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HomeMy WebLinkAbout2016-06-13 City Council Agenda PacketCity Council 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. June 13, 2016 Regular Meeting Council Chambers 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 10 days preceding the meeting. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Closed Session 6:00-7:00 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Molly Stump, Suzanne Mason, Rumi Portillo, Dania Torres Wong, Allyson Hauk) Employee Organizations: Palo Alto Fire Chiefs’ Association (FCA); Management, Professional and Confidential Employees; Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a) Special Orders of the Day 7:00-7:10 PM 2.Proclamation to Honor Paula Kirkeby for her Contributions to theCommunity REVISED 2 June 13, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Agenda Changes, Additions and Deletions City Manager Comments 7:10-7:20 PM Oral Communications 7:20-7:35 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 7:35-7:40 PM 3.Approval of Action Minutes for the May 23 and 31, 2016 CouncilMeetings Consent Calendar 7:40-7:45 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 4.Authorize the City Manager to Execute an Agreement Between the City of Palo Alto and ENGEO Incorporated, for a Hydrologic and Hydraulic Study of Buckeye Creek in an Amount Not-to-Exceed $104,998 5.Approve and Authorize the City Manager to Execute a Contract With Nova Partners, Inc., in an Amount Not-to-Exceed $4,200,471 to Perform Program Management Services in Support of Nine Infrastructure Plan Projects Including the Public Safety Building 6.Adoption of Fiscal Year 2017 Investment Policy 7.Approval and Authorization for the City Manager to Sign a Letter Commenting on the City of East Palo Alto's General Plan Update and Draft Environmental Impact Report 8.Authorize the City Manager or his Designee to Execute the Amended Indemnity Agreement With Santa Clara Stadium Authority to Allow Provision of Requested Law Enforcement Services to Levi’s Stadium Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:45-9:45 PM 9.PUBLIC HEARING & PROPOSITION 218 HEARING: Adoption of Budget Amendment for Fiscal Year (FY) 2017, Including Adoption of Operating & Capital Budgets and Municipal Fee Schedule; Adoption of the Following Resolutions: Adopting a Dark Fiber Rate Increase of 3.2 Percent and Amending Utility Rate Schedules EDF-1 & EDF-2; Approving the FY 2017 Electric Financial Plan and Amending the 3 June 13, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Electric Utility Reserves Management Practices; Adopting an Electric Rate Increase of 11 Percent and Amending Utility Rate Schedules E-1, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, E-14, & E-16 & Repealing Utility Rate Schedules E-18 & E-18-G; Approving the FY 2017 Gas Utility Financial Plan; Adopting a Gas Rate Increase of 8 Percent and Amending Utility Rate Schedules G-1, G-1-G, G-2, G-2- G, G-3, G-3-G, G-10, & G-10-G; Adopting Refuse Rate Changes Including a 7 Percent Decrease and Up to a 9 Percent Increase and Amending Utility Rate Schedule R-1, and Consolidating Utility Rate Schedules R-2 & R-3 Into a new Utility Rate Schedule Designated R-C; Amending Utility Rate Schedule D-1 to Increase Storm Drain Rates 3.2 Percent per Month per Equivalent Residential Unit for FY 2017; Approving the FY 2017 Wastewater Collection Utility Financial Plan; Adopting a Wastewater Collection Fee Increase of 9 Percent & Amending Utility Rate Schedules S-1, S-6, and S-7; Approving the FY 2017 Water Utility Financial Plan; Adopting a Water Rate Increase of 6 Percent and Amending Utility Rate Schedules W-1, W-2, W-3, W-4, & W-7; Amending Salary Schedules for the Utilities Management Professional Association of Palo Alto (UMPAPA), the Service Employees International Union (SEIU), and the International Association of Fire Fighters (IAFF) 9:45-10:45 PM 10.Approval of Funding Agreement With the Palo Alto TransportationManagement Association (PATMA) and Silicon Valley Community Foundation in the Amount of $100,000 for Fiscal Year 2017 for Pilot Programs and Discussion of the PATMA Draft Strategic Plan Inter-Governmental Legislative Affairs Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 June 13, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Policy and Services Committee Meeting June 14, 2016 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Independent Police Auditor's First Report- 2015 Public Letters to Council Set 1 City of Palo Alto (ID # 6962) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: Proclamation to honor Paula Kirkeby Title: Proclamation to Honor Paula Kirkeby for her Contributions to the Community From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council present a proclamation to honor community member Paula Kirkeby. Executive Summary Arts professional, consultant, volunteer, and owner and operator of Palo Alto’s Smith Andersen Editions press and gallery, passed away on April 1, 2016. This proclamation honors her contributions to Palo Alto and the larger community. Background Paula Kirkeby came to Palo Alto in 1956 and was an active member of the community as a volunteer, gallery owner, fine art press owner and operator, and supporter of the arts. For more than three decades at Smith Andersen Editions, Kirkeby worked to provide extraordinary opportunities for artists to experience printing at the press, developing an impressive roster of editions from artists of national and international acclaim. Kirkeby was an active contributor to the Palo Alto Art Center Foundation, participated in early capital campaign leadership and served on the Palo Alto Public Art Commission. She facilitated the contribution of more than 30 works of art to the Art in Public Places collection of the City of Palo Alto. Attachments:  Paula Kirkeby Proclamation (DOCX) Proclamation PAULA KIRKEBY WHEREAS, Paula Kirkeby first came to Palo Alto in 1956 and opened an art gallery at 200 Homer Street in 1969. In 1978 she opened 3EP Press with partners Mary Margaret “Moo” Anderson and Joseph Goldyne, printing fine-art editions with artists such as Nathan Oliveira and Frank Lobedell; and WHEREAS, in 1984 Paula Kirkeby became sole owner of 3EP Press and named it Smith Andersen, relocating it to its current location on Pepper Avenue in Palo Alto; and WHEREAS, for more than three decades in a modest Palo Alto building on a residential street, Paula Kirkeby provided extraordinary opportunities for artists to experience printing at the press, developing an impressive roster of editions from artists of national and international acclaim such as Bruce Conner, Enrique Chagoya, Sam Francis, George Herms, Ed Moses, Miriam Schapiro and so many more; and WHEREAS, Paula Kirkeby coordinated exhibitions for artists from all over the world to share their work with the Palo Alto community; and WHEREAS, as an active volunteer, Paula Kirkeby served on the Palo Alto Public Art Commission, facilitating the contribution of more than 30 works of art to the Art in Public Places Collection of the City of Palo Alto and also served on the early capital campaign leadership group of the Palo Alto Art Center Foundation; and WHEREAS, Paula Kirkeby was an art enthusiast, collector, consultant, gallery professional and community volunteer who worked tirelessly and passionately to create a vital community of friends, collectors, artists and museum professionals at Smith Andersen Editions; and WHEREAS, Paula Kirkeby died in her Palo Alto home on April 1, 2016 at age 81, leaving behind a legacy of art that continues to benefit the entire community. NOW, THEREFORE, I, PATRICK BURT, Mayor of the City of Palo Alto, on behalf of the City Council do hereby extend its sincere appreciation and gratitude to Paula Kirkeby for her significant contributions to Palo Alto and the larger community. Presented: June 13, 2016 ______________________________ Patrick Burt Mayor CITY OF PALO ALTO OFFICE OF THE CITY CLERK June 13, 2016 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the May 23 and 31, 2016 Council Meetings Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS:  Attachment A: 05-23-16 DRAFT Action Minutes (PDF)  Attachment B: 05-31-16 DRAFT Action Minutes (DOC) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 11 Special Meeting May 23, 2016 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:05 P.M. Present: Berman arrived at 5:07 P.M., Burt, DuBois, Filseth, Holman arrived at 5:27 P.M., Kniss, Scharff, Schmid, Wolbach Absent: Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Molly Stump, Suzanne Mason, Rumi Portillo, Dania Torres Wong, Allyson Hauk) Employee Organizations: Palo Alto Police Managers’ Association (PAPMA); Palo Alto Fire Chiefs’ Association (FCA); and Utilities Management and Professional Association of Palo Alto (UMPAPA); Management, Professional and Confidential Employees Authority: Government Code Section 54957.6(a). MOTION: Council Member Kniss moved, seconded by Council Member Wolbach to go into Closed Session. MOTION PASSED: 7-0 Berman, Holman absent Council went into Closed Session at 5:06 P.M. Council returned from Closed Session at 6:05 P.M. Mayor Burt announced no reportable action. DRAFT ACTION MINUTES Page 2 of 11 City Council Meeting Draft Action Minutes: 5/23/16 Special Orders of the Day 2. Presentation of the Winners in the Emergency Services/FEMA Art Poster Contest. Agenda Changes, Additions and Deletions None. Consent Calendar MOTION: Vice Mayor Scharff moved, seconded by Council Member Berman to approve Agenda Item Numbers 3-4. 3. Adoption of the Palo Alto Junior Museum & Zoo Collections Policy. 4. Ordinance 5383 Entitled, “Ordinance of the Council of the City of Palo Alto Repealing and Restating Chapter 16.17 of the Palo Alto Municipal Code, California Energy Code, 2016 Edition, and Local Amendments and Related Findings (FIRST READING: May 2, 2016 PASSED: 9-0).” MOTION PASSED: 9-0 Action Items 5. PUBLIC HEARING: Approval of a Site and Design and Architectural Review Application and Mitigated Negative Declaration for the Project Located at 2515-2585 El Camino Real to Allow a new 39,858 Square Foot, 3-Story Mixed-use Building Including Retail, Office, 13 Residential Condominium Units and one Level of Underground Parking on a 39,638 Square Foot lot to Replace a 9,694 Square Foot Existing Restaurant (Olive Garden). Approval of a Conditional Use Permit (CUP) to Exceed the 5,000 Square Foot Office for the Site by Approximately 4,835 Square Feet. Zoning Districts: CC(2) and CN. The Planning and Transportation Commission Recommended Approval. Public Hearing opened at 7:58 P.M. Public Hearing closed at 8:22 P.M. DRAFT ACTION MINUTES Page 3 of 11 City Council Meeting Draft Action Minutes: 5/23/16 MOTION: Vice Mayor Scharff moved, seconded by Mayor Burt to: A. Approve the Initial Study/Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program; and B. Approve the Record of Land Use Action approving the Site and Design Review, Conditional Use Permit and Architectural Review application to allow the construction of a three story, mixed-use development, with one level of underground parking on a 39,908 square foot lot at 2515-2585 El Camino Real; and C. Require the ground floor be retail; and D. Require the project be fully parked; and E. Require a robust Transportation Demand Management (TDM) program to ensure a 30 percent reduction in trips. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove Part D of the Motion and add to the Motion: E. Reduce the current proposed surface parking by four spaces from the Staff proposal, with the resulting land dedicated to common open space; and F. Direct Staff to work with the Applicant to redesign the plaza to create an active pedestrian used area. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “authorize up to 25 percent of retail space be allowed for restaurant use.” (New Part G) INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to add to the Motion, “require the project contribute one complete unit of in-lieu fees towards the Below Market Rate Housing Fund.” (New Part H) SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Holman to reject the proposed project based on an inability DRAFT ACTION MINUTES Page 4 of 11 City Council Meeting Draft Action Minutes: 5/23/16 to make the following findings, loading space, traffic concerns, mass and scale, and parking. INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER “Council cannot make Architectural Review (AR) Finding Numbers 2, 4, 5, and 6. The Sherman Avenue and El Camino Real street faces cannot make Finding 1.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “Council cannot make Architectural Review (AR) Findings Numbers 2, 4, 5, and 6. The Sherman Avenue and El Camino Real street faces cannot make Finding 1” with “further, Architectural Review (AR) Findings Numbers 2, 4, 5, and 6. The Sherman Avenue and El Camino Real street faces cannot be met.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “2, 4, 5, and 6. The Sherman Avenue and El Camino Real street faces cannot be met” with “2, 4, 5, and 6 cannot be met regarding Sherman Avenue and El Camino Real street faces.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “to make the following findings” with “to make findings in regards to.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “findings in regards to loading space, traffic concerns, mass and scale, and parking further” with “Site and Design Finding Number 4, which includes Policy L-12, which the project does not comply with and in regards to loading space, traffic concerns, mass and scale, and parking, nor does the project satisfy.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “additionally there are Code compliance issues having to do with off-street loading.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “and parking.” DRAFT ACTION MINUTES Page 5 of 11 City Council Meeting Draft Action Minutes: 5/23/16 INCORPORATED INTO THE SUBSITITUE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion, “and parking.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “Findings Numbers 2, 4, 5, and 6” with “Findings numbers 2, 5, 6 and 16.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “reject the proposed project based on an inability to make Site and Design Finding Number 4, which includes Policy L-12, which the project does not comply with, nor does the project satisfy, Architectural Review (AR) Findings Numbers 2, 5, 6, and 16 cannot be met” with “return the project to the Architectural Review Board such that Architectural Review (AR) Findings Numbers 2, 5, 6, and 16 cannot be met.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “such that” with “and the Applicant incorporating Parts C-H of the original Motion, to make the project compatible with.” INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “the approximately 4,800 square feet of ground floor office is converted to retail.” SUBSTITUTE MOTION RESTATED: Council Member DuBois moved, seconded by Council Member Holman to return the project to the Architectural Review Board and the Applicant incorporating Parts C-H (included below) of the original Motion, to make the project compatible with Architectural Review (AR) Findings Numbers 2, 5, 6, and 16 which cannot be met regarding Sherman Avenue and El Camino Real street faces, additionally there are code compliance issues having to do with off street loading. The approximately 4,800 square feet of ground floor office is converted to retail; and C. Require the ground floor be retail; and D. Require a robust Transportation Demand Management (TDM) program to ensure a 30 percent reduction in trips; and DRAFT ACTION MINUTES Page 6 of 11 City Council Meeting Draft Action Minutes: 5/23/16 E. Reduce the current proposed surface parking by four spaces from the Staff proposal, with the resulting land dedicated to common open space; and F. Direct Staff to work with the Applicant to redesign the plaza to create an active pedestrian used area; and G. Authorize up to 25 percent of retail space be allowed for restaurant use; and H. Require the project contribute one complete unit of in-lieu fees towards the Below Market Rate Housing Fund. SUBSITUTE MOTION AS AMENDED FAILED: 4-5 DuBois, Filseth, Holman, Schmid yes INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace Part H of the Motion with, “with the agreement of the Applicant, the project will contribute two Below Market Rate Housing Units on site.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part G, “upon approval of the Director.” MOTION RESTATED: Vice Mayor Scharff moved, seconded by Mayor Burt to: A. Approve the Initial Study/Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program; and B. Approve the Record of Land Use Action approving the Site and Design Review, Conditional Use Permit and Architectural Review application to allow the construction of a three story, mixed-use development, with one level of underground parking on a 39,908 square foot lot at 2515-2585 El Camino Real; and C. Require the ground floor be retail; and D. Require a robust Transportation Demand Management (TDM) program to ensure a 30 percent reduction in trips; and DRAFT ACTION MINUTES Page 7 of 11 City Council Meeting Draft Action Minutes: 5/23/16 E. Reduce the current proposed surface parking by four spaces from the Staff proposal, with the resulting land dedicated to common open space; and F. Direct Staff to work with the Applicant to redesign the plaza to create an active pedestrian used area; and G. Authorize up to 25 percent of retail space be allowed for restaurant use, upon approval of the Director; and H. With the agreement of the Applicant, the project will contribute two Below Market Rate Housing Units on site. MOTION AS AMENDED PASSED: 5-4 DuBois, Filseth, Holman, Schmid no 6. Approval of a Contract With Biggs Cardosa Associates, Inc. in the Amount of $1,474,297 to Provide Design and Environmental Assessment Services for the Adobe Creek/Highway 101 Pedestrian Overcrossing, Capital Improvements Program Project PE-11011. MOTION: Vice Mayor Scharff moved, seconded by Council Member Wolbach to approve and authorize the City Manager or his designee to execute Contract No. C12162262, a professional services agreement with Biggs Cardosa Associates, Inc. (Design Agreement), in a not-to-exceed amount of $1,474,297 for Phase 1 services, to provide environmental assessments, engineering, landscape, and architectural design services for the Highway 101 Bicycle/Pedestrian Overcrossing Capital Improvement Program (CIP) Project (PE-11011), including $1,340,270 for basic services and $134,027 for additional services under Phase 1 and return to Council prior to public outreach. MOTION PASSED: 9-0 7. Review and Discussion Regarding the Urban Forest Master Plan Draft Revisions to Goals, Policies, and Programs and Alternate Vision Statement. MOTION: Council Member Holman moved, seconded by Council Member DuBois to direct Staff to include the following changes in the Urban Forest Master Plan: DRAFT ACTION MINUTES Page 8 of 11 City Council Meeting Draft Action Minutes: 5/23/16 A. Replace in Goal 1 Bullet 4, “trying to minimize” with “minimizing;” and B. Add to Program 1.A.ii. Bullet 6, “and multi-family” after “non- residential;” and C. Replace in Policy 3.A. Bullet 2, “WOCULS” with “WUCOLS (Water Use Classification of Landscape Species);” and D. Add to Policies 3.A.i., 3.A.ii., 3.A.iii., 3.A.v., 3.A.vi., 3.A.vii., 3.B.ii., and 3.B.iii., “Canopy and other related organizations” after “Office of Sustainability;” and E. Add to Policy 3.B.ii., “tree retention, and trimming standards” after “tree selection;” and F. Add to Program 4.A.iv., “and add funding goals for a regular maintenance program.” G. Add to Program 5.B.ix. Bullet 2, “and consideration of alternatives to removal” after “development projects;” and H. Direct Staff to improve the language of the outcome description in Program 5.B.xii.; and I. Direct Staff to add quantification of benefits to Policy 6.A.; and J. Replace in Program 6.A.i., “and divisions” with “divisions, Canopy and other related organizations;” and K. Add to Program 6.A.iv., “Canopy and other related organizations” after “relevant departments;” and L. Add to Program 6.A.iv., “root impact on and off site” (new Bullet 3); and M. Add to Program 6.B.v., “earth stability on hillsides” (new Bullet 8); and N. Direct Staff to clarify Program 6.G.i. language; and O. Direct Staff to add protections for trees of a certain size; and DRAFT ACTION MINUTES Page 9 of 11 City Council Meeting Draft Action Minutes: 5/23/16 P. Adopt the proposed alternate Vision Statement replacing Paragraph 5 with, “opportunities presented by new development will be optimized and ensure that the forest thrives and is contiguous, complex, and resilient. Negative impacts of new development will be minimized.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “as redline edits” after “Urban Forest Master Plan.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part P, “for enhancement of the urban forest” after “new development.” MOTION RESTATED: Council Member Holman moved, seconded by Council Member DuBois to direct Staff to include the following changes in the Urban Forest Master Plan as redline edits: A. Replace in Goal 1 Bullet 4, “trying to minimize” with “minimizing;” and B. Add in Program 1.A.ii. Bullet 6, “and multi-family” after “non- residential;” and C. Replace in Policy 3.A. Bullet 2, “WOCULS” with “WUCOLS (Water Use Classification of Landscape Species);” and D. Add to Policies 3.A.i., 3.A.ii., 3.A.iii., 3.A.v., 3.A.vi., 3.A.vii., 3.B.ii., and 3.B.iii., “Canopy and other related organizations” after “Office of Sustainability;” and E. Add to Policy 3.B.ii., “tree retention, and trimming standards” after “tree selection;” and F. Add to Program 4.A.iv., “and add funding goals for a regular maintenance program.” G. Add to Program 5.B.ix. Bullet 2, “and consideration of alternatives to removal” after “development projects;” and H. Direct Staff to improve the language of the outcome description in Program 5.B.xii.; and DRAFT ACTION MINUTES Page 10 of 11 City Council Meeting Draft Action Minutes: 5/23/16 I. Direct Staff to add quantification of benefits to Policy 6.A.; and J. Replace in Program 6.A.i., “and divisions” with “divisions, Canopy and other related organizations;” and K. Add to Program 6.A.iv., “Canopy and other related organizations” after “relevant departments;” and L. Add to Program 6.A.iv., “root impact on and off site” (new Bullet 3); and M. Add to Program 6.B.v., “earth stability on hillsides” (new Bullet 8); and N. Direct Staff to clarify Program 6.G.i. language; and O. Direct Staff to add protections for trees of a certain size; and P. Adopt the proposed alternate Vision Statement replacing Paragraph 5 with, “opportunities presented by new development for enhancement of the urban forest will be optimized and ensure that the forest thrives and is contiguous, complex, and resilient. Negative impacts of new development will be minimized.” MOTION AS AMENDED PASSED: 9-0 Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements Council Member Wolbach reported his attendance at the Valley Transportation Authority (VTA) Town Hall meeting last Wednesday. Several Palo Alto community members were also in attendance. Council Member Schmid reported his attendance at the Bay Area Water Supply & Conservation Agency (BAWSCA) meeting this past week. At the meeting it was reported that the Hetch Hetchy and San Pedro Dams are at 75 percent of capacity and the normal level is 82 percent. The Agency reported there is sufficient water for three years under drought conditions. The following was reported at the meeting, BAWSCA member agencies have DRAFT ACTION MINUTES Page 11 of 11 City Council Meeting Draft Action Minutes: 5/23/16 achieved 88 percent of targeted water savings; the State Water Resources Control Board is moving towards a self-certifying model for water districts; and the San Francisco Public Utilities Commission (SFPUC) is beginning an update to the water maps, which determine the allocation of water to each water district customer. The water allocation for Palo Alto may be reduced. Vice Mayor Scharff reported his attendance on a telephone call with the Federal Aviation Administration (FAA) earlier today. Various flight routes were discussed. He reported his attendance at the Association of Bay Area Governments (ABAG) General Assembly and Executive Board meetings last week. He provided an update on the potential merger of ABAG and the Metropolitan Transit Commission (MTC). He reported, the MTC is scheduled to review and potentially approve the merger on Wednesday. Mayor Burt reported on the San Francisquito Creek Joint Powers Authority (JPA) this past Thursday. The five member agencies announced additional funding contributions, which cover the budget short fall for the downstream from Highway 101 project. The JPA plans to continue exploring ways to increase the allowable construction schedule for the project. The presence of endangered species has limited the construction schedule to several weeks each year. He reported his attendance this past weekend at the 2016 Smart City Conference & Expo and Job Fair at the Santa Clara County Building. Numerous City of Palo Alto smart city initiatives were highlighted during the Conference. Council Member Kniss announced that the California League of Cities, Peninsula Division quarterly meeting is scheduled this Thursday night, with a discussion of affordable housing. Adjournment: The meeting was adjourned at 11:45 P.M. CITY OF PALO ALTO CITY COUNCIL COMMITTEE OF THE WHOLE DRAFT ACTION MINUTES Page 1 of 1 Special Meeting May 31, 2016 The City Council of the City of Palo Alto met on this date in the Community Meeting Room at 6:05 P.M. Present: Berman, Burt, DuBois, Filseth arrived at 6:10 P.M., Holman, Kniss, Scharff, Schmid, Wolbach Absent: Study Session 1. Council Study Session on Sea Level Rise. Action Items At this time Council heard Agenda Item Numbers 2 and 3 concurrently. 2. Second Quarter Review of Council Priorities for 2016 and Discussion and Potential Direction to Staff on the 2016 Staff Work Plan, Including Process Recommendations to Prioritize Work and Achieve Results. 3. Council Member Discussion on Future Issues and Concerns With a Special Focus on the Second Half of 2016, With Potential Direction to Staff. NO ACTION TAKEN 4. Reports From Council Appointed Officers (CAOs) on the State of the City. NO ACTION TAKEN. Adjournment: The meeting was adjourned at 11:17 P.M. City of Palo Alto (ID # 6957) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: Buckeye Creek Hydrologic and Hydraulic Study Title: Authorize the City Manager to Execute an Agreement Between the City of Palo Alto and ENGEO Incorporated, for a Hydrologic and Hydraulic Study of Buckeye Creek in an Amount Not-to-Exceed $104,998 From: City Manager Lead Department: Community Services Recommendation Staff recommends Council authorize the City Manager to approve a contract with ENGEO Incorporated for a hydrologic and hydraulic study to identify and develop preliminary alternatives for flood protection and erosion control at Buckeye Creek in an amount not to exceed $104,998, which includes a $9,545.50 contingency for supplemental services if needed (Attachment A). Background Buckeye Creek has a drainage area of approximately 1.35 square miles. It originates at the upper end of Wildhorse Valley in Foothills Park, splits a 7.7 acres parcel of parkland, and flows through a series of culverts before discharging into Los Trancos Creek. A significant portion of Buckeye Creek is channelized and deeply incised. During heavy storms, the creek downcuts and eroded sediments wash downstream and deposit in various locations along the creek. The creek overflows during heavy rain events, especially along the 7.7 acres parcel where the creek flattens out through a 2.1 acres section of the parcel. Collected sediments need to be removed two to three times a year in areas where the creek flows through a series of culverts to prevent flooding. Past erosion control measures such as gabions and check dams are no longer effective at reducing erosion and flooding. The hydrologic and hydraulic study will provide two alternatives to resolve the creek’s downcutting and erosion problems which result in flooding in Foothills Park. Each alternative will create opportunities to provide riparian and erosion control measures supporting and enhancing parkland habitat and the environment. Based on the findings City of Palo Alto Page 2 of the study, future funding may be proposed for implementing and constructing improvements. The Infrastructure Blue Ribbon Commission recommended a study of Buckeye Creek be conducted to determine conditions and recommendations to reduce creek sedimentation and erosion. In addition, the Parks and Recreation Commission recommended to Council last year the study should be completed before making any recommendations on how to use a 7.7 acres parcel impacted downstream with creek debris and sediment. Discussion The City issued a Request for Proposal in February 2016, and of the seven proposals received four were selected for an interview. Ultimately, ENGEO Incorporated was selected based on their proposal, interview, experience, references, and proposal cost for the study. ENGEO will be tasked with analyzing flooding conditions and recommending flood control structures to provide both drainage and erosion control solutions for Buckeye Creek. This project will consider maintenance needs, land stewardship practices, and will include outreach to stakeholders. Control measures may include new culverts, gabions, detention basins, creek re-alignment to its historic alignment, and native plant riparian re-vegetation, etc. The hydrologic and hydraulic study is a critical precursor to decisions regarding the future use of the 7.7 acres of parkland at Foothills Park. The recommendations on how to best address Buckeye Creek’s hydrology challenges will influence the City's decision on use of the 7.7 acres. The study will provide adequate information to allow City Staff and Council to make decisions regarding the cost and desirability of implementing and constructing improvements along Buckeye Creek and the future use of the 7.7 acres of parkland. Timeline  July 2016 - Contract Issuance  December 2016 – Hydrologic and hydraulic analysis  March 2017 – Alternative solutions and cost benefit analysis  July 2017 – Project report and recomendations Resource Impact The cost to the City for this hydrologic and hydraulic study is $95,452.50; the proposed agreement also includes a 10% contingency of $9,545.50 for additional supplemental services if needed, bringing the total not to exceed amount to $104,988.00. The funding for this study has been established as CIP PG-15000 in the approved 2016 Capital Improvement Program Budget. City of Palo Alto Page 3 Policy Implications This proposal is aligned with Comprehensive Plan goal N-1: A Citywide Open Space System that Protects and Conserves Palo Alto’s Natural Resources and Provides a Source of Beauty and Enjoyment for Palo Alto Residents. It is also aligned with goal N- 2: Conservation of Creeks and Riparian Areas as Open Space Amenities, Natural Habitat Areas, and Elements of Community Design. Environmental Review As a study, completion of this report does not constitute a project requiring review under the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Contract C16162837 ENGEO Incorporated (PDF) Professional Services Rev. March 31, 2015 1 CITY OF PALO ALTO CONTRACT NO. C16162837 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ENGEO INCORPORATED FOR PROFESSIONAL SERVICES This Agreement No. C16162837 is entered into on this ________ day of June, 2016, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ENGEO INCORPORATED, a California corporation, located at 2010 Crow Canyon Place, Suite 250, San Ramon, CA 94583, telephone 925-866-9000 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to conduct a hydrologic and hydraulic study to identify and develop preliminary alternatives for flood protection and erosion control at Buckeye Creek located in Foothills Park, Palo Alto, (“Project”) and desires to engage a consultant to develop two (2) sustainable long-term alternatives to reduce flood risk and minimize erosion and sediments problem in Buckeye creek, its watershed and the 7.7 acres parkland in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached at Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement. In no event shall the term of this Agreement extend past September 29, 2017. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 2 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Ninety-five Thousand Four Hundred Fifty-two and 50/100 Dollars ($95,452.50). In the event Additional Services are authorized, the total compensation for Services, Additional Services and reimbursable expenses shall not exceed One Hundred Four Thousand Nine Hundred Ninety- eight Dollars ($104,998.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 3 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: 1. WRA, Inc.: Biology and landscape architecture support. 2. PLS Surveys, Inc.: Land surveying. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 4 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Jonathan Buck as the project manager to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Daren Anderson, Community Services Department, Open Space Parks & Golf Division, 3201 East Bayshore Road, Palo Alto, CA 94303, Telephone: 650-496- 6950. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use, provided, however, that CONSULTANT may make reasonable commercial use of the work product for promotional and business development purposes. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and except as provided herein, neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. Notwithstanding the above, CONSULTANT’S aggregate liability hereunder shall be limited by CITY to $5,000,000. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 5 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 6 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 7 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements:  All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks.  Goods purchased by CONSULTANT on behalf of CITY shall be purchased in DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 8 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office.  Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 9 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement // // // // // // // // // // // // // // // // // // // // // // DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 10 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager or Designee APPROVED AS TO FORM: __________________________ City Attorney or Designee CONSULTANT: ENGEO INCORPORATED By:___________________________ Name: Uri Eliahu Title: President Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 11 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx EXHIBIT “A” SCOPE OF SERVICES Introduction The City of Palo Alto (City) plans to conduct a hydrologic and hydraulic study to identify and develop preliminary alternatives for flood protection and erosion control at Buckeye Creek located in Foothills Park, Palo Alto, CA. Buckeye Creek has a drainage area of approximately 1.35 square miles and it originates at the upper end of Wildhorse Valley in Foothills Park, splits a 7.7 acres park land and flows through a series of culverts before discharging into Los Trancos Creek. A significant portion of Buckeye Creek is channelized and deeply incised. During heavy storms, the creek downcuts and the eroded sediments wash downstream and deposit in various locations along the creek, especially along the 7.7 acres parcel where the creek flattens out through a 2.1 acre section of the parcel. The creek overflows during heavy rain events. Collected sediments must be removed two to three times a year to prevent flooding. The removal is especially important before the creek flows through a series of culverts at the end of the 7.7 acres parcel. Past erosion control measures such as gabions and check dams have not been effective at reducing erosion and flooding. Scope of Services The purpose of the project is to analyze the hydrologic and hydraulic conditions of Buckeye Creek and provide recommendations to resolve creek’s downcutting and erosion problems that result in flooding in Foothills Park and the 7.7 acres parcel. The Consultant’s scope of services shall consist of developing two (2) sustainable long-term alternatives to reduce flood risk and minimize erosion and sediments problem in Buckeye creek, its watershed and the 7.7 acres parkland. In addition, each alternative shall create opportunities to provide riparian and erosion control measures supporting and enhancing park land habitat and the environment. The study shall provide adequate information to allow City Staff and Council to make decisions regarding the cost and desirability of implementing and constructing improvements along Buckeye Creek and the future use of 7.7 acres of park land. Potential alternatives shall include a combination of engineering and/or low impact development solutions at Buckeye Creek and 7.7 acres park land to reduce flooding and erosion issues. These alternatives shall be developed based on City staff and stakeholders input. The scope of services includes the following tasks: Task 1: Preliminary Investigation and Input Task 1.1: Kick-off Meeting and Data Collection The Consultant shall attend and conduct a kick-off meeting with City staff to review project goals, approach, work plan, and schedule. City will provide any available existing documents that may be of assistance in the preliminary engineering studies related to the project. These documents may include Geographic Information System (GIS) data, topographic information, prior studies, underground utility installation, rainfall records, historic flooding/sediment DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 12 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx transport issues information, and as-built plans for prior improvements and bridges, culverts or drop structures located within the creek. Task 1.1 Deliverables: 1. Kick-off meeting agenda and minutes Task 1.2: Field Reconnaissance and Topographic Survey The consultant shall conduct a reconnaissance site visit of the project site to ascertain the level of effort required to comprehensively survey the study area and to review existing conditions. For budgeting purposes, assume that the study will require at least one surveyed cross section every 50-feet and that every inline structure (bridge, gabion grade control structure) will be surveyed. An approximate total of 50 cross sections along Buckeye Creek and an approximate 20 additional cross sections for in-line structures and an additional day of surveying to include other portions of the study area not associated with the creek are assumed for budgetary purposes. The topographic survey shall be based on the California State Plane Coordinates System Zone 3 (US ft) and NAD88. The map shall be provided to the City in AutoCAD format. Task 1.2 Deliverables: 1. Geo-referenced AutoCAD file Task 1.3: Preliminary Hydrologic & Hydraulic Analysis for Existing Conditions The Consultant shall perform a hydrologic and hydraulic analysis of the existing conditions at Buckeye Creek and prepare a Technical Memorandum in conformance with Santa Clara County standards for the watersheds tributary to Buckeye Creek for the 2-, 5- , 10- and 100-year recurrence interval storms. Given the size of the watershed, the Consultant anticipates using a National Resource Conservations Service (NRCS) runoff Curve Numbers methodology, or the rational method, which are both simplified hydrologic methods. The United States Army Corps of Engineers (USACE) Hydrologic Engineering Center’s Hydrologic Modeling System (HEC- HMS) computer simulation method shall be used to synthesize a rainfall runoff model. Based on the results of the survey in Task 1.2 and the results of the hydrology study, a steady state USACE HEC- River Analysis System (HEC-RAS) version 5.0 model of Buckeye Creek shall be prepared. The results from the hydrologic and hydraulic analysis for the existing conditions at Buckeye Creek shall be discussed with City staff. Because of uncertainty related to rainfall-runoff transformations in the hydrology study, the preliminary study shall be verified to ensure results are similar to actual events that have been recorded in historic peak rain events at Foothills Park. The hydraulic analysis shall define the geometry and hydraulic characteristics of the creek in order to determine creek capacity, velocity, water surface elevations, flooding potential, erosion and sediment aggradation. This preliminary analysis of the existing conditions must be sufficient to identify and develop preliminary project alternatives. Prepare a brief summary of the preliminary hydrologic and hydraulic analysis and results. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 13 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx Conduct a meeting with City staff to review assumptions, approach and preliminary results from the analysis. After discussion with City staff in regard to reasonableness of results as compared to actual recorded data and information, the Consultant shall provide the hydrologic and hydraulic model and a preliminary hydraulic analysis to the City. Task 1.3 Deliverables: 1. HEC-HMS and HEC-RAS models for the existing condition 2. Technical Memorandum summarizing the hydrologic and hydraulic analysis 3. Meeting minutes of model review and discussions with the City Task 1.4: Preliminary Investigation and Coordination The Consultant shall: A. Identify and develop two preliminary alternatives to address flooding, erosion and sedimentation issues at Buckeye Creek and the 7.7 acres parcel. These alternatives may be a combination of engineering and/or low impact development solutions. Improvement locations for the alternatives shall be selected based on preliminary hydrologic and hydraulic analysis, available right of way, minimal environmental impacts, cost-effectiveness, and public input. Prepare schematic designs for the alternatives. The schematic designs will assume improvements that can be simulated in hydrologic and hydraulic modeling in Task 2 below. B. Attend and conduct one (1) community meeting with environmental groups and residents to get input on desired improvements and their locations. Include cost of this meeting in Task 6. C. Based on the input received in the community meeting, develop and provide preliminary schematics and cost estimates of the proposed layouts for City’s review. D. Review flood risks, possible routes for trails over and adjacent to Buckeye Creek providing access over culverts and potential trail locations within the 7.7 acres parcel to maximize land stewardship practices. E. Evaluate existing utility conflicts and relocations based on the information provided by the City in regard to location and/or based on survey information collected during the project. F. Provide recommendations on what to do with existing stock pile of creek sediment (stored near Towle Campground), and what to do with future sediment that will be removed from the creek. G. Contact Santa Clara Valley Water District (SCVWD), USACE), California Department of Fish and Wildlife (CDFW), San Francisco Bay Regional Water Quality Control Board DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 14 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx (RWQCB), and any other permitting agencies or property owners that may provide design input, suggestions or restrictions for the project. H. Provide details on regulatory permitting requirements for both alternatives, and approximate timeframes to obtain the necessary permits. Provide opinion in terms of using any created creek or wetland channel as offset compensatory mitigation for other projects, or “mitigation matching”. I. Provide a preliminary biological assessment of the project which would identify species of concern and other global potential biological constraints. J. Identify the water management overflow needs, maintenance and land stewardship practices that will guide in further development of the alternatives. K. Provide a summary of preliminary investigation, proposed alternatives, and permitting requirements for City’s review. Address City’s comments on the preliminary investigation summary. L. Attend and conduct one (1) public meeting with environmental and resident stakeholders to receive input on the proposed preliminary alternatives. Include cost of this meeting in Task 6. M. Present the findings from the preliminary investigation including schematics, costs and a summary of public input in a meeting with City staff and receive input to start Task 2. Task 1.4 Deliverables: 1. Meeting minutes for all the meetings listed in Task 1.4. 2. Preliminary schematics and cost estimates of proposed alternatives. 3. Memorandum summarizing the preliminary investigation, proposed alternatives and their cost estimates, and permitting requirements. Task 2: Hydrology and Hydraulics The consultant shall perform hydrologic and hydraulic analysis of Buckeye Creek and its watershed for proposed alternatives. Hydrologic conditions shall be analyzed using HEC-HMS model. Site hydrology shall be defined including the 2, 5, 10- and 100-year storm recurrence intervals. The hydrologic model will provide necessary input parameters for hydraulic analysis. Hydraulic conditions shall be analyzed using HEC-RAS model. The data for 2, 5 and 10- and 100-year storm occurrence intervals will be compared and the City may decide to continue the study using one of the occurrence intervals. The consultant shall provide recommendations for selecting a design storm for proposed improvements. A. Refine the preliminary hydrologic and hydraulic analysis performed in Task 1.3 for the existing conditions to include the following information, as appropriate: DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 15 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx 1. Describe the Buckeye Creek drainage watershed, geometry, and hydrologic and hydraulic characteristics. 2. Quantify the amount of runoff generated in Buckeye Creek and its watershed. 3. Determine flow, velocity and water surface elevations. Identify existing level of protection. 4. Perform sediment transport analysis to estimate sediment flux, transport and deposition. B. Perform the hydrologic and hydraulic analysis for proposed alternatives described in Task 1.4. C. Compare results from the hydrologic and hydraulic analysis for the existing conditions and proposed improvements and assess flood risks for each alternative: 1. Refine and evaluate the schematic designs developed in Task 1.4. 2. Include pros and cons and the potential environmental impacts of each alternative. D. Meet with City staff to review approach, methodology, assumptions, results from the hydrologic and hydraulic analysis, and preliminary recommendations. Prepare meeting minutes. E. Prepare a technical memorandum summarizing the analysis performed in this task and providing preliminary recommendations. The technical memorandum shall also provide a ranking of the alternatives based on the qualitative environmental analysis and potential impacts of each alternative. Task 2 Deliverables: 1. Meeting minutes documenting the discussions from the review meeting with the City 2. Technical Memorandum summarizing the hydrologic and hydraulic analysis and preliminary recommendations on both alternatives. Task 3: Refinement of Alternative Solutions The consultant shall refine alternatives and provide schematic drawings based on refinement of alternatives for presentation to the public as follows. A. Develop conceptual design drawings, scope description and cost for two feasible alternatives developed in Task 1 and 2. The conceptual drawings shall include plan, typical and site specific cross-sections, and profile of the creek and adjacent areas. Alternatives shall include costs and timelines for improvements. In addition, develop schematic drawings prepared by a landscape architect depicting the two alternatives, including potential environmental impact pros and cons, and planning and construction timelines. B. Prepare and submit a draft alternative summary report including description of each alternative, conceptual drawings, cost estimate and work performed in this task. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 16 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx Include information/memorandums prepared in Tasks 1 and 2 as attachment to the draft alternatives summary report, as appropriate. C. Attend two (2) community and stakeholders meetings to present refined alternatives. At a minimum include cost, timeline, pros and cons, and concept drawings. D. Incorporate comments from the public meetings and prepare a final draft alternatives summary report for City’s input. Alternatives shall be further refined with staff and community input that may influence the development of the final draft alternatives. E. Attend one (1) Parks and Recreation Commission (PRC) and one (1) City Council meeting to present the alternatives analysis and to obtain further input. Costs of these meetings shall be included in Task 6. Task 3 Deliverables: 1. Meeting minutes for all meetings conducted as part of Task 3. 2. Refined conceptual drawings of two alternatives with staff and community input 3. Draft Alternatives Summary Report (PDF format and five hardcopy format) 4. Final Alternatives Summary Report (PDF format and five hardcopy format) Task 4: Cost Benefit Analysis and Budget Prepare cost estimates for the proposed alternatives. This task shall be performed concurrently with Tasks 1.4 and Task 3 with development of alternatives. A. Provide preliminary (Task 1.4) and refined cost estimates (Task 3) and a cost benefit analysis based on the existing conditions, the concept drawings, and incorporation of community comments of the two proposed improvement alternatives. B. Provide a total project budget for the two proposed alternatives, with detailed budgets and timelines based on the improvements, anticipated permitting, and design and construction costs. The existing condition analysis shall consider current maintenance costs and replacement of existing facilities to prevent utility, road erosion as necessary to maintain the system as-is. C. Provide draft and final draft cost benefit and budget documents for both alternatives for City staff input. D. Develop a decision matrix of cost estimates, and pros and cons to incorporate the various design components studied. The decision matrix shall be used to analyze the proposed alternatives and recommendations for preferred alternative. E. Include cost estimates with Task 1.4 and Task 3 documents prepared for public meetings and submittals to the City. Task 4 Deliverables: 1. Draft Alternatives Cost Estimate Summary (PDF format and five hardcopy format) 2. Final Alternatives Cost Estimate Summary (PDF format and five hardcopy format) DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 17 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx Task 5: Project Report and Recommended Option The consultant shall provide the following services for this task: A. Refine the proposed layouts of the possible designs as directed by City staff for inclusion in the draft Project Report. For each proposed alternative, there shall be layouts for the Buckeye Creek entry and exit points from Foothills Park. Designs shall include hydraulic assessments and drainage facilities for each alternative. B. Prepare preliminary engineering drawings (15%) for Buckeye Creek as determined during the preliminary investigations and refinement of alternatives. C. Provide proposed trails and drainage improvements within the 7.7 acres site to emphasize safety and land stewardship practices. D. Summarize existing utility conflicts and potential relocations. E. Summarize applicable permits, right-of-way and/or easement requirements, design and regulatory standards. F. Include a qualitative environmental assessment for each alternative, such as but not limited to, visual, geology, noise, circulation, biological assessment, right-of-way, construction, subterranean impacts and possible mitigations. G. Include detailed description of the hydrologic and hydraulic analysis, approach, methodology, and results. H. Incorporate public and City comments into the refinement of design documents after each public meeting. I. Prepare color schematics (minimum size 24” x 36”) of design options suitable for presentation to City Council and other City committees as well as to the public. J. Provide discussion and comparison including the advantages and disadvantages of each alternative. K. Prepare an executive summary that includes a comparison of each alternative and the rationale for a preferred alternative recommendation. L. Prepare a draft project report summarizing the study and alternatives analysis, cost estimates, and recommendations. The draft project report shall be provided to City staff, boards, commissions and Council for input and final acceptance. M. Incorporate comments in the draft project report and submit a final project report. Task 5 Deliverables: 1. Draft Project Report (PDF format and five hardcopy format) 2. Draft Project Report (PDF format and five hardcopy format) Task 6: Meetings The Consultant shall attend, present, and prepare presentation materials for up to 6 formal meetings with stakeholders and City Staff as described in Task 1.4 (2 meetings) and Task 3 (4 DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 18 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx meetings). In addition, the Consultant shall conduct monthly check-in conference calls with City staff. Task 6 Deliverables: 1. Presentation materials for stakeholders meetings 2. Meeting minutes of monthly conference calls Task 7: Project Management Project management and administration includes management of project performance, progress, and execution of the scope of services. Provide monthly status reports and invoicing to the City. Monthly status reports shall include information regarding work completed, work anticipated, budget and schedule status, and any issues or concerns. Perform quality assurance and quality control reviews of all work and deliverables submitted to the City. Task 7 Deliverables: 1. Monthly status reports and invoices. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 19 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Tentative Completion Completion No. of Weeks Date From NTP Task 1: Preliminary Investigation and Input 11/15/16 21 Task 2: Hydrology and Hydraulics 12/15/16 25 Task 3: Refinement of Alternative Solutions 03/15/17 40 Task 4: Cost Benefit Analysis and Budget 03/30/17 42 Task 5: Project Report and Recommended Option 07/15/17 56 Task 6: Meetings 07/15/17 56 (on-going) Task 7: Project Management 07/15/17 56 (on-going) DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 19 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed Ninety-five Thousand Four Hundred Fifty-two and 50/100 Dollars ($95,452.50). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Services, Additional Services and reimbursable expenses shall not exceed One Hundred Four Thousand Nine Hundred Ninety-eight Dollars ($104,998.00). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s project manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $95,452.50 and the total compensation for Additional Services does not exceed $9,545.50. BUDGET SCHEDULE (see attached schedule) NOT TO EXCEED AMOUNT Task 1 $ 46,445.00 (Preliminary Investigation and Input) Task 2 $ 11,945.00 (Hydrology and Hydraulics) Task 3 $ 6,455.00 (Refinement of Alternative Solutions) Task 4 $ 3,420.00 (Cost Benefit Analysis and Budget) Task 5 $ 15,700.00 (Project Study Report and Recommendation Option) Task 6 $ 10,095.00 (Meetings) Task 7 $ 1,392.50 DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 20 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx (Project Management) Sub-total Basic Services $95,452.50 Reimbursable Expenses $0.00 Total Basic Services and Reimbursable expenses $95,452.50 Additional Services (Not to Exceed) $9,545.50 Maximum Total Compensation $104,998.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s project manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB   EN G E O I n c o r p o r a t e d WR A - B i o l o g i c a l a n d La n d s c a p e A r c h i t e c u t r e Su p p o r t *  PL S S u v e y i n g *  Su p p o r t  Labor (hrs)   Labor ($)   ODC***   Total  Ta s k  Su b - T a s k Principal Engineer AssociateProfessional Staff Engineer Principal Permitting Specialist  Senior Professional Staff Analyst  Chief Surveyor  2 Man Crew Cad /Graphics  Project Assistant  Ho u r l y R a t e  $2 3 0 . 0 0  $2 1 0 . 0 0  $1 7 0 . 0 0  $2 2 5 . 0 0  $1 8 5 . 0 0  $1 6 0 . 0 0  $2 1 0 . 0 0  $2 4 5 . 0 0  $1 4 5 . 0 0  $8 5 . 0 0     1 Pr e l i m i n a r y I n v e s t i g a t o n a n d I n p u t                1.1 K i c k o f f M e e t i n g  4 4 4  12 $ 2 , 5 8 0 . 0 0 $ 8 5 . 0 0 $ 2 , 6 6 5 . 0 0  1.2 F i e l d R e c o n n a i s s a n c e a n d T o p o g r a p h i s S u r v e y  4 15 60 5  84 $ 1 9 , 4 1 5 . 0 0 $ 1 , 2 0 0 . 0 0 $ 2 0 , 6 1 5 . 0 0  1.3 P r e l i m i n a r y H y d r o l o g i c a n d H y d r a u l i c A n a l y s i s f o r E x i s i t n g C o n d i t i o n s 2 8 40  50 $ 8 , 9 4 0 . 0 0 $ 8 , 9 4 0 . 0 0  1.4 P r e l i m i n a r y I n v e s t i g a t i o n a n d C o o r d i n a t i o n  15 20 4  39 $ 7 , 2 9 0 . 0 0 $ 7 , 2 9 0 . 0 0  1.6 P r e l i m i n a r y B i o l o g i c a l A s s e s s m e n t  2 27 5  34 $ 6 , 2 4 5 . 0 0 $ 6 , 2 4 5 . 0 0  Me m o P r e p a r a t i o n  3 3 6 $ 6 9 0 . 0 0 $ 6 9 0 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 1 22 5 $ 4 5 , 1 6 0 . 0 0 $ 1 , 2 8 5 . 0 0 $ 4 6 , 4 4 5 . 0 0 2 Hy d r o l o g y a n d H y d r a u l i c s    $ - $ -  2. 1 P r e p a r e H y d r o l o g y , H y d r a u l i c s a n d S e d i m e n t T r a n s p o r t f o r T w o A l t e r n a t i v e s 2 5 40 5 1 53 $ 9 , 1 2 0 . 0 0 $ 9 , 1 2 0 . 0 0  2.2 P r e p a r e T e c h n i c a l M e m o 0. 5 4 10 2 16 . 5 $ 2 , 8 2 5 . 0 0 $ 2 , 8 2 5 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 2 69 . 5 $ 1 1 , 9 4 5 . 0 0 $ - $ 1 1 , 9 4 5 . 0 0 3 Re f i n e m e n t o f A l t e r n a t i v e S o l u t i o n s    $ - $ -  3. 1 D e v e l o p 2 A l t e r a t i v e s B a s e d o n C i t y / S t a k e h o l d e r F e e d b a c k 1 10 4 1 5 5 3  $ 5 , 2 1 5 . 0 0 $ 5 , 2 1 5 . 0 0  3.2 F i n a l A l t e r n a t i v e s R e p o r t 1 1 2 6 10 $ 1 , 2 4 0 . 0 0 $ - $ 1 , 2 4 0 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 3 10 $ 6 , 4 5 5 . 0 0 $ - $ 6 , 4 5 5 . 0 0 4 Co s t B e n e f i t A n a l y s i s a n d B d u g e t   0 $ - $ -  4. 1 P r o v i d e C o s t E s t i m a t e s o f 2 A l t e r n a t i v e s 2 3 10 2 4 21 $ 3 , 4 2 0 . 0 0 $ 3 , 4 2 0 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 4 21 $ 3 , 4 2 0 . 0 0 $ - $ 3 , 4 2 0 . 0 0 5 Pr o j e c t S t u d y R e p o r t a n d R e c o m m e n d a t i o n O p t i o n   0 $ - $ -  5. 1 P r o v i d e R e p o r t o f P r e f e r r e d A l t e r a t i v e s 2 25 5 25  57 $ 1 1 , 1 8 5 . 0 0 $ 2 0 0 . 0 0 $ 1 1 , 3 8 5 . 0 0  5.2 P r o v i d e E n g i n e e r i n g D r a w i n g s o f P r e f e r r e d A l t e r n a t i v e s  25 4 29 $ 3 , 9 6 5 . 0 0 $ 3 5 0 . 0 0 $ 4 , 3 1 5 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 5 57 $ 1 5 , 1 5 0 . 0 0 $ 5 5 0 . 0 0 $ 1 5 , 7 0 0 . 0 0 6 Me e t i n g s    0 $ - $ -  6. 1 A t t e n d u p t o 6 m e e t i n g s  20 12 12  44 $ 8 , 4 6 0 . 0 0 $ 1 0 0 . 0 0 $ 8 , 5 6 0 . 0 0  6.2 P r e p a r e P r e s e n t a t i o n M a t e r i a l s a n d M e e t i n g M i n u t e s  3 5 8 $ 9 3 5 . 0 0 $ 6 0 0 . 0 0 $ 1 , 5 3 5 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 6 52 $ 9 , 3 9 5 . 0 0 $ 7 0 0 . 0 0 $ 1 0 , 0 9 5 . 0 0 7 Pr o j e c t M a n a g e m e n t    $ - $ -  7. 1 B i l l i n g  6.5 6.5 $ 5 5 2 . 5 0 $ - $ 5 5 2 . 5 0  7.2 M o n t h l y U p d a t e s  4  4 $ 8 4 0 . 0 0 $ - $ 8 4 0 . 0 0 Su b t o t a l E s t i m a t e f o r T a s k 7 10 . 5 $ 1 , 3 9 2 . 5 0 $ - $ 1 , 3 9 2 . 5 0  TO T A L 4 4 5 $ 9 5 , 4 5 2 . 5 0    At t a c h m e n t to Ex h i b i t “C ”   Ci t y o f P a l o A l t o - B u c k e y e C r e e k P r o j e c t  * E N G E O h a s i n c l u d e d a 1 0 % m a r k - u p o n s e r v i c e s p r o v i d e d b y su b c o n s u l t a n t s f o r t h i s p r o j e c t . ** O t h e r D i r e c t C o s t s ( O D C ) i n c l u d e m i l e a g e a n d r e p r o d u c t i o n  Pa g e 1 Co s t E s t i m a t e m o d i f i e d 4 - 2 0 - 2 0 1 6 DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 21 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx EXHIBIT “C-1” HOURLY RATE SCHEDULE ENGEO INCORPORATED PREFERRED CLIENT FEE SCHEDULE PROFESSIONAL SERVICES Effective April 2015 President...................................................................................................................................... $295.00 per hour Principal Engineer/Geologist ...................................................................................................... $240.00 per hour Associate Engineer/Geologist..................................................................................................... $220.00 per hour Senior Engineer/Geologist .......................................................................................................... $195.00 per hour Project Engineer/Geologist/Manager.......................................................................................... $175.00 per hour Environmental Scientist .............................................................................................................. $170.00 per hour Staff Engineer/Geologist............................................................................................................. $155.00 per hour Assistant Engineer....................................................................................................................... $130.00 per hour Construction Services Manager .................................................................................................. $155.00 per hour Senior Field Representative II..................................................................................................... $140.00 per hour*/** Senior Field Representative I...................................................................................................... $125.00 per hour*/** Field Representative.................................................................................................................... $115.00 per hour*/** Environmental Technician…………………………………… ................................................ $120.00 per hour*/** Senior Laboratory Technician..................................................................................................... $140.00 per hour Laboratory Technician ................................................................................................................ $125.00 per hour CAD Specialist............................................................................................................................ $125.00 per hour Network Administrator ............................................................................................................... $175.00 per hour Project Assistant.......................................................................................................................... $110.00 per hour * Two-hour minimum portal to portal. Travel time, pick-up and delivery will be billed based on normal hourly rates, portal to portal. * OVERTIME RATES: Rates increased by factor of 1.5 for all hours worked in excess of eight (8) Monday through Friday, and the first eight (8) hours worked on Saturday. Rates increased by factor of 2.0 for all hours worked in excess of twelve (12) Monday through Friday, all hours worked in excess of eight (8) on Saturday and all hours worked on Sunday and holidays. ** For Prevailing Wage projects, increase the hourly rate by $15. ** Rates increased by factor of 1.25 for night shift hours (hours commencing after 4:00 p.m. or before 4:00 a.m.); rates increased by factor of 1.875 (an additional factor of 1.5) for all night shift hours in excess of eight (8). ADDITIONAL SERVICES OFFERED In addition to our core services of geotechnical, hydrologic and environmental engineering, including construction-phase testing and observation, ENGEO provides clients with services for establishment and management of Geologic Hazard Abatement Districts (GHAD) and for Entitlement and Permitting Support (EPS). For more information about these services and associated pricing, please contact ENGEO at (925) 866-9000. OTHER FEES • Equipment and materials will be charged in addition to the above hourly rates. • Outside Consultants, Subcontracted Services and Equipment Rental ......................................................................Cost plus 20% • Deposition, Mediation, Arbitration, or Court Appearance (Minimum Charge) ..................$2,000.00 half day, $4,000.00 full day . DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 22 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx ENGEO - EQUIPMENT AND MATERIALS CHARGES DESCRIPTION COST PER UNIT ($) UNIT Air Content Meter 7.00 hour All-Terrain Vehicle (Mule) 25.00 hour Bailers (Disposable) 8.00 each Camera - Video 10.00 hour Concrete Crack Monitor 20.00 each Coring Machine 25.00 hour Electronic Water Level Indicator 5.00 hour Engineering Analysis Software 20.00 hour Equipment Transport(er) 100.00 hour Exploration Equipment (Percussion Penetrometer) 50.00 hour Floor Flatness/Floor Level Equipment 20.00 hour Generator 15.00 hour GPS Hand Held (Garmin) 5.00 hour GPS Survey Grade (Trimble) 90.00 hour Hand Auger and Soil Sampler 15.00 hour Hydraulic Pull-Test Equipment 15.00 hour Interface Probe 2.00 hour Magnetic Particle Test Equipment 8.00 hour Moisture Content Test Equipment 6.00 hour Multi-Parameter Water Meter 15.00 hour pH Meter/Turbidity Meter 10.00 hour Photo Ionization Detector 15.00 hour R Meter (Pachometer) 15.00 hour Sampling Tubes 10.00 each Sand Cone Equipment and Material 5.00 hour Schmidt Hammer 20.00 hour Skidmore Wilhelm Bolt Tension Calib. 10.00 hour Slope Inclinometer/Settlement Indicator/VW Readout 50.00 hour Torque Wrench 12.00 hour Transfer Pump 3.00 hour Ultrasonic Equipment 25.00 hour Vapor Emission Test Kit 25.00 kit Vector Conversion 60.00 conversion Vehicle, mileage, nuclear gauge, misc. equipment,wireless 20.00 hour Vehicle, mileage, misc. equipment, wireless communication 11.00 hour Water Sampling Pumps 20.00 hour Bridge Toll actual actual Mileage .78 mile Parking actual actual Trailer 15.00 hour AutoCAD, Terramodel (Hardware & Software)20.00 hour Photocopies Black & White 0.25 each Photocopies Color 11 x 17 1.50 each Photocopies Color 8½ x 11 1.00 each Plot - Black & White 3.00 square foot Plot - Color 4.00 square foot Postage actual actual Scan - Black & White 1.50 each Scan - Color 3.75 each Telephone 0.50 minute DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 23 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx Subconsultant: WRA, Inc.  PREFERRED CLIENT RATE SCHEDULE  Effective: January 1, 2016    PRINCIPALS        RATE  Timothy DeGraff, Chief Executive Officer    $263/HR  Geoff Smick, President       $206/HR  Sherry Maloney, Chief Financial Officer     $206/HR  Michael Josselyn, Senior Wetland Scientist    $315/HR  Douglas Spicher, Senior Wetland Ecologist    $204/HR  Philip Greer, Senior Biologist      $194/HR  George Salvaggio, Senior Landscape Architect    $189/HR  Dana Riggs, Senior Wildlife Biologist     $179/HR  Justin Semion, Senior Aquatic Ecologist     $179/HR  Amanda McCarthy, Senior Plant Ecologist    $189/HR  ASSOCIATE PRINCIPALS       $189‐300/HR  SENIOR ENVIRONMENTAL PLANNER     $189/HR  SENIOR ASSOCIATE       $168‐189/HR  SENIOR ASSOCIATE / GIS MANAGER     $172/HR  SENIOR ASSOCIATE MARKETING DIRECTOR    $123/HR  ASSOCIATE ENVIRONMENTAL PLANNER    $150‐158/HR  ASSOCIATE LANDSCAPE ARCHITECT     $147/HR  ASSOCIATE        $143/HR  GIS PROFESSIONAL / GIS PROFESSIONAL II    $127‐146/HR  CONSERVATION FINANCE MANAGER     $158/HR  LANDSCAPE ARCHITECT       $136/HR  ENVIRONMENTAL PLANNER      $129/HR  SCIENTIST        $123/HR  SENIOR GIS TECHNICIAN / SENIOR LANDSCAPE DESIGNER  $118/HR  SENIOR TECHNICIANS / ASSISTANT ENVIRONMENTAL PLANNER II $116‐118/HR  GIS TECHNICIAN / LANDSCAPE DESIGNER    $106‐107/HR   TECHNICIAN / ASSISTANT ENVIRONMENTAL PLANNER    $104‐107/HR   FIELD STAFF        $77/HR  CLERICAL        $70/HR    DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 24 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx   Subject to an annual rate adjustment. Necessary project expenses are billed at cost plus 10%.  Subconsultant: PLS Surveys, Inc. RATE SCHEDULE     Field:   One-man $185.00 Two-man $220.00** Three-man $284.00 4 hour minimum applies to above rates Hydrographic Day rate $3,100.00     Office:       Principal-in-Charge     $190.0  Land Surveyor $150.0  Survey Technician $105.0  AutoCAD/Drafter $131.0  Clerical/Delivery (In-House) $95.00  Fringe   86.32%  Overhead 118.73%Overhead 205.05% Profit Margin 10.00%        **The two-man crew rate is our standard rate used for most land surveys. This rate includes RTK GPS, robotic total stations, digital levels and supplies. Rates good through 2019. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 25 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. CITY APPROVES A PROFESSIONAL LIABILITY DEDUCTIBLE OF $150,000. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB Professional Services Rev. March 31, 2015 26 E:\TEMP WORK - PURCHASING\WORK FOLDER\CSD - JOSE\162837 Buckeye Creek Hydrologic and Hydraulic3\Contract\Contract C16162837 ENGEO Incorporated.docx B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 EMAIL: InsuranceCerts@CityofPaloAlto.org DocuSign Envelope ID: 783605CB-26B8-4816-AC95-F3EB5092B1DB City of Palo Alto (ID # 6809) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: Program Manager Contract Title: Approve and Authorize the City Manager to Execute a Contract With Nova Partners, Inc., in an Amount Not-to-Exceed $4,200,471 to Perform Program Management Services in Support of Nine Infrastructure Plan Projects Including the Public Safety Building From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: Approve and authorize the City Manager or his designee to execute the attached contract in a total amount not to exceed $4,200,471 with Nova Partners, Inc. (Attachment A) for program management and construction management services for the Infrastructure Plan projects implementation; including $3,818,610 for basic services and $381,861 for additional services. Background The June 2014 Council Infrastructure Plan (ID #4889) identified $126 million in funding for nine significant projects including the construction of a new Public Safety Building (PSB), which was designated as the City’s top infrastructure priority. The other projects include two new public parking garages, two fire station replacements, completion of Byxbee Park, Charleston/Arastradero Corridor improvements, the Highway 101 Pedestrian/Bicycle Bridge at Adobe Creek and implementation of the Bicycle and Pedestrian Plan. In December 2015, Council directed staff to begin design of a 3-story PSB on Parking Lot C-6 in the California Avenue area business district (ID #6069) and in advance of the PSB, design a new parking garage with a retail element along Birch City of Palo Alto Page 2 Street on Parking Lot C-7. Additionally, Council awarded a design contract to Shah Kawasaki Architects for the replacement of Fire Station No. 3 (ID #6299). These three projects will initially require the bulk of program management services due to their complexity. In a December 2015 study session on the status of the Infrastructure Plan projects, councilmembers asked staff to carefully assess the existing staff resources available to implement the plan and be certain resources were in place to assure the success of the projects. During Finance Committee’s review of the general fund capital improvement program on May 17, 2016, staff presented information about this program management contract and its relation to successful delivery of the Infrastructure Plan. Discussion The projects from the 2014 Council Infrastructure Plan are now in various stages of planning and design. Staff requires professional assistance to manage the overall program to deliver these projects. The contract services are needed to support the Infrastructure Plan projects during selection of project delivery method, completion of designs, constructability review, bidding processes and construction for the projects. With current staffing levels, program management services will be crucial in successfully implementing the Infrastructure Plan projects. The nine Infrastructure Plan projects and their total budgets (some projects have funding from sources other than the Infrastructure Plan) are as follows: 1) Public Safety Building (PE-15001), $57 million 2) California Avenue Garage (PE-18000), $9.6 million 3) Fire Station #3 (PE-15003), $6.7 million 4) Fire Station #4 (PE-18004), $7.5 million 5) Highway 101 Pedestrian/Bicycle Bridge (PE-11011), $13 million 6) Bicycle and Pedestrian Plan (PL-04010), $20 million 7) Charleston/Arastradero Corridor (PE-13011), $10 million 8) Byxbee Park Completion (PE-18006), $2.8 million 9) Downtown Parking Garage (PE-15007), $13 million The project budgets shown above are original estimates from the 2014 Infrastructure Plan. Construction costs may be higher due to market escalation City of Palo Alto Page 3 and anticipated scope modifications such as the added retail element for the California Avenue parking garage. The scope of work to be performed under this contract includes all aspects of day- to-day program management for the Infrastructure Plan projects, including coordination of site logistics, minimizing disruption to the adjacent neighborhoods, project documentation, project communication, schedule management, budget management, quality assurance, inspection, testing and project closeout tasks. A detailed scope of work is included in Attachment A. The list of tasks and the projects to which they apply, using the project numbering above, is as follows: Task 1: Project Management, Planning, and Coordination (Projects 1-9) Task 2: Acquisition and Management of Consultants (Projects 1-3) Task 3: Design/Document Review (Projects 1-3) Task 4: Pre-Construction Services (Projects 1-3) Task 5: Construction Management Services (Projects 1-3; future amendment) Task 6: Budget and Schedule Management (Projects 1-9) Task 7: On-call Services As part of Task 1, Nova will develop and provide a project document management system to maintain consistent project reporting and information communication. The contract is structured so that it can be amended in the future, at the City’s discretion, to authorize and add budget for Task 5, Construction Management Services. Task 7, On-call Services, includes construction management services for a number of Bike and Pedestrian Transportation Plan projects that are expected to be constructed in the next year. The overall goal of the contract is to facilitate successful delivery of the Infrastructure Plan projects in accordance with their scope, schedule and budget. Summary of Solicitation Process A Request for Proposals (RFP) was issued by Palo Alto on February 19, 2016, with a 21 day proposal period. A total of four firms submitted proposals with costs ranging from $2,348,350 to $2,905,625. City of Palo Alto Page 4 Table 1. Solicitation Details Proposal Description/ Number Infrastructure Plan Program Management Services RFP 163034 Proposed Length of Project 36 months Number of RFPs Mailed 373 vendors were notified Total Days to Respond to RFP 21 Pre-proposal Meeting Date None Number of Company Attendees at Pre- proposal Meeting Not applicable Number of Proposals Received: 4 Company Name Location (City, State) 1. Cumming Construction Management, Inc. San Francisco, CA 2. Kitchell Sacramento, CA 3. Plante Moran Cresa Southfield, MI 4. NOVA Partners, Inc. Palo Alto, CA An evaluation committee of Public Works staff reviewed the proposals as well as the firms’ qualifications and experience in response to the criteria identified in the RFP. The review committee unanimously agreed to pursue negotiations with Nova Partners, Inc. Nova previously provided project and construction management services for five highly successful projects, including Rinconada Library, El Camino Park, Art Center, College Terrace Library and Children’s Library. Timeline The contract term is three years. The contract may be amended in the future to add specific scope, schedule and budget for optional Task 5: Construction Management Services for the Public Safety Building, California Avenue Garage and Fire Station No. 3. Resource Impact Funding for the contract will be provided by multiple Capital Improvement Program (CIP) budgets as outlined in Table 2. The contract amount is greater than City of Palo Alto Page 5 the budget provided in Nova’s proposal due to scope additions requested by staff during the contract negotiations. For example, staff identified an immediate need for on-call construction management services for a number of transportation related projects (CIP Nos. PL-04010, PL-14000, and PL-16000). The transportation projects are described in the contract scope Exhibit A under Task 7.1 and amount to $586,800 of the Basic Services budget for the first 2 years of the contract. Table 2. Contract Funding per CIP Project Project CIP No. FY 2017 FY 2018 FY 2019 1 Public Safety Building PE-15001 $532,557 $489,187 $489,187 2 California Avenue Parking Garage PE-18000 $181,009 $173,704 $173,704 3 Fire Station No. 3 Replacement PE-15003 $143,979 $138,882 $138,882 4 Fire Station No. 4 Replacement PE-18004 $0 $17,025 $17,025 5 Highway 101 Pedestrian/Bicycle Bridge PE-11011 $39,400 $29,509 $29,509 6 Bicycle and Pedestrian Plan PL-04010 $314,016 $298,799 $45,399 7 Charleston/Arastradero Corridor PE-13011 $30,308 $22,699 $22,699 8 Byxbee Park Completion PE-18006 $0 $6,356 $6,356 9 Downtown Parking Garage PE-15007 $39,401 $29,509 $29,509 On-call Churchill Ave Bikeway PL-14000 $40,000 $0 $0 On-call Quarry Rd Improvements PL-16000 $40,000 $0 $0 Task Order on-call services allowance $100,000 $100,000 $100,000 Subtotal $1,460,670 $1,305,670 $1,052,270 Additional Services (10%) $146,067 $130,567 $105,227 Total $1,606,737 $1,436,237 $1,157,497 The contract budget for additional services and on-call task-order-based work (Task 7.2) will be unassigned to a specific project and totals $681,861 over the 3- year period. The grand total not-to-exceed contract amount is $4,200,471. Policy Implications Authorization of this project does not represent a change in existing policies. Environmental Review The award of this program management contract is not a project under the City of Palo Alto Page 6 California Environmental Quality Act (CEQA). CEQA documentation and approval will be obtained separately for all projects under the program. Attachments:  Attachment A - Nova Partners Inc. Contract (PDF) Professional Services Rev. April 27, 2016 1 CITY OF PALO ALTO CONTRACT NO. C16163034 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND NOVA PARTNERS INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 13th day of June, 2016, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and NOVA PARTNERS, INC, a California corporation, located at 855 El Camino Real, Suite 307, Palo Alto, CA 94302 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to complete the infrastructure plan for nine major projects approved by City Council in 2014 (“Project”) and desires to engage a consultant to provide Project and Program Management Services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on- call portion of this agreement.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 2 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached at Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Three million eight hundred eighteen thousand six hundred ten Dollars ($3,818,610.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed Four million two hundred thousand four hundred seventy one Dollars ($4,200,471). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 3 Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 4 SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Hans de Roos as the Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Matt Raschke, Public Works Department, Public Works Engineering Division, 250 Hamilton Avenue, Palo Alto, CA 94301, Telephone:650-496-5937, email: matt.raschke@cityofpaloalto.org. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 5 negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 6 primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 7 SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 8 Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 9 ‘improvement’) project of more than $15,000. OR 26.1 CONSULTANT is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. CONSULTANT shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. 26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any contract for public works construction, alteration, demolition, repair or maintenance. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 10 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager (Required on contracts over $85,000) APPROVED AS TO FORM: __________________________ City Attorney or designee (Required on Contracts over $25,000) NOVA PARTNERS, INC. By:___________________________ Name:_________________________ Title:____________________________ DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 David Marks Vice President Professional Services Rev. April 27, 2016 11 Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 12 EXHIBIT “A” SCOPE OF SERVICES INFRASTRUCTURE PLAN PROJECT AND PROGRAM MANAGEMENT SERVICES Introduction All work described below will be done in conjunction with the City’s ongoing review and approval process for the projects described above. The Consultant’s services shall include assistance with project and program management through bidding of the projects. Additional construction management services may be added to the scope at City’s discretion through a contract amendment. The term of the contract will be three years. Given that the timeline for the Infrastructure Plan projects extends beyond three years, the City may extend the contract for additional years through a contract amendment. All work performed by Consultant shall be in accordance with the professional standard and quality and best practices that prevail among professional construction managers in the Peninsula region. By Council Policy, new public buildings over 5,000 square feet are required to attain a LEED Silver rating. The consultant personnel shall include at least one fully LEED-accredited member. If at any time, the City is not satisfied with the performance of Consultant’s staff, the City reserves the right to request the services of a different individual. If for any reason Consultant proposes a change of staffing during the course of the project, the City reserves the right to approve any new staff. Staffing changes must be approved a minimum of 21 calendar days in advance of any staffing changes, in writing, by the City’s Project Manager (PM). Office space or trailer, computers, cell phones, furnishings and other equipment needed for Consultant’s staff shall be provided by Consultant. Overview Three (3) projects currently requiring immediate project management and program development are: 1) Public Safety Building (PE-15001) 2) California Avenue Garage (PE-18000) 3) Fire Station #3 (PE-15003) The scope of work includes planning and development of successful processes and strategies to deliver these projects in alignment with the current Public Contracting Code requirements and all City of Palo Alto delivery models, adjust/manage budgets accordingly, assign milestones and ensure they are met, and to make the projects “shovel-ready” by completing the bidding process. Additional projects listed below require Nova’s expertise to develop the program management and framework of the process to design, bid, and provide an organized system for project delivery: 4) Fire Station #4 (PE-18004) 5) Highway 101 Pedestrian/Bicycle Bridge (PE-11011) 6) Bicycle and Pedestrian Plan (PL-04010) 7) Charleston/Arastradero Corridor (PE-13011) 8) Byxbee Park Completion (PE-18006) 9) Downtown Parking Garage (PE-15007) DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 13 The base contract for these services will have a 3-year duration per Exhibit B of this contract. Additional services beyond that time, if required, will be issued via contract amendment. Construction Management (CM) or Construction Administration (CA) services may be added later for individual projects as the requirements of the CM/CA are better understood and as needed. This contract does not obligate the City to utilize Nova Partners, Inc. for CM or CA services for these projects. Task 1.1: Project Management, Planning, and Coordination (for Projects 1-9): Consultant shall provide necessary administration, minutes, proper invoicing, budget control, project controls, quality assurance and reviews, and professional oversight. Project staffing shall be maintained at acceptable levels to keep the project on schedule, ensure continuity of information, and satisfy the requirements of the scope of work. Consultant shall review the Infrastructure Plan projects and the current project phasing and funding plan. Consultant shall coordinate with City staff to refine the Infrastructure Plan phasing and provide a detailed schedule for each project that considers funding, environmental review, design, public outreach, City Boards &Commissions approvals, regulatory, and construction activities. 1.1 Determine phasing of work, critical paths, milestones for projects to successfully complete the Infrastructure Plan by the end of FY2021, with emphasis on expeditious completion of the Public Safety Building project and associated California Avenue Parking Garage project 1.2 Provide recommendations for phasing and design and construction contracts structure for the Public Safety Building and California Avenue Parking Garage projects 1.3 Set specific milestones for funding, permitting, environmental review, design, design review and construction for the various phases of each project 1.4 Refine and customize program management tools to fit the specific needs of the Infrastructure Plan, including tools for budget management, schedule management, and cash flow management and forecasting Nova’s task for the Planning and Coordination of the project management for these projects will begin by reviewing the Infrastructure Plan and funding for each project listed in the Plan. The table below represents the projects’ information, approximate schedules, and budgets. Project # Project CIP No. Approximate Schedule Current Project Budget ($ millions 1 Public Safety Building PE-15001 2016-2020 $57 2 California Avenue Parking Garage PE-18000 2016-2018 $9.6 3 Fire Station No. 3 Replacement PE-15003 2016-2018 $6.7 DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 14 4 Fire Station No. 4 Replacement PE-18004 2018-2020 $7.5 5 Highway 101 Pedestrian/Bicycle Bridge PE-11011 2016-2019 $13 6 Bicycle and Pedestrian Plan PL-04010 2016-2020 $20 7 Charleston/Arastradero Corridor PE-13011 2016-? $10 8 Byxbee Park Completion PE-18006 2017-2019 $2.8 9 Downtown Parking Garage PE-15007 Currently deferred; potential schedule unknown $13 Nova will assist in refining the Infrastructure Plan, outlining the milestones, critical paths for each project, and identifying the interdependencies of each project in relation to the timeline and funding. Nova will build schedules for each project and provide the City with a master schedule and project specific break-out schedules for use in identifying timelines. The Public Safety Building and the California Avenue Parking Garage require the most attention initially. Nova will develop the approach to these projects to develop a clear picture of the project durations while working on the third project (Fire Station #3) that is currently in design by Shah Kawasaki Architects. Additionally, following Infrastructure Plan review, the remainder of Projects #4 through #9 can be inter-woven into the master schedule. Nova will provide recommendations for the phasing of the Projects and the delivery method that will be most advantageous to the City. Upon schedule development, Nova will identify the milestones for funding the project, environmental reviews, design review, and permitting review by the City Departments. Nova will coordinate specific meetings to “permit-review” the project. This would be an initial walk-thru of the permit drawings to help all City departments return their comments on time with the goal of avoiding code compliance issues during the Construction Phase. Nova shall provide project management tools that will be customized to the specific City needs. For example, budget spreadsheets have been built to track various project funding sources such as grants. Nova’s accounting/finance department will provide cash flow management and forecasting of costs to assist the City with various funding strategies. Nova will manage and maintain the project schedules and budgets comprehensively, and each project will be updated on a monthly basis. Monthly reports will be provided to the City project manager. Task 1.2: Project Management System (for Projects 1-9): Nova will develop a project document management system which will establish the guidelines to maintain consistent project reporting and information communication. The system will use SaaS (Software as a Service) technology to share information and make project information available to all project participants, anywhere, and anytime. Task 2: Acquisition and Management of Consultants (Projects 1-3) Consultant shall assist City staff in obtaining and managing the services of consulting firms to complete the environmental documentation and design of Infrastructure Plan projects 1, 2 and DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 15 3. Consultant shall: 2.1 Prepare scopes of work (SOW) and Requests for Proposal (RFP) 2.2 Evaluate proposals and assist City staff with the selection of consulting firms for the projects in accordance with the policies and procedures established by the Purchasing Division of the Administrative Services Department (ASD) 2.3 Develop document management requirements and guidelines to ensure consistency in project reporting and products 2.4 Attend regular meetings with design consultants for the California Avenue Parking Garage, Public Safety Building and Fire Station No. 3 Replacement projects. Prepare and distribute meeting minutes including action items and status. Assume one 2-hour meeting per month for each project. For this task, Nova will assist the City in determining the appropriate consultants required for Projects 1 through 3. To acquire each consultant Nova will prepare a Scope of Work for services required on the project, including a defined task list, base contract requirements and schedule, and fee matrix as part of a formal RFP process. Nova will assist staff with proposal evaluation and document the scoring of proposals. Nova will develop specific evaluation criteria and the scoring system to rank the proposals. The contract budget assumes one 2-hour meeting per month for the 3 projects over the entire project timeline. However, additional meetings are required to keep the project team aligned and on schedule. Therefore, a minimum of 1 meeting per week per project during the preconstruction phase is also budgeted. Task 3: Design/Document Review (Projects 1 through 3) Consultant shall conduct reviews of the reports, plans and specifications prepared by the consulting firms for Infrastructure Plan projects 1, 2 and 3. Consultant shall: 3.1 Coordinate and engage City staff with projects to ensure proper basis of planning and design 3.2 Review all reports, design submittals, scope changes and project work products and establish a QA/QC program 3.3 Coordinate and provide information needed for environmental documents (i.e. California Environmental Quality Act - CEQA) and design of projects 3.4 Assess the design work product submissions at each stage (e.g. 30%, 65%, etc.) for value engineering opportunities and for constructability These tasks require review of design documents prepared by the consultants and the management of the overall preconstruction phase of the projects. Nova shall perform reviews of the design and planning documents to ensure the City receives the project as contracted and within budget. Nova will accomplish this by completing design reviews and developing the Owner’s Project Requirements/Basis of Design (OPR/BOD) documents. These documents align the team and clearly define the project requirements for all consultants to understand. The OPR is a “living” document; it is amended and re-worked to allow the City to achieve its desired DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 16 goals for a project, yet maintain schedule and budget requirements. Nova has been involved in numerous California Environmental Quality Act (CEQA) reviews during the course of its 22-year history. Often, the design of the project is amended due to the conditions of approval for the EIR or CEQA review. Nova will manage these conditions of approval by tracking them continually and will ensure the conditions are included in the design documents. Nova understands the complex inter-relationship of the CEQA review upon the overall timing of the project and will begin this process as soon as we are on board. Task 4: Pre-Construction services (Projects 1-3) Consultant shall assist the City in final reviews of the construction documents and in preparing bid documents for Infrastructure Plan projects 1, 2 and 3. Consultant shall: 4.1 Assist the Architects and City staff as needed to obtain board and commission approvals (e.g. Architectural Review Board) and building permits for the projects 4.2 Develop independent estimates of probable construction cost based on the progress sets (e.g. 30% and 70%) and 100% construction documents provided for constructability review and reconcile the estimate to the Architects’ estimates 4.3 Provide detailed constructability reviews of the progress sets (e.g. 30% and 70%) and 100% construction documents to verify that the construction documents are complete and are internally consistent, and to identify opportunities for value engineering. The principle objectives of the constructability review are to ensure that the construction documents contain all of the necessary detail to prevent delays from occurring during construction and to avoid project change orders resulting from any inadequacy of the construction documents. Following the constructability review, report to the City all shortcomings identified with a focus in the following areas: site logistics and constraints; clarity of documents; completeness of documents; internal consistency of documents; technical constructability; building code compliance; ADA compliance, quality control; compatibility of contract plans, specifications, and applicable standards; utility clearances for constructability; project schedule; and pedestrian and vehicular safety and access. Review shall be performed by engineers or contractors who have experience in relevant fields such as mechanical, electrical, civil, etc. 4.4 Following any modifications to the 100% construction documents resulting from the final constructability review, develop a revised independent estimate of probable construction cost that accounts for the modifications and reconcile the estimate to the Architects’ estimate 4.5 Prior to solicitation of construction bids for each project, coordinate any significant construction document revisions that need to be included in the bid with the Architect and City staff. Minor design changes can be included after the bid is advertised as part of an addendum. 4.6 Assist the City’s Contracts Administrator with the preparation of the “Instructions to Bidders” which will define the scope of work and special provisions that must be included in the bid packages and other related bid documents needed to ensure complete bid packages. The Architects will prepare the technical specifications. Become fully familiar with the City’s standard General Conditions document that is part of each Invitation for Bid (IFB). DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 17 4.7 Become familiar with the various City department functions and requirements for project coordination 4.8 Coordinate and prepare any construction signage or outreach materials that may be needed 4.9 Contractor and Key Subcontractor Prequalification: Prior to soliciting construction bids, the Consultant shall work with the Public Works, Purchasing and City Attorney’s Departments to prepare prequalification forms and rating systems required for Prime Contractor and key subcontractor prequalification (“Prequalification”). Prequalification will occur for up to six subcontractors in key disciplines to be identified by the City, with input from Counsultant, for each Contractor seeking prequalification. The City shall issue the request for prequalifications and the Consultant shall administer the feedback from responders, including but not limited to: answering questions from contractors and subcontractors, coordinating responses with the City’s Purchasing Division and Public Works Department, preparing spreadsheets or other documentation necessary to compile and compare contractor responses, preparing a recommended bidder’s list with a brief report summarizing findings, assist in representing the City in any subsequent hearings challenging the validity of the results, and any follow-up documentation resulting from said hearings. 4.10 Bidding: Contractor bids shall be processed by the City’s Purchasing Division. Consultant shall review the contractor bids for compliance with the technical portions of the bid requirements as set forth in the specifications and make a recommendation for award or rejection. Consultant shall assist with the bid period work items including clarifications and bid evaluation relative to the contract documents. Consultant shall review the subcontractor list for completeness and compliance with the bid documents. The City Purchasing Division will verify Consultant’s recommendation in order to finalize the decision. 4.11 Addenda: If changes to the construction documents are required during the bidding period, Consultant shall prepare the addenda items with the assistance from the Architect. The City will issue the addenda. 4.12 Meetings: During the bidding process, Consultant shall be prepared to address comments and concerns of the contractors interested in bidding on the project with Architect and City Staff on an as-needed basis. 4.13 Pre-bid Conference and Pre-construction Meeting: Consultant shall coordinate and facilitate the Pre-bid Conference and Pre-construction Meeting including preparation of the agendas and meeting minutes. The pre-bid conferences are typically mandatory for bidders to attend. 4.14 Hazardous Material Abatement: A hazardous materials study has already been completed for existing Fire Station 3 that is to be demolished. Consultant shall assist City staff in the preparation of plans and specifications, assist in bidding (if removal is by means of a separate contact) and coordinate the remediation contractor’s efforts. A third-party consultant shall be employed by the City to survey, test, develop and implement removal procedures and report results. Consultant shall coordinate as-needed between the hazardous materials removal contractor and the third-party consultant hired to monitor the removal. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 18 4.15 Relocation of Existing Fire Station: Consultant will assist the City with procuring the services of a moving contractor (“Mover”). The Consultant shall coordinate between the Mover and City staff in order to relocate fire station staff, services, equipment and materials to the temporary station (location to be determined) that will be designed by Shah Kawasaki Architects. A similar move from the temporary station will be coordinated when the new station is ready for occupancy. Nova will manage the preconstruction process efficiently by performing the greatest value- added service for a project: reviewing the design documents as they develop. Nova will review the design and make comments on the efficiency, alignment with the OPR/BOD, and consider costs related to the design. Nova will utilize personnel with extensive field experience to assist the team in constructability review of design. Nova will work to eliminate vague details, un-buildable logic, and poor design to ensure the project will avoid costly construction delays. Depending upon the project requirements, Nova will also utilize experts to perform peer reviews of design. As the design progresses, Nova will verify the costs of the project remain within the budget limits. Nova is experienced in developing construction estimates, using historical data and previous experience on projects to manage the cost estimates. Nova will work with several cost estimating experts to obtain reliable estimates that will be reconciled with the Architect’s estimates. Where scopes of work exceed the allowed costs, Nova will manage the value engineering process. Nova has the expertise to assist with the bidding process for the City of Palo Alto. Nova will assemble the bid documents, manage the IFB documents, assist the Purchasing Department with release of the bid and ensure the process is smooth. Nova has developed a prequalification questionnaire that is in alignment with the Public Contract Code requirements. Nova will score the prequalification responses and provide the City with a formal review document naming the prequalified bidders. When bidding commences, Nova will manage the pre-bid RFI’s, conduct mandatory onsite pre-bid meetings, and prepare Addenda information for the City to publish to the prequalified bidders. Additional services Nova can provide include specialty contractor coordination such as waterproofing or soundproofing consultants. Nova can manage any of the specialty contractors the City may utilize on these projects so the City can focus on other business. Task 5: Construction Management Services (Projects 1-3) The City has the option to and may request the Consultant to provide or assist staff with construction management services. Consultant shall prepare the scope and budget upon City’s request. City may amend the Consultant’s annual contract to include the agreed upon fee for the construction management services. Consultant will then perform the construction management services under the amended Basic Services The construction management services include items such as conducting weekly OAC (Owner/Architect/Contractor) meetings to review the project schedule, RFIs, and open items that require resolution, review of Contractor payment applications, review of change order requests, processing of contract change orders, providing an expert review of the entitlement to changes, level of completeness for payment, review of project schedules, and adherence to the contract project schedule. Task 6: Budget and Schedule Management (Projects 1-9) Consultant shall monitor overall budgets and schedules and maintain conformance with the DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 19 Infrastructure Plan budget and schedule. Consultant shall: 6.1. Develop and maintain a detailed schedule for each projects under the Infrastructure Plan, performing CPM analysis as needed 6.2 Develop and maintain a comprehensive overall budget and cash flow projection for each project 6.3 Monitor the budget and schedule of multiple projects under varying phases of design and construction 6.4 Coordinate and monitor funding activities for the projects 6.5 Prepare cash flow and forecast for the individual projects and for the combined projects under the program 6.6 Coordinate and attend monthly meetings with City staff to review Infrastructure Plan project status, schedule and budgetary issues. Prepare and distribute meeting minutes including action items and status. Project budget is based on one 3-hour meeting per month 6.7 Prepare quarterly Infrastructure Plan project and program-level budget reports including project budgets, amendments to budgets, project actuals and commitments, projected future expenses, and project and program contingency funds The primary role as the project manager will be to manage the schedule and budget of all the projects. Nova will utilize the CPM method in the master schedule to keep all 9 projects on track. Activities will be detailed as required for successful design and construction. The schedule will outline the duration for design and programming, permit and bidding, and construction and move-in/fit-up. Schedule shall be updated on a monthly basis and shared with the City staff during a monthly meeting. The budget will be managed on a constant basis and shared with the City monthly. Nova will prepare cash-flow and forecasting necessary for the City to make funding decisions. Nova will prepare a monthly update that can be published by the City and quarterly summary documents that track the trending project conditions. The budget will track separate phases of each project, and Nova can provide a summary document that will report overall project budget and “over/under” dollar values. The budget report will allow the tracking of the financial health of each project individually; and collectively. Task 7.1: On-Call Services for Transportation Projects Consultant shall coordinate with City staff to provide project management or construction management services for Infrastructure Plan projects other than projects 1, 2 and 3, or for other City projects not included in the Infrastructure Plan on an as-needed basis. Initial on-call services desired include the following: Task 7.1 Transportation Project List A. Project PL-04010 – Construction Management services for Bryant St Extension, Maybell Ave and Park Blvd/Wilkie Wy Bicycle Boulevards DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 20 B. Project PL -04010 – Construction Management services for Amarillo Ave-Moreno Ave, Bryant St Upgrade, Louis Rd-Montrose Ave and Ross Rd Bicycle Boulevards C. Project PL -04010 – Construction Management services for the E Meadow Dr Enhanced Bikeway D. Project PL -04010 – Construction Management services for the Overcrossing and Undercrossing Improvements E. Project PL-14000 – Construction Management services for Churchill Ave Enhanced Bikeway F. Project PL-16000 – Construction Management services for Quarry Road Improvements G. Project PL-04010 – Construction Management services for other bikeway projects identified in the Bicycle + Pedestrian Transportation Plan For the above projects, on-call construction management services shall consist of the following tasks: a. Attendance at public meetings organized by City staff b. Maintaining project documentation such as daily work reports and field orders c. Maintaining documentation for public grant funding d. Construction inspection e. Work site safety observation f. Traffic control plan review and monitoring of implementation g. Material submittal processing coordination h. Material testing coordination and oversite i. Construction schedule review and monitoring j. Construction pay item quantity verification k. Verification of prevailing wage compliance by contractors l. Verification of DBE (disadvantaged business enterprise) compliance by contractors m. Invoice review and approval n. Verification of public notice processing by contractors o. Request for Information (RFI) processing coordination p. Change Order Request (COR) and Change Order (CO) processing q. Coordination of project punchlists r. Coordination of project closeout such as as-built plan review and approval s. Coordination of Project Acceptance and Notice of Completion filing t. Coordination of final retention payment release Task 7.2: On-Call Services Additional budget of $100,000 per year is allocated for program and construction management services for other capital projects as needed over the 3-year contract period. For Task 7.2, specific scope, schedule, and compensation will be documented in on-call task orders to be issued by the City Project Manager as needed. Additional Services Additional Services include, but are not limited to, attendence at Council and Commission meetings not originally intended in the scope of work and reimbursable expenses not included in the base fee. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 21 Reimbursable Expenses Travel and meal expenses shall not be Reimbursable items but shall be considered as included in the fee for associated work items. Temporary trailers, computers, copiers, printers and office supplies are not considered as a Reimbursable expense. Printing of plans and specifications shall be paid by City. Printing of flyers, presentation boards, telephone hotlines and other communication materials needed to fulfill outreach as described herein shall be budgeted for and provided as a Reimbursable item by Consultant. Job site safety fencing, if required from Consultant, is a reimbursable expense. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 22 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER ON CALL SERVICES FOR TRANSPORTATION PROJECTS Consultant hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C16163034 ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE: _______________ COST CENTER_________________ COST ELEMENT______________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT_________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE:  WORK TO BE PERFORMED  SCHEDULE OF WORK  BASIS FOR PAYMENT & FEE SCHEDULE  DELIVERABLES  REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 23 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion from NTP Task 1.1: Project Management, Planning, and Coordination (Projects 1-9) 36 months Task 1.2: Project Management System (Projects 1-9) 36 months Task 2: Acquisition and management of project consultants (Projects 1-3) 36 months Task 3: Design/Document reviews (Projects 1-3) 36 months Task 4: Pre-Construction services (Projects 1-3) 36 months Task 5((Optional): Construction Management services (Projects 1-3) N.I.C. Task 6: Budget and schedule management (Projects 1-9) 36 months Task 7.1: On-call services for Transportation Projects 24 months Task 7.2: On-call services (Allowance) 36 months DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 24 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. For subconsultants, such as inspectors, special inspectors, electronic document services, and photographic documentation services, the CITY agrees to compensate the CONSULTANT for services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the actual cost of the subconsultant, plus a fee of 5%, up to the not-to- exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $3,818,610. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $4,200,471. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. DESCRIPTION NOT-TO-EXCEED AMOUNT BASIC SERVICES Year 1 Year 2 Year 3 Total Task 1.1: Project Management, Planning, and Coordination (Projects 1-9) $140,898 $140,898 $140,898 $422,694 Task 1.2: Project Management System (Projects 1-9) $175,000 $100,000 $100,000 $375,000 Task 2: Acquisition and management of project consultants (Projects 1-3) $144,975 $144,975 $144,975 $434,925 DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 25 Task 3: Design/Document reviews (Projects 1-3) $206,762 $206,762 $206,762 $620,286 Task 4: Pre-Construction services (Projects 1-3) $283,650 $283,650 $283,650 $850,950 (Optional) Task 5: Construction Management services (Projects 1-3) $0 $0 $0 $0 Task 6: Budget and schedule management (Projects 1-9) $63,985 $63,985 $63,985 $191,955 Task 7.1: On-call services for Transportation Projects $333,400 $253,400 $0 $586,800 Task 7.2: On-call services (allowance) $100,000 $100,000 $100,000 $300,000 TOTAL BASIC SERVICES $1,448,670 $1,293,670 $1,040,270 $3,782,610 REIMBURSABLE EXPENSES $12,000 $12,000 $12,000 $36,000 TOTAL BASIC SERVICES AND REIMBURSABLES $1,460,670 $1,305,670 $1,052,270 $3,818,610 ADDITIONAL SERVICES – 10% OF ABOVE $146,067 $130,567 $105,227 $381,861 TOTAL NOT-TO-EXCEED AMOUNT $1,606,737 $1,436,237 $1,157,497 $4,200,471 REIMBURSABLE EXPENSES Reimbursables expenses include, but are not limited to, preparation of public outreach materials, cost of copying of plans and specifications, and other tasks not included herein. Postage (with the exception of delivery of large items such as contract documents or overnight mail), travel, meals, computers, bridge tolls, telephone, administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance, other ordinary business expenses, and other related overhead costs are included within the scope of payment for services and shall not be considered as reimbursable, but shall be included in the overall project costs. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s Project Manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 26 Additional Services include, but are not limited to, attendence at meetings, value engineering, calculations, subconsultant expertise and reimbursable expenses not included in the base fee. The Additional Services fee is 10% of preceeding annual activities, including Reimbursables. DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 27 EXHIBIT “C-1” SCHEDULE OF RATES 1. David Marks ‐ Principal $190 per hour 2. Hans de Roos ‐ Sr. Project Manager $175 per hour 3. Chuck Becker ‐ Sr. Project Manager $175 per hour 4. Martin Dickinson/Ron Barri ‐ Project Manager $ 155 per hour 5. Estimator & Peer Reviews $160 per hour 6. Project Accountant/ Admin $150 per hour DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 28 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 Professional Services Rev. April 27, 2016 29 THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE EMAILED TO: InsuranceCerts@CityofPaloAlto.org PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 DocuSign Envelope ID: 9CE79C93-43D3-461B-A935-A2E6E30B0D32 City of Palo Alto (ID # 7031) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: Investment Policy Update Title: Adoption of Fiscal Year 2017 Investment Policy From: City Manager Lead Department: Administrative Services Recommendation Staff recommends the City Council adopt the City’s Investment Policy without any changes. Discussion During the annual budget process, staff submits the Investment Policy to Council for review and approval (Attachment A). For Fiscal Year 2017, staff is proposing no changes to the investment policy. Resource Impact There is no budget impact associated with this report. Policy Implications This recommendation does not represent any change to City policies. Environmental Review The actions requested in this report do not constitute a project for the purposes of the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Proposed City of Palo Alto Investment Policy, Fiscal Year 2016-17 (PDF) 1 ATTACHMENT A PROPOSED CITY OF PALO ALTO Investment Policy Fiscal Year 2016-17 With No Changes INTRODUCTION The City of Palo Alto invests its pooled idle cash according to State of California law and the charter of the City of Palo Alto. In particular, the City follows “The Prudent Investor Standard” cited in the State Government Code (Section 53600.3). Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. INVESTMENT PHILOSOPHY 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. The City's preferred and chief practice is to buy securities and to hold them to their date of maturity rather than to trade or sell securities prior to maturity. The City may, however, elect to sell a security prior to its maturity 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 securities during their life will have no effect on their principal value. Under a buy and hold philosophy, the City is able to protect its invested principal. The economy, the money markets, and various financial institutions (such as the Federal Reserve System) are monitored carefully to make prudent investments and to assess the condition of the City’s portfolio. 2 INVESTMENT OBJECTIVES The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: 1. Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. a) Credit risk is the risk that an obligation will not be paid and a loss will result. The City will seek to minimize this risk by:  Limiting investment to the safest types of securities as listed in the “Authorized Investment” section.  Diversifying its investments among the types of securities that are authorized under this investment policy. b) Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investor’s portfolio. For example, an investor with large holdings in long-term bonds has assumed significant interest rate risk because the value of the bonds will fall if interest rates rise. The City can minimize this risk by:  Buying and holding its securities until maturity.  Structuring the investment portfolio so that securities mature to meet cash flow requirements. To further achieve the objective of safety, the amount that can be invested in all investment categories, excluding obligations of the U.S. Government and its agencies, is limited either as a percentage of the portfolio or by a specific dollar amount. These limits are defined under the “Authorized Investments” section. 2. Liquidity: Liquidity is the second most important objective of the investment program. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by maintaining a portion of the portfolio in liquid money market mutual funds or local government investment pools. In addition, the City will maintain one month’s cash needs in short term investments and at least $50 million shall be maintained in securities maturing in less than two years. Since all possible cash demands cannot be anticipated, however, the portfolio will consist of securities with active secondary or resale markets should the need to sell a security prior to maturity arises. 3 3. Yield: Yield on the City’s portfolio is last in priority among investment objectives. The investment portfolio shall be designed to obtain a market rate of return that reflects the authorized investments, risk constraints, and liquidity needs outlined in the City’s investment policy. Compared to similar sized cities, the City of Palo Alto should be able to take advantage of its relatively large reserve balances to achieve higher yields through long-term investments. In addition, the City will strive to maintain the level of investment of idle funds as close to 100 percent as possible. SCOPE A. This investment policy shall apply to all financial assets of the City of Palo Alto as accounted for in the Comprehensive Annual Financial Report (CAFR), including but not limited to the following funds: 1. General Fund 2. Special Revenue Funds 3. Debt Service Funds 4. Capital Project Fund 5. Enterprise Funds 6. Internal Service Funds 7. Trust and Agency Funds B. The policy does not cover funds held by the Public Employees Retirement System or funds of the Deferred Compensation program. C. Investments of bond proceeds shall be governed by the provisions of the related bond indentures. GENERAL INVESTMENT GUIDELINES 1. The maximum stated final maturity of individual securities in the portfolio should be ten years. 2. A maximum of 30 percent of the par value of the portfolio shall be invested in securities with maturities beyond five years. 3. The City shall maintain a minimum of one month’s cash needs in short term investments. 4. At least $50 million shall be maintained in securities maturing in less than 2 years. 5. Should the ratio of the market value of the portfolio to the book value of the portfolio fall below 95 percent, the Administrative Services Department will report this fact to the City Council within a reasonable time frame and evaluate whether there is any risk of holding any of the securities to maturity. 4 6. Commitments to purchase securities newly introduced on the market shall be made no more than three (3) working days before pricing. 7. Whenever possible, the City will obtain three or more quotations on the purchase or sale of comparable securities and take the higher yield on purchase or higher price on sale. This rule will not apply to new issues, which are purchased at market no more than three (3) working days before pricing, as well as to LAIF, City of Palo Alto bonds, money market accounts and mutual funds, all of which shall be evaluated separately. 8. Where the Investment Policy specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in the portfolio’s assets or values shall not constitute a violation of that restriction. As soon as possible, percentage limitations will be restored as investments mature in each category. AUTHORIZED INVESTMENTS The California Government Code (Sections 53600 et seq.) governs investment of City funds. The following investments are authorized: 1. U.S. Government Securities (e.g. Treasury notes, bonds and bills) Securities that are backed by the full faith and credit of the United States a) There is no limit on purchase of these securities. b) Securities will not exceed 10 years maturity. c) All purchased securities must have an explicit or a de facto backing of the full faith and credit of the U.S. Government. 2. U.S. Government Agency Securities – Obligations issued by the Federal Government agencies (e.g. Federal National Mortgage Association). a) There is no limit on purchase of these securities except for:  Callable and Multi-step-up securities provided that: - The potential call dates are known at the time of purchase; - the interest rates at which they “step-up” are known at the time of purchase; and - the entire face value of the security is redeemed at the call date. - No more than 25 percent of the par value of the portfolio. b) Securities will not exceed 10 years maturity. 5 3. California State, California Local Government Agencies, and other United States State Bonds a) Having at time of investment a minimum Double A (AA/AA2) rating as provided by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). b) May not exceed 10 percent of the par value of the portfolio. c) Investments include: i) Registered state warrants or treasury notes or bonds of the State of California and bonds, notes, warrants, or other evidences of indebtedness of any local agency within California, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the state or local agency or by a department, board, agency, or authority of the state or local agency. ii) Registered treasury notes or bond of any of the 49 United States in addition to the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency or authority of any of the other 49 United States, in addition to the State of California. 4. Certificates of Deposit (CD) - A debt instrument issued by a bank for a specified period of time at a specified rate of interest. a) May not exceed 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC). – See Appendix C e) Rollovers are not permitted without specific instruction from authorized City staff. 5. Banker's Acceptance Notes (BA) – Bills of exchange or time drafts drawn on and accepted by commercial banks. Purchase of banker’s acceptances are limited to: 6 a) No more than 30 percent of the par value of the portfolio. b) Not to exceed 180 days maturity. c) No more than $5 million with any one institution. 6. Commercial Paper - Short-term unsecured obligations issued by banks, corporations, and other borrowers. Purchases of commercial paper are limited to: a) Having highest letter or numerical rating as provided for by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). b) No more than 15 percent of the par value of the portfolio. c) Not to exceed 270 days maturity. d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution, whichever is lesser. 7. Local Agency Investment Fund (LAIF) – A State of California managed investment pool may be used up to the maximum permitted by California State Law. 8. Short-Term Repurchase Agreements (REPO) – A contractual agreement between a seller and a buyer, usually of U.S. government securities, whereby the seller agrees to repurchase the securities at an agreed upon price and, usually, at a stated time. a) Not to exceed 1 year. b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities. c) A Master Repurchase agreement must be signed with the bank or dealer. 9. Money Market Deposit Accounts – Liquid bank accounts which seek to maintain a net asset value of $1.00. 10. Mutual Funds which seek to maintain a net asset value of $1.00 and which are limited essentially to the above investments and further defined in note 9 of Appendix A a) No more than 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value with any one institution. 7 11. Negotiable Certificates of Deposit (NCD) issued by nationally or state chartered banks and state or federal savings institutions and further defined in note 11 of Appendix A. Purchases of negotiable certificates of deposit: a) May not exceed 10 percent of the par value of the portfolio. b) No more than $5 million in any one institution. 12. Medium-Term Corporate Notes – Issued by corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating with the United States. a) Not to exceed 5 years maturity. b) Securities eligible for investment shall have a minimum rating of AA from a nationally recognized rating service (e.g. Moody’s and/or Standard & Poor’s). c) No more than 10 percent of the par value of the portfolio. d) No more than $5 million of the par value may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentality. e) If securities owned by the City are downgraded by either Moody’s or Standard & Poors to a level below AA, it shall be the City’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. Appendix A provides a more detailed description of each investment vehicle and its security and liquidity features. Most of the City's short-term investments will be in securities which pay principal upon maturity, while long-term investments may be in securities that periodically repay principal, as well as interest. Most of the City's investments will be at a fixed rate. However, some of the investments may be at a variable rate, so long as that rate changes on specified dates in pre- determined increments. PROHIBITED INVESTMENTS: Includes all investments not specified above, and in particular: 1. Reverse repurchase agreements 2. Derivatives, as defined in Appendix B Appendix B provides a more detailed description of each investment, which is prohibited, for City investment. 8 AUTHORIZED INVESTMENT PERSONNEL Idle cash management and investment transactions are the responsibility of the Administrative Services Department. The Administrative Services Department is under the control of the Director of Administrative Services (Director), as treasurer, who is subject to the direction and supervision of the City Manager. The Assistant Directors of Administrative Services, who reports to the Director, are authorized to make all investment transactions allowed by the Statement of Investment Policy. He or she may authorize the Senior Financial Analyst/Investments (Analyst) to enter into investments within clearly specified parameters. The Investment function is under the supervision of the Assistant Director of Administrative Services (Assistant). The Assistant is charged with the responsibility to manage the investment program (portfolio), which includes developing and monitoring the City's cash flow model and developing long-term revenue and financing strategies and forecasts. The Analyst is subject to the direction and supervision of the Assistant. The Analyst assists the Assistant, in the purchase and sale of securities. The Analyst also prepares the quarterly report, and records daily all investment transactions as to the type of investment, amount, yield, and maturity. Cash flow projections are prepared as needed. In all circumstances, approval from the Director of Administrative Services is required before selling securities from the City's portfolio. The Analyst may also transfer no more than a total of $8 million a day from the City's general account to any one financial institution, without the prior approval of the Assistant Director of Administrative Services. No other person has authority to make investment transactions without the written authority of the Assistant Director of Administrative Services. USE OF BROKERS AND DEALERS The Administrative Services Department maintains a list of acceptable dealers. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position. A dealer must have a) At least three years experience operating with California municipalities; b) Maintain an inventory of trading securities of at least $10 million; and c) Be approved by the Assistant Administrative Services Director before being added to the City's list of approved dealers. In addition, individual traders or agents representing a dealer: A dealer will be removed from the list should there develop a history of problems to include: failure to deliver securities as promised, failure to honor transactions as quoted, or failure to provide 9 accurate information. SAFEKEEPING AND CUSTODY All securities shall be delivered to the City's safekeeping custodian and held in the name of the City of Palo Alto, with the exception of the following investments: a) Certificates of deposit, which may be held by the City itself. b) City shares in pooled investment funds, under contract. c) Mutual funds d) Local Agency Investment Fund (LAIF) POLICY REVIEW AND REPORTING ON INVESTMENTS Monthly, the Administrative Services Department will review performance in relation to Council- adopted Policy. Quarterly, the Department will report to Council on: its performance in comparison to policy, explain any variances from policy, provide any recommendations for policy changes, and discuss overall compliance with the City’s Investment Policy. In addition, the Department will provide Council with: a) A detailed list of all securities, investments and monies held by the City, and b) Report on the City’s ability to meet expenditure requirements over the next six months. Annually, the Administrative Services Department will present a Proposed Statement of Investment Policy, to include the delegation of investment authority, to the City Council for review during the annual budget process. All proposed changes in policy must be approved by the Council prior to implementation. Adopted by City Council October 22, 1984 Amended by City Council June 22, 1998 Monthly reporting effective January 1985 Amended by City Council June 28, 1999 Amended and Adopted by City Council June 24, 1985 Amended by City Council June 19, 2000 Amended by City Council December 2, 1985 Amended by City Council June 11, 2001 Amended by City Council June 23, 1986 Amended by City Council June 17, 2002 Amended by City Council June 22, 1987 Amended by City Council June 17, 2003 Amended by City Council August 8, 1988 Amended by City Council June 28, 2004 Amended by City Council November 28, 1988 Amended by City Council June 20, 2005 Amended by City Council June 26, 1989 Amended by City Council June 12, 2006 Amended by City Council May 14, 1990 Amended by City Council June 11, 2007 Amended by City Council June 24, 1991 Amended by City Council June 09, 2008 Amended by City Council June 22, 1992 Amended by City Council June 15, 2009 Amended by City Council June 23, 1993 Amended by City Council June 28, 2010 Amended by City Council June 20, 1994 Amended by City Council June 20, 2011 Amended by City Council June 19, 1995 Amended by City Council June 18, 2012 Amended by City Council June 24, 1996 Amended by City Council June 03, 2013 Amended by City Council June 18, 2012 Amended by City Council June 16, 2014 Amended by City Council June 23, 1997 Amended by City Council June 15, 2015 Amended by City Council January 26, 1998 10 11 APPENDIX A EXPLANATION OF PERMITTED INVESTMENTS 1. U.S. Government Securities – United States Treasury notes, bonds, bills, or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest. 2. U.S. Government Agency Securities - U.S. Government Agency Obligations include the securities of the Federal National Mortgage Association (FNMA), Federal Land Banks (FLB), Federal Intermediate Credit Banks (FICB), banks for cooperatives, Federal Home Loan Banks (FHLB), Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Student Loan Marketing Association (SLMA), Small Business Administration (SBA), Federal Farm Credit (FFC), Federal Agricultural Mortgage Corporation (FAMC or FMAC), and Tennessee Valley Authority (TVA). Federal Agency securities are debt obligations that essentially result from lending programs of the Government. Federal agency securities differ from other types of securities, as well as among themselves. Their characteristics depend on the issuing agency. It is possible to distinguish three types of issues: (A) participation certificates (pooled securities), (B) Certificates of interest (pooled loans), (C) notes, bonds, and debentures. The securities of a few agencies are explicitly backed by the full faith and credit of the U.S. Government. All other issues purchased by the City have the de facto backing from the federal government, and it is highly unlikely that the government would let any agency default on its obligations. 3. Certificates of Deposit - A certificate of deposit (CDs) is a receipt for funds deposited in a bank, savings bank, or savings and loan association for a specified period of time at a specified rate of interest. Denominations are $250,000 and up. The first $250,000 of a certificate of deposit is guaranteed by the Federal Deposit Insurance Corporation (FDIC), if the deposit is with a bank or savings bank, or the Savings Association Insurance Fund (SAIF), if the deposit is with a savings and loan. CDs with a face value in excess of $250,000 can be collateralized by U.S. Government Agency and Treasury Department securities or first mortgage loans. Government securities must be at least 110 percent of the face value of the CD collateralized in excess of the first $250,000. The value of first mortgages must be at least 150 percent of the face value of the CD balance insured in excess of the first $250,000. Generally, CDs are issued for more than 30 days and the maturity can be selected by the purchaser. 4. Bankers' Acceptance - A Banker's acceptance (BA) is a negotiable time draft or bill of exchange drawn on and accepted by a commercial bank. Acceptance of the draft irrevocably obligates the bank to pay the bearer the face amount of the draft at maturity. BAs are usually created to finance the import and export of goods, the shipment of goods within the United States and storage of readily marketable staple commodities. In over 70 years of usage in the United States, there has been no known instance of principal loss to any investor in BAs. In addition to the guarantee by the accepting bank, the transaction is identified with a specific commodity. Warehouse receipts verify that the pledged commodities exist, and, by 12 definition, these commodities are readily marketable. The sale of the underlying goods generates the necessary funds to liquidate the indebtedness. BAs enjoy marketability since the Federal Reserve Bank is authorized to buy and sell prime BAs with maturities of up to nine months. The Federal Reserve Bank enters into repurchase agreements in the normal course of open market operations with BA dealers. As are sold at a discount from par. An acceptance is tied to a specific loan transaction; therefore, the amount and maturity of the acceptance is fixed. 5. Commercial Paper - Commercial paper notes are unsecured promissory notes of industrial corporations, utilities, and bank holding companies. Interest is discounted from par and calculated using actual number of days on a 360-day year. The notes are in bearer form, with maturities up to 270 days selected by the purchaser, and denominations generally start at $100,000. There is a small secondary market for commercial paper notes and an investor may sell a note prior to maturity. Commercial paper notes are backed by unused lines of credit from major banks. Some issuer's notes are insured, while some are backed by irrevocable letters of credit from major banks. State law limits a City to investments in United States corporations having assets in excess of five hundred million dollars with an "A" or higher rating by a nationally recognized rating service for the issuer's debentures. Cities may not invest more than 25 percent of idle cash in commercial paper. 6. Local Agency Investment Fund Demand Deposit - The Local Agency Investment Fund LAIF) was established by the State to enable treasurers to place funds in a pool for investments. The City is limited to an investment of the amount allowed by LAIF (currently $40 million). LAIF has been particularly beneficial to those jurisdictions with small portfolios. Palo Alto uses this fund for short-term investment, liquidity, and yield. 7. Repurchase Agreements - A Repurchase Agreement (REPOS) is not a security, but a contractual arrangement between a financial institution or dealer and an investor. The agreement normally can run for one or more days. The investor puts up funds for a certain number of days at a stated yield. In return, the investor takes title to a given block of securities as collateral. At maturity, the securities are repurchased and the funds repaid, plus interest. Usually, amounts are $500,000 or more, but some REPOS can be smaller. 8. Money Market Deposit Accounts - Money Market Deposit Accounts are market-sensitive bank accounts, which are available to depositors at any time, without penalty. The interest rate is generally comparable to rates on money market mutual funds, though any individual bank's rate may be higher or lower. These accounts are insured by the Federal Deposit Insurance Corporation or the Savings Association Insurance Fund. 13 9. Mutual Funds - Mutual funds are shares of beneficial interest issued by diversified management companies, as defined by section 23701 M of the Revenue and Taxation Code. To be eligible for investment, these funds must: a) Attain the highest ranking in the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services; or b) Have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in the securities and obligations, as authorized by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code, and with assets under management in excess of five hundred million dollars; and c) Invest solely in those securities and obligations authorized by Sections 53601 and 53635 of the California Government Code. Where the Investment Policy of the City of Palo Alto may be more restrictive than the State Code, the Policy authorizes investments in mutual funds that shall have minimal investment in securities otherwise restricted by the City's Policy. Minimal investment is defined as less than 5 percent of the mutual fund portfolio; and d) The purchase price of shares of beneficial interest purchased shall not include any commission that these companies may charge. e) Have a net asset value of $1.00. 10. Callable Securities and Multi-Step-ups: Callable securities are defined as fixed interest rate government agency securities that give the issuing agency the option of returning the invested funds at a specific point in time to the purchaser. Multi-step-ups are government agency securities in which the interest rate increases ("steps-up") at preset intervals, and which also have a callable option that allows the issuing agency to return the invested funds at a preset interval. Callable and multi-step-ups are permitted, provided that:  the potential call dates are known at the time of purchase;  the interest rates at which they “step-up” are known at the time of purchase; and  the entire face value of the security is redeemed at the call date. 14 11. Negotiable Certificates of Deposit (NCD). NCDs are large-dollar-amount, short-term certificate of deposit. Such certificates are issued by large banks and bought mainly by corporations and institutional investors. They are payable either to the bearer or to the order of the depositor, and, being negotiable, they enjoy an active secondary market, where they trade in round lots of $5 million. Although they can be issued in any denomination from $100,000 up, the typical amount is $1 million. Also called a Jumbo Certificate of Deposit. State law prohibits the investment of local agency funds in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency, or any person with investment decision making authority in the administrative, manager’s, budget, auditor-controller’s, or treasurer’s offices of the local agency also serves on the board of directors, other credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificate of deposit. 12. Medium-Term Corporate Notes: Notes of a maximum of five years maturity issued by corporations organized and operating with the United States or by depository institutions licensed by the United States or any state and operating with the United States. According to California Code Section 53601, “Notes eligible for investment under this subdivision shall be rated in the rating category of “Double A” or its equivalent or better by a nationally recognized rating service. Purchase of medium-term notes may not exceed 30 percent of the agency’s surplus money which may be invested pursuant to this section.” 15 APPENDIX B EXPLANATION OF PROHIBITED INVESTMENTS 1. Reverse Repurchase Agreements: A Reverse Repurchase Agreement (Reverse REPO) is a contractual agreement by the investor (e.g. local agency) to post a security it owns as collateral, and a bank or dealer temporarily exchanges cash for this collateral, for a specific period of time, at an agreed-upon interest rate. During the period of the agreement, the local agency may use this cash for any purpose. At maturity, the securities are repurchased from the bank or dealer, plus interest. California law contains a number of restrictions on the use of Reverse REPOS by local agencies. 2. Derivatives: A derivative is a financial instrument created from, or whose value depends on (is derived from), the value of one or more underlying assets or indices. The term "derivative" refers to instruments or features, such as collateralized mortgage obligations, forwards, futures, currency and interest rate swaps, options, caps and floors. Except for those callable and multi-step-up securities as described under Permitted Investments, derivatives are prohibited. Certain derivative products have characteristics which could include high price volatility, liquid markets, products that are not market-tested, products that are highly leveraged, products requiring a high degree of sophistication to manage, and products that are difficult to value. According to California law, a local agency shall not invest any funds in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. 16 APPENDIX C GLOSSARY OF INVESTMENT TERMS AGENCIES: Federal agency and instrumentality securities. ASKED: The price at which securities are offered. BID: The price offered by a buyer of securities (when one sells securities, one asks for a bid). See “Offer”. BROKER: A broker brings buyers and sellers together so that he can earn a commission. COLLATERAL: Securities, evidence of deposit, or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMPREHENSIVE ANNUAL FINANCIAL REPORT (“CAFR”): The official annual report for the City of Palo Alto. It includes combined financial statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules that are necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: (1) delivery versus payment (DVP); and (2) delivery versus receipt (DVR). DVP is delivery of securities with an exchange of money for the securities. DVR is delivery of securities with an exchange of a signed receipt for the securities. DISCOUNT: The difference between the acquisition cost of a security and its value at maturity when quoted at lower than face value. A security that sells below original offering price shortly after sale, is also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills). DIVERSIFICATION: Dividing investment funds among a variety of securities that offer 17 independent returns. FEDERAL AGRICULTURAL MORTGAGE CORPORATION (“FAMC” or “FMAC”): A federal agency established in 1988 to provide a secondary market for farm mortgage loans. Informally called Farmer Mac. FEDERAL CREDIT AGENCIES: Agencies of the Federal Government that were established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, students, farmers, farm cooperatives, and exporters). FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”): A federal agency that insures all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA) or time deposit such as a certificate of deposit (CD). FDIC insurance covers depositors' accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank's closing, up to the insurance limit. The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investments are purchased at an insured bank. The FDIC does not insure U.S. Treasury bills, bonds or notes, but these investments are backed by the full faith and credit of the United States government. The standard maximum deposit insurance amount is described as the “SMDIA” in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL HOME LOAN BANKS (“FHLB”): Government-sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing-related assets of its members, who must purchase stock in their District Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (“FNMA”): FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL OPEN MARKET COMMITTEE (“FOMC”): The FOMC consists of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The 18 President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market, as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (“GNMA” or “Ginnie Mae”): Securities that influence the volume of bank credit that is guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. A security holder is protected by the full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term “pass-throughs” is often used to describe Ginnie Maes. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow, and reasonable amount can be done at those quotes. LOCAL GOVERNMENT AGENCY: A local government agency is any city, county, city and county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds. LOCAL GOVERNMENT INVESTMENT FUND (“LAIF”): Monies from local governmental units may be remitted to the California State Treasurer for deposit in this special fund for the purpose of investment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements that establish each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in the event of default by the seller (borrower). MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (e.g., bills, commercial paper, and bankers’ acceptances) are issued and traded. OFFER: The price asked by a seller of securities (when one buys securities, one asks for an offer). See “Asked” and “Bid”. 19 OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank, as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool. PORTFOLIO: A collection of securities that an investor holds. PRIMARY DEALER: A group of government securities dealers that submit daily reports of market activity and positions, and monthly financial statements to the Federal Reserve Bank of New York, and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -- registered securities broker-dealers, banks, and a few unregulated firms. PRUDENT INVESTOR RULE: An investment standard cited in the California Government Code (CGC) Section 53600 et seq. Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. QUALIFIED PUBLIC DEPOSITORIES: A financial institution that: (1) does not claim exemption from the payment of any sales, compensating use, or ad valorem taxes under the laws of this state; (2) has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability; and (3) has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank‘s vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES AND EXCHANGE COMMISSION: An agency created by Congress to administer securities legislation for the purpose of protecting investors in securities transactions. STRUCTURED NOTES: Notes issued by instrumentalities (e.g., FHLB, FNMA, SLMA) and by corporations, that have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) in their debt structure. The market performance of structured notes is affected by fluctuating interest rates; the volatility of imbedded options; and shifts in the yield curve. 20 TIME CERTIFICATE OF DEPOSIT: A non-negotiable certificate of deposit, which cannot be sold prior to maturity. TREASURY BILLS: A non-interest bearing discount security that is issued by the U.S. Treasury to finance the national debt. Most T-bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of more than 10 years. TREASURY NOTES: Medium-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of two to 10 years. YIELD: The rate of annual income return on an investment, expressed as a percentage. YIELD-TO-CALL (YTC): The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date. YIELD-TO-MATURITY: The current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity. ZERO-COUPON SECURITIES: Security that is issued at a discount and makes no periodic interest payments. The rate of return consists of a gradual accretion of the principal of the security and is payable at par upon maturity. City of Palo Alto (ID # 7047) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: East Palo Alto Comment Letter Title: Approval and Authorization for the City Manager to Sign a Letter Commenting on the City of East Palo Alto's General Plan Update and Draft Environmental Impact Report From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council approve and authorize the City Manager to sign the attached letter commenting on the City of East Palo Alto’s proposed General Plan Update and associated Draft Environmental Impact Report (EIR). Executive Summary The City of East Palo Alto is inviting comments on their General Plan Update and an associated Draft EIR which can be found at: http://vista2035epa.org/. A notice of availability was published in early May and is included as Attachment A. Comments are due by 4:00 p.m. June 15, 2016. The comment letter included as Attachment B reflects the input of multiple City departments and addresses a wide range of issues, the most significant of which are: Potential impacts associated with East Palo Alto’s proposal to allow additional multifamily housing in its Westside planning area adjacent to Crescent Park. East Palo Alto’s need for additional water supplies to enable future growth. Please refer to the proposed comment letter in Attachment B for more details. Given the potentials impacts on Palo Alto identified by the EIR, it is important that Mayor and Council endorse the comment letter to be sent by the City Manager. Attachments: Attachment A: NOA-East Palo Alto General-Plan-2016 (PDF) Attachment B: EPA Draft Comment letter 5.28.16 (DOC) CITY OF EAST PALO ALTO COMMUNITY AND ECONOMIC DEVELOPMENT DEPARTMENT 1960 Tate St. yy East Palo Alto, CA 94303 (650) 853-3189 (phone) DATE: April 29, 2016 TO: Interested Parties SUBJECT: Notice of Availability of the Draft Environmental Impact Report for the 2035 East Palo Alto General Plan Notice is Hereby Given that the City of East Palo Alto, as the Lead Agency, is circulating for public review a Draft Program Environmental Report (EIR) in accordance with the California Environmental Quality Act (CEQA) for the 2035 East Palo Alto General Plan. Project Location: The project area is the entire jurisdictional limits of the City. Project Description: The City is preparing a comprehensive update and revision to its 1999 General Plan, which will serve as a blueprint to guide the City’s vision (also known as “Vista 2035”) for its long-term land use and development through the year 2035. See http://vista2035epa.org for more information. There have been significant changes in the City since the adoption of the 1999 General Plan, including substantial shifts in job and housing markets, demographics, and transportation and infrastructure needs. Public comments for the General Plan will be accepted until the end of the General Plan EIR public comment period. Draft EIR: The Draft EIR prepared identifies the potentially significant environmental effects in the following categories: Aesthetics, Agriculture, Air Quality, Noise and Vibration, Population and Housing, Transportation and Traffic, Utilities and Service Systems, Availability: The Draft EIR and General Plan can be viewed at the following locations: East Palo Alto Branch Library, 2415 University Ave., East Palo Alto, CA 94303 East Palo Alto City Hall, City Clerk, 2415 University Ave., East Palo Alto, CA 94303 East Palo Alto Permit Center, 1960 Tate Street, East Palo Alto, CA 94303 Online at: http://vista2035epa.org/ Hazardous Materials: The project area includes the whole of the City of East Palo Alto, which encompasses several sites that contain hazardous waste enumerated under Section 65962.5 of the Government Code. Public Hearing: There are two public meetings during the public comment period: 1. Public Hearing- East Palo Alto Planning Commission Meeting, May 23, 2016, 7:00 p.m; 2415 University Avenue, East Palo Alto, CA 94303 2. Public Hearing, East Palo Alto City Council, June 14, 2016, 7:30 p.m, 2415 University Ave., East Palo Alto, CA 94303 Public Review Period & Comments: April 29, 2016-June 15, 2016 at 4PM. Written comments should be addressed to: Guido F. Persicone, Senior Planner, City of East Palo Alto, 1960 Tate Street, East Palo Alto, CA 94303 Alternatively, written comments can also be emailed to gpersicone@cityofepa.org. Emailed comments must include “General Plan” in the subject box. Attachment A 1 D-R-A-F-T On Letter Head June 13, 2016 Mr. Sean Charpentier Assistant City Manger City of East Palo Alto 1960 Tate Street East Palo Alto CA 94303 RE: City of Palo Alto Comment Letter for Draft Environmental Impact Report on the East Palo Alto General Plan Update 2035 Dear Mr. Charpentier, Thank you for the opportunity to review and comment on the Draft Environmental Impact Report (DEIR) on the East Palo Alto General Plan Update 2035. The City of Palo Alto is aware of the planning efforts you have made in the past several years particularly planning for the Westside Area adjacent to Palo Alto. The City recognizes that the Westside Area Plan is incorporated into the General Plan Update 2035. Further we note that in many cases other areas of shared interest with the City of East Palo Alto have also been included in the General Plan Update 2035 including the Newell Bridge at our boundary with the Woodland Neighborhood in the Westside Area. Based on these mutual interests and other shared issues the City of Palo Alto has the following comments on the Draft EIR for the General Plan Update 2035 (Project). 1. Aesthetics and Light and Glare. Comment #1 a and b a. Visual Character. The DEIR describes the current situation in East Palo Alto as “the vast majority of development in East Palo Alto is relatively low in height (one to three stories) with the exception of a small number of office and hotel buildings on the Westside that reach five to six stories.” The Project proposes a significant change to the existing development on the Westside in particular with shifting commercial land uses to high density residential, substantial increase in density of existing residential land uses and substantial increase in height limits in the Westside (southern portion of Willow and all of Woodland neighborhoods). Height limits would change from typically 35 feet to a maximum 75+ feet on West Bayshore Road and to a maximum 75+ feet from Woodland Road to US101 between Euclid and University Avenues. Attachment B 2 The impact of this visual change in density in the Westside Area has not been adequately addressed and could be significant. b. Light and Glare. The project proposes a shift in land use from commercial to high and urban density residential uses in the southern part of the Willow neighborhood (Euclid to University Avenues) and throughout the Woodland neighborhood. The new densities are achieved by increasing the height limits for multiple family residential uses significantly from generally three stories (35 feet) to 60 ft to 75 feet plus (See DERI pg 3-23). The mitigation to change the impact from glare to less than significant in the DEIR states that the impacts would not be significant because “given the already urbanized character of the City and the numerous existing sources of lighting, the incremental increase in light and glare levels posed by new development, particularly if realized gradually over the 20-year horizon of the General Plan Update, would not be substantial”. This analysis and conclusion is inadequate and does not address the significant change in structure height, potential for reflection and glare from the density of structures in the Westside Area on adjacent neighborhoods and on safety issues that may be created on adjacent major arterials (US101 and University Avenue). 2. Hydrology and Water Quality: Comment #2 a, b, and c. a. Storm water Runoff. The DEIR indicates that the Project will have a less than significant impact on Storm water runoff with adherence to Federal State Regional and proposed General Plan Policies. However, Page 4.9- 22: DEIR states that “Storm Water Pollution Prevention Plans (SWPPPs) are not currently required for development projects involving less than one acre of land, unless part of a common plan of development.” The Municipal Regional Storm Water Discharge Permit that is applicable to all Bay Area requires communities to “have the ability to require effective storm water pollutant controls to prevent discharge of pollutants into the storm drains, and implement progressively stricter enforcement to achieve expedient compliance and cleanup at all public and private construction sites”. With this one-acre exemption and without providing authority to control runoff from all sites, the storm water runoff impact has not been adequately addressed and would be significant. b. Storm water Control Implementation. The DEIR (page 1.14) finds that there are no anticipated significant unavoidable impacts to Hydrology and Water Quality. However, many of the policies listed under Infrastructure, Services, and Facilities Goal ISF-1 (Manage storm water safely, efficiently, and sustainably) use the weak action verb “encourage”, as opposed to “require”. These storm water control policies will likely not 3 be effective unless they are strengthened to give the City increased authority to enforce them and the impact will not be reduced to less than significant. c. Development in the flood hazard area. Page 4.9-29: DEIR states that the impact of developing in the flood hazard area is less than significant because the “City of East Palo Alto, including but not limited to the California Building Code, prohibits construction of occupied buildings within a flood hazard area unless the structures are elevated above the relevant flood elevation and properties are then removed from the hazard area via the FEMA letter of map revision (LOMR) process”. Elevation of the floor of a new or substantially improved structure within a flood hazard area to a level at or above the established Base Flood Elevation is typically required by a municipal flood hazard ordinance. Elevation of a floor, however, does not qualify a structure for removal from the flood hazard area via the LOMR process. A structure only qualifies for a LOMR if the ground that the structure is built upon is at or above the Base Flood Elevation. Without this consideration the impact of development in the flood hazard zone is not less than significant. 3. Noise and Vibration - Comment #3 Noise impacts from future development are identified as less than significant on two roadway segments in the Westside Area. However, the existing ambient noise levels in these locations (Woodland Ave University Ave to Cooley Ave and Euclid Ave to University Ave.) are already high, which affects the degree of increase over the ambient noise level that is acceptable. The roadway segment on Woodland Avenue from Newell to University was not evaluated. This segment will carry substantially more traffic with the Project and the ambient noise level in the area of this segment is 5-10dB lower than on the roadway segment next to US101 studied. Without the evaluation of the Woodland Road segment it is unclear that the noise impact would be less-than-significant in the Woodland Neighborhood and on adjacent residential areas. 4. Population and Housing - Comment #4 The analysis indicates the projected addition of about 2,500 new housing units or an estimated 7,764 residents by 2040, 105% of ABAG’s projected population growth over the period. (Page 4.12-12) and notes that while 8% of the city’s land area is in the Westside Area, 22% of the population lives in the Westside Area (6,075 residents/56 residents per acre). (Chapter 11). The DEIR adds that currently 5% of the multiple family uses in the city are multiple family units with 5 or more units. (Page 4.10-9) These uses are concentrated in the Westside Area with 71% of the acreage developed in 5 or more units. (Page 4.10-7,11) 4 The Project would continue and intensify the trend of concentrating density and focusing multiple family units in the Westside Area. This increase is achieved by redesignating commercial and lower density residential areas to high density (43 DU/a) and Urban density (89 DU/a) residential designations and raising the allowed height limits in the same areas from the current typical 35 feet to 60 feet and 75+ feet. The analysis of Population and Housing does not address the disproportionate distribution of the added population and development density within the City into the Westside Area. Rather the DEIR evaluates the increased population and density distribution as if it was evenly spread and concludes that the impacts to population and housing would be less than significant because “the General Plan creates a policy framework intended to support such population growth that would be consistent with public service levels, infrastructure availability and community goals.” To the degree that the increase in density of new population and housing is concentrated in the Westside Area, the impact of the increased density proposed by the Project appears to be more than significant and should be given further study. The City of Palo Alto has significant concerns about the development potential in the Westside Area. Redevelopment of the area as proposed will not only increase the number of dwelling units significantly, displacing the existing residents, but it will exacerbate the parking and traffic impacts that spill over from the Woodland Neighborhood in the Westside Area into the Crescent Park neighborhood of Palo Alto. The East Palo Alto decision on redevelopment allowed will have an impact on Palo Alto’s position and our City’s choice of the preferred alternative for the Newell Bridge. Transportation and Traffic: Comment # 5 a, b, c, d, and e a. Traffic. The existing level of service (LOS) condition for intersection Number 6, Woodland Avenue and University Avenue is shown in the DEIR as LOS D in both the AM and PM peak hour. Based on on-going field observations of this intersection during these periods, the City of Palo Alto believes there’s a significant difference between the existing condition identified in the DEIR and actual conditions, primarily in the PM peak hour. Vehicle queues on University Avenue in the eastbound direction approaching the intersection extend well into Palo Alto and occasionally to Downtown Palo Alto, with demand consistently exceeding capacity of the intersection. Capacity of this intersection is \further constrained by signal operations that do not optimize throughput for highest demand approaches. While these factors are not unique to this intersection, they should be included, along with any unique characteristics affecting capacity, in the evaluation of the existing 5 condition, cumulative no project and cumulative with project scenarios. The City of Palo Alto finds that the estimated level of service is not representative of the actual conditions, and that the proposed project may result in a significant impact at this intersection if the baseline conditions were more accurately represented. b. Traffic. A significant share of trips arriving and departing East Palo Alto use the intersection of Embarcadero Road and East Bayshore Road. This intersection is not evaluated in the DEIR, despite significant queuing and demands that exceed capacity. The cumulative growth projections may result in a significant impact to this intersection and should be evaluated. c. Traffic. The intersection of University Avenue and US 101 Southbound Ramps constrain capacity nearby the University Avenue and Woodland Avenue intersection resulting in substantial delays to vehicles leaving Palo Alto during the PM peak period. This intersection should be evaluated as a part of the DEIR. d. Transportation and Traffic. Given the large increase in residential density proposed in the Project for the Woodland neighborhood and the fact that there are limited ingress/egress points to/from the neighborhood (West Bayshore/Embarcadero, Woodland/University, Newell/Woodland), the City must evaluate the traffic impacts to the Newell Road/Woodland Avenue intersection and the increased traffic on Newell Road in Palo Alto attributable to the increased density, particularly as they would affect the access at the Newell Bridge. e. Transit. Draft General Plan Chapter 6 page 14 shows two conceptual street sections for University Avenue, one of which shows a reduction in the number of vehicle lanes. Based on the results of the transit impacts analysis in the DEIR, and proposed concentration of dense and mixed uses along University, please consider adding a third conceptual street section with transit-only lanes, and add language in T-2 2.2 to include transit only lanes as an option. 5. Utilities and Service Systems: Comment #6 Future Water supply is identified as a Significant and Unavoidable effect without mitigation because water demand created by the Project is not met by the City’s existing and future water supplies. Analysis suggests that the new water demands for the Project will be 1,699 acre feet by the year 2040 or a 73% increase over the 2015 water usage. There is no identified program for meeting this water demand. One action suggested is to build storage and infrastructure to transport water to East Palo Alto and to secure additional water supply from neighboring cities via permanent water exchanges. It should be noted that Palo 6 Alto has no current plans for a water supply exchange program. I would note that we have recently had informal conversations at the City Manager level and perhaps between individual Council Members of our jurisdictions regarding the challenge facing East Palo Alto in this regard. Thank you again for giving the City of Palo Alto an opportunity to review the Public Draft General Plan 2035 and comment on the Draft Environmental Impact Report on the City of East Palo Alto General Plan Update dated April 2016. We appreciate that the General Plan Update brings together your planning for future development and the Westside Area study; and that the environmental document addresses both. We look forward to working with you in the future to address our significant concerns about the future of the Westside Area. Please continue to notify the City of Palo Alto as your planning program progresses. Sincerely, James Keene City Manager CC Palo Alto Mayor & City Council Hillary Gitelman, Director Planning and Community Environment Carlos Martinez, East Palo Alto City Manager City of Palo Alto (ID # 6955) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: Law Enforcement Services to Levi’s Stadium Title: Authorize the City Manager or his Designee to Execute the Amended Indemnity Agreement With Santa Clara Stadium Authority to Allow Provision of Requested Law Enforcement Services to Levi’s Stadium From: City Manager Lead Department: Police Recommendation Staff recommends that the Council authorize the City Manager or his designee to execute the attached amended agreement which allows the Palo Alto Police Department to provide law enforcement services to the new Levi’s Stadium in Santa Clara through June 30, 2019, joining other Santa Clara agencies whose assistance is needed given the staffing demand. Executive Summary Since 2014, the San Francisco Forty-Niners have hosted their regular season football games at Levi’s Stadium. The Stadium was completed in 2014 and is maintained by the City of Santa Clara and the Santa Clara Stadium Authority. The Santa Clara Police Department has requested support from local law enforcement agencies and has worked with staff from the City of Palo Alto and other Bay Area municipalities to develop a police services staffing plan. The plan allows Santa Clara to supplement its police department’s staff with experienced peace officers from the region. In March 2014, the City of Palo Alto entered into an agreement which allowed Palo Alto police officers to work for the City of Santa Clara for the sole purpose of providing police services for the Santa Clara Stadium Authority. Existing Agreement In March 2014, the City of Palo Alto entered into an agreement which allowed Palo Alto police officers to work as “Per Diem Police Officers” for the City of Santa Clara for the sole purpose of providing police services for the Santa Clara Stadium Authority. Under that agreement, participating officers must meet certain certification requirements, and are subject to a background check. They work in a per diem capacity at the stadium and are off-duty from their employment with the Palo Alto Police Department. The officers are “double-badged” and are City of Palo Alto Page 2 classified as reserve police officers for Santa Clara, wearing Santa Clara police uniforms and insignias. The officers are trained and supervised by the Santa Clara Police Department for stadium events. Officers utilize their personal protective equipment issued by the City of Palo Alto in order to ensure familiarity and proficiency by the officer. The hours worked in Santa Clara do not contribute to hours worked for the City of Palo Alto for the purposes of calculating overtime or other City-provided benefits. The officers are paid directly by Santa Clara. Palo Alto does not pay salary or overtime for this work. Since June 2014, at least ten officers from the Palo Alto Police Department have worked at Levi’s Stadium as reserve officers pursuant to the agreement without incident. Revised Agreement The revised agreement extends the term of the agreement to June 30, 2019. Resource Impact The agreement will result in no resource impact. If an Officer is injured during the course of the performance of his or her job duties under this agreement, the City of Palo Alto will not be responsible for worker’s compensation related to that injury; rather worker’s compensation will be paid by Santa Clara in accordance with state law. Policy Impact The agreement is consistent with existing City policies. Attachments:  ATTACHMENT A-Levi's Stadium Indemnity Agreement May 2016 (PDF) City of Palo Alto (ID # 6932) City Council Staff Report Report Type: Action Items Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: FY2017 Adopted Budget Title: PUBLIC HEARING & PROPOSITION 218 HEARING: Adoption of Budget Amendment Ordinance for Fiscal Year 2017, including Adoption of Operating & Capital Budgets and Municipal Fee Schedule; Adoption of the Following Resolutions: Adopting a Dark Fiber Rate Increase of 3.2 Percent and Amending Utility Rate Schedules EDF-1 & EDF-2; Approving the FY 2017 Electric Financial Plan & Amending the Electric Utility Reserves Management Practices; Adopting an Electric Rate Increase of 11 Percent and Amending Utility Rate Schedules E-1, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, E-14, & E-16 & Repealing Utility Rate Schedules E-18 & E-18-G; Approving the FY 2017 Gas Utility Financial Plan; Adopting a Gas Rate Increase of 8 Percent and Amending Utility Rate Schedules G-1, G-1-G, G-2, G-2-G, G-3, G-3-G, G- 10, & G-10-G; Adopting Refuse Rate Changes Including a 7 Percent Decrease and Up to a Percent Increase & Amending Utility Rate Schedule R-1, & Consolidating Utility Rate Schedules R-2 & R-3 Into a New Utility Rate Schedule Designated R-C; Amending Utility Rate Schedule D-1 to Increase Storm Drain Rates 3.2 Percent per Month per Equivalent Residential Unit for FY 2017; Approving the FY 2017 Wastewater Collection Utility Financial Plan; Adopting a Wastewater Collection Fee Increase of 9 Percent & Amending Utility Rate Schedules S-1, S-6, and S-7; Approving the FY 2017 Water Utility Financial Plan; Adopting a Water Rate Increase of 6 Percent and Amending Utility Rate Schedules W-1, W-2, W-3, W-4, & W-7; Amending Salary Schedules for the Utilities Management Professional Association of Palo Alto (UMPAPA), the Service Employees International Union (SEIU), and the International Association of Fire Fighters (IAFF) From: City Manager Lead Department: Administrative Services City of Palo Alto Page 2 Recommendation Staff and the Finance Committee Recommend that the City Council approve and adopt the following: 1. Budget Amendment Ordinance (Attachment – A), which includes: a. City Manager’s Fiscal Year 2017 Proposed Operating and Capital budgets, previously distributed at the April 25th City Council meeting (Attachment – A, Exhibit 1); b. Amendments to the City Manager’s Fiscal Year 2017 Proposed Operating and Capital Budget (Attachment – A, Exhibit 2); c. Fiscal Year 2017 City Table of Organization (City Manager’s Fiscal Year 2017 Proposed Operating Budget on pages 481 through 497); and d. Fiscal Year 2017 Proposed Municipal Fee Changes (Attachment – A, Exhibit 3). 2. Resolution of the City Council of the City of Palo Alto increasing the Dark Fiber Rates by 3.2% effective July 1, 2016 by Amending the EDF-1 and EDF-2 Rate Schedules (Attachment – B). 3. Resolutions of the City Council of the City of Palo Alto: a. Approving the Fiscal Year 2017 Electric Financial Plan and Amending the Electric Utility Reserves Management Practices (Attachment – C), and b. Increasing Electric Rates by 11% Effective July 1, 2016 by Amending the E-1, E-2, E-2- G, E-4, E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, E-14, and E-16 Rate Schedules, and Repealing Rate Schedules E-18 and E-18-G (Attachment – D). 4. Resolutions of the City Council of the City of Palo Alto: a. Approving the Fiscal Year 2017 Gas Utility Financial Plan (Attachment – E); and b. Increasing Gas rates by 8% effective July 1, 2016 by amending Rate Schedules G-1 (Residential Gas Service), G-1-G (Residential Green Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-2-G (Residential Master-Metered and Commercial Green Gas Service), G-3 (Large Commercial Gas Service), G-3-G (Large Commercial Green Gas Service), G-10 (Compressed Natural Gas Service) and G-10-G (Compressed Natural Green Gas Service) (Attachment – F). 5. Resolution of the City Council of the City of Palo Alto amending the Refuse Rates for Fiscal Year 2017 between a decrease of 7% and increases of up to 9% effective July 1, 2016 (Attachment – G) to cover program costs for both Residential and Commercial Sectors and provide a reduced cost for commercial compost collection by: a. Amending Utility Rate Schedule R-1 (Residential Refuse Rates) (Attachment – H); and b. Reorganizing Utility Rate Schedules R-2 and R-3 (Commercial Refuse Rates) into a new Utility Rate Schedule designated R-C (Commercial Refuse Rates) (Attachment – I). City of Palo Alto Page 3 6. Resolution of the City Council of the City of Palo Alto amending Utility Rate Schedule D-1 (Storm Water and Surface Water Drainage) to increase by 3.2% per month per equivalent residential unit for Fiscal Year 2017 (Attachment – J). 7. Resolutions of the City Council of the City of Palo Alto: a. Approving the Fiscal Year 2017 Wastewater Collection Utility Financial Plan (Attachment – K); and b. Increasing Wastewater Collection rates by 9% by amending rate schedules S-1 (Residential Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) (Attachment – L) . 8. Resolutions of the City Council of the City of Palo Alto: a. Approving the Fiscal Year 2017 Water Utility Financial Plan (Attachment – M); and b. Increasing Water Rates by 6% by amending Rate Schedules W-1 (General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non-Residential Water Service), and W-7 (Non-Residential Irrigation Water Service) (Attachment – N). 9. Resolution of the City Council of the City of Palo Alto Amending Salary Schedules for: a. Utilities Management Professional Association of Palo Alto (UMPAPA) Salary Schedule, as Amended by Resolution No. 9527 to add one new position classification, delete one position classification, and change the title of one position classification (Attachment O, Exhibit 1); b. Service Employees International Union (SEIU) 2015-2018 MOA, adopted on April 11, 2016 (CMR #6789), to add four position classifications and update the salary rates for one position classification (Attachment O, Exhibit 2); c. Service Employees International Union (SEIU) 2013-2015 MOA, as Amended by Resolution No. 9398 to change the title of one position classification (Attachment O, Exhibit 3); and d. International Association of Fire Fighters (IAFF) 2016-2017 MOA adopted on April 11, 2016 (CMR #6789) to add two position classifications and delete three Position classifications (Attachment O, Exhibit 4). EXECUTIVE SUMMARY During April and May 2016, the City Council and Finance Committee have received and been reviewing the City Manager’s Fiscal Year 2017 Proposed Operating and Capital Budgets as well as various fee and rate changes recommended by staff. During these discussions some changes have been recommended to the City Manager’s Proposed Budgets by both the Finance Committee and staff. This report outlines this process and the results from these changes. The sections include: City of Palo Alto Page 4  Fiscal Year 2017 Finance Committee Budget Balancing Process  City Manager’s Final Recommended Amendments to the Fiscal Year 2017 Proposed Budget  Table of Organization  Municipal Fee Schedule  Fiscal Year 2017 Proposed Rate Changes  Compensation Plans  Referral Items for Full Council at the Request of the Finance Committee  Attachments The first section outlines the Finance Committee budget balancing process. It outlines the changes that the Finance Committee recommended at staff’s recommendation during the duration of the hearings. These changes resided in the Capital Proposed Budget. It then summarizes the balancing process that the Finance Committee ultimately used during the Budget Wrap-up session where two scenarios and a few points of additional information were recommended and requested by the committee. The Finance Committee also made a motion to recognize areas where they were unable to reach a majority opinion for the City Council’s edification. In response to the scenarios and additional information requested by the Committee this report then outlines and summarizes the recommended changes to the FY 2017 Proposed Operating and Capital Budgets in totality. Lastly this report details a list of areas that the Finance Committee wished to refer to the full Council for potential referral to staff. These are areas identified for potentially deeper analysis or alternative funding strategies to be explored over the course of the next fiscal year. Attached to this report are a number of documents as outlined and referenced throughout the recommendation language and the report. In addition, attached are all the materials presented throughout the budget process to both the City Council and/or the Finance Committee. Attached documents include:  various City Manager Reports and At Places Memorandums transmitted  presentations made during the budget hearings  transcripts from the following City Council or Finance Committee Hearings: April 25th, May 3rd, 5th, 10th, 12th, and 17th meetings Not included in this CMR is the transcript for the May 23, 2016 Budget Wrap-up meeting or the approval of the GANN Limit. It is anticipated that these will be transmitted separately in late packet or as separate items for City Council consideration. City of Palo Alto Page 5 FISCAL YEAR 2017 FINANCE COMMITTEE BUDGET BALANCING PROCESS Finance Committee Tentatively Approved Changes: 2 CIP changes + Reappropriations Only two formal changes to the FY 2017 Proposed Budget were recommended by the Finance Committee prior to the Budget Wrap-up meeting on May 23, 2016. The Finance Committee tentatively approved staff recommended changes to the Electric Fund and the Capital Improvement Fund. In the Electric Fund, a new Facility Relocation for CalTrain Modernization (EL-17007) capital project with $150,000 in Fiscal Year 2017 was added to study the cost of relocating overhead electric and fiber optic lines to allow for the conversion of CalTrain from diesel to electric power. In the Capital Improvement Fund, the funding in Fiscal Year 2017 for the Art in Public Spaces (AC-86017) capital project was reduced by $156,327 due to a calculation error with an offsetting adjustment to the Infrastructure Reserve Balance. The two adjustments are outlined below with additional details that can be found in the May 17, 2016 At Places memorandum. Proposed Revision Description FY 2017 Current Proposed Budget Tentative Approved Change FY 2017 Revised Proposed Budget Electric Fund Facility Relocation for Caltrain Modernization Project (EL-17007) $0 $150,000 $150,000 Supply Operations Reserve (FY 2017 Proposed Operating Budget pp.102) $24,507,000 ($150,000) $24,357,000 General Capital Fund Art in Public Spaces (AC-86017) $579,840 ($156,327) $423,513 General Capital Fund Infrastructure Reserve (FY 2017 Proposed Capital Budget pp.91) $11,594,442 $156,327 $11,750,769 Finance Committee Recommended General Fund Balancing Options At the Budget Wrap-up meeting on May 23, 2016, the Finance Committee approved two motions outlining changes to the City Manager’s FY 2017 Proposed Budgets, these motions outlined a Scenario A and a Scenario B as discussed in detail below. Included in the City Manager’s Proposed Operating Budget was an estimated June 30, 2016 BSR level of $40.5 million with a recommended draw on this reserve by $4.9 million bringing the FY 2017 recommended BSR level to approximately 18% or $35.6 million of the estimated FY 2017 expenses. The scenarios below outline 1) the changes to draw on the BSR for FY 2017, 2) provides the revised estimated percent of FY 2017 expenses in the General Fund, and 3) context of the revised FY 2017 BSR level based on the City Council adopted policies guiding the BSR level (15% of General Fund expenses minimum, 20% of General Fund expenses maximum, with an 18.5% target level within that range). City of Palo Alto Page 6 Finance Committee Recommended Changes – Scenario A On May 23, 2016, the Finance Committee approved a motion to amend the City Manager’s FY 2017 Proposed Budget with the actions outlined in the scenario below. These changes would result in a reduction to the Budget Stabilization Reserve proposed use of $4.9 million to $3.5 million, resulting in a $37.0 million BSR or 18.8% of the FY 2017 Proposed Expenses. Finance Committee Recommended Changes – Scenario B On May 23, 2016, the Finance Committee approved a motion to amend the City Manager’s FY 2017 Proposed Budget with the actions outlined in scenario A and then they made a subsequent motion directing staff to explore a second scenario B that would eliminate any draw on the Budget Stabilization Reserve, thereby increasing the potential reductions to the General CIP in FY 2017 from $2.0 million to $5.5 million in total. These changes would result in no reduction to the Budget Stabilization Reserve leaving it slightly above the 20% maximum at an estimated 21% of expenditures or $40.5 million. City of Palo Alto Page 7 Finance Committee Identified Areas of Differing Opinions During the Finance Committee Budget Hearings, a number of items arose where a majority vote to recommend a certain change was unable to be achieved. The Finance Committee directed staff to provide a list of these areas that they struggled to find consensus, which is outlined below:  A request to ask staff for a 1.0 FTE position reduction or a 2.0 FTE position reduction  City Manager’s recommended Office of Sustainability Contingency of $250,000 reduction by 50% to $125,000; FY 2017 Proposed Operating Budget page 469.  Fire Station Furniture, Fixtures, & Equipment - Phase 2 (exercise equipment) one year deferral; FY 2017 Proposed Operating Budget page 250. City of Palo Alto Page 8  Changes to the Planning & Transportation Contingency dependent on additional details on the potential use of these funds (additional information outlined below).  Tree trimming Services frequency cycle, 7 year, 10 year, or 15 year cycle.  Downtown Parking Wayfinding (PL-15004) reallocation of $600,000 University Avenue Parking Permit Fund support to other initiatives with the goal to achieve General Capital Improvement Fund savings; FY 2017 Proposed Capital Budget page 278-279.  Human Services Resource Allocation Process (HSRAP) additional funding of $50,000 for emerging needs Additional Information Provided by Staff at the Request of the Finance Committee The Finance Committee requested additional information from staff in regards to the implications of their proposed balancing solutions. This information is detailed below as requested. General Capital Improvement Fund Potential Scenario Impacts: $2.0 million or $5.5 million At the May 23, 3016 Finance Committee Budget Wrap-up meeting, the Finance Committee approved a motion requesting staff to provide two scenarios in which the Fiscal Year 2017 General Capital Improvement Fund budget be reduced or deferred by $2.0 million and $5.5 million. At the Finance Committee’s request, staff reviewed the Proposed Capital Budget focusing only on the projects included in the FY 2017 Capital Budget. After looking at the status of current projects and the upcoming pipeline in the context of resource capacity, the following projects have been identified by staff that could be deferred to FY 2018 and beyond in order to reach the Fiscal Year 2017 $2.0 million to $5.5 million target reduction. The value represents the net FY 2017 hard costs of the project, excluding salaries and benefits and adjusted for outside funding sources which will be reallocated to support other capital initiatives under way. It should be noted, that this one year deferral will be reviewed in the context of the full five year Capital Improvement Plan as part of the development of the FY2018-FY2022 Proposed CIP to ensure project plans align within the five year plan. Potential project deferrals: - Ramos Park Improvements (PG-14000); page 226 $ 175,000 - Ventura Buildings Improvements (PE-15011); page 174 $ 600,000 - Municipal Services Center A, B, & C, Roof Replacement (PF-17000); $ 817,000 Page 150 - Rinconada Park Improvements (PE-08001); page 228 $3,335,000 $4,927,000 Planning & Transportation Contingency Reserve: $500,000 City of Palo Alto Page 9 On May 10, 2016, the Finance Committee discussed the Department of Planning and Community Environment’s need for additional resources. As a result, staff recommended a $500,000 contingency reserve, similar to the $500,000 transportation contingency reserve in FY 2016. The Department would use this reserve to supplement staff resources in furtherance of City Council priority projects during the course of the year. Specific uses of the reserve would require City Council approval, and recommended uses would include, but may not be limited to the following activities:  Urban design support: The Department would retain the services of an architect or urban design professional to support staff’s work and to manage the preparation of design guidelines for two story homes in Eichler neighborhoods (either in the form of standalone guidelines or an amendment/supplement to the Individual Review (IR) guidelines).  Middlefield Road traffic analysis and safety enhancements: The City has committed to undertake a review of the time of day turn restrictions implemented on a trial basis at two intersections along Middlefield Road close to the border with Menlo Park. The review will include a comprehensive analysis of traffic safety in this area, community engagement, and analysis of options for the future. This analysis and implementation of the selected option are not currently budgeted.  Shuttle and RPP expenditures: A portion of the Department’s FY 2016 contingency was used to support implementation of Downtown RPP phase two, and the FY 2017 contingency could likewise support any unanticipated costs associated with the Evergreen Park and Southgate programs. The contingency could also support shuttle service expansions, either in the form of increased frequencies or a new route(s), if the City Council elects to pursue these expansions based on results of an ongoing study of the shuttle system. This funding will increase the Planning and Community Environment’s effectiveness and responsiveness in the course of the year. 2.0 FTE Position Eliminations As part of the Finance Committee recommended balancing revisions approved on May 23, 2016, a request for 2.0 FTE position reductions was requested. The City Manager is currently evaluating staffing resources and priorities throughout the City and will bring forward a recommendation at a later time. Post Office Acquisition Concurrent with the development of the FY 2017 Proposed Operating and Capital Budgets, the City has explored the acquisition of the Post Office Building on Hamilton Avenue. As discussed, no assumptions for either the acquisition costs or the remodel costs associated with outfitting the space for City use have been included in the City Manager’s FY 2017 Proposed Budget. It is anticipated that the acquisition costs would need to be financed and a further reprioritization City of Palo Alto Page 10 beyond the reprioritization of projects outlined in this report will be necessary for the full FY 2017-2021 Capital Improvement Plan in the General Capital Improvement Fund. Golf Course Reconfiguration As discussed during the May 23, 2016 Finance Committee meeting, staff is currently in the midst of evaluating the bids received for the Golf Course Reconfiguration CIP and the financial feasibility of the project given the project costs versus projected future Golf Course revenue. It is anticipated that a discussion surrounding the reconfiguration project will be brought forward at the June 20, 2016 City Council meeting. CITY MANAGER’S FINAL RECOMMENDED AMENDMENTS TO THE FISCAL YEAR 2017 PROPOSED BUDGET Based on the Finance Committee Budget Hearing deliberations and requested changes during the month of May 2016 as well as changes at the behest of staff, this section aggregates and outlines all the final changes recommended by staff to be made to the FY 2017 Proposed Operating and Capital Budgets distributed to the City Council on April 25, 2016. General Fund Summary of Recommended Changes to the FY 2017 City Manager’s Proposed Budget Throughout the FY 2017 Budget hearings, the Finance Committee members recommended amendments to the FY 2017 City Manager Proposed Budget as described above in Scenario A and Scenario B. Staff has worked to incorporate those directions into the amended budget, including:  a $170,000 increase for the Tree Trimming Contract associated with decreasing the cycle time from 15 years to 10 years in the next contract;  a $280,000 increase for Operations and Maintenance costs associated with two new RPP programs for Evergreen and Southgate;  a $500,000 Planning and Transportation Contingency Fund;  a $374,000 reduction in expenses in the Non-Departmental section reflects a placeholder for savings that is anticipated to be identified as a result of 2.0 FTE position eliminations; and  a reduction in the General Fund Transfer to the General Capital Fund in the amount of $4.3 million. In order to offset some of these recommended adjustments, staff has identified some alternative funding for the two new RPP programs. Of the needed $280,000, partial funding of $50,000 was included in the original Proposed Budget for Fiscal Year 2017 in the Residential Parking Permit Fund, $70,000 is recommended to be used from the FY 2016 Transportation City of Palo Alto Page 11 Contingency Fund, leaving a remaining balance of $160,000. After further consultation, staff recommends postponing the California Avenue Retail Feasibility Study that was included in the proposed budget, and that the $75,000 in funding allocated for that action in the Proposed Budget is used for the RPP programs instead. The remaining $85,000 in funding necessary for the development of these two new RPP programs is recommended to come from the general fund Budget Stabilization Reserve. All recommended changes to the City Manager’s FY 2017 Proposed Operating Budget are explained in further detail in Attachment A, Exhibit 2, Amendments to the City Manager’s Fiscal Year 2017 Proposed Operating and Capital Budgets. Once adjusting for all the recommended changes, the revised draw on the BSR is $998,000. This is a $3.9 million decrease from the levels proposed in the FY 2017 City Manager Proposed Operating Budget of $4.9 million. The estimated FY 2017 BSR would be at $39.5 million or 20.4% of the FY 2017 General Fund Recommended Expenditure budget. This level is $3.6 million above the target level of 18.5% and slightly exceeds ($688,000) the 20% maximum as approved by the City Council. General Capital Improvement Fund Summary of Recommended Changes to the FY 2017 City Manager’s Proposed Budget In order to meet the directions requested by the Finance Committee and after further analysis by staff, a number of adjustments are recommended to the Capital Improvement Fund as outlined in detail in Attachment A, Exhibit 2. Adjustments primarily fall into two categories: 1) projects have been identified and are recommended to be deferred for one year from FY 2017 to FY 2018 and 2) the reappropriation of projects from FY 2016 to FY 2017 ($1.8 million). After looking at the status of current projects and the upcoming pipeline in the context of resource capacity, three projects are recommended for deferral. This is compared to the four projects outlined earlier to meet the request of the Finance Committee target level of reductions. The Ventura Building Improvement’s Project is not recommended for deferral due to the high priority level of this project for the City Council. Attachment – A, Exhibit 2 outlines in detail the transactions to reduce the FY 2017 Proposed Capital Budget and reallocate the staffing costs that will be redirected to complete remaining projects in the pipeline. These changes are offset by a recommended reduction in the transfer from the General Fund in the amount of $4.3 million, resulting in a net transfer of $17.6 million including the $8.0 million of Transient Occupancy Tax proceeds. The recommended project deferrals and the net potential savings to the General Capital Fund include: - Municipal Services Center A, B, & C, Roof Replacement (PF-17000) $ 817,000 - Ramos Park Improvements (PG-14000) $ 175,000 City of Palo Alto Page 12 - Rinconada Park Improvements (PE-08001) $3,335,000 $4,327,000 In total, when including recommended reappropriations of funds, a net reduction to the FY 2017 City Manager Proposed General Capital Improvement Fund Budget of $3.6 million is recommended by staff. This would reduce the Capital Improvement Fund FY 2017 budget from $71.9 million to $68.3 million. Enterprise Funds Summary of Recommended Changes to the FY 2017 City Manager’s Proposed Budget Recommended adjustments in the various Enterprise Funds are minimal and outlined in Attachment A, Exhibit 2. Overall, there are two types of changes recommended in the Enterprise Funds, 1) the reappropriation of funds for various capital projects and 2) recommended adjustments to projects to correct for omissions or defer projects. Recommended Project Revisions As approved by the Finance Committee, the addition of the Electric Fund Capital Improvement Project: Facility Relocation for Caltrain Modernization Project was included in the recommended changes. Subsequent to the printing of the FY 2017-2021 Proposed Capital Improvement Plan, a new project was identified by the Utilities Department that is recommended to be added to the five-year plan with $150,000 recommended to be budgeted in FY 2017. This project is detailed in the At Places Memorandum dated May 17, 2016, and provides funding for the relocation of overhead Utility Electric and Fiber Optic lines to provide adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Powers Board (Caltrain) to convert their diesel powered commuter trains to electric power. As discussed in the General Capital Improvement Fund Section, several Capital Improvement Projects are recommended to be deferred from FY 2017. One of these projects, the Municipal Services Center A, B, & C, Roof Replacement (PF-17000) Project is partially funded by some of the Enterprise Funds, as shown in the table below: - Electric Fund $308,204 - Fiber Optics Fund 18,671 - Gas Fund 144,273 - Refuse Fund 19,000 - Wastewater Treatment Fund 79,857 - Water Fund 132,995 $703,000 The remaining changes recommended in various Enterprise Funds reflect the reappropriation of funds from FY 2016 to FY 2017 for capital projects as discussed later in this report. In total, when including recommended reappropriations of funds, the following net changes occur by fund: City of Palo Alto Page 13  a net increase to the FY 2017 City Manager’s Proposed Electric Fund Capital Budget of $4.3 million is recommended by staff.  a net increase to the FY 2017 City Manager’s Proposed Fiber Optics Fund Capital Budget of $0.2 million is recommended by staff.  a net increase to the FY 2017 City Manager’s Proposed Gas Fund Capital Budget of $4.8 million is recommended by staff.  a net decrease to the FY 2017 City Manager’s Proposed Refuse Fund Capital Budget of $0.1 million is recommended by staff.  a net increase to the FY 2017 City Manager’s Proposed Storm Drainage Fund Capital Budget of $0.5 million is recommended by staff.  a net increase to the FY 2017 City Manager’s Proposed Wastewater Collection Fund Capital Budget of $1.8 million is recommended by staff.  a net decrease to the FY 2017 City Manager’s Proposed Wastewater Treatment Fund Capital Budget of $3.8 million is recommended by staff.  a net increase to the FY 2017 City Manager’s Proposed Water Fund Capital Budget of $10.4 million is recommended by staff. Internal Service Funds Summary of Recommended Changes to the FY 2017 City Manager’s Proposed Budget As discussed above, the Municipal Services Center A, B, & C, Roof Replacement (PF-17000) Project is recommended to be deferred from FY 2017, and $380,000 of the project is funded by the Vehicle Replacement Fund. In total, when including recommended reappropriations of funds, a net increase to the FY 2017 City Manager Proposed Vehicle Replacement Fund Capital Budget of $55,253 is recommended by staff. In total, when including recommended reappropriations of funds, a net increase to the FY 2017 City Manager Proposed Technology Fund Capital Budget of $1.5 million is recommended by staff. Special Revenue Funds As discussed above, the City Manager’s Fiscal Year 2017 Proposed Operating Budget included $50,000 in the Residential Parking Permit Fund for initial work associated with new Residential Parking Permit programs. Following the direction given by the City Council on May 9, 2016 to establish new RPP programs in Evergreen Park and Southgate, an additional $230,000 will be transferred from the General Fund to the Residential Parking Permit Fund for the establishment of those programs. This action is detailed further in Attachment A, Exhibit 2, Amendments to the City Manager’s Fiscal Year 2017 Proposed Operating and Capital Budgets. Capital Reappropriations As described in the Proposed Capital Budget document and discussed during the Finance Committee Budget Hearings, the City Council-approved a change in the method for accounting for capital budget reappropriations, which are included in the 2017-2021 Proposed Capital City of Palo Alto Page 14 Budget Improvement Program (CIP). Previously, any unspent capital funds carried forward from one fiscal year to the next automatically, as long as the project was active. As a result of the October 2014 change to the Municipal Code, City Council authorization is now required for reappropriations. The FY 2017 budget continues this process with the FY 2017 Proposed Capital Budget including approximately $58.0 million in reappropriated funds, across all funds. In the time since the Proposed Budget figures were developed (late winter and early spring of 2016), departments have re-reviewed current year estimates and the reappropriation amounts built into the proposed CIP. Additional reappropriation adjustments are recommended as part of this wrap-up memorandum in order to update the FY 2017 Capital Budget with current, more refined estimated activity levels in Fiscal Year 2016. Cumulatively, this re-review of projects has resulted in staff’s recommendation to increase the Fiscal Year 2017 Proposed Budget by a net total of $21.7 million. These adjustments, as outlined in detail in Attachment – A Exhibit 2, will ensure that funds are available at the onset of Fiscal Year 2017 for projects that have experienced delays in the current year and will reduce the Fiscal Year 2017 Proposed budget for projects that experienced higher than anticipated expenditure levels in Fiscal Year 2016. These projects are at various stages of their plans and the funding is required to fulfill the commitment and/or contractual obligations. TABLE OF ORGANIZATION At this time, no changes from the Table or Organization as outlined in the City Manager’s FY 2017 Proposed Operating Budget on pages 481 through 497 for full time benefited positions are recommended. As discussed earlier, an evaluation of a 2.0 FTE position reduction recommendation from the City Manager is pending. Once that is brought forward, a motion can be made to amend the Table of Organization as outlined in the FY 2017 Proposed Operating Budget as appropriate. MUNICIPAL FEE SCHEDULE On May 12, 2016, the Finance Committee recommended that the City Council adopt the changes to the Fiscal Year 2017 Proposed Municipal Fee Schedule with amendments (Attachment A, Exhibit 5). Major changes made to the Fiscal Year 2016 Proposed Municipal Fee Schedule include a 5.5% fee increase for average salary and benefits and adjustments to achieve cost recovery levels per the guidelines approved by the City Council, and adjustments to Planning and Community Environment Impact Fees in accordance with Municipal Codes. Additionally, as detailed in the attached City Manager’s Report, the Finance Committee approved eleven new fees, 118 fees adjusted by a rate other than 5.5% to either adjust for cost- recovery levels, align with market value, or capture other technical adjustments, and the deletion of eight fees. It should be noted that amendments to Municipal Fees for Development Services, with the exception of the Public Works division, will be brought forward separately following the completion of a cost of services analysis that is currently underway. FISCAL YEAR 2017 PROPOSED RATE CHANGES City of Palo Alto Page 15 Staff and the Finance Committee recommend that the City Council approve the Utility Rate Changes listed below. These rate changes were approved by the Finance Committee between April and May of 2016.  Dark Fiber Optic Rate Increase (Attachment B): Rates are adjusted annually based on the Consumer Price Index (CPI). The Fiber Optic Rate will increase 3.2% to reflect the annual CPI change. See Attachment B for more information.  FY 2017 Electric Financial Plan (Attachment C) and Electric Rate Increase (Attachment D): The FY 2017 Electric Utility Financial Plan includes projections of the utility’s costs and revenues through FY 2023. Costs are projected to rise substantially for the next several years, most notably for electric supply purchases, transmission costs, and additional capital investments. An 11% overall rate increase is proposed for July 1, 2016, although the actual rate increases for each customer class will differ as a result of rebalancing of the cost allocation between customer groups as determined by the new cost of service analysis (COSA). See Staff Report #6857 for additional information.  FY 2017 Gas Financial Plan (Attachment E) and Gas Rate Increase (Attachment F): The FY 2017 Gas Utility Financial Plan includes projections of the utility’s costs and revenues for FY 2017 through FY 2026. Costs have risen over the past several years and revenues have not kept pace. An 8% gas rate increase on July 1, 2016 is proposed. See Staff Report #6858 for additional information.  FY 2017 Refuse Rate Increase (Attachment G): Rates are proposed to increase by 9% for residential users (Attachment H), by 5% for commercial garbage and demolition, and the commercial compost rate is proposed to be decreased by 7% (Attachment I). Additionally, it is recommended that rate schedules R-2 and R-3 (Commercial Refuse Rates) be consolidated into a new Utility Rate Schedule designated R-C (Commercial Refuse Rates) (Attachment I). See Staff Report #6723 for additional information.  FY 2017 Storm Water and Surface Water Drainage Rate Increase (Attachment J): Rates are adjusted annually based on the Consumer Price Index (CPI). The Storm Water and Surface Drainage Rate will increase 3.2% to reflect the annual CPI change. See Staff Report #6657 for more information.  FY 2017 Wastewater Financial Plan (Attachment K) and Wastewater Rate Increase (Attachment L): The FY 2017 Wastewater Collection Utility Financial Plan includes projections of the utility’s costs and revenues through FY 2026. Expenses have been higher than revenues for several years, and treatment costs are increasing. A 9% wastewater collection rate increase in FY 2017 is proposed. See Staff Report #6690 for additional information.  FY 2017 Water Financial Plan (Attachment M) and Water Rate Increase (Attachment N): The FY 2017 Water Utility Financial Plan includes projections of the utility’s costs and revenues for FY 2017 through FY 2026. Costs are projected to rise substantially for the next several years due primarily to increasing water supply costs. Staff recommends a 6% water rate increase effective on July 1, 2016. See Staff Report #6689 for more information. City of Palo Alto Page 16 A separate Staff Report detailing the establishment of a Net Energy Metering Successor Rate, the establishment of the Net Energy Metering Transition Policy, and amending Rule and Regulation 2 (Definitions and Abbreviations) and 29 (Net Energy Metering and Interconnection) is anticipated to be brought forward for City Council consideration on June 27, 2016. COMPENSATION PLANS In addition to the approval of the Table of Organization, the changes in the City Manager’s Fiscal Year 2017 Budget result in amendments to three of the City’s labor group’s compensation plans. These are changes to classification compensations or changes to them add or amend current job classifications for these labor groups. Below is a summary of the recommended changes: Utilities Management Professional Association of Palo Alto (UMPAPA) (Attachment O, Exhibit 1):  Add Manager, Utilities Strategic Business classification  Delete Senior Management Analyst-U classification  Title change Manager, Utilities Marketing Services to Manager, Utilities Program Services Service Employees International Union (SEIU) 2015-2018 MOA (Attachment O, Exhibit 2):  Add Electric Equipment Technician classification  Add Heavy Equipment Operator/Installer Repairer classification  Add Plant Mechanic classification  Add Substation Electrician - Apprentice classification  Update Facilities Technician classification Salary Rates Service Employees International Union (SEIU) 2013-2015 MOA (Attachment O, Exhibit 3):  Title change Facilities Mechanic to Facilities Technician to retroactively align the reclassification in the appropriate salary schedule City of Palo Alto Page 17 International Association of Fire Fighters (IAFF) (Attachment O, Exhibit 4):  Add Fire Fighter EMT, Hazardous Materials, Paramedic classification  Add Fire Apparatus Operator EMT, Hazardous Materials, Paramedic classification  Delete Fire Apparatus Operator classification  Delete Fire Captain classification  Delete 40-Hour Training Captain classification REFERRAL ITEMS FOR FULL COUNCIL AT THE REQUEST OF THE FINANCE COMMITTEE The Finance Committee approved a motion on May 23, 2016 to recommend to the full City Council to refer to staff the following items for further review. A motion by the full City Council would be necessary to refer these items to staff.  Review sworn versus non-sworn staffing for cost savings/enhanced services/ increased revenues.  Identify options for increasing Human Services Resource Allocation Process (HSRAP) funding in fiscal year 2018. Potentially increase to the $667,000 level which reflects a 2.5% cost of living increase annually from fiscal year 2002 levels.  Capture costs associated with parking and traffic initiatives attaining cost recovery between revenues and expense.  Recommended to the City Council that a referral be made to the Policy and Services Committee to explore a low income fee program, specifically with regards to Community Services.  Reach a sustainable budget with staffing cost escalators such as salaries and benefits. RESOURCE IMPACT This report summarizes and seeks the City Council approval of the FY 2017 Operating and Capital budgets and the supporting fee schedules, rate schedules, and salary schedules in order to support the projections and appropriation included. The approval of the City Manager’s FY 2017 Proposed Capital and Operating Budget as recommended to be amended in this report would result in the appropriation of funds for these services and programs to be completed during the 2017 fiscal year. ENVIRONMENTAL REVIEW Adoption of a budget is not a project for purposes of the California Environmental Quality Act. Attachments:  Attachment A: FY 2017 Budget Adoption Ordinance (DOCX)  Attachment A, Exhibit 1: FY 2017 City Manager's Proposed Budget & Muni Fee (Previously Distributed) (PDF) City of Palo Alto Page 18  Attachment A, Exhibit 2: Recommended Amendments to the City Manager's FY 2017 Proposed Budget (PDF)  Attachment A, Exhibit 3: Municipal Fee Schedule Amendments for FY 2017 (PDF)  Attachment B: Dark Fiber Resolution and Schedule (PDF)  Attachment C: Electric Financial Plan Resolution and Plan (PDF)  Attachment D: Electric Rates Resolution and Schedule (PDF)  Attachment E: Gas Utility Financial Plan and Resolution (PDF)  Attachment F: Gas Rates Resolution and Schedule (PDF)  Attachment G: Refuse Resolution (PDF)  Attachment H: Refuse Residential Rates (PDF)  Attachment I: Refuse Commercial (PDF)  Attachment J: Storm Drain Resolution and Rates Schedule (PDF)  Attachment K: Wastewater Collection Resolution and Financial Plan (PDF)  Attachment L: Wastewater Resolution and Rates Schedule (PDF)  Attachment M: Water Financial Plan Resolution and Plan (PDF)  Attachment N: Water Resolution and Rates Schedule (PDF)  Attachment O: Salary Schedule Resolution (PDF)  Attachment P: Budget Wrap-up Report (CMR #7018) (PDF)  Attachment Q: Budget Hearings At Places Memoranda (PDF)  Attachment R: Budget Hearings Various Presentations to Finance Committee (PDF)  Attachment S: FY 2017 Budget Hearing Transcripts (PDF) ATTACHMENT A 1 ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2017 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 2017; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 13, 2016, 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 13, 2016, 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 2017: (a) The budget document (Exhibit “1”) containing the proposed operating and capital budgets submitted on April 25, 2016, by the City Manager for Fiscal Year 2017, entitled “City of Palo Alto - City Manager’s Fiscal Year 2017 Proposed Budget” covering General Government Funds, Enterprise 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 2017 Proposed Budget, attached hereto as Exhibit “2,” and made a part hereof; and ATTACHMENT A 2 (c) Changes and revised pages in the Table of Organization, as displayed on pages 481 through 497 in “Exhibit 1,” and made a part hereof; and (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit “3”; and SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein. SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended. SECTION 5. Appropriations for the Fiscal Year 2016 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 2016 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2017. SECTION 6. The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit “2” and the Fiscal Year 2016 appropriations carried forward as provided in Section 5. SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City’s funds to the Director of Administrative Services, as Treasurer, in accordance with the City’s Investment Policy for Fiscal Year 2017. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit “3”. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer’s burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department and Development Services Department fees relating to a “development project” as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. ATTACHMENT A 3 SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art. XIII C, Section 1(e)(2), such fees are not a tax. SECTION 11. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. ATTACHMENT A 4 INTRODUCED AND PASSED: Enter Date Here AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: _________________________ City Clerk ___________________________ Mayor APPROVED AS TO FORM: APPROVED: City Attorney City Manager Director of Administrative Services Fiscal Year 2017 City Manager’s Proposed Operating & Capital Budget These documents were originally distributed in Council Packet of April 25, 2016. Printed copies are available upon request for $27 per book. These documents may be viewed at any City of Palo Alto Library or the City’s website: www.cityofpaloalto.org/gov/depts/asd/budget.asp Changes to the Municipal Fee Schedule were distributed in Council Packet on May 5, 2016. The City Manager’s Staff Report can be viewed on the City’s website: http://www.cityofpaloalto.org/civicax/filebank/documents/52312 In addition, a replacement page for that staff report was issued on May 5, 2016. That replacement page can be viewed on the City’s website: http://www.cityofpaloalto.org/civicax/filebank/documents/52326 CMR #6932: ATTACHMENT A, EXHIBIT 1 Department Category Adjustment Category Adjustment GENERAL FUND Planning and Community Environment Department California Avenue Retail Feasibility Study This action eliminates funding associated with the California Avenue Retail Feasibility Study included in the City Manager's Fiscal Year 2017 Proposed Operating Budget. The $75,000 in funding that was included will instead be used to offset costs associated with the development of two new Residential Parking Permit programs for Evergreen Park and Southgate. Contract Services (75,000)$ Public Works Department Tree Trimming Contract This action provides additional funding to the Public Works Department associated with the Tree Trimming Contract to improve the cycle time for tree trimming from 15 years to 10 years, as recommended by the Finance Committee. This additional funding will enable the number of trees pruned proactively on an annual basis to increase from 1,978 per year in the 15 year cycle to 3,415 per year in the 10 year cycle. Contract Services 170,000$ Non- Departmental Budget FY 2016 Transportation Contingency This action recognizes anticipated planned savings in the FY 2016 Transportation Contingency of $70,000 and increases the June 30, 2016 estimated Budget Stabilization Reserve that will be carried forward to FY 2017 by $70,000 as a source of funds. This action will partially offset funding for the establishment of two RPPs in Evergreen Park and Southgate. The City Council directed staff to create these new RPPs on May 9, 2016. Beginning Fund Balance: Budget Stabilization Reserve 70,000$ Non- Departmental Budget FY 2017 Planning and Transportation Contingency This action establishes a $500,000 contingency for Transportation and Planning projects that may arise over the course of Fiscal Year 2017. Potential uses include urban design support for professional staff and for the development of design guidelines in Eichler neighborhoods, Middlefield Road traffic analysis and safety enhancements, and Shuttle and RPP expenditures. Any use of the Contingency funding would require City Council approval. Contingency 500,000$ Non- Departmental Budget Position Reduction/Elimination (2.0 FTE positions) This action reduces the Non-Departmental Budget by the equivalent of approximately 2.0 FTE positions. As part of the Finance Committee recommended balancing revisions approved on May 23, 2016, a request for 2.0 position reductions was requested. The City Manager is currently evaluating staffing resources and priorities throughout the city and will bring forward a recommendation at a later time. Salaries & Benefits (374,000)$ CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses CMR #6932: ATTACHMENT A, EXHIBIT 2 Department Category Adjustment Category Adjustment GENERAL FUND CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Non- Departmental Budget Transfer to the Residential Parking Permit Fund: This action establishes a transfer of $230,000 to the Residential Parking Permit fund to provide funding for two new RPPs in FY 2017 in Evergreen Park and Southgate, as directed by the City Council on May 9th, 2016. This action is partially offset by the elimination of the California Avenue Retail Feasibility Study ($75,000) and by the use of the remaining FY 2016 Transportation Contingency ($70,000). Transfers Out 230,000$ Non- Departmental Budget Transfer to the General Capital Fund: This action reduces the transfer to the General Capital Fund by an additional $4.3 million for a total reduction of $5.7 million in FY 2017. This additional reduction is recommended to be a one-time reduction as a result of the deferral of construction activity in projects in the Capital Fund that was programmed in the City Manager's Fiscal Year 2017 Proposed Capital Budget. The total transfer in FY 2017 would be $17.6 million, including the transfer of Transient Occupancy Tax revenues of and estimated $8.0 million. Additional details can be found in the General Capital Improvement Fund section of this attachment. Transfers (4,327,000)$ Non- Departmental Budget Adjustment to Ending Fund Balance/Budget Stabilization Reserve: This action increases the Budget Stabilization Reserve (BSR)to account for actions recommended in this report. This increase in the BSR would bring the FY 2017 estimated level to $39.5 million reflecting a recommended draw on the BSR of $998,000 in the FY 2017 Proposed Budget. The estimated BSR level of $39.5 million in FY 2017 reflects approximately 20.4% of the FY 2017 General Fund expenditures and is $3.6 million above the target level of 18.5% and slightly exceeds ($688,000) the range of a 15% minimum to 20% maximum as approved by the City Council. Fund Balance 3,946,000$ GENERAL FUND SUBTOTAL 70,000$ 70,000$ Department Category Adjustment Category Adjustment GENERAL CAPITAL IMPROVEMENT FUND Capital Art in Public Places (AC-86017) This action reduces the Art in Public Places project to correct an error in the calculation of this project that was identified subsequent to the printing of the FY 2017- 2021 Proposed Capital Improvement Plan. Capital: Design/ Construction (156,327)$ Capital Municipal Services Center A, B, & C Roof Replacement (PF-17000) This action recommends deferring the Municipal Services Center (MSC) A, B, & C Roof Replacement project by one year to fiscal year 2018. Given staffing resources and the current status of the work being completed for this project, it is anticipated that a deferral is feasible and will not present undue risk to the MSC facility. A corresponding reduction in transfers from various funds is recommended that will partially offset this FY 2017 budget adjustment. These transfers were budgeted to recovered these funds fair share of the replacement costs as a number of workgroups are housed at the MSC. Transfers In (1,083,000)$ Capital: Construction (1,942,328)$ Capital Ramos Park Improvements (PG-14000) This action recommends deferring funding for the Ramos Park Improvements by an additional year to Fiscal Year 2018. In Fiscal Year 2016, funding was allocated to for the replacement of existing park playground, benches, and drinking fountain, as well as resurfacing the basketball court playing surface. This project was recommended to be extended to FY 2017 due to staffing constraints and as a result of this action, is recommended to be deferred one additional year to Fiscal Year 2018. The Community Services Department is currently undergoing a Parks Master Plan as well and it is anticipated that upon completion of that a review of parks capital investments will be evaluated in the context of any finding in that plan and recommended adjustments may be brought forward to align with the Master Plan. Capital: Design/ Construction (199,019)$ Capital Rinconada Park Improvements (PE-08001) This action recommends deferring funding for the Rinconada Park Improvements to Fiscal Year 2018. This project timing was adjusted to Fiscal Year 2017 to align with the completion of the Rinconada Parks Master Plan, however, due to current staffing capacity levels and the larger Parks Master Plan that the Community Services Department is currently undergoing, a deferral of this project is recommended. Capital: Design/ Construction (3,474,224)$ CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Department Category Adjustment Category Adjustment GENERAL CAPITAL IMPROVEMENT FUND CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Salaries and Benefits - Capital Improvement Fund CIP Projects (AS-10000) This action recommends increasing the Salaries and Benefits - Capital Improvement Fund CIP Projects budget in fiscal year 2017 by $206,000 (from $1.5 million to $1.7 million). This project provides funding for the estimated salaries and benefit costs of City Staff assigned to manage the General Fund Capital Improvement program. With the recommended deferral of some projects, the associated salary and benefit costs previously programmed in those projects are recommended to be allocated to this project. During the course of the year, these resources will be reallocated and charged appropriately to other CIP activities. Capital: Salaries & Benefits 205,571$ Capital Transfer from the General Fund to the General Capital Improvement Fund This action recommends a one-time reduction in the transfer of funds from the General Fund to the General Capital Fund of $4.3 million brining the FY 2017 transfer level to $17.6 million compared to the recommended $21.9 million that was included in the FY2017 City Manager's Proposed Capital Budget. This action is recommended to be offset by the recommended deferral of three capital improvement projects formerly budgeted to be addressed during FY 2017, however, upon further review sufficient resources do not exist to complete these projects in this timeframe. This one- time reduction would require a increase in the General Fund transfer of a comparable or increased level to the FY2018 Proposed Capital Improvement Budget above what is included in the FY 2017-2026 Long Range Financial Forecast in order to ensure sufficient funding is available to complete these projects. Transfers In (4,327,000)$ Capital Reappropriation: Americans With Disabilities Act Compliance (PF-93009) Capital Impv. Program 23,884$ Capital Reappropriation: Art In Public Spaces (AC-86017)Capital Impv. Program 110,910$ Capital Reappropriation: Baylands Boardwalk Improvements (PE-14018) Capital Impv. Program 22,191$ Capital Reappropriation: Baylands Nature Interpretive Center Facility Improvements (PE-15029) Capital Impv. Program 45,004$ Capital Reappropriation: Bicycle and Pedestrian Plan- Implementation Project (PL-04010) Capital Impv. Program (1,117,226)$ Capital Reappropriation: Buckeye Creek Hydrology Study (PG- 15000) Capital Impv. Program 149,180$ Capital Reappropriation: Byxbee Park Trails (PE-13020)Capital Impv. Program 4,183$ Department Category Adjustment Category Adjustment GENERAL CAPITAL IMPROVEMENT FUND CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Reappropriation: California Avenue Parking District Parking Improvements (PF-14004) Capital Impv. Program (2,800)$ Capital Reappropriation: California Avenue- Transit Hub Corridor Project (PL-11002) Capital Impv. Program 199,705$ Capital Reappropriation: City Facility Parking Lot Maintenance (PE-09003 ) Capital Impv. Program (44,194)$ Capital Reappropriation: City Hall First Floor Renovations (PE- 12017) Capital Impv. Program 161,995$ Capital Reappropriation: Civic Center Waterproofing Study and Repairs (PE-15020) Capital Impv. Program 154,048$ Capital Reappropriation: Curb and Gutter Repairs (PO-12001)Capital Impv. Program (38,381)$ Capital Reappropriation: Dinah Summerhill Pedestrian/Bicycle Path (PL-11001) Capital Impv. Program 113,641$ Capital Reappropriation: El Camino Real & Churchill Intersection Improvements-Design (PL-14000) Capital Impv. Program 21,555$ Capital Reappropriation: Embarcadero Road Corridor Improvements (PL-15001) Capital Impv. Program 28,129$ Capital Reappropriation: Facility Interior Finishes Replacement (PF-02022) Capital Impv. Program (2,120)$ Capital Reappropriation: Fire Station 1 Improvements (PF- 14002) Capital Impv. Program (11,870)$ Capital Reappropriation: Fire Station 3 Replacement (PE- 15003) Capital Impv. Program 59,232$ Capital Reappropriation: Library & Community Center - Temporary Facilities (PE-09010) Capital Impv. Program 117,155$ Capital Reappropriation: Lucie Stern Buildings Mechanical and Electrical Upgrades (PE-14015) Capital Impv. Program 1,054,723$ Capital Reappropriation: Midtown Connector (PL-14001)Capital Impv. Program 91,234$ Capital Reappropriation: Mitchell Park Library and Community Center (PE-09006) Capital Impv. Program 22,369$ Capital Reappropriation: New Downtown Parking Garage (PE- 15007) Capital Impv. Program 100,000$ Capital Reappropriation: New Public Safety Building (PE- 15001) Capital Impv. Program (369,711)$ Capital Reappropriation: Off-Road Pathway Resurfacing And Repair (OS-09001) Capital Impv. Program 20,459$ Capital Reappropriation: Open Space Lakes And Pond Maintenance (OS-00002) Capital Impv. Program 20,409$ Capital Reappropriation: Open Space Trails and Amenities (OS- 00001) Capital Impv. Program (72,759)$ Capital Reappropriation: Park and Open Space Emergency Repairs (PG-09002) Capital Impv. Program (28,466)$ Capital Reappropriation: Park Maintenance Shop Remodel (PG- 09003) Capital Impv. Program 6,000$ Capital Reappropriation: Parking Guidance Systems, Access Controls, and Revenue Collection Equipment (PL-15002) Capital Impv. Program 129,724$ Department Category Adjustment Category Adjustment GENERAL CAPITAL IMPROVEMENT FUND CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Reappropriation: Parking Wayfinding (PL-15004)Capital Impv. Program 25,524$ Capital Reappropriation: Rinconada Library New Construction and Improvements (PE-11000) Capital Impv. Program (11,996)$ Capital Reappropriation: Roofing Replacement (PF-00006)Capital Impv. Program (28,178)$ Capital Reappropriation: Roth Building Maintenance (PF- 07011) Capital Impv. Program (2,313)$ Capital Reappropriation: Safe Routes To School (PL-00026)Capital Impv. Program 250,639$ Capital Reappropriation: Sarah Wallis Park Improvements (PG- 12004) Capital Impv. Program 48,002$ Capital Reappropriation: Sign Reflectivity Upgrade (PO-11000)Capital Impv. Program (97,525)$ Capital Reappropriation: Street Lights Improvements (PO- 05054) Capital Impv. Program 44,953$ Capital Reappropriation: Street Maintenance (PE-86070)Capital Impv. Program (166,228)$ Capital Reappropriation: Tennis and Basketball Court Resurfacing (PG-06001) Capital Impv. Program (11,100)$ Capital Reappropriation: Thermoplastic Lane Marking and Striping (PO-11001) Capital Impv. Program 29,376$ Capital Reappropriation: Traffic Signal and Intelligent Transportation System Upgrades (PL-05030) Capital Impv. Program 567,968$ Capital Reappropriation: Transportation and Parking Improvements (PL-12000) Capital Impv. Program 131,523$ Capital Reappropriation: Ventura Buildings Improvements (PE- 15011) Capital Impv. Program 89,998$ Capital Adjustment to Infrastructure Reserve/Beginning Fund Balance: This action increases the FY 2017 Beginning Fund Balance due to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY2017. An increase in the Infrastructure Reserve offsets actions recommended in this report. Beginning Fund Balance 1,838,846$ Reserve: Infrastructure Reserve 156,327$ GENERAL CAPITAL IMPROVEMENT FUND SUBTOTAL (3,571,154)$ (3,571,154)$ Department Category Adjustment Category Adjustment INTERNAL SERVICE FUNDS TECHNOLOGY FUND Capital Reappropriation: Public Safety Computer-Aided Dispatch Replacement (TE-09000) Capital Impv. Program (75,380)$ Capital Reappropriation: Development Center Blueprint Technology Enhancements (TE-12001) Capital Impv. Program (102,921)$ Capital Reappropriation: Interactive Voice Response (TE- 13001) Capital Impv. Program 106,181$ Capital Reappropriation: Library Computer System Software (TE-11001 ) Capital Impv. Program 200,868$ Capital Reappropriation: Library RFID Implementation (TE- 06001) Capital Impv. Program 314,589$ Capital Reappropriation: Mobile In-Car Video System Replacement (TE-11002) Capital Impv. Program 30,902$ Capital Reappropriation: Radio Infrastructure Replacement (TE- 05000) Capital Impv. Program 576,841$ Capital Reappropriation: Telephone System Replacement (TE- 00010) Capital Impv. Program 143,194$ Capital Reappropriation: Utilities Customer Bill System Improvements (TE-10001) Capital Impv. Program 175,656$ Capital Reappropriation: Virtual Library Branch (TE-14002)Capital Impv. Program 170,425$ Capital Adjustment to Beginning Fund Balance: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY2017. Beginning Fund Balance 1,540,355$ TECHNOLOGY FUND SUBTOTAL 1,540,355$ 1,540,355$ CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Department Category Adjustment Category Adjustment INTERNAL SERVICE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses VEHICLE REPLACEMENT & MAINTENANCE FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Vehicle Replacement and Maintenance Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF- 17000) to adjust for the recommended deferral of this project. A corresponding increase in the Retained Earnings Reserve is recommended to offset this action. Transfer Out (380,000)$ Capital Reappropriation: Scheduled Vehicle and Equipment Replacement - Fiscal Year 2015 (VR-15000) Capital Impv. Program (72,606)$ Capital Reappropriation: Scheduled Vehicle and Equipment Replacement - Fiscal Year 2016 (VR-16000) Capital Impv. Program 127,859$ Capital Adjustment to Beginning Fund Balance/Retained Earnings Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY2017 as well as decreased expenses in FY 2017 offset by increases to the Retained Earnings Reserve. Beginning Fund Balance 55,253$ Reserve: Retained Earnings 380,000$ VEHICLE REPLACEMENT & MAINTENANCE FUND SUBTOTAL 55,253$ 55,253$ Department Category Adjustment Category Adjustment SPECIAL REVENUE FUNDS RESIDENTIAL PARKING PERMIT FUND Operations and Maintenance Costs for Evergreen and Southgate Residential Preferential Parking (RPP) Programs/Transfer from the General Fund This action establishes a transfer from the General Fund to the Residential Parking Permit fund and appropriates the funds to provide operations and maintenance costs associated with the creation of two new RPPs. On May 9th, 2016 the City Council directed staff to create RPPs for each of these districts. Transfers in 230,000$ General Expense 230,000$ RESIDENTIAL PARKING PERMIT FUND SUBTOTAL 230,000$ 230,000$ CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Department Category Adjustment Category Adjustment ENTERPRISE FUNDS ELECTRIC FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Electric Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF-17000) to adjust for the recommended deferral of this project. Corresponding increases to the Supply Reserve and the Distribution Reserve are recommended to offset this action. Transfer Out (308,204)$ Capital Facility Relocation for Caltrain Modernization Project (EL-17007): This action established the Facility Relocation for Caltrain Modernization Project in the amount of $150,000 in FY 2017. This project provides for the relocation of overhead Utility Electric and Fiber Optic lines to provide adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Powers Board (Caltrain) to convert their diesel powered commuter trains to electric power. Capital Impv. Program 150,000$ Capital Reappropriation: SCADA System Upgrades (EL-02010)Capital Impv. Program 30,000$ Capital Reappropriation: Electric Utility Geographic Information System (EL-02011) Capital Impv. Program 200,000$ Capital Reappropriation: Rebuild Underground District 24 (EL- 10006) Capital Impv. Program 1,075,560$ Capital Reappropriation: Street Light System Conversion Project (EL-10009) Capital Impv. Program 30,000$ Capital Reappropriation: Rebuild Underground District 15 (EL- 11003) Capital Impv. Program 144,181$ Capital Reappropriation: Rebuild Underground District 19 (EL- 11008 ) Capital Impv. Program 12,262$ Capital Reappropriation: Underground District 47-Middlefield, Homer, Webster, Addison (EL-11010) Capital Impv. Program 744,038$ Capital Reappropriation: Smart Grid Technology Installation (EL-11014) Capital Impv. Program 109,096$ Capital Reappropriation: Underground District 46 - Charleston/El Camino Real (EL-12001) Capital Impv. Program 28,651$ Capital Reappropriation: Sand Hill / Quarry 12kV Tie (EL- 13006) Capital Impv. Program 157,259$ Capital Reappropriation: Underground Distribution System Security (EL-13007) Capital Impv. Program 50,000$ Capital Reappropriation: Upgrade Electric Estimating System (EL-13008) Capital Impv. Program 25,000$ Capital Reappropriation: Maybell 1&2 4/12kV Conversion (EL- 14004) Capital Impv. Program 185,372$ Capital Reappropriation: Reconfigure Quarry Feeders (EL- 14005) Capital Impv. Program 11,606$ CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Reappropriation: Colorado/Hopkins System Improvement (EL-15000) Capital Impv. Program 50,000$ Capital Reappropriation: Electric Substation Battery Replacement (EL-15001) Capital Impv. Program 142,117$ Capital Reappropriation: Rebuild Underground District 26 (EL- 16000) Capital Impv. Program (50,000)$ Capital Reappropriation: Underground System Rebuild (EL- 16001) Capital Impv. Program (180,000)$ Capital Reappropriation: Capacitor Bank Installation (EL- 16002) Capital Impv. Program 75,000$ Capital Reappropriation: Electric Customer Connection (EL- 89028) Capital Impv. Program 534,000$ Capital Reappropriation: Communications System Improvements (EL-89031) Capital Impv. Program 187,759$ Capital Reappropriation: Substation Protection Improvements (EL-89038) Capital Impv. Program 281,812$ Capital Reappropriation: Substation Facility Improvements (EL- 89044) Capital Impv. Program 204,243$ Capital Reappropriation: Electric System Improvements (EL- 98003) Capital Impv. Program 300,000$ Capital Adjustment to Supply Reserve: This action increases the FY 2017 Supply Reserve to account for the estimated savings as a result of decreased expenses. Reserve: Supply Reserve 22,394$ Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance 4,347,956$ Reserve: Distribution Reserve 135,810$ ELECTRIC FUND SUBTOTAL 4,347,956$ 4,347,956$ Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses FIBER OPTIC FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Fiber Optic Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF-17000) to adjust for the recommended deferral of this project. A corresponding increase in the Distribution Reserve is recommended to offset this action. Transfer Out (18,671)$ Capital Reappropriation: Fiber Optics Network System Improvements (FO-10001) Capital Impv. Program 158,000$ Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance 158,000$ Reserve: Distribution Reserve 18,671$ FIBER OPTIC FUND SUBTOTAL 158,000$ 158,000$ GAS FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Gas Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF-17000) to adjust for the recommended deferral of this project. Corresponding increases to the Supply Reserve and the Distribution Reserve are recommended to offset this action. Transfer Out (144,273)$ Capital Reappropriation: System Extensions - Unreimbursed (GS-03009) Capital Impv. Program 128,690$ Capital Reappropriation: Gas Main Replacement - Project 21 (GS-11000) Capital Impv. Program 100,000$ Capital Reappropriation: Gas Distribution System Improvements (GS-11002) Capital Impv. Program 143,714$ Capital Reappropriation: Gas Main Replacement - Project 22 (GS-12001) Capital Impv. Program 3,568,560$ Capital Reappropriation: Gas Main Replacement - Project 23 (GS-13001) Capital Impv. Program 37,500$ Capital Reappropriation: Gas Equipment and Tools (GS-13002)Capital Impv. Program 70,106$ Capital Reappropriation: Gas Distribution System Model (GS- 14004) Capital Impv. Program 106,791$ Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Reappropriation: Security at City Gas Receiving Stations (GS-15001) Capital Impv. Program 150,000$ Capital Reappropriation: Gas System, Customer Connections (GS-80017) Capital Impv. Program 194,976$ Capital Reappropriation: Gas Meters and Regulators (GS- 80019) Capital Impv. Program 304,927$ Capital Adjustment to Supply Reserve: This action increases the FY 2017 Supply Reserve to account for the estimated savings as a result of decreased expenses. Reserve: Supply Reserve 4,517$ Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance 4,805,264$ Reserve: Distribution Reserve 139,756$ GAS FUND SUBTOTAL 4,805,264$ 4,805,264$ REFUSE FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Refuse Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacmeent Project (PF-17000) to adjust for the recommended deferral of this project. A corresponding increase in the Distribution Reserve is recommended to offset this action. Transfer Out (19,000)$ Capital Reappropriation: Household Hazardous Waste Station Improvements (RF-16001) Capital Impv. Program (92,176)$ Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance (92,176)$ Reserve: Distribution Reserve 19,000$ REFUSE FUND SUBTOTAL (92,176)$ (92,176)$ Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses STORM DRAINAGE FUND Capital Reappropriation: Channing Avenue/Lincoln Avenue Storm Drain Improvements (SD-11101) Capital Impv. Program 25,000$ Capital Reappropriation: Matadero Creek Storm Water Pump Station and Trunk Line Improvements (SD-13003) Capital Impv. Program 21,462$ Capital Reappropriation: Storm Drain System Replacement And Rehabilitation (SD-06101) Capital Impv. Program 484,700$ Capital Adjustment to Beginning Fund Balance: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017. Beginning Fund Balance 531,162$ STORM DRAINAGE FUND SUBTOTAL 531,162$ 531,162$ WASTEWATER COLLECTION FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Wastewater Collection Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF-17000) to adjust for the recommended deferral of this project. A corresponding increase in the Distribution Reserve is recommended to offset this action. Transfer Out (79,857)$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 23 (WC-10002) Capital Impv. Program 100,000$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 24 (WC-11000) Capital Impv. Program 7,066$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 25 (WC-12001) Capital Impv. Program 369,419$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 26 (WC-13001) Capital Impv. Program 130,700$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 27 (WC-14001) Capital Impv. Program 498,169$ Capital Reappropriation: Wastewater Collection System Rehabilitation/Augmentation Project 28 (WC-15001) Capital Impv. Program 330,000$ Capital Reappropriation: Wastewater System Improvements (WC-15002) Capital Impv. Program 53,567$ Capital Reappropriation: Sewer System, Customer Connections (WC-80020) Capital Impv. Program 207,439$ Capital Reappropriation: Sewer Lateral/Manhole Rehab/Replacement (WC-99013) Capital Impv. Program 145,189$ Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance 1,841,549$ Reserve: Distribution Reserve 79,857$ WASTEWATER COLLECTION FUND SUBTOTAL 1,841,549$ 1,841,549$ WASTEWATER TREATMENT FUND Capital Reappropriation: Facility Condition Assessment and Retrofit (WQ-04011) Capital Impv. Program (303,544)$ Capital Reappropriation: Plant Master Plan (WQ-10001)Capital Impv. Program (333,933)$ Capital Reappropriation: New Dewatering and Loadout Facility (WQ-14001) Capital Impv. Program (1,867,627)$ Capital Reappropriation: Plant Equipment Replacement (WQ- 80021) Capital Impv. Program (1,263,710)$ Capital Adjustment to Beginning Fund Balance: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017. Beginning Fund Balance (3,768,814)$ WASTEWATER TREATMENT FUND SUBTOTAL (3,768,814)$ (3,768,814)$ WATER FUND Capital Transfer to General Capital Improvement Fund This action reduces the transfer from the Water Collection Fund to the General Capital Improvement Fund budgeted for the Municipal Services Center A, B, & C Roof Replacement Project (PF-17000) to adjust for the recommended deferral of this project. A corresponding increase in the Distribution Reserve is recommended to offset this action. Transfer Out (132,995)$ Capital Reappropriation: Asset Management Mobile Deployment (WS-13004 ) Capital Impv. Program (82,163)$ Capital Reappropriation: Emergency Water Supply Project (WS- 08002) Capital Impv. Program 271,208$ Capital Reappropriation: Seismic Water System Upgrades (WS- 09000) Capital Impv. Program 1,881,097$ Department Category Adjustment Category Adjustment ENTERPRISE FUNDS CITY OF PALO ALTO RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2017 PROPOSED BUDGET Revenues Expenses Capital Reappropriation: Water Distribution System Improvements (WS-11003) Capital Impv. Program 126,582$ Capital Reappropriation: Water General Equipment/Tools (WS- 13002) Capital Impv. Program 20,685$ Capital Reappropriation: Water Main Replacement - Project 25 (WS-11000) Capital Impv. Program 725,386$ Capital Reappropriation: Water Main Replacement - Project 26 (WS-12001) Capital Impv. Program 5,904,489$ Capital Reappropriation: Water Main Replacement - Project 27 (WS-13001) Capital Impv. Program 525,565$ Capital Reappropriation: Water Meters (WS-80015)Capital Impv. Program 252,092$ Capital Reappropriation: Water Recycling Facilities (WS-07001)Capital Impv. Program 193,358$ Capital Reappropriation: Water Regulation Station Improvements (WS-07000) Capital Impv. Program 135,541$ Capital Reappropriation: Water Reservoir Coating Improvements (WS-08001) Capital Impv. Program 320,682$ Capital Reappropriation: Water System Master Plan (WS- 15004) Capital Impv. Program 155,520$ Capital Reappropriation: Water System Supply Improvements (WS-11004) Capital Impv. Program 17,700$ Capital Adjustment to Beginning Fund Balance/Distribution Reserve: This action increases the FY 2017 Beginning Fund Balance to account for the estimated savings in FY 2016 and reappropriation of that savings from FY 2016 to FY 2017 as well as decreased expenses in FY 2017 offset by increases to the Distribution Reserve. Beginning Fund Balance 10,447,742$ Reserve: Distribution Reserve 132,995$ WATER FUND SUBTOTAL 10,447,742$ 10,447,742$ Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Community Services Department Fee Title Justification Residents Non-Residents Residents Non-Residents Residents Non-Residents Art Center - Auditorium $131.00 per hour $197.00 per hour $145.00 per hour $219.00 per hour 10.7%11.2% Fee increase from $131.00 per hour to $145.00 per hour for Residents and from $197.00 per hour to $219.00 per hour for Non-Residents to align with market value based on new A/V equipment in the Auditorium. Art Center - Children's Clay Studio $37.00 per hour $56.00 per hour $39.00 per hour $59.00 per hour 5.4%5.4%Fee increase from $37.00 per hour to $39.00 per hour for Residents and from $56.00 to $59.00 per hour for Non-Residents to align with market value. Art Center - Children's Outdoor Classroom $85.00 per hour $128.00 per hour $89.00 per hour $133.00 per hour 4.7%3.9%Fee increase from $85.00 per hour to $89.00 per hour for Residents and from $128.00 to $133.00 per hour for Non-Residents to align with market value. Art Center - Historic Courtyard $85.00 per hour $128.00 per hour $89.00 per hour $133.00 per hour 4.7%3.9%Fee increase from $85.00 per hour to $89.00 per hour for Residents and from $128.00 per hour to $133.00 per hour for Non-Residents to align with market value. Art Center - Kitchen/Pre-school $37.00 per hour $56.00 per hour $39.00 per hour $59.00 per hour 5.4%5.4%Fee increase from $37.00 per hour to $39.00 per hour for Residents and from $56.00 per hour to $59.00 per hour for Non-Residents to align with market value. Art Center - Lobby $85.00 per hour $128.00 per hour $89.00 per hour $133.00 per hour 4.7%3.9%Fee increase from $85.00 per hour to $89.00 per hour for Residents and from $128.00 to $133.00 per hour for Non-Residents to align with market value. Art Center - Meeting Room $85.00 per hour $128.00 per hour $89.00 per hour $133.00 per hour 4.7%3.9%Fee increase from $85.00 per hour to $89.00 per hour for Residents and from $128.00 to $133.00 per hour for Non-Residents to align with market value. Art Center - Project LOOK! Studio $37.00 per hour $56.00 per hour $39.00 per hour $59.00 per hour 5.4%5.4%Fee increase from $37.00 per hour to $39.00 per hour for Residents and from $56.00 to $59.00 per hour for Non-Residents to align with market value. Art Center - Sculpture Garden $112.00 per hour $168.00 per hour $117.00 per hour $175.00 per hour 4.5%4.2%Fee increase from $112.00 per hour to $117.00 per hour for Residents and from $168.00 per hour to $175.00 per hour for Non-Residents to align with market value. Art Center - Studio A $37.00 per hour $56.00 per hour $39.00 per hour $59.00 per hour 5.4%5.4%Fee increase from $37.00 per hour to $39.00 per hour for Residents and from $56.00 to $59.00 per hour for Non-Residents to align with market value. Art Center - Studio B $37.00 per hour $56.00 per hour $39.00 per hour $59.00 per hour 5.4%5.4%Fee increase from $37.00 per hour to $39.00 per hour for Residents and from $56.00 to $59.00 per hour for Non-Residents to align with market value. Arts Activities - Drop-in Activities $4.00 - $54.00 per person $4.00 - $54.00 per person $4.00 - $100.00 per person $4.00 - $100.00 per person 85.2%85.2% Fee range increase from $4.00 - $54.00 per person to $4.00 - $100.00 per person to expand the range to charge quarterly for ceramic lab fees which used to be paid on a hourly basis. Foothills Park - A. Oak Grove Picnic 1 - 50 People $80.00 per group Not Available $75.00 per group Not Available -6.3%N/A Fee decrease from $80.00 per group to $75.00 per group for Residents to align with market value. Foothills Park - B. Oak Grove Picnic 51 - 100 People $135.00 per group Not Available $149.00 per group Not Available 10.4%N/A Fee increase from $135.00 per group to $149.00 per group for Residents to align with market value. Foothills Park - C. Oak Grove Picnic 101 - 150 People $180.00 per group Not Available $205.00 per group Not Available 13.9%N/A Fee increase from $180.00 per group to $205.00 per group for Residents to align with market value. General - Alma Plaza Community Room $110.00 per hour $165.00 per hour $115.00 per hour $173.00 per hour 4.5%4.8%Fee increase from $110.00 per hour to $115.00 per hour for Residents and from $165.00 to $173.00 per hour for Non-Residents to align with market value. General - Arastradero Gateway Educational Facility $83.00 per hour Not Available $87.00 per hour Not Available 4.8%N/A Fee increase from $83.00 per hour to $87.00 per hour for Residents to align with market value. General - Baylands Nature Interpretive Center Meeting Room $83.00 per hour $94.00 per hour $87.00 per hour $131.00 per hour 4.8%39.4%Fee increase from $83.00 per hour to $87.00 per hour for Residents and from $94.00 to $131.00 per hour for Non-Residents to align with market value. General - Chairs - Metal Folding $1.00 per chair $1.50 per chair $1.50 per chair $2.25 per chair 50.0%46.7%Fee increase from $1.00 per chair to $1.50 per chair for Residents and $1.50 per chair to $2.25 per chair to align with market value. 2016 Adopted 2017 Proposed % Change CMR #6932: ATTACHMENT A, EXHIBIT 3 Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Community Services Department Fee Title Justification Residents Non-Residents Residents Non-Residents Residents Non-Residents General - Lawn Bowling Green's Kitchen and Meeting Facility $110.00 per hour $165.00 per hour $115.00 per hour $173.00 per hour 4.5%4.8%Fee increase from $110.00 per hour to $115.00 per hour for Residents and from $165.00 to $173.00 per hour for Non-Residents to align with market value. General - Peers Park, Mitchell Park Field House $22.00 per hour Not Available $23.00 per hour Not Available 4.5%N/A Fee increase from $22.00 per hour to $23.00 per hour for Residents to align with market value. General - Picnic Reservations - Arbor Group Site $43.00 per group Not Available $45.00 per group Not Available 4.7%N/A Fee increase from $43.00 per hour to $45.00 per hour for Residents to align with market value. General - Picnic Reservations - East Meadow Group Site $65.00 per group Not Available $69.00 per group Not Available 6.2%N/A Fee increase from $65.00 per hour to $69.00 per hour for Residents to align with market value. General - Picnic Reservations - Pine Grove Group Site $119.00 per group Not Available $125.00 per group Not Available 5.0%N/A Fee increase from $119.00 per hour to $125.00 per hour for Residents to align with market value. General - Picnic Reservations - Redwood Group Site $97.00 per group Not Available $101.00 per group Not Available 4.1%N/A Fee increase from $97.00 per hour to $101.00 per hour for Residents to align with market value. General - Picnic Reservations - Sequoia Group Site $54.00 per group Not Available $57.00 per group Not Available 5.6%N/A Fee increase from $54.00 per hour to $57.00 per hour for Residents to align with market value. General - Picnic Reservations (1 - 15 people)$15.00 per group $19.00 per group $17.00 per group $21.00 per group 13.3%10.5%Fee increase from $15.00 per hour to $17.00 per hour for Residents and from $19.00 to $21.00 per hour for Non-Residents to align with market value. General - Portable Public Address System $12.00 per use $18.00 per use $15.00 per use $21.00 per use 25.0%16.7%Fee increase from $12.00 per use to $15.00 per use for Residents and from $18.00 per use to $21.00 per use for Non-Residents to align with market value. General - Tables - 6' Round $6.00 per table $9.00 per table $9.00 per table $11.00 per table 50.0%22.2%Fee increase from $6.00 per table to $9.00 per table for Residents and $9.00 per table to $11.00 per table to align with market value. Junior Museum & Zoo - JMZ - Group Admission $55.00-$135.00 per group Fee plus up to 50%$5.00 per child $5.00 per child N/A N/A Changing the fee structure from a group rate to an individual child rate to align with how we charge the fee. Junior Museum & Zoo - JMZ - Science Child and Family Programs $57.00-$1,120 per unit Fee plus up to 50%$28.00 - $379.00 per program Fee plus up to 50%N/A N/A Changing the fee structure from unit based to individual program based to align with how customer purchase programs. Junior Museum & Zoo - JMZ - Science School and Group Programs $1,120.00- $56,021.00 per program Fee plus up to 50%$129.00 - $340.00 per program Fee plus up to 50%N/A N/A Changing the fee structure from a unit to per program basis since most schools purchase individual programs. Junior Museum & Zoo - Exhibit Hall $216.00 per hour $324.00 per hour $227.00 per hour $341.00 per hour 5.1%5.2%Fee increase from $216.00 per hour to $227.00 per hour for Residents and from $324.00 to $341.00 per hour for Non-Residents to align with market value. Junior Museum & Zoo - Other Rooms $60.00 per hour $90.00 per hour $63.00 per hour $95.00 per hour 5.0%5.6%Fee increase from $60.00 per hour to $63.00 per hour for Residents and from $90.00 to $95.00 per hour for Non-Residents to align with market value. Junior Museum & Zoo - Package Rental - All Available Space $540.00 per hour $810 per hour $567.00 per hour $851.00 per hour 5.0%5.1%Fee increase from $540.00 per hour to $567.00 per hour for Residents and from $810.00 to $851.00 per hour for Non-Residents to align with market value. Junior Museum & Zoo - Science Lab 1 $92.00 per hour $138.00 per hour $97.00 per hour $145.00 per hour 5.4%5.1%Fee increase from $92.00 per hour to $97.00 per hour for Residents and from $138.00 to $145.00 per hour for Non-Residents to align with market value. 2016 Adopted 2017 Proposed % Change Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Community Services Department Fee Title Justification Residents Non-Residents Residents Non-Residents Residents Non-Residents Junior Museum & Zoo - Science Lab 2 $60.00 per hour $90.00 per hour $63.00 per hour $95.00 per hour 5.0%5.6%Fee increase from $60.00 per hour to $63.00 per hour for Residents and from $90.00 to $95.00 per hour for Non-Residents to align with market value. Junior Museum & Zoo - Zoo $216.00 per hour $324.00 per hour $227.00 per hour $341.00 per hour 5.1%5.2%Fee increase from $216.00 per hour to $227.00 per hour for Residents and from $324.00 to $341.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Ballroom (Room S)$167.00 per hour $249.00 per hour $175.00 per hour $263.00 per hour 4.8%5.6%Fee increase from $167.00 per hour to $175.00 per hour for Residents and from $249.00 to $263.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Community Room (Room R)$125.00 per hour $185.00 per hour $131.00 per hour $197.00 per hour 4.8%6.5%Fee increase from $125.00 per hour to $131.00 per hour for Residents and from $185.00 to $197.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Fireside Room (Room D)$95.00 per hour $145.00 per hour $99.00 per hour $149.00 per hour 4.2%2.8%Fee increase from $95.00 per hour to $99.00 per hour for Residents and from $145.00 to $149.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Kitchen $35.00 per hour $55.00 per hour $37.00 per hour $55.00 per hour 5.7%0.0%Fee increase from $35.00 per hour to $37.00 per hour for Residents to align with market value. Lucie Stern Community Center - Package Rental - Community Room $149.00 per hour $229.00 per hour $157.00 per hour $235.00 per hour 5.4%2.6%Fee increase from $149.00 per hour to $157.00 per hour for Residents and from $229.00 to $235.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Package Rental - Exclusive Use $330.00 per hour $495.00 per hour $347.00 per hour $521.00 per hour 5.2%5.3%Fee increase from $330.00 per hour to $347.00 per hour for Residents and from $495.00 to $521.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Package Rental - Fireside Room $129.00 per hour $189.00 per hour $135.00 per hour $203.00 per hour 4.7%7.4%Fee increase from $129.00 per hour to $135.00 per hour for Residents and from $189.00 to $203.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Package Rental - Weddings (Saturday and Sunday) Note: Includes facility attendant $360.00 per hour $545.00 per hour $379.00 per hour $569.00 per hour 5.3%4.4%Fee increase from $360.00 per hour to $379.00 per hour for Residents and from $545.00 to $569.00 per hour for Non-Residents to align with market value. Lucie Stern Community Center - Patio $90.00 per hour $135.00 per hour $95.00 per hour $143.00 per hour 5.6%5.9%Fee increase from $90.00 per hour to $95.00 per hour for Residents and from $135.00 to $143.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Adobe North Tech Lab $104.00 per hour $156.00 per hour $109.00 per hour $163.00 per hour 4.8%4.5%Fee increase from $104.00 per hour to $109.00 per hour for Residents and from $156.00 to $163.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Adobe South or Matadero Room $82.00 per hour $123.00 per hour $87.00 per hour $131.00 per hour 6.1%6.5%Fee increase from $82.00 per hour to $87.00 per hour for Residents and from $123.00 to $131.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - El Palo Alto East or West Only $104.00 per hour $156.00 per hour $109.00 per hour $163.00 per hour 4.8%4.5%Fee increase from $104.00 per hour to $109.00 per hour for Residents and from $156.00 to $163.00per hour for Non-Residents to align with market value. Mitchell Park Community Center - El Palo Alto Room (Ballroom)$208.00 per hour $312.00 per hour $219.00 per hour $329.00 per hour 5.3%5.4%Fee increase from $208.00 per hour to $219.00 per hour for Residents and from $312.00 to $329.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Kitchen $60.00 per hour $90.00 per hour $63.00 per hour $95.00 per hour 5.0%5.6%Fee increase from $60.00 per hour to $63.00 per hour for Residents and from $90.00 to $95.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Package Rental - Adobe North $177.00 per hour $265.00 per hour $185.00 per hour $277.00 per hour 4.5%4.5%Fee increase from $177.00 per hour to $185.00 per hour for Residents and from $265.00 to $277.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Package Rental - Birthday Package Note: Includes game room, basketball court, and party host. $208.00 per hour $312.00 per hour $219.00 per hour $329.00 per hour 5.3%5.4%Fee increase from $208.00 per hour to $219.00 per hour for Residents and from $312.00 to $329.00 per hour for Non-Residents to align with market value. 2016 Adopted 2017 Proposed % Change Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Community Services Department Fee Title Justification Residents Non-Residents Residents Non-Residents Residents Non-Residents Mitchell Park Community Center - Package Rental - El Palo Alto $254.00 per hour $381.00 per hour $267.00 per hour $401.00 per hour 5.1%5.2%Fee increase from $254.00 per hour to $267.00 per hour for Residents and from $381.00 to $401.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Package Rental - Exclusive Use Note: Includes facility attendant. $473.00 per hour $709.00 per hour $497.00 per hour $745.00 per hour 5.1%5.1%Fee increase from $473.00 per hour to $497.00 per hour for Residents and from $709.00 to $745.00 per hour for Non-Residents to align with market value. Mitchell Park Community Center - Package Rental - Weddings (Saturday and Sunday) Note: Includes facility attendant. $498.00 per hour $747.00 per hour $523.00 per hour $785.00 per hour 5.0%5.1%Fee increase from $498.00 per hour to $523.00 per hour for Residents and from $747.00 to $785.00 per hour for Non-Residents to align with market value. Fee Title Justification Basic Rate Non-Profit Rate Basic Rate Non-Profit Rate Basic Rate Non-Profit Rate Cubberley Community Center - K. Additional Performance $355.00 each $249.00 each $350.00 each $245.00 each -1.4%-1.6% Fee decrease from $355.00 each to $350.00 each for the basic rate and $249.00 each to $245.00 each for the Non-Profit Rate as we are splitting the difference between the additional package fee and the basic add on fee. Fee Title Justification Regular Time Overtime & Holiday Regular Time Overtime & Holiday Regular Time Overtime & Holiday Cubberley Community Center - Theatre Technician $34.00 per hour $51.00 per hour $35.00 per hour $53.00 per hour 2.9%3.9%Fee increase from $34.00 per hour to $35.00 per hour for Regular Time and from $51.00 per hour to $53.00 per hour for Overtime and Holiday Pay for staffing cost increase. General - Custodial Services $33.00 per hour $50.00 per hour $35.00 per hour $53.00 per hour 6.1%6.0% Fee increase from $33.00 per hour to $35.00 per hour for Regular Hours and $50.00 per hour to $53.00 per hour for Overtime & Holiday Hours to align with market value and increase personal cost. General - Facility Attendant and/or Assistant $31.00 per hour $47.00 per hour $33.00 per hour $49.00 per hour 6.5%4.3% Fee increase from $31.00 per hour to $33.00 per hour for Regular Hours and $47.00 per hour to $49.00 per hour for Overtime & Holiday Hours to align with market value and increase personal cost. General - Lifeguard $21.00 per hour $32.00 per hour $23.00 per hour $35.00 per hour 9.5%9.4% Fee increase from $21.00 per hour to $23.00 per hour for Regular Hours and $32.00 per hour to $35.00 per hour for Overtime & Holiday Hours to align with market value and increase personal cost. General - Palo Alto Junior Museum & Zoo Attendant $29.00 per hour $44.00 per hour $31.00 per hour $47.00 per hour 6.9%6.8% Fee increase from $29.00 per hour to $31.00 per hour for Regular Hours and $44.00 per hour to $47.00 per hour for Overtime & Holiday Hours to align with market value and increase personal cost. General - Park Ranger $61.00 per hour Not Available $75.00 per hour Not Available 23.0%N/A Fee increase from $61.00 per hour to $75.00 per hour for Residents to align with market value and increase personal cost. Fee Title Justification Cubberley Community Center - Exclusive Storage Space (As Available) Fee increase from $1.00 per sq. ft. per month to $1.50 per sq. ft. per month to align with market value. Golf - C. Large Bucket Changes range from $10.00 - $14.00 to $10.00 - $12.00 as the large and jumbo bucket fees we reversed. Golf - D. Jumbo Bucket Changes range from $10.00 - $12.00 to $10.00 - $14.00 as the large and jumbo bucket fees we reversed. Park Activities - Open Space & Parks Special Use Permit Changing fee range from $324.00 - $2,163.00 to $300.00 - $2,163.00 to accommodate smaller group, 1-150 people, Special Use Permits that occur on the fields/grass areas. 50.0%$1.50 per sq. ft. per month$1.00 per sq. ft. per month $10.00 - $14.00 per bucket $10.00 - $12.00 per bucket $324.00 - $2,163.00 each $300.00 - $2,163.00 each 2016 Adopted 2017 Proposed 2016 Adopted 2017 Proposed 2016 Adopted 2017 Proposed % Change % Change % Change 16.7% -14.3%$10.00 - $12.00 per bucket $10.00 - $14.00 per bucket -7.4% 2016 Adopted 2017 Proposed % Change Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Development Services - Public Works Division Fee Title Justification Director's Approval - Protected Tree Removal Fee increased from $280.00 to $353.00 per removal to meet Council Cost-recovery directive Engineering - A. 101 - 1,000 cubic yards Base fee reduced from $148.00 to $139.00 for first 100 cubic yards to adjust for actual costs and meet Council cost-recovery directive Engineering - B. 1,001 - 10,000 cubic yards Base fee reduced from $1,480.00 to $1,390.00 for first 1,000 cubic yards to adjust for actual costs and meet Council cost-recovery directive Engineering - C. 10,000+ cubic yards Base fee reduced from $2,960.00 to $2,680.00 for first 10,000 cubic yards to adjust for actual costs and meet Council cost-recovery directive Inspection Fees - Tree Inspection for Private Development Fee changed from $243.00 for two inspections (1 each pre & post construction) to $210.00 per inspection to adjust for actual costs and meet Council cost-recovery directive Storm Water - Stormwater Treatment Feature Operations and Maintenance Inspection (Fmr. Storm Drain Inspection Fee) Fee increased from $436.00 to 551.00 per inspection to meet Council Cost-recovery directive, name changed from Storm Drain Inspection Fee to Stormwater Treatment Operations and Maintenance Inspection Storm Water - Storm Drain Plan Check Fee Fee increased from $476.00 per project to $595.00 per project. Staff proposes to increase the fee by 25% annually for six years until cost recovery is met. $436.00 per inspection (up to 4 hours) plus $82.00 per hour thereafter $551.00 per inspection (up to 4 hours) plus $82.00 per hour thereafter $280.00 plus applicable Other Application fees $243.00 per inspection $210.00 per inspection $353.00 plus applicable Other Application fees $1,480.00 for the first 1,000 cubic yards, plus $148.00 for each additional 1,000 cubic yards or fraction thereof $2,960 for the first 10,000 cubic yards, plus $148.00 for each additional 10,000 cubic yards or fraction thereof $1,390.00 for the first 1,000 cubic yards, plus $129.00 for each additional 1,000 cubic yards or fraction thereof $2,680.00 for the first 10,000 cubic yards, plus $517.00 for each additional 10,000 cubic yards or fraction thereof $595.00 per project 2016 Adopted 2017 Proposed -6.1% -6.1% -9.5% $148.00 for the first 100 cubic yards, plus $148.00 for each additional 100 cubic yards or fraction thereof $139.00 for the first 100 cubic yards, plus $139.00 for each additional 100 cubic yard or fraction thereof $476.00 per project % Change -13.6% 26.4% 25.0% 26.1% Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Public Works Department Fee Title Justification Encroachment Permit - Dumpster Container Fee increased from $168.00 each to $210.00 each to meet Council cost-recovery directive Encroachment Permit - Fence Fee increased from $191.00 to $1496.00 each to meet Council cost-recovery directive Encroachment Permit - Non- Residential Single-Day Fee increased from $236.00 to $862.00 per project to adjust for actual costs and meet Council cost-recovery directive Encroachment Permit - Non- Residential Long-Term (More than 5 days) Fee increased from $1,009.00 to $1,418.00 per project to adjust for actual costs and meet Council cost-recovery directive Encroachment Permit - Non- Residential Short-Term (Less than 5 days) Fee increased from $504.00 to $1,014.00 to adjust for actual costs and meet Council cost- recovery directive Encroachment Permit - Residential Fee increased from $501.00 each to $721.00 to adjust for actual costs and meet Council cost-recovery directive Inspection Fees - Off Hour Inspection Fee increased from $209.00 to $230.00 to meet Council Cost-recovery directive Operations - Tree Removal Fee increased from $100.00 to 112.00 to meet Council Cost-recovery directive Permit Fees - A. Construction in Public Right of Way ($1.00 - $5,999) Note: Including public or private subdivision streets Base fee increased from $285.00 to $503.00 to adjust for actual costs and meet Council cost-recovery directive Permit Fees - B. Construction in Public Right of Way ($6,000 - $25,999) Note: Including public or private subdivision streets Base fee increased from $285.00 to $503.00 to adjust for actual costs and meet Council cost-recovery directive Permit Fees - C. Construction in Public Right of Way ($26,000 - $100,999) Note: Including public or private subdivision streets Base fee increased from $912.00 to $1,743.00 to adjust for actual costs and meet Council cost-recovery directive Permit Fees - D. Construction in Public Right of Way ($101,000+) Note: Including public or private subdivision streets Base fee increased from $4,745.00 to $7,368.00 to adjust for actual costs and meet Council cost-recovery directive Permit Fees - E. Certificate of Compliance/Certificate of Correction/Map Amendment Note: Including public or private subdivision streets Fee increased from $3,290.00 to $4,216.00 to meet Council Cost-recovery directive Street Cut Fees - Pavement Condition - Excellent Fee increased from $18.00 to $22.00 to meet Council cost-recovery directive Street Cut Fees - Pavement Condition - Fair Fee increased from $10.00 to $13.00 to meet Council cost-recovery directive Street Cut Fees - Pavement Condition - Good Fee increased from $13.00 to $16.00 to meet Council cost-recovery directive Street Cut Fees - Pavement Condition - Poor Fee increased from $9.00 to $10.00 to meet Council cost-recovery directive Street Cut Fees - Service Lateral Connection Fee increased from $1113.00 to $1350.00 to meet Council cost-recovery directive $13.00 per square foot $9.00 per square foot $1,113 each $16.00 per square foot $13.00 per square foot $10.00 per square foot $1,350 each $168.00 each $191.00 each $236.00 each $1,009.00 each $504.00 each $10.00 per square foot $501.00 each $209.00 per hour $18.00 per square foot $285.00 per occurrence $285.00 + 3.9% of value greater than $6,000 $912.00 + 4.4% of value greater than $26,000.00 $4,745 + 3.0% of value greater than $100,000.00 $3,290.00 per occurrence $100.00 per inch of damage plus planting installation $22.00 per square foot $210.00 each 2017 Proposed 25.0% 683.2% $1,014.00 each 2016 Adopted $230.00 per hour $503.00 per occurrence $503.00 + 6.2% of value greater than $6,000 $1,743 + 7.5% of value greater than $26,000.00 $7,368 + 6.4% of value greater than $100,000.00 $4,216.00 per occurrence $112.00 per inch of damage plus planting installation % Change $1,496.00 each $862.00 each $1,418.00 each $721.00 each 22.2% 12.0% 30.0% 23.1% 11.1% 21.3% 265.3% 40.5% 28.1% 101.2% 43.9% 10.0% 76.5% 76.5% 91.1% 55.3% Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Public Works Department Fee Title Justification Storm Drain - Flood Zone Determination Letter Fee increased from $69.00 per letter to $106.00 per letter to meet Council cost-recovery directive Storm Drain - Temporary Discharge to Storm Drain from Construction Site Dewatering Fee increased from $167.00 per request to discharge to $2,903.00 per request to discharge to adjust for actual costs and meet Council cost-recovery directive. A new fee was added, as discussed in the body of the CMR, to separately cover the weekly cost of discharge. Storm Drain - Temporary Elevation Benchmarks Fee increased from $314.00 to $365.00 to meet Council cost-recovery directive Fee Title Justification Regular Time Overtime & Holiday Regular Time Overtime & Holiday Regular Time Overtime & Holiday Operations - Construction and Repair $107.00 per hour $161.00 per hour $125.00 per hour $185.00 per hour 16.8%14.9%Fee increased from $107.00 per hour to $125.00 per hour for regular time and $161.00 per hour to $185.00 per hour for overtime to meet Council cost-recovery directive Operations - Supervision $128.00 per hour $192.00 per hour $139.00 per hour $207.00 per hour 8.6%7.8%Fee increased from $128.00 per hour to $139.00 per hour for regular time and $192.00 per hour to $207.00 per hour for overtime to meet Council cost-recovery directive Operations - Sweeping Services $89.00 per hour $134.00 per hour $112.00 per hour $167.00 per hour 25.8%24.6%Fee increased from $89.00 per hour to $112.00 per hour for regular time and $134.00 per hour to $167.00 per hour for overtime to meet Council cost-recovery directive Operations - Traffic Control/Graffiti Services $87.00 per hour $131.00 per hour $91.00 per hour $137.00 per hour 4.6%4.6%Fee increased from $87.00 per hour to $91.00 per hour for regular time and $131.00 per hour to $137.00 per hour for overtime to meet Council cost-recovery directive Operations - Tree Services $103.00 per hour $155.00 per hour $117.00 per hour $137.00 per hour 13.6%-11.6%Fee increased from $103.00 per hour to $117.00 per hour for regular time and $155.00 per hour to $174.00 per hour for overtime to meet Council Cost-recovery directive Fee Title Justification Per load of 1,000 gal. or Less Each Additional 500 gal. Per load of 1,000 gal. or Less Each Additional 500 gal. Per load of 1,000 gal. or Less Each Additional 500 gal. Wastewater Treatment - Grease Waste Disposal $110.00 per load of 1,000 gal. or less $56.00 each Additional 500 gal. $121.00 per load of 1,000 gal. or less $61.60 each Additional 500 gal.10.0%8.9%Fee increased 10% to get closer to Council cost-recovery directive and lower subsidy from RWQCP partners Wastewater Treatment - Septic Tank Waste and Portable Toilet Pumping Disposal $67.00 per load of 1,000 gal. or less $31.00 each Additional 500 gal. $73.00 per Load of 1,000 gal. or less $34.00 each Additional 500 gal.9.0%9.7%Fee increased 10% to get closer to Council cost-recovery directive and lower subsidy from RWQCP partners 1638.3% 16.2% $167.00 per request to discharge plus $82.00 per month of discharge $314.00 per benchmark $2,903.00 per request to discharge $365.00 per benchmark 2016 Adopted 2017 Proposed 2016 Adopted 2017 Proposed % Change % Change % Change 53.6%$69.00 per letter $106.00 per letter 2016 Adopted 2017 Proposed Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Police Department Fee Title Justification Licenses - Massage Establishment - Renewal Staff time estimate increased to include inspection time. Fee adjusted to conform to cost recovery range. Licenses - Massage Establishment - Sole Proprietor (New) Staff time estimate increased to include inspection time. Fee adjusted to conform to cost recovery range. Licenses - Massage Establishment - Sole Proprietor (Renewal) Staff time estimate increased to include inspection time. Fee adjusted to conform to cost recovery range. Licenses - Massage Establishment - Non-Certified (New) Staff time estimate increased to include inspection time. Fee adjusted to conform to cost recovery range. Licenses - Massage Establishment - Non-Certified (Renewal) Staff time estimate increased to include inspection time. Fee adjusted to conform to cost recovery range. Licenses - Taxicab - Driver Note: Does not include DOJ Fingerprint and Rolling Processing Fee Unit of measure clarified that fee is charged $40 annually or up to $160 for a four year permit. Fee amount also adjusted to come into conformance with cost recovery range. Licenses - Taxicab - Master License (New) Previous staff cost estimate did not properly account for hearing officer, risk manager and city attorney time. Licenses - Taxicab - Transfer Fee Previous staff time calculation did not account for appointment related administrative tasks such as scheduling, filing, and recording permits. Fee amount adjusted to conform with cost recovery range. Licenses - Taxicab - Vehicle Inspection for Each Vehicle Previous fee calculation did not account for appointment related administrative tasks such as scheduling, filing, and recording new permit. Fee amount adjusted to conform with cost recovery range. Licenses - Secondhand Dealer - New The California Department of Justice has discontinued accepting new Secondhand Dealer/Pawnbroker License applications and has shifted this responsibility entirely to local law enforcement agencies. The local agency is required to accept and remit the license payment to the state after it has processed the application. Fee change reflects staff costs to process permit. Licenses - Secondhand Dealer - DOJ -New The California Department of Justice has discontinued accepting new Secondhand Dealer/Pawnbroker License applications and has shifted this responsibility entirely to local law enforcement agencies. The local agency is required to accept and remit the license payment to the state after it has processed the application. Fee reflects only California Department of Justice costs. Miscellaneous - Helicopter Landing Fee Staff time estimate increased to more accurately reflect time to review and process permit. False Alarm - Alarm Registration Fee - New Staff time estimate revised to include additional administrative time. False Alarm - Alarm Registration Fee - Renewal Staff time estimate revised to include additional administrative time. Special Fees - Subpoena Fee Fee updated to separate subpoena fee and offsite document recovery charge, which is now its own Fee as detailed in the body of the CMR. $100.00 per year $150.00 per year $150.00 per year $317.00 per year $100.00 per year $150.00 per year 2016 Adopted 2017 Proposed $100.00 per year $150.00 per year $150.00 per year $200.00 per year 50.0% 111.3% 50.0% 66.7% 63.6% 42.9% 76.5% 50.0% 33.3% $2,400 per year $50.00 each $60.00 per year % Change $25.00 each $18.00 each $24.00 per hour plus $12.00 per box offsite recovery $24.00 per year up to 4 years $40.00 per year up to 4 years 60.0% 122.2% 0.0% $50.00 per occurrence $40.00 each $40.00 each $24.00 per hour $300.00 per application $300.00 per application $1,467.00 per year $35.00 each $34.00 per year $25.00 per occurrence This fee was incorporated into the municipal fee schedule outside of the adopted budget process. This fee was incorporated into the municipal fee schedule outside of the adopted budget process. N/A N/A 100.0% Municipal Fee Schedule Amendments for FY 2017 - Changed Fees New Fees Department Justification Community Services New Cleaning Package for Facility Rental customers who do not wish to arrange Cleaning with an outside vendor. Basic Rate Non-Profit Rate N/A $40.00 per hour Resident Rate Non-Resident Rate $15.00 per hour $15.00 per hour Development Services - Public Works New Fee to comply with Municipal Regional Stormwater Permit requirement for sites >1 acre and/or high priority (hillside, near creek, prior violation). Planning and Community Environment New Fee to process refunds in instances where staff work has already commenced. Police The California Department of Justice has discontinued accepting new Secondhand Dealer/Pawnbroker License applications and has shifted this responsibility entirely to local law enforcement agencies. The local agency is required to accept and remit the license payment to the state after it has processed the application. Fee reflects only staff costs to process renewal permit. Police Fee for background checks for Federal Office of Personnel Management and Department of Defense. Police This was formerly included as part of the Subpoena fee, but has been separated into its own fee. Additionally, the cost of offsite document recovery increased from $12.00 per box to $30.00 per item. Public Works Fee created to capture actual costs related to Planning Arborist's review of IR plans . Public Works Fee created for non-residential long-term encroachments that occur in more than one month. Public Works Fee created to capture ongoing inspection and administration costs, meeting Council cost- recovery directive. Community Services Mitchell Park Community Center - Teen Center Adding a fee to be able to rent the Mitchell Park Teen Center to Non-Profits, Co- Sponsored Groups or PAUSD Groups. Community Services Cubberley Community Center - Running Track New fee to charge for the Cubberley Running Track as CSD receives requests to rent this space. Map/Plan Review Fees - IR Review Trees Encroachment - Additional Non-Residential Long-Term (More than 5 days) Storm Drain - Additional Temporary Discharge to Storm Drain from Construction Site Dewatering $217.00 per week for the duration of the dewatering activities $647.00 per application $500.00 per month Fee Title $5.00 per application $30.00 per item Mitchell Park - Cleaning Package (Add-on Only) Storm Water - Wet Season Construction Site Stormwater Inspection Individual Review - Individual Review Refund Processing Fee Note: Applies if staff work has commenced Licenses - Secondhand Dealer - Renewal Background Check - OPM/DOD Background Check Special Fees - Offsite Dcoument Recovery $75.00 per application $230.00 per month October through April 20% of Fee will be retained FY 2017 Proposed Fee $80.00 - $500.00 per event Municipal Fee Schedule Amendments for FY 2017 - Changed Fees Deleted Fees Department Fee Change Justification Resident Rate Non-Resident Rate $55.00 per hour $83.00 per hour Community Services $119.00 per hour $179.00 per hour Deleteing this fee since the Green Room was converted to offices and is no longer rentable. Community Services $5.00 - $16.00 per hour $7.50 - $24.00 per hour Deleting this fee since CSD no longer chargers per person, but rather rents by the hour for Tournament and League play. Community Services $5.00 per piece $7.50 per piece Deleting this fee since the equipment is no longer available. Basic Rate Non-Profit Rate $115.00 per hour $81.00 per hour Community Services $130.00 per hour $91.00 per hour Deleting fee to simplify the pricing structure to have one common set of add-on fees for all packages rather than add-ons for each individual package. Community Services $335.00 each $235.00 each Deleting fee to simplify the pricing structure to have one common set of add-on fees for all packages rather than add-ons for each individual package. Library Library discontinued coffee/tea self-service when Rinocanada Library reopened in 2015. Community Services Cubberly Community Center - Theater rentals - D. Additional Performance Hours beyond Four Hours per performance Deleting fee to simplify the pricing structure to have one common set of add-on fees for all packages rather than add-ons for each individual package. Community Services Art Center - Green Room Deleting fee since the Green Room was converted to offices and is no longer rentable. Cubberley Community Center - Theater Rentals - H. Additional Rehearsal Hours Past Ten Cubberley Community Center - Theater Rentals - B. Additional Performance Sales - Coffee/Tea - Self/Serve $2.00 per cup Fee Title FY 2016 Adopted Fee Art Center - Package Rental - Auditorium and Green Room Recreation Activities - Tennis Court Registrations for Tournaments and USTA League Play Cubberley Community Center - Gymanstics Equipment Attachment _ * NOT YET APPROVED * 6053774 Resolution No. _________ Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Rate Schedules EDF-1 (Dark Fiber Licensing Services) and EDF-2 (Dark Fiber Connection Fees) A. The City of Palo Alto administers three different fiber rates. Fiber Rate schedule EDF-1 applies to customers with fiber optic licenses that began prior to September 18, 2006, and is closed to new customers. Fiber rate schedule EDF-2 applies to customer engineering, construction and connection expenses. Fiber rate schedule EDF-3 applies to customers who obtained licenses since 2006. B. The original Council-approved Dark Fiber Licensing Agreement annually increases both the EDF-1 and EDF-2 rates by the Consumer Price Index for all Urban Consumers for the San Francisco-Oakland-San Jose Metropolitan Statistical Area (CPI). EDF-3 has no CPI adjustment factor. C. The last time Council adopted a resolution incorporating CPI-adjusted rates into the EDF-1 and EDF-2 rate schedules was June 15, 2015 [Resolution 9523]. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-1 (Dark Fiber Licensing Services) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-1, as amended, shall become effective July 1, 2016. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-2 (Dark Fiber Connection Fees) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-2, as amended, shall become effective July 1, 2016. SECTION 3. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 4. The Council finds that the adoption of this resolution increasing dark fiber rates by the Consumer Price Index to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: Attachment _ * NOT YET APPROVED * 6053774 AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services DARK FIBER LICENSING SERVICES UTILITY RATE SCHEDULE EDF-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-1-1 Effective 07-01-20165 dated 7-01-20154 Sheet No. EDF-1-1 A. APPLICABILITY: This rate schedule applies to customer accounts established prior to September 18, 2006, unless the customer elects to apply the EDF-3 rate to the entire customer account. This rate applies to Fiber Optic services from the City of Palo Alto Utilities (CPAU) pertaining to the City's network (Backbone and associated connections). B. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. C. FEES: 1. DARK FIBER BACKBONE LICENSE FEES: The values or ranges for each of these price components are shown below: (1) Fiber Price………………………………………………………………. $35645.325/FM/month (2) Quantity discount ……………………………………………………… $0 to $59.84/FM/month (3) Buffer tube discount……………………………………………………….. $0 to $59.84/FM/month (4) Route length discount…………………………………………………….. $0 to $77.80/FM/month (5) Ring topology discount………………………………………………………$0 to $23.94/FM/month (6) Length of term discount…………………………………………………… $0 to $46.80/FM/month Minimum Backbone License Fee ...................................................................................... $53822.392/month Project Minimum Backbone Fees apply to any project proposal signed after September 18, 2006 in which the project connects with the Backbone. Description for Discounts: Quantity discount: based on an array of discounts for quantities of fiber licensed on a specific path. Buffer tube discount: discount for numbers of full buffer tubes licensed on a specific path. Route length discount: based on the route length licensed on a specific project. Ring topology discount: The ring topology discount for customers contracting for complete rings. Term discount: based on an array of discounts for contracts greater than one and less than ten years. 2. DARK FIBER LATERAL CONNECTION FEES: Customer responsibilities and fees for drop and custom cable construction are described in the CPAU Rules and Regulations, Rate Schedule EDF-2, project proposals and other associated documents. In all cases, the Licensee shall pay an annual Drop/Custom Cable Management Fee based on the follow per foot fees: (1) Drop Cable Management Fees (for the first 12-Fibers) …………………………… $0.03-$0.07/ft/month (2) Custom Cable Management Fees (for the first 12-Fibers)……………………….. $0.343/ft/month (3) Fees for additional Drop or Custom Cable fibers (each additional set of 12-Fibers) $0.07/ft/month Minimum Drop or Custom Cable Management Fees ........................................................ $26658.029/month Minimum Drop Cable Management Fees apply to any project proposal signed after September 18, 2006. DARK FIBER LICENSING SERVICES UTILITY RATE SCHEDULE EDF-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-1-2 Effective 07-01-20165 dated 7-01-20154 Sheet No. EDF-1-2 3. EARLY TERMINATION FEES: If the Licensee chooses to terminate for convenience the License Agreement or the term of any project under the License Agreement, then the Licensee shall pay the applicable termination payment as specified in this schedule or in the License Agreement, as provided below. Unless otherwise provided in the License Agreement, the Licensee shall pay a termination fee in one of the following amounts, whichever is less:  Annual fee of the contract year that the Licensee chooses to terminates in full without term discounts, or  Remaining fees of the project term as indicated in the License Agreement. D. SPECIAL NOTES: 1. All fees must be paid to the City in accordance with the terms of the Dark Fiber License Agreement, the customer’s project proposals and all the applicable Utilities Rates, Rules, and Regulations. 2. All fees and minimum charges are subject to Consumer Price Index (CPI) adjustments, to be applied annually, except as defined by Section D.3 of this Rate Schedule. Discounts will not be modified by changes to CPI. 3. The CPI adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland-San Jose MSA, published by the U.S. Department of Labor, Bureau of Labor Statistics. The adjustment is calculated by dividing the most recent calendar year December CPI by the December CPI in the year rates last changed. In the event that the change between December CPI’s indicates an adjustment of less than 1% is required, a change to rate schedules may not be made for the upcoming year. Future rate changes will take the last year of change as the new base year for purposes of calculation. {End} DARK FIBER SERVICE CONNECTION FEES UTILITY RATE SCHEDULE EDF-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No EDF-2-1 Effective 7-01-20165 dated 7-01-20154 Sheet No. EDF-2-1 A. APPLICABILITY: This schedule applies to all connections, expansions, and upgrades to the City's Dark Fiber network (Backbone). B. TERRITORY: All territory within the incorporated limits of the City and land owned or leased by the City. C. FEES: 1. ADVANCE ENGINEERING FEES: Advance engineering (AER) fees must be paid to start the engineering process and are non-refundable. The fees will be credited against the estimated project cost prior to the collection of the project construction fees. (1) Commercial/Industrial AER minimum fee ..................................................................... $85125.00 (2) Special conditions (requiring expert assessment) ........................................................... By Estimate 2. ESTIMATED SERVICE CONNECTION AND RECONFIGURATION FEES All estimated service connection and reconfiguration fees must be paid prior to the scheduling of any construction or reconnections to the City's Dark Fiber network. (1) Service connection (Interconnection) fee ...................................................... By Estimate (2) Reconfiguration Fees ..................................................................................... By Estimate Labor rates are subject to change as stated in the Utility Rate Schedule C-1. D. NOTES: 1. The Customer is responsible for the installation and maintenance of all ducts and pathways from the facility to the property line in compliance with City of Palo Alto Utilities Rules and Regulations and contract agreements. 2. The City shall not be held liable for delays or interruptions in service, but will make reasonable efforts to provide timely continuous service. 3. All fees are subject to Consumer Price Index (CPI) adjustments, to be applied annually. The CPI adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland- San Jose MSA, published by the U.S. Department of Labor, Bureau of Labor Statistics. The adjustment is calculated by dividing the most recent calendar year December CPI by the December CPI in the year rates last changed. In the event that the change between December CPI’s indicates an adjustment of less than 1% is required, a change to rate schedules may not be made for the upcoming year. Future rate changes will take the last year of change as the new base year for purposes of calculation. {End} Attachment A NOT YET APPROVED 160330 jb 6053708 Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving the FY 2017 Electric Utility Financial Plan and Amending the Electric Utility Reserves Management Practices R E C I T A L S A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. C. The City intends to make changes to its Electric Utility Reserves Management Practices to amend the management practices of the Electric Utility’s Capital Improvement Program (CIP) Reserve. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the FY 2017 Electric Utility Financial Plan, including the amended Electric Utility Reserves Management Practices. These Reserves Management Practices replace the Reserves Management Practices previously approved for the Electric Utility as part of the FY 2016 Electric Utility Financial Plan (Resolution 9521). SECTION 2. The Council hereby approves the transfer of $5.6 million in FY 2016 from the Hydro Stabilization Reserve to the Supply Operations Reserve, $2.0 million in FY 2016 from the Supply Operations Reserve to the Distribution Operations Reserve, the transfer of $5.6 million in FY 2016 from the CIP Reserve to the Distribution Operations Reserve, the transfer of $5.4 million from the Supply Rate Stabilization Reserve to the Supply Operations Reserve in FY 2017, up to $9.0 million from the Hydroelectric Stabilization Reserve to the Supply Operations Reserve in FY 2017, and up to $4.5 million from the Supply Operations Reserve to the Distribution Operations Reserve in FY 2017, as described in the FY 2017 Electric Utility Financial Plan approved via this resolution. / / / / / / CMR #6932: ATTACHMENT C Attachment A NOT YET APPROVED 160330 jb 6053708 SECTION 3. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services FY 2017 ELECTRIC UTILITY FINANCIAL PLAN FY 2017 TO FY 2023 ATTACHMENT B 2 | P a g e FY 2017 ELECTRIC UTILITY FINANCIAL PLAN FY 2017 TO FY 2023 TABLE OF CONTENTS Section 1: Definitions and Abbreviations................................................................................ 4 Section 2: Executive Summary and Recommendations ........................................................... 5 Section 2A: Overview of Financial Position .................................................................................. 5 Section 2B: Summary of Proposed Actions .................................................................................. 6 Section 3: Detail of FY 2017 Rate and Reserves Proposals ....................................................... 7 Section 3A: Rate Design ............................................................................................................... 7 Section 3B: Current and Proposed Rates ..................................................................................... 7 Section 3C: Reserves Management Practices, Proposed Change ................................................ 7 Section 3D: Proposed Reserve Transfers ..................................................................................... 8 Section 4: Utility Overview .................................................................................................. 10 Section 4A: Electric Utility History ............................................................................................. 11 Section 4B: Customer Base ........................................................................................................ 13 Section 4C: Distribution System ................................................................................................. 13 Section 4D: Cost Structure and Revenue Sources ...................................................................... 14 Section 4E: Reserves Structure ................................................................................................... 15 Section 4F: Competitiveness ...................................................................................................... 16 Section 5: Utility Financial Projections ................................................................................. 18 Section 5A: Load Forecast .......................................................................................................... 18 Section 5B: FY 2009 to FY 2015 Cost and Revenue Trends ........................................................ 19 Section 5C: FY 2015 Results ....................................................................................................... 20 Section 5D: FY 2016 Projections ................................................................................................ 20 Section 5E: FY 2017 – FY 2023 Projections ................................................................................ 21 3 | P a g e Section 5F: Risk Assessment and Reserves Adequacy ............................................................... 23 Section 5G: Long-Term Outlook ................................................................................................. 27 Section 6: Details and Assumptions ..................................................................................... 30 Section 6A: Electricity Purchases ............................................................................................... 30 Section 6B: Operations .............................................................................................................. 32 Section 6C: Capital Improvement Program (CIP) ....................................................................... 33 Section 6D: Debt Service ............................................................................................................ 34 Section 6E: Equity Transfer ........................................................................................................ 35 Section 6F: Wholesale Revenues and Other Revenues .............................................................. 36 Section 6G: Sales Revenues ....................................................................................................... 36 Section 7: Communications Plan .......................................................................................... 37 Appendices ......................................................................................................................... 38 Appendix A: Electric Utility Financial Forecast Detail ................................................................ 39 Appendix B: Electric Utility Reserves Management Practices ................................................... 43 Appendix C: Description of Electric utility Operational Activities .............................................. 48 Appendix D: Samples of Recent Electric Utility Outreach Communications .............................. 49 4 | P a g e SECTION 1: DEFINITIONS AND ABBREVIATIONS CAISO California Independent System Operator CARB California Air Resources Board CIP Capital Improvement Program CPAU City of Palo Alto Utilities Department CPUC California Public Utilities Commission CVP Central Valley Project GWh a gigawatt-hour, equal to 1,000 MWh or 1,000,000 kWh. Commonly used for discussing total monthly or annual electric load for the entire city, or the monthly or annual output of an electric generator. kWh a kilowatt-hour, the standard unit of measurement for electricity sales to customers. kW a kilowatt, a unit of measurement used in reference a customer’s peak demand (the highest 15 minute average consumption level in a month), which is used for billing large and mid-size commercial customers. kV a kilovolt, one thousand volts, a unit of measurement of the voltage at which a section of the distribution system operates. The transmission system operates at 115-500 kV, and this is lowered to 60 kV in the subtransmission section of the Electric Utility’s distribution section, then 12 kV or 4 kV in the rest of the distribution system, and finally 120, 240, or 480 volts at the electric outlet. MWh a megawatt-hour, equal to 1,000 kWh. Commonly used for measuring wholesale electricity purchases. MW a megawatt, equal to 1,000 kW. Commonly used when discussing maximum electricity demand for all customers in aggregate. PG&E Pacific Gas and Electric REC Renewable Energy Certificate RPS Renewable Portfolio Standard Subtransmission System: The section of the Electric Utility’s distribution system that operates at 60 kV and which interfaces with PG&E’s transmission system. Transmission System: Sections of the electric grid that operate at high voltages, generally 115 kV or more. The voltage at the intersection of the Electric Utility’s distribution system and PG&E’s transmission system is 115 kV. The Electric Utility does not own or operate any transmission lines. UCC Utility Control Center SCADA Supervisory Control and Data Acquisition system, the system of sensors, communications, and monitoring stations that enables system operators to monitor and operate the system remotely. WAPA, or Western: Western Area Power Administration, the agency that markets power from CVP hydroelectric generators and other hydropower owned by the Bureau of Reclamation. 5 | P a g e SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS This document presents a Financial Plan for the City’s Electric Utility for the next seven fiscal years. This Financial Plan describes how revenues will cover the costs of operating the utility safely over that time while adequately investing for the future. It also addresses the financial risks facing the utility over the short term and long term, and includes measures to mitigate and manage those risks. SECTION 2A: OVERVIEW OF FINANCIAL POSITION The Electric Utility’s costs will increase substantially over the next few years, as shown in Table 1. Most of the increases are related to electric supply costs, which are increasing due to increased transmission costs and the cost of new renewable energy projects coming online. There are also inflationary increases in Operations costs, and some additional capital investment costs. Table 1: Electric Utility Expenses for FY 2015 to FY 2023 Expenses ($000) FY 2015 (actual) FY 2016 (est.) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Power Supply Purchases 80,022 75,705 86,378 88,524 89,131 90,304 89,637 88,543 89,919 Operations 47,611 52,170 52,923 53,922 54,579 55,277 56,076 56,898 58,696 Capital Projects 12,713 16,989 27,652 22,058 26,649 15,868 16,320 16,785 17,263 TOTAL 140,346 144,864 166,953 164,504 168,710 161,450 162,034 161,225 165,877 To cover these increases in costs, revenues (and therefore rates) need to increase over the next several years to balance costs and revenues, as shown in Table 2. The table also compares current rate projections to those projected in last year’s Financial Plan. The rate projections are higher this year than last year primarily due to the continued drought that has required additional electric supply purchases to replace hydroelectric supplies. Table 2: Projected Electric Rate Trajectory for FY 2017 to FY 2023 Projection FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Current 11% 10% 3% 0% 1% 0% 2% Last Year 6% 6% 1% 1% 0% 0% 2% Table 3 shows the projected reserve transfers over the forecast period. The Supply Rate Stabilization Reserve is projected to be drawn down entirely by the end of FY 2017. Funds are projected to be transferred from the Electric Special Projects (ESP) Reserve to the Operations Reserve to fund smart grid projects included in the long term CIP budget. Funds are projected to be drawn from the Hydro Stabilization Reserve in FY 2017 and FY 2018 due to lower than average hydroelectric generation, though this projection is subject to change with weather conditions. It should be noted that the smart grid costs included in the forecast are 6 | P a g e placeholders, as are the transfers from the ESP Reserve. Any transfers from the ESP Reserve require Council approval. Table 3: Reserves Transfers for FY 2016 to FY 2023 ($000) Reserve FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 to FY 2023 Supply Reserves Electric Special Projects (151) (333) (3,750) - Hydro Stabilization (5,600) (9,000) (2,400) - - Supply Rate Stabilization 9,000* (5,411) - - - Supply Operations 3,600 14,562 2,733 3,750 - Distribution Reserves Capital Improvement Program (5,600) Distribution Operations 7,700 - - - - * A $9 million transfer from the Supply Rate Stabilization Reserve to the Supply Operations Reserve was approved by Council when it adopted the FY 2016 Electric Utility Financial Plan SECTION 2B: SUMMARY OF PROPOSED ACTIONS Staff proposes the following actions for the Electric Utility in FY 2016: 1. Complete the proposed FY 2016 reserves transfers described Section 3D: Proposed Reserve Transfers. Staff proposes the following actions for the Electric Utility in FY 2017: 1. Complete the proposed FY 2017 reserves transfers described in Section 3D: Proposed Reserve Transfers. 2. Increase rates effective July 1, 2016 to generate an 11% increase in sales revenues. 3. Amend the Electric Utility Reserves Management Practices to modify the minimums and maximums for the CIP Reserve. Note that while the projected rate increases and reserves transfers in this FY 2017 Financial Plan are adequate to recover costs over the forecast period, the Supply Operations Reserves are projected to be as much as $3.9 million below the minimum Supply Operations Reserve level for FY 2017 through FY 2020. Staff still recommends proceeding with this plan for two reasons: first, due to the presence of a strong El Niño condition in the Pacific Ocean, there is a chance of high spring rains that may change this forecast, resulting in higher reserves, and second, the presence of the Electric Special Projects Reserve with a balance of $51 million means that a small temporary shortfall in the Supply Operations Reserve should not affect the Electric Utility’s financial health and bond ratings. In the event drought continues, staff will re- evaluate its projections for FY 2018 and may recommend additional rate increases or the adoption of a hydroelectric rate adjuster. 7 | P a g e SECTION 3: DETAIL OF FY 2017 RATE AND RESERVES PROPOSALS SECTION 3A: RATE DESIGN The Electric Utility’s current rate structure and methodology are consistent with the cost of service analysis (COSA) update in 2007 by Boris Metrics. Staff is completing a new COSA with revised rates to become effective July 1, 2016. The new COSA is based on design guidelines adopted by Council on September 15, 2015 (Staff Report 6061). SECTION 3B: CURRENT AND PROPOSED RATES The current rates were adopted on July 1, 2009, when CPAU increased electric rates by 10%. Table 4, below, summarizes the current rates for the four largest customer classes. The Electric Utility also has specialty rates for smaller groups of customers. These include variations on its primary rates, such as time of use rates, the PaloAltoGreen rates, and solar net metering. Another specialty rate is the E-18 municipal electric rate. Table 4: Current Electric Rates (Adopted July 1, 2009) Rate Component Units E-1 (Residential) E-2 (Small Commercial) E-4 (Medium Commercial) E-7 (Large Commercial) Demand (Summer) $/kW N/A N/A 20.54 18.97 Demand (Winter) $/kW N/A N/A 13.84 11.54 Energy (Summer) Tier 1 $/kWh 0.09524 0.14045 0.08171 0.07808 Tier 2 $/kWh 0.13020 N/A N/A N/A Tier 3 $/kWh 0.17399 N/A N/A N/A Energy (Winter) Tier 1 $/kWh Same as summer energy 0.12661 0.07318 0.07209 Tier 2 $/kWh N/A N/A N/A Tier 3 $/kWh N/A N/A N/A Tier amounts: Tier 1 kWh/day 0-10 N/A N/A N/A Tier 2 kWh/day 11-20 N/A N/A N/A Tier 3 kWh/day >20 N/A N/A N/A Staff proposes an 11% overall increase in revenue along with changes in rate design and changes in the allocation of costs between customer classes to ensure that the rates are based on the cost of service for each customer group. These proposals are detailed in the consultant report titled “City of Palo Alto Electric Cost of Service and Rate Study,” by EES Consulting (2016). SECTION 3C: RESERVES MANAGEMENT PRACTICES, PROPOSED CHANGE Staff proposes one change to the Electric Utility Reserves Management Practices (See Appendix B: Electric Utility Reserves Management Practices) in this Financial Plan. Staff recommends 8 | P a g e revising the CIP Reserve minimum to be 60 days of capital expenses, with a maximum of 120 days of expenses, which aligns with the Government Financial Officers of America rule of thumb for operating reserves and the minimum and maximum guidelines for the Distribution Operations Reserve. Staff recommends transferring $5.6 million from the CIP Reserve to the Distribution Operations Reserve. Also see Section 3D: Proposed Reserve Transfers. SECTION 3D: PROPOSED RESERVE TRANSFERS In the FY 2016 Electric Financial Plan Council approved a $9 million transfer from the Supply Rate Stabilization Reserve to the Supply Operations Reserve. Staff proposes the following additional transfers in FY 2016:  Transfer $5.6 million from the Hydroelectric Stabilization Reserve fund to the Supply Operations Reserve to cover additional costs associated with low hydroelectric generation due to the drought.  Transfer $2.0 million from the Supply Operations Reserve to the Distribution Operations Reserve to ensure reserve adequacy in the Distribution Operations Reserve.  Transfer $5.6 million from the CIP Reserve to the Distribution Operations Reserve as part of the change to Reserves Management Practices described above. For FY 2017, staff proposes the following transfers:  Transfer $5.4 million from the Supply Rate Stabilization Reserve to the Supply Operations Reserve. This transfer is to enable the City to spread necessary long term rate increases over multiple years to reduce the short-term impact on ratepayers.  Transfer up to $9.0 million from the Hydroelectric Stabilization Reserve to offset potential costs associated with low hydroelectric generation. Some or all of this transfer may be unnecessary if weather conditions change, but if drought continues, this transfer will enable the City to fund the associated additional energy costs.  Transfer up to $4.5 million from the Supply Operations Reserve to the Distribution Operations Reserve if necessary to ensure reserve adequacy in the Distribution Operations Reserve. The impact of these transfers on reserves levels can be seen in Figure 8 (for Supply Fund Reserves) and Figure 9 (for Distribution Fund Reserves) in Section 5E: FY 2017 – FY 2023 Projections. Table 5 shows the projected balance of each of the Electric Utility reserves for the period covered by this Financial Plan. The projected balances are also provided in. Appendix A: Electric Utility Financial Forecast Detail 9 | P a g e Table 5: End of Fiscal Year Electric Utility Reserve Balances for FY 2016 to FY 2023 Ending Reserve Balance ($000) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Reappropriations - - - - - - - - Commitments 3,102 3,102 3,102 3,102 3,102 3,102 3,102 3,102 Underground Loan 730 730 730 730 730 730 730 730 Public Benefits 2,574 2,700 2,790 2,799 2,717 2,545 2,434 2,374 Special Projects 51,838 51,535 51,383 51,050 47,300 47,300 47,300 47,300 Hydro Stabilization 17,000 11,400 2,400 0 0 0 0 0 Capital 0 2,864 2,864 2,864 2,864 2,864 2,864 2,864 Rate Stabilization 14,411 5,411 0 0 0 0 0 0 Operations 22,498 22,734 22,015 22,281 24,814 27,033 30,783 34,269 Unassigned 0 0 0 0 0 0 0 0 TOTAL 112,153 100,476 85,284 82,827 81,528 83,574 87,214 90,639 10 | P a g e SECTION 4: UTILITY OVERVIEW This section provides an overview of the utility and its operations. It is intended as general background information to help readers better understand the forecasts in Section 5: Utility Financial Projections and 11 | P a g e Section 6: Details and Assumptions. SECTION 4A: ELECTRIC UTILITY HISTORY On January 16, 1900, Palo Alto began operating its own electric system. One of the earliest sources of Palo Alto's electricity was a steam engine, which was later replaced by a diesel engine in 1914 due to rising fuel oil costs. As the population and the demand for electricity continued to grow, CPAU connected to PG&E’s system in the early 1920s. Power from PG&E proved more economical than the diesel engines, and by the late 1920s CPAU was using its own diesel engines only during peak demand periods. At that time CPAU owned 45 miles of distribution lines and the City used 9.7 GWh annually, less than 1% of today’s annual consumption. The diesel engines remained in operation until 1948, when they were retired. From 1950 to 1970 electric consumption in Palo Alto grew dramatically, just as it did throughout the rest of the country. In 1970 total annual sales were 602 GWh, twenty times the sales in 1950 (30 GWh). Some of that growth was related to a development boom in Palo Alto, which doubled the number of customers. Some was related to the proliferation of electric appliances, as evidenced by the fact that residential customers were using three times more electricity in 1970 than they had been in 1950. But the most notable factor was the growth of industry in Palo Alto during that time. By 1970, commercial customers were using 20 times more electricity per customer than they had been in 1950. These decades also saw several other notable events, including:  1964: CPAU entered into a favorably priced 40-year contract with the Federal Bureau of Reclamation to purchase power from the Central Valley Project (CVP), a contract which later was managed by the Western Area Power Administration (WAPA) an office of the Department of Energy created in the 1970s to market power from various hydroelectric projects operated by the Federal Government, including the CVP.  1965: The City began a long-term program to underground its overhead utility lines (Ordinance 2231).  1968: Palo Alto joined several other small municipal utilities to form the Northern California Power Agency (NCPA), a joint action agency intended to make the group less vulnerable to actions by private utilities and to enable investment in energy supply projects. Palo Alto’s first new power plant investment in over 50 years came in the mid-80s. Palo Alto joined other NCPA members to invest in the construction and operation of the Calaveras Hydroelectric Project on the Stanislaus River in the Sierra-Nevada Mountains. The project commenced operation in 1990. The 1980s also saw an increased focus on infrastructure maintenance. In 1987 the UCC was built to house the terminals for a new SCADA system, which enabled utility staff to monitor the distribution system in real time, improving response time to outages. CPAU also commenced a preventative maintenance and planned replacement program for its underground system in the early 1990s. 12 | P a g e In the early 1990s the CPUC issued a ruling to deregulate the electric industry in California, and in 1996 the State legislature passed Assembly Bill 1890, which, among other things, created the California Independent System Operator (CAISO) to operate the transmission system and the Power Exchange to facilitate wholesale energy transactions. This restructuring was anticipated to bring lower costs to consumers, and while CPAU was not required to participate in the industry restructuring, in 1997 the Council approved a Direct Access Program for the Electric Utility1 that enabled CPAU to sell electricity outside its service territory and allowed customers within CPAU’s service territory to choose other providers. The utility unbundled its electric rates, creating separate supply and distribution components, which would enable customers to receive only distribution service while purchasing the electricity itself from another provider. The energy crisis in 2000 to 2001 led to the suspension of direct access by the CPUC in September 2001 as wholesale energy prices skyrocketed. The Electric Utility was less impacted than other utilities by the 2000 to 2001 energy crisis thanks to the Calaveras project and its contract with WAPA for CVP hydropower. In 2001 CPAU began planning for the impacts associated with the new terms of its contract with WAPA, set to take effect in 2005. The previous contract had provided 90% of Palo Alto’s power supply at favorable rates, and PG&E, as a party to the contract, had provided supplemental power to balance the monthly and annual variability of CVP generation. The new contract would provide only a third of Palo Alto’s requirement, and the monthly and annual variability in CVP generation would be passed directly to Palo Alto. As a result, electric supply costs would increase and CPAU needed to more actively managing its supply portfolio. CPAU began purchasing power from marketers and also investigated building a power plant in Palo Alto or partnering in the development of a gas-fired power plant elsewhere. Climate change was also becoming more of a concern to the community, and gradually CPAU shifted its focus to the procurement of renewable energy. In 2002 CPAU adopted a goal of achieving 20% of its energy supply from renewables by 2015. Subsequently CPAU signed its first contract for renewable power, a contract for energy from a wind generator commencing deliveries in 2005. In 2011 the renewable energy goal was increased to at least 33% by 2015, and in 2013 the City adopted a plan to make its electric supply 100% carbon neutral, which it achieves through the combination of its carbon-free hydroelectric supplies, purchases of long-term renewable energy supplies, and short-term renewable energy purchases (RECs) to meet the balance of its needs. 1 Implementation of Direct Access for Electric Utility Customers, CMR:460:97, December 1, 1997 13 | P a g e Figure 1: Customer Base (FY 2015) Residential 16% Small Comm 8% Med Comm 32% Large Comm 41% Municipal 3% SECTION 4B: CUSTOMER BASE The City of Palo Alto’s Electric Utility provides electric service to the residents, businesses, and other electric customers in Palo Alto. There are roughly 29,300 customers connected to the electric system, 26,400 (90%) of which are residential and 2900 (10%) of which are non- residential. Residential customers consumed 173 gigawatt-hours (GWh) in FY 2015, approximately 18% of the electricity sold, while non-residential customers consumed 82% or 763 GWh. Residential customers use electricity primarily for lighting, refrigeration, electronics, and air conditioning.2 Non-residential customers use the majority of their electricity for cooling, ventilation, lighting, office equipment (offices), cooking (restaurants), and refrigeration (grocery stores).3 As shown in Figure 1 large customer loads represent a larger proportion of sales for the Electric Utility than they do for the City’s other utilities. The largest customers (the 66 customers on the E-7 rate schedule) account for over 40% of CPAU’s sales. The next largest customer group (the 740 commercial customers on the E-4 rate schedule) represents another 32% of sales. In total, that means that less than 3% of customers account for nearly three quarters of the electric load. SECTION 4C: DISTRIBUTION SYSTEM The Electric Utility receives electricity at a single connection point with PG&E’s transmission system. From there the electricity is delivered to customers through nearly 470 miles of distribution lines, of which 223 miles (48%) are overhead lines and 245 miles (52%) are underground. The Electric Utility also maintains six substations, roughly 2,000 overhead line transformers, 1,075 underground and substation transformers, and the associated electric services (which connect the distribution lines to the customers’ homes and businesses). These lines, substations, transformers, and services, along with their associated poles, meters, and 2 Source: Residential Appliance Saturation Survey, California Energy Commission, 2010 3 Source: Statewide Commercial End Use Study, California Energy Commission report, 2006. 14 | P a g e Figure 2: Cost Structure (FY 2015) Figure 3: Hydroelectric Variability (FY 2016) 0% 20% 40% 60% 80% 100% 120% 140% Low Hydro Average High Hydro Surplus Hydro (sales) Market Power/RECs Hydro Renewables Load Figure 4: Revenue Structure (FY 2015) other associated electric equipment, represent the vast majority of the infrastructure used to deliver electricity in Palo Alto. SECTION 4D: COST STRUCTURE AND REVENUE SOURCES As shown in Figure 2, electric commodity purchases accounted for roughly 55% of the Electric Utility’s costs in FY 2015. Operational costs represented roughly 31%, and capital investment was responsible for the remaining 10%. CPAU’s non-hydro long-term commodity supply is heavily dependent on long-term contracts which have little variability in price. On average, costs for these long-term contracts are not predicted to increase as quickly as operations and CIP costs, and will steadily become a smaller proportion of the Electric Utility’s costs. Commodity supply costs are projected to be roughly 47% of total costs in FY 2023. While average year purchase costs for the electric utility are predictable due to its long- term contracts, variability in hydroelectric generation can result in increased or decreased costs. This is by far the largest source of variability the utility faces. Figure 3 shows the difference in costs under high, average, and low hydroelectric generation scenarios. Additional costs associated with a very low generation scenario can range from $10-12 million per year. For the current hydroelectric risk assessment see Section 5F: Risk Assessment and Reserves Adequacy. As shown in Figure 4 the Electric Utility receives 87% of its revenue from sales of electricity and the remainder from connection fees, interest on reserves, cost recovery transfers from other funds for shared services provided by the electric utility, and other sources. Some revenue sources are primarily accounting entries that reflect things such as CPAU’s participation in a pre-funding program associated with its contract with WAPA, as well 15 | P a g e as accounting entries associated with occasional sales of surplus hydroelectric energy during wet years. Without these entries sales revenues represent roughly 93% of total revenues. Appendix A: Electric Utility Financial Forecast Detail shows more detail on the utility’s cost and revenue structures. As discussed in Section 4B: Customer Base, nearly three quarters of the utility’s electricity sales are to the 800 largest customers, which provide a similar share of the utility’s revenue stream. The utility’s retail rate schedules have no fixed charges, although about 25% of the utility’s revenue comes from peak demand charges on large commercial customers. Due to moderate weather and the prevalence of natural gas heating, however, loads (and therefore revenues) are very stable for this utility, without the large seasonal air conditioning or winter heating loads seen at some other utilities. SECTION 4E: RESERVES STRUCTURE CPAU maintains several reserves for its Electric Utility to manage various types of contingencies. It also maintains two funds, the Supply Fund and the Distribution Fund, to manage costs associated with electricity supply and electricity distribution, respectively. This separation of supply and distribution costs was established as the City prepared to allow its customers a choice of electricity providers (referred to as “Direct Access”) back in the late 1990s and early 2000s. Though the 2000/2001 energy crisis halted these plans, CPAU continues to maintain separate funds to facilitate separation of supply and distribution costs in the rates. This could be important in case California ever decides to reintroduce Direct Access, and may also be useful for rate design as the nature of utility services evolves in response to higher penetrations of distributed generation. The various reserves are summarized below, but see Appendix B: Electric Utility Reserves Management Practices for more detailed definitions and guidelines for reserve management:  Reserves for Commitments: Reserves equal to the utility’s outstanding contract liabilities for the current fiscal year. Most City funds, including the General Fund, have a Commitments Reserve.  Reserves for Reappropriations: Reserves for funds dedicated to projects reappropriated by the City Council, nearly all of which are capital projects. Most City funds, including the General Fund, have a Reappropriations Reserve. This is currently an important reserve for all utility funds, but changes in budgeting practices will change that in future years, as described in Section 3C (Reserves Management Practices, Proposed Change).  Electric Special Projects (ESP) Reserve: This reserve was formerly called the Calaveras Reserve, which was accumulated during deregulation of California’s electric system to fund the stranded costs associated primarily with the Calaveras hydroelectric resource and the California-Oregon Transmission Project. When that reserve was no longer needed for that purpose, the reserve was renamed and the purpose was changed to 16 | P a g e fund projects with significant impact that provide demonstrable value to electric ratepayers.  Hydroelectric Stabilization Reserve: This contingency reserve is used for managing additional costs due to below average hydroelectric generation, or to hold surpluses resulting from above average hydroelectric generation.  Underground Loan Reserve: This reserve is an accounting tool used to offset receivables associated with loans made through the underground loan program. It is adjusted according to principal payments made on those loans.  Public Benefits Reserve: CPAU’s electric rates include a separate charge called the “Public Benefits Charge” which generates revenue to be used for energy efficiency, demand-side renewable energy, research and development, and low-income energy efficiency services. Any funds not expended in the current year are added to the Public Benefits Reserve for use in future years.  Capital Improvement Program (CIP) Reserve: The CIP reserve is used to provide working capital and contingency funds for the CIP program, as well as to accumulate funds for major future one-time expenditures. This type of reserve is used in other utility funds (Electric, Gas, and Wastewater Collection) as well.  Supply and Distribution Rate Stabilization Reserves: These reserves are intended to be empty unless one or more large rate increases are anticipated in the forecast period. In that case, funds can be accumulated to spread the impact of those future rate increases across multiple years. This type of reserve is used in other utility funds (Gas, Wastewater Collection, and Water) as well.  Supply and Distribution Operations Reserves: These are the primary contingency reserves for the Electric Utility, and are used to manage yearly variances from budget for operational costs and electric supply costs (aside from variances related to hydroelectric generation). This type of reserve is used in other utility funds (Gas, Wastewater Collection, and Water) as well.  Unassigned Reserves (Supply/Distribution): As in the other utility funds, these reserves are for any financial resources not assigned to the other reserves and are normally empty. SECTION 4F: COMPETITIVENESS For the median consumption level the annual residential electric bill for calendar year 2015 was $513.17 under current CPAU rates, 36% lower than the annual bill for a PG&E customer with the same consumption and 9% lower than the annual bill for a City of Santa Clara customer. The bill calculations for PG&E customers are based on PG&E Climate Zone X, which includes most surrounding comparison communities. Table 6 presents sample median residential bills for Palo Alto, PG&E, and the City of Santa Clara (Silicon Valley Power) for several usage levels. Rates used to calculate the monthly bills shown below were in effect as of January 1, 2016. Note that rates for PG&E customers increased 17 | P a g e substantially on that date, and with rates currently in effect, the bill for the median residential user is roughly 45% below PG&E’s rates. Over the next several years low usage customers in PG&E territory are expected to continue to see higher percentage rate increases than high usage customers as PG&E compresses its tiers from the highly exaggerated levels that have been in place since the energy crisis. This is likely to make the bill for the median Palo Alto consumer look even more favorable compared to most PG&E customers. Even with the compressed tiers, bills for high usage Palo Alto consumers are likely to remain substantially lower than the bills for high usage PG&E customers. The bill calculations show bills under the existing rates, not the proposed July 1, 2016 rates. However, even with the proposed rate increases, Palo Alto’s residential bills will remain substantially below PG&E’s current rates, but slightly above Santa Clara’s. Table 6: Residential Monthly Electric Bill Comparison (Effective 1/1/16, $/mo) Season Usage (kwh) Palo Alto PG&E Santa Clara Winter (December) 300 28.57 54.45 34.16 (Median) 453 48.49 88.39 52.21 650 76.33 142.09 75.47 1200 172.03 333.61 140.38 Summer (July) 300 28.57 54.45 34.16 (Median) 330 32.48 62.05 36.65 650 76.33 148.02 75.47 1200 172.03 339.84 140.38 Table 7 shows the average monthly electric bill for commercial customers for various usage levels. Bills for small commercial customers in Palo Alto are 37% below what they would be in PG&E territory and 20% below what they would be in Santa Clara (Silicon Valley Power). For large commercial customers, rates are 30% to 35% below PG&E’s and are 4% to 10% lower than Santa Clara’s. Even with the proposed rate increases, Palo Alto’s commercial bills will remain substantially below PG&E’s, and below Santa Clara’s for most commercial customers. Table 7: Commercial Monthly Electric Bill Comparison (1/1/16, $/mo) Usage (kwh/mo) Palo Alto PG&E Santa Clara 1,000 134 212 167 160,000 18,364 27,221 19,228 500,000 43,319 66,152 47,913 2,000,000 216,594 311,640 234,322 18 | P a g e SECTION 5: UTILITY FINANCIAL PROJECTIONS SECTION 5A: LOAD FORECAST Figure 5 shows a 40-year history of Palo Alto electricity consumption. Average electricity consumption grew from 1986 to 1998, then returned to 1986 levels by 2002. Since then electricity consumption has declined slowly as a result of a continuing focus on energy efficiency, as well as the adoption of more stringent appliance efficiency standards and energy standards in building codes. Figure 5: Historical Electricity Consumption Figure 6 shows the forecast of electricity consumption through FY 2023, as well as what electricity consumption would have been without energy efficiency rebates, appliance efficiency standards, stricter building codes, and rooftop solar photovoltaic (PV) generation. The forecast assumes that current trends continue and sales through the forecast period decline slightly. As of the end of December 2015, net metered PV installations in Palo Alto provided roughly 1% of the total electricity consumed in the City. The Council-adopted Local Solar Plan’s goal is to increase the energy generated by local solar to 4% of the City’s needs by 2023. 19 | P a g e Figure 6: Forecasted Electricity Consumption SECTION 5B: FY 2009 TO FY 2015 COST AND REVENUE TRENDS The annual expenses for the Electric Utility declined between FY 2009 and FY 2012, as shown in Figure 7 and the tables in Appendix A: Electric Utility Financial Forecast Detail . These decreases were partly related to declines in electricity market prices due to the impact of shale gas and partly due to above average output from hydroelectric resources. These factors are discussed in more detail in Section 6A: Electricity Purchases. Since FY 2012, total expenses for the utility have been increasing as renewable resources come online. In FY 2014 through FY 2015 costs were higher due to lower than average output from hydroelectric resources. Commodity costs are responsible for most of the changes in the utility’s expenses over the last six years. Operational costs and capital investment increased at less than 1% per year over that time. 20 | P a g e Figure 7: Electric Utility Expenses, Revenues, and Rate Changes: Actual Costs through FY 2015 and Projections through FY 2023 SECTION 5C: FY 2015 RESULTS In spring of 2014 staff recommended no rate change for July 1, 2014, the start of FY 2015. Although staff forecast a $5.7 million deficit for FY 2015 without a rate change, reserves were adequate to absorb this deficit. However, drought conditions worsened in the spring of 2014 and continued through the winter of 2014/2015, resulting in a deficit of $17.0 million for FY 2015. The increased deficit was entirely related to the low output from hydroelectric resources, which necessitated electricity market purchases to replace the lower than expected hydroelectric energy. SECTION 5D: FY 2016 PROJECTIONS In spring of 2015, staff recommended (and Council approved) no rate change for July 1, 2015, the start of FY 2016. Based on hydroelectric conditions at the time, staff forecasted a $10.3 million deficit for FY 2016. This deficit was primarily related to low hydroelectric output, and was to be funded from the Operations and Hydroelectric Stabilization reserves. Staff’s current 21 | P a g e forecast for FY 2016 is for a deficit of $20.1 million, $9.8 million more than forecasted in spring of 2015. This change is mainly related to two factors: 1) capital improvement program costs have increased by roughly $7 million, and 2) energy costs have increased by roughly $3 million due to continuing drought and resulting low hydroelectric generation. The $7 million increase in CIP costs is largely related to the delay of projects from previous fiscal years to FY 2016 rather than mid-year adjustments requesting new funding. Staff proposes partially funding this portion of the deficit using a $5.6 million transfer from the CIP Reserve, which contains $8.4 million collected in previous fiscal years to fund capital projects. The additional $3 million related to energy costs would be funded from the Hydroelectric Stabilization Reserve. These transfers are discussed in Section 3D: Proposed Reserve Transfers. SECTION 5E: FY 2017 – FY 2023 PROJECTIONS As shown in Figure 7 above, costs for the Electric Utility are projected to increase in FY 2017 and level off in subsequent years. Revenues will have to increase 11% in FY 2017 and another 10% in FY 2018 to keep up with these cost increases. The increases are primarily related to electricity purchase costs, which have been increasing since FY 2013 and will continue to increase through FY 2018 as new renewable projects come online to fulfill the City’s environmental goals and as transmission costs increase. Operations costs are expected to increase substantially in FY 2017 to begin catching up on deferred maintenance, but subsequently are expected to increase at or below the inflation rate (2-3 %/year) through the forecast period. Projected capital expenses for FY 2017 through FY 2023 are $30 million higher than last year’s forecast due mostly to several large one-time projects, some customer driven, but also due to an increase in spending on system improvements. The increased costs are partially offset by $13.4 million in revenue from reimbursements associated with those projects. Aside from those one-time costs, capital expenses are projected to increase in FY 2017 and then stay roughly level through the forecast period. This forecast also assumes that smart grid costs are funded from the Electric Special Projects Reserves. Reserves trends based on these revenue projections are shown in Figure 8 (for Supply Fund reserves) and Figure 9 (for Distribution Fund reserves), below. The Supply Rate Stabilization Reserve is projected to be empty by the end of FY 2016. Assuming the projected increases in revenue, the Distribution Operations reserve will remain adequate through the forecast period, comfortably above minimum levels and adequate to meet all identified risks. The Supply Operations Reserve, however, is forecasted to be below minimum levels. This is discussed in more detail in Section 5F: Risk Assessment and Reserves Adequacy. With respect to the Hydro Stabilization Reserve, these projections assume average rainfall next winter, although hydro generation is still predicted to be below average due to low reservoir levels. The current forecast does not take into account potential rainfall associated with El Niño conditions in the spring of 2016, nor potential drought in the 2016/2017 year, which may follow the El Niño conditions of 2016. This scenario may help reserves, hurt reserves, or have little net effect depending on the associated rainfall levels. 22 | P a g e Figure 8: Electric Utility Reserves (Supply Fund): Actual Reserve Levels through FY 2015 and Projections through FY 2023 Figure 9: Electric Utility Reserves (Distribution Fund): Actual Reserve Levels through FY 2015 and Projections through FY 2023 23 | P a g e SECTION 5F: RISK ASSESSMENT AND RESERVES ADEQUACY The Electric Utility currently has two contingency reserves, the Supply Operations Reserve and the Distribution Operations Reserve. This Financial Plan maintains reserves in excess of the reserve minimum for the Distribution Operations Reserve throughout the forecast period. Reserve levels also exceed the short-term risk assessment level for the Distribution Fund. The Supply Operations Reserve, however, may end up below minimum levels and below the short- term risk assessment level. There are a variety of risks associated with the Supply Fund as are shown in Table 8. Because of the high range of uncertainty in energy price predictions more than three years in the future, this risk assessment is only performed for the first two fiscal years of the forecast period. It is important to note that the likelihood of all of these adverse scenarios occurring simultaneously and to the degree described in Table 8 is very low. Table 8: Electric Supply Fund Risk Assessment Categories of Electric Supply Cost Uncertainties Estimates of Adverse Outcomes (M$) Notes FY 2017 FY 2018 1. Load Net Revenue 1.2 1.3 Revenue loss from load decreases (net of reduction in energy purchases) 2. Production from Hydroelectric Resources: Western & Calaveras 3.4 2.4 Lower than forecasted hydro 3. Renewable Production: Landfill & Wind 0.5 2.1 Additional cost of renewable output that is higher than forecasted 4. Carbon Neutral Cost 0.1 - Higher than forecasted market prices for RECs 5. Market Price (Energy) 1.1 0.5 Higher than forecasted market prices for energy 6. Local Capacity 0.4 0.7 Higher than forecasted market prices for local capacity 7. Transmission/CAISO 2.8 3.0 High-end transmission forecast scenario 8. Plant Outage 1.0 1.0 Uninsured losses from Calaveras plant outage 9. Western Cost 3.0 3.5 Risk of rate adjustments from Western Electric Supply Fund Risks $13.6 million $14.3 million Projected Supply Operations + Hydro Stabilization Reserve Levels $16.4 million $12.8 million Of the risks faced by the Electric Utility’s Supply Fund in FY 2016, the risk of a dry year with very low hydroelectric output is normally the largest, accounting for nearly half the total cost of all adverse outcomes. Since the utility’s costs for its hydroelectric resources are almost entirely fixed, costs do not decline when the output of those resources are low, but the utility needs to buy power to replace the lost output. The converse happens when hydroelectric output is higher than average. However, for FY 2017 and FY 2018, lower than average hydroelectric output is already expected, so the adverse risk is smaller than usual. Risks associated with hydroelectric output account for $3.4 million (25%) of FY 2017 contingencies. 24 | P a g e Of the remaining risks for FY 2017, $2.8 million (20%) is related to the projected costs if transmission cost increases are higher than staff’s current forecast. Another $3.0 million (22%) is related to the possibility of drought-related changes to Western rates for CVP hydropower, and $1.1 million (8%) is related to fluctuations in market prices for capacity, energy, and RECs. As shown in Figure 10, the Supply Operations Reserve will drop below the minimum reserve guidelines by as much as $3.9 million over the course of the forecast period. In addition, as shown in Figure 11, the combined hydro stabilization and supply operations reserves will drop below the risk assessment level. It is acceptable under the Electric Utility Reserves Management Practices to drop below minimum reserve guidelines so long as Council approves the Financial Plan. Staff recommends proceeding with this plan for two reasons: first, due to the presence of a strong El Niño condition in the Pacific Ocean, there is a chance of high spring rains that may change this forecast, resulting in higher reserves, and second, the presence of the $51 million Electric Special Projects Reserve means that a small temporary shortfall in the Supply Operations Reserve should not affect the Electric Utility’s bond ratings. In the event drought continues, staff will re-evaluate its projections for FY 2018 and may recommend additional rate increases or the adoption of a hydroelectric rate adjuster. Figure 10: Electric Supply Operations Reserve Adequacy 25 | P a g e Figure 11: Adequacy of Supply Operations and Hydro Stabilization Reserves, Combined Table 9 summarizes the risk assessment calculation for the Distribution Operations Reserve through FY 2021. As shown in Figure 12, the Distribution Operations Reserve will stay within the reserve guidelines over the course of the forecast period. The risk assessment includes the revenue shortfall that could accrue due to: 1. Lower than forecasted sales revenue; and 2. An increase of 10% of planned system improvement CIP expenditures for the budget year. Table 9: Electric Distribution Fund Risk Assessment ($000) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total non-commodity revenue $49,651 $52,233 $52,275 $52,237 $53,804 Max. revenue variance, previous ten years 8% 8% 8% 8% 8% Risk of revenue loss $3,919 $4,122 $4,126 $4,123 $4,246 CIP Budget $27,652 $22,058 $26,649 $15,868 $16,320 CIP Contingency @10% $2,765 $2,206 $2,665 $1,587 $1,632 Total Risk Assessment value $6,684 $6,328 $6,791 $5,710 $5,879 26 | P a g e Figure 12: Electric Distribution Operations Reserve Adequacy As shown in Figure 13, the CIP Reserve is projected to be well within the proposed revised minimum and maximum guidelines over the forecast period. While the Reserve is above maximum levels in later years, CIP Commitments are nearly impossible to project that far out, and adjustments to the reserve can be made in future years. 27 | P a g e Figure 13: Electric Distribution Operations Reserve Adequacy SECTION 5G: LONG-TERM OUTLOOK This forecast covers the period from FY 2017 through FY 2023, but various long-term developments may create new costs for the utility over the next 5 to 35 years. While it is challenging to accurately forecast the impact these events will have on the utility’s costs, it is worth noting them as future milestones and keeping them in mind for long-term planning purposes. For the supply portfolio, the 2020s will see a number of notable events. The contract with Western for power from the CVP will expire in 2024. Determining the future relationship with Western after 2024 will be important in the years leading up to the contract expiration, especially because this resource represents nearly 40% of the electric portfolio, and is the utility’s largest source of carbon-free electricity. The utility’s three earliest and lowest cost renewable contracts will also begin expiring around that time, with the first contract expiring in 2021 and the last in 2028. These three contracts, plus one more expiring in 2030, currently provide 17% to 18% of the energy for the utility’s supply portfolio at prices under $65 per megawatt-hour (MWh). It is difficult to know what renewable energy prices will be when those 28 | P a g e contracts expire. Although recent prices have been in that range (or even lower), and costs may decrease in the future, current renewable projects also benefit from a wide range of tax and other incentives that may or may not be available in the 2020s and beyond. However, staff is in the process of procuring a replacement for the contract expiring in 2021 at a lower price than any of the City’s current renewable contracts. The costs of the Calaveras hydro project will also change in the 2020s, with debt service costs dropping by half in 2025 as some of the debt is paid off, and all debt retired by the end of 2032 (assuming no new debt is issued). The project will only be 40 years old at that time. Calaveras debt service represents roughly 70% of the annual costs of that project (and nearly 7% of the utility’s total costs), so when the debt is retired, the project could be a low-cost asset for the utility, providing carbon-free energy equal to 13% of the Electric Utility’s supply needs in an average year. Another factor that may affect the utility’s supply costs in the long run is carbon allowance revenue. Currently the Electric Utility receives $3 to 5 million per year in revenue from allocated carbon allowances under the State’s cap-and-trade program. It uses that revenue to pay for energy efficiency and to purchase renewable energy to support the utility’s Carbon Neutral Plan. That revenue source is expected to continue through 2020, but there is no provision for the continuation of these allocations past 2020. If the Electric Utility no longer received these allowances, it would have to fund these programs from sales revenues. Transmission costs are also continuing to rise. If the State continues to increase mandates or incentives for renewable energy development, integrating these new projects into the transmission grid will be an ever increasing challenge, some costs of which will be borne by Palo Alto. The planned expansion of the CAISO to a larger regional grid control area may result in additional transmission costs that could further increase CPAU’s transmission costs. In addition to the costs of new transmission lines that will need to be built, flexible resources will be required to balance rapid changes in wind or solar output throughout the day. Palo Alto will likely bear some of the costs of these new lines and resources. CPAU is also currently investigating installing a second transmission interconnection for Palo Alto, which could be funded by the Electric Special Projects reserve. Over the next several years the Electric Utility will continue to execute its usual monitoring, repair, and replacement routine for the distribution system, but will also begin the rollout of various smart grid technologies. The utility continues to monitor the growth of electric vehicle ownership and gas-to-electric fuel switching in Palo Alto. In the next 10 to 20 years, these factors may begin to create notable increases in electric consumption and have a variety of impacts on the distribution system. As housing stock is turned over, however, stricter building codes may help to counteract load growth, as may increasing numbers of rooftop solar installations. The utility has already started to take some of these factors into account in its long-term planning processes, but will need to continue to incorporate them into its planning methodologies. 29 | P a g e Looking out toward 2050 and beyond, if the State were to adopt climate goals consistent with Executive Orders S-3-05 and B-16-2012 (with a goal of reducing GHG emissions to 80 percent below 1990 levels by 2050), or if similar (or more aggressive) local goals were adopted, it is conceivable that electricity could replace natural gas and petroleum almost entirely. Many, if not most, vehicles would use electricity, though hydrogen is another potential fuel source under development and other technologies might be developed. Initial analysis of these types of scenarios is being undertaken in the context of the Sustainability and Climate Action Plan (S/CAP) development process. These types of scenarios require careful planning for the associated load growth to make sure the distribution system did not end up overloaded, or conversely, to avoid overinvestment. 30 | P a g e SECTION 6: DETAILS AND ASSUMPTIONS SECTION 6A: ELECTRICITY PURCHASES As shown in Figure 14 the utility gets roughly 50% of its energy from hydroelectric projects in a normal year (FY 2014 and FY2015 were dry). Contracts with renewable sources made up just over 20% of the portfolio in FY 2015, and are projected to rise to roughly 50% in FY 2017. The remainder comes from unspecified market sources. Under the City’s Carbon Neutral Plan, CPAU purchases RECs corresponding to the amount of market energy it purchases. Figure 14: Electricity Supply by Source 31 | P a g e Figure 15 shows the historical and projected costs for the electric supply portfolio,4 as well as average and actual hydroelectric generation.5 Electric supply costs decreased in FY 2010 and FY 2011 due to decreases in market prices related to shale gas. In addition, FY 2009 was a dry year with low hydroelectric production, so FY 2010 and FY 2011 looked better by comparison. Costs increased in FY 2013, FY 2014, and FY 2015 due to the drought, which reduced the amount of generation from hydroelectric resources. Costs are projected to decrease slightly in FY 2016 due to slightly higher hydroelectric generation, and may decrease substantially depending on rainfall. Even if hydroelectric generation returns to normal levels, costs will increase in FY 2017 due to increases in renewable energy costs as various renewable projects come online to fulfill the City’s carbon neutral and RPS goals. Transmission charges are also projected to increase as new transmission lines are built throughout California to accommodate new renewable projects. In total, electric supply costs are projected to increase to $75.2 million by FY 2018, at which point all currently contracted renewable projects will be online. Supply costs are only projected to change slightly in subsequent years. 4 Costs are shown net of wholesale revenues, and cannot be directly compared with the electric supply purchase figures shown in Appendix Error! Reference source not found. (Error! Reference source not found.). 5 Average hydroelectric generation increased in January of 2015 due to an increase in the utility’s contractual share of the output of the CVP Federal hydropower project. 32 | P a g e Figure 15: Electric Supply Portfolio Costs, Historical and Projected SECTION 6B: OPERATIONS CPAU’s Electric Utility operations include the following activities:  Administration, including financial management of charges allocated to the Electric Utility for administrative services provided by the General Fund and for Utilities Department administration, as well as debt service and other transfers. Additional detail on Electric Utility debt service is provided in Section 6D (Debt Service)  Customer Service  Engineering work for maintenance activities (as opposed to capital activities)  Operations and Maintenance of the distribution system; and  Resource Management Appendix C: Description of Electric utility Operational Activities includes detailed descriptions of the work associated with each of these activities. 33 | P a g e From FY 2009 to FY 2015, Operations costs increased by $2.2 million, or less than 1% per year on average. In 2013 there was a one-time increase in expenses associated with an adjustment to the value of the City’s investment portfolio. Excluding debt service and transfers, which stay relatively stable over time, costs increased roughly 2.5% per year over that time. In FY 2016, however, Operations costs increased $4.5 million (9.6%). This was primarily due to increases in overhead and salary and benefit costs. Operations costs are projected to increase by an additional $1M per year starting in FY 2017 as work is done to begin catching up on deferred maintenance that has accumulated due to difficulty filling certain maintenance positions. Aside from those increases, costs are projected to increase with inflation over the remainder of the forecast period. Figure 16: Historical and Projected Electric Utility Operational Costs SECTION 6C: CAPITAL IMPROVEMENT PROGRAM (CIP) CIP spending for FY 2017 through FY 2019 is projected to increase substantially, primarily due to major one-time projects, including service connection upgrades for a few major customers, pole replacements related to the Fiber to the Home project, and Smart Grid upgrades. Ongoing capital investment in the electric distribution system is also increasing. The one-time projects will mostly be funded by customer-specific fees and transfers from other funds. Only $3.4 million of the funding for the one-time projects is projected to come from utility rates. This forecast assumes that smart grid projects are financed from the Electric Special Projects 34 | P a g e Reserve and with additional funding from the water and gas funds, but it would also be possible to use bond financing. Excluding the one-time projects listed above, the CIP plan for FY 2017 to FY 2023 is primarily funded by utility rates, but other sources of funds include connection fees (for Customer Connections), phone and cable companies (primarily for undergrounding), and other funds (for smart grid). The details of the CIP budget will be available in the Proposed FY 2017 Utilities Capital Budget. Figure 16 shows the adopted / proposed / projected capital budgets as well as actual and projected capitalized administrative overhead associated with the program. Figure 17: Electric Utility CIP Spending SECTION 6D: DEBT SERVICE The Electric Utility’s annual debt service is $100,000 per year. The Electric Utility currently makes payment on one bond issuance, the 2007 Electric Utility Clean Renewable Energy Tax Credit Bonds, Series A. This $1.5 million bond issuance was to fund a portion of the construction costs of solar demonstration projects at the Municipal Services Center, Baylands Interpretive Center, and Cubberley Community Center. The capacity of these projects totaled 250 kW. In exchange for funding part of the construction costs Electric Utility receives the RECs from these 35 | P a g e projects. The bonds were Clean Renewable Energy Bonds (CREBs), meaning they are interest free (the investors receive a tax credit from the federal government). This bond issuance is secured by the net revenues of the Electric Utility. Debt service for this bond continues through 2021, and for the financial forecast period is as follows: Table 10: Electric Utility Debt Service ($000) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 2007 Clean Renewable Energy Bonds 100 100 100 100 100 100 - - The 2007 bonds include a covenant stating that the Electric Utility will maintain a debt coverage ratio of 125% of debt service. The current Financial Plan maintains compliance with these covenants throughout the forecast period, as shown in Appendix C. The Electric Utility’s reserves and net revenue are also pledged as security for the bond issuances listed in Table 11, even though the Electric Utility is not responsible for the debt service payments. The Electric Utility’s reserves or net revenues would only be called upon if the responsible utilities are unable to make their debt service payments. Staff does not currently foresee this occurring. Table 11: Other Issuances Secured by Electric Utility’s Revenues or Reserves Bond Issuance Responsible Utilities Annual Debt Service ($000) Secured by Electric Utility’s: Net Revenues Reserves 1995 Utility Revenue Bonds, Series A Storm Drain $680 Yes No 1999 Utility Revenue Bonds, Series A Storm Drain Wastewater Collection Wastewater Treatment $1,207 No Yes 2009 Water Revenue Bonds (Build America Bonds) Water $1,977* No Yes 2011 Utility Revenue Refunding Bonds, Series A Gas Water $1,457 No Yes *Net of Federal interest subsidy SECTION 6E: EQUITY TRANSFER The City calculates the equity transfer from its Electric Utility based on a methodology adopted by Council in 2009, which has remained unchanged since6. Each year it is calculated according to the 2009 Council-adopted methodology, and does not require additional Council action. 6 For more detail on the ordinance adopting the 2009 transfer methodology, see CMR 280:09, Budget Adoption Ordinance for Fiscal Years 2009 and 2010; and CMR 260:09, Finance Committee Report explaining proposed changes to equity transfer methodology. 36 | P a g e SECTION 6F: WHOLESALE REVENUES AND OTHER REVENUES The Electric Utility receives most of its revenues from sales of electricity, but about 12% comes from other sources. Of these other sources, about a third represent wholesale “revenues” that is included solely for accounting purposes. These revenues have offsetting electric supply purchase costs, and do not normally affect the utility’s net position. Of the remaining revenues, the largest revenue sources are interest on reserves, connection fees for new or replacement electric services, and carbon allowance revenues associated with the State’s cap-and-trade program. In FY 2015 these sources represented roughly 50% of revenue from sources other than electricity sales. The remaining FY 2015 revenues consisted of a variety of one-time transfers. Revenues from connection fees have more than doubled since FY 2009. Revenue from these sources decreased slightly during the recession, but has increased substantially since then, peaking in FY 2014. Staff is forecasting slightly lower revenue from this source in subsequent years. Carbon allowance revenues are projected to stay stable through the forecast period, as is interest income. However, both of these revenue sources are subject to some uncertainty. The State’s cap-and-trade program regulations only describe the program through 2020. This forecast assumes the program will remain in place with similar program design following 2020, but that may not be the case. CARB is in the process of establishing post-2020 rules. The forecast for interest income assumes current interest rates continue and there are no major reserve reductions aside from what is anticipated in this Financial Plan. If interest rates rise, interest income could increase, and if reserves decreased (due to drought or a withdrawal from the ESP reserve for a major project), interest income would decrease. SECTION 6G: SALES REVENUES Sales revenue projections are based on the load forecast in Section 5A: Load Forecast and the projected rate changes shown in Figure 7. As discussed in Section 5A, sales revenues for this utility stay relatively stable due to the mild climate in Palo Alto. In addition, Palo Alto is a built out City, with incremental growth in population and relatively stable commercial customer loads. 37 | P a g e SECTION 7: COMMUNICATIONS PLAN CPAU communication methods include use of the Utilities website, utility bill inserts, messaging on bills and envelopes, email newsletters, print ads in local publications, videos and participation in community outreach events. The FY 2017 Electric Utility communications strategy covers these primary areas: rates, drought impacts, efficiency, renewables, operations, infrastructure and safety. In FY 2017, CPAU is proposing an 11% increase in electric utility rates. Electric utility rates have not increased since 2009, as the City has been drawing down reserves from the Electric Fund. The rate increase is necessary this year, as these reserves are below the minimum reserve level. Communications will focus on the reasons why a rate increase is necessary, and why the percentage increase is higher than projected in past financial forecasts, particularly due to the impact of the drought. Palo Alto purchases a significant portion of its electricity from hydroelectric resources. Severe drought conditions over the past few years have reduced available hydroelectric supplies, requiring the City to purchase more costly replacement electric supplies. Reliability and safety are primary concerns for CPAU and City Council has placed increasing emphasis on capital improvement investments for utility infrastructure. In order to maintain system integrity, continued capital improvement costs are necessary. Deferring such costs to future years would not be prudent, as deferred investment in maintenance, operations and capital improvement upgrades could potentially jeopardize the safety and reliability of the electric utility system. Despite these costs and increasing rates, CPAU’s rates are far lower than PG&E’s. Keeping costs low is one of the benefits CPAU offers its customers as a public utility provider. CPAU will continue to communicate about the City’s carbon neutral electric supply portfolio. Outreach includes apprising the public of major renewable energy purchase agreements, which contribute toward Palo Alto’s long-term energy security and commitment to sustainability. Recent power purchase agreements have allowed CPAU to procure long-term renewable electric supplies at low costs. CPAU will highlight these environmental attributes and value in our communications. Throughout the year, communications staff promotes CPAU’s electric efficiency services, rebates and local renewable energy programs. Since January 2015, CPAU has been encouraging community participation in the Georgetown University Energy Prize competition, a friendly, national campaign for energy efficiency. This two-year campaign encourages the community to reduce energy use and compete for a $5 million prize. Just recently, CPAU launched new programs that will allow customers to better understand and manage their energy use. Such programs include a free utility bill analysis service with option for a subsidized in-depth home energy assessment, and an online utility portal for customers to view consumption history, learn about efficiency tips and CPAU programs they can take advantage of for home energy efficiency. 38 | P a g e APPENDICES Appendix A: Electric Utility Financial Forecast Detail Appendix B: Electric Utility Reserves Management Practices Appendix C: Description of Electric utility Operational Activities Appendix D: Samples of Recent Electric Utility Outreach Communications 6053706 APPENDIX A: ELECTRIC UTILITY FINANCIAL FORECAST DETAIL 6053706 (page intentionally left blank) 6053706 1 FISCAL YEAR FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 2 3 ELECTRIC LOAD 4 Purchases (MWh)1,040,851 1,019,788 978,833 969,519 976,319 980,894 979,005 977,292 993,844 997,125 998,260 997,531 997,596 999,464 986,864 5 Sales (MWh)995,811 965,048 946,518 942,562 946,841 950,784 936,773 946,996 963,035 966,215 967,314 966,608 966,670 968,481 956,271 6 7 BILL AND RATE CHANGES 8 System Average Rate ($/kWh)0.1048$ 0.1155$ 0.1168$ 0.1156$ 0.1154$ 0.1164$ 0.1158$ 0.1158$ 0.1274$ 0.1398$ 0.1435$ 0.1435$ 0.1452$ 0.1452$ 0.1477$ 9 Change in System Average Rate 10%1%-1%0%1%0%0%11%10%3%0%1%0%2% 10 Change in Average Residential Bill 11%-5%-1%-4%-1%-5%10%8%10%2%0%1%0%1% 11 12 STARTING RESERVES 13 Reappropriations (Non-CIP)- - 2,760,000 343,000 1,886,000 305,000 - - - - - - - - - 14 Commitments (Non-CIP)2,241,000 1,916,000 1,463,000 1,593,000 2,737,000 3,528,000 3,164,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 15 Restricted for Debt Service - - - - - - - - - - - - - - - 16 Emergency Plant Replacement 3,057,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 - - - - - - - - 17 Central Valley Project Reserve 22,000 153,000 306,000 305,000 314,000 313,000 329,000 - - - - - - - - 18 Underground Loan Reserve 709,000 717,000 731,000 736,000 742,000 738,000 734,000 730,000 730,000 730,000 730,000 730,000 730,000 730,000 730,000 19 Public Benefits Reserves 2,109,000 4,280,000 3,750,000 3,139,000 1,149,000 2,197,000 2,064,000 2,574,000 2,700,394 2,790,356 2,799,046 2,717,399 2,544,810 2,434,376 2,373,578 20 Electric Special Projects Reserve 70,397,000 64,535,000 59,865,000 55,558,000 50,320,000 51,838,000 51,838,000 51,838,000 51,534,944 51,383,460 51,050,127 47,300,127 47,300,127 47,300,127 47,300,127 21 Hydro Stabilization Reserve - - - - - - - 17,000,000 11,400,000 2,400,000 - - - - - 22 Capital Reserves - - - - - - - - 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 23 Rate Stabilization Reserves 55,418,000 47,783,000 54,339,000 66,331,000 74,609,000 69,029,000 70,049,000 14,411,000 5,411,000 - - - - - - 24 Operations Reserves - - - - - - - 22,498,000 22,733,825 22,014,607 22,281,475 24,814,237 27,032,576 30,783,222 34,269,008 25 Unassigned - - - - - - - - - - 0 - - - - 26 TOTAL STARTING RESERVES 133,953,000 120,384,000 124,214,000 129,005,000 132,757,000 128,948,000 129,178,000 112,153,000 100,476,163 85,284,424 82,826,649 81,527,763 83,573,514 87,213,725 90,638,713 27 28 REVENUES 29 Net Sales 105,312,712 113,129,269 111,948,267 109,309,318 109,974,337 110,301,711 108,674,986 109,644,507 122,721,963 135,111,161 138,828,086 138,726,658 140,313,744 140,576,542 141,259,300 30 Wholesale Revenues 10,618,388 7,903,940 8,443,016 7,189,218 6,635,790 6,010,409 6,267,000 6,763,000 11,732,580 13,249,634 14,128,345 15,816,411 16,063,130 15,367,103 15,992,486 31 Other Revenues and Transfers In 11,744,330 8,458,392 6,374,799 6,316,048 8,736,976 9,772,185 8,379,507 8,315,879 17,306,372 13,685,157 16,104,331 8,952,387 9,297,064 9,706,437 10,042,027 32 TOTAL REVENUES 127,675,429 129,491,602 126,766,082 122,814,584 125,347,103 126,084,305 123,321,493 124,723,385 151,760,915 162,045,951 169,060,763 163,495,456 165,673,937 165,650,082 167,293,813 33 34 EXPENSES 35 Electric Supply Purchases 82,348,075 68,714,475 61,247,248 58,724,136 61,313,637 68,785,977 80,022,010 75,705,000 86,377,737 88,523,524 89,131,094 90,303,886 89,637,135 88,542,665 89,918,517 36 Operating Expenses 37 Administration 38 Allocated Charges 3,585,068 2,667,704 2,807,991 3,416,423 4,399,674 4,139,837 4,511,222 3,651,896 3,743,559 3,837,533 3,933,853 4,032,597 4,133,584 4,236,960 4,342,932 39 Rent 3,428,294 3,963,377 3,721,542 3,839,201 3,875,836 4,051,044 4,147,742 4,991,328 5,141,068 5,295,300 5,454,159 5,617,784 5,786,317 5,959,907 6,138,704 40 Debt Service 8,185,819 7,919,136 7,343,352 8,902,751 9,265,736 9,020,651 9,037,000 9,139,768 8,953,886 8,955,164 8,808,619 8,818,349 8,783,507 8,792,388 9,624,493 41 Transfers and Other Adjustments 13,282,668 10,860,269 13,056,927 11,603,695 16,797,054 11,385,421 10,789,119 11,778,415 11,781,400 11,784,460 11,787,597 11,790,812 11,794,107 11,797,485 11,800,947 42 Subtotal, Administration 28,481,848 25,410,486 26,929,812 27,762,069 34,338,299 28,596,953 28,485,082 29,561,407 29,619,914 29,872,457 29,984,228 30,259,541 30,497,516 30,786,740 31,907,076 43 Resource Management 2,062,511 3,033,428 2,380,313 2,654,024 3,024,268 3,541,524 2,138,615 2,966,005 3,071,752 3,182,092 3,295,330 3,413,039 3,513,915 3,605,059 3,699,533 44 Demand Side Management 3,336,356 4,048,114 3,490,676 4,541,531 3,529,529 3,187,875 3,491,470 4,476,424 3,612,447 3,694,961 3,558,989 3,275,399 3,213,446 3,169,620 3,251,901 45 Operations and Mtc 8,975,462 8,892,002 9,339,340 9,288,490 9,601,481 9,488,627 10,716,881 12,216,961 13,621,453 14,075,224 14,540,523 15,022,687 15,450,353 15,847,643 16,258,382 46 Engineering (Operating)879,303 1,094,766 1,070,441 1,057,783 1,114,945 1,102,008 1,230,160 1,929,843 1,981,771 2,035,192 2,089,931 2,146,191 2,201,598 2,257,007 2,313,920 47 Customer Service 1,650,731 1,896,956 1,881,881 1,908,493 2,007,322 2,032,231 1,548,851 2,348,349 2,436,928 2,529,629 2,624,844 2,724,064 2,806,984 2,880,302 2,956,458 48 Allowance for Unspent Budget - - - - - - - (1,328,747) (1,421,462) (1,467,484) (1,514,688) (1,563,571) (1,607,504) (1,648,717) (1,691,289) 49 Subtotal, Operating Expenses 45,386,213 44,375,751 45,092,464 47,212,389 53,615,844 47,949,218 47,611,059 52,170,242 52,922,803 53,922,071 54,579,157 55,277,350 56,076,307 56,897,655 58,695,982 50 Capital Program Contribution 13,510,141 12,571,376 15,635,370 13,126,059 14,226,622 9,119,111 12,713,425 16,988,980 27,652,114 22,058,131 26,649,398 15,868,470 16,320,285 16,784,774 17,262,590 51 TOTAL EXPENSES 141,244,429 125,661,602 121,975,082 119,062,584 129,156,103 125,854,305 140,346,493 144,864,222 166,952,654 164,503,726 170,359,649 161,449,705 162,033,726 162,225,093 165,877,088 52 53 ENDING RESERVES 54 Reappropriations (Non-CIP)- 2,760,000 343,000 1,886,000 305,000 - - - - - - - - - - 55 Commitments (Non-CIP)1,916,000 1,463,000 1,593,000 2,737,000 3,528,000 3,164,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 3,102,000 56 Restricted for Debt Service - - - - - - - - - - - - - - - 57 Emergency Plant Replacement 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 - - - - - - - - - 58 Central Valley Project Reserve 153,000 306,000 305,000 314,000 313,000 329,000 - - - - - - - - - 59 Underground Loan Reserve 717,000 731,000 736,000 742,000 738,000 734,000 730,000 730,000 730,000 730,000 730,000 730,000 730,000 730,000 730,000 60 Public Benefits Reserves 4,280,000 3,750,000 3,139,000 1,149,000 2,197,000 2,064,000 2,574,000 2,700,394 2,790,356 2,799,046 2,717,399 2,544,810 2,434,376 2,373,578 2,191,308 61 Electric Special Projects Reserve 64,535,000 59,865,000 55,558,000 50,320,000 51,838,000 51,838,000 51,838,000 51,534,944 51,383,460 51,050,127 47,300,127 47,300,127 47,300,127 47,300,127 47,300,127 62 Hydro Stabilization Reserve - - - - - - 17,000,000 11,400,000 2,400,000 - - - - - - 58 Capital Reserve - - - - - - - 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 2,864,000 59 Rate Stabilization Reserve 47,783,000 54,339,000 66,331,000 74,609,000 69,029,000 70,049,000 14,411,000 5,411,000 - - - - - - - 60 Operations Reserve - - - - - - 22,498,000 22,733,825 22,014,607 22,281,475 24,814,237 27,032,576 30,783,222 34,269,008 35,868,004 61 Unassigned - - - - - - - - - 0 - - - - - 62 TOTAL ENDING RESERVES 120,384,000 124,214,000 129,005,000 132,757,000 128,948,000 129,178,000 112,153,000 100,476,163 85,284,424 82,826,649 81,527,763 83,573,514 87,213,725 90,638,713 92,055,438 6053706 1 FISCAL YEAR FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 2 3 REVENUES 4 Net Sales 82%87%88%89%88%87%88%88%81%83%82%85%85%85%84% 5 Other Revenues and Transfers In 18%13%12%11%12%13%12%12%19%17%18%15%15%15%16% 6 TOTAL REVENUES 100%100%100%100%100%100%100%100%100%100%100%100%100%100%100% 7 8 EXPENSES 9 Commodity Purchases 56%54%46%47%46%54%56%51%46%46%45%47%47%47%46% 10 Operating Expenses 11 Administration 12 Allocated Charges 3%2%2%3%3%3%3%3%2%2%2%2%3%3%3% 13 Rent 2%3%3%3%3%3%3%3%3%3%3%3%4%4%4% 14 Debt Service 6%6%6%7%7%7%6%6%5%5%5%5%5%5%6% 15 Transfers and Other Adjustments 9%9%11%10%13%9%8%8%7%7%7%7%7%7%7% 16 Subtotal, Administration 20%20%22%23%27%23%20%20%18%18%18%19%19%19%19% 17 Resource Management 1%2%2%2%2%3%2%2%2%2%2%2%2%2%2% 18 Operations and Mtc 6%7%8%8%7%8%8%8%8%9%9%9%10%10%10% 19 Engineering (Operating)1%1%1%1%1%1%1%1%1%1%1%1%1%1%1% 20 Customer Service 1%2%2%2%2%2%1%2%1%2%2%2%2%2%2% 21 Allowance for Unspent Budget 0%0%0%0%0%0%0%-1%-1%-1%-1%-1%-1%-1%-1% 22 Subtotal, Operating Expenses 30%32%34%36%39%36%31%33%30%31%30%32%33%33%33% 23 Capital Program Contribution 10%10%13%11%11%7%9%12%17%13%16%10%10%10%10% 24 TOTAL EXPENSES 95%96%93%93%96%97%96%95%92%90%90%89%89%90%90% 25 26 RISK ASSESSMENT DETAIL (SUPPLY FUND) 27 FISCAL YEAR FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 28 1. Load Net Revenue 77,428 652,853 1,208,477 29 2. Hydro Production: Western & Calaveras 9,314,822 9,050,313 3,397,119 30 3. Renewable Production: Landfill & Wind & Solar 375,755 743,945 539,073 31 4. Carbon Neutral Cost 331,630 303,022 114,983 32 5. Market Price 909,196 775,584 1,138,589 33 6. Local Capacity 475,962 408,388 446,695 34 7. Transmission/CAISO 4,555,915 3,741,647 2,806,120 35 8. Plant Outage 1,000,000 1,000,000 1,000,000 36 9. Western Cost 3,130,000 2,704,738 2,973,619 37 10. Regulatory & Legal - - - 38 11. Supplier Default - - - 39 TOTAL 20,170,708 19,380,490 13,624,674 40 Supply Operations + Hydro Stabilization Reserves, % of Risk Assessment 196%176%179% 41 42 RISK ASSESSMENT DETAIL (DISTRIBUTION FUND) 43 FISCAL YEAR FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 44 Distribution Revenue Variance 3,240,845 3,290,258 3,918,697 4,122,469 4,163,694 4,160,651 4,285,471 4,293,497 4,422,302 45 10% CIP Program Contingency 1,271,343 1,698,898 2,765,211 2,205,813 2,664,940 1,586,847 1,632,028 1,678,477 1,726,259 46 Total Risk Asssessment Value 4,512,188 4,989,156 6,683,908 6,328,282 6,828,634 5,747,498 5,917,499 5,971,975 6,148,561 47 Projected Operations Reserve 22,498,000 22,733,825 22,014,607 22,281,475 24,814,237 27,032,576 30,783,222 34,269,008 35,868,004 48 Operations Reserve, % of Risk Value 499%456%329%352%363%470%520%574%583% 49 44 SUPPLY OPERATIONS RESERVE 45 Min (60 days of non-capital expenses)- - - - - - 8,339,587 6,424,305 6,557,102 6,698,857 6,808,081 6,897,553 7,013,278 7,126,792 7,248,481 46 Target (90 days of non-capital expenses)- - - - - - 10,338,923 9,636,457 9,835,653 10,048,285 10,212,121 10,346,329 10,519,917 10,690,188 10,872,721 47 Max (120 days of non-capital expenses)- - - - - - 12,338,259 12,848,609 13,114,204 13,397,714 13,616,162 13,795,105 14,026,555 14,253,584 14,496,961 48 49 DISTRIBUTION OPERATIONS RESERVE 50 Min (60 days of non-capital expenses)- - - - - - 8,339,587 6,424,305 6,557,102 6,698,857 6,808,081 6,897,553 7,013,278 7,126,792 7,248,481 51 Target (90 days of non-capital expenses)- - - - - - 10,338,923 9,636,457 9,835,653 10,048,285 10,212,121 10,346,329 10,519,917 10,690,188 10,872,721 52 Max (120 days of non-capital expenses)- - - - - - 12,338,259 12,848,609 13,114,204 13,397,714 13,616,162 13,795,105 14,026,555 14,253,584 14,496,961 53 Risk Assessment Value 4,512,188 4,989,156 6,683,908 6,328,282 6,828,634 5,747,498 5,917,499 5,971,975 6,148,561 ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 43 | P a g e APPENDIX B: ELECTRIC UTILITY RESERVES MANAGEMENT PRACTICES (This section includes the proposed amendments to this section. This section will be finalized following Council adoption of the final amended version.) The following reserves management practices are used when developing the Electric Utility Financial Plan: Section 1. Definitions a) “Financial Planning Period” – The Financial Planning Period is the range of future fiscal years covered by the Financial Plan. For example, if the Financial Plan delivered in conjunction with the FY 2015 budget includes projections for FY 2015 to FY 2019, FY 2015 to FY 2019 would be the Financial Planning Period. b) “Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers to the Utility’s Unrestricted Net Assets. c) “Net Assets” - The Government Accounting Standards Board defines a Utility’s Net Assets as the difference between its assets and liabilities. d) “Unrestricted Net Assets” - The portion of the Utility’s Net Assets not invested in capital assets (net of related debt) or restricted for debt service or other restricted purposes. Section 2. Supply Fund Reserves The Electric Supply Fund Balance is reserved for the following purposes: a) For existing contracts, as described in Section 4 (Reserve for Commitments) b) For operating budgets reappropriated from previous years, as described in Section 5 (Reserve for Reappropriations) c) For special projects for the benefit of the Electric Utility ratepayers, as described in Section 6 (Electric Special Projects Reserve) d) For year to year balancing of costs associated with the Electric Utility’s hydroelectric resources, as described in Section 7 (Hydroelectric Stabilization Reserve) e) For rate stabilization, as described in Section 1.d) (Rate Stabilization Reserves) f) For operating contingencies, as described in Section 12 (Operations Reserves) g) Any funds not included in the other reserves will be considered Unassigned Reserves and shall be returned to ratepayers or assigned a specific purpose as described in Section 13 (Unassigned Reserves). Section 3. Distribution Fund Reserves The Electric Distribution Fund Balance is reserved for the following purposes: a) For existing contracts, as described in Section 4 (Reserves for Commitments) b) For operating and capital budgets reappropriated from previous years, as described in Section 5 (Reserves for Reappropriations) c) As an offset to underground loan receivables, as described in Section 8 (Underground Loan Reserve) d) To hold Public Benefit Program funds collected but not yet spent, as described in Section 9 (Public Benefits Reserve) ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 44 | P a g e e) For cash flow management and contingencies related to the Electric Utility’s Capital Improvement Program (CIP), as described in Section 10 (CIP Reserve) f) For rate stabilization, as described in Section 1.d) (Rate Stabilization Reserves) g) For operating contingencies, as described in Section 12 (Operations Reserves) h) Any funds not included in the other reserves will be considered Unassigned Reserves and shall be returned to ratepayers or assigned a specific purpose as described in Section 14 (Unassigned Reserves). Section 4. Reserves for Commitments At the end of each fiscal year the Electric Supply Fund and Electric Distribution Fund Reserves for Commitments will be set to an amount equal to the total remaining spending authority for all contracts in force for the Electric Supply Fund and Electric Distribution Fund, respectively, at that time. Section 5. Reserves for Reappropriations At the end of each fiscal year the Electric Supply Fund and Electric Distribution Fund Reserves for Reappropriations will be set to an amount equal to the amount of all remaining capital and non-capital budgets that will be reappropriated to the following fiscal year for each Fund in accordance with Palo Alto Municipal Code Section 2.28.090. Section 6. Electric Special Projects Reserve The Electric Special Projects Reserve (ESP Reserve) will be managed in accordance with the policies and timelines set forth in Resolution 9206 (Resolution of the Council of the City of Palo Alto Approving Renaming the Calaveras Reserve to the Electric Special Project Reserve and Adoption of Electric Special Project Reserve Guidelines). These policies and timelines are included from Resolution 9206 as amended to refer to the reserves structure set forth in these Reserves Management Practices: a) The purpose of the ESP Reserve is to fund projects that benefit electric ratepayers; b) The ESP Reserve funds must be used for projects of significant impact; c) Projects proposed for funding must demonstrate a need and value to electric ratepayers. The projects must have verifiable value and must not be speculative, or high-risk in nature; d) Projects proposed for funding must be substantial in size, requiring funding of at least $1 million; e) The preferred projects to be funded by the ESP Reserve must be identified by end of FY 2015; f) Any uncommitted funds remaining at the end of FY 2020 will be transferred to the Electric Supply Operations Reserve and the ESP Reserve will be closed; and g) Funds may be used for analysis and pilot projects which would be the basis for planned large projects. Section 7. Hydroelectric Stabilization Reserve Supply cost savings and surplus energy sales revenue associated with higher than average generation from hydroelectric resources may be added to the Electric Supply Fund’s Hydroelectric Stabilization Reserve by action of the City Council and held to offset higher ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 45 | P a g e commodity supply costs during years of lower than average generation. Withdrawal of funds from the Hydroelectric Stabilization Reserve requires action by the City Council. Section 8. Underground Loan Reserve At the end of each fiscal year, the Underground Loan Reserve will be adjusted by the principal payments made against outstanding underground loans. Section 9. Public Benefits Reserve The Public Benefits Reserve will be increased by the amount of unspent Public Benefits Revenues remaining at the end of each fiscal year. Expenditure of these funds requires action by the City Council. Section 10. CIP Reserve The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for capital contingencies. Staff will manage the CIP Reserve according to the following practices: a) The following guideline levels are set forth for the CIP Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of CIP expense budgeted for that year. Minimum Level 60 days 6 months of budgeted CIP expense Maximum Level 120 days 12 months of budgeted CIP expense b) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and the Reserve for Commitments when funds are added to or removed from the Reserve for Commitments as a result of a change in contractual commitments related to CIP projects. Any other additions to or withdrawals from the CIP reserve require Council action. c) Minimum Level: i) Funds held in the Reserve for Commitments may be counted as part of the CIP Reserve for the purpose of determining compliance with the CIP Reserve minimum guideline level. ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered by the end of the following fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is below its minimum level at the end of FY 2017, staff must present a plan by June 30, 2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff may present, and the Council may adopt, an alternative plan that takes longer than one year to replenish the reserve, or that does so in a shorter period of time. d) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds may be added to this reserve. If there are funds in this reserve in excess of the maximum level staff must propose to transfer these funds to another reserve or return them to ratepayers in the next Financial Plan. Staff may also seek City Council to ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 46 | P a g e approve holding funds in this reserve in excess of the maximum level if they are held for a specific future purpose related to the CIP. Section 11. Rate Stabilization Reserves Funds may be added to the Electric Supply or Distribution Fund’s Rate Stabilization Reserves by action of the City Council and held to manage the trajectory of future year rate increases. Withdrawal of funds from either Rate Stabilization Reserve requires action by the City Council. If there are funds in either Rate Stabilization Reserve at the end of any fiscal year, any subsequent Electric Utility Financial Plan must result in the withdrawal of all funds from this Reserve by the end of the Financial Planning Period. Section 12. Operations Reserves The Electric Supply Fund and Electric Distribution Fund Operations Reserves are used to manage normal variations in the costs of providing electric service and as a reserve for contingencies. Any portion of the Electric Utility’s Fund Balance not included in the reserves described in Section 4 to d) above will be included in the appropriate Operations Reserve unless the reserve has reached its maximum level as set forth in Section 12 (e) below. Staff will manage the Operations Reserves according to the following practices: a) The following guideline levels are set forth for the Electric Supply Fund Operations Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of Operations and Maintenance (O&M) and commodity expense forecasted for that year in the Financial Plan. Minimum Level 60 days of Supply Fund O&M and commodity expense Target Level 90 days of Supply Fund O&M and commodity expense Maximum Level 120 days of Supply Fund O&M and commodity expense b) The following guideline levels are set forth for the Electric Distribution Fund Operations Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of O&M expense forecasted for that year in the Financial Plan. Minimum Level 60 days of Distribution Fund O&M expense Target Level 90 days of Distribution Fund O&M expense Maximum Level 120 days of Distribution Fund O&M expense c) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Supply Fund or Distribution Fund’s Operations Reserve are lower than the minimum level set forth above, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered within six months of the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the following fiscal year. For example, if the Operations Reserve is below its minimum level at the end of FY 2014, staff must present a plan by December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In addition, staff may present an alternative plan that takes longer than one year to replenish the reserve. d) Target Level: If, at the end of any fiscal year, either Operations Reserve is higher or lower than the target level, any Financial Plan created for the Electric Utility shall be ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 47 | P a g e designed to return both Operations Reserves to their target levels by the end of the forecast period. e) Maximum Level: If, at any time, either Operations Reserve reaches its maximum level, no funds may be added to this Reserve. Any further increase in that fund’s Fund Balance shall be automatically included in the Unassigned Reserve described in Section 13, below. Section 13. Unassigned Reserves If the Operations Reserve in either the Electric Supply Fund or the Electric Distribution Fund reaches its maximum level, any further additions to that fund’s Fund Balance will be held in the Unassigned Reserve. If there are any funds in either Unassigned Reserve at the end of any fiscal year, the next Financial Plan presented to the City Council must include a plan to assign them to a specific purpose or return them to the Electric Utility ratepayers by the end of the first fiscal year of the next Financial Planning Period. For example, if there were funds in the Unassigned Reserves at the end of FY 2016, and the next Financial Planning Period is FY 2017 through FY 2021, the Financial Plan shall include a plan to return or assign the funds in the Unassigned Reserve by the end of FY 2017. Staff may present an alternative plan that retains these funds or returns them over a longer period of time. Section 14. Intra-Utility Transfers between Supply and Distribution Funds Transfers between Electric Distribution Fund Reserves and Electric Supply Fund Reserves are permitted if consistent with the purposes of the two reserves involved in the transfer. Such transfers require action by the City Council. ELECTRIC UTILITY FINANCIAL PLAN J u n e 1 6 , 2 0 1 4 48 | P a g e APPENDIX C: DESCRIPTION OF ELECTRIC UTILITY OPERATIONAL ACTIVITIES This appendix describes the activities associated with the various cost categories referred to in this Financial Plan. Customer Service: This category includes the Electric Utility’s share of the call center, meter reading, collections, and billing support functions. Billing support encompasses staff time associated with bill investigations and quality control on certain aspects of the billing process. It does not include maintenance of the billing system itself, which is included in Administration. This category also includes CPAU’s key account representatives, who work with large commercial customers who have more complex requirements for their electric services. Resource Management: This category includes supply portfolio management, energy procurement, rate setting, and tracking of legislation and regulation related to the electric industry. Operations and Maintenance: This category includes the costs of a variety of distribution system maintenance activities, including:  monitoring the substations and performing routine maintenance;  performing preventative maintenance on the system;  monitoring the system’s status from the UCC using SCADA;  maintaining the SCADA system;  investigating outages and other customer complaints and performing emergency repairs;  clearing vegetation near overhead power lines; and  testing and replacing meters to ensure accurate sales metering. Administration: Accounting, purchasing, legal, and other administrative functions provided by the City’s General Fund staff, as well as shared communications services, Utilities Department administrative overhead and billing system maintenance costs. Demand Side Management: Includes the cost of administering energy efficiency programs and the direct cost of rebates paid. Includes solar rebates. Engineering (Operating): The Electric Utility’s engineers focus primarily on the CIP, but a small portion of their time is spent assisting with distribution system maintenance. APPENDIX D: SAMPLES OF RECENT ELECTRIC UTILITY OUTREACH COMMUNICATIONS Attachment D NOT YET APPROVED 160330 jb 6053723 Resolution No. _________ Resolution of the Council of the City of Palo Alto Adopting an Electric Rate Increase and Amending Rate Schedules E-1 (Residential Electric Service), E-2 (Small Commercial Electric Service), E-2-G (Small Commercial Green Power Electric Service), E-4 (Medium Commercial Electric Service), E-4-G (Medium Commercial Green Power Electric Service), E-4 TOU (Medium Commercial Time of Use Electric Service), E 7 (Large Commercial Electric Service), E-7-G (Large Commercial Green Power Electric Service), E 7 TOU (Large Commercial Time of Use Electric Service), E-14 (Street Lights), and E-16 (Unmetered Electrical Service) and Repealing Rate Schedules E-18 (Municipal Electric Service) and E- 18-G (Municipal Green Power Electric Service) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On ____, 2016, the City Council heard and approved the proposed rate increase at a noticed public hearing. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2016. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2 (Small Commercial Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended, shall become effective July 1, 2016. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2-G (Small Commercial Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2-G, as amended, shall become effective July 1, 2016. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 (Medium Commercial Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4, as amended, shall become effective July 1, 2016. CMR #6932: ATTACHMENT D Attachment D NOT YET APPROVED 160330 jb 6053723 SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4-G (Medium Commercial Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4-G, as amended, shall become effective July 1, 2016. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 TOU (Medium Commercial Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended, shall become effective July 1, 2016. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 (Large Commercial Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2016. SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7-G (Large Commercial Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2016. SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 TOU (Large Commercial Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2016. SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-14 (Street Lights) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-14, as amended, shall become effective July 1, 2016. SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-16 (Unmetered Electrical Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-16, as amended, shall become effective July 1, 2016. SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-18 (Municipal Electric Service) is hereby repealed effective July 1, 2016. SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-18-G (Municipal Green Power Electric Service) is hereby repealed effective July 1, 2016. SECTION 14. The City Council finds as follows: a. Revenue derived from the electric rates approved by this resolution does not exceed the funds required to provide electric service. Attachment D NOT YET APPROVED 160330 jb 6053723 b. Revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. c. The fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 15. The adoption of this resolution changing electric rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2009 Supersedes Sheet No E-1-1 dated 11-1-2008 Sheet No E-1-1 A. APPLICABILITY: This schedule applies to separately metered single-family residential dwellings receiving retail energy services from the City of Palo Alto Utilities. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides electric service. C. UNBUNDLED RATES: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Tier 1 usage $0.05448 $0.05883 $0.03755 $0.04795 $0.00321 $0.00351 $0.09524 $0.11029 Tier 2 usage 100%-200% ofAny usage over Tier 1 0.07654 0.09728 0.05045 0.06822 0.00321 0.00351 0.13020 0.16901 Tier 3 usage Over 200% of Tier 1 0.10349 0.06729 0.00321 0.17399 Minimum Bill ($/day) 0.3067 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Calculation of Usage Tiers Tier 1 electricity usage shall be calculated and billed based upon a level of 10 11 kWh per day, prorated by meter reading days of service. As an example, for a 30-day bill, the Tier 1 level would be 300 330 kWh. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. {End} SMALL COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2009 Supersedes Sheet No E-2-1 dated 7-1-200911-1-2008 Sheet No E-2-1 A. APPLICABILITY: This schedule applies to non-demand metered electric service for small commercial customers and master-metered multi-family facilities. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides electric service. C. UNBUNDLED RATES: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Summer Period $0.08219 $0.09094 $0.05505 $0.07400 $0.00321 $0.00351 $0.14045 $0.16845 Winter Period 0.07406 0.06417 0.04934 0.04677 0.00321 0.00351 0.12661 0.11445 Minimum Bill ($/day) 0.7657 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use in both the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. SMALL COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2009 Supersedes Sheet No E-2-2 dated 7-1-200911-1-2008 Sheet No E-2-2 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a maximum demand meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type demand meter which does not reset after a definite time interval may be used at the City's option. The billing demand to be used in computing charges under this schedule will be the actual maximum demand in kilowatts for the current month. An exception is that the billing demand for customers with Thermal Energy Storage (TES) will be based upon the actual maximum demand of such customers between the hours of noon and 6 pm on weekdays. {End} SMALL COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-2-G-1 dated 7-1-20149-1-2013 Sheet No E-2-G-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Electric Service from the City of Palo Alto Utilities under the Palo Alto Green Program: 1. Small commercial Customers receiving Non-Demand Metered electric service; and 2. Customers with accounts at Master-metered multi-family facilities. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period $0.09094 $0.08219 $0.07400 $0.05505 $0.00351 $0.00321 $0.0020 $0.14245 $0.17045 Winter Period 0.06417 0.07406 0.04677 0.04934 0.00351 0.00321 0.0020 0.12861 $0.11645 Minimum Bill ($/day) 0.7657 2. 1000 kWh Block Purchase Option: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Summer Period $0.09094 $0.08219 $0.07400 $0.05505 $0.00351 $0.00321 $0.16845 $0.14045 Winter Period 0.06417 0.07406 0.04677 0.04934 0.00351 0.00321 0.11445 0.12661 Minimum Bill ($/day) 0.7657 Palo Alto Green Charge (per 1000 kWh block) $2.00 SMALL COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-2-G-2 dated 7-1-20149-1-2013 Sheet No E-2-G-2 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use in both the Summer and Winter Periods, usage will be prorated based upon the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewable sources, and create a transparent and sustainable market that encourages new development of wind and solar power. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. 4. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be SMALL COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-2-G-3 dated 7-1-20149-1-2013 Sheet No E-2-G-3 removed. The maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The billing Demand to be used in computing charges under this schedule will be the actual maximum Demand in kilowatts for the current month. An exception is that the billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. {End} MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-1 dated 2-5-20137-1-2009 Sheet No E-4-1 A. APPLICABILITY: This schedule applies to Demand metered secondary Electric Service for customers with a Maximum Demand below 1,000 kilowatts. This schedule applies to three-phase Electric Service and may include Service to master-metered multi-family facilities or other facilities requiring Demand-metered services, as determined by the City. B. TERRITORY: This rate schedule applies anywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $5.31 $2.53 $15.23 $17.14 $20.54 $19.68 Energy Charge (per kWh) 0.06083 0.08218 0.01767 0.01661 0.00321 0.00351 0.08171 0.10229 Winter Period Demand Charge (per kW) $4.80 $1.55 $9.04 $12.49 $13.84 $14.04 Energy Charge (per kWh) 0.05281 0.06037 0.01716 0.01661 0.00321 0.00351 0.07318 0.08049 Minimum Bill ($/day) 16.3216 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-2 dated 2-5-20137-1-2009 Sheet No E-4-2 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a Maximum Demand meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type Demand meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such customers between the hours of noon and 6 pm on weekdays. 4. Power Factor For new or existing customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable metering to calculate a Power Factor. The City may remove such metering from the Service of a customer whose Demand has been below 200 kilowatts for four consecutive months. When such metering is installed, the monthly Electric bill will include a “Power Factor Adjustment”, if applicable. The adjustment will be applied to a customer’s bill prior to MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-3 dated 2-5-20137-1-2009 Sheet No E-4-3 the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent (0.25%) for each one percent (1%) that the monthly Power Factor of the customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month. Where time-of-day metering is installed, the monthly Power Factor shall be the Power Factor coincident with the customer's Maximum Demand. 5. Changing Rate Schedules Customers may request a rate schedule change at any time to any City of Palo Alto full- service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. 6. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the customer's electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any customer receiving a discount hereunder and affected by such change. The customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 7. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. MEDIUM COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-4 dated 2-5-20137-1-2009 Sheet No E-4-4 b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters. A separate meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-TOU-1 dated 2-5-20137-1-2009 Sheet No E-4-TOU-1 A. APPLICABILITY: This voluntary rate schedule applies to Demand metered secondary Electric Service for customers with Demand between 500 and 1,000 kilowatts per month and who have sustained this level of usage for at least three consecutive months during the most recent 12 month period. This schedule applies to three-phase Electric Service and may include Service to master- metered multi-family facilities or other facilities requiring Demand-metered services, as determined by the City. In addition, this rate schedule is applicable for customers who did not pay Power Factor Adjustments during the last 12 months. B. TERRITORY: This rate schedule applies anywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) Peak $1.52$3.12 $5.91$8.96 $7.42$12.08 Mid-Peak 0.541.99 5.915.65 6.447.64 Off-Peak 0.541.13 5.913.26 6.444.39 Energy Charge (per kWh) Peak $0.08819 $0.10963 $0.01661 $0.03242 $0.00351 $0.00321 $0.10830 $0.14526 Mid-Peak 0.08367 0.05617 0.01661 0.01623 0.00351 0.00321 0.10378 0.07561 Off-Peak 0.07332 0.04298 0.01661 0.01218 0.00351 0.00321 0.09344 0.05837 Winter Period Demand Charge (per kW) Peak $2.77$0.87 $5.10$6.96 $7.87$7.83 Off-Peak 1.490.87 2.946.96 4.437.83 MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-TOU-2 dated 2-5-20137-1-2009 Sheet No E-4-TOU-2 Commodity Distribution Public Benefits Total Energy Charge (per kWh) Peak $0.07003 $0.06566 $0.02296 $0.01661 $0.00321 $0.00351 $0.09620 $0.08577 Off-Peak 0.04088 0.06167 0.01313 0.01661 $0.00351 0.00321 0.05722 0.08178 Minimum Bill ($/day) 16.3216 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Definition of Time Periods SUMMER PERIOD (Service from May 1 to October 31): Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays) Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays) 6:00 p.m. to 9:00 p.m. Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays) All day Saturday, Sunday, and holidays WINTER PERIOD (Service from November 1 to April 30): Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-TOU-3 dated 2-5-20137-1-2009 Sheet No E-4-TOU-3 holidays) All day Saturday, Sunday, and holidays HOLIDAYS: “Holidays” for the purposes of this rate schedule are New Years Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day. The dates will be those on which the holidays are legally observed. SEASONAL RATE CHANGES: When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein.. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Demand meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated Time periods as defined under Section D.2. 4. Power Factor Adjustment Time of Use customers must not have had a Power Factor Adjustment assessed on their Service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month, and must not have fallen below 95% to avoid the Power Factor Adjustment. Should the City of Palo Alto Utilities Department find that the Customer’s Service should be subject to Power Factor Adjustments, the Customer will be removed from the E-4- TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 5. Changing Rate Schedules MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-TOU-4 dated 2-5-20137-1-2009 Sheet No E-4-TOU-4 Customers electing to be served under E-4 TOU must remain on said schedule for a minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer may request a rate schedule change to any applicable City of Palo Alto full- service rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 6. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving a discount hereunder and affected by such change. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 7. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters. A separate meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. MEDIUM COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-4-TOU-5 dated 2-5-20137-1-2009 Sheet No E-4-TOU-5 (1) In the event the Customer’s Maximum Demand occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-4-G-1 dated 7-1-20149-10-2013 Sheet No E-4-G-1 A. APPLICABILITY: This schedule applies to Demand Metered Secondary Electric Service for Customers with a Maximum Demand below 1,000 kilowatts (kW) who receive power under the Palo Alto Green Program. This schedule applies to three-phase Electric Service and may include Service to Master-metered multi-family facilities or other facilities requiring Demand-Metered Services, as determined by the City. B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period Demand Charge (per kW) $2.53 $5.31 $17.14 $15.23 $19.68 $20.54 Energy Charge (per kWh) 0.08218 0.06083 0.01661 0.01767 0.00351 0.00321 0.0020 0.10429 0.08371 Winter Period Demand Charge (per kW) $1.55 $4.80 $12.49 $9.04 $14.04 $13.84 Energy Charge (per kWh) 0.06037 0.05281 0.01661 0.01716 0.00351 0.00321 0.0020 0.08249 0.07518 Minimum Bill ($/day) 16.3216 MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-4-G-2 dated 7-1-20149-10-2013 Sheet No E-4-G-2 2. 1000 kWh Block Purchase Option: Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $2.53 $5.31 $17.14 $15.23 $19.68 $20.54 Energy Charge (per kWh) 0.08218 0.06083 0.01661 0.01767 0.00351 0.00321 0.10229 0.08371 Palo Alto Green Charge (per 1000 kWh block) $2.00 Winter Period Demand Charge (per kW) $1.55 $4.80 $12.49 $9.04 $14.04 $13.84 Energy Charge (per kWh) 0.06037 0.05281 0.01661 0.01716 0.00351 0.00321 0.08049 0.07518 Palo Alto Green Charge (per 1000 kWh block) $2.00 Minimum Bill ($/day) 16.3216 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges, and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-4-G-3 dated 7-1-20149-10-2013 Sheet No E-4-G-3 Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter, which does not reset after a definite time interval, may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays. 4. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has dropped below 200 kilowatts for four consecutive months. When such Metering is installed, the monthly Electric bill will include a “Power Factor Adjustment”, if applicable. The adjustment will be applied to a Customer’s bill prior to the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent or (1/4) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt- hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 5. Changing Rate Schedules MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-4-G-4 dated 7-1-20149-10-2013 Sheet No E-4-G-4 Customers may request a rate schedule change at any time to any applicable full-service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. 6. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewal sources, and creates a transparent and sustainable market that encourages new development of wind and solar. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. 7. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving a discount hereunder and affected by such change. The Customer then has the option to change the system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. MEDIUM COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-4-G-5 dated 7-1-20149-10-2013 Sheet No E-4-G-5 b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters: A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit: (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions: (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} LARGE COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-1 dated 2-5-20137-1-2009 Sheet No E-7-1 A. APPLICABILITY: This schedule applies to Demand metered secondary Service for commercial Customers with a Maximum Demand of at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months. B. TERRITORY: This rate schedule applies anywhere the City of Palo Alto provides Electric Service. C. RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (kW) $6.42 $2.50 $12.55 $15.85 $18.97 $18.34 Energy Charge (kWh) 0.05662 0.08311 0.01825 0.00087 0.00321 0.00351 0.07808 0.08749 Winter Period Demand Charge (kW) $5.50 $1.53 $6.04 $14.11 $11.54 $15.65 Energy Charge (kWh) 0.04990 0.05804 0.01898 0.00087 0.00321 0.00351 0.07209 0.06242 Minimum Bill ($/day) 48.5054 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. LARGE COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-2 dated 2-5-20137-1-2009 Sheet No E-7-2 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the summer and in the winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Request for Service Qualifying Customers may request Service under this schedule for more than one account or one meter if the accounts are on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing address. 4. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type Demand meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. 5. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option to install applicable LARGE COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-3 dated 2-5-20137-1-2009 Sheet No E-7-3 metering to calculate a Power Factor. The City may remove such metering from the Service of a Customer whose Demand has been below 200 kilowatts for four consecutive months. When such metering is installed, the monthly Electric bill shall include a “Power Factor Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent (0.25%) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month. Where time-of-day metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 6. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. 7. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving a discount hereunder and affected by such change. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue meter and that occasionally require backup power from the City due to non-operation of the non- LARGE COMMERCIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-4 dated 2-5-20137-1-2009 Sheet No E-7-4 utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 Winter Period $0.72 $6.04 $6.76 c. Meters. A separate meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand (as defined in Section D.4) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4) , as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-TOU-1 dated 2-5-20137-1-2009 Sheet No E-7-TOU-1 A. APPLICABILITY: This voluntary rate schedule applies to Demand metered secondary Service for commercial customers with a Maximum Demand of at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months. In addition, this rate schedule is applicable for customers who did not pay Power Factor Adjustments during the last 12 months. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) Peak $4.24 $1.48 $8.25 $5.33 $12.49 $6.80 Mid-Peak 2.06 0.51 4.13 5.33 6.19 5.84 Off-Peak 1.17 0.51 2.06 5.33 3.23 5.84 Energy Charge (per kWh) Peak $0.07029 $0.09267 $0.02296 $0.00087 $0.00321 $0.00351 $0.09646 $0.09705 Mid-Peak 0.05867 0.08792 0.01901 0.00087 0.00321 0.00351 0.08089 0.09230 Off-Peak 0.04870 0.07705 0.01567 0.00087 0.00321 0.00351 0.06758 0.08143 Winter Period Demand Charge (per kW) Peak $3.04 $0.78 $3.38 $7.15 $6.42 $7.92 Off-Peak 1.59 0.78 1.68 7.15 3.27 7.92 LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-TOU-2 dated 2-5-20137-1-2009 Sheet No E-7-TOU-2 Energy Charge (per kWh) Peak $0.05617 $0.06009 $0.02142 $0.00087 $0.00321 $0.00351 $0.08080 $0.06447 Off-Peak 0.04663 0.05643 0.01767 0.00087 0.00321 0.00351 0.06751 0.06081 Minimum Bill ($/day) 48.5054 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Definition of Time Periods SUMMER PERIOD (Service from May 1 to October 31): Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays) Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays) 6:00 p.m. to 9:00 p.m. Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday All day Saturday, Sunday, and holidays WINTER PERIOD (Service from November 1 to April 30): Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-TOU-3 dated 2-5-20137-1-2009 Sheet No E-7-TOU-3 holidays) All day Saturday, Sunday, and holidays HOLIDAYS: “Holidays” for the purposes of this rate schedule are New Years Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, and Christmas Day. The dates will be those on which the holidays are legally observed. SEASONAL RATE CHANGES: When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Request for Service Qualifying customers may request Service under this schedule for more than one account or one meter if the accounts are on one site. A site shall be defined as one or more utility accounts serving contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and have a common billing address. 4. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Demand meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated Time periods as defined under Section D.2. 5. Power Factor Adjustment Time of Use customers must not have had a Power Factor Adjustment assessed on their Service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt- ampere hours consumed during the month, and must not have fallen below 95% to avoid the Power Factor Adjustment. Should the City of Palo Alto Utilities Department find that the Customer’s Service should be LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-TOU-4 dated 2-5-20137-1-2009 Sheet No E-7-TOU-4 subject to Power Factor Adjustments, the Customer will be removed from the E-7-TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 6. Changing Rate Schedules Customers electing to be served under E-7 TOU must remain on said schedule for a minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer may request a rate schedule change to any applicable City of Palo Alto full-service rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 7. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be allowed provided the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving a discount hereunder and affected by such change. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 LARGE COMMERCIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20162-5-2013 Supersedes Sheet No E-7-TOU-5 dated 2-5-20137-1-2009 Sheet No E-7-TOU-5 Winter Period $0.72 $6.04 $6.76 c. Meters. A separate meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4) , as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-1 dated 7-1-20149-10-2013 Sheet No E-7-G-1 A. APPLICABILITY: This schedule applies to Demand Metered Service for large commercial Customers who choose Service under the Palo Alto Green Program. A Customer may qualify for this rate schedule if the Customer’s Maximum Demand is at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period Demand Charge ( per kW) $2.50 $6.42 $15.85 $12.55 $18.34 $18.97 Energy Charge (per kWh) 0.08311 0.05562 0.00087 0.01825 0.00351 0.00321 0.0020 0.08949 0.07908 Winter Period Demand Charge (per kW) $1.53 $5.50 $14.11 $6.04 $15.65 $11.54 Energy Charge (per kWh) 0.05804 0.04990 0.00087 0.01898 0.00351 0.00321 0.0020 0.06442 0.07409 Minimum Bill ($/day) 48.5054 LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-2 dated 7-1-20149-10-2013 Sheet No E-7-G-2 2. 1000 kWh Block Purchase Option: Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $2.50 $6.42 $15.85 $12.55 $18.34 $18.97 Energy Charge (per kWh) 0.08311 0.05562 0.00087 0.01825 0.00351 0.00321 0.08749 0.07708 Palo Alto Green Charge (per 1000 kWh block) $2.00 Winter Period Demand Charge (per kW) $1.53 $5.50 $14.11 $6.04 $15.65 $11.54 Energy Charge (per kWh) 0.05804 0.04990 0.00087 0.01898 0.00351 0.00321 0.06242 0.07209 Palo Alto Green Charge (per 1000 kWh block) $2.00 Minimum Bill ($/day) 48.5054 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-3 dated 7-1-20149-10-2013 Sheet No E-7-G-3 Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays. 4. Request for Service Qualifying Customers may request Service under this schedule for more than one Account or one Meter if the Accounts are at one site. A site shall be defined as one or more utility Accounts serving contiguous parcels of land with no intervening public right- of-ways (e.g. streets) and have a common billing address. 5. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has dropped below 200 kilowatts for four consecutive months. When such Metering is installed, the monthly Electric bill shall include a “Power Factor Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent or (1/4) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-4 dated 7-1-20149-10-2013 Sheet No E-7-G-4 The monthly Power Factor is the average Power Factor based on the ratio of kilowatt- hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 6. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile 7. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewal sources, and creates a transparent and sustainable market that encourages new development of wind and solar. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. 8. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be allowed; provided, however, the City is not required to supply Service at a qualified line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's Electrical requirements. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving a discount hereunder and affected by such change. The Customer then has the option to change the system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 9. Standby Charge LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-5 dated 7-1-20149-10-2013 Sheet No E-7-G-5 a. Applicability: The standby charge, subject to the exemptions in subsection D(9)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 Winter Period $0.72 $6.04 $6.76 c. Meters: A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit: (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions: (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. LARGE COMMERCIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2014 Supersedes Sheet No E-7-G-6 dated 7-1-20149-10-2013 Sheet No E-7-G-6 {End} STREET LIGHTS UTILITY RATE SCHEDULE E-14 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-01-2009 Supersedes Sheet No. E-14-1 dated 7-01-20097-01-2008 Sheet No. E-14-1 A. APPLICABILITY: This schedule applies to all street and highway lighting installations owned by any governmental agency other than the City of Palo Alto. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. C. RATES: Per Lamp Per Month Class A: Utility supplies energy and switching service only. kWh's Per Month Burning Schedule: All Night/Midnight All Night Midnight Lamp Rating: Mercury-Vapor Lamps 100 watts 42/20 $ 12.08 $ 8.92 175 watts 68/35 14.41 11.23 400 watts 154/71 29.66 22.87 High Pressure Sodium Vapor Lamps 120 volts 70 watts 29/15 10.59 7.43 100 watts 41/20 14.19 10.36 150 watts 60/30 18.43 15.48 240 volts 70 watts 34/17 11.85 8.92 100 watts 49/25 15.488.59 11.23 150 watts 70/35 18.43 12.72 200 watts 90/45 20.5515.87 16.31 250 watts 110/55 23.3219.50 16.51 310 watts 134/167 27.3224.13 21.60 400 watts 167/84 33.4731.07 24.78 Fluorescent Lamps 40 watts 15/8 4.46 3.60 STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2016 Supersedes Sheet No. E-14-2 dated 7-1-2009 Sheet No. E-14-2 Per Lamp Per Month -– Class C: Utility supplies energy and switching service and maintains entire system, including lamps and glassware. kWh's Per Month Burning Schedule: All Night/Midnight All Night Midnight Lamp Rating: Mercury-Vapor Lamps 100 watts 42/20 $ 13.56 $ 10.36 175 watts 68/35 16.31 12.91 250 watts 97/49 20.32 15.70 400 watts 154/71 30.2932.58 23.32 Incandescent Lamps 189 watts (2,500 L) 65/32 14.41 11.46 295 watts (4,000 L) 101/5 18.43 14.41 405 watts (6,000 L) 139/70 23.32 19.27 620 watts (10,000 L) 212/106 32.42 26.88 Fluorescent Lamps 25 watts 12/6 5.30 4.04 40 watts 15/8 5.49 4.46 55 watts 18/9 6.36 4.68 High Pressure Sodium Vapor Lamps 120 volts 70 watts 29/15 11.02 7.84 100 watts 41/20 14.82 10.81 150 watts 60/30 19.06 15.91 240 volts 70 watts 34/17 12.2928.61 9.33 100 watts 49/25 16.0930.79 11.85 150 watts 70/35 19.0634.43 13.35 200 watts 90/45 21.18 16.94 250 watts 110/55 23.7441.70 17.38 STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2016 Supersedes Sheet No. E-14-2 dated 7-1-2009 Sheet No. E-14-2 Light Emitting Diode (LED) Lamps 70 watts-equivalent 23.79 100 watts-equivalent 25.44 150 watts-equivalent 26.96 250 watts 31.12 STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-01-2009 Supersedes Sheet No. E-14-2 dated 7-1-20097-01-2008 Sheet No. E-14-2 STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2009 Supersedes Sheet No. E-14-4 dated 7-1-20097-1-2008 Sheet No. E-14-4 D. SPECIAL CONDITIONS: 1. Type of Service: This schedule is applicable to series circuit and multiple street lighting systems to which the Utility will deliver current at secondary voltage. Unless otherwise agreed, multiple current will be delivered at 120/240 volts, three-wire, single-phase. In certain localities the Utility may supply service from 120/208 volt star-connected poly-phase lines in place of 240-volt service. Single phase service from 480-volt sources will be available in certain areas at the option of the Utility when this type of service is practical from the Utility's engineering standpoint. All currents and voltages stated herein are nominal, reasonable variations being permitted. New lights will normally be supplied as multiple systems. 2. Point of Delivery: Delivery will be made to the customer's system at a point or at points mutually agreed upon. The Utility will furnish the service connection to one point for each group of lamps, provided the customer has arranged his system for the least practicable number of points of delivery. All underground connections will be made by the customer or at the customer's expense. 3. Switching: Switching will be performed by the Utility (on the Utility's side of points of delivery) and no charge will be made for switching provided there are at least 10 kilowatts of lamp load on each circuit separately switched, including all lamps on the circuit whether served under this schedule or not; otherwise, an extra charge of $2.50 per month will be made for each circuit separately switched unless such switching installation is made for the Utility's convenience or the customer furnishes the switching facilities and, if installed on the Utility's equipment, reimburses the Utility for installing and maintaining them. 4. Annual Burning Schedule: The above rates apply to lamps which will be turned on and off once each night in accordance with a regular burning schedule agreeable to the customer but not exceeding 4,100 hours per year for all-night service and 2,050 hours per year for midnight service. 5. Maintenance: The rates under Class C include all labor necessary for replacement of glassware and for inspection and cleaning of the same. Maintenance of glassware by the Utility is limited to standard glassware such as is commonly used and manufactured in reasonably large quantities. A suitable charge will be made for maintenance of glassware of a type entailing unusual expense. Under Class C, the rates include maintenance of circuits between lamp posts and of circuits and equipment in and on the posts, provided these are all of good standard construction; otherwise, the Utility may decline to grant Class C rates. STREET LIGHTS UTILITY RATE SCHEDULE E-14 (Continued) CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-20167-1-2009 Supersedes Sheet No. E-14-4 dated 7-1-20097-1-2008 Sheet No. E-14-4 Class C rates applied to any agency other than the City of Palo Alto also include painting of posts with one coat of good ordinary paint as required to maintain good appearance but do not include replacement of posts broken by traffic accidents or otherwise. 6. Multilamp Electroliers: The above charges are made on per-lamp basis. For posts supporting one or more lamps, where the lamps are less than nine feet apart, the above charges for Class C will be reduced by 6 percent (6%) computed to the nearest whole cent, for all lamps other than the first one. 7. Operating Schedules Other Than All-Night and Midnight: Rates for regular operating schedules other than all-night and midnight will be the midnight rates plus or minus one-eleventh of the difference between the midnight and the all-night rate, computed to the nearest whole cent, for each half hour per night more or less than midnight service. This adjustment will apply only to lamps on regular operating schedules which do not exceed 4,500 hours per year. 8. Street Light Lamps, Standard and Nonstandard Ratings: The rates for incandescent lamps under Class A are applicable for service to regular street lamps only and must be increased by 6 percent, computed to the nearest whole cent, for service to group-replacement street lamps. The rates under Class C are applicable to both regular and group-replacement street lamps. 9. Continuous Operation: The rate for continuous 24-hour operation under Class A service will be twice the all-night rate. 10. . System Owned In-Part by Utility : Where, at customer's request, the Utility installs, owns, and maintains any portion of the lighting fixtures, supports, and/or interconnecting circuits, an extra monthly charge of one and one-fourth percent of the Utility's estimate of additional investment shall be made. 11. Rates For Lamps Not on Schedule: In the event a customer installs a lamp which is not presently represented on this schedule, the Utility will prepare an interim rate reflecting the Utility's estimated costs associated with the specific lamp size. This interim rate will serve as the effective rate for billing purposes until the new lamp rating is added to Schedule E-14. {End} UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E-16 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-201610-16-2012 Supersedes Sheet No.E-16-3 dated 10-16-20127-26-2011 Sheet No. E-16- 1 A. APPLICABILITY: This rate schedule is applicable under the terms and conditions of the City of Palo Alto Utilities Department to Customers who contract with the City for unmetered electric service for billboards, unmetered telephone services, telephone booths, railroad signals, cathodic protection units, traffic cameras, wireless antenna and related equipment, community antenna television and video systems, cable TV power supplies, and automatic irrigation systems and also applies to other miscellaneous Electric Utility fees to various public agencies and private entities. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and land owned or leased by the City. C. NET MONTHLY BILL: 1. Customer Charge: ............ $9.00 per month 2. Energy Charge: (for all kWh supplied) using Electric Rate Schedule E2 plus all applicable riders 3. Minimum Charge: Minimum monthly charge will be the Customer Charge. D. DETERMINATION OF ENERGY REQUIREMENTS: a. Initial Inventory Customer shall enter into a contract for service under this Schedule and provide a written inventory of all equipment at each of service requested, including the type and nameplate rating for each piece of equipment. The billing energy for each point of service will be determined by the Utilities Electric Engineering Division estimation of the kWh usage based on the type, rating and quantity of the equipment provided by the Customer. Monthly bill will be based on the following calculations: 1. Total Wattage. 2. Total Wattage times estimated annual operating hours as set in the contract equals annual watt hours. 3. Annual watt hours divided by 1000 hours equals annual kilowatt hours (kWh) UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E-16 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-201610-16-2012 Supersedes Sheet No.E-16-3 dated 10-16-20127-26-2011 Sheet No. E-16- 2 4. Annual kWh divided by twelve (12) months equal monthly kWh. 5. Monthly kWh times current rate per kWh = monthly bill for each unmetered service location or equipment. b. Updating Inventory Customer will update its inventory by informing the Utilities Electric Engineering Division in writing of changes in type, rating and/or quantity of equipment as such changes occur, and billings will be adjusted accordingly. Upon Utilities Electric Engineering Division request, but no later than the one year anniversary of the date on which Customer first takes service, Customer shall provide an updated inventory of all equipment at each point of service. c. Test Metering The Utilities Electric Engineering Division may, at its discretion, test meter the load at various types and ratings of the Customer’s equipment to the extent necessary to verify the estimated kWh usage used for billing purpose and, where dictated by such test metering, Utilities Electric Engineering Division will make prospective adjustments in estimated usage for subsequent billing purposes; however, Utilities shall be under no obligation to test meter- the load of Customer’s equipment. Utilities’ decision not to test meter the load of Customer’s equipment shall not release Customer from the obligation to provide to Utilities Electric Engineering Division, and to update, annually as provided in section b, an accurate inventory of the types, rating and quantities of equipment upon which billing is based. d. Inspection The Utilities Electric Engineering Division shall endeavor to inspect the equipment at each point of service annually as close to the anniversary date of the contract as is practical, and make prospective adjustments in billing as indicated by such inspections; however, Utilities shall be under no obligation to conduct such inspections for the purpose of determining accuracy of billing or otherwise. Utilities decisions not to conduct such inspections shall not release Customer from the obligation to provide to Utilities Electric Engineering Division, and to update, an accurate inventory of the types, rating and quantities of equipment upon which billing is based. e. Billing for Service As the service described in this schedule is unmetered, Customer agrees to pay amounts billed in accordance with the current inventory, regardless of whether any of the installations of the Customer’s equipment were electrically operable during the period in UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E-16 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-201610-16-2012 Supersedes Sheet No.E-16-3 dated 10-16-20127-26-2011 Sheet No. E-16- 3 question and regardless of the cause of such equipment failure to operate. E. MISCELLANEOUS RATES: Service Description Rate * 1. Traffic Signal maintenance and energy costs (A) Controller $522.26 ea (B) 8" Lamp (LED) $1.85 ea (C) 12" & PVH Lamp (LED) $2.16 ea (D) Pedestrian Head (LED) $5.58 ea (E) Vehicle, System and Bike Sensor Loop $43.22 ea 21. License Fee for Electric Conduit Usage (A) Exclusive use $1.94/ft/yr (B) Non-Exclusive use $0.97/ft/yr 32. Processing Fee for Electric Conduit Usage Actual Cost 43. License Fee for Utility Pole Attachments (A) 1 ft. of usable space $29.59/pole/yr (B) 2 ft. of usable space $32.39/pole/yr (C) 3 ft. of usable space $35.18/pole/yr (D) 4 ft. of usable space $37.98/pole/yr 54. Processing Fee for Utility Pole Attachments $55.00/pole 65. License Fee for mounting communication equipment including distributed antenna systems on utility poles $270.00/pole/yr * Rates are monthly unless otherwise indicated. F. NOTES: The fees set forth in Section E.1 through E.65, inclusive, are subject to adjustment annually in accordance with fluctuations in the Consumer Price Index (CPI), if any. The base for computing UNMETERED ELECTRIC SERVICE UTILITY RATE SCHEDULE E-16 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-201610-16-2012 Supersedes Sheet No.E-16-3 dated 10-16-20127-26-2011 Sheet No. E-16- 4 the adjustment is the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland-San Jose MSA, which is published by the U.S. Department of Labor, Bureau of Labor Statistics for the month of December of a base year, which falls within the year in which a master license agreement is signed by the City and the licensee. The adjustment shall be calculated, if there is an increase or decrease between December of a base year (when the rate(s) is/are first applicable) and December of any subsequent base year. {End} Attachment A *NOT YET APPROVED * 6053681 Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving the FY 2017 Gas Utility Financial Plan R E C I T A L S A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby adopts the FY 2017 Gas Utility Financial Plan. SECTION 2. The Council hereby approves the transfer of $1.5 million in FY 2016 from the Rate Stabilization Reserve to the Operations Reserve, as described in the FY 2017 Gas Utility Financial Plan approved via this resolution. SECTION 3. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ CMR #6932: ATTACHMENT E Attachment A * NOT YET APPROVED * 6053681 City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services     FY 2017 GAS   UTILITY  FINANCIAL PLAN  FY 2017 TO FY 2026       GAS UTILITY FINANCIAL PLAN  April 12, 2016  2 | Page    GAS UTILITY FINANCIAL PLAN  FY 2017 TO FY 2026    TABLE OF CONTENTS  Section 1: Definitions and Abbreviations ................................................................................. 4  Section 2: Executive Summary and Recommendations ............................................................ 5  Section 2A: Overview of Financial Position .................................................................................. 5  Section 2B: Summary of Proposed Actions .................................................................................. 6  Section 3: Detail of FY 2017 Rate and Reserve Proposals ......................................................... 6  Section 3A: Rate Design ............................................................................................................... 6  Section 3B: Current and Proposed Rates ..................................................................................... 6  Section 3C: Bill impact of Proposed Rate Changes ...................................................................... 8  Section 3D: Proposed Reserve Transfers ..................................................................................... 8  Section 4: Utility Overview ...................................................................................................... 9  Section 4A: Gas Utility History ..................................................................................................... 9  Section 4B: Customer Base ........................................................................................................ 10  Section 4C: Distribution System ................................................................................................. 11  Section 4D: Cost Structure and Revenue Sources ...................................................................... 12  Section 4E: Reserves Structure ................................................................................................... 12  Section 4F: Competitiveness ...................................................................................................... 13  Section 4G: Gas Supply Rates .................................................................................................... 14  Section 5: Utility Financial Projections ................................................................................... 15  Section 5A: Load Forecast .......................................................................................................... 15  Section 5A: FY 2011 to FY 2015 Cost and Revenue Trends ........................................................ 16  Section 5B: FY 2015 Results ....................................................................................................... 17  Section 5C: FY 2016 Projections ................................................................................................. 18  Section 5D: FY 2017‐FY 2026 Projections .................................................................................. 18  Section 5E: Risk Assessment and Reserves Adequacy ............................................................... 19  GAS UTILITY FINANCIAL PLAN  April 12, 2016  3 | Page    Section 5F: Alternate Scenarios ................................................................................................. 21  Section 5G: Long‐Term Outlook ................................................................................................. 22  Section 6: Details and Assumptions ....................................................................................... 24  Section 6A: Gas Purchase Costs ................................................................................................. 24  Section 6B: Operations .............................................................................................................. 25  Section 6C: Capital Improvement Program (CIP) ....................................................................... 26  Section 6D: Debt Service ............................................................................................................ 28  Section 6E: Equity Transfer ........................................................................................................ 29  Section 6F: Revenues ................................................................................................................. 29  Section 6G: Communications Plan ............................................................................................. 30  Appendices ............................................................................................................................ 32  Appendix A: Gas Financial Forecast Detail ................................................................................ 33  Appendix B: Gas Utility Capital Improvement Program (CIP) Detail ......................................... 34  Appendix C: Gas Utility Reserves Management Practices ......................................................... 36  Appendix D: Description of Gas Utility Cost Categories ............................................................ 40  Appendix E: Gas Utility Communications Samples .................................................................... 41         GAS UTILITY FINANCIAL PLAN  April 12, 2016  4 | Page    SECTION 1: DEFINITIONS AND ABBREVIATIONS  ABS: Acrylonitirile butydene styrene, a plastic gas main material  CARB: California Air Resources Board  CIP: Capital Improvement Program  CNG: Compressed Natural Gas   CPAU: City of Palo Alto Utilities Department  CPUC: California Public Utilities Commission  Cross‐bore: A cross‐bore exists when one utility line has been drilled or “bored” through a  portion of another line. Gas cross‐bores can occur in sewer lines as a result of “horizontal  boring” construction practices.   Distribution: transportation of gas to customers.  GMR Program: Gas Main Replacement Program  Local Transportation: transportation of gas to Palo Alto across PG&E’s distribution system from  PG&E City Gate.  Malin: a delivery hub referred to in gas purchase contracts and located in Malin, Oregon, where  the northern end of PG&E’s Redwood Transmission Pipeline is located.  MMBtu: Millions of British thermal units, a unit of gas measurement equal to ten therms.  Commonly used for high volume gas measurement. Wholesale purchases of gas from suppliers  are typically measured in MMBtu.  O&M: Operations and Maintenance  PE or HDPE: Polyethylene, a gas main material (more specifically, High‐Density Polyethylene)  PG&E: Pacific Gas and Electric  PG&E Citygate, or Citygate: a delivery hub referred to in gas purchase contracts. Any gas  delivered to PG&E’s distribution system (such as gas delivered at the southern end of PG&E’s  Redwood Transmission Pipeline) is said to have been delivered at PG&E Citygate.  PVC: Polyvinyl chloride, a plastic gas main material  Summer: April 1 to October 31  Therms: The standard unit of measurement for natural gas sales to customers, equal to 100,000  British thermal units. Therms measure the heating value of the gas, rather than its volume.   Transmission: transportation of gas between major gas delivery hubs via a gas transmission  pipeline, such as PG&E’s Redwood pipeline.   UAC: Utilities Advisory Commission, an appointed body that advises the City Council on CPAU  issues.   Winter: November 1 to March 31     GAS UTILITY FINANCIAL PLAN  April 12, 2016  5 | Page    SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS  This document presents a Financial Plan for the City’s Gas Utility for the next ten years. This  Financial Plan provides revenues to cover the costs of operating the utility safely over that time  while adequately investing for the future. It also addresses the financial risks facing the utility  over the short term and long term, and includes measures to mitigate and manage those risks.  SECTION 2A: OVERVIEW OF FINANCIAL POSITION  From FY 2017 through FY 2026, non‐commodity costs are projected to increase at roughly 3.5%  per year. In the short term, some of these costs are related to the cross‐bore inspection  program, as well as cap‐and‐trade allowance purchase costs. In addition, capital improvement  program (CIP) costs have increased as the economy has improved, and CPAU is also planning  new gas main replacement projects after completing a large multi‐year gas main replacement  project. The Gas Utility expenses over the period of this financial plan are shown in Table 1  below.  Table 1: Gas Utility Expenses for FY 2015 to FY 2026 (Thousand $’s)  Expenses  ($000)  FY  2015  (act.)  FY  2016  (est.)  FY  2017  FY  2018  FY  2019  FY  2020  FY  2021  FY  2022  FY  2023  FY  2024  FY  2025  FY  2026  Commodity costs 10,519 9,258 12,337 13,293 13,770 14,338 14,834 15,380 16,013 16,600 17,178 17,613 Operations 18,529 19,738 21,792 22,443 23,541 23,548 24,535 25,553 26,631 27,755 28,929 30,257  Capital Projects 1,832 6,889 6,305 5,985 6,115 6,301 6,488 6,680 6,879 7,083 7,293 7,509  TOTAL 30,881 35,886 40,434 41,721 43,426 44,188 45,857 47,613 49,522 51,438 53,400 55,380  To ensure that revenues cover these rising costs, the financial plan includes the rate trajectory  shown in Table 2. There was no rate increase in FY 2016 since new gas main replacement  projects were not added in FY 2014 and FY 2015 in order to complete a multi‐year project to  replace the last of the ABS plastic mains in Palo Alto. An 8% increase is projected for FY 2017,  followed by 9% and 7% increases for FY 2018 and FY 2019. An 8% increase in FY 2017 is  equivalent to $2.52 per month for the median residential customer’s monthly gas bill, based on  commodity prices as of February 2016.  Table 2: Projected Gas Rate Trajectory for FY 2017 to FY 2026  Projection FY     2017  FY     2018 FY     2019 FY     2020 FY     2021 FY  2022 FY  2023  FY  2024  FY  2025 FY  2026 Current Financial Plan 8% 9% 7% 4% 1% 1% 1% 1% 1% 1%  FY 2016 Financial Plan 7% 4% 4% 4% 3% 3% N/A N/A N/A N/A  The Gas Rate Stabilization Reserve is used to smooth rate increases over several years. This  Financial Plan projects that these reserves will be exhausted by the end of FY 2017. The Gas CIP  Reserve can be used to offset one‐time unanticipated capital costs. Table 3 shows the projected  reserve transfers over the forecast period.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  6 | Page    Table 3: Transfers To/(From) Reserves for FY 2016 to FY 2026 ($000)  Reserve FY 2016 FY 2017 FY 2018 to FY 2026  Rate Stabilization (1,531) (5,275) ‐  Operations 1,531 5,275 ‐  SECTION 2B: SUMMARY OF PROPOSED ACTIONS  Staff proposes the following actions for the Gas Utility in FY 2016:  1. Amend the $3.4 million transfer proposed in the FY 2016 Gas Financial Plan to $1.5  million, based on ending Operations Reserve levels.   Staff proposes the following actions for the Gas Utility in FY 2017:  2. Increase rates as shown in Section 3B: Current and Proposed Rates. These changes are  projected to increase rates by 8%, assuming monthly commodity prices are constant.  However, should commodity prices rise, relative bill increases will be higher, and  conversely lower if commodity prices should fall.   3. Transfer $5.3 million from the Rate Stabilization Reserve to the Operations Reserve. See  Section 3B: Current and Proposed Rates for more details.  SECTION 3: DETAIL OF FY 2017 RATE AND RESERVE PROPOSALS  SECTION 3A: RATE DESIGN  The Gas Utility’s rates are evaluated and implemented in compliance with cost of service  requirements. The Gas Utility’s current rates are based on the methodology from the April 2012  Gas Utility Cost of Service Study completed by Utility Financial Solutions1. Staff tentatively plans  to review this cost of service study in the next year or two unless any major changes occur to  the utility’s operations or customer base that would necessitate an earlier study. Before any  such update, staff will review current rates and the scope of the study with the UAC and Council  to determine UAC and Council policy priorities.  SECTION 3B: CURRENT AND PROPOSED RATES  On July 1, 2012 CPAU restructured its rates so that the commodity component varied monthly  to match changes in gas market prices2. In addition, monthly service charges were increased to  recover the cost of providing gas service to customers. In January 2015, the Council adopted a  new rate component to collect the costs of purchasing allowances for the purpose of  compliance with the State’s cap‐and‐trade program3. This component will change depending on  the cost of allowances and gas demand. At the same time, two bill components (Local                                                          1 Staff Report 2812, 5/17/ 2012 http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=31395   2 Staff Report 2812, 5/17/2012: http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=31395   3 Staff Report 5397, 1/26/2015: https://www.cityofpaloalto.org/civicax/filebank/documents/45537  GAS UTILITY FINANCIAL PLAN  April 12, 2016  7 | Page    transportation and Administration) were collapsed into the Distribution rate to streamline bill  presentation.   CPAU has four rate schedules: one for separately metered residential customers (G‐1), one for  small commercial and master‐metered multi‐family residential customers (G‐2), one for  customers using over 250,000 therms per year (G‐3) and a specific schedules for the  Compressed Natural Gas station (G‐10). All customers pay a monthly service charge, which  represents meter reading, billing, and other customer service costs, as well as a portion of  operations and maintenance cost. All customers are also charged for each therm of gas used.  Separately metered residential customers are charged on a tiered basis, differentiated by  season. During the Winter months, the first 2 therms per day (60 therms for a 30 day billing  period) are charged a base price per CCF, and all additional units charged a higher price per  therm. During the Summer months, the first tier level is 0.667 therms per day, or 20 therms for  a 30 day billing period. Commercial customers pay a uniform price for each therm used.  Table 4 shows the current and proposed monthly service charges for all rate schedules. Table 9  shows the consumption charges related to distribution charges. As mentioned earlier,  commodity charges change monthly. Some recent commodity price history is discussed in  Section 6A: Gas Purchase Costs.  Table 4: Current and Proposed Monthly Service Charges  Rate Schedule  Monthly Service Charge ($/month) Change  Current (7/1/12) Proposed (7/1/16) $/mo %  G‐1 (Residential) $9.88 $10.32 $0.44 4.5%  G‐2 (Small Commercial) $74.86 $78.23 $3.37 4.5%  G‐3 (Large Commercial) $361.18 $377.43 $16.25 4.5%  G‐10 (CNG) $50.65 $52.93 $2.28 4.5%    Table 5: Current and Proposed Gas Distribution Charges   Current  (7/1/12)  Proposed  (7/1/16)  Change  $/Therm %  G‐1 (Residential)   Tier 1 Rates 0.4392 0.5021 0.0629 14.3%  Tier 2 Rates 0.9546 1.0407 0.0861 9.0%  G‐2 (Residential Master‐Metered and Small Commercial)   Uniform Rate 0.6147 0.6855 0.0708 11.5%  G‐3 (Large Commercial)   Uniform Rate 0.6071 0.6775 0.0704 11.5%  G‐10 (Compressed Natural Gas)  Uniform Rate 0.0509 0.0963 0.0454 89.2%    GAS UTILITY FINANCIAL PLAN  April 12, 2016  8 | Page    SECTION 3C: BILL IMPACT OF PROPOSED RATE CHANGES  Table 6 shows the impact of the proposed July 1, 2016 rate changes on the median residential  bill. The average increase is roughly 8% based on March 2016 commodity rates, but some  customers may see slightly higher or lower increases due to slight changes in the composition  of the utility’s costs, as well as prevailing market prices.  Table 6: Impact of Proposed Gas Rate Changes on Residential Bills  Usage  (Therms/month)  Bill under  Current Rates  Bill under  Proposed Rates  Change  $/mo. %  Winter (Using March 2016 commodity prices)  30        $ 29.67          $ 32.00   $ 2.33 8%  54 (median) 45.40 49.34 3.84 8%  80 72.96 78.89 5.94 8%  150 155.21 167.17 11.96 8%  Summer (Using July 2015 commodity prices)  10        $ 17.70          $ 18.77   $ 1.07 6%  18 (median) 23.95 25.52 1.57 7%  30 38.49 41.05 2.56 7%  45 57.95 61.80 3.85 7%  Table 7 shows the impact of the proposed July 1, 2016 rate changes on various representative  commercial customer bills.   Table 7: Impact of Proposed Gas Rate Changes on Commercial Bills  (Using March 2016 commodity prices)  Usage  (Therms/month)  Bill under Current  Rates  Bill under  Proposed Rates  Change  %  G‐2 (Residential Master‐Metered and Small Commercial)  500 492 531 8%  5,000 4,250 4,608 8%  10,000 8,426 9,137 8%  G‐3 (Large Commercial)  25,000 21,049 22,825 8%  50,000 41,736 45,272 8%  SECTION 3D: PROPOSED RESERVE TRANSFERS  In the FY 2016 Financial Plan, several transfers between reserves were discussed for FY 2016.  CIP related funds were transferred out of the Reappropriations Replacement into the CIP  Reserve, and $3.4 million was proposed to be transferred from the Rate Stabilization Reserve  into the Operations Reserve.   GAS UTILITY FINANCIAL PLAN  April 12, 2016  9 | Page    As lower expenses in FY 2015 resulted in higher ending reserve balances than initially projected,  staff recommends reducing the $3.4 million transfer from the Rate Stabilization Reserve in FY  2016 to $1.5 million, and proposes transferring $5.3 million in FY 2017. For FY 2016, staff  proposes a $3.4 million transfer from the Rate Stabilization Reserve. This transfer will exhaust  the Rate Stabilization Reserve, as planned for and discussed in Section 5E: FY 2017‐FY 2026  ProjectionsSection 4E: Reserves Structure, and is included in the financial projections in this  Financial Plan. It will enable CPAU to maintain adequate Operations Reserve levels while  moderating the pace of increase in gas rates. The impact of these transfers on reserves levels  can be seen in Appendix A: Gas Utility Financial Forecast Detail.  SECTION 4: UTILITY OVERVIEW  This section provides an overview of the utility and its operations. It is intended as general  background information and to help readers better understand the forecasts in Section 5:  Utility Financial Projections and Section 6: Details and Assumptions.  SECTION 4A: GAS UTILITY HISTORY  On September 22, 1917, the City of Palo Alto issued a bond to purchase the property of Palo  Alto Gas Company and continue it as a municipal enterprise. At the time, the system comprised  21 miles of mains, 1,900 meters, and was valued at $65,500. PG&E supplied the gas, which was  synthesized from coal at its Potrero facility. Almost immediately the City faced challenges.  Losses were at nearly 25% according to PG&E’s master meter, and PG&E had filed with the  Railroad Commission (the forerunner to today’s Public Utilities Commission) to increase rates  by nearly 72.5%. Despite these initial hurdles, Palo Alto’s system grew tremendously, and by  1924 revenues had exceeded those of the electric utility. Sales were such that the annual  reports of the time noted gas usage “appears to be greater than that of any other city in the  state, showing that gas is a very popular form of fuel in Palo Alto.”  Just prior to the acquisition  of the neighboring town of Mayfield’s gas system (centered around today’s California Avenue)  in 1929, the miles of main in service and customers connections had doubled.   Notable changes to the gas supply itself came in 1930, when PG&E ceased supplying purely  manufactured (or coal) gas from its Potrero Hill facility in San Francisco and instead switched to  natural gas. In 1935, a supplementary butane injection system (later retired) was purchased  from Standard Oil to mitigate large wintertime peaks. Gas sales were at 248,658 million cubic  feet (MCF) with 4,849 active services.  Early gas mains in Palo Alto were made of steel, but in the 1950s, like many other utilities, CPAU  switched to ABS plastic. CPAU switched to PVC plastic in the early 1970s, but around 100 miles  of ABS mains had already been installed. A 1990 evaluation of the system found a steadily  increasing rate of gas leaks associated with those mains, something that other gas utilities had  also been experiencing. To reduce leaks, CPAU accelerated its main replacement program from  7,000 feet (1.3 miles) of replacements per year to 20,000 feet (3.8 miles) per year. This would  enable the utility to replace all of its ABS and its most vulnerable steel and PVC mains with  GAS UTILITY FINANCIAL PLAN  April 12, 2016  10 | Page    polyethylene (PE) mains over the course of the following 36 years.4  As of 2015 the Gas Utility  had replaced approximately 99 miles of ABS, as well as some sections of steel where cathodic  protection was not effective. Current main replacement projects will target the last ~800 feet of  remaining ABS main as well as tackling PVC replacement. A PVC risk analysis to determine the  appropriate footage of annual PVC replacement for future CIP projects is currently being  conducted. This is an example of how local control of its Gas Utility has provided Palo Alto  residents with substantial benefits. During the 1990s and 2000s, while CPAU was increasing its  main replacement rate to ensure a robust gas distribution system, PG&E was underspending on  safety‐related infrastructure, according to a past audit.5    In the 1990s, while grappling with the issues surrounding its distribution system, CPAU was also  participating in major changes to the structure of the gas industry in California. Until 1988 CPAU  had a formal policy of setting its rates equal to PG&E’s rates and successfully did so with the  exception of one year in the mid‐1970s. At times this led to inadequate revenue (1974 to 1981)  as PG&E, the City’s only gas supplier, regularly filed requests with the CPUC to increase the  wholesale gas supply rates charged to the Gas Utility. In the 1990s, as the CPUC began  deregulating the natural gas industry in California, the Gas Utility began purchasing gas from  suppliers other than PG&E. In 1997 the CPUC adopted the “Gas Accord,”6 which enabled the  Gas Utility (along with other local transportation‐only customers) to obtain transmission rights  on PG&E’s Redwood transmission pipeline running from Malin, Oregon into California.   In 2000/2001 the California energy crisis occurred, causing major disruptions to the Gas Utility’s  supply costs. Wholesale gas prices rose over 500% between January 2000 and January 2001.  The Council approved drawing down reserves to provide ratepayer relief and, for two years  following the crisis, CPAU rates were above PG&E’s as reserves were replenished. In April 2001  the Council approved a hedging practice of buying fixed price gas one to three years into the  future. After reaching a low point in October 2001, prices continued to rise, and as a result the  CPAU hedging strategy frequently resulted in a wholesale supply cost advantage compared to  PG&E until prices began to decline steeply in mid‐2008. At that point the Gas Utility’s wholesale  supply costs became higher than market gas prices due to fixed price contracts entered into  prior to 2008. As a result the Gas Utility’s wholesale supply costs were higher than PG&E’s for  several years. In 2012 Council approved a plan to formally cease the hedging strategy and  purchase all gas on the short‐term (“spot”) markets. As of July 1, 2012, the commodity portion  of the gas rates changes every month based on the spot market gas price.  SECTION 4B: CUSTOMER BASE  CPAU’s Gas Utility provides natural gas service to the residents, businesses, and other gas  customers in Palo Alto. Close to 23,400 customers are connected to the natural gas system,  approximately 21,700 (93%) of which are residential and 1,700 (7%) of which are non‐ residential. Residential customers consume about 10 to 12 million therms of gas per year,                                                          4 Staff Report CMR:183:90. Infrastructure Review and Update, March 1, 1990  5 Focused Financial Audit of The Pacific Gas & Electric Company’s Gas Distribution Operations, Overland Consulting,  made available through a CPUC Administrative Law Judge’s ruling on A12‐11‐009/I13‐03‐007 on 5/31/2013  6 CPUC decision 97‐08‐055. Since then, the Gas Accord has been amended four times, with the most recent being  Gas Accord V, application A.09‐09‐013  GAS UTILITY FINANCIAL PLAN  April 12, 2016  11 | Page    roughly 45% of the gas sold, while non‐residential customers consume 55% (about 14 to 15  million therms). Residential customers use gas primarily for space heating (46% of gas  consumed) and water heating (42%), with the remainder consumed for other purposes such as  cooking, clothes drying, and heating pools and spas7. Non‐residential customers use gas for  space and water heating (73% of gas consumed), cooking (20%), and industrial processes (6%).8    The Gas Utility receives gas at the four receiving stations within Palo Alto where CPAU’s  distribution system connects with Pacific Gas and Electric’s (PG&E’s) system. These receiving  stations are jointly operated by CPAU and PG&E. CPAU purchases gas from a various natural gas  marketers, with PG&E providing only local transportation service (transportation from the  PG&E City Gate gas delivery hub to Palo Alto). CPAU also has transmission rights on PG&E’s  transmission pipeline from Malin, Oregon to PG&E City Gate, allowing it to purchase lower  priced gas at that location. CPAU does not produce or store any natural gas, and purchases gas  in the monthly and daily spot markets. The cost of the purchased gas is passed through directly  to customers through a rate adjuster that varies monthly with market prices. The cost of  purchased gas and PG&E local transportation service accounts for roughly one third of the  utility’s expenditures.  SECTION 4C: DISTRIBUTION SYSTEM  To deliver gas from the receiving stations to its customers, the utility owns 210 miles of gas  mains (which transport the gas to various parts of the city) and 23,400 gas services (which  connect the gas mains to the customers’ gas lines). These mains and services, along with their  associated valves, regulators, and meters, represent the vast majority of the infrastructure used  to deliver gas in Palo Alto. CPAU has an ongoing CIP to repair and replace its infrastructure over  time, the expense of which accounts for around 15 to 20% of the utility’s expenditures. Costs  for main replacements have been going up in recent years.   In addition to the CIP, the Gas Utility performs a variety of maintenance activities related to the  system, such as monitoring the system for leaks, testing and replacing meters, monitoring the  condition of steel pipe, and building and replacing gas services for buildings being built or  redeveloped throughout the city. The utility also shares the costs of other system‐wide  operational activities (such as customer service, billing, meter reading, supply planning, energy  efficiency, equipment maintenance, and street restoration) with the City’s other utilities. These  maintenance and operations expenses, as well as associated administration, debt service, rent,  and other costs, make up roughly half of the utility’s expenses. In addition to these ongoing  activities, CPAU has conducted a program to find and replace cross‐bores over the last several  years. Currently, $3 million is budgeted for the cross‐bore program over the next three years.  However, the ongoing cross‐bore investigation may require additional funding, or extend for  longer into the future, as the remaining sewer lines are more difficult to examine than the  majority of the wastewater collection system that has been examined to date.                                                             7 http://energyalmanac.ca.gov/naturalgas/overview.html   8 Source: Statewide Commercial End Use Study, California Energy Commission report, 2006. Statistics shown are  for end users in PG&E Climate Zone 4 (the Peninsula) where Palo Alto is located.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  12 | Page    Figure 2: Cost Structure (FY 2015)  60% 34% 6% Operations Gas Purchases Capital Figure 1: Revenue Structure (FY 2015)  95% 5% Sales of Gas Other Revenue SECTION 4D: COST STRUCTURE AND REVENUE SOURCES  As shown in Figure 1, the Gas  Utility receives 95% of its revenue  from sales of gas and the  remainder from capacity and  connection fees, interest on  reserves, and other sources.  Appendix A: Gas Utility Financial  Forecast Detail shows more detail  on the utility’s cost and revenue  structures.     As shown in Figure 2, in FY 2015,  gas purchase costs accounted for  roughly 34% of the Gas Utility’s  costs. This percentage can vary  widely from year to year, as this  cost is based upon market  purchases. Operational costs  represented roughly 60%, and  capital investment was  responsible for the remaining 6%.  The percentages for FY 2015 are  skewed by the fact that CIP,  which is normally about 20% of  expenses, was reduced in FY 2014  and FY 2015 to allow for a backlog  of projects to be completed.   SECTION 4E: RESERVES STRUCTURE  CPAU maintains six reserves for its Gas Utility to manage various types of contingencies. These  are summarized below, but see Appendix C: Gas Utility Reserves Management Practices for  more detailed definitions and guidelines for reserve management:   Reserve for Commitments: A reserve equal to the utility’s outstanding contract  liabilities for the current fiscal year. Most City funds, including the General Fund, have a  Commitments Reserve.   Reserve for Reappropriations: A reserve for funds dedicated to projects reappropriated  by the City Council, nearly all of which are capital projects. Most City funds, including  the General Fund, have a Reappropriations Reserve.    Capital Improvement Program (CIP) Reserve: The CIP reserve can be used to  accumulate funds for future expenditure on CIP projects and is anticipated to be empty  unless a major one‐time CIP expenditure is expected in future years. This CIP can also  GAS UTILITY FINANCIAL PLAN  April 12, 2016  13 | Page    act as a contingency reserve for the CIP. This type of reserve is used in other utility funds  (Electric, Water, and Wastewater Collection) as well.    Rate Stabilization Reserve: This reserve is intended to be empty unless one or more  large rate increases are anticipated in the forecast period. In that case, funds can be  accumulated to spread the impact of those future rate increases across multiple years.  This type of reserve is used in other utility funds (Electric, Water, and Wastewater  Collection) as well.   Operations Reserve: This is the primary contingency reserve for the Gas Utility, and is  used to manage yearly variances from budget for operational gas costs. This type of  reserve is used in other utility funds (Electric, Water, and Wastewater Collection) as  well.   Unassigned Reserve: This reserve is for any funds not assigned to the other reserves  and is normally empty.  SECTION 4F: COMPETITIVENESS  Table 8 presents winter and summer residential bills for Palo Alto and PG&E at several usage  levels for commodity rates in effect as of July 2015 (to illustrate a summer month bill) and  March 2016 (to illustrate a winter month bill). The annual gas bill for the median residential  customer for calendar year 2015 was $420.86, about 15% lower than the annual bill for a PG&E  customer with the same consumption. PG&E’s distribution rates for gas have increased  substantially to collect for needed system improvements for pipeline safety and maintenance.   The bill calculations for PG&E customers are based on PG&E Climate Zone X, an area which  includes the surrounding communities.   Table 8: Residential Monthly Natural Gas Bill Comparison ($/month)  Season  Usage  (therms) Palo Alto PG&E Zone X %  Difference  Winter  (March 2016)  30 31.25 40.23 ‐22%  (Median) 54 48.34 72.42 ‐33%  80 77.16 117.37 ‐34%  150 163.10 245.51 ‐34%  Summer  (Jul 2015)  10 17.75 12.47 42%  (Median) 18 24.04 22.60 6%  30 38.64 43.44 ‐11%  45 58.18  69.50 ‐16%  Table 9 shows the monthly gas bills for commercial customers for various usage levels for rates  in effect as of March 1, 2016.  Bills for CPAU customers at the usage levels shown are around 9%  lower for smaller commercial customers and 4 to 17% higher for larger commercial customers  than for PG&E customers. This is a substantial improvement over the calendar year 2013 bill  comparison, when commercial gas bills for CPAU customers were 27% to 44% higher than for  PG&E customers. This is primarily attributable to PG&E’s increased distribution rates as the  GAS UTILITY FINANCIAL PLAN  April 12, 2016  14 | Page    commodity rates for CPAU and PG&E are very similar, both being based on spot market gas  prices.  Table 9: Commercial Monthly Average Gas Bill Comparison (for Rates in Effect Feb. 1, 2016)  Usage (therms/mo)  Gas Bill ($/month) %  Difference  Palo Alto  PG&E  500 518 572 ‐9%  5,000 4,510 4,953 ‐9%  10,000 9,231 8,859 4%  50,000 44,711 38,104 17%  SECTION 4G: GAS SUPPLY RATES  Starting in July 2012, CPAU replaced a “laddering” hedging strategy for purchasing gas supplies  with a strategy to buy gas on the short‐term, or “spot” markets and pass the commodity cost to  customers on a monthly basis.  The actual commodity prices are shown in Figure 3.  As shown,  commodity prices have steadily fallen for the last two years.  Figure 3: Gas Commodity Rates from July 2012 through March 2016    GAS UTILITY FINANCIAL PLAN  April 12, 2016  15 | Page    SECTION 5: UTILITY FINANCIAL PROJECTIONS  SECTION 5A: LOAD FORECAST  Gas usage in Palo Alto is volatile, varying with both economic and weather conditions. As shown  in Figure 4, in the early 1970’s, gas purchases reached over 45 million therms per year. Usage  dropped dramatically in the 1976/1977 drought when customers saved significant amounts of  (hot) water by upgrading to efficient showerheads. During the 1980s and 90s average gas usage  was around 36 million therms per year. Usage dropped again in the early 2000’s. In FY 2001, gas  prices escalated during the California energy crisis and Palo Alto’s rates increased by nearly  200%. From 2003 to 2011, usage decreased by 2.3% mainly as a result of continued customer  investments in energy efficiency.   In FY 2015 an unusually warm winter, as well as ongoing drought, have again caused gas usage  to tumble to historic lows. Gas usage was 25.6 million therms in FY 2015.  Figure 4: Historic Gas Consumption    20 25 30 35 40 45 50 19 7 1 19 7 3 19 7 5 19 7 7 19 7 9 19 8 1 19 8 3 19 8 5 19 8 7 19 8 9 19 9 1 19 9 3 19 9 5 19 9 7 19 9 9 20 0 1 20 0 3 20 0 5 20 0 7 20 0 9 20 1 1 20 1 3 20 1 5 Th e r m s  (M i l l i o n s ) GAS UTILITY FINANCIAL PLAN  April 12, 2016  16 | Page    Gas consumption, as denoted by the dotted line in Figure 5, is projected to recover somewhat  and stay stable over the forecast period, although changes such as replacement of gas  appliances with electric appliances or customer behavior may result in lower long run usage.   Figure 5: Forecast Gas Consumption    SECTION 5A: FY 2011 TO FY 2015 COST AND REVENUE TRENDS  Figure 6 and Appendix A: Gas Utility Financial Forecast Detail how costs have changed during  the last five years as well as how they are projected to change over the next decade.   The annual expenses for the gas utility decreased substantially between 2011 and 2015 due to  lower gas sales. Market prices for gas supplies are shown in Figure 3 above. FY 2014 and 2015  were notable for a temporary hiatus in most CIP budgeting, to permit the completion of a  backlog of projects which had previously been budgeted for. This budgetary hold allowed for  backlogged gas main replacement projects to be started, which consumed capital reserves.  Starting in FY 2012, additional funding for gas cross‐bore inspections increased Operations  costs.  Revenues are below expenses, and the projected rate trajectory will bring revenues in line with  costs by FY 2019. As shown in Figure 6 below, revenues were below cost in FY 2011 and FY 2013  and are projected to be below cost in FY 2016. Reduced budgeting for new CIP in FY 2014 and  FY 2015, as well as the availability of relatively large reserves, forestalled the need for rate  increases until now. However, since Rate Stabilization Reserves are projected to be depleted by  FY 2017, the Gas Utility must increase rates to cover costs.    As shown in Figure 6, the last gas rate adjustment was in July 2012 when rates were increased  by 12%.  However, this was at the same time that the commodity rates were changed to a  market‐based, monthly pass‐through cost—and commodity rates (and usage) fell, so revenues  actually declined in FY 2013 after the rate increase.  20 22 24 26 28 30 32 34 36 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 20 2 1 20 2 2 20 2 3 20 2 4 20 2 5 20 2 6 Th e r m s  (M i l l i o n s ) GAS UTILITY FINANCIAL PLAN  April 12, 2016  17 | Page        Figure 6: Gas Utility Expenses, Revenues, and Rate Changes:  Actual Costs through FY 2015 and Projections through FY 2026    SECTION 5B: FY 2015 RESULTS  Sources of funds for FY 2015 were lower than projected by $4.8 million, but expenses related to  Purchases and Operations and Maintenance activities came in well below expected budget.  Total FY 2015 expenses were $30.9 million compared to projections of $34.9 million in the FY  2015 Financial Plan. Table 10 summarizes the variances from forecast.  Table 10: FY 2015, Actual Results vs. Financial Plan Forecast   Net Cost/(Benefit)Type of change  Sales revenues lower than forecast 5,427,000 Revenue decrease  Other revenues and interest were  higher than forecasted  (628,000) Revenue increase  Purchase costs  lower than forecast (3,212,000) Cost savings  Operations & maintenance, Customer  service and other savings  (760,000) Cost savings  Net Cost / (Benefit) of Variances $827,000   GAS UTILITY FINANCIAL PLAN  April 12, 2016  18 | Page    SECTION 5C: FY 2016 PROJECTIONS  Current projections indicate that sales revenues continue to be lower than forecast, at this time  projected to be $4.7 million. However, Purchase cost reductions of $4.2 million offset most of  this. Table 11 summarizes the current projected variances from FY 2016 Financial Plan.  Table 11: FY 2016, Projected Results vs. Financial Plan Forecast   Net Cost/ (Benefit) Type of change  Sales revenues lower than forecast 4,719,000 Revenue decrease  Purchase costs  lower than forecast (4,171,000) Cost savings  Operations & maintenance, Customer service and  other savings  (1,843,000) Cost savings  Capital improvement budgets higher  1,216,000 Cost increase  Other revenues and interest lower than forecasted 611,000 Revenue decrease  Net Cost / (Benefit) of Variances $531,000   SECTION 5D: FY 2017‐FY 2026 PROJECTIONS  As can be seen in Figure 6 above, costs for the Gas Utility are projected to rise in FY 2017, then  are projected to increase at a bit less than 3.5% per year through FY 2026. In Operations, this is  due to an additional $1 million for cross‐bore inspections (this expense is projected to continue  for at least three years), as well as general inflationary increases of around 2.6% per year.  Salaries and benefits expenses are projected to rise at nearly 4% per year, per the City’s Long  Range Financial Plan. CIP programs are projected to increase, then stabilize at around $6 million  per year in FY 2018, then grow at around 2% per year thereafter. Gas commodity costs are the  most variable component. At the time the budget was developed in December 2015, gas supply  prices were projected to increase by around 3 to 4% per year, but recently gas prices have hit  near record lows. Since this is a pass‐through cost to customers, the risk of these costs being  higher or lower than expected has a minimal impact on reserves.     As shown in Figure 7, the Rate Stabilization Reserves are projected to be depleted by FY 2017.      GAS UTILITY FINANCIAL PLAN  April 12, 2016  19 | Page    Figure 7: Gas Utility Reserves   Actual Reserve Levels for FY 2011 and Projections through FY 2026    SECTION 5E: RISK ASSESSMENT AND RESERVES ADEQUACY  The Gas Utility’s primary contingency reserve, the Operations Reserve, is projected to be right  at the approved minimum guideline level in FY 2018 and FY 2019, barring either short‐run  budget savings and/or larger future increases. Figure 8 shows the Operations Reserve  recovering to the target level by FY 2021 with the projected rate trajectory.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  20 | Page      Figure 8: Operations Reserve Adequacy      Forecast Operations Reserve levels also exceed the short‐term risk assessment for the Utility.  Table 12 summarizes the risk assessment calculation for the Gas Utility through FY 2021. The  same methodology is used for FY 2022 through FY 2026 as well. The risk assessment includes  the revenue shortfall that could accrue due to:   1. Lower than forecasted distribution sales revenue; and  2. An increase of 10% of planned system improvement CIP expenditures for the budget  year.  Table 12: Gas Risk Assessment ($000)   FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total non‐commodity revenue  $21,587 $24,256 $26,956 $28,370 $28,781 Max. revenue variance, previous ten years  16% 16% 16% 16% 16%  Risk of revenue loss $3,462 $3,890 $4,323 $4,549 $4,615  CIP Budget $5,076 $4,720 $4,811 $4,958 $5,105  CIP Contingency @10% $508 $472 $481 $496 $511  Total Risk Assessment value $3,969 $4,362 $4,804 $5,045 $5,126    Finally, the CIP Reserve was created at the end of FY 2015 to act as a contingency reserve for  capital improvement projects. Current guidelines state that the balance of this reserve should  fall between 12 and 24 months of budgeted CIP expense.   GAS UTILITY FINANCIAL PLAN  April 12, 2016  21 | Page    At the end of FY 2016, the sum of the CIP Reserve and existing Commitments was a bit below  $5 million, as shown in Figure 7. However, based upon FY 2016’s CIP budget, the minimum  reserve level is $6.9 million. As such, this reserve is technically below the minimum level, but  the Risk assessment reserve level for the Operations Reserve is also set to handle a 10%  increase to CIP costs should that arise. As such, staff does not recommend an additional  increase to rates to fund this reserve at this time. If any CIP funds budgeted in FY 2016 are not  used or committed by the end of the fiscal year, those funds flow to the Operations Reserve  and those funds could be used to fund the CIP reserve, so increasing rates for this contingency  is premature. Staff is in the process of reviewing this reserve and the appropriateness of the  current minimum and maximum guideline levels.    SECTION 5F: ALTERNATE SCENARIOS  At the UAC’s February 2016 meeting, it was suggested that staff prepare two alternate  scenarios for rate increases. The first (“Target”) scenario keeps the Operations Reserve at or  near the Target level throughout the forecast period as shown in Figure 9 below. The second  (“Minimum”) has no rate change in FY 2017 and lets the Operations Reserve stay at minimum  for five years as shown in Figure 10 below. Both options as well as the proposed rate  adjustments are shown in Table 13.   Table 13: Projected Gas Rate Trajectory for FY 2017 to FY 2026   FY     2017  FY     2018  FY     2019  FY     2020  FY     2021  FY  2022  FY  2023  FY  2024  FY  2025  FY  2026  Proposed 8% 9% 7% 4% 1% 1% 1% 1% 1% 1%  Target 8% 16% 2% 1% 1% 2% 2% 2% 2% 1%  Minimum 0% 24% 1% 1% 1% 4% 3% 1% 1% 1%    The Target scenario does not change the FY 2017 proposed rate increase, but a 16% rate  increase in FY 2018 would be needed to bring reserves to target levels. Figure 9 shows that the  Operations Reserve levels for the Target scenario.    The Minimum scenario avoids a rate increase in FY 2017, but requires a significant increase in  FY 2018 (24%). If sales are lower than expected or costs rise, then this rate increase would be  even higher.  Figure 10 shows that the Operations Reserve levels for the Minimum scenario.    Staff recommends an 8% gas rate increase in FY 2017 to moderate the rate increases that are  projected in FY 2018 while keeping the Gas Operations Reserve at healthy levels.                   GAS UTILITY FINANCIAL PLAN  April 12, 2016  22 | Page    Figure 9: Operations Reserve at Target    Figure 10: Operations Reserve at Minimum    SECTION 5G: LONG‐TERM OUTLOOK  In the longer term (5 to 35 years out) it is very difficult to predict the Gas Utility’s commodity  costs. A variety of long‐term trends could affect commodity costs either positively or negatively.  Continuing improvement in gas extraction technology, such as fracking, could continue to  create generous supplies of gas, but these technologies are also under greater scrutiny with  respect to their environmental impacts. On the demand side, a continued shift from coal to  natural gas for electricity generation or an increase in manufacturing in the U.S. might drive up  GAS UTILITY FINANCIAL PLAN  April 12, 2016  23 | Page    natural gas prices, but other factors, such as generally more mild winters, might drive gas  demand lower. It is also difficult to predict the magnitude of the additional cost impacts  associated with the State’s cap‐and‐trade program over the long term. In the face of this  uncertainty, CPAU is able to protect the financial position of the Gas Utility by continuing its  current strategy of passing these costs directly to its customers via month‐varying rate  adjustment mechanisms.  Future CIP investment needs for the Gas Utility may be lower than in the past, although costs  per foot for main replacement may increase substantially. The Gas Utility has replaced nearly all  of its ABS gas mains and its most problematic steel and PVC mains as well. The PE pipe being  used now is expected to have at least a fifty‐year lifetime, and there is growing evidence that it  may last much longer than that. This would result in lower CIP investment over the long term.  CPAU is considering performing a study in the near future to develop its future main  replacements priorities and strategy.  Long‐term state or local climate goals could also have a major impact on the Gas Utility. The  Global Warming Solutions Act, Assembly Bill 32 (AB32), set a goal of reducing greenhouse gas  (GHG) emissions to 1990 levels by 2020 and then maintaining those reductions. In its December  2007 Climate Protection Plan, the City set a goal of lowering emissions to 15% below 2005  levels by 2020. As a community Palo Alto achieved these goals in 2012 even with continued use  of natural gas for heating, cooking, and industrial processes. If stricter goals are enacted at the  state or local level, however, it could lead to “electrification”, or consumer switching from gas‐ using appliances to electric‐using appliances for heating, cooking and processes. If significant  amounts of electrification occurred, stranded investment and higher rates could be required as  the costs of the distribution system are recovered over a lower sales base. One example of a  stricter standard has been stated by the Governor—reducing GHG emissions to 80% below  1990 levels by 2050.9  This goal, or less ambitious interim state goals, would require legislation  to implement. But it is instructional that, in the recent discussion draft of its scoping plan  update, CARB says, to meet those goals, natural gas use would have to be “mostly phased  out.”10 Legislation has been recently passed addressing the Governor’s 2030 climate goals of  50% renewable generation, 50% reduction in transportation fuels, and a doubling of energy  efficiency. A few bills have already been introduced on post‐2020 GHG emission reduction goals  and the GHG cap‐and‐trade market. As stewards of the Gas Utility, the City should continue to  stay aware of developments in state climate planning, participate as a stakeholder, and  consider these types of impacts and ways to mitigate them when developing its own  sustainability goals.                                                           9 Executive Orders S‐3‐05 and B‐16‐2012.  10 Climate Change Scoping Plan, First Update, Discussion Draft for Public Review and Comment, California Air  Resources Board, October 2013, pg 88.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  24 | Page    SECTION 6: DETAILS AND ASSUMPTIONS  SECTION 6A: GAS PURCHASE COSTS  The Gas Utility purchases much of its gas for delivery at Malin, Oregon which is almost always  cheaper than delivery at PG&E City Gate, even including the costs of transmission from Malin to  City Gate. Gas is purchased on a month‐ahead and day‐ahead basis in the spot market. The last  few years have seen gas prices in a relatively narrow but low band, and prices for the last year  in particular have been lower than most projections. High levels of natural gas in storage, along  with warmer than normal weather on the West coast has kept prices low, as shown in Figure  11.   Figure 11: Gas Market Prices at PG&E Citygate    Future gas commodity costs are expected to increase steadily over the next several years.  Figure 12 shows the projected gas prices used to generate this forecast. Projections for  transmission costs associated with transporting gas over PG&E’s Redwood transmission  pipeline (from Malin, Oregon to the PG&E Citygate) are based on rates adopted in the most  recent update to the Gas Accord.   Local transportation costs decreased on January 1, 2015 due to the expiration of a temporary  adder to PG&E’s local transportation rate,11 but in December 2014 PG&E applied to the CPUC to  more than double local transportation costs. Staff is tracking PG&E’s application and, based on                                                          11 California Public Utilities Commission Advice Letter 3430‐G, effective January 1, 2014. Also see CPUC Decision  12‐12‐30 regarding the Pipeline Safety Enhancement Plan Adder.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  25 | Page    discussions to date, expects that nearly all of the proposed increase in local transportation costs  will be approved. Staff projects these costs to escalate at 3% per year in subsequent years. As  these charges are dictated by PG&E and are outside of Palo Alto’s control, staff may propose  making these costs a pass‐through charge, similar to the commodity charge, in FY 2018.  Figure 12: Wholesale Gas Price Projections    SECTION 6B: OPERATIONS  Operations costs include the Customer Service, Demand Side Management, Operations and  Maintenance (including Engineering), Resource Management, and Administration categories in  Figure 13, below. Debt service, rent, and transfers are also included in Operations costs  (excluding the General Fund equity transfer). Appendix D: Description of Gas Utility Cost  Categories includes detailed descriptions of the activities associated with these cost categories.  Operations costs are projected to increase by 2 to 4% per year. Salary and benefits, inflation,  and other assumptions match those used in the City’s long‐range financial forecast.   Operations costs for FY 2017 to FY 2019 include funding for the cross‐bore program. In the  1970s CPAU, like many other utilities, adopted horizontal drilling as an alternative to trenching  when installing new gas services. This created the possibility of cross‐bores, which can happen  when a gas service is bored through a sewer lateral. Though cross‐bores are very rare, they can  create a dangerous situation when a contractor attempts to clear a blocked sewer line, because  if the cross‐bored gas service is damaged during the line clearing it can result in a gas leak.  CPAU has been inspecting new gas services since 2001, and in 2011 began video inspections of  the sewer laterals at the location of horizontally‐drilled gas services installed before 2001. This  inspection program has cost roughly $1 million per year since FY 2012. While a majority of  sewer laterals have been inspected, staff has come across several services which are not able to  be scoped, either due to infiltration by roots or broken/collapsed pipe segments. Staff has  GAS UTILITY FINANCIAL PLAN  April 12, 2016  26 | Page    included $3 million in additional funding between FY 2017 and FY 2019 for this program, but  the program will likely require additional funding in future years to complete.  Figure 13: Historical and Projected Operational Costs    SECTION 6C: CAPITAL IMPROVEMENT PROGRAM (CIP)  The Gas Utility’s CIP program consists of the following programs and budgets:   The Gas Main Replacement Program, under which the Gas Utility replaces aging gas  mains   Customer Connections, which covers the cost when the Gas Utility installs new services  or upgrades existing services at a customer’s request in response to development or  redevelopment. The Gas Utility charges a fee to these customers to cover the cost of  these projects.   Ongoing Projects, which covers the cost of routine meter, regulator, and service  replacement, minor projects to improve reliability or increase capacity, and other  general improvements.   Tools and Equipment, which covers the cost of capitalized equipment, such as  directional boring equipment.   One‐time Projects, which represents occasional large projects that do not fall into any  other category.  Table 14 shows the current status of these project categories and future projected spending.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  27 | Page    Table 14: Budgeted Gas CIP Spending     The Gas Main Replacement (GMR) Program is in the process of reaching a major milestone, the  replacement of the last gas mains made from ABS plastic. The program to replace ABS and  other low‐performing materials in the system started in the 1990s (see Section 4A: Gas Utility  History for more detail). CPAU temporarily slowed down its new CIP appropriations in this  category in FY 2014 and 2015 in order to finish the last major ABS main replacement project  and to catch up on a backlog of projects that has accumulated due to staffing issues. With the  replacement of all ABS mains with PE plastic, the material most at risk for failure is removed  leaving only PVC plastic, steel (wrapped, with cathodic protection), and PE mains. The next  focus of the GMR program will be PVC mains. CPAU is considering updating the Gas System  Master Plan to determine which areas of the system to prioritize. The plan will help CPAU  determine whether the pace of main replacement (approximately three miles of main each  year, or 1.5% of the system) needs to be increased, decreased, or whether it needs to remain  the same.   The current budget for gas main replacement assumes the current pace of main replacement,  but does not take into account the recent rise in costs for main replacement, which have  increased from the levels seen during the recent recession. Several factors may be contributing  to this. Economic recovery in the Bay Area, as well as a greater focus on infrastructure  improvement by many municipal agencies and utilities could be creating high demand for  contractors in these fields. Newer, more leak resistant pipe materials may have ongoing greater  costs. CPAU has seen the replacement cost per linear foot increase by 25 to 50% over the last  couple of years. Currently CPAU plans to complete as much main replacement as possible  within its current budget, provided there are no safety concerns. However, if this trend of  higher cost continues, the Gas Utility may require larger CIP budgets, and as a result, larger rate  increases.       Ongoing Projects, Tools and Equipment, and Customer Connections are projected to cost  approximately $0.8 million in FY 2017 and increase by 3% per year through the end of the  forecast period. In practice, these projects can fluctuate dramatically depending on system  conditions and the pace of development and redevelopment in the city. It is worth noting that  the Customer Connections program is paid for through fee revenue, so when costs go up, so  does fee revenue.     Aside from customer connections and some transfers from other funds, the CIP plan for  FY 2017 to FY 2021 is funded by utility rates. The details of the plan are shown in Appendix B:  Gas Utility Capital Improvement Program (CIP) Detail.   Project Category Current  Budget* Spending,  Curr. Yr Remain.  Budget** Committed FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 One Time Projects 150            (9)               141            125               ‐           ‐           ‐           ‐           ‐            Gas Main Replacement 8,097         (367)           7,730         3,580           4,191      3,811      3,878      4,000      4,121        Tools And Equipment 291            (76)             214             ‐               100         100         100         100         100           Ongoing Projects 918            (193)           726            76                785         809         833         858         884           Customer Connections 953            (576)           377            38                1,229      1,265      1,303      1,342      1,383        TOTAL 10,409       (1,222)        9,187         3,818           6,305      5,985      6,115      6,301      6,488        *Includes unspent funds from previous years carried forward or reappropriated into the current fiscal year **Equal to CIP Reserves (Reserve for Reappropriations + Reserve for Commitments).  GAS UTILITY FINANCIAL PLAN  April 12, 2016  28 | Page    SECTION 6D: DEBT SERVICE  The Gas Utility currently makes debt service payments on one bond issuance, the 2011 Series A  Utility Revenue Refunding Bonds. This bond issuance was to refinance the $18 million principal  remaining on the Utility Revenue Bonds, 2002 Series A issued for the Gas and Water Utilities to  finance various improvements to the distribution systems. $9.4 million of this issuance was  secured by the net revenues of the Gas Utility. Debt service for this bond for the financial  forecast period is shown in Table 15. Debt service on this bond will continue through 2026.  Table 15: Gas Utility Debt Service   FY  2017  FY  2018 FY  2019 FY  2020 FY  2021 FY  2022 FY  2023  FY  2024  FY  2025 FY  2026 2011 Utility Revenue  Refunding Bonds, Series A 803 802 800 800 802 804 805 803 800 803  The 2011 bonds include two covenants stating that 1) the Gas Utility will maintain a debt  coverage ratio of 125% of debt service, and 2) that the City will maintain “Available Reserves”12  equal to five times the annual debt service. The current financial plan complies with these  covenants throughout the forecast period, as shown in Table 16 and   Table 17.   Table 16: Debt Service Coverage Ratio ($000)   FY  2017  FY  2018  FY  2019  FY  2020  FY  2021  FY  2022  FY  2023  FY  2024  FY  2025  FY  2026  Revenues 35,938 39,825 43,628 46,051 47,336 48,323 49,891 51,465 53,429 54,696 Expenses  (Excluding CIP and  Debt Service)  ‐33,310 ‐34,933 ‐36,511 ‐37,086 ‐38,566 ‐40,128 ‐41,838 ‐43,552 ‐45,307 ‐47,068 Net Revenues 2628 4892 7117 8965 8770 8195 8053 7913 8,122 7,628 Debt Service 803 802 800 800 802 804 805 803 800 803 Coverage Ratio 327% 610% 890%1121%1094%1019%1000%985% 985% 985%    Table 17: Debt Service Minimum Reserves ($000)   FY  2017  FY  2018  FY  2019  FY  2020  FY  2021  FY  2022  FY  2023  FY  2024  FY  2025  FY  2026  Gas Utilitya 9,543 7,647 7,849 9,712 11,191 11,901 12,270 12,298 12,327 12,742 Debt Serviceb 803 804 803 802 801 801 802 803 800 803  Reserves Ratioc   12x   10x   10x   12x   14x   15x   15x   15x   15x   15x  a) CIP, Rate Stabilization, Operations, and Unassigned Reserves b) Gas Utility’s share of the debt service on the 2011 bonds.  c) Calculated using only Gas Utility reserves. The actual reserves ratio for the 2011 bonds is calculated based on the  combined Electric, Gas, and Water Utility reserves and debt service and is higher than shown here.                                                          12 Available Reserves as defined in the 2011 bonds include the reserves for the Water, Electric, and Gas Utilities  GAS UTILITY FINANCIAL PLAN  April 12, 2016  29 | Page    The Gas Utility’s reserves and net revenue are also pledged as security for the bond issuances  listed in Table 18, even though the Gas Utility is not responsible for the debt service payments.  The Gas Utility’s reserves or net revenues would only be called upon if the responsible utilities  are unable to make their debt service payments. Staff does not currently foresee this occurring.   Table 18: Other Issuances Secured by Gas Utility’s Revenues or Reserves  Bond Issuance Responsible Utilities Annual Debt  Service ($000) Secured by Gas Utility’s: Net Revenues Reserves 1995 Series A Utility  Revenue Bonds Storm Drain $680 Yes No  1999 Utility Revenue  Bonds, Series A  Wastewater Collection  Wastewater Treatment Storm Drain  $1,207 No Yes  2009 Water Revenue  Bonds (Build America  Bonds)  Water $1,977* No Yes  *Net of Federal interest subsidy  SECTION 6E: EQUITY TRANSFER  The City calculates the equity transfer from its Gas Utility based on methodology adopted by  Council in 2009 that has remained unchanged since13. Each year it is calculated according to the  2009 Council‐adopted methodology, and does not require additional Council action. SECTION 6F: REVENUES  The Gas Fund receives most of its revenues from sales of gas, but about 5% comes from other  sources. The largest of these comes from service connection and capacity fees, followed closely  by sales of allowances related to California’s cap‐and‐trade program. Another revenue item  related to the cap‐and‐trade program is collected in customer’s bills. While the State provides  CPAU with a certain number of free allowances each year, the Gas Utility is required to sell a  portion of those in accordance with the regulations. In order to have enough allowances to  cover customer’s natural gas emissions, CPAU must buy allowances at market, and  subsequently passes through the cost of those allowances to customers. The regulations do not  allow the revenue derived from the sale of the free allowances to offset allowance purchases,  thus the pass‐through rate component.   Sales revenue projections are based on the load forecast in Section 5A: Load Forecast. Except  where stated otherwise, these load forecasts are based on normal weather. Weather can vary  substantially, however, and this can affect revenues substantially. Also, changes in customer  behavior, as well as changes to more efficient gas appliances, or switching to electric                                                          13 For more detail on the ordinance adopting the 2009 transfer methodology, see CMR 280:09, Budget Adoption  Ordinance for Fiscal Years 2009 and 2010; and CMR 260:09, Finance Committee Report explaining proposed  changes to equity transfer methodology.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  30 | Page    appliances, will modify these forecasts. Forecasts are continually evaluated to see when new  trends emerge.  SECTION 6G: COMMUNICATIONS PLAN  The FY 2017 communications strategy covers four primary areas:  operations, infrastructure,  safety, efficiency, renewables and rates. Since moving to market pricing for commodity rates,  changes to the commodity rates are posted monthly on the City’s website. Gas use efficiency  incentives are promoted year‐round, but most heavily during winter months to impact heating  activities. Promotional methods include community outreach events, print ads in local  publications, utility bill inserts, messaging on the bills and envelopes, website pages, email  blasts, videos for the web and local Comcast channels, Home Energy Reports and the use of  social media.   To keep customers apprised of the status and accomplishments of capital improvement  projects, a network of project web pages are maintained. Traffic is driven to the website via  print and digital ads, social media and email blasts. Safety topics are emphasized year‐round.  CPAU is engaging in several campaigns and programs in FY 2017 to promote gas utility  efficiency and renewable energy. The Georgetown University Energy Prize competition is a  friendly, national campaign to encourage communities to reduce energy use. Energy savings  from reduced gas and electric consumption qualify to help Palo Alto compete for a $5 million  prize at the end of a two‐year campaign. Since adoption of a carbon neutral electric supply  portfolio, CPAU launched a new voluntary renewable natural gas carbon offsets program,  PaloAltoGreen Gas. Much of our programmatic promotional activity will center around  customer education and encouragement to sign up for participation in PaloAltoGreen Gas.  Other new programs include home efficiency services and online tools to help customers  manage their energy use.  Stepping up efforts to promote gas safety education, staff is focusing outreach around youth,  the importance of calling USA (811) before digging for anyone who may excavate in and around  Palo Alto, such as plumbers and contractors, potential sewer and gas line crossbores, keeping  fats, oils and greases out of drains, and ensuring clear access to meters. For younger  “customers‐to‐be,” CPAU created a Home Safety Detective campaign that includes special tool  kits to help them identify home safety problems. Staff provides safety kits to youth and adults  at school presentations, neighborhood safety and emergency preparedness fairs and other  community outreach events. Meter access awareness is highlighted through use of materials  featuring photos of some unusual ways people obstruct access to their meters, including using  them as bike racks and building storage sheds around them.   CPAU will continue to promote safety, infrastructure, operations, efficiency and rate  adjustment messages through a variety of marketing and media channels. Every year, CPAU  publishes an updated gas safety awareness brochure which is mailed to all customers in Palo  Alto, as well as plumbers, contractors and excavators that may work in and around the area.  Staff talks with business customers at special facilities meetings, attends neighborhood safety  and emergency preparedness fairs and offers presentations to school and community groups.  While print materials and website pages still feature prominently, CPAU is turning the outreach  GAS UTILITY FINANCIAL PLAN  April 12, 2016  31 | Page    emphasis to direct mail, newspaper inserts, social media, online videos and cable TV. Copies of  all outreach materials and logs of activities are saved in the Gas Safety Public Awareness Plan  that is reviewed at least once per year by the Department of Transportation.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  32 | Page    APPENDICES  Appendix A: Gas Financial Forecast Detail  Appendix B: Gas Utility Capital Improvement Program (CIP) Detail  Appendix C: Gas Utility Reserves Management Practices  Appendix D: Description of Gas Utility Cost Categories  Appendix E: Gas Utility Communications Samples  GAS UTILITY FINANCIAL PLAN  April 12, 2016  33 | Page    APPENDIX A: GAS FINANCIAL FORECAST DETAIL  GAS UTILITY FINANCIAL PLAN  April 12, 2016  34 | Page    APPENDIX B: GAS UTILITY CAPITAL IMPROVEMENT PROGRAM (CIP) DETAIL            Project #Project Name Reappropriated /  Carried Forward from  Previous Years Current Year  Funding   Budget  Amendments   Spending,  Current Year  Remaining in  CIP Reserve  Fund Commitments FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ONE TIME PROJECTS GS‐09000 Gas Station 1 Rebuild ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              GS‐08000 Gas Station 2 Rebuild ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              GS‐10000 Gas Station 3 Rebuild 4                                      ‐               ‐                  ‐              4                      ‐                   ‐              ‐              ‐              ‐              ‐              GS‐11001 Gas Station 4 Rebuild ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              GS‐13003 COBUG emissions equipment ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              GS‐15001 Security at Receiving Stations 150,000                          150,000      (150,000)        (9,459)         140,541         125,000            ‐              ‐              ‐              ‐              Subtotal, One‐time Projects 150,004                           150,000        (150,000)          (9,459)           140,545           125,000            ‐                ‐                ‐                ‐                ‐                GAS MAIN REPLACEMENT (GMR) PROGRAM GS‐08011 GMR ‐ Project 18 ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              ‐              GS‐09002 GMR ‐ Project 19 526,621                           ‐              (30,410)          (68,899)       427,312         427,312            ‐              ‐              ‐              ‐              ‐              GS‐10001 GMR ‐ Project 20 2,311,602                         ‐              (13,981)          (23,297)       2,274,324      2,274,325         ‐              ‐              ‐              ‐              ‐              GS‐11000 GMR ‐ Project 21 867,159                           ‐              (20,512)          (100,049)     746,598         832,416            ‐              ‐              ‐              ‐              ‐              GS‐12001 GMR ‐ Project 22 295,985                          4,033,001   (493,001)        (175,008)     3,660,977      3,000               ‐              ‐              ‐              ‐              ‐              GS‐13001 GMR ‐ Project 23 ‐                                  620,650       ‐                  ‐              620,650         42,500            3,550,650    ‐              ‐              ‐              ‐              GS‐14003 GMR ‐ Project 24 ‐                                   ‐               ‐                  ‐               ‐                  ‐                  640,000      3,100,000    ‐              ‐              ‐              GS‐15000 GMR ‐ Project 25 ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐             711,000      3,200,000    ‐              ‐              GS‐16000 GMR ‐ Project 26 ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐             678,200      3,300,000    ‐              GS‐20000 GMR ‐ Project 27 ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐             700,000      3,400,000    GS‐20001 GMR ‐ Project 28 ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐             721,000       Subtotal, Gas Main Replacement Program 4,001,367                        4,653,651     (557,904)          (367,253)       7,729,861        3,579,553        4,190,650     3,811,000     3,878,200     4,000,000     4,121,000      TOOLS AND EQUIPMENT GS‐13002 General Shop Equipment/Tools 130,931                          100,000      (113,062)        (46,069)       71,800            ‐                  100,000      100,000      100,000      100,000      100,000       GS‐01019 Global Positioning System 73,578                             ‐              (70,768)          (641)            2,169              ‐                   ‐              ‐              ‐              ‐              GS‐02013 Directional Boring Machine ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              ‐              GS‐03007 Directional Boring Equipment ‐                                   ‐               ‐                  ‐               ‐                  ‐                   ‐              ‐              ‐              ‐              ‐              GS‐03008 Polyethylene Fusion Equip. 29,168                             ‐               ‐                  ‐              29,168            ‐                   ‐              ‐              ‐              ‐              GS‐14004 Gas Distribution System Model 140,742                          87,690        (87,690)          (29,544)       111,198          ‐                   ‐              ‐              ‐              ‐              ‐              Subtotal, Tools and Equipment 374,419                           187,690        (271,520)          (76,254)         214,335            ‐                   100,000        100,000        100,000        100,000        100,000         GAS UTILITY FINANCIAL PLAN  April 12, 2016  35 | Page    Gas Utility Capital Improvement Program (CIP) Detail (continued)      Project #Project Name Reappropriated /  Carried Forward from  Previous Years Current Year  Funding   Budget  Amendments   Spending,  Current Year  Remaining in  CIP Reserve  Fund Commitments FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ONGOING PROJECTS GS‐11002 Gas System Improvements 151,021                          292,669      (66,397)          (114,635)     262,658         76,036            231,913      238,870      246,036      253,417      261,020       GS‐03009 System Ext. ‐ Unreimbursed 284,821                          192,675      (284,095)        (35,809)       157,592          ‐                  198,500      204,455      210,590      216,908      223,415       GS‐80019 Gas Meters and Regulators 736,596                          344,690      (733,487)        (42,523)       305,276          ‐                  355,030      365,681      376,652      387,952      399,591       Subtotal, Ongoing Projects 1,172,438                        830,034        (1,083,979)       (192,967)       725,526           76,036             785,443        809,006        833,278        858,277        884,025         CUSTOMER CONNECTIONS (FEE FUNDED) GS‐80017 Gas System Extensions (252,428)                          950,000      255,428          (575,893)     377,107         37,880            1,228,500   1,265,355   1,303,315   1,342,415   1,382,688    Subtotal, Customer Connections (252,428)                          950,000        255,428            (575,893)       377,107           37,880             1,228,500     1,265,355     1,303,315     1,342,415     1,382,688      GRAND TOTAL 5,445,800                        6,771,375     (1,807,975)       (1,221,826)    9,187,374        3,818,469        6,304,593     5,985,361     6,114,793     6,300,692     6,487,713      Funding Sources Connection Fees 639,600        255,428            1,017,000     1,047,510     1,078,935     1,111,303     1,144,642      Utility Rates 6,131,775     (2,063,403)       5,287,593     4,937,851     5,035,857     5,189,389     5,343,070      CIP‐RELATED RESERVES DETAIL 6/30/2015 (Actual) 9/30/2015 Reappropriations 2,100,800                        5,368,905        5,076,093     4,720,006     4,811,478     4,958,277     5,105,025      Commitments 3,345,000                        3,818,469         GAS UTILITY FINANCIAL PLAN  April 12, 2016  36 | Page    APPENDIX C: GAS UTILITY RESERVES MANAGEMENT PRACTICES  The following reserves management practices shall be used when developing the Gas Utility  Financial Plan:  Section 1. Definitions  a) “Financial Planning Period” – The Financial Planning Period is the range of future fiscal  years covered by the Financial Plan. For example, if the Financial Plan delivered in  conjunction with the FY 2015 budget includes projections for FY 2015 to FY 2019, FY  2015 to FY 2019 would be the Financial Planning Period.   b) “Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers  to the Utility’s Unrestricted Net Assets.  c) “Net Assets” ‐ The Government Accounting Standards Board defines a Utility’s Net  Assets as the difference between its assets and liabilities.   d) “Unrestricted Net Assets” ‐ The portion of the Utility’s Net Assets not invested in capital  assets (net of related debt) or restricted for debt service or other restricted purposes.   Section 2. Supply Fund Reserves  The Gas Utility’s Supply Fund Balance is reserved for the following purposes:  a) For existing contracts, as described in Section 4 (Reserve for Commitments)  b) For operating and capital budgets re‐appropriated from previous years, as described in  Section 5 (Reserve for Re‐appropriations)    Section 3. Distribution Fund Reserves  a) For existing contracts, as described in Section 4 (Reserve for Commitments)  b) For operating and capital budgets re‐appropriated from previous years, as described in  Section 5 (Reserve for Re‐appropriations)  c) For cash flow management and contingencies related to the Gas Utility’s Capital  Improvement Program (CIP), as described in Section 6 (CIP Reserve)  d) For rate stabilization, as described in Section 7 (Rate Stabilization Reserve)   e) For operating contingencies, as described in Section 8 (Operations Reserve)  f) Any funds not included in the other reserves will be considered Unassigned Reserves  and shall be returned to ratepayers or assigned a specific purpose as described in  Section 9 (Unassigned Reserves)  Section 4. Reserve for Commitments  At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for  Commitments will be set to an amount equal to the total remaining spending authority for  all contracts in force for the Wastewater Collection Utility at that time.   Section 5. Reserve for Reappropriations  At the end of each fiscal year the Gas Supply Fund and Gas Distribution Fund Reserve for  Reappropriations will be set to an amount equal to the amount of all remaining capital and  GAS UTILITY FINANCIAL PLAN  April 12, 2016  37 | Page    non‐capital budgets, if any, that will be re‐appropriated to the following fiscal year for each  fund in accordance with Palo Alto Municipal Code Section 2.28.090.  Section 6. CIP Reserve  The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for  capital contingencies. Staff will manage the CIP Reserve according to the following  practices:  a) The following guideline levels are set forth for the CIP Reserve. These guideline levels  are calculated for each fiscal year of the Financial Planning Period based on the levels of  CIP expense budgeted for that year.   Minimum Level 12 months of budgeted CIP expense  Maximum Level 24 months of budgeted CIP expense  b) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and  the Reserve for Commitments when funds are added to or removed from the Reserve  for Commitments as a result of a change in contractual commitments related to CIP  projects. Any other additions to or withdrawals from the CIP reserve require Council  action.  c) Minimum Level:   i) Funds held in the Reserve for Commitments may be counted as part of the CIP  Reserve for the purpose of determining compliance with the CIP Reserve minimum  guideline level.   ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present  a plan to the City Council to replenish the reserve. The plan shall be delivered by the  end of the following fiscal year, and shall, at a minimum, result in the reserve  reaching its minimum level by the end of the next fiscal year. For example, if the CIP  Reserve is below its minimum level at the end of FY 2017, staff must present a plan  by June 30, 2018 to return the reserve to its minimum level by June 30, 2019. In  addition, staff may present, and the Council may adopt, an alternative plan that  takes longer than one year to replenish the reserve, or that does so in a shorter  period of time.  d) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds  may be added to this reserve. If there are funds in this reserve in excess of the  maximum level staff must propose to transfer these funds to another reserve or return  them to ratepayers in the next Financial Plan. Staff may also seek Council approval to  hold funds in this reserve in excess of the maximum level, if they are held for a specific  future purpose related to the CIP.  Section 7. Rate Stabilization Reserve  Funds may be added to the Rate Stabilization Reserve by action of the City Council and held  to manage the trajectory of future year rate increases. Withdrawal of funds from the Rate  Stabilization Reserve requires Council action. If there are funds in the Rate Stabilization  Reserve at the end of any fiscal year, any subsequent Gas Utility Financial Plan must result  in the withdrawal of all funds from this Reserve by the end of the Financial Planning Period.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  38 | Page    Section 8. Operations Reserve  The Operations Reserve is used to manage normal variations in costs and as a reserve for  contingencies. Any portion of the Gas Utility’s Fund Balance not included in the reserves  described in Section 4‐Section 7 above will be included in the Operations Reserve unless this  reserve has reached its maximum level as set forth in Section 8 d) below. Staff will manage  the Operations Reserve according to the following practices:    a) The following guideline levels are set forth for the Operations Reserve. These guideline  levels are calculated for each fiscal year of the Financial Planning Period based on the  levels of Operations and Maintenance (O&M) and commodity expense forecasted for  that year in the Financial Plan.   Minimum Level 60 days of O&M and commodity expense  Target Level 90 days of O&M and commodity expense  Maximum Level 120 days of O&M and commodity expense  b) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Operations  Reserve are lower than the minimum level set forth above, staff shall present a plan to  the City Council to replenish the reserve. The plan shall be delivered within six months  of the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its  minimum level by the end of the following fiscal year. For example, if the Operations  Reserve is below its minimum level at the end of FY 2014, staff must present a plan by  December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In  addition, staff may present, and the Council may adopt, an alternative plan that takes  longer than one year to replenish the reserve.  c) Target Level: If, at the end of any fiscal year, the Operations Reserve is higher or lower  than the target level, any Financial Plan created for the Gas Utility shall be designed to  return the Operations Reserve to its target level by the end of the forecast period.  d) Maximum Level: If, at any time, the Operations Reserve reaches its maximum level, no  funds may be added to this reserve. Any further increase in the Gas Utility’s Fund  Balance shall be automatically included in the Unassigned Reserve described in Section  9, below.  Section 9. Unassigned Reserve  If the Operations Reserve reaches its maximum level, any further additions to the Gas  Utility’s Fund Balance will be held in the Unassigned Reserve. If there are any funds in the  Unassigned Reserve at the end of any fiscal year, the next Financial Plan presented to the  City Council must include a plan to assign them to a specific purpose or return them to the  Gas Utility ratepayers by the end of the first fiscal year of the next Financial Planning Period.  For example, if there were funds in the Unassigned Reserves at the end of FY 2015, and the  next Financial Planning Period is FY 2016 through FY 2020, the Financial Plan shall include a  plan to return or assign any funds in the Unassigned Reserve by the end of FY 2016. Staff  may present an alternative plan that retains these funds or returns them over a longer  period of time.  GAS UTILITY FINANCIAL PLAN  April 12, 2016  39 | Page    Section 10. Intra‐Utility Transfers Between Supply and Distribution Funds    The Gas Utility records costs in two separate funds: the Gas Supply Fund and the Gas  Distribution Fund. At the end of each fiscal year staff is authorized to transfer an amount  equal to the difference between Gas Supply Fund costs and Gas Supply Fund Revenues from  the Gas Distribution Fund Operations Reserve to the Gas Supply Fund, or vice versa. Such  transfers shall be included in the ordinance closing the budget for the fiscal year.      GAS UTILITY FINANCIAL PLAN  April 12, 2016  40 | Page    APPENDIX D: DESCRIPTION OF GAS UTILITY COST CATEGORIES  This appendix describes the activities associated with the various cost categories referred to in  this Financial Plan.  Customer Service: This category includes the Gas Utility’s share of the call center, meter  reading, collections, and billing support functions. Billing support encompasses staff time  associated with bill investigations and quality control on certain aspects of the billing process. It  does not include maintenance of the billing system itself, which is included in Administration.  This category also includes CPAU’s key account representatives, who work with large  commercial customers who have more complex requirements for their gas services.  Resource Management:  This category includes gas procurement, contract management, rate  setting, and tracking of legislation and regulation related to the gas industry.   Operations and Maintenance: This category includes the costs of a variety of distribution  system maintenance activities, including:   surveying the gas system (50% of the system each year) and repairing any leaks found;   investigating reports of damaged mains or services and perform emergency repairs;   building and replacing gas services for new or redeveloped buildings; and   testing and replacing meters to ensure accurate sales metering.   This category also includes a variety of functions the utility shares with other City utilities,  including:   the Field Services team (which does field research of various customer service issues);   the Cathodic Protection team (which monitors and maintains the systems that prevent  corrosion in metal pipes and reservoirs); and   the General Services team (which manages and maintains equipment, paves and  restores streets after gas, water, or sewer main replacements, and provides welding  services, including certified gas line welding services)  Administration: Accounting, purchasing, legal, and other administrative functions provided by  the City’s General Fund staff, as well as shared communications services and Utilities  Department administrative overhead and billing system maintenance costs.  Demand Side Management: Includes the cost of administering gas efficiency programs and the  direct cost of rebates paid.  Engineering (Operating):  The Gas Utility’s engineers focus primarily on the CIP, but a small  portion of their time is spent assisting with distribution system maintenance.      APPENDIX E: GAS UTILITY COMMUNICATIONS SAMPLES        Attachment C *NOT YET APPROVED * 6053683 Resolution No. _________ Resolution of the Council of the City of Palo Alto Increasing Gas Rates by Amending Rate Schedules G-1 (Residential Gas Service), G-1-G (Residential Green Gas Service), G-2 (Residential Master- Metered and Commercial Gas Service), G-2-G (Residential Master- Metered and Commercial Green Gas Service), G-3 (Large Commercial Gas Service), G-3-G (Large Commercial Green Gas Service). G-10 (Compressed Natural Gas Service Service) and G-10-G (Compressed Natural Green Gas Service) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On ____, 2016, the City Council heard and approved the proposed rate increase. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-1, as amended, shall become effective July 1, 2016. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1-G (Residential Green Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-1-G, as amended, shall become effective July 1, 2016. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-2, as amended, shall become effective July 1, 2016. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2-G (Residential Master-Metered and Commercial Green Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-2-G, as amended, shall become effective July 1, 2016. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-3, as amended, shall become effective July 1, 2016. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3-G (Large Commercial Green Gas Service) is hereby amended to read as CMR #6932: ATTACHMENT F Attachment C * NOT YET APPROVED * 6053683 attached and incorporated. Utility Rate Schedule G-3-G, as amended, shall become effective July 1, 2016. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-10, as amended, shall become effective July 1, 2016. SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10-G (Compressed Natural Green Gas Service Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-10-G, as amended, shall become effective July 1, 2016. SECTION 9. The City Council finds as follows: a. Revenues derived from the gas rates approved by this resolution do not exceed the funds required to provide water service. b. Revenues derived from the gas rates approved by this resolution shall not be used for any purpose other than providing gas service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 10. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 11. The Council finds that the adoption of this resolution changing gas rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. Attachment C * NOT YET APPROVED * 6053683 INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-1 Effective 72-1-20156 dated 12-1-20135 Sheet No G-1-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from City of Palo Alto Utilities: 1. Separately-metered single-family residential Customers. 2. Separately-metered multi-family residential Customers in multi-family residential facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ..................................................................................................$910.3288 Tier 1 Rates: Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-$2.00 2. Cap and Trade Compliance Charge ..................................................$0.00-$0.25 Distribution Charge: .............................................................................................$0.50214392 Tier 2 Rates: (All usage over 100% of Tier 1) Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-2.00 2. Cap and Trade Compliance Charge ...................................................$0.00-$0.25 Distribution Charge: ............................................................................................. .........................................................................................................$01.0407954 6 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and ATTACHMENT D RESIDENTIAL GAS SERVICE UTILITY RATE SCHEDULE G-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-2 Effective 72-1-20156 dated 12-1-20135 Sheet No G-1-2 adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Seasonal Rate Changes: The Summer period is effective April 1 to October 31 and the Winter period is effective from November 1 to March 31. When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates for each period. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Calculation of Usage Tiers Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms per day during the Summer period and 2.0 therms per day during the Winter period, rounded to the nearest whole therm, based on meter reading days of service. As an example, for a 30 day bill, the Tier 1 level would be 20 therms during the Summer period and 60 therms during the Winter period months. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. {End} RESIDENTIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-1-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-G-1 Effective 27-1-20156 dated 72-1-20145 Sheet No G-1-G-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities under the PaloAltoGreen Gas Program: 1. Separately-metered single-family residential Customers. 2. Separately-metered multi-family residential Customers in multi-family residential facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ..................................................................................................$910.3288 Tier 1 Rates: Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-$2.00 2. Cap and Trade Compliance Charges .................................................$0.00-$0.25 Distribution Charge:.............................................................................................$0.50214392 PaloAltoGreen Gas Charge .................................................................................. $0.1200 Tier 2 Rates: (All usage over 100% of Tier 1) Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-2.00 2. Cap and Trade Compliance Charges ..................................................$0.00-$0.25 Distribution Charge:.............................................................................................$01.04079546 PaloAltoGreen Gas Charge .................................................................................. $0.1200 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and RESIDENTIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-1-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-1-G-2 Effective 27-1-20156 dated 72-1-20145 Sheet No G-1-G-2 adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Seasonal Rate Changes: The Summer period is effective April 1 to October 31 and the Winter period is effective from November 1 to March 31. When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates for each period. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Calculation of Usage Tiers Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms per day during the Summer period and 2.0 therms per day during the Winter period, rounded to the nearest whole therm, based on meter reading days of service. As an example, for a 30 day bill, the Tier 1 level would be 20 therms during the Summer period and 60 therms during the Winter period months. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 4. PaloAltoGreen Gas Program Description and Participation PaloAltoGreen Gas provides for the reduction of green-house gas (GHG) emissions associated with a Customer’s Gas usage, through the purchase of certified environmental offsets, with a preference to projects located in California. Purchases are made to match 100% of the therm usage at the Customer’s premises every month. Customers choosing to participate shall fill out a PaloAltoGreen Gas Program application provided by the Customer Service Center. {End} RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-2-1 Effective 27-1-20156 dated 72-1-20125 Sheet No G-2-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities: 1. Commercial Customers who use less than 250,000 therms per year at one site. 2. Master-metered residential Customers in multi-family residential facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ..................................................................................................$784.2386 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ................................................. $0.00-0.25 Distribution Charge: ........................................................................................................$0.6855147 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. {End} RESIDENTIAL MASTER-METERED AND COMMERCIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-2-G-1 Effective 27-1-20156 dated 72-1-20145 Sheet No G-2-G-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities under the PaloAltoGreen Gas Program: 1. Master-metered residential Customers in multi-family residential facilities. 2. Commercial Customers who use less than 250,000 therms per year at one site. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: 1. 100% Renewable/Full Green option:Per Service Monthly Service Charge: ......................................................................................$784.2386 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ....................................................... $0.00-0.25 Distribution Charge: ............................................................................................$0.6855147 PaloAltoGreen Gas Charge .................................................................................. $0.1200 2. 100 Therm block option:Per Service Monthly Service Charge: ......................................................................................$784.2386 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ....................................................... $0.00-0.25 Distribution Charge: ............................................................................................$0.6855147 PaloAltoGreen Gas Charge (per 100 therm block) .............................................. $12.00 RESIDENTIAL MASTER-METERED AND COMMERCIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-2-G-2 Effective 27-1-20156 dated 72-1-20145 Sheet No G-2-G-2 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Request for Service A qualifying Customer may request service under this schedule for more than one account or meter if the accounts are located on one. A site consists of one or more contiguous parcels of land with no intervening public right-of-ways (e.g. streets). 3. PaloAltoGreen Gas Program Description and Participation PaloAltoGreen Gas provides for the reduction of green-house gas (GHG) emissions associated with a Customer’s gas usage, through the purchase of certified environmental offsets, with a preference to projects located in California. Purchases are made to match 100% of the therm usage at the Customer’s facility every month (the 100% Renewable/Full Green option), or in 100 therm blocks. Customers choosing to participate shall fill out a PaloAltoGreen Gas Program application provided by the Customer Service Center. {End} LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-1 Effective 27-1-20156 dated 72-1-20125 Sheet No G-3-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities: 1. Commercial Customers who use at least 250,000 therms per year at one site. 2. Customers at City-owned generation facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: $37761.4318 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .................................................... $0.10-$2.00 2. Cap and Trade Compliance Charges ...................................................... $0.00-0.25 Distribution Charge: .......................................................................................................$0.6775071 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-2 Effective 27-1-20156 dated 72-1-20125 Sheet No G-3-2 and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Request for Service A qualifying Customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site consists of one or more contiguous parcels of land with no intervening public right-of- ways (e.g. streets). 3. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable City of Palo Alto full-service rate schedule. Customers served under this rate schedule may elect Gas Direct Access at any time. {End} LARGE COMMERCIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-3-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-G-1 Effective 27-1-20156 dated 72-1-20145 Sheet No G-3-G-1 A. APPLICABILITY: This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto Utilities under the PaloAltoGreen Gas Program: 1. Commercial Customers who use at least 250,000 therms per year at one site. 2. Customers at City-owned generation facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides Gas Service. C. UNBUNDLED RATES: 1. 100% Renewable/Full Green option:Per Service Monthly Service Charge:$37761.4318 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................................... $0.10-$2.00 2. Cap and Trade Compliance Charges .......................................................... $0.00-0.25 Distribution Charge: ...........................................................................................$0.6775071 PaloAltoGreen Gas Charge: ......................................................................................$0.1200 2. 100 Therm block option: Per Service Monthly Service Charge:$37761.4318 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .......................................................... $0.10-$2.00 2. Cap and Trade Compliance Charges .......................................................... $0.00-0.25 Distribution Charge: ...........................................................................................$0.6775071 PaloAltoGreen Gas Charge (per 100 therm block): ....................................................$12.00 D. SPECIAL NOTES: LARGE COMMERCIAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-3-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-G-2 Effective 27-1-20156 dated 72-1-20145 Sheet No G-3-G-2 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum ranges set forth in Section C. 2. Request for Service A qualifying Customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site consists of one or more contiguous parcels of land with no intervening public right-of-ways (e.g. streets). 3. PaloAltoGreen Gas Program Description and Participation PaloAltoGreen Gas provides for the reduction of green-house gas (GHG) emissions associated with a Customer’s gas usage, through the purchase of certified environmental offsets, with a preference to projects located in California. Purchases are made to match 100% of the therm usage at the Customer’s facility every month, (the 100% Renewable/Full Green option), or in 100 therm blocks. Customers choosing to participate shall fill out a PaloAltoGreen Gas Program application provided by the Customer Service Center. {End} COMPRESSED NATURAL GAS SERVICE UTILITY RATE SCHEDULE G-10 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-10-1 Effective 47-201-20156 dated 14-201-20135 Sheet No.G-10-1 A. APPLICABILITY: This schedule applies to the sale of natural gas to the City-owned compressed natural gas (CNG) fueling station at the Municipal Service Center in Palo Alto B. TERRITORY: Applies to location at the Municipal Service Center in City of Palo Alto. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ..................................................................................................$520.9365 Per Therm Supply Charges: Commodity (Monthly Market Based) ................................................................ $0.10-$2.00 Cap and Trade Compliance Charges .............................................................. $0.00 to $0.25 Distribution Charge .........................................................................................................$0.0963509 D. SPECIAL CONDITIONS 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum range set forth in Section C. {End} COMPRESSED NATURAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-10-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-10-G--1 Effective 47-120-20156 dated 4-20-2015 Sheet No.G-10-G-1 A. APPLICABILITY: This schedule applies to the wholesale sale of natural gas to the City-owned compressed natural gas (CNG) fueling station at the Municipal Service Center in Palo Alto under the PaloAltoGreen Gas Program: B. TERRITORY: The City-owned compressed natural gas (CNG) fueling station located at the Municipal Service Center in City of Palo Alto. C. UNBUNDLED RATES: Per Service Monthly Service Charge: ..................................................................................................$520.9365 Per Therm Supply Charges: Commodity (Monthly Market Based) .................................................... $0.10-$2.00 Cap and Trade Compliance Charges .................................................. $0.00 to $0.25 Distribution Charge .........................................................................................................$0.0963509 PaloAltoGreen Gas Charge ...................................................................................................$0.1200 D. SPECIAL CONDITIONS 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to COMPRESSED NATURAL GREEN GAS SERVICE UTILITY RATE SCHEDULE G-10-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-10-G--2 Effective 47-120-20156 dated 4-20-2015 Sheet No.G-10-G-2 changing market conditions, retail sales volumes and the quantity of allowances required. The Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum range set forth in Section C. 2. PaloAltoGreen Gas Program Description and Participation PaloAltoGreen Gas provides for the reduction of green-house gas (GHG) emissions associated with a Customer’s Gas usage, through the purchase of certified environmental offsets, with a preference to projects located in California. Purchases are made to match 100% of the therm usage at the Customer’s premises every month. Customers choosing to participate shall fill out a PaloAltoGreen Gas Program application provided by the Customer Service Center. {End} NOT YET APPROVED 060216 sh 6053784 1 Resolution No. _______ Resolution of the Council of the City of Palo Alto Changing Refuse Rates by Amending Utility Rate Schedule R-l (Domestic Refuse Collection) and Consolidating Utility Rate Schedules R-2 and R-3 (Commercial Refuse Collection) into Utility Rate Schedule R-C (Commercial Refuse Collection) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On June 13, 2016, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. C. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 13, 2016 public hearing was mailed to all City of Palo Alto Utilities refuse customers by April 29, 2016. D. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed refuse rate amendments, therefore a majority protest does not exist against the proposal. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule R-1 (Domestic Refuse Collection) is hereby amended to read in accordance with Sheets R-1-1 and R-1-2, and Utility Rate Schedules R-2 and R-3 are hereby consolidated into Utility Rate Schedule R-C (Commercial Refuse Collection) to read in accordance with Sheets R-C- 1 through R-C-8, attached to the FY2017 Adopted Budget Staff Report # 6932 as Attachment H - Residential Rate Schedule and Attachment I – Refuse, and incorporated herein. The foregoing Utility Rate Schedules, as amended, shall become effective on July 1, 2016. SECTION 2. The rates contained in the Rate Schedules shall be in effect until Council adopts a new refuse rate structure. SECTION 3. The Council finds that the revenue derived from the refuse rates approved by this resolution do not exceed the funds required to provide refuse service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. // CMR#6932: ATTACHMENT G NOT YET APPROVED 060216 sh 6053784 2 SECTION 4. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 5. The Council finds that the adoption of this resolution changing refuse collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: _____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: _____________________________ ____________________________ Senior Deputy City Attorney City Manager ____________________________ Director of Administrative Services DOMESTIC REFUSE COLLECTION UTILITY RATE SCHEDULE R-1 CITY OF PALO ALTO UTILITIESIssued by the City Council Effective 7-01-16 Supersedes Rate Schedule R-1 dated 7-01-15 Sheet No. R-1-1 A. APPLICABILITY: This schedule applies to each occupied domestic dwelling as required by City ordinance, including separate single-family domestic dwelling and multi-unit dwellings (4 units or less). An occupied dwelling unit is defined as any home, apartment unit, cottage, flat or duplex unit, having kitchen, bath, and sleeping facilities, and to which gas or electric service is being rendered. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. C. RATES: The refuse rates below provide weekly collection, processing and disposal of materials properly deposited in the number of garbage containers indicated below, as well as weekly collection and processing of recyclables from blue carts (standard service includes one 64-gallon blue cart), weekly collection and processing of compostables (yard trimmings, food scraps, and food soiled paper) from green carts (standard service includes one 96-gallon green cart), ongoing maintenance of the closed Palo Alto Landfill, zero waste programs, street sweeping service, the household hazardous waste program, and the annual Clean Up Day. Monthly Refuse Services Cost Garbage Cart Sizes Mini-can/20-gallon cart * 26.48 1 32-gallon cart** 47.69 1 64-gallon cart 95.38 1 96-gallon cart 143.07 *Mini-can service cannot be combined with any other cart service **Standard cart service is one 32-gallon cart. D. SPECIAL ITEM CHARGES: 1. Stove/washer/dryer/water heater pick up * ...................................................................... 25.002.Freezer/refrigerator/air conditioner/garbage compactor pick up * .................................. 40.00 CMR #6932: ATTACHMENT H CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-15 Supersedes Rate Schedule R-1 dated 11-01-14 Sheet No. R-1-2 3. Upholstered furniture pick up (per unit) * ....................................................................... 15.00 4. Mattress pick up * ............................................................................................................ 15.00 5. Tire pick up (per tire, limit of 4 tires) * ........................................................................... 20.00 6. Pallet pick up *................................................................................................................. 5.00 * “Surcharge special” fee (see E5. below) applies when special item is not collected under the annual Clean Up Day Program guidelines. E. SPECIAL LABOR CHARGES: 1. Return trip (next day service)……………………………………………………. ......... 24.00 2. Return trip (same day service) ……………………………………………………. ....... 36.00 3. Extra collection (for service of additional material; charged per cubic yard) ................ 60.00 4. Miscellaneous 1 person service rate (pull out service) ............................................. 2.50/min 5. Surcharge special (one time pick up of large or non-standard items; or delivery of containers for special events) ………….... ................................................................................. 80.00 6. Repair rate ................................................................................................ 2.50/min + material 7. Back/side yard collection of garbage (monthly charge per residence – available to current back/side yard service customer only) ………………. ................................................... 3.66 F. SPECIAL CART CHARGES: 1. 32-gallon cart rental*** …………………………… .........................................................3.00 2. 64-gallon cart rental*** …………………………… .........................................................3.00 3. 96-gallon cart rental*** …………………………… .........................................................3.00 4. 20-gallon cart purchase ......................................................................................................60.00 5. 32-gallon cart purchase…………………………………………………………… ........ 51.00 6. 64-gallon cart purchase……………………………………………………………. ...... 57.00 7. 96-gallon cart purchase…………………………………………………………….. ...... 62.00 8. Cart wash ………………………………………………………………………….. ...... 30.00 9. Compost cart contamination (entire cart dumped) ........................................................... 30.00 10. Recycling cart contamination (entire cart dumped)……………………………….. ....... 30.00 11. Damaged cart exchange (one allowed per customer each calendar year at no cost). ...... 20.00 12. Monthly key service (customer provided lock) ………………………………………. . 15.00 13. Lock (Collector provided) …………………………………………………………....... 25.00 14. Cart lock installation………………………………………………………………. ....... 40.00 *** Monthly charge for each additional cart of service above three carts for the compostable materials or recycling cart. COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIESIssued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-1 A. APPLICABILITY: This schedule applies to all occupied establishments other than residential premises as required by City ordinance. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. C. RATES: The refuse rates below provide collection, processing and disposal of materials properly deposited in the number of refuse containers indicated below, as well as collection and processing of recyclables from special blue carts. The refuse rates below also provide hazardous waste programs, zero waste programs, ongoing maintenance of the closed Palo Alto Landfill, and street sweeping programs. (1) MONTHLY GARBAGE CAN/CARTS Collection Frequency Cart Sizes 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week Cart Rental 32-gal. can or cart $35.48 $3.15 64-gal. cart* 73.25 163.66 254.08 344.49 434.91 525.33 3.15 96-gal. cart 109.87 236.91 363.95 490.99 618.03 745.07 3.15 * Standard service is one 64-gallon cart. CMR #6932: ATTACHMENT I COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-2 (2) MONTHLY GARBAGE BINS Size (cubic yards) Collection Frequency Bin Rental 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week 1 $178.54 $363.95 $549.36 $733.62 $919.03 $1,103.30 $40.95 1.5 243.78 501.29 759.95 1,017.46 1,274.97 1,532.49 40.95 2 309.02 638.63 970.54 1,301.30 1,630.91 1,961.67 52.50 3 437.20 913.31 1,388.28 1,864.39 2,341.65 2,817.76 67.20 4 581.41 1,174.26 1,825.48 2,448.09 3,068.40 3,689.87 67.20 5 709.59 1,477.55 2,243.22 3,011.18 3,779.14 4,545.95 81.90 6 853.80 1,768.25 2,679.27 3,592.59 4,505.90 5,418.06 81.90 8 1,113.60 2,315.32 3,519.34 4,724.50 5,928.51 7,132.52 107.10 (3) MONTHLY COMPOST CARTS* Collection Frequency Cart Sizes 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week Bin Rental 32-gal. cart $28.38 $3.15 64-gal. cart 58.60 130.93 203.26 275.60 347.93 420.26 3.15 96-gal. cart 87.90 189.53 291.16 392.79 494.42 596.06 3.15 *Multi-unit dwellings with five (5) to ten (10) units may receive up to one 96-gallon compostables cart collected once per week at no charge. Service over 96 gallons will be charged as described in G-7 below. Note: “Cart wash” (see G-1) is available and the additional cost of $30 will be assessed to account holders if odors become a public nuisance. COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-3 (4) MONTHLY COMPOST BINS Size (cubic yards) Collection Frequency Monthly Bin Rental 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week 1 $142.83 $291.16 $439.49 $586.90 $735.25 $882.64 $40.95 1.5 195.02 401.03 607.96 813.97 1,019.98 1,225.99 40.95 2 247.21 510.90 776.43 1,041.04 1,304.73 1,569.34 52.50 3 349.76 730.65 1,110.62 1,491.51 1,873.32 2,254.21 67.20 4 465.12 939.41 1,460.38 1,958.47 2,454.72 2,951.89 67.20 5 567.67 1,182.04 1,794.58 2,408.94 3,023.31 3,636.76 81.90 6 683.04 1,414.60 2,143.42 2,874.07 3,604.72 4,334.45 81.90 Note: “Bin wash” (see G-2) is available and the additional cost of $40 will be assessed to account holders if odors become a public nuisance. (5) DEBRIS BOXES NOTE: GreenWaste of Palo Alto has the exclusive rights to haul any and all mixed material (garbage, generic C&D, or mixed recycling) generated in Palo Alto. Category A: Includes garbage, mixed construction and demolition (C&D). Category B: Includes single-source separated materials and can be and directly marketed as a single commodity. Debris Box On-Call Service* 7 CY 15 CY 20 CY 30 CY 40 CY Delivery (A or B) $132.30 $132.30 $132.30 $132.30 $132.30 Service (Cat A) 676.40 676.40 785.13 1,004.87 1,095.29 Service (Cat B) 344.40 344.40 399.84 512.40 558.60 Non-use ** $76.00 $76.00 $76.00 $76.00 $76.00 * Additional “Contaminated charge” of $185.30 (see I-5) may apply on debris boxes used for construction and demolition materials. **Within a fourteen (14) day period. COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-4 Debris Box Category A Permanent Service 15 CY 20 CY 30 CY 40 CY 1x/week $2,638.07 $3,209.18 $4,121.34 $4,490.67 2x/week 5,276.15 6,418.36 8,241.54 8,981.35 3x/week 7,915.36 9,626.39 12,362.89 13,472.02 4x/week 10,552.29 12,836.71 16,485.38 17,962.70 5x/week 13,190.36 16,045.89 20,606.72 22,453.37 Rental 147.00 195.30 292.95 390.60 Debris Box Category B Permanent Service 15 CY 20 CY 30 CY 40 CY 1x/week $1,419.49 $1,656.07 $1,776.18 $1,896.29 2x/week 2,838.92 3,312.15 3,552.37 3,792.59 3x/week 4,258.47 4,968.22 5,332.19 5,688.88 4x/week 5,677.96 6,624.29 7,104.73 7,585.18 5x/week 7,097.45 8,280.36 8,880.92 9,481.47 Rental 147.00 195.30 292.95 390.60 COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-5 D. SPECIAL ITEM CHARGES*: 1. Stove/washer/dryer/heater pick up ................................................................................... 25.00 2. Freezer/refrigerator/air conditioner (residential only) ..................................................... 40.00 3. Upholstered furniture pick up ......................................................................................... 15.00 4. Mattress pick up .............................................................................................................. 15.00 5. Tire pick up (per tire, limit of 4 tires) ............................................................................. 20.00 6. Pallet pick up ................................................................................................................... 5.00 * Requests for pick up of special items must be made scheduled in advance of regular pick up days. If no request is made, am “Extra collection” fee (see E-1) will be applied. E. SPECIAL LABOR CHARGES: 1. Extra collection (for service of additional material; charged per cubic yard) ................ 60.00 2. Miscellaneous 1 person service rate ……………………………………….. ........... 2.50/min 3. Repair rate …………………………………………. ..................................2.50/min + material 4. Return trip/Special trip…….…………………………………………………… ............ 80.00 5. Special Events Delivery....................................................................................................................... 30.00 Materials and Service (per waste station) ................................................................... 20.00 (6) Pullout Service (per container) Carts Bins 1x/week $50.00 $200.00 2x/week 100.00 400.00 3x/week 150.00 600.00 4x/week 200.00 800.00 5x/week 250.00 1,000.00 6x/week 300.00 1,200.00 7. Whole cardboard box (boxes that have not been broken down) Cart .............................................................................................................................. 25.00 Bin ............................................................................................................................... 50.00 8. Overflowing container Cart .............................................................................................................................. 30.00 Bin ............................................................................................................................... 50.00 COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-4 Debris Box Category A Permanent Service 15 CY 20 CY 30 CY 40 CY 1x/week $2,638.07 $3,209.18 $4,121.34 $4,490.67 2x/week 5,276.15 6,418.36 8,241.54 8,981.35 3x/week 7,915.36 9,626.39 12,362.89 13,472.02 4x/week 10,552.29 12,836.71 16,485.38 17,962.70 5x/week 13,190.36 16,045.89 20,606.72 22,453.37 Rental 147.00 195.30 292.95 390.60 Debris Box Category B Permanent Service 15 CY 20 CY 30 CY 40 CY 1x/week $1,419.49 $1,656.07 $1,776.18 $1,896.29 2x/week 2,838.92 3,312.15 3,552.37 3,792.59 3x/week 4,258.47 4,968.22 5,332.19 5,688.88 4x/week 5,677.96 6,624.29 7,104.73 7,585.18 5x/week 7,097.45 8,280.36 8,880.92 9,481.47 Rental 147.00 195.30 292.95 390.60 COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-C-5 D. SPECIAL ITEM CHARGES*: 1. Stove/washer/dryer/heater pick up ................................................................................... 25.00 2. Freezer/refrigerator/air conditioner (residential only) ..................................................... 40.00 3. Upholstered furniture pick up ......................................................................................... 15.00 4. Mattress pick up .............................................................................................................. 15.00 5. Tire pick up (per tire, limit of 4 tires) ............................................................................. 20.00 6. Pallet pick up ................................................................................................................... 5.00 * Requests for pick up of special items must be made scheduled in advance of regular pick up days. If no request is made, am “Extra collection” fee (see E-1) will be applied. E. SPECIAL LABOR CHARGES: 1. Extra collection (for service of additional material; charged per cubic yard) ................ 60.00 2. Miscellaneous 1 person service rate ……………………………………….. ........... 2.50/min 3. Repair rate …………………………………………. ..................................2.50/min + material 4. Return trip/Special trip…….…………………………………………………… ............ 80.00 5. Special Events Delivery....................................................................................................................... 30.00 Materials and Service (per waste station) ................................................................... 20.00 (6) Pullout Service (per container) Carts Bins 1x/week $50.00 $200.00 2x/week 100.00 400.00 3x/week 150.00 600.00 4x/week 200.00 800.00 5x/week 250.00 1,000.00 6x/week 300.00 1,200.00 7. Whole cardboard box (boxes that have not been broken down) Cart .............................................................................................................................. 25.00 Bin ............................................................................................................................... 50.00 8. Overflowing container Cart .............................................................................................................................. 30.00 Bin ............................................................................................................................... 50.00 COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-2-6 F. RECYCLING AND COMPOST ORDINANCE CHARGES: If contamination is identified in a recycling or compost cart or bin, the customer will have an opportunity to remove the contamination and will only be charged a “Return trip” fee. If the customer chooses to not remove the contamination, the customer will be charged an “Extra solid waste pick-up” fee in addition to a “Return trip” fee. 1. Return trip…….…………………………………………………………………………. 80.00 (2) EXTRA SOLID WASTE PICK UP (for contaminated recycling or compost containers only. Additional charges will apply to any materials left outside of the containers) Cart/Bin Size Contaminated Recycling Contaminated Compost 32-gal. $8.19 $1.64 64-gal. 16.92 3.38 96-gal 25.37 5.07 1 CY 41.23 8.25 1.5 CY 56.30 11.26 2 CY 71.37 14.27 3 CY 100.97 20.19 4 CY 134.27 26.85 5 CY 163.88 32.78 6 CY 197.18 39.44 8 CY 257.18 51.44 3. De minimus (no garbage service but subscribes to both compost and recycling) ............. 25.00 G. SPECIAL CART AND BIN CHARGES: 1. Cart wash …………………………………………………………………………. ....... 30.00 2. Bin wash........................................................................................................................... 40.00 3. Cart exchange ….............................................................................................................. 20.00 4. Monthly key service (customer provided lock) per lock………………………………… 15.00 5. Lock (Contractor provided)………………………………………………………….... . 25.00 6. Cart lock installation………………………………………………………………. ....... 40.00 7. Each additional 32-gallon increment of weekly compostables cart service (in excess of 96 gallons per week) for multi-unit dwellings with five (5) to ten (10) units (monthly COMMERCIAL REFUSE COLLECTION UTILITY RATE SCHEDULE R-C CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-01-16 Supersedes Sheets .R-2-1&2 and R-3-1 through R-3-5 dated 10-01-11 Sheet No. R-2-7 charge).............................................................................................................................. 20.00 8. Temporary bin-delivery (per bin)………………………………………………… ........ 80.00 9. Temporary bin non-use fee (within a fourteen (14) day period) ………………………25.00 10. Auto-bar lock installation ……………………………………………………… ........... 200.00 H. SPECIAL DEBRIS BOX CHARGES: 1. Debris box delivery …………………………………….. ............................................... 132.30 2. Debris box non-use (within a fourteen (14) day period)…………………………….. 76.00 3. Special debris box service between 12 PM to 6 PM ………………………………. ...... 100.00 4. Special debris box service between 6 PM to 12 AM ……………………………. ........ 200.00 5. Special debris box service on Saturday before 12 PM ……………………………. ...... 100.00 6. Special debris box service on Sunday before 6 PM ……………………………. ........... 300.00 7. Special debris box service on Sunday, 6 PM to 12 AM ……………………….. ........... 400.00 8. Contaminated loads of construction and demolition recycling materials………. ........... 185.30 9. Overweight: 8 ton weight limit .......................................................................... 60.00 per ton (or fraction thereof) over 8 tons, up to 10 tons. Note: GreenWaste cannot transport a debris box that is greater than 10 tons. I. SPECIAL COMPACTOR CHARGES: 1. Compacted garbage (per compacted cubic yard) …………………………………… .... 73.25 2. Compacted compostables (per compacted cubic yard) ……………………………… ... 58.60 3. Compacted recyclables (transportation) ……………………………… ......................... 200.00 4. Overweight (per ton) ........................................................................................................ 60.00 5. Contaminated loads of construction and demolition recycling materials ........................ 185.30 {End} NOT YET APPROVED 1 160229 sh 0140157 Resolution No. ______ Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Drain Rates by 3.2% Per Month Per Equivalent Residential Unit for Fiscal Year 2017 The Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2016. SECTION 2. The Council finds that this rate increase is being imposed to offset the effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator provision of the Storm Drainage Fee ballot measure, which was approved by a majority of Palo Alto property owners on April 26, 2005. SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. // // // // // // // // // // // CMR #6932: ATTACHMENT J NOT YET APPROVED 2 160229 sh 0140157 SECTION 4. The Council finds that modification and approval of this change to the Utility Rate Schedule D-1 (Storm and Surface Water Drainage) for the purpose of meeting operating expenses is statutorily exempt from California Environmental Quality Act (CEQA) review, pursuant to Public Resources Code Section 15273(a). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ City Attorney City Manager _____________________________ Director of Public Works _____________________________ Director of Administrative Services GENERAL STORM AND SURFACE WATER DRAINAGE UTILITY RATE SCHEDULE D-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2016 Supersedes Sheet No.D-1-1 dated 7-1-2015 Sheet No. D-1-1 A. APPLICABILITY: This schedule applies to all storm and surface water drainage service, excepting only those users and to the extent that they are constitutionally exempt under the Constitution of the State of California or who are determined to be exempt pursuant to Rule and Regulation 25. B. TERRITORY: Inside the incorporated limits of the city of Palo Alto and land owned or leased by the city. C. RATES: Per Month: Storm Drainage Fee per Equivalent Residential Unit (ERU) ........................................................ $13.03 D. SPECIAL NOTES: 1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm drainage fees for residential and non-residential customers. All single-family residential properties shall be billed the number of ERUs specified in the following table, based on an analysis of the relationship between impervious area and lot size for Palo Alto properties. RESIDENTIAL RATES (Single-Family Residential Properties PARCEL SIZE (sq.ft.) ERU <6,000 sq.ft. 0.8 ERU 6,000 - 11,000 sq.ft. 1.0 ERU >11,000 sq.ft. 1.4 ERU All other properties will have ERU's computed to the nearest 1/10 ERU using the following formula: No. of ERU = Impervious Area (Sq. Ft.) 2,500 Sq. Ft. 2. For more details on the storm drainage fee, refer to Utilities Rule and Regulation 25. {End} Attachment B    Rate Adjustments for All Utilities:  FY 2017 Proposed, FY 2018 to FY 2021 Projected  Utility FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  Electric Utility 11% 10% 2% 0% 1%  Gas Utility 8% 9% 7% 1% 1%  Wastewater 9% 10% 9% 7% 6%  Water Utility 6% 9% 9% 6% 2%  Refuse1 9% 8% 5% 3% 3%  Storm Drain 3.2% 2% to 3% 2% to 3% 2% to 3% 2% to 3%  Bill Change (%) 8% 9% 6% 4% 2%  ($/mo) $20.80  $23.45  $18.49  $11.16  $7.77     Attachment A *NOT YET APPROVED * 160322 sdl 6053686 Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving the FY 2017 Wastewater Utility Financial Plan R E C I T A L S A. Each year the City of Palo Alto (“City”) assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made a part of the Financial Plans. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the FY 2017 Wastewater Utility Financial Plan. SECTION 2. The Council hereby approves the transfer of $3.95 million in FY 2016 from the Rate Stabilization Reserve to the Operations Reserve, as described in the FY 2017 Wastewater Utility Financial Plan approved via this resolution. / / / / / / / / / / / / CMR #6932: ATTACHMENT K Attachment A *NOT YET APPROVED * 160322 sdl 6053686 SECTION 3. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s definition of a project under Public Resources Code Section 21065, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services FY 2017 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN FY 2017 TO FY 2026 ATTACHMENT B WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 2 | P a g e FY 2017 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN FY 2017 TO FY 2026 TABLE OF CONTENTS Section 1: Definitions and Abbreviations................................................................................ 4 Section 2: Executive Summary and Recommendations ........................................................... 4 Section 2A: Overview of Financial Position .................................................................................. 4 Section 2B: Summary of Proposed Actions .................................................................................. 5 Section 3: Detail of FY 2017 Rate and Reserves Proposals ....................................................... 5 Section 3A: Rate Design ............................................................................................................... 5 Section 3B: Current and Proposed Rates ..................................................................................... 6 Section 3C: Bill Impact of Proposed Rate Changes ...................................................................... 7 Section 3D: Proposed Reserve Transfers ..................................................................................... 7 Section 4: Utility Overview .................................................................................................... 7 Section 4A: Wastewater Utility History ....................................................................................... 7 Section 4B: customer base ........................................................................................................... 8 Section 4C: Collection System ...................................................................................................... 9 Section 4D: Cost Structure and Revenue Sources ........................................................................ 9 Section 4E: Reserves Structure ................................................................................................... 10 Section 4F: Competitiveness ...................................................................................................... 11 Section 5: Utility Financial Projections ................................................................................. 11 Section 5A: FY 2011 to FY 2015 Cost and Revenue Trends ........................................................ 11 Section 5B: FY 2015 Results ....................................................................................................... 12 Section 5C: FY 2016 Projections ................................................................................................. 13 Section 5D: FY 2017 – FY 2026 Projections ................................................................................ 13 Section 5E: Risk Assessment and Reserves Adequacy ............................................................... 14 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 3 | P a g e Section 5F: Alternate Scenarios ................................................................................................. 16 Section 5G: Long-Term Outlook ................................................................................................. 18 Section 6: Details and Assumptions ..................................................................................... 18 Section 6A: Wastewater Treatment Costs ................................................................................. 18 Section 6B: Operations .............................................................................................................. 18 Section 6C: Capital Improvement Program (CIP) ....................................................................... 19 Section 6D: Debt Service ............................................................................................................ 21 Section 6E: Other Revenues ....................................................................................................... 22 Section 7: Communications Plan .......................................................................................... 22 Appendices ......................................................................................................................... 23 Appendix A: Wastewater Collection Financial Forecast Detail .................................................. 24 Appendix B: Wastewater Collection Utility Capital Improvement Program (CIP) Detail .......... 25 Appendix C: Wastewater Collection Utility Reserves Management Practices .......................... 26 Appendix D: Sample of Wastewater Collection Outreach Materials......................................... 29 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 4 | P a g e SECTION 1: DEFINITIONS AND ABBREVIATIONS CCF The standard unit of measurement for water delivered to water customers, equal to one hundred cubic feet, or roughly 748 gallons. When water usage is used to assess wastewater charges for commercial customers, it is measured in CCF. CIP Capital Improvement Program CPAU City of Palo Alto Utilities Department FOG Fats, oils, and grease. When flushed into the sewer system, these materials accumulate in parts of the sewer system and create blockages. O&M Operations and Maintenance RWQCP Regional Water Quality Control Plant, the wastewater treatment plant owned and operated by the City of Palo Alto that serves Palo Alto and several surrounding communities. UAC Utilities Advisory Commission SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS This document presents a Financial Plan for the City of Palo Alto’s Wastewater Collection Utility for the next ten years. It provides revenues to cover the costs of operating the utility safely over that time while adequately investing for the future. It also addresses the financial risks facing the utility over the short term and long term, and includes measures to mitigate and manage those risks. SECTION 2A: OVERVIEW OF FINANCIAL POSITION Overall costs in the Wastewater Collection Utility are expected to rise by about 5% per year from fiscal year (FY) 2016 to FY 2026. The primary driver is wastewater treatment costs, which are projected to rise by 7% in FY 2017 and 6% per year thereafter, with other costs rising at roughly 3% to 4% per year. The costs for the Wastewater Collection Utility are shown in Table 1 below. Table 1: Expenses for FY 2015 to FY 2026 Expenses ($000) FY 2015 (act.) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Treatment Costs 8,589 9,012 9,855 10,446 11,073 11,737 12,442 13,188 13,980 14,818 15,707 16,650 Operations 3,684 6,044 6,261 6,466 6,670 6,881 7,097 7,320 7,795 7,904 8,150 8,404 Capital Projects 4,067 4,985 4,852 4,996 5,144 5,297 5,455 5,617 5,784 5,955 6,132 6,315 TOTAL 16,340 20,041 20,968 21,908 22,887 23,916 24,993 26,125 27,558 28,678 29,990 31,368 Expenses continue to be higher than revenues, and the Rate Stabilization Reserve has been drawn down in lieu of having larger rate increases. To ensure that revenues cover these rising costs and reserves remain healthy, the financial plan includes the rate trajectory shown in Table WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 5 | P a g e 2. The table also shows rate projections from last year’s Financial Plan. Note that the rate increase for FY 2017 is the same as projected in the FY 2016 Financial Plan. Table 2: Projected Wastewater Collection Rate Trajectory for FY 2017 to FY 2026 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Current Plan 9% 10% 9% 7% 6% 4% 4% 4% 4% 4% FY 2016 Plan 9% 9% 9% 6% 6% N/A N/A N/A N/A N/A The FY 2016 Financial Plan projected that reserves would fall nearly to the minimum reserve levels. However, as costs are increasing faster than projected last year, higher rate increases are required to keep pace. The Wastewater Collection Utility’s Rate Stabilization Reserve is being used to spread the projected cost increases over several years. The FY 2016 Financial Plan proposed a $2 million transfer from the Rate Stabilization Reserve, but staff recommends increasing this to $3.95 million. This Financial Plan projects that the Rate Stabilization Reserve will be exhausted by FY 2017. Table 3: Transfers To/(From) Reserves for FY 2016 to FY 2026 ($000) Reserve FY 2016 FY 2017 FY 2018 to FY 2026 Rate Stabilization (3,950) (342) - Operations 3,950 342 - SECTION 2B: SUMMARY OF PROPOSED ACTIONS Staff proposes the following actions for the Wastewater Collection Utility in FY 2016: 1. Transfer $3.95 million from the Rate Stabilization Reserve to the Operations Reserve. See Section 3D: Proposed Reserve Transfers for more details. Staff proposes the following actions for the Wastewater Collection Utility in FY 2017: 1. Increase the Wastewater Collection rates as shown in Section 3B: Current and Proposed Rates. The changes are projected to increase average system revenues by 9% effective July 1, 2016. 2. Transfer $342,000 from the Rate Stabilization Reserve to the Operations Reserve. See Section 3D: Proposed Reserve Transfers for more details. SECTION 3: DETAIL OF FY 2017 RATE AND RESERVES PROPOSALS SECTION 3A: RATE DESIGN The Wastewater Collection Utility’s rates are evaluated and implemented in compliance with the cost of service requirements and procedural rules set forth in the California Constitution (Proposition 218). Current rates were structured based on staff’s annual assessment of the wastewater utility’s financial position, as well as the methodology from the January 2011 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 6 | P a g e Wastewater Collection Utility Cost of Service & Rate Study completed by Utility Financial Solutions (Staff Report 1399). Staff plans to review and update this cost of service study in 2 to 3 years, unless any major changes occur to the utility’s operations or customer base that would necessitate an earlier study. Before conducting any new cost of service study, staff will review current rates and the scope of the study with the Utilities Advisory Commission (UAC) and Council to determine the City’s policy priorities. SECTION 3B: CURRENT AND PROPOSED RATES The current rates were adopted July 1, 2015, when the City increased sewer rates by 9%. CPAU’s sewer rates for commercial customers are based on the previous winter’s water use. This closely approximates non-irrigation water consumption, which represents actual sewer use. CPAU has three sewer rate schedules: one for residents (S-1), one for commercial customers (S-2), and a special schedule for restaurants (S-6), which discharge higher than average amounts of grease and oil and, therefore, have a greater impact on the sewer system. Residential customers are billed a monthly service charge, while commercial customers are billed based on their dry month water usage (January through March). Restaurant customers are billed monthly based on water usage. CPAU also maintains a rate schedule for industrial dischargers (S-7), but there are currently no customers required to be on this rate schedule. Table 4, below, summarizes the current and proposed rates for all customer classes. Comparisons with neighboring communities are discussed in Section 4F: Competitiveness. Table 4: Sewer Rates (Current and Proposed) Current (7/1/2015) Proposed (7/1/2016) Change $/mo. % Monthly Service and Minimum Charges ($/month) S-1 (Residential) Service charge $31.95 $34.83 $2.88 9% S-2 (Commercial), S-6 (Restaurant) Minimum $31.95 $34.83 $2.88 9% Quantity Rates: based on winter water usage (average for January - March bill period) S-2 (Commercial) $/CCF 6.16 6.71 0.55 9% S-6 (Restaurant) $/CCF 9.52 10.38 0.86 9% S-7 (Industrial) $/CCF 2.83 3.08 0.25 9% WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 7 | P a g e SECTION 3C: BILL IMPACT OF PROPOSED RATE CHANGES Table 5 below shows the impact of the proposed July 1, 2016 rate changes. Table 5: Impact of Proposed Sewer Changes Current (7/1/2015) Proposed (7/1/2016) Change $/mo. % Residential $ 31.95 $ 34.83 $ 2.88 9% General Commercial (14 CCF) 86.24 93.94 7.70 9% Restaurant (56 CCF) 533.12 581.28 48.16 9% SECTION 3D: PROPOSED RESERVE TRANSFERS In the FY 2016 Financial Plan, several transfers between reserves were approved. Funds related to CIP’s in the Reappropriations Reserve were transferred to the CIP reserve, to comply with updated accounting practices. Staff also proposed a $2 million transfer from the Rate Stabilization Reserve to the Operations Reserve. In this FY 2017 Financial Plan, staff recommends an additional $1.95 million transfer from the Rate Stabilization Reserve in FY 2016. This will leave a small amount, $342,000, to transfer in FY 2017, which will result in a zero balance in the Rate Stabilization Reserve at the end of FY 2017. These transfers are included in the financial projections in this Financial Plan, and will enable CPAU to maintain adequate Operations Reserve levels while moderating the pace of increase in Wastewater Collection rates. The impact of these transfers on reserves levels can be seen in Appendix A: Wastewater Collection Financial Forecast Detail. SECTION 4: UTILITY OVERVIEW This section provides an overview of the utility and its operations. It is intended as general background information and to help readers better understand the forecasts in later sections. SECTION 4A: WASTEWATER UTILITY HISTORY The Wastewater Utility commenced operation in 1899 to serve Palo Alto and Stanford. In its first three decades the system grew to 60 miles of sewers. Raw sewage was discharged into Mayfield Slough at the edge of the Bay. In the 1930s, at the behest of the State Department of Health, Palo Alto built the South Bay’s first wastewater treatment plant. At that time the sewer system served 20,500 Stanford and Palo Alto residents and a cannery. The plant was upgraded twice in the 1940s and 1950s to increase capacity.1 At the same time, the postwar population and industrial boom in the 1950s required rapid expansion of the sewer system. In the first half of the 1960s Palo Alto’s area doubled, as did wastewater flows, overwhelming the capacity of several of the utility’s “trunk lines,” which are the largest diameter main sewer lines carrying wastewater to the treatment plant. This prompted the City, in 1965, to perform the first of its 1 Long Range Facilities Plan for the Regional Water Quality Control Plant, August 2012, Carollo Engineers, pp 2-1 through 2-2 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 8 | P a g e sewer master plans to identify needed capacity improvements. At that point the Wastewater Utility’s system comprised more than 150 miles of sewer mains.2 In 1968 the City signed agreements with the Cities of Mountain View and Los Altos to build a new regional treatment plant, the RWQCP, which is still in operation today. Since 1940 the City had been providing treatment services to the East Palo Alto Sanitary District through an existing agreement, and was also serving Stanford University by transporting wastewater across the City’s sewer system to the treatment plant. Both of these organizations became partners in the RWQCP as well. At the same time the Town of Los Altos Hills became the sixth partner as it signed an agreement with the City to connect the Town’s sewer system to the City’s sewer system to carry wastewater to the new RWQCP. The current agreements for the RWQCP extend through 2035.3 In the 1980s the City directed increased attention to the condition of its sewer system, performing a series of studies of groundwater inflow and infiltration into the system. The study found high rates of infiltration, estimating that as much as 40% of the water going to the RWQCP from Palo Alto’s system was groundwater and stormwater rather than wastewater.4 In some parts of Palo Alto the land surface had subsided due to groundwater pumping by the water utility, and though that practice had ceased many years earlier as the water utility switched to the Hetch Hetchy Regional Water System, parts of the city had already subsided two to five feet. This subsidence had damaged several parts of the sewer collection system, leading to reduced slopes for sewer mains that caused reductions in capacity. In response to these studies the City commenced an accelerated sewer system rehabilitation program.5 At that point the sewer system comprised over 190 miles of mains.6 A Master Plan study in 1988 recommended a variety of capacity expansions, and in the 1990s the City completed about half of them. However, a 2004 Master Plan update found that the accelerated sewer rehabilitation plan started in the early 1990s had substantially reduced infiltration, easing the capacity problems that had led the to the recommended capacity increases in the 1988 study. Several of the outstanding projects were canceled and replaced with a different set of projects.7 At the same time the City updated its hydraulic model and developed greater capacity to do system planning in house. SECTION 4B: CUSTOMER BASE The City of Palo Alto’s Wastewater Collection Utility provides sewer service to the residents and businesses of Palo Alto. It is distinct from the Wastewater Treatment Utility, which provides treatment services for surrounding communities in addition to Palo Alto. Nearly 23,300 customers are connected to the sewer system, approximately 21,450 (92%) of which are residential and 1,850 (8%) of which are non-residential. Residential customers pay a flat fee for 2 Wastewater Collection and Storm Drainage, 1965, Brown and Caldwell Consulting Engineers, pp 4, 6-7, 143 3 Long Range Facilities Plan for the Regional Water Quality Control Plant, August 2012, Carollo Engineers, pg 2-2 4 Wastewater Collection System Master Plan – Capacity Assessment, January 2004, MWH Americas, Inc., pg ES-2 5 CMR 183:90, Infrastructure Review and Update, March 1, 1990 6 Master Plan of the Wastewater Collection System, December 1988, Camp Dresser & McKee, Inc., pg 1-2 7 Wastewater Collection System Master Plan – Capacity Assessment, January 2004, MWH Americas, Inc., pg ES-3 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 9 | P a g e service. Non-residential customers are billed for sewer service based on their metered winter water usage. There is little variability in revenues for this utility. SECTION 4C: COLLECTION SYSTEM The Wastewater Collection Utility delivers all the wastewater it collects to the Regional Water Quality Control Plant (RWQCP) operated by the City of Palo Alto under a partnership agreement with several surrounding communities. Palo Alto is responsible for 37% to 40% of the wastewater sent to the RWQCP. The cost of running the RWQCP is contained in the Wastewater Treatment Utility and is not described in detail in this Financial Plan, but since these costs are a major driver of CPAU’s sewer rates, there is some discussion of future trends in treatment costs in Section 6A: Wastewater Treatment Costs. Treatment costs make up nearly half of the Wastewater Collection Utility’s expenses as shown in Table 1 above. To collect wastewater from its customers and deliver it to the RWQCP, CPAU owns roughly 18,100 sewer laterals (which collect wastewater from customers’ plumbing systems) and 217 miles of sewer mains (which transport the waste to the treatment plant). These laterals and mains, along with the associated manholes and cleanouts, represent the vast majority of infrastructure used to collect wastewater in Palo Alto. CPAU conducts a sewer rehabilitation and replacement program to replace mains over time as they deteriorate or to increase capacity. For more discussion of this program, see Section 6C: Capital Improvement Program (CIP). CIP expense accounts for roughly a quarter of the utility’s expenditures. In addition to its CIP, CPAU performs various maintenance activities on the sewer system. These include inspecting and repairing sewer laterals, responding to sewer overflows, regularly cleaning sections of the system heavily impacted by fats, oils, and grease (FOG), and building and replacing sewer laterals for new or redeveloped buildings. The utility also shares the costs of other operational activities (such as customer service, billing, equipment maintenance, and street restoration) with the City’s other utilities. These maintenance and operations expenses, as well as associated administration, debt service, rent, and other costs, make up another quarter of the utility’s expenses. SECTION 4D: COST STRUCTURE AND REVENUE SOURCES In FY 2015, treatment costs represented nearly half of the Wastewater Collection Utility’s costs (53%), followed by Operations (25%) and Capital costs (22%). These expenditures are shown in Figure 1. The utility’s revenue in FY 2015, shown in Figure 2, came primarily from sewer charges (86%), with the remainder coming mainly from capacity and connection fees and other sources (14%). WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 10 | P a g e Figure 1: Cost Structure (FY 2015) Figure 2: Revenue Structure (FY 2015) SECTION 4E: RESERVES STRUCTURE CPAU maintains six reserves for its Wastewater Collection Utility to manage various types of contingencies. These are summarized below, but see Appendix C: Wastewater Collection Utility Reserves Management Practices for more detailed definitions and guidelines for reserve management:  Reserve for Commitments: A reserve equal to the utility’s outstanding contract liabilities for the current fiscal year. Most City funds, including the General Fund, have a Commitments Reserve.  Reserve for Reappropriations: A reserve for funds dedicated to projects reappropriated by the City Council, nearly all of which are capital projects. Most City funds, including the General Fund, have a Reappropriations Reserve.  Capital Improvement Program (CIP) Reserve: The CIP reserve can be used to accumulate funds for future expenditure on CIP projects and is anticipated to be empty unless a major one-time CIP expenditure is expected in future years. It also acts as a contingency reserve for the CIP. This type of reserve is used in other utility funds (Electric, Gas, and Water) as well.  Rate Stabilization Reserve: This reserve is intended to be empty unless one or more large rate increases are anticipated in the forecast period. In that case, funds can be accumulated to spread the impact of those future rate increases across multiple years. This type of reserve is used in other utility funds (Electric, Gas, and Water) as well.  Operations Reserve: This is the primary contingency reserve for the Wastewater Collection Utility, and is used to manage yearly variances from budget for operational costs. This type of reserve is used in other utility funds (Electric, Gas, and Water) as well.  Unassigned Reserve: This reserve is for any funds not assigned to the other reserves and is normally empty. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 11 | P a g e SECTION 4F: COMPETITIVENESS Table 6 shows the monthly sewer bills for residential customers compared to what they would be in surrounding communities. The annual sewer bill for a Palo Alto customer is $383 under current rates, 32% lower than the average neighboring community. Palo Alto has the third lowest bill of the group. Table 6: Residential Monthly Sewer Bill Comparison Palo Alto Neighboring Communities Neighboring Community Average Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward 31.95 81.08 74.95 28.80 32.01 37.94 28.93 47.29 Based on rates as of February 2016 If the proposed rate change discussed in Section 3B: Current and Proposed Rates is adopted by Council, and assuming other agencies do not change their sewer rates, Palo Alto would be 26% lower than the average neighboring community and retain the third lowest bill. Table 7 compares the sewer bills for two classes of commercial customers to what they would be under surrounding communities’ rate schedules. Note that other communities often have specific rates for industrial customers that discharge high intensity wastewater, such as food processors or chemical or electronics manufacturers, but Palo Alto does not currently have any customers that require these special rates. Palo Alto is less competitive with surrounding cities with regards to commercial sewer rates, but is not the most expensive jurisdiction. Table 7: Commercial Monthly Sewer Bill Comparison Palo Alto Neighboring Communities Neighboring Community Average Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward General Commercial $86.24 $125.58 $74.95 $52.78 $44.82 $60.06 $61.18 $69.90 Restaurant $533.12 $626.08 $686.78 $412.16 $121.68 $537.60 $463.12 $474.57 Based on rates as of February 2016 SECTION 5: UTILITY FINANCIAL PROJECTIONS SECTION 5A: FY 2011 TO FY 2015 COST AND REVENUE TRENDS Figure 3 shows the Wastewater Collection Utility’s actual expenses and revenues for the past five years and projections through FY 2026. For FY 2011 through FY 2015, Operations costs grew at about the pace of inflation, at around 2% per year. Capital Investment expenses actually saw a slight contraction over this period, but this was partially due to backlogged projects necessitating a short term lowering of CIP budgets. Treatment costs during this time rose by 4% annually on average. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 12 | P a g e Since the revenue for this utility is very stable, revenue changes closely follow rate changes. The other large revenue item of note is the continued connection and capacity fees from new construction. These fees have grown dramatically since FY 2010, and it is uncertain when this trend may dampen. Figure 3: Wastewater Collection Utility Expenses, Revenues and Rate Changes Actual Costs through FY 2015 and Projections through FY 2026 SECTION 5B: FY 2015 RESULTS Forecast sources of funds for FY 2015 were higher than projected by $137,000, but expenses related to Administration and Customer Service activities came in well below expected budget. Total FY 2015 expenses were $16.15 million compared to projections of $18.64 million in the FY 2016 Financial Plan. Table 8 summarizes the variances from forecast. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 13 | P a g e Table 8: FY 2015, Actual Results vs. Financial Plan Forecast Net Cost/ (Benefit) Type of change Admin and customer service costs lower than projected (1,985,000) Cost savings Connection, capacity fees and other revenues were higher than forecasted (489,000) Revenue increase Sales revenues lower than forecast 352,000 Revenue decrease Operations, capital and other cost savings (502,000) Cost savings Net Cost / (Benefit) of Variances ($2,625,000) SECTION 5C: FY 2016 PROJECTIONS There are no notable changes from the FY 2016 budget identified at this time. SECTION 5D: FY 2017 – FY 2026 PROJECTIONS Staff has prepared a forecast of costs and revenues through FY 2026. As shown in Figure 3 above (and, in more detail, in Appendix A: Wastewater Collection Financial Forecast Detail), the Wastewater Collection Utility’s total costs are projected to increase by roughly 4.4% per year on average for FY 2016 through FY 2026. The majority of this increase is borne by projected treatment cost increases. The treatment plant itself is facing the need for major upgrades in coming years, both due to age of equipment and constantly changing environmental regulations. While the costs of the plant are shared among member agencies, Palo Alto is still expected to see average cost increases of 6.3% per year over the forecast horizon. Revenues are shown by the red line in Figure 3, and what is notable here is that costs have been generally higher than revenue. While some relief was experienced during times of lower CIP expenditures, this trend of under-collection continues into the future, resulting in a rapid reduction of reserves. A path of 9% and 10% annual rate increases in the near term, decreasing to more inflationary increases in outer years, is required to keep reserves from dropping too low. Figure 4 below shows the relative drop in reserves, only showing slowing replenishment after the projected 10% increase in FY 2018. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 14 | P a g e Figure 4: Wastewater Collection Reserves Projections SECTION 5E: RISK ASSESSMENT AND RESERVES ADEQUACY The Wastewater Collection Utility currently has one contingency reserve, the Operations Reserve, and this Financial Plan maintains reserves within the approved guideline levels throughout the forecast period, as shown in Figure 5 below. Reserve levels also exceed the short term risk assessment for the utility. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 15 | P a g e Figure 5: Operations Reserve Adequacy Staff performs an annual assessment of risks for the Wastewater Collection Utility. For this evaluation, staff estimates the revenue shortfall due to: 1.the maximum observed budget-to-actual variance in one year during the past five years; 2.an increase of 10% in system improvement CIP expenditures for the year; and 3.an increase of 10% in treatment costs. Table 9 summarizes the risk assessment calculation for the Wastewater Collection Utility through FY 2021. The Operations Reserve is projected to be adequate to manage these levels of risk over the entire forecast period. Table 9: Wastewater Collection Risk Assessment FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total Revenue ($000) 17,505 19,249 20,989 22,474 23,832 Max. Historical Budget-to-Actual variance 3% 3% 3% 3% 3% Budget-to-Actual Risk ($000) 525 577 630 674 715 System Rehabilitation CIP Budget ($000) 4,458 4,590 4,726 4,867 5,011 CIP Contingency @10% ($000) 446 459 473 487 501 Treatment Budget ($000) 9,855 10,446 11,073 11,737 12,442 Treatment Cost Contingency @10% ($000) 986 1,045 1,107 1,174 1,244 Total risk assessment value ($000) 1,957 2,081 2,210 2,335 2,460 Projected Operations Reserve Level ($000) 3,386 2,837 3,048 3,780 4,793 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 16 | P a g e SECTION 5F: ALTERNATE SCENARIOS At its February 2016 meeting, the UAC suggested that staff prepare two alternate scenarios for rate increases. The first (“Target”) scenario keeps the Operations Reserve at or near the Target level during the forecast period. The second (“Minimum”) scenario tries to mitigate rate increases and get as near to the minimum reserve level as possible for five years before moving to Target level. Rate trajectories for both alternate scenarios as well as the proposed rate adjustments are shown in Table 10 below. Staff also modeled a scenario with no wastewater rate increase in FY 2017. This scenario decreases the Operations Reserve to the Risk Assessment value, and requires a 25% in FY 2018 to keep reserves at that value for one more year, before net revenue growth starts. Table 10: Projected Wastewater Rate Trajectory for FY 2017 to FY 2026 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Proposed 9% 10% 9% 7% 6% 4% 4% 4% 4% 4% Target 16% 9% 4% 4% 5% 5% 4% 6% 4% 4% Minimum 5% 19% 4% 4% 6% 6% 6% 6% 5% 4% The Target scenario, represented in Figure 6 below, requires a 16% rate increase (larger than the proposed 9% increase) in FY 2017, but reduces the rate increase slightly in FY 2018. The Minimum scenario, represented in Figure 7 below, allows a lower rate increase in FY 2017, but requires a significant rate increase (19%) in FY 2018. Staff recommends a 9% wastewater rate increase in FY 2017 to smooth the rate increases over the next two years while keeping the Wastewater Collection Operations Reserve at healthy levels. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 17 | P a g e Figure 6: Operations Reserve at Target Level Figure 7: Operations Reserve at Minimum for FY 2017 through FY 2021 WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 18 | P a g e SECTION 5G: LONG-TERM OUTLOOK In the longer term (5 to 35 years) the primary factor that could lead to increased costs for the Wastewater Collection Utility are major upgrades at the RWQCP, a share of which will be allocated to the utility as part of treatment costs. These upgrades includes replacement or rehabilitation of the parts of the facility that pump raw sewage to the main treatment works (the headworks), separate out primary sludge (the primary settling tank), process sludge (the bio-solids facility), and treat wastewater (the fixed film reactors). Upgrades to the laboratories and operational buildings are planned as well. In addition, the 72-inch regional trunk sewer line flowing into the plant needs to be evaluated and rehabilitated. SECTION 6: DETAILS AND ASSUMPTIONS SECTION 6A: WASTEWATER TREATMENT COSTS Treatment expenses represent the Wastewater Collection Utility’s share of the costs of operating the RWQCP. Per the partnership agreements between Palo Alto and its partner agencies, these charges are assessed based on a formula that takes into account the total amount of wastewater delivered, the amount of organic material in it, its ammonia content, and the total suspended solids it is carrying. The Wastewater Collection Utility’s assessed share of the RWQCP’s revenue requirement fluctuates in the 38% to 40% range. Mountain View is the other large agency served by the RWQCP (39% of the revenue requirement for FY 2014) with the smaller agencies (Stanford, Los Altos, East Palo Alto, and Los Altos Hills) making up the remainder of the flow to the treatment plant. Due to the ongoing drought and reduced wastewater flows to the plant, concentrations of chemicals and solids have increased. The amount of chemicals needed to counteract and treat this more concentrated wastewater increases and the cost of those chemicals has gone up in recent years. Therefore, FY 2017 treatment costs are projected to increase by 7%, while over the forecast horizon in general treatment costs are expected to rise by 6% per year. The longer term cost increases are primarily due to increased CIP spending by the RWQCP. Based on detailed project cost projections provided by RWQCP staff, treatment costs are likely to continue to increase by roughly 5% per year through at least 2030. Two of Palo Alto’s comparison cities, Mountain View and Los Altos, are partners in the RWQCP and will see similar increases, but other comparison agencies may not. SECTION 6B: OPERATIONS Operations costs include the Customer Service, Distribution Operations, Engineering, and Allocated Charges categories in Appendix A: Wastewater Collection Financial Forecast Detail. Debt service, rent, and transfers are also included in this category. Customer Service costs are primarily related to the call center and collections on delinquent accounts. The Distribution Operations category includes preventative and corrective maintenance on sewer mains and laterals, investigation of sewer overflows, regular cleaning of heavily impacted sections of the sewer system, and services shared with other utilities (such as street restoration and WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 19 | P a g e equipment maintenance). Allocated Charges include the costs of accounting, purchasing, legal, and other administrative functions provided by the City’s General Fund staff, as well as shared communications services and Utilities Department administrative overhead and billing system maintenance costs. Operations costs are projected to increase by 3% per year, on average, over the forecast period. Underlying these projections are salary and benefit, consumer price index, and other cost projections used in the City’s long-range financial forecast. SECTION 6C: CAPITAL IMPROVEMENT PROGRAM (CIP) The Wastewater Collection Utility’s CIP consists of the following programs:  The Sewer System Replacement/Rehabilitation Program, under which the Wastewater Collection Utility replaces aging sewer mains.  Customer Connections, which covers the cost when the Wastewater Collection Utility installs new services or upgrades existing services at a customer’s request in response to development or redevelopment. CPAU charges a fee to these customers to cover the cost of these projects.  Ongoing Projects, which covers the cost of replacing degraded manholes and sewer laterals, as well as the cost of capitalized tools and equipment. The Sewer System Replacement and Rehabilitation Program funds the replacement of deteriorating sewer mains and projects to increase capacity in various parts of the sewer system. The sewer system consists of over 217 miles of mains, and CPAU uses a variety of tools to establish which sections are in need of replacement. Maintenance statistics (such as records of the location and number of sewer overflows on the system) and videotape of sewer mains during regular cleaning can reveal areas with large amounts of deteriorating pipe. CPAU uses a scoring system to prioritize which mains to replace first, and coordinates with the Public Works street maintenance program to avoid cutting into newly repaved streets. A major goal of the program is to minimize groundwater and rainwater infiltration. As mains deteriorate they begin to allow groundwater and rainwater to infiltrate the system. Some level of infiltration is expected on any sewer system, but if there is too much, the combined flow of wastewater and groundwater/rainwater can overwhelm the capacity of various parts of the sewer system. Reducing infiltration can reduce the need to expand the system to accommodate increased flow. To achieve this goal, deteriorating mains are either repaired with a plastic lining or replaced. CPAU replaces or repairs approximately 25,000 feet of main per year, or 2.5% of the system. The CIP program also funds sewer capacity improvements. CPAU uses a hydraulic model, data from various flow meters on the system, and land use data to identify sections of the system that are being overloaded. When sewer mains are operating at or above their capacity on a regular basis it will increase the likelihood of sewer overflows. CPAU also does occasional comprehensive master planning studies to identify necessary capacity improvements. The most recent study, in 2004, identified eight projects, three of which have been completed. The WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 20 | P a g e remaining four projects are low priority projects and will be scheduled and planned as the need arises. Over the last few years, main replacement costs have been increasing for Wastewater as well as the Gas and Water utilities. The replacement cost per linear foot has increased by between 25 and 50% in some cases. Several factors may be contributing to this. Economic recovery in the Bay Area, as well as a greater focus on infrastructure improvement by many municipal agencies and utilities could be creating high demand for contractors in this field. There may be ongoing greater costs for newer, more leak resistant pipe materials. Should these trends prove to be less than short-term phenomena, wastewater main replacement budgets may need to be increased by $1.5 to $1.7 million more per year to maintain the current pace of replacement. Since the last master plan study was updated over a decade ago, and due to these escalating costs, staff is considering a new wastewater collection system master plan study, tentatively planned for 2016, to evaluate the current state of the sewer system and determine the optimal rate of main replacement in future years. The process may reveal a need for a higher or lower replacement, or possibly target areas for more urgent focus. In the case that prices remain high and the updated plan shows a need for similar rates of replacement that CPAU had previously planned, CIP costs will rise. Customer Connections costs are projected to increase steadily by around 3% each year through the end of the forecast period. Ongoing projects are seeing a temporary surge in FY 2016 but are expected to drop by $200,000 in FY 2017, then resume a path of cost increases similar to Customer Connections. Actual expenses for these projects fluctuate annually depending on how many defective laterals and manholes are discovered during routine maintenance, as well as how much development and redevelopment is going on that prompts the replacement or upgrade of sewer laterals. It is worth noting that property owners pay a fee for sewer lateral replacement or expansion during redevelopment, so when the number of projects increases, so does fee revenue. Projected CIP spending is displayed in Table 11 for the 5-year financial forecast period. Table 11: Projected CIP Spending Aside from Customer Connections, the CIP plan for FY 2017 to FY 2021 is funded by sewer rates and capacity fees. The details of the plan are shown in Appendix B: Wastewater Collection Utility Capital Improvement Program (CIP) Detail. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 21 | P a g e SECTION 6D: DEBT SERVICE The Wastewater Collection Utility currently pays its share of one bond issuance, the 1999 Utility Revenue Bonds, Series A, which is due to be retired in 2024. This $17.7 million issuance refinanced various earlier Storm Drain, Wastewater Treatment, and Wastewater Collection Utility bond issuances. The Wastewater Collection Utility’s share of the issuance was roughly $1.9 million. This amount represented the second refinancing of the remaining principal of a 1990 bond issuance which itself was a refinancing of a 1985 issuance that financed a variety of improvements to the sewer system. The cost of debt service for the Wastewater Collection Utility’s share of this bond issuance for the financial forecast period is roughly $128,000 per year as shown in Table 12 below. Table 12: Wastewater Collection Utility Debt Service ($000) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 1999 Utility Revenue Bonds, Series A 128 128 128 128 128 128 The 1999 Utility Revenue Bonds include two covenants stating that 1) the Wastewater Collection Utility will maintain a debt coverage ratio of 125% of debt service, and 2) that the City will maintain “Available Reserves”8 equal to five times the annual debt service. The current financial plan maintains compliance with both covenants throughout the forecast period. Compliance with covenant one is shown below in Table 13, below. Due to the small size of the annual debt service payment for these bonds, the Wastewater Collection Utility’s Operations Reserve alone more than satisfies the second covenant at more than 30 times annual debt service throughout the forecast period. Table 13: Debt Service Coverage Ratio ($000) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Revenues 19,565 21,359 23,099 24,647 26,007 27,026 Expenses (Excl. CIP and Debt Service) (16,388) (17,184) (18,015) (18,891) (19,810) (20,779) Net Revenues 3,177 4,175 5,084 5,756 6,197 6,247 Debt Service 128 128 128 128 128 128 Coverage Ratio 2482% 3262% 3972% 4497% 4841% 4880% The Wastewater Collection Utility’s reserves (but not its net revenues) are also considered security for the Storm Drain and Wastewater Treatment Utilities’ shares of the debt service on the 1999 bonds. Throughout the term of the bonds there remains a small risk that the Wastewater Collection Utility’s reserves could be called upon to make a debt service payment on behalf of one of those utilities if it cannot meet its debt service obligations. Staff does not foresee this occurring based on the current financial condition of those utilities. If the Wastewater Collection Utility’s reserves were used this way, any amounts advanced would have to be repaid by the borrowing utility. 8 Available Reserves as defined in the 1999 Utility Revenue Bonds included reserves for the Water, Wastewater Treatment, Wastewater Collection, Refuse, Storm Drain, Electric, and Gas Utilities WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 22 | P a g e One other bond series is secured by the net revenues (but not the reserves) of the Wastewater Collection Utility. The 1995 Series A Utility Revenue Bonds issued for the Storm Drain utility was secured by the net revenues of the City’s “Enterprise,” which was defined as the City’s water, gas, wastewater, storm drain, and electric utilities, and are senior to the 1999 bonds referenced above. Debt service payments of roughly $680,000 per year are made on the 1995 Series A bonds by the City’s Storm Drain Utility, and staff does not currently foresee any risk of that utility being unable to make payment. SECTION 6E: OTHER REVENUES The utility has seen substantial increases in connection and capacity fee revenues in recent years, offsetting the need for increased sales revenue in the past, and these are assumed to continue, albeit slightly reduced from current levels. Income from interest and transfers in are projected to remain steady through the forecast horizon. SECTION 7: COMMUNICATIONS PLAN The FY 2017 Wastewater Collection Utility communications strategy covers three primary areas: rates, operations and infrastructure, and safety. Communication about wastewater rate adjustments will highlight the important infrastructure and operations upgrades that are occurring at the Regional Water Quality Control Plant to improve wastewater collection utility services. To keep customers apprised of the status and accomplishments of CIP projects, a network of project web pages are maintained and updated as needed. Traffic is driven to the website via ads in publications, newspaper inserts, social media and email blasts. An important communications topic for the wastewater utility is avoiding sewer back-ups due to FOG (fats, oil and grease) and trash being dumped down drains and toilets. Safety topics are emphasized year-round. Staff continues its outreach goal of educating customers about the utility’s gas-sewer line cross-bore inspection program, including the importance of calling Utilities first when there is a sewer back-up. Promotional activity about wastewater utility maintenance and safety operations includes use of bill inserts, ads in local print publications, website pages, email blasts and social media. While print materials and website pages feature prominently, CPAU is increasing the outreach emphasis on use of direct mail, social media and digital advertising including videos and short commercials on the local television channels. Staff is also attending more community safety/emergency preparation events and neighborhood meetings. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 23 | P a g e APPENDICES Appendix A: Wastewater Collection Financial Forecast Detail Appendix B: Wastewater Collection Utility Capital Improvement Program (CIP) Detail Appendix C: Wastewater Collection Utility Reserves Management Practices Appendix D: Sample of Wastewater Collection Outreach Materials WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 24 | P a g e APPENDIX A: WASTEWATER COLLECTION FINANCIAL FORECAST DETAIL WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 25 | P a g e APPENDIX B: WASTEWATER COLLECTION UTILITY CAPITAL IMPROVEMENT PROGRAM (CIP) DETAIL WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 26 | P a g e APPENDIX C: WASTEWATER COLLECTION UTILITY RESERVES MANAGEMENT PRACTICES The following reserves management practices shall be used when developing the Wastewater Collection Utility Financial Plan: Section 1. Definitions a) “Financial Planning Period” – The Financial Planning Period is the range of future fiscal years covered by the Financial Plan. For example, if the Financial Plan delivered in conjunction with the FY 2015 budget includes projections for FY 2015 to FY 2019, FY 2015 to FY 2019 would be the Financial Planning Period. b) “Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers to the Utility’s Unrestricted Net Assets. c) “Net Assets” - The Government Accounting Standards Board defines a Utility’s Net Assets as the difference between its assets and liabilities. d) “Unrestricted Net Assets” - The portion of the Utility’s Net Assets not invested in capital assets (net of related debt) or restricted for debt service or other restricted purposes. Section 2. Reserves The Wastewater Collection Utility’s Fund Balance is reserved for the following purposes: a) For existing contracts, as described in Section 3 (Reserve for Commitments) b) For operating and capital budgets re-appropriated from previous years, as described in Section 4 (Reserve for Re-appropriations) c) For cash flow management and contingencies related to the Wastewater Collection Utility’s Capital Improvement Program (CIP), as described in Section 5 (CIP Reserve) d) For rate stabilization, as described in Section 6 (Rate Stabilization Reserve) e) For operating contingencies, as described in Section 7 (Operations Reserve) f) Any funds not included in the other reserves will be considered Unassigned Reserves and shall be returned to ratepayers or assigned a specific purpose as described in Section 8 (Unassigned Reserves). Section 3. Reserve for Commitments At the end of each fiscal year the Reserve for Commitments will be set to an amount equal to the total remaining spending authority for all contracts in force for the Wastewater Collection Utility at that time. Section 4. Reserve for Re-appropriations At the end of each fiscal year the Reserve for Re-appropriations will be set to an amount equal to the amount of all remaining capital and non-capital budgets, if any, that will be re- appropriated to the following fiscal year in accordance with Palo Alto Municipal Code Section 2.28.090. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 27 | P a g e Section 5. CIP Reserve The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for capital contingencies. Staff will manage the CIP Reserve according to the following practices: a) The following guideline levels are set forth for the CIP Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of CIP expense budgeted for that year. Minimum Level 12 months of budgeted CIP expense Maximum Level 24 months of budgeted CIP expense b) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and the Reserve for Commitments when funds are added or removed from to that reserve as a result of a change in contractual commitments related to CIP projects. Any other additions to or withdrawals from the CIP reserve require Council action. c) Minimum Level: i) Funds held in the Reserve for Commitments may be counted as part of the CIP Reserve for the purpose of determining compliance with the CIP Reserve minimum guideline level. ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered by the end of the following fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is below its minimum level at the end of FY 2017, staff must present a plan by June 30, 2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff may present, and the Council may adopt, an alternative plan that takes longer than one year to replenish the reserve, or that does so in a shorter period of time. d) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds may be added to this reserve. If there are funds in this reserve in excess of the maximum level staff must propose to transfer these funds to another reserve or return them to ratepayers in the next Financial Plan. Staff may also seek City Council to approve holding funds in this reserve in excess of the maximum level if they are held for a specific future purpose related to the CIP. Section 6. Rate Stabilization Reserve Funds may be added to the Rate Stabilization Reserve by action of the City Council and held to manage the trajectory of future year rate increases. Withdrawal of funds from the Rate Stabilization Reserve requires Council action. If there are funds in the Rate Stabilization Reserve at the end of any fiscal year, any subsequent Wastewater Collection Utility Financial Plan must result in the withdrawal of all funds from this Reserve by the end of the Financial Planning Period. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 28 | P a g e Section 7. Operations Reserve The Operations Reserve is used to manage normal variations in costs and as a reserve for contingencies. Any portion of the Wastewater Collection Utility’s Fund Balance not included in the reserves described in Section 3-Section 6 above will be included in the Operations Reserve unless this reserve has reached its maximum level as set forth in Section 7(d) below. Staff will manage the Operations Reserve according to the following practices: a) The following guideline levels are set forth for the Operations Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of Operations and Maintenance (O&M) and commodity expense forecasted for that year in the Financial Plan. Minimum Level 60 days of O&M and commodity expense Target Level 105 days of O&M and commodity expense Maximum Level 150 days of O&M and commodity expense b) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Operations Reserve are lower than the minimum level set forth above, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered within six months of the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the following fiscal year. For example, if the Operations Reserve is below its minimum level at the end of FY 2014, staff must present a plan by December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In addition, staff may present, and the Council may adopt, an alternative plan that takes longer than one year to replenish the reserve. c) Target Level: If, at the end of any fiscal year, the Operations Reserve is higher or lower than the target level, any Financial Plan created for the Wastewater Collection Utility shall be designed to return the Operations Reserve to its target level within four years. d) Maximum Level: If, at any time, the Operations Reserve reaches its maximum level, no funds may be added to this reserve. Any further increase in the Wastewater Collection Utility’s Fund Balance shall be automatically included in the Unassigned Reserve described in Section 8, below. Section 8. Unassigned Reserve If the Operations Reserve reaches its maximum level, any further additions to the Wastewater Collection Utility’s Fund Balance will be held in the Unassigned Reserve. If there are any funds in the Unassigned Reserve at the end of any fiscal year, the next Financial Plan presented to the City Council must include a plan to assign them to a specific purpose or return them to the Wastewater Collection Utility ratepayers by the end of the first fiscal year of the next Financial Planning Period. For example, if there were funds in the Unassigned Reserves at the end of FY 2015, and the next Financial Planning Period is FY 2016 through FY 2020, the Financial Plan shall include a plan to return or assign any funds in the Unassigned Reserve by the end of FY 2016. Staff may present an alternative plan that retains these funds or returns them over a longer period of time. WASTEWATER COLLECTION UTILITY FINANCIAL PLAN F e b r u a r y 2 0 1 6 29 | P a g e APPENDIX D: SAMPLE OF WASTEWATER COLLECTION OUTREACH MATERIALS Attachment C * NOT YET APPROVED * Resolution No. _________ Resolution of the Council of the City of Palo Alto Increasing Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On ____, 2016, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. C. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the ________ 2016 public hearing was mailed to all City of Palo Alto Utilities wastewater customers by _______, 2016. D. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed wastewater rate amendments, therefore a majority protest does not exist against the proposal. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-1 (Residential Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-1, as amended, shall become effective July 1, 2016. / / / / / / 160322 sdl 6053687 Attachment C * NOT YET APPROVED * SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-2 (Commercial Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-2, as amended, shall become effective July 1, 2016. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-6, as amended, shall become effective July 1, 2016. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-7, as amended, shall become effective July 1, 2016. SECTION 5. The Council finds that the revenue derived from the wastewater rates approved by this resolution do not exceed the funds required to provide water service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 6. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 7. The Council finds that the adoption of this resolution changing wastewater collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. / / / / / / / / 160322 sdl 6053687 Attachment C * NOT YET APPROVED * 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services 160322 sdl 6053687 RESIDENTIAL WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-1-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-1-1 A. APPLICABILITY: This schedule applies to each occupied residential dwelling unit. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater service. C. RATES: Per Month Each domestic dwelling unit .................................................................................................. $3134.8395 D. SPECIAL NOTES: 1. Any dwelling unit being individually served by a water, gas, or electric meter will be considered continuously occupied. 2. For two or more occupied dwelling units served by one water meter, the monthly wastewater charge will be calculated by multiplying the current wastewater rate by the number of dwelling units. 3. Each developed separate lot shall have a separate service lateral to a sanitary main or manhole. {End} ATTACHMENT D COMMERCIAL WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-2-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-2-1 A. APPLICABILITY: This schedule applies to all commercial establishments other than those served under Utility Rate Schedule S-1 (Domestic Residential Wastewater Collection and Disposal), Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) or Rate Schedule S-7 (Commercial Establishments Wastewater Disposal – Industrial Discharger). B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Minimum Charge per connection per month .............................................................$3134.8395 2. Quantity Rates, per 100 cubic feet (See Section D.1) ............................................. $6.7116 D. SPECIAL NOTES: 1. The monthly charge for the quantity rate set forth in Section C.2 of this rate schedule will be based upon the average water usage for the months of January, February and March, and applied in the following July. If a water meter is identified as exclusively serving irrigation landscaping, such meter will be exempted from wastewater charge calculations. Customers without an applicable usage history will be charged at the minimum monthly charge until such time as such usage may reasonably be established by the City of Palo Alto Utilities Department. 2. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City and the Customer. {End} RESTAURANT WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-6 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-6-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-6-1 A. APPLICABILITY: This schedule applies to all restaurants. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Minimum charge per connection per month ......................................................... $3134.8395 2. Quantity Rates, per 100 cubic feet of monthly metered water usage ......................... $ 910.5238 D. SPECIAL NOTES: 1. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City and the Customer. {End} COMMERCIAL WASTEWATER COLLECTION AND DISPOSAL –INDUSTRIAL DISCHARGER UTILITY RATE SCHEDULE S-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-7-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-7-1 A. APPLICABILITY: This schedule applies to any establishment requiring sampling of industrial discharges in excess of 25,000 gallons per day, or special discharge monitoring, as defined in Rule and Regulation 23, Section D. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Collection System Operation, Maintenance, and Infiltration Inflow: $1.7894 per 100 cubic feet of metered water use. 2. Advanced Waste Treatment Operations and Maintenance Charge: $1.1405 per 100 cubic feet of metered water use 3. $ 247.56 per 1000 pounds (lbs) of COD (Chemical Oxygen Demand) 4. $ 596.62 per 1000 lbs of SS (Suspended Solids) 5. $ 3,983.85 per 1000 lbs of NH3 (Ammonia) 6. $ 14,781.25 per 1000 lbs of toxics (chromium, copper, cyanide, lead, nickel, silver, and zinc) D. SPECIAL NOTES: 1. Water usage will be determined as defined in Rule and Regulation 23, Section D. If a water meter is identified as exclusively serving irrigation landscaping, such meter will be exempted from wastewater charge calculations. 2. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City of Palo Alto and the Customer. 3. Charges for large discharges will be determined on the basis of sampling as outlined in Utilities Rule and Regulation 23, Section D. However, for purposes of arriving at an accurate flow estimate, discharge meters, if installed, can be utilized to measure outflow for billing purposes. Annual charges will be determined and allocated monthly for billing purposes. {End} EXCERPTED DRAFT MINUTES OF THE MARCH 2, 2016 UTILITIES ADVISORY COMMISSION MEETING ITEM 1: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Action Council Adopt: (1) a Resolution Approving the Fiscal Year 2017 Wastewater Collection Financial Plan; and (2) a Resolution Increasing Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) Acting Rates Manager Eric Keniston provided a summary of the written report. He said that the forecast of costs and rate changes has not changed from what the UAC saw last month when it reviewed the preliminary financial projections. He said that the primary driver for the 9% rate increase requested as well as the rate increases projected for the next several years is that the costs of wastewater treatment are rising quickly. He noted that the Rate Stabilization Reserve would be exhausted by the end of fiscal year (FY 2016 and that the Operations Reserve is being drawn down as well. He said that the long-term rate projections assumed continuing increases in treatment costs as well as operational costs. Keniston noted that the 9% rate increase proposed is exactly what was projected in last year’s Financial Plan. He noted that the rate trajectory in this year’s Financial Plan result in the Operations Reserve going down to the minimum level in FY 2018 and FY 2019 before increasing to the target level by FY 2022. He said that the 9% increase is the same for all customer groups and that the increase for residential customers is $2.88 per month. Keniston said that at its meeting last month, the UAC asked for scenarios showing the Operations Reserve held to the minimum level and at the target level. He showed the in the minimum reserve scenario, the FY 2017 rate increase could be held to 5% instead of 9%, but that the rate increase for FY 2018 would be 19%. For the target reserve scenario, the FY 2017 rate increase would have to be 16% for FY 2017, following by a 9% increase in FY 2018 with somewhat lower rate increases in the following years. After developing these alternate scenarios, staff did not change its recommendation for a 9% rate increase for FY 2017. Commissioner Danaher, noting that the reserve minimum is only about $2 million, asked what would be done if the revenues were not sufficient and more money was needed. Keniston said that a rate increase would be pursued if that ever arose. Such a mid-year rate increase would need to go through the normal review process starting with the UAC, then consideration by the ATTACHMENT E Finance Committee—and the Proposition 218 45-day noticing process—with final decision by the Council. Commissioner Ballantine asked if there is always enough notice of what its needs are going to be. Keniston noted that in the Wastewater Collection Utility, the expense profile is fairly flat and known ahead of the year and there shouldn’t be a surprise need for extra money. Commissioner Ballantine asked if revenues could fall due to drought due to lowered water usage. Keniston said that rates for this fund are generally independent of water usage with only the commercial wastewater collection customers having revenues depend on relatively steady wintertime water usage. Residential revenues are the majority of the fund’s revenues and are based on a flat monthly charge so there is no variability due to changes in water usage. Commissioner Danaher asked, if usage falls, do costs go down. Keniston responded that the costs are fixed and revenues are also mostly fixed in the Wastewater Collection Utility and, therefore, not dependent on the flow rate. Keniston said that the residential rates have no element that is based on water flows. Commissioner Eglash noted that the real cause for the dramatic rate increase seems to be the wastewater treatment costs. He asked why those costs rose so much from FY 2014 to FY 2015 and from FY 2015 to FY 2016. Keniston introduced Jamie Allen, Regional Water Quality Control Plant Manager, to describe the components of the treatment plant costs that are passed on the plant partners, including Palo Alto. Allen explained that there was an accounting change that lowered the costs for one year in FY 2014 so that year’s costs are anomalous. He said that the majority of the wastewater treatment costs are operations costs with two categories of capital improvement program (CIP) costs—“minor”, or rate-funded CIP and major CIP debt service. Operations costs are expected to grow at the same rate it has for the last 5 years—at about 5.5% per year and CIP costs are discussed with the plant partners and minor CIP costs grow at about the rate of inflation, about 2.6% per year. Major CIP debt service is for planned plant upgrades. Allen showed a breakdown of the FY 2017 wastewater treatment costs: 47% for salaries and benefits for operators, engineers, chemists, etc.; 12% for allocated charges for services provided by the City such as HR, attorney, IT, finance, etc.; 9% for utilities expenses (electric, gas, water); 11% for minor CIP projects; 7% for contract services; 3% for debt service for major CIP projects; and 10% for general expense and supplies and materials. Commissioner Eglash summarized this to say that minor CIP are only modestly growing, major CIP expenses are growing from about $0.5 million per year to $2 million per year and that operations expenses are growing by 5.5% per year, a modest and steady rate. He noted that the charts showed that expenses were lower than revenues for FY 2014 and FY 2015, which replenished the reserves. In FY 2016, costs were above revenues. He said that rate increases on the order of 9% per year for the forecast horizon period don’t make sense and are impossible to explain to the public when treatment costs are only rising 5.5% per year. Keniston said that CIP expenditures were lower for the wastewater collection (not for wastewater treatment) in FY 2014 and FY 2015, but that CIP costs are projected to increase over the forecast period. Commissioner Eglash concluded that, based on the numbers, an increase in treatment cost is not the real cause of the high rate increases forecast, but instead there was a period of time when costs were rising, but no rate increases were put into place, which resulted in a drawing down of reserves. Keniston said that reserves will be drawn down in FY 2016 through FY 2018 until revenues balance expenses. Commissioner Eglash agreed that reserves have been depleted over time. Commissioner Danaher asked for an explanation of the difference between wastewater treatment costs and wastewater collection costs. Keniston said that the wastewater treatment fund’s expenses are paid by the plant partners including Palo Alto and that those wastewater treatment costs are an expense for the wastewater collection utility. Interim Utilities Director Shikada said that the wastewater conveyance is a Utilities activity and that wastewater treatment is a Public Works activity and that the combined costs are paid for by ratepayers. Wastewater Collection Utility expenses include the treatment costs, which are a pass through expense from the wastewater treatment plant. Commissioner Schwartz noted that the wastewater collection operations costs increased significantly from FY 2015 to FY 2016. Keniston said that this was due to a one-year accounting anomaly. Assistant Director Jane Ratchye said that the three primary costs buckets for the wastewater collection fund include: 1) operations costs for wastewater collection, which are rising at 2-3% per year; 2) CIP costs for wastewater collection, which are rising at 2-3% per year; and 3) wastewater treatment costs, which are rising at 5-6% per year. The treatment costs that are passed through to the wastewater collection utility are the main driver for increasing costs—and, therefore, rates. Allen pointed out that his breakdown of the wastewater treatment expenses showed the costs in terms of operations, minor CIP and major CIP debt service. He noted that there was a major jump in major CIP debt service in FY 2019 when the dewatering facility would go on line. Commissioner Eglash reiterated the difficulty in explaining that total wastewater collection expenses are rising at 4-5% per year, but we are asking for rate increases of 9-10% per year without driving the reserves below the minimum. He said that a better explanation must be forthcoming or the projected expenses should be reduced. Public Comment Herb Borock said that wastewater treatment plant costs estimates for the future are increasing dramatically, but that no explanation has been provided for the CIP plans at the treatment plant. He said that Council has approved a plan to replace the incinerator with a dewatering and load-out facility and that the current plan is to have an anaerobic digester at the plant. He said that the cost for the anaerobic digester keep increasing dramatically. He said it’s unclear what assumption is in the cost projections regarding what happens after the incinerator is dismantled – will we keep using the haul out facility, or will something be built on site to handle the sludge. Trying to predict future costs depends on the plan and how easy it would be for Council to change direction. He said that the long-term facilities plan at treatment plant should be reviewed again by Council since there are choices about what to do that have impacts on greenhouse gas emissions. He also commented on the Proposition 218 noticing process saying that the Council should support the rate proposals prior to staff issuing the Proposition 218 notices. Commissioner Eglash said that in order to support the proposal, he would need a better understanding of the revenues and expenses over the years. Ratchye pointed to page 24 of the Wastewater Collection Financial Plan (Appendix A: Wastewater Collection Financial Forecast Detail) that is attached to the UAC memo and reminded the UAC that the reserve structure was changed in FY 2015 to lower the reserve amounts and that at the time of the change, there was significant money in the reserves that was placed initially in the new Rate Stabilization Reserve, which would normally have a zero balance. Over FY 2015 and FY 2016, all the funds in the Rate Stabilization Reserve will be drawn down to zero. She said that reserves were being drawn down in FY 2011, FY 2012, and FY 2013, then there were two anomalous lower cost years—in FY 2014 when there was a one-year hiatus in new CIP budgeting and in FY 2015 when reduced operations expenses due to an accounting anomaly—when reserves were somewhat replenished. However, underlying those anomalies, costs were rising and revenues were not keeping pace. As shown on page 24 of the plan, reserves will be drawn down again in FY 2016, FY 2017 and FY 2018 before revenues catch up with expenses. She said that rate increases need to be significant to get revenues to the levels that are needed to cover expenses. Commissioner Eglash said that his understanding from that explanation is that we’ve allowed revenues to fall below expenses during the last few years and we did that because costs were increasing steadily and we chose not to increase rates. The reason we did not increase rates is that reserves were available to draw on. In addition, there were two years with anomalously low cost that somewhat replenished reserves, but we are now at the point when we must increase revenues. He said that he can now see this on page 24 of the plan (line 20: into/(out of) reserves), which shows that reserves were drawn down in FY 2011 through FY 2013, were replenished in the anomalous years of FY 2014 and FY 2015, but that reserves will be drawn down again in FY 2016, FY 2017 and FY 2018 before revenues cover expenses. He said that reviewing line 18: (total uses of funds) shows that expenses increased slightly from FY 2012 to FY 2013, but increased about $3.6 million from FY 2013 to FY 2016 ignoring the anomalous years of FY 2014 and FY 2015. Then costs increase by about 5% from FY 2017 and onward. He said that the costs increases have been hidden from customers. He said that even with adding $4 million to reserves in FY 2014 and FY 2015, that a 9% increase in revenue is needed. He said that it seems like with costs increasing at about 5% per year, we should be fine with 5% per year rate increases. Ratchye pointed out that a one-time adjustment into reserves doesn’t help much with ongoing cost increases whereas a 9% rate increase raises revenue to a new base level upon with a subsequent 9-10% rate increase will increase revenues even more with the power of compounding. Commissioner Eglash said that he was beginning to understand the issue by examining the lines on page 24 of the plan showing the “Total Sources of Funds” and the “Total Uses of Funds,” which show that revenues have not been keeping up with expenses for years. Keniston says that revenues have not kept up with expenses for a period beyond the years shown on the chart on page 24 and was the case in FY 2009 and FY 2010 as well. Commissioner Eglash said that we have been in a long period when rates provided insufficient revenues to cover normal year expenses (ignoring FY 2014 and FY 2015). He asked how revenues could lag expenses for up to 7 years. Ratchye said that the answer to that question is that reserves were high and that the anomalous two years of lower expenses made calling for rate increases hard to justify. In addition, the change to the reserve structure in FY 2015 lowered the amount of reserves that were considered sufficient—and this is the case for all funds, not just the Wastewater Collection Fund. Commissioner Eglash said that the reserves were reduced when we realized that we had more than we needed and we’ve been slowing consuming them over the years and that all customers have been the beneficiaries for several years of holding the line on rates by using the financial reserves. The day of reckoning has been delayed due to the two anomalous years of low expenses. He said that with no rate increase, we would have a $3 million deficit and we don’t have enough reserves to cover that and we need to get back to a place where income covers expenses and staff’s proposal phases in rate increases so that we don’t get to that place until FY 2019. Commissioner Schwartz agreed that the public has been insulated from the increasing costs so now we need to raise rates to cover costs. This can be presented as saving the customers over the last several years when rate increases were low. Commissioner Eglash said that a chart comparing revenues to costs would show the years when there was a deficit and costs were not covered by revenues and for how long this went on. It is the same as if your salary was staying the same, but rent climbs and when you deplete your savings, you have a problem and can’t afford the rent. Chair Foster said that the Council made decisions in past to delay rate increases and now the rates must increase. He said that he recalls that in the past several years, moderate rate increases could have been proposed, but the case for them was somewhat borderline and that there was value in a zero rate increase for the community knowing that, sooner or later, the rates would have to increase. Ratchye agreed and recalled that these conversations occurred every year; for example, last year, staff proposed a 3% gas rate increase followed by a 4% increase the following year, but the feedback was that a 3% increase was so low that it’s not worth it and would be better to have no rate increase and a 7% in the following year. Chair Foster said that there is a desire to insulate customers from rate increases and that, even with a delayed higher rate increase, the customers are not actually paying more over the whole period. Commissioner Ballantine noted that (on the chart on page 24) the allocated charges (line 12) are anomalously low in FY 2015 and that for FY 2016 and forward, those costs are rising. He said that the low cost in FY 2015 could be due to an operational cost saving that year that could be found in future years, but the future forecasts do not include any cost savings that may actually accrue. Commissioner Eglash pointed out the reduced cost for FY 2014 could be repeated in the future, but that the projections show costs only increasing, which may not reflect reality. Ratchye pointed out that the reduced CIP costs in FY 2014 was a cause for consternation in the past as the UAC and Council was concerned that it signaled a slowdown in infrastructure replacement. However, it was only a pause in new funding for CIP to allow staff to catch up to CIP projects in the queue. She also pointed out that the allocated cost line item referred to by Commissioner Ballantine is not related to operational cost savings, but are the costs allocated from the services provided by the City such as HR, City attorney, finance department, etc. and that the reduced charges in FY 2015 were related to an accounting anomaly. Both these one-time cost reductions are not related to finding efficiencies were found and that these efficiencies won’t be found in the future. Commissioner Eglash said that he was now adequately satisfied with the explanations for the need for the rate increase and supports going forward with the staff recommendation. ACTION: Commissioner Danaher made a motion that the UAC recommend that the Council adopt resolutions approving the FY 2017 Wastewater Collection Financial Plan and increasing wastewater rates by amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger). Commissioner Schwartz seconded the motion. The motion carried unanimously (5-0) with Chair Foster, Commissioners Ballantine, Danaher, Eglash, and Schwartz voting yes and Vice Chair Cook and Commissioner Hall absent. Attachment C *NOT YET APPROVED * Resolution No. _________ Resolution of the Council of the City of Palo Alto Increasing Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On June 13, 2016, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. C. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 13, 2016 public hearing was mailed to all City of Palo Alto Utilities wastewater customers by April 29, 2016. D. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed wastewater rate amendments, therefore a majority protest does not exist against the proposal. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-1 (Residential Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-1, as amended, shall become effective July 1, 2016. / / / / / / 160322 sdl 6053687 CMR #6932: ATTACHMENT L Attachment C *NOT YET APPROVED * SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-2 (Commercial Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-2, as amended, shall become effective July 1, 2016. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-6, as amended, shall become effective July 1, 2016. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-7, as amended, shall become effective July 1, 2016. SECTION 5. The Council finds that the revenue derived from the wastewater rates approved by this resolution do not exceed the funds required to provide water service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 6. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 7. The Council finds that the adoption of this resolution changing wastewater collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. / / / / / / / / 160322 sdl 6053687 Attachment C *NOT YET APPROVED * 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services 160322 sdl 6053687 RESIDENTIAL WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-1-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-1-1 A. APPLICABILITY: This schedule applies to each occupied residential dwelling unit. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater service. C. RATES: Per Month Each domestic dwelling unit .................................................................................................. $3134.8395 D. SPECIAL NOTES: 1. Any dwelling unit being individually served by a water, gas, or electric meter will be considered continuously occupied. 2. For two or more occupied dwelling units served by one water meter, the monthly wastewater charge will be calculated by multiplying the current wastewater rate by the number of dwelling units. 3. Each developed separate lot shall have a separate service lateral to a sanitary main or manhole. {End} ATTACHMENT D COMMERCIAL WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-2-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-2-1 A. APPLICABILITY: This schedule applies to all commercial establishments other than those served under Utility Rate Schedule S-1 (Domestic Residential Wastewater Collection and Disposal), Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) or Rate Schedule S-7 (Commercial Establishments Wastewater Disposal – Industrial Discharger). B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Minimum Charge per connection per month .............................................................$3134.8395 2. Quantity Rates, per 100 cubic feet (See Section D.1) ............................................. $6.7116 D. SPECIAL NOTES: 1. The monthly charge for the quantity rate set forth in Section C.2 of this rate schedule will be based upon the average water usage for the months of January, February and March, and applied in the following July. If a water meter is identified as exclusively serving irrigation landscaping, such meter will be exempted from wastewater charge calculations. Customers without an applicable usage history will be charged at the minimum monthly charge until such time as such usage may reasonably be established by the City of Palo Alto Utilities Department. 2. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City and the Customer. {End} RESTAURANT WASTEWATER COLLECTION AND DISPOSAL UTILITY RATE SCHEDULE S-6 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-6-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-6-1 A. APPLICABILITY: This schedule applies to all restaurants. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Minimum charge per connection per month ......................................................... $3134.8395 2. Quantity Rates, per 100 cubic feet of monthly metered water usage ......................... $ 910.5238 D. SPECIAL NOTES: 1. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City and the Customer. {End} COMMERCIAL WASTEWATER COLLECTION AND DISPOSAL –INDUSTRIAL DISCHARGER UTILITY RATE SCHEDULE S-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No S-7-1 Effective 7-1-20156 dated 7-1-20125 Sheet No S-7-1 A. APPLICABILITY: This schedule applies to any establishment requiring sampling of industrial discharges in excess of 25,000 gallons per day, or special discharge monitoring, as defined in Rule and Regulation 23, Section D. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides wastewater services. C. RATES: 1. Collection System Operation, Maintenance, and Infiltration Inflow: $1.7894 per 100 cubic feet of metered water use. 2. Advanced Waste Treatment Operations and Maintenance Charge: $1.1405 per 100 cubic feet of metered water use 3. $ 247.56 per 1000 pounds (lbs) of COD (Chemical Oxygen Demand) 4. $ 596.62 per 1000 lbs of SS (Suspended Solids) 5. $ 3,983.85 per 1000 lbs of NH3 (Ammonia) 6. $ 14,781.25 per 1000 lbs of toxics (chromium, copper, cyanide, lead, nickel, silver, and zinc) D. SPECIAL NOTES: 1. Water usage will be determined as defined in Rule and Regulation 23, Section D. If a water meter is identified as exclusively serving irrigation landscaping, such meter will be exempted from wastewater charge calculations. 2. The City of Palo Alto Utilities Department may require wastewater metering facilities, in which case service will be governed by terms of a special agreement between the City of Palo Alto and the Customer. 3. Charges for large discharges will be determined on the basis of sampling as outlined in Utilities Rule and Regulation 23, Section D. However, for purposes of arriving at an accurate flow estimate, discharge meters, if installed, can be utilized to measure outflow for billing purposes. Annual charges will be determined and allocated monthly for billing purposes. {End} Attachment A *NOT YET APPROVED * Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving the FY 2017 Water Utility Financial Plan R E C I T A L S A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby adopts the FY 2017 Water Utility Financial Plan. SECTION 2. The Council hereby approves the transfer of $4.7 million in FY 2016 from the Rate Stabilization Reserve to the Operations Reserve, as described in the FY 2017 Water Utility Financial Plan approved via this resolution. / / / / / / / / / / // 060322 sdl 6053681 CMR #6932: ATTACHMENT M Attachment A * NOT YET APPROVED * SECTION 3. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services 060322 sdl 6053681 FY 2017 WATER UTILITY FINANCIAL PLAN FY 2017 TO FY 2026 WATER UTILITY FINANCIAL PLAN February 2016 2 | Page FY 2017 WATER UTILITY FINANCIAL PLAN FY 2017 TO FY 2026 TABLE OF CONTENTS Section 1: Definitions and Abbreviations................................................................................ 4 Section 2: Executive Summary and Recommendations ........................................................... 4 Section 2A: Overview of Financial Position .................................................................................. 4 Section 2B: Summary of Proposed Actions .................................................................................. 5 Section 3: Detail of FY 2017 Rate and Reserves Proposals ....................................................... 5 Section 3A: Rate Design ............................................................................................................... 5 Section 3B: Current and Proposed Rates ..................................................................................... 6 Section 3C: Bill Impact of Proposed Rate Changes ...................................................................... 8 Section 3D: Proposed Reserve Transfers ..................................................................................... 9 Section 4: Utility Overview .................................................................................................... 9 Section 4A: Water Utility History ................................................................................................. 9 Section 4B: Customer Base ........................................................................................................ 10 Section 4C: Distribution System ................................................................................................. 11 Section 4D: Cost Structure and Revenue Sources ...................................................................... 11 Section 4E: Reserves Structure ................................................................................................... 12 Section 4F: Competitiveness ...................................................................................................... 12 Section 5: Utility Financial Projections ................................................................................. 13 Section 5A: Load Forecast .......................................................................................................... 13 Section 5B: FY 2011 to FY 2015 Cost and Revenue Trends ........................................................ 14 Section 5C: FY 2015 Results ....................................................................................................... 15 Section 5D: FY 2016 Projections ................................................................................................ 16 Section 5E: FY 2017-FY 2026 Projections ................................................................................... 16 Section 5F: Risk Assessment and Reserves Adequacy ............................................................... 18 Section 5G: Alternate Scenarios................................................................................................. 19 WATER UTILITY FINANCIAL PLAN February 2016 3 | Page Section 5H: Long-Term Outlook ................................................................................................. 21 Section 6: Details and Assumptions ..................................................................................... 21 Section 6A: Water Purchase Costs ............................................................................................. 21 Section 6B: Operations .............................................................................................................. 23 Section 6C: Capital Improvement Program (CIP) ....................................................................... 24 Section 6D: Debt Service ............................................................................................................ 27 Section 6E: Other Revenues ....................................................................................................... 28 Section 6F: Sales Revenues ........................................................................................................ 28 Section 7: Communications Plan .......................................................................................... 28 Appendices ......................................................................................................................... 30 Appendix A: Water Utility Financial Forecast Detail ................................................................. 31 Appendix B: Water Utility Capital Improvement Program (CIP) Detail ..................................... 33 Appendix C: Water Utility Reserves Management Practices ..................................................... 35 Appendix D: Description of Water Utility Operational Activities ............................................... 38 Appendix E: Sample of Water Utility Outreach Communications ............................................. 39 WATER UTILITY FINANCIAL PLAN February 2016 4 | Page SECTION 1: DEFINITIONS AND ABBREVIATIONS BAWSCA Bay Area Water Supply and Conservation Agency CCF The standard unit of measurement for water delivered to water customers, equal to one hundred cubic feet, or roughly 748 gallons. CIP Capital Improvement Program CPAU City of Palo Alto Utilities Department O&M Operations and Maintenance RFC Raftelis Financial Consultants, Inc. SFPUC San Francisco Public Utilities Commission SFWD San Francisco Water Department UAC Utilities Advisory Commission WSIP The SFPUC’s Water System Improvement Program to seismically strengthen the transmission lines of the Hetch Hetchy regional water system. SECTION 2: EXECUTIVE SUMMARY AND RECOMMENDATIONS This document presents a Financial Plan for the City’s Water Utility for the next ten years. This Financial Plan provides revenues to cover the costs of operating the utility safely over that time while adequately investing for the future. It also addresses the financial risks facing the utility over the short term and long term, and includes measures to mitigate and manage those risks. SECTION 2A: OVERVIEW OF FINANCIAL POSITION By FY 2026, costs for the Water Utility will increase 24% over FY 2016 levels, as shown in Table 1. Most of increase is related to the cost of water supplied by the San Francisco Public Utilities Commission (SFPUC), which is projected to rise 34% in that time due to the issuance of long term debt to finance major seismic improvements to the Hetch Hetchy transmission system. The cost of replacing the water mains in the City’s water distribution system has also increased substantially from the low costs seen during the recent recession, but is projected to remain relatively level during the forecast horizon. Staff projects only inflationary increases to most other costs over the forecast period. Table 1: Expenses for FY 2015 to FY 2026 (Thousand $’s) Expenses ($000) FY 2015 (act.) FY 2016 (est.) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Water Purchases 15,670 17,645 18,899 19,976 21,177 21,259 21,475 21,697 21,915 22,302 23,652 23,426 Operations 15,826 17,442 17,065 17,509 17,960 18,429 18,863 19,276 19,703 20,135 20,578 21,033 Capital Projects 8,580 11,039 10,216 10,012 10,252 10,555 10,867 11,189 11,519 11,860 12,211 12,572 TOTAL 40,077 46,127 46,180 47,498 49,390 50,243 51,205 52,161 53,137 54,297 56,441 57,031 To cover these increases in costs, revenues (and therefore rates) need to increase over the next several years to balance costs and revenues. The rate trajectory shown in Table 2 assumes that WATER UTILITY FINANCIAL PLAN February 2016 5 | Page the drought continues through 2017 and that consumption does not return to its pre-drought levels. Table 2 also compares current rate projections to those projected in last year’s Financial Plan. Table 2: Projected Water Rate Trajectory for FY 2017 to FY 2026 Projection FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Current 6% 9% 9% 6% 2% 2% 2% 3% 5% 3% Last year 8% 8% 8% 3% 1% 2% 3% N/A N/A N/A The Water Utility has a Rate Stabilization Reserve that can be used to smooth rate increases over several years. This Financial Plan projects that these reserves will be exhausted by the end of FY 2017. The Water Utility also has a Capital Improvement Program (CIP) Reserve that can be used to offset one-time unanticipated capital costs. This Financial Plan assumes that the CIP Reserve will be used for unanticipated capital expenses or returned to the Operations Reserve by the end of FY 2017. At that point the Emergency Water Supply and Storage Project and the Water System Master Plan will have been completed, so capital costs will be known with more certainty. Table 3 shows the projected reserve transfers over the forecast period. Table 3: Transfers To/(From) Reserves for FY 2016 to FY 2026 ($000) Reserve FY 2016 FY 2017 FY 2018 to FY 2026 Capital Improvement - (4,000) - Rate Stabilization (4,700) (1,867) - Operations 4,700 5,867 - SECTION 2B: SUMMARY OF PROPOSED ACTIONS Staff proposes the following actions for the Water Utility in FY 2016: 1. Transfer $4.7 million from the Rate Stabilization Reserve to the Operations Reserve. See Section 3D: Proposed Reserve Transfers for more details. Staff proposes the following actions for the Water Utility in FY 2017: 1. Increase rates as shown in Section 3B: Current and Proposed Rates. These changes are projected to increase the system average rate by roughly 6%. 2. Transfer $1.867 million from the Rate Stabilization Reserve to the Operations Reserve. See Section 3D: Proposed Reserve Transfers for more details. 3. Transfer $4 million from the CIP Reserve to the Operations Reserve. SECTION 3: DETAIL OF FY 2017 RATE AND RESERVES PROPOSALS SECTION 3A: RATE DESIGN The Water Utility’s rates are evaluated and implemented in compliance with the cost of service requirements and procedural rules set forth in the California Constitution under Article 13 (per Proposition 218). Current rates were structured based on staff’s assessment of the financial WATER UTILITY FINANCIAL PLAN February 2016 6 | Page position of the Water Utility, and updated using the methodology from the March 2012 Palo Alto Water Cost of Service & Rate Study by Raftelis Financial Consultants, Inc., as well as Raftelis’ 2015 memoranda updating the 2012 Study and analyzing drought rates (Staff Report 2676). Staff plans to review and update this cost of service study in 2 to 3 years, unless any major changes occur to the utility’s operations or customer base that would necessitate an earlier study. Before conducting any new cost of service study, staff will review current rates and the scope of the study with the Utilities Advisory Commission (UAC) and Council to determine the City’s policy priorities. SECTION 3B: CURRENT AND PROPOSED RATES The current rates and surcharges were effective on September 1, 2015. Rates were re-aligned to the results of an updated cost of service study, performed by Raftelis Financial Consultants, Inc. (RFC), which both developed the drought surcharges and reviewed the City’s water rate methodology and structure in light of recent court decisions interpreting the state constitution’s cost of service requirements. RFC examined and validated both the City’s methodology and rate structure as fundamentally sound, recommending only minor adjustments to ensure that peaking costs were equitably allocated to each customer class and residential rate tier. CPAU has five rate schedules: one for separately metered residential customers (W-1), one for commercial and master-metered multi-family residential customers (W-4), and specific schedules for irrigation-only services (W-7), services to fire sprinkler systems in buildings and private hydrants (W-3), and for service to fire hydrant rental meters used for construction (W- 2). All customers pay a monthly service charge, based on the size of their inlet meter. This charge represents meter reading, billing, and other customer service costs, but also the cost of maintaining the capability to deliver a peak flow for that customer corresponding to their meter size. All customers are also charged for each CCF (one hundred cubic feet) of water used. Separately metered residential customers are charged on a tiered basis, with the first 0.2 CCF per day (6 CCF for a 30 day billing period) charged a base price per CCF, and all additional units charged a higher price per CCF. Commercial customers pay a uniform price for each CCF used, and a higher price for separately metered irrigation service. Table 4 and Table 6 show the current and proposed monthly service charges for all rate schedules. Staff evaluated grouping the smallest meter sizes (5/8”, 3/4” and 1” meters) into one charge category, but confirmed that there is a significant variation in actual demand on the water distribution system among customers using each of these water sizes. As such, staff is not recommending a change to the monthly service charge schedule. Table 5 shows the consumption charges. Table 7 shows the current and proposed drought surcharge levels. The basis for calculating these charges is staff’s annual assessment of the water utility’s financial position, as well as the cost of service methodology from the 2012 Palo Alto Water Cost of Service & Rate Study and 2015 update, prepared by RFC. WATER UTILITY FINANCIAL PLAN February 2016 7 | Page Table 4: Current and Proposed Monthly Service Charges Meter Size Monthly Service Charge ($/month based on meter size) Change Current (9/1/15) Proposed (7/1/16) $/mo % 5/8” $16.03 $16.77 $0.74 5% 3/4” $21.50 $22.60 $1.10 5% 1” $32.45 $34.26 $1.81 6% 1 ½” $59.83 $63.40 $3.57 6% 2” $92.67 $98.37 $5.70 6% 3” $196.70 $209.11 $12.41 6% 4” $350.00 $372.31 $22.31 6% 6” $716.82 $762.81 $45.99 6% 8” $1,319.07 $1,403.94 $84.87 6% 10” $2,085.57 $2,219.92 $134.35 6% 12” $2,742.56 $2,919.34 $495.89 6% Table 5: Current and Proposed Water Consumption Charges Current (9/1/15) Proposed (7/1/16) Change $/CCF % W-1 (Residential) Volumetric Rates ($/CCF) Tier 1 Rates 5.93 6.30 0.37 6% Tier 2 Rates 8.38 8.82 0.44 5% W-2 (Construction) Volumetric Rates ($/CCF) Uniform Rate 6.92 7.32 0.40 6% W-4 (Commercial) Volumetric Rates ($/CCF) Uniform Rate 6.92 7.32 0.40 6% W-7 (Irrigation) Volumetric Rates ($/CCF) Uniform Rate 8.29 8.72 0.43 5% Table 6: Current and Proposed Monthly Fire Service Charges Meter Size Monthly Service Charge ($/month based on meter size) Change Current (9/1/15) Proposed (7/1/16) $/mo % 2” $3.43 $3.79 $0.36 10% 4” $21.22 $23.42 $2.20 10% 6” $61.63 $68.03 $6.40 10% 8” $131.34 $144.97 $13.63 10% 10” $236.20 $260.70 $24.50 10% 12” $381.52 $421.11 $39.59 10% WATER UTILITY FINANCIAL PLAN February 2016 8 | Page Table 7: Current and Proposed Drought Surcharge Charges Current (9/1/15) Proposed (7/1/16) Change $/CCF % 10%/15% Reduction ($/CCF) W-1 Residential (Tier 1) 0.19 0.20 $0.01 5% W-1 Residential (Tier 2) 0.55 0.58 0.03 5% W-4 (Non-residential and Master Metered Multi-Family) 0.24 0.26 0.02 8% W-7 (Irrigation) 0.51 0.53 0.02 4% 20% Reduction ($/CCF) W-1 Residential (Tier 1) 0.39 0.43 0.04 10% W-1 Residential (Tier 2) 1.14 1.21 0.07 6% W-4 (Non-residential and Master Metered Multi-Family) 0.49 0.53 0.04 8% W-7 (Irrigation) 1.18 1.25 0.07 6% 25% Reduction ($/CCF) W-1 Residential (Tier 1) 0.59 0.64 0.05 8% W-1 Residential (Tier 2) 1.76 1.85 0.09 5% W-4 (Non-residential and Master Metered Multi-Family) 0.72 0.77 0.05 7% W-7 (Irrigation) 1.93 2.02 0.09 5% SECTION 3C: BILL IMPACT OF PROPOSED RATE CHANGES Table 8 shows the impact of the proposed July 1, 2016 rate changes on the median residential bill. The average increase is roughly 6%, but some customers may see slightly higher or lower increases due to slight changes in the composition of the utility’s costs. Table 8 is presented assuming continued activation of the drought surcharge at the 20% reduction level. Table 8: Impact of Proposed Water Rate Changes on Residential Bills Usage (CCF/month) Bill under Current Rates (9/15/15) Bill under Proposed Rates (7/1/16) Change $/mo. % 4 $ 41.31 $ 43.69 $ 2.38 6% (Winter median) 7 63.47 67.18 3.71 6% (Annual median) 9 82.51 87.24 4.73 6% (Summer median) 14 130.11 137.39 7.28 6% 25 234.83 247.72 12.89 5% Table 9 shows the impact of the proposed July 1, 2016 rate changes on various representative commercial customer bills. This comparison includes continuation of the drought surcharge at the 20% reduction level. WATER UTILITY FINANCIAL PLAN February 2016 9 | Page Table 9: Impact of Proposed Water Rate Changes on Commercial Bills Usage (CCF/month) Bill under Current Rates (9/15/15) Bill under Proposed Rates (7/1/16) Change $/mo. % Commercial (W-4) (5/8” meters) (Annual median) 12 $ 104.95 110.97 6.02 6% (Annual average) 64 490.27 519.17 28.90 6% Irrigation (W-7) (1 ½” meters) (Winter median) 9 145 153 8 6% (Summer median) 37 410 432 22 5% (Winter average) 56 590 622 32 5% (Summer average) 199 1,944 2,047 103 5% SECTION 3D: PROPOSED RESERVE TRANSFERS In the FY 2016 Financial Plan, several transfers between reserves were discussed for FY 2016. CIP related funds were transferred out of the Reappropriations Replacement into the CIP Reserve, and $5.5 million was proposed to be transferred from the Rate Stabilization Reserve into the Operations Reserve. Due to the long running drought in California, and as lower expenses in FY 2015 resulted in higher ending reserve balances than initially projected, staff recommends reducing the $5.5 million transfer from the Rate Stabilization Reserve in FY 2016 to $4.7 million, and proposes transferring $1.87 million in FY 2017. This transfer will exhaust the Rate Stabilization Reserve, as planned for and discussed in Section 4E: Reserves Structure, and is included in the financial projections in this Financial Plan. It will enable CPAU to maintain adequate Operations Reserve levels while moderating the pace of increase in water rates. A proposed $4 million transfer from the CIP Reserve to the Operations Reserve was also discussed in the FY 2016 Financial Plan. This transfer will help fund the Operations Reserve, as well as bring the CIP Reserve closer to its target reserve level. The impact of these transfers on reserves levels can be seen in Section 4E: Reserves Structure and Appendix A: Water Utility Financial Forecast Detail. SECTION 4: UTILITY OVERVIEW This section provides an overview of the utility and its operations. It is intended as general background information and to help readers better understand the forecasts in Section 5: Utility Financial Projections and Section 6: Details and Assumptions. SECTION 4A: WATER UTILITY HISTORY The Water Utility was established on May 9, 1896, two years after the city was incorporated. Voters of the 750 person community approved a $40,000 bond to buy local, private water companies who operated one or more shallow wells to serve the nearby residents. The city grew and the well system expanded until nine wells were in operation in 1932. Palo Alto began WATER UTILITY FINANCIAL PLAN February 2016 10 | Page receiving water from the San Francisco Water Department (SFWD) in 1937 to supplement these sources. A 1950 engineering report noted, “the capricious alternation of well waters and the San Francisco Water Department water…has made satisfactory service to the average customer practically impossible”. By 1950, only eight wells were still in operation. Despite this, groundwater production increased in the 1950’s leading to lower groundwater tables and water quality concerns. In 1962, a survey of water softening costs to CPAU customers determined that CPAU should purchase 100% of its water supply needs from the SFWD. A 20-year contract was signed with San Francisco, and CPAU’s wells were placed in standby condition. The SFWD later became known as the SFPUC. Since 1962 (except for some very short periods) CPAU’s entire supply of potable water has come from the SFPUC. As the city grew, so did the number of mains in the water system. The system of mains expanded along with the town, while existing sections of the system continued to age. In the mid-1980s, the number of breaks in cast iron mains installed during the 1940s and earlier started to accelerate. In FY 1994, to combat deterioration of older sections of the system, an analysis of cost effective system improvements was performed and the rate of main replacement was increased from one mile per year to three. A plan to replace 75 miles of deficient mains within 25 years was begun. In 1999, a study of system reliability concluded that major upgrades were needed to the distribution system to provide adequate water supply during a natural disaster. This ultimately resulted in the $40 million Emergency Water Supply and Storage Project, nearly completed, which involved a new underground reservoir in El Camino Park, the siting and construction of several emergency supply wells, and the upgrade of several existing wells and the Mayfield pump station. At the same time that CPAU was evaluating the reliability of its own system, the SFPUC, in consultation with BAWSCA members, was evaluating the reliability of the Hetch Hetchy water system, which crosses two major fault lines between the Sierras and the Bay Area. That evaluation concluded that major upgrades to the system were required. This planning process culminated in the SFPUC’s $4.8 billion Water System Improvement Project (WSIP), which is ongoing. SECTION 4B: CUSTOMER BASE CPAU’s Water Utility provides water service to the residents and businesses of Palo Alto, plus a handful of residential customers not in Palo Alto (Los Altos Hills, primarily). Nearly 20,300 customers are connected to the water system, approximately 16,500 (81%) of which are separately metered residential customers and 3,800 (19%) of which are commercial, master- metered residential, irrigation and fire service customers. Judging from seasonal consumption patterns, between 35% and 50% of Palo Alto’s water is used for irrigation, and that consumption is heavily weather dependent. It also varies significantly by season. As a result of these two factors, there is significant variability in the amount of water that is demanded from the system month to month and year to year. WATER UTILITY FINANCIAL PLAN February 2016 11 | Page Figure 1: Cost Structure (FY 2015) 39% 40% 21% Water Purchases Operations Capital Figure 2: Revenue Structure (FY 2015) 93% 7% Sales of Water Other Revenue SECTION 4C: DISTRIBUTION SYSTEM To deliver water to its customers, the utility owns roughly 233 miles of mains (which transport the water from the SFPUC meters at the city’s borders to the customer’s service laterals and meters), eight wells (to be used in emergencies), five water storage reservoirs (also for emergency purposes) and several tanks used to moderate pressure and deal with peaks in flow and demand (due to fire suppression, heavy usage times, etc.). These represent the vast majority of the infrastructure used to distribute water in Palo Alto. SECTION 4D: COST STRUCTURE AND REVENUE SOURCES As shown in Figure 1, water purchase costs accounted for roughly 39% of the Water Utility’s costs in FY 2015. Operational costs represented roughly 40%, and capital investment was responsible for the remaining 21%. Water purchase costs are projected to rise to roughly 41% of costs by FY 2026. The Water Utility receives 93% of its revenue from sales of water and the remainder from capacity and connection fees, interest on reserves, and other sources. As rates increase over the next several years, the percentage of revenue from sales of water is expected to increase as well. Appendix A: Water Utility Financial Forecast Detail shows more detail on the utility’s cost and revenue structures. Roughly 15% of the utility’s revenues come from fixed service charges, though most of its costs are fixed. This is typical for California water utilities, and conforms to the Best Management Practices (BMPs) of the California Urban Water Conservation Council (CUWCC), a statewide conservation council of environmental groups, state agencies, and water utilities to which the City is a signatory. One of CUWCC’s BMPs is that a utility’s revenue from fixed service charges constitutes at most 30% of the utility’s total revenue from all charges1. 1 See http://www.cuwcc.org/Resources/Memorandum-of-Understanding/Exhibit-1-BMP-Definitions-Schedules- and-Requirements/BMP-1-Utility-Operations-Programs WATER UTILITY FINANCIAL PLAN February 2016 12 | Page SECTION 4E: RESERVES STRUCTURE CPAU maintains six reserves for its Water Utility to manage various types of contingencies. These are summarized below, but see Appendix C: Water Utility Reserves Management Practices for more detailed definitions and guidelines for reserve management: • Reserve for Commitments: A reserve equal to the utility’s outstanding contract liabilities for the current fiscal year. Most City funds, including the General Fund, have a Commitments Reserve. • Reserve for Reappropriations: A reserve for funds dedicated to projects reappropriated by the City Council, nearly all of which are capital projects. Most City funds, including the General Fund, have a Reappropriations Reserve. • Capital Improvement Program (CIP) Reserve: The CIP reserve can be used to accumulate funds for future expenditure on CIP projects and is anticipated to be empty unless a major one-time CIP expenditure is expected in future years. This CIP can also act as a contingency reserve for the CIP. This type of reserve is used in other utility funds (Electric, Gas, and Wastewater Collection) as well. • Rate Stabilization Reserve: This reserve is intended to be empty unless one or more large rate increases are anticipated in the forecast period. In that case, funds can be accumulated to spread the impact of those future rate increases across multiple years. This type of reserve is used in other utility funds (Electric, Gas, and Wastewater Collection) as well. • Operations Reserve: This is the primary contingency reserve for the Water Utility, and is used to manage yearly variances from budget for operational water supply costs. This type of reserve is used in other utility funds (Electric, Gas, and Wastewater Collection) as well. • Unassigned Reserve: This reserve is for any funds not assigned to the other reserves and is normally empty. SECTION 4F: COMPETITIVENESS Table 10 shows the current water bills for residential customers compared to what they would be under surrounding communities’ rate schedules. CPAU has the highest monthly bills of the group, although bills for smaller water users are less than in some surrounding communities. WATER UTILITY FINANCIAL PLAN February 2016 13 | Page Table 10: Residential Monthly Water Bill Comparison Usage (CCF/month) Residential monthly bill comparison ($/month)* As of February 2016 Palo Alto Menlo Park Mountain View Hayward Redwood City Santa Clara 4 41.31 44.11 31.46 28.68 43.69 16.64 (Winter median) 7 63.47 62.25 48.77 48.42 57.13 29.12 (Annual median) 9 82.51 74.36 60.31 61.58 66.77 37.44 (Summer median) 14 130.11 106.12 89.16 96.24 95.46 58.24 25 234.83 176.80 187.23 181.49 182.14 104.00 * All comparisons use the 5/8” meter size. SECTION 5: UTILITY FINANCIAL PROJECTIONS SECTION 5A: LOAD FORECAST Figure 3 shows 40 years of water consumption history. Average water use has trended downward over time even as Palo Alto’s population has grown. Significant water use reductions over the 40-year history were in response to requests to reduce water use in the 1976-77 and 1988-92 drought periods. During these periods, customers invested in efficient equipment and modified behavior to achieve the water reduction goals. More recently, water sales decreased substantially during the 2007-2009 recession and during the current drought. Water use is down by similar amounts among both commercial and residential customers. Both summertime and wintertime use have decreased for all customer classes. Figure 3: Historical Water Consumption WATER UTILITY FINANCIAL PLAN February 2016 14 | Page Figure 4 shows the forecast of water consumption through FY 2026, as denoted by the dotted line. Figure 4: Forecast Water Consumption Palo Alto is currently experiencing drought conditions with State mandated 24% water use restrictions in effect. The current forecast assumes current conditions continue through FY 2017, with the drought easing in spring of 2017. It also assumes consumption only returns to 50% of its pre-drought levels, which is consistent with patterns experienced in prior droughts. SECTION 5B: FY 2011 TO FY 2015 COST AND REVENUE TRENDS Figure 5 and the tables in Appendix A: Water Utility Financial Forecast Detail show how costs have changed during the last five years as well as how they are projected to change over the next decade. The annual expenses for the water utility rose substantially between 2011 and 2015. The increases were primarily related to water purchase costs, which increased 47% from $10.7 million in FY 2011 to $15.7 million in FY 2014. A more in-depth discussion of water purchase costs will be found in Section 6A: Water Purchase Costs. Operations cost increased by about 3% annually, while CIP costs stayed relatively flat, except in FY 2013 when there was a hold on new CIP spending to permit completion of a backlog of projects. This budgetary hold allowed for backlogged water main replacement projects to be started, which consumed surplus capital reserves. WATER UTILITY FINANCIAL PLAN February 2016 15 | Page Figure 5: Water Utility Expenses, Revenues, and Rate Changes: Actual Costs through FY 2015 and Projections through FY 2026 SECTION 5C: FY 2015 RESULTS In early 2014, when proposing rate adjustments to be effective on July 1, 2014, staff forecast the need for a 4% rate increase. However, higher sales in FY 2014, and projected increased sales in FY 2015 increased reserves such that no rate change was needed for FY 2015. Forecast revenues for FY 2015 were actually $41.2 million instead of the projected revenues of $36.4 million. The largest reason for this was a return of funds related to a return of CIP funds. Connection and capacity fees were, and have continued to be, higher than forecast. Actual expenses for FY 2015 were $40.1 million compared to the projected expenses of $38.7 million. Table 11 summarizes the variances from forecast. Actual Projected WATER UTILITY FINANCIAL PLAN February 2016 16 | Page Table 11: FY 2015, Actual Results vs. 2014 Forecast Net Cost/ (Benefit) Type of change Return of capital project funds ($2,667,000) Revenue increase Connection and capacity fees higher than forecast ($1,043,000) Revenue increase Water supply costs lower than expected (700,000) Cost savings Other revenues (interest income, etc.) were higher than forecasted ($1,152,000) Revenue increase Operations costs lower than expected (1,300,000) Cost savings Capital project costs higher than projected 3,500,000 Cost increase Net Cost / (Benefit) of Variances ($3,362,000) SECTION 5D: FY 2016 PROJECTIONS Several factors have contributed to changes between last year’s forecast and this year’s projections. Most notably, the ongoing drought has reduced projected FY 2016 sales by around 12%. The activation of a drought rate surcharge in September 2015, however, means that FY 2016 revenues are projected to be only 4.6% lower than forecast. On the cost side, reduced purchases and lower than forecast wholesale supply rates from the SFPUC are expected to result in supply cost decreases of 13.7% for FY 2016. Notable are projected CIP cost increases of $2.3 million, or 26%, mainly due to general cost increases and completing some projects. Table 12 summarizes the changes from last year’s forecast. Table 12: FY 2016 Change in Projected Results, 2016 Forecast vs 2017 Forecast Net Cost/ (Benefit) Type of change Lower purchase costs ($2,809,000) Cost savings Higher misc. revenues (interest income, fees) ($111,000) Revenue increase Lower sales revenue $2,039,000 Revenue decrease Capital project costs higher than projected $2,315,000 Cost increase Higher Operations budgets $163,000 Cost increase Net Cost / (Benefit) of Variances $1,507,000 SECTION 5E: FY 2017-FY 2026 PROJECTIONS As can be seen in Figure 5 above, costs for the Water Utility are not projected to change significantly between FY 2016 and FY 2017. However, as discussed earlier, water supply costs are the main reason for the cost increases. Water supply costs are projected to increase by 7% in FY 2017 and grow steadily over the coming years. Operations costs include will increase by $1 million in FY 2017 for emergency generator leasing and maintenance, but will otherwise roughly match inflation through the forecast period. Capital investment costs are also expected to increase at the same rate of inflation used in the City’s long-term financial plans (2.5 to 3%/year), though there is still uncertainty with regard to the utility’s future costs for main replacement. See Section 6: Details and Assumptions for more detail on the costs that make up these projections, as well as the various assumptions underlying the projections. WATER UTILITY FINANCIAL PLAN February 2016 17 | Page Revenues are below expenses and will require annual rate increases between 6% and 9% through FY 2020 to keep up with these cost increases even with the use of the Rate Stabilization Reserve to spread the increases over multiple years. Costs have already increased substantially over the last few years, and revenues have not kept pace. Sales revenues were adequate in FY 2014 due to lower than average CIP expenditures in that year, but starting in FY 2015 deficits are forecast. To help close this gap, revenues were increased by 12% in FY 2016. Reserves trends based on these revenue projections are shown in Figure 6 below. The Rate Stabilization Reserve is projected to have a zero balance by the end of FY 2017, and the CIP Reserve is projected to decrease by $4 million by the end of FY 2017. Assuming these increases in revenue, the Operations Reserve, the main contingency reserve, is expected to remain above the minimum reserve level and will be adequate to meet all identified risks, as discussed in Section 5F: Risk Assessment and Reserves Adequacy. These projections assume that drought restrictions end in FY 2017, and that the request for water usage reductions remains at 24%. If the drought worsens or continues longer than projected, the level of the drought surcharge currently in place may need to be reviewed. The forecast also assumes that water main replacement project costs do not increase by more than inflation. This is a major uncertainty as staff awaits the results of the Water Master Plan study to determine the advisable water main replacement strategy. Figure 6: Water Utility Reserves Actual Reserve Levels through FY 2015 and Projections through FY 2026 WATER UTILITY FINANCIAL PLAN February 2016 18 | Page SECTION 5F: RISK ASSESSMENT AND RESERVES ADEQUACY The Water Utility currently has one contingency reserve, the Operations Reserve, and this Financial Plan maintains reserves within the approved reserve maximum and minimum guidelines throughout the forecast period, as shown in Figure 7. Reserve levels also exceed the short term risk assessment for the utility. Note that while the Operations Reserve is above the target level in FY 2017, it falls to below the target (but above the minimum) in FY 2018 through FY 2020. Figure 7: Operations Reserve Adequacy Table 13 summarizes the risk assessment calculation for the Water Utility through FY 2021. The same methodology is used for FY 2022 through FY 2026 as well. The risk assessment includes the revenue shortfall that could accrue due to: 1. Lower than forecasted sales revenue; and 2. An increase of 10% of planned system improvement CIP expenditures for the budget year. WATER UTILITY FINANCIAL PLAN February 2016 19 | Page Table 13: Water Risk Assessment ($000) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total non-commodity revenue $18,406 $20,744 $23,233 $24,976 $25,226 Max. revenue variance, previous ten years 13% 13% 13% 13% 13% Risk of revenue loss $1,819 $2,050 $2,296 $2,468 $2,492 CIP Budget $10,216 $10,012 $10,252 $10,555 $10,867 CIP Contingency @10% $1,022 $1,001 $1,025 $1,056 $1,087 Total Risk Assessment value $2,840 $3,051 $3,321 $3,523 $3,579 SECTION 5G: ALTERNATE SCENARIOS At the UAC’s February 2016 meeting, it was suggested that staff prepare two alternate scenarios for rate increases. The first (“Target”) scenario keeps the Operations Reserve at or near the Target level throughout the forecast period as shown in Figure 8 below. The second (“Minimum”) has no rate change in FY 2017 and lets the Operations Reserve stay at minimum for five years as shown in Figure 9 below. Both options as well as the proposed rate adjustments are shown in Table 14. Table 14: Projected Water Rate Trajectory for FY 2017 to FY 2026 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Proposed 6% 9% 9% 6% 2% 2% 2% 3% 5% 3% Target 3% 20% 3% 2% 3% 3% 2% 4% 2% 4% Minimum 0% 18% 7% 3% 3% 4% 3% 4% 3% 4% The Target scenario requires a 3% rate increase (smaller than the proposed 6% increase) in FY 2017, but requires a very large rate increase (20%) in FY 2018 to make up for another year with a significant deficit with revenues not covering costs. The level of the Operations Reserve in the target scenario is shown in Figure 8 below. The Minimum scenario also requires a significant rate increase (18%) in FY 2018 if no rate change is implemented in FY 2017 with a large (7%) rate increase required for FY 2019. The level of the Operations Reserve in the target scenario is shown in Figure 9 below. Staff recommends a 6% water rate increase in FY 2017 to moderate the rate increases that are projected in FY 2018 while keeping the Water Operations Reserve at healthy levels. WATER UTILITY FINANCIAL PLAN February 2016 20 | Page Figure 8: Operations Reserve at Target Level Figure 9: Operations Reserve at Minimum for FY 2018 through FY 2021 WATER UTILITY FINANCIAL PLAN February 2016 21 | Page SECTION 5H: LONG-TERM OUTLOOK CPAU has put its Water Utility on strong footing by investing in its distribution system infrastructure and emergency water facilities over the last 20 years. The Water System Master Plan, currently under review, will give CPAU a better picture of the long-term outlook for its infrastructure and will result in a plan for an appropriate schedule for infrastructure replacement and upgrades. In addition, CPAU’s water supplier, the SFPUC, has replaced and seismically strengthened its water transmission infrastructure, which will benefit Palo Alto and all Hetch Hetchy customers over the long term. The opportunities for CPAU’s Water Utility over the long term may be in alternative water supplies such as recycled water, groundwater, and water from the Santa Clara Valley Water District. These alternatives have been analyzed in the past, and will be analyzed again in an upcoming update to the Water Integrated Resource Plan. Some of these alternatives may provide cost savings or increased drought protection. Climate change may begin to present challenges for the Water Utility over the next 20 to 40 years. Availability of water from SFPUC’s Regional Water System may change with changing seasonal precipitation patterns. Water consumption patterns may change. Consumption could increase due to drier weather or decrease as customers become even more focused on water conservation. Droughts may become more frequent. The risk of wildfire in the foothills could increase, possibly threatening utility infrastructure or placing greater demands on it. Sea level rise could result in greater exposure of utility infrastructure to saltwater intrusion or the need to protect infrastructure from inundation, possibly resulting in higher maintenance and replacement costs. It could also affect the groundwater aquifer that the utility relies on in emergencies. Any of these could result in increases to the costs of operating the Water Utility. As part of the Sustainability/Climate Action Plan, CPAU is currently working on a Climate Change Adaptation Roadmap that will begin to assess some of these risks. SECTION 6: DETAILS AND ASSUMPTIONS SECTION 6A: WATER PURCHASE COSTS CPAU purchases all of the potable water supplies from the SFPUC, which owns and operates the Hetch Hetchy Regional Water System. CPAU is one of several agencies that purchase water from the SFPUC, all of whom are members of the Bay Area Water Supply and Conservation Agency (BAWSCA). Palo Alto uses roughly 7% of the water delivered by the SFPUC to BAWSCA member agencies. The Hetch Hetchy Regional Water System system begins with a system of reservoirs and tunnels in the high Sierra in Yosemite County and is transported by a gravity-fed pipeline to the Bay Area. Currently, the SFPUC is in the midst of a $4.8 billion bond-financed capital improvement program (the Water System Improvement Program, or WSIP) to seismically retrofit the facilities that transport water to the Bay Area. This has resulted in large increases in the annual debt service costs assigned to wholesale customers like Palo Alto. The wholesale customer debt service share of the WSIP is increasing from $53 million in FY 2010 to over $200 WATER UTILITY FINANCIAL PLAN February 2016 22 | Page million in FY 2020. As a result, the SFPUC’s wholesale water rate has already increased from $1.43 per CCF in FY 2009 to $3.75 per CCF in FY 2016, and is forecasted to increase to over $5.00 per CCF by FY 2025. Figure 10 shows the SFPUC’s actual wholesale water rate since FY 2009 and a projection through FY 2026. Note that the wholesale water rate decreased in FY 2014, but the apparent rate decrease is due to a part of the debt being directly paid by the BAWSCA agencies. This cost is paid in addition to the wholesale water rate and add about $0.35 to $0.45 per CCF to the wholesale rate. The SFPUC’s water rate projections show a less steeply increasing rate trajectory after all of the debt for the WSIP has been issued. Parts of SFPUC’s system not included in the WSIP also may need rehabilitation. Some of these projects are already included in the SFPUC’s rate projections, but the SFPUC is conducting condition assessments of other “up-country” facilities, located in the Sierras in the coming years. If the these assessments identify other facilities that need replacement, it may result in additional rate increases beyond FY 2020 as new debt is issued to finance the projects. In January 2016, the SFPUC provided a range for FY 2017 wholesale water rates of between $4 and $5 per CCF. In February, the SFPUC updated its estimate for FY 2017 to $4.05/CCF, but there is much uncertainty surrounding the length of the drought and water usage by the BAWSCA agencies. Since the State has mandated water use reductions for most BAWSCA agencies by 20% or more, SFPUC’s rates will invariably need to increase since its costs are almost entirely fixed with no relation to the quantity of water that delivered by the system. As shown in Figure 10, this year’s projection of SFPUC wholesale rates has increased from the previous year’s projection. If the drought ends in FY 2017 and sales increase (or at least don’t decline further), then rate projections may level out. However, if snow and rain do not materialize, current calls for restricted usage may continue or even be increased. WATER UTILITY FINANCIAL PLAN February 2016 23 | Page Figure 10: Historical and Projected SFPUC Wholesale Water Rate SECTION 6B: OPERATIONS CPAU’s Water Utility operations include the following activities: • Administration, a category that includes charges allocated to the Water Utility for administrative services provided by the General Fund and for Utilities Department administration, as well as debt service and other transfers. Additional detail on Water Utility debt service is provided in Section 6D: Debt Service • Customer Service • Engineering work for maintenance activities (as opposed to capital activities) • Operations and Maintenance of the distribution system; and • Resource Management Appendix D: Description of Water Utility Operational Activities includes detailed descriptions of the work associated with each of these activities. From FY 2011 to FY 2015 Operations costs (excluding debt service, rent, and transfers) increased 3.5% per year on average (see Figure 11). The increases were driven by allocated charges, which increased by 7% per year on average and increases in other Operations costs, which increased by roughly 4% per year. Debt service costs increased by $2.4 million per year as a result of a bond issued to finance the Emergency Water Supply and Storage Project. Transfers WATER UTILITY FINANCIAL PLAN February 2016 24 | Page have varied from year to year, but are expected to remain relatively low and stable through the forecast period. In FY 2017 Operations costs are projected to increase by $1 million for a capital lease of emergency generators for various wells and pump stations. This is a new ongoing cost. Aside from that, only inflationary increases are projected for Operations costs. Underlying these projections are assumptions for salary and benefit costs, consumer price index, and other cost projections that match the City’s long-range financial forecast. Figure 11: Historical and Projected Operational Costs SECTION 6C: CAPITAL IMPROVEMENT PROGRAM (CIP) The Water Utility’s CIP consists of the following types of projects: • Customer connections, which represents the cost when the Water Utility installs new services or upgrades existing services at a customer’s request in response to development or redevelopment. CPAU charges a fee to these customers to cover the cost of these projects. • Ongoing projects, which represent the cost of replacing aging and under-recording meters and degraded boxes and covers, minor replacements of various types of distribution system equipment, and the cost of capitalized tools and equipment. Actual Projected WATER UTILITY FINANCIAL PLAN February 2016 25 | Page • One time projects, or large, non-recurring replacement of system assets (such as reservoir rehabilitation) • Water main replacement, which represents the ongoing replacement of aging water mains, and sometimes the services associated with those mains. Table 15 shows the FY 2016 adopted budget, with actual spending and remaining budget as of December 31, 2015. Also included is the five year CIP spending plan, although these figures are preliminary pending budget discussions starting in May. The ‘committed’ column represents funds committed to contracts for which work has not yet been completed or invoices paid. Table 15: Budgeted Water Utility CIP Spending ($000) *Includes unspent funds from previous years carried forward or reappropriated into the current fiscal year **Equal to Reserve for Reappropriations + Reserve for Commitments. The water main replacement program funds the replacement of deteriorating water mains. The water system consists of over 236 miles of mains, approximately 2000 fire hydrants, and over 20,000 metered service connections spanning 9 pressure zones over a 26 square mile service area. CPAU utilizes an asset management database in conjunction with hydraulic modeling software to prioritize capital improvements. Mains are selected by researching the maintenance history of the system and identifying those that are undersized, corroded, and subject to recurring breaks. CPAU uses a scoring system based on criticality in order to prioritize which mains to replace first, and coordinates with the Public Works street maintenance program to avoid cutting into newly repaved streets. CPAU replaces approximately 3 miles of main per year, or 1.3% of the system. Costs for the water main replacement program are increasing for a variety of reasons: • Fire Code regulations now mandate fire sprinklers for new residential units. To accommodate increased fire flows, new main replacement projects require larger diameter pipe. • CPAU has switched to high-density polyethylene (HDPE) for its mains. Installation costs for this material are slightly higher, though lifecycle costs are lower, and the material performs better. Joints in distribution mains are the most likely place for failure, and sections of HDPE pipe can be fused together rather than connected with fittings. In the long run, this will reduce losses and maintenance costs. • To take full advantage of HDPE’s fusibility, CPAU is now replacing the services along with the water mains with new HDPE services. In the past, the existing services were reconnected, regardless of the material. This new practice costs more in the short run, but will provide long term benefits. • Lastly, costs have escalated after the recession. WATER UTILITY FINANCIAL PLAN February 2016 26 | Page These factors have created some uncertainty in future water main replacement costs. If the cost of water main replacement continues at its current levels, water main replacement budgets will need to be increased by $1M to $2M per year to keep up the current pace of main replacement. However, CPAU is nearing the end of a long term water main replacement program initiated in 1993 to replace the oldest and most degraded parts of the system. Roughly 25% of the system has been replaced, and the rate of water leaks has decreased 50%. This makes it a good time to re-evaluate the program. CPAU initiated a master planning process in FY 2015 to evaluate the current state of the distribution system and determine the necessary rate of main replacement in future years. Currently the utility replaces about 1.3% of the system each year, which is an 80-year replacement cycle. The master planning process may reveal a need for a higher main replacement rate, or may reveal that pipes are currently in good condition and a lower rate of replacement is sufficient. Results are being reviewed and follow up questions prepared. If this study determines that a lower rate of main replacement is acceptable, increases to water main replacement project budgets may not be necessary. Likewise, if the per-mile costs of main replacement come down, that would also reduce or eliminate the need to increase main replacement budgets. A combination of reduced costs and a reduced rate of main replacement could even allow CPAU to reduce those budgets. However, if per-mile main replacement costs stay at their current levels and the study reveals the need to maintain the same rate of main replacement (or a higher rate), CPAU’s CIP costs would rise. One project not included in this forecast is the seismic strengthening of a large water transmission line in the foothills. Staff has engaged a consultant to investigate alternatives for this project. The consultant is analyzing an alternative that involves installing a valve and hose system that could be used to bypass breaks in the line while they are repaired after an earthquake. This is a relatively low cost alternative that would not substantially affect the financial forecast. The study is not finalized yet, however, and if it is determined that the entire pipeline needs to be replaced, it could cost between $15 million and $20 million, which would likely require bond financing and would substantially affect the financial forecast. The final report with recommendations is expected to be available in 2016. Ongoing Projects and Customer Connections are projected to cost approximately $1.9 million in FY 2016 and increase by 3.5% per year through the end of the forecast period. Actual expenses for these projects fluctuate annually depending on how many defective meters are discovered and replaced during routine maintenance, as well as how much development and redevelopment is going on that prompts the replacement or upgrade of water services. It is worth noting that property owners pay a fee for water service replacement or expansion during redevelopment, so when the number of projects go up (meaning higher costs for this activity), so does fee revenue. Aside from customer connections, the CIP plan for FY 2016 to FY 2020 is funded by utility rates and capacity fees. The details of the plan are shown in Appendix B: Water Utility Capital Improvement Program (CIP) Detail. WATER UTILITY FINANCIAL PLAN February 2016 27 | Page SECTION 6D: DEBT SERVICE The Water Utility’s annual debt service is roughly $3.2 million per year. This is related to two bond issuances, one requiring payments through 2026, the other through 2035. CPAU is in compliance with all covenants on both bonds. The first bond is the 2009 Water Revenue Bond, Series A, issued for $35 million to finance construction of the Emergency Water Supply and Storage project (the El Camino Reservoir, new wells, rehabilitation of existing wells and tanks, etc.) and to be retired by 2035. As part of the ‘Build America’ bond program, there is an interest payment subsidy from the Federal Government of 35%. There is always the possibility that the federal government will choose to stop payment on this subsidy. The automatic federal spending cuts under the Budget Control Act (BCA) of 2011 have already reduced the subsidy by $50,000 per year, and if planned cuts through 2021 proceed without amendment, staff estimates that the subsidy would be reduced by over $200,000 per year by 2021. The Bipartisan Budget Act of 2013, which relieved some of the discretionary spending cuts in the 2011 BCA, did not affect automatic cuts to the subsidy, and actually extended the automatic cuts through 2023. The second bond issuance is the 2011 Utility Revenue Refunding Bond, Series A, which is to be retired in 2026. This $17.2 million issuance refinanced an earlier Water and Gas Utility bond issuance, the 2002 Utility Revenue Bonds, Series A, which was issued to finance various capital improvements for both systems. The Water Utility’s share of the issuance was roughly $7.8 million. The cost of debt service for the Water Utility’s share of these bond issuances for the financial forecast period is shown in Table 16: Table 16: Water Utility Debt Service ($000) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 2009 Water Revenue Bonds, Series A (net of grants) 2,002 2,012 2,031 2,046 2,064 2,079 2,101 2,151 2011 Utility Revenue Bonds, Series A 657 657 656 654 656 657 657 657 Both the 2009 and 2011 Bonds include the following covenants: 1) net revenues plus Available Reserves shall at least equal 125% of the maximum annual debt service, and 2) Available Reserves shall be at least 5 times the maximum annual debt service. Note that “Available Reserves,” as defined for both bonds, include the reserves for the Gas and Electric systems, not just the Water system. This Financial Plan maintains compliance with these covenants throughout the forecast period, as shown in Appendix A: Water Utility Financial Forecast Detail. The net revenues (but not the reserves) of the Water Utility are also pledged for one other bond as shown in Table 17 below, even though the Water Utility is not responsible for the debt service payments. The Water Utility’s reserves or net revenues would only be called upon if the responsible utilities are unable to make their debt service payments. Staff does not currently foresee this occurring. Requirements of the California Constitution require that any amounts advanced from one utility to pay debt service for another utility must be repaid by the borrowing fund. WATER UTILITY FINANCIAL PLAN February 2016 28 | Page Table 17: Other Issuances Secured by the Water Utility’s Revenues or Reserves Bond Issuance Responsible Utilities Annual Debt Service ($000) Secured by Water Utility’s: Net Revenues Reserves 1995 Series A Utility Revenue Bonds Storm Drain $680 Yes No SECTION 6E: OTHER REVENUES The Water Utility receives most of its revenues from sales of water, but about 7% comes from other sources. The largest revenue source in FY 2015 was a one-time return of previously budgeted CIP dollars (36%). The next largest source is connection and capacity fees, which in FY 2015 represented 29% of revenue from sources other than water sales. The remainder consisted of a variety of miscellaneous charges and transfers. Revenues from connection and capacity fees have more than doubled since FY 2009. Connection fees are charged to new developments that need new or replacement service connections, while capacity fees are charged to development that put additional demands on the water distribution system. Revenue from these sources decreased slightly during the recession, but has increased substantially since then. Staff is forecasting lower revenue from these sources in subsequent years, but has increased connection fees that are expected to offset these reductions to some extent. Other revenue sources are projected to stay stable through the forecast period, though interest income always fluctuates depending on changes in interest rates. Some uncertainty also exists related to the Federal government’s commitment to continuing to pay the interest subsidy on the Build America Bonds. SECTION 6F: SALES REVENUES Sales revenue projections are based on the load forecast in Section 5A: Load Forecast and the projected rate changes shown in Figure 5. Except where stated otherwise, these load forecasts are based on normal precipitation. Precipitation can vary substantially, however, even in non- drought years, and this can affect revenues substantially. In dry years customers use more water, increasing revenues, and in wet years they use less. These variations happen in the winter, since summers have virtually no local precipitation regardless of whether it is a dry or wet year. The variations are most likely related to winter irrigation demand. SECTION 7: COMMUNICATIONS PLAN In FY 2017, communications will continue to focus on water utility rate increases, including the reasons why and how rates may change contingent upon continued drought conditions. The City will also communicate how infrastructure costs and rising rates from our wholesale water supplier, the San Francisco Public Utilities Commission, increases CPAU costs and must be recovered through rate increases. Rates communications will include a substantial update to information on a webpage dedicated to Utilities rates, “breaking news” on the Utility home webpage, discussion in the Proposition 218 rate adjustment notice, bill inserts, print ads, videos WATER UTILITY FINANCIAL PLAN February 2016 29 | Page for web and television, social media posts and frequent educational updates to internal and external stakeholders (customer service, marketing, City Manager’s Office, UAC, City Council, business and residential customers). Other communications vehicles will include financial plans, presentations to UAC, Finance Committee, City Council and any media coverage as a result of the rate increases. CPAU will continue its outreach about drought conditions and importance of water use efficiency, tying in the message that although rates are increasing, efficient usage should mean that a customer should not see a significant increase in water utility costs on their bills. Water conservation outreach will include bill inserts, web updates, email blasts, videos for the web and television, presentations to customer groups and the use of social media. To keep customers apprised of the status and accomplishments of CIP projects, a network of project web pages are maintained. Traffic is driven to the website via ads in publications, newspaper inserts, and through the comprehensive portfolio of outreach strategies as outlined above. Safety topics are also emphasized year-round. For all utility outreach, while print materials and website pages still feature prominently, CPAU is placing more emphasis on digital advertising content, direct mail, community safety/emergency preparation events and presentations. WATER UTILITY FINANCIAL PLAN February 2016 30 | Page APPENDICES Appendix A: Water Utility Financial Forecast Detail Appendix B: Water Utility Capital Improvement Program (CIP) Detail Appendix C: Water Utility Reserves Management Practices Appendix D: Description of Water Utility Operational Activities Appendix E: Sample of Water Utility Outreach Communications APPENDIX A: WATER UTILITY FINANCIAL FORECAST DETAIL 1 FISCAL YEAR FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 2 3 WATER SUPPLY 4 Purchases 5,416,220 5,538,305 5,532,947 5,507,153 4,671,433 4,127,085 4,172,372 4,353,850 4,556,414 4,486,307 4,448,095 4,410,865 4,372,643 4,328,601 4,285,924 4,231,873 5 Sales 4,992,473 5,062,873 5,097,392 5,047,148 4,433,016 3,858,825 3,859,444 4,027,311 4,214,683 4,149,834 4,114,488 4,080,051 4,044,695 4,003,956 3,964,480 3,914,482 6 (530,686) -12.1% 7 BILL AND RATE CHANGES 8 Variable Charge (Supply)15%38%11%-16%25%22%7%2%2%2%2%2%2%3%3%3% 9 Variable Charge (Distribution)-7%-12%17%30%-16%10%5%15%14%9%2%2%2%3%3%6% 10 Change in System Average Rate 0%12%22%8%0%11%6%9%9%6%2%2%2%3%3%5% 11 12 STARTING RESERVES 13 Reappropriations (Non-CIP)54,000 20,000 - - - - - - - - - - - - - - 14 Commitments (Non-CIP)40,000 765,000 714,000 2,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 15 Restricted for Debt Service 3,348,000 3,348,000 3,225,000 3,225,000 3,331,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 16 Emergency Plant Replacement 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 - - - - - - - - - - - 17 Capital Reserve - - - - - 4,000,000 13,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 18 Rate Stabilization Reserve 17,037,000 10,639,000 7,996,000 17,272,000 20,133,000 6,567,000 1,867,000 - - - - - - - - - 19 Operations Reserve - - - - - 11,663,836 9,807,734 11,017,309 7,655,292 7,759,702 9,208,904 10,185,947 10,710,850 10,890,498 10,976,735 10,969,473 20 Unassigned - - - - - - - - - - - - - - - - 21 TOTAL STARTING RESERVES 21,479,000 15,772,000 12,935,000 21,499,000 24,811,000 25,893,836 28,593,734 23,936,309 20,574,292 20,678,702 22,127,904 23,104,947 23,629,850 23,809,498 23,895,735 23,888,473 22 23 REVENUES 24 Net Sales 26,133,998 30,673,882 36,647,924 39,029,262 33,654,549 36,263,267 38,159,141 40,715,075 46,016,043 48,155,815 48,584,946 49,023,735 49,587,825 50,566,700 51,576,926 53,401,555 25 Other Revenues and Transfers In 2,812,063 5,892,133 6,811,461 4,053,920 7,504,848 3,307,155 3,363,253 3,420,419 3,478,285 3,536,762 3,597,449 3,662,424 3,728,765 3,816,351 3,906,270 3,998,583 26 TOTAL REVENUES 28,946,061 36,566,015 43,459,385 43,083,182 41,159,397 39,570,422 41,522,394 44,135,494 49,494,328 51,692,577 52,182,395 52,686,158 53,316,590 54,383,051 55,483,196 57,400,138 27 28 EXPENSES 26.4% 29 Water Purchases 10,677,914 14,889,399 16,605,351 15,705,288 15,669,935 17,644,669 18,899,310 19,976,217 21,177,479 21,259,327 21,475,294 21,696,607 21,914,567 22,302,108 22,701,664 23,050,946 30 Operating Expenses 31 Administration 32 Allocated Charges 1,798,630 2,003,116 2,422,880 2,366,077 2,342,985 2,343,499 2,402,461 2,462,917 2,524,882 2,588,411 2,653,298 2,719,668 2,787,709 2,857,466 2,928,969 3,002,261 33 Rent 2,122,405 2,156,887 1,911,963 2,192,454 2,249,457 2,677,106 2,757,419 2,840,142 2,925,346 3,013,106 3,103,500 3,196,605 3,292,503 3,391,278 3,493,016 3,597,807 34 Debt Service 3,341,781 3,385,986 3,219,165 3,220,208 3,218,869 3,222,606 3,219,316 3,222,669 3,220,858 3,220,638 3,222,843 3,223,563 3,224,553 3,224,553 3,224,553 3,224,553 35 Transfers and Other Adjustments 200,286 301,963 2,241,793 335,808 63,612 376,108 383,630 391,302 399,129 407,111 415,253 423,558 432,030 432,030 432,030 432,030 36 Subtotal, Administration 7,463,102 7,847,952 9,795,801 8,114,546 7,874,923 8,619,319 8,762,826 8,917,030 9,070,214 9,229,266 9,394,893 9,563,393 9,736,794 9,905,326 10,078,567 10,256,650 37 Resource Management 575,834 552,972 557,910 570,040 488,331 601,238 621,475 642,529 664,121 686,511 706,216 724,410 743,231 762,742 782,766 803,316 38 Operations and Mtc 4,885,428 4,900,606 4,944,064 4,986,274 5,283,426 5,345,288 5,529,766 5,721,935 5,919,070 6,123,705 6,301,710 6,464,531 6,633,106 6,808,061 6,987,630 7,171,936 39 Engineering (Operating)247,488 301,278 338,659 381,502 358,128 447,404 463,096 479,457 496,243 513,680 528,735 542,422 556,602 571,328 586,444 601,959 40 Customer Service 1,476,175 1,544,608 1,584,759 1,677,926 1,821,447 2,027,659 2,098,960 2,173,305 2,249,589 2,328,837 2,397,182 2,459,257 2,523,568 2,590,368 2,658,935 2,729,318 41 Allowance for Unspent Budget - - - - - 401,476 (411,505) (424,995) (438,832) (453,167) (465,976) (477,939) (490,301) (503,100) (516,234) (529,711) 42 Subtotal, Operating Expenses 14,648,027 15,147,415 17,221,192 15,730,288 15,826,254 17,442,384 17,064,620 17,509,261 17,960,405 18,428,832 18,862,761 19,276,075 19,702,999 20,134,724 20,578,108 21,033,467 43 Capital Program Contribution 9,327,120 9,366,201 1,068,841 8,335,605 8,580,372 11,039,470 10,215,889 10,012,033 10,252,034 10,555,216 10,867,297 11,188,574 11,519,375 11,859,984 12,210,686 12,571,782 44 TOTAL EXPENSES 34,653,061 39,403,015 34,895,385 39,771,182 40,076,561 46,126,524 46,179,819 47,497,511 49,389,918 50,243,375 51,205,352 52,161,256 53,136,941 54,296,815 55,490,458 56,656,195 45 46 ENDING RESERVES 47 Reappropriations (Non-CIP)20,000 - - - - - - - - - - - - - - - 48 Commitments (Non-CIP)765,000 714,000 2,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 49 Restricted for Debt Service 3,348,000 3,225,000 3,225,000 3,331,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 3,316,000 50 Emergency Plant Replacement 1,000,000 1,000,000 1,000,000 1,000,000 - - - - - - - - - - - - 51 Capital Reserve - - - - 4,000,000 13,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 9,256,000 52 Rate Stabilization Reserve 10,639,000 7,996,000 17,272,000 20,133,000 6,567,000 1,867,000 - - - - - - - - - - 53 Operations Reserve - - - - 11,663,836 9,807,734 11,017,309 7,655,292 7,759,702 9,208,904 10,185,947 10,710,850 10,890,498 10,976,735 10,969,473 11,713,415 54 Unassigned - - - - - - - - - - - - - - - - 55 TOTAL ENDING RESERVES 15,772,000 12,935,000 21,499,000 24,811,000 25,893,836 28,593,734 23,936,309 20,574,292 20,678,702 22,127,904 23,104,947 23,629,850 23,809,498 23,895,735 23,888,473 24,632,415 56 57 OPERATIONS RESERVE 58 Min (60 days of non-capital expenses)- - - - 5,230,611 6,082,017 6,232,446 6,488,975 6,767,143 6,864,270 6,977,906 7,089,168 7,202,255 7,336,928 7,475,494 7,607,764 59 Target (90 days of non-capital expenses)- - - - 9,395,240 9,166,903 9,395,593 9,783,548 10,204,079 10,353,171 10,527,111 10,697,594 10,870,947 11,085,459 11,306,122 11,517,661 60 Max (120 days of non-capital expenses)- - - - 13,559,870 12,251,790 12,558,739 13,078,120 13,641,014 13,842,072 14,076,317 14,306,020 14,539,639 14,833,990 15,136,750 15,427,559 61 Risk Assessment Value 2,481,768 2,873,181 2,840,361 3,050,960 3,320,931 3,523,428 3,579,316 3,636,369 3,704,694 3,794,916 3,892,600 4,062,286 Appendix A (continued) 1 FISCAL YEAR FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 2 3 REVENUES 4 Net Sales 90%84%84%91%82%92%92%92%93%93%93%93%93%93%93%93% 5 Other Revenues and Transfers In 10%16%16%9%18%8%8%8%7%7%7%7%7%7%7%7% 6 TOTAL REVENUES 100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100% 7 8 EXPENSES 9 Water Purchases 31%38%48%39%39%38%41%42%43%42%42%42%41%41%41%41% 10 Operating Expenses 11 Administration 12 Allocated Charges 5%5%7%6%6%5%5%5%5%5%5%5%5%5%5%5% 13 Rent 6%5%5%6%6%6%6%6%6%6%6%6%6%6%6%6% 14 Debt Service 10%9%9%8%8%7%7%7%7%6%6%6%6%6%6%6% 15 Transfers and Other Adjustments 1%1%6%1%0%1%1%1%1%1%1%1%1%1%1%1% 16 Subtotal, Administration 22%20%28%20%20%19%19%19%18%18%18%18%18%18%18%18% 17 Resource Management 2%1%2%1%1%1%1%1%1%1%1%1%1%1%1%1% 18 Operations and Mtc 14%12%14%13%13%12%12%12%12%12%12%12%12%13%13%13% 19 Engineering (Operating)1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1% 20 Customer Service 4%4%5%4%5%4%5%5%5%5%5%5%5%5%5%5% 21 Allowance for Unspent Budget 0%0%0%0%0%1%-1%-1%-1%-1%-1%-1%-1%-1%-1%-1% 22 Subtotal, Operating Expenses 42%38%49%40%39%38%37%37%36%37%37%37%37%37%37%37% 23 Capital Program Contribution 27%24%3%21%21%24%22%21%21%21%21%21%22%22%22%22% 24 TOTAL EXPENSES 100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100% 25 26 RISK ASSESSMENT DETAIL 27 Distribution Revenue Variance 1,623,731 1,769,234 1,818,772 2,049,757 2,295,727 2,467,907 2,492,586 2,517,512 2,552,757 2,608,918 2,671,532 2,805,108 28 10% CIP Program Contingency 858,037 1,103,947 1,021,589 1,001,203 1,025,203 1,055,522 1,086,730 1,118,857 1,151,938 1,185,998 1,221,069 1,257,178 29 Total Risk Asssessment Value 2,481,768 2,873,181 2,840,361 3,050,960 3,320,931 3,523,428 3,579,316 3,636,369 3,704,694 3,794,916 3,892,600 4,062,286 30 Projected Operations Reserve 11,663,836 9,807,734 11,017,309 7,655,292 7,759,702 9,208,904 10,185,947 10,710,850 10,890,498 10,976,735 10,969,473 11,713,415 31 Operations Reserve, % of Risk Value 470%341%388%251%234%261%285%295%294%289%282%288% 32 33 OPERATIONS RESERVE 34 Min (60 days of non-capital expenses)- - - - 5,230,611 6,082,017 6,232,446 6,488,975 6,767,143 6,864,270 6,977,906 7,089,168 7,202,255 7,336,928 7,475,494 7,607,764 35 Target (90 days of non-capital expenses)- - - - 9,395,240 9,166,903 9,395,593 9,783,548 10,204,079 10,353,171 10,527,111 10,697,594 10,870,947 11,085,459 11,306,122 11,517,661 36 Max (120 days of non-capital expenses)- - - - 13,559,870 12,251,790 12,558,739 13,078,120 13,641,014 13,842,072 14,076,317 14,306,020 14,539,639 14,833,990 15,136,750 15,427,559 37 Risk Assessment Value 2,481,768 2,873,181 2,840,361 3,050,960 3,320,931 3,523,428 3,579,316 3,636,369 3,704,694 3,794,916 3,892,600 4,062,286 38 39 DEBT SERVICE COVERAGE RATIO 40 Net Revenues (125% of Debt Service)658%787%951%876%878%989%1017%1063%1115%1132%1152%1171%1191%1216%1242%1267% 41 Available Reserves (5x Debt Service)*3.5 2.7 5.7 6.6 6.9 7.7 6.3 5.2 5.3 5.7 6.0 6.2 6.2 6.3 6.3 6.5 WATER UTILITY FINANCIAL PLAN June 16, 2014 33 | Page APPENDIX B: WATER UTILITY CAPITAL IMPROVEMENT PROGRAM (CIP) DETAIL WATER UTILITY FINANCIAL PLAN June 16, 2014 34 | Page Appendix B: Water Utility Capital Improvement Program (CIP) Detail (Continued) WATER UTILITY FINANCIAL PLAN June 16, 2014 35 | Page APPENDIX C: WATER UTILITY RESERVES MANAGEMENT PRACTICES The following reserves management practices shall be used when developing the Water Utility Financial Plan: Section 1. Definitions a) “Financial Planning Period” – The Financial Planning Period is the range of future fiscal years covered by the Financial Plan. For example, for the Water Utility Financial Plan delivered in conjunction with the FY 2015 budget, FY 2015 to FY 2021 is the Financial Planning Period. b) “Fund Balance” – As used in these Reserves Management Practices, Fund Balance refers to the Utility’s Unrestricted Net Assets. c) “Net Assets” - The Government Accounting Standards Board defines a Utility’s Net Assets as the difference between its assets and liabilities. d) “Unrestricted Net Assets” - The portion of the Utility’s Net Assets not invested in capital assets (net of related debt) or restricted for debt service or other restricted purposes. Section 2. Reserves The Water Utility’s Fund Balance is reserved for the following purposes: a) For existing contracts, as described in Section 3 (Reserve for Commitments) b) For operating and capital budgets re-appropriated from previous years, as described in Section 4 (Reserve for Re-appropriations) c) For cash flow management and contingencies related to the Water Utility’s Capital Improvement Program (CIP), as described in Section 5 (CIP Reserve) d) For rate stabilization, as described in Section 6 (Rate Stabilization Reserve) e) For operating contingencies, as described in Section 7 (Operations Reserve) f) Any funds not included in the other reserves will be considered Unassigned Reserves and shall be returned to ratepayers or assigned a specific purpose as described in Section 8 (Unassigned Reserves). Section 3. Reserve for Commitments At the end of each fiscal year the Reserve for Commitments will be set to an amount equal to the total remaining spending authority for all contracts in force for the Water Utility at that time. Section 4. Reserve for Re-appropriations At the end of each fiscal year the Reserve for Re-appropriations will be set to an amount equal to the amount of all remaining capital and non-capital budgets, if any, that will be re- appropriated to the following fiscal year in accordance with Palo Alto Municipal Code Section 2.28.090. WATER UTILITY FINANCIAL PLAN June 16, 2014 36 | Page Section 5. CIP Reserve The CIP Reserve is used to manage cash flow for capital projects and acts as a reserve for capital contingencies. Staff will manage the CIP Reserve according to the following practices: a) The following guideline levels are set forth for the CIP Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of CIP expense budgeted for that year. Minimum Level 12 months of budgeted CIP expense Maximum Level 24 months of budgeted CIP expense b) Changes in Reserves: Staff is authorized to transfer funds between the CIP Reserve and the Reserve for Commitments when funds are added or removed from to that reserve as a result of a change in contractual commitments related to CIP projects. Any other additions to or withdrawals from the CIP reserve require Council action. c) Minimum Level: i) Funds held in the Reserve for Commitments may be counted as part of the CIP Reserve for the purpose of determining compliance with the CIP Reserve minimum guideline level. ii) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered by the end of the following fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is below its minimum level at the end of FY 2017, staff must present a plan by June 30, 2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff may present, and the Council may adopt, an alternative plan that takes longer than one year to replenish the reserve, or that does so in a shorter period of time. d) Maximum Level: If, at any time, the CIP Reserve reaches its maximum level, no funds may be added to this reserve. If there are funds in this reserve in excess of the maximum level staff must propose to transfer these funds to another reserve or return them to ratepayers in the next Financial Plan. Staff may also seek City Council to approve holding funds in this reserve in excess of the maximum level if they are held for a specific future purpose related to the CIP. Section 6. Rate Stabilization Reserve Funds may be added to the Rate Stabilization Reserve by action of the City Council and held to manage the trajectory of future year rate increases. Withdrawal of funds from the Rate Stabilization Reserve requires Council action. If there are funds in the Rate Stabilization Reserve at the end of any fiscal year, any subsequent Water Utility Financial Plan must result in the withdrawal of all funds from this Reserve by the end of the next Financial Planning Period. WATER UTILITY FINANCIAL PLAN June 16, 2014 37 | Page Section 7. Operations Reserve The Operations Reserve is used to manage normal variations in costs and as a reserve for contingencies. Any portion of the Water Utility’s Fund Balance not included in the reserves described in Section 3-Section 6 above will be included in the Operations Reserve unless this reserve has reached its maximum level as set forth in Section 7(d) below. Staff will manage the Operations Reserve according to the following practices: a) The following guideline levels are set forth for the Operations Reserve. These guideline levels are calculated for each fiscal year of the Financial Planning Period based on the levels of Operations and Maintenance (O&M) and commodity expense forecasted for that year in the Financial Plan. Minimum Level 60 days of O&M and commodity expense Target Level 90 days of O&M and commodity expense Maximum Level 120 days of O&M and commodity expense b) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Operations Reserve are lower than the minimum level set forth above, staff shall present a plan to the City Council to replenish the reserve. The plan shall be delivered within six months of the end of the fiscal year, and shall, at a minimum, result in the reserve reaching its minimum level by the end of the following fiscal year. For example, if the Operations Reserve is below its minimum level at the end of FY 2014, staff must present a plan by December 31, 2014 to return the reserve to its minimum level by June 30, 2015. In addition, staff may present, and the Council may adopt, an alternative plan that takes longer than one year to replenish the reserve. c) Target Level: If, at the end of any fiscal year, the Operations Reserve is higher or lower than the target level, any Financial Plan created for the Water Utility shall be designed to return the Operations Reserve to its target level within four years. d) Maximum Level: If, at any time, the Operations Reserve reaches its maximum level, no funds may be added to this reserve. Any further increase in the Water Utility’s Fund Balance shall be automatically included in the Unassigned Reserve described in Section 8, below. Section 8. Unassigned Reserve If the Operations Reserve reaches its maximum level, any further additions to the Water Utility’s Fund Balance will be held in the Unassigned Reserve. If there are any funds in the Unassigned Reserve at the end of any fiscal year, the next Financial Plan presented to the City Council must include a plan to assign them to a specific purpose or return them to the Water Utility ratepayers by the end of the first fiscal year of the next Financial Planning Period. For example, if there were funds in the Unassigned Reserves at the end of FY 2015, and the next Financial Planning Period is FY 2016 through FY 2021, the Financial Plan shall include a plan to return or assign any funds in the Unassigned Reserve by the end of FY 2016. Staff may present an alternative plan that retains these funds or returns them over a longer period of time. WATER UTILITY FINANCIAL PLAN June 16, 2014 38 | Page APPENDIX D: DESCRIPTION OF WATER UTILITY OPERATIONAL ACTIVITIES This appendix describes the activities associated with the various operational activities referred to in Section 6B: Operations of this Financial Plan. Administration: Accounting, purchasing, legal, and other administrative functions provided by the City’s General Fund staff, as well as shared communications services, CPAU administrative overhead, and billing system maintenance costs. This category also includes Water Utility debt service and rent paid to the General Fund for the land associated with reservoirs and various other facilities. Customer Service: This category includes the Water Utility’s share of the call center, meter reading, collections, and billing support functions. Billing support encompasses staff time associated with bill investigations and quality control on certain aspects of the billing process. It does not include maintenance of the billing system itself, which is included in Administration. This category also includes CPAU’s key account representatives, who work with large commercial customers who have more complex requirements for their water services. Engineering (Operating): The Water Utility’s engineers focus primarily on the CIP, but a small portion of their time is spent assisting with distribution system maintenance. Operations and Maintenance: This category includes the costs of a variety of distribution system maintenance activities, including: • investigating reports of damaged mains or services and performing emergency repairs; • testing and operating valves; • monitoring water quality and reservoir levels; • monitoring the status of the different pressure zones; • flushing water at hydrants and other closed end points of the system; • building and replacing water services for new or redeveloped buildings; and • testing and replacing meters to ensure accurate sales metering. This category also includes a variety of functions the utility shares with other City utilities, including: • the Field Services team (which does field research of various customer service issues); • the Cathodic Protection team (which monitors and maintains the systems that prevent corrosion in metal tanks and reservoirs); and • the General Services team (which manages and maintains equipment, paves and restores streets after gas, water, or sewer main replacements, and provides welding services) Resource Management: This category includes water procurement, contract management, water resource planning, interaction with BAWSCA, the SFPUC, and the SCVWD, and tracking of legislation and regulation related to the water industry. June 16, 2014 39 | Page APPENDIX E: SAMPLE OF WATER UTILITY OUTREACH COMMUNICATIONS Attachment C *NOT YET APPROVED * Resolution No. _________ Resolution of the Council of the City of Palo Alto Increasing Water Rates by Amending Rate Schedules W-1 (General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non- Residential Water Service), and W-7 (Non-Residential Irrigation Water Service) R E C I T A L S A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. B. On June 13, 2016, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. C. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 13, 2016 public hearing was mailed to all City of Palo Alto Utilities water customers by April 29, 2016. D. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed water rate amendments, therefore a majority protest does not exist against the proposal. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-1, as amended, shall become effective July 1, 2016. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-2, as amended, shall become effective July 1, 2016. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-3 (Fire Service Connections) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-3, as amended, shall become effective July 1, 2016. 160322 sdl 6053683 CMR #6932: ATTACHMENT N Attachment C * NOT YET APPROVED * SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (Residential Master-Metered and General Non-Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-4, as amended, shall become effective July 1, 2016. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Non-Residential Irrigation Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-7, as amended, shall become effective July 1, 2016. SECTION 6. The City Council finds as follows: a. Revenues derived from the water rates approved by this resolution do not exceed the funds required to provide water service. b. Revenues derived from the water rates approved by this resolution shall not be used for any purpose other than providing water service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. c. The amount of the water rates imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the water service attributable to the parcel. SECTION 7. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. SECTION 8. Each of the rate schedules adopted by this resolution includes a structure of drought surcharges that correspond to different levels of water use reduction in the City. In order to charge the lowest drought surcharge possible, each rate schedule includes not only the surcharge required to meet the 25% reduction level, but also surcharges reflecting two lower levels of water use reduction. At any time, no more than one of these three surcharges will be applicable. On August 17, 2015, Council adopted Resolution 9542 which established that the Level 2 (20%) drought surcharges set forth on the City's schedule of water rates will be collected on all City of Palo Alto Utilities water customer bills as of September 1, 2015 and declared that the surcharge shall remain in effect until rescinded or modified by the City Council. SECTION 9. The Council finds that the adoption of this resolution changing water rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code 160322 sdl 6053683 Attachment C * NOT YET APPROVED * Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services 160322 sdl 6053683 GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-1-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-1-1 A. APPLICABILITY: This schedule applies to all separately metered single family residential water services. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge: Per Month For 5/8-inch meter ..................................................................................................... $ 16.7703 For 3/4 inch meter ..................................................................................................... 2122.6050 For 1 inch meter ........................................................................................................ 3234.2645 For 1 1/2 inch meter .................................................................................................. 5963.4083 For 2-inch meter ........................................................................................................ 9298.3767 For 3-inch meter ........................................................................................................ 196209.1170 For 4-inch meter ........................................................................................................ 350372.3100 For 6-inch meter ........................................................................................................ 716762.8182 For 8-inch meter ........................................................................................................1,3191,403.9407 For 10-inch meter ......................................................................................................2,0852,219.9257 For 12-inch meter .......................................................................................................2,7422,919.3456 Commodity Rate: (To be added to Service Charge and applicable to all pressure zones.) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Tier 1 usage ........................................................................................................................$56.3093 Tier 2 usage (All usage over 100% of Tier 1) ........................................................................ 8.8238 ATTACHMENT D GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-1-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-1-2 Drought Surcharges: A drought surcharge will be added to the Customer’s applicable Commodity Rate for Tier 1 and Tier 2 water usage when the City Council has determined that a water reduction level is in effect for the City as described in Section D.3. The drought surcharges in the table below are measured in dollars per hundred cubic feet (ccf). Water Usage Reduction level Level 1 (10/15%) Level 2 (20%) Level 3 (25%) Tier 1 0.2019 0.4339 0.6459 Tier 2 0.5855 1.2114 1.8576 Temporary unmetered service to residential subdivision developers, per connection ........................................................................ $6.00 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Calculation of Usage Tiers Tier 1 water usage shall be calculated and billed based upon a level of 0.2 ccf per day rounded to the nearest whole ccf, based on meter reading days of service. As an example, for a 30 day bill, the Tier 1 level would be 0 through 6 ccf. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-1-3 Effective 97-1-20156 dated 79-1-2015 Sheet No W-1-3 3. Drought Surcharge During period of water shortage or restrictions on local water use, the City Council may, by resolution, declare the need for citywide water conservation at the 10/15%, 20% or 25% level. While such a resolution is in effect, a drought surcharge will apply. The purpose of the Drought Surcharge is to recover revenues lost as a result of reduced consumption. {End} WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-2-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-2-1 A. APPLICABILITY: This schedule applies to all water taken from fire hydrants for construction, maintenance, and other uses in conformance with provisions of a Hydrant Meter Permit. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: 1. Monthly Service Charge. METER SIZE 5/8 inch ........................................................................................................................... 50.00 3 inch ........................................................................................................................... 125.00 2. Commodity Rate: (per hundred cubic feet) ................................................................ $67.3292 3. Drought Surcharges: A drought surcharge will be added to the Customer’s applicable Commodity Rate when the City Council has determined that a water reduction level is in effect for the City as described in Section D.5. The drought surcharges in the table below are measured in dollars per hundred cubic feet (ccf). Water Usage Reduction level Level 1 (10/15%) Level 2 (20%) Level 3 (25%) Surcharge 0.2624 0.5349 0.7772 D. SPECIAL NOTES: 1. Monthly charges shall include the applicable monthly service charge in addition to usage billed at the commodity rate. 2. Any applicant using a hydrant without obtaining a Hydrant Meter Permit or any permittee using a hydrant without a Hydrant Meter Permit shall pay a fee of $50.00 for each day of such use in WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-2-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-2-2 addition to all other costs and fees provided in this schedule. A hydrant permit may be denied or revoked for failure to pay such fee. 3. A meter deposit of $750.00 may be charged any applicant for a Hydrant Meter Permit as a prerequisite to the issuance of a permit and meter(s). A charge of $50.00 per day will be added for delinquent return of hydrant meters. A fee will be charged for any meter returned with missing or damaged parts. 4. Any person or company using a fire hydrant improperly or without a permit, or who draws water from a hydrant without a meter installed and properly recording usage shall, in addition to all other applicable charges be subject to criminal prosecution pursuant to the Palo Alto Municipal Code. 5. During period of water shortage or restrictions on local water use, the City Council may, by resolution, declare the need for citywide water conservation at the 10/15%, 20% or 25% level. While such a resolution is in effect, a drought surcharge will apply. The purpose of the Drought Surcharge is to recover revenues lost as a result of reduced consumption. {End} WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-2-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-2-1 A. APPLICABILITY: This schedule applies to all water taken from fire hydrants for construction, maintenance, and other uses in conformance with provisions of a Hydrant Meter Permit. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: 1. Monthly Service Charge. METER SIZE 5/8 inch ........................................................................................................................... 50.00 3 inch ........................................................................................................................... 125.00 2. Commodity Rate: (per hundred cubic feet) ................................................................ $67.3292 3. Drought Surcharges: A drought surcharge will be added to the Customer’s applicable Commodity Rate when the City Council has determined that a water reduction level is in effect for the City as described in Section D.5. The drought surcharges in the table below are measured in dollars per hundred cubic feet (ccf). Water Usage Reduction level Level 1 (10/15%) Level 2 (20%) Level 3 (25%) Surcharge 0.2624 0.5349 0.7772 D. SPECIAL NOTES: 1. Monthly charges shall include the applicable monthly service charge in addition to usage billed at the commodity rate. 2. Any applicant using a hydrant without obtaining a Hydrant Meter Permit or any permittee using a hydrant without a Hydrant Meter Permit shall pay a fee of $50.00 for each day of such use in WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-2-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-2-2 addition to all other costs and fees provided in this schedule. A hydrant permit may be denied or revoked for failure to pay such fee. 3. A meter deposit of $750.00 may be charged any applicant for a Hydrant Meter Permit as a prerequisite to the issuance of a permit and meter(s). A charge of $50.00 per day will be added for delinquent return of hydrant meters. A fee will be charged for any meter returned with missing or damaged parts. 4. Any person or company using a fire hydrant improperly or without a permit, or who draws water from a hydrant without a meter installed and properly recording usage shall, in addition to all other applicable charges be subject to criminal prosecution pursuant to the Palo Alto Municipal Code. 5. During period of water shortage or restrictions on local water use, the City Council may, by resolution, declare the need for citywide water conservation at the 10/15%, 20% or 25% level. While such a resolution is in effect, a drought surcharge will apply. The purpose of the Drought Surcharge is to recover revenues lost as a result of reduced consumption. {End} FIRE SERVICE CONNECTIONS UTILITY RATE SCHEDULE W-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-3-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-3-1 A. APPLICABILITY: This schedule applies to all public fire hydrants and private fire service connections. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: 1. Monthly Service Charges Public Fire Hydrant .................................................................................................... $5.00 Private Fire Service: 2-inch connection .......................................................................................................$3.7943 4-inch connection .......................................................................................................2123.4222 6-inch connection ....................................................................................................... 6168.0363 8-inch connection .......................................................................................................131144.9734 10-inch connection .....................................................................................................236260.7020 12-inch connection .....................................................................................................381421.1152 2. Commodity (To be added to Service Charge unless water is used for fire extinguishing or testing purposes.) Per Hundred Cubic Feet All water usage........................................................................................................... $10.00 D. SPECIAL NOTES: 1. Service under this schedule may be discontinued if water is used for any purpose other than fire extinguishing or testing and repairing the fire extinguishing facilities. Using hydrants and fire services for other purposes is illegal and will be subject to the commodity charge as noted above, fines, and criminal prosecution pursuant to the Palo Alto Municipal Code. 2. For a combination water and fire service, the general water service schedule shall apply. FIRE SERVICE CONNECTIONS UTILITY RATE SCHEDULE W-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-3-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-3-2 3. Utilities Rule and Regulation No. 21 provides additional information on Automatic Fire Services. 4. Repairs and testing of fire extinguishing facilities are not considered unauthorized use of water if records and documentation are supplied by the customer. {End} RESIDENTIAL MASTER-METERED AND GENERAL NON-RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-4-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-4-1 A. APPLICABILITY: This schedule applies to non-residential water service in the City of Palo Alto and its distribution area. This schedule is also applicable to multi-family residential customers served through a master meter. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge Per Month For 5/8-inch meter .................................................................................... $ 16.7703 For 3/4-inch meter .................................................................................... 2122.6050 For 1-inch meter .................................................................................... 3234.2645 For 1 ½-inch meter .................................................................................... 5963.4083 For 2-inch meter .................................................................................... 9298.3767 For 3-inch meter .................................................................................... 196209.1170 For 4-inch meter .................................................................................... 350372.3100 For 6-inch meter .................................................................................... 716762.8182 For 8-inch meter ....................................................................................1,319403.9407 For 10-inch meter ....................................................................................2,085219.9257 For 12-inch meter ....................................................................................2,742919.3456 Commodity Rates: (to be added to Service Charge) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Per ccf ............................................................................................................ $ 67.3292 RESIDENTIAL MASTER-METERED AND GENERAL NON-RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-4-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-4-2 Drought Surcharges: A drought surcharge will be added to the Customer’s applicable Commodity Rate when the City Council has determined that a water reduction level is in effect for the City as described in Section D.2. The drought surcharges in the table below are measured in dollars per hundred cubic feet (ccf). Water Usage Reduction level Level 1 (10/15%) Level 2 (20%) Level 3 (25%) Surcharge 0.2624 0.4953 0.7772 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Drought Surcharge During period of water shortage or restrictions on local water use, the City Council may, by resolution, declare the need for citywide water conservation at the 10/15%, 20% or 25% level. While such a resolution is in effect, a drought surcharge will apply. The purpose of the Drought Surcharge is to recover revenues lost as a result of reduced consumption. {End} NON-RESIDENTIAL IRRIGATION WATER SERVICE UTILITY RATE SCHEDULE W-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-7-1 Effective 97-1-20156 dated 79-1-2015 Sheet No W-7-1 A. APPLICABILITY: This schedule applies to non-residential water service supplying dedicated irrigation meters in the City of Palo Alto and its distribution area. B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides water services. C. RATES: Per Meter Monthly Service Charge Per Month For 5/8-inch meter .................................................................................... $ 16.7703 For 3/4-inch meter .................................................................................... 2122.6050 For 1-inch meter .................................................................................... 3234.2645 For 1 1/2 inch meter .................................................................................... 5963.4083 For 2-inch meter .................................................................................... 9298.3767 For 3-inch meter .................................................................................... 196209.1170 For 4-inch meter .................................................................................... 350372.3100 For 6-inch meter .................................................................................... 716762.8182 For 8-inch meter ....................................................................................1,319403.9407 For 10-inch meter ....................................................................................2,085219.9257 For 12-inch meter ....................................................................................2,742919.3456 Commodity Rates: (to be added to Service Charge) Per Hundred Cubic Feet (ccf) Per Month All Pressure Zones Per ccf ............................................................................................................ $ 8.7229 Drought Surcharges: A drought surcharge will be added to the Customer’s applicable Commodity Rate when the City Council has determined that a water reduction level is in effect for the City as described in Section D.2. The drought surcharges in the table below are measured in dollars per hundred cubic feet (ccf). NON-RESIDENTIAL IRRIGATION WATER SERVICE UTILITY RATE SCHEDULE W-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No W-7-2 Effective 97-1-20156 dated 79-1-2015 Sheet No W-7-2 Water Usage Reduction level Level 1 (10/15%) Level 2 (20%) Level 3 (25%) Surcharge 0.5351 1.2518 12.0293 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Drought Surcharge During period of water shortage or restrictions on local water use, the City Council may, by resolution, declare the need for citywide water conservation at the 10/15%, 20% or 25% level. While such a resolution is in effect, a drought surcharge will apply. The purpose of the Drought Surcharge is to recover revenues lost as a result of reduced consumption. {End} NOT YET APPROVED 2016-06-01 (HR)(Budget) RESO Amending Various Salary Schedules 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Amending Salary Schedules for the Utilities Managers of Palo Alto Professional Association, the Service Employees International Union, and the International Association of Fire Fighters, Local 1319 The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Salary Schedule for the Utilities Managers of Palo Alto Professional Association, as amended by Resolution 9527, is hereby further amended as set forth in Exhibit “1”, attached hereto and incorporated herein by reference. SECTION 2. The Salary Schedule in the 2015-2018 Memorandum of Agreement with the Service Employees International Union, as adopted on April 11, 2016 (CMR # 6789), is hereby amended as set forth in Exhibit “2”, attached hereto and incorporated herein by reference. SECTION 3. The Salary Schedule in the 2013-2015 Memorandum of Agreement with the Service Employees International Union, as adopted by Resolution No. 9398 and amended by Resolution No. 9527, is hereby amended as set forth in Exhibit “3”, attached hereto and incorporated herein by reference. SECTION 4. The Salary Schedule in the 2014-2018 Memorandum of Agreement with the International Association of Fire Fighters, Local 1319, as adopted on April 11, 2016 (CMR # 6789) is hereby amended as set forth in Exhibit “4”, attached hereto and incorporated herein by reference. SECTION 5. The Director of Administrative Services is authorized to implement the amended salary schedules set forth in Sections 1, 2, 3, and 4. SECTION 6. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer CMR #6932: ATTACHMENT O Effective 7/01/2016 ** Updated 05/31/2016** Job Code Classifications Grade Codes Min Hourly Rate Mid Point Hourly Rate Max Hourly Rate Approx Mid-Point Monthly Salary Annual Salary 2076 Administrative Assistant - U 700 $30.08 $37.59 $45.11 $6,516 $78,187 1002 Assistant Director Utilities - Customer Support 230 $63.42 $79.27 $95.13 $13,740 $164,882 1003 Assistant Director Utilities - Engineering 190 $70.46 $88.07 $105.69 $15,265 $183,186 6 Assistant Director Utilities - Operations 210 $70.46 $88.07 $105.69 $15,265 $183,186 65 Assistant Director Utilities - Resource Management 190 $70.46 $88.07 $105.69 $15,265 $183,186 84 Division Manager/Manager of Communications 380 $45.72 $57.14 $68.57 $9,904 $118,851 129 Engineering Manager, Electric 231 $60.48 $75.59 $90.71 $13,102 $157,227 120 Engineering Manager, Water, Gas & Wastewater 231 $60.48 $75.59 $90.71 $13,102 $157,227 179 Manager, Customer Service and Meter Reading 300 $48.56 $60.70 $72.84 $10,521 $126,256 185 Manager, Electric Operations 270 $59.22 $74.02 $88.83 $12,830 $153,962 1114 Manager, Utilities Credit & Collection 300 $48.56 $60.70 $72.84 $10,521 $126,256 150 Manager, Utilities Marketing Services Manager, Utilities Program Services 300 $48.56 $60.70 $72.84 $10,521 $126,256 156 Manager, Utilities Operations WGW 290 $59.14 $73.92 $88.71 $12,813 $153,754 48 Manager, Utilities Telecommunications 250 $53.47 $66.83 $80.20 $11,584 $139,006 13 Senior Business Analyst 340 $43.86 $54.82 $65.79 $9,502 $114,026 188 Senior Electrical Engineer 291 $55.33 $69.16 $83.00 $11,988 $143,853 2187 Senior Engineer - U 710 $52.64 $65.79 $78.95 $11,404 $136,843 2014 Senior Management Analyst - U 350 $42.74 $53.42 $64.11 $9,259 $111,114 64 Sr. Resource Planner 271 $54.02 $67.52 $81.03 $11,703 $140,442 27 Supervising Electrical Project Engineer 341 $51.42 $64.27 $77.13 $11,140 $133,682 28 Supervising Project Engineer 360 $47.75 $59.68 $71.62 $10,345 $124,134 1115 Supervisor, Inspection Services 390 $36.72 $45.89 $55.07 $7,955 $95,465 1011 Utilities Compliance Manager 290 $59.14 $73.92 $88.71 $12,813 $153,754 114 Utilities Supervisor 680 $51.32 $64.14 $76.97 $11,118 $133,411 2020 Principal Business Analyst - U TBD $46.93 $58.66 $70.40 $10,168 $122,013 2017 Utility Safety Officer TBD $34.91 $43.63 $52.36 $7,563 $90,750 2025 Manager Utilities Strategic Business 231 $60.48 $75.59 $90.71 $13,102 $157,227 UMPAPA Salary Schedule EXHIBIT "1" Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 1 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 203 non-exempt Facilities Asst 1 $23.09 $24.44 $25.12 $25.87 2 $24.31 $25.73 $26.44 $27.23 3 $25.59 $27.08 $27.83 $28.66 4 $26.94 $28.50 $29.29 $30.17 5 $28.36 $4,915.73 $58,988.80 $30.00 $5,200.00 $62,400.00 $30.83 $5,343.87 $64,126.40 $31.76 $5,505.07 $66,060.80 204 non-exempt Acct Spec 1 $24.44 $25.18 $25.18 $25.94 2 $25.73 $26.51 $26.51 $27.31 3 $27.08 $27.90 $27.90 $28.75 4 $28.51 $29.37 $29.37 $30.26 5 $30.01 $5,201.73 $62,420.80 $30.92 $5,359.47 $64,313.60 $30.92 $5,359.47 $64,313.60 $31.85 $5,520.67 $66,248.00 205 non-exempt Court Liaison Officer 1 $33.95 $35.58 $36.20 $37.30 2 $35.74 $37.45 $38.11 $39.26 3 $37.62 $39.42 $40.12 $41.33 4 $39.60 $41.49 $42.23 $43.50 5 $41.68 $7,224.53 $86,694.40 $43.67 $7,569.47 $90,833.60 $44.45 $7,704.67 $92,456.00 $45.79 $7,936.93 $95,243.20 206 non-exempt Account Assistant 1 $20.92 $21.56 $21.56 $22.21 2 $22.02 $22.69 $22.69 $23.38 3 $23.18 $23.88 $23.88 $24.61 4 $24.40 $25.14 $25.14 $25.90 5 $25.68 $4,451.20 $53,414.40 $26.46 $4,586.40 $55,036.80 $26.46 $4,586.40 $55,036.80 $27.26 $4,725.07 $56,700.80 207 non-exempt Acct Spec-Lead 1 $26.15 $26.96 $26.96 $27.77 2 $27.53 $28.38 $28.38 $29.23 3 $28.98 $29.87 $29.87 $30.77 4 $30.51 $31.44 $31.44 $32.39 5 $32.12 $5,567.47 $66,809.60 $33.09 $5,735.60 $68,827.20 $33.09 $5,735.60 $68,827.20 $34.09 $5,908.93 $70,907.20 208 non-exempt CDBG Coordinator 1 $38.43 $39.85 $40.15 $41.34 2 $40.45 $41.95 $42.26 $43.52 3 $42.58 $44.16 $44.48 $45.81 4 $44.82 $46.48 $46.82 $48.22 5 $47.18 $8,177.87 $98,134.40 $48.93 $8,481.20 $101,774.40 $49.28 $8,541.87 $102,502.40 $50.76 $8,798.40 $105,580.80 209 non-exempt Property Evid Tech 1 $26.11 $27.35 $27.84 $28.68 2 $27.48 $28.79 $29.31 $30.19 3 $28.93 $30.31 $30.85 $31.78 4 $30.45 $31.90 $32.47 $33.45 5 $32.05 $5,555.33 $66,664.00 $33.58 $5,820.53 $69,846.40 $34.18 $5,924.53 $71,094.40 $35.21 $6,103.07 $73,236.80 211 non-exempt Equip Maint Serv Per 1 $22.62 $23.56 $23.83 $24.54 2 $23.81 $24.80 $25.08 $25.83 3 $25.06 $26.10 $26.40 $27.19 4 $26.38 $27.47 $27.79 $28.62 5 $27.77 $4,813.47 $57,761.60 $28.92 $5,012.80 $60,153.60 $29.25 $5,070.00 $60,840.00 $30.13 $5,222.53 $62,670.40 212 non-exempt Buyer 1 $34.49 $35.54 $35.56 $36.61 2 $36.30 $37.41 $37.43 $38.54 3 $38.21 $39.38 $39.40 $40.57 4 $40.22 $41.45 $41.47 $42.71 5 $42.34 $7,338.93 $88,067.20 $43.63 $7,562.53 $90,750.40 $43.65 $7,566.00 $90,792.00 $44.96 $7,793.07 $93,516.80 213 non-exempt Mailing Svcs Spec 1 $20.48 $21.12 $21.16 $21.78 2 $21.56 $22.23 $22.27 $22.93 3 $22.69 $23.40 $23.44 $24.14 4 $23.88 $24.63 $24.67 $25.41 5 $25.14 $4,357.60 $52,291.20 $25.93 $4,494.53 $53,934.40 $25.97 $4,501.47 $54,017.60 $26.75 $4,636.67 $55,640.00 Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2017)Salary Effective 12/29/17 (PP26:2017)Job Code FLSA Job Title Steps EXHIBIT "2" Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 2 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 214 non-exempt Crime Analyst 1 $33.95 $35.58 $36.20 $37.30 2 $35.74 $37.45 $38.11 $39.26 3 $37.62 $39.42 $40.12 $41.33 4 $39.60 $41.49 $42.23 $43.50 5 $41.68 $7,224.53 $86,694.40 $43.67 $7,569.47 $90,833.60 $44.45 $7,704.67 $92,456.00 $45.79 $7,936.93 $95,243.20 215 non-exempt Util Acct Rep 1 $38.15 $39.29 $39.29 $40.48 2 $40.16 $41.36 $41.36 $42.61 3 $42.27 $43.54 $43.54 $44.85 4 $44.49 $45.83 $45.83 $47.21 5 $46.83 $8,117.20 $97,406.40 $48.24 $8,361.60 $100,339.20 $48.24 $8,361.60 $100,339.20 $49.69 $8,612.93 $103,355.20 216 non-exempt Marketing Eng 1 $43.64 $45.17 $45.37 $46.74 2 $45.94 $47.55 $47.76 $49.20 3 $48.36 $50.05 $50.27 $51.79 4 $50.91 $52.68 $52.92 $54.52 5 $53.59 $9,288.93 $111,467.20 $55.45 $9,611.33 $115,336.00 $55.71 $9,656.40 $115,876.80 $57.39 $9,947.60 $119,371.20 217 non-exempt Cust Svc Spec 1 $28.56 $29.41 $29.41 $30.31 2 $30.06 $30.96 $30.96 $31.90 3 $31.64 $32.59 $32.59 $33.58 4 $33.31 $34.31 $34.31 $35.35 5 $35.06 $6,077.07 $72,924.80 $36.12 $6,260.80 $75,129.60 $36.12 $6,260.80 $75,129.60 $37.21 $6,449.73 $77,396.80 218 non-exempt Cust Svc Represent 1 $25.98 $26.76 $26.76 $27.56 2 $27.35 $28.17 $28.17 $29.01 3 $28.79 $29.65 $29.65 $30.54 4 $30.30 $31.21 $31.21 $32.15 5 $31.89 $5,527.60 $66,331.20 $32.85 $5,694.00 $68,328.00 $32.85 $5,694.00 $68,328.00 $33.84 $5,865.60 $70,387.20 219 non-exempt Util Credit/Col Spec 1 $31.47 $32.40 $32.40 $33.38 2 $33.13 $34.11 $34.11 $35.14 3 $34.87 $35.91 $35.91 $36.99 4 $36.70 $37.80 $37.80 $38.94 5 $38.63 $6,695.87 $80,350.40 $39.79 $6,896.93 $82,763.20 $39.79 $6,896.93 $82,763.20 $40.99 $7,104.93 $85,259.20 223 non-exempt Util Acctg Tech 1 $26.41 $27.20 $27.20 $28.03 2 $27.80 $28.63 $28.63 $29.51 3 $29.26 $30.14 $30.14 $31.06 4 $30.80 $31.73 $31.73 $32.69 5 $32.42 $5,619.47 $67,433.60 $33.40 $5,789.33 $69,472.00 $33.40 $5,789.33 $69,472.00 $34.41 $5,964.40 $71,572.80 224 non-exempt Sr Chemist 1 $39.02 $40.20 $40.23 $41.45 2 $41.07 $42.32 $42.35 $43.63 3 $43.23 $44.55 $44.58 $45.93 4 $45.50 $46.89 $46.93 $48.35 5 $47.89 $8,300.93 $99,611.20 $49.36 $8,555.73 $102,668.80 $49.40 $8,562.67 $102,752.00 $50.89 $8,820.93 $105,851.20 226 non-exempt Wtr Mtr Crs Cn Tec 1 $27.34 $28.60 $29.07 $29.93 2 $28.78 $30.10 $30.60 $31.51 3 $30.29 $31.68 $32.21 $33.17 4 $31.88 $33.35 $33.90 $34.92 5 $33.56 $5,817.07 $69,804.80 $35.11 $6,085.73 $73,028.80 $35.68 $6,184.53 $74,214.40 $36.76 $6,371.73 $76,460.80 227 non-exempt Inspector, Field Svc 1 $34.47 $36.05 $36.61 $37.72 2 $36.28 $37.95 $38.54 $39.70 3 $38.19 $39.95 $40.57 $41.79 4 $40.20 $42.05 $42.71 $43.99 5 $42.32 $7,335.47 $88,025.60 $44.26 $7,671.73 $92,060.80 $44.96 $7,793.07 $93,516.80 $46.31 $8,027.07 $96,324.80 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 3 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 229 non-exempt Theater Specialist 1 $34.65 $36.01 $36.33 $37.42 2 $36.47 $37.90 $38.24 $39.39 3 $38.39 $39.89 $40.25 $41.46 4 $40.41 $41.99 $42.37 $43.64 5 $42.54 $7,373.60 $88,483.20 $44.20 $7,661.33 $91,936.00 $44.60 $7,730.67 $92,768.00 $45.94 $7,962.93 $95,555.20 230 non-exempt Offset Equip Op 1 $23.22 $23.94 $23.98 $24.70 2 $24.44 $25.20 $25.24 $26.00 3 $25.73 $26.53 $26.57 $27.37 4 $27.08 $27.93 $27.97 $28.81 5 $28.50 $4,940.00 $59,280.00 $29.40 $5,096.00 $61,152.00 $29.44 $5,102.93 $61,235.20 $30.33 $5,257.20 $63,086.40 232 non-exempt Prog-Analyst 1 $39.44 $41.71 $42.85 $44.14 2 $41.52 $43.91 $45.11 $46.46 3 $43.71 $46.22 $47.48 $48.91 4 $46.01 $48.65 $49.98 $51.48 5 $48.43 $8,394.53 $100,734.40 $51.21 $8,876.40 $106,516.80 $52.61 $9,119.07 $109,428.80 $54.19 $9,392.93 $112,715.20 233 non-exempt Util Rate Analyst 1 $36.77 $37.88 $37.88 $39.02 2 $38.71 $39.87 $39.87 $41.07 3 $40.75 $41.97 $41.97 $43.23 4 $42.89 $44.18 $44.18 $45.51 5 $45.15 $7,826.00 $93,912.00 $46.51 $8,061.73 $96,740.80 $46.51 $8,061.73 $96,740.80 $47.91 $8,304.40 $99,652.80 239 non-exempt Chf Inspec WGW 1 $38.18 $39.94 $40.56 $41.79 2 $40.19 $42.04 $42.69 $43.99 3 $42.31 $44.25 $44.94 $46.30 4 $44.54 $46.58 $47.31 $48.74 5 $46.88 $8,125.87 $97,510.40 $49.03 $8,498.53 $101,982.40 $49.80 $8,632.00 $103,584.00 $51.30 $8,892.00 $106,704.00 240 non-exempt Meter Reader-Lead 1 $26.01 $26.84 $26.89 $27.71 2 $27.38 $28.25 $28.31 $29.17 3 $28.82 $29.74 $29.80 $30.70 4 $30.34 $31.31 $31.37 $32.32 5 $31.94 $5,536.27 $66,435.20 $32.96 $5,713.07 $68,556.80 $33.02 $5,723.47 $68,681.60 $34.02 $5,896.80 $70,761.60 241 non-exempt Meter Reader 1 $24.31 $25.09 $25.14 $25.90 2 $25.59 $26.41 $26.46 $27.26 3 $26.94 $27.80 $27.85 $28.69 4 $28.36 $29.26 $29.32 $30.20 5 $29.85 $5,174.00 $62,088.00 $30.80 $5,338.67 $64,064.00 $30.86 $5,349.07 $64,188.80 $31.79 $5,510.27 $66,123.20 242 non-exempt Coord Zero Waste 1 $33.39 $34.70 $35.02 $36.07 2 $35.15 $36.53 $36.86 $37.97 3 $37.00 $38.45 $38.80 $39.97 4 $38.95 $40.47 $40.84 $42.07 5 $41.00 $7,106.67 $85,280.00 $42.60 $7,384.00 $88,608.00 $42.99 $7,451.60 $89,419.20 $44.28 $7,675.20 $92,102.40 244 non-exempt Assoc Buyer 1 $31.32 $32.28 $32.30 $33.27 2 $32.97 $33.98 $34.00 $35.02 3 $34.71 $35.77 $35.79 $36.86 4 $36.54 $37.65 $37.67 $38.80 5 $38.46 $6,666.40 $79,996.80 $39.63 $6,869.20 $82,430.40 $39.65 $6,872.67 $82,472.00 $40.84 $7,078.93 $84,947.20 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 4 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 246 non-exempt Power Engr 1 $46.60 $48.22 $48.45 $49.91 2 $49.05 $50.76 $51.00 $52.54 3 $51.63 $53.43 $53.68 $55.30 4 $54.35 $56.24 $56.51 $58.21 5 $57.21 $9,916.40 $118,996.80 $59.20 $10,261.33 $123,136.00 $59.48 $10,309.87 $123,718.40 $61.27 $10,620.13 $127,441.60 247 non-exempt Assoc Power Engr 1 $41.25 $42.69 $42.89 $44.18 2 $43.42 $44.94 $45.15 $46.50 3 $45.71 $47.30 $47.53 $48.95 4 $48.12 $49.79 $50.03 $51.53 5 $50.65 $8,779.33 $105,352.00 $52.41 $9,084.40 $109,012.80 $52.66 $9,127.73 $109,532.80 $54.24 $9,401.60 $112,819.20 248 non-exempt Storekeeper 1 $25.45 $26.21 $26.21 $27.00 2 $26.79 $27.59 $27.59 $28.42 3 $28.20 $29.04 $29.04 $29.92 4 $29.68 $30.57 $30.57 $31.49 5 $31.24 $5,414.93 $64,979.20 $32.18 $5,577.87 $66,934.40 $32.18 $5,577.87 $66,934.40 $33.15 $5,746.00 $68,952.00 250 non-exempt Equip Parts Tech 1 $24.31 $25.04 $25.04 $25.81 2 $25.59 $26.36 $26.36 $27.17 3 $26.94 $27.75 $27.75 $28.60 4 $28.36 $29.21 $29.21 $30.10 5 $29.85 $5,174.00 $62,088.00 $30.75 $5,330.00 $63,960.00 $30.75 $5,330.00 $63,960.00 $31.68 $5,491.20 $65,894.40 251 non-exempt Sr Librarian 1 $30.48 $31.57 $31.75 $32.70 2 $32.08 $33.23 $33.42 $34.42 3 $33.77 $34.98 $35.18 $36.23 4 $35.55 $36.82 $37.03 $38.14 5 $37.42 $6,486.13 $77,833.60 $38.76 $6,718.40 $80,620.80 $38.98 $6,756.53 $81,078.40 $40.15 $6,959.33 $83,512.00 252 non-exempt Library Associate 1 $24.52 $25.27 $25.27 $26.03 2 $25.81 $26.60 $26.60 $27.40 3 $27.17 $28.00 $28.00 $28.84 4 $28.60 $29.47 $29.47 $30.36 5 $30.11 $5,219.07 $62,628.80 $31.02 $5,376.80 $64,521.60 $31.02 $5,376.80 $64,521.60 $31.96 $5,539.73 $66,476.80 253 non-exempt Library Specialist 1 $23.20 $23.90 $23.90 $24.62 2 $24.42 $25.16 $25.16 $25.92 3 $25.71 $26.48 $26.48 $27.28 4 $27.06 $27.87 $27.87 $28.72 5 $28.48 $4,936.53 $59,238.40 $29.34 $5,085.60 $61,027.20 $29.34 $5,085.60 $61,027.20 $30.23 $5,239.87 $62,878.40 254 non-exempt Librarian 1 $26.84 $27.80 $27.96 $28.79 2 $28.25 $29.26 $29.43 $30.31 3 $29.74 $30.80 $30.98 $31.91 4 $31.30 $32.42 $32.61 $33.59 5 $32.95 $5,711.33 $68,536.00 $34.13 $5,915.87 $70,990.40 $34.33 $5,950.53 $71,406.40 $35.36 $6,129.07 $73,548.80 255 non-exempt Coord Library Prog 1 $33.24 $34.43 $34.62 $35.66 2 $34.99 $36.24 $36.44 $37.54 3 $36.83 $38.15 $38.36 $39.52 4 $38.77 $40.16 $40.38 $41.60 5 $40.81 $7,073.73 $84,884.80 $42.27 $7,326.80 $87,921.60 $42.51 $7,368.40 $88,420.80 $43.79 $7,590.27 $91,083.20 256 non-exempt Asst Power Engr 1 $37.25 $38.54 $38.72 $39.89 2 $39.21 $40.57 $40.76 $41.99 3 $41.27 $42.70 $42.91 $44.20 4 $43.44 $44.95 $45.17 $46.53 5 $45.73 $7,926.53 $95,118.40 $47.32 $8,202.13 $98,425.60 $47.55 $8,242.00 $98,904.00 $48.98 $8,489.87 $101,878.40 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 5 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 257 non-exempt Environmental Spec 1 $37.67 $39.35 $39.92 $41.13 2 $39.65 $41.42 $42.02 $43.29 3 $41.74 $43.60 $44.23 $45.57 4 $43.94 $45.89 $46.56 $47.97 5 $46.25 $8,016.67 $96,200.00 $48.31 $8,373.73 $100,484.80 $49.01 $8,495.07 $101,940.80 $50.49 $8,751.60 $105,019.20 258 non-exempt Ind Waste Invtgtr 1 $35.58 $37.15 $37.69 $38.83 2 $37.45 $39.10 $39.67 $40.87 3 $39.42 $41.16 $41.76 $43.02 4 $41.49 $43.33 $43.96 $45.28 5 $43.67 $7,569.47 $90,833.60 $45.61 $7,905.73 $94,868.80 $46.27 $8,020.13 $96,241.60 $47.66 $8,261.07 $99,132.80 260 non-exempt Desktop Technician 1 $31.13 $32.06 $32.06 $33.03 2 $32.77 $33.75 $33.75 $34.77 3 $34.49 $35.53 $35.53 $36.60 4 $36.31 $37.40 $37.40 $38.53 5 $38.22 $6,624.80 $79,497.60 $39.37 $6,824.13 $81,889.60 $39.37 $6,824.13 $81,889.60 $40.56 $7,030.40 $84,364.80 261 non-exempt Sr Util Field Svc Rep 1 $36.49 $38.58 $39.64 $40.84 2 $38.41 $40.61 $41.73 $42.99 3 $40.43 $42.75 $43.93 $45.25 4 $42.56 $45.00 $46.24 $47.63 5 $44.80 $7,765.33 $93,184.00 $47.37 $8,210.80 $98,529.60 $48.67 $8,436.13 $101,233.60 $50.14 $8,690.93 $104,291.20 262 non-exempt Resource Planner 1 $47.19 $48.61 $48.61 $50.07 2 $49.67 $51.17 $51.17 $52.71 3 $52.28 $53.86 $53.86 $55.48 4 $55.03 $56.69 $56.69 $58.40 5 $57.93 $10,041.20 $120,494.40 $59.67 $10,342.80 $124,113.60 $59.67 $10,342.80 $124,113.60 $61.47 $10,654.80 $127,857.60 263 non-exempt Animal Services Spec 1 $24.32 $25.13 $25.20 $25.97 2 $25.60 $26.45 $26.53 $27.34 3 $26.95 $27.84 $27.93 $28.78 4 $28.37 $29.31 $29.40 $30.29 5 $29.86 $5,175.73 $62,108.80 $30.85 $5,347.33 $64,168.00 $30.95 $5,364.67 $64,376.00 $31.88 $5,525.87 $66,310.40 265 non-exempt Program Assistant 1 $25.00 $25.79 $25.82 $26.62 2 $26.32 $27.15 $27.18 $28.02 3 $27.70 $28.58 $28.61 $29.49 4 $29.16 $30.08 $30.12 $31.04 5 $30.69 $5,319.60 $63,835.20 $31.66 $5,487.73 $65,852.80 $31.71 $5,496.40 $65,956.80 $32.67 $5,662.80 $67,953.60 267 non-exempt Elec Undgd Inspec 1 $33.84 $35.39 $35.94 $37.03 2 $35.62 $37.25 $37.83 $38.98 3 $37.49 $39.21 $39.82 $41.03 4 $39.46 $41.27 $41.92 $43.19 5 $41.54 $7,200.27 $86,403.20 $43.44 $7,529.60 $90,355.20 $44.13 $7,649.20 $91,790.40 $45.46 $7,879.73 $94,556.80 268 non-exempt Asst Res Planner 1 $35.91 $36.98 $36.98 $38.10 2 $37.80 $38.93 $38.93 $40.11 3 $39.79 $40.98 $40.98 $42.22 4 $41.88 $43.14 $43.14 $44.44 5 $44.08 $7,640.53 $91,686.40 $45.41 $7,871.07 $94,452.80 $45.41 $7,871.07 $94,452.80 $46.78 $8,108.53 $97,302.40 269 non-exempt Assoc Res Planner 1 $39.78 $40.97 $40.97 $42.20 2 $41.87 $43.13 $43.13 $44.42 3 $44.07 $45.40 $45.40 $46.76 4 $46.39 $47.79 $47.79 $49.22 5 $48.83 $8,463.87 $101,566.40 $50.30 $8,718.67 $104,624.00 $50.30 $8,718.67 $104,624.00 $51.81 $8,980.40 $107,764.80 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 6 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 270 non-exempt Prod Arts/Sci Prog 1 $32.39 $33.66 $33.97 $34.99 2 $34.09 $35.43 $35.76 $36.83 3 $35.88 $37.29 $37.64 $38.77 4 $37.77 $39.25 $39.62 $40.81 5 $39.76 $6,891.73 $82,700.80 $41.32 $7,162.13 $85,945.60 $41.70 $7,228.00 $86,736.00 $42.96 $7,446.40 $89,356.80 271 non-exempt Util Locator 1 $31.32 $33.13 $34.03 $35.06 2 $32.97 $34.87 $35.82 $36.91 3 $34.70 $36.70 $37.71 $38.85 4 $36.53 $38.63 $39.69 $40.89 5 $38.45 $6,664.67 $79,976.00 $40.66 $7,047.73 $84,572.80 $41.78 $7,241.87 $86,902.40 $43.04 $7,460.27 $89,523.20 272 non-exempt Util Comp Tech 1 $41.31 $43.19 $43.85 $45.18 2 $43.48 $45.46 $46.16 $47.56 3 $45.77 $47.85 $48.59 $50.06 4 $48.18 $50.37 $51.15 $52.69 5 $50.72 $8,791.47 $105,497.60 $53.02 $9,190.13 $110,281.60 $53.84 $9,332.27 $111,987.20 $55.46 $9,613.07 $115,356.80 273 non-exempt Util Comp Tech-L 1 $44.19 $46.20 $46.90 $48.31 2 $46.52 $48.63 $49.37 $50.85 3 $48.97 $51.19 $51.97 $53.53 4 $51.55 $53.88 $54.71 $56.35 5 $54.26 $9,405.07 $112,860.80 $56.72 $9,831.47 $117,977.60 $57.59 $9,982.27 $119,787.20 $59.32 $10,282.13 $123,385.60 274 non-exempt Volunteer Coord 1 $29.41 $30.55 $30.83 $31.76 2 $30.96 $32.16 $32.45 $33.43 3 $32.59 $33.85 $34.16 $35.19 4 $34.30 $35.63 $35.96 $37.04 5 $36.10 $6,257.33 $75,088.00 $37.51 $6,501.73 $78,020.80 $37.85 $6,560.67 $78,728.00 $38.99 $6,758.27 $81,099.20 275 non-exempt Animal Services Spec II 1 $26.82 $27.71 $27.80 $28.63 2 $28.23 $29.17 $29.26 $30.14 3 $29.72 $30.70 $30.80 $31.73 4 $31.28 $32.32 $32.42 $33.40 5 $32.93 $5,707.87 $68,494.40 $34.02 $5,896.80 $70,761.60 $34.13 $5,915.87 $70,990.40 $35.16 $6,094.40 $73,132.80 276 non-exempt Animal Control Off 1 $24.66 $25.48 $25.56 $26.32 2 $25.96 $26.82 $26.90 $27.71 3 $27.33 $28.23 $28.32 $29.17 4 $28.77 $29.72 $29.81 $30.71 5 $30.28 $5,248.53 $62,982.40 $31.28 $5,421.87 $65,062.40 $31.38 $5,439.20 $65,270.40 $32.33 $5,603.87 $67,246.40 277 non-exempt Animal Attendant 1 $23.02 $23.78 $23.86 $24.58 2 $24.23 $25.03 $25.12 $25.87 3 $25.51 $26.35 $26.44 $27.23 4 $26.85 $27.74 $27.83 $28.66 5 $28.26 $4,898.40 $58,780.80 $29.20 $5,061.33 $60,736.00 $29.29 $5,076.93 $60,923.20 $30.17 $5,229.47 $62,753.60 278 non-exempt Veterinarian Tech 1 $25.18 $26.03 $26.12 $26.90 2 $26.51 $27.40 $27.49 $28.32 3 $27.91 $28.84 $28.94 $29.81 4 $29.38 $30.36 $30.46 $31.38 5 $30.93 $5,361.20 $64,334.40 $31.96 $5,539.73 $66,476.80 $32.06 $5,557.07 $66,684.80 $33.03 $5,725.20 $68,702.40 280 non-exempt Sr Ranger 1 $31.85 $32.81 $32.81 $33.80 2 $33.53 $34.54 $34.54 $35.58 3 $35.29 $36.36 $36.36 $37.45 4 $37.15 $38.27 $38.27 $39.42 5 $39.10 $6,777.33 $81,328.00 $40.28 $6,981.87 $83,782.40 $40.28 $6,981.87 $83,782.40 $41.49 $7,191.60 $86,299.20 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 7 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 281 non-exempt Park Ranger 1 $28.79 $29.66 $29.66 $30.55 2 $30.30 $31.22 $31.22 $32.16 3 $31.89 $32.86 $32.86 $33.85 4 $33.57 $34.59 $34.59 $35.63 5 $35.34 $6,125.60 $73,507.20 $36.41 $6,311.07 $75,732.80 $36.41 $6,311.07 $75,732.80 $37.51 $6,501.73 $78,020.80 284 non-exempt Utilities Engineer Estimator Lead 1 $43.90 $45.41 $45.64 $47.02 2 $46.21 $47.80 $48.04 $49.49 3 $48.64 $50.32 $50.57 $52.09 4 $51.20 $52.97 $53.23 $54.83 5 $53.89 $9,340.93 $112,091.20 $55.76 $9,665.07 $115,980.80 $56.03 $9,711.87 $116,542.40 $57.72 $10,004.80 $120,057.60 286 non-exempt Motor Equipment Mechanic I 1 $30.36 $31.27 $31.27 $32.21 2 $31.96 $32.92 $32.92 $33.91 3 $33.64 $34.65 $34.65 $35.69 4 $35.41 $36.47 $36.47 $37.57 5 $37.27 $6,460.13 $77,521.60 $38.39 $6,654.27 $79,851.20 $38.39 $6,654.27 $79,851.20 $39.55 $6,855.33 $82,264.00 287 non-exempt Motor Equipment Mechanic II 1 $32.78 $33.76 $33.76 $34.78 2 $34.50 $35.54 $35.54 $36.61 3 $36.32 $37.41 $37.41 $38.54 4 $38.23 $39.38 $39.38 $40.57 5 $40.24 $6,974.93 $83,699.20 $41.45 $7,184.67 $86,216.00 $41.45 $7,184.67 $86,216.00 $42.70 $7,401.33 $88,816.00 288 non-exempt Storekeeper-L 1 $27.23 $28.05 $28.05 $28.90 2 $28.66 $29.53 $29.53 $30.42 3 $30.17 $31.08 $31.08 $32.02 4 $31.76 $32.72 $32.72 $33.71 5 $33.43 $5,794.53 $69,534.40 $34.44 $5,969.60 $71,635.20 $34.44 $5,969.60 $71,635.20 $35.48 $6,149.87 $73,798.40 289 non-exempt Utl Install Repair-Welding Cert 1 $34.58 $36.58 $37.57 $38.70 2 $36.40 $38.50 $39.55 $40.74 3 $38.32 $40.53 $41.63 $42.88 4 $40.34 $42.66 $43.82 $45.14 5 $42.46 $7,359.73 $88,316.80 $44.90 $7,782.67 $93,392.00 $46.13 $7,995.87 $95,950.40 $47.52 $8,236.80 $98,841.60 290 non-exempt Utl Install Repair Lead-Welding Cert 1 $37.15 $39.29 $40.37 $41.59 2 $39.11 $41.36 $42.49 $43.78 3 $41.17 $43.54 $44.73 $46.08 4 $43.34 $45.83 $47.08 $48.50 5 $45.62 $7,907.47 $94,889.60 $48.24 $8,361.60 $100,339.20 $49.56 $8,590.40 $103,084.80 $51.05 $8,848.67 $106,184.00 291 non-exempt Maintenance Mechanic-Welding 1 $33.53 $35.46 $36.44 $37.54 2 $35.29 $37.33 $38.36 $39.52 3 $37.15 $39.29 $40.38 $41.60 4 $39.11 $41.36 $42.50 $43.79 5 $41.17 $7,136.13 $85,633.60 $43.54 $7,546.93 $90,563.20 $44.74 $7,754.93 $93,059.20 $46.09 $7,988.93 $95,867.20 292 non-exempt Electric Underground Inspector - Lead 1 $36.20 $37.84 $38.44 $39.60 2 $38.10 $39.83 $40.46 $41.68 3 $40.10 $41.93 $42.59 $43.87 4 $42.21 $44.14 $44.83 $46.18 5 $44.43 $7,701.20 $92,414.40 $46.46 $8,053.07 $96,636.80 $47.19 $8,179.60 $98,155.20 $48.61 $8,425.73 $101,108.80 293 non-exempt Junior Museum & Zoo Educator 1 $26.71 $27.76 $28.02 $28.86 2 $28.12 $29.22 $29.49 $30.38 3 $29.60 $30.76 $31.04 $31.98 4 $31.16 $32.38 $32.67 $33.66 5 $32.80 $5,685.33 $68,224.00 $34.08 $5,907.20 $70,886.40 $34.39 $5,960.93 $71,531.20 $35.43 $6,141.20 $73,694.40 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 8 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 294 non-exempt Administrative Associate I 1 $24.05 $24.81 $24.84 $25.60 2 $25.32 $26.12 $26.15 $26.95 3 $26.65 $27.49 $27.53 $28.37 4 $28.05 $28.94 $28.98 $29.86 5 $29.53 $5,118.53 $61,422.40 $30.46 $5,279.73 $63,356.80 $30.51 $5,288.40 $63,460.80 $31.43 $5,447.87 $65,374.40 295 non-exempt Administrative Associate II 1 $26.14 $26.97 $27.00 $27.82 2 $27.52 $28.39 $28.42 $29.28 3 $28.97 $29.88 $29.92 $30.82 4 $30.49 $31.45 $31.49 $32.44 5 $32.09 $5,562.27 $66,747.20 $33.10 $5,737.33 $68,848.00 $33.15 $5,746.00 $68,952.00 $34.15 $5,919.33 $71,032.00 296 non-exempt Administrative Associate III 1 $28.03 $28.90 $28.94 $29.81 2 $29.50 $30.42 $30.46 $31.38 3 $31.05 $32.02 $32.06 $33.03 4 $32.68 $33.71 $33.75 $34.77 5 $34.40 $5,962.67 $71,552.00 $35.48 $6,149.87 $73,798.40 $35.53 $6,158.53 $73,902.40 $36.60 $6,344.00 $76,128.00 298 non-exempt Public Safety Dispatcher I 1 $34.30 $35.33 $35.33 $36.40 2 $36.10 $37.19 $37.19 $38.32 3 $38.00 $39.15 $39.15 $40.34 4 $40.00 $41.21 $41.21 $42.46 5 $42.11 $7,299.07 $87,588.80 $43.38 $7,519.20 $90,230.40 $43.38 $7,519.20 $90,230.40 $44.69 $7,746.27 $92,955.20 6 $43.17 $44.47 $44.47 $45.81 7 $44.25 $45.58 $45.58 $46.95 299 non-exempt Bldg Inspector 1 $35.69 $37.33 $37.91 $39.05 2 $37.57 $39.29 $39.91 $41.11 3 $39.55 $41.36 $42.01 $43.27 4 $41.63 $43.54 $44.22 $45.55 5 $43.82 $7,595.47 $91,145.60 $45.83 $7,943.87 $95,326.40 $46.55 $8,068.67 $96,824.00 $47.95 $8,311.33 $99,736.00 300 non-exempt Bldg Inspector Spec 1 $38.10 $39.84 $40.48 $41.70 2 $40.11 $41.94 $42.61 $43.89 3 $42.22 $44.15 $44.85 $46.20 4 $44.44 $46.47 $47.21 $48.63 5 $46.78 $8,108.53 $97,302.40 $48.92 $8,479.47 $101,753.60 $49.69 $8,612.93 $103,355.20 $51.19 $8,872.93 $106,475.20 301 non-exempt Code Enforcement Off 1 $34.29 $35.85 $36.41 $37.52 2 $36.09 $37.74 $38.33 $39.49 3 $37.99 $39.73 $40.35 $41.57 4 $39.99 $41.82 $42.47 $43.76 5 $42.09 $7,295.60 $87,547.20 $44.02 $7,630.13 $91,561.60 $44.71 $7,749.73 $92,996.80 $46.06 $7,983.73 $95,804.80 302 non-exempt Program Assistant I 1 $26.51 $27.35 $27.40 $28.22 2 $27.91 $28.79 $28.84 $29.71 3 $29.38 $30.31 $30.36 $31.27 4 $30.93 $31.91 $31.96 $32.92 5 $32.56 $5,643.73 $67,724.80 $33.59 $5,822.27 $69,867.20 $33.64 $5,830.93 $69,971.20 $34.65 $6,006.00 $72,072.00 303 non-exempt Program Assistant II 1 $28.51 $29.41 $29.44 $30.33 2 $30.01 $30.96 $30.99 $31.93 3 $31.59 $32.59 $32.62 $33.61 4 $33.25 $34.30 $34.34 $35.38 5 $35.00 $6,066.67 $72,800.00 $36.10 $6,257.33 $75,088.00 $36.15 $6,266.00 $75,192.00 $37.24 $6,454.93 $77,459.20 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 9 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 304 non-exempt Plans Check Engr 1 $42.38 $43.85 $44.07 $45.39 2 $44.61 $46.16 $46.39 $47.78 3 $46.96 $48.59 $48.83 $50.29 4 $49.43 $51.15 $51.40 $52.94 5 $52.03 $9,018.53 $108,222.40 $53.84 $9,332.27 $111,987.20 $54.10 $9,377.33 $112,528.00 $55.73 $9,659.87 $115,918.40 306 non-exempt Comm Tech 1 $35.92 $36.99 $36.99 $38.11 2 $37.81 $38.94 $38.94 $40.12 3 $39.80 $40.99 $40.99 $42.23 4 $41.89 $43.15 $43.15 $44.45 5 $44.09 $7,642.27 $91,707.20 $45.42 $7,872.80 $94,473.60 $45.42 $7,872.80 $94,473.60 $46.79 $8,110.27 $97,323.20 307 non-exempt Util Syst Oper 1 $47.94 $50.11 $50.89 $52.42 2 $50.46 $52.75 $53.57 $55.18 3 $53.12 $55.53 $56.39 $58.08 4 $55.92 $58.45 $59.36 $61.14 5 $58.86 $10,202.40 $122,428.80 $61.53 $10,665.20 $127,982.40 $62.48 $10,829.87 $129,958.40 $64.36 $11,155.73 $133,868.80 308 non-exempt Instrum Elec 1 $34.16 $35.57 $35.96 $37.05 2 $35.96 $37.44 $37.85 $39.00 3 $37.85 $39.41 $39.84 $41.05 4 $39.84 $41.48 $41.94 $43.21 5 $41.94 $7,269.60 $87,235.20 $43.66 $7,567.73 $90,812.80 $44.15 $7,652.67 $91,832.00 $45.48 $7,883.20 $94,598.40 310 non-exempt Util Engr Estimator 1 $41.03 $42.45 $42.66 $43.95 2 $43.19 $44.68 $44.90 $46.26 3 $45.46 $47.03 $47.26 $48.69 4 $47.85 $49.51 $49.75 $51.25 5 $50.37 $8,730.80 $104,769.60 $52.12 $9,034.13 $108,409.60 $52.37 $9,077.47 $108,929.60 $53.95 $9,351.33 $112,216.00 311 non-exempt Eng Tech I 1 $26.50 $27.69 $28.09 $28.94 2 $27.89 $29.15 $29.57 $30.46 3 $29.36 $30.68 $31.13 $32.06 4 $30.90 $32.29 $32.77 $33.75 5 $32.53 $5,638.53 $67,662.40 $33.99 $5,891.60 $70,699.20 $34.49 $5,978.27 $71,739.20 $35.53 $6,158.53 $73,902.40 312 non-exempt Animal Control Off - L 1 $26.39 $27.27 $27.35 $28.18 2 $27.78 $28.70 $28.79 $29.66 3 $29.24 $30.21 $30.31 $31.22 4 $30.78 $31.80 $31.90 $32.86 5 $32.40 $5,616.00 $67,392.00 $33.47 $5,801.47 $69,617.60 $33.58 $5,820.53 $69,846.40 $34.59 $5,995.60 $71,947.20 313 non-exempt Police Records Specialist I 1 $23.98 $25.13 $25.57 $26.34 2 $25.24 $26.45 $26.92 $27.73 3 $26.57 $27.84 $28.34 $29.19 4 $27.97 $29.31 $29.83 $30.73 5 $29.44 $5,102.93 $61,235.20 $30.85 $5,347.33 $64,168.00 $31.40 $5,442.67 $65,312.00 $32.35 $5,607.33 $67,288.00 314 non-exempt Police Records Specialist II 1 $25.23 $26.45 $26.91 $27.72 2 $26.56 $27.84 $28.33 $29.18 3 $27.96 $29.30 $29.82 $30.72 4 $29.43 $30.84 $31.39 $32.34 5 $30.98 $5,369.87 $64,438.40 $32.46 $5,626.40 $67,516.80 $33.04 $5,726.93 $68,723.20 $34.04 $5,900.27 $70,803.20 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 10 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 315 non-exempt Public Safety Dispatcher - Lead 1 $40.54 $41.76 $41.76 $43.02 2 $42.67 $43.96 $43.96 $45.28 3 $44.92 $46.27 $46.27 $47.66 4 $47.28 $48.71 $48.71 $50.17 5 $49.77 $8,626.80 $103,521.60 $51.27 $8,886.80 $106,641.60 $51.27 $8,886.80 $106,641.60 $52.81 $9,153.73 $109,844.80 6 $51.02 $52.56 $52.56 $54.14 7 $52.29 $53.86 $53.86 $55.48 316 non-exempt Public Safety Dispatcher II 1 $36.11 $37.21 $37.21 $38.33 2 $38.01 $39.17 $39.17 $40.35 3 $40.01 $41.23 $41.23 $42.47 4 $42.12 $43.40 $43.40 $44.71 5 $44.34 $7,685.60 $92,227.20 $45.68 $7,917.87 $95,014.40 $45.68 $7,917.87 $95,014.40 $47.06 $8,157.07 $97,884.80 6 $45.44 $46.81 $46.81 $48.22 7 $46.58 $47.98 $47.98 $49.42 317 non-exempt Coord Rec Prog 1 $29.88 $31.04 $31.32 $32.27 2 $31.45 $32.67 $32.97 $33.97 3 $33.10 $34.39 $34.71 $35.76 4 $34.84 $36.20 $36.54 $37.64 5 $36.67 $6,356.13 $76,273.60 $38.11 $6,605.73 $79,268.80 $38.46 $6,666.40 $79,996.80 $39.62 $6,867.47 $82,409.60 318 non-exempt Sr Planner 1 $44.39 $46.05 $46.37 $47.76 2 $46.73 $48.47 $48.81 $50.27 3 $49.19 $51.02 $51.38 $52.92 4 $51.78 $53.70 $54.08 $55.71 5 $54.51 $9,448.40 $113,380.80 $56.53 $9,798.53 $117,582.40 $56.93 $9,867.87 $118,414.40 $58.64 $10,164.27 $121,971.20 319 non-exempt Engr Tech III 1 $32.02 $33.45 $33.94 $34.96 2 $33.70 $35.21 $35.73 $36.80 3 $35.47 $37.06 $37.61 $38.74 4 $37.34 $39.01 $39.59 $40.78 5 $39.30 $6,812.00 $81,744.00 $41.06 $7,117.07 $85,404.80 $41.67 $7,222.80 $86,673.60 $42.93 $7,441.20 $89,294.40 320 non-exempt Community Service Officer - Lead 1 $27.89 $29.24 $29.75 $30.65 2 $29.36 $30.78 $31.32 $32.26 3 $30.91 $32.40 $32.97 $33.96 4 $32.54 $34.10 $34.70 $35.75 5 $34.25 $5,936.67 $71,240.00 $35.89 $6,220.93 $74,651.20 $36.53 $6,331.87 $75,982.40 $37.63 $6,522.53 $78,270.40 321 non-exempt Police Records Specialist - Lead 1 $27.00 $28.29 $28.79 $29.68 2 $28.42 $29.78 $30.31 $31.24 3 $29.92 $31.35 $31.91 $32.88 4 $31.49 $33.00 $33.59 $34.61 5 $33.15 $5,746.00 $68,952.00 $34.74 $6,021.60 $72,259.20 $35.36 $6,129.07 $73,548.80 $36.43 $6,314.53 $75,774.40 323 non-exempt Engr Tech II 1 $28.67 $29.95 $30.40 $31.31 2 $30.18 $31.53 $32.00 $32.96 3 $31.77 $33.19 $33.68 $34.69 4 $33.44 $34.94 $35.45 $36.52 5 $35.20 $6,101.33 $73,216.00 $36.78 $6,375.20 $76,502.40 $37.32 $6,468.80 $77,625.60 $38.44 $6,662.93 $79,955.20 325 non-exempt Surveyor, Public Wks 1 $34.89 $36.48 $37.07 $38.18 2 $36.73 $38.40 $39.02 $40.19 3 $38.66 $40.42 $41.07 $42.30 4 $40.69 $42.55 $43.23 $44.53 5 $42.83 $7,423.87 $89,086.40 $44.79 $7,763.60 $93,163.20 $45.50 $7,886.67 $94,640.00 $46.87 $8,124.13 $97,489.60 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 11 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 326 non-exempt Surveying Asst 1 $32.06 $33.53 $34.06 $35.09 2 $33.75 $35.29 $35.85 $36.94 3 $35.53 $37.15 $37.74 $38.88 4 $37.40 $39.11 $39.73 $40.93 5 $39.37 $6,824.13 $81,889.60 $41.17 $7,136.13 $85,633.60 $41.82 $7,248.80 $86,985.60 $43.08 $7,467.20 $89,606.40 330 non-exempt Asst Engineer 1 $35.10 $36.32 $36.49 $37.59 2 $36.95 $38.23 $38.41 $39.57 3 $38.89 $40.24 $40.43 $41.65 4 $40.94 $42.36 $42.56 $43.84 5 $43.09 $7,468.93 $89,627.20 $44.59 $7,728.93 $92,747.20 $44.80 $7,765.33 $93,184.00 $46.15 $7,999.33 $95,992.00 332 non-exempt Engineer 1 $43.64 $45.17 $45.37 $46.74 2 $45.94 $47.55 $47.76 $49.20 3 $48.36 $50.05 $50.27 $51.79 4 $50.91 $52.68 $52.92 $54.52 5 $53.59 $9,288.93 $111,467.20 $55.45 $9,611.33 $115,336.00 $55.71 $9,656.40 $115,876.80 $57.39 $9,947.60 $119,371.20 333 non-exempt Assoc Engineer 1 $38.75 $40.10 $40.29 $41.50 2 $40.79 $42.21 $42.41 $43.68 3 $42.94 $44.43 $44.64 $45.98 4 $45.20 $46.77 $46.99 $48.40 5 $47.58 $8,247.20 $98,966.40 $49.23 $8,533.20 $102,398.40 $49.46 $8,573.07 $102,876.80 $50.95 $8,831.33 $105,976.00 340 non-exempt Business Analyst 1 $48.82 $51.62 $53.04 $54.63 2 $51.39 $54.34 $55.83 $57.51 3 $54.09 $57.20 $58.77 $60.54 4 $56.94 $60.21 $61.86 $63.73 5 $59.94 $10,389.60 $124,675.20 $63.38 $10,985.87 $131,830.40 $65.12 $11,287.47 $135,449.60 $67.08 $11,627.20 $139,526.40 341 non-exempt Coor Trans Sys Mgmt 1 $36.60 $38.04 $38.38 $39.54 2 $38.53 $40.04 $40.40 $41.62 3 $40.56 $42.15 $42.53 $43.81 4 $42.69 $44.37 $44.77 $46.12 5 $44.94 $7,789.60 $93,475.20 $46.70 $8,094.67 $97,136.00 $47.13 $8,169.20 $98,030.40 $48.55 $8,415.33 $100,984.00 342 non-exempt Coord Pub Wks Proj 1 $34.78 $36.14 $36.46 $37.56 2 $36.61 $38.04 $38.38 $39.54 3 $38.54 $40.04 $40.40 $41.62 4 $40.57 $42.15 $42.53 $43.81 5 $42.70 $7,401.33 $88,816.00 $44.37 $7,690.80 $92,289.60 $44.77 $7,760.13 $93,121.60 $46.12 $7,994.13 $95,929.60 344 non-exempt Coord Utility Proj 1 $37.55 $39.02 $39.38 $40.57 2 $39.53 $41.07 $41.45 $42.70 3 $41.61 $43.23 $43.63 $44.95 4 $43.80 $45.51 $45.93 $47.32 5 $46.11 $7,992.40 $95,908.80 $47.91 $8,304.40 $99,652.80 $48.35 $8,380.67 $100,568.00 $49.81 $8,633.73 $103,604.80 345 non-exempt Electric Project Engineer 1 $49.43 $51.15 $51.39 $52.93 2 $52.03 $53.84 $54.09 $55.72 3 $54.77 $56.67 $56.94 $58.65 4 $57.65 $59.65 $59.94 $61.74 5 $60.68 $10,517.87 $126,214.40 $62.79 $10,883.60 $130,603.20 $63.09 $10,935.60 $131,227.20 $64.99 $11,264.93 $135,179.20 346 non-exempt Management Assistant 1 $30.44 $31.40 $31.45 $32.40 2 $32.04 $33.05 $33.11 $34.10 3 $33.73 $34.79 $34.85 $35.89 4 $35.50 $36.62 $36.68 $37.78 5 $37.37 $6,477.47 $77,729.60 $38.55 $6,682.00 $80,184.00 $38.61 $6,692.40 $80,308.80 $39.77 $6,893.47 $82,721.60 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 12 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 347 non-exempt Planning Arborist 1 $41.76 $43.66 $44.35 $45.70 2 $43.96 $45.96 $46.68 $48.10 3 $46.27 $48.38 $49.14 $50.63 4 $48.70 $50.93 $51.73 $53.29 5 $51.26 $8,885.07 $106,620.80 $53.61 $9,292.40 $111,508.80 $54.45 $9,438.00 $113,256.00 $56.09 $9,722.27 $116,667.20 348 non-exempt Payroll Analyst 1 $29.15 $30.03 $30.03 $30.93 2 $30.68 $31.61 $31.61 $32.56 3 $32.29 $33.27 $33.27 $34.27 4 $33.99 $35.02 $35.02 $36.07 5 $35.78 $6,201.87 $74,422.40 $36.86 $6,389.07 $76,668.80 $36.86 $6,389.07 $76,668.80 $37.97 $6,581.47 $78,977.60 349 non-exempt Project Engineer 1 $46.99 $48.62 $48.83 $50.30 2 $49.46 $51.18 $51.40 $52.95 3 $52.06 $53.87 $54.11 $55.74 4 $54.80 $56.70 $56.96 $58.67 5 $57.68 $9,997.87 $119,974.40 $59.68 $10,344.53 $124,134.40 $59.96 $10,393.07 $124,716.80 $61.76 $10,705.07 $128,460.80 352 non-exempt Planner 1 $38.43 $39.85 $40.15 $41.34 2 $40.45 $41.95 $42.26 $43.52 3 $42.58 $44.16 $44.48 $45.81 4 $44.82 $46.48 $46.82 $48.22 5 $47.18 $8,177.87 $98,134.40 $48.93 $8,481.20 $101,774.40 $49.28 $8,541.87 $102,502.40 $50.76 $8,798.40 $105,580.80 353 non-exempt Assoc Planner 1 $35.94 $37.28 $37.55 $38.68 2 $37.83 $39.24 $39.53 $40.72 3 $39.82 $41.31 $41.61 $42.86 4 $41.92 $43.48 $43.80 $45.12 5 $44.13 $7,649.20 $91,790.40 $45.77 $7,933.47 $95,201.60 $46.10 $7,990.67 $95,888.00 $47.49 $8,231.60 $98,779.20 355 non-exempt Bldg/Plg Technician 1 $29.16 $30.24 $30.45 $31.37 2 $30.69 $31.83 $32.05 $33.02 3 $32.31 $33.51 $33.74 $34.76 4 $34.01 $35.27 $35.52 $36.59 5 $35.80 $6,205.33 $74,464.00 $37.13 $6,435.87 $77,230.40 $37.39 $6,480.93 $77,771.20 $38.52 $6,676.80 $80,121.60 360 non-exempt Sr Buyer 1 $34.87 $35.93 $35.93 $37.02 2 $36.70 $37.82 $37.82 $38.97 3 $38.63 $39.81 $39.81 $41.02 4 $40.66 $41.90 $41.91 $43.18 5 $42.80 $7,418.67 $89,024.00 $44.10 $7,644.00 $91,728.00 $44.12 $7,647.47 $91,769.60 $45.45 $7,878.00 $94,536.00 361 non-exempt Sr Mkt Analyst 1 $43.30 $44.60 $44.60 $45.94 2 $45.58 $46.95 $46.95 $48.36 3 $47.98 $49.42 $49.42 $50.91 4 $50.50 $52.02 $52.02 $53.59 5 $53.16 $9,214.40 $110,572.80 $54.76 $9,491.73 $113,900.80 $54.76 $9,491.73 $113,900.80 $56.41 $9,777.73 $117,332.80 362 non-exempt Technologist 1 $48.82 $51.62 $53.04 $54.63 2 $51.39 $54.34 $55.83 $57.51 3 $54.09 $57.20 $58.77 $60.54 4 $56.94 $60.21 $61.86 $63.73 5 $59.94 $10,389.60 $124,675.20 $63.38 $10,985.87 $131,830.40 $65.12 $11,287.47 $135,449.60 $67.08 $11,627.20 $139,526.40 363 non-exempt Util Key Acct Rep 1 $40.16 $41.35 $41.35 $42.61 2 $42.27 $43.53 $43.53 $44.85 3 $44.49 $45.82 $45.82 $47.21 4 $46.83 $48.23 $48.23 $49.69 5 $49.29 $8,543.60 $102,523.20 $50.77 $8,800.13 $105,601.60 $50.77 $8,800.13 $105,601.60 $52.30 $9,065.33 $108,784.00 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 13 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 365 non-exempt Industrial Waste Technician 1 $28.58 $29.85 $30.27 $31.19 2 $30.08 $31.42 $31.86 $32.83 3 $31.66 $33.07 $33.54 $34.56 4 $33.33 $34.81 $35.31 $36.38 5 $35.08 $6,080.53 $72,966.40 $36.64 $6,350.93 $76,211.20 $37.17 $6,442.80 $77,313.60 $38.29 $6,636.93 $79,643.20 366 non-exempt Restoration Lead 1 $33.39 $34.98 $35.60 $36.67 2 $35.15 $36.82 $37.47 $38.60 3 $37.00 $38.76 $39.44 $40.63 4 $38.95 $40.80 $41.52 $42.77 5 $41.00 $7,106.67 $85,280.00 $42.95 $7,444.67 $89,336.00 $43.70 $7,574.67 $90,896.00 $45.02 $7,803.47 $93,641.60 368 non-exempt Program Coordinator 1 $27.96 $29.06 $29.33 $30.21 2 $29.43 $30.59 $30.87 $31.80 3 $30.98 $32.20 $32.49 $33.47 4 $32.61 $33.89 $34.20 $35.23 5 $34.33 $5,950.53 $71,406.40 $35.67 $6,182.80 $74,193.60 $36.00 $6,240.00 $74,880.00 $37.08 $6,427.20 $77,126.40 369 non-exempt Meter Shop Lead 1 $29.29 $30.64 $31.14 $32.07 2 $30.83 $32.25 $32.78 $33.76 3 $32.45 $33.95 $34.50 $35.54 4 $34.16 $35.74 $36.32 $37.41 5 $35.96 $6,233.07 $74,796.80 $37.62 $6,520.80 $78,249.60 $38.23 $6,626.53 $79,518.40 $39.38 $6,825.87 $81,910.40 370 non-exempt Bldg Serviceperson 1 $21.10 $21.98 $22.24 $22.90 2 $22.21 $23.14 $23.41 $24.10 3 $23.38 $24.36 $24.64 $25.37 4 $24.61 $25.64 $25.94 $26.71 5 $25.91 $4,491.07 $53,892.80 $26.99 $4,678.27 $56,139.20 $27.30 $4,732.00 $56,784.00 $28.12 $4,874.13 $58,489.60 371 non-exempt Bldg Serviceperson-L 1 $22.59 $23.54 $23.80 $24.52 2 $23.78 $24.78 $25.05 $25.81 3 $25.03 $26.08 $26.37 $27.17 4 $26.35 $27.45 $27.76 $28.60 5 $27.74 $4,808.27 $57,699.20 $28.89 $5,007.60 $60,091.20 $29.22 $5,064.80 $60,777.60 $30.10 $5,217.33 $62,608.00 373 non-exempt Facilities Maint-L 1 $39.41 $41.68 $42.84 $44.13 2 $41.48 $43.87 $45.09 $46.45 3 $43.66 $46.18 $47.46 $48.89 4 $45.96 $48.61 $49.96 $51.46 5 $48.38 $8,385.87 $100,630.40 $51.17 $8,869.47 $106,433.60 $52.59 $9,115.60 $109,387.20 $54.17 $9,389.47 $112,673.60 374 non-exempt Facilities Carpenter 1 $30.11 $31.85 $32.75 $33.73 2 $31.69 $33.53 $34.47 $35.50 3 $33.36 $35.29 $36.28 $37.37 4 $35.12 $37.15 $38.19 $39.34 5 $36.97 $6,408.13 $76,897.60 $39.11 $6,779.07 $81,348.80 $40.20 $6,968.00 $83,616.00 $41.41 $7,177.73 $86,132.80 375 non-exempt Facilities Elect 1 $30.02 $31.26 $31.61 $32.56 2 $31.60 $32.90 $33.27 $34.27 3 $33.26 $34.63 $35.02 $36.07 4 $35.01 $36.45 $36.86 $37.97 5 $36.85 $6,387.33 $76,648.00 $38.37 $6,650.80 $79,809.60 $38.80 $6,725.33 $80,704.00 $39.97 $6,928.13 $83,137.60 376 non-exempt Facilities Tech 1 $30.11 $31.85 $32.75 $33.73 2 $31.69 $33.53 $34.47 $35.50 3 $33.36 $35.29 $36.28 $37.37 4 $35.12 $37.15 $38.19 $39.34 5 $36.97 $6,408.13 $76,897.60 $39.11 $6,779.07 $81,348.80 $40.20 $6,968.00 $83,616.00 $41.41 $7,177.73 $86,132.80 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 14 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 376 non-exempt Facilities Tech 1 32.57$ 33.79$ 34.04$ 35.07$ 2 34.28$ 35.57$ 35.83$ 36.92$ 3 36.08$ 37.44$ 37.72$ 38.86$ 4 37.98$ 39.41$ 39.70$ 40.90$ 5 39.98$ 6,929.87$ 83,158.40$ 41.48$ 7,189.87$ 86,278.40$ 41.79$ 7,243.60$ 86,923.20$ 43.05$ 7,462.00$ 89,544.00$ 377 non-exempt Facilities Painter 1 $30.11 $31.85 $32.75 $33.73 2 $31.69 $33.53 $34.47 $35.50 3 $33.36 $35.29 $36.28 $37.37 4 $35.12 $37.15 $38.19 $39.34 5 $36.97 $6,408.13 $76,897.60 $39.11 $6,779.07 $81,348.80 $40.20 $6,968.00 $83,616.00 $41.41 $7,177.73 $86,132.80 381 non-exempt Motor Equip Mech-L 1 $35.06 $36.11 $36.11 $37.21 2 $36.91 $38.01 $38.01 $39.17 3 $38.85 $40.01 $40.01 $41.23 4 $40.89 $42.12 $42.12 $43.40 5 $43.04 $7,460.27 $89,523.20 $44.34 $7,685.60 $92,227.20 $44.34 $7,685.60 $92,227.20 $45.68 $7,917.87 $95,014.40 383 non-exempt Fleet Svcs Coord 1 $28.97 $29.84 $29.84 $30.73 2 $30.49 $31.41 $31.41 $32.35 3 $32.09 $33.06 $33.06 $34.05 4 $33.78 $34.80 $34.80 $35.84 5 $35.56 $6,163.73 $73,964.80 $36.63 $6,349.20 $76,190.40 $36.63 $6,349.20 $76,190.40 $37.73 $6,539.87 $78,478.40 384 non-exempt Mobile Service Tech 1 $34.41 $35.44 $35.44 $36.52 2 $36.22 $37.31 $37.31 $38.44 3 $38.13 $39.27 $39.27 $40.46 4 $40.14 $41.34 $41.34 $42.59 5 $42.25 $7,323.33 $87,880.00 $43.52 $7,543.47 $90,521.60 $43.52 $7,543.47 $90,521.60 $44.83 $7,770.53 $93,246.40 385 non-exempt Senior Fleet Services Coordinator 1 $33.27 $34.27 $34.27 $35.29 2 $35.02 $36.07 $36.07 $37.15 3 $36.86 $37.97 $37.97 $39.11 4 $38.80 $39.97 $39.97 $41.17 5 $40.84 $7,078.93 $84,947.20 $42.07 $7,292.13 $87,505.60 $42.07 $7,292.13 $87,505.60 $43.34 $7,512.27 $90,147.20 390 non-exempt Heavy Equip Oper 1 $31.49 $33.26 $34.13 $35.15 2 $33.15 $35.01 $35.93 $37.00 3 $34.89 $36.85 $37.82 $38.95 4 $36.73 $38.79 $39.81 $41.00 5 $38.66 $6,701.07 $80,412.80 $40.83 $7,077.20 $84,926.40 $41.90 $7,262.67 $87,152.00 $43.16 $7,481.07 $89,772.80 391 non-exempt Heavy Equip Oper-L 1 $33.68 $35.58 $36.50 $37.60 2 $35.45 $37.45 $38.42 $39.58 3 $37.32 $39.42 $40.44 $41.66 4 $39.28 $41.49 $42.57 $43.85 5 $41.35 $7,167.33 $86,008.00 $43.67 $7,569.47 $90,833.60 $44.81 $7,767.07 $93,204.80 $46.16 $8,001.07 $96,012.80 392 non-exempt St Sweeper Op 1 $27.76 $29.32 $30.08 $30.98 2 $29.22 $30.86 $31.66 $32.61 3 $30.76 $32.48 $33.33 $34.33 4 $32.38 $34.19 $35.08 $36.14 5 $34.08 $5,907.20 $70,886.40 $35.99 $6,238.27 $74,859.20 $36.93 $6,401.20 $76,814.40 $38.04 $6,593.60 $79,123.20 396 non-exempt Equip Operator 1 $27.81 $29.37 $30.13 $31.04 2 $29.27 $30.92 $31.72 $32.67 3 $30.81 $32.55 $33.39 $34.39 4 $32.43 $34.26 $35.15 $36.20 5 $34.14 $5,917.60 $71,011.20 $36.06 $6,250.40 $75,004.80 $37.00 $6,413.33 $76,960.00 $38.11 $6,605.73 $79,268.80 397 non-exempt Equip Operator - Lead 1 $29.75 $31.43 $32.24 $33.21 2 $31.32 $33.08 $33.94 $34.96 3 $32.97 $34.82 $35.73 $36.80 4 $34.70 $36.65 $37.61 $38.74 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 15 5 $36.53 $6,331.87 $75,982.40 $38.58 $6,687.20 $80,246.40 $39.59 $6,862.27 $82,347.20 $40.78 $7,068.53 $84,822.40 Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 16 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 398 non-exempt Geographic Inform Syst Specialist 1 $40.98 $43.34 $44.53 $45.88 2 $43.14 $45.62 $46.87 $48.29 3 $45.41 $48.02 $49.34 $50.83 4 $47.80 $50.55 $51.94 $53.50 5 $50.32 $8,722.13 $104,665.60 $53.21 $9,223.07 $110,676.80 $54.67 $9,476.13 $113,713.60 $56.32 $9,762.13 $117,145.60 399 non-exempt Emergency Med Svs Data Specialist 1 $28.03 $28.90 $28.94 $29.81 2 $29.50 $30.42 $30.46 $31.38 3 $31.05 $32.02 $32.06 $33.03 4 $32.68 $33.71 $33.75 $34.77 5 $34.40 $5,962.67 $71,552.00 $35.48 $6,149.87 $73,798.40 $35.53 $6,158.53 $73,902.40 $36.60 $6,344.00 $76,128.00 405 non-exempt St Maint Asst 1 $23.72 $24.84 $25.28 $26.04 2 $24.97 $26.15 $26.61 $27.41 3 $26.28 $27.53 $28.01 $28.85 4 $27.66 $28.98 $29.48 $30.37 5 $29.12 $5,047.47 $60,569.60 $30.50 $5,286.67 $63,440.00 $31.03 $5,378.53 $64,542.40 $31.97 $5,541.47 $66,497.60 406 non-exempt Traf Cont Maint I 1 $27.76 $29.08 $29.58 $30.47 2 $29.22 $30.61 $31.14 $32.07 3 $30.76 $32.22 $32.78 $33.76 4 $32.38 $33.92 $34.50 $35.54 5 $34.08 $5,907.20 $70,886.40 $35.70 $6,188.00 $74,256.00 $36.32 $6,295.47 $75,545.60 $37.41 $6,484.40 $77,812.80 407 non-exempt Traf Cont Maint-L 1 $29.70 $31.11 $31.65 $32.60 2 $31.26 $32.75 $33.32 $34.32 3 $32.91 $34.47 $35.07 $36.13 4 $34.64 $36.28 $36.92 $38.03 5 $36.46 $6,319.73 $75,836.80 $38.19 $6,619.60 $79,435.20 $38.86 $6,735.73 $80,828.80 $40.03 $6,938.53 $83,262.40 408 non-exempt Cement Finisher 1 $30.11 $31.85 $32.75 $33.73 2 $31.69 $33.53 $34.47 $35.50 3 $33.36 $35.29 $36.28 $37.37 4 $35.12 $37.15 $38.19 $39.34 5 $36.97 $6,408.13 $76,897.60 $39.11 $6,779.07 $81,348.80 $40.20 $6,968.00 $83,616.00 $41.41 $7,177.73 $86,132.80 409 non-exempt Cement Finisher Lead 1 $32.21 $34.08 $35.03 $36.08 2 $33.91 $35.87 $36.87 $37.98 3 $35.69 $37.76 $38.81 $39.98 4 $37.57 $39.75 $40.85 $42.08 5 $39.55 $6,855.33 $82,264.00 $41.84 $7,252.27 $87,027.20 $43.00 $7,453.33 $89,440.00 $44.29 $7,676.93 $92,123.20 412 non-exempt Traf Cont Maint Ii 1 $25.70 $26.92 $27.39 $28.22 2 $27.05 $28.34 $28.83 $29.70 3 $28.47 $29.83 $30.35 $31.26 4 $29.97 $31.40 $31.95 $32.91 5 $31.55 $5,468.67 $65,624.00 $33.05 $5,728.67 $68,744.00 $33.63 $5,829.20 $69,950.40 $34.64 $6,004.27 $72,051.20 413 non-exempt Landfill Technician 1 $34.91 $36.47 $37.01 $38.13 2 $36.75 $38.39 $38.96 $40.14 3 $38.68 $40.41 $41.01 $42.25 4 $40.72 $42.54 $43.17 $44.47 5 $42.86 $7,429.07 $89,148.80 $44.78 $7,761.87 $93,142.40 $45.44 $7,876.27 $94,515.20 $46.81 $8,113.73 $97,364.80 415 non-exempt Cust Srv Specialist-L 1 $30.55 $31.47 $31.47 $32.40 2 $32.16 $33.13 $33.13 $34.11 3 $33.85 $34.87 $34.87 $35.91 4 $35.63 $36.70 $36.70 $37.80 5 $37.50 $6,500.00 $78,000.00 $38.63 $6,695.87 $80,350.40 $38.63 $6,695.87 $80,350.40 $39.79 $6,896.93 $82,763.20 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 17 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 430 non-exempt Tree Trim/Ln Clr 1 $28.48 $29.60 $29.89 $30.78 2 $29.98 $31.16 $31.46 $32.40 3 $31.56 $32.80 $33.12 $34.11 4 $33.22 $34.53 $34.86 $35.91 5 $34.97 $6,061.47 $72,737.60 $36.35 $6,300.67 $75,608.00 $36.69 $6,359.60 $76,315.20 $37.80 $6,552.00 $78,624.00 431 non-exempt Tree Trim/Ln Clr-L 1 $30.46 $31.67 $31.98 $32.94 2 $32.06 $33.34 $33.66 $34.67 3 $33.75 $35.09 $35.43 $36.49 4 $35.53 $36.94 $37.29 $38.41 5 $37.40 $6,482.67 $77,792.00 $38.88 $6,739.20 $80,870.40 $39.25 $6,803.33 $81,640.00 $40.43 $7,007.87 $84,094.40 432 non-exempt Tree Trm/Ln Clr Asst 1 $26.84 $27.90 $28.17 $29.01 2 $28.25 $29.37 $29.65 $30.54 3 $29.74 $30.92 $31.21 $32.15 4 $31.31 $32.55 $32.85 $33.84 5 $32.96 $5,713.07 $68,556.80 $34.26 $5,938.40 $71,260.80 $34.58 $5,993.87 $71,926.40 $35.62 $6,174.13 $74,089.60 434 non-exempt Tree Maintenance Specialist 1 $28.93 $30.07 $30.36 $31.27 2 $30.45 $31.65 $31.96 $32.92 3 $32.05 $33.32 $33.64 $34.65 4 $33.74 $35.07 $35.41 $36.47 5 $35.52 $6,156.80 $73,881.60 $36.92 $6,399.47 $76,793.60 $37.27 $6,460.13 $77,521.60 $38.39 $6,654.27 $79,851.20 435 non-exempt Tree Maint Asst 1 $24.80 $25.77 $26.01 $26.81 2 $26.10 $27.13 $27.38 $28.22 3 $27.47 $28.56 $28.82 $29.70 4 $28.92 $30.06 $30.34 $31.26 5 $30.44 $5,276.27 $63,315.20 $31.64 $5,484.27 $65,811.20 $31.94 $5,536.27 $66,435.20 $32.90 $5,702.67 $68,432.00 451 non-exempt Park Maint Person 1 $25.70 $26.55 $26.64 $27.45 2 $27.05 $27.95 $28.04 $28.89 3 $28.47 $29.42 $29.52 $30.41 4 $29.97 $30.97 $31.07 $32.01 5 $31.55 $5,468.67 $65,624.00 $32.60 $5,650.67 $67,808.00 $32.70 $5,668.00 $68,016.00 $33.69 $5,839.60 $70,075.20 452 non-exempt Park Maint - Lead 1 $29.79 $30.78 $30.88 $31.82 2 $31.36 $32.40 $32.50 $33.49 3 $33.01 $34.11 $34.21 $35.25 4 $34.75 $35.90 $36.01 $37.10 5 $36.58 $6,340.53 $76,086.40 $37.79 $6,550.27 $78,603.20 $37.91 $6,571.07 $78,852.80 $39.05 $6,768.67 $81,224.00 460 non-exempt Parks/Golf Crew-Lead 1 $27.96 $28.90 $28.98 $29.86 2 $29.43 $30.42 $30.50 $31.43 3 $30.98 $32.02 $32.11 $33.08 4 $32.61 $33.70 $33.80 $34.82 5 $34.33 $5,950.53 $71,406.40 $35.47 $6,148.13 $73,777.60 $35.58 $6,167.20 $74,006.40 $36.65 $6,352.67 $76,232.00 461 non-exempt Sprinkler Sys Repr 1 $26.14 $27.00 $27.08 $27.89 2 $27.52 $28.42 $28.51 $29.36 3 $28.97 $29.92 $30.01 $30.91 4 $30.49 $31.49 $31.59 $32.54 5 $32.09 $5,562.27 $66,747.20 $33.15 $5,746.00 $68,952.00 $33.25 $5,763.33 $69,160.00 $34.25 $5,936.67 $71,240.00 462 non-exempt Field Service Pers WGW 1 $27.89 $29.51 $30.31 $31.23 2 $29.36 $31.06 $31.91 $32.87 3 $30.91 $32.69 $33.59 $34.60 4 $32.54 $34.41 $35.36 $36.42 5 $34.25 $5,936.67 $71,240.00 $36.22 $6,278.13 $75,337.60 $37.22 $6,451.47 $77,417.60 $38.34 $6,645.60 $79,747.20 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 18 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 463 non-exempt Gas System Tech II 1 $31.91 $33.74 $34.68 $35.72 2 $33.59 $35.52 $36.50 $37.60 3 $35.36 $37.39 $38.42 $39.58 4 $37.22 $39.36 $40.44 $41.66 5 $39.18 $6,791.20 $81,494.40 $41.43 $7,181.20 $86,174.40 $42.57 $7,378.80 $88,545.60 $43.85 $7,600.67 $91,208.00 464 non-exempt Cathodic Protection Tech Assistant 1 $33.56 $35.49 $36.47 $37.57 2 $35.33 $37.36 $38.39 $39.55 3 $37.19 $39.33 $40.41 $41.63 4 $39.15 $41.40 $42.54 $43.82 5 $41.21 $7,143.07 $85,716.80 $43.58 $7,553.87 $90,646.40 $44.78 $7,761.87 $93,142.40 $46.13 $7,995.87 $95,950.40 479 non-exempt Util Install/Rep-L 1 $36.31 $38.39 $39.44 $40.64 2 $38.22 $40.41 $41.52 $42.78 3 $40.23 $42.54 $43.71 $45.03 4 $42.35 $44.78 $46.01 $47.40 5 $44.58 $7,727.20 $92,726.40 $47.14 $8,170.93 $98,051.20 $48.43 $8,394.53 $100,734.40 $49.89 $8,647.60 $103,771.20 480 non-exempt Util Install/Rep 1 $33.27 $35.18 $36.15 $37.24 2 $35.02 $37.03 $38.05 $39.20 3 $36.86 $38.98 $40.05 $41.26 4 $38.80 $41.03 $42.16 $43.43 5 $40.84 $7,078.93 $84,947.20 $43.19 $7,486.27 $89,835.20 $44.38 $7,692.53 $92,310.40 $45.72 $7,924.80 $95,097.60 481 non-exempt Util Install/Rep Ast 1 $28.22 $29.84 $30.66 $31.58 2 $29.70 $31.41 $32.27 $33.24 3 $31.26 $33.06 $33.97 $34.99 4 $32.91 $34.80 $35.76 $36.83 5 $34.64 $6,004.27 $72,051.20 $36.63 $6,349.20 $76,190.40 $37.64 $6,524.27 $78,291.20 $38.77 $6,720.13 $80,641.60 482 non-exempt Water Meter Rep Asst 1 $24.06 $25.18 $25.57 $26.34 2 $25.33 $26.50 $26.92 $27.73 3 $26.66 $27.89 $28.34 $29.19 4 $28.06 $29.36 $29.83 $30.73 5 $29.54 $5,120.27 $61,443.20 $30.90 $5,356.00 $64,272.00 $31.40 $5,442.67 $65,312.00 $32.35 $5,607.33 $67,288.00 484 non-exempt Water Meter Repair 1 $26.65 $27.88 $28.33 $29.18 2 $28.05 $29.35 $29.82 $30.72 3 $29.53 $30.89 $31.39 $32.34 4 $31.08 $32.52 $33.04 $34.04 5 $32.72 $5,671.47 $68,057.60 $34.23 $5,933.20 $71,198.40 $34.78 $6,028.53 $72,342.40 $35.83 $6,210.53 $74,526.40 486 non-exempt Util Fld Svcs Rep 1 $34.12 $36.09 $37.08 $38.19 2 $35.92 $37.99 $39.03 $40.20 3 $37.81 $39.99 $41.08 $42.32 4 $39.80 $42.09 $43.24 $44.55 5 $41.89 $7,260.93 $87,131.20 $44.30 $7,678.67 $92,144.00 $45.52 $7,890.13 $94,681.60 $46.89 $8,127.60 $97,531.20 489 non-exempt Gas System Tech 1 $30.39 $32.14 $33.01 $34.01 2 $31.99 $33.83 $34.75 $35.80 3 $33.67 $35.61 $36.58 $37.68 4 $35.44 $37.48 $38.50 $39.66 5 $37.31 $6,467.07 $77,604.80 $39.45 $6,838.00 $82,056.00 $40.53 $7,025.20 $84,302.40 $41.75 $7,236.67 $86,840.00 499 non-exempt Water Sys Oper I 1 $28.98 $29.86 $29.86 $30.75 2 $30.50 $31.43 $31.43 $32.37 3 $32.11 $33.08 $33.08 $34.07 4 $33.80 $34.82 $34.82 $35.86 5 $35.58 $6,167.20 $74,006.40 $36.65 $6,352.67 $76,232.00 $36.65 $6,352.67 $76,232.00 $37.75 $6,543.33 $78,520.00 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 19 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 500 non-exempt WQC Plt Oper I 1 $30.41 $31.32 $31.32 $32.26 2 $32.01 $32.97 $32.97 $33.96 3 $33.69 $34.70 $34.70 $35.75 4 $35.46 $36.53 $36.53 $37.63 5 $37.33 $6,470.53 $77,646.40 $38.45 $6,664.67 $79,976.00 $38.45 $6,664.67 $79,976.00 $39.61 $6,865.73 $82,388.80 501 non-exempt Sr Water Sys Oper 1 $37.55 $38.68 $38.68 $39.84 2 $39.53 $40.72 $40.72 $41.94 3 $41.61 $42.86 $42.86 $44.15 4 $43.80 $45.12 $45.12 $46.47 5 $46.10 $7,990.67 $95,888.00 $47.49 $8,231.60 $98,779.20 $47.49 $8,231.60 $98,779.20 $48.92 $8,479.47 $101,753.60 502 non-exempt Chemist 1 $35.11 $36.20 $36.21 $37.30 2 $36.96 $38.10 $38.12 $39.26 3 $38.90 $40.10 $40.13 $41.33 4 $40.95 $42.21 $42.24 $43.51 5 $43.10 $7,470.67 $89,648.00 $44.43 $7,701.20 $92,414.40 $44.46 $7,706.40 $92,476.80 $45.80 $7,938.67 $95,264.00 503 non-exempt Laboratory Tech Wqc 1 $31.40 $32.37 $32.40 $33.36 2 $33.05 $34.07 $34.10 $35.12 3 $34.79 $35.86 $35.89 $36.97 4 $36.62 $37.75 $37.78 $38.92 5 $38.55 $6,682.00 $80,184.00 $39.74 $6,888.27 $82,659.20 $39.77 $6,893.47 $82,721.60 $40.97 $7,101.47 $85,217.60 504 non-exempt Sr Mech 1 $37.13 $38.24 $38.24 $39.39 2 $39.08 $40.25 $40.25 $41.46 3 $41.14 $42.37 $42.37 $43.64 4 $43.30 $44.60 $44.60 $45.94 5 $45.58 $7,900.53 $94,806.40 $46.95 $8,138.00 $97,656.00 $46.95 $8,138.00 $97,656.00 $48.36 $8,382.40 $100,588.80 506 non-exempt Sr Operator Wqc 1 $39.40 $40.58 $40.58 $41.80 2 $41.47 $42.72 $42.72 $44.00 3 $43.65 $44.97 $44.97 $46.32 4 $45.95 $47.34 $47.34 $48.76 5 $48.37 $8,384.13 $100,609.60 $49.83 $8,637.20 $103,646.40 $49.83 $8,637.20 $103,646.40 $51.33 $8,897.20 $106,766.40 507 non-exempt Water Sys Oper II 1 $33.12 $34.11 $34.11 $35.12 2 $34.86 $35.90 $35.90 $36.97 3 $36.69 $37.79 $37.79 $38.92 4 $38.62 $39.78 $39.78 $40.97 5 $40.65 $7,046.00 $84,552.00 $41.87 $7,257.47 $87,089.60 $41.87 $7,257.47 $87,089.60 $43.13 $7,475.87 $89,710.40 508 non-exempt Ind Waste Inspec 1 $31.65 $33.06 $33.54 $34.56 2 $33.32 $34.80 $35.30 $36.38 3 $35.07 $36.63 $37.16 $38.29 4 $36.92 $38.56 $39.12 $40.30 5 $38.86 $6,735.73 $80,828.80 $40.59 $7,035.60 $84,427.20 $41.18 $7,137.87 $85,654.40 $42.42 $7,352.80 $88,233.60 509 non-exempt WQC Plt Oper II 1 $34.74 $35.78 $35.78 $36.86 2 $36.57 $37.66 $37.66 $38.80 3 $38.49 $39.64 $39.64 $40.84 4 $40.52 $41.73 $41.73 $42.99 5 $42.65 $7,392.67 $88,712.00 $43.93 $7,614.53 $91,374.40 $43.93 $7,614.53 $91,374.40 $45.25 $7,843.33 $94,120.00 510 non-exempt WQC Plt Oper Trn 1 $26.77 $27.57 $27.57 $28.41 2 $28.18 $29.02 $29.02 $29.90 3 $29.66 $30.55 $30.55 $31.47 4 $31.22 $32.16 $32.16 $33.13 5 $32.86 $5,695.73 $68,348.80 $33.85 $5,867.33 $70,408.00 $33.85 $5,867.33 $70,408.00 $34.87 $6,044.13 $72,529.60 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 20 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 512 non-exempt Sr Instrum Elect 1 $37.31 $38.85 $39.27 $40.46 2 $39.27 $40.89 $41.34 $42.59 3 $41.34 $43.04 $43.52 $44.83 4 $43.52 $45.31 $45.81 $47.19 5 $45.81 $7,940.40 $95,284.80 $47.69 $8,266.27 $99,195.20 $48.22 $8,358.13 $100,297.60 $49.67 $8,609.47 $103,313.60 513 non-exempt Plans Examiner 1 $36.22 $37.88 $38.48 $39.63 2 $38.13 $39.87 $40.51 $41.72 3 $40.14 $41.97 $42.64 $43.92 4 $42.25 $44.18 $44.88 $46.23 5 $44.47 $7,708.13 $92,497.60 $46.51 $8,061.73 $96,740.80 $47.24 $8,188.27 $98,259.20 $48.66 $8,434.40 $101,212.80 514 non-exempt Development Project Coordinator I 1 $27.42 $28.67 $29.13 $30.01 2 $28.86 $30.18 $30.66 $31.59 3 $30.38 $31.77 $32.27 $33.25 4 $31.98 $33.44 $33.97 $35.00 5 $33.66 $5,834.40 $70,012.80 $35.20 $6,101.33 $73,216.00 $35.76 $6,198.40 $74,380.80 $36.84 $6,385.60 $76,627.20 515 non-exempt Development Project Coordinator II 1 $31.15 $32.59 $33.10 $34.09 2 $32.79 $34.30 $34.84 $35.88 3 $34.52 $36.10 $36.67 $37.77 4 $36.34 $38.00 $38.60 $39.76 5 $38.25 $6,630.00 $79,560.00 $40.00 $6,933.33 $83,200.00 $40.63 $7,042.53 $84,510.40 $41.85 $7,254.00 $87,048.00 516 non-exempt Development Project Coordinator III 1 $34.36 $35.93 $36.50 $37.60 2 $36.17 $37.82 $38.42 $39.58 3 $38.07 $39.81 $40.44 $41.66 4 $40.07 $41.90 $42.57 $43.85 5 $42.18 $7,311.20 $87,734.40 $44.11 $7,645.73 $91,748.80 $44.81 $7,767.07 $93,204.80 $46.16 $8,001.07 $96,012.80 517 non-exempt Plant Mechanic 1 $34.53 $35.58 $35.58 $36.64 2 $36.35 $37.45 $37.45 $38.57 3 $38.26 $39.42 $39.42 $40.60 4 $40.27 $41.49 $41.49 $42.74 5 $42.39 $7,347.60 $88,171.20 $43.67 $7,569.47 $90,833.60 $43.67 $7,569.47 $90,833.60 $44.99 $7,798.27 $93,579.20 528 non-exempt Lnper/Cbl Spl-Appren 1 $36.77 $38.45 $39.04 $40.21 2 $38.71 $40.47 $41.09 $42.33 3 $40.75 $42.60 $43.25 $44.56 4 $42.89 $44.84 $45.53 $46.90 5 $45.15 $7,826.00 $93,912.00 $47.20 $8,181.33 $98,176.00 $47.93 $8,307.87 $99,694.40 $49.37 $8,557.47 $102,689.60 529 non-exempt Electrician-Appren 1 $34.30 $35.70 $36.10 $37.18 2 $36.10 $37.58 $38.00 $39.14 3 $38.00 $39.56 $40.00 $41.20 4 $40.00 $41.64 $42.10 $43.37 5 $42.10 $7,297.33 $87,568.00 $43.83 $7,597.20 $91,166.40 $44.32 $7,682.13 $92,185.60 $45.65 $7,912.67 $94,952.00 530 non-exempt Electrician 1 $36.23 $37.72 $38.14 $39.28 2 $38.14 $39.70 $40.15 $41.35 3 $40.15 $41.79 $42.26 $43.53 4 $42.26 $43.99 $44.48 $45.82 5 $44.48 $7,709.87 $92,518.40 $46.31 $8,027.07 $96,324.80 $46.82 $8,115.47 $97,385.60 $48.23 $8,359.87 $100,318.40 531 non-exempt Lineperson/Cable Spl-T 1 $40.78 $42.63 $43.29 $44.59 2 $42.93 $44.87 $45.57 $46.94 3 $45.19 $47.23 $47.97 $49.41 4 $47.57 $49.72 $50.49 $52.01 5 $50.07 $8,678.80 $104,145.60 $52.34 $9,072.27 $108,867.20 $53.15 $9,212.67 $110,552.00 $54.75 $9,490.00 $113,880.00 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 21 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 532 non-exempt Lineperson/Cable Spl-TL 1 $43.61 $45.59 $46.30 $47.69 2 $45.91 $47.99 $48.74 $50.20 3 $48.33 $50.52 $51.30 $52.84 4 $50.87 $53.18 $54.00 $55.62 5 $53.55 $9,282.00 $111,384.00 $55.98 $9,703.20 $116,438.40 $56.84 $9,852.27 $118,227.20 $58.55 $10,148.67 $121,784.00 533 non-exempt Elec Asst I 1 $27.09 $28.22 $28.53 $29.39 2 $28.52 $29.70 $30.03 $30.94 3 $30.02 $31.26 $31.61 $32.57 4 $31.60 $32.90 $33.27 $34.28 5 $33.26 $5,765.07 $69,180.80 $34.63 $6,002.53 $72,030.40 $35.02 $6,070.13 $72,841.60 $36.08 $6,253.87 $75,046.40 535 non-exempt Electrician-Lead 1 $38.79 $40.38 $40.83 $42.07 2 $40.83 $42.51 $42.98 $44.28 3 $42.98 $44.75 $45.24 $46.61 4 $45.24 $47.10 $47.62 $49.06 5 $47.62 $8,254.13 $99,049.60 $49.58 $8,593.87 $103,126.40 $50.13 $8,689.20 $104,270.40 $51.64 $8,950.93 $107,411.20 536 non-exempt Cathodic Tech 1 $41.21 $43.59 $44.77 $46.12 2 $43.38 $45.88 $47.13 $48.55 3 $45.66 $48.29 $49.61 $51.10 4 $48.06 $50.83 $52.22 $53.79 5 $50.59 $8,768.93 $105,227.20 $53.50 $9,273.33 $111,280.00 $54.97 $9,528.13 $114,337.60 $56.62 $9,814.13 $117,769.60 541 non-exempt Lineper/Cable Spl 1 $42.81 $44.75 $45.45 $46.83 2 $45.06 $47.11 $47.84 $49.29 3 $47.43 $49.59 $50.36 $51.88 4 $49.93 $52.20 $53.01 $54.61 5 $52.56 $9,110.40 $109,324.80 $54.95 $9,524.67 $114,296.00 $55.80 $9,672.00 $116,064.00 $57.48 $9,963.20 $119,558.40 542 non-exempt Lineper/Cable Spl-L 1 $45.82 $47.90 $48.63 $50.09 2 $48.23 $50.42 $51.19 $52.73 3 $50.77 $53.07 $53.88 $55.51 4 $53.44 $55.86 $56.72 $58.43 5 $56.25 $9,750.00 $117,000.00 $58.80 $10,192.00 $122,304.00 $59.71 $10,349.73 $124,196.80 $61.51 $10,661.73 $127,940.80 543 non-exempt Overhead Underground Troubleman 1 $44.98 $47.03 $47.75 $49.18 2 $47.35 $49.50 $50.26 $51.77 3 $49.84 $52.10 $52.91 $54.49 4 $52.46 $54.84 $55.69 $57.36 5 $55.22 $9,571.47 $114,857.60 $57.73 $10,006.53 $120,078.40 $58.62 $10,160.80 $121,929.60 $60.38 $10,465.87 $125,590.40 544 non-exempt Sr Industrial Waste Investigator 1 $38.05 $39.75 $40.33 $41.53 2 $40.05 $41.84 $42.45 $43.72 3 $42.16 $44.04 $44.68 $46.02 4 $44.38 $46.36 $47.03 $48.44 5 $46.72 $8,098.13 $97,177.60 $48.80 $8,458.67 $101,504.00 $49.50 $8,580.00 $102,960.00 $50.99 $8,838.27 $106,059.20 545 non-exempt Street Light, Traffic Signal and Fiber – Apprentice 1 $36.54 $38.19 $38.78 $39.95 2 $38.46 $40.20 $40.82 $42.05 3 $40.48 $42.32 $42.97 $44.26 4 $42.61 $44.55 $45.23 $46.59 5 $44.85 $7,774.00 $93,288.00 $46.89 $8,127.60 $97,531.20 $47.61 $8,252.40 $99,028.80 $49.04 $8,500.27 $102,003.20 546 non-exempt Street Light, Traffic Signal and Fiber Technician 1 $38.61 $40.36 $40.97 $42.21 2 $40.64 $42.48 $43.13 $44.43 3 $42.78 $44.72 $45.40 $46.77 4 $45.03 $47.07 $47.79 $49.23 5 $47.40 $8,216.00 $98,592.00 $49.55 $8,588.67 $103,064.00 $50.31 $8,720.40 $104,644.80 $51.82 $8,982.13 $107,785.60 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 22 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 547 non-exempt Street Light, Traffic Signal and Fiber – Lead 1 $41.31 $43.19 $43.85 $45.18 2 $43.48 $45.46 $46.16 $47.56 3 $45.77 $47.85 $48.59 $50.06 4 $48.18 $50.37 $51.15 $52.69 5 $50.72 $8,791.47 $105,497.60 $53.02 $9,190.13 $110,281.60 $53.84 $9,332.27 $111,987.20 $55.46 $9,613.07 $115,356.80 548 non-exempt Substation Electrician - Apprentice 1 $39.87 $41.68 $42.32 $43.60 2 $41.97 $43.87 $44.55 $45.89 3 $44.18 $46.18 $46.89 $48.30 4 $46.50 $48.61 $49.36 $50.84 5 $48.95 $8,484.67 $101,816.00 $51.17 $8,869.47 $106,433.60 $51.96 $9,006.40 $108,076.80 $53.52 $9,276.80 $111,321.60 549 non-exempt Substation Electrician 1 $42.11 $44.03 $44.71 $46.05 2 $44.33 $46.35 $47.06 $48.47 3 $46.66 $48.79 $49.54 $51.02 4 $49.12 $51.36 $52.15 $53.71 5 $51.71 $8,963.07 $107,556.80 $54.06 $9,370.40 $112,444.80 $54.89 $9,514.27 $114,171.20 $56.54 $9,800.27 $117,603.20 550 non-exempt Substation Electrician - Lead 1 $45.06 $47.11 $47.83 $49.29 2 $47.43 $49.59 $50.35 $51.88 3 $49.93 $52.20 $53.00 $54.61 4 $52.56 $54.95 $55.79 $57.48 5 $55.33 $9,590.53 $115,086.40 $57.84 $10,025.60 $120,307.20 $58.73 $10,179.87 $122,158.40 $60.50 $10,486.67 $125,840.00 552 non-exempt Metering Technician 1 $40.36 $42.19 $42.85 $44.14 2 $42.48 $44.41 $45.10 $46.46 3 $44.72 $46.75 $47.47 $48.90 4 $47.07 $49.21 $49.97 $51.47 5 $49.55 $8,588.67 $103,064.00 $51.80 $8,978.67 $107,744.00 $52.60 $9,117.33 $109,408.00 $54.18 $9,391.20 $112,694.40 553 non-exempt Metering Technician – Lead 1 $43.20 $45.16 $45.87 $47.23 2 $45.47 $47.54 $48.28 $49.72 3 $47.86 $50.04 $50.82 $52.34 4 $50.38 $52.67 $53.49 $55.09 5 $53.03 $9,191.87 $110,302.40 $55.44 $9,609.60 $115,315.20 $56.30 $9,758.67 $117,104.00 $57.99 $10,051.60 $120,619.20 554 non-exempt SCADA Technologist 1 $47.94 $50.69 $52.08 $53.66 2 $50.46 $53.36 $54.82 $56.48 3 $53.12 $56.17 $57.71 $59.45 4 $55.92 $59.13 $60.75 $62.58 5 $58.86 $10,202.40 $122,428.80 $62.24 $10,788.27 $129,459.20 $63.95 $11,084.67 $133,016.00 $65.87 $11,417.47 $137,009.60 560 non-exempt Code Enforcement Off - L 1 $36.68 $38.36 $38.96 $40.14 2 $38.61 $40.38 $41.01 $42.25 3 $40.64 $42.50 $43.17 $44.47 4 $42.78 $44.74 $45.44 $46.81 5 $45.03 $7,805.20 $93,662.40 $47.09 $8,162.27 $97,947.20 $47.83 $8,290.53 $99,486.40 $49.27 $8,540.13 $102,481.60 570 non-exempt Parking Operations Lead 1 $44.20 $46.31 $47.14 $48.55 2 $46.53 $48.75 $49.62 $51.11 3 $48.98 $51.32 $52.23 $53.80 4 $51.56 $54.02 $54.98 $56.63 5 $54.27 $9,406.80 $112,881.60 $56.86 $9,855.73 $118,268.80 $57.87 $10,030.80 $120,369.60 $59.61 $10,332.40 $123,988.80 575 non-exempt Traffic Engineering Lead 1 $49.43 $51.15 $51.39 $52.93 2 $52.03 $53.84 $54.09 $55.72 3 $54.77 $56.67 $56.94 $58.65 4 $57.65 $59.65 $59.94 $61.74 5 $60.68 $10,517.87 $126,214.40 $62.79 $10,883.60 $130,603.20 $63.09 $10,935.60 $131,227.20 $64.99 $11,264.93 $135,179.20 Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016)Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016) Appendix A-2 To MOA Between City of Palo Alto and SEIU FY16/FY17 Salary Schedule 23 Rate Approx. Monthly Approx Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual Rate Approx. Monthly Approx. Annual 702 non-exempt Community Serv Offcr 1 $26.09 $27.33 $27.82 $28.65 2 $27.46 $28.77 $29.28 $30.16 3 $28.90 $30.28 $30.82 $31.75 4 $30.42 $31.87 $32.44 $33.42 5 $32.02 $5,550.13 $66,601.60 $33.55 $5,815.33 $69,784.00 $34.15 $5,919.33 $71,032.00 $35.18 $6,097.87 $73,174.40 389 non-exempt HEO/Installer Repairer 1 $34.58 $36.58 $37.57 $38.70 2 $36.40 $38.50 $39.55 $40.74 3 $38.32 $40.53 $41.63 $42.88 4 $40.34 $42.66 $43.82 $45.14 5 $42.46 $7,359.73 $88,316.80 $44.90 $7,782.67 $93,392.00 $46.13 $7,995.87 $95,950.40 $47.52 $8,236.80 $98,841.60 527 non-exempt Electrical Equipment Tech 1 $31.85 $32.81 $32.81 $33.80 2 $33.53 $34.54 $34.54 $35.58 3 $35.29 $36.36 $36.36 $37.45 4 $37.15 $38.27 $38.27 $39.42 5 $39.10 $6,777.33 $81,328.00 $40.28 $6,981.87 $83,782.40 $40.28 $6,981.87 $83,782.40 $41.49 $7,191.60 $86,299.20 Salaray Effective 7/28/17 (PP15:2016)Salary Effective 12/29/17 (PP26:2016)Job Code FLSA Job Title Steps Salary Effective 5/6/16 (PP09:2016)Salary Effective 12/30/16 (PP26:2016) Effective 11/29/14 1 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual 206 Non-exempt Account Assistant Step 1 $20.11 Step 1 $20.61 Step 2 $21.16 Step 2 $21.69 Step 3 $22.28 Step 3 $22.83 Step 4 $23.45 Step 4 $24.04 Step 5 $24.68 $4,277.87 $51,334.40 Step 5 $25.30 $4,385.33 $52,624.00 204 Non-exempt Acct Spec Step 1 $23.49 Step 1 $24.07 Step 2 $24.72 Step 2 $25.34 Step 3 $26.02 Step 3 $26.67 Step 4 $27.39 Step 4 $28.08 Step 5 $28.84 $4,998.93 $59,987.20 Step 5 $29.56 $5,123.73 $61,484.80 207 Non-exempt Acct Spec-Lead Step 1 $25.14 Step 1 $25.77 Step 2 $26.46 Step 2 $27.12 Step 3 $27.86 Step 3 $28.55 Step 4 $29.32 Step 4 $30.05 Step 5 $30.87 $5,350.80 $64,209.60 Step 5 $31.64 $5,484.27 $65,811.20 294 Non-exempt Administrative Associate I Step 1 $23.09 Step 1 $23.67 Step 2 $24.30 Step 2 $24.91 Step 3 $25.58 Step 3 $26.22 Step 4 $26.93 Step 4 $27.60 Step 5 $28.35 $4,914.00 $58,968.00 Step 5 $29.05 $5,035.33 $60,424.00 295 Non-exempt Administrative Associate II Step 1 $25.09 Step 1 $25.72 Step 2 $26.41 Step 2 $27.07 Step 3 $27.80 Step 3 $28.50 Step 4 $29.26 Step 4 $30.00 Step 5 $30.80 $5,338.67 $64,064.00 Step 5 $31.57 $5,472.13 $65,665.60 296 Non-exempt Administrative Associate III Step 1 $26.89 Step 1 $27.57 Step 2 $28.31 Step 2 $29.02 Step 3 $29.80 Step 3 $30.54 Step 4 $31.37 Step 4 $32.15 Step 5 $33.02 $5,723.47 $68,681.60 Step 5 $33.84 $5,865.60 $70,387.20 277 Non-exempt Animal Attendant Step 1 $22.06 Step 1 $22.61 Step 2 $23.22 Step 2 $23.80 Step 3 $24.44 Step 3 $25.05 Step 4 $25.73 Step 4 $26.37 Step 5 $27.08 $4,693.87 $56,326.40 Step 5 $27.76 $4,811.73 $57,740.80 Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title EXHIBIT "3" Effective 11/29/14 2 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 276 Non-exempt Animal Control Off Step 1 $23.63 Step 1 $24.22 Step 2 $24.88 Step 2 $25.50 Step 3 $26.18 Step 3 $26.84 Step 4 $27.56 Step 4 $28.25 Step 5 $29.01 $5,028.40 $60,340.80 Step 5 $29.74 $5,154.93 $61,859.20 312 Non-exempt Animal Control Off Lead Step 1 $25.28 Step 1 $25.92 Step 2 $26.61 Step 2 $27.28 Step 3 $28.01 Step 3 $28.72 Step 4 $29.49 Step 4 $30.23 Step 5 $31.04 $5,380.27 $64,563.20 Step 5 $31.82 $5,515.47 $66,185.60 263 Non-exempt Animal Services Spec Step 1 $23.30 Step 1 $23.89 Step 2 $24.53 Step 2 $25.14 Step 3 $25.82 Step 3 $26.47 Step 4 $27.18 Step 4 $27.86 Step 5 $28.61 $4,959.07 $59,508.80 Step 5 $29.33 $5,083.87 $61,006.40 275 Non-exempt Animal Services Spec II Step 1 $25.70 Step 1 $26.34 Step 2 $27.05 Step 2 $27.72 Step 3 $28.47 Step 3 $29.18 Step 4 $29.97 Step 4 $30.72 Step 5 $31.55 $5,468.67 $65,624.00 Step 5 $32.34 $5,605.60 $67,267.20 244 Non-exempt Assoc Buyer Step 1 $30.09 Step 1 $30.85 Step 2 $31.68 Step 2 $32.47 Step 3 $33.35 Step 3 $34.18 Step 4 $35.10 Step 4 $35.98 Step 5 $36.95 $6,404.67 $76,856.00 Step 5 $37.87 $6,564.13 $78,769.60 333 Non-exempt Assoc Engineer Step 1 $37.08 Step 1 $38.00 Step 2 $39.03 Step 2 $40.00 Step 3 $41.08 Step 3 $42.11 Step 4 $43.24 Step 4 $44.32 Step 5 $45.52 $7,890.13 $94,681.60 Step 5 $46.66 $8,087.73 $97,052.80 353 Non-exempt Assoc Planner Step 1 $34.32 Step 1 $35.17 Step 2 $36.12 Step 2 $37.03 Step 3 $38.02 Step 3 $38.97 Step 4 $40.02 Step 4 $41.03 Step 5 $42.13 $7,302.53 $87,630.40 Step 5 $43.18 $7,484.53 $89,814.40 Effective 11/29/14 3 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 247 Non-exempt Assoc Power Engr Step 1 $39.47 Step 1 $40.46 Step 2 $41.55 Step 2 $42.59 Step 3 $43.73 Step 3 $44.83 Step 4 $46.04 Step 4 $47.19 Step 5 $48.46 $8,399.73 $100,796.80 Step 5 $49.67 $8,609.47 $103,313.60 269 Non-exempt Assoc Res Planner Step 1 $38.23 Step 1 $39.18 Step 2 $40.24 Step 2 $41.24 Step 3 $42.35 Step 3 $43.41 Step 4 $44.58 Step 4 $45.70 Step 5 $46.93 $8,134.53 $97,614.40 Step 5 $48.10 $8,337.33 $100,048.00 330 Non-exempt Asst Engineer Step 1 $33.57 Step 1 $34.41 Step 2 $35.34 Step 2 $36.22 Step 3 $37.20 Step 3 $38.13 Step 4 $39.15 Step 4 $40.13 Step 5 $41.22 $7,144.80 $85,737.60 Step 5 $42.25 $7,323.33 $87,880.00 256 Non-exempt Asst Power Engr Step 1 $35.63 Step 1 $36.52 Step 2 $37.51 Step 2 $38.45 Step 3 $39.48 Step 3 $40.47 Step 4 $41.56 Step 4 $42.60 Step 5 $43.75 $7,583.33 $91,000.00 Step 5 $44.84 $7,772.27 $93,267.20 268 Non-exempt Asst Res Planner Step 1 $34.50 Step 1 $35.37 Step 2 $36.32 Step 2 $37.23 Step 3 $38.23 Step 3 $39.19 Step 4 $40.24 Step 4 $41.25 Step 5 $42.36 $7,342.40 $88,108.80 Step 5 $43.42 $7,526.13 $90,313.60 299 Non-exempt Bldg Inspector Step 1 $33.78 Step 1 $34.63 Step 2 $35.56 Step 2 $36.45 Step 3 $37.43 Step 3 $38.37 Step 4 $39.40 Step 4 $40.39 Step 5 $41.48 $7,189.87 $86,278.40 Step 5 $42.51 $7,368.40 $88,420.80 300 Non-exempt Bldg Inspector Spec Step 1 $36.06 Step 1 $36.96 Step 2 $37.96 Step 2 $38.91 Step 3 $39.96 Step 3 $40.96 Step 4 $42.06 Step 4 $43.11 Step 5 $44.28 $7,675.20 $92,102.40 Step 5 $45.38 $7,865.87 $94,390.40 Effective 11/29/14 4 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 370 Non-exempt Bldg Serviceperson Step 1 $20.06 Step 1 $20.56 Step 2 $21.11 Step 2 $21.64 Step 3 $22.22 Step 3 $22.78 Step 4 $23.39 Step 4 $23.98 Step 5 $24.62 $4,267.47 $51,209.60 Step 5 $25.24 $4,374.93 $52,499.20 371 Non-exempt Bldg Serviceperson-L Step 1 $21.47 Step 1 $22.00 Step 2 $22.60 Step 2 $23.16 Step 3 $23.79 Step 3 $24.38 Step 4 $25.04 Step 4 $25.66 Step 5 $26.36 $4,569.07 $54,828.80 Step 5 $27.02 $4,683.47 $56,201.60 355 Non-exempt Bldg/Plg Technician Step 1 $27.83 Step 1 $28.52 Step 2 $29.29 Step 2 $30.02 Step 3 $30.83 Step 3 $31.60 Step 4 $32.45 Step 4 $33.27 Step 5 $34.16 $5,921.07 $71,052.80 Step 5 $35.02 $6,070.13 $72,841.60 340 Non-exempt Business Analyst Step 1 $45.69 Step 1 $46.84 Step 2 $48.10 Step 2 $49.30 Step 3 $50.63 Step 3 $51.89 Step 4 $53.29 Step 4 $54.63 Step 5 $56.10 $9,724.00 $116,688.00 Step 5 $57.50 $9,966.67 $119,600.00 3400 Non-exempt Business Analyst - S Step 1 $45.69 Step 1 $46.84 Step 2 $48.10 Step 2 $49.30 Step 3 $50.63 Step 3 $51.89 Step 4 $53.29 Step 4 $54.63 Step 5 $56.10 $9,724.00 $116,688.00 Step 5 $57.50 $9,966.67 $119,600.00 212 Non-exempt Buyer Step 1 $33.14 Step 1 $33.96 Step 2 $34.88 Step 2 $35.75 Step 3 $36.72 Step 3 $37.63 Step 4 $38.65 Step 4 $39.61 Step 5 $40.68 $7,051.20 $84,614.40 Step 5 $41.70 $7,228.00 $86,736.00 464 Non-exempt Cathodic Protection Tech Assistant Step 1 $31.41 Step 1 $32.20 Step 2 $33.06 Step 2 $33.89 Step 3 $34.80 Step 3 $35.67 Step 4 $36.64 Step 4 $37.55 Step 5 $38.56 $6,683.73 $80,204.80 Step 5 $39.53 $6,851.87 $82,222.40 Effective 11/29/14 5 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 536 Non-exempt Cathodic Tech Step 1 $38.56 Step 1 $39.53 Step 2 $40.59 Step 2 $41.61 Step 3 $42.73 Step 3 $43.80 Step 4 $44.98 Step 4 $46.10 Step 5 $47.35 $8,207.33 $98,488.00 Step 5 $48.53 $8,411.87 $100,942.40 208 Non-exempt CDBG Coordinator Step 1 $36.68 Step 1 $37.60 Step 2 $38.61 Step 2 $39.58 Step 3 $40.64 Step 3 $41.66 Step 4 $42.78 Step 4 $43.85 Step 5 $45.04 $7,806.93 $93,683.20 Step 5 $46.16 $8,001.07 $96,012.80 408 Non-exempt Cement Finisher Step 1 $28.17 Step 1 $28.88 Step 2 $29.66 Step 2 $30.40 Step 3 $31.22 Step 3 $32.00 Step 4 $32.86 Step 4 $33.68 Step 5 $34.59 $5,995.60 $71,947.20 Step 5 $35.45 $6,144.67 $73,736.00 409 Non-exempt Cement Finisher Lead Step 1 $30.14 Step 1 $30.89 Step 2 $31.73 Step 2 $32.52 Step 3 $33.40 Step 3 $34.23 Step 4 $35.16 Step 4 $36.03 Step 5 $37.01 $6,415.07 $76,980.80 Step 5 $37.93 $6,574.53 $78,894.40 502 Non-exempt Chemist Step 1 $33.72 Step 1 $34.56 Step 2 $35.49 Step 2 $36.38 Step 3 $37.36 Step 3 $38.29 Step 4 $39.32 Step 4 $40.31 Step 5 $41.39 $7,174.27 $86,091.20 Step 5 $42.43 $7,354.53 $88,254.40 297 Non-exempt Chf Elec Undg Inspec Step 1 $37.37 Step 1 $38.31 Step 2 $39.34 Step 2 $40.32 Step 3 $41.41 Step 3 $42.45 Step 4 $43.59 Step 4 $44.68 Step 5 $45.88 $7,952.53 $95,430.40 Step 5 $47.03 $8,151.87 $97,822.40 239 Non-exempt Chf Inspec WGW Step 1 $36.14 Step 1 $37.04 Step 2 $38.04 Step 2 $38.99 Step 3 $40.04 Step 3 $41.04 Step 4 $42.15 Step 4 $43.20 Step 5 $44.37 $7,690.80 $92,289.60 Step 5 $45.48 $7,883.20 $94,598.40 Effective 11/29/14 6 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 301 Non-exempt Code Enforcement Off Step 1 $32.45 Step 1 $33.26 Step 2 $34.15 Step 2 $35.01 Step 3 $35.95 Step 3 $36.85 Step 4 $37.84 Step 4 $38.79 Step 5 $39.84 $6,905.60 $82,867.20 Step 5 $40.83 $7,077.20 $84,926.40 306 Non-exempt Comm Tech Step 1 $34.51 Step 1 $35.37 Step 2 $36.33 Step 2 $37.24 Step 3 $38.24 Step 3 $39.20 Step 4 $40.25 Step 4 $41.26 Step 5 $42.37 $7,344.13 $88,129.60 Step 5 $43.43 $7,527.87 $90,334.40 702 Non-exempt Community Serv Offcr Step 1 $24.64 Step 1 $25.25 Step 2 $25.93 Step 2 $26.58 Step 3 $27.30 Step 3 $27.98 Step 4 $28.73 Step 4 $29.45 Step 5 $30.25 $5,243.33 $62,920.00 Step 5 $31.00 $5,373.33 $64,480.00 320 Non-exempt Community Service Officer - Lead Step 1 $26.35 Step 1 $27.01 Step 2 $27.74 Step 2 $28.43 Step 3 $29.20 Step 3 $29.93 Step 4 $30.73 Step 4 $31.50 Step 5 $32.35 $5,607.33 $67,288.00 Step 5 $33.16 $5,747.73 $68,972.80 341 Non-exempt Coor Trans Sys Mgmt Step 1 $34.87 Step 1 $35.74 Step 2 $36.70 Step 2 $37.62 Step 3 $38.64 Step 3 $39.60 Step 4 $40.67 Step 4 $41.69 Step 5 $42.81 $7,420.40 $89,044.80 Step 5 $43.88 $7,605.87 $91,270.40 3410 Non-exempt Coor Trans Sys Mgmt - S Step 1 $34.87 Step 1 $35.74 Step 2 $36.70 Step 2 $37.62 Step 3 $38.64 Step 3 $39.60 Step 4 $40.67 Step 4 $41.69 Step 5 $42.81 $7,420.40 $89,044.80 Step 5 $43.88 $7,605.87 $91,270.40 255 Non-exempt Coord Library Prog Step 1 $31.77 Step 1 $32.56 Step 2 $33.44 Step 2 $34.27 Step 3 $35.20 Step 3 $36.08 Step 4 $37.05 Step 4 $37.98 Step 5 $39.00 $6,760.00 $81,120.00 Step 5 $39.98 $6,929.87 $83,158.40 Effective 11/29/14 7 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 342 Non-exempt Coord Pub Wks Proj Step 1 $33.13 Step 1 $33.96 Step 2 $34.88 Step 2 $35.75 Step 3 $36.71 Step 3 $37.63 Step 4 $38.64 Step 4 $39.61 Step 5 $40.68 $7,051.20 $84,614.40 Step 5 $41.69 $7,226.27 $86,715.20 317 Non-exempt Coord Rec Prog Step 1 $28.45 Step 1 $29.17 Step 2 $29.95 Step 2 $30.70 Step 3 $31.53 Step 3 $32.32 Step 4 $33.19 Step 4 $34.02 Step 5 $34.94 $6,056.27 $72,675.20 Step 5 $35.81 $6,207.07 $74,484.80 343 Non-exempt Coord Util Saf & Sec Step 1 $37.64 Step 1 $38.58 Step 2 $39.62 Step 2 $40.62 Step 3 $41.71 Step 3 $42.75 Step 4 $43.91 Step 4 $45.00 Step 5 $46.22 $8,011.47 $96,137.60 Step 5 $47.37 $8,210.80 $98,529.60 3430 Non-exempt Coord Util Saf & Sec - S Step 1 $37.64 Step 1 $38.58 Step 2 $39.62 Step 2 $40.62 Step 3 $41.71 Step 3 $42.75 Step 4 $43.91 Step 4 $45.00 Step 5 $46.22 $8,011.47 $96,137.60 Step 5 $47.37 $8,210.80 $98,529.60 344 Non-exempt Coord Utility Proj Step 1 $35.77 Step 1 $36.67 Step 2 $37.66 Step 2 $38.60 Step 3 $39.64 Step 3 $40.63 Step 4 $41.73 Step 4 $42.77 Step 5 $43.92 $7,612.80 $91,353.60 Step 5 $45.02 $7,803.47 $93,641.60 3440 Non-exempt Coord Utility Proj - S Step 1 $35.77 Step 1 $36.67 Step 2 $37.66 Step 2 $38.60 Step 3 $39.64 Step 3 $40.63 Step 4 $41.73 Step 4 $42.77 Step 5 $43.92 $7,612.80 $91,353.60 Step 5 $45.02 $7,803.47 $93,641.60 242 Non-exempt Coord Zero Waste Step 1 $31.81 Step 1 $32.61 Step 2 $33.49 Step 2 $34.32 Step 3 $35.25 Step 3 $36.13 Step 4 $37.10 Step 4 $38.03 Step 5 $39.06 $6,770.40 $81,244.80 Step 5 $40.03 $6,938.53 $83,262.40 Effective 11/29/14 8 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 205 Non-exempt Court Liaison Officer Step 1 $32.07 Step 1 $32.87 Step 2 $33.76 Step 2 $34.60 Step 3 $35.54 Step 3 $36.42 Step 4 $37.41 Step 4 $38.34 Step 5 $39.37 $6,824.13 $81,889.60 Step 5 $40.36 $6,995.73 $83,948.80 214 Non-exempt Crime Analyst Step 1 $32.07 Step 1 $32.87 Step 2 $33.76 Step 2 $34.60 Step 3 $35.54 Step 3 $36.42 Step 4 $37.41 Step 4 $38.34 Step 5 $39.37 $6,824.13 $81,889.60 Step 5 $40.36 $6,995.73 $83,948.80 415 Non-exempt Cust Srv Specialist-L Step 1 $29.35 Step 1 $30.09 Step 2 $30.90 Step 2 $31.67 Step 3 $32.52 Step 3 $33.34 Step 4 $34.23 Step 4 $35.09 Step 5 $36.04 $6,246.93 $74,963.20 Step 5 $36.94 $6,402.93 $76,835.20 218 Non-exempt Cust Svc Represent Step 1 $24.96 Step 1 $25.58 Step 2 $26.27 Step 2 $26.93 Step 3 $27.65 Step 3 $28.34 Step 4 $29.11 Step 4 $29.84 Step 5 $30.64 $5,310.93 $63,731.20 Step 5 $31.41 $5,444.40 $65,332.80 217 Non-exempt Cust Svc Spec Step 1 $27.45 Step 1 $28.14 Step 2 $28.89 Step 2 $29.62 Step 3 $30.42 Step 3 $31.18 Step 4 $32.02 Step 4 $32.82 Step 5 $33.70 $5,841.33 $70,096.00 Step 5 $34.54 $5,986.93 $71,843.20 260 Non-exempt Desktop Technician Step 1 $29.92 Step 1 $30.66 Step 2 $31.49 Step 2 $32.28 Step 3 $33.15 Step 3 $33.98 Step 4 $34.89 Step 4 $35.77 Step 5 $36.73 $6,366.53 $76,398.40 Step 5 $37.65 $6,526.00 $78,312.00 514 Non-exempt Development Project Coordinator I Step 1 $25.95 Step 1 $26.60 Step 2 $27.31 Step 2 $28.00 Step 3 $28.75 Step 3 $29.47 Step 4 $30.26 Step 4 $31.02 Step 5 $31.86 $5,522.40 $66,268.80 Step 5 $32.65 $5,659.33 $67,912.00 Effective 11/29/14 9 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 515 Non-exempt Development Project Coordinator II Step 1 $29.49 Step 1 $30.22 Step 2 $31.04 Step 2 $31.81 Step 3 $32.67 Step 3 $33.49 Step 4 $34.39 Step 4 $35.25 Step 5 $36.20 $6,274.67 $75,296.00 Step 5 $37.11 $6,432.40 $77,188.80 516 Non-exempt Development Project Coordinator III Step 1 $32.52 Step 1 $33.33 Step 2 $34.23 Step 2 $35.08 Step 3 $36.03 Step 3 $36.93 Step 4 $37.92 Step 4 $38.87 Step 5 $39.92 $6,919.47 $83,033.60 Step 5 $40.92 $7,092.80 $85,113.60 533 Non-exempt Elec Asst I Step 1 $25.75 Step 1 $26.40 Step 2 $27.11 Step 2 $27.79 Step 3 $28.54 Step 3 $29.25 Step 4 $30.04 Step 4 $30.79 Step 5 $31.62 $5,480.80 $65,769.60 Step 5 $32.41 $5,617.73 $67,412.80 267 Non-exempt Elec Undgd Inspec Step 1 $32.02 Step 1 $32.82 Step 2 $33.71 Step 2 $34.55 Step 3 $35.48 Step 3 $36.37 Step 4 $37.35 Step 4 $38.28 Step 5 $39.31 $6,813.73 $81,764.80 Step 5 $40.30 $6,985.33 $83,824.00 345 Non-exempt Electric Project Engineer Step 1 $47.28 Step 1 $48.47 Step 2 $49.77 Step 2 $51.02 Step 3 $52.39 Step 3 $53.70 Step 4 $55.15 Step 4 $56.53 Step 5 $58.05 $10,062.00 $120,744.00 Step 5 $59.50 $10,313.33 $123,760.00 3450 Non-exempt Electric Project Engineer - S Step 1 $47.28 Step 1 $48.47 Step 2 $49.77 Step 2 $51.02 Step 3 $52.39 Step 3 $53.70 Step 4 $55.15 Step 4 $56.53 Step 5 $58.05 $10,062.00 $120,744.00 Step 5 $59.50 $10,313.33 $123,760.00 292 Non-exempt Electric Underground Inspector - Lead Step 1 $34.25 Step 1 $35.11 Step 2 $36.05 Step 2 $36.95 Step 3 $37.95 Step 3 $38.90 Step 4 $39.95 Step 4 $40.95 Step 5 $42.05 $7,288.67 $87,464.00 Step 5 $43.10 $7,470.67 $89,648.00 Effective 11/29/14 10 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 530 Non-exempt Electrician Step 1 $34.45 Step 1 $35.31 Step 2 $36.26 Step 2 $37.17 Step 3 $38.17 Step 3 $39.12 Step 4 $40.18 Step 4 $41.18 Step 5 $42.29 $7,330.27 $87,963.20 Step 5 $43.35 $7,514.00 $90,168.00 529 Non-exempt Electrician-Appren Step 1 $32.60 Step 1 $33.42 Step 2 $34.32 Step 2 $35.18 Step 3 $36.13 Step 3 $37.03 Step 4 $38.03 Step 4 $38.98 Step 5 $40.03 $6,938.53 $83,262.40 Step 5 $41.03 $7,111.87 $85,342.40 535 Non-exempt Electrician-Lead Step 1 $36.88 Step 1 $37.80 Step 2 $38.82 Step 2 $39.79 Step 3 $40.86 Step 3 $41.88 Step 4 $43.01 Step 4 $44.09 Step 5 $45.28 $7,848.53 $94,182.40 Step 5 $46.41 $8,044.40 $96,532.80 399 Non-exempt Emergency Med Svs Data Specialist Step 1 $26.89 Step 1 $27.57 Step 2 $28.31 Step 2 $29.02 Step 3 $29.80 Step 3 $30.54 Step 4 $31.37 Step 4 $32.15 Step 5 $33.02 $5,723.02 $68,676.19 Step 5 $33.84 $5,866.09 $70,393.10 311 Non-exempt Eng Tech I Step 1 $25.10 Step 1 $25.73 Step 2 $26.42 Step 2 $27.08 Step 3 $27.81 Step 3 $28.51 Step 4 $29.28 Step 4 $30.01 Step 5 $30.82 $5,342.13 $64,105.60 Step 5 $31.59 $5,475.60 $65,707.20 332 Non-exempt Engineer Step 1 $41.76 Step 1 $42.80 Step 2 $43.96 Step 2 $45.06 Step 3 $46.27 Step 3 $47.43 Step 4 $48.71 Step 4 $49.92 Step 5 $51.27 $8,886.80 $106,641.60 Step 5 $52.55 $9,108.67 $109,304.00 323 Non-exempt Engr Tech II Step 1 $27.16 Step 1 $27.84 Step 2 $28.59 Step 2 $29.31 Step 3 $30.10 Step 3 $30.85 Step 4 $31.68 Step 4 $32.47 Step 5 $33.35 $5,780.67 $69,368.00 Step 5 $34.18 $5,924.53 $71,094.40 Effective 11/29/14 11 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 319 Non-exempt Engr Tech III Step 1 $30.32 Step 1 $31.08 Step 2 $31.92 Step 2 $32.71 Step 3 $33.60 Step 3 $34.43 Step 4 $35.36 Step 4 $36.25 Step 5 $37.22 $6,451.47 $77,417.60 Step 5 $38.16 $6,614.40 $79,372.80 257 Non-exempt Environmental Spec Step 1 $35.70 Step 1 $36.59 Step 2 $37.58 Step 2 $38.52 Step 3 $39.56 Step 3 $40.55 Step 4 $41.64 Step 4 $42.68 Step 5 $43.83 $7,597.20 $91,166.40 Step 5 $44.93 $7,787.87 $93,454.40 211 Non-exempt Equip Maint Serv Per Step 1 $21.49 Step 1 $22.03 Step 2 $22.62 Step 2 $23.19 Step 3 $23.81 Step 3 $24.41 Step 4 $25.07 Step 4 $25.69 Step 5 $26.39 $4,574.27 $54,891.20 Step 5 $27.05 $4,688.67 $56,264.00 396 Non-exempt Equip Operator Step 1 $26.05 Step 1 $26.71 Step 2 $27.43 Step 2 $28.11 Step 3 $28.87 Step 3 $29.59 Step 4 $30.39 Step 4 $31.15 Step 5 $31.99 $5,544.93 $66,539.20 Step 5 $32.79 $5,683.60 $68,203.20 397 Non-exempt Equip Operator - Lead Step 1 $27.88 Step 1 $28.58 Step 2 $29.35 Step 2 $30.08 Step 3 $30.89 Step 3 $31.67 Step 4 $32.52 Step 4 $33.33 Step 5 $34.23 $5,933.20 $71,198.40 Step 5 $35.09 $6,082.27 $72,987.20 250 Non-exempt Equip Parts Tech Step 1 $23.36 Step 1 $23.95 Step 2 $24.59 Step 2 $25.21 Step 3 $25.89 Step 3 $26.53 Step 4 $27.25 Step 4 $27.93 Step 5 $28.68 $4,971.20 $59,654.40 Step 5 $29.40 $5,096.00 $61,152.00 203 Non-exempt Facilities Asst Step 1 $21.61 Step 1 $22.15 Step 2 $22.75 Step 2 $23.31 Step 3 $23.94 Step 3 $24.54 Step 4 $25.20 Step 4 $25.83 Step 5 $26.53 $4,598.53 $55,182.40 Step 5 $27.19 $4,712.93 $56,555.20 Effective 11/29/14 12 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 374 Non-exempt Facilities Carpenter Step 1 $28.17 Step 1 $28.88 Step 2 $29.66 Step 2 $30.40 Step 3 $31.22 Step 3 $32.00 Step 4 $32.86 Step 4 $33.68 Step 5 $34.59 $5,995.60 $71,947.20 Step 5 $35.45 $6,144.67 $73,736.00 375 Non-exempt Facilities Elect Step 1 $28.54 Step 1 $29.25 Step 2 $30.04 Step 2 $30.79 Step 3 $31.62 Step 3 $32.41 Step 4 $33.29 Step 4 $34.12 Step 5 $35.04 $6,073.60 $72,883.20 Step 5 $35.91 $6,224.40 $74,692.80 373 Non-exempt Facilities Maint-L Step 1 $36.41 Step 1 $37.32 Step 2 $38.32 Step 2 $39.28 Step 3 $40.34 Step 3 $41.35 Step 4 $42.46 Step 4 $43.52 Step 5 $44.70 $7,748.00 $92,976.00 Step 5 $45.81 $7,940.40 $95,284.80 376 Non-exempt Facilities Mech Step 1 $28.17 Step 1 $28.88 Step 2 $29.66 Step 2 $30.40 Step 3 $31.22 Step 3 $32.00 Step 4 $32.86 Step 4 $33.68 Step 5 $34.59 $5,995.60 $71,947.20 Step 5 $35.45 $6,144.67 $73,736.00 376 Non-exempt Facilities Technician Step 1 $31.07 Step 1 $31.85 Step 2 $32.71 Step 2 $33.53 Step 3 $34.43 Step 3 $35.29 Step 4 $36.24 Step 4 $37.15 Step 5 $38.15 $6,612.67 $79,352.00 Step 5 $39.10 $6,777.98 $81,335.80 377 Non-exempt Facilities Painter Step 1 $28.17 Step 1 $28.88 Step 2 $29.66 Step 2 $30.40 Step 3 $31.22 Step 3 $32.00 Step 4 $32.86 Step 4 $33.68 Step 5 $34.59 $5,995.60 $71,947.20 Step 5 $35.45 $6,144.67 $73,736.00 462 Non-exempt Field Service Pers WGW Step 1 $26.11 Step 1 $26.76 Step 2 $27.48 Step 2 $28.17 Step 3 $28.93 Step 3 $29.65 Step 4 $30.45 Step 4 $31.21 Step 5 $32.05 $5,555.33 $66,664.00 Step 5 $32.85 $5,694.00 $68,328.00 Effective 11/29/14 13 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 383 Non-exempt Fleet Svcs Coord Step 1 $27.84 Step 1 $28.54 Step 2 $29.31 Step 2 $30.04 Step 3 $30.85 Step 3 $31.62 Step 4 $32.47 Step 4 $33.28 Step 5 $34.18 $5,924.53 $71,094.40 Step 5 $35.03 $6,071.87 $72,862.40 489 Non-exempt Gas System Tech Step 1 $28.44 Step 1 $29.15 Step 2 $29.94 Step 2 $30.68 Step 3 $31.51 Step 3 $32.30 Step 4 $33.17 Step 4 $34.00 Step 5 $34.91 $6,051.07 $72,612.80 Step 5 $35.79 $6,203.60 $74,443.20 463 Non-exempt Gas System Tech II Step 1 $29.87 Step 1 $30.61 Step 2 $31.44 Step 2 $32.22 Step 3 $33.09 Step 3 $33.92 Step 4 $34.83 Step 4 $35.70 Step 5 $36.67 $6,356.13 $76,273.60 Step 5 $37.58 $6,513.87 $78,166.40 398 Non-exempt Geographic Inform Syst Specialist Step 1 $38.36 Step 1 $39.32 Step 2 $40.38 Step 2 $41.39 Step 3 $42.50 Step 3 $43.57 Step 4 $44.74 Step 4 $45.86 Step 5 $47.09 $8,162.27 $97,947.20 Step 5 $48.27 $8,366.80 $100,401.60 390 Non-exempt Heavy Equip Oper Step 1 $29.51 Step 1 $30.24 Step 2 $31.06 Step 2 $31.84 Step 3 $32.69 Step 3 $33.51 Step 4 $34.41 Step 4 $35.27 Step 5 $36.23 $6,279.87 $75,358.40 Step 5 $37.13 $6,435.87 $77,230.40 391 Non-exempt Heavy Equip Oper-L Step 1 $31.56 Step 1 $32.35 Step 2 $33.22 Step 2 $34.05 Step 3 $34.97 Step 3 $35.84 Step 4 $36.81 Step 4 $37.73 Step 5 $38.75 $6,716.67 $80,600.00 Step 5 $39.72 $6,884.80 $82,617.60 508 Non-exempt Ind Waste Inspec Step 1 $29.99 Step 1 $30.74 Step 2 $31.57 Step 2 $32.36 Step 3 $33.24 Step 3 $34.07 Step 4 $34.98 Step 4 $35.86 Step 5 $36.83 $6,383.87 $76,606.40 Step 5 $37.75 $6,543.33 $78,520.00 Effective 11/29/14 14 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 258 Non-exempt Ind Waste Invtgtr Step 1 $33.71 Step 1 $34.55 Step 2 $35.48 Step 2 $36.37 Step 3 $37.35 Step 3 $38.28 Step 4 $39.31 Step 4 $40.30 Step 5 $41.38 $7,172.53 $86,070.40 Step 5 $42.42 $7,352.80 $88,233.60 365 Non-exempt Industrial Waste Technician Step 1 $27.08 Step 1 $27.76 Step 2 $28.51 Step 2 $29.22 Step 3 $30.01 Step 3 $30.76 Step 4 $31.59 Step 4 $32.38 Step 5 $33.25 $5,763.33 $69,160.00 Step 5 $34.08 $5,907.20 $70,886.40 227 Non-exempt Inspector, Field Svc Step 1 $32.63 Step 1 $33.44 Step 2 $34.34 Step 2 $35.20 Step 3 $36.15 Step 3 $37.05 Step 4 $38.05 Step 4 $39.00 Step 5 $40.06 $6,943.73 $83,324.80 Step 5 $41.06 $7,117.07 $85,404.80 308 Non-exempt Instrum Elec Step 1 $32.48 Step 1 $33.29 Step 2 $34.19 Step 2 $35.04 Step 3 $35.99 Step 3 $36.89 Step 4 $37.88 Step 4 $38.83 Step 5 $39.87 $6,910.80 $82,929.60 Step 5 $40.87 $7,084.13 $85,009.60 293 Non-exempt Junior Museum & Zoo Educator Step 1 $25.46 Step 1 $26.09 Step 2 $26.80 Step 2 $27.47 Step 3 $28.21 Step 3 $28.91 Step 4 $29.69 Step 4 $30.43 Step 5 $31.25 $5,416.67 $65,000.00 Step 5 $32.03 $5,551.87 $66,622.40 503 Non-exempt Laboratory Tech Wqc Step 1 $30.15 Step 1 $30.91 Step 2 $31.74 Step 2 $32.53 Step 3 $33.41 Step 3 $34.25 Step 4 $35.17 Step 4 $36.05 Step 5 $37.02 $6,416.80 $77,001.60 Step 5 $37.95 $6,578.00 $78,936.00 413 Non-exempt Landfill Technician Step 1 $33.08 Step 1 $33.90 Step 2 $34.82 Step 2 $35.69 Step 3 $36.65 Step 3 $37.57 Step 4 $38.58 Step 4 $39.54 Step 5 $40.61 $7,039.07 $84,468.80 Step 5 $41.62 $7,214.13 $86,569.60 Effective 11/29/14 15 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 254 Non-exempt Librarian Step 1 $25.65 Step 1 $26.29 Step 2 $27.00 Step 2 $27.68 Step 3 $28.42 Step 3 $29.13 Step 4 $29.92 Step 4 $30.67 Step 5 $31.49 $5,458.27 $65,499.20 Step 5 $32.28 $5,595.20 $67,142.40 252 Non-exempt Library Associate Step 1 $23.57 Step 1 $24.16 Step 2 $24.81 Step 2 $25.43 Step 3 $26.12 Step 3 $26.77 Step 4 $27.49 Step 4 $28.18 Step 5 $28.94 $5,016.27 $60,195.20 Step 5 $29.66 $5,141.07 $61,692.80 222 Non-exempt Library Asst Step 1 $20.43 Step 1 $20.94 Step 2 $21.50 Step 2 $22.04 Step 3 $22.64 Step 3 $23.20 Step 4 $23.83 Step 4 $24.42 Step 5 $25.08 $4,347.20 $52,166.40 Step 5 $25.71 $4,456.40 $53,476.80 253 Non-exempt Library Specialist Step 1 $22.29 Step 1 $22.85 Step 2 $23.46 Step 2 $24.05 Step 3 $24.70 Step 3 $25.32 Step 4 $26.00 Step 4 $26.65 Step 5 $27.37 $4,744.13 $56,929.60 Step 5 $28.05 $4,862.00 $58,344.00 541 Non-exempt Lineper/Cable Spl Step 1 $40.53 Step 1 $41.54 Step 2 $42.66 Step 2 $43.73 Step 3 $44.91 Step 3 $46.03 Step 4 $47.27 Step 4 $48.46 Step 5 $49.76 $8,625.07 $103,500.80 Step 5 $51.01 $8,841.73 $106,100.80 542 Non-exempt Lineper/Cable Spl-L Step 1 $43.38 Step 1 $44.47 Step 2 $45.67 Step 2 $46.81 Step 3 $48.07 Step 3 $49.27 Step 4 $50.60 Step 4 $51.86 Step 5 $53.26 $9,231.73 $110,780.80 Step 5 $54.59 $9,462.27 $113,547.20 531 Non-exempt Lineperson/Cable Spl-T Step 1 $38.61 Step 1 $39.57 Step 2 $40.64 Step 2 $41.66 Step 3 $42.78 Step 3 $43.85 Step 4 $45.03 Step 4 $46.16 Step 5 $47.40 $8,216.00 $98,592.00 Step 5 $48.59 $8,422.27 $101,067.20 Effective 11/29/14 16 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 532 Non-exempt Lineperson/Cable Spl-TL Step 1 $41.30 Step 1 $42.33 Step 2 $43.47 Step 2 $44.56 Step 3 $45.76 Step 3 $46.91 Step 4 $48.17 Step 4 $49.37 Step 5 $50.71 $8,789.73 $105,476.80 Step 5 $51.97 $9,008.13 $108,097.60 528 Non-exempt Lnper/Cbl Spl-Appren Step 1 $34.82 Step 1 $35.69 Step 2 $36.65 Step 2 $37.57 Step 3 $38.58 Step 3 $39.54 Step 4 $40.61 Step 4 $41.63 Step 5 $42.75 $7,410.00 $88,920.00 Step 5 $43.82 $7,595.47 $91,145.60 213 Non-exempt Mailing Svcs Spec Step 1 $19.65 Step 1 $20.14 Step 2 $20.68 Step 2 $21.20 Step 3 $21.77 Step 3 $22.32 Step 4 $22.92 Step 4 $23.49 Step 5 $24.12 $4,180.80 $50,169.60 Step 5 $24.73 $4,286.53 $51,438.40 505 Non-exempt Maint Mech Step 1 $33.18 Step 1 $34.01 Step 2 $34.93 Step 2 $35.80 Step 3 $36.77 Step 3 $37.69 Step 4 $38.70 Step 4 $39.67 Step 5 $40.74 $7,061.60 $84,739.20 Step 5 $41.76 $7,238.40 $86,860.80 291 Non-exempt Maintenance Mechanic-Welding Step 1 $31.38 Step 1 $32.16 Step 2 $33.03 Step 2 $33.86 Step 3 $34.77 Step 3 $35.64 Step 4 $36.60 Step 4 $37.51 Step 5 $38.53 $6,678.53 $80,142.40 Step 5 $39.49 $6,844.93 $82,139.20 346 Non-exempt Management Assistant Step 1 $29.21 Step 1 $29.94 Step 2 $30.75 Step 2 $31.52 Step 3 $32.37 Step 3 $33.18 Step 4 $34.07 Step 4 $34.92 Step 5 $35.86 $6,215.73 $74,588.80 Step 5 $36.76 $6,371.73 $76,460.80 3460 Non-exempt Management Assistant - S Step 1 $29.21 Step 1 $29.94 Step 2 $30.75 Step 2 $31.52 Step 3 $32.37 Step 3 $33.18 Step 4 $34.07 Step 4 $34.92 Step 5 $35.86 $6,215.73 $74,588.80 Step 5 $36.76 $6,371.73 $76,460.80 Effective 11/29/14 17 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 216 Non-exempt Marketing Eng Step 1 $41.76 Step 1 $42.80 Step 2 $43.96 Step 2 $45.06 Step 3 $46.27 Step 3 $47.43 Step 4 $48.71 Step 4 $49.92 Step 5 $51.27 $8,886.80 $106,641.60 Step 5 $52.55 $9,108.67 $109,304.00 241 Non-exempt Meter Reader Step 1 $23.33 Step 1 $23.91 Step 2 $24.56 Step 2 $25.17 Step 3 $25.85 Step 3 $26.50 Step 4 $27.21 Step 4 $27.89 Step 5 $28.64 $4,964.27 $59,571.20 Step 5 $29.36 $5,089.07 $61,068.80 240 Non-exempt Meter Reader-Lead Step 1 $24.96 Step 1 $25.58 Step 2 $26.27 Step 2 $26.93 Step 3 $27.65 Step 3 $28.34 Step 4 $29.11 Step 4 $29.84 Step 5 $30.64 $5,310.93 $63,731.20 Step 5 $31.41 $5,444.40 $65,332.80 369 Non-exempt Meter Shop Lead Step 1 $27.71 Step 1 $28.40 Step 2 $29.17 Step 2 $29.89 Step 3 $30.70 Step 3 $31.47 Step 4 $32.32 Step 4 $33.12 Step 5 $34.02 $5,896.80 $70,761.60 Step 5 $34.87 $6,044.13 $72,529.60 552 Non-exempt Metering Technician Step 1 $38.22 Step 1 $39.17 Step 2 $40.23 Step 2 $41.23 Step 3 $42.35 Step 3 $43.40 Step 4 $44.57 Step 4 $45.69 Step 5 $46.92 $8,132.80 $97,593.60 Step 5 $48.09 $8,335.60 $100,027.20 551 Non-exempt Metering Technician – Apprentice Step 1 $36.16 Step 1 $37.07 Step 2 $38.07 Step 2 $39.02 Step 3 $40.07 Step 3 $41.07 Step 4 $42.18 Step 4 $43.24 Step 5 $44.40 $7,696.00 $92,352.00 Step 5 $45.51 $7,888.40 $94,660.80 553 Non-exempt Metering Technician – Lead Step 1 $40.89 Step 1 $41.91 Step 2 $43.04 Step 2 $44.12 Step 3 $45.31 Step 3 $46.44 Step 4 $47.69 Step 4 $48.89 Step 5 $50.20 $8,701.33 $104,416.00 Step 5 $51.46 $8,919.73 $107,036.80 Effective 11/29/14 18 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 384 Non-exempt Mobile Service Tech Step 1 $33.07 Step 1 $33.90 Step 2 $34.81 Step 2 $35.68 Step 3 $36.65 Step 3 $37.56 Step 4 $38.58 Step 4 $39.54 Step 5 $40.61 $7,039.07 $84,468.80 Step 5 $41.62 $7,214.13 $86,569.60 381 Non-exempt Motor Equip Mech-L Step 1 $33.70 Step 1 $34.54 Step 2 $35.47 Step 2 $36.36 Step 3 $37.34 Step 3 $38.27 Step 4 $39.30 Step 4 $40.28 Step 5 $41.37 $7,170.80 $86,049.60 Step 5 $42.40 $7,349.33 $88,192.00 286 Non-exempt Motor Equipment Mechanic I Step 1 $29.17 Step 1 $29.90 Step 2 $30.70 Step 2 $31.47 Step 3 $32.32 Step 3 $33.13 Step 4 $34.02 Step 4 $34.87 Step 5 $35.81 $6,207.07 $74,484.80 Step 5 $36.71 $6,363.07 $76,356.80 287 Non-exempt Motor Equipment Mechanic II Step 1 $31.50 Step 1 $32.28 Step 2 $33.16 Step 2 $33.98 Step 3 $34.90 Step 3 $35.77 Step 4 $36.74 Step 4 $37.66 Step 5 $38.67 $6,702.80 $80,433.60 Step 5 $39.64 $6,870.93 $82,451.20 230 Non-exempt Offset Equip Op Step 1 $22.28 Step 1 $22.84 Step 2 $23.45 Step 2 $24.04 Step 3 $24.69 Step 3 $25.31 Step 4 $25.99 Step 4 $26.64 Step 5 $27.36 $4,741.78 $56,901.31 Step 5 $28.04 $4,860.32 $58,323.84 543 Non-exempt Overhead Underground Troubleman Step 1 $40.56 Step 1 $41.57 Step 2 $42.69 Step 2 $43.76 Step 3 $44.94 Step 3 $46.06 Step 4 $47.30 Step 4 $48.49 Step 5 $49.79 $8,630.27 $103,563.20 Step 5 $51.04 $8,846.93 $106,163.20 452 Non-exempt Park Maint - Lead Step 1 $28.56 Step 1 $29.27 Step 2 $30.06 Step 2 $30.81 Step 3 $31.64 Step 3 $32.43 Step 4 $33.31 Step 4 $34.14 Step 5 $35.06 $6,077.07 $72,924.80 Step 5 $35.93 $6,227.87 $74,734.40 Effective 11/29/14 19 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 451 Non-exempt Park Maint Person Step 1 $24.63 Step 1 $25.24 Step 2 $25.92 Step 2 $26.57 Step 3 $27.29 Step 3 $27.97 Step 4 $28.72 Step 4 $29.44 Step 5 $30.24 $5,241.60 $62,899.20 Step 5 $30.99 $5,371.60 $64,459.20 281 Non-exempt Park Ranger Step 1 $27.66 Step 1 $28.35 Step 2 $29.12 Step 2 $29.85 Step 3 $30.65 Step 3 $31.42 Step 4 $32.26 Step 4 $33.07 Step 5 $33.96 $5,886.40 $70,636.80 Step 5 $34.81 $6,033.73 $72,404.80 243 Non-exempt Parking Enf Off Step 1 $23.23 Step 1 $23.81 Step 2 $24.46 Step 2 $25.07 Step 3 $25.74 Step 3 $26.39 Step 4 $27.10 Step 4 $27.78 Step 5 $28.52 $4,943.47 $59,321.60 Step 5 $29.24 $5,068.27 $60,819.20 282 Non-exempt Parking Enf Off-L Step 1 $24.85 Step 1 $25.47 Step 2 $26.16 Step 2 $26.81 Step 3 $27.53 Step 3 $28.22 Step 4 $28.98 Step 4 $29.71 Step 5 $30.51 $5,288.40 $63,460.80 Step 5 $31.27 $5,420.13 $65,041.60 460 Non-exempt Parks/Golf Crew-Lead Step 1 $26.79 Step 1 $27.46 Step 2 $28.20 Step 2 $28.91 Step 3 $29.69 Step 3 $30.43 Step 4 $31.25 Step 4 $32.03 Step 5 $32.89 $5,700.93 $68,411.20 Step 5 $33.72 $5,844.80 $70,137.60 348 Non-exempt Payroll Analyst Step 1 $28.01 Step 1 $28.71 Step 2 $29.49 Step 2 $30.23 Step 3 $31.04 Step 3 $31.82 Step 4 $32.67 Step 4 $33.49 Step 5 $34.39 $5,960.93 $71,531.20 Step 5 $35.25 $6,110.00 $73,320.00 3480 Non-exempt Payroll Analyst - S Step 1 $28.01 Step 1 $28.71 Step 2 $29.49 Step 2 $30.23 Step 3 $31.04 Step 3 $31.82 Step 4 $32.67 Step 4 $33.49 Step 5 $34.39 $5,960.93 $71,531.20 Step 5 $35.25 $6,110.00 $73,320.00 Effective 11/29/14 20 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 352 Non-exempt Planner Step 1 $36.68 Step 1 $37.60 Step 2 $38.61 Step 2 $39.58 Step 3 $40.64 Step 3 $41.66 Step 4 $42.78 Step 4 $43.85 Step 5 $45.04 $7,806.93 $93,683.20 Step 5 $46.16 $8,001.07 $96,012.80 347 Non-exempt Planning Arborist Step 1 $39.52 Step 1 $40.50 Step 2 $41.60 Step 2 $42.64 Step 3 $43.79 Step 3 $44.88 Step 4 $46.09 Step 4 $47.24 Step 5 $48.52 $8,410.13 $100,921.60 Step 5 $49.73 $8,619.87 $103,438.40 3470 Non-exempt Planning Arborist - S Step 1 $39.52 Step 1 $40.50 Step 2 $41.60 Step 2 $42.64 Step 3 $43.79 Step 3 $44.88 Step 4 $46.09 Step 4 $47.24 Step 5 $48.52 $8,410.13 $100,921.60 Step 5 $49.73 $8,619.87 $103,438.40 304 Non-exempt Plans Check Engr Step 1 $40.54 Step 1 $41.56 Step 2 $42.68 Step 2 $43.75 Step 3 $44.93 Step 3 $46.05 Step 4 $47.29 Step 4 $48.47 Step 5 $49.78 $8,628.53 $103,542.40 Step 5 $51.02 $8,843.47 $106,121.60 321 Non-exempt Police Records Specialist - Lead Step 1 $25.51 Step 1 $26.15 Step 2 $26.85 Step 2 $27.53 Step 3 $28.27 Step 3 $28.97 Step 4 $29.76 Step 4 $30.50 Step 5 $31.32 $5,428.80 $65,145.60 Step 5 $32.10 $5,564.00 $66,768.00 313 Non-exempt Police Records Specialist I Step 1 $22.65 Step 1 $23.21 Step 2 $23.84 Step 2 $24.44 Step 3 $25.09 Step 3 $25.72 Step 4 $26.41 Step 4 $27.07 Step 5 $27.80 $4,818.67 $57,824.00 Step 5 $28.50 $4,940.00 $59,280.00 314 Non-exempt Police Records Specialist II Step 1 $23.84 Step 1 $24.44 Step 2 $25.10 Step 2 $25.72 Step 3 $26.42 Step 3 $27.08 Step 4 $27.81 Step 4 $28.50 Step 5 $29.27 $5,073.47 $60,881.60 Step 5 $30.00 $5,200.00 $62,400.00 Effective 11/29/14 21 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 246 Non-exempt Power Engr Step 1 $44.58 Step 1 $45.70 Step 2 $46.93 Step 2 $48.10 Step 3 $49.40 Step 3 $50.63 Step 4 $52.00 Step 4 $53.30 Step 5 $54.74 $9,488.27 $113,859.20 Step 5 $56.10 $9,724.00 $116,688.00 270 Non-exempt Prod Arts/Sci Prog Step 1 $30.85 Step 1 $31.62 Step 2 $32.47 Step 2 $33.28 Step 3 $34.18 Step 3 $35.03 Step 4 $35.98 Step 4 $36.88 Step 5 $37.87 $6,564.13 $78,769.60 Step 5 $38.82 $6,728.80 $80,745.60 232 Non-exempt Prog-Analyst Step 1 $36.92 Step 1 $37.84 Step 2 $38.86 Step 2 $39.83 Step 3 $40.91 Step 3 $41.93 Step 4 $43.06 Step 4 $44.14 Step 5 $45.32 $7,855.47 $94,265.60 Step 5 $46.46 $8,053.07 $96,636.80 231 Non-exempt Program Analyst Step 1 $39.46 Step 1 $40.45 Step 2 $41.54 Step 2 $42.58 Step 3 $43.73 Step 3 $44.82 Step 4 $46.03 Step 4 $47.18 Step 5 $48.45 $8,398.00 $100,776.00 Step 5 $49.66 $8,607.73 $103,292.80 265 Non-exempt Program Assistant Step 1 $23.99 Step 1 $24.59 Step 2 $25.26 Step 2 $25.89 Step 3 $26.59 Step 3 $27.25 Step 4 $27.98 Step 4 $28.68 Step 5 $29.46 $5,106.40 $61,276.80 Step 5 $30.19 $5,232.93 $62,795.20 302 Non-exempt Program Assistant I Step 1 $25.46 Step 1 $26.09 Step 2 $26.80 Step 2 $27.47 Step 3 $28.21 Step 3 $28.91 Step 4 $29.69 Step 4 $30.43 Step 5 $31.25 $5,416.67 $65,000.00 Step 5 $32.03 $5,551.87 $66,622.40 303 Non-exempt Program Assistant II Step 1 $27.36 Step 1 $28.04 Step 2 $28.80 Step 2 $29.52 Step 3 $30.31 Step 3 $31.07 Step 4 $31.91 Step 4 $32.71 Step 5 $33.59 $5,822.27 $69,867.20 Step 5 $34.43 $5,967.87 $71,614.40 Effective 11/29/14 22 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 368 Non-exempt Program Coordinator Step 1 $26.64 Step 1 $27.30 Step 2 $28.04 Step 2 $28.74 Step 3 $29.51 Step 3 $30.25 Step 4 $31.07 Step 4 $31.84 Step 5 $32.70 $5,668.00 $68,016.00 Step 5 $33.52 $5,810.13 $69,721.60 349 Non-exempt Project Engineer Step 1 $44.94 Step 1 $46.06 Step 2 $47.31 Step 2 $48.49 Step 3 $49.80 Step 3 $51.04 Step 4 $52.42 Step 4 $53.73 Step 5 $55.18 $9,564.53 $114,774.40 Step 5 $56.56 $9,803.73 $117,644.80 3490 Non-exempt Project Engineer - S Step 1 $44.94 Step 1 $46.06 Step 2 $47.31 Step 2 $48.49 Step 3 $49.80 Step 3 $51.04 Step 4 $52.42 Step 4 $53.73 Step 5 $55.18 $9,564.53 $114,774.40 Step 5 $56.56 $9,803.73 $117,644.80 209 Non-exempt Property Evid Tech Step 1 $24.65 Step 1 $25.27 Step 2 $25.95 Step 2 $26.60 Step 3 $27.32 Step 3 $28.00 Step 4 $28.76 Step 4 $29.47 Step 5 $30.27 $5,246.80 $62,961.60 Step 5 $31.03 $5,378.53 $64,542.40 238 Non-exempt Pub Safety Disp-Flex Step 1 $26.49 Step 1 $27.15 Step 2 $27.88 Step 2 $28.58 Step 3 $29.35 Step 3 $30.08 Step 4 $30.89 Step 4 $31.66 Step 5 $32.52 $5,636.80 $67,641.60 Step 5 $33.33 $5,777.20 $69,326.40 315 Non-exempt Public Safety Dispatcher - Lead Step 1 $35.47 Step 1 $36.35 Step 2 $37.33 Step 2 $38.27 Step 3 $39.30 Step 3 $40.28 Step 4 $41.37 Step 4 $42.40 Step 5 $43.54 $7,546.93 $90,563.20 Step 5 $44.63 $7,735.87 $92,830.40 Step 6 $44.63 Step 6 $45.75 Step 7 $45.75 Step 7 $46.89 298 Non-exempt Public Safety Dispatcher I Step 1 $30.01 Step 1 $30.76 Step 2 $31.59 Step 2 $32.38 Effective 11/29/14 23 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title Step 3 $33.25 Step 3 $34.08 Step 4 $35.00 Step 4 $35.88 Step 5 $36.84 $6,385.60 $76,627.20 Step 5 $37.76 $6,545.07 $78,540.80 Step 6 $37.76 Step 6 $38.71 Step 7 $38.71 Step 7 $39.68 316 Non-exempt Public Safety Dispatcher II Step 1 $31.60 Step 1 $32.39 Step 2 $33.26 Step 2 $34.09 Step 3 $35.01 Step 3 $35.88 Step 4 $36.85 Step 4 $37.77 Step 5 $38.79 $6,723.60 $80,683.20 Step 5 $39.76 $6,891.73 $82,700.80 Step 6 $39.76 Step 6 $40.75 Step 7 $40.75 Step 7 $41.77 262 Non-exempt Resource Planner Step 1 $45.35 Step 1 $46.49 Step 2 $47.74 Step 2 $48.93 Step 3 $50.25 Step 3 $51.51 Step 4 $52.90 Step 4 $54.22 Step 5 $55.68 $9,651.20 $115,814.40 Step 5 $57.07 $9,892.13 $118,705.60 366 Non-exempt Restoration Lead Step 1 $31.56 Step 1 $32.35 Step 2 $33.22 Step 2 $34.05 Step 3 $34.97 Step 3 $35.84 Step 4 $36.81 Step 4 $37.73 Step 5 $38.74 $6,714.93 $80,579.20 Step 5 $39.71 $6,883.07 $82,596.80 554 Non-exempt SCADA Technologist Step 1 $44.86 Step 1 $45.98 Step 2 $47.22 Step 2 $48.40 Step 3 $49.71 Step 3 $50.95 Step 4 $52.33 Step 4 $53.63 Step 5 $55.08 $9,547.20 $114,566.40 Step 5 $56.46 $9,786.40 $117,436.80 385 Non-exempt Senior Fleet Services Coordinator Step 1 $31.97 Step 1 $32.77 Step 2 $33.65 Step 2 $34.49 Step 3 $35.42 Step 3 $36.31 Step 4 $37.29 Step 4 $38.22 Step 5 $39.25 $6,803.33 $81,640.00 Step 5 $40.23 $6,973.20 $83,678.40 461 Non-exempt Sprinkler Sys Repr Step 1 $25.05 Step 1 $25.67 Step 2 $26.37 Step 2 $27.02 Step 3 $27.75 Step 3 $28.45 Step 4 $29.21 Step 4 $29.94 Step 5 $30.75 $5,330.00 $63,960.00 Step 5 $31.52 $5,463.47 $65,561.60 Effective 11/29/14 24 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 360 Non-exempt Sr Buyer Step 1 $33.50 Step 1 $34.33 Step 2 $35.26 Step 2 $36.14 Step 3 $37.12 Step 3 $38.04 Step 4 $39.07 Step 4 $40.05 Step 5 $41.13 $7,129.20 $85,550.40 Step 5 $42.15 $7,306.00 $87,672.00 3600 Non-exempt Sr Buyer - S Step 1 $33.50 Step 1 $34.33 Step 2 $35.26 Step 2 $36.14 Step 3 $37.12 Step 3 $38.04 Step 4 $39.07 Step 4 $40.05 Step 5 $41.13 $7,129.20 $85,550.40 Step 5 $42.15 $7,306.00 $87,672.00 224 Non-exempt Sr Chemist Step 1 $37.47 Step 1 $38.41 Step 2 $39.44 Step 2 $40.43 Step 3 $41.52 Step 3 $42.56 Step 4 $43.70 Step 4 $44.80 Step 5 $46.00 $7,973.33 $95,680.00 Step 5 $47.15 $8,172.67 $98,072.00 544 Non-exempt Senior Industrial Waste Investigator Step 1 $36.06 Step 1 $36.96 Step 2 $37.96 Step 2 $38.91 Step 3 $39.96 Step 3 $40.96 Step 4 $42.06 Step 4 $43.11 Step 5 $44.28 $7,675.20 $92,102.40 Step 5 $45.38 $7,865.87 $94,390.40 512 Non-exempt Sr Instrum Elect Step 1 $35.47 Step 1 $36.36 Step 2 $37.34 Step 2 $38.27 Step 3 $39.31 Step 3 $40.29 Step 4 $41.37 Step 4 $42.41 Step 5 $43.55 $7,548.67 $90,584.00 Step 5 $44.64 $7,737.60 $92,851.20 251 Non-exempt Sr Librarian Step 1 $29.13 Step 1 $29.86 Step 2 $30.66 Step 2 $31.43 Step 3 $32.28 Step 3 $33.09 Step 4 $33.98 Step 4 $34.83 Step 5 $35.77 $6,200.13 $74,401.60 Step 5 $36.66 $6,354.40 $76,252.80 504 Non-exempt Sr Mech Step 1 $35.68 Step 1 $36.57 Step 2 $37.55 Step 2 $38.49 Step 3 $39.53 Step 3 $40.52 Step 4 $41.61 Step 4 $42.65 Step 5 $43.80 $7,592.00 $91,104.00 Step 5 $44.90 $7,782.67 $93,392.00 Effective 11/29/14 25 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 361 Non-exempt Sr Mkt Analyst Step 1 $41.61 Step 1 $42.65 Step 2 $43.80 Step 2 $44.90 Step 3 $46.11 Step 3 $47.26 Step 4 $48.54 Step 4 $49.75 Step 5 $51.09 $8,855.60 $106,267.20 Step 5 $52.37 $9,077.47 $108,929.60 3610 Non-exempt Sr Mkt Analyst - S Step 1 $41.61 Step 1 $42.65 Step 2 $43.80 Step 2 $44.90 Step 3 $46.11 Step 3 $47.26 Step 4 $48.54 Step 4 $49.75 Step 5 $51.09 $8,855.60 $106,267.20 Step 5 $52.37 $9,077.47 $108,929.60 506 Non-exempt Sr Operator Wqc Step 1 $36.08 Step 1 $36.98 Step 2 $37.98 Step 2 $38.93 Step 3 $39.98 Step 3 $40.98 Step 4 $42.08 Step 4 $43.14 Step 5 $44.30 $7,678.67 $92,144.00 Step 5 $45.41 $7,871.07 $94,452.80 318 Non-exempt Sr Planner Step 1 $42.38 Step 1 $43.44 Step 2 $44.61 Step 2 $45.72 Step 3 $46.96 Step 3 $48.13 Step 4 $49.43 Step 4 $50.66 Step 5 $52.03 $9,018.53 $108,222.40 Step 5 $53.33 $9,243.87 $110,926.40 280 Non-exempt Sr Ranger Step 1 $30.61 Step 1 $31.38 Step 2 $32.22 Step 2 $33.03 Step 3 $33.92 Step 3 $34.77 Step 4 $35.71 Step 4 $36.60 Step 5 $37.59 $6,515.60 $78,187.20 Step 5 $38.52 $6,676.80 $80,121.60 261 Non-exempt Sr Util Field Svc Rep Step 1 $34.16 Step 1 $35.01 Step 2 $35.95 Step 2 $36.85 Step 3 $37.85 Step 3 $38.79 Step 4 $39.84 Step 4 $40.83 Step 5 $41.93 $7,267.87 $87,214.40 Step 5 $42.98 $7,449.87 $89,398.40 501 Non-exempt Sr Water Sys Oper Step 1 $36.08 Step 1 $36.98 Step 2 $37.98 Step 2 $38.93 Step 3 $39.98 Step 3 $40.98 Step 4 $42.08 Step 4 $43.14 Step 5 $44.30 $7,678.67 $92,144.00 Step 5 $45.41 $7,871.07 $94,452.80 Effective 11/29/14 26 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 405 Non-exempt St Maint Asst Step 1 $22.41 Step 1 $22.97 Step 2 $23.59 Step 2 $24.18 Step 3 $24.83 Step 3 $25.45 Step 4 $26.13 Step 4 $26.79 Step 5 $27.51 $4,768.40 $57,220.80 Step 5 $28.20 $4,888.00 $58,656.00 392 Non-exempt St Sweeper Op Step 1 $26.01 Step 1 $26.66 Step 2 $27.38 Step 2 $28.06 Step 3 $28.82 Step 3 $29.54 Step 4 $30.34 Step 4 $31.10 Step 5 $31.93 $5,534.53 $66,414.40 Step 5 $32.73 $5,673.20 $68,078.40 393 Non-exempt St Sweeper Op-Lead Step 1 $27.83 Step 1 $28.52 Step 2 $29.29 Step 2 $30.03 Step 3 $30.84 Step 3 $31.61 Step 4 $32.46 Step 4 $33.27 Step 5 $34.17 $5,922.80 $71,073.60 Step 5 $35.02 $6,070.13 $72,841.60 248 Non-exempt Storekeeper Step 1 $24.45 Step 1 $25.06 Step 2 $25.74 Step 2 $26.38 Step 3 $27.09 Step 3 $27.77 Step 4 $28.52 Step 4 $29.23 Step 5 $30.02 $5,203.47 $62,441.60 Step 5 $30.77 $5,333.47 $64,001.60 288 Non-exempt Storekeeper-L Step 1 $26.17 Step 1 $26.82 Step 2 $27.55 Step 2 $28.24 Step 3 $29.00 Step 3 $29.72 Step 4 $30.52 Step 4 $31.29 Step 5 $32.13 $5,569.20 $66,830.40 Step 5 $32.93 $5,707.87 $68,494.40 545 Non-exempt Street Light, Traffic Signal and Fiber – Apprentice Step 1 $34.59 Step 1 $35.45 Step 2 $36.41 Step 2 $37.32 Step 3 $38.32 Step 3 $39.28 Step 4 $40.34 Step 4 $41.35 Step 5 $42.46 $7,359.73 $88,316.80 Step 5 $43.52 $7,543.47 $90,521.60 547 Non-exempt Street Light, Traffic Signal and Fiber – Lead Step 1 $39.11 Step 1 $40.09 Step 2 $41.17 Step 2 $42.20 Step 3 $43.34 Step 3 $44.42 Step 4 $45.62 Step 4 $46.76 Step 5 $48.02 $8,323.47 $99,881.60 Step 5 $49.22 $8,531.47 $102,377.60 Effective 11/29/14 27 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 546 Non-exempt Street Light, Traffic Signal and Fiber Technician Step 1 $36.56 Step 1 $37.47 Step 2 $38.48 Step 2 $39.44 Step 3 $40.50 Step 3 $41.52 Step 4 $42.64 Step 4 $43.70 Step 5 $44.88 $7,779.20 $93,350.40 Step 5 $46.00 $7,973.33 $95,680.00 549 Non-exempt Substation Electrician Step 1 $39.88 Step 1 $40.88 Step 2 $41.98 Step 2 $43.03 Step 3 $44.19 Step 3 $45.29 Step 4 $46.51 Step 4 $47.67 Step 5 $48.96 $8,486.40 $101,836.80 Step 5 $50.18 $8,697.87 $104,374.40 548 Non-exempt Substation Electrician - Apprentice Step 1 $37.74 Step 1 $38.69 Step 2 $39.73 Step 2 $40.72 Step 3 $41.82 Step 3 $42.87 Step 4 $44.02 Step 4 $45.12 Step 5 $46.34 $8,032.27 $96,387.20 Step 5 $47.50 $8,233.33 $98,800.00 550 Non-exempt Substation Electrician - Lead Step 1 $42.67 Step 1 $43.74 Step 2 $44.92 Step 2 $46.04 Step 3 $47.28 Step 3 $48.46 Step 4 $49.77 Step 4 $51.01 Step 5 $52.39 $9,080.93 $108,971.20 Step 5 $53.70 $9,308.00 $111,696.00 326 Non-exempt Surveying Asst Step 1 $30.35 Step 1 $31.10 Step 2 $31.94 Step 2 $32.74 Step 3 $33.62 Step 3 $34.46 Step 4 $35.39 Step 4 $36.28 Step 5 $37.26 $6,458.40 $77,500.80 Step 5 $38.19 $6,619.60 $79,435.20 325 Non-exempt Surveyor, Public Wks Step 1 $33.02 Step 1 $33.84 Step 2 $34.75 Step 2 $35.62 Step 3 $36.58 Step 3 $37.50 Step 4 $38.51 Step 4 $39.47 Step 5 $40.54 $7,026.93 $84,323.20 Step 5 $41.55 $7,202.00 $86,424.00 309 Non-exempt System Op/Sched Step 1 $37.33 Step 1 $38.27 Step 2 $39.30 Step 2 $40.28 Step 3 $41.37 Step 3 $42.40 Step 4 $43.54 Step 4 $44.63 Step 5 $45.84 $7,945.60 $95,347.20 Step 5 $46.98 $8,143.20 $97,718.40 Effective 11/29/14 28 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 362 Non-exempt Technologist Step 1 $45.69 Step 1 $46.84 Step 2 $48.10 Step 2 $49.30 Step 3 $50.63 Step 3 $51.89 Step 4 $53.29 Step 4 $54.63 Step 5 $56.10 $9,724.00 $116,688.00 Step 5 $57.50 $9,966.67 $119,600.00 3620 Non-exempt Technologist - S Step 1 $45.69 Step 1 $46.84 Step 2 $48.10 Step 2 $49.30 Step 3 $50.63 Step 3 $51.89 Step 4 $53.29 Step 4 $54.63 Step 5 $56.10 $9,724.00 $116,688.00 Step 5 $57.50 $9,966.67 $119,600.00 229 Non-exempt Theater Specialist Step 1 $33.01 Step 1 $33.83 Step 2 $34.74 Step 2 $35.61 Step 3 $36.57 Step 3 $37.49 Step 4 $38.50 Step 4 $39.46 Step 5 $40.52 $7,023.47 $84,281.60 Step 5 $41.54 $7,200.27 $86,403.20 406 Non-exempt Traf Cont Maint I Step 1 $26.23 Step 1 $26.89 Step 2 $27.62 Step 2 $28.31 Step 3 $29.07 Step 3 $29.80 Step 4 $30.60 Step 4 $31.36 Step 5 $32.21 $5,583.07 $66,996.80 Step 5 $33.01 $5,721.73 $68,660.80 412 Non-exempt Traf Cont Maint Ii Step 1 $24.29 Step 1 $24.89 Step 2 $25.56 Step 2 $26.20 Step 3 $26.91 Step 3 $27.58 Step 4 $28.33 Step 4 $29.03 Step 5 $29.82 $5,168.80 $62,025.60 Step 5 $30.56 $5,297.07 $63,564.80 407 Non-exempt Traf Cont Maint-L Step 1 $28.06 Step 1 $28.76 Step 2 $29.54 Step 2 $30.28 Step 3 $31.09 Step 3 $31.87 Step 4 $32.73 Step 4 $33.55 Step 5 $34.45 $5,971.33 $71,656.00 Step 5 $35.31 $6,120.40 $73,444.80 435 Non-exempt Tree Maint Asst Step 1 $23.61 Step 1 $24.20 Step 2 $24.85 Step 2 $25.47 Step 3 $26.16 Step 3 $26.81 Step 4 $27.54 Step 4 $28.23 Step 5 $28.99 $5,024.93 $60,299.20 Step 5 $29.71 $5,149.73 $61,796.80 Effective 11/29/14 29 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 434 Non-exempt Tree Maintenance Specialist Step 1 $27.55 Step 1 $28.24 Step 2 $29.00 Step 2 $29.72 Step 3 $30.52 Step 3 $31.29 Step 4 $32.13 Step 4 $32.93 Step 5 $33.82 $5,862.13 $70,345.60 Step 5 $34.67 $6,009.47 $72,113.60 430 Non-exempt Tree Trim/Ln Clr Step 1 $27.12 Step 1 $27.80 Step 2 $28.55 Step 2 $29.26 Step 3 $30.05 Step 3 $30.80 Step 4 $31.63 Step 4 $32.42 Step 5 $33.30 $5,772.00 $69,264.00 Step 5 $34.13 $5,915.87 $70,990.40 431 Non-exempt Tree Trim/Ln Clr-L Step 1 $29.02 Step 1 $29.74 Step 2 $30.54 Step 2 $31.31 Step 3 $32.15 Step 3 $32.95 Step 4 $33.84 Step 4 $34.69 Step 5 $35.62 $6,174.13 $74,089.60 Step 5 $36.51 $6,328.40 $75,940.80 432 Non-exempt Tree Trm/Ln Clr Asst Step 1 $25.56 Step 1 $26.20 Step 2 $26.91 Step 2 $27.58 Step 3 $28.32 Step 3 $29.03 Step 4 $29.81 Step 4 $30.56 Step 5 $31.38 $5,439.20 $65,270.40 Step 5 $32.17 $5,576.13 $66,913.60 215 Non-exempt Util Acct Rep Step 1 $31.87 Step 1 $32.67 Step 2 $33.55 Step 2 $34.39 Step 3 $35.31 Step 3 $36.20 Step 4 $37.17 Step 4 $38.10 Step 5 $39.13 $6,782.53 $81,390.40 Step 5 $40.11 $6,952.40 $83,428.80 223 Non-exempt Util Acctg Tech Step 1 $25.38 Step 1 $26.02 Step 2 $26.72 Step 2 $27.38 Step 3 $28.12 Step 3 $28.83 Step 4 $29.60 Step 4 $30.34 Step 5 $31.16 $5,401.07 $64,812.80 Step 5 $31.94 $5,536.27 $66,435.20 272 Non-exempt Util Comp Tech Step 1 $39.11 Step 1 $40.09 Step 2 $41.17 Step 2 $42.20 Step 3 $43.33 Step 3 $44.42 Step 4 $45.62 Step 4 $46.76 Step 5 $48.02 $8,323.47 $99,881.60 Step 5 $49.22 $8,531.47 $102,377.60 Effective 11/29/14 30 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 273 Non-exempt Util Comp Tech-L Step 1 $41.85 Step 1 $42.89 Step 2 $44.05 Step 2 $45.15 Step 3 $46.37 Step 3 $47.53 Step 4 $48.81 Step 4 $50.03 Step 5 $51.38 $8,905.87 $106,870.40 Step 5 $52.66 $9,127.73 $109,532.80 219 Non-exempt Util Credit/Col Spec Step 1 $30.23 Step 1 $30.99 Step 2 $31.82 Step 2 $32.62 Step 3 $33.50 Step 3 $34.34 Step 4 $35.26 Step 4 $36.14 Step 5 $37.12 $6,434.13 $77,209.60 Step 5 $38.05 $6,595.33 $79,144.00 310 Non-exempt Util Engr Estimator Step 1 $39.25 Step 1 $40.23 Step 2 $41.32 Step 2 $42.35 Step 3 $43.49 Step 3 $44.58 Step 4 $45.78 Step 4 $46.93 Step 5 $48.19 $8,352.93 $100,235.20 Step 5 $49.39 $8,560.93 $102,731.20 486 Non-exempt Util Fld Svcs Rep Step 1 $31.93 Step 1 $32.73 Step 2 $33.61 Step 2 $34.45 Step 3 $35.38 Step 3 $36.27 Step 4 $37.24 Step 4 $38.18 Step 5 $39.20 $6,794.67 $81,536.00 Step 5 $40.18 $6,964.53 $83,574.40 480 Non-exempt Util Install/Rep Step 1 $31.14 Step 1 $31.92 Step 2 $32.78 Step 2 $33.59 Step 3 $34.50 Step 3 $35.36 Step 4 $36.32 Step 4 $37.22 Step 5 $38.23 $6,626.53 $79,518.40 Step 5 $39.18 $6,791.20 $81,494.40 481 Non-exempt Util Install/Rep Ast Step 1 $26.41 Step 1 $27.07 Step 2 $27.80 Step 2 $28.49 Step 3 $29.26 Step 3 $29.99 Step 4 $30.80 Step 4 $31.57 Step 5 $32.42 $5,619.47 $67,433.60 Step 5 $33.23 $5,759.87 $69,118.40 479 Non-exempt Util Install/Rep-L Step 1 $33.98 Step 1 $34.83 Step 2 $35.77 Step 2 $36.66 Step 3 $37.65 Step 3 $38.59 Step 4 $39.63 Step 4 $40.63 Step 5 $41.72 $7,231.47 $86,777.60 Step 5 $42.76 $7,411.73 $88,940.80 Effective 11/29/14 31 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 363 Non-exempt Util Key Acct Rep Step 1 $38.59 Step 1 $39.56 Step 2 $40.62 Step 2 $41.64 Step 3 $42.76 Step 3 $43.83 Step 4 $45.01 Step 4 $46.14 Step 5 $47.38 $8,212.53 $98,550.40 Step 5 $48.56 $8,417.07 $101,004.80 271 Non-exempt Util Locator Step 1 $29.31 Step 1 $30.04 Step 2 $30.85 Step 2 $31.62 Step 3 $32.47 Step 3 $33.29 Step 4 $34.18 Step 4 $35.04 Step 5 $35.98 $6,236.53 $74,838.40 Step 5 $36.88 $6,392.53 $76,710.40 364 Non-exempt Util Mkt Analyst Step 1 $34.87 Step 1 $35.74 Step 2 $36.70 Step 2 $37.62 Step 3 $38.64 Step 3 $39.60 Step 4 $40.67 Step 4 $41.69 Step 5 $42.81 $7,420.40 $89,044.80 Step 5 $43.88 $7,605.87 $91,270.40 233 Non-exempt Util Rate Analyst Step 1 $35.34 Step 1 $36.23 Step 2 $37.20 Step 2 $38.13 Step 3 $39.16 Step 3 $40.14 Step 4 $41.22 Step 4 $42.25 Step 5 $43.39 $7,520.93 $90,251.20 Step 5 $44.48 $7,709.87 $92,518.40 307 Non-exempt Util Syst Oper Step 1 $41.38 Step 1 $42.41 Step 2 $43.56 Step 2 $44.65 Step 3 $45.85 Step 3 $47.00 Step 4 $48.26 Step 4 $49.47 Step 5 $50.80 $8,805.33 $105,664.00 Step 5 $52.07 $9,025.47 $108,305.60 284 Non-exempt Utilities Engineer Estimator Lead Step 1 $42.00 Step 1 $43.05 Step 2 $44.21 Step 2 $45.31 Step 3 $46.53 Step 3 $47.70 Step 4 $48.98 Step 4 $50.21 Step 5 $51.56 $8,937.07 $107,244.80 Step 5 $52.85 $9,160.67 $109,928.00 3630 Non-exempt Utility Key Account Rep - S Step 1 $38.59 Step 1 $39.56 Step 2 $40.62 Step 2 $41.64 Step 3 $42.76 Step 3 $43.83 Step 4 $45.01 Step 4 $46.14 Step 5 $47.38 $8,212.53 $98,550.40 Step 5 $48.56 $8,417.07 $101,004.80 Effective 11/29/14 32 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 290 Non-exempt Utl Install Repair Lead-Welding Cert Step 1 $34.78 Step 1 $35.65 Step 2 $36.61 Step 2 $37.52 Step 3 $38.53 Step 3 $39.50 Step 4 $40.56 Step 4 $41.58 Step 5 $42.70 $7,401.33 $88,816.00 Step 5 $43.76 $7,585.07 $91,020.80 289 Non-exempt Utl Install Repair-Welding Cert Step 1 $32.36 Step 1 $33.17 Step 2 $34.07 Step 2 $34.92 Step 3 $35.86 Step 3 $36.75 Step 4 $37.75 Step 4 $38.69 Step 5 $39.73 $6,886.53 $82,638.40 Step 5 $40.73 $7,059.87 $84,718.40 278 Non-exempt Veterinarian Tech Step 1 $24.14 Step 1 $24.74 Step 2 $25.41 Step 2 $26.05 Step 3 $26.75 Step 3 $27.42 Step 4 $28.16 Step 4 $28.86 Step 5 $29.64 $5,137.60 $61,651.20 Step 5 $30.38 $5,265.87 $63,190.40 274 Non-exempt Volunteer Coord Step 1 $28.01 Step 1 $28.71 Step 2 $29.49 Step 2 $30.23 Step 3 $31.04 Step 3 $31.82 Step 4 $32.67 Step 4 $33.49 Step 5 $34.39 $5,960.93 $71,531.20 Step 5 $35.25 $6,110.00 $73,320.00 482 Non-exempt Water Meter Rep Asst Step 1 $22.77 Step 1 $23.34 Step 2 $23.97 Step 2 $24.57 Step 3 $25.23 Step 3 $25.86 Step 4 $26.56 Step 4 $27.22 Step 5 $27.95 $4,844.67 $58,136.00 Step 5 $28.65 $4,966.00 $59,592.00 484 Non-exempt Water Meter Repair Step 1 $25.22 Step 1 $25.85 Step 2 $26.54 Step 2 $27.21 Step 3 $27.94 Step 3 $28.64 Step 4 $29.41 Step 4 $30.15 Step 5 $30.96 $5,366.40 $64,396.80 Step 5 $31.73 $5,499.87 $65,998.40 499 Non-exempt Water Sys Oper I Step 1 $27.85 Step 1 $28.55 Step 2 $29.32 Step 2 $30.05 Step 3 $30.86 Step 3 $31.64 Step 4 $32.49 Step 4 $33.30 Step 5 $34.20 $5,928.00 $71,136.00 Step 5 $35.05 $6,075.33 $72,904.00 Effective 11/29/14 33 Steps Rate Approx. Monthly Approx. Annual Steps Rate Approx. Monthly Approx. Annual Appendix A-2 MOA Between City of Palo Alto and SEIU 2014-2015 Salary Schedule Salary Effective 2014-PP8 Salary Effective 2014-PP26Job Code FLSA Job Title 507 Non-exempt Water Sys Oper II Step 1 $31.82 Step 1 $32.62 Step 2 $33.50 Step 2 $34.33 Step 3 $35.26 Step 3 $36.14 Step 4 $37.11 Step 4 $38.04 Step 5 $39.07 $6,772.13 $81,265.60 Step 5 $40.04 $6,940.27 $83,283.20 500 Non-exempt WQC Plt Oper I Step 1 $27.85 Step 1 $28.55 Step 2 $29.32 Step 2 $30.05 Step 3 $30.86 Step 3 $31.64 Step 4 $32.49 Step 4 $33.30 Step 5 $34.20 $5,928.00 $71,136.00 Step 5 $35.05 $6,075.33 $72,904.00 509 Non-exempt WQC Plt Oper II Step 1 $31.82 Step 1 $32.62 Step 2 $33.50 Step 2 $34.33 Step 3 $35.26 Step 3 $36.14 Step 4 $37.11 Step 4 $38.04 Step 5 $39.07 $6,772.13 $81,265.60 Step 5 $40.04 $6,940.27 $83,283.20 510 Non-exempt WQC Plt Oper Trn Step 1 $24.52 Step 1 $25.13 Step 2 $25.81 Step 2 $26.45 Step 3 $27.17 Step 3 $27.84 Step 4 $28.60 Step 4 $29.31 Step 5 $30.10 $5,217.33 $62,608.00 Step 5 $30.85 $5,347.33 $64,168.00 226 Non-exempt Wtr Mtr Crs Cn Tec Step 1 $25.87 Step 1 $26.51 Step 2 $27.23 Step 2 $27.91 Step 3 $28.66 Step 3 $29.38 Step 4 $30.17 Step 4 $30.92 Step 5 $31.76 $5,505.07 $66,060.80 Step 5 $32.55 $5,642.00 $67,704.00 Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual 601 Non-exempt SH FIRE APPARATUS OP Step 1 27.58$ Step 1 30.48$ Step 1 31.25$ Step 2 29.03$ Step 2 32.08$ Step 2 32.89$ Step 3 30.56$ Step 3 33.77$ Step 3 34.62$ Step 4 32.17$ Step 4 35.55$ Step 4 36.44$ Step 5 33.86$ 8,216.69$ 98,600.32$ Step 5 37.42$ 9,080.59$ 108,967.04$ Step 5 38.36$ 9,308.69$ 111,704.32$ 602 Non-exempt SH FIRE CAPTAIN Step 1 32.73$ Step 1 36.17$ Step 1 37.07$ Step 2 34.45$ Step 2 38.07$ Step 2 39.02$ Step 3 36.26$ Step 3 40.07$ Step 3 41.07$ Step 4 38.17$ Step 4 42.18$ Step 4 43.23$ Step 5 40.18$ 9,750.35$ 117,004.16$ Step 5 44.40$ 10,774.40$ 129,292.80$ Step 5 45.51$ 11,043.76$ 132,525.12$ 603 Non-exempt SH FIRE INSPECTOR Step 1 34.36$ Step 1 37.97$ Step 1 38.91$ Step 2 36.17$ Step 2 39.97$ Step 2 40.96$ Step 3 38.07$ Step 3 42.07$ Step 3 43.12$ Step 4 40.07$ Step 4 44.28$ Step 4 45.39$ Step 5 42.18$ 10,235.68$ 122,828.16$ Step 5 46.61$ 11,310.69$ 135,728.32$ Step 5 47.78$ 11,594.61$ 139,135.36$ 604 Non-exempt SH FIRE FIGHTER Step 1 25.80$ Step 1 28.51$ Step 1 29.23$ Step 2 27.16$ Step 2 30.01$ Step 2 30.77$ Step 3 28.59$ Step 3 31.59$ Step 3 32.39$ Step 4 30.09$ Step 4 33.25$ Step 4 34.09$ Step 5 31.67$ 7,685.25$ 92,223.04$ Step 5 35.00$ 8,493.33$ 101,920.00$ Step 5 35.88$ 8,706.88$ 104,482.56$ 606 Non-exempt SH OPER PARAMEDIC-12.5 Step 1 31.03$ Step 1 34.29$ Step 1 35.14$ Step 2 32.66$ Step 2 36.09$ Step 2 36.99$ Step 3 34.38$ Step 3 37.99$ Step 3 38.94$ Step 4 36.19$ Step 4 39.99$ Step 4 40.99$ Step 5 38.09$ 9,243.17$ 110,918.08$ Step 5 42.09$ 10,213.84$ 122,566.08$ Step 5 43.15$ 10,471.07$ 125,652.80$ 608 Non-exempt SH CAPTAIN PARAMEDIC-12.5 Step 1 36.81$ Step 1 40.69$ Step 1 41.71$ Step 2 38.75$ Step 2 42.83$ Step 2 43.90$ Step 3 40.79$ Step 3 45.08$ Step 3 46.21$ Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) IAFF Salary Schedule EXHIBIT "4" Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 4 42.94$ Step 4 47.45$ Step 4 48.64$ Step 5 45.20$ 10,968.53$ 131,622.40$ Step 5 49.95$ 12,121.20$ 145,454.40$ Step 5 51.20$ 12,424.53$ 149,094.40$ 610 Non-exempt SH INSPCTR PARAMDC-12.5 Step 1 37.14$ Step 1 41.05$ Step 1 42.08$ Step 2 39.09$ Step 2 43.21$ Step 2 44.29$ Step 3 41.15$ Step 3 45.48$ Step 3 46.62$ Step 4 43.32$ Step 4 47.87$ Step 4 49.07$ Step 5 45.60$ 11,065.60$ 132,787.20$ Step 5 50.39$ 12,227.97$ 146,735.68$ Step 5 51.65$ 12,533.73$ 150,404.80$ 676 Non-exempt SH F FIGHTR PARAMEDC-12.5 Step 1 29.02$ Step 1 32.07$ Step 1 32.88$ Step 2 30.55$ Step 2 33.76$ Step 2 34.61$ Step 3 32.16$ Step 3 35.54$ Step 3 36.43$ Step 4 33.85$ Step 4 37.41$ Step 4 38.35$ Step 5 35.63$ 8,646.21$ 103,754.56$ Step 5 39.38$ 9,556.21$ 114,674.56$ Step 5 40.37$ 9,796.45$ 117,557.44$ 677 Non-exempt SH HAZ MAT SPEC Step 1 35.37$ Step 1 39.08$ Step 1 40.05$ Step 2 37.23$ Step 2 41.14$ Step 2 42.16$ Step 3 39.19$ Step 3 43.30$ Step 3 44.38$ Step 4 41.25$ Step 4 45.58$ Step 4 46.72$ Step 5 43.42$ 10,536.59$ 126,439.04$ Step 5 47.98$ 11,643.15$ 139,717.76$ Step 5 49.18$ 11,934.35$ 143,212.16$ 678 Non-exempt SH HAZ MAT INSPECTOR Step 1 34.36$ Step 1 37.97$ Step 1 38.91$ Step 2 36.17$ Step 2 39.97$ Step 2 40.96$ Step 3 38.07$ Step 3 42.07$ Step 3 43.12$ Step 4 40.07$ Step 4 44.28$ Step 4 45.39$ Step 5 42.18$ 10,235.68$ 122,828.16$ Step 5 46.61$ 11,310.69$ 135,728.32$ Step 5 47.78$ 11,594.61$ 139,135.36$ 680 Non-exempt SH FIRE FIGHTER HAZ MAT Step 1 27.08$ Step 1 29.93$ Step 1 30.69$ Step 2 28.51$ Step 2 31.50$ Step 2 32.30$ Step 3 30.01$ Step 3 33.16$ Step 3 34.00$ Step 4 31.59$ Step 4 34.91$ Step 4 35.79$ Step 5 33.25$ 8,068.67$ 96,824.00$ Step 5 36.75$ 8,918.00$ 107,016.00$ Step 5 37.67$ 9,141.25$ 109,695.04$ 681 Non-exempt SH FIRE APPR OP HAZ MAT Step 1 28.95$ Step 1 32.00$ Step 1 32.80$ Step 2 30.47$ Step 2 33.68$ Step 2 34.53$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 3 32.07$ Step 3 35.45$ Step 3 36.35$ Step 4 33.76$ Step 4 37.32$ Step 4 38.26$ Step 5 35.54$ 8,624.37$ 103,492.48$ Step 5 39.28$ 9,531.95$ 114,383.36$ Step 5 40.27$ 9,772.19$ 117,266.24$ 682 Non-exempt SH FIRE CAPTAIN HAZ MAT Step 1 34.37$ Step 1 37.98$ Step 1 38.92$ Step 2 36.18$ Step 2 39.98$ Step 2 40.97$ Step 3 38.08$ Step 3 42.08$ Step 3 43.13$ Step 4 40.08$ Step 4 44.29$ Step 4 45.40$ Step 5 42.19$ 10,238.11$ 122,857.28$ Step 5 46.62$ 11,313.12$ 135,757.44$ Step 5 47.79$ 11,597.04$ 139,164.48$ 683 Non-exempt SH FIRE FIGHTER EMT Step 1 26.57$ Step 1 29.36$ Step 1 30.10$ Step 2 27.97$ Step 2 30.91$ Step 2 31.68$ Step 3 29.44$ Step 3 32.54$ Step 3 33.35$ Step 4 30.99$ Step 4 34.25$ Step 4 35.11$ Step 5 32.62$ 7,915.79$ 94,989.44$ Step 5 36.05$ 8,748.13$ 104,977.60$ Step 5 36.96$ 8,968.96$ 107,627.52$ 684 Non-exempt SH FIRE FGHTR HZ MT EMT Step 1 27.87$ Step 1 30.79$ Step 1 31.57$ Step 2 29.34$ Step 2 32.41$ Step 2 33.23$ Step 3 30.88$ Step 3 34.12$ Step 3 34.98$ Step 4 32.50$ Step 4 35.92$ Step 4 36.82$ Step 5 34.21$ 8,301.63$ 99,619.52$ Step 5 37.81$ 9,175.23$ 110,102.72$ Step 5 38.76$ 9,405.76$ 112,869.12$ 685 Non-exempt SH FIRE APPARATUS OP EMT Step 1 28.41$ Step 1 31.40$ Step 1 32.19$ Step 2 29.91$ Step 2 33.05$ Step 2 33.88$ Step 3 31.48$ Step 3 34.79$ Step 3 35.66$ Step 4 33.14$ Step 4 36.62$ Step 4 37.54$ Step 5 34.88$ 8,464.21$ 101,570.56$ Step 5 38.55$ 9,354.80$ 112,257.60$ Step 5 39.52$ 9,590.19$ 115,082.24$ 686 Non-exempt SH FIRE AP OP HZ MT EMT Step 1 29.78$ Step 1 32.92$ Step 1 33.74$ Step 2 31.35$ Step 2 34.65$ Step 2 35.52$ Step 3 33.00$ Step 3 36.47$ Step 3 37.39$ Step 4 34.74$ Step 4 38.39$ Step 4 39.36$ Step 5 36.57$ 8,874.32$ 106,491.84$ Step 5 40.41$ 9,806.16$ 117,673.92$ Step 5 41.43$ 10,053.68$ 120,644.16$ 687 Non-exempt SH FIRE CAPTAIN EMT Step 1 33.70$ Step 1 37.25$ Step 1 38.18$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 2 35.47$ Step 2 39.21$ Step 2 40.19$ Step 3 37.34$ Step 3 41.27$ Step 3 42.31$ Step 4 39.31$ Step 4 43.44$ Step 4 44.54$ Step 5 41.38$ 10,041.55$ 120,498.56$ Step 5 45.73$ 11,097.15$ 133,165.76$ Step 5 46.88$ 11,376.21$ 136,514.56$ 688 Non-exempt SH FIRE CAP HAZ MAT EMT Step 1 35.35$ Step 1 39.06$ Step 1 40.04$ Step 2 37.21$ Step 2 41.12$ Step 2 42.15$ Step 3 39.17$ Step 3 43.28$ Step 3 44.37$ Step 4 41.23$ Step 4 45.56$ Step 4 46.70$ Step 5 43.40$ 10,531.73$ 126,380.80$ Step 5 47.96$ 11,638.29$ 139,659.52$ Step 5 49.16$ 11,929.49$ 143,153.92$ 689 Non-exempt SH FIRE INSPECTOR EMT Step 1 35.41$ Step 1 39.12$ Step 1 40.11$ Step 2 37.27$ Step 2 41.18$ Step 2 42.22$ Step 3 39.23$ Step 3 43.35$ Step 3 44.44$ Step 4 41.29$ Step 4 45.63$ Step 4 46.78$ Step 5 43.46$ 10,546.29$ 126,555.52$ Step 5 48.03$ 11,655.28$ 139,863.36$ Step 5 49.24$ 11,948.91$ 143,386.88$ 691 Non-exempt SH F FGH PRDMD-12.5 EMT Step 1 29.79$ Step 1 32.94$ Step 1 33.76$ Step 2 31.36$ Step 2 34.67$ Step 2 35.54$ Step 3 33.01$ Step 3 36.49$ Step 3 37.41$ Step 4 34.75$ Step 4 38.41$ Step 4 39.38$ Step 5 36.58$ 8,876.75$ 106,520.96$ Step 5 40.43$ 9,811.01$ 117,732.16$ Step 5 41.45$ 10,058.53$ 120,702.40$ 693 Non-exempt SH OPR PRMDC-12.5 EMT Step 1 31.85$ Step 1 35.21$ Step 1 36.09$ Step 2 33.53$ Step 2 37.06$ Step 2 37.99$ Step 3 35.29$ Step 3 39.01$ Step 3 39.99$ Step 4 37.15$ Step 4 41.06$ Step 4 42.09$ Step 5 39.11$ 9,490.69$ 113,888.32$ Step 5 43.22$ 10,488.05$ 125,856.64$ Step 5 44.31$ 10,752.56$ 129,030.72$ 695 Non-exempt SH CAPT PRMDC-12.5 EMT Step 1 37.80$ Step 1 41.77$ Step 1 42.82$ Step 2 39.79$ Step 2 43.97$ Step 2 45.07$ Step 3 41.88$ Step 3 46.28$ Step 3 47.44$ Step 4 44.08$ Step 4 48.72$ Step 4 49.94$ Step 5 46.40$ 11,259.73$ 135,116.80$ Step 5 51.28$ 12,443.95$ 149,327.36$ Step 5 52.57$ 12,756.99$ 153,083.84$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) 696 Non-exempt SH HAZ MAT SPEC EMT Step 1 36.42$ Step 1 40.25$ Step 1 41.26$ Step 2 38.34$ Step 2 42.37$ Step 2 43.43$ Step 3 40.36$ Step 3 44.60$ Step 3 45.72$ Step 4 42.48$ Step 4 46.95$ Step 4 48.13$ Step 5 44.72$ 10,852.05$ 130,224.64$ Step 5 49.42$ 11,992.59$ 143,911.04$ Step 5 50.66$ 12,293.49$ 147,521.92$ TBD Non-exempt SH FIRE FGHTR EMT HAZ MT PARA Step 1 31.08$ Step 1 34.35$ Step 1 35.22$ Step 2 32.72$ Step 2 36.16$ Step 2 37.07$ Step 3 34.44$ Step 3 38.06$ Step 3 39.02$ Step 4 36.25$ Step 4 40.06$ Step 4 41.07$ Step 5 38.16$ 9,260.16$ 111,121.92$ Step 5 42.17$ 10,233.25$ 122,799.04$ Step 5 43.23$ 10,490.48$ 125,885.76$ TBD Non-exempt SH FIRE AP OP EMT HAZ MT PARA Step 1 33.23$ Step 1 36.74$ Step 1 37.64$ Step 2 34.98$ Step 2 38.67$ Step 2 39.62$ Step 3 36.82$ Step 3 40.70$ Step 3 41.71$ Step 4 38.76$ Step 4 42.84$ Step 4 43.91$ Step 5 40.80$ 9,900.80$ 118,809.60$ Step 5 45.09$ 10,941.84$ 131,302.08$ Step 5 46.22$ 11,216.05$ 134,592.64$ 634 Non-exempt NS FIRE APPARATUS OP Step 1 38.61$ Step 1 42.66$ Step 1 43.74$ Step 2 40.64$ Step 2 44.91$ Step 2 46.04$ Step 3 42.78$ Step 3 47.27$ Step 3 48.46$ Step 4 45.03$ Step 4 49.76$ Step 4 51.01$ Step 5 47.40$ 8,216.00$ 98,592.00$ Step 5 52.38$ 9,079.20$ 108,950.40$ Step 5 53.69$ 9,306.27$ 111,675.20$ 635 Non-exempt NS FIRE CAPTAIN Step 1 45.82$ Step 1 50.64$ Step 1 51.90$ Step 2 48.23$ Step 2 53.30$ Step 2 54.63$ Step 3 50.77$ Step 3 56.10$ Step 3 57.50$ Step 4 53.44$ Step 4 59.05$ Step 4 60.53$ Step 5 56.25$ 9,750.00$ 117,000.00$ Step 5 62.16$ 10,774.40$ 129,292.80$ Step 5 63.72$ 11,044.80$ 132,537.60$ 636 Non-exempt NS FIRE INSPECTOR Step 1 48.11$ Step 1 53.16$ Step 1 54.49$ Step 2 50.64$ Step 2 55.96$ Step 2 57.36$ Step 3 53.30$ Step 3 58.90$ Step 3 60.38$ Step 4 56.10$ Step 4 62.00$ Step 4 63.56$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 5 59.05$ 10,235.33$ 122,824.00$ Step 5 65.26$ 11,311.73$ 135,740.80$ Step 5 66.90$ 11,596.00$ 139,152.00$ 637 Non-exempt NS FIRE FIGHTER Step 1 36.11$ Step 1 39.91$ Step 1 40.91$ Step 2 38.01$ Step 2 42.01$ Step 2 43.06$ Step 3 40.01$ Step 3 44.22$ Step 3 45.33$ Step 4 42.12$ Step 4 46.55$ Step 4 47.72$ Step 5 44.34$ 7,685.60$ 92,227.20$ Step 5 49.00$ 8,493.33$ 101,920.00$ Step 5 50.23$ 8,706.53$ 104,478.40$ 638 Non-exempt NS OPER PARAMEDIC-12.5 Step 1 43.42$ Step 1 47.98$ Step 1 49.19$ Step 2 45.71$ Step 2 50.51$ Step 2 51.78$ Step 3 48.12$ Step 3 53.17$ Step 3 54.51$ Step 4 50.65$ Step 4 55.97$ Step 4 57.38$ Step 5 53.32$ 9,242.13$ 110,905.60$ Step 5 58.92$ 10,212.80$ 122,553.60$ Step 5 60.40$ 10,469.33$ 125,632.00$ 639 Non-exempt NS CAPTAIN PARAMEDIC-12.5 Step 1 51.54$ Step 1 56.95$ Step 1 58.40$ Step 2 54.25$ Step 2 59.95$ Step 2 61.47$ Step 3 57.11$ Step 3 63.11$ Step 3 64.70$ Step 4 60.12$ Step 4 66.43$ Step 4 68.10$ Step 5 63.28$ 10,968.53$ 131,622.40$ Step 5 69.93$ 12,121.20$ 145,454.40$ Step 5 71.68$ 12,424.53$ 149,094.40$ 641 Non-exempt NS INSPCTR PARAMDC-12.5 Step 1 51.98$ Step 1 57.45$ Step 1 58.90$ Step 2 54.72$ Step 2 60.47$ Step 2 62.00$ Step 3 57.60$ Step 3 63.65$ Step 3 65.26$ Step 4 60.63$ Step 4 67.00$ Step 4 68.69$ Step 5 63.82$ 11,062.13$ 132,745.60$ Step 5 70.53$ 12,225.20$ 146,702.40$ Step 5 72.30$ 12,532.00$ 150,384.00$ 642 Non-exempt NS 40-HR TRAINING CAPTAIN Step 1 48.11$ Step 1 53.16$ Step 1 54.49$ Step 2 50.64$ Step 2 55.96$ Step 2 57.36$ Step 3 53.30$ Step 3 58.90$ Step 3 60.38$ Step 4 56.10$ Step 4 62.00$ Step 4 63.56$ Step 5 59.05$ 10,235.33$ 122,824.00$ Step 5 65.26$ 11,311.73$ 135,740.80$ Step 5 66.90$ 11,596.00$ 139,152.00$ 643 Non-exempt NS 40-HR TRAINING CAPTAIN EMT Step 1 49.55$ Step 1 54.76$ Step 1 56.13$ Step 2 52.16$ Step 2 57.64$ Step 2 59.08$ Step 3 54.90$ Step 3 60.67$ Step 3 62.19$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 4 57.79$ Step 4 63.86$ Step 4 65.46$ Step 5 60.83$ 10,543.87$ 126,526.40$ Step 5 67.22$ 11,651.47$ 139,817.60$ Step 5 68.91$ 11,944.40$ 143,332.80$ 644 Non-exempt NS F FIGHTR PARAMEDC-12.5 Step 1 40.62$ Step 1 44.88$ Step 1 46.02$ Step 2 42.76$ Step 2 47.24$ Step 2 48.44$ Step 3 45.01$ Step 3 49.73$ Step 3 50.99$ Step 4 47.38$ Step 4 52.35$ Step 4 53.67$ Step 5 49.87$ 8,644.13$ 103,729.60$ Step 5 55.11$ 9,552.40$ 114,628.80$ Step 5 56.49$ 9,791.60$ 117,499.20$ 645 Non-exempt NS HAZ MAT SPEC Step 1 49.51$ Step 1 54.72$ Step 1 56.09$ Step 2 52.12$ Step 2 57.60$ Step 2 59.04$ Step 3 54.86$ Step 3 60.63$ Step 3 62.15$ Step 4 57.75$ Step 4 63.82$ Step 4 65.42$ Step 5 60.79$ 10,536.93$ 126,443.20$ Step 5 67.18$ 11,644.53$ 139,734.40$ Step 5 68.86$ 11,935.73$ 143,228.80$ 646 Non-exempt NS HAZ MAT INSPECTOR Step 1 48.11$ Step 1 53.16$ Step 1 54.49$ Step 2 50.64$ Step 2 55.96$ Step 2 57.36$ Step 3 53.30$ Step 3 58.90$ Step 3 60.38$ Step 4 56.10$ Step 4 62.00$ Step 4 63.56$ Step 5 59.05$ 10,235.33$ 122,824.00$ Step 5 65.26$ 11,311.73$ 135,740.80$ Step 5 66.90$ 11,596.00$ 139,152.00$ 647 Non-exempt NS FIRE FIGHTER HAZ MAT Step 1 37.91$ Step 1 41.90$ Step 1 42.95$ Step 2 39.91$ Step 2 44.11$ Step 2 45.21$ Step 3 42.01$ Step 3 46.43$ Step 3 47.59$ Step 4 44.22$ Step 4 48.87$ Step 4 50.09$ Step 5 46.55$ 8,068.67$ 96,824.00$ Step 5 51.44$ 8,916.27$ 106,995.20$ Step 5 52.73$ 9,139.87$ 109,678.40$ 650 Non-exempt NS FIRE APPR OP HAZ MAT Step 1 40.54$ Step 1 44.80$ Step 1 45.92$ Step 2 42.67$ Step 2 47.16$ Step 2 48.34$ Step 3 44.92$ Step 3 49.64$ Step 3 50.88$ Step 4 47.28$ Step 4 52.25$ Step 4 53.56$ Step 5 49.77$ 8,626.80$ 103,521.60$ Step 5 55.00$ 9,533.33$ 114,400.00$ Step 5 56.38$ 9,772.53$ 117,270.40$ 648 Non-exempt NS FIRE CAPTAIN HAZ MAT Step 1 48.11$ Step 1 53.16$ Step 1 54.49$ Step 2 50.64$ Step 2 55.96$ Step 2 57.36$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 3 53.30$ Step 3 58.90$ Step 3 60.38$ Step 4 56.10$ Step 4 62.00$ Step 4 63.56$ Step 5 59.05$ 10,235.33$ 122,824.00$ Step 5 65.26$ 11,311.73$ 135,740.80$ Step 5 66.90$ 11,596.00$ 139,152.00$ 649 Non-exempt NS FIRE FIGHTER EMT Step 1 37.20$ Step 1 41.11$ Step 1 42.14$ Step 2 39.16$ Step 2 43.27$ Step 2 44.36$ Step 3 41.22$ Step 3 45.55$ Step 3 46.69$ Step 4 43.39$ Step 4 47.95$ Step 4 49.15$ Step 5 45.67$ 7,916.13$ 94,993.60$ Step 5 50.47$ 8,748.13$ 104,977.60$ Step 5 51.74$ 8,968.27$ 107,619.20$ 651 Non-exempt NS FIRE FGHTR HZ MT EMT Step 1 39.02$ Step 1 43.10$ Step 1 44.18$ Step 2 41.07$ Step 2 45.37$ Step 2 46.51$ Step 3 43.23$ Step 3 47.76$ Step 3 48.96$ Step 4 45.50$ Step 4 50.27$ Step 4 51.54$ Step 5 47.89$ 8,300.93$ 99,611.20$ Step 5 52.92$ 9,172.80$ 110,073.60$ Step 5 54.25$ 9,403.33$ 112,840.00$ 652 Non-exempt NS FIRE APPARATUS OP EMT Step 1 39.78$ Step 1 43.96$ Step 1 45.04$ Step 2 41.87$ Step 2 46.27$ Step 2 47.41$ Step 3 44.07$ Step 3 48.70$ Step 3 49.91$ Step 4 46.39$ Step 4 51.26$ Step 4 52.54$ Step 5 48.83$ 8,463.87$ 101,566.40$ Step 5 53.96$ 9,353.07$ 112,236.80$ Step 5 55.31$ 9,587.07$ 115,044.80$ 653 Non-exempt NS FIRE AP OP HZ MT EMT Step 1 41.71$ Step 1 46.08$ Step 1 47.24$ Step 2 43.90$ Step 2 48.51$ Step 2 49.73$ Step 3 46.21$ Step 3 51.06$ Step 3 52.35$ Step 4 48.64$ Step 4 53.75$ Step 4 55.10$ Step 5 51.20$ 8,874.67$ 106,496.00$ Step 5 56.58$ 9,807.20$ 117,686.40$ Step 5 58.00$ 10,053.33$ 120,640.00$ 655 Non-exempt NS FIRE CAPTAIN EMT Step 1 47.20$ Step 1 52.16$ Step 1 53.47$ Step 2 49.68$ Step 2 54.90$ Step 2 56.28$ Step 3 52.29$ Step 3 57.79$ Step 3 59.24$ Step 4 55.04$ Step 4 60.83$ Step 4 62.36$ Step 5 57.94$ 10,042.93$ 120,515.20$ Step 5 64.03$ 11,098.53$ 133,182.40$ Step 5 65.64$ 11,377.60$ 136,531.20$ 654 Non-exempt NS FIRE CAP HAZ MAT EMT Step 1 49.48$ Step 1 54.66$ Step 1 56.04$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) Step 2 52.08$ Step 2 57.54$ Step 2 58.99$ Step 3 54.82$ Step 3 60.57$ Step 3 62.09$ Step 4 57.70$ Step 4 63.76$ Step 4 65.36$ Step 5 60.74$ 10,528.27$ 126,339.20$ Step 5 67.12$ 11,634.13$ 139,609.60$ Step 5 68.80$ 11,925.33$ 143,104.00$ 656 Non-exempt NS FIRE INSPECTOR EMT Step 1 49.55$ Step 1 54.76$ Step 1 56.13$ Step 2 52.16$ Step 2 57.64$ Step 2 59.08$ Step 3 54.90$ Step 3 60.67$ Step 3 62.19$ Step 4 57.79$ Step 4 63.86$ Step 4 65.46$ Step 5 60.83$ 10,543.87$ 126,526.40$ Step 5 67.22$ 11,651.47$ 139,817.60$ Step 5 68.91$ 11,944.40$ 143,332.80$ 657 Non-exempt NS F FGH PRDMD-12.5 EMT Step 1 41.71$ Step 1 46.09$ Step 1 47.24$ Step 2 43.91$ Step 2 48.52$ Step 2 49.73$ Step 3 46.22$ Step 3 51.07$ Step 3 52.35$ Step 4 48.65$ Step 4 53.76$ Step 4 55.11$ Step 5 51.21$ 8,876.40$ 106,516.80$ Step 5 56.59$ 9,808.93$ 117,707.20$ Step 5 58.01$ 10,055.07$ 120,660.80$ 658 Non-exempt NS OPR PRMDC-12.5 EMT Step 1 44.58$ Step 1 49.28$ Step 1 50.50$ Step 2 46.93$ Step 2 51.87$ Step 2 53.16$ Step 3 49.40$ Step 3 54.60$ Step 3 55.96$ Step 4 52.00$ Step 4 57.47$ Step 4 58.91$ Step 5 54.74$ 9,488.27$ 113,859.20$ Step 5 60.49$ 10,484.93$ 125,819.20$ Step 5 62.01$ 10,748.40$ 128,980.80$ 697 Non-exempt NS CAPT PRMDC-12.5 EMT Step 1 52.92$ Step 1 58.48$ Step 1 59.95$ Step 2 55.70$ Step 2 61.56$ Step 2 63.10$ Step 3 58.63$ Step 3 64.80$ Step 3 66.42$ Step 4 61.72$ Step 4 68.21$ Step 4 69.92$ Step 5 64.97$ 11,261.47$ 135,137.60$ Step 5 71.80$ 12,445.33$ 149,344.00$ Step 5 73.60$ 12,757.33$ 153,088.00$ 660 Non-exempt NS HAZ MAT INSPECTOR EMT Step 1 49.55$ Step 1 54.76$ Step 1 56.13$ Step 2 52.16$ Step 2 57.64$ Step 2 59.08$ Step 3 54.90$ Step 3 60.67$ Step 3 62.19$ Step 4 57.79$ Step 4 63.86$ Step 4 65.46$ Step 5 60.83$ 10,543.87$ 126,526.40$ Step 5 67.22$ 11,651.47$ 139,817.60$ Step 5 68.91$ 11,944.40$ 143,332.80$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) 659 Non-exempt NS HAZ MAT SPEC EMT Step 1 51.00$ Step 1 56.35$ Step 1 57.76$ Step 2 53.68$ Step 2 59.32$ Step 2 60.80$ Step 3 56.51$ Step 3 62.44$ Step 3 64.00$ Step 4 59.48$ Step 4 65.73$ Step 4 67.37$ Step 5 62.61$ 10,852.40$ 130,228.80$ Step 5 69.19$ 11,992.93$ 143,915.20$ Step 5 70.92$ 12,292.80$ 147,513.60$ TBD Non-exempt NS FIRE FGHTR EMT HAZ MT PARA Step 1 43.49$ Step 1 48.07$ Step 1 49.28$ Step 2 45.78$ Step 2 50.60$ Step 2 51.87$ Step 3 48.19$ Step 3 53.26$ Step 3 54.60$ Step 4 50.73$ Step 4 56.06$ Step 4 57.47$ Step 5 53.40$ 9,256.00$ 111,072.00$ Step 5 59.01$ 10,228.40$ 122,740.80$ Step 5 60.49$ 10,484.93$ 125,819.20$ Job Code FLSA Shift/ Non-Shift Job Title Steps Rate Monthly Annual Steps Rate Monthly Annual Steps Rate Monthly Annual Salary Effective the pay period following adoption (7.5% Increase) Salary Effective PP including 7/1/2016 2016-14 (10.5% Increase) Salary Effective PP including 06/26/2017 2017-14 (2.5% Increase) TBD Non-exempt NS FIRE AP OP EMT HAZ MT PARA Step 1 46.52$ Step 1 51.40$ Step 1 52.71$ Step 2 48.97$ Step 2 54.11$ Step 2 55.48$ Step 3 51.55$ Step 3 56.96$ Step 3 58.40$ Step 4 54.26$ Step 4 59.96$ Step 4 61.47$ Step 5 57.12$ 9,900.80$ 118,809.60$ Step 5 63.12$ 10,940.80$ 131,289.60$ Step 5 64.70$ 11,214.67$ 134,576.00$ City of Palo Alto (ID # 7018) Finance Committee Staff Report Report Type: Action Items Meeting Date: 5/23/2016 City of Palo Alto Page 1 Summary Title: FY 2017 Finance Committee Budget WrapUp Title: Fiscal Year 2017 Finance Committee Budget Wrap-Up From: City Manager Lead Department: Administrative Services Executive Summary This staff report includes additional information pertaining to the Fiscal Year 2017 Proposed Budget, summarizes changes to the City Manager’s Fiscal Year 2017 Proposed Budget, brings forth recommended actions to revise the Fiscal Year 2017 Proposed Budget, and responds to questions raised by the Finance Committee during previous budget hearings. Please refer to the table of contents below for specific items. Table of Contents 1)ADDITIONAL INFORMATION PERTAINING TO THE FISCAL YEAR 2017 PROPOSED BUDGET... 2 Fire Inspections Staffing: Sworn vs. Non-Sworn ........................................................................ 2 Citywide Sworn vs. Non-Sworn Staffing ..................................................................................... 2 2)WRAP-UP DISCUSSION OF OUTSTANDING ISSUES FROM PRIOR BUDGET HEARING MEETINGS ....................................................................................................................................... 3 Current Status of Proposed Budget ........................................................................................... 3 Budget Process Parking Lot Summary ........................................................................................ 4 Additional Information Pertaining to Parking Lot Issues ........................................................... 7 General Fund ........................................................................................................................... 7 Capital Improvement Fund ...................................................................................................... 8 Fiscal Year 2017 Projected General Fund Budget Stabilization Reserve (BSR) EndingBalance 10 Recommended Changes to the Capital Budget ....................................................................... 10 Capital Reappropriations ....................................................................................................... 10 Changes to the FY 2017 Capital Budget Publication ............................................................. 11 Additional Information for Follow-up Provided by Staff ......................................................... 11 FY 2017 Municipal Fee Schedule ........................................................................................... 11 CMR #6932: ATTACHMENT P City of Palo Alto Page 2 Pension Trust Fund 115 ......................................................................................................... 12 3)SUMMARY OF MAY 2016 FY 2017 BUDGET HEARING PROCEEDINGS .................................. 12 Finance Committee Tentative Motions ................................................................................... 12 General Fund ......................................................................................................................... 12 Enterprise Funds .................................................................................................................... 15 Internal Service Funds ........................................................................................................... 16 Capital Improvement Fund .................................................................................................... 16 Related Memos Distributed At Places ..................................................................................... 17 Referral Items for Staff to Return to Finance Committee at a Later Date ............................... 18 4)LIST OF ATTACHMENTS.......................................................................................................... 18 1)ADDITIONAL INFORMATION PERTAINING TO THE FISCAL YEAR 2017 PROPOSED BUDGET This section provides additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the Fiscal Year 2017 Proposed Budget. Fire Inspections Staffing: Sworn vs. Non-Sworn At the May 10, 2016 Finance Committee Meeting, Councilmember Schmid requested further information about the sworn staffing used to complete various Development Services activities for the Fire Division. It was requested that the staff evaluate and follow-up with the Committee on this staffing strategy. Staff has taken this question under advisement and plan to evaluate Fire and Development Services potential cost savings opportunities by using civilian staff for some of the Fire Prevention Bureau functions. These include plan checking, inspections of fire and life safety systems (fire sprinklers, smoke alarms) and annual risk reduction inspections. It should be noted that any recommendations from this evaluation would require management to meet with the labor unions before any changes are made. Citywide Sworn vs. Non-Sworn Staffing At the May 10, 2016 Finance Committee meeting, Councilmember Filseth asked if there are any sworn employees performing non-sworn activities citywide. Staff have taken this question under advisement and plan to evaluate both the Police and Fire Departments over the course of Fiscal Year 2017 to determine if there are sworn employees performing non-sworn activities. If so, are there areas where these activities could be shifted to non-sworn employees to increase capacity for sworn employees or are there areas where civilianizing positions is possible and would generate cost savings. It should be noted that any recommendations from this evaluation would require management to meet with the labor unions before any changes are made. City of Palo Alto Page 3 2)WRAP-UP DISCUSSION OF OUTSTANDING ISSUES FROM PRIOR BUDGET HEARING MEETINGS This section describes Finance Committee recommended changes made to the budget along with follow-up items as discussed at the Finance Committee budget hearings held on May 3, 5, 10, 12, and 17. During these hearings, only two formal motions (staff recommended) were made to amend the FY 2017 Proposed Capital Budget on May 17th to 1) include a new project in the Electric Fund and 2) amend the Art in Public Places project. Details on these motions can be found later in this report. Therefore, the FY 2017 Proposed Operating and Capital Budgets remain in balance as transmitted to the full City Council April 25th. This section also outlines those items recommended by the Finance Committee to be placed in the “Parking Lot” for further discussion and staff-recommended changes to the proposed budget document. The items in this memorandum and any additional changes made during the May 23rd budget hearing will be incorporated into the budget adoption staff report scheduled to be presented to the City Council on June 13, 2016. Current Status of Proposed Budget As discussed above, only two formal changes to the FY 2017 Proposed Budget have been recommended by the Finance Committee as of May 17, 2016. The Finance Committee tentatively approved staff recommended changes to the Electric Fund and the Capital Improvement Fund. In the Electric Fund, a new Facility Relocation for CalTrain Modernization (EL-17007) capital project with $150,000 in Fiscal Year 2017 was added to study the cost of relocating overhead electric and fiber optic lines to allow for the conversion of CalTrain from diesel to electric power. In the Capital Improvement Fund, the funding in Fiscal Year 2017 for the Art in Public Spaces (AC-86017) capital project was reduced by $156,327 due to a calculation error with an offsetting adjustment to the Infrastructure Reserve Balance. The two adjustments are outlined below with additional details that can be found in the May 17, 2016 At Places memorandum. Proposed Revision Description FY 2017 Current Proposed Budget Tentative Approved Change FY 2017 Revised Proposed Budget Electric Fund Facility Relocation for Caltrain Modernization Project (EL-17007) $0 $150,000 $150,000 Supply Operations Reserve (FY 2017 Proposed Operating Budget pp.102) $24,507,000 ($150,000) $24,357,000 General Capital Fund Art in Public Spaces (AC-86017) $579,840 ($156,327) $423,513 General Capital Fund Infrastructure Reserve (FY 2017 Proposed Capital Budget pp.91) $11,594,442 $156,327 $11,750,769 City of Palo Alto Page 4 Budget Process Parking Lot Summary During the budget hearings, the Finance Committee moved to make various changes to the proposed budget primarily by moving items to the “Parking Lot” for further discussion at a future meeting. This section outlines those items in two formats. 1) by emeeting date and 2)by type of item. Below is a list of actions taken organized by meeting date. May 3, 2016  Non-Departmental: Establish Sustainability Contingency ($250,000; pg. 468)  Non-Departmental: 2016 Elections Funding ($150,000; pg. 468)  Non-Departmental: Establish Budget Uncertainty Reserve ($2.0 million; pg. 468)  Non-Departmental: Transfer from the General Fund: Traffic Signal and Streetlight Electric Costs ($2.2 million; pg. 468)  Non-Departmental: Reduce Transfer to General Capital Improvement Fund (-$1.4 million; pg. 468) May 5, 2016  Fire Department: Realignment of Fire Prevention Staff from Development Services Department ($412,867; pg. 249)  Fire Department: Fire Station Furniture, Fixtures, and Equipment – Phase 2 ($125,000; pg. 249)  Police Department: Project Safety Net – Track Watch Program ($824,000; pg. 341)  Community Services Department: HSRAP Funding ($1.4 million; pg. 221) May 10, 2016  Development Services Department: Realignment of Fire Prevention, Planning, and Public Works’ Staff (-$607,922; pg. 236)  Planning & Community Environment Department: Planning and Transportation Contingency Funding (new item)  Planning & Community Environment Department: Ongoing Operations and maintenance for two new Residential Preferential Parking program ($232,000; new item)  Planning & Community Environment Department: Planning/Development Services Staffing alignment ($95,060; pg. 325) May 12, 2016  Public Works Department General Fund: Public Works Division Reallocations from Development Services ($100,173; pg. 358)  Public Works Department General Fund: Tree Trimming Services 15 year cycle vs 10 year cycle ($170,000; pg. 359)  Potentially offset by a 1.0 position reduction in the General Fund as recommended by the City Manager City of Palo Alto Page 5 May 17, 2016 General Capital Fund Public Works: Municipal Services Center Lighting, Mechanical, & Electrical Improvements potential 1 year project delay ($1.4 million; pg. 148) General Capital Fund Public Works: Municipal Services Center A, B, & C Roof Replacement potential 1 year project delay ($1.9 million; pg. 150) General Capital Fund Community Services: Ramos Park Improvements potential 1 year project delay ($199,019; pg. 226) General Capital Fund Planning & Community Environment: Downtown Parking Wayfinding University Avenue Parking District Fund ($632,076; pg. 278) This table is organized to include the date the action was taken, a short description of the action that was tentatively approved, and the dollar value. Following the table is additional information for a few select items from the list as denoted by a “*” in the chart. These items provide additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the items in the parking lot. Staff hopes that this additional information will facilitate the committee’s review, discussion, and approval of these items. City of Palo Alto Page 6 Date Dept Description GF Rev. All Funds Rev.GF Exp. All Fund Exp GF Net All Funds Net Requirements/Legal Compliance: 5/3 Non-Dept Transfer from the General Fund: Traffic Signal and Streetlight Electric Costs* $0 $0 $2,226 $2,226 ($2,226) ($2,226) 5/3 Non-Dept Reduce Transfer to General Capital Improvement Fund 0 0 (1,400) (1,400) 1,400 1,400 5/3 Non-Dept 2016 Elections Funding 0 0 150 150 (150) (150) 5/10 DSD DSD Realignment: of Fire Prevention, Planning, and Public Works' Staff 0 0 (608) (608)608 608 5/5 Fire DSD Realignment: of Fire Prevention Staff from Development Services Department 0 0 413 413 (413) (413) 5/10 PCE DSD Realignment: Planning/Development Services Staffing Alignment 0 0 95 95 (95) (95) 5/12 PW DSD Realignment: Public Works Division Reallocations from Development Services 0 0 100 100 (100) (100) Funding Source: 5/5 Police Project Safety Net - Track Watch Program 0 0 824 824 (824) (824) 5/17 GF Cap Downtown Parking Wayfinding (University Ave. Parking District Fund) 0 600 0 632 0 (32) Potential One Year Deferral: 5/17 GF Cap Municipal Service Center Lighting, Mechanical, and Electric Improvements* 0 491 0 1,433 0 (942) 5/17 GF Cap Municipal Service Center A, B, & C Roof Replacement* 0 1,083 0 1,942 0 (859) 5/17 GF Cap Ramos Park Improvements*0 0 0 199 0 (199) Policy/Service Levels/Project Priorities: 5/3 Non-Dept Establish Sustainability Contingency*0 0 250 250 (250) (250) 5/3 Non-Dept Establish Budget Uncertainty Reserve 0 0 2,000 2,000 (2,000) (2,000) 5/5 Fire Fire Station Furniture, Fixtures, and Equipment - Phase 2 0 0 125 125 (125) (125) 5/5 CSD Human Services Resource Allocation Process (HSRAP) - Operating Budget pg 221 5/10 PCE Planning and Transportation Contingency Funding* (staff rec. funding level) 0 0 500 500 (500) (500) 5/10 PCE Ongoing Operations & Maintenance of 2 new RPPs (Council 5/9/16)* 0 0 230 230 (230) (230) 5/12 PW Tree Trimming Services - 15 year cycle versus 10 year cycle 0 0 170 170 (170) (170) 5/12 All 1.0 position reduction in the General Fund as advised by the City Manager $0 $2,174 $5,075 $9,281 ($5,075) ($7,107) * These items have additional information provided following the chart. Summary of "Parking Lot" Items TBD TBD Total Parking Lot Items City of Palo Alto Page 7 Additional Information Pertaining to Parking Lot Issues General Fund Transfer from the General Fund: Traffic Signal and Streetlight Electric: $2.2 million/Reduce Transfer to General Capital Improvement Fund: -$1.4 million As part of the Electric Fund Cost of Services Analysis (COSA), electricity costs associated with City streetlight and traffic signal costs were identified as more appropriately aligned with the General Fund. The proposed change in Electric Utility rates this year necessitates this transfer in order to ensure the new rate structure fully complies with state law requirements. Therefore, in order to partially offset this increased cost in the General Fund, staff recommended that the transfer from the General Fund to the Capital Improvement Fund be reduced resulting in a $21 million transfer from the General Fund in FY2017. Planning and Community Environment Contingency: $500,000 The Finance Committee discussed the Planning & Community Environment Department’s need for additional resources given the community focus on planning issues and the Council’s “Built Environment” priority. Members suggested the need for additional architectural/urban design expertise and the possibility of additional spending related to transportation demand management. As a result, the Committee placed the idea of a planning and transportation contingency in the “Parking Lot”. Staff recommends a $500,000 contingency similar to the Fiscal Year 2016 Transportation Contingency. In FY 2016, a $500,000 contingency was set aside for transportation initiatives. By the end of this fiscal year, it is estimated that $430,000 of the contingency funds will have been spent or obligated for various projects including support of the downtown Residential Preferential Parking program (RPP), a coordinated traffic signal program for San Antonio Road, and a speed survey contract. In FY 2017, a $500,000 contingency for planning and transportation initiatives is recommended and may support similar transportation initiatives as well as planning initiatives such as the Council’s request for Eichler-specific design guidelines. Use of funds from the planning and transportation contingency for specific items during the year would be subject to City Council approval. Staff recommends funding for this be reduced from the Budget Stabilization Reserve. Residential Preferential Parking Funding: $280,000 On May 9, 2016, the City Council asked the Finance Committee to include funding in the FY 2017 Operating Budget for new Residential Preferential Parking (RPP) districts in Southgate and Evergreen Park (Capital costs are already addressed in the CIP). A preliminary estimate suggests these programs will require an additional $280,000 on an ongoing annual basis. Of this funding, $50,000 was already included in the development of the FY 2017 Proposed Operating Budget. In order to provide sufficient funding in FY 2017, staff recommends the following adjustments to the FY 2017 Proposed Operating Budget resulting in a net reduction to the Budget Stabilization Reserve of $85,000: City of Palo Alto Page 8 Action Source Use FY 2017 Budget Stabilization Reserve (source of funding is the estimated FY 2016 Transportation Contingency Reserve remaining balance) $70,000 ($155,000) FY 2017 budget proposal for California Avenue Retail Feasibility Study (FY 2017 Proposed Operating Budget page 327) ($75,000) Residential Preferential Parking Operations $230,000 The ongoing costs of this program will be included as part of the development of the FY 2018 Long Range Financial Forecast. Sustainability Contingency Reserve: $250,000 On May 3, 2016, the Finance Committee approved a tentative motion to place the recommended $250,000 Office of Sustainability Contingency funding in the parking lot for further consideration. Historically, the Office of Sustainability has operated with limited resources including a staff of approximately 1.6 full time equivalent positions, staff matrixed from other departments, and a reliance on contractors to fulfill its mandate. The proposed contingency reserve is recommended to be used for the following activities necessary to execute the recently City Council approved Sustainability and Climate Action Plan (S/CAP): S/CAP research and analysis: The Office of Sustainability proposed staffing resources in conjunction with other departmental staff will spend Fiscal Year 2017 working to develop S/CAP work plans, in response to Council’s April 18, 2016 direction. It is anticipated that funding will be partially used to engage contract services to refine S/CAP implementation scenarios, adoption rates, estimated costs and projected greenhouse gas (GHG) and financial impacts, in response to community and Council input. (Estimated cost: $100,000) Management of Existing and Pending Pilot projects and grants: Contractual services are anticipated to be necessary to manage the following active and anticipated initiatives to be pursued: EV charging infrastructure; Electric Vehicle outreach and education (e.g., "ride and drive” events); Sustainability financing strategies; MaaS (mobility as a service) pilots; Other short term consulting projects. (Estimated cost: $100,000) Community Engagement: Various methods and programs are necessary to ensure proper community engagement for sustainability initiatives including: Web site development ($10,000); Development of educational materials ($15,000); Digital Commenter management ($10,000); Interactive modeling tools to support dynamic community exploration of S/CAP options ($15,000). (Estimated cost: $50,000) This funding will increase the Office of Sustainability effectiveness and responsiveness to emerging opportunities in the implementation of Sustainability programs, including the Sustainability and Climate Action Plan (S/CAP). Capital Improvement Fund City of Palo Alto Page 9 At the May 17, 2016 meeting, the Committee discussed the potential of moving the construction phases of various Capital projects from Fiscal Year 2017 to Fiscal Year 2018 as well as the proposed and potential uses of revenues from the University Avenue Parking District Fund. To assist the Committee in the further evaluation of these projects, below is additional information to articulate the funding mechanisms. Municipal Service Center Lighting, Mechanical, and Electrical Improvements (PF-16006): $1.4 million Of the $1.4 million project, the proposed construction budget in FY 2017 is $1.1 million, partially offset by the following transfers totaling $491,307 outlined below. The balance of the construction cost, $576,021, was to be paid for by the Capital Improvement Fund Infrastructure Reserve. Source FY 2017 Construction Budget ($s) Transfer from the Utilities Administration Fund 305,239 Transfer from the Vehicle Replacement and Maintenance Fund 195,991 Transfer from the Refuse Fund (9,923) Sub-total Transfers to Capital: $491,307 Capital Improvement Fund – Infrastructure Reserve 576,021 Total: 1,067,328 Municipal Service Center A, B, & C Roof Replacement (PF-17000): $1.9 million Of the $1.9 million project, all funding was designated for construction costs partially offset by the following transfers totaling $1.0 million outlined below. The balance of the construction cost, $859,328, was to be paid for the Capital Improvement Fund Infrastructure Reserve. Source FY 2017 Construction Budget ($s)) Transfer from the Utilities Administration Fund 684,000 Transfer from the Vehicle Replacement and Maintenance Fund 380,000 Transfer from the Refuse Fund 19,000 Sub-total Transfers to Capital: 1,083,000 Capital Improvement Fund – Infrastructure Reserve 859,328 Total: 1,067,328 Ramos Park Improvements (PG-14000): $190,257 City of Palo Alto Page 10 The entirety of the $190,257 construction budget included in the FY 2017 Proposed Capital Budget was anticipated to come from the Capital Improvement Fund Infrastructure Reserve. Downtown Parking Wayfinding (PL-15004): $632,076 The FY 2017 Proposed Capital Budget recommends a project construction budget of $632,076 primarily funded by a recommended $600,000 transfer from the University Avenue Parking District Fund. The balance of the construction cost, $32,076, was anticipated to come from the Capital Improvement Fund Infrastructure Reserve. Fiscal Year 2017 Projected General Fund Budget Stabilization Reserve (BSR) Ending Balance To date, the Finance Committee has not made any tentative changes to the Proposed Budget that resulted in any change to the proposed $4.9 million use of the Budget Stabilization Reserve, leaving the recommended FY 2017 Reserve balance of $35.6 million or nearly 18% intact. However, included in this report is a recommended further use of this reserve by an additional $585,000 in net adjustments, decreasing the projected BSR balance from $35.6 million to $35.0 million, or 17.6% of the Proposed Budget. The General Fund BSR policy maintains a reserve level of 15-20 percent of the General Fund operating budget, with a targeted goal of 18.5 percent. This amount is $1.8 million below the 18.5 percent target. Recommended Changes to the Capital Budget Capital Reappropriations As described in the Proposed Capital Budget document and discussed during the Finance Committee Budget Hearings, the City Council-approved a change in the method for accounting for capital budget reappropriations are included in the 2017-2021 Proposed Capital Budget Improvement Program (CIP). Previously, any unspent capital funds carried forward from one fiscal year to the next automatically, as long as the project was active. As a result of this October 2014 change to the Municipal Code, City Council authorization is now required for reappropriations. The FY 2017 budget process continues this process with the current FY 2017 Proposed Capital Budget including approximately $58.0 million in reappropriated funds, across all funds. In the time since the Proposed Budget figures were developed (late winter and early spring of 2016), departments have re-reviewed current year estimates and the reappropriation amounts built into the proposed CIP. Additional reappropriation adjustments are recommended as part of this wrap-up memorandum in order to update the FY 2017 Capital Budget with current, more refined estimated activity levels in Fiscal Year 2016. Cumulatively, this re-review of projects has resulted in staff’s recommendation to increase the Fiscal Year 2017 Proposed Budget by a net total of $21.7 million, from $170.5 million to $192.2 million, and are recommended in the following funds: City of Palo Alto Page 11 Fund Recommended Fiscal Year 2017 Funding Adjustment Airport Fund $17,415 Capital Improvement Fund $1,838,846 Electric Fund $4,347,956 Fiber Optic Fund $158,000 Gas Fund $4,805,264 Refuse Fund $(92,176) Storm Drainage Fund $531,162 Technology Fund $1,504,355 Vehicle Replacement and Maintenance Fund $55,253 Wastewater Collection Fund $1,841,549 Wastewater Treatment Fund ($3,768,814) Water Fund $10,447,742 Total All Funds $21,722,552 These adjustments, as outlined in detail in Attachment - A, will ensure that funds are available at the onset of Fiscal Year 2017 for projects that have experienced delays in the current year and will reduce the Fiscal Year 2017 Proposed budget for projects that experienced higher than anticipated expenditure levels within Fiscal Year 2016. These projects are at various stages of their pan and the funding is required to fulfill the commitment and/or contractual obligations. Changes to the FY 2017 Capital Budget Publication At the Finance Committee hearing regarding the General Capital Improvement Fund on May 17, 2016, the Committee members discussed the presentation of a few projects and the descriptions of others. This can also be seen in a few of the tentative motions to add clarifying language to projects such as the Street Lights Improvement project to include “to preserve and repair at sensitive locations and settings” language. Staff has taken these questions and comments under advisement and will reassess the categorization of funding between project phases such as design and construction and make corrections to the categorization as appropriate as part of the production of the Final FY 2017 Adopted Capital Budget. In addition, the descriptions and “Potential Board/Commission Review section will be updated to include additional commission such as the Parks Commission as requested by the committee as appropriate. Additional Information for Follow-up Provided by Staff FY 2017 Municipal Fee Schedule When the amendments to the Municipal Fee Schedule for Fiscal Year 2017 were discussed by the Finance Committee, the motion that tentatively approved the Schedule also included direction to recommend to City Council that a referral be made to the Policy and Services City of Palo Alto Page 12 Committee to explore a low income fee program, specifically with regards to Community Services. Pension Trust Fund 115 As part of the Long Range Financial Forecast review with the City Council on April 4, 2016 and the transmittal of the FY 2017 Proposed Operating and Capital Budget to the City Council on April 25, 2016 conversations over establishing a 115 Pension Trust Fund continued. Strong support was voiced for this concept and it was requested to be considered as part of the FY 2017 Budget Hearings. Thus far, no actions have been taken as part of the budget hearings. Below is a summary of staff and Council actions to date:  FY 2015 General Fund Budget Stabilization Reserve: $1.3 million in one-time funding was set aside from the General Fund BSR from excess revenues and expenditure savings from FY 2015. This funding remains unspent and unallocated.  Staff returned to the Finance Committee on April 5, 2016 to review various options to address the unfunded pension liability and provide direction on a funding plan (CMR #6792). The Finance Committee approved the following motion: Chair Filseth moved, seconded by Council Member Wolbach that the Finance Committee direct Staff to begin the process of identifying a partner to establish a Section 115 Trust with the $1.3 million from the Fiscal Year 2016 General Fund Budget as the initial payment and direct Staff to explore additional contributions to the Section 115 Trust with contributions from other Funds. Recommend Staff and Council consider any possible Fiscal Year 2017 contributions during the 2017 budget process. Also, direct Staff to return to Council with the recommendation agendized as an Action Item on the City Council Agenda. 3) SUMMARY OF MAY 2016 FY 2017 BUDGET HEARING PROCEEDINGS The items listed below summarize motions made and/or action items made by the Finance Committee as of May 17 that result in a fiscal change or other recommended change to the Fiscal Year 2017 Proposed Budget. Finance Committee Tentative Motions General Fund City Attorney Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 City Attorney budget (4-0) City Auditor Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 City Auditor budget. (4-0) City of Palo Alto Page 13 City Clerk Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 City Clerk budget. (4-0) City Council Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 City Council budget. (4-0) City Manager Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 City Manager budget. (4-0) Office of Sustainability Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Office of Sustainability budget. (3-1, Wolbach no) Human Resources Department Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Human Resources Operating Budget. (4-0) Administrative Services Department Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Administrative Services Department budget. (4-0) Non-Departmental Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Non-Departmental Operating Budget with the exception of the following Budget Adjustments which will be moved to the parking lot for future discussion: Establish Sustainability Contingency, 2016 Elections Funding, Establish Budget Uncertainty Reserve, Transfer from General Fund for Traffic Signal and Streetlight Electric Costs and Reduce Transfer to General Capital Improvement Fund. (3-1, Wolbach no) Fire Department Motion: On May 5, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Fire Department Operating Budget with the exception of the following budget adjustments which will be moved to the parking lot for future discussion: Realignment of Fire Prevention Staff from Development Services Department, and Fire Station Furniture, Fixtures, and Equipment - Phase 2. (2-2, Wolbach, Holman no) Office of Emergency Services Department City of Palo Alto Page 14 Motion: On May 5, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Office of Emergency Services, Operating Budget. (4-0) Police Department Motion: On May 5, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Police Department Budget with the exception of the following budget adjustments which will be moved to the parking lot for future discussion: Track Watch, $824,000. (3-1, Schmid no) Community Services Department Motion: On May 5 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Community Services Department Budget with the exception of the Human Services Resource Allocation Process Funding (HSRAP). (4-0) Library Department Motion: On May 5, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Library Department, Operating Budget. (4-0) Development Services Department Motion: On May 10, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Development Services Department budget with the exception of the following budget adjustments which will be moved to the parking lot for future discussion: Realignment of the Fire Prevention, Planning, and Public Works’ Staff in the amount of $607,922. (4-0) Planning and Community Environment Department Motion: On May 10, 2016, the Finance Committee recommended tentative approval the Planning and Community Environment Fiscal Year 2017 Operating Budget, and to place in the parking lot, funding for a “contingency fund.” (4-0) Motion: On May 10, 2016, the Finance Committee recommended tentative addition of the funding to address costs for the two new Residential Preferential Parking (RPP) districts to the parking lot. (4-0) Public Works Department Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2016 Public Works General Fund Department budget . (3-0, 1 absent) Motion: On May 12, 2016, the Finance Committee recommended placing $135,000 in incremental costs to increase the tree trimming cycle from 15 years to 10 years as well as a potential direction to the City Manager to identify a position in the General Fund that could offset the potential increase in costs in the parking lot City of Palo Alto Page 15 for future discussion. (3-0, 1 absent) Enterprise Funds Utilities Department Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Utilities Department Electric Fund operating and capital budgets. (3-0, 1 absent) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the inclusion of $150,000 for the Facility Relocation for Caltrain Modernization Project in the final recommended FY 2017-2021 Capital Improvement Plan with a corresponding decrease in the Distribution Reserve in the Electric Fund. (3-0, 1 absent) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Utilities Department Fiber Fund operating and capital budgets. (3-0, 1 absent) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Utilities Department Gas Fund operating and capital budgets. (3-0, 1 abstain) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Utilities Department Wastewater Collection Fund operating and capital budgets. (3-0, 1 absent) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Utilities Department Water Fund operating and capital budgets. (4-0) Storm Drain Fund Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Storm Drain Fund operating and capital budgets. (3-0, 1 absent) Refuse Fund Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Refuse Fund operating and capital budget. (3-0, 1 absent) Wastewater Treatment Fund Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Wastewater Treatment Fund operating and capital budgets. City of Palo Alto Page 16 (3-0, 1 absent) Airport Fund Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Airport Fund operating and capital budget. (3-0, 1 absent) Internal Service Funds Information Technology Department Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Information Technology Department budget. (4-0) Vehicle Replacement Fund Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Vehicle Replacement Fund operating and capital budgets. (3-0, 1 absent) Employee Benefits Funds Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 General Benefits and Workers’ Compensation Funds budget. (4- 0) Motion: On May 10, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Retiree Health Benefit Fund budget. (4-0) General Liability Fund Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 General Liability Fund budget. (4-0) Printing and Mailing Fund Motion: On May 3, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Printing and Mailing Fund budget. (4-0) Capital Improvement Fund Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Buildings and Facilities Capital Budget and to place the construction costs for the Municipal Service Center Lighting, Mechanical and Electrical Improvements and the Minicipal Service Center A, B, & C Roof Replacmeents projects in the parking lot. (3-1) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of City of Palo Alto Page 17 the Parks and Open Space Capital Budget including the addition of the corrected funding levels for the Art in Public Spaces capital project as outlined by Staff with the exception of placing the Ramos Park Improvements project in the parking lot. (4-0) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Streets and Sidewalks Capital Budget and include language in the description of the Street Lights Improvement project to include “to preserve and repair at sensitive locations and settings.” (4-0) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Traffic and Transportation Capital Budget with the exception of the Downtown Parking Wayfinding Project in the parking lot. (2-1, 1 absent) Motion: On May 17, 2016, the Finance Committee recommended tentative approval of the Cubberley Infrastructure Capital Budget and for the Cubberley Infrastructure Master Plan go to the Parks and Recreation Commission. (3-0, 1 absent) Special Revenue Funds Motion: On May 10, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Special Revenue Funds, Parking Permit District Fund, the Stanford Development Agreement Fund, and the Other Special Revenue Fund Budgets. (4-0) Municipal Fee Schedule Motion: On May 12, 2016, the Finance Committee recommended tentative approval of the Fiscal Year 2017 Municipal Fee Schedule and to ask Council to refer to the Policy and Services Committee a review of Low-income rates for municipal fee rates. (3-0, Wolbach absent) Related Memos Distributed At Places Throughout the Finance Committee Budget Hearings, various memorandums were distributed “at places” in order to respond to inqueries made by the committee or provide additional pertinant information at staffs behest. Below is a sumary of the topics included in those memorandums. May 3, 2016  FY 2017 Proposed Operating Budget Replacement Pages May 10, 2016  Community Services HSRAP Allocations  Community Services Staffing by Division City of Palo Alto Page 18  Healthcare Actuarial Analysis  Storm Drain Oversight Committee Findings May 12, 2016  Community Services HSRAP Allocations – Historical Funding Levels  Development Services Development Fee Cost Recovery  Housing In-Lieu Fund Balance  Development Services Performance Measure Goals May 17, 2016  Street Trees Contract Increase vs. Cycle Time  Electric Fund Capital Improvement Project: Facility Relocation for CalTrain Modernization Project  Art in Public Places  Planning Transportation Commission Findings  Zero Waste Coordinator to Environmental Specialist Reclassification  Unfunded Liability & Salary Growth Assumptions In addition, summary presentations were given at each hearing providing high level overiews of each item. Those presentations as well as the memos listed above can be referenced on the City of Palo Alto’s Budget Office website under “Budget Hearing 2017” at: http://www.cityofpaloalto.org/gov/depts/asd/budget.asp Referral Items for Staff to Return to Finance Committee at a Later Date Below is a list of referral items for staff to return to the Finance Committee at a later date that emerged through the course of the FY 2017 Budget Hearings:  Review of Information Technology performance measures  Development Services Fire Sworn vs. Non-Sworn Staffing  Citywide Sworn vs. non-sworn staffing Staff will return to the Committee regarding these items throughout FY 2017. 4) LIST OF ATTACHMENTS Attachments:  FY 2017 CIP Reappropriation (PDF) Project ID Project Title FY 2017 Funding: Proposed Capital Budget Document FY 2017 Funding Adjustment FY 2017 Revised Funding: Proposed Capital Budget Document Airport Fund AP-16002 Wildlife Hazard Plan $ 6,000 $ 17,415 $ 23,415 Total Airport Fund $ 6,000 $ 17,415 $ 23,415 Capital Improvement Fund AC-86017 Art In Public Spaces $ 425,513 $ 110,910 $ 536,423 OS-00001 Open Space Trails and Amenities $ 308,618 $ (72,759) $ 235,859 OS-00002 Open Space Lakes And Pond Maintenance $ 45,000 $ 20,409 $ 65,409 OS-09001 Off-Road Pathway Resurfacing And Repair $ 178,621 $ 20,459 $ 199,080 PE-09003 City Facility Parking Lot Maintenance $ 651,788 $ (44,194) $ 607,594 PE-09006 Mitchell Park Library and Community Center $ 2,861,558 $ 22,369 $ 2,883,927 PE-09010 Library & Community Center - Temporary Facilities $ - $ 117,155 $ 117,155 PE-11000 Rinconada Library New Construction and Improvements $ 1,037,274 $ (11,996) $ 1,025,278 PE-12017 City Hall First Floor Renovations $ - $ 161,995 $ 161,995 PE-13020 Byxbee Park Trails $ 15,000 $ 4,183 $ 19,183 PE-14015 Lucie Stern Buildings Mechanical and Electrical Upgrades $ 1,763,247 $ 1,054,723 $ 2,817,970 PE-14018 Baylands Boardwalk Improvements $ 400,000 $ 22,191 $ 422,191 PE-15001 New Public Safety Building $ 3,583,423 $ (369,711) $ 3,213,712 PE-15003 Fire Station 3 Replacement $ 6,293,471 $ 59,232 $ 6,352,703 PE-15007 New Downtown Parking Garage $ 1,320,977 $ 100,000 $ 1,420,977 PE-15011 Ventura Buildings Improvements $ 689,330 $ 89,998 $ 779,328 PE-15020 Civic Center Waterproofing Study and Repairs $ 89,065 $ 154,048 $ 243,113 PE-15029 Baylands Nature Interpretive Center Facility Improvements $ 631,542 $ 45,004 $ 676,546 PE-86070 Street Maintenance $ 6,800,843 $ (166,228) $ 6,634,615 PF-00006 Roofing Replacement $ 384,913 $ (28,178) $ 356,735 PF-02022 Facility Interior Finishes Replacement $ 501,915 $ (2,120) $ 499,795 PF-07011 Roth Building Maintenance $ 48,201 $ (2,313) $ 45,888 PF-14002 Fire Station 1 Improvements $ 390,890 $ (11,870) $ 379,020 PF-14004 California Avenue Parking District Parking Improvements $ 32,400 $ (2,800) $ 29,600 PF-93009 Americans With Disabilities Act Compliance $ 343,379 $ 23,884 $ 367,263 PG-06001 Tennis and Basketball Court Resurfacing $ 508,560 $ (11,100) $ 497,460 PG-09002 Park and Open Space Emergency Repairs $ 139,623 $ (28,466) $ 111,157 PG-09003 Park Maintenance Shop Remodel $ - $ 6,000 $ 6,000 PG-12004 Sarah Wallis Park Improvements $ - $ 48,002 $ 48,002 PG-15000 Buckeye Creek Hydrology Study $ 41,202 $ 149,180 $ 190,382 PL-00026 Safe Routes To School $ 212,737 $ 250,639 $ 463,376 PL-04010 Bicycle and Pedestrian Plan-Implementation Project $ 3,360,021 $ (1,117,226) $ 2,242,795 PL-05030 Traffic Signal and Intelligent Transportation System Upgrades $ 417,529 $ 567,968 $ 985,497 PL-11001 Dinah Summerhill Pedestrian/Bicycle Path $ - $ 113,641 $ 113,641 PL-11002 California Avenue- Transit Hub Corridor Project $ - $ 199,705 $ 199,705 PL-12000 Transportation and Parking Improvements $ 442,949 $ 131,523 $ 574,472 PL-14000 El Camino Real & Churchill Intersection Improvements-Design $ 84,974 $ 21,555 $ 106,529 CAPITAL BUDGET REAPPROPRIATIONS ATTACHMENT A A - 1 Project ID Project Title FY 2017 Funding: Proposed Capital Budget Document FY 2017 Funding Adjustment FY 2017 Revised Funding: Proposed Capital Budget Document CAPITAL BUDGET REAPPROPRIATIONS PL-14001 Midtown Connector $ 118,984 $ 91,234 $ 210,218 PL-15001 Embarcadero Road Corridor Improvements $ 541,983 $ 28,129 $ 570,112 PL-15002 Parking Guidance Systems, Access Controls, and Revenue Collection Equipmen $ - $ 129,724 $ 129,724 PL-15004 Parking Wayfinding $ 632,076 $ 25,524 $ 657,600 PO-05054 Street Lights Improvements $ 423,029 $ 44,953 $ 467,982 PO-11000 Sign Reflectivity Upgrade $ 191,936 $ (97,525) $ 94,411 PO-11001 Thermoplastic Lane Marking and Striping $ 99,276 $ 29,376 $ 128,652 PO-12001 Curb and Gutter Repairs $ 485,444 $ (38,381) $ 447,063 Total Capital Improvement Fund $ 36,497,291 $ 1,838,846 $ 38,336,137 Electric Fund EL-02010 SCADA System Upgrades $ 270,000 $ 30,000 $ 300,000 EL-02011 Electric Utility Geographic Information System $ 165,000 $ 200,000 $ 365,000 EL-10006 Rebuild Underground District 24 $ - $ 1,075,560 $ 1,075,560 EL-10009 Street Light System Conversion Project $ - $ 30,000 $ 30,000 EL-11003 Rebuild Underground District 15 $ 307,434 $ 144,181 $ 451,615 EL-11008 Rebuild Underground District 19 $ - $ 12,262 $ 12,262 EL-11010 Underground District 47-Middlefield, Homer, Webster, Addison $ - $ 744,038 $ 744,038 EL-11014 Smart Grid Technology Installation $ 672,670 $ 109,096 $ 781,766 EL-12001 Underground District 46 - Charleston/El Camino Real $ 622,315 $ 28,651 $ 650,966 EL-13006 Sand Hill / Quarry 12kV Tie $ - $ 157,259 $ 157,259 EL-13007 Underground Distribution System Security $ 240,534 $ 50,000 $ 290,534 EL-13008 Upgrade Electric Estimating System $ 103,650 $ 25,000 $ 128,650 EL-14004 Maybell 1&2 4/12kV Conversion $ - $ 185,372 $ 185,372 EL-14005 Reconfigure Quarry Feeders $ 774,758 $ 11,606 $ 786,364 EL-15000 Colorado/Hopkins System Improvement $ 775,000 $ 50,000 $ 825,000 EL-15001 Electric Substation Battery Replacement $ - $ 142,117 $ 142,117 EL-16000 Rebuild Underground District 26 $ 50,000 $ (50,000) $ - EL-16001 Underground System Rebuild $ 580,000 $ (180,000) $ 400,000 EL-16002 Capacitor Bank Installation $ 275,000 $ 75,000 $ 350,000 EL-89028 Electric Customer Connection $ 3,108,000 $ 534,000 $ 3,642,000 EL-89031 Communications System Improvements $ 100,000 $ 187,759 $ 287,759 EL-89038 Substation Protection Improvements $ 450,000 $ 281,812 $ 731,812 EL-89044 Substation Facility Improvements $ 195,000 $ 204,243 $ 399,243 EL-98003 Electric System Improvements $ 2,000,000 $ 300,000 $ 2,300,000 Total Electric Fund $ 10,689,361 $ 4,347,956 $ 15,037,317 Fiber Optic Fund FO-10001 Fiber Optics Network System Improvements $ 200,000 $ 158,000 $ 358,000 Total Fiber Optic Fund $ 200,000 $ 158,000 $ 358,000 ATTACHMENT A A - 2 Project ID Project Title FY 2017 Funding: Proposed Capital Budget Document FY 2017 Funding Adjustment FY 2017 Revised Funding: Proposed Capital Budget Document CAPITAL BUDGET REAPPROPRIATIONS Gas Fund GS-03009 System Extensions - Unreimbursed $ 198,500 $ 128,690 $ 327,190 GS-11000 Gas Main Replacement - Project 21 $ - $ 100,000 $ 100,000 GS-11002 Gas Distribution System Improvements $ 231,913 $ 143,714 $ 375,627 GS-12001 Gas Main Replacement - Project 22 $ - $ 3,568,560 $ 3,568,560 GS-13001 Gas Main Replacement - Project 23 $ 3,550,650 $ 37,500 $ 3,588,150 GS-13002 Gas Equipment and Tools $ 100,000 $ 70,106 $ 170,106 GS-14004 Gas Distribution System Model $ - $ 106,791 $ 106,791 GS-15001 Security at City Gas Receiving Stations $ - $ 150,000 $ 150,000 GS-80017 Gas System, Customer Connections $ 1,228,500 $ 194,976 $ 1,423,476 GS-80019 Gas Meters and Regulators $ 355,030 $ 304,927 $ 659,957 Total Gas Fund $ 5,664,593 $ 4,805,264 $ 10,469,857 Refuse Fund RF-16001 Household Hazardous Waste Station Improvements $ 240,522 $ (92,176) $ 148,346 Total Refuse Fund $ 240,522 $ (92,176) $ 148,346 Storm Drainage Fund SD-11101 Channing Avenue/Lincoln Avenue Storm Drain Improvements $ 107,687 $ 25,000 $ 132,687 SD-13003 Matadero Creek Storm Water Pump Station and Trunk Line Improvements $ 5,820,910 $ 21,462 $ 5,842,372 SD-06101 Storm Drain System Replacement And Rehabilitation $ 1,776,811 $ 484,700 $ 2,261,511 Total Storm Drainage Fund $ 7,705,408 $ 531,162 $ 8,236,570 Technology Fund TE-00010 Telephone System Replacement $ - $ 143,194 $ 143,194 TE-05000 Radio Infrastructure Replacement $ 1,626,163 $ 576,841 $ 2,203,004 TE-06001 Library RFID Implementation $ - $ 314,589 $ 314,589 TE-09000 Public Safety Computer-Aided Dispatch Replacement $ 495,548 $ (75,380) $ 420,168 TE-10001 Utilities Customer Bill System Improvements $ 250,000 $ 175,656 $ 425,656 TE-11001 Library Computer System Software $ - $ 200,868 $ 200,868 TE-11002 Mobile In-Car Video System Replacement $ - $ 30,902 $ 30,902 TE-12001 Development Center Blueprint Technology Enhancements $ 729,652 $ (102,921) $ 626,731 TE-13001 Interactive Voice Response $ - $ 106,181 $ 106,181 TE-14002 Virtual Library Branch $ - $ 170,425 $ 170,425 Total Technology Fund $ 3,101,363 $ 1,540,355 $ 4,641,718 Vehicle Replacement Fund VR-15000 Scheduled Vehicle and Equipment Replacement - Fiscal Year 2015 $ 2,444,674 $ (72,606) $ 2,372,068 VR-16000 Scheduled Vehicle and Equipment Replacement - Fiscal Year 2016 $ 2,293,348 $ 127,859 $ 2,421,207 Total Vehicle Replacement Fund $ 4,738,022 $ 55,253 $ 4,793,275 ATTACHMENT A A - 3 Project ID Project Title FY 2017 Funding: Proposed Capital Budget Document FY 2017 Funding Adjustment FY 2017 Revised Funding: Proposed Capital Budget Document CAPITAL BUDGET REAPPROPRIATIONS Wastewater Collection Fund WC-10002 Wastewater Collection System Rehabilitation/Augmentation Project 23 $ - $ 100,000 $ 100,000 WC-11000 Wastewater Collection System Rehabilitation/Augmentation Project 24 $ - $ 7,066 $ 7,066 WC-12001 Wastewater Collection System Rehabilitation/Augmentation Project 25 $ - $ 369,419 $ 369,419 WC-13001 Wastewater Collection System Rehabilitation/Augmentation Project 26 $ - $ 130,700 $ 130,700 WC-14001 Wastewater Collection System Rehabilitation/Augmentation Project 27 $ - $ 498,169 $ 498,169 WC-15001 Wastewater Collection System Rehabilitation/Augmentation Project 28 $ 3,183,000 $ 330,000 $ 3,513,000 WC-15002 Wastewater System Improvements $ 239,000 $ 53,567 $ 292,567 WC-80020 Sewer System, Customer Connections $ 394,000 $ 207,439 $ 601,439 WC-99013 Sewer Lateral/Manhole Rehab/Replacement $ 618,000 $ 145,189 $ 763,189 Total Wastewater Collection Fund $ 4,434,000 $ 1,841,549 $ 6,275,549 Wastewater Treatment Fund WQ-04011 Facility Condition Assessment and Retrofit $ 2,811,765 $ (303,544) $ 2,508,221 WQ-10001 Plant Master Plan $ 3,183,417 $ (333,933) $ 2,849,484 WQ-14001 New Dewatering and Loadout Facility $ 11,672,744 $ (1,867,627) $ 9,805,117 WQ-80021 Plant Equipment Replacement $ 4,835,365 $ (1,263,710) $ 3,571,655 Total Wastewater Treatment Fund $ 22,503,291 $ (3,768,814) $ 18,734,477 Water Fund WS-07000 Water Regulation Station Improvements $ - $ 135,541 $ 135,541 WS-07001 Water Recycling Facilities $ 200,000 $ 193,358 $ 393,358 WS-08001 Water Reservoir Coating Improvements $ - $ 320,682 $ 320,682 WS-08002 Emergency Water Supply Project $ - $ 271,208 $ 271,208 WS-09000 Seismic Water System Upgrades $ - $ 1,881,097 $ 1,881,097 WS-11000 Water Main Replacement - Project 25 $ - $ 725,386 $ 725,386 WS-11003 Water Distribution System Improvements $ 739,000 $ 126,582 $ 865,582 WS-11004 Water System Supply Improvements $ 239,000 $ 17,700 $ 256,700 WS-12001 Water Main Replacement - Project 26 $ - $ 5,904,489 $ 5,904,489 WS-13001 Water Main Replacement - Project 27 $ 5,680,651 $ 525,565 $ 6,206,216 WS-13002 Water General Equipment/Tools $ 50,000 $ 20,685 $ 70,685 WS-13004 Asset Management Mobile Deployment $ 82,163 $ (82,163) $ - WS-15004 Water System Master Plan $ - $ 155,520 $ 155,520 WS-80015 Water Meters $ 565,000 $ 252,092 $ 817,092 Total Water Fund $ 7,555,814 $ 10,447,742 $ 18,003,556 GRAND TOTAL $ 103,335,665 $ 21,722,552 $ 125,058,217 ATTACHMENT A A - 4 CMR #6932: ATTACHMENT Q CITYWIDE FUNDS OVERVIEW CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2017 PROPOSED BUDGET 63 Citywide Average Salary CATEGORY Mgmt/ Professional Utilities Mgmt/ Professional Fire Chief Association IAFF Police Mgmt Association PAPOA SEIU Weighted Average Citywide Average Salary & Benefits Full-Time Equivalent (FTE)224.35 48.00 5.00 99.00 7.00 83.00 585.75 1,052.10 Percent of City 21.3%4.6%0.5%9.4%0.7%7.9%55.7%100% Salary (1)$132,796 $155,920 $175,005 $119,381 $190,906 $123,945 $84,435 $105,553 In-Lieu Holiday n/a n/a n/a $4,829 n/a $2,420 $177 $744 Incentive Pay (2)n/a n/a n/a $776 n/a $1,154 $357 $363 Overtime n/a n/a n/a $14,280 n/a $13,012 $4,334 $4,783 Management Leave (80 Hours)$5,108 $5,997 $6,731 n/a $7,343 n/a n/a $11,772 Pension Employer Portion Misc 28.390%; Safety 43.426%$37,701 $44,266 $75,998 $54,276 $82,903 $55,377 $24,123 $33,878 Pension Employee Portion Paid by City FCA 3.9% (3) n/a n/a $6,825 n/a n/a n/a n/a $32 Medicare $1,926 $2,261 $2,538 $1,731 $2,768 $1,797 $1,224 $1,531 Medical $16,416 $19,602 $18,675 $17,398 $20,317 $16,642 $17,091 $17,084 Dental/Vision $2,142 $2,349 $2,219 $2,371 $2,508 $2,165 $2,097 $2,152 Retiree Medical (4)$5,474 $7,063 $8,200 $7,556 $11,714 $9,530 $1,566 $5,842 Workers' Compensation $1,901 $1,454 n/a $3,421 n/a $3,603 $1,258 $1,778 Life Insurance/LTD/SUI $672 $672 $672 $672 $672 $672 $672 $672 Non-salary Benefits (5)$3,567 $3,210 $2,647 $147 $2,647 $3,493 $157 $1,309 Average Salary and Benefits $207,702 $242,791 $299,509 $226,838 $321,778 $233,811 $137,149 $187,493 Isolate Holiday Pay from Salary Category Salary, includes holidays $132,796 $155,920 $175,005 $119,381 $190,906 $123,945 $84,435 $105,553 Holidays (assumes 11 9-hour days)$6,321 $7,421 $8,330 $5,682 $9,086 $5,899 $4,019 $5,024 Salary, excludes holidays $126,476 $148,499 $166,675 $113,699 $118,820 $118,046 $80,416 $100,529 1) Salary is calculated at actual pay rate (base pay and special pays, as applicable) as of February 2016 adjusted for step increases in accordance with applicable Memoranda of Understanding 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) The City will pay 3.9% of FCA employee pension contributions in accordance with the Memorandum of Understanding. 4) Annual amount incurred for active employees (normal cost only). 5) Non-salary Benefits include professional development for Management, Utilities Management, FCA and PMA; tuition reimbursement for FCA and PMA; and management excess benefit for Management, Utilities Management, FCA and PMA. Does not include administrative fees for General Benefits and Workers' Compensation Funds. Attachment A INFORMATION TECHNOLOGY 284 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2017 PROPOSED BUDGET Manager Information Technology Security 1.00 1.00 1.00 1.00 —141,855 Principal Business Analyst ——1.00 1.00 —137,113 Principal Management Analyst 1.00 1.00 ———— Senior Business Analyst 2.00 —2.00 2.00 —250,701 Senior Management Analyst —2.00 1.00 1.00 —114,940 Senior Technologist 12.00 13.50 15.00 16.00 1.00 1,975,109 Technologist 4.00 2.00 2.00 1.00 (1.00)116,262 Sub-total: Full-Time Equivalent Positions 32.20 31.70 34.10 35.10 1.00 4,211,546 Temporary/Hourly 1.96 1.96 1.48 0.98 (0.50)171,222 Total Positions 34.16 33.66 35.58 36.08 0.50 4,382,768 Budget Reconciliation Positions Expenditures Revenues Net Technology Fund Prior Year Budget 35.58 20,481,617 14,907,317 5,574,300 Base Adjustments One-Time Prior Year Expenditures and Revenues Deleted Council Chamber Recording Equipment — (350,000) (187,145) (162,855) Enterprise Resource Planning System Selection — (250,000)— (250,000) IT Service Management System — (200,000)— (200,000) Docusign First Year Costs — (24,500) (13,100) (11,400) Pitney Bowes Utility Bill Printing Upgrade — (12,000)— (12,000) Utilities Customer Service Bill Improvements —— (243,000) 243,000 Capital Improvement Project Funding — (5,160,457)— (5,160,457) Restoration of Prior Year One-time deletions — 50,000 — One-Time Prior Year Expenditures and Revenues —(5,946,957)(443,245) Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments 0.50 362,132 — 362,132 Capital Improvement Funding Adjustments — 3,374,732 1,140,912 2,233,820 Application Replacement and Maintenance — 197,557 — 197,557 Staffing Job Classification FY 2014 Actuals FY 2015 Actuals FY 2016 Adopted Budget FY 2017 Proposed Budget FY 2017 Change $ FY 2017 Salary 50,000 (5,503,712) Attachment B INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2017 PROPOSED BUDGET 285 Telecommunication Services — 16,600 — 16,600 Infrastructure Replacement and Maintenance — 41,877 — 41,877 Rental Expense Adjustment — 8,907 — 8,907 Desktop Replacement and Maintenance — (40,120)— (40,120) Enterprise Systems Service and Maintenance — (20,357)— (20,357) Administrative Services Department Staffing Alignment — (6,563)— (6,563) General Fund Administrative Cost Plan Allocated Charges Adjustments — 24,359 — 24,359 General Liability Insurance Allocated Charges Adjustments — (35,336)— (35,336) Printing and Mailing Allocated Charges Adjustment —(390)—(390) Utilities Allocated Charges Adjustments — 3,062 — 3,062 Vehicle Allocated Charges Adjustments — 4,051 — 4,051 Charges to Other Funds - Information Technology Services ——551,952 (551,952) — (37,410)— (37,410) —— 69,126 (69,126) 0.50 3,893,101 1,761,990 2,131,111 36.08 18,427,761 16,226,062 2,201,699 —125,000 — 125,000 — 120,000 — 120,000 — 100,000 — 100,000 — 59,024 59,024 — — 50,000 — 50,000 — 35,000 35,000 — — 20,331 20,331 — —509,355 114,355 395,000 Transfers to Other Funds Information Technology Surcharge Revenue Adjustments to Costs of Ongoing Activities Total FY 2017 Base Budget Budget Adjustments 1 SAP Consultant for Human Resources 2 Data Center Failover Redundancy 3 Accela Enhancements 4 HelpDesk Desktop Staffing 5 Project Management Application Pilot 6 Annual Security Testing 7 Information Technology Operations Staffing Total Budget Adjustments Total FY 2017 Proposed Budget 36.08 18,937,116 16,340,417 2,596,699 Budget Reconciliation Positions Expenditures Revenues Net Technology Fund Attachment B 5/10/2016 City of Palo Alto M E M O R A N D U M TO: Finance Committee DATE: May 10, 2016 SUBJECT: Additional Information Pertaining to the Fiscal Year 2017 Proposed Operating Budget This memorandum transmits additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the Fiscal Year 2017 Proposed Operating Budget. Community Services HSRAP Allocations (Finance Committee Budget Hearing May 5th; Agenda Item #5) At the May 5th Finance Committee meeting, the Committee inquired about Human Services Resource Allocation Process (HSRAP). Below are details about the programs funding history, funding cycle, and reserve funding. HSRAP Funding Cycle HSRAP funding is allocated to a limited number of approved organizations on a two-year cycle. The current grant cycle is from July 1, 2015 – June 30, 2017, therefore FY 2017 will be year two of the current cycle. Year two funding levels are not guaranteed, but have historically been allocated at the same level as the previous year, unless a CPI is approved or a funding reduction is proposed as part of a city-wide budget shortfall. Total funding for FY 2016 is $436,659 and 14 agencies are receiving funding. The total funding requested at the beginning of this current cycle was $617,855. Only one agency’s request for $500,000 (more than the total HSRAP funding available in FY 2016) was denied, as the request was to provide a similar service to one that Stanford law students are providing local agencies pro-bono at this time. HSRAP Funding History Please see below for HSRAP funding history for the last three HSRAP cycles (two years each – FY 2012 and FY 2013, FY 2014 and FY 2015, FY 2016 and FY 2017). Note that totals do not include funding for Avenidas and Palo Alto Community Child Care during that time in order to provide a more accurate comparison to the current funding amount. Historical HSRAP Funding Levels FY 2012 FY 2013 FY 2014 FY2015 FY2016 FY2017 $292,558 $300,737 $348,163 $425,594 $436,659 $448,013 2.8% 15.8% 22.2% 2.6% 2.6% 1 5/10/2016 During the Fiscal Year 2014 HSRAP allocation discussion, the Human Relations Commission (HRC) reported that in order to fund two more agencies it needed to recommend cutting all agencies 5% across the board (except for Avenidas & PACCC) to free up funding to allocate to the new agencies. The Finance Committee was not supportive of this approach and through a series of discussions with the Finance Committee and with the full City Council, an increase of 7.1% across the board (including Avenidas & PACCC), plus additional funding to include three new grantees was approved, resulting in a year-over-year increase of 15.8%. During the Fiscal Year 2015 budget allocation discussion for the HSRAP program, the HRC brought to the attention of the Finance Committee the fact that HSRAP used to receive a regular CPI increase until 2003 when it was temporarily suspended (never to be reinstated) and that funding was further reduced in 2007 and 2009. By FY 2015 funding levels were virtually the same as FY 2005. The Council responded by instituting a 2.6% (CPI) increase across the board plus an additional $68,000 to be awarded as part of an additional allocation process to address unmet and emergency needs. A $50,000 HSRAP Reserve fund was also created, as discussed below. For the Fiscal Year 2016 and Fiscal Year 2017 funding cycle, a 2.6 percent CPI was assessed over the FY 2015 allocation in each year of the cycle. In regards to comparing whether Palo Alto is doing more or less than comparable cities, this is difficult to do as each city invests in a unique mix of human services, some with general fund dollars, some with Community Development Block Grant Funding, and some both. It should be noted that Palo Alto funds non-HSRAP general fund human services expenditures such as senior services, child care subsidies, mediation services, a special contract for outreach to the homeless in downtown Palo Alto and a special contract with the County of Santa Clara for case management and housing subsidies for homeless individuals. HSRAP Reserve Fund As discussed above, the City Council authorized the creation of a HSRAP Reserve Fund on June 16, 2014. The Reserve had an initial investment of $50,000 with the option that future City Councils could add additional funding. It was stated that utilization of the Reserve Fund would be strictly under the auspices of the City Council in order to assist with any funding shortfalls for HSRAP in the future. Thus, Council could utilize the Reserve Fund rather than decrease funding for HSRAP. To date, the fund has not been utilized and no additional funding has been added to the reserve. Staff is recommending that Council consider expanding the use of the HSRAP Reserve Fund to also address the following: • To provide one-time funding to current HSRAP grantees to address an emerging or emergency need that was not evident or at a level of crisis during the original funding period. (HSRAP year one or two) • To provide one-time funding to a non-HSRAP nonprofit organization in the community to address an existing critical need for which normal funding is no longer available and for which a demonstrated human consequence will occur if funding is not obtained. (Non-HSRAP grantees) If approved, a final and more detailed funding request process, including scope, criteria, and eligibility would be drafted by staff, with the assistance of the HRC, and submitted for review and approval by Council. Staff envisions a review and recommendation role for the HRC similar to their involvement in the HSRAP process. If approved, staff in the Community Service Department’s Office of Human Services, would provide process oversight and management. In addition, if this expansion is approved, staff would 2 5/10/2016 request an additional allocation through the FY 18 budget process to replenish the HSRAP Reserve Fund to a pre-designated minimum balance if any spending from the reserve occurred during FY 17. Avenidas & Palo Alto Community Child Care (PACCC) For clarification, Avenidas and PACCC are no longer part of the HSRAP process. They were removed, at their own request, starting with the FY16 budget year. They are now a direct service contractor with the City (term is July 1, 2015 – June 30, 2020) and their compensation was negotiated as part of the contract approval process. There is no CPI language in their contracts and an increase was not part of the motion when their contracts were approved. There is general contract language in the compensation section of their contracts that reads “The parties agree that the amount of compensation for the second through the fifth contract years may be adjusted up or down, depending on availability of funds.” They were given a 2.6% CPI as part of FY16 budget process because Council wanted to provide them parity with the HSRAP grantees. That CPI was also applied in the development of the Fiscal Year Proposed Operating Budget 2017 to continue to provide parity. Community Services Staffing by Division (Finance Committee Budget Hearing May 5th; Agenda Item #5) At the May 5th Finance Committee meeting, the Committee inquired about the net addition of 2.80 positions, when only 1.93 positions were detailed as part of the budget adjustments. Through the base budget process, an additional 0.87 FTE (0.77 FTE part-time, and 0.10 full-time) was added to the CSD Budget, resulting in a net increase of 2.80 positions from the Fiscal Year 2016 Adopted Operating Budget to the Fiscal Year 2017 Proposed Operating Budget. This increase is primarily a correction to the FY 2016 Adopted Budget, which allocated funding for temporary salaries without identifying the associated hourly FTE equivalent. Therefore, these transactions, which are identified as “Corrections” in the table below, did not impact funding levels, rather more accurately reflected the budgeted funding as temporary FTE. A reconciliation of all FTE changes are detailed in the table on the following page. FTE Reconciliation for Community Services Department Action FTE Change Base Budget FTE Changes Arts and Science Staffing Correction 0.49 Custodial Staffing Correction 0.96 Middle School Athletics Staffing Correction 0.28 Hourly Consolidation and Staffing Alignment (0.57) Project Manager (added through CMR 6401) 0.10 MakeX Reallocation from Library 0.48 Human Services Staffing Alignment (0.02) Youth Community Services Staffing Alignment (0.85) Base Budget Sub-Total: 0.87 Proposed Budget FTE Changes CSD Service Delivery Enhancements 0.68 Open Space Technicians 0.96 Bryant Street Garage Program Staffing 0.29 Proposed Budget Sub-Total: 1.93 Grand Total: 2.80 3 4 CITY OF PALO ALTO RETIREE HEALTHCARE PLAN June 30, 2015 GASB 45 Actuarial Valuation Results John E. Bartel, President Mary Beth Redding, Vice President & Actuary Deanna Van Valer, Assistant Vice President & Actuary Adam Zimmerer, Actuarial Analyst Bartel Associates, LLC May 9, 2016 Contents O:\Clients\City of Palo Alto\Projects\OPEB\2015 Val\Reports\BA PaloAltoCi 16-05-09 OPEB 6-30-15 Valuation Results.docx Topic Page Benefit Summary 1 Implied Subsidy 9 Participant Statistics 11 Actuarial Assumptions Highlights 17 Actuarial Methods 22 Assets 23 Results 25 Results - Details 39 Sensitivity Analysis 48 Actuarial Certification 51 Exhibits 52 Results by Fund and Department E-47 ATTACHMENT A A - 1 May 9, 2016 1 BENEFIT SUMMARY  Eligibility  Retire directly from the City under CalPERS (age 501 and 5 years of CalPERS service or disability)  Medical Provider  CalPERS health plans (PEMHCA)  CalPERS administrative fees paid by City  Retiree Medical Hired < 1/1/04 (1/1/05 SEIU, 1/1/06 PAPOA)  GROUP 1: Retired < 1/1/07 (3/1/09 for PAPOA)  Full premium up to family coverage  GROUP 2: Retired between 1/1/07 (3/1/09 for PAPOA) and 5/1/11 (12/1/11 IAFF, 6/1/12 PMA, 4/1/15 PAPOA)  Same as above but premium limited to 2nd most expensive Basic (non-Medicare) medical plan in the Bay Area Region (Blue Shield NetValue in 2015, Blue Shield in 2016) 1 Age 52 for Miscellaneous New Hires under PEPRA May 9, 2016 2 BENEFIT SUMMARY  Retiree Medical Hired < 1/1/04 (1/1/05 SEIU, 1/1/06 PAPOA) (continued)  GROUP 3: Retired ≥ 5/1/11 (12/1/11 IAFF, 5/1/12 FCA, 6/1/12 PMA, 4/1/15 PAPOA)  UTLM; FCA; PMA retired prior to 1/11/16; IAFF retired prior to 4/1/16: 90% of premium up to 90% of Group 2 cap  PAPOA retired prior to 4/1/15 get 100% (same as Group 2)  SEIU retired prior to 4/1/16; Mgmt/Conf; & any IAFF/SEIU not electing Group 42: limited to flat dollar caps same as active contribution (for Mgmt/Conf, commences for payments beginning after 1/1/15) 2015 2016 2017 2018 Single $ 708 $ 743 $ 773 $ 804 2-Party 1,415 1,485 1,544 1,606 Family 1,840 1,931 2,008 2,088  One-time irrevocable election for current active employees of PAPOA, PMA, IAFF, & SEIU to opt into Group 4  All active Group 3 PAPOA & PMA elected into Group 43  All active Group 3 IAFF & SEIU assumed to elect into Group 4 2 IAFF & SEIU elections not yet held. All Group 3 members assumed to elect into Group 4, same as PAPOA and PMA. 3 PAPOA & PMA members who did not elect into Group 4 would have switched to active contribution dollar caps. ATTACHMENT A A - 2 May 9, 2016 3 BENEFIT SUMMARY  Retiree Medical Hired ≥ 1/1/04 (1/1/05 SEIU, 1/1/06 PAPOA) & All Current Active PAPOA, PMA, SEIU & IAFF4  GROUP 4: Government Code §22893 “Vesting Schedule” (based on all CalPERS Service)5: Years of Service % < 10 0% 10 50% ↓ ↓ > 20 100%  100% vesting for disability retirements  Vesting applies to 100/90 formula amounts, which are the maximum amounts payable by the City (retirees pay any difference between these amounts and actual premiums): 2015 2016 Single $ 655 $ 705 2-Party 1,246 1,343 Family 1,605 1,727  If have 20 years City service do not need to retire directly from City 4 As of the date of this valuation, SEIU and IAFF have not yet held the individual elections, but all members are assumed to elect into Group 4, same as both PAPOA and PMA. 5 Minimum 5 years City Service. May 9, 2016 4 BENEFIT SUMMARY  Dental, Vision & Medicare Part B  None  Surviving Spouse Benefit  100% of retiree benefit continues to surviving spouse if retiree elects CalPERS pension survivor allowance  Waived Re- election  Waived retirees/beneficiaries may re-elect coverage at a future date  Pay-As-You- Go ($000s) Fiscal Year Cash Implied Subsidy Total 2014/15 $ 8,995 $ 1,916 $ 10,911 2013/14 7,317 - 7,317 2012/13 8,766 - 8,766 2011/12 8,165 - 8,165 2010/11 6,216 - 6,216 2009/10 5,519 - 5,519 ATTACHMENT A A - 3 May 9, 2016 5 BENEFIT SUMMARY Changes to Benefits Since Prior Valuation Group Prior Benefit Current Benefit  GROUP 3 Mgmt/Conf (eff 1/1/15)  90% of premium limited to 2nd most expensive Basic (non- Medicare) medical plan in the Bay Area Region  Same as SEIU GROUP 3: 100% of premium limited to fixed dollar caps (subject to change beginning 2016)  GROUP 3 PAPOA (eff 4/1/15)  Same as GROUP 2 benefit: Full premium limited to 2nd most expensive Basic (non- Medicare) medical plan in the Bay Area Region  All active members elected to have GROUP 4 benefit: Vesting schedule applied to 100/90 formula amounts (additional detail on slide 3)  GROUP 3 PMA (eff 1/11/16)  90% of premium limited to 2nd most expensive Basic (non- Medicare) medical plan in the Bay Area Region  All active members elected to have GROUP 4 benefit: Vesting schedule applied to 100/90 formula amounts (additional detail on slide 3) May 9, 2016 6 BENEFIT SUMMARY  GROUP 3 IAFF (eff 4/1/16)  90% of premium limited to 2nd most expensive Basic (non- Medicare) medical plan in the Bay Area Region  Assume all active members elect into GROUP 4 benefit. Vesting schedule applied to 100/90 formula amounts (additional detail on slide 3)  GROUP 3 SEIU (eff 4/1/16)  Premium limited to active contribution flat dollar caps  Assume all active members elect into GROUP 4 benefit. Vesting schedule applied to 100/90 formula amounts (additional detail on slide 3) ATTACHMENT A A - 4 May 9, 2016 7 BENEFIT SUMMARY Monthly Benefit Cap Amounts 2015 2016 Group Single 2-Party Family Single 2-Party Family Group 16 $928.87 $1,857.74 $2,415.06 $1,033.86 $2,067.72 $2,688.04 Group 2 870.60 1,741.20 2,263.56 1,016.18 2,032.36 2,642.07 Group 37 783.54 1,567.08 2,037.20 914.56 1,829.12 2,377.86 Group 3 Flat8 708.00 1,415.00 1,840.00 743.00 1,485.00 1,931.00 Group 49 655.00 1,246.00 1,605.00 705.00 1,343.00 1,727.00 % Decrease from Group 1 (assumes Group 1 is in most expensive plan) Group 2 6% 6% 6% 2% 2% 2% Group 3 16% 16% 16% 12% 12% 12% Group 3 Flat 24% 24% 24% 28% 28% 28% Group 4 29% 33% 34% 32% 35% 36% 6 No cap for Group 1. Amount shown is most expensive Non-Medicare Bay Area region premium. 7 For FCA and UTLM only. All active Group 3 PAPOA, PMA and IAFF members assumed to elect Group 4. 8 For Mgmt/Conf only. All active SEIU Group 3 members assumed to elect Group 4. 9 Assuming 20 years of service/100% vesting. May 9, 2016 8 BENEFIT SUMMARY This page intentionally blank ATTACHMENT A A - 5 May 9, 2016 9 IMPLIED SUBSIDY  For PEMHCA, employer cost for allowing retirees to participate at active rates.  Kaiser Bay Area plan:  The City included the implied subsidy beginning with the June 30, 2013 valuation. 25 30 35 40 45 50 55 60 64 65 70 75 80 85 Premium 746 746 746 746 746 746 746 746 746 297 297 297 297 297 Male Cost by Age 246 268 322 402 513 664 856 1,093 1,328 285 268 336 360 358 Female Cost by Age 483 575 591 581 620 724 866 1,023 1,199 265 256 301 319 318 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 May 9, 2016 10 IMPLIED SUBSIDY Estimated 2016/17 Implied Subsidy Transfer Illustration (Amounts in 000’s) Before Actives Retirees Total  Total Premiums10 $ 16,486 $ 11,042 $ 27,528  Participant Contributions11 - (620) (620)  City Contributions 16,486 10,422 26,908 After Actives Retirees Total  Total Premiums $ 16,486 $ 11,042 $ 27,528  Participant Contributions - (620) (620)  Implied Subsidy Transfer (2,203) 2,203 -  City Contributions 14,283 12,625 26,908 10 Estimated premiums based on the 6/30/15 participant data. 11 Assumes City pays full active participant premiums. ATTACHMENT A A - 6 May 9, 2016 11 PARTICIPANT STATISTICS Participant Statistics 12 From 1/1/09 Milliman report 13 All retirements included. Disability retirement data unreliable. 6/30/0912 6/30/11 6/30/13 6/30/15  Actives  Count 955 923 948 955  Average Age 45.3 44.7 45.2 45.3  Average City Service 11.2 10.8 10.8 10.8  Average PERS Service 13.7 11.7 11.9  Average Salary $103,602 $86,007 $86,271 $91,714  Total Salary (000’s) $98,940 $79,384 $81,785 $87,586  Retirees:  Count 710 860 968 1,007  Average Age 67.2 67.0 68.2 68.9  Average Retirement Age o Service n/a 55.513 57.8 57.7 o Disability n/a n/a 45.3 45.6 May 9, 2016 12 PARTICIPANT STATISTICS Historical Active and Retiree Counts14 14 Retiree count is subscribers: retirees and surviving spouses ATTACHMENT A A - 7 May 9, 2016 13 PARTICIPANT STATISTICS Participant Statistics June 30, 2015 15 Includes Group 3 PAPOA & PMA (elected Group 4 benefits) and Group 3 IAFF & SEIU (assumed to elect Group 4). 16 Actual 2014/15 pay paid for those hired < 7/1/14. New hire pay is annualized. 17 Includes retirees who have waived coverage. Group 1 Group 2 Group 3 Group 415 Total  Actives  Count n/a n/a 107 848 955  Average Age n/a n/a 52.0 44.5 45.3  Average Entry Age n/a n/a 32.6 34.8 34.5  Average City Service n/a n/a 19.4 9.7 10.8  Average PERS Service n/a n/a 20.2 10.9 11.9  Average Salary n/a n/a $129,385 $ 86,960 $ 91,714  Total Salary (000’s)16 n/a n/a $ 13,844 $ 73,742 $ 87,586  Retirees17:  Count 598 307 92 10 1,007  Average Age 73.8 63.0 57.5 62.3 68.9  Avg Service Ret Age 57.8 58.0 56.6 60.0 57.7  Avg Disability Ret Age 45.4 46.7 44.9 50.0 45.6 May 9, 2016 14 PARTICIPANT STATISTICS Participant Statistics June 30, 2013 18 Group 3 PAPOA have Group 2 benefits 19 Actual 2012/13 pay paid for those hired < 7/1/12. New hire pay is annualized. 20 Includes retirees who have waived coverage. Group 1 Group 2 Group 318 Group 4 Total  Actives  Count n/a n/a 518 430 948  Average Age n/a n/a 49.1 40.6 45.2  Average Entry Age n/a n/a 32.0 35.4 33.5  Average City Service n/a n/a 16.5 4.0 10.8  Average PERS Service n/a n/a 17.1 5.2 11.7  Average Salary n/a n/a $92,284 $79,027 $86,271  Total Salary (000’s)19 n/a n/a $47,803 $33,982 $81,785  Retirees20:  Count 617 308 34 9 968  Average Age 72.6 61.0 56.0 56.1 68.2  Avg Service Ret Age 57.9 58.0 55.7 57.5 57.8  Avg Disability Ret Age 45.2 46.8 47.5 31.1 45.3 ATTACHMENT A A - 8 May 9, 2016 15 PARTICIPANT STATISTICS Data Reconciliation 6/30/2013 to 6/30/2015 Actives Retirees Disabled Benefic. Total  June 30, 2013 948 702 180 86 1,916  New Hires/Rehires 158 - - - 158  Disabled (3) - 3 - -  Terminated21 (93) - - - (93)  Died with Benefic.22 - (10) - 10 -  Died, no Beneficiary - (22) (6) (6) (34)  Retired (56) 56 - - -  Reinstatement 1 (1) - - -  Retired  Disabled - (1) 1 -  Adjustment/Other - 4 2 9 15  June 30, 2015 955 728 180 99 1,962 21 All actives in June 30, 2013 valuation and not in June 30, 2015 valuation assumed terminated. 22 Retirees in the June 30, 2013 valuation not in the June 30, 2015 valuation assumed deceased. May 9, 2016 16 PARTICIPANT STATISTICS Medical Plan Participation – June 30, 2015 Retirees23 Medical Plan24 Actives < 65 ≥ 65 Total Miscellaneous/Safety M S M S M S M S Anthem Select 5% 1% 1% 0% 0% 0% 0% 0% Anthem Traditional 17% 16% 10% 16% 1% 0% 5% 9% Blue Shield 9% 4% 22% 6% 27% 16% 25% 11% Blue Shield NetValue 2% 4% 1% 3% 0% 0% 0% 2% Kaiser 44% 33% 27% 20% 31% 34% 29% 26% PERS Choice 13% 2% 30% 2% 23% 6% 26% 4% PERS Select 0% 0% 1% 0% 0% 0% 1% 0% PERSCare 2% 1% 4% 3% 15% 32% 10% 16% PORAC 1% 34% 1% 47% 1% 12% 1% 32% UnitedHealthcare 8% 6% 4% 3% 1% 0% 2% 2% Total 100% 100% 100% 100% 100% 100% 100% 100% 23 Under 65 only includes employees who retired on or after June 30, 2008; over 65 only includes retirees up to age 72. 24 All Anthem and Blue Shield Medicare retirees are assumed to switch to UnitedHealthcare in 2016 when their current plans are no longer offered. ATTACHMENT A A - 9 May 9, 2016 17 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2013 Valuation June 30, 2015 Valuation  Valuation Date  June 30, 2013  Fiscal Years 2014/15 & 2015/16 ARCs (end of year)  1 year lag  June 30, 2015  GASB 45 ARC for Fiscal Year 2016/17. ADC25 for Fiscal Year 2017/18. (end of year)  1 year lag  Funding Policy  Full Pre-funding through CalPERS trust (CERBT) asset allocation #1  Same  Discount Rate  7.61% (no Margin for Adverse Deviation)  7.25%, net of expenses based on CERBT Fund 1  Payroll Increases  Aggregate Increases – 3.25%  Merit Increases – CalPERS 1997-2007 Experience Study  Aggregate Increases – 3.25%  Merit Increases – CalPERS 1997-2011 Experience Study 25 Actuarially Determined Contribution May 9, 2016 18 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2013 Valuation June 30, 2015 Valuation  Medical Trend Increase from Prior Year Year Non-Medicare Medicare 2013 Premiums 2014 Premiums 2015 8.0% 8.3% 2016 7.5% 7.8% 2017 7.0% 7.2% 2018 6.5% 6.7% 2019 6.0% 6.1% 2020 5.5% 5.6% 2021+ 5.0% 5.0% Increase from Prior Year Year Non-Medicare Medicare 2013 n/a 2014 n/a 2015 Premiums 2016 Premiums 2017 7.0% 7.2% 2018 6.5% 6.7% 2019 6.0% 6.1% 2020 5.5% 5.6% 2021+ 5.0% 5.0%  Increase to Dollar Caps for SEIU Group 3  ½ of Medical Trend, not less than assumed inflation (3.0%)26  Same  Now also applies to Mgmt/Conf Group 3  Participation at Retirement  Group 3: 90%  Group 4: 85%  Groups 3 & 4: 90%  Based on Plan Experience27 26 Increase is for purposes of financial projection only and does not imply any obligation to increase the cap in the future. 27 Actual participation percentages for Group 3 since 6/30/13 are 73% Miscellaneous and 93% Safety, or 78% overall. We recommend continued monitoring but do not update this year. Group 4 has very little actual experience, but those with less than 10 years service will receive no benefit at all (assumption applies only to those with more than 10 years service). ATTACHMENT A A - 10 May 9, 2016 19 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2013 Valuation June 30, 2015 Valuation  Retirement, Mortality, Termination, Disability  CalPERS 1997-2007 Experience Study  Mortality improvement projection Scale AA Misc Fire & Police Tier 1 2.7%@55 3%@50 Exp. RA28 59.3 55.7 & 54.5 Tier 2 2%@6029 3%@5530 Exp. RA 61.1 n/a & 59.7 PEPRA31 2.5%@67 2.7%@57 Exp. RA 61.0 n/a & 56.8  CalPERS 1997-2011 Experience Study  Mortality improvement Scale MP-14 modified to converge to ultimate mortality improvement rate in 2022 Misc Fire & Police Tier 1 2.7%@55 3%@50 Exp. RA25 58.6 56.7 & 55.0 Tier 2 2%@6029 3%@5530 Exp. RA 60.9 n/a & 57.3 PEPRA28 2.5%@67 2.7%@57 Exp. RA 60.9 n/a & 57.7 28 Retirement Age 29 Applies to non-PEPRA (Classic) employees hired after 7/17/2010 30 Applies to non-PEPRA (Classic) Police employees hired after 12/7/2012 and Fire employees hired after 6/7/2012 31 Applies to employees hired after 1/1/2013 and considered “New Members” under PEPRA May 9, 2016 20 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2013 Valuation June 30, 2015 Valuation  Medical Plan at Retirement & Retirees Attaining age 65  Rates based on elections in January 2014 (see slide E-39 for further details)  Rates based on elections in June 2015 and January 2016 (see slide E-39 for further details)  Family Coverage at Retirement  Actives  Misc : 15% until age 65  Safety : 40% until age 65  Retirees: based on current elections until age 65  Same  Based on Plan Experience  Waived Retiree Re-election  Pre-65 – 20% re-elect at age 65  Post-65 – 0%  Same  ACA Excise Tax  N/A  Estimate by 2% load on cash subsidy ATTACHMENT A A - 11 May 9, 2016 21 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2013 Valuation June 30, 2015 Valuation  Basis for Assumptions  No experience study performed for this plan  CalPERS experience studies used, since covered employees are also in CalPERS plans.  Mortality improvement is the most recent Society of Actuaries table, modified slightly as, in our estimate, appropriate for application to CalPERS base mortality table  Inflation based on our estimate for the Plan’s very long time horizon.  Age-based claims are based on Society of Actuaries publications. May 9, 2016 22 ACTUARIAL METHODS Method June 30, 2013 Valuation June 30, 2015 Valuation  Cost Method  Entry Age Normal Level % of Pay  Same  Unfunded Liability Amortization  30 years closed period  28 years closed period  Sensitivity analysis: 24 & 20 years  Actuarial Asset Value  Market Value of Assets32  Same  Future New Entrants  Closed group – no new participants  Same  Implied Subsidy  Implied subsidy valued  Same  Plan Continuance  For purposes of financial projections, the plan and benefits are assumed to continue unchanged. The calculation of this accounting obligation does not imply that there is any legal liability to provide or continue providing the benefits valued. 32 Using Market Value of Assets to determine the ARC will result in more volatile future ARCs than if a smoothed Market Value were used. ATTACHMENT A A - 12 May 9, 2016 23 ASSETS Market Value of Plan Assets – CERBT (Amounts in 000’s) 2010/11 2011/12 2012/13 2013/14 2014/15 Proj. 2015/1633  MVA (Beg. of Year) $ 34,014 $ 44,774 $ 49,238 $ 60,070 $ 75,363 $ 78,578  Contributions 2,447 4,419 5,248 4,295 3,371 3,169  Benefit Payments34 - - - - - -  Admin. Expenses (50) (52) (80) (91) (76) (65)  Investment Return 8,363 97 5,664 11,088 (80) 59  MVA (End of Year) 44,774 49,238 60,070 75,363 78,578 81,741  Approx. Annual Return 24.4% 0.1% 11.2% 18.2% (0.2%) 0.0% 33 Projected from actual 12/31/2015 balance using assumed rate of return for last half of fiscal year. 34 Benefit Payments made outside of trust by City. Refer to Slide 3 for fiscal year amounts. May 9, 2016 24 ASSETS Historical Returns35 35 Projected return for 2015/16 uses actual investment return for first half of fiscal year and assumed rate of return for last half of fiscal year ATTACHMENT A A - 13 May 9, 2016 25 RESULTS Actuarial Obligations (Amounts in 000’s) 6/30/13 Valuation 6/30/15 Valuation 6/30/13 Proj. 6/30/14 6/30/15 Proj.6/30/16  Discount Rate 7.61% 7.25%  Present Value of Benefits  Actives $ 105,008 $ 125,764  Retirees 139,378 157,547  Total 244,386 283,311  Actuarial Accrued Liability  Actives 64,264 77,248  Retirees 139,378 157,547  Total 203,642 $ 213,458 234,795 $ 245,908  Actuarial Value of Assets(MV) 60,070 73,124 78,578 81,741  Unfunded AAL 143,572 140,333 156,217 164,167  Funded Ratio 29% 34% 33% 33%  Normal Cost 5,674 6,340  Pay-As-You-Go Cost (Cash) 9,152 10,353  Pay-As-You-Go Cost (IS) 1,916 2,203 May 9, 2016 26 RESULTS Historical Funded Status (Amounts in 000’s) $0 $50,000 $100,000 $150,000 $200,000 $250,000 1/1/11 6/30/11 6/30/13 6/30/15 Retiree pay-go Retiree AAL less pay-go Active AAL MVA ATTACHMENT A A - 14 May 9, 2016 27 RESULTS Actuarial Gain/Loss (Amounts in 000’s) AAL (MVA) UAAL  Actual 6/30/13 $ 203,642 $ (60,070) $143,572  Expected 6/30/16 233,639 (89,796) 143,843  Assumption Changes  CalPERS 97-11 Experience Study 1,298 1,298  Projected Mortality Improvement 7,908 7,908  Medical Plan Election (965) (965)  Excise Tax 3,709 3,709  Discount Rate: 7.61% → 7.25% 10,153 10,153  Contribution (Gain)/Loss (169) (169)  Investment (Gain)/Loss 8,224 8,224  Plan Changes → Slides 5 & 6 2,493 2,493  Experience (Gains)/Losses  Premiums/Caps < Expected (6,786) (6,786)  EE Elections – Coverage Changes (4,130) (4,130)  Demographic & Other (1,410) - (1,410)  Total (Gain)/Loss 12,269 8,055 20,324  Projected 6/30/16 245,908 (81,741) 164,167 May 9, 2016 28 RESULTS Schedule of Funding Progress (Amounts in 000’s) Actuarial Valuation Date Actuarial Value of Assets36 (a) Entry Age Actuarial Accrued Liability (b) Unfunded Actuarial Accrued Liability (b-a) Funded Ratio (a/b) Covered Payroll (c) UAAL as Percentage of Covered Payroll ((b-a)/c) 1/1/2011 $ 40,213 $ 165,660 $ 125,447 24.3% $ 98,940 126.8% 6/30/2011 44,774 168,053 123,279 26.6% 80,664 152.8% 6/30/2013 60,070 203,642 143,572 29.5% 81,785 175.5% 6/30/2015 78,578 234,795 156,217 33.5% 87,586 178.4% 36 Actuarial value equals market value of assets ATTACHMENT A A - 15 May 9, 2016 29 RESULTS Annual Required Contribution (ARC) (Amounts in 000’s) 6/30/13 Valuation 6/30/15 Valuation 2014/15 2015/16 2016/17 2017/1837  Discount Rate 7.61% 7.25%  ARC - $  Normal Cost $ 5,674 $ 5,880 $ 6,340 $ 6,587  UAAL Amortization 8,607 8,887 10,025 10,351  Total 14,282 14,767 16,365 16,938  Projected Payroll 87,187 90,021 93,372 96,406  ARC - %Pay  Normal Cost 6.5% 6.5% 6.8% 6.8%  UAAL Amortization 9.9% 9.9% 10.7% 10.7%  Total 16.4% 16.4% 17.5% 17.5% 37 ADC for 2017/18. May 9, 2016 30 RESULTS Annual Required Contribution (ARC) 38 (Amounts in 000’s) 38 ADC for 2017/18. 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Normal Cost 4,782 5,091 5,256 5,674 5,880 6,340 6,587 Amortization 7,802 7,665 7,779 8,607 8,887 10,025 10,351 ARC 12,584 12,756 13,035 14,282 14,767 16,365 16,938 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 ATTACHMENT A A - 16 May 9, 2016 31 RESULTS Amortization Bases & Payments (Amounts in 000’s) 6/30/13 Valuation 6/30/15 Valuation 6/30/14 6/30/15 6/30/16 6/30/17  UAAL Balance $ 140,333 $ 142,405 $ 164,167 $ 166,044  Amortization Payment - $ 8,607 8,887 10,025 10,351  Amortization Period 30 29 28 27 May 9, 2016 32 RESULTS This page intentionally blank ATTACHMENT A A - 17 May 9, 2016 33 RESULTS Estimated Net OPEB Obligation/(Asset) Illustration (Amounts in 000’s) 6/30/13 Valuation 6/30/15 Valuation CAFR 2014/15 Estimate 2015/16 Estimate 2016/17  NOO/(NOA) at Beginning of Year $(22,610) $(20,955) $ (21,295)  Annual OPEB Cost  Annual Required Contribution 14,282 14,767 16,365  Interest on NOO (1,721) (1,595) (1,544)  NOO Adjustment 2,212 1,255 1,301  Annual OPEB Cost 14,773 14,427 16,122  Contributions  Cash Benefit Payments39 8,995 9,638 10,353  Implied Subsidy Benefit Payments40 1,916 1,960 2,203  Trust Funding 4,123 3,169 3,809  Total Contributions 13,118 14,767 16,365  NOO/(NOA) at End of Year (20,955) (21,295) (21,538) 39 Estimated cash payments shown for all years after 2014/15. Actual cash payments should be used for OPEB footnote. 40 Use amounts listed here for 2015/16 and 2016/17 OPEB footnotes. May 9, 2016 34 RESULTS 10 Year Contribution Projection (Amounts in 000’s) FYE ARC / ADC41 Contribution Pay ARC / ADC % of Pay Cash BP IS BP Pre- Funding Total 2017 $16,365 $10,353 $2,203 $3,809 $16,365 $ 93,372 17.5% 2018 16,938 11,099 2,444 3,395 16,938 96,406 17.5% 2019 17,530 11,766 2,629 3,135 17,530 99,539 17.6% 2020 18,138 12,371 2,802 2,965 18,138 102,774 17.6% 2021 18,765 13,014 3,033 2,718 18,765 106,115 17.7% 2022 19,411 13,654 3,271 2,486 19,411 109,563 17.7% 2023 20,076 14,324 3,540 2,212 20,076 113,124 17.7% 2024 20,760 14,985 3,774 2,001 20,760 116,801 17.8% 2025 21,466 15,618 3,984 1,864 21,466 120,597 17.8% 2026 22,192 16,214 4,107 1,871 22,192 124,516 17.8% 41 ARC is defined by GASB 45. Actuarially Determined Contribution (ADC) beginning 2017/18. ATTACHMENT A A - 18 May 9, 2016 35 RESULTS % of Total Actuarial Accrued Liability for Actives and Retirees Miscellaneous May 9, 2016 36 RESULTS % of Total Actuarial Accrued Liability for Actives and Retirees Safety ATTACHMENT A A - 19 May 9, 2016 37 RESULTS UAAL – % of Payroll (Amounts in 000’s) 6/30/11 6/30/13 6/30/15  UAAL/Payroll for year ending on valuation date  Miscellaneous 147% 158% 152%  Safety 168% 228% 276%  Total 153% 176% 178% May 9, 2016 38 RESULTS ATTACHMENT A A - 20 May 9, 2016 39 RESULTS - DETAILS Actuarial Obligations June 30, 2015 (Amounts in 000’s) Benefits < Age 65 Benefits > Age 65 Total  Present Value of Benefits  Actives $ 63,897 $ 61,867 $125,764  Retirees 47,382 110,165 157,547  Total 111,279 172,032 283,311  Actuarial Accrued Liability  Actives 38,198 39,050 77,248  Retirees 47,382 110,165 157,547  Total 85,580 149,215 234,795  Normal Cost 2016/17 3,235 3,105 6,340 May 9, 2016 40 RESULTS - DETAILS Actuarial Obligations June 30, 2015 (Amounts in 000’s) Group 1 Group 2 Group 3 Group 442 Total  Present Value of Benefits  Actives $ - $ - $ 18,960 $106,804 $125,764  Retirees 70,845 65,247 20,229 1,225 157,547  Total 70,845 65,247 39,189 108,029 283,311  Actuarial Accrued Liability  Actives - - 15,649 61,599 77,248  Retirees 70,845 65,247 20,229 1,225 157,547  Total 70,845 65,247 35,878 62,824 234,795  Normal Cost 2016/17 - - 572 5,769 6,340  NC as % of Payroll 4.3% 7.2% 6.8%  Count n/a n/a 107 848 955  Total Salary (000’s) n/a n/a $ 13,844 $ 73,742 $ 87,586 42 Includes all active Group 3 PAPOA, PMA, IAFF & SEIU who elected (or are assumed to have elected) Group 4 benefits. ATTACHMENT A A - 21 May 9, 2016 41 RESULTS - DETAILS Cash/Implied Subsidy – Actuarial Obligations – June 30, 2015 (Amounts in 000’s) Cash Subsidy Implied Subsidy Total  Present Value of Benefits  Actives $ 107,817 $ 17,947 $ 125,764  Retirees 124,770 32,777 157,547  Total 232,587 50,724 283,311  Actuarial Accrued Liability  Actives 65,601 11,647 77,248  Retirees 124,770 32,777 157,547  Total 190,371 44,424 234,795  Market Value of Assets43 78,578 - 78,578  Unfunded AAL 111,793 44,424 156,217  Normal Cost 2016/17 5,494 846 6,340  Pay-As-You-Go Cost 2016/17 10,353 2,203 12,556 43 Allocated to cash subsidy for illustrative purposes. May 9, 2016 42 RESULTS - DETAILS Cash/Implied Subsidy – Annual Required Contribution – 2016/17 FY (Amounts in 000’s) Cash Subsidy Implied Subsidy Total  ARC - $  Normal Cost $ 5,494 $ 846 $ 6,340  UAAL Amortization 7,190 2,835 10,025  ARC 12,684 3,682 16,365  Projected Payroll 93,372 93,372 93,372  ARC - %  Normal Cost 5.9% 0.9% 6.8%  UAAL Amortization 7.7% 3.0% 10.7%  ARC 13.6% 3.9% 17.5% ATTACHMENT A A - 22 May 9, 2016 43 RESULTS - DETAILS Actuarial Obligations June 30, 2015 (Amounts in 000’s) Misc Safety Total  Present Value of Benefits  Actives $ 90,816 $ 34,948 $125,764  Retirees 99,731 57,816 157,547  Total 190,547 92,764 283,311  Actuarial Accrued Liability  Actives 58,625 18,623 77,248  Retirees 99,731 57,816 157,547  Total 158,356 76,439 234,795  Market Value of Assets44 52,996 25,582 78,578  Unfunded AAL 105,360 50,857 156,217  Normal Cost 2016/17 4,580 1,760 6,340  Pay-As-You-Go Cost 2016/17 8,313 4,243 12,556 44 Allocated in proportion to the Actuarial Accrued Liability. May 9, 2016 44 RESULTS - DETAILS Annual Required Contribution (ARC) 2016/17 Fiscal Year (Amounts in 000’s) Misc Safety Total  ARC - $  Normal Cost $ 4,580 $ 1,760 $ 6,340  UAAL Amortization45 6,779 3,246 10,025  ARC 11,359 5,006 16,365  Projected Payroll 73,716 19,656 93,372  ARC - %  Normal Cost 6.2% 9.0% 6.8%  UAAL Amortization 9.2% 16.5% 10.7%  ARC 15.4% 25.5% 17.5% 45 Allocated in proportion to the Actuarial Accrued Liability. ATTACHMENT A A - 23 May 9, 2016 45 RESULTS - DETAILS Actuarial Obligations – By Bargaining Unit June 30, 2015 (Amounts in 000’s) FCA IAFF M/C PAPOA PMA SEIU UTLM Total  PVB  Actives $ 995 $16,926 $21,849 $14,414 $1,987 $ 61,396 $8,197 $125,764  Retirees 1,653 29,962 49,876 19,549 1,420 54,242 844 157,547  Total 2,648 46,888 71,725 33,963 3,407 115,638 9,041 283,311  AAL  Actives 692 9,617 12,820 6,315 1,518 40,008 6,279 77,248  Retirees 1,653 29,962 49,876 19,549 1,420 54,242 844 157,547  Total 2,345 39,579 62,696 25,864 2,938 94,250 7,123 234,795  MVA46 785 13,246 20,982 8,656 983 31,542 2,384 78,578  UAAL 1,560 26,333 41,714 17,208 1,955 62,708 4,739 156,217  NC 16/17 42 769 1,290 837 77 2,972 353 6,340  Pay-Go 103 2,220 3,906 1,454 87 4,631 155 12,556 46 Allocated in proportion to the Actuarial Accrued Liability. May 9, 2016 46 RESULTS - DETAILS Annual Required Contribution (ARC) – By Bargaining Unit 2016/17 Fiscal Year (Amounts in 000’s) FCA IAFF M/C PAPOA PMA SEIU UTLM Total  ARC - $  Normal Cost $ 42 $ 769 $1,290 $ 837 $ 77 $ 2,972 $ 353 $ 6,340  UAAL Amort47 101 1,674 2,635 1,107 129 4,059 321 10,025  ARC 143 2,443 3,925 1,944 206 7,031 674 16,365  Proj. Payroll 714 8,280 24,214 8,662 1,368 43,493 6,640 93,372  ARC - %  Normal Cost 5.9% 9.3% 5.3% 9.6% 5.7% 6.9% 5.3% 6.8%  UAAL Amort 14.1% 20.2%10.9%12.8% 9.4% 9.3% 4.8%10.7%  ARC 20.0% 29.5% 16.2% 22.4% 15.1% 16.2% 10.1% 17.5% 47 Allocated in proportion to the Actuarial Accrued Liability. ATTACHMENT A A - 24 May 9, 2016 47 RESULTS - DETAILS Actuarially Determined Contribution (ADC) – By Bargaining Unit 2017/18 Fiscal Year (Amounts in 000’s) FCA IAFF M/C PAPOA PMA SEIU UTLM Total  ARC - $  Normal Cost $ 44 $ 793 $1,355 $ 864 $ 80 $ 3,069 $ 382 $ 6,587  UAAL Amort48 104 1,729 2,721 1,143 133 4,191 332 10,351  ARC 147 2,522 4,075 2,007 213 7,260 714 16,938  Proj. Payroll 737 8,549 25,001 8,943 1,412 44,906 6,856 96,406  ARC - %  Normal Cost 5.9% 9.3% 5.4% 9.6% 5.7% 6.9% 5.6% 6.8%  UAAL Amort 14.1% 20.2% 10.9%12.8% 9.4% 9.3% 4.8% 10.7%  ARC 20.0% 29.5% 16.3% 22.4% 15.1% 16.2% 10.4% 17.5% 48 Allocated in proportion to the Actuarial Accrued Liability. May 9, 2016 48 SENSITIVITY ANALYSIS CERBT Investment Options  Updated Target asset allocations (approved by CalPERS Board October 2014) Asset Classifications Option 1 Option 2 Option 3 Global Equity 57% 40% 24% US Nominal Bonds 27% 39% 39% REIT's 8% 8% 8% TIPS 5% 10% 26% Commodities 3% 3% 3% Total 100% 100% 100%  Bartel Associates analysis of expected returns: Option 1 Option 2 Option 3 Expected Real Rate of Return 4.48% 3.82% 3.16% Inflation Assumption 3.00% 3.00% 3.00% Expenses (Admin. & Invest.) 0.15% 0.15% 0.15% Nominal Rate of Return 7.33% 6.67% 6.01% Recommended Discount Rate 7.25% 6.50% 6.00% ATTACHMENT A A - 25 May 9, 2016 49 SENSITIVITY ANALYSIS Discount Rate Sensitivity (Amounts in 000’s) CERBT #1 #2 #3  Discount Rate 7.25% 6.50% 6.00%  Present Value of Benefits $ 283,311 $ 318,455 $ 345,972  Funded Status 6/30/15  Actuarial Accrued Liability 234,795 258,084 275,772  Actuarial Value of Assets 78,578 78,578 78,578  Unfunded AAL 156,217 179,506 197,194  Funded Ratio 33.5% 30.4% 28.5%  ARC 2016/17  Normal Cost $ 6,340 $ 7,442 $ 8,311  UAAL Amortization49 10,025 10,550 10,907  Total 16,365 17,992 19,218  ARC % of Payroll 17.5% 19.3% 20.6% 49 UAAL projected using the same 6/30/16 projected assets for all scenarios. UAAL amortized over 28 years for all scenarios. May 9, 2016 50 SENSITIVITY ANALYSIS Amortization Period Sensitivity (Amounts in 000’s)  Amortization Period 28 Years 24 Years 20 Years  Funded Status Projected to 6/30/16  Actuarial Accrued Liability $ 245,908 $ 245,908 $ 245,908  Actuarial Value of Assets 81,741 81,741 81,741  Unfunded AAL 164,167 164,167 164,167  Total Projected Payroll 2016/17 93,372 93,372 93,372  ARC 2016/17  Normal Cost $ 6,340 $ 6,340 $ 6,340  UAAL Amortization 10,025 10,974 12,334  Total 16,365 17,314 18,674  ARC % of Payroll 17.5% 18.5% 20.0% ATTACHMENT A A - 26 May 9, 2016 51 ACTUARIAL CERTIFICATION This report presents the City of Palo Alto Retiree Healthcare Plan (“Plan”) June 30, 2015 actuarial valuation. The purpose of this valuation is to:  Determine the Governmental Accounting Standards Board Statement Nos. 43 and 45 June 30, 2015 Benefit Obligations,  Determine the Plan’s June 30, 2015 Funded Status,  Calculate the 2016/17 Annual Required Contribution, and  Calculate the 2017/18 recommended City contribution. The report provides information intended for reporting under GASB 43 and 45, but may not be appropriate for other purposes. Information provided in this report may be useful to the City for the Plan’s financial management. Future valuations may differ significantly if the Plan’s experience differs from our assumptions or if there are changes in Plan design, actuarial methods, or actuarial assumptions. The project scope did not include an analysis of this potential variation. The valuation is based on Plan provisions, participant data, and asset information provided by the City as summarized in this report, which we relied on and did not audit. We reviewed the participant data for reasonableness. To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principles and practices. Additionally, in our opinion, actuarial methods and assumptions comply with GASB 43 and 45. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein. Respectfully submitted, John E. Bartel, ASA, MAAA President Bartel Associates, LLC May 9, 2016 Mary Elizabeth Redding, FSA, EA, MAAA Vice President Bartel Associates, LLC May 9, 2016 Deanna Van Valer, ASA, MAAA, EA Assistant Vice President Bartel Associates, LLC May 9, 2016 May 9, 2016 52 EXHIBITS Topic Page Premiums E- 1 Data Summary E- 5 Actuarial Assumptions E-35 Results by Fund E-47 Results by GF Department E-49 Definitions E-51 ATTACHMENT A A - 27 May 9, 2016 E-1 PREMIUMS 2014 PEMHCA Monthly Premiums Bay Area Non-Medicare Eligible Medicare Eligible Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $657.33 $1,314.66 $1,709.06 $341.12 $682.24 $1,023.36 Anthem Traditional 728.41 1,456.82 1,893.87 341.12 682.24 1,023.36 Blue Shield Access+ 836.59 1,673.18 2,175.13 298.21 596.42 894.63 Blue Shield NetValue 704.01 1,408.02 1,830.43 298.21 596.42 894.63 Kaiser 742.72 1,485.44 1,931.07 294.97 589.94 884.91 United Healthcare 764.24 1,528.48 1,987.02 193.33 386.66 579.99 PERS Choice 690.77 1,381.54 1,796.00 307.23 614.46 921.69 PERS Select 661.52 1,323.04 1,719.95 307.23 614.46 921.69 PERSCare 720.04 1,440.08 1,872.10 327.36 654.72 982.08 PORAC 634.00 1,186.00 1,507.00 397.00 791.00 1,264.00 May 9, 2016 E-2 PREMIUMS 2015 PEMHCA Monthly Premiums Bay Area Non-Medicare Eligible Medicare Eligible Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $ 662.41 $ 1,324.82 $ 1,722.27 $ 445.38 $ 890.76 $ 1,336.14 Anthem Traditional 827.57 1,655.14 2,151.68 445.38 890.76 1,336.14 Blue Shield Access+ 928.87 1,857.74 2,415.06 352.63 705.26 1,057.89 Blue Shield NetValue 870.60 1,741.20 2,263.56 352.63 705.26 1,057.89 Kaiser 714.45 1,428.90 1,857.57 295.51 591.02 886.53 UnitedHealthcare 850.67 1,701.34 2,211.74 267.41 534.82 802.23 PERS Choice 700.84 1,401.68 1,822.18 339.47 678.94 1,018.41 PERS Select 690.43 1,380.86 1,795.12 339.47 678.94 1,018.41 PERSCare 775.08 1,550.16 2,015.21 368.76 737.52 1,106.28 PORAC 675.00 1,292.00 1,642.00 402.00 802.00 1,281.00 ATTACHMENT A A - 28 May 9, 2016 E-3 PREMIUMS 2016 PEMHCA Monthly Premiums Bay Area Non-Medicare Eligible Medicare Eligible50 Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $ 721.79 $ 1,443.58 $ 1,876.65 n/a n/a n/a Anthem Traditional 855.42 1,710.84 2,224.09 n/a n/a n/a Blue Shield Access+ 1,016.18 2,032.36 2,642.07 n/a n/a n/a Blue Shield NetValue 1,033.86 2,067.72 2,688.04 n/a n/a n/a Health Net SmartCare 808.44 1,616.88 2,101.94 n/a n/a n/a Kaiser 746.47 1,492.94 1,940.82 $ 297.23 $ 594.46 $ 891.69 UnitedHealthcare 955.44 1,910.88 2,484.14 320.98 641.96 962.94 PERS Choice 798.36 1,596.72 2,075.74 366.38 732.76 1,099.14 PERS Select 730.07 1,460.14 1,898.18 366.38 732.76 1,099.14 PERSCare 889.27 1,778.54 2,312.10 408.04 816.08 1,224.12 PORAC 699.00 1,399.00 1,789.00 442.00 881.00 1,408.00 50 Beginning January 1, 2016, the only non-Kaiser HMO plan to offer a Medicare plan is UnitedHealthcare. May 9, 2016 E-4 PREMIUMS PEMHCA Monthly Premium Increases/(Decreases) Bay Area Non-Medicare Eligible Medicare Eligible Medical Plan 2014 2015 2016 2014 2015 2016 Anthem Select n/a 0.8% 9.0% n/a 30.6% n/a Anthem Traditional n/a 13.6% 3.4% n/a 30.6% n/a Blue Shield 6.6% 11.0% 9.4% 14.1% 18.2% n/a Blue Shield NetValue 5.0% 23.7% 18.8% 14.1% 18.2% n/a Kaiser 11.1% (3.8%) 4.5% 2.3% 0.2% 0.6% UnitedHealthCare n/a 11.3% 12.3% n/a 38.3% 20.0% PERS Choice 3.6% 1.5% 13.9% (5.7%) 10.5% 7.9% PERS Select 35.8% 4.4% 5.7% (5.7%) 10.5% 7.9% PERSCare (33.5%) 7.6% 14.7% (11.6%) 12.6% 10.7% PORAC 9.1% 6.5% 3.6% (5.0%) 1.3% 10.0% ATTACHMENT A A - 29 May 9, 2016 E-5 DATA SUMMARY Participant Statistics by Bargaining Unit June 30, 2015 FCA IAFF M/C PAPOA PMA SEIU UTLM Total  Actives  Count 5 88 188 76 8 544 46 955  Avg Age 48.3 42.0 47.6 38.3 45.6 45.6 50.7 45.3  Avg City Svc 15.8 12.2 9.8 9.1 18.6 10.5 16.5 10.8  Avg PERS Svc 15.9 13.0 11.8 10.3 19.3 11.4 17.6 11.9  Avg Salary $133,943 $88,265 $120,820 $106,911 $160,412 $74,997 $135,404 $91,714  Total Salary51 $670 $7,767 $22,714 $8,125 $1,283 $40,798 $6,229 $87,586  Retirees52:  Count 5 148 298 107 3 441 5 1,007  Avg Age 59.8 68.9 68.7 64.9 52.6 70.3 58.8 68.9  Avg Service Ret Age 54.9 54.4 57.9 52.2 50.1 59.1 55.3 57.7  Avg Disab Ret Age 49.9 47.7 49.9 40.6 n/a 48.2 n/a 45.6 51 Actual 2014/15 pay paid for those hired < 7/1/14. New hire pay is annualized. 52 Amount in 000’s. Includes retirees who have waived coverage. May 9, 2016 E-6 DATA SUMMARY Participant Statistics by Bargaining Unit June 30, 2013 FCA IAFF M/C PAPOA PMA SEIU UTLM Total  Actives  Count 4 95 188 75 7 537 42 948  Avg Age 51.5 41.7 48.2 37.6 44.5 45.5 49.7 45.2  Avg City Svc 21.2 11.8 10.2 8.7 19.7 10.6 16.1 10.8  Avg PERS Svc 21.2 12.4 11.8 9.5 20.0 11.3 16.9 11.7  Avg Salary $150,409 $104,373 $106,212 $110,117 $168,881 $68,423 $121,811 $86,271  Total Salary53 $602 $9,915 $19,968 $8,259 $1,182 $36,743 $5,116 $81,785  Retirees54:  Count 3 144 280 112 2 423 4 968  Avg Age 62.6 67.8 67.6 65.3 51.8 69.6 56.0 68.2  Avg Service Ret Age 58.2 54.4 58.0 53.2 50.2 59.2 55.4 57.8  Avg Disab Ret Age 49.9 47.1 50.0 40.5 n/a 48.4 n/a 45.3 53 Actual 2012/13 pay paid for those hired < 7/1/12. New hire pay is annualized. 54 Amount in 000’s. Includes retirees who have waived coverage. ATTACHMENT A A - 30 May 9, 2016 E-7 DATA SUMMARY Participant Statistics by CalPERS Pension Category June 30, 2015 55 Actual 2014/15 pay paid for those hired < 7/1/14. New hire pay is annualized. 56 Includes retirees who have waived coverage. Miscellaneous Police Fire Total  Actives  Count 776 84 95 955  Average Age 46.3 39.3 42.4 45.3  Average City Service 10.6 10.4 12.5 10.8  Average PERS Service 11.8 11.5 13.2 11.9  Average Salary $89,108 $113,933 $93,347 $91,714  Total Salary (000’s)55 $69,148 $9,570 $8,868 $87,586  Retirees56:  Count 722 121 164 1,007  Average Age 69.6 64.8 68.5 68.9  Avg Service Ret Age 58.8 51.9 54.3 57.7  Avg Disability Ret Age 48.2 40.7 47.9 45.6 May 9, 2016 E-8 DATA SUMMARY Participant Statistics by CalPERS Pension Category June 30, 2013 57 Actual 2012/13 pay paid for those hired < 7/1/12. New hire pay is annualized. 58 Includes retirees who have waived coverage. Miscellaneous Police Fire Total  Actives  Count 765 82 101 948  Average Age 46.4 38.5 42.1 45.2  Average City Service 10.8 10.0 12.2 10.8  Average PERS Service 11.7 10.8 12.8 11.7  Average Salary $80,179 $117,217 $107,291 $86,271  Total Salary (000’s)57 $61,337 $9,612 $10,836 $81,785  Retirees58:  Count 690 121 157 968  Average Age 68.9 64.4 67.6 68.2  Avg Service Ret Age 58.8 52.1 54.5 57.8  Avg Disability Ret Age 48.4 40.6 47.3 45.3 ATTACHMENT A A - 31 May 9, 2016 E-9 DATA SUMMARY Medical Plan Participation – June 30, 2015 Retirees59 Medical Plan60 Actives < 65 ≥ 65 Total Miscellaneous/Safety M S M S M S M S Anthem Select 5% 1% 1% 0% 0% 0% 0%0% Anthem Traditional 17% 16% 10% 16% 1% 0% 5%9% Blue Shield 9% 4% 22% 6% 27% 16% 25%11% Blue Shield NetValue 2% 4% 1% 3% 0% 0% 0%2% Kaiser 44% 33% 27% 20% 31% 34% 29%26% PERS Choice 13% 2% 30% 2% 23% 6% 26%4% PERS Select 0% 0% 1% 0% 0% 0% 1%0% PERSCare 2% 1% 4% 3% 15% 32% 10%16% PORAC 1% 34% 1% 47% 1% 12% 1%32% UnitedHealthcare 8% 6% 4% 3% 1% 0% 2%2% Total 100% 100% 100% 100% 100% 100% 100%100% 59 Under 65 only includes employees who retired on or after June 30, 2008; over 65 only includes retirees up to age 72. 60 All Anthem and Blue Shield Medicare retirees are assumed to switch to UnitedHealthcare in 2016 when their current plans are no longer offered. May 9, 2016 E-10 DATA SUMMARY Medical Plan Participation – January 1, 2014 Retirees Medical Plan Actives < 6561 ≥ 6562 Total Miscellaneous/Safety M S M S M S M S Anthem Select 1% 1% 0% 0% 0% 0% 0% 0% Anthem Traditional 19% 17% 6% 11% 0% 0% 4% 9% Blue Shield 12% 3% 27% 18% 33% 16% 29% 18% Blue Shield NetValue 6% 4% 1% 4% 0% 0% 0% 3% Kaiser 37% 32% 28% 15% 27% 41% 28% 20% PERS Choice 13% 1% 29% 0% 23% 9% 27% 2% PERS Select 0% 0% 1% 0% 0% 0% 0% 0% PERSCare 2% 1% 2% 2% 16% 22% 6% 6% PORAC 1% 35% 2% 47% 1% 13% 2% 41% UnitedHealthcare 10% 7% 4% 4% 1% 0% 3% 3% Total 100% 100% 100% 100% 100% 100% 100% 100% 61 Only includes employees who retired on or after June 30, 2008. 62 Only includes retirees up to age 70. ATTACHMENT A A - 32 May 9, 2016 E-11 DATA SUMMARY Active Medical Coverage - Miscellaneous Medical Plan Single 2-Party Family Waived Total Anthem Select 5 7 19 - 31 Anthem Traditional 27 26 62 - 115 Blue Shield 26 12 21 - 59 Blue Shield NetValue 2 3 10 - 15 Kaiser 97 68 132 - 297 PERS Choice 25 28 34 - 87 PERS Select 1 - 1 - 2 PERSCare 3 6 7 - 16 PORAC 2 1 2 - 5 UnitedHealthcare 13 10 32 - 55 Waived - - - 94 94 Total 201 161 320 94 776 % as of June 30, 2015 26% 21% 41% 12% 100% % as of June 30, 2013 25% 21% 43% 11% 100% May 9, 2016 E-12 DATA SUMMARY Active Medical Coverage - Safety Medical Plan Single 2-Party Family Waived Total Anthem Select - - 2 - 2 Anthem Traditional 3 4 18 - 25 Blue Shield 2 1 3 - 6 Blue Shield NetValue - - 6 - 6 Kaiser 14 6 33 - 53 PERS Choice - 1 2 - 3 PERS Select - - - - - PERSCare - - 1 - 1 PORAC 11 7 37 - 55 UnitedHealthcare 4 - 6 - 10 Waived - - - 18 18 Total 34 19 108 18 179 % as of June 30, 2015 19% 11% 60% 10% 100% % as of June 30, 2013 20% 10% 62% 8% 100% ATTACHMENT A A - 33 May 9, 2016 E-13 DATA SUMMARY Retiree Medical Coverage63 - Miscellaneous Medical Plan Single 2-Party Family Waived Total <65 65+ <65 65+ <65 65+ <65 65+ Anthem EPO 1 - - - - - - - 1 Anthem Select - - 1 - - - - - 1 Anthem Traditional 3 - 5 1 8 1 - - 18 Blue Shield 26 51 17 40 7 5 - - 146 Blue Shield NetValue 1 - - - - - - - 1 Kaiser 31 53 24 53 6 6 - - 173 PERS Choice 30 41 27 36 9 2 - - 145 PERS Select 2 - - - - - - - 2 PERSCare 9 78 5 44 - - - - 136 PORAC 2 - 1 2 - - - - 5 UnitedHealthcare 3 2 4 2 1 - - - 12 Waived - - - - - - 29 53 82 Total 108 225 84 178 31 14 29 53 722 % as of June 30, 2015 42% 48% 33% 38% 13% 3% 12% 11% 100% % as of June 30, 2013 46% 48% 35% 38% 14% 3% 5% 11% 100% 63 Approximately 69% of retirees have coverage in a Bay Area region plan. The rest are in other state regions or out of state. May 9, 2016 E-14 DATA SUMMARY Retiree Medical Coverage64 - Safety Medical Plan Single 2-Party Family Waived Total <65 65+ <65 65+ <65 65+ <65 65+ Anthem EPO - - - - - - - - - Anthem Select - - - - - - - - - Anthem Traditional 1 - 1 - 9 - - - 11 Blue Shield 6 14 2 12 7 - - - 41 Blue Shield NetValue - 1 1 - 3 - - - 5 Kaiser 5 14 5 19 12 2 - - 57 PERS Choice 3 7 3 15 3 - - - 31 PERS Select - - - - - - - - - PERSCare 11 27 4 23 2 1 - - 68 PORAC 6 3 15 4 18 2 - - 48 UnitedHealthcare 1 - 1 - 1 - - - 3 Waived - - - - - - 6 15 21 Total 33 66 32 73 55 5 6 15 285 % as of June 30, 2015 26% 42% 25% 46% 44% 3% 5% 9% 100% % as of June 30, 2013 31% 43% 27% 43% 40% 4% 2% 11% 100% 64 Approximately 51% of retirees have coverage in a Bay Area region plan. The rest are in other state regions or out of state. ATTACHMENT A A - 34 May 9, 2016 E-15 DATA SUMMARY Retirees Medical Coverage by Age – Miscellaneous Age Single 2-Party Family Waived Total Under 50 2 - 1 - 3 50-54 8 2 6 8 24 55-59 38 29 13 13 93 60-64 60 53 11 8 132 65-69 61 59 11 12 143 70-74 69 58 3 6 136 75-79 43 29 - 6 78 80-84 22 24 - 14 60 85 & Over 30 8 - 15 53 Total 333 262 45 82 722 Average Age 70.4 69.3 61.2 72.3 69.6 May 9, 2016 E-16 DATA SUMMARY 0 20 40 60 80 100 120 140 160 <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 ≥85 Nu m b e r Age Retiree Age Distribution Miscellaneous 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 35 May 9, 2016 E-17 DATA SUMMARY Retirees Medical Coverage by Age – Police Age Single 2-Party Family Waived Total Under 50 2 1 1 3 7 50-54 6 3 8 - 17 55-59 8 4 8 2 22 60-64 10 4 5 1 20 65-69 4 11 2 3 20 70-74 7 4 - 2 13 75-79 4 1 - - 5 80-84 6 2 - 2 10 85 & Over 5 2 - - 7 Total 52 32 24 13 121 Average Age 66.8 67.8 56.8 62.2 64.8 May 9, 2016 E-18 DATA SUMMARY 0 5 10 15 20 25 <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 ≥85 Nu m b e r Age Retiree Age Distribution Police 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 36 May 9, 2016 E-19 DATA SUMMARY Retirees Medical Coverage by Age – Fire Age Single 2-Party Family Waived Total Under 50 - 1 4 - 5 50-54 - 3 12 - 15 55-59 5 10 15 - 30 60-64 2 6 2 - 10 65-69 6 13 1 2 22 70-74 10 13 2 2 27 75-79 14 14 - 1 29 80-84 6 10 - 2 18 85 & Over 4 3 - 1 8 Total 47 73 36 8 164 Average Age 74.0 70.4 55.8 75.9 68.5 May 9, 2016 E-20 DATA SUMMARY 0 5 10 15 20 25 30 35 <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 ≥85 Nu m b e r Age Retiree Age Distribution Fire 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 37 May 9, 2016 E-21 DATA SUMMARY Retirees Medical Coverage by Age – Total Age Single 2-Party Family Waived Total Under 50 4 2 6 3 15 50-54 14 8 26 8 56 55-59 51 43 36 15 145 60-64 72 63 18 9 162 65-69 71 83 14 17 185 70-74 86 75 5 10 176 75-79 61 44 - 7 112 80-84 34 36 - 18 88 85 & Over 39 13 - 16 68 Total 432 367 105 103 1,007 Average Age 70.5 69.3 58.4 71.3 68.9 May 9, 2016 E-22 DATA SUMMARY 0 20 40 60 80 100 120 140 160 180 200 <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 ≥85 Nu m b e r Age Retiree Age Distribution Total 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 38 May 9, 2016 E-23 DATA SUMMARY Actives by Age and Service – Miscellaneous City Service Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total < 25 4 4 - - - - - 8 25-29 17 26 1 - - - - 44 30-34 13 45 23 3 - - - 84 35-39 10 32 32 28 5 - - 107 40-44 10 17 18 27 17 3 - 92 45-49 11 22 23 23 25 10 3 117 50-54 7 12 28 24 37 27 22 157 55-59 3 15 18 13 22 8 14 93 60-64 1 4 12 11 11 10 4 53 ≥ 65 - 1 3 3 4 6 4 21 Total 76 178 158 132 121 64 47 776 May 9, 2016 E-24 DATA SUMMARY Actives by Age and Service – Police City Service Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total < 25 - 1 - - - - - 1 25-29 1 3 1 - - - - 5 30-34 - 8 13 1 - - - 22 35-39 1 5 8 7 3 - - 24 40-44 - 1 2 4 4 1 - 12 45-49 - 1 1 2 1 5 1 11 50-54 - - 1 1 2 1 1 6 55-59 - - 1 - 1 - 1 3 60-64 - - - - - - - - ≥ 65 - - - - - - - - Total 2 19 27 15 11 7 3 84 ATTACHMENT A A - 39 May 9, 2016 E-25 DATA SUMMARY Actives by Age and Service – Fire City Service Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total < 25 - - - - - - - - 25-29 - 9 3 - - - - 12 30-34 - 5 2 2 - - - 9 35-39 - 6 4 3 - - - 13 40-44 - 3 3 5 8 - - 19 45-49 - - - 8 9 8 1 26 50-54 - 1 1 3 3 4 1 13 55-59 - - - - - 1 - 1 60-64 - - - - - - 1 1 ≥ 65 - - - - - 1 - 1 Total - 24 13 21 20 14 3 95 May 9, 2016 E-26 DATA SUMMARY Actives by Age and Service – Total City Service Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total < 25 4 5 - - - - - 9 25-29 18 38 5 - - - - 61 30-34 13 58 38 6 - - - 115 35-39 11 43 44 38 8 - - 144 40-44 10 21 23 36 29 4 - 123 45-49 11 23 24 33 35 23 5 154 50-54 7 13 30 28 42 32 24 176 55-59 3 15 19 13 23 9 15 97 60-64 1 4 12 11 11 10 5 54 ≥ 65 - 1 3 3 4 7 4 22 Total 78 221 198 168 152 85 53 955 ATTACHMENT A A - 40 May 9, 2016 E-27 DATA SUMMARY 0 20 40 60 80 100 120 140 160 180 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 ≥65 Nu m b e r Age Active Age Distribution Miscellaneous 6/30/13 Valuation 6/30/15 Valuation May 9, 2016 E-28 DATA SUMMARY 0 50 100 150 200 250 300 0-4 5-9 10-14 15-19 20-24 >25 Nu m b e r Service Active Service Distribution Miscellaneous 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 41 May 9, 2016 E-29 DATA SUMMARY 0 5 10 15 20 25 30 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 ≥65 Nu m b e r Age Active Age Distribution Police 6/30/13 Valuation 6/30/15 Valuation May 9, 2016 E-30 DATA SUMMARY 0 5 10 15 20 25 30 0-4 5-9 10-14 15-19 20-24 >25 Nu m b e r Service Active Service Distribution Police 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 42 May 9, 2016 E-31 DATA SUMMARY 0 5 10 15 20 25 30 35 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 ≥65 Nu m b e r Age Active Age Distribution Fire 6/30/13 Valuation 6/30/15 Valuation May 9, 2016 E-32 DATA SUMMARY 0 5 10 15 20 25 30 0-4 5-9 10-14 15-19 20-24 >25 Nu m b e r Service Active Service Distribution Fire 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 43 May 9, 2016 E-33 DATA SUMMARY 0 20 40 60 80 100 120 140 160 180 200 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 ≥65 Nu m b e r Age Active Age Distribution Total 6/30/13 Valuation 6/30/15 Valuation May 9, 2016 E-34 DATA SUMMARY 0 50 100 150 200 250 300 350 0-4 5-9 10-14 15-19 20-24 >25 Nu m b e r Service Active Service Distribution Total 6/30/13 Valuation 6/30/15 Valuation ATTACHMENT A A - 44 May 9, 2016 E-35 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Valuation Date  June 30, 2013  Fiscal Years 2014/15 & 2015/16 ARCs (end of year)  1 year lag  June 30, 2015  GASB 45 ARC for Fiscal Year 2016/17. ADC65 for Fiscal Year 2017/18. (end of year)  1 year lag  Funding Policy  Full Pre-funding through CalPERS trust (CERBT) asset allocation #1  Same  General Inflation  3.00%  Same  Discount Rate  7.61% (no Margin for Adverse Deviation)  7.25%, net of expenses (based on CERBT Fund 1) 65 Actuarially Determined Contribution May 9, 2016 E-36 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Payroll Increases  Aggregate Increases – 3.25%  Merit Increases – CalPERS 1997-2007 Experience Study  Aggregate Increases – 3.25%  Merit Increases – CalPERS 1997-2011 Experience Study  Increase to Dollar Caps for SEIU Group 3  ½ of Medical Trend, not less than assumed inflation (3.0%). Increase is for purposes of financial projection only and does not imply any obligation to increase the cap in the future  Same  Now also applies to Mgmt/Conf Group 3 ATTACHMENT A A - 45 May 9, 2016 E-37 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Medical Trend Increase from Prior Year Year Non-Medicare Medicare 2013 Premiums 2014 Premiums 2015 8.0%8.3% 2016 7.5%7.8% 2017 7.0%7.2% 2018 6.5%6.7% 2019 6.0%6.1% 2020 5.5%5.6% 2021+ 5.0%5.0% Increase from Prior Year Year Non-Medicare Medicare 2013 n/a 2014 n/a 2015 Premiums 2016 Premiums 2017 7.0% 7.2% 2018 6.5% 6.7% 2019 6.0% 6.1% 2020 5.5% 5.6% 2021+ 5.0% 5.0%  ACA Excise Tax  N/A  Estimate by 2% load on cash subsidy  Mortality, Termination, Disability  CalPERS 1997-2007 Experience Study  Mortality improvement projection Scale AA  CalPERS 1997-2011 Experience Study  Mortality improvement Scale MP-14 modified to converge to ultimate improvement in 2022 May 9, 2016 E-38 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Retirement  CalPERS 1997-2007 Experience Study Misc Fire & Police Tier 1 2.7%@55 3%@50 Exp. RA66 59.3 55.7 & 54.5 Tier 2 2%@6067 3%@5568 Exp. RA 61.1 n/a & 59.7 PEPRA69 2.5%@67 2.7%@57 Exp. RA 61.0 n/a & 56.8  CalPERS 1997-2011 Experience Study Misc Fire & Police Tier 1 2.7%@55 3%@50 Exp. RA65 58.6 56.7 & 55.0 Tier 2 2%@6067 3%@5568 Exp. RA 60.9 n/a & 57.3 PEPRA69 2.5%@67 2.7%@57 Exp. RA 60.9 n/a & 57.7 66 Retirement Age 67 Applies to non-PEPRA (Classic) employees hired after 7/17/2010 68 Applies to non-PEPRA (Classic) Police employees hired after 12/7/2012 and Fire employees hired after 6/7/2012 69 Applies to employees hired after 1/1/2013 and considered “New Members” under PEPRA ATTACHMENT A A - 46 May 9, 2016 E-39 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Medical Plan at Retirement & Retirees Attaining age 65  Miscellaneous: <65 65+ Anthem Tradition 5% 0% Blue Shield 25% 30% Kaiser 30% 25% PERS Choice 30% 25% PERSCare 5% 20% United HC 5% 0%  Safety: <65 65+ Anthem Tradition 10% 0% Blue Shield 20% 20% Blue Shield NV 5% 0% Kaiser 15% 35% PERS Choice 0% 10% PERSCare 0% 25% PORAC 45% 10% United HC 5% 0%  Miscellaneous: <65 65+ Anthem Tradition 10% 0% Blue Shield 20% 30% Kaiser 30% 30% PERS Choice 30% 25% PERSCare 5% 15% United HC70 5% 0%  Safety: <65 65+ Anthem Tradition 15% 0% Blue Shield 10% 20% Blue Shield NV 5% 0% Kaiser 20% 35% PERS Choice 0% 5% PERSCare 0% 30% PORAC 45% 10% United HC70 5% 0% 70 Beginning January 1, 2016, all retirees in Anthem and Blue Shield Medicare plans are assumed to move to UHC Medicare. May 9, 2016 E-40 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Participation at Retirement  Groups 1 & 2: already retired  Group 3: 90%  Group 4: 85%  Groups 3 & 4: 90%  Based on Plan Experience71  Spousal Coverage at Retirement  Currently covered: based on current elections  Currently waived: 80%  Same  Family Coverage at Retirement  Actives  Misc : 15% until age 65  Safety : 40% until age 65  Retirees: based on current elections until age 65  Same  Based on Plan Experience 71 Actual participation percentages for Group 3 since 6/30/13 are 73% Miscellaneous and 93% Safety, or 78% overall. We recommend continued monitoring but do not update this year. Group 4 has very little actual experience, but those with less than 10 years service will receive no benefit at all (assumption applies only to those with more than 10 years service). ATTACHMENT A A - 47 May 9, 2016 E-41 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Medicare Eligible Rate  Actives hired < 4/1/86:  Miscellaneous – 80%  Safety – 90%  Actives hired > 4/1/86: 100%  Retirees < 65: 90%  Everyone eligible for Medicare will elect Part B coverage  Actives and retirees hired < 4/1/86:  Miscellaneous – 80%  Safety – 90%  Actives and retirees hired > 4/1/86: 100%  Retirees < 65 with unknown hire date: 90%  Everyone eligible for Medicare will elect Part B coverage  Waived Retiree Re-election  N/A  Pre-65 – 20% re-elect at age 65  Post-65 – 0%  Surviving Spouse Participation  100%  Same May 9, 2016 E-42 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Sample Medical Claims Costs 2014  Sample estimated monthly claims costs: Bay Area – Non-Medicare Eligible Kaiser (HMO) PERS Choice (PPO) PORAC Age M F M F M F 55 $852 $862 $737 $712 $750 $725 60 1,088 1,017 885 818 898 832 65 1,374 1,237 1,099 988 1,117 1,004 70 1,629 1,430 1,303 1,142 1,323 1,160 75 1,946 1,683 1,557 1,344 1,581 1,365 80 2,259 1,939 1,807 1,548 1,836 1,572 85 2,546 2,187 2,036 1,746 2,068 1,774 Bay Area – Medicare Eligible Kaiser (HMO) PERS Choice (PPO) PORAC Age M F M F M F 65 $283 $263 $290 $304 $391 $409 70 266 254 276 294 372 396 75 333 298 312 324 420 437 80 357 317 322 334 434 450 85 356 316 318 330 428 445 ATTACHMENT A A - 48 May 9, 2016 E-43 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Sample Medical Claims Costs 2016  Sample estimated monthly claims costs: Bay Area – Non-Medicare Eligible Kaiser (HMO) PERS Choice (PPO) PORAC Age M F M F M F 55 $856 $866 $851 $823 $826 $799 60 1,093 1,023 1,023 946 990 917 65 1,381 1,244 1,270 1,142 1,231 1,107 70 1,637 1,438 1,506 1,320 1,459 1,279 75 1,956 1,691 1,799 1,553 1,743 1,505 80 2,271 1,948 2,088 1,789 2,024 1,734 85 2,559 2,198 2,353 2,018 2,280 1,956 Bay Area – Medicare Eligible Kaiser (HMO) PERS Choice (PPO) PORAC Age M F M F M F 65 $285 $265 $346 $362 $435 $456 70 268 256 329 351 414 441 75 336 301 372 387 467 486 80 360 319 384 399 483 501 85 358 318 379 394 477 495 May 9, 2016 E-44 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  CalPERS Service  City service plus ½ service between age 30 and City hire date  Actual data  Spouse Age  Actives – Males 3 years older than females  Retirees – Males 3 years older than females if spouse birth date not available  Same  Missing Fund  Retirees missing fund assumed to be based on current active percentages: 90% GF, 5% Elec, and 5% UTL72  Retirees missing fund assumed to be based on current active percentages: 75% GF, 15% Elec, and 10% UTL72 ATTACHMENT A A - 49 May 9, 2016 E-45 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Missing Bargaining Unit  Retirees missing bargaining unit assumed to have the same BU as in the prior valuation if available; otherwise, assumed to be SEIU unless fund designates Police (PAPOA) or Fire (IAFF)72  Same  Missing Department  Liability for retirees assumed to be 90% GF from above assumption allocated proportionately across all Departments73  Liability for retirees assumed to be 75% GF from above assumption allocated proportionately across all Departments73 72 Fewer than 10% of retirees have missing Bargaining Unit, Fund or Department. Does not affect results, but does affect internal cost allocations used by the City. 73 Fewer than 10% of retirees have missing Bargaining Unit, Fund or Department. Does not affect results, but does affect internal cost allocations used by the City. May 9, 2016 E-46 ACTUARIAL ASSUMPTIONS June 30, 2013 Valuation June 30, 2015 Valuation  Future New Participants  None – Closed Group  Same ATTACHMENT A A - 50 May 9, 2016 E-47 RESULTS BY FUND Actuarial Obligations – June 30, 2015 (Amounts in 000’s) AAL Assets UAAL  Airport $ 209 $ 4 $ 205  CIP 3,036 1,114 1,923  Elec74 28,519 10,014 18,505  Gas74 10,628 3,994 6,634  GF 155,343 47,751 107,592  ISF – Technology 4,382 1,842 2,540  ISF – Vehicle 1,840 1,142 698  ISF – Printing & Mailing 723 354 369  Refuse 6,026 2,589 3,437  Storm Drain 1,920 606 1,314  Water74 5,546 2,983 2,563  WWC74 3,038 1,563 1,474  WWT 13,585 4,622 8,963  Total 234,795 78,578 156,217 74 AAL for UTL employees allocated to Elec, Gas, Water, and WWC in proportion to each Fund’s AAL May 9, 2016 E-48 RESULTS BY FUND Annual Required Contribution (ARC) (Amounts in 000’s) 2016/17 2017/1875  Airport $ 34 $ 35  CIP 250 258  Elec74 2,077 2,152  Gas74 723 748  GF 10,866 11,247  ISF – Technology 342 353  ISF – Vehicle 130 134  ISF – Printing & Mailing 42 43  Refuse 291 302  Storm Drain 137 142  Water74 302 313  WWC74 190 197  WWT 981 1,014  Total 16,365 16,938 75 ADC for 2017/18. ATTACHMENT A A - 51 May 9, 2016 E-49 RESULTS BY GF DEPARTMENT Actuarial Obligations – June 30, 2015 (Amounts in 000’s) AAL Assets76 UAAL  ASD $ 9,542 $ 2,933 $ 6,609  ATT 1,950 600 1,350  AUD 322 99 223  CLK 821 252 569  COU 1,269 390 879  CSD 17,288 5,314 11,974  FIR 46,775 14,378 32,397  HRD 2,871 883 1,988  LIB 5,870 1,804 4,066  MGR 2,089 642 1,447  PLA 7,863 2,417 5,446  POL 43,702 13,434 30,268  PWD 14,981 4,605 10,376  Total 155,343 47,751 107,592 76 Assets allocated in proportion to AAL. May 9, 2016 E-50 RESULTS BY GF DEPARTMENT Annual Required Contribution (ARC) (Amounts in 000’s) 2016/17 2017/1877  ASD $ 677 $ 704  ATT 149 153  AUD 55 57  CLK 55 57  COU 53 54  CSD 1,283 1,328  FIR 2,948 3,050  HRD 175 182  LIB 539 556  MGR 187 193  PLA 520 538  POL 3,150 3,260  PWD 1,075 1,115  Total 10,866 11,247 77 ADC for 2017/18. ATTACHMENT A A - 52 May 9, 2016 E-51 DEFINITIONS  GASB 45 Accrual Accounting  Project future employer-provided benefit cash flows for current active employees and current retirees  Discount projected cash flow to valuation date using discount rate (assumed return on assets used to pay benefits) and other actuarial assumptions to determine present value of projected future benefits (PVB)  Allocate PVB to past, current, and future periods using the actuarial cost method  Actuarial cost method used for this valuation is the Entry Age Normal Cost method which determines Normal Cost as a level percentage of payroll (same method used by CalPERS)  Normal Cost is amount allocated to current fiscal year  Actuarial Accrued Liability (AAL) is amount allocated to prior service with employer  Unfunded AAL (UAAL) is AAL less plan assets pre-funded in a segregated and restricted trust  PayGo Cost  Cash subsidy is the pay-as-you-go employer benefit payments for retirees  Implied subsidy is the difference between the actual cost of retiree benefits and retiree premiums subsidized by active employee premiums May 9, 2016 E-52 DEFINITIONS Present Value of Benefits Present Value of Benefits (With Plan Assets) Unfunded Actuarial Accrued Future Normal Costs Normal Cost Assets Present Value of Benefits (Without Plan Assets) Unfunded Actuarial Accrued Liability Future Normal Costs Normal Cost ATTACHMENT A A - 53 May 9, 2016 E-53 DEFINITIONS  Annual Required Contribution (ARC)  “Required contribution” for the current period including:  Normal Cost  Amortization of: - Initial UAAL - AAL for plan, assumption, and method changes - Experience gains/losses (difference between expected and actual) - Contribution gains/losses (difference between ARC and contributions)  ARC in excess of pay-as-you-go costs not required to be funded  Net OPEB Obligation (NOO)  Net OPEB Obligation is the accumulated amounts expensed but not funded  Net OPEB Asset if amounts funded exceed those expensed  Annual OPEB Cost (AOC)  Expense for the current period including:  ARC  Interest on NOO  Adjustment of NOO  NOO adjustment prevents double counting of expense since ARCs include an amortization of prior contribution gains/losses previously expensed ATTACHMENT A A - 54 City of Palo Alto (ID # 6657) Finance Committee Staff Report Report Type: Action Items Meeting Date: 4/19/2016 City of Palo Alto Page 1 Council Priority: City Finances Summary Title: Storm Drain Fee Increase for FY2017 Title: Adoption of a Resolution Amending Utility Rate Schedule D -1 (Storm and Surface Water Drainage) Reflecting a 3.2 Percent Consumer Price Index Rate Increase to $13.03 Per Month Per Equivalent Residential Unit for Fiscal Year 2017 From: City Manager Lead Department: Public Works Recommendation Staff recommends that the Finance Committee recommend that Council adopt the attached resolution (Attachment A) amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage), to implement a 3.2% rate increase consistent with the applicable Consumer Price Index – Urban Consumers, increasing the monthly charge per Equivalent Residential Unit by $0.40, from $12.63 to $13.03 for Fiscal Year 2017. Background On April 26, 2005, a majority of Palo Alto property owners approved a ballot measure authorizing an increase in the monthly Storm Drainage Fee to fund storm drain capital improvements and augmented maintenance. Council certified the results of the ballot proceeding on May 9, 2005. The approved ballot measure contained an annual fee escalator clause that permits the Council to raise the Storm Drainage Fee each year to account for inflationary cost increases. Specifically, the ballot measure stated: ATTACHMENT B B - 1 City of Palo Alto Page 2 “In order to offset the effects of inflation on labor and material costs, the proposed fee increase would be subject to annual increases beyond the initial $10.00 per Equivalent Residential Unit (ERU) rate as of July 1 of each year, starting in 2006. Inflation adjustments would be based on the lesser of the local rate of inflation (based on the change in the Consumer Price Index [CPI-U] for the San Francisco-Oakland-San Jose CMSA, published by the United States Department of Labor, Bureau of Labor Statistics) or 6 percent. The City Council would have the authority and discretion to implement inflation adjustments on an annual basis as part of the City budget process.” On May 9, 2005, Council adopted a resolution increasing the Storm Drainage rate schedule to $10.00 per month per ERU, effective June 1, 2005. The Council approved rate for FY 2016 is $12.63 per month per ERU. Discussion Staff has determined from Bureau of Labor Statistics records that the CPI-U for the San Francisco-Oakland-San Jose CMSA increased by 3.2% between December 2014 and December 2015. As the CPI-U rate is substantially lower than 6%, consistent with the ballot measure, staff recommends that the Storm Drainage Fee be increased by the CPI-U in order to keep fund revenues consistent with general cost increases and to provide sufficient funds for planned storm drain capital expenditures. In particular, the increased revenue is needed to cover construction costs for the remaining storm drain capital improvement projects. Approval of the rate increase will help to ensure that staff can complete all seven of the capital projects specified in the 2005 ballot measure before the fee increase sunsets in June 2017. A table summarizing projected rate increases for all of the City’s utilities for the period of FY 2017 through FY 2021 is attached for reference (Attachment B). In order to enact the Storm Drainage Fee increase, Council must adopt the attached resolution amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage). The new rate for the Storm Drainage Fee will be $13.03 per month per ERU. Single-family residential properties are billed a monthly amount based on parcel size, in accordance with the following table: ATTACHMENT B B - 2 City of Palo Alto Page 3 RESIDENTIAL RATES (Single-Family Residential Properties) PARCEL SIZE (sq. ft.) ERU FY2016 RATE FY2017 RATE < 6,000 sq. ft. 0.8 ERU $10.11/month $10.43/month 6,000-11,000 sq. ft. 1.0 ERU $12.63/month $13.03/month > 11,000 sq. ft. 1.4 ERU $17.68/month $18.25/month Commercial, industrial, institutional, and multi-family residential properties are billed on a monthly basis at a rate of 1.0 ERU for each 2,500 square feet of impervious surface on the parcel. Resource Impact The 3.2 percent increase in rates is expected to increase annual revenue to the Storm Drainage Fund by approximately $194,000 and, if recommended, will be included in the Public Works Department Storm Drainage Fund FY 2017 proposed operating budget. When the storm drain rates approved by property owners via the 2005 ballot measure sunset on June 1, 2017, rates will revert to $4.25 per month per ERU unless higher rates are approved through a new ballot measure process. Staff has been working with a city manager-appointed blue ribbon committee of Palo Alto residents to develop the scope and timing of a storm drain ballot measure to be presented to property owners later this year. Timeline The Storm Drainage Fee increase will take effect on July 1, 2016. Storm drain rates will revert to $4.25 per month per ERU on June 1, 2017 unless higher rates are approved through a new ballot measure process. Environmental Review Adoption of changes to utility rate schedules does not represent a project under the California Environmental Quality Act (CEQA). Courtesy Copies Storm Drain Oversight Committee Palo Alto Chamber of Commerce Attachments:  A - Resolution Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) (PDF) ATTACHMENT B B - 3 City of Palo Alto Page 4  B - Overview of Projected City of Palo Alto Utility Rate Increases (PDF) ATTACHMENT B B - 4 NOT YET APPROVED 1 160229 sh 0140157 Resolution No. ______ Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Drain Rates by 3.2% Per Month Per Equivalent Residential Unit for Fiscal Year 2017 The Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2016. SECTION 2. The Council finds that this rate increase is being imposed to offset the effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator provision of the Storm Drainage Fee ballot measure, which was approved by a majority of Palo Alto property owners on April 26, 2005. SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. // // // // // // // // // // // ATTACHMENT B B - 5 NOT YET APPROVED 2 160229 sh 0140157 SECTION 4. The Council finds that modification and approval of this change to the Utility Rate Schedule D-1 (Storm and Surface Water Drainage) for the purpose of meeting operating expenses is statutorily exempt from California Environmental Quality Act (CEQA) review, pursuant to Public Resources Code Section 15273(a). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ City Attorney City Manager _____________________________ Director of Public Works _____________________________ Director of Administrative Services ATTACHMENT B B - 6 GENERAL STORM AND SURFACE WATER DRAINAGE UTILITY RATE SCHEDULE D-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 7-1-2016 Supersedes Sheet No.D-1-1 dated 7-1-2015 Sheet No. D-1-1 A. APPLICABILITY: This schedule applies to all storm and surface water drainage service, excepting only those users and to the extent that they are constitutionally exempt under the Constitution of the State of California or who are determined to be exempt pursuant to Rule and Regulation 25. B. TERRITORY: Inside the incorporated limits of the city of Palo Alto and land owned or leased by the city. C. RATES: Per Month: Storm Drainage Fee per Equivalent Residential Unit (ERU) ........................................................ $13.03 D. SPECIAL NOTES: 1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm drainage fees for residential and non-residential customers. All single-family residential properties shall be billed the number of ERUs specified in the following table, based on an analysis of the relationship between impervious area and lot size for Palo Alto properties. RESIDENTIAL RATES (Single-Family Residential Properties PARCEL SIZE (sq.ft.) ERU <6,000 sq.ft. 0.8 ERU 6,000 - 11,000 sq.ft. 1.0 ERU >11,000 sq.ft. 1.4 ERU All other properties will have ERU's computed to the nearest 1/10 ERU using the following formula: No. of ERU = Impervious Area (Sq. Ft.) 2,500 Sq. Ft. 2. For more details on the storm drainage fee, refer to Utilities Rule and Regulation 25. {End} ATTACHMENT B B - 7 Attachment B    Rate Adjustments for All Utilities:  FY 2017 Proposed, FY 2018 to FY 2021 Projected  Utility FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  Electric Utility 11% 10% 2% 0% 1%  Gas Utility 8% 9% 7% 1% 1%  Wastewater 9% 10% 9% 7% 6%  Water Utility 6% 9% 9% 6% 2%  Refuse1 9% 8% 5% 3% 3%  Storm Drain 3.2% 2% to 3% 2% to 3% 2% to 3% 2% to 3%  Bill Change (%) 8% 9% 6% 4% 2%  ($/mo) $20.80  $23.45  $18.49  $11.16  $7.77     ATTACHMENT B B - 8 Storm Drain Oversight Committee MEMORANDUM Date: May 4, 2016 To: Honorable Finance Committee of the Palo Alto City Council From: Members of the Storm Drain Oversight Committee Subject: Review of the Proposed FY 2017 Storm Drainage Fund budget As directed by the City Council, we have reviewed the proposed Storm Drainage Fund budget for fiscal year 2017 and compared it with the provisions of the Storm Drainage Fee increase approved by Palo Alto property owners in 2005. Based on this review, we find that the proposed budget reflects the increased fees, CIP projects, and operating expenditures approved in the ballot measure. The Committee met to discuss the proposed budget on Wednesday, May 4, 2016. Prior to the meeting, Storm Drainage staff provided a packet of informational materials about the approved ballot measure and the proposed budget for the Committee’s review. During the meeting, staff presented information regarding the Storm Drainage Fund operating and capital budgets and answered questions from the Committee members. Based upon our review of the materials provided to us by Storm Drainage staff, we find that the attached matrix describing the proposed use of the Storm Drainage Fee increase for FY 2017 and the table providing a side-by-side comparison of the ballot measure and the proposed budget accurately describe the relationship between the budget and the ballot measure. In addition, the attached spreadsheet summarizes the status of the Storm Drainage Fund capital improvement program implementation to-date. Staff and the Committee concur that there will be adequate funding generated by the Storm Drainage Fee increase authorized through the 2005 ballot measure to fund the seven capital improvement projects specified for implementation in the ballot measure, with the exception of the Loma Verde/Louis Road storm drain trunkline improvements element of the Matadero Creek Storm Water Pump Station Upgrade Project, which will be deferred to the new package of capital improvements that will be proposed under the new ballot measure for storm drain funding. With this exception, the Matadero Creek Storm Water Pump Station Upgrade Project will be completed within the 2005 ballot measure funds. Attachments ATTACHMENT C C - 1 Proposed Use of Storm Drainage Fee Increase for FY 2017 Line Item Revenue Expenditures Fee Increase Revenue SD Fee Increase $4,450,405 Capital Improvements and Program Enhancements A. One-time SD CIP Projects San Francisquito Creek Pump Station $0 Channing/Lincoln Storm Drain $0 Southgate Neighborhood Storm Drains $0 Gailen/Bibbits SD Improvements $0 Clara Drive SD Improvements $0 Matadero Creek Pump Station & Trunks $1,990,000 Alma Street SD Improvements $0 B. Enhanced Maintenance SD Replacement/Rehabilitation CIP $660,000 Augmented SD Maintenance $168,691 C. Innovative SD Projects $159,000 D. Augmented Storm Water Quality $223,700 E. Capital Improvement Program Staffing New CIP Engineer $153,504 CIP Support Staff $34,024 Surveyor $16,460 SUBTOTALS $4,450,405 $3,405,379 From Storm Drainage Fund Reserves $543,927 Other storm drain expenses previously covered by General Fund subsidy $1,588,953 TOTALS $4,994,332 $4,994,332 Prepared for the Storm Drain Oversight Committee by Rajeev Hada and Gina Magliocco 05/04/2016 ATTACHMENT C C - 2 Approved Storm Drainage Fee Increase Ballot Measure vs. Preliminary FY 2017 Storm Drainage Fund Budget BALLOT MEASURE 1. Implementation of seven (7) high- priority storm drain capital improvement projects. 2. $ 500,000 annually (adjusted annually for inflation) for storm drain system repair and rehabilitation. 3. $ 90,000 annually for augmented storm drain system maintenance. 4. $ 125,000 annually (adjusted annually for inflation) for innovative projects to reduce storm water runoff and pollutant levels. 5. $ 100,000 annually (adjusted annually for salary increases) to fund storm water quality protection activities formerly funded by the Wastewater Treatment Fund. 6. $ 115,000 annually (adjusted annually for salary increases) for an engineer to assist with implementation of storm drain capital improvement projects. 7. Annual adjustment of fees by local CPI increase or 6%, whichever is lower. 8. Pre-payment of Storm Drainage Fees for City-owned properties to accelerate implementation of storm drain capital improvement projects. PROPOSED BUDGET 1. $1,990,000 for Matadero Pump Station Improvements (CIP SD-13003). 2. $ 660,000 for Storm Drain System Replacement and Rehabilitation (CIP SD-06101) 3. $168,691 in additional funding for Storm Drain In-House Maintenance: ($ 90,000 for supplies & materials + 0.45 additional FTE staffing). 4. $ 159,000 allocated to Storm Water Rebate Program for rain barrels, cisterns, permeable pavement, and green roofs. 5. $223,700 in additional funding for Storm Water Quality Protection (0.88 additional FTE staffing, $39,000 for non-salary expenses, $50,000 for Green Infrastructure Plan. 6. $203,988 in additional funding for Engineer position (0.9 FTE), CIP support staff (0.3 FTE), and Surveyor (0.12 FTE) funded in Storm Drain System Improvements. 7. Proposed 3.2% increase per the change in the CPI for San Francisco-Oakland- San Jose for calendar year 2015. 8. No pre-payment for FY 2016; all scheduled pre-payments by General Fund have been made. ATTACHMENT C C - 3 Proposed Storm Drain Capital Spending Plan SF Creek Pump Station Gailen / Bibbits Alma Street Channing Lincoln Trunk Matadero PS and Trunks Clara Drive Southgate Neighborhood YEARLY PROJECT Year FY $4,500,000 $650,000 $1,500,000 $4,600,000 $3,000,000 $900,000 $2,000,000 TOTAL 1 FY 2005-06 $900,000 $650,000 $180,000 $1,730,000 2 FY 2006-07 $735,000 $735,000 3 FY 2007-08 $7,535,000 ($915,000)$6,620,000 4 FY 2008-09 $700,000 $785,000 $1,485,000 5 FY 2009-10 $820,000 $820,000 6 FY 2010-11 $895,000 $895,000 7 FY 2011-12 $1,590,000 $140,000 $1,730,000 8 FY 2012-13 $1,680,000 $860,000 $2,540,000 9 FY 2013-14 $1,430,000 $315,000 $750,000 $1,026,271 $3,521,271 10 FY 2014-15 $1,840,000 $1,840,000 11 FY 2015-16 $1,915,000 $1,915,000 12 FY 2016-17 $1,990,000 $1,990,000 $9,135,000 $650,000 $785,000 $6,415,000 $6,060,000 $750,000 $2,026,271 $25,821,271 NOTES: 1. Cost figures immediately below project titles reflect Year 2005 cost estimates. Spreadsheet figures represent actual incurred costs & projected future costs. 2. Shaded projects have been completed to-date. 3. Phases 1 & 2 (of 3) of the Channing/Lincoln CIP have been completed. 05/04/2016 JT ATTACHMENT C C - 4 5/12/2016 City of Palo Alto M E M O R A N D U M TO: Finance Committee DATE: May 12, 2016 SUBJECT: Additional Information Pertaining to the Fiscal Year 2017 Proposed Operating Budget This memorandum transmits additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the Fiscal Year 2017 Proposed Operating Budget. Community Services HSRAP Allocations – Historical Funding Levels (Finance Committee Budget Hearing May 5th; Agenda Item #5) At the May 10th Finance Committee meeting, in response to the at places memorandum that was transmitted at that meeting, additional information was requested about the Human Services Resources Allocation Process (HSRAP) requesting an outline of the funding history dating back to FY 2001. Below is a chart detailing this history. These annual figures do not include funding for Avenidas and Palo Alto Community Child Care in order to provide a more accurate comparison to the current funding amount. 5/12/2016 Historical HSRAP Funding Levels Year Adopted Budget % change from prior year 2000-2001 $386,425 2001-2002 $433,254 12.12% 2002-2003 $446,251 3.00% 2003-2004 $335,835 (24.74%) 2004-2005 $375,835 11.91% 2005-2006 $331,453 (11.81%) 2006-2007 $331,453 0.00% 2007-2008 $300,453 (9.35%) 2008-2009 $300,453 0.00% 2009-2010 $285,430 (5.00%) 2010-2011 $285,430 0.00% 2011-2012 $300,737 5.36% 2012-2013 $300,737 0.00% 2013-2014 $355,324 18.15% 2014-2015 $425,594 19.78% 2015-2016 $436,659 2.60% 2016-2017 $448,012 2.60% Development Services Development Fee Cost Recovery (Finance Committee Budget Hearing May 10th; Agenda Item #2) At the May 10th Finance Committee meeting, a discussion occurred about what costs are eligible to be recovered through development services fee payers, specifically in regards to Fire Department staffing. Per Proposition 26 “Supermajority Vote to Pass New Taxes and Fees Act” and Proposition 218 “Right to Vote on Taxes Act”, all governmental charges must be approved by the voters unless they qualify for an exemption. Under Proposition 26, California Constitution Article XIIIC, Section 1(e)(3), regulatory fees, including fees for “issuing licenses and permits, performing investigations, inspections, and audits,” may be exempt, but only to the extent the fees do not exceed the amount necessary to cover the reasonable cost of the services provided. Proposition 26 places the burden on the City to show that a regulatory fee does not exceed this limitation. Therefore, training and related certification costs can be passed on to the fee payers only if they are necessary to complete inspection work. For example, if fire suppression training is only necessary for fire suppression work and is not necessary for the inspectors to complete fire inspection work, those costs cannot be passed on to fee payers. Should the City wish to pass along the fire suppression training costs, it would need to show that suppression training is necessary for the fire inspectors to provide inspections. City of Palo Alto (ID # 6295) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/25/2016 City of Palo Alto Page 1 Summary Title: Annual Status Report Development Impact Fees FY15 Title: Review and Acceptance of Annual Status Report on Development Impact Fees for Fiscal Year 2015 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council review and accept the Annual Report on Development Impact Fees for the year ended June 30, 2015 (Attachment A). Background State law (Government Code Section 66006) requires that each local agency that imposes development impact fees prepare an annual report providing specific information about those fees. This requirement is part of the law commonly referred to as AB 1600. It codifies the legal requirement that fees on new development must have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposes certain accounting and reporting requirements with respect to the fees collected. The fees, for accounting purposes, must be segregated from the general funds of the City and from other funds or accounts containing fees collected for other improvements. Interest on each development fee fund or account must be credited to that fund or account and used only for the purposes for which the fees were collected. Government Code Section 66006 contains comprehensive annual reporting requirements for development impact fees. This statute requires that, within 180 days after the close of the fiscal year, the agency that collected the fees must make available to the public the following information regarding each fund or account:  Brief description of the type of fee in the fund.  Amount of the fee.  Beginning and ending balance in the fund. Attachment A A-1 City of Palo Alto Page 2  Amount of fees collected and interest earned.  Identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.  Identification of an approximate date by which the construction of a public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement.  Description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan.  Amount of any refunds made due to inability to expend fees within the required time frame. This report must also be reviewed by the City Council at a regularly scheduled public meeting not less than 15 days after the information is made available to the public. In addition, notice of the time and place of the meeting shall be mailed at least 15 days prior to the meeting to any interested party who files a written request with the local agency for such a mailed notice. An early packet consisting of Exhibit A only was made available to the public and included in the packet for the December 7, 2015 meeting of the City Council. The law also provides that, for the fifth fiscal year following the first deposit into the fund and every five years thereafter, the local agency shall make findings with respect to any portion of the fee remaining unexpended, whether committed or uncommitted. The finding must:  identify the purpose to which the fee is to be put;  demonstrate a nexus between the fee and the purpose for which it was originally charged; and  identify all sources and amounts of funding anticipated to complete financing of incomplete improvements along with the approximate dates on which the anticipated funding is expected to be deposited into the fund. If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or to perform certain administrative tasks prescribed by AB 1600, the agency may be required to refund to property owners a prorated portion of the monies collected for that project and any interest earned on those funds. The City Auditor’s office recently conducted an audit of the City’s Parking in-lieu fund. Attachment A A-2 City of Palo Alto Page 3 Discussion The City of Palo Alto development fees covered by AB 1600, and documented in Attachment A, include the established fees noted below, as well as two new fees for Public Safety Facilities and General Government Facilities that were approved by Council in May 2014. In addition, though not technically a fee covered by AB 1600, the City is reporting its Public Art fee for informational purposes only.  Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections.  San Antonio/West Bayshore Area traffic impact fees (PAMC Ch. 16.46): Fee for new nonresidential development in the San Antonio/West Bayshore area to fund capacity improvements at four intersections.  Commercial housing in-lieu (PAMC Ch. 16.47): Fee on commercial and industrial development to contribute to programs that increase the City's low income and moderate-income housing stock.  University Avenue Parking in-lieu (PAMC Ch. 16.57): Fee on new non-residential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces.  Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new residential and non-residential development to provide community facility funds for parks, community centers, libraries, public safety, and general government.  Residential housing in-lieu fees (PAMC Ch. 16.47): Fee on residential developments in- lieu of providing required below-market rate units to low and moderate income households.  Parkland dedication fees (Quimby Act) (California Government Code Section 66477): Fee or parkland dedication imposed on new residential and non-residential development.  Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.59): Fee on new development and re-development within the Charleston-Arastradero Corridor to provide for pedestrian and bicyclist improvements.  Public Safety facilities (PAMC Ch. 16.58): Fee on residential and non-residential development to fund police and fire facilities, including fire apparatus and vehicles.  General Government facilities (PAMC Ch. 16.58): Fee on residential and non-residential development to fund facilities associated with municipal administration. Attachment A A-3 City of Palo Alto Page 4  Citywide Transportation impact fee (PAMC Ch 16.59): Fee on development in all parts of the City to fund transportation projects and programs to reduce congestion.  Public Art fees (PAMC 16.61): Fee on public art for private developments.  Water and sewer capacity fees (California Government Code Section 66000): Fee on developments adding load to water and sewer systems. AB 1600 requires the City to make specified findings in the event any funds are not expended within five fiscal years of collection and every five years thereafter. While there are several funds containing collected fees that have not been expended in five years, the required statutory carryover findings have already been made for those funds and no further findings are required. RESOURCE IMPACT Council approved the required findings with respect to unexpended fees in fiscal years 2012 and 2013. There were no required findings for either fiscal year 2014 or fiscal year 2015. The next finding date will be fiscal year 2017, and the unexpended balances for each fee type are noted at the bottom of each section in Attachment A. Attachments:  Attachment A: Developer Fees (XLS) Attachment A A-4 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Stanford Research Park/San Antonio/West FUND El Camino Fund Bayshore Fund Purpose and Authority Traffic impact fees imposed on new Traffic impact fees imposed on new for Collection nonresidential development in the nonresidential development in the Stanford Research Park/El Camino San Antonio/West Bayshore Areas Real CS zone to fund improvements to fund capacity improvements at at eight identified intersections.four identified intersections. PAMC Ch. 16.45 PAMC Ch. 16.46 Amount of the Fee $11.64 per square foot $2.40 per square foot Fund Balance July 1, 2014 $3,492,212 $848,819 Activity in 2014-15 Revenues Fees Collected 616,173 0 Interest Earnings 73,552 16,769 Unrealized Gain/Loss Investments (4,692)(361) -------------------------------------------------------------------------------------------------------------------- Total Revenues $685,033 $16,408 Expenditures Inter-agency expenses 0 Transfer to Gas Tax Fund (994,217)0 -------------------------------------------------------------------------------------------------------------------- Total Expenditures (994,217)0 -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $3,183,028 $865,227 Other Commitments/AppropriationsReserve for unrealized gain on investments (19,599)(5,037)-------------------------------------------------------------------------------------------------------------------- Net Funds Available $3,163,429 $860,190 Unexpended balance at next finding date (FY 2017-18)$2,343,008 $823,819 USE OF FEES:USE OF FEES: Expenditures of funds have been made in Fiscal Year 2015 for $994K transfer to Gas Tax Fund. During the FY 2008-09, the City transferred out $994k from Gas Tax Fund to this fund for various street related costs. However, the transfer were not used for street related expenses, as result per SCO recommendation $994K was returned to Gas Tax Fund. No expenditures have been made from this fund in Fiscal Year 2015. Page 1 of 10 1/5/2016 Attachment A A-5 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Commercial Housing University Avenue Parking FUND In-Lieu Fund In-Lieu Fund Purpose and Authority Fees imposed on large commercial Fees collected from non-residential for Collection and industrial development to development within the University Ave. contribute to programs that increase Parking Assessment District in lieu of the City's low income and moderate-providing the required number of income housing stock.parking spaces. PAMC Ch.16.47 PAMC Ch 16.57 Amount of the Fee $19.31 per square foot $63,848 per space Fund Balance July 1, 2014 $12,538,778 $1,970,372 Activity in 2014-15 Revenues Fees Collected 2,297,126 2,890,950 Interest Earnings 171,150 90,052 Unrealized Gain/Loss Investments 10,053 11,685 -------------------------------------------------------------------------------------------------------------------- Total Revenues 2,478,329 2,992,687 Expenditures Transfer to Residential Housing In- Lieu Fund (375,000)0 -------------------------------------------------------------------------------------------------------------------- Total Expenditures (375,000)0 -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $14,642,107 $4,963,059 Other Commitments/Appropriations Reserve for Notes Receivable include:$1,290,000 for 2811 Alma, and $3,645,010 for 801 Alma.(4,935,010) Reserve for Buena Vista (7,700,000) Reserve for unrealized gain on investments (49,863)(20,457) -------------------------------------------------------------------------------------------------------------------- Net Funds Available $1,957,234 $4,942,602 Unexpended balance at next finding date (FY 2017-18)4,667,286 $652,080 USE OF FEES:USE OF FEES: Expenditures of funds have been made in Fiscal Year 2015 for $375K. This is transfer to Residential Housing In-Lieu Fund for rehabilitation and preservation of affordable housing units at 110-130 El Dorado. This will be repaid on June 30, 2016 including interest. No expenditure of funds have been made from this fund in Fiscal Year 2015. Page 2 of 10 1/5/2016 Attachment A A-6 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Residential & Non-Residential Housing Residential & Non-Residential Housing Community Facilities Community Facilities FUND Parks Community Centers Purpose and Authority Fees imposed on new residential and Fees imposed on new residential and for Collection non-residential development approved non-residential development approved after Jan 28, 2002 for Parks. after Jan 28, 2002 for Community Centers. PAMC Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $11,180/residence (or $16,695/residence larger than 3,000 sq ft); Multi-family $7,318/unit (or $3,700/unit smaller than or equal to 900 sq ft) Residential: Single family $2,898/residence (or $4,439/residence larger than 3,000 sq ft); Multi-family $1,907/unit (or $963/unit smaller than or equal to 900 sq ft) Nonresidential: Commercial/industrial $4,748 per 1,000 sq ft; Hotel/Motel $2,147 per 1,000 sq ft Nonresidential: Commercial/industrial $268 per 1,000 sq ft; Hotel/Motel $121 per 1,000 sq ft Fund Balance July 1, 2014 $2,929,569 $5,009,861 Activity in 2014-15 Revenues Fees Collected 830,387 117,161 Interest Earnings 64,721 99,910 Unrealized Gain/Loss 5,398 (4,344) -------------------------------------------------------------------------------------------------------------------- Total Revenues $900,506 $212,727 -------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $3,830,075 $5,222,588 Other Commitments/Appropriations Reserve for unrealized gain on investments (19,905)(30,068)-------------------------------------------------------------------------------------------------------------------- Net Funds Available $3,810,170 $5,192,520 Unexpended balance at next finding date (FY 2016-17)446,005 $843,809 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2015. No expenditure of funds have been made from this Fund in Fiscal Year 2015. Page 3 of 10 1/5/2016 Attachment A A-7 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Residential & Non-Residential Housing Residential Housing Community Facilities In-Lieu Fund FUND Libraries Purpose and Authority Fees imposed on new residential and Fees collected from residential for Collection non-residential development approved developments of three or more units in after Jan 28, 2002 for Libraries. lieu of providing the required below- market rate unit(s) to low and moderate PAMC Ch. 16.58 income households. PA Comprehensive Plan and PAMC Chapter 18 Amount of the Fee Residential: Single family $1,012/residence (or $1,507/residence larger than 3,000 sq ft); Multi-family $604/unit (or $332/unit smaller than or equal to 900 sq ft)Varies Nonresidential: Commercial/industrial $255 per 1,000 sq ft; Hotel/Motel $107 per 1,000 sq ft Fund Balance July 1, 2014 $730,991 $13,909,337 Activity in 2014-15 Revenues Fees Collected 58,007 19,800 Sterling Litigation Settlement 3,851,759 Webster Wood In-Lieu Payment 5,175 Interest Earnings 14,909 203,752 Unrealized Gain/Loss Investments (211)12,663 Transfer from Commercial Housing In- Lieu Fund 375,000 -------------------------------------------------------------------------------------------------------------------- Total Revenues $72,705 $4,468,149 Expenditures Legal (278,326) Housing Program Expense (347,070) Principal Retired (131,126) -------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 (756,522) -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $803,697 $17,620,964 Other Commitments/Appropriations Reserve for Reappropriations (1,975,000) Reserve for Encumbrances (363,645) Reserve for Buena Vista (6,800,000) Reserve for unrealized gain on investments (4,512)(46,400) Reserve for Notes Receivable include $375,000 for 3053 Emerson, $3,804,850 for Tree House Apts, $203,093 for Oak Manor, $756,819 for Sheridan Apts., and $2,674,986 for 801 Alma (7,814,748) -------------------------------------------------------------------------------------------------------------------- Net Funds Available $799,185 $621,171 Page 4 of 10 1/5/2016 Attachment A A-8 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Unexpended balance at next finding date (FY 2016-17-Residential & Non Residential Housing Communities Facilities Libraries, FY2017-18- Residential Housing In-Lieu)$541,529 2,734,967 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2015. Expenditures in Fiscal Year 2015 include $147K to Palo Alto Housing Corp for BMR fees, $131K for Oak Manor Apts. loan forgiveness, $279K for legal fees, and $200K financial contribution to Housing Trust Silicon Valley. Page 5 of 10 1/5/2016 Attachment A A-9 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Parkland Dedication Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety FUND Purpose and Authority Fees on parkland dedication imposed Fees collected from new development and for Collection on new residential and non-residential re-development within the Charleston- development Arastradero Corridor to provide for pedest- rian and bicyclist safety improvements. Govt Code Sec.66477 (Quimby Act) PAMC Ch. 16.60 Amount of the Fee Varies Residential: $1,225 per unit; Commercial: $0.36 per sq ft Fund Balance July 1, 2014 $2,427,163 $249,804 Activity in 2014-15 Revenues Fees Collected 78,214 1,168 Interest Earnings 48,088 4,942 Unrealized Gain/Loss (310)(1,224) -------------------------------------------------------------------------------------------------------------------- Total Revenues $125,992 $4,886 -------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $2,553,155 $254,690 Other Commitments/ReappropriationsReserve for unrealized gain on investments (14,534)(1,475) -------------------------------------------------------------------------------------------------------------------- Net Funds Available $2,538,621 $253,215 Unexpended balance at next finding date (FY 2016-17-Parkland Dedication, FY2017-18-Charleston)$757,744 $138,989 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2015. No expenditure of funds have been made from this Fund in Fiscal Year 2015. Page 6 of 10 1/5/2016 Attachment A A-10 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 New Public Safety Facilities General Government Facilities FUND Purpose and Authority Fees imposed on residential and non- residential development to fund police and fire facilities (including fire apparatus and vehicles) Fees imposed on residential and non- residential development to fund facilities associated with municipal administration for Collection PAMC Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $996 per unit; Multi-family $797 per unit Residential: Single family $1,225 per unit; Multi-family $1004 per unit Nonresidential: Commercial $557 per 1,000 sq ft. or fraction thereof; Industrial $186 per 1,000 sq. ft. or fraction thereof; Hotel/Motel $743 per 1,000 sq ft or fraction thereof Nonresidential: Commercial $702 per 1,000 sq ft. or fraction thereof; Industrial $234 per 1,000 sq. ft. or fraction thereof; Hotel/Motel $937 per 1,000 sq ft or fraction thereof Fund Balance July 1, 2014 $0 $0 Activity in 2014-15 Revenues Fees Collected 1,594 2,008 Interest Earnings 2 3 -------------------------------------------------------------------------------------------------------------------- Total Revenues $1,596 $2,011 -------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 -------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2015 $1,596 $2,011 Other Commitments/Reappropriations -------------------------------------------------------------------------------------------------------------------- Net Funds Available $1,596 $2,011 Unexpended balance at next finding date FY 2019-20 $1,596 $2,011 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2015. No expenditure of funds have been made from this Fund in Fiscal Year 2015. Page 7 of 10 1/5/2016 Attachment A A-11 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 Citywide Transportation FUND Purpose and Authority for Collection Transportation impact fees imposed on new development in all parts of the City to fund congestion reduction projects. PAMC Ch. 16.59 Amount of the Fee $3,354 per net new PM peak hour trip Fund Balance July 1, 2014 $3,882,010 Activity in 2014-15 Revenues Fees Collected 405,120 Interest Earnings 62,759 Unrealized Gain/Loss Investments (4,311)-------------------------------------------------------- Total Revenues $463,568 Expenditures Operating Transfer to CIP (1,885,183) -------------------------------------------------------- Total Expenditures (1,885,183)-------------------------------------------------------- Ending Balance June 30, 2015 $2,460,395 Other Commitments/Reappropriations Reserve for unrealized gain on investments (18,630)-------------------------------------------------------- Net Funds Available $2,441,765 Unexpended balance at next finding date (FY 2017-18)$1,216,124 USE OF FEES: Expenditures have been made in Fiscal Year 2015 for $372K to PL-15001 (Embarcadero Corridor), $308K to PL- 14000 (El Camino / Churchhill), $841K to PL-05030 (Traffic Signal and ITS upgrades, and $364K to PL-11003 (Palo Alto Traffic Signal) Page 8 of 10 1/5/2016 Attachment A A-12 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 (INFORMATION ONLY) Public Art Fund FUND Purpose and Authority for Collection Fees imposed on new commercial develoments (including mixed use projects), including new construction, remodels, additions and reconstruction that (i) have a floor area of 10,000 square feet or more, and (ii) have a construction value of $200,000, or more, exclusive of costs for architecture, design, engineering, and required studies; and all new residential projects of five or more units to fund public art for private developments. PAMC Ch. 16.61 Amount of the Fee 1% of first $100 million construction valuation and .9% of construction valuation for valuation in excess of $100 million Fund Balance July 1, 2014 $56,176 Activity in 2014-15 Revenues Fees Collected 110,485 Interest Earnings 5,707 Unrealized Gain/Loss Investments 1,208 Operating Transfer from General Fund 96,123 -------------------------------------------------------- Total Revenues $213,523 Expenditures Salaries and benefits (114,815) Supplies and materials (168) -------------------------------------------------------- Total Expenditures (114,983) -------------------------------------------------------- Ending Balance June 30, 2015 $154,716 Reserve for unrealized gain on investments (1,546) -------------------------------------------------------- Net Funds Available $153,170 This fund is not subject to AB1600 requirements and is listed only for information purposesPage 9 of 10 1/5/2016 Attachment A A-13 Attachment A City of Palo Alto Annual Report on Development Impact Fees for Period Ending June 30, 2015 (INFORMATION ONLY) FUND Water and Wastewater Collection Purpose and Authority Capacity fees charged to developers that for Collection are adding load to the water and sewer systems effective July 1, 2005. California Government Code Sect 66000 Amount of the Fee Water Domestic: 5/8 in., 3/4 in. $5,000, 1 in. $9,400, 1 1/2 in. $18,850, 2 in. by est. $125/FU, 3 in. by est. $125/FU , 4 in. by est. $125/FU , 6 in. by est. $125/FU Water Fire Service: 2 in. $750, 4 in. $9,000, 6 in. $22,530, 8 in. $43,080, 10in. $69,510 Sewer: 4 in. $10,500 first 50 FU, $210/FU additional, 6 in. by est. $210/FU, 8 in. by est. $210/FU FU is fixture unit Activity in 2014-15 Capacity Fees Collected Water $1,132,095 Wastewater Collection 647,640 Total $1,779,735 USE OF FEES: The fees are used exclusively for water and sewer system improvements Page 10 of 10 1/5/2016 Attachment A A-14 1 5/17/2016 City of Palo Alto M E M O R A N D U M TO: Finance Committee DATE: May 17, 2016 SUBJECT: Recommended Changes and Additional Information Pertaining to the Fiscal Year 2017 Proposed Budget This memorandum transmits additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the Fiscal Year 2017 Proposed Budget. Recommended Changes to the FY 2017 Proposed Budget and/or Finance Committee Motions Street Trees Contract Increase vs. Cycle Time (Finance Committee Budget Hearing May 12th; Agenda Item #3b) At the May 12th Finance Committee meeting, additional details about the tree trimming contract and potential cycle times was requested. Below is a chart detailing the number of trees that would be pruned annually based on a 7 year, 10 year, and 15 year cycle time and the annual and total cost for a three year contract with each of these cycle times. In FY 2017 the unit cost for a tree is $128 and this would increase to $140 and $150 in FY 2018 and FY 2019 respectively based on a population of approximately 43,100 public trees (35,400 street trees and 7,700 park, golf, and open space trees). The current FY 2017 Proposed Operating Budget recommends movement from current service delivery levels of a 7 year cycle to a 15 year cycle. The Finance Committee tentatively approved a motion on May 12th to place a reduction in the cycle time down to 10 years in the “parking lot” for further discussion at the Budget Wrap-up on May 23rd in the amount of $135,000. Staff recommends amending the “parking lot” adjustment to $170,000 to align with the proposals outlined below. 3 Year Tree Trimming Service Contract # of Trees FY 2017 FY 2018 FY 2019 Total 3 Year Pruned Annually Contract Cost Contract Cost Contract Cost Contract Cost 7 Year Cycle 5,380 $1,465,785 $1,567,150 $1,669,515 $4,702,450 10 Year Cycle 3,415 $1,148,885 $1,228,930 $1,303,145 $3,680,960 15 Year Cycle 1,978 $978,930 $1,027,750 $1,087,795 $3,094,475 2 5/17/2016 Electric Fund Capital Improvement Project: Facility Relocation for Caltrain Modernization Project (Finance Committee Budget Hearing May 17th, Item #2.a.ii.) Subsequent to the printing of the FY 2017-2021 Proposed Capital Improvement Plan, a new project was identified by the Utilities Department that is recommended to be added to the five-year plan with $150,000 recommended to be budgeted in FY 2017. This project is detailed in Attachment – B, and provides funding for the relocation of overhead Utility Electric and Fiber Optic lines to provide adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Powers Board (Caltrain) to convert their diesel powered commuter trains to electric power. Staff recommends that the Finance Committee make a motion to include this project in the final recommended FY 2017-2021 CIP with corresponding decreases in the Distribution Reserve in the Electric Fund. Art in Public Places (Finance Committee Budget Hearing May 17th, Item #3) Subsequent to the printing of the FY 2017-2021 Proposed Capital Improvement Plan, an error in the calculation of the Art in Public Spaces capital project (AC-86017) was identified. Replacement pages are included as Attachment – C, which contains an updated project page. Funding levels are recommended to be adjusted as outlined in the table below offset by adjustments to the Infrastructure Reserve Balance. Recommended Changes to Art in Public Places Project FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2017-2021 Proposed CIP (April 25, 2016) $579,840 $613,249 $227,612 $199,400 $0 Recommended $423,513 $212,450 $880,700 $240,012 $125,958 Change ($156,327) ($400,779) $653,088 $40,612 $125,958 Additional Information Pertaining to the FY 2017 Proposed Budget Planning Transportation Commission Findings (Finance Committee Budget Hearing FY 2017 Proposed Capital Improvement Plan) On May 17th, the Planning Transportation Commission reviewed the FY 2017-2021 Proposed Capital Improvement Plan for compliance with the City’s 1998-2010 Comprehensive Plan. Per Section 19.04.040 of the Palo Alto Municipal Code The Planning Commission shall submit an annual report to the council regarding the capital improvement program, which shall review each project for its conformity to the master plan; review the programs as a whole in order to suggest any improvement in economy or efficiency which might be effected through the combining of various projects; and suggest any needed improvements which do not appear in the program. Attached is the letter from the Commission (Attachment – D) outlining their findings in association with the compliance with the Comprehensive Plan. Due to the timing of the PTC meeting schedule and the Finance Committee Budget Hearing schedule, full minutes from this meeting are anticipated to be 3 5/17/2016 transmitted to the full City Council as part of the Adopted of the FY 2017 Budget, agendized for June 13, 2016. Zero Waste Coordinator to Environmental Specialist Reclassification (Finance Committee Budget Hearing May 12th; Agenda Item #3b) In accordance with the SEIU MOA that was ratified by the City Council effective April 16, 2016, the salary difference between a Zero Waste Coordinator and an Environmental Specialist is approximately $11,000 from top-step to top-step. Factored into this difference and included in all the FY 2017 Proposed Budget assumptions include: Effective Upon Ratification April 16, 2016 Effective Date: December 1, 2016 Total General Wage Increase Market Adjustment General Wage Increase Market Adjustment Zero Waste Coordinator 1.5% 0.9% 3.0% 0.9% 6.30% Base Wage Adopted FY 2016 Budget = $83,262 $85,280 $88,608 $5,346 Environmental Specialist 1.5% 1.43% 3.0% 1.43% 7.36% Base Wage Adopted FY 2016 Budget = $93,454 $96,200 $100,485 $7,031 With regards to the specific reclassification of a Zero Waste Coordinator to an Environmental Specialist as recommended in the Refuse Fund (FY 2017 Proposed Operating Budget Page 366), the total difference of salaries and benefits is approximately $8,000. (This reflects the costing for a specific position and incumbent all in terms of changing that position from the FY 2017 costing assumptions for a the Zero Waste Coordinator level to the FY 2017 cost assumptions for an Environmental Specialist). This difference includes: • The marginal salary cost for a specific higher level position with an incumbent employee over the costs of a lower level position • Increased variable benefit costs (Pension, Medicare, etc.) for the higher level position based on a higher salary level. If one were to look at the year-over-year increases from FY 2016 budgeted salaries to FY 2017 budgeted salaries, the difference would be the combination of both the MOA approved increases, and the marginal salary and benefit increases from the lower level job classification to the higher level job classification described above. In addition, when comparing FY 2016 budgeted salaries to FY 2017 budgeted salaries it should be noted that in FY 2016, funding associated with general wage increases for positions was allocated in a salary reserve, and not budgeted directly in departmental budgets due to ongoing negotiations. In FY 2017, all general salary increases for positions have been budgeted in departmental budgets due to the ratification of the MOAs, which causes the year over year salary and benefits change to be larger than just the approved FY 2017 change. 4 5/17/2016 Unfunded Liability & Salary Growth Assumptions (Finance Committee Budget Hearings May 2016) Throughout the Finance Committee hearings and specifically again as part of the discussion surrounding the reclassification requests during the review of the Public Works’ Departmental Budget review, the impacts and assumptions used in the unfunded liability calculation for salary growth have been discussed. Bartel and Associates have provided a quick analysis outlining the percentage growth in salaries assumed and every 1% additional growth implications on the unfunded liability level. Slides 31 and 32 in Attachment – A reflect these calculations. CalPERS makes certain assumptions based on age, years of service on individual pay increases (see slide 31) and assumes a 3% aggregate growth of payroll above the individual increases. The impact figures in slide 32 are for the whole group respectively. MISCELLANEOUS AND SAFETY PLANS CalPERS Actuarial Issues – 6/30/14 Valuation Preliminary Results Presented by John Bartel, President Prepared by Bianca Lin, Assistant Vice President Matthew Childs, Actuarial Analyst Bartel Associates, LLC April 5, 2016 ATTACHMENT A A - 1 April 5, 2016 31 ADDITIONAL 1% PAY INCREASE  CalPERS Pay Related Assumptions  Aggregate Payroll Growth  Inflation 2.75%  Increase Above Inflation 0.25%  Total 3.00%  Individual Pay Increases  Inflation, Step Rate, Merit, Promotion, Longevity, etc.  Varies based on hire age & Agency service  For example, hired at age 30: Service Miscellaneous Safety 0 11.6% 14.7% 5 6.0% 5.8% 25 3.6% 4.3%  Earlier hire ages have higher anticipated pay increases and later hire ages have lower anticipated pay increases ATTACHMENT A A - 2 April 5, 2016 32 ADDITIONAL 1% PAY INCREASE  Impact of 1% Pay Increase above CalPERS assumption: Actuarial Liability Increase Contribution Rate Increase  Miscellaneous ≈$2,388,000 ≈0.3%  Safety ≈ $847,000 ≈0.3%  Based on a 20 year amortization without ramp up/down. ATTACHMENT A A - 3 ELECTRIC FUND TBD ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2017 CAPITAL BUDGET Facility Relocation for Caltrain Modernization Project Facility Relocation for Caltrain Modernization Project Description 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 Pow- ers Board (Caltrain) to convert their diesel powered commuter trains to electric power. Justification The Caltrain Modernization Program consists of converting Caltrain from a diesel-hauled to Electric Multiple Unit trains. The installation of the Overhead Catenary System above the rails to power the trains will cause conflicts with the Cityís overhead electric and communication lines, as well as those owned by others, e.g. AT&T, Comcast, which cross the railroad tracks. Caltrain is looking to have the overhead lines relocated/removed by August 2018 for an anticipated project completion in 2020. In order to meet Caltrainís timeline, Utilities must obtain funding and start the design process in FY 2017. If lines are placed underground, Utilities will look for opportuni- ties to share the costs with AT&T and Comcast as part of the joint construction agreement between the three entities for installation of underground facilities. Supplemental Information Though Electric power for the trains will be provide by PG&E from outside of Palo Altoís city limits, the timely relocation/removal of overhead electric lines will facilitate the conversion of the commuter train system from diesel fuel to electricity, reducing greenhouse gas emissions, noise, and pollution in Palo Alto. Caltrain is receiving funding for the project from several differ- ent sources. If Caltrain does not obtain full funding to complete the project, construction fund- Fund: Electric Fund - Operating Category: Undergrounding Projects Project Location: Various locations along railroad Managing Department: Utilities Initial Project Start: Fall 2017 Initial Project Completion: Winter 2018 Revised Project Start: Revised Project Completion: Project Number: EL-17007 ATTACHMENT B B - 1 ELECTRIC FUND ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2017 CAPITAL BUDGET TBD ing approved by Council for the relocation of facilities will be returned to reserves. Revenue projections are based on shared installation underground facilities with AT&T and Comcast. Expenditure Schedule Project Phase Prior Years FY 2016 Budget FY2016 Est.FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year CIP Total Beyond 5 Year CIP Total 0 0 0 150,000 2,550,000 0 0 0 2,700,000 0 2,700,000 Total 0 0 0 150,000 2,550,000 0 0 0 2,700,000 0 2,700,000 Relationship to Comprehensive Plan Primary Connection Element: Natural Environment Section: Energy Goal: N-9 Potential Board/Commission Review: Utilities Advisory Commission ATTACHMENT B B - 2 CAPITAL IMPROVEMENT FUND 178 CAPITAL IMPROVEMENT FUND • CITY OF PALO ALTO FISCAL YEAR 2017 CAPITAL BUDGET Art In Public Spaces Art In Public Spaces Description 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. Justification This project places art in public buildings, plazas, gateways, parks and other sites frequented by residents and visitors alike. It is expected that public art will enhance community pride and own- ership in the City of Palo Alto. Public Art preserves the long-term viability of the built environ- ment and helps set a standard for aesthetic variety and creativity in the community. Supplemental Information The Art in City Capital Improvement Projects ordinance states that the City will budget one per- cent of its CIP budget for public art, with certain exceptions. A base level of funding in the amount of $50,000 is included each year. Significant Changes Prior to Fiscal Year 2015, the one percent for public art was included in the budget for each applicable project. Beginning in Fiscal Year 2015, this funding is accounted for within this proj- ect. This change provides a clearer picture of how much funding is available for public art, allows for the pooling of funds for more impactful projects, and ensures that the funds are pre- served for public art. Fund: Capital Improvement Fund Category: Parks and Open Space Project Location: Various Managing Department: Community Services IBRC Reference: Keep-up Initial Project Start: Recurring Initial Project Completion: Recurring Project Number: AC-86017 Brilliance, by Joe O'Connell and Blessing Hancock ATTACHMENT C C - 1 CAPITAL IMPROVEMENT FUND CAPITAL IMPROVEMENT FUND • CITY OF PALO ALTO FISCAL YEAR 2017 CAPITAL BUDGET 179 Operating Impact Annual funding in the amount of $30,000 for public art maintenance is allocated to the Com- munity Services Department in the General Fund. This level of funding may be reviewed in light of increased funding for public art resulting from the public art ordinance, and adjustments to the maintenance allocation may be brought forward for City Council consideration in future years, if appropriate. Funding Sources Schedule Funding Source Prior Years FY 2016 Budget FY2016 Est.FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year CIP Total Beyond 5 Year CIP Total Capital Improvement Fund N/A 367,994 186,800 423,513 212,270 880,700 240,012 125,958 1,882,454 0 N/A Total N/A 367,994 186,800 423,513 212,270 880,700 240,012 1,882,454 0 N/A Expenditure Schedule Project Phase Prior Years FY 2016 Budget FY2016 Est.FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year CIP Total Beyond 5 Year CIP Total Construction N/A 359,716 186,800 0 N/A Other N/A 8,278 0 0 0 0 0 0 0 0 N/A Total N/A 367,994 186,800 0 N/A Relationship to Comprehensive Plan Primary Connection Element: Land Use and Community Design Section: Public Ways Goal: L-9 Policy: L-72 Potential Board/Commission Review: Architectural Review Board Parks and Recreation Commission Environmental Impact Analysis: This project is expected to have a possible exemption from CEQA under Section 15301. 125,958 423,513 423,513 212,270 212,270 880,700 880,700 240,012 125,958 1,882,454 240,012 1,882,454125,958 ATTACHMENT C C - 2 ATTACHMENT D D - 1 1 5/23/2016 City of Palo Alto M E M O R A N D U M TO: Finance Committee DATE: May 23, 2016 SUBJECT: Additional Information Pertaining to the FY 2017 Proposed Budget This memorandum transmits additional information requested by the Finance Committee and/or provided at staff’s behest in regards to the Fiscal Year 2017 Proposed Budget. Planning Transportation Commission Findings On Tuesday, May 17th, the Planning and Transportation Commission (PTC) reviewed the 2017-2021 Capital Improvement Program for compliance with the Comprehensive Plan, per Municipal Code requirements. The PTC approved a motion finding the plan to be in compliance with the Comprehensive Plan. Attached to the May 17th memorandum distributed at places is a letter from the Chair of the Planning and Transportation Commission (PTC) summarizing the Commissions review of the Fiscal Year 2017-2021 Proposed Capital Improvement Plan (attached again as Attachment A for convenience). Due to the timing of the PTC meeting schedule and the Finance Committee Budget Hearing schedule, full minutes from this meeting were not transmitted to the Committee on the 17th of May and are therefore attached to this memorandum (Attachment – B). The 1998-2010 Comprehensive Plan is in the process of being updated. As the Comprehensive Plan is reviewed by staff, the public, the PTC, the City Council, and others, the PTC’s suggestion regarding the Governance Element about including policies or programs relating to prioritization of capital projects can be considered. Staff currently aligns each capital project to the Comprehensive Plan, notating the specific alignment for each capital project within the budget document. Upon adoption of the updated Comprehensive Plan, staff will consider the PTC’s recommendation to measure capital projects against Comprehensive Plan policies and determine whether policies have a target embedded for which a meaningful, sustainable, and usable measure can be developed for particular CIP projects. ATTACHMENT A A - 1 City of Palo Alto May 17, 2016 Page 1 1 ===============MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 26================= This agenda is posted in accordance with Government Code Section 54954.2(a) or section 54956. 2 3 Wednesday, May 17, 2016 Special Meeting 4 12:00 PM, Council Chambers 5 6 7 Call to Order / Roll Call: 12:03 P.M. 8 Commissioners Alcheck, Downing and Tanaka absent 9 10 Chair Fine: Thank everyone for showing up and sorry for the delay in doing this meeting. Today 11 I would like to open the Planning and Transportation Commission (PTC) meeting, May 17, 2016 12 and we have only one item today. But first let’s open it up to oral communications are there any 13 speaker cards? Sorry, Robin, will you take the roll please? 14 15 Robin Ellner, Administrative Associate: Commissioner Alcheck, Commissioner Downing, Chair 16 Fine, Vice-chair Gardias, Commissioner Rosenblum, Commissioner Tanaka, Commissioner 17 Waldfogel. Four present. 18 19 Chair Fine: Thank you very much. Do we have any speaker cards on non-agenda items. 20 21 Ms. Ellner: No. 22 23 Chair Fine: Ok. Any agenda changes? I don’t think so. Let’s move to the Assistant Director’s 24 report please. 25 26 Jonathan Lait, Assistant Director: No report. 27 28 Chair Fine: Ok, let’s move on to the action item, just one today. Review and recommendation to 29 the City Council on the proposed 2017 – 2021 Capital Improvement Plan (CIP) and Compliance 30 of the Comprehensive Plan. I believe there is a short report. 31 32 Mr. Lait: Chitra will give you a brief presentation and I believe everybody in this Chamber is 33 here to answer any questions you may have. 34 35 Chitra Moitra, Planner: Good afternoon Commissioners, I am Chitra Moitra, planner, Long 36 Range Planning. Today, staff requests the PTC review the 2017 – 2021 CIP Programs to be 37 consistent with the Comprehensive Plan and forward the findings to the Finance Committee and 38 City Council. The section 19.04.040 of the Palo Alto Municipal Code (PAMC) describes PTC’s 39 role in the reviewal process, which really includes review of the CIP in the Comp Plan for 40 consistency, for commenting on individual projects and suggesting improvements that can 41 increase the efficiency of the process and identify any CIP’s which the Commission deems to be 42 missing from the list. This year we have in the Capital budget, 211 CIP projects of which 29 are 43 PLANNING & TRANSPORTATION COMMISSION MINUTES ATTACHMENT B B - 1 City of Palo Alto May 17, 2016 Page 2 new. Like last year we are focusing only on reviewing the new projects, so the rest of the other 1 projects included in the Capital Budget book has already been reviewed by the PTC. Staff has 2 used the same matrix as last year, which is aligning each CIP with the Comprehensive Plan 3 Element, a goal, a program and a policy. The staff has also added information on the types of 4 boards and commissions reviews required and the type of environmental review required. This 5 slide up here shows the number of CIP’s which have been aligned, so over 80 percent of the new 6 CIP’s have been aligned with the Natural Environment Element and the Community Services 7 Element. Staff has also linked each of these CIP’s with the 2016 City Council priorities and has 8 found that more than 83 percent of all the infrastructure improvements amounting to about $13 9 million dollars for the year 2017 is being allotted for all sorts of infrastructure improvements. 10 Staff has also done a summary of the Capital Budget, the 2017 Capital Budget invested by 11 elements and has found that about 50 percent of them are invested for improvements and are 12 linked with the Natural Environment Element while 39 percent is for the Community Services 13 Element. So all of these above analysis proves that the 29 of the new CIP’s are in compliance 14 with the Comprehensive Plan and staff requests PTC to forward the findings to Finance 15 Committee and City Council. 16 Thank you, this concludes my presentation. 17 18 Chair Fine: Thank you very much, do we have any speaker cards? 19 20 Ms. Ellner: No. 21 22 Chair Fine: None? Ok, let’s open it up, I think we can mix comments and questions if that’s 23 alright with everybody. Let’s just start with five minutes each. Vice-chair. 24 25 Vice-chair Gardias: Thank you Mr. Chairman, welcome back. I have a question to, actually Josh 26 about transportation item, if we can start with them. A couple of comments, there were a couple 27 of recent projects that came to us and the biking routes that we reviewed and as you remember, 28 we didn’t review Bryant Street because of procedural constraints, I know that it went to the 29 Council. Is Bryant Street included in this budget for downtown mobility and safety 30 improvements? 31 32 Josh Mello, Chief Transportation Official: Josh Mello, Chief Transportation Official. Thank you 33 for the question, the downtown mobility and safety strategies project is envisioned as kind of a 34 on-going trial and pilot process where we look at different bike-ways along Bryant Street, 35 University, Alma Street. We are also going to look at whether it makes sense to convert High 36 Street and Homer and Channing to two-way operation. We hope to test out different pedestrian 37 and bicycle accommodations, we’re also looking at improving the signal timing downtown for 38 both transit, motorists, pedestrians and cyclists. There is a segment of Bryant Street that passes 39 through the study area for this particular project. The Bryant Street bike upgrade project was not 40 very visionary when it came to Downtown. We’ve heard a lot of concerns about folks using the 41 bike boulevard through Downtown and wanting to see better accommodations, so this project 42 will look a little more in depth at what those may be. 43 44 Vice-chair Gardias: Ok, so it’s going to take a look from the concept perspective but it will not 45 include investment in Bryant Street portion. 46 47 ATTACHMENT B B - 2 City of Palo Alto May 17, 2016 Page 3 Mr. Mello: The Downtown mobility and safety strategies is both a planning and implementation 1 project, wo we want to use tact to go Urbanism, pop up street type thing. So we want to test out 2 different configurations in practice, see how they work and make adjustments. 3 4 Vice-chair Gardias: Ok, so the part of Bryant that will be considered under this investment would 5 be including implementation of the solutions, right? 6 7 Mr. Mello: Yes, the bike boulevard, I don’t feel we had enough direct outreach to business 8 owners along Bryant, so the Downtown mobility and safety strategy will include a significant 9 amount of outreach to the business community and patrons as well to determine if there is a 10 better treatment for Bryant Street. 11 Vice-chair Gardias: Ok, so is there a chance that it will come back to our Commission after the 12 study is concluded or it will go directly into the investment phase. 13 14 Mr. Mello: We can bring back some concepts to the Planning and Transportation Commission if 15 you wish. 16 17 Vice-chair Gardias: It will be interesting to see what are some outcomes of the pop-outs and 18 some other studies that you are going to conduct, some investment. So thank you. 19 So the second question I have about the Railroad grade separation, as you may know, there was a 20 town meeting yesterday in Burlingame and they were just discussing the grade separation along 21 their tracks in Burlingame and I think the concept they had was just a partially elevate the tracks 22 and the press crossing roads and because the grade separation it just seems to me that it just 23 keeps increasing in the volume and the discussions may be not as intense yet, but, it may get 24 there in the next year or two. I was wondering if there was any discussions that you may be 25 aware of between the municipalities about solution or potential solution that would address grade 26 separation, Caltrain grade separation from San Francisco to San Jose. 27 28 Mr. Mello: San Mateo County already has a grade separation program through its sales tax 29 measure and they actually dedicate funding annually to different grade separations, I believe 30 Burlingame was able to secure some of that funding. In the discussions we were having 31 surrounding the different sales tax measure for Santa Clara County in November the preliminary 32 list of funding allocations includes $700 million dollars for grade separation within Palo Alto, 33 Mountain View and Sunnyvale. That’s still preliminary the VTA board hasn’t included, hasn’t 34 approved that officially yet. However, it’s looking like it’s going to make the final list, so that 35 would open up a pretty significant pot of funding for us to advance our grade separations. We do 36 talk with Menlo Park’s working on Ravenswood, Mountain View is doing a study on Castro 37 Street. We do talk to our counterparts, we have an RFP out on the street right now for services 38 related to this Capital Improvement Project, and we used a lot of materials from other 39 communities that already moved farther along than we are on grade separations. I don’t think 40 there is currently an opportunity for some kind of peninsula wide mega project that would fix all 41 of the grade crossings, but I think we are getting to a point where there is going to be better 42 coordination within Santa Clara County around prioritization of the different grade crossings. 43 44 Vice-chair Gardias: Ok, it looks like a good start. My concern was pretty much coming from 45 that grade separation in our minds, it just goes, it relates to the depressing, the tracks and then up 46 North, in San Mateo County, they pretty much talk about elevating the tracks. So pretty much 47 they think about different approach, it would be nice if somebody was thinking about putting the 48 ATTACHMENT B B - 3 City of Palo Alto May 17, 2016 Page 4 common denominator among all of this different efforts. I think for now those are the questions I 1 had for you. Thank you for the answers. 2 3 Chair Fine: Commissioner Rosenblum. 4 5 Commissioner Rosenblum: Yes, thank you. A few questions, I just circled the big ticket items, so 6 mostly I am going to go just one by one, mostly items over $1 million dollars, but there’s just a 7 couple I am curious about that are below that threshold. The Cubberley amenities improvement, 8 there’s a number of things around Cubberley and the description it notes, I’m concentrating on 9 CB17000, but there are a number of items that are all stacked around Cubberley. It notes that it is 10 allocated pending the result of the Cubberley Master Plan, when is the Master Plan expected to 11 be done and how is this figure arrived at, is it the Master Plan is already proposed and the figures 12 here is about $1.5 million dollars are expected to be the result of that plan or are there a number 13 of scenarios expected to be developed? 14 15 Rob DeGeus, Director Community Services: Good afternoon Commissioners, Rob DeGeus, 16 Director of Community Services and this is Brad Eggleston, Assistant Director of Public Works. 17 So we are working on a Master Plan with Palo Alto Unified School District (PAUSD), we have 18 five years of the lease agreement to be able to work on that plan. We haven’t really gotten started 19 on it yet, this year will be the first year we really get down and work on the process of the Master 20 Plan, I think our approach with the capital work at Cubberley is to do what’s absolutely 21 necessary, roofing, those types of things and wait to see what the Master Plan will define as a 22 future of Cubberley before spending too much money, that we then have to rebuild. Brad do you 23 want to add? 24 25 Brad Eggleston, Assistant Director Public Works: Brad Eggleston, all that I would add is that if 26 you’re specifically asking about the CB17000 project, Cubberley amenities improvement, that 27 it’s discussing being placed in a reserve, that definitely there is no cost estimating for any future 28 projects that went into that, that was just kind of a round figure to place in a project and have 29 available for future uses. 30 Commissioner Rosenblum: Is there an estimate for the Master Plan process is supposed to be 31 decided upon, so this is just allocating money for reserve in the event the Master Plan is 32 approved to begin this work. Is that right? 33 34 Mr. DeGeus: That’s correct, the Master Plan will take two to three years to complete. 35 36 Commissioner Rosenblum: So then why would this money be allocated for the 2017 budget? 37 38 Mr. Eggleston: My understanding is that the first thought was to place the money for more 39 specific projects and then as we have some discussions about that, we decided to keep it in 40 reserve until decisions have been made. 41 42 Commissioner Rosenblum: Ok, thanks for the understanding. Me second question, are, they are 43 similar but they are two different projects. Probably not for you guys, EL17003, which is 44 probably the VA Hospital customer load requirements, $3 million dollars, and the question is, I 45 understand this is about upgrading the electrical capacity given the increased needs of the VA 46 Hospital. I am wondering , what is the VA Hospital’s responsibility in this, is this something that 47 the City has to bear the cost in conjunction with the Veterans Administration or if this is 48 ATTACHMENT B B - 4 City of Palo Alto May 17, 2016 Page 5 something that, actually I just don’t know how the budgeting is apportioned when there’s a 1 Federal agency that is upgrading and therefore needs us to accommodate. 2 3 Dean Batchelor, Assistant Director Utilities: Dean Batchelor, Assistant Director Utilities. So the 4 way that that works is we have to extend some of our own infrastructure portions of it to, where 5 this new substation that they want to build on their premise so anything that’s built on the 6 substation costs is going to be relied on from the VA standpoint but we need to actually increase 7 our capacity from our other substations our internal substations so there’s going to be two 8 substations that we have to upgrade and then we have to trench and do some overhead 9 infrastructure improvements of about two and a half miles to get to where this new substation is 10 going to be. The City is obligated to fix those pieces so that we can serve that one substation of 11 theirs but the cost of the substation on their property and the building of their substation will 12 actually be on the VA. That’s how we budgeted, we looked at what our cost would be for 13 increasing our capacity as well as what it takes to do all the infrastructure improvements. 14 15 Commissioner Rosenblum: And a quick question for staff. Jonathan is this something where our 16 purview is to try to figure out if this is in accordance with our Comp Plan is not really around, 17 does the VA, who is responsible for what, but we’re just looking is this in accordance with the 18 Comp Plan. Is that right? 19 20 Mr. Lait: That’s correct, the former. 21 22 Commissioner Rosenblum: Ok, second just a clarifying question then. EL17006, which is 23 electrical pole replacements for fiber and the description is this would be a Google project and 24 this would be our estimate for what the City would have to do in replacements for 25 accommodating but that final costs are not yet there? I would just like to understand, this is the 26 biggest single item on the ledger, I think at $5 million dollars. So, I would like to understand this 27 one a bit better. 28 29 Mr. Batchelor: I think the thing is what we have to do Commissioner it still hasn’t been 30 determined yet if we are going to get into this co-build with Google at this period of time, if we 31 do then we’ve estimated out that about 600 poles, about 10 percent of our poles need to be 32 replaced because of the height limit or that the pole just needs to be replaced because the loading 33 of the calculations of the pole are not going to be able to withstand the extra cables on that pole 34 so we will have to redo those poles. Now if the City decides that we’re not going to go joint 35 venture with them, then at that point Google would be on the hook for that cost of what those 36 pole replacements would look like. But we needed to put it in the budget because we don’t know 37 where we are going to go at this period of time. 38 39 Commissioner Rosenblum: Ok. And then finally at least from my perspective, things understand 40 around the downtown mobility, I think this might be someone different which is the downtown 41 parking, downtown mobility and safety improvements PL16001. So, this estimate is highly 42 specific $563,143 and it’s for planning design and construction of multi-modal safety 43 improvements in downtown Palo Alto, so does that mean this already, we’ve had engineering 44 estimates that this dollar figure feels like it’s down to the construction cost. Have we already 45 designed this? 46 47 Mr. Mello: The number is not a round number because it includes staff time allocated to the 48 project as well which gets us to the kind of wonky numbers that we see in here. The estimate is 49 ATTACHMENT B B - 5 City of Palo Alto May 17, 2016 Page 6 based on our best guess planning level cost estimate that’s for the type of improvements that we 1 would like to do downtown which includes signalization, and signing and striping and some 2 other potential changes. 3 4 Commissioner Rosenblum: Thanks. That’s my final question, that’s it for me. 5 6 Chair Fine: Commissioner Waldfogel. 7 8 Commissioner Waldfogel: Thank you. Josh, since you’re here right now, I will just ask you one 9 very tactical question, which is whether the Embarcadero Signals are budgeted in this cycle or, 10 there seems to be some concern about whether those have been addressed yet. The ones at Town 11 and Country. 12 13 Mr. Mello: The signal at the Town and Country driveway and the adjacent signal at the 14 pedestrian crossing were updated last year, they are not yet linked to our central traffic control 15 system, we are working on that right now. We have to do a wireless connection because we can’t 16 get through across the Caltrain Corridor with fiber, the rest of our signals are linked by fiber so 17 that one is in process, we are going to link that one by mobile, probably a mobile cellular 18 technology. And at that point we are going to coordinate all the signals along Embarcadero Road 19 all the way from 101 to the Town and Country driveway, we are also going to secure the timing 20 plan from Caltrans for the Embarcadero at El Camino signal and we are going to integrate our 21 signal timing with Caltrans as best as we can. That’s going to be done with internal resources this 22 year. 23 24 Commissioner Waldfogel: Ok, so it’s all built in. 25 26 Mr. Mello: Yes. 27 28 Commissioner Waldfogel: Great, that’s fantastic. I think a lot of people will be thrilled with that. 29 The other one, I’m not sure if there is a specific line item for this, but, is there any category I 30 should be looking at for Smart City investments or data collection infrastructure? I mean is that a 31 traffic issue or sort of, whose area would that be in? No one wants to touch that one. 32 33 Lalo Perez, Chief Financial Officer: Lalo Perez, Chief Financial Officer. We have some ad hoc 34 projects but not a central project. That’s why we were looking at each other, saying what do we 35 have? Jonathan Reichenthal has started an internal group of staff members to try to get this 36 coordinated and have some visibility to it as well. We would have to dig through and figure out 37 which ones fall into that category and submit them to you. We probably wouldn’t be able to do it 38 right off the bat. 39 40 Commissioner Waldfogel: That’s great. I think it’s something that probably ought to be visible in 41 some fashion. Although I don’t know a hundred percent if it’s a capital project or how much of 42 that would be an innovation fund or where that would fit. 43 44 Mr. Perez: It probably mostly operating but I could see some of it falling in capital and would 45 probably land more on the IT fund if anything. 46 47 Commissioner Waldfogel: Although some of the sensors might fall onto transportation or other 48 categories. I don’t think anybody else wants to weigh in on that one before I go on to. Then the 49 ATTACHMENT B B - 6 City of Palo Alto May 17, 2016 Page 7 other one I wanted to raise is the Bayland Flood Protection Levee Improvement, which I guess is 1 an RND, it’s a planning exercise this year. I’m just curious, is there a Baylands Master Plan 2 coordination that’s going on, I mean in conjunction with that project or what’s the status of that 3 project? 4 5 Mr. Eggleston: Brad Eggleston, Assistant Director Public Works. We are coordinating that with 6 the San Francisquito Creek Joint Powers Authority (JPA), so what’s currently going on is the 7 feasibility study phase of the project and then the CIP project you’re looking at is to add funding 8 to that for an actual design. Yes, during the feasibility study phase, there is coordination with 9 City staff, between the JPA and their consultant, City staff from various departments including 10 the Planning department and consideration of the Baylands Master Plan. 11 Commissioner Waldfogel: But it’s also looking at things like coordination with the Golf Course 12 Plan and I mean whether the levee protects Golf Course or doesn’t protect it or airport or other 13 facilities. 14 15 Mr. Eggleston: The Water Quality Control Plant. 16 17 Commissioner Waldfogel: Water Quality Control Plant. 18 Mr. Eggleston: The landfill. 19 20 Commissioner Waldfogel: That’s a small detail, so it’s all coordinated around those activities? 21 22 Mr. Eggleston: Yes it is. 23 24 Commissioner Waldfogel: Great, thank you. 25 26 Chair Fine: Thank you, I just have a couple comments and a few questions. One, I really 27 appreciate this chart that staff put together. It’s really nice, the only comment is, it would be 28 helpful on this green chart is to have where the funding source is so you don’t have to go digging 29 for that, but otherwise I found it really helpful and easy to understand. My only question 30 actually, and I just wanted to get some clarity here. On EL17004, Stanford customer load 31 requirements, it’s a half a million bucks for the medical facility and Stanford Shopping Center. I 32 was talking to Commissioner Waldfogel before, I was hoping somebody could explain what is 33 the status of utilities on Stanford? Do we pay for it? Does Stanford pay the City back for it? How 34 does that work? 35 36 Dave Yuan: Dave Yuan, Utilities Administration. For that project, I think we are estimating 37 about 80 percent reimbursement by Stanford and the rest, the City would probably fund. 38 39 Chair Fine: Great, thank you very much. So just the last comment there, it would be helpful if 40 some of these projects if we could see where the City’s being reimbursed. I saw there is another 41 one by the, I think the Air Quality Management District for the, I think the EV chargers. That’s 42 stuff the City should be promoting and saying we’re getting our money back from another 43 source. Otherwise, I don’t have any other questions, but I will open it up to anybody else. Vice-44 chair? 45 46 Vice-chair Gardias: Thank you, Mr. Chairman. A couple of supplemental questions about the 47 chargers for the City, I think those chargers would be in the City Hall garage. This is right? 48 49 ATTACHMENT B B - 7 City of Palo Alto May 17, 2016 Page 8 Mr. Eggleston: I’m sorry, can you repeat the question? 1 2 Vice-chair Gardias: The electrical chargers would be installed in this garage right? 3 Mr. Eggleston: Actually the grants that the City has received and has indication that we expect to 4 receive have them installed in several different garages downtown and I believe also in the 5 California Avenue district. Really this project where you see the Civic Center electrical upgrade 6 this had previously been scheduled I believe in fiscal year 18 or 19 and what we’ve done now is 7 created a new project where we combined the electrical upgrade with Civic Center along with 8 the fronting of the money needed for the grant for the EV chargers in the hope that we will be 9 able to add some capacity here and shift some of those chargers to the Civic Center garage. 10 11 Vice-chair Gardias: I see, thank you for clarification. What I was getting to was pretty much, I 12 live by Rinconada library, prior, it was Main library. There are four charging stations over there, 13 and those are always taken or most of the time taken. It seems to me that pretty much and it may 14 be because some private vehicle owners, they just use charging stations in lieu of their home 15 charging because they have no ability probably to charge it at home. But regardless, it seems to 16 me that the capacity of those stations was not properly estimated because there should be at least 17 maybe six or eight of them to make sure there are empty stalls for some additional cars that 18 would like to just power their batteries. I’m just making this comment, just please take a look at 19 the estimate because it seems to me that demand may be greater than it was assumed at the 20 library and it may be the same reason, may be the same case at other City garages that pretty 21 much the public may not have the capabilities at their homes or residences so they pretty much 22 come to the public spaces. 23 24 Mr. Eggleston: Thank you, that’s very helpful. It’s something I think is a future step to develop a 25 kind of Master Plan for where throughout the City the demand is and how many chargers should 26 be added. 27 28 Vice-chair Gardias: And the next question is because, as you may know, there is a discussion 29 about those charging stations that I think, they are not, they are specifically regulated this way 30 that the public utilities like Con Edison or Pacific Gas & Electric, they don’t have ability to, they 31 don’t have legal power to invest in those charging stations. I believe that is the current legal 32 landscape, so for this reason small operators invest in those charging stations and they develop 33 the network. I think that’s currently the landscaping in the State of California. I think this was 34 changing or maybe it just changed recently because the capacity was under-capacitated and there 35 was not enough of those charging stations giving the demand. So, my question to you is because 36 it seems to me that we rely on the grants, what is the chance are supposing to using the public 37 money that there could be a private capital investing in those in Palo Alto? 38 39 Mr. Eggleston: I have to say, it’s not something I have specifically worked on. I know there is a 40 policy discussion that’s scheduled or going to be scheduled soon that’s going to occur with the 41 Council Policy and Services Committee that’s going to consider the City’s current policy that 42 charging is free and essentially provided by the City, so that may as well be part of that same 43 discussion. 44 Vice-chair Gardias: Thank you. And then just to, hold on one second. Different question from a 45 different perspective if you don’t mind. Going back to a discussion you had with a colleague of 46 mine, Asher Waldfogel, about the levee’s. When I was reading this funding for the San 47 Francisquito Creek Levee Improvement, it stroke me it is specifically designated for the levee 48 ATTACHMENT B B - 8 City of Palo Alto May 17, 2016 Page 9 protections as opposed to complex study of flood protection. Do we already know that resolution 1 of that area would be to strengthen levees of San Francisquito or that still open? 2 3 Mr. Eggleston: are you referring to fluvial flooding, from stream flooding? What this study is 4 intending to do is to look at the issue of tidal flooding as it relates to sea level rise and for San 5 Francisquito Creek, there’s a separate effort, a planning effort underway with the San 6 Francisquito Creek Joint Powers Authority and in fact, that’s been a long standing effort and the 7 first phase of that overall project which is the Highway 101 to the Bay project which is going to 8 rebuild the levees in that area and provide flood walls is actually to begin construction this 9 summer. 10 11 Vice-chair Gardias: That’s right, I was thinking about that portion, 101 to the Bay because that’s 12 pretty much where the levees are, along San Francisquito Creek. I was wondering if that is 13 already given because there is still some marshes on the other side, on the western side of the 14 San Francisquito Creek adjacent to 101. I was wondering if there was an option to utilize those 15 marshes as eventual overflow when the flood level would be rising as opposed to just creating 16 the wall along the creek. 17 18 Mr. Eggleston: Actually, I believe that is a feature that has been built into the JPA’s design for 19 that particular levee. If you’re thinking of the tract of salt marsh that’s kind of to the northwest of 20 the levee, I believe they’ve built in, what they are calling a degrade of the levee in that area so 21 that flows over a certain capacity flows over the levee into the wetland. 22 23 Vice-chair Gardias: Very good, thank you very much for the clarification. Thank you. 24 25 Chair Fine: Just one other comment and I want to hand it back to everyone else as well. On page 26 3 of the table, there is a number of projects around the City Hall, the Civic Center, electrical 27 upgrades, Foothills which are referencing C4 as their primary Comprehensive Plan goal. C4 is 28 more about collaborative relationship with the school district and maximize use of school 29 facilities, is that purposeful? I was just wondering, I just didn’t see that complete connection 30 there. So, there’s just a whole row of them on pages 3 and 4 of the table from 17008 to 21001. I 31 think the reason I’m asking is the secondary goal that is cited here C24, reinvesting aging 32 facilities to improve their usefulness and appearance seems like that might be the primary. 33 34 Mr. Lait: Yes, we can certainly take a look at that and make that adjustment. 35 36 Chair Fine: It just seemed like C4 is being used in places it might not apply. Any other questions, 37 comments? Commissioner Rosenblum? 38 Commissioner Rosenblum: Just as a comment, I personally as with all of these infrastructure 39 reviews, they always fit our Comp Plan to a certain extent. I mean it’s very hard not to fit our 40 Comp Plan which emphasizes having top of the line infrastructure. It’s very difficult, one thing I 41 have asked for in the past and I’ll ask for again, it’s difficult to really understand how well this 42 fits our Comp Plan without having in the context of other potential plans. So, when you put this 43 together, there were choices made, there’s probably a long list of things that everyone in the City 44 wants, then you made some tradeoffs and decided this is what we are going to go for within a 45 budget constraint and so one thing that would be helpful to the Commission would be to 46 understand different packages and to say, ok, here’s a choice that probably with a higher budget, 47 here’s a choice with a lower budget, we pick this and here’s why and I think it would be helpful 48 for us help give better input. The way we currently try to evaluate whether or not this is 49 ATTACHMENT B B - 9 City of Palo Alto May 17, 2016 Page 10 alignment with the Comp Plan is exactly what you do, which is you take each line item and you 1 find the relevant line in the Comp Plan that refers to something like that item and going back and 2 making sure that that’s a one-to-one connection. I think that all of us trusts that you’re mapping 3 was done properly. Given what this is, I find it difficult to say this is not in align with the Comp 4 Plan, everything here seems quite logical, there’s some items that for a matter of clarity as Chair 5 Fine referred to, I would recommend adding so for example, what things are being reimbursed 6 for, what things are merely being budgeted for but not intended to be spent that year and that 7 includes some fairly large ticket items so that would change the idea of what you are actually 8 spending and what portion of it would be either back to you or would not actually go out the 9 door. So from a legibility standpoint I think that would be useful for Council if this goes further 10 and for anyone who is trying to review this budget, but from my standpoint if there are no other 11 questions I am happy to propose a Motion. 12 13 Chair Fine: I generally agree with Commissioner Rosenblum on that and one other way to think 14 of it, especially now if we’re going through the Comp Plan is, this may be a little unorthodox, 15 but if the City were to essentially given a hundred bucks, where would you put those dollars on 16 each Comp Plan goal and that would kind of give us a way to add up, you know, we should 17 really be focusing on C24 because there’s fifteen dollars there and fifteen dollars being spent 18 towards that, so it’s an issue of prioritization. With that, I am also open for any Motions. I think 19 Commissioner Rosenblum was going to. 20 21 Commissioner Rosenblum: Sure, I will make a Motion that we find the 2017-2021 Capital 22 Improvement Plan consistent with the Comprehensive Plan and forward it to the Finance 23 Committee and City Council. 24 25 Chair Fine: There’s a Motion on the floor for us to recommend approval of this and forward it on 26 to the Finance Committee. Do we have a second? 27 28 Commissioner Waldfogel: I second. 29 30 Chair Fine: Commissioner Waldfogel seconds, would you like to speak to your Motion? Would 31 you like to speak to your second? All in favor? And the Motion passes unanimously. Excellent. 32 Thank you all so much for that item, thank you everyone who showed up and for the 33 information, you helped us, you provided to us. There’s no approval of Minutes, no Study 34 Sessions. Any Committee Reports? Any questions? Alright, we are adjourned at 12:44 and thank 35 you all so much for the lunchtime meeting. Thanks to staff to for organizing it. 36 37 Adjournment 12:44 38 ATTACHMENT B B - 10 Fiscal Year  2017 Proposed Budget Finance Committee May 3, 2016 2 Overview •Citywide Funds •Internal Services Funds •General Fund •Enterprise Funds •Capital Improvement Program •Summary 3 Citywide Funds FY 2017 Citywide Revenues $544.4 Million 4 FY 2017 Citywide Expenditures $626.1 Million 5 6 GF ENT Other* Total FY 2016 Adopted Budget     599.31    351.09       89.70  1,040.10    FY 2016 Approved Adjustments         1.40              ‐            0.60         2.00  FY 2016 Modified Budget     600.71    351.09       90.30  1,042.10  FY 2017 Reallocations         0.38        (1.48)        1.10              ‐    FY 2017 Net Additions         2.85         4.00         3.15       10.00  Subtotal of 2017 Changes         3.23         2.52         4.25       10.00     FY 2017 Proposed Budget     603.94    353.61       94.55  1,052.10  Citywide Position Changes *Other Funds are Internal Service Funds, Special Revenue Funds, and the Capital Fund CMR #6932: ATTACHMENT R 7 FY 2017  Proposed $  Change %  Change  FY 2017  Proposed  $  Change %  Change  Salary            70,972       3,704 5.5%        101,410        5,289 5.5% Pension            21,164       1,920 10.0%           28,835        2,553 9.7% Healthcare            13,336           844 6.8%           19,163        1,009 5.6% Retiree Health              9,323         (342)‐3.5%           13,129           268 2.1% Other Benefits              2,053     (1,927)‐48.4%             2,717     (2,256)‐45.4% Total  $   116,848  $ 4,199 3.7% $   165,255  $ 6,863 4.3% Expenses  Category ALL FUNDSGENERAL FUND Average Salary & Benefit Changes (Compared to FY 2016 Adopted Budget) 8 Internal Service Funds 9 FY 2016  Adopted FY 2017  Proposed %  Change  FY 2016  Adopted FY 2017  Proposed %  Change  General Benefits  Fund              454                  ‐   ‐100.0%             768                  ‐   ‐100.0% General Liability  Fund          1,299                  ‐   ‐100.0%         2,369                  ‐   ‐100.0% Print & Mail Fund              939              842 ‐10.4%         1,553          1,297 ‐16.4% Retiree Healthcare  Fund          9,665          9,323 ‐3.5%       14,445        13,808 ‐4.4% Technology Fund          6,065          6,320 4.2%       13,253        13,788 4.0% Vehicle Fund          3,696          5,021 35.9%         6,637          8,885 33.9% Workers'  Compensation Fund          2,780          1,250 ‐55.0%         3,569          1,871 ‐47.6% Total  $  24,897  $  22,755 ‐8.6% $  42,593  $  39,650 ‐6.9% Fund ALL FUNDSGENERAL FUND Internal Service Fund Changes (Compared to FY 2016 Adopted Budget) 10 General Fund FY 2017 General Fund Revenues $193.1 Million (+$4.9 million BSR) 11 FY 2017 General Fund Expenditures $198.1 Million 12 13 Major Expense Changes From  Long Range Forecast Expense Category FY 2017  LRFF FY 2017  Proposed $ Change %  Change  Allocated Charges           18,028           16,752        (1,276)‐7.1% Contract Services           14,475           17,444          2,970 20.5% General Expenses           10,469           13,002          2,533 24.2% Operating Transfers‐Out              1,834              4,906          3,071 167.4% Salary & Benefits         119,521         116,848        (2,673)‐2.2% Transfer to Infrastructure           24,213           22,813        (1,400)‐5.8% 14 One‐Time Budget Balancing Use of Budget Stabilization Reserve: funding at 18% or $35.6 million ($4.9 million General Fund) –Goal will be to reset the BSR back to the 18.5% target level Reduce Charges for Internal Service Funds ($5.0 million all funds; $3.1 million General Fund) Budget “Uncertainty Reserve” ($2.0 million General Fund) 15 Enterprise Funds 16 Enterprise Funds  Revenues & Expenses $- $50 $100 $150 $200 Revenue Expense 17 FY 2017 Utility Rate Changes Utility Service Proposed  Rate Change Electric 11% Gas 8% Wastewater 9% Water Utility 6% Refuse 9% Storm Drain 3.2% Increase the average residential bill by about 8%, for a total increase of about $22.42 per month. 18 Capital Budget Overview 19 Capital  Improvement  Funds 48%  (101 Projects) Enterprise  Funds 44% (92 Projects) Internal Service  Funds 8%  (18 Projects) Fiscal Year 2017‐2021 Proposed  Projects by Fund Type  (211 Projects) 20 Buildings &  Facilities 45%  ($120.9 million) Parks & Open  Space 11%  ($30.7 million) Streets &  Sidewalks 16%  ($42.7 million) Traffic &  Transportation 23%  ($61.3 million) Unallocated  Salaries &  Benefits 5%  ($13.5 million) Fiscal Year 2017‐2021 Capital  Improvement Fund  ($269.2 million) 21 Buildings &  Facilities 42%  ($30.2 million) Parks & Open  Space 24%  ($17.5 million) Streets &  Sidewalks 15%  ($10.8 million) Traffic &  Transportation 17%  ($11.8 million) Unallocated  Salaries &  Benefits 2%  ($1.5 million) Fiscal Year  2017 Proposed Capital  Improvement Fund  ($71.9 million) 22 Public Safety Building ($57.0 million) Bicycle/Pedestrian Transportation Plan ($20.0 million) Replacement of Fire Stations 3 and 4 ($14.2 million) Downtown Parking Garage ($13.0 million) California Avenue Parking Garage ($9.6 million) Charleston/Arastradero Corridor ($7.5 million) Highway 101 Bicycle/Pedestrian Bridge ($4.7 million) Byxbee Park Completion ($2.8 million) Infrastructure Contingency Reserve ($30.0 million) Infrastructure Management Plan ($128.8 million, +$30 million reserve) 23 Summary 24 FY 17 Citywide Budget Proposals Project Safety Net: Track Watch & Collaborative ($1.0 million General Fund) City Streetlights and Traffic Signals Electricity Costs ($2.3 million General Fund) Citywide FY17 Capital Improvement Budget ($170.5 million, $639.5 million 5‐year plan) Capital Infrastructure Management Plan ($128.8 million) –($158.8 million with a plan to establish a $30 million reserve for anticipated cost increases) Salary & Benefit Increased costs ($6.9 million all funds) Budget Uncertainty Reserve ($2.0 million General Fund) 25 Costs/Revenues ‐Not Included Year 1 Transportation costs to mitigate traffic issues Fire Services Contract with Stanford University  Animal Shelter Service Delivery  Transient Occupancy Tax increases related to two new,  potential hotels  Potential acquisition of the downtown Palo Alto Post Office Junior Museum and Zoo Cubberley Community Center Master Plan Unfunded Actuarial Liability of $447.5 million for Pension and  Retiree Healthcare Trusts ($298.6 million General Fund) Parks Master Plan City owned assets operated by non‐profit organizations Cadillac Healthcare Federal Excise Tax  Year 10Potential recession 26 Looking Forward Manage expectations of the City Council, the  community, and the staff Ensure we are a competitive employer of choice Address FY 2018 structural imbalance between  General Fund revenues and expenses Rising Pension and healthcare costs Unfunded liability 27 Department Presentations (with  significant budget proposals only) o Department overview o Accomplishments o Initiatives o Significant budget proposals o Major capital projects, if applicable Finance Committee Questions Fiscal Year 2017 Finance  Committee Review 28 FY 2017 Proposed Operating  Budget City Attorney Operating Budget pp. 141‐148 Finance Committee May 3, 2016 29 FY 2017 Proposed Operating  Budget City Auditor Operating Budget pp. 149‐157 Finance Committee May 3, 2016 30 FY 2017 Proposed Operating  Budget City Clerk Operating Budget pp. 159‐167 Finance Committee May 3, 2016 31 FY 2017 Proposed Operating  Budget City Council Operating Budget pp. 169‐172 Finance Committee May 3, 2016 32 FY 2017 Proposed Operating  Budget City Manager Operating Budget pp. 173‐182 Finance Committee May 3, 2016 33 Department Overview The City Manager’s Office provides leadership  and professional management to the City  government in service to City Council policies,  priorities and community civic values. The office is guided  by the values of  place, community,  stewardship, civics  and public service. 34 Accomplishments Advanced City Council Priorities through department programs and initiatives Implemented City’s Ethics Training Increased focus on organizational planning and performance management Executed First Phases of Business Registry Delivered communication strategy on key initiatives 35 Fiscal Year  2017 Initiatives Implement City Council Priorities Support City Council Community Responsiveness: Troubleshooting and Problem Solving Leadership and Performance Management Strategic Communication Support Economic Vitality Program Federal and State Legislative Programs  36 FY 2017 Proposed Operating  Budget Office of Sustainability Operating Budget pp. 307‐313, 468‐469 Finance Committee May 3, 2016 37 Department Overview Mission: Lead the organization and community in  promoting a culture of environmental  sustainability by developing, coordinating, and  leading initiatives citywide and regionally. Purpose: Promote and facilitate an  environmentally sustainable future in ways that  improve quality of life, grow prosperity and  build resilience, and provide leadership in the  region and to other communities. 37 38 Accomplishments Developed Sustainability and Climate Action Plan  (S/CAP)  Procured Sustainability Dashboard system  Held multiple Study Sessions with City Council and  UAC Raised $350k external funding for sustainability  initiatives Established ‘Electric Vehicle First” policy for City  fleet. 39 Fiscal Year  2017 Initiatives Complete development and adoption of the  Sustainability and Climate Action Plan (S/CAP)  Pilot local and regional “mobility as a service”  initiatives Implement Sustainability Dashboard  performance tracking system Further integrate sustainability policies,  programs and practices into City operations 40 Significant Budget Proposals Sustainability Initiatives Contract  Funding, $110,000 Sustainability Contingency          Account, $250,000 41 FY 2017 Proposed Operating  Budget Human Resources Department Operating Budget pp. 253‐273, 475‐478 Finance Committee May 3, 2016 42 Department Overview Mission Purpose Divisions •Compensation  •Employee and Labor Relations  •Organization and Employee Development •Recruitment  •Risk Management, Safety & Workers’ Compensation 43 Accomplishments Four Union Agreements Completed: IAFF, PAPOA, SEIU and PAPMA Filled approximately 270 vacancies In‐depth Ethics Training for 960 employees Complied with new IRS Affordable Care Act  (ACA) reporting requirements Updated minimum wage ordinance and  implemented for City hourly staff 44 Fiscal Year 2017 Initiatives Address recruiting challenges Support the Healthy City/Healthy  Community priorities Enhance City‐wide training including e‐ learning options Continue improvements in personnel actions  and electronic record‐keeping Address ergonomic and safety programs 45 Significant Budget Proposals General Fund Hourly Staff Alignment, 0.74 FTE, $36,000 General Liability Fund  Reduced citywide allocation Workers’ Compensation Fund Workers’ Compensation Manager, 1.00 FTE, $171,000 Reduced citywide allocation General Benefits Fund Employee Wellness Program, 0.48 FTE, $23,000 Reduced citywide allocation 46 FY 2017 Proposed Operating  Budget Information Technology  Department Operating Budget pp. 275‐288 Capital Budget pp. 629‐656 Finance Committee May 3, 2016 47 Department Overview Mission Purpose Divisions   •Office of the CIO •IT Project Services •IT Operations •IT Enterprise Services •Information Security Services 48 Accomplishments Awarded Leading Digital City –Named 4th Top City Outstanding Achievement in Local Government  Innovation Award from the Alliance for Innovation Traffic Signal System Upgrade Fire Vehicle Technology Upgrades E911 Implementation Deployment of Sharepoint Online PC and Data Center Cloud Backup Systems 49 Top Fiscal Year  2017 Initiatives Council Chambers Equipment Replacement Office 365  Smart City Strategy ERP Planning and System Selection Fiber/Wireless Efforts Geographic  Information System Assessment 50 Significant Budget Proposals Data Center Failover ($120,000) Security Penetration Testing ($35,000) Implementation of a Project Management  Tool ($50,000) Staffing Adjustments: IT Operations, Hourly to FTE Desktop Technician,  $59,024 IT Operations, FTE Technologist to Sr. Technologist,  $20,331 51 FY 2017 Proposed Operating  Budget Administrative Services Department and Printing & Mailing Fund Operating Budget pp. 183‐199 Finance Committee May 3, 2016 52 Department Overview Mission Purpose Divisions   •Administration •Accounting •Purchasing and Contracts •Office of Management & Budget •Property Management and Acquisition •Treasury (including Printing and Mailing Fund) 53 Accomplishments Implemented eProcurement system, PlanetBids Began collection of Transient Occupancy Tax for  AirBNB rentals Implemented GASB 68 standards for financial  reporting of pension liability Maintained City’s AAA credit rating 54 Fiscal Year 2017 Initiatives Implement integrated online parking permit  program Identify funding sources and investment  options to address City’s unfunded pension and  healthcare liabilities Implement a technologically focused training  program to facilitate staff use of financial,  human resources and payroll systems Develop an online dashboard (presentation) of  City financial and budget data for the public to  access and assess City fiscal performance 55 Significant Budget Proposals Temporary Staffing Adjustments Purchasing, $53,974 0.48 FTE Contract Administration Specialist to  maintain service level and reduce backlog  Administration, $74,880 0.48 FTE Management Specialist to implement  systems training 56 FY 2017 Proposed Operating  Budget Non‐Departmental Operating Budget pp. 467‐470 Finance Committee May 3, 2016 57 Description The General Fund Non‐Departmental budget includes  revenue and expenditure appropriations 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  District. The Non‐Departmental budget may also include  estimated provisions or placeholders for certain revenues  and expenditures that have not yet materialized or  distributed at the time the budget is developed or adopted.  These items can be one‐time or ongoing depending on its  nature and frequency 58 Non‐Departmental Significant Budget Adjustments & Proposals General Fund Transfer to Electric Fund: Traffic  Signal and Streetlight Costs, $2,266,122 Establish Budget Uncertainty Reserve, $2,000,000 Capital Transfer Adjustment, ($1,400,000) Sustainability Contingency Account, $250,000 2016 Elections Funding, $150,000 FY 2017 Proposed Operating  Budget May 3rd Recap Finance Committee May 5, 2016 1 2 Current Status FY 2017 Proposed Operating  Budget Fire Department Operating Budget pp. 239‐251 Finance Committee May 5, 2016 3 Department Overview Mission Purpose Service Programs •Fire Suppression •Emergency Medical Services •Fire Prevention Bureau •Employee Fire/EMS Certification Training 4 Accomplishments 5,270 medical/rescue calls with 92% of EMS call responses within 8 minutes and 99% with a paramedic on scene in  12 minutes 135 fire incidents with 86% of responses within 8 minutes 1,964 fire inspections, 13% increase from FY 2015 Key succession planning tools and training schedule Medical Priority Dispatch and Auto Aid agreements Celebrated 40thanniversary of paramedics & ambulances Completed successful negotiations for new labor contract 5 Fiscal Year 2017 Initiatives Develop operational efficiencies, focusing on performance and operational readiness Invest in training plans and succession planning Evaluate community and public health risks 6 Continue working with Stanford to renegotiate service contract Modernize and replace essential equipment Significant Budget Proposals Fire Station Furniture – Fitness Equipment,  $125,000 California Incident Command Certification  System Training, $38,000 Realignment of Development Services  Staffing, 2.15 FTE 7 FY 2017 Proposed Operating  Budget Office of Emergency Services (OES) Operating Budget pp. 299‐306 Finance Committee May 5, 2016 8 Department Overview Mission Purpose Objectives •Operational Readiness •Risk Assessment; Situational Awareness •Community Education; Engagement •Training & Exercises 9 Accomplishments Updated City Emergency Operations Plan (EOP) San Francisquito Creek Multi Agency Coordination Training of Emergency Services Volunteers;  Community Sand Bag Days with Public Works StormReady Community Certification  Critical Infrastructure & Key Resources Survey,  School Map Update Super Bowl 50: significant support to Stanford  University and other regional partners 10 Fiscal Year  2017 Initiatives Training: Staff & Community Planning: Local Hazard Mitigation and  Adaptation Plan, Continuity of Operations  Plan, Department Emergency Plans, regional  planning Infrastructure Technology: Improve efficacy  of the City’s EOC; Exploration of energy  resilience strategies (i.e. solar power for  critical systems, new electric ATV, etc.);  Public Safety Building 11 Significant Budget Proposals None 12 FY 2017 Proposed Operating  Budget Police Department Operating Budget pp. 331‐343 Finance Committee May 5, 2016 13 Department Overview Mission Purpose Divisions 14 •Field Services •Personnel and  Training Services •Investigative Services •Technical Services •Traffic, Parking &  Special Event Services •Animal Services Accomplishments Received 135 citizen commendations in FY 2015 Development of the Tri‐City Records Management  System (RMS) Regional preparedness initiatives and exercises,  including the Silicon Valley Regional  Interoperability Authority 15 Regional and Statewide  initiatives to ensure  vehicle occupant safety  and combat drunk driving Fiscal Year 2017 Initiatives Replace 9‐1‐1 phone equipment New curriculum for Citizen’s Academy Public Safety Building Implement new Records Management  System Migrate to 700 MHz Regional Radio  System 16 Significant Budget Proposals Track Watch (Project Safety Net), $824,000 Police Vehicle Modems, $100,000 17 FY 2017 Proposed Operating  Budget Community Services  Department Operating Budget pp. 201‐221 Finance Committee May 5, 2016 18 Department Overview Mission Purpose Divisions:   •Administration •Human Services •Arts & Sciences  •Open Space, Parks & Golf  •Recreation 19 Accomplishments 20 Human Services ‐Community Forums on Senior Services,  Veterans Homelessness, Domestic Violence and Implicit  Bias Arts & Sciences –Art Center and Children’s Theatre  increased audiences, attendance and outreach,  dynamic  new Public Art Conversation, MakeX, JMZ Initiative Open Space, Parks & Golf –Byxbee Park, Scott Park, El  Camino Park and Monroe Park, Magical Bridge Playground Recreation –Mitchell Park Community Center, Teen  Services, New Special Events  Fiscal Year 2017 Initiatives 21 •Work on the Cubberley Master Planning Process with  PAUSD  •Build on the Healthy City Healthy Community Priority:  •2nd Annual Health Fair  •New Resident Welcome Packet  •Workplace Health & Wellness Forum  •Complete the Parks & Recreation Master Plan  •Complete the Public Art Master Plan  •Ensure Mitchell Park Library & Community Center is a  vibrant, welcoming and dynamic experience for all  •Invest in CSD Staff – Engagement, Creativity, Service Significant Budget Proposals 22 •Collaboration with Santa Clara County for Homeless Services  and housing subsidies •CSD Service Delivery Enhancements ‐Increased costs in  several programs off set by revenues, e.g.  •New Preschool at Mitchell Park •Art Center Classes and Marketing •Children’s Theatre Staffing •Open Space Technicians for expanded Open Space and Trail  Maintenance •JMZ Market Analysis and Collections Management (one‐time) •Golf Course Reconfiguration Project –Anticipated Project  Start July 1, 2016 Teen Services Bryant St. Garage Fund ‐Grant Program 23 •Bryant Street Garage Teen  Program Staffing $33K  # of Grants Dollars Spent # Teens Impacted FY15 7 $7,430 550 FY16 18 $12,208 1,600 FY17*40 $25,000 2,500 *Projected Golf Course Reconfiguration Project 24 •Pending permits to begin renovation and reconfiguration of the existing  Palo Alto Municipal Golf Course  •FY 2016 estimated net loss of $923k, projected net loss in FY 2017 of  $825k Golf Course Construction Cost Increase for base bid $9.6M lowest bid in 2014,  $10.9M estimate in 2016 Higher estimate attributed to less competitive environment,  general inflation, and Prevailing Wage requirement $7.7M to $8.3M in COPs/Debt issuance (Annual Debt Service $534,000 ‐$569,000) Reconfiguration July 2016 –October 2017 Estimated Financial Projections FY2018 FY2019 Revenue Projection:$2.1M $2.8M   Operating Expense: $2.0M $1.9M Debt Service: $0.6M $0.6M Capital Reserve:‐$0.2M Net Income (Loss):($0.5M)$0.1M Permit Update 7 Project Safety Net Collaborative &  Means Restriction 26 FY12 – FY16 SUMC $2M FY17 Proposed PSN Collaborative $424,506 $270,000* Means Restriction - Track Watch, Fencing, Cameras $1,490,494 $824,000 Total Spending $1,915,000 $1,094,000 Remaining SUMC (est. June 30, 2016 $85,000 NA *Project Safety Net (PSN) Collaborative: Staffing: Executive Director 1.0 FTE & Program Specialist 0.48 FTE $229K Other: Consultant(s), meetings & general supplies $41K Total Cost of PSN Collaborative: $270K  ‐SUMC remaining funds June 30, 2016 $85K ‐General Fund $185K FY 2017 Proposed Operating  Budget Library Services Department Operating Budget pp. 289‐298 Finance Committee May 5, 2016 27 Department Overview Mission Purpose Divisions   •Public Services & Programs •Information Technology, and Collections •Buildings, Support,  and Administration 28 Accomplishments •Increased open hours of service •Sierra ILS •New Americans program •Early Literacy “Tip of the Week” •Teen Library Advisory Board (TLAB) •“Building up the bikes at PACL” grant •Drive‐up book drops •Silicon Valley Reads 2016 •Increased the percent of residents satisfied with Library Services, as measured by the National Citizens Survey, from 81% to 92% 29 Fiscal Year 2017 Initiatives •Implement recommendations related to Circulation functions •Finalize eBranch requirements and implementation evaluation •Complete the library’s procedure manual •Continue development of the New Americans program •Kindergarten library card campaign •Programming for children with differing needs and abilities 30 Significant Budget Proposals •Convert a half‐time Senior Librarian at  Rinconada Library to full‐time with offsetting  allocations in part‐time hourly staff (Ongoing savings:  $2,307)  31 FY 2017 Proposed Operating  Budget May 5th Recap Finance Committee May 10, 2016 1 2 Current Status FY 2017 Proposed Operating  Budget Development Services Operating Budget pp. 223‐238 Finance Committee May 10, 2016 3 Department Overview Mission Purpose Divisions   •Administration •Planning •Building •Green Building •Public Works •Fire Prevention Bureau 4 Accomplishments Adopted new Green Building and Energy Reach  Code ordinances Initiated revision to City policies on seismic  retrofitting of soft‐story and unreinforced  masonry buildings Initiated process for electronic plan review Launched Performance DashBoard Tool Launched Inspect App for customers Initiated viability and cost effectiveness study of  Electrification/Fuel switching from gas to electric Completed phase 1 of cost of services study 5 Fiscal Year 2017 Initiatives Continue code adoption process including  local amendments effective January  2017 Complete Seismic Retrofit Study Launch New Fee schedule and begin Phase 2  of Cost of Service Study Complete Electrification/Fuel Switch Study Adopt and implement new building codes  and local amendments Continue to monitor and streamline permit  and plan check activities across DevSer. 6 Significant Budget Proposals Planning Tech, $55,974 Add 0.50 FTE Planning Technician to provide front  desk support at the Development Services counter Staffing Re‐alignment, ($607,922) Reallocate 2.15 FTE to Fire, 0.64 FTE to Public Works,  and 0.50 to Planning (Fire staffing reallocation in parking lot  per FC May 5th meeting) State MWELO Enforcement, $50,000  Consultancy cost to implement and manage a  separate landscape permit process, per state  mandate 7 FY 2017 Proposed Operating  Budget Retiree Health Benefit Fund Operating Budget pp. 479‐480 Finance Committee May 10, 2016 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Impacts to FY 2017 Proposed 25 Funding Source Adopted  FY 2016 Modified FY  2016 Proposed FY  2017 May 9, 2016  Valuation Change from  Proposed  FY 2017 to  May 9, 2016 General Fund 9,664,600 8,246,207 9,322,699 9,403,256 80,557 Enterprise Funds 4,070,524 3,473,128 3,806,691 4,097,591 290,900 Other Funds 710,064 605,853 678,865 661,153 (17,712) Employee Health  Contributions 321,812 321,812 ‐                            ‐                           ‐                           Implied Subsidy ‐                           2,120,000 2,291,745 2,203,000 (88,745) Annual Required  Contribution (ARC)14,767,000$    14,767,000$    16,100,000$    16,365,000$    265,000$          Unfunded Liability as of June 30, 2013 report: $143.6 million Unfunded Liability as of June 30, 2015 report: $156.2 million Citywide Change: $12.6 million FY 2017 Proposed Operating  Budget Planning and Community  Environment Operating Budget pp. 315‐329 Finance Committee May 10, 2016 26 Department Overview 27 Sample of Accomplishments 28 •Ground floor retail  preservation ordinance •Comp Plan summit and  CAC formation •Comp Plan Vision and  Goals  •Downtown Commute  Survey and TMA launch •Downtown RPP •Code clean up ordinance •Annual office/R&D limit •5 bicycle boulevard  concept plans •$2M traffic signal  upgrade •Major approvals at 2555  Park, 261 Hamilton, 385  Sherman, 430 Forest,  Stanford Shopping Center •2 SSO districts; initiated  IR program review FY2017 Initiatives •Comp Plan Update •Phase 2 of Downtown RPP & next RPP •Parking wayfinding implementation •Paid parking study & recommendations •Annual commute survey & TMA support •Bike Plan implementation projects •Traffic speed survey phase one & safety  improvements •Many more  29 •No Significant Change from FY 2016 General Fund Support of Approx $8.9M CIP Projects & Special Revenue Funds  •Staffing Requests •Budget Adjustment Requests •Unfunded Activities Budget Overview 30 •Management Analyst (Administration) •Program Assistant (Transportation) •Building/Planning Tech (Current Planning) •0.5 FTE Coordinator Transportation Systems  Management (Safe Routes) Total General Fund Impact:  0.52 FTE Staffing Requests 31 Other Budget Adjustments •Continued funding for TMA pilot programs  •Ongoing Shuttle operations  •Adjustment of staff between departments •California Avenue retail study •Scanning and storage •Revenue alignment (adopted fee increases) •Continued use of “on call” contractors 32 Not Reflected in the Budget •FY16 Comp Plan Update contract amendment •FY16 grade separation PM contract •Shuttle expansion •Multiple major housing initiatives ahead of the  Comp Plan •Eichler design guidelines •Establishment & operation of new RPP Districts 33 FY 2017 Proposed Operating  Budget Special Revenue Funds Operating Budget pp. 115‐127 Finance Committee May 10, 2016 34 Special District Funds •University Ave Parking Permit Fund  Street Sweeping Contractual Increase:$39,709 Transfer to Capital: $682,676 •California Ave Parking Permit Fund Street Sweeping Contractual Increase:$64,638 •Residential Preferential Parking Fund Contract Enforcement Costs: $437,407 Online Service: $103,476 Additional areas discussed at Council 5/9/2016 35 Significant Activity By Fund Stanford University Medical Center Fund •Project Safety Net Collaborative: $85,000 remaining •CIP Transfers: Intermodal Transit: $441,000 (Public right of way) Quarry Road Improvements: $359,000 (Public right of way) Infrastructure, Sustainable Neighborhoods and Communities,  and Affordable Housing: ‐$1.6 Million (Charleston/Arastadero Corridor) ‐$2.8 Million (New Public Safety Building) ‐$6.0 Million (Replacement of Fire Station #3) Climate Change: $1.2 Million (Bicycle and Pedestrian Plan) 36 Significant Activity By Fund Housing In-Lieu Funds •Revenue is projected to decrease by $1.7 million based on  tracking Traffic Mitigation and Parking In‐Lieu Funds •University Ave Parking In‐Lieu Fund  Downtown Parking Garage: $2.7 million in FY 2019 Federal & State Revenue Funds •Community Development Block Grant (CDBG): $754,000 Significant Activity By Fund 37 Street Improvement Fund No change in activity for FY 2017 Community Development Funds No change in activity for FY 2017 Public Benefits Funds No change in activity for FY 2017 Downtown Business Improvement District Fund No change in activity for FY 2017 Public Art Fund No change in activity for FY 2017 38 Significant Activity By Fund FY 2017 Proposed Operating Budget May 10th Recap Finance Committee May 12, 2016 2 Current Status FY 2017 Proposed Municipal Fee Schedule Finance Committee May 12, 2016 3 Annual Process User Fee Cost Recovery Level Policy Cost of Services Studies: Planning & Community Environment Development Services  4 Background FY 2017 Salary & Benefit adjustment = 5.5% Fees over 100% adjusted down  Development Impact fee adjustments Construction Cost Index = 3.5% 12 new fees 8 deleted fees 118 changed fees Fee Adjustment Recommendations 5 New Fees •Mitchell Park – Cleaning  Package (CSD) •Wet Season Construction Site  Stormwater Inspection  (Development Services ‐Public  Works) •Offsite document Recovery  (Police) Deleted Fees •Art Center Green Room (CSD) •Cubberley Community Center  Theater Rentals (CSD) •Sales –Coffee/Tea –Self  Serve (Library) 6 •Fee adjusted to align with market value Art Center: Auditorium Rental – 10% increase •Fee adjusted to reach desired cost recovery Encroachment Permit: Dumpster – 10% increase •Technical adjustments 7 Changed Fees FY 2017 Proposed Operating Budget Public Works Finance Committee May 12, 2016 Department Overview Mission Purpose Divisions Environmental  Services Engineering Services Airport Public Services 9 FY 2017 Proposed Budget Public Works Item 3.a) General Fund Operating Budget pp. 350‐360 Accomplishments & Initiatives Fiscal Year 2016 Accomplishments Pavement Condition Index  Council Infrastructure Plan APWA accreditation Residential food scraps collection & commercial recycling and composting Sludge dewatering & truck loadout facility Fiscal Year 2017 Initiatives  Complete Baylands Interpretive Center renovation and boardwalk replacement  design Complete Environmental Impact Review (EIR) for Newell Road Bridge Project Maintain the health of the urban forest Modernize City building systems to reduce energy consumption 11 General Fund Significant Budget Proposals: Tree Trimming Services, $569,000 Increased pruning cycle implications and risks Urban Forest Master Plan, $200,000 Previous Tree  Trimming Contract Proposed Tree  Trimming Contract Annual Cycle 7 year 15 year Trees pruned annually 5,050 6,300 Annual Cost $350,000 $968,000 12 FY 2017 Proposed Budget Public Works Item 3. d)  Wastewater Treatment Fund Operating Budget pp. 378‐386 Capital Budget pp. 551‐580 Wastewater Treatment Fund FY2017 Budget Fiscal Year 2017 Initiatives: Secure state funding and award construction contract for dewatering  Initiate strategic planning for Northwest County Water Reuse Key Changes from Fiscal Year 2016: Operating Increase:  8.6%   (5.5% before debt service correction) Capital Increase:  92%   dewatering/incinerator; plant rehab  projects Funded by State Revolving Fund loans Capital Reappropriations $16.0  million Rate Increase:  9% 14 Wastewater Treatment Fund  Significant Budget Proposals (Palo Alto’s Share ) 1/3 FTE: Senior Engineer –Emergency equipment repairs and CIPs  Catch up: Deteriorating  45  year old Plant  Execute: $200 million capital program 2/9 FTE: Management Analyst – Fund analysis for partner agencies Multiple partner agreements, cost/rate analyses and reports Increased CIP activity demands greater financial management  1/3 FTE: Senior Engineer –Recycled water wholesaler management  Compliance with state regulatory requirements for wholesaler  Public health management  15 16 17 FY 2017 Proposed Budget Public Works Item 3. b)  Refuse Fund Operating Budget pp. 361‐368 Capital Budget pp. 491‐500 Refuse Fund FY2017 Budget Fiscal Year 2017 Initiatives: Implement phase 2 commercial recycling & composting  ordinance  Implement landfill post‐closure inspection & maintenance  program   Key Changes from Fiscal Year 2016: Expenses increasing by 3.9% Capital reappropriations $0.1 million Significant Budget Proposals: Landfill staffing, $72,000 Division administrative staffing, $56,000 19 FY 2017 Proposed Budget Public Works Item 3. c)  Storm Drain Fund Operating Budget pp. 369‐377 Capital Budget pp. 501‐518 Storm Drainage Fund FY2017 Budget Fiscal Year 2017 Initiatives: Substantially complete remaining projects in 2005 ballot measure Commence development of Green Infrastructure Plan Secure approval of Blue Ribbon Committee recommendations, funding  plan and potential ballot measure for early 2017 Key Changes from Fiscal Year 2016: FY 2017 Proposed CIP $7.7 million Reappropriations $4.7 million Significant Budget Proposals: Increase in Storm Drainage Fee, ($193,723) Green Infrastructure Plan, $50,000 21 FY 2017 Proposed Budget Public Works Item 3. e)  Airport Fund Operating Budget pp. 387‐393 Capital Budget pp. 327‐342 Airport Fund FY2017 Budget Fiscal Year 2017 Initiatives: Complete design of apron reconstruction project Construct security fencing project Evaluate Fixed Based Operator leasing options Key Changes from Fiscal Year 2016: FY 2017 Proposed CIP $2.6 million FAA grant revenues $2.2 million Significant Budget Proposals: Increase to General Fund loan, $400,000 (FY2017 total loan of $0.7 million) 23 FY 2017 Proposed Budget Public Works Item 3. f) & 4  Vehicle Fund Budget/3 Year Pilot Contract Operating Budget pp. 394‐401 Capital Budget pp. 657‐686 CMR #6887 Contract For On‐Site Fleet Parts and Inventory Program Vehicle Replacement Fund FY2017 Budget Fiscal Year 2017 Initiatives: Evaluate replacement charges  Replace aging vehicles and analyze utilization for ideal fleet size Increase electric and hybrid vehicle replacements to reduce emissions Improve replacement parts inventory management processes Key Changes from Fiscal Year 2016: FY 2017 Proposed CIP $8.9 million Capital reappropriations $4.9 million Vehicle Replacement Reserve $3.3 million Significant Budget Proposals: Replacement of co‐owned fire truck, transfer from General Fund ($158,000) Installation of GPS monitoring, $53,570 25 Item 4:   3‐Year Pilot Program for Fleet Parts/Inventory Current Process Annual inventory of $260,000 4 staff members, 2,000 hours , 3,500  transactions annually Pilot Program Study recommended Staff available for fleet maintenance and vehicle replacements  Freeze one FTE  Annual savings of approximately $245,000 26 Refuse Fund FY17 Key Personnel Changes Substitute 1 permanent FTE for landfill post closure maintenance  and drop hourly position –New environmental protection systems –Safety requirement 1/3rd FTE for Division Management Analyst Refuse Fund FTE History FY12 FY13 FY14 FY15 FY16 FY17 38.07 26.47 21.95 16.25 15.2 15.65 $ $5 $10 $15 $20 $25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mil l i o n s WWT Fund FY2004‐FY2015 Actuals  (with ongoing CIP) General Expense Chemicals, varies Unbonded, Ongoing CIP, varies Debt Service (Bonds/Loans), 6% Nonchemical Supplies/Materials, 2% Non‐CIP Contract Services, 3.6% Commodities (Electricity, Etc.), 3.7% Allocated Charges, 3.4% Salary/Benefits, 4.2% Categories 2005‐2015 Average Annual  Change $ $5 $10 $15 $20 $25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mil l i o n s WWT Fund FY2004‐FY2015 Actuals (without CIP) General Expense, 13% Chemicals, varies Debt Service (Bonds/Loans), 6% Nonchemical Supplies/Materials, 2% Non‐CIP Contract Services, 3.6% Commodities (Electricity, Etc.), 3.7% Allocated Charges, 3.4% Salary/Benefits, 4.2% Categories 2005‐2015 Average Annual  Change 1 FY 2017 Proposed Operating Budget May 12th Recap Finance Committee May 17, 2016 2 Current Status 3 Fiscal Year 2017 Proposed Budget Utilities Overview Operating Budget pp. 403‐410 4 Department Overview Mission: The City of Palo Alto Utilities provides safe, reliable,  environmentally sustainable, and cost effective services.  Purpose Divisions •Administration •Customer Support  •Engineering •Operations •Resource Management 5 Accomplishments •Coordinated successful citywide drought response  efforts •Launched and achieved very high participation in  Peninsula SunShares program  •Increased the City’s Renewable Portfolio Standard to  26% and projected RPS of 40% by end of CY 2016 •Launched a heat pump water heater pilot,  PaloAltoGreen Gas Program, and Home Efficiency Genie  Program •Completed major Water, Gas, and Wastewater CIP  replacement projects; upgraded security in two  substations 6 Fiscal Year 2017 Initiatives •Capital Improvements and Maintenance  •Energy Efficiency and Conservation Programs •Technology and Smart Grid •Electrification Work Plan  •Workforce Development and Succession •Strategic Plan Implementation  7 Utilities Staffing Proposals No Regular Additions or Reductions Reclassifications (11 FTEs ‐$177k) –Realign job title to existing and/or new duties –Improve operational efficiency –Provide staffing flexibility –Create job development opportunity Add/Drop (2 FTEs ‐$74k) –Focus on staffing and operation needs 8 FY 2017 Proposed Budget Utilities Item 2.a) Electric Fund Operating Budget pp. 411‐424 Capital Budget pp. 343‐434 9 Fiscal Year 2017 Initiatives: •Increase the City’s Renewable Portfolio Standard to  57% by end of CY 2017 •Continue to evaluate and develop potential cost‐ effective Electrification programs Significant Budget Proposals: •Rate increase 11% ($14.7 million in revenue) •Commodity purchases increase of $10.1 million •Traffic signal & streetlight electric costs ($2.3 million  transfer from the General Fund) Electric Fund Operating Budget, pp. 411‐424 10 Electric Fund Capital Budget, pp. 343‐434 Fiscal Year 2017 Capital: $21.6 million Significant Projects: Customer Connections: $11.6 million Electric Pole Replacements for FTTP VA Hospital Expansion System Improvements: $9.2 million 230 Kv Electric Intertie Undergrounding Projects: $0.8 million 11 FY 2017 Proposed Budget Utilities Item 2.b) Fiber Optics Fund Operating Budget pp. 425‐431 Capital Budget pp. 435‐454 12 Fiber Optics Fund Operating Budget, pp. 425‐431; Capital Budget, pp. 435‐454 Fiscal Year 2017 Initiatives: •Rebuild/Upgrade the City’s dark fiber network •Reach an agreement with a 3rd party to build a citywide  fiber optic network •Issue a Request for Proposal to build wireless networks  for Public Safety and Utilities •Develop a ‘Dig Once’ policy or ordinance  Contractual CPI Rate Increase of 3.2% Fiscal Year 2017 Capital:    $1.7 million •Fiber Optic System Rebuild 13 FY 2017 Proposed Budget Utilities Item 2.c) Gas Fund Operating Budget pp. 432‐443 Capital Budget pp. 455‐490 14 Gas Fund Operating Budget, pp. 432‐443 Fiscal Year 2017 Initiatives: •Promote PaloAltoGreen Gas Program •Cross Bore Safety inspection program •Gas safety awareness and outreach Significant Budget Proposals: •Rate increase 8% offset by usage  reduction ($1.4 million revenue decrease) 15 Fiscal Year 2017 Capital: $6.3 million Significant Projects: System Improvements: $0.7 million Customer Connections: $1.4 million Gas Main Replacements: $4.2 million Gas Fund Capital Budget, pp. 455‐490 16 FY 2017 Proposed Budget Utilities Item 2.d) Wastewater Collection Fund Operating Budget pp. 444‐453 Capital Budget pp. 519‐550 17 Wastewater Collection Fund   Operating Budget, pp. 444‐453 Fiscal Year 2017 Initiatives: Wastewater Collection System  Rehabilitation/Augmentation projects Reduce number of Sanitary Sewer Overflows  Significant Budget Proposals: Rate increase 9% ($0.9 million in revenue) Wastewater Treatment Costs $1.2 million 18 Fiscal Year 2017 Capital: $4.8 million Significant Projects: System Improvements: $4.4 million Customer Connections: $0.4 million Wastewater Collection Fund   Capital Budget, pp. 519‐550 19 FY 2017 Proposed Budget Utilities Item 2.e) Water Fund Operating Budget pp. 454‐466 Capital Budget pp. 581‐626 20 Water Fund Operating Budget, pp. 454‐466 Fiscal Year 2017 Initiatives: •Complete business plan to evaluate potential  expansion of recycled water •Seismic upgrades of reservoirs •Complete the design for WMR 26 Significant Budget Proposals: Rate increase 6% offset by usage reduction       ($0.1 million revenue decrease) 21 Water Fund Capital Budget, pp. 581‐626 Fiscal Year 2017 Capital: $9.6 million Significant Project Costs: Water Main Replacements:             $6.3 million Customer Connections: $0.7 million System Improvements:   $2.6 million 22 Fiscal Year 2017 Proposed Budget General Fund Capital Capital Budget pp. 95‐324 23 Fiscal Year  2016 Accomplishments Completed the El Camino Park Restoration project Completed Traffic Circles Improvements project Completed Rinconada Pool Locker Room project Completed site selection for Public Safety Building  and California Avenue Parking Garage projects Completed Phase 1 of the Embarcadero Road at El  Camino Real Improvements project Concept Plans for seven bicycle boulevards and  enhanced bikeways approved by City Council 24 Accomplishments (cont’d) Increased Funding for Street Maintenance o FY 2010 Adopted Budget = $1.9 million o FY 2011 Adopted Budget = $3.8 million o FY 2017 Proposed Budget = $6.8 million Improved Pavement Condition Index score o 2010 average PCI score = 74 o 2016 average PCI score = 82 o 2019 goal = 85 (originally projected for 2021) PCI of 82 is highest in Santa Clara County Annual funding reduced to $3.8 million  beginning in FY 2020 25 Capital  Improvement  Funds 48%  (101 Projects) Enterprise Funds 44% (92 Projects) Internal Service  Funds 8%  (18 Projects) FY 2017 – 2021 Proposed Projects by Fund Type  (211 Projects) 26 Buildings &  Facilities 45%  ($120.9 million) Parks & Open  Space 11%  ($30.7 million) Streets &  Sidewalks 16%  ($42.7 million) Traffic &  Transportation 23%  ($61.3 million) Unallocated  Salaries &  Benefits 5%  ($13.5 million) FY 2017‐2021 General Capital Improvement  Fund ($269.2 million) 27 5‐Year General Capital Improvement Fund  Planned Expenditures ($ millions)   $‐  $20  $40  $60  $80  $100  $120  $140 FY 2015‐2019 CIP FY 2016‐2020 CIP FY 2017 ‐ 2021 CIP Buildings and Facilities Parks and Open Space Streets and Sidewalk Traffic and Transportation Unallocated ‐ Salaries and Benefits 28 0 5 10 15 20 25 30 35 44%  (35 Projects) 25%  (20 Projects) 12%  (9 Projects) 18%  (14 Projects) 1% (1 Project) FY 2017 Proposed General Capital Improvement  Fund Projects by Category (79 Projects) 29 Buildings &  Facilities 42%  ($30.2 million) Parks & Open  Space 24%  ($17.5 million) Streets &  Sidewalks 15%  ($10.8 million) Traffic &  Transportation 17%  ($11.8 million)Unallocated  Salaries &  Benefits 2%  ($1.5 million) FY 2017 Proposed General Capital  Improvement Fund Budget ($71.9 million) 30 Transfer from  General Fund 29%, ($20.9 million) Gas Tax 2%  ($1.4 million) Infrastructure  Reserve 32%, ($23.2 million) Debt Financing 9%  ($6.1 million) Impact Fees/In‐Lieu  Fees 1%, ($0.4 million) Stanford University  Medical Center 17%  ($12.4 million) Federal/State &  Local Agencies 6%  ($4.1 million) Interest Income 1%  ($1.0 million) Transfer from  Parking Funds 1%,  ($0.7 million) Transfer from Other  Funds 2%, ($1.8 million) FY 2017 Proposed General Capital  Improvement Fund Sources ($71.9 million) 31 $11.6 $7.3 $3.0 $5.5 $8.0 $3.0$0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Mil l i o n s Infrastructure Reserve (IR) Infrastructure Reserve Minimum Reserve Balance Expenses Total Sources 32 City Council Infrastructure Plan Project 5‐Year Plan  (in millions) Public Safety Building $   57.0 Bicycle Pedestrian Transportation Plan 20.0 Replacement of Fire Stations 3 & 4 14.2 Downtown Parking Garage 13.0 California Avenue Parking Garage 9.6 Charleston/Arastradero Corridor Improvements 7.5 Highway 101 Bicycle/Pedestrian Bridge  (Gap Funding) 4.7 Byxbee Park Completion 2.8 Infrastructure Contingency Reserve 30.0 33 Nova Partners selected after RFP process Council approval of contract in June Nova Partners successfully managed construction of: –Children’s Library –College Terrace Library –Art Center –Rinconada Library –El Camino Park Restoration Infrastructure Plan Program  Management Consultant 34 $4 million contract over three years to assist in management of $129 million program Augment staff to provide: –Project management, design and constructability reviews, design consultant management, schedule and budget management, quality assurance, project communication, reporting Goal:  Ensure successful and transparent implementation of Infrastructure Plan, adhering to scope, schedule and budget Infrastructure Plan Program  Management Consultant  (Cont’d.) 35 New Projects Baylands Boardwalk Improvements:  $1.4 million Mitchell Park Adobe Creek Bridge:  $0.25 million City Hall Floor Remodel for floors 4 and 5:  $0.75 million Civic Center Electrical Upgrades and EV Charger Installation:  $0.65 million Railroad Grade Separation:  $1.9 million Downtown Mobility and Safety Improvements:  $1.45 million Foothills Park, Arastradero Preserve and Esther Clark Park  Comprehensive Conservation Plan:  $0.3 million Baylands Flood Protection Levee Improvements:  $1.0 million 36 Other Impacts NOT Included Additional Golf Course reconstruction costs Potential acquisition of Downtown Post Office University Ave. Parking Fund revenues currently programmed to fund projects in FY2018‐2021: Downtown Automated Parking Guidance Systems, Access Controls & Revenue Collection Equipment ($2.0 million, PL‐15002) Downtown Parking Management Study Implementation ($2.3 million, PL‐16002) 37 IBRC “Catch-up” Category IBRC Final Report “Catch- up” Backlog “Catch-up” amount funded to date, or included in Proposed CIP FY 2015-2019 Backlog Building $5.0 million $2.2 million $2.8 million Cubberley $6.9 million $0.7 million $6.2 million Parks $14.4 million $6.5 million $7.9 million Surface $14.9 million $12.1 million $2.8 million Total $41.2 million $21.5 million $22.4 million Progress of IBRC “Catch‐up” Backlog 38 Cubberley Property Infrastructure Fund Cubberley Community Center Master Plan (Fiscal Year 2017: $0.3 million) Cubberley Field Restrooms (Fiscal Year 2017: $0.3 million) Cubberley Amenities Improvements ‐(Reserve) (Fiscal Year 2017: $1.0 million Cubberley Repairs (Fiscal Year 2017: $0.3 million). Cubberley Roofing Replacements projects (Fiscal Year 2017: $0.8 million; 5‐year CIP: $2.7 mil.) ID #6932 Budget Hearing and Proposition 218 Hearing Attachment S: FY 2017 Budget Hearing Transcripts (Hard copies for City Council Only) A. April 25, 2016 City Council Meeting Excerpt Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52679 B. May 3, 2016 Finance Committee Meeting Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52664 C. May 5, 2016 Finance Committee Meeting Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52665 D. May 10, 2016 Finance Committee Meeting Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52666 E. May 12, 2016 Finance Committee Meeting Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52667 F. May 17, 2016 Finance Committee Meeting Transcript http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=52668 CMR #6932: ATTACHMENT S City of Palo Alto (ID # 6823) City Council Staff Report Report Type: Action Items Meeting Date: 6/13/2016 City of Palo Alto Page 1 Summary Title: TMA Funding Agreement Title: Approval of Funding Agreement with the Palo Alto Transportation Management Association (PATMA) and Silicon Valley Community Foundation in the Amount of $100,000 for Fiscal Year 2017 for Pilot Programs and Discussion of the PATMA Draft Strategic Plan From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council approve and authorize the City Manager or designee to execute the funding agreement between the City of Palo Alto, the Silicon Valley Community Foundation, and the Palo Alto Transportation Management Association (Attachment A). Executive Summary With initial direction from City Council in 2013, staff has been actively working on developing Transportation Demand Management (TDM) strategies to encourage alternatives to solo driving as part of a multi-faceted effort to address traffic and parking concerns. The development of a Transportation Management Association (TMA) for Palo Alto was seen as a key component of this approach, and staff began work with a consultant team on the development of the organization in 2014. The City of Palo Alto also programmed $100,000 in pilot funding for TMA programs in Fiscal Year 2016. The Palo Alto TMA incorporated as a non- profit in January 2016, and is seeking 501 (c)(3) status. To address concerns expressed by the City Council regarding the TMA’s structure and transparency, and to define an oversight role for the City, a funding agreement has been created to formalize the provision of the City funding for TMA programs. This report summarizes the attached funding agreement between the City of Palo Alto, the Silicon Valley Community Foundation, and the Palo Alto Transportation Management Association (TMA), including the use and restrictions of City funds, and provides an overview of the TMA’s draft City of Palo Alto Page 2 business plan, which is being created to govern the activities of the TMA in the first two years of its operation. Background & Discussion City Council heard an update on the formation of the TMA at the March 14, 2016 meeting (Attachment B). The staff report for that update contains detailed information on the background and formation of the TMA to date. As a non-profit, the TMA has entered into a Customized Philanthropy Services Agreement with the Silicon Valley Community Foundation (SVCF). This agreement stipulates that the SVCF holds an account for the TMA that serves to accept donations that are solely for the use of TMA activities. As the holder of the account, the SVCF has legal discretion and control over the account. Donations to SVCF are tax deductible. The City of Palo Alto has programmed $100,000 in FY2016 funding for the TMA to fund initial pilot programs and to supplement start-up costs for the organization provided through the City’s contract with its consultants. Given the nature of the agreement with the SVCF, these funds will be deposited into the account held by the SVCF for the TMA. The SVCF will grant these funds to the TMA. At the March 14 City Council study session, several Councilmembers expressed concern regarding the use of the funding and transparency from the TMA, and expressed a desire for the City to maintain an oversight role in the use of the funding. To address these concerns, a funding agreement was created between the City, the TMA, and the SVCF. That funding agreement is presented for approval tonight (Attachment A). Once in place, the agreement would be valid through July 1, 2017, and would govern the $100,000 identified by the City of Palo Alto for use by the TMA and included in the Fiscal Year 2016 Adopted Operating Budget. The agreement limits the use of the City-provided funds to “pilot projects” conducted by the TMA with the intent to reduce single-occupancy vehicle trips by downtown commuters. To address Council concerns, the agreement makes funding for pilot programs contingent on the TMA providing reports twice annually to the City Council with updates on the implementation and effectiveness of the pilot programs, conducting open meetings, and providing documents created by the TMA to the public. At this time, the TMA Board of Directors has, at City Council request, developed a draft two- year business plan that identifies the resources required to fund activities (Attachment C). The draft business plan outlines the key objectives identified by the TMA to guide the organization in meeting the City’s goal of reducing single occupant vehicle (SOV) commutes to downtown by City of Palo Alto Page 3 30%. The objectives address topics including program development, partnership, advocacy, information and outreach, and achieving a sustainable budget. Notably, the business plan identifies the top priorities for TMA pilot programs for the first several years of operation:  Transit subsidies: With a goal of reaching 1,000 employees, this program would provide employees with a full transit subsidy for an introductory period and reduce to a lesser subsidy on an on-going basis.  Carpool subsidies: Targeting a goal of 300 employees, the carpool program would subsidize carpools to and from Downtown Palo Alto.  Low-Income programs: The goal of these programs is to make sustainable transportation options more affordable and available for low-wage workers in Downtown Palo Alto. As part of the draft business plan, and in response to City Council input at the March 14 study session, the Board has identified several budget scenarios that would achieve trip reduction in Downtown Palo Alto through various levels of funding. The draft budget proposals and draft operating budget for the TMA, contained in Attachments D and E, detail estimated program costs to achieve the 30% reduction in trips in 3 years through an aggressive budget and timeline, and over 5 years in a more conservative budget and timeline. The budget also includes a baseline scenario denoting potential achievements with a minimum of continued funding of $100,000 annually. Policy Implication The support of the Palo Alto TMA is consistent with the following Comprehensive Plan Policies:  Goal T-1: Less Reliance on Single-Occupant Vehicles  Policy T-3: Support the development and expansion of comprehensive, effective programs to reduce auto use at both local and regional levels. Resource Impact The Fiscal Year 2016 Operating Budget contains $100,000 for TMA pilot programs. No additional funding resources are required at this time. Since the end of the fiscal year is quickly approaching, staff will request reappropriation of this funding, making it available once the agreement is in place. Any additional funds made available in the FY17 budget would require an amendment to the agreement or a separate agreement. Timeline City of Palo Alto Page 4 The TMA Board of Directors expects to roll-out the first pilot programs in the summer of 2016. Other programs will be contingent on funding and the direction of the TMA Board. Pursuant to the terms of the funding agreement, the Board will provide a written update to the City Council six months after the agreement is signed. Attachments:  Attachment A: TMA Funding Agreement (PDF)  Attachment B: March 14, 2016 TMA Update to Council (PDF)  Attachment C: Draft TMA Business Plan (PDF)  Attachment D: Draft TMA Budget Scenarios (PDF)  Attachment E: Draft TMA Operating Budget (PDF) AGREEMENT AMONG CITY OF PALO ALTO,SILICON VALLEY COMMUNITY FOUNDATION AND THE PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION TO PROVIDE FUNDING FOR TRANSPORTATION DEMAND MANAGEMENT SERVICES FOR PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION This Agreement to provide funding for transportation demand management services (this " Agreement")is made effective as ofJune ,2016 ("Effective Date"),by and between theCity of Palo Alto,a California chartered municipal corporation ("City"),the Palo Alto Transportation Management Association,a California nonprofit public benefitcorporation ("PATMA"),and Silicon Valley Community Foundation,a California nonprofit public benefit corporation ("SVCF"),on the following terms and conditions. RECITALS 1.Since 2013, the City hasbeen actively engaged in developing Transportation Demand Management (TDM) strategiesto encouragealternativesto solo driving to address Palo Alto's growing traffic and parkingconcerns. 2. The City engaged Moore Iacofano Goltsman,Incorporated ("MIG"),a consultant groupwith significantexperiencedesigning Bay Area Transportation Management Associations (TMA's),to assistin forminga TMA.The Palo Alto Transportation Management Association (PATMA)was incorporated on January 1,2016. 3.The Cityhasan interest inthe success ofthePATMA,and hasmade funding available for technical support during the start-up phase ofthe organization usingthe funds set aside for the MIG contract.The City hasalso provided funding for asurvey of Downtownemployee commute patterns,and seeks to support pilot programs ofthePATMA through thisagreement. 4. SVCF hasenteredintothat certain Customized Philanthropy ServicesAgreement with PATMA (the "CPS Agreement"),pursuant to which SVCF holds and administers a fund restricted to specific charitable purposes set forth in such agreement ("Restricted Account"). SVCFhas legal discretion and control overthe Restricted Account. 5.The PATMA intends to seek funding from publicandprivate foundations,private businesses,public agencies andother financial supporters. 6. The mission statementofthe PATMA isto reduceSingle OccupancyVehicle (SOV) trips,traffic congestion and demand for parking bydelivering targeted transportation solutions to the Downtown area's diverse range ofemployers,employees,visitors and residents.It also serves as a one-stop transportation information resource for the broader community,provides a forum for community dialogue,and isan active voicein local and regional transportation issues. While the primary focus of the PATMA isthe Downtown population whose travel choices have the highest impacts,its programs and services mayextend beyond these constituents. 160517jb 0131512 Attachment A 7.The Parties agree to enter into this Funding Agreement to facilitate the immediate implementation of pilot programs to reduce single occupancy vehicle (SOV)trips by downtown workers in Palo Alto. AGREEMENT NOW,THEREFORE,forgood and valuable consideration,thereceipt and adequacy of which are hereby acknowledged,the Parties hereby agreeas follows: 1.Recitals.The recitals set forth above are true and correct and are hereby incorporated into this Agreementintheir entirety. 2.Term.Thetermofthis Agreement shallbefromthe Effective Date through July 1,2017. 3.City Deposit.TheCityshalltransferthesumof$100,000 ("CityFunds")to SVCF,to be depositedintothe Restricted Accountfor useforthe purposesdescribed inthis Agreement. 4. Use ofCity Funds.SVCFshall holdand administerthe City Fundspursuantto the terms of the Restricted Account. SVCF and PATMA shall use the City Funds for the general purposes of the Restricted Account, as defined in the CPS Agreement, as further restricted for "pilot projects" intended to reduce single occupancy vehicle trips by downtown workers, as mutually agreed upon by the City Manager and PATMA. SVCF shall track the City Funds separately from other amounts held in the Restricted Account. 5.Strategic Planand Budget.Within 90 days ofthe EffectiveDate,PATMA shallprovidea detailedstrategic planand budgettothe City.Thestrategicplanmayutilizescenariosto illustratethe returnon investmentassociatedwithdifferent funding levels. 6.Reporting Requirement.PATMAshall providethe CityCouncilwith bi-annualwritten reports ontheimplementation and effectiveness ofpilot programs funded bythe City,including quantitative measures and cost per employee mode shift. 7.Public Meeting Requirement.The funding isexpressly contingent on PATMA's agreement toprovide 72 hours written advance notice tothe public ofallBoard of Director meetings and to allow members ofthe public to attend all such Board of Director meetings. 8.Work Product.PATMA,shall ensure any written document orother work product developed with funds received through this Agreement ismade available tothe public to the extent not otherwise prohibited by law. 9.Audits.PATMA and SVCF will make available all financial records related to the funds and the use of the funds during the term ofthis Agreement and for three (3)years thereafter.PATMA and SVCF further agreeto maintain and retain such records forat leastthree (3)years aftertheexpiration or earlier termination ofthis Agreement. 160517jb0l3I512 10.Indemnity.To the fullest extent permitted by law,PATMA shall protect,indemnify,defend and hold harmless CITY and itsCouncil members,SVCF,and each of the City'sand SVCF's officers,employees and agents (each an"Indemnified Party")from and against any and all demands,claims,or liability ofany nature,including death orinjury to any person,property damage oranyother loss,including all costs and expenses of whatever nature including attorney's fees,experts fees,court costs and disbursements ("Claims")resulting from,arising out ofor inany mannerrelated to performance or nonperformance by PATMA,itsofficers, employees,agentsor contractorsunderthis Agreement,regardless ofwhetheror not it iscaused in part by an Indemnified Party. Notwithstandingthe above,nothing inthis section shall beconstruedto require PATMAto indemnifyan Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct ofan Indemnified Party. The provisions ofthis section shall survive the expiration or early termination ofthis Agreement. 11.Insurance.PATMA, at itssole cost and expense, shall obtain and maintain, in full force and effectduringtheterm ofthis Agreement,the insurance coveragedescribed inExhibit "A". PATMA and its contractors,ifany, shall obtain a policy endorsement naming CITY as an additionalinsuredunderanygeneral liabilityor automobilepolicyor policies. All insurance coverage required hereunder shallbe provided through carriers with AM Best's Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance businessinthe State ofCalifornia.Anyandall contractors ofPATMA retained to perform Services under this Agreement will obtain and maintain,in full force and effect during the term ofthis Agreement,identical insurance coverage,naming CITY asanadditional insured under such policiesas requiredabove. 12.Other Requirements: (a)Strategic Planning Session.PATMA shall conduct astrategic planning session within 90 days ofthe date ofthis Agreement,producing 3-year goals and objectives and funding requirements, and a budget with projected metrics (cost per mode shift,ROI,etc.). (b)Business Registry Data.The City may elect to share certain data from its Business Registry with PATMA for PATMA's exclusive use inprogram development and marketing.PATMA agrees not to share any non-public data with others and will take steps to ensure the continued confidentiality ofanysuch non-public data. (c)Performance Monitoring.The City may implement its own performance monitoring ofCity funded programs to determine effectiveness of provided funds. (d)Additional Use Restrictions.The City Funds will not be used for anything other than project management and program costs ofthe agreed to projects until the funds are expired. 160517jb 0131512 (e)Board Members.The City may request that the PATMA Board be expanded to include additional members,possibly including residents and additional City representation. 13.Notices. All notices hereunder willbegivenin writing and mailed,postage prepaid,by certified mail, addressed as follows: To CITY: Office ofthe City Clerk City ofPalo Alto Post Office Box 10250 Palo Alto,CA 94303 With a copy to the Purchasing Manager To PATMA: Palo Alto Transportation Management Association c/o Wendy Silvani 791 MandanaBlvd. Oakland,CA 94610 To SVCF: Silicon ValleyCommunityFoundation Attn:Michelle Fries on behalfofPATMA,Fund #5495 2440 West El Camino Real,Suite 300 Mountain View,CA 94040 14.AuthoritytoBind.The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf oftheir respective legal entities. 15.Counterpart Signatures.This Agreement may be signed in multiple counterparts,which shall,when executed by all the parties,constitute asingle binding agreement. 16.Applicable Law.This Agreement will begoverned by the laws ofthe State of California. 17.Venue.In the event that an action isbrought,the parties agree that trial ofsuch action will be vested exclusively in the state courts ofCalifornia in the County ofSanta Clara,State of California. 18.Amendments.This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations,representations,and contracts,either written ororal. This document may be amended only by awritten instrument,which is signed by the parties. 160517jb0131512 19.Severability.Ifacourt ofcompetent jurisdiction finds or rules that any provision ofthis Agreement or any amendment thereto isvoid or unenforceable,the unaffected provisions ofthis Agreement and anyamendments thereto will remain in full force andeffect IN WITNESS WHEREOF,the Parties have executed tins Agreement as ofthe Effective Date. PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION: Jjtks^r Title:gJlACr fcJc*\b TftAr 'T SILICON VALLEY COMMUNITY FOUNDATION: Name:Mari HIen L^008 r^(^Bustno^r^eiopmentandBn^O^ CITY OF PALO ALTO: James Keene APPROVED ASTO FORM: CoraSilver Senior Asst City Attorney 19.Severability.Ifa court of competent jurisdiction finds or rules that any provision of this Agreement oranyamendment thereto is void or unenforceable,the unaffected provisions ofthis Agreement and any amendments thereto will remain in full force and effect. IN WITNESSWHEREOF,the Partieshaveexecutedthis Agreementas ofthe EffectiveDate. PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION: Name: Title: SILICON VALLEY COMMUNITY FOUNDATION: fj Xl Mari Ellen LoijensName:J „., Chief Business,Development and Brand OfficerTitle: CITY OF PALO ALTO: James Keene City Manager APPROVED AS TO FORM: Cara Silver Senior Asst. City Attorney 160517jb 0131512 EXHIBIT "A" INSURANCE REQUIREMENTS CONTRACTORSTO THE CITY OFPALO ALTO (CITY), AT THEIRSOLE EXPENSE,SHALL FORTHETERM OFTHE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A-:VII,OR HIGHER,LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THESTATE OFCALIFORNIA. AWARD IS CONTINGENTON COMPLIANCEWITH CITY'S INSURANCEREQUIREMENTS.AS SPECIFIED,BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER'SCOMPENSATION EMPLOYER'S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY.INCLUDING PERSONAL INJURY,BROADFORM PROPERTY DAMAGEBLANKET CONTRACTUAL,AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY &PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY,INCLUDING ALLOWNED,HIRED,NON-OWNED BODILY INJURY EACH PERSON EACHOCCURRENCE PROPERTY DAMAGE BODILYINJURYANDPROPERTY DAMAGE,COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 Sl.000.000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY,INCLUDING, ERRORS ANDOMISSIONS. MALPRACTICE (WHEN APPLICABLE), ANDNEGLIGENTPERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED:CONTRACTOR.AT ITS SOLE COST AND EXPENSE.SHALL OBTAIN AND MAINTAIN,IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT,THE INSURANCE COVERAGE HEREIN DESCRIBED,INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS,IFANY,BUT ALSO.WITH THE EXCEPTION OFWORKERS'COMPENSATION,EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE,NAMING AS ADDITIONAL INSUREDS CITY,ITS COUNCIL MEMBERS,OFFICERS,AGENTS, AND EMPLOYEES. II. III. INSURANCECOVERAGE MUST INCLUDE; A. B. A PROVISIONFOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICETO CITY OFCHANGE IN COVERAGEOR OFCOVERAGECANCELLATION;AND A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENTTO INDEMNIFY CITY. C.DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'SPRIOR APPROVAL. CONTACTOR MUST SUBMIT CERTIFICATES(S)OF INSURANCE EVIDENCING REQUIRED COVERAGE. ENDORSEMENT PROVISIONS,WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A.PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO ORCONTRIBUTING WITH ANYOTHER INSURANCE CARRIED BY ORFOR THE BENEFIT OF THE ADDITIONAL INSUREDS 160517jb 0131512 B.CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALLNOT, FOR THAT REASON ALONE.EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER. BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDERTHIS POLICY. C.NOTICE OF CANCELLATION 1.IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM,THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATEOF CANCELLATION. 2.IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON PAYMENT OF PREMIUM,THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10)DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING ANDCONTRACT ADMINISTRATION CITY OF PALOALTO P.O.BOX 10250 PALO ALTO,CA 94303 160517jb0131512 City of Palo Alto (ID # 6427) City Council Staff Report Report Type: Study Session Meeting Date: 3/14/2016 Summary Title: Downtown Transportation Management Association Study Session Title: Update on the Formation of the Downtown TMA (Transportation Management Association) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council receive and review the report on the Palo Alto Transportation Management Association. This is a study session, and no action is requested. Executive Summary Since 2013, the City has been actively engaged in developing Transportation Demand Management (TDM) strategies to encourage alternatives to solo driving to address Palo !lto’s growing traffic and parking concerns. A City Council colleagues memo dated October 3, 2013 resulted in Council direction to convene a study session and develop an initial recommendation related to goals of reducing traffic and parking demand. On December 9, 2013 Council held a study session with representatives of Google, Contra Costa Centre and Stanford University, all considered Bay Area leaders in applying TDM strategies, to better understand their respective programs and their potential application to Palo !lto’s challenges. The ity ouncil subsequently requested a staff analysis and recommendation regarding establishment of a Transportation Management Association (TMA) for Palo Alto, and on February 24, 2014, directed staff to move forward with the steps necessary to form the organization. The Transportation Management Association (TMA) Steering Committee, a consortium of local employers (including the City of Palo Alto) with resident representatives, worked through 2015 to develop the vision, mission and goals intended for a new TMA. Led by a consultant team with significant experience in developing TMAs in the bay area, the team conducted the first comprehensive commute survey for Downtown, discussed potential funding sources for City of Palo Alto Page 1 Attachment B ongoing programs, the need to provide services for lower wage workers in the Downtown, a variety of rideshare pilot programs and the preferred structure for TMA formation. The group voted in November to incorporate as a 501(c)3 non-profit and will have a fiscal sponsor who will collect monies on behalf of the organization, the Silicon Valley Community Foundation (SVCF). The TMA had its first official Board meeting on January 28th, and this report summarizes some of the key activities of the TM! Steering ommittee and the oard’s plan for action in 2016. As a major employer Downtown, the City is a key member of the TMA Board of Directors, and its input and participation will be critical to the TM!’s operations and success. Background & Discussion What is a TMA? A TMA is a business-member funded organization that develops, markets, manages and advocates for effective transportation programs. TMAs are formed in a variety of ways, but they generally share the common goals of reducing single-occupant vehicle trips, reducing congestion and demand for parking, and improving quality of life by reducing greenhouse gas emissions. Some other benefits of TMAs include: - TM!’s can provide a comprehensive approach to managing transportation needs in a particular area, and a framework for multiple constituents to work collaboratively on these solutions. -TM!’s can fund and offer branded services to both residents and commercial businesses cost-effectively and efficiently through a network of alliances and partnerships. Providing a one-stop resource with consistent messaging and promotion is a hugely important ‘customer service’ factor that affects awareness and utilization of TDM programs and services. In the larger context, having a TMA positions Palo Alto to work cooperatively with neighboring cities and other agencies in providing a flexible array of programs and services. While the Palo Alto TMA will initially be focused on the Downtown area, transportation programs are by nature connective and provide benefit to areas outside their targeted region. Because travel routes used by residents, employees and visitors typically cross neighborhood and city boundaries, having a TMA that recognizes key linkages is critical to developing quality programs and services. For example, Palo !lto’s TM! was developed with the idea of initially developing programs to support Downtown employee commutes, but this focus will also provide reciprocal benefit to Palo Alto Downtown residents who may be travelling the opposite way to work; e.g. to worksites in neighboring cities. City of Palo Alto Page 2 An effective TMA can have significant measurable benefits such as:  Reducing the number of single-occupancy-vehicle (SOV) trips made within and through Palo Alto, which reduces traffic congestion and the demand for parking;  Reducing the need to build new parking facilities;  Reducing total vehicle miles traveled (VMT);  Reducing greenhouse gas emissions generated both locally and at the regional level, which contributes to Palo !lto’s sustainability goals. A TMA also provides a forum for public and private entities and businesses of all sizes to work together on transportation programs. Generally, larger companies fund the majority of the cost of programs for the benefit of smaller companies. Because larger companies have more employees and hence contribute more to traffic congestion, they have more of a vested interest to work towards reducing single occupant vehicle trips. TM!’s are structured in a variety of ways. Some operate with a membership- for- services model, where a company pays membership dues based on its size and business category. Some TM!’s sell access to a collection of programs available at different levels of financial support (bus services, rideshare discounts, carshare programs, or discounted transit passes, as examples). Others receive funding from their cities, counties, and other sources and provide information and some services to all companies within the TM!’s service area. Still others are hybrids, receiving some public and some private funding- providing some ‘free’ services to everyone and charging for other programs. Some TM!’s (as well as Transportation programs such as Stanford’s) receive funding from parking fees for their TDM programs and services. Formation of the Palo Alto TMA The ity engaged a consultant group with significant experience designing ay !rea TM!’s- MIG with TMA expert Wendy Silvani. This team recommended that Palo Alto follow a standard approach of engaging a Steering Committee which would develop a work plan, mission statement for the TMA, evaluate pilots for start-up programs, and propose a structure for the TM!’s ultimate oard of Directors. !t the request of the ity, this Steering Committee, a consortium of 12+ local employers, community and residential representatives, and the City of Palo Alto, worked through 2015 to develop the vision, mission and goals for the new TMA. Last May, this team partnered with EMC research to conduct the first comprehensive commute survey for Downtown which provided the basis for the TM!’s initial priorities. The group also discussed potential funding sources for ongoing programs, the need to provide services for lower wage workers in the Downtown, and learned about a variety of rideshare pilot programs. City of Palo Alto Page 3 It determined the preferred structure for TMA formation and voted in November to incorporate as a 501(c)3 non-profit and has a fiscal sponsor who will collect monies on behalf of the organization, the Silicon Valley Community Foundation (SVCF). This structure will enable the TMA to seek funding from many public and private foundations and other financial supporters; it also gives the new TMA and its supporters the assurance of professional accounting, reporting and other administrative management. The TMA officially incorporated at the start of January and had its first official Board meeting on January 28th, 2016. Structure of the Palo Alto TMA Board Based on Business Registry data, employers with 100+ employees account for over 70% of all employees who work in Downtown Palo Alto. These companies have the greatest potential to fund and adopt TDM programs that will make a difference in reducing SOV commutes and parking demand. These companies are of sufficient size to be able to take advantage of bulk transit pass programs, and have budgets to fund TDM programs for their employees. The 2015 commute survey results also indicated that employees who work for larger companies are among the ‘most likely’ to change behavior – they live in places where transit and other non- SOV commuting is an option and they work schedules conducive to using alternatives, etc. The initial structure of the Palo Alto TMA Board has 3 large companies (300+ employees based in Palo Alto) - the City, Google, and Palantir; two medium sized companies (the Garden Court hotel and IDEO), and one small company (Philz Coffee). This ratio reflects the Business Registry data; it is flexible and designed to be inclusive, but also to ensure Board members support the TMA at a level that will provide a basis for the TMA to be successful through their financial commitments. Although Google does not have employees in Downtown currently, they are an active regional partner (they have offices in Palo Alto in the Research Park) and have significant experience in developing transportation programs which achieve sizeable SOV reduction. In addition, while the focus of the TMA is initially in the Downtown areas, the Steering Committee acknowledged that regional commute factors influence the Downtown and ultimately the focus of the TMA may expand beyond these boundaries. There are also Google employees who are residents of Downtown that could use TM! services in the “empty” direction (e.g. heading out of Downtown), which makes the services more efficient and effective. Financial Contributions and Board Size The Steering ommittee’s consultant was able to provide recommendations from an attorney who has worked on establishment of many similar organizations, and that attorney ultimately City of Palo Alto Page 4 drafted the incorporation documents and bylaws. The consultant and attorney strongly recommended that all Board members be required to make a contribution to the organization to minimize risk exposure for the organization, a contribution which is separate from membership dues which would be paid by organizations who would become members of the TMA and take advantage of the services that it sells. The Steering Committee was unanimous in not wanting the TMA to spend time trying to sell and collect nominal ‘dues’ from the many small businesses, or searching for the basics – i.e., the salary of its Executive Director. Instead, they want the Director to focus on funding for programs, marketing and managing those programs. The current Board is deliberately small, with six members who are committed to the successful rollout of programs on a ‘fast track’ that will benefit the entire downtown community. As the TMA develops, it can easily increase the size of its Board to include others. Currently, the Large Employer Board contribution is $10,000 annually, the Medium-Sized Employer Board contribution is $2,500 annually, and the Small Employer Board contribution is $1,000 annually. The Board is expected to set membership dues within the next several weeks. Advisory Committee(s) The Board will encourage participation from other companies in the TMA through an Advisory Committee. The structure of how this committee would operate is yet to be determined; it could take the shape of committees for various projects (i.e., those interested in a Lyft pilot or just the transit pass program). The Steering Committee expects that the structure for the Advisory Committee will evolve over the next few months. The requirement for a financial contribution/membership fee to the TMA would not apply to an advisory committee to ensure participation by anyone who is interested. Feedback Mechanisms The TMA Board will have feedback mechanisms for all TMA-sponsored programs so anyone can provide input, suggestions, and ideas based on their experience as the Board designs, evaluates, and refines programs and services. The focus of the TM!’s initial programs will be on offering direct subsidies to many employees whose employers can’t provide commute benefits because they are ‘too small’, and encouraging the 100+ employers for whom offering transportation benefits is realistic to do so. Other Examples It is commonplace for a City to have a seat on the Board of the TMA and to provide funding. The following TMAs are Bay Area examples: 1. City of Emeryville: The City of Emeryville provided the bulk of funding for the first 3 years for the Emery-Go-Round TMA at 90%, 75%, then 50% of the total budget, and was City of Palo Alto Page 5 also on the Board. When the TMA became part of the PBID, the City became ex-officio on the Board (no vote). 2. San Mateo Corridor TMA: The City of San Mateo is on the Board and helps fund the TMA. 3. Alameda Landing TMA: The City of Alameda has 2 representatives on the Board and is providing funding for the TMA. The ity ouncil will receive an annual report on the TM!’s activities each year. The ity’s funding will be important in initial years for the launch of TMA programs, and the City Council can provide requested funding concurrent with requests for expansion of the Board, establishment of the Advisory Committee, or pilot projects, as examples. In this way the City can influence the TM!’s programs and direction. 2016 Board Workplan While the TMA is still in fledgling stage, the group agreed to continue to work with the MIG/Silvani consulting team while recruiting for an Executive Director for the organization. Top priorities for the Board include: 1. Recruitment of an Executive Director. The ED will replace the consultant team hired by the City as the leader of the organization. While the Board members are not expected to have TDM experience, this will be a key component of the employment requirements for the ED 2. Launch of a pilot program that subsidizes low-income Downtown workers with transit passes. Prior to the incorporation of the organization, the TMA Steering Committee spent several months exploring a variety of pilot programs to determine which offered the most immediate value to the Downtown, and a low-income worker transit pass subsidy program was ultimately determined to have the most immediate impact. Stanford’s Sustainable ities class has been working with the TM! to develop the parameters of a pilot transit pass program. The students speak Mandarin and Spanish and will be able to support outreach to workers who require those languages. This program could launch as early as April or May depending on the position of the Board. The Board will be discussing the details of the proposal at their meeting on March 3. SOV Trip Goal Reduction The TMA Steering Committee felt that specific numeric goals should be set for individual programs (i.e., targeting a number of employees for the low income transit subsidy; another number for another pilot program such as Lyft subsidies, etc.) This will allow the TMA to adjust/refine/create programs against specific participation, and help the City achieve its 30% reduction goal. On an annual basis, a 30% reduction from the current overall 55% SOV trip rate is 1650 people. Broken up over a 4 year period, that equates to 412 people a year; over 5 years City of Palo Alto Page 6 330 people. The TMA Board believes that achieving this type of reduction over a 4-5 year period is a reasonable target. Policy Implications Development of a TMA is consistent with the following Comprehensive Plan Policies:  Goal T-1: Less Reliance on Single-Occupant Vehicles  Policy T-3: Support the development and expansion of comprehensive, effective programs to reduce auto use at both local and regional levels. Resource Impact In order to submit for IRS incorporation, the TMA developed a draft budget to guide its development. Projected expenses for 2016 are listed below. The TMA is a separate organization with its own revenues and expenses, so while the City will be asked to contribute resources to the TMA for program development, ultimately the organization will have multiple sources of revenue. The TM!’s proposed budget is shown in Table 1, below. Table 1. TMA Proposed Draft Budget* Executive Director Salary (Part-time, assumed starting in June) $40,000 Annual Commute Survey, included in existing consultant contract $33,000 SVCF processing fees, included in existing contract $11,400 Legal Fees for IRS filing, included in IRS contract $2,500 Low Income Transit Pass Program – assumes 120 passes per month @ $75 each for 6 months; program still in development $54,000 Marketing $10,000 General Office Supplies $2,500 Miscellaneous and Other Programs $28,000 TOTAL $182,000 *This budget estimate is for the independent non-profit TMA and is not meant to reflect City budgetary commitments or requests. City of Palo Alto Page 7 Staff will be making a budget request for $100,000 to City Council to support the TMA as part of the FY2017 budget process. This $100,000 includes $90,000 to cover overhead expenses and other costs noted above, and the requested $10,000 large employer contribution. Additionally, City staff are working on an agreement with the TMA to provide up to $100,000 in funds that were budgetted by the City in FY2016 for TMA pilot programs. Funded pilot programs could include the transit-pass subsidy program, a pilot with Lyft, and possibly development of a “commuter wallet” Mobility !s ! Service (MaaS) product. Several smaller employers have also made contributions amounting to $32,000 for development of a low-income transit subsidy program, and Google, Palantir and the Garden Court Hotel have pledged their Board Contributions (total $22,500). Timeline The TMA officially launched in January 2016. It is expected to roll-out a low-income transit subsidy in April or May of 2016. Other programs will be contingent on funding and the direction of the TMA Board. Attachments:  Attachment A: EMC Final Report on Downtown Survey (PDF)  Attachment B: Palo AltoTMA Board Packet Feb16th (PDF) City of Palo Alto Page 8 Do w n t o w n P a l o A l t o Mo d e S p l i t S u r v e y Ma y 2 0 1 5 "UUBDINFOU" Me t h o d o l o g y ` 1, 1 7 3 s u r v e y s c o n d u c t e d w i t h e m p l o y e e s a t b u s i n e s s e s l o c a t e d w i t h i n a n a r e a o f Do w n t o w n P a l o A l t o b o u n d b y E l C a m i n o Re a l , W e b s t e r S t r e e t , E v e r e t t A v e n u e , a n d Fo r e s t A v e n u e . ` Th e s u r v e y p a r t i c i p a t i o n r a t e w a s 4 4 % , w h i c h r e p r e s e n t s t h e t o t a l n u m b e r o f c o m p l e t e d su r v e y s c o m p a r e d t o t h e t o t a l n u m b e r o f e m pl o y e e s a t p a r t i c i p a t i n g b u s i n e s s e s . T h e ov e r a l l r e s p o n s e r a t e w a s 1 2 % , w h i c h r e p r e s e n t s t h e t o t a l n u m b e r o f c o m p l e t e d s u r v e y s co m p a r e d t o t h e t o t a l n u m b e r o f e m p l o y e e s i n D o w n t o w n P a l o A l t o . ` A s t r a t i f i e d r a n d o m s a m p l e o f w o r k s i t e s w a s p u l l e d b y w o r k s i t e s i z e , i n c l u d i n g s m a l l , me d i u m a n d l a r g e b u s i n e s s e s . S a m p l e d w o r k s i t e s w e r e c o n t a c t e d d i r e c t l y t o i d e n t i f y a n d re c r u i t a n o n s i t e s u r v e y c o o r d i n a t o r w h o d i s t ri b u t e d t h e s u r v e y s t o a l l e m p l o y e e s a t t h e i r re s p e c t i v e w o r k s i t e s . ` Th e s u r v e y w a s o f f e r e d i n o n l i n e a n d p a p e r fo r m a t s f o r e m p l o y e e s o f b u s i n e s s e s w i t h 5 or m o r e e m p l o y e e s , a n d w a s c o n d u c t e d b y t e l e p h o n e w i t h e m p l o y e e s o f b u s i n e s s e s w i t h 4 o r f e w e r e m p l o y e e s . ` Da t a c o l l e c t i o n b e g a n M a y 4 th an d e n d e d t h e w e e k o f M a y 2 5 th . E a c h r e s p o n d e n t w a s as k e d c o m m u t e m o d e q u e s t i o n s f o r o n e c a l e n d a r w e e k p r e v i o u s t o t h e d a t e o n w h i c h th e y t o o k t h e s u r v e y . 15 - 5 5 9 1 P a l o A l t o T M A | 2 Do w n t o w n P a l o A l t o Fo r t h i s s t u d y , D o w n t o w n P a l o A l t o w a s d e f i n e d a s t h e a r e a b o u n d b y E l C a m i n o R e a l , We b s t e r S t r e e t , E v e r e t t A v e n u e , a n d F o r e s t A v e n u e . 15 - 5 5 9 1 P a l o A l t o T M A | 3 Mo d e s o f Tr a n s p o r t a t i o n Mo d e S h a r e - O v e r a l l Mo r e t h a n h a l f ( 5 5 % ) o f t h e t r i p s t a k e n i n t o d o wn t o w n a r e s i n g l e - o c c u p a n t - v e h i c l e t r i p s . %’ s r e f l e c t t h e t o t a l a m o u n t o f t r i p s t a k e n du r i n g t h e w e e k Dr o v e a l o n e Ca l t r a i n Wa l k e d Ro d e a b i c y c l e Ca r p o o l e d Wo r k e d r e m o t e l y Ot h e r 55 % 17 % SO V T o t a l : 55 % 8% In c l u d e s d r i v e a l o n e a n d m o t o r c y c l e Tr a n s i t T o t a l : 1 9 % In c l u d e s b u s a n d r a i l 7% No n - m o t o r i z e d T o t a l : 1 5 % In c l u d e s w a l k i n g a n d r i d i n g a b i c y c l e 5% 5% 3% Q1 . T h i n k i n g b a c k t o l a s t w e e k , wh a t m o d e o f t r a n s p o r t a t i o n d i d y o u u s e t o c o m m u t e T O do w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 7 Mo d e S h a r e b y W o r k s i t e S i z e As b u s i n e s s s i z e d e c r e a s e s , t h e pe r c e n t a g e o f S O V t r i p s i n c r e a s e s . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d r e m o t e l y / O t h e r 74 % 61 % 41 % 25 % 22 % 14 % 12 % 8% 7% 7% 8% 7% 6% 5% 4% 1- 2 5 e m p . ( 2 4 % ) 26 - 1 0 0 e m p . ( 3 2 % ) 10 1 + e m p . ( 4 4 % ) Bu s i n e s s S i z e b y N u m b e r o f E m p l o y e e s Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c e n t a g e o f t h e s a m p l e fo r e a c h r e s p e c t i v e s u b g r o u p . Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 8 Mo d e S h a r e b y S e l f - R e p o r t e d C o m m u t e D i s t a n c e As t h e d i s t a n c e f r o m D o w n t o w n i n c r e a s e s , m o d e s h i f t s t o w a r d t r a n s i t . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 69 % 52 % 40 % 38 % 30 % 19 % 11 % 7% 6% 5% 6% 5% 5% 4% 1% <1 t o 1 0 ( 4 5 % ) 10 t o 5 0 ( 3 5 % ) 50 + ( 2 0 % ) Di s t a n c e T r a v e l e d i n M i l e s (s e l f - r e p o r t e d ) Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c e n t a g e o f t h e s a m p l e fo r e a c h r e s p e c t i v e s u b g r o u p . Av e r a g e D i s t a n c e T r a v e l e d : Ov e r a l l = 1 5 . 8 m i l e s | S O V = 1 5 . 9 m i l e s | T r a n s i t = 2 3 . 5 m i l e s Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 9 Mo d e S h a r e b y H o m e G e o g r a p h y Co m m u t e r s f r o m S a n F r a n c i s c o a r e t h e l e a s t l i k e l y t o d r i v e . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 76 % 70 % 65 % 63 % 48 % 41 % 20 % 18 % 16 % 12 % 12 % 10 % 9% 7% 6% 6% 5% 5% 3% 3% 3% 1% 1% 0% 0% Sa n F r a n c i s c o ( 1 0 % ) P e n i n s u l a ( 2 0 % ) S o u t h B a y ( 3 3 % ) P a l o A l t o ( 2 2 % ) E a s t B a y ( 7 % ) Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c en t a g e o f t h e s a m p l e f o r e a c h r e s p e c t i v e su b g r o u p . Re f u s e d t o r e p o r t = 8 % Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 10 Mo d e S h a r e b y A g e a n d P a r e n t a l S t a t u s Ol d e r c o m m u t e r s a n d P a r e n t s a r e m o r e l i k e l y t o d r i v e a l o n e t o w o r k . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 70 % 51 % 20 % 18 % 9% 9% 7% 7% 5% 5% 18 - 4 9 ( 6 6 % ) 50 + ( 1 9 % ) Ag e Re f u s e d t o r e p o r t = 1 5 % 66 % 50 % 20 % 19 % 11 % 8% 8% 7% 7% 4% Pa r e n t ( 2 8 % ) N o n P a r e n t ( 6 8 % ) Pa r e n t a l S t a t u s Re f u s e d t o r e p o r t = 4 % Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c e n t a g e o f t h e s a m p l e fo r e a c h r e s p e c t i v e s u b g r o u p . Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 11 Mo d e S h a r e b y W o r k S t a r t T i m e Co m m u t e r s w i t h f l e x i b l e s c h e d u l e s a r e l e s s l i k e l y t o d r i v e . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 64 % 63 % 49 % 20 % 19 % 15 % 14 % 11 % 8% 9% 8% 7% 5% 5% 2% St a r t a t a s p e c i f i c t i m e ( 3 3 % ) S c h e d u l e is f l e x i b l e ( 5 5 % ) S c h e d u l e v a r i e s ( 1 1 % ) Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c en t a g e o f t h e s a m p l e f o r e a c h r e s p e c t i v e su b g r o u p . Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 12 Mo d e S h a r e b y J o b S t a t u s Pa r t - t i m e e m p l o y e e s a r e m o r e l i k e l y t o d r i v e . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 75 % 66 % 53 % 19 % 16 % 14 % 11 % 8% 7% 7% 6% 5% 5% 4% 3% On e f u l l - t i m e j o b ( 8 4 % ) O n e p a r t - t i m e j o b ( 8 % ) M o r e t h a n o n e j o b ( 6 % ) Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c en t a g e o f t h e s a m p l e f o r e a c h r e s p e c t i v e su b g r o u p . Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 13 Mo d e S h a r e b y B u s i n e s s T y p e Em p l o y e e s i n R e t a i l , R e s t a u r a n t , a n d H o s p i t a li t y c o m p a n i e s a r e m o r e l i k e l y t o d r i v e . Dr o v e a l o n e Ca l t r a i n Wa l k / B i k e Ca r p o o l e d Wo r k e d R e m o t e l y / O t h e r 78 % 72 % 73 % 67 % 59 % 33 % 31 % 26 % 20 % 14 % 13 % 10 % 9% 10 % 10 % 10 % 7% 7% 7% 8% 7% 6% 6% 5% 4% 3% 2% 2% 1% 1% Re t a i l ( 7 % ) G o v e r n m e n t ( 9 % ) T e c h n o l o g y ( 3 9 % ) R e s t a u ra n t ( 1 2 % ) H o s p i t a l i t y ( 1 6% ) L i g h t O f f i c e ( 1 1 % ) Nu m b e r s i n p a r e n t h e s e s r e p r e s e n t t h e p e r c en t a g e o f t h e s a m p l e f o r e a c h r e s p e c t i v e su b g r o u p . Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? 15 - 5 5 9 1 P a l o A l t o T M A | 14 Dr i v e A l o n e M o d e R a n k e d Re s p o n d e n t s w h o l i v e i n t h e E a s t B a y , a r e e m p l o y e d p a r t t i m e , a n d w o r k a t a s m a l l co m p a n y a n d r e t a i l c o m p a n y a r e m o r e l i k e l y t o d r i v e a l o n e . 73 % 72 % 70 % 67 % 66 % 66 % 65 % 64 % 63 % 63 % 61 % 59 % 55 % 53 % 51 % 50 % 49 % 41 % 41 % 33 % 18 % Re t a i l Ea s t B a y On e p a r t - t i m e j o b 1- 2 5 e m p . Ho s p i t a l i t y Re s t a u r a n t Ag e 5 0 + Li g h t o f f i c e Pa r e n t Mo r e t h a n o n e j o b So u t h B a y St a r t a t s p e c i f i c t i m e Sc h e d u l e v a r i e s Pe n i n s u l a 26 - 1 0 0 e m p . Go v e r n m e n t Ov e r a l l On e f u l l - t i m e j o b A g e 1 8 - 4 9 No n P a r e n t Sc h e d u l e i s f l e x i b l e 10 1 + e m p . Pa l o A l t o Te c h n o l o g y Sa n F r a n c i s c o 78 % 76 % 75 % 74 % Pe r c e n t a g e o f S O V tr i p s b y e m p l o y e e de m o g r a p h i c s 15 - 5 5 9 1 P a l o A l t o T M A | 15 Q1 . T h i n k i n g b a c k t o l a s t w e e k , w h a t mo d e o f t r a n s p o r t a t i o n di d y o u u s e t o c o m m u t e T O d o w n t o w n P a l o A l t o ? Tr a n s p o r t a t i o n At t i t u d e s Dr i v i n g A t t i t u d e s Tw o - t h i r d s ( 6 7 % ) o f d r i v e r s s a y t h e y p r e f e r t o d r i v e a n d p l a n o n co n t i n u i n g t o d o s o . Am o n g S O V D r i v e r s , 7 7 2 n St r o n g l y So m e w h a t To t a l ag r e e a g r e e Ag r e e I p r e f e r t o d r i v e t o w o r k a n d p l a n o n co n t i n u i n g t o d o s o . I n e e d t o d r i v e t o w o r k b e c a u s e I m a k e o t h e r st o p s , s u c h a s f o r s c h o o l , k i d s , o r o t h e r er r a n d s , b e f o r e o r a f t e r w o r k . I w o u l d r a t h e r n o t d r i v e t o w o r k , b u t I h a v e n o ot h e r g o o d o p t i o n s . I n e e d t o d r i v e t o w o r k b e c a u s e I u s e m y c a r fo r m e e t i n g s , d e l i v e r i e s , o r o t h e r w o r k - r e l a t e d ta s k s . I w o u l d t a k e a c a r p o o l o r v a n p o o l t o w o r k i f i t wa s c o n v e n i e n t , s a f e , a n d e a s y t o f i n d . 42 % 35 % 27 % 23 % 13 % 24 % 25 % 23 % 20 % 22 % 67 % 60 % 50 % 44 % 35 % Q1 0 - Q 2 0 . P l e a s e i n d i c a t e w h e t h e r y o u s t r o n g l y a g r e e , s o m e w h a t a g r e e , s o m e w h a t di s a g r e e , o r s t r o n g l y d i s a g r e e w i t h e a ch o f t h e f o l l o w i n g s t a t e m e n t s . 15 - 5 5 9 1 P a l o A l t o T M A | 17 Tr a n s i t A t t i t u d e s Sc h e d u l e , f r e q u e n c y , a n d c o n v e n i e n c e a p p e a r t o be s l i g h t l y l a r g e r o b s t a c l e s t o i n c r e a s i n g tr a n s i t r i d e r s h i p t h a n c o s t . Am o n g S O V D r i v e r s , 7 7 2 n St r o n g l y So m e w h a t To t a l ag r e e a g r e e Ag r e e I w o u l d t a k e t r a n s i t t o w o r k i f t h e s e r v i c e wa s f a s t e r o r m o r e f r e q u e n t . I w o u l d t a k e t r a n s i t t o w o r k i f t h e s c h e d u l e wa s b e t t e r a n d i t r a n w h e n I n e e d e d i t . I w o u l d t a k e t r a n s i t t o w o r k i f i t w a s e a s i e r to g e t t o a t r a n s i t s t o p . I w o u l d t a k e t r a n s i t t o w o r k i f i t w a s l e s s ex p e n s i v e o r I w a s g i v e n a d i s c o u n t e d tr a n s i t p a s s . 47 % 46 % 26 % 25 % 24 % 22 % 21 % 20 % 19 % 16 % 43 % 38 % Q1 0 - Q 2 0 . P l e a s e i n d i c a t e w h e t h e r y o u s t r o n g l y a g r e e , s o m e w h a t a g r e e , s o m e w h a t di s a g r e e , o r s t r o n g l y d i s a g r e e w i t h e a ch o f t h e f o l l o w i n g s t a t e m e n t s . 15 - 5 5 9 1 P a l o A l t o T M A | 18 Ag r e e : W o u l d R a t h e r N o t D r i v e Dr i v e r s w h o f e e l t h e y h a v e n o o t h e r g o o d o p t i on s b e l i e v e t r a n s i t w i l l n o t f i t t h e i r s c h e d u l e or i s n o t c o n v e n i e n t f o r t h e m . Am o n g t h e 5 0 % o f S O V D r i v e r s w h o w o u l d p r e f e r n o t t o dr i v e b u t f e e l t h e y h a v e n o o t h e r g o o d o p t i o n s . Ag r e e I wo u l d t a k e t r a n s i t i f s e r v i c e w a s f a s t e r / m o r e f r e q u e n t 63 % I w o u l d t a k e t r a n s i t if t h e s c h e d u l e w a s b e t t e r / i t r a n w h e n I n e e d i t 61 % I wo u l d t a k e t r a n s i t i f i t w a s e a s i e r t o g e t t o a s t o p 59 % I w o u l d t a k e t r a n s i t i f i t w a s l e s s ex p e n s i v e o r I r e c e i v e d a d i s c o u n t e d p a s s 47 % Q1 0 - Q 2 0 . P l e a s e i n d i c a t e w h e t h e r y o u s t r o n g l y a g r e e , s o m e w h a t a g r e e , s o m e w h a t di s a g r e e , o r s t r o n g l y d i s a g r e e w i t h e a ch o f t h e f o l l o w i n g s t a t e m e n t s . 15 - 5 5 9 1 P a l o A l t o T M A | 19 Re a s o n s f o r N O T T a k i n g T r a n s i t Ne e d o f a c a r , p e r s o n a l p r e f e r e n c e , a n d l a ck o f c o n v e n i e n c e a r e t h e p r i m a r y r e a s o n s dr i v e r s d o n o t t a k e t r a n s i t m o r e o f t e n . Am o n g S O V D r i v e r s , 7 7 2 n Ne e d c a r f o r e r r a n d s / m e e t i n g s I p r e f e r t o d r i v e Sc h e d u l e i s n o t c o n v e n i e n t Ro u t e s n o t w h e r e n e e d e d St o p s n o t c o n v e n i e n t Ta k e t r a n s i t a s n e e d e d To o e x p e n s i v e Un r e l i a b l e It w o u l d t a k e l o n g e r Ot h e r / D o n ' t k n o w 21 % 17 % 16 % 12 % 12 % 5% 5% 4% 2% 6% 21 . W h a t i s t h e m a i n r e a s o n y o u do n o t t a k e t r a n s i t m o r e o f t e n ? 15 - 5 5 9 1 P a l o A l t o T M A | 20 Bi k i n g a n d W a l k i n g A t t i t u d e s Be t t e r r o u t e s a n d b e t t e r p a r k i n g / s t o r a g e op t i o n s a p p e a r t o b e a f a c t o r f o r s o m e co m m u t e r s w h o p o t e n t i a l l y l i v e c l o s e en o u g h t o w a l k o r b i k e t o w o r k . %’ s r e f l e c t t h e t o t a l a m o u n t o f t r i p s t a k e n du r i n g t h e we e k a m o n g t h o s e w h o l i v e w i t h i n a 3 m i l e r a d i u s Dr o v e a l o n e 43 % Wa l k e d 26 % Ro d e a b i c y c l e 19 % Ca r p o o l e d 5% Wo r k e d r e m o t e l y 3% Ot h e r 3% Ca l t r a i n 1% Am o n g r e s p o n d e n t s w h o l i v e w i t h i n a 3 mi l e r a d i u s o f D o w n t o w n P a l o A l t o , 3 2 6 n St r o n g l y So m e w h a t To t a l ag r e e a g r e e Ag r e e I w o u l d w a l k o r b i k e t o wo r k i f t h e r e w e r e b e t t e r 23 % 17 % 40 % pa t h s , t r a i l s , a n d si d e w a l k s . I w o u l d b i k e t o w o r k i f th e r e w a s b e t t e r p a r k i n g 16 % 16 % 32 % or s t o r a g e o p t i o n s f o r m y bi k e a t m y w o r k l o c a t i o n . Q1 0 - Q 2 0 . P l e a s e i n d i c a t e w h e t h e r y o u s t r o n g l y a g r e e , s o m e w h a t a g r e e , s o m e w h a t di s a g r e e , o r s t r o n g l y d i s a g r e e w i t h e a ch o f t h e f o l l o w i n g s t a t e m e n t s . 15 - 5 5 9 1 P a l o A l t o T M A | 21 Pa r k i n g Pa r k i n g Mo r e t h a n h a l f o f c o m m u t e r s p a r k i n pu b l i c o r p r i v a t e g a r a g e s o r l o t s ; fi f t e e n p e r c e n t p a r k on n e i g h b o r h o o d s t r e e t s . 30 % 21 % 15 % 4% 3% 2% 24 % Pu b l i c g a r a g e Pr i v a t e / e m p l o y e r Ne i g h b o r h o o d It v a r i e s I n a 2 - o r 3 - h o u r Ca l t r a i n p a r k i n g l o t O t h e r / D K / or p a r k i n g l o t ga r a g e o r p a r k i n g st r e e t s on - s t r e e t p a r k i n g Do n ’ t d r i v e lo t zo n e Wh e r e d o y o u t y p i c a l l y p a r k w h e n y o u d r i v e t o w o r k ? 4. 15 - 5 5 9 1 P a l o A l t o T M A | 23 Pa r k i n g b y W o r k s i t e S i z e Co m m u t e r s w h o p a r k o n n e i g h b o r h o o d s t r ee t s a r e m o s t l i k e l y t o w o r k f o r a me d i u m - s i z e d b u s i n e s s . Bu s i n e s s S i z e b y N u mb e r o f E m p l o y e e s 1- 2 5 26 - 1 0 0 10 1 + 63 % 26 % 46 % 12 % 34 % 7% 41 % 47 % 25 % Pu b l i c g a r a g e o r Pr i v a t e / e m p l o y e r Ne i g h b o r h o o d pa r k i n g l o t ga r a g e o r p a r k i n g l o t st r e e t s (3 0 % ) (2 1 % ) (1 5 % ) Wh e r e d o y o u t y p i c a l l y p a r k w h e n y o u d r i v e t o w o r k ? 4. 15 - 5 5 9 1 P a l o A l t o T M A | 24 Pa r k i n g b y B u s i n e s s T y p e Co m m u t e r s w h o u s e p u b l i c g a r a g e s a n d l o t s a r e mo r e l i k e l y t o b e G o v e r n m e n t w o r k e r s . Re t a i l Go v ' t Te c h Re s t a u r a n t Ho s p i t a l i t y Li g h t O f f i c e 55 % 28 % 10 % 31 % 29 % 2% 22 % 19 % 12 % 17 % 33 % 18 % 36 % 5% 28 % 35 % 37 % 8% Pu b l i c g a r a g e o r Pr i v a t e / e m p l o y e r Ne i g h b o r h o o d pa r k i n g l o t ga r a g e o r p a r k i n g l o t st r e e t s (3 0 % ) (2 1 % ) (1 5 % ) Wh e r e d o y o u t y p i c a l l y p a r k w h e n y o u d r i v e t o w o r k ? 4. 15 - 5 5 9 1 P a l o A l t o T M A | 25 Co m m u t e r Se g m e n t a t i o n s Dr i v e r S e g m e n t a t i o n Ab o u t h a l f ( 4 9 % ) o f d r i v e r s a r e o p e n t o a l t e r n a t i v e s t o d r i v i n g . Am o n g S O V D r i v e r s , 7 7 2 n Dr i v e a l o n e a n d Dr i v e a l o n e a n d a r e Dr i v e a l o n e b u t El s e al w a y s w i l l op e n t o o t h e r o p t i o n s w o u l d p r e f e r n o t t o 49 % 42 % 24 % 25 % 9% Dr i v e a l o n e a n d a l w a y s w i l l : Dr i v e a l o n e a t l e a s t o n c e a w e e k a n d s t r o n g l y a g r e e t h a t t h e y pr e f e r t o d r i v e a n d p l a n o n c o n t i n u i n g t o d o s o . Dr i v e a l o n e a n d a r e o p e n t o o t h e r o p t i o n s : Dr i v e a l o n e a t l e a s t o n c e a w e e k a n d s o m e w h a t ag r e e t h a t t h e y p r e f e r t o d r i v e a n d p l a n o n c o n t i n u i n g t o d o s o . Dr i v e a l o n e b u t w o u l d p r e f e r n o t t o : Dr i v e a l o n e a t l e a s t o n c e a w e e k a n d d i s a g r e e t h a t t h e y pr e f e r t o d r i v e a n d p l a n o n c o n t i n u i n g t o d o s o . El s e : Dr i v e a l o n e a t l e a s t o n c e a w e e k a n d d i d n o t a n s w e r t h a t t h e y pr e f e r t o d r i v e a n d p l a n o n co n t i n u i n g t o d o s o . 15 - 5 5 9 1 P a l o A l t o T M A | 27 De m o g r a p h i c s T h a t A r e M o s t L i k e l y t o C h a n g e H a b i t s Dr i v e r s i n S a n F r a n c i s c o , w h o w o r k f o r a l a rg e o r T e c h c o m p a n y , h a v e f l e x i b l e w o r k sc h e d u l e s a n d a r e y o u n g e r a r e m o r e l i k e l y to c o n s i d e r o t h e r t r a n s p o r t a t i o n o p t i o n s . 72 % 66 % 62 % 60 % 57 % 53 % 53 % 52 % 52 % 51 % 51 % 51 % 50 % 49 % 49 % 48 % 48 % 47 % 44 % 44 % 43 % 43 % 41 % 41 % 41 % 35 % 32 % 31 % Te c h n o l o g y Sa n F r a n c i s c o 10 1 + e m p . Go v e r n m e n t Wo r k s c h e d u l e i s f l e x i b l e Li g h t o f f i c e Ag e 1 8 - 4 9 Pe a k h o u r c o m m u t e r So u t h B a y Fu l l t i m e w o r k e r Co m m u t e 1 0 t o 5 0 m i l e s No n - P a r e n t Pa l o A l t o Co m m u t e 5 0 + m i l e s Ov e r a l l Ea s t B a y Co m m u t e 1 - 1 0 m i l e s Pa r e n t Re t a i l 26 - 1 0 0 e m p . No n p e a k h o u r c o m m u t e r Pa r t t i m e w o r k e r Pe n i n s u l a St a r t w o r k a t a s p e c i f i c t i m e 1- 2 5 e m p . Ho s p i t a l i t y Ag e 5 0 + Re s t a u r a n t % o f S O V d r i v e r s w h o wo u l d p r e f e r n o t t o dr i v e , b y d e m o s 15 - 5 5 9 1 P a l o A l t o T M A | 28 Ov e r a l l E m p l o y e e L o c a t i o n Th e m a p r e p r e s e n t s t h e pe r c e n t a g e o f d o w n t o w n em p l o y e e s b y h o m e z i p c o d e . 15 - 5 5 9 1 P a l o A l t o T M A | 29 Te c h n o l o g y W o r k e r C o m m u t e r L o c a t i o n Th e m a p r e p r e s e n t s t h e pe r c e n t a g e o f T a r g e t D r i v e r s wh o w o r k f o r t e c h c o m p a n i e s , by h o m e z i p c o d e . 15 - 5 5 9 1 P a l o A l t o T M A | 36 Go v e r n m e n t W o r k e r s C o m m u t e r L o c a t i o n Th e m a p r e p r e s e n t s t h e pe r c e n t a g e o f T a r g e t D r i v e r s wh o w o r k f o r t h e G o v e r n m e n t , by h o m e z i p c o d e . 15 - 5 5 9 1 P a l o A l t o T M A | 37 Co n c l u s i o n s Co n c l u s i o n s ` Cu r r e n t l y j u s t m o r e t h a n h a l f ( 5 5 % ) o f e m p l o y e e t r i p s in t o D o w n t o w n P a l o A l t o a r e S O V t r i p s . – Ne a r l y h a l f ( 4 9 % ) o f t h e s e S O V d r i v e r s e x p r e s s e d a n in t e r e s t i n s e e k i n g a l t e r n a t i v e t r a n s p o r t a t i o n o p t i o n s . – Th o s e m o s t l i k e l y t o s e e k a l t e r n a t i v e o p t i o n s a r e m o r e li k e l y t o w o r k f o r t e c h c o m p a n i e s a n d / o r l a r g e e m p l o y e r s , be y o u n g e r , l i v e m o r e t h a n 1 0 m i l e s f r o m P a l o A l t o , a n d ha v e a f l e x i b l e w o r k s c h e d u l e . – Th e y h a v e c o n c e r n s a b o u t t r a n s i t a s a n a l t e r n a t i v e , w i t h pr i m a r y c o n c e r n s b e i n g a r e a l o r p e r c e i v e d l a c k o f co n v e n i e n c e f o r r o u t e s , s c h e d u l e s , a n d l o c a t i o n s o f s t o p s . Co s t i s a l s o a c o n c e r n f o r s o m e . 15 - 5 5 9 1 P a l o A l t o T M A | 39 Co n t a c t I n f o r m a t i o n To m P a t r a s to m @ e m c r e s e a r c h . c o m 61 4 . 8 2 7 . 9 6 7 7 Sa r a L a B a t t sa r a @ e m c r e s e a r c h . c o m 51 0 . 5 5 0 . 8 9 2 4 Do u g M a c D o w e l l do u g @ e m c r e s e a r c h . c o m 61 4 . 8 2 7 . 9 6 7 3 15 - 5 5 9 1 P a l o A l t o T M A | 40 Attachment B - Draft Business Plan PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION MAY, 2016 Attachment C Draft Business Plan Pg. 1 Executive Summary (to come) Mission & Purpose (to come) Market Analysis The City’s new Business Registry and data from the TMA’s 2016 Downtown Employee Commute Survey confirm that the population of Downtown employees is approximately 10,000. The 2015 single occupant vehicle (SOV) trip rate is 55% (5,500 employees drive alone to work). Of these, the 2015 commute survey revealed that 49% of these drive-alone employees are willing to try an alternative. The TMA’s initial target markets and initial programs are informed by these facts and the following data points: Data Points Relevance to TMA Programs Industry Research  Restricting and pricing parking can result in up to 28% reductions in driving  Transit subsidies result in 5% to 20% reductions  Shuttles result in 7% to 22% reductions  Information and marketing result in 4% reductions Palo Alto is well served by Caltrain for traditional commuters; other carpool and first/last mile programs (including the shuttle system), plus supportive parking management will maximize the investment in and effectiveness of each strategy. 2015 Employee Survey Identified target markets: workers along the Caltrain corridor; within Palo Alto; and in specific zip codes where transit and other modes already do or can work well. Almost 50% of drive-alones are willing to try an alternative. Our job is to give them options that work and provide incentives that encourage long-term behavior change. Business Registry 854 listings for Downtown:  88 eating and lodging  81 retail  392 office  91 service/communications  758 have 0-25 employees  76 have 26-100 employees  16 have 101-to 500 employees  2 have 501+ employees Only a handful of employers, including the City, are large enough to be able to offer robust TDM programs on their own; nearly two-thirds of downtown workers and their employers need assistance. Ancillary programs (i.e., first/last mile solutions) can help larger companies increase effectiveness of existing programs such as GoPass. Draft Business Plan Pg. 2 Residential Parking Permit Data The number of workers who live in specific zip codes within East Palo Alto, Redwood City, Mountain View, San Jose, San Mateo, Santa Clara and Sunnyvale 2015 Commute Survey identified these zip codes as having good transit and other alternative mode utilization and/or potential Strategic Opportunities and Challenges Opportunities  There is a growing interest and desire to use alternatives by employees to use other transportation modes as well as interest by employers as transportation becomes an important employee recruitment and retention tool  Policy changes will make transit, biking, walking, and carpooling more attractive and affordable than driving and parking  The planned reduction in Residential Parking Permits for employee use will increase demand for alternatives  Paid parking and increased monthly parking fees can support the TMA’s efforts  It is becoming increasingly faster and easier to use sustainable transportation modes to commute to work  Downtown Palo Alto has very good transit service options (Caltrain, VTA, SamTrans) for many workers  New technologies and ‘first mile’ services will make core transit more accessible for more employees Challenges  Fare inequalities can make using transit far more expensive than driving and parking  First mile problems – getting to transit and parking availability at transit can be a barrier  Free or inexpensive parking near work still makes driving more attractive  High turnover in retail, food service, other businesses will require consistent and ongoing marketing and information. Language may also be a barrier among some workers.  Understanding options is difficult – there is no single, ‘easy’ resource available to employees or employers Current Objectives The City has established a goal of reducing SOV commutes by 30% over the next several years. The TMA’s work plan is designed to move the needle towards this goal while building a strong organizational foundation for long-term sustainability and results-oriented programs. We are starting with a benchmark of some 5,500 downtown employees who current drive alone to get to and from work. A 30% reduction would change the commute patterns of some 1,650 employees. TMA Board has identified five key areas of focus for the next 24 months. These align with the TMA’s Mission, Values and goals, as well as to helping the City meet its SOV reduction and other environmental goals. The key areas are: Draft Business Plan Pg. 3 1. Program Development 2. Partnership 3. Advocacy 4. Information & Outreach 5. Sustainable Budget These objectives are important individually and collectively, as part of how the TMA will influence and directly enable aggressive reductions in SOV commute patterns. The TMA has further quantified behavior changes by setting specific mode shift goals: Number of Commuters Mode Shift To 1,000 Transit (Caltrain, VTA, Samtrans, Dumbarton Exp) 300 Carpooling and other first/last mile shared ride services 100-150 City, Stanford, other shuttle systems 100-150 94303 and other low income zip codes with peak/non-peak schedules 50 Other (Walk, Bike, Telecommute) The ability to reach these aggressive goals depends on wide variety of factors, many some of which are beyond the TMA’s control. They include:  The overall state of the economy, downtown business climate and ‘mix’ of businesses  The evolution of ‘personal mobility’ options and technology  The integration of modes and ease of use by commuters (i.e., coordinated transfers)  The availability and capacity of alternative modes (i.e., Caltrain at capacity)  The cost of using alternative modes  The availability of funds to support TMA activities and programs, including the level of short- term investment for incentivizing and then sustaining behavior change  Parking management policy: availability and pricing of downtown parking facilities Draft Business Plan Pg. 4 Summary of Objectives Objective: Programs and Services. Provide access to, subsidies, and other incentives to use public transit, ridesharing, and non- vehicular modes (walking and biking) for downtown employees who currently drive alone. Highest Priority: Provide Caltrain and VTA passes for employees who work for companies not eligible for transit bulk pass programs, who live in targeted areas where transit availability is good, and for whom the cost of taking transit far exceeds the cost of driving and parking. Secondary: Employees for whom taking public transit is not a viable option but carpooling or other programs are a viable alternative. How success will be measured: End Achievement: Reduction in SOV rate and an increase in use of public transit, carpooling and other first/last mile solutions. Until policy and pricing changes are implemented that make taking transit affordable for workers at small companies, other incentives are needed to make transit competitive with the cost of driving and parking. The TMA’s advocacy objective addresses policy. Action: Transit Subsidy Goal: 700-1,000 employees Target: Employees in areas where access to and availability of frequent transit is good; where travel times and the cost of driving is competitive with transit. These employees will be given a full transit subsidy for an introductory period; a lesser subsidy for continued transit use and not buying parking permits after a specified period of time. Ultimately, the cost of an annual or monthly pass will eliminate the need for TMA-sponsored subsidies for all but ‘new’ users (i.e., new employees). This program reduces SOV trips, congestion, VMT, and demand for parking. Action: Carpool Subsidies Goal: 300-600 employees Target: Employees for whom taking transit is not an option who live within a 40-mile radius of downtown. Subsidize carpool rides taken to and from downtown during peak commute hours to incentivize both drivers and riders. Subsidies may gradually be reduced as flat rates are established by carpool vendors. This program reduces SOV trips, congestion, VMT and demand for parking. Action: 94303 and Other Low Income Zipcodes Goal: 100-150 employees Target: Employees who work a combination of peak and ‘non- peak’ hours in the hospitality industry who live in targeted zip codes lacking transit availability and other alternatives. These employees often speak Spanish and other languages; they may be able to use transit in one direction, but not in both. Work with IDEO to further research barriers and needs; work with rideshare vendors to develop a pilot (i.e., specialized hours carpooling/GRH) as well as the City’s shuttle network regarding hours and routes. Ultimately, the cost and availability of these Draft Business Plan Pg. 5 services will make using alternatives affordable and viable for this market niche. This program will reduce SOV trips, VMT, congestion and parking demand. Action: Other First/Last Mile Solutions (targeted zip codes) Goal: 100 employees Target: Employees working for companies who do provide GoPass or VTA but for whom getting to (and lack of parking at) a Caltrain or VTA station is a barrier. Work with Lyft and other rideshare and TNC vendors to develop a first/last mile subsidy to and from targeted Caltrain/VTA stations. Ultimately, as density builds (and expands beyond Palo Alto employees), rideshare services will provide ‘Lyft Line’ type flat pricing that will be self-sustainable for these users. This program will reduce SOV trips, congestion and parking demand. It will also increase the ROI on the GoPass investment for employers, making this program more sustainable. Action: City Shuttles Goal: 100-150 employees Target: Employees who live and work in Palo Alto who live along an existing or potential shuttle route. Also employees who live in Palo Alto who are outbound via Caltrain. Work with the City in evaluating and reconfiguring the shuttle network to be more effective in addressing commute needs for Palo Alto residents working in downtown or using Caltrain. Routes, hours of operation, frequency of service and travel times to and from downtown and other hubs will be reviewed. Ultimately, this program will help increase ridership and increase the ROI the City already makes in the shuttle system, decreasing per-mile and per-passenger costs and serving a wider market. This program will reduce SOV trips, congestion, and parking demand. Draft Business Plan Pg. 6 Objective: Advocacy The TMA will focus on two major policy areas which are inextricably linked to the effectiveness and cost of TDM measures: 1. Collaborate with Caltrain and VTA to create a new pricing policy and structure which allows smaller employers to participate in a discount transit pass program 2. Right pricing and sizing of parking for Downtown employees Both of these will require building consensus and coalitions of support; as well as developing ‘win- win’ solutions for all stakeholders, and are anticipated to take 1 to 3 or more years. Highest Priority: Working with the community to build support for the creation of a new pricing structure for small employers and using data from the TMA’s initial subsidy programs to inform policy. Working with the City’s Downtown Parking Management Study and participate in the Downtown Parking Committee, to develop parking management policies and new revenue streams. Secondary: Advocate to preserve and build existing services such as VTA Route 35; AC Transit Dumbarton Express and support other local, regional and national policies and measures which align with the TMA’s purpose and goals. How success will be measured: The adoption of a new fare structure/policy at Caltrain and VTA that creates parity and availability on a per-cost-per-pass basis for small employers with existing large employer bulk pass programs. Parking pricing, siting and availability in downtown Palo Alto which supports TDM measures, avoids the need to build new parking facilities, and ensures parking availability for shoppers and other visitors while minimizing the impacts of commuter parking on nearby residential streets. Availability, affordability, levels of service and the number of transportation mode options for downtown employees and residents; and programs and policies that support TDM downtown and beyond. Action: Advocate for a new fare policy/structure at Caltrain Process: Build a coalition of support (locally and regionally) for Caltrain to provide a new fare policy/structure that enables small employers to purchase discount annual or monthly passes either directly and/or through authorized ‘resellers’ such as TMA’s. Meet with Caltrain staff and elected officials to develop such policy recommendations; publicize and build public support for efforts. Ultimately, passage of a new fare structure will enable thousands of ‘new’ riders to utilize the Caltrain and VTA systems. ‘Fare parity’ for those working for small employers and in low wage positions, also addresses an important social equity issue. The end result will be the cost for the TMA to subsidize passes will be greatly reduced long term. Action: Process: Work with the City to explore the right mix of pricing, availability, location, structure and other components of an effective employee parking program. The TMA will participate Draft Business Plan Pg. 7 Advocate for ‘right pricing’ and ‘right sizing’ of parking for downtown employees on two City-sponsored committees: the Downtown Parking Management Parking Study (ad hoc) and Downtown Parking Committee (permanent). It will also work with the Chamber, BID and other organizations, inform through the TMA’s website and other communications means to get feedback and build support for new policies and programs which holistically address parking issues. Ultimately, parking is priced to discourage SOV commute trips yet provides for ‘occasional’ needs; demand for Residential Parking Permits by employees is reduced (and therefore the use of residential streets) and employee parking is accommodated in existing downtown parking facilities (both public and private). Paid, on-street parking is available for shoppers and visitors. A holistic parking management approach may also provide a source of ongoing and stable funding for the TMA. Action: Measure and Monitor Parking Process: Work with VIMOC to implement a pilot program which builds on the existing City pilot to measure parking utilization. This program will identify utilization patterns (and availability) in existing facilities that may be ‘repurposed’ for occasional parking, low income permit parking, etc. Ultimately, it is likely that more efficient utilization of existing parking resources, coupled with providing viable alternatives to driving alone, and pricing will eliminate the need to construct new parking facilities. Action: Advocate for the preservation of existing transit services; removing barriers to existing services (such as parking at Dumbarton Express hubs); funding for and expansion and better utilization of key services (i.e., electrification of Caltrain) and new pilots to test new technologies and modes. Advocate for TDM support policies such as tax-deductible subsidies, etc. Process: Work with local and regional transit providers in support of preserving key services; expanding services to better suit the needs of downtown employees and residents; and foster innovative pilots that test both new modes, technologies, and approaches to alternatives. This program is dynamic and will include a range of activities from participating on planning and advisory committees at transit agencies to ongoing education/information to the business community and showing support (or opposition) through letter-writing, presentations to elected officials and other means. It will respond to short term issues (such as potential service cutbacks and solving parking issues that impact the use of Dumbarton Express service) as well as play a proactive role in long term projects. Draft Business Plan Pg. 8 Objective: Build Strong Partnerships with the City and Downtown Employer and Residential Communities The community will understand how the TMA and its programs support important priorities such as decreasing congestion, reducing parking demand on residential streets, and supporting downtown merchants. The community will have ample opportunities to interact with the TMA: to learn about programs and services; provide feedback on an ongoing basis; and participate in the development of new activities. How success will be measured: Downtown neighborhood and business associations, committees and stakeholders will be knowledgeable and supportive of the TMA and its work and the TMA will receive positive press coverage. The TMA website will be a well-utilized resource for the community at large; the feedback mechanisms from this and other public-facing activities will be positive. While the primary focus will be the downtown area, the TMA will extend these efforts, as resources allow, to other parts of the City. Action: Form an Advisory Group by July, 2016 Purpose: The purpose of the Advisory Group is to be engaged in TMA discussions at Board meetings, help to reach out and inform the local residential communities of what the TMA is doing and achieving; provide feedback, support and advocacy. Advisors will be a small group of five representing a variety of downtown stakeholders: a resident who is an outbound commuter; a resident who works downtown; one representative each from Professorville and a North neighborhood and one non-downtown resident who either works downtown or is an outbound Caltrain commuter. The TMA will publicize an application and process; Advisors will be selected by the TMA Board from this process. Action: Meet with the BID, Chamber and others on a regular basis to keep them informed about TMA programs and results. Purpose: To keep the community informed about what the TMA is doing; results of our programs; discuss new challenges and opportunities and provide another mechanism for feedback and participation. The TMA will meet with the BID at least twice a year; it will make presentations to the Chamber membership twice a year and attend and participate in Chamber and/or community events at least quarterly. Action: Participate in local events when requested; representation on transportation-related committees (City and/or other) Purpose: In keeping with the TMA’s goal of being a transportation resource for the community, it will participate in special events and serve on issues-related committees. Stanford Alumni Association’s annual “Beyond the Farm” event focused on the transportation needs of seniors in Palo Alto. Draft Business Plan Pg. 9 The TMA facilitated. The City has also requested the TMA’s participation in its Downtown Parking Management Study. Action: Request a Council Liaison to the TMA and Two Council Workshops Purpose: Keeping City Council apprised of the TMA’s progress and supportive of our efforts is key to the TMA’s success. The TMA will request a Council liaison who can attend Board meetings and/or meet with the TMA on a quarterly basis. The TMA will give the Council updates twice a year, through a “Workshop” format and attend Council meetings as they relate to TMA programs, funding, or other matters throughout the year. Action: Public Relations Purpose: The TMA will develop a relationship with local reporters as well as the City’s public information officer to make sure that these two conduits are well-informed and have accurate information. Draft Business Plan Pg. 10 Objective: Outreach. Provide high quality information to those who need it. TMA programs and services are creatively branded. Highest Priority: Downtown Employers and employees; visitors and residents Secondary: Other downtown stakeholders; transit agencies and other transportation providers, and the general public How success will be measured: Growth in the number of visits to the TMA website; time spent and number of pages visited Requests for more information or assistance At least x% of all downtown employers aware of the TMA and what services it provides within 2 years. At least xx% of downtown employers with 50+ employees agree that the TMA provides valuable information and services to them within two years Number of employers taking action as a result of interaction with the TMA Number of employees helped through information and trip planning assistance Positive publicity in local papers, social media, business newsletters, etc. Action: Website Purpose: Create an online resource to provide news and information; ‘how to’s’; and calculators to easily illustrate transportation choices and costs for employees and residents. An employer section outlining employer programs will complement the ‘general public’ site. Action: Transit Screens: Purpose: Transportation choices and accessibility in real time are ‘ubiquitous’ throughout Downtown and reinforce other marketing efforts. Placement of 2-3 transit screens in high foot traffic areas showing real-time transit information; bike-share availability, shuttle and other mode options will build awareness of multiple modes and choices; special incentive programs, etc. Action: Outreach to Large Employers Purpose: Encourage 16-20 ‘large’ employers to offer bulk transit passes to their employees; pre-tax transit payroll deductions and other programs. Work to develop and refine other programs in response to specific needs and interests by this market niche, which represents those most likely to affect and support behavior changes. Action: Publish a monthly e-newsletter Purpose: Keep employers well informed about transportation issues and TMA programs and services. Create awareness and establish TMA as a valuable resource. Promote specific programs (i.e., the City’s bike rack program) both TMA and non-TMA; inform and provide opportunities for input on issues and programs (local, regional). Action: Develop Print Material for Employers Purpose: Educate employers of all sizes what they can do; illustrate “ROI” and motivate to participate in a range of programs appropriate to their business. This collateral can be sent to employers; used by TMA staff in meetings with employers; as part of public presentations, etc. Draft Business Plan Pg. 11 Action: Develop Print Material for Employees on Current Programs Purpose: To reach every type of employee from service to tech worker; educate about the range and cost of various commute options; how to get help and promote specific ‘offers’. This piece will be updated regularly and published in at least two languages (English/Spanish); and distributed to all downtown employers. Action: Hospitality and Restaurant Worker Outreach Purpose: Reach service workers who commute at least in one direction in non-peak times (i.e., arrive in PM peak but leave late night) and who live in specific areas of density (i.e., 94303). The size of this market warrants specific outreach and program development. Action: Advertising in local newspapers Purpose: To reach residents and others beyond the downtown community to promote programs available to the general public; inform, etc. Objective: Budget. Establish a realistic two-year start-up budget. Identify stable, permanent sources of funding for ongoing operations and incentive programs post-start up. How success will be measured: TMA Board adoption of a Two Year Business Plan and budget with City support by July, 2016. TMA obtain long-term, ongoing funding agreements and other commitments within two years. Action: Develop Two Year Business Plan Purpose: Provide a roadmap for TMA’s first two years of operation with mutually agreed upon goals, strategies, evaluation metrics, and public participation levels and funding. This will enable the TMA to launch programs, begin to show results, and work towards long-term, sustainable programs and funding solutions with the City and other partners. Action: Research and meet with Foundations, other potential funders Purpose: Gain long term financial support for key elements of interest to the private sector: social equity; environmental sustainability; health; economic resiliency and changing modes, technology, and demographics. This will enable the TMA to diversify funding streams; to develop programs and test outcomes for specific niche markets, and provide for long-term planning and relevance. Action: Pursue management agreements Purpose: TMA’s typically market and manage programs on behalf of cities and other public entities: shuttles, parking, and public information are examples. This provides an ongoing and stable level of financial support for TMA overhead and other ongoing expenses that ensures the quality of program delivery. Draft Business Plan Pg. 12 Budget Planning Background and Rationale Downtown Palo Alto is at a critical juncture. Because the cost of driving and parking is by far the most ‘affordable’ as well as convenient option for many employees, significant incentives – or ‘carrots’ – are needed to change behavior. The vast majority of the 854 downtown employers are small and cannot afford additional costs of doing business such as subsidizing employees’ commutes, whether by transit or other means. The nature of retail and service businesses precludes alternatives such as telecommuting, and hours of operation require many employees to commute in peak periods in at least one direction. The TMA is optimistic that longer term, we will effect a change in policy regarding discount fare structures from transit providers such as Caltrain which will make transit affordable with little or no subsidy from the TMA. Once we have attained the initial reductions in SOV commutes, full subsidy programs can be limited to ‘new’ employees (and at a greatly reduced cost from today’s pricing). In the interim, however, significant investments must be made to bring about parity, while at the same time, realigning parking availability, location, and pricing and creating more holistic home-to-work options. The table below illustrates the disparities in the current pricing structure for Caltrain and VTA. Caltrain Individual Monthly Individual Annual Go Pass Annual Proposed Bulk Annual Proposed Bulk Monthly Zone 1 $84.80 $1,017.60 $190.00 $600.00 $50.00 Zone 2 $137.80 $1,653.60 $190.00 $600.00 $50.00 Zone 3 $190.80 $2,289.60 $190.00 $600.00 $50.00 VTA Individual Monthly Individual Annual 1-99 Employees Annual 100-2999 Employees Annual 3000+ Employees Annual Eco Pass $70.00 $770.00 $72.00 $36.00 $32.40 Eco Pass Plus $140.00 $1,680.00 $93.60 $54.00 $32.40 The TMA’s 2015 downtown employee survey revealed that a good portion of workers who drive alone are open to using an alternative. Providing the financial incentive to use transit is a key step, but it is not a ‘silver bullet.’ Even with free or heavily subsidized transit fares, using transit can be a complex undertaking. The lack of parking at many Caltrain stations presents a major barrier. The lack of coordination (poor frequency, total travel time required and cost) with other systems (i.e., taking a VTA local bus to a Caltrain station) is another obstacle. VTA is piloting new programs that address some of these issues that the TMA will explore as part of its transit and ‘first mile’ solutions. We will also develop other ‘first’ mile solutions with other rideshare services to eliminate barriers and make using alternatives more appealing. The investment to incentivize and enable behavior shift that reaches the 30% goal in the short term is costly in the early year(s) until changes in fare policy and our initial goals are met. It will cost between $1 million and $1.5 million annually. At the low end, we are investing approximately $606 annually ($50 Draft Business Plan Pg. 13 per month) per person; at the high end, $909 per person (about $75/month) to reach a goal of reducing SOV trips by 30%. It should be noted that investment is far less expensive and solves today’s problems much more quickly when compared with the cost to construct a new parking space – estimated at $60,000 per space in a structured facility. Over 30 years, the annual costs of each space is approximately $2,000 excluding financing, operations and maintenance. It already costs $462 per space to maintain existing parking spaces. Of equal importance is that building more parking capacity is antithetical to the City’s sustainability goals and desire to retain its small town ambience. Building satellite parking will require more transportation services (and costs) to link parking with end-destinations. Even with frequent connections, satellite parking adds significantly to the ‘total commute time’ for many employees and may therefore, not be highly utilized. Long-term, if transit pricing structures change, the need for fully subsidized transit and other modes from the TMA will be greatly reduced, and with those reductions, the TMA can invest in expansion and/or new modes of transportation, technology and other activities that continue to make using alternative forms of transportation the preferred way to get around Palo Alto. The budgets outlined on the following pages offer several scenarios which illustrate how various levels of investment affect the ability to reach the end goal of reducing 1650 drive alone commuters. Option 1 uses current transit pricing available to us (no discounted rates) and represents a full- on campaign for incentivizing 100% of our targeted 1,650 employees annually. Option 2 reaches the same 1,650 employees, using a proposed new bulk discount rate, which saves over 50%. Option 3 reaches half of our targeted transit employees using current transit pricing (no discounted rates), with the same budget for subsidies as Option 2. Option 4 also uses current transit pricing and reaches 20% of our targeted transit employees. While the ratios of investment in various transit types may change depending on demand and other factors, the draft budgets provide a framework from which to plan sustainable budgets and performance expectations. They also provide a basis for evaluating a range of potential funding strategies that can generate the necessary revenues for transportation demand management to be successful both short term and the long term. DRAFT Budget Scenarios Palo Alto TMA Revised5/23/2016 Reaches 30% SOV Reduction in 3 or 5 Years (5 years is slower ramp up)A 30% reduction = 1,650 Commuters Three Years to Reach Goal # Empees in Progs Cost of Subsidies # Empees in Progs Cost # Empees in Progs Cost Cost Detail: 2016 pro-rated for 6 mths Carpooling 100 6,000$ 300 10,000$ 800 15,000$ Transit/Person/Yr @ $140/mo 1,680$ Transit 50 42,000$ 350 588,000$ 500 840,000$ $3.50/trip based on 20 days/mo First Mile 50 40,600$ 150 243,600$ 150 243,600$ First Mile/Person/Yr 1,624$ Other (walk, bike, shuttle)0 25 200 $3.38/trip based on 20 days/mo Total Subsidies 200 88,600$ 825 841,600$ 1650 1,098,600$ Subsidies 2,028,800$ TMA Operations Budget 31,600$ 159,000$ 199,800$ Operations 390,400$ Total TMA Expenses/ Yr 120,200$ 1,000,600$ 1,298,400$ Total 2,419,200$ Five Years to Reach Goal # Empees in Progs Cost of Subsidies # Empees in Progs Cost # Empees in Progs Cost # Empees in Progs Cost # Empees in Progs Cost Carpooling 100 6,000$ 250 10,000$ 500 15,000$ 650 15,000$ 800 15,000$ Transit 50 42,000$ 100 168,000$ 200 336,000$ 250 420,000$ 350 588,000$ First Mile 50 40,600$ 75 121,800$ 100 162,400$ 125 203,000$ 350 568,400$ Other (walk, bike,shuttle)0 25 200 200 200 5 Yr Totals Total Subsidies 200 88,600$ 450 299,800$ 1000 513,400$ 1225 638,000$ 1700 1,171,400$ 2,711,200$ TMA Operations Budget 31,600$ 159,000$ 199,800$ 210,730$ 210,491$ 811,621$ Total TMA Expenses Per Yr 120,200$ 458,800$ 713,200$ 848,730$ 1,381,891$ 3,522,821$ Key Elements and Assumptions: 1. Carpooling incentive is $1 per ride. TMA subsidizes actual costs above that. 2. Transit budget covers 100% of a 2-Zone Caltrain or Dumbarton Express monthly pass. Based on current 'retail' pricing (no discounts) 3. First Mile budget covers $3.38 per 1-way trip to or from selected Caltrain stations for GoPass holders or workers from East Palo Alto 4. Assumes shuttle service reconfiguration will serve workers from East Palo Alto and other areas of Palo Alto by 2018 plus gains in walking and biking Based on $100,000 Annually for Programs -- Does not reach 30% SOV Reduction Three Years # Empees in Progs Cost of Subsidies # Empees in Progs Cost # Empees in Progs Cost Carpooling 100 6,000$ 300 10,000$ 800 15,000$ Cost Detail: 2016 costs pro-rated for 6 mos Transit 100 42,000$ 15 12,600$ -$ Transit//Person/Yr @ $70/mo 840$ First Mile 50 40,600$ 0 -$ 0 -$ $1.75/trip based on 20 days/mo Other (walk, bike, shuttle)0 -$ 25 -$ 200 -$ Transit subsidy for VTA, SamTrans, 1-ZoneCaltrain Total Subsidies 250 88,600$ 340 22,600$ 1000 15,000$ Subsidies 126,200$ First Mile/Person/Yr 1,624$ TMA Operations Budget 31,600$ 159,000$ 199,800$ Operations 390,400$ $3.38/trip based on 20 days/mo Total TMA Expenses/ Yr 120,200$ 181,600$ 214,800$ Total 516,600$ 3 Year Totals 2019 - 22% SOV Reduction 2016 - 3% SOV Reduction 2017 - 6% SOV Reduction 2018 - 18% SOV Reduction 2020 - 30 % SOV Reduction 2016 -3% SOV Reduction 2017 - 15% SOV Reduction 2018 - 30% SOV Reduction 2016 - 3% SOV Reduction 2017 - 8% SOV Reduction 2018 - 18% SOV Reduction 3 Yr Totals Attachment D DRAFT Operations and Revenues Projections Palo Alto TMA 6/2/2016 Line Item 2016 2017 2018 2019 2020 Notes Management*‐$             110,000$       113,300$      117,000$      120,000$      Hires ED in 2017.  3% increases annually after Office Rent ‐$             12,000$         12,600$        13,230$        13,891$        Assumes 5% increase annually Office Supplies 2,000$         2,000$           2,000$          2,000$          2,000$           Insurance 5,600$         6,000$           6,400$          6,500$          6,600$           Legal Fees*‐$             ‐$               ‐$              ‐$              ‐$              Fees to file with IRS for 501C3 status Fiscal sponsor fees 16,500$      16,500$         16,500$        16,500$        16,500$        SVCF fees based on current contracts Employee Survey*‐$             ‐$               36,000$        37,000$        38,000$        Annual survey; may be replaced with other data  Website design and logo*‐$             ‐$               ‐$              5,000$          ‐$              Assumes website redesign (slight) in 2019 Website hosting and maintenance*‐$             2,500$           2,500$          2,500$          2,500$           Graphics and printing*‐$             2,500$           2,500$          2,500$          2,500$          Employer, employee branding collateral in 2016 Transit Screens (2)7,000$         7,000$           7,500$          8,000$          8,000$          2 locations Misc.500$            500$              500$              500$              500$               *Costs in 2016, part of 2017 thru existing contract Total TMA Operations 31,600$      159,000$      199,800$      210,730$      210,491$       Revenue Projections 2016 2017 2018 2019 2020 Notes Directors' contributions 35,050$      37,550$         37,600$        40,150$        40,200$        Adds med Dir in 17 & 19;  1 small in 18 & 20 Private contributions 30,000$      ‐$               ‐$              ‐$              ‐$               City Funding Agreement (2016, 2017) 100,000$    100,000$       ‐$              ‐$              ‐$               Other Total Revenues 165,050$    137,550$      37,600$        40,150$        40,200$         TMA Operations Only Surplus (Deficit)133,450$    (21,450)$       (162,200)$    (170,580)$    (170,291)$     Potential Revenue Sources: Grant funding from government/public agencies (i.e., BAAQMD, VTA, City, County, federal/state) Parking revenues (i.e., $1/day from existing garage parking permits, other potential new parking fees) Service contracts (many TMA's have service contracts with cities and others to market and/or manage TDM programs) Private donations  Business tax or other Downtown assessment  Participant fees (i.e., nominal charge emloyees pay to receive benefits) Attachment E DRAFT Operations and Revenues Projections Palo Alto TMA 6/2/2016 CITY OF PALO ALTO OFFICE OF THE CITY CLERK June 13, 2016 The Honorable City Council Palo Alto, California Independent Police Auditor's First Report- 2015 Attached you will find the Independent Police Auditor's First Report- 2015. ATTACHMENTS:  Attachment A: 06-13-2016 Palo Alto OIR 2015 Part One Final (PDF) Department Head: Beth Minor, City Clerk Page 2 1 OIR GROUP www.oirgroup.com INDEPENDENT POLICE AUDITOR’S FIRST REPORT - 2015 Presented to the Honorable City Council City of Palo Alto June 2016 Prepared by: Michael Gennaco and Stephen Connolly Independent Police Auditors for the City of Palo Alto Michael.Gennaco@oirgroup.com Stephen.Connolly@oirgroup.com 2 I. Introduction This reports addresses materials received by the Independent Police Auditor (“IPA”) for review in the first half of 2015. Per an oversight protocol established by the City of Palo Alto in 2006, the Palo Alto Police Department (“PAPD”) sends completed cases to us from within three categories: complaint investigations, internally generated misconduct investigations, and reviews of Taser deployments. We then evaluate those cases for both the effectiveness of the process and the legitimacy of the results; where applicable, we also offer recommendations to the Department regarding best practices and systemic reforms. The report features a discussion of eight cases and one use of the Taser to apprehend a burglary suspect. II. Case Reviews Case # 1 Factual Overview: A citizen complained after receiving a citation for throwing a lit cigarette to the ground while he was standing next to his vehicle. The citizen believed that the citation should be dismissed and complained that the officer did not tell him what would happen if he did not sign the citation and threatened him with arrest. While the throwing of the cigarette was not captured on video, the subsequent conversation between the officer and the citizen was recorded by the officer’s body-worn camera. According to the complainant, he did not intentionally throw the cigarette onto the ground; rather, he claimed to be waving at the officer in a way that caused the cigarette to accidentally fly out of his fingers. This explanation however, was not made at the time of his initial encounter with the officer. With regard to the subsequent and disputed conversation about signing the citation, the body camera recording indicates that when the complainant asked what would occur if he declined to sign, the officer said that he would be required to take him to jail until the complainant could see a judge. This procedure is a correct statement of current procedure in the County should an individual not agree (by signing) to appear in response to the citation summons. There is no evidence that the officer “threatened” him with arrest. At court, it was determined that the citizen was in violation in accord with the citation. Outcome and Analysis PAPD determined that the complaint was meritless and found the officer’s actions to be within Departmental policy. 3 The investigation into the complaint was thorough, and important documents, video, and audio evidence were identified and included with the investigation. The analysis of the evidence was also thorough and complete. Two procedural aspects of the matter are worthy of further discussion, however. The first relates to the initial intake interview. As documented by the investigating sergeant, when the complainant first arrived at the station, the sergeant indicated that he watched the body camera footage of the encounter with the complainant and informed the complainant that he did not see anything inappropriate by the officer. In part, as a result of that exchange, the complainant later said that he had some concerns about whether his complaint would be taken seriously. When police interviewers opine early in the investigative process about the appropriateness of the officer’s conduct, such statements can seem premature and message to the complainant that there is already a predestined result, undermining confidence in the Department’s process. Worse, they can give an impression of defensiveness or a “home court advantage” that might cause the complainant to doubt the investigation’s fairness or objectivity. Even well intentioned attempts to clarify or defuse misunderstanding can create this dynamic. Accordingly, investigators should generally refrain from making any statements to complainants about the appropriateness of the subject officer’s conduct until the investigation has been completed. We recommend that PAPD remind their supervisors of this important premise. Recommendation: PAPD should brief their supervisors about the importance of maintaining objectivity during the complainant interview, and avoiding opinions or conclusions about the allegations at this initial stage of the process. Second, when the complainant was interviewed at the station, he was only audiotaped by the sergeant’s body-worn camera even though video capability was present. It is recommended that interviewers take full advantage of the body worn camera system and video and audio tape complainant interviews unless there are special circumstances that warrant deviation. Recommendation: Unless there are unusual circumstances, complainant interviews should be video and audio taped using Department issued body-worn cameras. Case # 2: Factual Overview: The complainant, a medical doctor at a local hospital, received a citation from a PAPD traffic officer for “texting while driving.” According to the body-worn camera recording of the incident, she attempted to dissuade the officer during the stop itself by asserting that the texts were work related and of an emergency nature. The officer asked to see the phone to corroborate 4 the claims, and she provided it. After reviewing the texts, he went ahead and cited her. She asked repeatedly for a warning instead, and the officer eventually raised the possibility of a second citation for her refusal to cooperate with the ticketing process. She then provided her information as requested and received the ticket without further incident. Her subsequent allegation was that the officer should not have cited her in light of the “physician emergency” that was the subject of the texts. She also believed it was inappropriate for the officer to review her phone’s contents, given the laws regarding confidentiality of medical records. Finally, she resented aspects of the officer’s demeanor and thought the reference to the potential second ticket was inappropriate. Outcome and Analysis: The Department was able to rely on a body-worn camera recording of the incident, as well as interviews with both the complainant and the involved officer, in conducting its investigation.1 It ultimately determined that the allegations were unfounded, and we concur. Especially given the existence of the recorded evidence, the disputes here seem to be less factual than matters of perception and officer discretion. The officer’s review of the texts in response to her assertions seems like a reasonable step, and a potential precursor to excusing her. Though the legal sensitivity of the medical information occurred to her later, and though she also later claimed that she felt as if could not have refused the officer even if she wanted to, the technical truth is that he did only ask to see the phone. The complainant’s stated resentment of the officer’s “smirks” and intractability are similarly understandable but seemingly more a matter of perspective than policy. As with the previous case, the intake interview did feature extensive commentary by the handling supervisor about the evidence within the video, applicable laws, etc.2 Again, while these statements were accurate, they merit consideration by the Department from a tactical and public relations perspective. It should be noted that the interviewer’s tone is unfailingly patient and respectful. However, there is a fine line between offering constructive, informative explanation and indirectly discouraging someone from formalizing a complaint. Even when the complainant follows through, as this doctor did, the preliminary dialogue could easily raise questions about the objectivity – and legitimacy – of the final result.3 1 The camera footage apparently begins shortly after the interaction at the driver’s window has begun. This does not end up having a significant impact on this case, given the nature of the facts that everyone agrees upon. However, it is obviously preferable to create a complete recording where possible. 2 As with the previous case, the Department’s recording is audio only, with the camera pointed at the ceiling of the interview room. 3 In fact, the complainant does at one point in her interview state that she feels as though the supervisor is taking the officer’s side. 5 PAPD generates very few formal citizen complaint investigations each year. While we have no reason to doubt that this is partly a reflection of effective performance and positive community relations, the “screening process” that occurs at intake may also be a factor. Such an approach has its advantages, including efficiency and protecting officer’s employment records from clearly frivolous claims. But other departments deal with this phenomenon in ways that do not create potentially problematic incentives for supervisors who are entrusted with the initial interviews of disgruntled citizens. Better perhaps, to at least initially accept the complaint on its face, and complete the subsequent fact-finding as needed. There is always time for further dialogue and explanation at a later point, in those cases when further communication has the potential to be beneficial. Recommendation: PAPD should evaluate its process for initial intake and assessment of citizen complaints, so as to ensure that supervisors do not inadvertently deter citizens or create an impression of initial bias. Case # 3: Factual Overview: This citizen’s complaint involved an allegation that the citizen was inappropriately arrested for being drunk in public. On the date of the incident, the involved officer detained two individuals outside a drinking establishment. The detention revealed that one of the individuals had an outstanding arrest warrant. The second individual, who ended up being the complainant, was allowed to leave the area at the direction of the officer. Shortly thereafter, the complainant returned to the arrest location and took custody of the backpack of the arrested individual. The complainant again returned and indicated that the person who was to take custody of the backpack had left the bar. At that point, the involved officer told the complainant he needed to leave the area or be subject to arrest for being drunk in public. The complainant questioned the officer about why he needed to leave at which time the officer arrested him for being drunk in public. The citizen alleged that he had not met the elements of the offense for which he was arrested. Outcome and Analysis: Because of resource issues, the investigation was assigned to a retired member of PAPD. The investigation was extremely thorough and consisted of reviewing video and audio evidence of the incident and conducting interviews of relevant witnesses The investigator determined that while the complainant was under the influence of alcohol on the night of his arrest, that fact alone did not provide sufficient cause for him to be arrested for being drunk in public. The investigator noted that in addition to being intoxicated, a 6 drunk in public charge requires probable cause to believe that the individual is unable to exercise care for his own safety or the safety of others. Because the police report and audio evidence reported that the officer had indicated to the complainant that if he left the arrest area he would not be arrested, it belied any evidence that the officer had reason to believe that he could not exercise the proper amount of care for his own safety or the safety of others. The investigator also noted that the video evidence showed no sobriety tests being performed on the arrestee and the police report similarly did not indicate that such tests had been performed. In addition, the officer did not document the level of intoxication or any other information suggesting an inability of the arrestee to care for himself on the back of the pre-booking information sheet which is where such information is to be documented. Instead, in this arrest package that section was left blank. In addition, the investigator reviewed additional arrest reports of the involved officer and other PAPD officers to determine whether other drunk in public arrests were similarly lacking in documented indicia of the arrestees’ inability to care for themselves and found that other arrests had been supported by such documented evidence. The investigator accordingly concluded that while the complainant could have been arrested for delaying or obstructing the officer’s investigation of the individual, the “drunk in public” charge for which he was arrested was inappropriate. PAPD concurred with the recommendations and found that the officer had inappropriately arrested the complainant for being drunk in public and held the officer to be in violation of the City of Palo Alto Merit Rules. PAPD also appropriately examined the conduct of the on duty supervisor who approved the arrest and who had contact with the complainant prior to being booked, but before an assessment of that performance could be concluded, the sergeant had left the employ of the Department, making any accountability or remedial action moot. Additionally and importantly, PAPD recognized the importance in providing first level supervisor and officer training with regard to the appropriate use and application of the drunk in public and officer obstruction charges. As a result, Department-wide officer and supervisor training were provided on these issues as a result of this incident. Case # 4: Factual Overview: PAPD was advised that a City official had concerns about conduct by one officer who had been involved in the stop of the official for a minor traffic violation. The official indicated that during the stop, the officer had raised issues about the extenuated contract negotiations currently occurring between the City and the bargaining unit of the officer, and the resulting financial difficulties the officer was facing. To its credit, even though the official was not 7 desirous of filing a formal complaint against the officer, PAPD determined that the allegations were sufficiently serious to warrant an internal investigation. As a large result of partially recorded video from the patrol car video camera and audio from another on scene officer’s recording of the interaction between the official and the involved officer, PAPD determined that the officer had inappropriately raised issues with the official that were not related to the reason for the stop and which resulted in an unnecessarily extended length of detention. PAPD further determined that the involved officer was in violation of the Department’s mobile audio video policy because the officer had failed to wear his microphone during his encounter with the City official. The investigation into this matter was thorough and PAPD appropriately held the involved officer accountable for his violations of Departmental policy. Most importantly and consistent with best internal investigative practices, as noted above, once PAPD was alerted to the concerns about the officer’s conduct, it determined to proceed with an investigation into that conduct so that the facts could be gathered and accountability could ensue should those facts indicate performance contrary to Department guidance and policy. Case # 5: Factual Overview: This case involved a citizen complaint against both a PAPD traffic officer and the supervisor who assisted in his detention and citation. The incident began when the officers observed the citizen driving his car in disregard of signs and closures relating to traffic controls for the area near Stanford University. The violation occurred near the end of a scheduled home football game, and the officers were assigned to assist with the orderly flow of traffic and pedestrian activity. The traffic officer conducted a vehicle stop, and the driver immediately expressed his need to leave in order to pick up visitors who were waiting for him. The driver was not from the area, and was apparently confused by the gap between his GPS directions and the temporary, event-specific lane restrictions. At one point during the detention, he decided to exit his car in order to take pictures of the intersection and document his perspective. However, this required him to ignore repeated instructions to get back in his car. Ultimately, and after being warned, he was arrested for obstructing the officers in the performance of their duties. He was handcuffed and seated on a bench. After approximately 12 minutes, the handcuffs were removed and the rest of the stop continued without incident. The officers gave him separate citations for the traffic violation and the criminal offense, and allowed him to leave. 8 The complainant contacted PAPD a few days later to assert that the officers had shown “unnecessary brutality” and excessive force in their handling of the incident. He claimed injuries to his wrists and arm in conjunction with being handcuffed. Outcome and Analysis: PAPD conducted a thorough investigation into these allegations. It determined that the officers had been acting in accordance with PAPD policy and procedure throughout the encounter, and that there was no evidence to suggest that their acknowledged physical contacts with the complainant had been excessive or had risen to the level of actual force. We concur with these findings. The Department was able to rely on body-worn camera footage as well as statements from the complainant, the involved officers, and a third-party officer from another agency who observed part of the detention. The IPA also had access to the footage, which clearly shows the complainant failing to follow the clear and repeated instructions and warnings by the officer who ultimately decided to arrest him. Indeed, few of the key facts are in dispute. The complainant acknowledged his conduct, but believed that the officers should have been more responsive to the inconvenience entailed by his detention. Additionally, from his perspective, it was simply a common sense gesture to want to photograph the scene. When he moved away from the officer in lieu of returning to his car as asked, he believed this was less threatening than turning back towards him. The major point of factual contention is the severity of the injuries. Though he did not go to the hospital that day out of “laziness,” the complainant asserted that he had been in a great deal of pain, and offered pictures showing the alleged damage to the skin on his wrists. The injuries were not, however, visible at the time of his in-person interview at PAPD (which was approximately three weeks later.) Moreover, nothing about the recorded evidence suggests that the handcuffing was resisted or painful, and this was confirmed by the observations of the assisting officer from another agency. On the contrary, the PAPD personnel seem to realize that the complainant, while somewhat single-minded and uncooperative, was not a physical threat. It was at the supervisor’s initiative, after receiving assurances from the complainant, that the handcuffs were ultimately removed prior to the end of the incident. In sum, the investigation revealed that PAPD handled this incident appropriately and professionally. Case # 6: Factual Overview: This case stemmed from a traffic stop in 2014 that led to the arrest of the driver for both evading a lawful detention (by driving away) and resisting/obstructing an officer in the 9 performance of his duties. It was initiated by Department management after concerns arose about the legitimacy of the stop, the officer’s handling of the stop’s particulars, and the accuracy of the subsequent reporting. In the early morning hours, the PAPD officer ran a check on the suspect’s license plate and determined that two minor warrants were associated with it. He attempted to initiate a traffic stop, but the car continued at normal speed for several seconds before turning into an apartment complex and reaching a dead end, at which point the officer approached the vehicle and made contact with the occupants. The car had a male driver and female passenger. After several contentious verbal exchanges, and the arrival of backup officers, the suspect was handcuffed and taken into custody. The District Attorney’s Office ultimately rejected the case for filing, and in his write-up the handling prosecutor ‘s bases for not filing included remarks about gaps between the written reports and the video evidence as well as issues with the lead officer’s demeanor. By this point, PAPD had initiated an investigation based on its own issues with the case. The subjects were the arresting officer and the supervisor who had arrived at the scene, approved the arrest, and participated in the report review process. Outcome and Analysis: The Department’s investigation was meticulous, thorough, and effective in identifying and resolving the various issues arising from the incident. It included several interviews of witness officers and extensive review of the available recordings; it also involved finding and interviewing the suspect – who had not filed a complaint. The Department found that both subjects had violated policy in their handling of their respective responsibilities. We concur with that result. The investigation determined persuasively that the arresting officer had been at fault in his assertive, discourteous interactions with the driver and in the inaccurate characterizations that his report contained. Though the arresting charge of “evading” was properly amended to the more justifiable “failure to yield,” even that relied on information that was misleading or mistaken. In fact, the investigation described multiple instances in which the MAV recording did not support the description of events in the report narrative. (One example was the length of time it took for the car to stop after the officer activated the patrol vehicle’s rotating lights.) Moreover, the performance deficiencies were sufficient to warrant formal discipline. The same is true for the involved supervisor, who was at the scene for only a short time and made little effort to flesh out the officer’s assertions and ensure that things were being handled appropriately. The investigation also revealed that he left it to another, lower-ranking officer to review the completed report; it was this officer’s concerns that led to further review and the substitution of the lesser (and more appropriate) criminal charge. Even then, problems remained: the supervisor noticed a clerical error on the amended report and “fixed” it himself – 10 incorrectly – rather than returning it to the officer for final edits. The Department correctly determined that the sum of these lapses amounted to inadequate job performance for a supervisor, and issued discipline accordingly. As concerns about the “quality control” issues of this arrest were reinforced by the review of evidence and the ongoing internal investigation, the Department took an important additional step. It conducted a further assessment of earlier arrests by the involved officer to rule out a pattern or practice of similarly questionable exercises of discretion. It determined that no such pattern existed, but the pro-active investigation was forward thinking and industrious, and we endorse the Department’s initiative in this regard. Vehicle Pursuit Reviews and Policy Violations (2 Cases): While reviewing car video in response to an unrelated complaint, a high level member of PAPD’s command staff identified a video recording of a PAPD officer apparently involved in a vehicle pursuit. Further check of the related materials located a transmission by the officer of observing a “failure to yield” motorist, but did not locate any radio transmission of a pursuit by the officer. PAPD policy requires officers involved in vehicle pursuits to notify their supervisor so that the pursuit can be monitored and terminated if the pursuit is not authorized or too dangerous. As a result of this discovery, and to its credit, PAPD initiated an internal investigation into the incident. Based on the mobile car video and radio transmissions, the investigation revealed not only that the officer had failed to notify that he was involved in a pursuit, but that the traffic violation that was the basis for initiating a pursuit did not justify doing so and that the officer’s driving during the pursuit was without due regard and caution for the safety of all persons using the highway, including passing vehicles on their right while continuing to activate his emergency equipment. In addition to discipline, the officer also received additional training and a period of increased monitoring to ensure a comprehensive PAPD remediation program. The investigation into this incident was thorough and objective and the concerted combination of discipline, training, and monitoring demonstrated the Department’s interest in accountability and remediation. The investigation also proved the value of the mobile activated car videos as fact-finding tools. Finally, and most importantly, once the PAPD command level individual discovered the potential violation of policy, even though he was making inquiry into an unrelated matter, his decision to order an investigation into the unrelated violation was consistent with best practices and police accountability. Similarly, in the second case, a supervisor’s comprehensive review of pursuit information for purposes of his own reporting caused him to become aware of another officer’s inappropriate driving. That officer’s in-car camera showed that, in responding to radio traffic about a stolen car (which would ultimately be involved in a pursuit with law enforcement), he made the decision to move at high speed, and without lights and sirens, in order to provide assistance. Additional 11 problems of unsafe driving (including passing a car on the wrong side of the road) developed in the further course of his response. The officer’s actions fortunately did not lead to any injury or property damage. However, the driving decisions of this same officer had come to the Department’s attention just weeks earlier, resulting in documented counseling and training for him. Additionally, PAPD management had taken pains during the same period to reinforce its expectations about safe driving and adherence to policy across the Department. Against this backdrop, the Department moved forward with a formal Internal Affairs investigation, and eventually disciplined the officer for violations of policy. This second investigation affirmed some of the strong features of the Department’s earlier driving-related case. It saw the Department take initiative even without an overtly negative outcome, treat the issue with an appropriate level of seriousness and formality, and reach a reasonable result. We recognize that less formal counseling and training are often effective and sufficient as managerial interventions. But few aspects of officer performance are as potentially impactful on public and officer safety as driving practices, and the Department was right to give these cases the attention they deserved. Common Issue: Preview of Video and Audio Evidence: As we have indicated in prior reports, PAPD routinely permits officers to review mobile activated video, body camera recordings and any other video or audio recordings of the event prior to being interviewed about allegations of misconduct. As we have also indicated, this preview opportunity runs contrary to best investigative practices and potentially undermines the confidence the public may have in the internal investigations that PAPD conducts of its officers. While we cannot say that the preview of video and audio information to officers under investigation would have changed the results of any particular investigation, the mere opportunity provided officers to view tape recorded conduct ahead of the interview, necessarily shapes consciously or unconsciously how the officer responds to questions in the interview. For that reason, we recommend that PAPD reconsider its current protocols and in situations where the officer’s conduct is under review, not provide a preview of any tape-recorded activity to those officers until they are interviewed. We also recommend that at the conclusion of the interview, officers be provided the opportunity to review any recorded material and then supplement their interview if the review process triggers additional memory or insight into the incident. Recommendation: PAPD should revisit its current protocol of allowing officers to preview recorded activity of the conduct for which they are being investigated and about to be interviewed. 12 III. Taser Case Factual Overview: The one Taser use case of this review period commenced when Palo Alto police officers were asked to respond to an interrupted residential burglary in progress and a search for an outstanding suspect. The officer who ultimately deployed his Taser responded to the area and was assigned a perimeter position. After finding spent bullet casings in the suspect vehicle, it was broadcast via radio that the suspect may be armed. The deploying officer observed the suspect break the perimeter, alerted other officers, and then attempted to detain the suspect. The involved officers reported that the suspect jumped a fence and was then ordered by one of the officers to stop at rifle point, but nonetheless ignored the commands. According to the officers, the suspect then ran from officers while holding an unknown dark object in his left hand and holding his waistband with his right hand. The officers further reported that the suspect refused to comply with their additional orders to stop. According to the deploying officer’s report, the suspect eventually slowed and turned to face the officer with his hands balled into fists. At this point, the officer deployed the Taser for one standard five-second cycle. The probes ended up striking the suspect in the back and buttocks and caused the suspect to fall to the ground, where he was taken into custody. The suspect suffered abrasions to his face, arms, and hands from the fall and had two probes in the back and buttocks region. The suspect was treated at the scene by paramedics, transported to a local hospital for further treatment, and then booked into the jail. Outcome and Analysis: IPA reviewed the reports and related materials and found the investigation of this Taser use to be complete. Worthy of particular note was the inclusion of the Taser download data in the report that corroborated the involved officer’s report on the number and length of the Taser cycle. In addition and to his credit, when the sergeant interviewed the suspect, he also obtained a signed consent to obtain the medical records so that they could be included in the investigative file. When interviewed, the suspect himself said that he was running away from police when he “got Tasered” in the back. According to the suspect, after being struck with the Taser, he fell and hit his chin. The suspect said that officers then got on his back, making it hard for him to breathe. The sole witness officer to the Taser application reported that he was in foot pursuit along with the deploying officer. According to the witness officer’s report, he observed the suspect slow down and begin to turn toward the involved officer, at which point the officer deployed his Taser. The witness officer reported that the Taser caused the suspect to go to the ground. 13 According to the witness officer, the suspect refused to place his hands behind his back and continued to reach into his waistband and pocket area. The witness officer reported that he feared that the suspect was reaching for a weapon but was able to physically restrain him and with two additional officers was able to handcuff him. As for the deploying officer, he provided a detailed explanation for his actions. He reported that after chasing the suspect for approximately 990 feet in full duty gear, and upon observing the suspect apparently preparing for a physical altercation by showing pre-assaultive behavior, the officer considered his fatigue from the foot pursuit, the possibility that the suspect was armed, and the fact that the suspect had been reaching for his waistband. According to the officer’s report, these observations led to his deployment of the Taser. The officer also reported that when he aimed the Taser and began to aim it, the suspect started to turn away; therefore, when the Taser was discharged, the suspect had turned his back on the officer. PAPD determined that the involved officer’s use of the Taser was in compliance with Departmental policy. PAPD further determined that the policy’s requirement that a warning be given when practicable prior to the deployment of the Taser was not feasible during this rapidly evolving circumstance. We concur with this outcome. While the PAPD case analysis is fairly detailed with regard to the decision to deploy the Taser, there were additional tactical considerations that were not included in the supervisor analysis, and which we believe merited documented consideration4: A. The Decision to Chase a Suspect Who Was Thought To Be Armed: Foot pursuits are inherently dangerous and place pursuing officers at a distinct tactical disadvantage. This is particularly true when it is believed, as in this case, that the person being pursued is armed. Rather than closing distance and attempting to apprehend such a suspect, progressive principles of officer safety train officers to “follow to contain,” use cover, and attempt to continue to maintain a visual on the suspect. These principles also train officers to broadcast the foot pursuit, as the officer commendably did in this case, so that other officers can assist in safely developing a perimeter around the fleeing suspect. Other police assets (such as police canines) can be used to more safely apprehend a suspect in these circumstances. In this case, there was no analysis of the potential danger and safety concerns caused by the officers engaging in a foot pursuit of the believed to be armed suspect. Had the suspect in 4 We recognize that the Department could have engaged in an after-action tactical review of this incident in another forum, separate from the formal administrative review of the Taser use and addressed these issues with the involved officers. If such a review occurred, we are not aware of any documentation of such a review. We recommend that any such review, whether during the use of Taser review or in another setting, be documented and retrievable. 14 fact been armed, the decision to close the distance, not continue to seek cover, and move close enough to the suspect to deploy the Taser could have been disastrous from an officer safety perspective. B. The Decision to Deploy a Rifle as a Weapons Choice: In this case, one of the responding officers deployed a rifle in his perimeter position. As a result of this weapons choice, he was not apparently able to effectively transition to a foot pursuit when the suspect began to run and was not on scene to assist when the Taser was deployed. So that Palo Alto can be better prepared to handle the next similar tactical challenge, the issue of the rifle as weapon choice in this case could have been identified and evaluated by the Department’s tactical experts to determine whether a better option existed under these circumstances. IPA would have liked PAPD to explore these additional tactical considerations, particularly the officers’ decision to chase a “believed to be armed” suspect. The point would not be for purposes of discipline, but rather as part of its after-action assessment of this use of force. Given the infrequency of Taser deployments and their historical significance to the community as a source of special concern, this more comprehensive approach is seemingly worthwhile. Recommendation: PAPD should expand its review of Taser use cases to encompass the event more broadly, including any tactical decision-making preceding the Taser deployment. IV. Conclusion Thank you for the continued opportunity to monitor PAPD on behalf of the community it serves. Please feel free to contact us at your convenience with questions or other feedback.