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HomeMy WebLinkAboutFiscal Year 2020 Adopted Operating BudgetFISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY OF PALO ALTO TRANSMITTAL LETTER August 19, 2019 To the Honorable Mayor and City Council 2020 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 2020 Adopted Operating Budget. This budget totals $723.8 million and reflects the City Council's direction to proactively fund the City's long-term pension obligations and adjust services as needed to fulfill this obligation. As such, this year's budget balances meeting immediate needs with repositioning services for long-term value. Council's approach to fiscal sustainability sets the foundation for operating within our means for the future, but as such requires a closer look at the services we deliver and the value they provide. Subsequent to the release of this budget, we anticipate releasing our first "Services Inventory" that will enable a comprehensive discus- sion of city services and the value provided to the community through our investments city- wide. Long -Term Financial Planning During the development of the FY 2019 Operating Budget, the City Council expressed its inter- est and desire to structurally address the City's long-term pension liabilities through proactive contributions beyond those required by CaIPERS. As part of the FY 2019 Operating Budget, $4.0 million was transferred to the City's Pension Trust Fund for the General Fund. As part of the FY 2020 budget, an additional $3.8 million will be added to the Pension Trust Fund from the General Fund with an additional $2.4 million contributed from other funds. A "catch-up" pay- ment of $2.3 million from other funds is also included in the FY 2020 budget to align with the General Fund's $4.0 million contribution in FY 2019. This brings to $22.0 million total contribu- tions to the City's Pension Trust Fund since its creation in January 2017, representing significant progress toward pre -funding the City's long-term pension obligations. Reality of Toc ay To accommodate the contribution toward the City's long-term pension obligations, adjustments to service delivery levels will be necessary. Reductions have been made across the organization over the past several years with the goal of containing costs while minimizing impacts on ser- vices. This budget makes progress towards ongoing cost containment, with specific resulting service impacts. The FY 2020 budget also includes a number of one-time actions that are designed to contain costs while departments continue to evaluate service delivery options and redeployment of resources. These actions are discussed in greater detail below. Additionally, the budget reflects approved service delivery changes, such as the animal shelter transition to a public/private partnership with Pets in Need. These result in a net reduction of 6.5 full time positions to a total workforce of 1,035. This is sig- nificantly less than the peak level of 1,076 in 2009. In the General Fund, positions have decreased 11.9%, from 651 to 574, since 2009. This represents the City's continued dedication to addressing community priorities and providing high quality services in an efficient and cost effective manner. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER City Council Priorities - Positioning for the Future Both the operating and capital budgets reflect continued support of the City Council priorities for the year that were adopted in February 2019. These include: • Climate/Sustainability and Climate Action Plan • Grade Separations • Transportation and Traffic • Fiscal Sustainability While each of these priorities require long-term strategies, progress will be made on all through this FY 2020 Budget. The City has several key decisions to make in the near term including choos- ing a "preferred alternative" for grade separation to address increased traffic congestion at rail crossings with Caltrain electrification and more frequent trains. Staff has presented the "Fiscal Sus- tainability" workplan to the Finance Committee, articulating the ecosystem of available resources, desired outcomes, and long-term solvency of the City. Against this backdrop, we have better posi- tioned the City to address pension costs, new labor agreements, and the rising cost of completing infrastructure projects. Some highlights of the FY 2020 Budget include: • Progress towards Fiscal Sustainability: This budget makes progress towards fiscal sustainabil- ity through various cost containment actions, including elimination of positions throughout the organization, including in the Auditor's Office, Library Department, and Public Works, changes in Fire's deployment model, and reductions in non -salary funding in the Office of Emergency Services, Community Services, Information Technology, and the Library Depart- ment. • Workforce Stabilization: The region continues to experience robust economic growth with ris- ing housing costs and longer employee commutes, and Palo Alto is at the epicenter of this challenge. In addition to reflecting recently completed labor agreements, this budget includes $750,000 in the General Fund to be used towards workforce recruitment and retention initia- tives. • Establishing an Office of Transportation: This budget establishes an Office of Transportation in the City Manager's Office to address the growing complexity and demands associated with parking, traffic, and pending decisions regarding grade separation. Transportation was previ- ously a division in the Planning and Community Environment Department, which is now the Planning and Development Services Department. This budget allocates additional resources and consolidates the management and operations of various Transportation initiatives, including the administration of parking functions and transportation infrastructure projects into a new office. This new office will be better able to proactively engage the community and address critical transportation needs. • Continued contributions to the City's irrevocable Section 115 Pension Trust Fund: As discussed earlier, this budget incorporates City Council direction to more conservatively budget pension costs. Budget assumptions now use a lower discount rate than the CaIPERS provided actuar- ial assumptions. If CaIPERS does not meet its stated investment returns in the future, the City will be better positioned to incorporate increasing pension costs without service delivery crowd -out. II TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER • Continued Leadership in Public -Private Partnerships: This budget reflects the City's com- mitment to ensuring high -quality, cost-effective service delivery, including through public- private partnerships. This budget includes the animal shelter transition from City staff to a contract with Pets In Need, the first steps of transitioning Project Safety Net to a commu- nity collaborative with the City as a partner instead of the primary funder, and continued partnership on the new Junior Museum and Zoo. Fiscal Sustaina aility This budget includes significant reductions across the organization, especially in the General Fund, to balance the FY 2020 budget and better position the City in FY 2021. Proactively con- tributing to the City's supplemental pension trust fund will help ensure pension funding and minimize the need for future service reductions. But it also means making some choices today. This budget includes a reduction in overtime in the Fire Department associated with a change in deployment, position eliminations in the Library Department and Public Works, as well as ongo- ing expense reductions in the Office of the City Clerk, the City Manager's Office, the Office of Emergency Services, and Information Technology. In addition to position eliminations, this bud- get includes taking actions such as freezing a variety of positions across the organization that will save nearly $2.0 million in the General Fund. This budget contributes more than $1.25 million to the Budget Stabilization Reserve (BSR) to maintain it at the City Council target of 18.5 per- cent consistent with previous City Council direction. Addressing immediate FY 2020 needs is critical, but we also need to structurally balance reve- nues and expenses. To that end, this budget includes actions that will start in FY 2021, including the transition of Project Safety Net to a community -funded model with the City as a partner instead of the primary funding provider and the realization of approximately $450,000 in addi- tional savings in the Police Department. When combined with other ongoing actions recom- mended in this budget throughout the General Fund, such as the change in Fire deployment and the elimination of various positions, the City will be better positioned for FY 2021 and beyond. Summary of Other Funds The City's Enterprise and other funds, including the General Capital Improvement Fund, remain healthy through FY 2020. The City will continue to maintain services and facilities for the com- munity and the region, such as Utilities, Palo Alto Airport, and Wastewater Collection and Treat- ment plant. The Airport is making significant strides toward operating in the black, as reflected in the repayment schedule to the General Fund for the loans it received over the years. The City will focus its efforts on parking operations, through the parking funds, as discussed above with the establishment of a new Office of Transportation. The City will also continue to work on its Capital Improvement Program, discussed in greater detail in the Capital Budget. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET III TRANSMITTAL LETTER Acknowlec gments I would like to thank the City Council for your leadership and our Executive Leadership Team and the entire staff of the City for providing outstanding services to our community. A budget takes countless hours of teamwork, collaboration, and patience to produce. I would like to offer special thanks to Kiely Nose, our Chief Financial Officer, Steve Guagliardo, interim Director, Office of Management and Budget, and the dedicated Office of Management and Bud- get Team - Paul Harper, Jessie Deschamps, Alexandra Harris, Jamie Perez, Kayla Shapiro, and Chaitali Paliwal. Completing this budget could not have been accomplished without the skill, dedication, and professionalism of this team. Their willingness to work through adverse circum- stances and sacrifice many hours of their lives are a testament to their commitment to this organization and to the community. Thanks are also due to Christine Paras, Assistant Director, Administrative Services Department, and Tarun Narayan, Treasury Manager. I am also grateful to the Department Directors of our Executive Leadership Team and the department personnel who worked on the material. There are too many to list here by name, but the budget could not have been produced without the senior/management analysts, division managers, administra- tive assistants, and others throughout the organization who helped produce this budget. Respectfully Submitted, Ed Shikada City Manager IV TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Attachment A: Fiscal Year 2020 3udget 3alancing The FY 2020 Operating Budget of $723.8 million reflects a 1.8 percent increase from the FY 2019 Operating Budget of $711.2 million. The increase is primarily attributable to Capital Improvement Program costs being refined/shifted/moved to FY 2020 from FY 2019 in the Cap- ital Improvement Plan. The General Fund has $230.8 million in budgeted expenses, and rep- resents 33.0% of the City's total expenditures. This budget is balanced in FY 2020, however, there are one-time balancing actions recommended within it. For FY 2021, additional work remains to continue to close the gap between revenues and expenses to continue to work towards sustainably and proactively funding the City's long-term pension liabilities. This budget does make strides to accomplish this financial sustainability by taking a strategic multiyear look at service evolutions. As a result of that direction, service delivery impacts are anticipated in FY 2020, and discussed in greater detail below for the City's various funds. General Fund The FY 2020 Operating Budget includes revenues of $232.1 million in the General Fund, repre- senting an 8.2% increase over FY 2019 Adopted Budget revenues of $214.5 million. General Fund Expenses are $230.8 million representing an increase of 9.5% from the FY 2019 Adopted Operating Budget for the General Fund ($210.7 million). However, that increase is not exclu- sively representative of increased costs. The General Fund had one-time savings included in FY 2019 of almost $2.0 million for payments to the City's self -insured workers' compensation and general liability insurance funds; it also had a $4.0 million reduction included in the Adopted Budget as a placeholder for future Council action. Once we adjust the FY 2019 Adopted Budget for these one-time actions, the year -over -year growth would be 6.5%, from $216.7 million to $230.8 million. After the adoption of the FY 2019 Operating Budget, City Council ratified new contracts with the safety labor bargaining groups, with resultant increases. If these figures were restored to the FY 2019 budget starting point, the year -over -year increase would be much less in the General Fund. The FY 2020 Budget Stabilization Reserve (BSR) is anticipated to be $42.7 million, well within the City Council's target of 18.5 percent of the General Fund budgeted expenses. The General Fund Budget includes a contribution of $1.3 million to the BSR in order to maintain the reserve at the targeted level. The balancing strategy for the General Fund is discussed below; as discussed above the FY 2020 Operating Budget and ongoing actions included in it continue to make progress towards ongoing fiscal sustainability in FY 2021 and beyond. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET V TRANSMITTAL LETTER General Fund Balancing Strategy REVENUES Revenues of $232.1 million in the General Fund are based on continued economic growth in the region. This economic growth is best reflected in the City's anticipated revenues from various taxes comprising approximately 75.0 percent of the year over year growth in revenue. • Sales Tax is projected to increase by 9.9% (from $31.2 million to $34.3 million), • Property Taxes are anticipated to increase by 7.3% (from $45.3 million to $48.6 million), and • Transient Occupancy Tax (TOT) is expected to increase by 17.0% (from $25.0 million to $29.3 million). These FY 2020 estimates for the first time include estimates from the pas- sage of Measure E in November 2018 which increased the TOT tax rate from 14% to 15.5%. When the major tax categories are combined, including the above taxes as well as documentary transfer tax and Utilities User Tax, their revenues are anticipated to increase by $13.1 million, or approximately 10.5%, from FY 2019 Adopted Budget of $125.1 million to $138.2 million. The City will continue to monitor current revenues and analyze the sensitivity to various factors. Concerns over the growth rates of various sectors factor prominently into the risk analysis; how- ever the diverse mix of tax revenues does provide some insulation. Additionally, as part of the Fiscal Sustainability workplan, the City will analyze options for additional revenue and the resulting implications from those options. As new revenue generators, such as car dealerships or hotels, begin operating in Palo Alto they will be factored into future forecasts. Funding from other sources, such as Measure B and SB1, are included in this budget to provide resources for Capital Infrastructure. They are discussed more in the FY 2020 Capital Budget. EXPENSES The City's FY 2020 General Fund Expense Budget is $230.8 million. As a service -driven organi- zation, salaries and benefits represent 58.2% of total General Fund Expenses. This percentage is slightly lower than prior years. The next largest expense from the General Fund is transfers out of the General Fund, which is increasing 10.0% from $30.9 million in FY 2019 to $34.0 million in FY 2020. This reflects the increase in transfers to the infrastructure fund associated with increased TOT revenues that have been allocated for that purpose, increasing $3.8 million from prior year levels. In FY 2019, the City structurally balanced the General Fund, made hard decisions to eliminate 17.60 full time positions, and positioned the City to address future unknown liabilities. This bud- get builds on the work of the past few years as it works to address new cost escalation and achieve a more proactive position in confronting the City's long term pension liability. Although reductions in the past few years have been made with minimal impacts to service delivery, the FY 2020 Budget contains service delivery impacts. These impacts are necessitated in part by City Council's direction to more conservatively budget for pension costs and proactively con- tribute to the City's long-term pension liability. This direction results in $3.8 million in additional costs in the General Fund in FY 2020 that have not been included in previous budgets. To address this, the General Fund includes a number of ongoing reductions and one-time actions that will ensure the City can address fiscal sustainability in a manner that does not unduly hand- icap its ability to deliver services. VI TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Significant highlights of the General Fund Balancing Strategy include service delivery evolutions such as: • Adjusting the Fire Department's deployment model, generating overtime savings while only minimally impacting response times. • Eliminating a librarian, impacting the Library's ability to conduct special programming. • Increasing the replacement cycle for emergency response equipment in OES. • Consolidating landscape maintenance in the Community Services Department and reduc- ing the 'Know Your Neighbor' grant funding. • Project Safety Net transitioning from a City -funded program to a community collaborative program, functioning with the City as a partner rather than a provider. In total, positions in the General Fund decrease 10.50 FTE, including an elimination of 8.85 FTE and a shift of 1.46 FTE to other funds to better align the work being performed with the funding source. These are discussed in greater detail in Attachment B. In addition to these ongoing reductions, significant savings is generated in FY 2020 from hold- ing positions vacant, a total of nearly $2.0 million. Departments holding vacancies include Administrative Services, Community Services, the Fire Department, Planning and Development Services Department, and the Police Department. Each of these actions will have an impact on service delivery; as staff capacity is reached, exist- ing projects, and any potential new project, will require a reprioritization of resources impacting quality and pace of work. Many of these vacancy savings have projected ongoing savings to be realized in FY 2021 such as the Police Department, however, the specifics of the FY 2021 changes require further refining by staff during the next year. Only minor one-time funding is recommended for necessary business including new hire costs in the Fire Department, a nexus study for the development impact fee for Parks, Community Centers, and Libraries, and the grant -funded purchase of a mobile solar energy generator and storage trailer. The FY 2020 Budget also proposes an investment in human capital ($750,000) split between the City Manager's Office and the non -departmental reserve. All Funds This budget focuses not only on the General Fund but also on the City's other funds. The other funds also include City Council's directions to proactively address the City's long-term pension liabilities. This is made up of $2.4 million in costs representing their share of FY 2020 costs, as well as $2.2 million in a 'catch-up' payment for FY 2019, consistent with the $4.0 million that the General Fund contributed in FY 2019. Major activities in non -general funds include: Wastewater Treatment Fund The FY 2020 Budget includes significant funding for the Wastewater Treatment plant's seven capital projects programmed through the 2020 - 2024 Capital Improvement Plan. $28.3 million is budgeted in FY 2020 for these projects, including $11.1 million for the Advanced Water Purifi- TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET VII TRANSMITTAL LETTER cation Facility and $6.1 million for the Primary Sedimentation Tank Replacement. Through the five year CIP, expenses of $133.6 million are programmed across seven projects. It is important to note that approximately 64 percent of expenditures in the Wastewater Treatment Fund are reimbursed by five contributing partner agencies outside of the City of Palo Alto, based on each agency's expected capacity share. Details of these capital projects and expenses can be found in the Wastewater Treatment Fund section of the FY 2020 Capital Budget. Airport Fund Total revenues in the Airport Fund are anticipated to be $2.46 million with corresponding expenses. The Airport has worked to sign new leases with clients as old leases have expired and anticipates increasing charges by 4.5%. Expenses are also projected to increase due to major construction projects that incur costs; however, 90% of these costs are offset by grants from the Federal Aviation Administration. The Airport has reprioritized capital improvements to ensure that there is sufficient funding for operating costs and continued services with minimal service delivery impact. In the past, the Airport Fund has received loans from the General Fund, totaling $3.1 million since the City took over operations. The Airport Fund will begin repayment to the General Fund in FY 2020 in the amount of $272,000 annually for the next fifteen years as part of its commitment to fiscal sustainability and financial viability. Various Parking Funds This FY 2020 budget recommends establishing a separate Office of Transportation (OOT), pre- viously housed in the Planning and Community Environment Department. This is in recognition of the significant need to develop and implement strategies that address City Council's priority to resolve traffic and transportation challenges. This FY 2020 budget recommends the net addition of 2.0 positions to this new established OOT, including 1.0 Parking Manager to oversee shuttle and parking programs ($265,000 and is recommended to be equally allocated 50% to the OOT General Fund Operating Budget and 50% to parking funds). The Residential Preferen- tial Parking program is currently operating with a significant deficit and in FY 2020 requires a General Fund subsidy of $721,000 to ensure the fund and program remain solvent. A more detailed presentation of the FY 2020 Budget for the University Avenue Parking District Fund and California Avenue Parking District Fund are available at the end of the Special Revenue Funds Overview section of this document. Additional information about the establishment of OOT can be found in the subsequent section for City Departments within the City Manager's Office. Stormwater Management Fund In FY 2020, the Stormwater Management fee is scheduled to increase by 4.5 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. This fee provides financial resources for a number of projects and infrastructure components as outlined in the Storm Drain Blue Ribbon Committee's recommendations, which identified 13 Capital Improvement projects. Work on those projects began in FY 2019 and is programmed in the 2020 - 2024 Cap- ital Improvement Plan. VIII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER UTILITY RATE CHANGES FY 2020 continues the rate increases forecast in the most recent financial plans in order to ensure the City's ability to replenish lower reserves, provide sufficient funding to cover increas- ing expenses for commodity costs, and repair and replace the City's aging utility infrastructure. The median monthly residential utility bill is expected to increase by 5.0 percent, or $15.65, from $312.15 to $327.80. FY 2017 was the first year in recent years that rate increases have been nec- essary 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. The individual utility rate increases for FY 2020 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. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET IX TRANSMITTAL LETTER Attachment B: Fiscal Year 2020 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 2020 General Fund Budget is attributable to salaries and benefits. In FY 2019, the City negotiated new labor agreements with safety units that extend through FY 2021; the City also reached agreements with its miscellaneous units. In FY 2020, the City also anticipates tackling recruitment and retention challenges through a variety of initiatives, discussed further in the City Manager's departmental section and the Non -Departmental section of this docu- ment. Position Changes This budget includes the net reduction of 6.50 Full -Time Equivalent (FTE) positions across all funds from FY 2019 Adopted levels. This representing a decrease of 0.6 percent from the FY 2019 Adopted Budget, from 1,041.35 to 1,034.85 FTE. These adjustments are summarized in the following table and discussed in more detail below. Position Changes FY 2019 Adoptec to FY 2020 Adopted Budget Genera Fund Fiscal Year 2019 Adopted Budget 585.43 Fiscal Year 2019 Approved Adjustments (3.15) Fiscal Year 2019 Modified Budget 582.28 Fiscal Year 2020 Increase 2.96 Fiscal Year 2020 Decrease (8.85) Fiscal Year 2020 Reallocation (1.46) Fiscal Year 2020 Adopted Budget 574.93 Net Difference (10.50) nterprise Funds 357.86 Other Funds* 98.06 2.15 357.86 100.21 0.75 1.54 (1.90) 1.46 358.61 101.31 0.75 3.25 1,041.35 (1.00) 1,040.35 5.25 (10.75) 0.00 1,034.85 (6.50) * Other Funds include Internal Service Funds, Special Revenue Funds, and the Capital Improvement Fund. NOTE: This table does not include Hourly positions. X TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER This year -over -year net reduction of 6.50 full-time positions includes the net reduction of 1.00 position already approved by the City Council as part of staff recommendations to identify $4.0 million in General Fund savings (CMR 9925). This budget recommends various net position changes, detailed below. In the General Fund, 8.85 FTE eliminations are partially offset by the addition of 2.96 FTE, and an additional 1.46 FTE are recommended to be shifted to other funding sources resulting in a total decrease of 10.50 FTE from the FY 2019 Adopted Budget. In the enterprise Funds, a total of 0.75 FTE is recom- mended to be added, and in Other Funds (including Internal Service Funds, Capital Improve- ment Funds, and Special Revenue Funds) a net 3.25 full-time positions are recommended to be added. Position Changes recommended in this budget include eliminations, reclassifications, and aug- menting existing positions in order to best align the workforce with organizational needs. Position eliminations recommended in the Budget include: • 1.0 Auditor I, as approved by City Council through CMR #9925 on December 17, 2018 • 1.0 Chief Sustainability Officer, reflecting the shift in resources from a single Chief Sustain - ability Officer to a program that spans the organization. • 1.0 Librarian, further impacting the Library's ability to do special programming events and effectively and promptly respond to reference requests. • 1.0 Associate Engineer in the Capital Fund to align with the anticipated workload needs of the Public Works Engineering division. • A 0.5 Administrative Associate I in the Public Works Department; the work will be absorbed by other staff. • 1.0 Fleet Services Coordinator in the Vehicle Replacement and Maintenance Fund as part of a realignment in work related to Vehicle Replacement and Maintenance. • 1.0 Veterinarian, 2.0 Veterinarian Technicians, 1.0 Superintendent Animal Services, and 2.0 Animal Services Specialist I I; this elimination of 6.0 FTE is due to the shift in service deliv- ery for Animal Services to the partnership with Pets in Need and the savings is offset by contractual expenses in the Community Services Department. There are also certain realignments, augmentations, and additions included in this budget. • Addition of 1.0 Parking Manager and 1.0 Senior Engineer to help establish the new Office of Transportation which is anticipated to be a central resource for all community issues related to Transportation. • Augmenting an existing 0.5 FTE Transportation Systems Coordinator position by an addi- tional 0.5 FTE in order to enhance the capacity of the newly established Office of Trans- portation. • Elimination of 1.0 Assistant City Manager/Utilities General Manager and 1.0 Deputy City Manager, offset by the creation of 1.0 Assistant City Manager in the City Manager's Office and 1.0 Utilities General Manager in the Utilities Funds to better align with organizational needs in the City Manager's Office. (This action results in a net 0.25 FTE decrease in the General Fund and a net 0.25 FTE increase in the Enterprise Funds due to the previous funding alignments.) TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET XI TRANSMITTAL LETTER • As part of the realignment in the City Manager's Office, a reclassification from 1.0 Adminis- trative Associate I I I to 1.0 Administrative Assistant is also recommended. • Realignment in the Utilities Resource Management division, including: augmentation of an existing 0.5 Resource Planner in the Utilities Funds to 1.0 Resource Planner; reclassification of 1.0 Administrative Associate II to 1.0 Program Assistant II; and realignment of two 0.5 Resource Planners into 1.0 Utilities Marketing Program Administrator. These actions will facilitate better implementation and monitoring of new programs related to the City's sus- tainability goals and help succession planning efforts. • Reclassification of 2.0 Power Engineers to 2.0 Electric Project Engineers in the Utilities funds to better align with organizational needs and facilitate succession planning. • Reclassification of 1.0 Administrative Associate I I I in the Vehicle Replacement and Mainte- nance Fund as part of realignment in work related to Vehicle Replacement and Mainte- nance. • Reclassification of 1.0 Manager, Library Services and 1.0 Senior Librarian to 2.0 Supervising Librarians. • Reclassification of 1.0 Program Assistant II to 1.0 Coordinator Recreation Program; this is anticipated to provide capacity for a greater portfolio of community projects and pro- grams. • Reorganization in the new Planning and Development Services Department including elim- ination of 1.46 part-time positions, 1.0 Business Analyst, 1.0 Development Services Director, 1.0 Manager Development Center, and a 1.0 Planning Division Manager, to create 2.0 Man- ager Planning positions, 1.0 Principal Planner, 1.0 Program Assistant, 1.0 Senior Business Analyst, and 1.0 Principal Management Analyst position. The Principal Management Ana- lyst is term -limited, with the budgetary authorization scheduled to expire June 30, 2020. This budget also includes a net reduction of 0.84 part-time positions. More information on each of these changes can be found in the department and fund summaries in this document. 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 of them based on the City's current memoranda of agreement with various employee units and address them as appropriate. In addition, on a one-time basis, this Budget includes numerous position freezes, recognizing savings equivalent to various positions throughout the organization in different departments. These positions will be held vacant through the duration of FY 2020 while the organization addresses the critical issue of long-term fiscal sustainability. This is beyond the normal vacancy savings presumed by the City as part of its regular budget process and will generate an addi- tional $2.0 million in savings on a one-time basis in FY 2020. • 4.0 Police Officers in the Police Department (which currently has 13 vacancies) • 1.0 Deputy Fire Chief in the Fire Department • 1.0 Division Manager in the Community Services Department. • 1.0 Senior Management Analyst and 1.0 Account Specialist in the Administrative Services Department • 1.0 Associate Planner in the Planning and Community Environment Department XII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Salary & 3enefits 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 an additional amount between 1% and 4% 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 implementation of a third tier that went into effect January 1, 2013. As expected, new employees are hired into the lower tiers as existing employees retire, thereby lowering the City's overall pension liability. PENSION Even with the efforts discussed above, the City's pension costs continue to escalate. This is largely due to circumstances beyond the City's control as a member of CaIPERS. CaIPERS has taken a number of steps over the past few years that are intended to mitigate future impacts to cities even as they result in greater near -term costs. In December 2016, the CaIPERS board voted to lower the discount rate (used in calculating investment returns) from 7.5 percent to 7.0 percent, phasing in the reduction over three years. This phase -in began in 2019, continues in FY 2020, and will have its final phase in FY 2021. The discount rate used by CaIPERS to calculate the City's FY 2020 Actuarially Determined Contribution (ADC) was 7.25 percent, down from 7.375 percent used in FY 2019. This budget includes the most recent pension rates from the CaIPERS valuation reports as of June 30, 2017. When compared to Fiscal Year 2019, Fiscal Year 2020 employer contribution rates increased in line with previous CaIPERS projections. • The Miscellaneous Plan increased by 3.0 percentage points, an increase of 9.2%, from 32.6% of payroll in FY 2019 to 35.6% of payroll in FY 2020. • The Safety plan increased by 3.4 percentage points, an increase of 6.8%, from 55.6% of payroll in FY 2019 to 59.4% of payroll in FY 2020. CaIPERS projected pension rates through FY 2025 are included in the table below: Pension Rates By Plan (Fiscal Year) - CaIPERS FY Miscellaneous (%) Safety (%) 2019 32.6 2020 35.6 55.7 60.8 Discount Rate (%) 7.375 7.25 2021 38.2 65.0 7.0 2022 40.0 68.6 7.0 2023 41.4 71.6 7.0 2024 41.9 73.2 7.0 2025 42.5 74.8 7.0 TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET XIII TRANSMITTAL LETTER As the above table indicates, the city's pension costs will continue to increase through FY 2025. CaIPERS use of a 7.0% discount rate results in greater costs than when it had used a higher dis- count rate (7.5%). This is representative of CaIPERS' efforts to meet its investment return more frequently. In a given year, if CaIPERS meets or exceeds its investment return, the City's Unfunded Accrued Liability would shrink. This is because CaIPERS provides, as part of its ADC to cities, not only a normal cost (pay as you go) but also a UAL (catch-up) payment. Thus, if CaIPERS investment target is met, the normal cost covers the pay as you go portion, and the UAL payment lessens the long-term liability. Conversely, in a year when CaIPERS does not meet its investment return, the UAL of the City would grow. In order to address this potential gap, the City Council directed that the City of Palo Alto fundamentally change its budgeting practice. Beginning in FY 2020, rather than use the CaIPERS ADC (which is the standard practice for calculating pension costs in a given year) the City Council directed that the City use a discount rate lower than 7.0 percent. In order to make proactive contributions to the City's long term pension liability and prevent service deliv- ery crowdout in the long-term, the City has calculated pension costs for FY 2020 using a 6.2 discount rate, in line with the estimated discount rate used by CaIPERS' outside consultant (Wilshire Associates). This effectively decreases the City's sensitivity to lower CaIPERS returns, ensuring that the UAL does not worsen. This additional normal cost (pay as you go) is included in the FY 2020 budget and will be sent to the City's irrevocable section 115 trust. The FY 2020 budget sends $6.2 million for FY 2020 costs across all funds and $2.3 million as catch-up funds, so all funds keep pace with the Gen- eral fund, to the PARS trust fund. This brings total contributions to $22.0 million since the trust was created in FY 2017. The General Fund has $14.3 million of that $22.0 million. This funding represents the City's commitment to proactively contributing to the City's long-term pension liability and will help insulate the City against potential future increases to the UAL. In compari- son to the $44.6 million in CaIPERS projected pension costs, this additional pay-as-you-go cost of $6.2 million is roughly 14% of the City's annual pension costs. Through FY 2020, the City will bring forward a pension policy for City Council consideration, as discussed in the Fiscal Sustainability work plan, in order to provide parameters and recommen- dations for the use of the PARS trust. Additional information regarding the City's plan for proactively addressing escalating pension costs, and the discussions that the City Council has already conducted to date, can be found in the Employee Information section of this document. RETIREE HEALTHCARE Consistent with past practice, this budget assumes the full payment of the Actuarial Deter- mined Contribution (ADC) for not only retiree pension but also healthcare costs. With the pay- ment of the ADC it is assumed that, all else being equal, the City will fully pay off its obligations for retiree healthcare costs. The City's outside actuarial consultant (Bartel Associates) performs an actuarial analysis of the City's OPEB funding every two years. The last study was done in FY 2018 with a valuation of assets as of June 30, 2017. The valuation had a net positive outcome on the City's finances. Despite a lower discount rate (6.75 percent was used in the most recent val- uation while 7.5 percent had been used previously) the overall contribution was lowered from $16.9 million in FY 2018 to $16.0 million in FY 2019. This was largely due to premium caps, XIV TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER changes in mortality assumptions, and increases in eligibility for medicare premium plans, which are less expensive. The projected contributions through FY 2028 are presented below. Retiree Healthcare Annual Required Contributions (by Fiscal Year) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 General Fund 10.3 10.2 10.5 10.8 11.2 11.5 11.9 12.2 12.6 13.0 13.4 Non -General Funds 6.7 5.8 6.0 6.2 6.3 6.5 6.7 6.9 7.2 7.4 7.6 TOTAL 16.9 16.0 16.5 17.0 17.5 18.1 18.6 19.2 19.8 20.4 21.0 As seen in the chart above, costs for FY 2020 for Retiree Healthcare increase by slightly more than 3.0% from $16.0 million in FY 2019 to $16.5 million in FY 2020, in line with the most recent actuarial study. A more in-depth discussion of the City's ongoing efforts with regards to OPEB liabilities took place on May 15th, 2018 with the Finance Committee (CMR 9213) as part of the adoption of the FY 2019 Operating Budget. Additional information regarding Retiree Healthcare can be found in the Employee Information section of this document. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET XV CITY OF PALO ALTO CITY OF PALO ALTO Fiscal Year 2020 Adopted Operating Budget City Council Eric Filseth, Mayor Adrian Fine, Vice Mayor Alison Cormack Tom DuBois Liz Kniss Lydia Kou Greg Tanaka Ed Shikada, City Manager Kiely Nose, Director of Administrative Services/Chief Financial Officer David Ramberg, Assistant Director of Administrative Services Christine Paras, Assistant Director of Administrative Services Steve Guagliardo, Director (Interim), Office of Management and Budget Paul Harper, Budget Manager, Office of Management and Budget Tom DuBois, Finance Committee Chair • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2020 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 3 CITY OF PALO ALTO TABLE OF CONTENTS Table of Contents n m 0 Introduction 7 Budget Acknowledgments 9 City of Palo Alto Organizational Chart 11 Palo Alto at a Glance 13 The Budget Process and Document 21 Budget Awards 29 Citywide Funds 33 Citywide Funds Overview 35 Citywide Revenue by Category 37 Citywide Expense by Category 39 Citywide Projected Operating Fund Balance 41 Citywide Average Salary 43 Major Capital Projects 47 General Fund 63 General Fund Overview 65 General Fund Reserves 77 General Fund Revenue Descriptions 77 General Fund Revenue by Category 81 General Fund Expenditures by Department 83 General Fund Expenditures by Category 84 Enterprise Funds 87 Enterprise Funds Overview 89 Internal Service Funds 101 Internal Service Funds Overview 103 Special Revenue Funds 109 Special Revenue Funds Overview 109 Debt Service Funds 123 Debt Service Funds Overview 125 City Departments 133 City Attorney 135 City Auditor 143 City Clerk 155 City Council 165 City Manager 169 Office of Transportation 186 Administrative Services 199 General Fund 205 Printing and Mailing Services 213 Community Services 219 Fire 239 Human Resources 253 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 5 TABLE OF CONTENTS General Fund 258 General Liabilities Insurance Program 265 Workers' Compensation Fund 269 Information Technology 277 Library 291 Office of Emergency Services 303 Planning and Development Services 313 Police 331 Public Works 345 General Fund 350 Airport Fund 359 Refuse Fund 367 Stormwater Management Fund 378 Vehicle Replacement and Maintenance Fund 386 Wastewater Treatment Fund 393 Utilities 401 Electric Fund 409 Fiber Optics Fund 423 Gas Fund 431 Wastewater Collection Fund 444 Water Fund 453 Non -Departmental 467 Employee Information 473 General Benefits Fund Overview 475 Retiree Health Benefit Fund Overview 481 Table of Organization 485 Supplemental Information 503 Budget Adoption Ordinance 505 Appropriations Limit Resolution and Calculation 509 Financial Policies 513 Glossary 517 Americans with Disabilities Act 521 6 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 7 CITY OF PALO ALTO BUDGET ACKNOWLEDGEMENTS Budget Acknowledgments Department Budget Coordinators Administrative Services David Ramberg City Attorney Stacy Lavelle City Clerk David Carnahan City Manager/Office of Transportation Chantal Gaines Rachael Tanner Judy Ng Community Services Jazmin LeBlanc Fire Amber Cameron Human Resources Frank Lee Information Technology Sherrie Wong Library Giovanna Erkanat Office of Emergency Services Nathan Rainey Planning & Development Services Khashayar Alaee Sherry Nikzat Katie Whitley Police Eric Jensen Public Works Michelle Austin Maybo AuYeung Utilities Anna Vuong Budget Document Producers - Office of Management & Budget Staff Kiely Nose Steve Guagliardo Paul Harper Jessie Deschamps Alexandra Harris Chaitali Paliwal Jamie Perez Kayla Shapiro BUDGET ACKNOWLEDGMENTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 9 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 Stump City Manager* Ed Shikada Administrative Services Kiely Nos& Director/Chief Financial Officer Community Services Kristen O'Kane, Director Fire Department Geoffrey Blackshire, Interim Chief Information Technology Darren Numoto, Interim Chief Information Officer Library Monique le Conge-Ziesenhenne, Director Office of Emergency Services Kenneth Dueker, Director City Clerk Beth Minor City Auditor Human Resources Rumi Portillo, Director/Chief People Officer Planning and Development Jonathan Lait, Director Police Department Robert Jonsen, Chief Public Works Brad Eggleston, Director Utilities Dean Batchelor, Director *The newly established Office of Transportation is situated in the City Manager's Office. CITY OF PALO ALTO ORGANIZATIONAL CHART • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 11 CITY OF PALO ALTO Palo Alto at a Glance PALO ALTO AT A GLANCE San Francisco kJ.] 5icnILI Alameda ry""h IIjn'ers Point -�- San Francisc❑ limy [ Ity Sncbane Bay Snulh San Francisco *) Pao f :n P,1 it tie a 'rem �:ar and Geole nefuy de 1,erra El Granaca I ialf Moor nay frl Sa, Male° San Carlos Redwood City isa Le tio.ada if Union City Eden Landrno • Ecological fieserve Fremont htewark Attie --ion Pal Altode AiltlpitEe Stanford North San dose Sunnyvale :c , San Ramon I.:I; aho r iiegionaf Park A.i Leandro flash' 4'alley iayvard Feria f:uperno 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 2020 ADOPTED OPERATING BUDGET 13 PALO ALTO AT A GLANCE POPULATION Palo Alto's population was 67,082 in 2018. This represents a 0.6 percent increase over the previous year and a 13.9 percent increase since 2000. Approximately 23.3 percent of the population is under the age of 18, and the median age is 41.8. Approximately 50.6 per- cent of the population is female, and 49.4 percent of the population is male. EDUCATION Palo Alto has one of the most outstanding educational systems in the nation and was recently named one of California's most edu- cated cities. Over 97.2 percent of Palo Alto residents aged 25 or over have received a high school diploma. Over 81.1 percent have obtained a bachelor's degree and 51.9 per cent have earned a post -graduate or profes- sional degree. School enrollments in Palo Alto decreased to 12,230, or by 8.0 percent, between 2008 and 2018. 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 States, California, and Santa Clara County were 1,484, 1,476, and 1,606, respec- tively. INCOME In 2017, Palo Alto's median household income was $147,537 and the per capita income was $82,576. As of 2017, 62.7 percent of all house- holds 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 2.70 in 2017, compared to 2.26 per household in 2000. HOUSING UNITS In 2017, 54.9 percent of the 26,238 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 0.7 per- cent more total housing units from 2000 to 2017. 14 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE DEVELOPMENT The City issued approximately 2,249 residen- tial and 554 commercial building permits in Fiscal Year (FY) 2018. The combined valuation for all permits was $493.7 million. OFFICE AND INDUSTRIAL RENTAL ACTIVITY Palo Alto's net rentable office space totaled approximately 7.7 million square feet as of the fourth quarter of 2018. The vacancy rate during this same time period was 3.0 percent compared to 8.0 percent for the Silicon Valley market. Average asking rents in Palo Alto and the Silicon Valley were, respectively, $9.37 and $5.01 per square foot, as of the fourth quarter of 2018. Net rentable square footage for industrial facilities in Palo Alto was 1.6 million, with a vacancy rate of 2.2 percent and average ask- ing rent of $2.76 per square foot for manufac- turing and $1.91 per square foot for warehouse. The Silicon Valley market had an average vacancy rate of 1.7 percent and ask- ing rent averaged $1.04 per square foot for manufacturing and $1.16 for warehouse. Net rentable space for Research and Develop- ment (R&D) facilities in Palo Alto totaled 10.16 million square feet with a vacancy factor of 2.2 percent and average asking rent of $6.35 per square foot. The vacancy rate for the Sili- con Valley market was 7.0 percent with an average asking rent of $2.47 per square foot. JAMES STEWART HE GLENN MILLER STORY ONG OF THE THIN MAN Top 25 Major Sales/Use Tax Contributors, FY 2018 Anderson Honda Apple Stores Audi Palo Alto Bloomingdales Fry's Electronics Hewlett-Packard Enterprise Comp. Hewlett-Packard Houzz Shop Integrated Archive Systems Lucile Packard Children's Hospital Macy's Department Store Magnussen's Toyota Neiman Marcus Department Store Nest Labs Nordstrom Department Stores Shell Service Stations Space Systems Loral Stanford University Hospital RETAIL SALES AND SALES TAX REVENUE Sales and use tax totaled $31.1 million in FY 2018, a healthy increase of $1.2 million or 3.9 percent. This growth is primarily attributable to growth in electronic equipment, restaurants, furniture/appliance, and auto leases. There is continued erosion of brick and Tesla Lease Trust Tesla Motors Tiffany & Company Urban Outfitters USB Leasing Varian Medical Systems Volvo Cars Palo Alto mortar receipts by steady growth in online retail sales, however increased receipts from the county pool, which includes a growing number of online retailers collecting sales and use tax, has been offsetting these losses. PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 15 PALO ALTO AT A GLANCE Principal Property Taxpayers, FY 2018 Rank 1 2 3 Google Inc. 4 5 Whisman Ventures LLC 6 7 Hobach Realty Co. LP 8 9 10 Taxpayer Leland Stanford Jr. University Loral Space and Communications EOSII Palo Alto Technology Center LLC Hudson Embarcadero Place LLC SI 43 LLC BVK Hamilton Avenue 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's Palo Alto Research Center, Wilson Sonsini Goodrich & Rosati, Manatt Phelps Phillips, Accel Partners, Facebook, Google, Genencor, Tencent Amer- ica, Skype Technologies, Nest, the Institute for the Future, and many other leading technol- ogy and business services firms. Palo Alto was again named among the top 6 most livable U.S. cities in 2018 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), rail service, world -class medi- cal facilities, excellent retail centers and restaurants, and its highly acclaimed City ser- vices. Businesses are drawn to Palo Alto not only because of its great location, workforce, and entrepreneurial culture but also because of incentives including: great local utilities (including dark fiber), no payroll tax, and no Total Taxable Assessed Value $5,119,879 $235,175 $209,211 $126,019 $115,984 $112,328 $92,081 $79,954 $71,754 $69,744 $6,232,129 business license tax. Additionally, the City's Development Center is a "one -stop" service center staffed by the Planning and Develop- ment Services, Public Works, Utilities, and Fire departments. 16 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE EMPLOYMENT The City had 32,549 employed residents in 2019. Due to its location on the Peninsula and the presence of Stanford University, the City is a job importer versus exporter with a total of 97,549 jobs citywide. Palo Alto's unemploy- ment rate was 2.5 percent in 2018, which was considerably lower than the nation (3.9 per- cent), state (4.1 percent), and county (2.7 per- cent), during the same period. LARGEST EMPLOYERS Palo Alto's top ten employers as of June 30, 2018 reflect jobs in industries ranging from education and healthcare to technology and research and development. Principal Employers, FY 2018 Rank Employer Number of Employees 1 Stanford Healthcare 5,500 2 Lucile Packard Children's Hospital 5,400 3 Stanford University 4,300 4 Veteran's Affairs Palo Alto Healthcare System 3,900 5 VMware, Inc. 3,500 6 SAP Labs Inc. 3,500 7 Space Systems/Loral 2,800 8 Hewlett-Packard Company 2,500 9 Palo Alto Medical Foundation 2,200 10 Varian Medical Systems 1,400 Total 35,000 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 17 PALO ALTO AT A GLANCE Parks, Recreation & Public Safety Community Centers Item (FY 2018) Parks Parks Acreage Playgrounds Community Centers Zoo Golf Courses Gymnasiums/Fitness Rooms Youth Centers Walking/Biking Trails (Miles) Libraries Item (FY 2018) Library Branches Items Checked Out (Circulation) Books (Inventory) eBooks & eMusic (Inventory) AudioNisual - DVD/CDs (Inventory) Reference Questions Number 36 162 29 4 1 1 6 1 41 Number 5 1,538,118 254,678 128,246 48,830 33,020 Number 1 93 25 4 1 52,966 Number 7 96 9 2 6 8,983 Item (FY 2018) Police Police Stations Sworn Police Personnel Police Vehicles Motorcycles Canine Units Number of Calls for Service Item (FY 2018) Fire Fire Stations Sworn Fire Personnel Fire Engines Fire Trucks Ambulances Number of Calls for Service 18 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE Infrastructure, Vaintenance & Development Activity Item (FY 2018) Number Street Miles 471 Lane Miles Resurfaced Annually 30.6 Building Permits Issued Annually 3,103 Number of Fire Inspections 9,746 Active Capital Improvement Projects 223 Capital Improvement Projects Exp. $94.6 million Miles of Water Municipal Mains 236 Gallons of Water Delivered Daily 9.9 million Miles of Municipal Wastewater Mains 217 Gallons of Wastewater Treated 2,340 million Miles of Gas Mains 211 Miles of Overhead Electrical Line 117 Miles of Underground Electrical Line 190 Miles of Fiber Optic Backbone 48 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 19 PALO ALTO AT A GLANCE Sustainability Numbe Total Tons of Material Recycled or Composted 57,744 Total Megawatt -hours Purchased from Eligible Renewable Sources* 552,942 Percent of Electric Portfolio Purchased from Eligible Renewable Sources 59.87% Percent of Electric Portfolio Purchased from Carbon Neutral Sources** 100% * Calendar year 2018. "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 2018. "Carbon Neutral Sources" include eligible renewable (59.8%) and large hydro- electric power (50.8%). Due to the bountiful hydro conditions in 2018, the City was able to sell surplus carbon neutral electricity supplies to other utilities. SOURCES: POPULATION: U.S. Census Bureau, 2013-2017 American Community Survey, Demographic and Hous- ing Estimates, 5 -Year Estimates, Table DP05. 2019 Official City Data Set. EDUCATION: U.S. Census Bureau, 2013-2017 American Community Survey, Educational Attainment, 5 -Year Estimates, Table S1501. City of Palo Alto 2017-2018 CAFR (Demographic and Economic Statistics- Last Ten Fiscal Years). California Department of Education -Data & Statistics -school performance -secondary education for Palo Alto Schools and County SAT scores. 2016 average SAT scores by State on Prescholar.com for State level SAT scores. INCOME: 2013-2017 American Community Survey 5 - Year Estimates, Selected Economic Charac- teristics, Table DP03. PERSONS PER HOUSEHOLD AND HOUSING UNITS: 2013-2017 American Community Survey 5 - Year Estimates, Selected Housing Character- istics, Tables, DP04. DEVELOPMENT: City of Palo Alto Planning and Development Department OFFICE AND INDUSTRIAL RENTAL ACTIVITY: CBRE Silicon Valley MarketView Q4 2018 RETAIL SALES AND SALES TAX REVENUE: City of Palo Alto Sales Tax Digest Summary 2018 (Office of the City Auditor) City of Palo Alto 2017-2018 CAFR TOP 25 MAJOR SALES/USE TAX CONTRIBUTORS: City of Palo Alto Sales Tax Digest Summary First Quarter Sales (Jan -March- 2018) -Top 25 Major Sales/Use Tax Contributors. PRINCIPAL PROPERTY TAXPAYERS: City of Palo Alto 2017-2018 CAFR- Principal Property Taxpayers -Current Year and Nine Years Ago. EMPLOYMENT: 2019 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 2017-2018 CAFR 20 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT The Budget Process and Document Basis for 3uc get Development The budget is the City's financial plan for delivering effective services and efficiently managing the revenues which support those services. The City's charter and municipal code provide broad governance for preparation of the operating and capital budgets. The budget is also developed based on the following: • The City Council's top priorities and other City Council directives ▪ Organizational financial status and budgetary guidelines ▪ Service level prioritization, as identified by the City Manager ▪ Availability and sustainability of revenues ▪ Legal mandates ▪ Prioritization criteria, as 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 To o Priorities 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 establishes 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 -set- ting. The following are the City Council's top priorities for 2019, adopted in February 2019: ▪ Climate/Sustainability and Climate Action Plan • Grade Separations ▪ Transportation and Traffic ▪ Fiscal Sustainability THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 21 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 Capital Improvement Plan (CIP) Review Committee, consisting of senior managers in Public Works, Community Services, Administrative Services, and the Office of Transportation, 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. 22 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT With City BUDGET HEARINGS Council and Finance FY 2020 Budget Time/Location Committee Description Departments Attending Monday, April 22 City Council 6:00 PM Council Chambers City Manager comments reviewing the proposed Capital and Operating Budgets and notices the start of Finance Committee for discussions in May Wednesday, May 15 Finance Committee Special Meeting 1:00 PM Community Meeting Room Budget Kickoff; Departments/Funds: -Fiscal Year (FY 2020) Proposed Budget Overview and Non -Departmental Section - Placemaking and Infrastructure: Utilities Department Operating and Capital Budgets (including Electric Fund, Fiber Optics Fund, Gas Fund, Wastewater Collection Fund, and Water Fund) - Placemaking and Infrastructure: Planning, Development Services, and Office of Transportation Operating Budgets (including Special Revenue Funds) - Internal Service Departments: Administrative Services, Human Resources, and Information Technology Operating and Capital Budgets - City Council Appointed Officials & Council Operating Budgets Thursday, May 23 Finance Committee Special Meeting 1:00 PM Community Meeting Room Budget Continuation; Departments/Funds: - Municipal Fee Schedule - Public Safety Services: Fire, Emergency Services, and Police Operating Budgets - General Fund Capital Budget (including Cubberley Capital Improvement Plan) - Placemaking and Infrastructure: Public Works Department (including General Fund, Airport Fund, Refuse Fund, Stormwater Management Fund, Vehicle Replacement Fund, Wastewater Treatment Fund, and related Capital) - Community and Neighborhood Services: Community Services and Library Operating Budgets Tuesday, May 28 Finance Committee Special Meeting 1:00 PM - Wrap-up with Finance Committee Community Meeting Room Monday, June 17 City Council 6:00 PM Public Hearing - Budget Approval & Adoption Council Chambers THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 23 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 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 their allowable uses. The annual budget information is available after the publication of the 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 development services, and administra- tive 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 Funds: 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 Funds: Debt financing is occasionally undertaken for the purchase, replacement, or rehabilitation of capital assets. A separate fund is established to account for these non -oper- ating expenses. 24 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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.oaloalto.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 of 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. :00004 2004W x010% 201,12 20a.a 2w Fa rate.% seam err. •RWI sme %nee x.,w rwglw Fecal Fee. En Irv' Departnlenfs r NgWipenewete rhe CanmmlrySmacos $ 22.71052711r 4Yj K Works S 154,1.4+`5 n.e'al emMg err Co.Mw.my s 7,0212770.1%1 AM'NxralNrt Smkna S 7.17%Tr2 'teary S 7 520212 44 4%1 rrhr* l 512152473071179.4.1 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 25 THE BUDGET PROCESS AND DOCUMENT De oartment and Enterprise Fund Information The budget document includes the following information for each department and enterprise fund: Mission Statement, Purpose, and Description: introduces the department. Organizational Chart: depicts full-time equivalent (FTE) positions, which report to a department director. The total FTE count in the organizational chart may not match the total FTE count in a department section if positions are budgeted in a fund not included in the particular depart- ment section. For example, the Administrative Services Department (ASD) Assistant Director oversees the SAP functional team, as displayed on the organizational chart but the positions are budgeted in the Technology Fund so they do not appear in the ASD departmental budget sum- mary. Accomplishments: identifies the department's noteworthy accomplishments of 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 achievement of those goals. Key Performance Measures: lists key department performance measures related to some goals and objectives. Workload Measures: identifys key quantifiable department outputs. Budget Summary: summarizes key expenditure, revenue, and position data for the department and/or fund for several fiscal years (for example, in the FY 2020 Adopted Budget you will see FY 2017 Actuals, FY 2018 Actuals, FY 2019 Adopted and FY 2020 Adopted Budget). Revenues are shown as either internal or external depending on their source. External revenues include grant funds as well as fees collected for the provision of services such as inspections, plan checks, and recreational programs. Internal revenues are those that are received from another City department. For example, the Utilities Department reimburses the Attorney's Office for legal services. In FY 2020, it should be noted that a variance will be seen between FY 2019 Actuals and the FY 2019 Adopted Budget columns in the salary and benefits total expenses. This variance reflects the difference between estimated vacancies and staff costs actually incurred as well as the changes in labor terms from year to year. Staffing: lists all full-time equivalent (FTE) positions and their respective salaries in a depart- ment based on their actual levels 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. 26 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT Budget Adjustments: 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 Sat- isfaction, and Sustainability, identified with icons as follows: 0 0 Quality Cost Cycle Time Customer Satisfaction 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 2020 ADOPTED OPERATING BUDGET 27 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. 28 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET BUDGET AWARDS 4.1r n. J - California Society of Jv!unicipaCFinance Officers Certificate of Award Excellence Award Fiscal Year 2018-2019 Operating Budget Presented to the City of Palo Alto For meeting the criteria established to achieve the CSMFO Excellence Award in Budgeting January 4, 2019 Margaret Moggia CSMFO President a Sara Roush, Chair Recognition Committee Dedicated Excellence in Municipal Financial Reporting BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 29 GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished tin udget Preento ion Award PRESENTED TO City of Palo Alto California For the Fiscal Year Beginning July 1, 2018 Executive Director 30 BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ;111M.g1IMM,a12 G�9 The Government Finance Officers Association of the United States and Canada present! rh"rxf C ERTIFICATE OF RECOGNITION FOR BUDGET PREPARATION ea Office of Management & Bu dget C ity of Palo A lto, California Tht Cntj i w yr' Rn ca Vo nfcr 1Ila eiare Prep -v414.. er f. esr i" +4. C;r .wnwur Ai - Ai me e eldriater Aar tendon io draae imarwdwa's Woo h arr ievrc inorngurgrei w rhry =roar rover': grr(r +r Hen ry a b viaxi iirn9 O aAeat PILletari1141 4 ,ITd /7x Dian RiraarJrel d6rdtiae Pess tavron A...J nd, wkic+r rs Nu .4rglrert award in rmenenamtar eyp'YrJfor L FrwreohI to (ki i' pire '.use t Marl ie t'Je Era. sett .TeAlekrd Oa adhere I7prepaRI wela rda. Exe ca nine D irector C,cecµ. R arm<,.e Lin M ueab 23.3 WI BUDGET AW ARDS • CITY OF PALO ALT O FISC AL YEAR 2020 ADOPTED OPERATING BUDGET 31 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 33 CITY OF PALO ALTO NM CITYWIDE FUNDS OVERVIEW Fund Structure 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 Cubberley Projects Traffic Mitigation & Parking in -Lieu • Debt Service 2002 Certificate of Participation 2010 Library General Obligation Golf Course California Ave. Garage CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 35 CITYWIDE FUNDS OVERVIEW Fund Structure Enterprise 7 I Internal Service Electric Airport Gas Refuse Water StormwaterII Management Fiber Optics Wastewater Collection Wastewater Treatment General Benefits Retiree Health Benefits Printing & Mailing Services U Vehicle Replacement & Maintenance Workers' Compensation Information Technology General Liability Insurance 36 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ■ CITYWIDE FUNDS OVERVIEW Total Citywide Revenue by Category FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Charges for Services 24,210 28,699 29,421 31,440 2,019 Charges to Other Funds 11,414 12,706 10,863 11,477 614 Documentary Transfer Tax 7,491 9,229 7,434 8,369 935 From Other Agencies 7,373 17,820 17,094 8,691 (8,403) Net Sales 291,672 316,038 314,561 335,525 20,964 Other Revenue 19,580 42,968 76,979 60,864 (16,115) Other Taxes and Fines 2,360 2,477 2,372 2,372 Permits and Licenses 9,322 11,294 11,423 11,725 302 Property Taxes 44,051 47,242 49,899 53,217 3,318 Rental Income 16,466 16,507 16,571 17,186 615 Return on Investments 8,458 9,150 8,303 10,057 1,754 Sales Taxes 29,923 31,091 31,246 34,346 3,100 Transient Occupancy Tax 23,477 24,937 25,049 29,309 4,260 Utility Users Tax 14,240 15,414 16,092 17,581 1,489 Total 510,037 585,572 617,307 632,159 14,852 FY 2020 Change % 6.86% 5.65% 12.58% (49.16) % 6.66% (20.93)% 0.00% 2.64% 6.65% 3.71% 21.12% 9.92% 17.01% 9.25% 2.41% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 37 CITYWIDE FUNDS OVERVIEW 3 Year Trend - Citywide Revenues By Category ($000s) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 --• 111 ■•■ ■■■ ey ay •2} e� •04 �e g' Qy cg' e o e5 +s+ t��i• rei�a� 4e�4 p¢0e�c\ �e� ` (ZS' a�a�`� �?ce�ti i�� ai `\ccoi� 4q.' it e0 \� 4 a�cA4 J�zt o a c c / 10 it Q '(1' o i �� �.� Oc.�e �a+�y yap` �ia� I / h Oc4�t ���' k ore vz �e„. a ���Qo • FY 2018 Actuals • FY 2019 Adopted ■ FY 2020 Adopted FY 2020 Sources $723.8 Million* Use of Reserves/Fund Balance 12.7% Utility Users Tax 2.4% TransientOcucpancyTax 4.0% Sales Taxes 4.7% Return on Investments 1.4% Rental Income 2.4% Property Taxes 7.4% Permits and Licenses 1.6% Other Taxes and Fines 0.3% *FY 2020 sources were inadvertently understated in a presentation to Council in June 2019. This figure accurately reflects the Proposed Budget and changes made by Council. Charges for Servi ces Charges to Other Funds 4.3%_\ 7 1.6% Other Revenue 8.4% Documentary Transfer Tax 1.2% From Other Agencies 1.2% Net Sales 46.4% 38 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Total Citywide Expense by Category FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Allocated Charges Contract Services Debt Service Facilities & Equipment General Expense Rents & Leases Salary & Benefits Supplies & Material Utility Purchase Capital Improvement Program Net Transfers Total 35,729 43,024 35,541 36,473 17,383 17,693 769 437 14,822 32,491 12,402 12,659 176,389 182,776 7,260 6,514 138,003 154,157 66,760 89,582 (5,272) (1,469) 499,786 574,337 50,557 54,911 3 20,692 22,553 655 904 15,341 19,408 14,118 14,792 198,097 216,144 8,521 8,302 153,533 169,713 190,561 154,257 11,863 13,860 711,216 723,837 47,278 48,99 4,354 1,715 1,861 249 4,067 674 18,047 (219) 16,180 (36,304) 1,997 12,621 8.61% 3.63% 8.99% 38.02% 26.51% 4.77% 9.11% (2.57)% 10.54% (19.05)% 16.83% 1.77% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 39 CITYWIDE FUNDS OVERVIEW 3 Year Trend - Citywide Expenses By Category ($000s) 250,000 200,000 150,000 100,000 50,000 ill ill ■■ I.' ■■■ III ■ 4%-- ,„1, eh ,.\`. ���e �¢ � ,e ��c., Pekes ��i<a. rP �,a ICY cgs �.4 �.). \(4. �� 4b ca Q.> wQtdw •S° L� G `�c '� 5 Q i Qa \\toQ 4a • FY 2018 Actuals • FY 2019 Adopted ■ FY 2020 Adopted FY 2020 Expenses $723.8 Million* Capital Improvement Program 21.31% Utility Purchase 23.45% *FY 2020 expenses were inadvertently understated in a presentation to Council in June 2019. This figure accurately reflects the Proposed Budget and changes made by Council. Net Transfers 1.91%_ Supplies & Materials 1.15% Allocated Charges 7.59% Contract Services 6.77% Debt Service 3.12% Facilities & Equipment 0.12% Salary & Benefits 29.86% General Expense 2.68% Rents & Leases 2.04% 40 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund .balance GENERAL FUND ENDING FUND BALANCE 6/30/19 ESTIMATED REVENUES NET FUND TRANSFERS ESTIMATED EXPENDITURES ENDING FUND BALANCE 6/30/20 General Fund 41,417 211,103 (12,986) 196,825 42,709 Total General Fund 41,417 211,103 (12,986) 42,709 CAPITAL FUNDS Capital Improvement Fund Cubberley Property Infrastructure Fund Total Capital Funds 43,506 5,634 49,140 18,403 0 18,403 41,904 1,864 43,768 88,400 4,686 ;83,086 15,413 2,812 18,225 DEBT SERVICE FUNDS 2018 Golf Course 2002B 398 0 530 530 398 Refinancing Library Bonds 3,556 4,443 0 4,443 3,556 Total Debt Service Funds 3,954 4,443 530 4,973 3,954 ENTERPRISE FUNDS Electric Fund 47,281 165,935 (10,514) Fiber Optics Fund 29,771 5,544 (103) Gas Fund (2,348) 39,326 (7,517) Wastewater Collection Fund (1,208) 22,528 (274) Water Fund 27,592 49,038 412 Refuse Fund 10,133 33,685 (128) Stormwater Management Fund (1,935) 7,795 (37) Wastewater Treatment Fund (33,508) 58,517 (156) Airport Fund (3,521) 2,463 (281) 173,564 29,138 4,224 30,988 37,058 (7,597) 27,036 (5,990) 60,707 16,335 38,473 5,217 9,908 (4,085) 55,278 (30,425) 2,166 (3,505) Total Enterprise Funds 72,257 384,831 (18,598) 408,414 30,076 INTERNAL SERVICE FUNDS General Benefits Fund Retiree Health Benefit Fund Workers' Compensation Fund Liability Insurance Fund Printing and Mailing Services Fund Technology Fund 1,282 3,153 1,605 1,312 85 19,411 433 47 540 209 2 748 73,504 16,411 5,481 2,482 1,711 16,515 74,167 16,473 6,738 2,972 1,722 25,405 1,052 3,138 888 1,031 76 11,269 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 41 CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund 3alance Vehicle Replacement and Maintenance Fund Total Internal Service Funds ENDING FUND BALANCE 6/30/19 10,300 37,148 ESTIMATED REVENUES 415 NET FUND TRANSFERS ESTIMATED EXPENDITURES 9,007 13,890 2,394 125,111 141,367 ENDING FUND BALANCE 6/30/20 5,832 23,286 SPECIAL REVENUE FUNDS Community Development Fund Street Improvement Fund Federal and State Revenue Funds Housing In -Lieu and BMR Fund Special Districts Fund Traffic Mitigation & Parking In -Lieu Fund Downtown Business Improvement District Stanford Development Agreement (SUMC) Public Art Funds Total Special Revenue Funds 11,638 266 5,354 48,985 5,065 3,197 2 19,819 1,294 919 2,995 641 2,651 5,022 475 140 325 211 95,620 13,379 (3,171) (2,918) 0 0 (593) (1,283) 17 (1,400) 170 0 0 725 360 5,219 0 165 0 211 (9,178) 6,680 9,386 343 5,270 51,276 4,275 2,389 (6) 18,744 1,464 93,141 TOTAL OPERATING FUND BALANCE 299,536 634,553 128,647 851,345 211,391 42 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Citywide Average Salary Full -Time Equivalent (FTE) % of City Salary (1) ($) In -Lieu Holiday ($) Incentive Pay (2) ($) Overtime (Average) ($) Management Leave (80 Hours) ($) Pension Employer Portion ($) Misc 35.6%;Safety 59.4% (3) Medicare ($) Mgmt/ Prof Utilities Mgmt/ Prof Fire Chief Asscn. Fire Fighters Police Mgmt Asscn. PAPOA SEIU Total/ Average 232.75 49.50 4.00 88.00 7.00 83.00 570.6 1,034.85 22.3% 4.8% 0.4% 8.5% 0.7% 8.0% 55.3% 100.0% 146,040 168,792 192,979 138,280 216,944 143,732 93,208 117,759 N/A N/A N/A 5,718 N/A 4,094 293 1,363 N/A N/A N/A 919 N/A 1,215 382 539 N/A N/A N/A 19,010 N/A 17,756 4,540 7,736 5,617 6,492 7,422 N/A 8,344 N/A N/A 5,856 51,990 60,090 114,630 82,138 128,865 85,377 33,182 48,003 2,118 2,447 2,798 2,005 3,146 2,084 1,352 1,708 Medical ($) 19,060 21,348 24,561 20,321 22,341 19,712 19,821 19,496 1,938 1,803 2,318 2,096 2,171 1,859 1,865 1,901 Retiree Medical (4) ($) 7,085 7,303 11,644 9,551 13,211 11,563 5,941 7,092 2,853 1,410 N/A 12,596 N/A 10,040 4,929 5,365 LIFE/LTD/SUI ($) 669 669 669 669 669 669 669 669 3,145 4,175 2,675 174 3,175 175 175 1,060 Average Salary & Benefits ($) 240,515 274,530 359,696 293,477 398,865 298,276 165,817 218,546 DentalNision ($) Workers' Comp ($) Non -salary Benefits (5) ($) Isolate Holiday Pay from Salary Category Salary, includes holidays ($) Holidays (assumes 11, 9 hour days) ($) Salary, excludes holidays ($) Notes: 146,040 168,792 192,979 138,280 216,944 143,732 93,208 117,759 6,951 8,034 139,089 160,759 9,185 6,582 183,794 131,698 10,326 6,841 4,436 206,618 136,891 88,772 5,605 112,154 (1) Salary is calculated at actual pay rate (base pay and special pays, as applicable) as of February 2019 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 59.4% (PAPOA - 3.5%), while MGMT and SEIU Employees will pick up 1% of the 35.6%. (4) Annual amount incurred for active employees (normal cost only). (5) Non -salary Benefits include professional development for Mgmt, Utilities Mgmt, FCA and PMA; tuition reimbursement for FCA and PMA; and management excess benefit for Mgmt, Utilities Mgmt, FCA and PMA. Does not include administrative fees for General Benefits and Workers' Compensation Funds. CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 43 CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE by Fund 700 600 500 — 400 — 300 — 200 — 100 — FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 ■General Fund FTE ■ Enterprise Fund FTE Other Funds FTE 44 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW 10 Year Trend - General Fund FTE Positions vs. Population Growth 1,075.60 63,', 67,082 1,034.85 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 General Fund FTE Population CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 45 CITY OF PALO ALTO MAJOR CAPITAL PROJECTS Description The combined Fiscal Year 2020 Adopted Capital Budget, which includes the Capital Improve- ment Funds, Enterprise Funds, and Internal Service Funds, is $191.5 million, a decrease of $29.7 million, or 13.4%, compared to the Fiscal Year 2019 Adopted Capital Budget of $221.2 million. The overall 2020-2024 Capital Improvement Program (CIP) is $750.8 million, an increase of $3.8 mil- lion, or 0.5%, compared to the 2019-2023 CIP of $747.0 million. Funding by Fund Type - $750.8 Million internal Service Funds, 17 Projects $29.4 M Capital Project Funds, 105 Projects $348.2 M Enterprise Funds, 96 Projects $373.2 M 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 2020 Adopted Capital Budget, please visit the City's website at www.cityofoaloalto.org/budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 47 MAJOR CAPITAL PROJECTS laFund, Project Title, & Description Airport Fund: Airfield Electrical Improvements (AP -19001) mit AIL $0 $4,320,000 $4,320,000 FY 2020 Five -Year Total Budget CIP Cost Project Cost This project provides funding for electrical and lighting improvements to the airfield. Operating Impact This project is anticipated to have operating expenses related to pavement maintenance. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Airport Fund: Airport Apron Reconstruction (AP -16000) $140,000 $16,750,000 $41,987,056 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 operating expenses related to pavement maintenance for asphalt slurry seal estimated every five years. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Americans With Disabilities Act Compliance (PF-93009) 111.-1 $827,020 $2,971,020 Recurring This project provides funding for accessibility upgrades to City facilities and equipment. It includes continued funding for improvements such as path of travel, restroom upgrades, drinking fountains, and counters. This funding will also be utilized for other CIP project design or construction phases where accessibility improvements are identified. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Animal Shelter Renovation (PE -19002) $2,928,100 $2,928,100 $3,741,279 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 There are no additional operating impacts anticipated from this project. Maintenance costs at the facility will be covered by Pets In Need as stipulated in the agreement with the City. Capital Improvement Fund: Art in Public Spaces (AC -86017) I $1,102,443 $2,721,464 Recurring This project provides funding for innovative public art for both interior and exterior public spaces in accordance with the City Council -approved Art in City Capital Improvement Projects ordinance. Operating Impact Annual funding in the amount of $30,000 for public art maintenance is allocated to the Community Services Department in the General Fund. Capital Improvement Fund: Baylands Flood Protection Levu $1,048,000 $1,048,000 $1,353,765 Improvements (PE -17006) 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 48 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Fu d Pro'.ect Title , & Descri FY 2020 Budget Five -Year Total CIP Cost Project Cost Capital Improvement Fund: Bicycle and Pedestrian Transportation Plan Implementation (PL -04010) $2,090,000 $11,140,000 Recurring This project provides funding for the design and construction of bicycle boulevards, enhanced bikeways, shared -use paths, bicycle parking, and pedestrian improvements in accordance with the Palo Alto Bicycle and Pedestrian Transportation Plan, which was adopted by City Council in 2012. 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. There may be increased operating impacts due to ongoing maintenance of protected and separate bikeways. Certain types of bikeways may require special equipment or services to maintain them. The amount of impacts are unknown at this time. Capital Improvement Fund: Byxbee Park Completion (PE -18006) I $382,620 $3,042,620 $3,599,999 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 cycles. Capital Improvement Fund: Cardiac Monitor Replacement (FD -20000) $850,000 $850,000 $850,000 This project provides funding for the replacement of the entire compliment of 20 cardiac monitors in the Department. Along with other tools needed for patient assessment and airway verification, cardiac monitors assess cardiac activity in patients and provide defibrillation and pacing. These are required by State and County Emergency Medical Services (EMS) laws for all Advanced Life Support (ALS) units. All Fire Department engines, trucks, ambulances and other apparatus are designated as ALS units and require cardiac monitors as standard equipment. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Costs for future replacements will be budgeted according to a replacement cycle of 5-8 years. Capital Improvement Fund: Charleston/Arastradero Corridor Project (PE -13011) $6,305,200 $6,305,200 $19,600,066 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 were explored. The conceptual design and California Environmental Quality Act (CEQA) review for the entire corridor was completed in September 2015 and the National Environmental Protection Act (NEPA) was completed in October 2016. Final design for the corridor was completed in Fall 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: Churchill Avenue Enhanced Bikeway (PL - 14000) $3,075,000 $3,075,000 $3,372,057 This project includes planning, design and construction of a shared -use path along the north side of Churchill Avenue between the existing shared -use path at Castelleja Avenue and the Stanford Perimeter Trail. It also includes intersection improvements at Churchill Avenue and El Camino Real, which will include a new dedicated westbound right -turn lane. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 49 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2020 Budget Five -Year Total CIP Cost Project Cost Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Churchill Avenue/Alma Street Railroad Crossing Safety Improvements (PL -20000) $513,000 $4,814,000 $4,814,000 This project provides funding for the design and construction of pedestrian and bicycle safety improvements on the west side of the Churchill Avenue and Alma Street railroad crossing intersection. Design includes, but is not limited to, traffic signal modifications, street lighting improvements, roadway resurfacing, sidewalk realignment and/or widening, drainage improvements, utility relocations, signage and striping, innovative bicycle treatments, traffic calming elements, and way - finding improvements. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: City Facility Parking Lot Maintenance (PE $1,014,511 $3,612,511 Recurring 09003) This project provides funding for the repair, resurfacing, or reconstruction of parking lots and walkways at various City facilities, including restriping and signage. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Downtown Automated Parking Guidance T = Systems, Access Controls, and Revenue Collection Equipment $1,189,000 $2,587,000 $2,847,403 (PL -15002) alb This project provides funding to address infrastructure and capital improvements for parking facilities. This includes a facility management system, lane equipment, lane access controls, and pay -on -foot pay stations. This project includes design and installation of new downtown parking guidance systems, access controls and revenue collection equipment that will be coordinated with the Downtown Parking Wayfinding project (PL -15004). This project includes cameras in garages for added security for patrons. Operating Impact The ongoing operating costs for cameras and other equipment is not know at this time; however, as these costs are quantified, adjustments will be brought forward in the next budget cycle. Capital Improvement Fund: El Camino Real Pedestrian Safety and Streetscape Project (PL -18000) 1 $823,000 $6,349,750 $6,481,553 The El Camino Real Pedestrian Safety and Streetscape Project will install improvements focused on pedestrian safety at controlled and uncontrolled crosswalks, enhanced bus operations at two existing major transit stops, and new urban design amenities between Stanford Avenue and Sheridan Avenue. The project includes: Curb extensions; median refuges; median shade trees; pedestrian scale lighting and potential bus enhancement. Operating Impact The maintenance costs are unknown at this time; however, as these costs are quantified, adjustments will be brought forward in the next budget cycle. 50 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS 7_111WPIPIMPIP' FY 2020 Budget Five -Year Total CIP Cost Project Cost Capital Improvement Fund: Embarcadero Road at El Camino Real Improvements (PL -15001) $0 $1,076,000 $7,470,938 This project provides funding for the 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Facility Interior Finishes Replacement (PF $1,176,856 $2,816,705 Recurring 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Fire Station 3 Replacement (PE -15003) $280,000 j $280,000 $10,080,281 • 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 $7,450 in FY 2020 and increase by 3% annually thereafter. Capital Improvement Fund: Fire Station 4 Replacement (PE -18004) $850,000 $10,200,000 $10,200,000 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 J Overpass Project (PE 11011) This project provides funding for a new pedestrian/bicycle bridge across Highway 101 at Adobe Creek. $11,250,000 $11,250,000 $18,698,763 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. Maintenance and repairs will be provided through a maintenance agreement between the City and Caltrans which is still be negotiated. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 51 MAJOR CAPITAL PROJECTS Five -Year Total CIP Cost Project Cost Capital Improvement Fund: Junior Museum and Zoo (JMZ) Renovation (AC -18001) $1,775,160 $1,909,658 $3,318,052 This project provides funding to relocate the Palo Alto Junior Museum & 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 to 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 This project is anticipated to impact operating expenses in the future. Additional staffing, exhibit, maintenance, and custodial costs are expected to have a net impact of approximately $128,000 in FY 2021. Additional costs will be partially offset by increased revenues at the newly rebuilt facility. Costs are expected to rise annually at least 3% due to increasing costs of goods and services each year. Capital Improvement Fund: Municipal Service Center A, B, and C Roof Replacement (PF-17000) $1,991,000 $2,072,000 $2,146,289 This project provides funding for a fluid, reinforced waterproofing 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Municipal Service Center Lighting, ir Mechanical, and Electrical Improvements (PF-16006) $6,265,223 $6,265,223 $7,218,763 This project provides funding for the replacement of original mechanical and electrical systems and lighting installed in 1966 in the Municipal Service Center's (MSC) Buildings A, B, and C. The project also includes the renovation of office space and shop areas in Building C. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: New California Avenue Area Parking Garage (PE -18000) $1,280,000 $1,280,000 $50,149,943 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 $113,300 in FY 2021 and increase by 3% annually thereafter. Capital Improvement Fund: New Downtown Parking Garage (PE -15007) I 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 Waverley 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. $0 $26,600,000 $29,097,382 52 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ■ MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2020 Budget Five -Year Total CIP Cost Project Cost Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $88,700 in FY 2023 and increase 3% annually thereafter. Capital Improvement Fund: New Public Safety Building (PE -15001) $0 $107,760,000 $115,526,714 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 $335,000 in FY 2022 and increase by 3% annually thereafter. Capital Improvement Fund: Newell Road/San Francisquito Creek Bridge Replacement (PE -12011) $2,712,069 $2,712,069 $4,704,856 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 (JPA) initial flood protection project as well as bicycle and pedestrian traffic. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Parking Management and System Implementation (PL -16002) $1,171,000 $1,171,000 $1,287,123 This project provides funding for the design and installation of the Comprehensive Parking Permit and Citation Management System. The all-inclusive system is a management tool staff will utilize in the management of parking permits for seven parking permit programs and associated on and off-street parking citations. Operating Impact The permit and citation system is designed to cover its own costs. No operating impacts are anticipated. Capital Improvement Fund: Quarry Road Improvements and Transit Center Access (PL -16000) $513,000 $3,849,000 $5,148,378 This project provides funding for the planning, design and construction of bicycle and pedestrian improvements along Quarry Road between El Camino Real and Welch Road, including, but not limited to, upgraded bicycle lanes and crosswalks, innovative intersection treatments for bicyclists, and improved access to transit stops. Planning, design, and construction of a new bicycle, pedestrian, and transitway between the Palo Alto Transit Center bus depot and the intersection of Quarry Road and El Camino Real has been completed. Operating Impact Street and landscaping maintenance of the street connection would be supported by the Public Works Department's operations fund. Costs are still being determined and will be brought forward as part of the next budget cycle. Capital Improvement Fund: Railroad Grade Separation (PL -17001) $4,108,000 $9,458,000 $12,330,936 This project, Connecting Palo Alto, is a community -based process to 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, if any, will depend upon the grade separation alternative selected. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 53 MAJOR CAPITAL PROJECTS Capital Improvement Fund: Rinconada Park Improvements (PE - 08001) FY 2020 Budget Five -Year Total CIP Cost Project Cost $2,364,529 $2,455,529 $4,680,678 This project provides funding for upgrades to safety, site amenities, playground facilities, irrigation, drainage and accessibility improvements at Rinconada Park. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Roofing Replacement (PF-00006) $675,914 $3,681,605 Recurring This project provides funding for ongoing roofing maintenance at various City facilities including major repairs, rehabilitation, replacement, roof deck, drainage systems, and sheet metal repair/replacement. Roofs scheduled for replacement are based on an annual evaluation of their condition. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Sidewalk Repairs (P0-89003) $1,533,576 $8,389,576 Recurring 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 was completed in Spring 2019 and provided suggestions for establishing goals and priorities related to repairs and replacements throughout the City. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Street Maintenance (PE -86070) $9,864,243 $34,796,243 Recurring This project provides funding for annual resurfacing, slurry sealing, crack sealing, and reconstruction of various City streets. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Traffic Signal and Intelligent Transportation $2,356,500 $5,772,500 Recurring Systems (PL -05030) This project provides funding for the design and construction of traffic signals, traffic signal communications 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Ventura Building Improvements (PE - 15011) $1,968,597 $1,968,597 $2,527,420 This project provides funding to replace or upgrade the mechanical and electrical systems and provide accessibility improvements to the Ventura Community Center facility. To comply with the Americans with Disabilities Act, accessibility improvements are included; these needs are typically addressed concurrently with City -planned projects. Operating Impact 54 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Descripti• FY 2020 B4D:• • z -- Five -Year Total CIP Cost Project Cost There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Water, Gas, Wastewater Office Remodel (PE -19001) 1 ■ $755,000 $755,000 $757,737 This project provides funding for minor renovations to the Utilities Water Gas Wastewater (WGW) office space at the Municipal Service Center (MSC). The current space no longer meets the operational needs of the department. This project will reconfigure the space so it is more efficient for department operations and replace aging furniture and finishes such as cubicle furniture, carpet, paint, and lighting. Enclosed offices may be demolished and relocated. Additionally, electrical, mechanical (HVAC), and fire systems work will be required. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Cubberley Property Infrastructure Fund: Cubberley Repairs (CB - 17001) $774,162 $1,211,162 Recurring This project provides funding to make repairs and minor improvements at the Cubberley Community Center. Work completed under this project may include items such as painting, sidewalk repairs, breezeway pavement resurfacing, landscaping improvements, minor equipment replacement, and improvements to interior finishes. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Cubberley Property Infrastructure Fund: Cubberley Track and Field Replacement (CB -19000) $1,882,300 $1,882,300 $1,891,389 This project provides funding for replacement of the synthetic turf field for multiple sport use, the surrounding track to an all-weather surface, and the existing bleachers and for the addition of a new multi -generational fitness area. Operating Impact This project may impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Electric Fund: Coleridge/Cowper/Tennyson 4/12kV Conversion (EL $830,000 I $930,000 $980,000 14000) This project will convert the primary electric distribution system in the Coleridge/Cowper/Tennyson area from 4kV to 12kV. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Colorado Power Station Equipment Upgrades (EL $600,00) $600,000 $3,300,000 19001) This project will replace aging peripheral equipment used on the substation transformer banks at the Colorado Power Station. The Colorado Power Station is the 115kV/60kV transmission side of the Colorado Substation, which transforms the electricity to a lower voltage for distribution. Operating Impact There are no additional operating impacts anticipated from this project. Normal maintenance costs that will be absorbed within the available maintenance schedule and annual budget. Electric Fund: Colorado/Hopkins System Improvement (EL -15000) $568,000 $3,568,000 $3,568,000 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 55 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2020 Five -Year Total Budget CIP Cost Project Cost This project will replace deteriorating equipment, which will increase system capacity and improve service reliability for the areas served by the Hopkins and Colorado substations and adjacent substations. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: East Meadow Circles 4/12kV Conversion (EL -17001) , $800,000 L$966,000 $1,014,995 This project will convert the primary electric distribution system in the East Charleston/Alma Street/East Meadow Drive/ Middlefield Road area from 4kV to 12kV. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Electric Customer Connections (EL -89028) I $2,400,000 $12,450,000 Recurring 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Electric System Improvements (EL -98003) $1,500,000 $7,500,000 Recurring This project provides funding, as needed, to improve the Electric Distribution System. Typical activities include: increasing system capacity for load growth, replacing deteriorated capital facilities, reconfiguring/adding to the system to improve service reliability, repairing and replacing storm damaged equipment, and making general improvements to the system. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Facility Relocation for Caltrain Modernization (EL -17007) $4,049,701 $4,049,701 $4,110,000 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Hopkins Substation 4/12kV Conversion (EL -20000) I $100,000 $5,693,000 $5,693,000 This project will fund the conversion of the distribution system connected to the Hopkins Substation from 4kV to 12kV. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Rebuild Underground District 20 (EL -14002) $1,530,000 $1,530,000 $1,539,965 This project will rebuild and replace the underground electric system in Underground District 20. Work will include the replacement of deteriorated electrical cables, transformers, and enclosures. Installation of new equipment will bring the electrical system up to current construction standards. Operating Impact 56 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS FY 2020 Fund, Project Title, & Descriptii= Five -Year Total CIP Cost Project Cost There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Rebuild Underground District 26 (EL -16000) 1 $799,000 • $799,000 $800,330 This project will rebuild and replace the underground electric system in Underground District 26. Work will include the replacement of deteriorated electrical cables, transformers, switches, and enclosures. Installation of new equipment will bring the electrical system up to current construction standards. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Smart Grid Technology Installation (EL -11014) A $886,000 $12,886,000 $20,066,110 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Substation 60kV Breaker Replacement (EL -17002) j $720,000 $3,120,000 $3,413,180 This project funds the purchase and replacement of high voltage circuit breakers that interconnect the nine electric substations and two power switching stations. There are 25 circuit breakers reaching the end of their recommended reliable useful life expectancy and/or are now underrated for the use. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Wood Pole Replacement (El -19004) $1,500,000 $7,500,000 Recurring This project will fund the annual replacement of deteriorated wood poles. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Fiber Optics Fund: Fiber Optics System Rebuild (FO -16000) $775,000 $1,075,000 $1,292,156 This system capacity improvement project rebuilds portions of the fiber system around Palo Alto, which, in turn, licenses dark fiber to companies providing telecommunication services to residents 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 system that are at or near capacity. This will allow the Utilities Department to meet customer requests for service connections. The main rebuild project areas are the Stanford Research Park, the Palo Alto Internet Exchange (PADS at 529 Bryant Street, and the downtown business district. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Gas Fund: Gas Main Replacement - Projects 23 to 25 (GS -13001, I $850,000 $23,850,000 $34,064,579 GS -14003, GS -15000) 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. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 57 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2020 Budget Five -Year Total CIP Cost Project Cost Operating Impacts There are no additional operating impacts anticipated from these projects. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Gas Fund: Gas System, Customer Connections (GS -80017) $1,342,415 $7,127,067 Recurring 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Stormwater Management Fund: Corporation Way System Upgrades and Pump Station (SD -21000) $231,000 $3,126,000 $3,166,000 This project provides funding for the design of a new small pump station with 25 cubic feet per second capacity and the 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 with costs for electricity to serve the pump station; future routine inspections; and maintenance of the mechanical, electrical, and fiber operating systems. As these costs are quantified, and if the department determines they cannot be absorbed within the available maintenance schedule and annual operating budget, adjustments will be brought forward in future budgets, as necessary. Stormwater Management Fund: Loma Verde Avenue Trunk Line Improvements (SD -19000) $2,340,000 $2,340,000 $2,680,913 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Stormwater Management Fund: Storm Drain System Replacement and Rehabilitation (SD -06101) $1,704,481 $3,941,481 Recurring 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 58 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Technology Fund: City Council Chambers Upgrade (TE-19001) $1,700,000 $1,700,000 $1,700,00 On December 17th, 2018, the City Council approved upgrading the City Council Chambers without using a phased approach as recommended by the Finance Committee. Funding will be used to upgrade outdated electronic equipment that has become unsupportable in City Council Chambers. This will help address technical issues and ensure compliance with Americans with Disabilities Act (ADA) requirements. This project will: - Replace and upgrade outdated audio/visual equipment and make the City Council Chambers ADA compliant. - Upgrade the City Council Chambers broadcast booth, overhead display equipment, and dais equipment (including a supportable voting system). - Make the City Council Chambers broadcast booth compliant with ADA and State regulations. - Obtain adequate support, maintenance, and warranty for all equipment. - Integrate the City Hall Lobby Video Wall, Community Meeting Room, and Council Conference Room with new City Council Chambers equipment to enable viewing and/or broadcasting. Operating Impact Operating costs have not been determined at this time as the RFP has not been released. Technology Fund: Enterprise Resource Planning Upgrade (Reserve) $4,672,400 $4,672,400 $4,950,000 (TE-19000) This project provides funding to upgrade the existing Enterprise Resource Planning (ERP) system and Customer Information System (CIS) to better meet the City's needs. Operating Impact Annual licensing fees of $350,000 are anticipated to begin in FY 2021 for this project once the ERP system is upgraded, which is approximately $100,000 more than the current licensing costs. Vehicle Replacement Fund: Scheduled Vehicle and Equipment Replacement - Fiscal Years 2017 to 2024 (VR-17000, VR-18000, VR-19000, VR-20000, VR-21000, VR-22000, VR-23000, VR- 24000) $6,572,242 $20,537,242 $28,521,408 These projects provide funding for the scheduled replacement of existing City fleet vehicles and equipment. Operating Impacts Costs to operate and maintain the City's fleet are budgeted annually in the Vehicle Replacement Fund and allocated to other City departments based on historical maintenance and repair needs. There are no additional operating impacts anticipated from these projects and maintenance will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Collection Fund: Sewer Lateral/Manhole Rehabilitation and Replacement (WC -99013) $921,500 $4,341,500 Recurring This project will replace defective sewer laterals, cleanouts, and manholes; install backwater devices; and purchase equipment to support these activities in order to maintain the Wastewater Collection System. Information collected during routine annual maintenance activities is used to prioritize work. Defective laterals, for example, will be replaced to re-establish existing services, reduce maintenance expenses, and eliminate ground water intrusion. Backwater devices will be installed to reduce backflows of sewage. New manholes will be installed or rehabilitated to improve structural integrity. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 59 MAJOR CAPITAL PROJECTS FY 2020 Budget Five -Year Total CIP Cost Project Cost Wastewater Collection Fund: Wastewater Collection System Rehabilitation/Augmentation Projects 24 to 33 (WC -11000, WC - 13001, WC -15001, WC -16001, WC -17001, WC -19001, WC - 20000, WC -21000) $6,581,316 $20,881,316 $42,764,195 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 There are no additional operating impacts anticipated from these projects. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Advanced Water Purification Facility (WQ-19003) $11,113,000 $23,216,000 $23,246,073 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 such as utilities, janitorial services, and alarm/ security systems. Once the design, including features and square feet, is complete, costs will be quantified and adjustments will be brought forward in future budgets. Wastewater Treatment Fund: Headworks Facility Replacement (WQ $0 $15,807,221 $27,485,442 16002) iliw This project provides funding for replacing influent pumping, including the suction and discharge piping, pipe manifolds, valves, the electrical and controls system, screening equipment, grit handling equipment, the force main to the primaries and modifying headworks building, and yard piping. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: New Laboratory and Environmental $1,357,993 $21,747,993 $22,767,993 Services Building (WQ-14002) 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 such as utilities, janitorial services, and alarm/ security systems. Once the design, including features and square feet, is complete, costs will be quantified and adjustments will be brought forward in future budgets. Wastewater Treatment Fund: Outfall Line Construction (WQ-19000) '$3,890,000 $8,219,000 $8,219,000 This project consists of the construction of a new parallel outfall pipe to convey final plant effluent to San Francisco Bay. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Plant Repair, Retrofit, and Equipment Replacement (WQ-19002) $4,951,019 $18,075,019 Recurring 60 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGE' MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2020 Budget Five -Year Total CIP Cost Project Cost This project provides funding for the assessment, repair, and retrofit of the RWQCP's concrete and metal structures; the replacement of necessary RWQCP 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, WQ80021, WQ-80022, and WQ-04011, will now be consolidated and budgeted in this one recurring project. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Primary Sedimentation Tank Rehabilitation (WQ-14003) $6,124,000 $17,251,000 $18,302,840 This project provides funding for new protective coatings on each of the four concrete primary sedimentation tanks and replacement of worn rotating parts. The tanks, installed in 1972, are 220 feet long by 41 feet wide and remove settleable solids and grease. The coating ensures reinforcing steel bars within the concrete are protected from penetrating corrosive sewer gases and extends the concrete's life another 30 years. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Secondary Treatment Upgrades (WQ- 19001) 846,300 $29,256,300 $30,763,109 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 elimination of the FFRs. The AS Aeration Basins will be subdivided with concrete walls creating 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 processes, 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 26 to 32 (WS -12001, WS -13001, WS -14001, WS -15002, WS -16001, WS -19001, WS- $7,284,245 $25,948,245 $64,230,370 20000) 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual budget. Water Fund: Water Meters (WS -80015) $1,325,000 $3,544,207 Recurring 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 61 MAJOR CAPITAL PROJECTS Water Fund: Water System Customer Connections (WS -80013) $750,000 $4,000,027 Recurring This project allows for improvements that include new main extensions, valves, domestic services, meters on upgraded services, backflow devices, fire services, and fire hydrants. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Water Fund: Water Tank Seismic Upgrade and Rehabilitation (WS - 09000) $4,868,532 $6,868,532 $11,728,033 This project will provide tank rehabilitation, seismic upgrades, and/or tank replacement 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 shut 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 There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 62 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 63 CITY OF PALO ALTO GENERAL FUND OVERVIEW Overview FISCAL YEAR 2020 GENERAL FUND LONG-RANGE FINANCIAL FORECAST As part of the annual budget process, a ten-year Long Range Financial Forecast (LRFF) is pro- duced through staff analysis; the LRFF projects the City's financials in the General Fund through both the near- and long-term horizons. The LRFF marks the beginning of the FY 2020 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 scenarios. At the November 28, 2018 Finance Committee meeting the Base Case financial forecast at the time reflected a gap in the General Fund of $2.8 million in FY 2020 and a range between annual deficits of up to $4.5 million to significant surpluses in the out years. This forecast was subsequently accepted by the City Council on March 4, 2019. The Base Case provides 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 20_' 2021 Total Revenue Total Expenditures $214,497 $227,108 $233,938 $241,315 $248,921 $256,571 $264,392 $273,133 $281,311 $290,856 $299,948 5.9% 3.0% 3.2% 3.2% 3.1% 3.0% 3.3% 3.0% 3.4% 3.1% $210,706 $229,916 $238,472 $244,508 $250,606 $255,948 $260,771 $266,655 $269,292 $274,424 $279,867 9.1% 3.7% 2.5% 25% 21% 19% 2.3% 1.0% 1.9% 2.0% Cumulative Net Operating Margin (One -lime) $47,036 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. ($2,807) ($1,727) $1,341 $1,508 $2,308 $2,998 $2,857 $5,541 $4,413 $3,650 $20,081 The economy is healthy at a national and local level. However, since the publication of the LRFF, heightened volatility and slower growth are both expected on the horizon. On the bright side, low unemployment rates are finally leading to stronger real average hourly earnings, near three percent, and the Federal Reserve's pivot to the sidelines on additional interest rate hikes is bringing down borrowing costs for consumers and businesses. Nationally, the 2018 calendar year national gross domestic product (GDP) was 3 percent; the fourth calendar quarter 2018 GDP declined to 2.2 percent while the national Consumer Price Index (CPI) grew 1.5 percent. The economy has gained, albeit at a slower pace, from a rebound in consumer spending, employment growth, and substantial tax cuts. The nation is operating at what is considered "full employment" levels, at 3.8 percent unemployment as of February 2019. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 65 GENERAL FUND OVERVIEW As of January 2019, California's unemployment rate went from 4.1 percent to 4.2 percent, the first increase since October 2010, and the unemployment rate for the Bay Area region was lower at 2.2 percent. Despite local housing and transportation challenges, companies continue to plan expansion in Palo Alto and neighboring communities. Compared to other regions in Cal- ifornia, the Bay Area experienced the strongest job growth at 2.2 percent in calendar year 2018 but is expected to slow in the short term. Although there is enough economic momentum to generate growth for the remainder of the calendar year, reports from the Center for Continuing Study of the California Economy, UCLA's Anderson School of Management, and Bank of the West Economics point to sharply lower economic growth in the short term. Bay Area job growth is anticipated to decelerate from 2 percent in 2019 to 0.6 percent in 2020. The founda- tions of the local economy -a stable housing market, diverse and favorable mix of business seg- ments, and academic and medical properties -still provide the City a bulwark against an economic downturn in the medium term. Included in the FY 2020-2029 Long Range Financial Forecast, staff expected tax revenues to grow into FY 2020 and for the economy to remain healthy. The LRFF assumed national gross domestic product (GDP) between 0.6 percent to 2.0 percent; unemployment to remain slightly below 4.0 percent, which is currently at the lowest level in a decade (3.8 percent); and the Cali- fornia Consumer Price Index (CCPI) was expected to grow nearly 2.0 percent with continued wage growth. Tax revenues were modeled parallel to the local economy for FY 2020 and were projected to be $9.1 million, or 7.2 percent, above estimates assumed in the FY 2019 Adopted Budget. In total, revenues were anticipated to increase by $12.6 million, or 5.9 percent from the FY 2019 Adopted Budget of $214.5 million to $227.1 million in FY 2020. Based on this Forecast, City staff continued to review and refine these projections to establish the FY 2020 Base Budget and provide direction to departments on the FY 2020 budget process as discussed in further detail below; guidance to prioritize spending was again critical to ensure financial stability. Looking forward, the City continues to face several pressures such as the 2014 Council approved Infrastructure Plan (including a new public safety building), the growing costs of pension benefits, and future labor negotiations for the City's employee units. The policy direction from the City Council regarding proactively addressing the pension obliga- tions, including the most recent direction to assume a lower discount rate in calculating pension costs, is contained in the Base Case Forecast model. If this new direction were excluded from the Base Case model, the General Fund would have reflected the tough choices and the hard work of the City during the FY 2019 budget process to structurally balance the budget. Through the LRFF, staff communicated that a cost -containment strategy is necessary to enable the City to continue to face critical choices to balance known and unknown financial challenges such as this change to more proactively address pension obligations, additional pro- grammatic needs, or an economic downturn. This review and planning remains critical since the City is facing many requests and has identified several key community -supported programs that would need additional 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/unknowns that were not included in the LRFF: New staffing and program requests; 66 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW • Grade separation; • 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; ▪ Operating and capital costs related to a new Junior Museum and Zoo facility; • Capital costs related to City assets managed by nonprofits such as Avenidas Senior Center, the Palo Alto History Museum, and the Ventura Child Care Center; and • Funding long-term pension and retiree healthcare liabilities beyond the additional Council direction included as part of the LRFF. FISCAL YEAR 2020 GENERAL FUND BUDGET Subsequent to the development of the Long Range Financial Forecast, staff further reviewed and analyzed all expense and revenue estimates in the General Fund to calculate the FY 2020 Base Budget. The details of proposals can be found throughout this document. Before that dis- cussion, significant base changes, which reflect the change in revenues/expenses to keep ser- vice levels constant or to incorporate policy direction from City Council issued after the LRFF, and their impact on the General Fund are discussed below: ▪ Increase in General Fund Tax Revenue estimates to reflect both current -year tracking as well as the most up-to-date estimates for anticipated growth in FY 2020. (Revenue increase of $3.9 million) • Salary and benefit cost changes, reflecting the employee population as of February 2019, as well as the agreement with SEIU, offset by the recognition of savings through CMR #9925 as approved by City Council in December 2018 ($0.5 million), the service delivery change for Animal Services from in-house employees to a public -private partnership with Pets In Need (PIN) ($0.9 million), and recognition of savings committed by the Police Department to fund the second year of the Palo Alto Peace Officers Association (PAPOA) contract ($0.4 million). (Expense decrease of $1.5 million) • Reductions in allocated charges associated with Utilities, as a result of anticipated rate changes, Information Technology, as a result of inclusion of a vacancy factor consistent with the General Fund and cost reductions, and Vehicle Replacement and Maintenance due to various service changes. (Expense decrease of $0.6 million) • Increases in contract services charges, which were generally consistent with estimates included in the LRFF, with the exception of the shift to a partnership model with PIN ($0.7 million) and increased costs with the golf course ($0.1 million); golf course expense estimates are offset by revenue. Some other notable contractual increases include shifting from use of certain pesticides like `Roundup' ($67,000), scheduled increases associated with the Crossing Guard contract ($0.1 million), and the annual escalation of the Human Services Resource Allocation Process (HSRAP) contracts consistent with CPI ($41,000). (Expense increase of $0.8 million) • Alignment of transfers, including increased transfers to the General Capital Improvement Fund commensurate with Capital Project funding needs and City Council directed use of funds ($1.6 million), decrease in transfer for Electric costs associated with Streetlights and GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 67 GENERAL FUND OVERVIEW Traffic signals ($0.6 million), and an increased transfer to cover the operating deficit in the Residential Preferential Parking program fund ($0.7 million). (Net expense increase of $1.7 million) This FY 2020 Adopted Budget includes General Fund revenue estimates of $232.1 million, an 8.2 percent, or $17.6 million, increase from the FY 2019 Budget. General Fund expenditures of $230.8 million reflect 9.5 percent growth over the FY 2019 Adopted Budget of $210.7 million. At this time, staff projects the FY 2019 Budget Stabilization Reserve (BSR) to end the year at approximately $41.4 million, or 18.3 percent of the FY 2019 Modified Budget expenditure levels. As discussed in the Reserves section of the General Fund Overview, this budget has a contribution to the BSR of $1.3 million to maintain the BSR at the City Council's target level of 18.5 percent of FY 2020 Adopted expenses of $230.8 million. This contribution represents the City's commitment to ensuring Fiscal Sustainability. If excess funding materializes for the BSR at the close of FY 2019, staff will return to City Council with recommendations for the use of that funding as appropriate. REVENUES Based on a continued growth of the regional economy, Fiscal Year 2019 year-to-date major tax revenue receipts, and the passage of Measure E increasing the Transient Occupancy Tax Rate to 15.5 percent, this budget assumes continued healthy growth in various tax revenues. The Fiscal Year 2020 Budget assumes increases to major tax revenue receipts by approximately $13.0 mil- lion, or 10.4 percent, from $125.2 million to $138.2 million when compared to the FY 2019 Adopted Budget. Growth in major tax revenues reflects over 75.0 percent of the change from the FY 2019 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 Fiscal Year 2019 and 2020. SALES TAX Sales taxes are projected to rise to $34.3 million in FY 2020, or 4.3 percent growth from the current FY 2019 estimates, 9.9 percent above FY 2019 Adopted Budget estimates. This revenue category is currently tracking above budgeted levels in FY 2019 and segments contributing to this growth include electronic equipment, restaurants, furniture/appliance, and automobile leases. Areas experiencing weak sales include department and drug stores. Strong personal income and spending growth and a larger share of consumer spending online drives this increase in revenue. At the same time, new and innovative retail formats have changed traditional brick and mortar platforms and have helped revive physical retail presence in some segments, specifically department stores. The weakening performance of department and drug stores could be a result of the nation transitioning from a shopping center country to online purchasing, therefore displacing tax revenue from traditional industry seg- ments to the county pool. Online sales tax that occurs in Santa Clara County but cannot be identified to a specific county jurisdiction are allocated to the county (sales tax) pool then dis- tributed 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 last four quarters' receipt of pool sales tax has been 7.2 percent. The City's sales tax consultant believes that online sales may reduce future retail sales growth by 1.0 percent annually. These trends will be monitored carefully since sales tax represents nearly 15.0 percent of General Fund revenue. 68 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW PROPERTY TAX Property tax represents 21.0 percent of total General Fund revenues. Over the three-year period from 2016-2018, property tax revenue has grown nearly 17.0 percent, from $36.6 million in FY 2016 to $42.8 million in FY 2018. The assessed valuation of residential and commercial parcels continues to steadily grow. In the last ten years, the assessed valuation growth rate peaked in FY 2017 at 9.2 percent, during this period the average growth rate was 6.1 percent and in FY 2019 it was 7.4 percent. The increase from the FY 2019 Adopted Budget to FY 2020 Adopted Budget is 7.3 percent, or $3.3 million. This percent increase is higher than the ten year com- pound annual growth rate of 6.4 percent. 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), most notably 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. August Sales Prices -Palo Alto August 2004 to August 2018 l.tediern Sal•s Pnre ($1,00t}'s) "Average Perceeitage 01 List Price Received 3229 3010 .i sou 250[! 2410 1658 1400 1405 1 1380 1798 1125 _ / 1175 171 0 9000 2004 20 05 2006 20 07 2000 20 099 2010 2011 2012 2013 2014 2015 2016 2017 2018 02'•, 101'S 103 r 104,1 100T 97'� 10 1', 10r'• 104`0 109% 10 8% 116°• 101% 105% 10$% NIS J5tricker,carn Data hum MLSListirkgs,cam GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 69 GENERAL FUND OVERVIEW August M arketActivaty- Palo Alto August 2004 10 August 2016 'Average Days on Market Inv entory Sales 2044 2045 2046 2007 2006 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 "35 24 36 26 43 55 32 22 18 21 17 11 22 23 17 tio24t9]Stricrer.com Data from MULAiting ,corn 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. City staff use historical growth rates and any available information on extraordinary transactions to inform property tax estimates. Included in this revenue category is excess Educational Revenue Augmentation Funds (ERAF), which aren't considered a permanent local revenue source. Though in FY 2019 ERAF receipt was $2.3 million, due to uncertainties including amount of future receipts, the FY 2020 Budget assumes $1.3 million in ERAF revenue. TRANSIENT OCCUPANCY TAX (TOT) In FY 2020, TOT revenue is expected to be $29.3 million,17.0 percent, or $4.3 million, above the FY 2019 Adopted Budget. This significant increase is due to the opening of three large hotels, the continuance of the recovering economy, and the passage of Measure E in November 2018, which raised the TOT rate from 14.0 percent to 15.5 percent. The latter is expected to generate $2.6 million in additional revenue annually. The average occupancy rate for the first eight months of FY 2019 was 76.7 percent of the rooms available and the average daily room rate for the same period was $277. These rates rep- resent a decrease of 0.9 percent and an increase of 4.7 percent, respectively, over the same period of the prior year. The addition of 361 rooms over the last five years due to the new hotels /renovations has somewhat constrained occupancy levels (an 80.0 to 85.0 percent occupancy rate represents full occupancy) but average daily room rates have risen and exceed those of prior years. The addition of more high -end hotels has enhanced this revenue source both for the General Fund and for the Infrastructure Plan (IP) project funding. 70 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW Revenues from the recent Measure E (a 1.5 percent TOT rate increase) and Measure B in FY 2014 (a 2.0 percent TOT rate increase) and revenue from new hotels are recommended to pro- vide funding for the 2014 City Council approved Infrastructure Plan. In FY 2020, the amount of TOT receipts that will be transferred to fund IP projects is $11.8 million. UTILITY USERS TAX (UUT) There are two components of UUT: telecommunications (aka phone) and the utility component. The utility component is comprised of the use of electric, water, and gas utilities. Total UUT rev- enues in FY 2020 are estimated to be $17.6 million, a $1.5 million, or 9.3 percent, increase above the FY 2019 Adopted Budget. The UUT revenue budget for FY 2020 includes the two changes approved by voters in November 2014: the telephone UUT rate reduction from 5.0 percent to 4.75 percent and the elimination of the large utility user discount. Utility receipts from the UUT are based on the Utilities Department's five-year revenue projec- tions. Utility commodity rate increases for FY 2020 are 8.0 percent for electric, 5.0 percent for gas, and 1.0 percent for water. For more information on these rate increases, please refer to the Enterprise Funds Overview of this document. DOCUMENTARY TRANSFER TAX (DTT) Overall, the Palo Alto housing market remains stable; however, the number of real estate sale transactions in the first nine months of FY 2019 is down by 14.9 percent and DTT receipts are down by 14.1 percent. The rising sales prices are slightly mitigating the decline in DDT receipts. Total DDT revenue in FY 2020 is estimated to be $8.4 million. This is a 16.8 percent, or $1.7 mil- lion decrease compared to FY 2015's high of $10.1 million. Revenue in FY 2015 was attributed to several major commercial transactions and such transactions don't occur frequently, therefore the FY 2020 forecast is in line with normal historical trends. 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 FY 2020 revenue levels to be consistent with the prior year, totaling $2.0 mil- lion. The largest source of revenue in this category is derived from parking violations ($1.2 mil- lion), which is not projected to change from FY 2019 to FY 2020. 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 2019 Budget revenue estimate of $28.0 million, the Fiscal Year 2020 Budget estimate increases $1.7 million, or 6.1 percent. A number of revenue adjustments have been made in the category from the FY 2019 Budget level. Key changes from the FY 2019 Budget are listed below by department: ▪ Community Services Department: $0.2 million increase, primarily driven by golf course estimates and adjustments to maintain cost recovery levels for various fees; . Fire Department: $0.5 million increase, due to anticipated adjustments to the Stanford Fire Agreement; GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 71 GENERAL FUND OVERVIEW ▪ Planning and Development Services: net $0.9 million increase, primarily due to alignment of revenues associated with the Development Center to ensure 100% cost recovery levels as well as adjustments to various municipal fees for planning activities to maintain cost recovery levels; and • Administrative Services Department: $0.2 million increase to reflect the reallocation of revenues associated with the Business Registry Certificate Program shifting from the former Development Services Department. The City has completed negotiations with Stanford University in regard to the provision of fire services to Stanford including an agreement of both service level and cost. This budget assumes reimbursement at levels consistent with this new agreement; however, the actual con- tract value may be subject to change as updates to fire service deployment included in this budget may necessitate renewed conversations with Stanford. Additional reimbursements from Stanford for Public Safety Dispatch Services are also budgeted resulting in a net reimbursement of $7.9 million. PERMITS AND LICENSES Permits and licenses consist of payments to the City for issuance of Building Permits, Fire Per- mits, and miscellaneous health and safety -related licenses. In comparison to the Fiscal Year 2019 Budget revenue estimate of $8.8 million, the FY 2020 Budget revenue estimate represents an increase of $0.1 million, or 1.4 percent, primarily due to adjustments in Planning and Develop- ment Services to maintain cost -recovery levels. RETURN ON INVESTMENT (ROI) Return on investment for FY 2020 is anticipated to be $1.4 million, an increase of $0.2 million or 19.0 percent over the FY 2019 Budget. The rising interest rates, aided by the Federal Open Mar- ket Committee (FOMC) raising rates by 1.0 percent in calendar year 2018, allowed staff to re- invest lower yielding maturing investments in higher yielding investments thus locking in higher interest earnings for the next several years. The trend of re -investing lower yielding securities maturing investments into higher yielding investments is expected to continue in the near future despite the recent decline in interest rates. RENTAL INCOME The largest source of rental income comes from the City's Enterprise Funds and the Cubberley Community Center. The FY 2020 Budget of $16.4 million reflects a $0.6 million, or 3.8 percent, increase from the FY 2019 Budget. Slight annual rental increases for Enterprise funded depart- ments at General Fund properties are based on an assessment of these properties that was conducted in Fiscal Year 2015, adjusted annually for cost of living increases, up to 3.0 percent annually. Another assessment is underway and the results will be incorporated into the develop- ment of future annual budgets. 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 72 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW charges increased by 8.1 percent, from $10.1 million in FY 2019 to $10.9 million in FY 2020. This increase is mainly attributable to the City Council direction to more conservatively budget pen- sion costs using a lower discount rate rather than the CaIPERS-provided actuarial data. 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; Public, Education, and Government (PEG) revenues from Cable Franchise Fees; and other one-time revenue sources such as grants. Revenues are anticipated to remain constant in FY 2020 at $1.2 million. OPERATING TRANSFERS -IN In comparison to the Fiscal Year 2019 Adopted Budget transfer -in amount of $19.8 million, the FY 2020 Adopted Budget of $21.0 million represents an increase of $1.2 million. The single larg- est component of this category is the equity transfer from the Enterprise Funds, which is increasing from about $19.3 million to $20.2 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 Council in June 2009, the equity transfer is calculated by applying a rate of return to the capital asset base of the Electric and Gas Funds. The rate of return is based on PG&E's rate of return on equity, as approved by the California Public Utilities Commission (CPUC). Additionally, in the operating transfers -in cate- gory the Airport Fund is scheduled to begin repayment of General Fund loans. $0.3 million is programmed to be transferred from the Airport Fund to the General Fund in this FY 2020 Adopted Budget. EXPENSES FY 2020 Budget expenditures in the General Fund total $230.8 million, representing a 9.5 per- cent increase from the FY 2019 Adopted Budget of $210.7 million. This increase is due to a num- ber of year -over -year changes, which are discussed in greater detail below. Some of the main components of the increase are the removal of the $4.0 million reduction programmed in FY 2019 and addressed by City Council through CMR #9925 in December 2018, the removal of one- time savings of approximately $2.0 million in the General Fund to Internal Service Funds in FY 2019, two years worth of labor contract costs (since labor contracts were not complete when the FY 2019 Budget was adopted), and the imposition of $3.8 million in additional proactive pension funding contributions at City Council's direction. SALARY AND BENEFITS Salary and benefit costs in the General Fund total $134.5 million; this represents a 7.3 percent increase from the FY 2019 Budget of $125.4 million. The main factors of the increase are the imposition of additional proactive funding contributions of $3.8 million to offset the City's long- term pension liabilities. If that additional contribution was excluded, the increase year -over -year would only be 4.0 percent. The increase includes labor agreements made in FY 2019 with Safety units and agreements with the Miscellaneous units in the General Fund. This year -over -year increase is dampened somewhat by position freezes throughout the General Fund totaling nearly $2.0 million in departments including: Administrative Services, Community Services, Fire, Planning and Development Services, and Police. The reduction of overtime proposed in the Fire GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 73 GENERAL FUND OVERVIEW Department associated with a change in service delivery also lessens the year -over -year growth. Lastly, the FY 2019 Budget contained a one-year subsidy of workers' compensation costs, drawing on accumulated fund balance in the Workers' Compensation Fund, which is reversed in this year's budget, contributing to the year -over -year increase in salary and benefits. The FY 2020 Budget deviates from the historical practice of calculating salaries and benefits. In addition to past practice - the agreed upon labor terms outlined in memorandums of agree- ment, CaIPERS-determined retirement contribution levels, and a vacancy factor in the General Fund - this year's budget includes the proactive pension funding contribution mentioned above. In the General Fund, this resulted in $3.8 million in additional contributions from various depart- ments and reflects what retirement costs would be if the "normal cost" of contributions was budgeted at a 6.2 percent discount rate (CaIPERS is currently at a 7.25 percent discount rate). These funds are to be transferred to the City's irrevocable pension trust fund, which will have a total of $22.0 million by the end of FY 2020, of which $14.3 million is from the General Fund. Salaries: In FY 2020, salaries are projected to grow by $1.0 million in the General Fund, repre- senting a 1.1 percent increase. The base increase in salaries would have been higher but for the cost containment strategies used in the General Fund. Some of the position eliminations include: 1.0 FTE Auditor (approved by the City Council in December 2018), 1.0 FTE Chief Sus- tainability Officer, and 6.54 FTE associated with Animal Services (these position reductions are partially offset by the addition of contractual costs but nonetheless result in a reduction in sal- ary). Additionally, numerous positions are being held vacant in the General Fund. These primarily one-time cost containment strategies slow the growth that would have otherwise resulted from raises associated with the various bargaining units as agreed to by City Council during FY 2019, subsequent to the adoption of the FY 2019 Budget. Pension Costs: Pension costs in the General Fund are increasing by 12.2 percent, from $24.6 mil- lion to $27.6 million, before contemplating the General Fund's proactive contributions to pre - fund the City's long-term pension liabilities. If the General Fund's $3.8 million in additional proactive pension contributions were to be incorporated into the analysis, the General Fund's costs would increase by 27.6 percent from $24.6 million to $31.4 million. The pension costs are driven primarily by two factors: CaIPERS and the City Council's direction to budget pension costs more conservatively than CaIPERS. CaIPERS has been lowering its rate of return assumption (discount rate) since FY 2019 when it went from a 7.5 percent discount rate to 7.375 percent. In FY 2020, CaIPERS used a 7.25 percent discount rate, and in FY 2021 it will use a 7.0 percent discount rate. From FY 2019 to FY 2020, the CaIPERS pension 'blended rate' for Miscellaneous went from 32.6 percent to 35.6 percent and Safety went from 55.6 percent to 59.4 percent of salary. In addition, City Council's direction to use a discount rate of 6.2 percent for calculating FY 2020's normal cost resulted in the per- centages increasing from CaIPERS provided 35.6 percent for Miscellaneous and 59.4 percent for Safety to 40.1 percent and 66.9 percent, respectively. These significant increases necessitated significant cost containment and service delivery evolution throughout the organization, espe- cially in the General Fund. For example, for every $100,000 of salary, an additional $4,500 to $7,500 was budgeted for this proactive funding. 74 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW Retiree Health: The City's Other Post -Employment Benefits (OPEB) costs, primarily Retiree Healthcare, are increasing from $8.8 million to $9.1 million, an increase of 3.4 percent. This is based on the June 30, 2017 valuation conducted by the City's outside actuarial consultant (Bar- tel) that was discussed in 2018 during the FY 2019 Budget Adoption (CMR #9213). The City is required to perform an actuarial review of its OPEB costs every two years and it is anticipated that the next review will be conducted in FY 2020, evaluating the City's OPEB liability as of June 30, 2019. Healthcare: Healthcare costs remain consistent from FY 2019 to FY 2020, in large part due to cost -containment strategies. Without the strategic cost containment strategies that were used, including position reductions, healthcare costs would have increased approximately 4.0 per- cent. The vacancy savings presumed for various positions also presumes their healthcare costs will result in savings, and the elimination of various positions throughout the organization, including the six benefited positions previously associated with Animal Services, also contrib- utes to the lessened year -over -year change. Other Benefits: Other benefits costs include special pays, long-term disability, Medicare, and management excess funding. These costs are consistent with FY 2019 levels, with greater retention pay for Police Officers offset by longer terms necessary to qualify for that retention pay. Workers' Compensation: The City is self -insured for Workers' Compensation. The Workers' Compensation Fund operates as an Internal Service Fund so the costs are recovered through allocated charges to departments. An outside consultant performs a valuation every year to inform the City's financial planning. Workers' Compensation costs are increasing year -over -year by $1.1 million, an increase of 43.1 percent. This significant increase is due to the one-time sav- ings that was realized in the FY 2019 Operating Budget. The FY 2019 Budget used previously accumulated fund balance in the Workers' Compensation Fund to subsidize the City's pay- ments, saving the General Fund $1.0 million. After adjusting for that one-time savings, the Gen- eral Fund's year -over -year increase is significantly less: 2.4 percent or $85,000. NON -DEPARTMENTAL EXPENSES Non -Departmental expenses include expenses that are not directly related to the operation of a single department, such as payments to the Palo Alto Unified School District (PAUSD) as part of the Cubberley Community Center lease, or debt service payments. In FY 2019, non -departmental expenses included funding associated with the City Council elec- tion held in November 2018, a one-time expense that is no longer included. In FY 2020, one- time funding is included for efforts related to ensuring the Downtown Business Improvement District Fund has adequate resources ($17,000), Airplane Noise ($0.1 million), Sea Level Rise ($50,000), recruitment and retention ($0.5 million), and a transfer to offset the operating defi- cit in the Residential Preferential Parking Fund ($0.7 million). As in prior years, ongoing funding is also included for costs associated with property tax collection, which is administered by the County of Santa Clara. There is also a reserve for anticipated expenses related to adjustments associated with labor agreements and other potential additional costs. A more detailed discus- sion of items in this category is included in the Non -Departmental section of this Budget. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 75 GENERAL FUND OVERVIEW 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. It is recommended that the remaining $100,000 in the Sustainability Contingency (originally $250,000) be reappropriated from FY 2019 to FY 2020 and used to fund sustainabil- ity efforts in the City Manager's Office and work on Sea Level Rise (budgeted elsewhere in Non - Departmental), while the remainder is anticipated to be available for other work related to sus- tainability. The other contingencies are maintained at levels previously approved by City Coun- cil with the exception of the City Manager's contingency. The City Manager's contingency is recommended to be reduced by $50,000, from $250,000 to $200,000. OPERATING TRANSFERS -OUT Funds are transferred from the General Fund to various funds throughout the City, including the Capital Improvement Fund, the Cubberley Property Infrastructure Fund, the Debt Services Funds, and the Technology Fund on an annual basis. In Fiscal Year 2020, a total of $33.9 million is included to be transferred, with the majority ($30.0 million) being transferred to the Capital Improvement Fund. As discussed above, a one-time operating transfer of $683,000 is included from the General Fund to the Residential Preferential Parking Fund to offset the operating defi- cit in that fund. The City will continue to evaluate the appropriate model and pricing for Resi- dential Preferential Parking districts as it establishes the Office of Transportation. The General Fund also transfers funds to the University Avenue Parking Fund to pay for employee parking permits; a total of $302,000 is included in FY 2020 for this purpose. This total includes the increased cost of employee parking permits recommended by the Finance Committee and dis- cussed in greater detail in the Special Revenue Funds Overview section of this budget. The Gen- eral Fund is also responsible for paying the electricity costs associated with streetlights and traffic signals. This is realized as a transfer to the Electric Fund of $2.1 million in FY 2020; this was lowered by $585,000 from initial FY 2020 estimates based on revised calculations from the Utilities Department. 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 to transfer any amount in excess of 18.5 percent to the Capital Improvement Fund Infrastructure Reserve at their discretion. The FY 2020 Budget includes a $1.3 million contribution to the BSR to ensure that it meets the City Council target of 18.5 percent. The FY 2020 Budget is projected to have a balance of $42.7 mil- lion in the Budget Stabilization Reserve, well within the targeted range. 76 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW General Fund t Budget Stabilization Reserve (BSR) Activity: BSR Other Reserve Activity: Human Services Resource Allocation Process (HSRAP) Reserve Encumbrance & Reappropriation Inventory of Materials & Supplies Notes Receivable, Prepaid Items, Interfund Advances, & Unrealized Gains and Losses Reserves FY 2018 Actuals FY 2019 Adopted Changes FY 2019 Net Adjustments Projected FY 2019 Year -End i 52,103 3,794 (14,480) 41,417 7,821 4,427 3,995 50 7,821 4,427 3,995 FY 2020 Adopted Budget Projected FY 2020 Year-end 1,292 42,709 50 7,821 4,427 3,995 Total Reserves = (14,480) 074710 1. The BSR is projected to be 18.5 percent of the FY 2020 Expense Budget at the end of FY 2020. 2. City reserve policy indicates a 15-20 percent range, with an 18.5 percent target. 3. Minimum FY 2020 BSR $34.6 million (15 percent); Maximum FY 2020 BSR $46.2 million (20 percent). 4. Target FY 2020 BSR $42.7 million (18,5 percent) 5. Projected FY 2019 adjustments, including budget amendments through March 2019. 6. This assumes the HSRAP Reserve will not be spentin FY 2019 and is recommended to be carried forward to FY 2020. General Fund Revenue Descriptions PROPERTY TAX Under current law, all taxable real and personal property is subject to a basic tax rate of 1.0 per- cent 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 2.0 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- GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 77 GENERAL FUND OVERVIEW 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 1.0 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 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, known as the Educational Revenue Augmentation Funds (ERAF), the state shifted millions of dollars in local government funds to school districts. As a consequence of this action, the City of Palo Alto has foregone a cumulative $124.0 million through FY 2019, 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 1.0 percent property tax. In fact, the City receives around 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 cents, goes to the school district, community college, and county school service, 15.9 cents goes to the county and the remainder 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 California Depart- ment of Tax and Fee Administration (CDTFA). TRANSIENT OCCUPANCY TAX (TOT) The Transient Occupancy Tax rate in Palo Alto is 15.5 percent and is applied to the daily rate charged by a hotel, motel, or other 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 per - 78 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW cent to 14.0 percent, effective as of January 1, 2015. In November 2018, Palo Alto voters passed Measure E, which raised the TOT rate from 14.0 percent to 15.5 percent, effective April 1, 2019. DOCUMENTARY TRANSFER TAX (DTT) 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 in addition to Palo Alto's tax. UTILITY USERS TAX (UUT) 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 4.75 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, Planning and Development Services, 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 Public Safety 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 Department's Communication and Dispatch Division. 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. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 79 GENERAL FUND OVERVIEW 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. 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 nonprofits 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). 80 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET General Fund Sales Taxes Property Taxes Transient Occupancy Tax Documentary Transfer Tax Utility Users Tax Other Taxes and Fines Charges for Services Permits and Licenses Return on Investments Rental Income From Other Agencies Charges to Other Funds Other Revenue Subtotal Operating Transfers -In Total GENERAL FUND OVERVIEW Revenue by Category -Y 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 29,923 31,091 31,246 34,346 3,100 39,381 42,839 45,332 48,634 3,302 23,477 24,937 25,049 29,309 4,260 7,491 9,229 7,434 8,369 935 14,240 15,414 16,092 17,581 1,489 2,167 2,141 2,032 2,032 0 21,989 26,344 28,015 29,719 1,704 7,714 9,035 8,949 9,076 127 1,209 1,437 1,166 1,388 222 15,767 15,969 15,806 16,399 593 1,156 1,461 1,150 980 (170) 10,439 11,476 10,093 10,908 815 2,300 2,513 2,361 2,362 1 177,253 193,886 194,725 211,103 16,378 19,222 20,385 19,772 20,999 1,227 196,475 214,271 214,497 232,102 17,605 FY 2020 Change % 9.9% 7.3% 17.0% 12.6% 9.3% 0.0% 6.1% 1.4% 19.0% 3.8% (14.8%) 8.1% 0.0% 8.4% 6.2% 8.2% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 81 GENERAL FUND OVERVIEW General Fund Revenue by Category 3 Year Trend -General Fund Revenues By Category ($000s) 60,000 50,000 40,000 30,000 20,000 10,000 ,,i ��� .__III ,,, -� III }e5 +e tea+ A.1t4 ��+ fig' ce' �e� �`' t. G ' ��`' , `ey $\ a� t`'`ie \`'�; ,�{` g `> ' "'''� * 6\ p"1' g k q, -e <Zc �0 acA �,` �a cpuz � -,t ¢ C7` ,c• o pi `c▪ � �yec `Q�� �{�ec bra Qcs. ems•• • e- 5 el, �c2 Q J Q ,R (Y,, �}}Q ■ FY 2018 Actuals ■ FY 2019 Adopted ■ FY 2020 Adopted $232.1 Million/FY 2020 Budget OperatingTransfers-In Other Revenue 1.0% Charges to Other Funds 4.7% From Other Agencies 0.4% Rental Income 7.1% Return on Investments 0.6% Permits and Licenses_/ 3.9% Charges for Services 12.8% Other Taxes and Fines 0.9% 9.0%_\ Sales Taxes 14.8% Utility Users Tax 7.6% Documentary Transfer Tax 3.6% P rope rty Taxes 21.0% Transient Occupancy Tax 12.6% Hi 82 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL FUND OVERVIEW General Fund Expenditures by Department FY 2017 Actuals FY 2018 Actuals Administrative Services 7,379 7,680 City Attorney 3,158 3,307 City Auditor 1,208 1,233 City Clerk 1,049 1,171 City Council 452 476 City Manager 2,412 3,248 Office of Sustainabilityl 478 465 0 Office of Transportation2 0 0 0 2,312 Community Services 25,200 27,136 28,915 30,913 Development Services3 11,014 12,023 12,561 0 Fire 31,530 33,639 31,826 34,864 Human Resources 3,314 3,480 3,634 3,945 Library 8,953 9,121 9,664 10,314 Non -Departmental 6,400 6,402 3,825 9,024 Office of Emergency Services 983 968 1,509 1,728 Planning and Development 8,654 7,859 8,791 20,3561 Services1 FY 2019 Adopted Budget FY 2020 Adopted Budget 7,963 3,263 1,258 1,282 488 4,386 8,518 3,387 1,235 1,346 498 4,546 0 FY 2020 Change $ FY 2020 Change % 555 7.0% 124 3.8% (23) (1.8%) 64 5.0% 10 2.0% 160 3.6% 0 N/A 2,312 N/A 1,998 6.9% (12,561) (100.0%) 3,038 9.5% 311 8.6% 650 6.7% 5,199 135.9% 219 14.5% 11,565 131.6% Police 39,206 39,983 41,951 44,667 2,716 6.5% Public Works 16,655 18,396 18,492 19,172 680 3.7% Subtotal 168,045 176,587 17,808 196,825 17,017 9.5% Transfer to Infrastructure 22,859 24,801 25,173 28,962 3,789 15.1% Operating Transfers -Out 6,572 4,734 5,725 5,023 (702) (12.3%) Total 197,476 206,122 210,706 230,810 20,104 9.5% 1 The Office of Sustainability was combined with the City Manager's Office in FY 2019 2 The Office of Transportation is established in FY 2020 as part of this Budget. 3 The Development Services Department is combined with the Planning and Community Environment Department in FY 2020 to form the Planning and Development Services Department GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 83 GENERAL FUND OVERVIEW General Fund Expenditures by Category IR= FY 2017 Actuals FY 2019 FY 2018 Adopted Actuals Budget FY 2020 Adopted FY 2020 Budget Change $ FY 2020 Change % Salary & Benefits 115,608 120,798 125,404 134,546 Contract Services 19,436 21,144 22,041 23,429 Supplies & Material 3,723 3,350 3,563 3,366 General Expense 9,971 10,062 6,125 12,090 Debt Service 432 432 613 0* Rents & Leases 1,345 1,560 1,690 1,734 Facilities & Equipment 685 399 522 771 Allocated Charges 16,845 18,842 19,850 20,889 Subtotal 168,045 176,587 179,808 196,825 Transfer to Infrastructure 22,859 24,801 25,173 28,962 Operating Transfers -Out 6,572 4,734 5,725 5,023 Total 197,476 206,122 210,706 230,810 9,142 1,388 (197) 5,965 (613) 44 249 1,039 17,017 3,789 (702) 20,104 7.3% 6.3% (5.5%) 97.4% (100.0%) 2.6% 47.7% 5.2% 9.5% 15.1% (12.3%) 9.5% *In prior years, debt service was paid from the General Fund. Beginning in FY 2020, debt service payments are occurring from funds other than the General Fund. These payments are reflected in their respective funds and these expenses are now reflected as "Operating Transfers -Out" in the table above. 84 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET General Fund Expenditures by Category 3 Year Trend - General Fund Expenses By Category ($000s) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 III ___ ._■ 111 e `te`' �``�� t`e ,\� ye5 e�w fey ctet5 Jte 0�` sec �e� � Set a �.�� rat apy t�e� et`' L 5� 04* � 99- et\ �Q yea eta •c` �a� hoc .QP (.)e' Q� v�eh �o wo \cco c�J `�• P itet a� Fa •ta�5 Oet • FY 2018 Actuals ■ FY 2019 Adopted • FY 2020 Adopted $230.8 Million/FY 2020 Budget Transr rs 14.7' -N Allocated Charges 9.1% Facilities & Equipment 0.3% Rents & Leases 0.8% General Expense 5.2% Supplies & Material 1.5% Contract Services 10.2% Salary & Benefits 58.3% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 85 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 87 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, Stormwater Management, 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 2020 is $388.0 million, which is $32.9 million or 9.3 percent, higher than FY 2019. This overall increase is largely due to FY 2020 revenues in the Wastewater Treatment Fund expected to increase by approximately $24.1 mil- lion from FY 2019 as a result of funding sources programmed for multiple capital improvement projects beginning in FY 2020. Utility services with rate increases for FY 2020 include Electric, Fiber Optics, Gas, Stormwater Management, Wastewater, and Water. Refuse rates will remain the same for FY 2020. Details on these changes are discussed below. EXPENDITURES The total budgeted expenditure of the Enterprise Funds for FY 2020 is $430.2 million, which is $37.7 million, or 9.6 percent higher than FY 2019. The primary driver for this year over year change is the rising costs for commodities, capital improvement projects, and maintaining or updating the infrastructure. UTILITY RATE CHANGES FY 2020 Budget includes utility rate adjustments for Electric, Gas, Stormwater Management, Wastewater Collection, and Water charges. The average monthly residential utility bill is expected to increase by 5.0 percent or $15.65 from $312.15 to $327.80. In general, the size and timing of rate adjustments take into account current and future revenue requirements, capital projects and reserve levels. They may also smooth the impacts on cus- tomer bills by spreading rate adjustments during consecutive or alternate years. ▪ Electric Fund - Scheduled rate increase is 8.0 percent overall to fund rising transmission costs, new renewable projects coming online, reductions in customer usage, and substantial capital investment and replacement in the electric distribution system. • Gas Fund - Scheduled rate increase is 5.0 percent due to increasing construction costs for gas main replacements and the Crossbore Gas Safety Program. • Water Fund - Scheduled rate increase is up to 1.0 percent due to rising capital costs for water main replacements and seismic improvements for reservoirs. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 89 ENTERPRISE FUNDS OVERVIEW • Wastewater Collection Fund - Scheduled rate increase is 7.0 percent due to significant increase in wastewater collection system capital project costs, as well as increases in treatment costs due to rehabilitation of the aging Regional Water Quality Control Plant. • Fiber Optics Fund - Scheduled rate increase is 4.5 percent, based on Consumer Price Index (CPI) for All Urban Consumers in the San Francisco Bay Area, for customers on the EDF-1 rate. ▪ Stormwater Management Fund - Scheduled rate increase of 4.5 percent, or $0.63 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 2020. 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 at an annual CPI increase of 3.9 per- cent. As a result, the rent for FY 2020 will increase by approximately $0.4 million compared to FY 2019. EQUITY TRANSFERS In FY 2009, the City Council adopted a change to 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 2020, the equity transfers from the Electric and Gas Funds are projected to increase by approximately $1.0 million from $19.3 million to $20.2 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 cus- tomers in the form of lower future rates or used to pay for expenses, which also result in lower future rates. Based on the actions included in this budget, the total Enterprise Fund Reserve Balances are estimated to decrease by $42.0 million from FY 2019 to FY 2020. 90 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2020. 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 2020 electric rates are scheduled to increase by 8.0 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 are higher in FY 2020 and FY 2021 due to reloca- tion of overhead lines for Caltrain, completion of 4kV to 12kV conversion projects, the unex- pected replacement of transformer 2 at Colorado Power Station, 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 Electric Special Projects Reserves. Gas FY 2020 gas rates are scheduled to increase by 5.0 percent due to increasing capital and oper- ation costs. Gas Utility expenses are projected to increase by roughly 9.0 to 7.0 percent annually from FY 2020 to FY 2022 and 3.0 to 1.0 percent annually from FY 2023 through FY 2024. In the short term, some increases in operations costs are related to the Crossbore Gas Safety Program, but CIP costs have increased substantially as the economy has improved. Future CIP project 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, and recent market prices have been increasing steadily as supplies have become tighter and demand has decreased. Current forecasts project commodity cost increases of around 4.0 percent annually. Water FY 2020 water rates are scheduled to increase by 1.0 percent due to increasing capitals costs. The main driver for the increase over the next several years is the large one-time capital costs in FY 2020 related to reservoir rehabilitation and additional costs required to switch water meters to be read automatically with AMI. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 91 ENTERPRISE FUNDS OVERVIEW Wastewater Collection FY 2020 wastewater collection rates are scheduled to increase by 7.0 percent. Capital and oper- ating costs are anticipated to increase for the wastewater collection system. In addition, CPAU 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, pro- jected rate increases range from 6.0 to 8.0 percent annually through FY 2024 and 3.0 to 4.0 percent annually for FY 2025 and beyond. Fiber Optics Fiber optics rates are scheduled to increase by 4.5 percent for customers on the EDF-1 rate schedule in FY 2020. 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 2020 refuse rates remain unchanged. FY 2021 rates are projected to increase at a rate based on CPI, which corresponds with the end date for two Refuse Fund related agreements for waste processing and disposal. The 2018 Zero Waste Plan was accepted by City Council which includes 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. Stormwater Management FY 2020 Stormwater Management fee is scheduled to increase by 4.5 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 Stormwater Management 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 services with the goals of reducing stormwater runoff and maintaining stormwater quality protection for discharge to creeks and the San Francisco Bay. 92 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ENTERPRISE FUNDS OVERVIEW 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. FY 2020 revenues in the Wastewater Treatment Fund are expected to increase by approxi- mately $24.1 million or 69.8 percent compared to FY 2019. The majority of the increase resulted from funding sources programmed for multiple capital improvement projects beginning in FY 2020. The construction of the Dewatering and Loadout Facility was completed in FY 2019, and the incinerators were shut off. The net result of this change will increase operating expenses for utilities and contract services; however, this change will reduce greenhouse gas emissions to align with the City's sustainability goals. 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 $63,500 in FY 2020. The Airport's fees and charges are scheduled to increase by 4.5 percent. Expenses are also projected to increase due to major construction proj- ects that incur costs which are 90.0 percent offset by grants from the Federal Aviation Admin- istration. To ensure sufficient 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 since the City took over operations. The Airport Fund will begin repayment to the Gen- eral Fund in FY 2020 in the amount of $272,000 annually. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 93 ENTERPRISE FUNDS OVERVIEW Enterprise Funds Summary Fund Summary ($000) Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Rental Income Return on Investments Total Expenses Allocated Charges Contract Services Debt Service Equity Transfer Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Salary & Benefits Supplies & Material Transfer to Infrastructure Utility Purchase Capital Improvement Program Total Electric Fund 380 140 154,329 2,616 8,928 2,158 168,551 10,434 7,615 8,477 13,129 Gas Fund 20 101 37,279 1,124 802 39,326 5,033 2,463 803 7,106 Water Fund 10 83 577 46,831 548 384 1,153 49,586 5,220 819 3,223 Refuse Fund 34 161 30,662 2,311 518 33,686 1,863 6,356 196 64 19 17 3 3,442 763 658 112 - 410 136 55 6,277 852 3,145 2,161 16,887 7,282 7,864 3,028 Wastewater Treatment Fund 54 30,661 27,409 4 389 58,517 5,594 3,739 1,469 8 389 156 Wastewater Collection Fund 10 32 21,106 1,083 298 22,529 3,043 249 129 Stormwater Management Fund 118 7,449 3 226 7,795 1,059 908 949 Airport Fund Fiber Optics Fund 655 4,595 1,009 200 778 21 750 2,463 5,545 Total 572 569 577 333,567 3,164 42,448 7 778 6,315 387,999 670 747 33,664 141 455 22,744 15,245 - 20,235 13 8 - 2 133 123 274 480 13,728 3,127 924 489 611 143 2,070 381 - - - 73 - 95,678 16,012 22,178 24,611 11,234 23,765 3,343 16,973 - 28,282 8,258 186,693 44,575 60,845 38,601 55,434 27,311 146 36 37 281 12 5,682 102 1,452 50 12 82 13,058 2,187 905 1,390 56,398 95 56 9 4,777 - 73 - 169,713 4,506 346 1,525 86,999 9,944 2,447 4,325 430,175 94 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGEI ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND- ENTERPRISE FUNDS REVENUES BY FUND ($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 Fund WW WW Stormwater Airport Fund Fiber Optics Treatment Collection Management Fund Fund Fund Fund _ FY 2018 Actua Is FY 2019 Adopted FY 2020 Adopted FY 2020 REVENUES/$388.0 MILLION Electric Fund $168.6/43.4% Fiber Optics Fund $5.5/1.4% Airport Fund $2.5/0.6% Stormwater Management Fund $7.8/2% WW Collection Fund $22.5/5.8% Gas Fund $39.3/10.1% Water Fund $49.6/12.8% Refuse Fund $33.7/8.7% WW Treatment Fund $58.5/15.1% ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 95 ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS EXPENSES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Electric Fund Gas Fund Water Fund Refuse Fund WW Treatment Fund WW Stormwater Airport Fund Fiber Optics Collection Management Fund Fund Fund FY 2018 Actuals FY 2019 Adopted FY 2020 Adopted Electric Fund $186.7/43.4% Fiber Optics Fund $4.3/1% Airport Fund $2.4/0.6% Stormwater Management Fund $9.9/2.3% FY 2020 EXPENSES /$430.2 MILLION Gas Fund $44.6/10.4% Water Fund $60.8/14.1% Refuse Fund $38.6/9% WW Treatment Fund WW Collection Fund $55.4/12.9% $27.3/6.3% 96 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Electric Fund Rate Stabilization Operations Hydro Stabilization Electric Special Projects Public Benefit Underground Loan CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve FY 2019 Projected Ending Balance Subtotal Gas Fund Rate Stabilization Operations CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal 0 40,112 7,400 41,838 0 730 880 (29, 511) (14,168) 47,281 6,363 6,981 3,820 (13,277) (6,235) (2,348) FY 2020 Changes 0 (18,143) 0 FY 2020 Projected Ending Balance 0 FY 2020 Reserve Guideline Range 21,969 23,231 - 46,462 7,400 0 41,838 0 0 0 0 730 880 0 (29,511) 0 (18,143) (6,363) 1,114 0 (14,168) 29,138 0 8,095 5,410 - 10,821 3,820 0 (13,277) 0 (5,249) (6,235) (7,597) Wastewater Collection Fund Rate Stabilization 0 0 0 Operations 7,647 (3,804) 3,843 2,904 - 7,260 CIP Reserves 978 (978) 0 GASB 68 Pension Reserve (7,449) 0 (7,449) GASB 75 OPEB Reserve Subtotal (2,384) (1,208) 0 (4,782) (2,384) (5,990) ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 97 ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Water Fund Rate Stabilization Operations CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal Refuse Fund Rate Stabilization Landfill Corrective Action Reserve CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal Stormwater Management Fund Rate Stabilization CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal Wastewater Treatment Fund Rate Stabilization Emergency Plant Replacement Notes and loans CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal FY 2019 Projected Ending Balance 4,069 37,602 2,726 (12,455) (4,350) 27,592 FY 2020 Changes 0 (11,258) 0 0 0 (11,258) FY 2020 Projected Ending Balance 4,069 26,344 2,726 (12,455) (4,350) 16,334 FY 2020 Reserve Guideline Range 7,045 - 14,119 16,891 (4,919) 11,972 6,292 - 12,584 741 3 744 268 0 268 (5,114) (2,653) 10,133 2,412 0 (3,189) (1,158) (1,935) (10,123) 1,980 559 0 (18,584) (7,340) (33,508) 0 0 (4,916) (2,150) 0 0 0 (2,150) 3,083 (5,114) (2,653) 5,217 262 0 (3,189) (1,158) (4,085) (7,040) 0 1,980 0 559 0 0 0 (18,584) 0 (7,340) 3,083 (30,425) 4,196 - 8,392 98 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Fiber Optics Fund Rate Stabilization Emergency Plant Replacement CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve FY 2019 Projected Ending Balance 30,626 1,000 0 (1,855) 0 FY 2020 Changes 1,218 0 0 0 0 FY 2020 Projected Ending Balance 31,844 1,000 0 (1,855) 0 FY 2020 Reserve Guideline Range 444 - 887 Subtotal 29,771 1,218 30,989 Airport Fund Rate Stabilization (2,597) CIP Reserves 0 GASB 68 Pension Reserve (493) GASB 75 OPEB Reserve (431) Subtotal (3,521) 16 0 0 0 (2,581) 0 (493) (431) 111M (3,505) TOTAL RESERVES 72,257 (42,181) 30,076 Summary of Reserves Emergency Plant Replacement 2,980 Hydro Stabilization 7,400 Rate Stabilization 47,641 Operations 92,342 CIP Reserves 8,672 Electric Special Projects 41,838 Public Benefit 0 Notes and loans 559 Underground Loan 730 Landfill Corrective Action Reserve 741 GASB 68 Pension Reserve (91,927) GASB 75 OPEB Reserve (38,719) TOTAL RESERVES 72,257 Landfill Postclosure Care Liability 6,825 TOTAL RESERVES AND FULLY - FUNDED LIABILITY 79,082 0 0 (9,194) (32, 091) (978) 0 0 0 0 3 0 0 2,980 7,400 38,447 60,251 7,694 41,838 0 559 730 744 (91,927) (38, 719) (42,181) 30,076 150 6,975 (42,031) 37,051 i ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 99 ENTERPRISE FUNDS OVERVIEW Residential Monthly Utility Cost Information Electric Gas Water Wastewater Refuse Storm Drain User Tax Adjusted FY 2019 Bill1 54.33 58.48 86.59 38.66 50.07 14.05 9.97 FY 2020 Bill 57.31 63.39 90.42 41.37 50.07 14.68 10.56 $ Difference 2.98 4.91 3.83 2.71 % Difference 5.48% 8.40% 4.42% 7.01% 0.63 4.48% 0.59 5.92% Total Monthly Bill 312.15 327.80 15.65 5.01% 1. FY 2020 Rates are effective July 1, 2019. 100 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET John Lucas GREER Ciy, of Pato A 'ARK' t CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 101 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 Workers' Compensation and General Liability. Over the past few years, fund balance had 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 was not sustainable, and is only recommended on a one-time basis. The restoration of allocated charges is reflected in each of the department sections in the `Budget Summary' and the 'Budget Reconciliation', most notably in the 'Dollars by Category' section. GENERAL BENEFITS FUND This fund reflects costs for a variety of employee benefits including pension, health, dental, vision, and life insurance. Funds are also included for payments made to employees who elect to waive healthcare coverage under a City plan because they have other coverage. As discussed in the overview of this fund that appears in the 'Employee Information' section, costs for employee health benefits as well as pension benefits are projected to increase in Fiscal Year 2020 and will be allocated out to departments and funds in proportion to their share. In addi- tion, the FY 2020 Adopted Budget incorporates City Council's direction to make additional con- tributions to the City's irrevocable IRS Section 115 Pension Trust Fund. The General Benefits Fund displays 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 2020, costs are projected to increase compared to the Fiscal Year 2019 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 2020 ADOPTED OPERATING BUDGET 103 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, infrastructure, and maintenance activities for all City depart- ments. The overview for the Information Technology Department contains information about projects and activities for Fiscal Year 2020. 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 2020, $6.7 million is allocated for vehicles and equip- ment that are due for replacement. Of the $6.7 million, $3.1 million is for the continuation of proj- ects approved by City Council in prior fiscal years. The 2020-2024 Capital Improvement Program (CIP) reflects funding totaling $21.1 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 2020, costs are projected to increase slightly compared to the Fiscal Year 2019 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. 104 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 Technology Fund Printing and Mailing Services 9,192 14,409 1,720 2,137 155 103 - 260 644 2 9,607 17,294 1,723 Allocated Charges 1,263 1,722 360 Contract Services 518 5,140 240 221 7 72 6,197 Facilities & Equipment - 868 - - - - 868 General Expense 71 475 287 - 650 2,900 - 4,383 Operating Transfers 185 31 9 2,197 2,422 Out Rents & Leases 202 389 513 - 1,104 Salary & Benefits 2,264 8,833 242 73,947 6,081 16,473 107,839 Supplies & Material 1,428 85 80 - - - - 1,593 Transfer to 1,460 1,460 Infrastructure General Benefits Fund Workers' Compensation Program Fund General Liabilities Insurance Program Fund 2,477 5 75,701 5,481 41 433 540 168 76,134 6,021 2,691 Retiree Health Benefit Fund Total 27,799 2,197 4,339 14,214 95,695 47 2,095 16,458 129,929 3,345 Capital Improvement 6,685 7,893 - - 14,578 Program Total 14,075 25,436 1,731 76,364 6,738 2,972 16,473 143,789 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 105 INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Reserves Vehicle Replacement and Maintenance Fund Technology Fund Printing and Mailing Services General Workers' Liability Benefits Compensation Insurance Fund Program Fund Fund Retiree Total Health Internal Benefit Service Fund Funds Changes to Unrestricted Assets June 30, 2019 Projected Unrestricted Assets 10,300 AllallEMIIE312 3,153 37,148 (4,468) (8,142) (9) FY 2020 Adopted Changes (230) (717) (280) (15) (13,861) June 30, 2020 Projected Unrestricted Assets 5,832 3.111 U L _..3138 23,287 106 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 107 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 FY 2014 to support the City's Public Art Program. The program seeks to increase the public's daily exposure to art through the commissioning and acquisition of a diverse range of artworks inte- grated into the City's urban environment. The Public Art Program strives to build the City's rep- utation as a dynamic public art locale with works of diverse styles, disciplines, and the highest aesthetic standards. Funding for the Public Art Program is determined by the Municipal Code's direction of 1 percent for Art in Private Development. Construction projects in excess of 10,000 square feet that require Architectural Review and have an estimated construction value of more than $200,000 have the option of commissioning artwork on the development site equal to the cost of 1 percent of the estimated construction valuation or paying the 1 percent to the Public Art Fund. In FY 2020, the projected revenue for the Public Art Fund is $0.2 million and includes a transfer of $170,000 from the General Fund to comply with requirements that limit the amount of administration costs that can be funded through fees. Additionally, although not accounted for in this fund, the City requires that for certain City -funded capital projects a 1 per- cent public art expense is set aside (please refer to the FY 2020 - 2024 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 Community Development Impact Fee Funds is $0.7 million in FY 2020, primarily reflecting anticipated receipts in the Park Impact and Parkland Dedication Funds. The FY 2020 - 2024 Capital Improvement Plan includes a transfer of $3.2 mil- lion from Community Center Impact Fees for Rinconada Park Improvements ($2.0 million) and renovations to the Junior Museum and Zoo ($670,000). Additionally, the Capital Improvement Plan includes a transfer of $500,000 from Park Impact fees for park restroom installations SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 109 SPECIAL REVENUE FUNDS OVERVIEW ($350,000) and dog park installation and renovation ($150,000). 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 2018 annual report ending June 30, 2018, is included in CMR 9913 found here: https://www.cityofpaloalto.org/civicax/filebank/documents/ 68452. 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 $3.0 million for FY 2020. This level of receipts remains relatively constant to the prior year and includes adjustments to Highway Users Tax Account (HUTA) allo- cations and the new S.B. 1 transportation funding bill, effective July, 1, 2017. In FY 2020, it is anticipated that the City is allocated a total of $1.2 million in revenue from the Road Mainte- nance and Rehabilitation Account (RMRA) and $80,000 from State General Fund loan repay- ments. In FY 2020, $2.6 million is programmed to be transferred to the Capital Improvement Fund for various citywide transportation projects that include projects for street maintenance and safe routes to school. The City achieved its primary goal of reaching a citywide average Pavement Condition Index (PCI) score of 85 in 2018, three years earlier than the initial goal; however, fund- ing is maintained through the 2020 - 2024 Capital Improvement Plan in order to work towards the City's secondary street maintenance goal of having no streets under a PCI score of 60. FEDERAL AND STATE REVENUE FUNDS The Federal and State Revenue Funds consist primarily of Community Development Block Grant (CDBG) funds.The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (HUD) as an entitlement city under the CDBG program. This is the principal Federal program that provides funds to the CDBG Program to expand and main- tain affordable housing supply, promote housing opportunities, improve and maintain commu- nity facilities, and increase economic opportunities for persons of low and moderate income. CDBG project expenditures draw upon program income and prior year allocations that have been unspent. The FY 2019-20 CDBG action plan includes an allocation of $725,000 as confirmed by HUD and approved by the City Council on May 6, 2019 (CMR 10192). The associated resolution (no. 9830) can be found here: https://www.cityofpaloalto.org/civicax/filebank/blobd- load.aspx?t=67158.01&BloblD=71966. A more detailed presentation of the FY 2020 Budget for the CDBG Fund is available at the end of the Special Revenue Funds Overview section. 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. 110 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW For FY 2020, $2.3 million in in -lieu fees are anticipated. These estimates remain constant from FY 2019 and are based on historical tracking and Planning and Development Services (PDS) Department staff projections. Annually, the Administrative Services Department issues a report of the activities in these funds including the remaining balances within them. The 2018 annual report ending June 30, 2018, is included in CMR 9913 found here: https://www.cityofpaloalto.org/civicax/filebank/documents/ 68452. As of June, 30, 2018, approximately $13.7 million remained available 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 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) costs. As of FY 2020, five neighborhoods are active in the RPP program to mitigate parking congestion in Palo Alto neighborhoods: College Terrace, Downtown, Evergreen Park/Mayfield, Crescent Park, and SouthGate. This FY 2020 budget recommends establishing a separate Office of Transportation (OOT) situ- ated in the City Manager's Office. Transportation was previously a division in the Planning and Development Services Department; this change is in recognition of the significant need to develop and implement strategies that address the City Council priority to resolve traffic and transportation challenges. In consultation with Municipal Resources Group (MRG), staff evalu- ated the current transportation initiatives, staffing, and Council and community goals and rec- ommended this separation as well as additional resources that would be necessary in order to successfully support transportation initiatives. This FY 2020 budget recommends the addition of a net 2.0 position additions to this newly established OOT, which is primarily organized around the reallocation of 14.62 FTE from the Planning and Development Services Department. Analysis from the outside consulting assistance recommended the addition of a net four posi- tions, including a public information officer, however, staff has not recommended the addition of these additional resources at this time. Included in the net 2.0 positions additions recom- mended are 1.0 FTE Parking Manager to oversee shuttle and parking programs, as well as 1.0 FTE Senior Engineer to oversee transportation planning and capital improvement projects. Additional information about the establishment of OOT can be found in the subsequent section for City Departments within the City Manager's Office. As recommended by the Finance Committee and adopted by the City Council, this FY 2020 budget also includes a 7.5% increase to Employee Parking Permit rates to generate additional funding to the Transportation Management Association (TMA). The funding for TMA is fully expensed out of the University Avenue Fund; however, prices are recommended to increase across all parking funds in order to maintain the alignment of the Residential Parking Permit (RPP) Districts with the Downtown and California Avenue garages and remove incentive for permit holders to park in residential areas due to lower permit pricing. In total, Employee Park- ing Permit rates are recommended to increase from $750 to $806 per year in University Avenue and Downtown RPP district and from $375 to $403 per year in California Avenue, Evergreen SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 111 SPECIAL REVENUE FUNDS OVERVIEW Park/Mayfield RPP district, and Southgate RPP district. A more detailed presentation of parking fees can be found in the FY 2020 Municipal Fee schedule. This FY 2020 Adopted Budget includes the following significant proposals: • Net zero reallocation of 3.60 FTE positions ($500,000) and non -salary expenses ($4.2 million) for the operational costs of various parking programs from PDS to OOT to fully transition resources that administer the various parking programs ($0); • Add 1.0 FTE Parking manager (Transportation Planning Manager) to oversee parking and shuttle programs citywide. The total cost of this position is $265,000 and is recommended to be equally allocated 50% to the OOT General Fund Operating Budget and 50% to parking funds ($132,500); • 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, $34,000 one-time); ▪ $270,000 increase in funding to the Transportation Management Association (TMA) to support the reduction of single occupancy vehicles (SOV) rates in Palo Alto, from $480,000 to $750,000 in total ($180,000 ongoing, offset by parking permit increases); ▪ Increase permit sales revenue estimates by $180,000 in University Avenue, $21,000 in California Avenue, and $37,000 in Residential Parking Permit Funds to reflect parking permit increases; • Increase in revenues of $683,000 recognizing an operating subsidy transfer from the General Fund to the RPP Fund to cover an operating deficit in FY 2020 ($683,000 one- time); and • Capital improvement investments in FY 2020 through a net transfer of $1.5 million to the General Capital Improvement Fund. Major projects funded in FY 2020 include: Parking Management and System Implementation ($1.1 million); University Avenue Parking Improvements ($343,000); and Downtown Parking Wayfinding ($40,000). Additional project details can be found in the FY 2020 - 2024 Adopted Capital Improvement Plan. 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 work to establish the new OOT and will continue to develop and implement potential strategies for the organization and scaling of a comprehensive parking strategy. In order to strategically manage existing proj- ects 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 crit- ical vacancies and assess the various programs. A more detailed presentation of the FY 2020 Budget for the University Avenue Parking District Fund and California Avenue Parking District Fund is available at the end of the Special Revenue Funds Overview section. 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 - 112 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW lieu fees result from commercial projects in assessment district areas, which contribute a fee for parking spaces in lieu of providing the required spaces within the project area itself. In FY 2020, $0.3 million in traffic mitigation and parking in -lieu fees are anticipated. These estimates remain steady with 2019 revenues and are based on historical tracking and Office of Transportation (OOT) staff projections. The FY 2020 - 2024 Capital Improvement Plan includes a transfer of $1.3 million in FY 2020 for improvements to traffic signals to be funded by remaining balances in the funds of $5.03 million. Of note, the City Council approved recommendations on April 22, 2019 (CMR 9531) to phase out all but one of the area -specific transportation impact fees and transition to a single Citywide fee. The FY 2019 Municipal Fee schedule was amended to reflect this change and staff will con- tinue to monitor the associated revenues over the next fiscal year for necessary adjustments. The full staff report detailing these actions can be found here: https://www.cityofpaloalto.org/ civicax/filebank/documents/70517. 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 economic revitalization and physical maintenance of the Palo Alto Downtown business district. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association (PADBPA), a non-profit corporation, as the Advisory Board for the BID to advise the Council on the method and basis for levy of assess- ments in the BID and the expenditure of revenues derived from the assessments. In prior years, the BID has focused on street cleanliness, creating a safe downtown, and providing events and communication tools that bring business downtown. Annually, the PADBPA issues an action plan for the upcoming period for City Council review and approval. The FY 2019-20 BID action plan includes a budget of $105,000 as approved by the City Council on June 24, 2019 (CMR 10315) and found here: https://www.cityofpaloalto.org/civi- cax/filebank/documents/72074. Included in the action plan is a $17,000 transfer from the Gen- eral Fund to the BID Fund for consultancy services to collect assessments. 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 2014 City Council approved Infrastructure Plan. As outlined in the agreement, expenses and revenues for each category must be accounted for separately. SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 113 SPECIAL REVENUE FUNDS OVERVIEW Annually the Planning and Development Services Department, formerly the Planning and Com- munity Environment Department, issues a report of activities during the prior period for Council review to ensure compliance with the agreement. The annual report for the 2016-2017 period is included in CMR 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 beginning balance in this category is $2.7 million. There are no planned transfers in FY 2020 to the FY 2020 - 2024 Capital Improvement Plan. Stanford Hospital Expansion Cost Mitigation: Funds are being held in this category for the pur- pose of assuring that City costs associated with the project do not exceed revenues to the City. The projected 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 beginning balance in this cat- egory is $1.2 million. The FY 2020 - 2024 Capital Improvement Plan includes a $200,000 trans- fer in FY 2020 for planning, design, and construction costs associated with Quarry Road pedestrian and bicycle connections. 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 in 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 beginning balance in this category is $10.5 million. There are no planned transfers in FY 2020 to the FY 2020 - 2024 Capital Improvement Plan. Climate Change: Funds are to be used for projects and programs for a sustainable community, including programs identified in the City's Climate Action Plan, The projected beginning balance for this category is $2.7 million. The FY 2020 - 2024 Capital Improvement Plan includes a $1.2 million transfer in FY 2020 for the Bicycle and Pedestrian Plan -Implementation Project. Staff intends to return to the Finance Committee during FY 2020 to strategize the use of uncommitted funds from the SUMC development agreement. A more detailed presentation of the FY 2020 budget for the Stanford University Medical Center Fund is available at the end of the Special Revenue Funds Overview section. 114 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW Special Revenue Summary by Fund Type Fund Summary ($000) Revenues Charges for Services From Other Agencies Net Sales Public Art Fund Com. Dev. Funds Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses 200 673 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 276 1,149 - - - 2,983 500 - - - 3,483 1,958 1,958 170 - 17 - - - 1,064 - - 1,251 - - - 2,345 - 136 - - - 2,481 - 333 - 333 Property Taxes - 140 Rental Income 9 9 - 2,650 - - 2,650 140 Return on 11 246 - 297 12 5 80 199 325 1,175 Investments Total 381 919 157 2,651 2,995 641 6,086 475 325 14,630 Expenses Allocated Charges 2 1 2 287 292 Contract Services 17 247 2,455 2,719 General Expense 1 - 148 53 - 635 799 - - 1,636 Operating - - - - 364 - 129 - - 492 Transfers -Out Salary & Benefits 208 59 87 1,557 1,912 Supplies & - - - - - - 121 - 121 Material Transfer to 3,171 2,554 1,528 1,283 1,400 9,937 Infrastructure Total 211 3,171 165 360 2,918 725 6,876 1,283 1,400 17,109 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 115 SPECIAL REVENUE FUNDS OVERVIEW Consolidated Special Revenue Funds Fund Summary ($000) FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget REVENUES Gas Tax 1,304 1,858 2,891 2,983 Federal CDBG 803 363 393 500 107 Housing In -Lieu 2,234 1,145 2,150 2,150 Traffic Mitigation Fees 376 3,077 276 276 Developer Impact Fees 736 1,296 673 673 - Parking Mitigation Fees 3,282 3,643 4,728 4,941 213 BID Assessment 97 72 140 140 - SUMC - 11,745 - - Interest Income 1,526 1,525 1,185 1,175 (10) (0.84) Other Revenue 898 717 375 540 165 44.00 11,256 25,440 12,811 13,379 568 4.43 FY 2020 Change $ FY 2020 Change % Subtotal Revenue Transfers In General Fund Technology Fund Utility Admin Fund Subtotal Operating Transfers In Total Source of Funds 443 12 24 479 11,735 426 21 48 495 25,935 453 24 47 524 13,335 1,173 26 52 1,251 14,630 92 720 2 5 727 1,295 3.18 27.23 4.51 158.94 8.33 10.64 138.74 9.71 EXPENDITURES General Expense 4,306 22,031 8,439 6,679 (1,760) (20.86) SUMC 33 - - - - - 4,339 22,031 8,439 6,679 (1,760) (20.86) Subtotal Expenditures Transfers Out General Fund Capital Improvement Fund General Benefits Subtotal Operating Transfers Out Total Use of Funds Net To (From) Reserves 461 14,865 15,326 19,665 (7,930) 739 10,696 11,435 33,465 (7,530) 500 26,377 13 26,890 35,329 (21,994) 492 9,937 10,429 17,109 (2,479) (8) (16,440) (13) (16,461) (18,221) 19,516 (1.58) (62.33) (100.00) (61.22) (51.58) (88.73) 116 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW Community Development 3lock Grant Community Development Block Grant Fund SOURCE OF FUNDS Housing & Urban Development, current year Prior Year Excess/Reallocation Program Income Palo Alto Housing Corporation TOTAL SOURCE OF FUNDS 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 Subtotal: Public Service FY 2019 Adopted Budget FY 2020 Agency Requests 484,816 49,569 FY 2020 Adopted Budget 499,868 88,661 136,049 - 136,049 578,296 30,933 48,283 10,000 10,000 10,000 10,000 44,933 46,575 5,032 28,826 87,078 143,684 724,578 31,831 10,000 5,000 31.832 12,000 90,663 Planning and Administration Project Sentinel/Fair Housing Services City of Palo Alto - CDBG Administration includes 0.10 FTE & 0.48 Hourly CDBG Administrative Staff Subtotal: Planning and Administration 32,012 33,698 73,733 85,000 Housing, Economic Development, Capital Projects, & Public Facilities Downtown Streets Team/Workforce Development Community Working Group - Opportunity Center Rehabilitation MayView Community Health Center Subtotal: Housing, Economic Development & Capital Projects 37,940 89,243 105,745 118,698 127,183 331,002 336,400 54,471 150,000 361,473 145,259 385,473 486,400 506,732 TOTAL USE OF FUNDS 578,296 748,782 724,578 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 2020 ADOPTED OPERATING BUDGET 117 SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Func Revenues Permit Sales Day Passes Ticket Machine Transfer from Other Funds for City Share Investment Income FY 2019 Adopted Total Revenue Expenditures Administration Positions Salaries & Benefits Contract Staffing Parking Occupancy Services Miscellaneous Supplies Ticket Machine (bankcard services, transmission, maintenance) Subtotal Administration Maintenance Positions Salaries & Benefits Supplies Twinkle/Tree Lights Landscaping Maintenance (garage, elevator, fire sprinkler) Custodial (janitorial services, power washing, sweeping) Steam Cleaning Subtotal Maintenance Police Patrol Positions Salaries & Benefits Subtotal Patrols FY 2019 Adjusted 2,217,000 675,000 215,000 354,000 21,800 2,217,000 675,000 215,000 354,000 21,800 3,482,800 3,482,800 1.18 1.18 189,541 189,541 182,248 182,248 77,031 77,031 21,048 21,048 20,790 20,790 490,658 490,658 3.87 3.87 495,785 495,785 60,090 60,090 30,000 30,000 16,451 16,451 72,300 72,300 270,519 270,519 94,660 94,660 1,039,805 1,039,805 0.50 0.50 121,723 121,723 121,723 121,723 FY 2020 Adopted 2,372,000 675,000 215,000 380,250 68,200 3,710,450 1.66 249,261 182,248 77,031 21,048 28,100 557,688 3.87 547,542 60,090 30,000 20,090 78,024 280,346 94,660 1,110,752 0.50 128,598 128,598 118 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund FY 2019 Adopted FY 2019 Adjusted FY 2020 Adopted Other Valet Programs (Lots R, CC, CW, & S) Temporary Valet Programs (during garage construction) Downtown Streets Team 289,972 150,000 118,744 289,972 150,000 118,744 289,972 118,744 Transportation Management Authority (TMA) 480,000 480,000 750,000 Utilities/Indirect costs 224,716 224,716 207,986 Transfer to GF (PARS trust) 5,621 5,621 Transfer to CIP Fund 2,337,015 2,337,015 1,135,220 Subtotal Other Total Operating Expenses 3,606,068 3,606,068 2,501,922 5,258,254 5,258,254 4,289,960 Income from Operations (1,775,454) (1,775,454) (588,510) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 119 SPECIAL REVENUE FUNDS OVERVIEW California Avenue Parking Permit Fund Revenues Permit Sales Day Passes Investment Income FY 2019 Adopted Total Revenue Expenditures Administration Positions Salaries & Benefits Miscellaneous Supplies Contract Staffing Parking Occupancy Services Temporary Valet Programs (during garage construction) Subtotal Administration Maintenance Positions Salaries & Benefits Supplies Contracts Garage maintenance Sweeping Ted Thompson and Cambridge garages Fire sprinkler maintenance Steam Cleaning Landscaping Facilities repair Street Sweeping Subtotal Maintenance Utilities/Indirect costs Transfer to GF (PARS trust) Transfer to CIP Fund Subtotal Other Total Operating Expenses 275,625 225,000 5,200 505,825 0.80 119,941 35,620 41,400 17,545 150,000 364,506 0.43 66,589 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 184,211 32,690 1,515 138,000 172,205 720,922 FY 2019 Adjusted 275,625 225,000 5,200 505,825 0.80 119,941 35,620 41,400 17,545 150,000 364,506 0.43 66,589 7,855 5,255 4,008 1,453 7,060 9,253 637 82,101 184,211 32,690 1,515 138,000 172,205 720,922 FY 2020 Adopted 286,625 225,000 12,000 533,625 1.05 151,383 35,620 41,400 17,545 245,948 0.43 73,601 7,855 5,255 4,008 1,453 7,060 10,597 637 82,101 192,567 38,849 138,000 176,849 615,364 Income from Operations (215,097) (215,097) (81,739) 120 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET SPECIAL REVENUE FUNDS OVERVIEW Stanford Development Agreement Fund 1 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 Interest - Climate Change Total Revenue W TOTAL SOURCE OF FUNDS USE OF FUNDS Transfers Out Community Health and Safety: Capital Improvement Fund Intermodal Transit: Capital Improvement Fund Climate Change: Capital Improvement Fund Total Transfers Total Expenditures FY 2019 Estimated 2,673,321 2,745,520 1,152, 553 10,406,116 2,655,140 19,632,651 44,166 45,501 19,101 59,698 29,088 197,553 19,830,204 FY 2020 Adopted 2,706,287 2,791,022 1,171,654 10,465,814 2,684,228 19,819,004 44,496 45,700 19,185 171,367 43,952 324,700 20,143,704 Change 32,966 45,501 19,101 59,698 29,088 186,353 330 199 84 111,670 14,864 127,146 313,500 J� 11,200 - (11,200) in11,200 11,200 200,000 200,000 1,200,000 1,200,000 1,400,000 1,400,000 1,388,800 1,388,800 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 121 SPECIAL REVENUE FUNDS OVERVIEW Stanford Development Agreement Fund Ending Fund Balance Unrestricted- Community Health and Safety Unrestricted- Stanford Hospital Expansion Cost Mitigation Unrestricted- Intermodal Transit 2,706,287 2,791,022 1,171,654 2,761,983 2,836,722 990,839 44,496 45,700 (180, 815) Unrestricted- Quarry Road Improvements Unrestricted- Neighborhoods and Communities and Affordable Housing 10,465,814 10,637,181 171,367 Unrestricted- Climate Change 2,684,228 1,528,180 (1,156,048) Total Ending Fund Balance TOTAL USE OF FUNDS 19,819,004 18,743,704 (1,075,300) 19,830,204 20,143,704 313,500 122 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Debt SejviQeL F� • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 123 CITY OF PALO ALTO DEBT SERVICE FUNDS OVERVIEW 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. However, for special or extraordi- nary capital improvement projects; refinancing of existing debt; and purchase of major and mul- tiple pieces of equipment it is appropriate to consider debt financing. The City's updated 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, Certificates of Participation, Utilities Revenue Bonds etc.) the City can utilize; and describing situations 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. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 125 DEBT SERVICE FUNDS OVERVIEW B. Minimize borrowing costs by: ▪ 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 result in 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. The Chief Financial Officer or Director of Administrative Services, supported by Treasury Divi- sion, will periodically evaluate existing debt and execute refinancing when economically benefi- cial. Refinancing may include the issuance of bonds to refund existing bonds or the issuance of bonds in order to refund other obligations. A net present value analysis, both in dollar and per- centage terms, will be conducted to determine whether a refinancing is optimal. As a "rule of thumb," a minimum 3.0 percent net present value savings will be used as a basis to begin refi- nancing efforts; however, a higher savings level may be considered. As with new debt, all refi- nancing must be approved by City Council. In September 2016, the state legislature adopted Senate Bill 1029, Hertzberg (SB 1029), amend- ing Government Code section 8855 to place additional reporting obligations on issuers of pub- lic 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 and practice substantially complied with the new requirements prior to this legislation, 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 Com- mission (CDIAC) such as the submission of an annual report for any issue of debt. 126 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET DEBT SERVICE FUNDS OVERVIEW LEGAL DEBT LIMIT Based upon the assessed valuation of $34.4 billion for the fiscal year ending June 30, 2018, the City is limited to general obligation indebtedness of $1.2 billion per State law. As of June 30, 2018, the amount of debt applicable to the debt limit is $62.4 million, which is well below the City's legal debt limit. The debt limit is applicable to voter -approved general obligation (GO) bonds that have been approved in prior years to fund capital improvement projects to renovate and build out the City's libraries including the Mitchell Park Library and Community Center. 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. 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 from refinanc- ing reduced the remaining debt service on the bonds to $0.6 million principal and $52,093 interest with final payment on this bond still occurring in Fiscal Year 2022. 2010A and 2013A General Obligation (GO) Bonds On June 30, 2010, the City issued the first series of $55.3 million and on June 26, 2013 the sec- ond series of $20.6 million of GO bonds to finance costs for constructing a new Mitchell Park Library and Community Center, as well as substantial improvements to the Main Library and the Downtown Library. Principal payments are due annually on August 1 and interest payments semi-annually on February 1 and August 1, from 2.0 percent to 5.0 percent, and are payable from property tax revenues. As of June 30, 2019, for the above 2010 and 2013 bonds, $44.6 million and $15.9 million principal and $26.4 million and $8.5 million interest will be 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. This bond will be fully paid off and the lien on the emergency vehicles will be removed as of June 30, 2019. 2018 Capital Improvement ("Golf Course") Project and 2002B ("Civic Center Refinancing and Downtown Parking Improvements Project") Refinancing Certificates of Participation (COPs) On June 5, 2018, the City issued taxable (Green Bonds) COPs of $8.4 million for the renovation of Palo Alto's Municipal Golf Course and $0.6 million to refinance the 2002B COPs (see above DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 127 DEBT SERVICE FUNDS OVERVIEW for further information). Debt service payments are due semi-annually on May 1 and November 1. The 2018 Capital Improvement Project and 2002B refinancing COPs maturity dates and true interest costs are November 2047 and 4.14 percent and November 2022 and 3.11 percent, respectively. 2019 California Avenue Parking Garage Certificates of Participation (COPs) On March 21, 2019, the City issued $26.8 million tax-exempt and $10.6 million taxable COPs for the construction of a six story (four above ground levels and two below ground levels) parking garage in the California Avenue Business District. The new garage will replace existing parking stalls at two locations and provide 310 additional parking spaces, totaling 636 parking spaces in the new garage. Debt service payments on the $37.4 million COPs are due semi-annually on May 1 and Novem- ber 1, with the first payment due on November 1, 2019. The COPs mature in FY 2049 and have a combined true interest cost (TIC) of 3.75 percent with the tax-exempt bonds' TIC being 3.52 percent and taxable bonds' TIC being 4.32 percent 1995 Utility Revenue Bonds, Series A On February 1, 1995 the City issued Utility Revenue Bonds 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 $0.6 million principal and $40,313 interest as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2020. 1999 Utility Revenue and Refunding Bonds, Series A On June 1, 1999 the City issued Utility Revenue Bonds 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 "Stormwater Management 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 - water Management (25.2 percent). Principal payments are payable annually on June 1, and inter- est 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. 128 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET DEBT SERVICE FUNDS OVERVIEW The pledge of future net revenues for the above funds ends upon repayment of the $7.5 million principal and $1.3 million interest as the remaining debt service on the bonds as of June 30, 2019, 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 $0.3 million as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2022. 2009 Water Revenue Bonds, Series A On October 6, 2009, the City issued Water Revenue Bonds in the amount of $35.5 million to finance certain improvements to the City's Water utility system. Principal payments are due annually on June 1, and interest payments are due semi-annually on June 1 and December 1, from 1.8 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 35.0 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 declined to 32.5 percent in 2013 and were 33.3 percent in calendar year 2018. The lien on the 1995 Bonds on the net revenues is senior to the lien on net revenues securing the 2009 Bonds and the 2002 Bonds. The City received subsidy payments amounting to $0.5 million, which rep- resents 33.3 percent of the two interest payments due on June 1 and December 1 annually. The pledge of future net revenues of the above funds ends upon repayment of the $26.6 million principal and $14.4 million interest as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2035. 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 3.0 percent to 4.0 percent. The Revenue Bonds are secured by Net Revenues generated by the Water and Gas Funds. The pledge of future net revenues of the above funds ends upon repayment of the $9.1 million principal and $1.2 million interest as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2026. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 129 DEBT SERVICE FUNDS OVERVIEW 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 $5.0 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 $3.8 million principal and $0.8 million in -substance interest as the remaining debt service on the bonds as of June 30, 2019 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 $5.7 million principal and $1.0 million in -substance interest as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2031. 2017 State Water Resources Loan In June 2017, the State Water Resources Control Board (SWRCB) and the City executed an agreement for an award up to $30.0 million at a rate of 1.8 percent, payable over 30 years, with the first annual installment due May 31, 2020 to finance the replacement of sewage sludge "bio- solids" incinerators at the City's Regional Water Quality Control Plant (RWQCP). In September 2017, due to the projected lower project costs, the agreement was amended to reduce the SWRCB loan amount to $29.7 million. Under the terms of the contract, a portion of the loan amount, $4.0 million, is a federally funded grant (by the U.S. Environmental Protection Agency) and has been adjusted to reflect the correct long-term obligation balance of $25.7 million. The new facility will dewater the bio-solids and allow the material to be loaded onto trucks and taken to a separate facility for further treatment. The RWQCP provides treatment and disposal for wastewater for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. Though Palo Alto is the recipient of the loan, the City's agree- ment with the partner agencies obliges them to pay their proportionate share of the principal and interest of this loan. Palo Alto's share of the loan payment is 38.2 percent with the partner agencies paying 61.8 percent. As of June 30, 2019, the City is anticipated to incur and draw down $18.1 million of the project costs from the loan award. 130 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET DEBT SERVICE FUNDS OVERVIEW 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 2013 and reaffirmed these ratings a few times, the last one being in February 2019 by S&P and July 2019 by Moody's. These ratings demonstrate that Palo Alto's prudent financial man- agement and fiscal strength are viewed favorably by credit agencies. The four Utility bonds (1995, 1999, 2009, & 2011) that are rated also received S&P's highest credit rating of Triple A. Moody's has rated these Utility bonds with their second highest (Aa1) or third highest (Aa2) rat- ings. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 131 DEBT SERVICE FUNDS OVERVIEW Debt Service Fund Fund Summary ($000) FY 2017 Actuals FY 2018 Actuals Revenues Bond Proceeds 0 595 Property Tax 4,572 4,331 4,427 Return on Investments 33 40 0 Transient Occupancy Tax 0 0 0 2,335 Subtotal Revenues 4,605 4,966 4,427 6,778 Operating Transfers In General Fund 234 233 161 530 369 229.2% Subtotal Operating Transfers 234 233 161 530 369 229.2% 4,839 5,199 4,588 7,308 2,720 59.3% FY 2019 Adopted FY 2020 Adopted FY 2020 Change $ FY 2020 Change % Total Source of Funds Expenses Golf Course 2018A Interest 0 0 Golf Course 2018A Principal 0 0 Library GO Bonds Debt Service (11) 0 Library GO Bonds Interest 2,932 2,863 Library GO Bonds Principal 1,500 1,570 Parking 2002B COPS Taxable Debt 0 14 Service Parking 2002B COPS/ 2018B 74 77 Refinancing Taxable Interest Parking 2002B COPS/ 2018B 160 975 Refinancing Taxable Principal Parking 2019A COPS Tax Exempt 0 0 Interest Parking 2019B COPS Taxable 0 0 Interest Parking 2019B COPS Taxable 0 0 Principal Total Use of Funds Net to (from) Reserves 4,655 184 5,499 (300) 0 0 0 0 2,787 1,640 0 11 150 0 0 0 4,588 0 0 4,443 0 335 35 0 2,718 1,725 0 15 145 1,488 470 375 7,306 2 0 16 0 2,335 2,351 335 35 0 (69) 85 0 4 (5) 1,488 470 375 2,718 2 0.0% 0.4% 0.0% 100.0% 53.1% 100.0% 100.0% 0.0% (2.5%) 5.2% 0.0% 36.4% (3.3%) 100.0% 100.0% 100.0% 59.2% N/A 132 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 133 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; negotiate on behalf of the City; provide training and advice on how to manage risk and comply with the law; enforce the municipal code; and defend the City when it is sued. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 135 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 2020 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. 136 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 ▪ Completed several ordinances to implement the Comprehensive Plan, including the first Housing Work Plan ordinance to promote housing development, an ordinance to strengthen environmental compliance and implement California Environmental Quality Act (CEQA) mitigation measures adopted with the Comprehensive Plan Environmental Impact Report (EIR), and update the City's transportation impact fee programs. ▪ Completed a substantial number of environmental protection ordinances, including: overhaul of the City's watershed protection ordinances governing stormwater management, pretreatment of discharges into the sanitary sewer system, and disposal of fats, oils, and grease; a foodware ordinance regulating single -use plastic foodware; and an ordinance requiring source separation of deconstructed construction materials to promote the City's Zero Waste goals. ▪ Supported development of updated utility (water, gas, wastewater, and electric) financial management policies and rate changes, for Council approval in June 2019. • Negotiated and finalized key agreements supporting the Highway 101 Pedestrian/Bicycle Overpass project (e.g. easement, right-of-way, and maintenance agreements) with project partners (Google, Santa Clara Valley Water District, and Caltrans). • Provided two 2 -hour trainings in construction contract and project management. Updated Public Work's construction contract administrative manual to reflect legal and regulatory changes. • Advised on procurement and contracting matters for the Palo Alto Airport apron projects and revised the construction contract for use when a project is federally funded. ▪ Provided legal support for extensive contract negotiations with Stanford University regarding fire protection services. • Provided legal support in negotiating successor memoranda of agreement with several labor groups. • Provided legal support for key policy initiatives, including exploration of rail grade separation options and potential measures to protect and enhance City revenues. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 137 CITY ATTORNEY • Negotiated the final agreement with Pets In Need for the operation of the Palo Alto Animal Shelter. Initiatives • Support the Highway 101 Pedestrian/Bicycle Overpass project implementation, such as construction procurement, contracting, and the application of Caltrans requirements. • Support the planned upgrade of the City's human resources and finance enterprise computer systems through advice and assistance with procurement and contracting processes. • Support further implementation of the Housing Work Plan through a second ordinance addressing the 2019 initiatives under the Plan. ▪ Support completion of natural gas cost and wastewater cost of service studies, new rate designs, and programs to support green gas initiatives. 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 and appropriately resolve claims. • 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. 138 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY ATTORNEY • Provide relevant training to City officials and staff to reduce legal risk exposure. • Create user-friendly tools to assist new and existing employees in complying with public service requirements such as ethics, conflicts of interest, open meeting, and public records laws. /Key Performance CLAIMS RESOLUTION Goal Objective V ensures 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of claims resolved within 45 days of filing Description Purpose Status 97% 98% 98% 98% 98% 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of surveyed who agree/ strongly agree that the training provided is useful and relevant Description Purpose Status Workload Number of claims handled V N/A N/A N/A 99% 90% 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. There was not sufficient data in Fiscal Years 2017 and 2018 for this measure. However, in Fiscal Year 2019, the data reflects that 100% of the attendees agree that the training provided was useful and relevant. ensures 93 84 88 88 84 CITY ATTORNEY • c:ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 139 CITY ATTORNEY 3udget Summary 1 FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Division Administration 537,560 553,106 604,877 644,611 39,734 Consultation and Advisory 1,435,074 1,619,693 1,884,109 1,904,890 20,781 Litigation and Dispute Resolution 1,107,646 1,044,767 685,143 717,728 32,585 Official and Administration Duties 77,725 89,885 114,086 119,725 5,639 Total 3,158,005 3,307,450 3,288,215 3,386,954 98,739 FY 2020 Change % 6.6% 1.1% 4.8% 4.9% 3.0% Dollars by Category Salary & Benefits Healthcare 127,806 128,784 176,846 155,397 (21,448) (12.1)% Other Benefits 62,267 81,506 69,176 71,484 2,309 3.3% Pension 352,259 424,196 476,345 621,851 145,506 30.5% Retiree Medical 144,937 152,481 115,560 119,026 3,467 3.0% Salary 1,270,158 1,452,038 1,690,879 1,764,909 74,029 4.4% Workers' Compensation 42,882 60,951 18,069 42.1% Total Salary & Benefits 1,957,426 2,239,004 2,571,687 2,793,619 221,932 8.6% Allocated Charges 109,805 123,759 137,246 138,831 1,584 1.2% Contract Services 1,066,351 910,987 472,301 372,301 (100,000) (21.2)% Facilities & Equipment 1,000 1,000 - -% General Expense 12,878 13,709 52,642 52,642 -% Operating Transfers -Out 24,857 (24,857) (100.0)% Rents & Leases 1,907 1,265 2,050 2,130 80 3.9% Supplies & Material 9,638 18,725 26,432 26,432 - -% Total Dollars by Expense 3,158,005 3,307,450 3,288,215 3,386,954 98,739 3.0% Category Revenues Charges for Services 28,052 28,052 - -% Charges to Other Funds 1,108,575 1,063,627 392,700 704,051 311,352 79.3% Other Revenue 8,000 16,000 10,789 10,789 - -% Total Revenues 1,116,575 1,079,627 431,541 742,892 311,352 72.1% 140 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY ATTORNEY 3udget Summary 1 Positions by Division Administration Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties Total FY 2017 Actuals 1.47 7.31 1.86 0.36 11.00 FY 2018 Actuals 1.47 7.31 1.86 0.36 11.00 FY 2019 Adopted Budget 1.47 6.46 1.71 0.36 10.00 FY 2020 Adopted Budget 1.47 6.46 1.71 0.36 10.00 FY 2020 Change $ FY 2020 Change % _% - % 0- Y0 Staffing Job Classification Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator Deputy City Attorney FY 2017 Actuals 1.00 1.00 1.00 Legal Fellow 1.00 Principal Attorney 1.00 Secretary to City Attorney 1.00 1.00 1.00 FY 2018 Actuals FY 2019 Adopted Budget 3.00 1.00 1.00 1.00 1.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 FY 2020 Adopted Budget 3.00 1.00 1.00 1.00 1.00 1.00 1.00 FY 2020 Change FTE Senior Assistant City Attorney 2.00 - - - - Senior Deputy City Attorney 1.00 - - - Senior Legal Secretary 1.00 1.00 Senior Management Analyst 1.00 1.00 1.00 1.00 134,243 Sub -total: Full -Time Equivalent 11.00 11.00 10.00 10.00 - 1,641,869 Positions Total Positions 11.00 11.00 10.00 10.00 - 1,641,869 FY 2020 Salary 518,606 243,318 298,480 101,504 157,914 105,040 82,763 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 141 CITY ATTORNEY 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 10.00 3,288,215 431,541 2,856,674 One -Time Prior Year Budget Adjustments Outside Counsel Resources Supplemental Pension Trust Fund Contribution General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) - (100,000) (24,857) 5,747 - (100,000) (24,857) 5,747 17,089 17,089 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities - (102,021) — (102,021) Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Fund Cost Allocation Plan Rents & Leases Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges 127,217 127,217 — 76,646 — 76,646 311,352 (311,352) 80 (3,993) (1,314) 1,144 980 80 (3,993) (1,314) 1,144 980 Adjustments to Costs of Ongoing Activities 200,760 311,352 (110,592) FY 2020 Adopted Budget 10.00 3,386,954 742,893 2,644,061 142 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 2020 ADOPTED OPERATING BUDGET 143 CITY AUDITOR CITY AUDITOR 2.00 Senior Performance Auditor 2.00 Performance Auditor II FY 2020 POSITION TOTALS 5.00 - 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 AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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. 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 and the recommendations made as a result of those audits. 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 ▪ Published the Code Enforcement Audit, which presented seven recommendations to identify and address barriers to timely and effective enforcement, collect and report useful data, and inform the public on code requirements and enforcement processes. ▪ Published the Nonprofit Service Agreements Audit, which presented five recommendations to improve oversight of the nonprofit service agreements by making monitoring processes and tools available to City departments. ▪ Published the Enterprise Resource Planning (ERP) Planning: Information Technology and Data Governance Audit, which presented two findings and four recommendations to ensure that implementation and ongoing operations of the City's new ERP system are successful, in alignment with City goals and objectives, and that existing data are accurate, consistent, and complete before being migrated into a new system. ▪ Issued a confidential and limited distribution memorandum to the City Manager's Office and the Information Technology Department that identified significant amounts of unsecured personally identifiable information and other sensitive information on the City's shared - access network drives. The memorandum provided four recommendations to the City Manager to secure the data and improve information security overall. ▪ Published the Business Registry Audit, which presented one finding and three recommendations to improve and maintain data quality of the City's Business Registry. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 145 CITY AUDITOR • Published a memorandum to provide information on the reliability of the City's 2018 Business Registry data collected by Avenu Insights (formerly MuniServices), trends in the City's business registrations, and comparisons of Palo Alto's business registry with other jurisdictions' registries or licensing models to identify opportunities to improve data reliability and usability. • Developed a risk -based, data -driven model to identify and prioritize high -risk City contracts to audit starting in Fiscal Year 2020. ▪ Published the ERP Planning: Data Standardization Audit, which presented four recommendations to provide examples for types of standardization prior to transferring data to a new ERP system. • Published the ERP Separation of Duties Audit, which presented two recommendations to ensure that any identified separation of duties and access control deficiencies in key work areas are corrected before implementing a new ERP system. ▪ Compiled the results of the City's FY 2018 Annual Performance Report and the Citizen Centric Report. • Compiled the results of the 2018 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 • Transferable Development Rights: Determine if the City maintains an accurate and complete record of the transferable development rights (both City -owned and non -City -owned) that have been certified, transferred, and used to date. • Procurement/Request for Proposals (RFP) Bidding Process: Assess the effectiveness of the procurement process, with a focus on consistency in application of processes, compliance with City regulations and policies, and cost estimating practices. • Parking Assessment Districts: Examine the City's parking assessment districts to assess the equity of costs and benefits to the City and property owners in the districts. ▪ Contract Risk and Oversight: 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. ▪ 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 correct prior to transferring data into a new ERP system. ▪ Mobile Device Inventory and Security: Determine if the City accurately inventories and securely manages City -owned mobile devices, including laptops, tablets, and cell phones. 146 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY AUDITOR ▪ Supervisory Control and Data Acquisition (SCADA) System and Security Audit: Evaluate the effectiveness of processes related to installing, maintaining, and securing SCADA operations. 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. 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: • 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 2020 ADOPTED OPERATING BUDGET 147 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. Number of major work products per audit staff Description Purpose Status FY 2017 Actuals 1.67 FY 2018 Actuals 1.33 FY 2019 Adopted 1.75 FY 2019 Estimated 1.75 FY 2020 Adopted 1.75 This workload measure indicates 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. It is important to remember that performance audits can vary significantly from one to the next in the amount of time taken to complete them in accordance with Generally Accepted Government Auditing Standards. Factors such as the scope of the audit, the condition of the data to be audited, the availability of appropriate staff, and the possibility of having to expand the scope depending on what is found during the audit all will contribute to the possibility that an audit may take more time than originally estimated. That said, the City Auditor's Office will always strive to perform audits as efficiently and expeditiously as possible, while still meeting required professional standards. The number of major work products generated by each audit staff stayed the same (1.75) from the FY 2019 estimate. FY 2019 included five audits and two non -audit activities completed by 4.0 staff members, while in FY 2020 we expect to complete seven major projects carried over from the current year's audit work plan. Additional work products may be added to next year's work plan, which could potentially increase the number of major work products per audit staff above the 1.75 level. 148 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of open audit recommendations implemented over the last five years Description Purpose Status 50% 52% 60% 57% 60% This measures the degree to which departments have implemented 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 Objective documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Goal FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Ratio of sales tax revenue recoveries to cost. Description Purpose Status 5:1 5:1 3:1 6:1 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 2020 ADOPTED OPERATING BUDGET 149 CITY AUDITOR Workload V ensures FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 FY 2020 Estimated Adopted Number of major work products issued. 8 6 8 7 7 150 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY AUDITOR 3udget Summary J Dollars by Division Audit Services Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,207,797 1,233,315 1,267,289 1,235,450 (31,839) (2.5)% 1,207,797 1,233,315 1,267,289 1,235,450 (31, 839) (2.5) % Dollars by Category Salary & Benefits Healthcare 42,244 31,468 38,612 51,724 13,112 34.0% Other Benefits 31,362 33,253 27,609 24,144 (3,465) (12.6)% Pension 172,942 173,254 180,734 202,989 22,255 12.3% Retiree Medical 34,598 36,399 44,844 46,189 1,345 3.0% Salary 637,696 613,045 643,242 577,387 (65,855) (10.2)% Workers' Compensation - - 17,129 24,256 7,128 41.6% Total Salary & Benefits 918,841 887,418 952,171 926,690 (25,481) (2.7)% Allocated Charges 45,079 60,540 59,355 63,501 4,147 7.0% Contract Services 221,220 248,993 228,000 228,000 -% General Expense 19,895 33,817 15,279 14,279 (1,000) (6.5)% Operating Transfers -Out - 9,505 - (9,505) (100.0)% Supplies & Material 2,762 2,547 2,980 2,980 - -% Total Dollars by Expense Category 1,207,797 1,233,315 1,267,289 1,235,450 (31, 839) (2.5) % Revenues Charges to Other Funds 385,751 363,802 897,314 1,012,636 115,322 12.9% Sales Taxes 380,290 470,263 150,000 150,000 - -% Total Revenues 766,041 834,065 1,047,314 1,162,636 115,322 11.0% Positions by Division Audit Services 5.00 5.00 5.00 4.00 (1.00) (20.00)% Total 5.00 5.00 5.00 4.00 (1.00) (20.00)% CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 151 CITY AUDITOR Staffing Job Classification City Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor Sub -total: Full -Time Equivalent Positions Total Positions FY 2017 Actuals 1.00 1.00 1.00 2.00 FY 2018 Actuals 1.00 1.00 1.00 2.00 FY 2019 Adopted Budget 1.00 1.00 2.00 1.00 FY 2020 Adopted Budget 1.00 2.00 1.00 FY 2020 Change FTE (1.00) FY 2020 Salary 195,042 206,378 135,762 5.00 5.00 5.00 4.00 (1.00) 537,181 5.00 5.00 5.00 4.00 (1.00) 537,181 152 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY AUDITOR 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Expense General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities Total FY 2020 Adopted Budget 5.00 1,267,289 1,047,314 219,975 (1.00) (1.00) 4.00 (9,505) 2,311 6,826 (368) (57,628) 25,019 (1,000) (1,131) (569) 3,536 302 1C-31‘ iNr6c _ r 115,322 115,322 1,162,636 (9,505) 2,311 6,826 (368) (57,628) 25,019 (1,000) (115,322) (1,131) (569) 3,536 302 (146,793). 72,814 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 153 CITY OF PALO ALTO CITY CLERK Mission Statement The City Clerk's Office promotes transparency and public engagement through coordinating the legislative process, records management, elections, and public records requests; supporting the Mayor and City Council; and acting as a liaison between the City Council and the public. Purpose The purpose of the City Clerk's Office is to provide prompt, high quality public service by connecting the public with the legisla- tive process; ensuring the City's legislative processes are open and transparent through friendly customer service, knowledgeable staff, and easily accessible technology; administering elections; facilitating the preservation of Palo Alto's legislative history, including approved action minutes; coordinating public records requests, claims against the City, applications for boards and commis- sions, and updates and maintenance of City Ordinances and the Municipal Code; providing access to legislative meeting information; and coordinating Statements of Economic Interest as well as campaign and other financial disclo- sure related filings. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 155 CITY CLERK CITY CLERK Beth Minor 1.00 Assistant City Clerk 1.00 Deputy City Clerk FY 2020 POSITION TOTALS 5.00 - Full-time 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 156 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 Ordinances and Resolutions; engaging in records management, elections, and board and commission recruitments; and processing public records requests. Accomplishments ▪ Ran a successful Council election and two ballot measure elections in November 2018. ▪ Facilitated voter -approved transition from nine Council Members to seven Council Members. ▪ Transitioned from verbatim transcript minutes to synopsis Sense minutes for City Council and Standing Committee meeting records. • Updated the Conflict of Interest Code with the assistance of every department. ▪ Held the 6th annual Board and Commission recognition event at the Lucie Stern Community Center. • Successfully managed the Mayor's State of the City address at the Mitchell Park Community Center. ▪ Received applications for Board and Commission vacancies resulting in 41 interviews, totaling 9 hours of interviews in calendar year 2018. ▪ Prepared and published 56 City Council meeting agenda packets, and 20 Finance and Policy and Services Committee agenda packets in calendar year 2018. ▪ Supported over 322 hours of Council and Council Standing Committee meetings in calendar year 2018. ▪ Scheduled and supported 275 administrative and citation hearings in calendar year 2018. ▪ Added additional public meeting supplementary information to the Council webpages (City Manager Comments). Initiatives ▪ Work with students from BEAM (Bridging Education, Ambition and Meaningful Work) to improve Board and Commission recruitment marketing and outreach. • Assist with upgrades to the Council Chambers audio/video system. ▪ Work with departments to create a staff report writing guide. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 157 CITY CLERK ▪ Continue streamlining the citywide records destruction process. ▪ Audit vital records stored off -site. • Update the citywide email retention policy. ▪ Update the citywide records management and training program. • Explore an online records portal. • Continue to 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 available 11 days prior to each Council meeting. ▪ Transcribe and post Council draft 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 electronically file Statement of Economic Interest forms. GOAL 3 Effectively administer appointments to Boards and Commissions. Objectives: • Improve the 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. 158 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percentage of action minutes posted within one week after the Council meeting Description Purpose Status 95.00% 96.42% 98.00% 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 2019 into FY 2020. 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 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Percentage of Council agenda packet materials posted Thursdays, 11 days prior to the Council meeting Description Purpose Status 99.00% 98.21% 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 2020. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 159 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted 96.00% 98.46% 99.50% 98.00% 99.00% Public Records requests are required to be addressed within ten days of receipt. This could be the actual response or a request for an extension of time to gather the requested records. 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 close to meeting the goal adopted for FY 2019 and anticipates meeting the target in FY 2020. 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 66 65 55 60 seats FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated 53 37 54 37 47 42 51 39 340 455 400 445 FY 2020 Adopted 50 40 450 60 160 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY CLERK 3udget Summary J Dollars by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 142,416 145,167 592,955 562,057 (30,897) (5.2)% 30,009 79,118 120,049 85,634 (34,416) (28.7)% 585,353 660,249 410,415 514,672 104,257 25.4% 124,787 110,879 109,760 120,772 11,012 10.0% 86,787 90,769 57,245 62,687 5,442 9.5% 79,175 84,626 -% 1,048,526 1,170, 808 1,290,424 1,345,822 55,398 4.3% Dollars by Category Salary & Benefits Healthcare 34,447 37,875 39,983 37,961 (2,022) (5.1)% Other Benefits 19,078 18,649 21,687 22,401 715 3.3% Overtime 1,201 2,586 6,870 7,048 179 2.6% Pension 129,902 139,312 140,685 191,630 50,945 36.2% Retiree Medical 80,417 84,602 40,532 41,748 1,216 3.0% Salary 451,658 474,887 521,892 539,752 17,859 3.4% Workers' Compensation (369) 10,353 16,186 21,804 5,618 34.7% Total Salary & Benefits 716,334 768,264 787,835 862,344 74,509 9.5% Allocated Charges 136,466 151,503 167,649 159,999 (7,650) (4.6)% Contract Services 142,835 195,124 255,320 254,346 (974) (0.4)% General Expense 42,636 46,440 51,591 62,640 11,049 21.4% Operating Transfers -Out - - 8,510 - (8,510) (100.0)% Supplies & Material 10,255 9,475 19,519 6,493 (13,026) (66.7)% Total Dollars by Expense 1,048,526 1,170,808 1,290,424 1,345,822 55,398 4.3% Category Revenues Charges for Services 138 6 2,043 2,043 - -% Charges to Other Funds 324,795 352,022 658,196 671,548 13,353 2.0% Other Revenue 649 354 3,143 3,143 - -% Total Revenues 325,582 352,382 663,382 676,734 13,353 2.0% CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 161 CITY CLERK 3udget Summary 1 Positions by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total Staffing Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget 0.35 0.35 2.85 1.23 1.23 0.48 2.85 2.85 1.30 0.65 0.65 0.55 0.50 0.50 0.30 0.65 0.65 FY 2020 Adopted Budget 2.85 1.30 0.55 0.30 FY 2020 Change $ (0.48) 6.23 6.23 5.48 5.00 (0.48) FY 2017 Actuals FY 2018 Actuals Administrative Associate III 2.00 2.00 Assistant City Clerk 1.00 1.00 City Clerk 1.00 1.00 Deputy City Clerk 1.00 1.00 Hearing Officer 0.75 0.75 Sub -total: Full -Time Equivalent Positions 511,375 Temporary/Hourly 0.48 0.48 0.48 - (0.48) - Total Positions 6.23 6.23 5.48 5.00 (0.48) 511,375 FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Change % FY 2020 Salary 5.75 5.75 2.00 1.00 1.00 1.00 5.00 2.00 1.00 1.00 1.00 5.00 152,180 112,112 152,693 94,390 162 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY CLERK 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 5.48 1,290,424 663,382 627,042 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) (8,510) 2,184 (8,510) 2,184 6,450 — 6,450 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities 124 — 124 Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability Association Membership Fees General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges 74,363 74,363 — 23,619 — 23,619 — 13,049 — 13,049 13,353 (13,353) (3,000) (3,000) (1,039) (1,039) — (5,795) — (5,795) — (832) — (832) Adjustments to Costs of Ongoing Activities 100,365 13,353 87,012 Total FY 2020 Base Budget 5.48 1,390,913 676,735 714,178 Budget Adjustments 1 Shift Administrative Support and Citation Review to Office of Transportation 2 Supplies and Materials Alignment (0.48) (29,091) (16,000) — (29,091) (16,000) Total Budget Adjustments (0.48) (45,091) (45,091) Total FY 2020 Adopted Budget 5.00 1,345,822 676,735 669,087 CITY CLERK • C:ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 163 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Shift Administrative Support and Citation Review to Office of Transportation (29,091) ma:0 (29,091) This ongoing action shifts a vacant 0.48 FTE Administrative Specialist from the City Clerk's Office to the newly established Office of Transportation. This position's duties include initial review of various citations, including Residential Preferential Parking citations. This preliminary review function is not typically a function of a City Clerks' Office and would be better positioned in the Office of Transportation. Aligning the workload of citation review in the Office of Transportation will also ensure clear lines of communication about citations and the process for resolving them. It is anticipated that this position will also be able to offer additional administrative support beyond preliminary review of citations to the Office of Transportation. This action results in savings in the City Clerk's Office offset by a corresponding increase in the Office of Transportation. (Ongoing Savings: $29,000) Performance Results 0 0 This action aligns the duties of this position with the correct department and will ensure clear communication and. efficient citation review. 2 Supplies and Materials Alignment 0.00 (16,000) 0 (16,000) This ongoing action reduces $16,000 in office supplies and materials funding in the Office of the City Clerk to align with actual expenses from past fiscal years and with anticipated needs for FY 2020. 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: $16,000) Performance Results © O Reduction in office supplies and materials is anticipated to have minimal impact to daily operations, while reducing overall costs for the Office to deliver services. 164 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Mission Statement CITY COUNCIL 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 2020 ADOPTED OPERATING BUDGET 165 CITY COUNCIL 3udget Summary 1 Dollars by Division City Council Operations Total FY 2017 Actuals FY 2018 Actuals 452,223 475,912 FY 2019 Adopted Budget FY 2020 Adopted Budget 489,510 498,261 FY 2020 Change $ 8,751 FY 2020 Change % 1.8% 452,223 475,912 489,510 498,261 8,751 1.8% Dollars by Category Salary & Benefits Healthcare 119,386 111,678 114,888 136,904 22,016 19.2% Other Benefits 4,326 8,158 5,640 5,729 88 1.6% Pension 16,991 21,743 33,459 32,634 (826) (2.5)% Retiree Medical 83,222 87,553 49,156 50,631 1,475 3.0% Salary 88,111 108,014 96,000 84,000 (12,000) (12.5)% Workers' Compensation - - 3,076 5,331 2,255 73.3% Total Salary & Benefits 312,034 337,148 302,220 315,228 13,008 4.3% Allocated Charges 15,949 15,871 17,220 17,149 (71) (0.4)% Contract Services 76,609 80,460 108,000 108,000 -% General Expense 45,748 41,020 57,455 54,955 (2,500) (4.4)% Operating Transfers -Out - - 1,686 - (1,686) (100.0)% Supplies & Material 1,883 1,414 2,930 2,930 - -% Total Dollars by Expense Category 452,223 475,912 489,510 498,261 8,751 1.8% Revenues Charges to Other Funds 136,295 138,473 91,738 94,792 3,053 3.3% Total Revenues 136,295 138,473 91,738 94,792 3,053 3.3% Positions by Division City Council Operations 9.00 9.00 7.00 7.00 -% Total 9.00 9.00 7.00 7.00 - -% 166 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY COUNCIL Staffing Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Salary City Council Sub -total: Full -Time Equivalent Positions Total Positions 9.00 9.00 9.00 9.00 7.00 7.00 7.00 7.00 9.00 9.00 7.00 7.00 84,000 84,000 84,000 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 167 CITY COUNCIL 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 7.00 489,510 91,738 397,772 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Savings General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) (1,686) 415 1,226 (1,686) 415 1,226 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (45) (45) Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Expense Adjustment General Fund Cost Allocation Plan Liability Insurance Allocated Charges Information Technology Allocated Charges Workers' Compensation Allocated Charges 6,838 3,915 (2,500) 335 (821) 1,029 3,053 6,838 3,915 (2,500) (3,053) 335 (821) 1,029 Adjustments to Costs of Ongoing Activities — 8,796 3,053 5,743 Total FY 2020 Adopted Budget /i, 498,261 94,791 403,470 168 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 2020 ADOPTED OPERATING BUDGET 169 CITY MANAGER CITY MANAGER Ed Shikada OPERATIONS 1.00 Assistant City Manager 1.00 Deputy City Manager 2.00 Assistant to the City Manager SUPPORT 1.00 Executive Assistant to the City Manager 2.00 Administrative Assistant COMMUNICATIONS 1.00 Chief Communications Officer 1.00 Communications Manager SUSTAINABILITY 0.75 Management Analyst OFFICE OF TRANSPORTATION* 15.00 Full-time 0.48 Hourly FY 2020 POSITION TOTALS 25.75 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. *A detailed breakdown of the organizational structure of the Office of Transportation is included later in this section. 170 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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): FACILITATE CITY COUNCIL LEGISLATIVE ACTIONS The City Council sets policy direction for the City of Palo Alto and confers that direction through legislative actions. To support the Council's work, the City Manager's Office (CMO) pre- pares City Manager Reports, including analysis and recommended Council action, and imple- ments Council actions. The CMO acts on priorities identified by the City Council during the annual Council Retreat and Council -initiated policies or programs. The CMO also engages other governments through participation in regional, statewide, and national organizations, and directs state and federal legislative advocacy efforts on behalf of the City. MANAGE SPECIAL INTERDEPARTMENTAL PROJECTS Each year, the City tackles special projects that, due to their scale and scope, require immense interdepartmental coordination, community outreach, and engagement with neighboring com- munities and public agencies. The City Manager's Office takes responsibility for managing these special projects in order to ensure efficient and effective coordination, implementation, and to achieve the City's goals. Some projects may be planned and identified as Council priorities, such as grade separation, and others may arise as the City responds to unfolding events and commu- nity concerns. DIRECT AND COORDINATE DEPARTMENT OPERATIONS The City Manager's Office provides strategic leadership and guidance to City's executive leader- ship team to ensure the provision of high -quality, cost-effective, and focused services through- out Palo Alto. The CMO ensures City operations demonstrate transparency and fiduciary responsibility to the public. In this capacity, the CMO also provides timely, accurate, and results - oriented financial and operational reports. Through the budget and development of citywide business plans, the CMO ensures resources are allocated to the Council's policies and priorities. SUPPORT A PRODUCTIVE AND HEALTHY WORKFORCE The City Manager's Office maintains a highly qualified, engaged, and effective workforce to suc- cessfully attain the City's goals and objectives. To that end, the CMO cultivates a strong service culture and provides ongoing, informative communications to City employees regarding key objectives, challenges, and accomplishments. As vacancies occur within the organization, the CMO provides support to maintain service delivery. In addition, the CMO mentors junior and senior staff, developing a pipeline of qualified managers within the organization. LEAD IMPLEMENTATION OF SUSTAINABILITY PROGRAM The pursuit of environmental sustainability and fight against climate change reflect core values of the City of Palo Alto. These undertakings require leadership from the City Council, collabora- tion amongst City agencies as well as participation from the Palo Alto community. The Office of CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 171 CITY MANAGER Sustainability, situated in the City Manager's Office, provides leadership to City departments and coordinates collaborative efforts with partners in the community, region, nation, and around the world. Through the work of the Office, sustainability has become integrated into the work of each department. COORDINATE COMMUNICATIONS & COMMUNITY ENGAGEMENT Palo Alto stands out as a well-informed and engaged community. The City Manager's Office builds on this strength by proactively communicating public information, creating and support- ing community partnerships, and facilitating citizen involvement in order to develop mutual understanding and support between City government and constituents. The CMO achieves this by supporting new community engagement efforts, such as Cool Block, while also promoting best communication practices throughout the City. In addition, communications staff respond to requests from media and the public, broadcast information on a range of platforms, and assist departments in their communication activities. FACILITATE BUSINESS ENGAGEMENT & ECONOMIC VITALITY The City Manager's Office maintains collaborative relationships with businesses and residents to facilitate desired economic activity. Local and regional associations serve as leaders and part- ners in this endeavor; accordingly, the City Manager assigns staff to these organizations. The CMO acts as an ombudsman for the City, connecting business with appropriate departments, answering questions, and addressing issues that arise. In addition, the CMO leads Palo Alto's participation in Sister Cities, creating meaningful connections with cities around the world and integrating technology into our everyday operations. LEAD TRANSPORTATION & TRAFFIC IMPROVEMENTS The newly created Office of Transportation (OOT), situated within the City Manager's Office, was established in recognition of the scale, complexity, and level of citizen engagement related to transportation. The Office was created to improve the safety of the users of all modes of transportation, reduce reliance on single -occupancy vehicles, address congestion, and reduce through traffic and non-resident parking in Palo Alto neighborhoods, leading to an integrated transportation system that serves local, regional, and intercity travel. 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. 172 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER • Supported City departments following departures of several executive leaders by ensuring operations continued and while working to fill vacancies. The CMO provided this support to the Fire Department, the Department of Public Works, Planning & Community Environment, Development Services, and the Administrative Services Department. ▪ Managed the City's state and federal legislative program to advance City Council and City department goals. • Facilitated the City Council and Finance Committee's efforts to achieve fiscal sustainability and complete critical infrastructure projects. ▪ Supported the efforts of departments moving forward on infrastructure projects. Major project milestones include the ground breaking for the 101 Pedestrian and Bicycle Bridge; certification of the environmental impact report and awarding of the contract for the California Avenue Garage; approval of the design and environmental impact report for the Public Safety Building; the ground breaking and ongoing construction of Fire Station 3; awarding of contract and beginning construction of Charleston/Arastradero improvements; and clean-up of the ITT site. • Performed analysis and support as the City Council considered increasing the Transient Occupancy Tax. The Council placed the measure on the November 2018 ballot and it successfully passed. • Supported the Upgrade Downtown infrastructure project conducted by the Utilities Department. ▪ Successfully completed negotiations with Stanford University regarding fire safety services, resulting in a new contract to provide fire services. • Established newest Sister City relationship with Yangpu, Shanghai, China. • Hosted several international delegations from cities around the world, including representatives from Sister Cities in Enschede (The Netherlands), Linkoping (Sweden), Heidelberg (Germany), and Yangpu, Shanghai (China). Also visited Sister Cities. ▪ Supported emergency preparedness throughout winter storm season. ▪ Continued ongoing interdepartmental focus on Caltrain safety, including the installation of an integrated video system at the four rail crossings, which are designed to reduce access to the rail corridor. ▪ Assisted with efforts to resolve key land use issues including Castilleja School, the Conditional Use Permit at First Baptist Church, the Corner House, and the Palo Alto Museum. • Coordinated with the Planning and Development Services Department (formerly the Planning and Community Environment Department) to support the adoption of the Housing Work Plan and accompanying ordinances intended to help Palo Alto meet its goal to build 300 new housing units per year. ▪ Supported the City Council and other departments in approving Wilton Court, which will be an affordable housing development serving seniors and developmentally disabled adults. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 173 CITY MANAGER • Coordinated the implementation of the Council -adopted 3 -year Sustainability Implementation Plan. Palo Alto City Council accepted a 2018-2020 Sustainability Implementation Plan (SIP), which outlines proposed measures in four areas that could reduce Greenhouse Gas Emissions to about 54 percent below 1990 levels by 2020. Staff formed inter -departmental SIP Working Groups. • Participated in the Rocky Mountain Institute's first Efficiency Standards for Rentals cohort, resulting the creation of a draft policy blueprint that will be studied further as part of the 2020 Sustainability and Climate Action Plan Update. ▪ Facilitated creation and subsequent Council adoption of an Anti -Idling Ordinance, which requires drivers to shut off their engines after two or three minutes if they are not in active traffic. Enforcement of the ordinance is centered on community education about the health and environmental impacts caused by vehicle idling. ▪ Supported multiple community outreach efforts on a variety of issues aimed at increasing civic participation, feedback and engagement including Cool Block, town halls, the Cubberley master planning process, and the North Ventura Coordinated Area Plan. • The CMO, along with the Police Department and Planning and Development Services (formerly the Planning and Community Environment Department), attended a special meeting of the Crescent Park Neighborhood Association to discuss traffic impacts and concerns regarding traffic. • Supported City Council Town Hall on Traffic and Transportation in October 2018. ▪ Produced and published multi -platform communications content related to City Council and organizational goals and programs; further expanded outreach by launching a monthly newsletter; and provided responsive, informed and timely information to community, public, and media stakeholders. ▪ Partnered with local community groups to host the United Nations Association Film Festival throughout various City locations. ▪ Led successful negotiations with Pets In Need, a local nonprofit animal rescue, in order to sign and execute an agreement allowing Pets In Need to provide animal care services in Palo Alto. ▪ Advanced efforts to address impacts of air traffic by advocating for and responding to initiatives by the Federal Aviation Administration (FAA) and supported the creation of the Santa Clara Santa Cruz Counties Community Roundtable. • Continued to support key business districts such as Downtown Palo Alto, California Avenue, Stanford Shopping Center and the Stanford Research Park. ▪ Negotiated agreement that Council approved to transfer a half -million gallons of water per day to the City of East Palo Alto. ▪ Participated with community partners in the planning and execution of the 9th Annual Bike Palo Alto event. Bike Palo Alto is a day of self -guided bike tours and bike education. ▪ The City successfully sold $9 million of taxable Certificates of Participation (COPs) Green Bonds through the City's negotiated underwriter, Raymond James 8( Associates, Inc. The 174 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER bonds, rated by Standard and Poor's as AA+, will reimburse the City's costs related to the Baylands Golf Links' reconstruction project and refinance a small 2002 COP bond. • VMware and Palo Alto jointly announced potentially developing a microgrid at the VMware headquarters campus that could serve as a charging site for the City's emergency command vehicles during major emergencies and power outages. • Santa Clara County Healthy City Awards named the City of Palo Alto as the Best Overall, 2018. • City of Palo Alto policies earned an A grade in the American Lung Association's annual State of Tobacco report. • The City recently received an AA+ credit rating related to the California Avenue Certificate of Participation (COP) bond issuance. In addition, S&P Global Ratings has affirmed the City's AAA rating for the City's General Obligation (GO) bonds. Both ratings are the highest possible for these respective debt obligations. ▪ The International City/County Managers Association recognized Palo Alto with the Voice of the People award for Excellence in the Natural Environment. The Voice of the People Awards is the only award given in local government based on community opinion. ▪ City of Palo Alto received an "A" for its response to CDP's (Carbon Disclosure Project) 2018 questionnaire, which placed the City in the Leadership scoring band. A Leadership score indicates a report which demonstrates best practice standards across adaptation and mitigation. These Cities have set ambitious but realistic goals and made progress towards achieving those goals. 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. ▪ Work with Rail Committee, citizens, and stakeholders to achieve agreement on a grade separation alternative for rail crossings. As a result, the options for grade separation have been reduced from 36 to 6; further refinement is being pursued. • Engaging the Santa Clara County Board of Supervisors and Stanford University for a General Use Permit that mitigates the negative impacts of proposed expansion at Stanford University. ▪ 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. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 175 CITY MANAGER • Further implement the Cool Block Community Engagement program to develop and strengthen the citizen/local government relationships and enable authentic partnerships in building community. The City kicked off the third pilot program of the Cool Block Palo Alto; the goal of this pilot is to add 25 additional blocks to the program and increase community engagement in City programs, especially sustainability programs. • Completed 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. • Created and launched an internal Leadership Cohort to provide leadership development training, coaching, and mentoring to managers serving the City of Palo Alto. The program's first cohort concluded in 2018 and the second cohort continues in 2019. 176 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Summary FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Office City Manager's Office 2,892,286 3,715,982 4,417,856 4,547,803 129,947 Office of Transportation 2,094,253 1,664,873 1,917,682 2,312,134 394,452 Total 4,986,539 5,380,855 6,335,538 6,859,937 524,399 2.9% 20.6% 8.3% Revenues City Manager's Office 1,025,987 1,264,173 2,232,948 1,962,712 (270,236) (12.1)% Office of Transportation 204,486 162,655 141,332 141,332 —% Total Revenues 1,230,473 1,426,828 2,374,280 2,104,044 (270,236) (11.4)% Positions by Office City Manager's Office 10.00 12.21 12.00 10.75 (1.25) (10.42)% Office of Transportation 5.85 5.04 4.89 6.68 1.79 36.61% Total 15.85 17.25 16.89 17.43 0.54 3.20% CITY MANAGER • ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 177 CITY MANAGER CITY MANAGER'S OFFICE Goals and Objectives GOAL Implement the City Council's policy direction and ensure their goals and objectives are achieved in a timely manner. Objectives: ▪ Provide timely, accurate, and results -oriented financial and operational reports. • Lead the development of citywide business plans that support achievement of the Council's policies and priorities. • Maintain a highly qualified, engaged, and effective workforce to successfully attain the City's goals and objectives. GOAL 2 Lead the City's management team to ensure the provision of high -quality, cost-effective, and customer -focused services. Objectives: • Provide data and analytics to support informed decision -making processes. ▪ Improve the efficiency of the City's infrastructure, facilities, and equipment to support environmental and fiscal sustainability. • Facilitate a high level of citizen satisfaction with City services. GOAL 3 Advocate sound financial planning by developing and implementing Operating and Capital Improvement Program (CIP) budgets. 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. 178 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER Objectives: • Engage public and private partners to advance community initiatives. • Expand outreach efforts and communications platforms to broaden listening opportunities to encourage citizen participation in local government and community matters. ▪ Ensure timely and responsive resolution to citizens' inquiries. • Preserve transparency and enhance communication with the public. /Key Performance CITIZEN SATISFACTION Goal Objective V ensures Lead the City's management team to ensure the provision of high -quality, cost- effective, and customer -focused services. Facilitate a high level of citizen satisfaction with City services. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2020 Adopted Percent of surveyed who rated the Quality of City Services as "Good" 86% 82% 87% 82% 85% or "Excellent" Percent of surveyed who rated the Value of Services for the Taxes Paid 61 % 58% 67% 58% 63% as "Good" or "Excellent" Percent of surveyed who rated the Overall Image/Reputation of the 86% 83% 92% 83% 88% City as "Good" or "Excellent" The City participates in the National Citizen Survey (NCS), which is a collaborative effort between National Research Center, Inc. and the International City/County Description 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. Purpose 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 meet Status citizens' evolving interests and priorities. The downward trend of citizen satisfaction has occurred in communities throughout the Bay Area. The declines in Palo Alto are not unique and demonstrate that our community is not immune to regional trends. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 179 CITY MANAGER FACILITATE BUSINESS ENGAGEMENT AND ECONOMIC VITALITY Advocate sound financial planning by developing and implementing Operating and Capital Improvement Program (CIP) budgets. Maintain an environment that supports a strong local economy, supporting retailers, employees, and employers. Goal Objective Balance and manage economic growth and development initiatives. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of surveyed who rated Vibrant Downtown and Commercial 73% 71% N/A* 71 % 73% Areas as "Good" or "Excellent" Percent of surveyed who rated Shopping Opportunities as "Good" 82% 79% N/A* 79% 80% or "Excellent" 74% 73% N/A* 73% 73% Percent of surveyed who rated Employment Opportunities as "Good" or "Excellent" Absolute value of sales tax revenue $29,923,000 $31,100,000 $31,246,000 $31,700,000 $34,346,000 Year -over -year percentage increase (0.67)% 0.01% 8.20% in sales tax revenue Description Purpose Status (0.30)% 3.90% 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. The City also looks to performance measures such as sales tax revenue and the year -over -year change as indicators of the strength of the local economy and its connection to the City and the services funded by sales tax. Understanding the community perception of the business environment allows staff to work with developers and investors to ensure the right composition of business and services 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 customer experience. *This was not a performance measure in the FY 2019 Budget. Therefore, the City did not have a target for FY 2019. 180 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER COORDINATE COMMUNICATIONS AND COMMUNITY ENGAGEMENT Goal Objective Percent of surveyed engaged in community issues by attending a local public meeting Percent of surveyed who rated the City's website as "Good" or 72% 65% N/A` 65% "Excellent" Promote and sustain citizen participation and engagement in public matters. Preserve transparency and enhance communication with the public. FY 2017 Actuals 24% FY 2018 Actuals 25% FY 2019 Adopted 25% FY 2019 Estimated 25% Number of subscribers to the City Manager's online newsletter Number of unique visitors to the City of Palo Alto website Percent of surveyed rating the City's public info services (non -Police/ Public Safety) as "Good" or "Excellent" Description Purpose N/A** N/A"" N/A" 6,400 1,002,859 853,343 N/A* 774,063 N/A""" 76% N/A* 78% FY 2020 Adopted 25% 65% 6,900 851,469 78% 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. The City tracks additional performance measures that indicate the volume of traffic to our communications resources (website) and the volume of people receiving our newsletter. 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 Status expanding efforts to increase transparency, information sharing and outreach. In FY 2020, the City anticipates the launch of a redesigned website that will enhance communication between the City and the community. *This was not a performance measure in the FY 2019 Budget. Therefore, the City did not have a target for FY 2019. **This is a new performance measure for which prior years' data is not available. """The National Citizen Survey (NCS) began recording this measure in FY 2018; FY 2017 Actuals are not available nor was there a target for FY 2019. Workload V ensures Number of City Council and City Council Committee meetings Total Hours of City Council and City Council Committee meetings FY 2017 Actuals 60 281 FY 2018 Actuals 70 322 FY 2019 Adopted 70 325 FY 2019 Estimated 70 285 FY 2020 Adopted 70 285 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 181 CITY MANAGER 3udget Summary I Dollars by Division Administration and City Management Economic Development Public Communication Sustainability Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,955,938 2,777,772 2,998,094 3,543,655 545,561 18.2% 251,849 163,802 47,033 111,447 64,414 137.0% 193,511 287,076 241,613 257,136 15,523 6.4% 490,988 487,332 1,131,116 635,564 (495,552) (43.8)% 2,892,286 3,715,982 4,417,856 4,547,803 129,947 2.9% Dollars by Category Salary & Benefits Healthcare 115,537 182,623 213,988 220,033 6,045 2.8% Other Benefits 103,583 127,634 77,148 71,067 (6,081) (7.9)% Overtime 118 210 -% Pension 330,387 489,601 593,110 700,537 107,427 18.1% Retiree Medical 125,300 131,822 126,771 130,574 3,803 3.0% Salary 1,367,184 1,846,341 1,908,941 1,986,232 77,291 4.0% Workers' Compensation 6,844 5,188 42,653 69,863 27,210 63.8% Total Salary & Benefits 2,048,954 2,783,419 2,962,612 3,178,306 215,694 7.3% Allocated Charges 168,052 175,155 184,127 203,839 19,712 10.7% Contract Services 497,763 532,169 1,149,935 1,074,935 (75,000) (6.5)% General Expense 166,443 212,202 78,141 77,641 (500) (0.6)% Operating Transfers -Out 2,039 2,039 31,999 2,039 (29,960) (93.6)% Rents & Leases 63 54 154 154 - -% Supplies & Material 8,973 10,945 10,889 10,889 -% Total Dollars by Expense Category 2,892,286 3,715,982 4,417,856 4,547,803 129,947 2.9% Revenues Charges to Other Funds 994,008 1,205,312 1,452,948 1,702,712 249,764 17.2% From Other Agencies - 42,374 780,000 260,000 (520,000) (66.7)% Other Revenue 31,576 16,487 -% 182 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Summary Rental Income Total Revenues FY 2017 Actuals FY 2018 Actuals 403 - FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % -% 1,025,987 1,264,173 2,232,948 1,962,712 (270,236) (12.1)% Positions by Division Administration and City Management Economic Development Public Communication Sustainability Total Staffing Job Classification Administrative Assistant Administrative Associate III Assistant City Manager Assistant City Manager/Utilities General Manager Assistant to the City Manager 7.10 9.35 9.35 9.10 (0.25) (2.67)% 1.00 - - - - -% 0.90 0.90 0.90 0.90 -% 1.00 1.96 1.75 0.75 (1.00) (57.14)% 10.00 12.21 12.00 10.75 (1.25) (10.42) % FY 2017 Actuals 1.00 1.00 2.00 FY 2018 Actuals 1.00 1.00 FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE 1.00 2.00 1.00 1.00 (1.00) 1.00 1.00 256,838 0.25 0.25 FY 2020 Salary (0.25) 178,268 2.00 2.00 2.00 310,045 Chief Communications Officer 1.00 1.00 1.00 1.00 206,170 Chief Sustainability Officer 1.00 1.00 1.00 - (1.00) - City Manager 1.00 1.00 1.00 1.00 - 356,013 Deputy City Manager - 2.00 2.00 1.00 (1.00) 214,115 Executive Assistant to the City 1.00 1.00 1.00 1.00 102,648 Manager Management Analyst - - 0.75 0.75 - 85,800 Manager Communications 1.00 1.00 1.00 1.00 - 121,451 Manager Economic Development 1.00 - - - - - Sub -total: Full -Time Equivalent 10.00 11.25 12.00 10.75 (1.25) 1,831,347 Positions Temporary/Hourly 0.96 Total Positions 10.00 12.21 12.00 10.75 (1.25) 1,831,347 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 183 CITY MANAGER 3udget Reconciliation Prior Year Budget 12.00 4,417,856 2,232,948 2,184,908 Base Adjustments One -Time Prior Year Budget Adjustments Federal Transit Administration (FTA) Grant General Liability Allocated Charges (FY 2019 One - Time Savings) Workers' Compensation Allocated Charges (FY 2019 One -Time Savings) Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salaries and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability City Manager's Office of Sustainability Transition (Ongoing elimination of Chief Sustainability Officer; add of contract funding) Federal Transit Administration (FTA) Grant General Fund Cost Allocation Plan General Expense Adjustment Information Technology Department Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities - (780,000) 5,755 16,997 (29,959) — (787,207) (1.00) (1.00) (780,000) 5,755 16,997 (29,959) (780,000) (7,207) 253,740 253,740 85,495 (127,000) 260,000 (1,250) 15,606 2,827 (4,476) 10,212 495,154 260,000 249,764 509,764 85,495 (127,000) (249,764) (1,250) 15,606 2,827 (4,476) 10,212 (14,610) Total FY 2020 Base Budget 11.00 4,125,80 2,163,091 Budget Adjustments 1 Recruitment and Retention Initiatives 2 Contractual Funding for Office of Sustainability 3 Economic Development Funding Augmentation 4 City Manager's Office Staffing Realignment Total Budget Adjustments — I (0.25) (0.25) 250,000 100,000 72,000 422,000 250,000 100,000 72,000 422,000 Total FY 2020 Adopted Budget 10.75 4,547,803 1,962,712 2,585,091 184 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER Budget Adjustments 1 Recruitment and Retention Initiatives 0.00 250,000 250,000 This one-time action provides $250,000 in funding for various recruitment/retention initiatives throughout the organization. This funding is in an addition to $500,000 which has been appropriated into a reserve in Non - Departmental, discussed at greater length in that section of this Budget. This $250,000 represents initial funding that can be used to start recruitment/retention initiatives. The City of Palo Alto faces incredible competition for attracting and retaining a high -quality workforce; this funding represents an important commitment to addressing that competition and investing in the City's human capital. Staff anticipates returning to the full City Council with recommendations throughout 2019, including a plan for the use of the reserve in Non-Departmental.(Ongoing costs: $0) Performance Results © 0 This action will ensure the City is able to recruit and retain a high -quality workforce, increasing the quality of services and customer satisfaction. 2 Contractual Funding for Office of Sustainability 0.00 0 100,000 This action adds one-time contractual funding of $100,000 to the Office of Sustainability to fund expenses related to implementation of the Sustainability/Climate Action Plan (S/CAP). This funding will ensure that sufficient resources are available to cover a Greenhouse Gas (GHG) emissions reduction calculation and sustainability benefit analysis as well as a CEQA review of the City's S/CAP. This funding is provided through the reappropriation of the Sustainability Contingency as discussed elsewhere in this Budget. The balance of the Sustainability Contingency is included in the Non -Departmental section of this Budget. (Ongoing costs: $0) Performance Results 0 This grant will contribute to the City's sustainability goals and addresses the City Council's 2019 priority of addressing climate change. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 185 CITY MANAGER 3udget Adjustments Budget Adjustments Positions Expenditures • Net Revenues General Fund 3 Economic Development Funding Augmentation 0.00 72,000 As directed by the City Council on June 17, 2019, this one-time action provides $72,000 in funding to the City Manager's Office for economic development. This funding is anticipated to bolster proactive outreach to the local business community and enhance the City's economic development efforts. This action is offset by a reduction to the Budget Uncertainty Reserve (City Council). (Ongoing costs: $0) Performance Results © 0 This action will increase the ability of the City Manager's Office to support economic development activities. 4 City Manager's Office Staffing Realignment This cost -neutral action will realign staffing in the City Manager's Office to ensure staffing levels commensurate with the needs of the Office. This action eliminates 1.0 Assistant City Manager/Utilities General Manager (0.25 FTE in the General Fund, 0.75 FTE in the Utilities Funds), 1.0 Deputy City Manager, and 1.0 Administrative Associate Ill, offset by the addition of 1.0 Assistant City Manager and 1.0 Administrative Assistant. This action will ensure greater capacity in the City Manager's Office to provide organizational leadership, manage significant initiatives, provide additional administrative and analytical support to the office, and results in no additional expenses in the General Fund. (Ongoing costs: $0) Performance Results © O This action will increase the ability of the City Manager's Office to respond to organizational needs. 186 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER OFFICE OF TRANSPORTATION Mission Statement The Office of Transportation's mission is to preserve and enhance the quality of life for Palo Alto residents, visitors, and businesses by providing efficient and cost-effective transportation services for all modes of transportation. Purpose The purpose of the Office of Transporta- tion is to improve the safety of the users of all modes of transportation, reduce reli- ance on single -occupancy vehicles, address congestion, and reduce through traffic and non-resident parking in Palo Alto neighborhoods, leading to an integrated transportation system that serves local, regional, and intercity travel. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 187 CITY MANAGER Chief Transportation Official Administration 1.00 Management Analyst 1.00 Administrative Assistant Mobility 1.00 Transportation Project Manager 1.00 Senior Transportation Planner 1.00 Associate Planner 2.00 Safe Routes to School Coordinators Parking & Shuttle Management 1.00 Parking Manager 1.00 Parking Operations - Lead 0.48 Administrative Specialist Engineering 1.00 Senior Engineer 1.00 Traffic Operations - Lead 2.00 Project Engineer 1.00 Associate Engineer lir FY 2020 POSITION TOTALS 15.00 - 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. 188 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER Description The Office of Transportation (OOT) was established in recognition of the scale, complexity, and level of citizen engagement related to transportation. High -profile issues include the separation of at -grade rail crossings, neighborhood traffic safety and bike boulevards, permit parking, traffic mitigation, and the safety of vulnerable road users. The Office is responsible for mobility, engineering, and parking in coordination with other City departments and agencies (such as Valley Transportation Authority, Caltrain, Metropolitan Transportation Commission, California Public Utilities Commission, Palo Alto Unified School District and neighboring cities) through the following: MOBILITY: Responsible for sustainable transportation systems that aim to reduce traffic congestion and auto emissions through increased pedestrian, bicycle, public transportation use, and other alter- native modes of transportation. Programs include: Bicycle and Pedestrian - This program includes the discrete capital improvement projects and the programmatic elements needed to implement goals of the Palo Alto Bicycle & Pedestrian Transportation Plan, including the Neighborhood Traffic Safety & Bicycle Boulevard project. This program also provides staffing to the Pedestrian and Bicycle Advisory Committee (PABAC). Palo Alto Shuttle - This program provides free shuttle services on two different routes - one from Downtown to the Baylands Business Park and the other from Downtown to South Palo Alto. Safe Routes to School - In partnership with the Palo Alto Unified School District (PAUSD) and Palo Alto PTA, this program aims to reduce risk, and educate and encourage more families to safely walk, bicycle, bus, and carpool to school. It also includes the development of capital improvement projects to provide safer routes to schools. PARKING: Plan, develop, and administer the Residential Permit Parking (RPP) program, parking in the City's garages and lots, and on -street parking in business districts. ENGINEERING: Oversee the City's traffic and transportation infrastructure investments through long- and short- range plans, corridor plans, traffic studies, and review of proposed private developments; transportation demand management initiatives; traffic impact fees; and regional coordination. Projects include: CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 189 CITY MANAGER Rail Grade Separations: This is a monumental capital improvement to improve safety at existing railroad crossings. This project will span more than a decade to complete planning, environmen- tal review, design, and construction. Traffic Operations & Capital Improvement Projects: These projects include the monitoring, oper- ations, and modifications of the traffic system; investigation and response to citizen inquiries; and development of plans and funding for capital improvement projects that provide enhanced safety and relieve traffic congestion. Accomplishments • Conducted enhanced community engagement and advanced the rail grade separation project by evaluating and reducing the number of possible alternatives to six. ▪ Evaluated the Residential Permit Parking Program (RPP) and related parking services. ▪ Initiated the development of a new online parking permit and citation management system. • Continued to increase the number of middle and high school students biking to school. ▪ Upgraded the pedestrian crossing at Colorado Avenue/Sandra Place. ▪ Completed design of the enhanced bikeway at Embarcadero and El Camino Real. ▪ Revised Transportation Impact Fee in alignment with Impact Fee nexus study (CMR 9531). ▪ Completed portions of Phase 1 of the Neighborhood Traffic Safety & Bicycle Boulevard project. ▪ Conducted the Middlefield North Traffic Safety Pilot Project and had it permanently adopted. ▪ Implemented signal modifications and improvements at 10 intersections and along two corridors. • Completed Quarry Road path and striping improvements. Initiatives • Achieve the following Rail Grade Separation program milestones: select the preferred solution, obtain commitment for Measure B funds, and start the environmental process. • Update the community engagement process for transportation projects. • Evaluate effectiveness of Phase 1 of the Neighborhood Traffic Safety & Bicycle Boulevard project. • Start Phase 2 of the Neighborhood Traffic Safety & Bicycle Boulevard project. • Initiate update of the Bicycle and Transportation Plan. • Initiate conversion of transportation impact methodology from Level of Service (LOS) to Vehicle Miles of Travel (VMT) per state law. • Revise RPP Program to enhance its effectiveness and sustainability. • Implement the parking permit and citation management system. 190 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER ▪ Research updates to the Parking Ambassador Program to increase garage capacity. • Develop outcome -based performance measures for all transportation programs with links to the Annual National Citizen Survey where appropriate. ▪ Enhance professional development for the Office of Transportation to optimize staff abilities and productivity. • Complete the Palo Alto Safe Routes to School City, Palo Alto Unified School District (PAUSD) and Parent Teach Association (PTA) Partnership Five -Year Work Plan objectives to help grow and strengthen community -wide support through the Safe Routes to School model for safe, active, healthy, and sustainable school commutes. Goals and Objectives GOAL 1 Provide, design, and implement transportation services that meet or exceed the expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objectives: • Improve traffic flow on major streets ▪ Increase ease of public parking • Increase ease of travel by bicycle in Palo Alto ▪ Increase ease of walking in Palo Alto • Increase number of shuttle riders GOAL 2 Ensure that services are delivered efficiently and continue to improve. Objectives: ▪ Institute a revised community engagement process for transportation projects. • Revise RPP Program to enhance its effectiveness and sustainability. • Increase or add automated data collection systems. GOAL 3 Increase the professional capacity of the members of the Office of Transportation. Objectives: ▪ Work collaboratively with staff to create and institute a professional development plan to optimize the abilities and productivity of Transportation staff. ▪ Develop a career development plan to promote the retention of Transportation staff. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 191 CITY MANAGER Key Performance ti easures* CITIZEN SURVEY - TRAFFIC FLOW ON MAJOR STREETS Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Improve traffic flow on major streets. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent surveyed residents rating the traffic flow on major streets as good or excellent Description Purpose Status 30% 33% N/A 28.% 30% The City participates in the National Citizen Survey (NCS) which asks residents to rate their perception of traffic flow on major streets. The NCS is a collaborative effort between the National Research Center and the International City/County Management Association. To obtain feedback from residents on the traffic flow on major streets to determine the perceived functionality of major streets. FY 2020 will be the first fully operational year of the new Office of Transportation and the unit will be working to fill key staffing positions. CITIZEN SURVEY - EASE OF PUBLIC PARKING Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Increase ease of public parking FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of surveyed residents rating the amount of parking as good or excellent Description Purpose Status 33% 32% N/A 34% 38% The City participates in the National Citizen Survey (NCS) which asks residents to rate their perception of the ease of public parking. The NCS is a collaborative effort between the National Research Center and the International City/County Management Association. To obtain feedback from residents on the ease of public parking to determine if the program's resources are appropriate. FY 2020 will be the first fully operational year of the new Office of Transportation and the unit will be working to fill key staffing positions. *The Office of Transportation was created in FY 2020. The Key Performance Measures and Workload Measures in this document reflect the available information as of June, 2019. 192 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER NUMBER OF SHUTTLE RIDERS Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Increase the annual number of riders on the Palo Alto shuttle FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of annual shuttle bus riders Description Purpose Status 152,261 N/A 140,000 N/A 145,000 This measure tracks the annual usage of the shuttle program. To track changes in satisfaction and ridership with the shuttle program. FY 2020 will be the first fully operation year of the new Office of Transportation and the unit will be working to fill key staffing positions. Additionally, a new shuttle RFP was completed at the end of FY 2019 and the new shuttle provider will have some onboarding time in FY 2020 thus the data may not represent a full year. The FY 2018 Actuals data is not available due to issues with data collection. Workload Measures* Number of transportation inquiries to 311 Number of households in RPP district FY 2017 Actuals 297 N/A FY 2018 Actuals 328 N/A FY 2019 Adopted N/A FY 2019 FY 2020 Estimated Adopted 200 275 N/A 7,734 7,850 Number of students reached through educational programs with N/A N/A N/A 6,767 6,800 Safe Routes to School Number of development projects reviewed N/A N/A N/A 62 65 Number of traffic signals maintained N/A N/A N/A 101 101 *The Office of Transportation was created in FY 2020. The Key Performance Measures and Workload Measures in this document reflect the available information as of June, 2019. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 193 CITY MANAGER 3udget Summary J Dollars by Division Administration Engineering and Planning Programs Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 290,134 261,621 280,491 624,274 343,783 122.6% 1,399,315 606,628 727,465 532,481 (194,984) (26.8)% 404,804 796,624 909,727 1,155,380 245,653 27.0% 2,094,253 1,664,873 1,917,682 2,312,134 394,453 20.6% Dollars by Category Salary & Benefits Healthcare 60,174 67,804 75,144 121,341 46,196 61.5% Other Benefits 10,656 12,328 15,000 24,821 9,821 65.5% Overtime 1,375 1,459 7,405 7,597 193 2.6% Pension 147,503 125,212 154,135 295,707 141,572 91.8% Retiree Medical 56,034 58,534 74,971 77,220 2,249 3.0% Salary 555,581 461,605 578,346 854,147 275,801 47.7% Workers' Compensation 15,948 17,523 1,575 9.9% Total Salary & Benefits 831,324 726,942 920,949 1,398,355 477,407 51.8% Allocated Charges 115,259 121,435 146,294 - (146,294) (100.0)% Contract Services 870,531 624,852 617,779 642,779 25,000 4.0% Facilities & Equipment 6,220 25,000 21,000 (4,000) (16.0)% General Expense 270,919 189,595 194,630 244,750 50,120 25.8% Operating Transfers -Out 7,780 (7,780) (100.0)% Supplies & Material 2,049 5,250 5,250 - -% Total Dollars by Expense Category 2,094,253 1,664,873 1,917,682 2,312,134 394,453 20.6% Revenues Operating Transfers -In 128,000 128,000 128,000 128,000 Other Revenue 55,004 1,195 Permits and Licenses 21,482 33,460 13,332 13,332 Total Revenues 204,486 162,655 141,332 141,332 -% 194 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Summary 1 Positions by Division Administration Engineering and Planning Programs Total Staffing Job Classification Administrative Assistant Administrative Associate III Associate Engineer Associate Planner Chief Transportation Official Coordinator Transportation Systems Management FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 0.50 0.55 0.50 2.18 1.68 336.00% 3.15 1.90 2.18 1.70 (0.48) (22.02)% 2.20 2.59 2.21 2.80 0.59 26.70% 5.85 5.04 4.89 6.68 1.79 36.31% FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget 0.70 0.70 0.30 1.00 0.73 0.65 - 0.24 0.60 0.37 0.55 0.60 0.88 0.74 FY 2020 Adopted Budget 0.50 0.30 0.30 0.70 1.25 FY 2020 Change FTE 0.50 (0.30) (0.35) 31,787 0.06 29,619 0.15 143,416 0.51 126,149 FY 2020 Salary 46,500 Management Analyst - - 0.02 0.50 0.48 52,718 Parking Operations - Lead 0.20 - 0.10 - (0.10) - Program Assistant II 0.35 0.60 - - - - Project Engineer 1.15 0.50 0.50 0.45 (0.05) 57,797 Senior Engineer 0.20 0.20 31,680 Senior Planner 0.30 0.15 0.28 0.50 0.22 60,968 Traffic Engineering -Lead 0.10 0.38 0.65 0.35 (0.30) 41,766 Transportation Planning Manager 0.85 0.20 0.36 1.15 0.79 167,065 Sub -total: Full -Time Equivalent 5.85 4.51 4.39 6.20 1.81 789,464 Positions Temporary/Hourly 0.53 0.50 0.48 (0.02) 30,122 Total Positions 5.85 5.04 4.89 6.68 1.79 819,586 Note: The Office of Transportation was established in FY 2020. Previously, transportation activities were budgeted in the former Planning and Community Environment Department. As part of the FY 2020 budget process, the Planning and Community Environment Department and Development Services Department have been merged into the Planning and Development Services Department. Prior year values appearing in the Budget Summary tables and Staffing tables of this section have been estimated to and do not reflect a comprehensive restatement. Certain prior year shared administrative functions appear in the Planning and Development Services Department as these are budgeted at the department level rather than program. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 195 CITY MANAGER 3udget Reconciliation One -Time Prior Year Budget Adjustments None Adjustments to Costs of Ongoing Activities Santa Clara Valley Transportation Authority (VTA) Plan Membership Vehicle Miles Traveled (VMT) Estimation Tool Shuttle Service Contracts 26,000 14,000 25,000 26,000 14,000 25,000 Adjustments to Costs of Ongoing Activities 65,000 65,000 Total FY 2020 Base Budget 65,000 65,000 Budget Adjustments 1 Reallocation of Transportation Staffing and Operations (Transfer from the Planning and Development Services Department to the Office of Transportation) 2 Parking Citation Review Staffing 3 Parking and Shuttle Programs 4 Transportation Capital Improvement Projects 5 Safe Routes to School 5.57 2,017,904 0.48 0.50 0.20 (0.07) 29,091 126,351 53,120 20,668 141,332 1,876,572 29,091 126,351 53,120 20,668 Total Budget Adjustments 6.68 2,247,134 141,332 2,105,802 Total FY 2020 Adopted Budget 6.68 2,312,134 MEI 2,170,802 196 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Adjustments Positions Expenditures Net General Fund 1 Reallocation of Transportation Staffing and Operations (Transfer from the Planning and Development Services Department to the Office of Transportation) 5.57 2,017,904 L 141,332 1,876,572 This ongoing action realigns the funding of various positions and transportation activities from the Planning and Development Services Department to the Office of Transportation in order to establish a dedicated office for transportation and traffic programs. The newly established office is situated in the City Manager's Office and will provide analytical support and manage the General Fund programming, three parking funds, and capital improvement programming for transportation capital investments. This realignment of funding is a net -zero transaction across all City funds that shifts a total of 14.62 FTE positions, including 5.57 FTE positions in the General Fund, 3.60 FTE positions in Parking Funds, and 5.45 FTE positions in the Capital Improvement Fund. Additionally, this action realigns $845,000 in non -salary expenditures from the Planning and Development Services Department to the Office of Transportation for continued operational costs of bicycle and pedestrian programs, City shuttle services, and safe routes to school. These costs are partially offset by $141,332 in State gas tax revenues that are earmarked for transportation and traffic -related improvements. A corresponding adjustment is recommended in the Planning and Development Services Department. (Ongoing net costs: $2,069,561) Performance Results © 0 This action realigns staffing to establish an Office of Transportation and address the City Council priority to mitigate traffic and transportation challenges. 2 Parking Citation Review Staffing 0.48 29,091 0 29,091 This ongoing action reallocates a vacant 0.48 FTE Administrative Specialist from the City Clerk's Office to the newly established Office of Transportation. This position's duties include initial review of various citations, including Residential Preferential Parking citations. This preliminary review function is not typically a function of a City Clerk's Office and would be better positioned in the Office of Transportation. Aligning the workload of citation review in the Office of Transportation will also ensure clear lines of communication about citations and the process for resolving them. It is anticipated that this position will also be able to offer additional administrative support beyond preliminary review of citations to the Office of Transportation. A corresponding recommendation to reduce this position is included in the City Clerk's Office department section. (Ongoing costs: 30,985) Performance Results © 0 This action more accurately aligns the duties of this position to the Office of Transportation and will ensure clear communication and efficient citation review. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 197 CITY MANAGER 3udget Adjustments udget Ad'ustments Net Expenditures Revenues General Fund 3 Parking and Shuttle Programs 0.50 126,351 0 126,351 This ongoing action adds 1.0 FTE Parking Manager for parking and shuttle programs to provide daily oversight and strategic planning for parking and shuttle programs citywide. This position will report to the Chief Transportation Official with the Parking Operations Lead as their team, and will strategically implement the City's parking goals while ensuring a quality customer service experience. This position is a management classification and will act as the primary authority and contact on all parking and shuttle concerns. This hands-on, working manager will help develop and implement City Council's parking workplan which will include oversight of the residential and employee permit programs in Downtown, California Avenue, and the Residential Preferential Parking Program areas (RPP). The Parking Manager will also implement any new future initiatives that could come from the workplan (such as paid parking). In an internal evaluation from a consultant, one additional Parking Assistant position was recommended; however, staff does not recommend bringing that position forward at this time. Only the most critical positions are being brought forward for addition this year. The total cost of the position is $252,701 and is recommended to be allocated at 0.50 FTE to the General Fund Operating Budget and 0.50 FTE to Parking Funds. (Ongoing costs: $126,351) Performance Results © 0 This action provides a dedicated full-time resource to administer and implement initiatives associated with parking and shuttle services. 4 Transportation Capital Improvement Projects • 0.20 • 53,120 0 53,120 This ongoing action adds 1.0 FTE Senior Engineer to oversee the capital investments and engineering team as well as be the primary project manager for all initiatives related to the grade separation evaluation and identification and execution of a preferred alternative. Similar to the organization of the Public Work's Engineering Division, this Senior Engineer will be a working manager with technical expertise and strategic oversight over the transportation capital improvements and coordinate closely on project handoffs between the Public Works engineering team and this transportation team. This manager and the associated team will primarily work on the stakeholder engagement, traffic analysis, conceptual design, and environmental work of capital improvements and will then transition projects to the Department of Public Works engineering division for construction and final project construction and execution. The total cost of this position is $265,602 and is recommended to be allocated at 0.20 FTE to the General Fund Operating Budget and 0.80 FTE to the Capital Improvement Fund. (Ongoing costs: $55,359) Performance Results © 0 This actions provides a dedicated full-time resource to oversee the various transportation related capital projects that are planned or in progress. 5 Safe Routes to School -0.07 20,668 0 = 20,668 This ongoing action augments an existing 0.50 FTE Coordinator Transportation Systems Management position to a 1.0 FTE Coordinator Transportation System Management position, partially offset by the elimination of a vacant 0.57 FTE Management Specialist position. This action will better align staffing with the organizational and programmatic needs of the Safe Routes to School Program. This position will assist with education and events that reduce risks to students and encourage more families to walk, bike, and use other alternatives to driving to school. The net cost of this position is recommended to be allocated at 0.50 FTE to the OOT General Fund Operating Budget and 0.50 FTE to the General Capital Fund, with the offsetting position elimination resulting in a net decrease of 0.07 FTE in the General Fund. (Ongoing costs: $24,099) Performance Results © 0 This action provides a dedicated full-time resource to ensure consistency of the program. 198 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES • Mission Statement The Administrative Services Department strives to provide proactive financial and analytical support to City departments and decision -makers and to safeguard and facilitate the optimal use of City resources. Purpose The purpose of the Administrative Services Department is to provide excellent cus- tomer service to decision -makers, the pub- lic, employees, and City departments; provide analytical, organizational, and administrative support for a wide variety of projects; record, monitor, and protect City assets in a responsible manner; provide essential financial management and forecasting reports; and prepare and present financial reporting to various committees and City Council. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 199 ADMINISTRATIVE SERVICES ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER Kiely Nose ADMINISTRATION 1.00 Administrative Assistant 0.50 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 PURCHASING & CONTRACTS 1.00 Chief Procurement Officer 4.00 Contract Administrator 1.00 Administrative Associate II 1.00 Buyer 2.00 Senior Buyer RISK MANAGEMENT 0.40 Manager of Treasury, Debt & Investment 0.10 Senior Management Analyst 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 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 PRINT & MAIL SERVICES 2.00 Offset Equipment Operator REAL ESTATE 1.00 Real Property Manager 1.00 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 FY 2020 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 200 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 operating and capital budget preparation, review, and analysis, perfor- mance measures, and budget monitoring. In addition, prepares the long-range financial forecast and provides independent analytical support to the organization. PROPERTY MANAGEMENT AND ACQUISITION Provides asset management, acquires property rights, manages leasing of City properties, pre- pares real estate agreements, completes easement acquisitions/vacations, negotiates real estate deals, and provides real estate services citywide. TREASURY AND REVENUE COLLECTIONS Treasury safeguards and invests the City's portfolio, forecasts major General Fund tax revenues, issues and manages debt, and performs Utility Risk Management oversight. Revenue Collec- tions collects payment revenue and provides customer support for parking permits and pay- ment transactions. Provides print shop services to departments and warehouse services, including logistics, for the City's Electric, Water, Gas, and Wastewater Utilities, as well as for Public Works and the Regional Water Quality Control Plant. Accomplishments • Maintained the City's AAA credit rating, which results in the lowest possible borrowing costs; confirmed in the most recent rating by Standard and Poors in February 2019. ▪ Addressed City Council request to identify a strategy for ongoing contributions for retirement costs through immediate action and a strategic action work plan. Immediate action was completed with the additional $4.0 million contribution to the City's Pension 115 Trust account. For the strategic action work plan, OMB has been managing and completing a services inventory to aid in structural changes in the long-term financial picture. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 201 ADMINISTRATIVE SERVICES • Drafted and supported a work plan to address the City Council 2019 priority 'Fiscal Sustainability', approved by the Finance Committee in March 2019. ▪ Issued $26.8 million in tax-exempt and $10.6 million in taxable Certificate of Participation bonds for the construction of the California Avenue Parking Garage, which is a key step in the completion of the 2014 Council Infrastructure Plan and a critical project in the ability to deliver the new Public Safety Building. ▪ Managed the City's real estate leases resulting in revenue of approximately $4.0 million. • Began negotiations for real estate transactions including the potential purchase of a 27,829 square foot portion of 3350 Birch Street. ▪ Entered into a new license agreement to renovate and manage/operate the City Hall Cafe at 250 Hamilton Avenue. ▪ Explored and identified options for City Council to calculate the long-term unfunded liabilities for pension. Facilitated the analysis for the change in pension assumptions to a 6.2% discount rate for the normal cost of pension expense. Continued to advance funds to the Pension Section 115 Trust with approximately $13.5 million in deposits by the end of Fiscal Year 2019. ▪ Completed 20 easements and easement vacations. ▪ Consolidated the utility bill print printers with the citywide contract for copy machines resulting in increased efficiency for the utility bill print function. • Participated in citywide emergency preparation and planning to ensure that financial tracking and reporting will be part of a coordinated emergency response effort. ▪ Implemented 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. • Worked to streamline and automate accounts payable automated clearing house (ACH) implementation and Treasury wires between software systems. ▪ Received an award in the Accounting Division for the Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2018 from the Government Finance Officer Associations of United States and Canada (GFOA) for "excellence in financial reporting". ▪ Received California Society of Municipal Finance Officers (CSMFO) and GFOA awards in the Office of Management and Budget (OMB) for the Fiscal Year 2019 Adopted CIP and Operating budgets. • Addressed audit finding in regards to P -card administration through the implementation of a formal review and submittal authorization for increasing P -card limits. 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, and 4) Employee excellence, including customer support resources in purchasing, payroll, and accounting and implementation of electronic forms. 202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES • Maintain employee excellence by focusing on employee rating form, training plans, and specific goals of improving customer service and responsiveness. • Work to implement citywide procurement process training and education to improve efficiency and align with industry best practices and ensure the changing workforce is equipped to handle their procurement needs in an expeditious fashion. Communicate established purchasing policies, processes, and requirements. ▪ Implement department -wide, technology -focused, core competency training such as SAP module specific training for day-to-day business operations in departments and SAP reporting training in the Human Resources and Payroll modules. ▪ Collaborate and facilitate the implementation of a new online parking permit management system in a phased approach, beginning with residential parking permit programs. ▪ Continue to work to implement or manage the components of the Fiscal Sustainability work plan. ▪ Continue financial support for emergency preparation for federal financial reporting after a disaster in conjunction with the Office of Emergency Services. • Work to implement the paperless office program, currently in the Purchasing Division, for the Accounting and Real Estate divisions. ▪ Support the citywide effort to upgrade the Enterprise Resource Planning (ERP) system. ▪ Explore and provide options for the acquisition of the Media Center property at 900 San Antonio Road on behalf of the Cable Joint Powers Agency (JPA) using PEG (Public, Education, and Government) fee revenue for the Cable JPA and City Council review. ▪ Support the Cubberley strategic planning efforts and necessary financial analysis with the community and Palo Alto Unified School District (PAUSD). ▪ Establish a new option and lease agreement with the Palo Alto History Museum for the Roth Building at 300 Homer Avenue. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 203 ADMINISTRATIVE SERVICES 3udget Summary FY 2017 FY 2018 Actuals Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 FY 2020 Budget Change $ Change % Dollars by Fund General Fund -Operating Printing & Mailing Services Fund Total 7,378,820 7,680,331 8,028,509 8,519,330 490,822 1,364,905 1,644,249 1,481,584 1,730,856 249,272 8,743,725 9,324,580 9,510,092 10,250,186 740,094 6.1% 16.8% 7.8% Revenues Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0% Charges to Other Funds 3,742,337 4,090,745 3,335,030 3,186,802 (148,228) (4.4)% Other Revenue 144,894 145,266 171,400 171,400 —% Returnonlnvestments (140) (1,100) 400 2,300 1,900 475.0% Total Revenues 3,891,737 4,248,801 3,519,400 3,548,175 28,776 0.8% Positions by Fund General Fund 41.50 40.06 39.61 40.61 1.00 2.52% Printing and Mailing Services 2.10 2.10 2.10 2.10 —% Total 43.60 42.16 41.71 42.71 1.00 2.40% 204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 City Council's 2014 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 the City's real estate assets such as Cubberley, Ventura, and Middlefield Road lots. • Manage real estate assets effectively to enhance revenue and reduce cost. • Recommend a strategically balanced budget, maintaining City 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. • Provide bond financing of major capital projects such as the Wastewater Treatment facility replacements, Public Safety Building, etc. 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; look for opportunities to improve reporting as part of technology implementation upgrades. • Increase information availability and transparency using open data tools and dashboards. • Implement complex new labor agreements including new benefit structures, ensuring timely and accurate payments to employees and governing bodies such as the federal government and CaIPERS. GOAL 3 . Ensure public funds and assets are invested prudently and are well -managed. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 205 ADMINISTRATIVE SERVICES Objectives: • Ensure sufficient cash is always available to meet current expenditures. • Maintain a reasonable rate of return on investments. • Invest in sound Environmental, Social, and Governance (ESG) securities, which include green and sustainable bonds, when available and appropriate, in alignment with recently approved changes to the investment policy. 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, enhance, and streamline. • Roll out 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 Office 365 and 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Annual percentage yield on investments Description Purpose Status 1.82% 2.16% 2.15% 2.31% 2.40% 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, the State Investment Pool average yield for FY 2018 was 1.36%. 206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals 22 FY 2018 Actuals 26 FY 2019 Adopted 22 FY 2019 Estimated 25 FY 2020 Adopted 25 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. The Purchasing Division has maintained efficiency with the use of e -Procurement software that was implemented in FY 2016. Staff anticipates an increase in larger, more complex PRs in FY 2020 due to the volume of capital improvement projects planned over the next several years. This influx of capital projects will result in an increase in estimated cycle time. Over the next year, the Purchasing Division will continue to work with City stakeholders to meet business needs in a timely manner despite this uptick in complex procurements. ensures Number of P -card (City credit card) transactions Number of Purchase Orders and Purchase Requisitions processed1 FY 2017 Actuals 19,087 FY 2018 Actuals 19,230 1,509 1,455 FY 2019 Adopted 19,100 FY 2019 Estimated 17,500 FY 2020 Adopted 18,000 2,400 1,400 1,500 Total amount of cash and investments - as of June 30 $532.1 $526.0 $540.0 $523.0 $530.0 (Millions) 1The Administrative Services Department has refined the methodology for reporting this Workload Measure to more accurately reflect the volume of work performed. As such these numbers differ slightly from previously reported numbers. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 207 ADMINISTRATIVE SERVICES 3udget Summary FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division Accounting 2,043,348 2,154,241 2,313,999 2,517,142 203,143 8.8% Administration 700,131 701,429 502,573 362,163 (140,410) (27.9)% Office of Management and Budget 1,019,241 1,471,554 1,427,663 1,515,138 87,475 6.1% Purchasing 1,439,096 1,561,940 1,609,770 1,719,881 110,110 6.8% Real Estate 862,337 567,478 651,916 682,402 30,486 4.7% Treasury 1,314,666 1,223,689 1,522,588 1,722,605 200,017 13.1% Total 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1% Dollars by Category Salary & Benefits Healthcare 613,176 659,957 720,469 786,754 66,285 9.2% Other Benefits 121,110 164,532 163,209 169,450 6,241 3.8% Overtime 21,488 23,104 34,599 35,499 900 2.6% Pension 1,019,697 1,185,868 1,266,442 1,661,345 394,903 31.2% Retiree Medical 536,733 564,670 473,449 487,653 14,203 3.0% Salary 3,841,677 4,146,162 4,257,849 4,198,750 (59,098) (1.4)% Workers' Compensation 20,338 39,412 108,269 171,647 63,377 58.5% Total Salary & Benefits 6,174,219 6,783,704 7,024,287 7,511,098 486,811 6.9% Allocated Charges 364,415 405,529 443,050 461,207 18,157 4.1% Contract Services 323,681 304,787 238,148 288,148 50,000 21.0% Facilities & Equipment 270,979 2,570 4,200 4,200 -% General Expense 198,066 144,980 206,924 207,924 1,000 0.5% Operating Transfers -Out - 65,146 - (65,146) (100.0)% Rents & Leases 11,856 12,856 12,856 12,856 -% Supplies & Material 35,602 25,905 33,898 33,898 -% Total Dollars by Expense Category 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1% Revenues Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0% Charges to Other Funds 2,403,540 2,333,469 1,768,909 1,466,507 (302,402) (17.1)% 208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES 3udget Summary Other Revenue Total Revenues FY 2017 Actuals 142,894 2,551,080 FY 2018 Actuals 145,266 2,492,625 FY 2019 Adopted Budget 171,400 1,952,879 1,825,580 (127,298) (6.5)% FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 171,400 - % Positions by Division Accounting 13.60 13.60 13.52 13.52 Administration 2.08 1.60 1.60 1.60 Office of Management and Budget 6.02 6.62 6.02 6.02 Purchasing 9.53 8.57 9.05 9.05 Real Estate 2.32 2.32 2.32 2.32 Treasury 7.95 7.35 7.10 8.10 Total 41.50 40.06 39.61 40.61 Staffing Account Specialist Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate Ill Assistant Director Administrative Services FY 2017 Actuals 5.88 4.05 3.00 1.00 1.00 1.65 FY 2018 Actuals 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 1.65 1.65 FY 2020 Adopted Budget 4.63 3.45 3.00 1.00 1.00 1.00 1.65 - % - % - % -% -% 1.00 14.08% 1.00 2.52% FY 2020 Change FTE FY 2020 Salary 306,563 244,507 - 288,642 93,018 70,986 76,090 - 318,798 Buyer 1.00 1.00 1.00 1.00 - 93,459 Chief Procurement Officer 1.00 1.00 1.00 1.00 - 148,512 Contracts Administrator 1.70 2.70 2.70 2.70 301,463 Director Administrative Services/ 0.80 0.80 0.80 0.80 199,845 CFO Director Office of Management and 1.00 1.00 1.00 1.00 - 199,035 Budget Management Analyst 1.00 2.00 1.00 219,336 Manager Accounting 1.00 1.00 Manager Budget 1.00 1.00 2.00 2.00 - 312,770 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 209 ADMINISTRATIVE SERVICES Staffing Job Classification Manager Real Property Manager Revenue Collections Manager Treasury, Debt & Investments Manager, Finance FY 2017 Actuals 1.00 0.62 FY 2018 Actuals 1.00 0.62 FY 2019 Adopted Budget 1.00 0.62 FY 2020 Adopted Budget 1.00 0.62 0.60 0.60 0.60 0.60 1.00 1.00 Payroll Analyst 2.00 2.00 2.00 2.00 Senior Accountant 3.00 3.00 3.00 3.00 Senior Buyer 1.00 1.00 1.00 1.00 Senior Management Analyst 4.90 4.90 2.30 2.30 Storekeeper 1.00 1.00 1.00 1.00 Storekeeper -Lead 0.20 0.20 0.20 0.20 Warehouse Supervisor 0.20 0.20 0.20 0.20 Sub -total: Full -Time Equivalent 38.60 38.60 38.15 39.15 1.00 4,412,618 Positions Temporary/Hourly 2.90 1.46 1.46 1.46 - 99,881 Total Positions 41.50 40.06 39.61 40.61 1.00 4,512,499 FY 2020 Change FTE FY 2020 Salary 150,010 95,198 89,407 172,723 157,915 365,664 94,413 312,107 68,918 14,752 18,487 210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 39.61 8,028,509 1,952,878 6,075,631 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (65,146) 12,236 43,147 — (9,763) 313,132 199,820 (3,405) (4,724) 12,336 1,713 20,230 539,102 (302,402) (302,402) (65,146) 12,236 43,147 (9,763) 313,132 199,820 302,402 (3,405) (4,724) 12,336 1,713 20,230 841,504 Total FY 2020 Base Budget 39.61 8,557,848 1,650,476 6,907,372 Budget Adjustments 1 Administrative Services Staffing Vacancies 2 Business Registry Certificate Program (Transfer from former Development Services Department to Administrative Services Department) Total Budget Adjustments 1.00 (277,547) 1.00 239,029 (38,518) 175,103 175,103 (277,547) 63,926 (213,621) Total FY 2020 Adopted Budget 40.61 8,519,330 1,825,579 6,693,751 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 211 ADMINISTRATIVE SERVICES 1 Administrative Services Staffing Vacancies 3udget Adjustments Positions Expenditures Revenues Net General Fund 0.00 (277,547) This one-time action recognizes vacancy savings for the equivalent of 1.0 FTE Senior Management Analyst and 1.0 FTE Accounting Specialist during FY 2020. Currently, the Administrative Services Department is experiencing a vacancy factor of nearly 15%, including positions at these levels. Due to the priority of other staffing recruitments of a more urgent need, such as Purchasing Division staffing, it is anticipated that these recruitments will not be addressed until further through FY 2020 and therefore savings can be anticipated. The functions of these positions are currently being absorbed temporarily by the Chief Financial Officer, Assistant Director, and additional administrative assistance, primarily on overtime. This diminishes staff's ability to continue to make progress on service delivery evolutions and requires staff to rely more heavily on contractual assistant and status quo business processes. (Ongoing savings: $0) Performance Results © O This action is anticipated to help contain costs for FY 2020. 2 Business Registry Certificate Program (Transfer from former Development Services Department to Administrative Services Department) 1.00 239,029 175,103 63,926 This action reallocates the Business Registry Certificate (BRC) program from the former Development Services Department to the Administrative Services Department and reassigns the administrative management of both this program as well as the financial management of the Business Improvement District (BID) to the Administrative Services Department. With the merging of the Development Services Department and the Planning and Community Environment Department, this function was determined to best be placed in Administrative Services where the majority of taxes and administrative fees are handled by various teams with the Treasury Division of the department. This reallocation of 1.0 FTE Management Analyst, $50,000 in contract services, and approximately $175,000 in revenue estimated to be generated from the BRC, aligns the resources added by the City Council in February 29, 2016 (CMR 6661). A corresponding adjustment is recommended in the Planning and Development Services Department. (Ongoing costs: $72,000) Performance Results This action reallocates staff between departments and no performance impacts are anticipated to the Business Registry Certificate program. 212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES PRINTING AND MAILING SERVICES Accomplishments • Processed 300,000 utility bills. ▪ Maintained timelines for producing City Council packets. • In June 2018, replaced an outdated paper cutter with new technology allowing for precision paper cutting in house. Initiatives • Maintain a high level of customer service for Printing and Mailing by listening to customers and, when appropriate, making relevant changes to operations. • Provide quality printing products that meet the needs of customers. Goals and Objectives GOAL 1 • Provide timely and high -quality services for City departments, City Council, and Committees. Objectives: • Ensure timely distribution of mail and utility bills. . Ensure timely creation and distribution of City Council and Committee packets. ADMINISTRATIVE SERVICES • i ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 213 ADMINISTRATIVE SERVICES 3udget Summary J Dollars by Division Printing and Mailing Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8% 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8% Dollars by Category Salary & Benefits Healthcare 24,790 28,566 27,305 28,291 986 3.6% Other Benefits 2,253 3,267 3,135 3,359 223 7.1% Overtime 6,145 4,779 - -% Pension 24,003 30,959 31,636 47,533 15,897 50.3% Retiree Medical 59,845 62,960 14,663 15,103 440 3.0% Salary 106,323 128,064 133,571 142,079 8,508 6.4% Workers' Compensation 239 462 3,289 5,387 2,098 63.8% Total Salary & Benefits 223,597 259,056 213,600 241,752 28,152 13.2% Allocated Charges 177,496 205,990 276,747 360,090 83,343 30.1% Contract Services 10,607 - 114,711 239,711 125,000 109.0% Facilities & Equipment 31,711 - - - - -% General Expense 271,603 370,562 286,975 286,975 - -% Operating Transfers -Out 3,154 1,598 9,200 7,602 475.6% Rents & Leases 494,718 640,236 507,695 512,870 5,175 1.0% Supplies & Material 155,174 165,252 80,258 80,258 -% Total Dollars by Expense Category 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8% Revenues Charges to Other Funds 1,338,798 1,757,276 1,566,121 1,720,295 154,174 9.8% Other Revenue 2,000 - - % Returnonlnvestments (140) (1,100) 400 2,300 1,900 475.0% Total Revenues 1,340,657 1,756,175 1,566,521 1,722,595 156,074 10.0% Positions by Division ' Printing and Mailing 2.10 2.10 2.10 2.10 -% Total 2.10 2.10 2.10 2.10 - -% 214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Staffing Job Classification FY 2017 Actuals Manager Revenue Collections Offset Equipment Operator Sub -total: Full -Time Equivalent 1.62 1.62 1.62 Positions Temporary/Hourly 0.48 0.48 0.48 FY 2018 Actuals FY 2019 Adopted Budget Total Positions 0.10 1.52 2.10 0.10 1.52 0.10 1.52 2.10 2.10 FY 2020 Adopted Budget 0.10 1.52 1.62 0.48 2.10 FY 2020 Change FTE FY 2020 Salary 15,355 95,834 27,256 138,445 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 215 ADMINISTRATIVE SERVICES 3udget Reconciliation Prior Year Budget 2.10 1,481,584 1,566,521 Positions Expenditures Revenues Net Printing and Mailing Services (84,937) One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One -Time FY 2019 Savings) Workers' Compensation Savings (One -Time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Return on Investments Rents & Leases Expenditure Alignment Transfer to Technology Fund (TE-19001 City Council Chambers Upgrade) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities I (1,598) 372 1,311 85 15,724 5,230 5,100 5,175 9,200 83,470 (46) (453) 787 124,187 (1,598) 372 1,311 85 15,724 5,230 5,100 1,900 (1,900) 29,174 31,074 5,175 9,200 83,470 (46) (453) (29,174) 787 93,113 Total FY 2020 Base Budget 2.10 1,605,856 1,597,595 Budget Adjustments 1 Printing Services Non -Salary Expenses 125,000 125,000 Total FY 2020 Adopted Budget 2.10 1,730,856 1,722,595 216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES 3udget Adjustments Budget Adjustments Net Printing and Mailing Positions Expenditures Revenues Services 1 Printing Services Non -Salary Expenses 125,000 U 125,000 This action aligns the non -salary budget to reflect increased costs associated with supplies and materials and contract services for non -routine print jobs. In recent years, activity levels for non -routine print services requests, such as booklets, brochures, and catalogs, from departments have increased while the budgeted expenses have consistently stayed level. These costs are allocated to the departments using print services. Increases to both the expenses and revenues will align funding with current usage levels. (Ongoing net costs: $0) Performance Results These budget increases are anticipated to align funding with current activity levels with minimal impact on the quality of service delivery. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 217 CITY OF PALO ALTO COMMUNITY SERVICES Mission Statement The Community Services Department's mission is to engage individuals and families in creating a strong and healthy community through parks, recreation, social services, arts, and sciences. Purpose The purpose of the Community Services Department is to provide a diverse range of quality programs and services that are highly valued and relevant to the needs of the community. Community Services aims to develop and provide programs for increased knowledge, creativity, artistic expression, physical activity, social help, and enjoyment of the outdoors; seeks to be responsible stewards of many unique community assets including open space, parks and their related interpretive centers, the Animal Shelter, 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 beneficial partnerships and collaborations with local organi- zations, businesses, individuals and foundations to achieve its mission. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 219 COMMUNITY SERVICES COMMUNITY SERVICES DIRECTOR Kristen O'Kane HUMAN SERVICES 1.00 Human Services Manager 1.00 Management Assistant OPEN SPACE, PARKS & GOLF DIVISION 1.00 Division Manager, Open Space, Parks & Golf 1.00 Open Space, Parks & Golf Superintendent 1.00 Coordinator, Recreation Programs 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 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 Ill 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 1.00 Building Service Person - Lead 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 1.00 Building Service Person CUBBERLEY COMMUNITY CENTER 1.00 Community Services Manager 1.00 Program Assistant I 1.00 Program Assistant II 1.00 Building Service Person - Lead 1.00 Building Service Person ARTS & SCIENCES DIVISION PALO ALTO ART CENTER 1.00 Community Services Senior Program 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 THEATER 1.00 Community Services Senior Program Manager 1.00 Theater Specialist 3.75 Producer Arts & Sciences 1.00 Program Assistant I JUNIOR MUSEUM & 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 2020 POSITION TOTALS 78.60 - Full-time 49.29 - Hourly This organizational chart represents citywide Full -Time LEquivalents (FTEs) for this department. The Department Summary table summarizes FTEs by position allocation. 220 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 including 43 miles of trails, 4 community gardens, 4 dog parks, and dozens of sports fields. The division offers programs in ecology and natural history in open space, mainte- nance of facilities for outdoor recreational use in City parks, and a full -service golf complex. 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 youth devel- opment and enrichment, 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 through a contracted vendor, the Rinco- nada Pool. OFFICE OF HUMAN SERVICES Provides funding and coordinates grants to nonprofit organizations through the Human Ser- vices Resource Allocation Process (HSRAP). Provides oversight of the afterschool child care program, the Palo Alto Mediation Program, and the Family Resources database. Serves as a key liaison to local social services organizations and child care providers. Accomplishments • Installed several new public art pieces including a mural titled, "146 Possibilities" by artist Martin Webb at Avenidas and a temporary environmental sculpture called, "Foraging Island by artists Mary O'Brien and Daniel McCormick at Byxbee Park created during their artist -in - residency experience at the Palo Alto Baylands Nature Preserve. Sixty-nine community volunteers ranging in age from six to 90 years old donated a total of 189 hours to help the artists create "Foraging Island". • Collaborated with renowned Bay Area artist Lexa Walsh to create at Cubberley Stock, a community dinner and Public Art event for 50 people. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 221 COMMUNITY SERVICES • Partnered with the San Francisco Bay Joint Powers Authority and the Public Works Department and completed the San Francisquito Creek levee project in Spring 2019. ▪ Reopened an additional 7.7 acre parcel to the public in Foothills Park in November 2018. City Councilmembers, Parks and Recreation Commissioners, as well as members of the public attended. Also reopened, within 18 months of initial closure, two trails (Los Trancos and Costanoan) that had been closed due to landslides at Foothills Park. • Partnered with Public Works and completed the Baylands Boardwalk Project in January 2019. The Baylands contain a Nature Center and Boardwalk to provide education programs for approximately 3,000 elementary students per year with curricula such as Baylands Birds and Secrets of the Salt Marsh. ▪ Converted four road medians areas from turf into native plant pollinator pathways. • Served a record 144,289 people in FY 2018 at the Art Center through a diverse range of programs for all ages. Volunteers at the Art Center contributed 7,837 hours translating to over $200,000 in value of work contributed. • Engaged the Palo Alto Art Center and Palo Alto Art Center Foundation in a strategic planning process, generously funded by The William and Flora Hewlett Foundation. This extensive process involved significant stakeholder feedback, participation with Art Center staff, Foundation staff and board members, donors, city staff, and community members. The process concluded in May 2019 with a strategic framework to provide guidance in future activities. • Opened the temporary Junior Museum & Zoo (JMZ) location at Cubberley Community Center in August 2018 within two months of its closure for renovation in June 2018. • Encouraged Cubberley Artist Studio Program (CASP) to host 26 public programs. As part of the Community Service Requirement, CASP hosted programs including: Winter Open Studios, Public Alchemy Community Exhibition, Meet The CASP Artists, solo and group exhibitions, artist talks, and hands-on workshops. • Received 16 new artworks donated by CASP artists, which were created during their residencies at CASP for enriching the City's collection of public art. • Recognized through an acquisition by the Library of Congress for a work of art titled, "Thank You For Your Service", which was a collaborative comic book project created by CASP artists Daniele Archambault, Paloma Lucas and Servane Briand in collaboration with over 90 Bay Area residents and community members. The book was unveiled by the Palo Alto City Council and gifted to the Palo Alto Libraries. • Became an affiliated partner with Stanford University / Stanford Compression Forum (SCF). The Children's Theatre affiliation and collaboration with SCF will assist in developing performance programs at the intersection of design and the emerging technologies of data compression including augmented and virtual reality. ▪ Completed in FY 2019, the Baylands Comprehensive Conservation Plan , which provides guidance and best practices for managing the habitat, wildlife, and recreational uses at the Baylands Nature Preserve. Conservation plans for Foothills Park, Pearson Arastradero 222 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES Preserve, and Esther Clark Park will begin in FY 2020 to provide management guidance for these open space preserves. ▪ Collaborated with the Palo Alto Unified School District in a master planning and community co -design process for the Cubberley Community Center. Community engagement has been a significant element with four community meetings drawing hundreds of participants. Community fellows have been instrumental in assisting with outreach and meeting facilitation. Staff anticipates that the master plan will be completed in Fall 2019. ▪ Developed a new three-year contract between the City and the Stern Theater Community Partners for a renewed commitment to partnership and capital project cost sharing. ▪ Assumed responsibility and oversight of the City's Animal Shelter, which is run in partnership with Pets -In -Need (PIN), a local non-profit animal rescue group. The City will continue to develop the partnership and help to grow services and programming at the Shelter. Initiatives ▪ Develop new artworks in municipal projects through the Public Art Program, including the rebuilt Fire Station 3, Public Safety Building, the Charleston/Arastradero corridor, and Junior Museum and Zoo, as well as managing dozens of public art in private development projects expected to be constructed in the next few years. ▪ Produce through the Public Art Program, Code:ART2, a three-day public art festival, which will engage residents and commuters by temporarily reframing downtown's underutilized spaces as a laboratory for interactive urban interventions and creative placemaking, sparking dialogue about the future of our downtown. ▪ Continue to explore funding strategies for implementation of the Parks, Trails, Natural Open Space and Recreation Master Plan with assistance from the Parks and Recreation Commission. • Engage in repairs to the Baylands Sailing Station dock to fix critical infrastructure and make it more useable to the community. • Create an agreement with Palo Alto Christian Reformed Church to develop a new community garden site on the church's property in South Palo Alto. • Construct two new pickleball courts, convert one existing tennis court to four dedicated pickleball courts, and stripe two tennis courts for shared pickleball and tennis use at Mitchell Park. ▪ Engage in several Capital Improvement Projects at a variety of parks including Rinconada, Boulware, Cameron, and Ramos Parks to replace the playgrounds and other park amenities. • Engage in a Capital Improvement Project at Cubberley Community Center to replace the synthetic turf field. ▪ Provide through the Baylands Interpretive Program, signage and exhibits for 2.5 miles of trails in the north end of the Palo Alto Baylands, including the Boardwalk. The Program is COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 223 COMMUNITY SERVICES being funded by a partnership between the City of Palo Alto, the State of California, and the Friends of the Palo Alto Parks. Completion is scheduled for September 2020. ▪ Plan approximately 30 Community Service Programs through the Cubberley Artist Studio Program (CASP), which are free and open to all members of the public, including: open studios, solo and group exhibitions, artist panels and lectures, and hands-on workshops. • Launch an initiative at the Palo Alto Children's Theatre to create sensory and spectrum friendly experiences for families. This will include sensory -friendly public performances, and spectrum -friendly camps and classes that are enrolled based on developmental age. ▪ Develop new works commissioned by the Children's Theatre, and funded by the Friends of the Palo Alto Children's Theatre, that celebrate cultural diversity and serve traditionally under -represented audiences, with a commitment to inclusiveness and a goal of reaching diverse audiences. Current plays in development include an adaptation of the Indian folktale One Grain of Rice; LGBTQ+ positive fairy-tales drawn from Latin-American folktales; educational -musical for classrooms, Grammaropolis; and a new adaptation of Sleeping Beauty. • Work with the Magical Bridge Foundation to add more co -sponsored concerts at the Magical Bridge Playground and collaborating to host an Active -Learning focused pilot programming that would serve individuals with multiple disabilities. • Collaborate with the Palo Alto Recreation Foundation (PARF) to host The Black & White Ball on Friday, October 4, 2019. The ball will honor the City's 125th birthday and will be an evening of fun and celebration including non-stop live musical performances. ▪ Begin re -opening of Junior Museum & Zoo (JMZ) starting February 2020. This includes initiating a quarantine for new animals, installing exhibits, and beginning the process of moving staff and materials to the new facility, which is scheduled to open in July 2020. • Launch an initiative at the Art Center, in collaboration with the JMZ and funded by the Institute of Museum and Library Services, called Working Together, which is intended to provide a ladder of engagement to involve diverse populations in meaningful museum work and volunteer experiences, and advance a culture of inclusiveness at both institutions. The program will support paid teen opportunities, paid undergraduate internships, and paid graduate fellowships for diverse youth. 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. 224 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES GOAL 2 Ensure parks and recreational areas are safe and environmentally sensitive. Objectives: • Maintain grounds to be in good condition and facilities to be in good repair. • Protect public land and utilize best management practices for environmental preservation. GOAL 3 Provide innovative, well -managed programs and services. Objectives: ▪ Increase and diversify community involvement and volunteerism. ▪ Monitor cost recovery to facilitate sustainability of programs and services with a goal to maintain or increase cost recovery levels. ▪ Explore partnerships with other agencies to maximize services for the public. /Key Performance Veasures COMMUNITY SERVICES DEPARTMENT ONLINE REGISTRATION AND EFFICIENCY Goal Provide innovative, well -managed programs and services. Objective Increase online class registration. FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Percent of class registrations occurring online 62% 59% 60% 60% Description This measure tracks the utilization rate of online class registration service available. Purpose Increase staff productivity and capacity. Status Currently, online class registration is the preferred method of registration. 60% COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 225 COMMUNITY SERVICES COMMUNITY SERVICES DEPARTMENT OPEN SPACE AND PARKS Goal Objective Ensure parks and recreational areas are safe and environmentally sensitive. Protect public land and utilize best management practices for environmental preservation. FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Percent of surveyed who rate the City's success in preserving natural areas as "Good" or "Excellent" Description Purpose Status 82% 83% 81% 81% 81% 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 10th out of 227 jurisdictions in the 2018 NCS for preservation of natural areas such as open space and green belts. C('MUNITY SERVICES DEPARTMENT PROGRAMS AND SERVICES Goal Objective Provide high quality, relevant, and diverse services and programs to the public. Ensure programs are responsive to a broad range of needs within the community. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of surveyed who rate recreation programs/classes as "Good" or "Excellent" %Description Purpose Status 87% 81% 88% 88% 88% 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 62nd of 318 jurisdictions in the 2018 NCS. 226 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES Workload V ensures FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Total Enrollment in classes/camps in arts, sciences, recreation, and open space programs Average Enrollment in classes/ camps in arts, sciences, recreation, and open space programs 14,213 13,783 15,500 18 15 22 15,500 22 15,500 22 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 227 COMMUNITY SERVICES 3udget Summary 1 Dollars by Division Administration and Human Services FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 4,172,215 4,238,687 4,213,867 5,402,694 1,188,827 28.2% Arts and Sciences 5,759,602 6,207,926 6,366,554 6,865,224 498,669 7.8% Open Space, Parks and Golf 8,942,719 10,433,800 11,775,381 12,059,618 284,237 2.4% Recreation and Cubberley 6,332,283 6,262,160 6,668,795 6,592,649 (76,146) (1.1)% Total 25,206,818 27,142,572 29,024,597 30,920,184 1,895,586 6.5% Dollars by Category Salary & Benefits Healthcare 1,796,045 1,734,186 1,891,933 1,792,800 (99,132) (5.2)% Other Benefits 201,464 250,676 255,421 260,263 4,842 1.9% Overtime 200,984 182,169 104,441 107,157 2,715 2.6% Pension 1,849,667 1,966,642 2,056,481 2,543,515 487,034 23.7% Retiree Medical 949,102 998,502 909,816 937,111 27,294 3.0% Salary 8,717,180 8,784,819 8,970,057 9,032,247 62,190 0.7% Workers' Compensation 57,906 84,027 240,516 345,719 105,203 43.7% Total Salary & Benefits 13,772,347 14,001,021 14,428,666 15,018,813 590,147 4.1% Allocated Charges 4,660,976 5,132,897 5,207,348 5,416,584 209,237 4.0% Contract Services 4,109,550 5,279,123 7,497,407 8,661,260 1,163,853 15.5% Facilities & Equipment 39,646 33,308 53,700 73,700 20,000 37.2% General Expense 1,903,230 1,981,352 1,027,451 1,049,787 22,336 2.2% Operating Transfers -Out 6,990 6,990 110,605 6,990 (103,615) (93.7)% Rents & Leases 11,930 19,753 25,505 25,983 478 1.9% Supplies&Material 702,148 688,129 673,916 667,066 (6,850) (1.0)% Total Dollars by Expense Category 25,206,818 27,142,572 29,024,597 30,920,184 1,895,586 6.5% Revenues Charges for Services 3,925,023 4,356,738 7,442,125 7,594,929 152,804 2.1% Charges to Other Funds 55,686 56,230 60,715 197,455 136,740 225.2% From Other Agencies 61,545 8,324 -% Other Revenue 682,485 650,289 585,220 820,882 235,662 40.3% 228 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Summary Other Taxes and Fines Rental Income Total Revenues Positions by Division Administration and Human Services FY 2017 Actuals 2,521 1,201,908 5,929,168 FY 2018 Actuals 770 1,204,639 6,276,990 FY 2019 Adopted Budget 1,026 984,997 9,074,082 FY 2020 Adopted Budget 1,026 1,107,654 122,657 12.5% 9,721,945 647,863 7.1% FY 2020 Change $ FY 2020 Change % -% 5.79 6.24 6.24 6.72 0.48 7.69% Arts and Sciences 45.89 46.28 44.42 44.75 0.33 0.74% Open Space, Parks and Golf 32.87 32.87 30.59 30.59 -% Recreation and Cubberley 59.71 59.65 47.08 42.85 (4.23) (8.98)% Total 144.26 145.04 128.33 124.91 (3.42) (2.67)% Staffing Job Classification Administrative Assistant Administrative Associate III Assistant Director Community Services Building Serviceperson FY 2017 Actuals 1.00 1.00 2.00 FY 2018 Actuals 1.00 1.00 FY 2019 Adopted Budget 1.00 1.00 2.00 2.00 2.00 2.00 Building Serviceperson-Lead 2.00 2.00 Coordinator Recreation Programs 4.00 4.00 Director Community Services 1.00 1.00 Division Manager Open Space, 1.00 1.00 Parks and Golf 2.00 2.00 3.00 1.00 1.00 FY 2020 Adopted Budget 1.00 1.00 2.00 1.25 0.60 4.00 1.00 1.00 FY 2020 Change FTE (0.75) (1.40) 1.00 FY 2020 Salary 93,018 76,090 383,271 73,059 37,541 329,436 231,046 163,363 Heavy Equipment Operator 0.07 0.07 0.07 0.07 6,280 Inspector, Field Services 2.00 2.00 2.00 2.00 - 192,580 Junior Museum & Zoo Educator 2.75 3.60 3.60 3.60 - 265,196 Management Analyst 1.00 1.00 1.00 1.00 - 112,008 Management Assistant 1.00 1.00 1.00 1.00 77,417 Manager Community Services 5.00 5.00 5.00 5.00 472,222 Manager Community Services 4.00 4.00 4.00 4.00 - 498,285 Senior Program Manager Human Services 1.00 1.00 1.00 1.00 - 133,370 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 229 COMMUNITY SERVICES Staffing Job Classification Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead FY 2017 Actuals 6.00 1.00 5.00 2.00 Producer Arts/Science Program 12.50 Program Assistant I 8.00 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 2.00 FY 2018 Actuals 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 FY 2019 Adopted Budget 6.00 1.00 5.00 2.00 11.00 8.00 4.00 0.10 1.00 4.00 2.00 2.00 1.00 1.00 FY 2020 Adopted Budget 6.00 1.00 5.00 2.00 11.00 8.00 3.00 0.10 1.00 4.00 FY 2020 Change FTE (1.00) FY 2020 Salary 420,167 81,184 389,832 152,380 954,618 576,162 232,250 11,405 142,896 284,877 2.00 258,336 1.00 - 120,744 Theater Specialist 1.00 2.00 2.00 2.00 - 191,075 Sub -total: Full -Time Equivalent 78.42 78.77 77.77 75.62 (2.15) 6,960,110 Positions Temporary/Hourly 65.84 66.27 50.56 49.29 (1.27) 2,529,286 Total Positions 144.26 145.04 128.33 124.91 (3.42) 9,489,396 230 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities 128.33 29,024,597 9,074,082 19,950,515 (103,615) 30,138 95,849 - 22,372 Salary and Benefits Adjustments - 702,543 Proactive Contributions to City's Unfunded Pension Liability Animal Services Shelter Transition from Police Department to Community Services Department with Pets -In -Need (CMR #9822 Approved by the City Council on November 26, 2018) Realignment of Cubberley Staffing to Cubberley Fund (CMR #9925, approved by the City (4.23) (357,563) Council on December 17, 2018) Revenue Alignment for various Community Services Department Programs Golf Course Revenue and Expense (CMR #8848, approved by the City Council on April 6, 2018) Rents & Leases ThinkFund (formerly Bryant Street Garage Fund) Bryant Street Garage Rent Subsidy for Teen Programs Realignment of Recreation Program Staffing Aquatics Program Pilot Revenue Alignment Human Services Resource Allocation Program/ Avenidas/PACC (consumer price index) Information Technology Allocated Charges Liability Insurance Allocated Charges Landscape Maintenance contract/Allocated Charges Printing & Mailing Services Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges 326,974 0.48 906,889 217,662 118,913 175,626 478 478 (103,615) 30,138 95,849 22,372 702,543 326,974 689,228 (357,563) 132,208 (132,208) (56,713) 6,970 6,970 7,200 61,128 35,559 16,259 215,611 47,381 11,515 28,687 7,200 (14,373) 14,373 61,128 136,740 35,559 16,259 78,871 47,381 11,515 28,687 COMMUNITY SERVICES • "_ ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 231 COMMUNITY SERVICES 3udget Reconciliation Vehicle Replacement & Maintenance Allocated Charges Adjustments to Costs of Ongoing Activities Total FY 2020 Base Budget Budget Adjustments 1 Community Services Management Alignment 2 Consolidation of Parks Maintenance Contracts 3 Know Your Neighbor Grant Reduction 4 Art Center Staffing Alignment 5 Project Safety Net Transition 6 Impact Fee Nexus Study Total Budget Adjustments Total FY 2020 Adopted Budget (3.75) (20,303) 2,108,242 (265,903) (29,124) (25,000) 0.33 — 25,000 60,000 0.33 (235,027) Revenues 647,863 30,920,184 P 171 71A- Net General Fund (20,303) 1,460,379 21,433,266 (265,903) (29,124) (25,000) 25,000 60,000 (235,027) 232 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Adjustments 1 Community Services Management Alignment 0.00 (265,903) 0 (265,903) This action recognizes a savings of $266,000, equivalent to 1.0 FTE Division Manager in FY 2020 and FY 2021. The Community Services Department (CSD) will be evaluating its staffing complement through FY 2020 in order to analyze potential changes to its management staffing structure. This action ensures that CSD can thoroughly explore options for cost containment while minimizing disruptions to service delivery. It is anticipated that ongoing savings will be identified and brought forward through subsequent budget processes. (FY 2021 savings: $266,000) Performance Results This action will generate cost savings in FY 2020 and FY 2021 as CSD evaluates long-term options for cost containment. 2 Consolidation of Parks Maintenance Contracts (29,124) (29,124) This action will reduce contract expenses by $29,124 on an ongoing basis through the consolidation of Parks Maintenance contracts. Basic maintenance service at Lytton Plaza, the Old Community Garden between Red Cross and El Camino Park, Stanford/Palo Alto Playing Fields, and Cogswell Plaza is currently performed by multiple service providers such as the Downtown Streets Team and Gachina. This action would reduce overlaps, focusing on consolidation and streamlining providers that perform maintenance at these locations. (Ongoing savings: $29,000) Performance Results This action would minimize the City's costs related to parks maintenance. 3 Know Your Neighbor Grant Reduction Wit This action will reduce the City's Know Your Neighbors Grant Program in alignment with historic expenses. This program allows citizens or neighborhood associations to apply for grants up to $1,000 for activities such as block parties, event kick-off celebrations, neighborhood crime prevention and safety activities, and gatherings involving connections between neighbors. Grants may be applied for at any time throughout the calendar year at least one month in advance of the event date, and are awarded for activities that meet eligibility requirements on a "first come, first served" basis. Grants awarded totaled $21,602 in FY 2018, and $23,765 in FY 2017. (Ongoing savings: $25,000) (25,000) Performance Results © 0 This action will decrease the allocated funding for "Know Your Neighbor" grants, but is anticipated to have minimal impacts based on grant amounts awarded in prior years. 4 Art Center Staffing Alignment This action realigns staffing for the Art Center's exhibition program through a net -zero reallocation of contract dollars to fund a 0.33 FTE Arts and Sciences Professional position. The Art Center hosts several exhibits annually and the artwork requires careful handling during this process. This action will provide the necessary staffing support for the exhibition program while maintaining service delivery levels in the community by providing greater flexibility for seasonal staffing to assist with exhibition gallery maintenance, preparation, and shipping work. The exhibition program requires maintenance of gallery spaces to ensure the safety and security of artwork on view and on loan. (Ongoing costs: $0) Performance Results 0 This action will be cost neutral and provide greater flexibility in Art Center staffing to continue to maintain and set up exhibitions. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 233 COMMUNITY SERVICES 3udget Adjustments 5 Project Safety Net Transition IF - This action will provide one-time funding for the transition of Project Safety Net (PSN) from a Collective Impact model (community collaborative) to a nonprofit or public -private partnership model by the start of FY 2021. In FY 2017, PSN received funding for a Director, a part-time Administrative Associate, and other activities conducted by the City (publishing, outreach, etc.) associated with the collaborative. As part of the strategy initially outlined when the City began funding the program from the General Fund in FY 2017, this one-time funding would be invested to help evaluate and recommend a long-term fiscal sustainability plan for PSN, either through the creation of a separate 501 c(3) tax exempt organization or through an established nonprofit or partner organization. The City's support for Project Safety Net will continue on an ongoing basis at a level of $100,000 beginning in FY 2021. This action will result in ongoing savings of $170,000 when compared to the $270,000 level of support from the City for Project Safety Net. (Ongoing savings: $170,000) Performance Results 4 Transitioning to a nonprofit model will provide PSN with a sustainable business model that can continue to operate while reducing reliance on City subsidies. 6 Impact Fee Nexus Study 60,000 This action will provide funding for an Impact Fee nexus study to the development impact fees for community centers, libraries, and parks. A development impact fee is a fee that is imposed on new or proposed development projects to pay for all or a portion of the costs of providing public services to the new development. Impact fee studies need to be conducted regularly to help ensure the impacts of development are being accounted for appropriately through the administration of impact fees. The last comprehensive nexus study for these impact fees were conducted in 2002. (Ongoing costs: $0) Performance Results This study will provide updated information for impact fees, which may result in increased revenues for supporting programs in the Community Services and Library Departments.. 234 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES CSD Golf Course Financials I FY 2016 Actuals FY 2017 Actuals1 FY 2018 Actuals2 FY 2019 Projected FY 2020 Adopted REVENUES Tournament fees 0 Green Fees 0 0 532,552 0 Monthly play cards 0 0 0 2,486,832 2,600,523 Driving range 154,322 227,072 199,251 366,037 Cart/club rentals 0 1,236 0 355,950 381,904 Proshop lease 18,000 13,175 12,677 0 Restaurant lease 18,000 32,657 2,222 12 48,000 Restaurant Utilities 18,000 16,500 1,500 0 Other Fee 24,000 4,039 6,738 340,245 376,827 232,322 294,719 754,940 3,549,075 3,830,650 0 0 405,396 0 18,000 Total Revenue 40 0 0 EXPENDITURES Operating Expenses Salaries & Benefits 129,915 111,906 117,662 116,891 Advertising & Publishing 15,000 1,126 7,714 0 0 Supplies and Materials 10,000 27,008 42,669 0 General Expense 1,450 52 347 1,004 1,620 Facilities and Equipment Purchases 5,000 6,434 18,860 0 Allocated Charges 157,750 156,748 180,057 279,988 328,369 319,115 303,274 367,307 397,883 502,272 172,282 0 0 Subtotal Contract Services Golf Maintenance Miscellaneous Range fees Cart Rentals Club Rentals Fixed management fees Contract Contingency Subtotal MI Total Operating Expenses 217,896 0 31,710 0 0 30,500 4,166 284,272 603,387 364,666 49,068 195,631 0 0 30,500 0 639,865 943,139 750,978 9,437 166,902 0 0 924,477 0 1,851,795 2,219,102 2,629,515 0 0 0 0 1,000 0 2,630,515 3,028,398 2,611,281 0 0 0 0 111,240 26,825 2,749,346 3,251,618 Income From Operations (371,065) (648,420) (1,464,162) 520,677 579,033 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 235 COMMUNITY SERVICES Debt Expenses CSD Golf Course Financials FY 2018 Actuals2 FY 2019 Projected FY 2020 Adopted Debt Service (Refunded) Debt Service (New) 430,791 432,150 432,271 431,154 0 0 0 0 181,794 373,523 Subtotal 430,791 432,150 432,271 612,948 373,523 Net Income (Loss) (801,856) (1,080,570) (1,896,433) (92,271) 205,510 1. The Golf Course was closed during FY 2017 due to renovation. 2. The renovated Golf Course opened in May 2018 under the new management. 236 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET COMMUNITY SERVICES CSD Human Service Contracts Human Services Contracts FY 2019 Adopted GENERAL HUMAN SERVICES CONTRACTS1 Avenidas - Senior Services PACCC - Child Care Subsidy and Outreach FY 2019 Agency Award FY 2020 Base Budget FY 2020 Agency Requests FY 2020 Adopted Budget 489,274 489,274 508,356 489,274 508,356 495,682 495,682 515,013 495,682 515,013 Mediation Service Provider4,5 66,625 66,625 69,223 66,625 69,223 County of Santa Clara4 125,000 125,000 125,000 125,000 125,000 Youth Community Sv. (YCS) - Youth Connectedness Initiative4 General Human Service Contracts Subtotal 50,000 1,226,581 50,000 1,226,581 50,000 1,267,592 50,000 1,226,581 50,000 1,267,592 HUMAN SERVICES RESOURCE ALLOCATION PROCESS CONTRACTS2 Abilities United 45,808 45,808 47,595 51,739 53,757 Ada's Cafe 0 0 0 50,000 Adolescent Counseling Services (Outlet Program) 10,506 10,506 Blossom Birth 0 Community Working Group 30,750 Counseling and Support Services for 35,875 37,274 50,000 Youth (CASSY) 10,916 0 31,949 30,750 35,875 100,000 5,195 44,157 15,000 0 0 0 44,157 Downtown Streets Team 76,436 76,436 79,417 36,420 37,840 DreamCatchers 24,199 24,199 25,143 25,000 25,975 KARA 19,029 19,029 19,771 22,000 22,858 LifeMoves (formerly InnVision Shelter 36,138 36,138 37,548 132,739 81,989 Network) La Comida de California 37,281 37,281 38,735 46,372 48,181 MayView Community Health Center 27,665 27,665 28,744 40,000 Momentum for Mental Health 45,842 45,842 47,630 0 0 Palo Alto Housing Corporation 20,501 20,501 21,301 36,000 41,560 Partners & Advocates for Remarkable Children & Adults (PARCA) Peninsula HealthCare Connection Inc Senior Adults Legal Assistance The Health Trust Vista Center for the Blind & Visually Impaired 11,233 30,426 14,761 0 27,137 11,233 11,671 0 30,426 31,613 0 14,761 15,337 15,350 15,949 0 0 20,000 31,170 0 0 27,137 28,195 10,390 42,070 41,560 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 237 0 COMMUNITY SERVICES CSD Human Service Contracts T Human Services Contracts Youth Community Sv. (YCS) FY 2019 Adopted 22,205 Two -Year Contractors Subtotal 515,793 TOTAL 1,742,374 FY 2019 Agency Award 22,205 FY 2020 Base Budget 23,071 FY 2020 Agency Requests 30,000 FY 2020 Adopted Budget 31,170 515,792 535,909 712,690 535,908 1,742,373 1,803,501 1,939,271 1,803,500 HSRAP Emerging Needs Fund3 50,000 0 50,000 0 0 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. Funding is included in the Non -Departmental section of this document. 4. These existing contracts have been added to this chart to provide a holistic display of all the General Human Services Contracts in the City. As these contracts are already established, there is no new budgetary impact as a result of their inclusion. 5. At the time of publication for the FY 2020 Adopted Budget Book, the contract for Mediation Services is out for RFP and is currently provided by Project Sentinel. 238 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE Mission Statement We are a professional team of indivi- duals 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 2020 ADOPTED OPERATING BUDGET 239 FIRE CHIEF Geoffrey Blackshire (Interim) 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 2020 POSITION TOTALS 103.50 - Full-time 0.55 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. ADMINISTRATION 2.00 Administrative Associate II * Fire Prevention is functionally a part of the Planning and Development Services Department. The Fire Department retains administrative oversight over department personnel. 240 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Description The Fire Department provides a wide range of community and employee related services for the City of Palo Alto through the following service programs: FIRE SUPPRESSION Maintain a state of readiness to effectively respond to emergency and non -emergency calls. Provide a means for a safer Palo Alto through community outreach, public education, and pre- vention. EMERGENCY MEDICAL SERVICES In an emergency setting, rapid assessment, treatment, and transport of patients to definitive care in a safe and efficient manner. FIRE PREVENTION BUREAU Improve the quality of life for the Palo Alto community through risk assessment, code enforce- ment, fire investigation, public education, and hazardous materials management. EMPLOYEE FIRE/EMS CERTIFICATION TRAINING Provide training to certify that staff maintain safe, efficient, and effective practices when responding to emergencies. Ensure personnel are familiar with and able to utilize the most up- to-date and proven techniques. Training specific to required EMT and/or Paramedic re -certifica- tion is also incorporated. Accomplishments ▪ Achieved accreditation from the Center for Public Safety Excellence. Only one percent of all Fire agencies nationwide are accredited. ▪ Completed renegotiation of the Fire Services Agreement with Stanford University, and implemented new deployment model. ▪ Completed Community Health Needs Assessment report and presented findings to City Council and the community. • Responded to 189 fire incidents in Fiscal Year 2018 with 89% of responses within 8 minutes. • Responded to 5,342 medical/rescue calls in Fiscal Year 2018; 99% of paramedic calls for service were responded to within 12 minutes and 94% of emergency medical calls within 8 minutes. ▪ Increased the number of fire inspections from an improved cataloging system, conducting 9,581 fire inspections in Fiscal Year 2018. • EMS revenue totaled approximately $3.7 million in Fiscal Year 2018. FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 241 FIRE • Hired and successfully graduated 8 firefighters in the Santa Clara County Joint Fire Academy in 2018. Initiatives • Successfully recruit and appoint a new Fire Chief. • Maintain accreditation by completing the annual compliance report. ▪ Continue department succession program including regularly scheduled promotional and acting exams, creation of a career development guide, and increased training. • Develop recruitment and retention programs to maintain a diverse, talented and engaged workforce. ▪ Expand the current wellness program to further promote and maintain a safety culture. ▪ Support efforts to modernize and replace essential public safety facilities and equipment. ▪ Develop multi -agency plan to collectively address future emergency medical needs of the community. Goals and Objectives GOAL 1 Arrive at the scene of emergencies safely and in a timely manner within the Department's tar- geted response times. Objectives: • Promote timely adherence to Santa Clara County's clinical protocols and ensure consistent medical care in both Advanced and Basic Life Support (ALS/BLS) to the Palo Alto and Stanford communities. • Provide the highest level of patient care and response standards by ensuring Palo Alto ambulances respond to all ambulance calls for service. ▪ Target fire response time within 8 minutes 90 percent of the time. • Target Advanced Life Support (ALS) response times within 12 minutes 90 percent of the time. GOAL 2 Ensure reasonable life safety conditions through inspection programs. Objectives: ▪ Perform periodic inspections of all facilities within 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. 242 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE 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 from a customer perspective of assistance that was provided. FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 243 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 2017 FY 2018 Actuals Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 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 94% 99% 89% 94% 99% 92% 99% 89% 90% 92% 99% 92% 99% 93% 90% 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 2018, 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. This shows sustained improvement as this is the closest the Department has come to meeting the goal of 90 percent in many years. The Department continues to focus on 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of fires contained to the room or area of origin Description Purpose Status 85% 77% 90% 90% 90% 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 2018, the Department limited 77 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. 244 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE PERCENT OF SURVEYED RESIDENTS RATING FIRE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Objective Percent of surveyed residents rating fire services "good" or "excellent" Percent of surveyed residents rating fire prevention services "good" or "excellent" Percent of surveyed residents rating ambulance/EMS services "good" or "excellent" Description Purpose Status Workload V Internalize commitment to excellence in public service by continuously evaluating the assistance provided, identifying areas needing improvement, and implementing mitigation methods. Maintain awareness of service quality from a customer perspective of assistance that was provided. FY 2017 Actuals 97% FY 2018 Actuals 94% FY 2019 Adopted 95% FY 2019 Estimated 95% FY 2020 Adopted 95% 87% 84% 85% 85% 85% 96% 93% 95% 95% 95% 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 10 years. ensures Number of fire calls for service Number of medical/rescue calls for service FY 2017 Actuals 155 5,567 FY 2018 Actuals 189 5,342 FY 2019 Adopted 150 5,400 FY 2019 Estimated 160 5,400 Y 2020 Adopted 160 5,400 Number of all other calls for service 3,586 3,452 3,550 3,440 3,440 Total number of calls for service 9,153 8,983 9,200 9,000 9,000 Number of ambulance transports 3,735 3,590 3,800 3,800 3,800 Fire calls average response time (Target: 8:00 Minutes) Medical/rescue calls average response time (Target: 8:00 4:50 4:53 5:00 5:00 5:00 Minutes) 5:32 5:23 5:25 5:25 5:25 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 245 FIRE 3udget Summary l FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division Administration 1,845,573 1,916,884 2,505,528 2,745,530 240,002 9.6% Emergency Response 27,640,110 29,345,212 28,295,304 30,703,654 2,408,350 8.5% Environmental Safety Management 151,643 151,752 542,730 558,962 16,231 3.0% Records and Information 319,621 342,412 - - - -% Management Training and Personnel 1,573,207 1,882,244 787,802 855,545 67,743 8.6% Total 31,530,153 33,638,504 32,131,365 34,863,692 2,732,327 8.5% Dollars by Category Salary & Benefits Healthcare 1,953,781 1,952,238 2,212,683 2,182,484 (30,199) (1.4)% Other Benefits 273,687 351,540 294,432 307,559 13,127 4.5% Overtime 3,247,813 3,568,300 1,911,761 1,672,872 (238,890) (12.5)% Pension 5,561,510 6,030,222 6,130,579 8,091,590 1,961,011 32.0% Retiree Medical 2,433,065 2,559,706 2,223,229 2,289,926 66,697 3.0% Salary 13,058,645 13,191,022 13,749,644 14,211,642 461,998 3.4% Workers' Compensation 628,234 1,027,998 753,623 1,108,460 354,837 47.1% Total Salary & Benefits 27,156,736 28,681,026 27,275,951 29,864,533 2,588,582 9.5% Allocated Charges 2,911,801 3,144,612 3,067,841 3,282,610 214,769 7.0% Contract Services 456,381 762,479 472,000 566,625 94,625 20.0% Facilities & Equipment 122,332 151,244 246,523 327,723 81,200 32.9% General Expense 447,164 436,545 289,800 388,800 99,000 34.2% Operating Transfers -Out 306,850 (306,850) (100.0)% Rents & Leases 144 -% Supplies & Material 435,596 462,598 472,400 433,400 (39,000) (8.3)% Total Dollars by Expense 31,530,153 33,638,504 32,131,365 34,863,692 2,732,327 8.5% Category Revenues Charges for Services 9,277,851 9,815,952 10,170,642 10,649,581 478,939 4.7% Charges to Other Funds 163,386 161,322 163,605 162,610 (996) (0.6)% From Other Agencies 547,601 1,093,263 70,000 170,000 100,000 142.9% 246 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE 3udget Summary Other Revenue Other Taxes and Fines Total Revenues Positions by Division Administration FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget (52,082) 18,931 282,000 (275) 9,936,756 11, 089,193 10, 686, 247 11, 264,190 577,943 FY 2020 Adopted Budget FY 2020 Change $ 282,000 3.00 3.00 5.68 5.68 Emergency Response 99.07 99.07 89.57 89.57 Environmental Safety Management 0.48 0.48 1.15 1.15 Records and Information 1.50 1.50 - Management Training and Personnel Total Staffing 11N - Job Classification 5.15 5.15 2.00 2.00 109.20 109.20 98.40 98.40 FY 2017 Actuals FY 2018 Actuals 40 -Hour Training Battalion Chief 1.00 1.00 40 -Hour Training Captain 1.00 1.00 Administrative Assistant 1.00 1.00 Administrative Associate II 2.00 2.00 Battalion Chief 3.00 3.00 Business Analyst 0.80 0.80 Deputy Chief/Fire Marshal 0.05 0.05 FY 2019 Adopted Budget 1.00 1.00 1.00 2.20 3.00 0.80 0.05 FY 2020 Adopted Budget 1.00 1.00 1.00 2.20 3.00 0.80 0.05 FY 2020 Change FTE FY 2020 Change % FY 2020 Salary 186,846 164,486 84,011 156,169 524,597 111,581 10,029 Deputy Director Technical Services 0.20 0.20 0.20 0.20 - 41,646 Division Deputy Fire Chief 2.00 2.00 2.00 2.00 418,330 Emergency Medical Service 1.00 1.00 1.00 1.00 161,325 Director Emergency Medical Services Data Specialist Fire Apparatus Operator 30.00 30.00 26.00 26.00 3,738,018 Fire Captain 21.00 21.00 21.00 21.00 - 3,343,791 Fire Chief 1.00 1.00 1.00 1.00 - 250,474 Fire Fighter 41.00 41.00 34.00 34.00 - 4,517,356 1.00 1.00 1.00 1.00 - 76,090 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 247 FIRE' Staffing Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 Budget Change FTE FY 2020 Salary Fire Inspector Geographic Information System Specialist Hazardous Materials Inspector 0.30 0.30 0.80 0.50 0.80 0.50 0.80 0.50 0.80 0.50 0.30 0.30 Senior Management Analyst 1.00 1.00 1.00 1.00 Sub -total: Full -Time Equivalent 108.65 108.65 97.85 97.85 — 14,173,966 Positions Temporary/Hourly 0.55 0.55 0.55 0.55 — 54,281 Total Positions 109.20 109.20 98.40 98.40 — 14,228,247 131,589 58,543 49,346 149,739 248 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE 3udget Reconciliation — T Positions Expenditures Revenues Net General Fund Prior Year Budget 98.40 32,131,365 10,686,247 21,445,118 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Firefighter New Hire Costs General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability Stanford Emergency Fire Services Revenue Adjustment (align with current negotiations, net $7.0 million) General Fund Service Provided to Enterprise Funds Alignment Equipment and Support Services Contract Adjustments Personal Protective Equipment (PPE) Increases Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (306,850) (46,000) 29,835 300,329 (22,686) (306,850) (46,000) 29,835 300,329 (22,686) 1,928,023 r — 1,928,023 972,593 24,200 30,000 382 23,664 (543) 3,500 157,932 54,508 - 3,194,259 478,939 (996) 477,943 972,593 (478,939) 996 24,200 30,000 382 23,664 (543) 3,500 157,932 54,508 2,716,316 Total FY 2020 Base Budget 98.40 35,302,938 11,164,190 24,138,748 Budget Adjustments 1 Fire Staffing Adjustment 2 Elimination of Medic 61 - (352,511) (315,360) (352,511) (315,360) FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 249 FIRE 1 Fire Staffing Adjustment 3udget Reconciliation Positions Net Expenditures Revenues General Fund 3 State Quality Assurance Fee 4 Equipment Replacement 5 Firefighter New Hire Costs 100,000 48,000 80,625 100,000 48,000 80,625 Total Budget Adjustments (439,246) 100,000 (539,246) Total FY 2020 Adopted Budget 98.40 34,863,692 11,264,190 23,599,502 3udget Adjustments Positions Net E. • e,;Slitures Revenues. General. Fund 0.00 (352,511) in 0 (352,511) This action recognizes one-time savings of $353,000, equivalent to 1.0 FTE Deputy Fire Chief position as a temporary measure to create savings for the duration of FY 2020. The Fire Department currently has an interim Fire Chief and this will give the department the opportunity to pilot operating with fewer executive management positions. As a result of this pilot, lower priority projects may be put on hold and duties will be reassigned among command staff. The Fire Department will continue to analyze and assess ongoing options for cost containment and return with recommendations. (Ongoing savings: $0) Performance Results 0 This action is anticipated to help contain costs in FY 2020. 250 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FIRE 2 Elimination of Medic 61 3udget Adjustments Net Expenditures Revenues General Fund 0.00 (315,360) 0 (315,360) This action eliminates a dedicated 12 -hour ambulance that is currently in service from 8:00 AM to 8:00 PM, 7 days per week. In January 2018, the Fire Department began the deployment of the delivery of fire and Emergency Medical Services (EMS), which included the addition of one dedicated ambulance staffed in the downtown fire station, Fire Station 1, 12 hours per day, 7 days per week. By contract, this apparatus is only staffed with overtime personnel. When this ambulance goes out of service at 8:00 PM, the Station 3 crew cross -staffs a fire engine and ambulance from 8:00 PM to 8:00 AM; a similar model is used for deployment 24/7 at Fire Stations 2 and 4. Staff ran this alternative deployment, assuming Stations 2, 3, and 4 would now be cross -staffed 24/7, through predictive analytic simulator software, which models historical response data with this newly proposed deployment model. The simulator predicted the following: - Unit utilization for 2 additional crews will reach up to 27%, which is over the national standard of 25%. In total, 3 of 8 crews are estimated to be over that standard. - Response times will increase though they are estimated to remain within the overall performance standard of 8 minutes, 90% of the time - The department will most likely rely on more mutual aide assistance from Santa Clara County (SCC) ambulance. (Recently, the assistance of SCC ambulance has diminished due to the new deployment model effective January 2018.) Currently this action presumes that this new deployment become effective no later than January 2020, resulting in 6 months of savings in FY 2020 and ongoing savings in FY 2021. As discussed in the transmittal letter, this change would be subject to the appropriate procedures per the City's current memoranda of agreements with employee units and discussion with Stanford per the City's partnership agreement for fire services. (Ongoing savings: $630,720) Performance Results © O In order to manage the emergency medical services call volume and maintain the department's current level of service, an additional Fire Engine will be cross -staffed with an ambulance 24 hours per day. 3 State Quality Assurance Fee This ongoing, cost -neutral action increases the department's expenses by $100,000 to account for the State -mandated Quality Assurance Fee (QAF) for ground emergency medical transport (GEMT), with an offset in revenues anticipated from tax and federal reimbursements. The QAF collected by the Department of Health Care Services (DHCS) will be used to increase reimbursement to GEMT providers. DHCS will post notice of the QAF rate each year should the program be extended into subsequent fiscal years. (Ongoing net costs: $0) Performance Results © 0 This action ensures that the high level of quality of emergency medical transport services is maintained. FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 251 FIRE 3udget Adjustments 4 Equipment Replacement This one-time action provides funding for the replacement of ten air quality monitors ($31,000) and one medical gurney ($17,000) at or nearing the end of their useful life. Air quality monitors define the need for and level of respiratory protection and are used to supply safety information to ensure the proper protection, precautions, and treatments are provided to persons at risk of harm during emergency incidents and have a typical useful life of five to seven years. In total, the City maintains seven gurneys with a typical useful life of seven years for the six ambulance apparatus the Fire Department manages. (Ongoing costs: $0) Performance Results © 0 This action ensures the necessary equipment is available to provide the proper protection, precautions, and treatment in an emergency incident and to maintain compliance with state and national laws on the delivery of emergency medical treatment for medical calls. 5 Firefighter New Hire Costs II I 0.00 80,625 101 0 80,625 This one-time action adds $80,625 in expenses for the anticipated recruitment and onboarding of five firefighter personnel. Funding will be used for background checks, uniforms including personal protective equipment (PPE), and Joint Fire Academy (JFA) fees. The Department hired nine entry level firefighters in FY 2019 but further retirements anticipated during FY 2020 result in the need for these additional resources. The recruitment and onboarding of new firefighters will help maintain the department's staffing levels and ensure its continued ability to meet department targets such as response times. (Ongoing costs: $0) Performance Results © 0 This action provides funding for training and equipment necessary for new hires. 252 FIRE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 1 Mission Statement The Human Resources Department's mission is to recruit, develop, and retain a diverse, well -qualified, and professional workforce that reflects the high standards of the community we serve, and to lead City departments in positive employee relations, talent management, succession planning, and employee engagement. Purpose The purpose of Human Resources is to support City departments in achieving key goals and objectives; to provide a range of services, including new employee orienta- tion, staffing and recruitment management, talent and skill development, per- formance assessment, safety and wellness programs; and to support employee relations, compensation, job classification, risk management, and organization development to City departments. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 253 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 Human Resources Administrator 1.00 Human Resources Representative BENEFITS DIVISION 1.00 Manager, Employee Benefits 1.00 Human Resources Representative 1.00 Human Resources Technician 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 Senior Management Analyst 1.00 Human Resources Representative 1.00 Human Resources Technician HUMAN RESOUCES INFORMATION SYSTEMS 1.00 Senior Management Analyst 2.00 Human Resources Technician FY 2020 POSITION TOTALS 17.00 - Full-time 1.44 - Hourly 254 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 ▪ Recruited and filled 235 positions, including: City Manager, Director of Public Works, Director of Planning and Community Environment, Transportation Manager, Police Officers, Firefighters, Utilities System Operators, and Utilities Linemen. • Negotiated 5 successor memorandum of agreements with City of Palo Alto Labor Unions, including: UMPAPA, POA, PMA, IAFF, FCA. ▪ Expanded training programs offered to City staff through the eLearning Management System to include subjects such as harassment prevention, information security, and reasonable suspicion. ▪ Redesigned the City's employee appreciation event and annual employee service awards to include various activities, food, and years of service t -shirts. • Completed a vendor selection process for case management and labor tracking tools that enable the employee relations team to run reports, recognize trends, and access valuable data. • Evaluated and recommended a Paid Parental Leave policy, adopted by the City Council in December, 2018 (CMR 9632). HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 255 HUMAN RESOURCES • Completed a vendor selection process and began implementation of a system that improves oversight and customer service for leave management. ▪ Revised the City's retirement contract with CaIPERS to increase employee contributions towards pension costs and updated personnel data in the Enterprise Resource Planning (ERP) system. • Conducted market review and completed a vendor selection process for the continuation of Employee Life Insurance and Long -Term Disability services. ▪ Met on -site with approximately 200 employees during the Open Enrollment process and completed approximately 850 benefit transactions and 130 health plan changes. • Implemented revisions of the Fair Labor Standards Act's overtime calculation. ▪ Redesigned the file architecture and document management process for e -Personnel data to ensure accurate and efficient record keeping. • Transitioned to an electronic submission process for Personnel Action Forms (PAF) to streamline changes to an employee's position, salary, title, classification, schedule, or status. • Implemented an online employment eligibility verification process to increase accuracy and streamline the process for on -boarding new hires. Initiatives ▪ Continue to leverage internal staff resources to close open labor agreements. ▪ Develop, implement, and manage a new Management and Professional Compensation plan. ▪ Develop, implement, and manage revised harassment prevention training in accordance with new state legislated mandates. • Implement consultant recommendations for a comprehensive citywide training program. • Complete report configurations that ensure accurate reporting of pensionable compensation to CaIPERS. ▪ Pilot a retention and workforce stabilization strategy. ▪ Evaluate the City's current Catastrophic Leave program for improvements. ▪ Create recruitment dashboard to establish metrics and monitor recruitment activity. ▪ Pilot a customer service satisfaction survey to assess and improve the City's recruitment process. • Expand recruitment outreach on social media platforms. 256 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Fund General Fund -Operating 3,314,457 3,479,721 3,662,383 3,945,119 282,736 7.7% Liability Insurance 1,491,957 2,647,980 2,984,622 2,971,622 (13,000) (0.4)% Worker's Compensation 2,737,309 3,513,168 6,103,345 6,738,337 634,992 10.4% Total 7,543,723 9,640,869 12,750,350 13,655,078 904,728 7.1% Revenues Charges to Other Funds 1,076,120 2,842,356 3,774,302 4,333,860 559,558 14.8% Operating Transfers -In 5,000 5,000 5,000 5,000 —% Other Revenue 3,072,882 2,025,670 3,805,045 5,522,040 1,716,995 45.1% Return on Investments 526,823 541,650 39,310 708,600 669,290 1,702.6% Total Revenues 4,680,825 5,414,677 7,623,657 10,569,500 2,945,843 38.6% Positions by Fund General Fund 17.44 17.20 16.96 16.96 —% Workers' Compensation Program 1.00 1.00 1.00 1.48 0.48 48.00% Fund Total 18.44 18.20 17.96 18.44 0.48 2.67% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 257 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. 258 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Attendance Description Purpose Status RECRUITMENT Goal Objective 95% 95% 96% 95% 95% This measure will track the attendance of employees in terms of percentage of time present. Attendance is a proxy metric for engagement and productivity. Absenteeism hinders City operations, and results in inefficiency when employees assume additional responsibilities because of unexpected absences. The Department of Labor benchmark for attendance is 96 percent, allowing for absenteeism rate of 4 percent. Under this standard, absenteeism is defined to include unscheduled time away from work (not including vacations or holidays and scheduled/approved Workers Compensation, ADA or FMLA leave). The actual attendance for FY 2018 of 95% is in line with the Department of Labor's benchmark rate and is expected stay steady in FY 2019 and FY 2020. 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Recruitment - Days to fill a position Description Purpose Status 95 103 100 100 100 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 City continues to compete for talent for hard -to -fill positions and estimates that recruitment's will hold steady at approximately 100 days to fill. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 259 HUMAN RESOURCES TURNOVER Goal Objective Turnover - Voluntary Turnover Turnover - Total Turnover Turnover - Involuntary Turnover Turnover - Retirement Turnover Description Purpose Status Workload V 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 2017 Actuals 5.20% 8.60% 1.00% 2.50% FY 2018 Actuals 4.66% 9.42% 0.84% 3.93% FY 2019 Adopted 6.00% 9.00% 0.50% 2.50% FY 2019 Estimated 5.89% 12.19% 0.71% 5.61% FY 2020 Adopted 5.75% 12.20% 0.70% 5.75% 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. Turnover rates in FY 2018 increased as the City realized an increase in voluntary and retirement separations. It should be noted that in FY 2019 retirement turnover is expected to be higher than normal and this trend is expected to continue through FY 2020. ensures Employee personnel transactionsa Percentage of employees participating in citywide training programb FY 2017 Actuals 4,820 FY 2018 Actuals 5,000 89% N/A FY 2019 Adopted 4,500 90% FY 2019 Estimated 4,500 90% FY 2020 Adopted 4,500 90% a.The number of transactions is expected to normalize and stay steady in FY 2019 and FY 2020 as the City has reached agreements with various Labor Groups. b. In FY 2019, the Department transitioned to a new system to manage training programs. As a result of this tran- sition, actual participation rates in FY 2018 are not available. During FY 2020, staff will continue efforts to develop and enhance the use of the City's eLearning systems and explore integrating the recommendations of the com- prehensive citywide training program. 260 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary I Dollars by Division Administration, Employee Org Development and HR Systems FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 1,095,303 1,214,231 1,150,626 1,245,888 95,262 FY 2020 Change % 8.3% Benefits and Compensation 471,475 435,416 502,594 516,904 14,310 2.8% Employee and Labor Relations 1,028,237 1,180,702 1,192,714 1,339,974 147,259 12.3% Recruitment 412,336 375,727 471,174 484,318 13,144 2.8% Risk Mgmt, Safety, Workers' 307,106 273,645 345,274 358,034 12,760 3.7% Compensation Total 3,314,457 3,479,721 3,662,383 3,945,119 282,736 7.7% Dollars by Category Salary & Benefits Healthcare 225,177 237,758 319,103 314,498 (4,605) (1.4)% Other Benefits 67,751 75,229 92,609 94,705 2,096 2.3% Overtime 1,202 1,147 - - - -% Pension 432,129 482,170 559,732 702,839 143,107 25.6% Retiree Medical 191,691 201,668 190,587 196,305 5,718 3.0% Salary 1,631,246 1,746,388 1,917,423 1,956,231 38,807 2.0% Workers' Compensation 55,727 70,466 14,739 26.4% Total Salary & Benefits 2,549,194 2,744,360 3,135,183 3,335,044 199,861 6.4% Allocated Charges 137,789 155,613 187,042 218,126 31,084 16.6% Contract Services 448,795 462,714 205,309 285,309 80,000 39.0% Facilities&Equipment 5,535 4,150 4,150 -% General Expense 112,633 58,875 43,098 43,098 -% Operating Transfers -Out 28,209 (28,209) (100.0)% Rents & Leases 44,088 43,000 43,000 43,000 - -% Supplies & Material 16,423 15,159 16,392 16,392 - -% Total Dollars by Expense 3,314,457 3,479,721 3,662,383 3,945,119 282,736 7.7% Category Revenues Charges to Other Funds 1,076,120 1,067,356 1,797,302 1,856,860 59,558 3.3% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 261 HUMAN RESOURCES 3udget Summary Other Revenue Total Revenues Positions by Division Administration, Employee Org Development and HR Systems FY 2017 Actuals 10 1,076,130 5.36 FY 2018 Actuals 41,593 1,108,949 1,797,302 1,856,860 59,558 FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 5.56 5.56 Benefits and Compensation 2.88 2.44 2.20 Employee and Labor Relations 4.60 5.00 5.00 Recruitment 3.00 2.60 2.60 Risk Mgmt, Safety, Workers' Compensation Total Staffing Job Classification Administrative Assistant Assistant Director Human Resources 1.60 1.60 1.60 5.56 2.20 5.00 2.60 1.60 17.44 17.20 16.96 16.96 FY 2017 Actuals 1.00 1.00 FY 2018 Actuals 1.00 FY 2019 Adopted Budget 1.00 FY 2020 Adopted Budget 1.00 FY 2020 Change % FY 2020 Change FTE - % 3.3% - % ova - % FY 2020 Salary 195,562 Director Human Resources/CPO 1.00 1.00 1.00 1.00 225,243 Human Resources Representative 2.00 3.00 3.00 3.00 - 249,870 Human Resources Technician 4.00 4.00 4.00 4.00 - 297,523 Manager Employee Benefits 1.00 1.00 1.00 1.00 - 142,043 Manager Employee Relations 1.00 1.00 1.00 1.00 155,938 Senior Human Resources 4.00 3.00 3.00 3.00 319,783 Administrator Senior Management Analyst 1.00 2.00 2.00 2.00 - 273,998 Sub -total: Full -Time Equivalent 16.00 16.00 16.00 16.00 - 1,859,961 Positions Temporary/Hourly 1.44 1.20 0.96 0.96 81,110 Total Positions 17.44 17.20 16.96 16.96 - 1,941,071 262 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 16.96 3,662,383 1,797,302 1,865,081 One -Time Prior Year Budget Adjustments General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) Supplemental Pension Trust Fund Contribution 9,286 22,208 (28,209) 9,286 22,208 (28,209) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — 3,285 3,285 Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Fund Cost Allocation Plan Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges 91,025 86,628 (4,691) (5,043) 1,532 59,558 91,025 86,628 (59,558) (4,691) (5,043) 1,532 Adjustments to Costs of Ongoing Activities 169,451 59,558 109,892 Total FY 2020 Base Budget 16.96 3,835,119 1,856,860 1,978,258 Budget Adjustments 1 Candidate Screening Tools 2 Performance Evaluation Systems 80,000 30,000 80,000 30,000 Total Budget Adjustments 110,000 110,000 Total FY 2020 Adopted Budget 16.96 3,945,119 1,856,860 2,088,258 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 263 HUMAN RESOURCES 3udget Adjustments 1 Candidate Screening Tools This action provides $80,000 in one-time funding to pilot improved methods for screening job applicants through the use of technology. This funding will be used to pilot prescreening technology that uses artificial intelligence to improve the matching of applicants to vacant positions and to reduce bias in the screening process. The ability to prescreen applicants is anticipated to improve quality of job matches and reduce turn -around times. Staff will evaluate the pilot in FY 2020 to assess the need for ongoing support. (Ongoing costs: $0) Performance Results 0 0 This action will support recruitment efforts and improve overall services. 2 Performance Evaluation Systems 30,000 This action increases funding by $30,000 to automate record -keeping for annual employee performance evaluations. This system will replace the current process of printing, scanning, filing, and manually tracking paper submissions. The automation of this process will streamline the evaluation process, reduce errors, and improve access by creating centralized digital files. This action will be facilitated through the Information Technology Department and the cost allocated to the Human Resources Department; therefore, a corresponding action is included in the Technology Fund. (Ongoing costs: $30,000) Performance Results 0 0 This action will improve overall service delivery and tracking. 264 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 $1.0 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 percent confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments ▪ Initiated use of Risk Assessment tool to proactively identify any gaps in risk management - related programs using online survey which generates an action plan designed to focus on program improvement. Initiatives ▪ Develop policy and procedure for handling reasonable accommodation requests. Goals and Objectives GOAL 1 Reduce liability exposure to the City. Objectives: • Reduce liability exposure to the City for employee -involved vehicle collision. ▪ Review Department of Motor Vehicle (DMV) records on an annual basis for all employees whose job duties require that they drive City vehicles. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 265 HUMAN RESOURCES ▪ 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. 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 slightly increased in FY 2018 but remain lower than expected. The City will continue to provide additional training, such as online and onsite training to achieve and realize lower numbers of claims per year. FY 2017 Actuals 9 FY 2018 Actuals 11 FY 2019 Adopted 12 Purpose Status FY 2019 Estimated 6 FY 2020 Adopted DEFENSIVE DRIVING TRAINING Goal Objective Attendance at defensive driver training Description Purpose Reduce liability exposure to the City. Provide defensive driver training. FY 2017 Actuals 58 FY 2018 Actuals 14 8 FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted 55 50 50 This measure tracks the number of employees completing proactive and/or mandatory 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 decreased in FY 2018 due to a drop in Status discretionary training attendees. However, the attendance numbers are expected to return to normal levels in FY 2019 and FY 2020. 266 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary J Dollars by Division Non -Departmental Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,491,957 2,647,980 2,984,622 2,971,622 (13,000) (0.4)% 1,491,957 2,647,980 2,984,622 2,971,622 (13,000) (0.4)% Dollars by Category Salary & Benefits Workers' Compensation (111,260) Total Salary & Benefits (111,260) Contract Services 6,650 52,139 71,820 71,820 General Expense 1,596,567 2,595,841 2,912,802 2,899,802 (13,000) Total Dollars by Expense Category 1,491,957 2,647,980 2,984,622 2,971,622 (13,000) - % - % - % (0.4)% (0.4) % Revenues Charges to Other Funds 1,775,000 1,977,000 2,477,000 500,000 25.3% Operating Transfers -In 5,000 5,000 5,000 5,000 —% Other Revenue 35,393 42,900 41,040 41,040 — —% Return on Investments 135,145 126,629 23,135 168,200 145,065 627.0% Total Revenues 175,538 1,949,529 2,046,175 2,691,240 645,065 31.5% Positions by Division Total — — — — — —% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 267 HUMAN RESOURCES Budget Reconciliation Positions Expenditures Revenues Net General Liabilities Insurance Program Prior Year Budget 2,984,622 2,046,174 938,448 One -Time Prior Year Budget Adjustments General Liability Savings (One-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Investment Return Estimate General Liability Insurance Claims Adjustments to Costs of Ongoing Activities 500,000 (500,000) — — 500,000 (500,000) (13,000) (13,000) 145,066 145,066 (145,066) (13,000) (158,066) Total FY 2020 Adopted Budget 2,971,622 2,691,240 280,382 268 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 percent confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments • Explored benchmarking methodology to measure the effectiveness of the return -to -work program using third -party administrator system and now in testing phase. Initiatives . Explore and develop an Ergonomics program ROI cost analysis 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. HUMAN RESOURCES • " ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 269 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 Total dollar amount of claims paid Description Purpose Status NUMBER OF CLAIMS Goal Objective Number of Workers' Compensation Claims Filed Description Purpose Status Reduce the number of costly lost time claims filed and days away from work. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted 2,431,806 1,827,485 2,500,000 2,000,000 2,000,000 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. The total cost of workers compensation claims decreased in FY 2018 compared to the prior year. Two factors are attributable to the decrease in cost: 1) medical costs yet to be incurred and 2) decrease in the severity of injuries. It is anticipated that claims paid will increase slightly in FY 2019 and hold steady in FY 2020. Minimize loss of productivity and disruption of services. Reduce the number of costly lost time claims filed and days away from work. FY 2017 Actuals 70 FY 2018 Actuals 79 FY 2019 Adopted 70 FY 2019 Estimated 80 FY 2020 Adopted 75 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 increased in FY 2018 to 79 from FY 2017 total cases at 70. Based on analysis of current data, it is expected that the number of claims will hold steady in FY 2019 and decrease slightly in FY 2020. 270 HUMAN RESOURCES • : ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary J Dollars by Division Non -Departmental Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 2,737,309 3,513,168 6,103,345 6,738,337 634,992 10.4% 2,737,309 3,513,168 6,103,345 6,738,337 634,992 10.4% Dollars by Category Salary & Benefits Healthcare 9,484 10,020 10,753 11,166 413 3.8% Other Benefits 245,530 198,412 251,026 251,514 489 0.2% Pension 31,767 35,757 35,981 52,034 16,053 44.6% Salary 116,613 124,472 127,892 161,746 33,853 26.5% Workers' Compensation 1,711,992 2,704,248 5,018,342 5,604,340 585,998 11.7% Total Salary & Benefits 2,115,386 3,072,909 5,443,994 6,080,800 636,806 11.7% Contract Services 6,650 4,750 7,079 7,079 (0) (0.0)% General Expense 615,273 432,049 650,458 650,458 -% Operating Transfers -Out 3,460 1,813 (1,813) (100.0)% Total Dollars by Expense Category 2,737,309 3,513,168 6,103,345 6,738,337 634,992 10.4% Revenues Other Revenue 3,037,480 1,941,177 3,764,005 5,481,000 1,716,995 45.6% Return on Investments 391,677 415,022 16,175 540,400 524,225 3,241.0% Total Revenues 3,429,157 2,356,199 3,780,180 6,021,400 2,241,220 59.3% Positions by Division Non -Departmental 1.00 1.00 1.00 1.48 0.48 48.00% Total 1.00 1.00 1.00 1.48 0.48 48.00% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 271 HUMAN RESOURCES Staffing Senior Human Resources Administrator Job Classification 1.00 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 1.00 1.00 FY 2018 Actuals FY 2019 Adopted Budget 1.00 1.00 1.00 1.00 1.001 1.00 FY 2020 Adopted Budget 1.00 1.00 0.48 FY 2020 Change FTE FY 2020 Salary 122,616 122,616 0.48 28,800 1.48 0.48 151,416 272 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Reconciliation Prior Year Budget 1.00 6,103,345 3,780,180 2,323,165 One -Time Prior Year Budget Adjustments Workers' Compensation Savings (One-time FY 2019 Savings) Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefit Adjustments Proactive Contributions to City's Unfunded Pension Liability Workers' Compensation Insurance Claims Adjustments Investment Return Estimate State of California Assessment Fees Adjustments to Costs of Ongoing Activities Budget Adjustments 1 Workers' Compensation Program Temporary Staffing Total Budget Adjustments 1,500,000 (1,500,000) (1,813) (1,813) — (1,813) 1,500,000 (1,501,813) 9,010 9,010 11,411 11,411 584,998 216,994 368,004 — — 524,226 (524,226) 1,000 1,000 — 606,419 741,220 (134,801) 0.48 0.48 30,386 30,386 30,386 30,386 Total FY 2020 Adopted Budget 1.48 6,738,337 6,021,400 716,937 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 273 HUMAN RESOURCES 3udget Adjustments 1 Workers' Compensation Program Temporary Staffing Budget Adjustments Positions Expenditures Revenues 30,386 Net Workers' Compensatio n Fund 0.48 This action adds 0.48 FTE Management Specialist on a temporary basis, to process workers' compensation claims and assist with the optimal monitoring structure necessary to support one of the audit recommendations, as outlined in the Workers' Compensation audit in June, 2016. This request will add capacity to maintain ongoing operations and assist to ensure correct benefit eligibility and accuracy of department timecard coding; tracking injured worker work status and maintaining Human Resources claim files. This position will also assist to complete reporting for Community facilities special event insurance, scheduling annual hearing audiogram testing and other risk management programs as time permits. Staff will review the workloads in both workers' compensation and risk management administration in FY 2020 to assess the need for ongoing support. (Ongoing costs: $0) Performance Results © 0 0 This action provides resources necessary to implement audit recommendations that streamline the workers' compensation reporting process and improve the accuracy and completeness of claim forms. 274 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET HUMAN RESOURCES Workers' Compensation Fund FY 2017 Actuals FY 2018 Actuals FY 2019 Estimated FY 2020 Adopted Workers' Compensation Fund Claims Paid Change in Estimated self-insurance (795,714) 766,339 liability CSAC excess insurance premium 615,100 432,049 510,926 649,458 Actuarial Services 6,650 4,750 4,592 7,079 TPA Administrator Fees 240,405 193,122 222,879 246,240 State self-insurance fees 75,899 110,423 98,000 123,340 In-house Administration 163,162 179,000 141,542 231,220 Workers' Compensation Fund 2,737,309 3,513,168 3,084,376 6,738,337 Subtotal 2,431,807 1,827,485 2,106, 347 5,481,000 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 275 CITY OF PALO ALTO INFORMATION TECHNOLOGY Mission Statement The Information Technology Department's mission is to provide innovative technology solutions that support City departments in delivering quality services to the community. Purpose The purpose of the Information Technol- ogy Department is to champion an inspir- ing and forward -leaning vision for citywide technology that reflects the unique role of the City of Palo Alto as a global leader in technology innovation; to provide a broad range of high -quality technology -related solutions to employees, departments, council members, and the community in order for each to meet their respective goals; to support and continuously improve essential technology infrastructure for enabling the day-to-day opera- tions of the City; and to create and maintain an exciting workplace for the Infor- mation Technology Department team that inspires high-performance and provides career growth opportunities. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 277 INFORMATION TECHNOLOGY CHIEF INFORMATION OFFICER Darren Numoto (Interim) IT PROJECT MANAGEMENT OFFICE 1.00 IT Manager 5.00 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 Senior Technologist 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 2020 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. 278 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY Description Information Technology's vision statement is, 'to build and enable a leading smart and digital city.' A digital city broadly adopts innovative internet-based technologies to enable quality services and processes among City employees, citizens, visitors, and businesses. Being smart means using these same digital city capabilities integrated with the physical environment to improve livability, workability, and sustainability. Beginning in Fiscal Year 2013, the Information Technology Department embarked on a multi -year journey to transform itself into being a provider of higher -value information technology solutions and make steady progress towards building a leading digital city. The Information Technology Department provides a wide range of services for the City of Palo Alto through the following operational divisions: OFFICE OF THE CIO (OCIO) Provides leadership and strategic direction for the City of Palo Alto's use of technology. OCIO provides advisory services to City departments regarding opportunities to leverage technology to improve government services. In addition, the division sets IT policies and directions for the IT Department and the City. This division is often the public -facing component of the team and is responsible for fostering mutually beneficial public -private, technology -related partnerships. The core services include IT strategic planning, financial management, contract management, communications, work force development, overall department administration, and data analyt- ics. IT PROJECT MANAGEMENT OFFICE (PMO) 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, server hosting, office automation software support, technical training and support, and asset management. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 279 INFORMATION TECHNOLOGY IT ENTERPRISE SERVICES Maintains a core set of large enterprise systems such as the Enterprise Resource Planning (ERP), Utility Billing & Customer Information System (CIS), Customer Relationship Management (CRM), Business Intelligence & Warehouse systems (BI/BW) for supporting financial, Human Resource, Utilities business processes, information flow, reporting, and data analytics for the City. These services include all aspects of enterprise systems management such as planning, architecture, development, integration, administration, support, maintenance, governance, and change management. 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 • Completed the Datacenter Virtualization and Consolidation project which combined servers into the City's virtual private cloud and retired legacy hardware. • Developed an accessibility transition plan and brought the City website into compliance with the Americans with Disabilities Act (ADA) requirements. ▪ Completed Fire/Emergency Medical Services vehicle computer replacement. • Deployed new computers with Windows 10 to a quarter of City staff as part of the computer replacement project. ▪ Reviewed and updated all IT -related City policies. • Rolled out new advanced Cybersecurity training to all City staff. • Deployed citywide security enhancements for City -owned mobile devices. • Deployed WiFi to additional select sites such as Cubberley and Lytton Plaza. • Completed Human Resources Open Enrollment activities for citywide user base. • Completed Human Resources Support Pack project to ensure compliance with legal requirements. Initiatives The following major initiatives will be worked on by the Information Technology Department in Fiscal Year 2020 but not necessarily completed in Fiscal Year 2020. As circumstances dictate, projects will be re -prioritized or rescheduled as appropriate: • Upgrade City's ERP system. ▪ Continue deployment of new computers as part of the computer replacement project. ▪ Deploy upgraded Business Intelligence system. • Roll out the citywide SharePoint Academy. 280 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY ▪ Deploy the next -generation City website. ▪ Continue implementation of the new Geographic Information System (GIS). • Implement citywide Data Strategy, Standardization, and Governance. ▪ Deploy Data Privacy policy. ▪ Support the upgrade of the Council Chambers Audio/Visual project. • Support the design of the new Public Safety Building. • Develop a plan to reclaim office space by reducing the size of the IT Datacenter. • Define and develop metrics to support IT's goals and objectives. 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 participative 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. GOAL 2 Enhance IT service delivery to provide excellent customer service to all City departments. Objectives: ▪ Support high -quality, consistent, and efficient services by organizing 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. • Formalize career path and succession planning for the City's technology staff. ▪ 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. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 281 INFORMATION TECHNOLOGY 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 and increase user productivity and collaboration. • Standardize data storage approach and solutions. ▪ Execute the 2017 adopted GIS strategy which includes the implementation of the new system and added capabilities. GOAL 4 Enhance and improve information security to ensure confidentiality, 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. 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 capabilities for departments. 282 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals 92% FY 2018 Actuals N/A FY 2019 Adopted 95% FY 2019 Estimated 92% FY 2020 Adopted 93% 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. The FY 2018 survey was put on hold as the survey process was being reviewed. The review findings will be incorporated in surveys starting from FY 2019. 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. PERCENT OF SERVICE DESK REQUESTS RESOLVED BY RESOLUTION TIME Goal Track the overall time it takes to resolve service desk work orders. Objective Percent of service desk requests resolved at time of call Percent of service desk requests resolved within 4 hours 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 Description Purpose Status Establish clear division processes, staff responsibilities, and performance measures. FY 2017 Actuals 30% 23% FY 2018 Actuals 28% 25% 6% 6% 28% 29% 14% 13% FY 2019 Adopted 29% 22% FY 2019 Estimated 30% 22% 6% 5% 30% 27% 13% 16% FY 2020 Adopted These measures track the time it takes to resolve service desk work orders. 30% 23% 5% 28% 14% 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 2020 ADOPTED OPERATING BUDGET 283 INFORMATION TECHNOLOGY Workload V IT expenditure per workstation1 Number of closed help desk requests Number of datasets published on open data platforms 1This measure is currently under review to ensure effectiveness and accuracy. It is anticipated that the Department will update this measure once analysis has been completed. ensures FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted $4,982.56 8,750 87 N/A 8,224 $5,095.00 9,100 N/A 8,689 N/A 9,572 91 97 94 95 284 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division CIP Technology Fund 1,058,744 2,094,809 2,693,833 7,892,514 5,198,681 193.0% 3,123,376 3,115,197 3,285,959 3,460,217 174,258 5.3% Office of the CIO 2,925,415 2,599,009 3,535,530 3,562,652 27,122 0.8% Operations 5,880,219 6,782,791 8,167,345 8,506,210 338,865 4.1% Project Services 1,083,847 1,653,497 1,935,267 2,014,474 79,207 4.1% 14,071,602 16,245,303 19,617,934 25,436,067 5,818,133 29.7% Enterprise Systems Total Dollars by Category Salary & Benefits Healthcare 666,572 752,469 807,631 877,401 69,770 8.6% Other Benefits 146,083 185,468 186,973 188,658 1,685 0.9% 4,819 3,913 19,068 19,564 496 2.6% Pension 1,085,854 1,316,033 1,411,811 2,046,081 634,270 44.9% Retiree Medical 299,224 314,799 347,609 358,038 10,428 3.0% Salary 3,925,824 4,500,068 5,042,037 5,206,438 164,401 3.3% 10,332 7,873 92,201 137,314 45,114 48.9% Total Salary & Benefits 6,138,708 7,080,624 7,907,330 8,833,494 926,164 11.7% Allocated Charges 1,071,082 998,111 1,440,281 1,721,906 281,625 19.6% Contract Services 4,697,928 4,361,775 5,647,287 5,140,131 (507,156) (9.0)% Facilities & Equipment 204,038 644,357 869,921 868,296 (1,625) (0.2)% General Expense 411,655 452,063 500,179 475,179 (25,000) (5.0)% 16,485 161,418 99,746 30,590 (69,156) (69.3)% Rents & Leases 351,501 362,749 374,357 388,957 14,600 3.9% 72,309 49,732 85,000 85,000 -% CapitallmprovementProgram 1,107,895 2,134,475 2,693,833 7,892,514 5,198,681 193.0% Overtime Workers' Compensation Operating Transfers -Out Supplies & Material Total Dollars by Expense Category 14,071,602 Revenues Charges to Other Funds Operating Transfers -In Other Revenue 16,245,303 19,617,934 25,436,067 5,818,133 29.7% 13,805,902 13,774,906 14,570,588 14,409,229 (161,359) (1.1)% 2,077,784 2,031,612 1,365,708 2,137,482 771,774 56.5% 32,826 103,264 70,437 214.6% INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 285 INFORMATION TECHNOLOGY 3udget Summary Return on Investments Total Revenues Positions by Division Enterprise Systems Office of the CIO Operations Project Services Total Staffing Job Classification Administrative Assistant Assistant Director Administrative Services Business Analyst Desktop Technician FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget 435,369 488,765 440,667 644,400 FY 2020 Change $ 203,733 16,319,055 16,295,283 16,409,789 17,294,375 884,586 10.50 9.50 9.00 9.00 5.10 6.10 6.10 5.10 13.48 14.48 14.48 14.48 7.00 7.00 7.00 8.00 36.08 37.08 36.58 36.58 FY 2017 Actuals 1.00 0.10 FY 2018 Actuals 1.00 0.10 1.00 1.00 FY 2019 Adopted Budget 1.00 0.10 FY 2020 Adopted Budget 1.00 0.10 FY 2020 Change % 46.2% 5.4% -% (1.00) (16.39)% - % 1.00 14.29% FY 2020 Change FTE - ova FY 2020 Salary 93,018 20,673 1.00 1.00 - 139,476 6.00 6.00 6.00 6.00 - 506,001 Director Information Technology/ 1.00 1.00 1.00 1.00 237,578 CIO Manager Information Technology 4.00 4.00 3.00 3.00 471,931 Manager Information Technology Security Principal Business Analyst 1.00 1.00 1.00 1.00 158,600 Senior Business Analyst 2.00 2.00 2.00 2.00 - 290,722 Senior Management Analyst 1.00 1.00 1.00 1.00 140,837 Senior Technologist 16.00 17.00 18.00 18.00 - 2,477,841 Technologist 1.00 1.00 1.00 1.00 - 139,476 Sub -total: Full -Time Equivalent 35.10 36.10 36.10 36.10 - 4,836,748 Positions Temporary/Hourly 0.98 0.98 0.48 0.48 42,132 Total Positions 36.08 37.08 36.58 36.58 - 4,878,880 1.00 1.00 1.00 1.00 160,597 286 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY 3udget Reconciliation Prior Year Budget 36.58 19,617,934 Positions Expenditures Revenues Net Technology Fund 16,409,789 3,208,145 One -Time Prior Year Budget Adjustments New City of Palo Alto Website Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Return on Investments & Other Revenue Transfer from the General Fund (Technology Surcharge) Contract Adjustments and Equipment Cost Changes Transfer to University Avenue Parking Fund for Employee Parking Permits Rents and Leases Charges to Other Funds - Information Technology Services Capital Improvement Funding General Fund Cost Allocation Plan Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities - (300,000) (71,156) 12,441 (300,000) (71,156) 12,441 36,743 36,743 — (321,972) — (321,972) 432,997 224,653 223,400 (13,781) 2,000 14,600 5,198, 681 265,088 (37) 393 6,205 (2,465) 8,371 — 6,360,105 204,170 28,774 (191,359) 813,000 854,585 432,997 224,653 223,400 (204,170) (28,774) (13,781) 2,000 14,600 191,359 4,385,681 265,088 (37) 393 6,205 (2,465) 8,371 5,505,520 25,656,067 17,264,374 8,391,693 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 287 INFORMATION TECHNOLOGY 3udget Reconciliation r- Positions Expenditures Revenues Net Technology Fund Budget Adjustments 1 Non -Salary Expenses 2 Human Resources Performance Evaluation Systems Total Budget Adjustments (250,000) 30,000 (220,000) 30,000 30,000 (250,000) (250,000) Total FY 2020 Adopted Budget 36.58 25,436,067 17,294,374 8,141,693 L'0 11 011r� 0000 al 110'011 bSA© 01 0°'4116 01110 00 11°111° 11100141 1 11001 s1 1❑ 4_4 1101° coO° 1Di Iii 0J..000 0plyly� QQt304 11001101o1a1i°10a111in1 110 0aa0 roi3°lliiiblllaD�i�1010001411p11 Do i41j0G10OOD1og1©v04°111 iioirg°11 iii 001 of 10110 01:0001041300i11130 1000iii/10061a10�0m1010031 1i010opjsl 010001D0/101�10109a10'�10t0i�0i0iY00{ _# 400 41©1011 io101011.40110 li 1001 10 0034 100 1 1 1 10111 00111110 010 01a0,0�10+�p11`oy00p000i1 3udget Adjustments 0314_ 3001 3�Y0 0 010116 00°pplbo � Iii P1111op I10 111Dp111 1ov? 11111110141 010 111Dolloo�i pas 1I1D1111 ' 111810111)00°1",1;°0 1115'10110lboiol, 11,111,101011011 11110'ii010010o111 0 101,_ '101'6 00001 Budget Adjustments Positions Expenditures Revenues Net Technology Fund 1 Non -Salary Expenses 0.00 (250,000) 0 (250,000) This ongoing action reduces non -salary expenses by $250,000 for cost containment measures. These savings will be implemented through reductions in project services ($5,000), staff training ($25,000), professional services ($120,000), GIS contract expenses ($75,000), and the elimination of the Civic Innovation program ($25,000). These reductions will limit the department's ability to augment staffing for urgent projects, explore additional functionality for the City's GIS platform, and engage with the community through events like hack-a-thons. (Ongoing savings: $250,000) Performance Results © 0 0 288 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY 3udget Adjustments Budget Adjustmen. Positions Expenditures Revenues Net Technology Fund This action may result in delays in IT processes and services, project completion, and decreased staff training and development. 2 Human Resources Performance Evaluation Systems I L 0.00 30,000 30,000 0 This action increases funding by $30,000 to support the automation of record -keeping for annual employee performance evaluations with a commensurate increase in revenues collected in allocated charges from the Human Resources Department. This system will replace the current process of printing, scanning, filing, and manually tracking paper submissions. The automation of this process will streamline the evaluation process, reduce errors, and improve access by creating centralized digital files. (Ongoing net costs: $0) Performance Results 0 0 This action will improve overall service delivery and tracking. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 289 CITY OF PALO ALTO LIBRARY Mission Statement 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 2020 ADOPTED OPERATING BUDGET 291 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 Supervising Librarian 1.00 Senior Librarian 1.00 Librarian 1.00 Library Associate 1.00 Library Specialist MITCHELL PARK LIBRARY 1.00 Library Services Manager 2.00 Supervising Librarian 1.00 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 I ll 1 INFORMATION TECHNOLOGY & COLLECTIONS DIVISION 1.00 Division Head, IT & Collections COLLECTIONS & TECHNOLOGY 2.00 Senior Librarian 2.00 Library Associate 1,00 Library Specialist 1,00 Business Analyst DIGITAL SERVICES & E -BRANCH 1.00 Library Services Manager 2.00 Senior Librarian 1.00 Library Specialist FY 2020 POSITION TOTALS 46.50 - Full -Time 14.78 - Hourly a This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation 292 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 Library collections include a diverse selection of print and non -print materials, and digital resources such as electronic books, magazines, and media, to meet the educational, informa- tional, and recreational needs of its clientele, reflecting the variety of languages, cultures, and interests of our community. Provides opportunities (sometimes through experimental partner- ships with other agencies) for the public to access a variety of technologies both inside and outside library facilities, including hardware devices, online databases, free WiFi, mobile applica- tions. 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 • In September 2018, the Library and the Palo Alto Unified School District (PAUSD) fully implemented the Student Asset Card initiative, integrating all Palo Alto City Library (PACL) services into the PAUSD identification cards of more than 10,000 students K through 12 in our community. PAUSD students are now able to visit Palo Alto City Libraries and enjoy full services with their student ID cards. ▪ Honored our diversity through the "Celebrating Cultures" initiative, which provides various programs, services, and collections that reflect Palo Alto and the Greater Bay Area. Key 2018 events included the Chinese New Year Fair, which drew a crowd of 2,000, and our 2nd Diwali Celebration, which attracted 425 attendees. ▪ Continued to develop virtual maker programs for improved public access to, and knowledge for, emerging technologies. Implemented 3D Design Coach sessions; teen volunteers teach the public how to create virtual models. Demonstrated Virtual Reality technology at community events. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 293 LIBRARY • Held a RE:Maker Fair in Summer 2018 that generated interest and engagement in reuse, environmental preservation, and sustainable living and created opportunities for the public to engage in environmental technology. The event drew a crowd of 200 people. ▪ Utilized services of a centralized call center to better assist customers with phone inquiries. With fewer Librarians available to provide public phone support, this new call center service allows for faster response and routing of library customer service phone calls, while allowing Librarians expanded ability to provide in -person services at the library and more time to develop programs and collections. ▪ Received a total of 113 essays submitted for the Youth/Teen Writing Contest entries this year, nearly doubling from last year. Winners were awarded at a reception, and winning essays were displayed in the branches. The significant increase in entries is attributed to strategic use of the Library's new website banners for marketing. ▪ Developed and implemented a cybersecurity education program for youth based on the popular computer game Minecraft. This project has garnered much attention in the Minecraft and library sectors. PACL presented at Minefaire 2019. This was a collaboration with the state library through a grant. Initiatives ▪ Investigate sustainable and efficient library practices by adding Automated Materials Handling Machines to College Terrace, Children's, and Downtown Library Branches. Automated Materials Handling Machines in place at Rinconada and Mitchell Park Library branches sort up to 4,000 library materials per hour. ▪ Explore creative ways to maintain library services and hours in response to budget limitations. The Library will explore the feasibility of implementing OPEN+, an integrated system that allows extended access to the library for members of the community during designated unstaffed hours. Currently this system is implemented at only a few library systems nationwide, but in many internationally. ▪ Seek out new opportunities for revenue generation to contribute to the fiscal sustainability of the Library, such as potentially opening a Passport Acceptance Facility at the Downtown Library branch. • Continue to offer free and open access for the public to emerging technologies through workshops and other programming. An example is a Virtual Reality and Distributed Web workshop series this summer in which the public can learn how to make a virtual reality object and become educated about the concept of the Distributed Web. Goals and Objectives GOAL 1 Be the place where everyone can learn anything. Objectives: • Provide and promote opportunities to read for learning and for pleasure. 294 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 early childhood literacy programs based on current research in child development and learning. GOAL 2 Be the partner of choice for community organizations. Objectives: ▪ 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 in their activities. ▪ Encourage relationships with community organizations that enhance library services and programs. • Develop partnerships to enhance customers' digital experiences. GOAL 3 Connect community members to exchange and share stories, interests, and skills, with particu- lar emphasis on intergenerational opportunities. Objectives: ▪ Provide a forum to explore current events and issues of community interest. ▪ Engage community members in library services as volunteers and program advisors. • Connect community members to exchange and share stories, interests, and skills. • Encourage reading, writing, and other forms of creative expression among community members. GOAL 4 Leverage technology to integrate the library into the lives of community members. Objectives: ▪ Enhance and preserve unique and local collections. ▪ 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. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 295 LIBRARY • Provide staff training and technology infrastructure to support digital projects. • Keep abreast of emerging technologies and trends and of library -specific applications. GOAL 5 Provide a richer library experience for our community because of the expertise and effort of our dynamic staff. Objectives: • Attract and retain the most skilled and knowledgeable staff. ▪ Motivate and recognize staff through opportunities to innovate and be creative. ▪ Create opportunities for staff members to bring their talents and interests to work. • 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. 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of teens Description Purpose Status 6,059 5,653 6,366 3,910 This measure tracks the level of interest and participation in the library's recreational reading programs. 6,430 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. Due to a vacancy in the Teen Librarian position, which was held vacant for salary savings, there was a drop in teen -focused programming in late 2018 and early 2019. The drop in teen -focused programming is indicative of the type of impact that can be anticipated when Librarian positions are held vacant or cut. 296 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 Variety of Library Materials Neighborhood Branch Libraries Public Library Services Recommend Palo Alto's Libraries to Friends FY 2017 Actuals 86% 93% 92% FY 2018 Actuals 88% 92% 93% FY 2019 Adopted 88% 94% 93% FY 2019 Estimated 88% 92% 93% FY 2020 Adopted 89% 93% 94% 91% 92% 92% 92% 93% 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 Status Workload V Meeting Room Reservations Visits to library branches Virtual visits to the library Checkouts of library materials Annual turnover rate of library collections 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. ensures FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated 12,434 14,155 13,063 14,580 1,031,054 1,045,282 1,083,225 1,169,832 804,194 889,343 844,886 878,760 1,524,614 1,538,118 1,601,759 1,584,261 FY 2020 Adopted 14,726 1,181,530 887,548 1,600,104 3.76 4.51 3.20 4.28 4.30 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 297 LIBRARY 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Division Administration 1,169,323 1,164,911 1,042,232 1,187,866 145,634 Collection and Technical Services 2,529,570 2,591,757 2,704,162 2,817,967 113,805 Public Services 5,254,508 5,364,455 5,977,105 6,308,195 331,090 Total 8,953,402 9,121,123 9,723,499 10,314,028 590,529 FY 2020 Change % 14.0% 4.2% 5.5% 6.1% Dollars by Category Salary & Benefits Healthcare 915,672 892,788 940,644 990,332 49,688 5.3% Other Benefits 105,382 127,532 128,852 132,680 3,828 3.0% Overtime 10,063 12,020 70,571 72,406 1,835 2.6% Pension 1,001,520 1,096,212 1,167,087 1,484,589 317,503 27.2% Retiree Medical 435,745 458,425 444,128 457,452 13,324 3.0% Salary 4,208,827 4,329,080 4,504,861 4,624,038 119,177 2.6% Workers' Compensation 15,681 3,107 100,737 148,509 47,772 47.4% Total Salary & Benefits 6,692,891 6,919,165 7,356,879 7,910,006 553,127 7.5% Allocated Charges 929,613 1,024,363 1,110,435 1,259,768 149,333 13.4% Contract Services 350,139 379,141 353,065 337,993 (15,072) (4.3)% Facilities & Equipment 17,683 24,131 17,900 9,900 (8,000) (44.7)% General Expense 141,595 97,546 90,430 88,430 (2,000) (2.2)% Operating Transfers -Out 59,859 (59,859) (100.0)% Supplies & Material 821,480 676,778 734,931 707,931 (27,000) (3.7)% Total Dollars by Expense 8,953,402 9,121,123 9,723,499 10,314,028 590,529 6.1% Category Revenues Charges for Services 22,751 22,988 25,461 25,461 -% Operating Transfers -In 15,000 - (15,000) (100.0)% Other Revenue 58,843 37,029 51,400 60,123 8,723 17.0% Other Taxes and Fines 92,800 95,675 124,433 124,433 - -% Total Revenues 174,393 155,691 216,294 210,017 (6,277) (2.9)% 298 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET LIBRARY 3udget Summary L� 1 Positions by Division Administration Collection and Technical Services Public Services Total Staffing Administrative Assistant Administrative Associate Ill Job Classification Assistant Director Library Services Business Analyst FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 0.40 0.40 0.40 0.40 - -% 13.24 13.24 13.55 13.55 - -% 49.94 49.94 48.63 47.33 (1.30) (2.67)% 63.58 63.58 62.58 61.28 (1.30) (2.08)% FY 2017 Actuals 1.00 FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget 1.00 1.00 1.00 1.00 1.00 1.00 1.00 - 1.00 1.00 1.00 1.00 - Coordinator Library Programs 1.00 1.00 1.00 1.00 - Director Libraries 1.00 1.00 1.00 1.00 Division Head Library Services 1.00 1.00 1.00 1.00 Librarian 7.00 7.00 7.00 6.00 (1.00) Library Associate 7.00 7.00 7.00 7.00 - Library Specialist 12.50 12.50 11.50 11.50 - Management Analyst - 1.00 1.00 1.00 - Management Assistant 1.00 - Manager Library Services 4.00 4.00 4.00 3.00 (1.00) 348,213 Senior Librarian 9.00 9.00 9.00 8.00 (1.00) 667,945 Supervising Librarian 2.00 2.00 2.00 4.00 2.00 380,203 Sub -total: Full -Time Equivalent 48.50 48.50 47.50 46.50 (1.00) 3,979,268 Positions Temporary/Hourly 15.08 15.08 15.08 14.78 (0.30) 774,369 Total Positions 63.58 63.58 62.58 61.28 (1.30) 4,753,637 FY 2020 Change FTE FY 2020 Salary 76,090 164,154 139,476 83,493 232,203 151,986 441,106 465,055 722,494 106,850 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 299 LIBRARY 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 62.58 9,723,499 216,294 9,507,205 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Augment International Collection General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Adjustments to Costs of Ongoing Activities (59,859) (15,000) 12,716 40,145 — (21,998) 462,328 174,642 (2,021) 91,121 918 432 45,041 1,126 773,586 (15,000) (59,859) 12,716 40,145 (15,000) (6,998) 462,328 174,642 (2,021) 91,121 918 432 45,041 1,126 773,586 Total FY 2020 Base Budget 62.58 10,475,087 201,294 10,273,793 Budget Adjustments 1 Rinconada Library Staffing Alignments 2 Consolidation of Contract Services and Materials (1.00) (125,835) (46,795) 3 Children's Library Hours (0.30) 120 4 Pacific Library Partnership (PLP) Grant Funds Distribution 5 Library Supervising Staff Alignments Total Budget Adjustments (1.30) 8,723 2,728 (161,059) 8,723 8,723 (125,835) (46,795) 120 2,728 (169,782) Total FY 2020 Adopted Budget 61.28 10,314,028 210,017 10,104,011 300 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET LIBRARY 1 Rinconada Library Staffing Alignments j- 3udget Adjustments are more at Resisters cone frankat eereslsters.corrr Positions -1.00 Expenditures 0 (125,835) This ongoing action eliminates a 1.0 FTE Librarian at the Rinconada Library. Although this action is not anticipated to impact hours of operation, it will have service delivery impacts. In total, librarians in the Palo Alto City Libraries are responsible for responding to approximately 34,000 reference transactions per calendar year. While non -librarian staff can respond to some reference transactions, Librarian staff are expertly trained to respond specifically to public reference requests. Additionally, the Library eliminated a 1.0 FTE Librarian in FY 2019. These eliminations limit the Library's ability to respond quickly to answer reference questions, assist students with research, and to offer programming and tailored materials to different audiences. The impact can best be seen by the recent experience with Teen programs; when the Teen librarian position was held vacant for salary savings, there was an estimated 31 % reduction in participation in teen programs. (Ongoing savings: $126,000) Performance Results © 0 0 This action will impact Librarian staff capacity to respond to public reference requests and result in less program offerings and outreach to schools and the community. It will also yield cost savings. 2 Consolidation of Contract Services and Materials 0.00 (46,795) 0 (46,795) This ongoing action will realign expenses for contract services and materials purchased in Collections to reflect anticipated changes in usage from evolving needs. During the library expansion and renovation projects, some contract services were increased such as add-ons to consultative packages and increases to non -capital equipment contracts. By consolidating these contracts, the Library can save approximately $31,795. Materials purchased in collections have also evolved over time as usage of digital resources increase. The use of music CDs have stagnated since 2015 as patrons increasingly opt to stream music. By discontinuing the purchase of new music CDs in Collections, the Library can save approximately $15,000 in materials and services while patrons will continue to have access to music CDs currently in circulation. (Ongoing savings: $46,795) Performance Results Consolidating contract services and materials to align with evolving needs will have a neutral effect on services. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 301 LIBRARY 3udget Adjustments 3 Children's Library Hours - :o This action will restore funding for the Children's Library Hours on Sundays one-time to evaluate the impact of eliminating Sunday hours with a commensurate reduction of 0.10 FTE Librarian, 0.10 FTE Library Clerk (H) and 0.10 FTE Library Page for a total staff reduction of 0.30 FTE. The Library Department conducts regular attendance counts to inform decisions about programming and operations, with randomly selected gate attendance counts conducted at various locations. The Children's Library is currently open 10:00 am to 6:00 pm Monday through Saturday, and 1:00 pm to 5:00 pm on Sundays. Results from attendance counts conducted in April 2018 determined the hours of 1:00 pm to 5:00 pm on Sundays at the Children's Library had the fewest attendees. Eliminating Sunday hours at that location would be operationally effective due to low traffic; however, $18,000 in temporary salary expenses for the equivalent of 0.30 FTE will be provided in FY 2020 to fund Sunday hours at the Children's Library and allow staff to evaluate the impact of eliminating Sunday hours ongoing. (Ongoing savings: $18,583) Performance Results © 0 Reducing hours during a day of the week with the least amount of traffic at the Children's Library will generate ongoing savings that have the least disruptive impact to patrons that visit the Children's Library. Additional traffic may be expected at other libraries as Sunday patrons utilize library services at other locations. 4 Pacific Library Partnership (PLP) Grant Funds Distribution T 0.08, 723 This one-time action will increase grant revenue received from the Pacific Library Partnership (PLP) to support the additional cost of LINK+, a software tool that enables library patrons to search a unified catalog of holdings and borrow items through a consortium of more than 65 public and academic libraries. This digital service is part of a special project among libraries to study the use of a shared Integrated Library System. The PLP manages the allocation of funds received from the California Library Services Act (CLSA) to support communication and delivery costs. The PLP distributes these funds to library partners, one of which is the City of Palo Alto Library. (Ongoing costs: $0) Performance Results 0 This action will allow the Library to continue utilizing the Link+ service at current levels while minimizing financial impacts. 5 Library Supervising Staff Alignments This ongoing action will eliminate a vacant 1.0 FTE Senior Librarian position and a vacant 1.0 FTE Manager of Library Services position, and add two 1.0 FTE Supervising Librarian positions resulting in a net -zero FTE change as a part of the Library's staffing realignment strategy. With this staffing realignment, the Library will be able to consolidate and standardize Adult and Children's programming for all libraries under one Manager of Library Services, and shift most of the supervising work to Supervising Librarians. (Ongoing savings: $1,408) Performance Results 0 This staffing realignment will have a moderate impact to service delivery, with anticipated increases to customer satisfaction, services and streamlining how programs are managed. By consolidating Adult and Children's programming under the Manager of Library Services position, and adding two Supervising Librarians, programs can be managed in a more comprehensive manner without impacting staff supervision. 302 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 2020 ADOPTED OPERATING BUDGET 303 OFFICE OF EMERGENCY SERVICES EMERGENCY SERVICES DIRECTOR Kenneth Dueker 1.00 Office of Emergency Services Coordinator 1.00 Program Assistant II FY 2020 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. 304 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 the Intrusion Detection System (IDS) in collaboration with other City departments. The IDS replaced "human monitors" at the Caltrain track intersections and provides 24x7 coverage to detect unsafe conditions. ▪ Participated heavily in the Comprehensive Plan 2030 update in addition to the ongoing updates to City emergency plans. • Deployed an emergency two-way radio network in the Stanford Research Park in partnership with Stanford University (Lands, Building, Real Estate). ▪ Designed and helped build the new Public Works Mobile Department Operations Center (MDOC) - a fully renewable -powered (solar -battery) system - in collaboration with the Public Works Department. • Deployed OES staff members to Chico, CA for two weeks to augment the Town of Paradise Emergency Operations Center staffing in response to the Camp Fire. ▪ Continued to develop the Emergency Services Volunteer (ESV) program and general community public safety awareness through ongoing public education sessions, trainings, and exercises. ▪ 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 develop emergency plans, annexes, and protocols. ▪ Coordinate regional planning for wildland fire response and evacuations. • 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 2020 ADOPTED OPERATING BUDGET 305 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. 306 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES Key Performance ti easures READINESS OF OFFICE OF EMERGENCY SERVICES (OES) RESOURCES Goal Objective Percent of Office of Emergency Services resources that are able to respond effectively to hazards Description 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. FY 2017 Actuals 97% FY 2018 Actuals 98% FY 2019 Adopted 95% FY 2019 Estimated 95% FY 2020 Adopted 95% 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. Purpose Critical resources will improve the City's ability to manage a response. Status Workload V 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) and support vehicles and equipment were also maintained at a near fully operational rate and involved in a number of deployments in FY 2019. easures Number of presentations, training sessions, and exercises Number of deployments of the Emergency Operations Center, Mobile EOC, and Incident Command Post FY 2017 Actuals 182 FY 2018 Actuals 216 FY 2019 Adopted 150 FY 2019 Estimated 163 FY 2020 Adopted 150 37 62 40 33 35 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 307 OFFICE OF EMERGENCY SERVICES 3udget Summary J Dollars by Division Emergency Services Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 983,124 968,477 1,515,114 1,728,080 212,967 14.1% 983,124 968,477 1,515,114 1,728,080 212,967 14.1% Dollars by Category Salary & Benefits Healthcare 37,852 35,781 38,056 42,910 4,854 12.8% Other Benefits 11,830 12,098 14,577 14,719 143 1.0% Overtime 880 2,283 - -% Pension 101,971 101,659 111,738 138,382 26,643 23.8% Retiree Medical 51,613 54,299 49,844 51,339 1,495 3.0% Salary 385,750 383,382 428,803 420,657 (8,146) (1.9)% Workers' Compensation 1,286 1,596 16,272 22,402 6,130 37.7% Total Salary & Benefits 591,182 591,098 659,289 690,409 31,119 4.7% Allocated Charges 45,905 54,407 89,072 116,550 27,478 30.8% Contract Services 108,138 114,993 559,500 559,500 - -% Facilities & Equipment 134,991 134,493 117,000 277,000 160,000 136.8% General Expense 34,437 28,788 34,700 34,700 - -% Operating Transfers -Out 5,631 - (5,631) (100.0)% Supplies &Material 68,470 44,699 49,922 49,922 -% Total Dollars by Expense 983,124 968,477 1,515,114 1,728,080 212,967 14.1% Category Revenues Charges to Other Funds 94,623 94,623 96,336 95,589 (747) (0.8)% From Other Agencies 2,600 200,000 200,000 -% Total Revenues 94,623 97,223 96,336 295,589 199,253 206.8% Positions by Division Emergency Services 3.48 3.48 3.48 3.48 Total 3.48 3.48 3.48 3.48 -% _0/0 308 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES Staffing Director Office of Emergency Services Job Classification Office of Emergency Services Coordinator Program Assistant Program Assistant II Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2017 Actuals 1.00 1.00 FY 2018 Actuals 1.00 1.00 1.00 1.00 3.00 FY 2019 Adopted Budget 1.00 1.00 FY 2020 Adopted Budget 1.00 1.00 1.00 1.00 FY 2020 Change FTE FY 2020 Salary 160,493 138,029 77,417 3.00 3.00 3.00 — 375,938 0.48 0.48 0.48 0.48 35,942 3.48 3.48 3.48 3.48 — 411,881 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 309 OFFICE OF EMERGENCY SERVICES 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 3.48 1,515,114 96,336 1,418,778 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Proactive Contributions to City's Unfunded Pension Liability Revenue Alignment Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (5,631) 1,415 6,485 (5,631) 1,415 6,485 — 2,269 — 2,269 7,933 17,056 (747) 14,222 680 3,888 7,933 17,056 747 14,222 680 3,888 7,273 — 7,273 (355) 50,697 (747) (355) 51,444 Total FY 2020 Base Budget 3.48 1,568,080 95,589 1,472,491 Budget Adjustments 1 Emergency Services Equipment Funding Reduction 2 Mobile Solar Energy Generation and Storage Trailer Total Budget Adjustments (40,000) 200,000 200,000 160,000 200,000 (40,000) (40,000) Total FY 2020 Adopted Budget 3.48 1,728,080 295,589 1,432,491 310 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES 1' eI'gency?)h t Co you do? E 9enty Ran Pa1140 a a 3udget Adjustments Get mW.ad [n udget Adjustme t 1 Emergency Services Equipment Funding Reduction Positions Expenditures Revenues Net General Fund 0.00 (40,000) j0 (40,000) This ongoing action reduces OES's budget for equipment by $40,000 from $100,500 to $60,500. This budget is used for the purchase of items that support OES's service delivery, such as public safety radios, peripheral equipment for the OES vehicles and facilities (including the Mobile Emergency Operations Center), video cameras, and other supporting accessories. This action will increase the cycle time to replace such items and result in longer use of existing equipment. (Ongoing savings: $40,000) Performance Results © 0 0 This action may result in delays to the acquisition of equipment and replacements. 2 Mobile Solar Energy Generation and Storage Trailer 0.00 200,000 200,000 This one-time action recognizes grant funding from the State Homeland Security Grant Program (SHSGP) through the County of Santa Clara. The award of $200,000 will fund the purchase of a mobile solar energy generation and storage trailer. This trailer will be used to provide emergency power to City facilities and sites and to operate as a hybrid battery - generator to charge or extend the fuel supply of vehicles and other portable equipment. The trailer can also be deployed as part of the City's response to emergencies and will increase the City's effectiveness at dealing with various hazards. (Ongoing net costs: $0) Performance Results © © 0 This action will provide an alternative, sustainable source of power in emergencies or as needed. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 311 CITY OF PALO ALTO PLANNING AND DEVELOPMENT SERVICES Mission Statement The mission of the Planning and Development Services Department is to provide effective implementation of land use development, planning, housing and environmental policies, and efficient processing of building permit applications that maintain and enhance the City as a safe, vital, and attractive community. The Planning and Development Services Department is responsible for a range of actions aimed at preserving and enhancing the quality of life in Palo Alto, protecting the public health, safety, and general welfare while facilitating land use and development decisions through consistent and transparent processes. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 313 PLANNING AND DEVELOPMENT SERVICES DIRECTOR PLANNING & DEVELOPMENT SERVICES Jonathan Lait 1.00 Principal Mgmt Analyst* OPERATIONS/BUDGET 2.00 Senior Management Analyst 3.00 Administrative Associate III 2.00 Administrative Associate II 1.00 Program Assistant DATA ANALYSIS/RECORDS 1.00 Senior Business Analyst 1.00 Senior Planner 1.00 Administrative Associate III 1.00 Administrative Associate I 1.00 Administrative Assistant 1.00 Assistant Director 1.00 Chief Building Official 1.00 Assistant Building Official PROJECT MGMT/DEV SERVICES 1.00 Planning Manager 3.00 Development Project Coordinator I I I 2.00 Development Project Coordinator II PROJECT MGMT/ INSPECTIONS 1.00 Planning Manager 4.00 Building Inspector Specialist I1.00 Chief Planning Official PROJECT MGMT/CODE ENF 1.00 Planning Manager 1.00 Associate Planner 3.00 Building/Planning Technician 1.00 Code Enforcement Lead 2.00 Code Enforcement Officer CURRENT PLANNING 1.00 Planning Manager 1.00 Principal Planner 2.00 Senior Planner 3.00 Planner 2.00 Associate Planner LONG RANGE PLANNING 1.00 Planning Manager 1.00 Principal Planner 1.00 Senior Planner 1.00 Planner FY 2020 POSITION TOTALS 51.00 - Full-time 3.03 - Hourly * This Principal Management Analyst is limited term, with an end date of June 30, 2020 314 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Description The Planning and Development Services (PDS) Department is responsible for the following functions: ADMINISTRATION This division provides personnel, contract, budget, and project support, including managing and measuring performance metrics for the department. The division also supports the Planning and Transportation Commission, Architectural Review Board, Historic Resources Board, and other public meetings. CODE ENFORCEMENT This division is responsible for enforcement of code requirements and conditions of approval. 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, and providing general information to the public regarding the City's zoning and Comprehensive Plan provisions. DEVELOPMENT SERVICES This division is responsible for taking in applications for entitlements and permits, routing and coordinating with other departments such as Public Works, Fire, and Utilities to ensure that the proposed and completed construction complies with all state and local code requirements, including Green Building requirements. 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 and site -spe- cific plans and is responsible for data and analysis to support a wide variety of planning projects. Accomplishments Completed the 2018 Housing Ordinance, which creates more opportunities for new housing production, streamlines the project review process, increases unit density, reduces parking requirements to be more aligned with industry standards, increases floor area for housing projects, and preserves local control of the design review process. Initiated the North Ventura Coordinated Area Plan Working Group (NVCAP) which seeks to describe a vision for the future of the North Ventura area as a walkable neighborhood with multi -family housing, ground floor retail, a public park, creek improvements and an interconnected street grid. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 315 PLANNING AND DEVELOPMENT SERVICES • Submitted Building Code Effectiveness Grading Schedule reevaluation application to the Insurance Services Office (ISO). ▪ Completed a Palo Alto building energy code cost effectiveness study for residential and nonresidential buildings and participated in State-wide study to explore exceeding requirements related to the upcoming 2019 Title 24 Building Energy Efficiency Standards. • Supported approval of Wilton Court affordable housing project at 3705 El Camino Real, which will contain 59 units of below -market -rate housing in the Ventura neighborhood. • Led the Green Building Technical Advisory Committee by conducting community wide meetings to explore exceeding requirements related to the upcoming 2019 Title 24 Building Energy Efficiency Standards and Green Building Code. • Participated in Citywide Sustainability Implementation Team committee meetings and presented the City's program at the Alliance for Innovation's annual Transforming Local Government Conference in Reno, Nevada. ▪ Requested funds from the StateOs Office of Emergency Services Hazard Mitigation Assistance Grant Program for advancement of the CityOs Seismic Ordinance program. • Continued customer service improvements for inspection services by redesigning current technology methods. ▪ Combined fee collection of the Business Registry Certificate and the Downtown Business Improvement District into one timing period cycle and one invoice and online payment option which reduces the City's costs, increases customer satisfaction, and increases business data accuracy. The Business Registry Certificate program will be reassigned to the Administrative Services Department in FY 2020. • Launched Development Center customer queuing software system to provide customers more predictability with wait times at the counter, increase staff productivity, and gain further insights in customer trends. • Codified Transportation Demand Management (TDM) requirements for Comprehensive Plan requirements. ▪ Completed updates to clarify the Accessory Dwelling Units (ADU) regulations and support increased production of units, including the elimination of the minimum lots size for all units and elimination of development impact fees for all Junior Accessory Units and garage - conversion ADUs. • Reviewed and commented on the Recirculated Draft Environmental Impact Review (EIR) and worked with City Council to provide inputs into the County's project Development Agreement negotiations with Stanford and project conditions of approval. Initiatives • Establish the Planning and Development Services (PDS) Department through the merging of the Planning and Community Environment (PCE) Department and Development Services Department (DSD) to create one cohesive unit focused on entitlements, permitting, code enforcement, and land use visioning. 316 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES • Present an ordinance for City Council to adopt new 2019 California Building Standards Codes. • Continue to advance tasks identified in the Housing Work Plan adopted by the City Council in February 2018. ▪ Pursue a multi -department effort to implement recommendations from the Code Enforcement audit. • Continue to support the City's interests with the Board of Supervisors as they review the Stanford 2018 GUP application and act, including discussion of the 1985 Stanford Agreement and the administrative protocol. 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 codes through inspection and enforcement. GOAL 2 Deliver ongoing programs that improve people's lives, including code enforcement, housing, development services, historic preservation, and community block grant programs. Objectives: ▪ Manage the City's Community Development Block Grant (CDBG) and Below Market Rate (BMR) housing programs. • Exemplify the City's commitment to well -enforced building codes, health, safety, and general welfare through achieving the highest Insurance Services Office (ISO) rating. • Respond to citizen complaints and effectively abate zoning and building code violations. 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 Development Services. ▪ Monitor and track real-time activity levels from each of the departments to ensure activities are aligned with expenditures. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 317 PLANNING AND DEVELOPMENT SERVICES 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. /Key Performance Veasures AVERAGE NUMBER OF DAYS FROM ISSUANCE TO FINAL Goal Objective Average number of days between permit issuance and temporary occupancy or final inspection Description Purpose Provide a high level of customer service and decrease the total time to approve the construction phase of a commercial tenant improvement. Decrease number of days from permit issuance to final inspection. FY 2017 Actuals 161 FY 2018 Actuals 186 FY 2019 Adopted 148 FY 2019 Estimated 181 FY 2020 Adopted 176 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. Status This measure is impacted by the contractor's performance and their ability to complete projects in a timely manner after receiving approved plans from the City. During Fiscal Years 2018 and 2019, the department noticed high levels of construction activity in the Bay Area. The ability for developers to find qualified contractors and for those contractors to perform on schedule had an impact on this measure. The department's inspection team continues to meet the department's expectation of next day inspection. CODE ENFORCEMENT Goal Objective Percent of surveyed residents rating the quality of code enforcement as "good" or "excellent" Description Purpose Status Deliver ongoing programs that improve people's lives, including code enforcement, housing, development services, historic preservation, and community block grant. Respond to citizen complaints and effectively abate zoning and building code violations. FY 2017 Actuals 56% FY 2018 Actuals 55% FY 2019 Adopted 60% FY 2019 Estimated 55% FY 2020 Adopted 60% 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. According to the 2018 NCS, 55% of respondents rated Code Enforcement (weeds, abandoned buildings, etc.) as good or excellent. 318 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 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. Percent of Planning Review of building plan checks completed within 30 days of application intake Description Purpose Status FY 2017 Actuals 87% FY 2018 Actuals 74% FY 2019 Adopted 90% FY 2019 Estimated 80% FY 2020 Adopted 80% 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. INSURANCE SERVICES OFFICE (ISO) RATING Goal Exemplify the City's commitment to well -enforced building codes, health, safety, and general welfare. Objective Obtain and maintain the highest rating (Class 1). Insurance Services Office (ISO) Rating Description Purpose Status FY 2017 Actuals 1 FY 2018 Actuals 1 FY 2019 Adopted 1 FY 2019 Estimated 1 FY 2020 Adopted 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 class 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 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. Development Services continues to work with ISO to ensure that staff training, certifications, public awareness, and outreach programs meets the standards. 1 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 319 PLANNING AND 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of permits initiated within a given period where all department reviews are completed Description Purpose Status 69% 54% 71% 57% 80% This measure tracks the percentage of time building permit plan reviews are completed by the estimated due date provided to the customer at the time of permit submittal. This includes projects that are submitted for the standard 30 - day review period and require multi -departmental review. This measure is a result of the collaborative approach with all involved departments. A project is not deemed on -time unless every review stage is completed on time. Customers depend upon the accuracy and dependability of estimated due dates to plan their construction projects. They may move out of their house or enter into a lease on a commercial tenant space based on the estimated timeline provided by Development Services. Being successful at adhering to timelines reduces costs for developers and property owners and has a direct correlation to the economic vitality of the City. This performance measure is dependent on plan review staff and contractors reviewing plans on time. In preparation for the FY 2020 budget, management identified that the logic calculating the percentage was skewed due to the software system miscalculation of project due dates to include weekend days. Staff cannot complete a project on a weekend day. Furthermore, the data includes voided and cancelled permits. Additionally, inaccurate data such as outside plan checks not being recorded on time in the system. Due to timing and department work plan objectives, staff has decided to publish the data as is to provide consistency with historic reporting. Staff has initiated a task to have more accurate data and will update the percentages upon project completion. Industry best practices call for 80% on -time plan review. The department will aim for this goal during FY 2020. 320 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND 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 2017 FY 2018 Actuals Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of permits that are reviewed and approved by all necessary departments over-the- counter. Description Purpose Status 61% 67% 64% 63% 65% 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. Development Services strives to issue as many permits over-the-counter as possible. This is a function of all divisions being able to review and approve projects. Additionally, program and policy decisions impact the ability to keep a high over-the-counter approval rate. Furthermore, maintaining customer education program and materials, adequate staff training, and staff levels are contributing factors to this measure. Development Services is satisfied with the historic trend, yet mindful of increasing regulations that may limit staff's ability to process projects over the counter. PLANNING AND DEVELOPMENT SERVICES • c ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 321 PLANNING AND DEVELOPMENT SERVICES Workload V ensures FY 2018 FY 2019 Actuals Adopted FY 2019 Estimated FY 2020 Adopted Number of planning and Architectural Review Board applications completed (including staff level) Average number of days for Planning to first review building permit applications Average number of days from Individual Review application to approval* Number of building permit applications Number of building permits issued Number of fire permit inspections Number of walk-in customer interactions Number of building inspections 365 342 365 320 300 25 20 20 20 20 210 68 60 80 80 3,709 3,938 3,895 3,870 3,903 2,970 3,105 3,394 3,264 3,336 2,873 2,350 2,179 2,505 2,352 22,107 22,085 22,782 22,096 22,550 25,206 26,893 28,182 24,430 27,752 Beginning in FY 2019, the measure was 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. 322 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 3udget Summary J Dollars by Division Administration Building Fire Green Building Planning Counter Support Planning Public Works Total FY 2017 Actuals 3,959,066 5,026, 758 2,103, 697 398,807 673,351 4,717,223 702,207 17,581,109 FY 2018 Actuals 4,337,696 5,635,155 2,073,943 386,349 644,137 4,230,918 942,688 18,250,886 FY 2019 Adopted Budget 4,728,030 5,037,607 2,295,830 304,000 761,947 5,209,294 1,227,354 19,564,062 FY 2020 Adopted Budget FY 2020 Change $ 4,943,202 215,172 5,128,576 90,969 2,454,984 159,154 304,000 - -% 789,567 27,620 3.6% 5,492,973 283,679 5.4% 1,249,830 22,476 1.8% 20,363,132 799,070 4.1% FY 2020 Change % 4.6% 1.8% 6.9% Dollars by Category Salary & Benefits Healthcare 989,289 1,018,091 1,173,236 1,334,024 160,788 13.7% Other Benefits 156,432 193,234 214,413 217,265 2,852 1.3% Overtime 330,413 287,343 95,374 97,854 2,480 2.6% Pension 1,859,546 2,105,557 2,270,346 2,852,430 582,084 25.6% Retiree Medical 631,247 664,519 645,983 665,362 19,379 3.0% Salary 6,194,491 6,415,444 7,361,459 7,293,386 (68,073) (0.9)% Workers' Compensation 13,037 101,488 172,769 241,480 68,711 39.8% Total Salary & Benefits 10,174,456 10,785,675 11,933,581 12,701,803 768,222 6.4% Allocated Charges 1,380,814 1,647,953 2,060,213 2,198,509 138,296 6.7% Contract Services 4,698,011 4,161,066 3,667,699 3,634,699 (33,000) (0.9)% Facilities & Equipment 7,501 2,405 15,650 15,650 - -% General Expense 341,809 468,571 519,314 522,514 3,200 0.6% Operating Transfers -Out 7,607 33,933 121,412 7,607 (113,805) (93.7)% Rents&Leases 905,229 1,092,015 1,205,224 1,241,381 36,157 3.0% Supplies & Material 65,683 59,268 40,969 40,969 -% Total Dollars by Expense Category 17,581,109 18,250,886 19,564,062 20,363,132 799,070 4.1% Revenues Charges for Services 7,279,105 10,467,921 8,922,715 9,803,816 881,100 9.9% Charges to Other Funds 222,939 362,500 21,797 21,797 -% PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 323 PLANNING AND DEVELOPMENT SERVICES 3udget Summary Other Revenue Other Taxes and Fines Permits and Licenses Total Revenues Positions by Division Administration Building Fire Planning Counter Support Planning Public Works Total Staffing Job Classification Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Chief Building Official Assistant Director PCE Associate Engineer Associate Planner Building Inspector Specialist Building/Planning Technician Business Analyst Chief Building Official Chief Planning Official Chief Transportation Official Code Enforcement Officer FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget 38,974 270,931 2,500 3,413 551,529 120,133 25,637 25,637 6,644,639 8,055,975 8,073,533 8,209,915 14,737,186 19,277,459 17,046,182 18,064,577 FY 2020 Change $ 913 136,382 1,018,395 FY 2020 Change % 36.5% -% 1.7% 6.0% 12.12 12.16 12.01 13.44 1.43 11.91% 17.21 17.81 17.28 15.60 (1.68) (9.72)% 7.08 7.08 6.88 6.88 - - % 5.69 5.09 5.09 4.50 (0.59) (11.59)% 19.66 19.94 19.45 (0.49) (2.46) % 4.72 4.81 5.50 5.50 -% 66.50 66.61 66.70 65.37 (1.33) (1.99)% 19.68 FY 2017 Actuals 2.00 1.00 3.00 3.30 1.00 1.00 0.02 1.00 4.00 3.00 1.00 1.00 1.00 0.10 2.00 FY 2018 Actuals 2.00 1.00 3.00 3.30 1.00 1.00 0.02 1.00 4.00 3.00 1.00 1.00 1.00 0.06 2.00 FY 2019 Adopted Budget 2.00 1.00 2.80 3.29 1.00 1.00 0.02 3.03 4.00 3.00 1.00 1.00 1.00 0.09 2.00 FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Salary 1.00 (1.00) 82,306 1.00 - 65,320 2.80 - 193,094 4.00 0.71 299,256 1.00 123,635 1.00 207,272 0.20 23,310 3.15 0.12 310,995 4.00 - 425,684 3.00 240,213 (1.00) - 1.00 179,504 1.00 - 160,451 0.22 (0.09) 2.00 - 191,502 324 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Staffing Job Classification Code Enforcement -Lead Deputy Chief/Fire Marshal Development Project Coordinator II Development Project Coordinator III Development Services Director FY 2017 Actuals 1.00 0.80 2.00 3.00 1.00 FY 2018 Actuals 1.00 0.80 2.00 FY 2019 Adopted Budget 1.00 0.80 2.00 3.00 3.00 1.00 1.00 FY 2020 Adopted Budget 1.00 0.80 2.00 3.00 FY 2020 Change FTE (1.00) FY 2020 Salary 102,458 160,460 174,054 287,886 Director Planning/Community 1.00 1.00 1.00 1.00 - 238,638 Environment Engineer 0.64 0.64 0.64 0.64 76,372 Engineering Technician III 1.78 1.78 1.78 1.78 - 158,828 Fire Inspector 3.20 3.20 3.20 3.20 526,356 Hazardous Materials Inspector 1.60 1.60 1.60 1.60 - 263,178 Industrial Waste Inspector 0.01 0.01 0.01 0.01 - 882 Industrial Waste Investigator 0.35 0.35 0.35 0.35 - 34,683 Inspector, Field Services 0.68 0.68 0.68 0.68 65,477 Landscape Architect Park Planner 0.50 0.50 57,772 Management Analyst 1.89 1.99 1.79 0.01 (1.78) 1,025 Manager Development Center 1.00 1.00 1.00 - (1.00) - Manager Environmental Control 0.10 0.10 0.10 0.10 - 12,357 Program Manager Planning 4.00 4.00 3.00 5.00 2.00 703,021 Manager Urban Forestry 0.04 0.04 0.04 0.04 5,967 Planner 4.00 4.00 4.00 4.00 - 415,355 Planning Arborist 0.25 0.29 - - - - Planning Division Manager - - 1.00 - (1.00) - Principal Management Analyst 1.00 1.00 79,750 Principal Planner 1.00 2.00 1.00 250,659 Program Assistant 1.00 1.00 67,883 Project Engineer 0.03 0.03 0.33 0.13 (0.20) 16,697 Project Manager 0.07 - - - Senior Business Analyst - - 1.00 1.00 143,500 Senior Engineer 0.46 0.46 0.46 0.46 75,887 Senior Industrial Waste Investigator 0.01 0.01 0.01 0.01 - 1,060 Senior Management Analyst 2.00 2.00 1.88 2.00 0.12 298,563 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 325 PLANNING AND DEVELOPMENT SERVICES Staffing Senior Planner Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 Budget Change FTE FY 2020 Salary Supervisor Inspection and Surveying Traffic Engineering -Lead Transportation Planning Manager Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 6.64 0.27 6.60 0.27 3.60 0.27 3.60 0.27 0.10 0.10 0.05 (0.05) 438,969 35,252 11,933 62.24 62.23 62.32 62.45 0.13 7,207,464 4.26 4.38 4.38 2.92 (1.46) 268,159 66.50 66.61 66.70 65.37 (1.33) 7,475,623 Note: The Planning and Development Services Department was established in FY 2020 through the merging of the Planning and Community Environment Department and Development Services Department. This reorganization also included the reallocation of budgeted transportation activities from the former Planning and Community Environment Department to the newly established Office of Transportation. Prior year values appearing in the Budget Summary tables and Staffing tables of this section have been estimated and do not reflect a comprehensive restatement. Certain prior year shared administrative functions appear in the Planning and Development Services Department as these are budgeted at the department level rather than program. 326 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 71.59 21,481,744 17,187,514 4,294,230 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) (121,585) 41,980 75,207 (121,585) 41,980 75,207 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (4,398) — (4,398) Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability Rent and Lease Expenditure (office space lease at 526 Bryant St) On -Call Contracts (deposit -based) Revenue Adjustment (align with cost recovery levels) Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges 0.02 660,992 341,206 36,157 25,000 2,384 (44,630) 44,232 26,180 (78,144) 25,000 1,118, 990 660,992 341,206 36,157 (1,118,990) 2,384 (44,630) 44,232 26,180 (78,144) Adjustments to Costs of Ongoing Activities 0.02 1,013,377 1,143,990 (130,613) Total FY 2020 Base Budget 18,331,504 4,159,219 Budget Adjustments 1 Reallocation of Transportation Staffing and Operations (Transfer from the Planning and Development Services Department to the Office of Transportation) (6.38) (2,038,578) (141,332) (1,897,246) PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 327 PLANNING AND DEVELOPMENT SERVICES 3udget Reconciliation i Positions Net Expenditures Revenues General Fund 2 Business Registry Certificate Program (Transfer from former Development Services Department to Administrative Services Department) 3 Planning and Development Services Department Vacancies 4 Planning and Development Services Department Staffing Reorganization (1.00) (239,029) (175,103) (152,393) — 1.14 302,409 49,508 (63,926) (152,393) 252,901 Total Budget Adjustments (6.24) (2,127,591) (266,927) (1,860,664) Total FY 2020 Adopted Budget 65.37 20,363,132 18,064,577 2,298,555 328 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Reallocation of Transportation Staffing and Operations (Transfer from the Planning and Development Services Department to the Office of Transportation) -6.38 (2,038,578) (141,332) (1,897,246) This ongoing action realigns the funding of various positions and transportation activities from the Planning and Development Services Department to the Office of Transportation in order to establish a dedicated office for transportation and traffic programs. The newly established office is situated in the City Manager's Office and will provide analytical support and manage the General Fund programming, three parking funds, and capital improvement programming for transportation capital investments. This realignment of funding is a net -zero transaction across all city funds that shifts a total of 14.62 FTE positions: 6.38 FTE positions in the General Fund, 0.10 FTE positions in Housing Funds, 3.05 FTE positions in parking funds, and 5.09 FTE positions in the Capital Improvement Fund. Additionally, this action realigns $845,000 in non -salary expenditures from the Planning and Development Services Department to the Office of Transportation for continued operational costs of bicycle and pedestrian programs, City shuttle services, and safe routes to school. These costs are partially offset by $141,332 in revenues received from the State gas tax and earmarked for transportation and traffic -related improvements. A corresponding adjustment is recommended in the Office of Transportation. (Ongoing net savings: $2,092,389) Performance Results © © 0 This action realigns staffing to establish an Office of Transportation and address the City Council priority to mitigate traffic and transportation challenges. 2 Business Registry Certificate Program (Transfer from former Development Services Department to -1.00 (239,029) (175,103) (63,926) Administrative Services Department) 1 This action reallocates the Business Registry Certificate (BRC) program from the former Development Services Department to the Administrative Services Department and reassigns the administrative management of both this program as well as the financial management of the Business Improvement District (BID) to the Administrative Services Department. With the merging of the Development Services Department and the Planning and Community Environment Department, this function was determined to best be placed in Administrative Services where the majority of taxes and administrative fees are handled by various teams with the Treasury Division of the department. This reallocation of 1.0 FTE Management Analyst, $50,000 in contract services, and approximately $175,000 in revenue estimated to be generated from the BRC, aligns the resources added by the City Council in February 29, 2016 (CMR 6661). A corresponding adjustment is recommended in the Administrative Services Department. (Ongoing net savings: $72,000) Performance Results 4 This action reallocates staff between departments and no performance impacts are anticipated to the Business Registry Certificate program. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 329 PLANNING AND DEVELOPMENT SERVICES 3 Planning and Development Services Department Vacancies 3udget Adjustments Positions Net Expenditures Revenues General Fund 0.00 (152,393) 0 (152,393) This one-time action recognizes vacancy savings equivalent to 1.0 FTE Associate Planner during FY 2020. Currently the Planning and Development Services Department is experiencing a vacancy factor of approximately 18%, at positions equivalent to or higher than this level. In the coming year, the department will focus on the reorganization of planning, development, and transportation services across departments and will prioritize the recruitment of the more critical positions to assist with these major transitions. It is anticipated that these recruitments will not be fully addressed until further through FY 2020 and therefore savings can be anticipated. (Ongoing savings: $0) Performance Results © 0 This action may result in increases to processing timelines to applicants. 4 Planning and Development Services Department Staffing Reorganization 302,409 49,508 252,901 This action recommends various staffing adjustments to merge the former Development Services Department (DSD) and Planning and Community Environment Department (PCE) into a newly established Planning and Development Services (PDS) Department. This reorganization of staff is recommended to centralize the entitlement, permitting, and enforcement functions, while maintaining the Development Center as a "one -stop shop" and ensuring a successful and sustainable allocation of resources. This action results in a net addition of 2.0 full time positions across all City funds in FY 2020; however, only 1.0 of these positions is ongoing and the other is partially offset by the elimination of part-time staffing equivalent of 1.46 FTE. In the General Fund, this action results in the addition of 1.14 FTE and total cost of approximately $300,000. Of these costs, $50,000 will be offset by fees for service in the Development Center. In other City funds, this action results in net reduction of 0.25 FTE positions in parking funds, and 0.35 FTE positions in the Capital Improvement Fund. (Ongoing net costs: $126,624) Performance Results This action ensures that appropriate staffing resources are available to support planning and development activity. 330 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE 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 2020 ADOPTED OPERATING BUDGET 331 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 INFORMATION MANAGEMENT 1.00 Public Safety Program Manager 1.00 Police Records Specialist - Lead 6.00 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 2020 POSITION TOTALS 150.50 - Full-time 2.82 - 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 CONTROL 1.00 Animal Control Officer -Lead 3.00 Animal Control Officer TRAFFIC, PARKING, & SPECIAL EVENT SERVICES 1.00 Police Lieutenant 2.00 Police Sergeant 6.00 Police Agent/Officer 1.00 Public Safety Program Manager 8.00 Community Service Officer 332 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE Description The Police Department provides a wide range of public safety services for the City of Palo Alto through the following divisions: FIELD SERVICES Responsible for police response, critical incident resolution, regional assistance response, and police services for special events. TECHNICAL SERVICES Provides 911 dispatch services for Police, Fire, Utilities, Public Works, Stanford, and Police infor- mation technology management. INVESTIGATIONS Conducts police investigations, oversees storage and maintenance of evidence, and coordinates some youth services activities. TRAFFIC SERVICES Responsible for traffic enforcement, complaint resolution, and school safety. PARKING SERVICES Responsible for parking enforcement, parking citations and adjudication, and abandoned vehi- cle abatement. POLICE PERSONNEL SERVICES Oversees police hiring, retention, personnel records, and training. ANIMAL CONTROL Provides regional animal control and enforcement. Accomplishments ▪ Re -deployed the Traffic Enforcement Team with an emphasis on general traffic enforcement and school safety issues. • Trained all Palo Alto officers in the use of naloxone (Narcan) to reduce the incidents of death by opiate overdose. • Created and implemented a Chief's Advisory Group (CAG) to seek community input on department policy. ▪ Implemented body -worn cameras in the patrol division to augment the in -car camera system. ▪ Selected and trained a new canine team, bringing the department total to two dogs. Trained one of the dogs in explosives detection. POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 333 POLICE • Started a one-year Community Service Officer pilot program to provide enhanced services to the community by supplementing the work of patrol officers. ▪ Hosted and participated in citywide National Night Out events throughout Palo Alto for the first time in ten years. ▪ Taught two Basic Citizens Police Academies and one Advanced Citizens Police Academy. • Implemented a citywide, multi -year radio migration to digital frequencies, allowing for regional communication during normal operations as well as large scale emergencies. • Partnered with Public Works to obtain City Council approval of the Public Safety Building (PSB) project and the selection of a PSB public artist. Initiatives • Recruit and hire police officers and dispatchers to fill vacancies. ▪ Assess the employment application process in order to expedite hiring. • Continue to partner with Public Works on the Public Safety Building project by completing construction documents and submitting plans for building permits. ▪ Provide accurate and timely public safety information to the community using a variety of sources including traditional news releases and social media networks with an expectation of increasing transparency. • Explore new technology in an effort to enhance police services to the community. ▪ Implement online crime reporting for documentation of minor crime reports. ▪ Continue ancillary educational efforts, including the Basic Citizens Police Academies, Advanced Citizens Police Academies, and Parent Project classes. • Identify and purchase a Records Management System. • In an effort to focus on employee health, wellness and resiliency, partner with Human Resources to provide Compassion Cultivation Training at a local and regional level. ▪ Identify resources for fulfilling new Public Records Requests as a result of SB1421 and AB748. Goals and Objectives GOAL 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. 334 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE • Provide assistance, enforcement, and guidance to the community regarding animal control. . Provide emergency response to the community in the event of a disaster. . Continue development of the Public Safety Building. 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 that impact them. Objectives: ▪ Continue Office of Independent Review oversight of internal investigations. ▪ Increase quality and timeliness of response to citizens' complaints regarding use of force 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. ▪ Engage the Chief's Advisory Group on key policies and procedures. 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: • Enhance the Department's open data initiative efforts by providing additional information to the public, including implementing compliance with SB1421 and AB748. ▪ Engage the community 24/7/365 through social media and outreach programs. • Continue the regional Records Management System project. ▪ Purchase and replace mobile data computers. ▪ Implement online reporting. • Enhance technology applications in alignment with national initiatives. 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. Objectives: . Continue to teach two Basic Adult Citizens Academies annually. POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 335 POLICE • Continue to teach an Advanced Adult Citizens Academy. ▪ Contribute to the Safe Routes to School Program by contracting crossing guards at major intersections for Palo Alto Unified School District. • Continue partnership with the Palo Alto Unified School District with the deployment of two School Resource Officers. • Re -align one sergeant to support the Traffic Team in response to local traffic concerns. GOAL 5 Officer Training and Education: In line with pillar five of the Department of Justice Implementa- tion Guideline on 21st Century Policing, the Department will continue to enhance in-service offi- cer training in the areas of fair and impartial policing; de-escalation; legal updates; and community relations. The Department will exceed minimum standards with regard to continuing education standards. 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). GOAL 6 Officer Safety and Wellness: In line with pillar six of the Department of Justice Implementation Guideline on 21st Century Policing, the Department will ensure that wellness and safety efforts occur at every level of the organization. Objectives: • 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. ▪ Build the resiliency of the employee in stressful situations through mindfulness training. • Stress policies related to safety, in -line with the "Below 100" initiatives, a national initiative to reduce police officer fatalities to under 100 per year: https://www.below100.org/. • Enhance the Department's peer support program. 336 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE Key Performance Measures ANIMAL CONTROL RESPONSE TIMES Protect and serve the public through proactive and effective policing, animal control, and emergency preparedness. Goal Objective Respond promptly to animal calls for service. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of Palo Alto live animal calls responded to within 45 minutes Description Purpose Status 89% 90% 90% 90% 90% A 45 -minute response time to live animal calls is the threshold of service set by the Animal Control Division. Live animal calls require the most timely response because they are generally life threatening or represent higher danger crimes in progress. Animal Control Officers have, historically, assisted with shelter operations. As of FY 2019, the Police Department is no longer operating the animal shelter and therefore, it is expecting that response times should improve. The target will be re- evaluated following a complete year without shelter operations. PERCENT OF SURVEYED RESIDENTS RATING POLICE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Cultivate, enhance, and foster trustworthy relationships with the community. Objective Maintain and enhance the community's satisfaction with police services. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Animal Control Services Crime Prevention Services Traffic Enforcement Services Overall Police Services Description Purpose Status 80% 81% 60% 93% 75% 78% 53% 89% 80% 80% 60% 90% 77% 80% 55% 90% 80% 80% 60% 90% 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 percentage of respondents who rated the quality of overall police services as "excellent" or "good" has remained steady, however, the percentage of residents who rated Traffic Enforcement services as "excellent" or "good" had declined 7% since the last survey. Ratings for Traffic Enforcement services are reported to be statistically similar to benchmark jurisdictions according to the survey. In FY 2019, the designated traffic enforcement team was re -launched, after a 4 -year hiatus. The Police Department anticipates a higher rating for Traffic Enforcement in subsequent years. Animal Control services, while down 5% from the last survey, remains statistically similar to previous years. Animal Control is anticipated to be fully staffed in FY 2020. The Police Department looks forward to seeing the rating results of a fully staffed Animal Control unit. Crime prevention ratings are statistically similar to the previous year. POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 337 POLICE POLICE DEPARTMENT RESPONSE TIMES Goal Objective Percent of urgent calls responded to within 10 minutes Percent of emergency calls responded to within 6 minutes Description Purpose Status Respond promptly to urgent calls for service. Protect and serve the public through proactive and effective policing, animal control, and emergency preparedness. FY 2017 Actuals 74% 67% FY 2018 Actuals 72% 70% FY 2019 Adopted 90% 90% FY 2019 Estimated 72% 70% FY 2020 Adopted 90% 90% 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 percentage of instances an officer arrives to a priority 1 (emergency) and priority 2 (urgent) call within the targeted response time has remained relatively consistent, near 70%. The goal remains at 90% and the Department will continue to strive to meet that goal. In FY 2020, the Department will study what must change to reach that goal including elements such as traffic congestion. Workload Measures 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 control calls Number of regional animal control calls (Los Altos and Los Altos Hills) FY 2017 Actuals 53,901 1,672 2,579 5:39 8:33 2,359 FY 2018 Actuals 55,480 1,764 2,674 5:10 FY 2019 Adopted 54,000 1,600 2,600 6:00 8:39 8:00 2,659 2,300 415 719 425 FY 2019 Estimated 54,000 1,705 2,594 5:20 FY 2020 Adopted 54,000 1,600 2,600 6:00 8:35 8:00 2,300 2,300 575 425 338 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE 3udget Summary J Dollars by Division Administration Animal Control Field Services Investigations and Crime Prevention Services FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,372,907 1,306,311 1,191,493 1,253,980 62,487 5.2% 1,582,082 1,591,383 1,906,145 888,578 (1,017,568) (53.4)% 19,438,878 20,053,299 21,075,775 22,695,327 1,619,552 7.7% 4,494,576 4,651,584 4,780,398 5,359,118 578,720 12.1% Parking Services 1,367,611 1,517,466 1,626,536 1,751,550 125,015 7.7% Police Personnel Selection 1,311,192 1,431,168 1,351,115 1,483,792 132,677 9.8% Technical Services 8,283,058 8,414,141 9,064,759 9,729,426 664,667 7.3% Traffic Services 1,355,766 1,017,739 1,352,257 1,504,711 152,454 11.3% Total 39,206,070 39,983,091 42,348,477 44,666,482 2,318,005 5.5% Dollars by Category Salary & Benefits Healthcare 2,837,397 2,779,207 Other Benefits 645,624 1,027,281 Overtime 2,010,204 2,286,527 Pension 6,472,251 7,108,339 Retiree Medical 2,666,651 2,805,449 Salary 17,072,244 16,950,029 Workers' Compensation 1,057,455 421,542 Total Salary & Benefits 32,761,826 33,378,375 Allocated Charges 2,783,927 3,202,873 Contract Services 2,710,594 2,397,033 Facilities & Equipment 74,934 48,871 General Expense 396,720 450,935 Operating Transfers -Out - Rents & Leases 3,282 3,335 Supplies & Material 474,787 501,670 Total Dollars by Expense Category 39,206,070 39,983,091 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 42,348,477 3,231,563 (210,301) (6.1)% 752,408 (19,829) (2.6)% 1,842,231 65,730 3.7% 10,147,394 2,199,292 27.7% 2,652,514 77,258 3.0% 19,030,233 250,434 1.3% 1,157,437 316,731 37.7% 38,813,780 2,679,314 7.4% 3,511,437 27,909 0.8% 1,365,894 112,366 9.0% 34,500 -% 446,089 (34,115) (7.1)% (398,383) (100.0)% 3,560 124 3.6% 491,221 (69,210) (12.3)% 44,666,482 2,318,005 5.5% POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 339 POLICE 3udget Summary a_ 1 FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Revenues Charges for Services 1,201,130 1,211,543 1,357,313 1,379,804 22,491 Charges to Other Funds 427,000 481,000 481,000 481,000 - From Other Agencies 419,490 258,639 299,900 349,900 50,000 16.7% Other Revenue 267,310 256,417 273,016 28,899 (244,117) (89.4)% Other Taxes and Fines 1,489,330 1,890,505 1,881,255 1,881,255 -% Permits and Licenses 260,297 289,090 230,302 230,302 -% Rental Income 645 400 1,067 1,067 -% Total Revenues 4,065,202 4,387,594 4,523,853 4,352,227 (171,626) (3.8)% 1.7% -% Positions by Division Administration 3.30 5.30 5.30 5.30 -% Animal Control 10.66 10.56 10.56 4.00 (6.56) (62.12)% Field Services 61.80 73.55 73.55 73.55 - -% Investigations and Crime 21.28 16.38 16.38 16.38 - -% Prevention Services Parking Services Police Personnel Selection Technical Services Traffic Services Total Staffing 8.75 7.75 8.75 8.75 5.10 4.10 4.10 4.22 37.00 37.00 37.00 37.00 10.49 3.74 2.74 2.62 158.38 158.38 158.38 151.82 0.12 (0.12) (6.56) -% 2.93% -% (4.38)% (4.14)% Job Classification Administrative Assistant Administrative Associate II Animal Control Officer Animal Control Officer -Lead Animal Services Specialist II Assistant Police Chief Business Analyst FY 2017 Actuals 1.00 3.00 3.00 1.00 2.00 1.00 1.20 FY 2018 Actuals 1.00 3.00 3.00 1.00 2.00 1.00 1.20 FY 2019 Adopted Budget 1.00 3.00 3.00 1.00 2.00 1.00 1.20 FY 2020 Adopted Budget 1.00 3.00 3.00 1.00 1.00 1.20 FY 2020 Change FTE (2.00) FY 2020 Salary 93,018 212,958 201,592 71,897 247,250 167,371 340 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE Staffing Job Classification Code Enforcement Officer Communications Manager Communications Technician Community Service Officer Court Liaison Officer Crime Analyst Deputy Director Technical Services Division Geographic Information System Specialist FY 2017 Actuals 1.00 1.00 8.50 1.00 1.00 0.80 FY 2018 Actuals 1.00 1.00 1.00 7.50 1.00 1.00 0.80 FY 2019 Adopted Budget 1.00 1.00 1.00 7.50 1.00 1.00 0.80 FY 2020 Adopted Budget 1.00 1.00 1.00 7.50 1.00 1.00 0.80 FY 2020 Change FTE FY 2020 Salary 95,751 - 128,149 97,280 - 548,419 95,201 95,201 - 166,583 0.50 0.50 0.50 0.50 58,543 Police Agent 19.00 19.00 19.00 19.00 3,010,405 Police Captain 2.00 2.00 2.00 2.00 - 444,454 Police Chief 1.00 1.00 1.00 1.00 - 266,510 Police Lieutenant 5.00 5.00 5.00 5.00 - 1,008,758 Police Officer 50.00 50.00 50.00 50.00 7,019,574 Police Records Specialist II 6.00 6.00 6.00 6.00 424,582 Police Records Specialist -Lead 1.00 1.00 1.00 1.00 75,717 Police Sergeant 14.00 14.00 14.00 14.00 2,491,923 Program Assistant II 1.00 1.00 1.00 1.00 - 77,417 Property Evidence Technician 2.00 2.00 2.00 2.00 - 146,387 Public Safety Communications 1.00 1.00 1.00 1.00 131,352 Manager Public Safety Dispatcher 16.00 16.00 16.00 16.00 - 1,607,934 Public Safety Dispatcher -Lead 4.00 4.00 4.00 4.00 - 461,480 Public Safety Program Manager 2.00 2.00 2.00 2.00 - 256,464 Senior Management Analyst 1.00 1.00 1.00 1.00 125,050 Superintendent Animal Services 1.00 1.00 1.00 (1.00) Veterinarian 1.00 1.00 1.00 (1.00) Veterinarian Technician 2.00 2.00 2.00 - (2.00) - Sub -total: Full -Time Equivalent 155.00 155.00 155.00 149.00 (6.00) 19,827,219 Positions Temporary/Hourly 3.38 3.38 3.38 2.82 (0.56) 265,844 Total Positions 158.38 158.38 158.38 151.82 (6.56) 20,093,063 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 341 POLICE Budget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 158.38 42,348,477 4,523,853 37,824,624 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution PD Chief Relocation Package General Liability Savings (one-time FY 2019 Savings) Workers Compensation Savings (one-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability PAPOA Contract Cost Offset (CMR #9320 approved by the City Council on June 25, 2018) Overtime Adjustment (CMR #9320 approved by the City Council on June 25, 2018) (398,383) (36, 000) 73,104 — (398,383) (36,000) 73,104 335,033 — 335,033 — (26,246) — (26,246) 3,247,867 3,247,867 — 1,255,115 — 1,255,115 (414,602) (414,602) — 65,731 — 65,731 Animal Services Shelter Transition from Police Department to Community Services Department with Pets -In -Need (CMR #9822 (6.56) (1,152,488) (244,117) (908,371) approved by the City Council on November 26, 2018) PAUSD Revenue Alignment — — 50,000 (50,000) Stanford Emergency Communication Services — 22,491 (22,491) Revenue Contractual Increases 13,124 13,124 CAD Reporting System Update 45,000 45,000 Crossing Guards (CMR #8952 approved June 25, 141,056 — 141,056 2018) Information Technology Allocated Charges 10,463 10,463 Liability Insurance Allocated Charges 35,155 35,155 Printing & Mailing Services Allocated Charges 25,280 25,280 Utilities Allocated Charges — 4,000 — 4,000 Vehicle Replacement & Maintenance Allocated — (57,902) — (57,902) Charges Workers' Compensation Allocated Charges (18,302) (18,302) Adjustments to Costs of Ongoing Activities (6.56) 3,199,497 (171,626) 3,371,123 342 POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET POLICE 1 Police Staffing Adjustment Budget Reconciliation Total FY 2020 Base Budget Budget Adjustments 1 Police Staffing Adjustment Total Budget Adjustments Total FY 2020 Adopted Budget Positions 151.82 151.82 Expenditures (855,246) (855,246) 44,666,482 Revenues 4,352,227 4,352,227 Net General Fund 41,169,501 (855,246) (855,246) 40,314,255 Budget Adjustments 0.00 (855,246) .1. 3 (855,246) This action assumes vacancy savings, the equivalent to 4.0 Police Officer positions, in FY 2020 and recommends the elimination of 1.0 to 2.0 positions in FY 2021 (the specific position(s) to be identified at a later date). In total, this FY 2020 budget assumes vacancy savings equivalent to approximately 8.0 Police Officer positions, or 60% of current vacancies. The Police Department continues to face an extremely difficult recruiting market. As a profession, recruiting talent in the Bay Area has been met with significant challenges due to the cost of living and transit. Since July 2016, the Police Department has averaged 10 or more vacant officer positions resulting in increased overtime and a slimming down of dedicated teams such as the Traffic and Downtown Teams. Although the department continues to work to fill vacancies, it is anticipated that they will not be able to fill all of the vacancies during FY 2020. In the face of this difficult recruiting environment, the department is also looking at how to reimage the delivery of services should the high vacancy levels remain. As such, it is anticipated 1.0 to 2.0 full-time positions will be eliminated in FY 2021 as service delivery methods evolve, however, the specific position will be identified at a later date. (Ongoing Savings: $440,000) Performance Results 0 The Police Department has operated with significant vacancies for the past few years; no additional service impacts are anticipated as a result of this action. Due to the vacancies, the cycle time and customer satisfaction will remain impacted. POLICE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 343 CITY OF PALO ALTO PUBLIC WORKS Mission Statement To preserve and enhance the quality of life for Palo Alto residents and visitors by providing efficient, safe, and cost effective services in partnership with our citizens while maintaining City assets and being environmental stewards of the community. Purpose The purpose of the Public Works Depart- ment is to ensure the City's valuable infra- structure is well -maintained and available well into the future; promote the protec- tion and enhancement of Palo Alto's urban forest; enhance the quality of life for resi- dents and visitors 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 compostables 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 wastewater treatment, storm drainage, airport, and fleet operations. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 345 PUBLIC WORKS PUBLIC WORKS DIRECTOR Brad Eggleston 1.00 -Administrative Assistant 1 00 -Senior Management Analyst PUBLIC SERVICES 1.00 Assistant Director, Public Services 1.00 Management Analyst 1.00 Management Assistant 3.00 Administrative Associate II 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 1.00 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 Forestry* 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 2.00 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 2020 POSITION TOTALS 199.50 - Full -Time 10.12 - Hourly *These positions serve functions that support the Planning and Development Services Department ** These positions serve functions that support the Utilities Department 346 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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; and 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; manages the 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 and stormwater management information and programs to residents and businesses; manages the City's zero waste programs, household hazardous waste program, 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 • Achieved the goal of citywide average Pavement Condition Index score of 85 one year earlier than anticipated, which is within the range of very good to excellent ratings for street conditions. ▪ Continued implementation of the 2014 Council Infrastructure Plan. Completed 90% of construction of the Fire Station No. 3 Replacement project and completed construction of 2 of 3 phases of the Charleston/Arastradero Corridor project. Began construction of the New California Avenue Area Parking Garage project. Completed design and Caltrans approval process for the Highway 101 Bicycle and Pedestrian Overcrossing project and requested bids. Completed the environmental review and planning entitlement phase for the New Downtown Garage project (currently on hold per Council direction). • Completed the Baylands Boardwalk Improvements project in January 2019 and opened the boardwalk to the public. ▪ Completed the review of the Draft Environmental Impact Report for the Newell Road Bridge Replacement project. PUBLIC WORKS • " ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 347 PUBLIC WORKS ▪ Completed a sidewalk program evaluation to determine potential changes to the current sidewalk repairs program. ▪ Increased the total number of City maintained trees by planting over 200 new trees in addition to replacement trees. • Completed the construction and testing of the Sludge Dewatering and Loadout Facility allowing for the retirement of the two incinerators at the Regional Water Quality Control Plant in 2019. • Developed a fleet electrification pilot program to evaluate the performance and maintenance needs of three Plug-in Hybrid electric pick-up trucks assigned for field operation. ▪ Completed Phase I and II of the Airport Apron Reconstruction project and secured over $18 million of grant funding from FAA for the project. 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, with a FY 2020 focus on utilizing geographic information system tools to analyze canopy coverage trends and to determine tree protection needed at construction sites during permitting process. • Continue to 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. • Secure funding and complete design for a 1-2 Million Gallons per Day (MGD) microfiltration/ ultrafiltration and reverse osmosis facility. • Implement Stormwater Blue Ribbon Committee recommendations on the high priority storm drain infrastructure improvements and implement the completed green stormwater infrastructure plan. • Continue the fleet electrification pilot program to evaluate the performance, maintenance needs, and repair needs of the Plug-in Hybrid electric pick-up trucks assigned for field operation. 348 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Fund Airport Fund 3,893,603 11,884,689 12,380,506 2,447,323 (9,933,183) (80.2)% General Fund 16,671,892 18,412,469 18,586,577 19,188,318 601,742 3.2% Refuse Fund 30,767,437 28,300,353 29,744,645 38,600,779 8,856,134 29.8% Stormwater Management Fund 8,108,294 9,873,062 9,364,028 9,944,891 580,863 6.2% Vehicle Replacement & 10,450,914 10,718,000 14,091,495 14,075,104 (16,390) (0.1)% Maintenance Fund Wastewater Treatment 23,810,516 39,920,647 35,507,663 55,434,126 19,926,463 56.1% Total 93,702,655 119,109,220 119,674,912 139,690,541 20,015,629 16.7% Revenues Charges for Services 211,441 202,666 205,168 199,208 (5,960) (2.9)% Charges to Other Funds 11,532,830 13,390,921 11,407,111 11,762,186 355,076 3.1% From Other Agencies 2,393,409 13,333,527 9,499,500 (9,499,500) (100.0)% Net Sales 60,349,838 65,334,402 66,255,981 69,427,158 3,171,177 4.8% Operating Transfers -In 1,133,888 222,433 196,107 196,107 -% Other Revenue 4,488,760 5,491,951 9,568,500 30,938,300 21,369,800 223.3% Other Taxes and Fines (2,200) 900 6,500 6,500 - -% Permits and Licenses 787,993 656,944 631,894 622,096 (9,798) (1.6)% Rental Income 688,642 527,173 755,400 778,100 22,700 3.0% Return on Investments 997,160 1,113,433 687,800 1,414,100 726,300 105.6% Total Revenues 82,581,762 100,274,350 99,213,960 115,343,755 16,129,795 16.3% Positions by Fund* Airport Fund 5.88 5.46 5.46 5.94 0.48 8.79% General Fund 57.85 56.66 52.49 50.45 (2.04) (3.89)% Refuse Fund 15.65 15.65 15.65 15.93 0.28 1.79% Stormwater Management Fund 10.34 13.55 13.55 13.55 13.55 -% Vehicle Replacement and 17.26 17.26 16.53 16.01 (0.52) (3.15)% Maintenance Fund Wastewater Treatment Fund 73.47 71.26 71.26 71.26 -% Total 180.45 179.84 174.94 173.14 (1.80) (1.03)% *This table does not reflect positions in the Capital Improvement Fund nor the Cubberley Property Infrastructure Fund. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 349 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. ▪ Begin implementing repairs identified in the completed Sidewalk Program Evaluation Study. ▪ Begin developing a citywide facilities assessment plan to identify facility conditions and prioritize improvement needs. GOAL 2 Provide high quality, cost-effective oversight of the City's capital improvement and facilities maintenance programs. Objectives: ▪ Continue implementation of the 2014 City Council approved 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 to evaluate and implement the recommendations identified in the Facilities Work Group Organizational Study, which includes data collection, performance standards, benchmarking, and customer satisfaction surveys. GOAL 3 Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Objectives: ▪ Complete the planning entitlements, obtain regulatory permits, and prepare construction documents necessary to proceed with the Newell Road Bridge Replacement project. ▪ Ensure compliance with all applicable regulations related to the public's health and safety. • Increase the total number of City trees by committing to plant a total of 400 new and replacement trees annually while maintaining the health of the City's urban forest and ensuring proper tree clearance of all utility lines. 350 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 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. Percent of citizens rating the quality of sidewalk maintenance as "good" or "excellent" Description Purpose Status FY 2017 Actuals 65% FY 2018 Actuals 61% FY 2019 Adopted 67% FY 2019 Estimated 63% FY 2020 Adopted 65% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of sidewalk maintenance. 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 sidewalks are being maintained adequately in order to determine if the program's resources are appropriate. The Department had estimated that a 66% rating would be reached in FY 2018 and the actual measured rating for FY 2018 was 61 %. In consideration of the continued higher budgets for sidewalk maintenance that allowed for increased sidewalk improvements since FY 2013, the FY 2019 estimated and FY 2020 ratings reflect continued modest increases. CITIZEN SURVEY - STREET MAINTENANCE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Increase rating given by residents for quality of street maintenance. Percent of citizens rating the quality of street repair as "good" or "excellent" Description Purpose Status FY 2017 Actuals 55% FY 2018 Actuals 46% FY 2019 Adopted 58% FY 2019 Estimated 52% FY 2020 Adopted 54% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of street maintenance. 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 streets are being maintained adequately in order to determine if the program's resources are appropriate. The Department estimated a 57% rating for FY 2018; the actual measured rating for FY 2018 was 46%. However, in consideration of the continued higher budgets for street maintenance that allowed for increased paving since FY 2012, the FY 2019 estimated and FY 2020 ratings reflect continued modest increases. PUBLIC WORKS • _;ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 351 PUBLIC WORKS CITIZEN SURVEY - STREET TREE MAINTENANCE Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Increase rating given by residents for quality of street tree maintenance. Goal Objective Percent of citizens rating street tree maintenance "good" or "excellent" Description Purpose Status FY 2017 Actuals 75% FY 2018 Actuals 72% FY 2019 Adopted 75% FY 2019 Estimated 72% FY 2020 Adopted 72% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of street tree maintenance. 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 street trees are being maintained adequately in order to determine if the program's resources are appropriate. The Department has been achieving between 72% and 75% satisfaction and anticipates to maintain 72% in FY 2020. PAVEMENT CONDITION SCORE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Maintain and enhance the overall condition of the City's streets. Pavement Condition Score Description Purpose Status FY 2017 Actuals 83 FY 2018 Actuals 84 FY 2019 Adopted 85 FY 2019 Estimated 85 FY 2020 Adopted 85 This measure tracks the condition of the City's streets based on Pavement Condition Index (PCI) published by the Metropolitan Transportation Commission (MTC) as well as changes in that PCI score. The 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 = failed. Improving the condition of the City's streets reduces overall maintenance costs and increases ride satisfaction. The City Council set a goal of raising the citywide average PCI score to 85 by FY 2019 and the Department has achieved this goal. Annual reports by the MTC indicate that Palo Alto now has one of the highest citywide average PCI scores in Santa Clara and San Mateo Counties. 352 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS RESPONSE TO POTHOLE NOTIFICATION Ensure the City's assets and infrastructure inventory are updated and well maintained. Goal Objective Maintain a standard timeframe for pothole repairs. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of potholes repaired within 15 days of notification Description Purpose Status Workload V 85% 80% 80% 80% 80% This measure records the number of potholes that are repaired within 15 days of the Department being notified of the problem. The Department has a goal of repairing potholes within 15 days to ensure streets are maintained and repaired in a timely manner. The Department has been making repairs within 15 days 80% of the time. FY 2020 percentages will remain at 80% due to a previous 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. ensures FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Square feet of sidewalk replaced or permanently repaired Number of lane miles resurfaced 39 17,275 38,557 31 20,000 41 89,700 9 64,250 28 Percent of lane miles resurfaced 8.30% 6.50% 8.80% 2.00% 6.00% Total square footage of facilities 1,660,832 1,659,028 1,815,298 maintained Cost per square foot for custodial services $1.06 $2.11 $2.15 1,815,298 1,815,298 $1.84 $1.88 Cost per square footage for maintenance services $2.11 $2.21 $2.25 $2.29 $2.29 Number of facilities work order 7,533 7,291 7,000 7,400 7,400 requests completed Number of trees trimmed annually 11,194 8,762 7,000 5,883 5,220 Total of trees maintained by the City 36,863 36,378 38,000 36,545 36,545 Number of tree related electrical service disruptions Number of publicly available electric vehicle chargers in garages and city facilities 10 8 10 8 8 35 53 N/A 53 79 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 353 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 FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 1,300,643 1,543,614 1,526,070 1,653,749 127,679 8.4% 1,058,913 1,257,574 1,408,076 1,095,381 (312,694) (22.2)% 3,651,602 3,763,354 3,679,770 3,878,053 198,283 5.4% 6,427,443 7,655,871 7,610,835 8,029,740 418,905 5.5% General Fund Public Services: Trees 4,233,292 4,192,056 4,361,827 4,531,396 169,570 3.9% Total 16,671,892 18,412,469 18,586,577 19,188,318 601,742 3.2% Dollars by Category Salary & Benefits Healthcare 1,141,450 1,116,308 1,145,678 1,137,805 (7,873) (0.7)% Other Benefits 123,151 151,664 148,624 146,112 (2,512) (1.7)% Overtime 259,626 239,717 163,631 167,886 4,254 2.6% Pension 1,432,169 1,491,805 1,481,087 1,804,560 323,473 21.8% Retiree Medical 902,347 949,314 825,829 850,603 24,775 3.0% Salary 5,053,753 5,094,927 5,059,572 4,920,549 (139,023) (2.7)% Workers' Compensation 37,720 127,270 133,352 199,115 65,763 49.3% Total Salary & Benefits 8,950,217 9,171,005 8,957,773 9,226,630 268,857 3.0% Allocated Charges 3,039,392 3,425,459 3,489,133 3,840,817 351,684 10.1% Contract Services 3,341,172 4,688,287 4,827,205 4,879,358 52,153 1.1% Facilities&Equipment 5,148 2,000 2,146 2,146 -% General Expense 60,381 67,588 125,449 125,009 (440) (0.4)% Operating Transfers -Out 16,574 16,574 94,518 16,574 (77,944) (82.5)% Rents & Leases 189,242 210,191 220,543 227,974 7,431 3.4% Supplies & Material 1,069,766 831,365 869,811 869,811 - -% Total Dollars by Expense Category 16, 671, 892 18, 412, 469 18, 586, 577 19,188, 318 601,742 3.2% Revenues Charges for Services 43,096 77,881 53,280 47,320 (5,960) (11.2)% Charges to Other Funds 3,046,528 3,796,696 2,127,989 2,355,516 227,527 10.7% Operating Transfers -In 196,107 196,107 196,107 196,107 - -% 354 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary Other Revenue Permits and Licenses Total Revenues FY 2017 Actuals 47,179 787,993 4,120,903 FY 2018 Actuals 46,345 656,944 4,773,973 FY 2019 Adopted Budget 54,500 631,894 3,063,770 FY 2020 Adopted Budget 54,500 622,096 3,275,539 FY 2020 Change $ FY 2020 Change % -% (9,798) (1.6)% 211,769 6.9% Positions by Division General Fund Administration 3.05 3.05 3.05 3.05 General Fund Engineering Services 4.56 5.29 4.92 3.38 (1.54) General Fund Public Services: Streets General Fund Public Services: Structures and Grounds General Fund Public Services: Trees 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 18.02 18.22 15.74 18.81 17.31 13.41 12.79 15.83 15.74 15.33 12.95 12.95 (0.50) (3.16)% -% 57.85 56.66 52.49 50.45 (2.04) (3.89)% FY 2017 Actuals 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.80 3.00 0.26 0.50 1.00 0.80 0.66 1.47 3.46 FY 2018 Actuals 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 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.00 2.00 2.00 0.26 0.26 1.50 1.50 1.00 1.00 0.80 0.80 0.66 0.36 1.47 2.46 2.46 FY 2020 Adopted Budget FY 2020 Change FTE 1.00 0.10 2.65 0.01 0.73 1.47 (0.50) (0.14) (0.30) (0.30) FY 2020 Salary 89,128 6,532 188,113 761 132,186 62,569 172,145 23,944 117,173 215,010 80,229 42,959 131,167 194,912 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 355 PUBLIC WORKS Staffing Job Classification Facilities Carpenter Facilities Maintenance -Lead 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 I Traffic Controller Maintainer II Tree Maintenance Person Tree Trim/Line Clear Tree Trim/Line Clear -Lead Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2017 Actuals 1.00 1.85 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 1.94 2.00 1.00 7.00 1.00 FY 2018 Actuals 1.00 1.85 1.75 4.05 2.33 0.85 0.11 0.10 0.70 0.90 1.20 0.96 0.05 0.71 0.50 2.65 0.79 1.11 0.10 FY 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 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 0.33 1.94 2.00 1.00 7.00 1.00 FY 2020 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 2.65 0.59 1.11 FY 2020 Change FTE (0.50) (0.20) (0.10) FY 2020 Salary 86,072 205,769 150,627 384,485 209,047 81,581 10,592 71,203 82,474 137,199 164,550 143,210 7,708 293,456 98,593 141,057 0.10 - 13,056 0.33 1.94 2.00 1.00 7.00 1.00 32,155 150,909 144,030 79,815 550,004 84,051 55.93 54.66 51.45 49.41 (2.04) 4,778,470 1.92 2.00 1.04 1.04 58,993 57.85 56.66 52.49 50.45 (2.04) 4,837,463 356 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation I Positions Expenditures Revenues Net General Fund Prior Year Budget 52.49 18,586,577 3,063,770 15,522,807 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution Private Development Workgroup Pilot Study General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) (77,944) (30,000) 45,762 53,143 (77,944) (30,000) 45,762 53,143 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities - (9,039) - (9,039) Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability Charges to Other Funds for Engineering Services Public Restroom/Facility Rent Special Services Municipal Fee Revenue Adjustment San Francisquito Creek Joint Powers Authority (SFJPA) Annual Membership Fee Custodial Contract (Year 3 & Contingency) Coaxial Communication Line Maintenance Allocated Charges (CMR #9946, approved by Council on February 4, 2019) General Fund Cost Allocation Plan Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges 354,904 222,419 7,431 1,036 354,904 222,419 (1,036) 7,431 (15,758) 15,758 33,000 33,000 49,153 - (141,600) 1 (17,614) 86,813 13,626 3,081 181,596 180,020 49,153 (141,600) 192,896 (192,896) (17,614) 86,813 13,626 33,596 (33,596) 3,081 181,596 180,020 Adjustments to Costs of Ongoing Activities - 972,829 211,769 761,060 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 357 PUBLIC WORKS -2.04 3udget Reconciliation Total FY 2020 Base Budget Positions 52.49 Expenditures 19,550,367 Revenues 3,275,539 Net General Fund 16,274,828 Budget Adjustments 1 Capital Engineering Staffing Realignment (2.04) (362,049) (362,049) Total Budget Adjustments (2.04) (362,049) (362,049) Total FY 2020 Adopted Budget 50.45 19,188,318 3,275,539 15,912,779 3udget Adjustments Net E_. • e:,;Slitures Revenues. General. Fund 1 Capital Engineering Staffing Realignment (362,049) i 0 (362,049) This ongoing action realigns staffing in the Public Works Department to where the work is currently being performed. Various positions, including an Associate Engineer, Engineer, Senior Engineer, Project Engineer, and Senior Project Engineer each had portions of their position budgeted in the General Fund even though they currently work exclusively on capital projects. This action shifts 2.04 FTE from the General Fund to the Capital Improvement Fund. This action will also eliminate one 0.50 FTE Administrative Associate and 1.0 FTE Associate Engineer. That elimination will shift work to other positions. (Ongoing savings: $394,000) Performance Results 0 This action will impact administrative response time for public inquiries and the level of Capital Improvement Fund engineering staff capacity. 358 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 150,000 annual operations; open 24 hours each day, 365 days annually; and has a Federal Aviation Administration -staffed air traffic control tower. Accomplishments ▪ Completed Phase I & II of the Apron Reconstruction project with a total project cost of $24.9 million while utilizing Federal Aviation Administration (FAA) grant reimbursement of approximately $22.4 million. ▪ Completed paving for 65% of the airport apron under the Apron Reconstruction project. Prior to paving, the pavement was in poor condition with a Pavement Condition Index (PCI) score of 36. The score is anticipated to improve when the next PCI evaluation is conducted after Phase I I I of the project is completed. Initiatives ▪ Complete an Airport Facilities Assessment which evaluates facility repairs and safety needs. ▪ Develop an Airport Business Plan 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 FAA and other agencies for capital improvements. Goals and Objectives GOAL 1 Operate a safe and viable airport. Objectives: • Maintain compliance with federal and state requirements for airfield conditions. . Continue to follow industry standards and trends in staff training and education. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 359 PUBLIC WORKS • Maintain sufficient staff to provide coverage during the FAA air traffic control tower operating hours of 7:00 am to 9:00 pm. GOAL 2 Provide high quality, cost-effective oversight of the airport's capital improvement program (CIP). Objectives: • Continue management of FAA -sponsored CIP 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 CIP work plan to the FAA annually. GOAL 3 Manage a financially sustainable and self-sufficient airport enterprise fund. Objectives: • Adopt and implement an Airport Business Plan to guide future development and ensure fund stability. ▪ Control expenses and generate sufficient revenues to accommodate the needs of the Palo Alto Airport, including loan repayment to the General Fund. Key Performance Measures AIRCRAFT OPERATIONS Goal Operate a safe and viable airport. Objective Provide a safe, aesthetically pleasing, and profitable airport. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of aircraft operations Description Purpose Status 149,000 149,000 160,000 150,000 160,000 The Palo Alto Airport (PAO) is owned and operated by the City of Palo Alto and is a general aviation field. The Federal Aviation Administration defines workload measures for airports with an air traffic control tower by 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's significant air traffic must be accommodated by the one paved runway which measures 2,443 x 70 feet. Providing a safe, well maintained and attractive airport will appeal to the tenants, pilots, visitors, outside agencies, residents, and the flying community at large. Total operations were 149,000 in FY 2017 and in FY 2018, and estimated to be 150,000 in FY 2019 and increase to 160,000 in FY 2020. Operations are affected by construction, weather, and training schools in the area. 360 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS PERCENTAGE OF TIE -DOWNS LEASED Goal Objective Percentage of Tie -downs Leased Description Purpose Status Manage a financially sustainable and self-sufficient airport enterprise fund. Increase tenant occupancy by providing a safe and well maintained airport that is also cost recoverable. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated 70% 72% 70% 65% FY 2020 Adopted 75% 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. Maximizing tie -down space occupancy increases revenue and provides 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 appeals 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 2018 the percentage of leased rentable tie -downs was 72%. In FY 2019 it decreased to 65% due to the Airport Apron Reconstruction project, causing some airport tenants to temporarily move to other airports during construction. The percentage of leased rentable tie -downs is anticipated to increase to 75% in FY 2020 after project Phase II completion. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 361 PUBLIC WORKS 3udget Summary 1 Dollars by Division Airport Administration Airport Operations CIP Airport Fund Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 692,581 893,430 923,171 1,058,650 135,479 14.7% 552,847 620,616 688,960 1,042,477 353,516 51.3% 2,648,175 10,370,643 10,768,374 346,196 (10,422,178) (96.8)% 3,893,603 11,884,689 12,380,506 2,447,323 (9,933,183) (80.2)% Dollars by Category Salary & Benefits Healthcare 97,561 101,705 112,975 131,582 18,606 16.5% Other Benefits 14,956 18,545 20,358 21,521 1,163 5.7% Overtime 33,105 11,972 - - - -% Pension 100,457 136,462 148,243 217,892 69,650 47.0% Retiree Medical 11,221 11,804 43,990 45,310 1,320 3.0% Salary 507,794 531,225 579,432 632,325 52,893 9.1% Workers' Compensation 580 14,961 20,763 5,802 38.8% Total Salary & Benefits 765,673 811,714 919,959 1,069,393 149,434 16.2% Allocated Charges 340,236 647,135 526,486 669,891 143,405 27.2% Contract Services 174,962 100,229 259,124 140,700 (118,424) (45.7)% General Expense 76,199 89,588 40,480 36,480 (4,000) (9.9)% Operating Transfers -Out 11,231 5,611 281,200 275,589 4,911.7% Rents & Leases 6,106 10,322 11,630 11,630 -% Supplies & Material 47,358 29,947 56,472 56,472 -% Capital Improvement Program 2,483,071 10,184,522 10,560,743 181,556 (10,379,187) (98.3)% Total Dollars by Expense Category 3,893,603 11,884,689 12,380,506 2,447,323 (9,933,183) (80.2)% Revenues From Other Agencies 2,371,729 9,333,527 9,499,500 - (9,499,500) (100.0)% Net Sales 566,297 641,868 647,767 654,767 7,000 1.1% Other Revenue 244,186 1,145,804 975,000 1,008,800 33,800 3.5% Rental Income 539,829 593,303 755,400 778,100 22,700 3.0% 362 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary IMAM FY 2017 FY 2018 Actuals Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 Budget Change $ FY 2020 Change % Return on Investments Total Revenues 5,895 20,629 1,700 21,400 19,700 1,158.8% 3,727,937 11,735,131 11,879,367 2,463,067 (9,416,300) (79.3)% Positions by Division Airport Administration Airport Operations CIP Airport Fund 2.00 2.00 2.00 2.48 0.48 24.00% 2.42 2.21 2.21 2.71 0.50 22.62% 1.46 1.25 1.25 0.75 (0.50) (40.00)% Total Staffing 5.88 5.46 5.46 5.94 0.48 8.79% Facilities Technician Management Analyst Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Salary 1.00 Manager Airport 1.00 Manager Maintenance Operations 1.00 Sub -total: Full -Time Equivalent 3.00 4.50 4.50 4.50 - 527,950 Positions Temporary/Hourly 2.88 0.96 0.96 1.44 0.48 87,050 Total Positions 1.50 1.00 1.00 1.00 1.50 1.00 1.00 1.00 1.50 1.00 1.00 1.00 142,402 93,725 168,126 123,698 5.88 5.46 5.46 5.94 0.48 615,001 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 363 PUBLIC WORKS 3udget Reconciliation Positions Expenditures Revenues Net Airport Fund Prior Year Budget 5.46 12,380,506 11,879,367 501,139 One -Time Prior Year Budget Adjustments Airport Business Plan and Facility Assessment Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) - (122,424) (7,471) 5,134 5,962 (122,424) (7,471) 5,134 5,962 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — (118,798) — (118,798) Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Airport Tie -Down and Rental Income Return on Investments Transfer to Technology Fund (TE-19001 Council Chambers Project) Capital Improvement Projects and FAA Grant Funding General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges 66,921 23,960 23,500 66,921 23,960 23,500 63,500 (63,500) 19,700 (19,700) 9,200 9,200 — (10,378,183) (9,499,500) (878,683) 46,210 (513) (5,449) 1,259 3,360 81,740 12,520 46,210 (513) (5,449) 1,259 3,360 81,740 12,520 Adjustments to Costs of Ongoing Activities — (10,115,476) (9,416,300) (699,176) Total FY 2020 Base Budget 5.46 2,146,23 2,463,067 (316,835) 364 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 1 Airport Administrative Staffing Augmentation 3udget Reconciliation Budget Adjustments 1 Airport Administrative Staffing Augmentation 2 General Fund Loan Repayment Total Budget Adjustments Total FY 2020 Adopted Budget Positions 0.48 0.48 5.94 Expenditures Revenues 29,091 272,000 301,091 2,463,067 Net Airport Fund 29,091 272,000 301,091 3uc get Ac justments Positions Expenditures Revenues Net Airport Fund This ongoing action will add a part-time 0.48 FTE Administrative Specialist I position to enhance administrative support and provide assistance to Airport managers and the community. The airport has successfully increased business operations so current staffing levels are insufficient to provide the consistent coverage of customer support functions including front desk service counter, revenue collections, and various administrative duties. This action will improve service delivery by providing additional coverage that is anticipated to improve customer service time at the on -call counter. This will allow other airport staff such as the Facilities Technician and General Laborer to focus on daily duties on the airport apron and taxiway and provide more flexibility when staff is short-handed. (Ongoing costs: $31,000) Performance Results 0 The addition of a part-time Administrative Specialist will improve customer service functions by covering the email, phone, and front desk counter regularly. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 365 PUBLIC WORKS 3udget Adjustments Net evenues Air •.ort. Fund 2 General Fund Loan Repayment 272,000 0 272,000 This ongoing action will begin the loan repayment to the General Fund for loans received to support Airport operations when responsibility of the Airport transitioned from the County to the City. When the City officially assumed operations in FY 2015, two years before the lease with the County was set to expire, it was determined the Airport Fund required a loan because the Airport did not have the ability to increase revenues to cover operating and non -grant funded capital expenses at that time. Now that Airport operations have fully transitioned and business operations have matured, the Airport Fund is able to collect revenues to build up reserve levels and begin to pay back the General Fund for loans issued in prior years. (Ongoing costs: $272,000) Performance Results The loan repayment will have little to no impact in service delivery as Airport operations mature and the Airport Fund can begin to sustain itself. 366 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET REFUSE FUND PUBLIC WORKS 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, protect the environment by safely collecting and disposing of household hazardous waste, and maintain and monitor the City's closed landfill. Accomplishments • Prepared an updated Zero Waste Plan containing new initiatives to help meet the City's sustainability and climate action plan goals. The Zero Waste Plan was accepted by Council in August 2018. • Amended and extended the agreement with the City's waste collector, GreenWaste of Palo Alto, Inc., to add new services including an expanded 'Clean Up Day' program focusing on reusable materials, an increased effort to clean up commercial recyclables to meet stricter market standards, new construction related waste collection services and the purchase of additional vehicles including electric vehicles. The agreement is now extended through June 2026. ▪ Developed a new ordinance and policy to require deconstruction of buildings, increase salvage and reuse of materials, and mandate source separation of materials for increased recyclability and recovery. • Created a clean recyclables campaign and began implementation with the goal for Palo Alto's recyclables to meet new market demands for cleaner material. This included increasing outreach to the community, conducting additional commercial enforcement, and requiring more segregation and sorting of commercial recyclables. ▪ Developed a new foodware ordinance with a goal to reduce litter in the environment by prohibiting the use of disposable plastic foodware items, requiring compostable alternatives, and requiring food service establishments to provide disposable foodware items only upon request. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 367 PUBLIC WORKS Initiatives • Implement a new enhanced curbside 'Clean Up Day' service with a focus on collection of reusable items and recyclable materials. Create and execute an outreach and educational plan to ensure successful communication and transition for the community. • Develop and begin outreach and educational strategies in preparation for the implementation of requirements on the new deconstruction and construction materials management ordinance. ▪ Conduct Request for Proposal process for garbage processing and disposal services in preparation for when the current agreement with the Sunnyvale Materials Recovery and Transfer Station (SMaRT Station) ends in 2021. • Implement the new foodware ordinance requirements with the goal to prohibit the use of disposable plastics such as plastic straws and utensils. ▪ Continue to provide outreach and training and perform audits and enforcement of commercial customers' waste sorting policies to improve compliance with the City's waste sorting requirements. Goals and Objectives GOAL 1 Minimize waste generation and maximize recycling and reuse programs to achieve zero waste to landfills by 2030. Objectives: • Promote waste prevention, reuse, recycling, and composting 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 recycling and composting ordinance. • Develop and recommend new innovative policies and programs to minimize and divert 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 in 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 postclosure maintenance on Byxbee Park users. 368 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS Objectives: ▪ Perform annual repairs of settled landfill areas to minimize the impacts of periodic larger repairs to park users. • Develop and maintain a comprehensive preventative maintenance program for the landfill environmental control systems. /Key Performance V ensures 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 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. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of households participating in the Household Hazardous Waste program Description Purpose Status 5,594 5,814 5,700 5,700 5,800 The number of households serviced at the 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 the 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 continues to have one of the highest public participation rates in the state at 19.9% in FY 2018. By comparison, the County of Santa Clara Household Hazardous Waste Program had a participation rate of 5.4% in FY 2018. The State did not generate data for FY 2018, but historically the participation rate has been between 4-5% statewide. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 369 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 2030. 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 2017 Actuals 40% FY 2018 Actuals 42% FY 2019 Adopted 44% FY 2019 Estimated 43% FY 2020 Adopted 45% 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. Verify if residents are reducing their garbage generation to achieve zero waste to landfills by 2030. 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 to achieve zero waste to landfills by 2030. Promote recycling, composting, and reuse through educational programs and outreach to increase public participation. Objective Percentage of waste diverted from landfills Description Purpose Status FY 2017 Actuals 81.5% FY 2018 Actuals 80.0% FY 2019 Adopted 83.0% FY 2019 Estimated 80.0% FY 2020 Adopted 82.0% 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 verify the City is meeting its zero waste goals. The City's waste diversion percentage decreased to 80%. This is due to increased residential and day time population, increased restrictions of the recycling markets overseas towards contaminated recyclables, and a large amount of construction waste being generated from development projects. 370 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 2030. Reduce landfilled waste by implementing new programs such as the recycling and composting ordinance approved by Council in January 2016. Goal Objective FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percentage of commercial accounts with compost service Description Purpose Status Workload V 52% 97% 100% 100% 100% 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. As required by ordinance, 97% commercial accounts had compost service in FY 2018, 100% participation is anticipated for FY 2019. As commercial customers improve their waste sorting capabilities, an increase in waste diverted from landfill disposal should be evident. ensures FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Tons of materials recycled or composted 60,582 57,744 60,000 58,000 60,000 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 371 PUBLIC WORKS 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division CIP Refuse Fund 217,426 - -% Refuse Administration 4,189,042 3,771,780 3,580,855 3,652,067 71,211 2.0% Refuse Collection, Hauling and 5,143,988 4,501,196 21,193,443 29,749,071 8,555,628 40.4% Disposal: Operations Refuse Collection, Hauling and Disposal: Payment to 16,503,152 15,264,971 - - -% GreenWaste Refuse Solid Waste: Operations 3,578,001 3,476,378 3,519,258 3,710,915 191,657 5.4% Refuse Street Sweeping 1,135,828 1,286,027 1,451,088 1,488,727 37,639 2.6% Total 30,767,437 28,300,353 29,744,645 38,600,779 8,856,134 29.8% Dollars by Category Salary & Benefits Healthcare 244,378 226,357 280,929 293,415 12,486 4.4% Other Benefits 39,782 44,742 51,215 53,426 2,211 4.3% Overtime 21,466 41,215 42,875 43,990 1,115 2.6% Pension 401,494 409,227 445,904 650,896 204,991 46.0% Retiree Medical 361,874 380,709 219,089 225,662 6,573 3.0% Salary 1,628,137 1,551,087 1,627,458 1,699,773 72,316 4.4% Workers' Compensation 328,122 29,936 41,152 60,728 19,576 47.6% Total Salary & Benefits 3,025,253 2,683,274 2,708,622 3,027,889 319,267 11.8% Allocated Charges 1,816,408 1,841,980 1,840,811 1,863,189 22,379 1.2% Contract Services 6,108,321 6,103,675 6,205,681 6,355,681 150,000 2.4% Debt Service 564,840 155,637 196,299 195,864 (435) (0.2)% Facilities & Equipment - - 3,000 3,000 - -% General Expense 54,575 29,660 112,275 112,275 -% Operating Transfers -Out 28,718 62,283 42,586 55,100 12,514 29.4% Rents & Leases 2,516,090 2,277,759 2,212,657 2,161,066 (51,590) (2.3)% Supplies & Material 72,309 86,334 142,805 142,805 - -% Transfer to Infrastructure 27,000 73,000 46,000 170.4% Collection & Hauling Contract 16,463,048 15,059,752 16,252,909 24,610,909 8,358,000 51.4% 372 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2017 Actuals 117,874 FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % - % 30,767,437 28,300,353 29,744,645 38,600,779 8,856,134 29.8% Revenues Charges for Services 96,858 70,804 34,000 34,000 Charges to Other Funds 210,574 251,309 212,502 160,552 (51,950) (24.4)% Net Sales 30,247,663 31,202,240 30,109,500 30,662,000 552,500 1.8% Operating Transfers -In 13,325 - - - - -% Other Revenue 3,219,715 3,186,411 2,546,000 2,311,000 (235,000) (9.2)% Other Taxes and Fines (2,200) (1,300) - - - -% Rental Income 148,813 (66,129) -% Return on Investments 309,611 428,095 178,900 517,800 338,900 189.4% Total Revenues 34,244,359 35,071,430 33,080,902 33,685,352 604,450 1.8% - % Positions by Division CIP Refuse Fund 0.65 - - - - -% Refuse Administration 0.43 0.43 0.43 0.43 -% Refuse Collection, Hauling and 1.00 1.00 1.00 1.00 -% Disposal: Operations Refuse Solid Waste: Operations 10.89 11.54 11.54 11.82 0.28 2.43% Refuse Street Sweeping 2.68 2.68 2.68 2.68 - -% Total 15.65 15.65 15.65 15.93 0.28 1.79% Staffing Job Classification Account Specialist Accountant Assistant Director Public Works Deputy Chief/Fire Marshal Environmental Specialist Facilities Maintenance Lead FY 2017 Actuals 0.10 0.10 0.35 0.03 2.00 1.00 FY 2018 Actuals 0.10 0.10 0.35 0.03 2.00 1.00 FY 2019 Adopted Budget 0.10 0.10 0.35 0.03 2.00 1.00 FY 2020 Adopted Budget 0.10 0.10 0.35 0.03 2.00 1.00 FY 2020 Change FTE FY 2020 Salary 6,621 10,082 69,175 6,017 209,915 97,320 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 373 PUBLIC WORKS Staffing Job Classification Hazardous Materials Inspector Landfill Technician Management Analyst FY 2017 Actuals 0.02 1.00 0.43 FY 2018 Actuals 0.02 1.00 0.43 FY 2019 Adopted Budget 0.02 1.00 0.43 FY 2020 Adopted Budget 0.02 1.00 0.43 Manager Environmental Control 3.00 3.00 3.00 3.00 Program Manager Maintenance Operations 0.46 0.46 0.46 0.46 59,897 Manager Solid Waste 1.00 1.00 1.00 1.00 - 160,576 Program Assistant I 1.00 1.00 1.00 1.00 - 72,020 Project Manager 0.20 0.20 0.20 0.20 - 23,358 Senior Accountant 0.10 0.10 0.10 0.10 12,721 Senior Management Analyst 0.08 0.08 0.08 0.08 8,160 Street Maintenance Assistant 1.00 1.00 1.00 1.00 66,453 Street Sweeper Operator 1.63 1.63 1.63 1.63 - 128,913 Zero Waste Coordinator 1.00 1.00 1.00 1.00 - 92,065 FY 2020 Change FTE FY 2020 Salary 3,290 97,320 48,368 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 397,800 14.50 14.50 14.50 14.50 - 1,570,070 1.15 1.15 1.15 1.43 0.28 72,008 15.65 15.65 15.65 15.93 0.28 1,642,078 374 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation I Positions Expenditures Revenues Net Refuse Fund Prior Year Budget 15.65 29,744,644 33,080,902 (3,336,258) One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (One-time FY 2019 Savings) Workers' Compensation Savings (One-time FY 2019 Savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Return on Investments Residential and Commercial Refuse Hauling and Processing Services Postclosure Landfill Rent Transfers to Infrastructure Fund (City facilities CIP) Transfers to Technology Fund (Citywide Technology CIP) Debt Service: City of Sunnyvale Solid Waste Revenue Refunding Bonds Street Sweeping Services Landfill Gas Sales to Wastewater Treatment Plant General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (22,483) 14,122 16,400 8,039 146,867 71,579 70,100 130,000 (51,590) 46,000 34,997 338,900 317,500 (22,483) 14,122 16,400 8,039 146,867 71,579 70,100 (338,900) (187,500) (51,590) 46,000 34,997 (435) (435) 20,000 53,329 (6,190) (41,297) 8,816 6,719 (470) 657 (13,308) (16,329) 459,445 (51,950) 20,000 51,950 53,329 (6,190) (41,297) 8,816 6,719 (470) 657 (13,308) (16,329) 604,450 (145,005) PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 375 PUBLIC WORKS 3udget Reconciliation Total FY 2020 Base Budget Positions Expenditures Revenues 15.65 30,212,128 33,685,352 Net Refuse Fund (3,473,224) Budget Adjustments 1 Zero Waste Staffing 2 Construction and Deconstruction Materials Management Program 3 New Zero Waste Programs 4 Refuse Hauling Fleet Replacement Total Budget Adjustments 0.28 0.28 30,650 567,000 691,000 7,100,000 8,388,650 30,650 567,000 691,000 - 7,100,000 — 8,388,650 Total FY 2020 Adopted Budget 15.93 38,600,778 33,685,352 4,915,426 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Refuse Fund 1 Zero Waste Staffing This action increases a part-time Management Specialist position by 0.28 FTE, from 0.20 FTE to 0.48 FTE. The Management Specialist is responsible for conducting field inspections and customer compliance outreach for the Zero Waste group. The increased staffing will provide the capacity needed to conduct additional field inspections and waste audits and interact with customers that are non -compliant and require follow-up information. This will align staffing with the enforcement needs for the current recycling, compost, and foodware/plastic reduction programs, as well as the added outreach and enforcement needs for the new Construction and Deconstruction Materials Management program. (Ongoing costs: $31,700) Performance Results © 0 0 This action will give the Zero Waste group the capacity needed to most effectively implement new programs to achieve the City's Zero Waste goals outlined in the Zero Waste Plan. 376 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Adjustments Positions Net Expenditures Revenues Refuse Fund 2 Construction and Deconstruction Materials Management Program 0.00 567,000 0 567,000 This action increases the expense budget for the Collections and Hauling contract managed by GreenWaste by $567,000 on an ongoing basis to fund a new Construction and Deconstruction Materials Management program. This program is in response to a new initiative outlined in the City's recently adopted Zero Waste Plan. The plan identified construction -related waste as being a major contributor to landfill disposal with over 40% of material being landfilled coming from Palo Alto's construction sites. The program, in addition to the newly added Deconstruction Ordinance, will require structures be deconstructed instead of demolished and materials be source -separated for salvage as well as higher recovery of recycled materials. (Ongoing costs: $567,000) Performance Results O 0 0 This action aligns funding with the City's Zero Waste goals outlined in the Zero Waste Plan. 3 New Zero Waste Programs 691,000 This action increases the expense budget for the Collections and Hauling Contract managed by GreenWaste to fund new programs identified in the City's recently adopted Zero Waste Plan. New programming includes increased recyclables clean-up efforts, 'Clean Up Day' program enhancements, and expanded education and outreach efforts to advance in achieving the City's sustainability goals and to being a zero waste city/community. (Ongoing costs: $691,000) Performance Results © 0 © 0 This will align funding with the City's Zero Waste goals outlined in the adopted Zero Waste Plan. 4 Refuse Hauling Fleet Replacement 7,100, 000 7,100, 000 This action adds $7,100,000 in funding for contract expenses for the purchase of 20 vehicles to replace aging vehicles and trucks in the collection and hauling fleet managed, maintained, and operated by the City's contractor, GreenWaste. This purchase will be made using excess funds accumulated in the Refuse Fund Rate Stabilization Reserve to ensure future rates and service levels are maintained at a consistent and appropriate level. (Ongoing costs: $0) Performance Results O 0 This action will enhance the City's collection and hauling fleet with up-to-date vehicles that emit less greenhouse gases in alignment with the City's Zero Waste goals. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 377 PUBLIC WORKS STORMWATER MANAGEMENT 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 inspection, clean-up, operation, maintenance, replacement of and improvement to the storm drainage system to ensure adequate local drainage consistent with the 2015 Stormwater Master Plan and the 2019 Green Stormwater Infrastructure Plan. The Fund also 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 ▪ Initiated design of the Loma Verde Avenue Trunk Line Improvements project, the first of the 13 high -priority projects included in the 2017 Storm Water Management Fee ballot measure. ▪ Completed the Bay -to -Highway 101 flood control project, a cooperative effort with the San Francisquito Creek Joint Powers Authority (SFCJPA). The completion of this project allows for improvements to be made upstream of Highway 101. ▪ Completed the Green Stormwater Infrastructure (GSI) Plan which describes the gradual incorporation of GSI features in the City to treat pollutants and reduce stormwater flow. ▪ Developed a demolition ordinance ensuring products containing polychlorinated biphenyl (PCBs) are disposed of properly during demolition. Initiatives ▪ Continue implementing the 13 high -priority stormwater management projects outlined in the Storm Water Management Fee ballot measure passed in April 2017. 378 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS ▪ Continue to assist the SFCJPA with public outreach, environmental documents, and plan review for the San Francisquito Creek: Upstream to Highway 101 project. • Continue planning efforts for the Newell Road Bridge Replacement project, which will improve multi -modal access and increase creek channel capacity to contain future 50 -year storm event flows. • Implement the GSI Plan recommendations. • 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 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 Storm Water 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 2015 Municipal Regional Stormwater Discharge Permit. ▪ Conduct regular inspections of commercial facilities, industrial facilities, and construction sites to ensure compliance with stormwater discharge regulations. • Develop ordinance requirements that improve water quality during construction as required in the Municipal Regional Stormwater Discharge Permit. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 379 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 FY 2017 Actuals 81% FY 2018 Actuals 71% FY 2019 Adopted 80% FY 2019 Estimated 80% FY 2020 Adopted 80% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of storm drain management. The NCS is an annual survey of Description 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. Purpose 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 71% and 81 % Status satisfaction since FY 2016. The City is estimating to acheive and maintain an 80% rating. 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. Percent of inspections in compliance with stormwater regulations Description Purpose Status FY 2017 Actuals 85% FY 2018 Actuals 92% FY 2019 Adopted 80% FY 2019 Estimated 85% FY 2020 Adopted 85% Watershed Protection staff conducts a comprehensive program of public outreach and education, site inspections, and enforcement actions to prevent pollutants from contaminating stormwater runoff. Inspections are conducted at industrial facilities, commercial facilities, construction sites, and other outdoor activities. 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 inspections at commercial and industrial facilities, construction projects, stormwater treatment measures, and reported illicit discharges to ensure compliance in the City's stormwater regulations. Staff anticipates attaining a compliance rate of 85% in FY 2020 based on the inspections conducted and associated compliance to date. 380 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS Status Workload NUMBER OF CAPITAL PROJECTS ON THE STORM DRAINAGE FEE BALLOT MEASURE COMPLETED Goal Objective Effectively manage the storm drainage system to ensure adequate local drainage. Manage a capital improvement program that utilizes annual revenues and staff resources in an efficient manner to complete capital improvement projects resulting from Storm Ballot Measures. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of 2005 Ballot Measure capital projects completed - as of June 30 Number of 2017 Ballot Measure capital projects completed - as of June 30 6 0 6 7 7 7 0 0 0 0 Public Works Engineering Services staff manages a capital improvement program Description to increase the capacity and maintain the condition of the storm system infrastructure in accordance with Storm Ballot Measures. Purpose 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 FY 2019, 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. Design for the first project in the 2017 Storm Water Management Fee Measure began in early FY 2019 and is scheduled to be completed in Summer 2020. V ensures FY 2017 Actuals Number of inspections performed annually (Stormwater Management) *This was not included as a workload measure in the FY 2019 Budget. Therefore, the City did not have a target for FY 2019. FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted 506 532 N/A* 684 800 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 381 PUBLIC WORKS 3udget Summary 1 Dollars by Division CIP Stormwater Management Fund Storm Drainage Operations and Maintenance Stormwater Environmental Compliance Stormwater Management Administration Stormwater Systems Improvement Flood Control Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 4,608,150 5,551,183 4,056,012 4,505,895 449,883 11.1% 1,359,040 1,425,879 1,731,325 1,646,677 (84,648) (4.9)% 487,412 935,125 1,035,175 1,156,254 121,079 11.7% 1,407,783 1,768,546 1,845,156 1,934,221 89,065 4.8% 245,910 192,330 696,360 701,845 5,485 0.8% 8,108,294 9,873,062 9,364,028 9,944,891 580,863 6.2% Dollars by Category Salary & Benefits Healthcare 198,979 236,012 243,089 242,292 (797) (0.3)% Other Benefits 21,435 35,186 42,217 43,837 1,620 3.8% Overtime 24,941 17,655 50,714 52,032 1,319 2.6% Pension 290,983 406,962 418,581 605,953 187,372 44.8% Retiree Medical 63,585 66,895 144,909 149,256 4,347 3.0% Salary 1,017,360 1,287,106 1,462,271 1,512,516 50,245 3.4% Workers' Compensation 19,694 94,896 28,410 53,111 24,701 86.9% Total Salary & Benefits 1,636,977 2,144,712 2,390,191 2,658,997 268,805 11.2% Allocated Charges 956,201 1,089,398 1,173,474 1,059,274 (114,200) (9.7)% Contract Services 464,178 474,599 907,899 907,899 - -% Debt Service 335,877 298,580 949,300 949,300 - -% Facilities & Equipment (260) 7,881 7,621 7,621 - -% General Expense 51,551 11,059 145,960 145,960 -% Operating Transfers -Out 133,472 34,722 21,589 36,700 15,111 70.0% Rents & Leases 40,045 47,482 48,805 50,468 1,663 3.4% Supplies & Material 77,396 63,949 94,726 94,726 - -% Transfer to Infrastructure - 330,000 - - - -% Capital Improvement Program 4,412,857 5,370,680 3,624,464 4,033,947 409,483 11.3% Total Dollars by Expense 8,108,294 9,873,062 9,364,028 9,944,891 580,863 6.2% Category 382 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary a_ 1 FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Revenues Charges for Services 71,488 53,980 117,888 117,888 Charges to Other Funds 2,961 - - - - From Other Agencies 21,680 - - - - Net Sales 6,600,488 6,911,617 7,128,430 7,449,209 320,779 4.5% Other Revenue (243) 129 -% Other Taxes and Fines 2,200 2,500 2,500 -% Return on Investments 186,051 153,636 129,700 225,900 96,200 74.2% Total Revenues 6,882,425 7,121,562 7,378,518 7,795,497 416,979 5.7% Positions by Division CIP Stormwater Management Fund Storm Drainage Operations and Maintenance Stormwater Environmental Compliance Stormwater Management Administration Stormwater Systems Improvement Flood Control Total Staffing 2.17 2.37 5.00 5.00 1.58 4.59 2.37 2.37 5.00 5.00 4.59 4.59 0.60 0.80 0.80 0.80 - - % 0.99 0.79 0.79 0.79 10.34 13.55 13.55 13.55 FY 2017 Actuals Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Director Public Works Associate Engineer Electrician Electrician -Lead 0.10 0.05 0.10 0.15 0.10 0.20 0.19 0.10 1.00 FY 2018 Actuals 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 FY 2019 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 FY 2020 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 FY 2020 Change FTE - % - % FY 2020 Salary 6,621 5,041 6,532 10,648 7,609 56,996 126,088 10,029 107,365 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 383 PUBLIC WORKS Staffing Job Classification Engineer Engineering Technician III Equipment Operator Heavy Equipment Operator FY 2017 Actuals 0.90 0.25 0.54 0.90 Heavy Equipment Operator -Lead 1.15 Industrial Waste Inspector 0.19 Industrial Waste Investigator 0.80 Management Analyst 0.20 FY 2018 Actuals 0.90 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2019 Adopted Budget 0.90 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2020 Adopted Budget 0.90 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2020 Change FTE FY 2020 Salary 107,398 22,307 42,786 80,748 110,375 35,274 99,094 33,299 Manager Environmental Control 0.40 0.70 0.70 0.70 - 86,753 Program Manager Maintenance Operations 0.50 0.50 0.50 0.50 60,726 Manager Watershed Protection 0.20 0.20 0.20 30,834 Program Assistant II - 0.60 0.60 0.60 - 46,450 Project Engineer 0.83 0.83 0.83 0.83 - 106,603 Project Manager 0.15 0.55 0.55 0.55 - 64,976 Senior Accountant 0.10 0.10 0.10 0.10 12,721 Senior Engineer 0.76 0.76 0.76 0.76 108,601 Senior Industrial Waste Investigator 0.10 0.10 0.10 10,596 Surveyor, Public Works 0.12 0.12 0.12 0.12 - 11,693 Technologist 0.30 0.30 0.30 0.30 - 41,843 Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 - 4,667 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 10.14 13.35 13.35 13.35 - 1,454,670 0.20 0.20 0.20 0.20 8,320 10.34 13.55 13.55 13.55 - 1,462,990 384 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS Budget Reconciliation Positions Expenditures Revenues Net Stormwater Management Fund Prior Year Budget 9,364,028 7,378,518 1,985,510 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 savings) Workers' Compensation Savings (one-time FY 2019 savings) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Stormwater Rate Adjustment (CPI increase of 4.5%) Return on Investments Rents & Leases Expenditures Transfers to Technology Fund (Citywide Technology CIP) Capital Improvement Program General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (21,104) 9,749 11,322 — (33) 137,275 66,712 64,700 303,089 (21,104) 9,749 11,322 (33) 137,275 66,712 64,700 (303,089) 96,200 (96,200) 1,663 1,663 32,401 32,401 413,297 (58,211) 86,579 6,658 (9,618) 5,039 (128,421) (25,975) (11,203) 580,896 17,690 416,979 413,297 (58,211) 86,579 6,658 (9,618) 5,039 (17,690) (128,421) (25,975) (11,203) 163,917 Total FY 2020 Adopted Budget 13.55 9,944,891 7,795,497 2,149,394 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 385 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 27 vehicles and nine pieces of equipment in FY 2019 to maintain safe, reliable, and efficient use of resources. ▪ Developed a fleet electrification pilot program, including three Plug-in Hybrid electric pick- up trucks assigned for field operation, to evaluate performance, operational compatibility, maintenance and repair needs, fuel efficiency, and total cost of ownership. ▪ Awarded a contract for vehicle/equipment auction services, automotive and industrial lubricants, fleet software maintenance/support, compressed natural gas (CNG) station maintenance/repair, and police outfitting. ▪ Reduced fuel consumption due to newer vehicles providing a significant improvement in fuel efficiency. • Evaluated and updated rates to ensure cost -recovery is achieved for CNG, shop and commercial maintenance and repairs, and parts. Initiatives ▪ Perform review of underutilized vehicles annually and remove vehicles from fleet that do not meet the minimum usage requirements per policy. 386 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS • 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 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 for new vehicles/equipment. • Continue to implement recommendations from the fleet cost recovery study. ▪ Continue the fleet electrification pilot program to evaluate performance, operational compatibility, and maintenance and repair needs of the Plug-in Hybrid electric pick-up trucks in service. ▪ Continue implementation of the updated Vehicle and Equipment Use, Maintenance, and Replacement Policy, including the efforts to evaluate and limit idling time for City vehicles. • Develop a ride -share pilot in collaboration with commercial rideshare service providers to evaluate the feasibility to replace or minimize the existing City pool vehicle program utilized by multiple departments. Goals and Objectives GOAL 1 Ensure the City's vehicles, equipment, and fuel storage/dispensing facilities are safe, reliable, and energy efficient to reduce Green House Gas (GHG) emissions. Objectives: • Continue seeking opportunities to increase the number of electric and alternative fuel vehicles/equipment, thereby reducing fuel consumption. ▪ 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 2020 ADOPTED OPERATING BUDGET 387 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 FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Percent of alternative fuel consumed by non -emergency vehicles Description Purpose Status Workload 33% 32% 33% 52% 52% 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 307,046 gallons of fuel in FY 2018 among unleaded, diesel, and natural gas. It used 99,054 gallons of compressed natural gas, which equates to 32% of alternative fuel use. Actuals for FY 2019 and Estimates for FY 2020 will see an increase due to Green Waste adding nine CNG vehicles that fill at the City of Palo Alto. Measures FY 2017 Actuals FY 2018 Actuals 51 FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted 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 51 46 53 51 4,019 3,674 3,590 3,450 3,400 555 557 558 558 562 388 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary I FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division Vehicle Operations and 5,463,507 5,399,075 6,389,688 7,389,956 1,000,269 15.7% Maintenance Vehicle Replacement and Additions 4,987,407 5,318,926 7,701,807 6,685,148 (1,016,659) (13.2)% Total 10,450,914 10,718,000 14,091,495 14,075,104 (16,390) (0.1)% Dollars by Category Salary & Benefits Healthcare 308,844 302,081 352,799 335,879 (16,921) (4.8)% Other Benefits 36,622 48,298 49,814 49,456 (358) (0.7)% Overtime 4,919 9,277 58,081 59,592 1,510 2.6% Pension 355,106 394,672 436,630 577,445 140,815 32.3% Retiree Medical 86,962 91,489 148,359 152,810 4,451 3.0% Salary 1,292,182 1,296,957 1,511,184 1,447,511 (63,673) (4.2)% Workers' Compensation 4,995 69,959 38,855 57,764 18,909 48.7% Total Salary & Benefits 2,089,629 2,212,733 2,595,722 2,680,456 84,734 3.3% Allocated Charges 1,366,290 1,287,670 1,352,629 1,262,711 (89,917) (6.6)% Contract Services 524,789 437,272 506,696 517,748 11,052 2.2% Facilities & Equipment 126,894 -% General Expense 108,857 82,805 70,630 70,630 -% Operating Transfers -Out - 38,394 139,562 184,769 45,207 32.4% Rents & Leases 181,834 188,086 195,002 202,467 7,465 3.8% Supplies & Material 1,109,794 1,218,310 1,338,816 1,427,924 89,108 6.7% Transfer to Infrastructure 263,198 540,000 1,460,000 920,000 170.4% Capital Improvement Program 4,806,522 5,125,837 7,352,438 6,268,399 (1,084,039) (14.7)% Total Dollars by Expense Category 10,450,914 10,718,000 14,091,495 14,075,104 (16,390) (0.1)% Revenues Charges to Other Funds 8,227,916 9,305,728 9,013,976 9,192,300 178,324 2.0% Operating Transfers -In 924,456 26,326 - -% Other Revenue 312,216 346,482 155,000 155,000 -% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 389 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 2017 Actuals 197,278 9,661,867 9,882,406 9,347,276 9,607,300 260,024 FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 203,870 15.86 15.86 1.40 1.40 178,300 260,000 14.28 13.61 81,700 FY 2020 Change % 45.8% 2.8% (0.67) (4.69)% 2.25 2.40 0.15 6.67% 17.26 17.26 16.53 16.01 (0.52) (3.15) % FY 2017 Actuals 1.00 0.25 1.00 FY 2018 Actuals 1.00 0.25 1.00 FY 2019 Adopted Budget 1.00 0.25 1.00 FY 2020 Adopted Budget 0.25 1.00 FY 2020 Change FTE (1.00) FY 2020 Salary 44,886 107,952 Equipment Maintenance Service 2.00 2.00 2.00 2.00 - 125,277 Person Fleet Services Coordinator 2.00 2.00 2.00 1.00 (1.00) 78,465 Management Analyst 0.20 0.20 0.20 0.20 24,074 Management Assistant 1.00 1.00 82,656 Manager Fleet 1.00 1.00 1.00 1.00 134,347 Motor Equipment Mechanic II 6.00 6.00 6.00 6.00 - 532,707 Motor Equipment Mechanic -Lead 2.00 2.00 2.00 2.00 189,946 Project Manager 1.00 1.00 1.00 1.00 - 99,382 Senior Management Analyst 0.08 0.08 0.08 0.08 8,160 Sub -total: Full -Time Equivalent 16.53 16.53 16.53 15.53 (1.00) 1,427,853 Positions Temporary/Hourly 0.73 0.73 0.48 0.48 21,935 Total Positions 17.26 17.26 16.53 16.01 (0.52) 1,449,788 390 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 16.53 14,091,494 9,347,276 ositions Expenditures Revenues Net Vehicle Replacement and Maintenance Fund 4,744,218 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 savings) Workers' Compensation Savings (one-time FY 2019 savings) (22,216) 13,334 15,484 (22,216) 13,334 15,484 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities 6,602 — 6,602 Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to 62,100 City's Unfunded Pension Liability Return on Investments — Rents & Leases Expenditure 7,465 Vehicle Parts and Fuel Contractual and Managed 100,160 Services Transfer to Infrastructure Fund (Citywide Facilities 920,000 CIP) Capital Improvements Program (1,080,815) Transfer to Technology Fund (Citywide Technology 64,200 CIP) General Fund Cost Allocation Plan (125,294) Information Technology Allocated Charges 11,962 Liability Insurance Allocated Charges (9,188) Printing & Mailing Services Allocated Charges (1,256) Public Works Administration Allocated Charges 11,758 Utilities Allocated Charges 8,766 Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges 156,144 69,791 81,700 156,144 69,791 62,100 (81,700) 7,465 100,160 920,000 (1,080,815) 64,200 (125,294) 11,962 (9,188) (1,256) 11,758 8,766 178,324 (178,324) (15,365) (15,365) Adjustments to Costs of Ongoing Activities — 180,428 260,024 (79,596) PUBLIC WORKS • C:ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 391 PUBLIC WORKS -0.52 (203, 420) 3udget Reconciliation Total FY 2020 Base Budget Budget Adjustments 1 Fleet Staffing Adjustment Total Budget Adjustments Total FY 2020 Adopted Budget Positions Expenditures (0.52) (0.52) 16.01 14,278,524 (203,420) (203,420) 14,075,104 Revenues 9,607,300 9,607,300 Net Vehicle Replacement and Maintenance Fund 4,671,224 (203,420) (203,420) 4,467,804 3udget Adjustments Net Vehicle Replacement and Maintenance 1 Fleet Staffing Adjustment 0 (203,420) This action restructures various positions in the Fleet Services workgroup of the Public Services Division resulting in a net reduction of 0.52 FTE in the Vehicle Replacement and Maintenance Fund. The elimination of one vacant Fleet Services Coordinator (1.0 FTE) and recognition of savings equivalent to one Equipment Maintenance Service Person (1.0 FTE) is partially offset by the reclassification of one Administrative Associate III (1.0 FTE) to Management Assistant (1.0 FTE) and the addition of one part-time Maintenance Assistant (0.48 FTE). After evaluating options to contain costs while maintaining service delivery, it was determined that this new staffing structure would best provide the coverage needed to maintain activity levels and quality of service in the absence of the Fleet Services Coordinator and Equipment Maintenance Service Person. (Ongoing savings: $209,000) Performance Results 0 This realignment in staffing will help contain costs in the Vehicle Replacement and Maintenance Fund. 392 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 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 • Completed construction of the sludge dewatering and truck loadout facility (Capital Project WQ-14001). It was tested in Winter 2018 and startup commenced Spring 2019. With the facility completed and online, the two sludge -burning incinerators have been placed in standby reserve while pending final retirement by the end of 2019. • Continued design activities for Secondary Treatment Upgrades project (Capital Project WQ- 19001) and the Laboratory/Environmental Services Building project (Capital Project WQ- 14002) as part of fulfilling the RWQCP's 2012 Long Range Facilities Plan. ▪ Continued progress on the Northwest County Recycled Water Strategic Plan including completion of the Indirect Potable Reuse Feasibility and Groundwater Assessment. • Initiated environmental review of the advanced water purification (i.e. reverse osmosis) facility (Capital Project WQ-19003) to improve recycled water quality. Initiatives • Begin construction of the Primary Sedimentation Tank Rehabilitation project (Capital Project WQ-14003). ▪ Secure funding and complete design for a 1-2 million gallons per day (MGD) microfiltration/ ultrafiltration and reverse osmosis advanced water purification facility. • Complete the Recycled Water Strategic Plan which assesses the feasibility of the reuse options for the RWQCP's effluent including non -potable reuse, indirect potable reuse, and direct potable reuse. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 393 PUBLIC WORKS Goals and Objectives GOAL 1 Protect the environment and the public's health. Objectives: • Conduct regular inspections of commercial permittees to ensure compliance with all regulations. ▪ Complete new capital improvement projects to ensure the RWQCP'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. • Follow the Palo Alto Baylands Nature Preserve Design Guidelines and the Architectural Review Board's recommendation when planning and constructing new facilities and buildings. 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. • Conduct ongoing research on potential regional expansion of recycled water usage in the RWQCP's service areas. 394 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS Key Performance ti easures DISCHARGE TESTS IN COMPLIANCE Goal Protect the environment and the public's health. Objective Maintain 99% discharge test compliance. FY 2017 Actuals Percent of wastewater treatment discharge tests in compliance Description Purpose Status 100% FY 2018 Actuals FY 2019 Adopted 100% 99% FY 2019 Estimated 100% FY 2020 Adopted 99% 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. 99% or higher 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 2019 and FY 2020. PERCENT OF PASSED FISH ACUTE TOXICITY BIOASSAY TESTS Goal Protect the environment and the public's health. Objective Obtain fish acute toxicity bioassays with 100% survival. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Fish toxicity test (percent survival) 100% 100% 100% FY 2019 Estimated Description Percent of acute fish toxicity bioassay tests passed. Fish survival in the bioassay is an indicator that the RWQCP discharges to the Bay are safe for receiving water marine life. In FY 2018, all acute toxicity bioassay tests passed with 100% survival rate. This trend is expected to continue in FY 2019 and FY 2020. Purpose Status 100% FY 2020 Adopted 100% Workload Measures FY 2017 Actuals Millions of gallons of recycled water delivered Number of inspections performed annually (Wastewater Treatment) Millions of gallons processed by the Palo Alto's Regional Water Quality 7,176 6,464 6,935 6,337 6,422 Control Plant 180 301 FY 2018 Actuals 260 406 FY 2019 Adopted 250 350 FY 2019 Estimated 233 600 FY 2020 Adopted 260 550 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 395 PUBLIC WORKS 3udget Summary J Dollars by Division CIP Wastewater Treatment Fund Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Wastewater Treatment Systems Improvement Operations Total FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 2,644,342 16,876,892 9,824,740 28,282,159 18,457,420 187.9% 817,337 633,281 4,755,198 4,188,831 (566,367) (11.9)% 4,357,398 4,865,706 3,731,579 3,801,407 69,828 1.9% 15,991, 438 17, 544, 767 17,196,146 19,161, 729 1,965,583 11.4% 23,810,516 39,920,647 35,507,663 55,434,126 19,926,463 56.1% Dollars by Category Salary & Benefits Healthcare 1,333,363 1,311,044 1,444,680 1,459,350 14,671 1.0% Other Benefits 131,812 175,441 198,135 206,957 8,822 4.5% Overtime 260,776 310,868 318,189 326,462 8,273 2.6% Pension 1,872,666 1,986,062 2,116,386 3,059,763 943,377 44.6% Retiree Medical 816,320 858,810 853,066 878,658 25,592 3.0% Salary 6,698,533 6,788,334 7,563,716 7,802,750 239,034 3.2% Workers' Compensation 52,654 102,448 195,136 277,378 82,242 42.1% Total Salary & Benefits 11,166,125 11,533,008 12,689,308 14,011,318 1,322,010 10.4% Allocated Charges 5,311,133 6,659,425 6,122,299 5,593,553 (528,746) (8.6)% Contract Services 1,909,211 2,524,990 3,007,839 3,738,908 731,069 24.3% Debt Service 443,920 406,136 1,468,851 1,468,851 -% Facilities & Equipment 4,110 7,500 7,500 -% General Expense 449,456 452,963 451,029 389,029 (62,000) (13.7)% Operating Transfers -Out 335,213 210,478 104,568 156,100 51,532 49.3% Supplies & Material 1,630,955 1,391,491 2,090,754 2,069,754 (21,000) (1.0)% Capital Improvement Program 2,560,394 16,742,155 9,565,514 27,999,113 18,433,598 192.7% Total Dollars by Expense Category Revenues Charges to Other Funds From Other Agencies 23,810,516 39,920,647 35,507,663 55,434,126 19,926,463 56.1% 44,851 37,189 4,000,000 52,644 53,818 1,174 2.2% 396 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary Net Sales Other Revenue Other Taxes and Fines Return on Investments Total Revenues FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 22,935,389 26,578,677 28,370,284 30,661,182 2,290,898 665,707 766,779 5,838,000 27,409,000 21,571,000 369.5% - 4,000 4,000 - 298,324 307,203 199,200 389,000 189,800 95.3% 23,944,271 31,689,848 34,464,128 58,517,000 24,052,872 69.8% FY 2020 Change % 8.1% -% Positions by Division CIP Wastewater Treatment Fund Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Wastewater Treatment Systems Improvement Operations Total Staffing Job Classification Account Specialist Accountant Administrative Associate II Assistant Director Public Works Assistant Manager WQCP Associate Engineer Chemist Deputy Chief/Fire Marshal Electrician Electrician -Lead Hazardous Materials Inspector Industrial Waste Inspector Industrial Waste Investigator Laboratory Technician WQC 1.30 1.30 0.59 15.22 1.30 1.30 0.59 0.59 13.21 13.21 56.36 56.16 56.16 0.59 13,21 56.16 73.47 71.26 71.26 71.26 FY 2017 Actuals 0.10 0.25 2.00 0.75 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.80 0.35 3.00 FY 2018 Actuals 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 3.00 FY 2019 Adopted Budget 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 3.00 FY 2020 Adopted Budget 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 3.00 FY 2020 Change FTE -% FY 2020 Salary 6,621 25,204 141,972 133,172 300,256 190,721 285,657 8,023 290,828 107,365 3,290 228,398 14,864 255,501 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 397 PUBLIC WORKS Staffing Job Classification Management Analyst Manager Environmental Control Program Manager Laboratory Services FY 2017 Actuals 0.67 1.50 FY 2018 Actuals 0.57 1.20 1.00 1.00 FY 2019 Adopted Budget 0.57 1.20 FY 2020 Adopted Budget 0.57 1.20 1.00 1.00 Manager Water Quality Control 1.00 1.00 1.00 1.00 Plant FY 2020 Change FTE FY 2020 Salary 62,754 150,552 145,018 187,117 Manager Watershed Protection 0.95 0.75 0.75 0.75 - 115,627 Plant Mechanic 7.00 7.00 7.00 7.00 - 654,777 Program Assistant II 2.00 1.40 1.40 1.40 108,383 Project Engineer 1.00 1.00 1.00 1.00 128,437 Project Manager 1.00 0.60 0.60 0.60 71,186 Senior Accountant 0.10 0.10 0.10 0.10 - 12,721 Senior Buyer 1.00 1.00 1.00 1.00 - 94,413 Senior Chemist 1.00 1.00 1.00 1.00 - 105,811 Senior Engineer 3.00 3.00 3.00 3.00 401,898 Senior Industrial Waste Investigator 0.99 0.89 0.89 0.89 94,301 Senior Management Analyst 0.13 0.13 0.13 0.13 - 14,725 Senior Mechanic 1.00 1.00 1.00 1.00 - 100,573 Senior Operator WQC 6.00 6.00 6.00 6.00 - 640,310 Senior Technologist 1.00 1.00 1.00 1.00 - 153,005 Storekeeper 1.00 1.00 1.00 1.00 68,918 Supervisor WQCP Operations 3.00 3.00 3.00 3.00 369,554 Technologist 0.70 0.70 0.70 0.70 97,633 WQC Plant Operator II 16.00 16.00 16.00 16.00 1,505,572 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 2.42 2.42 2.42 2.42 - 213,567 Total Positions 73.47 71.26 71.26 71.26 - 7,488,725 71.05 68.84 68.84 68.84 - 7,275,158 398 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 35,507,663 34,464,128 1,043,535 One -Time Prior Year Budget Adjustments Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water Year 2 Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 savings) Workers' Compensation Savings (one-time FY 2019 savings) - (188,000) (104,568) 66,965 77,764 (188, 000) (104,568) 66,965 77,764 One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — (147,839) (188,000) 40,161 Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Tributary Agency Partner Contribution Return on Investments FY 2020 Municipal Fee Revenue Adjustment Landfill Gas Sales to Wastewater Treatment Plant Water Quality Control Plant (WQCP) Chemicals and Supplies Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water Year 3 Landscape Maintenance Contract Transfer to Technology Fund (Citywide Technology CIP) Replacement of Incinerator with Dewatering Facility Capital Improvements Projects General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges 655,237 — 655,237 336,423 336,423 330,200 — 330,200 1,258,347 189,800 75,000 (51,950) (21,000) 47,000 47,000 55,437 156,100 810,069 18,433,599 21,712,000 142,967 (890,371) (41,123) 6,430 6,719 (1,258,347) (189,800) (75,000) (51,950) (21,000) 55,437 156,100 810,069 (3,278,401) 142,967 (890,371) (41,123) 6,430 6,719 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 399 PUBLIC WORKS 3udget Reconciliation Net Wastewater Treatment Positions Expenditures Revenues Fund Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Wastewater Treatment Allocated Charges 1,786 174,303 90 Workers' Compensation Allocated Charges (77,615) Adjustments to Costs of Ongoing Activities — 20,074,301 958,725 24,240,872 1,786 174,303 90 (958,725) (77,615) (4,166,571) Total FY 2020 Adopted Budget 58,517,000 (3,082,875) 400 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET in sound financial condition. UTILITIES Mission Statement The City of Palo Alto Utilities' mission is to provide safe, reliable, environmentally sustainable, and cost- effective services. Purpose The purpose of the City of Palo Alto Utili- ties is to provide high quality, cost-effec- tive electric, gas, fiber optics, water and wastewater collection services; promote effective energy and water effi- ciency programs; proactively manage infrastructure needs and replace deterio- rated or aging facilities with new technolo- gies to ensure safe and reliable delivery of services; and ensure the City's utilities are UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 401 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 500 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 DIRECTOR Dean Batchelor 1• 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 4.00 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 1.00 Power Engineer 5.00 Project Engineer 4.00 Senior Electrical Engineer 5.00 Senior Project Engineer 1.00 Supervisor, Electric Project Engineer 5.00 Utilities Engineer Estimator 1.00 Utilities Engineer Estimator -Lead RESOURCE MANAGEMENT 1.00 Assistant Director, Resource Management 1.00 Administrative Assoc II 1.00 Business Analyst 3.00 Key Account Representative 1.00 Manager, Utility Program Services 5.00 Resource Planner 5.50 Senior Resource Planner 4.00 Marketing Program Administrator 1.00 Program Assistant I I FY 2020 POSITION TOTALS 245.0 - Full-time 9.46 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 402 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2020 ADOPTED OPERATING BUDGET 403 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, gas, water, and wastewater distribution systems. OPERATIONS Utilities Operations is responsible for the operations, maintenance, and emergency response for the electric, fiber, gas, water, 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 • Completed the Upgrade Downtown project in collaboration with Public Works and Transportation, including utility pipe replacements, road repaving, and traffic signal enhancements. • Received Council approval for the Utilities Smart Grid Assessment and Utilities Technology Implementation Plan, which lays out a roadmap for Advanced Metering Infrastructure and other major software projects including the Utilities customer information and billing system replacement. • Received first place for the number of solar contracts and electric vehicle sign-ups in the Bay Area SunShares program, a regional solar group -buy program. • Launched new Electric Vehicle Charging Station rebate program for schools, apartment complexes, and non-profit buildings with common area charging accommodations. ▪ 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. ▪ Completed construction of a Sanitary Sewer Replacement Project for the Jr. Museum and Zoo (JMZ). • Received the Tree Line USA Award for the fifth year in a row by the National Arbor Day Foundation for delivering safe and reliable electricity while maintaining healthy community trees. • Won Voice of the People Award for Excellence in the Natural Environment, from the National Research Center and International City/County Management Association (ICMA). ▪ Received the Diamond Level Award as a Public Power Provider - the highest honor - for proficiency, sound business practices, and a utility -wide commitment to safe and reliable delivery of electricity, system improvement, energy efficiency and workforce development, from the American Public Power Association (APPA). 404 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES • Launched the new Utilities customer engagement portal to provide customers additional 24/7 self-services and customer information to better manage their consumption and choices. Initiatives ▪ Continue to implement the 2018 Utilities Strategic Plan to focus resources towards meeting priority initiatives related to workforce, technology, collaboration, financial efficiency, and resource optimization. ▪ Develop and issue a request for proposal for Advanced Metering Infrastructure (AMI)/Meter Data Management System (MDM) functional and system requirements. ▪ Integrate new Geographical Information System (GIS) to ensure accurate infrastructure information for customer service and infrastructure improvements. ▪ Conduct a comprehensive utility meter survey for 75,000 electric, gas, and water meters in the field in preparation of new AMI, GIS and utility billing systems. • Explore a partnership with VMware to develop a microgrid at its campus which could provide a charging site for the City's emergency command vehicles during major emergencies. • Implement the 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 and support City's efforts to meet greenhouse gas reduction goals. • Expand the fiber network to support AMI and internal wireless communication networks and enhance infrastructure resiliency. • Develop a near and long term succession planning strategy including professional development, recruitment, and market -based compensation. ▪ 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. • Collaborate with Public Works and Santa Clara Valley Water District to complete the Recycled Water Strategic Plan, a comprehensive evaluation of all potential recycled water supply options including non -potable and potable reuse options. • Develop and launch new energy and water efficiency programs and services for customers to adopt energy and water saving measures, reduce their utility bills, and improve sustainability. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 405 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Palo Alto's average residential monthly utility bill above/below the (10.40)% (8.25)% (14.00)% (12.00)% (12.00)% 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. Rates for neighboring cities are not yet available for FY 2020. 406 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2017 Actuals 86.00% FY 2018 Actuals 84.75% FY 2019 Adopted 86.00% FY 2019 Estimated 86.00% FY 2020 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 and FY 2020. ensures Total cost of Capital Improvement Program annually (Millions) FY 2017 Actuals $20.40 FY 2018 Actuals $24.10 FY 2019 Adopted $35.40 FY 2019 Estimated $35.40 FY 2020 Adopted $51.50 3udget Summary i FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Fund Electric Fund - Operating 50,471,721 51,443,024 70,081,759 76,606,602 6,524,843 Electric Supply 93,975,231 108,624,454 104,723,604 110,086,193 5,362,590 5.1% Fiber Optics 2,385,108 3,377,476 4,165,484 4,325,932 160,448 3.9% Gas Fund - Operating 19,025,805 23,120,579 26,851,951 26,707,978 (143,974) (0.5)% Gas Supply 14,246,460 14,110,302 16,704,380 17,866,764 1,162,384 7.0% Wastewater Collection - Operating 24,361,592 17,880,581 23,875,272 27,310,057 3,434,785 14.4% Water Fund - Operating 38,572,014 46,737,022 59,028,147 60,843,556 1,815,409 3.1% Total 243,037,933 265,293,438 305,430,596 323,747,082 18,316,485 6.0% FY 2020 Change % 9.3% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 407 UTILITIES 3udget Summary 1 Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Property Taxes Rental Income Return on Investments Total Revenues FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 588,350 459,431 270,000 420,000 150,000 55.6% 716,165 841,410 504,525 354,717 (149,808) (29.7)% 512,301 500,773 576,632 576,632 - -% 229,843,108 248,735,959 246,383,948 264,139,740 17,755,792 7.2% 2,922,786 3,977,536 4,203,098 3,163,724 (1,039,374) (24.7)% 9,701,750 9,785,634 11,953,278 11,719,065 (234,213) (2.0)% 39 - - - -% 5,000 5,000 - - - -% 3,794,136 4,131,918 4,442,200 5,160,700 718,500 16.2% 248, 083, 635 268, 437, 661 268, 333, 681 285, 534, 578 17, 200, 897 6.4% Positions by Fund Electric Fund 113.32 111.23 111.33 110.95 (0.38) (0.34)% Fiber Optics Fund 6.82 7.60 7.60 7.50 (0.10) (1.32)% Gas Fund 52.55 53.11 53.83 53.83 - -% Utilities Administration 18.22 19.21 19.21 19.46 0.25 1.30% Wastewater Collection Fund 29.17 29.00 29.16 29.16 -% Water Fund 47.99 47.90 46.92 46.94 0.02 0.04% Total 268.06 268.05 268.05 267.84 (0.21) (0.08)% 408 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 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 underground substructure for Underground District 46 near the intersection of El Camino Real and Arastradero Road. ▪ Updated long-term electric supply portfolio strategic document (Electric Integrated Resource Plan). ▪ Adopted a hydroelectric rate adjuster to manage hydroelectric cost variability during drought seasons. ▪ Began operations for all solar projects on parking garages. Added new solar rooftops for two City garages (Bryant and Webster). Continued work on remaining projects that were initiated as part of the Palo Alto Clean Local Energy Accessible Now (CLEAN) Programs (aka Feed -In Tariffs). ▪ Completed 1.2 megawatt Solar System at Hewlett Packard campus which will provide about 20% of the facility's electricity usage. ▪ Approval of the advanced metering infrastructure (AMI) plan and technology roadmap to install advance/smart meters by 2023. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 409 UTILITIES • Surveyed residents on new technologies such as electric vehicles, solar, and energy storage. Results of survey were used to develop the Distribution System Assessment for integrating new energy technologies into the electric distribution system. ▪ Smoothly transitioned from existing net energy metering (NEM) program to NEM 2.0 successor program as of December 2018. • Completed Phase I of the Veterans Affairs Hospital upgrade including relocation of 60kV equipment. • Created online calculator to help residents calculate energy storage when they evaluate Electric Vehicles (EV) and photovoltaic (PV) solar panels. • Increased participation in EV and building decarbonization rebate programs. ▪ Completed feeder relay coordination review and testing of relays at nine city substations. • Completed phase one of supervisory control and data acquisition (SCADA) cybersecurity upgrade. ▪ Engineered and completed replacement of 65 wood utility poles. ▪ Sponsored a successful EV ride and drive event and participated in a successful solar/EV group buy program. • Processed over 600 customer requests for new electric services. ▪ Completed the Utilities Control Center room upgrade including new video screens and consoles. Initiatives • Continue to reduce barriers to building electrification and electric vehicle adoption, build on existing electrification programs, and evaluate new programs. Begin program to assist multi- family customers with EV charger installations as a complement to existing rebate program. ▪ Complete the installation of the failed 115/60kV transformer and breaker to improve the electrical fault at City's main electric receiving station. ▪ Effectively advocate with the Federal Government to preserve and enhance value of Federal hydropower contract in advance of 2020 contract renewal. ▪ Continue to assist customers with their energy use and promote efficiency. Launch new energy efficiency programs and resources for residents and small businesses. • Expand effort to lower greenhouse gas emissions through electrification of the transportation sector such as encouraging adoption of electric vehicles. • Implement updated electric supply strategies embodied in Electric Integrated Resource Plan. ▪ Revisit strategy for promoting solar energy. Bring remaining Palo Alto CLEAN projects online. ▪ Continue to offer electric safety education presentations to school and community groups. 410 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES • 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 Veterans Affairs Hospital for their site upgrades. ▪ Relocate/reconstruct City's electric and communication facilities as necessary to facilitate the electrification of the Caltrain system. ▪ 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. ▪ Establish a proactive infrastructure replacement program based on planned replacement before failure to support reliability and resiliency. • Enhance planned maintenance programs for all utilities through clearly defined maintenance plans, improved management reporting, and developing innovative ways to ensure efficient completion of all maintenance. 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. ▪ Accelerate Electric Vehicle (EV) penetration for both Palo Alto -based and inbound vehicles by providing more charging infrastructure. ▪ Expand effort to lower greenhouse gas emissions through electrification of the transportation sector such as encouraging adoption of electric vehicles. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 411 UTILITIES Key Performance ti easures ENVIRONMENTAL SUSTAINABILITY Goal Objective Support environmental sustainability and promote efficient use of resources. Achieve Renewable Portfolio Standard (RPS) of at least 50 percent by 2030. FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2019 Adopted Estimated FY 2020 Adopted Percent of retail electric sales volume provided by renewable supply resources under long-term PPAs Description Purpose Status 51.00% 61.00% 58.20% 61.00% 60.00% This measures the fraction of the City's retail electric sales volume that is provided by renewable supply resources that are under long-term agreement. The Clean Energy and Pollution Reduction Act (SB 350) of 2015 raised the state's renewable portfolio standard (RPS) to 50 percent by 2030 and required a doubling of energy efficiency savings by 2030. The City continues to meet both its RPS and carbon neutrality objectives, and achieved an RPS level of greater than 60 percent in 2017 —13 years earlier than required under state law. SYSTEM RELIABILITY Goal Provide safe and efficient delivery of electric services to customers. Objective Provide exceptional system reliability. FY 2017 FY 2018 Actuals Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Average duration of customer outages in minutes as reported using industry guidelines Description Purpose Status 63.76 87.98 60.00 70.09 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. The goal to attain 60 minutes or less in overall response time to restore outages was impacted in FY 2019 due to staffing vacancies and abnormally stormy weather causing a cluster of outages that resulted in longer response times. The Electric Utility had 27 sustained outages affecting a range of customers from 48 to 3,365 customers. Of the 27 outages, 19 were storm related and 8 non -storm. The non -storm outages were attributed to various types of equipment failure throughout the distribution system. 412 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES ENVIRONMENTAL SUSTAINABILITY - SOLAR Goal Objective Support environmental sustainability and promote efficient use of resources. Increase the penetration of local solar installations. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Cumulative installed capacity of photovoltaic (PV) systems measured in megawatts (MW) Description Purpose Status Workload 8.70 11.80 14.90 13.30 14.00 This represents the cumulative installed capacity of PV systems in Palo Alto, measured in MW. It includes PV systems installed prior to the passage of California Senate Bill 1 (SB1), which enacted the Million Solar Roofs Initiative and expands upon the current California Solar Initiative (CSI) and the Energy Commission's New Solar Homes Partnership (NSHP). This measure supports the City's goal of achieving a 100 percent carbon neutral electric supply portfolio, meeting 4 percent of the City's electricity needs through local solar by 2023, and complying with California Senate Bill 1 (SB1) to increase PV installations. Increasing the cumulative installed capacity of PV systems will also benefit the environment and expand the flexibility of the City's electric generation portfolio. California Senate Bill 1 (SB1) became effective in 2006 and required all California electric utilities to achieve a Statewide goal of adding 3,000 MW of new PV systems over ten years. The City of Palo Alto's portion of this statewide goal was to hit 3.0 MW cumulative installed capacity of PV systems by FY 2016. The City has exceeded the goal set by the state and was at 7.70 MW in FY 2016. With the costs of installing PV systems steadily decreasing, along with additional incentives such as rebates, staff anticipates an increase of PV installations to 14.00 MW in FY 2020 primarily from residential and commercial construction projects. Measures 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" Total Number of Outages FY 2017 Actuals 29,616 1 FY 2018 Actuals 29,475 2 FY 2019 Adopted 29,600 1 FY 2019 Estimated 29,600 1 FY 2020 Adopted 29,746 0 87% 88% 88% 88% 88% 20 35 17 30 28 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 413 UTILITIES 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Division CIP Electric Fund 11,558,306 10,315,316 21,400,284 23,765,466 2,365,182 Electric Administration 21,628,408 24,586,157 25,010,251 27,176,349 2,166,099 Electric Customer Service 2,190,933 2,292,027 2,474,150 2,665,595 191,445 Electric Demand Side Management 4,393,262 3,958,743 6,962,177 6,991,511 29,334 Electric Engineering (Operating) 1,656,522 1,790,943 2,029,395 2,415,964 386,569 Electric Operations and 11,834,348 11,664,339 15,174,255 16,103,804 929,549 6.1% Maintenance Electric Resource Management 91,185,173 105,459,953 101,754,850 107,574,106 5,819,256 5.7% Total 144,446,952 160,067,478 174,805,362 186,692,795 11,887,432 6.8% FY 2020 Change % 11.1% 8.7% 7.7% 0.4% 19.0% Dollars by Category Salary & Benefits Healthcare 1,897,689 1,949,617 2,403,978 2,475,451 71,473 3.0% Other Benefits 234,198 304,713 329,347 373,996 44,649 13.6% Overtime 946,401 929,360 504,795 517,920 13,125 2.6% Pension 2,869,831 3,103,244 3,643,765 5,290,653 1,646,888 45.2% Retiree Medical 1,537,263 1,617,277 1,555,185 1,601,840 46,656 3.0% Salary 10,743,153 10,816,735 12,997,024 13,384,300 387,277 3.0% Workers' Compensation 138,287 123,558 292,351 441,673 149,322 51.1% Total Salary & Benefits 18,366,822 18,844,505 21,726,445 24,085,834 2,359,389 10.9% Allocated Charges 2,905,159 5,506,903 8,799,392 10,434,079 1,634,688 18.6% Contract Services 4,445,291 3,096,678 7,743,680 7,615,180 (128,500) (1.7)% Debt Service 8,857,193 8,770,695 8,722,300 8,476,576 (245,724) (2.8)% Equity Transfer 12,035,000 12,887,000 12,709,000 13,129,000 420,000 3.3% Facilities&Equipment 2,174 64,155 64,155 -% General Expense 2,040,146 2,135,223 3,456,870 3,441,967 (14,903) (0.4)% Operating Transfers -Out 317,573 560,572 127,819 - (127,819) (100.0)% Rents & Leases 5,449,402 5,612,918 5,893,136 6,276,636 383,501 6.5% Supplies & Material 639,238 474,977 924,207 924,207 -% Transfer to Infrastructure 189,972 -% Utility Purchase 80,511,136 94,659,116 89,712,000 95,678,373 5,966,373 6.7% 414 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Capital Improvement Program Total Dollars by Expense Category Total Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services 3udget Summary FY 2017 Actuals 8,690,020 FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget 7,516,715 14,926,359 16,566,787 FY 2020 Change $ 1,640,428 144,446,952 160,067,478 174,805,362 186,692,795 11,887,432 FY 2020 Change % 11.0% 6.8% Revenues Charges for Services 455,040 310,863 230,000 380,000 150,000 65.2% Charges to Other Funds 306,268 460,890 294,362 139,712 (154,650) (52.5)% Net Sales 129,124,526 145,962,397 143,040,068 154,329,190 11,289,122 7.9% Operating Transfers -In 2,678,768 3,465,100 3,663,820 2,615,588 (1,048,232) (28.6)% Other Revenue 7,652,336 7,508,222 8,660,000 8,928,000 268,000 3.1% Property Taxes 39 - - - -% Rental Income 5,000 5,000 -% Return on Investments 1,800,584 1,941,997 2,507,700 2,158,000 (349,700) (13.9)% Total Revenues 142,022,560 159,654,470 158,395,950 168,550,490 10,154,540 6.4% Positions by Division CIP Electric Fund 32.14 31.90 31.90 31.90 - -% Electric Customer Service 12.07 11.70 12.00 11.90 (0.10) (0.83)% Electric Demand Side Management 6.85 6.17 6.17 5.59 (0.58) (9.40)% Electric Engineering (Operating) 4.98 4.98 4.98 4.98 -% Electric Operations and 48.36 48.10 48.10 48.10 - -% Maintenance Electric Resource Management 8.92 8.38 8.18 8.48 0.30 3.67% 113.32 111.23 111.33 110.95 (0.38) (0.34) % FY 2017 Actuals 0.33 4.00 FY 2018 Actuals 0.31 3.90 0.20 0.20 FY 2019 Adopted Budget 0.31 3.90 FY 2020 Adopted Budget 0.31 3.30 0.20 0.20 FY 2020 Change FTE FY 2020 Salary 20,526 (0.60) 234,254 35,397 0.40 0.40 0.40 0.40 - 78,025 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 415 UTILITIES Staffing Job Classification Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst FY 2017 Actuals 0.40 FY 2018 Actuals 0.40 0.60 0.60 0.50 0.50 FY 2019 Adopted Budget 0.40 FY 2020 Adopted Budget 0.40 0.60 0.60 0.50 0.50 2.04 1.94 1.60 1.60 Contracts Administrator 0.10 0.10 0.10 0.10 Coordinator Utilities Projects 1.55 1.55 1.55 1.55 Customer Service Representative 1.62 1.87 1.87 1.87 Customer Service Specialist 0.66 0.66 0.66 0.66 Customer Service Specialist -Lead 0.58 0.58 0.58 0.58 Electric Project Engineer 1.95 1.95 1.95 3.25 Electric Underground Inspector 2.00 2.00 2.00 2.00 FY 2020 Change FTE 1.30 FY 2020 Salary 77,958 130,366 100,391 223,161 11,754 134,364 131,557 51,059 47,991 439,118 189,016 Electric Underground Inspector 1.00 1.00 1.00 1.00 101,074 Lead Electrical Equipment Technician 1.00 1.00 1.00 1.00 - 86,281 Electrician Assistant I 3.00 3.00 3.00 3.00 224,931 Engineering Manager - Electric 0.55 0.55 0.55 0.55 113,084 Engineering Technician III 2.40 1.40 1.40 1.40 124,921 Heavy Equipment Operator 2.00 2.00 2.00 2.00 179,439 Inspector, Field Services 0.25 0.25 0.25 0.25 24,073 Lineperson/Cable Specialist 11.00 11.00 11.00 11.00 1,314,588 Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 - 511,582 Manager Customer Service 0.33 0.33 0.33 0.33 50,052 Manager Electric Operations 1.00 1.00 1.00 1.00 176,238 Manager Treasury, Debt & 0.30 0.30 0.30 0.30 - 44,703 Investments Manager Utilities Compliance 0.15 0.15 0.15 0.15 - 28,386 Manager Utilities Credit & 0.15 0.15 0.15 0.15 22,973 Collection Manager Utilities Program Services 0.40 0.40 0.40 0.40 - 59,912 Meter Reader 1.99 1.99 1.99 1.99 - 131,501 Meter Reader -Lead 0.33 0.33 0.33 0.33 23,329 Metering Technician 3.00 3.00 3.00 3.00 338,001 416 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification FY 2017 Actuals FY 2018 Actuals Metering Technician -Lead 1.00 1.00 Offset Equipment Operator 0.48 0.48 Overhead Underground Troubleman 2.00 2.00 FY 2019 Adopted Budget 1.00 0.48 FY 2020 Adopted Budget 1.00 0.48 FY 2020 Change FTE FY 2020 Salary 120,562 30,263 2.00 2.00 - 251,105 Power Engineer 2.30 2.30 2.30 1.00 (1.30) 127,393 Principal Business Analyst 0.34 0.34 0.34 0.34 60,013 Program Assistant II - - - 0.60 0.60 46,450 Project Manager 0.75 0.75 0.75 0.75 78,234 Resource Planner 3.65 3.85 3.65 2.85 (0.80) 364,298 SCADA Technologist 1.00 1.00 1.00 1.00 136,953 Senior Business Analyst 0.68 0.68 1.02 1.02 151,320 Senior Electrical Engineer 3.95 3.95 3.95 3.95 736,251 Senior Management Analyst 0.10 0.10 0.10 0.10 - 13,130 Senior Resource Planner 3.80 3.06 3.06 3.36 0.30 563,779 Senior Utilities Field Service Representative Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber - Lead 0.10 0.10 0.10 0.10 10,426 3.00 3.00 3.00 3.00 - 323,311 1.00 1.00 1.00 1.00 115,314 Substation Electrician 5.50 Substation Electrician -Lead 2.00 Supervising Electric Project Engineer 1.00 Tree Maintenance Person 1.00 Utilities Compliance Technician 2.00 Utilities Compliance Technician - Lead Utilities Credit/Collection Specialist 2.00 1.00 Utilities Engineer Estimator 3.25 Utilities Field Services Representative Utilities Key Account Representative Utilities Locator 0.50 1.60 5.50 5.50 2.00 2.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00 1.00 2.00 2.00 3.25 3.25 0.50 0.50 1.35 1.35 5.50 646,599 2.00 - 251,621 1.00 - 156,624 1.00 79,815 2.00 230,629 1.00 - 123,374 2.00 170,447 3.25 - 362,352 0.50 48,732 1.35 - 146,841 1.95 1.95 1.95 1.95 174,444 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 417 UTILITIES Staffing Utilities Marketing Program Administrator Job Classification FY 2017 Actuals FY 2019 FY 2018 Adopted Actuals Budget FY 2020 Adopted FY 2020 Budget Change FTE FY 2020 Salary Utilities Safety Officer Utilities Supervisor 1.90 1.60 0.55 0.55 5.00 5.00 Utilities System Operator 5.00 5.00 Utility Engineering Estimator - Lead 1.00 Sub -total: Full -Time Equivalent 108.18 107.12 107.22 107.52 0.30 12,849,966 Positions Temporary/Hourly 5.15 4.11 4.11 3.43 (0.68) 322,602 Total Positions 113.32 111.23 111.33 110.95 (0.38) 13,172,568 1.90 2.70 0.80 278,966 0.55 5.00 5.00 1.00 0.55 5.00 5.00 1.00 70,653 759,429 640,575 120,058 418 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation I Positions Expenditures Revenues Net Electric Fund Prior Year Budget 111.33 174, 805, 362 158, 395, 950 16,409,412 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Electric Customer Sales Revenue (8% Rate Increase) Electric Consultant Services Contract (sunset in FY 2019) Transfer to University Avenue Parking Fund for Employee Parking Permits Communication Maintenance and Utilities Payment Adjustments Rents & Leases Expenditure Alignment Return on Investments Equity Transfer to the General Fund Transfer from the Water and Gas Fund (EL -11014 Smart Grid Installation) Transfer from the General Fund (Traffic Signal and Streetlight Electric Costs) Electric Commodity Purchases Expenditure Capital Improvement Program General Fund Cost Allocation Plan Grounds Maintenance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Services Engineering & Inspection Allocated Charges Stormwater Management Allocated Charges (183,857) 29,753 116,506 (183,857) 29,753 116,506 — (37,598) — (37,598) 1,066,833 579,551 578,300 (128,500) 1,797 1,066,833 579,551 578,300 11,767,122 (11,767,122) - (154,650) 212,710 420,000 5,720,649 1,687,925 117,210 1,896 16,776 122 1,409 (128,500) 1,797 154,650 212,710 (349,700) 349,700 420,000 (470,000) 470,000 (578,232) 578,232 5,720,649 (60,000) 1,747,925 117,210 1,896 16,776 122 1,409 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 419 UTILITIES 3udget Reconciliation 3 Positions Expenditure , Revenues Net Electric Fund Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges 1,397,945 113,629 (37,310) 1,397,945 113,629 (37,310) Adjustments to Costs of Ongoing Activities 11,750,943 10,154,540 1,596,403 Total FY 2020 Base Budget 111.33 186,518,707 168,550,490 17,968,216 Budget Proposals 1 Resource Management Administrative Staffing Realignment 2 Resource Management Program Administration Staffing Realignment 3 Administrative Services Staffing Vacancies 4 Engineering Staffing Alignment 5 Resource Management Resource Planning Staffing Realignment 6 Elwell Court Improvements (0.68) (33,943) (29,784) (19,968) 0.00 14,286 0.30 72,707 170,791 (33,943) (29,784) (19,968) 14,286 72,707 170,791 Budget Changes (0.38) 174,088 174,088 Total FY 2020 Adopted Budget 110.95 186,692,795 168,550,490 18,142,305 420 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Adjustments Positions Expenditures Revenues Net Electric Fund 1 Resource Management Administrative Staffing Realignment i -0.68 (33,943) In 0 (33,943) This ongoing action will eliminate 0.60 FTE Administrative Associate, 0.68 FTE Project Specialist, and add 0.60 Program Specialist in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Program Assistant II position; eliminate one 1.0 FTE Administrative Associate II position, one 0.48 FTE Project Specialist position, and one vacant 0.48 FTE Project Specialist position in the Utilities Department. Currently the Utilities Sustainability and Efficiency programs rely on hourly employees to provide regular customer program support; however, the hourly positions have been difficult to fill on an extended basis. This action will allow more continuity of internal and external support for the Sustainability and Efficiency programs and will enable staff development for succession planning purposes throughout the Resource Management Division. (Ongoing savings: $32,900) Performance Results O 0 0 The full-time Program Assistant II position will streamline customer support and service delivery, while providing administrative support for these programs. 2 Resource Management Program Administration Staffing Realignment L 0.00 (29,784) ma 0 I (29, 784) This ongoing action will eliminate 0.80 FTE Resource Planner positions and add 0.80 FTE Utility Marketing Program Administrator positions in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Utility Marketing Program Administrator and eliminate two vacant 0.5 FTE vacant Resource Planner positions in the Utilities Department. Adding 1.0 FTE Utility Marketing Program Administrator will facilitate overall energy program management; this need has grown since the City adopted energy efficiency requirements beyond the State minimums. Since the City is now utilizing 100% renewable energy for electricity commodity purchases, the focus for carbon reduction efforts has shifted from electric commodity purchases to expanding the use of electrification throughout the City from other utility sources. (Ongoing savings: $32,500) Performance Results O 0 0 This action will help streamline energy program management, better achieve the City's sustainability goals, and generate cost savings. 3 Administrative Services Staffing Vacancies (19, 968) 0 (19,968) This one-time action recognizes vacancy savings for the equivalent of 1 0 FTE Senior Management Analyst and 1.0 FTE Account Specialist during FY 2020. Currently the Administrative Services Department is experiencing a vacancy factor of nearly 15%, including positions at these levels. Due to the priority of other staffing recruitments of a more urgent need, such as Purchasing Division staffing, it is anticipated that these recruitments will not be addressed until further through FY 2020 and therefore savings can be anticipated. The functions of these positions are currently being absorbed temporarily by the Chief Financial Officer, Assistant Director, and additional administrative assistance, primarily on overtime. (Ongoing savings: $0) Performance Results O 0 0 This action is anticipated to help contain costs for FY 2020. The anticipated impact will diminish staff's ability to continue to make progress on service delivery evolutions and requires staff to rely more heavily on contractual assistant and status quo business processes. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 421 UTILITIES 3udget Adjustments ud • et Ad'ustments Positions Expenditures Net Revenues Electric Fund 4 Engineering Staffing Alignment This ongoing action will reclassify 1.30 FTE Power Engineer positions to Electric Project Engineer positions in this fund for a net zero FTE change as a part of the Utilities Department engineering staff alignment. The department -wide reclassification of two 1.0 FTE Power Engineer positions to two 1.0 FTE Electric Project Engineers will align with current workload needs to meet the City's sustainability goals. These positions are partially funded in the Electric, Fiber, and Water funds. The Electric Project Engineer position requires a Professional Engineering (PE) license and is qualified to work independently on electric engineering projects with minimal guidance from concept through design, construction and closeout of the project. The Power Engineer position does not require a PE and works under the supervision of a Senior Electrical Engineer. This action facilitates retention of engineering staff and enhances succession planning. (Ongoing costs: $14,700) Performance Results 0 This action assists the Utilities Department's Strategic Plan goal to recruit and retain high performing employees, preventing loss of institutional knowledge, and mitigating service impact to customers. 5 Resource Management Resource Planning Staffing Realignment This ongoing action will add 0.30 FTE Senior Resource Planner position in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing is commensurate with current workload needs and meet the City's sustainability goals. This action will increase one vacant 0.5 FTE Senior Resource Planner position to 1.0 FTE Senior Resource Planner. The Resource Management Division manages the City's electric, water, and gas supply contracts, which included annual utility commodity purchases of approximately $90 million for electric, $22 million for water, and $15 million for gas. Attracting and retaining experienced high-level talent across multiple utilities is important; the City competes with other Community Choice Aggregators (CCAs) in the Electricity industry to recruit in the Bay Area. Adding a full-time Senior Resource Planner will enable the team to implement tasks under the Sustainability and Climate Action Plan while preparing for anticipated Senior Resource Planner retirements expected in the next few years. (Ongoing costs: $75,800) Performance Results 0 0 The full-time Senior Resource Planner will enhance the City's ability to pursue the City's sustainability and carbon reduction goals, without diverting staffing resources from core functions. 6 Elwell Court Improvements This one-time action will increase rental expenses for one year on office space rented and occupied by staff from the Utilities Department at Elwell Court. This increase will fund the costs of renovation and associated moving expenses. Under the current lease agreement, the tenant, the City of Palo Alto, is responsible for improvements and repairs within the rented space. While minor improvements have been performed on an as -needed basis, renovations are needed to address the worn out interior and to bring the space in compliance with the American Disability Act (ADA) requirements. Elwell has been rented for over 20 years and provides more than 16,000 square feet of office space for 45 full time employees. (Ongoing costs: $0) Performance Results 0 0 Updating the rented space at Elwell Court will provide employees with a safe and comfortable environment while also complying to the American Disability Act (ADA) requirements. 422 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES FIBER OPTICS FUND Description In 1996, the City built a dark fiber ring around Palo Alto 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. This service excludes the transmitters, receivers, and data itself, which are owned and operated by each customer. Accomplishments • Added new fiber conduit on University Avenue as part of the Upgrade Downtown project. • Installed new services for Stanford University offsite facilities and other customers in Stanford Research Park. • Installed public Wi-Fi to unserved City facilities, including community areas in the Cubberley and Lucie Stern community centers, and Baylands Golf Links. ▪ Reviewed bid proposals 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. ▪ 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. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 423 UTILITIES • 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. • Develop a new dedicated fiber ring for city substations to enhance reliability and security. • Retain a management consultant to develop a business case for a FTTN/FTTP network and prepare a detailed engineering design of fiber expansion to support AMI, internal wireless communication network, and other city services. • 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, Multi -unit Dwelling and One Touch Make Ready). ▪ Install fiber from Dahl Reservoir to Montebello Reservoir to enable full remote -control valves at Montebello and improve radio coverage in the foothills area for emergency response. Goals and Objectives GOAL Increase the value of fiber utility services to customers. Objectives: ▪ Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. • Manage costs and add new dark fiber license agreements with commercial customers. GOAL 2 Improve capacity and reliability of the Dark Fiber System. Objectives: ▪ Ensure sufficient fiber optic cables are available to meet future City and customer needs. ▪ Make system enhancements to prevent damage from outside sources and improve reliability. 424 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Number of Customer Accounts (Fiber) 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 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of commercial fiber connections completed Description Purpose Status Workload V 228 198 238 207 215 This measure shows the growth of the Fiber Enterprise based on customers and connections. Estimates are based on analyzing the number of upcoming developments, anticipating how many customers would sign on for Fiber, and taking into account how many existing connections may result in disconnections such as companies leaving. Some customers may also 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. Based on seven connections currently in the pipeline and the anticipation for Stanford to increase their Fiber connections (new hospital, housing units, etc.) the estimated connections for FY 2020 is 215. easures FY 2017 FY 2018 FY 2019 Actuals Actuals Adopted FY 2019 FY 2020 Estimated Adopted Number of Wholesale re -sellers 110 12 93 13 110 14 110 14 98 15 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 425 UTILITIES 3udget Summary FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget Dollars by Division CIP Fiber Optics Fund 458,664 1,047,968 1,650,000 Fiber Optics Administration 174,885 188,357 748,831 Fiber Optics Customer Service 515,324 678,580 1,170,484 Fiber Optics Operations and 1,236,236 1,462,572 596,169 Maintenance Total 2,385,108 3,377,476 4,165,484 Dollars by Category Salary & Benefits Healthcare 150,743 163,825 163,151 Other Benefits 18,999 24,736 26,007 Overtime 11,593 21,055 24,874 Pension 209,591 242,846 251,105 Salary 825,396 1,007,041 955,812 Workers' Compensation 1,166 666 19,047 Total Salary & Benefits 1,217,489 1,460,169 1,439,997 Allocated Charges 438,939 542,597 575,882 Contract Services 134,006 161,241 454,646 Facilities & Equipment 2,457 General Expense 3,161 2,430 13,900 Operating Transfers -Out 103,915 129,531 113,684 Rents & Leases 73,038 75,375 79,326 Supplies & Material 8,738 9,000 Transfer to Infrastructure 13,756 5,700 Capital Improvement Program 400,805 991,695 1,476,592 Total Dollars by Expense 2,385,108 Category 3,377,476 4,165,484 FY 2020 Adopted Budget 1,525,441 919,370 1,241,621 639,500 4,325,932 171,660 29,786 25,521 358,230 967,733 30,967 1,583,895 747,422 454,646 2,457 12,000 102,176 82,360 9,000 1,331,975 4,325,932 FY 2020 Change $ FY 2020 Change % (124,559) (7.5)% 170,539 22.8% 71,136 6.1% 43,331 7.3% 160,448 3.9% 8,508 5.2% 3,778 14.5% 647 2.6% 107,125 42.7% 11,921 1.2% 11,920 62.6% 143,899 10.0% 171,540 29.8% - % - % (1,900) (13.7)% (11,508) (10.1)% 3,034 3.8% - % - % (144,616) (9.8)% 160,448 3.9% Revenues Charges for Services 28,052 37,224 - -% Charges to Other Funds 135,895 -% Net Sales 4,526,098 4,356,872 4,989,512 4,594,824 (394,687) (7.9)% 426 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary Other Revenue Return on Investments Total Revenues FY 2017 Actuals 1,181 499,412 5,054,743 FY 2018 Actuals 66,032 582,095 5,178,117 FY 2019 Adopted Budget 200,000 366,400 5,555,912 FY 2020 Adopted Budget 200,000 749,500 383,100 104.6% 5,544,324 (11,587) (0.2)% FY 2020 Change $ FY 2020 Change % -% Positions by Division CIP Fiber Optics Fund 0.79 0.79 0.79 0.79 -% Fiber Optics Customer Service 2.90 3.68 3.68 3.58 (0.10) (2.72)% Fiber Optics Operations and 3.13 3.13 3.13 3.13 - -% Maintenance Total Staffing Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Business Analyst 6.82 7.60 7.60 7.50 (0.10) (1.32)% FY 2017 Actuals 0.10 0.20 FY 2018 Actuals 0.20 0.20 0.05 0.05 FY 2019 Adopted Budget 0.20 0.20 FY 2020 Adopted Budget 0.20 0.20 0.05 0.05 FY 2020 Change FTE FY 2020 Salary 14,197 39,012 9,745 0.20 0.30 0.30 0.30 41,843 Electric Project Engineer 0.05 0.05 0.05 0.45 0.40 60,801 Manager Utilities Compliance 0.10 0.10 0.10 0.10 - 18,924 Manager Utilities Credit & Collection Manager Utilities Program Services 0.20 0.20 0.20 0.20 0.40 0.40 0.40 0.40 61,260 29,956 Manager Utilities 1.00 1.00 1.00 1.00 150,072 Telecommunications Power Engineer 0.40 0.40 0.40 (0.40) Senior Electrical Engineer Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber - Lead Utilities Key Account Representative 0.05 2.00 1.00 0.05 0.05 2.00 2.00 1.00 1.00 0.70 0.80 0.05 9,262 2.00 1.00 0.80 0.80 215,541 115,314 87,017 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 427 UTILITIES Staffing Utilities Locator Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 FY 2020 Adopted Adopted FY 2020 Budget Budget Change FTE FY 2020 Salary Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 0.03 6.48 0.03 6.78 0.03 6.78 0.34 0.82 0.82 6.82 7.60 7.60 0.03 6.78 0.72 2,684 — 855,628 (0.10) 73,587 7.50 (0.10) 929,215 428 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation Prior Year Budget 7.60 4,165,484 Positions Expenditures Revenues Net Fiber Optics Fund 5,555,912 (1,390,428) One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 savings) One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Return on Investments Rents & Leases Expenditures Fiber Optics Revenue (Rate Increase of 4.5% for EDF-1) Capital Improvement Program General Fund Cost Allocation Plan Liability Insurance Allocated Charges Utilities Administration Allocated Charges Adjustments to Costs of Ongoing Activities (12,661) 1,938 7,590 (12,661) 1,938 7,590 — (3,133) — (3,133) 64,370 39,265 38,500 3,034 (149,688) 83,150 2,261 84,356 165,246 383,100 (394, 687) (11,587) 64,370 39,265 38,500 (383,100) 3,034 394,687 (149,688) 83,150 2,261 84,356 176,834 Total FY 2020 Base Budget 5,544,324 (1,216,727) Budget Proposals 1 Resource Management Administrative Staffing Realignment 2 Engineering Staffing Alignment Budget Changes (0.10) (0.10) (6,061) 4,396 (1,665) (6,061) 4,396 (1,665) Total FY 2020 Adopted Budget 7.50 4,325,932 5,544,324 (1,218,392) UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 429 111E llr 3udget Adjustments Budget Adjustmen Positions Expenditures Revenues Net Fiber Optics Fund 1 Resource Management Administrative Staffing Realignment This ongoing action will eliminate 0.10 FTE vacant Project Specialist position in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Program Assistant II position; eliminate one 1.0 FTE Administrative Associate II position, one 0.48 FTE Project Specialist position, and one vacant 0.48 FTE Project Specialist position in the Utilities Department. Currently the Utilities Sustainability and Efficiency programs rely on hourly employees to provide regular customer program support; however, the hourly positions have been difficult to fill on an extended basis. This action will allow more continuity of internal and external support for the Sustainability and Efficiency programs and will enable staff development for succession planning purposes throughout the Resource Management Division. (Ongoing savings: $6,500) Performance Results 0 0 0 The full-time Program Assistant II position will streamline customer support and service delivery, while providing administrative support for these programs. 2 Engineering Staffing Alignment This ongoing action will reclassify 0.40 FTE Power Engineer positions to Electric Project Engineer positions in this fund for a net zero FTE change as a part of the Utilities Department engineering staff alignment. The department -wide reclassification of two 1.0 FTE Power Engineer positions to two 1.0 FTE Electric Project Engineers will align with current workload needs to meet the City's sustainability goals. These positions are partially funded in the Electric, Fiber, and Water funds. The Electric Project Engineer position requires a Professional Engineering (PE) license and is qualified to work independently on electric engineering projects with minimal guidance from concept through design, construction and closeout of the project. The Power Engineer position does not require a PE and works under the supervision of a Senior Electrical Engineer. This action facilitates retention of engineering staff and enhances succession planning. (Ongoing costs: $4,500) Performance Results 0 0 0 This action assists the Utilities Department's Strategic Plan goal to recruit and retain high performing employees, preventing loss of institutional knowledge, and mitigating service impact to customers. 430 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 ▪ Continued to implement Carbon Neutral Gas Plan by buying carbon offsets equal to Palo Alto's annual gas use as a transitional measure while focusing on reducing natural gas use. ▪ Began a prepaid natural gas purchase program with Munigas that will save gas consumers over $1.0M per year. ▪ Advocated for Palo Alto's interests in PG&E Gas Transmission and Storage rate case, achieved savings in certain transmission costs. ▪ Completion of the construction of approximately 19,500 linear feet of natural gas mains and 370 natural gas service pipelines under the Gas Main Replacement (GMR) 22 and Upgrade Downtown projects. ▪ Completed design of the Acrylonitrile Butadiene Styrene (ABS)/Tenite natural gas service replacement project to replace approximately 130 natural gas service pipelines at various locations within the City. ▪ Completed design on Phase II of the Crossbore Gas Safety Program to inspect sanitary sewer laterals for potential damage during natural gas pipeline installation. ▪ Began design of the Gas Main Replacement 23 project within business districts to replace approximately 27,000 linear feet of natural gas mains and 350 natural gas service pipelines made of Polyvinyl Chloride (PVC). UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 431 Initiatives • Complete construction of the Acrylonitrile Butadiene Styrene (ABS)/Tenite natural gas service replacement project to replace approximately 130 natural gas service pipelines at various locations within the City. • Begin construction of Gas Main Replacement 23 project within business districts to replace approximately 27,000 linear feet of natural gas mains and 350 natural gas service pipelines made of Polyvinyl Chloride (PVC). ▪ Begin work on Phase II of the Crossbore Gas Safety Program to inspect high priority sanitary sewer laterals for the presence of natural gas pipelines. ▪ Complete an updated natural gas utility cost of service study; the previous study was conducted in 2012. ▪ Explore local carbon offset project (refrigerant recycling). • Launch new gas efficiency programs and resources for residents and small businesses. 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 PVC 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. 432 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Key Performance ti easures 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. Percentage of Grade 1 leaks responded to within 24 hours Description Purpose Status GAS SAFETY Goal Objective Percentage of gas system surveyed by walking Percentage of gas system surveyed by mobile (vehicle) Description Purpose Status FY 2017 Actuals 100% FY 2018 Actuals 100% FY 2019 Adopted 100% FY 2019 Estimated 100% FY 2020 Adopted 100% 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. Provide safe and efficient delivery of natural gas to our customers. Complete a walking gas leak survey for 50 percent of the City and a mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. FY 2017 Actuals 0% FY 2018 Actuals 100% FY 2019 Adopted 100% FY 2019 Estimated 50% FY 2020 Adopted 50% 100% 100% 100% 100% 100% 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 some gas service lines (services in the business district) are conducted annually. To ensure the safety of all who live and work in Palo Alto and to comply with Federal DOT requirements. The department did not perform a walking survey in 2017 due to staffing constraint. The department is meeting the requirements and repairing all discovered gas leaks in a timely manner. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 433 UTILITIES Number of Customer Accounts (Gas) 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. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Natural gas savings achieved annually through efficiency programs (therms) Description Purpose Status Workload V 228,707 249,725 301,000 301,000 316,000 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. ensures FY 2017 FY 2018 Actuals Actuals FY 2019 Adopted FY 2019 Estimated FY 2020 Adopted Number of gas leaks repaired 23,637 82 23,395 81 23,664 50 23,664 90 23,665 80 434 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Division CIP Gas Fund 2,694,478 5,504,869 5,567,183 3,342,737 (2,224,446) (40.0)% Gas Administration 10,476,335 11,065,620 12,069,893 13,182,008 1,112,116 9.2% Gas Customer Service 1,440,930 1,529,936 1,779,485 1,911,680 132,195 7.4% Gas Demand Side Management 855,204 828,561 1,547,073 1,567,605 20,532 1.3% Gas Engineering (Operating) 354,827 350,902 561,931 670,487 108,556 19.3% Gas Operations and Maintenance 4,321,176 4,673,257 6,632,739 7,101,687 468,948 7.1% Gas Resource Management 13,129,316 13,277,736 15,398,027 16,798,537 1,400,510 9.1% Total 33,272,265 37,230,881 43,556,331 44,574,742 1,018,411 2.3% Dollars by Category Salary & Benefits Healthcare 905,632 883,093 1,089,891 1,143,407 53,515 4.9% Other Benefits 94,385 120,687 153,760 176,172 22,412 14.6% Overtime 241,406 200,797 193,144 198,165 5,022 2.6% Pension 1,234,331 1,333,372 1,571,349 2,310,105 738,756 47.0% Retiree Medical 594,708 625,662 667,617 687,645 20,028 3.0% Salary 3,484,177 4,151,790 5,569,839 5,432,855 (136,984) (2.5)% Workers' Compensation 101,734 90,119 124,864 186,916 62,052 49.7% Total Salary & Benefits 6,656,373 7,405,521 9,370,463 10,135,265 764,802 8.2% Allocated Charges 2,771,186 2,690,914 4,328,918 5,033,119 704,202 16.3% Contract Services 896,927 617,044 2,463,313 2,463,313 - -% Debt Service 226,747 203,683 802,615 802,615 - -% Equity Transfer 6,726,000 6,699,000 6,563,000 7,106,000 543,000 8.3% Facilities & Equipment 2,027 19,039 19,039 -% General Expense 465,031 421,873 769,134 762,991 (6,143) (0.8)% Operating Transfers -Out 457,658 972,491 640,642 410,403 (230,239) (35.9)% Rents & Leases 713,115 735,359 759,870 851,539 91,669 12.1% Supplies & Material 324,485 344,184 488,816 488,816 - -% Transfer to Infrastructure 71,969 5,700 - - - -% Utility Purchase 12,562,932 12,921,050 14,671,556 16,012,329 1,340,773 9.1% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 435 UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2017 Actuals 1,399,844 FY 2018 Actuals 4,212,033 FY 2019 Adopted Budget 2,678,965 FY 2020 Adopted Budget FY 2020 Change $ 489,312 (2,189,653) 33,272,265 37,230,881 43,556,331 44,574,742 1,018,411 Revenues Charges for Services 24,303 28,560 20,000 20,000 Charges to Other Funds 219,023 115,229 98,072 100,622 2,550 2.6% Net Sales 35,214,383 35,794,564 36,160,635 37,278,530 1,117,895 3.1% Other Revenue 957,753 1,109,304 1,091,935 1,124,303 32,368 3.0% Return on Investments 506,216 568,475 526,300 802,300 276,000 52.4% Total Revenues 36,921,679 37,616,132 37,896,942 39,325,755 1,428,813 3.8% FY 2020 Change % (81.7)% 2.3% -% Positions by Division CIP Gas Fund 17.10 15.80 15.80 15.80 -% Gas Customer Service 8.78 9.03 9.13 9.03 (0.10) (1.10)% Gas Demand Side Management 1.34 1.94 1.54 1.54 - -% Gas Engineering (Operating) 1.40 1.40 1.40 1.40 - -% Gas Operations and Maintenance 22.43 23.98 24.30 24.30 -% Gas Resource Management 1.50 0.96 1.66 1.76 0.10 6.03% Total 52.55 53.11 53.83 53.83 - -% Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations FY 2017 Actuals 0.23 FY 2018 Actuals 0.23 FY 2019 Adopted Budget 0.23 FY 2020 Adopted Budget 0.23 FY 2020 Change FTE FY 2020 Salary 15,229 0.75 0.85 0.85 0.60 (0.25) 42,592 0.05 0.05 0.20 0.20 0.05 0.05 0.20 0.20 8,849 39,012 0.20 0.20 0.20 0.20 38,979 0.15 0.15 0.15 0.15 - 32,592 436 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification Assistant Director Utilities/Resource Management Business Analyst Cathodic Protection Technician Assistant FY 2017 Actuals 0.25 1.28 FY 2018 Actuals 0.25 1.48 1.00 1.00 FY 2019 Adopted Budget 0.25 1.15 FY 2020 Adopted Budget 0.25 1.15 1.00 1.00 FY 2020 Change FTE FY 2020 Salary 50,196 160,397 95,886 Cathodic Technician 1.00 1.00 1.00 1.00 - 117,717 Cement Finisher 0.25 0.68 0.68 0.68 - 58,529 Contracts Administrator 0.10 0.10 0.10 0.10 - 11,754 Coordinator Utilities Projects 1.26 1.26 1.26 1.26 130,462 Customer Service Representative 1.62 1.87 1.87 1.87 131,557 Customer Service Specialist 0.68 0.68 0.68 0.68 52,606 Customer Service Specialist -Lead 0.58 0.58 0.58 0.58 - 47,991 Engineer 2.00 2.00 2.00 2.00 - 238,662 Engineering Manager - Electric 0.15 0.15 0.15 0.15 - 30,841 Engineering Manager -WGW 0.33 0.33 0.33 0.33 64,597 Engineering Technician III 0.70 0.70 0.70 0.70 62,460 Equipment Operator 0.43 - - - Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead 3.20 3.20 0.80 0.80 3.20 - 325,012 0.80 86,944 Gas System Technician II 2.90 Heavy Equipment Operator 2.52 2.52 2.52 2.52 - 226,093 Heavy Equipment Operator 0.65 0.65 0.65 0.65 61,508 Install/Repair Inspector, Field Services 1.42 1.42 1.42 1.42 136,732 Maintenance Mechanic -Welding 1.00 1.00 1.00 1.00 - 95,789 Manager Customer Service 0.33 0.33 0.33 0.33 - 50,052 Manager Treasury, Debt& 0.10 0.10 0.10 0.10 14,901 Investments Manager Utilities Compliance 0.25 0.25 0.25 0.25 47,310 Manager Utilities Credit & 0.15 0.15 0.15 0.15 - 22,973 Collection Manager Utilities Operations WGW 0.20 0.20 0.20 0.20 35,427 Manager Utilities Program Services 0.20 0.20 0.20 0.20 29,956 Meter Reader 1.98 1.98 1.98 1.98 - 130,840 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 437 UTILITIES Staffing Job Classification Meter Reader -Lead Principal Business Analyst Program Assistant I Program Assistant II Project Engineer Resource Planner Restoration Lead SCADA Technologist Senior Business Analyst Senior Engineer Senior Mechanic Senior Resource Planner Senior Utilities Field Service Representative FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 1.00 1.00 1.00 0.65 (0.05) 0.65 0.43 0.43 0.43 0.20 0.20 0.20 0.66 0.66 0.99 2.70 2.70 2.70 0.33 0.33 0.33 0.30 0.46 0.46 0.41 0.41 0.41 FY 2020 Adopted Budget 0.33 0.33 0.33 0.25 1.00 0.45 0.43 0.20 0.99 2.70 0.33 0.56 FY 2020 Change FTE FY 2020 Salary 23,329 58,248 23,767 0.25 19,354 128,437 (0.20) 57,521 40,238 27,391 - 146,869 - 438,539 33,189 0.10 89,696 0.41 - 42,745 Substation Electrician 0.10 0.10 0.10 0.10 11,756 Utilities Engineer Estimator 0.85 0.85 0.85 0.85 93,179 Utilities Field Services 1.75 1.75 1.75 1.75 170,561 Representative UtilitieslnstallRepair-Lead-Welding 1.30 1.30 1.30 1.30 - 137,991 Certified Utilities Install Repair -Welding 1.95 1.95 1.95 1.95 178,386 Certified Utilities Install/Repair 3.85 3.85 3.85 3.85 - 365,894 Utilities Install/Repair Assistant 0.65 0.65 0.65 0.65 - 52,393 Utilities Install/Repair-Lead 1.98 1.98 1.98 1.98 190,111 Utilities Key Account 0.45 0.50 0.50 0.50 - 54,386 Representative Utilities Locator 0.29 0.29 0.29 0.29 - 25,943 Utilities Marketing Program 0.70 1.00 0.70 0.90 0.20 92,989 Administrator Utilities Safety Officer 0.20 0.20 0.20 0.20 25,692 Utilities Supervisor 2.37 2.37 2.37 2.37 - 345,536 Water System Operator II 0.66 0.66 0.66 0.66 - 59,193 Sub -total: Full -Time Equivalent Positions 49.68 51.14 51.54 51.64 0.10 5,627,779 438 UTILITIES • : ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Staffing Temporary/Hourly Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 Budget Change FTE FY 2020 Salary 2.88 1.97 2.29 2.19 (0.10) 122,813 Total Positions 52.55 53.11 53.83 53.83 5,750,591 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 439 UTILITIES 3udget Reconciliation I Positions Expenditures Revenues Net Gas Fund Prior Year Budget 53.83 43,556,331 37,896,942 5,659,390 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Gas Customer Sales Revenue (5% Rate Increase) Return on Investments Transfer to the Electric Fund Connection Charge (GS -80017) Charges to Other Funds Transfer to the Water Fund Rents & Leases Expenditure Alignment Equity Transfer to the General Fund Gas Commodity Purchases Expenditure Capital Improvement Program General Fund Cost Allocation Plan Landscape Maintenance Contract Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Services Allocated Charges Stormwater Management Allocated Charges Utilities Administration Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Adjustments to Costs of Ongoing Activities (79,311) 12,708 49,760 — (16,843) 587,962 253,748 248,700 (180,000) 4,429 24,217 543,000 1,340,774 (2,565,638) 58,942 254 8,612 3,925 122 13 631,658 1,117, 895 276,000 32,368 2,550 (79,311) 12,708 49,760 (16,843) 587,962 253,748 248,700 (1,117,895) (276,000) (180,000) (32,368) (2,550) 4,429 24,217 543,000 1,340,774 (2,565,638) 58,942 254 8,612 3,925 122 13 631,658 (8,035) (8,035) 952,683 1,428,813 (476,130) Total FY 2020 Base Budget 39,325,755 5,166,417 440 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation Budget Proposals 1 Resource Management Program Administration Staffing Realignment 2 Resource Management Administrative Staffing Realignment 3 Resource Management Resource Planning Staffing Realignment 4 Elwell Court Improvements Budget Changes (7,446) (0.10) (1,672) (7,446) (1,672) 0.10 24,236 — 24,236 0.00 67,452 82,570 67,452 82,570 Total FY 2020 Adopted Budget - 53.83 44,574,742 39,325,755 5,248,987 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 441 UTILITIES 3udget Adjustments Positions Expenditures Revenues Net Gas Fund 1 Resource Management Program Administration Staffing Realignment 0.00 (7,446) 0 (7,446) This ongoing action will eliminate 0.20 FTE Resource Planner positions and add 0.20 FTE Utility Marketing Program Administrator positions in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Utility Marketing Program Administrator and eliminate two vacant 0.5 FTE vacant Resource Planner positions in the Utilities Department. Adding 1.0 FTE Utility Marketing Program Administrator will facilitate overall energy program management; this need has grown since the City adopted energy efficiency requirements beyond the State minimums. Since the City is now utilizing 100% renewable energy for electricity commodity purchases, the focus for carbon reduction efforts has shifted from electric commodity purchases to expanding the use of electrification throughout the City from other utility sources. (Ongoing savings: $8,000) Performance Results 0 0 0 This action will help streamline energy program management, better achieve the City's sustainability goals, and generate cost savings. 2 Resource Management Administrative Staffing Realignment - -0.10 (1,672) (1,672) This ongoing action will eliminate 0.25 FTE Administrative Associate II, 0.10 FTE Project Specialist, and add 0.25 Program Assistant II in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Program Assistant II position; eliminate one 1.0 FTE Administrative Associate II position, one 0.48 FTE Project Specialist position, and one vacant 0.48 FTE Project Specialist position in the Utilities Department. Currently the Utilities Sustainability and Efficiency programs rely on hourly employees to provide regular customer program support; however, the hourly positions have been difficult to fill on an extended basis. This action will allow more continuity of internal and external support for the Sustainability and Efficiency programs and will enable staff development for succession planning purposes throughout the Resource Management Division. (Ongoing savings: $600) Performance Results 0 0 0 The full-time Program Assistant II position will streamline customer support and service delivery, while providing administrative support for these programs. 3 Resource Management Resource Planning Staffing Realignment 0.10 lo 24,236 AMC 24,236 This ongoing action will add 0.10 FTE Senior Resource Planner position in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing is commensurate with current workload needs and meet the City's sustainability goals. This action will increase one vacant 0.5 FTE Senior Resource Planner position to 1.0 FTE Senior Resource Planner in the Utilities Department. The Resource Management Division manages the City's electric, water, and gas supply contracts, which included annual utility commodity purchases of approximately $90 million for electric, $22 million for water, and $15 million for gas. Attracting and retaining experienced high-level talent across multiple utilities is important; the City competes with other Community Choice Aggregators (CCAs) in the Electricity industry to recruit in the Bay Area. Adding a full-time Senior Resource Planner will enable the team to implement tasks under the Sustainability and Climate Action Plan while preparing for anticipated Senior Resource Planner retirements expected in the next few years. (Ongoing costs: $25,300) 442 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Adjustments ud•et Adjustments Positions Expenditures Revenues Net Gas Fund Performance Results The full-time Senior Resource Planner will enhance the City's ability to pursue the City's sustainability and carbon reduction goals, without diverting staffing resources from core functions. 4 Elwell Court Improvements IIMM 0.00 67,452 0 im 67,452 This one-time action will increase rental expenses for one year on office space rented and occupied by staff from the Utilities Department at Elwell Court. This increase will fund the costs of renovation and associated moving expenses. Under the current lease agreement, the tenant, the City of Palo Alto, is responsible for improvements and repairs within the rented space. While minor improvements have been performed on an as -needed basis, renovations are needed to address the worn out interior and to bring the space in compliance with the American Disability Act (ADA) requirements. Elwell has been rented for over 20 years and provides more than 16,000 square feet of office space for 45 full time employees. (Ongoing costs: $0) Performance Results Updating the rented space at Elwell Court will provide employees with a safe and comfortable environment while also complying to the American Disability Act (ADA) requirements. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 443 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 ▪ Completed construction of Sanitary Sewer Replacement Project (SSR 28) Part A to replace approximately 477 linear feet of sewer main pipelines for the Jr. Museum and Zoo. ▪ Completed design and solicitation package of Sanitary Sewer Replacement Project (SSR 28) Part B to replace approximately 6,000 linear feet of sewer main pipelines on Oregon Avenue and rehabilitate 2,000 linear feet of sewer main pipelines on lower Page Mill Road and Colorado Avenue. ▪ Started design of Sanitary Sewer Replacement Project 29 (SSR 29) to replace approximately 10,000 linear feet of sewer main pipelines in the Charleston Meadows neighborhood. ▪ Updated Utility Standards for wastewater specifications and details. 444 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Initiatives • Complete construction of Sanitary Sewer Replacement Project SSR 28 Part B to replace approximately 6,000 linear feet of sewer main pipelines on Oregon Avenue and rehabilitate 2,000 linear feet of sewer main pipelines on lower Page Mill Road and Colorado Avenue. ▪ Complete design of Sanitary Sewer Replacement Project 29 (SSR29) to replace approximately 10,000 linear feet of sewer main pipelines in the Charleston Meadows neighborhood. ▪ Solicit proposals and perform evaluation of replacement software for Wastewater Enterprise Asset Management System. • Update the wastewater utility's cost of service study. 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 2020 ADOPTED OPERATING BUDGET 445 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 2017 Actuals 61 19% FY 2018 Actuals 134 19% FY 2019 Adopted 75 18% FY 2019 Estimated 75 19% FY 2020 Adopted 75 18% 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 3,528, laterals of 18,141 in the City. 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 2017 Actuals 22,216 100 94% FY 2018 Actuals 21,979 65 98% FY 2019 Adopted 22,010 63 100% FY 2019 Estimated 21,979 61 100% FY 2020 Adopted 22,010 58 100% 88% 85% 89% 86% 86% 1.20% 0.04% 1.50% 1.00% 1.00% 446 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary I FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Division CIP Wastewater Collection Fund 10,265,576 2,948,288 6,631,085 8,257,990 1,626,905 Wastewater Collection Administration Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Total 2,379,821 2,024,750 2,648,640 3,038,712 390,072 274,932 283,291 332,034 355,693 23,660 FY 2020 Change % 24.5% 14.7% 7.1% 291,893 345,136 479,537 560,183 80,645 16.8% 11,149,370 12,279,116 13,783,976 15,097,480 1,313,504 9.5% 24,361,592 17,880,581 23,875,272 27,310,057 3,434,785 14.4% Dollars by Category Salary & Benefits Healthcare 541,581 530,834 621,177 659,170 37,993 6.1% Other Benefits 50,285 65,624 78,258 88,978 10,720 13.7% Overtime 250,958 204,273 150,985 154,911 3,926 2.6% Pension 673,275 748,942 867,095 1,271,815 404,720 46.7% Retiree Medical 136,521 143,626 259,629 267,418 7,789 3.0% Salary 2,741,131 2,238,681 3,050,134 3,192,081 141,947 4.7% Workers' Compensation 31,589 19,139 68,779 104,473 35,695 51.9% Total Salary & Benefits 4,425,340 3,951,119 5,096,057 5,738,846 642,789 12.6% Allocated Charges 918,413 1,173,511 2,540,312 3,043,020 502,707 19.8% Contract Services 114,936 95,622 248,986 248,986 - -% Debt Service 42,568 38,190 129,001 129,001 - -% Facilities & Equipment 214 - 12,828 12,828 - -% General Expense 59,133 67,985 125,420 122,900 (2,520) (2.0)% Operating Transfers -Out 414,853 442,062 294,055 274,068 (19,987) (6.8)% Rents & Leases 396,092 432,531 419,562 480,121 60,558 14.4% Supplies & Material 272,399 270,575 380,618 380,618 - -% Transfer to Infrastructure 50,002 - - - - -% Utility Purchase 8,390,646 9,559,183 10,276,371 11,233,922 957,551 9.3% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 447 UTILITIES Capital Improvement Program Total Dollars by Expense Category 3udget Summary FY 2017 Actuals 9,276,997 24,361,592 FY 2018 Actuals 1,849,801 17,880,581 FY 2019 Adopted Budget 4,352,062 23,875,272 FY 2020 Adopted Budget 5,645,748 27,310,057 Revenues Charges for Services 20,955 22,450 10,000 10,000 Charges to Other Funds 30,107 30,107 30,890 31,693 803 2.6% Net Sales 18,237,556 18,026,146 19,835,873 21,106,047 1,270,174 6.4% Other Revenue 245,565 229,212 1,069,995 1,082,534 12,539 1.2% Return on Investments 215,909 169,663 266,500 297,700 31,200 11.7% Total Revenues 18,750,093 18,477,578 21,213,257 22,527,974 1,314,716 6.2% FY 2020 Change $ 1,293,687 3,434,785 FY 2020 Change % 29.7% 14.4% 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 Business Analyst 0.75 12.52 12.52 2.19 2.22 1.40 1.40 13.06 12.86 12.52 12.52 2.22 2.22 1.40 1.40 13.02 13.02 29.17 29.00 29.16 29.16 FY 2017 Actuals 0.23 0.40 0.15 0.10 Cement Finisher 0.50 Contracts Administrator 0.05 FY 2018 Actuals FY 2019 Adopted Budget 0.23 0.40 0.23 0.40 0.15 0.15 0.10 0.75 0.76 0.05 0.10 0.75 0.76 0.05 FY 2020 Adopted Budget 0.23 0.40 0.15 0.10 0.75 0.76 0.05 FY 2020 Change FTE - % - % - % _OA FY 2020 Salary 15,229 28,394 29,234 21,728 104,607 65,415 5,877 448 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification Coordinator Utilities Projects Customer Service Representative Customer Service Specialist -Lead Engineer FY 2017 Actuals FY 2018 Actuals 1.10 1.10 1.20 1.45 0.25 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 - - - - - Heavy Equipment Operator 0.23 0.23 0.23 0.23 - 20,636 FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Salary Heavy Equipment Operator - Install/Repair Industrial Waste Investigator 0.50 0.50 0.50 0.50 49,547 1.10 1.45 0.25 1.00 0.15 0.34 0.45 1.10 1.45 0.25 1.00 0.15 0.34 0.45 113,895 102,009 20,686 119,331 30,841 66,555 40,153 3.15 3.15 3.15 3.15 274,831 Inspector, Field Services 1.68 1.68 1.68 1.68 - 161,768 Maintenance Mechanic -Welding 0.20 0.20 0.20 0.20 - 19,158 Manager Utilities Credit & 0.15 0.15 0.15 0.15 22,973 Collection Manager Utilities Operations WGW 0.30 0.30 0.30 0.30 53,140 Program Assistant I 0.34 0.34 0.34 0.34 - 24,487 Project Engineer 2.00 2.00 2.00 2.00 - 256,874 Restoration Lead 0.26 0.26 0.26 0.26 - 24,330 Senior Engineer 1.30 1.30 1.30 1.30 199,706 Senior Mechanic 0.33 0.33 0.33 0.33 33,189 Utilities Engineer Estimator 0.47 0.47 0.47 0.47 50,559 Utilities Field Services 1.25 1.25 1.25 1.25 - 121,829 Representative Utilities Install Repair -Lead -Welding 0.24 0.24 0.24 0.24 25,475 Certified Utilities Install Repair Welding 0.36 0.36 0.36 0.36 - 32,933 Certified Utilities Install/Repair 4.25 4.25 4.25 4.25 403,909 Utilities Install/Repair-Lead 2.00 2.00 2.00 2.00 - 207,443 Utilities Locator 0.39 0.39 0.39 0.39 34,889 Utilities Safety Officer 0.10 0.10 0.10 0.10 - 12,846 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 449 UTILITIES Staffing Job Classification FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted FY 2020 Budget Change FTE FY 2020 Salary Utilities Supervisor Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 1.72 28.15 1.72 28.40 1.72 28.40 1.72 28.40 233,206 — 3,027,682 1.02 0.60 0.76 0.76 50,662 29.17 29.00 29.16 29.16 — 3,078,344 450 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation T Prior Year Budget 29.16 23,875,272 21,213,257 Positions Expenditures Revenues Net Wastewater Collection Fund 2,662,015 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Wastewater Collection Customer Sales Revenue (7% Rate Increase) Return on Investments Transfer to Water Fund (WS -02014 Water, Gas, Wastewater Utility GIS Data) Rents & Leases Expenditure Alignment Wastewater Treatment Expenses Capital Improvement Program General Fund Cost Allocation Plan Liability Insurance Allocated Charges Printing & Mailing Allocated Charges Public Works Services Allocated Charges Utilities Administration Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Adjustments to Costs of Ongoing Activities (43,849) 7,000 27,409 (43,849) 7,000 — 27,409 (9,440) — (9,440) 334,287 139,883 136,900 4,429 12,471 957,551 1,311,796 129,009 3,430 688 670 382,839 (17,815) 3,396,139 1,270,978 334,287 139,883 136,900 (1,270,978) 31,200 (31,200) 12,539 1,314,717 4,429 12,471 957,551 1,299,257 129,009 3,430 688 670 382,839 (17,815) 2,081,422 Total FY 2020 Base Budget 29.16 4,733,996 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 451 UTILITIES 3udget Reconciliation Net Wastewater Collection Positions Expenditures Revenues Fund Budget Proposals 1 Elwell Court Improvements Budget Changes 48,087 48,087 48,087 48,087 Total FY 2020 Adopted Budget 29.16 27,310,057 22,527,974 4,782,083 .budget Adjustments udget Adjustments Positions Expenditures Revenues Net Wastewater Collection Fund 1 Elwell Court Improvements This one-time action will increase rental expenses for one year on office space rented and occupied by staff from the Utilities Department at Elwell Court. This increase will fund the costs of renovation and associated moving expenses. Under the current lease agreement, the tenant, the City of Palo Alto, is responsible for improvements and repairs within the rented space. While minor improvements have been performed on an as -needed basis, renovations are needed to address the worn out interior and to bring the space in compliance with the American Disability Act (ADA) requirements. Elwell has been rented for over 20 years and provides more than 16,000 square feet of office space for 45 full time employees. (Ongoing costs: $0) Performance Results Updating the rented space at Elwell Court will provide employees with a safe and comfortable environment while also complying to the American Disability Act (ADA) requirements. 452 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 ▪ Updated the business plan to explore the economic feasibility of installing Phase I I I of the recycled water irrigation pipeline to serve the Stanford Research Park. ▪ Completed construction of Water Main Replacement project (WMR 26) project in University Park and Downtown North to replace approximately 13,000 linear feet of water main pipelines, 200 service pipelines, and 40 fire hydrants. ▪ Completed construction of the Water Main Replacement project as part of the Upgrade Downtown project to replace approximately 3,155 linear feet of water main pipelines, 52 service pipelines, and 10 fire hydrants. ▪ Started design of Water Main Replacement project (WMR 27) in the Oak Creek and Greenmeadow neighborhoods to replace approximately 10,000 linear feet of water main pipelines. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 453 UTILITIES ▪ Completed the geological investigation of the foundation leaks at the Mayfield Tank and provided a report containing results of the subsurface explorations and laboratory testing and recommended repair alternatives. ▪ Completed a survey and geotechnical investigation of the Corte Madera reservoir site. • Completed two transmission valve replacements on Arastradero Road. • Completed the Conceptual Engineering Report (CER) and 25% of the Drawings and Specification for the Corte Madera Reservoir. ▪ Completed seismic work and upgrades for Arastradero, Page Mill, and California Avenue turnouts. ▪ Implemented a water leak policy, applying financial credits to residential and commercial accounts experiencing high bills due to unforeseen leaks. • Completed the second annual water loss audit (SB 555) to the State Water Resource Control Board (SWRCB). Initiatives ▪ Collaborate with Public Works and Santa Clara Valley Water District to complete the Recycled Water Strategic Plan, a comprehensive evaluation of all potential recycled water supply options including non -potable and potable reuse options. • Update Water Integrated Resources Plan and consider future role of recycled water in water supply portfolio. ▪ Update the water utility's cost of service and benchmark studies. • Begin construction of Water Main Replacement project (WMR 27) in the Oak Creek and Greenmeadow neighborhoods to replace approximately 10,000 linear feet of water main pipelines. • Design Water Main Replacement project (WMR 28) in Duveneck, Barron Park, and Charleston Meadows neighborhoods to replace approximately 15,000 linear feet of water main pipelines. ▪ Begin construction of the Corte Madera Reservoir Replacement. ▪ Complete the water system improvement evaluation study and emergency plan study. ▪ Plan for the next reservoir replacement project based on the water system improvement findings of the consultant. • Complete the Old Page Mill transmission main repair and valve installation in the foothills area west of Highway 280. • Begin design of the Mayfield Reservoir Screen Replacement project. ▪ Enhance supervisory control and data acquisition (SCADA) system for the El Camino Real Pump Station and Mayfield Pump Station to improve operational flexibility and system resiliency. 454 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Goals and Objectives GOAL :W 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. Objective: • Increase water conservation and efficiency participation. • Develop programs to facilitate the use of non-traditional, non -potable water resources (e.g. storm water, recycled water, gray water). • Collaborate with the Regional Water Quality Control Plant and the Santa Clara Valley Water District to evaluate multiple water reuse opportunities to meet both near and long-term water demands. Key Performance V ensures PROVIDE SAFE AND CLEAN DRINKING WATER FOR OUR CUSTOMERS Goal Provide safe and clean drinking water for customers. Objective Ensure drinking water meets all regulatory standards. FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 FY 2020 Estimated Adopted Percentage of customer -owned water backflow prevention devices in compliance Description Purpose Status 91% 90% 92% 92% 92% 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 3,979 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 2020 ADOPTED OPERATING BUDGET 455 UTILITIES WATER EFFICIENCY Goal Objective Annual savings achieved through water efficiency programs as a percentage of total sales Description Purpose Status Increase environmental sustainability of the water supply system. Increase water conservation and efficiency participation. FY 2017 Actuals 1.40% FY 2018 Actuals 1.07% FY 2019 Adopted 0.91% FY 2019 Estimated 0.91% FY 2020 Adopted 0.91% The department measures specific savings achieved by the installation of water efficiency improvements through the programs that the City offers through the Santa Clara Valley Water District. The California drought greatly affected the City's water savings numbers 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. However, after the drought ended and rainy seasons resumed, program participation decreased in FY 2018 and leveled off in FY 2019. As program marketing and general drought awareness effort continues, FY 2019 levels are anticipated to to be maintained at acceptable levels of program participation. WATER QUALITY Goal Ensure the provision of safe and clean drinking water for customers. Objective Safe testing of drinking water to meet all regulatory standards. Percentage of samples passed from all sampling stations Description Purpose Status FY 2017 Actuals 100% FY 2018 Actuals 100% FY 2019 Adopted 100% FY 2019 Estimated 100% FY 2020 Adopted 100% 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 areas, 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. 456 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Workload V ensures FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted FY 2019 FY 2020 Estimated Adopted Percent of miles of water mains replaced Number of Customer Accounts (Water) Percent of surveyed rating the quality of the Drinking Water (Water) as "Good" or "Excellent" 0.20% 20,213 88% 2.00% 20,000 87% 1.00% 20,213 88% 0.10% 20,213 88% 1.00% 20,219 88% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 457 UTILITIES 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ Dollars by Division CIP Water Fund 3,453,732 8,504,410 16,043,824 16,973,334 929,510 Water Administration 7,038,937 7,639,414 8,782,413 9,042,889 260,475 Water Customer Service 1,488,960 1,625,334 2,282,720 2,443,155 160,435 Water Engineering (Operating) 355,852 354,598 537,839 641,946 104,107 Water Operations and Maintenance 5,291,117 5,732,995 7,681,920 8,371,072 689,153 Water Resource Management 20,943,416 22,880,271 23,699,431 23,371,160 (328,271) Total 38,572,014 46,737,022 59,028,147 60,843,556 1,815,409 FY 2020 Change % 5.8% 3.0% 7.0% 19.4% 9.0% (1.4)% 3.1% Dollars by Category Salary & Benefits Healthcare 822,738 821,267 958,317 1,021,133 62,815 6.6% Other Benefits 94,370 119,660 142,932 164,802 21,870 15.3% Overtime 231,860 199,089 274,930 282,078 7,148 2.6% Pension 1,165,780 1,246,740 1,428,203 2,091,774 663,571 46.5% Retiree Medical 285,198 300,042 427,827 440,662 12,835 3.0% Salary 4,627,885 4,959,173 5,154,784 5,372,634 217,850 4.2% Workers' Compensation 225,163 92,187 118,581 181,202 62,621 52.8% Total Salary & Benefits 7,452,994 7,738,159 8,505,574 9,554,284 1,048,710 12.3% Allocated Charges 3,212,511 3,702,043 4,516,536 5,220,481 703,945 15.6% Contract Services 155,818 190,454 819,002 819,002 -% Debt Service 1,757,088 1,697,010 3,222,606 3,222,606 - -% Facilities & Equipment - - 16,711 16,711 - -% General Expense 417,045 511,796 667,170 658,077 (9,093) (1.4)% Operating Transfers -Out 317,220 698,113 486,353 136,335 (350,018) (72.0)% Rents&Leases 1,862,485 1,906,700 3,003,388 3,144,502 141,114 4.7% Supplies & Material 413,824 451,691 610,982 610,982 -% Transfer to Infrastructure 84,211 5,700 - - - -% Utility Purchase 20,075,377 21,957,711 22,620,000 22,177,643 (442,357) (2.0)% CapitallmprovementProgram 2,823,442 7,877,646 14,559,826 15,282,934 723,107 5.0% Total Dollars by Expense 38,572,014 46,737,022 59,028,147 60,843,556 1,815,409 3.1% Category 458 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary a_ 1 Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Return on Investments Total Revenues FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % 60,000 60,334 10,000 10,000 - -% 160,766 99,288 81,201 82,690 1,488 1.8% 512,301 500,773 576,632 576,632 - -% 42,740,545 44,595,981 42,357,861 46,831,149 4,473,288 10.6% 244,018 512,436 539,278 548,136 8,858 1.6% 844,915 872,864 931,348 384,228 (547,120) (58.7)% 772,015 869,689 775,300 1,153,200 377,900 48.7% 45,334,560 47,511,365 45,271,620 49,586,035 4,314,415 9.5% Positions by Division CIP Water Fund 9.05 8.03 8.03 8.03 -% Water Customer Service 9.68 9.66 9.66 9.58 (0.08) (0.83)% Water Engineering (Operating) 1.37 1.35 1.35 1.35 - -% Water Operations and Maintenance 25.44 25.34 24.85 24.85 - -% Water Resource Management 2.44 3.52 3.02 3.12 0.10 3.31% Total 47.99 47.90 46.92 46.94 0.02 0.04% Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst 1.73 1.53 1.20 1.20 - 167,371 FY 2017 Actuals 0.23 0.75 0.20 0.20 0.15 0.25 FY 2018 Actuals 0.23 0.65 FY 2019 Adopted Budget 0.23 0.65 0.20 0.20 0.20 0.20 0.15 0.15 0.25 0.25 FY 2020 Adopted Budget 0.23 0.50 0.20 0.20 0.15 0.25 FY 2020 Change FTE FY 2020 Salary 15,229 (0.15) 35,493 39,012 38,979 32,592 50,196 Cement Finisher 0.25 0.56 0.56 0.56 - 48,200 Contracts Administrator 0.10 0.10 0.10 0.10 - 11,754 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 459 UTILITIES Staffing Job Classification Coordinator Utilities Projects Customer Service Representative Customer Service Specialist Customer Service Specialist -Lead Electric Project Engineer Engineer Engineering Manager - Electric Engineering Manager - WGW Engineering Technician III Equipment Operator Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget 1.09 1.09 1.09 1.09 1.56 1.81 1.81 1.81 0.66 0.66 0.66 0.66 0.59 0.59 0.59 0.59 0.30 0.30 1.00 1.00 1.00 0.15 0.15 0.15 0.33 0.33 0.33 0.45 0.45 0.45 1.00 0.15 0.33 1.45 0.31 Gas System Technician II 0.10 Heavy Equipment Operator 1.95 FY 2020 Change FTE FY 2020 Salary 112,860 127,336 51,059 48,818 40,534 119,331 30,841 64,597 40,153 0.80 0.80 0.80 81,253 0.20 0.20 0.20 21,736 1.95 1.95 1.95 174,953 Heavy Equipment Operator 0.20 0.20 0.20 0.20 - 18,742 Install/Repair Inspector, Field Services 1.65 1.65 1.65 1.65 - 158,879 Maintenance Mechanic -Welding 0.80 0.80 0.80 0.80 76,632 Manager Customer Service 0.34 0.34 0.34 0.34 51,569 Manager Utilities Compliance 0.50 0.50 0.50 0.50 94,619 Manager Utilities Credit & 0.15 0.15 0.15 0.15 - 22,973 Collection Manager Utilities Operations WGW 0.50 0.50 0.50 0.50 88,566 Manager Utilities Program Services 0.20 0.20 0.20 0.20 29,956 Meter Reader 2.03 2.03 2.03 2.03 134,144 Meter Reader -Lead 0.34 0.34 0.34 0.34 - 24,036 Power Engineer 0.30 0.30 0.30 (0.30) - Principal Business Analyst 0.33 0.33 0.33 0.33 - 58,248 Program Assistant I 0.33 0.33 0.33 0.33 23,767 Program Assistant II 0.15 0.15 11,613 Project Engineer 2.00 2.00 2.00 2.00 256,874 Resource Planner 0.70 1.20 0.70 0.70 - 89,477 460 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification FY 2017 Actuals Restoration Lead 0.31 SCADA Technologist 0.80 Senior Business Analyst 0.66 Senior Engineer 1.00 Senior Mechanic 0.34 Senior Resource Planner 1.10 Senior Utilities Field Service Representative 0.49 FY 2018 Actuals 0.31 0.80 0.66 1.00 0.34 1.68 FY 2019 Adopted Budget 0.31 0.80 0.99 1.00 0.34 1.68 0.49 0.49 FY 2020 Adopted Budget 0.31 0.80 0.99 1.00 0.34 1.78 FY 2020 Change FTE 0.10 FY 2020 Salary 29,009 109,562 146,869 158,541 34,195 304,190 0.49 - 51,085 Senior Water Systems Operator 2.00 2.00 2.00 2.00 203,431 Substation Electrician 0.40 0.40 0.40 0.40 47,025 Utilities Engineer Estimator 0.43 0.43 0.43 0.43 46,073 Utilities Field Services 1.50 1.50 1.50 1.50 - 146,195 Representative UtilitieslnstallRepair-Lead-Welding 0.46 0.46 0.46 0.46 - 48,828 Certified Utilities Install Repair Welding 0.69 0.69 0.69 0.69 - 63,121 Certified Utilities Install/Repair 1.90 1.90 1.90 1.90 - 180,571 Utilities Install/Repair Assistant 0.35 0.35 0.35 0.35 28,212 Utilities Install/Repair-Lead 1.02 1.02 1.02 1.02 97,936 Utilities Key Account 0.25 0.35 0.35 0.35 - 38,070 Representative Utilities Locator 0.34 0.34 0.34 0.34 - 30,416 Utilities Marketing Program 0.40 0.40 0.40 0.40 41,328 Administrator Utilities Safety Officer 0.15 0.15 0.15 0.15 - 19,269 Utilities Supervisor 2.91 2.91 2.91 2.91 437,920 Water System Operator I 1.00 - - - - - Water System Operator II 3.34 3.34 3.34 3.34 299,554 Sub -total: Full -Time Equivalent 45.26 45.29 44.79 44.89 0.10 5,053,791 Positions Temporary/Hourly 2.73 2.61 2.13 2.05 (0.08) 172,182 Total Positions 47.99 47.90 46.92 46.94 0.02 5,225,974 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 461 UTILITIES 3udget Reconciliation I Positions Expenditures Revenues Net Water Fund Prior Year Budget 46.92 59,028,147 45,271,620 13,756,527 One-time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution General Liability Savings (one-time FY 2019 Savings) Workers' Compensation Savings (one-time FY 2019 Savings) One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Proactive Contributions to City's Unfunded Pension Liability FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability Water Customer Sales Revenue (1% Rate Increase) Water Commodity Purchases Expenditure Return on Investment Transfer to Electric Fund (EL -11014 - Smart Grid Installation) Revenue from Water System Customer Connections (VVS-80013) Transfer From Wastewater and Gas Fund (WS - 02014 Water, Gas, Wastewater Utility GIS Data) Rents & Leases Expenditure Alignment Capital Improvement Program General Fund Cost Allocation Plan Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Services Allocated Charges Stormwater Management Allocated Charges Utilities Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Adjustments to Costs of Ongoing Activities (72,005) 12,068 47,256 — (12,681) — 511,620 229,724 225,700 (442,357) (290,000) 3,899,777 377,900 27,880 8,858 71,471 — 732,973 — (65,240) 9,822 3,898 122 60 553,975 111,642 79,719 — 1,733,129 4,314,415 (72,005) 12,068 47,256 (12,681) 511,620 229,724 225,700 (3,899,777) (442,357) (377,900) (290,000) (27,880) (8,858) 71,471 732,973 (65,240) 9,822 3,898 122 60 553,975 111,642 79,719 (2,581,286) 462 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation Total FY 2020 Base Budget Positions 46.92 Expenditures Revenues 60,748,595 49,586,035 Net Water Fund 11,162,560 Budget Proposals 1 Resource Management Administrative Staffing Realignment 2 Engineering Staffing Alignment 3 Resource Management Resource Planning Staffing Realignment 4 Elwell Court Improvements Budget Changes (0.08) 0.10 0.02 (2,215) 3,297 24,236 69,643 94,960 (2,215) 3,297 24,236 69,643 94,960 Total FY 2020 Adopted Budget 46.94 60,843,556 49,586,035 11,257,521 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 463 UTILITIES 3udget Adjustments Positions Expenditures Revenues Net Water Fund 1 Resource Management Administrative Staffing Realignment -0.08 (2,215) (2,215) This ongoing action will eliminate 0.15 FTE Administrative Associate II, 0.08 Project Specialist, and add 0.15 Program Assistant II in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing levels are commensurate with current workload needs and meet the City's sustainability goals. This action will add one 1.0 FTE Program Assistant II position; eliminate one 1.0 FTE Administrative Associate II position, one 0.48 FTE Project Specialist position, and one vacant 0.48 FTE Project Specialist position in the Utilities Department . Currently the Utilities Sustainability and Efficiency programs rely on hourly employees to provide regular customer program support; however, the hourly positions have been difficult to fill on an extended basis. This action will allow more continuity of internal and external support for the Sustainability and Efficiency programs and will enable staff development for succession planning purposes throughout the Resource Management Division. (Ongoing savings: $1,700) Performance Results © 0 The full-time Program Assistant II position will streamline customer support and service delivery, while providing administrative support for these programs. 2 Engineering Staffing Alignment 0.00 This ongoing action will reclassify 0.30 FTE Power Engineer positions to Electric Project Engineer positions in this fund for a net zero FTE change as a part of the Utilities Department engineering staff alignment. The department -wide reclassification of two 1.0 FTE Power Engineer positions to two 1.0 FTE Electric Project Engineers will align with current workload needs to meet the City's sustainability goals. These positions are partially funded in the Electric, Fiber, and Water funds. The Electric Project Engineer position requires a Professional Engineering (PE) license and is qualified to work independently on electric engineering projects with minimal guidance from concept through design, construction and closeout of the project . The Power Engineer position does not require a PE and works under the supervision of a Senior Electrical Engineer. This action facilitates retention of engineering staff and enhances succession planning. (Ongoing costs: $3,400) Performance Results 0 This action assists the Utilities Department's Strategic Plan goal to recruit and retain high performing employees, preventing loss of institutional knowledge, and mitigating service impact to customers. 3 Resource Management Resource Planning Staffing Realignment 0.10 24,236 0 24,236 This ongoing action will add 0.10 FTE Senior Resource Planner position in this fund as a part of the Resource Management Division department -wide realignment to ensure staffing is commensurate with current workload needs and meet the City's sustainability goals. This action will increase one vacant 0.5 FTE Senior Resource Planner position to 1.0 FTE Senior Resource Planner in the Utilities Department. The Resource Management Division manages the City's electric, water, and gas supply contracts, which included annual utility commodity purchases of approximately $90 million for electric, $22 million for water, and $15 million for gas. Attracting and retaining experienced high-level talent across multiple utilities is important; the City competes with other Community Choice Aggregators (CCAs) in the Electricity industry to recruit in the Bay Area. Adding a full-time Senior Resource Planner will enable the team to implement tasks under the Sustainability and Climate Action Plan while preparing for anticipated Senior Resource Planner retirements expected in the next few years. (Ongoing costs: $25,300) Performance Results 464 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET UTILITIES 3udget Adjustments The full-time Senior Resource Planner will enhance the City's ability to pursue the City's sustainability and carbon reduction goals, without diverting staffing resources from core functions. 4 Elwell Court Improvements Q 69,643 69,643 This one-time action will increase rental expenses for one year on office space rented and occupied by staff from the Utilities Department at Elwell Court. This increase will fund the costs of renovation and associated moving expenses. Under the current lease agreement, the tenant, the City of Palo Alto, is responsible for improvements and repairs within the rented space. While minor improvements have been performed on an as -needed basis, renovations are needed to address the worn out interior and to bring the space in compliance with the American Disability Act (ADA) requirements. Elwell has been rented for over 20 years and provides more than 16,000 square feet of office space for 45 full time employees. (Ongoing costs: $0) Performance Results Updating the rented space at Elwell Court will provide employees with a safe and comfortable environment while also complying to the American Disability Act (ADA) requirements. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 465 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 2020, various one-time items that appeared in the Fiscal Year 2019 Budget, including the $4.0 million reduction, as directed by the City Council, and the addition of one- time funding for the November 2018 City Council Elections, have been removed. This FY Adopted 2020 budget includes various adjustments in the Non -Departmental section, such as: $1.4 million in a reserve to partially offset anticipated costs associated with labor agree- ments and provide resources for new programs anticipated to begin in FY 2020 such as the reopening of the Junior Museum and Zoo; a transfer of $683,000 to the Residential Preferential Parking (RPP) program to offset the operating deficit of that program; $500,000 in a reserve to provide funding for new initiatives focused on employee recruitment and retention; $100,000 to continue the City's efforts responding to Airplane Noise; $50,000 for a Sea Level Rise Vulnera- bility Study; and an ongoing reduction of $50,000 to the City Manager's contingency. Each of these changes is described in greater detail in the following pages. The FY 2020 Proposed Budget also included $300,000 in a Budget Uncertainty Reserve (BUR) that the City Council could use to lessen potential service delivery impacts. The Finance Com- mittee and City Council allocated the entirety of the $300,000 BUR to departments throughout the budget hearings in May and June 2019. The BUR funds have been allocated to: the Human Resources Department for applicant screening technology and automation of performance evaluations ($110,000), the Information Technology Department for contract services ($100,000), the Library Department to maintain Sunday operating hours at the Children's Library ($18,000), and the City Manager's Office for community business engagement ($72,000). The details of these changes can be found in their respective department sections. Since the entirety of the $300,000 BUR was allocated to departments as of the adoption of this budget, it no longer appears as a reserve in the Non -Departmental section. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 467 NON -DEPARTMENTAL 3udget Summary S 1 Dollars by Category Cubberley - Lease Payments to PAUSD Contingent Accounts City Manager City Council City Attorney Human Resources Human Services Resource Allocation Process (HSRAP) Innovations & Special Events Sustainability Budget Operational Reserve Budget Uncertainty Reserve* FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ 5,642,424 5,737,855 6,101,395 6,284,437 183,042 - 250,000 200,000 225,000 125,000 100,000 100,000 50,000 50,000 4,025 10,000 50,000 50,000 FY 2020 Change % 3.0% (50,000) (20.0)% (100,000) (44.4)% 50,000 50,000 100,000 100,000 - (4,000,000) 1,625,899 5,625,899 (141.6)% -% -% Other Contract Services Debt Service General Expense Operating Transfers -Out Rents & Leases Transfer to Infrastructure Total Dollars by Expense 14,112 2,200 120,000 432,150 432,271 612,948 130,186 42,026 89,012 6,538,924 4,674,446 4,450,215 177,506 177,786 177,127 22,859,355 24,800,953 25,172,648 35,798,682 35,877,536 33,448,345 170,000 50,000 (612,948) 91,326 2,314 4,990,118 539,903 177,127 28,961,724 3,789,076 42,975,631 9,527,286 *The entirety of the $300,000 Budget Uncertainty Reserve was allocated to departments as of the adoption of this budget. 41.7% (100.0)% 2.6% 12.1% -% 15.1% 28.5% 468 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET NON -DEPARTMENTAL 3udget Reconciliation Positions Expenditures Revenues Net General Fund Prior Year Budget 33,448,345 33,448,345 One -Time Prior Year Budget Adjustments FY 2019 City Council Election Costs FY 2019 General Fund Structural Reduction One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities City Council Contingency Reduction (CMR #9925, approved 12/17/2018) Sustainability Contingency (FY 2019 Reappropriation) Transfer to Infrastructure Cubberley Lease Payments to PAUSD Property Tax Administration Traffic and Streetlight Electricity Costs Adjustment Transfer to Technology Fund (Technology Surcharge) Transfer to University Avenue Parking Fund Adjustments to Costs of Ongoing Activities (100,000) 4,000,000 3,900,000 (100,000) 100,000 3,789,076 183,042 2,314 (578,232) 28,774 19,500 - 3,200,577 - (100,000) 4,000,000 — 3,900,000 (100,000) 100,000 3,789,076 183,042 2,314 (578,232) 28,774 19,500 3,200,577 Total FY 2020 Base Budget 40,548,922 40,548,922 Budget Adjustments 1 Reserve: Budget Operations Reserve 2 Residential Parking Permit Program Operating Deficit Transfer to RPP Fund 3 Reserve: Recruitment and Retention Initiatives 4 Airplane Noise Funding 5 Sea Level Rise Study Funding 6 Transfer to Business Improvement District Fund 7 City Manager's Contingency Reduction Total Budget Adjustments 1,125, 899 683,810 500,000 100,000 50,000 17,000 (50,000) 2,426,709 1,125,899 683,810 500,000 100,000 50,000 17,000 (50,000) 2,426,709 Total FY 2020 Adopted Budget 42,975,631 42,975,631 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 469 NON -DEPARTMENTAL 3udget Adjustments 1 Reserve: Budget Operations Reserve mil—II0.00 This ongoing action established a reserve for FY 2020 in the amount of $1.4 million for anticipated, but not yet quantified, impacts in the General Fund on an ongoing basis that do not have fully refined costs or financial implications outlined yet. During the development of the FY 2020 budget, a number of initiatives were under evaluation or consideration such as labor negotiations with non -safety, also known as miscellaneous employee groups; one-time start-up costs for projects such as the Junior Museum and Zoo coming online summer 2020; the realignment of staffing and funding in association with the reorganization of departmental resources among Planning and Community Environment, Development Services Departments and the Office of Transportation; and other potential programs the City may undertake in FY 2020. This reserve is intended to proactively set aside some funding for the needs anticipated to arise in FY 2020. As projects and needs are evaluated and funding needs are refined, recommendations for use of this reserve will be brought forward through City Manager Reports for City Council approval. As some of these activities are expected to have ongoing implications, the reserve is recommended to be "ongoing" in recognition of these costs to ensure both near -term and long-term financial planning are holistically analyzed. (Ongoing costs: $2.4 million) 1,125,899 1,125,,899 Performance Results © © 0 This funding supports the City's efforts to recruit and retain a talented workforce; it also provides funding for initiatives that are anticipated to begin in FY 2020. 2 Residential Parking Permit Program Operating Deficit Transfer to RPP Fund r.00 [683,810 �0 683,810 This one-time action transfers $683,000 from the General Fund to the Residential Preferential Parking (RPP) Fund to ensure sufficient resources are available in the RPP Fund. The City's RPP Fund (discussed in greater detail in the Special Revenue Funds section of this document) currently operates at a level significantly below full cost -recovery. The continued administration, operations, and expansion of the RPP program necessitates a transfer from the General Fund in order to ensure sufficient funds are available in FY 2020. It is anticipated that the City's newly created Office of Transportation will review actions necessary to align the RPP program with available resources. Recommendations regarding the long-term viability and fiscal sustainability of the RPP will be brought forward as appropriate. (Ongoing costs: $0) Performance Results 0 This action ensures the continued operation of the Residential Preferential Parking program. 3 Reserve: Recruitment and Retention Initiatives 500,000 0 500,000 This one-time action provides $500,000 in funding for various recruitment/retention initiatives throughout the organization. This funding is in an addition to $250,000 which has been appropriated in the City Manager's Office for the initial expenses, discussed at greater length in that section of this document. This $500,000 represents a reserve that can be used once a more formal plan is developed to offset the General Fund's share of expenses associated with implementing and accomplishing the plan. The City of Palo Alto faces incredible competition for attracting and retaining a high -quality workforce; this funding represents an important commitment to addressing that competition and investing in the City's human capital. Staff anticipates returning to the full City Council with recommendations during FY 2020. In addition, this funding may be recommended to be supplemented by Enterprise Funds funding to maximize resources and appropriately allocate costs. (Ongoing costs: $0) Performance Results This action will maintain the quality of services the City offers through the recruitment and retention of a high -quality workforce. 470 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET NON -DEPARTMENTAL 3udget Adjustments Bud • et Adjustments Positions Expenditures Net Revenues General Fund 4 Airplane Noise Funding 0 100,000 This one-time action provides funding of $100,000 to continue the City's current efforts related to Airplane Noise. Since the inception of the Federal Aviation Administration's (FAA) 'NextGen' initiative, the City of Palo Alto has experienced worsening impacts from airplane noise. This funding will provide resources for technical consultants, legislative consultants, and outside counsel to help advocate for the City's goals and will also ensure that the City continues to participate in regional initiatives such as the 'Santa Clara Santa Cruz Community Roundtable'. (Ongoing costs: $0) Performance Results 0 This action will contribute to the City's efforts to respond to resident concerns regarding airplane noise. 5 Sea Level Rise Study Funding 50,000 This one-time action provides $50,000 to conduct a Sea Level Rise Vulnerability Assessment and begin the development of an adaptation plan. This study will bring the City's ability to analyze Sea Level Rise Vulnerability into alignment with commitments made as part of the Sustainability/Climate Action Plan (S/CAP) and address elements of the Comprehensive Plan and the Local Hazard Mitigation and Adaptation Plan. (Ongoing costs: $0) Performance Results This action represents a significant element of the City's response to climate change. 6 Transfer to Business Improvement District Fund 17,000 Consistent with the Finance Committee recommendation approved on May 28, 2019, this one-time action increases the transfer from the General Fund to the Business Improvement District (BID) Fund to appropriate funding for collection services. As part of the development of the FY 2020 Proposed Budget, funding for collection services was anticipated to be absorbed in the General Fund. After further review, this transfer was recommended instead. This action ensures that the expenditure is appropriately budgeted and displayed in the BID Fund. Funding for this transfer will be provided by an offset in the Budget Operations Reserve. (Ongoing costs: $0) Performance Results This action will align funds with expenditures in the appropriate fund. 7 City Manager's Contingency Reduction MIME 0.00 (50,000) (50,000) This ongoing action reduces the City Manager's Contingency by $50,000 from $250,000 to $200,000 annually. This action will limit the City Manager's ability to address unanticipated items throughout the year. This funding is usually used on items that cross departments and are of significant interest to the City or requested by the City Council. Through the past few years, portions of this funding have been used for items such as supporting Ada's Cafe, paying membership dues in various organizations to ensure that the City is represented regionally, ballot measure polling, and some costs of the Caltrain camera system. (Ongoing savings: $50,000). Performance Results © 0 This action will slightly increase cycle time but will contribute to the City's long-term fiscal sustainability. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 471 CITY OF PALO ALTO CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 473 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 $12.3 million, or 19.1%, increase in costs in the General Benefits Fund over FY 2019 Adopted levels of $63.4 million to $76.4 million. This reflects increases for pension, healthcare, and other benefits. Of the $12.3 million increase, $8.6 million is attributable to City Council direction to praoactively contribute to the City's long-term pension liabilities through funding sent to the irrevocable Section 115 Trust Fund. This increase is partially offset by the removal of one-time funding in FY 2019 of $2.0 million that was transferred into the General Benefits fund for the same purpose. The remaining increase is driven primarily by increases in Pension costs, which are dictated and set by CaIPERS. Overall, the increase in benefit costs is slightly diminished through a citywide decrease of 6.5 full-time, benefited positions; this rep- resents a 0.6% decrease from FY 2019 Adopted levels of 1,041.35 positions to 1,034.85. Certain positions have been committed as being held vacant for the duration of FY 2020, further limit- ing cost escalation for pension and benefits. Further discussion of the costs follows below. 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). 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 2019, approximately 47 percent of the City's employees are either in Tier 2 or Tier 3. Annually, 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) which reflects the blended or combined cost of both the Normal Cost (NC) and Unfunded Accrued Liability (UAL) used in the annual billing of employer contributions to the trust for pension obligations. Staff transmits these valuation reports to the Finance Committee for review and discussion, most recently on September 18th, 2018, the June 30, 2017 CaIPERS Annual Valuation Reports (CMR 9604): www.cityofpaloalto.org/civicax/filebank/documents/66718. The total ADC for FY 2020 is $45.6 million ($30.4 million for the Miscellaneous Plan and $15.2 million for the Safety Plan). This GENERAL BENEFITS FUND • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 475 GENERAL BENEFITS FUND OVERVIEW reflects the blended cost of both the NC (percentage of payroll) and UAL (flat rate) as outlined in more detail below: • Miscellaneous plan: There is a blended cost Increase of 3.0 percentage points, from an employer contribution rate of 32.6 percent to 35.6 percent (9.2 percent growth). • Safety plan: Blended cost increase of 3.8 percentage points, from an employer contribution rate of 55.6 percent to 59.4 percent (6.8 percent growth). Normal Costs: The NC reflects the employer contribution for the plan retirement benefits pro- vided to current employees assessed as a percentage of payroll. The CaIPERS calculated normal cost is increasing by 0.5 percentage points, from 10.2% to 10.7%, for Miscellaneous and by 0.8 percentage points, 19.4% to 20.2%, for Safety. Unfunded Accrued Liability: The UAL represents the employer amortization of unfunded accrued liability and is assessed as a flat rate. The City's current net UAL is $414.9 million ($260.7 million for the Miscellaneous Plan and $154.2 million for the Safety Plan), a $10.2 million or 2.5% increase over the prior year. The annual payment calculated by CaIPERS and assumed in the development of the FY 2020 budget is $30.2 million ($20.5 million for the Miscellaneous Plan and $9.7 million for the Safety Plan). The budget assumes pre -payment of the UAL portion of the annual pension cost, which confers $1,077,000 in savings across the organization ($660,000 realized in the General Fund). These savings are calculated by CaIPERS. The City's current funded status is 66.3% for the Miscellaneous Plan and 63.5% for the Safety Plan. Timeline of the City's Pension Discussions: The City has been diligent in its discussion and planning efforts to address the costs both known and forecasted for pension benefits. Below is a brief timeline of notable discussions or actions CaIPERS and/or the City has taken in recent years. ▪ December 2016, the CaIPERS board voted to lower actuarial assumptions for the discount rate (assumed rate of return on investments) from 7.50 percent to 7.00 percent using a three-year phase -in beginning in FY 2019, ending in FY 2021. The annual valuation report (dated June 30, 2017) and used for FY 2020 budget development assumes a discount rate of 7.25 percent. ▪ During FY 2017 and FY 2018 the City staff and Council acted to establish an irrevocable IRS section 115 Pension Trust Fund and began contributing funds above the ADC as additional funding was available. By the close of FY 2018, $5.5 million had been contributed to this trust citywide. ▪ As part of the FY 2019 Adopted Budget, staff began more robust reporting of the City's pension liabilities including an alternative scenario calculation that reflected the FY 2019 budget with a more conservative discount rate assumption of 6.2% instead of the CaIPERs rate of 7.375%. The City Council approved a reduction of $4.0 million in budgeted expenses in the General Fund to proactively address pension obligations by contributing the 'normal cost' assuming the more conservative discount rate. 476 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL BENEFITS FUND OVERVIEW ▪ December 2018, the City Council approved transactions to complete the additional $4 million General Fund contribution to the Trust Fund, successfully accounting for the FY 2019 normal cost pension expenses at the more conservative discount rate of 6.2 percent for General Funded staffing (with proceeds above the CaIPERS ADC being contributed to the Trust Fund). • In December 2018, per Council direction, the first Long Range Financial Forecast for FY 2020-2029 was built with a base case that reflected the newly Council approved more conservative discount rate for the normal cost of pension contributions. ▪ This FY 2020 Proposed Budget implements the Council direction and recommends two additional contributions to the Trust Fund: 1) A one-time contribution of $2.3 million to account for the FY 2019 normal cost pension expenses at the more conservative discount rate of 6.2 percent to align all other funds with the General Fund's contributions to date; 2) All benefited staffing costs presume normal cost pension expenses at the 6.2% discount rate for FY 2020, resulting in budgeted retirement costs of $6.2 million (all funds) above required CaIPERS levels. In total, planned contributions (principal) of $22.0 million to the pension Trust Fund will have been made since inception in FY 2017 through FY 2020 ($14.3 million, or 65 percent, of the total is from the General Fund), an average annual contribution of $5.5 million. Annually, one-time surpluses resulting from excess revenues or expense savings at year-end continue to be brought forward for City Council consideration as potential contributions to the Trust Fund. The City continues to strive to contain costs with measures such as cost sharing with employ- ees. New labor agreements with the Safety Units that extend through FY 2021 will increase contributions up to 4.0%. It is anticipated that additional cost -share agreements with the mis- cellaneous units, who currently pick-up 1.0% of the employer share, will also be explored through current and future negotiations. Staff will return to the Finance Committee to continue the discussion of formalized policies and procedures to address the City's pension liabilities as previously discussed and as included in the 2019 Fiscal Sustainability Workplan. These options are intended to identify a path forward for the City to address its pension obligations on an ongoing basis in order to ensure not only prudent but proactive financial planning. HEALTHCARE COSTS The Fiscal Year 2020 budget for healthcare is based on the health plan choices employees made for Calendar Year 2019. Increases for the various bargaining units' healthcare costs are included in the memoranda of agreements and these costs are modeled appropriately through- out the budget per these terms. All bargaining units are now on a flat rate medical plan, with UMPAPA converting from a 90/10 contribution structure to a flat rate plan in Fall 2018. The flat rate medical plan helps the City's efforts to contain benefit costs as it provides a maximum exposure level to rising health costs. For calendar year 2020, the budget models a four percent annual increase in flat rate medical costs. Ongoing increases in healthcare and other benefit costs are an important factor in labor negotiations; now that the City is finishing negotiations GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 477 GENERAL BENEFITS FUND OVERVIEW with each major bargaining unit, cost increases commensurate with the agreements will be incorporated into future forecasts and budgets. Consistent with the Fiscal Year 2019 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 2020, 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 corresponding transfer from the General Bene- fits 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 Healthcare costs and the ADC are located in the Retiree Health Benefits Fund section of this document. 478 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET GENERAL BENEFITS FUND OVERVIEW 3udget Summary J FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change $ FY 2020 Change % Dollars by Category Salary & Benefits Healthcare 18,249,553 18,505,699 19,104,761 19,662,524 557,763 2.9% Other Benefits 609,884 611,652 1,118,506 1,118,496 (10) (0.0)% Pension 28,812,075 32,031,449 41,435,938 53,141,658 11,705,720 28.3% Salary 279,010 570,924 24,571 23,882 (689) (2.8)% Total Salary & Benefits 47,950,521 51,719,725 61,683,776 73,946,560 12,262,785 19.9% Contract Services 128,773 214,103 220,795 220,795 —% General Expense (196) 14,110 — — —% Operating Transfers -Out 2,203,000 2,444,000 2,197,000 2,197,000 — —% Total Dollars by Expense 50,282,099 54,391,938 64,101,571 76,364,355 12,262,784 19.1% Category Revenues Charges for Services 485 535 —% Operating Transfers -In 2,055,000 1,427,044 1,991,729 (1,991,729) (100.0)% Other Revenue 52,322,332 56,428,791 61,361,570 75,701,183 14,339,613 23.4% Return on Investments 50,385 197,653 16,175 433,000 416,825 2,577.0% Total Revenues 54,428,202 58,054,023 63,369,473 76,134,183 12,764,710 20.1% GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 479 GENERAL BENEFITS FUND OVERVIEW 3udget Reconciliation Net Positions Expenditures Revenues Prior Year Budget 0.48 64,101,571 63,369,473 732,098 One -Time Prior Year Budget Adjustments Supplemental Pension Trust Fund Contribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments PARs Contributions and Expenses (Normal Cost Calculated at 6.2 Percent Discount Rate) PARs Contributions (FY 2019 Catch -Up Proactive Contributions to City's Unfunded Pension Liability) Citywide Pension Citywide Healthcare Insurance Citywide Dental Insurance Citywide Vision Insurance Return on Investments Department Charges for General Benefits Adjustments to Costs of Ongoing Activities - (1,991,729) (1,991,729) (1,991,729) (1,991,729) (689) - 6,215,326 6,215,326 2,336,300 2,336,300 - 5,145,822 585,747 (11,226) (16,767) — 14,254,513 416,825 5,787,988 14,756,439 (689) 5,145,822 585,747 (11,226) (16,767) (416,825) (5,787,988) (501,926) Total FY 2020 Adopted Budget 0.48 76,364,355 76,134,183 230,172 480 GENERAL BENEFITS FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET RETIREE HEALTH BENEFIT FUND 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 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, completed their June 30, 2017 biennial actuar- ial study in FY 2018 to inform both the FY 2019 and FY 2020 Operating Budgets. 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 2020 is $16.5 million, or a 3.1% increase from FY 2019 ($16.0 million). This increase aligns with actuarial expec- tations in the most recent report. Another actuarial study is anticipated to be performed in Spring 2020, which will provide an update on the fund's status as of June 30, 2019. 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 (64%), Enterprise Funds (30%), and Other Funds (6%). As stated above, the ADC assumed for the Fiscal Year 2020 budget is $16.5 million. However, the charges to the City's funds are budged at $14.3 million. The difference of $2.2 million rep- resents the City's implied subsidy for retiree healthcare. This is the same subsidy briefly men- tioned in the General Benefits Fund Overview section preceding this. 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 require- ment is intended to recognize 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 bud- geted 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 million to the Retiree Health Benefits Fund has been established. This transfer reflects the full payment of the City's annual ADC for Retiree Healthcare in the Retiree Health Benefits Fund. RETIREE HEALTH BENEFIT FUND • :ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 481 RETIREE HEALTH BENEFIT FUND OVERVIEW 3udget Summary J FY 2017 Actuals FY 2019 FY 2018 Adopted Actuals Budget FY 2020 Adopted FY 2020 FY 2020 Budget Change $ Change % Dollars by Category Salary & Benefits Other Benefits 66,286 42,599 61,560 61,560 —% Retiree Medical 16,365,000 16,867,362 15,997,000 16,410,999 413,999 2.6% Total Salary & Benefits 16,431,286 16,909,962 16,058,560 16,472,559 413,999 2.6% Total Dollars by Expense Category 16,431,286 16,909,962 16,058,560 16,472,559 413,999 2.6% Revenues Operating Transfers -In 2,203,000 2,444,000 2,197,000 2,197,000 —% Other Revenue 13,808,255 14,526,970 13,800,000 14,213,999 413,999 3.0% Return on Investments 73,868 69,691 59,200 46,900 (12,300) (20.8)% Total Revenues 16,085,122 17,040,661 16,056,200 16,457,899 401,699 2.5% 482 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET RETIREE HEALTH BENEFIT FUND OVERVIEW Prior Year Budget 3udget Reconciliation Net Positions Expenditures Revenues 16, 058, 560 16, 056, 200 2,360 Base Adjustments Adjustments to Costs of Ongoing Activities Citywide Retiree Health Benefits Adjustment Return on Investments 413,999 413,999 (12,300) 12,300 Adjustments to Costs of Ongoing Activities 413,999 401,699 12,300 Total FY 2020 Adopted Budget 16,472,559 16,457,899 14,660 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 483 CITY OF PALO ALTO Table of Organization �a FY 2017 Actuals FY 2018 Actuals TABLE OF ORGANIZATION FY 2019 FY 2020 FY 2020 Adopted Adopted Change FY 2020 Budget Budget FTE Change % General Fund Administrative Services Account Specialist Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate III Assistant Director Administrative 1.65 1.65 Services Buyer 1.00 1.00 Chief Procurement Officer 1.00 1.00 Contracts Administrator 1.70 2.70 Director Administrative Services/CFO 0.80 0.80 Director Office of Management and 1.00 1.00 Budget Management Analyst 0.00 0.00 Manager Accounting 1.00 1.00 Manager Budget 1.00 1.00 Manager Real Property 1.00 1.00 Manager Revenue Collections 0.62 0.62 Manager Treasury, Debt & 0.60 0.60 Investments Manager, Finance Payroll Analyst Senior Accountant Senior Buyer Senior Management Analyst Storekeeper Storekeeper -Lead Warehouse Supervisor 5.88 4.05 3.00 1.00 0.00 1.00 0.00 2.00 3.00 1.00 4.90 1.00 0.20 0.20 4.88 3.05 3.00 1.00 1.00 1.00 0.00 2.00 3.00 1.00 4.90 1.00 0.20 0.20 4.63 4.63 3.45 3.45 3.00 3.00 1.00 1.00 1.00 1.00 1.00 1.00 1.65 1.65 0.00 0.00 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 1.00 0.00 0.00% 1.00 1.00 0.00 0.00% 2.70 2.70 0.00 0.00% 0.80 0.80 0.00 0.00% 1.00 1.00 0.00 0.00% 1.00 2.00 1.00 100.00% 0.00 0.00 0.00 0.00% 2.00 2.00 0.00 0.00% 1.00 1.00 0.00 0.00% 0.62 0.62 0.00 0.00% 0.60 0.60 0.00 0.00% 1.00 2.00 3.00 1.00 2.30 1.00 0.20 0.20 1.00 2.00 3.00 1.00 2.30 1.00 0.20 0.20 0.00 0.00 0.00 0.00 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 Administrative Services 38.60 38.60 38.15 39.15 1.00 2.62% City Attorney Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator Deputy City Attorney Legal Fellow Principal Attorney 1.00 0.00 1.00 1.00 0.00 1.00 1.00 3.00 1.00 1.00 1.00 1.00 1.00 0.00 3.00 1.00 1.00 1.00 1.00 1.00 0.00 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 0.00% 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 485 TABLE OF ORGANIZATION Table of Organization PEI Secretary to City Attorney Senior Assistant City Attorney Senior Deputy City Attorney Senior Legal Secretary Senior Management Analyst FY 2017 Actuals 1.00 2.00 1.00 1.00 1.00 FY 2018 Actuals 1.00 0.00 0.00 1.00 1.00 FY 2019 Adopted Budget 1.00 0.00 0.00 0.00 1.00 Total City Attorney 11.00 11.00 10.00 FY 2020 Adopted Budget 1.00 0.00 0.00 0.00 1.00 FY 2020 Change FTE 0.00 0.00 0.00 0.00 0.00 FY 2020 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 10.00 0.00 0.00% City Auditor City Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor 1.00 1.00 1.00 2.00 1.00 1.00 1.00 2.00 Total City Auditor 5.00 5.00 1.00 1.00 2.00 1.00 5.00 1.00 0.00 2.00 1.00 0.00 -1.00 0.00 0.00 4.00 -1.00 0.00% (100.00)% 0.00% 0.00% (20.00)% City Clerk Administrative Associate III 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 0.00 2.00 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% Total City Clerk 5.75 5.75 5.00 5.00 0.00 0.00% City Manager Administrative Assistant Administrative Associate Ill 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 Manager Economic Development 1.00 1.00 2.00 0.00 0.00 1.00 1.00 1.00 0.00 1.00 0.00 1.00 1.00 1.00 1.00 0.00 0.25 2.00 1.00 1.00 1.00 2.00 1.00 0.00 1.00 0.00 1.00 1.00 0.00 0.25 2.00 1.00 1.00 1.00 2.00 1.00 0.75 1.00 0.00 Total City Manager 10.00 11.25 12.00 2.00 0.00 1.00 0.00 2.00 1.00 0.00 1.00 1.00 1.00 0.75 1.00 0.00 1.00 -1.00 1.00 -0.25 0.00 0.00 -1.00 0.00 -1.00 0.00 0.00 0.00 0.00 100.00% (100.00)% 0.00% (100.00)% 0.00% 0.00% (100.00%) 0.00% (50.00)% 0.00% 0.00% 0.00% 0.00% 10.75 -1.25 (10.42)% 486 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Community Services Table of Organization FY 2017 Actuals FY 2018 Actuals TABLE OF ORGANIZATION FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Change % Administrative Assistant Administrative Associate III Assistant Director Community Services Building Serviceperson Building Serviceperson-Lead Coordinator Recreation Programs Director Community Services Division Manager Open Space, Parks and Golf Heavy Equipment Operator Inspector, Field Services Junior Museum & Zoo Educator Management Analyst Management Assistant Manager Community Services Manager Community Services Senior Program Manager Human Services 1.00 1.00 2.00 2.00 2.00 4.00 1.00 1.00 0.07 2.00 2.75 1.00 1.00 5.00 4.00 1.00 Park Maintenance Person 6.00 1.00 Park Ranger 5.00 Parks/Golf Crew -Lead 2.00 Producer Arts/Science Program 12.50 8.00 Program Assistant II 4.00 Project Manager 0.10 Senior Management Analyst 1.00 Sprinkler System Representative 4.00 Superintendent Community Services 2.00 1.00 1.00 Park Maintenance -Lead Program Assistant I Superintendent Recreation Theater Specialist 1.00 1.00 2.00 2.00 2.00 4.00 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 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 1.00 1.00 2.00 1.25 0.60 4.00 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 3.00 0.10 1.00 4.00 2.00 1.00 2.00 0.00 0.00% 0.00 0.00% 0.00 -0.75 -1.40 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 - 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% (37.50)% (70.00)% 33.33% 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% (25.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Community Services 78.42 78.77 77.77 75.62 -2.15 (2.76)% Development Services Administrative Assistant Administrative Associate II Administrative Associate III Assistant Chief Building Official Associate Engineer 1.00 3.00 1.00 1.00 0.02 1.00 3.00 1.00 1.00 0.02 1.00 2.80 1.00 1.00 0.02 0.00 0.00 0.00 0.00 0.00 - 1.00 -2.80 - 1.00 - 1.00 - 0.02 (100.00)% (100.00)% (100.00)% (100.00)% (100.00) % TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 487 TABLE OF ORGANIZATION Table of Organization ER Associate Planner FY 2017 Actuals 0.90 Building Inspector Specialist 4.00 Building/Planning Technician 2.30 Chief Building Official 1.00 0.00 Code Enforcement Officer 0.40 Code Enforcement -Lead 0.20 Deputy Chief/Fire Marshal 0.80 2.00 Development Project Coordinator III 3.00 1.00 Engineer 0.64 Engineering Technician III 1.78 Fire Inspector 3.20 1.60 Industrial Waste Inspector 0.01 Industrial Waste Investigator 0.35 Inspector, Field Services 0.68 0.00 Management Analyst 1.01 1.00 Chief Planning Official Development Project Coordinator II Development Services Director Hazardous Materials Inspector Landscape Architect Park Planner Manager Development Center Manager Environmental Control Program Manager Planning 2.00 Manager Urban Forestry 0.04 0.17 Planning Arborist 0.25 0.00 Project Engineer 0.03 0.07 0.10 Planner Principal Planner Project Manager Senior Engineer Senior Industrial Waste Investigator Senior Management Analyst Senior Planner Supervisor Inspection and Surveying 0.46 0.01 1.00 0.24 0.27 FY 2018 Actuals 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 3.20 1.60 0.01 0.35 0.68 0.00 1.01 1.00 0.10 2.00 0.04 0.17 0.29 0.00 0.03 0.00 0.46 0.01 1.00 0.24 0.27 FY 2019 Adopted Budget 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 3.20 1.60 0.01 0.35 0.68 0.50 1.01 1.00 0.10 2.00 0.04 0.15 0.00 0.01 0.03 0.00 0.46 0.01 1.00 0.12 0.27 Total Development Services 36.53 36.50 36.51 FY 2020 Adopted Budget 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 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 2020 Change FTE -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 -3.20 - 1.60 - 0.01 -0.35 -0.68 - 0.50 -1.01 - 1.00 - 0.10 - 2.00 -0.04 - 0.15 0.00 -0.01 - 0.03 0.00 -0.46 -0.01 - 1.00 -0.12 - 0.27 FY 2020 Change % (100.00)% (100.00)% (100.00)% (100.00) % (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% (100.00)% 0.00% (100.00)% (100.00)% 0.00% (100.00)% (100.00)% (100.00)% (100.00)% (100.00) % 0.00 -36.51 (100.00)% Fire 40 -Hour Training Battalion Chief 1.00 1.00 40 -Hour Training Captain 1.00 1.00 1.00 1.00 1.00 1.00 0.00 0.00% 0.00 0.00% 488 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TABLE OF ORGANIZATION Table of Organization Administrative Assistant Administrative Associate II Battalion Chief Business Analyst Deputy Chief/Fire Marshal Deputy Director Technical Services Division Deputy Fire Chief FY 2017 Actuals 1.00 2.00 3.00 0.80 0.05 0.20 2.00 Emergency Medical Service Director 1.00 Emergency Medical Services Data Specialist Fire Apparatus Operator 30.00 30.00 Fire Captain 21.00 21.00 Fire Chief 1.00 1.00 1.00 FY 2018 Actuals 1.00 2.00 3.00 0.80 0.05 FY 2019 Adopted Budget 1.00 2.20 3.00 0.80 0.05 0.20 0.20 2.00 2.00 1.00 1.00 1.00 Fire Fighter Fire Inspector Geographic Information System Specialist Hazardous Materials Inspector Senior Management Analyst 41.00 41.00 0.80 0.80 0.50 0.50 0.30 0.30 1.00 1.00 Total Fire 108.65 108.65 1.00 26.00 21.00 1.00 34.00 0.80 0.50 0.30 1.00 97.85 FY 2020 Adopted Budget 1.00 2.20 3.00 0.80 0.05 FY 2020 Change FTE 0.00 0.00 0.00 0.00 0.00 0.20 0.00 2.00 0.00 1.00 0.00 1.00 26.00 21.00 1.00 34.00 0.80 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.30 0.00 1.00 0.00 97.85 0.00 FY 2020 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% Human Resources Administrative Assistant Assistant Director Human Resources Director Human Resources/CPO Human Resources Representative Human Resources Technician Manager Employee Benefits Manager Employee Relations Senior Human Resources Administrator Senior Management Analyst 1.00 1.00 1.00 2.00 4.00 1.00 1.00 4.00 0.00 1.00 1.00 3.00 4.00 1.00 1.00 3.00 1.00 2.00 0.00 1.00 1.00 3.00 4.00 1.00 1.00 3.00 0.00 1.00 1.00 3.00 4.00 1.00 1.00 3.00 2.00 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% 0.00% 0.00% 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 111 Assistant Director Library Services Business Analyst Coordinator Library Programs 1.00 0.00 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 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% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 489 TABLE OF ORGANIZATION Table of Organization Director Libraries Division Head Library Services Librarian Library Associate Library Specialist Management Analyst Management Assistant Manager Library Services Senior Librarian Supervising Librarian FY 2017 Actuals 1.00 1.00 7.00 7.00 12.50 0.00 1.00 4.00 9.00 2.00 FY 2018 Actuals 1.00 1.00 7.00 7.00 12.50 1.00 0.00 4.00 9.00 2.00 FY 2019 Adopted Budget 1.00 1.00 7.00 7.00 11.50 1.00 0.00 4.00 9.00 2.00 FY 2020 Adopted Budget 1.00 1.00 6.00 7.00 11.50 1.00 0.00 3.00 8.00 4.00 FY 2020 Change FTE 0.00 0.00 -1.00 0.00 0.00 0.00 0.00 -1.00 -1.00 2.00 FY 2020 Change % 0.00% 0.00% (14.29)% 0.00% 0.00% 0.00% 0.00% (25.00)% (11.11)% 100.00% Total Library 48.50 48.50 47.50 46.50 -1.00 (2.11)% 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 1.00 1.00 1.00 0.00 0.00 1.00 1.00 1.00 1.00 0.00 0.00 1.00 1.00 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% Total Office of Emergency Services 3.00 3.00 3.00 3.00 0.00 0.00% Office of Transportation2 Administrative Assistant Associate Engineer Associate Planner Chief Transportation Official Coordinator Transportation Systems Management Management Analyst Project Engineer Senior Engineer Senior Planner Traffic Engineering -Lead Transportation Planning Manager 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 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 Office of Transportation 0.00 0.00 0.00 0.50 0.30 0.30 0.70 0.50 0.30 0.30 0.70 1.25 1.25 0.50 0.45 0.20 0.50 0.35 1.15 0.50 0.45 0.20 0.50 0.35 1.15 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.20 6.20 0.00% Planning and Development Services Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Chief Building Official 1.00 1.00 0.00 3.00 0.00 1.00 1.00 0.00 3.00 0.00 1.00 1.00 0.00 3.00 0.00 1.00 1.00 2.80 4.00 1.00 0.00 0.00% 0.00 0.00% 2.80 0.00% 1.00 33.33% 1.00 0.00% 490 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Table of Organization FY 2017 Actuals Assistant Director PCE 1.00 Associate Engineer 1.00 Associate Planner 0.10 Building Inspector Specialist 0.00 Building/Planning Technician 0.70 Business Analyst 1.00 Chief Building Official 0.00 Chief Planning Official 1.00 Chief Transportation Official 0.70 Code Enforcement Officer 1.60 Code Enforcement -Lead 0.80 Coordinator Transportation Systems Management Deputy Chief/Fire Marshal 0.00 Development Project Coordinator II 0.00 Development Project Coordinator III 0.00 FY 2018 Actuals 1.00 0.73 0.10 0.00 0.70 1.00 0.00 1.00 0.43 1.60 0.80 TABLE OF ORGANIZATION FY 2019 Adopted Budget 1.00 0.65 2.25 0.00 0.70 1.00 0.00 0.99 0.64 1.60 0.80 FY 2020 Adopted Budget 1.00 0.22 3.15 4.00 3.00 0.00 1.00 1.00 0.00 2.00 1.00 FY 2020 Change FTE 0.00 -0.43 0.90 4.00 2.30 -1.00 1.00 0.01 -0.64 0.40 0.20 FY 2020 Change % 0.00% (66.15)% 40.00% 0.00% 328.57% (100.00)% 0.00% 1.01% (100.00)% 25.00% 25.00% 0.60 0.88 0.74 0.00 -0.74 (100.00)% 0.00 0.00 0.00 0.00 0.00 0.00 0.80 2.00 3.00 0.80 2.00 3.00 0.00% 0.00% 0.00% Director Planning/Community 1.00 1.00 1.00 1.00 0.00 0.00% Environment Engineer 0.00 0.00 0.00 0.64 0.64 0.00% Engineering Technician III 0.00 0.00 0.00 1.78 1.78 0.00% Fire Inspector 0.00 0.00 0.00 3.20 3.20 0.00% Hazardous Materials Inspector 0.00 0.00 0.00 1.60 1.60 0.00% Industrial Waste Inspector 0.00 0.00 0.00 0.01 0.01 0.00% Industrial Waste Investigator 0.00 0.00 0.00 0.35 0.35 0.00% Inspector, Field Services 0.00 0.00 0.00 0.68 0.68 0.00% Landscape Architect Park Planner 0.00 0.00 0.00 0.50 0.50 0.00% Management Analyst 0.88 0.98 0.80 0.01 -0.79 (98.75)% Manager Environmental Control 0.00 0.00 0.00 0.10 0.10 0.00% Program Manager Planning 2.00 2.00 1.00 5.00 4.00 200.00% Manager Urban Forestry 0.00 0.00 0.00 0.04 0.04 0.00% Parking Operations -Lead 0.20 0.00 0.10 0.00 -0.10 (100.00)% Planner 3.83 3.83 3.85 4.00 0.15 3.90% Planning Division Manager 0.00 0.00 1.00 0.00 -1.00 (100.00)% Principal Management Analyst 0.00 0.00 0.00 1.00 1.00 0.00% Principal Planner 0.00 0.00 0.99 2.00 1.01 102.02% Program Assistant 0.00 0.00 0.00 1.00 1.00 0.00% Program Assistant II 0.35 0.60 0.00 0.00 0.00 0.00% Project Engineer 1.15 0.50 0.80 0.13 -0.67 (83.75)% Senior Business Analyst 0.00 0.00 0.00 1.00 1.00 0.00% Senior Engineer 0.00 0.00 0.00 0.46 0.46 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 491 TABLE OF ORGANIZATION Table of Organization Senior Industrial Waste Investigator Senior Management Analyst Senior Planner Supervisor Inspection and Surveying Traffic Engineering -Lead Transportation Planning Manager FY 2017 Actuals 0.00 1.00 6.70 0.00 0.10 0.85 FY 2018 Actuals 0.00 1.00 6.51 0.00 0.38 0.20 FY 2019 Adopted Budget 0.00 0.88 3.76 0.00 0.65 0.41 Total Planning and Community Environment 31.56 30.24 30.20 FY 2020 Adopted Budget 0.01 2.00 3.60 0.27 0.10 0.00 FY 2020 Change FTE 0.01 1.12 - 0.16 0.27 -0.55 - 0.41 FY 2020 Change % 0.00% 127.27% (4.26)% 0.00% (84.62)% (100.00)% 62.45 32.25 106.79% Police Administrative Assistant Administrative Associate II Animal Control Officer Animal Control Officer -Lead Animal Services Specialist II 1.00 1.00 1.00 1.00 0.00 3.00 3.00 3.00 3.00 0.00 3.00 3.00 3.00 3.00 0.00 1.00 1.00 1.00 1.00 0.00 2.00 2.00 2.00 0.00 -2.00 Assistant Police Chief 1.00 1.00 1.00 1.00 0.00 Business Analyst 1.20 1.20 1.20 1.20 0.00 Code Enforcement Officer 1.00 1.00 1.00 1.00 0.00 Communications Manager 0.00 1.00 1.00 1.00 0.00 Communications Technician 1.00 1.00 1.00 1.00 0.00 Community Service Officer 8.50 7.50 7.50 7.50 0.00 Court Liaison Officer 1.00 1.00 1.00 1.00 0.00 Crime Analyst Deputy Director Technical Services Division Geographic Information System Specialist Police Agent Police Captain Police Chief Police Lieutenant Police Officer Police Records Specialist II Police Records Specialist -Lead Police Sergeant Program Assistant II Property Evidence Technician 1.00 1.00 1.00 1.00 0.00 0.80 0.50 19.00 2.00 1.00 5.00 50.00 6.00 1.00 14.00 1.00 2.00 0.80 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 19.00 2.00 1.00 5.00 50.00 6.00 1.00 14.00 1.00 2.00 0.80 0.00 0.50 0.00 19.00 2.00 1.00 5.00 50.00 6.00 1.00 14.00 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% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Public Safety Communications 1.00 1.00 1.00 1.00 0.00 0.00% Manager Public Safety Dispatcher 16.00 16.00 16.00 16.00 0.00 0.00% Public Safety Dispatcher -Lead 4.00 4.00 4.00 4.00 0.00 0.00% 492 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TABLE OF ORGANIZATION Table of Organization 1ff 1 Public Safety Program Manager Senior Management Analyst Superintendent Animal Services Veterinarian Veterinarian Technician FY 2017 Actuals 2.00 1.00 1.00 1.00 2.00 FY 2018 Actuals 2.00 1.00 1.00 1.00 2.00 FY 2019 Adopted Budget 2.00 1.00 1.00 1.00 2.00 FY 2020 Adopted Budget 2.00 1.00 0.00 0.00 0.00 FY 2020 Change FTE 0.00 0.00 - 1.00 - 1.00 -2.00 FY 2020 Change % 0.00% 0.00% (100.00)% (100.00) % (100.00)% Total Police 155.00 155.00 155.00 149.00 -6.00 (3.87) % Public Works Administrative Assistant Administrative Associate I Administrative Associate 11 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 1.00 1.00 1.00 1.00 0.00 0.00% 0.60 0.60 0.60 0.10 -0.50 (83.33)% 2.65 2.65 2.65 2.65 0.00 0.00% 0.01 0.01 0.01 0.01 0.00 0.00% 0.87 0.87 0.87 0.73 -0.14 (16.09)% 0.30 0.30 0.30 0.00 -0.30 (100.00)% 1.00 1.00 0.00 0.00 0.00 0.00% 1.80 1.00 1.00 1.00 0.00 0.00% 3.00 3.00 2.00 2.00 0.00 0.00% 0.26 0.26 0.26 0.26 0.00 0.00% 0.50 1.50 1.50 1.50 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 0.80 0.80 0.80 0.80 0.00 0.00% Engineer 0.66 0.66 0.66 0.36 -0.30 (45.45)% 1.47 1.47 1.47 1.47 0.00 0.00% Equipment Operator 3.46 3.46 2.46 2.46 0.00 0.00% Facilities Carpenter 1.00 1.00 1.00 1.00 0.00 0.00% Facilities Maintenance -Lead 1.85 1.85 1.85 1.85 0.00 0.00% Facilities Painter 1.75 1.75 1.75 1.75 0.00 0.00% Facilities Technician 5.55 4.05 4.05 4.05 0.00 0.00% 2.33 2.33 2.33 2.33 0.00 0.00% Heavy Equipment Operator -Lead 0.85 0.85 0.85 0.85 0.00 0.00% Inspector, Field Services 0.11 0.11 0.11 0.11 0.00 0.00% Landscape Architect Park Planner 0.10 0.10 0.60 0.60 0.00 0.00% 0.70 0.70 0.70 0.70 0.00 0.00% Manager Facilities 0.90 0.90 0.90 0.90 0.00 0.00% 1.20 1.20 1.20 1.20 0.00 0.00% Manager Urban Forestry 0.96 0.96 0.96 0.96 0.00 0.00% 0.05 0.05 0.05 0.05 0.00 0.00% Planning Arborist 0.75 0.71 0.00 0.00 0.00 0.00% 0.50 0.50 0.50 0.00 -0.50 (100.00)% Project Manager 2.58 2.65 2.65 2.65 0.00 0.00% Engineering Technician 111 Heavy Equipment Operator Management Analyst Manager Maintenance Operations Manager Watershed Protection Project Engineer TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 493 TABLE OF ORGANIZATION Table of Organization Senior Engineer Senior Management Analyst Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Controller Maintainer I Traffic Controller Maintainer II Tree Maintenance Person Tree Trim/Line Clear Tree Trim/Line Clear -Lead FY 2017 Actuals 0.79 1.11 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 FY 2018 Actuals 0.79 1.11 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 FY 2019 Adopted Budget 0.79 1.11 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 FY 2020 Adopted Budget 0.59 1.11 0.00 0.10 0.33 1.94 2.00 1.00 7.00 1.00 FY 2020 Change FTE -0.20 0.00 -0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2020 Change % (25.32)% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Public Works 55.93 54.66 51.45 49.41 -2.04 (3.96)% Total General Fund 603.94 602.92 585.43 574.93 -10.50 (1.79)% Enterprise Fund Public Works Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Director Public Works Assistant Manager WQCP Associate Engineer Chemist 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 0.30 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% 1.99 2.99 2.99 2.99 0.00 0.00% 3.00 3.00 3.00 3.00 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% 0.90 0.90 0.90 0.90 0.00 0.00% 0.25 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% 1.00 1.00 1.00 1.00 0.00 0.00% 0.00 1.50 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% 1.15 1.15 1.15 1.15 0.00 0.00% 3.00 3.00 3.00 3.00 0.00 0.00% 494 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGE' Landfill Technician Table of Organization 1.00 1.00 Manager Maintenance Operations 1.96 1.96 Manager Solid Waste 1.00 1.00 Manager Water Quality Control Plant 1.00 1.00 Manager Watershed Protection 0.95 0.95 Plant Mechanic 7.00 7.00 1.00 1.00 Program Assistant II 2.00 2.00 Project Engineer 1.83 1.83 Project Manager 1.35 1.35 0.30 0.30 Senior Buyer 1.00 1.00 1.00 1.00 Senior Engineer 3.76 3.76 0.99 0.99 Senior Management Analyst 0.21 0.21 1.00 1.00 Senior Operator WQC 6.00 6.00 Senior Technologist 1.00 1.00 Storekeeper 1.00 1.00 1.00 1.00 Street Sweeper Operator 1.63 1.63 3.00 3.00 Surveyor, Public Works 0.12 0.12 1.00 1.00 Traffic Controller Maintainer I 0.06 0.06 Senior Chemist Senior Industrial Waste Investigator FY 2017 Actuals 1.00 Management Analyst 2.30 Manager Airport 1.00 Manager Environmental Control Program Manager Laboratory Services 4.90 FY 2018 Actuals 1.00 2.30 1.00 4.90 Program Assistant I Senior Accountant Senior Mechanic Street Maintenance Assistant Supervisor WQCP Operations Technologist WQC Plant Operator II Zero Waste Coordinator 16.00 16.00 1.00 1.00 TABLE OF ORGANIZATION FY 2019 Adopted Budget 1.00 2.30 1.00 4.90 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 0.12 1.00 0.06 16.00 1.00 FY 2020 Adopted Budget 1.00 2.30 1.00 4.90 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 0.12 1.00 0.06 16.00 1.00 FY 2020 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 0.00 0.00 0.00 0.00 0.00 0.00 FY 2020 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Public Works 98.69 101.19 101.19 101.19 0.00 0.00% Utilities Account Specialist Accountant Administrative Assistant 1.70 0.60 1.00 1.70 0.60 1.00 Administrative Associate II 6.00 7.00 1.70 0.60 1.00 7.00 1.70 0.60 1.00 6.00 0.00 0.00 0.00 -1.00 0.00% 0.00% 0.00% (14.29)% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 495 TABLE OF ORGANIZATION Table of Organization =_Aei Assistant City Manager/Utilities General Manager Assistant Director Administrative Services Assistant Director Utilities Customer Support Services FY 2017 Actuals 0.00 FY 2018 Actuals 0.75 0.25 0.25 1.00 1.00 Assistant Director Utilities Engineering 1.00 1.00 Assistant Director Utilities Operations 1.00 1.00 Assistant Director Utilities/Resource 1.00 1.00 1.00 1.00 0.00 0.00% Management Business Analyst 7.00 7.00 6.00 6.00 0.00 0.00% Cathodic Protection Technician 1.00 1.00 1.00 1.00 0.00 0.00% Assistant Cathodic Technician 1.00 1.00 1.00 1.00 0.00 0.00% Cement Finisher 1.00 2.00 2.00 2.00 0.00 0.00% Contracts Administrator 0.70 0.70 0.70 0.70 0.00 0.00% Coordinator Utilities Projects 6.00 6.00 6.00 6.00 0.00 0.00% Customer Service Representative 6.00 7.00 7.00 7.00 0.00 0.00% Customer Service Specialist 2.00 2.00 2.00 2.00 0.00 0.00% Customer Service Specialist -Lead 2.00 2.00 2.00 2.00 0.00 0.00% Deputy Chief/Fire Marshal 0.08 0.08 0.08 0.08 0.00 0.00% Deputy City Attorney 0.00 1.00 1.00 1.00 0.00 0.00% Director Administrative Services/CFO 0.20 0.20 0.20 0.20 0.00 0.00% Director Utilities 1.00 0.00 0.00 0.00 0.00 0.00% Electric Project Engineer 2.00 2.00 2.00 4.00 2.00 100.00% Electric Underground Inspector 2.00 2.00 2.00 2.00 0.00 0.00% Electric Underground Inspector -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Electrical Equipment Technician 1.00 1.00 1.00 1.00 0.00 0.00% Electrician Assistant I 3.00 3.00 3.00 3.00 0.00 0.00% Engineer 4.00 4.00 4.00 4.00 0.00 0.00% Engineering Manager - Electric 1.00 1.00 1.00 1.00 0.00 0.00% Engineering Manager - WGW 1.00 1.00 1.00 1.00 0.00 0.00% Engineering Technician III 5.00 3.00 3.00 3.00 0.00 0.00% Equipment Operator 1.00 0.00 0.00 0.00 0.00 0.00% Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Gas System Technician II 3.00 0.00 0.00 0.00 0.00 0.00% Hazardous Materials Inspector 0.06 0.06 0.06 0.06 0.00 0.00% Heavy Equipment Operator 6.70 6.70 6.70 6.70 0.00 0.00% FY 2019 Adopted Budget 0.75 FY 2020 Adopted Budget 0.00 0.25 0.25 1.00 1.00 FY 2020 Change FTE FY 2020 Change % -0.75 (100.00)% 0.00 0.00% 0.00 0.00% 0.00 4.00 4.00 4.00 0.00 0.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00 0.00 0.00% 0.00 0.00% 0.00% 0.00% 496 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Table of Organization FY 2017 Actuals Heavy Equipment Operator - Install/ Repair Industrial Waste Investigator 0.50 0.50 0.50 0.50 0.00 0.00% Inspector, Field Services 5.00 5.00 5.00 5.00 0.00 0.00% Lineperson/Cable Specialist 11.00 11.00 11.00 11.00 0.00 0.00% Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 0.00 0.00% Maintenance Mechanic -Welding 2.00 2.00 2.00 2.00 0.00 0.00% Manager Communications 1.00 1.00 1.00 1.00 0.00 0.00% Manager Customer Service 1.00 1.00 1.00 1.00 0.00 0.00% Manager Electric Operations 1.00 1.00 1.00 1.00 0.00 0.00% Manager Treasury, Debt & Investments Manager Utilities Compliance 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Marketing Services 0.00 0.00 0.00 0.00 0.00 0.00% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Program Services 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 0.00 0.00% Meter Reader 6.00 6.00 6.00 6.00 0.00 0.00% Meter Reader -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Metering Technician 3.00 3.00 3.00 3.00 0.00 0.00% Metering Technician -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Offset Equipment Operator 0.48 0.48 0.48 0.48 0.00 0.00% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 0.00 0.00% Power Engineer 3.00 3.00 3.00 1.00 -2.00 (66.67)% Principal Business Analyst 1.00 1.00 1.00 1.00 0.00 0.00% Program Assistant I 2.50 1.50 1.50 1.50 0.00 0.00% Program Assistant II 0.00 0.00 0.00 1.00 1.00 0.00% Project Engineer 5.00 5.00 5.00 5.00 0.00 0.00% Project Manager 0.75 0.75 0.75 0.75 0.00 0.00% Resource Planner 6.00 6.00 6.00 5.00 -1.00 (16.67)% Restoration Lead 1.00 1.00 1.00 1.00 0.00 0.00% SCADA Technologist 2.00 2.00 2.00 2.00 0.00 0.00% Senior Accountant 0.70 0.70 0.70 0.70 0.00 0.00% Senior Business Analyst 2.00 2.00 3.00 3.00 0.00 0.00% Senior Deputy City Attorney 1.00 0.00 0.00 0.00 0.00 0.00% Senior Electrical Engineer 4.00 4.00 4.00 4.00 0.00 0.00% Senior Engineer 5.00 5.00 5.00 5.00 0.00 0.00% Senior Management Analyst 0.70 0.70 0.70 0.70 0.00 0.00% Senior Mechanic 1.00 1.00 1.00 1.00 0.00 0.00% FY 2018 Actuals TABLE OF ORGANIZATION FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Change % 4.00 4.00 4.00 4.00 0.00 0.00% 0.40 0.40 0.40 0.40 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 497 TABLE OF ORGANIZATION Table of Organization Senior Performance Auditor Senior Resource Planner Senior Utilities Field Service Representative Senior Water Systems Operator Storekeeper Storekeeper -Lead Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber -Lead Substation Electrician Substation Electrician -Lead Supervising Electric Project Engineer Tree Maintenance Person Utilities Chief Operating Officer Utilities Compliance Technician Utilities Compliance Technician -Lead Utilities Credit/Collection Specialist Utilities Director Utilities Engineer Estimator Utilities Field Services Representative Utilities Install Repair -Lead -Welding Certified Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair Assistant Utilities Install/Repair-Lead Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator Utilities Safety Officer Utilities Supervisor Utilities System Operator Utility Engineering Estimator - Lead Warehouse Supervisor Water System Operator I Water System Operator II FY 2017 Actuals 1.00 6.00 1.00 2.00 1.00 0.80 5.00 2.00 6.00 2.00 1.00 1.00 0.00 2.00 1.00 2.00 0.00 5.00 5.00 2.00 3.00 FY 2018 Actuals 1.00 6.00 1.00 2.00 1.00 0.80 FY 2019 Adopted Budget 1.00 6.00 1.00 2.00 1.00 0.80 5.00 5.00 2.00 6.00 2.00 1.00 1.00 1.00 2.00 1.00 2.00 0.00 5.00 5.00 2.00 2.00 6.00 2.00 1.00 1.00 1.00 2.00 1.00 2.00 0.00 5.00 5.00 2.00 FY 2020 Adopted Budget 1.00 6.50 1.00 2.00 1.00 0.80 FY 2020 Change FTE 0.00 FY 2020 Change % 0.00% 0.50 8.33% 0.00 0.00 0.00 0.00 5.00 0.00 2.00 6.00 2.00 1.00 1.00 1.00 2.00 1.00 2.00 1.00 5.00 5.00 2.00 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 3.00 3.00 3.00 0.00 10.00 10.00 10.00 10.00 1.00 1.00 1.00 1.00 5.00 5.00 5.00 5.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00 1.00 12.00 5.00 0.00 0.80 1.00 4.00 1.00 12.00 5.00 1.00 0.80 0.00 4.00 1.00 12.00 5.00 1.00 0.80 0.00 4.00 1.00 12.00 5.00 1.00 0.80 0.00 4.00 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% 33.33% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Utilities 254.92 256.67 256.67 257.42 0.75 0.29% 498 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET TABLE OF ORGANIZATION Table of Organization FY 2019 FY 2020 FY 2017 FY 2018 Adopted Adopted Actuals Actuals Budget Budget FY 2020 Change FTE FY 2020 Change % Total Enterprise Fund 353.61 357.86 357.86 358.61 0.75 0.21% Other Funds Capital Project Fund Administrative Assistant Administrative Associate I Administrative Associate III Assistant Director Public Works Associate Engineer Associate Planner Building Serviceperson Building Serviceperson-Lead Cement Finisher -Lead Chief Transportation Official Contracts Administrator Coordinator Public Works Projects Coordinator Transportation Systems Management Engineer Engineering Technician III Facilities Technician Inspector, Field Services Landscape Architect Park Planner Management Analyst Manager Facilities Manager Maintenance Operations Parking Operations -Lead Program Assistant II Project Engineer Project Manager Senior Engineer Senior Management Analyst Senior Planner Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Engineering -Lead Transportation Planning Manager 0.00 0.00 0.00 0.15 0.15 0.80 0.80 0.80 0.80 0.00 0.89 0.89 1.09 0.89 -0.20 0.58 0.58 0.58 0.72 0.14 2.69 2.96 3.04 2.49 -0.55 0.00 0.00 0.31 0.30 -0.01 0.00 0.00 0.00 0.75 0.75 0.00 0.00 0.00 1.40 1.40 0.74 0.74 0.74 0.74 0.00 0.30 0.52 0.36 0.30 -0.06 0.60 0.60 0.60 0.60 0.00 1.50 1.30 1.30 1.30 0.00 0.90 0.62 0.76 0.75 -0.01 2.80 2.80 2.80 3.10 0.30 0.50 0.50 0.50 0.50 0.00 0.00 1.50 1.50 1.50 0.00 1.21 1.21 1.21 1.21 0.00 0.90 0.90 0.90 0.90 0.00 0.89 0.79 0.82 0.94 0.12 0.10 0.10 0.10 0.10 0.00 0.65 0.65 0.65 0.65 0.00 0.30 1.00 0.35 0.40 0.05 0.20 0.40 0.00 0.00 0.00 6.49 7.14 6.84 7.59 0.75 1.15 1.15 1.15 1.15 0.00 1.99 1.99 1.99 2.99 1.00 0.60 0.60 0.72 0.60 -0.12 0.70 0.85 0.72 0.50 -0.22 0.90 0.90 0.90 1.00 0.10 0.63 0.63 0.63 0.63 0.00 0.55 0.55 0.55 0.55 0.00 0.90 0.62 0.35 0.55 0.20 0.15 0.50 0.35 0.35 0.00 0.00% 0.00% (18.35)% 24.14% (18.09)% (3.23)% 0.00% 0.00% 0.00% (16.67)% 0.00% 0.00% (1.32)% 10.71% 0.00% 0.00% 0.00% 0.00% 14.63% 0.00% 0.00% 14.29% 0.00% 10.96% 0.00% 50.25% (16.67)% (30.56)% 11.11% 0.00% 0.00% 57.14% 0.00% Total Capital Project Fund 30.61 33.79 32.61 36.40 3.79 11.62% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 499 TABLE OF ORGANIZATION Table of Organization Lf FY 2017 Actuals FY 2018 Actuals FY 2019 Adopted Budget FY 2020 Adopted Budget FY 2020 Change FTE FY 2020 Change % Printing and Mailing Services Manager Revenue Collections Offset Equipment Operator 0.10 1.52 0.10 1.52 Total Printing and Mailing Services 1.62 1.62 0.101 1.52 0.10 1.52 0.00 0.00% 0.00 0.00% 1.62 1.62 0.00 0.00% Special Revenue Funds Account Specialist Account Specialist -Lead Administrative Assistant Administrative Associate II Administrative Associate III Associate Planner Building Serviceperson-Lead Chief Transportation Official Community Service Officer Coordinator Public Works Projects Electrician Facilities Maintenance -Lead Facilities Painter Facilities Technician Management Analyst Manager Community Services Senior Program Manager Maintenance Operations Manager Revenue Collections Parking Operations -Lead Program Assistant II Senior Planner Street Maintenance Assistant Street Sweeper Operator Transportation Planning Manager 1.62 1.62 1.87 1.87 0.00 0.95 0.95 0.55 0.55 0.00 0.00 0.00 0.00 0.35 0.35 0.20 0.20 0.20 0.20 0.00 0.00 0.00 0.21 0.00 -0.21 0.00 0.00 0.42 0.25 -0.17 0.20 0.00 0.00 0.00 0.00 0.00 0.05 0.00 0.00 0.00 0.50 0.50 0.50 0.50 0.00 0.00 0.20 0.20 0.20 0.00 0.20 0.20 0.20 0.20 0.00 0.15 0.15 0.15 0.15 0.00 0.25 0.25 0.25 0.25 0.00 0.45 0.45 0.45 0.45 0.00 0.02 0.02 0.17 0.35 0.18 1.00 1.00 1.00 1.00 0.00 0.19 0.19 0.19 0.19 0.00 0.28 0.28 0.28 0.28 0.00 0.50 0.00 0.55 0.60 0.05 0.45 0.00 0.00 0.00 0.00 0.36 0.40 0.40 0.40 0.00 2.00 2.00 2.00 2.00 0.00 0.37 0.37 0.37 0.37 0.00 0.00 0.30 0.24 0.50 0.26 0.00% 0.00% 0.00% 0.00% (100.00)% (40.48)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 105.88% 0.00% 0.00% 0.00% 9.09% 0.00% 0.00% 0.00% 0.00% 108.33% Total Special Revenue Funds 9.69 9.13 10.20 10.66 0.46 4.51% Technology Fund Administrative Assistant Assistant Director Administrative Services Business Analyst 1.00 0.10 1.00 Desktop Technician 6.00 Director Information Technology/CIO 1.00 1.00 0.10 1.00 6.00 1.00 1.00 0.10 1.00 6.00 1.00 1.00 0.10 1.00 6.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 500 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET Table of Organization !Li Manager Information Technology Manager Information Technology Security Principal Business Analyst Senior Business Analyst Senior Management Analyst Senior Technologist Technologist FY 2017 Actuals 4.00 1.00 1.00 2.00 1.00 16.00 1.00 FY 2018 Actuals 4.00 1.00 1.00 2.00 1.00 17.00 1.00 TABLE OF ORGANIZATION FY 2019 Adopted Budget 3.00 1.00 1.00 2.00 1.00 18.00 1.00 FY 2020 Adopted Budget 3.00 1.00 1.00 2.00 1.00 18.00 1.00 FY 2020 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2020 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Technology Fund 35.10 36.10 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 Fleet Services Coordinator Management Analyst Management Assistant Manager Fleet Motor Equipment Mechanic II Motor Equipment Mechanic -Lead Project Manager Senior Management Analyst 1.00 0.25 1.00 2.00 2.00 0.20 0.00 1.00 6.00 2.00 1.00 0.08 1.00 0.25 1.00 2.00 2.00 0.20 0.00 1.00 6.00 2.00 1.00 0.08 1.00 0.25 1.00 2.00 2.00 0.20 0.00 1.00 6.00 2.00 1.00 0.08 0.00 0.25 1.00 2.00 1.00 0.20 1.00 1.00 6.00 2.00 1.00 0.08 -1.00 0.00 0.00 0.00 -1.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 (100.00) % 0.00% 0.00% 0.00% (50.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Vehicle Replacement and Maintenance Fund 16.53 16.53 16.53 15.53 -1.00 (6.05) % Workers' Compensation Program Fund Senior Human Resources Administrator 1.00 1.00 1.00 1.00 0.00 0.00% Workers' Compensation Program Fund Total Workers' Compensation Program Fund 1.00 1.00 1.00 1.00 0.00 0.00% Total Other Funds 94.55 98.17 98.06 101.31 3.25 3.31% Total Citywide Positions 1,052.10 1,058.95 1,041.35 1,034.85 -6.50 (0.62) % TABLE OF ORGANIZATION • "_.ITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 501 TABLE OF ORGANIZATION 1 In FY 2020, Development Services and the Planning and Community Environment Department have been combined into the Planning and Development Services Department. 2 In FY 2020, a new Office of Transportation has been created within the City Manager's Office. Staffing for Transportation in prior years is shown in the Planning and Development Services Department. For demonstrative purposes, the departmental section of the Office of Transportation includes prior year staffing levels. 3 The Heavy Equipment Operator FTE count includes the classifications of Heavy Equipment Operator, Electric Heavy Equipment Operator, and WGW Heavy Equipment Operator. 502 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET ■ • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 503 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 2020 Operating Budget is included below. This ordinance was approved and adopted by the City Council on June 17, 2019. BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 505 DocuSign Envelope ID: C8F8D923-A8AF-4858-9CA1-F7164CB3A9C2 ORDINANCE NO. 5471 Ordinance of The Council of the City of Palo Alto Adopting the Budget for Fiscal Year 2020 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 2020; and B. Pursuant to the provisions of Section 12 of Article II I of the Charter, the Council did, on June 17, 2019, 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 17, 2019, 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 2020: (a) The budget document (Exhibit "1") containing the proposed operating and capital budgets submitted on April 22, 2019, by the City Manager for Fiscal Year 2020, entitled "City of Palo Alto - City Manager's Fiscal Year 2020 Proposed Budget" covering General Government Funds, Enterprise Funds, Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and (b) The Amendments to the City Manager's Fiscal Year 2020 Proposed Budget, attached hereto as Exhibit "2," and Exhibit "3", and made a part hereof; and (c) Changes and revised pages in the Table of Organization displayed on pages 465 through 482 of "Exhibit 1," and as attached hereto as Exhibit "4" made a part hereof; and 20190627 tlh 0140201 1 506 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET DocuSign Envelope ID: C8F8D923-A8AF-4858-9CA1-F7164CB3A9C2 (d) Fee changes to the Municipal Fee Schedule, attached hereto as Exhibit "5" and made a part hereof. 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 established and as may from time to time be amended. SECTION 5. Appropriations for the Fiscal Year 2019 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 2019 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2020. 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 2019 appropriations carried forward as provided in Section 5. SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City's funds to the Director of Administrative Services, as Treasurer, in accordance with the City's Investment Policy for Fiscal Year 2020. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "5". Where required by law, the amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department fees relating to a "development project" as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. 20190627 tlh 0140201 2 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 507 DocuSign Envelope ID: C8F8D923-A8AF-4858-9CA1-F7164CB3A9C2 SECTION 10. Certain fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. Where required by law, the amount of these fees do 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 17, 2019 AYES: CORMACK, DUBOIS, FILSETH, FINE, KNISS, KOU NOES: TANAKA ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: DocuSigned by: gel M:.naz 2 2a347DA4o4G Dams Sig ned by: i9n2n47„2.x,,2 City Clerk Mayor APPROVED AS TO FORM: APPROVED: FDucuSigned by: ttal sir 83A473p1X36.7 AO DocuSign®d by; d S(.Aa1a F2DCA1aC£CBD4F',} City Manager Let 2 DoauSigned by: rA+oneaczganan4 City Attorney Director of Administrative Services 20190627 tlh 0140201 3 508 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION Fiscal Year 2020 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 2020 is included below. This resolution was adopted by the City Council on June 24, 2019. APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED BUDGET 509 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 771C62EE-1A97-4F01-B300-FA0A5B7D3C07 Resolution No. 9849 Resolution of the Council of the City of Palo Alto Determining the Calculation of the Appropriations Limit for Fiscal Year 2020 a. Under Article XI I I B of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit (Limit); and b. Since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with inflation and population adjustment factors; and c. Pursuant to Government Code Section 37200, the calculation of the Limit and the total appropriations subject to the limit were set forth in the annual budget of the City for Fiscal Year 2020, which was adopted by ordinance of the Council on June 17, 2019; and d. Pursuant to Government Code sections 7901 and 7910, the final calculation of the Limit has been determined, and the adjustment factors on which the calculation is based are a 3.85% percent change in California per capita income and a 0.33% percent change in the population growth for the County of Santa Clara; and e. The documentation used in the determination of the Limit has been made available to the general public for fifteen (15) days prior to the date of adoption of this resolution; and f. According to the final calculation, the City's net appropriations subject to limitation are approximately $127.51 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 2020, 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 $45.25 million. SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of the City for Fiscal Year 2020, a copy of which is attached hereto as Exhibit 1. // 1 510 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 771C62EE-1A97-4F01-B300-FA0A5B7D3C07 SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, and, therefore, no environmental assessment is necessary. INTRODUCED AND PASSED: June 24, 2019 AYES: CORMACK, DUBOIS, FILSETH, FINE, KNISS, KOU, TANAKA NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: DocuSi ned by: ,- Doc uSigned by: . .. b l2FVF. T IZtlB. 'li... City Clerk Mayor DocuSigned by: APPROVED AS TO FORM: Sim Fz IJCA i9L,Gunb4F9. City Manager ❑ocuSi ®ned 6r ,t p 3A47.1110:13574A?! City Attorney 2 DocuSigned by: os+2o Uca.,,o... Administrative Services Director APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED BUDGET 511 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 771C62EE-1A97-4F01-B300-FA0A5B7D3C07 Attachment A, Exhibit 1 APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION FOR FISCAL YEAR 2020 ADOPTED BUDGET ($ IN MILLIONS) Total Budgeted Appropriations General Fund Capital Projects Funds Special Revenue Funds Debt Service Fund Combined Funds FY 2020 Adopted Budget $ f 232.10 $ = 93.09 $= 16.82 $= 4.97 $ Less: Interfund Transfers Allocated Charges Non -Proceeds Net Appropriations Subject to Limit CITY OF PALO ALTO 346.98 $ (33.99) $ - $ (9.55) $ - $ (43.54) $ (20.89) $ - $ - $ - $ (20.89) $ (51.11) $ (89.35) $ (9.61) $ (4.97) $ (155.04) $ 126.12 $ 3.74 $ (2.35) $ - $ 127.51 FY 2020 Per Capita Income Change (CA Department of Finance) 3.85% Factor A FY 2020 Population Change (Santa Clara County) Factor B 1.0385 0.33% 1.0033 FY 2019 Adopted Appropriations Limit $ 165.81 B 1.0419 Factor A x Factor FY 2020 Adopted Appropriations Limit Net Appropriations Subject to Limit Amount Under the Limit $ 172.76 $ 127.51 $ 45.25 The City of Palo Alto remains well within its appropriations limit in FY 2020. Future year limit trends can be made based on the average change in regional population and income growth. The appropriations subject to limitation includes proceeds of taxes from the General Fund, Capital Projects Fund, and Special Revenue Funds. Fiscal Year Per Capita Income Factor 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Population Change Factor Total Adjustment Factor Appropriations Limit Appropriations Subject to Limit Amount Under the Limit 1.0367 1.0040 1.0408 $ 164.84 $ 114.94 $ 50.87 1.0369 1.0082 1.0454 $ 158.36 $ 131.49 $ 26.88 1.0537 1.0130 1.0674 $ 151.48 $ 109.51 $ 41.97 1.0382 1.0113 1.0499 $ 141.92 $ 100.60 $ 41.31 0.9977 1.0150 1.0127 $ 135.17 $ 82.93 $ 52.24 1.0512 1.0157 1.0677 $ 133.48 $ 90.28 $ 43.20 1.0377 1.0124 1.0506 $ 125.01 $ 96.73 $ 28.28 1.0251 1.0089 1.0342 $ 119.00 $ 89.00 $ 30.00 0.9746 1.0144 0.9886 $ 115.06 $ 78.94 $ 36.12 1.0062 1.0220 1.0283 $ 116.38 $ 72.00 $ 44.38 On November 6, 1979, California voters approved Proposition 4, an initiative that added Article XIIIB to the state Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The Appropriations Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased each year using specified population and inflationary growth factors. 512 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • 'TY OF PALO ALTO FISCAL YEAR 2020 ADOPTED BUDGET Ending BSR Balance (in millions) Reserve Policies FINANCIAL POLICIES One of the key components of a financially stable organization is the adherence to a policy of maintaining an appropriate level of reserves. The Government Finance Officers Association (GFOA) recommends, at a minimum, that general purpose governments, regardless of size, maintain reserves (unrestricted fund balance) in their General Fund of no less than two months of operating revenues or expenditures, or a minimum of approximately 16.6 percent of General Fund operating expenditures. The GFOA further recommends that reserve levels be directly related to the degree of uncertainty the local government faces; specifically, the greater the uncertainty, the greater the financial resources necessary. Since reserves are used to mitigate risk, during these uncertain economic times, it is crucial that the City continue its practice of adhering to this GFOA guidance. This will provide the City with resources to cope with unfore- seen expenditures, unanticipated events, or revenue shortfalls. General Func 3udget Sta ailization Reserve The City's Budget Stabilization Reserve (BSR) serves as the primary General Fund reserve. By policy, the BSR is maintained in the range of 15.0 to 20.0 percent of General Fund operating expenditures, with a target of 18.5 percent. Any reduction to the reserve below 15.0 percent requires City Council approval. At the discretion of the City Manager, any BSR balance above 18.5 percent 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 expendi- tures. 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 15.0 percent of General Fund operating expenses. The table below depicts the BSR balances for seven years, the last five years of actual ending BSR balances, and two years of budgeted end- ing BSR balances. As discussed in this document, the Fiscal Year 2020 Budget assumes a BSR ending balance of $42.7 million or 18.5 percent; this is aligned with City Council direction. FY 2014 Actuals FY 2015 Actuals FY 2016 Actuals FY 2017 Actuals FY 2018 Adopted FY 2019 Adopted FY 2020 Adopted $33.1 $48.2 $49.5 $48.1 $39.1 $41.0 $42.7 % of Total Expenses 19.33% 25.96% 24.06% 22.87% 18.63% 19.16% 18.50% 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 2020 ADOPTED OPERATING BUDGET 513 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 2019, and it is recom- mended that this reserve be carried forward to Fiscal Year 2020. Crec it Rating Agencies Credit rating agencies view General Fund reserves as a critical component of strong municipal management. According to Moody's Investors Service, reserves are an important factor in the analysis of a municipality's fiscal health and, therefore, a jurisdiction's fiscal policies should include a plan for maintaining reserves. Rating agencies view sound reserves favorably, thus improving a municipality's rating and its ability to obtain low-cost financing for important proj- ects. The City is proud to report that both Moody's and Standard and Poor's (S&P) awarded their highest credit ratings, Triple A, to the City's General Obligation Bonds for library and com- munity center capital improvements in 2010 and 2013, and have reaffirmed these ratings a few times, the last one being in February 2019 by S&P and July 2019 by Moody's. These ratings demonstrate that Palo Alto's prudent financial management and fiscal strength are viewed most favorably by credit agencies. The four Utility bonds that are rated by S&P also received their highest credit rate of Triple A. Moody's has rated these Utility bonds with either their second highest (Aa1) or third highest (Aa2) ratings. Capital Fund Reserve Infrastructure Reserve (IR) The Infrastructure Reserve (IR) provides a mechanism for financing the City's infrastructure maintenance and rehabilitation requirements and allows the City to apply for reimbursable infrastructure grants and respond to urgent infrastructure needs. The primary purpose of the IR is to fund projects which are critical to the maintenance of existing infrastructure. Between FY 2012 and FY 2018 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 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 514 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET FINANCIAL POLICIES 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 Man- ager'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 report- ing requirements, is in the Debt Service Fund Overview section. Invest -nent Policy 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/or with a trust - 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, fidu- ciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, 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 safe- guard 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. City staff is evaluating possible recommendations to the City Council for changes to the Invest- ment Policy and other financial practices to encourage investments that support sound envi- ronmental, 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 enti- ties that manufacture tobacco products, firearms, or nuclear weapons and production and/or FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 515 FINANCIAL POLICIES drilling of fossil fuels. Staff will be looking at making a recommendation to formalize this prac- tice in the Investment Policy. 516 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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; natural environment; safety; community services and facilities; and business and economics. Its focus is on the physical form of the City and is applicable to both public and private properties. The Budget integrates the 2030 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 2020 ADOPTED OPERATING BUDGET 517 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 1.00 FTE employee works full time; a 0.50 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. 518 GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING 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 2020 ADOPTED OPERATING BUDGET 519 CITY OF PALO ALTO AMERICANS WITH DISABILITIES ACT CITY OF PALO ALTO 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 AMERICANS WITH DISABILITIES ACT • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 521 CITY OF PALO ALTO PALO ALTO 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