will require an evaluation of resource needs. (Ongoing Savings: $140,000) Performance Results Reduction in professional analytical capacity in the Office of Management and Budget (OMB) will result in increased cycle time to assist in citywide initiatives outside of the budget process such as labor negotiations and ad hoc special projects. Support on such project will require planning and a reprioritization of resources among annual business needs. However, it will reduce the overall cost of the Office, and cost to analyze, develop, and monitor the annual budget process. 4 Elimination of Accounting Division Contractual Staffing 0.00 (40,000) (40,000) This ongoing action reduces part-time staffing resources in the accounting division of the Administrative Services Department. Contractual funding has been used in recent years to supplement the work of the accounting division and provide additional capacity while the division had a vacant Accounting Manager. As part of the mid -year actions for FY 2018, that Accounting Manager was reclassified to a Finance Manager. It is anticipated that this supplemental contract funding will no longer be necessary as the recruitment for the Finance Manager concludes. (Ongoing Savings: $40,000). Performance Results © O Reduction in this temporary staffing will reduce the overall cost for the accounting division to deliver current services without impacting quality of services and satisfaction of customers. It is anticipated that once fully staffed, performance will remain consistent. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 211 ADMINISTRATIVE SERVICES 5 Revenue Collections Staffing Funding Realignment 3udget Adjustments Positions Expenditures Revenues Net General Fund This action reallocates the staffing in the Revenue Collections team from the General Fund to various Parking Funds. Overall these actions are net -zero across all funds, however it will reflect a 0.25 FTE position reduction in the General Fund. Realignment of staff in the RPP fund is a result of the expansion of this program and increased levels of customer inquiries (front counter and over the phone) and citation collections (including scheduling protests and hearings). (Ongoing savings: $32,335, $0 all funds) Performance Results Realignment of funding is not anticipated to impact performance measure results as it simply reflects where current resources are dedicated. 6 Reduction in Administrative Services Department (25,000) Non -Salary Expenses 0 (25,000) This action reduces $25,000 in various non -salary expenses across the Administrative Services Department to align with anticipated needs for FY 2019. Reductions include a reduction in resources for contractual services typically used for ad hoc analysis such as additional audit services associated with the preparation of the Comprehensive Annual Financial Report (CAFR) as well as expertise for ad hoc financial consulting and other contract services throughout the department. These reductions are anticipated to have minimal impacts on current day-to-day service levels, however, they are anticipated to reduce flexibility for unanticipated initiatives that may arise and require a reprioritization of resources. (Ongoing Savings: $25,000) Performance Results 4 Reduction in professional analytical capacity in contractual services may result in increased cycle time to assist in special projects. 212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES PRINTING AND MAILING SERVICES Accomplishments • Processed 300,000 utility bills. ▪ Maintained timelines for producing Council packets. • In December 2017, the print shop updated their production equipment to offer better color print quality along with a variety of paper size options. Initiatives • Maintain a high level of customer service for Printing and Mailing by listening to their customers and, when appropriate, making relevant changes to their operations. • Provide quality printing products that meet the needs of their customers. • Adopt new technology that improves efficiency for mass print jobs such as utilizing spray technology for envelope addresses. Goals and Objectives GOAL 1 • 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. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 213 ADMINISTRATIVE SERVICES 3udget Summary ill Dollars by Division Printing and Mailing Total FY 2016 Actuals 1,289,499 1,289,499 FY 2017 Actuals 1,364,905 1,364,905 FY 2018 Adopted Budget 1,453,146 1,453,146 FY 2019 Adopted Budget FY 2019 Change $ 1,481,584 28,437 FY 2019 Change % 2.0% 1,481,584 28,437 2.0% Dollars by Category Salary & Benefits Healthcare 32,606 24,790 25,455 27,305 1,850 7.3% Other Benefits 3,742 2,253 3,099 3,135 37 1.2% Overtime 2,832 6,145 - - - -% Pension 26,657 24,003 31,537 31,636 99 0.3% Retiree Medical 54,687 59,845 62,960 14,663 (48,296) (76.7)% Salary 122,022 106,323 132,598 133,571 973 0.7% Workers' Compensation 409 239 4,566 3,289 (1,277) (28.0)% Total Salary & Benefits 242,956 223,597 260,214 213,600 (46,614) (17.9)% Allocated Charges 183,441 177,496 204,255 276,747 72,492 35.5% Contract Services 34,411 10,607 249,642 114,711 (134,931) (54.0)% Facilities & Equipment - 31,711 - - - -% General Expense 347,081 271,603 286,975 286,975 - -% Operating Transfers -Out 3,154 1,598 (1,555) (49.3)% Rents & Leases 376,213 494,718 368,649 507,695 139,046 37.7% Supplies & Material 105,397 155,174 80,258 80,258 -% Total Dollars by Expense 1,289,499 1,364,905 1,453,146 1,481,584 28,437 2.0% Category Revenues Charges to Other Funds 1,295,623 1,338,798 1,452,747 1,566,121 113,374 7.8% Other Revenue 2,000 -% Return on Investments (1,441) (140) 400 400 -% Total Revenues 1,294,182 1,340,657 1,453,147 1,566,521 113,374 7.8% Positions by Division Printing and Mailing 1.62 2.10 2.10 2.10 -% Total 1.62 2.10 2.10 2.10 - -% 214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES Staffing Job Classification FY 2016 Actuals Manager Revenue Collections Offset Equipment Operator Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 0.10 1.52 1.62 1.62 FY 2017 Actuals FY 2018 Adopted Budget 0.10 1.52 0.10 1.52 1.62 1.62 0.48 0.48 2.10 2.10 FY 2019 Adopted Budget 0.10 1.52 1.62 0.48 2.10 FY 2019 Change FTE FY 2019 Salary 14,756 104,944 - 119,699 27,777 - 147,476 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 215 ADMINISTRATIVE SERVICES 3udget Reconciliation Prior Year Budget 2.10 1,453,146 1,453,147 ositions Expenditures Revenues Net Printing and Mailing Services (1) One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Information Technology Department Allocation (FY 2016 Salary Savings; one-time) (3,154) 2,953 (3,154) 2,953 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (201) (201) Salary and Benefits Adjustments Rents & Leases Expenditure Alignment General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Fund Allocated Charges (46,243) (46,242) 4,115 4,115 (372) 66,074 1,461 3,315 113,374 (372) 66,074 1,461 3,315 (113,374) Adjustments to Costs of Ongoing Activities 27,041 113,374 (86,334) 1,566,521 (86,536) Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 1,598 1,598 Total FY 2019 Adopted Budget 2.10 1,481,584 1,566,521 (84,938) 216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ADMINISTRATIVE SERVICES Budget Adjustments 3udget Adjustments Positions Expenditures Revenues Net Printing and Mailing Services 1 Supplemental Pension Trust Fund Contribution This action transfers $1,598 from the Print & Mailing Services Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Print and Mailing Services Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 217 CITY OF PALO ALTO Mission Statement COMMUNITY SERVICES 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 com- munity. Community Services aims to develop and provide programs for increased knowledge, creativity, artistic expression, physi- cal 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 Cubberley, Mitchell Park and Lucie Stern, and the Palo Alto Public Art collection; seeks to provide comfortable, safe, and attractive facilities; strives for sustainable practices that lower the City's carbon footprint; and develops and maintains mutually benefi- cial partnerships and collaborations with local organizations, businesses, indi- viduals and foundations to achieve its mission. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 219 COMMUNITY SERVICES COMMUNITY SERVICES DIRECTOR Monique le Conge Ziesenhenne (Interim) HUMAN SERVICES 1.00 Human Services Manager 1.00 Management Assistant ADMINISTRATION 1.00 Chief Operating Officer / Assistant Director 1 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 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 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 2019 POSITION TOTALS 78.60 - Full-time 50.56 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary table summarizes FTEs by position allocation. 220 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 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, dance, and science programs to youth and adults, with a focus on family programs. The division manages the Art Center, Junior Museum and Zoo (JMZ), 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, a teen center, 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 after -school child care program, the Palo Alto Mediation Program, the Family Resources data base, and serves as a key liaison to local social services organizations and child care providers. Accomplishments • Golf Course Reconfiguration Project was completed, featuring an improved 18 -hole links - style course, putting green and scenic views of the Baylands. The renovated course uses significantly less water due to the use of more native and salt tolerant vegetation and a 40% reduction in irrigated turf grass. The course was reopened under a new management contract in spring 2018. • Council adopted the Parks, Trails, Natural Open Space and Recreation Master Plan in September 2017. ▪ The Buckeye Creek Hydrology Study was completed, providing recommendations to reduce erosion, sediment deposition, and flooding of parkland located in the northern boundary of Foothills Park. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 221 COMMUNITY SERVICES • The Rinconada pool season expanded through the end of October. ▪ Hosted special events that drew over 25,000 people including: Cubberley Day, May Fete Parade, July 4th Chili Cook -off, Summer Twilight Concert Series, Holiday Tree Lighting and Senior New Year's Eve Brunch. Co -hosted a community health fair with the YMCA; hosted the 2nd annual Teen Buoyancy Festival; and introduced a new event, the October Harvest Festival at Lucie Stern Community Center. ▪ ThinkFund (formerly Bryant Street Garage Fund) funded 20 teen inspired and led projects totaling $23,000 and serving over 1,500 teens. ▪ Continued to offer numerous Teen Leadership Programs including: Art Center's Teen Leadership Program; ClickPA; Learning Enrichment Afterschool Program (LEAP); MakeX; Palo Alto Youth Council; Teen Advisory Board, and the Teen Arts Council. ▪ Human Services: Provided $960,000 in financial support for senior services and childcare subsidies; $500,000 in human service grants awarded to 16 agencies; hosted four community forums on Implicit Bias called "Being Different Together", which was attended by 275 community members; and developed a three-year strategic plan for Project Safety Net and its over 50 partner organizations. • Arts & Sciences: Art Center served a record 130,000 people through a diverse range of programs with the support of over 800 active volunteers that contributed over 8,000 hours of time and support. Opened a printmaking studio at Cubberley Community Center, which was made possible by a gift from the Kirkeby family. Received three Awards for Best Public Art from the Americans for the Arts. ▪ Children's Theatre: 2017 was an exceptional year with a record breaking 52,000 attendees. Children's Theatre offers free tickets for under -served families and Ronald McDonald House residents. • Children's Theatre added a Summer Teen Academy and Design Tech Camps allowing teens to gain professional -level training in performance and production design. ▪ The City formalized its agreement with the Friends of the JMZ to begin construction of a new Junior Museum and Zoo (JMZ) after the Friends made a donation of $25 million. The new JMZ is expected to open in summer 2020. The JMZ will temporarily relocate to Cubberley Community Center Auditorium during construction. • JMZ hosted more than 184,000 visitors and reached 19,000 elementary school students through school program and field trips. • A new dog park was built at Peers Park in summer 2018. Initiatives • The Baylands Comprehensive Conservation Plan will be completed in FY 2019 to provide guidance and best practices for managing the habitat, wildlife, and recreational uses at the Baylands Nature Preserve. Conservation plans for Foothills Park, Pearson Arastradero Preserve and Esther Clark Park will begin in FY 2018 to provide management guidance for these open space preserves. 222 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES ▪ Community Services will explore funding strategies for implementation of the Parks, Trails, Natural Open Space and Recreation Master Plan. ▪ The Parks, Open Space and Golf Division will begin evaluating best future uses of the Baylands 10.5 acres with community input. ▪ Staff will work with a design consultant on 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 Arts and Sciences Division is working on two major initiatives: a strategic plan for the division and an assessment and implementation plan for the Stern Theatre. • 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, 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 facility will begin, in partnership with the Friends of the JMZ who raised $25 million, and is expected to re -open in FY 2020. ▪ Cubberley Artist Studio Program (CASP) has many programs planned for the year, including open studios and hands-on workshops at Cubberley Community Day. ▪ In FY 2019 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. Goals and Objectives GOAL 1 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. • 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. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 223 COMMUNITY SERVICES Objectives: • Increase and diversify community involvement and volunteerism. • Monitor cost recovery to facilitate sustainability of programs and services with a goal to maintain or increase cost recovery levels. • Explore partnerships with other agencies to maximize services for the public. Key Performance Measures COMMUNITY SERVICES DEPARTMENT ONLINE REGISTRATION AND EFFICIENCY Goal Objective Percent of class registrations occurring online Description Purpose Status Provide innovative, well -managed programs and services. Increase online class registration. FY 2016 Actuals 51.00% FY 2017 Actuals 62.00% FY 2018 Adopted 60.00% FY 2018 Estimated 60.00% FY 2019 Adopted This measure tracks the utilization rate of online class registration service available. Increase staff productivity and capacity. Currently, online class registration is the preferred method of registration. COMMUNITY SERVICES DEPARTMENT OPEN SPACE AND PARKS Goal Objective Percent of surveyed who rate the City's success in preserving natural areas as "Good" or "Excellent" Description Purpose Status 60.00% Ensure parks and recreational areas are safe and environmentally sensitive. Protect public land and utilize best management practices for environmental preservation. FY 2016 Actuals 78.00% FY 2017 Actuals 82.00% FY 2018 Adopted 81.00% FY 2018 Estimated 81.00% FY 2019 Adopted 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 7th out of 246 jurisdictions in the 2017 NCS for preservation of natural areas such as open space and green belts. 224 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES COMMUNITY SERVICES DEPARTMENT PROGRAMS AND SERVICES Goal Objective Percent of surveyed who rate recreation programs/classes as "Good" or "Excellent" Description Purpose Status Workload V 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 2016 Actuals 84.00% FY 2017 Actuals 87.00% FY 2018 Adopted 88.00% FY 2018 Estimated 88.00% FY 2019 Adopted 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 higher than other cities in the survey benchmark (average ratings in all other cities). Residents' ratings ranked Palo Alto 44th of 315 jurisdictions in the 2017 NCS. 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 FY 2016 Actuals 14,494 FY 2017 Actuals 14,213 FY 2018 Adopted 15,500 FY 2018 Estimated 15,500 FY 2019 Adopted 15,500 23 18 22 22 22 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 225 COMMUNITY SERVICES 3udget Summary Dollars by Division Administration and Human Services FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 3,938,106 4,172,215 3,987,583 4,213,867 226,284 FY 2019 Change % 5.7% Arts and Sciences 5,440,712 5,759,602 6,213,537 6,366,554 153,017 2.5% Open Space, Parks and Golf 9,004,816 8,942,719 10,479,195 11,775,381 1,296,187 12.4% Recreation and Cubberley 5,894,212 6,332,283 6,886,620 6,668,795 (217,825) (3.2)% Total 24,277,846 25,206,818 27,566,935 29,024,597 1,457,662 5.3% Dollars by Category Salary & Benefits Healthcare 1,484,629 1,796,045 1,851,818 1,891,933 40,115 2.2% Other Benefits 229,568 201,464 259,224 255,421 (3,802) (1.5)% Overtime 178,845 200,984 101,795 104,441 2,647 2.6% Pension 1,555,993 1,849,667 1,986,661 2,056,481 69,820 3.5% Retiree Medical 867,301 949,102 998,502 909,816 (88,685) (8.9)% Salary 8,036,627 8,717,180 9,289,484 8,970,057 (319,428) (3.4)% Workers' Compensation 90,352 57,906 333,881 240,516 (93,365) (28.0)% Total Salary & Benefits 12,443,315 13,772,347 14,821,364 14,428,666 (392,698) (2.6)% Allocated Charges 4,451,750 4,660,976 4,765,565 5,207,348 441,783 9.3% Contract Services 4,748,754 4,109,550 5,173,296 7,497,407 2,324,111 44.9% Facilities & Equipment 85,831 39,646 63,700 53,700 (10,000) (15.7)% General Expense 1,822,763 1,903,230 2,000,802 1,027,451 (973,351) (48.6)% Operating Transfers -Out 6,990 6,990 6,990 110,605 103,615 1,482.3% Rents&Leases 24,176 11,930 25,505 25,505 -% Supplies & Material 694,268 702,148 709,713 673,916 (35,797) (5.0)% Total Dollars by Expense Category 24,277,846 25,206,818 27,566,935 29,024,597 1,457,662 5.3% Revenues Charges for Services 5,154,476 3,925,023 6,332,884 7,442,125 1,109,241 17.5% Charges to Other Funds 55,513 55,686 59,230 60,715 1,485 2.5% From Other Agencies 52,641 61,545 -% Other Revenue 718,116 682,485 566,220 585,220 19,000 3.4% 226 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES 3udget Summary Other Taxes and Fines Rental Income Total Revenues Positions by Division Administration and Human Services FY 2016 Actuals (5,942) 1,099,522 7,074,326 FY 2017 Actuals 2,521 1,201,908 5,929,168 5.96 5.79 FY 2018 Adopted Budget 1,026 1,049,386 8,008,746 FY 2019 Adopted Budget 1,026 984,997 (64,389) (6.1)% 9,074,082 1,065,336 13.3% FY 2019 Change $ FY 2019 Change % 6.24 6.24 - % - % Arts and Sciences 44.64 45.89 46.28 44.42 (1.86) (4.02)% Open Space, Parks and Golf 31.93 32.87 32.87 30.59 (2.28) (6.94)% Recreation and Cubberley 59.51 59.71 59.65 47.08 (12.57) (21.07)% Total 142.04 144.26 145.04 128.33 (16.71) (11.52)% Staffing Job Classification Administrative Assistant Administrative Associate III Assistant Director Community Services Building Serviceperson FY 2016 Actuals 1.00 1.00 FY 2017 Actuals 1.00 1.00 2.00 2.00 FY 2018 Adopted Budget 1.00 1.00 FY 2019 Adopted Budget 1.00 1.00 FY 2019 Change FTE FY 2019 Salary 90,730 83,323 2.00 2.00 - 364,853 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 6,877 Inspector, Field Services 2.00 2.00 2.00 2.00 - 210,887 Junior Museum & Zoo Educator 2.75 2.75 3.60 3.60 - 290,405 Management Analyst 1.00 1.00 1.00 1.00 - 109,262 Management Assistant 1.00 1.00 1.00 1.00 84,778 Manager Community Services 5.00 5.00 5.00 5.00 484,016 Manager Community Services 4.00 4.00 4.00 4.00 - 475,280 Senior Program Manager Human Services 1.00 1.00 1.00 1.00 - 128,814 1.00 1.00 1.00 2.00 2.00 3.00 1.00 1.00 (1.00) 128,006 137,033 270,565 206,759 157,872 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 227 COMMUNITY SERVICES Staffing Job Classification Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead FY 2016 Actuals 6.00 1.00 5.00 2.00 Producer Arts/Science Program 12.50 Program Assistant I 7.00 Program Assistant II 4.00 Project Manager 0.10 Senior Management Analyst 1.00 Sprinkler System Representative 4.00 Superintendent Community Services Superintendent Recreation 1.00 1.00 1.00 1.00 - 117,790 Theater Specialist 1.00 1.00 2.00 2.00 - 209,239 Sub -total: Full -Time Equivalent 77.42 78.42 78.77 77.77 (1.00) 7,424,066 Positions Temporary/Hourly 64.62 65.84 66.27 50.56 (15.71) 2,521,592 Total Positions 142.04 144.26 145.04 128.33 (16.71) 9,945,658 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 2.00 6.00 1.00 5.00 2.00 12.50 8.00 4.00 0.10 1.00 4.00 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 2.00 2.00 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 460,069 88,906 - 426,908 - 166,874 - 1,045,366 630,932 339,112 11,126 - 137,322 - 311,985 2.00 248,976 228 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES 3udget Reconciliation Prior Year Budget 145.04 27,566,935 8,008,746 19,558,189 Base Adjustments One -Time Prior Year Budget Adjustments Aquatics Program Pilot Open Space, Parks and Golf Division Maintenance Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustment Golf Course Revenue and Expense (CMR #8848, approved by the City Council on April 6, 2018) Know Your Neighbor Grant Program (transfer from City Manager's Office, additional $25,000) Friends of the Palo Alto Children's Theatre (FOPACT) Donation to the Children's Theatre Human Services Resource Allocation Program / Avenidas / PACC (consumer price index) Children's Fine Arts Program and Lucie Stern Community Center Facility Rental Revenues City Facilities and Parks Maintenance Service to Enterprise Funds Allocated Charges General Liability Insurance Allocated Charges General Liability Savings (One-time FY 2019 Savings) Information Technology Allocated Charges Print & Mail Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Savings (One-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities 142,617 80,000 57,819 280,436 312,734 1,122, 533 50,000 45,000 38,227 12,176 (30,138) 75,017 24,815 7,289 254,187 10,480 (95,849) - 1,826,471 1,511,472 45,000 34,000 1,485 1,591,957 142,617 80,000 57,819 280,436 312,734 (388,939) 50,000 38,227 (34,000) (1,485) 12,176 (30,138) 75,017 24,815 7,289 254,187 10,480 (95,849) 234,514 Total FY 2019 Base Budget 145.04 703 20,073,139 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 103,615 103,615 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 229 COMMUNITY SERVICES 3udget Reconciliation 2 Art Center Exhibition Staffing 3 Reduction in Golf Course Part -Time Staffing 4 Reduction in Building Operations and Parks Maintenance Part -Time Staffing 5 Reduction in Community Services Administrative Operations 6 Aquatics Program Adjustments (1.65) 4,548 (0.47) (29,300) (3.27) (147,630) (0.21) (88,240) 4,548 (29,300) (147,630) (88,240) (11.11) (492,238) (526,621) 34,382 Total FY 2019 Budget Adjustments (16.71) (649,245) (526,621) (122,624) Total FY 2019 Adopted Budget 128.33 29,024,597 9,074,082 19,950,515 3udget Adjustments Budget Adjustment, T Positions Expenditures Revenues Net General Fund 1 Supplemental Pension Trust Fund Contribution 0.00 I 103,615 0 103,615 This action transfers $103,615 from the department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 0 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 230 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES 3udget Adjustments 2 Art Center Exhibition Staffing This action restructures the staffing model for the Art Center's exhibition program by eliminating part-time 1.65 FTE Arts & Science Professional positions and adding contract services funding. These positions provide assistance in the set up and removal of art exhibits. The Art Center typically hosts several exhibits annually. The artwork requires careful handling during this process, and the department has struggled to maintain staffing consistently to complete this work. It is anticipated that contract services funding will provide increased flexibility and consistent on -call resources as needed in order to meet the demands. This action is subject to meet and confer, as applicable with appropriate employee groups. (Ongoing costs: $4,548) Performance Results This action will provide more flexibility for the Art Center by enabling staff to bring in qualified contractors to handle exhibit -related tasks on time. 3 Reduction in Golf Course Part -Time Staffing „ (29,300) 0 (29,300) This action eliminates a vacant part-time 0.47 FTE Management Specialist that operated a backhoe to fix water line breaks at the golf course. With the brand new irrigation system, the department does not anticipate needing this type of work going forward. Additionally, in April 2018, the City Council approved contract terms for a service management model with OB Sports. Through this contract all services at the golf course, including management and maintenance, will be addressed by the contractor. This elimination should not have an impact on the service delivery of the golf course and aligns with this new service delivery model. (Ongoing savings: $29,300) Performance Results This adjustment ensures unnecessary golf course operating costs are removed without affecting the customer experience. 4 Reduction in Building Operations and Parks Maintenance Part -Time Staffing (147, 630) 0 (147,630) This action eliminates four part-time Custodial Assistant positions (totaling 1.08 FTE) and two part-time Building Serviceperson positions (totaling 0.38 FTE) and four part-time Parks Maintenance Assistant positions (totaling 1.81 FTE). These positions are assigned to various maintenance and support roles throughout the Open Space, Parks and Golf, and Recreation Services Divisions. The Recreation Services Division has adjusted its service delivery model to rely more on full-time custodial staff rather than utilize all the custodial assistant positions. The reduction in part-time parks maintenance positions will result in reduced capacity to address non -urgent requests for services and increased reliance on parks maintenance contractual staff to address non -urgent maintenance needs. This is the recommended reduction in departmental resources for FY 2019; however, the department will continue to evaluate operations and should these reductions prove detrimental, the department will re-evaluate spending priorities and bring forward alternative adjustments at that time. (Ongoing savings: $147,630) Performance Results Reduction in this temporary staffing will reduce the overall cost for the Recreation Services and Open Space, Parks, and Golf Divisions to deliver current services without impacting the quality of services or satisfaction of customers. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 231 COMMUNITY SERVICES 5 Reduction in Community Services Administrative Operations 3udget Adjustments Positions Net Expenditures Revenues General Fund -0.21 (88,240) 0 (88,240) This action reduces various non -salary and three part-time Recreation Leader positions (totaling 0.21 FTE) expenses across the Department to achieve ongoing savings in operating expenses. Reductions will result in more constrained resources for general administration, including recreation programs administration and housekeeping funds. These reductions do not eliminate available funding for any program. Although they are not anticipated to have significant impact on service delivery, these adjustments will require a prioritization of expenses in the department. This is the recommended reduction in departmental resources for FY 2019; however, the Department will continue to evaluate options and should these reductions prove detrimental, the Department will re-evaluate spending priorities and bring forward alternative adjustments at that time. (Ongoing savings: $88,240) Performance Results No significant implications to the performance of the Community Services Department are anticipated as a result of this reduction other than cost savings to deliver current services without impacting quality of services and satisfaction of customers. 6 Aquatics Program Adjustments -11.11 (492,238) I (526,621) ■ 34,382 This action eliminates vacant 1.0 FTE Recreation Programs Coordinator and 10.11 FTE Swim Instructor/Lifeguard and Recreation Leader part-time positions, as well as program revenues and expenses associated with the Aquatic Program to align with the current service -delivery model. In January 2017, the City began a public -private partnership with Team Sheeper LLC (Team Sheeper) to manage the year-round Learn to Swim program. In June 2017, the City Council approved an amendment to the contract to include operational management of lap and open swim programs, as well as oversight of Rinconada Masters and Palo Alto Stanford Aquatics programs. As a result of this partnership with Team Sheeper, in-house staffing is no longer necessary. (Ongoing net costs: $34,382) Performance Results © © 0 These adjustments enable a more financially feasible and sustainable Aquatics Program that also improves customer experience. 232 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES CSD Golf Course Financials REVENUES Tournament fees Green Fees Monthly play cards Driving range Cart/club rentals Proshop lease Restaurant lease Restaurant Utilities Other Fee FY 2015 Actuals FY 2016 Actuals 212 0 FY 2017 Actuals* FY 2018 Projected** FY 2019 Adopted 40 0 0 859,660 0 0 569,908 2,281,497 59,250 0 0 0 0 292,092 154,322 227,072 217,168 393,588 234,556 0 1,236 0 370,781 24,601 18,000 13,175 10,481 12 44,592 18,000 32,657 2,779 18,000 18,000 16,500 1,877 0 16,116 24,000 4,039 6,697 609,134 12 Total Revenue 1,549,080 232,322 294,719 808,910 3,655,024 EXPENDITURES Operating Expenses Salaries & Benefits 74,978 129,915 111,906 112,653 117,341 Advertising & Publishing 6,473 15,000 1,126 0 0 Supplies and Materials 1,477 10,000 27,008 44,309 0 General Expense 72 1,450 52 1,587,255 2,498,465 Facilities and Equipment Purchases 250 5,000 6,434 7,563 0 Allocated Charges 315,812 157,750 156,748 178,976 237,835 Subtotal 399,061 319,115 303,274 1,930,756 2,853,641 Contract Services ■ Golf Maintenance 807,230 217,896 364,666 0 0 Miscellaneous 38,067 0 49,068 0 0 Range fees 110,995 31,710 195,631 153,686 0 Cart Rentals 88,906 0 0 0 0 Club Rentals 4,804 0 0 0 0 Fixed management fees 349,116 30,500 30,500 83,669 108,000 Contract Contingency 0 4,166 0 5,412 26,044 Subtotal 1,399,118 284,272 639,865 242,767 134,044 Total Operating Expenses 1,798,179 603,387 943,139 2,173,523 2,987,685 Income From Operations (249,099) (371,065) (648,420) (1,364,613) 667,339 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 233 COMMUNITY SERVICES CSD Golf Course Financials FY 2015 FY 2016 Actuals Actuals FY 2017 FY 2018 Actuals* Projected** FY 2019 Adopted Debt Expenses Debt Service (Refunded) Debt Service (New) 428,194 0 430,791 432,150 0 0 432,271 431,154 0 181,794 Subtotal 428,194 430,791 432,150 432,271 612,948 Net Income (Loss) (677,293) (801,856) (1,080,570) (1,796,884) 54,391 * The Golf Course was closed during FY 2017 due to renovation. ** The renovated Golf Course opened in May 2018 under new management. 234 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET COMMUNITY SERVICES CSD Human Service Contracts T Human Services Contracts EXPENDITURE CATEGORY Avenidas - Senior Services PACCC - Child Care Subsidy and Outreach1 Sole Source Contractors Subtotal HUMAN SERVICES RESOURCE ALLOCATION PROCESS2 FY 2018 Adopted FY 2018 Agency Award FY 2019 Base Budget FY 2019 Agency Requests FY 2019 Adopted Budget 477,341 477,341 477,341 477,341 489,274 483,592 483,592 483,592 483,592 495,682 960,933 960,933 960,933 960,933 984,956 Abilities United 44,691 Adolescent Counseling Services (Outlet Program) Community Working Group 0 Counseling and Support Services for Youth (CASSY) Downtown Streets Team 39,972 DreamCatchers 13,609 KARA 8,565 10,250 0 LifeMoves (formerly InnVision Shelter Network) La Comida de California 36,372 MayView Community Health Center 26,990 Momentum for Mental Health 34,724 Palo Alto Housing Corporation 20,001 35,257 Partners & Advocates for Remarkable Children & Adults (PARCA) 0 44,691 10,250 30,000 35,000 74,572 23,609 18,565 35,257 36,372 26,990 44,724 20,001 10,959 44,691 10,250 51,725 45,808 22,183 10,506 30,000 84,000 30,750 35,000 50,000 35,875 74,572 74,572 76,436 23,609 25,000 24,199 18,565 30,000 19,029 35,257 35,000 36,138 36,372 36,533 37,281 26,990 32,000 27,665 44,724 76,932 45,842 20,001 41,600 20,501 10,959 13,000 11,233 Peninsula HealthCare Connection Inc 29,684 29,684 29,684 31,000 Senior Adults Legal Assistance 14,401 14,401 14,401 15,400 14,761 Vista Center for the Blind & Visually Impaired Youth Community Service 21,663 21,663 21,663 30,000 22,205 Two -Year Contractors Subtotal 347,654 503,213 503,213 680,445 515,793 30,426 26,475 27,137 11,475 Amount Yet to Be Allocated3 155,559 0 26,475 31,500 0 0 0 TOTAL 1,464,146 1,464,146 1,464,146 1,641,378 1,500,749 HSRAP Emerging Needs Fund 50,000 0 0 0 50,000 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 235 COMMUNITY SERVICES CSD Human Service Contracts 1. Not part of the Human Services Resource Allocation Process. 2. Human Services Resource Allocation Process (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 Agency Request amounts reflect the request made for each year. 3. Council approved the allocation of remaining $155,559 from the FY 2018 Adopted Budget at the November 7, 2017 meeting. For details, refer to CMR 8581. 4. Funding is displayed as part of the Non -Departmental section of this document. 236 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 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 regulations to ensure the health, safety, and welfare of the public. Purpose The Development Services Department ensures all private construction complies with a set of requirements that specify the minimum standards for construction. The main purpose of Development Services 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 2019 ADOPTED BUDGET 237 DEVELOPMENT SERVICES DEVELOPMENT SERVICES DIRECTOR ADMINISTRATION 1.00 Senior Management Analyst 1.00 Management Analyst 1.00 Administrative Assistant 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 l l 2.00 Development Project Coordinator II PLANNING SERVICES* 5.21 FTE PUBLIC WORKS* 4.69 FTE FIRE INSPECTION* 6.40 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 2019 POSITION TOTALS 20.00 - Full-time 3.50 - Hourly 238 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES Description The Development Services Department is responsible for the following functions: ADMINISTRATION Provides priority setting, strategic planning, personnel, contract, budget, and project manage- ment support; liaises with other departments and outside stakeholders; and manages and mon- itors performance metrics to measure progress. PROJECT COORDINATION Serves as primary point of contact for customers and staff members of subsequent divisions from project inception to completion by providing administration, assembling multi -disciplinary teams, providing early project assistance, project completeness checks, project review, and project approval. BUILDING Protects the public's health, safety, and general welfare by enforcing laws and regulations that govern the design, construction, use, and occupancy of buildings. The building division also pro- vides 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. Follow- ing permit issuance, the building division ensures that construction complies with the approved plans and adopted codes. PLANNING Works collaboratively with City staff, consultants, and external customers to provide a link between the City's entitlement review and building processes. The planning division is also responsible for gathering and analyzing data in support of land use policy; reviewing projects for potential environmental impacts to the City and its residents; and ensuring compliance with the Zoning Ordinance and Comprehensive Plan. 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 of 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 main- tain 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. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 239 DEVELOPMENT SERVICES 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 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 applicable laws. Accomplishments ▪ Launched a new Energy Reach Code demonstrating leadership in the energy efficiency space for new construction. • Received approval from City Council to refer the Seismic Risk Study to Policy and Services Committee to review the scope of structures that are at seismic risk and whether to require mandatory or voluntary retrofit. ▪ Partnered with Utilities department to expedite Electric Hot Water Heat Pump permitting process to advance City's sustainability goals. • Received City Council approval on a new fee study schedule to base building permit fees on the International Code Council Building Valuation Tables instead of the project valuation received from the applicant and implemented a new reserve fund. ▪ Obtained City Council approval for new Electric Vehicle Charging Station ordinance for expedited residential permits in compliance with Assembly Bill 1236 and developed new submittal guidelines for residential permits to comply with ordinance. ▪ Generated Energy Storage Systems permit submittal guidelines for new generation of ion lithium battery back-up power systems, e.g. Tesla Powerwall 2, through a collaborative effort of meetings with the battery power system vendors. • Developed an Electronic Plan Review (EPR) task force to review possible vendors for the selection of EPR software to be used for department and future city-wide submittal of plans electronically thereby reducing paper production and further streamlining the plan review process. • Implemented Right of Way notification system which allows residents to monitor construction activity in city streets. • Launched the automated expired permit notification system in Accela to inform applicants when their building permit expires. ▪ Continued 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 Public Works Department. 240 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES ▪ Continued enforcement of the Green Building and Energy Ordinance reflecting building code changes for the 2019 code cycle. ▪ Finalized Americans with Disabilities Act (ADA) Transition Plan with interdepartmental stakeholders to advance implementation plan. • Completed solicitation for new Green Building Special Inspectors contractors to ensure City's enforcement of ordinances and regulations are resourced adequately. Initiatives • Implement the City's sustainability goals by codifying the Green Building Summit's recommendations into 2019 Building Code cycle update and continue to support the Office of Sustainability with the Sustainability Implementation Plan. ▪ Advance the City's resiliency goals by advancing the seismic risk management study to Policy and Service Committee and collaborate with Office of Emergency Services on emergency preparedness plans related to building safety. • Further budget and administration goals by monitoring the impacts of the Fiscal Year 2018 fee study implementation and continue to provide predictable and timely service to customers by reducing reliance on the General Fund. • Advance the technology and innovation goals by continuing to monitor and advance the performance metrics dashboard; implementing the electronic plan submittal project; and supporting the Right of Way notification system while maintaining ongoing daily system and process enhancements to the department's software system, Accela. • Accelerate transparency and predictability by standardizing customer forms, ensuring website has current materials and is easy to navigate, and evaluating customer queuing and appointment reservation software for the Development Center. ▪ Promote department's operational excellence goal through the matrix management structure by increasing workforce development training focused on soft and technical skills; securing the Insurance Services Office top rating; and updating policy and procedures for financial and operational management. 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 2019 ADOPTED BUDGET 241 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 collaborate with 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. 242 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Average number of days between permit issuance and temporary occupancy or final inspection Description Purpose Status 135.00 161.00 130.00 165.00 148.00 This measure tracks the amount of days 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. This measure is impacted by fluctuations in staffing levels, training of new staff with the City's unique codes and the implementation of additional Green Building and Energy requirements. In Fiscal Year 2017 management predicted a lower number of days for Fiscal Year 2018 due to anticipated implementation of Electronic Plan Check (EPC) and forecasts associated with staffing. However, EPC did not launch and recruitment and retention of staff continue to be a challenge. Based on current data, management is estimating 165 days for Fiscal Year 2018. This is a 4 days increase compared to Fiscal Year 2017. For Fiscal Year 2019 management obtained 148 days using the average from Fiscal Year 2014 through 2017. Management believes aiming toward 150 days or less is an important target for the Department. Additionally, key vacancies have been filled and management anticipates that EPC will be launched in Fiscal Year 2019. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 243 DEVELOPMENT SERVICES INSURANCE SERVICES OFFICE (ISO) RATING Exemplify the City's commitment to well -enforced building codes, health, safety, and general welfare. Goal Objective Insurance Services Office (ISO) Rating Description Purpose Status Obtain and maintain the highest rating (level 1). FY 2016 Actuals 1.00 FY 2017 Actuals 1.00 FY 2018 Adopted 1.00 FY 2018 Estimated 1.00 FY 2019 Adopted 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. Development Services Department currently holds a Class 1 rating. 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. In the first quarter of calendar year 2018, the application for renewal with the ISO was initiated, and at the time of publication of this document, the findings are under review. Development Services Department continues to implement staff training, certifications, public awareness, and outreach programs. 244 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of permits initiated within a given period where all department reviews are completed 77.00% 69.00% 80.00% 70.00% 71.00% Description 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. Purpose 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. Status This performance measure is dependent on Development Services plan review staff and contractors and implementation of process improvement technologies. In FY17 staffing level predictions for FY18 were positive and therefore management projected an increase in plan reviews completed on time. Additionally, management thought that the Electronic Plan Check (EPC) project would be implemented. As the Department looks to FY19, given the turnover in staff and contactors as well as the delayed roll out of EPC, management is realigning the projection. DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 245 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 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of permits that are reviewed and approved by all necessary departments over-the- counter. Description Purpose Status Workload V 65.00% 61.00% 69.00% 64.00% 64.00% This measure tracks the percentage of building permits that can be successfully reviewed and approved by all the affected City departments (over-the-counter) 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. While the Department continues to make improvements, the ability to issue permits over-the-counter is a function of every division and supporting department being able to review and approve (with or without corrections). Maintaining staffing levels continues to impact the ability to improve this measure. Until departments come to full staffing, Development Services anticipates slower progress in the ability to process permits OTC. ensures FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of building permit applications Number of building permits issued Number of Fire permit inspections Number of building inspections Number of walk-in customer interactions 3,978 3,709 3,600 3,934 3,895 3,137 2,970 3,100 3,004 3,394 2,815 2,873 2,500 2,424 2,179 31,158 25,206 29,550 30,606 28,182 23,457 22,107 21,860 21,402 22,782 246 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES 3udget Summary il Dollars by Division Administration Building Fire GIS Green Building Planning Public Works Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 2,398,193 2,122,416 2,593,471 3,003,908 410,436 15.8% 4,513,057 5,013,066 5,524,855 5,036,724 (488,131) (8.8)% 1,935,955 2,103,697 2,196,300 2,295,830 99,530 4.5% (2,029) - - - - -% 346,302 398,807 304,000 304,000 -% 616,486 673,351 758,018 761,947 3,929 0.5% 856,944 702,207 1,162,966 1,227,354 64,388 5.5% 10, 664, 909 11, 013, 544 12, 539, 610 12, 629, 763 90,152 0.7% Dollars by Category Salary & Benefits Healthcare 525,922 617,830 723,352 731,326 7,974 1.1% Other Benefits 90,467 94,323 114,257 118,953 4,696 4.1% Overtime 317,769 301,415 47,500 48,735 1,235 2.6% Pension 1,004,236 1,161,183 1,273,390 1,365,879 92,489 7.3% Retiree Medical 353,758 387,121 407,271 316,495 (90,775) (22.3)% Salary 3,299,985 3,654,628 4,293,217 4,478,246 185,029 4.3% Workers' Compensation 398 1,666 142,533 102,678 (39,855) (28.0)% Total Salary & Benefits 5,592,534 6,218,166 7,001,520 7,162,313 160,793 2.3% Allocated Charges 813,783 824,903 1,014,339 1,310,208 295,870 29.2% Contract Services 2,812,040 2,779,956 2,989,039 2,439,039 (550,000) (18.4)% Facilities & Equipment 28,638 3,269 3,800 3,800 - -% General Expense 353,934 255,136 419,210 410,740 (8,470) (2.0)% Operating Transfers -Out 68,313 68,313 -% Rents & Leases 1,028,212 905,229 1,081,577 1,205,224 123,647 11.4% Supplies&Material 35,768 26,885 30,126 30,126 -% Total Dollars by Expense Category 10, 664, 909 11, 013, 544 12, 539, 610 12, 629, 763 90,152 0.7% Revenues Charges for Services 6,339,627 6,359,213 7,498,861 7,538,797 39,936 0.5% Charges to Other Funds 43,567 126,868 21,797 21,797 -% DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 247 DEVELOPMENT SERVICES 3udget Summary Other Revenue Other Taxes and Fines Permits and Licenses Utility Users Tax Total Revenues FY 2016 Actuals FY 2017 Actuals 1,636 1,597 8,500 7,500 4,247 5,247 1,000 23.5% 6,222,505 5,399,230 6,896,341 6,917,514 21,173 0.3% 2 - - - -% 12,615,834 11,894,410 14,421,246 14,483,355 62,109 0.4% FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Positions by Division Administration Building Fire Planning Public Works Total Staffing Job Classification Administrative Assistant Administrative Associate II Administrative Associate Ill 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 4.25 5.21 5.21 5.26 0.05 0.96% 18.17 17.21 17.81 17.28 (0.53) (2.98) % 9.23 7.08 7.08 6.88 (0.20) (2.82)% 5.69 5.69 5.09 5.09 5.36 4.72 4.81 5.50 0.69 14.35% 42.70 39.91 40.00 40.01 0.01 0.03% FY 2016 Actuals 1.00 3.02 1.01 1.00 0.02 0.16 0.90 4.00 1.80 1.00 0.20 0.40 0.20 0.85 2.00 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget 1.00 1.00 1.00 3.00 3.00 2.80 1.00 1.00 1.00 1.00 1.00 1.00 FY 2019 Change FTE -% FY 2019 Salary 80,870 (0.20) 211,450 83,323 119,413 0.02 0.02 0.02 2,321 0.90 0.90 1.02 0.12 110,276 4.00 4.00 4.00 466,150 2.30 2.30 2.30 - 201,670 1.00 1.00 1.00 170,830 0.01 0.01 1,542 0.40 0.40 0.40 41,941 0.20 0.20 0.20 - 22,440 0.80 0.80 0.80 - 154,220 2.00 2.00 2.00 - 190,600 248 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES Staffing Job Classification Development Project Coordinator III FY 2016 Actuals 3.00 FY 2017 Actuals 3.00 Development Services Director 1.00 1.00 Engineer 0.62 0.64 Engineering Technician III 2.10 1.78 Fire Fighter 1.00 Fire Inspector 4.00 3.20 3.20 3.20 Hazardous Materials Inspector 1.90 1.60 1.60 1.60 Industrial Waste Inspector 0.01 0.01 0.01 0.01 Industrial Waste Investigator 0.21 0.35 0.35 0.35 Inspector, Field Services 0.70 0.68 0.68 0.68 Landscape Architect Park Planner 0.50 0.50 Management Analyst 1.01 1.01 1.01 1.01 Manager Development Center 1.00 1.00 1.00 1.00 Manager Environmental Control 0.10 0.10 0.10 0.10 11,251 Program Manager Planning 2.00 2.00 2.00 2.00 278,034 Manager Urban Forestry 0.04 0.04 0.04 0.04 - 5,821 Manager Watershed Protection 0.05 - - - - - Planner 0.25 0.17 0.17 0.15 (0.02) 16,889 Planning Arborist 0.25 0.25 0.29 - (0.29) Principal Planner 0.01 0.01 1,193 Project Engineer 0.13 0.03 0.03 0.03 4,219 Project Manager 0.07 0.07 - - - - Senior Engineer 0.68 0.46 0.46 0.46 - 72,915 Senior Industrial Waste Investigator 0.01 0.01 0.01 0.01 - 1,160 Senior Management Analyst 1.00 1.00 1.00 1.00 146,390 Senior Planner 0.36 0.24 0.24 0.12 (0.12) 16,023 Supervisor Inspection and 0.27 0.27 0.27 0.27 - 33,881 Surveying Sub -total: Full -Time Equivalent 39.32 36.53 36.50 36.51 0.01 4,413,705 Positions Temporary/Hourly 3.38 3.38 3.50 3.50 226,496 Total Positions 42.70 39.91 40.00 40.01 0.01 4,640,201 FY 2018 Adopted Budget 3.00 FY 2019 Adopted Budget 3.00 FY 2019 Change FTE FY 2019 Salary 315,252 1.00 0.64 1.78 1.00 0.64 1.78 216,969 83,632 173,926 518,835 259,418 966 37,980 71,702 58,947 102,026 129,230 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 249 DEVELOPMENT SERVICES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 40.00 12,539,610 14,421,246 (1,881,636) One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Rents & Leases Expenditure (New office space lease at 526 Bryant St) Fire Division Technical Adjustments (Phone service expenses; fire permit and penality revenues) Fee Revenue for Private Development Right of Way Software App Maintenance Custodial Contract Funding (Removal of old custodial contract funding) Permitting System Technical Support Contract Reallocation (Transfer to Information Technology Department) Expenditure Alignment with Revenues (Reduction in contract services funding) General Liability Insurance Allocated Charges General Liability Savings (One-time FY 2019 Savings) Information Technology Allocated Charges Print & Mail Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Savings (One-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities 27,711 27,711 172,239 123,647 2,700 (11,690) - (250,000) - (300,000) 27,711 27,711 172,239 123,647 16,713 (14,013) 5,460 (5,460) (11,690) (250,000) (300,000) 19,454 19,454 (13,856) 240,581 18,543 3,436 (40,919) (35,864) 22,173 (13,856) 240,581 18,543 3,436 (40,919) (58,037) Total FY 2019 Base Budget 40.00 12,531,457 14,443,419 (1,911,962) Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 68,313 68,313 250 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET DEVELOPMENT SERVICES 1 Supplemental Pension Trust Fund Contribution 3udget Reconciliation i Positions Net Expenditures Revenues General Fund 2 Landscape Architectural Review Fee and Public Works Division Staffing 3 Planning Division Staffing Realignment 4 Fire Division Staffing Realignment 0.21 51,644 (1,518) (0,20) (20,132) 39,936 11,708 (1,518) (20,132) Total Budget Adjustments 0.01 98,307 39,936 58,371 Total FY 2019 Adopted Budget 40.01 12,629,763 14,483,355 (1,853,592) 3udget Adjustments Positions Expenditures Revenues Net General Fund 0.00 I 68,313 68,313 This action transfers $68,313 from the department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Landscape Architectural Review Fee and Public Works Division Staffing 51,644 This action establishes a new landscape architectural review fee to meet the state landscape review requirements, as detailed in the Staff Report 6452 approved by the City Council on January 19, 2016. An interdepartmental review found that performing tasks necessary for this new fee requires staff at the Landscape Architect classification. As such, the requested actions also include adding 0.5 FTE Landscape Architect and deleting 0.29 FTE Planning Arborist within the Public Works Division of the Development Services Department. (Ongoing net costs: $11,708) DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 251 DEVELOPMENT SERVICES 3udget Adjustments T T ud•et Adjustments Positions Expenditures Revenues Net General Fund Performance Results © 0 This action will ensure new state requirements for landscape architecture reviews are implemented. 3 Planning Division Staffing Realignment (1,518) 0 (1,518) This net -zero action aligns the Planning and Community Environment Department staffing and associated funding based on activities in the Planning Division within the Development Services Department. This net -zero FTE realignment consists of an increase of 0.01 FTE each for Chief Planning Official and Principal Planner positions; a net increase of 0.12 FTE for two Associate Planner positions; offset by a net decrease of 0.02 FTE for two Planner positions; and a net decrease of 0.12 FTE for two Senior Planner positions. (Ongoing net savings: $1,518) Performance Results 0 The adjustment of staff alignment ensures that costs are accurately assigned. 4 Fire Division Staffing Realignment Mir -0.20 T (20,132) an 0 (20,132) This net -zero action aligns staffing associated with managing Fire permit activities in both the Fire Department (Fire) and the Fire Prevention Division within the Development Services Department (DSD) by reallocating 0.20 FTE of an Administrative Assistant position from DSD to Fire. (Ongoing net savings: $20,132) Performance Results © 0 This action will ensure that costs for Fire activities are aligned with the work being performed. 252 DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 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; provide rapid emergency response, proactive code enforcement, modern fire prevention methods, and pro- gressive safety education for our citizens and coworkers; and promote customer satisfaction by maintaining quality, profes- sional, and friendly service to others. FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 253 FIRE CHIEF Eric Nickel 1.00 Administrative Assistant SUPPORT SERVICES 1.00 Deputy Chief 1.00 1.00 0.50 1.00 1.00 EMS Chief EMS Data Specialist GIS Specialist Training Battalion Chief Training Captain OPERATIONS 1.00 Deputy Chief 3.00 Battalion Chief 21.00 Fire Captain 26.00 Fire Apparatus Operator 34.00 Fire Fighter 1.00 Senior Management Analyst FIRE PREVENTION* 1.00 Deputy Chief/Fire Marshal 1.00 Administrative Associate II 2.00 Hazardous Materials Inspector 4.00 Fire Inspector FY 2019 POSITION TOTALS 103.70 - 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. 254 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 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 Provide rapid assessment, treatment, and transportation 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. Also incorporate training specific to required EMT and/or Para- medic re -certification is also incorporated. Accomplishments • Responded to 155 fire incidents in Fiscal Year 2017 with 89% of responses within 8 minutes. ▪ Responded to 5,567 medical/rescue calls in Fiscal Year 2017; 99% of paramedic calls for service were responded to within 12 minutes and 94% of emergency medical calls within 8 minutes. • Began a more detailed data collection method for tracking Fire Inspection and conducted 5,476 Fire Inspections in Fiscal Year 2017. • Generated EMS revenue totaling approximately $3.1 million in Fiscal Year 2017. • Sustained public outreach efforts, providing a total of 105 events in Fiscal Year 2017. • Completed second phase of the accreditation self -assessment process; the Department is on track to become accredited in calendar year 2018. ▪ Successfully completed 18 months meet and confer process reaching agreement with local International Association of Firefighters (IAFF) labor group on deployment changes. ▪ Implemented new deployment model designed to more efficiently meet the needs of the community by shifting resources to meet the daily demands on the system. FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 255 FIRE • Reached tentative agreement with Stanford University on Fire Services Contract and continue to finalize the terms of a long-term contract. ▪ Hired and successfully graduated four firefighters in the Santa Clara Joint Fire Academy. ▪ Collected Community Health Needs Assessment data, completed focus groups, and reviewed draft report. • Secured reserve ladder truck with significant savings through collaborative regional partnerships. ▪ Upgraded important software systems allowing for more reliance on electronic records and processes, increasing efficiency, and improving record keeping. Initiatives • Create a comprehensive department succession program as more than half of the Department will be eligible to retire within the next five years. This will include regularly scheduled promotional and acting exams, creation of a career development guide, and increased training. • Present self -assessment and peer evaluation results at the Public Safety Excellence Conference in order to obtain certification as an Accredited Fire Agency. ▪ Support efforts to modernize and replace essential public safety facilities and equipment. • Evaluate community and public health risks and explore evidence -based prevention programs to reduce those risks. Goals and Objectives GOAL 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. ▪ 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. 256 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FIRE Objectives: • Perform periodic inspections of all facilities within the 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 per month per employee of fire related training. • Maintain, as mandated, records of training related to Emergency Medical Service (EMS) and Emergency Medical Technician (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 2019 ADOPTED BUDGET 257 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 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 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted 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 92.00% 99.00% 89.00% 94.00% 99.00% 89.00% 90.00% 99.00% 90.00% 92.00% 99.00% 90.00% 92.00% 99.00% 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 FY 2017, the Fire Department responded to 99 percent of paramedic calls for service within 12 minutes and responded to 94 percent of emergency medical calls within 8 minutes. The Department responded to 89 percent of fire calls within 8 minutes, which is the closest the Department has come to meeting the 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. The Department is in the process of completing International Accreditation and is actively exploring ways to reduce response times. FIRES CONTAINED TO ROOM OF ORIGIN Goal Objective Limit structural fire damage to the room or area of origin. Contain fires to the room or area of origin 90 percent of the time. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of fires contained to the room or area of origin Description Purpose Status 71.00% 85.00% 90.00% 90.00% 90.00% This measure tracks the percentage of fires that are contained to the room or area of origin. Containing a fire to the room or area of origin limits damage and spread of the fire. In FY 2017, the Department limited 85 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. In the cases where the fires were not contained, the fire had spread throughout the entire structure prior to arriving on scene despite a response time under 8 minutes. 258 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FIRE PERCENT OF SURVEYED RESIDENTS RATING FIRE DEPARTMENT SERVICES "GOOD" OR "EXCELLENT" Internalize commitment to excellence in public service by continuously evaluating Goal the assistance provided, identifying areas needing improvement, and implementing mitigation methods. Objective Percent of surveyed residents rating fire services "good" or "excellent" Percent of surveyed residents rating fire prevention services "good" or 85.00% 87.00% 85.00% 85.00% 85.00% "excellent" Maintain awareness of service quality by focusing on customers' view of assistance that was provided. FY 2016 Actuals 97.00% FY 2017 Actuals 97.00% FY 2018 Adopted 95.00% FY 2018 Estimated 95.00% FY 2019 Adopted 95.00% Percent of surveyed residents rating ambulance/EMS services "good" or "excellent" Description Purpose Status Workload V 96.00% 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 Number of ambulance transports 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 FY 2016 Actuals 3,842 5:06 FY 2017 Actuals 3,735 5:32 FY 2018 Adopted 3,800 5:25 FY 2018 Estimated 3,800 5:25 FY 2019 Adopted 3,800 5:25 6:37 4:50 5:30 5:30 5:00 150 155 150 150 150 5,356 5,567 5,400 5,400 5,400 3,376 3,586 3,350 3,550 3,550 8,882 9,153 8,900 9,200 9,200 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 259 FIRE 3udget Summary FY 2016 Actuals Dollars by Division Administration 2,081,753 1,845,573 1,606,088 2,505,528 899,440 56.0% Emergency Response 23,895,813 27,640,110 28,064,815 28,295,304 230,489 0.8% Environmental Safety Management 168,475 151,643 181,549 542,730 361,182 198.9% Records and Information 399,836 319,621 348,496 - (348,496) (100.0)% Management Training and Personnel 1,006,042 1,573,207 1,573,198 787,802 (785,396) (49.9)% Total 27,551,919 31,530,153 31,774,145 32,131,365 357,220 1.1% FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Dollars by Category Salary & Benefits Healthcare 1,900,382 1,953,781 2,250,001 2,212,683 (37,318) (1.7)% Other Benefits 315,685 273,687 295,753 294,432 (1,321) (0.4)% Overtime 2,595,138 3,247,813 1,396,436 1,911,761 515,325 36.9% Pension 4,276,724 5,561,510 5,856,769 6,130,579 273,809 4.7% Retiree Medical 2,034,464 2,433,065 2,559,706 2,223,229 (336,477) (13.1)% Salary 11,197,348 13,058,645 13,745,200 13,749,644 4,445 -% Workers' Compensation 852,598 628,234 1,046,143 753,623 (292,520) (28.0)% Total Salary & Benefits 23,172,338 27,156,736 27,150,008 27,275,951 125,943 0.5% Allocated Charges 3,132,327 2,911,801 2,903,714 3,067,841 164,127 5.7% Contract Services 453,343 456,381 645,325 472,000 (173,325) (26.9)% Facilities & Equipment 162,882 122,332 196,700 246,523 49,823 25.3% General Expense 197,479 447,164 426,722 289,800 (136,922) (32.1)% Operating Transfers -Out 306,850 306,850 -% Rents & Leases 144 - -% Supplies & Material 433,549 435,596 451,676 472,400 20,724 4.6% Total Dollars by Expense Category 27,551,919 31,530,153 31,774,145 32,131,365 357,220 1.1% Revenues Charges for Services 9,888,335 9,277,851 9,970,718 10,170,642 199,924 2.0% Charges to Other Funds 168,222 163,386 161,322 163,605 2,283 1.4% From Other Agencies 155,857 547,601 397,000 70,000 (327,000) (82.4)% 260 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FIRE 3udget Summary Other Revenue Other Taxes and Fines Permits and Licenses Total Revenues FY 2016 Actuals 569,022 1,436 10,782,872 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % (52,082) 57,000 282,000 225,000 394.7% - 1,000 - (1,000) (100.0)% 15,713 (15,713) (100.0)% 9,936,756 10,602,753 10,686,247 83,494 0.8% Positions by Division Administration 3.00 3.00 3.00 5.68 2.68 89.33% Emergency Response 99.07 99.07 99.07 89.57 (9.50) (9.59)% Environmental Safety Management 0.48 0.48 0.48 1.15 0.67 139.58% Records and Information 1.50 1.50 1.50 (1.50) (100.00)% Management Training and Personnel Total 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 3.00 5.15 5.15 107.05 109.20 109.20 FY 2016 Actuals 1.00 1.00 1.00 2.00 3.00 0.80 FY 2017 Actuals 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 2.00 (3.15) (61.17)% 98.40 (10.80) (9.89)% FY 2019 Adopted Budget 1.00 1.00 1.00 2.20 3.00 0.80 0.05 FY 2019 Change FTE 0.20 FY 2019 Salary 182,270 162,136 81,141 171,015 515,861 122,187 9,639 Deputy Director Technical Services 0.20 0.20 0.20 0.20 39,924 Division Deputy Fire Chief 2.00 2.00 2.00 2.00 418,288 Emergency Medical Service Director 1.00 1.00 1.00 1.00 155,043 Emergency Medical Services Data 1.00 1.00 1.00 1.00 83,323 Specialist Fire Apparatus Operator 30.00 30.00 30.00 26.00 (4.00) 3,684,210 Fire Captain 21.00 21.00 21.00 21.00 - 3,295,685 Fire Chief 1.00 1.00 1.00 1.00 - 253,592 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 261 FIRE 40.00 Staffing FY 2018 FY 2017 Adopted Actuals Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary Fire Fighter Fire Inspector Geographic Information System Specialist Hazardous Materials Inspector 0.50 41.00 0.80 0.50 0.30 41.00 0.80 34.00 0.80 0.50 0.50 0.30 0.30 (7.00) 4,451,381 129,709 64,109 48,641 Senior Management Analyst 1.00 1.00 1.00 1.00 143,915 Sub -total: Full -Time Equivalent 106.50 108.65 108.65 97.85 (10.80) 14,012,067 Positions Temporary/Hourly 0.55 0.55 0.55 0.55 — 54,031 Total Positions 107.05 109.20 109.20 98.40 (10.80) 14,066,098 262 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FIRE 3udget Reconciliation — T Positions Expenditures Revenues Net General Fund Prior Year Budget 109.20 31,774,145 10,602,753 21,171,392 One -Time Prior Year Budget Adjustments Medical Gurney Replacement and Cardiac Monitor Warranty Fire Hyrdrant Maintenance Program (reassign to Public Works) International Accreditation Phase III Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Stanford Fire Deployment Changes (CMR #8530) Stanford Emergency Fire Services Revenue Adjustment (align with current negotiations, net $6.5 million) Fire Hydrant Maintenance Program (transfer from Public Works) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Medical Transport Reimbursement/Revenue from Other Agencies Revenue Alignment General Liability Insurance Allocated Charges Information Technology Allocated Charges Information Technology Allocated Charges Reallocation (reassign from Fire to OES) Print & Mail Allocated Charges Utilities Allocated Charges Vehicle Equipment Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities (126,000) (125,000) (50,000) 63,298 — (237,702) (11.00) (11.00) 2,075,624 (1,668,484) (126,000) (125,000) (50,000) 63,298 (237,702) 2,075,624 (1,668,484) 270,924 (270,924) 79,000 79,000 33,000 — 33,000 (115,000) (173,000) 58,000 41,888 112,652 2,283 (2,283) 41,888 112,652 (46,960) — (46,960) (1,266) 6,905 (1,266) 6,905 17,445 — 17,445 (29,835) (300,329) 204,641 100,207 (29,835) (300,329) 104,433 Total FY 2019 Base Budget 98.20 31,741,084 10,702,960 21,038,123 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 263 FIRE 1 Supplemental Pension Trust Fund Contribution 3udget Reconciliation Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Firefighter New Hire Costs 3 Firefighter Promotional Exams 4 Reallocation from Development Services Total Budget Adjustments 0.20 0.20 306,850 46,000 20,000 17,431 390,281 (16,713) (16,713) 306,850 46,000 20,000 34,144 406,994 Total FY 2019 Adopted Budget 98.40 32,131,365 10,686,247 21,445,117 3udget Adjustments 0.00 306,850 —II 0 II This action transfers $306,850 from the Fire Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Fire Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 264 FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FIRE 2 Firefighter New Hire Costs 3udget Adjustments U This action adds $46,000 in one-time funding for the anticipated recruitment and onboarding of five (5) firefighter personnel. Funding will be used for background checks, uniforms including full personal protective equipment, and Joint Fire Academy (JFA) fees. During FY 2018, the Department hired four entry level firefighters and anticipates further retirements during FY 2019 resulting in the need for these resources. The Department will continue to evaluate recruitment needs in future budget cycles as part of succession planning efforts to address the fifty percent of shift staff that will become eligible for retirement over the next five years. (Ongoing Costs: $0) Performance Results © 0 This action provides the training and equipment necessary for new hires to transition to sworn firefighters. 3 Firefighter Promotional Exams 20,000 This action increases contract service funding to establish an annual promotional process. This funding will enable the Department to hire a consultant to perform a promotional exam on an annual basis, alternating between Captain and Apparatus Operator promotions. The establishment of an annual process will ensure that regularly scheduled hiring practices are in place to proactively address staff attrition that is expected to continue over the next ten years as more employees become eligible for retirement. Currently the Department conducts these on an as -needed basis. (Ongoing Costs: $20,000) Performance Results © 0 This action supports succession planning efforts to provide continuity in staffing. 4 Reallocation from Development Services 17,431 (16,713) This net -zero action technically aligns staffing, funding, and revenues with activities in both the Fire Department and the Fire Prevention Division within the Development Services Department. This reallocates 0.20 FTE Administrative Assistant to align with workloads and shifts revenues and expenses associated with Fire permitting activity. A corresponding action is included in the Development Services Department to offset this action. (Ongoing Costs: $34,144) Performance Results © 0 This action will ensure that costs for Fire activities are aligned with the work being performed. FIRE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 265 CITY OF PALO ALTO HUMAN RESOURCES 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 2019 ADOPTED BUDGET 267 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 2019 POSITION TOTALS 17.00 - Full-time 0.96 - Hourly 268 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 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, as well as lead the City through labor contract negotiations. 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 • Amended the City's Retirement Contract with CaIPERS implementing an employee pension cost share for the Police, Fire, Service Employees International Union (SEIU), and Management Groups as approved in the 2016 contracts. • Successfully launched a Leadership Academy, training more than 30 managers and supervisors over a four -month timeframe. ▪ Implemented the HR Advice line as a forum for employees to get answers, make suggestions, and nominate employees for recognition, accessible 24/7. ▪ Ratified Memorandum of Agreement with the SEIU Hourly Group and successfully negotiated a one-year extension with the Palo Alto Police Manager's Association. ▪ Utilized technology to implement paperless recruitments and interviews as part of departmental efforts to modernize, contributing to a 35% reduction in paper consumption year -over -year. • Enhanced the process for personnel actions by leveraging electronic submissions and signatures. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 269 HUMAN RESOURCES • Launched a new eLearning Management System, beginning with new hires, that is anticipated to reach across the organization. ▪ Implemented a new background check process significantly reducing the time needed to collect data in the recruitment process, especially for out-of-state candidates. • Recruited for, and filled, 220 positions including: Police Chief, Deputy City Managers, Assistant to the City Manager, Assistant City Attorney, Firefighters, and Police Officers. • Conducted a Request for Proposal and transitioned to a new retiree medical benefit administrator. ▪ Enhanced the Open Enrollment portal and Employee Self Service capabilities to better assist employees to make informative benefits decisions. ▪ Converted all employees' benefits records to electronically searchable files to reduce paper and increase the availability of information. Initiatives • Implement a customer service tracking and case management system enabling the department to account and track incoming requests. ▪ Participate in the ERP selection process to provide subject matter expertise and help design the Human Resources modules for the ERP. ▪ Continue expanding the paperless interview process to all recruitments by further leveraging technology. ▪ Integrate the job applicant tracking system with the Human Resources Information System (SAP) to reduce the number of manual entries. • Develop and launch a comprehensive program to provide training plans for City employees. • Explore benchmarking to measure the effectiveness of the return -to -work program. • Research Risk Management self -assessment tool in support of continuous loss control improvement. ▪ Digitize all Workers' Compensation records into the City's ePersonnel file system. ▪ Explore a new web -based leave tracking system for all protected leaves, such as Family Medical Leave, California Family Rights Act, Pregnancy Disability Leave and Leave related to Reasonable Accommodation. ▪ Integrate an interface between CaIPERS and with the Human Resources Information System (SAP) to enhance productivity, efficiency, and accuracy. 270 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 3udget Summary I Dollars by Fund General Fund -Operating Liability Insurance Workers' Compensation Total Revenues FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 3,559,492 3,314,457 3,757,228 3,662,383 (94,845) 1,848,428 1,491,957 3,328,535 2,984,622 (343,913) 2,180,302 2,737,309 5,787,596 6,103,345 315,749 7,588,222 7,543,723 12,873,359 12,750,350 (123,009) FY 2019 Change % Charges to Other Funds 4,041,870 1,076,120 3,631,044 3,774,302 143,258 3.9% Operating Transfers -In 5,000 5,000 5,000 —% Other Revenue 2,255,360 3,072,882 5,265,000 3,805,045 (1,459,955) (27.7)% Return on Investments 528,725 526,823 38,230 39,310 1,080 2.8% Total Revenues 6,825,955 4,680,825 8,939,274 7,623,657 (1,315,617) (14.7)% Positions by Fund General Fund 16.70 17.44 17.20 16.96 (0.24) (1.40)% Workers' Compensation Program 1.00 1.00 1.00 — —% Fund Total 16.70 18.44 18.20 17.96 (0.24) (1.32)% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 271 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 champion 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. 272 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 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. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Attendance Description Purpose Status RECRUITMENT Goal Objective 96.16% 95.00% 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, Americans with Disabilities Act or Family Medical Leave Act leave). The actual attendance for Fiscal Year 2017 of 95% was a slight dip compared to Fiscal Year 2017 estimate of 96.00%. Future attendance rates are expected to remain steady at approx 95-96% 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Recruitment - Days to fill a position Description Purpose Status 94.55 95.00 95.00 104.00 100.00 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 saw a slight increase in Fiscal Year 2017 to 95.00 days from 94.55 days in Fiscal Year 2016. As the City competes for talent to recruit for hard -to -fill positions, it is estimated that there will be a slight increase in days to fill a position. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 273 HUMAN RESOURCES TURNOVER Goal Objective 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Turnover - Voluntary Turnover 6.48% Turnover - Involuntary Turnover 0.21% Turnover - Retirement Turnover 3.45% Turnover - Total Turnover 10.14% Description Purpose Status Workload V 5.20% 1.00% 2.50% 8.60% 7.00% 0.50% 2.70% 10.00% 4.00% 0.60% 2.40% 7.00% 6.00% 0.50% 2.50% 9.00% 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 2017 saw an 8.6% total turnover which is in line with expectations but does show signs of competition for talent and an increase in retirements. The department is expecting to see a slight decrease in turnover in Fiscal Year 2018, however, expect the total turnover rate to stay steady at 9 - 10%. ensures FY 2016 Actuals Employee personnel transactions* 5,376 Percentage of employees participating in Citywide training program** FY 2017 Actuals 4,820 FY 2018 Adopted 4,500 FY 2018 Estimated 5,150 FY 2019 Adopted 4,500 N/A 89.00% 87.50% 87.50% 90.00% The department has experienced an increase in transaction volume, driven by the number of updates to employees' records associated with MOA-based changes and transactions necessary to integrate records with third -party applications. The number of transactions is expected to normalize in FY 2019. ** This is a new workload measure that started in FY 2017. Staff will focus on developing and enhancing the use of the eLearning system and a robust citywide training program during FY 2019 in collaboration with other City departments. 274 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 3udget Summary 1 Dollars by Division Administration, Employee Org Development and HR Systems FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1,550,612 1,095,303 1,166,851 1,150,626 (16,225) (1.4)% Benefits and Compensation 418,712 471,475 526,447 502,594 (23,853) (4.5)% Employee and Labor Relations 980,800 1,028,237 1,284,146 1,192,714 (91,432) (7.1)% Recruitment 407,623 412,336 444,005 471,174 27,170 6.1% Risk Mgmt, Safety, Workers' 201,745 307,106 335,779 345,274 9,495 2.8% Compensation Total 3,559,492 3,314,457 3,757,228 3,662,383 (94,845) (2.5)% Dollars by Category Salary & Benefits Healthcare 190,212 225,177 322,912 319,103 (3,809) (1.2)% Other Benefits 83,324 67,751 91,351 92,609 1,258 1.4% Overtime 1,451 1,202 - - - -% Pension 370,224 432,129 534,887 559,732 24,845 4.6% Retiree Medical 175,169 191,691 201,668 190,587 (11,081) (5.5)% Salary 1,667,000 1,631,246 1,857,392 1,917,423 60,032 3.2% Workers' Compensation 73 77,358 55,727 (21,631) (28.0)% Total Salary & Benefits 2,487,452 2,549,194 3,085,568 3,135,183 49,615 1.6% Allocated Charges 192,008 137,789 159,481 187,042 27,561 17.3% Contract Services 607,404 448,795 249,309 205,309 (44,000) (17.6)% Facilities&Equipment 26,121 5,535 4,150 4,150 -% General Expense 179,334 112,633 198,348 43,098 (155,250) (78.3)% Operating Transfers -Out 28,209 28,209 -% Rents & Leases 43,000 44,088 43,000 43,000 - -% Supplies & Material 24,171 16,423 17,372 16,392 (980) (5.6)% Total Dollars by Expense Category 3,559,492 3,314,457 3,757,228 3,662,383 (94,845) (2.5)% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 275 HUMAN RESOURCES 3udget Summary 1 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Revenues Charges to Other Funds 1,673,028 1,076,120 1,856,044 1,797,302 (58,742) (3.2)% Other Revenue 15 10 - - - -% Total Revenues 1,673,043 1,076,130 1,856,044 1,797,302 (58,742) (3.2)% Positions by Division Administration, Employee Org 4.99 5.36 5.56 5.56 - -% Development and HR Systems Benefits and Compensation 2.51 2.88 2.44 2.20 (0.24) (9.84)% Employee and Labor Relations 4.60 4.60 5.00 5.00 -% Recruitment 3.00 3.00 2.60 2.60 -% Risk Mgmt, Safety, Workers' 1.60 1.60 1.60 1.60 -% Compensation Total Staffing Administrative Assistant Job Classification Assistant Director Human Resources 16.70 17.44 17.20 16.96 (0.24) (1.40) % FY 2016 Actuals 1.00 1.00 FY 2017 Actuals 1.00 1.00 FY 2018 Adopted Budget FY 2019 Adopted Budget 1.00 1.00 Director Human Resources/CPO 1.00 1.00 1.00 1.00 Human Resources Representative 2.00 2.00 3.00 3.00 Human Resources Technician 4.00 4.00 4.00 4.00 Manager Employee Benefits 1.00 1.00 1.00 1.00 Manager Employee Relations 1.00 1.00 1.00 1.00 Senior Human Resources 4.00 4.00 3.00 3.00 Administrator Senior Management Analyst 1.00 1.00 2.00 2.00 Sub -total: Full -Time Equivalent 16.00 16.00 16.00 16.00 Positions FY 2019 Change FTE FY 2019 Salary - 190,778 - 228,520 - 240,947 309,878 136,510 147,638 - 324,314 263,307 - 1,841,893 Temporary/Hourly 0.70 1.44 1.20 0.96 (0.24) 47,912 Total Positions 16.70 17.44 17.20 16.96 (0.24) 1,889,805 276 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 17.20 3,757,228 1,856,044 1,901,184 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Labor Negotiations Fire Department Recruiting 7,644 (100, 000) (50,000) 7,644 (100, 000) (50,000) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — (142,356) — (142,356) Salary and Benefits General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) 98,229 13,038 12,407 3,758 (9,286) (22,208) 1 — 98,229 (58,742) 58,742 — 13,038 12,407 3,758 — I (9,286) (22,208) Adjustments to Costs of Ongoing Activities 95,938 (58,742) 154,680 Total FY 2019 Base Budget 17.2 3,710,810 1,797,302 1,913,508 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Human Resources Wellness Program Staffing Reduction 3 Reduction in Human Resources Non -Salary Expenses 28,209 (0.24) (26,406) (50, 230) 28,209 (26,406) (50,230) Total Budget Adjustments (0.24) (48,427) (48,427) Total FY 2019 Adopted Budget 16.96 3,662,383 1,797,302 1,865,081 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 277 HUMAN RESOURCES 3udget Adjustments Revenues Net General Fund 1 Supplemental Pension Trust Fund Contribution 0.00 28,209 This action transfers $28,209 from the Human Resources Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Human Resources Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental pension trust will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Human Resources Wellness Program Staffing Reduction 111 -0.24 (26,406) 0 (26,406) This action eliminates a 0.24 part-time/hourly Management Specialist in the Benefits Division of Human Resources supporting the Wellness Program. Other resources for the Wellness program remain, including a 0.48 Management Specialist in the General Benefits Fund. (Ongoing Savings: $24,812) Performance Results This action is anticipated to have minimal impacts on service delivery of the Wellness Program while contributing budgetary savings. 3 Reduction in Human Resources Non -Salary Expenses 0.00 (50,230) 0 (50,230) This action reduces various non -salary expenses across the Human Resources department to achieve ongoing savings in operating expenses. Reductions will result in more constrained resources for outside consultants and attorneys for labor negotiations ($50,000 budget remains), for the employee benefits fair ($20,000 budget remains), for advertising and publishing for candidate outreach, and other administrative services throughout the department. (Ongoing Savings: $50,230) Performance Results These reductions do not completely eliminate available funding for any of the programs and are not anticipated to have significant impacts on service delivery; however, they will require a prioritization of expenses in the department. 278 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 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. This program uses an 85% confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments ▪ Enhanced the City's Cyber Security insurance to minimize the City's risk exposure in a cyber risk event. . Contracted with a vendor to obtain and assist in tracking Motor Vehicle driving records, consistent with risk management best practices, to reduce liability. Initiatives . Research Risk Management self -assessment tool in support of continuous loss control improvement. Goals and Objectives GOAL 1 Reduce liability exposure to the City. Objectives: . Reduce liability exposure to the City for employee -involved vehicle collision. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 279 HUMAN RESOURCES ▪ Review Department of Motor Vehicles 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 V ensures CITY VEHICLE COLLISION LOSS Goal Reduce liability exposure to the City. Objective Reduce the number of claims related to City vehicle collision losses. FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 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. The number of employee involved vehicle collisions has significantly decreased in Fiscal Year 2017 due to training programs and discussions with staff at department safety meetings. Additional training, such as online and onsite training, will continue to be offered to maintain the low numbers of claims per year. Purpose Status 16 9 12 13 12 280 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES DEFENSIVE DRIVING TRAINING Goal Objective 1� Attendance at mandatory and proactive defensive driver training Description Purpose Status Reduce liability exposure to the City. Provide defensive driver training. FY 2016 Actuals 51 FY 2017 Actuals 58 FY 2018 Adopted 55 FY 2018 Estimated 50 FY 2019 Adopted 55 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 department will continually offer defensive driver training to lower the vehicle collision losses. 3udget Summary 1 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget Dollars by Division Non -Departmental 1,848,428 1,491,957 3,328,535 Total 1,848,428 1,491,957 3,328,535 FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 2,984,622 (343,913) (10.3)% 2,984,622 (343,913) (10.3)% Dollars by Category Salary & Benefits Workers' Compensation 113,692 (111,260) -% Total Salary & Benefits 113,692 (111,260) — — —% Contract Services 7,125 6,650 70,000 71,820 1,820 2.6% General Expense 1,727,611 1,596,567 3,258,535 2,912,802 (345,733) (10.6)% Total Dollars by Expense 1,848,428 1,491,957 3,328,535 2,984,622 (343,913) (10.3)% Category Revenues Charges to Other Funds 2,368,842 1,775,000 1,977,000 202,000 Operating Transfers -In — 5,000 5,000 5,000 — Other Revenue (215,609) 35,393 40,000 41,040 1,040 Return on Investments 139,444 135,145 22,465 23,135 670 Total Revenues 2,292,677 175,538 1,842,465 2,046,175 203,710 11.4% -% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 281 HUMAN RESOURCES 3udget Reconciliation Positions Expenditures Revenues Net General Liabilities Insurance Program Prior Year Budget 3,328,535 1,842,465 1,486,070 One -Time Prior Year Budget Adjustments Buena Vista Mobile Home Park (Legal Expenses) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities General Liability Insurance Claims Property Loss Broker and Consultant Audit and Financial Services Umbrella Excess Liability Special Liability Return on Investment Adjustments to Costs of Ongoing Activities - (375,000) - (375,000) - (375,000) — (375,000) (248,535) 678,499 (927,034) 4,680 4,680 — 1,690 — 1,690 — 130 — 130 — 248,322 — 248,322 1,300 1,300 1,710 (1,710) — 7,587 680,209 (672,622) Total FY 2019 Base Budget 2,961,122 2,522,674 438,448 Budget Adjustments 1 General Liability Savings (One-time FY 2019 Savings) 2 Cyber Security Property Loss Coverage Total Budget Adjustments 23,500 (500,000) 500,000 23,500 23,500 (476,500) 500,000 Total FY 2019 Adopted Budget 2,984,622 2,046,174 938,448 282 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 3udget Adjustments Positions Expenditures Revenues Net General Liabilities Insurance Program 1 General Liability Savings (One-time FY 2019 Savings) 0.00 (500,000) 500,000 This action reduces the estimate for revenues received from other funds in the General Liability Fund by $500,000. This reduction materializes in the 'Allocated Charges' budget category of each department. The City budgets the self -insured General Liability Fund at a confidence level of 85% and has experienced a few years of claims costs that have been lower than budgeted. This has resulted in the accumulation of fund balance in the General Liability Fund. This action proportionally lessens the burden to the organization for Fiscal Year 2019 General Liability expenses based on the actuarial calculation of liability, by $273,000 in the General Fund and $500,000 across all funds, instead drawing on $500,000 of accumulated fund balance. (Ongoing costs: $0) Performance Results This action ensures that the organization only pays the necessary costs for a given year for the General Liability expenses. 2 Cyber Security Property Loss Coverage 23,500 23,500 milM This action provides funding for the City to obtain cyber-security property loss insurance. This additional insurance will better protect the City in the event of a cyber breach. The insurance provides expert computer services, legal services, notification services, call center services, breach resolution/mitigation services and public relations and crisis management expenses. City staff continues to proactively work to ensure that cyber-security is maintained, but in the event of a breach, the insurance will provide additional layers of dealing with the aftermath of the breach. (Ongoing costs: $23,500) Performance Results This action enhances the City's ability to deal with a cyber security breach. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 283 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. This program uses an 85% confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments • Instituted a Soft Tissue Injury Prevention Program to reduce claims and lost time. Initiatives • Explore benchmarking methodologies to measure the effectiveness of the return -to -work program. 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. 284 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 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 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted Total dollar amount of claims paid Description Purpose Status 2,187,149 2,431,806 2,500,000 2,100,000 2,500,000 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 2017, the total cost of workers compensation claims saw an increase compared to Fiscal Year 2016 workers compensation claims. It is anticipated that the total Fiscal Year 2018 workers compensation claims will see a decrease based on current data and recent trends. However, in Fiscal Year 2019, it is anticipated that the fund will see a slight increase in claims paid. NUMBER OF CLAIMS 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of Workers' Compensation Claims Filed Description Purpose Status 82 70 75 70 70 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 decreased in Fiscal Year 2017 to 70 from Fiscal Year 2016 of 82. Based on analysis of current data, it is expected that the number of claims will hold steady in Fiscal Year 2018 and continue at that rate in Fiscal Year 2019. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 285 HUMAN RESOURCES 3udget Summary Dollars by Division Non -Departmental Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 2,180,302 2,737,309 5,787,596 6,103,345 315,749 FY 2019 Change % 5.5% 2,180,302 2,737,309 5,787,596 6,103,345 315,749 5.5% Dollars by Category Salary & Benefits Healthcare 9,484 10,464 10,753 289 2.8% Other Benefits 235,111 245,530 268,725 251,026 (17,699) (6.6)% Pension 31,767 34,603 35,981 1,377 4.0% Salary 116,613 123,512 127,892 4,381 3.5% Workers' Compensation 1,457,186 1,711,992 4,843,932 5,018,342 174,410 3.6% Total Salary & Benefits 1,692,297 2,115,386 5,281,236 5,443,994 162,758 3.1% Contract Services 2,375 6,650 6,900 7,079 179 2.6% General Expense 485,630 615,273 496,000 650,458 154,458 31.1% Operating Transfers -Out 3,460 1,813 (1,647) (47.6)% Total Dollars by Expense Category 2,180,302 2,737,309 5,787,596 6,103,345 315,749 5.5% Revenues Other Revenue 2,470,954 3,037,480 5,225,000 3,764,005 (1,460,995) (28.0)% Return on Investments 389,281 391,677 15,765 16,175 410 2.6% Total Revenues 2,860,235 3,429,157 5,240,765 3,780,180 (1,460,585) (27.9)% Positions by Division Non -Departmental Total 1.00 1.00 1.00 -% 1.00 1.00 1.00 -% 286 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES Staffing Senior Human Resources Administrator Job Classification FY 2016 I Actuals FY 2018 FY 2017 Adopted Actuals Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary Sub -total: Full -Time Equivalent Positions Total Positions 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 118,414 — 118,414 - 118,414 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 287 HUMAN RESOURCES 3udget Reconciliation Positions Expenditures Revenues Net Workers' Compensatio n Fund 1.00 5,787,596 5,240,765 546,831 One -Time Prior Year Adjustments Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefit Adjustments Workers' Compensation Insurance Claims Adjustments Return on Investment Adjustments Administrator Fees State of California Assessment Fees Umbrella Excess Liability Adjustments Adjustments to Costs of Ongoing Activities (3,460) (3,460) 6,109 (3,460) — (3,460) 6,109 142,070 39,005 103,065 (17,581) 32,340 154,458 317,396 410 39,415 (410) (17,581) 32,340 154,458 277,981 Total FY 2019 Base Budget 1.00 6,101,532 5,280,180 821,352 Budget Adjustments 1 Workers' Compensation Savings (One-time FY 2019 Savings) 2 Supplemental Pension Trust Fund Contribution Total Budget Adjustments 1,813 1,813 (1,500,000) (1,500,000) 1,500,000 1,813 1,501,813 Total FY 2019 Adopted Budget 1.00 6,103,345 3,780,180 2,323,165 288 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET HUMAN RESOURCES 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Workers' Compensatio n Fund 1 Workers' Compensation Savings (One-time FY 2019 Savings) 0.00 0 (1,500,000) 1,500,000 This action reduces the estimate for revenues received from other funds in the Workers' Compensation Fund by $1.5 million. This reduction materializes in the 'Workers' Compensation' line of the 'Salary and Benefits' budget category of each department. The City budgets the self -insured Workers' Compensation Fund at a confidence level of 85% and has experienced a few years of claims costs that have been lower than budgeted. This has resulted in the accumulation of fund balance in the Workers' Compensation Fund. This action proportionally lessens the burden to the organization for Fiscal Year 2019 Workers' Compensation expense based on the actuarial calculation of liability, by $1.02 million in the General Fund and $1.5 million across all funds, instead drawing on $1.5 million of accumulated fund balance. (Ongoing net costs: $0) Performance Results This action ensures that the organization only pays the necessary costs for a given year for the General Liability expenses. 2 Supplemental Pension Trust Fund Contribution 1,813 This action transfers $1,813 from the Workers' Compensation Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Workers' Compensation Fund annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental pension trust will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 289 HUMAN RESOURCES Workers' Compensation Fund FY 2016 Actuals FY 2017 Actuals FY 2018 Estimated FY 2019 Adopted 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 2,187,149 2,431,807 (837,910) (795,714) 2,000,000 0 4,896,002 485,630 615,100 495,000 649,458 2,375 6,650 6,650 7,079 235,111 240,405 264,000 246,240 90,000 75,899 120,000 122,340 0 163,162 171,214 182,226 2,162,355 2,737,309 3,056,864 6,103,345 290 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2019 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, City 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 2019 ADOPTED BUDGET 291 INFORMATION TECHNOLOGY CHIEF INFORMATION OFFICER Jonathan Reichental IT PROJECT MANAGEMENT OFFICE 1.00 IT Manager 6.00 Senior Technologist 1.00 Business Analyst IT OPERATIONS 1.00 IT Manager 8.00 Senior Technologist 6.00 Desktop Technician OFFICE OF THE CIO 1.00 Senior Management Analyst 1.00 Technologist 1.00 Administrative Assistant IT ENTERPRISE SERVICES 1.00 IT Manager 4.00 Senior Technologist INFORMATION SECURITY SERVICES 1.00 Security Manager FY 2019 POSITION TOTALS 33.00 - 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. 292 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 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 (IT) Department embarked on a multi -year journey to transform itself into being a provider of higher -value information technology solutions and to 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) As stewards of the public trust for IT project management, IT PMO ensures successful execution of the right technology projects at the right time and helps enable the success of department technology projects. IT PMO aspires to be a center of excellence for IT project management through the promotion of standards, awareness, and education. 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 other IT divisions. Services include enterprise architecture, service desk, infrastructure support, INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 293 INFORMATION TECHNOLOGY server hosting, office automation software support, technical training and support, and asset management. IT ENTERPRISE SERVICES Maintains a core set of large Enterprise Resource Planning (ERP) systems like SAP for support- ing financial business processes, information flow, reporting, and data analytics for the City. These services include all aspects of Enterprise Systems management such as planning, devel- opment, integration, administration, support, maintenance, governance, and change manage- ment. INFORMATION SECURITY SERVICES Develops and implements the citywide information security program that includes the preser- vation of the availability, integrity, and confidentiality of the City's information resources. These services include security policy and procedures, legal compliance, risk management, disaster recovery, and security audit. Accomplishments • Awarded Digital Cities Top 10; Jonathan Reichental awarded 'Global 150 Digital Transformation Leader.' • Conducted citywide cyber-attack simulation to enhance IT security at the City. • Implemented and codified best practice Software Asset Management (SAM). • Deployed Wireless Screencasting (AirTame) in most City conference rooms. • Evaluated and determined next Client Computing Platform for City leadership and staff, including hardware and software standards for next 5 years. ▪ Smart City experiments including Verizon Sensity network around City Hall; Facebook Chatbot; and Soofa Solar USB charging station. • Completed development of the Fiscal Year 2019 - Fiscal Year 2021 revised IT Strategy. ▪ Completed Business Intelligence system upgrade and citywide deployment. ▪ Started selection of next -generation Finance, Human Resources, and Utilities Customer Information Systems solutions. • Selected new Geographic Information System (GIS). Initiatives The following major initiatives will be worked on by the Information Technology Department in Fiscal Year 2019, but not necessarily completed in Fiscal Year 2019. As circumstances dictate, projects will be reprioritized or rescheduled as appropriate: ▪ Deployment of citywide security enhancements for city -owned mobile devices. • Completion of payment card industry compliance requirements. • Deployment of WiFi to additional select sites such as Cubberley and Lytton Plaza. 294 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET INFORMATION TECHNOLOGY • Citywide roll -out of the SharePoint Academy. ▪ Deployment of the next -generation City website. • Implementation of the new Geographic Information System (GIS). ▪ Design of next -generation Enterprise Resource Planning (ERR) Systems in coordination with key department stakeholders. • Support technology requirements for existing and newly rebuilt City infrastructure, such as the Junior Museum and Zoo and Fire Station 3. Goals and Objectives GOAL 1 Support a multiyear roadmap to significantly increase the City's adoption of digital services and smart city capabilities. Objectives: ▪ Develop, enhance, and provide IT services that will increase the community's access to mobile services. ▪ Deploy and maintain enterprise -wide platforms and processes for supporting open and participatory government to enrich our community. ▪ Maintain an ongoing program of civic innovation activities in government technology and include broad participation from innovators in the public and private sectors. • Formalize an Urban Innovation Network to bring together innovators, entrepreneurs and organizations in the local area to collaborate together. • Define and develop metrics to support objectives in this goal. GOAL 2 Enhance IT service delivery in order to provide excellent customer service to all City depart- ments. Objectives: ▪ To support high -quality, consistent, and efficient services, IT will organize around a standardized delivery framework based on the Information Technology Infrastructure Library (ITIL). • Mature the established citywide IT governance processes based on an industry -recognized model. • Deploy new tools to support higher quality service and knowledge management within the IT department. • Work with Human Resources department to identify funding, select and deliver ongoing technical training for all City employees. • Formalize career path and succession planning for the City's technology staff. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 295 INFORMATION TECHNOLOGY ▪ Review and refresh IT position descriptions, roles, and responsibilities. ▪ Baseline current IT capabilities and identify targeted improvements based on a model such as the IT Capability Maturity Framework. • Define and develop metrics to support objectives in this goal. GOAL 3 Strengthen the City's technology infrastructure and communication systems. Objectives: ▪ Reduce the City's data center footprint by utilizing a hybrid cloud approach. ▪ Virtualize and decommission systems as necessary to reclaim office space. ▪ Implement unified communications to optimize business processes, increase user productivity and collaboration. ▪ Standardize on data storage approach and solutions. ▪ Execute the 2017 adopted GIS strategy which includes the implementation of the new system and added capabilities. • Define and develop metrics to support objectives in this goal. GOAL 4 Manage a program of projects to enhance and improve information security to enable confiden- tiality, integrity, and availability of information across all City systems. Objectives: ▪ Enhance cybersecurity awareness processes throughout the City. • Implement additional annual cybersecurity training for all City employees. • Ensure a fully -tested disaster recovery and continuity program for mission critical services. ▪ Continue to identify and invest in innovative tools in order to appropriately protect City systems and data as conditions dictate. • Define and develop metrics to support objectives in this goal. GOAL 5 Design and formalize a citywide data strategy to leverage the high value of our City data. Objectives: ▪ Implement citywide data governance based on a recognized, industry standard framework such as DM-BOK. • Mature our Open Data initiative to address data driven decision making. • Deploy a defined set of citywide data services capabilities for departments. ▪ Define and develop metrics to support objectives in this goal. 296 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 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 2016 Actuals 93.00% FY 2017 Actuals 92.00% FY 2018 Adopted 95.00% FY 2018 Estimated 93.00% FY 2019 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 6.00% 6.00% 6.00% 6.00% 6.00% 28.00% 28.00% 31.00% 29.00% 30.00% 11.00% 14.00% 11.00% 13.00% 13.00% 33.00% 30.00% 32.00% 29.00% 29.00% 22.00% 23.00% 20.00% 23.00% 22.00% 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 were minor fluctuations 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 2019 ADOPTED BUDGET 297 INFORMATION TECHNOLOGY Workload V ensures FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted IT expenditure per workstation Number of closed help desk requests Number of datasets published on open data platforms $4,703.00 10,748 $4,982.56 8,750 $4,861.00 10,334 $5,059.00 8,689 $5,095.00 9,100 83 87 98 92 97 298 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET INFORMATION TECHNOLOGY 3udget Summary Dollars by Division CIP Technology Fund Enterprise Systems Office of the CIO Operations Project Services Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 2,069,255 1,058,744 3,733,077 2,693,833 (1,039,244) (27.8)% 2,582,366 3,123,376 3,323,269 3,285,959 (37,310) (1.1)% 2,883,501 2,925,415 3,120,591 3,535,530 414,940 13.3% 5,702,804 5,880,219 7,788,970 8,167,345 378,375 4.9% 1,112,628 1,083,847 2,146,203 1,935,267 (210,937) (9.8)% 14,350,553 14,071,602 20,112,110 19,617,934 (494,176) (2.5)% Dollars by Category Salary & Benefits Healthcare 551,700 666,572 789,387 807,631 18,244 2.3% Other Benefits 182,332 146,083 185,047 186,973 1,926 1.0% Overtime 11,662 4,819 18,585 19,068 483 2.6% Pension 947,892 1,085,854 1,356,582 1,411,811 55,229 4.1% Retiree Medical 273,435 299,224 314,799 347,609 32,810 10.4% Salary 3,798,444 3,925,824 4,932,078 5,042,037 109,959 2.2% Workers' Compensation 11,212 10,332 127,989 92,201 (35,788) (28.0)% Total Salary & Benefits 5,776,675 6,138,708 7,724,466 7,907,330 182,864 2.4% Allocated Charges 1,089,438 1,071,082 997,238 1,440,281 443,043 44.4% Contract Services 3,879,837 4,697,928 5,641,332 5,647,287 5,956 0.1% Facilities & Equipment 572,002 204,038 837,702 869,921 32,220 3.8% General Expense 446,099 411,655 569,679 500,179 (69,500) (12.2)% Operating Transfers -Out 57,340 16,485 161,418 99,746 (61,672) (38.2)% Rents & Leases 342,594 351,501 362,749 374,357 11,608 3.2% Supplies & Material 65,306 72,309 84,450 85,000 550 0.7% CapitallmprovementProgram 2,121,263 1,107,895 3,733,077 2,693,833 (1,039,244) (27.8)% Total Dollars by Expense Category 14,350,553 14,071,602 20,112,110 19,617,934 (494,176) (2.5)% Revenues Charges for Services 80,292 - - - - -% Charges to Other Funds 13,253,295 13,805,902 13,735,894 14,570,588 834,694 6.1% Operating Transfers -In 2,479,564 2,077,784 2,031,612 1,365,708 (665,904) (32.8)% INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 299 INFORMATION TECHNOLOGY 3udget Summary FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget Other Revenue 130,864 32,826 Return on Investments 381,527 435,369 343,300 440,667 Total Revenues 16,194,678 16,319,055 16,241,669 16,409,789 FY 2019 Change $ (98,038) 97,367 168,120 FY 2019 Change % (74.9)% 28.4% 1.0% 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 Desktop Technician Director Administrative Services/ CFO Director Information Technology/ CIO 9.00 10.50 9.50 9.00 (0.50) (5.26)% 8.10 5.10 6.10 6.10 13.48 13.48 14.48 14.48 5.00 7.00 7.00 7.00 35.58 36.08 37.08 36.58 (0.50) (1.35)% FY 2016 Actuals 1.00 FY 2017 Actuals 1.00 0.10 1.00 1.00 FY 2018 Adopted Budget 1.00 0.10 FY 2019 Adopted Budget 1.00 0.10 1.00 1.00 5.00 6.00 6.00 6.00 0.10 1.00 1.00 1.00 Manager Information Technology 4.00 4.00 4.00 Manager Information Technology Security Principal Business Analyst 1.00 1.00 1.00 1.00 Senior Business Analyst 2.00 2.00 2.00 2.00 Senior Management Analyst 1.00 1.00 1.00 1.00 Senior Technologist 15.00 16.00 17.00 18.00 Technologist 2.00 1.00 1.00 1.00 Sub -total: Full -Time Equivalent Positions 1.00 1.00 1.00 1.00 3.00 1.00 34.10 35.10 36.10 36.10 1.00 FY 2019 Change FTE FY 2019 Salary 90,709 19,968 - 152,734 - 554,085 (1.00) 241,045 451,547 154,336 - 153,171 279,698 129,459 2,385,697 152,734 - 4,765,184 300 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET INFORMATION TECHNOLOGY Staffing Job Classification FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted FY 2019 Budget Change FTE FY 2019 Salary Temporary/Hourly Total Positions 1.48 35.58 0.98 36.08 0.98 37.08 0.48 (0.50) 44,928 36.58 (0.50) 4,810,112 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 301 INFORMATION TECHNOLOGY Prior Year Budget 3udget Reconciliation Positions Expenditures Revenues Net Technology Fund 37.08 20,112,110 16,241,669 3,870,441 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings) Geographic Information System (GIS) Replacement Supplemental Pension Trust Fund Contribution Citywide SharePoint Training Capital Improvement Project Funding One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Reduction of 0.5 Management Specialist Capital Improvement Funding Other Contract Adjustments Laptop/Desktop Equipment Costs Infrastructure Contracts Transfer to University Avenue Parking Fund Rents and Leases Accela and Building Eye Contracts Transfer from the General Fund (Technology Surcharge) Office of the CIO Reductions (Training, Supplemental Staffing, Civic Innovation) Elimination of Application Maintenance Contingency Return on Investments Systems Maintenance Contract Alignment Charges to Other Funds - Information Technology Services General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Print and Mail Allocated Charges Utilities Allocated Charges (0.50) (500,000) (135,658) (50,000) (3,733,077) (4,418,735) 233,455 2,693,833 84,416 83,180 57,038 7,420 11,608 250,000 900,000 (900,000) (305,096) (30, 510) (1,067,413) (503,019) 75,000 (194,904) (135,658) (19,490) (2,665,664) (3,915,716) 233,455 2,618,833 84,416 83,180 57,038 7,420 11,608 250,000 — 28,045 (28,045) (40,000) — (40,000) (75,000) (145,000) —I 432,435 17,468 869 u — 4,289 97,367 (75,000) (97,367) (145,000) 220,727 (220,727) 432,435 17,468 869 4,289 302 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET INFORMATION TECHNOLOGY 3udget Reconciliation Expenditures Revenues Net Technology Fund Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities (0.50) 424 (12,441) (36,743) 3,567,251 671,139 424 (12,441) (36,743) 2,896,112 Total FY 2019 Base Budget 36.58 19,260,626 16,409,789 2,850,837 Budget Adjustments 1 New City of Palo Alto Website 2 Supplemental Pension Trust Fund Contribution 3 IT Staffing Realignment Total Budget Adjustments Total FY 2019 Adopted Budget 'I 300,000 71,156 (13,848) 357,308 300,000 71,156 (13,848) 357,308 36.581 19, 617, 934 I 16, 409, 789 I 3,208,145 1118 j111 110 5100 1310 0001 011V1001101$° 1110 11000001 10101010. 0011111/ 1'1"8144!" �I 41r1,p100i a10 x13.00 L11000 11 �IyyS■■S11 0101 l�looala �7 8 wi w. ifAl 11 $ 141101' 11100011120010011 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 303 INFORMATION TECHNOLOGY 3udget Adjustments Budget Adjustments 1 New City of Palo Alto Website Positions Expenditures 0.00 I 300,000 Revenues Net Technology Fund 0 300,000 This action adds one-time funding to begin to develop a next generation website for the City of Palo Alto. Since the current City website was established in 2012, the needs of the public have changed and the capabilities of websites have grown more sophisticated. This project will perform a complete redesign, including visual updates, streamline the content management system for City users, make information more accessible to the public, and enhance existing content. These updates will also help ensure that the City's information remains accessible for all users. (Ongoing net costs: $0) Performance Results 0 The development of a new website will enhance accessibility and usability. It will also help make the work of the City more transparent. 2 Supplemental Pension Trust Fund Contribution This action transfers $71,156 from the Information Technology Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Information Technology Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 3 IT Staffing Realignment 0.00 (13,848) 0 (13,848) This action reclassifies 1.0 vacant Manager, Information Technology position to 1.0 Senior Technologist. This action recognizes the current operations of the department in order to more appropriately align with the service delivery needs of the organization. The Senior Technologist position will focus on enterprise -wide projects throughout the organization and serve as a project manager on various initiatives. (Ongoing savings: $13,848) Performance Results 0 0 This action is anticipated to increase the quality of service offered by the IT department and decrease cycle time associated with enterprise -wide projects. 304 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET LIBRARY Mission Statement 4111%1111ar The Palo Alto City Library connects our diverse community through knowledge, resources and opportunities. We 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; promote exploration of library resources to support learning, recreation, and personal enrichment; foster a love of reading, creative expression, and commu- nity engagement for all ages; and develop library facilities, technology, and staff to create a welcoming, inclusive environment in which to share valuable resources and skilled expertise. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 305 LIBRARY DIRECTOR Monique le Conge Ziesenhenne PUBLIC SERVICES DIVISION 1.00 Assistant Director RINCONADA LIBRARY 1.00 Library Services Manager 1.00 Supervising Librarian 1.00 Senior Librarian 1.00 Coordinator, Library Program 3.00 Librarian 1.00 Library Associate 3.00 Library Specialist CHILDREN'S LIBRARY 1.00 Library Services Manager 2.00 Senior Librarian 1.00 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 ADMINISTRATION 1,00 Management Analyst 1.00 Administrative Associate III 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 2019 POSITION TOTALS 47.50 - Full -Time 15.08 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation 306 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 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 ▪ Updated the Library's Strategic Plan FY 2018 - FY 2020. ▪ Continued participation in the California State Library initiative,'California Revealed', which aims to assist local public libraries in partnership with local heritage groups to digitize, preserve, and provide online access to historically significant content about California, e.g. books, documents, recordings, etc. Palo Alto City Library (PACL) and the Woman's Club of Palo Alto are collaborating to make new historical information online. ▪ Began implementation of the Student Success Card, in collaboration with the Palo Alto Unified School District (PAUSD), to ensure that all students have access to PACL collections. ▪ Implemented the eLibrary (formerly called the eBranch) to enhance Library users' online and mobile experience, increased accessibility to collections and services, and increased visibility for PACL resources during web searches. ▪ Completed Positioning Libraries For a Virtual Future, a grant -funded project to test greeter robots and a 3-D modeling workstation which resulted in less waste for 3-D printing and greater familiarity with the use of robots in the library. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 307 LIBRARY • Began implementation of a total business solution to replace the outdated public personal computer (PC) management system, printing, and scanning. ▪ Reviewed international languages collections to ensure that they are in alignment with PAUSD statistics of languages other than English spoken at home to better reflect community needs. • Participated in the California State Library initiative 'California Listens' where community members created short films about their experiences coming to Palo Alto and/or being a part of the community. Films were added to the PACL digital collection (https:// library.cityofpaloalto.org/california-listens/). ▪ PACL initiated several new special events and programs: Walk and Roll Library Tour, Solar Eclipse program, Celebrating Cultures (Diwali program, Day of the Dead altar), Social Justice Book Club. ▪ Updated the collection maintenance plan and the collection development policy. Initiatives ▪ Host a ReMaker Faire in 2018, which is grant -funded by the Pacific Library Partnership (PLP) to provide a one -day event based on the model of a Maker Faire. The event will be presented in partnership with appropriate City departments and community organizations to emphasize ways to reuse materials, promote Zero Waste and sustainability efforts at Palo Alto City Libraries (PACL) and throughout the City. ▪ Present a region -wide library leadership event to introduce thinking and planning regarding the future of libraries, funded by a grant from the Pacific Library Partnership. • Test a collaborative Senior Outreach Project with the Palo Alto Fire Department to provide homebound library services and safety/wellness information. ▪ Seek out new partners to continue 'California Revealed' digitization project. ▪ Host events for children in the community to code library robots. • Present digital literacy training and increase awareness, particularly in the area of protecting privacy. ▪ Gamification of library resources, programs, and services to attract traditionally non -library users to utilize the library. • Offer wireless printing in all of the library branches. Goals and Objectives GOAL 1 Be the place where everyone can learn anything. Strategies: • Provide early childhood literacy programs based on current research in child development and learning. 308 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET LIBRARY ▪ Create learning opportunities for community members to be able to make sense of and succeed in our changing society. ▪ 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. • Provide tools for improving all types of literacy. • Provide opportunities to read for learning and for pleasure. GOAL 2 Be the partner of choice for community organizations. Strategies: ▪ Support Project Safety Net's programs to promote youth well-being and implement 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 staff to community organizations in order to support their goals and collaborate activities ▪ Encourage relationships with community organizations that enhance library services and programs. GOAL 3 Create engagement opportunities by being the place for community conversations about needs and aspirations. Strategies: ▪ Provide a forum to explore issues of local interest and current events. • Engage community members in library services as volunteers and program advisors. ▪ Connect community members to exchange and share stories, interests, and skills. GOAL 4 Leverage technology to integrate the library into the lives of community members. Strategies: • Enhance unique and local collections. • Develop partnerships to enhance customers' digital experiences. • Plan and implement a social media strategy. ▪ Produce web content that is relevant to the needs and interests of our diverse audiences. ▪ Facilitate access for library users to resources that enable them to create content. ▪ Provide staff training and technology infrastructure to support digital projects. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 309 LIBRARY GOAL 5 Provide a fulfilling library experience for our community because of the expertise and effort of our dynamic staff. Strategies: • Attract and retain the most skilled and knowledgeable staff. ▪ Motivate and recognize staff through opportunities to innovate and be creative. ▪ Explore opportunities for improving employee work -life balance. ▪ Support and promote efforts to make it possible for staff to live in or near Palo Alto. • Create opportunities for staff members to bring their talents and interests to work. 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 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of teens Description Purpose Status 4,559 6,059 6,785 6,241 This measure tracks the level of interest and participation in the library's recreational reading programs. 6,366 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. 310 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET LIBRARY PERCENT OF SURVEYED RESIDENTS RATING SATISFACTION WITH LIBRARY DEPARTMENT SERVICES AS GOOD OR EXCELLENT Connects Palo Alto's diverse community through knowledge, resources, and opportunities. Objective Maintain and enhance the community's satisfaction with library services. Goal Status Workload Variety of Library Materials Neighborhood Branch Libraries Public Library Services Recommend Palo Alto's Libraries to Friends FY 2016 Actuals 82.00% 89.00% 91.00% FY 2017 Actuals 86.00% 93.00% 92.00% FY 2018 Adopted 86.00% 93.00% 92.00% FY 2018 Estimated 87.00% 93.00% 93.00% FY 2019 Adopted 88.00% 94.00% 93.00% N/A 91.00% 91.00% 91.00% 92.00% These measures track the percent of residents rating overall library services to the community as good or excellent. This data is collected as part of the National Description 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. Purpose Community satisfaction with the Library Department is an important assessment of the quality of services provided to the City and its residents. Since 2007, the community's satisfaction for each of these objectives has increased, ranging from 11% to 29%. It is likely that new/renovated facilities, increased programming and services, expanded collections, and new technologies have contributed to these increases. Should budget allocations be reduced for maintaining facilities and/or technology, number of staff, or reduced collections, it is possible that these percentages could decline. Measures Meeting Room Reservations Virtual visits to the library Checkouts of library materials Visits to library branches Annual turnover rate of library collections FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 9,943 12,434 10,000 12,807 13,063 804,194 2,018,978 828,320 844,886 1,400,926 1,524,614 1,450,000 1,570,352 1,601,759 1,083,225 1,921,738 831,206 1,031,054 873,265 1,061,985 3.04 3.76 3.20 3.00 3.20 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 311 LIBRARY 3udget Summary FY 2016 Actuals Dollars by Division Administration 832,826 1,169,323 879,935 1,042,232 162,297 Collection and Technical Services 2,217,832 2,529,570 2,574,027 2,704,162 130,135 Public Services 4,909,335 5,254,508 5,992,892 5,977,105 (15,786) Total 7,959,994 8,953,402 9,446,853 9,723,499 276,646 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 18.4% 5.1% (0.3)% 2.9% Dollars by Category Salary & Benefits Healthcare 760,110 915,672 990,284 940,644 (49,640) (5.0)% Other Benefits 116,669 105,382 126,728 128,852 2,124 1.7% Overtime 36,276 10,063 68,783 70,571 1,788 2.6% Pension 849,070 1,001,520 1,132,460 1,167,087 34,626 3.1% Retiree Medical 398,190 435,745 458,425 444,128 (14,297) (3.1)% Salary 3,851,473 4,208,827 4,409,306 4,504,861 95,555 2.2% Workers' Compensation 7,458 15,681 139,838 100,737 (39,101) (28.0)% Total Salary & Benefits 6,019,245 6,692,891 7,325,825 7,356,879 31,055 0.4% Allocated Charges 664,610 929,613 939,703 1,110,435 170,732 18.2% Contract Services 244,150 350,139 350,065 353,065 3,000 0.9% Facilities & Equipment 13,360 17,683 17,900 17,900 - -% General Expense 90,618 141,595 81,430 90,430 9,000 11.1% Operating Transfers -Out 59,859 59,859 -% Supplies & Material 928,011 821,480 731,931 734,931 3,000 0.4% Total Dollars by Expense 7,959,994 8,953,402 9,446,853 9,723,499 276,646 2.9% Category Revenues Charges for Services 21,690 22,751 25,460 25,461 1 -% Operating Transfers -In 15,000 15,000 -% Other Revenue 72,484 58,843 23,600 51,400 27,800 117.8% Other Taxes and Fines 147,244 92,800 152,225 124,433 (27,792) (18.3)% Rental Income 1,770 - - - -% Total Revenues 243,188 174,393 201,285 216,294 15,009 7.5% 312 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET LIBRARY 3udget Summary 1 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Positions by Division Administration 0.40 0.40 0.40 0.40 - -% Collection and Technical Services 11.64 13.24 13.24 13.55 0.31 2.34% Public Services 52.04 49.94 49.94 48.63 (1.31) (2.62)% Total 64.08 63.58 63.58 62.58 (1.00) (1.57)% Staffing Administrative Assistant Administrative Associate Ill Job Classification Assistant Director Library Services Business Analyst FY 2016 Actuals 1.00 FY 2017 Actuals 1.00 FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 1.00 1.00 - 83,323 1.00 1.00 1.00 1.00 - 157,768 1.00 1.00 1.00 1.00 - 152,734 Coordinator Library Programs 1.00 1.00 1.00 1.00 - 91,430 Director Libraries 1.00 1.00 1.00 1.00 213,097 Division Head Library Services 1.00 1.00 1.00 1.00 148,262 Librarian 7.00 7.00 7.00 7.00 563,490 Library Associate 7.00 7.00 7.00 7.00 - 509,263 Library Specialist 12.50 12.50 12.50 11.50 (1.00) 791,209 Management Analyst - - 1.00 1.00 - 95,285 Management Assistant 1.00 1.00 - Manager Library Services 4.00 4.00 4.00 4.00 444,018 Senior Librarian 8.50 9.00 9.00 9.00 822,871 Supervising Librarian 2.00 2.00 2.00 2.00 - 192,213 Sub -total: Full -Time Equivalent 4,264,963 Positions 48.00 48.50 48.50 47.50 Temporary/Hourly 16.08 15.08 15.08 15.08 - 776,965 Total Positions 64.08 63.58 63.58 62.58 (1.00) 5,041,927 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 313 (1.00) LIBRARY 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 63.58 9,446,853 201,285 9,245,568 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) 20,476 20,476 One -Time Prior Year Budget Adjustments — 20,476 — 20,476 Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Liability Savings (One-time FY 2019 — (12,716) — (12,716) Savings) Workers' Compensation Savings (One -Time FY (40,145) (40,145) 2019 Savings) Revenue Adjustments General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges Vehicle Replacement Allocated Charges Adjustments to Costs of Ongoing Activities 171,200 171,200 17,853 76,071 4,390 260 64,276 122 281,311 9 9 (9) 17,853 76,071 4,390 260 64,276 122 281,302 Total FY 2019 Base Budget 63.58 9,748,640 201,294 9,547,346 Budget Adjustments 1 Augment International Collection 2 Supplemental Pension Trust Fund Contribution 3 Reduction in Library Special Programming Total Budget Adjustments (1.00) (1.00) 15,000 59,859 (100,000) (25,141) 15,000 15,000 59,859 (100,000) (40,141) Total FY 2019 Adopted Budget 62.58 9,723,499 216,294 9,507,205 314 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 3udget Adjustments "11111RM I Positions 1 Augment International Collection nom This action provides funding from the Library Impact Fee Fund to add material to the Palo Alto City Library's International Languages collection. The additions were recommended by the Library Advisory Commission and reflect the growing diversity of the community while addressing a recent survey result on increasing non-English spoken languages at home. (Ongoing costs: $0) - 0.00 Expenditures Revenues Net General Fund Performance Results 0 The addition of International Languages content will better reflect the community needs and improve overall services. 2 Supplemental Pension Trust Fund Contribution 0.00 59,859 0 59,859 This action transfers $58,859 from the Office of the Library Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Library Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 3 Reduction in Library Special Programming (100,000) 0 (100,000) This action eliminates a vacant 1.0 FTE Library Specialist position in the Library Department. This elimination will not have an impact on operating hours at the Library, but will require that a librarian position currently working on special programming projects, such as children's storytime, to refocus their time to staffing a library desk. It will reduce the Library Department to minimum staffing levels necessary for effective service delivery at current hours. (Ongoing savings: $100,000). Performance Results 0 0 This reduction will not impact basic library services although it will reduce staffing flexibility during peak seasons thus potentially impacting customer satisfaction and the response timelines during these periods. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 315 CITY OF PALO ALTO OFFICE OF EMERGENCY SERVICES Emergency Services is to prevent, prepare for, mitigate, respond to, and recover from all hazards. The purpose of the Office of Emergency Services is to develop, maintain, and sus- tain a citywide, comprehensive, all -hazard, risk -based emergency management pro- gram that engages the whole community. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 317 OFFICE OF EMERGENCY SERVICES EMERGENCY SERVICES DIRECTOR Kenneth Dueker 1.00 Office of Emergency Services Coordinator 1.00 Program Assistant II FY 2019 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. 318 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Description The Office of Emergency Services (OES) develops, maintains, and sustains a citywide, comprehensive, all -hazard, risk -based emergency management program that engages the whole community. Accomplishments • Completed 2017 update of the City of Palo Alto Local Hazards Mitigation and Adaptation Plan (LHMAP) and the Threat and Hazard Identification and Risk Assessment Plan (THIRA). ▪ Completed the Earthquake Annex to the City's Emergency Operations Plan and Community Wildfire Protection Plan. ▪ Served as subject matter expert in the completion of the new Comprehensive Plan Safety Element. ▪ Activated Emergency Operations Center (EOC) to manage the 2017-2018 Storm Season and other events. ▪ Participated with Santa Clara County OES in the project implementation for the Mass Notification System AlertSCC. • Continued to develop the Emergency Services Volunteer (ESV) program and general community public safety awareness through ongoing public education sessions, trainings, and exercises. ▪ In coordination with Public Works, the Police Department, and the City Manager's Office, participated in the Caltrain Intrusion Detection System (IDS) solicitation and vendor selection. ▪ Continued to work with regional public safety partners on a wide range of planned and special events, ranging from visits by 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 work with Development Services, Public Works, and other City staff to develop a damage assessment process. ▪ Continue to develop other emergency plans, annexes, and protocols. • Explore new technologies, including resilient power for key sites and critical systems. ▪ Continue to work with the IT and Utilities Departments to deploy a new Public Safety Wireless Network. ▪ Continue to work with the Public Works, Police, and Fire Departments on the design of the new Public Safety Building (PSB). OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 319 OFFICE OF EMERGENCY SERVICES Goals and Objectives GOAL 1 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 Emergency Operations Center (EOC), Mobile Emergency Operations Center (MEOC), Department Operations Center, and other assignments. • Maintain emergency management facilities, critical infrastructure, and essential 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 Emergency Services Volunteer Program (ESV) 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. ▪ Administer 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 plans and annexes through an adaptive planning process. 320 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Key Performance ti easures READINESS OF OFFICE OF EMERGENCY SERVICES (OES) RESOURCES Promote the City's operational readiness to implement the emergency management cycle (mitigate, prepare, respond, recover). Maintain OES emergency management facilities, critical infrastructure, and equipment fully mission capable. Goal Objective FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted Percent of Office of Emergency Services resources that are able to respond effectively to hazards Description Purpose Status Workload V 97.00% 97.00% 95.00% 95.00% 95.00% 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 discrete 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. Critical resources will improve the City's ability to manage a response. 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 Vehicles were also fully operational and supported the Police Department's 911 Dispatch Center renovation, which increased the number of estimated deployments for FY 2018. easures FY 2016 FY 2017 Actuals Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of presentations, training sessions, and exercises Number of deployments of the EOC, MEOC, and ICP* *ICP - Incident Command Post 234 46 182 37 125 40 150 75 150 40 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 321 OFFICE OF EMERGENCY SERVICES 3udget Summary Dollars by Division Emergency Services Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1,044,478 983,124 1,038,721 1,515,114 476,393 45.9% 1,044,478 983,124 1,038,721 1,515,114 476,393 45.9% Dollars by Category Salary & Benefits Healthcare 32,971 37,852 37,420 38,056 636 1.7% Other Benefits 13,436 11,830 14,142 14,577 434 3.1% Overtime 260 880 - -% Pension 86,693 101,971 103,920 111,738 7,819 7.5% Retiree Medical 59,094 51,613 54,299 49,844 (4,455) (8.2)% Salary 366,326 385,750 402,563 428,803 26,240 6.5% Workers' Compensation 1,989 1,286 22,588 16,272 (6,316) (28.0)% Total Salary & Benefits 560,769 591,182 634,931 659,289 24,358 3.8% Allocated Charges 43,062 45,905 52,168 89,072 36,904 70.7% Contract Services 229,162 108,138 150,000 559,500 409,500 273.0% Facilities & Equipment 126,759 134,991 117,000 117,000 - -% General Expense 31,038 34,437 34,700 34,700 - -% Operating Transfers -Out - 5,631 5,631 -% Supplies & Material 53,687 68,470 49,922 49,922 -% Total Dollars by Expense Category 1,044,478 983,124 1,038,721 1,515,114 476,393 45.9% Revenues Charges to Other Funds 94,623 94,623 94,623 96,336 1,713 1.8% Total Revenues 94,623 94,623 94,623 96,336 1,713 1.8% Positions by Division Emergency Services Total 3.48 3.48 3.48 3.48 3.48 3.48 3.48 3.48 -% -% 322 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES Staffing Director Office of Emergency Services Job Classification FY 2016 Actuals FY 2018 FY 2017 Adopted Actuals Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 1.00 Office of Emergency Services Coordinator Program Assistant 1.00 1.00 1.00 Program Assistant II Sub -total: Full -Time Equivalent 3.00 3.00 3.00 3.00 — 382,261 Positions Temporary/Hourly 0.48 0.48 0.48 0.48 — 36,649 Total Positions 3.48 3.48 3.48 3.48 — 418,911 1.00 1.00 1.00 162,824 1.00 1.00 1.00 1.00 1.00 134,659 (1.00) 1.00 84,778 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 323 OFFICE OF EMERGENCY SERVICES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 3.48 1,038,721 94,623 944,098 Adjustments to Costs of Ongoing Activities Salary and Benefits Project Safety Net - Video Management System Maintenance (reassign PD to OES) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Revenue Alignment General Liability Insurance Allocated Charges Information Technology Allocated Charges Reallocation (Fire to OES) Printing and Mailing Allocated Charges Vehicle Replacement Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) 18,911 400,000 9,500 1,987 46,960 (11,210) 583 1,713 18,911 400,000 9,500 (1,713) 1,987 46,960 (11,210) 583 (1,415) (6,485) — (6,485) Adjustments to Costs of Ongoing Activities 458,830 1,713 457,117 Total FY 2019 Base Budget 1,401,215 Budget Adjustments 1 Emergency Operations Staffing 2 Supplemental Pension Trust Fund Contribution 11,932 5,631 11,932 5,631 Total Budget Adjustments 17,563 17,563 Total FY 2019 Adopted Budget 3.48 1,515,114 96,336 1,418,778 324 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET OFFICE OF EMERGENCY SERVICES 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Emergency Operations Staffing 0.00 This action reclassifies a 1.0 FTE Program Assistant to a Program Assistant II to meet the planning, administrative, and analytical needs of the Office of Emergency Services. This position will support programs and projects including: the City's administration of the Santa Clara County AlertSCC public alerting platform; administration of the City's Critical Infrastructure Program, including data collection, processing and system management; maintenance of the Department's Protected Critical Infrasturcture Information (PCII) Certification; support the citywide transition to a regional radio system and implementation of a public safety wireless network; and support of the design and capital plan for the new Public Safety Building (PSB). (Ongoing net costs: $11,932) Performance Results © 0 0 This action will ensure that sufficient staffing resources are available to advance public safety initiatives. 2 Supplemental Pension Trust Fund Contribution AIM= 5,631 This action transfers $5,631 from the Office of Emergency Services Department to the General Benefits Fund on a one- time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Office of Emergency Service Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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) 0 5,631 Performance Results Proactively contributing to a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 325 CITY OF PALO ALTO PLANNING & COMMUNITY ENVIRONMENT Mission Statement 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 & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 327 PLANNING & COMMUNITY ENVIRONMENT DIRECTOR PLANNING & COMMUNITY ENVIRONMENT I IMIS OPERATIONS 1.00 Assistant Director CURRENT PLANNING & SPECIAL PROJECTS 1.00 Chief Planning Official 1.00 Planning Manager 2.00 Senior Planner* 4.00 Planner* 1.00 Associate Planner* CODE ENFORCEMENT 1.00 Code Enforcement Lead* 2.00 Code Enforcement Officer LONG RANGE PLANNING 1.00 Planning Divsional Manager 2.00 SeniorPlanner 1.00 Principal Planner 1.00 Associate 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 ENGINEERING 1.00 Chief Transportation Official 1.00 Traffic Engineering Lead 1.00 Senior Transportation Planner 2.00 Project Engineer 1.00 Associate Engineer TRANSPORTATION PROGRAMS 1.00 Transportation Planning Manager 1.00 Parking Operations Lead 1.50 Coodinator Transportation Systems Management 1.00 Associate Planner ADMINISTRATION 1.00 Senior Management Analyst 1.00 Management Analyst 3.00 Administrative Associate Ill 1.00 Administrative Associate I 1.00 Administrative Assistant FY 2019 POSITION TOTALS 42.46 - Full-time 1.90 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 328 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & COMMUNITY ENVIRONMENT Description The Planning and Community Environment (PCE) 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, and other public meetings. Accomplishments ▪ Supported City Council adoption of the updated Comprehensive Plan. ▪ Continued implementation of the Downtown, Evergreen Park/Mayfield, and Southgate Residential Preferential Parking (RPP) Programs. ▪ Supported City Council adoption of an ordinance to enable additional Accessory Dwelling Units (ADU) throughout the City. • Received over $600,000 in grant funding for the North Ventura Coordinated Area Plan process and $4.6 million for El Camino streetscape improvements. ▪ Improved traffic circulation on Middlefield north of Lytton. ▪ Supported City Council adoption of a 5 -year plan for the City's Safe Routes to School program. PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 329 PLANNING & COMMUNITY ENVIRONMENT • Supported adoption of updated housing impact fees. ▪ Supported approval of projects at Avenidas and the Junior Museum and Zoo. • Supported approval of a new hotel at 744 San Antonio and multifamily housing at 3001 El Camino Real. • Supported 49 action items and study sessions at the City Council (59% of the total) as well as 83 total meetings of boards, commissions, and advisory groups and 12 bike rodeos. Initiatives ▪ Convene a citizen working group and begin preparation of the North Ventura Coordinated Area Plan. ▪ Advance tasks identified in the Housing Work Plan adopted by the City Council in February 2018. ▪ Construct parking wayfinding signs and solicit bids for an Automated Parking Guidance System (APGS) for downtown garages. • Support the planning process for grade separations along the Caltrain corridor, including selection of a preferred alternative for environmental review. ▪ Continue improvements to the code enforcement program, including tracking officer caseloads, improving communication with Palo Alto 311 users, and increasing community awareness of code enforcement and related programs. ▪ Continue to support the CEQA and planning processes for key infrastructure projects, including the public safety building and parking garages. ▪ Codify Transportation Demand Management (TDM) requirements from the new Comprehensive Plan and update the City's Transportation Impact Fee program. • Procure new parking permit software and begin transitioning to the new system, enabling enhanced customer service and reporting. ▪ Begin tracking staff time (rather than elapsed time) to complete Individual Review (IR) applications for two story homes and work towards a review time of 60 days. • Develop forms and procedures for applications pursuant to SB 35 (the "by right" housing bill). 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. 330 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & COMMUNITY ENVIRONMENT Objectives: • Improve the review times for Individual Review (IR) applications, Architectural Review (AR) applications, 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 (TMA) 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 & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 331 PLANNING & 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 FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted Percent of surveyed residents rating the quality of code enforcement as "good" or "excellent" Description Purpose Status 52.00% 56.00% 60.00% 52.00% 60.00% This measure tracks residents' opinions through data collected in the National Citizen Survey (NCS). This measure can be used to measure changes in satisfaction as service enhancements to the code enforcement function are implemented. A special custom community survey that focused on code enforcement was conducted along with the 2017 NCS. Residents were asked to rate the extent to which they believed 15 different areas were code enforcement concerns in Palo Alto. Residents ranked only parking and traffic as being moderate or major problems, with ratings of 64 percent and 75 percent, respectively. The next highest rating was gasoline -powered leaf blowers in residential areas, with a rating of 33 percent. Fewer than 25 percent of respondents rated all of the other categories as a moderate or major problem. Survey results can be found at https:/ /www.cityofpaloalto.org/civicax/filebankidocuments/63205. INDIVIDUAL REVIEW AND 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. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of Planning Review of building plan checks completed within 30 days of application intake Description Purpose Status 88.00% 87.00% 90.00% 87.00% 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. 332 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & 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 (TDM) 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. In FY 2018 ridership decreased as a result of the discontinuation of the East Palo Alto shuttle route. Not included in estimates is the elimination of services provided by Valley Transportation Authority (VTA) to South Palo Alto. The department has Status discussed options to backfill these service reductions with the City Council, including increased shuttle services, which are contingent upon additional funding resources. The estimates for annual shuttle bus boarding will continue to be refined as the City evaluates shuttle services in Palo Alto. FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted 181,259 152,261 Workload Measures Number of planning and Architectural Review Board applications completed Average number of days for Planning to first review building permit applications Average number of days from Individual Review application to approval* FY 2016 Actuals 383 20 FY 2017 Actuals 365 152,500 FY 2018 Adopted 175 140,000 140,000 FY 2018 Estimated 364 FY 2019 Adopted 365 25 20 25 20 187 210 125 145 60 * Beginning FY 2019, the measure is revised to consider only the time it takes staff in the review process and excludes time that is dependent on information or follow-up from the applicant. PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 333 PLANNING & COMMUNITY ENVIRONMENT 3udget Summary Dollars by Division Administration Building Planning and Transportation Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 1,590, 566 1,836,650 1,596,380 1,724,122 127,742 12,246 13,692 883 883 7,285,184 6,811,476 6,863,318 7,126,976 263,658 3.8% 8,887,997 8,661,817 8,459,697 8,851,981 392,284 4.6% FY 2019 Change % 8.0% -% Dollars by Category Salary & Benefits Healthcare 414,698 431,634 558,675 517,054 (41,621) (7.4)% Other Benefits 105,503 72,766 103,131 110,460 7,329 7.1% Overtime 59,226 30,373 60,754 54,044 (6,709) (11.0)% Pension 754,646 845,866 980,842 1,058,602 77,760 7.9% Retiree Medical 274,311 300,159 315,782 404,459 88,676 28.1% Salary 3,116,093 3,095,444 3,207,363 3,461,559 254,196 7.9% Workers' Compensation 125,842 11,371 119,435 86,039 (33,396) (28.0)% Total Salary & Benefits 4,850,319 4,787,613 5,345,981 5,692,216 346,235 6.5% Allocated Charges 727,270 671,169 782,009 896,299 114,289 14.6% Contract Services 2,975,806 2,788,586 1,909,939 1,846,439 (63,500) (3.3)% Facilities & Equipment 29,677 10,452 36,850 36,850 - -% General Expense 260,802 357,592 358,718 303,205 (55,513) (15.5)% Operating Transfers -Out 7,607 7,607 7,607 60,879 53,272 700.3% Rents & Leases 1,160 - - - - -% Supplies & Material 35,356 38,798 18,593 16,093 (2,500) (13.4)% Total Dollars by Expense Category 8,887,997 8,661,817 8,459,697 8,851,981 392,284 4.6% Revenues Charges for Services 766,583 919,906 1,286,225 1,383,919 97,694 7.6% Charges to Other Funds 38,603 96,072 - - - -% Operating Transfers -In 128,000 128,000 128,000 128,000 - -% Other Revenue 221,435 92,365 2,500 2,500 - -% Other Taxes and Fines 360,300 544,029 20,390 20,390 -% Permits and Licenses 1,256,265 1,266,891 1,107,239 1,169,350 62,111 5.6% 334 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & COMMUNITY ENVIRONMENT 3udget Summary Rental Income Total Revenues FY 2016 Actuals 72 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 2,771,258 3,047,262 2,544,354 2,704,159 159,805 FY 2019 Change % -% 6.3% Positions by Division Administration 5.20 6.91 6.95 6.75 (0.20) (2.88)% Planning and Transportation 26.72 25.53 24.70 24.83 0.13 0.53% Total 31.92 32.44 31.65 31.58 (0.07) (0.22)% Staffing Job Classification FY 2016 Actuals Administrative Assistant 1.00 Administrative Associate I 1.00 Administrative Associate II Administrative Associate III 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 FY 2017 Actuals 1.00 1.00 2.00 3.00 1.00 1.00 1.00 0.10 0.10 0.20 0.70 1.00 1.00 0.80 1.00 0.50 0.70 1.60 1.60 0.80 0.80 1.00 0.85 0.60 FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 1.00 1.00 - 79,082 1.00 1.00 - 71,529 3.00 2.59 (0.41) 212,509 1.00 202,218 0.73 0.65 (0.08) 75,418 0.10 2.25 2.15 243,256 0.70 0.70 - 61,378 1.00 1.00 - 152,734 1.00 0.99 (0.01) 152,669 0.43 0.64 0.21 115,442 1.60 1.60 167,765 0.80 - 89,758 0.88 1.00 0.80 0.74 (0.14) 81,779 Director Planning/Community 1.00 1.00 1.00 1.00 243,641 Environment Management Analyst 0.40 0.88 0.98 0.80 (0.18) 81,070 Manager Planning 2.00 2.00 2.00 1.00 (1.00) 132,517 Parking Operations -Lead 0.30 0.20 0.10 0.10 13,574 Planner 3.00 3.83 3.83 3.85 0.02 437,950 Planning Division Manager - , 1.00 1.00 154,211 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 335 PLANNING & COMMUNITY ENVIRONMENT Staffing Job Classification FY 2016 Actuals FY 2018 FY 2017 Adopted Actuals Budget FY 2019 Adopted FY 2019 Budget Change FTE FY 2019 Salary Principal Planner Program Assistant II Project Engineer 0.35 0.60 1.65 1.15 0.50 Senior Management Analyst 1.00 1 .00 1.00 Senior Planner 7.64 6.70 6.51 Traffic Engineering -Lead 1.00 0.10 0.38 Transportation Planning Manager 0.20 0.85 0.20 Sub -total: Full -Time Equivalent 31.04 31.56 30.24 30.20 (0.04) 3,761,368 Positions Temporary/Hourly 0.88 0.88 1.41 1.38 (0.03) 134,006 Total Positions 31.92 32.44 31.65 31.58 (0.07) 3,895,375 0.99 0.80 0.88 3.76 0.65 0.41 0.99 (0.60) 0.30 (0.12) (2.75) 0.27 0.21 118,116 112,517 124,357 502,062 84,939 50,878 336 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & COMMUNITY ENVIRONMENT 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 31.65 8,459,697 2,544,354 5,915,343 One -Time Prior Year Budget Adjustments San Mateo County District Grant Information Technology Department Allocation (FY 2016 Salary Savings; one-time) (22,613) 19,178 (22,613) 19,178 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (3,435) (3,435) Salary and Benefits Revenue Alignment Management Development Alignment General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) 316,884 110 39,486 (1,259) 9,963 1,044 43 (28,124) (34,288) 85,846 316,884 (85,846) 110 39,486 (1,259) 9,963 1,044 43 (28,124) (34,288) Adjustments to Costs of Ongoing Activities 303,859 85,846 218,013 Total FY 2019 Base Budget 31.65 8,760,121 2,630,200 6,129,921 Budget Adjustments 1 Technology Support 2 Supplemental Pension Trust Fund Contribution 3 Transportation Program Staffing 4 Planning and Community Environment Staff Funding Alignment 5 Planning Division Staffing Reorganization 6 Reduction in Planning & Community Environment Non -Salary Expenses 73,959 53,272 6,645 (0.07) 57,983 (100,000) 73,959 53,272 6,645 57,983 (100,000) Total Budget Adjustments Total FY 2019 Adopted Budget (0.07) 91,860 73,959 17,901 31.58 8,851,981 2,704,159 6,147,822 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 337 PLANNING & COMMUNITY ENVIRONMENT 3udget Adjustments 1 Technology Support This action increases allocated charges for technical support of the City's centralized permitting system and other technological enhancements. This funding will be used to modify systems as required by ordinance changes and to meet the programmatic needs of the Department to support and enhance fee calculations and collections, metrics and performance measurement tools, workflow integrations, and ancillary programs that provide a geographical view of entitlements and development in the City. This action is offset by an increase to revenue estimates in alignment with the departmental recommendation in FY 2019 to increase fees by 3%. (Ongoing net costs: $0) Performance Results This action will ensure the costs for electronic systems used by the Department will be funded by the uses they support. 2 Supplemental Pension Trust Fund Contribution 53,272 This action transfers $53,272 from the Planning and Community Environment Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Planning and Community Environment Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 3 Transportation Program Staffing 6,645 This action adds a 1.0 FTE Associate Planner position and eliminates a 1.0 FTE Program Assistant II position at a total cost of $25,000 of which $6,645 is realized in the General Fund. The Associate Planner position is recommended to assist with Parking and Transportation programs, including management of data files, grant reporting and monitoring, capital project oversight, and assistance with anticipated parking enhancements currently under City review. The position is budgeted as follows: 0.27 in the General Fund, 0.31 in the General Capital Project Fund, 0.06 in University Avenue, 0.06 in California Avenue, and 0.03 in the Residential Parking Permit (RPP) Fund. (Ongoing Costs: $6,645) Performance Results © 0 This action will ensure that sufficient staffing resources are available to support Parking and Transportation programs. 338 PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PLANNING & COMMUNITY ENVIRONMENT 3udget Adjustments Positions 4 Planning and Community Environment Staff Funding Alignment Expenditures Net Revenues General Fund This action realigns the funding of various positions, resulting in a net reduction of 0.07 FTE positions in the PCE General Fund operating budget. As a result of the higher level position classifications returning to the General Fund, total costs have increased. This realignment of funding is a net -zero transaction that more accurately aligns staff to their anticipated FY 2019 work assignments and projects across all City funds. The largest reallocation reflects a shift of staff resources from the implementation of Parking related capital projects to the operational management of these programs, including communications with the public and City Council, management of contracts, and special projects. In total, a reduction of 0.07 positions are recommended in the General Fund and 1.15 positions in the General Capital Improvement Fund. These reductions are offset by increases to each of the three parking funds: 0.92 positions Residential Parking Permit (RPP) Fund, 0.18 positions California Avenue Fund, and 0.12 positions University Avenue Fund. (Ongoing Costs: $57,983) Performance Results 0 The adjustment of staff alignment ensures that costs are accurately assigned. 5 Planning Division Staffing Reorganization This action reorganizes staffing in the Planning Division of the Planning and Community Environment Department as recommended by a study completed with the Human Resources Department. This is a net -zero transaction that adds 1.0 FTE Planning Division Manager, 1.0 FTE Principal Planner, and 2.0 FTE Associate Planners and deletes 1.0 FTE Planning Manager and 3.0 FTE Senior Planners. The reorganization of staffing resources is intended to enable recruitment and retention of staff and to create an organizational structure that allows new staff to develop their skills before rising higher in the Planning Division team. Performance Results © 0 This action supports succession planning, recruitment, and retention efforts. 6 Reduction in Planning & Community Environment Non -Salary Expenses 0 (100,000) This action reduces various non -salary expenses across the Planning and Community Environment Department to achieve ongoing savings in operating expenses. Reductions will result in more constrained resources for contract services used for the general administration of the Department, various board and commissions, and Individual Review. These reductions do not eliminate available funding for any of these programs, and although are not anticipated to have significant impact on service delivery, will require a prioritization of expenses in the Department. (Ongoing savings: $100,000) Performance Results No significant implications to Planning and Community Environment Department programs are anticipated as a result of this reduction other than cost savings. PLANNING & COMMUNITY ENVIRONMENT • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 339 CITY OF PALO ALTO POLICE Mission Statement 1,11,40- PJ9 PD PALO ALTO — „yacc_ oxairee us ..su-Pe you, ,a+ (AS wilt /I<:sd1:&S YOU Hp, P US% To proudly serve and protect the public with respect and integrity. Purpose In line with the six pillars of the Depart- ment of Justice Implementation Guide- book on 21st Century Policing, the purpose of the Police Department is to: build trust and legitimacy; provide for policy and oversight; implement modern technology solutions and social media platforms; focus on community policing and crime reduc- tion; implement officer training and educa- tion; and ensure officer safety and wellness. POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 341 POLICE POLICE CHIEF Robert Jonsen 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 FY 2019 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. 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 TRAFFIC, PARKING, & SPECIAL EVENT SERVICES 1.00 Police Lieutenant 2.00 Police Sergeant 6.00 Police Agent/Officer 1.00 Public Safety Program Manager 8.00 Community Service Officer 342 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE Description The Police Department (PD) 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 ▪ Completed three Basic Citizens' Police Academies, each an 8 -week course. • Achieved a 93% "excellent/good" overall police services rating from the FY 2017 City Performance Report - National Citizen Survey, a 5% increase from FY 2016. • Continued to grow the number of followers on Department social media platforms allowing more residents to receive accurate and timely public safety information. ▪ Continued to participate in several regional initiatives, which promote emergency preparedness and response capabilities, including the Silicon Valley Regional Interoperability Authority. • Purchased P25 Radio Infrastructure for the FY 2019 implementation of the Silicon Valley Regional Communications System. POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 343 POLICE ▪ Completed a pilot project to test a limited number of body -worn cameras in the Patrol division. ▪ Replaced the City's 911 technology with a new, hosted solution in partnership with the Cities of Mountain View and Los Altos. • Renovated the City's Emergency Communications Center (Dispatch). • Completed executive recruitment for a new Police Chief and transitioned Assistant Police Chief. Initiatives • Continue to host two sessions of Basic Citizens' Police Academy classes per year, and implement new Advanced Citizens' Police Academy courses. • Create and implement a Police Chief's Citizens' Advisory Group. • 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 - Palo Alto PD Mobile. ▪ Continue participation in the design and planning for the new Public Safety Building (PSB). ▪ Migrate to the new 700 MHz P25 regional radio system as part of the county -wide effort led by the Silicon Valley Regional Interoperability Authority. • Continue the development of the joint Records Management System (RMS) system in partnership with cities of Mountain View and Los Altos. ▪ Implement a comprehensive Field Based Video Program, including the addition of body - worn cameras for patrol officers. • Continue Crisis Intervention Training for officers and dispatchers. • Progress ongoing recruitment initiatives to decrease Department vacancies. ▪ Explore and evaluate the officer and employee mindfulness and resiliency programs. Goals and Objectives GOAL 1 Building Trust and Legitimacy: In line with pillar one of the Department of Justice Implementa- tion Guidebook on 21st Century Policing, the Police Department will embrace a guardian mind- set to build public trust and legitimacy. Objectives ▪ Reduce crime rates, traffic violations, and accidents. ▪ Respond promptly to urgent calls for service. • Apprehend and assist with prosecution of offenders. • Provide assistance, enforcement, and guidance to the community regarding animal control. ▪ Provide emergency response to the community in the event of a disaster. 344 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE • Continue development of the Public Safety Building (PSB). GOAL 2 Policy and Oversight: In line with pillar two of the Department of Justice Implementation Guide- book on 21st Century Policing, the Department will collaborate with community members in developing policies though the creation of a Chief's Advisory Group. Objectives: • Continue Office of Independent Review oversight of internal investigations. ▪ Increase quality and timeliness of response to citizens' complaints regarding use of force, canine investigations, and other internal affairs matters. • 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. • Maintain and enhance the community's satisfaction with police services. • Create and implement a Chief's Advisory Group. GOAL 3 Technology and Social Media: In line with pillar three of the Department of Justice Implementa- tion Guidebook on 21st Century Policing, the Department will continue to use Department and Regional technology solutions to enhance services, as well as leveraging social media platforms to fully engage and educate our community. Objectives: ▪ Monitor first year full implementation of body -worn camera program for Patrol officers in the field as part of the Department's enhanced field -based video program. ▪ Engage the community 24/7/365 through social media and outreach programs. ▪ Complete regional Records Management System project. ▪ Research and recommend replacement of mobile data computers. • Implement online reporting. • Enhance technology applications in alignment with national initiatives such as text -to -911. ▪ Implement citywide radio use of the Silicon Valley Regional Communications System (SVRCS). • Enhance the Department's open data initiative efforts by providing additional information to the public. GOAL 4 Community Policing and Crime Reduction: In line with pillar four of the Department of Justice Implementation Guidebook on 21st Century Policing, the Department will continue to engage the community through its cultural mindset that focuses on community policing and commu- nity partnerships. POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 345 POLICE Objectives: • Continue to teach two Basic Adult Citizens' Academies annually. • Implement a Basic Youth Citizens' Academy. ▪ Continue to teach an Advanced Adult Citizens' Academy. • Contribute to the Safe Routes to School Program. ▪ Continue partnership with the Palo Alto Unified School District with the deployment of two School Resource Officers. ▪ Continue to contribute to the evolution of the Trackwatch camera monitoring program along the Caltrain rail lines. GOAL 5 Officer Training and Education: In line with pillar five of the Department of Justice Implementa- tion Guidebook on 21st Century Policing, the Department will continue to enhance in-service officer training in the areas of fair and impartial policing; de-escalation; legal updates; and com- munity relations. The Department will implement continuing education standards and officer wellness programs. Objectives: ▪ Continue to train and educate all employees in fair and impartial policing philosophies. ▪ Ensure all officers receive Crisis Intervention Training. • Implement Crisis Intervention Training for Dispatchers. • Partner with Santa Clara County Mental Health to explore a Psychiatric Evaluation Response Team (PERT). • Train officers on new technologies as they are implemented. GOAL 6 Officer Safety and Wellness: In line with pillar six of the Department of Justice Implementation Guidebook on 21st Century Policing, the Department will ensure that wellness and safety efforts occur at every level of the organization. ▪ Ensure that critical incident defusing and debriefings occur as needed. ▪ Enhance employee assistance resources including urgent or emergency access to a psychologist and employee assistance program referrals for employees and their families. • Continue to provide individual, tactical first -aid kits, anti -ballistic vests, and equipment necessary to perform all aspects of the job. • Stress policies related to safety, in -line with the "Below 100" initiatives, a national initiative to reduce national police officer fatalities to under 100 per year: https://www.below100.org/. ▪ Enhance the Department's peer support program. 346 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE Key Performance ti easures ANIMAL SERVICES RESPONSE TIMES Protect and serve the public through proactive and effective policing, animal services, and emergency preparedness. Goal Objective Respond promptly to animal calls for service. Percent of Palo Alto live animal calls responded to within 45 minutes Description Purpose Status FY 2016 Actuals 89.00% FY 2017 Actuals 89.00% FY 2018 Adopted 90.00% FY 2018 Estimated 89.00% FY 2019 Adopted 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 maintained year over year response times at 89% and anticipates meeting a 90% target in the upcoming year upon full staffing of animal control officer positions. 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. Animal Control Services Crime Prevention Services Traffic Enforcement Services Overall Police Services Description Purpose Status FY 2016 Actuals 77.00% 80.00% 60.00% 88.00% FY 2017 Actuals 80.00% 81.00% 60.00% 93.00% FY 2018 Adopted 77.00% 80.00% 60.00% 90.00% FY 2018 Estimated 77.00% 80.00% 60.00% 88.00% FY 2019 Adopted 80.00% 80.00% 60.00% 90.00% 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. Overall, the Department has maintained or exceeded customer satisfaction levels over the prior year for each of the categories and does not anticipate major changes to FY 2019 targets. The department attributes the variability in these ratings to staffing levels and looks to revise these targets upon successful hiring of vacancies in the traffic and animal control teams. The department intends to recruit positions in the traffic team and is engaged in the City evaluation of the service delivery model for animal control services. POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 347 POLICE POLICE DEPARTMENT RESPONSE TIMES Goal Objective Respond promptly to urgent calls for service. Protect and serve the public through proactive and effective policing, animal services, and emergency preparedness. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of urgent calls responded to within 10 minutes Percent of emergency calls responded to within 6 minutes Description Purpose Status 74.00% 74.00% 90.00% 75.00% 90.00% 63.00% 67.00% 90.00% 70.00% 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 year over year response times for urgent calls has remained constant at 74% while emergency calls have increased from 63% to 67%. Targets for both measures remain unchanged at 90% in FY 2019. The Department attributes these results to the ongoing impacts of increased traffic congestion and departmental vacancies that have reduced supplemental on street staffing typically provided by specialty teams such as the traffic and downtown teams. Workload Measures FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 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) 53,870 1,613 2,889 5:47 8:38 53,901 1,672 2,579 55,000 1,600 2,650 5:39 6:00 8:33 8:00 54,000 1,600 2,600 54,000 1,600 2,600 5:45 6:00 8:30 8:00 2,421 2,359 2,400 2,200 2,300 560 415 450 425 425 348 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE 3udget Summary Dollars by Division Administration Animal Services Field Services Investigations and Crime Prevention Services Parking Services Police Personnel Selection Technical Services Traffic Services Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Total Dollars by Expense Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget 1,194,121 1,372,907 1,038,302 1,575,147 1,582,082 1,894,492 15,696,641 19,438,878 21,705,557 FY 2019 Adopted Budget 1,191,493 1,906,145 21,075,775 4,737,600 4,494,576 4,644,272 4,780,398 1,241,728 1,367,611 1,496,299 1,398,558 1,311,192 1,343,204 7,269,274 8,283,058 8,799,332 2,552,209 1,355,766 1,411,594 35,665,276 39,206,070 42,333,053 2,734,632 1,031,944 2,019,330 5,516,331 2,352,490 15,715,984 949,783 30,320,494 2,969,885 1,388,563 21,460 417,774 3,282 543,819 2,837,397 3,224,954 645,624 694,156 2,010,204 1,700,000 6,472,251 7,304,834 2,666,651 2,805,449 17, 072, 244 18, 396, 666 1,057,455 1,167,029 32,761,826 35,293,089 2,783,927 3,231,864 2,710,594 2,747,528 74,934 69,500 396,720 452,205 3,282 3,436 474,787 535,431 1,626,536 1,351,115 9,064,759 1,352,257 42,348,477 3,441,864 772,237 1,776,500 7,948,102 2,575,257 18,779,800 840,707 36,134,466 3,483,529 1,253,528 34,500 480,205 398,383 3,436 560,431 35,665,276 39,206,070 42,333,053 42,348,477 FY 2019 Change $ 153,190 11,653 (629,782) 136,126 130,237 7,912 265,427 (59,338) 15,425 216,909 78,081 76,500 643,268 (230,193) 383,134 (326,322) 841,377 251,665 (1,494,000) (35,000) 28,000 398,383 25,000 15,425 FY 2019 Change % 14.8% 0.6% (2.9)% 2.9% 8.7% 0.6% 3.0% (4.2)% - % 6.7% 11.2% 4.5% 8.8% (8.2)% 2.1% (28.0)% 2.4% 7.8% (54.4)% (50.4)% 6.2% -% - % 4.7% - % POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 349 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget 1,133,298 1,201,130 1,287,121 1,357,313 427,000 427,000 481,000 481,000 291,554 419,490 290,548 299,900 42,000 - 338,269 267,310 273,016 273,016 1,701,347 1,489,330 1,881,255 1,881,255 211,441 260,297 195,302 230,302 400 645 1,067 1,067 4,145,310 4,065,202 4,409,309 4,523,853 FY 2019 Change $ FY 2019 Change % 70,192 5.5% -% 9,352 3.2% -% - % - % 35,000 17.9% -% 114,544 2.6% 3.30 3.30 5.30 5.30 -% 10.66 10.66 10.56 10.56 - - % 68.80 61.80 73.55 73.55 - -% 14.28 21.28 16.38 16.38 - % 8.75 8.75 7.75 8.75 1.00 12.90% 4.10 5.10 4.10 4.10 - -% 37.00 37.00 37.00 37.00 - - % 11.49 10.49 3.74 2.74 (1.00) (26.74)% 158.38 158.38 158.38 158.38 - - FY 2016 Actuals 1.00 3.00 3.00 1.00 2.00 1.00 FY 2017 Actuals 1.00 3.00 3.00 1.00 2.00 1.00 FY 2018 Adopted Budget 1.00 3.00 3.00 1.00 2.00 1.00 FY 2019 Adopted Budget 1.00 3.00 3.00 1.00 2.00 1.00 FY 2019 Change FTE FY 2019 Salary 90,730 233,202 220,756 78,736 160,037 210,746 350 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE Staffing Job Classification Business Analyst Code Enforcement Officer Communications Manager FY 2016 Actuals 1.20 1.00 Communications Technician 1.00 Community Service Officer 8.50 Court Liaison Officer 1.00 Crime Analyst 1.00 Deputy Director Technical Services Division FY 2017 Actuals 1.20 1.00 1.00 8.50 1.00 1.00 FY 2018 Adopted Budget 1.20 1.00 1.00 1.00 7.50 1.00 1.00 FY 2019 Adopted Budget 1.20 1.00 1.00 1.00 7.50 1.00 1.00 FY 2019 Change FTE FY 2019 Salary 183,281 104,853 114,400 106,523 600,552 104,251 104,251 0.80 0.80 0.80 0.80 - 159,694 Geographic Information System 0.50 0.50 0.50 0.50 64,109 Specialist Police Agent 19.00 19.00 19.00 19.00 - 2,827,261 Police Captain 2.00 2.00 2.00 2.00 - 421,491 Police Chief 1.00 1.00 1.00 1.00 - 270,400 Police Lieutenant 5.00 5.00 5.00 5.00 955,594 Police Officer 50.00 50.00 50.00 50.00 6,594,078 Police Records Specialist II 6.00 6.00 6.00 6.00 - 464,943 Police Records Specialist -Lead 1.00 1.00 1.00 1.00 - 82,915 Police Sergeant 14.00 14.00 14.00 14.00 - 2,340,333 Program Assistant II 1.00 1.00 1.00 1.00 - 84,778 Property Evidence Technician 2.00 2.00 2.00 2.00 160,302 Public Safety Communications 1.00 1.00 1.00 1.00 126,859 Manager Public Safety Dispatcher 16.00 16.00 16.00 - 1,766,623 Public Safety Dispatcher - Lead 4.00 Public Safety Dispatcher I 2.00 Public Safety Dispatcher II 14.00 Public Safety Dispatcher -Lead 4.00 4.00 4.00 499,205 Public Safety Program Manager 2.00 2.00 2.00 2.00 - 249,496 Senior Management Analyst 1.00 1.00 1.00 1.00 - 142,002 Superintendent Animal Services 1.00 1.00 1.00 1.00 - 109,491 Veterinarian 1.00 1.00 1.00 1.00 128,190 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 351 POLICE Staffing Veterinarian Technician Job Classification FY 2016 I Actuals FY 2018 FY 2017 Adopted Actuals Budget FY 2019 Adopted FY 2019 Budget Change FTE FY 2019 Salary Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 2.00 2.00 2.00 155.00 155.00 155.00 3.38 3.38 3.38 2.00 155.00 3.38 150,343 — 19,910,423 244,386 158.38 158.38 158.38 158.38 — 20,154, 809 352 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET POLICE 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 158.38 42,333,053 4,409,309 37,923,744 One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Overtime Adjustment (align with Palo Alto Police Officer's Association contract, ratified April 2016) Crossing Guards (CMR #5658, minimum wage compliance) PD Chief Relocation Package Project Safety Net - Video Management System Maintenance (reassign from PD to OES) Stanford Emergency Communication Services Revenue False Fire Alarm Revenue Alignment PAUSD Revenue Alignment POST Training Reimbursment Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Telecommunications Engineering Associates (TEA) Radio Maintenance Contract Project Safety Net - Eliminate Track Watch Services General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing and Mailing Allocated Charges Utilities Allocated Charges Vehicle Equipment Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities 60,890 — 60,890 - 1,099,910 76,500 43,000 36,000 - (300,000) (15,000) 69,500 (69,500) (1,240,000) 102,638 125,304 8,531 1,920 25,485 (73,104) (335,033) (443,849) 114,544 42,954 62,238 24,352 (15,000) 60,890 60,890 1,099,910 76,500 43,000 36,000 (300,000) (42,954) (62,238) (24,352) 69,500 (69,500) (1,240,000) 102,638 125,304 8,531 1,920 25,485 (73,104) (335,033) (558,393) POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 353 POLICE 3udget Reconciliation Total FY 2019 Base Budget Budget Adjustments 1 Supplemental Pension Trust Fund Contribution Total Budget Adjustments Total FY 2019 Adopted Budget Positions 158.38 398,383 158.38 Expenditures 398,383 Revenues 4,523,853 4,523,853 Net General Fund 37,426,241 398,383 398,383 37,824,624 !..10i-i' • Airt, ., - '' .NOW PALO ALTO /NAINO POLICE mmr.PAPU.wg • 650.3242161 3udget Adjustments udget Ad'ustme 0.00 E.•e:,ditures Revenues Net General Fund 1 Supplemental Pension Trust Fund Contribution 398,383 This action transfers $398,383 from the Police Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Police Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net Pension Liabilities (NPL). 354 POLICE • CITY OF PALO ALTO FISCAL YEAR 2019 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 0 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 by preventing pollution of the creeks and bay, promoting reuse and recycling, and encouraging use of alternative fuel vehicles; ensure continuous operation of the Regional Water Quality Control Plant; provide effi- cient 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 2019 ADOPTED BUDGET 355 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 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 Landscape Architect` 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 3.00 Equipment Operator 1.00 Cement Finisher -Lead 2.00 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 2019 POSITION TOTALS 202.00 - Full -Time 9.56 - Hourly *These positions serve functions that support the Development Services Department ** These positions serve functions that support the Utilities Department 356 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 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 agreements with airport tenants, serves as liaison with the Federal Aviation Administration (FAA) and the Palo Alto flying community; and maintains compliance with FAA regulations. Accomplishments ▪ Advanced progress toward goal of citywide average Pavement Condition Index score of 85 by calendar year 2019, which is within the range of very good to excellent ratings for street conditions. The 2017 calendar year-end score was 84. ▪ Continued implementation of the 2014 Council Infrastructure Plan. Completed 40% of construction of the Fire Station No. 3 Replacement project and began construction of two of the three phases of the Charleston/Arastradero Corridor project. Completed environmental clearance and Council approval of the Highway 101 Bicycle and Pedestrian Overcrossing and New California Avenue Parking Garage projects. Completed initial Architectural Review Board review of designs for the New Downtown Garage and New Public Safety Building projects. • Completed the Matadero Creek Stormwater Pump Station, the last of the seven high - priority storm drain projects outlined in the 2005 Storm Drainage Fee Measure. ▪ Improved dewatering ordinance for basement and underground parking construction sites to require hydrogeological studies for minimizing pumping volume, and to address PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 357 PUBLIC WORKS groundwater exclusionary techniques that dramatically reduce the volume of pumped water. • Completed construction of the Golf Course Reconfiguration project, allowing the new Baylands Golf Links to open in Spring 2018. • Completed the Advanced Water Purification Feasibility Study to improve recycled water quality and the recycled water strategic plan. Awarded contract for a groundwater study of indirect potable water reuse. • Installed new energy efficient gas package in Municipal Services Center Building C and new LED lighting in City Hall Level A. • Completed a request for proposal for janitorial services resulting in award of contract to a new vendor and smooth transition from the prior contractor. Initiatives • Continue managing the 2014 Council Infrastructure Plan (IP) projects as a program and develop a funding strategy that will allow for the completion of the IP projects while maintaining funding in the Capital Improvement Fund for other citywide capital needs. ▪ Continue working toward the goals and objectives identified in the Urban Forest Master Plan. ▪ Build 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. • Complete Municipal Services Center mechanical and electrical improvements and roofing replacements. • Commence environmental documentation for a 1-2 Million Gallons per Day (MGD) microfiltration/ultrafiltration and reverse osmosis facility, complete the groundwater study of indirect potable reuse and evaluation of future recycled water expansion projects. • 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. 358 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary FY 2016 Actuals Dollars by Fund Airport Enterprise Fund General Fund Refuse Fund Storm Drainage Vehicle Replacement & 8,579,657 10,450,914 13,293,051 Maintenance Fund FY 2017 Actuals FY 2018 Adopted Budget 1,681,251 14,342,106 32,569,044 4,150,168 3,893,603 16, 671, 892 30,767,437 8,108, 294 7,182,951 17,021,951 30, 674, 955 6,309,668 FY 2019 Adopted Budget 12,380,506 18,586,577 29,744,645 9,364,028 FY 2019 Change $ 5,197,555 1,564,625 (930,310) 3,054,359 FY 2019 Change % 72.4% 9.2% (3.0)% 48.4% 14,091,495 798,444 6.0% Wastewater Treatment 23,011,975 23,810,516 63,041,886 35,507,663 (27,534,224) (43.7)% Total 84,334,202 93,702,655 137,524,463 119,674,912 (17,849,550) (13.0)% Revenues Charges for Services 143,060 211,441 205,168 205,168 -% Charges to Other Funds 9,560,988 11,532,830 10,916,891 11,407,111 490,220 4.5% From Other Agencies 230,080 2,393,409 38,969,880 9,499,500 (29,470,380) (75.6)% Net Sales 58,904,362 60,349,838 64,071,504 66,255,981 2,184,477 3.4% Operating Transfers -In 2,091,790 1,133,888 396,107 196,107 (200,000) (50.5)% Other Revenue 3,734,842 4,488,760 3,189,000 9,568,500 6,379,500 200.0% Other Taxes and Fines 16,900 (2,200) 6,500 6,500 - -% Permits and Licenses 571,442 787,993 622,300 631,894 9,594 1.5% Rental Income 475,470 688,642 1,680,000 755,400 (924,600) (55.0)% Return on Investments 864,186 997,160 676,220 687,800 11,580 1.7% Total Revenues 76,593,120 82,581,762 120,733,570 99,213,960 (21,519,609) (17.8)% Positions by Fund* Airport Fund 5.88 5.88 5.46 5.46 -% General Fund 56.49 57.85 56.66 52.49 (4.17) (7.36)% Refuse Fund 15.20 15.65 15.65 15.65 -% Storm Drainage Fund 10.32 10.34 13.55 13.55 - -% Vehicle Replacement and 17.26 17.26 17.26 16.53 (0.73) (4.23)% Maintenance Fund Wastewater Treatment Fund 70.37 73.47 71.26 71.26 -% Total 175.52 180.45 179.84 174.94 (4.90) (2.72)% *This table does not reflect positions in the Capital Improvement Fund or the Cubberley Property Infrastructure Funds. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 359 PUBLIC WORKS GENERAL FUND Goals and Objectives GOAL 1 Ensure the City's assets and infrastructure inventory are updated and well -maintained. Objectives: ▪ Use 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. GOAL 2 Provide high quality, cost-effective oversight of the City's capital improvement and facilities maintenance programs. Objectives: ▪ Continue implementation of the 2014 Council Infrastructure Plan for key infrastructure needs, managing the projects as a program. ▪ Provide cost-effective custodial and facilities maintenance services that meet the expectations of the public and provide clean and safe buildings. ▪ Continue implementation of the recommendations identified in the Facilities Organization Study, including data collection, performance standards, bench -marking, and customer satisfaction surveys. ▪ Facilitate improvements to the Municipal Service Center, including mechanical and electrical upgrades and roof replacements. ▪ Continue implementing organizational efficiencies as outlined in the Facility Master Plan Study, specifically analyzing the organizational structure and asset management process recommendations for implementation. 360 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 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. • 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 V ensures 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 2016 FY 2017 Actuals Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted Percent of citizens rating the quality of sidewalk maintenance as "good" or "excellent" Description Purpose Status 61.00% 65.00% 63.00% 66.00% 67.00% 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 62 percent rating would be reached in FY 2017 and the actual measured rating for FY 2017 was 65 percent. In consideration of the continued higher budgets for sidewalk maintenance that allowed for increased sidewalk improvements since FY 2013, the FY 2018 estimated and FY 2019 adopted ratings reflect continued modest increases. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 361 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 2016 Actuals 57.00% FY 2017 Actuals 55.00% FY 2018 Adopted 58.00% FY 2018 Estimated 57.00% FY 2019 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 57 percent rating for FY 2017, but the actual measured rating for FY 2017 was 55 percent. However, in consideration of the continued higher budgets for street maintenance that allowed for increased paving since FY 2012, the FY 2018 estimated and FY 2019 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 2016 Actuals 71.00% FY 2017 Actuals 75.00% FY 2018 Adopted 70.00% FY 2018 Estimated 75.00% FY 2019 Adopted 75.00% 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 began so satisfaction numbers increased to 75 percent in FY 2017. Due to prolonged drought conditions, tree removals increased leaving less time for tree trimming; however, with the drought abating, ratings should remain constant for FY 2018 and FY 2019. 362 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS PAVEMENT CONDITION SCORE Goal Objective Pavement Condition Score Description Purpose Status Ensure the City's assets and infrastructure inventory are updated and well maintained. Maintain and enhance the overall condition of the City's streets. FY 2016 Actuals 82 FY 2017 Actuals 83 FY 2018 Adopted 84 FY 2018 Estimated 84 FY 2019 Adopted 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 the City's streets reduces overall maintenance costs and increases ride satisfaction. 85 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, and the Department remains on schedule to meet this 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 Maintain a standard timeframe for pothole repairs. Percent of potholes repaired within 15 days of notification Description Purpose Status FY 2016 Actuals 93.50% FY 2017 Actuals 85.00% FY 2018 Adopted 90.00% FY 2018 Estimated 80.00% FY 2019 Adopted 80.00% 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 repairs within 15 days 85 percent of the time. FY 2019 percentages will decrease to 80 percent due to a reduction in workforce impacting timeliness of job completion. 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. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 363 PUBLIC WORKS Workload V ensures FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of lane miles resurfaced Percent of lane miles resurfaced 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 39 8.00% 39 8.30% 44 9.30% 31 6.50% 41 8.80% 1,657,480 1,660,832 1,660,832 1,659,028 1,815,298 $1.06 $1.06 $1.67 $2.11 $2.15 $2.11 $2.11 $2.11 $2.21 $2.25 7,403 7,533 7,400 7,000 7,000 5,678 11,194 5,500 8,687 7,000 36,381 36,863 37,254 38,863 38,000 4 10 8 10 10 364 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Dollars by Division General Fund Administration General Fund Engineering Services General Fund Public Services: Streets General Fund Public Services: Structures and Grounds General Fund Public Services: Trees Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Total Dollars by Expense Category Revenues Charges for Services Charges to Other Funds Operating Transfers -In FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget 1,448, 725 1,300,643 1,388,775 1,526,070 849,414 1,058,913 1,424,058 1,408,076 3,335,710 3,651,602 3,926,773 3,679,770 5,901,104 6,427,443 6,188,470 7,610,835 2,807,153 4,233,292 4,093,876 4,361,827 14, 342,106 16, 671, 892 17, 021, 951 18, 586, 577 FY 2019 Change $ FY 2019 Change % 137,295 9.9% (15,982) (1.1)% (247,003) (6.3)% 1,422,364 23.0% 267,951 6.5% 1,564,625 9.2% 978,822 1,141,450 1,194,500 1,145,678 (48,822) (4.1)% 164,500 123,151 148,554 148,624 70 -% 222,549 259,626 171,389 163,631 (7,757) (4.5)% 1,190,406 1,432,169 1,496,241 1,481,087 (15,154) (1.0)% 824,902 902,347 949,314 825,829 (123,486) (13.0)% 4,551,665 5,053,753 5,221,691 5,059,572 (162,118) (3.1)% 43,500 37,720 190,214 133,352 (56,862) (29.9)% 7,976,344 8,950,217 9,371,902 8,957,773 (414,129) (4.4)% 2,786,969 3,039,392 3,198,139 3,489,133 290,994 9.1% 2,325,692 3,341,172 3,221,238 4,827,205 1,605,967 49.9% 255 5,148 2,146 2,146 -% 63,044 60,381 80,599 125,449 44,850 55.6% 16,574 16,574 16,574 94,518 77,944 470.3% 250,707 189,242 220,543 220,543 - -% 922,522 1,069,766 910,811 869,811 (41,000) (4.5)% 14,342,106 16,671,892 17,021,951 18,586,577 1,564,625 9.2% 6,687 1,980,081 196,107 43,096 3,046,528 196,107 53,280 1,819,285 196,107 53,280 2,127,989 196,107 308,704 -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 365 PUBLIC WORKS Total Staffing Job Classification Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate III 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 III Equipment Operator 3udget Summary Other Revenue Permits and Licenses Total Revenues FY 2016 Actuals 15,602 571,442 2,769,920 FY 2017 Actuals 47,179 787,993 4,120,903 FY 2018 Adopted Budget 46,000 622,300 2,736,972 FY 2019 Adopted Budget 54,500 631,894 3,063,770 FY 2019 Change $ 8,500 9,594 326,798 FY 2019 Change % Positions by Division General Fund Administration 2.95 3.05 3.05 3.05 -% General Fund Engineering Services 3.47 4.56 5.29 4.92 (0.37) (6.99)% General Fund Public Services: 18.98 18.02 18.22 15.74 (2.48) (13.61)% Streets General Fund Public Services: 18.16 18.81 17.31 15.83 (1.48) (8.55)% Structures and Grounds General Fund Public Services: Trees 12.93 13.41 12.79 12.95 0.16 1.25% 56.49 57.85 56.66 52.49 (4.17) (7.36)% FY 2016 Actuals 1.00 0.60 2.63 FY 2017 Actuals 1.00 0.60 2.65 0.01 0.85 0.87 0.30 0.30 1.00 1.00 1.80 1.80 3.00 3.00 0.26 0.26 1.00 0.50 1.00 1.00 0.80 0.80 0.40 0.66 1.20 1.47 3.46 3.46 FY 2018 Adopted Budget 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 FY 2019 Adopted Budget FY 2019 Change FTE 1.00 0.60 2.65 0.01 0.87 0.30 1.00 2.00 0.26 1.50 1.00 0.80 0.66 1.47 2.46 FY 2019 Salary 85,654 42,917 205,995 833 - 152,850 34,809 (1.00) 68,517 (1.00) 188,509 26,221 - 128,311 - 232,220 87,855 86,245 143,636 (1.00) 213,441 366 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Facilities Carpenter Facilities Maintenance -Lead Facilities Mechanic Facilities Painter FY 2016 Actuals 1.00 1.85 5.55 1.75 FY 2017 Actuals 1.00 1.85 1.75 Facilities Technician 5.55 Heavy Equipment Operator 2.33 2.33 Heavy Equipment Operator -Lead 0.85 0.85 Inspector, Field Services 0.10 0.11 Landscape Architect Park Planner 0.10 0.10 Management Analyst 0.70 0.70 Manager Facilities 0.90 0.90 Manager Maintenance Operations 1.20 1.20 Manager Urban Forestry 0.96 0.96 Manager Watershed Protection - 0.05 Planning Arborist 0.75 0.75 Project Engineer 0.40 0.50 Project Manager 1.93 2.58 Senior Engineer 0.57 0.79 Senior Management Analyst 1.11 1.11 Senior Project Manager 0.10 0.10 Supervisor Inspection and 0.10 Surveying Surveyor, Public Works 0.10 0.33 Traffic Controller Maintainer I 1.94 1.94 Traffic Controller Maintainer II 2.00 2.00 Tree Maintenance Person 1.00 1.00 Tree Trim/Line Clear 7.00 7.00 Tree Trim/Line Clear -Lead 1.00 1.00 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Adopted Budget 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 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 FY 2019 Adopted Budget 1.00 1.85 1.75 4.05 2.33 0.85 0.11 0.60 0.70 0.90 1.20 0.96 0.05 0.50 2.65 0.79 1.11 0.10 FY 2019 Change FTE 0.50 (0.71) FY 2019 Salary 94,254 225,329 164,945 421,034 228,919 89,336 11,599 71,920 78,784 133,848 157,697 139,696 7,408 70,323 284,681 126,587 130,745 15,631 0.10 - 12,549 0.33 1.94 2.00 1.00 7.00 1.00 35,212 165,255 157,721 87,402 602,287 92,041 54.59 55.93 54.66 51.45 (3.21) 5,303,216 1.90 1.92 2.00 1.04 (0.96) 59,979 56.49 57.85 56.66 52.49 (4.17) 5,363,196 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 367 PUBLIC WORKS 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget One -Time Prior Year Budget Adjustments Fire Hydrant Maintenance Program (reassign to Public Works) Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Custodial Contract (CMR #8323 approved August 14, 2017; year 2 & contingency) Tree Trimming Services (Year 3, 7 -year cycle) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658 approved December 4, 2017) Urban Forestry Mitigation Fee for Tree Planting (Year 2 of 3 -year Plan) General Liability Savings (one-time FY 2019 Savings) Office of Management and Budget Staffing Reorganization (funding shifts) Workers' Compensation Savings (one-time FY 2019 Savings) Fire Hydrant Maintenance Program (transfer to Fire Department) Municipal Fee for Private Development Right of Way Software Application Maintenance Street Cut Fees Increase General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges Public Works Administration Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges Vehicle Replacement Allocated Charges Adjustments to Costs of Ongoing Activities 56.66 17,021,951 82,800 59,439 - 142,239 24,222 1,320,458 177,880 28,980 8,500 (45,762) 6,185 (53,143) (79,000) 59,773 30,601 15,366 1,136 164,018 5,973 1,665,187 2,736,972 8,500 5,460 4,134 268,592 40,112 14,284,979 82,800 59,439 142,239 24,222 1,320,458 177,880 28,980 (45,762) 6,185 (53,143) (79,000) (5,460) (4,134) (268,592) 59,773 30,601 15,366 (40,112) 1,136 164,018 5,973 326,798 1,338,389 368 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation I Total FY 2019 Base Budget 1 Net Positions Expenditures Revenues General Fund 56.66 18,829,377 3,063,770 15,765,607 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Private Development Workgroup Pilot Study 3 Public Safety Custodial Services 4 Urban Forest Master Plan and Tree Trimming Services 5 Streets and Sidewalks Operations Team 6 Water Truck Staffing 7 Trees Division Staffing 77,944 30,000 (1.00) (2.48) (304,080) (0.48) (28,373) (0.21) (18,291) 77,944 30,000 (304,080) (28,373) (18,291) Total Budget Adjustments (4.17) (242,800) — (242,800) Total FY 2019 Adopted Budget 3,063,770 15,522,807 1iq11 r1 IIII PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 369 PUBLIC WORKS 1 Supplemental Pension Trust Fund Contribution 0.00 3udget Adjustments Expenditures 77,944 I 77,944 This action transfers $77,944 from the Public Works Department to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Public Works Department's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Private Development Workgroup Pilot Study 30,000 This action provides one-time funding to review key areas needing more proactive support such as news stand code compliance. Funding will allow for the compilation of a database for which code compliance analysis can be applied and establishment of a process that can bring activities into alignment with existing codes, and streamline future compliance reviews. In addition, funding will provide capacity to assist in the maintenance of the new Right of Way software application for private development projects, ensuring the public is provided timely information of impacts to the public right of way. As both of these initiatives are new, this one-time funding will seek to find ways to establish standards that can be maintained on and ongoing basis with existing staffing; however, the department will evaluate ongoing needs and bring forward any recommended changes in resources as necessary. (Ongoing costs: $0) Performance Results © 0 0 Service delivery is anticipated to improve under this pilot study which will provide support for special projects, performance measures, coverage for the Development Center counter, plan reviews, news rack, Right of Way Management program, indexing table and chair sidewalk encroachments in the public right of way and assisting with the City's paperless office initiatives. 3 Public Safety Custodial Services This action eliminates a vacant 1.0 FTE Building Serviceperson position and adds $90,000 in contractual service funding for custodial services for the Police Department. Currently custodial services throughout the City are primarily provided through an outside vendor; however, City staff continued to provide services to the Police Department's space at City Hall due to background check needs. As a result of the City's most recent custodial contract, it is anticipated that these background needs can be addressed and satisfied by the current vendor, allowing the City to consolidate all service to one contract, streamlining the administration of custodial services throughout the organization. Although there are no immediate budgetary savings as a result of this action, it does reduce the City's long term pension and other post -employment benefits (OPEB) liabilities, and ensures that a high quality of service will still be delivered to the Police Department. (Ongoing costs: $0) Performance Results Shifting this vacant custodial position to the custodial service funding will contain future cost escalation for delivering current services without impacting the quality of services and satisfaction of customers. 370 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 4 Urban Forest Master Plan and Tree Trimming Services 3udget Adjustments Positions Expenditures Net Revenues General Fund This action funds the estimated annual costs to support the Urban Forest Master Plan (UFMP) on an ongoing basis and aligns the tree -trimming contract expenses with the 7 -year cycle. Staff assessed the progress of the tree trimming cycle and determined it is being completed more efficiently than previously anticipated, effectively achieving better than the target 7 -year cycle. Therefore, partial funding allocated for the tree trimming contract ($150,000) will be reallocated to fund the Urban Forest Master Plan on an ongoing basis. (Ongoing costs: $0) Performance Results © © 0 Reallocating this funding will allow the continued support of the UFMP while minimizing impacts to tree trimming services and maintaining the adopted 7 year trimming cycle. 5 Streets and Sidewalks Operations Team Mr-2.48 (304,080) 0 (304,080) This action eliminates 2.48 FTE vacant positions and commensurate supplies and materials ($50,000) in the Public Works Department: 1.0 FTE Cement Finisher, 1.0 FTE Equipment Operator, and 0.48 FTE Part -Time General Laborer. The Public Work's Department currently uses both in-house teams as well as contractual teams to address the streets and sidewalk operations of the City. This reduction in staffing and resources will reduce the City's ability to address non - urgent requests for services called in by constituents. The City will be undertaking a sidewalk assessment study to determine the appropriate maintenance schedule moving forward. Until that study is complete, sufficient staffing resources remain to address urgent requests. Non -urgent requests will be tracked and dealt with through the standard CIP maintenance schedule. These eliminations are anticipated to have minimal impacts on the ability of the City to deal with urgent requests to repair streets and sidewalks. (Ongoing savings: $325,677) Performance Results © 0 Eliminating these vacant positions and supplies and materials will increase non -urgent response times and may impact satisfaction of customers. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 371 PUBLIC WORKS 3udget Adjustments ud•et Adjustments Position Net Expenditures Revenues General Fund 6 Water Truck Staffing -0.48 ••• (28,373) 0 (28,373) This action eliminates a vacant 0.48 FTE Administrative Specialist I in the Urban Forest Section of the Public Works Department. This position was previously necessary to staff a water truck to ensure that vegetation throughout the City received proper watering, especially during the most recent drought. However, with an end to the drought conditions that California previously faced and the continued trend towards landscaping that is more water -efficient, this position is no longer necessary. This elimination is anticipated to have minimal impacts on the City's ability to adequately water vegetation. (Ongoing savings: $30,353) Performance Results Eliminating this vacant Administrative Specialist I position will not impact the quality of services or satisfaction of customers. 7 Trees Division Staffing (18, 291) (18,291) This action eliminates a vacant 1.0 FTE Planning Arborist and adds a 1.0 FTE Landscape Architect in the Public Works Department. This action maintains the same net FTE count, and changes where the FTE is allocated. The Planning Arborist position provided support to three service areas in the department: 34 percent trees administration, 37 percent permitting and plan review, and 29 percent Development Services support. The Landscape Architect position that's recommended will provide support to two service areas: 50 percent trees administration and 50 percent Development Services Support. The Landscape Architect position will assume the current duties of the Planning Arborist position with development review, supervision of staffing, development of new policies and technical specifications, and additional duties such as ensuring compliance with State and local ordinances (including the California Water Efficient Landscape Ordinance). The existing Planning Arborist position will no longer suffice under new state requirements that expanded the necessary credentials such as the requirement for a landscape architect license, which a Landscape Architect position would fulfill. In addition, the higher level of staffing will provide additional capacity to address the implementation of programs for the Urban Forest Master Plan, Parks Master Plan, City of Palo Alto Comprehensive Plan, and upcoming Green Infrastructure Plan. Some responsibilities of the Landscape Architect are cost -recovered in the Municipal Fee Schedule through the Development Services Department. Overall, the net implications of realigning staffing levels and funding allocations is anticipated to cost $33,000 with a portion of this change resulting in a savings of $18,000 in the Public Works General Fund (due to percent allocated decreasing) and additional cost of $52,000 in the Development Services Department (due to percent allocated increasing). The increased costs in Development Services are anticipated to be partially offset by fee revenues for architectural review of $40,000. (Ongoing savings: $23,391) Performance Results This action will allow the City to comply with evolving requirements with minimal cost implications and maintain quality of service delivery. 372 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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 fourth busiest airport in the Bay Area, averaging 160,000 annual operations; open 24 hours each day, 365 days annually; and has a Federal Aviation Administration staffed air traffic control tower. Accomplishments ▪ Completed design and construction of Phase I of the Apron Reconstruction project utilizing an FAA grant reimbursement awarded for 90% of project costs. ▪ Executed Airport Aircraft Storage License Agreements with hangar and tie -down tenants, transitioning successfully from the legacy contracts acquired from the County of Santa Clara. ▪ Completed design of Phase II of the Airport Apron Reconstruction project and the invitation for request for proposal. Initiatives ▪ Adopt and implement Rules and Regulations and Minimum Standards for the airport operations and leases. ▪ Award and complete Phase II construction work on the Airport Apron Reconstruction project, and complete Phase I I I design work. ▪ Develop an Airport Business Plan, including a facilities assessment to establish goals, objectives and action plans that will frame the day-to-day operation and management of the airport as well as identify capital improvements and inform staffing decisions. ▪ Continue seeking grant funding opportunities from the Federal Aviation Administration (FAA) and other agencies for capital improvements. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 373 I Goals and Objectives GOAL Operate a safe and viable airport as an enterprise fund while controlling expenses and generat- ing sufficient revenues to become self-sufficient. Objectives: • Maintain compliance with federal and state requirements for airfield conditions. • Continue to follow industry standards and trends in staff training and education. • Adopt and implement an Airport Business Plan to guide future development and ensure 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 Measures A 'RCRAFT OPERATIONS Goal Track the number of annual aircraft operations. Objective Provide a safe, aesthetically pleasing and profitable airport. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of aircraft operations 160,200 149,000 160,000 150,000 160,000 Description 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 twelfth busiest 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. Purpose Providing a safe, well maintained and attractive airport will appeal to the tenants, pilots, visitors, outside agencies, residents and the flying community at large. Status Total operations were 149,000 in FY 2017 and estimated to be 150,000 in FY 2018 and increase to 160,000 in FY 2019. Operations are affected by construction, weather and training schools in the area. 374 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS PERCENTAGE OF TIE -DOWNS LEASED Goal Objective Percentage of Tie -downs Leased Description Purpose Status Maximize tie -down space occupancy. Increase tenant occupancy by providing a safe and well -maintained airport that is also cost recoverable. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 68.00% 70.00% 70.00% 65.00% 70.00% The City of Palo Alto operates and maintains the Palo Alto Airport and provides airport users with safe transportation options and a high level of airport services. The airport has a total of 510 tie -down spaces, including spaces under construction or maintenance. Out of the total number spaces, 468 are available to rent. 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 is responsible for maintaining 102.4 acres of airport facilities, infrastructure and equipment; and managing over 250 tenants and 329 leased tie - down spaces. In FY 2017 the percentage of leased rentable tie -downs was 70% and decreased to 65% in FY 2018. The percentage of leased rentable tie -downs is anticipated to increase to 70% in FY 2019. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 375 PUBLIC WORKS 3udget Summary Dollars by Division Airport Administration Airport Operations CIP Airport Fund Total FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 741,627 692,581 953,802 923,171 (30,631) (3.2)% 269,397 552,847 556,909 688,960 132,052 23.7% 670,226 2,648,175 5,672,241 10,768,374 5,096,134 89.8% 1,681,251 3,893,603 7,182,951 12,380,506 5,197,555 72.4% Dollars by Category Salary & Benefits Healthcare 84,769 97,561 142,902 112,975 (29,927) (20.9)% Other Benefits 18,205 14,956 20,231 20,358 127 0.6% Overtime 12,735 33,105 - - - -% Pension 90,631 100,457 146,008 148,243 2,235 1.5% Retiree Medical 10,254 11,221 11,804 43,990 32,186 272.7% Salary 494,250 507,794 576,577 579,432 2,855 0.5% Workers' Compensation 74 580 20,768 14,961 (5,807) (28.0)% Total Salary & Benefits 710,916 765,673 918,291 919,959 1,669 0.2% Allocated Charges 295,146 340,236 538,108 526,486 (11,622) (2.2)% Contract Services 104,386 174,962 146,700 259,124 112,424 76.6% General Expense 45,345 76,199 30,480 40,480 10,000 32.8% Operating Transfers -Out 9,519 5,611 (3,909) (41.1)% Rents & Leases 4,400 6,106 11,630 11,630 -% Supplies & Material 32,154 47,358 56,472 56,472 - -% Capital Improvement Program 488,905 2,483,071 5,471,751 10,560,743 5,088,992 93.0% Total Dollars by Expense Category 1,681,251 3,893,603 7,182,951 12,380,506 5,197,555 72.4% Revenues From Other Agencies 131,868 2,371,729 4,860,000 9,499,500 4,639,500 95.5% Net Sales 493,046 566,297 644,879 647,767 2,888 0.4% Operating Transfers -In - - 200,000 - (200,000) (100.0)% Other Revenue 108,837 244,186 15,000 975,000 960,000 6,400.0% Rental Income 353,076 539,829 1,680,000 755,400 (924,600) (55.0)% 376 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary Return on Investments Total Revenues Positions by Division Airport Administration Airport Operations CIP Airport Fund Total Staffing Facilities Technician Management Analyst Job Classification FY 2016 Actuals 5,839 1,092,666 FY 2017 Actuals 5,895 3,727,937 7,401,579 11,879,367 4,477,788 60.5% FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 1,700 1,700 2.96 2.00 2.00 2.00 0.50 2.42 2.21 2.21 2.42 1.46 1.25 1.25 5.88 5.88 5.46 5.46 FY 2016 Actuals 1.00 Manager Airport 1.00 Manager Maintenance Operations 1.00 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2017 Actuals 1.00 1.00 1.00 FY 2018 Adopted Budget 1.50 1.00 1.00 1.00 FY 2019 Adopted Budget 1.50 1.00 1.00 1.00 FY 2019 Change FTE -% -% FY 2019 Salary 155,938 83,387 161,574 117,728 3.00 3.00 4.50 4.50 - 518,628 2.88 2.88 0.96 0.96 53,914 5.88 5.88 5.46 5.46 - 572,542 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 377 PUBLIC WORKS 3udget Reconciliation I Positions Expenditures Revenues Net Airport Fund Prior Year Budget 5.46 7,182,951 7,401,579 (218,628) One -Time Prior Year Budget Adjustments Information Technology Department Allocation (one-time project allocations) Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Supplemental Pension Trust Fund Contribution General Fund Loan to the Airport Fund One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one -Time FY 2019 Savings) Airport Tie -Down and Rental Income Capital Improvement Projects and FAA Grant Funding General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges Public Works Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement Allocated Charges Adjustments to Costs of Ongoing Activities (4,832) 8,232 (11,231) — (7,831) (200,000) (200,000) (4,832) 8,232 (11,231) 200,000 192,169 6,638 6,638 (5,135) (5,135) (5,963) (5,963) — — I 38,288 (38,288) — 5,090,695 4,639,500 451,195 27,820 6,008 (56,555) 1 3,236 3,479 4,936 334 - 5,075,492 4,677,788 27,820 6,008 (56,555) 3,236 3,479 4,936 334 397,704 Total FY 2019 Base Budget 5.46 12,250,611 11,879,367 371,245 Budget Adjustments 1 Airport Business Plan and Facility Assessment 2 Supplemental Pension Trust Fund Contribution Total Budget Adjustments 122,424 7,471 129,895 122,424 7,471 129,895 Total FY 2019 Adopted Budget 378 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Luc get Ac ustments udget Adjustme 0.00 — 122,424 Net Revenues Airport Fund 1 Airport Business Plan and Facility Assessment This action provides $122,424 in one-time non -salary funding to complete an airport business plan and an assessment of the Airport's facilities. In FY 2015, the City assumed operations of the airport and has been transitioning away from the legacy County of Santa Clara operations. The business plan will aim to study and set business goals for the Airport as well as providing recommendations to achieve those goals. In addition, the plan will address facility needs coupled with a more detailed facility assessment which will evaluate existing facility repairs and safety needs. These studies will inform airport business operations and guide future investments for the department and City Council consideration. Funding has not been identified to implement recommended changes that may be identified in either of these assessments. It is expected that part of the plan will recognize and assist in getting operating costs fully funded through the enterprise fund in addition to repaying existing loans from the General Fund. (Ongoing Costs: $0) Performance Results 0 The Airport Business Plan and Facilities Assessment will provide strategies on how and where to deploy resources that will receive the highest rate of return, thus increasing customer satisfaction with Airport services. 2 Supplemental Pension Trust Fund Contribution 0.00 7,471 7,471 This action transfers $7,471 from the Airport Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Airport Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 379 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 third and final phase of the commercial recycling and composting ordinance. Nearly 100% of customers have subscribed to compost collection service, potentially diverting approximately 4,500 tons of compostable materials from the garbage. Diverted material is anaerobically digested, generating electricity and compost at the nearby Zero Waste Energy Development Facility in San Jose. • Increased participation in the City's Household Hazardous Waste Program from 4,920 households in Fiscal Year 2016 to 5,600 in Fiscal Year 2018. With a 19% participation rate, Palo Alto is one of the highest in the state compared to Santa Clara. County at 4.6% in 2017 and the state's average of 5.3%. Reuse Program participation also increased from 3,000 to over 5,400 pounds of materials reused. ▪ Purchased Northern California's first electric full-sized waste collection truck for a pilot program, which if successful, will help the City meet its sustainability goals. • Researched and developed concepts for multiple Construction Materials Management initiatives that will ensure buildings are deconstructed and selected materials salvaged or separated for recovery, to be eventually diverted from the landfill. Changes to the Municipal Code will be recommended in early Fiscal Year 2019. ▪ Updated the Zero Waste Plan and identified new policies, programs and infrastructure needed to move the City toward its Zero Waste goals. The updated plan will be recommended in early Fiscal Year 2019. Initiatives • Provide additional outreach and training, perform audits and enforcement of commercial customers waste sorting policies to achieve substantial compliance in the City's waste sorting requirements. 380 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS • Develop and implement outreach and educational strategies to divert residential food scraps to green compost carts and meet a stretch goal of diverting 2,500+ tons of residential food scraps to generate energy and compost. ▪ Develop and recommend a strategy for waste management contracting services that will provide waste collection, hauling, processing services, disposal and outreach beyond 2021. • Continue working with GoBox to develop and foster a reusable takeout container pilot service in the downtown area. 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 waste sent to landfills by implementing new programs and enforcing existing requirements such as the 2016 recycling and composting ordinance. • Develop and recommend new innovative policies and programs to minimize and divert construction -related waste and other 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. ▪ 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 post -closure 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. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 381 PUBLIC WORKS Key Performance ti easures AVERAGE AMOUNT OF GARBAGE (IN POUNDS) GENERATED PER RESIDENT AND DISPOSED IN LANDFILLS EACH DAY 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 Average amount of garbage (in pounds) generated per resident and disposed in landfills each day Description Purpose Status FY 2016 Actuals 3.90 FY 2017 Actuals N/A FY 2018 Adopted N/A FY 2018 Estimated N/A FY 2019 Adopted N/A This measure was replaced in 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 zero waste goals. This measure is being replaced by a similar measure, "Percentage of waste diverted from landfills". 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 Number of households participating in 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 2016 Actuals 4,920 FY 2017 Actuals 5,594 FY 2018 Adopted 5,000 FY 2018 Estimated 5,600 FY 2019 Adopted 5,700 The number of households serviced at the City Household Hazardous Waste station is a direct measurement of the usage of the program which indirectly measures the convenience and public awareness of the program. The more that residents use the Household Hazardous Waste collection program, the less likely 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 19.2 % (percent of the City's households that were serviced by the City's program is based data from California Department of Finance reporting 29,124 housing units in Palo Alto). By comparison, the County of Santa Clara Household Hazardous Waste Program had a participation rate of 4.6%. The State did not generate statewide data for FY 2017, however the historical participation rate was between 4-5%. 382 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS PERCENTAGE OF HOUSEHOLDS WITH MINI -CAN GARBAGE SERVICE 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 Percent of households with mini - can garbage service Description Purpose Status FY 2016 Actuals 38.00% FY 2017 Actuals 40.00% FY 2018 Adopted 42.00% FY 2018 Estimated 42.00% FY 2019 Adopted 44.00% The percentage of households with mini -can garbage service measures reductions in residential garbage generation. As more residents participate in the City's zero waste programs and elect smaller mini -can garbage service, their garbage volume will be reduced. This increases the City's diversion from landfill disposal and helps the community meet its zero waste and sustainability goals. This measure helps 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. PERCENTAGE OF WASTE DIVERTED FROM LANDFILLS 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 waste diverted from landfills Description Purpose Status FY 2016 Actuals 79.00% FY 2017 Actuals 81.50% FY 2018 Adopted 82.00% FY 2018 Estimated 82.00% FY 2019 Adopted 83.00% As of FY 2017, this measure replaced 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 sent to landfills in the previous calendar year based on data from CalRecyle and the per capita disposal rate in landfills. Track waste generation and help verify the City is meeting its Zero Waste goals. The City's waste diversion percentage is currently 82%. The implementation of a new Zero Waste Plan update and initiatives as well as new emphasis on enforcement of waste sorting are expected to raise the diversion measure to 83% or higher for FY 2019. The statewide average diversion rate decreased from 64% to 62%. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 383 PUBLIC WORKS PERCENTAGE OF COMMERCIAL ACCOUNTS WITH COMPOST SERVICE 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. Goal Objective FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percentage of commercial accounts with compost service Description Purpose Status Workload Measures 36.00% 52.00% 75.00% 100.00% 100.00% The percentage of commercial customers with compost service measures commercial customer participation in the City's Zero Waste programs, and compliance with 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. Tracking commercial customer compost service usage provides insight to levels at which they are reducing garbage generation and verifies compliance with the City's Recycling and Composting Ordinance. The Recycling and Composting Ordinance was implemented in April 2016 and has increased the percentage of commercial customers subscribing to compost service from approximately 30% in FY 2015 to nearly 100% by the end of FY 2018. As commercial customers improve their waste sorting capabilities, an increase in waste diverted from landfill disposal should be evident. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Tons of materials recycled or composted 56,438 60,582 58,000 59,300 60,000 384 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary FY 2016 Actuals FY 2017 Actuals Dollars by Division CIP Refuse Fund 2,138,706 125,250 FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Refuse Administration 4,444,281 4,281,218 3,688,125 3,580,855 (107,270) (2.9)% Refuse Collection, Hauling and 5,377,366 5,143,988 4,776,133 21,193,443 16,417,310 343.7% Disposal: Operations Refuse Collection, Hauling and Disposal: Payment to 16,250,898 16,503,152 16,252,909 - (16,252,909) (100.0)% GreenWaste Refuse Solid Waste: Operations 3,324,242 3,578,001 4,478,122 3,519,258 (958,864) (21.4)% Refuse Street Sweeping 1,033,550 1,135,828 1,479,665 1,451,088 (28,577) (1.9)% Total 32,569,044 30,767,437 30,674,955 29,744,645 (930,310) (3.0)% Dollars by Category Salary & Benefits Healthcare 202,393 244,378 262,548 280,929 18,381 7.0% Other Benefits 52,932 39,782 51,305 51,215 (90) (0.2)% Overtime 47,866 21,466 41,789 42,875 1,087 2.6% Pension 358,690 401,494 450,516 445,904 (4,612) (1.0)% Retiree Medical 330,686 361,874 380,709 219,089 (161,621) (42.5)% Salary 1,619,280 1,628,137 1,652,189 1,627,458 (24,731) (1.5)% Workers' Compensation 45,139 328,122 57,126 41,152 (15,973) (28.0)% Total Salary & Benefits 2,656,986 3,025,253 2,896,182 2,708,622 (187,559) (6.5)% Allocated Charges 2,054,784 1,816,408 1,866,433 1,840,811 (25,623) (1.4)% Contract Services 6,298,872 6,200,497 6,880,744 6,205,681 (675,063) (9.8)% Debt Service 565,372 564,840 155,637 196,299 40,662 26.1% Facilities & Equipment - - 3,000 3,000 - -% General Expense 45,244 54,575 112,275 112,275 -% Operating Transfers -Out 27,915 28,718 62,282 42,586 (19,696) (31.6)% Rents & Leases 2,466,105 2,516,090 2,302,687 2,212,657 (90,030) (3.9)% Supplies & Material 112,220 72,309 142,805 142,805 -% Transfer to Infrastructure 68,880 - 27,000 27,000 -% Utility Purchase 16,250,898 16,463,048 16,252,909 16,252,909 - -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 385 PUBLIC WORKS Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2016 Actuals 2,021, 767 32,569,044 FY 2017 Actuals 25,698 FY 2018 Adopted Budget 30,767,437 30,674,955 FY 2019 Adopted Budget 29,744,645 Revenues Charges for Services 38,973 96,858 34,000 34,000 Charges to Other Funds 241,632 210,574 210,552 212,502 1,950 0.9% Net Sales 28,332,871 30,247,663 29,359,500 30,109,500 750,000 2.6% Operating Transfers -In 356,255 13,325 — — — —% Other Revenue 3,311,151 3,219,715 2,546,000 2,546,000 — —% Other Taxes and Fines (2,100) (2,200) — — — —% Rental Income 122,395 148,813 —% Return on Investments 260,539 309,611 178,900 178,900 —% Total Revenues 32,661,715 34,244,359 32,328,952 33,080,902 751,950 2.3% FY 2019 Change $ FY 2019 Change % (930,310) (3.0)% —% Positions by Division CIP Refuse Fund 0.65 0.65 — — — —% Refuse Administration 0.48 0.43 0.43 0.43 —% Refuse Collection, Hauling and 1.00 1.00 1.00 1.00 —% Disposal: Operations Refuse Solid Waste: Operations 10.39 10.89 11.54 11.54 — —% Refuse Street Sweeping 2.68 2.68 2.68 2.68 — —% Total 15.20 15.65 15.65 15.65 — —% 386 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Staffing Account Specialist Job Classification Accountant Assistant Director Public Works Coordinator Public Works Projects Deputy Chief/Fire Marshal Environmental Specialist Facilities Maintenance Lead Hazardous Materials Inspector Landfill Technician Management Analyst Manager Environmental Control Program Manager Maintenance Operations Manager Solid Waste Program Assistant I Project Manager Senior Accountant Senior Management Analyst Street Maintenance Assistant Street Sweeper Operator FY 2016 Actuals 0.15 0.10 0.35 1.00 0.03 1.00 FY 2017 Actuals 0.10 0.10 0.35 FY 2018 Adopted Budget 0.10 0.10 0.35 FY 2019 Adopted Budget 0.10 0.10 0.35 0.03 0.03 0.03 2.00 2.00 2.00 1.00 1.00 1.00 0.02 0.02 0.02 0.02 1.00 1.00 0.10 0.43 0.43 0.43 1.00 1.00 3.00 0.46 1.00 1.00 0.20 0.10 0.08 1.63 Surveyor, Public Works 0.35 Zero Waste Coordinator Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 3.00 3.00 0.46 1.00 1.00 0.20 0.10 0.08 1.00 1.63 2.00 1.00 13.57 14.50 0.46 1.00 1.00 0.20 0.10 0.08 1.00 1.63 3.00 0.46 1.00 1.00 0.20 0.10 0.08 1.00 1.63 FY 2019 Change FTE FY 2019 Salary 7,250 10,082 67,222 5,783 229,869 106,571 3,243 106,571 45,962 384,051 55,829 152,818 78,867 23,080 12,287 9,600 72,771 141,167 1.00 1.00 - 100,816 1,613,839 14.50 14.50 1.63 1.15 1.15 1.15 61,976 15.20 15.65 15.65 15.65 - 1,675,815 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 387 PUBLIC WORKS 3udget Reconciliation I Positions Expenditures Revenues Net Refuse Fund Prior Year Budget 15.65 30,674,955 32,328,952 (1,653,997) One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Zero Waste Plan Update and Community Outreach Landfill Pipe Replacement and Groundwater Studies Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Residential and Commercial Refuse Hauling and Processing Services Debt Service: City of Sunnyvale Solid Waste Revenue Refunding Bonds Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658 approved December 4, 2017) Office of Management and Budget Staffing Reorganization (funding shifts) Custodial Contract Services General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) Postclosure Landfill Rent Transfers to Technology Fund (Citywide technology CIP) Transfers to Infrastructure Fund (City facilities CIP) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print & Mail Allocated Charges Public Works Administration Allocated Charges Refuse Sales Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges 32,721 (500,000) (305,000) (45,052) - (817,331) (174,253) 125,500 40,662 5,459 3,093 (1,023) (14,122) (16,400) (90,030) 2,872 27,000 (41,941) 19,828 (37,228) (2,463) 6,958 99 670 32,721 (500,000) (305,000) (45,052) (817,331) - (174,253) 750,000 (624,500) 1,950 40,662 5,459 3,093 (1,023) (14,122) (16,400) (90,030) 2,872 27,000 (41,941) 19,828 (37,228) (2,463) 6,958 (1,950) 99 670 388 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation Positions Expenditures Revenues Net Refuse Fund Vehicle Replacement Allocated Charges 9,856 9,856 Adjustments to Costs of Ongoing Activities (135,463) 751,950 (887,413) Total FY 2019 Base Budget 15.65 29,722,161 33,080,902 (3,358,741) Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 22,483 22,483 Total Budget Adjustments 22,483 22,483 Total FY 2019 Adopted Budget 15.65 29,744,644 33,080,902 (3,336,258) 3udget Adjustments Budget Adjustments Net Positions Expenditures Revenues Refuse Fund 1 Supplemental Pension Trust Fund Contribution 0.00 22,483 0 22,483 This action transfers $22,483 from the Refuse Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Refuse Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 389 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 consistent with the Stormwater Master Plan updated June 2015 and Green Stormwater Infrastructure projects. 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 construction of the Matadero Creek Stormwater Pump Station project, which included electrical and fiber services, an electrical building with back-up generator and a below ground wet well. • Provided rebates to residents who installed and maintained private stormwater capture devices. ▪ Initiated efforts to develop the Green Stormwater Infrastructure Plan to ensure compliance of the Municipal Regional Permit for stormwater. 390 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Initiatives • Continue implementing the 13 high -priority stormwater management projects outlined in the Stormwater Management Fee ballot measure passed in April 2017. ▪ Continue implementing the Storm Drain Blue Ribbon Committee's recommendations for Green Stormwater Infrastructure improvements. • Complete the Bay -to -Highway 101 flood control project, a cooperative effort with the San Francisquito Creek Joint Powers Authority and continue to assist with outreach and planning of the 'San Francisquito Creek: Upstream to Highway 101' Project. • Complete the Green Stormwater Infrastructure Plan for the City to comply with new State of California stormwater regulations. • Implement the City's Long -Term Trash Reduction Plan to achieve an 80% reduction in the volume of trash entering local creeks and San Francisco Bay through local storm drains. Goals and Objectives GOAL `i Effectively manage the storm drain system to ensure adequate local drainage. Objectives: • Systematically clean storm drain lines to prevent backups and ponding on City streets. ▪ Complete the 13 high -priority stormwater management projects, Green Stormwater Infrastructure improvements, and the Storm Drain Blue Ribbon Committee's recommendation for stormwater management programs outlined in the Stormwater Management Fee ballot measure passed in April 2017. • Assist with inter -agency projects such as the 'San Francisquito Creek: Upstream to Highway 101' Project. GOAL 2 Reduce stormwater runoff and protect the quality of waters discharged to creeks and San Fran- cisco Bay. Objectives: • Continue to comply with the Municipal Regional Stormwater Discharge Permit for stormwater regulations adopted in 2015. ▪ Conduct regular inspections of commercial facilities, industrial facilities, and construction sites to ensure compliance with stormwater discharge regulations. ▪ Develop ordinance requirements that are environmentally conscientious such as developing a demolition ordinance that products containing Printed Circuit Boards (PCBs) are disposed of properly as required in the Municipal Regional Stormwater NDPES Permit (MRP) 2.0. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 391 PUBLIC WORKS Key Performance ti easures CITIZEN SURVEY - STORM DRAIN Goal Effectively manage the storm drainage system to ensure adequate local drainage. Objective Measure ratings from residents on the quality of storm drainage. Percent of respondents rating the quality of storm drainage as good or excellent Description Purpose Status FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 Adopted 75.00% 81.00% 80.00% 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. Obtain feedback from residents on whether storm drains are being maintained adequately in order to determine if the program's resources are appropriate. The quality of storm drainage has been achieving between 75% and 81 % satisfaction since FY 2016. The City is estimating to maintain an 80% rating. 392 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS PERCENT OF INSPECTIONS IN COMPLIANCE WITH STORM WATER 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of inspections in compliance with storm water regulations Description Purpose Status 83.00% 85.00% 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 2017, inspected sites included 38 industries, 63 automotive facilities, 101 construction sites, and approximately one third of the 377 restaurants on the inspection list. The FY 2018 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. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 393 PUBLIC WORKS NUMBER OF CAPITAL PROJECTS ON THE STORM DRAINAGE FEE BALLOT MEASURE COMPLETED Goal Effectively manage the storm drainage system to ensure adequate local drainage. Manage a capital improvement program that utilizes annual revenues and staff Objective resources in an efficient manner to complete capital improvement projects resulting from Storm Ballot Measures. Number of capital projects completed (2005 Ballot Measure) Number of capital projects completed (2017 Ballot Measure) Description Purpose Status FY 2016 Actuals 5 N/A FY 2017 Actuals 6 N/A FY 2018 Adopted 7 0 FY 2018 Estimated 7 0 FY 2019 Adopted 7 0 Public Works Engineering Services staff manages a capital improvement program to increase the capacity and maintain the condition of the storm system infrastructure in accordance with Storm Ballot Measures. The storm drain system must be improved and maintained on a regular basis so that it will continue to provide service to the community. In Fiscal Year 2018, staff completed all seven of the capital improvement projects identified in the 2005 Storm Drainage Fee Measure. In total, thirteen capital improvement projects were identified in the 2017 Storm Water Management Fee Measure. The first project in the 2017 Storm Water Management Fee Measure is scheduled to start in Fiscal Year 2019 and be completed in Fall 2020. 394 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary FY 2016 Actuals Dollars by Division CIP Storm Drainage Fund 1,084,083 5,139,312 804,875 4,056,012 3,251,137 403.9% Storm Drainage Administration 777,068 938,434 1,207,070 891,557 (315,513) (26.1)% Storm Drainage Environmental 378,978 (61,813) 952,985 953,599 614 0.1% Compliance Storm Drainage Operations and 1,771,220 1,964,235 3,200,530 3,328,062 127,532 4.0% Maintenance Storm Drainage Systems 138,820 128,127 144,209 134,798 (9,411) (6.5)% Improvement Flood Control Total 4,150,168 8,108,294 6,309,668 9,364,028 3,054,359 48.4% FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Dollars by Category Salary & Benefits Healthcare 192,406 198,979 253,686 243,089 (10,597) (4.2)% Other Benefits 28,052 21,435 41,466 42,217 751 1.8% Overtime 43,463 24,941 49,429 50,714 1,285 2.6% Pension 259,855 290,983 406,203 418,581 12,378 3.0% Retiree Medical 57,698 63,585 66,895 144,909 78,014 116.6% Salary 945,028 1,017,360 1,428,769 1,462,271 33,502 2.3% Workers' Compensation 6,707 19,694 39,437 28,410 (11,027) (28.0)% Total Salary & Benefits 1,533,210 1,636,977 2,285,884 2,390,191 104,307 4.6% Allocated Charges 761,660 956,201 1,428,009 1,173,474 (254,536) (17.8)% Contract Services 431,506 (66,984) 905,379 907,899 2,520 0.3% Debt Service 373,008 335,877 949,300 949,300 -% Facilities & Equipment 5,286 (260) 7,621 7,621 - -% General Expense 22,153 51,551 148,560 145,960 (2,600) (1.8)% Operating Transfers -Out 5,970 133,472 27,463 21,589 (5,875) (21.4)% Rents & Leases 39,079 40,045 47,482 48,805 1,322 2.8% Supplies & Material 98,514 77,396 94,726 94,726 -% Capital Improvement Program 879,784 4,944,019 415,243 3,624,464 3,209,220 772.9% Total Dollars by Expense Category 4,150,168 8,108,294 6,309,668 9,364,028 3,054,359 48.4% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 395 PUBLIC WORKS 3udget Summary 1 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget Revenues Charges for Services 97,399 71,488 117,888 117,888 Charges to Other Funds 2,961 - - - From Other Agencies 98,212 21,680 - - - Net Sales 6,326,562 6,600,488 6,927,531 7,128,430 200,899 2.9% Operating Transfers -In 233,662 -% Other Revenue (55) (243) -% Other Taxes and Fines - - 2,500 2,500 - -% Return on Investments 178,207 186,051 129,700 129,700 - -% Total Revenues 6,933,986 6,882,425 7,177,619 7,378,518 200,899 2.8% FY 2019 Change $ FY 2019 Change % 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 Ill Assistant Director Public Works Associate Engineer Electrician Electrician -Lead Engineer 2.15 2.17 2.37 2.37 0.65 0.60 0.80 0.80 - 6.98 6.98 9.79 9.79 - 0.54 0.59 0.59 0.59 10.32 10.34 13.55 13.55 FY 2016 Actuals 0.15 0.05 0.10 0.15 0.10 0.20 0.10 1.00 1.00 FY 2017 Actuals 0.10 0.05 0.10 0.15 0.10 0.20 0.19 0.10 1.00 0.90 FY 2018 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 FY 2019 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 FY 2019 Change FTE -% FY 2019 Salary 7,250 5,041 7,153 11,660 8,332 55,472 138,074 10,982 117,571 117,607 396 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Engineering Technician III Equipment Operator Heavy Equipment Operator Heavy Equipment Operator -Lead Industrial Waste Inspector Industrial Waste Investigator Management Analyst Manager Environmental Control Program Manager Maintenance Operations 0.50 0.50 0.50 0.50 57,793 Manager Watershed Protection 0.20 0.20 29,632 Program Assistant II 0.60 0.60 50,867 Project Engineer 0.83 0.83 0.83 0.83 - 116,737 Project Manager 0.15 0.15 0.55 0.55 - 62,471 Senior Accountant 0.10 0.10 0.10 0.10 12,287 0.76 0.76 0.76 0.76 104,364 Senior Industrial Waste Investigator 0.10 0.10 11,603 Surveyor, Public Works 0.12 0.12 0.12 12,804 Technologist 0.30 0.30 0.30 0.30 - 45,820 Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 - 5,111 FY 2016 Actuals 0.20 0.54 0.90 1.15 0.19 0.99 0.20 0.40 FY 2017 Actuals 0.25 0.54 0.90 1.15 0.19 0.80 0.20 0.40 FY 2018 Adopted Budget 0.25 0.54 0.90 1.15 0.40 1.00 0.30 0.70 FY 2019 Adopted Budget 0.25 0.54 0.90 1.15 0.40 1.00 0.30 0.70 FY 2019 Change FTE FY 2019 Salary 24,428 46,853 88,424 120,867 38,627 108,514 31,373 Senior Engineer Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 10.12 10.14 13.35 13.35 79,444 1,527,158 0.20 0.20 0.20 0.20 8,320 10.32 10.34 13.55 13.55 - 1,535,478 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 397 PUBLIC WORKS 3udget Reconciliation 6,309,668 Positions Expenditures Revenues Net Storm Drainage Fund 7,177,619 (867,951) One -Time Prior Year Budget Adjustments Information Technology Department Allocation (FY 2016 Salary Savings; one-time) Stormwater Management Regulatory Requirements (one time equipment) Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Stormwater Rate Adjustment (CPI increase of 2.9%) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658 approved December 4, 2017) Rents & Leases Expenditure Alignment General Liability Savings (one-time FY 2019 savings) Workers' Compensation Savings (one-time FY 2019 savings) Capital Improvement Projects Transfers to Technology Fund (Citywide technology CIP) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges Public Works Administration Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges Vehicle Replacement Allocated Charges Adjustments to Costs of Ongoing Activities 28,649 (2,600) (31,037) (4,988) 28,649 (2,600) (31,037) (4,988) 113,206 113,206 2,520 1,322 (9,749) (11,322) 3,217,174 614 (165,131) 10,758 (210,377) 21,234 5,218 58,949 3,826 3,038,243 189,820 11,079 200,899 (189,820) 2,520 1,322 (9,749) (11,322) 3,217,174 614 (165,131) 10,758 (210,377) 21,234 5,218 (11,079) 58,949 3,826 2,837,344 398 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation Budget Adjustments 1 Supplemental Pension Trust Fund Contribution Total Budget Adjustments Total FY 2019 Adopted Budget Positions 13.55 Expenditures 9,342,924 21,104 21,104 Revenues 7,378,518 Net Storm Drainage Fund 1,964,406 21,104 21,104 9,364,028 7,378,518 1,985,510 3udget Adjustments 1 Supplemental Pension Trust Fund Contribution 21,104 This action transfers $21,104 from the Storm Drainage Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Storm Drainage Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 399 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 51 vehicles and 6 pieces of equipment in FY 2018 to maintain safe, reliable and efficient use of resources. ▪ Completed a fleet cost recovery study. ▪ Removed and replaced the vehicle/equipment wash rack system located at the Municipal Services Center. ▪ Added multi -product fuel dispensers to the fuel station. ▪ Transitioned to 100% paperless work order and parts requisition system. ▪ Awarded a new 5 -year fuel contract, reducing fuel delivery fees and rates for users. ▪ Evaluated and updated rates to ensure cost -recovery is being achieved for Compressed Natural Gas (CNG), shop and commercial maintenance and repairs, and parts. 400 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Initiatives ▪ Perform review of underutilized vehicles annually and remove vehicles from fleet that do not meet the minimum usage requirements per policy. ▪ Continue to reduce the backlog of older vehicles that need to be replaced with more efficient vehicles/equipment to reduce the City's carbon footprint. • Continue implementing Fleet Operational Study recommendations by improving fleet technology, staff training and increasing the number of electric and alternative fuel vehicles/ equipment in the fleet where possible. ▪ Award a multi -year contract to vendor(s) for the removal and installation of outfitting equipment from surplus and new vehicles/equipment. • Begin implementing recommendations from the fleet cost recovery study. Goals and Objectives GOAL 11 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: • Perform fleet utilization analyses annually to ensure the City has an appropriately sized fleet. • Continue replacing the oldest, least efficient vehicles first; replacing with electric or alternative fuel vehicles when possible. ▪ Continue providing staff education and training. ▪ Annually assess rates for Compressed Natural Gas (CNG), shop and commercial maintenance and repairs, and parts to ensure cost -recovery. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 401 PUBLIC WORKS Key Performance ti easures PERCENT OF NON -EMERGENCY VEHICLES IN FLEET THAT ARE USING ALTERNATE FUEL OR TECHNOLOGIES Ensure the City's vehicles, equipment, and storage/dispensing facilities are safe, reliable, and energy efficient. Objective Increase the usage of alternative fuels. Goal Percent of alternative fuel consumed by non -emergency vehicles Description Purpose Status FY 2016 Actuals 26.60% FY 2017 Actuals 33.00% FY 2018 Adopted 29.20% FY 2018 Estimated 33.00% FY 2019 Adopted 33.00% The City fleet is comprised of vehicles and equipment that are primarily gasoline, diesel and compressed natural gas (CNG). To move toward lower emissions goals, the City needs to increase the use of alternative fuel vehicles/equipment. The City's fleet used a total of 300,952 gallons of fuel in FY 2017 among unleaded, diesel and natural gas. It used 99,315 gallons of compressed natural gas, which equates to 33% of alternative fuel use. This is anticipated to remain constant for FY 2018 and FY 2019. Workload Measures Number of vehicles and equipment 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 FY 2016 Actuals 50 4,619 FY 2017 Actuals 51 4,019 559 555 FY 2018 Adopted 55 4,100 FY 2018 Estimated 51 3,690 FY 2019 Adopted 58 3,590 549 558 558 402 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Dollars by Division Vehicle Operations and Maintenance 3udget Summary FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 5,586,194 5,463,507 5,455,409 6,389,688 934,278 17.1% Vehicle Replacement and Additions 2,993,463 4,987,407 7,837,642 7,701,807 (135,834) (1.7)% Total 8,579,657 10,450,914 13,293,051 14,091,495 798,444 6.0% Dollars by Category Salary & Benefits Healthcare 295,595 308,844 369,965 352,799 (17,166) (4.6)% Other Benefits 53,639 36,622 50,507 49,814 (693) (1.4)% Overtime 6,970 4,919 56,610 58,081 1,472 2.6% Pension 321,560 355,106 422,535 436,630 14,095 3.3% Retiree Medical 79,467 86,962 91,489 148,359 56,871 62.2% Salary 1,386,350 1,292,182 1,468,804 1,511,184 42,380 2.9% Workers' Compensation 7,726 4,995 53,936 38,855 (15,082) (28.0)% Total Salary & Benefits 2,151,307 2,089,629 2,513,846 2,595,722 81,877 3.3% Allocated Charges 1,612,792 1,366,290 1,185,639 1,352,629 166,990 14.1% Contract Services 282,187 524,789 511,900 506,696 (5,204) (1.0)% General Expense 57,943 108,857 66,080 70,630 4,550 6.9% Operating Transfers -Out 335,294 38,394 139,562 101,168 263.5% Rents & Leases 177,193 181,834 189,067 195,002 5,935 3.1% Supplies & Material 1,121,338 1,109,794 1,169,216 1,338,816 169,600 14.5% Transfer to Infrastructure 31,711 263,198 - 540,000 540,000 -% Capital Improvement Program 2,809,892 4,806,522 7,618,910 7,352,438 (266,472) (3.5)% Total Dollars by Expense Category 8,579,657 10,450,914 13,293,051 14,091,495 798,444 6.0% Revenues Charges to Other Funds 7,291,552 8,227,916 8,835,554 9,013,976 178,422 2.0% Operating Transfers -In 1,305,766 924,456 - - -% Other Revenue 296,297 312,216 155,000 155,000 -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 403 PUBLIC WORKS 3udget Summary Return on Investments Total Revenues 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 FY 2016 Actuals 192,219 9,085,834 9,661,867 FY 2017 Actuals 197,278 15.86 15.86 1.40 1.40 FY 2018 Adopted Budget 178,300 9,168,854 FY 2019 Adopted Budget FY 2019 Change $ 178,300 9,347,276 178,422 15.86 14.28 1.40 2.25 FY 2019 Change % -% 1.9% (1.58) (9.96)% 0.85 60.71% 17.26 17.26 17.26 16.53 (0.73) (4.23) % FY 2016 Actuals 1.00 0.25 1.00 FY 2017 Actuals 1.00 0.25 1.00 FY 2018 Adopted Budget 1.00 0.25 1.00 FY 2019 Adopted Budget 1.00 0.25 1.00 FY 2019 Change FTE FY 2019 Salary 83,323 43,139 103,750 Equipment Maintenance Service 2.00 2.00 2.00 2.00 - 137,186 Person Fleet Services Coordinator 2.00 2.00 2.00 2.00 - 171,847 Management Analyst 0.20 0.20 0.20 0.20 23,134 Manager Fleet 1.00 1.00 1.00 1.00 129,106 Motor Equipment Mechanic II 6.00 6.00 6.00 6.00 583,371 Motor Equipment Mechanic -Lead 2.00 2.00 2.00 2.00 - 208,003 Project Manager 1.00 1.00 1.00 1.00 95,514 Senior Management Analyst 0.08 0.08 0.08 0.08 9,600 Sub -total: Full -Time Equivalent 16.53 16.53 16.53 16.53 - 1,587,973 Positions Temporary/Hourly 0.73 0.73 0.73 (0.73) Total Positions 17.26 17.26 17.26 16.53 (0.73) 1,587,973 404 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Reconciliation ositions Expenditures Revenues Net Vehicle Replacement and Maintenance Fund 13,293,051 9,168,854 4,124,197 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Delete 0.25 Management Specialist (Fleet Division transition staffing due to vacancies) Vehicle Parts and Fuel Contractual and Managed Services Lease Agreement (Utilities aerial trucks) Rents & Leases Office of Management and Budget Staffing Reorganization (funding shifts) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658 approved December 4, 2017) General Liability Savings (one-time FY 2019 savings) Workers' Compensation Savings (one-time FY 2019 savings) Capital Improvements Projects Transfer to Infrastructure Fund (citywide facilities CIP) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges Public Works Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges (42,254) 26,932 (15,322) 157,103 (0.25) (41,374) 168,136 120,569 5,935 3,093 1,260 (13,334) (15,484) (266,741) 540,000 83,043 18,720 31,581 (160) 12,176 8,487 199,884 (42,254) 26,932 (15,322) 157,103 (41,374) 168,136 120,569 5,935 3,093 1,260 (13,334) (15,484) (266,741) 540,000 83,043 18,720 31,581 (160) 12,176 8,487 (199,884) PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 405 PUBLIC WORKS 3udget Reconciliation Expenditures Revenues Net Vehicle Replacement and Maintenance Fund Adjustments to Costs of Ongoing Activities (0.25) 813,010 199,884 613,126 Total FY 2019 Base Budget 17.01 14,090,740 9,368,738 4,722,002 Budget Adjustments 1 Supplemental Pension Trust Fund Contribution 2 Eliminate Vehicle Stock Part -Time Staffing Total Budget Adjustments (0.48) (0.48) 22,216 (21,462) 754 (21,462) (21,462) 22,216 0 22,216 Total FY 2019 Adopted Budget 16.53 14,091,494 9,347,276 4,744,218 406 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Adjustments Budget Adjustments Positions Expenditures 1 Supplemental Pension Trust Fund Contribution III 0.00 22,216 This action transfers $22,216 from the Vehicle Replacement and Maintenance Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Office of the Wastewater Treatment Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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) Revenues Net Vehicle Replacement and Maintenance Fund 22,216 Performance Results Proactively contributing to the supplemental pension trust will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Eliminate Vehicle Stock Part -Time Staffing -0.48 (21,462) (21,462) This action eliminates a vacant 0.48 FTE Stock Clerk in the Vehicle Replacement and Maintenance Fund to align with current service delivery for vehicle stock. In FY 2017, the City of Palo Alto transitioned from an in-house parts program, administered by the Stock Clerk position, to a service management with NAPA Auto Parts. NAPA provides on -time delivery of various parts and equipment needed for vehicle maintenance. After evaluating the service delivery of NAPA, it was recommended that the Stock Clerk position be eliminated. (Ongoing Savings: $22,897) Performance Results © 0 Eliminating this vacant Stock Clerk position will not impact the quality of services and satisfaction of customers. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 407 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 City's five partner agency regional service areas (Mountain View, Los Altos, Los Altos Hills, Stanford, and East Palo Alto Sanitary District) to ensure the compliance with regulations protecting the San Francisco Bay and the environment. Accomplishments • Awarded contracts to haul and treat sludge from the new sludge dewatering and truck loadout facility currently under construction. With the facility completed and online in January 2019, the two sludge -burning incinerators will be subsequently retired. ▪ Commenced planning and design for secondary treatment upgrade, primary sedimentation tank rehabilitation, and the laboratory/environmental services building as part of fulfilling the Long Range Facilities Plan. ▪ Completed rehabilitation of the old pumping plant. ▪ Completed 10% design for a 1 Million Gallons per Day (MGD) Advanced Water Purification Facility (microfiltration or ultrafiltration followed by reverse osmosis) to improve recycled water quality by reducing salinity. • Completed the business plan and 30% of the design for the Phase I l l Recycled Water Pipeline. Initiatives ▪ Complete construction of the sludge dewatering and truck loadout facility in Winter 2019. ▪ Amend environmental documentation, secure funding, complete design, and begin construction 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. 408 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS • Determine regional opportunities for recycled water expansion such as the feasibility for recycled water expansion to Stanford Research Park and South Palo Alto via the Phase I I I Recycled Water Pipeline. 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: • Improve recycled water quality through source control of salt water intrusion into sanitary sewers and potential future advanced treatment for recycled water. Key Performance Measures DISCHARGE TESTS IN COMPLIANCE Goal Objective Protect the environment and the public's health. Maintain 99% discharge test compliance. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Percent of wastewater treatment discharge tests in compliance Description Purpose Status 99.67% 100.00% 99.00% 99.00% 99.00% The plant has numerous effluent limits and requirements to meet as part of its National Pollutant Discharge Elimination System (NPDES) discharge permit for water discharged to the south San Francisco Bay. 100% compliance with these limits is the goal of the RWQCP. Measure compliance of the RWQCP treatment system's final water discharged compared to the limits established in the NPDES discharge permit. Over 99% of discharge tests are expected to be in compliance with discharge limits in FY 2018 and FY 2019. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 409 PUBLIC WORKS Millions of gallons of recycled water delivered PERCENT OF PASSED FISH ACUTE TOXICITY BIOASSAY TESTS Goal Objective Protect the environment and the public's health. Obtain fish acute toxicity bioassays with 100% survival. FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Fish toxicity test (percent survival) 100.00% 100.00% 100.00% 100.00% Description Percent of acute fish toxicity bioassay tests passed. Fish survival in the bioassay is an indicator that plant discharges to the Bay are safe for receiving water marine life. In FY 2017, all acute toxicity bioassay tests passed with 100% survival rate. This trend is expected to continue in FY 2018 and FY 2019. Purpose Status Workload V 100.00% ensures FY 2016 Actuals FY 2017 FY 2018 Actuals Adopted FY 2018 Estimated FY 2019 Adopted Number of inspections performed annually (Wastewater Treatment) Millions of gallons processed by the Palo Alto's Regional Water Quality 6,387 7,176 6,398 6,777 6,935 Control Plant 230 397 180 301 260 400 216 350 250 350 410 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS 3udget Summary 1 Dollars by Division CIP Wastewater Treatment Fund Wastewater Treatment Systems Improvement Operations Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Debt Service Facilities & Equipment General Expense Operating Transfers -Out Supplies & Material Capital Improvement Program Total Dollars by Expense Category Revenues Charges to Other Funds From Other Agencies 15,951, 637 15, 991, 438 16,486,893 17,196,146 508,324 5,269,540 5,138,056 4,943,198 FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 2,792,222 (1,124,472) 37,988,136 9,824,740 (28,163,396) (74.1)% 709,253 4.3% (194,858) (3.8)% 3,759,792 3,674,009 3,428,802 114,777 3.3% 23,011,975 23,810,516 63,041,886 35,507,663 (27,534,224) (43.7)% 1,196,798 1,333,363 1,391,249 1,444,680 53,430 3.8% 169,747 131,812 194,084 198,135 4,051 2.1% 353,542 260,776 310,126 318,189 8,063 2.6% 1,626,688 1,872,666 2,035,334 2,116,386 81,052 4.0% 745,965 816,320 858,810 853,066 (5,744) (0.7)% 6,340,815 6,698,533 7,357,411 7,563,716 206,305 2.8% 29,874 52,654 270,879 195,136 (75,742) (28.0)% 10,463,429 11,166,125 12,417,893 12,689,308 271,415 2.2% 5,348,078 5,311,133 6,319,704 6,122,299 (197,405) (3.1)% 1,602,264 5,678,025 2,305,354 3,007,839 702,485 30.5% 480,060 443,920 1,468,851 1,468,851 -% 1,888 4,110 7,500 7,500 -% 387,514 449,456 505,029 451,029 (54,000) (10.7)% 11,597 335,213 206,049 104,568 (101,481) (49.3)% 1,962,664 1,630,955 2,050,754 2,090,754 40,000 2.0% 2,754,480 (1,208,420) 37,760,752 9,565,514 (28,195,238) (74.7)% 23,011,975 23,810,516 63,041,886 35,507,663 (27,534,224) (43.7)% 47,723 44,851 51,500 - 34,109,880 52,644 1,144 - (34,109, 880) 2.2% (100.0)% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 411 3,543,579 PUBLIC WORKS 3udget Summary Net Sales Other Revenue Other Taxes and Fines Return on Investments Total Revenues FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 23,751,883 22,935,389 27,139,594 28,370,284 1,230,690 4.5% 3,010 665,707 427,000 5,838,000 5,411,000 1,267.2% 19,000 - 4,000 4,000 - -% 227,383 298,324 187,620 199,200 11,580 6.2% 24,049,000 23,944,271 61,919,594 34,464,128 (27,455,466) (44.3)% Positions by Division CIP Wastewater Treatment Fund Wastewater Treatment 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 Deputy Chief/Fire Marshal Electrician Electrician -Lead Environmental Specialist Hazardous Materials Inspector Industrial Waste Inspector 0.30 1.30 55.69 0.64 13.74 1.30 1.30 56.36 56.16 0.59 0.59 15.22 13.21 56.16 0.59 13.21 70.37 73.47 71.26 71.26 FY 2016 Actuals 0.15 0.25 2.00 0.75 2.00 1.35 1.00 3.00 0.04 2.90 1.00 1.00 0.02 2.80 FY 2017 Actuals 0.10 0.25 2.00 0.75 2.00 1.80 3.00 0.04 2.90 1.00 FY 2018 Adopted Budget 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 0.02 2.80 2.59 FY 2019 Adopted Budget 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 FY 2019 Change FTE -% FY 2019 Salary 7,250 25,204 155,468 129,914 275,912 208,851 312,812 7,711 318,475 117,571 0.02 - 3,243 2.59 - 250,110 412 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Staffing Job Classification Industrial Waste Investigator Laboratory Technician WQC Maintenance Mechanic Management Analyst Manager Environmental Control Program Manager Laboratory Services FY 2016 Actuals 0.80 3.00 7.00 FY 2017 Actuals 0.35 3.00 FY 2018 Adopted Budget 0.15 3.00 0.67 0.57 1.50 1.50 1.00 1.00 FY 2019 Adopted Budget 0.15 3.00 0.57 1.20 1.20 1.00 1.00 Manager Water Quality Control 1.00 1.00 1.00 1.00 Plant FY 2019 Change FTE FY 2019 Salary 16,277 279,784 59,410 141,205 141,482 182,541 Manager Watershed Protection 0.95 0.95 0.75 0.75 111,119 Plant Mechanic 7.00 7.00 7.00 716,999 Program Assistant II 2.00 2.00 1.40 1.40 - 118,689 Project Engineer 1.00 1.00 1.00 1.00 - 140,646 Project Manager - 1.00 0.60 0.60 - 67,741 Senior Accountant 0.10 0.10 0.10 0.10 12,287 Senior Buyer 1.00 1.00 1.00 103,384 Senior Chemist 1.00 1.00 1.00 1.00 - 115,871 Senior Engineer 1.00 3.00 3.00 3.00 392,600 Senior Industrial Waste Investigator 0.99 0.99 0.89 0.89 - 103,265 Senior Management Analyst 0.13 0.13 0.13 0.13 - 15,471 Senior Mechanic 1.00 1.00 1.00 1.00 110,130 Senior Operator WQC 6.00 6.00 6.00 6.00 701,178 Senior Technologist 1.00 1.00 1.00 1.00 147,056 Storekeeper 1.00 1.00 1.00 1.00 75,472 Supervisor WQCP Operations 3.00 3.00 3.00 3.00 - 356,325 Technologist 0.70 0.70 0.70 0.70 - 106,914 WQC Plant Operator II 16.00 16.00 16.00 16.00 1,648,692 Sub -total: Full -Time Equivalent 68.43 71.05 68.84 68.84 - 7,677,059 Positions Temporary/Hourly 1.94 2.42 2.42 2.42 206,339 Total Positions 70.37 73.47 71.26 71.26 - 7,883,398 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 413 PUBLIC WORKS 3udget Reconciliation Prior Year Budget 63,041,886 61,919,594 1,122,292 One -Time Prior Year Budget Adjustments Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water Year 1 Supplemental Pension Trust Fund Contribution Information Technology Department Allocation (FY 2016 Salary Savings; one-time) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water Year 2 Office of Management and Budget Staffing Reorganization (funding shifts) Water Quality Control Plant (WQCP) Lab Services Liquid Waste Hauler and Tributary Agency Partner Contribution Workers' Compensation Savings (one-time FY 2019 savings) General Liability Savings (one-time FY 2019 savings) Capital Improvements Projects General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Print and Mail Allocated Charges Public Works Administration Allocated Charges Refuse Sales Allocated Charges Storm Drain Allocated Charges Utilities Allocated Charges Vehicle Replacement Allocated Charges Wastewater Treatment Allocated Charges Adjustments to Costs of Ongoing Activities - (427,000) (210,478) 110,723 - (526,755) 190,558 188,000 3,093 (427,000) (427,000) 188,000 (210,478) 110,723 (99,755) 190,558 3,093 1,144 (1,144) 869,898 (869,898) 77,764 77,764 (66,965) (28,190,808) (354,998) 93,524 391,300 (1,775) 7,405 1,950 1,079 118,379 3,628 (28,448,300) 360,792 — (27,537,865) (27,028,466) (66,965) 257,492 (354,998) 93,524 391,300 (1,775) 7,405 1,950 1,079 118,379 3,628 (360,792) (509,399) Total FY 2019 Base Budget 71.26 34,977,266 34,464,128 513,138 414 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET PUBLIC WORKS Budget Adjustments ■ 0.00 3udget Reconciliation Net Wastewater Treatment Positions Expenditures Revenues Fund Budget Adjustments 1 Replacement of Incinerator with Dewatering Facility 2 Supplemental Pension Trust Fund Contribution Total Budget Adjustments 425,830 104,568 530,398 425,830 104,568 530,398 Total FY 2019 Adopted Budget 71.26 35,507,664 34,464,128 1,043,536 3udget Adjustments Expenditures Revenues Net Wastewater Treatment Fund 1 Replacement of Incinerator with Dewatering Facility 425,830 0 425,830 This action increases expenses by $425,830 reflecting the net change in service delivery for operating the new Sludge Dewatering and Loadout (SDLO) Facility, and corresponding retirement of the current sludge incinerators around the same time. The net impact includes increased contract expenses for hauling of dewatered waste material offset by the elimination of ash hauling expenses. In addition the change in utilities costs with increased electricity costs to operate the SDLO offset by a reduction in gas for the incinerators. Construction of the SDLO facility is estimated to be complete in November 2019 with operations beginning in January 2019. (Ongoing costs: $772,275) Performance Results PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 415 PUBLIC WORKS 3udget Adjustments The SDLO facility will allow the City to process sewage sludge by dewatering instead of incinerating it into dry waste matter. The SDLO processing method is more in -line with the City's sustainability goals through increased air quality with the retirement of the incinerators. 2 Supplemental Pension Trust Fund Contribution 104,568 104,568 This action transfers $104,568 from the Wastewater Treatment Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Office of the Wastewater Treatment Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 416 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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 in sound financial condition. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 417 =Mr UTILITIES GENERAL MANAGER Edward K. Shikada 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 11.00 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 1.00 Gas & Water Meter Measurement and Control Technician -Lead 4.00 Gas & Water Meter Measurement and Control Technician UTILITIES ADMINISTRATION 1.00 Administrative Assistant 1.00 Administrative Associate II 2.00 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 3.00 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 2.00 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 2019 POSITION TOTALS 244.5 - 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. 418 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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. CPAU also supports the City's sustainability goals by building a low -carbon energy supply through the use of renewable energy and offsets and by promoting programs to help customers use energy and water more efficiently, reduce their carbon footprint, and help them integrate new technologies. At CPAU, our people empower tomorrow's ambitions while caring for today's needs! We make this possible with our outstanding professional workforce, leading through collaboration, and optimizing resources to ensure a sustainable and resilient Palo Alto. 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; and implements Credit and Collection policies and financial assistance programs. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 419 UTILITIES 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. 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 • Awarded Platinum Level Beacon Award by the Institute for Local Government for efforts and leadership in addressing climate change. • Awarded first place for the fourth time by the Smart Electric Power Alliance (SEPA) for the Solar Watts -per -Customer Top Ten list of utilities that integrated the most solar to the grid. • Received Special Recognition for Participation in Georgetown University's Energy Prize Competition. ▪ Accomplished the City's Natural Gas Supply Goes Carbon Neutral goal. In July 2017, provided 100% carbon neutral natural gas for the entire Palo Alto community. ▪ Entered agreement to buy Carbon Offsets from Palo Alto's Sister City, Oaxaca, Mexico. On December 4, 2017, City Council approved a resolution to purchase carbon offsets from a forestry project in Oaxaca, Mexico, to offset carbon dioxide emissions associated with natural gas use in the Palo Alto community. The agreement is part of the City's Carbon Neutral Natural Gas Plan with goals to reduce overall community Greenhouse Gas (GHG) emissions in an effort to combat climate change. ▪ Unveiled new solar panels installed atop parking carports of two public garages and electric vehicle (EV) charging stations that are powered by the renewable energy generated on - site. • Provided rebates for Electric Vehicle Charging Stations installed at schools, apartment complexes, and non-profit buildings with common area charging accommodations. • Awarded first place for Amount of Solar Through Bay Area SunShares Program. The City participated for the third year in a row in Bay Area SunShares, a solar group -buy program that offers discounts on rooftop solar by pooling the buying power of a group of residents. ▪ Completed an eight month process to update the Utilities Strategic Plan, which was approved by the City Council on March 19, 2018. 420 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Initiatives ▪ Implement the City Council approved 2018 Utilities Strategic Plan to focus resources towards meeting priority initiatives related to workforce, technology, collaboration, financial efficiency, and resource optimization. • Assist Development Services to verify final street addresses are assigned prior to account activation and billing of Utilities account -holders. • Continue Downtown Upgrade, which provides critical, preventative upgrades to core infrastructure so Utilities can continue to provide safe, reliable and cost effective services to the community. Construction work includes utility pipe replacements, road repaving, traffic signal enhancements, and a new downtown parking garage. • Update Divisional Succession Plans for the next five years. ▪ Evaluate and upgrade Outage Management System to reduce restoration time and provide customers near real-time outage information. • Develop Advanced Metering Infrastructure (AMI)/Meter Data Management System (MDM) Requirements to identify functional and system requirements. • Evaluate Multi -Agency AMI/MDM with Northern California Power Association (NCPA) to pool resources, share ideas, and increase purchasing power. • Upgrade Utilities customer account portal to provide customers additional 24/7 self- services and customer information to better manage their consumption and choices. ▪ Integrate new Geographical Information System (GIS) to ensure accurate infrastructure information for customer service and infrastructure improvements. • Establish and implement a Distributed Energy Resources plan to ensure local generation (e.g. solar), storage, electric vehicles (EVs), and controllable loads (like heat pump water heaters) are integrated into the distribution system in a way that benefits both the customer and the broader community. • Engage in community outreach to identify what aspects of resiliency are important to the community for each utility to support development of a resiliency work plan. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 421 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Palo Alto's average residential monthly utility bill above/below the (6.80)% (10.40)% (6.80)% (14.00)% (14.00)% median of neighboring cities Description Purpose Status This compares the average residential monthly utility bill which includes electricity, gas, water, and wastewater services to the nearby communities (Santa Clara $188.66, Hayward $233.38, Los Altos $236.40, Mountain View $242.04, Redwood City $294.07, and Menlo Park $311.12). 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 PG&E and slightly higher than Santa Clara. Natural gas rates are lower than surrounding communities due to PG&E 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 San Francisco Public Utilities Commission, which 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. Despite fee increases, CPAU rates remain lower than neighboring cities. 422 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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 V 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 2016 Actuals 83.25% FY 2017 Actuals 86.00% FY 2018 Adopted 85.00% FY 2018 Estimated 85.00% FY 2019 Adopted 86.00% 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. There are ten California communities participating in the survey. To get feedback on whether customers are satisfied with the nature, extent and delivery of services provided, using random -selection survey processes that include a good cross-section of the customer base. Results are statistically weighted to reflect the proper demographic composition of the entire community. A total of 614 completed surveys were obtained, providing an overall response rate of 21 percent. Typically, response rates obtained on citizen surveys range from 25 percent to 40 percent. From FY 2012 to FY 2017, Utilities has met its target of 83 percent and anticipates this continuing through FY 2019. ensures Total cost of Capital Improvement Program annually (Millions) FY 2016 Actuals $22.20 FY 2017 Actuals $20.40 FY 2018 Adopted $26.20 FY 2018 Estimated $27.20 FY 2019 Adopted $35.40 3udget Summary FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Dollars by Fund Electric Fund - Operating 53,504,506 50,471,721 69,158,197 70,081,759 923,562 1.3% Electric Supply 85,918,737 93,975,231 107,008,613 104,723,604 (2,285,009) (2.1)% Fiber Optics 2,574,599 2,385,108 4,144,473 4,165,484 21,011 0.5% Gas Fund - Operating 19,079,098 19,025,805 26,768,899 26,851,951 83,053 0.3% Gas Supply 9,061,954 14,246,460 17,157,301 16,704,380 (452,921) (2.6)% Wastewater Collection - Operating 19,271,590 24,361,592 19,173,803 23,875,272 4,701,469 24.5% Water Fund - Operating 42,098,850 38,572,014 47,487,138 59,028,147 11,541,009 24.3% Total 231,509,334 243,037,933 290,898,423 305,430,596 14,532,174 5.0% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 423 UTILITIES 3udget Summary 1 Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Property Taxes Rental Income Return on Investments Total Revenues FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 438,985 588,350 270,000 270,000 - 985,530 716,165 518,662 504,525 (14,138) (2.7)% 636,666 512,301 576,632 576,632 - -% 197,161,475 229,843,108 234,641,566 246,383,948 11,742,382 5.0% 481,233 2,922,786 3,977,536 4,203,098 225,562 5.7% 11,260,334 9,701,750 14,251,610 11,953,278 (2,298,332) (16.1)% 420,867 - - - - -% 76 39 - - - -% 5,000 - - - -% 3,969,933 3,794,136 4,442,200 4,442,200 -% 215,355,098 248,083,635 258,678,207 268,333,681 9,655,475 3.7% FY 2019 Change % Positions by Fund Electric Fund 116.38 113.32 111.23 111.33 Fiber Optics Fund 6.76 6.82 7.60 7.60 Gas Fund 52.16 52.55 53.11 53.83 Utilities Administration Fund 18.12 18.22 19.21 19.21 Wastewater Collection Fund 29.74 29.17 29.00 29.16 Water Fund 46.15 47.99 47.90 46.92 Total 269.31 268.06 268.05 268.05 -% 0.10 0.09% -% 0.72 1.36% -% 0.16 0.56% (0.98) (2.05)% - % 424 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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 strives 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 ▪ Completed installation of the utility underground electric system for Utility Underground District 47 (area bounded by Middlefield Road; Homer Avenue; Webster Street; Addison Avenue). ▪ Completed installation of fiber optic cables between Adobe Creek/East Meadow/Maybell substations to assist in substation protection and monitoring systems. Completed a substation security assessment and currently prioritizing recommendations. ▪ Completed coordination of Utilities interconnection requirements at two of the City Garage Solar Projects (Bryant and Webster). • Participated in and completed the California Public Utilities Commission Fire Map development process for the state of California. ▪ Assisted the Regional Water Quality Control Plant with assessment of their on -site 12kV electric system, including maintenance on switchgear and infrared inspection of equipment. Replaced one 60kV circuit breaker in FY 2018. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 425 UTILITIES • Customer -sited solar installations (projects in progress or completed) increased to nearly 14 megawatts in total by the end of 2017, equal to roughly 2% of load if all applications are completed. This included the commitment of nearly all of the capacity from the Palo Alto Clean Local Energy Accessible Now (CLEAN) program. The City was also recognized by the Solar Electric Power Association for installing the most solar per customer in the nation (both utility -scale and customer -sited). • Fully -powered the carbon neutral electric portfolio for the first time in 2017 with carbon -free energy from long-term contracted generating sources, without the need for short-term renewable energy credits. Initiatives ▪ Bring remaining solar projects online to bring Renewable Portfolio Standard (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 and new efficiency programs, including new behavioral savings and facility management training programs. Increase uptake for commercial efficiency programs. • Seek City Council approval of an Electric Integrated Resource Plan for the 2019 through 2030 planning period. ▪ 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. • Revisit strategy for promoting solar energy. Bring Palo Alto CLEAN projects online, evaluate sites for the community solar program, and complete a smooth transition from net metering to the local generation compensation program once the net metering cap is reached. • 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. ▪ Add new facilities to meet the electric loads proposed by the Veteran's Affairs 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 perform 174 Inspection and Maintenance tasks related to electrical overhead, underground, and substation facilities. 426 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES • Rebuild underground facilities in District 20 (area bounded by Channing, Center, Hamilton, and Lincoln). ▪ Complete the connection of new underground customer service conversions in Utility Underground District 47. ▪ Complete utility electric work for Utility 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. ▪ Develop plans to ensure safe operation of the overhead electric system in the western foothills area. Goals and Objectives GOAL 1 Provide safe and reliable delivery of electric services to 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. • Continue to facilitate voluntary local solar installations through education and programs. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 427 UTILITIES Key Performance ti easures ENVIRONMENTAL SUSTAINABILITY Goal Support environmental sustainability and promote efficient use of resources. Objective Achieve Renewable Portfolio Standard (RPS) of at least 52 percent. Percent of retail electric sales volume provided by renewable supply resources under long-term PPAs Description Purpose Status SYSTEM RELIABILITY Goal FY 2016 Actuals 31.80% FY 2017 Actuals 51.00% FY 2018 Adopted 60.00% FY 2018 Estimated 60.40% FY 2019 Adopted 58.20% 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 fully -powered the carbon neutral electric portfolio with carbon -free energy from long-term contracted generating sources, without the need for short- term renewable energy credits, for the first time in 2017. Provide safe and efficient delivery of electric services to our customers. Objective Provide exceptional system reliability. Average duration of customer outages in minutes as reported using industry guidelines Description Purpose Status FY 2016 Actuals 39.48 FY 2017 Actuals 63.76 FY 2018 Adopted 60.00 FY 2018 Estimated 60.00 FY 2019 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. 428 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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 2016 Actuals 7.70 FY 2017 Actuals 8.70 FY 2018 Adopted 13.50 FY 2018 Estimated 11.40 FY 2019 Adopted 14.90 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 percent of the City's electricity needs through solar by 2023. Rebate funds for residential and commercial solar were fully reserved before the 2017 goal set by SB1. With the costs of PV systems steadily decreasing, 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 as "Good" or "Excellent" FY 2016 Actuals 29,304 26 86 FY 2017 Actuals 29,616 1 87 FY 2018 Adopted 29,300 0 FY 2018 Estimated 29,600 1 FY 2019 Adopted 29,600 1 88 88 88 Total Number of Outages 26 20 19 19 17 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 429 UTILITIES 3udget Summary FY 2016 Actuals Dollars by Division CIP Electric Fund 14,087,807 11,558,306 21,175,750 21,400,284 224,534 1.1% Electric Administration 22,014,672 21,628,408 26,286,978 25,010,251 (1,276,727) (4.9)% Electric Customer Service 2,110,437 2,190,933 2,300,532 2,474,150 173,618 7.5% Electric Demand Side Management 3,724,006 4,393,262 6,992,874 6,962,177 (30,697) (0.4)% Electric Engineering (Operating) 1,592,025 1,656,522 1,980,111 2,029,395 49,284 2.5% Electric Operations and 11,523,884 11,834,348 13,522,822 15,174,255 1,651,434 12.2% Maintenance Electric Resource Management 84,370,412 91,185,173 103,907,742 101,754,850 (2,152,892) (2.1)% Total 139,423,243 144,446,952 176,166,809 174,805,362 (1,361,447) (0.8)% FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Dollars by Category Salary & Benefits Healthcare 1,767,659 1,897,689 2,270,685 2,403,978 133,293 5.9% Other Benefits 325,666 234,198 323,575 329,347 5,771 1.8% Overtime 978,506 946,401 492,003 504,795 12,792 2.6% Pension 2,674,415 2,869,831 3,529,404 3,643,765 114,361 3.2% Retiree Medical 1,417,176 1,537,263 1,617,277 1,555,185 (62,093) (3.8)% Salary 10,639,784 10,743,153 12,696,026 12,997,024 300,998 2.4% Workers' Compensation 254,447 138,287 405,828 292,351 (113,477) (28.0)% Total Salary & Benefits 18,057,652 18,366,822 21,334,799 21,726,445 391,646 1.8% Allocated Charges 4,708,298 2,905,159 9,120,926 8,799,392 (321,534) (3.5)% Contract Services 3,670,436 4,445,291 6,849,914 7,743,680 893,766 13.0% Debt Service 8,889,294 8,857,193 8,782,300 8,722,300 (60,000) (0.7)% Equity Transfer 11,659,000 12,035,000 12,754,000 12,709,000 (45,000) (0.4)% Facilities&Equipment 2,190 44,475 64,155 19,680 44.2% General Expense 1,826,521 2,040,146 3,380,080 3,456,870 76,790 2.3% Operating Transfers -Out 177,323 317,573 400,940 127,819 (273,121) (68.1)% Rents & Leases 5,301,644 5,449,402 5,603,447 5,893,136 289,688 5.2% Supplies & Material 665,283 639,238 871,207 924,207 53,000 6.1% Transfer to Infrastructure 273,476 189,972 -% Utility Purchase 73,439,746 80,511,136 91,705,000 89,712,000 (1,993,001) (2.2)% 430 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2016 Actuals 10,752,379 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ 8,690,020 15,319,720 14,926,359 (393,361) FY 2019 Change % (2.6)% 139,423,243 144,446,952 176,166,809 174,805,362 (1,361,447) (0.8) % Revenues Charges for Services 320,308 455,040 230,000 230,000 Charges to Other Funds 290,667 306,268 308,566 294,362 (14,204) (4.6)% Net Sales 110,604,293 129,124,526 136,139,180 143,040,068 6,900,888 5.1% Operating Transfers -In 259,400 2,678,768 3,465,100 3,663,820 198,720 5.7% Other Revenue 8,808,047 7,652,336 11,029,000 8,660,000 (2,369,000) (21.5)% Other Taxes and Fines 420,867 - - - - -% Property Taxes 76 39 -% Rental Income 5,000 -% Return on Investments 2,039,748 1,800,584 2,507,700 2,507,700 -% Total Revenues 122,743,405 142,022,560 153,679,546 158,395,950 4,716,404 3.1% - % Positions by Division CIP Electric Fund 32.14 32.14 31.90 31.90 -% Electric Customer Service 13.54 12.07 11.70 12.00 0.30 2.56% Electric Demand Side Management 6.61 6.85 6.17 6.17 -% Electric Engineering (Operating) 5.73 4.98 4.98 4.98 - -% Electric Operations and Maintenance 48.36 48.36 Electric Resource Management 10.00 8.92 Total Staffing 48.10 48.10 8.38 8.18 - % (0.20) (2.39)% 116.38 113.32 111.23 111.33 0.10 0.09% Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services FY 2016 Actuals 0.26 4.10 FY 2017 Actuals 0.33 4.00 0.15 0.20 FY 2018 Adopted Budget 0.31 3.90 FY 2019 Adopted Budget 0.31 3.90 0.20 0.20 FY 2019 Change FTE FY 2019 Salary 22,475 - 303,162 40,227 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 431 UTILITIES Staffing Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management FY 2016 Actuals 0.40 0.40 0.60 0.50 FY 2017 Actuals 0.40 0.40 0.60 0.50 FY 2018 Adopted Budget 0.40 0.40 0.60 0.50 FY 2019 Adopted Budget 0.40 0.40 0.60 0.50 FY 2019 Change FTE FY 2019 Salary 68,632 77,958 115,228 88,296 Business Analyst 2.89 2.04 1.94 1.60 (0.34) 244,375 0.10 0.10 0.10 0.10 - 11,771 Contracts Administrator Coordinator Utilities Projects 1.80 1.55 1.55 1.55 - 147,139 1.86 1.62 1.87 1.87 - 144,067 Customer Service Representative Customer Service Specialist 0.62 0.66 0.66 0.66 55,914 0.62 0.58 0.58 0.58 52,553 Customer Service Specialist -Lead Electric Project Engineer 1.95 1.95 1.95 1.95 288,517 2.00 2.00 2.00 2.00 - 206,984 Electric Underground Inspector Electric Underground Inspector 1.00 1.00 1.00 1.00 - 110,682 Lead Electrical Equipment Technician 1.00 1.00 1.00 94,483 Electrician Assistant I 4.00 3.00 3.00 3.00 246,313 Engineering Manager - Electric 0.55 0.55 0.55 0.55 - 99,459 Engineering Technician III 2.40 2.40 1.40 1.40 - 136,796 Heavy Equipment Operator 2.00 2.00 2.00 2.00 - 196,497 Inspector, Field Services 0.25 0.25 0.25 26,361 11.00 11.00 11.00 11.00 1,439,554 Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 560,213 Manager Customer Service 0.33 0.33 0.33 0.33 - 44,019 Manager Electric Operations 1.00 1.00 1.00 1.00 - 155,792 Lineperson/Cable Specialist Manager Treasury, Debt & Investments Manager Utilities Compliance Manager Utilities Credit & Collection Manager Utilities Marketing Services Manager Utilities Program Services 0.30 0.15 0.15 0.15 0.40 0.15 0.30 0.30 0.15 0.15 0.15 0.15 43,181 25,091 20,205 0.40 0.40 0.40 - 52,957 432 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Staffing Job Classification Marketing Engineer Meter Reader Meter Reader -Lead Metering Technician Metering Technician -Lead Offset Equipment Operator Overhead Underground Troubleman Power Engineer FY 2016 Actuals 1.00 2.41 0.40 3.00 1.00 0.48 2.00 FY 2017 Actuals 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 2019 Adopted Budget 1.99 0.33 3.00 1.00 0.48 2.00 FY 2019 Change FTE FY 2019 Salary 144,002 25,547 370,131 132,023 33,140 274,975 2.30 2.30 2.30 2.30 - 320,856 Principal Business Analyst 0.34 0.34 0.34 0.34 49,122 Project Manager 0.75 0.75 0.75 0.75 76,315 Resource Planner 3.95 3.65 3.85 3.65 (0.20) 510,945 SCADATechnologist 1.00 1.00 1.00 1.00 - 149,972 Senior Business Analyst 0.68 0.68 0.68 1.02 0.34 139,580 3.95 3.95 3.95 3.95 - 649,217 Senior Management Analyst 0.45 0.10 0.10 0.10 13,275 Senior Resource Planner 4.08 3.80 3.06 3.06 460,275 Senior Electrical Engineer Senior Utilities Field Service Representative Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber - Lead Substation Electrician Substation Electrician -Lead Supervising Electric Project Engineer Tree Maintenance Person 0.10 3.00 1.00 0.10 3.00 1.00 5.50 5.50 2.00 2.00 1.00 1.00 1.00 1.00 0.10 3.00 1.00 0.10 3.00 1.00 5.50 5.50 2.00 2.00 1.00 1.00 1.00 1.00 Utilities Compliance Technician 2.00 2.00 2.00 2.00 Utilities Compliance Technician 1.00 1.00 1.00 Lead 1.00 Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 Utilities Engineer Estimator 3.25 3.25 3.25 3.25 Utilities Field Services Representative 0.50 0.50 0.50 0.50 11,417 354,045 126,276 708,065 275,540 138,445 87,402 252,552 135,102 186,663 396,797 53,364 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 433 UTILITIES Staffing Job Classification FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted FY 2019 Budget Change FTE FY 2019 Salary Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator 1.90 1.95 1.60 1.95 2.25 1.90 1.35 1.95 1.35 1.95 1.60 1.90 160,793 191,027 0.30 214,977 Utilities Safety Officer 0.55 0.55 0.55 0.55 - 62,531 Utilities Supervisor 5.00 5.00 5.00 5.00 - 689,874 Utilities System Operator 5.00 5.00 5.00 5.00 - 701,469 Utility Engineering Estimator - Lead 1.00 1.00 131,470 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 4.37 5.15 4.11 4.11 361,475 Total Positions 116.38 113.32 111.23 111.33 0.10 13,707,558 112.02 108.18 107.12 107.22 0.10 13, 346, 083 434 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Reconciliation I Positions Expenditures Revenues Net Electric Fund Prior Year Budget 111.23 176,166,809 153,679,545 22,487,264 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution One-time Prior Year Budget Adjustments Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Net -zero Utilities Staffing Realignment (increase of 0.3 FTE Utilities Marketing Program Administrator positions; decrease of 0.2 FTE Resource Planner position) Electric Customer Sales Revenue (6% Rate Increase) Electric Commodity Purchases Expenditure Rents & Leases Expenditure Bank Card Transaction Fee Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Palo Alto Green Gas Program Sales Revenue Custodial Contract Funding Management Development Funding Equity Transfer to the General Fund Capital Improvement Funding Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement and TE-05000 Radio Infrastructure Replacement) Transfer from the General Fund (Traffic Signal and Streetlight Electric Costs) Transfer from the Vehicle Replacement & Maintenance Fund (Aerial Trucks Leasing) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Ground Maintenance Allocated Charges Print & Mail Allocated Charges Public Works Engineering & Inspection Service Allocated Charges Storm Drain Allocated Charges 0.10 (353,620) (353,620) 501,695 2,053,001 169,119 80,000 36,855 (2,923) (5,350) 1 (45,000) (4,327,679) (154,626) (764,220) 41,774 2,826 (13,708) 197 451 6,904,176 (2,499,000) 208,151 120,569 (353,620) (353,620) 501,695 (6,904,176) 2,053,001 169,119 80,000 36,855 17,491 (2,923) (5,350) (45,000) (1,828,679) (154,626) (208,151) (120,569) (764,220) 41,774 2,826 (13,708) 197 451 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 435 UTILITIES 3udget Reconciliation Positions Expenditures Revenues Net Electric Fund Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) 446,820 (21,398) 18,927 (29,753) - (116,506) 446,820 (21,398) 18,927 (29,753) — (116,506) Adjustments to Costs of Ongoing Activities 0.10 (2,129,498) 4,716,405 (6,845,903) Total FY 2019 Base Budget 173,683,691 158,395,950 15,287,741 Budget Proposals 1 Electric Overhead Maintenance Contract 2 Supplemental Pension Trust Fund Contribution 3 Reclassification of Business Analyst to Senior Business Analyst 937,814 183,857 6,797 937,814 183,857 6,797 Budget Changes - 1,121,671 - 1,121,671 Total FY 2019 Adopted Budget 111.33 174,805,362 158,395,950 16,409,412 436 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Adjustments 1 Electric Overhead Maintenance Contract in 0.00 937,814 , 0 937,814 This action augments funding to allow capacity for an electric overhead maintenance contract. In recent years, the Electric Operations Division has experienced staffing shortages in lineman positions due to retirements, employee disabilities, and a lack of qualified candidates to fill vacant positions. In FY 2015, the City entered into a contract to provide support for both maintenance and capital improvement projects; however, this contract ended prematurely. With the staffing shortage issue persisting, the department will work to seek City Council approval of a multi -year contract until staffing stabilizes. Additional funding of $938,000 will increase appropriated funds when combined with anticipated vacancy savings to support $1.5 million in contract services annually. With the need for the contract primarily driven by staffing shortages, the department will reassess the situation for FY 2021 to determine if this contract will continue to be needed. (Ongoing costs: $937,814) Performance Results © 0 This contract will allow the department to ensure necessary maintenance work is performed to avoid potential costly fixes down the road and ensure the electric utility service remains reliable. 2 Supplemental Pension Trust Fund Contribution 183,857 This action transfers $183,857 from the Electric Funds to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Electric Funds' annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 3 Reclassification of Business Analyst to Senior Business Analyst 0 I 6,797 This action reclassifies a 1.0 FTE Business Analyst to a 1.0 FTE Senior Business Analyst in the Utilities Department to align with current staffing levels and assignments. Duties assigned to this position were evaluated through the appropriate processes with the Employee Relations Division in the Human Resources Department and a settlement was reached in February 2018. This action aligns authorized staffing levels with this settlement agreement which determined the Senior Business Analysts was more commensurate with the duties assigned. (Ongoing costs: $6,797) Performance Results This action ensures the table of organization is adjusted to reflect the employee relations settlement action. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 437 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 • Continued the rebuild of the City's dark fiber-optic network to improve network performance and enable future expansion opportunities for licensing dark fiber to commercial firms and anchor institutions. Rebuild work completed: The fiber route from Palo Alto Internet Exchange at 529 Bryant Street to the Park Boulevard Substation. This phase of the project included substructure work, fiber pulling, and cabinet installation. ▪ Completed installation of fiber optic service connections for the Department of Public Works to monitor pump stations and creek levels at 17 locations. ▪ Completed project design to install approximately 3,020 linear feet of fiber-optic conduit and 4 pull boxes on University Avenue. ▪ Issued a request for proposal to develop a business case for a Fiber -to -the -Node (FTTN) network for fiber and broadband expansion, including an expansion option to build citywide Fiber -to -the -Premises (FTTP). Initiatives ▪ Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. 438 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES • Continue Capital Improvement Projects to upgrade the City's dark fiber network to enhance network capacity to enable future expansion opportunities for licensing dark fiber for commercial purposes. ▪ Evaluate new opportunities to expand the existing commercial dark fiber customer base in other business sectors (e.g. licensing dark fiber to the mobile service operator for network backhaul links for small cell deployments). ▪ Develop a plan to ensure the retention of commercial dark fiber customers due to anticipated changes in the market for business broadband services. ▪ Retain a management consultant to develop a business case for a FTTN network and prepare a high-level network design. Based on the findings and recommendations in the business case, engage an engineering firm to design a FTTN network, including an expansion option to build a citywide FTTP network. ▪ Develop policies and ordinances to support the expansion of broadband in Palo Alto and to preserve City street conditions and other critical infrastructure (e.g. Dig Once, Microtrenching and One Touch Make Ready). • Install public Wi-Fi to unserved City facilities, including the Cubberley and Lucie Stern Community Centers and the Baylands Golf Links. Goals and Objectives GOAL 1 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. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 439 UTILITIES Number of customer accounts 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted Number of commercial fiber connections completed Description Purpose Status Workload V 219.00 228.00 223.00 233.00 238.00 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 will also provide fiber access to previously unserved areas. easures FY 2016 Actuals FY 2017 Actuals FY 2018 FY 2018 FY 2019 Adopted Estimated Adopted 108 Number of Wholesale re -sellers 10 3udget Summary Dollars by Division CIP Fiber Optics Fund 634,258 177,369 402,806 Fiber Optics Administration Fiber Optics Customer Service Fiber Optics Operations and Maintenance Total 110 12 105 14 108 13 FY 2019 Change $ 110 14 FY 2019 Change % 458,664 1,652,838 1,650,000 (2,838) (0.2)% 174,885 788,590 748,831 (39,759) (5.0)% 515,324 1,128,287 1,170,484 42,197 3.7% 1,360,167 1,236,236 574,757 596,169 21,412 3.7% 2,574,599 2,385,108 4,144,473 4,165,484 21,011 0.5% 440 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Summary 1 Dollars by Category Salary & Benefits FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Healthcare 129,998 150,743 159,128 163,151 4,023 2.5% Other Benefits 20,292 18,999 24,978 26,007 1,029 4.1% Overtime 7,863 11,593 24,244 24,874 630 2.6% Pension 168,158 209,591 231,718 251,105 19,387 8.4% Salary 805,524 825,396 893,674 955,812 62,138 7.0% Workers' Compensation - 1,166 26,440 19,047 (7,393) (28.0)% Total Salary & Benefits 1,131,834 1,217,489 1,360,182 1,439,997 79,814 5.9% Allocated Charges 475,985 438,939 616,772 575,882 (40,890) (6.6)% Contract Services 193,240 134,006 458,300 454,646 (3,654) (0.8)% Facilities & Equipment 2,457 2,457 -% General Expense 3,982 3,161 14,000 13,900 (100) (0.7)% Operating Transfers -Out 103,818 103,915 122,837 113,684 (9,152) (7.5)% Rents & Leases 71,650 73,038 76,914 79,326 2,412 3.1% Supplies & Material 6,323 - 9,000 9,000 - -% Transfer to Infrastructure 17,141 13,756 -% Capital Improvement Program 570,626 400,805 1,486,468 1,476,592 (9,877) (0.7)% Total Dollars by Expense Category 2,574,599 2,385,108 4,144,473 4,165,484 21,011 0.5% Revenues Charges for Services 25,702 28,052 - - - -% Charges to Other Funds 5,300 - -% Net Sales 4,474,071 4,526,098 4,890,810 4,989,512 98,702 2.0% Other Revenue 1,417 1,181 200,000 200,000 -% Return on Investments 443,557 499,412 366,400 366,400 - -% Total Revenues 4,950,048 5,054,743 5,457,210 5,555,912 98,702 1.8% Positions by Division CIP Fiber Optics Fund Fiber Optics Customer Service 0.79 0.79 2.84 2.90 0.79 0.79 3.68 3.68 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 441 UTILITIES 3udget Summary Fiber Optics Operations and Maintenance Total Staffing Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Business Analyst FY 2016 Actuals 3.13 6.76 FY 2016 Actuals 0.20 FY 2017 Actuals 3.13 6.82 FY 2017 Actuals 0.10 0.20 0.05 0.05 FY 2018 Adopted Budget 3.13 7.60 FY 2018 Adopted Budget 0.20 0.20 FY 2019 Adopted Budget 3.13 7.60 FY 2019 Adopted Budget 0.20 0.20 0.05 0.05 FY 2019 Change $ FY 2019 Change FTE FY 2019 Change % _ -% FY 2019 Salary 15,547 34,316 9,745 0.10 0.20 0.30 0.30 - 45,820 Electric Project Engineer 0.05 0.05 0.05 0.05 - 7,398 Manager Utilities Compliance 0.10 0.10 0.10 0.10 - 16,727 Manager Utilities Credit & Collection Manager Utilities Marketing Services 0.40 0.40 0.40 0.40 53,880 0.20 Manager Utilities Program Services 0.20 0.20 0.20 26,478 Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 137,488 Power Engineer 0.40 0.40 0.40 0.40 - 55,801 Senior Electrical Engineer Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber - Lead Utilities Key Account Representative Utilities Locator Sub -total: Full -Time Equivalent Positions 0.05 0.05 0.05 0.05 - 8,146 2.00 2.00 1.00 1.00 0.60 0.70 2.00 2.00 1.00 1.00 0.80 0.80 236,030 126,276 95,285 0.03 0.03 0.03 0.03 - 2,939 6.18 6.48 6.78 6.78 - 871,877 Temporary/Hourly 0.58 0.341 0.82 0.82 78,071 Total Positions 6.76 6.82 7.60 7.60 - 949,948 442 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Prior Year Budget 3udget Reconciliation Positions Expenditures Revenues Net Fiber Optics Fund 5,457,210 (1,312,737) One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Transfer to Technology Fund (TE-10001 Utilities Customer Billing Software Replacement) (22,250) (565) (22,250) (565) One-time Prior Year Budget Adjustments — (22,815) — (22,815) Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustment Fiber Optics Revenue (Rate Increase 2.9% CPI) Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) 87,404 87,404 2,457 Rents and Leases Expenditure 2,412 Management Development Funding (100) Custodial Contract Funding (3,654) Capital Improvement Funding (8,942) General Fund Cost Allocation Plan (69,977) General Liability Insurance Allocated Charges 2,722 Utilities Administration Allocated Charges 28,371 General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) (1,938) (7,590) 98,702 (98,702) 2,457 2,412 (100) (3,654) (8,942) (69,977) 2,722 28,371 (1,938) (7,590) Adjustments to Costs of Ongoing Activities 31,164 98,702 (67,538) Total FY 2019 Base Budget 7.60 MEM 5,555,912 (1,403,090) Budget Proposals 1 Supplemental Pension Trust Fund Contribution 12,661 12,661 Budget Changes 12,661 12,661 Total FY 2019 Adopted Budget 7.60 4,165,484 5,555,912 (1,390,428) UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 443 Budget Adjustmen 3udget Adjustments Positions Expenditures Revenues Net Fiber Optics Fund 1 Supplemental Pension Trust Fund Contribution This action transfers $12,661 from the Fiber Optics Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Fiber Optics Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 444 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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 maintain 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 Gas Plan to buy carbon offsets equal to Palo Alto's annual gas use as a transitional measure while focusing on reducing natural gas use. Established a partnership with a non -governmental organization in the City of Palo Alto's Sister City of Oaxaca, Mexico to fund forestry carbon offsets to fulfill some of the program's offset needs. Purchased the remaining offsets from a U.S. forestry and U.S. dairy waste digester project. ▪ Completed the design of a Gas Main Replacement (GMR) 22 project for the downtown area to replace approximately 19,500 linear feet of gas main pipelines and 1,400 service pipelines. ▪ Completed the gas pipe coating project for exposed pipe at bridge crossings. ▪ Completed the security camera project at Gas Receiving Stations 1, 2, and 4. ▪ Started on the design of the Acrylonitrile Butadien Styrene (ABS)/tenite service replacement project to replace old pipelines at various locations. Initiatives ▪ Complete design and start construction of the ABS/tenite service replacement project to replace approximately 220 gas service pipelines at various locations. ▪ Install new gas main and service pipelines on University Avenue and various streets in the Downtown District for the Upgrade Downtown and Gas Main Replacement (GMR) 22 projects. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 445 UTILITIES • Implement Phase II of the Crossbore Gas Safety Program to inspect high priority sanitary sewer laterals. ▪ Complete an updated gas cost of service study; the previous study was conducted in 2012. Goals and Objectives GOAL 1 Provide safe and efficient delivery of natural gas to customers. Objectives: ▪ Continue repairing 100 percent of laterals damaged by crossbore within 24 hours. ▪ Remove and replace the remaining 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 Sustainability and Climate Action Plan (S/CAP) using offsets. 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 2016 FY 2017 Actuals Actuals FY 2018 FY 2018 Adopted Estimated FY 2019 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. 446 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 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 or mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. FY 2016 Actuals 100.00% 100.00% FY 2017 Actuals 0.00% FY 2018 Adopted 100.00% 100.00% 100.00% FY 2018 Estimated 100.00% FY 2019 Adopted 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. The Federal Department of Transportation (DOT) regulations require a survey of the entire City once every five years. In addition to a walking survey, a mobile (vehicle) survey of all gas mains and 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. The department did not perform a walking survey in 2017. INCREASE ENVIRONMENTAL SUSTAINABILITY AND PROMOTE EFFICIENT USE OF NATURAL GAS RESOURCES Goal Support environmental sustainability and promote efficient use of natural gas resources. Objective Increase gas efficiency participation. Natural gas savings achieved annually through efficiency programs Description Purpose Status FY 2016 Actuals 286,317.00 FY 2017 Actuals 228, 707.00 FY 2018 Adopted 287, 000.00 FY 2018 Estimated 287,000.00 FY 2019 Adopted 301,000.00 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 customers 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 2017 gas efficiency savings were above the annual target for the tenth year in a row. As the cost of gas decreases, the Department anticipates a decline in the type of large commercial gas savings projects that made up the majority of this year's savings. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 447 UTILITIES Workload V Number of Customer Accounts (Gas) Number of gas leaks repaired ensures FY 2016 Actuals 23,467 109 3udget Summary 1 FY 2016 Actuals FY 2017 Actuals 23,637 FY 2017 Actuals 82 FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 23,460 FY 2018 Adopted Budget 50 23,460 FY 2019 Adopted Budget 24 FY 2019 Change $ 23,637 50 FY 2019 Change % Dollars by Division CIPGas Fund 3,298,187 2,694,478 6,052,844 5,567,183 (485,661) (8.0)% Gas Administration 9,729,505 10,476,335 12,283,724 12,069,893 (213,832) (1.7)% Gas Customer Service 1,364,272 1,440,930 1,693,417 1,779,485 86,067 5.1% Gas Demand Side Management 565,553 855,204 1,593,290 1,547,073 (46,217) (2.9)% Gas Engineering (Operating) 425,602 354,827 567,176 561,931 (5,245) (0.9)% Gas Operations and Maintenance 4,158,721 4,321,176 5,550,022 6,632,739 1,082,717 19.5% Gas Resource Management 8,599,212 13,129,316 16,185,726 15,398,027 (787,699) (4.9)% Total 28,141,053 33,272,265 43,926,200 43,556,331 (369,869) (0.8)% Dollars by Category Salary & Benefits Healthcare 819,155 905,632 1,053,572 1,089,891 36,320 3.4% Other Benefits 136,962 94,385 149,353 153,760 4,407 3.0% Overtime 325,581 241,406 188,249 193,144 4,894 2.6% Pension 1,116,780 1,234,331 1,511,446 1,571,349 59,903 4.0% Retiree Medical 543,452 594,708 625,662 667,617 41,955 6.7% Salary 3,603,977 3,484,177 5,406,444 5,569,839 163,395 3.0% Workers' Compensation 64,978 101,734 173,330 124,864 (48,466) (28.0)% Total Salary & Benefits 6,610,886 6,656,373 9,108,056 9,370,463 262,407 2.9% Allocated Charges 2,550,031 2,771,186 3,938,355 4,328,918 390,563 9.9% Contract Services 573,304 896,927 1,446,000 2,463,313 1,017,313 70.4% Debt Service 248,930 226,747 802,615 802,615 -% Equity Transfer 6,194,000 6,726,000 6,733,000 6,563,000 (170,000) (2.5)% Facilities & Equipment - - 19,790 19,039 (751) (3.8)% General Expense 348,019 465,031 780,274 769,134 (11,140) (1.4)% 448 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Summary Operating Transfers -Out Rents & Leases Supplies & Material Transfer to Infrastructure FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget 375,638 457,658 899,639 640,642 688,649 713,115 728,615 759,870 445,378 324,485 497,216 488,816 100,119 71,969 - - FY 2019 Change $ FY 2019 Change % (258,997) (28.8)% 31,254 4.3% (8,400) (1.7)% -% Utility Purchase 8,127,485 12,562,932 15,586,773 14,671,556 (915,217) (5.9)% Capital Improvement Program 1,878,613 1,399,844 3,385,866 2,678,965 (706,901) (20.9)% Total Dollars by Expense 28,141,053 33,272,265 43,926,200 43,556,331 (369,869) (0.8)% Category Revenues Charges for Services 20,982 24,303 20,000 20,000 -% Charges to Other Funds 216,628 219,023 95,587 98,072 2,486 2.6% Net Sales 29,021,397 35,214,383 34,740,465 36,160,635 1,420,170 4.1% Other Revenue 984,314 957,753 1,060,510 1,091,935 31,425 3.0% Return on Investments 448,615 506,216 526,300 526,300 - -% Total Revenues 30,691,936 36,921,679 36,442,861 37,896,942 1,454,080 4.0% Positions by Division CIP Gas Fund 17.10 17.10 15.80 15.80 -% Gas Customer Service 8.41 8.78 9.03 9.13 0.10 1.11% Gas Demand Side Management 0.34 1.34 1.94 1.54 (0.40) (20.62)% Gas Engineering (Operating) 1.15 1.40 1.40 1.40 - -% Gas Operations and Maintenance 22.38 22.43 23.98 24.30 0.32 1.34% Gas Resource Management 2.77 1.50 0.96 1.66 0.70 72.99% Total 52.16 52.55 53.11 53.83 0.72 1.36% Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services FY 2016 Actuals 0.26 0.65 FY 2017 Actuals 0.23 0.75 0.10 0.05 FY 2018 Adopted Budget 0.23 0.85 FY 2019 Adopted Budget 0.23 0.85 0.05 0.05 FY 2019 Change FTE FY 2019 Salary 16,675 66,074 10,057 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 449 UTILITIES Staffing Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst Cathodic Protection Technician Assistant FY 2016 Actuals 0.20 0.20 0.15 0.25 FY 2017 Actuals 0.20 0.20 0.15 0.25 0.83 1.28 1.00 1.00 FY 2018 Adopted Budget 0.20 0.20 0.15 0.25 FY 2019 Adopted Budget 0.20 0.20 0.15 0.25 1.48 1.15 1.00 1.00 FY 2019 Change FTE FY 2019 Salary 34,316 38,979 28,807 44,148 (0.33) 175,644 105,001 Cathodic Technician 1.00 1.00 1.00 1.00 128,908 Cement Finisher 0.25 0.25 0.68 0.68 64,093 Contracts Administrator 0.10 0.10 0.10 0.10 11,771 1.51 1.26 1.26 1.26 - 142,864 Coordinator Utilities Projects Customer Service Representative 1.50 1 .62 1.87 1.87 - 144,067 Customer Service Specialist 0.50 0.68 0.68 0.68 - 57,608 Customer Service Specialist -Lead 0.50 0.58 0.58 0.58 52,553 2.00 2.00 2.00 2.00 261,350 Engineer Engineering Manager - Electric 0.15 0.15 0.15 0.15 27,125 Engineering Manager - WGW 0.33 0.33 0.33 0.33 - 51,885 Engineering Technician III 0.70 0.70 0.70 0.70 - 68,398 Equipment Operator 0.43 0.43 - - - - Gas and Water Meter Measurement 3.20 3.20 335,418 and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician Gas System Technician II Heavy Equipment Operator Heavy Equipment Operator - Install/Repair Inspector, Field Services Maintenance Mechanic -Welding Manager Customer Service 2.00 0.90 2.90 2.57 2.52 0.65 0.80 0.80 - 89,730 2.52 2.52 247,586 0.65 0.65 67,355 1.17 1.42 1.42 1.42 149,730 1.00 1.00 1.00 1.00 104,895 0.33 0.33 0.33 0.33 44,019 450 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Staffing Job Classification Manager Treasury, Debt & Investments Manager Utilities Compliance Manager Utilities Credit & Collection FY 2016 Actuals 0.25 0.15 Manager Utilities Marketing 0.20 Services FY 2017 Actuals 0.10 0.25 0.15 FY 2018 Adopted Budget 0.10 0.25 FY 2019 Adopted Budget 0.10 0.25 0.15 0.15 FY 2019 Change FTE FY 2019 Salary 14,394 41,818 20,205 Manager Utilities Operations WGW 0.20 0.20 0.20 0.20 31,683 Manager Utilities Program Services 0.20 0.20 0.20 26,478 Meter Reader 1.92 1.98 1.98 1.98 143,278 Meter Reader -Lead 0.32 0.33 0.33 0.33 - 25,547 Principal Business Analyst 0.33 0.33 0.33 0.33 - 47,677 Program Assistant I 0.33 0.33 0.33 0.33 26,026 Project Engineer 1.00 1.00 1.00 1.00 140,646 Resource Planner 0.95 0.65 (0.05) 0.65 0.70 90,990 Restoration Lead 0.43 0.43 0.43 0.43 44,063 SCADA Technologist 0.20 0.20 0.20 0.20 - 29,994 Senior Business Analyst 0.66 0.66 0.66 0.99 0.33 135,475 Senior Engineer 2.70 2.70 2.70 2.70 - 390,235 Senior Management Analyst 0.05 Senior Mechanic 0.33 0.33 0.33 0.33 36,343 Senior Resource Planner 0.77 0.30 0.46 0.46 67,898 Senior Utilities Field Service 0.41 0.41 0.41 0.41 - 46,808 Representative Substation Electrician 0.10 0.10 0.10 0.10 12,874 Supervisor Inspection Services 0.29 Utilities Engineer Estimator 0.85 0.85 0.85 0.85 102,036 Utilities Field Services 1.75 1.75 1.75 1.75 - 186,774 Representative UtilitieslnstallRepair-Lead-Welding 1.30 1.30 1.30 1.30 151,109 Certified Utilities Install Repair -Welding 1.95 1.95 1.95 1.95 - 195,343 Certified Utilities Install/Repair 4.45 3.85 3.85 3.85 400,676 Utilities Install/Repair Assistant 0.65 0.65 0.65 0.65 - 57,374 Utilities Install/Repair-Lead 1.98 1.98 1.98 1.98 - 208,183 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 451 UTILITIES Staffing Job Classification Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator FY 2016 Actuals 0.35 0.29 0.35 FY 2017 Actuals 0.45 0.29 0.70 FY 2018 Adopted Budget 0.50 0.29 1.00 FY 2019 Adopted Budget 0.50 0.29 0.70 FY 2019 Change FTE (0.30) FY 2019 Salary 59,553 28,409 79,202 Utilities Safety Officer 0.20 0.20 0.20 0.20 - 22,739 Utilities Supervisor 2.08 2.37 2.37 2.37 - 273,403 Water System Operator II 0.66 0.66 0.66 0.66 - 64,818 Sub -total: Full -Time Equivalent 49.68 51.14 51.54 0.40 5,771,109 Positions Temporary/Hourly 3.13 2.88 1.97 2.29 0.32 133,120 Total Positions 52.16 52.55 53.11 53.83 0.72 5,904,228 49.03 452 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Reconciliation I Positions Expenditures Revenues Net Gas Fund Prior Year Budget 53.11 43,926,200 36,442,862 7,483,338 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution One-time Prior Year Budget Adjustments Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Net -zero Utilities Staffing Realignment (increase of 0.7 FTE Resource Planner and 0.16 FTE Journey Level Laborer - H positions; decrease of 0.3 FTE Utilities Marketing Program Administrator positions) Gas Customer Sales Revenue (4% Rate Increase) Rents & Leases Expenditure Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Transfer to Water Fund (WS -02014 - Water, Gas, Wastewater Utility GIS Data) Management Development Funding Custodial Contract Funding Transfer to Technology Fund (TE-05000 Radio Infrastructure Replacement and TE-10001 Utilities Customer Billing Software Replacement) Transfer to Electric Fund (EL -11014 - Smart Grid Technology Installation) Equity Transfer to General Fund (FY 2019 Projected) Capital Improvement Funding Gas Commodity Purchases Expenditure General Fund Cost Allocation Plan Public Works Engineering & Inspection Services Allocated Charges General Liability Insurance Allocated Charges Ground Maintenance Allocated Charges Print & Mail Allocated Charges Storm Drain Allocated Charges Street Cut Allocated Charges (148,937) - (148,937) 0.56 — I 305,900 19,254 17,199 13,421 (3,470) (5,037) (109,303) (120,000) (170,000) (682,085) (915,217) 123,078 119 17,842 1,871 12,696 8 1,034 - (148,937) — (148,937) 1,422,655 31,425 305,900 (1,422,655) 19,254 17,199 13,421 (3,470) (5,037) (109,303) (120,000) (170,000) (713,510) (915,217) 123,078 119 17,842 1,871 12,696 8 1,034 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 453 UTILITIES 3udget Reconciliation Positions Net Expenditures Revenues Gas Fund Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities 239,220 56 9,042 (12,708) (49,760) 0.56 (1,306,839) 239,220 56 9,042 (12,708) (49,760) 1,454,080 (2,760,919) Total FY 2019 Base Budget 53.67 42,470,424 37,896,942 4,573,482 Budget Proposals 1 Crossbore Gas Safety Program - Phase II Contract 2 Supplemental Pension Trust Fund Contribution 3 Reclassification of Business Analyst to Senior Business Analyst Budget Changes 1,000,000 79,311 6,597 — 1,085,908 1,000,000 79,311 6,597 1,085,908 Total FY 2019 Adopted Budget 53.6 43,556,331 37,896,942 5,659,390 454 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Adjustments Positions Expenditures Revenues Net Gas Fund 1 Crossbore Gas Safety Program - Phase II Contract 0.00 1,000,000 0 1,000,000 This action increases funding in contract services for Phase II of the Crossbore Safety Program. Launched in FY 2012, this program ensures that there are no natural gas lines inadvertently installed or cross bored through sewer laterals as these setups can lead to potentially hazardous situations. In Phase I, approximately 40% of total laterals (7,000 out of 18,000) were inspected and cleared. Phase II of the program will inspect and repair approximately 2,000 sewer laterals that have been categorized as high -risk cross bores. Phase II is expected to cost between $3 million to $4 million and will take 3 to 4 years to complete. (Ongoing costs: $1,000,000) Performance Results Proactively examining and repairing crossbores will prevent potentially hazardous situations such as gas leaks in the future. 2 Supplemental Pension Trust Fund Contribution 0.00 79,311 This action transfers $79,311 from the Gas Funds to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Gas Funds' annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 3 Reclassification of Business Analyst to Senior Business Analyst 0.00 t' I This action reclassifies a 1.0 FTE Business Analyst to a 1.0 FTE Senior Business Analyst in the Utilities Department to align with current staffing levels and assignments. Duties assigned to this position were evaluated through the appropriate processes with the Employee Relations Division in the Human Resources Department and a settlement was reached in February 2018. This action aligns authorized staffing levels with this settlement agreement which determined the Senior Business Analysts was more commensurate with the duties assigned. (Ongoing costs: $6,597) Performance Results This action ensures the table of organization is adjusted to reflect the employee relations settlement action. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 455 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 Substantially completed four major capital improvement projects for the sanitary sewer system (Sanitary Sewer Replacement (SSR) projects 24, 25, 26, and 27). This accounts for approximately 42,485 linear feet of sanitary sewer mains, 659 sewer laterals, and 114 manholes in University South, Professorville, and Old Palo Alto neighborhoods for SSR 24/ 25/26; and approximately 15,151 linear feet of wastewater main pipelines, 247 lateral pipelines and 42 manholes in Downtown North, Crescent Park, Community Center and Duveneck/St. Francis neighborhoods for SSR 27. Initiatives Conduct an updated cost of service study for wastewater collection; the previous study was completed in 2011. 456 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES • Implement Phase II of the Crossbore Gas Safety Program to inspect high priority sanitary sewer laterals. ▪ Begin design of SSR project 28 to replace approximately 21,000 linear feet of sewer main pipelines in the Charleston Meadows and Leland Manor/Garland neighborhoods. • Acquire and deploy proven systems management technologies and replace a legacy sewer and sanitary overflow tracking software. Goals and Objectives GOAL 1 Maintain and provide reliable and cost-effective wastewater services to customers. Objectives: • Clean and maintain sewer mains in commercial areas on a quarterly basis. ▪ Clean and video a minimum of 17%, or 3,060, of the City -owned laterals annually to comply with the 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. ▪ Maintain a fleet of dependable vehicles to provide high quality cleaning and servicing of the sewer system. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 457 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 FY 2016 Actuals 133.00 FY 2017 Actuals 61.00 FY 2018 Adopted 145.00 FY 2018 Estimated 132.00 FY 2019 Adopted 75.00 17.00% 19.00% 18.00% 19.00% 18.00% 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 SSMP, all the City's sewer mains must be cleaned within 30 months. The City is meeting the objectives of its SSMP; through the implementation of an aggressive sewer main cleaning, the number of blockages and overflows has decreased. The division is on target to complete inspection of 19%, or 3,447 laterals of 18,141 in the City in FY 2018. Workload Measures Number of Customer Accounts (Wastewater) Number of sewage overflows in a fiscal year Percent of sewage spill 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2018 Estimated FY 2019 Adopted 22,016 22,216 22,010 22,010 22,010 100 65 72 65 100.00% 94.00% 100.00% 98.00% 100.00% 88.00% 88.00% 88.00% 89.00% 1.50% 1.20% 1.50% 1.50% 1.50% 95 88.00% 458 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Summary 1 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 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % 5,300,945 10,265,576 2,188,157 6,631,085 4,442,928 203.0% 1,962,889 2,379,821 2,847,999 2,648,640 (199,359) (7.0)% 255,586 274,932 301,679 332,034 30,354 10.1% 347,062 291,893 480,976 479,537 (1,439) (0.3)% 11,405,108 11,149,370 13,354,992 13,783,976 428,984 3.2% 19,271,590 24,361,592 19,173,803 23,875,272 4,701,469 24.5% Dollars by Category Salary & Benefits Healthcare 519,724 541,581 667,936 621,177 (46,759) (7.0)% Other Benefits 67,991 50,285 76,568 78,258 1,690 2.2% Overtime 271,686 250,958 147,159 150,985 3,826 2.6% Pension 606,146 673,275 838,155 867,095 28,940 3.5% Retiree Medical 124,755 136,521 143,626 259,629 116,003 80.8% Salary 2,332,607 2,741,131 2,968,946 3,050,134 81,188 2.7% Workers' Compensation 22,645 31,589 95,475 68,779 (26,697) (28.0)% Total Salary & Benefits 3,945,556 4,425,340 4,937,866 5,096,057 158,191 3.2% Allocated Charges 936,248 918,413 2,607,743 2,540,312 (67,430) (2.6)% Contract Services 171,722 114,936 247,640 248,986 1,346 0.5% Debt Service 46,777 42,568 129,001 129,001 - -% Facilities & Equipment - 214 3,000 12,828 9,828 327.6% General Expense 47,240 59,133 122,160 125,420 3,260 2.7% Operating Transfers -Out 338,264 414,853 393,160 294,055 (99,105) (25.2)% Rents & Leases 373,180 396,092 399,647 419,562 19,915 5.0% Supplies & Material 320,224 272,399 385,618 380,618 (5,000) (1.3)% Transfer to Infrastructure 57,499 50,002 - - - -% Utility Purchase 8,769,780 8,390,646 9,915,579 10,276,371 360,792 3.6% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 459 UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2016 Actuals 4,265,100 19,271,590 FY 2017 Actuals 9,276,997 24,361,592 FY 2018 Adopted Budget 32,389 19,173,803 FY 2019 Adopted Budget 4,352,062 23,875,272 Revenues Charges for Services 20,972 20,955 10,000 10,000 Charges to Other Funds 30,107 30,107 30,107 30,890 783 2.6% Net Sales 16,296,938 18,237,556 17,957,112 19,835,873 1,878,760 10.5% Other Revenue 511,434 245,565 1,057,820 1,069,995 12,175 1.2% Return on Investments 299,684 215,909 266,500 266,500 - -% Total Revenues 17,159,136 18,750,093 19,321,539 21,213,257 1,891,718 9.8% FY 2019 Change $ 4,319,672 4,701,469 FY 2019 Change % 13,336.7% 24.5% 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 Assistant Director Utilities Engineering Assistant Director Utilities Operations Associate Engineer 0.50 - - - - - Business Analyst 0.50 0.75 0.75 0.75 - 114,551 Cement Finisher 0.50 0.50 0.76 0.76 - 71,633 12.52 12.52 12.52 12.52 - % 3.06 2.19 1.15 1.40 13.02 13.06 2.22 2.22 1.40 1.40 12.86 13.02 0.16 - % - % 1.26% 29.74 29.17 29.00 29.16 0.16 0.56% FY 2016 Actuals 0.25 0.40 FY 2017 Actuals 0.23 0.40 0.15 0.15 FY 2018 Adopted Budget 0.23 0.40 FY 2019 Adopted Budget 0.23 0.40 0.15 0.15 FY 2019 Change FTE - % FY 2019 Salary 16,675 31,094 29,234 0.10 0.10 0.10 0.10 19,205 460 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Staffing FY 2018 Adopted Budget 0.05 1.10 1.45 0.25 1.00 0.15 0.34 0.45 FY 2019 Adopted Budget 0.05 1.10 1.45 0.25 1.00 0.15 0.34 0.45 Job Classification Contracts Administrator Coordinator Utilities Projects Customer Service Representative Customer Service Specialist Customer Service Specialist -Lead Engineer FY 2016 Actuals FY 2017 Actuals 0.05 0.05 1.35 1.10 1.38 1.20 0.46 - 0.46 0.25 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 0.23 0.23 0.23 Heavy Equipment Operator 3.15 3.15 3.15 Install/Repair Industrial Waste Investigator - 0.50 0.50 0.50 - 1.43 1.68 1.68 1.68 - Maintenance Mechanic -Welding 0.20 0.20 0.20 0.20 Manager Utilities Credit & 0.15 0.15 0.15 0.15 Collection FY 2019 Change FTE Inspector, Field Services FY 2019 Salary 5,885 124,722 111,710 22,652 130,675 27,125 53,457 43,970 22,597 300,957 54,257 177,145 20,979 20,205 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 - 26,815 Project Engineer 2.00 2.00 2.00 2.00 281,293 Restoration Lead 0.26 0.26 0.26 0.26 26,643 Senior Engineer 1.30 1.30 1.30 1.30 190,307 0.33 0.33 0.33 0.33 - 36,343 Senior Mechanic Supervisor Inspection Services 0.42 - - - - - Utilities Engineer Estimator 0.47 0.47 0.47 0.47 - 55,366 Utilities Field Services Representative 133,410 Utilities Install Repair -Lead -Welding Certified Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair-Lead Utilities Locator 1.25 0.24 0.36 1.25 0.24 0.36 1.25 0.24 0.36 1.25 0.24 0.36 27,897 36,063 5.50 4.25 4.25 4.25 - 442,305 2.00 2.00 2.00 2.00 - 227,162 0.39 0.39 0.39 0.39 - 38,205 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 461 UTILITIES Staffing Job Classification FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted FY 2019 Budget Change FTE FY 2019 Salary Utilities Safety Officer Utilities Supervisor Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 0.10 1.30 0.10 1.72 0.10 1.72 0.10 1.72 11,369 183,671 28.77 28.15 28.40 28.40 — 3,163,103 0.98 1.02 0.60 0.76 0.16 50,669 29.74 29.17 29.00 29.16 0.16 3,213,772 3udget Reconciliation Positions Expenditures Revenues Net Wastewater Collection Fund Prior Year Budget 29.00 19,173,803 19,321,540 (147,737) One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution One-time Prior Year Budget Adjustments Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Net -zero Utilities Staffing Realignment (increase of 0.16 FTE Journey Level Laborer - H position) Capital Improvement Funding Wastewater Collection Customer Sales Revenue (11% Rate Increase) Wastewater Treatment Expenses Bank Card Transaction Fee Transfer to Water Fund (WS -02014 Water, Gas, Wastewater Utility GIS Data) Rents and Leases Expenditure Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Management Development Funding Custodial Contract Funding 0.16 (83,380) (83,380) 185,600 4,335,844 360,792 15,100 13,421 9,915 9,828 (1,840) (3,654) (83,380) — (83,380) 12,175 1,879,542 185,600 4,323,669 (1,879,542) 360,792 15,100 13,421 9,915 9,828 (1,840) (3,654) 462 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 3udget Reconciliation Net Wastewater Collection Positions Expenditures Revenues Fund Transfer to Technology Fund (TE-05000 Radio Infrastructure Replacement and TE-10001 Utilities Customer Billing Software Replacement) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Print & Mail Allocated Charges Public Works Engineering and Inspection Services Allocated Charges Street Cut Fee Allocated Charges Survey Fee Allocated Charges Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities (90,425) (200,968) 9,828 (935) 242 2,067 534 122,675 293 7,091 (7,000) (27,409) 0.16 4,741,000 1,891,717 (90,425) (200,968) 9,828 (935) 242 2,067 534 122,675 293 7,091 (7,000) (27,409) 2,849,283 Total FY 2019 Base Budget 29.16 23,831,423 21,213,257 2,618,166 Budget Proposals 1 Supplemental Pension Trust Fund Contribution 43,849 43,849 Budget Changes Total FY 2019 Adopted Budget 29.16 43,849 23,875,272 43,849 21,213,257 2,662,015 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 463 UTILITIES 3udget Adjustments Positions Expenditures Revenues Net Wastewater Collection Fund 1 Supplemental Pension Trust Fund Contribution 0.00 43,849 0 43,849 This action transfers $43,849 from the Wastewater Collection Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Wastewater Collection Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 464 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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, the engineering division is implementing a seismic upgrade to the existing reservoirs, wells and receiving stations to increase supply reliability during catastrophic emergencies. Accomplishments • Collaborated 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 non -potable and potable reuse options. Contracted with a consultant to complete the plan. ▪ Started construction of a Water Main Replacement project (WMR 26) to replace approximately 11,000 linear feet of water main pipelines, 200 service pipelines, and 40 fire hydrants with approximately 29% completed this year. Completed design of water main replacement for Upgrade Downtown to replace approximately 3,155 linear feet of water main pipelines, 52 service pipelines, and 10 fire hydrants. ▪ Completed the construction of the Montebello Reservoir steel water tank rehabilitation and seismic upgrade, including a new roof, interior and exterior coatings, a new control valve, and paving. Completed the remaining roof coating portion in the construction of the Boronda Reservoir concrete water tank rehabilitation project. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 465 UTILITIES • Retained a consultant to review storage and operational needs. Consultant will develop a water model that will assist in the storage and operational recommendations. ▪ Engaged a consultant to perform a geological investigation of the foundation leaks at the Mayfield Tank to provide a report containing results of the subsurface explorations and laboratory testing and recommend repair alternatives. • Completed two transmission main repairs in the foothills area west of Highway 280. • Completed the first annual water loss audit (SB 555) to the State Water Resource Control Board (SWRCB). ▪ Completed over 70 customer service projects. Initiatives • Complete the geological study of the Mayfield tank site to assess the stability of the reservoir and begin repairs based on the findings. • Continue construction of Water Main Replacement (WMR) 26 and Upgrade Downtown projects to replace approximately 14,000 linear feet of water main pipelines, 250 service pipelines, and 50 fire hydrants. ▪ Complete design for WMR 27 in Oak Creek and University Avenue neighborhoods. ▪ Start and complete the preliminary design report for the Corta Madera tank replacement project. This will include a topographic survey and a geotechnical report for the site. ▪ Start and complete the transmission main repair and valve installation at the intersection of Page Mill and Old Page Mill Road. ▪ Complete collaboration with Public Works and Santa Clara Valley Water District on evaluation of recycled water options, including evaluating the economic potential of a Palo Alto recycled water system. 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. • Complete seismic upgrades to water system (e.g. reservoirs, receiving stations and wells). GOAL 2 Increase environmental sustainability of the water supply system. 466 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES 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 Provide safe and clean drinking water for customers. Objective Percentage of customer -owned water backflow prevention devices in compliance Description Purpose Status Ensure drinking water meets all regulatory standards. FY 2016 Actuals 90.00% FY 2017 Actuals 91.00% FY 2018 Adopted 94.00% FY 2018 Estimated 91.00% FY 2019 Adopted 92.00% 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 90-95 percent on an annual basis. There are 3,856 backflow devices. This number is growing every year as current codes require backflow installation for residences as well as commercial properties. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 467 UTILITIES WATER EFFICIENCY Goal Objective Annual savings achieved through water efficiency programs as a percentage of total sales Description Purpose Status WATER QUALITY Increase environmental sustainability of the water supply system. Increase water conservation and efficiency participation. FY 2016 Actuals 1.96% FY 2017 Actuals 1.91% FY 2018 Adopted 0.91% FY 2018 Estimated 1.40% FY 2019 Adopted 1.40% 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 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 goal to reduce expected water use by 20 percent by 2020. Water efficiency program savings were significantly higher from FY 2015 through FY 2017 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 rainy winter season. 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 2016 Actuals 100.00% FY 2017 Actuals 100.00% FY 2018 Adopted 100.00% FY 2018 Estimated 100.00% FY 2019 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. 468 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Workload V Percent of miles of water mains replaced Number of Customer Accounts (Water) Percent of surveyed rating the quality of the Drinking Water as "Good" or "Excellent" ensures FY 2016 Actuals 0.70% 19,994 87.00% 3udget Summary II FY 2016 Actuals FY 2017 Actuals 0.20% 20,213 88.00% FY 2017 Actuals FY 2018 Adopted 0.70% 20,000 88.00% FY 2018 Adopted Budget FY 2018 Estimated 1.00% 20,213 88.00% FY 2019 Adopted Budget FY 2019 Adopted 1.00% 20,213 88.00% FY 2019 Change $ FY 2019 Change % Dollars by Division CIP Water Fund 9,082,022 3,453,732 6,127,567 16,043,824 9,916,257 161.8% Water Administration 6,871,823 7,038,937 8,884,495 8,782,413 (102,082) (1.1)% Water Customer Service 2,082,194 1,488,960 2,201,670 2,282,720 81,051 3.7% Water Engineering (Operating) 409,183 355,852 538,106 537,839 (267) (0.0)% Water Operations and Maintenance 5,433,991 5,291,117 7,531,885 7,681,920 150,035 2.0% Water Resource Management 18,219,637 20,943,416 22,203,416 23,699,431 1,496,015 6.7% Total 42,098,850 38,572,014 47,487,138 59,028,147 11,541,009 24.3% Dollars by Category Salary & Benefits Healthcare 750,434 822,738 957,649 958,317 669 0.1% Other Benefits 114,286 94,370 140,523 142,932 2,409 1.7% Overtime 250,524 231,860 267,963 274,930 6,967 2.6% Pension 1,025,830 1,165,780 1,397,443 1,428,203 30,760 2.2% Retiree Medical 260,618 285,198 300,042 427,827 127,784 42.6% Salary 4,949,770 4,627,885 5,117,401 5,154,784 37,383 0.7% Workers' Compensation 89,580 225,163 164,608 118,581 (46,027) (28.0)% Total Salary & Benefits 7,441,043 7,452,994 8,345,630 8,505,574 159,944 1.9% Allocated Charges 2,867,207 3,212,511 4,410,152 4,516,536 106,384 2.4% Contract Services 806,550 155,818 827,806 819,002 (8,804) (1.1)% Debt Service 1,813,658 1,757,088 3,222,606 3,222,606 -% Facilities & Equipment 2,000 16,711 14,711 735.6% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 469 UTILITIES 3udget Summary General Expense Operating Transfers -Out Rents & Leases Supplies & Material Transfer to Infrastructure Utility Purchase Capital Improvement Program Total Dollars by Expense Category FY 2016 Actuals 443,919 251,541 1,803,087 544,371 112,692 17,626,020 8,388, 762 FY 2017 Actuals 417,045 317,220 1,862,485 413,824 84,211 20,075,377 2,823,442 FY 2018 Adopted Budget 666,070 649,055 2,931,563 609,982 21,090,000 4,732,275 FY 2019 Adopted Budget 667,170 486,353 3,003,388 610,982 22,620,000 14,559,826 FY 2019 Change $ 1,100 (162, 702) 71,825 1,000 1,530,000 7.3% 9,827,551 207.7% FY 2019 Change % 0.2% (25.1)% 2.5% 0.2% -% 42,098,850 38,572,014 47,487,138 59,028,147 11,541,009 24.3% Revenues Charges for Services 51,021 60,000 10,000 10,000 -% Charges to Other Funds 442,829 160,766 84,403 81,201 (3,202) (3.8)% From Other Agencies 636,666 512,301 576,632 576,632 -% Net Sales 36,764,774 42,740,545 40,913,999 42,357,861 1,443,862 3.5% Operating Transfers -In 221,833 244,018 512,436 539,278 26,842 5.2% 955,122 844,915 904,280 931,348 27,068 3.0% Return on Investments 738,329 772,015 775,300 775,300 -% 39,810,575 45,334,560 43,777,050 45,271,620 1,494,570 3.4% Other Revenue Total Revenues Positions by Division CIP Water Fund 9.05 9.05 8.03 8.03 - -% Water Customer Service 9.01 9.68 9.66 9.66 - -% Water Engineering (Operating) 1.12 1.37 1.35 1.35 -% 25.44 25.44 25.34 24.85 (0.48) (1.91)% Water Resource Management 1.53 2.44 3.52 3.02 (0.50) (14.19)% Water Operations and Maintenance Total 46.15 47.99 47.90 46.92 (0.98) (2.05)% 470 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Staffing Job Classification Account Specialist Administ rative Associate II Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management FY 2016 Actuals 0.25 0.85 0.20 0.20 0.15 0.25 FY 2017 Actuals 0.23 0.75 FY 2018 Adopted Budget 0.23 0.65 0.20 0.20 0.20 0.15 0.25 0.20 0.15 0.25 FY 2019 Adopted Budget 0.23 0.65 0.20 0.20 0.15 0.25 FY 2019 Change FTE FY 2019 Salary 16,675 50,527 34,316 38,979 28,807 44,148 Business Analyst 1.68 1.73 1.53 1.20 (0.33) 183,281 Cement Finisher 0.25 0.25 0.56 0.56 - 52,782 Contracts Administrator 0.10 0.10 0.10 0.10 11,771 Coordinator Utilities Projects 1.34 1.09 1.09 1.09 123,588 1.26 1.56 1.81 1.81 - 139,444 Customer Service Specialist 0.42 0.66 0.66 0.66 - 55,914 0.42 0.59 0.59 0.59 - 53,459 Engineer 1.00 1.00 1.00 1.00 - 130,675 0.15 0.15 0.15 0.15 27,125 Engineering Manager - WGW 0.33 0.33 0.33 0.33 51,885 0.45 1.45 0.45 0.45 43,970 Customer Service Representative Customer Service Specialist -Lead Engineering Manager - Electric Engineering Technician Ill Equipment Operator 0.31 0.31 Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician II Heavy Equipment Operator Heavy Equipment Operator - Install/Repair Inspector, Field Services Maintenance Mechanic -Welding Manager Customer Service Manager Utilities Compliance Manager Utilities Credit & Collection 0.80 0.20 0.80 0.20 83,855 22,432 0.10 0.10 - - - - 2.00 1.95 1.95 1.95 - 191,584 0.20 0.20 20,523 0.20 1.40 1.65 1.65 1.65 - 173,982 0.80 0.80 0.80 0.80 - 83,916 0.34 0.34 0.34 0.34 - 45,353 0.50 0.50 0.50 0.50 83,637 0.15 0.15 0.15 0.15 - 20,205 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 471 UTILITIES Staffing Job Classification Manager Utilities Marketing Services Manager Utilities Operations WGW Manager Utilities Program Services Meter Reader Meter Reader -Lead FY 2016 Actuals 0.20 FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Salary 0.50 0.50 0.50 0.50 - 79,206 0.20 0.20 0.20 26,478 1.67 2.03 2.03 2.03 146,896 0.28 0.34 0.34 0.34 26,321 Power Engineer 0.30 0.30 0.30 0.30 - 41,851 0.33 0.33 0.33 0.33 - 47,677 Program Assistant I 0.33 0.33 0.33 0.33 - 26,026 2.00 2.00 2.00 2.00 281,293 Resource Planner 0.10 0.70 1.20 0.70 (0.50) 97,989 Restoration Lead 0.31 0.31 0.31 0.31 31,766 SCADATechnologist 0.80 0.80 0.80 0.80 - 119,977 0.66 0.66 0.66 0.99 0.33 135,475 Senior Engineer 1.00 1.00 1.00 1.00 - 141,922 0.34 0.34 0.34 0.34 37,444 Senior Resource Planner 0.55 1.10 1.68 1.68 255,845 Senior Utilities Field Service 0.49 0.49 0.49 0.49 - 55,941 Representative Principal Business Analyst Project Engineer Senior Business Analyst Senior Mechanic Senior Water Systems Operator 2.00 2.00 2.00 2.00 - 222,769 Substation Electrician 0.40 0.40 0.40 0.40 51,496 Supervisor Inspection Services 0.29 0.43 0.43 0.43 0.43 50,453 Utilities Engineer Estimator Utilities Field Services 1.50 1.50 1.50 1.50 - 160,092 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 0.46 0.69 0.46 0.46 0.46 53,469 0.69 0.69 0.69 69,121 2.05 1.90 1.90 1.90 197,736 0.35 0.35 0.35 0.35 30,893 1.02 1.02 1.02 1.02 107,246 0.15 0.34 0.25 0.35 0.34 0.34 0.35 41,687 0.34 33,307 472 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Staffing Job Classification Utilities Marketing Program Administrator Utilities Safety Officer 0.15 0.15 Utilities Supervisor Water Meter Cross Connection Technician FY 2016 Actuals FY 2017 Actuals 0.40 0.40 2.62 2.91 2.00 FY 2018 Adopted Budget 0.40 0.15 FY 2019 Adopted Budget 0.40 0.15 2.91 2.91 FY 2019 Change FTE FY 2019 Salary 45,258 17,054 360,684 Water System Operator I - 1.00 - - - - Water System Operator II 3.34 3.34 3.34 3.34 - 328,016 Sub -total: Full -Time Equivalent 42.95 45.26 45.29 44.79 Positions (0.50) 5,134,228 Temporary/Hourly 3.21 2.73 2.61 2.13 (0.48) 178,714 Total Positions 46.15 47.99 47.90 46.92 (0.98) 5,312,942 3udget Reconciliation Prior Year Budget One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution One-time Prior Year Budget Adjustments Base Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Net -zero Utilities Staffing Realignment (decrease of 0.5 FTE Resource Planner and 0.32 FTE Journey Level Laborer - H positions) Capital Improvement Funding Water Commodity Purchases Expenditure Water Customer Sales Revenue (3% Rate Increase) Rents and Leases Expenditure Silicon Valley Regional Communications Systems (SVRCS) Radio Subscription (CMR #8658) Bay Area Water Supply & Conservation Agency Fee 47.90 47,487,138 - (140,385) - (140,385) 200,934 (0.82) - 9,840,106 1,530,000 56,825 15,561 12,000 43,777,050 3,710,088 (140,385) - (140,385) 53,910 1,440,660 200,934 9,786,196 1,530,000 (1,440,660) 56,825 15,561 12,000 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 473 UTILITIES 3udget Reconciliation Positions Expenditures Revenues Net Water Fund Management Development Funding Custodial Contract Funding Transfer to Electric Fund (EL -11014 - Smart Grid Installation) Transfer to Technology Fund (TE-05000 Radio Infrastructure Replacement and TE-10001 Utilities Customer Billing Software Replacement) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Ground Maintenance Allocated Charges Print & Mail Allocated Charges Public Works Engineering & Inspection Service Allocated Charges Storm Drain Allocated Charges Street Cut Allocated Charges Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) Adjustments to Costs of Ongoing Activities (0.82) (1,230) (3,654) (10,000) (97,814) (163,676) 16,944 258 (5,191) 119 40 1,034 154,478 104,733 10,651 (12,068) (47,256) 11,602,792 1,494,570 (1,230) (3,654) (10,000) (97, 814) (163,676) 16,944 258 (5,191) 119 40 1,034 154,478 104,733 10,651 (12,068) (47,256) 10,108,222 Total FY 2019 Base Budget 47.08 45,271,620 13,677,925 Budget Proposals 1 Supplemental Pension Trust Fund Contribution 2 Reclassification of Business Analyst to Senior Business Analyst Budget Changes 72,005 6,597 78,602 72,005 6,597 78,602 Total FY 2019 Adopted Budget 47.08 59,028,147 45,271,620 13,756,527 474 UTILITIES • _.ITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET UTILITIES Budget Adjustments Budget Adjustmen 1 Supplemental Pension Trust Fund Contribution Positions 0.00 Expendi 72,005 Net Revenues Water Fund I 0 72,005 This action transfers $72,005 from the Water Fund to the General Benefits Fund on a one-time basis to contribute to the City's supplemental Pension Trust Fund. This amount represents approximately 5% of the Water Fund's annual pension contribution. Contributing to the Pension Trust Fund will further 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 Proactively contributing to the supplemental Pension Trust Fund will allow the City to prefund pension costs and continue to address the GASB 68 Net Pension Liabilities (NPL). 2 Reclassification of Business Analyst to Senior Business Analyst This action reclassifies a 1.0 FTE Business Analyst to a 1.0 FTE Senior Business Analyst in the Utilities Department to align with current staffing levels and assignments. Duties assigned to this position were evaluated through the appropriate processes with the Employee Relations Division in the Human Resources Department and a settlement was reached in February 2018. This action aligns authorized staffing levels with this settlement agreement which determined the Senior Business Analysts was more commensurate with the duties assigned. (Ongoing costs: $6,597) Performance Results This action ensures the table of organization is adjusted to reflect the employee relations settlement action. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 475 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 (PAUSD). The Non -Departmental budget may also include estimated provisions or place - holders 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 depend- ing on the nature and frequency of the item. In Fiscal Year 2019, various one-time items that appeared in the Fiscal Year 2018 Budget, includ- ing the $500,000 Operations Reserve, the $400,000 Salary Reserve, and the $150,000 set aside for the Parking Evaluation Study, have been annualized. In Fiscal Year 2019, various adjust- ments are included, such as the elimination of the Airport Fund Transfer, which was a loan from the General Fund to the Airport, the addition of one-time funding for the November 2018 City Council Elections, and ongoing structural reduction of $4.0 million in the General Fund. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 477 NON -DEPARTMENTAL 3udget Summary S r Dollars by Category Cubberley - Lease Payments to PAUSD Contingent Accounts FY 2016 Actuals 5,584,808 FY 2017 Actuals 5,642,424 FY 2018 Adopted Budget 5,923,685 FY 2019 Adopted Budget 6,101, 395 City Manager - - 250,000 250,000 City Council 225,000 225,000 City Attorney 100,000 100,000 Human Resources 50,000 50,000 Human Services Resource Allocation Process (HSRAP) Innovations & Special Events 50,000 50,000 -% 4,025 50,000 50,000 FY 2019 Change $ 177,710 FY 2019 Change % 3.0% -% Budget Operational Reserve 500,000 (4,000,000) (4,500,000) (900.0)% Salary Reserve 400,000 (400,000) (100.0)% Other Contract Services 14,112 40,000 120,000 80,000 200.0% Debt Service 430,791 432,150 432,271 612,948 180,677 41.8% General Expense 46,590 130,186 236,756 89,012 (147,744) (62.4)% Operating Transfers -Out 5,061,723 6,538,924 4,874,446 4,450,215 (424,230) (8.7)% Rents & Leases 172,886 177,506 177,786 177,127 (659) (0.4)% Transfer to Infrastructure 29,365,580 22,859,355 24,980,569 25,172,648 192,079 0.8% Total Dollars by Expense 40,662,378 35,798,682 38,290,513 33,448,345 (4,842,167) (12.6)% 478 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET NON -DEPARTMENTAL 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 38,290,513 38,290,513 One -Time Prior Year Budget Adjustments FY 2018 Operations Reserve Salary Reserve Citywide Parking Evaluation Study One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Transfer to Electric Fund (COSA Transfer) Infrastructure Transfer Debt Service Expenditure (Golf Course, FY 2018) Cubberley Lease Payments to PAUSD Transfer to Technology Fund (Technology Surcharge) Transfer to Public Art Fund Transfer to University Avenue Parking Fund Property Tax Administration Rent and Leases Program and Project Costs (Grant -writing funding) Transfer to Debt Service Funds (Downtown Parking COP Debt) Airport Fund Transfer (FY 2018, $200,000 Loan) Information Technology Capital Transfer (TE- 05000) Adjustments to Costs of Ongoing Activities - (500,000) - (400,000) (150,000) — (1,050,000) — (500,000) - (400,000) (150,000) - (1,050,000) — 208,151 208,151 — 192,079 192,079 — 180,677 — 180,677 177,710 177,710 28,045 — 15,174 — 15,174 — 11,920 — 11,920 2,256 2,256 (659) (659) (20,000) (20,000) (72,221) (200,000) (415,300) — 107,832 (67,221) (200,000) (415,300) — (123,364) Total FY 2019 Base Budget 37,348,345 37,117,149 Budget Adjustments 1 FY 2019 City Council Election Costs 2 FY 2019 General Fund Structural Reduction Total Budget Adjustments 100,000 (4,000,000) - (3,900,000) 100,000 (4,000,000) - (3,900,000) Total FY 2019 Adopted Budget 33,217,149 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 479 NON -DEPARTMENTAL 3udget Adjustments Positions Exp Revenues Net General Fund 1 FY 2019 City Council Election Costs 0.00 1 100,000 This action adds $100,000 in one-time funding for the General City Council Election to be held in November of 2018. This funding is sufficient for the at -large City Council Election that is anticipated to be held as the City Council transitions from nine members to seven members. If any additional election items are brought forward for consideration, such as a ballot measure or other item, additional funding would be required. (Ongoing costs: $0). 100,000 Performance Results This funding supports the democratic process for electing City Council Members. 2 FY 2019 General Fund Structural Reduction 0.00 (4,000,000) 0 (4,000,000) Consistent with the Finance Committee Recommendation on May 23, 2018, this action reduces budgeted expenses in the Genral Fund by $4.0 million. The specific impacts of this reduction will be identified and articulated to the Finance Committee during the remainder of the 2018 calendar year. (Ongoing savings: $4,000,000) Performance Results This action will contribute to the long-term financial sustainability of the organization. 480 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 481 CITY OF PALO ALTO EMPLOYEE INFORMATION 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 $2.2 million increase in employee pension, healthcare costs, and other benefits costs from the Fiscal Year (FY) 2018 Adopted Budget amount of $61.89 million to the Fiscal Year 2019 Budget amount of $64.1 million. This increase is primarily driven by increases in the pension rate and health care costs partially offset by a citywide decrease of 17.6 benefitted positions, or 1.7 percent from FY 2018 Adopted Budget staffing levels (1,058.95 positions to 1,041.35 positions). Of these changes in the Table of Organization, the elimination of 11.0 posi- tions was approved by the City Council during Fiscal Year 2018. An additional 6.60 benefitted positions are recommended to be eliminated in this Operating Budget document. PENSION COSTS The City of Palo Alto provides a defined pension benefit to its employees through the State of California Pension Retirement System (CaIPERS), which manages and administers the program. The CaIPERS program maintains two trust accounts: 1) a plan for safety employees (sworn fire and police personnel); and 2) a plan for miscellaneous employees (all other non -safety person- nel employed by the City such as field personnel, administrative support, and managers). Annu- ally, CaIPERS provides actuarial reports detailing the latest status of the City of Palo Alto Pension trust plans for employees and retirees. These actuarial reports are used to calculate the Actuarial Determined Contribution (ADC) to the trust for the pension obligations. This budget includes the most recent pension rates from these valuation reports, as of June 30, 2016. When compared to the prior fiscal year, Fiscal Year 2019 employer contribution rates rep- resent an average year -over -year increase of 9.9 percent. ▪ Miscellaneous plan rate increased 2.4 percentage points, a year -over -year 7.9 percent growth, from an employer contribution rate of 30.2 percent to 32.6 percent • Safety plan rate increased 5.9 percentage points, a year -over -year 11.9 percent growth, from an employer contribution rate of 49.7 percent to 55.6 percent. With the passage of the California Public Employees' Pension Reform Act (PEPRA), the City has three retirement benefit tiers for Miscellaneous and Safety Plans. As of 2018, approximately 40 percent of the City's employees are either in Tier 2 or Tier 3. Consistent with FY 2018, CaIPERS calculates the pension liability as a normal cost (percent of payroll) and a flat dollar amount to pay down the Unfunded Accrued Liability (UAL). This bud - GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 483 GENERAL BENEFITS FUND OVERVIEW get assumes the pre -payment of the UAL portion of the annual pension cost, which confers sav- ings to the City. In FY 2019, prepayment of the UAL generates $938,000 in savings across the organization, of which $588,000 is realized in the General Fund. These savings are calculated by CaIPERS. The City's mounting pension obligations remain an important context for ongoing service deliv- ery. The CaIPERS board is working to de -risk the pension plan through various actions. In December 2016, the CaIPERS board voted to lower the rate of return to 7.0 percent from 7.5 percent. Beginning in FY 2019, this decrease will be phased in over three years reaching the 7.0 percent discount rate in FY 2021. In anticipation of this lowered rate of return, and to proactively address the City's unfunded pension liability the Finance Committee and staff have met multi- ple times during FY 2018. On September 19th, 2017, the CaIPERS Annual Valuation Reports were transmitted to the Finance Committee and discussed as part of CMR #8509: Review and Discuss CaIPERS Pension Annual Valuation Reports https://www.cityofpaloalto.org/civicax/filebank/documents/61211. According to these valuation reports, the City's current Unfunded Accrued. Liability totals $404.7 million ($143.0 million for the Safety Plan and $261.7 million for the Miscellaneous Plan), and the plans are 64.0% funded (the Safety Plan is 63.6% funded while the Miscellaneous Plan is 64.2% funded.) On October 17, 2017, staff returned to the Finance Committee to review and discuss strategies to address the City's pension liability as part of CMR #8579: City's Pension Liability Discussion and Strategies https://www.cityofpaloalto.org/civicax/filebank/documents/61485. This discussion included a detailed presentation from the City's actuarial services consultant, Bartel and Associ- ates, discussing the City's specific pension outlook. On December 6, 2017, as part of CMR #8676: FY 2019 - FY 2028 Long Range Financial Forecast and City Pension Liabilities https://www.cityofpaloalto.org/civicax/filebank/documents/62316 the City modeled alternative assumptions that demonstrated the impact of changes to the dis- count rate on the City's General Fund budget. As discussed during these public meetings, the City has identified ways to incrementally address the City's pension liabilities. This budget continues the past practice of allocating fund- ing to the City's irrevocable IRS Section 115 Pension Trust Fund ("Trust Fund") using available funding on a one-time basis. The City Council first approved establishing a 115 Pension Trust Fund as part of CMR #7553 on January 23, 2017 https://www.cityofpaloalto.org/civicax/file- bank/documents/55487, authorizing an initial deposit of $2.1 million in General Fund proceeds, or approximately 10 percent of the General Fund Pension annual cost. When combined with the recommended contribution in this budget, the City Council has approved deposits of $7.5 mil- lion ($4.6 million from the General Fund). This additional investment in retirement prefunding will help mitigate the City's risk from lower than anticipated rates of return and from other fac- tors that would affect the City's pension costs. Contributions through the FY 2019 Adopted Budge are detailed below: FY 2017 Mid -year deposited $2.1 million from the General Fund, approximately 10 percent of the City's annual pension contribution, establishing the Trust Fund; 484 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL BENEFITS FUND OVERVIEW • FY 2018 Adopted Budget deposited $1.4 million from other funds throughout the City, matching the 10 percent of annual pension costs that established the trust from the General Fund in the prior year; • FY 2018 Mid -year deposited $2.0 million from all funds, representing approximately 5.0 percent of the City's annual pension contribution ($1.3 million in General Fund); and • FY 2019 Adopted Budget recommends a $2.0 million deposit from all funds, representing approximately 5.0 percent of the City's annual pension contribution ($1.2 million in General Fund). This FY 2019 Adopted Operating Budget reflects a recommended budget adjustment in each department section where the additional contributions to the Trust Fund are budgeted for FY 2019. Although these are one-time adjustments, the City continues to prudently contribute available funds to the Trust Fund at least on an annual basis. In FY 2019, one-time savings were identified; the Workers' Compensation Fund and General Liability Fund had accumulated excess fund balance due to prior year savings. The City will continue to proactively strategize how to address the increased pension costs and growing unfunded liability through continued deposits to the Trust Fund as well as other mechanisms such as: • Managing full-time benefitted position authorization levels. This Fiscal Year 2019 Budget reduces nearly two percent of benefitted position when compared to FY 2018. • One-time surpluses resulting from excess revenues or expense savings at year-end will continue to be brought forward for City Council consideration as potential contributions to the Trust Fund. ▪ Continue to strive to contain costs with measures such as cost sharing with employees. In FY 2016, labor contracts approved an employee pick-up of a portion of the employer pension contribution (upon completion of an amendment to the City's contract with CaIPERS). These contracts stipulated up to a 3.0 percent contribution cost share with safety groups and up to a 1.0 percent contribution cost share with miscellaneous groups SEIU and the management group. It is anticipated that staff will return to the Finance Committee with a range of potential policies and procedures to incrementally address the City's pension liabilities for consideration. These options are intended to identify a path forward for the City to address its pension obligations on an ongoing basis in order to mitigate implications on service delivery. HEALTHCARE COSTS The Fiscal Year 2019 budget for healthcare is based on the health plan choices employees made for Calendar Year 2018. The FY 2018 budget presumed a four percent increase in dental and vision costs; however, the City enjoyed favorable rate decreases from Calendar Year 2017 to Cal- endar Year 2018 of more than 10 percent for dental and more than three percent for vision, driven primarily by decreased utilization. This one-time decrease is not expected to continue in the near future, and increases of four percent for both dental and vision rates, effective January 1, 2019, are assumed in the FY 2019 Operating Budget. All bargaining units except the Utilities Management Professional Association of Palo Alto (UMPAPA) are on the flat rate medical plan; UMPAPA uses a 90/10 contribution structure. For Calendar Year 2019, the budget models a four percent annual increase in flat rate medical costs. Ongoing increases in healthcare and other GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 485 GENERAL BENEFITS FUND OVERVIEW benefit costs are an important factor in labor negotiations; staff will continue to monitor labor negotiations and align budgeted funds as necessary. Consistent with the Fiscal Year 2018 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- culated. Health care premiums are contracted at a blended rate, they are the same regardless of age or active versus retired status, with the exception of Medicare premiums. Despite the con- tractually blended rate, 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 and identified as a retiree medical cost. In Fiscal Year 2019, the City's 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, health care costs for active employees have been reduced in the General Benefits Fund by $2.2 million, and a corre- sponding transfer from the General Benefits Fund to the Retiree Health Benefits Fund has been continued to reflect the full payment of the City's Actuarial Determined Contribution (ADC) for Retiree Healthcare in the Retiree Health Benefits Fund. Additional discussion of Retiree Health- care costs and the ADC are located in the Retiree Health Benefits Fund section of this docu- ment. 486 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GENERAL BENEFITS FUND OVERVIEW 3udget Summary ill Dollars by Category Salary & Benefits Healthcare 17,697,809 18,249,553 18,845,038 19,104,761 259,723 1.4% Other Benefits 613,967 609,884 1,090,740 1,118,506 27,767 2.5% Retiree Medical 26,076,879 28,812,075 39,304,074 41,435,938 2,131,864 5.4% Salary 513,382 279,010 23,422 24,571 1,148 4.9% Total Salary & Benefits 44,902,036 47,950,521 59,263,275 61,683,776 2,420,501 4.1% Contract Services 172,858 128,773 215,200 220,795 5,595 2.6% General Expense 150 (196) — — —% Operating Transfers -Out 2,102,000 2,203,000 2,411,030 2,197,000 (214,030) (8.9)% Total Dollars by Expense 47,177,044 50,282,099 61,889,505 64,101,571 2,212,067 3.6% Category FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change $ FY 2019 Change % Revenues Charges for Services 12 485 — —% Operating Transfers -In 2,055,000 1,427,044 1,991,729 564,684 39.6% Other Revenue 46,924,554 52,322,332 59,733,098 61,361,570 1,628,472 2.7% Return on Investments 63,865 50,385 15,765 16,175 410 2.6% Total Revenues 46,988,431 54,428,202 61,175,907 63,369,473 2,193,566 3.6% GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 487 GENERAL BENEFITS FUND OVERVIEW 3udget Reconciliation I Positions Expenditures Revenues Net Prior Year Budget 0.48 61,889,505 61,175,907 713,598 Adjustments to Costs of Ongoing Activities Salary and Benefits Citywide Pension Implied Subsidy Transfer to the Retiree Healthcare Fund Citywide Dental Insurance Citywide Healthcare Insurance Citywide Vision Insurance PARs Contributions and Expenses Department Charges for General Benefits Return on Investments Administrative Costs Commuter Program (CMR #8265, Approved on December 4, 2017) 1,166 1,567,179 (214,030) (229,958) 488,398 1,283 — 564,685 564,684 1,628,472 410 8,343 25,000 1,166 1,567,179 (214,030) (229,958) 488,398 1,283 1 (1,628,472) (410) 8,343 25,000 Adjustments to Costs of Ongoing Activities — 2,212,066 2,193,566 18,500 Total FY 2019 Adopted Budget 63,369,473 732,098 488 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 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. The City's actuarial consultant, Bartel Associates, recently completed their June 30, 2017 actu- arial study. This study captured investment gains for the Retiree Healthcare Trust Fund as of June 30, 2017, lowered the assumed investment returns from 7.25 percent to 6.75 percent, and restated the City's Fiscal Year 2019 annual Actuarial Determined Contribution (ADC). The City's ADC for FY 2019 is $16.0 million, or a 5.5% decrease from FY 2018, representing the favorable performance of this Trust Fund and the positive impacts of the City's proactive funding. The June 30, 2017 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 ADC includes both the normal cost for the plan for FY 2019 as well as the amortization towards the Unfunded Actuarial Accrued Liability (UAAL). According to the valuation as of June 30, 2017, approximately 34 percent of the UAAL is attributable to current active employees, and 66 percent is attributable to retirees. The City has established an irrevocable trust fund to account for assets accumulated to offset the retiree medical costs for current and future retirees. The annual ADC is fully funded in the City's General Fund, Enterprise Funds, and Other Funds. Respectively, the General Fund, Enterprise Funds, and Other Funds contribute 64 percent, 30 percent, and 6 percent of the ADC cost. As stated above, the ADC assumed for the Fiscal Year 2019 budget is $16.0 million. However, the charges to the City's funds are budged at $13.8 million. The difference of $2.2 million represents the City's implied subsidy for retiree healthcare. There is a requirement, first imposed in Fiscal Year 2017, that government agencies must recognize the true cost of medical 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 requirement is intended to rec- ognize that as people age, their medical costs increase; therefore, an actuarial calculation has been performed to recognize the higher cost of medical services for retirees, which is reduced from the active employees' health care costs. This difference is known as the 'implied subsidy'. In Fiscal Year 2019, 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 $2.2 million, and a transfer from the General Benefits Fund of $2.2 mil- lion to the Retiree Health Benefits Fund has been established. This transfer reflects the full pay- ment of the City's annual ADC for Retiree Healthcare in the Retiree Health Benefits Fund. RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 489 RETIREE HEALTH BENEFIT FUND OVERVIEW 3udget Summary FY 2016 Actuals Dollars by Category Salary & Benefits FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted FY 2019 Budget Change $ 1 FY 2019 Change % Other Benefits 71,237 66,286 60,000 61,560 1,560 2.6% Retiree Medical 14,372,057 16,365,000 16,938,000 15,997,000 (941,000) (5.6)% Total Salary & Benefits 14,443,294 16,431,286 16,998,000 16,058,560 (939,440) (5.5)% Total Dollars by Expense Category 14,443,294 16,431,286 16,998,000 16,058,560 (939,440) (5.5) % Revenues Operating Transfers -In 2,102,000 2,203,000 2,411,030 2,197,000 (214,030) (8.9)% Other Revenue 12,343,188 13,808,255 14,526,970 13,800,000 (726,970) (5.0)% Return on Investments 69,922 73,868 57,700 59,200 1,500 2.6% Total Revenues 14,515,110 16,085,122 16,995,700 16,056,200 (939,500) (5.5)% 490 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET RETIREE HEALTH BENEFIT FUND OVERVIEW Prior Year Budget 3udget Reconciliation Positions Expenditures Revenues Net 16, 998, 000 16, 995, 700 2,300 Base Adjustments Adjustments to Costs of Ongoing Activities Citywide Retiree Health Benefits Adjustment Implied Subsidy Transfer from the General Benefits Fund Administrative Costs Return on Investments Adjustments to Costs of Ongoing Activities - (726,970) (726,970) (214,030) (214,030) 1,560 - (939,440) 1,500 (939,500) 1,560 (1,500) 60 Total FY 2019 Adopted Budget 16,058,560 16,056,200 24360 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 491 CITY OF PALO ALTO Table of Organization -M1 FY 2016 Actuals FY 2017 Actuals TABLE OF ORGANIZATION FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 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 1.00 Chief Procurement Officer 1.00 1.00 Contracts Administrator 1.70 1.70 0.70 0.80 Director Administrative Services/CFO 4.95 4.59 3.00 1.00 0.00 1.00 1.75 5.88 4.05 3.00 1.00 0.00 1.00 4.88 3.05 3.00 1.00 1.00 1.00 1.65 1.00 1.00 2.70 0.80 4.63 3.45 3.00 1.00 1.00 1.00 1.65 1.00 1.00 2.70 0.80 -0.25 0.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (5.12)% 13.11% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Director Office of Management and 1.00 1.00 1.00 1.00 0.00 0.00% Budget Management Analyst 0.00 0.00 0.00 1.00 1.00 0.00% Manager Accounting 1.00 1.00 1.00 0.00 -1.00 (100.00)% Manager Budget 1.00 1.00 1.00 2.00 1.00 100.00% Manager Real Property 1.00 1.00 1.00 1.00 0.00 0.00% Manager Revenue Collections 0.70 0.62 0.62 0.62 0.00 0.00% Manager Treasury, Debt & Investments Manager, Finance Payroll Analyst Principal Management Analyst Senior Accountant Senior Buyer Senior Management Analyst Storekeeper Storekeeper -Lead Warehouse Supervisor 1.00 0.00 2.00 0.00 3.00 0.00 4.20 0.00 1.00 0.50 0.60 0.00 2.00 0.00 3.00 1.00 4.90 1.00 0.20 0.20 0.60 0.00 2.00 0.00 3.00 1.00 4.90 1.00 0.20 0.20 0.60 1.00 2.00 0.00 3.00 1.00 2.30 1.00 0.20 0.20 0.00 1.00 0.00 0.00 0.00 0.00 -2.60 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (53.06)% 0.00% 0.00% 0.00% Total Administrative Services 38.09 38.60 38.60 38.15 -0.45 (1.17)% City Attorney Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator Deputy City Attorney Legal Fellow 1.00 0.00 1.00 1.00 0.00 1.00 1.00 0.00 1.00 1.00 0.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 493 TABLE OF ORGANIZATION Table of Organization Legal Services Administrator Principal Attorney Secretary to City Attorney Senior Assistant City Attorney Senior Deputy City Attorney Senior Legal Secretary Senior Management Analyst FY 2016 Actuals 0.00 1.00 1.00 2.00 1.00 1.00 1.00 FY 2017 Actuals 0.00 1.00 1.00 2.00 1.00 1.00 1.00 FY 2018 Adopted Budget 0.00 0.00 1.00 0.00 0.00 1.00 1.00 FY 2019 Adopted Budget 0.00 0.00 1.00 0.00 0.00 0.00 1.00 FY 2019 Change FTE 0.00 0.00 0.00 0.00 0.00 -1.00 0.00 FY 2019 Change % 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% Total City Attorney 11.00 11.00 11.00 10.00 -1.00 (9.09)% City Auditor Administrative Assistant City Auditor Performance Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor 0.00 1.00 0.00 1.00 1.00 2.00 0.00 1.00 0.00 1.00 1.00 2.00 0.00 1.00 0.00 1.00 1.00 2.00 Total City Auditor 5.00 5.00 5.00 0.00 1.00 0.00 1.00 2.00 1.00 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 1.00 100.00% -1.00 (50.00)% 5.00 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 2.00 1.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 -0.75 0.00% 0.00% 0.00% 0.00% (100.00)% Total City Clerk 5.75 5.75 5.75 5.00 -0.75 (13.04)% City Manager Administrative Assistant Administrative Associate III Assistant City Manager Assistant City Manager/Utilities General Manager Assistant to the City Manager Chief Communications Officer Chief Sustainability Officer City Manager Deputy City Manager Executive Assistant to the City Manager Management Analyst Manager Communications 1.00 1.00 1.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 2.00 2.00 0.00 0.00 0.00 0.00 0.00 0.25 0.25 0.00 0.00 0.00 2.00 2.00 0.00 1.00 1.00 1.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 0.00 0.00 2.00 2.00 0.00 1.00 1.00 1.00 1.00 0.00 0.00 0.00 0.00 0.75 0.75 1.00 1.00 1.00 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% 494 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Manager Economic Development Table of Organization FY 2016 Actuals 1.00 FY 2017 Actuals 1.00 TABLE OF ORGANIZATION FY 2018 Adopted Budget 0.00 Total City Manager ' 10.00 110.00 ' 11.25 FY 2019 Adopted Budget 0.00 FY 2019 Change FTE 0.00 1 12.00 0.75 FY 2019 Change % 0.00% 16.67% Community Services Administrative Assistant Administrative Associate III Assistant Director Community Services Building Serviceperson 1.00 1.00 2.00 1.00 1.00 2.00 1.00 1.00 2.00 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 1.00 1.00 1.00 and Golf Heavy Equipment Operator 0.07 0.07 0.07 2.00 2.00 2.00 Junior Museum & Zoo Educator 2.75 2.75 3.60 1.00 1.00 1.00 Management Assistant 1.00 1.00 1.00 Manager Community Services 5.00 5.00 5.00 Manager Community Services Senior Program Inspector, Field Services Management Analyst Manager Human Services Park Maintenance Person Park Maintenance -Lead Park Ranges 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 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 4.00 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 Total Community Services 77.42 78.42 4.00 1.00 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 2.00 1.00 2.00 0.00 78.77 1.00 1.00 2.00 2.00 2.00 3.00 1.00 1.00 0.07 2.00 3.60 1.00 1.00 5.00 4.00 1.00 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 2.00 1.00 2.00 0.00 77.77 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 0.00 0.00 0.00 0.00% 0.00% 0.00% (25.00)% 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% -1.00 (1.27)% Development Services Administrative Assistant 1.00 1.00 1.00 1.00 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 495 TABLE OF ORGANIZATION Table of Organization Li FY 2016 Actuals FY 2017 Actuals Administrative Associate II 3.02 3.00 Administrative Associate III 1.01 1.00 Assistant Chief Building Official 1.00 1.00 Assistant Director Public Works 0.02 0.00 Associate Engineer 0.16 0.02 Associate Planner 0.90 0.90 Building Inspector Specialist 4.00 4.00 Building/Planning Technician 1.80 2.30 Chief Building Official 1.00 1.00 Chief Planning Official 0.20 0.00 Code Enforcement Officer 0.40 0.40 Code Enforcement -Lead 0.20 0.20 Deputy Chief/Fire Marshal 0.85 0.80 Development Project Coordinator II 2.00 2.00 Development Project Coordinator III 3.00 3.00 Development Services Director 1.00 1.00 Engineer 0.62 0.64 Engineering Technician III 2.10 1.78 Fire Fighter 1.00 0.00 Fire Inspector 4.00 3.20 Hazardous Materials Inspector 1.90 1.60 Industrial Waste Inspector 0.01 0.01 Industrial Waste Investigator 0.21 0.35 Inspector, Field Services 0.70 0.68 Landscape Architect Park Planner 0.00 0.00 Management Analyst 1.01 1.01 Manager Development Center 1.00 1.00 Manager Environmental Control 0.10 0.10 Program Manager Planning 2.00 2.00 2.00 Manager Urban Forestry 0.04 0.04 0.04 Manager Watershed Protection 0.05 0.00 0.00 Planner 0.25 0.17 0.17 Planning Arborist 0.25 0.25 0.29 Plans Check Engineer 0.00 0.00 0.00 Principal Planner 0.00 0.00 0.00 Project Engineer 0.13 0.03 0.03 Project Manager 0.07 0.07 0.00 Senior Engineer 0.68 0.46 0.46 Senior Industrial Waste Investigator 0.01 0.01 0.01 FY 2018 Adopted Budget 3.00 1.00 1.00 0.00 0.02 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 0.00 1.01 1.00 FY 2019 Adopted Budget 2.80 1.00 1.00 0.00 0.02 1.02 4.00 2.30 1.00 0.01 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 0.50 1.01 1.00 0.10 0.10 2.00 0.04 0.00 0.15 0.00 0.00 0.01 0.03 0.00 0.46 0.01 FY 2019 Change FTE -0.20 0.00 0.00 0.00 0.00 0.12 0.00 0.00 0.00 0.01 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 0.50 0.00 0.00 FY 2019 Change % (6.67)% 0.00% 0.00% 0.00% 0.00% 13.33% 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 -0.02 -0.29 0.00 0.01 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% (11.76)% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 496 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Table of Organization Senior Management Analyst Senior Planner Senior Technologist Supervisor Inspection and Surveying Surveyor, Public Works FY 2016 Actuals 1.00 0.36 0.00 0.27 0.00 FY 2017 Actuals 1.00 0.24 0.00 0.27 0.00 TABLE OF ORGANIZATION FY 2018 Adopted Budget 1.00 0.24 0.00 0.27 0.00 FY 2019 Adopted Budget 1.00 0.12 0.00 0.27 0.00 FY 2019 Change FTE 0.00 -0.12 0.00 0.00 0.00 FY 2019 Change % 0.00% (50.00)% 0.00% 0.00% 0.00% Total Development Services 39.32 36.53 36.50 36.51 0.01 0.03% Fire 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 Emergency Medical Service Director Emergency Medical Services Data Specialist Fire Apparatus Operator Fire Captain Fire Chief Fire Fighter Fire Inspector Geographic Information System Specialist Hazardous Materials Inspector Police Chief Senior Management Analyst Senior Technologist 1.00 1.00 1.00 2.00 3.00 0.80 0.00 0.20 2.00 1.00 1.00 30.00 21.00 1.00 40.00 0.00 0.50 0.00 0.00 1.00 0.00 1.00 1.00 1.00 2.00 3.00 0.80 0.05 0.20 2.00 1.00 1.00 30.00 21.00 1.00 41.00 0.80 0.50 0.30 0.00 1.00 0.00 1.00 1.00 1.00 2.00 3.00 0.80 0.05 0.20 2.00 1.00 1.00 30.00 21.00 1.00 41.00 0.80 0.50 0.30 0.00 1.00 0.00 1.00 1.00 1.00 2.20 3.00 0.80 0.05 0.20 2.00 1.00 1.00 26.00 21.00 1.00 34.00 0.80 0.50 0.30 0.00 1.00 0.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -4.00 0.00 0.00 -7.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (13.33)% 0.00% 0.00% (17.07)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Fire 106.50 108.65 108.65 97.85 -10.80 (9.94)% Human Resources Administrative Assistant Assistant Director Human Resources Director Human Resources/CPO Human Resources Assistant Human Resources Representative Human Resources Technician 1.00 1.00 1.00 0.00 2.00 4.00 1.00 1.00 1.00 0.00 2.00 4.00 0.00 1.00 1.00 0.00 3.00 4.00 0.00 1.00 1.00 0.00 3.00 4.00 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 2019 ADOPTED BUDGET 497 TABLE OF ORGANIZATION Table of Organization L f Manager Employee Benefits Manager Employee Relations Senior Human Resources Administrator Senior Management Analyst FY 2016 Actuals 1.00 1.00 4.00 1.00 FY 2017 Actuals 1.00 1.00 4.00 1.00 FY 2018 Adopted Budget 1.00 1.00 3.00 2.00 FY 2019 Adopted Budget 1.00 1.00 3.00 2.00 FY 2019 Change FTE 0.00 0.00 0.00 0.00 FY 2019 Change % 0.00% 0.00% 0.00% 0.00% Total Human Resources 16.00 16.00 16.00 16.00 0.00 0.00% Library Administrative Assistant Administrative Associate Ill Assistant Director Library Services Business Analyst Coordinator Library Programs Director Libraries Division Head Library Services Librarian Library Assistant Library Associate Library Specialist Management Analyst Management Assistant Manager Library Services Senior Librarian Supervising Librarian 1.00 0.00 1.00 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 1.00 0.00 1.00 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 Total Library 48.00 48.50 0.00 1.00 1.00 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 48.50 0.00 1.00 1.00 1.00 1.00 1.00 1.00 7.00 0.00 7.00 11.50 1.00 0.00 4.00 9.00 2.00 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 47.50 -1.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (8.00)% 0.00% 0.00% 0.00% 0.00% 0.00% (2.06)% Office of Emergency Services Director Office of Emergency Services Office of Emergency Services Coordinator Program Assistant Program Assistant II 1.00 1.00 1.00 0.00 1.00 1.00 1.00 0.00 Total Office of Emergency Services 3.00 3.00 1.00 1.00 1.00 0.00 3.00 1.00 1.00 0.00 1.00 0.00 0.00 -1.00 1.00 0.00% 0.00% (100.00)% 0.00% 3.00 0.00 0.00% Planning and Community Environment Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director PCE Associate Engineer 1.00 1.00 1.00 2.00 1.00 1.00 1.00 1.00 0.00 3.00 1.00 1.00 1.00 1.00 0.00 3.00 1.00 0.73 1.00 1.00 0.00 2.59 1.00 0.65 0.00 0.00 0.00 -0.41 0.00 -0.08 0.00% 0.00% 0.00% (13.67)% 0.00% (10.96)% 498 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Table of Organization Associate Planner Building/Planning Technician Business Analyst Chief Planning Official Chief Transportation Official Code Enforcement Officer Code Enforcement -Lead Coordinator Transportation Systems Management Director Planning/Community Environment Management Analyst 0.40 Manager Planning 2.00 Parking Operations -Lead 0.30 Planner 3.00 0.00 Principal Planner 0.00 0.00 Project Engineer 1.65 Senior Management Analyst 1.00 Senior Planner 7.64 FY 2016 Actuals 0.10 0.20 1.00 0.80 0.50 1.60 0.80 0.85 1.00 Planning Division Manager Program Assistant II Senior Project Engineer Traffic Engineering -Lead Transportation Planning Manager 0.00 1.00 0.20 FY 2017 Actuals 0.10 0.70 1.00 1.00 0.70 1.60 0.80 TABLE OF ORGANIZATION FY 2018 Adopted Budget 0.10 0.70 1.00 1.00 0.43 1.60 0.80 FY 2019 Adopted Budget 2.25 0.70 1.00 0.99 0.64 1.60 0.80 FY 2019 Change FTE 2.15 0.00 0.00 -0.01 0.21 0.00 0.00 0.60 0.88 0.74 -0.14 1.00 0.88 2.00 0.20 3.83 0.00 0.00 0.35 1.15 1.00 6.70 0.00 0.10 0.85 1.00 0.98 2.00 0.00 3.83 0.00 0.00 0.60 0.50 1.00 6.51 0.00 0.38 0.20 1.00 0.80 1.00 0.10 3.85 1.00 0.99 0.00 0.80 0.88 3.76 0.00 0.65 0.41 0.00 -0.18 -1.00 0.10 0.02 1.00 0.99 -0.60 0.30 -0.12 -2.75 0.00 0.27 0.21 FY 2019 Change % 2,150.00% 0.00% 0.00% (1.00)% 48.84% 0.00% 0.00% (15.91)% 0.00% (18.37)% (50.00)% 0.00% 0.52% 0.00% 0.00% (100.00)% 60.00% (12.00)% (42.24)% 0.00% 71.05% 105.00% Total Planning and Community Environment 31.04 31.56 30.24 30.20 -0.04 (0.13)% Police Administrative Assistant Administrative Associate II Animal Control Officer Animal Control Officer -Lead Animal Services Specialist II 1.00 3.00 3.00 1.00 2.00 Assistant Police Chief 1.00 Business Analyst 1.20 Code Enforcement Officer 1.00 0.00 Communications Technician 1.00 Community Service Officer 8.50 Court Liaison Officer 1.00 Crime Analyst 1.00 Communications Manager 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 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 0.00 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 2019 ADOPTED BUDGET 499 TABLE OF ORGANIZATION Table of Organization 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 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 2016 Actuals 0.80 0.50 FY 2017 Actuals 0.80 0.50 19.00 19.00 2.00 2.00 1.00 1.00 5.00 5.00 50.00 50.00 6.00 6.00 1.00 1.00 14.00 14.00 1.00 1.00 2.00 2.00 1.00 1.00 0.00 16.00 4.00 0.00 2.00 0.00 14.00 0.00 0.00 4.00 0.00 0.00 0.00 0.00 2.00 2.00 1.00 1.00 0.00 0.00 1.00 1.00 1.00 1.00 2.00 2.00 FY 2018 Adopted Budget 0.80 FY 2019 Adopted Budget 0.80 0.50 0.50 19.00 2.00 1.00 5.00 50.00 6.00 1.00 14.00 1.00 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 19.00 2.00 1.00 5.00 50.00 6.00 1.00 14.00 1.00 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 2019 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 0.00 0.00 0.00 FY 2019 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% Total Police 155.00 155.00 155.00 155.00 0.00 0.00% Public Works Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Director Public Works Associate Engineer Building Serviceperson Building Serviceperson-Lead Cement Finisher 1.00 0.60 2.63 0.00 0.85 0.30 1.00 1.80 3.00 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.80 3.00 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.00 3.00 1.00 0.60 2.65 0.01 0.87 0.30 0.00 1.00 2.00 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 (100.00)% 0.00 0.00% - 1.00 (33.33)% 500 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TABLE OF ORGANIZATION Table of Organization 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 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 2016 Actuals 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 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 Actuals 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 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 0.26 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 0.11 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 2019 Adopted Budget 0.26 1.50 1.00 0.80 0.66 1.47 2.46 1.00 1.85 0.00 1.75 4.05 2.33 0.85 0.11 0.60 0.70 0.90 1.20 0.96 0.05 0.00 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 2019 Change FTE 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 0.50 0.00 0.00 0.00 0.00 0.00 - 0.71 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 2019 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (28.90)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 500.00% 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% Total Public Works 54.59 55.93 54.66 51.45 - 3.21 (5.87)% Total General Fund 600.71 603.94 602.92 585.43 -17.49 (2.90) % TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 501 TABLE OF ORGANIZATION Enterprise Fund Table of Organization FY 2019 Change FTE FY 2019 Change % 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 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 0.45 0.30 0.30 0.30 0.00 0.00% 0.40 0.40 0.40 0.40 0.00 0.00% 0.10 0.10 0.10 0.10 0.00 0.00% 2.15 2.15 2.15 2.15 0.00 0.00% 0.10 0.10 0.10 0.10 0.00 0.00% 1.30 1.30 1.30 1.30 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 1.35 1.99 2.99 2.99 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% 3.00 3.00 3.00 3.00 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% 0.07 0.07 0.07 0.07 0.00 0.00% 3.00 3.00 3.00 3.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 1.00 0.90 0.90 0.90 0.00 0.00% 0.20 0.25 0.25 0.25 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 0.54 0.54 0.54 0.54 0.00 0.00% 0.00 1.00 1.00 1.00 0.00 0.00% 0.00 0.00 1.50 1.50 0.00 0.00% 0.04 0.04 0.04 0.04 0.00 0.00% 0.90 0.90 0.90 0.90 0.00 0.00% 1.15 1.15 1.15 1.15 0.00 0.00% 2.99 2.99 2.99 2.99 0.00 0.00% 1.79 1.15 1.15 1.15 0.00 0.00% 3.00 3.00 3.00 3.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 7.00 0.00 0.00 0.00 0.00 0.00% 1.30 2.30 2.30 2.30 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 4.90 4.90 4.90 4.90 0.00 0.00% Manager Laboratory Services 1.00 1.00 1.00 1.00 0.00 0.00% Manager Maintenance Operations 1.96 1.96 1.96 1.96 0.00 0.00% Manager Solid Waste 1.00 1.00 1.00 1.00 0.00 0.00% Manager Water Quality Control Plant 1.00 1.00 1.00 1.00 0.00 0.00% 502 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Table of Organization MLIMi FY 2016 Actuals Manager Watershed Protection 0.95 Plant Mechanic 0.00 Program Assistant I 1.00 Program Assistant II 2.00 Project Engineer 1.83 Project Manager 0.35 Senior Accountant 0.30 0.00 Senior Chemist 1.00 Senior Engineer 1.76 Senior Industrial Waste Investigator 0.99 Senior Management Analyst 0.21 Senior Mechanic 1.00 Senior Operator WQC 6.00 Senior Technologist 1.00 Storekeeper 1.00 Street Maintenance Assistant 0.00 Street Sweeper Operator 1.63 Supervisor WQCP Operations 3.00 Surveyor, Public Works 0.35 Technologist 1.00 Senior Buyer Traffic Controller Maintainer I WQC Plant Operator II Zero Waste Coordinator 0.06 16.00 2.00 FY 2017 Actuals 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 0.12 1.00 0.06 16.00 1.00 TABLE OF ORGANIZATION FY 2018 Adopted Budget 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 0.12 1.00 0.06 16.00 1.00 FY 2019 Adopted Budget 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 0.12 1.00 0.06 16.00 1.00 FY 2019 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 0.00 FY 2019 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% Total Public Works 95.12 98.69 101.19 101.19 0.00 0.00% 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 2.55 0.60 1.00 6.00 1.70 0.60 1.00 6.00 1.70 0.60 1.00 7.00 1.70 0.60 1.00 7.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00 0.00 0.75 0.75 0.00 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 Assistant Director Utilities Operations 1.00 Assistant Director Utilities/Resource Management 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00 1.00 0.00 1.00 1.00 0.00% 0.00% 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 503 TABLE OF ORGANIZATION Table of Organization Associate Engineer Business Analyst Cathodic Protection Technician Assistant FY 2016 Actuals 0.50 7.00 1.00 Cathodic Technician 1.00 Cement Finisher 1.00 Chief Sustainability Officer 0.00 Contracts Administrator 0.70 Coordinator Utilities Projects 7.00 Customer Service Representative 6.00 Customer Service Specialist 2.00 Customer Service Specialist -Lead 2.00 Deputy Chief/Fire Marshal 0.08 Deputy City Attorney 0.00 Director Administrative Services/CFO 0.20 Director Utilities 1.00 Electric Project Engineer 2.00 Electric Underground Inspector 2.00 Electric Underground Inspector -Lead 1.00 Electrical Equipment Technician 0.00 Electrician Assistant I 4.00 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 Gas System Technician II Hazardous Materials Inspector Heavy Equipment Operator Heavy Equipment Operator - Install/ Repair Industrial Waste Investigator Inspector, Field Services Lineperson/Cable Specialist Lineperson/Cable Specialist -Lead Maintenance Mechanic -Welding FY 2017 Actuals 0.00 7.00 1.00 1.00 1.00 0.00 0.70 6.00 6.00 2.00 2.00 0.08 0.00 0.20 1.00 2.00 2.00 1.00 1.00 3.00 4.00 1.00 1.00 5.00 1.00 0.00 0.00 0.00 0.00 FY 2018 Adopted Budget 0.00 7.00 1.00 1.00 2.00 0.00 0.70 6.00 7.00 2.00 2.00 0.08 1.00 0.20 0.00 2.00 2.00 1.00 1.00 3.00 4.00 1.00 1.00 3.00 0.00 FY 2019 Adopted Budget 0.00 6.00 1.00 1.00 2.00 0.00 0.70 6.00 7.00 2.00 2.00 0.08 1.00 0.20 0.00 2.00 2.00 1.00 1.00 3.00 4.00 1.00 1.00 3.00 0.00 4.00 4.00 1.00 1.00 FY 2019 Change FTE 0.00 FY 2019 Change % 0.00% -1.00 (14.29)% 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% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00% 2.00 0.00 0.00 0.00 0.00 0.00% 1.00 3.00 0.00 0.00 0.00 0.00% 0.06 0.06 0.06 0.06 0.00 0.00% 8.70 6.70 6.70 6.70 0.00 0.00% 0.00 4.00 4.00 4.00 0.00 0.00% 0.00 0.50 0.50 0.50 0.00 0.00% 4.00 5.00 5.00 5.00 0.00 0.00% 11.00 11.00 11.00 11.00 0.00 0.00% 4.00 4.00 4.00 4.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 504 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Table of Organization FY 2016 Actuals FY 2017 Actuals Manager Communications 1.00 1.00 Manager Customer Service 1.00 1.00 1.00 Manager Customer Service and Meter 0.00 0.00 0.00 Reading Manager Electric Operations 1.00 1.00 1.00 Manager Treasury, Debt & 0.00 0.40 0.40 Investments Manager Utilities Compliance 1.00 1.00 1.00 Manager Utilities Credit & Collection 1.00 1.00 1.00 Manager Utilities Marketing Services 1.00 0.00 0.00 Manager Utilities Operations WGW 1.00 1.00 1.00 Manager Utilities Program Services 0.00 1.00 1.00 Manager Utilities Strategic Business 0.00 1.00 1.00 Manager Utilities Telecommunications 1.00 1.00 1.00 Marketing Engineer 1.00 0.00 0.00 Meter Reader 6.00 6.00 6.00 Meter Reader -Lead 1.00 1.00 1.00 Metering Technician 3.00 3.00 3.00 Metering Technician -Lead 1.00 1.00 1.00 Offset Equipment Operator 0.48 0.48 0.48 Overhead Underground Troubleman 2.00 2.00 2.00 Planner 0.00 0.00 0.00 Power Engineer 3.00 3.00 3.00 Principal Business Analyst 1.00 1.00 1.00 Principal Management Analyst 0.00 0.00 0.00 Program Assistant I 2.50 2.50 1.50 Project Engineer 5.00 5.00 5.00 Project Manager 0.75 0.75 0.75 Resource Planner 5.00 6.00 6.00 Restoration Lead 1.00 1.00 1.00 SCADA Technologist 2.00 2.00 2.00 Senior Accountant 0.70 0.70 0.70 Senior Business Analyst 2.00 2.00 2.00 Senior Deputy City Attorney 1.00 1.00 0.00 Senior Electrical Engineer 4.00 4.00 4.00 Senior Engineer 5.00 5.00 5.00 Senior Management Analyst 2.40 0.70 0.70 Senior Mechanic 1.00 1.00 1.00 Senior Performance Auditor 1.00 1.00 1.00 Senior Project Engineer 0.00 0.00 0.00 Senior Resource Planner 6.00 6.00 6.00 TABLE OF ORGANIZATION FY 2018 Adopted Budget 1.00 FY 2019 Adopted Budget 1.00 1.00 FY 2019 Change FTE 0.00 0.00 FY 2019 Change % 0.00% 0.00% 0.00 0.00 0.00% 1.00 0.00 0.00% 0.40 0.00 0.00% 1.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 6.00 1.00 3.00 1.00 0.48 2.00 0.00 3.00 1.00 0.00 1.50 5.00 0.75 6.00 1.00 2.00 0.70 3.00 0.00 4.00 5.00 0.70 1.00 1.00 0.00 6.00 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 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% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 50.00% 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 2019 ADOPTED BUDGET 505 TABLE OF ORGANIZATION Table of Organization Senior Technologist Senior Utilities Field Service Representative FY 2016 Actuals 0.00 1.00 Senior Water Systems Operator 2.00 Storekeeper 2.00 Storekeeper -Lead 0.00 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 Utilities Install Repair -Welding Certified Utilities Install/Repair 12.00 Utilities Install/Repair Assistant 1.00 Utilities Install/Repair-Lead 5.00 Utilities Key Account Representative 3.00 Utilities Locator 3.00 FY 2017 Actuals 0.00 1.00 2.00 1.00 0.80 FY 2018 Adopted Budget 0.00 1.00 2.00 1.00 0.80 FY 2019 Adopted Budget 0.00 1.00 2.00 1.00 0.80 FY 2019 Change FTE 0.00 FY 2019 Change % 0.00% 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00% 0.00% 5.00 5.00 5.00 5.00 0.00 0.00% 0.00 0.00 0.00 0.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 6.00 6.00 6.00 6.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.00 0.00 0.00 0.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 0.00 0.00 0.00 0.00 0.00 0.00% 0.00 0.00 1.00 1.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 5.00 5.00 5.00 5.00 0.00 0.00% 5.00 5.00 5.00 5.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% 3.00 3.00 3.00 3.00 0.00 0.00% 10.00 1.00 5.00 3.00 3.00 10.00 1.00 5.00 3.00 3.00 10.00 1.00 5.00 3.00 3.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% Utilities Marketing Program 3.00 3.00 3.00 3.00 0.00 0.00% Administrator Utilities Safety Officer 1.00 1.00 1.00 1.00 0.00 0.00% Utilities Supervisor 11.00 12.00 12.00 12.00 0.00 0.00% Utilities System Operator 5.00 5.00 5.00 5.00 0.00 0.00% Utility Engineering Estimator - Lead 0.00 0.00 1.00 1.00 0.00 0.00% Warehouse Supervisor 0.50 0.80 0.80 0.80 0.00 0.00% Water Meter Cross Connection Technician Water System Operator I 0.00 1.00 0.00 0.00 0.00 0.00% 2.00 0.00 0.00 0.00 0.00 0.00% 506 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET Water System Operator II Table of Organization FY 2016 Actuals 4.00 FY 2017 Actuals 4.00 TABLE OF ORGANIZATION FY 2018 Adopted Budget 4.00 Total Utilities I 255.97 254.92 256.67 FY 2019 Adopted Budget 4.00 FY 2019 Change FTE 0.00 FY 2019 Change % 0.00% 256.67 = 0.00 0.00% Total Enterprise Fund 351.09 353.61 357.86 357.86 0.00 0.00% Other Funds Capital Project Fund Administrative Associate I Administrative Associate III Assistant Director Public Works Associate Engineer Associate Planner 0.80 0.89 0.58 2.69 0.00 Cement Finisher 0.00 Cement Finisher -Lead 0.74 Chief Transportation Official 0.50 Contracts Administrator 0.60 Coordinator Public Works Projects 1.00 Coordinator Transportation Systems Management 0.15 0.80 0.89 0.58 2.69 0.00 0.00 0.74 0.30 0.60 1.50 0.80 0.89 0.58 2.96 0.00 0.00 0.74 0.52 0.60 1.30 0.80 1.09 0.58 3.04 0.31 0.00 0.74 0.36 0.60 1.30 0.00 0.20 0.00 0.08 0.31 0.00 0.00 -0.16 0.00 0.00 0.90 0.62 0.76 0.14 0.00% 22.47% 0.00% 2.70% 0.00% 0.00% 0.00% (30.77)% 0.00% 0.00% 22.58% Engineer 2.98 2.80 2.80 2.80 0.00 0.00% Engineering Technician III 0.50 0.50 0.50 0.50 0.00 0.00% Facilities Technician 0.00 0.00 1.50 1.50 0.00 0.00% Heavy Equipment Operator 0.00 0.00 0.00 0.00 0.00 0.00% Inspector, Field Services 1.20 1.21 1.21 1.21 0.00 0.00% 0.90 0.90 0.90 0.90 0.00 0.00% Management Analyst 1.39 0.89 0.79 0.82 0.03 3.80% Manager Facilities 0.10 0.10 0.10 0.10 0.00 0.00% Manager Maintenance Operations 1.65 0.65 0.65 0.65 0.00 0.00% Parking Operations -Lead 0.00 0.30 1.00 0.35 -0.65 (65.00)% Program Assistant I 0.00 0.00 0.00 0.00 0.00 0.00% Program Assistant II 0.00 0.20 0.40 0.00 -0.40 (100.00)% Project Engineer 4.99 6.49 7.14 6.84 -0.30 (4.20)% 1.80 1.15 1.15 1.15 0.00 0.00% Senior Engineer 1.99 1.99 1.99 1.99 0.00 0.00% Senior Management Analyst 0.60 0.60 0.60 0.72 0.12 20.00% Senior Planner 0.00 0.70 0.85 0.72 -0.13 (15.29)% 0.00 0.00 0.00 0.00 0.00 0.00% Senior Project Manager 0.90 0.90 0.90 0.90 0.00 0.00% 0.63 0.63 0.63 0.63 0.00 0.00% Surveyor, Public Works 0.55 0.55 0.55 0.55 0.00 0.00% Landscape Architect Park Planner Project Manager Senior Project Engineer Supervisor Inspection and Surveying TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 507 TABLE OF ORGANIZATION Table of Organization Traffic Engineering -Lead Transportation Planning Manager FY 2016 Actuals 0.00 0.70 FY 2017 Actuals 0.90 0.15 FY 2018 Adopted Budget 0.62 0.50 FY 2019 Adopted Budget 0.35 0.35 FY 2019 Change FTE FY 2019 Change % -0.27 (43.55)% -0.15 (30.00)% Total Capital Project Fund 28.83 30.61 33.79 32.61 -1.18 (3.49)% Printing and Mailing Services Manager Revenue Collections Offset Equipment Operator Senior Management Analyst 0.10 1.52 0.00 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 Administrative Associate Ill Associate Planner Building Serviceperson-Lead Chief Transportation Official Community Service Officer 1.55 1.62 1.62 1.87 0.41 0.95 0.95 0.55 0.20 0.20 0.20 0.20 0.00 0.00 0.00 0.21 0.00 0.00 0.00 0.42 0.20 0.20 0.00 0.00 0.00 0.00 0.05 0.00 0.50 0.50 0.50 0.50 Coordinator Public Works Projects 0.00 0.00 0.20 0.20 Electrician 0.20 0.20 0.20 0.20 Facilities Maintenance -Lead 0.15 0.15 0.15 0.15 0.45 0.00 0.00 0.00 Facilities Painter 0.25 0.25 0.25 0.25 0.00 0.45 0.45 0.45 Management Analyst 0.00 0.02 0.02 0.17 Manager Community Services Senior 1.00 1.00 1.00 1.00 Program Manager Maintenance Operations 0.19 0.19 0.19 0.19 Manager Revenue Collections 0.20 0.28 0.28 0.28 Parking Operations -Lead 0.70 0.50 0.00 0.55 0.75 0.00 0.00 0.00 Program Assistant II 0.00 0.45 0.00 0.00 Senior Management Analyst 0.00 0.00 0.00 0.00 Senior Planner 0.00 0.36 0.40 0.40 0.00 0.00 0.00 0.00 Street Maintenance Assistant 2.00 2.00 2.00 2.00 Street Sweeper Operator 0.37 0.37 0.37 0.37 Transportation Planning Manager 0.10 0.00 0.30 0.24 Facilities Mechanic Facilities Technician Planner Senior Project Engineer 0.25 -0.40 0.00 0.21 0.42 0.00 -0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.15 0.00 0.00 0.00 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.06 15.43% (42.11)% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 750.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (20.00)% Total Special Revenue Funds 9.22 9.69 9.13 10.20 1.07 11.72% 508 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET TABLE OF ORGANIZATION Table of Organization FY 2016 Actuals FY 2018 FY 2019 FY 2017 Adopted Adopted Actuals Budget Budget FY 2019 Change FTE FY 2019 Change % Technology Fund Administrative Assistant Assistant Director Administrative Services Business Analyst 1.00 0.00 1.00 Desktop Technician 5.00 Director Administrative Services/CFO 0.10 1.00 Management Analyst 0.00 Manager Information Technology 4.00 Manager Information Technology Security Principal Business Analyst Principal Management Analyst Director Information Technology/CIO Senior Business Analyst Senior Management Analyst Senior Technologist Technologist 1.00 1.00 0.00 2.00 1.00 15.00 2.00 1.00 0.10 1.00 6.00 0.00 1.00 0.00 4.00 1.00 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 1.00 1.00 0.00 2.00 1.00 17.00 1.00 1.00 0.10 1.00 6.00 0.00 1.00 0.00 3.00 1.00 1.00 0.00 2.00 1.00 18.00 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% -1.00 (25.00)% 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 5.88% 0.00% Total Technology Fund 34.10 35.10 36.10 36.10 0.00 0.00% Vehicle Replacement and Maintenance Fund Administrative Associate III Assistant Director Public Works Assistant Fleet Manager Equipment Maintenance Service Person 1.00 0.25 1.00 2.00 Fleet Services Coordinator 2.00 Management Analyst 0.20 Manager Fleet 1.00 Motor Equipment Mechanic II 6.00 Motor Equipment Mechanic -Lead 2.00 1.00 0.08 Project Manager Senior Management Analyst 1.00 0.25 1.00 1.00 0.25 1.00 2.00 2.00 2.00 0.20 1.00 6.00 2.00 1.00 0.08 2.00 0.20 1.00 6.00 2.00 1.00 0.08 Total Vehicle Replacement and Maintenance Fund 16.53 16.53 16.53 1.00 0.25 1.00 0.00 0.00 0.00 2.00 0.00 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% 16.53 0.00 0.00% Workers' Compensation Program Fund Senior Human Resources Administrator 0.00 1.00 1.00 1.00 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 509 TABLE OF ORGANIZATION Table of Organization FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted Budget FY 2019 Adopted Budget FY 2019 Change FTE FY 2019 Change % Workers' Compensation Program Fund Total Workers' Compensation Program Fund 0.00 Total Other Funds 90.30 I 94.55 98.17 98.06 -0.11 (0.11)% Total Citywide Positions 1,042.10 1,052.10 1,058.95 1,041.35 -17.60 (1.66)% 510 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET ■ • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 511 CITY OF PALO ALTO BUDGET ADOPTION ORDINANCE 3udget Adoption Ordinance As discussed in the `Budget Process' section of this document, the review of the operating and capital budgets is structured around public hearings conducted by the Finance Committee prior to City Council adoption of the budget. These hearings are conducted in part to incorporate community input into the deci- sion making process. The ordinance to adopt the Fiscal Year 2019 Operating Budget is included below. This ordinance was approved and adopted by the City Council on June 18, 2018. BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 513 BUDGET ADOPTION ORDINANCE DocuSign Envelope ID: 59CED5Q9-BECO-4F70-AA1B-4F8B89B27CBD Ordinance 5442 Ordinance of the Council of the City of Palo Alto Adopting the Budget for Fiscal Year 2019 SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 6(g). of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2019; and B. Pursuant to the provisions of Section 12 of Article I II of the Charter, the Council did, on June 18, 2018, 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 18, 2018, 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 2019: (a) (b) The budget document (Exhibit "1") containing the proposed operating and capital budgets submitted on April 30, 2018, by the City Manager for Fiscal Year 2019, entitled "City of Palo Alto - City Manager's Fiscal Year 2019 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 The Amendments to the City Manager's Fiscal Year 2019 Proposed Budget, attached hereto as Exhibit "2" and Exhibit "3", and made a part hereof; and (c) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit "4"; and 514 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET BUDGET ADOPTION ORDINANCE DocuSign Envelope ID: 59CED509-BECo-4F70-AA1B-4F8B89B27CB0 (d) Changes and revised pages in the Table of Organization, as displayed on pages 477 through 494 in "Exhibit 1," and amended in Exhibit "5" made a part hereof; and 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 2018 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 2018 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2019. 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 Exhibit "3" and the Fiscal Year 2018 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 2.28140(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 2019. SECTION 9_ The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "4". 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. BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 515 BUDGET ADOPTION ORDINANCE Docusrgn Envelope ID: 59CED509-BECO-4F70-AAIE3-4FSB89B27CBD 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. SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: June 18, 2018 AYES: DUBOIS, FILSETH, FINE, HOLMAN, KNISS, SCHARFF, WOLBACH NOES: KOU ABSENT: TANAKA ABSTENTIONS: NOT PARTICIPATING: ATTEST: City Clerk APPROVED AS TO FORM: 1, 'W073."-36'1. g City Attorney ---D ,signed by Ittki Sip APPROVED: by [_DOCU 1.d : GR Seok P Q4. Vs..e0 *raw City Manager r�- OacvSigned 6y: Director of Administrative Services 516 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION Fiscal Year 2019 Appropriations Limit Resolution and Calculation The City of Palo Alto complies with Article XIIIB of the Constitution of the State of California, which mandates that the City may not appropriate any proceeds of taxes in excess of its appropriations limit. The limit is calculated annually to adjust for inflation and population changes. The resolution determining the Cal- culation of the Appropriations Limit for Fiscal Year 2019 is included below. This resolution was adopted by the City Council on June 25, 2018. APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 517 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: AD7DCBE5-1938-43DA-9016-DC49EBBO5C8E Resolution 9779 Resolution of the Council of the City of Palo Alto Determining The Calculation of the Appropriations Limit For Fiscal Year 2019 Under Article XIIIB 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). Since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with inflation and population adjustment factors. 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 2019, which was adopted by ordinance of the Council on June 18, 2018. 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 3.67% percent change in California per capita income and a 0.99% percent change in the population growth for the County of Santa Clara. 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. According to the final calculation, the City's net appropriations subject to limitation are approximately $114.94 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 2019, 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 $50.87 million. SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of the City for Fiscal Year 2019, a copy of which is attached hereto as Exhibit 1. 518 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID AD7OCBE5-1938-430A-9416-DC49E89O5C8E SECTION 3. 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 25, 2018 AYES: DUBOIS, FILSETH, FINE, HOLMAN, KNISS, KOU, TANAKA, WOLBACH NOES: ABSENT: SCHARFF ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: L }1r 03Q71r4A9 City Attorney -OracuSrgned %y. 114,6(11 Shall APPROVED: —OncuSigned by E/ Sw4ada �1e...r/ kedge City Manager oacuS47md by: 1 Administrative Services Director APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 519 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION 0u uSign Envelope 10 AD70CBE5-1938430A-'9016-0C49EB805C8E Attachment A, Exhibit 1 APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION FOR FISCAL YEAR 2019 ADOPTED BUDGET II. IN MILLIONS) Total Budgeted Appropriations General Fund Capital Fro eels' funds Spacial Revenue fonds Debt Service Fund Combined Funds 'Y 2819 Adopted Budget LAW Inlerfund Transfers Allocated Charges Non -Proceeds $ 111170 $ 135 $ 5 [30.901 $ - $ {26.38 $ $ [ 19.135) $ - $ - $ $ [49.05) 5 11' -x) $ /9.241 $ Net Appropriations Subject lo LIrmII 5 110.41 5 5 0.66) $ CITY OF PALO ALTO 1.51 5 5 6$7.271 - $ [14.851 5 (193.521 6.59 5 114.94 FY 2019 Per Capita Income Change (CA Deportment of Fnance) Foeb rA 3.67% x.0367 FT 2019 Population Change (Santo Clara County! 0.99% Factor B 1.0099 FY 2616 Adopted Appropriations limit 5 134,57 Fodor A x Factor B I .0470 FY 2614 Adopted Appropriations Limit $ 165,81 Nel Appropriations Subject to Limit Amaunl Under the Unlit $ 114.94 $ 50.47 The City of Palo Alto remains well within its appropriations limit in Flt 2019. Future year knit trends Can be mode based on the average change in regional populotan and income growth. The appropriations subject to Iinvtolion ,ncludes proceeds Of axes from the General Fund. Copilal L rojeols Fund, tend Special Revenue Funds - Fiscal YePt Per Copola Income Factor Population Change Factor Total Adjustment Factor Appropr alfons llmIt Apprapdatlons Subject to Limit Arnounl Under the Limit 2018 1.0369 1.0082 1.0454 5 158.37 5 131.49 5 26.88 2017 1.0537 1.0130 I 067 $ 151.46 3 109.51 5 41.97 2016 1,0382 1.0113 1,0499 $ 141.92 $ 100-64 $ 41.31 2015 0.9977 1.0150 1.0127 5 13,5.17 $ 8293 5 52.24 2014 1.0512 1.0157 1.0677 $ 13146 5 40.2)3 5 43.20 2013 1.0377 1.012'4 1.0506 $ 125.01 $ 96.73 5 28.28 2012 1.0251 1.0089 1.034142 $ 119.00 $ 89.00 5 30.x00 2011 0.97/6 1.0144 0-9886 $ 115.06 5 78.91 $ 36.12 2010 1.0062 1-0220 1.0283 5 116.38 5 72.00 3 44.38 2039 1.0429 1,017°2 1,06013 5 1 13,17 5 78.64 5 34.53 On November 6, 1979, Colrlornia voters approved Proposition 4, an initiative thpl prided Article X1118 to the slate Constitulion. The provisions of this arlicie place limits an the amount of revenue that con be =proceeded by all entities of government. The Apprapfiplions Limit is based on actual approprio1iuns during the 1978-1974 fiscal year, os increased eoch year using specified population and inllaiionory growth factors. 520 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FINANCIAL POLICIES Ending BSR Balance (in millions) 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 Stabilization 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 2019 Budget assumes a BSR ending bal- ance of $45.1 million or 21.4 percent; this is $6.2 million above the City Council approved 18.5 percent target. FY 2015 Actuals FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2019 Adopted % of Total Expenses $30.4 $33.1 $48.21 $49.5 $48.1 $39.1 $45.1 18.5% 19.3% 26.0% 24.1% 22.9% 18.6% 21.4% i 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. FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 521 FINANCIAL POLICIES 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 2018, and it is recom- mended that this reserve be carried forward to Fiscal Year 2018. Credit 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. The City is currently moving forward with updates to ratings as part of the upcoming issuance of debt for the golf course remodel. 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 (R) 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 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 De at 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 522 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET FINANCIAL POLICIES 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- 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. In 2018, City staff is evaluating possible recommendations to the City Council for changes to the Investment Policy and other financial practices to encourage investments that support sound environmental, social, and governance (ESG) investing. This includes, encouraging investments in entities that support community well-being through safe and environmentally sound practices and fair labor practices and equality of rights. Also, administratively, staff doesn't invest in entities that manufacture tobacco products, firearms, or nuclear weapons and FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 523 FINANCIAL POLICIES production and/or drilling of fossil fuels. Staff will be looking at making a recommendation to formalize this practice in the Investment Policy. 524 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2019 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. 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. GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET 525 GLOSSARY 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. 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. 526 GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2019 ADOPTED BUDGET GLOSSARY 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 2019 ADOPTED BUDGET 527 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 2019 ADOPTED BUDGET 529 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, Palo Alto, CA 94301 P 650.329.2100 W cityofpaloalto.org